Full text of Federal Reserve Bulletin : March 2001
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Volume 87 □ Number 3 □ March 2001 Federal Reserve BULLETIN Board of Governors of the Federal Reserve System, Washington, D.C. Table of Contents 103 M ONETARY PO LICY REPORT TO THE CONGRESS When the Federal Reserve submitted its previ ous Monetary Policy Report to the Congress, in July 2000, tentative signs of a moderation in the growth of economic activity were emerging after several quarters of extraordinarily rapid expan sion. Indications that the expansion had moder ated from its earlier rapid pace gradually accu mulated during the summer and into the autumn. For a time, this downshifting of growth seemed to have left the economy expanding at a pace roughly in line with that of its potential. Over the last few months of the year, how ever, growth slowed even more, although the dimensions of the slowdown were obscured for a time by the usual lags in the receipt of eco nomic data. Spending on business capital, which had been rising rapidly for several years, flat tened abruptly in the fourth quarter. Consumers clamped down on their outlays for motor vehi cles and other durables, the stocks of which also had climbed to high levels. Manufac turers adjusted production quickly to counter a buildup in inventories. Rising concern about slower growth and worker layoffs contributed to a sharp deterioration of consumer confidence. In response to the accumulating weakness, the Federal Open Market Committee (FOMC) low ered the intended interest rate on federal funds Vi percentage point on January 3 of this year. The FOMC lowered the rate again, by the same amount, at its meeting on January 31. The less restrictive conditions in financial markets, and the underlying strengths of the economy, should lead to a rebound in economic growth. The most notable of the underlying strengths is the remarkable step-up in the growth of structural productivity since the mid-1990s, which seems to be closely related to the spread of new technologies. The impressive perfor mance of productivity and the accompanying environment of low and stable underlying infla tion suggest that the longer-run outlook for the economy is still quite favorable, even though downside risks may remain prominent in the period immediately ahead. 132 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION: THE 2000 ANNUAL REVISION In late 2000, the Federal Reserve Board pub lished the annual revision of its index of indus trial production and related measures of capacity and utilization for the period January 1992 through October 2000. The updated measures reflect the incorporation of newly available, more comprehensive source data, the introduc tion of new production series, and changes in methods. For this revision, two new years of comprehensive data on manufacturing output became available; otherwise, the updating of the data was typical of annual revisions. Total industrial output has increased, on aver age, 5.1 percent per year since 1995, and indus trial capacity has expanded 5.4 percent per year; these revised rates of increase are more rapid than those previously reported. The rate of industrial capacity utilization was little changed by the revision for the third quarter of 2000 but was revised up 0.6 percentage point, to 81.6 per cent, for the fourth quarter of 1999. 149 TREASURY AND FEDERAL RESERVE FOREIGN EXCHANGE OPERATIONS During the fourth quarter of 2000, the dollar appreciated 5.7 percent against the yen and depreciated 6.4 percent against the euro. On a trade-weighted basis, the dollar ended the quar ter 1.0 percent weaker against an index of major currencies. U.S. monetary authorities did not intervene in the foreign exchange markets dur ing the quarter. 154 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION FOR JANUARY 2001 Industrial production fell 0.3 percent in January, to 147.0 percent of its 1992 average; industrial production was 2.4 percent higher than in Janu ary 2000. The rate of capacity utilization for total industry fell to 80.2 percent in January, a level almost 2 percentage points below its 1967-2000 average. 157 Te s t im o n y O f f ic ia l s of federal Report on the feasibility of mandatory subordi nated debt. Recommendations of the Working Group on Public Disclosure. Request for comments on the Basel Committee proposal to amend the capital adequacy frame work and publication of an interagency sum mary of the proposal. Re se r v e Alan Greenspan presents his views on some of the important issues surrounding the outlook for the federal budget and the attendant implications for the formulation of fiscal policy and testifies that the most recent projections, granted their tentativeness, nonetheless make clear that the highly desirable goal of paying off the federal debt is in reach before the end of the decade. He states further that the emerging key fiscal policy need is to address the implications of maintain ing surpluses beyond the point at which publicly held debt is effectively eliminated (Testimony before the Senate Committee on the Budget, January 25, 2001). Revised capital proposal for nonfinancial equity investments. Enforcement actions. 169 L e g a l d evelopm ents Various bank holding company, bank service corporation, and bank merger orders; and pend ing cases. A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as o f January 29, 2001. 161 A n n o u n c e m e n t s Federal Open Market Committee actions and changes in the discount rate. Appointments of new members to the Consumer Advisory Council and designation of a new chair and vice chair. Interim rule defining three categories of finan cial activities. Guidance on anti-money-laundering programs of financial institutions. Preliminary figures on net income of the Federal Reserve Banks for 2000. A3 G u id e to Ta b u l a r P r e s e n t a t io n A4 Domestic Financial Statistics A42 Domestic Nonfinancial Statistics A50 International Statistics A63 G u id e to S t a t is t ic a l S p e c ia l Ta b l e s releases and A64 In d e x tables S t a t is t ic a l to A66 B o ar d of Go verno rs and Staff A68 FEDERAL OPEN M ARKET COMMITTEE AND Final rule on merchant banking activities. STAFF; AD VISORY COUNCILS Final rule on an alternative to the rated debt requirement for financial subsidiaries. A70 FEDERAL RESERVE BOARD PUBLICATIONS Issuance of guidance on supervision of subprime lending. A72 M a p s Adoption of guidelines for customer informa tion security. A74 o f the federal and Fed eral Reserve O f f ic e s reserve S ystem b an k s, bran c h es, P u b l ic a tio n s C o m m it t e e Lynn S. Fox, Chair □ Jennifer J. Johnson □ Karen H. Johnson □ Donald L. Kohn □ Stephen R. Malphrus □ J. Virgil Mattingly, Jr. □ Dolores S. Smith □ Richard Spillenkothen □ Richard C. Stevens □ David J. Stockton 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 Christine S. Griffith, and Publications Services supervised by Linda C. Kyles. Monetary Policy Report to the Congress Report submitted to the Congress on February 13, 2001, pursuant to section 2B o f the Federal Reserve Act M ONETARY PO LICY AND THE E c o n o m ic O u t l o o k When the Federal Reserve submitted its previous Monetary Policy Report to the Congress, in July of 2000, tentative signs of a moderation in the growth of economic activity were emerging following several quarters of extraordinarily rapid expansion. After having increased the interest rate on federal funds through the spring to bring the growth of aggregate demand and potential supply into better alignment and thus contain inflationary pressures, the Federal Reserve had stopped tightening as evidence of an easing of economic growth began to appear. Indications that the expansion had moderated from its earlier rapid pace gradually accumulated during the summer and into the autumn. For a time, this downshifting of growth seemed likely to leave the economy expanding at a pace roughly in line with that of its potential. Over the last few months of the year, however, elements of economic restraint emerged from several directions to slow growth even more. Energy prices, rather than turning down as had been anticipated, kept climbing, raising costs throughout the economy, squeezing business profits, and eroding the income available for discretionary expenditures. Equity prices, after coming off their highs earlier in the year, slumped sharply starting in September, slicing away a portion of household net worth and discouraging the initial offering of new shares by firms. Many businesses encountered tight ening credit conditions, including a widening of risk spreads on corporate debt issuance and bank loans. Foreign economic activity decelerated noticeably in the latter part of the year, contributing to a weakening of the demand for U.S. exports, which also was being restrained by an earlier appreciation in the exchange value of the U.S. dollar. The dimensions of the economic slowdown were obscured for a time by the usual lags in the receipt of economic data, but the situation began to come into sharper focus late in the year as the deceleration steepened. Spending on business capital, which had been rising rapidly for several years, elevating stocks of these assets, flattened abruptly in the fourth quar ter. Consumers clamped down on their outlays for motor vehicles and other durables, the stocks of which also had climbed to high levels. As the demand for goods softened, manufacturers adjusted produc tion quickly to counter a buildup in inventories. Ris ing concern about slower growth and worker layoffs contributed to a sharp deterioration of consumer con fidence. In response to the accumulating weakness, the Federal Open Market Committee (FOMC) low ered the intended interest rate on federal funds Vi per centage point on January 3 of this year. Another rate reduction of that same size was implemented at the close of the most recent meeting of the FOMC at the end of last month. As weak economic data induced investors to revise down their expectations of future short-term interest rates in recent months and as the Federal Reserve eased policy, financial market conditions became more accommodative. Since the November FOMC meeting, yields on many long-term corporate bonds have dropped on the order of a full percentage point, with the largest declines taking place on riskier bonds as the yield spreads on those securities narrowed considerably from their elevated levels. In response, borrowing in long-term credit markets has strength ened appreciably so far in 2001. The less restrictive conditions in financial markets should help lay the groundwork for a rebound in economic growth. That rebound should also be encouraged by under lying strengths of the economy that still appear to be present despite the sluggishness encountered of late. The most notable of these strengths is the remarkable step-up in structural productivity growth since the mid-1990s, which seems to be closely related to the spread of new technologies. Even as the economy slowed in 2000, evidence of ongoing efficiency gains were apparent in the form of another year of rapid advance in output per worker hour in the nonfarm business sector. With households and businesses still in the process of putting recent innovations in place and with technological breakthroughs still occurring, an end to profitable investment opportuni ties in the technology area does not yet seem to be in sight. Should investors continue to seek out emerging 104 Federal Reserve Bulletin □ March 2001 opportunities, the ongoing transformation and expan sion of the capital stock will be maintained, thereby laying the groundwork for further gains in productiv ity and ongoing advances in real income and spend ing. The impressive performance of productivity and the accompanying environment of low and stable underlying inflation suggest that the longer-run out look for the economy is still quite favorable, even though downside risks may remain prominent in the period immediately ahead. M onetary Policy, Financial Markets, and the Economy over the Second H a lf o f 2000 and Early 2001 As described in the preceding Monetary Policy Report to the Congress, the very rapid pace of eco nomic growth over the first half of 2000 was threat ening to place additional strains on the economy’s resources, which already appeared to be stretched thin. Private long-term interest rates had risen con siderably in response to the strong economy, and, in an effort to slow the growth of aggregate demand and thereby prevent a buildup of inflationary pressures, the Federal Reserve had tightened its policy settings substantially through its meeting in May 2000. Over subsequent weeks, preliminary signs began to emerge suggesting that growth in aggregate demand might be slowing, and at its June meeting the FOMC left the federal funds rate unchanged. Further evidence accumulated over the summer to indicate that demand growth was moderating. The rise in mortgage interest rates over the previous year seemed to be damping activity in the housing sector. Moreover, the growth of consumer spending had slowed from the exceptional pace of earlier in the year; the impetus to spending from outsized equity price gains in 1999 and early 2000 appeared to be partly wearing off, and rising energy prices were continuing to erode the purchasing power of house holds. By contrast, business fixed investment still was increasing very rapidly, and strong growth of foreign economies was fostering greater demand for U.S. exports. Weighing this evidence and recognizing that the effects of previous tightenings had not yet been fully felt, the FOMC decided at its meeting in August to hold the federal funds rate unchanged. The Committee remained concerned that demand could continue to grow faster than potential supply at a time when the labor market was already taut, and it saw the balance of risks still tilted toward heightened inflation pressures. The FOMC faced fairly similar circumstances at its October meeting. By then, it had become more appar ent that the growth in demand had fallen to a pace around that of potential supply. Although consumer spending had picked up again for a time, it did not regain the vigor it had displayed earlier in the year, and capital spending, while still growing briskly, had decelerated from its first-half pace. With increases in demand moderating, private employment gains slowed from the rates seen earlier in the year. How ever, labor markets remained exceptionally tight, and the hourly compensation of workers had accelerated to a point at which unit labor costs were edging up despite strong gains in productivity. In addition, siz able increases in energy prices were pushing broad inflation measures above the levels of recent years. Although core inflation measures were at most only creeping up, the Committee felt that there was some risk that the increase in energy prices, which was lasting longer than had seemed likely earlier in the year, would start to leave an imprint on business costs and longer-run inflation expectations, posing the risk that core inflation rates could rise more substantially. Weighing these considerations, the FOMC decided to hold the federal funds rate unchanged at its October meeting. While recognizing that the risks in the out look were shifting, the FOMC believed that the taut ness of labor markets and the rise in energy prices meant that the balance of those risks still was weighted towards heightened inflation pressures, and this assessment was noted in the balance-of-risks statement. By the time of the November FOMC meeting, conditions in the financial markets were becoming less accommodative in some ways, even as the Federal Reserve held the federal funds rate steady. Equity prices had declined considerably over the previous several months, resulting in an erosion of household wealth that seemed likely to restrain con sumer spending going forward. Those price declines, along with the elevated volatility of equity prices, also hampered the ability of firms to raise funds in equity markets and were likely discouraging business investment. Some firms faced more restrictive condi tions in credit markets as well, as risk spreads in the corporate bond market widened significantly for firms with lower credit ratings and as banks tightened the standards and terms on their business loans. Mean while, incoming data indicated that the pace of eco nomic activity had softened a bit further. Still, the growth of aggregate demand apparently had moved only modestly below that of potential supply. More over, while crude oil prices appeared to be topping out, additional inflationary pressures were arising in the energy sector in the form of surging prices for natural gas, and there had been no easing of the Monetary Policy Report to the Congress 105 Selected interest rates Percent — 7.0 — 6.5 — 6.0 — 5.0 Intended federal funds rate Thirty-year Treasury Two-year Treasury Discount rate Three-month Treasury 8/24 10/5 11/16 11/15 12/ 191/3 12/21 1/31 2001 N o t e . The data are daily and extend through February 8, 2001. The dates on the horizontal axis are those of scheduled FOMC meetings and of any intermeeting policy actions. tightness in the labor market. In assessing the evi dence, the members of the Committee felt that the risks to the outlook were coming into closer balance but had not yet shifted decisively. At the close of the meeting, the FOMC left the funds rate unchanged once again, and it stated that the balance of risks continued to point toward increased inflation. How ever, in the statement released after the meeting, the FOMC noted the possibility of subpar growth in the economy in the period ahead. Toward the end of the year, the moderation of economic growth gave way, fairly abruptly, to more sluggish conditions. By the time of the December FOMC meeting, manufacturing activity had softened considerably, especially in motor vehicles and related industries, and a number of industries had accu mulated excessive stocks of inventories. Across a broader set of firms, forecasts for corporate sales and profits in the fourth quarter and in 2001 were being slashed, contributing to a continued decline in equity prices and a further widening of risk spreads on lower-rated corporate bonds. In this environment, growth in business fixed investment appeared to be slowing appreciably. Consumer spending showed signs of decelerating further, as falling stock prices eroded household wealth and consumer confidence weakened. Moreover, growth in foreign economies seemed to be slowing, on balance, and U.S. export performance began to deteriorate. Market interest rates had declined sharply in response to these devel opments. Against this backdrop, the FOMC at its December meeting decided that the risks to the out look had swung considerably and now were weighted toward economic weakness, although it decided to wait for additional evidence on the extent and persis tence of the slowdown before moving to an easier policy stance. Recognizing that the current position of the economy was difficult to discern because of lags in the data and that prospects for the near term were particularly uncertain, the Committee agreed at the meeting that it would be especially attentive over coming weeks to signs that an intermeeting policy action was called for. Additional evidence that economic activity was slowing significantly emerged not long after the December meeting. New data indicated a marked weakening in business investment, and retail sales over the holiday season were appreciably lower than businesses had expected. To contain the resulting buildup in inventories, activity in the manufacturing sector continued to drop. In addition, forecasts of near-term corporate profits were being marked down further, resulting in additional declines in equity prices and in business confidence. Market interest rates continued to fall, as investors became more pessimistic about the economic outlook. Based on these developments, the Committee held a telephone conference call on January 3, 2001, and decided to cut the intended federal funds rate V2 percentage point. Equity prices surged on the announcement, and the Treasury yield curve steepened considerably, ap parently because market participants became more confident that a prolonged downturn in economic growth would likely be forestalled. Following the policy easing, the Board of Governors approved a decrease in the discount rate of a total of Vi percent age point. The Committee’s action improved financial con ditions to a degree. Over the next few weeks, equity prices rose, on net. Investors seemed to become less wary of credit risk, and yield spreads narrowed across most corporate bonds even as the issuance of these 106 Federal Reserve Bulletin □ March 2001 securities picked up sharply. But in some other respects, investors remained cautious, as evidenced by widening spreads in commercial paper markets. Incoming data pointed to further weakness in the manufacturing sector and a sharp decline in con sumer confidence. Moreover, slower U.S. growth appeared to be spilling over to several important trading partners. In late January, the FOMC cut the intended federal funds rate Vi percentage point while the Board of Governors approved a decrease in the discount rate of an equal amount. Because of the significant erosion of consumer and business con fidence and the need for additional adjustments to production to work off elevated inventory levels, the FOMC indicated that the risks to the outlook contin ued to be weighted toward economic weakness. Economic Projections fo r 2001 Although the economy appears likely to be sluggish over the near term, the members of the Board of Governors and the Reserve Bank presidents expect stronger conditions to emerge as the year progresses. For 2001 overall, the central tendency of their fore casts of real GDP growth is 2 percent to 2l/ i percent, measured as the change from the fourth quarter of 2000 to the fourth quarter of 2001. With growth falling short of its potential rate, especially in the first half of this year, unemployment is expected to move up a little further. Most of the governors and Reserve Bank presidents are forecasting that the average unemployment rate in the fourth quarter of this year will be about 4Vi percent, still quite low by historical standards. The rate of economic expansion over the near term will depend importantly on the speed at which inven tory overhangs that developed over the latter part Economic projections for 2001 Percent ffXii jp ,, Change, fourth quarter to fourth quarter1 jijjjj I Nominal GDP ! Real GDP2 .......... j PCE chain-type price index __ 1 Average level, fourth quarter Civilian unemployment rate__ ___________________ ..... A 1. Change from average for fourth quarter of 2000 to average for fourth quarter of 2001. 2. Chain-weighted. of 2000 are worked off. Gains in information tech nology have no doubt enabled businesses to respond more quickly to a softening of sales, which has steepened the recent production cuts but should also damp the buildup in inventories and facilitate a turnaround. The motor vehicle industry made some progress toward reducing excess stocks in January owing to a combination of stronger sales and a fur ther sharp cutback in assemblies. In other parts of manufacturing, the sizable reductions in production late last year suggest that producers in general were moving quickly to get output into better alignment with sales. Nevertheless, stocks at year-end were above desired levels in a number of industries. Once inventory imbalances are worked off, produc tion should become more closely linked to the pros pects for sales. Household and business expenditures have decelerated markedly in recent months, and uncertainties about how events might unfold are con siderable. But, responding in part to the easing of monetary policy, financial markets are shifting away from restraint, and this shift should create a more favorable underpinning to the expected pickup in the economy as the year progresses. The sharp drop in mortgage interest rates since May of last year appears to have stemmed the decline in housing activity; it also has enabled many households to refinance existing mortgages at lower rates, an action that should free up cash for added spending. Conditions of business finance also have eased to some degree. Interest rates on investment-grade corporate bonds have recently fallen to their lowest levels in about 1 V2 years. Moreover, the premiums required of bond issuers that are perceived to be at greater risk have dropped back in recent weeks from the elevated levels of late 2000. As credit conditions have eased, firms have issued large amounts of corporate bonds so far in 2001. However, considerable caution is evident in the commercial paper market and among banks, whose loan officers have reported a further tightening of lending conditions since last fall. In equity markets, prices have recently dropped in response to negative reports on corporate earnings, reversing the gains that took place in January. The restraint on domestic demand from high energy prices is expected to ease in coming quarters. Natural gas prices have dropped back somewhat in recent weeks as the weather has turned milder, and crude oil prices also are down from their peaks. Although these prices could run up again in conjunc tion with either a renewed surge in demand or disrup tions in supply, participants in futures markets are anticipating that prices will be trending gradually lower over time. A fall in energy prices would relieve Monetary Policy Report to the Congress cost pressures on businesses to some degree and would leave more discretionary income in the hands of households. How quickly investment spending starts to pick up again will depend not only on the cost of finance but also on the prospective rates of return to capital. This past year, expectations regarding the prospects of some high-tech companies clearly declined, and capi tal spending seems unlikely to soon regain the excep tional strength that was evident in the latter part of the 1990s and for a portion of last year. From all indications, however, technological advance still is going forward at a rapid pace, and investment will likely pick up again if, as expected, the expansion of the economy gets back on more solid footing. Private analysts are still anticipating high rates of growth in corporate earnings over the long-run, suggesting that the current sluggishness of the economy has not undermined perceptions of favorable long-run fundamentals. The degree to which increases in exports might help to support the U.S. economy through a stretch of sluggishness has become subject to greater uncer tainty recently because foreign economies also seem to have decelerated toward the end of last year. However, the expansion of imports has slowed sharply, responding in part to the softening of domes tic demand growth. In effect, some of the slowdown in demand in this country is being shifted to foreign suppliers, implying that the adjustments required of domestic producers are not as great as they otherwise would have been. In adjusting labor input to the slowing of the economy, businesses are facing conflicting pressures. Speedy adjustment of production and ongoing gains in efficiency argue for cutbacks in labor input, but companies are also reluctant to lay off workers that have been difficult to attract and retain in the tight labor market conditions of the past few years. In the aggregate, the balance that has been struck in recent months has led, on net, to slower growth of employ ment, cutbacks in the length of the average work week, and, in January of this year, a small increase in the unemployment rate. Inflation is not expected to be a pressing concern over the coming year. Most of the governors and Reserve Bank presidents are forecasting that the rise in the chain-type price index for personal consump tion expenditures will be smaller than the price rise in 2000. The central tendency of the range of forecasts is l 3/4 percent to 2Va percent. Inflation should be restrained this coming year by an expected downturn in energy prices. In addition, the reduced pressure on resources that is associated with the slowing of the 107 economy should help damp increases in labor costs and prices. ECONOMIC AND FINANCIAL DEVELOPMENTS IN 2000 AND EARLY 2001 The combination of exceptionally strong growth in the first half of 2000 and subdued growth in the second half resulted in a rise in real GDP of about 3V2 percent for the year overall. Domestic demand started out the year with incredible vigor but deceler ated thereafter and was sluggish by year-end. Exports surged for three quarters and then faltered. In the labor market, growth of employment slowed over the year but was sufficient to keep the unemployment rate around the lowest sustained level in more than thirty years. Core inflation remained low in 2000 in the face of sharp increases in energy prices. Although the chaintype price index for personal consumption expendi tures (PCE) moved up faster than in 1999, it showed only a slight step-up in the rate of increase after excluding the prices of food and energy. Unit labor costs picked up moderately, adding to the cost pres sures from energy, but the ability of businesses to raise prices was restrained by the slowing of the economy and the persistence of competitive pricing conditions. The H ousehold Sector Personal consumption expenditures increased 4xh per cent in real terms in 2000 after having advanced Change in real GDP N o t e . Here and in subsequent charts, except as noted, annual changes are measured from Q4 to Q4, and change for a half-year is measured between its final quarter and the final quarter of the preceding period. 108 Federal Reserve Bulletin □ March 2001 Change in PCE chain-type price index 1994 1996 1998 2000 Note . Data are for personal consumption expenditures (PCE). 5 percent in 1998 and 5 V2 percent in 1999. A large portion of last year’s gain came in the first quarter, when consumption moved ahead at an unusually rapid pace. The increase in consumer spending over the remainder of the year was moderate, averaging about 3Vi percent at an annual rate. Consumer out lays for motor vehicles and parts surged to a record high early in 2000 but reversed that gain over the remainder of the year; sales of vehicles tailed off especially sharply as the year drew to a close. Real consumer purchases of gasoline fell during the year in response to the steep run-up in gasoline prices. Most other broad categories of goods and services posted sizable gains over the year as a whole, but results late in the year were mixed: Real outlays for goods other than motor vehicles eked out only a small gain in the fourth quarter, while real outlays for consumer services rose very rapidly, not only because of higher outlays for home heating fuels during a spell of colder-than-usual weather but also because of continued strength in real outlays for other types of services. Changes in income and wealth provided less sup port to consumption in 2000 than in other recent years. Real disposable personal income rose about 2 i/4 percent last year after a gain of slightly more than 3 percent in 1999. Disposable income did not rise quite as much in nominal terms as it had in 1999, and rising prices eroded a larger portion of the nominal gain. Meanwhile, the net worth of households turned down in 2000 after having climbed rapidly for sev eral years, as the effect of a decline in the stock market was only partially offset by a sizable increase in the value of residential real estate. With the peak in stock prices not coming until the year was well under way, and with valuations having previously been on a sharp upward course for an extended period, stock market wealth may well have continued to exert a strong positive effect on consumer spending for sev eral months after share values had topped out. As time passed, however, the impetus to consumption from this source most likely diminished. The per sonal saving rate, which had dropped sharply during Wealth and saving Ratio Wealth-to-income ratio Percent Change in real income and consumption Personal saving rate Percent, annual rate I | Disposable personal income ■ Personal consumption expenditures 14 12 __ „ — 6 10 8 6 4 2 + 0 N ote . The wealth-to-income ratio is the ratio of household net worth to disposable personal income and extends through 2000:Q3; the personal saving rate extends through 2000:Q4. Monetary Policy Report to the Congress the stock market surge of previous years, fell further in 2000, but the rate of decline slowed, on average, after the first quarter. Even with real income growth slowing and the stock market turning down, consumers maintained a high degree of optimism through most of 2000 regarding the state of the economy and the economic outlook. Indexes of sentiment from both the Univer sity of Michigan Survey Research Center and the Conference Board rose to new peaks in the first quarter of the year, and the indexes remained close to those levels for several more months. Survey read ings on personal finances, general business condi tions, and the state of the labor market remained generally favorable through most of the year. As of late autumn, only mild softness could be detected. Toward year-end, however, confidence in the econ omy dropped sharply. Both of the indexes of confi dence showed huge declines over the two months ended in January. The marked shift in attitudes toward year-end probably was brought on by a com bination of developments, including the weakness in the stock market over the latter part of the year and more frequent reports of layoffs. Real outlays for residential investment declined about 2lA percent, on net, over the course of 2000, as construction of new housing dropped back from the elevated level of the previous year. Investment in housing was influenced by a sizable swing in mortgage interest rates as well as by slower growth of employment and income and the downturn in the stock market. After having moved up appre ciably in 1999, mortgage rates continued to advance through the first few months of 2000. By mid-May, the average commitment rate on conventional fixedrate mortgages was above percent, up roughly 1Vi percentage points from the level of a year earlier. 109 New construction held up even as rates were rising in 1999 and early 2000, but it softened in the spring of last year. Starts and permits for single-family houses declined from the first quarter to the third quarter. But even as homebuilding activity was turning down, conditions in mortgage markets were moving back in a direction more favorable to housing. From the peak in May, mortgage interest rates fell substan tially over the remainder of the year and into the early part of 2001, reversing the earlier increases. Sales of new homes firmed as rates turned down, and prices of new houses continued to trend up faster than the general rate of inflation. Inventories of unsold new homes held fairly steady over the year and were up only moderately from the lows of 1997 and 1998. With demand well-maintained and inventories under control, activity stabilized. Starts and permits for single-family houses in the fourth quarter of 2000 were up from the average for the third quarter. Households continued to borrow at a brisk pace last year, with household debt expanding an esti mated 83/4 percent, well above the growth rate of disposable personal income. Consumer credit increased rapidly early in the year, boosted by strong outlays on durable goods; but as consumer spending cooled later in the year, the expansion of consumer credit slowed. For the year as a whole, consumer credit is estimated to have advanced more than 8 V2 percent, up from the 7 percent pace of 1999. Households also took on large amounts of mortgage debt, which grew an estimated 9 percent last year, reflecting the solid pace of home sales. With the rapid expansion of household debt in recent years, the household debt service burden has Delinquency rates on household loans Change in real residential investment Credit card accounts at banks ’ Auto loans at domestic auto finance companies Mortgages N ote . The data are quarterly and extend through 2000:Q3. Data on creditcard delinquencies are from bank Call Reports; data on auto loan delinquencies are from the Big Three automakers; data on mortgage delinquencies are from the Mortgage Bankers Association. 110 Federal Reserve Bulletin □ March 2001 increased to levels not seen since the late 1980s. Even so, with unemployment low and household net worth high, the credit quality of the household sector appears to have deteriorated little last year. Personal bankruptcy filings held relatively steady and remain well below their peak from several years ago. Delin quency rates on home mortgages, credit cards, and auto loans have edged up in recent quarters but are at most only slightly above their levels of the fourth quarter of 1999. Lenders did not appear to be signifi cantly concerned about the credit quality of the household sector for most of last year, although some lenders have become more cautious of late. Accord ing to surveys of banks conducted by the Federal Reserve, few commercial banks tightened lending conditions on consumer installment loans and mort gage loans to households over the first three quarters of 2000. However, the most recent survey indicates that a number of banks tightened standards and terms on consumer loans, particularly non-credit-card loans, over the past several months, perhaps because of some uneasiness about how the financial position of households will hold up as the pace of economic activity slows. The Business Sector Real business fixed investment rose 10 percent in 2000 according to the advance estimate from the Commerce Department. Investment spending shot ahead at an annual rate of 21 percent in the first quarter of the year; its strength in that period came, in part, from high-tech purchases that had been delayed from 1999 by companies that did not want their operating systems to be in a state of change at the onset of the new millennium. Expansion of invest ment was slower but still relatively brisk in the Change in real business fixed investment second and third quarters, at annual rates of about 15 percent and 8 percent respectively. In the fourth quarter, however, capital spending downshifted abruptly in response to the slowing economy, tighten ing financial conditions, and rising concern about the prospects for profits; the current estimate shows real investment outlays having fallen at an annual rate of 1J/2 percent in that period. Fixed investment in equipment and software was up 9 V2 percent in 2000, with the bulk of the gain coming in the first half of the year. Spending slowed to a rate of growth of about 5lA percent in the third quarter and then declined in the fourth quarter. Busi ness investment in motor vehicles fell roughly 15 per cent, on net, during 2000, with the largest portion of the drop coming in the fourth quarter; the declines in real outlays on larger types of trucks were particu larly sizable. Investment in industrial equipment, tracking the changing conditions in manufacturing, also fell in the fourth quarter but was up appreciably for the year overall. Investment in high-tech equip ment decelerated over the year but was still expand ing in the fourth quarter: Real outlays for telecommu nications equipment posted exceptionally large gains in the first half of the year, flattened out temporarily in the third quarter, and expanded again in the fourth. Spending on computers and peripherals increased, in real terms, at an average rate of about 45 percent over the first three quarters of the year but slowed abruptly to a 6 percent rate of expansion in the year’s final quarter, the smallest quarterly advance in several years. Investment in nonresidential structures rose sub stantially in 2000, about 1 2 V2 percent in all, after having declined P /4 percent in 1999. Investment in factory buildings, which had fallen more than 20 per cent in 1999 in an apparent reaction to the economic disruptions abroad and the associated softness in demand for U.S. exports, more than recouped that decline over the course of 2000. Real outlays for office construction, which had edged down in 1999 after several years of strong advance, got back on track in 2000, posting a gain of about 13 V2 percent. Real investment in commercial buildings other than offices was little changed after moderate gains in the two previous years. Spending on structures used in drilling for energy strengthened in response to the surge in energy prices. Business inventory investment was subdued early in the year when final sales were surging; aggregate inventory-sales ratios, which have trended lower in recent years as companies became more efficient at managing stocks, edged down further. As sales mod erated in subsequent months, production growth did Monetary Policy Report to the Congress Change in real nonfarm business inventories Before-tax profits Percent, annual rate 1994 1996 1998 111 Percent o f nominal GDP 2000 N ote . Profits from domestic operations of nonfinancial corporations, with inventory valuation and capital consumption adjustments, divided by gross domestic product of nonfinancial corporate sector. The data extend through 2000:Q3. not decelerate quite as quickly, and inventories began to rise more rapidly. Incoming information through the summer suggested that some firms might be encountering a bit of backup in stocks but that the problems were not severe overall. In the latter part of the year, however, inventory-sales ratios turned up, indicating that more serious overhangs were develop ing. Responding to the slowing of demand and the increases in stocks, manufacturers reduced output in each of the last three months of the year by suc cessively larger amounts. Businesses also began to clamp down on the flow of imports. Despite those adjustments, stocks in a number of domestic indus tries were likely well above desired levels as the year drew to a close. The Commerce Department’s compilation of busi ness profits currently extends only through the third quarter of 2000, but these data show an evolving pattern much like that of other economic data. After having risen at an annual rate of more than 16 percent in the first half of the year, U.S. corporations’ eco nomic profits—that is, book profits with inventory and capital consumption adjustments—slowed to less than a 3 percent rate of growth in the third quarter. Profits from operations outside the United States continued to increase rapidly in the third quarter. However, economic profits from domestic operations edged down in that period, as solid gains for financial corporations were more than offset by a 4 percent rate of decline in the profits of nonfinancial corporations. Profits of nonfinancial corporations as a share of their gross nominal output rose about Vi percentage point in the first half of 2000 but reversed part of that gain in the third quarter. Earnings reports for the fourth quarter indicate that corporate profits fell sharply in that period. Business debt expanded strongly over the first half of 2000, propelled by robust capital spending as well as by share repurchases and cash-financed merger activity. The high level of capital expenditures out stripped internally generated funds by a considerable margin despite continued impressive profits. To meet their borrowing needs, firms tapped commercial paper, bank loans, and corporate bonds in volume in the first quarter. The rapid pace of borrowing contin ued in the second quarter, although borrowers relied more heavily on bank loans and commercial paper to meet their financing needs in response to a rise in longer-term interest rates. Business borrowing slowed appreciably in the sec ond half of the year. As economic growth moderated and profits weakened, capital spending decelerated Default rate on outstanding junk bonds average. 112 Federal Reserve Bulletin □ March 2001 Net interest payments of nonfinancial corporations relative to cash flow Spreads of corporate bond yields over the ten-year swap rate ----------1 1980 1984 1988 1992 1996 2000 N ote . The data are quarterly and extend through 2000:Q3. sharply. In addition, firms held down their borrowing needs by curbing their buildup of liquid assets, which had been accumulating quite rapidly in previous quar ters. Borrowing may have been deterred by a tighten ing of financial conditions for firms with lower credit ratings, as investors and lenders apparently became more concerned about credit risk. Those concerns likely were exacerbated by indications that credit quality had deteriorated at some businesses. The default rate on high-yield bonds continued to climb last year, reaching its highest level since 1991. Some broader measures of credit quality also slipped. The amount of nonfinancial debt downgraded by Moody’s Investor Services in 2000 was more than twice as large as the amount upgraded, and the delinquency rate on business loans at commercial banks continued to rise over the year. But while some firms were clearly having financial difficulties, many other firms remained soundly positioned to service their debt. Indeed, the ratio of net interest payments to cash flow for all nonfinancial firms moved only modestly above the relatively low levels of recent years. As concerns about risk mounted, lenders became more cautious about extending credit to some bor rowers. An increasingly large proportion of banks reported firming terms and standards on business loans over the course of the year. In the corporate bond market, yield spreads on high-yield and lower rated investment-grade bonds, measured relative to the ten-year swap rate, began climbing sharply in September and by year-end were at levels well above those seen in the fall of 1998. Lower-rated com mercial paper issuers also had to pay unusually large premiums late in the year, particularly on paper spanning the year-end. As financial conditions 1 t 1998 1 1 t AA i l l 1999 i i 2000 i U 1 1 2001 Note . The data are daily and extend through February 8, 2001. The spreads compare the yields on the Merrill Lynch AA, BBB, and 175 indexes with the ten-year swap rate. became more stingent, issuance of high-yield debt was cut back sharply in the fourth quarter, although investment-grade bond issuance remained strong. Bank lending to businesses was also light at that time, and net issuance of commercial paper came to a standstill. In total, the debt of nonfinancial businesses expanded at an estimated 5Vi percent rate in the fourth quarter, less than half the pace of the first half of the year. The slowdown in borrowing in the latter part of the year damped the growth of nonfinancial business debt over 2000, although it still expanded an estimated 8 3A percent. In early 2001, borrowing appears to have picked up from its sluggish fourth-quarter pace. Following the easing of monetary policy in early January, yield spreads on corporate bonds reversed a considerable portion of their rise over the latter part of 2000, with spreads on high-yield bonds narrowing more than a percentage point. As yields declined, corporate bond issuance picked up, and even some below-investment grade issues were brought to the market. In contrast, investors in the commercial paper market apparently became more concerned about credit risk, partly in response to the defaults of two California utilities on some bonds and commercial paper in mid-January related to the difficulties in the electricity market in that state. After those defaults, spreads between toptier and second-tier commercial paper widened fur ther, and investors became more discriminating even within the top rating tier. Some businesses facing resistance in the commercial paper market reportedly met their financing needs by tapping backup credit lines at banks. Monetary Policy Report to the Congress 113 Change in real government expenditures on consumption and investment Major components of net business financing Billions of dollars I I Commercial paper I f~] Federal ■ State and local Bonds 1999 — 6 2000 N ote . Seasonally adjusted annual rate for nonfarm nonfinancial corporate businesses. Components for 2000:Q4 are estimated. Growth in commercial mortgage debt slowed last year to an estimated rate of 9 lA percent, and issuance of commercial-mortgage-backed securities in 2000 fell back from its 1999 pace. Spreads on lower-rated commercial-mortgage-backed securities over swap rates widened by a small amount late in the year, and banks on net reported tightening their standards on commercial real estate credit over the year. Neverthe less, fundamentals in the commercial real estate mar ket remain solid, and delinquency rates on commer cial mortgages stayed around their historic lows. The Government Sector Real consumption and investment expenditures of federal, state, and local governments, the part of government spending that is included in GDP, rose only \ lA percent in the aggregate during 2000. The increase was small partly because the consumption and investment expenditures of the federal gov ernment had closed out 1999 with a large increase in advance of the century date change. Federal pur chases in the fourth quarter of 2000 were about 1 percent below the elevated level at year-end 1999. Abstracting from the bumps in the spending data, the underlying trend in real federal consumption and investment outlays appears to have been mildly posi tive over the past couple of years. The consumption and investment expenditures of state and local gov ernments rose about 2 Vi percent in 2000 after an unusually large increase of 4 lA percent in 1999. The slowdown in spending was mainly a reflection of a downshift in government investment in structures, which can be volatile from year to year and had posted a large gain in 1999. Total federal spending, as reported in the unified budget, rose 5 percent in fiscal year 2000, the larg est increase in several years. A portion of the rise stemmed from shifts in the timing of some outlays in a way that tended to boost the tally for fiscal 2000. But even allowing for those shifts, the rise in spend ing would have exceeded the increases of other recent years. Outlays accelerated for most major functions, including defense, health, social security, and income security. Of these, spending on health—about threefourths of which consists of outlays for Medicaid— recorded the biggest increase. Medicaid grants to the states were affected last fiscal year by increased fund ing for the child health insurance initiative that was passed in 1997 and by a rise in the portion of Medi caid expenses picked up by the federal government. Spending on agriculture rose very sharply for a third year but not as rapidly as in fiscal 1999. The ongoing paydown of debt by the federal government led to a Federal receipts and expenditures Percent o f nominal GDP ---- 24 1982 1985 1988 1991 1994 1997 2000 N ote . The data are from the unified budget and are for fiscal years. 114 Federal Reserve Bulletin □ March 2001 decline of nearly 3 percent in net interest payments in fiscal 2000 after a somewhat larger drop in these payments in fiscal 1999. Federal receipts increased 103/4 percent in fiscal year 2000, the largest advance in more than a decade. The increase in receipts from taxes on the income of individuals amounted to more than 14 percent. In most recent years, these receipts have grown much faster than nominal personal income as measured in the national income and product accounts. One important factor in the difference is that rising levels of income and a changing distribution have shifted more taxpayers into higher tax brackets; another is an increase in revenues from taxes on capital gains and other items that are not included in personal income. Receipts from the taxation of corporate profits also moved up sharply in fiscal 2000, rebounding from a small decline the previous fiscal year. With fed eral receipts rising much faster than spending, the surplus in the unified budget rose to $236 billion in fiscal 2000, nearly double that of fiscal 1999. The on-budget surplus, which excludes surpluses accumu lating in the social security trust fund, rose from essentially zero in fiscal 1999 to $86 billion in fiscal 2000. Excluding net interest payments, a charge resulting from past deficits, the surplus in fiscal 2000 was about $460 billion. Federal saving, which is basically the federal bud get surplus adjusted to conform to the accounting practices followed in the national income and product accounts, amounted to about 3l/2 percent of nominal GDP over the first three quarters of 2000. This figure has been rising roughly 1 percentage point a year over the past several years. Mainly because of that rise in federal saving, the national saving rate has been running at a higher level in recent years than was observed through most of the 1980s and first half of the 1990s, even as the personal saving rate has plunged. The rise in federal saving has kept interest rates lower than they otherwise would have been and has contributed, in turn, to the rapid growth of capital investment and the faster growth of the economy’s productive potential. The burgeoning federal budget surplus allowed the Treasury to pay down its debt last year at an even faster pace than in recent years. As of the end of fiscal 2000, the stock of marketable Treasury debt outstanding had fallen about $500 billion from its peak in 1997. The existing fiscal situation and the anticipation that budget surpluses would continue led the Treasury to implement a number of debt man agement changes during 2000, many designed to preserve the liquidity of its securities. In particular, the Treasury sought to maintain large and regular offerings of new securities at some key maturities, because such attributes are thought to importantly contribute to market liquidity. In part to make room for continued sizable auctions of new securities, the Treasury initiated a debt buyback program through which it can purchase debt that it previously issued. In total, the Treasury conducted twenty buyback operations in 2000, repurchasing a total of $30 billion par value of securities with maturities ranging from twelve to twenty-seven years. Those operations were generally well received and caused little disruption to the market. Going forward, the Treasury intends to conduct two buyback operations per month and expects to repurchase about $9 billion par value of National saving Federal government debt held by the public Note . National saving comprises the gross saving of households, businesses, and governments. The data extend through 2000:Q3. N ote . The data are as of the end of the fiscal year. Excludes debt held in federal government accounts and by the Federal Reserve System. Monetary Policy Report to the Congress outstanding securities in each of the first two quarters of 2001. Despite conducting buybacks on that scale, the Treasury had to cut back considerably its issuance of new securities. To still achieve large sizes of indi vidual issues at some maturities, the Treasury imple mented a schedule of regular reopenings—in which it auctions additional amounts of a previously issued security instead of issuing a new one—for its five-, ten-, and thirty-year instruments. Under that sched ule, every other auction of each of those securities is a smaller reopening of the previously auctioned secu rity. At other maturities, the Treasury reduced the sizes of its two-year notes and inflation-indexed secu rities and eliminated the April auction of the thirtyyear inflation-indexed bond. In addition, the Treasury recently announced that it would stop issuing oneyear bills following the February auction, after hav ing cut back the frequency of new offerings of that security last year. These reductions in the issuance of Treasury secu rities have caused the Federal Reserve to modify some of its procedures for obtaining securities at Treasury auctions, as described in detail below. In addition, the Treasury made changes in the rules for auction participation by foreign and international monetary authority (FIMA) accounts, which prima rily include foreign central banks and governmental monetary entities. The new rules, which went into effect on February 1, 2001, impose limits on the size of non-competitive bids from individual FIMA accounts and on the total amount of such bids that will be awarded at each auction. These limits will leave a larger pool of securities available for com petitive bidding at the auctions, helping to maintain the liquidity and efficiency of the market. More over, FIMA purchases will be subtracted from the total amount of securities offered, rather than being added on as they were in some previous instances, making the amount of funds raised at the auction more predictable. State and local government debt increased little in 2000. Gross issuance of long-term municipal bonds was well below the robust pace of the past two years. Refunding offerings were held down by higher inter est rates through much of the year, and the need to raise new capital was diminished by strong tax reve nues. Net issuance was also damped by an increase in the retirement of bonds from previous refunding activity. Credit quality in the municipal market improved considerably last year, with credit upgrades outnumbering downgrades by a substantial margin. The only notable exception was in the not-for-profit health care sector, where downgrades predominated. 115 The External Sector Trade and Current Account The current account deficit reached $452 billion (annual rate) in the third quarter of 2000, or 4.5 per cent of GDP, compared with $331 billion and 3.6 per cent for 1999. Most of the expansion in the current account deficit occurred in the balance of trade in goods and services. The deficit on trade in goods and services widened to $383 billion (annual rate) in the third quarter from $347 billion in the first half of the year. Data for trade in October and November sug gest that the deficit may have increased further in the fourth quarter. Net payments on investments were a bit less during the first three quarters of 2000 than in the second half of 1999 owing to a sizable increase in income receipts from direct investment abroad. U.S. exports of goods and services rose an esti mated 7 percent in real terms during 2000. Exports surged during the first three quarters, supported by a pickup in economic activity abroad that began in 1999. By market destination, U.S. exports were strongest to Mexico and countries in Asia. About 45 percent of U.S. goods exports were capital equip ment, 20 percent were industrial supplies, and roughly 10 percent each were agricultural, automo tive, consumer, and other goods. Based on data for October and November, real exports are estimated to have declined in the fourth quarter, reflecting in part a slowing of economic growth abroad. This decrease was particularly evident in exports of capital goods, automotive products, consumer goods, and agricul tural products. The quantity of imported goods and services expanded rapidly during the first three quarters of U.S. current account 1980 1984 1988 1992 1996 2000 _________________________________________ N ote . The observation for 2000 is the average of the first three quarters. 116 Federal Reserve Bulletin □ March 2001 Change in real imports and exports of goods and services and a high above $37 per barrel in September. Strong demand—driven by robust world economic growth— kept upward pressure on oil prices even as world supply increased considerably. Over the course of 2000, OPEC raised its official production targets by 3.7 million barrels per day, reversing the production cuts made in the previous two years. Oil production from non-OPEC sources rebounded as well. During the last several weeks of 2000, oil prices fell sharply as market participants became convinced that the U.S. economy was slowing. In early 2001, however, oil prices moved back up when OPEC announced a planned production cut of 1.5 million barrels per day. Financial Account 2000, reflecting the continuing strength of U.S. domestic demand and the effects of past dollar appre ciation on price competitiveness. Increases were widespread among trade categories. Based on data for October and November, real imports of goods and services are estimated to have risen only slightly in the fourth quarter. Moderate increases in imported consumer and capital goods were partly offset by declines in other categories of imports, particularly industrial supplies and automotive products, for which domestic demand had softened. The price of non-oil imports is estimated to have increased by less than 1 percent during 2000. The price of imported oil rose nearly $7 per barrel over the four quarters of 2000. During the year, oil prices generally remained high and volatile, with the spot price of West Texas intermediate (WTI) crude fluctuating between a low of $24 per barrel in April Prices of oil and other commodities N ote . The data are monthly; the last observation for oil is the average of trading days through February 8, 2001; the last observation for other commodi ties is November 2000. The oil price is the spot price of West Texas intermediate crude oil. The price of other commodities is a weighted average of thirty-nine nonfuel primary-commodity prices from the International Monetary Fund. The counterpart to the increased U.S. current account deficit in 2000 was an increase in net capital inflows. As in 1999, U.S. capital flows in 2000 reflected the relatively strong cyclical position of the U.S. econ omy for most of the year and the global wave of corporate mergers. Foreign private purchases of U.S. securities were exceptionally robust—well in excess of the record set in 1999. The composition of U.S. securities purchased by foreigners continued the shift away from Treasuries as the U.S. budget surplus, and the attendant decline in the supply of Treasuries, lowered their yield relative to other debt. Last year private foreigners sold, on net, about $50 billion in Treasury securities, compared with net sales of $20 billion in 1999. Although sizable, these sales were slightly less than what would have occurred had foreigners reduced their holdings in proportion to the reduction in Treasuries outstanding. The increased sale of Treasuries was fully offset by larger foreign purchases of U.S. securities issued by governmentsponsored agencies. Net purchases of agency securi ties topped $110 billion, compared with the pre vious record of $72 billion set in 1999. In contrast to the shrinking supply of Treasury securities, U.S. government-sponsored agencies accelerated the pace of their debt issuance. Private foreign purchases of U.S. corporate debt grew to $180 billion, while net purchases of U.S. equities ballooned to $170 billion compared with $108 billion in 1999. The pace of foreign direct investment inflows in the first three quarters of 2000 also accelerated from the record pace of 1999. As in the previous two years, direct investment inflows were driven by for eign acquisition of U.S. firms, reflecting the global strength in merger and acquisition activity. Of the roughly $200 billion in direct investment inflows in the first three quarters, about $100 billion was Monetary Policy Report to the Congress directly attributable to merger activity. Many of these mergers were financed, at least in part, by an exchange of equity, in which shares in the U.S. firm were swapped for equity in the acquiring firm. Although U.S. residents generally appear to have sold a portion of the equity acquired through these swaps, the swaps likely contributed significantly to the $97 billion capital outflow attributed to U.S. acqui sition of foreign securities. U.S. direct investment abroad was also boosted by merger activity and totaled $117 billion in the first three quarters of 2000, a slightly faster pace than that of 1999. Capital inflows from foreign official sources totaled $38 billion in 2000—a slight increase from 1999. Nearly all of the official inflows were attributable to reinvested interest earnings. Modest official sales of dollar assets associated with foreign exchange inter vention were offset by larger inflows from some non-OPEC oil exporting countries, which benefited from the elevated price of oil. The Labor M arket Nonfarm payroll employment increased about IV2 percent in 2000, measured on a December-toDecember basis. The job count had risen slightly more than 2 percent in 1999 and roughly 2Vi percent a year over the 1996-98 period. Over the first few months of 2000, the expansion of jobs proceeded at a faster pace than in 1999, boosted both by the federal government’s hiring for the decennial Census and by a somewhat faster rate of job creation in the private sector. Indications of a moderation in private hiring started to emerge toward mid-year, but because of volatility of the incoming data a slowdown could not be identified with some confidence until late summer. Net change in payroll employment Thousands o f jobs, m onthly average 1991 1993 N o t e . Private nonfarm. 1995 1997 1999 2001 117 Measures of labor utilization — 6 I Civilian unem ploym ent rate — — 3 I I I 1 1 I I I I I I 11 I I I I I 1 I I I I I I I I 1 I 11 I 1 1971 1981 1991 2001 N o t e . The augented unemployment rate is the number of unemployed plus those who are not in the labor force and want a job, divided by the civilian labor force plus those who are not in the labor force and want a job. The break in data at January 1994 marks the introduction of a redesigned survey; data after that point are not directly comparable with those of earlier periods. The data extend through January 2001. Over the remainder of the year monthly increases in private employment stepped down further. Job growth came almost to a stop in December, when severe weather added to the restraint from a slowing economy. In January of this year, employment picked up, but the return of milder weather apparently accounted for a sizable portion of the gain. Employment rose moderately in the private service-producing sector of the economy in 2000, about 2 percent overall after an increase of about 3 percent in 1999. In the fourth quarter, however, hiring in the services-producing sector was relatively slow, in large part because of a sizable decline in the number of jobs in personnel supply—a category that includes temporary help agencies. Employment in construction increased about V h percent in 2000 after several years of gains that were considerably larger. The number of jobs in manufacturing was down for a third year, owing to reductions in factory employment in the second half of the year, when manufacturers were adjusting to the slowing of demand. Those adjustments in manufacturing may also have involved some cutbacks in the employment of temporary hires, which would help to account for the sharp job losses in personnel supply. The average length of the workweek in manufacturing was scaled back as well over the second half of the year. The slowing of the economy did not lead to any meaningful easing in the tightness of the labor market in 2000. The household survey’s measure of the number of persons employed rose 1 percent, about in line with the expansion of labor supply. On net, the unemployment rate changed little; its fourth-quarter 118 Federal Reserve Bulletin □ March 2001 Change in output per hour - 0 1 I 1 1990 1 1 1992 1 1 1994 1 1 1996 1 1 1998 1 1 1 2000 N ote . Nonfarm business sector. average of 4.0 percent was down just a tenth of a percentage point from the average unemployment rate in the fourth quarter of 1999. The flatness of the rate through the latter half of 2000, when the econ omy was slowing, may have partly reflected a desire of companies to hold on to labor resources that had been difficult to attract and retain in the tight labor market of recent years. January of this year brought a small increase in the rate, to 4.2 percent. Productivity continued to rise rapidly in 2000. Out put per hour in the nonfarm business sector was up about 3!/2 percent over the year as a whole. Sizable gains in efficiency continued to be evident even as the economy was slowing in the second half of the year. Except for 1999, when output per hour rose about 33/4 percent, the past year’s increase was the largest since 1992, a year in which the economy was Measures of the change in hourly compensation in cyclical recovery from the 1990-91 recession. Cutting through the year-to-year variations in mea sured productivity, the underlying trend still appears to have traced out a pattern of strong acceleration since the middle part of the 1990s. Support for a step-up in the trend has come from increases in the amount of capital per worker—especially high-tech capital—and from organizational efficiencies that have resulted in output rising faster than the com bined inputs of labor and capital. Alternative measures of the hourly compensation of workers, while differing in their coverage and methods of construction, were consistent in showing some acceleration this past year. The employment cost index for private industry (ECI), which attempts to measure changes in the labor costs of nonfarm businesses in a way that is free from the effects of employment shifts among occupations and industries, rose nearly AVi percent during 2000 after having increased about 3 V2 percent in 1999. Compensation per hour in the nonfarm business sector, a measure that picks up some forms of employee compensation that the ECI omits but that also is more subject to eventual revision than the ECI, showed hourly com pensation advancing 53A percent this past year, up from a 1999 increase of about 4 lA percent. Tightness of the labor market was likely one factor underlying the acceleration of hourly compensation in 2000, with employers relying both on larger wage increases and more attractive benefit packages to attract and retain workers. Compensation gains may also have been influenced to some degree by the pickup of consumer price inflation since 1998. Rapid increases in the cost of health insurance contributed impor tantly to a sharp step-up in benefit costs. Unit labor costs, the ratio of hourly compensation to output per hour, increased about 2 lA percent in the Change in unit labor costs P I Employment cost index ■ Nonfarm compensation per hour N ote. For the employment cost index (ECI), change is from December to December; for nonfarm compensation, Q4 to Q4. The ECI is for private industry excluding farm and household workers. Nonfarm compensation per hour is for the nonfarm business sector. Percent N ote. Nonfarm business sector. Monetary Policy Report to the Congress nonfarm business sector in 2000 after having risen slightly more than Vi percent in 1999. Roughly threefourths of the acceleration was attributable to the faster rate of increase in compensation per hour noted above. The remainder stemmed from the small decel eration of measured productivity. The labor cost rise for the latest year was toward the high end of the range of the small to moderate increases that have prevailed over the past decade. 119 Change in consumer prices Prices Led by the surge in energy prices, the aggregate price indexes showed some acceleration in 2000. The chain-type price index for real GDP, the broadest measure of goods and services produced domesti cally, rose 2 lA percent in 2000, roughly 3A percentage point more than in 1999. The price index for gross domestic purchases, the broadest measure of prices for goods and services purchased by domestic buy ers, posted a rise of almost 2 Vi percent in 2000 after having increased slightly less than 2 percent the previous year. Prices paid by consumers, as measured by the chain-type price index for personal consump tion expenditures, picked up as well, about as much as the gross purchases index. The consumer price index (CPI) continued to move up at a faster pace than the PCE index this past year, and it exhibited slightly more acceleration—an increase of nearly 3V2 percent in 2000 was 3A percentage point larger than the 1999 rise. Price indexes for fixed investment and government purchases also accelerated this past year. The prices of energy products purchased directly by consumers increased about 15 percent in 2000, a few percentage points more than in 1999. In response to the rise in world oil prices, consumer prices of motor fuels rose nearly 20 percent in 2000, bringing the cumulative price hike for those products over the past two years to roughly 45 percent. Prices also rose rapidly for home heating oil. Natural gas prices Alternative measures of price change Percent Price measure Chain-type Gross domestic product Gross domestic purchases Personal consumption expenditures Excluding food and energy Fixed-xveight Consumer price in d ex ........... Excluding food and energy N ote . Changes are based on quarterly averages and are measured to the fourth quarter of the year indicated from the fourth quarter of the preceding year. increased 30 percent, as demand for that fuel out paced the growth of supply, pulling stocks down to low levels. Prices of natural gas this winter have been exceptionally high because of the added demand for heating that resulted from unusually cold weather in November and December. Electricity costs jumped for some users, and prices nationally rose faster than in other recent years, about 2X A percent at the con sumer level. Businesses had to cope with rising costs of energy in production, transportation, and temperature con trol. In some industries that depend particularly heavily on energy inputs, the rise in costs had a large effect on product prices. Producer prices of goods such as industrial chemicals posted increases that were well above the average rates of inflation last year, and rising prices for natural gas sparked espe cially steep price advances for nitrogen fertilizers used in fanning. Prices of some services also exhib ited apparent energy impacts: Producers paid sharply higher prices for transportation services via air and water, and consumer airfares moved up rapidly for a second year, although not nearly as much as in 1999. Late in 2000 and early this year, high prices for energy inputs prompted shutdowns in production at some companies, including those producing fertiliz ers and aluminum. Despite the spillover of energy effects into other markets, inflation outside the energy sector remained moderate overall. The ongoing rise in labor produc tivity helped to contain the step-up in labor costs, and the slow rate of rise in the prices of non-oil imports meant that domestic businesses had to remain cau tious about raising their prices because of the poten tial loss of market share. Rapid expansion of capacity in manufacturing prevented bottlenecks from devel oping in the goods-producing sector of the economy 120 Federal Reserve Bulletin □ March 2001 Change in consumer prices excluding food and energy when domestic demand was surging early in the year; later on, an easing of capacity utilization was accom panied by a softening of prices in a number of indus tries. Inflation expectations, which at times in the past have added to the momentum of rising inflation, remained fairly quiescent in 2000. Against this backdrop, core inflation remained low in 2000. Producer prices of intermediate materials excluding food and energy, after having accelerated through the first few months of 2000, slowed there after, and their four-quarter rise of \ 3A percent was only a bit larger than the increase during 1999. Prices of crude materials excluding food and energy fell moderately this past year after having risen about 10 percent a year earlier. At the consumer level, the CPI excluding food and energy moved up 2!/2 percent in 2000, an acceleration of slightly less than xh per centage point from 1999 when put on a basis that maintains consistency of measurement. The rise in the chain-type price index for personal consumption expenditures excluding food and energy was 13A per cent, just a bit above the increases recorded in each of the two previous years. Consumer food prices rose 2Vi percent in 2000 after an increase of about 2 percent in 1999. In large part, the moderate step-up in these prices probably reflected cost and price considerations similar to those at work elsewhere in the economy. Also, farm commodity prices moved up, on net, during 2000, after three years of sharp declines, and this turnabout likely showed through to the retail level to some extent. Meat prices, which are linked more closely to farm prices than is the case with many other foods, recorded increases that were appreciably larger than the increases for food prices overall. The chain-type price index for private fixed invest ment rose about \ 3A percent in 2000, but that small increase amounted to a fairly sharp acceleration from the pace of the preceding few years, several of which had brought small declines in investment prices. Although the price index for investment in residential structures slowed a little, to about a 2>X A percent rise, the index for nonresidential structures sped up from a 23/4 percent increase in 1999 to one of 4 x/z percent in 2000. Moreover, the price index for equipment and software ticked up slightly, after having declined 2 percent or more in each of the four preceding years. To a large extent, that turnabout was a reflection of a smaller rate of price decline for computers; they had dropped at an average rate of more than 20 percent through the second half of the 1990s but fell at roughly half that rate in 2000. Excluding computers, equipment prices increased slightly in 2000 after having declined a touch in 1999. U.S. Financial M arkets Financial markets in 2000 were influenced by the changing outlook for the U.S. economy and monetary policy and by shifts in investors’ perceptions of and attitudes toward risk. Private longer-term interest rates generally firmed in the early part of the year as growth remained unsustainably strong and as market participants anticipated a further tightening of mone tary policy by the Federal Reserve. Later in the year, as it became apparent that the pace of economic growth was slowing, market participants began to incorporate expectations of significant policy easing into asset prices, and most longer-term interest rates fell sharply over the last several months of 2000 and into 2001. Over the course of the year, investors became more concerned about credit risk and demanded larger yield spreads to hold lower-rated corporate bonds, especially once the growth of the economy slowed in the second half. Banks, appar ently having similar concerns, reported widening credit spreads on business loans and tightening stan dards for lending to businesses. Weakening economic growth and tighter financial conditions in some sec tors led to a slowing in the pace of debt growth over the course of the year. Stock markets had another volatile year in 2000. After touching record highs in March, stock prices turned lower, declining considerably over the last four months of the year. Valuations in some sectors fell precipitously from high levels, and near-term earnings forecasts were revised down sharply late in the year. On balance, the broadest stock indexes fell more than 10 percent last year, and the tech-heavy Nasdaq was down nearly 40 percent. Monetary Policy Report to the Congress Rates on selected Treasury securities N ote . The data are daily and extend through February 8, 2001. Interest Rates The economy continued to expand at an exception ally strong and unsustainable pace in the early part of 2000, prompting the Federal Reserve to tighten its policy stance in several steps ending at its May meeting. Private interest rates and shorter-term Trea sury yields rose considerably over that period, reach ing a peak just after the May FOMC meeting. Inves tors apparently became more concerned about credit risk as well; spreads between rates on lower-rated corporate bonds and swaps widened in the spring, adding to the upward pressure on private interest rates. Long-term Treasury yields, in contrast, remained below their levels from earlier in the year, as market participants became increasingly convinced that the supply of those securities would shrink con siderably in coming years and incorporated a “ scar city premium” into their prices. By mid-May, with the rapid expansion of economic activity showing few signs of letting up, rates on federal funds and eurodollar futures, which can be used as a rough gauge of policy expectations, were indicating that market participants expected additional policy tight ening going forward. Signs of a slowdown in the growth of aggregate demand began to appear in the incoming data soon after the May FOMC meeting and continued to gradually accumulate over subsequent months. In response, market participants became increasingly convinced that the FOMC would not have to tighten its policy stance further, which was reflected in a flattening of the term structure of rates on federal funds and eurodollar futures. Interest rates on most corporate bonds declined gradually on the shifting 121 outlook for the economy, and by the end of August had fallen more than V2 percentage point from their peaks in May. Most market interest rates continued to edge lower into the fall, as the growth of the economy seemed to moderate further. Over the last couple months of 2000 and into early 2001, as it became apparent that economic growth was slowing more abruptly, market participants sharply revised down their expectations for future short-term interest rates. Treasury yields plummeted over that period, particularly at shorter maturities: The two-year Treasury yield dropped more than a full percentage point from midNovember to early January, moving below the thirtyyear yield for the first time since early 2000. Yields on inflation-indexed securities also fell considerably, but by less than their nominal counterparts, suggest ing that the weakening of economic growth lowered expectations of both real interest rates and inflation. Although market participants had come to expect considerable policy easing over the first part of this year, the timing and magnitude of the intermeeting cut in the federal funds rate in early January was a surprise. In response, investors built into asset prices anticipations of a more rapid policy easing over the near-term. Indeed, the further substantial reduction in the federal funds rate implemented at the FOMC meeting later that month was largely expected and elicited little response in financial markets. Even with a full percentage point reduction in the federal funds rate in place, futures rates have recently pointed to expectations of additional policy easing over coming months. Investors appear to be uncertain about this outlook, however, judging from the recent rise in the Federal funds futures rates and the intended federal funds rate Percent 2000 2001 N o t e . The thick line segments show the rates on federal funds futures contracts on the day after the scheduled FOMC meetings in February, May, August, and November 2000 and in January 2001. 122 Federal Reserve Bulletin □ March 2001 Implied volatility of short-term interest rates I i i i I___ i 1998 i 1999 i 1___ i___ i___ i___ I__ I 2000 2001 N ote . The data are daily and extend through February 8, 2001. The series shown is the implied volatility of the three-month eurodollar rate over the coming four months, as calculated from option prices. implied volatilities of interest rates derived from option prices. On balance since the beginning of 2000, the progressive easing in the economic out look, in combination with the effects of actual and prospective reductions in the supply of Treasury securities, has resulted in a sizable downward shift in the Treasury yield curve. The prospect of a weakening in economic growth, along with sizable declines in equity prices and downward revisions to profit forecasts, apparently caused investors to reassess credit risks in the latter part of last year. Spreads between rates on high-yield corporate bonds and swaps soared beginning in Sep tember, pushing the yields on those bonds substan tially higher. Concerns about credit risk also spilled over into the investment-grade sector, where yield Treasury yield curve N ote . The yield curves shown are estimated from off-the-run Treasury coupon securities and represent yields on notional par Treasury securities with semiannual coupons. spreads widened considerably for lower-rated securi ties. For most investment-grade issuers, though, the effects of the revised policy outlook more than offset any widening in risk spreads, resulting in a decline in private interest rates in the fourth quarter. Since the first policy easing in early January, yield spreads on corporate bonds have narrowed considerably, includ ing a particularly large drop in the spread on highyield bonds. Overall, yields on most investmentgrade corporate bonds have reached their lowest levels since the first half of 1999, while rates on most high-yield bonds have fallen about 2 percentage points from their peaks and have reached levels simi lar to those of mid-2000. Although investors at times in recent months appeared more concerned about credit risk than they were in the fall of 1998, the recent financial environ ment, by most accounts, did not resemble the market turbulence and disruption of that time. The Trea sury and investment-grade corporate bond markets remained relatively liquid, and the investment-grade market easily absorbed the high volume of bond issuance over 2000. Investors continued to show a heightened preference for larger, more liquid corpo rate issues, but they did not exhibit the extreme desire for liquidity that was apparent in the fall of 1998. For example, the liquidity premium for the on-the-run ten-year Treasury note this year remained well below the level of that fall. Nonetheless, the Treasury market has become somewhat less liquid than it was several years ago. Moreover, in 2000, particular segments of the Trea sury market occasionally experienced bouts of unusu ally low liquidity that appeared related to actual or potential reductions in the supply of individual secu rities. Given the possibility that liquidity could dete riorate further as the Treasury continues to pay down its debt, market participants reportedly increased their reliance on alternative instruments—including interest rate swaps and debt securities issued by government-sponsored housing agencies and other corporations—for some of the hedging and pricing functions historically provided by Treasury securi ties. Fannie Mae and Freddie Mac continued to issue large amounts of debt under their Benchmark and Reference debt programs, which are designed to mimic characteristics of Treasury securities—such as large issue sizes and a regular calendar of issuance— that are believed to contribute to their liquidity. By the end of 2000, the two firms together had more than $300 billion of notes and bonds and more than $200 billion of bills outstanding under those pro grams. Trading volume and dealer positions in agency securities have risen considerably since 1998, Monetary Policy Report to the Congress and the market for repurchase agreements in those securities has reportedly become more active. Also, several exchanges listed options and futures on agency debt securities. Open interest on some of those futures contracts has picked up significantly, although it remains small compared to that on futures contracts on Treasury securities. The shrinking supply of Treasury securities and the possibility of a consequent decline in market liquidity also pose challenges for the Federal Reserve. For many years, Treasury securities have provided the Federal Reserve with an effective asset for System portfolio holdings and the conduct of monetary pol icy. The remarkable liquidity of Treasury securities has allowed the System to conduct sizable policy operations quickly and with little disruption to mar kets, while the safety of Treasury securities has allowed the System to avoid credit risk in its port folio. However, if Treasury debt continues to be paid down, at some point the amount outstanding will be insufficient to meet the Federal Reserve’s portfolio needs. Well before that time, the proportion of Trea sury securities held by the System could reach levels that would significantly disrupt the Treasury market and make monetary policy operations increasingly difficult or costly. Recognizing this possibility, last year the FOMC initiated a study to consider alterna tive approaches to managing the Federal Reserve’s portfolio, including expanding the use of the discount window and broadening the types of assets acquired in the open market. As it continues to study various alternatives, the FOMC will take into consideration the effect that such approaches might have on the liquidity and safety of its portfolio and the poten tial for distorting the allocation of credit to private entities. Meanwhile, some measures have been taken to prevent the System’s holdings of individual Treasury securities from reaching possibly disruptive levels and to help curtail any further lengthening of the average maturity of the System’s holdings. On July 5, 2000, the Federal Reserve Bank of New York announced guidelines limiting the System’s holdings of individual Treasury securities to specified percent ages of their outstanding amounts, depending on the remaining maturity of the issue. Those limits range from 35 percent for Treasury bills to 15 percent for longer-term bonds. As a result, the System has redeemed some of its holdings of Treasury securities on occasions when the amount of maturing holdings has exceeded the amount that could be rolled over into newly issued Treasury securities under these limits. Redemptions of Treasury holdings in 2000 exceeded $28 billion, with more than $24 billion 123 of the redemptions in Treasury bills. In addition, the Federal Reserve accommodated a portion of the demand for reserves last year by increasing its use of longer-term repurchase agreements rather than by purchasing Treasury securities outright. The System maintained an average of more than $15 billion of longer-term repurchase agreements over 2000, typi cally with maturities of twenty-eight days. Equity Prices After having moved higher in the first quarter of 2000, equity prices reversed course and finished the year with considerable declines. Early in the year, the rapid pace of economic activity lifted corporate profits, and stock analysts became even more opti mistic about future earnings growth. In response, most major equity indexes reached record highs in March, with the Wilshire 5000 rising 6 3A percent above its 1999 year-end level and the Nasdaq soaring 24 percent, continuing its rapid run-up from the sec ond half of 1999. Equity prices fell from these highs during the spring, with a particularly steep drop in the Nasdaq, as investors grew more concerned about the lofty valuations of some sectors and the prospect of higher interest rates. Broader equity indexes recovered much of those losses through August, supported by the decline in market interest rates and the continued strength of earnings growth in the second quarter. But from early September through the end of the year, stock prices fell considerably in response to the downshift in economic growth, a reassessment of the prospects for some high-tech industries, and disappointments in corporate earnings. In December and January, equity Major stock price indexes JFMAMJ J A S O N D J 1999 FMAMJ J A S O N D J F 2000 2001 Note . The data are daily and extend through February 8, 2001. 124 Federal Reserve Bulletin □ March 2001 analysts significantly reduced their forecasts for yearahead earnings for the S&P 500. However, analysts apparently view the slowdown in earnings as short lived, as long-run earnings forecasts did not fall much and remain at very high levels, particularly for the technology sector. On balance, the Wilshire 5000 index fell 12 per cent over 2000—its first annual decline since 1994. The Nasdaq composite plunged 39 percent, leaving it at year-end more than 50 percent below its record high and erasing nearly all of its gains since the beginning of 1999. The broad decline in equity prices last year is estimated to have lopped more than SPA trillion from household wealth, or more than 4 percent of the total net worth of households. Never theless, the level of household net worth is still quite high—about 50 percent above its level at the end of 1995. Investors continued to accumulate considerable amounts of equity mutual funds over 2000, although they may have become increasingly discouraged by losses on their equity holdings toward the end of the year, when flows into equity funds slumped. At that time, money market mutual funds expanded sharply, as investors apparently sought a refuge for financial assets amid the heightened volatility and significant drops in equity prices. So far in 2001, major equity indexes are little changed, on balance, as the boost from lower interest rates has been countered by con tinued disappointments over corporate earnings. Some of the most dramatic plunges in share prices in 2000 took place among technology, telecommu nications, and Internet shares. While these declines partly stemmed from downward revisions to nearterm earnings estimates, which were particularly Price-earnings ratios for the S&P 500 and selected components Ratio 1983 1986 1989 1992 1995 1998 2001 N o t e . The data are monthly and extend through January 2001. The ratios are based on I/B/E/S consensus estimates of earnings over the coming twelve months. Wilshire 5000 volatility Percent ---- 30 N o t e . The data, which are daily and extend through February 8, 2001, are the standard deviations of daily percent changes in the Wilshire 5000 index over the previous six months, with the standard deviations expressed on an annual basis. severe in some cases, they were also driven by a reassessment of the elevated valuations of many companies in these sectors. The price-earnings ratio (calculated using operating earnings expected over the next year) for the technology component of the S&P 500 index fell substantially from its peak in early 2000, although it remains well above the ratio for the S&P 500 index as a whole. For the entire S&P 500 index, share prices fell a bit more in per centage terms than the downward revisions to yearahead earnings forecasts, leaving the price-earnings ratio modestly below its historical high. The volatility of equity price movements during 2000 was at the high end of the elevated levels observed in recent years. In the technology sector, the magnitudes of daily share price changes were at times remarkable. There were twenty-seven days during 2000 in which the Nasdaq composite index moved up or down by at least 5 percent; by compari son, such outsized movements were observed on a total of only seven days from 1990 to 1999. Despite the volatility of share price movements and the large declines on balance over 2000, equity market conditions were fairly orderly, with few reports of difficulties meeting margin requirements or of large losses creating problems that might pose broader systemic concerns. The fall in share prices reined in some of the margin debt of equity investors. After having run up sharply through March, the amount of outstanding margin debt fell by about 30 percent over the remainder of the year. At yearend, the ratio of margin debt to total equity market capitalization was slightly below its level a year earlier. Monetary Policy Report to the Congress The considerable drop in valuations in some sec tors and the elevated volatility of equity price move ments caused the pace of initial public offerings to slow markedly over the year, despite a large number of companies waiting to go public. The slowdown was particularly pronounced for technology compa nies, which had been issuing new shares at a frantic pace early in the year. In total, the dollar amount of initial public offerings by domestic nonfinancial com panies tapered off in the fourth quarter to its lowest level in two years and has remained subdued so far in 2001 125 Regulatory capital ratios of commercial banks Percent Total (tier 1 + tier 2) ratio . D ebt and the M onetary Aggregates Debt and Depository Intermediation Aggregate debt of domestic nonfinancial sectors increased an estimated 5lA percent over 2000, a con siderable slowdown from the gains of almost 7 per cent posted in 1998 and 1999. The expansion of nonfederal debt moderated to 8 V2 percent in 2000 from 91/2 percent in 1999; the slowing owed prima rily to a weakening of consumer and business bor rowing in the second half of the year, as the growth of durables consumption and capital expenditures fell off and financial conditions tightened for some firms. Some of the slowdown in total nonfinancial debt was also attributable to the federal government, which paid down 63/4 percent of its debt last year, compared with 2Vi percent in 1999. In 1998 and 1999, domestic nonfinancial debt increased faster than nominal GDP, despite the reduction in federal debt over those years. The ratio of nonfinancial debt to GDP edged down in 2000, however, as the federal debt paydown acceler ated and nonfederal borrowing slowed. Domestic nonfinancial debt N ote. The data are annual. Note. The data, which are quarterly and extend through 2000:Q3, are ratios of capital to risk-weighted assets. Tier 1 capital consists primarily of common equity and certain perpetual preferred stock. Tier 2 capital consists primarily of subordinated debt, preferred stock not included in tier 1 capital, and a limited amount of loan-loss reserves. Depository institutions continued to play an impor tant role in meeting the demand for credit by busi nesses and households. Credit extended by com mercial banks, after adjustment for mark-to-market accounting rules, increased 10 percent over 2000, well above the pace for total nonfinancial debt. Bank credit expanded at a particularly brisk rate through late summer, when banks, given their ample capital base and solid profits, were willing to meet strong loan demand by households and businesses. Over the remainder of the year, the growth of bank credit declined appreciably, as banks became more cautious lenders and as several banks shed large amounts of government securities. Banks reported a deterioration of the quality of their business loan portfolios last year. Delinquency and charge-off rates on C&I loans, while low by historical standards, rose steadily, partly reflecting some repayment difficulties in banks’ syndicated loan portfolios. Several large banks have stated that the uptrend in delinquencies is expected to continue in 2001. Higher levels of provisioning for loan losses and some narrowing of net interest margins contrib uted to a fallback of bank profits from the record levels of 1999. In addition, capitalization measures slipped a bit last year. Nevertheless, by historical standards banks remained quite profitable overall and appeared to have ample capital. In the aggregate, total capital (the sum of tier 1 and tier 2 capital) remained above 12 percent of risk-weighted assets over the first three quarters of last year, more than two percentage points above the minimum level required to be considered well-capitalized. 126 Federal Reserve Bulletin □ March 2001 Net percentage of domestic banks tightening standards for commercial and industrial loans, by size of firm Percent — 50 years. With delinquency rates for consumer and real estate loans having changed little, on net, last year, banks did not tighten credit conditions significantly for loans to households over the first three quarters of 2000. More recently, however, an increasing portion of banks increased standards and terms for consumer loans other than credit cards, and some of the banks surveyed anticipated a further tightening of condi tions on consumer loans during 2001. The Monetary Aggregates N ote . The data are based on the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices, which is generally conducted four times per year. The data extend through January 2001. Small firms are those with annual sales of less than $50 million. In response to greater uncertainty about the eco nomic outlook and a reduced tolerance for risk, increasing proportions of banks reported tightening standards and terms on business loans during 2000 and into 2001, with the share recently reaching the highest level since 1990. The tightening became widespread for loans to large and middle-market firms. A considerable portion of banks reported firm ing standards and terms on loans to small businesses as well, consistent with surveys of small businesses indicating that a larger share of those firms had difficulty obtaining credit in 2000 than in previous The monetary aggregates grew rather briskly last year. The expansion of the broadest monetary aggre gate, M3, was particularly strong over the first three quarters of 2000, as the robust growth in depository credit was partly funded through issuance of the managed liabilities included in this aggregate, such as large time deposits. M3 growth eased somewhat in the fourth quarter because the slowing of bank credit led depository institutions to reduce their reli ance on managed liabilities. Institutional money funds increased rapidly throughout 2000, despite the tightening of policy early in the year, in part owing to continued growth in their provision of cash manage ment services for businesses. For the year as a whole, M3 expanded 9lA percent, well above the I 3A percent pace in 1999. This advance again outpaced that of nominal income, and M3 velocity—the ratio of nomi nal income to M3—declined for the sixth year in a row. Growth of money and debt Percent Period Ml Domestic nonfinancial debt M2 M3 4.2 3.1 1.8 1.3 .6 1.9 1.2 .6 1.0 1.7 6.7 4.5 4.5 4.9 4.8 Annual1 1990 ..................... 1 9 9 1 ..................... 1992 .................... 1993 ..................... 1994 .................... 4.2 7.9 14.4 10.6 2.5 1995 1996 1997 1998 1999 ..................... ..................... ..................... .................... .................... -1.5 -4.5 -1 .2 2.2 1.8 3.8 4.5 5.6 8.4 6.2 6.1 6.8 8.9 10.9 7.7 5.4 5.3 5.4 6.9 6.8 2000 .................... -1.5 6.3 9.2 5.3 Quarterly (annual rate)2 2000:1 ................. 2 ................. 3 ................. 4 ................. 2.0 -1 .8 -3.7 -2.7 5.8 6.4 5.8 6.6 10.6 9.0 8.9 7.1 5.6 6.2 4.7 4.1 N ote . M l consists of currency, travelers checks, demand deposits, and other checkable deposits. M2 consists of M l plus savings deposits (including money market deposit accounts), small-denomination time deposits, and balances in retail money market funds. M3 consists of M2 plus large-denomination time deposits, balances in institutional money market funds, RP liabilities (overnight and term), and eurodollars (overnight and term). Debt consists of the out Ip standing credit market debt of the U.S. government, state and local govern ments, households and nonprofit organizations, nonfinancial businesses, and farms. 1. From average for fourth quarter of preceding year to average for fourth quarter of year indicated. 2. From average for preceding quarter to average for quarter indicated. Monetary Policy Report to the Congress M2 velocity and opportunity cost Note. The data are quarterly. The velocity of M2 is the ratio of nominal gross domestic product to the stock of M2. The opportunity cost of holding M2 is a two-quarter moving average of the difference between the three-month Treasury bill rate and the weighted average return on assets included in M2. M2 increased 6 lA percent in 2000, about un changed from its pace in 1999. Some slowing in M2 growth would have been expected based on the rise in short-term interest rates over the early part of the year, which pushed up the “opportunity cost” of holding M2, given that the interest rates on many components of M2 do not increase by the same amount or as quickly as market rates. However, with the level of long-term rates close to that of short term rates, investors had much less incentive to shift funds out of M2 assets and into assets with longer maturities, which helped support M2 growth. M2 was also boosted at times by households’ increased pref erence for safe and liquid assets during periods of heightened volatility in equity markets. On balance over the year, the growth of M2 slightly exceeded that of nominal income, and M2 velocity edged down. The behavior of the components of M2 was influ enced importantly by interest rate spreads. The depressing effect of higher short-term market interest rates was most apparent in the liquid deposit com ponents, including checkable deposits and savings accounts, whose rates respond very sluggishly to movements in market rates. Small time deposits and retail money market mutual funds, whose rates do not lag market rates as much, expanded considerably faster than liquid deposits. Currency growth was held down early in the year by a runoff of the stockpile accumulated in advance of the century date change. In addition, it was surprisingly sluggish over the balance of the year given the rapid pace of income growth, with weakness apparently in both domestic and foreign demands. 127 International D evelopm ents In 2000, overall economic activity in foreign econo mies continued its strong performance of the previ ous year. However, in both industrial and developing countries, growth was strongest early, and clear signs of a general slowing emerged later in the year. Among industrial countries, growth in Japan last year moved up to an estimated 2 percent, and growth in the euro area slowed slightly to 3 percent. Emerging market economies in both Asia and Latin America grew about 6 percent on average in 2000. For Asian developing economies, this represented a slowing from the torrid pace of the previous year, while growth in Latin America, especially Mexico, picked up from 1999. Average foreign inflation edged up slightly to 3 percent, mainly reflecting higher oil prices. Over the first part of the year, monetary authorities moved to tighten conditions in many industrial countries, in reaction to continued strong growth in economic activity that was starting to impinge on capacity constraints, as well as some upward pressures on prices. Interest rates on long term government securities declined on balance in most industrial countries, especially toward year-end when evidence of a slowdown in global economic growth started to emerge. Conditions in foreign financial markets were some what more unsettled than in the previous year. Over all stock indexes in the foreign industrial countries generally declined, most notably in Japan. As in the United States, technology-oriented stock indexes were extremely volatile during the year. After reach ing peaks in the first quarter, they started down while experiencing great swings toward mid-year, then fell sharply in the final quarter, resulting in net declines Foreign equity indexes N ote . The data are monthly. The last observations are the average of trading days through February 8, 2001. 128 Federal Reserve Bulletin □ March 2001 Nominal U.S. dollar exchange rate indexes January 1998 = 100 ________ 1998_______________ 1999______________ 2000_______ 2001 N ote . The data are monthly. Indexes are trade-weighted averages of the exchange value of the dollar against major currencies and against the currencies of a broader group of important U.S. trading partners. Last observations are the average of trading days through February 8, 2001. for the year of one-third or more. Stock prices in emerging market economies were generally quite weak, especially in developing Asia, where growth in recent years has depended heavily on exports of high-tech goods. Although there was no major default or devaluation among emerging market economies, average risk spreads on developing country debt still moved higher on balance over the course of the year, as the threat of potential crises in several countries, most notably Argentina and Turkey, heightened investor concerns. The dollar’s average foreign exchange value increased over most of the year, supported by con tinued robust growth of U.S. activity, rising interest rates on dollar assets, and market perceptions that longer-term prospects for U.S. growth and rates of return were more favorable than in other industrial countries. Part of the rise in the dollar’s average value was reversed late in the year when evidence emerged that the pace of U.S. activity was slowing much more sharply than had been expected. Despite this decline, the dollar’s average foreign exchange value against the currencies of other major foreign industrial countries recorded a net increase of over 7 percent for the year as a whole. The dollar also strengthened nearly as much on balance against the currencies of the most important developing country trading partners of the United States. So far this year, the dollar’s average value has remained fairly stable. Europe. During the first three quarters of the year, the euro continued to weaken, and by late October had fallen to a low of just above 82 cents, nearly onethird below its value when it was introduced in January 1999. The euro’s decline against the dollar through most of last year appeared to be due mainly to the vigorous growth of real GDP and productiv ity in the United States contrasted with steady but less impressive improvements in Europe. In addition, investors may have perceived that Europe was slower to adopt “new economy” technologies, making it a relatively less attractive investment climate. In Sep tember, a concerted intervention operation by the monetary authorities of G-7 countries, including the United States, was undertaken at the request of Euro pean authorities to provide support for the euro. The European Central Bank also made intervention pur chases of euros on several occasions acting on its own. Late in the year, the euro abruptly changed course and started to move up strongly, reversing over half of its decline of earlier in the year. This recovery of the euro against the dollar appeared to reflect mainly a market perception that, while growth was slowing in both Europe and the United States, the slowdown was much sharper for the United States. For the year as a whole, the dollar appreci ated, on net, about 7 percent against the euro. The European Central Bank raised its policy inter est rate target six times by a total of 175 basis points over the first ten months of the year. These increases reflected concerns that the euro’s depreciation, tightening capacity constraints and higher oil prices would put upward pressure on inflation. While core inflation—inflation excluding food and energy— U.S. dollar exchange rate against the euro and the Japanese yen I__ i__ i i I i__ i__ i__ 1 __ i__ i__ i__ 1 __ I Industrial Economies ________ 1998_______________ 1999______________ 2000_______ 2001 The dollar showed particular strength last year against the euro, the common currency of much of N ote . Foreign currency units per dollar. Restated German mark is the mark-dollar exchange rate rescaled by the official conversion factor between the mark and the euro. Last observations are the average of trading days through February 8, 2001. Monetary Policy Report to the Congress remained well below the 2 percent inflation target ceiling, higher oil prices pushed the headline rate above the ceiling for most of the year. Real GDP in the euro area is estimated to have increased about 3 percent for 2000 as a whole, only slightly below the rate of the previous year, although activity slowed toward the end of the year. Growth was supported by continued strong increases in investment spending. Net exports made only a modest contribution to growth, as rapid increases in exports were nearly matched by robust imports. Overall activity was sufficiently strong to lead to a further decline in the average euro-area unemployment rate to below 9 per cent, a nearly 1 percentage point reduction for the year. The dollar rose about 12 percent against the Japa nese yen over the course of 2000, roughly reversing the decline of the previous year. Early in the year, the yen experienced periods of upward pressure on evi dence of a revival of activity in Japan. On several of these occasions, the Bank of Japan made substantial intervention sales of yen. By August, signs of recov ery were strong enough to convince the Bank of Japan to end the zero interest rate policy that it had maintained for nearly a year and a half, and its target for the overnight rate was raised to 25 basis points. Later in the year, evidence emerged suggesting that the nascent recovery in economic activity was losing steam, and in response the yen started to depreciate sharply against the dollar. For the year as a whole, Japanese real GDP is estimated to have increased about 2 percent, a sub stantial improvement from the very small increase of the previous year and the decline recorded in 1998. Growth, which was concentrated in the first part of the year, was led by private nonresidential invest ment. In contrast, residential investment slackened as the effect of tax incentives waned. Consumption rebounded early in the year from a sharp decline at the end of 1999 but then stagnated, depressed in part by record-high unemployment and concerns that on going corporate restructuring could lead to further job losses. Public investment, which gave a major boost to the economy in 1999, remained strong through the first half of last year but then fell off sharply, and for the year as a whole the fiscal stance is estimated to have been somewhat contractionary. Inflation was negative for the second consecutive year, with the prices of both consumer goods and real estate continuing to move lower. The dollar appreciated 4 percent relative to the Canadian dollar last year. Among the factors that apparently contributed to the Canadian currency’s weakness were declines in the prices of commodities 129 that Canada exports, such as metals and lumber, and a perception by market participants of unfavorable differentials in rates of return and economic growth prospects in Canada relative to the United States. For the year as a whole, real GDP growth in Canada is estimated to have been only slightly below the strong 5 percent rate of 1999, although, as in most industrial countries, there were signs that the pace of growth was tailing off toward the end of the year. Domestic demand continued to be robust, led by surging busi ness investment and solid personal consumption increases. In the first part of the year, the sustained rapid growth of the economy led Canadian monetary authorities to become increasingly concerned with a buildup of inflationary pressures, and the Bank of Canada matched all of the Federal Reserve’s interest rate increases in 2000, raising its policy rate by a total of 100 basis points. By the end of the year, the core inflation rate had risen to near the middle of the Bank of Canada’s 1 percent to 3 percent target range, while higher oil prices pushed the overall rate above the top of the range. So far this year, the Bank of Canada has only partially followed the Federal Reserve in lower ing interest rates, and the Canadian dollar has remained little changed. Emerging Market Economies In emerging market economies, the average growth rate of economic activity in 2000 remained near the very strong 6 percent rate of the previous year. How ever, there was a notable and widespread slowing near the end of the year, and results in a few indi vidual countries were much less favorable. Growth in developing Asian economies slowed on average from the torrid pace of the previous year, while average growth in Latin America picked up somewhat. No major developing country experienced default or devaluation in 2000, but nonetheless, financial mar kets did undergo several periods of heightened unrest during the year. In the spring, exchange rates and equity prices weakened and risk spreads widened in many emerging market economies at a time of a general heightening of financial market volatility and rising interest rates in industrial countries, as well as increased political uncertainty in several developing countries. After narrowing at mid-year, risk spreads on emerging market economy debt again widened later in the year, reflecting a general movement on financial markets away from riskier assets, as well as concerns that Argentina and Turkey might be facing financial crises that could spread to other emerging market economies. Risk spreads generally narrowed in the early part of 2001. 130 Federal Reserve Bulletin □ March 2001 Among Latin American countries, Mexico’s per formance was noteworthy. Real GDP rose an esti mated 7 percent, an acceleration from the already strong result of the previous year. Growth was boosted by booming exports, especially to the United States, favorable world oil prices, and a rebound in domestic demand. In order to keep inflation on a downward path in the face of surging domestic demand, the Bank of Mexico tightened monetary conditions six times last year, pushing up short-term interest rates, and by the end of the year the rate of consumer price inflation had moved below the 10 per cent inflation target. The run-up to the July presiden tial election generated some sporadic financial mar ket pressures, but these subsided in reaction to the smooth transition to the new administration. Over the course of the year, the risk spread on Mexican debt declined on balance, probably reflecting a favorable assessment by market participants of macroeconomic developments and government policies, reinforced by rating upgrades of Mexican debt. During 2000, the peso depreciated slightly against the dollar, but by less than the excess of Mexican over U.S. inflation. Selected emerging markets January 1998 = 100 ---------------------Dollar exchange rates Brazilian real Argentine peso Korean won Bond spreads Brazil Argentina Korea N ote. The data are monthly. Bond spreads are the J.P. Morgan Emerging Market Bond Index (stripped Brady-bond) spreads over U.S. Treasuries. Last observations are the average of trading days through February 8, 2001. Argentina encountered considerable financial dis tress last year. Low tax revenues due to continued weak activity along with elevated political uncer tainty greatly heightened market concerns about the ability of the country to fund its debt. Starting in October, domestic interest rates and debt risk spreads soared amid market speculation that the government might lose access to credit markets and be forced to abandon the exchange rate peg to the dollar. Finan cial markets began to recover after an announce ment in mid-November that an IMF-led international financial support package was to be put in place. Further improvement came in the wake of an official announcement in December of a $40 billion support package. The fall in U.S. short-term interest rates in January eased pressure on Argentina’s dollar-linked economy as well. Late in the year, Brazilian financial markets received some negative spillover from the financial unrest in Argentina, but conditions did not approach those prevailing during Brazil’s financial crisis of early 1999. For 2000 as a whole, the Brazilian econ omy showed several favorable economic trends. Real GDP growth increased to an estimated 4 percent after being less than 1 percent the previous two years, inflation continued to move lower, and short-term interest rates declined. Growth in Asian developing countries in 2000 slowed from the previous year, when they had still been experiencing an exceptionally rapid bounceback from the 1997-1998 financial crises experienced by several countries in the region. In Korea, real GDP growth last year is estimated to have been less than half of the blistering 14 percent rate of 1999. Korean exports, especially of high-tech products, started to fade toward the end of 2000. Rapid export growth had been a prominent feature of the recovery of Korea and other Asian developing economies follow ing their financial crises. In addition, a sharp fall in Korean equity prices over the course of the year, as well as continued difficulties with the process of financial and corporate sector restructuring, tended to depress consumer and business confidence. These developments contributed to the downward pressure on the won seen near the end of the year. Elsewhere in Asia, market concerns over heightened political instability were a major factor behind financial pres sures last year in Indonesia, Thailand, and the Philip pines. In China, output continued to expand rapidly in 2000, driven by a combination of surging exports early in the year, sustained fiscal stimulus, and some recovery in private consumption. In contrast, growth in both Hong Kong and Taiwan slowed, especially in the latter part of the year. In Taiwan, the exchange Monetary Policy Report to the Congress rate and stock prices both came under downward pressure as a result of the slowdown in global elec tronics demand and apparent market concerns over revelations of possible weaknesses in the banking and corporate sectors. Turkey’s financial markets came under severe strain in late November as international investors withdrew capital amid market worries about the health of Turkey’s banks, the viability of the gov ernment’s reform program and its crawling peg 131 exchange rate regime, and the widening current account deficit. The resulting liquidity shortage caused short-term interest rates to spike up and led to a substantial decline in foreign exchange reserves held by the central bank. Markets stabilized some what after it was announced in December that Turkey had been able to reach loan agreements with the IMF, major international banks, and the World Bank in an effort to provide liquidity and restore confidence in the banking system. □ 132 Industrial Production and Capacity Utilization: The 2000 Annual Revision Carol Corrado, o f the Board’s Division o f Research and Statistics, prepared this article. Matt Wilson pro vided research assistance. In late 2000, the Board of Governors of the Federal Reserve System published the annual revision of its index of industrial production (IP) and related measures of capacity and utilization for the period January 1992 through October 2000 (chart 1). The updated measures reflect the incorporation of newly available, more comprehensive source data, the intro duction of new production series, and changes in methods. For this revision, two new years (1997 and 1998) of comprehensive data on manufacturing out put became available; otherwise, the updating of the data was typical of annual revisions. According to the revised data, total industrial out put has increased, on average, 5.1 percent per year since 1995, and industrial capacity has expanded 5.4 percent per year. These revised rates of increase are more rapid than previously reported (table 1). The rate of industrial capacity utilization—the ratio of production to capacity—was little changed by the revision for the third quarter of 2000 but was revised up 0.6 percentage point, to 81.6 percent, for the fourth quarter of 1999. The overall picture of the industrial sector in recent years is unchanged by the revision. An exceptionally strong expansion of output in 1997 was followed by a notably weaker performance in 1998: The aftershocks stemming from economic turmoil in Asia—weak export demand and heightened import competition—sharply slowed the rise in manufactur ing IP excluding selected high-technology indus tries.1 Manufacturing IP picked up broadly in 1999, and production in the high-tech sector accelerated further in the first half of 2000. But output outside the high-tech industries stagnated in 2000, a reflection of renewed competition from abroad and some slacken ing in domestic demand; in the fourth quarter, total industrial production fell at an annual rate of about 1 percent. (Summary data as of January 17, 2001, for total industry and manufacturing are shown in appen dix tables A.l and A.2.) Capacity utilization in manufacturing rose during 1997 and reached 83 percent in the fourth quarter of N o t e . Charles Gilbert directed the 2000 annual revision and pre pared the revised estimates of industrial production; Norman Morin prepared the revised measures of capacity and capacity utilization. Other contributors to the revision and this article are Ana Aizcorbe, William Cleveland, Mark Doms, Cynthia Bansak, and Susan Polatz. 1. High-tech industries include the manufacturers of semiconduc tors and related electronic components (Standard Industrial Classifica tion [SIC] 3672-9), computers (SIC 357), and communications equip ment (SIC 366). 1. Industrial production, capacity, and utilization Ratio scale, 1992 output = 1 0 0 Percent o f capacity Revised Earlier Capacity Utilization Production N ote . The production indexes and utilization rates are seasonally adjusted. All the revised measures extend through December 2000; the earlier measures extend through October 2000. 133 1. Revised growth rates of industrial production and capacity and the revised rate of capacity utilization, 1996-2000 Revised growth rate (percent) Item ■* m a m m a Production Total industry .................................. Manufacturing ............................ Excluding selected hightech industries ............... Selected high-tech industries ... Mining and utilities..................... Capacity Total industry .................................. Manufacturing ............................ Excluding selected hightech industries ............... Selected high-tech industries ... Mining and utilities..................... Capacity utilization (percent, end o f period) Total industry .................................. Manufacturing ............................ Excluding selected hightech industries ............... Selected high-tech industries . .. Mining and utilities.................... Difference between revised and previous (percentage points) 1999 pro portion 19962000 avg. 1996 1997 1998 1999 2000 19962000 avg. 100.0 88.4 5.1 5.6 5.6 6.3 7.2 8.0 3.2 4.0 5.1 5.6 4.2 4.1 80.6 7.8 11.6 2.3 42.0 1.2 3.2 41.0 1.4 5.4 35.7 1.9 1.2 37.2 -3.2 2.3 40.6 1.1 'SM S 100.0 90.0 5.4 6.0 5.4 6.1 5.9 6.5 6.5 7.2 81.1 8.9 10.0 2.8 42.0 .9 2.7 44.2 .8 3.6 40.3 1.3 100.0 90.0 82.1 81.3 82.8 81.9 81.1 8.9 10.0 81.2 81.7 88.7 81.8 83.2 89.5 1996 1997 1998 .4 .4 .3 .3 .5 .5 -.7 55.6 4.5 .6 -.5 .2 •2 1.9 .0 4.6 5.1 4.6 5.0 .4 .4 4.4 39.5 .5 2.1 37.8 .7 1.3 48.0 1.2 83.8 83.0 81.2 80.5 81.6 80.9 83.3 80.5 90.1 80.7 79.2 86.8 80.9 80.8 87.1 1999 2000 .3 .3 .9 .8 -.1 .0 .8 -.9 -.1 1.2 -6.7 .0 1.0 3.2 1.3 .5 3.4 -.6 -.1 -.1 .5 .5 .3 .2 .4 .4 .8 .8 .7 .7 .2 .1 -1.4 -.5 .5 2.4 .5 1.4 -8.7 -.2 .8 2.1 .2 .8 9.0 1.0 81.3 80.2 .2 .3 .2 .2 .2 .3 .2 .3 .6 .6 79.3 85.0 89.9 .2 -.2 .4 .1 .6 .7 .3. -1.4 .1 .2 -.3 .3 .3 .3 1.2 \ .1 1 .2 .2 -1.0 .0 N ote. The 1996-2000 average growth rates are calculated as the average annual percentage change in the seasonally adjusted index from the fourth quarter of 1995 to the fourth quarter of 2000. Growth rates for years are calculated from the fourth quarter of the previous year to the fourth quarter of the year specified. The capacity utilization rates for years are for the last quarter of the year. The difference between revised and previous growth rates for 1996-2000 and for the year 2000 are calculated from annualized growth rates through the third quarter of 2000. The difference between revised and previous utilization rates for 2000 use the third quarter of the year. For the definition of high-tech industries, see text note 1. the year. After that, the rate fell, on balance, and was at 80.2 percent during the fourth quarter of 2000. Within manufacturing, utilization in the advancedprocessing industries (which the revision modified to exclude semiconductors, related electronic compo nents, and motor vehicle parts) declined, for the most part, over that period. By contrast, the operating rate for primary processors, after having fallen in 1998, increased noticeably throughout 1999 and into 2000; the rate rose above 86 percent in the second quarter of 2000 for the first time since 1995 (chart 2). Since mid-2000, however, the primary-processing utiliza- tion rate has declined more than 5 percentage points; the drop reflects cutbacks in the output of the metals, textile, paper, and lumber industries, as well as an easing in the pace of production of semiconductors and related components. After having fallen sharply between the fourth quarters of 1997 and 1998, utilization rates in mining and utilities reached 89.9 percent in the fourth quarter of 2000, a rise of more than 3 percentage points. Operating rates for energy producers were at elevated levels at the end of last year: Capacity at utilities expanded at a faster pace in 1999 and 2000 than it did earlier in the 1990s, but on balance, production advanced more rapidly than capacity during the 1990s and surged with an increase in demand begin ning in the middle of 2000. 2. Primary-processing and advanced-processing utilization rates, 1976-2000 Percent Primary processing Advanced processing S u m m a r y o f t h e R e v is io n The statistical revisions to the IP index are princi pally derived from the inclusion of information con tained in annual reports issued by the U.S. Census Bureau: the 1997 Census of Manufactures, the 1998 Annual Survey of Manufactures, and selected 1999 Current Industrial Reports. Revised annual data from the U.S. Geological Survey (USGS) on minerals 134 Federal Reserve Bulletin □ March 2001 (except fuels) for 1998 and new data for 1999 were also introduced. The capacity indexes and capacity utilization rates now incorporate the preliminary results from the Census Bureau’s 1999 Survey of Plant Capacity, which covers manufacturing; the survey provided data for the fourth quarter of the year. The revised measures also include newly available 1999 data on industrial capacity, expressed in physical units, from the USGS, the Department of Energy (DOE), and other organizations. New production measures were introduced for individual series in four industries: communications equipment, computer and office equipment, drugs and medicines, and bearings. Production for the new series was measured using detailed infor mation on the major products of these industries. The revision also incorporated improved source data for three existing production series: elec tricity generation, electrical housewares, and truck trailers. Beginning with this revision, the weights used to calculate the production and capacity aggregates change every month rather than once a year. The introduction of the refined aggregation method, which began with data for 1992, had a small effect on the intra-yearly changes in monthly IP. Tables A.3 and A.4 show the revised rates of growth of industrial production by market group and by industry group for 1996 through 2000; tables A.5 and A.6 show the revised figures for capacity and capacity utilization. For production and capacity, the tables also show the difference between the revised and earlier growth rates; for capacity utilization, the difference between revised and previous rates for the final quarter of the year are shown. For most manufacturing industries, the annual reports from the Census Bureau implied faster increases in output in 1997 and 1998 than had pre viously been reported. Output also rose more rapidly in 1999 because of upwardly revised monthly source data. The textile mill products industry and the industrial machinery and equipment industry, which includes computers, are the only major industry groups whose production in the third quarter of 2000 was lower than shown previously. Within the indus trial machinery and equipment group, the output of the computer industry was lowered noticeably in 1998 because the new Census data were included. The introduction of a new series that measures the production of pharmaceuticals boosted the produc tion estimates for the chemical industry during 1999. The output of the electrical machinery group, which includes the communications equipment industry, was revised upward for most years, in part because of the introduction of a new series that explicitly measures the equipment used for local-area computer networks. According to indicators from the Survey of Plant Capacity, the factory operating rate was higher in the fourth quarter of 1999 than previously estimated. Using the revised production indexes and new infor mation on manufacturing capital spending, we esti mate that manufacturing capacity increased 5.1 per cent in 1999 and 5 percent in 2000. The previous estimates had reported that it had slowed in 2000, to a rate Vi percentage point less than its rate in 1999. The revision modified the definitions of advancedprocessing and primary-processing industries to reflect more accurately the distinction between indus tries that produce final products and those that pro duce goods for further processing. Specifically, the measures for production, capacity, and capacity utilization in primary processing now include the series for semiconductors and related electronic com ponents (Standard Industrial Classification [SIC] 3672-9) and for motor vehicle parts (SIC 3714); previously, these industries were included in the mea sures for advanced-processing industries.2 The new utilization rate for primary-processing industries averaged 82.2 percent between 1967 and 2000, and the rate for advanced-processing industries averaged 80.6 percent. These long-term averages are about the same as those for the previously published measures. In more recent years, however, capacity utilization rates for the modified aggregates differ noticeably from the previously reported measures: The operat ing rate for advanced-processing industries in the third quarter of 2000 was 80.1 percent, a level below the long-term average and lower than the previ ously published rate based on the old definition. For the same period, the operating rate for primaryprocessing industries was 85.4 percent, a level above the long-term average and higher than previously reported. TECHNICAL ASPECTS OF THE REVISION As discussed earlier, the annual revision incorporated more-up-to-date results from the 1997 Census of Manufactures, the 1998 Annual Survey of Manu factures, the 1999 Survey of Plant Capacity, and 2. The modified utilization rates for primary-processing and advanced-processing industries were recomputed from January 1967 on; the results were spliced to the earlier aggregates from January 1948 to December 1966. The modified production and capacity indexes for these groups begin with data for January 1967. Industrial Production and Capacity Utilization: The 2000 Annual Revision ------------------------------------------------------------------ Data Availability and Publication Changes Files containing the revised data and the text and tables from the G.17 statistical release “Industrial Production and Capacity Utilization” are available on the Board’s web site (www.federalreserve.gov/releases/gl7) and on diskettes from Publications Services (telephone 202-4523245). Further information on these revisions is available from the Board’s Industrial Output Section (telephone 202-452-3197). A document with printed tables of the revised esti mates of series shown in the G.17 release is available upon request to the Industrial Output Section, Mail Stop 82, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washing ton, DC 20551. Beginning with data for January 2001, the tables in the monthly statistical release on industrial production and capacity utilization have been redesigned. The data as previously shown are still available on the Board’s web site. For further information, or comments, contact the Board’s Industrial Output Section (telephone 202-4523197) or e-mail Charles Gilbert (cgilbert@frb.gov). other annual industry reports on production in 1999 and on capacity in 1999 and 2000. The value-added weights used in aggregating the production and capacity indexes to total industry or other groups were also updated, along with the seasonal factors and source data used to compile the monthly produc tion indexes (see box “Data Availability and Publica tion Changes” ). The Census Bureau reported its 1998 data on industry output according to the new North American Industrial Classification System, or NAICS. The Cen sus reported data for 1997 both on the new NAICS and on the old, 1987 SIC system. Before being included in the IP index, the manufacturing data for 1998 were recategorized by the Federal Reserve according to the SIC system. The Census Bureau provided the Federal Reserve with industry utiliza tion rates on the SIC system from the Survey of Plant Capacity.3 M easu rem en t o f p r o d u c t io n Individual IP series are derived from (1) annual indexes of industry output that are calculated using 3. The current and historical industrial production and capacity utilization statistics will be categorized according to the NAICS for the 2001 revision. 135 comprehensive information sources and (2) produc tion indicators that are available for inclusion in the monthly index within the regular four-month report ing window. The annual index determines the trend for a series from one year to the next, and the production indicator determines the monthly changes for a series within each year. Each series is seasonally adjusted, and the contribution of the change in an IP series for an industry to the monthly change in the overall IP index is based on the value added by that industry. The annual indexes for individual IP series are derived from detailed industry data. For each four digit SIC industry in manufacturing, an annual chaintype measure of the real gross output of an industry is compiled. The value of the production is represented by Census data on the industry’s value added plus its cost of materials; the real output measure is obtained by deflating the value of production by an annually weighted chain-type price index compiled from detailed information on the composition of the indus try’s products. Most of these price indexes are obtained from the Bureau of Economic Analysis (BEA). Because an individual IP series may represent a combination of several four-digit SIC industries, the annual indexes for many manufacturing IP series are constructed from a number of industry gross out put measures; for these indexes, the contribution of each component industry to the annual index is based on the value added by that industry. For many IP series, the production indicators are compiled from monthly (or quarterly) product data. The indicator may measure the output of a product in physical terms (for example, tons of portland cement or barrels of distillate fuel oil); or the indicator may be data on the output of several types of a product (for example, unit counts of assemblies of crawlers, wheel loaders, skid steer loaders, and the like), com bined with fixed weights. Alternatively, for selected series, the indicator is a chain-type quantity index that is compiled each month (or quarter) using very detailed data on the prices and quantities of specific products produced by an industry. This method is used for the monthly IP indexes for semiconductors, computers, autos, light trucks, and with this revision, pharmaceuticals and a component of communica tions equipment.4 4. The method was introduced for the monthly measurement of semiconductors in the 1998 annual revision and for computers and motor vehicles in the 1999 annual revision. For semiconductors and computers, the method consists o f (1) estimating the value o f U.S. production for the industry from monthly and quarterly data that contain highly detailed unit counts and values of individual products produced by industry and (2) deflating the value of production by a 136 Federal Reserve Bulletin □ March 2001 For non-energy mining, most annual and monthly indexes are developed from product data issued by the USGS; the IP series on fuels and electric and gas utilities are developed from comprehensive monthly and annual data from the DOE. For most IP series in these groups, the monthly data are measures of a product in physical terms, such as barrels of motor gasoline; for other series, the indicator is more com plex. For example, coal production is measured using the tonnage output of four geographic regions, weighted by the Btu content of the variety mined in each region.5 When high-frequency data on the physical quantity of production are not available, the Federal Reserve uses monthly data on the inputs to production, either the Bureau of Labor Statistics (BLS) monthly data on production-worker hours or the Federal Reserve’s monthly data on electric power use, as the production indicator. The production indicator is combined with a productivity trend calculated from the annual out put index to obtain the monthly IP index. With the changes introduced in this revision, the proportion of the IP index that is measured using product data that are available for inclusion in the monthly index within the regular four-month report ing window has increased by 3 percentage points, to 46 percent in value-added terms in 1999.6 Complete information on the sources used to compile the pro duction indicator for each individual IP index can be found on the Board’s web site.7 CHANGES TO INDIVIDUAL PRODUCTION SERIES The revision introduced improved production indica tors for several industries. The production measure for telephone and telegraph apparatus (SIC 3661) was revised as an aggregate of two components: a series for routers, switches, and hubs—equipment chain-type matched-model price index constructed, for the most part, from the same data. For motor vehicles, detailed monthly data on the production of each vehicle model are aggregated using annual prices as weights. For a few other series in the IP index, the production indicator is obtained by deflating detailed data on the value of production or shipments from a trade source by a corresponding BLS producer price index. 5. This method was introduced in the 1998 annual revision. 6. For a review and documentation of the timing of the receipt of the source data for monthly IP over the course of the regular fourmonth reporting period, see Charles Gilbert, Norman Morin, and Richard Raddock, “Industrial Production and Capacity Utilization: A Revision and Recent Developments,” Federal Reserve Bulletin, vol. 86 (March 2000), p. 193. 7. See table 1, “Industry structure o f industrial production: classi fication, value-added weights, and description of series,” on the “About” page o f the Board’s web site for the G.17 release: www.federalreserve.gov/releases/gl7/About.htm. used for local-area computer networks (LANs)—and a series for all other telephone and telegraph appara tus. Production of LAN equipment is measured as a chain-type index calculated from detailed quarterly data; see box “Technical Note on the Measurement of LAN Equipment” for an explanation of how the series was derived. The monthly production indicator for the other component of telephone and telegraph apparatus is production-worker hours. The revised index for the production of computer and office equipment (SIC 357) is an aggregate of three components: computers, computer printers, and other computer and office equipment. The index for the output of computers is based on the data that were previously used to measure the production of com puter and office equipment as a whole; these data are highly detailed quarterly estimates from Dataquest on the revenue and unit count of sales of PCs, notebook computers, and workstations/servers. The revision introduced a new index for computer printers based on similar data—that is, highly detailed quarterly figures on the revenue and unit count of sales of computer printers, also from Dataquest. The index for the output of other computer and office equipment is represented by a combination of the data on computers and computer printers. This revision included a new method for estimat ing the production of pharmaceutical preparations. Accordingly, the previous production measure for drugs and medicines (SIC 283) was revised and is now an aggregate of two components: pharmaceuti cal preparations (SIC 2834) and other drugs and medicines (SIC 2833,5,6,9). The series for other drugs and medicines uses production-worker hours as the production indicator. The new production index for pharmaceutical preparations is a monthly real output measure devel oped from detailed data on the prices and quantities of shipments to dispensers of prescription drugs in the United States from IMS-Health. These data include monthly dollar shipments and chain-type price indexes for about 500 product classes that IMSHealth constructed using its proprietary, highly detailed, comprehensive database on pharmaceutical products. The Federal Reserve used the measures developed by IMS-Health, information from the Cen sus Bureau’s Current Industrial Reports, and other sources to create a chain-type quantity index for the production of the pharmaceutical preparations indus try as a whole. The production estimates for two other industries were improved by obtaining and incorporating new source data. The production of ball and roller bear ings (SIC 3562) is measured as a weighted combina Industrial Production and Capacity Utilization: The 2000 Annual Revision tion of the unit count of four classes of bearings (ball, mounted, tapered, and other roller bearings); the mea sure was developed from data provided by the Ameri can Bearing Manufacturers Association. The produc tion of electrical housewares (SIC 3634) is measured using data provided by the Association of Home Appliance Manufacturers. Previously, these series were derived from monthly input data. The production index for electric power generation (SIC 491) has been expanded to include electricity generation by plants owned by nonregulated busi nesses that supply electric power to the public. Pre viously, the monthly IP series for electricity gener ation was measured using monthly DOE data on electric power generation by utilities, which the DOE defines as the output of regulated entities. These data are still used, but the revised series combines them with estimates of the power generated by nonindus trial nonregulated businesses. The principal source data for these estimates are new monthly measures of electric power generation issued by the DOE begin ning in January 2000.8 Estimates for earlier years were developed principally from annual data, also from the DOE. Last, the source data for three other physical prod uct series have changed. For two series—fabric fin ishing (SIC 226) and metal cans (SIC 341)—the sources switched to reporting data quarterly rather than monthly. The source for the production of truck trailers (SIC 3715) from 1998 on is America’s Com mercial Transportation Research. AGGREGATION AND WEIGHTS This revision introduced a refinement to the method used for aggregating the individual IP indexes. Previ ously, the monthly industrial production aggregates from 1977 on were annually weighted chain-type indexes, and the weights were updated in the middle of the year. With this revision, the weights change monthly rather than at midyear for the period since 8. Beginning with data for January 2000, the DOE has provided monthly measures o f electric power generation by “non-utility” pro ducers; these producers are composed of industrial plants generating power for their own use (co-generation) and nonindustrial nonregu lated plants generating power for distribution to the public. The Federal Reserve uses the new DOE series after deducting an estimate o f industrial co-generation. Because the power generation by nonregulated firms is distributed by utilities that are regulated entities, the source data for the IP series on electric utility sales, also from the DOE, accurately represents the provision o f electric services to households and businesses. The IP series that measures the generation and distribution o f electric power to the public is still called “the output of utilities.” 137 July 1992. This change affects industry weights only within each year, as well as the monthly capacity and capacity utilization rate aggregates; the proce dure used to derive capacity and utilization aggre gates, given an industrial production aggregate, is unchanged.9 The weights for the aggregation of IP and capacity utilization are expressed as unit value added (a “price” ), and are derived from annual estimates of industry value added. New information on industry value added was used to update and extrapolate the annual estimates of unit value added. Reports from the 1997 Census of Manufactures and the 1998 Annual Survey of Manufactures, as well as revenue and expense data reported by the DOE and the American Gas Association, provided industry valueadded data for manufacturing and utilities through 1998. The latest value-added data for mining came from the Census of Mineral Industries reports for 1997. Generally, the unit value-added measures track broad changes in related producer price indexes. The weights required for aggregating IP in the most recent period are estimated from available data on producer prices through October 2000. Table A.7 reports the annual value-added proportions incorporated in the IP index from 1992 on. With this revision, the annual unit value-added measures are linearly interpolated to the monthly frequency, and the IP index becomes a chain-type index with monthly weights.10 As with the earlier formulation, the percentage change in IP can be considered as the value-added weighted sum of the percentage changes in its components; consequently, in the monthly statistical release, the value-added proportion for each series for the most recent full year of data is shown along with the series. To assist users with calculations, the Federal Reserve’s web site provides supplemental monthly statistics that represent the exact proportionate contribution of a monthly change in a component index to the monthly change in the total index.11 9. See Carol Corrado, Charles Gilbert, and Richard Raddock, “Industrial Production and Capacity Utilization: Historical Revision and Recent Developments,” Federal Reserve Bulletin, vol. 83 (Febru ary 1997), pp. 67-92. 10. Specifically, the change in IP for a month is the geometric mean of the change in the aggregate industrial output computed using current month weights and the change computed using weights for the previous month; the formula for a monthly IP aggregate is given by ^ ^mPm- 1 H*m- 1 ^ ^m P m m-lPm where pm denotes the monthly unit value added for month m. 11. For the relative weights, see the Board’s web site for the G.17 release: www.federalreserve.gov/releases/gl7/ipdisk/ipweights.sa/. 138 Federal Reserve Bulletin □ March 2001 Technical Note on the Measurement of LAN Equipment Equipment for local-area computer networks (LANs) con sists of routers, switches, and hubs. These devices direct traffic among computers and make possible e-mail transmis sion, Internet browsing, and file sharing. Like many hightechnology products, LAN devices have become faster and more sophisticated in recent years. For instance, in 1995, Ethernet switches operating at 10 megabits per second dominated the market; last year, the two most popular switches operated at rates of 100 megabits and 1,000 mega bits per second. Statistical information on LAN equipment is available from the Census Bureau’s Current Industrial Reports and from reports issued by Dataquest, a private company. The new IP index for LAN equipment production is compiled from these sources and from research conducted at the Federal Reserve by Mark Doms and Christopher Forman, who developed annual quality-adjusted price indexes for routers and switches using hedonic techniques.1 Price Indexes fo r Routers, Switches, and Total LAN Equipment Hedonic methods are a tool used to develop price indexes for goods whose characteristics change rapidly.2 Traditional methods (the calculation of matched-model price indexes) may be used to measure price change for a high-technology good, but highly detailed information on distinct varieties of the good are needed to capture quality change.3 For routers and switches, such data are not available; there fore, price indexes have been produced using hedonic techniques. Because Cisco is the dominant firm in the router market, the data used in the hedonic regressions for routers came from Cisco product catalogs from 1995 to 1999. More than 400 observations were used, and the regressions controlled for about twenty characteristics. Separate models for four classes of routers were estimated; the four price indexes were aggregated using annual revenue data to obtain an annually weighted chain-type price index for all routers. Router prices are estimated to have fallen at an average annual rate of almost 14 percent since 1995 (table A). However, the price changes for each router class exhibited N ote . Mark Doms constructed the new series and developed the material reported in this note. 1. Mark Doms and Christopher Forman, “Prices for Local Area Network Equipment” (paper presented at the Brookings Workshop on Communica tions Output and Productivity, Washington, D.C., February 23, 2001). 2. See J. Steven Landefeld and Bruce T. Grimm, “A Note on the Impact of Hedonics and Computers on Real GDP,” Survey o f Current Business, vol. 80 (December 2000), pp. 17-22, and the references contained therein. 3. Ana Aizcorbe, Carol Corrado, and Mark Doms, “Constructing Price and Quantity Indexes for High-Technology Goods” (paper presented at the CRIW-NBER Summer Institute 2000 Workshop on Price, Output, and Pro ductivity Measurement, Cambridge, Mass., July 31, 2000). A. Average annual price change, by router type, 1995-99 Router type Branch................................................................................ Midrange ........................................................................... Price change -13.6 -24.7 -19.4 3.2 -16.1 Source . See note 1. substantial variation that reflected, in part, the degree of actual or potential competition in the four markets.4 A similar exercise was conducted for switches. The data for the hedonic regressions came from Datapro, a private source that produces regular reports evaluating the perfor mance of different varieties of these devices. More than 370 observations from 1996 to 2000 were used. The results show that prices for switches have fallen at an average annual rate of nearly 21 percent during this period. The Doms-Forman price indexes for routers and switches were combined with price measures for hubs developed from Dataquest data to obtain an annually weighted chain-type price index for total LAN equipment. The index shows that, between 1995 and 1999, prices for LAN equipment have fallen an average of 18 percent per year. Production o f LAN Equipment Estimates of the annual value of U.S.-produced routers, switches, and hubs were developed from 1992 on. The estimates for the total value of LAN equipment were obtained principally from the Census data, which are annual and cover activity in the United States. The Dataquest data, which are available annually from 1993 and cover activity in world markets, contain statistics on the three types of LAN equipment. These data were used in conjunction with the aggregate Census data to develop separate annual fig ures from 1992 on for routers, switches, and hubs. The value of the production of LAN equipment increased rapidly in the 1990s, although the pace has moderated in recent years (chart A). The value of U.S.-produced LAN equipment rose at an annual rate of 37 percent between 1992 and 1999, with especially striking increases for routers and switches (chart B). Though switches did not enter the market until 1993, by 1999 they made up the largest propor tion of total domestic production of LAN equipment. When the LAN equipment price index is combined with these estimates of the value of LAN equipment production, the results show that real output increased at an average annual rate of more than 50 percent for 1995-99. 4. See Doms and Forman, “Prices for Local Area Network Equipment.” Industrial Production and Capacity Utilization: The 2000 Annual Revision 139 Technical Note on the Measurement of LAN Equipment—Continued A. Production of LAN equipment, 1992-2000 B. U.S. production of LAN equipment, 1992 and 1999 Billions of dollars □ ■ Rest o f world United States Billions of dollars 25 — □ Switches H Routers ■ Hubs ----------------------- — 15 20 15 — —- 10 10 5 1992 1994 1996 1998 2000 1992__________________________ 1999 e. Estimated. Table B shows the annual index of LAN equipment pro duction, as well as the annual LAN price index and the annual value of LAN output. The annual price measures for 1992-94 were obtained by an extension of the DomsForman price indexes back to 1992 based on their relation ship to price measures reported in the Dataquest data and on estimated trends. The new IP index for LAN equipment is derived from the annual production index and quarterly data from the Dataquest reports. The Dataquest reports provide figures for the world revenue and unit sales count of twenty-five classes of routers, switches, and hubs beginning in the first quarter of 1996 on. The Dataquest data are converted to quarterly estimates of U.S. real output in three steps. First, the annual estimates of nominal U.S. production are interpo lated and extrapolated using the Dataquest quarterly reve nue data. Second, the Doms-Forman annual price indexes are interpolated and extrapolated using the quarterly price information reported by Dataquest. For each class of router, an average selling price is used; for switches, the average price per port is used; and for hubs, a price measure is developed from the five types of these devices reported in the Dataquest data. Third, each estimated nominal value of US. production of routers, switches, and hubs is deflated by its price indexes, and the three real output measures are aggregated to obtain a quarterly chain-type real output index for LAN equipment. The new quarterly IP index for LAN equipment is shown in table B. The new series is not published in the monthly statistical release, but the index is updated on an ongoing basis and included in the broader aggregate, the IP index for communications equipment (SIC 366). LAN equipment accounted for 18 percent of the value of the output of the communications equipment industry in 1999. Had the pre vious methods for measuring LAN equipment been used, the IP index for communications equipment would have increased at an average annual rate of about 13 percent for 1995-99, rather than at the nearly 19 percent now reported. B. U.S. LAN equipment, 1992-2000 Price index Value of production1 100.000 190.706 298.751 603.748 100.000 83.547 74.236 62.189 1,684.8 2,684.4 3,736.5 6,325.8 ................................ ................................ ................................ ................................ 951.649 1,605.151 2,478.863 3,192.484 57.190 47.628 34.352 28.131 9,169.4 12,880.1 14,346.5 15,130.7 Quarterly estimates3 96:1 ................................. 9 6 :2 ................................. 9 6 :3 .................................. 9 6 :4 .................................. 100.000 114.483 129.172 149.434 100.000 98.989 93.771 86.422 7,911.2 8,966.1 9,583.2 10,217.1 9 7 :1 ................................. 9 7 :2 ................................. 9 7 :3 ................................. 9 7 :4 ................................. 162.075 184.893 225.762 259.174 84.049 79.754 77.645 74.184 10,776.9 11,665.6 13,867.6 15,210.3 9 8 :1 ................................. 9 8 :2 ................................. 9 8 :3 ................................. 9 8 :4 ................................. 291.332 328.857 332.261 324.278 62.847 59.134 53.620 52.323 14,485.4 15,384.2 14,093.5 13,422.9 9 9 :1 ................................. 9 9 :2 ................................. 9 9 :3 ................................. 9 9 :4 ................................. 419.177 423.775 400.055 394.040 48.654 47.116 47.017 43.964 16,137.0 15,797.3 14,882.2 13,706.2 0 0 :1 ................................. 0 0 :2 ................................. 0 0 :3 ................................. 451.754 500.061 608.214 43.502 41.755 39.679 15,547.4 16,517.5 19,094.6 Period Annual estimates2 1992 ................................ 1993 ................................ 1994 ................................ 1995 ................................ 1996 1997 1998 1999 Production index 1. Billions of dollars. 2. Indexes are 1992 = 100. 3. Indexes are 1996:Q1 = 100. 140 Federal Reserve Bulletin □ March 2001 REVISED MONTHLY DATA The product data that are used to measure the monthly movements of many IP indexes have been updated to capture data that became available after the closing of the regular four-month reporting win dow. The input measures were also updated to incor porate revised data on monthly production-worker hours, based on the BLS benchmark of employment to March 1999 comprehensive measures, and revised data on monthly electric power use since 1996. Late reports of electric power data for 1999 resulted in a large upward revision for that year; revisions to data for earlier years were small (table A.8). Seasonal factors for all series were re-estimated using data that extended into 2000. Factors for production-worker hours, which adjust for timing, holiday, and monthly seasonal patterns, were updated with data through October 2000. Factors for the electric power series, which are developed using multivariate methods, were re-estimated with data through May 2000. The updated factors for the monthly (and quarterly) physical product series, which include adjustments for holiday and workday patterns, used data through at least June 2000.12 M easu rem e nt of Ca p a c it y The individual capacity indexes for a year are derived from (1) preliminary, implied end-of-year indexes of capacity obtained by dividing a production index for an industry by a corresponding utilization rate obtained from a survey and (2) additional measures that, for most industries, are economic determinants of an industry’s annual capacity growth. The capacity indexes, like the IP indexes, are expressed as percent ages of production in 1992. Once the preliminary, implied capacity indexes are calculated, they are related to the additional mea sures in a regression model. The final capacity indexes for a year are derived from the fitted values of these regressions. The preliminary, implied capac ity indexes thus give the general level and trend of 12. Seasonal factors for motor vehicle assemblies are updated twice each year and reported on the Board’s web site: www.federalreserve.gov/releases/gl7/mvsf.htm the individual capacity estimates over a period of years, and the additional measures determine the annual changes from one year to the next. For most manufacturing industries, estimates of industry capi tal input and a variable related to the average age of the industry’s capital stock are used as the additional measures.13 For mining, utilities, and selected manu facturing industries, measures of physical capacity are available and are used to determine the final capacity indexes.14 The capital input figures are estimates of the flow of services derived from an industry’s net stocks of physical assets; the net stocks are developed princi pally from investment data reported in the Annual Surveys of Manufactures and Censuses of Manu factures. Also used are estimates of business invest ment and price deflators by asset type, as well as the composition of an industry’s capital spending by asset type, all from the BEA. The information on capital spending by manufac turing industries in the 1997 and 1998 Census reports indicated a higher level of investment than previously estimated by the Federal Reserve. The higher level of spending, in conjunction with indicators of the rate of change in manufacturing capital spending in 1999 and 2000, suggested that capital input rose at a mod erately stronger rate after 1996 than previously esti mated. These results were generally consistent with the trends in capacity implied by the upwardly revised estimates of production and the new survey data on utilization rates. Measures of capacity in physical terms for mining, utilities, and selected manufacturing industries were updated with revised data for 1999 and with data for 2000 newly available since the midyear capacity update issued in June 2000. On balance, the capacity indexes and capacity utilization rates for these indus tries were changed little by the revision. □ 13. A fuller description o f the models that are used to develop the Federal Reserve’s capacity estimates was reported in “Industrial Production and Capacity Utilization: A Revision and Recent D evelop ments,” pp. 194-97. 14. The industry structure and documentation of the sources used to compile each individual capacity index can be found in table 3, “Industry structure o f capacity and capacity utilization: classification, value-added weights, and description of series,” on the “About” page of the Board’s web site for the G.17 release: www.federalreserve.gov/ releases/g 17/About.htm. Appendix tables begin on page 141. Industrial Production and Capacity Utilization: The 2000 Annual Revision A p p e n d ix A: S u m m a r y Ta b l e s B a s e d A .I . o n th e 141 G. 17 R e l e a s e , Ja n u a r y 17, 2001 R ev ised data for industrial production, capacity, and u tilization for total industry, 1 9 8 7 -2 0 0 0 Seasonally adjusted data except as noted Quarter Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1 2 3 4 Annual avg.1 Industrial production (percentage change) 1987 ............. 1988 ............. 1989 ............. 1990 ............. 1 9 9 1 ............. 1992 ............. 1993 ............. 1994 ............. 1995 ............. 1996 ............. 1997 ............. 1998 ............. 1999 ............. 2000 ............. -.6 .1 .6 -.5 -.5 .1 .4 .2 .6 -.2 .5 .4 .6 .5 1.2 .3 -.8 .5 -.8 .5 .5 .3 -.1 1.1 1.0 .0 .3 .5 .4 .0 .9 .5 -.9 .9 .2 .8 .2 -.1 .2 .3 .7 .7 .4 .6 .2 -.6 .3 .7 .3 .5 -.2 1.1 .6 .5 .1 .7 .4 .1 -.6 .4 .8 .3 -.5 .8 .4 .8 .3 .4 .7 .7 .9 .1 - .2 .0 1.2 -.2 .3 .4 .4 .8 .6 -.7 .2 .5 .6 .7 -1 .0 .0 .1 .7 .2 .6 -.4 .0 .7 -.1 .8 -.2 .1 .5 .4 .2 .1 -.3 -.2 .3 1.3 .6 .9 2.1 .4 .7 -.1 -.4 -.2 .1 1.0 .4 1.1 .1 .6 .5 .6 -.3 .1 .2 1.4 .3 -.5 -.6 -.1 .7 .3 .5 -.4 .0 .6 .5 .8 -.3 .3 .8 .4 -1.3 -.1 .5 .4 .7 .3 1.0 .6 -.4 .3 -.3 .6 .5 .5 -.6 -.6 .0 .8 1.0 .1 .4 .3 .1 .7 -.6 4.2 3.2 3.8 2.0 -8.3 1.0 3.8 5.5 6.0 2.8 7.6 3.6 3.9 6.7 6.7 3.1 .5 .6 1.5 6.5 1.5 7.7 1.1 9.2 6.1 3.0 4.9 7.9 5.6 3.9 -4 .4 1.0 6.2 2.4 1.9 5.8 4.4 5.4 7.9 3.4 5.8 3.5 7.1 3.6 -.1 -5.8 1.1 5.0 6.2 6.3 2.9 5.3 7.3 2.9 5.7 -1.1 4.6 4.5 1.8 -.2 -2 .0 3.1 3.5 5.4 4.8 4.6 6.8 4.9 4.2 5.7 95.3 98.8 98.6 97.7 98.1 101.8 104.9 111.5 115.7 122.4 131.1 135.0 141.9 148.1 95.9 99.3 99.0 97.2 97.5 101.8 105.7 112.6 115.9 122.9 131.5 135.1 142.8 147.3 91.0 96.1 99.6 99.1 95.9 98.2 102.6 106.4 113.3 116.4 124.4 132.1 136.5 144.4 92.5 96.9 99.7 99.2 96.2 99.8 102.9 108.4 113.6 119.0 126.3 133.1 138.1 147.1 93.8 97.8 98.6 99.5 97.7 100.4 103.4 109.9 114.8 120.6 128.7 134.2 140.1 148.4 95.4 98.7 98.6 98.0 98.0 101.6 105.0 111.6 115.6 122.2 131.0 135.2 142.1 148.0 93.2 97.4 99.1 98.9 97.0 100.0 103.5 109.1 114.3 119.6 127.7 134.0 I 139.6 147.5 115.1 116.5 118.8 121.0 123.0 125.6 128.5 133.2 140.0 147.5 156.2 166.5 174.1 182.1 115.2 116.7 119.0 121.2 123.2 125.8 128.8 133.7 140.6 148.1 157.1 167.2 174.8 182.8 114.1 115.5 117.0 119.3 121.6 123.6 126.3 129.4 134.7 141.9 149.4 158.9 168.6 176.1 114.4 115.8 117.6 119.9 122.1 124.3 126.9 130.5 136.4 143.8 151.5 161.6 170.5 178.1 114.7 116.2 118.2 120.4 122.6 124.9 127.7 131.8 138.2 145.6 153.8 164.2 172.3 180.1 115.1 116.5 118.8 121.0 123.0 125.6 128.5 133.2 140.0 147.5 156.2 166.5 174.1 182.1 114.6 116.0 117.9 120.2 122.3 124.6 1 127.3 131.2 137.3 144.7 152.7 162.8 171.4 179.1 82.8 84.8 83.0 80.8 79.8 81.0 81.6 83.7 82.7 83.0 83.9 81.1 81.5 81.4 83.2 85.1 83.2 80.2 79.2 80.9 82.1 84.3 82.4 83.0 83.7 80.8 81.7 80.6 79.8 83.3 85.1 83.0 78.9 79.5 81.2 82.2 84.1 82.1 83.3 83.2 81.0 82.0 80.8 83.7 84.8 82.8 78.8 80.3 81.1 83.1 83.3 82.8 83.3 82.4 81.0 82.6 81.7 84.2 83.4 82.6 79.7 80.3 81.0 83.4 83.1 82.8 83.7 81.8 81.3 82.4 82.9 84.7 83.0 81.0 79.6 80.9 81.7 83.8 82.6 82.8 83.8 81.2 81.6 81.3 81.3 84.0 84.1 82.3 79.3 80.2 81.3 83.1 83.3 82.6 83.5 82.1 81.2 82.1 Industrial production (index) 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. 90.2 95.9 99.8 98.6 96.7 97.6 102.2 105.9 113.3 115.6 123.5 132.0 135.9 143.6 91.2 96.2 99.0 99.1 95.9 98.1 102.7 106.2 113.2 116.9 124.8 132.0 136.3 144.3 91.6 96.3 100.0 99.6 95.0 99.0 102.9 107.1 113.4 116.8 125.0 132.4 137.3 145.2 92.0 96.8 100.2 99.0 95.4 99.7 103.2 107.6 113.1 118.1 125.8 133.1 137.4 146.3 92.4 96.9 99.6 99.4 96.1 100.0 102.7 108.5 113.6 119.0 126.2 133.6 138.4 147.2 93.2 97.0 99.4 99.3 97.2 99.7 102.9 109.0 114.0 120.0 126.9 132.7 138.6 147.9 93.7 97.6 98.4 99.3 97.3 100.4 103.2 109.6 113.6 119.9 127.7 132.5 139.7 147.6 93.8 98.1 98.8 99.5 97.4 100.2 103.0 110.0 115.1 120.6 128.8 135.3 140.3 148.6 93.7 97.8 98.6 99.6 98.4 100.5 104.1 110.2 115.7 121.2 129.5 134.9 140.4 149.0 95.0 98.0 98.2 99.1 98.3 101.3 104.4 110.7 115.3 121.2 130.3 135.5 141.5 148.5 Capacity (index) 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. 114.0 115.3 116.8 119.2 121.4 123.4 126.0 129.1 134.2 141.2 148.8 158.0 167.9 175.4 114.1 115.5 117.0 119.3 121.6 123.6 126.3 129.4 134.7 141.9 149.4 158.9 168.6 176.1 114.2 115.6 117.2 119.5 121.7 123.8 126.5 129.7 135.3 142.5 150.1 159.8 169.2 176.7 114.3 115.7 117.4 119.7 121.9 124.1 126.7 130.1 135.8 143.1 150.8 160.7 169.9 177.4 114.4 115.8 117.6 119.9 122.1 124.3 126.9 130.5 136.4 143.8 151.5 161.6 170.5 178.1 114.5 115.9 117.8 120.1 122.2 124.5 127.2 130.9 137.0 144.4 152.3 162.5 171.1 178.7 114.6 116.0 118.0 120.2 122.4 124.7 127.4 131.3 137.6 145.0 153.0 163.4 171.7 179.4 114.7 116.2 118.2 120.4 122.6 124.9 127.7 131.8 138.2 145.6 153.8 164.2 172.3 180.1 114.9 116.3 118.4 120.6 122.7 125.2 127.9 132.2 138.8 146.2 154.6 165.0 172.9 180.7 115.0 116.4 118.6 120.8 122.9 125.4 128.2 132.7 139.4 146.9 155.4 165.7 173.5 181.4 Utilization (level, percent) 1987 ............. 1988 ............. 1989 ............. 1990 ............. 1 9 9 1 ............. 1992 ............. 1993 ............. 1994 ............. 1995 ............. 1996 ............. 1997 ............. 1998 ............. 1999 ............. 2000 ............. 79.1 83.2 85.4 82.7 79.6 79.1 81.0 82.1 84.4 81.9 83.0 83.5 81.0 81.9 80.0 83.4 84.6 83.0 78.9 79.4 81.3 82.1 84.0 82.4 83.5 83.1 80.9 82.0 80.2 83.3 85.3 83.3 78.1 79.9 81.3 82.5 83.8 82.0 83.3 82.9 81.1 82.2 80.5 83.7 85.3 82.7 78.2 80.4 81.4 82.7 83.3 82.5 83.4 82.8 80.9 82.5 80.7 83.7 84.7 82.9 78.7 80.4 80.9 83.2 83.3 82.8 83.3 82.7 81.2 82.7 81.4 83.6 84.4 82.7 79.6 80.1 80.9 83.3 83.2 83.1 83.3 81.6 81.0 82.7 81.8 84.1 83.4 82.6 79.5 80.5 81.0 83.5 82.5 82.7 83.5 81.1 81.3 82.3 Note . Monthly percentage change figures show change from the previous month; quarterly figures show the change from the previous quarter at a compound annual rate of growth. Production and capacity indexes are expressed as percentages of output in 1992. 81.8 84.5 83.6 82.6 79.5 80.2 80.7 83.5 83.3 82.8 83.8 82.4 81.4 82.6 81.6 84.1 83.3 82.6 80.2 80.3 81.4 83.3 83.4 82.9 83.8 81.8 81.2 82.4 82.6 84.2 82.8 82.0 80.0 80.8 81.5 83.5 82.8 82.5 83.9 81.8 81.5 81.9 Estimates from October 2000 through December 2000 are subject to further revision in the upcoming monthly releases. 1. Annual averages of industrial production are calculated from indexes that are not seasonally adjusted. 142 A.2. Federal Reserve Bulletin □ March 2001 Revised data for industrial production, capacity, and utilization for manufacturing industries, 1987-2000 Seasonally adjusted data except as noted Quarter Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1 2 3 4 Annual avg.1 Industrial production (percentage change) 1987 ............. 1988 ............. 1989 ............. 1990 ............. 1 9 9 1 ............. 1992 ............. 1993 ............. 1994 ............. 1995 ............. 1996 ............. 1997 ............. 1998 ............. 1999 ............. 2000 ............. -.8 -.2 .9 -.2 -.9 .3 .7 .0 .6 -.2 .5 .6 .5 .6 1.6 .4 -1 .2 .9 -.7 .6 .3 .4 - .2 1.0 1.2 .0 .5 .4 .2 -.1 .8 .3 -1.1 1.0 .2 1.0 .3 -.2 .4 .2 .5 .9 .5 1.0 .1 -.8 .3 .6 .5 .8 -.3 1.3 .5 .6 .2 .6 .3 -.1 -.7 .4 .7 .4 -.4 .9 .2 .9 .3 .3 .8 .6 1.0 .0 .0 -.1 1.4 -.1 .0 .2 .5 .9 .8 -.8 .2 .4 .7 .7 -1.1 .0 .2 .7 .2 .8 -.6 .2 .6 -.1 .6 -.1 -.2 .3 .3 .3 .2 -.2 -.2 .5 1.3 .6 1.1 2.3 .6 .6 .1 .2 -.3 -.1 1.1 .3 1.3 .2 .9 .6 .5 -.2 .1 .3 1.3 .2 -.6 -.6 -.1 .7 .2 .6 -.3 .0 .6 .7 .9 -.2 .5 .9 .4 -1.3 -.2 .5 .5 .9 .2 1.0 .7 -.2 .5 -.6 .6 .6 .1 -.6 -.5 -.1 .9 1.0 .1 .6 .4 .2 .6 -1.1 5.0 2.3 4.3 2.9 -9.7 2.4 4.4 5.6 6.5 2.3 8.5 4.8 4.1 7.1 7.0 4.1 -.7 -.1 1.2 7.3 2.0 9.4 .7 10.1 6.7 2.8 5.4 8.0 5.5 3.7 -4.5 .8 7.8 3.0 1.5 6.6 3.9 7.1 9.0 3.9 6.0 3.7 7.6 5.2 -1.4 -6.3 1.7 4.5 6.6 7.6 3.6 5.7 7.7 4.7 6.8 -2.1 5.3 4.7 1.9 -.5 -2.4 4.0 3.7 6.0 5.3 4.9 7.8 5.6 4.8 6.1 95.1 98.9 98.2 97.2 97.6 101.9 105.1 112.9 117.1 124.6 134.5 139.6 147.5 153.9 95.6 99.4 98.3 96.6 97.1 101.7 106.1 114.1 117.3 125.3 135.0 139.8 148.4 152.2 90.6 95.6 99.8 98.8 95.0 98.1 102.7 106.7 114.8 117.8 127.0 135.9 141.2 150.1 92.1 96.6 99.6 98.8 95.2 99.8 103.2 109.2 115.0 120.6 129.1 136.9 143.1 153.0 93.4 97.5 98.5 99.0 97.0 100.5 103.6 110.9 116.1 122.7 131.9 138.2 145.1 154.4 95.1 98.7 98.1 97.4 97.5 101.6 105.3 113.0 117.1 124.4 134.4 139.8 147.6 153.6 92.8 97.1 99.0 98.5 96.2 100.0 103.7 109.9 115.7 121.4 130.8 138.2 144.8 153.6 114.9 116.6 119.5 122.0 124.2 127.0 130.2 135.5 143.3 151.9 161.9 173.6 182.4 191.5 115.0 116.8 119.7 122.2 124.3 127.2 130.5 136.1 144.0 152.7 162.9 174.5 183.1 192.3 113.4 115.3 117.3 120.1 122.6 124.8 127.7 131.3 137.3 145.4 154.2 164.9 176.0 184.6 113.9 115.7 118.0 120.7 123.1 125.5 128.5 132.5 139.2 147.7 156.5 168.0 178.3 186.9 114.4 116.1 118.7 121.3 123.7 126.3 129.3 133.9 141.2 149.8 159.1 171.0 180.3 189.2 114.9 116.6 119.5 122.0 124.2 127.0 130.2 135.5 143.3 151.9 161.9 173.6 182.4 191.5 114.1 115.9 118.4 121.0 123.4 125.9 128.9 133.3 140.2 148.7 157.9 169.4 179.3 188.0 82.8 84.8 82.2 79.7 78.6 80.2 80.7 83.3 81.7 82.0 83.1 80.4 80.9 80.4 83.1 85.1 82.1 79.0 78.1 79.9 81.3 83.8 81.4 82.1 82.9 80.2 81.0 79.1 79.9 83.0 85.1 82.3 77.5 78.6 80.4 81.3 83.6 81.0 82.4 82.4 80.2 81.3 80.9 83.5 84.4 81.9 77.3 79.5 80.3 82.4 82.6 81.7 82.5 81.5 80.3 81.9 81.6 83.9 82.9 81.6 78.5 79.6 80.1 82.8 82.2 81.9 82.9 80.8 80.5 81.7 82.8 84.7 82.1 79.9 78.5 80.0 80.9 83.4 81.7 81.9 83.0 80.5 80.9 80.2 81.3 83.8 83.6 81.4 77.9 79.4 80.4 82.5 82.5 81.6 82.7 81.3 80.5 81.3 Industrial production (index) 1987 ............. 1988 ............. 1989 ............. 1990 ............. 1 9 9 1 ............. 1992 ............. 1993 ............. 1994 ............. 1995 ............. 1996 ............. 1997 ............. 1998 ............. 1999 ............. 2000 ............. 89.6 95.4 100.3 98.1 95.8 97.3 102.5 106.1 114.8 117.1 125.9 135.8 140.5 149.2 91.0 95.8 99.1 99.0 95.1 97.9 102.8 106.5 114.6 118.3 127.3 135.9 141.2 149.9 91.2 95.7 99.9 99.3 94.1 98.9 103.0 107.6 114.9 118.0 127.8 136.1 141.9 151.3 91.6 96.7 100.0 98.6 94.4 99.5 103.5 108.4 114.6 119.5 128.4 136.9 142.2 152.2 91.9 96.6 99.4 99.0 95.0 99.9 103.1 109.4 114.9 120.6 128.9 137.4 143.4 153.1 92.8 96.6 99.4 98.9 96.3 99.9 103.1 109.6 115.4 121.7 129.9 136.3 143.6 153.8 93.4 97.3 98.3 98.8 96.6 100.6 103.4 110.5 114.8 122.0 130.7 136.2 144.5 153.7 93.3 97.5 98.7 99.1 96.8 100.4 103.1 111.0 116.2 122.7 132.1 139.4 145.3 154.6 93.4 97.7 98.4 99.0 97.8 100.6 104.4 111.3 117.3 123.4 132.8 139.0 145.6 155.1 94.6 97.9 97.8 98.4 97.8 101.3 104.6 111.9 116.9 123.4 133.6 139.9 146.8 154.8 Capacity (index) 1987 ............. 1988 ............. 1989 ............. 1990 ............. 1 9 9 1 ............. 1992 ............. 1993 ............. 1994 ............. 1995 ............. 1996 ............. 1997 ............. 1998 ............. 1999 ............. 2000 ............. 113.2 115.2 117.0 119.9 122.4 124.6 127.5 130.9 136.6 144.7 153.4 163.9 175.3 183.8 113.4 115.3 117.3 120.1 122.6 124.8 127.7 131.3 137.3 145.4 154.2 164.9 176.0 184.6 113.6 115.4 117.5 120.3 122.8 125.0 128.0 131.6 137.9 146.2 154.9 165.9 176.8 185.3 113.8 115.6 117.8 120.5 123.0 125.3 128.2 132.1 138.5 146.9 155.7 167.0 177.5 186.1 113.9 115.7 118.0 120.7 123.1 125.5 128.5 132.5 139.2 147.7 156.5 168.0 178.3 186.9 114.1 115.8 118.3 120.9 123.3 125.8 128.8 132.9 139.8 148.4 157.4 169.0 179.0 187.6 114.2 116.0 118.5 121.1 123.5 126.0 129.0 133.4 140.5 149.1 158.2 170.0 179.7 188.4 114.4 116.1 118.7 121.3 123.7 126.3 129.3 133.9 141.2 149.8 159.1 171.0 180.3 189.1 114.6 116.3 119.0 121.5 123.8 126.5 129.6 134.4 141.9 150.5 160.0 171.9 181.0 189.9 114.7 116.5 119.2 121.7 124.0 126.7 129.9 134.9 142.6 151.2 160.9 172.8 181.7 190.7 Utilization (level, percent) 1987 ............. 1988 ............. 1989 ............. 1990 ............. 1 9 9 1 ............. 1992 ............. 1993 ............. 1994 ............. 1995 ............. 1996 ............. 1997 ............. 1998 ............. 1999 ............. 2000 ............. 79.1 82.9 85.7 81.8 78.2 78.1 80.4 81.1 84.0 80.9 82.1 82.9 80.2 81.2 80.2 83.1 84.5 82.5 77.5 78.5 80.4 81.1 83.5 81.3 82.6 82.4 80.2 81.2 80.3 82.9 85.0 82.6 76.6 79.1 80.4 81.7 83.3 80.7 82.5 82.0 80.3 81.6 N ote . See general note to table A.I. 80.6 83.7 85.0 81.8 76.8 79.5 80.7 82.1 82.7 81.4 82.5 82.0 80.1 81.8 80.7 83.5 84.2 82.0 77.1 79.6 80.2 82.6 82.5 81.7 82.3 81.8 80.4 81.9 81.4 83.4 84.1 81.8 78.1 79.4 80.1 82.5 82.6 82.0 82.5 80.6 80.2 82.0 81.8 83.8 83.0 81.6 78.2 79.8 80.1 82.8 81.7 81.8 82.6 80.1 80.4 81.6 81.5 84.0 83.1 81.7 78.2 79.5 79.7 82.9 82.3 81.9 83.1 81.5 80.6 81.7 81.5 84.0 82.7 81.5 79.0 79.6 80.6 82.8 82.7 82.0 83.0 80.9 80.4 81.7 82.5 84.1 82.1 80.9 78.9 79.9 80.6 83.0 82.0 81.6 83.0 81.0 80.8 81.2 1. Annual averages of industrial production are calculated from indexes that are not seasonally adjusted. Industrial Production and Capacity Utilization: The 2000 Annual Revision A .3. 143 R ates o f grow th in industrial production, by m ajor m arket group, 1 9 9 6 -2 0 0 0 Difference between growth rates: revised less earlier (percentage points) Revised growth rate (percent) Market group 1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 Total index .......................................................... 5.6 7.2 3.2 5.1 4.2 .3 .5 .3 .9 -.1 Products, total ............................................................ Final products........................................................ Consumer goods ............................................... Durable.......................................................... Automotive products .............................. Autos and trucks.................................. A u to s................................................. Trucks ............................................... Auto parts and allied g o o d s............... Other durable goods ................................ Appliances and electronics ............... Appliances and air conditioning .. Home electronics ............................ Carpeting and furniture...................... Miscellaneous ..................................... Nondurable .................................................. Non-energy ............................................... Foods and tobacco .............................. Clothing................................................ Chemical products .............................. Paper products..................................... Energy products....................................... F u els...................................................... Utilities ................................................ 4.7 4.9 2.2 2.7 3.0 4.1 -4.7 10.8 1.0 2.5 5.8 .9 10.9 3.0 .4 2.1 2.0 .6 -.4 5.2 3.5 2.6 3.6 2.1 6.0 6.5 4.0 8.4 10.6 15.0 5.1 21.1 2.5 6.6 12.1 4.2 19.8 4.2 4.5 2.7 2.9 2.2 -3.1 5.5 5.2 1.8 1.8 1.6 3.2 2.9 .2 4.3 5.4 5.5 4.1 6.3 6.1 3.4 10.2 8.2 11.7 6.2 -2.5 -1.0 -.5 .6 -8.1 3.3 -5 .4 -4.1 -.4 -5.5 3.4 3.4 3.1 8.2 3.3 2.5 -5.5 6.7 4.4 12.4 32.5 11.5 53.3 2.8 4.6 1.6 1.5 .2 -4.9 5.8 2.6 2.5 1.9 2.5 3.0 3.7 .7 -4.3 -6.8 -9 .9 -11.3 -9.3 -1.3 -2.1 -.5 -5 .2 5.1 .4 -4 .4 2.1 1.2 .8 -4.6 2.5 3.3 7.1 .0 11.8 .4 .5 .2 .9 .6 1.6 1.5 1.6 -1.1 1.2 1.7 1.8 1.5 -.1 1.6 .1 .1 -.6 .0 .4 2.1 .1 .0 .2 .8 .8 1.2 2.9 .3 2.0 1.5 2.0 -3 .4 4.8 10.7 6.3 14.2 1.2 2.7 .7 .8 .0 -.7 3.1 .7 -.1 .0 .0 .7 .6 1.1 -.8 .7 1.2 1.4 1.3 .1 -1.7 -13.6 -1 .6 -27.7 3.7 .8 1.5 1.8 1.9 -.1 3.4 .0 -.2 .2 -.4 .9 .8 1.1 1.4 .6 .6 .6 .6 .7 1.8 3.0 3.5 -7 .0 -.5 .2 .9 .9 .9 -2.7 1.8 1.4 1.2 .0 1.7 .3 .2 .2 -.1 1.1 2.5 .1 3.3 -.5 -1.2 -3.4 5.4 -14.0 1.5 -.4 .4 .7 .6 3.5 -.1 .3 -2.2 .8 -3.5 Equipment, total ............................................... Business equipment..................................... Information processing and related — Computer and office............................ Industrial .................................................. Transit ...................................................... Autos and trucks.................................. Other.......................................................... Defense and space equipment ................... Oil and gas well drilling.............................. Manufactured hom es................................... 9.3 11.6 20.7 57.6 1.7 15.4 -2 .0 4.3 -1.8 7.9 3.5 10.4 13.2 16.5 24.1 5.5 23.5 13.2 7.9 -5 .0 8.6 9.5 7.3 9.1 16.8 56.0 -1.0 12.9 9.0 2.9 8.2 -26.3 9.2 3.9 5.7 21.0 55.3 -.9 -8.9 1.6 -3.5 -3.1 5.6 -17.4 8.9 11.0 23.8 46.5 6.8 -9.2 -15.7 11.8 -3 .6 18.6 -35.4 .7 .8 2.2 4.1 .5 -.4 1.7 -1.7 .7 .0 -.3 .1 .4 .5 -8.1 .7 1.7 1.5 -2.8 -1.0 -1 .0 .6 .1 -.9 -3.2 -21.6 -1.7 2.2 2.6 4.5 7.6 -1.1 2.5 .4 1.0 -.5 4.7 2.0 3.0 2.6 4.6 .6 -.5 .5 .7 1.4 2.4 5.0 1.8 1.2 -.8 4.5 -.2 -1 .2 .5 Intermediate products........................................... Construction supplies ..................................... Business supplies ............................................. 4.1 6.1 2.8 4.5 4.0 4.8 4.1 7.6 1.8 3.2 4.5 2.3 1.0 -.6 2.1 .3 .2 .4 .9 1.2 .7 1.0 2.0 .4 1.2 1.3 1.2 .7 .2 1.0 Materials..................................................................... Durable................................................................... Consumer parts ................................................. Equipment parts ............................................... Semiconductors, printed circuit boards, and other electrical components........ Other ................................................................. Basic metals ................................................. Nondurable ............................................................ Textile ................................................................ Paper ................................................................. Chem ical............................................................ Other ................................................................. Energy ................................................................... Primary .............................................................. Converted f u e l.................................................. 7.0 10.6 1.5 23.8 9.4 14.1 10.3 26.1 3.7 7.2 .1 20.5 8.0 10.9 7.1 22.0 6.0 11.3 -2.8 35.8 .1 .1 -.3 .4 .2 -.3 .7 -.4 .2 -.1 2.9 -1 .6 .9 1.2 1.7 1.0 -.6 -.3 1.9 .2 53.4 3.9 4.1 3.5 1.4 4.4 4.7 1.3 .7 -1 .0 4.0 55.1 5.4 5.5 5.3 3.4 4.5 6.3 4.8 .1 -.1 .4 53.7 -.6 -3.0 -2.8 -8.5 -2.9 ^ .0 2.8 -.7 -1 .0 -.2 54.6 3.4 6.5 5.6 -1.2 4.2 9.4 2.0 .5 -.7 2.8 81.4 -1.8 -5.4 -4.5 -10.3 -3.8 -4.5 -2.7 1.7 .0 5.8 1.2 -.1 -.6 .1 -.9 .1 .1 .7 .0 -.2 .2 .9 -.6 .0 1.0 .3 .0 1.9 .5 .0 .0 .0 -2 .9 .1 2.6 .1 1.1 -.3 -.4 1.2 .3 -.6 2.0 2.7 1.3 1.5 -.4 -1.7 .2 -1.3 .5 1.3 .1 3.8 -1.1 -.1 -.2 .4 2.2 -.5 -.5 2.2 -.1 -.8 1.6 5.8 6.0 4.8 3.2 7.0 6.8 7.0 5.4 3.1 3.2 2.3 .9 5.2 5.0 4.0 2.4 4.7 5.0 3.3 .6 .3 .3 .2 .2 .4 .4 .6 .7 .3 .2 .8 1.0 .9 .8 1.0 .9 -.1 -.1 .2 .3 3.0 5.0 .7 2.2 .0 .2 .6 1.1 1.0 .5 Consumer goods excluding: Autos and trucks .................................................. Energy ................................................................... 2.1 2.2 3.2 4.3 -.1 .6 3.1 3.2 1.4 -.2 .2 .3 1.1 1.3 1.1 1.2 1.1 1.1 .1 .4 Business equipment excluding: Autos and trucks .................................................. Computers and office equipment........................ 13.1 7.6 13.3 12.2 9.1 4.8 6.1 .5 13.9 6.7 .7 .5 .3 1.2 -1.2 .8 .8 1.3 1.8 2.1 Materials excluding: Energy ................................................................... 8.7 11.7 4.5 9.5 6.9 .2 .3 .0 .7 -.7 Special aggregates Total excluding: Autos and trucks .................................................. Motor vehicles and parts..................................... Computers.............................................................. Computers and semiconductors'........................ Computers, communications equipment, and semiconductors..................................... N ote . Growth rates are calculated as the percentage change in the seasonally adjusted index from the fourth quarter of the previous year to the fourth quarter of the year specified. For 2000, the differences between growth rates are calculated from annualized growth rates between the fourth quarter of 1999 and the third quarter of 2000. 1. Semiconductors include related electronic components. 144 Federal Reserve Bulletin □ March 2001 A.4. Rates of growth in industrial production, by industry group, 1996-2000 Series Difference between growth rates: revised less earlier (percentage points) Revised growth rate (percent) SIC code1 1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 Total index ................................................ 5.6 7.2 3.2 5.1 4.2 .3 .4 .3 .9 -.1 Manufacturing................................................. 6.3 8.0 4.0 5.6 4.1 .4 .6 .3 .8 .0 Primary processing .................................... Advanced processing ................................ 8.3 5.0 10.4 6.4 4.3 3.9 8.8 3.7 5.0 3.5 .1 .5 .4 .6 .2 .5 .4 1.0 -.2 .0 Durable manufacturing ............................ Lumber and products............................ 24 Furniture and fixtures .......................... 25 Stone, clay, and glass products........... 32 9.2 1.8 5.2 5.6 11.5 3.7 7.8 3.4 8.0 5.4 6.2 5.6 8.2 .5 3.1 2.3 7.9 -7.6 5.3 .5 .3 .0 .6 -.2 .1 -.8 4.1 .1 .3 1.2 2.9 .6 1.2 .6 .5 1.1 .0 .5 3.8 .8 Primary metals ..................................... Iron and s te e l..................................... Raw steel ....................................... Nonferrous metals ............................ Fabricated metal products ................... Industrial machinery and equipment .. Computer and office equipment___ Electrical machinery ............................ Semiconductors and related electronic components............. 33 331,2 33 lpt 333-6,9 34 35 357 36 5.0 4.4 -1.1 5.8 4.2 10.9 51.5 24.3 6.1 5.8 7.5 6.4 6.2 7.3 21.5 28.4 -3 .4 -8.4 -9.4 2.6 1.5 11.6 54.0 20.4 8.0 12.6 16.6 3.0 1.6 13.6 54.3 25.2 -7.1 -10.6 -15.7 -3.2 .5 14.3 43.6 38.9 -.6 -.8 -1 .0 -.4 .0 .4 5.0 .9 .1 -.3 .3 .4 .3 -3.8 -6.3 2.2 3.0 3.2 3.4 2.6 1.5 -4.5 -24.9 -1.1 .5 .3 -1.1 .8 1.4 2.3 3.2 2.5 .2 .6 1.4 -.2 1.1 -.5 2.4 .6 3672-9 47.7 49.0 45.7 47.8 72.8 .8 -.9 -2.8 3.5 -.8 Transportation equipment..................... Motor vehicles and parts ................. Autos and light trucks ................. Aerospace and miscellaneous transportation equipment ....... Instruments............................................. Miscellaneous manufactures ............... 37 371 4.7 -.5 3.2 14.7 16.0 13.5 5.9 3.3 5.4 -1.4 5.9 1.5 -5.5 -8.4 -10.0 -.1 .9 1.6 1.5 2.2 2.2 3.7 2.3 1.4 1.6 1.9 .9 1.2 1.8 1.6 13.3 3.8 2.7 12.9 2.9 3.1 10.4 3.9 .7 -11.6 4.5 6.6 -.7 2.2 .0 -1 .7 1.4 .1 .6 -.4 .0 6.3 2.0 1.3 .5 -.4 2.3 .5 2.6 2.1 372-6,9 38 39 Nondurable manufacturing...................... Foods ...................................................... Tobacco products .................................. Textile mill products ............................ Apparel products.................................... Paper and products................................ Printing and publishing........................ Chemicals and products ...................... Petroleum products .............................. Rubber and plastic products ............... Leather and products ............................ 20 21 22 23 26 27 28 29 30 31 2.9 .3 -.3 .7 -.3 3.6 3.0 5.4 4.0 5.1 4.3 4.2 2.2 5.5 1.5 -.2 4.9 5.1 5.3 3.1 7.0 -5.4 -.4 3.7 -15.9 -6.5 -6.3 -.1 -1.8 .2 2.1 1.6 -10.1 2.5 .9 -1.9 -.2 ^ .0 3.0 1.8 6.7 .2 3.6 -6 .0 -.5 1.5 -2.7 -8.8 -5.5 -3.2 2.3 -.4 -.3 -1.8 -3.8 .4 -.5 -.9 -1 .2 .9 .6 1.2 .7 -.1 1.1 2.3 1.3 .3 .2 -2.3 2.3 .8 1.2 2.7 .4 2.4 1.7 .7 1.9 2.5 -.1 1.0 1.1 -.2 .9 .0 -1.5 -1.9 .6 1.0 .9 -4.6 1.0 .0 1.3 .9 .2 -.2 3.8 .4 .9 -.2 4.1 .3 -.1 1.1 -.5 -.3 -.1 4.4 M ining.............................................................. Metal mining ............................................. Coal mining ............................................... Oil and gas extraction .............................. Stone and earth m inerals.......................... 10 12 13 14 1.6 3.2 2.4 1.0 5.1 1.5 3.2 1.7 1.3 2.4 -5.3 -2.3 2.4 -8.7 4.3 -.5 -8.8 -1.3 .3 .6 1.5 -2.1 .6 2.2 -3 .2 -.3 -.8 -.2 -.1 .3 -.4 .3 -.2 -.4 -.7 -.3 -.2 -.4 -.3 .5 .4 3.1 -.1 .1 1.1 -1.7 -3.3 .7 -2.9 -.4 1.4 1.1 2.5 2.2 3.2 -1.5 -1.4 1.6 -11.9 2.3 1.7 4.6 7.7 5.5 15.1 .2 .1 .3 .1 .3 .3 .0 .8 .3 2.1 1.7 3.5 .2 .2 -2.8 41.0 35.7 37.2 40.6 55.6 1.9 -.9 -6.7 3.2 5.2 6.7 5.3 3.5 7.5 7.7 5.9 4.1 3.0 1.4 5.5 4.4 2.6 5.0 3.1 .1 .3 .2 .2 .4 .7 .8 .2 .8 1.1 .7 1.0 .9 -.1 .3 .5 3.2 5.4 1.2 2.3 -.7 .2 .7 1.2 1.0 .7 U tilities............................................................ Electric........................................................ 491,3pt Gas .............................................................. 492,3pt Special aggregates Computers, communications equipment, and semiconductors 2 ............................ Manufacturing excluding: Motor vehicles and parts ........................ Computers and office equipment............. Computers and semiconductors2 ........... Computers, communications equipment, and semiconductors2 ........................ N ote . Growth rates are calculated as the percentage change in the seasonally adjusted index from the fourth quarter of the previous year to the fourth quarter of the year specified. For 2000, the differences between growth rates are calculated from annualized growth rates between the fourth quarter of 1999 and the third quarter of 2000. Primary-processing manufacturing includes textile mill products; paper and products; industrial chemicals, synthetic materials, and fertilizers; petroleum products; rubber and plastics products; lumber and products; primary metals; fabricated metals; and stone, clay, and glass products. Advanced-processing manufacturing includes foods, tobacco products, apparel products, printing and publishing, chemical products and other agricultural chemicals, leather and products, furniture and fixtures, industrial and commercial machinery and computer equipment, electrical machinery, transportation equipment, instru ments, and miscellaneous manufactures. 1. Standard Industrial Classification; see Executive Office of the President, Office of Management and Budget, Standard Industrial Classification Manual, 1987 (U.S. Government Printing Office, 1987). 2. Semiconductors include related electronic components. pt. Part of classification. Industrial Production and Capacity Utilization: The 2000 Annual Revision A.5. 145 Rates of growth in capacity, by industry group, 1996-2000 Industry group Difference between growth rates: revised less earlier (percentage points) Revised growth rate (percent) SIC code1 1996 1997 1998 1999 2000 1996 1997 1998 1999 20002 Total index ....................................................... 5.4 5.9 6.5 4.6 4.6 -.1 .5 .3 .4 .8 Manufacturing........................................................ 6.1 6.5 7.2 5.1 5.0 -.1 .5 .2 .4 .8 Primary processing ........................................... Advanced processing ....................................... 9.2 4.0 8.5 4.9 9.4 5.7 4.9 5.2 8.0 3.0 -.7 .3 .1 .2 -.5 .5 -.8 1.3 1.5 -.4 Durable manufacturing ................................... Lumber and products.................................... 24 Furniture and fixtures .................................. 25 Stone, clay, and glass products................... 32 9.3 3.4 4.3 3.0 9.3 3.3 5.4 3.5 10.2 3.7 10.0 3.9 8.4 1.6 2.9 2.1 8.8 1.2 3.9 2.4 .0 -.3 .0 -.4 .5 .0 1.6 .4 -.5 .6 6.8 1.1 1.1 -1.3 .9 -1 .4 1.3 1.0 3.3 .2 Primary metals ............................................. Iron and s te el............................................. Raw s te e l............................................... Nonferrous metals ................................... Primary copper..................................... Primary aluminum .............................. Fabricated metal products .......................... Industrial machinery and equipment......... Computer and office equipment............. Electrical machinery .................................... Semiconductors and related electronic components..................... 33 331,2 33 lpt 333-6,9 3331 3334 34 35 357 36 5.3 4.8 2.4 6.0 .6 .3 4.4 12.0 39.3 30.4 3.4 3.9 6.1 2.9 1.0 .1 6.3 11.4 44.3 26.5 5.1 5.8 6.5 4.4 -1.1 .7 6.0 11.8 37.0 28.2 3.3 3.1 2.8 3.4 -3.1 1.5 1.8 18.1 72.7 18.4 .6 .9 1.7 .4 -2.9 1.3 2.5 10.6 39.0 33.2 -.4 -.3 -.4 -.4 5.7 -.1 -.8 -.3 -3.2 -.5 .0 .0 .1 -.2 .3 .0 .2 -2.9 -6.6 3.7 1.6 .6 .4 2.9 -.6 .7 .2 -4 .0 -21.8 -2.3 .8 -.8 1.2 2.6 -.9 1.5 1.5 2.8 10.8 1.2 -1.2 -1.5 -.5 -1 .0 3.0 .9 2.5 -1.7 -3.2 7.8 3672-9 57.6 46.3 55.2 31.8 69.8 -1.5 3.3 -5.8 .2 16.2 Transportation equipment............................ Motor vehicles and parts ........................ Autos and light trucks ........................ Aerospace and miscellaneous transportation equipment ............... Instruments.................................................... Miscellaneous manufactures ...................... 37 371 1.4 2.8 -2.1 3.6 6.2 5.2 4.1 4.7 4.4 2.2 2.7 .5 1.1 2.1 .9 1.0 1.3 2.4 1.2 2.5 1.0 1.4 2.0 1.8 2.3 2.5 2.1 1.0 .2 -.3 372-6,9 38 39 -.2 1.2 2.4 .6 1.1 1.7 3.1 3.4 2.9 1.6 5.8 2.4 -.4 1.8 1.3 .9 .9 .0 .0 .3 1.2 .3 1.2 1.4 2.3 1.8 1.2 1.6 -.1 1.0 20 22 23 26 261-3 27 28 2821 2823,4 29 30 31 2.2 2.4 .7 .0 2.3 2.6 1.0 3.4 3.3 -3.3 1.1 3.9 -1.8 3.4 2.3 -.2 .8 3.3 1.6 3.0 5.5 6.8 2.0 2.4 5.2 -.6 4.1 2.8 -.2 .8 4.3 .3 3.5 7.0 9.6 2.8 2.4 5.7 -2.0 1.3 2.2 -.5 -.9 .9 .9 .9 1.4 1.3 -1.5 1.9 3.8 -3.5 .9 .4 -1.7 -2.2 .8 .7 -.1 2.5 .5 1.4 .0 3.5 -4.4 .0 .2 -1 .2 -.3 1.0 1.4 .3 .0 .1 -1.3 -.3 -.3 -.3 .8 .0 -2 .4 .2 .0 -.7 1.2 2.7 5.1 1.0 .1 -.2 1.2 1.6 .6 -.5 .1 1.2 -1.1 1.9 4.2 6.0 2.3 -.5 .6 .8 .1 .3 -.8 .0 -1.4 -.3 1.1 .4 -2.4 -3.2 .3 -1.6 1.4 .6 -.1 -1.8 .2 .7 .5 -.8 1.6 -2.7 3.7 -.6 .1 ■7 s .6 3.2 1.1 .1 -.5 3.3 1.9 3.0 .9 1.5 3.5 4.8 -.1 .8 .3 -.8 1.4 2.0 -1.5 -.1 .8 -2.4 -1 .9 .4 -.8 -1.8 .6 -1.1 -.4 .0 .2 1.7 -.7 .4 .7 -.3 .3 -.2 .7 .3 2.5 .5 -1 .0 -.3 -.1 -1.3 -.5 -.9 -1.3 1.4 .4 -1.8 1.2 -1 .2 .7 .7 .4 1.0 -1.2 -.4 .9 1.1 1.1 1.0 .2 1.1 1.1 1.1 .5 2.4 3.2 .1 3.3 4.4 -.1 -1 .0 -.8 -.7 .8 .4 -.4 .4 .4 -.7 1.0 1.8 -.9 2.1 2.7 -1.1 Special aggregates Computers, communications equipment, and semiconductors3 ................................... 44.2 40.3 39.5 37.8 48.0 -1.4 2.4 -8.7 2.1 Manufacturing excluding computers, communications equipment, and semiconductors3 ........................................... 2.7 3.6 4.4 2.1 1.3 .1 .5 1.4 .8 Nondurable manufacturing.............................. Foods .............................................................. Textile mill products .................................... Apparel products........................................... Paper and products....................................... Pulp and paper ......................................... Printing and publishing................................ Chemicals and products .............................. Plastics materials ..................................... Synthetic fibers......................................... Petroleum products ..................................... Rubber and plastics products...................... Leather and products .................................... M ining..................................................................... Metal mining .................................................... Coal mining ...................................................... Oil and gas extraction ..................................... Oil and gas well drilling .................................. Stone and earth m inerals.................................. 10 12 13 138 14 U tilities................................................................... Electric................................................................ 491,3pt Gas ..................................................................... 492,3pt Note . See general note to table A.4. 1. Standard Industrial Classification; see table A.4, note 1. 2. Through the fourth quarter of 2000. 3. Semiconductors include related electronic components, pt. Part of classification. 9.0 I .8 146 Federal Reserve Bulletin □ March 2001 A.6. Capacity utilization rates, by industry group, 1967-2000 Item Difference between rates: revised less earlier (percentage points) Revised rate (percent of capacity, seasonally adjusted) SIC code1 1967-99 avg. 1988-89 high 1990-91 low 1998:Q4 1999:Q4 2000:Q4 Total index ...................................................... 82.1 85.4 78.1 81.2 81.6 81.3 .2 Manufacturing........................................................ 81.1 85.7 76.6 80.5 80.9 80.2 .3 .6 .2 Primary processing ........................................... Advanced processing ....................................... 82.1 80.6 88.3 84.2 76.7 76.6 81.6 80.4 84.6 79.2 82.3 79.7 .9 .5 1.9 .2 1.1 .4 24 25 32 79.6 82.6 81.3 78.7 84.6 93.6 86.6 83.5 73.1 75.5 72.5 69.7 81.0 84.2 78.6 85.1 81.0 83.3 78.8 85.2 80.3 76.1 79.8 83.7 .6 .5 .0 -.4 .7 2.1 -.3 1.7 .0 1.9 .2 2.2 Primary metals ............................................. Iron and ste el............................................. Raw steel ............................................... Nonferrous metals ................................... Primary copper..................................... Primary aluminum .............................. Fabricated metal products .......................... Industrial machinery and equipment......... Computer and office equipment............. Electrical machinery ................................... Semiconductors and related electronic components.................... 33 331,2 331 pt 333-6,9 3331 3334 34 35 357 36 81.5 81.3 80.9 81.9 76.2 88.4 78.0 81.4 81.3 81.2 92.7 95.2 92.7 89.3 86.3 100.4 82.0 85.4 86.9 84.0 73.7 71.8 71.5 74.2 73.5 97.3 71.9 72.3 66.9 75.0 84.8 79.9 76.3 90.8 106.4 88.4 77.0 83.0 85.6 79.0 88.6 87.2 86.6 90.4 77.5 89.7 76.9 79.8 76.5 83.4 81.8 77.3 71.8 87.1 78.3 80.6 75.4 82.5 79.1 87.0 1.6 1.6 2.1 1.5 19.6 -.2 1.5 -1.1 -.1 1.1 1.3 2.6 .5 -.1 2.1 -1.5 1.5 -1.3 -3.5 2.0 2.2 3.8 1.6 .2 11.1 -2.0 .7 -.9 -1 .6 -1.1 3672-9 79.6 81.1 75.6 76.8 86.1 87.7 -1.7 .1 -7.2 Transportation equipment............................ Motor vehicles and parts ........................ Autos and light trucks2 ...................... Aerospace and miscellaneous transportation equipment ............... Instruments.................................................... Miscellaneous manufactures ...................... 37 371 76.0 76.9 85.8 89.1 92.3 68.5 55.9 53.3 81.7 80.4 86.6 78.8 82.9 87.5 73.7 74.3 78.1 1.0 -.2 -.4 .5 -.7 -1.5 .6 .2 -.2 372-6,9 38 39 75.3 81.7 75.8 87.3 81.4 79.0 79.2 77.2 71.7 83.7 81.4 78.3 72.8 80.4 81.6 72.6 80.7 80.5 2.9 1.0 -.8 1.3 -.7 -.1 .6 .9 .6 20 22 23 26 261-3 27 28 2821 2823,4 29 30 31 83.3 82.8 85.6 80.8 88.9 92.4 85.5 79.3 86.8 85.1 87.1 84.7 80.9 87.3 85.4 90.4 85.1 93.5 98.0 91.7 86.2 97.0 99.7 88.5 89.6 83.3 80.7 82.7 77.7 75.5 85.0 89.9 79.6 79.3 74.8 77.6 85.1 77.4 76.1 80.1 81.2 82.2 74.0 85.0 90.9 80.1 74.5 89.4 79.9 94.7 85.5 71.2 81.0 80.2 82.4 71.7 86.7 94.0 80.8 78.4 94.0 87.6 93.2 85.3 69.3 79.9 81.0 76.4 69.3 83.2 89.2 82.7 76.2 89.5 81.7 92.9 80.9 69.8 -.3 1.1 .9 3.0 -1.1 .1 -1.1 -2.5 -2 .4 2.9 .6 .4 .4 .2 1.6 -2.1 3.6 .0 .5 -.9 -2.3 -.7 5.3 .5 1.5 2.3 .1 2.2 1.7 3.6 -.2 -.6 .1 -3.5 5.0 2.1 .7 1.5 4.2 10 12 13 138 14 87.4 79.4 86.7 88.4 73.9 84.8 88.0 89.4 91.5 88.2 69.3 89.0 87.0 79.9 83.4 88.7 60.0 79.4 83.8 87.1 87.3 82.4 62.0 86.4 84.7 79.6 85.4 84.7 66.8 86.6 86.6 79.4 85.4 87.6 79.5 83.8 .5 -.6 -.5 .9 -1.3 .6 1.9 1.2 -.9 2.5 -2 .6 2.6 .3 -1.3 -.7 .1 -3.1 2.5 U tilities................................................................... E lectric............................................................... 491,3pt Gas ..................................................................... 492,3pt 87.5 89.6 82.0 92.6 95.0 85.0 83.4 87.1 67.1 89.3 95.0 72.2 89.2 93.6 75.4 93.0 94.6 86.9 -.1 1.2 1.3 .9 1.2 4.5 -.4 -.5 4.0 Special aggregates Computers, communications equipment, and semiconductors3 ................................... 80.2 81.9 72.4 79.2 80.8 85.0 -.3 .3 -1 .0 Manufacturing excluding computers, communications equipment, and semiconductors3 ........................................... 81.2 86.1 76.8 80.7 80.9 79.3 .2 .3 .2 Durable manufacturing ................................... Lumber and products................................... Furniture and fixtures ................................. Stone, clay, and glass products .................. Nondurable manufacturing.............................. Foods ............................................................. Textile mill products ................................... Apparel products........................................... Paper and products....................................... Pulp and paper ......................................... Printing and publishing................................ Chemicals and products .............................. Plastics materials ..................................... Synthetic fibers......................................... Petroleum products ..................................... Rubber and plastics products...................... Leather and products ................................... M ining..................................................................... Metal mining .................................................... Coal mining ...................................................... Oil and gas extraction ..................................... Oil and gas well drilling ................................. Stone and earth minerals................................. N ote . The “high” column refers to periods in which utilization generally peaked; the “low” column refers to recession years in which utilization generally bottomed out. The monthly highs and lows are specific to each series, and all did not occur in the same month. 1998:Q4 1999:Q4 1. Standard Industrial Classification; see table A.4, note 1. 2. Series begins in 1977. 3. Semiconductors include related electronic components, pt. Part of classification. .6 2000: Q3 .1 Industrial Production and Capacity Utilization: The 2000 Annual Revision A.7. 147 Annual proportions in industrial production, by industry group, 1992-99 SIC code1 Item 1992 1993 1994 1995 1996 1997 1998 1999 Total index ....................................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Manufacturing........................................................ 85.4 85.9 86.7 86.9 87.0 88.2 88.9 88.4 Primary processing ........................................... Advanced processing ....................................... 31.0 54.5 31.8 54.1 33.4 53.3 33.7 53.2 33.5 53.5 34.0 54.1 33.7 55.2 34.1 54.3 Durable manufacturing .................................... Lumber and products................................... 24 Furniture and fixtures .................................. 25 Stone, clay, and glass products................... 32 44.8 2.1 1.4 2.1 45.6 2.2 1.4 2.1 46.3 2.2 1.4 2.2 46.8 2.1 1.4 2.2 47.6 2.1 1.4 2.3 48.3 2.1 1.5 2.3 48.9 2.1 1.6 2.4 48.4 2.1 1.6 2.4 Primary metals ............................................. Iron and s te e l............................................. Raw s te e l............................................... Nonferrous metals .................................... Fabricated metal products .......................... Industrial machinery and equipment......... Computer and office equipment............. Electrical machinery ................................... Semiconductors and related electronic components..................... 33 331,2 33 lpt 333-6,9 34 35 357 36 3.1 1.8 .1 1.4 5.0 7.8 1.6 7.1 3.3 1.9 .1 1.4 5.1 8.1 1.6 7.4 3.6 2.0 .1 1.6 5.2 8.4 1.6 7.8 3.5 1.9 .1 1.6 5.3 8.9 1.7 8.3 3.5 1.9 .1 1.6 5.5 9.1 1.8 8.6 3.6 2.0 .1 1.6 5.7 9.0 1.9 8.8 3.4 1.8 .1 1.6 5.7 9.1 2.0 8.6 3.4 1.8 .1 1.6 5.6 9.0 2.3 8.5 3672-9 2.5 2.6 2.9 3.4 3.6 3.7 3.5 3.6 Transportation equipment............................ Motor vehicles and parts ........................ Autos and light trucks2 ...................... Aerospace and miscellaneous transportation equipment ............... Instruments.................................................... Miscellaneous manufactures ...................... 37 371 9.4 4.7 2.5 9.5 5.1 2.5 9.3 5.5 2.8 8.9 5.4 2.8 8.9 5.5 2.9 9.3 5.7 3.0 9.9 5.6 2.7 9.7 5.9 2.9 372-6,9 38 39 4.7 5.4 1.3 4.4 5.3 1.3 3.8 4.9 1.3 3.5 4.8 1.3 3.4 4.9 1.4 3.6 4.7 1.3 4.3 4.8 1.3 3.9 4.7 1.3 Nondurable manufacturing.............................. Foods .............................................................. Tobacco products ......................................... Textile mill products .................................... Apparel products........................................... Paper and products....................................... Printing and publishing................................ Chemicals and products .............................. Petroleum products ..................................... Rubber and plastics products...................... Leather and products ................................... 20 21 22 23 26 27 28 29 30 31 40.6 9.6 1.6 1.8 2.2 3.5 6.8 10.0 1.4 3.5 .3 40.3 9.6 1.1 1.8 2.1 3.5 6.8 10.0 1.5 3.6 .3 40.4 9.3 1.2 1.8 2.1 3.8 6.6 10.0 1.6 3.8 .2 40.2 9.2 1.3 1.7 2.0 3.9 6.6 9.9 1.5 3.7 .2 39.4 9.1 1.3 1.6 1.9 3.5 6.6 9.8 1.7 3.7 .2 39.9 9.0 1.4 1.6 1.8 3.4 6.9 10.1 1.6 3.8 .2 40.1 9.2 1.7 1.5 1.7 3.4 6.8 10.2 1.5 3.8 .2 40.0 9.0 1.7 1.4 1.5 3.4 6.6 10.4 2.0 3.8 .2 M ining..................................................................... Metal mining .................................................... Coal mining ...................................................... Oil and gas extraction ..................................... Stone and earth m inerals................................. 10 12 13 14 6.8 .4 1.0 4.8 .6 6.3 .4 .9 4.4 .6 5.9 .4 .9 4.0 .6 6.0 .4 .8 4.1 .6 6.3 .4 .8 4.5 .6 5.6 .3 .7 3.9 .6 5.0 .3 .7 .6 5.6 .2 .6 4.2 6 .0 7.8 6.2 1.6 7.7 6.1 1.6 7.4 5.8 1.6 7.1 5.6 1.5 6.7 5.3 1.4 6.3 4.9 1.4 6.1 4.8 1.3 5.9 4.6 1.3 U tilities................................................................... Electric................................................................ 491,3pt Gas ..................................................................... 492,3pt Special aggregates Computers, communications equipment, and semiconductors 3..................................... Manufacturing excluding: Motor vehicles and parts.................................. Computers and office equipment..................... Computers and semiconductors3 ................... Computers, communications equipment, and semiconductors3 ................................ |Jjf§|SI|Jf 5.7 5.8 6.2 6.9 7.3 7.6 7.5 7.8 80.7 83.8 81.3 80.9 84.3 81.7 81.2 85.1 82.2 81.5 85.2 81.8 81.5 85.2 81.6 82.4 86.3 82.6 83.3 86.9 83.4 82.5 86.1 82.5 79.8 80.1 80.5 80.1 79.7 80.5 81.4 80.6 N ote . The IP proportion data are estimates of the industries’ relative contribution to overall IP growth in the following year. For example, a 1 percent increase in durable goods manufacturing in 2000 would account for a 0.484 percent increase in total IP. 1. Standard Industrial Classification; see table A.4, note 1. 2. Series began in 1977. 3. Semiconductors include related electronic components, pt. Part of classification. 148 Federal Reserve Bulletin □ March 2001 A .8. R ates o f grow th in electric p ow er u se, 1 9 9 6 -2 0 0 0 --------- Difference between growth rates: revised less earlier (percentage points) Revised growth rate (percent) 111 1 1998 1999 2000 1996 1997 1998 1999 2000 Total 1.6 1.0 -1.2 1.0 .6 .1 -.1 -.3 1.3 .2 Manufacturing.................... 1.6 1.2 -1 .2 1.1 .7 .2 -.1 -.3 1.4 .3 3.8 1.0 2.7 1.1 5.5 4.1 4.1 2.6 4.2 .3 .4 -1.8 2.1 1.0 2.2 -4.8 -.7 .5 -2 .6 -1 .0 1.5 6.4 1.3 -.1 1.9 -.4 1.9 .9 .1 -.4 3.6 -1.9 11.6 2.7 3.1 5.1 4.0 2.3 3.4 3.3 4.8 -1.0 4.9 7.4 .6 .5 .7 .6 .8 .2 .1 .4 .6 .3 1.3 -.9 -2.5 1.1 -.5 -1.2 -.5 -.1 -.3 -1 .4 -.7 -1.7 -.5 .4 .4 -.3 -1.0 .5 -.5 -.6 -.1 -2.3 -1.8 1.9 .9 .8 1.8 2.4 2.0 2.1 1.8 1.6 -3 .0 7.7 .6 1.1 2.3 .1 -.1 .7 1.2 -.9 1.8 5.6 2.3 -.1 1.7 1.3 -2 .0 1.1 -.5 -.9 -.4 .6 .5 -.7 .5 .4 -.6 -3.4 1.8 -.9 -1 .4 1.8 1.9 -.6 .0 -.1 .7 .1 -.9 1.0 -1.7 -.8 .7 -.9 -.3 -.6 .9 2.6 .8 -.5 9.0 4.5 3.0 .3 -4.3 1.2 5.6 .0 -.4 -.6 .1 .4 1.1 .9 .0 -2.1 1.0 15.2 Durable manufacturing ........................ Lumber and products........................ Furniture and fixtures ...................... Stone, clay, and glass products....... Primary metals .................................. Fabricated metal products ............... Industrial machinery and equipment Electrical machinery ........................ Transportation equipment................. Instruments......................................... Miscellaneous manufactures ........... 24 25 32 33 34 35 36 37 38 39 .3 4.7 4.8 4.1 -3 .0 3.9 1.3 2.9 -.1 -2 .6 8.5 Nondurable manufacturing....... Foods ....................................... Tobacco products ................... Textile mill products ............. Apparel products.................... Paper and products................. Printing and publishing......... Chemicals and products ....... Petroleum products ............... Rubber and plastics products , Leather and products............. 20 21 22 23 26 27 28 29 30 31 2.7 3.4 1.3 .7 -.7 .6 -.1 5.6 -2 .6 3.8 -2 .2 -.9 3.7 .1 -.2 .1 1.6 1.5 -3.8 -1.5 1.3 -1.4 -.8 3.0 -1.7 -2.3 -2 .4 -2.5 1.5 -1.6 -2.1 3.3 -4.4 1.0 2.2 -6.7 -2 .4 2.7 1.6 .8 .8 L7 -2 4 -.9 2.3 -.8 1.1 -1.6 -1.3 1.5 -4.5 3.6 2.4 6.6 10 12 13 14 1.7 -1.2 .0 3.6 4.2 -.8 .0 -.6 .5 -4.6 -.3 .6 .6 -5.8 8.4 -.6 -1.1 -4 .4 1.7 -.1 -1.2 -.2 3.6 -2.0 -6.0 -1 .4 -3.8 .1 -.8 -.2 -.6 -.4 -.6 -1.0 .2 .3 .8 -.4 .9 -1 .0 .5 .5 .4 -.2 1.4 -.3 -4.3 .2 2.1 .3 1.2 2.1 -5.5 2.3 1.0 .8 -1.5 -1.3 .5 1.1 1.1 -1.1 1.2 1.1 .6 .2 .1 .2 -.1 -.2 .1 -.2 -.5 2.4 1.1 1.4 -2.6 .2 .1 4.3 M ining.................................. Metal mining ................. Coal mining ................... Oil and gas extraction .. Stone and earth minerals Supplementary groups Total, excluding nuclear nondefense Utilities sales to industry ................... Industrial generation .......................... N ote . Growth rates are calculated as the percentage change in the seasonally adjusted index from the fourth quarter of the previous year to the fourth quarter of the year specified. For 2000, the growth rates are calculated from the fourth quarter of 1999 to the third quarter of 2000 and annualized. 1. Standard Industrial Classification; see table A.4, note 1. 149 Treasury and Federal Reserve Foreign Exchange Operations This report, presented by Peter R. Fisher, Executive Vice President, Federal Reserve Bank o f New York, and Manager, System Open Market Account, de scribes the foreign exchange operations o f the U.S. Department o f the Treasury and the Federal Reserve System fo r the period from October 2000 through December 2000. Ryan Faulkner was primarily responsible fo r preparing the report. During the fourth quarter of 2000, the dollar appre ciated 5.7 percent against the yen and depreciated 6.4 percent against the euro. On a trade-weighted basis, the dollar ended the quarter 1.0 percent weaker against an index of major currencies. Movements in the major currency pairs were largely influenced by changes in market expectations for economic growth in the United States, Europe, and Japan. Questions about the pace of Japan’s economic recovery pres sured the yen against the major currencies, while the dollar declined against the euro in December amid signs of slower U.S. growth. U.S. monetary authori ties did not intervene in the foreign exchange markets during the quarter. M ARKET REACTION TO CHANGING GLOBAL ECONOMIC GROWTH TRENDS During the fourth quarter, releases of economic data in the United States indicated continued low inflation and a slowdown in the pace of U.S. economic growth. Earlier in the quarter, market participants had expected a steady near-term U.S. interest rate policy, given the price pressures emanating from high energy prices and tight U.S. labor markets. On November 15, the Federal Open Market Committee (FOMC) left the target federal funds rate unchanged at 6.5 percent and maintained its statement that the balance of risks was weighted toward inflationary pressures. By early December, however, there was a sharp downward shift in U.S. interest rate expectations, prompted by (1) increasing signs of slower U.S. growth, (2) comments by Federal Reserve Chair man Alan Greenspan that were interpreted as sug gesting the possibility of lower rates, and (3) weaker 1. Trade-weighted G-3 currencies, 2000:Q4 Trade-weighted dollar Trade-weighted euro T rade-w eighted yen N ote . In this and the charts that follow, the data are for business days except as noted. Source . Bloomberg L.P. and the Bank of England. financial market conditions. Among the economic data released during this period were weaker-thanexpected third-quarter GDP data (advance release), November consumer confidence and National Association of Purchasing Managers (NAPM) sur veys, October durable goods data, and Novem ber retail sales figures. As expectations for more moderate growth solidified, many market partici pants also continued to lower their U.S. earn- 2. Yield implied by the March federal funds futures contract, 2000:Q4 S o u r c e . Bloomberg L.P. 150 Federal Reserve Bulletin □ March 2001 ings forecasts. During the fourth quarter, the S&P 500 and Nasdaq Composite equity indexes, on balance, fell 8.1 percent and 32.7 percent, respectively, with some of their sharpest daily losses occurring in December. From November 28 to the end of the quarter, the implied yield on the March federal funds futures contract declined 40 basis points to 6.0 percent. Over the same period, the yields on the two-year Treasury note and thirty-year Treasury bond fell 76 and 24 basis points, respectively, leading the two- to thirty-year coupon curve to return to a positive spread for the first time since January 2000. On Decem ber 19, the FOMC left its target for the federal funds rate unchanged, while moving its assessment of the balance of risks away from inflationary pressures and to one “weighted toward conditions that may gener ate economic weakness.” In Europe, expectations for further interest rate increases moderated over the period, in response to signs of slower euro-area growth, the recovery of the euro’s exchange value, and a decline in oil prices. At the outset of the quarter, on October 5, the European Central Bank (ECB) raised its minimum bid on its refinancing operations 25 basis points to 4.75 per cent. In the press conference that followed the rate announcement, ECB President Duisenberg explained that the rate hike was aimed at containing inflationary pressures “stemming from oil prices and the foreign exchange rate of the euro.” After this decision, mar ket participants were divided over the possibility of additional rate hikes by the ECB. German and Italian business confidence surveys for September and Octo ber suggested a modest decline in industrial produc tion, but euro-area aggregate inflation and money supply reports over the same period continued to show modest upward pressure on prices. In addition, 3. Yield implied by the March euribor contract, 2000: Q4 S o u r c e . Bloomberg L.P. 4. Yields on short-term Japanese fixed-income securities, 2000:Q4 Source . Bloomberg L.P. the euro remained at relatively low levels against other major currencies, and oil prices continued to climb. During the second half of the quarter, the implied yield on the three-month March euribor futures contract fell 35 basis points to 4.73 percent, coinci dent with the appreciation of the euro against most major currencies and the decline in oil prices that began in late November. Market participants also reduced their expectations for additional ECB tight ening as signs of a modest slowdown in euro-area industrial activity emerged. The November industrial confidence survey for the euro area declined for the first time in three months to levels last seen in May 2000. In Japan, reports on economic activity during the quarter increased speculation that Japan’s economic recovery was slowing. A report by the Economic Planning Agency on November 10 and the release of Japan’s third-quarter GDP report on December 4 indicated that although investment by large manufac turing firms remained strong, consumer spending and export growth appeared to be stagnating. The yield on the two-year Japanese government bond (JGB) fell 13 basis points over the first two months of the quarter to 0.48 percent. During the first two weeks of December, short-dated Japanese yields briefly moved higher in response to funding pressures ahead of the year-end and amid related concerns about the transi tion to the real-time gross settlement system in Janu ary 2001. However, yields later declined after the release of the December Tankan report and the gov ernment’s announcement of a smaller-than-expected 2001 fiscal budget. On balance, two-year and tenyear JGB yields ended the quarter 14 and 22 basis points lower respectively. Treasury and Federal Reserve Foreign Exchange Operations 6. DECLINE OF R ISK APPETITE DURING THE FOURTH QUARTER In response to the initial shift in growth expecta tions for the Group of Three (G-3) economies and an overall increase in market volatility, investors report edly adopted somewhat more neutral currency posi tions and were generally more risk averse during the first half of the quarter. Net speculative positions in currency futures on the International Monetary Mar ket (IMM), as well as flow survey data, suggested that investors maintained a relatively small net long position in euros and a substantial net short position in yen. Although there was little change in the reported net speculative euro position, the euro area continued to register net cross-border investment outflows but in lower amounts than previous months. According to the ECB, the net outflow of direct investment and portfolio investment from the euro area totaled €15.7 billion and €1.7 billion, respectively, in Octo ber, which was less than half the total net outflows recorded in September. Against the dollar, the euro fell to $0,825 on Octo ber 25, a new low, but then rebounded the following week, as the ECB entered the market to buy euros on November 3, 6, and 9, pushing the exchange rate to close as high as $0,876. Against the yen, the euro declined 2.4 percent during the first half of the quar ter. The dollar-yen exchange rate, meanwhile, did not exhibit a noticeable trend and traded in a rela tively tight range, between ¥109.30 and ¥107.00, over the first half of the quarter. Implied volatility for one-month euro-dollar options, which had increased to as high as 16.9 per cent on October 27, also declined after the ECB’s interventions. Although the euro once again declined 5. The euro against the dollar and the yen, 2000:Q4 per euro 1.00 — Euro-yen Euro-dollar S o u r c e . Bloomberg L.P. 151 One-month euro-dollar option implied volatility and risk reversals, 2000:Q4 Implied volatility Nov. Source . Bloomberg L.P. against the dollar in mid-November, to as low as $0,838 on November 24, market anxiety over further euro depreciation remained relatively low, with onemonth euro-dollar option implied volatility fluctuat ing between 13 percent and 15 percent from midNovember to the end of the quarter. The premium for one-month euro put options over one-month euro call options, as measured by risk reversals, also declined after the ECB interventions. The premium for euro puts briefly rose as high as 0.6 percent in volatility terms on October 26 and 27. However, during much of November and throughout December, there was a premium for one-month euro call options over onemonth euro put options. C u r r e n c y M o v e m e n t s D o m in a t e d b y E u ro S t r e n g t h a n d Ye n We a k n e s s in t h e S e c o n d H a l f o f t h e Q u a r t e r The second half of the quarter coincided with a sharp appreciation of the euro and depreciation of the yen, with investors taking more aggressive currency posi tions as growth and interest expectations for the G-3 economies solidified. According to data from the IMM, the number of speculative net long euro posi tions increased nearly three-fold in mid-December to reach its highest level since October 1999. The num ber of short speculative yen positions rose modestly in mid-December to its highest level since February 2000. Against the dollar, the euro appreciated 9.9 per cent and the yen depreciated 4.8 percent during the second half of the fourth quarter. Against the dollar, the euro was largely supported by reports of a narrowing in U.S.-euro-area growth and interest rate differentials after the release of 152 7. Federal Reserve Bulletin □ March 2001 Spread of two-year dollar swap rate over two-year euro swap rate, 2000:Q4 edly maintained, and in some cases increased, dollar and euro investments ahead of the year-end. In addi tion, foreign investors were net sellers of Japanese equities for most of the fourth quarter. According to the Ministry of Finance, Japanese investors bought ¥1.9 trillion in foreign stocks and bonds in the fourth quarter, more than double the net amount purchased during the third quarter. Over the same period, for eign investors sold ¥20.9 billion in Japanese stocks. TREASURY AND FEDERAL RESERVE FOREIGN Ex c h an g e R eserves Source . Bloomberg L.P. weaker-than-expected U.S. economic data at the end of November. After declining just 3 basis points over the first half of the quarter, from mid-November to the end of December, the spread of the two-year dollar swap rate over the two-year euro swap rate declined 21 basis points to a spread of 110 basis points. The yen, meanwhile, weakened sharply against the major currencies, falling 13.4 percent against the euro. The yen’s depreciation reflected the growing speculation surrounding the pace of the country’s economic recovery, as well as uncertainty about the future of Prime Minister Mori’s administration. Although Prime Minister Mori won a no-confidence vote by the parliament in late November, market participants commented that Mori’s low popularity ratings continued to cloud the political outlook. The yen was also pressured by reported portfolio reallocations away from Japan by domestic and for eign investors. Japanese institutional investors report8. The dollar against the yen, 2000:Q4 S o u r c e . Bloomberg L.P. At the end of the quarter, the current values of the euro and yen reserve holdings totaled $15.7 billion for the Federal Reserve System and $15.7 billion for the Treasury’s Exchange Stabilization Fund. The U.S. monetary authorities invest all of their foreign cur rency balances in a variety of instruments that yield market-related rates of return and have a high degree of liquidity and credit quality. To the extent practi cable, the investments are split evenly between the Federal Reserve System and the Exchange Stabiliza tion Fund. A portion of the U.S. monetary authorities’ foreign exchange reserves are presently invested in gov ernment securities held outright or under repur chase agreement. Foreign currency reserves are also invested in deposits at the Bank for International Settlements and in facilities at other official institu tions. As of December 29, direct holdings of foreign government securities totaled $13.9 billion, split evenly between the two authorities. Foreign govern ment securities held under repurchase agreement to taled $2.8 billion at the end of the quarter and were also split evenly between the two authorities. The U.S. monetary authorities’ investments in mar ketable securities have been limited to obligations of the sovereign issuer of the underlying currency; for example, the securities previously denominated in duetsche marks have been obligations of the German government. Given the introduction of the euro, the U.S. monetary authorities now expect to diversify their euro-denominated holdings of government secu rities to include the obligations of additional euroarea sovereigns. This diversification will be gradual and will apply to holdings of securities on an outright basis and under repurchase agreements. The govern ment securities eligible for investment must meet the highest standards of protection against credit, liquid ity, and operational risks. In the assessment of credit quality within the euro area, the U.S. monetary authorities take into account the public credit ratings Treasury and Federal Reserve Foreign Exchange Operations of each sovereign, as well as other institutional stan dards that afford a high level of safety. The assess ment of liquidity and operational risks includes the 1. 153 analysis of secondary market factors, such as bid-ask spreads, average trade size, and the regularity and size of issuance. □ Foreign currency holdings of U.S. monetary authorities based on current exchange rates, 2000:Q4 Millions of dollars Quarterly changes in balances, by source Balance, Item S e p t. M ). 2000 Net purchases and sales1 Effect of sales2 Investment income Currency valuation adjustments3 0.0 0.0 0.0 0.0 0.0 0.0 69.5 3.7 73.2 434.3 -492.8 -58.5 Federal Reserve System O pen M arket A ccount (SOMA) E u r o ......................................................................... Japanese y e n .......................................................... Total ................................................................... 6,872.1 8,733.7 15,605.8 Interest receivables (net)5 ................................... Other cash flow from investments4 ................... 66.8 0.0 Total ................................................................. 15,672.6 0.0 0.0 73.2 -58.5 U.S. T reasury E xchange Stabilization F und (ESF) E u r o ......................................................................... Japanese yen .......................................................... Total ................................................................... 6,869.5 8,733.8 15,603.3 0.0 0.0 0.0 0.0 0.0 0.0 69.6 3.7 73.3 434.0 -492.8 -58.8 Interest receivables5 ............................................. Other cash flow from investments4 ................... 57.6 0.0 Total ................................................................. 15,660.9 N o t e . Figures may not sum to totals because of rounding. 1. Purchases and sales for the purpose of this table include foreign cur rency sales and purchases related to official activity, swap drawings and repay ments, and warehousing. 2. This figure is calculated using marked-to-market exchange rates; it represents the difference between the sale exchange rate and the most recent revaluation exchange rate. Realized profits and losses on sales of foreign cur rencies, computed as the difference between the historical cost-of-acquisition exchange rate and the sale exchange rate, are reflected in table 2. 2. 0.0 0.0 Net profits or losses (-) on U.S. Treasury and Federal Reserve foreign exchange operations, based on historical cost-of-acquisition exchange rates, 2000:Q4 73.3 -58.8 Interest accrual and other4 Balance, Dec. 31, 2000 7,375.9 8,244.6 15,620.5 9.7 0.0 76.5 0.0 9.7 15,697.0 7,373.1 8,244.7 15,617.8 3.6 61.2 0.0 -3.6 15,679.0 3. Foreign currency balances are marked to market monthly at month-end exchange rates. 4. Values are cash flow differences from payments and collection of funds between quarters. 5. Interest receivables for the ESF are revalued at month-end exchange rates. Interest receivables for the Federal Reserve System are carried at average cost of acquisition and are not marked to market until interest is paid. . . . Not applicable. 3. Reciprocal currency arrangements, December 31, 2000 Millions of dollars Institution Amount of facility Outstanding, Dec. 31, 2000 Millions of dollars Period and item Federal Reserve System Open Market Account Total .................................................. Valuation profits and losses on outstanding assets and liabilities, Sept. 30, 2000 E u ro...................................................... Japanese yen ....................................... -1,370.9 1,687.5 -1,587.3 1,899.7 Total ............................................... 316.6 312.4 Realized profits and losses from foreign currency sales, Sept. 30, 2000-Dec. 31, 2000 E uro...................................................... Japanese yen ....................................... 0.0 0.0 0.0 0.0 Total ................................................ 0.0 0.0 Valuation profits and losses on outstanding assets and liabilities, Dec. 31, 2000 E uro...................................................... Japanese yen ....................................... -936.6 1,194.7 -1,153.3 1,406.9 Total ................................................ 258.1 253.6 Reciprocal currency arrangements U.S. Treasury Exchange Stabilization Fund 2,000 3.000 0.0 0.0 5.000 0.0 Federal Reserve and U.S. Treasury Exchange Stabilization Fund currency arrangements Bank of M exico................................... 3.000 0.0 3.000 0.0 154 Industrial Production and Capacity Utilization for January 2001 Released fo r publication February 16 Industrial production fell 0.3 percent in January. Manufacturing output edged down 0.1 percent after a 1.1 percent drop in December; the December decline was likely exacerbated by bad weather in certain Industrial production areas. Excluding motor vehicles and parts, manu facturing output increased 0.3 percent in January after having fallen 0.8 percent in December. Output at utilities dropped back 6.0 percent as temperatures moved closer to seasonal norms after the extreme cold in December. Production in mining moved up Ratio ^ 1992 = 100 Excluding high-tech industries 85 Capacity utilization Percent of capacity 85 80 75 70 Percent of capacity 90 85 80 1995 1997 1999 2001 High-tech industries are defined as semiconductors and related electronic components (SIC 3672-9), computers (SIC 357), and communications equip ment (SIC 366). Shaded areas are periods of business recession as defined by the NBER. 155 Industrial production and capacity utilization, January 2001 Industrial production, index, 1992=100 Percent change Category 2000 2001 20001 Total ..................................................... 2001' Jan. 2000 to Jan. 2001 Oct.r Nov.r Dec.r Jan.f Oct.' Nov.r Dec.r Jan.? 148.7 148.2 147.4 147.0 -.2 -.3 -.5 -.3 2.4 148.5 148.1 147.3 -.3 -.3 -.6 136.3 122.7 200.0 142.3 171.1 136.4 122.7 200.4 140.9 169.6 135.9 122.4 199.3 139.5 168.4 135.0 121.0 198.9 138.8 168.7 -.3 -.9 .3 -.6 -.1 .0 .0 .2 -.9 -.9 -.4 -.3 -.5 -1.0 -.7 -.6 -1.1 -.2 -.5 .2 1.3 -.9 7.4 -2.6 4.2 154.9 197.6 116.3 100.1 120.0 154.0 196.7 115.5 99.9 123.8 152.4 194.9 114.0 100.2 132.6 152.3 194.4 114.2 102.3 124.7 -.1 -.4 .3 -.3 -1 .4 -.6 -.4 -.7 -.2 3.2 -1.1 -.9 -1.3 .3 7.1 -.1 -.3 .2 2.1 -6 .0 2.0 5.0 -1.6 3.7 5.8 2001 Capacity, percent change, to Jan. 2001 Major market groups Consumer goods .................................. Major industry groups M em o Capacity utilization, percent Average, 1967-00 Low, 1982 High, 1988-89 Total 82.1 71.1 Manufacturing............... Advanced processing Primary processing .. M inin g............................ Utilities .......................... 81.1 80.6 82.2 87.4 87.6 69.0 71.0 65.7 80.3 75.9 Jan. Oct.r Nov.r D ec/ Jan.p 85.4 81.9 82.0 81.4 80.7 80.2 4.5 85.7 84.2 88.3 88.0 92.6 81.2 79.4 85.1 84.5 90.0 81.2 79.9 84.5 86.3 89.5 80.4 79.7 82.8 86.2 92.1 79.2 78.8 81.0 86.6 98.3 78.9 78.6 80.5 88.5 92.2 5.0 2.7 8.5 -1.0 3.4 N ote . Data seasonally adjusted or calculated from seasonally adjusted monthly data. 1. Change from preceding month. 2.1 percent. At 147.0 percent of its 1992 average, industrial production was 2.4 percent higher than in January 2000. The rate of capacity utilization for total industry fell to 80.2 percent in January, a level almost 2 percentage points below its 1967-2000 average. M ARK ET GROUPS The index for consumer goods fell 1.1 percent in January, with decreases of about 5 percent in the production both of automotive and of energy prod ucts. A drop of 2.8 percent in the production of durable consumer goods reflected the weakness in automotive products and a sharp decline in home electronics. The production of nondurable consumer goods other than energy products rose 0.3 percent and thereby reversed a third of the decline posted in December. The output of business equipment slipped 0.2 per cent in January. The index for transit equipment dropped 3.2 percent (mainly because of another 2000 2. Contains components in addition to those shown, r Revised, p Preliminary. sharp decline in motor vehicles), and the production of industrial and other equipment fell 0.5 percent (mainly because of a sharp drop in farm equip ment). The output of information processing equip ment increased 1.2 percent after having been flat in December; on balance, production in this group of industries has slowed noticeably since last summer. The production of construction supplies contracted again in January, falling 0.5 percent, and the index is now 2.6 percent below its year-ago level. The output of materials inched up 0.2 percent: The indexes for durable materials and energy materials were up mod erately and the index for nondurable materials was unchanged. Among durable materials industries, the output of semiconductors, printed circuit boards, and other electronic components posted a gain in January that was similar to those seen in recent months. However, the consumer parts group was hit by another decline in the production of original equip ment parts for motor vehicles. Within nondurable materials, a 1.7 percent gain in the production of paper materials, which had fallen sharply in Novem 156 Federal Reserve Bulletin □ March 2001 ber and December, was largely offset by further declines in chemicals and textiles. In d u s t r y G r o u p s Manufacturing output declined 0.1 percent in Janu ary, with a 0.3 percent decrease in the production of durable goods and a 0.2 percent increase in non durable goods. Among durable goods, the losses were concentrated in motor vehicles and parts, lum ber, furniture and fixtures, and primary metals. The largest increases in output were in the electrical machinery, instruments, and miscellaneous manu facturing industries. The output of nondurables, which declined, on balance, over the previous six months, posted a modest uptick in January, with small but widespread gains. The factory operating rate declined further, to 78.9 percent in January, 23/4 percentage points below its September level and the lowest level since early 1992. In recent months, capacity utilization has fallen significantly in the transportation equipment and pri mary metals industries. The operating rate at utilities fell back to 92.2 percent in January after having been at the abnormally high level of 98.3 percent in December. The operating rate for mining, 88.5 per cent, was lifted by higher-than-average readings in the coal mining and oil and gas extraction industries. Ne w Release form at Beginning with the February 16 issue, the G.17 statistical release has been redesigned. Special aggregates have been added. Although some detailed industry data are no longer listed in the regular release, these series continue to be available on the Federal Reserve Board’s public web site (www.federalreserve.gov/releases/gl7). □ 157 Testimony of Federal Reserve Officials Statement o f Alan Greenspan, Chairman, before the Committee on the Budget, U.S. Senate, January 25, 2001 I am pleased to appear here today to discuss some of the important issues surrounding the outlook for the federal budget and the attendant implications for the formulation of fiscal policy. In doing so, I want to emphasize that I speak for myself and not necessarily for the Federal Reserve. The challenges you face both in shaping a budget for the coming year and in designing a longer-run strategy for fiscal policy were brought into sharp focus by the release last week of the Clinton Admin istration’s final budget projections, which showed further upward revisions of on-budget surpluses for the next decade. The Congressional Budget Office (CBO) also is expected to again raise its projections when it issues its report next week. The key factor driving the cumulative upward revi sions in the budget picture in recent years has been the extraordinary pickup in the growth of labor pro ductivity experienced in this country since the mid1990s. Between the early 1970s and 1995, output per hour in the nonfarm business sector rose about W 2 percent per year, on average. Since 1995, how ever, productivity growth has accelerated markedly, about doubling the earlier pace, even after taking account of the impetus from cyclical forces. Though hardly definitive, the apparent sustained strength in measured productivity in the face of a pronounced slowing in the growth of aggregate demand during the second half of last year was an important test of the extent of the improvement in structural produc tivity. These most recent indications have added to the accumulating evidence that the apparent increases in the growth of output per hour are more than transitory. It is these observations that appear to be causing economists, including those who contributed to the Office of Management and Budget (OMB) and the CBO budget projections, to raise their forecasts of the economy’s long-term growth rates and budget surpluses. This increased optimism receives support from the forward-looking indicators of technical innovation and structural productivity growth, which have shown few signs of weakening despite the marked curtailment in recent months of capital investment plans for equipment and software. To be sure, these impressive upward revisions to the growth of structural productivity and economic potential are based on inferences drawn from eco nomic relationships that are different from anything we have considered in recent decades. The resulting budget projections, therefore, are necessarily subject to a relatively wide range of error. Reflecting the uncertainties of forecasting well into the future, neither the OMB nor the CBO projects productivity to continue to improve at the stepped-up pace of the past few years. Both expect productivity growth rates through the next decade to average roughly 2 'A to 21/2 percent per year—far above the average pace from the early 1970s to the mid-1990s, but still below that of the past five years. Had the innovations of recent decades, especially in information technologies, not come to fruition, productivity growth during the past five to seven years, arguably, would have continued to languish at the rate of the preceding twenty years. The sharp increase in prospective long-term rates of return on high-tech investments would not have emerged as it did in the early 1990s, and the associated surge in stock prices would surely have been largely absent. The accompanying wealth effect, so evidently critical to the growth of economic activity since the mid1990s, would never have materialized. In contrast, the experience of the past five to seven years has been truly without recent precedent. The doubling of the growth rate of output per hour has caused individuals’ real taxable income to grow nearly two and one-half times as fast as it did over the preceding ten years and resulted in the substantial surplus of receipts over outlays that we are now experiencing. Not only did taxable income rise with the faster growth of gross domestic product, but the associated large increase in asset prices and capital gains created additional tax liabilities not directly related to income from current production. The most recent projections from the OMB indi cate that, if current policies remain in place, the total unified surplus will reach $800 billion in fiscal year 2011, including an on-budget surplus of $500 billion. The CBO reportedly will be showing even larger surpluses. Moreover, the admittedly quite uncertain 158 Federal Reserve Bulletin □ March 2001 long-term budget exercises released by the CBO last October maintain an implicit on-budget surplus under baseline assumptions well past 2030 despite the budgetary pressures from the aging of the babyboom generation, especially on the major health programs. The most recent projections, granted their tenta tiveness, nonetheless make clear that the highly desir able goal of paying off the federal debt is in reach before the end of the decade. This is in marked contrast to the perspective of a year ago when the elimination of the debt did not appear likely until the next decade. But continuing to run surpluses beyond the point at which we reach zero or near-zero federal debt brings to center stage the critical longer-term fiscal policy issue of whether the federal government should accu mulate large quantities of private (more technically, nonfederal) assets. At zero debt, the continuing uni fied budget surpluses currently projected imply a major accumulation of private assets by the federal government. This development should factor mate rially into the policies you and the Administration choose to pursue. I believe, as I have noted in the past, that the federal government should eschew private asset accu mulation because it would be exceptionally difficult to insulate the government’s investment decisions from political pressures. Thus, over time, having the federal government hold significant amounts of pri vate assets would risk sub-optimal performance by our capital markets, diminished economic efficiency, and lower overall standards of living than would be achieved otherwise. Short of an extraordinarily rapid and highly unde sirable short-term dissipation of unified surpluses or a transferring of assets to individual privatized accounts, it appears difficult to avoid at least some accumulation of private assets by the government. Private asset accumulation may be forced upon us well short of reaching zero debt. Obviously, savings bonds and state and local government series bonds are not readily redeemable before maturity. But the more important issue is the potentially rising cost of retiring marketable Treasury debt. While shorterterm marketable securities could be allowed to run off as they mature, longer-term issues would have to be retired before maturity through debt buybacks. The magnitudes are large: As of January 1, for exam ple, there was in excess of three quarters of a trillion dollars in outstanding nonmarketable securities, such as savings bonds and state and local series issues, and marketable securities (excluding those held by the Federal Reserve) that do not mature and could not be called before 2011. Some holders of long-term Trea sury securities may be reluctant to give them up, especially those who highly value the risk-free status of those issues. Inducing such holders, including foreign holders, to willingly offer to sell their securi ties prior to maturity could require paying premiums that far exceed any realistic value of retiring the debt before maturity. Decisions about what type of private assets to acquire and to which federal accounts they should be directed must be made well before the policy is actually implemented, which could occur in as little as five to seven years from now. These choices have important implications for the balance of saving and, hence, investment in our economy. For example, transferring government saving to individual private accounts as a means of avoiding the accumulation of private assets in the government accounts could sig nificantly affect how social security will be funded in the future. Short of some privatization, it would be preferable in my judgment to allocate the required private assets to the social security trust funds, rather than to on-budget accounts. To be sure, such trust fund investments are subject to the same concerns about political pressures as on-budget investments would be. The expectation that the retirement of the babyboom generation will eventually require a drawdown of these fund balances does, however, provide some mitigation of these concerns. Returning to the broader picture, I continue to believe, as I have testified previously, that all else being equal, a declining level of federal debt is desir able because it holds down long-term real interest rates, thereby lowering the cost of capital and elevat ing private investment. The rapid capital deepening that has occurred in the U.S. economy in recent years is a testament to these benefits. But the sequence of upward revisions to the budget surplus projections for several years now has reshaped the choices and opportunities before us. Indeed, in almost any cred ible baseline scenario, short of a major and prolonged economic contraction, the full benefits of debt reduc tion are now achieved before the end of this decade—a prospect that did not seem likely only a year or even six months ago. The most recent data significantly raise the prob ability that sufficient resources will be available to undertake both debt reduction and surplus-lowering policy initiatives. Accordingly, the tradeoff faced earlier appears no longer an issue. The emerging key fiscal policy need is to address the implications of maintaining surpluses beyond the point at which publicly held debt is effectively eliminated. Testimony of Federal Reserve Officials The time has come, in my judgment, to consider a budgetary strategy that is consistent with a preemp tive smoothing of the glide path to zero federal debt or, more realistically, to the level of federal debt that is an effective irreducible minimum. Certainly, we should make sure that social security surpluses are large enough to meet our long-term needs and seri ously consider explicit mechanisms that will help ensure that outcome. Special care must be taken not to conclude that wraps on fiscal discipline are no longer necessary. At the same time, we must avoid a situation in which we come upon the level of irreduc ible debt so abruptly that the only alternative to the accumulation of private assets would be a sharp reduction in taxes and/or an increase in expenditures, because these actions might occur at a time when a sizable economic stimulus would be inappropriate. In other words, budget policy should strive to limit potential disruptions by making the on-budget sur plus economically inconsequential when the debt is effectively paid off. In general, as I have testified previously, if long term fiscal stability is the criterion, it is far better, in my judgment, that the surpluses be lowered by tax reductions than by spending increases. The flurry of increases in outlays that occurred near the conclusion of last fall’s budget deliberations is troubling because it makes the previous year’s lack of discipline less likely to have been an aberration. To be sure, with the burgeoning federal surpluses, fiscal policy has not yet been unduly compromised by such actions. But history illustrates the difficulty of keeping spending in check, especially in programs that are open-ended commitments, which too often have led to much larger outlays than initially envi sioned. It is important to recognize that government expenditures are claims against real resources and that, while those claims may be unlimited, our capac ity to meet them is ultimately constrained by the growth in productivity. Moreover, the greater the drain of resources from the private sector, arguably, the lower the growth potential of the economy. In contrast to most spending programs, tax reductions have downside limits. They cannot be open-ended. Lately there has been much discussion of cutting taxes to confront the evident pronounced weakening in recent economic performance. Such tax initiatives, however, historically have proved difficult to imple ment in the time frame in which recessions have developed and ended. For example, although Presi dent Ford proposed in January of 1975 that withhold ing rates be reduced, this easiest of tax changes was not implemented until May, when the recession was officially over and the recovery was gathering force. 159 Of course, had that recession lingered through the rest of 1975 and beyond, the tax cuts would certainly have been helpful. In today’s context, in which tax reduction appears required in any event over the next several years to assist in forestalling the accumula tion of private assets, starting that process sooner rather than later likely would help smooth the transi tion to longer-term fiscal balance. And should current economic weakness spread beyond what now appears likely, having a tax cut in place may, in fact, do noticeable good. As for tax policy over the longer run, most econo mists believe that it should be directed at setting rates at the levels required to meet spending commitments, while doing so in a manner that minimizes distor tions, increases efficiency, and enhances incentives for saving, investment, and work. In recognition of the uncertainties in the economic and budget outlook, it is important that any long-term tax plan, or spending initiative for that matter, be phased in. Conceivably, it could include provisions that, in some way, would limit surplus-reducing actions if specified targets for the budget surplus and federal debt were not satisfied. Only if the prob ability was very low that prospective tax cuts or new outlay initiatives would send the on-budget accounts into deficit, would unconditional initiatives appear prudent. The reason for caution, of course, rests on the tentativeness of our projections. What if, for exam ple, the forces driving the surge in tax revenues in recent years begin to dissipate or reverse in ways that we do not now foresee? Indeed, we still do not have a full understanding of the exceptional strength in indi vidual income tax receipts during the latter 1990s. To the extent that some of the surprise has been indi rectly associated with the surge in asset values in the 1990s, the softness in equity prices over the past year has highlighted some of the risks going forward. Indeed, the current economic weakness may reveal a less favorable relationship between tax receipts, income, and asset prices than has been assumed in recent projections. Until we receive full detail on the distribution by income of individual tax liabilities for 1999, 2000, and perhaps 2001, we are making little more than informed guesses of certain key relation ships between income and tax receipts. To be sure, unless later sources do reveal major changes in tax liability determination, receipts should be reasonably well-maintained in the near term, as the effects of earlier gains in asset values continue to feed through with a lag into tax liabilities. But the longer-run effects of movements in asset values are much more difficult to assess, and those uncertainties 160 Federal Reserve Bulletin □ March 2001 would intensify should equity prices remain signifi cantly off their peaks. Of course, the uncertainties in the receipts outlook do seem less troubling in view of the cushion provided by the recent sizable upward revisions to the ten-year surplus projections. But the risk of adverse movements in receipts is still real, and the probability of dropping back into deficit as a consequence of imprudent fiscal policies is not negligible. In the end, the outlook for federal budget surpluses rests fundamentally on expectations of longer-term trends in productivity, fashioned by judgments about the technologies that underlie these trends. Econo mists have long noted that the diffusion of technology starts slowly, accelerates, and then slows with matu rity. But knowing where we now stand in that sequence is difficult—if not impossible—in real time. As the CBO and the OMB acknowledge, they have been cautious in their interpretation of recent produc tivity developments and in their assumptions going forward. That seems appropriate given the uncertain ties that surround even these relatively moderate estimates for productivity growth. Faced with these uncertainties, it is crucial that we develop budgetary strategies that deal with any disappointments that could occur. That said, as I have argued for some time, there is a distinct possibility that much of the development and diffusion of new technologies in the current wave of innovation still lies ahead, and we cannot rule out productivity growth rates greater than is assumed in the official budget projections. Obviously, if that turns out to be the case, the existing level of tax rates would have to be reduced to remain consistent with currently projected budget outlays. The changes in the budget outlook over the past several years are truly remarkable. Little more than a decade ago, the Congress established budget controls that were considered successful because they were instrumental in squeezing the burgeoning budget deficit to tolerable dimensions. Nevertheless, despite the sharp curtailment of defense expenditures under way during those years, few believed that a surplus was anywhere on the horizon. And the notion that the rapidly mounting federal debt could be paid off would not have been taken seriously. But let me end on a cautionary note. With today’s euphoria surrounding the surpluses, it is not difficult to imagine the hard-earned fiscal restraint developed in recent years rapidly dissipating. We need to resist those policies that could readily resurrect the deficits of the past and the fiscal imbalances that followed in their wake. □ 161 Announcements F e d e r a l O p e n M a r k e t c o m m it t e e A c t io n s Ch a n g e s i n t h e D is c o u n t r a t e and The Federal Open Market Committee decided on January 3, 2001, to lower its target for the federal funds rate by 50 basis points to 6 percent. In a related action, the Board of Governors approved a 25 basis point decrease in the discount rate to 53A percent, the level requested by seven Reserve Banks. The Board also indicated that it stands ready to approve a further reduction of 25 basis points in the discount rate to 5V2 percent on the requests of Federal Reserve Banks. These actions were taken in light of further weak ening of sales and production, and in the context of lower consumer confidence, tight conditions in some segments of financial markets, and high energy prices sapping household and business purchasing power. Moreover, inflation pressures remain contained. Nonetheless, to date there is little evidence to suggest that longer-term advances in technology and associ ated gains in productivity are abating. The Committee continues to believe that, against the background of its long-run goals of price stability and sustainable economic growth and of the informa tion currently available, the risks are weighted mainly toward conditions that may generate economic weak ness in the foreseeable future. In taking the discount rate action, the Federal Reserve Board approved requests submitted by the boards of directors of the Federal Reserve Banks of New York, Cleveland, Atlanta, St. Louis, Kansas City, Dallas, and San Francisco. Completing action initiated on January 3, 2001, the Board of Governors on January 4 approved a dis count rate of 5xh percent, acting on requests submit ted by the boards of directors of all twelve Reserve Banks. On January 3, in conjunction with the Federal Open Market Committee’s decision to lower the fed eral funds rate target by 50 basis points, the Board approved pending requests from Federal Reserve Banks to reduce the discount rate by 25 basis points, to 53/4 percent, and said that it would approve a further 25 basis point reduction once the Reserve Banks submitted requests. The discount rate is the rate charged depository institutions when they borrow short-term adjustment credit from their District Federal Reserve Banks. The rate change was effective immediately except in the St. Louis District, where the rate became effective as of Friday, January 5, 2001. The Federal Open Market Committee at its meet ing on January 31, 2001, decided to lower its target for the federal funds rate by 50 basis points to 5Vi percent. In a related action, the Board of Gover nors approved a 50 basis point reduction in the dis count rate to 5 percent. Consumer and business confidence has eroded further, exacerbated by rising energy costs that con tinue to drain consumer purchasing power and press on business profit margins. Partly as a consequence, retail sales and business spending on capital equip ment have weakened appreciably. In response, manu facturing production has been cut back sharply, with new technologies appearing to have accelerated the response of production and demand to potential excesses in the stock of inventories and capital equipment. Taken together, and with inflation contained, these circumstances have called for a rapid and force ful response of monetary policy. The longer-term advances in technology and accompanying gains in productivity, however, exhibit few signs of abating, and these gains, along with the lower interest rates, should support growth of the economy over time. Nonetheless, the Committee continues to believe that against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future. In taking the discount rate action, the Federal Reserve Board approved requests submitted by the boards of directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Atlanta, Chi cago, St. Louis, Minneapolis, Dallas, and San Fran cisco. The Board subsequently approved similar requests submitted by the boards of directors of the Federal Reserve Banks of Boston and Richmond, effective January 31, and by the board of directors of 162 Federal Reserve Bulletin □ March 2001 the Federal Reserve Bank of Kansas City, effective February 1. A p p o in t m e n t s o f n e w M e m b e r s TO THE CONSUMER AD VISO RY COUNCIL AND DESIGNATION OF A N E W CHAIR AND VICE CHAIR The Federal Reserve Board named ten new members to its Consumer Advisory Council for three-year terms and designated a new Chair and Vice Chair of the Council for 2001. The council advises the Board on the exercise of its responsibilities under the Consumer Credit Protec tion Act and on other matters in the area of consumer financial services. The council meets three times a year in Washington, D.C. Lauren Anderson was designated chair; her term runs through December 2001. Ms. Anderson is executive director for Neighborhood Housing Ser vices of New Orleans, Inc. in New Orleans, Louisi ana. Previously, she was a project manager for the Department of Housing and Economic Development for Jersey City, New Jersey, and a staff attorney for the American Civil Liberties Union. Dorothy Broadman was designated vice chair; her term on the Council ends in December 2002. Ms. Broadman is senior vice president of Cal Fed Bank, FSB, in San Francisco and is manager of the bank’s Community Development Department. Previ ously, she held positions at Citibank and Wells Fargo. The ten new members are the following: Anthony S. Abbate Saddlebrook, N.J. Mr. Abbate is the president and chief executive officer of Interchange Bank. The bank has a diverse market and is currently involved in several affordable housing programs. He is a frequent speaker and author and has addressed staff motivation, the merger activity in the banking industry, and the importance of technology for small financial institu tions. He has been active in community and banking orga nizations, including the Commerce and Industry Associa tion, the Community Bankers Association of New Jersey, and the Independent Community Bankers of America and has received many awards and recognition for his years of community service. the Comptroller of the Currency. He is active in com munity and professional organizations and serves on the boards of the Community Development Corporation and the Brownsville Local Development Council. He is secre tary and past chairman of the Greater Brownsville MultiBank CDFI and a regional vice chairman o f the National Bankers Association. Constance K. Chamberlin Richmond, Va. Ms. Chamberlin is president and chief executive officer of Housing Opportunities Made Equal of Richmond, Inc. She was a founding member and served as president o f the National Fair Housing Alliance. She serves on the Subcom mittee on Increasing M inority Homeownership of the Vir ginia Housing Study Commission (an arm of the Virginia General Assembly), and has been active in many other groups concerned with increasing access to housing, including the Virginia Homeownership Partnership Execu tive Committee and the Fair Housing Working Group of the U.S. Department of Housing and Urban Development. She is particularly knowledgeable about redlining, fair lending, and homeowners’ insurance issues. Earl Jarolimek Fargo, N.D. Since 1989, Mr. Jarolimek has been vice president and corporate compliance officer for Community First Bankshares. He is responsible for a comprehensive compliance program for all corporate affiliates. He has been active in the American Bankers Association, having served as chair of the Compliance Executive Committee, has been a past member of the Institute of Certified Bankers Advisory Board for Compliance Certification, and is a current mem ber of the Advisory Board for the ABA National Compli ance Schools. He has provided testimony for the Federal Reserve Board and for the U.S. Department of Housing and Urban Development related to the Truth in Lending Act and the Real Estate Settlement Procedures Act. J. Patrick Liddy Cincinnati, Ohio Mr. Liddy is the vice president and director of compliance for Fifth Third Bancorp. Mr. Liddy is responsible for bank and trust compliance for the Ohio, Kentucky, Indiana, and Florida banks and for the Arizona thrift. He reconciles bank practices with numerous federal and differing state laws and regulations. Other areas of focus for Mr. Liddy are compliance training, consumer issues, and regulatory simplification. He is active in community organizations, such as the Cincinnati Area United Way and the Fine Arts Fund of Cincinnati. M anuel Casanova, Jr. Brownsville, Tex. Oscar Marquis Park Ridge, 111. Mr. Casanova, a certified public accountant, has been executive vice president and director of International Bank of Com merce-Brownsville for six years. He is responsible for the lending, international, and compliance departments. Previously, he worked as a bank examiner for the Office of Mr. Marquis is counsel for the Privacy and D ata Protection Group of the Hunton and W illiams Law Firm. Previously, Mr. Marquis was vice president and general counsel of Trans Union for more than fifteen years. He was respon sible for all legal, government, and public affairs matters. Announcements He directed and managed all functions of the Law Division and was involved in all major company strategic and business decisions and business initiatives. Mr. Marquis is an expert in privacy, credit, and credit-reporting legislation and regulations. He has provided testimony before House and Senate committees and has represented the company on radio and television programs, including Nightline. He also speaks frequently to industry and consumer groups. Nancy Pierce Kansas City, Mo. Ms. Pierce is the president and chief executive officer of the Mazuma Credit Union. She is knowledgeable about community reinvestment, consumer protection regulations, and financial services. She has served as chair and member of the board of the Missouri Credit Union League and as chairman of the board of the Credit Union National Asso ciation. Ms. Pierce has worked with the Kansas City Neighborhood Alliance, the Concerned Clergy Coalition, and others to promote and support financial literacy and greater access to credit for low- to moderate-income bor rowers. This year she received the Credit Union’s Herb Wegner Award for Individual Achievement. Council members whose terms continue through 2001 are the following: M alcolm M. Bush President The Woodstock Institute Chicago, Illinois Mary Ellen Domeier President State Bank & Trust Company of New Ulm New Ulm, Minnesota John C. Gamboa Executive Director The Greenlining Institute San Francisco, California W illie Jones Deputy Director The Community Builders, Inc. Boston, Massachusetts Ronald A. Reiter San Francisco, Calif. Mr. Reiter is a supervising deputy attorney general in the California Department of Justice’s Consumer Law Section. He is knowledgeable about federal and California con sumer credit and protection legislation and regulations. He has drafted legislation protecting consumers, has litigated consumer protection cases, and has been a leader in devel oping procedures for defending foreclosure actions in Cali fornia. Mr. Reiter has served as a member and chair of the State Bar of California’s Consumer Advocacy and Con sumer Financial Services Committees. Elizabeth Renuart Boston, Mass. Since 1996, Ms. Renuart has been staff attorney for the National Consumer Law Center. She represents the inter ests of low-income consumers at trial, in the appeals courts, and before Congress. She has also authored reports and articles on consumer credit and has taught consumer law to legal services and private consumer attorneys. Based on her knowledge and understanding of credit laws and poli cies, Ms. Renuart is considered an expert in consumercredit litigation. She has worked for legal service organiza tions since 1977. Frank Torres, Jr. Washington, D.C. Mr. Torres is the legislative counsel in the Washington, D.C., office of Consumers Union. He is responsible for advocating for consumers before congressional agencies and the Federal Reserve Board on issues related to finan cial services. Mr. Torres’s areas of expertise include access to financial services, privacy, subprime lending, electronic commerce, consumer credit, and mortgage lending policy. Previously, he served as the director of the Governor of G uam ’s Washington Liaison Office. 163 Anne S. Li Executive Director New Jersey Community Loan Fund Trenton, New Jersey Marta Ramos Vice President & CRA Officer Banco Popular de Puerto Rico San Juan, Puerto Rico Gary S. Washington Senior Vice President ABN AMRO Chicago, Illinois Robert L. W ynn II Financial Education Officer Department of Financial Institutions Madison, W isconsin Council members whose terms continue through 2002 are the following: Teresa Bryce General Counsel Nexstar Financial Corporation St. Louis, Missouri Robert Cheadle Chief Executive Officer Indian Territory Development Ada, Oklahoma Lester Wm. Firstenberger Deputy General Counsel American General Finance Evansville, Indiana M. Dean Keyes Senior Vice President Firstar St. Louis, M issouri Jeremy Nowak Chief Executive Officer The Reinvestment Fund Philadelphia, Pennsylvania Russell Schrader Senior Vice President and Assistant General Counsel Visa U.S.A. San Francisco, California INTERIM RULE ON FINANCIAL ACTIVITIES The Federal Reserve Board has published an interim rule defining three categories of activities listed in section 4(k)(5) of the Bank Holding Company Act as financial in nature or incidental to a financial activ ity. The interim rule also establishes a mechanism through which financial holding companies or other interested parties may request that the Board find, by order, that particular specific activities fall within one of the three categories. 164 Federal Reserve Bulletin □ March 2001 The Board voted to approve the interim rule at its meeting on December 21, 2000, and it became effec tive on January 2, 2001. G u id a n c e f o r F in a n c ia l in s t it u t io n s A n t i -M o n e y -La u n d e r in g P r o g r a m s on The Federal Reserve Board on January 16, 2001, disseminated guidance designed to assist financial institutions in applying enhanced scrutiny to transac tions that may involve the proceeds of foreign official corruption. The guidance was developed by a working group that includes the U.S. Department of the Treasury and the U.S. Department of State, the Board, and the other federal banking agencies. It is intended to build upon financial institutions’ existing anti-moneylaundering and due-diligence programs by providing suggested procedures for account opening and main tenance for persons known to be senior political figures, their immediate family, and close associates. It also contains a list of questionable or suspicious activities that often warrant closer scrutiny. The guidance, distributed with a letter to Federal Reserve supervisors and to banking organizations, should be understood as a set of suggested sound practices that financial institutions are encouraged to use as they seek to deter money laundering and minimize legal risks and potential reputational damage. Supervisory letters are the Federal Reserve’s pri mary means of communicating key policy directives to its examiners, supervisory staff, and the bank ing industry. Supervisory letters can be viewed on the Board’s web site at www.federalreserve.gov/ boarddocs/srletters. P r e l im in a r y F ig u r e s A v a ila b le o n N e t In c o m e o f t h e F e d e r a l R e s e r v e b a n k s f o r 2000 Preliminary figures indicate that the Federal Reserve Banks distributed approximately $25.3 billion of their $34.0 billion total income to the Treasury during 2000. In addition, $3.75 billion was transferred from surplus to the Treasury in May 2000, as required by statute. Federal Reserve System income is derived prima rily from interest earned on U.S. government securi ties that the Federal Reserve has acquired through open market operations. This income amounted to $32.7 billion. Additionally, revenues from fees for the provision of priced services to depository institu tions totaled $881 million. The remaining income of $335 million includes earnings on foreign currencies, earnings from loans, and other income. The operating expenses of the twelve Reserve Banks totaled $1.59 billion, including the System’s pension cost credit. In addition, the cost of earnings credits granted to depository institutions under the Monetary Control Act of 1980 amounted to $389 mil lion. Assessments against Reserve Banks for Board expenditures totaled $188 million, and the cost of currency amounted to $436 million. Net deductions from income amounted to $1.49 billion, resulting primarily from unrealized losses on assets denominated in foreign currencies that were revalued to reflect current market exchange rates. Total net income for the Federal Reserve Banks amounted to $29.9 billion. Under the Board’s policy, all net income after the statutory dividend to mem ber banks and the amount necessary to equate sur plus to paid-in capital is transferred to the Treasury. The statutory dividends to member banks were $410 million. FINAL RULE ON MERCHANT BANKING A c t iv it ie s The Board of Governors of the Federal Reserve System and the Secretary of the Treasury on Jan uary 10, 2001, approved a joint final rule governing the merchant banking activities of financial holding companies. The rule, effective February 15, 2001, implements provisions of the Gramm-Leach-Bliley Act. The Board and the Secretary believe it permits a “twoway street” between securities firms and banking organizations, while, at the same time, giving effect to the statutory limitations and framework adopted by the Congress to help maintain the separation of bank ing and commerce and ensure the safety and sound ness of depository institutions. The final rule incorporates a number of amend ments in response to public comments on the interim rule issued March 17, 2000. These changes include the following: • Modifying the provisions defining when a finan cial holding company routinely manages or operates a portfolio company • Eliminating the dollar-based threshold for the review of a financial holding company’s merchant Announcements banking activities and adopting a sunset provision for the remaining capital-based investment threshold • Streamlining the rule’s reporting and recordkeep ing requirements • Broadening the definition of “private equity funds” and clarifying the rule’s application to such funds • Modifying when transactions between insured depository institutions and portfolio companies are subject to sections 23A and 23B of the Federal Reserve Act • Revising the restrictions that apply to merchant banking investments held beyond the permissible holding period • Expanding the definition of “securities affiliate” to include a department or division of a bank regis tered as a municipal securities dealer. FINAL RU LE ON ALTERNATIVE TO RATED D E B T REQUIREMENT FOR FINANCIAL SUBSIDIARIES The Federal Reserve Board and the Secretary of the Treasury on January 19, 2001, announced their approval of a final rule establishing the alternative criteria that certain large banks may satisfy in order to control a financial subsidiary under the GrammLeach-Bliley Act. Under the act, a national or state member bank ranked among the largest fifty insured banks may control a financial subsidiary only if the bank meets certain criteria, including having an issue of highly rated debt outstanding. The next fifty largest insured banks may control a financial subsidiary if they sat isfy this debt-rating requirement or an alternative comparable requirement jointly established by the Treasury and the Federal Reserve Board. Under the final rule, a bank meets the alternative requirement if it has a current long-term issuer credit rating from a nationally recognized statistical rating organization that is within the three highest investment-grade cate gories used by the rating organization. The final rule will become effective thirty days after publication in the F ederal R egister. It is substan tively identical to an interim rule issued March 14, 2000. Is s u a n c e o f G u id a n c e o n S u p e r v is io n o f S u b p r im e L e n d in g The federal banking regulatory agencies on Jan uary 31, 2001, issued expanded guidance intended to 165 strengthen the examination and supervision of institu tions with significant subprime lending programs. The guidance, issued by the Office of the Comp troller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insur ance Corporation, and the Office of Thrift Super vision, supplements previous subprime lending guid ance issued on March 1, 1999. It principally applies to institutions with subprime lending programs that equal or exceed 25 percent of the institution’s tier 1 regulatory capital. For purposes of this guidance, “subprime lending” refers to programs that target borrowers with weak ened credit histories typically characterized by pay ment delinquencies, previous charge-offs, judgments, or bankruptcies. Such programs may also target bor rowers with questionable repayment capacity evi denced by low credit scores or high debt-burden ratios. Major issues discussed in the guidance include the following: • A llo w a n ce f o r loan a n d lea se lo sses (ALLL). Analysis and documentation standards for the ALLL • C a p ita l adequ acy. Factors to consider when determining the level of capital necessary to support subprime lending programs • Loan review a n d classification. Guidelines for the review and classification of individual loans and portfolio segments during examinations • Cure p rogram s. Documentation requirements for re-aging, renewing, or extending delinquent subprime accounts • P red a to ry lending. Identification of potentially abusive lending practices subject to examiner criticism. The agencies recognize that responsible subprime lending can expand credit access for consumers and offer institutions the opportunity to earn attractive returns. However, institutions are expected to recog nize both the elevated risk levels posed by participa tion in subprime lending programs and the enhanced risk-management standards needed to successfully engage in this activity. Although this guidance is intended primarily to assist examiners in their evaluation of subprime lend ing programs, the agencies are also distributing it to banks and thrift institutions so that they are fully aware of supervisory expectations regarding riskmanagement processes, allowance for loan-loss lev els, and capital adequacy for institutions engaging in such programs. 166 Federal Reserve Bulletin □ March 2001 A d o p t i o n o f G u id e l in e s In f o r m a t i o n S e c u r i t y for C u stom er The federal bank and thrift regulatory agencies have sent to the F ederal R e g iste r joint guidelines for safeguarding confidential customer information. The guidelines implement section 501(b) of the GrammLeach-Bliley Act (GLBA) and will be effective on July 1,2001. The GLBA requires the agencies to establish stan dards for financial institutions relating to administra tive, technical, and physical safeguards for customer records and information. These safeguards are to ensure the security and confidentiality of customer records and information, protect against any antici pated threats or hazards to the security or integrity of these records, and protect against unauthorized access to or use of these records or information that would result in substantial harm or inconvenience to a customer. The guidelines require financial institutions to establish an information security program to (1) iden tify and assess the risks that may threaten customer information; (2) develop a written plan containing policies and procedures to manage and control these risks; (3) implement and test the plan; and (4) adjust the plan on a continuing basis to account for changes in technology, the sensitivity of customer informa tion, and internal or external threats to information security. Each institution may implement a security program appropriate to its size and complexity and the nature and scope of its operations. The guidelines outline specific security measures that institutions should consider in implementing a security program. A financial institution must adopt those security measures determined to be appropriate. The guidelines also outline responsibilities of directors of financial institutions in overseeing the protection of customer information. The board of directors should oversee an institution’s efforts to develop, implement, and maintain an effective infor mation security program and approve written infor mation security policies and programs. The guidelines require financial institutions to oversee their service provider arrangements in order to protect the security of customer information main tained or processed by service providers. Each institu tion must exercise due diligence in selecting its ser vice providers and require its service providers by contract to implement security measures that safe guard customer information. When indicated by an institution’s risk assessment, the institution must also monitor its service providers by reviewing audits, summaries of test results, or other equivalent evalua tion of its service providers, to confirm that they have satisfied their contractual obligations. F e a s ib il it y S u b o r d in a t e d D e b t report on of Mandatory The Board of Governors of the Federal Reserve Sys tem and the Secretary of the Treasury found that subordinated debt issuance by large depository insti tution organizations may encourage market discipline and generate other supervisory benefits. A joint report released on January 12, 2001, also indicated that the Board and the Treasury’s Office of the Comptroller of the Currency and Office of Thrift Supervision (agencies) will consider ways to enhance their use of voluntarily issued subordinated debt in supervisory monitoring. The Board and the Secretary, however, chose not to recommend that the Congress make subordinated debt issuance mandatory at this time. The report to the Congress, required by the Gramm-Leach-Bliley Act, called for continued research and, most important, continued evaluation of financial institution supervisors’ experience in using information derived from voluntarily issued subordinated debt. Virtually all of the largest banking organizations already issue subordinated debt. The agencies monitor subordinated debt yields and issu ance patterns in evaluating the condition of large depository institution organizations. The study found that existing evidence supports the use of subordinated debt to encourage market discipline. But it said that the net benefits of a man datory policy are not clear enough to justify such a policy. Going forward, if additional evidence sug gests that requiring institutions to issue subordinated debt is appropriate, either the Board or the Secretary may recommend legislation. Copies of the report, The F ea sib ility a n d D e sira b il ity o f M an datory S u bordin ated D e b t , are available on the web sites of the Board, www.federalreserve.gov/ boarddocs/RptCongress/, and the Treasury Depart ment, www.ustreas.gov. R e c o m m e n d a t io n s P u b l ic D is c l o s u r e o f w o r k in g Group on A private-sector working group on January 11, 2001, recommended enhanced and more frequent public disclosure of financial information by banking and securities organizations. Market risk information previously disclosed annu ally should be disclosed quarterly, and the content of Announcements these disclosures should be improved, the group said. Additional credit risk information on wholesale credit exposures should also be made available quarterly, it said. The Working Group on Public Disclosure, estab lished in April 2000 by the Board of Governors of the Federal Reserve System, was chaired by Walter V. Shipley, retired chairman of Chase Manhattan Bank. He delivered the group’s findings in a letter to Board member Laurence H. Meyer. Copies were provided to the Comptroller of the Currency John D. Hawke, Jr., and Securities and Exchange Com mission Chairman Arthur Levitt, Jr. The OCC and SEC participated with the Board in support of the effort. In addition to calling for more frequent public disclosure, the working group said that financial information should be disclosed based on a firm’s internal methodologies and exposure categories. It said that quantitative information on a firm’s risk exposure should be balanced with qualitative infor mation describing its risk-management process. Pub lic disclosures should vary among institutions to reflect legitimate differences in internal management processes, and disclosure practices should change in step with innovations in firms’ risk-management and measurement practices, the group said. Mr. Shipley, in the letter to Governor Meyer, said that the outcome of the group’s deliberations “cre ates a common platform to move ahead with suitable steps towards enhanced public disclosure.” Governor Meyer, Comptroller Hawke, and Chair man Levitt, in their reply, said, “We . . . think that your recommendation for disclosure of credit risk based on banks’ internal ratings is especially useful.” “We hope that the working group’s work encour ages all large banks and securities firms to adopt enhanced practices for public disclosure,” they wrote. “We look forward to continued discussion with market participants about public disclosure. In par ticular, we thank the members of the group for their offer to participate in future advisory efforts.” The members of the working group, in addition to Mr. Shipley, were the following: Clemens Boersig, Deutsche Bank AG, Frankfurt, Germany; Patrick de Saint-Aignan, Morgan Stanley Dean Witter, New York; Dina Dublon, J.P. Morgan Chase & Co., New York; Douglas Flint, HSBC Holdings PLC, London; James Hance, Bank of America Corp., Char lotte, N.C.; Ross Kari, Wells Fargo Corp., San Fran cisco; Thomas H. Patrick, Merrill Lynch and Co., New York; Marcel Rohner, UBS AG, Zurich, Swit zerland; Charles W. Scharf, Bank One Corporation, Chicago; Todd S. Thomson, Citigroup, New York; 167 and Barry L. Zubrow, Goldman Sachs and Co., New York. Ba s e l C o m m it t e e P r o p o s a l t o A m e n d Ca p it a l A d e q u a c y f r a m e w o r k : R e q u e st f o r c o m m e n ts a n d R elease o f a n In t e r a g e n c y S u m m a r y The federal bank regulatory agencies will accept public comments on a major proposal by the Basel Committee on Banking Supervision to amend the 1988 international capital adequacy framework. The full document is available on the web site of the Bank for International Settlements at www.bis.org. Com ments are requested on the proposal by May 31, 2001, and may be sent to the U.S. banking agencies and to the Basel Committee. Although the 1988 Capital Accord was applied to all banks in the United States, it has not been deter mined how broadly the new approach will be applied, particularly given the many complex elements that may not be needed for smaller, less complex insti tutions. The U.S. banking agencies recently issued an advance notice of proposed rulemaking for non complex institutions (“ Simplified Capital Framework for Non-Complex Institutions,” published Novem ber 3, 2000). Comments received on that proposal (due by February 1, 2001) will be considered in determining whether to apply the new approach to all banks. The Federal Reserve Board on January 23, 2001, released an interagency summary of the Basel Com mittee on Banking Supervision’s consultative pro posal issued to the public on January 16, 2001. Attached to the summary is a set of discussion issues. Respondents to the Basel Committee proposal are encouraged to review and provide comments on the entire range of topics covered in the proposal and to take particular notice of the issues highlighted in the U.S. agencies’ release. The summary and ques tions are available on the web sites of the Office of the Comptroller of the Currency (www.occ. treas.gov), the Federal Reserve Board of Governors (www.federalreserve.gov), and the Federal Deposit Insurance Corporation (www.fdic.gov). R e v is e d c a p it a l P r o p o s a l f o r N o n f i n a n c i a l E q u i t y In v e s t m e n t s The Federal Reserve Board and the Office of the Comptroller of the Currency on January 18, 2001, announced proposed new rules governing the regula 168 Federal Reserve Bulletin □ March 2001 tory capital treatment for equity investments in nonfinancial companies held by banks, bank holding companies, and financial holding companies. The new proposed capital treatment, revised in response to public comment and in consultation with the Treasury Department and other federal banking agencies, represents a significant modification of a proposal made by the Federal Reserve Board in March 2000. The Federal Deposit Insurance Corpo ration has announced that it will consider the new proposal Friday. The new proposal would apply symmetrically to banks and their holding companies and would apply to equity investments made under the new merchant banking authority granted by the Gramm-LeachBliley Act and to equity investments in nonfinancial companies made under other specifically identified legal authorities. The new proposal generally would impose a capi tal charge that would increase in steps as the banking organization’s level of concentration in equity invest ments increased. An 8 percent tier 1 capital deduc tion would apply on covered investments that in the aggregate represent up to 15 percent of an organiza tion’s tier 1 capital. A top marginal charge of 25 per cent would be set for covered investments that aggre gate more than 25 percent of the organization’s tier 1 capital. Equity investments through small business invest ment companies would be exempt from these new capital deduction requirements and would continue to be subject to the same capital requirements that cur rently apply, unless the value of those investments exceeds 15 percent of the bank’s tier 1 capital. Grand fathered investments under section 24(f) of the Fed eral Deposit Insurance Act would also be exempt under the new proposal. Under the new proposal, the agencies also would heighten their monitoring of banking organizations as the level of concentration in equity investment increases. The agencies intend to request public comment within sixty days after publication in the Federal Register. E n f o r c e m e n t A c t io n s The Federal Reserve Board on January 12, 2001, announced the execution of a written agreement by and between Maryland Permanent Capital Corpo ration, Owings Mills, Maryland, and the Federal Reserve Bank of Richmond. The Federal Reserve Board on January 18, 2001, announced the execution of a written agreement by and among the Bank of Greenville, Greenville, West Virginia, the Federal Reserve Bank of Rich mond, and the West Virginia Division of Banking. The Federal Reserve Board on January 31, 2001, announced the execution of a written agreement by and among the New Century Bank, Southfield, Michigan, the Federal Reserve Bank of Chicago, and the Office of Financial and Insurance Services, Lansing, Michigan. The Federal Reserve Board on January 31, 2001, announced the execution of a written agreement by and between the Valley Independent Bank, El Centro, California, and the Federal Reserve Bank of San Francisco. □ 169 Legal Developments F in a l R u le —A m e n d m e n t to R e g u l a t io n A The Board of Governors is amending 12 C.F.R. Part 201, its Regulation A (Extensions of Credit by Federal Reserve Banks; Change in Discount Rate), to reflect its approval of a decrease in the basic discount rate at each Federal Re serve Bank. The Board acted on requests submitted by the Boards of Directors of the twelve Federal Reserve Banks. The amendments to Part 201 (Regulation A) were effec tive January 4, 2001. The rate changes for adjustment credit were effective on the dates specified below: Part 201—Extensions of Credit by Federal Reserve Banks (Regulation A) 1. The authority citation for Part 201 continues to read as follows: Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, 347d, 348 et seq., 357, 374, 374a and 461. 2. Section 201.51 is revised to read as follows: Section 201.51—Adjustment credit fo r depository institutions. The rates for adjustment credit provided to depository institutions under section 201.3(a) are: Federal Reserve Bank Rate Effective1 Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 January 4, January 4, January 4, January 4, January 4, January 4, January 4, January 5, January 4, January 4, January 4, January 4, F in a l R u le —A m e n d m e n t to 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 R e g u l a t io n H tions in the Federal Reserve System). Section 121 of the Gramm-Leach-Bliley Act (GLBA) permits a national bank or state member bank that is among the second 50 largest insured banks to own or control a financial subsidiary only if the bank meets either the eligible debt requirement set forth in section 121 of the Act or alternative criteria established jointly by the Board and Treasury. On March 14, 2000, the Board and Treasury adopted and requested public comment on an interim rule establishing this alternative criteria. The interim rule provided that a national or state member bank meets the alternative criteria if the bank has a current long-term issuer credit rating from a nationally recognized statistical rating organization that is within the three highest investment grade rating catego ries used by the organization. After reviewing public com ments, the Board and Treasury are adopting a final rule that is substantively identical to the interim rule. Effective M arch 5, 2001, 12 C.F.R. Part 208 is amended as follows: Part 208—Membership of State Banking Institutions in the Federal Reserve System (Regulation H) 1. The authority citation for Part 208 continues to read as follows: Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321— 338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1818, 1820(d), 18230), 1828(o), 1831, 1831o, 1831p-l, 1831r-l, 1831w, 1835a, 1882, 2901- 2907, 3105, 3310, 3331-3351, and 3906-3909; 15 U.S.C. 78b, 781(b), 781(g), 781(i), 78o4(c)(5), 78q, 7 8 q -l, and 78w; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b, 4106 and 4128. 2. Section 208.71(c) is revised to read as follows: Section 208.71— What are the requirements to invest in or control a financial subsidiary? The Board of Governors is amending 12 C.F.R. Part 208, its Regulation H (Membership of State Banking Institu- 1. On January 3, 2001, the rate for adjustment credit was 5.75 percent for the following Federal Reserve Banks: New York, Cleveland, Atlanta, Kansas City, Dallas, and San Francisco. On Janu ary 4, the rate for adjustment credit was 5.75 percent for the Federal Reserve Bank o f St. Louis. (c) Alternative Requirement. A state member bank satisfies the alternative criteria referenced in paragraph (b)(l)(ii) of this section if the bank has a current long-term issuer credit rating from at least one nationally recognized statistical rating organization that is within the three highest invest ment grade rating categories used by the organization. 170 Federal Reserve Bulletin □ March 2001 3. Section 208.77(e) is revised to read as follows: Section 225.1—Authority, purpose, and scope. Section 208.77—Definitions. (c) * * * (e) Long-term Issuer Credit Rating. The term “ long-term issuer credit rating” means a written opinion issued by a nationally recognized statistical rating organization of the bank’s overall capacity and willingness to pay on a timely basis its unsecured, dollar-denominated financial obliga tions maturing in not less than one year. (10) Subpart J governs the conduct of merchant banking investment activities by financial holding companies as permitted under section 4(k)(4)(H) of the Bank Holding Company Act (12 U.S.C. 1843(k)(4)(H)). 3. Subpart J is revised to read as follows: J o in t F in a l R u le — A m e n d m e n t to R e g u l a t io n Y Subpart J— Merchant Banking Investments The Board of Governors of the Federal Reserve System and the Secretary of the Treasury jointly adopt this final rule governing merchant banking investments made by financial holding companies. The rule implements provi sions of the Gramm-Leach-Bliley Act that permit financial holding companies to make investments as part of a bona fide securities underwriting or merchant or investment banking activity. The Board and the Secretary have incor porated a number of amendments to the final rule to address issues raised by public commenters, to reduce potential regulatory burdens, and to clarify the application of the rule. These changes include expanding the definition of “ securities affiliate” to include a department or division o f a bank registered as a municipal securities dealer; modi fying the provisions defining prohibited routine manage ment and operation of portfolio companies; adopting a sunset provision for the investment thresholds under the interim rule and eliminating the dollar-based threshold for the review of a financial holding com pany’s merchant banking activities; streamlining the rule’s reporting and recordkeeping requirements; broadening the definition of “ private equity” funds and clarifying the rule’s application to such funds; and adopting several safe-harbors to the presumptions in the rule governing the definition of affili ate for purposes of sections 23A and 23B of the Federal Reserve Act. Effective February 15, 2001, 12C.F.R. Part 225 is amended as follows: Section 225.170— W hat type of investments are permitted by this subpart, and under what conditions may they be made? Section 225.171— What are the limitations on managing or operating a portfolio company held as a merchant banking investment? Section 225.172— W hat are the holding periods permitted for merchant banking investments? Section 225.173— How are investments in private equity funds treated under this subpart? Section 225.174— W hat aggregate thresholds apply to mer chant banking investments? Section 225.175— W hat risk management, record keeping and reporting policies are required to make merchant banking investments? Section 225.176— How do the statutory cross marketing and sections 23A and B limitations apply to merchant banking investments? Section 225.177— Definitions. Part 225—Bank Holding Companies and Change in Bank Control (Regulation Y) 1. The authority citation for Part 225 continues to read as follows: Authority : 12U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 183 lp -1 , 1843(c)(8), 1843(k), 1844(b), 1972(1), 2903, 2905, 3106, 3108, 3310, 3331-3351, 3907, and 3909. 2. Section 225.1(c)(10) is revised to read as follows: Subpart J —Merchant Banking Investments Section 225.170— What type of investments are permitted by this subpart, and under what conditions may they be made? (a) What types o f investments are permitted by this sub part? Section 4(k)(4)(H) of the Bank Holding Company Act (12 U.S.C. 1843(k)(4)(H)) and this subpart authorize a financial holding company, directly or indirectly and as principal or on behalf of one or more persons, to acquire or control any amount of shares, assets or ownership interests o f a company or other entity that is engaged in any activity not otherwise authorized for the financial holding company under section 4 of the Bank Holding Company Act. For purposes of this subpart, shares, assets or ownership inter ests acquired or controlled under section 4(k)(4)(H) and this subpart are referred to as “ merchant banking invest ments.” A financial holding company may not directly or indirectly acquire or control any merchant banking invest ment except in compliance with the requirements of this subpart. Legal Developments (b) Must the investment be a bona fide merchant banking investment? The acquisition or control of shares, assets or ownership interests under this subpart is not permitted unless it is part of a bona fide underwriting or merchant or investment banking activity. (c) What types o f ownership interests may be acquired? Shares, assets or ownership interests of a company or other entity include any debt or equity security, warrant, option, partnership interest, trust certificate or other instrument representing an ownership interest in the company or en tity, whether voting or nonvoting. (d) Where in a financial holding company may merchant banking investments be made? A financial holding com pany and any subsidiary (other than a depository institution or subsidiary of a depository institution) may acquire or control merchant banking investments. A financial holding company and its subsidiaries may not acquire or control merchant banking investments on behalf of a depository institution or subsidiary of a depository institution. (e) May assets other than shares be held directly? A financial holding company may not under this subpart acquire or control assets, other than debt or equity securi ties or other ownership interests in a company, unless: (1) The assets are held by or promptly transferred to a portfolio company; (2) The portfolio company maintains policies, books and records, accounts, and other indicia of corpo rate, partnership or limited liability organization and operation that are separate from the financial holding company and limit the legal liability of the financial holding company for obligations of the portfolio company; and (3) The portfolio company has management that is separate from the financial holding company to the extent required by section 225.171. (f) What type o f affiliate is required fo r a financial holding company to make merchant banking investments? A finan cial holding company may not acquire or control merchant banking investments under this subpart unless the financial holding company qualifies under at least one of the follow ing paragraphs: (1) Securities affiliate. The financial holding company is or has an affiliate that is registered under the Securities Exchange Act of 1934 (15 U.S.C. 78c, 78o, 78o-4) as: (i) A broker or dealer; or (ii) A municipal securities dealer, including a sep arately identifiable department or division of a bank that is registered as a municipal securi ties dealer. (2) Insurance affiliate with an investment adviser affil iate. The financial holding company controls: (i) An insurance company that is predominantly engaged in underwriting life, accident and health, or property and casualty insurance (other than credit-related insurance), or pro viding and issuing annuities; and (ii) A company that: (A) Is registered with the Securities and Ex 171 change Commission as an investment ad viser under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.); and (B) Provides investment advice to an insur ance company. Section 225.171— What are the limitations on managing or operating a portfolio company held as a merchant banking investment? (a) May a financial holding company routinely manage or operate a portfolio company? Except as permitted in para graph (e) of this section, a financial holding company may not routinely manage or operate any portfolio company. (b) When does a financial holding company routinely man age or operate a company? (1) Examples o f routine management or operation.(i) Executive officer interlocks at the portfolio company. A financial holding company rou tinely manages or operates a portfolio com pany if any director, officer or employee of the financial holding company serves as or has the responsibilities o f an executive officer of the portfolio company. (ii) Interlocks by executive officers o f the financial holding company. (A) Prohibition. A financial holding company routinely manages or operates a portfolio company if any executive officer of the financial holding company serves as or has the responsibilities of an officer or employee of the portfolio company. (B) Definition. For purposes of paragraph (b)(l)(ii)(A ) of this section, the term “ fi nancial holding com pany” includes the financial holding company and only the following subsidiaries of the financial holding company: (1) A securities broker or dealer registered under the Securities Exchange Act of 1934; (2) A depository institution; (3) An affiliate that engages in merchant banking activ ities under this subpart or insurance company investment activities under section 4(k)(4)(I) of the Bank Holding Com pany Act (12 U.S.C. 1843(k)(4)(I)); (4) A small business investment company (as defined in section 302(b) of the Small Business Investment Act of 1958 (15 U.S.C. 682(b)) controlled by the financial holding company or by any depository institution controlled by the financial holding com pany; and (5) Any other affiliate that engages in significant eq uity investment activities that are subject to a spe cial capital charge under the capital adequacy rules or guidelines of the Board. (iii) Covenants regarding ordinary course o f busi ness. A financial holding company routinely manages or operates a portfolio company if 172 Federal Reserve Bulletin □ March 2001 any covenant or other contractual arrangement exists between the financial holding company and the portfolio company that would restrict the portfolio com pany’s ability to make rou tine business decisions, such as entering into transactions in the ordinary course of business or hiring officers or employees other than ex ecutive officers. (2) Presumptions o f routine management or operation. A financial holding company is presumed to routinely manage or operate a portfolio company if: (i) Any director, officer, or employee of the finan cial holding company serves as or has the responsibilities of an officer (other than an executive officer) or employee of the portfolio company; or (ii) Any officer or employee of the portfolio com pany is supervised by any director, officer, or employee of the financial holding company (other than in that individual’s capacity as a director of the portfolio company). (c) How may a financial holding company rebut a presump tion that it is routinely managing or operating a portfolio company? A financial holding company may rebut a pre sumption that it is routinely managing or operating a portfolio company under paragraph (b)(2) of this section by presenting information to the Board demonstrating to the Board’s satisfaction that the financial holding company is not routinely managing or operating the portfolio com pany. (d) What arrangements do not involve routinely managing or operating a portfolio company? ( 1 ) Director representation at portfolio companies. A financial holding company may select any or all of the directors of a portfolio company or have one or more of its directors, officers, or employees serve as directors of a portfolio company if: (i) The portfolio company employs officers and employees responsible for routinely managing and operating the company; and (ii) The financial holding company does not rou tinely manage or operate the portfolio com pany, except as permitted in paragraph (e) of this section. (2) Covenants or other provisions regarding extraordi nary events. A financial holding company may, by virtue of covenants or other written agreements with a portfolio company, restrict the ability of the portfolio company, or require the portfolio com pany to consult with or obtain the approval of the financial holding company, to take actions outside of the ordinary course of the business of the portfo lio company. Examples of the types of actions that may be subject to these types of covenants or agreements include, but are not limited to, the following: (i) The acquisition of significant assets or con trol of another company by the portfolio com pany or any of its subsidiaries; (ii) (iii) (iv) (v) (vi) (vii) Removal or selection of an independent ac countant or auditor or investment banker by the portfolio company; Significant changes to the business plan or accounting methods or policies of the portfo lio company; Removal or replacement of any or all of the executive officers of the portfolio company; The redemption, authorization or issuance of any equity or debt securities (including op tions, warrants or convertible shares) o f the portfolio company or any borrowing by the portfolio company outside of the ordinary course of business; The amendment of the articles of incorpora tion or by-laws (or similar governing docu ments) of the portfolio company; and The sale, merger, consolidation, spin-off, re capitalization, liquidation, dissolution or sale of substantially all of the assets of the portfo lio company or any of its significant subsid iaries. (3) Providing advisory and underwriting services to, and having consultations with, a portfolio com pany. A financial holding company may: (i) Provide financial, investment and manage ment consulting advice to a portfolio com pany in a manner consistent with and subject to any restrictions on such activities contained in sections 225.28(b)(6) or 225.86(b)(1) of this part (12 C.F.R. 225.28(b)(6) and 225.86(b)(1)); (ii) Provide assistance to a portfolio company in connection with the underwriting or private placement of its securities, including acting as the underwriter or placement agent for such securities; and (iii) M eet with the officers or employees of a portfolio company to monitor or provide ad vice with respect to the portfolio com pany’s performance or activities. (e) When may a financial holding company routinely man age or operate a portfolio company? (1) Special circumstances required. A financial hold ing company may routinely manage or operate a portfolio company only when intervention by the financial holding company is necessary or required to obtain a reasonable return on the financial hold ing com pany’s investment in the portfolio com pany upon resale or other disposition of the invest ment, such as to avoid or address a significant operating loss or in connection with a loss of senior management at the portfolio company. (2) Duration limited. A financial holding company may routinely manage or operate a portfolio com pany only for the period of time as may be neces sary to address the cause of the financial holding com pany’s involvement, to obtain suitable alterna tive management arrangements, to dispose of the investment, or to otherwise obtain a reasonable Legal Developments return upon the resale or disposition of the invest ment. (3) Notice required fo r extended involvement. A finan cial holding company may not routinely manage or operate a portfolio company for a period greater than nine months without prior written notice to the Board. (4) Documentation required. A financial holding com pany must maintain and make available to the Board upon request a written record describing its involvement in routinely managing or operating a portfolio company. (f) May a depository institution or its subsidiary routinely manage or operate a portfolio company? (1) In general. A depository institution and a subsid iary of a depository institution may not routinely manage or operate a portfolio company in which an affiliated company owns or controls an interest under this subpart. (2) Definition applying provisions governing routine management or operation. For purposes of this section other than paragraph (e) and for purposes of section 225.173(d), a financial holding company includes a depository institution controlled by the financial holding company and a subsidiary of such a depository institution. (3) Exception fo r certain subsidiaries o f depository institutions. For purposes of paragraph (e) of this section, a financial holding company includes a financial subsidiary held in accordance with sec tion 5136A of the Revised Statutes (12 U.S.C. 24a) or section 46 of the Federal Deposit Insurance Act (12 U.S.C. 183 lw ), and a subsidiary that is a small business investment company and that is held in accordance with the Small Business Invest ment Act (15 U.S.C. 661 et seq.), and such a subsidiary may, in accordance with the limitations set forth in this section, routinely manage or oper ate a portfolio company in which an affiliated company owns or controls an interest under this subpart. Section 225.172— What are the holding periods permitted fo r merchant banking investments? (a) Must investments be made fo r resale? A financial holding company may own or control shares, assets and ownership interests pursuant to this subpart only for a period of time to enable the sale or disposition thereof on a reasonable basis consistent with the financial viability of the financial holding com pany’s merchant banking invest ment activities. (b) What period o f time is generally permitted fo r holding merchant banking investments ? (1) In general. Except as provided in this section or section 225.173, a financial holding company may not, directly or indirectly, own, control or hold any share, asset or ownership interest pursuant to this subpart for a period that exceeds ten years. 173 (2) Ownership interests acquired from or transferred to companies held under this subpart. For purposes of paragraph (b)(1) of this section, shares, assets or ownership interests: (i) Acquired by a financial holding company from a company in which the financial hold ing company held an interest under this sub part will be considered to have been acquired by the financial holding company on the date that the share, asset or ownership interest was acquired by the company; and (ii) Acquired by a company from a financial holding company will be considered to have been acquired by the company on the date that the share, asset or ownership interest was acquired by the financial holding company if(A) The financial holding company held the share, asset, or ownership interest under this subpart; and (B) The financial holding company holds an interest in the acquiring company under this subpart. (3) Interests previously held by a financial holding company under limited authority. For purposes of paragraph (b)(1) of this section, any shares, assets, or ownership interests previously owned or con trolled, directly or indirectly, by a financial holding company under any other provision of the Federal banking laws that imposes a limited holding period will if acquired under this subpart be considered to have been acquired by the financial holding com pany under this subpart on the date the financial holding company first acquired ownership or con trol of the shares, assets or ownership interests under such other provision of law. For purposes of this paragraph (b)(3), a financial holding company includes a depository institution controlled by the financial holding company and any subsidiary of such a depository institution. (4) Approval required to hold interests held in excess o f time limit. A financial holding company may seek Board approval to own, control or hold shares, assets or ownership interests of a company under this subpart for a period that exceeds the period specified in paragraph (b)(1) of this section. A request for approval must; (i) Be submitted to the Board at least 90 days prior to the expiration of the applicable time period; (ii) Provide the reasons for the request, including information that addresses the factors in para graph (b)(5) of this section; and (iii) Explain the financial holding com pany’s plan for divesting the shares, assets or ownership interests. (5) Factors governing Board determinations. In review ing any proposal under paragraph (b)(4) of this sec tion, the Board may consider all the facts and circumstances related to the investment, including: 174 Federal Reserve Bulletin □ March 2001 (i) The cost to the financial holding company of disposing of the investment within the appli cable period; (ii) The total exposure of the financial holding company to the company and the risks that disposing of the investment may pose to the financial holding company; (iii) Market conditions; (iv) The nature of the portfolio com pany’s busi ness; (v) The extent and history of involvement by the financial holding company in the manage ment and operations of the company; and (vi) The average holding period of the financial holding com pany’s merchant banking invest ments. (6) Restrictions applicable to investments held beyond time period. A financial holding company that di rectly or indirectly owns, controls or holds any share, asset or ownership interest of a company under this subpart for a total period that exceeds the period specified in paragraph (b)(1) of this section must: (i) For purposes of determining the financial holding com pany’s regulatory capital, apply to the financial holding com pany’s adjusted carrying value of such shares, assets, or own ership interests a capital charge determined by the Board that must be: (A) Higher than the maximum marginal Tier 1 capital charge applicable under the Board’s capital adequacy rules or guide lines (see 12 C.F.R. 225 Appendix A) to merchant banking investments held by that financial holding company; and (B) In no event less than 25 percent of the adjusted carrying value of the invest ment; and (ii) Abide by any other restrictions that the Board may impose in connection with granting ap proval under paragraph (b)(4) of this section. Section 225.173—How are investments in private equity funds treated under this subpart? (a) What is a private equity fund? For purposes of this subpart, a “ private equity fund” is any company that: (1) Is formed for the purpose of and is engaged exclu sively in the business of investing in shares, assets, and ownership interests of financial and nonfinancial companies for resale or other disposition; (2) Is not an operating company; (3) No more than 25 percent of the total equity of which is held, owned or controlled, directly or indirectly, by the financial holding company and its directors, officers, employees and principal shareholders; (4) Has a maximum term of not more than 15 years; and (5) Is not formed or operated for the purpose of mak ing investments inconsistent with the authority granted under section 4(k)(4)(H) of the Bank Hold ing Company Act (12 U.S.C. 1843(k)(4)(H)) or evading the limitations governing merchant bank ing investments contained in this subpart. (b) What form may a private equity fund take? A private equity fund may be a corporation, partnership, limited liability company or other type of company that issues ownership interests in any form. (c) What is the holding period permitted fo r interests in private equity funds? (1) In general. A financial holding company may own, control or hold any interest in a private equity fund under this subpart and any interest in a portfolio company that is owned or controlled by a private equity fund in which the financial holding com pany owns or controls any interest under this sub part for the duration of the fund, up to a maximum of 15 years. (2) Request to hold interest fo r longer period. A finan cial holding company may seek Board approval to own, control or hold an interest in or held through a private equity fund for a period longer than the duration of the fund in accordance with section 225.172(b) of this subpart. (3) Application o f rules. The rules described in section 225.172(b)(2) and (3) governing holding periods o f interests acquired, transferred or previously held by a financial holding company apply to interests in, held through, or acquired from a private equity fund. (d) How do the restrictions on routine management and operation apply to private equity funds and investments held through a private equity fund? (1) Portfolio companies held through a private equity fund. A financial holding company may not rou tinely manage or operate a portfolio company that is owned or controlled by a private equity fund in which the financial holding company owns or con trols any interest under this subpart, except as permitted under section 225.171(e). (2) Private equity funds controlled by a financial hold ing company. A private equity fund that is con trolled by a financial holding company may not routinely manage or operate a portfolio company, except as permitted under section 225.171(e). (3) Private equity funds that are not controlled by a financial holding company. A private equity fund may routinely manage or operate a portfolio com pany so long as no financial holding company controls the private equity fund or as permitted under section 225.171(e). (4) When does a financial holding company control a private equity fund? A financial holding company controls a private equity fund for purposes of this subpart if the financial holding company, including any director, officer, employee or principal share holder of the financial holding company: Legal Developments (i) Serves as a general partner, managing mem ber, or trustee of the private equity fund (or serves in a similar role with respect to the private equity fund); (ii) Owns or controls 25 percent or more of any class of voting shares or similar interests in the private equity fund; (iii) In any manner selects, controls or constitutes a majority of the directors, trustees or man agement of the private equity fund; or (iv) Owns or controls more than 5 percent of any class of voting shares or similar interests in the private equity fund and is the investment adviser to the fund. Section 225.174— What aggregate thresholds apply to merchant banking investments? (a) In general. A financial holding company may not, without Board approval, directly or indirectly acquire any additional shares, assets or ownership interests under this subpart or make any additional capital contribution to any company the shares, assets or ownership interests of which are held by the financial holding company under this subpart if the aggregate carrying value of all merchant banking investments held by the financial holding com pany under this subpart exceeds: (1) 30 percent of the Tier 1 capital of the financial holding company; or (2) After excluding interests in private equity funds, 20 percent of the Tier 1 capital of the financial holding company. (b) How do these thresholds apply to a private equity fund? Paragraph (a) of this section applies to the interest acquired or controlled by the financial holding company under this subpart in a private equity fund. Paragraph (a) of this section does not apply to any interest in a company held by a private equity fund or to any interest held by a person that is not affiliated with the financial holding company. (c) How long do these thresholds remain in effect? This section 225.174 shall cease to be effective on the date that a final rule issued by the Board that specifically addresses the appropriate regulatory capital treatment of merchant banking investments becomes effective. Section 225.175— What risk management, record keeping and reporting policies are required to make merchant banking investments? (a) What internal controls and records are necessary? (1) General. A financial holding company, including a private equity fund controlled by a financial hold ing company, that makes investments under this subpart m ust establish and maintain policies, pro cedures, records and systems reasonably designed to conduct, monitor and manage such investment activities and the risks associated with such invest ment activities in a safe and sound manner, includ 175 ing policies, procedures, records and systems rea sonably designed to: (i) Monitor and assess the carrying value, mar ket value and performance of each invest ment and the aggregate portfolio; (ii) Identify and manage the market, credit, con centration and other risks associated with such investments; (iii) Identify, monitor and assess the terms, amounts and risks arising from transactions and relationships (including contingent fees or contingent interests) with each company in which the financial holding company holds an interest under this subpart; (iv) Ensure the maintenance of corporate sepa rateness between the financial holding com pany and each company in which the finan cial holding company holds an interest under this subpart and protect the financial holding company and its depository institution sub sidiaries from legal liability for the opera tions conducted and financial obligations of each such company; and (v) Ensure compliance with this part and any other provisions of law governing transac tions and relationships with companies in which the financial holding company holds an interest under this subpart (e.g., fiduciary principles or sections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371c, 371c-l), if applicable). (2) Availability o f records. A financial holding com pany m ust make the policies, procedures and records required by paragraph (a)(1) of this section available to the Board or the appropriate Reserve Bank upon request. (b) What periodic reports must be filed? A financial hold ing company must provide reports to the appropriate Re serve Bank in such format and at such times as the Board may prescribe. (c) Is notice required fo r the acquisition o f companies ? (1) Fulfillment o f statutory notice requirement. Except as required in paragraph (c)(2) of this section, no post-acquisition notice under section 4(k)(6) of the Bank Holding Company Act (12 U.S.C. 1843(k)(6)) is required by a financial holding com pany in connection with an investment made under this subpart if the financial holding company has previously filed a notice under section 225.87 indi cating that it had commenced merchant banking investment activities under this subpart. (2) Notice o f large individual investments. A financial holding company must provide written notice to the Board on the appropriate form within 30 days after acquiring more than 5 percent of the voting shares, assets or ownership interests of any com pany under this subpart, including an interest in a private equity fund, at a total cost to the financial holding company that exceeds the lesser o f 5 per 176 Federal Reserve Bulletin □ March 2001 cent of the Tier 1 capital of the financial holding company or $200 million. Section 225.176—How do the statutory cross marketing and sections 23A and B limitations apply to merchant banking investments? (a) Are cross marketing activities prohibited? (1) In general. A depository institution, including a subsidiary of a depository institution, controlled by a financial holding company may not: (i) Offer or market, directly or through any ar rangement, any product or service of any company if more than 5 percent of the com pany’s voting shares, assets or ownership in terests are owned or controlled by the finan cial holding company pursuant to this subpart; or (ii) Allow any product or service of the deposi tory institution, including any product or ser vice of a subsidiary of the depository institu tion, to be offered or marketed, directly or through any arrangement, by or through any company described in paragraph (a)( 1)(i) of this section. (2) How are certain subsidiaries treated? For pur poses of paragraph (a)(1) of this section, a subsid iary of a depository institution does not include a financial subsidiary held in accordance with sec tion 5136A of the Revised Statutes (12 U.S.C. 24a) or section 46 of the Federal Deposit Insurance Act. (12 U.S.C.1831w), any company held by a company owned in accordance with section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq.', 12 U.S.C. 611 et seq.), or any company held by a small business investment company owned in accordance with the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.). (3) How do the cross marketing restrictions apply to private equity funds? The restriction contained in paragraph (a)(1) of this section does not apply to: (i) Portfolio companies held by a private equity fund that the financial holding company does not control; or (ii) The sale, offer or marketing of any interest in a private equity fund, whether or not con trolled by the financial holding company. (b) When are companies held under section 4(k)(4)(H) affiliates under sections 23A and B? (1) Rebuttable presumption of control. The following rebuttable presumption of control shall apply for purposes of sections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371c, 37lc - 1): if a finan cial holding company directly or indirectly owns or controls more than 15 percent of the total equity of a company pursuant to this subpart, the company shall be presumed to be an affiliate of any member bank that is affiliated with the financial holding company. (2) Request to rebut presumption. A financial holding company may rebut this presumption by providing information acceptable to the Board demonstrating that the financial holding company does not control the company. (3) Presumptions that control does not exist. Absent evidence to the contrary, the presumption in para graph (b)(1) of this section will be considered to have been rebutted without Board approval under paragraph (b)(2) o f this section if any one o f the following requirements are met: (i) No officer, director or employee of the finan cial holding company serves as a director, trustee, or general partner (or individual exer cising similar functions) of the company; (ii) A person that is not affiliated or associated with the financial holding company owns or controls a greater percentage of the equity capital of the portfolio company than the amount owned or controlled by the financial holding company, and no more than one offi cer or employee of the holding company serves as a director or trustee (or individual exercising similar functions) of the company; or (iii) A person that is not affiliated or associated with the financial holding company owns or controls more than 50 percent o f the voting shares of the portfolio company, and officers and employees of the holding company do not constitute a majority of the directors or trustees (or individuals exercising similar functions) of the company. (4) Convertible instruments. For purposes of para graph (b)(1) of this section, equity capital includes options, warrants and any other instrument con vertible into equity capital. (5) Application o f presumption to private equity funds. A financial holding company will not be presumed to own or control the equity capital of a company for purposes of paragraph (b)(1) of this section solely by virtue of an investment made by the financial holding company in a private equity fund that owns or controls the equity capital of the company unless the financial holding company controls the private equity fund as described in section 225.173(d)(4). (6) Application o f sections 23A and B to U.S. branches and agencies o f foreign banks. Sections 23A and 23B o f the Federal Reserve Act (12 U.S.C. 371c, 3 7 lc - 1) shall apply to all covered transactions be tween each U.S. branch and agency of a foreign bank that acquires or controls, or that is affiliated with a company that acquires or controls, merchant banking investments and: (i) Any portfolio company that the foreign bank or affiliated company controls or is presumed to control under paragraph (b)(1) of this sec tion; and Legal Developments (ii) Any company that the foreign bank or affili ated company controls or is presumed to con trol under paragraph (b)(1) of this section if the company is engaged in acquiring or con trolling merchant banking investments and the proceeds of the covered transaction are used for the purpose of funding the compa ny’s merchant banking investment activities. Section 225,177—Definitions. (a) What do references to a financial holding company include ? (1) Except as otherwise expressly provided, the term “ financial holding com pany” as used in this sub part means the financial holding company and all of its subsidiaries, including a private equity fund or other fund controlled by the financial holding company. (2) Except as otherwise expressly provided, the term “ financial holding com pany” does not include a depository institution or subsidiary of a depository institution or any portfolio company controlled di rectly or indirectly by the financial holding com pany. (b) What do references to a depository institution include? For purposes of this subpart, the term “ depository institu tion” includes a U.S. branch or agency of a foreign bank. (c) What is a portfolio company ? A portfolio company is any company or entity: (1) That is engaged in any activity not authorized for the financial holding company under section 4 of 111 the Bank Holding Company Act (12 U.S.C. 1843); and (2) Any shares, assets or ownership interests of which are held, owned or controlled directly or indirectly by the financial holding company pursuant to this subpart, including through a private equity fund that the financial holding company controls. (d) Who are the executive officers o f a company? (1) An executive officer of a company is any person who participates or has the authority to participate (other than in the capacity as a director) in major policymaking functions of the company, whether or not the officer has an official title, the title designates the officer as an assistant, or the officer serves without salary or other compensation. (2) The term “ executive officer” does not include: (i) Any person, including a person with an offi cial title, who may exercise a certain measure of discretion in the performance o f his duties, including the discretion to make decisions in the ordinary course of the com pany’s busi ness, but who does not participate in the determination of major policies of the com pany and whose decisions are limited by pol icy standards fixed by senior management of the company; or (ii) Any person who is excluded from participat ing (other than in the capacity of a director) in major policymaking functions of the com pany by resolution of the board of directors or by the bylaws of the company and who does not in fact participate in such policy making functions. A pplicatio n s A ppr o v ed Und e r Ba n k H o ld in g C o m pa n y a c t By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) Effective Date Mountain West Financial Corporation, Helena, Montana BankWest Financial, Inc., Kalispell, Montana BankWest, National Association, Kalispell, Montana January 8, 2001 178 Federal Reserve Bulletin □ March 2001 A pplications A ppr o v ed Un d er Ba n k H o ld in g C o m pa n y A c t By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Applicant(s) Bank(s) Reserve Bank Effective Date Arkansas State Bancshares, Inc., Siloam Springs, Arkansas Bedwell Investments, Inc., Jackson, Alabama Bryan-Heritage Limited Partnership, Bryan, Texas Bryan Family Management Trust, Bryan, Texas Carlson Bancshares, Inc., West Memphis, Arkansas Arkansas State Bank, Siloam Springs, Arkansas Merchants Trust, Inc., Jackson, Alabama The First National Bank of Bryan, Bryan, Texas St. Louis January 9, 2001 Atlanta January 12, 2001 Dallas January 9, 2001 St. Louis December 28, 2000 Dallas December 28, 2000 Chicago January 5, 2001 Dallas January 17, 2001 Atlanta January 11, 2001 Cleveland January 5, 2001 San Francisco January 18, 2001 New York December 29, 2000 Chicago January 16, 2001 New York December 28, 2000 Minneapolis December 28, 2000 Kansas City January 18, 2001 Chicago January 16, 2001 Minneapolis January 19, 2001 Charter Bancshares, Inc., Corpus Christi, Texas Charter IBHC, Inc., Wilmington, Delaware Comerica Incorporated, Detroit, Michigan Dickinson Holdings, Inc., Dickinson, Texas Dickinson Holdings of Delaware, Wilmington, Delaware First Deposit Bancshares, Inc., Douglasville, Georgia Fifth Third Bancorp, Cincinnati, Ohio Frontier Financial Corporation, Everett, Washington Holland Bancorp, Inc., Holland, New York Indiana United Bancorp, Greensburg, Indiana Lakeland Bancorp, Inc., Oak Ridge, New Jersey MSB Bankshares, Inc., Iron River, Michigan Nebraska Bankshares, Inc., Farnam, Nebraska Northstar Financial Group, Inc., Bad Axe, Michigan Remada Financial Holdings, Inc., Minnetonka, Minnesota Lakeside Bancshares, Inc., Hughes, Arkansas The Planters National Bank of Hughes, Hughes, Arkansas Charter Bank-Northwest, Corpus Christi, Texas Imperial Bancorp, Inglewood, California Citizens State Bank of Dickinson, Dickinson, Texas League City Bank and Trust, League City, Texas Douglas Federal Bank, Douglasville, Georgia Capital Holding, Inc., Sylvania, Ohio Capital Bank N.A., Sylvania, Ohio Interbancorp, Inc., Duvall, Washington Inter Bank, Duvall, Washington Bank of Holland, Holland, New York Regional Bank, New Albany, Indiana Sussex Bancorp, Franklin, New Jersey The Miners’ State Bank of Iron River, Iron River, Michigan Stockmens Financial Corporation, Rushville, Nebraska Northstar Bank, Bad Axe, Michigan Claremont Financial Services, Inc., St. Paul, Minnesota Alliance Bank of Blooming Prairie, Blooming Prairie, Minnesota Legal Developments 179 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date State National Bancshares, Inc., Lubbock, Texas Triple J Financial, Inc., Claude, Texas Ruidoso Bank Corporation, Ruidoso, New Mexico First Caprock Bancshares, Inc., Claude, Texas The First National Bank of Claude, Claude, Texas Desert Valley National Bank, Cave Creek, Arizona Dallas January 3, 2001 Dallas January 5, 2001 Kansas City January 4, 2001 Fredericksburg State Bank, Fredericksburg, Virginia Fredericksburg Savings Bank, Fredericksburg, Virginia Republic Security Financial Corporation, West Palm Beach, Florida Republic Security Bank, West Palm Beach, Florida Richmond January 3, 2001 Richmond January 24, 2001 Woodford State Bank, Woodford, Wisconsin Chicago January 23, 2001 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Community First Bancshares, Inc., Union City, Tennessee Cornerstone Financial Services Group, Inc., Ottumwa, Iowa Glacier Bancorp, Inc., Kalispell, Montana Southern Financial, Inc., Brentwood, Tennessee To engage de novo in extending credit and servicing loans St. Louis December 27, 2000 Chicago December 28, 2000 Minneapolis January 19, 2001 Chicago January 23, 2001 Philadelphia January 3, 2001 St. Louis December 29, 2000 United Nebraska Financial Company, Grand Island, Nebraska Virginia Capital Bancshares, Inc., Fredericksburg, Virginia Wachovia Corporation, Winston-Salem, North Carolina Woodford Bancshares, Inc., Monroe, Wisconsin Section 4 Michigan National Corporation, Farmington Hills, Michigan PSB Bancorp, Inc., Philadelphia, Pennsylvania Union Planters Corporation, Memphis, Tennessee Union Planters Holding Corporation, Memphis, Tennessee WesterFed Financial Corporation, Missoula, Montana Western Security Bank, Missoula, Montana Standard Federal Bank, Troy, Michigan Iron Bridge Holdings, Inc., Philadelphia, Pennsylvania McGuire Performance Solutions, Inc., Philadelphia, Pennsylvania Avanti Capital, Inc., Philadelphia, Pennsylvania Jefferson Savings Bancorp, Inc., Ballwin, Missouri Jefferson Heritage Bank, Ballwin, Missouri 180 Federal Reserve Bulletin □ March 2001 Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date F&M National Corporation, Winchester, Virginia Atlantic Financial Corp., Newport News, Virginia Johnson Mortgage Company, L.L.C., Newport News, Virginia Bank of Lakewood, Lakewood, California Mission Hills Mortgage Corporation, Santa Ana, California Michigan National Corporation, Farmington Hills, Michigan Michigan National Bank, Farmington Hills, Michigan Independence One Life Insurance Company, Phoenix, Arizona Independence One Capital Management Corporation, Farmington, Hills, Michigan Richmond January 9, 2001 San Francisco January 18, 2001 Chicago January 23, 2001 Gateway Bancorp, Santa Ana, California Stichting Prioriteit ABN AMRO Holding, Amsterdam, The Netherlands Stichting Administratiekantoor ABN AMRO Holding, Amsterdam, The Netherlands ABN AMRO Holding N.V., Amsterdam, The Netherlands ABN AMRO Bank N.V., Amsterdam, The Netherlands ABN AMRO North America Holding Company, Chicago, Illinois ABN AMRO North America, Inc., Chicago, Illinois A p p u c a t io n s a p p r o v e d u n d er BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Applicant(s) Bank(s) Reserve Bank Effective Date M&I Marshall & Ilsley Bank, Milwaukee, Wisconsin M&I Central State Bank, Oshkosh, Wisconsin M&I Bank of Shawano, Shawano, Wisconsin M&I Bank Fox Valley, Appleton, Wisconsin M&I Bank Northeast, Green Bay, Wisconsin Chicago January 11, 2001 Legal Developments 181 A pplications A pproved Under Bank M erger A ct—Continued Applicant(s) Bank(s) Reserve Bank Effective Date M&I Marshall & Isley Bank, Milwaukee, Wisconsin M&I Citizens American Bank, Merrill, Wisconsin M&I Central Bank & Trust, Marshfield, Wisconsin M&I Bank of Eagle River, Eagle River, Wisconsin M&I Merchants Bank, Rhinelander, Wisconsin M&I First American Bank, Wausau, Wisconsin M&I Bank, Ashland, Wisconsin M&I Bank, Superior, Wisconsin M&I Mid State Bank, Stevens Point, Wisconsin Independent National Bank, Irving, Texas First Union National Bank, Charlotte, North Carolina Chicago January 10, 2001 Atlanta January 25, 2001 Atlanta January 19, 2001 SouthTrust Bank, Birmingham, Alabama SouthTrust Bank, Birmingham, Alabama P ending Cases In volving the B oard of G overnors 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. Dime Bancorp, Inc. v. Board of Governors, No. 00-4249 (2d Cir., filed December 11, 2000). Petition for review of a Board order dated September 27, 2000, approving the applications of North Fork Corporation, Inc., Melville, New York, to acquire control of Dime Bancorp, Inc. and to thereby acquire its wholly owned subsidiary, The Dime Savings Bank of New York, FSB, both of New York, New York. Nelson v. Greenspan, No. 99-215(EGS) (D.D.C., amended complaint filed December 8, 2000). Employment discrimi nation action. Howe v. Bank for International Settlements, No. 00CV12485 RCL (D. Mass., filed December 7, 2000). Action seeking damages in connection with gold market activities and the repurchase of privately-owned shares of the Bank for Inter national Settlements. Barnes v. Reno, No. 1:00CV02900 (D.D.C., filed December 4, 2000). Civil rights action. El Bey v. United States, No. 00-5293 (D.C. Cir., filed August 31, 2000). Appeal from district court order dismiss ing pro se action as lacking arguable basis in law. The government filed a motion for summary affirmance on October 26, 2000. Trans Union LLC v. Board of Governors, et al., No. 00-CV2087(ESH) (D.D.C., filed August 30, 2000). Action under Administrative Procedure Act challenging a portion of inter agency rule regarding Privacy of Consumer Financial Infor mation. Sedgwick v. Board of Governors, No. 00-16525 (9th Cir., filed August 7, 2000). Appeal of district court dismissal of action under Federal Tort Claims Act alleging violation of bank supervision requirements. Individual Reference Services Group, Inc., v. Board of Gover nors, et al., No. OO-CV-1828 (ESH) (D.D.C., filed July 28, 2000). Action under Administrative Procedure Act chal lenging a portion of interagency rule regarding Privacy of Consumer Finance Information. Reed Elsevier Inc. v. Board of Governors, No. 00-1289 (D.C. Cir., filed June 30, 2000). Petition for review of interagency rule regarding Privacy of Consumer Financial Information. Bettersworth v. Board o f Governors, No. 00-50262 (5th Cir., filed April 14, 2000). Appeal of district court’s dismissal of Privacy Act claims. Albrecht v. Board of Governors, No. OO-CV-317 (CKK) (D.D.C., filed February 18, 2000). Action challenging the method of funding of the retirement plan for certain Board employees. Guerrero v. United States, No. CV-F-99-6771(OWW) (E.D. Cal., filed November 29, 1999). Prisoner suit. Artis v. Greenspan, No. 1.99CV02073 (EGS) (D.D.C., filed August 3, 1999). Employment discrimination action. 182 Federal Reserve Bulletin □ March 2001 Sheriff Gerry Ali v. U.S. State Department, No. 99-7438 (C.D. Cal., filed July 21, 1999). Action relating to impounded bank drafts. On December 3, 1999, the court stayed the action indefinitely. Fraternal Order of Police v. Board of Governors, No. 1:98CV03116 (WBB)(D.D.C., filed December 22, 1998). Declaratory judgment action challenging Board labor prac tices. On February 26, 1999, the Board filed a motion to dismiss the action. Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed May 4, 1998). Appeal and cross-appeal of district court order granting in part and denying in part the Board’s motion for summary judgment seeking prejudgment interest and a statutory surcharge in connection with a civil money penalty assessed by the Board. On February 24, 1999, the court granted the Board’s appeal and denied the cross appeal, and remanded the matter to the district court for determination of prejudgment interest due to the Board. On January 29, 2001, the District Court approved a settlement and terminated the action. A1 Financial and Business Statistics A3 d o m e s t i c F in a n c ia l S t a t i s t i c s Money Stock and Bank Credit A4 A5 A6 Reserves, money stock, and debt measures Reserves of depository institutions and Reserve Bank credit Reserves and borrowings— Depository institutions Policy Instruments A7 A8 A9 Federal Finance— Continued G u id e t o t a b u l a r P r e s e n t a t i o n Federal Reserve Bank interest rates Reserve requirements of depository institutions Federal Reserve open market transactions Federal Reserve Banks A10 Condition and Federal Reserve note statements A l l Maturity distribution of loan and security holding A27 Gross public debt of U.S. Treasury— Types and ownership A28 U.S. government securities dealers— Transactions A29 U.S. government securities dealers— Positions and financing A30 Federal and federally sponsored credit agencies— Debt outstanding Securities Markets and Corporate Finance A31 New security issues— Tax-exempt state and local governments and corporations A3 2 Open-end investment companies— Net sales and assets A32 Corporate profits and their distribution A32 Domestic finance companies— Assets and liabilities A3 3 Domestic finance companies— Owned and managed receivables Real Estate Monetary and Credit Aggregates A12 Aggregate reserves of depository institutions and monetary base A13 Money stock and debt measures Commercial Banking Institutions— Assets and Liabilities A15 A16 A17 A19 A20 All commercial banks in the United States Domestically chartered commercial banks Large domestically chartered commercial banks Small domestically chartered commercial banks Foreign-related institutions A34 Mortgage markets— New homes A35 Mortgage debt outstanding Consumer Credit A3 6 Total outstanding A36 Terms Flow o f Funds A37 A39 A40 A41 Funds raised in U.S. credit markets Summary of financial transactions Summary o f credit market debt outstanding Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar acceptances outstanding A22 Prime rate charged by banks on short-term business loans A23 Interest rates— Money and capital markets A24 Stock market— Selected statistics Federal Finance A25 Federal fiscal and financing operations A26 U.S. budget receipts and outlays A27 Federal debt subject to statutory limitation D o m e s t ic n o n f in a n c ia l S t a t is t ic s Selected Measures A42 A42 A43 A44 A46 A47 A48 A49 Nonfinancial business activity Labor force, employment, and unemployment Output, capacity, and capacity utilization Industrial production— Indexes and gross value Housing and construction Consumer and producer prices Gross domestic product and income Personal income and saving A2 Federal Reserve Bulletin □ March 2001 INTERNATIONAL STATISTICS Summary Statistics A50 A51 A51 A 51 U.S. international transactions U.S. foreign trade U.S. reserve assets Foreign official assets held at Federal Reserve Banks A52 Selected U.S. liabilities to foreign official institutions Reported by Banks in the United States A52 A53 A55 A56 Liabilities to, and claims on, foreigners Liabilities to foreigners Banks’ own claims on foreigners Banks’ own and domestic customers’ claims on foreigners A56 Banks’ own claims on unaffiliated foreigners A57 Claims on foreign countries— Combined domestic offices and foreign branches Reported by Nonbanking Business Enterprises in the United States A58 Liabilities to unaffiliated foreigners A59 Claims on unaffiliated foreigners Securities Holdings and Transactions A60 Foreign transactions in securities A61 Marketable U.S. Treasury bonds and notes— Foreign transactions Interest and Exchange Rates A62 Foreign exchange rates A63 G u id e t o S t a t i s t i c a l R e le a s e s a n d S p e c ia l T a b le s A64 i n d e x t o S t a t i s t i c a l T a b le s A3 Guide to Tabular Presentation Sym bols c e n.a. n.e.c. p r * 0 ABS ATS BIF CD CM O CRA FAM C FFB FH A FH LBB FHLM C Fm H A FNM A F SA FSLIC General and A b b r e v ia t io n s Corrected Estimated N ot available N ot elsew here classified Preliminary R evised (N otation appears on colum n heading when about half o f the figures in that colum n are changed.) Am ounts insignificant in terms o f the last decim al place show n in the table (for exam ple, less than 5 0 0 ,0 0 0 w hen the sm allest unit given is m illions) Calculated to be zero C ell not applicable A sset-backed security A utom atic transfer service Bank insurance fund Certificate o f deposit Collateralized mortgage obligation Com munity Reinvestm ent Act o f 1977 Federal Agricultural M ortgage Corporation Federal Financing Bank Federal H ousing Administration Federal H om e Loan Bank Board Federal H om e Loan M ortgage Corporation Farmers H om e Administration Federal N ational M ortgage A ssociation Farm Service A gency Federal Savings and Loan Insurance Corporation G-7 G -10 G DP GNM A HUD IMF IOs IPCs IRA MMDA M SA NOW OCDs OPEC OTS PMI POs REIT REM ICs RHS RP RTC SCO SD R SIC VA Group o f Seven Group o f Ten Gross dom estic product G overnm ent National M ortgage A ssociation Department o f H ousing and Urban D evelopm ent International Monetary Fund Interest only, stripped, m ortgage-back securities Individuals, partnerships, and corporations Individual retirement account M oney market deposit account M etropolitan statistical area N egotiable order o f withdrawal Other checkable deposits Organization o f Petroleum Exporting Countries O ffice o f Thrift Supervision Private mortgage insurance Principal only, stripped, m ortgage-back securities Real estate investm ent trust Real estate m ortgage investm ent conduits Rural H ousing Service Repurchase agreement R esolution Trust Corporation Securitized credit obligation Special drawing right Standard Industrial C lassification Department o f Veterans Affairs in f o r m a t io n In many o f the tables, com ponents do not sum to totals because o f rounding. M inus signs are used to indicate (1) a decrease, (2) a negative figure, or (3) an outflow. “ U.S. governm ent securities” m ay include guaranteed issues o f U.S. governm ent agencies (the flow o f funds figures also include not fully guaranteed issu es) as w ell as direct obliga tions o f the Treasury. “State and local governm ent” also includes m unicipalities, special districts, and other political subdivisions. A4 Domestic Financial Statistics □ March 2001 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 2000 2000 Monetary or credit aggregate Q lr Q2r Q3r Q4 Aug.1 Sept.r Oct.r Nov.r Dec. 1 2 3 4 Reserves o f depository institutions2 Total ........................ .'........................................................................................ R eq u ire d ............................................................................................................. Nonborrowed .................................................................................................... Monetary base3 ............................................................................................... 1.8 .1 2.4 4.5 - 9 .5 - 5 .9 -1 1 .1 - 3 .9 -7 .1 - 7 .4 - 8 .8 2.7 - 8 .0 - 9 .8 - 5 .7 2.8 - 9 .4 - 8 .0 - 9 .8 1.4 —2.5 - 5 .3 .6 3.3 - 9 .7 - 1 0 .8 - 8 .0 3.2 - 3 .0 -5 .3 1.1 .3 -2 2 .9 - 2 7 .5 - 2 0 .8 7.1 5 6 7 8 Concepts o f money and debt4 M l ........................ ' ............................................................................................. M 2 ........................................................................................................................ M 3 ........................................................................................................................ Debt ................................................................................................................... 2.0 5.8 10.6 5.6 - 1 .8 6.4 9.0 6.1 - 3 .7 5.8 8.9 4.8 - 2 .7 6.7 7.1 4.0 - 4 .7 7.8 10.4 4.1 - 4 .3 8.2 9.2 5.1 .7 5.6 4.6 2.8 - 7 .8 4.3 4.4 4.2 2.3 9.7 12.7 n.a. Nontransaction components 9 In M25................................................................................................................. 10 In M3 only6........................................................................................................ 70 22.6 8.9 15.3 86 16.4 94 8.3 11.6 16.5 11 9 11.4 7 1 2.1 7.9 4.5 11.9 19.7 Time and savings deposits Commercial banks Savings, including MMDAs ..................................................................... Small time7 .................................................................................................... Large time8'9 ................................................................................................. Thrift institutions 14 Savings, including MMDAs ..................................................................... 15 Small time7 .................................................................................................... 16 Large time8 .................................................................................................. 2.5 9.4 20.2 7.8 13.2 17.1 11.8 10.5 11.5 12.0 5.7 2.4 15.4 9.2 18.9 19.4 4.9 -4 .1 5.1 3.3 - 8 .2 10.5 7.0 4.8 16.4 8.6 26.2 - 2 .9 7.2 14.5 1.6 3.3 .4 3.2 11.2 20.8 .6 10.1 16.1 6.1 15.1 22.1 .0 10.0 14.5 4.2 10.2 22.6 - 2 .4 9.5 11.7 - 8 .2 5.6 1.2 Money market mutual funds 17 Retail ................................................................................................................. 18 Institution-only................................................................................................. 17.6 23.0 13.3 18.0 4.2 29.4 12.6 18.7 8.9 27.4 12.6 28.8 13.3 10.2 9.2 12.9 19.6 24.7 Repurchase agreements and eurodollars 19 Repurchase agreements10................................................................................ 20 Eurodollars10...................................................................................................... 20.2 39.8 11.1 15.6 8.2 .6 - 3 .5 9.2 - 9 .8 15.7 2.3 19.3 - 3 .3 7.6 -1 4 .5 3.1 12.7 -1 .3 Debt components4 21 Federal ............................................................................................................... 22 Nonfederal ........................................................................................................ - 4 .8 8.4 - 7 .5 9.6 - 7 .2 7.8 - 7 .9 6.8 - 7 .3 6.8 - 4 .8 7.4 -1 0 .0 5.8 - 9 .2 7.3 11 12 13 1. Unless otherwise noted, rates of change are calculated from average amounts outstand ing during preceding month or quarter. 2. Figures incorporate adjustments for discontinuities, or “ breaks,” associated with regulatory changes in reserve requirements. (See also table 1.20.) 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency component of the money stock, plus (3) (for all quarterly reporters on the “ Report of Transaction Accounts, Other Deposits and Vault Cash” and for all weekly reporters whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 4. Composition of the money stock measures and debt is as follows: M l: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all commercial banks other than those owed to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M l is computed by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately. M2: M l plus (1) savings (including MMDAs), (2) small-denomination time deposits (time deposits— including retail RPs— in amounts of less than $ 100,000), and (3) balances in retail money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, and retail money fund balances, each seasonally adjusted separately, and adding this result to seasonally adjusted M 1. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all n.a. n.a. depository institutions, and (4) eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large time deposits, institutional money fund balances, RP liabilities, and eurodollars, each seasonally adjusted separately, and adding this result to seasonally adjusted M2. Debt: The debt aggregate is the outstanding credit market debt o f the domestic nonfinancial sectors— the federal sector (U.S. government, not including government-sponsored enter prises or federally related mortgage pools) and the nonfederal sectors (state and local governments, households and nonprofit organizations, nonfinancial corporate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and month-averaged (that is, the data have been derived by averaging adjacent month-end levels). 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail money fund balances, each seasonally adjusted separately. 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and term) of U.S. addressees, each seasonally adjusted separately. 7. Small time deposits— including retail RPs— are those issued in amounts of less than $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions are subtracted from small time deposits. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those booked at international banking facilities. 9. Large time deposits at commercial banks less those held by money market funds, depository institutions, the U.S. government, and foreign banks and official institutions. 10. Includes both overnight and term. M oney Stock and Bank Credit 1.11 A5 RESERVES OF DEPOSITORY INSTITUTIONS A ND RESERVE BANK CREDIT1 M illio n s o f d o lla rs Factor Average of daily figures Average of daily figures for week ending on date indicated 2000 2000 Oct. Nov. Dec. Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 S upplying R eserv e F unds 1 Reserve Bank credit outsta n d in g ............................... U.S. government securities2 2 Bought outright— System account3.................... 3 Held under repurchase agreements .................. Federal agency obligations 4 Bought outright ................................................... 5 Held under repurchase agreements .................. 6 Repurchase agreements— triparty4 ........................ 7 Acceptances .............................................................. Loans to depository institutions 8 Adjustment c r e d it................................................. 9 Seasonal credit ..................................................... 10 Special Liquidity Facility c re d it........................ 11 Extended c re d it..................................................... 12 Float ............................................................................ 13 Other Federal Reserve a s s e ts ................................. 14 Gold stock ..................................................................... 15 Special drawing rights certificate a c co u n t................ 16 Treasury currency outstanding................................... 561,406 568,061 578,893 566,709 568,001 573,552 571,891 572,875 578,282 584,314 510,713 0 512,368 0 514,072 0 512,336 0 513,025 0 513,689 0 513,267 0 513,715 0 514,737 0 515,595 0 130 0 12,875 0 130 0 19,549 0 130 0 27,923 0 130 0 17,427 0 130 0 19,618 0 130 0 24,720 0 130 0 23,677 0 130 0 22,621 0 130 0 25,021 0 130 0 31,759 0 120 298 0 0 1,192 36,078 121 157 0 0 962r 34,774 96 114 0 0 1,503 35,054 38 155 0 0 1,071 35,552 416 148 0 0 952 33,712 48 148 0 0 650 34,166 69 121 0 0 520 34,107 4 124 0 0 1,702 34,579 295 121 0 0 2,975 35,002 41 112 0 0 1,182 35,494 11,046 3,200 30,975 11,046 3,200 31,286 11,046 2,652 31,528 11,046 3,200 31,266 11,046 3,200 31,311 11,046 3,200 31,356 11,046 3,200 31,401 11,046 3,200 31,493 11,046 2,343 31,543 11,046 2,200 31,593 571,604 0 248 576,006 0 289 584,582 0 403 574,203 0 274 576,550 0 289 580,489 0 315 579,278 0 353 580,186 0 404 583,205 0 404 589,803 0 416 5,338 95 6,733 251 15,717 6,640 5,093 86 6,767 234 17,529 7,589 5,758 115 6,959 355 18,401 7,545 5,279 79 6,947 200 17,528 7,709 5,175 92 6,600 238 17,755 6,859 5,275 81 6,606 263 18,272 7,409 5,382 75 6,980 244 18,507 6,836 8,105 160 6,696 222 18,581 5,840 4,340 103 7,236 258 18,417 8,579 Dec. 20 Dec. 27 A bsorbing R eserve Funds 17 Currency in circulation ............................................... 18 Reverse repurchase agreements— triparty4 .............. 19 Treasury cash holdings ............................................... Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury ..................................................................... 21 Foreign ....................................................................... 22 Service-related balances and ad ju stm e n ts........... 23 O t h e r ............................................................................ 24 Other Federal Reserve liabilities and capital ......... 25 Reserve balances with Federal Reserve Banks' . . . 4,940 74 6,758 229 18,027 8,321r End-of-month figures Wednesday figures Oct. Nov. Dec. Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 S upplying R eserve Funds 1 Reserve Bank credit o u tsta n d in g ............................... U.S. government securities2 2 Bought outright— System account3 .................. 3 Held under repurchase agreements .................. Federal agency obligations 4 Bought outright ................................................... 5 Held under repurchase agreements .................. 6 Repurchase agreements— triparty4 ........................ 7 Acceptances................................................................ Loans to depository institutions 8 Adjustment c r e d it................................................. 9 Seasonal credit ..................................................... 10 Special Liquidity Facility c re d it........................ 11 Extended c re d it...................................................... 12 Float ............................................................................ 13 Other Federal Reserve a s s e ts ................................. 14 Gold stock ..................................................................... 15 Special drawing rights certificate a c c o u n t................ 16 Treasury currency outstanding.................................... 566,215 575,908 593,092 570,798 573,538 574,811 570,733 581,584 579,269 597,301 508,961 0 512,327 0 511,703 0 511,748 0 513,813 0 514,308 0 513,100 0 515,115 0 514,539 0 515,491 0 130 0 19,440 0 130 0 27,270 0 130 0 43,375 0 130 0 25,795 0 130 0 24,615 0 130 0 25,630 0 130 0 22,525 0 130 0 27,260 0 130 0 25,710 0 130 0 43,985 0 29 219 0 0 1,438 35,999 6 130 0 0 2,096 33,949 33 77 0 0 901 36,873 251 156 0 0 95 32,622 1 145 0 0 874 33,959 286 152 0 0 -1 3 6 34,440 13 121 0 0 524 34,319 5 129 0 0 4,105 34,841 5 120 0 0 3,541 35,225 21 96 0 0 1,828 35,750 11,046 3,200 31,093 11,046 3,200 31,401 11,046 2,200 31,643 11,046 3,200 31,266 11,046 3,200 31,311 11,046 3,200 31,356 11,046 3,200 31,401 11,046 3,200 31,493 11,046 2,200 31,543 11,046 2,200 31,593 572,397 0 289 579,782 0 344 593,694 0 450 575,884 0 285 580,287 0 311 581,077 0 344 580,379 0 403 582,550 0 412 586,969 0 410 593,356 0 450 5,360 115 6,829 245 16,416 9,903 4,382 104 6,606 276 18,199 11,861 5,149 216 7,428 1,382 17,962 11,701 4,850 90 6,947 266 17,318 10,670 4,413 71 6,600 233 17,669 9,511 5,215 89 6,606 244 18,074 5,370 4,947 72 6,980 248 18,400 13,714 4,781 227 6,696 211 18,140 6,625 5,320 83 7,236 235 18,062 17,396 A bsorbing R eserv e F unds 17 Currency in circulation ............................................... 18 Reverse repurchase agreements— triparty4 ............. 19 Treasury cash holdings ............................................... Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury ..................................................................... 21 Foreign ....................................................................... 22 Service-related balances and ad ju stm e n ts........... 23 O t h e r ............................................................................ 24 Other Federal Reserve liabilities and capital ......... 25 Reserve balances with Federal Reserve Banks5 . . . 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 2. Includes securities loaned— fully guaranteed by U.S. government securities pledged with Federal Reserve Banks— and excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. 3. Includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. 5,056 73 6,758 227 17,913 8,964r 4. Cash value of agreements arranged through third-party custodial banks. These agreements are collateralized by U.S. government and federal agency securities. 5. Excludes required clearing balances and adjustments to compensate for float, A6 Domestic Financial Statistics □ March 2001 1.12 RESERVES AND BORROW INGS D epository Institutions' Millions of dollars Prorated monthly averages of biweekly averages Reserve classification 1 2 3 4 5 6 7 8 9 10 11 12 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 borrowing at Reserve B a n k s ................................. A djustm ent....................................................................... S easonal........................................................................... Special Liquidity Facility8 ............................................ Extended credit9 .............................................................. 1998 1999 2000 2000 Dec. Dec. Dec. June July Aug. Sept. Oct. Nov. Dec. 9,026 44,294 36,183 8,111 45,209 43,695 1,514 117 101 15 0 0 5,263 60,619 36,392 24,227 41,655 40,348 1,307 320 179 67 74 0 7,160 45,120 31,381 13,739 38,541 37,215 1,325 210 99 111 0 0 6,460 44,560 32,757 11,802 39,217 38,153 1,064 479 90 389 0 0 6,582 45,473 33,086 12,387 39,668 38,600 1,068 570 60 510 0 0 6,875 45,319 32,611 12,708 39,486 38,471 1,014 579 25 554 0 0 6,829 44,807 32,429 12,378 39,257 38,155 1,102 477 50 427 0 0 6,782 45,178 32,072 13,106r 38,854 37,725 1,129 418 119 299 0 0 7,157 44,546r 31,632r 12,914r 38,789r 37,587r 1,202 283 124 159 0 0 7,160 45,120 31,381 13,739 38,541 37,215 1,325 210 99 111 0 0 Biweekly averages of daily figures for two-week periods ending on dates indicated 1 2 3 4 5 6 7 8 9 10 11 12 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 borrowing at Reserve B a n k s ................................. Adjustm ent....................................................................... S easonal........................................................................... Special Liquidity Facility8 ............................................ Extended credit9 .............................................................. Sept. 6 Sept. 20 Oct. 4 Oct. 18 Nov. 1 Nov. 15 Nov. 29r Dec. 13r Dec. 27 Jan. 10 6,911 44,097 32,184 11,913 39,095 38,118 977 604 45 559 6,578 44,823 32,077 12,746 38,655 37,612 1,043 473 70 403 7,131 45,210 33,068 12,142 40,198 38,938 1,260 409 26 383 6,502 45,778 31,601 14,177 38,103 37,073 1,030 480 167 313 6,976 44,523r 32,274 12,249r 39,250 38,056 1,194 355 97 259 6,709 44,633r 31,056 13,577r 37,765 36,762 1,003 190 25 165 7,620 44,539 32,261 12,278 39,881 38,474 1,407 380 232 148 7,131 43,452 30,255 13,197 37,386 36,253 1,133 159 37 123 7,208 46,220 32,370 13,850 39,578 38,124 1,454 285 169 117 7,085 46,696 31,579 15,117 38,664 37,165 1,499 110 56 55 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board’s H.3 (502) weekly statistical release. For ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted. 2. Excludes required clearing balances and adjustments to compensate for float and includes other off-balance-sheet “as-o f ’ adjustments. 3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by those banks and thrift institutions that are not exempt from reserve requirements. Dates refer to the maintenance periods in which the vault cash can be used to satisfy reserve require ments. 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. 0 0 5. Total vault cash (line 2) less applied vault cash (line 3). 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash (line 3). 7. Total reserves (line 5) less required reserves (line 6). 8. Borrowing at the discount window under the terms and conditions established for the Century Date Change Special Liquidity Facility in effect from October 1, 1999, through April 7, 2000. 9. Consists of borrowing at the discount window under the terms and conditions estab lished for the extended credit program to help depository institutions deal with sustained liquidity pressures. Because there is not the same need to repay such borrowing promptly as with traditional short-term adjustment credit, the money market effect of extended credit is similar to that of nonborrowed reserves. Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES P e rc e n t p e r y e a r Current and previous levels B o s to n .................... New Y o r k ............. Philadelphia ......... Cleveland ............. Richmond ............. A tlan ta .................... C h ic a g o .................. St. Louis ................ Minneapolis ......... Kansas C ity ........... D allas...................... San Francisco . . . . On 2/16/01 Effective date Previous rate 1/31/01 1/31/01 1/31/01 1/31/01 1/31/01 1/31/01 5.50 5.50 5.50 5.50 5.50 5.50 1/31/01 2/1/01 1/31/01 2/1/01 1/31/01 1/31/01 5.50 5.50 5.50 5.50 5.50 5.50 5.00 5.00 Extended credit3 Seasonal credit2 Adjustment credit1 Federal Reserve Bank On 2/16/01 Effective date Previous rate On 2/16/01 Effective date Previous rate 5.55 2/8/01 5.80 6.05 2/8/01 6.30 5.55 2/8/01 5.80 6.05 2/8/01 6.30 Range of rates for adjustment credit in recent years4 ^ange (or evel)— All '.R. Banks In effect Dec. 31,1977 6 9 90 May 11 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 1978— Jan. V> 3 III Aug. 91 Sept. 77 Oct. 16 ?0 Nov. 1 3 July 1979—July 90 Aug. IV ?l) Sept. 19 -U Oct. 8 10 10 10-10.5 10.5 10.5-11 11 11-12 12 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 1980— Feb. 15 19 May 79 311 June 13 16 July n 74 Sept. 76 Nov. 1 / Dec. 5 8 12-13 13 12-13 12 11-12 11 10-11 10 11 12 12-13 13 13 13 13 12 11 11 10 10 11 12 13 13 5 8 Nov. 7 6 Dec. 4 13-14 14 13-14 13 12 14 14 13 13 12 -July 20 23 Aug. 2 3 16 27 30 11.5-12 11.5 11-11.5 11 10.5 10-10.5 10 1981— May 11.5 11.5 11 11 10.5 10 10 Range (or level)— All F.R. Banks F.R. Bank of N.Y. 9.5-10 9.5 9-9.5 9 8.5-9 8.5-9 8.5 9.5 9.5 9 9 9 8.5 8.5 ............................... ............................... ............................... ............................... ............................... 8.5-9 9 8.5-9 8.5 8 9 9 8.5 8.5 8 1985— May 2 0 ............................... 2 4 ............................... 7.5-8 7.5 7.5 7.5 1986— Mar. 7 ............................... 1 0 ............................... Apr. 21 ............................... 23................................. July 11 ............................... Aug. 21 ............................... 2 2 ............................... 7-7.5 7 6.5-7 6.5 6 5.5-6 5.5 7 7 6.5 6.5 6 5.5 5.5 1987— Sept. 4 ............................... 11 ............................... 5.5-6 6 6 6 1988— Aug. 9 ............................... 11 ............................... 6-6.5 6.5 6.5 6.5 Effective date 1982— Oct. 1 2 ............................... 13 ............................... Nov. 22 ............................... 2 6 ............................... Dec. 14 ............................... 15 ............................... 17 ............................... F.R. Bank of N.Y. 3-3.5 3.5 3.5-4 4 4-4.75 4.75 3.5 3.5 4 4 4.75 4.75 1 9 4.75-5.25 5.25 5.25 5.25 1996— Jan. 31 Feb. 5 5.00-5.25 5.00 5.00 5.00 1998— Oct. 15 16 Nov. 17 19 . 4.75-5.00 4.75 4.50-4.75 4.50 4.75 4.75 4.50 4.50 1999— Aug. 24 . 26 Nov. 16 . 18 4.50^1.75 4.75 4.75-5.00 5.00 4.75 4.75 4.75 5.00 2000— Feb. . . . . . 5.00-5.25 5.25 5.25-5.50 5.50 5.50-6.00 6.00 5.25 5.25 5.50 5.50 5.50 6.00 2001— Jan. 3. 4 5. 31 1. 5.75-6.00 5.50-5.75 5.50 5.00-5.50 5.00 5.75 5.50 5.50 5.00 5.00 5.00 5.00 1994— May 17 18 Aug. 16 18 Nov. 15 17 1995— Feb. 1984— Apr. 9 13 Nov. 21 26 Dec. 2 4 1989— Feb. 2 4 ............................... 2 7 ............................... 1990—Dec. 1 9 ............................... 1991—Feb. Apr. May Sept. Nov. Dec. 1992—July 6.5-7 7 2 4 Mar. 21 23 May 16 19 7 7 6.5 6.5 1 ............................... 4 ............................... 3 0 ............................... 2 ............................... 1 3 ............................... 1 7 ............................... 6 ............................... 7 ............................... 2 0 ............................... 2 4 ............................... 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 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 o f intrayearly movements in their deposits and loans and that cannot be met through special industry lenders. The discount rate on seasonal credit takes into account rates charged by market sources of funds and ordinarily is reestablished on the first business day of each two-week reserve maintenance period; however, it is never less than the discount rate applicable to adjustment credit. 3. May be made available to depository institutions when similar assistance is not reasonably available from other sources, including special industry lenders. Such credit may be provided when exceptional circumstances (including sustained deposit drains, impaired access to money market funds, or sudden deterioration in loan repayment performance) or practices involve only a particular institution, or to meet the needs of institutions experiencing difficulties adjusting to changing market conditions over a longer period (particularly at times of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is charged on extended-credit loans outstanding less than thirty days; however, at the discretion (or level)— All F.R. Banks Effectiv Feb. In effect Feb. 16, 3 3 o f the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a flexible rate somewhat above rates charged on market sources of funds is charged. The rate ordinarily is reestablished on the first business day of each two-week reserve maintenance period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis points. 4. For earlier data, see the following publications of the Board of Governors: Banking and Monetary Statistics, 1914-1941, and 1941-1970\ and the Annual Statistical Digest, 19701979. In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit borrowings by institutions with deposits of $500 million or more that had borrowed in successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the surcharge was changed from a calendar quarter to a moving thirteen-week period. The surcharge was eliminated on Nov. 17, 1981. A8 Domestic Financial Statistics □ March 2001 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Requirement Type of deposit Percentage of deposits Effective date 1 2 Net transaction accounts2 $0 million-$42.8 million3 ............................................................................................................................................................................... More than $42.8 million4 ............................................................................................................................................................................... 3 10 12/28/00 12/28/00 3 Nonpersonal time deposits5............................................................................................................................................................................. 0 12/27/90 4 Eurocurrency liabilities6................................................................................................................................................................................... 0 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 the M onetary Control Act of 1980, depository institutions include commercial banks, savings banks, savings and loan associations, credit unions, agencies and branches of foreign banks, and Edge Act corporations. 2. Transaction accounts include all deposits against which the account holder is permitted to make withdrawals by negotiable or transferable instruments, payment orders of with drawal, or telephone or preauthorized transfers for the purpose of maiking payments to third persons or others. However, accounts subject to the rules that permit no more than six preauthorized, automatic, or other transfers per month (of which no more than three may be by check, draft, debit card, or similar order payable directly to third parties) are savings deposits, not transaction accounts. 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts against which the 3 percent reserve requirement applies be modified annually by 80 percent of the percentage change in transaction accounts held by all depository institutions, determined as of June 30 of each year. Effective with the reserve maintenance period beginning December 28, 2000, for depository institutions that report weekly, and with the period beginning January 18, 2001, for institutions that report quarterly, the amount was decreased from $44.3 million to $42.8 million. Under the G arn-St Germain Depository Institutions Act of 1982, the Board adjusts the amount of reservable liabilities subject to a zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage increase in the total reservable liabilities of all depository institutions, measured on an annual basis as of June 30. No corresponding adjustment is made in the event of a decrease. The exemption applies only to accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve maintenance period beginning December 28, 2000, for depository institutions that report weekly, and with the period beginning January 18, 2001, for institutions that report quarterly, the exemption was raised from $5.0 million to $5.5 million. 4. The reserve requirement was reduced from 12 percent to 10 percent on Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that report quarterly. 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits with an original maturity of less than 1 x/ i years was reduced from 3 percent to 1 'A percent for the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on nonpersonal time deposits with an original maturity o f less than 1 Vi years was reduced from 3 percent to zero on Jan. 17, 1991. The reserve requirement on nonpersonal time deposits with an original maturity of 1V6 years or more has been zero since Oct. 6, 1983. 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero in the same manner and on the same dates as the reserve requirement on nonpersonal time deposits with an original maturity of less than 1‘/2 years (see note 5). Policy Instruments A9 1.17 FEDERA L RESERVE OPEN M ARKET T R A N SA CTIO N S1 Millions of dollars 2000 Type of transaction and maturity 1997 1998 1999 May June July Aug. Sept. Oct. Nov. U.S. T reasury S ecu rities 2 Outright transactions (excluding matched transactions) Treasury bills Gross purchases .............................................................. Gross sales ....................................................................... Exchanges .......................................................................... For new b ills ..................................................................... R edem ptions..................................................................... Others within one year Gross purchases .............................................................. Gross sales ....................................................................... Maturity sh ifts................................................................... Exchanges ......................................................................... R edem ptions..................................................................... One to five years Gross purchases .............................................................. Gross sales ....................................................................... Maturity sh ifts................................................................... Exchanges ......................................................................... Five to ten years Gross purchases .............................................................. Gross sales ....................................................................... Maturity sh ifts................................................................... Exchanges ......................................................................... More than ten years Gross purchases .............................................................. Gross sales ....................................................................... Maturity sh ifts................................................................... Exchanges ......................................................................... All maturities Gross purchases .............................................................. Gross sales ....................................................................... R edem ptions..................................................................... 9,147 0 435,907 435,907 0 3,550 0 450,835 450,835 2,000 0 0 464,218 464,218 0 0 0 36,386 36,386 2,297 0 0 44,008 44,008 4,188 1,825 0 33,718 33,718 4,902 531 0 42,797 42,797 3,438 231 0 37,006 37,006 3,898 779 0 38,142 38,142 2,656 2,507 0 45,182 45,182 1,021 5,549 0 41,716 -2 7 ,4 9 9 1,996 6,297 0 46,062 -4 9 ,4 3 4 2,676 11,895 0 50,590 -5 3 ,3 1 5 1,429 164 0 13,063 -1 2,633 0 1,875 0 4,672 -3 ,1 0 9 0 1,284 0 5,152 -3 ,3 3 3 367 2,770 0 7,040 -7 ,3 9 6 887 716 0 0 0 0 0 0 8,663 -6 ,6 0 8 787 580 0 7,957 -7 ,0 1 2 780 20,080 0 -3 7 ,9 8 7 20,274 12,901 0 -3 7 ,7 7 7 37,154 19,731 0 -4 4 ,0 3 2 42,604 890 0 -1 0 ,3 3 4 10,063 706 0 -4 ,6 7 2 3,109 2,259 0 -5 ,1 5 2 3,333 2,508 0 -3 ,4 3 9 5,418 2,385 0 0 0 734 0 -8 ,6 6 3 6,608 1,332 0 -5 ,9 9 7 5,737 3,449 0 -1 ,9 5 4 5,215 2,294 0 -5 ,9 0 8 7,439 4,303 0 -5 ,8 4 1 7,583 0 0 -1 ,5 5 2 2,570 0 0 0 0 0 0 0 0 1,914 0 -3 ,6 0 1 1,254 448 0 0 0 0 0 0 0 510 0 -6 9 9 1,275 5,897 0 -1 ,7 7 5 2,360 4,884 0 -2 ,3 7 7 4,842 9,428 0 -7 1 7 3,139 528 0 -1 ,1 7 7 0 1,151 0 0 0 500 0 0 0 727 0 0 724 547 0 0 0 982 0 0 0 0 0 -1 ,2 6 1 0 44,122 0 1,996 29,926 0 4,676 45,357 0 1,429 1,582 0 2,297 3,732 0 4,188 5,868 0 5,269 8,450 0 4,325 4,326 0 3,898 2,495 0 3,443 4,929 0 1,802 Matched transactions 26 Gross purchases ................................................................... 27 Gross sales ............................................................................ 3,591,210 3,593,530 4,430,457 4,434,358 4,413,430 4,431,685 357,355 356,640 368,396 369,739 344,935 344,384 381,349 381,475 335,321 334,530 344,920 346,428 351,391 351,232 Repurchase agreements 28 Gross purchases ................................................................... 29 Gross sales ............................................................................ 810,485 809,268 512,671 514,186 281,599 301,273 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30 Net change in U.S. Treasury se c u ritie s ........................... 41,022 19,835 5,999 -1 ,8 0 0 1,150 3,999 1,219 -2 ,4 5 7 3,286 Outright transactions 31 Gross purchases ................................................................... 32 Gross sales ............................................................................ 33 R edem ptions.......................................................................... 0 0 1,540 0 25 322 0 0 157 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 0 0 0 0 0 0 Repurchase agreements 34 Gross purchases ................................................................... 35 Gross sales ............................................................................ 160,409 159,369 284,316 276,266 360,069 370,772 0 0 0 0 0 0 0 0 0 0 0 0 0 0 36 Net change in federal agency o b lig a tio n s...................... -5 0 0 7,703 -1 0 ,8 5 9 0 0 0 0 -1 0 0 0 Reverse repurchase agreements 37 Gross purchases ................................................................... 38 Gross sales ............................................................................ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases ................................................................... 40 Gross sales ............................................................................ 0 0 0 0 304,989 164,349 107,375 105,885 70,850 70,315 66,485 75,925 47,265 46,230 66,080 67,285 64,428 62,308 87,125 79,295 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -1 Federal a g e n c y O bligations 41 Net change in triparty o b lig a tio n s.................................... 0 0 140,640 1,490 535 -9 ,4 4 0 1,035 -1 ,2 0 5 2,120 7,830 42 Total net change in System Open Market A ccount. . . 40,522 27,538 135,780 1,489 -1 ,2 6 5 -8 ,2 9 0 5,034 4 -3 37 11,116 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. 2. Transactions exclude changes in compensation for the effects of inflation on the principal of inflation-indexed securities. A10 1.18 Domestic Financial Statistics □ March 2001 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statem ents1 Millions of dollars Account Nov. 29 Dec. 6 Wednesday End of month 2000 2000 Dec. 13 Dec. 20 Dec. 27 Oct. 31 Nov. 30 Dec. 31 Consolidated condition statement ASSETS 11,046 3,200 892 11,046 3,200 914 11,046 3,200 948 11,046 2,200 954 11,046 2,200 946 11,046 3,200 887 11,046 3,200 901 11,046 2,200 949 438 0 0 134 0 0 133 0 0 125 0 0 117 0 0 248 0 0 136 0 0 110 0 0 Triparty Obligations 7 Repurchase agreements— triparty2 ................................................. 25,630 22,525 27,260 25,710 43,985 19,440 27,270 43,375 Federal agency obligations3 8 Bought outright.................................................................................. 9 Held under repurchase agreements ............................................... 130 0 130 0 130 0 130 0 130 0 130 0 130 0 130 0 1 Gold certificate account .................................................................. 2 Special drawing rights certificate a c c o u n t................................... 3 C o in ...................................................................................................... Loans 4 To depository institutions................................................................ 5 O t h e r ................................................................................................... 10 Total U.S. TYeasury securities3 ................................................... 514,308 513,100 515,115 514,539 515,491 508,961 512,327 511,703 11 Bought outright4 ................................................................................ 12 B ills ................................................................................................. 14 Bonds ............................................................................................. 15 Held under repurchase agreements .............................................. 514,308 183,817 237,804 92,687 0 513,100 183,384 237,028 92,688 0 515,115 183,206 239,127 92,783 0 514,539 182,627 239,129 92,783 0 515,491 182,530 240,176 92,784 0 508,961 180,971 235,603 92,387 0 512,327 182,615 237,025 92,687 0 511,703 178,741 240,178 92,784 0 16 Total loans and secu rities.............................................................. 540,506 535,889 542,639 540,504 559,723 528,779 539,863 555,318 17 Items in process of collection ....................................................... 7,198 1,441 9,378 1,441 12,048 1,442 12,334 1,452 10,087 1,455 10,945 1,433 5,237 1,440 7,105 1,461 20 All other6 ............................................................................................. 15,323 17,677 15,354 17.444 15,360 17,970 15,367 13,353 15,374 18,894 15,297 19,616 15,348 17,083 15,670 19,766 21 Total a ssets......................................................................................... 597,282 594,665 604,654 602,210 619,724 591,203 594,118 613,514 22 Federal Reserve n o tes....................................................................... 23 Reverse repurchase agreements— triparty2 ................................... 550,957 0 550,295 0 552,417 0 556,790 0 563,160 0 542,479 0 549,627 0 563,450 0 24 Total d eposits.................................................................................... 21,718 17,702 26,084 19,084 30,426 22,793 20,621 25,792 25 Depository institutions ..................................................................... 26 US. Treasury— General account ................................................... 28 O t h e r .................................................................................................... 16,362 5,056 73 227 12,155 5,215 89 244 20,817 4,947 72 248 13,866 4,781 227 211 24,787 5,320 83 235 17,074 5,360 115 245 15,858 4,382 104 276 19,045 5,149 216 1,382 29 Deferred credit items ....................................................................... 30 Other liabilities and accrued dividends7........................................ 6,694 4,409 8,594 4.397 7,752 4,622 8,197 4,375 8,077 4,341 9,514 4,325 5,672 4,590 6,310 4,170 31 Total liab ilities.................................................................................. 583,778 580,988 590,876 588,446 606,003 579,111 580,510 599,723 33 Surplus ............................................................................................... 34 Other capital accounts .................................................................... 7,071 2,679 3,754 7,088 2,679 3,910 7,103 2,679 3,995 7,022 2,679 4,063 7,024 2,679 4,018 6,986 2,679 2,426 7,076 2,679 3,853 6,997 6,794 0 35 Total liabilities and capital accounts ........................................ 597,282 594,665 604,654 602,210 619,724 591,203 594,118 613,514 M emo 36 Marketable U.S. Treasury securities held in custody for foreign and international ac co u n ts........................................ n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Other assets L iabilities C apital A c counts Federal Reserve note statement 37 Federal Reserve notes outstanding (issued to B a n k s)............... 38 LESS: Held by Federal Reserve Banks ................................... 39 Federal Reserve notes, n e t ......................................................... Collateral held against notes, net 40 Gold certificate account .................................................................. 41 Special drawing rights certificate a c c o u n t................................... 42 Other eligible a s s e ts ......................................................................... 44 Total collateral.................................................................................. 756,715 205,757 550,957 755.565 205,270 550,295 754,835 202.417 552.417 753.551 196.761 556.790 752,359 189,199 563,160 760,004 217,525 542,479 756,527 206,900 549,627 751,714 188,264 563,450 11.046 3,200 0 536.712 11,046 3,200 295 535,755 11.046 3,200 0 538,172 11,046 2,200 3,165 540,379 11,046 2,200 0 549,914 11,046 3,200 0 528,233 11,046 3,200 0 535,381 11,046 2,200 0 550,205 550,957 550,295 552,417 556,790 563,160 542,479 549,627 563,450 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. Cash value of agreements arranged through third-party custodial banks. 3. Face value of the securities. 4. Includes securities loaned— fully guaranteed by U.S. Treasury securities pledged with Federal Reserve Banks— and includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. 5. Valued monthly at market exchange rates. 6. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury bills maturing within ninety days. 7. Includes exchange-translation account reflecting the monthly revaluation at market exchange rates of foreign exchange commitments. Federal Reserve Banks A ll 1.19 FEDERAL RESERVE BANKS Maturity Distribution o f Loan and Security Holding Millions of dollars Type of holding and maturity Wednesday End of month 2000 2000 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 Oct. 31 Nov. 30 Dec. 31 1 Total l o a n s .................................................................................... 438 134 133 125 117 248 136 110 2 Within fifteen days' ..................................................................... 3. Sixteen days to ninety days ..................................................... 4. 91 days to 1 y e a r ......................................................................... 421 18 0 41 93 0 34 99 0 119 6 0 110 7 0 152 96 0 86 50 0 96 14 0 5 Total U.S. Treasury securities2 .............................................. 514,308 513,100 515,115 514,539 515,491 508,961 512,327 511,702 Within fifteen days1 ..................................................................... Sixteen days to ninety d a y s ....................................................... Ninety-one days to one year ..................................................... One year to five years ................................................................ Five years to ten y e a r s ................................................................ More than ten years ..................................................................... 15,478 114,311 126,364 132,581 54,681 70,893 17,413 115,290 123,073 131,746 54,684 70,894 13,288 118,117 125,612 131,746 55,457 70,895 18,935 111,849 125,654 131,746 55,459 70,895 19,889 110,832 125,620 132,792 55,461 70,896 12,494 109,123 131,002 130,667 53,530 72,145 4,706 119,433 130,868 131,745 54,682 70,893 18,053 108,961 125,539 132,792 55,461 70,896 12 Total federal agency ob lig a tio n s............................................ 130 130 130 130 130 130 130 130 13 14 15 16 17 18 0 0 0 30 100 0 0 0 0 130 0 0 0 0 0 130 0 0 0 0 0 130 0 0 0 0 0 130 0 0 0 0 0 30 100 0 0 0 0 30 100 0 0 0 0 130 0 0 6 7 8 9 10 11 Within fifteen days1 ..................................................................... Sixteen days to ninety d a y s ....................................................... Ninety-one days to one year ..................................................... One year to five years ................................................................ Five years to ten y e a r s ................................................................ More than ten y e a r s ..................................................................... 1. Holdings under repurchase agreements are classified as maturing within fifteen days in accordance with maximum maturity of the agreements. 2. Includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. A 12 Domestic Financial Statistics □ March 2001 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE' Billions of dollars, averages of daily figures 2000 Item 1997 Dec. 1998 Dec. 1999 Dec. 2000 Dec. May June Total rese rv e s'.................................................................................... Nonborrowed reserves4 ..................................................................... Nonborrowed reserves plus extended credit5 ............................... Required re s e rv e s .............................................................................. Monetary base6 .................................................................................. Aug. Sept. Oct. Nov. Dec. 39.94 39.37 39.37 38.93 577.43r 39.86 39.38 39.38 38.76 579.01r 39.54 39.12 39.12 38.41 580.55r 39.441' 39.16 39.16 38.24 580.69r 38.69 38.48 38.48 37.36 584.10 Seasonally adjusted ADJUSTED FOR C hanges in R eserve R equ irem ents 2 1 2 3 4 5 July 46.87 46.54 46.54 45.18 479.37r 45.19 45.07 45.07 43.68 513.19r 41.74 41.42 41.42 40.44 592.03r 38.69 38.48 38.48 37.36 584.10 41.36 41.00 41.00 40.41 573.931" 39.96 39.48 39.48 38.89 575.06r 40.26 39.69 39.69 39.19 576.75r Not seasonally adjusted 6 7 8 9 10 Total reserves7 .................................................................................... Nonbonrowed reserves ..................................................................... Nonborrowed reserves plus extended credit5 ............................... Required reserves8.............................................................................. Monetary base9 .................................................................................. 48.01 47.69 47.69 46.33 484.98 45.31 45.19 45.19 43.80 518.27 41.89 41.57 41.57 40.58 600.63 38.58 38.37 38.37 37.26 590.20 41.58 41.22 41.22 40.64 573.26 39.24 38.76 38.76 38.18 574.55 39.70 39.13 39.13 38.63 577.19 39.52 38.94 38.94 38.50 576.60 39.29 38.82 38.82 38.19 576.79 38.90 38.48 38.48 37.77 578.34 38.83r 38.55 38.55 37.63 582.36r 38.58 38.37 38.37 37.26 590.20 47.92 47.60 47.60 46.24 491.79 1.69 .32 45.21 45.09 45.09 43.70 525.06 1.51 .12 41.66 41.33 41.33 40.35 607.94 1.31 .32 38.54 38.33 38.33 37.22 597.12 1.33 .21 41.56 41.20 41.20 40.62 580.09 .94 .36 39.22 38.74 38.74 38.15 581.44 1.06 .48 39.67 39.10 39.10 38.60 583.99 1.07 .57 39 49 38.91 38.91 38.47 583.34 1.01 .58 39 26 38.78 38.78 38.16 583.48 1.10 .48 38.85 38.44 38.44 37.73 585.07 1.13 .42 38.79 38.51 38.51 37.59 589.12r 1.20 .28 38.54 38.33 38.33 37.22 597.12 1.33 .21 Not A djusted for C hanges in r eser v e R e q u ir em en ts 10 12 13 14 15 16 17 Nonborrowed reserves ..................................................................... Nonborrowed reserves plus extended credit5 ............................... Required re s e rv e s ............................................................................. Monetary base12.................................................................................. Excess reserves13................................................................................ Borrowings from the Federal R e se rv e .......................................... 1. Latest monthly and biweekly figures are available from the Board’s H.3 (502) weekly statistical release. Historical data starting in 1959 and estimates of the effect on required reserves of changes in reserve requirements are available from the Money and Reserves Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. 2. Figures reflect adjustments for discontinuities, or “breaks,” associated with regulatory changes in reserve requirements. (See also table 1.10.) 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted required reserves (line 4) plus excess reserves (line 16). 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, break-adjusted total reserves (line 1) less total borrowings of depository institutions from the Federal Reserve (line 17). 5. Extended credit consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions deal with sustained liquidity pressures. Because there is not the same need to repay such borrowing promptly as with traditional short-term adjustment credit, the money market effect of extended credit is similar to that of nonborrowed reserves. 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency component of the money stock, plus (3) (for all quarterly reporters on the “Report of Transaction Accounts, Other Deposits and Vault Cash” and for all those weekly reporters whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess reserves (line 16). 8. To adjust required reserves for discontinuities that are due to regulatory changes in reserve requirements, a multiplicative procedure is used to estimate what required reserves would have been in past periods had current reserve requirements been in effect. Breakadjusted required reserves include required reserves against transactions deposits and nonper sonal 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 o f Transaction Accounts, Other Deposits and Vault C ash” and for all those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with regulatory changes in reserve requirements. 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve requirements. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for all quarterly reporters on the “ Report of Transaction Accounts, Other Deposits and Vault Cash” and for all those weekly reporters whose vault cash exceeds their required reserves) the difference between current vault cash and the amount applied to satisfy current reserve requirements. Since February 1984, currency and vault cash figures have been measured over the computation periods ending on Mondays. 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). M onetary and C redit A ggregates 1.21 A13 MONEY STOCK AND DEBT M EASURES1 Billions of dollars, averages of daily figures 2000 Item 1997 Dec.r 1998 Dec.r 1999 Dec.r 2000 Dec. Sept.r Oct.r Nov.r Dec. Seasonally adjusted 1 2 3 4 Measures2 M l ........................................................................................................ M 2 ........................................................................................................ M 3 ........................................................................................................ Debt .................................................................................................... 1,073.4 4,029.9 5,428.3 15,223.1 1,097.0 4,382.6 6,028.2 16,276.0 1,124.3 4,648.2 6,524.1 17,376.7 1,091.3 4,945.7 7,090.5 n.a. 1,095.7 4,865.3 6,963.9 18,078.0 1,096.3 4,888.2 6,990.5 18,119.8 1,089.2 4,905.9 7,016.0 18,183.2 1,091.3 4,945.7 7,090.5 n.a. 5 6 7 8 M l components Currency3 ........................................................................................... Travelers checks4 .............................................................................. Demand deposits5 .............................................................................. Other checkable deposits6 .............................................................. 424.3 8.1 395.4 245.7 459.2 8.2 379.4 250.1 516.7 8.2 355.6 243.7 530.5 8.0 313.7 239.1 524.7 8.9 323.6 238.5 526.4 8.4 322.1 239.4 528.0 8.0 315.2 238.0 530.5 8.0 313.7 239.1 Nontransaction components 9 In M27 ............................................................................................... 10 In M3 only8 ....................................................................................... 2,956.6 1,398.3 3,285.6 1,645.7 3,523.9 1,875.9 3,854.4 2,144.7 3,769.6 2,098.6 3,791.8 2,102.3 3,816.7 2,110.1 3,854.4 2,144.7 Commercial banks 11 Savings deposits, including MMDAs .......................................... 12 Small time deposits9 ....................................................................... 13 Large time deposits10- 11 ................................................................ 1,021.1 625.5 517.7 1,185.8 626.4 575.5 1,287.0 635.2 648.8 1,420.6 698.8 720.) 1,383.5 687.9 706.7 1,389.4 689.8 701.9 1,401.5 693.8 704.7 1,420.6 698.8 720.1 Thrift institutions 14 Savings deposits, including MMDAs .......................................... 15 Small time deposits9 ....................................................................... 16 Large time deposits1 0 ....................................................................... 376.8 342.9 85.5 414.1 325.8 88.7 449.3 320.9 91.3 452.7 347.0 103.7 455.1 339.8 100.7 456.7 342.7 102.6 455.8 345.4 103.6 452.7 347.0 103.7 Money market mutual funds 17 R e ta il.................................................................................................... 18 Institution-only .................................................................................. 590.2 389.9 733.5 530.0 831.6 622.0 935.3 767.7 903.3 737.9 913.3 744.2 920.3 752.2 935.3 767.7 Repurchase agreements and eurodollars 19 Repurchase agreements1 2 ................................................................ 20 Eurodollars12...................................................................................... 255.3 150.0 299.6 151.8 343.0 170.8 362.5 190.8 364.1 189.3 363.1 190.5 358.7 191.0 362.5 190.8 Debt components 21 Federal debt ...................................................................................... 22 Nonfederal debt ................................................................................ 3,800.6 11,422.5 3,751.2 12,524.7 3,660.2 13,716.5 3,475.0 14,603.1 3,446.0 14,673.9 3,419.7 14,763.5 n.a. n.a. n.a. n.a. Not seasonally adjusted 23 24 25 26 Measures2 M l ........................................................................................................ M 2 ........................................................................................................ M 3 ........................................................................................................ Debt .................................................................................................... 1,096.9 4,051.3 5,453.6 15,218.5 1,120.4 4,404.9 6,060.3 16,271.3 1,147.8 4,672.2 6,561.4 17,372.0 1,115.7 4,974.5 7,135.6 n.a. 1,090.2 4,850.5 6,922.1 18,018.5 1,093.7 4,865.7 6,948.5 18,070.7 1,095.3 4,898.1 7,011.6 18,161.9 1,115.7 4,974.5 7,135.6 n.a. 27 28 29 30 M l components Currency3 ........................................................................................... Travelers checks4 .............................................................................. Demand deposits5 .............................................................................. Other checkable deposits6 .............................................................. 428.1 8.3 412.4 248.2 463.3 8.4 395.9 252.8 521.5 8.4 371.2 246.6 535.8 8.1 329.1 242.6 523.3 8.7 321.7 236.4 525.1 8.4 322.2 238.1 528.6 8.2 320.5 238.1 535.8 8.1 329.1 242.6 Nontransaction components 31 In M27 ............................................................................................... 32 In M3 only8 ....................................................................................... 2,954.4 1,402.3 3,284.5 1,655.4 3,524.5 1,889.2 3,858.8 2,161.1 3,760.4 2,071.6 3,772.0 2,082.8 3,802.8 2,113.5 3,858.8 2,161.1 Commercial banks 33 Savings deposits, including MMDAs .......................................... 34 Small time deposits9 ....................................................................... 35 Large time deposits10- 11 ................................................................ 1,020.4 625.3 517.1 1,186.0 626.5 574.9 1,288.5 635.4 648.2 1,425.3 699.0 719.5 1,381.1 688.0 702.3 1,380.0 690.9 698.8 1,397.2 695.2 705.8 1,425.3 699.0 719.5 Thrift institutions 36 Savings deposits, including MMDAs .......................................... 37 Small time deposits9 ....................................................................... 38 Large time deposits1 0 ....................................................................... 376.5 342.8 85.4 414.2 325.8 88.6 449.8 321.0 91.2 454.2 347.1 103.6 454.4 339.8 100.1 453.6 343.2 102.1 454.4 346.1 103.8 454.2 347.1 103.6 Money market mutual funds 39 R e ta il.................................................................................................... 40 Institution-only .................................................................................. 589.4 397.0 731.9 541.9 829.7 636.9 933.1 785.6 897.1 721.5 904.4 734.7 909.9 755.9 933.1 785.6 Repurchase agreements and eurodollars 41 Repurchase agreements1" ................................................................ 42 Eurodollars12...................................................................................... 250.5 152.3 295.4 154.5 339.5 173.4 359.4 193.0 360.8 187.0 358.0 189.1 357.9 190.2 359.4 193.0 Debt components 43 Federal debt ...................................................................................... 44 Nonfederal debt ................................................................................ 3,805.8 11,412.7 3,754.9 12,516.3 3,663.1 13,709.0 3,426.5 14,592.0 3,395.5 14,675.3 3,401.3 14,760.7 Footnotes appear on following page. n.a. n.a. n.a. n.a. A14 Domestic Financial Statistics □ March 2001 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board’s H.6 (508) weekly statistical release. Historical data starting in 1959 are available from the Money and Reserves Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. 2. Composition of the money stock measures and debt is as follows: M l: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at all commercial banks other than those owed to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M l is computed by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately. M2: M l plus (1) savings deposits (including MMDAs), (2) small-denomination time deposits (time deposits— including retail RPs— in amounts of less than $100,000), and (3) balances in retail money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, and retail money fund balances, each seasonally adjusted separately, and adding this result to seasonally adjusted M 1. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) issued by all depository institutions, (2) balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all depository institutions, and (4) eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. government, money market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large time deposits, institutional money fund balances, RP liabilities, and eurodollars, each seasonally adjusted separately, and adding this result to seasonally adjusted M2. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial sectors— the federal sector (U.S. government, not including government-sponsored enter prises or federally related mortgage pools) and the nonfederal sectors (state and local governments, households and nonprofit organizations, nonfinancial corporate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, which are derived from the Federal Reserve Board’s flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and month-averaged (that is, the data have been derived by averaging adjacent month-end levels). 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository institutions. 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in demand deposits. 5. Demand deposits at commercial banks and foreign-related institutions other than those owed to depository institutions, the U.S. government, and foreign banks and official institu tions, less cash items in the process of collection and Federal Reserve float. 6. Consists of NOW and ATS account balances at all depository institutions, credit union share draft account balances, and demand deposits at thrift institutions. 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail money fund balances. 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and term) of U.S. addressees. 9. Small time deposits— including retail RPs— are those issued in amounts of less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are subtracted from small time deposits. 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those booked at international banking facilities. 11. Large time deposits at commercial banks less those held by money market funds, depository institutions, the U.S. government, and foreign banks and official institutions. 12. Includes both overnight and term. Commercial Banking Institutions—Assets and Liabilities A15 1.26 COM M ERCIAL BANKS IN THE UNITED STATES Assets and L iabilities1 A. All com m ercial banks Billions of dollars Monthly averages Account 1999 Dec.r Wednesday figures 2000 June Julyr Aug.r Sept.r 2000 Oct.r Nov.r Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Seasonally adjusted Assets Bank credit ............................................... Securities in bank credit .................. U.S. government securities........... Other securities............................... Loans and leases in bank credit2 . . . Commercial and in d u stria l........... Real estate ...................................... Revolving home equity ........... O th e r ............................................. Consumer ........................................ Security3 .......................................... Other loans and le a s e s .................. Interbank l o a n s ........................................ Cash assets4 ............................................ Other assets5 ............................................. 4,773.9 1,272.5 808.4 464.1 3,501.3 1,001.9 1,475.1 101.4 1,373.7 490.5 153.3 380.6 228.9 286.9 374.2 5,041.8 1,313.5 818.4r 495. r 3,728.3 1,066.6 1,598.4 115.0r l,483.4r 516.0 149.4 397.8 227.1 270.6 377.6r 5,079.7 1,318.5 820.3 498.2 3,761.2 1,072.1 1,614.5 115.1 1,499.4 519.6 151.5 403.5 240.4 271.8 394.8 5,121.4 1,321.9 813.7 508.2 3,799.5 1,079.9 1,624.6 116.3 1,508.2 528.1 158.2 408.8 247.1 271.5 396.2 5,168.8 1,332.5 808.0 524.5 3,836.4 1,079.9 1,634.9 118.1 1,516.8 531.4 178.9 411.2 240.0 269.1 395.1 5,143.1 1,310.0 792.8 517.2 3,833.1 1,079.0 1,632.4 121.3 1,511.1 531.2 177.1 413.3 250.6 267.4 408.9 5,154.8 1,302.4 782.6 519.8 3,852.4 1,080.2 1,643.6 123.0 1,520.7 535.0 178.6 415.0 250.1 254.9 398.9 5,216.3 1,334.6 784.6 550.0 3,881.7 1,088.0 1,649.9 124.4 1,525.5 536.3 187.4 420.0 255.3 266.8 398.8 5,186.4 1,307.9 780.8 527.1 3,878.5 1,083.0 1,655.4 124.4 1,531.0 534.4 188.9 416.7 248.6 260.0 398.8 5,195.0 1,331.0 780.4 550.6 3,864.0 1,080.3 1,648.9 124.1 1,524.8 533.7 180.5 420.6 249.2 263.2 397.8 5,213.8 1,330.5 786.1 544.5 3,883.3 1,093.5 1,650.3 124.3 1,525.9 536.8 185.0 417.8 256.3 263.6 404.8 5,244.3 1,351.6 786.6 565.0 3,892.7 1,092.7 1,648.8 124.5 1,524.4 537.8 190.0 423.4 260.3 277.5 389.5 16 Total assets6 ............................................. 5,604.2 5,857.1 5,925.5 5,974.1 6,010.5 6,007.9 5,9963 6,073.5 6,030.5 6,041.9 6,074.9 6,107.9 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... Large time ...................................... Other ................................................. Borrowings ............................................... From banks in the U.S........................ From others ........................................ Net due to related foreign offices............. Other liab ilities........................................ 3,528.9 631.3 2,897.5 831.6 2,066.0 1,118.) 347.7 770.4 223.8 297.7 3,667.0 617.0 3,050.0 899.0 2,151.0 1,203.8 378.4 825.4 263.5 300.6 3,725.1 611.5 3,113.6 921.3 2,192.3 1,222.0 390.2 831.7 261.9 296.6 3,752.4 617.0 3,135.4 930.9 2,204.5 1,228.0 389.4 838.6 269.7 312.7 3,770.2 609.6 3,160.7 920.4 2,240.3 1,220.2 373.8 846.5 269.2 331.2 3,785.6 613.4 3,172.2 915.2 2,257.1 1,210.4 369.3 841.1 251.9 338.9 3,773.4 598.7 3,174.7 912.2 2,262.5 1,206.5 365.1 841.4 241.4 339.3 3,849.8 597.9 3,252.0 929.5 2,322.5 1,237.4 391.1 846.2 224.4 338.1 3,813.4 582.9 3,230.5 918.8 2,311.8 1,237.4 384.2 853.2 207.1 334.0 3,827.8 579.8 3,248.0 931.6 2,316.4 1,221.7 391.1 830.7 211.4 344.4 3,850.2 611.2 3,239.0 928.8 2,310.2 1,242.2 393.6 848.6 231.0 328.6 3,865.9 624.4 3,241.5 926.3 2,315.2 1,235.9 384.9 851.0 242.3 341.5 27 Total liab ilities........................................ 5,168.4 5,434.8 5,505.5 5,562.8 5,590.9 5,586.8 5,560.6 5,649.7 5,591.9 5,6053 5,652.1 5,685.6 28 Residual (assets less liabilities)7 ......... 435.8 420.0 411.3 419.6 421.1 435.7 423.9 438.6 436.6 422.8 422.3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 422.3r Not seasonally adjusted Assets Bank credit ............................................... Securities in bank credit .................. U.S. government securities........... Other securities............................... Loans and leases in bank credit2 . . . Commercial and in d u stria l........... Real estate ...................................... Revolving home equity ........... O t h e r ............................................. Consumer ........................................ Credit cards and related p la n s .. O t h e r ............................................. Security3 .......................................... Other loans and leases .................. Interbank l o a n s ........................................ Cash assets4 ............................................ Other assets5 ............................................ 4,806.3 1,282.8 810.5 472.4 3,523.5 1,003.8 1,479.9 101.8 1,378.1 496.0 n.a. n.a. 158.0 385.8 234.2 306.8 374.3 5,024.5 1,302.7 817.7r 485.1r 3,721.7 1,066.0 1,595.0 115.lr 1,480.0" 514.1 n.a. n.a. 149.3 397.4 226.8 266.8r 379. r 5,048.1 1,301.0 811.9 489.1 3,747.1 1,067.3 1,610.7 115.1 1,495.6 516.1 195.2 320.9 148.6 404.4 236.4 262.4 394.2 5,092.6 1,309.2 804.8 504.4 3,783.4 1,069.5 1,624.6 116.5 1,508.1 526.9 202.8 324.2 153.1 409.3 237.0 259.1 394.5 5,155.5 1,327.3 800.0 527.3 3,828.3 1,075.8 1,635.4 118.9 1,516.5 532.1 206.0 326.1 172.0 412.9 233.6 264.7 393.5 5,156.7 1,314.5 787.7 526.8 3,842.2 1,079.8 1,638.1 121.9 1,516.2 528.9 203.0 325.9 180.9 414.5 244.5 268.4 401.8 5,185.6 1,317.3 785.1 532.2 3,868.3 1,084.4 1,651.6 123.5 1,528.1 534.0 206.9 327.1 180.9 417.4 255.3 262.9 396.0 5,249.8 1,344.4 786.3 558.1 3,905.4 1,090.6 1,655.2 124.9 1,530.3 542.2 216.1 326.1 191.7 425.7 262.8 285.7 398.4 5,210.5 1,323.0 787.0 536.0 3,887.5 1,082.5 1,661.8 124.7 1,537.1 534.9 207.7 327.1 189.7 418.6 260.6 262.0 397.6 5,220.1 1,341.5 783.6 557.9 3,878.6 1,078.1 1,655.8 124.6 1,531.2 536.7 209.8 326.9 185.2 422.7 258.2 273.0 395.3 5,250.7 1,339.0 787.5 551.5 3,911.7 1,097.6 1,652.9 124.8 1,528.1 544.6 219.6 325.0 192.1 424.6 263.9 280.8 401.7 5,286.6 1,357.5 784.3 573.1 3,929.1 1,099.5 1,655.0 125.1 1,529.8 548.6 223.0 325.6 194.5 431.6 261.1 307.4 390.9 46 Total assets6 ............................................. 5,661.8 5336.9r 5,880.0 5,921.1 5,984.8 6,0093 6,037.1 6,133.0 6,067.1 6,082.9 6,1333 6,182.4 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... Large time ...................................... O t h e r ................................................. Borrowings ............................................... From banks in the U.S........................ From others ........................................ Net due to related foreign offices . . . . Other lia b ilitie s........................................ 3,571.4 664.2 2,907.2 846.7 2,060.5 1,127.2 352.6 774.7 230.0 299.9 3,655.0 615.9 3,039.1 888.1 2,151.0 1,207.2 379.4 827.8 253.9 298.9 3,700.5 605.0 3,095.5 904.6 2,190.9 1,209.5 387.4 822.1 253.4 294.2 3,720.1 601.4 3,118.8 913.9 2,204.9 1,200.6 385.0 815.6 267.0 312.2 3,754.1 603.3 3,150.8 909.5 2,241.4 1,215.8 373.4 842.5 264.2 330.6 3,778.6 605.3 3,173.3 912.4 2,260.9 1,212.2 368.4 843.8 253.1 338.0 3,802.8 606.3 3,196.5 923.0 2,273.5 1,215.5 368.6 846.9 246.7 340.3 3,890.9 628.9 3,262.0 945.8 2,316.1 1,248.2 396.9 851.4 230.8 340.3 3,849.0 592.2 3,256.8 934.3 2,322.5 1,238.6 387.8 850.8 210.9 336.4 3,862.9 598.7 3,26t.2 949.2 2,315.0 1,221.6 393.5 828.1 221.4 347.0 3,883.4 639.1 3,244.3 945.3 2,299.0 1,268.1 403.9 864.2 231.3 330.2 3,909.3 671.1 3,238.2 943.8 2,294.4 1,254.6 393.9 860.7 260.7 343.5 57 Total liab ilities........................................ 5,228.5 5,414.9 5,457.6 5,500.0 5,564.7 5,581.9 5,6053 5,710.2 5,635.0 5,652.9 5,713.0 5,768.2 58 Residual (assets less liabilities)7 ......... 433.3 422.0" 422.4 421.0 420.1 427.4 431.8 422.8 432.2 430.0 420.3 414.3 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 47 48 49 50 51 52 53 54 55 56 Footnotes appear on p. A 21. A16 1.26 Domestic Financial Statistics □ March 2001 COM M ERCIAL BANKS IN THE UNITED STATES Assets and L iabilities1— Continued B. D om estically chartered com mercial banks Billions of dollars Monthly averages Account 1999 Dec.r Wednesday figures 2000 June July Aug.r Sept.r 2000 Oct.r Nov.r Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Seasonally adjusted Assets 1 Bank credit ............................................... 2 Securities in bank credit .................. 3 U.S. government securities........... 4 Other securities............................... 5 Loans and leases in bank credit2 ......... 6 Commercial and in d u stria l........... 7 Real estate ...................................... 8 Revolving home equity ........... 9 O th e r ............................................ 10 Consumer ........................................ 11 Security3 .......................................... 12 Other loans and leases .................. 13 Interbank l o a n s ........................................ 15 Other assets5 ............................................ 4.219.8 1.063.8 725.8 338.0 3,156.0 808.0 1.457.8 101.4 1,356.3 490.5 86.1 313.7 201.1 234.1 338.0 4.460.4 1.103.5 740.0' 363.5r 3.356.8 859.9 1.579.8 115.0r l,464.7r 516.0 68.6 332.5 200.8 225.2r 335.0r 4.497.7 1.108.8 741.2T 367.5r 3,389.0 867.2 l,595.8r 115.1r l,480.7r 519.6 70.0 336.4r 216.9 225.9r 353.0r 4,534.9 1,111.6 734.5 377.1 3.423.3 873.3 1,605.7 116.3 1.489.4 528.1 76.5 339.8 224.6 226.2 355.3 4.575.0 1.124.0 731.2 392.8 3,450.9 875.5 1,615.5 118.1 1,497.4 531.4 84.6 343.9 216.0 223.6 355.7 4.562.6 1.118.3 723.6 394.7 3.444.3 877.2 1.613.6 121.3 1.492.3 531.2 75.1 347.2 222.9 224.4 372.9 4.579.8 1.118.9 717.0 401.8 3,461.0 878.4 1.624.2 123.0 1.501.3 535.0 75.4 348.0 222.5 215.5 364.3 4,618.2 1,133.8 717.7 416.1 3.484.4 882.8 1.630.5 124.4 1,506.1 536.3 80.9 353.9 227.8 225.7 367.8 4.602.1 1,120.4 715.4 405.1 3.481.7 879.7 1.636.2 124.4 1.511.8 534.4 82.3 349.0 220.9 221.1 364.9 4.608.5 1.136.5 716.4 420.1 3,472.0 877.7 1,629.7 124.1 1.505.6 533.7 77.8 353.2 223.8 221.5 369.4 4,612.5 1,127.4 718.2 409.2 3,485.1 886.2 1,630.3 124.3 1,506.0 536.8 79.6 352.3 229.6 222.8 374.7 4,631.6 1.140.3 716.9 423.4 3.491.3 885.3 1.629.3 124.5 1,504.8 537.8 80.4 358.5 230.4 236.0 358.9 16 Total assets6 ............................................ 4,933.6 5,161.8 5,232.6r 5,279.3 5,308.1 5,321.0 5,320.0 5,376.3 5,346.0 5,360.3 5,376.3 5,393.6 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... Large time ...................................... O t h e r ................................................. Borrowings .............................................. From banks in the U.S........................ From others ........................................ Net due to related foreign offices . . . . Other liab ilities........................................ 3,152.2 620.5 2,531.7 469.0 2,062.6 940.1 325.1 615.0 182.7 230.3 3,281.8 605.6 2,676.2 526.0 2.150.1 1.001.2 359.2 642.0 243.3 228.6 3,334.8r 600.2r 2,734.6 544.6 2,190.0r 1,019.4 369.2 650.2 243.7 222.9r 3,356.8 606.2 2,750.6 548.6 2,202.1 1,029.1 372.4 656.7 246.4 239.7 3,381.9 599.9 2,782.1 544.5 2.237.6 1.005.7 354.2 651.5 244.9 255.0 3.401.2 602.9 2.798.3 543.9 2.254.4 991.9 350.4 641.5 235.2 263.1 3,390.6 588.2 2,802.4 542.5 2,259.8 984.5 345.6 638.9 235.4 269.0 3,464.5 587.7 2,876.8 557.7 2,319.1 997.8 367.1 630.7 226.3 269.6 3,432.1 572.8 2.859.3 551.0 2.308.3 996.7 359.1 637.6 213.6 263.8 3,438.1 570.2 2,867.9 555.3 2,312.6 993.5 371.2 622.4 220.7 278.5 3,469.4 601.1 2,868.3 561.5 2,306.8 1,000.6 371.3 629.3 227.9 261.1 3,482.5 613.3 2.869.1 556.9 2.312.2 989.6 359.9 629.7 239.7 272.1 27 Total liab ilities........................................ 4,505.3 4,754.9 4,820.7r 4,871.9 4,887.6 4,891.4 4,879.5 4,958.2 4,906.2 4,930.9 4,959.0 4,983.7 28 Residual (assets less liabilities)7 ......... 428.4 407.4 420.5 429.6 440.5 418.1 439.8 429.4 417.3 409.8 17 18 19 20 21 22 23 24 25 26 406.9r 411.9 Not seasonally adjusted Assets Bank c r e d i t ............................................... Securities in bank credit .................. U.S. government securities........... Other securities............................... Loans and leases in bank credit2 ......... Commercial and in d u stria l........... Real estate ...................................... Revolving home equity ........... O th e r ............................................ Consumer ........................................ Credit cards and related plans. . O th e r ............................................ Security3 .......................................... Other loans and l e a s e s .................. Interbank l o a n s ........................................ Cash assets4 ............................................ Other assets5 ............................................ 4,242.1 1,070.2 726.4 343.8 3,171.9 806.4 1,462.6 101.8 1,360.8 496.0 n.a. n.a. 90.3 316.7 206.4 249.7 335.9 4,453.0r 1,099.1 739.2r 359.9r 3,354.0 862.6 1,576.5 U 5.1r 1,461.5r 514.1 n.a. n.a. 68.1 332.6 200.5 222. l r 338.7r 4,477.0 1,098.3 733.8r 364.5r 3,378.7 864.9 1,592.2 115.1' 1,477.0r 516.1 195.2 320.9 67.3 338.2' 212.9 218.3' 354.3' 4,515.9 1,104.7 727.2 377.5 3,411.3 865.6 1,605.9 116.5 1,489.4 526.9 202.8 324.2 71.1 341.7 214.6 215.4 354.3 4,562.5 1,118.7 725.3 393.4 3,443.8 871.4 1,616.2 118.9 1,497.3 532.1 206.0 326.1 77.9 346.2 209.6 220.1 354.8 4,567.4 1,115.3 719.0 396.3 3,452.2 876.6 1,619.0 121.9 1,497.1 528.9 203.0 325.9 79.5 348.1 216.7 224.5 366.5 4,596.6 1,123.1 718.3 404.8 3,473.5 879.2 1,632.2 123.5 1,508.7 534.0 206.9 327.1 78.5 349.7 227.6 221.0 361.3 4,640.8 1,139.5 718.3 421.2 3,501.2 881.3 1,635.8 124.9 1,510.9 542.2 216.1 326.1 84.7 357.2 235.3 241.2 365.6 4,617.2 1,128.7 719.8 408.9 3,488.5 876.6 1,642.7 124.7 1,518.0 534.9 207.7 327.1 84.8 349.5 232.9 220.3 361.7 4,625.6 1,143.1 718.3 424.8 3,482.5 872.9 1,636.7 124.6 1,512.1 536.7 209.8 326.9 82.6 353.7 232.8 228.3 364.6 4,639.4 1,133.4 718.9 414.4 3,506.0 885.8 1,633.1 124.8 1,508.3 544.6 219.6 325.0 85.9 356.6 237.3 236.2 369.7 4,659.8 1,143.4 713.7 429.7 3,516.4 886.2 1,635.6 125.1 1,510.4 548.6 223.0 325.6 83.0 363.1 231.1 261.9 358.8 46 Total assets6 ............................................ 4,974.7 5,154.6 5,201.6r 5,238.4 5,284.7 5,313.4 5,344.2 5,419.5 5,368.8 5,388.1 5,419.0 5,448.4 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... Large time ...................................... O t h e r ................................................. Borrowings ............................................... From banks in the U.S......................... From others ........................................ Net due to related foreign offices . . . . Other liab ilities........................................ 3,186.1 652.7 2,533.4 475.3 2,058.1 949.2 330.0 619.3 183.7 230.5 3,274.2 605.0 2,669.3 520.6 2,148.7 1,004.6 360.2 644.4 235.1 228.4 3,319.0' 593.8' 2,725.1' 536.4 2,188.7 1,006.9 366.4r 640.6 236.1 222.1 3,336.5 590.6 2,745.9 543.2 2,202.7 1,001.7 368.0 633.7 243.8 239.6 3,372.2 593.1 2,779.1 540.0 2,239.1 1,001.3 353.8 647.5 240.6 254.8 3,398.7 594.7 2,804.0 545.3 2,258.6 993.6 349.5 644.1 236.3 262.7 3,416.8 595.7 2,821.1 549.8 2,271.3 993.5 349.1 644.4 239.0 269.1 3,496.7 618.1 2,878.5 564.6 2,313.9 1,008.7 372.9 635.8 227.7 269.9 3,462.7 581.9 2,880.8 560.5 2,320.3 997.9 362.8 635.2 218.1 264.6 3,465.4 588.8 2,876.7 563.9 2,312.8 993.4 373.6 619.8 226.5 279.2 3,493.5 628.2 2,865.3 568.5 2,296.8 1,026.4 381.6 644.9 223.5 261.0 3,512.4 659.2 2,853.2 561.0 2,292.1 1,008.3 369.0 639.3 247.7 271.8 57 Total liab ilities........................................ 4,549.5 4,742.3 4,784.1r 4,821.7 4,868.9 4,891.3 4,918.4 5,002.9 4,943.3 4,964.6 5,004.5 5,040.1 58 Residual (assets less liabilities)7 ........... 425.2 416.7 415.8 422.1 425.8 416.6 425.5 423.5 414.6 408.3 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 47 48 49 50 51 52 53 54 55 56 Footnotes appear on p. A21. 412.3r 417.5 Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1— Continued C. Large domestically chartered commercial banks Billions of dollars Wednesday figures Monthly averages Account 1999 Dec.r 2000 2000 June Julyr Aug.r Sept.' Oct.r Nov.r Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Seasonally adjusted Assets 1 Bank c r e d i t ............................................... 2 Securities in bank credit .................. 3 U.S. government securities........... 4 Trading account ........................ 5 Investment a c co u n t.................... 6 Other securities............................... 7 Trading account ......................... 8 Investment a c co u n t.................... 9 State and local government . 10 O th e r ........................................ 11 Loans and leases in bank credit2 . . . 12 Commercial and in d u stria l........... 13 Bankers acceptances.................. 14 O th e r ............................................. 15 Real estate ...................................... 16 Revolving home equity ........... 17 O th e r ............................................ 18 Consumer ........................................ 19 Security3 .......................................... 20 Federal funds sold to and repurchase agreements with broker-dealers ........... 21 O th e r ............................................ 22 State and local g o v e rn m e n t......... 23 A gricultural...................................... 24 Federal funds sold to and repurchase agreements with others ........................... 25 All other loans ............................... 26 Lease-financing receivables ......... 27 Interbank l o a n s ........................................ 28 Federal funds sold to and repurchase agreements with commercial b a n k s ........................ 29 O t h e r ..................................................... 30 Cash assets4 ............................................. 31 Other assets5 ............................................ 2,382.4r 555.4r 358.2r 19.6 338.6r 197.2 86.7 110.5 24.1 86.4 1,827.0r 554.6r 1.1 553.5r 746.3r 64.7r 681.7r 219.(7 79.3 2,501.3r 581.6r 362.9r 22.7 340.2r 218.7 100.2 118.5 25.6 92.9 l,919.6r 583.(7 1.0 582.(7 804. l r 73.8r 730.2r 227.8 62.1 2,511.3 579.1 363.8 24.3 339.5 215.3 97.2 118.1 26.1 92.0 1,932.2 583.5 1.0 582.6 812.7 73.4 739.3 229.0 63.1 2,528.8 577.2 359.7 23.7 336.0 217.6 102.5 115.0 25.9 89.1 1,951.5 586.6 .9 585.7 818.4 74.4 744.0 231.2 69.2 2,551.3 585.4 357.8 23.2 334.6 227.6 114.5 113.2 25.8 87.4 1,965.9 586.9 .9 586.0 819.4 73.2 746.3 232.2 77.4 2,527.5 576.4 351.5 21.1 330.4 224.9 112.7 112.2 26.1 86.1 1,951.1 586.2 .8 585.4 811.5 75.1 736.4 233.3 67.6 2,526.3 572.3 344.9 20.5 324.5 227.4 116.0 111.4 26.3 85.1 1,954.0 584.4 .9 583.6 814.2 76.2 738.0 234.9 67.9 2,544.9 580.2 348.1 29.0 319.1 232.1 122.0 110.1 26.7 83.4 1,964.7 589.3 .9 588.4 812.7 77.2 735.6 234.2 73.0 2,532.7 567.5 343.2 22.4 320.8 224.3 113.8 110.4 26.4 84.0 1,965.2 586.3 .9 585.4 818.4 77.2 741.2 235.5 74.3 2,541.6 585.3 347.2 25.9 321.3 238.2 128.2 109.9 26.2 83.7 1,956.3 584.6 .8 583.8 811.8 76.9 734.9 234.5 69.9 2,537.7 575.0 349.6 29.2 320.4 225.4 116.4 108.9 26.4 82.5 1,962.8 593.4 .9 592.5 811.5 77.2 734.3 232.9 71.6 2,558.6 586.6 349.5 33.9 315.6 237.1 126.3 110.9 27.4 83.4 1,972.1 592.6 .8 591.8 812.3 77.3 735.0 234.0 72.8 60.1 19.1 11.9 9.1 43.9 18.2 12.3 9.6 44.6 18.6 12.2 9.5 50.6 18.6 12.3 9.5 58.1 19.3 12.4 9.4 49.1 18.5 12.4 9.4 50.0 17.9 12.4 9.5 56.5 16.5 12.2 9.6 57.2 17.1 12.3 9.6 53.2 16.7 12.2 9.6 54.7 17.0 12.2 9.6 57.1 15.7 12.2 9.6 11.7 75.7 119.5 I35.6r 13.5 84.7 122.5 133.7r 12.8 84.2 125.0 141.6 14.0 84.1 126.1 140.2 16.1 85.4 126.7 130.7 16.9 85.3 128.6 136.2 18.9 82.8 129.0 140.0 20.4 84.2 129.0 139.6 18.0 81.6 129.3 135.4 19.1 85.6 129.0 137.5 18.6 83.9 129.0 140.2 23.7 86.0 128.9 142.1 59.0r 76.7 148.1 237.4r 61.9 65.8 146.1r 223.2r 73.7 67.9 144.6 242.2 66.0 74.1 144.6 245.2 56.4 74.3 141.5 247.0 57.5 78.7 142.0 260.4 60.6 79.3 136.9 256.6 63.3 76.3 143.7 254.5 58.4 77.0 141.3 256.0 60.5 77.0 140.4 255.4 64.1 76.1 141.1 260.3 67.2 74.9 152.3 243.1 32 Total assets6 ............................................ 2#>7.9r 2,969.8r 3,004.6 3,023-3 3,035.0 3,030.9 3,0243 3,046-3 3,029.1 3,038.6 3,043.0 3,059.8 Liabilities Deposits ................................................... Transaction .......................................... Non transaction .................................... Large time ...................................... O th e r ................................................. Borrowings ............................................... From banks in the U.S........................ From others ........................................ Net due to related foreign offices............. Other lia b ilitie s........................................ 1,608.(7 322.4r 1,285.6' 229.7 l,055.8r 633.4 178.9 454.5 178.2 170.5 l,639.6r 309.6r l^ O tf 258.7r l,071.3r 656.6 197.0 459.6 234.2 173.8 1,639.5 302.4 1,337.0 266.9 1,070.1 678.7 205.1 473.7 221.3 177.4 1,634.6 304.5 1,330.1 265.3 1,064.8 689.4 207.5 481.9 222.7 193.4 1,634.3 300.6 1,333.7 257.3 1,076.4 671.4 192.2 479.3 224.4 207.5 1,637.2 302.8 1,334.4 254.1 1,080.2 664.2 196.4 467.8 211.7 214.0 1,621.0 292.6 1,328.3 250.0 1,078.4 661.2 193.7 467.5 211.7 218.6 1,651.1 293.5 1,357.7 259.9 1,097.8 669.6 212.1 457.5 205.4 219.4 1,639.2 285.1 1,354.1 255.3 1,098.7 667.6 202.9 464.7 195.0 213.3 1,636.3 281.5 1,354.8 257.5 1,097.4 666.2 216.2 450.1 201.3 228.2 1,654.5 302.2 1,352.3 263.0 1,089.3 676.3 218.0 458.3 204.6 210.6 1,659.2 308.2 1,350.9 259.2 1,091.7 663.4 206.3 457.1 216.2 222.1 43 Total liab ilities........................................ 2,590. l r 2,704.2r 2,716.8 2,740.0 2,737.6 2,727.1 2,712.5 2,745.6 2,715.0 2,732.0 2,746.0 2,760.9 44 Residual (assets less liabilities)7 ......... 211S 265.6 287.8 283.3 297.5 303.7 311.8 300.7 314.1 306.6 297.0 298.9 33 34 35 36 37 38 39 40 41 42 Footnotes appear on p. A 21. A18 1.26 Domestic Financial Statistics □ March 2001 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1— Continued C. Large domestically chartered commercial banks— Continued Billions of dollars Monthly averages Account 2000 1999 Dec.r Wednesday figures June July" Aug." Sept." 2000 Oct." Nov." Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Not seasonally adjusted Assets 45 Bank c r e d i t ............................................. 46 Securities in bank credit ................ 47 U.S. government securities......... 48 Trading account ...................... 49 Investment a c co u n t.................. 50 Mortgage-backed securities . . 51 O t h e r ...................................... 52 One year or l e s s .............. 53 One to five years ........... 54 More than five years . .. 55 Other securities............................. 56 Trading account ...................... 57 Investment acco u n t.................. 58 State and local government . . 59 O th e r ...................................... 60 Loans and leases in bank credit2 . . 61 Commercial and in d u stria l......... 62 Bankers acceptances................ 63 O t h e r .......................................... 64 Real estate .................................... 65 Revolving home equity ......... 66 O t h e r .......................................... 67 Commercial ............................. 68 Consumer ...................................... 69 Credit cards and related plans. . 70 O t h e r .......................................... 71 Security5 ........................................ 72 Federal funds sold to and repurchase agreements with broker-dealers . . . . 73 O t h e r .......................................... 74 State and local government . . . . 75 A gricultural................................... 76 Federal funds sold to and repurchase agreements with others ........................... 77 All other loans ............................. 78 Lease-financing receivables . . . . 79 Interbank l o a n s ...................................... 80 Federal funds sold to and repurchase agreements with commercial banks ......... 81 O th e r ................................................... 82 Cash assets4 .......................................... 83 Other assets5 .......................................... 2,404.3r 562.2r 359.4r 19.5 339.9" 218.6" 121.4" 23.0 58.5 39.9" 202.8 86.7 116.1 24.3 91.8 1,842.0" 553.4" 1.1 552.3" 751.8" 64.8 420.4 266.6" 222.1 n.a. n.a. 83.5 2,488.6" 575.3" 359.9" 22.5 337.4" 217.9" 119.6" 30.8 53.2 35.5 215.4 100.2 115.2 25.5 89.7 1,913.3" 583.7" 1.0 582.6" 799.8" 74.0" 444.9" 280.9" 226.3 n.a. n.a 61.6 2,489.8 569.6 356.5 22.6 334.0 212.4 121.6 30.8 54.1 36.7 213.1 97.2 115.8 25.6 90.3 1,920.2 581.2 1.0 580.2 808.1 73.7 454.1 280.3 226.5 72.0 154.5 60.5 2,506.4 570.7 353.0 23.0 330.1 208.0 122.1 31.8 53.1 37.2 217.7 102.5 115.2 25.6 89.6 1,935.6 580.9 .9 580.0 815.9 74.6 459.3 281.9 229.4 73.1 156.2 63.9 2,534.4 581.4 352.7 22.5 330.2 208.3 121.9 32.6 52.6 36.7 228.7 114.5 114.2 25.7 88.5 1,953.0 584.5 .9 583.7 817.0 73.5 461.8 281.7 231.2 74.2 157.0 70.7 2,530.3 575.9 349.3 21.0 328.3 210.4 118.0 31.3 50.5 36.2 226.6 112.7 113.9 26.1 87.8 1,954.4 585.9 .8 585.1 813.5 75.3 455.9 282.3 231.3 74.3 157.0 72.0 2,542.5 578.1 347.9 21.7 326.2 210.7 115.5 31.9 48.8 34.8 230.2 116.0 114.2 26.6 87.6 1,964.4 586.7 .9 585.8 819.5 76.4 459.1 284.0 233.3 75.7 157.6 70.9 2,565.8 585.9 349.2 28.8 320.4 212.5 107.9 30.6 44.0 33.3 236.7 122.0 114.7 26.9 87.8 1,979.8 588.3 .9 587.5 818.7 77.3 457.4 284.0 236.9 80.1 156.8 76.7 2,552.0 578.1 349.4 25.4 324.1 210.6 113.5 31.9 46.0 35.5 228.6 113.8 U4.8 26.6 88.2 1,974.0 584.9 .9 584.0 825.9 77.3 463.4 285.3 234,6 76.6 158.1 76.7 2,559.7 592.6 349.8 26.7 323.1 213.2 109.9 31.0 45.3 33.6 242.8 128.2 114.6 26.4 88.1 1,967.1 581.4 .8 580.5 819.6 77.1 458.2 284.3 235.2 77.6 157.6 74.8 2,561.5 580.5 350.5 29.2 321.4 211.6 109.7 32.8 44.1 32.9 230.0 116.4 113.5 26.6 87.0 1.981.0 593.4 .9 592.5 815.5 77.3 454.1 284.2 236.0 80.3 155.7 78.0 2,576.4 587.1 345.2 30.2 315.0 212.7 102.3 27.6 42.3 32.5 241.8 126.3 115.6 27.8 87.8 1,989.3 592.6 .8 591.8 817.2 77.5 456.0 283.6 239.2 83.0 156.2 75.3 64.1 19.4 12.0 9.1 42.5 19.1 12.1 9.5 41.8 18.6 12.2 9.6 45.7 18.3 12.5 9.6 51.7 18.9 12.6 9.6 53.7 18.3 12.6 9.5 53.5 17.4 12.5 9.6 60.1 16.6 12.3 9.6 60.7 16.0 12.4 9.6 57.9 16.8 12.3 9.5 59.8 18.2 12.2 9.6 58.9 16.4 12.2 9.7 11.7 79.3 119.1 136.6" 13.5 84.3 122.4 136.7" 12.8 85.0 124.3 141.7 14.0 84.3 125.1 134.2 16.1 86.2 125.1 127.2 16.9 85.2 127.5 130.3 18.9 85.3 127.7 138.3 20.4 88.2 128.6 140.4 18.0 83.8 128.0 134.0 19.1 87.5 127.9 137.7 18.6 89.4 128.3 142.0 23.7 90.4 129.0 142.2 60.4" 76.2 159.4 235.8" 68.4 68.2 143.6" 227.1 73.0 68.7 138.4 241.6 62.2 72.0 136.6 242.4 54.7 72.5 138.4 246.6 55.7 74.6 142.4 254.1 61.3 77.0 139.2 252.2 64.4 76.0 154.5 252.7 58.6 75.4 139.4 252.3 62.0 75.7 144.8 251.8 65.6 76.4 151.0 257.8 66.4 75.8 171.4 243.5 84 Total assets6 .......................................... 2$00Ar 2,9613" 2,976.4 2,984.1 3,010.9 3,021.9 3,036.6 3,076.8 3,041.2 3,057.5 3,075.8 3,097.4 Liabilities Deposits ................................................. Transaction ........................................ Nontransaction ................................. Large time ................................... O t h e r .............................................. B orro w in g s............................................ From banks in the U.S...................... From nonbanks in the U.S............... Net due to related foreign offices . .. Other lia b ilitie s...................................... 1,633.0" 343.7" 1,289.2" 236.0" 1,053.3" 640.0" 182.3 457.7 179.2 170.5 1,634.7" 308.4" 1,326.3" 253.3" 1,073.0" 658.1 196.3 461.8 225.9 173.8 1,629.0 298.7 1,330.3 258.8 1,071.5 663.8 199.8 464.0 213.7 177.4 1,619.0 293.4 1,325.6 259.9 1,065.7 658.9 200.2 458.7 220.1 193.4 1,626.6 296.0 1,330.6 252.8 1,077.8 661.3 188.2 473.1 220.0 207.5 1,631.8 297.0 1,334.8 255.6 1,079.2 663.0 192.9 470.2 212.8 214.0 1,634.2 296.4 1,337.8 257.2 1,080.6 668.1 196.2 471.9 215.4 218.6 1,674.1 312.5 1,361.6 266.8 1,094.8 676.3 215.2 461.1 206.8 219.4 1,655.9 287.9 1,368.0 264.8 1,103.2 669.0 206.4 462.6 199.4 213.3 1,655.0 292.5 1,362.5 266.1 1,096.3 663.8 217.2 446.6 207.1 228.2 1,673.3 320.0 1,353.3 270.0 1,083.4 692.5 223.2 469.3 200.2 210.6 1,682.8 338.7 1,344.1 263.2 1,080.8 672.3 209.2 463.1 224.3 222.1 95 Total liab ilities...................................... 2,622.7" 2,692.6r 2,683.8 2^91.4 2,7153 2,721.6 2,7363 2,776.6 2,737.6 2,754.0 2,776.7 2,801.5 96 Residual (assets less liabilities)7......... 277.7" 268.7" 292.6 292.8 295.6 300.3 300.3 300.2 303.6 303.5 299.1 295.9 85 86 87 88 89 90 91 92 93 94 Footnotes appear on p. A 21. Commercial Banking Institutions—Assets and Liabilities A 19 1.26 COM M ERCIAL BANKS IN THE UNITED STATES Assets and L iabilities1— Continued D. Small dom estically chartered com m ercial banks Billions of dollars Monthly averages Account 1999 D ec/ Wednesday figures 2000 Juner Julyr Aug.r Sept.' 2000 Oct.r Nov.r Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Seasonally adjusted Assets Bank c r e d i t ............................................... Securities in bank credit .................. U.S. government securities........... Other securities............................... Loans and leases in bank credit2 ......... Commercial and in d u stria l........... Real estate ...................................... Revolving home equity ........... O th e r ............................................ Consumer ........................................ Security3 .......................................... Other loans and l e a s e s .................. Interbank l o a n s ........................................ Cash assets4 ............................................ Other assets5 ............................................ 1,837.4 508.4 367.6 140.8 1,329.0 253.4 711.4 36.8 674.7 271.5 6.8 85.8 65.4 86.0 100.6 1,959.1 521.9 377.1 144.8 1,437.2 276.9 775.7 41.2 734.5 288.2 6.5 89.9 67.1 79.1 111.8 1,986.4 529.6 377.5 152.2 1,456.8 283.6 783.0 41.6 741.4 290.6 6.8 92.7 75.3 81.3 110.8 2,006.1 534.3 374.8 159.6 1,471.8 286.6 787.3 42.0 745.3 296.9 7.2 93.8 84.4 81.6 110.1 2,023.7 538.6 373.5 165.2 1,485.0 288.6 796.1 45.0 751.1 299.2 7.2 93.9 85.3 82.1 108.6 2,035.1 542.0 372.1 169.8 1,493.2 291.0 802.1 46.3 755.8 297.9 7.5 94.6 86.6 82.4 112.4 2,053.6 546.6 372.1 174.5 1,507.0 294.0 810.0 46.7 763.3 300.1 7.5 95.4 82.5 78.6 107.7 2,073.3 553.6 369.6 184.0 1,519.7 293.5 817.8 47.3 770.5 302.1 7.9 98.4 88.2 82.0 113.4 2,069.4 553.0 372.2 180.8 1,516.5 293.5 817.8 47.2 770.6 298.9 8.1 98.2 85.5 79.7 108.9 2,066.9 551.1 369.2 181.9 1,515.8 293.0 817.9 47.2 770.6 299.2 7.9 97.8 86.3 81.2 113.9 2,074.8 552.4 368.5 183.8 1,522.4 292.8 818.8 47.2 771.6 303.9 7.9 99.0 89.5 81.7 114.4 2,073.0 553.7 367.5 186.3 1,519.2 292.7 817.0 47.1 769.8 303.8 7.7 98.1 88.2 83.7 115.9 16 Total assets6 ............................................ 2,065.7 2,192.0 2,228.0 2,256.0 2,273.1 2,290.1 2,295.7 2330.0 2^16.8 2321.7 2^ 333 2333.7 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... Large time ...................................... O t h e r ................................................. Borrowings ............................................... From banks in the U.S........................ From others ........................................ Net due to related foreign offices . . . . Other lia b ilitie s ........................................ 1,544.2 298.1 1,246.1 239.3 1,006.8 306.7 146.1 160.5 4.5 59.9 1,642.2 296.1 1,346.1 267.3 1,078.8 344.6 162.2 182.4 9.1 54.8 1,695.3 297.8 1,397.6 277.6 1,119.9 340.7 164.2 176.5 22.4 45.5 1,722.2 301.7 1,420.5 283.3 1,137.2 339.7 164.9 174.8 23.7 46,3 1,747.6 299.2 1,448.4 287.2 1,161.2 334.2 162.0 172.2 20.6 47.6 1,764.0 300.1 1,463.9 289.7 1,174.2 327.6 154.0 173.6 23.4 49.1 1,769.6 295.6 1,474.0 292.6 1,181.5 323.3 151.9 171.4 23.7 50.4 1,813.4 294.2 1,519.1 297.8 1,221.3 328.2 155.0 173.2 20.9 50.2 1,792.9 287.6 1,505.3 295.7 1,209.6 329.1 156.2 172.9 18.7 50.5 1,801.8 288.8 1,513.1 297.8 1,215.3 327.3 155.0 172.3 19.5 50.3 1,814.9 298.9 1,516.0 298.5 1,217.5 324.3 153.3 171.0 23.3 50.4 1,823.3 305.1 1,518.2 297.8 1,220.4 326.1 153.6 172.5 23.5 50.0 27 Total liab ilities........................................ 1,915.2 2,050.7 2,103.9 2,131,9 2,150.0 2,164.2 2,167.0 2,212.7 2,191.2 2,198.9 2,213.0 2^22.9 28 Residual (assets less liabilities)7 ......... 150.6 141.3 124.1 124.1 123.0 125.8 128.7 117.3 125.6 122.8 120.3 110.9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 Not seasonally adjusted 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Assets Bank c r e d i t ............................................... Securities in bank credit .................. U.S. government securities........... Other securities............................... Loans and leases in bank credit2 ......... Commercial and in d u stria l........... Real estate ...................................... Revolving home equity ........... O th e r ............................................ Consumer ........................................ Credit cards and related plans. . O th e r ............................................ Security3 .......................................... Other loans and leases .................. Interbank l o a n s ........................................ Cash assets4 ............................................ Other assets5 ............................................ 1,837.9 508.0 367.0 141.0 1,329.9 253.0 710.8 37.0 673.8 273.9 n.a. n.a. 6.8 85.4 69.8 90.3 100.2 1,964.5 523.8 379.3 144.5 1,440.7 278.9 776.7 41.1 735.6 287.8 n.a. n.a. 6.5 90.7 63.8 78.5 111.6 1,987.2 528.7 377.3 151.4 1,458.5 283.7 784.1 41.4 742.7 289.6 123.1 166.5 6.8 94.3 71.2 79.9 112.7 2,009.5 533.9 374.2 159.8 1,475.6 284.7 790.0 41.9 748.2 297.6 129.6 168.0 7.2 96.1 80.3 78.8 111.9 2,028.1 537.3 372.6 164.7 1,490.8 286.9 799.2 45.4 753.8 301.0 131.8 169.1 7.2 96.5 82.4 81.7 108.2 2,037.1 539.4 369.6 169.7 1,497.8 290.7 805.5 46.6 758.9 297.6 128.7 168.9 7.5 96.5 86.3 82.1 112.3 2,054.0 545.0 370.4 174.6 1,509.1 292.5 812.7 47.1 765.6 300.7 131.2 169.5 7.5 95.6 89.3 81.8 109.1 2,075.0 553.6 369.1 184.5 1,521.4 293.0 817.1 47.6 769.5 305.3 136.0 169.3 7.9 98.0 94.9 86.8 112.9 2,065.1 550.6 370.4 180.3 1,514.5 291.8 816.7 47.4 769.3 300.2 131.2 169.1 8.1 97.7 98.9 80.9 109.3 2,065.9 550.5 368.5 182.0 1,515.4 291.5 817.1 47.5 769.5 301.5 132.2 169.3 7.9 97.4 95.1 83.5 112.7 2,077.9 552.9 368.4 184.5 1,525.0 292.5 817.5 47.5 770.0 308.6 139.2 169.3 7.9 98.5 95.2 85.1 111.9 2,083.4 556.4 368.5 187.8 1,527.1 293.6 818.4 47.6 770.8 309.4 140.0 169.4 7.7 98.1 88.9 90.5 115.3 46 Total assets6 ............................................ 2,074.4 2,193.3 2,225.2 2,2543 2,273.8 2^91.5 2,307.6 2*342.7 2327.5 2,330.6 2,343.2 2351.0 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... Large time ...................................... O t h e r ................................................. Borrowings ............................................... From banks in the U.S........................ From others ........................................ Net due to related foreign offices . . . . Other lia b ilitie s........................................ 1,553.1 309.0 1,244.1 239.3 1,004.8 309.3 147.7 161.6 4.5 60.0 1,639.5 296.6 1,342.9 267.3 1,075.7 346.5 163.9 182.6 9.1 54.5 1,690.0 295.2 1,394.8 277.6 1,117.2 343.1 166.6 176.6 22.4 44.8 1,717.5 297.2 1,420.3 283.3 1,137.0 342.9 167.8 175.0 23.7 46.3 1,745.6 297.1 1,448.6 287.2 1,161.4 340.1 165.6 174.4 20.6 47.3 1,766.9 297.8 1,469.2 289.7 1,179.4 330.5 156.6 173.9 23.4 48.8 1,782.6 299.2 1,483.3 292.6 1,190.7 325.4 152.9 172.5 23.7 50.4 1,822.5 305.6 1,516.9 297.8 1,219.1 332.4 157.7 174.7 20.9 50.5 1,806.8 294.0 1,512.8 295.7 1,217.1 328.9 156.4 172.5 18.7 51.3 1,810.5 296.2 1,514.2 297.8 1,216.4 329.7 156.4 173.2 19.5 51.0 1,820.1 308.2 1,511.9 298.5 1,213.4 333.9 158.4 175.5 23.3 50.4 1,829.6 320.5 1,509.1 297.8 1,211.3 335.9 159.7 176.2 23.5 49.7 57 Total liab ilities........................................ 1,926.8 2,049.7 2,1003 2,130.4 2,153.6 2,169.7 2,182.1 2,2263 2,205.6 2,210.6 2,227.7 2,238.6 58 Residual (assets less liabilities)7 ......... 147.5 143.6 124.9 124.0 120.3 121.8 125.5 116.4 121.9 120.0 115.5 112.4 47 48 49 50 51 52 53 54 55 56 Footnotes appear on p. A21. A20 Domestic Financial Statistics □ March 2001 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1— Continued E. Foreign-related institutions Billions of dollars Monthly averages Account 1999 D ec/ Wednesday figures 2000 June July Aug. Sept. 2000 Oct. Nov. Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Seasonally adjusted 1 2 3 4 5 6 7 8 9 10 11 12 Assets Bank c r e d i t ............................................... Securities in bank credit .................. US. government securities........... Other secu rities............................... Loans and leases in bank credit2 . . . Commercial and in d u stria l........... Real estate ...................................... Security3 .......................................... Other loans and leases .................. Interbank l o a n s ........................................ Cash assets4 ............................................ Other assets5 ............................................ 554.1 208.7 82.6 126.1 345.3 193.9 17.3 67.2 66.9 27.8 52.8 36.2 581.4 209.9 78.4 131.5 371.4 206.7 18.6 80.8 65.3 26.3 45.4 42.6 582.0 209.8 79.1 130.7 372.2 205.0 18.7 81.5 67.0 23.5 45.9 41.8 586.5 210.3 79.2 131.1 376.2 206.6 18.9 81.8 69.0 22.5 45.2 40.9 593.9" 208.4 76.8 131.7 385.4 204.4 19.4 94.3 67.3 24.0" 45.5 39.4 580.4 191.7 69.1 122.6 388.8 201.8 18.8 102.0" 66.1 27.8 43.0 36.0 574.9 183.5 65.5" 118.0" 391.4 201.9 19.4 103.2 67.0 27.7 39.5 34.6 598.1 200.8 66.9 133.9 397.3 205.2 19.4 106.6 66.1 27.5 41.0 30.9 584.3 187.5 65.4 122.1 396.8 203.3 19.2 106.6 67.7 27.7 38.9 34.0 586.5 194.5 64.0 130.5 392.0 202.6 19.2 102.7 67.4 25.3 41.7 28.4 601.3 203.2 67.9 135.3 398.2 207.3 19.9 105.4 65.4 26.7 40.8 30.2 612.7 211.3 69.6 141.7 401.4 207.4 19.5 109.5 64.9 30.0 41.5 30.6 13 Total assets6 ............................................ 670.6 695.3 692.9 694.7 702.4" 686.9 6763 697.2 6845 681.6 698.6 7143 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... Borrowings ............................................... From banks in the U.S........................ From others ........................................ Net due to related foreign offices............. Other lia b ilitie s........................................ 376.7 10.8 365.9 178.0 22.6 155.4 41.1 67.4 385.1 11.3 373.8 202.6 19.2 183.4 20.2 72.0 390.3 11.3 379.1 202.5 21.0 181.5 18.2 73.7 395.6 10.8 384.8 198.9 17.0 181.9 23.4 73.0 388.3 9.7 378.6 214.5" 19.5" 195.0" 24.3 76.2" 384.4 10.4 374.0 218.6 18.9 199.7 16.7 75.8 382.8 10.5 372.4 222.0 19.5 202.5 6.1 70.2 385.4 10.2 375.1 239.6 24.0 215.5 - 2 .0 68.5 381.3 10.2 371.2 240.6 25.0 215.6 -6 .6 70.3 389.6 9.5 380.1 228.2 19.9 208.3 -9 .4 65.9 380.8 10.1 370.7 241.6 22.3 219.3 3.1 67.5 383.4 22 Total liab ilities........................................ 663.2 679.9 684.8 690.8 703-3" 695.4 681.1 691-5 685.7 674.4 693.1 701.8 23 Residual (assets less liabilities)7 ......... 7.4 15.4 8.1 3.9 - .9 -8 .5 -4 .8 5.8 -1 .2 7.3 5.5 12.5 593.3 194.3 67.2 11.2 55.9 127.2 86.8 40.4 399.0 205.8 19.2 104.9 69.1 27.7 41.7 36.0 594.5 198.5 65.3 10.8 54.6 133.1 87.1 46.1 396.0 205.3 19.1 102.6 69.1 25.3 44.7 30.7 611.2 205.6 68.6 12.2 56.4 137.0 89.0 48.1 405.6 211.7 19.8 106.2 67.9 26.7 44.6 32.0 626.8 214.0 70.6 13.1 57.5 143.4 93.1 50.3 412.8 213.3 19.4 111.5 68.6 30.0 45.5 32.1 14 15 16 17 18 19 20 21 11.0 372.4 246.4 25.0 221.4 2.6 69.4 Not seasonally adjusted Assets Bank c r e d i t ............................................... Securities in bank credit .................. U.S. government securities........... Trading account ........................ Investment a c co u n t.................... Other securities............................... Trading account ........................ Investment a c co u n t.................... Loans and leases in bank credit2 .. . Commercial and in d u stria l........... Real estate ...................................... Security3 .......................................... Other loans and le a s e s .................. Interbank l o a n s ........................................ Cash assets4 ............................................ Other assets5 ............................................ 564.2 212.6 84.0 6.8 77.2 128.6 85.2 43.4 351.6 197.5 17.3 67.7 69.2 27.8 57.0 38.3 571.4 203.7 78.5 12.0 66.5 125.2 81.4 43.8 367.8 203.4 18.5 81.1 64.8 26.3 44.7 40.4 571.1 202.7 78.1 12.0 66.1 124.6 80.7 43.9 368.4 202.5 18.5 81.3 66.2 23.5 44.2 39.9 576.7 204.5 77.6 13.9 63.7 126.9 82.4 44.6 372.1 203.9 18.7 81.9 67.6 22.5 43.7 40.2 593.1 208.6 74.7 14.2 60.4 133.9 91.0 42.9 384.5 204.4 19.2 94.1" 66.8" 24.0" 44.6 38.7 589.3 199.2 68.7 11.9 56.9 130.5 89.9 40.6 390.1 203.2 19.1 101.4 66.4" 27.8 43.9 35.3 589.0 194.2 66.9 55.9 127.4" 87.3 40.0 394.8 205.2 19.4 102.4" 67.8" 27.7 41.9 34.7 609.1 204.9 68.0 11.8 56.2 136.8 89.9 46.9 404.2 209.3 19.4 107.0 68.5 27.5 44.5 32.8 40 Total assets6 ............................................ 687.1 682.4 678.4 682.7 700.1r 695.9 692.9 713.5 698.4 694.8 714.2 734.0 Liabilities Deposits ................................................... Transaction .......................................... Nontransaction .................................... B orro w in g s.............................................. From banks in the U.S........................ From others ........................................ Net due to related foreign offices . . . . Other liab ilities........................................ 385.3 11.5 373.8 178.0 22.6 155.4 46.3 69.5 380.8 369.8 202.6 19.2 183.4 18.8 70.5 381.5 11.2 370.4 202.5 21.0 181.5 17.3 72.1 383.6 10.7 372.9 198.9 17.0 181.9 23.2 72.6 381.9 10.2 371.7" 214.5" 19.5" 195.0" 23.6 75.8" 379.9 10.6 369.4 218.6 18.9 199.7 16.9 75.2 386.1 10.6 375.5 222.0 19.5 202.5 7.7 71.2 394.3 10.8 383.5 239.6 24.0 215.5 3.1 70.4 386.4 10.3 376.1 240.6 25.0 215.6 -7 .2 71.8 397.4 10.0 387.5 228.2 19.9 208.3 -5 .2 67.8 390.0 10.9 379.1 241.6 22.3 219.3 7.7 69.2 396.9 11.9 385.0 246.4 25.0 221.4 13.0 71.8 49 Total liab ilities........................................ 679.0 672.6 6735 678.3 695.9" 690.6 687.0 7073 691.7 6883 7085 728.0 50 Residual (assets less liabilities)7 ........... 8.0 9.7 4.9 4.3 4.2" 5.3 5.9 6.2 6.7 6.5 5.7 6.0 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 41 42 43 44 45 46 47 48 11.0 11.0 Commercial Banking Institutions—Assets and Liabilities A21 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1— Continued F. Memo items Billions of dollars Monthly averages Account 1999 Dec.r Wednesday figures 2000 June July Aug. Sept. 2000 Oct. Nov. Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Not seasonally adjusted 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 M emo Large domestically chartered banks, adjusted fo r mergers Revaluation gains on off-balance-sheet items8 ............................................... Revaluation losses on off-balancesheet items8 ...................................... Mortage-backed securities9 .................... Pass-through ........................................ CMO, REMIC, and other ................ Net unrealized gains (losses) on available-for-sale securities10 . . . . Off-shore credit to U.S. residents11. . . . Securitized consumers loans1 2 ............. Credit cards and related p l a n s ......... O t h e r ..................................................... Securitized business loans12.................. Small domestically chartered commercial banks, adjusted fo r mergers Mortgage-backed securities9 .................. Securitized consumer loans12................ Credit cards and related p l a n s ......... O t h e r ..................................................... Foreign-related institutions Revaluation gains on off-balancesheet items8 ...................................... Revaluation losses on off-balancesheet items8 ...................................... Securitized business loans12.................. 64.2 68.3 63.1 66.5 74.4 70.9 68.0 78.4 73.1 74.5 77.4 85.5 63.7 251.5r 174.1r 77.4r 68.5 250.2r 177.9" 72.3r 62.9 242.5r 173.2r 69.3r 67.3 238.0" 169.9" 68.2r 73.9 238.2r 170.4" 67.7r 72.8 239.6r 173.4" 66.3" 72.6 239.8" 173.7" 66.0" 83.1 241.6 176.9 64.7 78.5 240.1 174.9 65.2 79.2 242.1 176.8 65.4 82.6 240.8 176.4 64.4 90.0 241.9 178.1 63.7 -11.3 24.0 n.a. n.a. n.a. n.a. -8 .7 22.4 n.a. n.a. n.a n.a. -11.5 22.2 87.4 72.4 15.0 17.0 -1 0 .8 22.1 86.6 72.0 14.6 16.2 - 9 .7 22.1 85.9 71.8 14.1 15.3 -8 .7 22.3 80.8 67.2 13.6 15.2 -8 .0 23.1 80.5 67.3 13.2 17.8 -5 .8 23.4 82.2 68.6 13.6 18.6 -6 .7 23.3 82.0 69.0 13.0 18.4 -6 .4 23.5 81.9 69.0 12.9 18.5 -5 .8 23.8 82.7 68.6 14.1 18.5 -5 .6 23.6 82.6 68.6 14.0 18.7 196.5r n.a. n.a. n.a. 207.4r n.a. n.a. n.a. 207.2r 220.5 211.5 9.0 210.1r 220.8 212.0 8.8 211.6r 221.5 212.9 8.6 212.6" 223.7 214.0 9.7 214.0" 224.7" 214.8" 9.9 215.1 230.1 220.5 9.6 214.9 227.2 217.5 9.7 214.8 230.2 220.5 9.7 213.9 229.9 220.6 9.3 215.0 231.6 222.1 9.6 43.6 44.7 41.4 43.0 48.6 47.5 44.8 45.8 44.1 45.2 45.8 47.2 41.5 n.a. 40.7 n.a. 38.2 23.9 40.1 23.7 45.0" 23.1 44.6 23.0 40.8 22.8 41.5 23.1 40.2 23.4 41.4 22.9 40.8 22.9 42.9 23.0 N o t e . Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board’s H.8 statistical release, “Assets and Liabilities of Commercial Banks in the United States.” Table 1.27, “Assets and Liabilities of Large Weekly Reporting Commercial Banks,” and table 1.28, “Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks,” are no longer being published in the Bulletin. Instead, abbreviated balance sheets for both large and small domestically chartered banks have been included in table 1.26, parts C and D. Data are both merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. branches and agencies of foreign banks have been replaced by balance sheet estimates of all foreign-related institutions and are included in table 1.26, part E. These data are breakadjusted. The not-seasonally-adjusted data for all tables now contain additional balance sheet items, which were available as of October 2, 1996. 1. Covers the following types of institutions in the fifty states and the District of Columbia: domestically chartered commercial banks that submit a weekly report of condition (large domestic); other domestically chartered commercial banks (small domestic); branches and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related institutions). Excludes International Banking Facilities. Data are Wednesday values or pro rata averages of Wednesday values. Large domestic banks constitute a universe; data for small domestic banks and foreign-related institutions are estimates based on weekly samples and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications of assets and liabilities. The data for large and small domestic banks presented on pp. A 17-19 are adjusted to remove the estimated effects of mergers between these two groups. The adjustment for mergers changes past levels to make them comparable with current levels. Estimated quantities of balance sheet items acquired in mergers are removed from past data for the bank group that contained the acquired bank and put into past data for the group containing the acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a ratio procedure is used to adjust past levels. 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks in the United States, all of which are included in “Interbank loans.” 3. Consists o f reverse RPs with brokers and dealers and loans to purchase and carry securities. 4. Includes vault cash, cash items in process of collection, balances due from depository institutions, and balances due from Federal Reserve Banks. 5. Excludes the due-from position with related foreign offices, which is included in “Net due to related foreign offices.” 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for transfer risk. Loans are reported gross of these items. 7. This balancing item is not intended as a measure of equity capital for use in capital adequacy analysis. On a seasonally adjusted basis, this item reflects any differences in the seasonal patterns estimated for total assets and total liabilities. 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. 9. Includes mortgage-backed securities issued by U.S. government agencies, U.S. government-sponsored enterprises, and private entities. 10. Difference between fair value and historical cost for securities classified as availablefor-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are restated to include an estimate o f these tax effects. 11. Mainly commercial and industrial loans but also includes an unknown amount of credit extended to other than nonfinancial businesses. 12. Total amount outstanding. A22 1.32 Domestic Financial Statistics □ March 2001 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING A. Commercial Paper Millions of dollars, seasonally adjusted, end of period Year ending December 2000 Item 1995 1996 1997 1998 1999 June July Aug. Sept. Oct. Nov. 1 All issuers .......................................................... 674,904 775,371 966,699 1,163,303 1,403,023 1,516,205 1,551,668 1,559,054 1,557,700 1,587,591 1,624,421 Financial companies’ Dealer-placed paper, total2 ........................... Directly placed paper, total3 ........................ 275,815 210,829 361,147 229,662 513,307 252,536 614,142 322,030 786,643 337,240 884,578 300,718 900,651 309,076 905,634 303,307 899,853 315,039 912,739 328,049 960,701 312,438 4 Nonfinancial companies4 ................................. 188,260 184,563 200,857 227,132 279,140 330,909 341,941 350,113 342,809 346,803 351,282 2 3 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities. 2. Includes all financial-company paper sold by dealers in the open market. 3. As reported by financial companies that place their paper directly with investors. 4. Includes public utilities and firms engaged primarily in such activities as communica tions, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. B. Bankers Dollar Acceptances1 Millions of dollars, not seasonally adjusted, year ending September2 Item 1997 1998 1999 2000 1 Total amount of reporting banks’ acceptances in e x iste n c e......................................................................... 25,774 14,363 10,094 9,881 2 Amount of other banks’ eligible acceptances held by reporting b a n k s ............................................................ 3 Amount of own eligible acceptances held by reporting banks (included in item 1 ) ...................................... 4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries (included in item 1) ............................................................................................................................................ 736 6,862 523 4,884 461 4,261 462 3,789 10,467 5,413 3,498 3,689 1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks; that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal Reserve Act (12 U.S.C. §372). 1.33 PRIME RATE CHARGED BY BANKS 2. Data on bankers dollar acceptances are gathered from approximately 40 institutions; includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and agencies of foreign banks, and Edge and agreement corporations. The reporting group is revised every year. Short-Term Business Loans' Percent per year Date of change Rate Period Average rate 1998— Jan. 1 .......................... Sept. 30 .......................... Oct. 16 .......................... Nov. 1 8 .......................... 8.50 8.25 8.00 7.75 1998 ............................................. 1999 ............................................. 2000 ............................................. 8.35 8.00 9.23 July 1 .......................... Aug. 25 .......................... Nov. 17 .......................... 8.00 8.25 8.50 2000— Feb. 3 .......................... Mar. 2 2 .......................... May 1 7 .......................... 8.75 9.00 9.50 1998— Jan..................................... Feb.................................... Mar.................................... Apr..................................... May ................................. June ................................. J u ly .................................. 2001—Jan. Feb 9.00 8.50 8.50 8.50 8.50 8.50 8.50 8.50 8.50 8.50 8.49 8.12 7.89 7.75 1999 4 .......................... 1 ............. Sept................................... Oct..................................... Dec.................................... 1. The prime rate is one of several base rates that banks use to price short-term business loans. The table shows the date on which a new rate came to be the predominant one quoted by a majority of the twenty-five largest banks by asset size, based on the most recent Call Period 1999 Jail..................................... Feb.................................... Mar.................................... Apr.................................... Mav ................................. J u ly .................................. Aug................................... Sept................................... Oct..................................... Nov.................................... Average rate 7.75 7.75 7.75 7.75 7.75 7 75 8.00 8.06 8.25 8.25 8.37 8.50 Period 2000— Jan.................................... Feb.................................... Mar.................................... Apr.................................... M a y ................................. J u ly .................................. Aug................................... Sept................................... Oct..................................... Nov.................................... 2001—Jan..................................... Average rate 8 50 8.73 8.83 9.00 9.24 9 50 9.50 9.50 9.50 9.50 9.50 9 50 9.05 Report. Data in this table also appear in the Board’s H.15 (519) weekly and G.13 (415) monthly statistical releases. For ordering address, see inside front cover, Financial Markets A23 1.35 INTEREST RATES Money and Capital Markets Percent per year; figures are averages of business day data unless otherwise noted 2000, week ending 2000 Item 1999 2000 Sept. Oct. Nov. Dec. Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 M oney M arket Instrum ents 1 Federal funds1-2'3 ................................................... 2 Discount window borrowing2'4 ........................ 5.35 4.92 4.97 4.62 6.24 5.73 6.52 6.00 6.51 6.00 6.51 6.00 6.40 6.00 6.50 6.00 6.57 6.00 6.47 6.00 6.53 6.00 6.48 6.00 3 4 5 Commercial p a p e r'’5'6 Nonfinancial 1-month ........................................ ...................... 2-month .............................................................. -3-month .............................................................. 5.40 5.38 5.34 5.09 5.14 5.18 6.27 6.29 6.31 6.48 6.47 6.47 6.48 6.48 6.51 6.49 6.52 6.50 6.51 6.42 6.34 6.51 6.53 6.50 6.52 6.48 6.43 6.53 6.42 6.33 6.51 6.41 6.28 6.45 6.36 6.28 6 7 8 Financial 1-month .............................................................. 2-month .............................................................. 3-month .............................................................. 5.42 5.40 5.37 5.11 5.16 5.22 6.28 6.30 6.33 6.49 6.48 6.47 6.48 6.47 6.52 6.49 6.54 6.52 6.52 6.42 6.33 6.49 6.55 6.51 6.54 6.48 6.43 6.54 6.45 6.36 6.54 6.39 6.28 6.45 6.33 6.21 9 10 11 Commercial paper (historical)3'5'7 1-month .............................................................. 3-month .............................................................. 6-month .............................................................. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 13 14 Finance paper, directly placed (historical) 3'5'8 1-month .............................................................. 3-month .............................................................. 6-month .............................................................. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 15 16 Bankers acceptances3'5'9 3-month .............................................................. 6-month .............................................................. 5.39 5.30 5.24 5.30 6.23 6.37 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 17 18 19 Certificates 1-month 3-month 6-month o f deposit, secondary market*'10 .............................................................. .............................................................. .............................................................. 5.49 5.47 5.44 5.19 5.33 5.46 6.35 6.46 6.59 6.56 6.60 6.68 6.55 6.67 6.65 6.56 6.65 6.63 6.62 6.45 6.30 6.62 6.63 6.60 6.67 6.54 6.42 6.63 6.49 6.36 6.59 6.40 6.21 6.55 6.32 6.11 20 Eurodollar deposits. 3-month3' 11 ...................... 5.45 5.31 6.45 6.59 6.66 6.64 6.43 6.62 6.52 6.47 6.39 6.31 4.78 4.83 4.80 4.64 4.75 4.81 5.82 5.90 5.78 6.00 5.98 5.79 6.11 6.04 5.72 6.17 6.06 5.84 5.77 5.68 5.33 6.08 5.98 5.71 5.94 5.81 5.47 5.89 5.78 5.44 5.51 5.53 5.18 5.66 5.50 5.11 4.81 4.85 4.85 4.66 4.76 4.78 5.66 5.85 5.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 25 26 U.S. Treasury hills Secondary market3'5 3-month .............................................................. 6-month .............................................................. 1-year ................................................................... Auction high3'512 3-month .............................................................. 6-month .............................................................. 1-year ................................................................... 27 28 29 30 31 32 33 34 Constant maturities' 3 1-year ................................................................... 2 -y e a r................................................................... 3-year ................................................................... 5-year ................................................................... 7-year ................................................................... 10-year ................................................................. 20-year ................................................................ 3 0 -y ea r................................................................ 5.05 5.13 5.14 5.15 5.28 5.26 5.72 5.58 5.08 5.43 5.49 5.55 5.79 5.65 6.20 5.87 6.11 6.26 6.22 6.16 6.20 6.03 6.23 5.94 6.13 6.08 6.02 5.93 5.98 5.80 6.09 5.83 6.01 5.91 5.85 5.78 5.84 5.74 6.04 5.80 6.09 5.88 5.79 5.70 5.78 5.72 5.98 5.78 5.60 5.35 5.26 5.17 5.28 5.24 5.64 5.49 6.00 5.71 5.61 5.52 5.60 5.56 5.84 5.66 5.78 5.49 5.41 5.33 5.41 5.39 5.73 5.57 5.73 5.46 5.35 5.25 5.34 5.29 5.65 5.49 5.44 5.23 5.12 5.02 5.14 5.10 5.56 5.43 5.34 5.12 5.06 4.98 5.16 5.10 5.58 5.44 Composite 35 More than )0 years (lo n g -te rm )........................ 5.69 6.14 6.41 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4.93 5.14 5.09 5.28 5.70 5.43 5.58 6.19 5.71 5.40 6.12 5.56 5.46 6.22 5.59 5.38 6.17 5.54 5.11 5.85 5.22 5.36 6.13 5.46 5.19 6.01 5.34 5.12 5.81 5.25 5.07 5.79 5.16 5.07 5.79 5.14 39 Seasoned issues, all industries16........................ 6.87 7.45 7.98 7.98 7.95 7.90 7.65 7.81 7.72 7.65 7.58 7.59 Rating group Aaa ......................................................................... Aa ............................................................................ A .............................................................................. B a a ............................................................................ 6.53 6.80 6.93 7.22 7.05 7.36 7.53 7.88 7.62 7.83 8.11 8.36 7.62 7.83 8.13 8.35 7.55 7.81 8.11 8.34 7.45 7.75 8.09 8.28 7.21 7.48 7.88 8.02 7.37 7.67 8.02 8.19 7.29 7.57 7.94 8.10 7.21 7.48 7.88 8.03 7.16 7.40 7.82 7.95 7.15 7.40 7.83 7.97 M emo Dividend price ratio17 44 Common s to c k s ..................................................... 1.49 1.25 1.15 1.10 1.15 1.16 1.19 1.19 1.17 1.16 1.26 1.18 21 22 23 U.S. T r e a s u r y N o te s a n d B o n d s State and L ocal N otes a nd B onds M oody’s series14 36 Aaa .......................................................................... 37 B a a ............................................................................ 38 Bond Buyer series15............................................... C orporate B onds 40 41 42 43 No t e . Some of the data in this table also appear in the Board’s H.15 (519) weekly and G. 13 (4)5) monthly statistical releases. For ordering address, see inside front cover. 1. The daily effective federal funds rate is a weighted average of rates on trades through New York brokers. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the current week; monthly figures include each calendar day in the month. 3. Annualized using a 360-day year or bank interest. 4. Rate for the Federal Reserve Bank of New York. 5. Quoted on a discount basis. 6. Interest rates interpolated from data on certain commercial paper trades settled by the Depository Trust Company. The trades represent sales of commercial paper by dealers or direct issuers to investors (that is, the offer side). See Board’s Commercial Paper Web pages (http://www.federalreserve.gov/releases/cp) for more information. 7. An average o f offering rates on commercial paper for firms whose bond rating is AA or the equivalent. Series ended August 29, 1997. 8. An average of offering rates on paper directly placed by finance companies. Series ended August 29, 1997. 9. Representative closing yields for acceptances of the highest-rated money center banks. 10. An average of dealer offering rates on nationally traded certificates of deposit. 11. Bid rates for eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for indication purposes only. 12. Auction date for daily data; weekly and monthly averages computed on an issue-date basis. On or after October 28, 1998, data are stop yields from uniform-price auctions. Before that, they are weighted average yields from multiple-price auctions. 13. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Depart ment of the Treasury. 14. General obligation bonds based on Thursday figures; M oody’s Investors Service. 15. State and local government general obligation bonds maturing in twenty years are used in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys’ A1 rating. Based on Thursday figures. 16. Daily figures from Moody’s Investors Service. Based on yields to maturity on selected long-term bonds. 17. Standard & Poor’s corporate series. Common stock ratio is based on the 500 stocks in the price index. A24 1.36 Domestic Financial Statistics □ March 2001 STOCK MARKET Selected Statistics 2000 Apr. May June July Aug. Sept. Oct. Nov. Dec. 666.14 837.23 419.84 459.91 597.17 667.05 829.99 404.23 463.76 616.89 646.53 797.00 403.20 469.16 587.76 646.64 800.88 434.92 455.66 600.45 645.44 792.66 457.53 444.16 621.62 1,485.46 1,468.06 1,390.14 1,375.04 1,330.93 930.66 920.54 952.74 913.64 892.60 870.16 941,694 36,486 875,087 35,695 1,026,597 47,047 1,167,025 57,915 1,015,606 58,541 1,183,149 73,759 Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 5 0 ) ...................... 2 In d u stria l................................................. 3 T ransportation........................................ 4 Utility ..................................................... 5 Finance ................................................... 6 Standard & Poor’s Corporation (1 9 4 1 -4 3 = 1 0 ) '............................. 550.65 684.35 468.61 190.52 516.65 619.52 775.29 491.62 284.82 530.97 643.71 809.40 414.73 478.99 552.48 646.82 822.76 406.14 502.78 524.05 1,085.50 1,327.33 1,427.22 1,461.36 640.07 814.75 411.50 487.17 523.22 649.61 819.54 395.09 501.93 544.51 1,461.96 7 American Stock Exchange (Aug. 31, 1973 = 50)2 .................. Volume o f trading (thousands o f shares) 8 New York Stock Exchange .................... 9 American Stock E x c h a n g e...................... 666,534 28,870 799,554 32,629 1,026,867 51,437 1,047,960 63,054 653.27 825.28 410.67 484.19 556.32 893,896 44,146 971,137 42,490 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 .................. Free credit balances at brokers4 11 Margin accounts5 ................................................. 12 Cash a c co u n ts........................................................ 1,685,820 2,130,152 2,921376 405,180 633,725 532,500 757,345 867,610 918,917 251,700 240,660 247,200 244,970 247,560 250,780 233,376 219,110 198,790 65,930 76,190 66,170 73,500 64,970 74,140 71,730 74,970 68,020 72,640 70,959 74,766 83,131 73,271 96,730 74,050 100,680 84,400 Margin requirements (percent of market value and effective date)6 13 Margin s to c k s ........................................................ 14 Convertible bonds ............................................... 15 Short s a le s .............................................................. 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 report ing 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. Jan. 3, 1974 50 50 50 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 credit is collateralized by securities. Margin requirements on securities are the difference between the market value (100 percent) and the maximum loan value of collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971. On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the initial margin required for writing options on securities, setting it at 30 percent of the current market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the same as the option maintenance margin required by the appropriate exchange or self-regulatory organization; such maintenance margin rules must be approved by the Securities and Exchange Commission. Federal Finance A25 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year Type of account or operation 2000 1998 1999 2000 July Aug. Sept. Oct. Nov. Dec. US. budget1 1 Receipts, total .......................................................... 2 On-budget ............................................................ 3 Off-budget ............................................................ 4 Outlays, total ............................................................ 5 On-budget ............................................................ 6 Off-budget ............................................................ 7 Surplus or deficit ( - ) , to ta l.................................... 8 On-budget ............................................................ 9 Off-budget ............................................................ 1,721,798 1,305,999 415,799 1,652,224 1,335,948 316,604 69,246 -2 9 ,9 4 9 99,195 1,827,454 1,382,986 444,468 1,702,942 1,382,262 320,778 124,414 724 123,690 2,025,038 1,544,455 480,583 1,788,140 1,457,376 330,765 236,897 87,079 149,818 134,074 97,681 36,393 129,013 99,404 29,609 5,061 -1 ,7 2 3 6,784 138,128 101,429 36,699 148,555 115,539 33,016 -1 0 ,4 2 7 -1 4 ,1 1 0 3,683 219,471 176,692 42,779 153,744 114,748 38,901 65,727 61,944 3,878 135,111 101,121 33,990 146,431 115,840 30,592 -11,321 -1 4 ,7 1 9 3,398 125,666 89,216 36,450 149,356 116,737 32,619 -2 3 ,6 9 0 -27,521 3,831 200,489 161,737 38,752 167,823 132,747 35,075 32,666 28,990 3,677 Source o f financing (total) 10 Borrowing from the public .................................... 11 Operating cash (decrease, or increase (—)) ............. 12 O ther2 ......................................................................... -51,211 4,743 -2 2,778 -8 8 ,6 7 4 -1 7 ,5 8 0 -1 8 ,1 6 0 -2 2 2 ,6 7 2 3,799 -1 7 ,3 2 7 -3 1 ,3 0 7 23,384 2,862 9,995 20,873 -20,441 -3 2 ,3 3 4 -3 9 ,4 7 9 6,086 -2 9 ,6 6 6 42,653 —1,666 41,325 -1 ,431 -1 6 ,2 0 4 -3 6 ,6 8 9 -9 ,6 3 2 13,655 M emo 13 Treasury operating balance (level, end of period)................................................................ 14 Federal Reserve Banks ...................................... 15 Tax and loan a c co u n ts........................................ 38,878 4,952 33,926 56,458 6,641 49,817 52,659 8,459 44,199 34,053 5,392 28,661 13,180 5,961 7,218 52,659 8,459 44,199 10,006 5,360 4,646 11,437 4,382 7,055 21,069 5,149 15,920 1. Since 1990, off-budget items have been the social security trust funds (Federal Old-Age, Survivors, and Disability Insurance) and the U.S. Postal Service. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loanvaluation adjustment; and profit on sale of gold. SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement o f Receipts and Outlays o f the U.S. Government; fiscal year totals: U.S. Office of Management and Budget, Budget o f the U.S. Government when available. A26 1.39 Domestic Financial Statistics □ March 2001 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year Source or type 1999 1999 2000 2000 2000r HI H2 HI H2 Oct. Nov. Dec. R eceipts 1,827,454 2,025,200 966,045 892,266 1,089,760 952,939 135,111 125,666 200,489 2 Individual income taxes, n e t ................................. 3 W ith h e ld................................................................ 4 N onw ithheld.......................................................... 5 R efunds................................................................... Corporation income taxes 6 Gross receip ts........................................................ 7 R efunds................................................................... 8 Social insurance taxes and contributions, net . . . 9 Employment taxes and contributions2 ............. 10 Unemployment insurance.................................... 11 Other net receipts3 ............................................... 879,480 693,940 308.185 122,706 1,004,500 780,397 358,049 134,046 481,907 351,068 240,278 109,467 425,451 372,012 68,302 14,841 550,208 388,526 281,103 119,477 458,679 395,572 77,732 14,628 75,969 68,287 8,799 1,118 60,489 62,855 2,320 4,686 83,485 78,133 6,468 1,116 216,324 31,645 611,833 580,880 26,480 4,473 235,655 28,367 652,900 620,447 27,641 4,763 106,861 17,092 324,831 306,235 16,378 2,216 110,111 13,996 292,551 280,059 10,173 2,319 119,166 13,781 353,514 333,584 17,562 2,368 123,962 15,776 310,122 297,665 10,097 2,360 7,113 5,404 47,155 45,247 1,509 399 4,292 2,245 51,383 48,536 2,431 416 53,192 1,886 53,559 52,932 260 367 Excise taxes .............................................................. Customs d e p o s its ..................................................... Estate and gift ta x e s ................................................. Miscellaneous receipts4 .......................................... 70,414 18.336 27,782 34,929 68,900 19,900 29,000 42,800 31,015 8,440 14.915 15,140 34,262 10,287 14,001 19,569 33,532 9,218 15,073 22,831 35,501 10,676 13,216 16,556 4,235 1,900 2,868 1,275 6,030 1,640 2,141 1,935 5,865 1,461 1,863 2,949 1 AH so u r c es................................................................ 12 13 14 15 O utlays 1,702,942 1,789,000 817,227 882,465 892,947 894,922 146,431 149,356 167,823 17 18 19 20 21 22 National defense ..................................................... International affairs ................................................. General science, space, and technology ............. Energy ....................................................................... Natural resources and environm ent...................... A g riculture................................................................ 274,873 15,243 18,125 912 23.970 23,011 294,500 17,200 18.600 - 1 ,1 0 0 25,000 36,600 134,414 6,879 9,319 797 10,351 9,803 149,573 8,530 10,089 -9 0 12,100 20,887 143,476 7,250 9,601 -8 9 3 10,814 11,164 147,651 11,902 10,389 -5 9 5 12,907 20,977 21,478 1,795 1,676 -1 ,2 0 0 2,132 5,025 24,445 1,326 1,776 74 2,100 3,547 29,176 4,828 1,868 182 2,083 3,618 23 24 25 26 Commerce and housing c re d it............................... Transportation .......................................................... Community and regional develo p m en t................ Education, training, employment, and social services ................................................. 2.649 42,531 11,870 3,200 46,900 10,600 -1 ,6 2 9 17,082 5,368 7,353 23,199 6,806 -2 ,4 9 7 21,054 5,050 4,408 25,841 5,962 843 4,729 1,211 -7 0 9 4,221 1,133 555 4,035 822 56,402 59,400 29,003 27,532 31,234 29,263 5,061 5,014 6,122 27 H e a lth ......................................................................... 28 Social security and Medicare ............................... 29 Income security ........................................................ 141,079 580,488 237,707 154,500 606,500 247,900 69.320 261,146 126,552 74,490 295,030 113,504 75,871 306,966 133,915 81,413 307,473 113,212 14,799 51,766 16,485 13,111 51,481 18,950 12,975 54,224 23,882 30 31 32 33 34 43,212 25,924 15,771 229,735 -4 0,445 47,100 28,000 13,200 223.200 -4 2 ,6 0 0 20,105 13,149 6,641 116,655 -1 7 ,7 2 4 23,412 13,459 7,010 112,420 -2 2 ,8 5 0 23,174 13,981 6,198 115,545 -1 9 ,3 4 6 22,615 14,635 6,461 104,685 -2 4 ,0 7 0 2,222 2,545 1,239 18,399 -3 ,7 7 5 3,644 2,741 1,134 18,916 -3 ,5 4 7 5,520 2,495 1,205 17,122 -2 ,8 8 9 16 All types ................................................................... Veterans benefits and services ............................. Administration of ju s tic e ........................................ General government ............................................... Net interest5 .............................................................. Undistributed offsetting receipts6 ........................... 1. Functional details do not sum to total outlays for calendar year data because revisions to monthly totals have not been distributed among functions. Fiscal year total for receipts and outlays do not correspond to calendar year data because revisions from the Budget have not been fully distributed across months. 2. O ld-age, disability, and hospital insurance, and railroad retirem ent accounts. 3. F ed eral e m p lo y e e re tire m e n t c o n trib u tio n s and c iv il s e rv ic e re tire m e n t d is a b ility fund. and 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. 5. Includes interest received by trust funds. 6. Rents and royalties for the outer continental shelf, U.S. government contributions for employee retirement, and certain asset sales. S o u r c e . Fiscal year totals: U .S . Office of Management and Budget, Budget o f the U.S. Government, Fiscal Year 200I\ monthly and half-year totals: U.S. Department of the Trea sury, Monthly Treasury Statement o f Receipts and Outlays o f the US. Government. Federal Finance A27 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1998 1999 2000 Item Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstand ing....................................................... 5,643 5,681 5,668 5,685 5,805 5,802 5,714 5,702 5,690 2 Public debt securities ................................................................ 3 Held by public ....................................................................... 4 Held by agencies .................................................................. 5,614 3,787 1,827 5,652 3,795 1,857 5,639 3,685 1,954 5,656 3,667 1,989 5,776 3,716 2,061 5,773 3,688 2,085 5,686 3,496 2,190 5,674 n.a. n.a. 5,662 n.a. n.a. 5 Agency securities ....................................................................... 6 Held by public ....................................................................... 7 Held by agencies .................................................................. 29 29 1 29 28 1 29 28 1 29 28 1 29 28 1 28 28 0 28 28 0 28 n.a. n.a. 27 n.a. n.a. 8 Debt subject to statutory limit ............................................ 5,530 5,566 5,552 5,568 5,687 5,687 5,601 5,592 5,581 9 Public debt securities ................................................................ 10 Other debt1 .................................................................................. 5,530 0 5,566 0 5,552 0 5,568 0 5,687 0 5,686 0 5,601 0 5,591 0 5,580 0 M emo 11 Statutory debt limit .................................................................. 5,950 5,950 5,950 5,950 5,950 5,950 5,950 5,950 5,950 1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified participation certificates, notes to international lending organizations, and District of Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY SOURCE. U.S. Department of the Treasury, Monthly Statement o f the Public Debt o f the United States and Treasury Bulletin. Types and Ownership Billions of dollars, end of period 2000 Type and holder 1997 1998 1999 2000 Ql Q2 Q3 Q4 1 Total gross public debt ....................................................................................... 5,502.4 5,614.2 5,776.1 5,662.2 5,773.4 5,685.9 5,674.2 5,662.2 By type Interest-bearing........................................................................................................ Marketable .......................................................................................................... B ills ................................................................................................................... N o te s ................................................................................................................. Bonds ............................................................................................................... Inflation-indexed notes and bonds' ............................................................ Nonmarketable" .................................................................................................. State and local government s e rie s .............................................................. Foreign issues3 ............................................................................................... Government ............................................................................................... Public .......................................................................................................... Savings bonds and notes .............................................................................. Government account series4 ....................................................................... N on-interest-bearing............................................................................................... 5,494.9 3,456.8 715.4 2,106.1 587.3 33.0 2,038.1 124.1 36.2 36.2 .0 181.2 1,666.7 7.5 5,605.4 3,355.5 691.0 1,960.7 621.2 67.6 2,249.9 165.3 34.3 34.3 .0 180.3 1,840.0 8.8 5,766.1 3,281.0 737.1 1,784.5 643.7 100.7 2,485.1 165.7 31.3 31.3 .0 179.4 2,078.7 10.0 5,618.1 2,966.9 646.9 1,557.3 626.5 121.2 2,651.2 151.0 27.2 27.2 .0 176.9 2,266.1 44.2 5,763.8 3,261.2 753.3 1,732.6 653.0 107.4 2,502.6 161.9 28.8 28.8 .0 178.6 2,103.3 9.6 5,675.9 3,070.7 629.9 1,679.1 637.7 109.0 2,605.2 160.4 27.7 27.7 .0 177.7 2,209.4 10.1 5,622.1 2,992.8 616.2 1,611.3 635.3 115.0 2,629.3 153.3 25.4 25.4 .0 177.7 2,242.9 52.1 5,618.1 2,966.9 646.9 1,557.3 626.5 121.2 2,651.2 151.0 27.2 27.2 .0 176.9 2,266.1 44.2 1,655.7 451.9 3,414.6 300.3 321.5 176.6 239.3 1,826.8 471.7 3,334.0 237.3 343.2 144.5 269.3 2,060.6 477.7 3,233.9 246.3 348.6 125.3 266.8 2,085.4 501.7 3,182.8 235.1 338.9 124.0 257.2 2,190.2 505.0 2,987.4 219.7 318.6 120.9 256.4 2,235.7 511.4 2,936.2 n.a. n.a. n.a. n.a. 186.5 359.4 142.5 216.9 1,241.6 589.5 186.7 374.4 157.8 216.6 1,278.7 498.8 186.5 384.5 171.3 213.2 1,268.8 407.1 185.3 385.9 174.8 211.1 1,273.9 382.5 184.6 384.5 175.5 209.0 1,248.9 253.8 184.7 n.a. n.a. n.a. 1,225.2 n.a. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 By holder 5 16 U.S. Treasury and other federal agencies and trust funds ............................. 17 Federal Reserve B a n k s ........................................................................................... 18 Private in v e sto rs...................................................................................................... 19 Depository institutions ...................................................................................... 20 Mutual funds ...................................................................................................... 21 Insurance companies ......................................................................................... 22 State and local treasuries6 ................................................................................ Individuals 23 Savings b o n d s ...................................................................................................... 24 Pension funds ...................................................................................................... 25 P riv a te ............................................................................................................... 26 State and L o c a l............................................................................................... 27 Foreign and international7 ................................................................................ 28 Other miscellaneous investors6,8 ..................................................................... 1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of 1997. 2. Includes (not shown separately) securities issued to the Rural Electrification Administra tion, depository bonds, retirement plan bonds, and individual retirement bonds. 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur rency held by foreigners. 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual holdings; data for other groups are Treasury estimates. 6. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable federal securities was removed from “Other miscellaneous investors” and added to “State and local treasuries.” The data shown here have been revised accordingly. n.a. 7. Includes nonmarketable foreign series treasury securities and treasury deposit funds. Excludes treasury securities held under repurchase agreements in custody accounts at the Federal Reserve Bank of New York. 8. Includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts and estates, corporate and noncorporate businesses, and other investors. SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement o f the Public Debt o f the United States; data by holder, Treasury Bulletin. A28 1.42 Domestic Financial Statistics □ March 2001 U.S. GOVERNM ENT SECURITIES DEALERS T ransactions1 Millions of dollars, daily averages 2000 2000, week ending Item Sept. O u t r i g h t T r a n s a c t io n s 2 By type o f security 1 U.S. Treasury bills ................................. Coupon securities, by maturity 2 Five years or less ............................... 3 More than five y e a r s ........................... 4 Inflation-indexed ...................................... Federal agency 5 Discount n o te s .......................................... Coupon securities, by maturity 6 One year or less ................................. 7 More than one year, but less than or equal to five years ................ 8 More than five y e a r s ........................... 9 M ortgage-backed...................................... By type o f counterparty W ith interdealer broker U.S. T re asu ry ........................................ Federal agency .................................... M ortgage-backed................................. With other 13 U.S. T re asu ry ........................................ 14 Federal agency .................................... 15 M ortgage-backed................................. 10 11 12 Oct. Nov. Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 24,438 26,999 33,213 38,246 38,933 32,325 22,990 35,664 44,451 28,399 30,087 29,272 117,915 69,458 1,490 139,243 67,524 1,987 116,403 62,146 1,033 136,248 70.445 831 123,038 68,022 938 114,912 62,882 643 86,544 49,039 1,071 120,857 59,954 1,446 200,827 95,819 1,420 140,926 90,414 1,563 136,050 89,936 1,527 97,687 45,923 907 50,165 51,052 52,139 52,948 46,558 46,902 56,595 57,434 56,732 48,781 52,063 58,338 1,160 1,082 1,094 1,317 1,324 1,024 974 749 1,980 1,415 1,962 2,292 9,860 9,925 76,954 12,597 11,659 80,367 9,936 7,450 80,031 9,580 15,584 61,990 10,633 7,445 115,204 11,754 6,924 99,137 6,812 5,193 38,129 9,376 7,128 71,318 17,403 14,019 90,154 11,269 17,255 123,014 9,880 13,377 68,876 6,012 6,324 30,729 101,973 9,811 28,514 102,544 10,680 26,882 92,335 8,654 23,812 102,022 9,482 24,761 98,148 8,447 32,315 89,680 9,271 24,834 71,765 7,446 14,081 96,092 8,418 22,691 152,034 13,370 29,402 114,749 13,645 37,557 123,851 13,157 26,804 77,852 7,330 13,004 111,328 61,299 48,440 133,209 65,710 53,485 120,459 61,966 56,219 143,747 69,946 37,229 132,782 57,513 82,889 121,081 57,333 74,302 87,878 62,127 24,048 121,829 66,269 48,627 190,483 76,763 60,752 146,553 65,076 85,457 133,748 64,125 42,072 95,936 65,636 17,725 n.a. n.a. n.a. n.a. n.a. F utures T ransactions 3 16 17 18 19 20 21 22 23 24 By type o f deliverable security U.S. Treasury bills ................................. Coupon securities, by maturity Five years or less ............................... More than five y e a rs ........................... Inflation-indexed ...................................... Federal agency Discount n o te s .......................................... Coupon securities, by maturity One year or less ................................. More than one year, but less than or equal to five years ................ More than five y e a rs ........................... M ortgage-backed...................................... 0 0 0 0 0 3,119 11,756 0 2,497 10,472 0 3,309 13,051 0 2,058 11,590 0 1,965 11,889 0 2,663 10,599 0 2,849 10,120 0 6,098 19,774 0 n.a. n.a. 5,012 17,887 0 4,666 14,870 0 3,474 15,733 0 1,641 8,092 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 165 0 0 86 0 0 72 0 0 52 0 0 34 0 0 60 0 0 67 0 0 46 0 0 464 0 0 304 0 0 235 0 0 n.a. 0 O p tio n s T r a n s a c t io n s 4 By type o f underlying security 25 U.S. Treasury bills ................................. Coupon securities, by maturity 26 Five years or less ............................... 27 More than five y e a r s ........................... 28 Inflation-indexed ...................................... Federal agency 29 Discount n o te s .......................................... Coupon securities, by maturity 30 One year or less ................................. 31 More than one year, but less than or equal to five years ................ 32 More than five y e a rs .......................... 33 M ortgage-backed...................................... 0 0 0 0 0 0 0 0 0 0 0 0 1,350 3,382 0 1,217 3,829 0 1,548 3,619 0 1,412 3,939 0 2,012 4,820 0 1,285 3,605 0 1,879 2,926 0 900 3,048 0 1,361 3,105 0 1,940 5,870 0 1,317 4,757 0 1,265 2,419 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 38 6 1,097 0 102 1,189 n.a. 124 1,272 0 n.a. 638 0 0 2,510 0 320 703 0 n.a. 1,353 0 104 360 0 36 1,242 0 n.a. 945 0 12 1,674 0 0 1,077 1. Transactions are market purchases and sales of securities as reported to the Federal Reserve Bank of New York by the U.S. government securities dealers on its published list of primary dealers. Monthly averages are based on the number of trading days in the month. Transactions are assumed to be evenly distributed among the trading days of the report week. Immediate, forward, and futures transactions are reported at principal value, which does not include accrued interest; options transactions are reported at the face value of the underlying securities. Dealers report cumulative transactions for each week ending Wednesday. 2. Outright transactions include immediate and forward transactions. Immediate delivery refers to purchases or sales of securities (other than mortgage-backed federal agency securi ties) for which delivery is scheduled in five business days or less and “ when-issued” securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Forward transactions are agreements made in the over-the-counter market that specify delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt securities are included when the time to delivery is more than five business days. Forward contracts for mortgage-backed agency securities are included when the time to delivery is more than thirty business days. 3. Futures transactions are standardized agreements arranged on an exchange. All futures transactions are included regardless of time to delivery. 4. Options transactions are purchases or sales of put and call options, whether arranged on an organized exchange or in the over-the-counter market, and include options on futures contracts on U.S. Treasury and federal agency securities. NOTE, “ n.a.” indicates that data are not published because of insufficient activity. Federal Finance 1.43 U.S. GOVERNM ENT SECURITIES DEALERS A29 Positions and Financing' Millions of dollars 2000 2000, week ending Item Oct. Sept. Nov. Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Positions2 N et Ou trig ht p o sitio n s 3 By type o f security 9,758 4,172 6,870 10,965 4,413 8,272 3,785 7,747 25,627 24,064 7,224 -2 9 ,3 9 2 -17 ,3 7 5 2,452 -3 0 ,4 7 2 -1 7 ,3 8 0 3,125 -2 8 ,5 4 5 -1 1 ,0 0 5 3,015 -3 2 ,8 9 6 -2 0 ,8 8 9 3,526 -28,111 -1 0 ,0 5 4 3,084 -2 9 ,5 4 9 -1 3 ,3 2 3 3,334 -2 8 ,2 6 5 -1 0,171 3,410 -2 8 ,2 6 5 -9 ,0 2 7 2,366 -2 4 ,1 3 6 -1 1 ,2 3 0 1,560 -2 1 ,5 5 5 -1 4 ,3 1 7 1,872 -1 6 ,7 4 6 -13,971 1,867 37,057 33,428 29,599 30,822 29,824 30,166 29,728 27,784 34,622 30,133 28,910 13,999 13,990 16,088 14,176 14,896 17,318 16,125 16,263 16,245 15,876 16,878 4,628 1,696 14,544 5,672 1,978 14,541 7,057 4,043 12,132 4,918 1,257 11,406 9,516 3,579 13,852 7,014 4,490 11,158 6,217 4,667 11,308 5,866 3,818 12,288 6,499 4,163 12,297 10,167 3,742 13,939 7,357 6,157 13,899 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coupon securities, by maturity Federal agency Coupon securities, by maturity 7 More than one year, but less than Net F utures P o sitions 4 By type o f deliverable security Coupon securities, by maturity 4,480 1,600 0 1,921 -2 ,7 4 5 0 3,304 1,521 0 3,902 -5 1 5 0 1,220 -1 ,4 1 4 0 2,458 -3 ,8 4 4 0 274 -5 ,7 9 7 0 -6 5 7 -2 ,8 7 9 0 -4 2 3 -3 ,9 0 1 0 20 -2 ,9 6 0 0 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -7 3 7 0 0 -1 ,2 3 2 0 0 -1 ,3 6 4 0 0 -1 ,1 7 5 0 0 -1 ,1 8 6 0 0 -1 ,3 5 6 0 0 -1 ,4 5 0 0 0 -1 ,541 0 0 -1 ,0 0 4 0 0 -7 4 0 0 0 -3 1 7 0 Coupon securities, by maturity 16 More than one year, but less than or equal to five years .................... 0 1,995 1,365 0 N et O ptions Positions By type o f deliverable security 0 0 0 0 0 0 0 0 0 0 0 2,489 1,242 0 1,541 771 0 -1 ,7 6 8 -2 0 3 0 949 967 0 -1,601 -1 3 0 -1 ,5 8 7 323 0 —2,132 54 0 -2 ,2 1 8 -1,201 0 -1 ,2 2 9 -1 ,2 0 1 0 -2 8 3 -4 6 7 0 98 110 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 88 33 4,328 41 208 3,895 -2 0 9 259 2,892 24 207 4,377 -1 n.a. 2,118 -3 0 4 248 1,661 -3 0 9 206 4,107 -2 6 6 306 3,658 -1 4 8 427 1,575 -5 9 7 378 2,767 -6 1 0 534 2,494 Coupon securities, by maturity 22 Inflation-indexed .......................................... Federal agency Coupon securities, by maturity 25 More than one year, but less than or equal to five years .................... 27 M ortgage-backed.......................................... Financing5 Reverse repurchase agreements 28 Overnight and c o n tin u in g ........................... 29 Term .............................................................. 282,991 777,783 289,809 832,733 310,115 824,867 314,011 869,730 300,565 909,956 326,471 758,572 279,769 825,576 327,590 799,505 348,676 821,004 328,712 826,114 335,487 845,610 Securities borrowed 30 Overnight and c o n tin u in g ........................... 31 Term .............................................................. 283,528 114,413 289,467 117,80! 271,420 123,967 281,225 117,503 283,982 120,515 279,538 120,590 263,438 127,509 259,282 126,942 257,697 132,603 261,575 135,102 263,144 138,700 Securities received as pledge 32 Overnight and c o n tin u in g ........................... 33 Term .............................................................. 2,232 n.a. 2,228 n.a. 2,748 n.a. 2,214 n.a. 2,527 n.a. 2,599 n.a. 2,909 n.a. 3.001 n.a. 2,971 n.a. 2,742 n.a. Repurchase agreements 34 Overnight and co n tin u in g ........................... 35 Term .............................................................. 738,371 707,207 729,081 772,976 724,736 796,328 737,650 818,047 743,744 860,069 757,881 717,776 642,402 848,419 744,180 759,746 786,976 769,715 776,360 778,736 766,948 803,143 Securities loaned 36 Overnight and co n tin u in g ........................... 37 Term .............................................................. 6,935 6,189 7,252 5,314 8,221 4,465 7,396 4,984 8,400 4,498 8,446 4,410 7,995 4,418 8,178 4,461 8,109 4,459 7,839 4,478 7,989 4,143 Securities pledged 38 Overnight and c o n tin u in g ........................... 39 Term .............................................................. 61,552 4,432 60,045 4,689 56,285 3,981 58,686 4,564 59,855 4,560 56,556 4,162 54,741 3,345 54,039 3,757 53,519 4,109 55,368 4,315 57,569 4,227 Collateralized loans 40 T o ta l................................................................ 22,972 27,796 26,695 26,455 26,942 27,820 28,222 23,245 30,783 24,367 26,876 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 posi tions 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 n.a. n.a. securities are included when the time to delivery is more than five business days. Forward contracts for mortgage-backed agency securities are included when the time to delivery is more than thirty business days. 4. Futures positions reflect standardized agreements arranged on an exchange. All futures positions are included regardless of time to delivery. 5. Overnight financing refers to agreements made on one business day that mature on the next business day; continuing contracts are agreements that remain in effect for more than one business day but have no specific maturity and can be terminated without advance notice by either party; term agreements have a fixed maturity o f more than one business day. Financing data are reported in terms of actual funds paid or received, including accrued interest. NOTE, “n.a.” indicates that data are not published because of insufficient activity. A30 1.44 Domestic Financial Statistics □ March 2001 FED ERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2000 Agency 1996 1997 1998 1999 June July Aug. Sept. Oct. 1 Federal and federally sponsored agencies .......................................... 925,823 1,022,609 1,296,477 1,616,492 1,706,709 1,726,016 1,763,089 1,776,334 ,, 2 Federal agencies ........................................................................................... 3 Defense Department1................................................................................ 4 Export-Import Bank2-3.............................................................................. 5 Federal Housing Administration4 .......................................................... 6 Government National Mortgage Association certificates of participation5 .................................................................................... 7 Postal Service6 ........................................................................................... 8 Tennessee Valley Authority ................................................................... 9 United States Railway Association6 ..................................................... 29,380 6 1,447 84 27,792 6 552 102 26,502 6 n.a. 205 26,376 6 n.a. 126 26,669 6 n.a. 185 26,094 6 n.a. 205 25,892 6 n.a. 210 25,993 6 n.a. 227 n.a. n.a. n.a. 27,853 n.a. n.a. n.a. 27,786 n.a. n.a. n.a. 26,496 n.a. n.a. n.a. 26,370 n.a. n.a. n.a. 26,663 n.a. n.a. n.a. 26,088 n.a. n.a. n.a. 25,886 n.a. n.a. n.a. 25,987 n.a. 10 Federally sponsored agencies7 ................................................................... 11 Federal Home Loan B a n k s ..................................................................... 12 Federal Home Loan Mortgage C orporation........................................ 13 Federal National Mortgage A sso ciatio n .............................................. 14 Farm Credit Banks8 .................................................................................. 15 Student Loan M arketing A ssociation9 .............................................. 16 Financing Corporation10 ........................................................................... 17 Farm Credit Financial Assistance Corporation" ............................... 18 Resolution Funding Corporation1 2 ....................................................... 896,443 263,404 156,980 331,270 60,053 44,763 8,170 1,261 29,996 994,817 313,919 169,200 369,774 63,517 37,717 8,170 1,261 29,996 1,269,975 382,131 287,396 460,291 63,488 35,399 8,170 1,261 29,996 1,590,116 529,005 360,711 547,619 68,883 41,988 8,170 1,261 29,996 1,680,040 568,438 384,286 578,500 69,541 37,263 8,170 1,261 29,996 1,699,922 565,037 399,370 579,448 69,757 44,223 8,170 1,261 29,996 1,737,197 572,836 412,656 595,117 70,139 44,113 8,170 1,261 29,996 1,750,341 580,579 406,936 607,000 71,055 42,423 8,170 1,261 29,996 M emo 19 Federal Financing Bank debt1 3 .............................................................. 58,172 49,090 44,129 42,152 38,513 38,143 38,040 42,837 Lending to federal and federally sponsored agencies Export-Import Bank3 .................................................................................... Postal Service6 ............................................................................................... Student Loan Marketing A sso ciatio n....................................................... Tennessee Valley A uthority......................................................................... United States Railway Association6 .......................................................... 1,431 n.a. n.a. n.a. n.a. 552 n.a. n.a. n.a. n.a. Other lending14 25 Farmers Home Administration .................................................................. 26 Rural Electrification Adm inistration.......................................................... 27 Other ............................................................................................................... 18,325 16,702 21,714 13,530 14,898 20,110 20 21 22 23 24 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 under family housing and homeowners assistance programs. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 3. On-budget since Sept. 30, 1976. 4. Consists of debentures issued in payment of Federal Housing Administration insurance claims. Once issued, these securities may be sold privately on the securities market. 5. Certificates of participation issued before fiscal year 1969 by the Government National Mortgage Association acting as trustee for the Farmers Home Administration; the Department of Health, Education, and Welfare; the Department of Housing and Urban Development; the Small Business Administration; and the Veterans Administration. 6. Off-budget. 7. Includes outstanding noncontingent liabilities; notes, bonds, and debentures. Includes Federal Agricultural Mortgage Corporation; therefore, details do not sum to total. Some data are estimated. 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is shown on line 17. 9. Before late 1982, the association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. T T T T T T n.a. 1 n.a. 1 n.a. 1 n.a. 1 n.a. 1 n.a. 1 9,500 14,091 20,538 6,665 14,085 21,402 6,040 13,121 19,352 5,760 13,165 19,218 5,660 13,238 19,142 5,540 12,989 24,308 1 1 1 1 576,689 422,960 615,463 71,345 48,988 8,170 1,261 29,996 n.a. > n.a. 1 10. The Financing Corporation, established in August 1987 to recapitalize the Federal Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 12. The Resolution Funding Corporation, established by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989. 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the purpose of lending to other agencies, its debt is not included in the main portion of the table to avoid double counting. 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally being small. The Farmers Home Administration entry consists exclusively of agency assets, whereas the Rural Electrification Administration entry consists of both agency assets and guaranteed loans. Securities Markets and Corporate Finance A31 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governm ents Millions of dollars 2000 Type of issue or issuer, or use 1997 1998 1999 May June July Aug. Sept. Oct. Nov. Dec. 1 All issues, new and refunding1.............................................. 214,694 262,342 215,427 14,136 20,208 12,827 15,284 15,598 18,035 18,079 15,348 By type o f issue 2 General obligation....................................................................... 3 Revenue ......................................................................................... 69,934 134,989 87,015 175,327 73,308 142,120 6,051 8,086 8,581 11,628 4,256 8,572 5,194 10,090 6,888 8,710 5,871 12,163 5,044 13,036 5,060 10,288 By type o f issuer 4 State ............................................................................................... 5 Special district or statutory au th o rity ................................... 6 Municipality, county, or township .......................................... 18,237 134,919 70,558 23,506 178,421 60,173 16,376 152,418 46,634 1,102 9,639 3,396 2,907 13,520 3,782 783 8,545 3,500 1,011 10,728 3,545 2.022 10,152 3,424 3,005 11,224 3,806 1,942 12,311 3,827 1,640 1,053 3,165 7 Issues for new c a p ita l.............................................................. 135,519 160,568 161,065 12,481 16,987 11,297 12,402 13,968 16,387 14,520 13,286 31,860 13,951 12,219 27,794 6,667 35,095 36,904 19,926 21,037 n.a. 8,594 42,450 36,563 17,394 15,098 n.a. 9,099 47,896 3,662 1,778 537 n.a. 585 3,557 4,465 1,093 1,141 n.a. 1,150 5,776 3,185 1,947 353 n.a. 632 2,543 3,630 1,979 1,409 n.a. 281 3,564 3,210 1,574 1,408 n.a. 387 5,243 3,492 2,575 1,272 n.a. 730 6,558 3,446 2,124 1,973 n.a. 500 3,787 2,919 1,381 1,307 n.a. 615 4,264 8 9 10 11 12 By use o f proceeds E d ucation ...................................................................................... Transportation ............................................................................. Utilities and c onservation.......................................................... Social welfare .............................................................................. Industrial aid ................................................................................ 1. Par amounts of long-term issues based on date of sale. 2. Includes school districts. 1.46 N EW SECURITY ISSUES SOURCE. Securities Data Company beginning January 1990; Investment D ealer’s Digest before then. U.S. Corporations Millions of dollars 2000 Type of issue, offering, or issuer 1997 1998 1999 Apr. May June July Aug. Sept. Oct. Nov. 929,256 1,128,491 1,072,866 61,963 62,939 100,615 65,511 82,752 94,492 62,466r 95,495 2 Bonds2 ................................................................... 811,376 1,001,736 941,298 40,941 58,233 92,742 57,476 69,875 88,102 53,345 84,094 By type o f offering 3 Sold in the United States ................................. 4 Sold abroad .......................................................... 708.188 103.188 923,771 77,965 818,683 122,615 36,724 4,217 45,986 12,247 75,271 17,471 40,753 16,723 56,133 13,742 73,516 14,586 47,415 5,930 76,383 7,711 M emo 5 Private placements, dom estic............................. n.a. 228 2,694 3,391 1,038 241 376 By industry group 6 N onfinancial.......................................................... 7 F in an cial................................................................ 222,603 588,773 307,935 693,801 293,963 647,335 8,060 32,881 20,832 37,401 29,412 63,331 15,885 41,592 17,947 51,928 24,483 63,619 12,547 40,799 25,826 58,269 8 Stocks3 ................................................................... 173,330 205,605 217,868 21,022 4,706 7,873 8,035 12,877 6,390 9,121 11,498 By type o f offering 9 Pubiic ..................................................................... 10 Private placement4 ............................................... 117,880 55,450 126,755 78,850 131,568 86,300 21,022 n.a. 4,706 n.a. 7,873 n.a. 8,035 n.a. 12,877 n.a. 6,390 n.a. 9.121 n.a. 11,498 n.a. By industry group 11 N onfinancial.......................................................... 12 F inancial................................................................ 60,386 57,494 74,113 52,642 110.284 21.284 16,763 4,259 4,522 184 6,521 1,352 7,773 262 8,645 4,232 6,205 185 8,278 843 10,791 707 n.a. n.a. 1. Figures represent gross proceeds of issues maturing in more than one year; they are the principal amount or number of units calculated by multiplying by the offering price. Figures exclude secondary offerings, employee stock plans, investment companies other than closedend, intracorporate transactions, and Yankee bonds. Stock data include ownership securities issued by limited partnerships. 2. Monthly data include 144(a) offerings. 3. Monthly data cover only public offerings. 4. Data are not available. SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve System. 127r 5,534 A3 2 Domestic Financial Statistics □ March 2001 1.47 O PEN-END INVESTMENT COMPANIES Net Sales and A ssets1 Millions of dollars 2000 Item 1999 2000 May June July Aug. Sept. Oct. Nov.r Dec. 1 Saies of own shares2 ................................................... 1,791,894 2,279,522 172,718 181,866 166,815 179,890 159,809 169,071 143,412 170,462 2 Redemptions of own s h a re s ........................................ 3 Net sales3......................................................................... 1,621,987 169,906 2,057,780 221,742 162,984 9,735 161,462 20,404 151,717 15,098 159,027 20,864 147,644 12,166 153,067 16,004 138,791 4,621 161,421 9,041 4 Assets4 .............................................................................. 5,233,191 5,121,401 5,232,319 5,458,914 5,392,308 5,745,264 5,550,176 5,442,937 4,993,008 5,121,401 5 Cash5 ................................................................................ 6 O t h e r ................................................................................ 219,189 5,014,002 278,726 4,842,675 260,426 4,971,892 259,241 5,199,673 258,472 5,133,836 261,967 5,483,298 280,192 5,269,984 302,682 5,140,255 300,133 4,692,875 278,726 4,842,675 1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual funds, 2. Excludes reinvestment of net income dividends and capital gains distributions and share issue of conversions from one fund to another in the same group. 3. Excludes sales and redemptions resulting from transfers of shares into or out of money market mutual funds within the same fund family. 1.48 4. Market value at end of period, less current liabilities. 5. Includes all U.S. Treasury securities and other short-term debt securities. SOURCE. Investment Company Institute. Data based on reports of membership, which comprises substantially all open-end investment companies registered with the Securities and Exchange Commission. Data reflect underwritings of newly formed companies after their initial ofiFering of securities. CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1998 Account 1997 1998 1999 2000 1999 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Profits with inventory valuation and capital consumption adjustment .................................... 2 Profits before taxes ................................................................... 3 Profits-tax liab ility ..................................................................... 4 Profits after ta x e s....................................................................... 5 Dividends ................................................................................ 6 Undistributed profits ............................................................ 833.8 792.4 237.2 555.2 335.2 220.0 815.0 758.2 244.6 513.6 351.5 162.1 856.0 823.0 255.9 567.1 370.7 196.4 803.4 742.3 239.4 502.9 356.1 146.9 852.0 797.6 247.8 549.9 361.1 188.7 836.8 804.5 250.8 553.7 367.2 186.5 842.0 819.0 254.2 564.8 373.9 190.9 893.2 870.7 270.8 599.9 380.6 219.3 936.3 920.7 286.3 634.4 387.3 247.1 963.6 942.5 292.0 650.4 393.0 257.4 970.3 945.1 290.6 654.4 400.1 254.4 7 Inventory v a lu a tio n ................................................................... 8 Capital consumption adjustment .......................................... 8.4 32.9 17.0 39.9 -9 .1 42.1 19.9 41.2 11.4 42.9 - 8 .9 41.2 -1 9 .7 42.7 - 1 9 .2 41.6 - 2 5 .0 40.6 -1 3 .6 34.7 - 4 .5 29.7 SOURCE. U.S. Department of Commerce, Survey o f Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities' Billions of dollars, end of period; not seasonally adjusted 1999 Account 1998 1999 2000 2000 Q2 Q3 Q4 Ql Q2 Q3 Q4 A ssets 1 Accounts receivable, g r o s s " ................................................... 2 Consumer .............................................................................. 3 Business ................................................................................ 4 Real estate ........................................................................... 711.7 261.8 347.5 102.3 811.5 279.8 405.2 126.5 756.5 269.2 373.7 113.5 776.3 271.0 383.0 122.3 811.5 279.8 405.2 126.5 848.7 285.4 434.6 128.8 884.4 294.1 454.1 136.2 900.1 301.9 455.7 142.4 5 LESS: Reserves for unearned income ................................. 6 Reserves for losses ..................................................... 56.3 13.8 53.5 13.5 53.4 13.4 54.0 13.6 53.5 13.5 54.0 14.0 57.1 14.4 58.8 14.2 7 Accounts receivable, net ........................................................ 8 All other .................................................................................... 641.6 337.9 744.6 406.3 689.7 373.2 708.6 368.5 744.6 406.3 780.7 412.7 813.0 418.3 827.1 441.4 9 Total assets .............................................................................. 979.5 1,150.9 1,062.9 1,077.2 1,150.9 1,193.4 1,231.3 1,268.4 10 Bank loans ................................................................................ 11 Commercial paper ................................................................... 26.3 231.5 35.1 227.9 25.1 231.0 27.0 205.3 35.1 227.9 28.5 230.2 32.5 221.3 35.4 215.6 Debt Owed to p a re n t......................................................................... Not elsewhere classified.......................................................... All other liabilities ................................................................... Capital, surplus, and undivided profits ............................... 61.8 339.7 203.2 117.0 123.8 397.0 222.7 144.5 65.4 383.1 226.1 132.2 84.5 396.2 216.0 148.2 123.8 397.0 222.7 144.5 145.1 412.0 247.6 130.1 137.1 445.4 259.3 135.6 144.3 465.5 269.2 138.3 16 Total liabilities and capital ................................................. 979.5 1,150.9 1,062.9 1,077.2 1,150.9 1,193.4 1,231.3 1,268.4 n.a. n.a. L ia bilities and C apital 12 13 14 15 1. Includes finance company subsidiaries of bank holding companies but not of retailers and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown, as they are not on the books. 2. Before deduction for unearned income and losses. Excludes pools of securitized assets, Securities Market and Corporate Finance A33 1.52 DOM ESTIC FIN ANCE COM PANIES Owned and M anaged R eceivables1 Billions of dollars, amounts outstanding 2000 Type of credit 1997 1998 1999 June July Aug. Sept. Oct.' Nov. Seasonally adjusted 1 Total ........................................................................................................ 810.5 875.8 993.9 1,076.9 1,089.1 1,094.1 1,112.1r 1,133.7 1,132.9 2 3 4 327.9 121.1 361.5 352.8 131.4 391.6 385.3 154.7 453.9 401.4 163.7 511.7 405.9 167.5 515.8 411.1 169.0 514.1 419.7 170.9 521.6r 437.3 174.0 522.3 438.9 175.9 518.0 l,106.8r Consumer ........................................................................................... Real estate ......................................................................................... Business ............................................................................................. Not seasonally adjusted 5 Total ........................................................................................................ 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Consumer ........................................................................................... Motor vehicles loans .................................................................. Motor vehicle leases .................................................................. Revolving" .................................................................................... Other3 ............................................................................................. Securitized assets4 Motor vehicle loans ................................................................ Motor vehicle leases .............................................................. Revolving .................................................................................. O t h e r ........................................................................................... Real estate ......................................................................................... One- to four-family ..................................................................... O t h e r ............................................................................................... Securitized real estate assets4 One- to four-family ................................................................ Other ........................................................................................... Business ............................................................................................. Motor vehicles .............................................................................. Retail lo a n s ................................................................................ Wholesale loans5 ..................................................................... Leases ......................................................................................... Equipment .................................................................................... Loans ......................................................................................... Leases ......................................................................................... Other business receivables6 ....................................................... Securitized assets4 Motor vehicles ......................................................................... Retail lo a n s ........................................................................... Wholesale loans ................................................................... Leases .................................................................................... Equipm ent.................................................................................. Loans ....................................................................................... Leases .................................................................................... Other business receivables6..................................................... 818.1 884.0 1,003.2 1,082.3 1,082.2 1,087.9 1,131.7 1,134.5 330.9 87.0 96.8 38.6 34.4 356.1 103.1 93.3 32.3 33.1 388.8 114.7 98.3 33.8 33.1 403.9 126.5 103.9 33.1 30.7 408.3 129.4 104.4 33.6 31.5 412.3 130.7 105.4 33.6 32.3 421.0 130.1 104.6 35.4 31.7 437.9 131.8 104.3 37.1 31.9 440.5 127.8 104.0 37.1 32.0 44.3 10.8 .0 19.0 121.1 59.0 28.9 54.8 12.7 8.7 18.1 131.4 75.7 26.6 71.1 9.7 10.5 17.7 154.7 88.3 38.3 74.1 7.9 11.1 16.6 163.7 96.6 39.6 74.5 7.6 10.9 16.4 167.5 100.5 39.7 76.2 7.4 10.7 16.2 169.0 101.7 40.2 78.8 7.2 17.2 16.0 170.9 100.9 41.5 84.3 7.0 25.8 15.7 174.0 104.6 41.8 91.5 6.8 25.8 15.5 175.9 107.0 42.0 33.0 .2 366.1 63.5 25.6 27.7 10.2 203.9 51.5 152.3 51.1 29.0 .1 396.5 79.6 28.1 32.8 18.7 198.0 50.4 147.6 69.9 28.0 .2 459.6 87.8 33.2 34.7 19.9 221.9 52.2 169.7 95.5 27.4 .2 514.7 94.5 33.8 38.4 22.3 250.0 56.7 193.3 109.7 27.1 .2 506.4 89.4 34.1 32.9 22.3 248.6 54.8 193.9 109.4 26.8 .2 506.7 89.6 34.3 32.6 22.7 250.0 54.3 195.8 108.3 26.5 1.9 514.9r 94.1 34.8 35.5 23.7 256.7 55.8 200.9 104.9 25.7 1.9 519.8 95.9 34.7 37.5 23.7 258.5 56.1 202.4 103.7 25.0 1.9 518.2 93.3 32.3 37.3 23.8 257.6 54.7 202.9 103.2 33.0 2.4 30.5 .0 10.7 4.2 6.5 4.0 29.2 2.6 24.7 1.9 13.0 6.6 6.4 6.8 31.5 2.9 26.4 2.1 14.6 7.9 6.7 8.4 31.7 2.9 26.4 2.4 22.3 15.8 6.4 6.6 29.8 2.8 24.6 2.4 22.5 16.0 6.5 6.8 29.6 2.7 24.5 2.4 22.4 15.9 6.5 6.8 31.9r 2.4 27. l r 2.4 21.4 15.1 6.4 5.8 34.2 2.3 29.5 2.4 21.7 14.9 6.7 5.8 37.0 3.1 31.5 2.4 21.3 14.6 6.7 5.8 NOTE. This table has been revised to incorporate several changes resulting from the benchmarking of finance company receivables to the June 1996 Survey of Finance Compa nies. In that benchmark survey, and in the monthly surveys that have followed, more detailed breakdowns have been obtained for some components. In addition, previously unavailable data on securitized real estate loans are now included in this table. The new information has resulted in some reclassification of receivables among the three major categories (consumer, real estate, and business) and in discontinuities in some component series between May and June 1996. Includes finance company subsidiaries of bank holding companies but not of retailers and banks. Data in this table also appear in the Board’s G.20 (422) monthly statistical release. For ordering address, see inside front cover. 1. Owned receivables are those carried on the balance sheet of the institution. Managed receivables are outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. Data are shown before deductions for unearned income and losses. Components may not sum to totals because of rounding. 2. Excludes revolving credit reported as held by depository institutions that are subsidiar ies of finance companies. 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of consumer goods, such as appliances, apparel, boats, and recreation vehicles. 4. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. 5. Credit arising from transactions between manufacturers and dealers, that is, floor plan financing. 6. Includes loans on commercial accounts receivable, factored commercial accounts, and receivable dealer capital; small loans used primarily for business or farm purposes; and wholesale and lease paper for mobile homes, campers, and travel trailers. A34 1.53 Domestic Financial Statistics □ March 2001 M O RTG AGE M ARKETS M ortgages on New Homes Millions of dollars except as noted 2000 Item 1998 1999 2000 June July Aug. Sept. Oct. Nov. Dec. Terms and yields in primary and secondary markets P rimary M arkets 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)' Yield (percent per year) 6 Contract rate1 ................................................. 7 Effective rate1'3 .............................................. 8 Contract rate (HUD series)4 ........................ 210.7 161.7 78.7 28.8 .77 234.5 177.0 77.4 29.2 .70 238.6 178.3 76.9 29.2 .69 235.8 178.3 77.7 29.3 6.95 7.08 7.00 6.94 7.06 7.45 7.41 7.52 7.40 7.50 7.41 7.51 7.04 6.43 7.74 7.03 195.2 151.1 80.0 28.4 237.0 179.7 77.7 29.3 241.9 182.5 77.1 29.2 .70 240.2 180.4 77.2 29.2 .69 247.2 184.2 76.2 29.2 .69 250.0 187.3 76.5 29.1 .73 7.44 7.54 7.41 7.52 7.43 7.53 7.36 7.47 7.29 7.40 .66 Secondary M arkets Yield (percent per year) 9 FHA mortgages (Section 203)5 10 GNMA securities6 .................... Activity in secondary markets F ederal N ational M ortgage A ssociation Mortgage holdings (end o f period) 11 Total ........................................................................................... 12 FHA/VA in su re d .................................................................. 13 C onventional......................................................................... 414,515 33,770 380,745 523,941 55,318 468,623 610.122 61,539 548,583 552,166 59,703 492,463 561,045 60,397 500,648 568,187 60,150 508,037 574,087 59,961 514,126 586,756 60,329 526,427 598,951 60,694 538,257 610,122 61,539 548,583 14 Mortgage transactions purchased (during p e rio d )............. 188,448 195,210 154,231 12,842 15,128 13,352 11,501 18,444 17,322 17,193 Mortgage commitments (during period) 15 Issued7 ......................................................................................... 16 To sell8 ...................................................................................... 193,795 1,880 187,948 5,900 163,689 11,786 11,825 1,254 16,660 436 14,253 236 16,143 693 17,435 268 15,287 676 20,120 1,436 Mortgage holdings (end o f period)8 17 Total ........................................................................................... 18 FHA/VA in su re d .................................................................. 19 C onventional......................................................................... 255.010 785 254,225 324,443 1,836 322,607 385,693 3,332 382,361 350,836 2,892 347,944 354,020 2,858 351,162 357,002 2,903 354,099 361,624 3,517 358,107 365,198 3,530 361,668 372,819 3,321 369,498 385,693 3,332 382,361 Mortgage transactions (during period) 20 Purchases .................................................................................. 21 Sales ........................................................................................... 267,402 250,565 239,793 233,031 174,043 166,901 12,271 11,806 10,912 10,539 16,056 15,558 21,748 21,189 16,195 15,614 19,402 18,823 24,313 22,277 22 Mortgage commitments contracted (during period)9 ......... 281,899 228,432 169,231 13,596 10,803 17,468 19,481 17,915 20,012 21,780 Federal Hom e L oan M o rtg ag e C orporation 1. Weighted averages based on sample surveys of mortgages originated by major institu tional 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 m ortgages insured by the Federal Housing Adm inistration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. 6. Average net yields to investors on fully modified pass-through securities backed by mortgages and guaranteed by the Government National Mortgage Association (GNMA), assuming prepayment in twelve years on pools of thirty-year mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. 7. Does not include standby commitments issued, but includes standby commitments converted. 8. Includes participation loans as well as whole loans. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Mortgage Corporation’s mortgage commitments and mortgage transactions include activity under mortgage securities swap programs, whereas the corresponding data for FNMA exclude swap activity. Real Estate 1.54 A35 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1999 Type of holder and property 1996 1997 2000 1998 Q2 Q3 Q4 Ql Q2 1 All holders .................................................................................................... 4,865,412 5,197,838 5,722,645 6,015,365 6,224,771 6,375,447 6,489,770 6,659,097 By type o f property One- to four-family residences.................................................................. Multifamily residences ................................................................................ Nonfarm, nonresidential .............................................................................. Farm ............................................................................................................... 3,716,055 288,579 773,643 87,134 3,967,842 301,838 837,859 90,299 4,353,048 329,813 943,278 96,506 4,559,021 348,658 1,008,048 99,638 4,690,310 359,323 1,073,743 101,395 4,786,609 373,189 1,112,686 102,962 4,862,747 381,699 1,141,577 103,748 4,982,853 392,919 1,175,641 107,685 By type o f holder 6 Major financial institutions......................................................................... 7 Commercial banks2 .................................................................................. 8 One- to four-fam ily.............................................................................. 9 Multifamily ........................................................................................... 10 Nonfarm, nonresidential .................................................................... 11 Farm ...................................................................................................... 12 Savings institutions3 ................................................................................ 13 One- to four-fam ily............................................................................. 14 Multifamily ........................................................................................... 15 Nonfarm, nonresidential .................................................................... Farm ...................................................................................................... 16 17 Life insurance c o m p a n ie s....................................................................... 18 One- to four-fam ily.............................................................................. Multifamily ........................................................................................... 19 20 Nonfarm, nonresidential ..................................................................... 21 Farm ...................................................................................................... 1,981,886 1,145,389 677,603 45,451 397,452 24,883 628,335 513,712 61,570 52,723 331 208,162 6,977 30,750 160,315 10,120 2,083,881 1,245,315 745,510 49,670 423,148 26,986 631,726 520,682 59,540 51,150 354 206,840 7,187 30,402 158,779 10,472 2,194,813 1,337,217 797,492 54,116 456,574 29,035 643,957 533,918 56,821 52,801 417 213,640 6,590 31,522 164,004 11,524 2,242,431 1,361,365 790,372 60,529 479,930 30,536 656,518 544,962 55,016 56,096 443 224,548 7,292 31,800 173,495 11,961 2,321,356 1,418,819 827,291 63,964 496,246 31,320 676,346 560,622 57,282 57,983 459 226,190 7,432 31,998 174,571 12,189 2,394,923 1,495,502 879,552 67,591 516,520 31,839 668,634 549,072 59,138 59,948 475 230,787 5,934 32,818 179,048 12,987 2,456,786 1,546,816 904,581 72,431 537,131 32,673 680,745 560,046 57,759 62,447 493 229,225 5,874 32,602 177,870 12,879 2,551,751 1,614,307 948,496 75,713 556,382 33,717 701,992 578,641 59,142 63,691 518 235,452 4,826 33,669 182,514 14,444 22 Federal and related agencies ..................................................................... Government National Mortgage A ssociation...................................... 23 24 One- to four-fam ily............................................................................. Multifamily ........................................................................................... 25 26 Farmers Home Administration4 ............................................................ 27 One- to four-fam ily.............................................................................. 28 Multifamily ........................................................................................... 29 Nonfarm, nonresidential ..................................................................... 30 Farm ...................................................................................................... 31 Federal Housing and Veterans’ A dm inistrations............................... One- to four-fam ily.............................................................................. 32 33 Multifamily ........................................................................................... 34 Resolution Trust C orporation ................................................................ One- to four-fam ily.............................................................................. 35 36 Multifamily ........................................................................................... 37 Nonfarm, nonresidential ..................................................................... 38 Farm ...................................................................................................... 39 Federal Deposit Insurance Corporation .............................................. 40 One- to four-fam ily.............................................................................. 41 Multifamily ........................................................................................... 42 Nonfarm, nonresidential ..................................................................... Farm ...................................................................................................... 43 44 Federal National Mortgage A ssociation .............................................. 45 One- to four-fam ily.............................................................................. Multifamily ........................................................................................... 46 47 Federal Land Banks ................................................................................ 48 One- to four-fam ily.............................................................................. 49 Farm ...................................................................................................... 50 Federal Home Loan Mortgage C orporation........................................ 51 One- to four-fam ily.............................................................................. 52 Multifamily ........................................................................................... 295,192 2 2 0 41,596 17,303 11,685 6,841 5,768 6,244 3,524 2,719 0 0 0 0 0 2,431 365 413 1,653 0 168,813 155,008 13,805 29,602 1,742 0 46,504 41,758 4,746 286,194 8 8 0 41,195 17,253 11,720 7,370 4,852 3,811 1,767 2,044 0 0 0 0 0 724 109 123 492 0 161,308 149,831 11,477 30,657 1,804 0 48,454 42,629 5,825 293,613 7 7 0 40,851 16,895 11,739 7,705 4,513 3,674 1,849 1,825 0 0 0 0 0 361 54 61 245 0 157,675 147,594 10,081 32,983 1,941 0 57,085 49,106 7,979 289,519 8 8 0 40,766 16,653 11,735 7,943 4,435 3,490 1,623 1,867 0 0 0 0 0 189 28 32 129 0 155,637 145,033 10,604 33,666 1,981 0 54,282 43,574 10,708 322,572 8 8 0 73,705 16,583 11,745 41,068 4,308 3,889 2,013 1,876 0 0 0 0 0 163 24 28 111 0 153,172 142,982 10,190 34,217 2,013 0 55,695 44,010 11,685 322,352 7 7 0 73,871 16,506 11,741 41,355 4,268 3,712 1,851 1,861 0 0 0 0 0 152 23 26 103 0 151,500 141,195 10,305 34,187 2,012 0 56,676 44,321 12,355 323,145 7 7 0 72,899 16,456 11,732 40,509 4,202 3,794 1,847 1,947 0 0 0 0 0 98 15 17 67 0 150,312 139,986 10,326 34,142 2,009 0 57,009 43,384 13,625 334,715 7 7 0 72,896 16,435 11,729 40,554 4,179 3,845 1,832 2,013 0 0 0 0 0 72 11 12 49 0 155,364 144,335 11,029 34,820 2,039 0 56,972 42,892 14,080 53 Mortgage pools or trusts5 ........................................................................... 54 Government National Mortgage A ssociation...................................... One- to four-fam ily.............................................................................. 55 56 Multifamily ........................................................................................... 57 Federal Home Loan Mortgage C orporation........................................ 58 One- to four-fam ily.............................................................................. 59 Multifamily ........................................................................................... 60 Federal National Mortgage A sso ciatio n .............................................. One- to four-fam ily.............................................................................. 61 62 Multifamily ........................................................................................... Farmers Home Administration4 ............................................................ 63 64 One- to four-fam ily.............................................................................. Multifamily ........................................................................................... 65 66 Nonfarm, nonresidential ..................................................................... 67 Farm ...................................................................................................... 68 Private mortgage conduits ..................................................................... 69 One- to four-family6 ........................................................................... 70 Multifamily ........................................................................................... 71 Nonfarm, nonresidential ..................................................................... Farm ...................................................................................................... 72 2,040,847 506,246 494,064 12,182 554,260 551,513 2,747 650,779 633,209 17,570 3 0 0 0 3 329,559 258,800 16,369 54,390 0 2,239,350 536,879 523,225 13,654 579,385 576,846 2,539 709,582 687,981 21,601 2 0 0 0 2 413,502 316,400 21,591 75,511 0 2,589,763 537,446 522,498 14,948 646,459 643,465 2,994 834,517 804,204 30,313 1 0 0 0 1 571,340 412,700 34,323 124,317 0 2,810,119 553,196 537,287 15,909 718,085 714,844 3,241 911,435 877,863 33,572 1 0 0 0 1 627,402 447,938 39,435 140,029 0 2,891,187 569,038 552,670 16,368 738,581 735,088 3,493 938,484 903,531 34,953 0 0 0 0 0 645,084 455,276 40,936 148,873 0 2,954,792 582,263 565,189 17,074 749,081 744,619 4,462 960,883 924,941 35,942 0 0 0 0 0 662,565 462,600 42,628 157,337 0 3,000,280 589,203 571,517 17,686 757,106 752,607 4,499 975,815 938,898 36,917 0 0 0 0 0 678,156 471,390 43,835 162,930 0 3,041,396 590,903 572,856 18,047 768,641 763,890 4,751 995,815 957,584 38,231 0 0 0 0 0 686,037 471,000 44,931 170,106 0 73 Individuals and others7 ................................................................................ 74 One- to four-fam ily.................................................................................. Multifamily ............................................................................................... 75 76 Nonfarm, nonresidential ......................................................................... 77 Farm .......................................................................................................... 547,486 360,476 68,572 100,269 18,169 588,413 376,574 71,651 121,409 18,779 644,456 413,770 73,081 137,632 19,974 673,297 428,202 74,090 150,428 20,577 689,656 439,219 74,629 154,892 20,916 703,379 446,771 77,016 158,375 21,217 709,560 449,496 78,074 160,622 21,368 731,235 467,572 79,272 162,345 22,046 2 3 4 5 1. Multifamily debt refers to loans on structures of five or more units. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust departments. 3. Includes savings banks and savings and loan associations. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting changes by the Farmers Home Administration. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by the agency indicated. 6. Includes securitized home equity loans. 7. Other holders include mortgage companies, real estate investment trusts, state and local credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and finance companies. SOURCE. Based on data from various institutional and government sources. Separation of nonfarm mortgage debt by type of property, if not reported directly, and interpolations and extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. Line 69 from Inside Mortgage Securities and other sources. A36 1.55 Domestic Financial Statistics □ March 2001 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2000 Holder and type of credit 1997 1998 1999 June July Aug. Sept. Oct. Nov. Seasonally adjusted 1 Total ..................................................................... 1,234,461 1,301,023 1,393,657 1,462,821 1,470,768 1,484,081 1,492,934 1,509,568 1,522,000 2 Revolving ............................................................ 3 Nonrevolving2 ................................................... 531,163 703,297 560,504 740,519 595,610 798,047 634,652 828,170 638,406 832,363 645,121 838,961 649,297 843,637 656,666 852,902 662,800 862,200 Not seasonally adjusted 4 Total ..................................................................... 1,264,103 1,331,742 1,426,151 1,454,035 1,463,292 1,486,048 1,495,627 1,513,688 1,529,800 By major holder Commercial banks ............................................ Finance com p a n ie s............................................ Credit unions ..................................................... Savings institutions .......................................... Nonfinancial b u sin e ss........................................ Pools of securitized assets3 ............................... 512,563 160,022 152,362 47,172 78,927 313,057 508,932 168,491 155,406 51,611 74,877 372,425 499,758 181,573 167,921 61,527 80,311 435,061 506,245 190,268 176,030 60,951 73,500 447,041 506,254 194,438 178,034 61,493 71,956 451,117 520,431 196,555 180,679 62,037 73,030 453,316 521,767 197,276 181,597 62,580 72,091 460,316 521,515 200,815 183,010 62,815 70,842 474,691 527,200 197,800 184,200 63,100 73,800 483,800 By major tvpe o f credit4 11 Revolving.............................................................. 12 Commercial banks ........................................ 13 Finance c o m p a n ie s ........................................ 14 Credit unions................................................... 15 Savings institutions........................................ 16 Nonfinancial b u sin e ss.................................... 17 Pools of securitized assets3 ........................... 555,858 219,826 38,608 19,552 11,441 44,966 221,465 586,528 210,346 32,309 19,930 12,450 39,166 272,327 623,245 189,352 33,814 20,641 15,838 42,783 320,817 627.909 194.793 33,063 20.172 15.455 37,098 327,328 630,633 194,496 33,565 20,476 15,745 36,078 330,273 641,298 204,016 33,558 20,796 16,036 36,669 330,223 645,820 202,362 35,405 20,783 16,327 35,817 335,126 654,678 201,874 37,147 20,804 16,505 34,484 343,833 664,300 206,100 37,051 21,246 16,684 36,430 345,946 18 Nonrevolving........................................................ 19 Commercial banks ........................................ 20 Finance c o m p a n ie s ........................................ 21 Credit unions................................................... 22 Savings institutions........................................ 23 Nonfinancial b u sin e ss.................................... 24 Pools of securitized assets3 ........................... 708,245 292,737 121,414 132,810 35,731 33,961 91,592 745,214 298,586 136,182 135,476 39,161 35,711 100,098 802,906 310,406 147,759 147,280 45,689 37,528 114,244 826,126 311,452 157,205 155,858 45,496 36,402 119,713 832,659 311,758 160,873 157,558 45,748 35,878 120,844 844,750 316,415 162,997 159,883 46,001 36,361 123,093 849,807 319,405 161,871 160,814 46,253 36,274 125,190 859,127 319,548 163,697 162,359 46,310 36,355 130,858 865,404 320,751 159,801 163,176 46,367 37,375 137,934 5 6 7 8 9 10 1. The Board’s series on amounts of credit covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate. Data in this table also appear in the Board’s G.19 (421) monthly statistical release. For ordering address, see inside front cover. 2. Comprises motor vehicle loans, mobile home loans, and all other loans that are not included in revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be secured or unsecured. 1.56 3. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. 4. Totals include estimates for certain holders for which only consumer credit totals are available. TERMS OF CONSUMER CREDIT1 Percent per year except as noted 2000 Item 1997 1998 1999 May June July Aug. Sept. Oct. Nov. I n t e r e s t R a te s Commercial banks2 1 48-month new car ............................................ 2 24-month personal ............................................ 9.02 13.90 8.72 13.74 8.44 13.39 9.21 13.88 n.a. n.a. n.a. n.a. 9.62 13.85 n.a. n.a. n.a. n.a. 9.63 14.12 Credit card plan 3 All accounts ....................................................... 4 Accounts assessed interest ............................. 15.77 15.57 15.71 15.59 15.21 14.81 15.39 14.74 n.a. n.a. n.a. n.a. 15.98 15.35 n.a. n.a. n.a. n.a. 15.99 15.23 Auto finance companies 5 New car .............................................................. 6 Used car .............................................................. 7.12 13.27 6.30 12.64 6.66 12.60 6.51 13.47 6.40 13.58 6.55 13.64 7.46 13.70 7.16 13.91 4.74 13.87 5.44 13.53 Maturity (months) 7 New car .............................................................. 8 Used car .............................................................. 54.1 51.0 52.1 53.5 52.7 55.9 53.5 57.1 55.6 57.3 55.6 57.2 55.7 57.2 55.9 57.0 57.6 57.0 57.3 56.8 Loan-to-value ratio 9 New car .............................................................. 10 Used car .............................................................. 92 99 92 99 92 99 93 99 92 99 92 100 92 100 91 100 93 100 93 100 Amount financed (dollars) 11 New car .............................................................. 12 Used car .............................................................. 18,077 12,281 19,083 12,691 19,880 13,642 20,621 14,132 20,349 14,245 20,406 14,269 20,664 14,166 21,010 13,950 22,069 13,978 22,443 14,325 O t h e r T e rm s3 1. The Board’s series on amounts of credit covers most short- and intermediate-term credit extended to individuals. Data in this table also appear in the Board’s. G.19 (421) monthly statistical release. For ordering address, see inside front cover. 2. Data are available for only the second month of each quarter, 3. At auto finance companies, Flow of Funds A37 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 B illio n s o f d o lla rs; q u a rte rly d a ta a t s e a so n a lly a d ju s te d a n n u a l rate s 1999 Transaction category or sector 1995 1996 1997 1998 2000 1999 Ql Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. . 711.3 731.4 804.3 1,042.9 1,120.4 1,277.7 938.8 1,170.1 1,094.8 940.7 958.3 758.5 By sector and instrument 2 Federal governm ent..................................................................... 3 Treasury securities .................................................................. 4 Budget agency securities and mortgages ............................. 144.4 142.9 1.5 145.0 146.6 - 1 .6 23.1 23.2 - .1 -5 2 .6 -5 4 .6 2.0 - 7 1 .2 - 7 1 .0 - .2 -8 3 .4 -8 1 .9 - 1 .5 -9 8 .5 -9 9 .1 .6 - 7 1 .4 -7 1 .5 .0 -3 1 .5 -3 1 .5 .0 -2 1 5 .5 -2 1 3 .5 -2 .1 -4 1 4 .0 -4 1 5 .8 1.8 - 2 1 9 .0 - 2 1 6 .6 - 2 .4 5 N onfederal.................................................................................... 566.9 586.3 781.2 1,095.5 1,191.6 1,361.2 1,037.3 1,241.6 1,126.3 1,156.3 1,372.3 977.5 6 7 8 9 10 11 12 13 14 15 16 By instrument Commercial paper .................................................................. Municipal securities and lo a n s .............................................. Corporate b o n d s ....................................................................... Bank loans n.e.c......................................................................... Other loans and advances....................................................... Mortgages ................................................................................ H o m e .................................................................................... Multifamily residential....................................................... Commercial ......................................................................... F a rm ...................................................................................... Consumer c re d it....................................................................... 18.1 - 4 8 .2 91.1 103.7 67.2 196.0 180.7 5.8 7.9 1.6 138.9 - .9 2.6 116.3 70.5 33.5 275.7 242.5 9.4 21.3 2.6 88.8 13.7 71.4 150.5 106.5 69.1 317.5 252.3 8.3 53.7 3.2 52.5 24.4 96.8 218.7 108.2 74.3 505.5 386.9 20.3 92.0 6.2 67.6 37.4 68.2 229.9 82.7 71.2 607.8 432.3 40.2 129.9 5.5 94.4 58.3 92.1 274.0 86.0 148.0 572.2 411.2 35.5 122.0 3.6 130.5 - 2 .6 56.8 287.6 24.0 2.3 607.8 440.1 33.1 125.6 9.0 61.4 49.8 71.3 202.8 112.3 79.2 650.0 479.4 44.2 119.4 7.0 76.2 44.0 52.5 155.2 108.6 55.4 601.1 398.3 47.9 152.4 2.5 109.5 36.2 8.9 186.2 131.9 162.1 488.9 343.9 32.3 105.8 6.9 142.0 116.9 34.0 153.8 163.1 104.3 665.7 496.6 43.9 116.3 8.9 134.6 62.5 29.8 184.4 32.0 -1 7 .3 565.7 443.4 23.6 90.8 7.9 120.4 17 18 19 20 21 22 By borrowing sector Household ................................................................................ Nonfinancial business.............................................................. Corporate .............................................................................. Nonfarm noncorporate ....................................................... F a rm ...................................................................................... State and local government ................................................... 363.2 255.1 228.0 24.3 2.9 - 5 1 .5 358.1 235.0 148.8 81.4 4.8 - 6 .8 345.8 379.3 266.1 107.0 6.2 56.1 488.1 527.1 416.3 103.2 7.7 80.3 548.1 591.2 480.3 105.7 5.2 52.3 562.7 718.8 625.2 88.6 4.9 79.8 526.4 467.2 371.6 93.9 1.7 43.6 589.5 599.6 468.2 122.9 8.5 52.5 513.6 579.1 456.1 117.4 5.6 33.6 534.7 617.8 500.5 102.5 14.7 3.8 650.4 701.1 581.4 111.4 8.3 20.8 564.8 387.5 292.7 87.2 7.6 25.2 23 Foreign net borrowing in United S ta te s ................................... 24 Commercial paper .................................................................. 25 B o n d s......................................................................................... 26 Bank loans n.e.c......................................................................... 27 Other loans and advances....................................................... 78.5 13.5 57.1 8.5 - .5 88.4 11.3 67.0 9.1 1.0 71.8 3.7 61.4 8.5 - 1 .8 43.3 7.8 34.8 6.7 - 6 .0 25.3 16.3 14.2 .5 -5 .7 30.7 18.0 15.4 .9 -3 .5 -2 4 .5 -2 7 .5 .2 5.6 - 2 .8 77.3 41.1 44.0 - 6 .6 -1 .1 17.6 33.6 - 2 .7 2.3 - 1 5 .5 116.9 56.7 45.7 15.4 - .9 -1 0 .9 10.9 -2 9 .6 5.7 2.0 61.6 5.9 36.0 11.8 7.8 28 Total domestic plus foreign ..................................................... 789.8 819.8 876.1 1,086.2 1,145.7 1,308.5 914.3 1,247.5 1,112.4 1,057.6 947.4 820.1 Financial sectors 29 Total net borrowing by financial sectors ............................. 453.9 545.8 653.7 1,073.9 1,087.9 1,228.8 995.3 1,064.2 1,063.4 618.3 817.0 715.4 By instrument Federal government-related ....................................................... Government-sponsored enterprise securities........................ Mortgage pool securities ....................................................... Loans from U.S. governm ent................................................. 204.1 105.9 98.2 .0 231.5 90.4 141.1 .0 212.8 98.4 114.5 .0 470.9 278.3 192.6 .0 592.0 318.2 273.8 .0 589.5 193.0 396.6 .0 576.6 304.7 271.9 .0 651.6 407.1 244.5 .0 550.3 367.9 182.4 .0 249.2 104.9 144.3 .0 370.4 248.9 121.6 .0 504.4 279.3 225.1 .0 34 Private ...................... .................................................................... 35 Open market p a p e r.................................................................. 36 Corporate b o n d s ....................................................................... 37 Bank loans n.e.c......................................................................... 38 Other loans and advances....................................................... 39 Mortgages ................................................................................ 249.8 42.7 195.9 2.5 3.4 5.3 314.4 92.2 173.8 12.6 27.9 7.9 440.9 166.7 210.5 13.2 35.6 14.9 603.0 161.0 296.9 30.1 90.2 24.8 495.9 176.2 221.8 -1 4 .3 107.1 5.1 639.2 78.7 473.8 -6 .7 73.3 20.1 418.8 57.3 254.8 11.0 107.9 - 1 2 .3 412.6 89.9 179.5 - 5 .9 139.8 9.4 513.0 479.0 -2 1 .0 -5 5 .6 107.5 3.2 369.2 130.9 166.5 .3 64.4 7.0 446.6 77.4 230.7 5.4 123.1 10.0 211.0 65.2 177.2 - .7 -3 6 .7 6.0 By borrowing sector Commercial banking .................................................................. Savings institutions ..................................................................... Credit unions ................................................................................ Life insurance com panies............................................................ Government-sponsored enterprises............................................ Federally related mortgage p o o ls .............................................. Issuers of asset-backed securities (ABSs) ............................... Finance com panies....................................................................... Mortgage companies .................................................................. Real estate investment trusts (REITs) ..................................... Brokers and dealers ..................................................................... Funding corporations .................................................................. 22.5 2.6 - .1 - .1 105.9 98.2 142.4 50.2 - 2 .2 4.5 - 5 .0 34.9 13.0 25.5 .1 1.1 90.4 141.1 150.8 45.9 4.1 11.9 - 2 .0 64.1 46.1 19.7 .1 .2 98.4 114.5 202.2 48.7 - 4 .6 39.6 8.1 80.7 72.9 52.2 .6 .7 278.3 192.6 321.4 43.0 1.6 62.7 7.2 40.7 67.2 48.0 2.2 .7 318.2 273.8 234.0 62.4 .2 6.3 -1 7 .2 92.2 46.1 75.2 1.5 3.3 193.0 396.6 289.7 77.0 - 4 .6 25.6 -3 1 .1 156.5 61.5 59.2 1.4 3.0 304.7 271.9 301.5 90.5 5.1 - 1 9 .7 -1 7 .4 -6 6 .2 107.0 51.9 2.8 1.1 407.1 244.5 220.5 -1 7 .2 -6 .1 7.9 16.9 27.9 54.1 5.8 3.3 - 4 .4 367.9 182.4 124.2 99.2 6.2 11.3 -3 7 .3 250.6 72.4 40.6 - 2 .9 - .7 104.9 144.3 166.0 52.3 - 3 .0 11.5 44.4 -1 1 .4 113.2 59.1 .9 -1 .1 248.9 121.6 154.8 103.9 2.7 9.8 - .7 4.0 17.4 -1 7 .2 1.1 - .3 279.3 225.1 136.8 96.9 - .3 -2.4 25.2 -4 6 .2 30 31 32 33 40 41 42 43 44 45 46 47 48 49 50 51 A3 8 Domestic Financial Statistics □ March 2001 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS'— Continued B illio n s o f d o lla rs; q u a rte rly d a ta at s e a so n a lly a d ju s te d a n n u a l rate s 1999 Transaction category or sector 1995 1996 1997 1998 2000 1999 Ql Q2 Q3 Q4 Ql Q2 Q3 All sectors 52 Total net borrowing, all sectors .......................................... 53 54 55 56 57 58 59 60 Open market p a p e r ..................................................................... U.S. government securities....................................................... Municipal securities .................................................................. Corporate and foreign bonds ................................................... Bank loans n.e.c........................................................................... Other loans and advances ....................................................... M o rtgages.................................................................................... Consumer c r e d i t ......................................................................... 1,243.8 1,365.6 1,529.8 2,160.1 2,233.6 2,537.2 1,909.6 2,311.7 2,175.8 1,676.0 1,764.4 1,535.5 74.3 348.5 - 4 8 .2 344.1 114.7 70.1 201.3 138.9 102.6 376.5 2.6 357.0 92.1 62.5 283.6 88.8 184.1 235.9 71.4 422.4 128.2 102.8 332.4 52.5 193.1 418.3 96.8 550.4 145.0 158.5 530.3 67.6 229.9 520.8 68.2 465.9 68.9 172.6 612.9 94.4 155.1 506.1 92.1 763.1 80.1 217.8 592.4 130.5 27.2 478.1 56.8 542.6 40.6 107.5 595.6 61.4 180.7 580.1 71.3 426.3 99.8 217.9 659.4 76.2 556.6 518.9 52.5 131.5 55.2 147.3 604.3 109.5 223.7 33.6 8.9 398.4 147.7 225.7 496.0 142.0 205.1 -4 3 .5 34.0 355.0 174.2 229.4 675.6 134.6 133.6 285.4 29.8 397.7 43.1 -4 6 .2 571.7 120.4 Funds raised through mutual funds and corporate equities 61 Total net issues ......................................................................... 131.5 231.9 181.2 100.0 156.5 154.2 178.5 120.4 172.8 409.3 115.0 150.0 62 Corporate equities ..................................................................... 63 Nonfinancial corporations ................................................... 64 Foreign shares purchased by U.S. residents .................... 65 Financial corporations .......................................................... 66 Mutual fund s h a re s ..................................................................... - 1 6 .0 -5 8 .3 50.4 -8 .1 147.4 - 5 .7 -6 9 .5 82.8 - 1 9 .0 237.6 -8 3 .9 -1 1 4 .4 57.6 -2 7 .1 265.1 -1 7 4 .6 -2 6 7 .0 101.2 - 8 .9 274.6 -3 1 .8 -1 4 3 .5 114.4 - 2 .7 188.3 -8 6 .4 -5 2 .1 -1 9 .8 -1 4 .5 240.6 - 3 3 .9 -3 3 8 .4 284.4 20.2 212.4 - 7 .0 -1 2 8 .4 121.7 - .3 127.5 .0 -5 5 .0 71.3 -1 6 .3 172.8 103.2 60.8 63.3 -2 0 .8 306.1 -1 2 2 .6 -2 4 8 .8 135.0 - 8 .8 237.6 -1 1 1 .5 -8 7 .6 13.0 -3 6 .9 261.5 1. Data in this table also appear in the Board’s Z.l (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Flow of Funds 1.58 A39 SUMMARY OF FINANCIAL TRANSACTIONS1 B illio n s o f d o lla rs e x c e p t as n o te d ; q u a rte rly d a ta at s e a s o n a lly a d ju s te d a n n u a l rate s 1999 Transaction category or sector 1995 1996 1997 1998 2000 1999 Ql Q2 Q3 Q4 Ql Q2 Q3 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets .................................... 1,243.8 1,365.6 1,529.8 2,160.1 2,233.6 2,537.2 1,909.6 2,311.7 2,175.8 1,676.0 1,764.4 1,535.5 -6 1 .3 34.1 - 8 .8 4.7 -9 1 .4 - .2 273.9 1,031.4 12.7 265.9 186.5 75.4 - .3 4.2 - 7 .6 16.2 - 8 .3 100.0 21.5 20.2 33.6 86.5 52.5 10.5 86.7 98.2 120.6 49.9 - 3 .4 1.4 90.1 -1 5 .7 80.5 128.7 - 1 0 .2 -4 .3 -3 3 .7 - 7 .4 414.4 878.1 12.3 187.5 119.6 63.3 3.9 .7 19.9 25.5 - 7 .7 69.6 22.5 - 5 .8 37.3 88.8 48.9 4.7 84.2 141.1 120.5 18.4 8.2 4.4 - 1 5 .7 13.6 17.1 31.8 -1 2 .7 -2 .1 .1 5.1 311.3 1,196.3 38.3 324.3 274.9 40.2 5.4 3.7 - 4 .7 16.8 -2 5 .0 104.8 25.2 19.5 63.8 87.5 80.9 - 2 .9 94.3 114.5 163.8 21.9 -9 .1 20.2 14.9 47.4 131.8 -1 6 .7 14.0 .1 134.5 13.5 254.2 1,760.6 21.1 305.2 312.0 - 1 1 .9 - .9 6.0 36.3 19.0 - 1 2 .8 76.9 20.4 57.8 71.5 244.0 124.8 4.5 261.7 192.6 281.7 51.9 3.2 -5 .1 6.8 - 1 .0 256.2 187.0 24.3 1.5 43.4 5.8 210.6 1,761.0 25.7 308.2 317.6 -2 0 .1 6.2 4.4 68.7 27.5 27.8 53.5 - 4 .2 57.5 49.9 182.0 47.2 3.1 235.6 273.8 215.8 94.9 .3 - 2 .6 -3 0 .8 127.1 472.8 270.5 67.0 2.8 132.5 17.0 256.9 1,790.6 64.5 68.1 131.5 -5 3 .1 - 6 .0 - 4 .4 111.0 30.9 27.8 78.4 -1 9 .7 57.5 76.0 215.7 97.4 3.1 189.1 396.6 272.1 85.3 -9 .1 1.7 34.6 9.5 328.4 247.7 - 1 .4 1.2 81.0 6.7 61.6 1,512.8 59.8 166.6 259.4 -1 0 2 .5 .4 9.2 85.3 32.7 27.8 68.2 26.7 86.6 25.1 - 6 7 .0 117.2 3.1 251.5 271.9 284.8 88.1 10.2 - 2 .2 -1 1 9 .7 96.2 230.0 221.8 49.8 .8 -4 2 .4 11.2 385.3 1,685.2 20.6 449.4 421.9 33.2 -1 2 .4 6.6 58.1 27.5 27.8 36.8 - 1 4 .4 32.0 40.0 224.8 -1 3 .0 3.1 280.7 244.5 212.0 91.7 -1 2 .1 - 2 .7 -2 2 .2 .6 - 6 .4 8.1 - 1 8 .3 1.4 2.4 -1 1 .8 138.7 2,055.3 -4 2 .2 548.7 457.7 42.0 42.6 6.3 20.2 18.8 27.8 30.7 - 9 .4 54.0 58.2 354.5 - 1 2 .7 3.1 221.0 182.4 94.4 114.4 12.3 - 7 .0 - 1 5 .9 401.9 -1 4 3 .9 -2 39.1 90.4 2.6 2.3 6.2 334.9 1.478.7 103.4 377.1 409.2 4.8 -4 2 .2 5.4 50.2 35.6 21.9 57.2 -1 4 .0 46.1 55.3 208.8 -7 7 .8 3.1 138.2 144.3 145.3 132.9 - 6 .0 -1 6 .3 106.9 -3 3 .5 137.1 88.6 4.3 2.8 41.4 7.8 185.6 1,433.9 - 3 .9 484.6 505.6 -2 9 .9 3.5 5.4 73.0 36.6 16.8 52.0 -1 8 .1 22.8 20.7 -1 5 6 .2 63.7 3.1 229.7 121.6 120.3 138.9 5.5 - 2 .5 38.0 187.5 -3 2 3 .2 -2 9 9 .2 - 9 .0 3.8 - 1 9 .0 15.6 199.4 1,643.8 27.3 370.2 333.1 31.5 - 6 .7 12.3 56.5 41.8 20.6 51.4 8.7 55.5 35.4 244.9 56.5 3.1 208.3 225.1 101.6 81.4 - .5 - 3 .6 183.5 -124.1 34 Net flows through credit m a rk ets........................................ 1,243.8 1,365.6 1,529.8 2,160.1 2,233.6 2,537.2 1,909.6 2,311.7 2,175.8 1,676.0 1,764.4 1,535.5 Other financial sources Official foreign e x c h a n g e .......................................................... Special drawing rights certificates.......................................... Treasury c u rre n c y ....................................................................... Foreign deposits ......................................................................... Net interbank transactions ........................................................ Checkable deposits and currency .......................................... Small time and savings deposits ............................................ Large time deposits ................................................................... Money market fund shares ..................................................... Security repurchase agreem ents............................................... Corporate equities ..................................................................... Mutual fund s h a re s ..................................................................... Trade payables ............................................................................ Security credit ............................................................................ Life insurance reserves ............................................................ Pension fund reserves .............................................................. Taxes p a y a b le .............................................................................. Investment in bank personal trusts ........................................ Noncorporate proprietors’ e q u ity ............................................ M iscellaneous.............................................................................. 8.8 2.2 .7 35.3 10.0 -1 2 .8 96.6 65.6 141.2 110.5 -1 6 .0 147.4 128.9 26.7 45.8 171.0 6.2 6.4 34.6 503.8 - 6 .3 - .5 - .6 85.9 -5 1 .6 15.7 97.2 114.0 145.4 41.4 -5 .7 237.6 114.1 52.4 44.5 163.0 16.2 - 5 .3 - 3 .4 537.4 .7 - .5 - .7 108.9 -1 9 .7 41.2 97.1 122.5 155.9 120.9 -8 3 .9 265.1 131.2 111.0 59.3 278.8 15.7 -4 9 .9 -4 6 .0 512.5 6.6 .0 - .8 2.0 - 3 2 .3 47.4 152.4 92.1 287.2 91.3 -1 7 4 .6 274.6 27.0 103.3 48.0 248.7 12.0 -4 2 .5 -4 1 .4 844.4 - 8 .7 - 3 .0 - 1 .5 86.5 17.6 151.4 44.7 130.6 249.1 171.7 -3 1 .8 188.3 184.7 93.5 50.8 253.7 16.0 - 7 .1 - 7 .6 741.2 - 1 4 .0 - 4 .0 .0 113.7 48.3 63.6 - 7 4 .8 18.0 221.3 258.0 - 8 6 .4 240.6 121.7 -6 2 .2 55.4 204.5 -1 .8 - 7 .2 -8 .3 406.7 - 5 .4 .0 -2 .1 110.1 93.4 37.5 106.6 42.4 115.3 -2 6 .1 -3 3 .9 212.4 225.3 139.7 42.1 248.8 47.3 -7 .1 21.4 1,454.9 - 8 .5 - 4 .0 -4 .1 69.4 -3 0 .8 139.3 119.1 102.7 174.3 135.9 - 7 .0 127.5 231.5 18.9 48.1 266.7 .1 - 7 .2 - 5 6 .0 507.0 - 7 .0 - 4 .0 .0 52.7 -4 0 .7 365.2 28.0 359.4 485.5 319.0 .0 172.8 160.1 277.8 57.6 294.6 18.2 - 6 .9 12.3 596.3 1.5 .0 - 2 .2 258.5 -7 1 .1 -2 1 9 .1 104.3 149.2 241.0 276.1 103.2 306.1 244.3 566.3 49.8 266.1 28.2 - 2 .9 -1 5 .5 870.3 -1 0 .2 - 8 .0 - 2 .3 -1 .1 177.7 - 6 5 .0 130.3 108.4 48.2 130.4 -1 2 2 .6 237.6 114.7 -9 9 .8 59.7 280.7 22.9 - 7 .6 - 2 .9 1,120.2 - .9 - 4 .0 - 4 .2 51.4 -6 1 .8 49.0 235.7 145.3 241.9 240.5 -1 1 1 .5 261.5 160.2 58.9 47.0 228.1 .7 - 3 .6 28.9 1,242.4 55 Total financial sources ............................................................ 2,756.6 2,957.0 3,350.0 4,105.4 4,553.5 4,030.3 4,732.2 4,134.6 5,316.7 4,830.2 3,875.7 4,341.1 Liabilities not identified as assets ( —) Treasury curre n c y ....................................................................... Foreign deposits ......................................................................... Net interbank liabilities ............................................................ Security repurchase agreem ents............................................... Taxes p a y a b le .............................................................................. M iscellaneous.............................................................................. - .3 25.1 -3 .1 25.7 21.1 -1 6 6 .5 - 1 .6 59.6 - 3 .3 4.1 23.1 -7 6 .4 - 1 .4 107.4 -1 9 .9 64.3 28.0 -69.1 - 1 .4 - 6 .4 3.4 61.4 13.9 -4 6 .1 - 3 .3 66.5 3.5 32.1 3.5 -3 1 0 .3 - 1 .5 49.3 49.7 213.5 - 8 .8 -5 2 2 .5 - 3 .5 96.8 - 4 .8 54.3 25.0 -1 3 1 .8 -5 .9 27.4 -7 .0 77.8 2.7 -4 5 4 .8 - 2 .2 92.5 - 2 3 .7 -2 1 7 .4 - 5 .1 -1 32.1 -6 .1 189.4 24.4 553.2 13.4 -3 4 2 .9 - 6 .2 - 6 2 .6 - 4 .3 5.4 - 1 .3 -1 9 6 .1 - 6 .7 21.0 - 1 8 .8 128.8 - 1 0 .0 - 8 3 .9 Floats not included in assets ( —) 62 Federal government checkable deposits ............................... 63 Other checkable deposits .......................................................... 64 Trade credit ................................................................................ - 6 .0 - 3 .8 15.6 .5 - 4 .0 -2 1 .2 - 2 .7 - 3 .9 - 2 9 .4 2.6 -3 .1 -4 2 .1 - 7 .4 - .8 44.1 -2 .1 -2 .1 45.6 - 2 7 .0 - .9 -6 3 .7 8.6 - .3 75.3 - 9 .2 .0 119.3 28.7 .6 24.5 - 3 .4 1.5 -7 4 .8 - 2 .7 1.9 - 6 8 .6 65 Total identified to sectors as assets ................................... 2,849.0 2,976.4 3,276.5 4,123.3 4,725.6 4,209.1 4,787.8 4,410.7 5,494.7 4,345.0 4,217.6 4,380.2 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Domestic nonfederal nonfinancial s e c to rs ............................. H ousehold................................................................................ Nonfinancial corporate business ........................................ Nonfarm noncorporate business ........................................ State and local governments ............................................... Federal government ................................................................... Rest of the world ....................................................................... Financial s e c to rs ......................................................................... Monetary a u th o rity................................................................ Commercial banking ............................................................ U.S.-chartered b a n k s .......................................................... Foreign banking offices in United States .................... Bank holding companies ................................................. Banks in U.S.-affiliated a r e a s .......................................... Savings institutions .............................................................. Credit unions ......................................................................... Bank personal trusts and estates ........................................ Life insurance companies ................................................... Other insurance companies ................................................. Private pension f u n d s ............................................................ State and local government retirement funds ........................ Money market mutual funds ............................................... Mutual funds ......................................................................... Closed-end funds ................................................................... Government-sponsored enterprises .................................... Federally related mortgage pools ...................................... Asset-backed securities issuers (A B S s)............................. Finance c o m p a n ie s................................................................ Mortgage companies ............................................................ Real estate investment trusts (R E IT s ) ............................... Brokers and dealers .............................................................. Funding corporations ............................................................ R elation o f L iabilities to F in an cia l A ssets 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 56 57 58 59 60 61 1. Data in this table also appear in the Board’s Z. 1 (780) quarterly statistical release, tables E l and F.5. For ordering address, see inside front cover. 2. Excludes corporate equities and mutual fund shares. A40 1.59 Domestic Financial Statistics □ March 2001 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 B illio n s o f d o lla rs, e n d o f p e rio d 1999 Transaction category or sector 1996 1997 1998 2000 1999 Q2 Ql Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors .................... 14,444.2 15,247.0 16,289.9 17,445.0 16,605.4 16,784.8 17,105.1 17,445.0 17,677.8 17,853.8 18,054.1 By sector and instrument 2 Federal government ................................................. 3 Treasury securities ............................................... 4 Budget agency securities and m o rtg a g es......... 3,781.8 3,755.1 26.6 3,804.9 3,778.3 26.5 3,752.2 3,723.7 28.5 3,681.0 3,652.8 28.3 3,759.7 3,731.6 28.1 3,651.7 3,623.4 28.3 3,632.7 3,604.5 28.3 3,681.0 3,652.8 28.3 3,653.5 3,625.8 27.8 3,464.0 3,435.7 28.2 3,410.3 3,382.7 27.6 5 N onfederal................................................................... 10,662.5 11,442.1 12,537.7 13,763.9 12,845.7 13,133.1 13,472.4 13,763.9 14,024.3 14,389.9 14,643.8 6 7 8 9 10 11 12 13 14 15 16 By instrument Commercial p a p e r ................................................. Municipal securities and l o a n s ........................... Corporate bonds ................................................... Bank loans n.e.c...................................................... Other loans and a d v a n ce s.................................... Mortgages .............................................................. H o m e ................................................................... Multifamily residential .................................... C om m ercial........................................................ Farm ................................................................... Consumer credit ................................................... 156.4 1,296.0 1,460.4 934.1 770.4 4,833.6 3,719.2 278.6 748.7 87.1 1,211.6 168.6 1,367.5 1,610.9 1,040.5 839.5 5,151.1 3,971.5 286.9 802.3 90.3 1,264.1 193.0 1,464.3 1,829.6 1,148.8 913.8 5,656.6 4,358.4 307.3 894.4 96.5 1,331.7 230.3 1,532.5 2,059.5 1,231.5 985.3 6,298.7 4,790.7 347.7 1,058.4 102.0 1,426.2 223.9 1,491.0 1,898.1 1,165.2 957.4 5,790.9 4,451.1 316.4 926.1 97.4 1,319.3 232.4 1,510.0 1,970.0 1,178.5 956.0 5,945.9 4,564.1 324.6 957.5 99.6 1,340.4 239.3 1,518.6 2,020.7 1,202.9 969.8 6,151.0 4,693.6 335.7 1,020.3 101.4 1,370.1 230.3 1,532.5 2,059.5 1,231.5 985.3 6,298.7 4,790.7 347.7 1,058.4 102.0 1,426.2 260.8 1,539.2 2,106.0 1,259.1 1,032.4 6,410.8 4,866.5 355.7 1,084.8 103.7 1,416.0 296.8 1,551.6 2,144.5 1,307.2 1,056.2 6,579.6 4,993.0 366.7 1,113.9 106.0 1,454.0 307.0 1,550.3 2,190.6 1,311.7 1,057.1 6,731.6 5,114.4 372.6 1,136.6 107.9 1,495.6 17 18 19 20 21 22 By borrowing sector Household .............................................................. Nonfinancial business .......................................... C orporate ............................................................ Nonfarm noncorporate .................................... Farm ................................................................... State and local government ............................... 5,222.7 4,376.4 3,095.6 1,130.9 149.9 1.063.4 5,568.8 4,753.9 3,359.8 1,237.9 156.1 1,119.5 6,056.9 5,281.0 3,776.1 1,341.1 163.8 1,199.8 6,605.2 5,906.6 4,290.7 1,446.8 169.0 1,252.1 6,138.8 5,483.8 3,957.9 1,363.5 162.4 1,223.2 6,282.3 5,612.6 4,059.5 1,387.0 166.1 1,238.2 6,448.5 5,781.5 4,195.9 1,417.0 168.6 1,242.4 6,605.2 5,906.6 4,290.7 1,446.8 169.0 1,252.1 6,678.8 6,088.3 4,445.5 1,472.7 170.1 1,257.3 6,851.5 6,272.7 4,596.8 1,500.6 175.3 1,265.7 7,024.3 6,356.1 4,656.9 1,521.7 177.5 1,263.5 23 Foreign credit market debt held in United States ................................................... 542.2 608.0 651.4 676.9 659.2 652.7 672.9 676.9 704.6 698.8 720.7 24 25 26 27 Commercial p a p e r ...................................................... B o n d s ............................................................................ Bank loans n.e.c.......................................................... Other loans and a d v a n ce s........................................ 67.5 366.3 43.7 64.7 65.1 427.7 52.1 63.0 72.9 462.5 58.9 57.2 89.2 476.7 59.4 51.7 77.2 466.3 59.1 56.5 70.1 466.4 60.5 55.8 81.8 477.4 58.8 55.0 89.2 476.7 59.4 51.7 101.6 488.1 63.3 51.7 101.2 480.7 64.7 52.1 109.8 489.7 67.6 53.5 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign........................... 14,986.4 15,855.0 16,941.3 18,121.9 17,264.6 17,437.5 17,778.0 18,121.9 18,382.5 18,552.6 18,774.8 Financial sectors 29 Total credit market debt owed by financial sectors ................................................. 4,824.6 5,445.2 6,519.1 7,607.0 6,809.0 7,073.3 7,346.8 7,607.0 7,744.5 7,964.5 8,155.8 30 31 32 33 34 35 36 37 38 39 By instrument Federal government-related.......................................... Government-sponsored enterprise securities........... Mortgage pool securities.......................................... Loans from U.S. government ................................. Private............................................................................ Open market p a p e r................................................... Corporate b o n d s....................................................... Bank loans n.e.c......................................................... Other loans and advances ........................................ Mortgages ................................................................ 2,608.3 896.9 1,711.4 .0 2,216.3 579.1 1,378.4 64.0 162.9 31.9 2,821.1 995.3 1,825.8 .0 2,624.1 745.7 1,555.9 77.2 198.5 46.8 3,292.0 1,273.6 2,018.4 .0 3,227.1 906.7 1,852.8 107.2 288.7 71.6 3,884.0 1,591.7 2,292.3 .0 3,723.0 1,082.9 2,074.6 92.9 395.8 76.7 3,424.1 1,321.8 2,112.3 .0 3,374.9 926.4 1,968.6 104.1 299.1 76.6 3,580.7 1,398.0 2,182.7 .0 3,492.6 940.9 2,042.8 106.8 328.6 73.6 3,745.9 1,499.8 2,246.1 .0 3,601.0 963.4 2,091.1 105.2 365.4 75.9 3,884.0 1,591.7 2,292.3 .0 3,723.0 1,082.9 2,074.6 92.9 395.8 76.7 3,940.3 1,618.0 2,322.3 .0 3,804.2 1,115.7 2,114.2 91.4 404.4 78.5 4,035.5 1,680.2 2,355.4 .0 3,928.9 1,135.2 2,183.2 92.7 436.9 81.0 4,164.5 1,750.0 2,414.5 .0 3,991.3 1,151.6 2,234.6 92.5 430.2 82.5 40 41 42 43 44 45 46 47 48 49 50 51 52 By borrowing sector Commercial banks ....................................................... Bank holding companies ............................................ Savings institutions....................................................... Credit u n io n s................................................................ Life insurance com panies............................................ Government-sponsored enterprises ............................. Federally related mortgage po o ls................................. Issuers of asset-backed securities (ABSs).................... Brokers and dealers ..................................................... Finance companies........................................................ Mortgage companies ................................................... Real estate investment trusts (REITs) ........................ Funding corporations ................................................... 113.6 150.0 140.5 .4 1.6 896.9 1,711.4 863.3 27.3 529.8 20.6 56.5 312.7 140.6 168.6 160.3 .6 1.8 995.3 1,825.8 1,076.6 35.3 554.5 16.0 96.1 373.7 188.6 193.5 212.4 1.1 2.5 1,273.6 2,018.4 1,398.0 42.5 597.5 17.7 158.8 414.4 230.0 219.3 260.4 3.4 3.2 1,591.7 2,292.3 1,632.0 25.3 659.9 17.8 165.1 506.6 187.5 202.6 226.9 1.5 3.3 1,321.8 2,112.3 1,463.1 34.8 614.4 16.5 165.2 459.1 202.7 205.5 241.6 1.8 4.0 1,398.0 2,182.7 1,539.9 30.4 639.2 17.8 160.3 449.5 224.2 211.8 255.4 2.5 4.3 1,499.8 2,246.1 1,599.1 34.6 628.5 16.3 162.2 462.0 230.0 219.3 260.4 3.4 3.2 1,591.7 2,292.3 1,632.0 25.3 659.9 17.8 165.1 506.6 242.2 221.4 266.9 2.6 3.0 1,618.0 2,322.3 1,665.8 36.4 670.7 17.1 167.9 510.1 265.4 229.3 280.7 2.9 2.7 1,680.2 2,355.4 1,706.4 36.2 699.2 17.8 170.4 517.9 263.6 236.9 277.5 3.1 2.7 1,750.0 2,414.5 1,749.0 42.5 716.5 17.7 169.8 512.0 All sectors 53 Total credit market debt, domestic and foreign . . . 54 55 56 57 58 59 60 61 Open market paper....................................................... US. government securities .......................................... Municipal securities ..................................................... Corporate and foreign b onds........................................ Bank loans n.e.c.............................................................. Other loans and advances............................................. Mortgages ..................................................................... Consumer c redit............................................................ 19,811.0 21300.2 23,460.4 25,728.9 24,073.5 24,510.8 25,124.9 25,728.9 26,126.9 26,517.1 26,930.6 803.0 6,390.0 1,296.0 3,205.1 1,041.7 998.0 4,865.5 1,211.6 979.4 6,626.0 1,367.5 3,594.5 1,169.8 1,101.0 5,197.9 1,264.1 1,172.6 7,044.3 1,464.3 4,144.9 1,314.9 1,259.6 5.728.2 1.331.7 1,402.4 7,565.0 1,532.5 4,610.8 1,383.8 1,432.7 6,375.5 1,426.2 1,227.6 7,193.8 1,491.0 4,333.0 1,328.3 1,313.0 5,867.6 1,319.3 1,243.3 7,232.4 1,510.0 4,479.2 1,345.7 1,340.3 6,019.5 1,340.4 1,284.5 7,378.6 1,518.6 4,589.1 1,366.9 1,390.1 6,226.9 1,370.1 1,402.4 7,565.0 1,532.5 4,610.8 1,383.8 1,432.7 6,375.5 1,426.2 1,478.1 7,593.8 1,539.2 4,708.3 1,413.7 1,488.5 6,489.3 1,416.0 1,533.3 7,499.5 1,551.6 4,808.3 1,464.6 1,545.2 6,660.6 1,454.0 1,568.3 7,574.8 1,550.3 4,914.9 1,471.7 1,540.8 6,814.1 1,495.6 1. Data in this table also appear in the Board’s Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Flow of Funds 1.60 A41 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 B illio n s o f d o lla rs e x c e p t a s n o te d , e n d o f p e rio d 1999 Transaction category or sector 1996 1997 2000 1999 Ql Q2 Q3 Q4 Ql Q2 Q3 C redit M arket D ebt O utsta nd in g 2 19,811.0 21,300.2 23,460.4 25,728.9 24,073.5 24,510.8 25,124.9 25,728.9 26,126.9 26,517.1 26,930.6 3,031.3 2,118.3 270.2 38.0 604.8 200.2 1,926.6 14,652.9 393.1 3,707.7 3,175.8 475.8 22.0 34.1 933.2 288.5 232.0 1,657.0 491.2 627.3 568.2 634.3 820.2 101.1 807.9 1,711.4 773.9 544.5 41.2 30.4 167.7 122.0 3,004.7 2,106.4 257.5 35.9 605.0 205.5 2,257.3 15,832.7 431.4 4,031.9 3,450.7 516.1 27.4 37.8 928.5 305.3 207.0 1,751.1 515.3 646.8 632.0 721.9 901.1 98.3 902.2 1,825.8 937.7 566.4 32.1 50.6 182.6 164.7 3,108.2 2,061.4 271.5 35.9 739.4 219.1 2,539.8 17,593.3 452.5 4,335.7 3,761.2 504.2 26.5 43.8 964.8 324.2 194.1 1,828.0 535.7 704.7 703.6 965.9 1,025.9 102.8 1,163.9 2,018.4 1,219.4 618.4 35.3 45.5 189.4 165.2 3,434.5 2,318.5 295.7 37.5 782.8 258.0 2,678.0 19,358.4 478.1 4,643.9 4,078.9 484.1 32.7 48.3 1,033.4 351.7 222.0 1,886.0 531.6 762.2 753.4 1,147.8 1,073.1 105.9 1,399.5 2,292.3 1,435.3 713.3 35.6 42.9 158.6 291.9 3,199.5 2,124.7 266.1 36.6 772.1 223.3 2,608.3 18,042.4 466.0 4,338.4 3,782.9 487.8 25.0 42.7 990.8 330.2 201.1 1,853.5 530.8 719.0 722.6 1,036.2 1,050.8 103.6 1,203.1 2,112.3 1,280.1 639.9 33.0 45.9 211.4 173.8 3,255.5 2,155.3 268.5 36.9 794.8 225.0 2,621.3 18,409.0 485.1 4,383.4 3,847.6 465.7 25.1 45.0 1,011.4 341.0 208.0 1,869.6 537.5 740.7 728.9 1,001.8 1,083.7 104.3 1,268.4 2,182.7 1,352.7 660.9 35.6 45.3 162.9 204.9 3,311.9 2,208.2 284.7 37.1 781.9 260.7 2,718.1 18,834.0 489.3 4,488.3 3,944.3 475.3 22.0 46.7 1,030.8 348.5 215.0 1,880.4 533.9 748.7 738.9 1,049.7 1,083.0 105.1 1,340.2 2,246.1 1,409.8 678.2 32.5 44.7 167.0 204.0 3,434.5 2,318.5 295.7 37.5 782.8 258.0 2,678.0 19,358.4 478.1 4,643.9 4,078.9 484.1 32.7 48.3 1,033.4 351.7 222.0 1,886.0 531.6 762.2 753.4 1,147.8 1,073.1 105.9 1,399.5 2,292.3 1,435.3 713.3 35.6 42.9 158.6 291.9 3,368.4 2,252.7 294.7 38.1 782.9 259.6 2,765.9 19,733.1 501.9 4,725.0 4,171.3 482.0 22.1 49.6 1,044.5 359.0 227.4 1,901.5 528.0 773.7 767.2 1,217.1 1,053.7 106.7 1,426.4 2,322.3 1,463.9 747.0 34.1 38.8 201.1 293.8 3,377.1 2,244.2 298.3 38.8 795.8 261.5 2,809.7 20,068.7 505.1 4,847.4 4,295.4 478.1 23.0 51.0 1,061.7 370.8 231.7 1,913.4 523.5 779.4 772.4 1,159.4 1,073.9 107.4 1,485.3 2,355.4 1,495.8 780.6 35.5 38.2 189.3 342.7 3,303.4 2,174.1 300.8 39.8 788.7 265.4 2,860.0 20,501.8 511.5 4,931.2 4,368.3 487.6 21.3 54.0 1,080.9 381.9 236.8 1,927.9 525.7 793.3 781.3 1,212.5 1,090.6 108.2 1,546.7 2,414.5 1,529.6 795.5 35.4 37.3 245.2 315.8 34 Total credit market debt ................................................... 19,811.0 21,300.2 23,460.4 25,728.9 24,073.5 24,510.8 25,124.9 25,728.9 26,126.9 26,517.1 26,930.6 Other liabilities Official foreign exchange ..................................................... Special drawing rights certificates ...................................... Treasury currency .................................................................. Foreign deposits ..................................................................... Net interbank liabilities ....................................................... Checkable deposits and c u rre n c y ........................................ Small time and savings deposits ........................................ Large time d e p o sits ................................................................ Money market fund s h a re s ................................................... Security repurchase agreements .......................................... Mutual fund shares ................................................................ Security c r e d it......................................................................... Life insurance re s e rv e s .......................................................... Pension fund re s e rv e s ............................................................ Trade payables ....................................................................... Taxes payable ......................................................................... Investment in bank personal tru s ts ...................................... Miscellaneous ......................................................................... 53.7 9.7 17.7 521.7 240.8 1,244.8 2,377.0 590.9 886.7 701.5 2,342.4 358.1 610.6 6,548.6 1,812.1 123.8 871.3 6,349.8 48.9 9.2 17.0 619.7 219.4 1,286.1 2,474.1 713.4 1,042.5 822.4 2,989.4 469.1 665.0 7,817.4 1,943.3 139.5 942.5 6,699.6 60.1 9.2 16.2 639.0 189.0 1,333.4 2,626.5 805.5 1,329.7 913.7 3,610.5 572.3 718.3 8,913.1 1,970.3 151.5 1,001.0 7,268.4 50.1 6.2 14.6 725.8 204.5 1,484.8 2,671.2 936.1 1,578.8 1,085.4 4,553.4 665.9 783.9 10,000.0 2,155.0 167.5 1,130.4 7,812.0 53.6 8.2 16.2 667.4 182.0 1,310.5 2,637.6 804.3 1,411.7 980.3 3,758.1 552.7 735.9 9,065.3 1,973.9 158.8 1,016.5 7,267.8 50.9 8.2 15.7 694.9 207.1 1,353.1 2,644.6 809.0 1,393.5 970.8 4,049.1 589.3 749.8 9,480.0 2,031.1 162.4 1,061.0 7,459.1 52.1 7.2 14.6 712.3 199.6 1,353.8 2,665.9 837.5 1,444.9 999.3 3,931.5 593.2 756.2 9,151.1 2,095.1 167.5 1,019.0 7,468.8 50.1 6.2 14.6 725.8 204.5 1,484.8 2,671.2 936.1 1,578.8 1,085.4 4,553.4 665.9 783.9 10,000.0 2,155.0 167.5 1,130.4 7,812.0 49.4 6.2 14.1 790.4 168.1 1,392,9 2,728,0 966.5 1,666.0 1,155.8 4,863.3 803.7 799.9 10,230.0 2,189.6 182.3 1,163.8 7,984.0 46.5 4.2 13.4 790.2 215.9 1,409.7 2,738.8 987.4 1,627.1 1,185.1 4,759.6 780.5 809.4 10,155.0 2,218.8 179.5 1,125.6 8,235.4 44.9 3.2 12.4 803.0 200.2 1,385.7 2,790.2 1,026.8 1,697.8 1,239.2 4,816.4 794.5 821.2 10,348.6 2,265.7 185.3 1,124.5 8,696.4 53 Total lia b ilitie s ....................................................................... 45,472.1 50,218.5 55,588.1 61,754.5 56,674.4 58,240.5 58,594.5 61,754.5 63,280.9 63,799.2 65,186.6 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights ........................................ 55 Corporate e q u itie s .................................................................. 56 Household equity in noncorporate business .................... 21.4 10,255.8 3,889.2 21.1 13,201.3 4,164.4 21.6 15,427.8 4,414.7 21.4 19,576.3 4,704.5 20.7 15,919.1 4,487.4 20.8 17,060.4 4,548.8 21.3 16,214.9 4,623.1 21.4 19,576.3 4,704.5 21.4 20,232.0 4,732.2 21.5 19,246.8 4,779.1 21.4 19,047.1 4,848.4 Liabilities not identified as assets ( —) Treasury currency ................................................................... Foreign deposits ..................................................................... Net interbank transactions ................................................... Security repurchase agreements .......................................... Taxes payable ......................................................................... Miscellaneous ......................................................................... - 7 .3 437.0 -1 0 .6 111.5 76.9 -1,512.3 - 8 .6 538.3 -3 2 .2 175.8 92.6 -1 ,8 6 8 .4 -1 0 .1 548.2 - 2 7 .0 237.2 102.0 -2 ,4 0 4 .7 - 1 3 .4 615.0 -2 5 .5 269.3 95.5 -2 ,8 4 7 .2 -1 0 .5 560.5 -1 1 .3 296.7 89.8 -2 ,618.2 -1 1 .3 584.7 -1 0 .6 308.2 112.2 -2 ,6 5 1 .5 - 1 2 .8 591.5 - 1 3 .2 327.7 96.4 -2 ,9 5 7 .4 - 1 3 .4 615.0 -2 5 .5 269.3 95.5 -2 ,8 4 7 .2 -1 4 .9 662.4 -1 3 .9 414.2 90.8 -2 ,9 9 2 .2 -1 6 .6 646.7 - 1 1 .6 413.9 102.5 -2 ,9 8 0 .4 -1 8 .2 652.0 - 1 7 .7 445.0 94.9 -2 ,7 8 7 .4 Floats not included in assets (—) 63 Federal government checkable d e p o sits............................. 64 Other checkable deposits ..................................................... 65 Trade c r e d it ............................................................................. - 1 .6 30.1 174.6 -8 .1 26.2 135.5 - 3 .9 23.1 94.5 - 9 .9 22.3 136.1 - 7 .2 18.9 56.3 -1 2 .4 22.1 19.4 -1 0 .2 14.5 37.0 - 9 .9 22.3 136.1 - 6 .5 18.7 92.3 -5 .2 22.5 51.4 - 7 .8 15.5 34.5 66 Total identified to sectors as a s s e t s ................................. 60,340.1 68,554.3 76,892.9 87,814.5 78,726.6 81,509.7 81,380.2 87,814.5 90,015.5 89,623.3 90,692.7 1 Total credit market assets ................................................. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Domestic nonfederal nonfinancial sectors ........................ Household ........................................................................... Nonfinancial corporate b u s in e ss...................................... Nonfarm noncorporate b u s in e s s ...................................... State and local governm ents............................................ Federal government .............................................................. Rest of the world .................................................................. Financial sectors ..................................................................... Monetary authority ............................................................ Commercial b a n k in g .......................................................... U.S.-chartered banks ..................................................... Foreign banking offices in United S ta te s .................. Bank holding companies ............................................ Banks in U.S.-affiliated areas ...................................... Savings in stitutions............................................................ Credit u n io n s ....................................................................... Bank personal trusts and estates ................................... Life insurance c o m p a n ie s................................................. Other insurance com panies.............................................. Private pension funds ....................................................... State and local government retirement fu n d s...................... Money market mutual funds .......................................... Mutual f u n d s ....................................................................... Closed-end funds .............................................................. Government-sponsored enterp rises................................. Federally related mortgage p o o l s ................................... Asset-backed securities issuers (ABSs) ........................ Finance companies ............................................................ Mortgage c o m panies.......................................................... Real estate investment trusts (REITs) .......................... Brokers and dealers .......................................................... Funding corporations ....................................................... R elation o f L iabilities t o F inancial assets 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 57 58 59 60 61 62 1. Data in this table also appear in the Board’s Z .l (780) quarterly statistical release, tables L.l and L.5. For ordering address, see inside front cover. 2. Excludes corporate equities and mutual fund shares. A42 2.10 Domestic Nonfinancial Statistics □ March 2001 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 2000 Measure 1998 1 Industrial production1 ........................................ 1999 2000 Apr. May June July Aug. Sept. Oct.r Nov. Dec.p 134.0 139.6 147.5 146.3 147.2 147.9 147.6 148.6 149.0r 148.5 148.1 147.3 127.2 129.3 118.4 147.1 121.0 145.7 131.2 133.3 120.8 153.8 125.1 154.5 136.3 138.8 123.1 166.0 128.7 167.8 135.3 137.2 123.2 162.8 129.3 166.1 135.5 137.5 123.5 163.1 129.4 168.4 136.0 138.3 124.2 164.3 129.0 169.4 135.8 138.1 122.9 166.3 128.7 169.0 136.6 139.2 123.8 167.9 128.8 170.5 136.7r 139.3r 123.8r 168.3r 128.6r 171.3r 136.3 138.8 122.7 169.1 128.4 170.8 136.4 139.1 122.8 169.7 128.4 169.3 136.1 138.9 122.9 169.0 127.7 167.6 138.2 144.8 153.6 152.2 153.1 153.8 153.7 154.6 155.l r 154.8 153.9 152.2 81.3 80.5 81.3 81.8 81.9 82.0 81.6 81.7 81.7 81.2 80.4 79.1 10 Construction contracts3 .......................................... 161.3 177.7 179.0 189.0r 180.0r 177.0r 182.0 187.0 179.0 n.a. 11 Nonagricuitural employment, total4 .................... 12 Goods-producing, to ta l ...................................... 13 Manufacturing, t o t a l ...................................... 14 Manufacturing, production w o rk e rs........... 15 Service-producing............................................... 16 Personal income, total .......................................... 17 Wages and salary disbursements .................... 18 Manufacturing ............................................... 19 Disposable personal income5 ........................... 20 Retail sales5 ............................................................ 123.4 102.7 98.8 99.8 130.0 186.5 184.6 152.3 182.7 178.4 126.2 102.3 97.0 97.8 133.8 196.6 196.9 157.4 191.9 194.7 t 1 1 1 I 187.0r 209.0 210.1 164.2 202.0 210.0 128.9 104.3 97.3 98.0 136.8 207.2 208.2 163.6 200.6 208.3 129.1 104.1 97.3 97.9 137.0 207.9 208.4 162.9 201.3 208.5 129.1 104.2 97.3 97.9 137.1 208.9 209.8 164.3 202.1 209.3 129.1 104.4 97.6 98.4 137.0 209.5 211.0 165.8 202.5 211.1 129.0 103.9 97.0 97.5 137.0 210.1 211.3 164.9 202.9 211.0 129.2 103.9 96.7 97.2 137.3 212.5 212.7 165.1 205.2 212.7 129.3 104.0 96.7 97.1 137.3 212.1 214.0 166.6 204.4 212.5 129.3 103.9 96.6 97.0 137.4 212.6 214.8 166.9 204.7 211.5 129.3 103.6 96.3 96.6 137.6 213.5 215.2 165.6 205.5 211.6 Prices6 21 Consumer (1 9 8 2 -8 4 = 1 0 0 ).................................... 22 Producer finished goods (1982= 100) ................ 163.0 130.7 166.6 133.0 172.2 138.0 171.3 136.7 171.5 137.3 172.4 138.6 172.8 138.6 172.8 138.2 173.7 139.2 174.0 140.0 174.1 139.9 174.0 139.7 2 3 4 5 6 7 8 Market groupings Products, to ta l .......................................................... Final, to ta l............................................................ Consumer g o o d s ............................................. E quipm ent........................................................ Interm ediate.......................................................... M a te ria ls................................................................... Industry groupings Manufacturing ........................................................ 9 Capacity utilization, manufacturing (percent)2. . n.a. 1. Data in this table appear in the Board’s G.17 (419) monthly statistical release. The data are also available on the Board’s web site, http://www.federalreserve.gov/releases/gl7. The latest historical revision of the industrial production index and the capacity utilization rates was released in December 2000. The recent annual revision is described in an article in the March 2001 issue of the Bulletin. For a description of the methods of estimating industrial production and capacity utilization, see “Industrial Production and Capacity Utilization: Historical Revision and Recent Developments,” Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92, and the references cited therein. For details about the construction of individual industrial production series, see “Industrial Production: 1989 Developments and Historical Revision,” Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Ratio of index of production to index of capacity. Based on data from the Federal Reserve, U.S. Department o f Commerce, and other sources. 2.11 3. Index of dollar value of total construction contracts, including residential, nonresiden tial, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge Division. 4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series covers employees only, excluding personnel in the armed forces. 5. Based on data from U.S. Department of Commerce, Survey o f 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 o f Current Business. LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 2000 Category H o u s e h o ld S u r v e y D a t a 1998 1999 2000 May June July Aug. Sept. Oct.r Nov. Dec.p 1 1 Civilian labor force2 ................................................... 137,673 139,368 140,573r 140,757r I40,546r 140,724r 140,847r 141,000 141,136 141,489 2 3 128,085 3,378 130,207 3,281 131,549r 3,294r 131,870r 3,313r 131,603r 3,295r 131,622r 3,317r 131,954r 3,356r 132,223 3,241 132,302 3,176 132,562 3,274 6,210 4.5 5,880 4.2 5.730r 4.1 5,574' 4.0 5,648r 4.0 5,785r 4.1 5,537r 3.9 5,536 3.9 5,658 4.0 5,653 4.0 125,826 128,616 18,772 590 5,985 6,600 29,127 7,407 37,526 19,819 18,431 535 6,273 6,792 29,792 7,632 39,000 20,161 4 5 Nonagricuitural industries3 .................................... Agriculture .............................................................. Unemployment N u m b e r..................................................................... Rate (percent of civilian labor force) ................ E st a b l is h m e n t S u r v e y D a t a 6 Nonagricuitural payroll employment4 ............... 7 8 9 10 11 12 13 14 Manufacturing ............................................................ Mining .......................................................................... Contract construction ................................................. Transportation and public u tilitie s ........................... T r a d e .............................................................................. Finance .......................................................................... Service ......................................................................... Government ................................................................. n.a. 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; annua/ data are averages o f monthly figures. By definition, seasonality does not exist in population figures. 3. Includes self-employed, unpaid family, and domestic service workers. 131,590 131,647 131,607 131,528 131,723 131,789 131,848 131,953 18,479 539 6,666 6,962 30,112 7,600 40,220 21,012 18,493 539 6,668 6,985 30,171 7,588 40,401 20,802 18,548 538 6,670 7,010 30,246 7,586 40,403 20,606 18,432 537 6,675 6,941 30,253 7,608 40,572 20,510 18,380 539 6,720 7,037 30,249 7,622 40,685 20,491 18,378 542 6,745 7,046 30,280 7,638 40,696 20,464 18,363 541 6,738 7,060 30,325 7,645 40,764 20,412 18,301 538 6,725 7,083 30,329 7,664 40,845 20,468 4. Includes all full- and part-time employees who worked during, or received pay for, the pay period that includes the twelfth day of the month; excludes proprietors, self-employed persons, household and unpaid family workers, and members of the armed forces. Data are adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this time. SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings. Selected Measures A43 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 S e a s o n a lly a d ju s te d 2000 2000 2000 Series Ql Q2 Q3 Q4 Output (1992=100) Ql Q2 Q3 Q4 Capacity (percent of 1992 output) Q2 Ql Q3 Q4 Capacity utilization rate (percent)2 1 Total in d u stry ........................................ 144.4 147.1 148.4 148.0 176.1 178.1 180.1 182.1 82.0 82.6 82.4 2 M anufacturing ........................................ 150.1 153.0 154.4 153.6 184.6 186.9 189.2 191.5 81.3 81.9 81.7 80.2 3 4 Primary processing3 ........................... Advanced processing4 ...................... 173.5 137.3 178.6 139.0 180.3 140.3 177.7 140.4 203.0 172.7 206.9 174.1 211.2 175.2 215.9 176.2 85.4 79.5 86.4 79.8 85.4 80.1 82.3 79.7 5 6 7 8 9 10 11 12 13 Durable g o o d s .................................... Lumber and products.................... Primary m eta ls............................... Iron and s te e l............................. N onferrous................................. Industrial machinery and equipm ent............. Electrical machinery .................... Motor vehicles and p a rts ............. Aerospace and miscellaneous transportation equipment 186.7 122.4 136.1 135.0 137.4 242.2 476.7 171.8 192.9 120.3 137.0 136.1 138.2 249.4 535.1 175.9 196.7 117.0 133.4 130.5 137.0 257.3 581.1 170.8 195.6 112.9 125.6 118.8 133.6 261.7 603.5 156.1 228.5 147.0 153.0 152.8 153.2 296.3 552.1 207.0 233.3 147.5 153.3 153.1 153.4 304.5 591.7 208.2 238.3 147.9 153.4 153.4 153.4 311.1 639.1 209.2 243.5 148.4 153.5 153.6 153.4 317.3 693.7 210.2 81.7 83.3 88.9 88.4 89.7 81.7 86.3 83.0 82.7 81.6 89.4 88.9 90.1 81.9 90.4 84.5 82.5 79.1 87.0 85.1 89.3 82.7 90.9 81.7 80.3 76.1 81.8 77.3 87.1 82.5 87.0 74.3 93.7 92.9 93.5 94.4 130.7 130.7 130.4 130.1 71.7 71.1 71.7 72.6 14 15 16 17 18 19 Nondurable g o o d s ............................. Textile mill p ro d u c ts .................... Paper and products ...................... Chemicals and products................ Plastics m ate ria ls...................... Petroleum products ...................... 116.3 104.0 117.6 124.8 141.6 116.0 116.7 103.3 117.9 125.8 140.9 118.3 116.2 99.8 114.0 125.4 137.6 117.3 115.6 93.7 114.8 125.6 136.4 114.3 143.8 124.4 136.9 161.9 151.5 123.2 144.1 123.9 137.2 163.0 151.6 123.2 144.4 123.3 137.5 164.1 151.9 123.2 144.7 122.8 137.9. 164.9 152.3 123.1 80.9 83.6 85.8 77.1 93.5 94.1 80.9 83.4 85.9 77.2 93.0 96.0 80.5 80.9 82.9 76.4 90.5 95.3 79.9 76.4 83.2 76.2 89.5 92.9 20 Mining ..................................................... 21 Utilities ................................................... 22 E le ctric ................................................. 99.4 117.4 120.5 100.0 120.7 124.3 100.6 121.0 123.9 100.4 125.1 126.6 116.7 131.2 129.5 116.5 132.3 130.9 116.3 133.4 132.3 115.9 134.4 133.8 85.2 89.5 93.1 85.8 91.2 94.9 86.6 90.7 93.7 86.6 93.0 94.6 1973 1975 Previous cycle5 High Low High Low Latest cycle6 High Low 1999 Dec. 81.3 2000 July Aug. Sept.r Oct.r Nov. Dec.p Capacity utilization rate (percent)' 1 Total industry........................................ 89.2 72.6 87.3 71.1 85.4 78.1 81.7 82.3 82.6 82.4 81.9 81.4 80.6 2 M anufacturing........................................ 88.5 70.5 86.9 69.0 85.7 76.6 81.0 81.6 81.7 81.7 81.2 80.4 79.1 3 4 Primary processing3 ........................ Advanced processing4 ...................... 91.2 87.2 68.2 71.8 88.1 86.7 66.2 70.4 88.9 84.2 77.7 76.1 85.1 79.2 85.6 79.8 85.4 80.2 85.2 80.2 84.3 80.0 82.5 79.8 80.1 79.2 5 6 7 8 9 10 Durable g o o d s .................................... Lumber and p ro d u c ts .................. Primary metals ............................. Iron and steel ........................... N onferrous................................. Industrial machinery and equipment................................. Electrical machinery......................... Motor vehicles and parts.................. Aerospace and miscellaneous transportation equipm ent......... 89.2 88.7 100.2 105.8 90.8 68.9 61.2 65.9 66.6 59.8 87.7 87.9 94.2 95.8 91.1 63.9 60.8 45.1 37.0 60.1 84.6 93.6 92.7 95.2 89.3 73.1 75.5 73.7 71.8 74.2 81.0 83.7 89.5 88.8 90.4 82.3 80.3 87.3 84.8 90.5 82.6 78.1 86.3 84.5 88.5 82.7 78.9 87.3 86.0 89.0 81.6 77.3 83.6 80.6 87.3 80.5 75.9 83.3 79.3 88.1 78.9 75.0 78.5 72.1 86.0 96.0 89.2 93.4 74.3 64.7 51.3 93.2 89.4 95.0 64.0 71.6 45.5 85.4 84.0 89.1 72.3 75.0 55.9 80.2 84.0 82.2 82.1 91.8 78.1 82.9 90.8 83.1 83.1 90.2 83.8 83.2 88.2 79.0 82.6 87.2 73.5 81.6 85.6 70.4 78.4 67.6 81.9 66.6 87.3 79.2 72.1 72.7 71.7 70.7 71.8 73.1 72.8 Nondurable goods ............................... Textile mill products ...................... Paper and products........................... Chemicals and products.................. Plastics materials ........................ Petroleum products........................... 87.8 91.4 97.1 87.6 102.0 96.7 71.7 60.0 69.2 69.7 50.6 81.1 87.5 91.2 96.1 84.6 90.9 90.0 76.4 72.3 80.6 69.9 63.4 66.8 87.3 90.4 93.5 86.2 97.0 88.5 80.7 77.7 85.0 79.3 74.8 85.1 81.2 82.9 86.8 78.8 92.7 93.8 80.6 82.1 83.6 76.2 92.8 95.0 80.5 80.6 82.3 76.7 89.1 95.5 80.3 79.9 82.6 76.3 89.8 95.4 80.5 78.6 85.0 76.6 90.5 94.6 80.0 75.2 83.2 76.2 89.5 94.6 79.2 75.2 81.3 75.7 88.6 89.4 20 Mining ..................................................... 21 Utilities..................................................... 22 Electric ................................................. 94.3 96.2 99.0 88.2 82.9 82.7 96.0 89.1 88.2 80.3 75.9 78.9 88.0 92.6 95.0 87.0 83.4 87.1 84.5 90.0 94.3 86.3 89.5 91.8 86.9 91.5 95.3 86.4 91.0 93.9 86.5 89.0 91.6 86.5 92.1 94.4 86.9 97.9 97.8 11 12 13 14 15 16 17 18 19 1. Data in this table appear in the Board’s G.17 (419) monthly statistical release. The data are also available on the Board’s web site, http://www.federalreserve.gov/releases/gl7. The latest historical revision of the industrial production index and the capacity utilization rates was released in December 2000. The recent annual revision is described in an article in the March 2001 issue of the Bulletin. For a description of the methods of estimating industrial production and capacity utilization, see “Industrial Production and Capacity Utilization: Historical Revision and Recent Developments,” Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92, and the references cited therein. For details about the construction of individual industrial production series, see “Industrial Production: 1989 Developments and Historical Revision,” Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Capacity utilization is calculated as the ratio of the Federal Reserve’s seasonally adjusted index of industrial production to the corresponding index of capacity. 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; primary metals; and fabricated metals. 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather and products; machinery; transportation equipment; instruments; and miscellaneous manufac tures. 5. Monthly highs, 1978-80; monthly lows, 1982. 6. Monthly highs, 1988-89; monthly lows, 1990-91. A44 2.13 Domestic Nonfinancial Statistics □ March 2001 INDUSTRIAL PRODUCTION Indexes and Gross Value1 M o n th ly d a ta se a s o n a lly a d ju s te d Group 1992 pro por tion 1999 2000 2000 avg. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct.r Nov.1" Dec. Index (1992 = 100) M a jor M arkets 1 Total index .......................................................... 100.0 147.5 142.8 143.6 144.3 145.2 146.3 147.2 147.9 147.6 148.6 149.0 148.5 148.1 147.3 2 Products ................................................................. 3 Final products................................................... 4 Consumer goods, to ta l ............................... 5 Durable consumer g o o d s ...................... 6 Automotive products ........................ 7 Autos and trucks ........................... 8 Autos, consumer ...................... 9 Trucks, co n su m er...................... 10 Auto parts and allied goods . . . . 11 O th e r...................................................... 12 Appliances, televisions, and air conditioners ........................... 13 Carpeting and f u rn itu re ................ 14 Miscellaneous home g o o d s ......... 15 Nondurable consumer g o o d s ................ 16 Foods and to b a c c o ............................. 17 Clothing ............................................... 18 Chemical p ro d u c ts ............................. iy Paper products .................................... 20 Energy................................................... 21 F u e ls ................................................. 22 Residential utilities......................... 60.5 46.3 29.1 6.1 2.6 1.7 .9 .7 .9 3.5 136.3 138.8 123.1 160.8 153.2 167.0 114.0 221.9 131.6 167.2 132.7 134.4 122.4 161.6 153.3 166.2 112.0 222.1 132.8 168.7 133.3 135.1 122.1 162.9 156.9 171.4 116.5 228.2 134.3 167.6 134.2 135.9 122.8 162.6 154.8 169.0 116.3 223.7 132.5 169.1 134.4 136.0 122.2 162.1 155.3 170.3 115.1 227.3 131.9 167.7 135.3 137.2 123.2 164.7 157.6 173.7 118.5 230.7 132.7 170.6 135.5 137.5 123.5 163.8 157.9 175.7 119.7 233.7 130.6 168.5 136.0 138.3 124.2 164.4 157.8 174.8 118.1 233.2 131.6 169.8 135.8 138.1 122.9 158.7 149.4 160.5 113.6 209.8 131.6 166.7 136.6 139.2 123.8 160.0 153.8 169.8 120.3 221.8 129.1 165.2 136.7 139.3 123.8 162.8 156.7 172.7 120.5 227.1 132.1 167.7 136.3 138.8 122.7 157.4 148.0 159.1 107.8 212.0 130.2 165.6 136.4 139.1 122.8 155.1 144.4 153.4 103.0 205.1 129.7 164.5 136.1 138.9 122.9 152.8 140.2 146.2 94.9 198.1 129.6 164.3 1.0 .8 1.6 23.0 10.3 2.4 4.5 2.9 2.9 .8 2.1 333.3 129.7 120.4 114.2 110.7 84.9 137.0 111.1 116.6 112.5 118.8 336.5 128.2 122.8 113.3 109.7 86.8 137.3 108.5 113.8 112.1 114.0 328.3 129.2 122.7 112.7 110.3 86.3 132.9 109.1 113.1 108.4 115.1 336.1 129.7 122.7 113.5 110.6 87.5 133.5 109.6 116.2 111.0 118.5 332.3 128.3 122.1 112.9 110.8 87.2 134.9 108.3 110.7 114.9 107.4 341.1 131.8 122.7 113.6 110.9 87.5 136.5 108.2 113.6 112.1 113.8 334.6 130.8 121.6 114.1 110.3 86.8 138.5 109.0 116.0 113.1 117.1 348.2 130.1 120.5 114.8 110.8 85.1 139.3 111.6 117.0 113.4 118.5 322.3 131.5 121.3 114.5 111.0 85.6 137.4 112.4 114.9 112.6 115.6 325.0 128.6 119.7 115.2 111.4 84.2 139.4 112.4 117.1 113.1 119.0 340.5 131.9 118.1 114.7 110.5 83.1 138.4 112.4 118.4 115.8 119.1 333.1 130.2 117.5 114.5 110.4 82.8 138.9 113.8 115.7 113.0 116.7 338.6 126.0 116.7 115.0 110.3 83.1 138.9 112.6 120.5 115.4 123.0 343.0 125.7 115.3 115.5 110.3 81.9 139.0 112.5 124.2 106.6 135.1 23 24 25 26 27 28 29 30 31 32 33 Equipm ent.......................................................... Business e q u ip m e n t.................................... Information processing and related........... Computer and office equipment........... Industrial................................................... T ransit........................................................ Autos and trucks ............................... Other .......................................................... Defense and space eq u ip m e n t.................. Oil and gas well drilling............................. Manufactured homes ................................. 17.2 13.2 5.4 1.1 4.0 2.5 1.2 1.3 3.3 .6 .2 166.0 194.3 312.7 1,160.2 144.4 127.6 145.4 145.4 76.1 131.7 116.7 155.7 180.6 274.9 930.2 137.3 128.8 147.1 137.7 78.5 120.1 142.0 158.7 185.2 284.8 979.1 140.4 130.9 153.8 138.6 77.1 121.1 138.5 159.8 187.0 289.2 1,019.5 142.1 130.6 154.2 138.5 75.9 124.6 133.8 161.3 188.9 293.5 1,044.0 142.2 131.5 154.0 142.9 76.0 126.7 131.7 162.8 191.1 298.8 1,062.0 142.9 131.3 156.5 146.7 75.5 126.7 127.2 163.1 191.6 302.5 1,087.8 143.4 129.0 153.9 145.8 75.5 130.3 122.9 164.3 192.8 307.0 1,130.8 143.8 130.1 152.9 142.8 76.3 130.8 121.9 166.3 195.0 313.9 1,182.8 144.4 127.6 141.5 148.1 77.9 136.2 116.8 167.9 197.8 322.1 1,229.0 147.7 126.8 142.8 144.8 76.1 137.1 115.5 168.3 199.5 327.2 1,264.1 146.5 127.7 144.2 149.3 73.7 132.8 109.3 169.1 200.2 332.8 1,295.8 146.9 121.7 131.4 154.0 75.2 136.5 96.8 169.7 200.3 338.4 1,317.3 146.8 119.7 126.2 148.5 76.9 138.9 93.2 169.0 199.4 339.4 1,325.8 144.5 118.1 123.3 150.7 76.9 137.9 90.5 34 35 36 Intermediate products, to ta l ........................... Construction supplies................................. Business s u p p lie s........................................ 14.2 5.3 8.9 128.7 142.9 120.4 127.4 142.2 118.7 127.8 142.6 119.0 128.9 143.4 120.3 129.5 144.6 120.6 129.3 144.4 120.4 129.4 143.1 121.3 129.0 143.4 120.5 128.7 143.8 119.8 128.8 142.7 120.6 128.6 143.1 120.0 128.4 142.2 120.3 128.4 140.7 121.2 127.7 137.7 121.7 37 M aterials................................................................. 38 Durable goods materials ............................... 39 Durable consumer p a r ts ............................. 40 Equipment p a r t s .......................................... 41 O th e r.............................................................. 42 Basic metal materials ........................... 43 Nondurable goods materials ........................ 44 Textile m aterials.......................................... 45 Paper m aterials............................................. 46 Chemical m aterials...................................... 47 O th e r.............................................................. 48 Energy materials ............................................ 49 Primary e n e rg y ............................................ 50 Converted fuel m a te ria ls ........................... 39.5 20,8 4.0 7.6 9.2 3.1 8.9 1.1 1.8 3.9 2.1 9.7 6.3 3.3 167.8 227.4 164.1 479.0 134.6 128.3 114.0 97.8 115.9 117.5 112.7 103.4 98.1 114.5 161.0 210.6 163.8 392.6 134.8 131.0 116.8 100.7 118.4 120.1 116.1 103.1 98.5 112.5 162.0 213.4 164.3 404.2 135.3 130.7 116.2 100.4 118.2 119.7 114.6 102.6 97.2 113.9 162.4 215.4 163.2 416.6 134.8 128.8 115.3 101.9 116.7 118.6 113.0 102.1 96.2 114.6 164.7 220.0 164.9 434.2 135.9 131.1 115.6 102.2 118.1 118.6 113.5 102.5 97.7 112.3 166.1 222.7 162.2 451.9 135.7 131.9 115.2 101.1 118.7 118.1 112.6 103.5 98.8 113.0 168.4 227.6 169.9 466.8 135.9 130.8 115.7 100.9 117.5 119.8 112.4 103.3 98.3 113.7 169.4 230.3 165.7 486.2 135.9 130.7 115.2 101.7 118.1 118.4 112.3 103.1 98.4 112.4 169.0 230.5 158.3 499.9 135.3 128.5 113.9 97.9 114.9 117.0 113.7 102.9 98.7 110.8 170.5 233.8 168.3 505.7 134.7 127.5 112.8 99.3 112.8 116.8 110.2 104.2 98.9 115.1 171.3 235.7 169.0 512.1 135.5 129.2 112.7 95.9 113.8 116.3 112.0 104.3 98.5 116.6 170.8 234.1 166.9 513.6 133.7 125.1 113.7 93.8 117.3 116.4 114.2 103.9 98.2 116.2 169.3 231.5 156.7 520.0 132.2 124.7 111.6 89.2 113.6 115.3 112.2 104.6 98.4 118.3 167.6 227.6 149.5 522.6 128.9 118.8 109.8 88.8 111.5 113.7 109.7 106.1 99.6 120.7 97.1 95.1 147.2 146.4 142.4 141.5 143.0 142.2 143.8 143.0 144.8 143.9 145.7 144.9 146.7 145.8 147.5 146.5 147.5 146.9 148.4 147.4 148.7 147.7 148.7 147.7 148.4 147.9 147.7 147.4 98.2 27.4 26.2 140.5 120.7 123.9 136.7 120.0 123.5 137.2 119.5 123.2 137.8 120.3 123.5 138.6 119.6 123.6 139.6 120.5 124.4 140.4 120.7 124.4 141.0 121.5 125.0 140.5 120.9 123.9 141.4 121.3 124.5 141.6 121.2 124.4 141.1 120.7 123.6 140.6 121.1 123.0 139.8 121.5 122.5 12.0 200.2 184.5 188.9 190.8 193.1 195.2 196.1 197.6 201.5 204.5 206.3 208.7 209.5 209.0 12.1 29.8 158.4 188.4 150.3 179.3 153.6 180.8 154.4 181.5 155.7 184.6 157.4 186.0 157.3 189.3 157.6 190.7 158.6 190.3 160.3 191.8 161.2 193.0 161.2 192.4 160.9 189.9 160.0 186.7 Special A ggregates 51 Total excluding autos and tru c k s...................... 52 Total excluding motor vehicles and p a rts ............. 53 Total excluding computer and office equipm ent..................................................... 54 Consumer goods excluding autos and trucks . 55 Consumer goods excluding e n e rg y .................. 56 Business equipment excluding autos and trucks ............................................................ 57 Business equipment excluding computer and office equipm ent.......................................... 58 Materials excluding e n e rg y ............................... Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1— Continued M o n th ly d a ta s e a s o n a lly a d ju s te d Group 1992 pro por tion SIC2 code 1999 2000 2000 avg. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct.r Nov.r Dec. Index (1992 = 100) M ajor I ndustries 59 Total index ................................. 100.0 147.5 142.8 143.6 144.3 145.2 146.3 147.2 147.9 147.6 148.6 149.0 148.5 148.1 147.3 60 Manufacturing ............................. Primary processing.................. 61 62 Advanced processing ............. 85.4 26.5 58.9 153.6 177.8 139.3 148.4 170.9 135.9 149.2 171.9 136.8 149.9 173.0 137.1 151.3 175.5 137.9 152.2 177.1 138.5 153.1 178.7 139.1 153.8 180.1 139.4 153.7 179.4 139.5 154.6 180.3 140.5 155.1 181.2 140.8 154.8 180.6 140.6 153.9 178.1 140.6 152.2 174.3 139.9 "24 25 45.0 2.0 1.4 193.3 118.2 142.8 182.6 122.8 138.9 185.1 122.9 138.9 186.3 122.3 140.7 188.9 121.9 139.3 191.0 121.6 140.7 193.0 120.5 143.0 194.6 118.7 141.9 194.7 118.6 142.6 196.9 115.5 143.8 198.4 116.8 146.6 197.2 114.7 147.3 196.0 112.6 145.6 193.5 111.4 143.5 32 33 331,2 331PT 3 3 3 -6 ,9 34 2.1 3.1 1.7 .1 1.4 5.0 134.5 133.2 130.5 120.2 136.6 135.4 133.4 136.6 135.4 127.4 138.3 133.3 132.8 136.3 134.8 126.4 138.3 134.9 133.6 134.7 133.5 121.7 136.4 135.8 134.4 137.1 136.9 125.8 137.6 135.6 132.9 137.8 136.8 127.3 139.1 135.9 134.2 136.7 135.9 127.1 137.9 136.2 134.6 136.4 135.5 128.2 137.6 135.7 136.3 133.9 129.9 126.4 138.8 136.1 136.1 132.4 129.7 123.9 135.7 136.3 136.5 133.9 131.9 117.7 136.5 136.0 137.0 128.4 123.7 115.6 133.9 136.0 134.1 127.9 121.8 106.3 135.1 134.7 131.5 120.5 110.8 96.9 131.9 131.2 63 64 65 66 79 80 Durable goods........................... Lumber and products........... Furniture and fixtures........... Stone, clay, and glass products........................ Primary metals .................... Iron and steel.................... Raw steel...................... Nonferrous........................ Fabricated metal products . . Industrial machinery and equipm ent.................... Computer and office equipm ent.................... Electrical machinery............. Transportation equipment. . . Motor vehicles and parts . Autos and light trucks . Aerospace and miscellaneous transportation equipm ent............. Instruments........................... Miscellaneous...................... 81 82 83 84 85 86 87 88 89 90 91 Nondurable goods.................... Foods .................................... Tobacco products.................. Textile mill products........... Apparel products.................. Paper and products ............. Printing and publishing . . . . Chemicals and products . . . . Petroleum products............. Rubber and plastic products . Leather and products........... 20 21 22 23 26 27 28 29 30 31 40.4 9.4 1.6 1.8 2.2 3.6 6.7 9.9 1.4 3.5 .3 116.9 114.7 95.3 99.9 91.6 116.1 110.2 128.6 116.7 142.3 69.9 116.5 113.0 97.8 103.4 94.0 118.8 108.6 127.0 115.4 142.7 70.5 116.0 113.3 99.8 103.6 93.4 117.5 108.9 124.8 113.7 143.2 72.1 116.3 114.1 97.4 103.8 94.3 117.4 108.9 124.9 115.5 143.2 71.4 116.6 114.9 94.3 104.4 94.1 117.8 109.7 124.9 118.9 143.0 70.6 116.7 114.7 95.6 104.4 94.6 118.4 109.1 125.2 117.2 143.5 70.0 116.7 114.2 95.3 102.6 93.0 116.5 109.9 126.3 118.9 142.6 70.5 116.7 114.9 93.8 103.1 91.2 118.8 109.1 125.9 118.8 143.5 69.3 116.3 115.0 95.8 101.4 92.0 114.9 110.0 124.8 117.0 144.4 70.0 116.3 115.1 96.6 99.4 90.7 113.3 110.4 125.9 117.6 142.1 68.8 116.0 114.6 94.5 98.4 89.5 113.7 110.9 125.4 117.4 141.9 69.8 116.4 114.8 93.7 96.7 89.2 117.2 111.6 126.1 116.5 141.3 68.8 115.8 114.8 93.1 92.3 89.1 114.8 111.8 125.7 116.4 139.7 69.1 114.7 114.5 94.1 92.2 87.7 112.3 111.5 125.0 110.0 137.0 68.0 92 M ining.......................................... 93 M e ta l........................................ 94 C o a l.......................................... Oil and gas extraction............. 95 Stone and earth m inerals......... 96 10 12 13 14 6.9 .5 1.0 4.8 .6 100.0 97.2 109.1 95.0 126.3 98.7 98.6 108.2 93.4 126.3 98.6 101.3 106.8 93.5 124.9 99.1 99.1 102.6 94.0 131.7 100.4 99.7 110.1 94.6 133.4 99.9 98.8 112.6 94.0 130.4 99.6 95.7 112.2 94.3 123.9 100.4 97.5 113.6 94.8 127.7 100.5 92.9 110.3 95.7 124.4 101.0 95.8 109.3 96.3 125.0 100.4 99.3 107.0 95.7 123.7 100.4 96.7 110.2 95.4 124.6 100.3 95.5 108.6 95.7 122.6 100.6 95.4 108.2 96.3 119.5 97 Utilities.......................................... Electric...................................... 491.493PT 98 99 Gas .......................................... 492.493PT 7.7 6.2 1.6 120.9 123.7 111.8 117.4 121.2 104.1 117.8 120.8 106.8 119.5 121.0 113.1 114.7 119.7 98.3 118.7 122.8 104.4 121.6 125.2 108.7 121.7 124.8 110.5 119.1 121.1 111.0 122.1 126.1 108.4 121.7 124.7 110.5 119.4 122.1 109.1 123.9 126.3 114.4 132.0 131.3 130.4 80.5 152.6 147.2 147.9 148.7 150.1 151.0 151.7 152.6 153.2 153.5 153.9 154.2 154.0 152.6 83.6 145.4 141.2 141.9 142.3 143.6 144.4 145.2 145.8 145.4 146.2 146.5 146.1 145.2 143.5 1,048.5 1,097.8 1,140.2 1,193.1 1,248.0 1,281.6 1,310.3 1,331.5 1,361.1 1,378.6 67 68 69 70 71 72 73 74 75 76 77 78 35 8.0 252.8 232.8 238.7 242.1 245.8 247.2 249.9 250.9 253.9 257.9 260.0 262.3 261.9 260.8 357 36 37 371 371PT 1.8 7.3 9.5 4.9 2.6 1,347.9 550.7 130.5 169.6 153.1 1,094.0 445.5 130.7 169.4 152.2 1,149.5 460.2 132.0 172.7 157.1 1,195.9 474.8 130.7 170.3 155.1 1,224.7 495.2 131.9 172.5 156.0 1,245.1 516.5 132.1 174.1 159.2 1,272.3 533.8 133.6 177.6 161.1 1,316.2 555.0 133.5 176.1 160.1 1,370.4 571.2 128.0 163.1 147.8 1,421.6 580.0 132.4 173.9 156.4 1,464.2 592.2 132.4 175.5 158.8 1,498.8 594.8 128.5 165.7 145.8 1,521.4 604.8 124.0 154.5 140.4 1,527.6 610.7 120.8 148.2 133.3 3 7 2 -6 ,9 38 39 4.6 5.4 1.3 93.8 122.3 130.8 94.2 120.8 130.9 93.8 120.6 131.6 93.5 119.7 130.9 93.7 120.2 130.6 92.7 121.5 130.9 92.3 121.3 130.7 93.6 122.2 130.5 94.9 122.6 132.1 93.5 123.3 130.8 92.1 123.7 130.9 93.6 123.4 131.1 95.1 124.6 130.0 94.7 124.3 129.5 Special Aggregates 100 Manufacturing excluding motor vehicles and p a rts ............... 101 Manufacturing excluding computer and office equipment ........................... 102 Computers, communicatioas equipment, and semiconductors.................... 103 Manufacturing excluding computers and semiconductors.................... 104 Manufacturing excluding computers, communications equipment, and semiconductors.................... 5.9 ' 1,T98.4 905.9 955.1 999.4 81.1 128.2 126.9 127.1 127.1 127.8 128.0 128.4 128.4 127.7 128.2 128.4 127.9 126.9 125.2 79.5 125.0 124.3 124.3 124.3 124.9 125.1 125.4 125.3 124.5 124.9 125.0 124.5 123.4 121.6 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total............................. 2,001.9 2,860.4 2,812.2 2,828.5 2,846.9 2,853.1 2,868.9 2,872.7 2,883.5 2,865.7 2,882.9 2,889.1 2,866.6 2,865.5 2,847.7 106 Final ............................................ 1,552.1 2,203.3 2,156.4 2,170.2 2,183.5 2,186.3 2,202.8 2,205.6 2,218.6 2,202.8 2,220.5 2,228.1 2,206.2 2,206.9 2,192.8 107 Consumer goods...................... Equipment ............................... 108 109 Intermediate................................. 1,049.6 502.5 449.9 1,340.0 865.5 656.7 1,337.2 822.1 654.7 1,334.8 840.3 657.2 1,342.3 846.2 662.3 1,338.5 854.0 665.6 1,347.2 862.2 665.0 1,349.8 862.2 666.0 1,357.8 867.3 663.9 1,338.7 872.8 661.8 1,348.7 880.8 661.5 1,353.7 883.3 660.2 1,335.2 881.2 659.5 1,336.5 880.4 657.6 1,327.1 875.8 654.0 1. Data in this table appear in the Board’s G.17 (419) monthly statistical release. The data are also available on the Board’s web site, http://www.federalreserve.gov/releases/gl7. The latest historical revision of the industrial production index and the capacity utilization rates was released in December 2000. The recent annual revision is described in an article in the March 2001 issue of the Bulletin. For a description of the methods of estimating industrial production and capacity utilization, see “Industrial Production and Capacity Utilization: Historical Revision and Recent Developments,” Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92, and the references cited therein. For details about the construction of individual industrial production series, see “Industrial Production: 1989 Developments and Historical Revision,” Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Standard industrial classification. A46 2.14 Domestic Nonfinancial Statistics □ March 2001 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted Feb. Mar. Apr. May June Julyr Aug.r Sept.r Oct.r Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 2 3 4 5 6 7 8 9 10 11 12 13 Permits authorized .................................... One-family ............................................. Two-family or m o r e ............................. S ta rte d .......................................................... One-family ............................................. Two-family or m o r e ............................. Under construction at end of period1 ......... One-family ............................................. Two-family or m o r e ............................. C om pleted................................................... One-family ............................................. Two-family or m o r e ............................. Mobile homes s h ip p e d ............................. 1,441 1,062 379 1,474 1,134 340 847 555 292 1,400 1,116 284 354 1,612 1,188 425 1,617 1,271 346 971 659 312 1,474 1,160 315 374 1,664 1,247 417 1,667 1,335 332 993 679 314 1,636 1,307 329 348 Merchant builder activity in one-family units 14 Number s o l d ............................................... 15 Number for sale at end of period1 ........... 804 287 886 300 907 326 905 309 947 321 865 305 875 308 Price o f units sold (thousands o f dollars)2 16 Median ........................................................ 17 Average ........................................................ 146.0 176.2 152.5 181.9 160.0 195.8 162.3 199.6 165.7 205.3 163.1 207.5 18 Number s o l d ............................................... 4,382 4,970 5,197 4,760 5,200 Price o f units sold (thousands o f dollars)2 19 Median ........................................................ 20 A v e ra g e ........................................................ 121.8 150.5 128.4 159.1 133.3 168.3 133.7 168.1 134.7 171.5 1,661 1,223 22,288r 1,822 1,324 6,599r 1,041 712 14,504r 1,732 1,382 n.a.r 291 1,597 1,238 16,945r 1,630 1,327 8,545r 1,031 706 51,117r 1,728 1,375 n.a.r 287 1,511 1,117 8,035 1,527 1,201 15,685 1,020 691 33,557 1,531 1,216 n.a. 251 1,486 1,140 12,877 1,519 1,229 13,501 1,016 692 39,051 1,612 1,266 n.a. 249 1,518 1,157 6,390 1,537 1,226 14,210 1,009 689 57,229 1,559 1,215 n.a. 231 1.546 1,191 9,121 1,529 1,232 5,803 1,012 693 31,678 1.546 1,212 n.a. 213 1,598 1,183 11,498 1,570 1,239 10,203 1,010 690 46,673 1,575 1,273 n.a. 196 827 312 914 311 860 313 939 310 929 313 909 317 165.0 200.1 159.9 197.7 168.6 202.4 165.0 200.4 169.9 207.2 170.0 212.0 169.9 205.8 4,880 5,090 5,310 4,820 5,280 5,160 5,000 5,220 136.1 173.3 137.6 176.0 140.2 178.9 143.3 177.7 143.2 183.0 141.6 178.6 138.6 176.9 139.9 176.2 1,559 1,164 21,022r 1,652 1,310 3,989r 1,029 703 1 l,859r 1,660 1,354 n.a.r 271 1,511 1,150 4,706r 1,591 1,258 9,553r 1,023 697 32,695r 1,705 1,377 n.a.r 265 1,528 1,127 7,873r 1,571 1,227 14,080r 1,024 696 55,458r 1,545 1,222 n.a.r 262 E xisting U nits (one-family) Value of new construction (millions of dollars)3 C onstruction 21 Total put in place .................................... 656,084 710,104 765,719 816,012 829,517 816,156 811,816 798,860 793,036 801,748 813,477 820,157 815,637 22 P riv a te .......................................................... 23 Residential............................................... 24 N onresidential........................................ 25 Industrial b uildings........................... 26 Commercial buildings...................... 27 Other b u ild in g s.................................. 28 Public utilities and other ................ 501,426 289,101 212,325 36,696 86,151 37,193 52,287 550,983 314,058 236,925 40,464 95,753 39,607 61,101 592,037 348,584 243,454 35,016 103,759 41,279 63,400 629,590 368,745 260,845 38,538 115,440 45,553 61,314 637,743 372,118 265,625 39,030 116,030 45,808 64,757 629,491 368,948 260,543 38,670 115,042 44,136 62,695 629,820 367,653 262,167 39,814 113,381 45,540 63,432 624,383 363,756 260,627 39,951 112,834 44,559 63,283 619,046 355,196 263,850 42,081 112,114 45,689 63,966 616,918 350,783 266,135 41,552 115,279 46,779 62,525 625,317 351,682 273,635 40,872 118,445 46,689 67,629 632,851 359,058 273,793 42,552 117,907 47,686 65,648 632,237 353,768 278,469 48,390 115,482 46,811 67,786 29 Public .......................................................... 30 M ilita ry ................................................... 31 Highway ................................................. 32 Conservation and development ......... 33 O t h e r ....................................................... 154,657 2,561 43,886 5,708 102,502 159,121 2,538 48,339 5,421 102,823 173,682 2,122 54,447 6,002 111,110 186,422 3,011 53,145 6,975 123,291 191,774 2,249 59,007 6,494 124,024 186,665 2,180 55,923 5,840 122,722 181,995 2,246 51,966 5,363 122,420 174,477 2,157 48,148 5,832 118,340 173,990 2,100 49,262 4,875 117,753 184,830 2,331 52,694 5,629 124,176 188,160 2,418 53,183 6,158 126,401 187,305 1,844 48,138 6,748 130,575 183,400 2.366 46,960 5,392 128.682 1. Not at annual rates. 2. Not seasonally adjusted. 3. Recent data on value of new construction may not be strictly comparable with data for previous periods because of changes by the Bureau of the Census in its estimating techniques. For a description of these changes, see Construction Reports (C -30-76-5), issued by the Census Bureau in July 1976. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are private, domestic shipments as reported by the Manufactured Housing Institute and season ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are published by the National Association of Realtors. All back and current figures are available from the originating agency. Permit authorizations are those reported to the Census Bureau from 19,000 jurisdictions beginning in 1994. Selected Measures 2.15 A47 CONSUMER A N D PRODUCER PRICES P e rc e n ta g e c h a n g e s b a s e d o n s e a s o n a lly a d ju s te d d a ta e x c e p t as n o te d Change from 12 months earlier Change from 3 months earlier (annual rate) Change from 1 month earlier 2000 2000 Item 1999 Dec. Index level, Dec. 2000' 2000 Dec. Mar. June Sept. Dec. Aug. Sept. Oct. Nov. Dec. C onsum er P r ices 2 (1982-84=100) 1 All ite m s .................................................................. 2.7 3.4 6.1 2.6 2.8 2.1 - .1 .5 .2 .2 .2 174.0 2 Food ......................................................................... 3 Energy ite m s ............................................................ 4 All items less food and energy ........................... 5 Com m odities........................................................ 6 Services ................................................................ 1.9 13.4 1.9 .2 2.7 2.8 14.2 2.6 .6 3.4 1.7 50.5 3.4 .3 4.7 2.7 6.6 2.2 .0 3.0 3.9 3.5 2.7 1.7 3.0 2.6 1.6 2.0 .3 2.8 .2 - 2 .9 .2 - .1 .3 .2 3.8 .3 .5 .1 .1 .2 .2 - .1 .2 .0 .1 .3 .3 .3 .5 .2 .1 - .2 .1 170.0 128.1 182.8 145.1 204.4 7 Finished goods ........................................................ 8 Consumer foods ................................................. 9 Consumer energy ............................................... 10 Other consumer goods ...................................... 11 Capital equipment ............................................ 2.9 .8 18.1 1.2 .3 3.6 1.7 17.1 1.2 1.2 7.9 3.6 51.8 .8 .9 2.3 2.7 8.3 1.0 1.2 2.0 - 2 .3 8.6 2.1 1.7 2.0 2.7 4.6 1.0 .9 - .4 —.1' - 1 .8 r ,3r .1 ,8r ,2r 4.2r .r ,r .4 .8 1.4 .0 .0 .1 .2 .4 - .1 .0 .0 - .4 - .7 .3 .2 139.7 137.9 97.9 155.3 139.9 Intermediate materials 12 Excluding foods and f e e d s .................................... 13 Excluding energy ................................................... 4.0 1.9 4.2 1.6 9.5 4.2 3.1 2.7 3.1 .3 .9 - .6 - .3 - .1 .7 .0 .2 .0 - .2 —.! .2 .0 131.5 136.8 Crude materials 14 Foods ......................................................................... 15 E n e rg y ....................................................................... 16 Other ......................................................................... - .1 36.9 14.0 7.2 76.0 - 5 .8 21.5 84.9 9.9 - 1 0 .4 163.6 - 1 0 .7 -1 4 .0 11.8 -1 0 .5 41.2 76.1 -1 0 .8 —4.3r - 4 .r —1.7r 3.6r 9.7r ,6r 3.5 4.6 - .6 1.3 -4 .1 - 2 .3 3.9 14.8 .0 103.9 154.7 137.5 P roducer P rices (1982=100) 1. Not seasonally adjusted. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. A48 2.16 Domestic Nonfinancial Statistics □ March 2001 GROSS DOMESTIC PRODUCT AND INCOME B illio n s o f c u rre n t d o lla rs e x c e p t a s n o ted ; q u a rte rly d a ta at s e a s o n a lly a d ju s te d a n n u a l ra te s 1999 Account 1997 1998 2000 1999 Q3 Q4 Ql Q2 Q3 G r o s s D o m e s t ic P r o d u c t 1 T o ta l........................................................................................................................ 8,318.4 8,790.2 9,299.2 9,340.9 9,559.7 9,752.7 9,945.7 10,039.4 By source Personal consumption expenditures ................................................................ Durable goods .................................................................................................. Nondurable goods ........................................................................................... Services ............................................................................................................. 5,529.3 642.5 1,641.6 3,245.2 5,850.9 693.9 1,707.6 3,449.3 6,268.7 761.3 1,845.5 3,661.9 6,319.9 767.2 1,860.0 3,692.7 6,446.2 787.6 1,910.2 3,748.5 6,621.7 826.3 1,963.9 3,831.6 6,706.3 814.3 1,997.6 3,894.4 6,810.8 824.7 2,031.5 3,954.6 6 Gross private domestic in v estm e n t.................................................................. 7 Fixed investment ............................................................................................. 8 Nonresidential ............................................................................................. 9 Structures .................................................................................................. 10 Producers’ durable e q u ip m en t.............................................................. 11 Residential structures.................................................................................. 1,390.5 1,327.7 999.4 255.8 743.6 328.2 1,549.9 1,472.9 1,107.5 283.2 824.3 365.4 1,650.1 1,606.8 1,203.1 285.6 917.4 403.8 1,659.1 1,622.4 1,216.8 281.2 935.6 405.6 1,723.7 1,651.0 1,242.2 290.4 951.8 408.8 1,755.7 1,725.8 1,308.5 308.9 999.6 417.3 1,852.6 1,780.5 1,359.2 315.1 1,044.1 421.3 1,869.3 1,803.0 1,390.6 330.1 1,060.5 412.4 Change in business invento ries..................................................................... N o n fa rm ........................................................................................................ 62.9 60.0 77.0 76.4 43.3 43.6 36.7 42.0 72.7 71.8 29.9 32.4 72.0 72.2 66.4 67.5 14 Net exports of goods and services .................................................................. 15 E x p o rts ............................................................................................................... 16 I m p o rts ............................................................................................................... -8 9 .3 966.4 1,055.8 -1 5 1 .5 966.0 1,117.5 -2 5 4 .0 990.2 1,244.2 -2 8 0 .5 999.5 1,280.0 -2 9 9 .1 1,031.0 1,330.1 -3 3 5 .2 1,051.9 1,387.1 -3 5 5 .4 1,092.9 1,448.3 -3 8 9 .5 1,130.8 1,520.3 17 Government consumption expenditures and gross investment .................. 18 Federal ............................................................................................................... 19 State and local .................................................................................................. 1,487.9 538.2 949.7 1,540.9 540.6 1,000.3 1,634.4 568.6 1,065.8 1,642.4 570.4 1,072.1 1,688.8 591.6 1,097.3 1,710.4 580.1 1,130.4 1,742.2 604.5 1,137.7 1,748.8 594.2 1,154.6 By major type o f product 20 Final sales, to ta l .................................................................................................... 21 G o o d s ................................................................................................................. 22 D u ra b le .......................................................................................................... 23 N ondurable.................................................................................................... 24 Services ............................................................................................................. 25 Structures ........................................................................................................... 8,255.5 3,082.5 1.436.2 1,646.4 4,442.1 730.9 8,713.2 3,239.3 1,532.3 1,707.1 4,673.0 800.9 9,255.9 3,467.0 1,651.1 1,815.8 4,934.6 854.3 9,304.2 3,490.6 1,669.4 1,821.1 4,965.2 848.5 9,486.9 3,566.0 1,701.8 1,864.1 5,050.3 870.7 9,722.8 3,680.3 1,773.7 1,906.6 5,135.2 907.4 9,873.7 3,734.1 1,809.6 1,924.5 5,231.4 908.2 9,973.1 3,776.5 1,830.6 1,945.9 5,281.6 915.0 26 Change in business inventories......................................................................... 27 Durable goods .................................................................................................. 28 Nondurable goods ........................................................................................... 62.9 33.1 29.8 77.0 45.8 31.2 43.3 27.2 16.1 36.7 27.6 9.1 72.7 47.5 25.2 29.9 20.7 9.2 72.0 48.3 23.7 66.4 39.2 27.2 8,159.5 8,515.7 8,875.8 8,905.8 9,084.1 9,191.8 9,318.9 9,369.5 30 T o ta l........................................................................................................................ 6,618.4 7,038.1 7,469.7 7,493.1 7,680.7 7,833.5 7,983.2 8,088.5 31 Compensation of employees .............................................................................. 32 Wages and salaries ......................................................................................... 33 Government and government e n te rp rise s.............................................. 34 Other ............................................................................................................. 35 Supplement to wages and salaries .............................................................. 36 Employer contributions for social insurance ........................................ 37 Other labor income .................................................................................... 4,651.3 3,886.0 664.3 3,221.7 765.3 289.9 475.4 4,984.2 4,192.8 692.7 3,500.1 791.4 305.9 485.5 5,299.8 4,475.1 724.4 3,750.7 824.6 323.6 501.0 5,340.9 4,512.2 727.5 3,784.7 828.7 325.9 502.8 5,421.1 4,583.5 734.5 3,849.0 837.7 330.3 507.4 5,512.2 4,660.4 749.9 3,910.5 851.8 337.8 514.0 5,603.5 4,740.1 760.2 3,980.0 863.3 342.9 520.5 5,679.6 4,804.9 765.4 4,039.5 874.7 347.1 527.6 38 Proprietors’ income1 ........................................................................................... 39 Business and professional1 ........................................................................... 40 Farm1 ................................................................................................................. 581.2 551.5 29.7 620.7 595.2 25.4 663.5 638.2 25.3 659.7 644.2 15.5 689.6 657.9 31.7 693.9 674.8 19.1 709.5 688.1 21.5 724.8 693.1 31.7 2 3 4 5 12 13 M em o 29 Total GDP in chained 1996 d o lla r s .............................................................. N ation al Income 41 Rental income of persons2 ................................................................................ 128.3 135.4 143.4 136.6 146.2 145.6 140.8 138.1 42 Corporate profits' ............................................................................................... 43 Profits before tax3 ........................................................................................... 44 Inventory valuation adjustm en t..................................................................... 45 Capital consumption a d justm en t................................................................... 833.8 792.4 8.4 32.9 815.0 758.2 17.0 39.9 856.0 823.0 -9 .1 42.1 842.0 819.0 -1 9 .7 42.7 893.2 870.7 - 1 9 .2 41.6 936.3 920.7 -2 5 .0 40.6 963.6 942.5 -1 3 .6 34.7 970.3 945.1 -4 .5 29.7 46 Net in te rest............................................................................................................ 423.9 482.7 507.1 513.8 530.6 545.4 565.9 575.7 1. With inventory valuation and capital consumption adjustments. 2. With capital consumption adjustment. 3. For after-tax profits, dividends, and the like, see table 1.48. SOURCE. U.S. Department of Commerce, Survey o f Current Business. Selected Measures 2.17 A49 PERSONAL INCOME AND SAVING B illio n s o f c u rre n t d o lla rs e x c e p t as n o te d ; q u a rte rly d a ta a t s e a s o n a lly a d ju s te d a n n u a l rate s 2000 1999 Account 1997 1998 1999 Q3 Q4 Q2 Ql Q3 P erso na l In co m e a nd Sa ving 1 Total personal income .................................................................................... 6,937.0 7,391.0 7,789.6 7,828.5 7,972.3 8,105.8 8,242.1 8,349.0 2 Wage and salary disbursem ents....................................................................... 3 Commodity-producing industries................................................................ 4 Manufacturing ........................................................................................... 5 Distributive industries .................................................................................. 6 Service industries ........................................................................................... 7 Government and government enterprises ................................................. 3,888.9 975.1 718.4 879.6 1,369.9 664.3 4,190.7 1,038.6 756.6 949.1 1,510.3 692.7 4,470.0 1,089.2 782.4 1,020.3 1,636.0 724.4 4,507.0 1,097.8 789.0 1,029.9 1,651.8 727.5 4,578.3 1,111.2 795.1 1,049.4 1,683.2 734.5 4,660.4 1,130.9 802.8 1,070.9 1,708.6 749.9 4,740.1 1,147.1 813.1 1,095.7 1,737.2 760.2 4,804.9 1,161.4 821.4 1,118.1 1,760.1 765.4 475.4 581.2 551.5 29.7 128.3 334.9 864.0 962.2 565.8 485.5 620.7 595.2 25.4 135.4 351.1 940.8 983.0 578.0 501.0 663.5 638.2 25.3 143.4 370.3 963.7 1,016.2 588.0 502.8 659.7 644.2 15.5 136.6 373.5 969.4 1,020.3 589.7 507.4 689.6 657.9 31.7 146.2 380.2 989.0 1,027.4 592.8 514.0 693.9 674.8 19.1 145.6 386.9 1,011.6 1,046.9 607.9 520.5 709.5 688.1 21.5 140.8 392.6 1,031.3 1,066.1 624.3 527.6 724.8 693.1 31.7 138.1 399.7 1,042.9 1,074.2 627.2 8 9 10 11 12 13 14 15 16 Other labor income ........................................................................................... Proprietors’ income1 ......................................................................................... Business and professional1 ......................................................................... Farm1 ............................................................................................................... Rental income of persons2 ................................................................................ Dividends ............................................................................................................. Personal interest income .................................................................................. Transfer payments ............................................................................................. Old-age survivors, disability, and health insurance benefits ................ 17 LESS: Personal contributions for social insurance ................................. 297.9 316.2 338.5 341.0 345.9 353.4 358.8 363.1 18 EQUALS: Personal income ................................................................................ 6,937.0 7,391.0 7,789.6 7,828.5 7,972.3 8,105.8 8,242.1 8,349.0 19 LESS: Personal tax and nontax payments ................................................. 20 EQUALS: Disposable personal income 21 968.8 1,070.9 1,152.0 1,164.0 1,197.3 1,239.3 1,277.2 1,308.1 .......................................................... 5,968.2 6,320.0 6,637.7 6,664.5 6,775.0 6,866.5 6,964.9 7,040.9 LESS: Personal o u tla y s .................................................................................. 5,715.3 6,054.7 6,490.1 6,543.3 6,674.1 6,855.6 6,944.3 7,054.7 22 EQUALS: Personal s a v in g .................................................................................. 252.9 265.4 147.6 121.1 101.0 11.0 20.6 - 1 3 .8 M emo Per capita (chained 1996 dollars) 23 Gross domestic product .................................................................................... 24 Personal consumption expenditures................................................................ 25 Disposable personal income ........................................................................... 30,434.4 20,230.9 21,838.0 31,474.2 20,988.5 22,672.0 32,512.4 21,900.7 23,191.0 32,586.0 22,004.4 23,203.0 33,153.5 22,266.4 23,404.0 33,485.6 22,635.5 23,472.0 33,874.7 22,757.7 23,639.0 33,984.3 22,959.1 23,732.0 26 Saving rate (percent) ......................................................................................... 4.2 4.2 2.2 1.8 1.5 .2 .3 - .2 27 Gross saving ...................................................................................................... 1,502.3 1,654.4 1,717.6 1,716.8 1,746.3 1,777.0 1,844.5 1,854.7 28 Gross private s a v in g ........................................................................................... 1,343.7 1,375.7 1,343.5 1,321.1 1,331.4 1,279.2 1,328.8 1,319.2 29 Personal s a v in g .................................................................................................... 30 Undistributed corporate profits1 ....................................................................... 31 Corporate inventory valuation adjustment ................................................... 252.9 261.3 8.4 265.4 218.9 17.0 147.6 229.4 -9 .1 121.1 214.0 -1 9 .7 101.0 241.7 - 1 9 .2 11.0 262.7 -2 5 .0 20.6 278.5 -1 3 .6 -1 3 .8 279.6 - 4 .5 Capital consumption allowances 32 Corporate ............................................................................................................. 33 Noncorporate ...................................................................................................... 581.5 250.9 624.3 265.1 676.9 284.5 687.7 293.1 694.8 288.7 711.5 294.1 731.1 298.7 750.0 303.3 34 Gross government s a v in g .................................................................................. 35 Federal ............................................................................................................. 36 Consumption of fixed c a p ita l.................................................................. 37 Current surplus or deficit ( —), national accounts................................. 38 State and local ............................................................................................... 39 Consumption of fixed c a p ita l.................................................................. 40 Current surplus or deficit ( - ) , national accounts................................. 158.6 33.4 86.8 -5 3 .3 125.2 94.2 31.0 278.7 137.4 88.4 49.0 141.3 99.5 41.7 374.1 217.3 92.8 124.4 156.8 106.8 50.0 395.7 240.6 93.4 147.3 155.1 107.7 47.4 414.9 238.4 95.0 143.3 176.6 109.9 66.6 497.7 333.0 97.2 235.8 164.7 112.7 52.0 515.7 339.9 98.9 240.9 175.8 115.6 60.1 535.5 354.1 100.8 253.3 181.4 118.2 63.2 41 Gross investment ............................................................................................. 1,532.1 1,629.6 1,645.6 1,627.3 1,678.5 1,699.3 1,771.9 1,752.8 42 Gross private domestic investment ................................................................ 43 Gross government investment ......................................................................... 44 Net foreign investm ent....................................................................................... 1,390.5 264.6 -123.1 1,549.9 278.8 -1 99.1 1,650.1 308.7 -3 1 3 .2 1,659.1 308.0 -3 3 9 .8 1,723.7 324.4 -3 6 9 .6 1,755.7 334.2 -3 9 0 .7 1,852.6 331.9 -4 1 2 .5 1,869.3 333.6 -450.1 45 Statistical discrepancy .................................................................................... 29.7 -2 4 .8 -7 1 .9 -8 9 .5 - 6 7 .8 - 7 7 .7 -7 2 .5 -1 0 1 .8 G r o s s s av in g 1. With inventory valuation and capital consumption adjustments. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey o f Current Business. A50 3.10 International Statistics □ March 2001 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1999 Item credits or debits 1 Balance on current account ....................................................................... 2 Balance on goods and services ............................................................ 3 Exports .................................................................................................. 4 Imports .................................................................................................. 5 Income, n e t ............................................................................................... 6 Investment, n e t .................................................................................... 7 Direct ............................................................................................... 8 Portfolio ........................................................................................... 9 Compensation of employees ............................................................ 10 Unilateral current transfers, n e t ............................................................ 1997 1998 -1 4 0 ,5 4 0 -1 05,932 936,937 -1,042,869 6,186 11,050 71,935 -6 0 ,8 8 5 -4 ,8 6 4 -4 0 ,7 9 4 2000 1999 -217,138 -166,898 932,977 -1,099,875 -6 ,211 -1 ,0 3 6 67,728 -6 8 ,7 6 4 -5 ,1 7 5 -4 4 ,0 2 9 Q3 Q4 Ql Q2 Q3 -3 31,479 -264,971 956,242 -1,221,213 -1 8,483 -1 3 ,1 0 2 62,704 -7 5 ,8 0 6 -5,381 -4 8 ,0 2 5 -8 9 ,6 4 9 -7 2 ,7 1 8 241,969 -3 14,687 -5 ,5 3 5 -4 ,1 9 3 15,701 -1 9 ,8 9 4 -1 ,3 4 2 -1 1 ,3 9 6 -9 6 ,2 2 3 -7 6 ,2 8 0 249,653 -3 2 5 ,9 3 3 -5 ,6 8 3 -4 ,3 1 9 16,275 -2 0 ,5 9 4 -1 ,3 6 4 -1 4 ,2 6 0 -101,505 -8 5 ,1 1 7 255,977 -3 41,094 -4 ,3 6 4 -2 ,9 8 7 17,068 -2 0 ,0 5 5 -1 ,3 7 7 -1 2 ,0 2 4 -104,971 -8 8 ,5 9 8 265,969 -3 54,567 -4 ,1 0 3 -2 ,7 0 6 19,015 -21,721 -1 ,3 9 7 -1 2 ,2 7 0 -1 1 3 ,7 7 3 -9 6 ,5 0 3 274,657 -3 7 1 ,1 6 0 -4 ,5 1 8 -3 ,1 7 2 21,558 -2 4 ,7 3 0 -1 ,3 4 6 -1 2 ,7 5 2 11 Change in U.S. government assets other than official reserve assets, net (increase, —) ..................................................... 68 -4 2 2 2,751 -6 8 6 3,711 -1 3 1 -5 7 4 110 12 Change in U.S. official reserve assets (increase, - ) ............................. 13 Gold .......................................................................................................... 14 Special drawing rights (SDRs) ............................................................ 15 Reserve position in International Monetary Fund ........................... 16 Foreign currencies .................................................................................. -1 ,0 1 0 0 -3 5 0 -3 ,5 7 5 2,915 -6 ,7 8 3 0 -1 4 7 -5 ,1 1 9 -1 ,5 1 7 8,747 0 10 5,484 3,253 1,951 0 -1 8 4 2,268 -1 3 3 1,569 0 -1 7 8 1,800 -5 3 -5 5 4 0 -1 8 0 -2 3 7 -1 3 7 2,020 0 -1 8 0 2,328 -1 2 8 -3 4 6 0 -1 8 2 1,300 -1 ,4 6 4 17 Change in U.S. private assets abroad (increase, - ) ............................. 18 Bank-reported claims2 ............................................................................ 19 Nonbank-reported c la im s ....................................................................... 20 U.S. purchases of foreign securities, n e t ............................................ 21 U.S. direct investments abroad, n e t ..................................................... -4 87,998 -1 4 1 ,1 1 8 -1 2 2 ,8 8 8 -1 1 8 ,9 7 6 -1 0 5 ,0 1 6 -328,231 -3 5 ,5 7 2 -1 0 ,6 1 2 -135,995 -146,052 -4 41,685 -6 9 ,8 6 2 -9 2 ,3 2 8 -1 28,594 -150,901 -1 24,174 -1 1 ,2 5 9 -2 7 ,9 4 3 -4 1 ,4 2 0 -4 3 ,5 5 2 -1 2 0 ,1 6 2 -4 5 ,3 0 4 -2 4 ,4 2 8 -1 7 ,1 5 0 -3 3 ,2 8 0 -1 7 8 ,2 7 3 -55,511 -5 2 ,5 6 3 -2 7 ,2 3 6 -4 2 ,9 6 3 -9 3 ,8 7 0 18,320 -3 6 ,5 0 7 -3 8 ,1 9 6 -3 7 ,4 8 7 -7 6 ,9 6 8 -1 1 ,3 8 3 931 -3 0 ,4 2 8 -3 6 ,0 8 8 22 Change in foreign official assets in United States (increase, + ) .................. 23 US. Treasury securities ......................................................................... 24 Other U.S. government obligations ..................................................... 25 Other U.S. government lia b ilitie s '........................................................ 26 Other U.S. liabilities reported by U.S. banks2 ................................... 27 Other foreign official assets3 ................................................................ 18,876 -6 ,6 9 0 4.529 -1 ,041 22,286 -2 0 8 -2 0 ,1 2 7 -9,921 6,332 -3 ,5 5 0 -9,501 -3 ,4 8 7 42,864 12,177 20,350 -3 ,2 5 5 12,692 900 12,191 12,963 1,835 -7 6 0 -2 ,0 3 2 185 27,495 5,122 6,730 89 14,427 1,127 22,015 16,198 8,107 -6 4 4 -2 ,5 7 7 931 6,346 -4 ,0 0 0 10,334 -7 8 1 -1 1 1 904 11,625 -9,001 14,272 -6 2 0 6,339 635 28 Change in foreign private assets in United States (increase, + ) .................. 29 U.S. bank-reported liabilities4 .............................................................. 30 U.S. nonbank-reported liabilities .......................................................... 31 Foreign private purchases o f U.S. Treasury securities, net ........... 32 U.S. currency flow s.................................................................................. 33 Foreign purchases of other U.S. securities, n e t ................................. 34 Foreign direct investments in United States, net ............................. 738,086 149,026 113,921 146,433 24,782 197,892 106,032 502,362 39,769 -7,001 48,581 16,622 218,075 186,316 710,700 67,403 34,298 -2 0 ,4 6 4 22,407 331,523 275,533 182,019 24,585 -8 ,0 8 5 9,639 4,697 95,620 55,563 157,072 19,618 792 -17,191 12,213 92,250 49,390 214,520 -8 ,8 2 4 58,061 -9 ,2 4 8 -6 ,8 4 7 132,416 48,962 238,803 46,943 24,038 -2 0 ,5 9 7 989 87,107 100,323 188,544 13,981 2,633 -1 2 ,6 4 2 757 118,882 64,933 35 Capital account transactions, net5 ............................................................ 36 Discrepancy .................................................................................................. 37 Due to seasonal ad ju stm e n t................................................................... 38 Before seasonal adjustment ................................................................... 350 -1 27,832 637 69.702 -3 ,5 0 0 11,602 -1 2 7 ,8 3 2 69,702 11,602 171 18,177 -9 ,7 3 9 27,916 -3 ,9 9 3 30,531 5,738 24,793 166 43,762 5,724 38,038 170 -4 7 ,9 2 4 -2 ,5 1 5 -4 5 ,4 0 9 165 -9 ,3 5 7 -9 ,6 9 1 334 M emo Changes in official assets 39 U.S. official reserve assets (increase, —) ................................................. 40 Foreign official assets in United States, excluding line 25 (increase, + ) ......................................................................................... 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) ........................................ -1 ,0 1 0 -6 ,7 8 3 8,747 1,951 1,569 -5 5 4 2,020 -3 4 6 19,917 -1 6 ,5 7 7 46,119 12,951 27,406 22,659 7,127 12,245 12,124 -11,531 1,331 -7 8 3 -1 ,6 7 3 6,109 1,913 3,450 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38-41. 2. Associated primarily with military sales contracts and other transactions arranged with or through foreign official agencies. 3. Consists of investments in U.S. corporate stocks and in debt securities of private corporations and state and local governments. 4. Reporting banks included all types of depository institutions as well as some brokers and dealers. 5. Consists of capital transfers (such as those of accompanying migrants entering or leaving the country and debt forgiveness) and the acquisition and disposal of nonproduced nonfinancial assets. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey o f Current Business. Summary Statistics A51 3.11 U.S. FOREIGN TRADE1 M illio n s o f d o lla rs; m o n th ly d a ta s e a so n a lly a d ju s te d 2000 Item 1997 1998 1999 May June July Aug. Sept. Oct. Nov.p I Goods and services, balance ........................... 2 Merchandise ................................................... 3 S e rv ic e s............................................................ -105,932 -196,665 90,733 -1 6 6 ,8 9 8 -2 46,854 79,956 -264,971 -3 45,559 80,588 -2 9 ,6 0 4 -3 6,475 6,871 -2 9 ,8 2 6 -3 6 ,8 6 2 7,036 -3 1 ,8 2 4 -3 8 ,5 2 4 6,700 -3 0 ,0 5 9 -3 6 ,6 8 4 6,625 -33,741 -3 9 ,3 2 9 5,588 -3 3 ,5 5 2 -3 9 ,8 8 7 6,335 -3 2 ,9 9 4 -39,001 6,007 4 Goods and services, exports ........................... 5 Merchandise ................................................... 6 S ervices............................................................ 936,937 679,702 257,235 932,977 670,324 262,653 956,242 684,358 271,884 87,074 62,749 24,325 91,288 66,468 24,820 89,655 65,096 24,559 92,868 67,973 24,895 92,654 67,836 24,818 91,128 66,346 24,782 90,355 65,670 24,685 7 Goods and services, imports ........................... 8 Merchandise ................................................... 9 S ervices............................................................ 1,042,869 876,367 166,502 1,099,875 917,178 182,697 1,221,213 1,029,917 191,296 -1 16,678 -9 9 ,2 2 4 -1 7 ,4 5 4 -1 21,114 -1 0 3 ,3 3 0 -1 7 ,7 8 4 -1 2 1 ,4 7 9 -1 0 3 ,6 2 0 -1 7 ,8 5 9 -1 22,927 -1 04,657 -1 8 ,2 7 0 -1 26,395 -1 07,165 -1 9 ,2 3 0 -1 2 4 ,6 8 0 -1 06,233 -1 8 ,4 4 7 -1 2 3 ,3 4 9 -104,671 -1 8 ,6 7 8 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 M illio n s o f d o lla rs, e n d o f p e rio d 2000 Asset 1997 1998 2001 1999 June July Aug. Sept. Oct. Nov. Dec. Jan.p 1 Total ....................................................................... 69,954 81,761c 71,516 67,955c 66,516 65,333 66,256 65,257 65,523 67,647 67,542 2 Gold stock1 3 Special drawing rights2'3 ...................................... 4 Reserve position in International Monetary Fund2 ............................................................ 5 Foreign currencies4 ............................................ 1 l,047c 10,027 11,046c 10,603 11,048c 10,336 11,046c 10,444 11,046 10,257 11,046 10,371 11,046 10,316 11,046 10,169 11,046 10,369 11,046 10,539 11,046 10,497 18,071 30,809 24,111 36,001 17,950 32,182 15,428 31,037 15,083 30,130 13,798 30,118 13,685 31,209 13,528 30,514 13,491 30,617 14,824 31,238 15,079 30,920 1. Gold held “ under earmark” at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce. 2. Special drawing rights (SDRs) are valued according to a technique adopted by the International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of exchange rates for the currencies of member countries. From July 1974 through December 1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S. 3.13 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— $710m illion; 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 BAN K S1 M illio n s o f d o lla rs, e n d o f p e rio d 2000 Asset 1997 1998 2001 1999 June 1 Deposits ................................................................ 457 167 71 Held in custody 2 U.S. Treasury securities2 ................................... 3 Earmarked gold3 ........................ .. v ... 620,885 10,763 607,574 __ 10,343 632,482 9,933 104 627,081 9,688 . July Aug. Sept. Oct. Nov. Dec. Jan.p 76 78 139 115 104 215 199 624,177 9,688 628,001 9,674 611,641 9,620 595,591 9,565 591,071 9,505 594,094 9,451 594,694 9,397 1. Excludes deposits and U.S. Treasury securities held for international and regional 3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not organizations. included in the gold stock of the United States. 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury securities, in each case measured at face (not market) value. A52 3.15 International Statistics □ March 2001 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS M illio n s o f d o lla rs, e n d o f p e rio d 2000 Item 1 Total1 ................................................................................................................. 2 3 4 5 6 1 8 9 10 11 12 By type Liabilities reported by banks in the United States ................................. U.S. Treasury bills and certificates3 ............................................................ U.S. Treasury bonds and notes Marketable .................................................................................................... Nonmarketable4 ........................................................................................... U.S. securities other than U.S. Treasury securities5 ................................. By area Europe1 ............................................................................................................ Canada ............................................................................................................... Latin America and C a rib b e a n ....................................................................... Asia ................................................................................................................... A f r ic a ................................................................................................................. Other countries ............................................................................................... 1999 1998 Juner July Aug. Sept. Oct. Nov.p 759,928 806,318r 826,264 836,018 846,739 849,469 848,840 849,860 848,454 125,883 134,177 138,847r 156,177 135,770 148,814 136,072 157,190 139,627 160,093 136,989 159,781 143,010 155,498 145,902 155,101 146,734 155,069 432,127 6,074 61,667 422,266 6,111 82,917 435,235 5,808 100,637 433,823 5,740 103,193 433,184 5,180 108,655 433,633 5,213 113,853 427,007 5,247 118,078 419,857 5,280 123,720 414,890 5,313 126,448 256,026 10,552 79,503 400,631 10,059 3,157 244,805 12,503 73,518 463,703r 7,523 4,266 250,306 13,027 69,571 482,030 7,710 3,620 253,416 13,542 71,245 485,343 7,850 4,622 257,712 13,728 73,344 487,417 8,656 5,882 255,635 12,992 76,347 490,110 8,707 5,678 257,498 13,121 77,542 486,890 8,466 5,323 263,601 12,932 77,500 481,344 8,323 6,160 261,524 12,044 78,716 480,800 8,012 7,358 1. Includes the Bank for International Settlements. 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements. 3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official institutions of foreign countries. 4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue; 3.16 Mayr LIABILITIES TO, A ND CLAIMS ON, FOREIGNERS Payable in Foreign Currencies Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April 1993, 30-year maturity issue. 5. Debt securities of U.S. government corporations and federally sponsored agencies, and U.S. corporate stocks and bonds. SOURCE. Based on U.S. Department of the Treasury data and on data reported to the department by banks (including Federal Reserve Banks) and securities dealers in the United States, and on the 1994 benchmark survey of foreign portfolio investment in the United States. Reported by Banks in the United States1 M illio n s o f d o lla rs, e n d o f p e rio d 1999 Item 1 Banks’ liabilities ........................................................................................... 2 Banks’ claims ............................................................................................... 3 Deposits ...................................................................................................... 4 Other c la im s............................................................................................... 5 Claims of banks’ domestic c u s to m e rs '..................................................... 1996 103,383 66,018 22,467 43,551 10,978 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 1997 117,524 83,038 28,661 54,377 8,191 2000 1998 101,125 78,162 45,985 32,177 20,718 Dec. Mar. June Sept. 88,537 67,365 34,426 32,939 20,826 85,649 63,492 32,967 30,525 21,753 85,842 67,862 31,224 36,638 18,802 78,872 60,355 25,847 34,508 19,123 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. Bank-Reported Data 3.17 LIABILITIES TO FOREIGNERS Payable in U.S. dollars A53 Reported by Banks in the United States1 M illio n s o f d o lla rs, e n d o f p e rio d 2000 Item 1997 1998 1999 Mayr July June Aug. Sept. Oct. Nov.p B y H o l d e r a n d Type o f L ia b ility 1 Total, all foreigners ................................................................ 1,283,027 1,347,837 l,408,740r 1,452,912 l,451,491r l,480,318r l,444,482r l,453,627r 1,510,056 1,522,535 2 Banks’ own liabilities .............................................................. 3 Demand deposits .................................................................. 4 Time deposits2 ....................................................................... 5 Other3 ...................................................................................... 6 Own foreign offices4 ............................................................ 882,980 31,344 198,546 168,011 485,079 884,939 29,558 151,761 140,752 562,868 971,536r 42,884 163,620r 155,853r 609,179r 1,032,104 29,097 177,128 171,892 653,987 l,012,619r 30,719 182,963r 168,148r 630,789r 1,073,433 29,500 185,459 194,628 663,846 1,070,942 31,701 192,442 187,079 659,720 7 Banks’ custodial liabilities5 ..................................................... 8 U.S. Treasury bills and certificates6 ................................. 9 Other negotiable and readily transferable instruments7 .................................................................. 10 Other ...................................................................................... 400,047 193,239 462,898 183,494 437,204r 185,676r 420,808 174,166 93,641 113,167 141,699 137,705 132,617r 118,911 11 Nonmonetary international and regional organizations8 . . 12 Banks’ own liabilities ......................................................... 13 Demand deposits .............................................................. 14 Time deposits2 .................................................................. Other3 .................................................................................. 15 11,690 11,486 16 5,466 6,004 11,883 10,850 172 5,793 4,885 Banks’ custodial liabilities5 ................................................. U.S. Treasury bills and certificates6 ............................ Other negotiable and readily transferable instruments7 .............................................................. Other .................................................................................. 204 69 1,050,467r 34,914 186,483 172,466r 656,604r l,013,420r 30,101 184,820 173,97 l r 624,528r 1,027,122r 31,964 184,822 174,458 635,878r 438,872r 180,822r 429,851 182,699 431,062 180,925 426,505 174,604 436,623 173,984 451,593 173,846 123,580 123,062 124,670 133,380 120,624 126,528 119,212 130,925 120,296 131,605 129,724 132,915 132,453 145,294 15,276 14,357 98 10,349 3,910 22,807 22,109 36 11,393 10,680 21,366 20,924 34 12,545 8,345 16,689 16,294 30 10,305 5,959 14,630 14,377 26 9,062 5,289 15,658 15,404 19 7,627 7,758 17,104 16,751 48 5,925 10,778 17,074 16,676 30 6,549 10,097 1,033 636 919 680 698 582 442 432 395 371 253 217 254 223 353 215 398 249 133 2 397 0 233 6 113 3 10 0 21 3 26 10 26 5 138 0 147 2 20 Official institutions9 .................................................................. 21 Banks’ own liabilities ......................................................... Demand deposits .............................................................. 22 Time deposits2 .................................................................. 23 24 Other3 .................................................................................. 283,685 102,028 2,314 41,396 58,318 260,060 80,256 3,003 29,506 47,747 295,024r 97,615 3,341 28,942 65,332 284,584 87,899 2,781 31,846 53,272 293,262r 88,392r 2,887 33,696r 51,809r 299,720 92,739 4,063 34,641 54,035 296,770 90,985 4,573 32,009 54,403 298,508 95,049 5,213 36,679 53,157 301,003 102,104 4,361 34,015 63,728 301,803 101,213 4,702 35,013 61,498 Banks’ custodial liabilities5 ................................................ U.S. Treasury bills and certificates6 ............................. Other negotiable and readily transferable instruments7 .............................................................. Other .................................................................................. 181,657 148,301 179,804 134,177 197,409r 156,177 196,685 148,814 204,870 157,190 206,981 160,093 205,785 159,781 203,459 155,498 198,899 155,101 200,590 155,069 33,151 205 44,953 674 41,182r 50 47,734 137 47,611 69 46,363 525 45,644 360 47,660 301 43,753 45 44,828 693 29 Banks10........................................................................................ Banks’ own liabilities ......................................................... 30 Unaffiliated foreign b a n k s .............................................. 31 Demand deposits ......................................................... 32 Time deposits2 .............................................................. 33 34 Other3 ............................................................................. Own foreign offices4 ....................................................... 35 815,247 641,447 156,368 16,767 83,433 56,168 485,079 885,336 676,057 113,189 14,071 45,904 53,214 562,868 900,379r 728,492r 119,313r 17,583 48,140 53,590r 609,179r 937,794 777,854 123,867 13,254 55,167 55,446 653,987 926,262r 755,644r 124,855r 14,543 58,095 52,217r 630,789r 955,206r 792,072r 135,468r 17,508 60,703 57,257r 656,604r 921,181r 754,093r 129,565r 11,959 62,841 54,765r 624,528r 927,099r 762,392r 126,514 12,918 59,958 53,638 635,878r 963,082 796,805 132,959 12,160 64,321 56,478 663,846 971,842 792,913 133,193 12,834 68,845 51,514 659,720 36 37 38 Banks’ custodial liabilities5 ................................................. U.S. Treasury bills and certificates6 ............................. Other negotiable and readily transferable instruments7 .............................................................. Other .................................................................................. 173,800 31,915 209,279 35,359 171,887' 16,796r 159,940 13,994 170,618r 13,08 l r 163,134 12,657 167,088 12,251 164,707 10,667 166,277 9,972 178,929 10,285 35,393 106,492 45,332 128,588 45,695 109,396 33,667 112,279 34,657 122,880 34,018 116,459 33,893 120,944 32,679 121,361 34,232 122,073 34,957 133,687 40 Other fo re ig n ers......................................................................... 41 Banks’ own liabilities .......................................................... 42 Demand deposits .............................................................. Time deposits2 .................................................................. 43 44 Other3 .................................................................................. 172,405 128,019 12,247 68,251 47,521 190,558 117,776 12,312 70,558 34,906 198,06 l r 131,072r 21,862 76,189r 33,021 207,727 144,242 13,026 78,722 52,494 210,601r 147,659r 13,255 78,627 55,777r 208,743 149,362 13,313 80,834 55,215 211,901 153,965 13,543 80,908 59,514 212,362 154,277 13,814 80,558 59,905 228,867 157,773 12,931 81,198 63,644 231,816 160,140 14,135 82,035 63,970 44,386 12,954 72,782 13,322 66,989r 12,023r 63,485 10,776 62,942r 10,119r 59,381 9,579 57,936 8,676 58,085 8,216 71,094 8,696 71,676 8,243 24,964 6,468 51,017 8,443 45,507r 9,459 42,066 10,643 42,392 10,431 40,261 9,541 39,649 9,611 39,931 9,938 51,601 10.797 52,521 10,912 16,083 27,026 30,345 27,238 26,571 26,186 25,911 25,991 27,164 25,854 16 17 18 19 25 26 27 28 39 45 46 47 48 Banks’ custodial liabilities5 ................................................. U.S. Treasury bills and certificates6 ............................. Other negotiable and readily transferable instruments7 .............................................................. Other .................................................................................. M emo 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. Excludes bonds and notes of maturities longer than one year. 2. Excludes negotiable time certificates of deposit, which are included in “ Other negotia ble and readily transferable instruments.” 3. Includes borrowing under repurchase agreements. 4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiar ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists principally of amounts owed to the head office or parent foreign bank, and to foreign branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks for foreign customers. 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official institutions of foreign countries. 7. Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit. 8. Principally the International Bank for Reconstruction and Development, the InterAmerican Development Bank, and the Asian Development Bank. Excludes “ holdings of dollars” of the International Monetary Fund. 9. Foreign central banks, foreign central governments, and the Bank for International Settlements. 10. Excludes central banks, which are included in “Official institutions.” A54 3.17 International Statistics □ March 2001 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1— Continued Payable in U.S. dollars M illio n s o f d o lla rs, e n d o f p e rio d 2000 Item 1997 1998 1999 Mayr Juner July Aug. Sept. Oct. Nov.p A rea 50 Total, all foreigners .............................................................. 1,283,027 1,347,837 l,408,740r 1,452,912 1,451,491 l,480,318r l,444,482r l,453,627r 1,510,056 1,522,535 51 Foreign c o u n tr ie s.................................................................. 1,271,337 1,335,954 l,393,464r 1,430,105 1,430,125 l,463,669r l,429,852r l,437,969r 1,492,952 1,505,461 52 Europe ...................................................................................... 53 Austria .................................................................................. 54 Belgium and L uxem bourg................................................. 55 D enm ark................................................................................ F in la n d .................................................................................. 56 57 France .................................................................................... 58 G erm any................................................................................ 59 Greece .................................................................................. 60 Italy ...................................................................................... 61 Netherlands ......................................................................... 62 N o rw ay .................................................................................. 63 Portugal ................................................................................ 64 R u s s ia .................................................................................... Spain .................................................................................... 65 66 S w e d e n .................................................................................. 67 Switzerland ......................................................................... 68 Turkey .................................................................................. 69 United Kingdom .............................................................. 70 Yugoslavia11 ......................................................................... 71 Other Europe and other former U.S.S.R.1 2 .................... 419,672 2,717 41,007 1,514 2,246 46,607 23,737 1,552 11,378 7,385 317 2,262 7,968 18,989 1,628 39,023 4,054 181,904 239 25,145 427,375 3,178 42,818 1,437 1,862 44,616 21,357 2,066 7,103 10,793 710 3,236 2,439 15,781 3,027 50,654 4,286 181,554 233 30,225 441,810r 2,789 44,692 2,196 1,658 49,790 24,753r 3,748 6,775 8 ,143r 1,327 2,228 5,475 10,426 4,652 63,485r 7,842 172,687r 286 28,858r 429,247 2,486 31,615 3,632 1,533 43,567 24,874 3,030 7,197 6,798 924 1,956 11,711 10,726 4,390 61,400 7,504 172,747 275 32,882 442,979 2,709 31,219 3,444 1,395 42,095 28,938 2,772 6,739 8,783 2,150 2,376 11,879 9,935 5,430 57,361 8,472 184,205 276 32,801 479,945 2,037 29,438 3,001 1,418 41,065 28,658 3,420 5,594 14,450 4,101 2,261 17,230 9,270 6,247 97,099 8,492 170,376 270 35,518 466,041 2,671 29,471 3,531 1,874 42,868 27,084 3,333 5,521 13,283 5,159 2,379 19,992 6,900 7,362 86,085 4,600 169,435 279 34,214 476,570r 3,239 33,282 3,521 1,751 42,379 26,484 2,917 5,700 12,313 2,337 2,169 14,960 8,829 5,100 76,255r 8,341 194,017r 277 32,699 451,531r 2,783 31,281 3,689 1,618 42,723 25,893 3,455 5,566 13,087 1,636 2,144 14,252 8,791 5,992 77,578 7,999 170,705r 277 32,062 459,595 2,541 29,828 3,429 1,512 39,693 26,212 3,331 5,959 10,311 3,501 2,244 15,970 8,421r 6,209r 88,276 8,173 171,867 275 31,843 72 Canada ...................................................................................... 28,341 30,212 34,214r 36,274 37,375 37,231 33,722 33,869r 34,367 31,249 73 Latin America and C a rib b e a n .............................................. 74 Argentina .............................................................................. 75 B a h a m as................................................................................ 76 B e rm u d a ................................................................................ 77 Brazil .................................................................................... 78 British West Indies ............................................................ 79 C h ile ...................................................................................... 80 Colombia .............................................................................. 81 C u b a ...................................................................................... 82 Ecuador ................................................................................ 83 Guatemala ........................................................................... 84 J a m a ica .................................................................................. 85 Mexico .................................................................................. 86 Netherlands Antilles .......................................................... 87 P a n a m a .................................................................................. 88 Peru ...................................................................................... 89 Uruguay ................................................................................ 90 V enezuela.............................................................................. Other .................................................................................... 91 536,393 20,199 112,217 6,911 31,037 276,418 4,072 3,652 66 2,078 1,494 450 33,972 5,085 4,241 893 2,382 21,601 9,625 554,866 19,014 118,085 6,846 15,815 302,486 5,015 4,624 62 1,572 1,336 577 37,157 5,010 3,864 840 2,486 19,894 10,183 578,695r 18,633 135,81 l r 7,874r 12,865r 312,278r 7,008 5,669 75 1,956 1,626 520 30,717 4,047r 4,415 1,142 2,386 20,192r 11,481 665,833 16,493 176,030 8,717 9,946 359,575 6,097 4,237 77 2,281 1,687 720 33,921 6,592 3,769 1,103 2,534 20,526 11,528 641,860 16,559 184,295 8,025 10,908 323,407 6,194 4,361 85 2,276 1,658 687 33,943 7,925 3,824 1,133 2,689 22,258 11,633 643,748r 19,092 170,530r 7,074 11,950 339,700r 5,440 4,627 122 2,219 1,730 725 33,379 7,164 3,353 1,097 2,179 21,462 11,905 633,150r 17,552 176,104r 8,157 12,351 321,573r 5,296 4,735 91 2,082 1,659 915 33,291 6,373 3,561 1,065 2,541 23,909 11,895 637,599r 18,560 171,452r 8,100 11,537 331,097 5,346 4,658 88 2,074 1,671 830 33,878 5,159 3,661 1,091 2,567 23,997 11,833 658,199 18,746 180,951 8,730 10,204 340,926 5,105 4,945 93 2,084 1,667 680 36,054 4,614 3,788 1,153 2,512 24,283 11,664 684,882 17,886 179,570 7,908 11,631 369,208 5,327 4,560 87 2,061 1,676 722 33,856 5,321 3,977 1,193 2,944 25,958 10,997 92 Asia ........................................................................................... China 93 Mainland ......................................................................... 94 Taiwan ............................................................................. 95 Hong Kong ..................................................................... 96 I n d i a ...................................................................................... 97 Indonesia .............................................................................. 98 Israel ...................................................................................... Japan .................................................................................... 99 100 Korea (South) ..................................................................... 101 Philippines ........................................................................... 102 T h a ila n d ................................................................................ Middle Eastern oil-exporting countries13 ...................... 103 104 Other .................................................................................... 269,379 307,960 319,489r 281,985 289,816 285,018 291,017 286,551 299,145 301,681 18,252 11,840 17,722 4,567 3,554 6,281 143,401 13,060 3,250 6,501 14,959 25,992 13,441 12,708 20,900 5,250 8,282 7,749 168,563 12,524 3,324 7,359 15,609 32,251 12,325 13,603r 27,701r 7,367 6,567 7,488 159,075 12,988r 3,268r 6,050 21,314r 41,743 7,825 14,111 23,636 5,723 6,954 5,542 148,662 12,937 1,748 3,427 18,729 32,691 10,000 13,584 23,638 5,613 7,341 6,124 153,649 10,349 2,003 3,529 18,578 35,408 9,385 13,156 25,675 5,712 7,342 5,794 147,549 8,618 1,649 3,900 22,195 34,043 11,769 14,675 26,749 5,547 7,318 5,951 146,382 8,819 1,679 3,504 21,968 36,656 11,830 15,140 26,583 5,838 7,310 7,132 142,782 9,043 1,822 3,330 21,851 33,890 13,719 18,289 25,784 5,548 7,589 6,668 150,196 6,684 1,676 3,178 23,852 35,962 15,835 17,630 25,905 5,168 8,375 6,538 149,656 6,821 2,334 3,477 23,729 36,213 105 A f r ic a ........................................................................................ 106 Egypt .................................................................................... 107 M o ro c c o ................................................................................ South A fric a ......................................................................... 108 109 Z a i r e ...................................................................................... 110 Oil-exporting countries14 ................................................... 111 Other .................................................................................... 10,347 1,663 138 2,158 10 3,060 3,318 8,905 1,339 97 1,522 5 3,088 2.854 9,468 2,022 179 1,495 14 2,914 2,844 8,446 1,729 122 661 13 3,298 2,623 8,729 1,966 149 601 6 3,405 2,602 9,739 1,780 118 792 5 4,258 2,786 9,607 1,615 109 708 7 4,470 2,698 9,821 1,544 112 842 5 4,499 2,819 9,625 1,546 121 767 4 4,405 2,782 9,482 1,655 100 853 4 4,027 2,843 112 Other ........................................................................................ 113 A u stra lia ................................................................................ 114 Other .................................................................................... 7,205 6,304 901 6,636 5,495 1,141 9,788r 8,377 1,41 r 8,320 7,585 735 9,366 8,563 803 11,363 10,346 1,017 10,825 9,825 1,000 10,534 9,507 1,027 11,671 10,562 1,109 12,126 10,961 1,165 115 Nonmonetary international and regional organizations .. 116 International15 ..................................................................... 117 Latin American regional16................................................. Other regional1 7 .................................................................. 118 11,690 10,517 424 749 11,883 10,221 594 1,068 22,807 21,375 624 808 21,366 20,106 768 492 16,689 15,295 786 608 14,630 13,118 1,146 366 15,658 14,387 888 383 17,104 16,126 589 389 17,074 16,061 530 483 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. 15,276 12,876 1,150 1,250 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.” Bank-Reported Data 3.18 A55 BANKS’ OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars M illio n s o f d o lla rs, e n d o f p e rio d 2000 Area or country 1997 1998 1999 May Juner Julyr Aug.r Sept.r Oct. Nov.p 1 Total, all foreigners ................................................................ 708,225 734,995 793,139r 821,796r 827,178 829,845 796,497 840,425 857,015 855,902 2 Foreign c o u n tr ie s..................................................................... 705,762 731,378 788,576r 817,453r 822,455 825,959 792,720 835,560 851,792 852,217 3 Europe ......................................................................................... 4 Austria .................................................................................... Belgium and L uxem bourg................................................... 5 6 D enm ark.................................................................................. 7 F in la n d .................................................................................... 8 France ...................................................................................... 9 G erm an y .................................................................................. in Greece .................................................................................... 11 Italy ......................................................................................... 12 Netherlands ........................................................................... N o rw ay .................................................................................... 13 14 Portugal .................................................................................. 15 R u s s ia ...................................................................................... 16 Spain ...................................................................................... 17 S w e d e n .................................................................................... 18 Switzerland ........................................................................... 19 Turkey .................................................................................... 20 United Kingdom .................................................................. Yugoslavia2 ........................................................................... 21 22 Other Europe and other former U.S.S.R.3 ........................ 199,880 1,354 6,641 980 1,233 16,239 12,676 402 6,230 6,141 555 777 1,248 2,942 1,854 28,846 1,558 103,143 52 7,009 233,321 1,043 7,187 2,383 1,070 15,251 15,923 575 7,284 5,697 827 669 789 5,735 4,223 46,874 1,982 106,349 53 9,407 311,686r 2,643 10,193 1,669 2,020 29,142 29,205 806 8,496 11,810 1,000 1,571 713 3,796 3,264 79,158 2,617 115,97 r 50 7,562 355,446r 2,213r 5,955r 2,001 2,365r 35,214r 31,519r 830r 6,535r 14,377 l,829r 1,268 715 3,126 7,056r I05,574r 3,23 r 124,020r 49 7,569r 353,006 2,119 6,392 3,442 2,601 28,635 33,583 836 7,688 15,669 1,932 1,424 744 3,844 8,692 86,284 3,188 137,697 49 8,187 357,980 2,617 6,302 3,349 2,897 25,845 30,452 754 6,447 13,159 2,401 1,454 718 4,767 8,404 94,550 2,735 143,459 49 7,621 327,409 1,956 5,819 3,278 2,701 23,229 31,804 557 7,358 14,999 1,448 1,273 666 3,566 8,761 87,172 2,855 123,360 49 6,558 359,865 2,584 6,344 3,403 3,561 27,062 33,229 516 6,215 15,507 4,474 1,480 643 3,208 8,501 100,345 2,821 132,503 49 7,420 360,292 2,809 6,020 3,093 4,927 29,093 33,017 513 6,482 16,165 4,655 1,574 647 3,360 8,504 103,668 2,831 122,829 49 10,056 365,931 2,681 4,946 3,462 6,517 30,169 32,059 776 6,738 15,975 6,156 1,249 663 2,593 8,777 107,986 3,260 124,618 49 7,257 23 Canada ......................................................................................... 27,189 47,037 37,206 45,529r 42,606 40,420 37,934 37,610 38,639 39,283 74 Latin America and C a rib b e a n ................................................. 75 Argentina ................................................................................ 26 B a h a m as.................................................................................. B e rm u d a .................................................................................. 27 28 Brazil ...................................................................................... 29 British West Indies .............................................................. 30 C h ile ......................................................................................... Colombia ................................................................................ 31 32 C u b a ......................................................................................... 33 Ecuador .................................................................................. 34 Guatemala .............................................................................. 35 Ja m a ica .................................................................................... 36 Mexico .................................................................................... 37 Netherlands Antilles ............................................................ 38 P a n a m a .................................................................................... 39 Peru ......................................................................................... 40 Uruguay .................................................................................. 41 V enezuela................................................................................ Other ...................................................................................... 42 343,730 8,924 89,379 8,782 21,696 145,471 7,913 6,945 0 1,311 886 424 19,428 17,838 4,364 3,491 629 2,129 4,120 342,654 9,552 96,455 5,011 16,184 153,749 8,250 6,507 0 1,400 1,127 239 21,212 6,779 3,584 3,275 1,126 3,089 5,115 355,168r 10,894r 99,066r 8,007 16,987r 167,189 6,607 4,524 0 760 1,135 295 17,899 5,982 3,387 2,529 801 3,494 5,612r 326,68 l r 10,756r 74,297r 6,478 17,695r 165,92 l r 6,399 4,037r 0 640 1,245 300 16,771 6,579 2,984 2,515 708 3,645r 5,711 334,463 10,729 83,524 6,285 17,902 164,969 6,213 3,797 0 613 1,235 291 17,066 6,502 3,063 2,458 620 3,471 5,725 334,855 10,660 76,477 6,906 18,199 172,232 6,070 3,909 0 610 1,215 299 16,426 6,652 2,981 2,488 649 3,357 5,725 338,764 10,597 78,896 4,684 18,555 175,936 5,985 3,953 3 607 1,277 305 16,840 5,804 2,882 2,487 777 3,410 5,766 347,550 10,840 83,126 6,265 19,061 178,744 5,954 3,850 0 623 1,226 337 16,849 5,770 2,781 2,697 728 3,390 5,309 357,588 11,166 83,523 8,426 20,202 184,812 5,755 3,846 0 639 1,245 379 16,737 6,158 2,668 2,653 663 3,321 5,395 356,183 11,462 78,541 8,223 19,840 187,513 5,771 3,938 0 629 1,247 355 16,960 6,554 2,839 2,713 675 3,442 5,481 43 Asia ............................................................................................. China 44 Mainland ........................................................................... 45 Taiwan ................................................................................ Hong Kong ....................................................................... 46 47 India ......................................................................................... 48 Indonesia ................................................................................ 49 Israel ......................................................................................... 50 Japan ...................................................................................... 51 Korea (South) ....................................................................... 52 Philippines .............................................................................. 53 Thailand .................................................................................. 54 Middle Eastern oil-exporting countries4 .......................... 55 Other ....................................................................................... 125,092 98,607 7 5 ,143r 80,205r 82,398 83,127 79,022 81,655 87,465 82,801 1,579 922 13,991 2,200 2,651 768 59,549 18,162 1,689 2,259 10,790 10,532 1,261 1,041 9,080 1,440 1,942 1,166 46,713 8,289 1,465 1,807 16,130 8,273 2,1 10r 1,390 5,903r 1,738 1,776 1,875 28,641r 9,426r 1,410 1,515 14,267r 5,092r 2,611 l,728r 4,568r 1,941 1,819 2,857 31,689 14,01 r 1,884 1,137 11,666 4,294 1,688 1,335 4,261 1,905 1,856 1,610 33,256 15,855 1,868 1,255 12,128 5,381 1,822 922 5,777 2,013 1,940 1,982 31,209 18,915 1,802 1,051 10,367 5,327 1,601 790 5,403 2,037 1,880 2,281 32,494 16,924 1,483 1,059 10,006 3,064 1,519 2,475 6,014 2,006 1,982 1,116 35,234 14,457 1,495 1,071 9,961 4,325 1,912 3,691 6,540 1,787 2,009 1,551 35,773 18,589 1,473 1,046 9,650 3,444 1,644 2,483 6,454 1,736 1,961 1,387 36,487 16,176 1,749 1,221 8,487 3,016 56 Africa ........................................................................................... 57 Egypt ............................., ....................................................... 58 M o ro c c o .................................................................................. 59 South A fric a ........................................................................... 60 Z a i r e ......................................................................................... 61 Oil-exporting countries5 ..................................................... Other ...................................................................................... 62 3,530 247 511 805 0 1,212 755 3,122 257 372 643 0 936 914 2,268 258 352 622 24 276 736 2,097r 218 271 329r 0 508 771 2,482 230 259 760 0 430 803 2,505 217 272 411 0 751 854 2,215 186 247 358 0 616 808 2,597 176 254 372 0 913 882 2,232 201 252 322 0 656 801 1,918 184 235 341 0 342 816 63 Other ........................................................................................... 64 A u stra lia .................................................................................. 65 Other ...................................................................................... 6,341 5,300 1,041 6,637 6,173 464 7,105 6,824 281 7,495r 7,139 356r 7,500 7,240 260 7,072 6,891 181 7,376 7,036 340 6,283 6,036 247 5,576 5,238 338 6,101 5,923 178 66 Nonmonetary international and regional organizations6 .. . 2,463 3,617 4,563 4,343 4,723 3,886 3,777 4,865 5,223 3,685 1. Reporting banks include all types of depository institutions as well as some brokers and dealers. 2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 3. Includes the Bank for International Settlements. Since December 1992, has included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 5. Comprises Algeria, Gabon, Libya, and Nigeria. 6. Excludes the Bank for International Settlements, which is included in “ Other Europe.” A56 3.19 International Statistics □ March 2001 BAN K S’ OWN AND DOMESTIC CUSTOMERS’ CLAIMS ON FOREIGNERS Payable in U.S. Dollars Reported by Banks in the United States1 M illio n s o f d o lla rs, e n d o f p e rio d 2000 Type of claim 1997 1999 1998 May Juner Sept.r Julyr Aug.r 829,845 48,478 557,557 85,738 21,856 63,882 138,072 796,497 41,459 544,142 78,561 21,822 56,739 132,335 1 Total ..................................................................... 852,852 875,891 944,937 2 Banks’ claims ..................................................... 3 Foreign public borrowers ............................. 4 Own foreign offices2 ...................................... 5 Unaffiliated foreign b a n k s ............................. 6 D e p o sits........................................................ 7 Other ............................................................ 8 All other foreig n ers........................................ 708,225 20,581 431,685 109,230 30,995 78,235 146,729 734,995 23,542 484,535 106,206 27,230 78,976 120,712 793,139 35,090 529,682 97,186 34,538 62,648 131,181 9 Claims of banks’ domestic customers3 ......... 10 D e p o sits............................................................ 11 Negotiable and readily transferable instruments4 ............................................. 12 Outstanding collections and other claims ..................................................... 144,627 73,110 140,896 79,363 151,798 88,006 184,107 106,055 169,509 87,340 53,967 47,914 51,161 62,975 70,334 17,550 13,619 12,631 15,077 11,835 9,624 4,520 4,553 5,056 4,827 33,816 39,978 31,125 M emo 13 Customer liability on acceptances .................. 1,011,285 821,796r 43,197r 553,291r 88,139r 24,769 63,370r 137,169' 827,178 41,224 557,717 88,954 22,371 66,583 139,283 Oct. Nov.p 857,015 49,691 581,381 82,904 23,468 59,436 143,039 855,902 48,890 587,788 82,349 23,760 58,589 136,875 53,848 55,510 1,009,934 840,425 40,436 576,452 87,276 23,765 63,511 136,261 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the 45,468 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 subsidiar ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists 3.20 44,139 46,337 55,293 57,784 principally of amounts due from the head office or parent foreign bank, and from foreign branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. 3. Assets held by reporting banks in the accounts of their domestic customers. 4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial paper. 5. Includes demand and time deposits and negotiable and nonnegotiable certificates of deposit denominated in U.S. dollars issued by banks abroad. BANKS’ OWN CLAIMS ON UNAFFILIATED FOREIGNERS Payable in U.S. Dollars Reported by Banks in the United States1 M illio n s o f d o lla rs, e n d o f p e rio d 2000 1999 Maturity, by borrower and area2 1996 1997 1998 Dec. Mar. June Sept. 1 Total .................................................................................................... 258,106 276,550 250,418 267,082 262,173 273,139 263,500 By borrower Maturity of one year or less .......................................................... Foreign public b o rro w e rs............................................................ All other foreigners ..................................................................... Maturity of more than one year ................................................... Foreign public b o rro w e rs............................................................ All other foreigners ..................................................................... 211,859 15,411 196,448 46,247 6,790 39,457 205,781 12,081 193,700 70,769 8,499 62,270 186,526 13,671 172,855 63,892 9,839 54,053 187,894 22,811 165,083 79,188 12,013 67,175 181,050 23,436 157,614 81,123 12,852 68,271 185,927 24,850 161,077 87,212 15,905 71,307 174,809 23,647 151,162 88,691 16,236 72,455 55,690 8,339 103,254 38,078 1,316 5,182 58,294 9,917 97,207 33,964 2,211 4,188 68,679 10,968 81,766 18,007 1,835 5,271 80,842 7,859 69,498 21,802 1,122 6,771 79,638 8,408 62,923 23,002 957 6,122 75,561 7,344 66,140 29,091 1,520 6,271 69,486 8,225 65,918 23,874 1,594 5,712 6,965 2,645 24,943 9,392 1,361 941 13,240 2,525 42,049 10,235 1,236 1,484 14,923 3,140 33,442 10,018 1,232 1,137 22,951 3,192 39,051 11,257 1,065 1,672 23,951 3,127 39,714 11,612 965 1,754 25,404 3,323 42,427 12,549 924 2,585 27,550 3,261 41,166 13,131 895 2,688 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 By area Maturity of one year or less E u ro p e ............................................................................................. Canada ........................................................................................... Latin America and Caribbean ................................................... A s i a ................................................................................................. Africa ............................................................................................. All other3 ...................................................................................... Maturity of more than one year E u ro p e ............................................................................................. Canada ........................................................................................... Latin America and Caribbean ................................................... A s i a ................................................................................................. Africa ............................................................................................. All other3 ...................................................................................... 1. Reporting banks include all types of depository institutions as well as some brokers and dealers. 2. Maturity is time remaining until maturity, 3. Includes nonmonetary international and regional organizations. Bank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 B illio n s o f d o lla rs, e n d o f p e rio d 1999 1998 Area or country 1996 2000 1997 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. 1 Total ................................................................................................................. 645.8 721.8 1071.9 1051.6 981.9r 930.4r 930.4r 934.5r 949.4r 989.6r 952.4 2 G-10 countries and S w itzerland.................................................................. Belgium and Luxembourg ....................................................................... 3 4 France .......................................................................................................... Germany ...................................................................................................... 5 I ta l y ............................................................................................................... 6 N etherlands.................................................................................................. 7 Sweden ........................................................................................................ 8 S w itzerland.................................................................................................. 9 United K in g d o m ......................................................................................... 10 C anada.......................................................................................................... 11 Japan ............................................................................................................ 12 228.3 11.7 16.6 29.8 16.0 4.0 2.6 5.3 104.7 14.0 23.7 242.8 11.0 15.4 28.6 15.5 6.2 3.3 7.2 113.4 13.7 28.6 240.0 11.7 20.3 31.4 18.5 8.4 2.1 7.6 100.1 15.9 23.9 217.7 10.7 18.4 30.9 11.5 7.8 2.3 8.5 85.4 16.8 25.4 208.9r 15.6 21.6 34.7 17.8 10.7 4.0 7.8 56.2r 15.9 24.6 224.0r 16.2r 20.7r 32.1 16.4 13.3 2.6 8.3r 74.7r 17.1 22.6 208.2r 15.7 20.0r 37.4 15.0 11.7r 3.6 8.8 52.3r 17.9 25.7r 232.3r 14.3 29.0 38.7 18.1 12.3 3.0 10.3 68.2r 16.3 22. r 278.5r 14.2 27.1 37.3 20.0 17.1 3.9 10.1 107.8r 17.5 23.5 320.0r 13.8 32.6 31.5 20.8 16.1 3.5 13.8 144.3r 18.3r 25.4 286.9 13.0 29.1 37.8 18.8 17.6 4.3 10.9 118.7 18.7 18.1 13 Other industrialized c o u n trie s....................................................................... 14 A u stria .......................................................................................................... Denmark ...................................................................................................... 15 Finland.......................................................................................................... 16 G re e c e .......................................................................................................... 17 Norway ........................................................................................................ 18 19 Po rtu g a l........................................................................................................ S p a in ............................................................................................................. 20 21 T u rk e y .......................................................................................................... Other Western Europe .............................................................................. 22 South A f r ic a ............................................................................................... 23 Australia ...................................................................................................... 24 66.1 1.1 1.5 .8 6.7 8.0 .9 13.3 2.7 4.9 2.0 24.0 65.5 1.5 2.4 1.3 5.1 3.6 .9 12.6 4.5 8.3 2.2 23.1 78.5 2.1 3.0 1.6 5.8 3.2 1.1 19.5 5.2 10.4 5.4 21.4 69.0 1.4 2.2 1.4 5.9 3.2 1.4 13.7 4.8 10.4 4.4 20.3 80.1 2.8 3.4 1.5 6.5 3.1 1.4 15.7 5.2 10.2 4.8 25.4 79.7 2.8 2.9 .9 5.9 3.0 1.2 16.6 4.9 10.3r 4.7 26.6 71.7 3.0 2.1 .9 6.6 3.8 1.2 15.1 4.7 9.2 4.0 21.1 68.4 3.5 2.6 .9 6.0 3.3 1.0 12.1 4.8 6.8 3.8 23.5 62.8 2.6 1.5 .8 5.7 3.0 1.0 11.3 5.1 8.3 4.8 18.6 75.2r 2.8 1.2 1.2r 6.8 4.6 2.0 12.2 5.6 8.0r 4.5r 26.3 72.5 3.5 1.8 2.8 6.4 8.5 1.5 10.5 5.6 8.4 2.9 20.5 25 OPEC2 ............................................................................................................... Ecuador ........................................................................................................ 26 27 Venezuela .................................................................................................... Indonesia...................................................................................................... 28 29 Middle East countries................................................................................ African countries ...................................................................................... 30 19.8 1.1 2.4 5.2 10.7 .4 26.0 1.3 2.5 6.7 14.4 1.2 26.0 1.2 3.1 4.7 16.1 .8 27.1 1.3 3.2 4.7 17.0 1.0 26.2 1.2 3.5 4.5 16.7 .4 26.2r 1.1 3.2 5.0 16.5 ,5r 30.1 .9 3.0 4.4 21.4 .5 31.4 .8 2.8 4.2 23.l r .5 28.9 .7 3.0 3.9 21.1 .2 32.3 .7 2.9 4.1 24.0 .7 31.8 .6 2.9 4.4 22.7 1.2 31 Non-OPEC developing co u n tries................................................................ 130.3 139.2 140.4 143.4 146.4r 144.6r 149.4r 154.8r 158.3r 150.5 32 33 34 35 36 37 38 Latin America Argentina...................................................................................................... B ra z il............................................................................................................. Chile ............................................................................................................. C olom bia...................................................................................................... Mexico ........................................................................................................ P e r u ............................................................................................................... O t h e r ............................................................................................................. 14.3 20.7 7.0 4.1 16.2 1.6 3.3 18.4 28.6 8.7 3.4 17.4 2.0 4.1 22.9 24.0 8.5 3.4 18.7 2.2 4.6 23.1 24.7 8.3 3.2 18.9 2.2 5.4 24.4r 24.2 8.6 3.3 19.7 2.2 5.3 22.8 25.2r 8.2 3.1 18.5 2.1 5.5 22.8r 23.5r 7.7 2.7 19.4 1.8 5.5 23.2r 27.7r 7.4 2.5 18.7 1.7 5.9 22.4r 2 8 .r 8.2 2.5 18.3 1.9 6.5 21.6r 28.3r 8.1 2.4 20.5 2.1 6.7 21.4 28.5 7.4 2.4 17.5 2.1 6.3 39 40 41 42 43 44 45 46 47 Asia China M a in la n d .................................................................................................. T aiw an...................................................................................................... India ............................................................................................................. Israel ............................................................................................................. Korea ( S o u th )............................................................................................. Malaysia ...................................................................................................... Philippines .................................................................................................. Thailand ...................................................................................................... Other Asia .................................................................................................. 2.5 10.3 4.3 .5 21.5 6.0 5.8 5.7 4.1 3.2 9.5 4.9 .7 15.6 5.1 5.7 5.4 4.3 2.8 12.5 5.3 .9 13.1 5.0 4.7 5.3 3.1 3.0 13.3 5.5 1.1 13.7 5.6 5.1 4.7 2.9 5.0 11.8 5.5 1.1 13.7 5.9 5.4 4.5 3.0 5.3 12.6 6.7 2.0 15.3 6.0 5.7 4.2 2.8 3.3 12.3 7.0 1.0 16.0 6.1 5.8 4.0 2.9r 3.6 12.0 7.7 1.8 15.2r 6.1 6.2 4.1 2.9 4.6 12.6 7.9 3.3 17.4 6.5 5.3 4.3 2.6 3.8 12.6 8.2 1.5 21.2 6.8 5.3 4.0 2.5 3.4 12.8 5.8 1.1 21.0 6.4 4.7 3.9 2.3 48 49 50 51 Africa E g y p t............................................................................................................. Morocco ...................................................................................................... Zaire ............................................................................................................. Other Africa3 ............................................................................................... .7 .7 .1 .9 .9 .6 .0 .8 1.7 .5 .0 1.1 1.3 .5 .0 1.0 1.4 .5 .0 ,9r 1.4 .5 .0 1.0 1.3 .5 .0 1.0 1.4 .4 .0 1.0 1.4 .3 .0 .9 1.3 .3 .0 .9 1.1 .4 .0 2.1 52 Eastern E u r o p e ............................................................................................... Russia4 .......................................................................................................... 53 Other ............................................................................................................. 54 6.9 3.7 3.2 9.1 5.1 4.0 6.3 2.8 3.5 5.5 2.2 3.3 6.8r 2.0r 4.8 5.7r 2.1 3.7 5.4 2.0 3.4 5.2 1.6 3.6 6.3 1.7 4.7 9.4 1.5 7.9 9.1 1.4 7.6 55 Offshore banking centers .............................................................................. Bahamas ...................................................................................................... 56 Bermuda ...................................................................................................... 57 Cayman Islands and other British West In d ie s ................................... 58 Netherlands A n tille s.................................................................................. 59 Panama5 ...................................................................................................... 60 Lebanon ...................................................................................................... 61 Hong Kong, C h in a .................................................................................... 62 Singapore .................................................................................................... 63 Other6 .......................................................................................................... 64 65 Miscellaneous and unallocated7 .................................................................. 135.1 20.5 4.5 37.2 26.1 2.0 .1 27.9 16.7 .1 59.6 140.2 24.2 9.8 43.4 14.6 3.1 .1 32.2 12.7 .1 99.1 121.0 30.7 10.4 27.8 6.0 4.0 .2 30.6 11.1 .2 459.9 93.9 35.4 4.6 12.8 2.6 3.9 .1 23.3 11.1 .2 495.1 83.0r 22.0r 3.9 13.9 2.7 3.9 .1 22.8 13.5 .2 430.4 66.0r 10.4r 5.7 7.2 1.3 3.9 .1 22.0 15.2 .1 380.2 42.0 2.4 7.3 .0 2.5 3.4 .1 22.2 4.1 .1 376.1 52.4 .5 6.3 5.1 2.6 3.3 .1 20.7 13.6 .1 342. r 50.6 .6 6.3 5.9 1.9 2.5 .1 20.5 12.7 .1 351.1 1. The banking offices covered by these data include U.S. offices and foreign branches of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository institutions as well as some types of brokers and dealers. To eliminate duplication, the data are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign branch of the same banking institution. These data are on a gross claims basis and do not necessarily reflect the ultimate country risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. 148.6 79.1r 18.2r 8.2 6.3 9.1 3.9 .2 22.4 10.6 .2 391.2 59.9r 13.7r 8.0 1.3 1.7 3.9 .1 21.0 10.1 .1 387.9 2. Organization of Petroleum Exporting Countries, shown individually; other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally members of OPEC). 3. Excludes Liberia. Beginning March 1994 includes Namibia. 4. As of December 1992, excludes other republics of the former Soviet Union. 5. Includes Canal Zone. 6. Foreign branch claims only. 7. Includes New Zealand, Liberia, and international and regional organizations. A58 3.22 International Statistics □ March 2001 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States M illio n s o f d o lla rs, e n d o f p e rio d 1999 Type of liability, and area or country 1996 1997 2000 1998 June Sept. Dec. Mar. June Sept.p 1 Total ...................................................................................................... 61,782 57,382 46,570 49,337 52,979 53,044 53,489 70,534 76,944 2 Payable in d o lla rs ................................................................................ 3 Payable in foreign currencies ......................................................... 39,542 22,240 41,543 15.839 36,668 9,902 36,032 13,305 36,296 16,683 37,605 15,415 35,614 17,875 47,864 22,670 51,751 25,193 By type 4 Financial lia b ilitie s.............................................................................. 5 Payable in d o lla rs ........................................................................... 6 Payable in foreign currencies ..................................................... 33.049 11,913 21,136 26,877 12,630 14,247 19,255 10,371 8,884 25,058 13,205 11,853 27,422 12,231 15,191 27,980 13,883 14,097 29,180 12,858 16,322 44,068 22,803 21,265 49,895 26,159 23,736 7 Commercial liabilities ....................................................................... 8 Trade payables ................................................................................ 9 Advance receipts and other liabilities ........................................ 28,733 12,720 16,013 30,505 10,904 19,601 27,315 10,978 16,337 24,279 10,935 13,344 25,557 12,651 12,906 25,064 12,857 12,207 24,309 12,401 11,908 26,466 13,764 12,702 27,049 14,218 12,831 10 11 Payable in d o lla rs ............................................................................ Payable in foreign currencies ..................................................... 27,629 1,104 28,913 1,592 26,297 1,018 22,827 1,452 24,065 1,492 23,722 1,318 22,756 1,553 25,061 1,405 25,592 1,457 12 13 14 15 16 17 18 By area or country Financial liabilities E u ro p e ............................................................................................... Belgium and Luxembourg ....................................................... France ........................................................................................... Germany ...................................................................................... N etherlands.................................................................................. S w itzerland.................................................................................. United K ingdom ......................................................................... 23,179 632 1,091 1,834 556 699 17,161 18,027 186 1,425 1,958 494 561 11,667 12,589 79 1,097 2,063 1,406 155 5,980 19,578 70 1,287 1,959 2,104 143 13,097 21,695 50 1,675 1,712 2,066 133 15,096 23,241 31 1,659 1,974 1,996 147 16,521 24,050 4 1,849 1,880 1,970 97 16,579 30,332 163 1,702 1,671 2,035 137 21,463 36,175 169 1,299 2,132 2,040 178 28,601 19 Canada ............................................................................................. 1,401 2,374 693 320 344 284 313 714 249 20 21 22 23 24 25 26 Latin America and Caribbean ..................................................... Bahamas ...................................................................................... Bermuda ...................................................................................... Brazil ........................................................................................... British West In d ie s ..................................................................... Mexico ........................................................................................ Venezuela .................................................................................... 1,668 236 50 78 1,030 17 1 1,386 141 229 143 604 26 1 1,495 7 101 152 957 59 2 1,369 1 52 131 944 19 1 1,180 1 26 122 786 28 0 892 1 5 126 492 25 0 846 1 1 128 489 22 0 2,874 78 1,016 146 463 26 0 3,447 105 1,182 132 501 35 0 27 28 29 A s i a .................................................................................................... Japan ............................................................................................. Middle Eastern oil-exporting countries' ............................... 6,423 5,869 25 4,387 4,102 27 3,785 3,612 0 3,217 3,035 2 3,622 3,384 3 3,437 3,142 3 3,275 2,985 4 9,453 6,024 5 9,320 4,782 7 30 31 Africa ............................................................................................... Oil-exporting c o u n trie s '............................................................ 38 0 60 0 28 0 29 0 31 0 28 0 28 0 33 0 48 0 32 All other1 ......................................................................................... 340 643 665 545 550 98 668 662 656 33 34 35 36 37 38 39 Commercial liabilities E u ro p e ............................................................................................... Belgium and Luxembourg ....................................................... France ........................................................................................... Germany ...................................................................................... N etherlands.................................................................................. S w itzerland.................................................................................. United K ingdom ......................................................................... 9,767 479 680 1,002 766 624 4,303 10,228 666 764 1,274 439 375 4,086 10,030 278 920 1,392 429 499 3,697 8,718 189 656 1,143 432 497 2,959 9,265 128 620 1,201 535 593 3,175 9,262 140 672 1,131 507 626 3,071 8,646 78 539 914 648 536 2,661 9,293 178 711 948 562 565 2,982 9,470 155 727 1,023 424 647 3,034 40 Canada ............................................................................................. 1,090 1,175 1,390 1,670 1,753 1,775 2,024 2,053 1,897 41 42 43 44 45 46 47 Latin America and Caribbean ..................................................... Bahamas ...................................................................................... Bermuda ...................................................................................... Brazil ........................................................................................... British West I n d ie s ..................................................................... Mexico ........................................................................................ Venezuela .................................................................................... 2,574 63 297 196 14 665 328 2,176 16 203 220 12 565 261 1,618 14 198 152 10 347 202 1,674 19 180 112 5 490 149 1,957 24 178 120 39 704 182 2,310 22 152 145 48 887 305 2,286 9 287 115 23 805 193 2,607 10 300 119 22 1,073 239 2,523 15 377 166 19 1,080 124 48 49 50 A s i a .................................................................................................... Japan ............................................................................................. Middle Eastern oil-exporting countries1................................. 13.422 4,614 2,168 14,966 4,500 3,111 12,342 3,827 2,852 10,039 2,753 2,209 10,428 2,689 2,618 9.886 2,609 2,551 9,681 2,274 2,308 10,965 2,200 3,489 11,221 2,069 3,720 51 52 Africa ............................................................................................... Oil-exporting countries"............................................................ 1,040 532 874 408 794 393 832 392 959 584 950 499 943 536 950 575 1,285 693 53 Other3................................................................................................. 840 1,086 1,141 1,346 1,195 881 729 598 653 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 2. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Includes nonmonetary international and regional organizations. Nonbank-Reported Data A59 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS the United States Reported by Nonbanking Business Enterprises in M illio n s o f d o lla rs, e n d o f p e rio d 1999 Type of claim, and area or country 1 Total ...................................................................................................... 1996 65,897 1997 2000 1998 June Sept. Dec. Mar. June Sept.p 68,128 77,462 63,884 67,566 76,669 84,266 80,725 94,806 57,006 6,878 60,456 7,110 69,170 7,472 74,331 9,935 72,294 8,431 82,877 11,929 2 Payable in d o lla rs ................................................................................ 3 Payable in foreign currencies .......................................................... 59,156 6,741 62,173 5,955 72,171 5,291 By type 4 Financial claims .................................................................................. 5 Deposits ........................................................................................... 6 Payable in d o lla rs ....................................................................... 7 Payable in foreign currencies ................................................. 8 Other financial c la im s..................................................................... 9 Payable in d o lla rs ....................................................................... 10 Payable in foreign currencies................................................... 37,523 21,624 20,852 772 15,899 12,374 3,525 36,959 22,909 21,060 1,849 14,050 11,806 2,244 46,260 30,199 28,549 1,650 16,061 14,049 2,012 31,957 13,350 11,636 1,714 18,607 14,800 3,807 33,877 15,192 13,240 1,952 18,685 15,718 2,967 40,231 18,566 16,373 2,193 21,665 18,593 3,072 47,798 23,316 21,442 1,874 24,482 19,659 4,823 44,303 17,462 15,361 2,101 26,841 22,384 4,457 58,303 30,928 27,974 2,954 27,375 20,541 6,834 11 Commercial c la im s ............................................................................. 12 Trade receivables ........................................................................... 13 Advance payments and other c la im s .......................................... 28,374 25,751 2,623 31,169 27,536 3,633 31,202 27,202 4,000 31,927 27,791 4,136 33,689 29,397 4,292 36,438 32,629 3,809 36,468 31,443 5,025 36,422 31,277 5,145 36,503 31,533 4,970 14 15 Payable in d o lla rs ........................................................................... Payable in foreign currencies ..................................................... 25,930 2,444 29,307 1,862 29,573 1,629 30,570 1,357 31,498 2,191 34,204 2,207 33,230 3,238 34,549 1,873 34,362 2,141 16 17 18 19 20 21 22 By area or country Financial claims E u ro p e ............................................................................................... Belgium and Luxembourg ....................................................... France ........................................................................................... Germany ...................................................................................... N etherlands.................................................................................. S w itzerland.................................................................................. United K in g d o m ......................................................................... 11,085 185 694 276 493 474 7,922 14,999 406 1,015 427 677 434 10,337 12,294 661 864 304 875 414 7,766 13,978 457 1,368 367 997 504 8,631 13,878 574 1,212 549 1,067 559 8,157 13,023 529 967 504 1,229 643 7,561 16,789 540 1,835 669 1,981 612 9,044 18,254 317 1,292 576 1,984 624 11,668 23,706 304 1,477 696 2,486 626 16,191 23 Canada ............................................................................................. 3,442 3,313 2,503 2,828 3,172 2,553 3,175 5,799 7,517 24 25 26 27 28 29 30 Latin America and Caribbean ..................................................... Bahamas ...................................................................................... Bermuda ...................................................................................... Brazil ........................................................................................... British West I n d ie s ..................................................................... Mexico ......................................................................................... Venezuela .................................................................................... 20,032 1,553 140 1,468 15,536 457 31 15,543 2,308 108 1,313 10,462 537 36 27,714 403 39 835 24,388 1,245 55 11,486 467 39 1,102 7,393 1,702 71 12,749 755 524 1,265 7,263 1,791 47 18,206 1,593 11 1,476 12,099 1,798 48 21,945 1,299 11 1,646 15,814 1,979 65 14,874 655 34 1,666 7,751 2,048 78 21,691 1,358 22 1,568 15,722 2,280 101 31 32 33 A s i a .................................................................................................... Japan ............................................................................................. Middle Eastern oil-exporting countries1 ............................... 2,221 1,035 22 2,133 823 11 3,027 1,194 9 2,801 949 5 3,205 1,250 5 5,457 3,262 21 4,430 2,021 29 3,923 1,410 42 4,002 1,726 85 34 35 Africa ............................................................................................... Oil-exporting countries ............................................................ 174 14 319 15 159 16 228 5 251 12 286 15 232 15 320 39 284 3 36 All other3 ........................................................................................... 569 652 563 636 622 706 1,227 1,133 1,103 37 38 39 40 41 42 43 Commercial claims E u ro p e ............................................................................................... Belgium and Luxembourg ....................................................... France ........................................................................................... Germany ...................................................................................... N etherlands.................................................................................. S w itz erlan d .................................................................................. United K in g d o m ......................................................................... 10,443 226 1,644 1,337 562 642 2,946 12,120 328 1,796 1,614 597 554 3,660 13,246 238 2,171 1,822 467 483 4,769 12,961 286 2,094 1,660 389 385 4,615 14,367 289 2,375 1,944 617 714 4,789 16,389 316 2,236 1,960 1,429 610 5,827 16,118 271 2,520 2,034 1,337 611 5,354 15,928 425 2,692 1,906 1,242 563 4,929 16,481 393 2,924 2,143 1,310 682 5,198 44 Canada ............................................................................................. 2,165 2,660 2,617 2,855 2,638 2,757 3,088 3,250 2,945 45 46 47 48 49 50 51 Latin America and Caribbean ..................................................... Bahamas ...................................................................................... Bermuda ...................................................................................... Brazil ........................................................................................... British West I n d ie s ..................................................................... Mexico ......................................................................................... Venezuela .................................................................................... 5,276 35 275 1,303 190 1,128 357 5,750 27 244 1,162 109 1,392 576 6,296 24 536 1,024 104 1,545 401 6,278 21 583 887 127 1,478 384 5,879 29 549 763 157 1,613 365 5,959 20 390 905 181 1,678 439 5,899 15 404 849 95 1,529 435 5,792 48 381 894 51 1,565 466 5,798 75 387 982 55 1,615 379 52 53 54 A s i a .................................................................................................... Japan ............................................................................................. Middle Eastern oil-exporting countries1 ............................... 8,376 2,003 971 8,713 1,976 1,107 7,192 1,681 1,135 7,690 1,511 1,465 8,579 1,823 1,479 9,165 2,074 1,625 9,101 2,082 1,533 9,173 1,882 1,241 8,991 2,071 1,197 55 56 Africa ............................................................................................... Oil-exporting countries ............................................................ 746 166 680 119 711 165 738 202 682 221 631 171 716 82 766 160 895 392 57 Other3.................................................................................................. 1,368 1,246 1,140 1,405 1,544 1,537 1,546 1,513 1,393 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 2. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Includes nonmonetary international and regional organizations. A60 International Statistics □ March 2001 3.24 FOREIGN TRANSACTIONS IN SECURITIES M illio n s o f d o lla rs 2000 Transaction, and area or country 1998 2000 1999 Jan.— Nov. May June July Aug. Sept. Oct. Nov.p 297,677r 289,118r 339,995 323,659 284,909 275,855 9,054 U.S. corporate securities Stocks 1 Foreign purchases..................................................................... 2 Foreign s a le s ............................................................................. 1,574,192 1,524,203 2,340,659 2,233,137 3,318,607 3,155,501 3 Net purchases, o r sales (—) ................................................. 49,989 107,522 163,106 4 Foreign countries .................................................................. 50,369 107,578 163,102 E u ro p e ........................................................................................ France .................................................................................... Germany ................................................................................ N etherlands........................................................................... Sw itzerland........................................................................... United K in g d o m .................................................................. Canada ...................................................................................... Latin America and Caribbean .............................................. Middle East1 .............................................................................. Other Asia ................................................................................ Japan ...................................................................................... Africa ......................................................................................... Other co u n tries......................................................................... 68,124 5,672 9,195 8,249 5,001 23,952 -4 ,6 8 9 757 -1 ,4 4 9 -12,351 -1 ,171 639 -6 62 98,060 3,813 13,410 8,083 5,650 42,902 -3 3 5 5,187 -1 ,0 6 6 4,445 5,723 372 915 153,450 5,687 30,975 3,224 12,644 50,536 4,259 -1 5,053 8,912 11,043 455 460 31 18 N onm onetary international and regional organizations ................................................. -380 -5 6 7 905,782 727,044 854,692 602,100 1,087,507 781,161 5 6 7 8 9 10 11 12 13 14 15 16 17 268,499r 262,187r 300,356 282,563 271,145 255,999 286,819 262,775 6,312 17,793 15,146 24,044 8,559 16,336 6,292r 17,823 15,136 24,020 8,603 16,338 9,068 7,496 -5 8 8 3,355 -113 585 1,440 835r —2,634r 705 - 1 19r -1 ,0 4 5 -5 0 59r 14,853 -6 5 3 2,544 584 67 7,026 -4 6 1,898 4 870 439 54 190 12,922 1,292 371 554 1,702 6,033 -1 6 6 1,363 98 815 492 -1 2 4 228 15,678 575 2,670 594 1,114 7,098 1,038 4,907 908 1,789 568 2 -3 0 2 10,014 -5 6 5 643 792 780 5,163 —924r —3,406r 52 2,707r 2,467 -5 6 216 14,040 1,757 1,383 -1 3 5 488 6,283 194 -4 ,4 0 0 754 5,840 2,640 -2 7 -6 3 7,485 408 988 323 -5 9 8 3,210 1,477 -2 ,9 7 9 340 3,310 662 80 -6 4 5 21 -3 0 10 24 -4 2 -2 -1 4 89,760 68,212 107,281 75,117 87,580 67,010 107,808 69,514 106,384 76,225 102,945 71,602 113,843 77,596 B o nd s 2 19 Foreign purchases..................................................................... 20 Foreign s a le s ............................................................................. 21 Net purchases, o r sales (—) ................................................. 178,738 252,592 306346 21,548 32,164 20,570 38,294 30,159 31,343 36,247 22 Foreign countries .................................................................. 179,081 252,994 306,451 21,493r 32,215 20,482 38,215 30,161 31,356 36,381 23 24 25 26 27 28 29 30 31 32 33 34 35 E u ro p e ........................................................................................ F r a n c e .................................................................................... Germany ................................................................................ N etherlands........................................................................... S w itzerland........................................................................... United K ingdom .................................................................. Canada ...................................................................................... Latin America and Caribbean .............................................. Middle East1 ............................................................................. Other Asia ................................................................................ Japan ...................................................................................... Africa ........................................................................................ Other c o u n trie s......................................................................... 130,057 3,386 4,369 3,443 4,826 99,637 6,121 23,938 4,997 12,662 8,384 190 1,116 140,674 1,870 7,723 2,446 4,553 106,344 6,043 58,783 1,979 42,817 17,541 1,411 1,287 162,368 2,078 4,145 855 3,922 126,457 12,873 55,317 805 72,579 35,744 862 1,647 9,475 104 175 283 9 6,237 1,076 2,786 -4 7 7,999' 3,491 40 164 19,378 159 897 -1 6 9 324 16,218 1,092 4,390 99 7,059 3,945 72 125 7,789 85 154 -5 7 5 1,003 4,003 943 4,743 264 6,601 3,320 10 132 21,618 334 1,185 850 757 15,909 1,965 3,829 54 10,562 5,664 37 150 17,058 -8 1 9 44 -8 1 8 333 15,950 811 6,338 -7 0 2 6,777 3,573 49 -1 7 0 16,965 347 433 848 350 12,503 897 5,018 -5 4 8,215 3,690 58 257 15,845 272 537 183 483 12,082 1,179 6,600 437 11,673 7,269 25 622 36 N onm onetary international and regional organizations ................................................. -343 -4 0 2 -7 1 -5 1 88 110 -2 -1 3 -1 3 4 2,922 153,760 150,838 -3 ,4 4 0 98,523 101,963 5,894 142,158 136,264 8,451 94,973 86,522 58 Foreign securities 37 Stocks, net purchases, or sales ( - ) ...................................... 38 Foreign purchases................................................................ 39 Foreign s a le s ......................................................................... 40 Bonds, net purchases, or sales ( - ) ...................................... 41 Foreign purchases................................................................ 42 Foreign s a le s ......................................................................... 6,227 929,923 923,696 -1 7 ,3 5 0 1,328,281 1,345,631 15,640 1,177,303 1,161,663 -5 ,6 7 6 798,267 803,943 -7 ,6 8 6 1,671,921 1,679,607 -2 ,4 9 4 875,915 878,409 7,144r 145,942r 138,798r 4,244r 79,536r 75,292r -3 ,0 9 6 r 153,373r 156,469r 5,751r 82,953r 77,202r -1 5 ,5 0 1 r 136,108r 151,609r -6 ,4 8 8 r 68,425r 74,913r 602 143,618 143,016 -2 ,811 74,803 77,614 10,479 149,696 139,217 267 92,182 91,915 43 Net purchases, or sales (—), of stocks and bonds . . . . -1 1 ,1 2 3 9,964 44 Foreign countries .................................................................. -1 0 ,7 7 8 9,679 -1 0 ,1 8 0 ll,3 8 8 r 2,655r —21,989r —2,209 10,746 -5 1 8 14,345 -1 0 ,7 3 2 ll,3 2 3 r 2,808r —21,748r -2 ,0 5 5 10,570 -6 8 5 14,106 45 46 47 48 49 50 51 E u ro p e ........................................................................................ Canada ...................................................................................... Latin America and Caribbean .............................................. A s i a ............................................................................................. Japan ...................................................................................... Africa ........................................................................................ Other c o u n trie s......................................................................... 12,632 -1 ,9 0 1 -1 3 ,7 9 8 -3 ,9 9 2 -1 ,7 4 2 -1 ,2 2 5 -2 ,4 9 4 59,247 -9 9 9 -4 ,7 2 6 -42.961 -4 3 ,6 3 7 710 -1 ,5 9 2 -2 1 ,1 8 0 -2 ,6 1 9 -1 4,498 24,416 20,228 989 2,160 9,676r - l,661r -9 3 0 r 4,520r 5,699r -5 5 r -2 2 7 —1,88 l r 972r 2,038r l,628r 3,165r —37r 88r -2 4 ,0 0 4 r 253r —931 2,973r 4 ,1 16r 532 —57 Ir -6 ,1 9 0 916 -5 6 2 3,160 1,478 -5 0 671 6,530 -1 ,1 4 2 665 3,867 2,082 49 601 -4 ,0 1 6 1,810 1,040 -4 7 -1 ,2 5 5 13 515 7,568 503 -4 0 5 5,802 2,092 10 628 52 N onm onetary international and regional o rganizations................................................... -3 4 5 285 570 -154 180 167 239 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 76 -150 r —241 2. Includes state and local government securities and securities of U.S. government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Securities Holdings and Transactions A61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 M illio n s o f d o lla rs; n e t p u rc h a s e s , o r s a le s ( —) d u rin g p e rio d 2000 2000 Area or country 1998 1999 J a n .Nov. May June July Aug. Sept. Oct. Nov.p -1 3 ,7 7 3 1 Total estimated ............................................................................................. 49,039 -9 ,9 5 3 -4 3 ,6 9 7 -7 ,0 1 8 -1 7 ,9 3 2 -6 ,0 6 1 -1 1 4 -8 ,5 1 6 - 3 ,0 3 8 2 Foreign countries ........................................................................................... 46,570 -1 0 ,5 1 8 -4 3 ,1 3 0 -6 ,8 2 0 -1 7 ,5 9 7 -5 ,7 4 6 -1 1 7 -8 ,7 4 1 -3 ,2 2 3 -1 3 ,6 2 6 3 4 5 6 7 8 9 10 11 E u ro p e .......................................................................................................... Belgium and Luxembourg .................................................................. Germany .................................................................................................. N etherlands............................................................................................. Sweden .................................................................................................... S w itzerland............................................................................................. United K in g d o m .................................................................................... Other Europe and former U.S.S.R....................................................... Canada ........................................................................................................ 23,797 3,805 144 -5 ,5 3 3 1,486 5,240 14,384 4,271 615 -3 8 ,2 2 8 -8 1 2,285 2,122 1,699 -1 ,761 -2 0 ,2 3 2 -2 2 ,2 6 0 7,348 -4 3 ,9 2 0 169 -6 ,2 3 9 3,762 754 -1 0 ,3 9 0 -2 9 ,4 7 0 -2 ,5 0 6 1,517 -2 ,5 2 6 -7 4 3 74 -1 ,1 5 9 266 -3 3 7 178 -8 0 5 -6 8 1 -9 ,9 3 5 252 609 -389 -4 7 -1 ,9 2 8 -9 ,2 4 3 811 226 -6 ,3 5 1 -1 3 8 -2 ,1 9 9 -5 8 4 114 -1 ,3 9 8 - 4 ,3 7 2 2,226 -8 7 2 3,707 138 -3 6 91 56 -3 3 8 3,054 742 222 - 1 ,2 8 4 -1 2 7 -1 ,7 3 8 836 214 -9 5 9 -1 ,8 6 5 2,355 1,417 -3 ,7 0 8 320 1,424 183 -1 1 8 -5 7 -3 ,7 9 3 -1 ,6 6 7 160 -10,991 53 -2 ,1 8 5 264 -1 0 4 -3 0 1 -6 ,0 3 5 -2 ,6 8 3 -8 4 0 12 13 14 15 16 17 18 19 Latin America and Caribbean ................................................................ Venezuela ............................................................................................... Other Latin America and Caribbean ................................................. Netherlands A n tille s ............................................................................. A s i a ............................................................................................................... J a p a n ........................................................................................................ Africa .......................................................................................................... O th e r ............................................................................................................. - 3 ,6 6 2 59 9,523 -1 3 ,2 4 4 27,433 13,048 751 - 2 ,3 6 4 -7 ,5 2 3 362 1,661 -9 ,5 4 6 29,359 20,102 -3 ,0 2 1 1,547 -4 ,6 6 9 988 -9 ,8 3 5 4,178 2,092 14,435 -370 2,220 -3 ,1 2 2 4 -5 4 8 -2 ,5 7 8 -9 0 8 - 2 ,4 8 6 -1 1 4 531 -3 ,8 3 9 16 -4 ,7 4 8 893 -3 ,9 8 8 -2 ,6 6 0 -130 69 1,415 89 1,261 65 -4 8 8 672 4 546 245 45 61 139 -4 ,9 1 8 367 9 618 -4 ,9 7 9 314 -4 ,9 3 6 -3 5 7 -3 ,3 1 9 1,717 -1 3 9 -437 3,963 152 3,030 781 -4 ,6 8 8 1,608 -6 1,056 -5 0 7 251 -1 ,2 6 2 504 -1 ,2 8 9 4,445 -1 6 17 20 Nonmonetary international and regional organizations ........................ 21 International ............................................................................................... 22 Latin American regional ......................................................................... 2,469 1,502 199 565 190 666 -5 6 7 -4 9 8 70 -1 9 8 -1 5 8 -1 4 -335 -2 8 6 -9 -3 1 5 -3 3 3 -1 3 15 -1 0 225 391 1 185 39 28 -1 4 7 -1 4 6 -1 M emo 23 Foreign countries ........................................................................................... 24 Official in stitu tio n s.................................................................................... 25 Other foreign ............................................................................................. 46,570 4,123 42,447 -1 0 ,5 1 8 -9 ,8 6 1 -6 5 7 -4 3 ,1 3 0 -7 ,3 7 6 -3 5 ,7 5 4 - 6 ,8 2 0 -1 ,4 0 5 -5 ,4 1 5 -1 7 ,5 9 7 -1 ,4 1 2 -1 6 ,1 8 5 -5 ,7 4 6 -6 3 9 -5 ,1 0 7 -1 1 7 449 -5 66 -8 ,7 4 1 -6 ,6 2 6 -2 ,1 1 5 -3 ,2 2 3 -7 ,1 5 0 3,927 -1 3 ,6 2 6 -4 ,9 6 7 -8 ,6 5 9 Oil-exporting countries 26 M iddle E a st2 .................................................................................................. 27 Africa3 ............................................................................................................... -1 6 ,5 5 4 2 2,207 0 3,450 0 572 0 859 0 267 0 217 0 -1 ,0 3 0 0 -724 0 -8 8 8 0 1. Official and private transactions in marketable U.S. Treasury securities having an original maturity of more than one year. Data are based on monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign countries. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 3. Comprises Algeria, Gabon, Libya, and Nigeria. A62 3.28 International Statistics □ March 2001 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR1 Currency units per U.S. dollar except as noted 2000 Item 1998 1999 2001 2000 Aug. Sept. Oct. Nov. Dec. Jan. Exchange Rates COUNTRY/CURRENCY UNIT 1 2 3 4 5 6 7 8 9 10 11 12 Australia/dollar2 ................................................... A ustria/schilling................................................... Belgium /franc........................................................ B razil/real.............................................................. C anada/dollar........................................................ China, P.R./yuan ................................................. D enm ark/krone...................................................... European Monetary Union/euro3 ...................... Finland/m arkka...................................................... France/franc .......................................................... Germany/deutsche mark .................................... Greece/drachma ................................................... 62.91 12.379 36.31 1.1605 1.4836 8.3008 6.7030 n.a. 5.3473 5.8995 1.7597 295.70 64.54 n.a. n.a. 1.8207 1.4858 8.2783 6.9900 1.0653 n.a. n.a. n.a. 306.30 58.15 n.a. n.a. 1.8301 1.4855 8.2784 8.0953 0.9232 n.a. n.a. n.a. 365.92 58.08 n.a. n.a. 1.8091 1.4828 8.2796 8.2459 0.9045 n.a. n.a. n.a. 372.97 55.21 n.a. n.a. 1.8397 1.4864 8.2785 8.5849 0.8695 n.a. n.a. n.a. 389.67 52.80 n.a. n.a. 1.8813 1.5125 8.2785 8.7276 0.8525 n.a. n.a. n.a. 398.29 52.18 n.a. n.a. 1.9483 1.5426 8.2774 8.6992 0.8552 n.a. n.a. n.a. 397.94 54.66 n.a. n.a. 1.9632 1.5219 8.2771 8.3059 0.8983 n.a. n.a. n.a. 379.58 55.52 n.a. n.a. 1.9561 1.5032 8.2776 7.9629 0.9376 n.a. n.a. n.a. n.a. 13 14 15 16 17 18 19 20 Hong Kong/dollar ............................................... India/rupee ............................................................ Ireland/pound2 ..................................................... Italy/lira ................................................................. Japan/yen .............................................................. M alaysia/ringgit................................................... M exico/peso.......................................................... Netherlands/guilder ............................................. 22 N orw ay/krone........................................................ 23 Portugal/escudo ................................................... 7.7467 41.36 142,48 1,736.85 130.99 3.9254 9.152 1.9837 53.61 7.5521 180.25 7.7594 43.13 n.a. n.a. 113.73 3.8000 9.553 n.a. 52.94 7.8071 n.a. 7.7924 45.00 n.a. n.a. 107.80 3.8000 9.459 n.a. 45.68 8.8131 n.a. 7.7995 45.77 n.a. n.a. 108.08 3.8000 9.272 n.a. 44.52 8.9526 n.a. 7.7985 45.97 n.a. n.a. 106.84 3.8000 9.362 n.a. 41.71 9.2331 n.a. 7.7977 46.43 n.a. n.a. 108.44 3.8000 9.537 n.a. 40.01 9.3794 n.a. 7.7991 46.82 n.a. n.a. 109.01 3.8000 9.508 n.a. 39.90 9.3524 n.a. 7.7991 46.78 n.a. n.a. 112.21 3.8000 9.467 n.a. 42.97 9.0616 n.a. 7.7998 46.61 n.a. n.a. 116.67 3.8000 9.769 n.a. 44.42 8.7817 n.a. 24 25 26 27 28 29 30 31 32 33 34 1.6722 5.5417 1,400.40 149.41 65.006 7.9522 1.4506 33.547 41.262 165.73 548.39 1.6951 6.1191 1,189.84 n.a. 70.868 8.2740 1.5045 32.322 37.887 161.72 606.82 1.7250 6.9468 1,130.90 n.a. 76.964 9.1735 1.6904 31.260 40.210 151.56 680.52 1.7206 6.9570 1,114.47 n.a. 78.283 9.2771 1.7149 31.106 40.889 148.89 689.17 1.7406 7.1805 1,117.57 n.a. 78.731 9.6853 1.7586 31.198 41.992 143.36 690.39 1.7525 7.4902 1,131.10 n.a. 79.291 9.9930 1.7745 31.846 43.334 145.06 692.86 1.7478 7.6889 1,156.54 n.a. 80.381 10.0965 1.7779 32.433 43.791 142.58 695.77 1.7361 7.6439 1,216.94 n.a. 82.030 9.6604 1.6855 33.123 43.246 146.29 698.85 1.7380 7.7786 1,272.63 n.a. 85.833 9.4910 1.6305 32.721 43.149 147.75 700.02 Singapore/dollar................................................... South A frica/rand................................................. South K o re a /w o n ................................................. Spain/peseta .......................................................... Sri Lanka/rupee ................................................... Sw eden/krona........................................................ Sw itzerland/franc................................................. T aiw an/dollar........................................................ T h a iland/baht........................................................ United Kingdom/pound2 .................................... Venezuela/bolivar................................................. Indexes4 N o m in a l 35 Broad (January 1997= 100)5 ............................. 36 Major currencies (March 1973 = 100)6 ........... 37 Other important trading partners (January 1997= 100)7 ................................................... 116.48 95.79 116.87 94.07r 119.93 98.34 120.12r 99.07r 121.53r 100.65r 123.27r 102.24r 124.21 103.08r 123.28r 101.26r 123.15 100.24 126.03 129.94 130.26 129.52r 130.37r 131,99r 132.87r 133.61r 135.02 99.21 97.24 98.53 96.68 102.19 102.86 102.74 103.87r 103.83r 105.57r 105.23r 107.32r 105.73r 108.13r 104.86r 106.22r 104.78 105.47 108.10 107.22 107.67 107.64 108.01 109.06r 109.19r 109.61r 110.40 Real 38 Broad (March 1973= 100)5 ............................... 39 Major currencies (March 1973= 100)6 ........... 40 Other important trading partners (March 1973 100)’ ................................................... 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. U.S. cents per currency unit. 3. The euro is reported in place of the individual euro area currencies. By convention, the rate is reported in U.S. dollars per euro. The bilateral currency rates can be derived from the euro rate by using the fixed conversion rates (in currencies per euro) as shown below: Euro equals 13.7603 40.3399 5.94573 6.55957 1.95583 .787564 Austrian schillings Belgian francs Finnish markkas French francs German marks Irish pounds 1936.27 40.3399 2.20371 200.482 166.386 340.750 Italian lire Luxembourg francs Netherlands guilders Portuguese escudos Spanish pesetas Greek drachmas 4. Starting with the February 2001 Bulletin, revised index values resulting from the annual revision of data that underlie the calculated trade weights are reported. For more information on the indexes of foreign exchange value of the dollar, see Federal Reserve Bulletin, vol. 84 (October 1998), pp. 811-818. 5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies of a broad group of U.S. trading partners. The weight for each currency is computed as an average of U.S. bilateral import shares from and export shares to the issuing country and of a measure of the importance to U.S. exporters of that country’s trade in third country markets. 6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of broad index currencies that circulate widely outside the country of issue. The weight for each currency is its broad index weight scaled so that the weights of the subset of currencies in the index sum to one. 7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of broad index currencies that do not circulate widely outside the country of issue. The weight for each currency is its broad index weight scaled so that the weights of the subset of currencies in the index sum to one. A63 Guide to Statistical Releases and Special Tables ST A T IS T IC A L R e l e a s e s — L i s t P u b l i s h e d S e m i a n n u a l l y , w i t h L a t e s t B u l l e t i n R e f e r e n c e Issue D ecem ber 2000 P age A 72 Issue P age A ssets an d lia b ilities o f com m ercial banks D ecem ber 31, 1999 ........................................................................................................................................................................... March 31, 20 0 0 .................................................................................................................................................................................. June 30, 2000 ..................................................................................................................................................................................... September 30, 20 0 0 ......................................................................................................................................................................... M ay 2000 August 200 0 N ovem ber 2000 February 2001 A 64 A 64 A 64 A 64 Terms o f lending a t com m ercial banks February 2000 ................................................................................................................................................................................... May 2 0 0 0 ............................................................................................................................................................................................. August 20 0 0 ....................................................................................................................................................................................... N ovem ber 20 0 0 ................................................................................................................................................................................. M ay 2000 August 2000 N ovem ber 2000 February 2001 A 66 A 66 A 66 A 66 A ssets and liab ilities o f U.S. branches an d agen cies o f fo reig n banks D ecem ber 31, 1999 ........................................................................................................................................................................... March 31, 2000 ................................................................................................................................................................................. June 30, 2000 ..................................................................................................................................................................................... September 30, 200 0 ......................................................................................................................................................................... M ay 2000 A ugust 2000 N ovem ber 2000 February 2001 A 72 A 72 A 72 A 72 P ro fo rm a balance sh eet an d incom e statem ents f o r p ric e d service operation s March 31, 2000 ................................................................................................................................................................................. June 30, 200 0 ..................................................................................................................................................................................... September 30, 200 0 ......................................................................................................................................................................... A ugust 200 0 N ovem ber 2000 February 2001 A 76 A 76 A 76 September 1999 A 64 September 1999 A 73 September 1999 A 79 Anticipated schedule o f release dates for periodic releases ................................................................................................ S P E C IA L TABLES— D a t a P u b l i s h e d I r r e g u l a r l y , w i t h L a t e s t B u l l e t i n R e f e r e n c e Title an d D a te R esiden tial lending reported under the H om e M ortgage D isclosu re A c t 1998 1999 September 2000 A 64 D isposition o f app lica tio n s f o r p riv a te m ortgage insurance 1998 1999 Septem ber 2000 A 73 Sm all loans to businesses a n d fa rm s 1998 1999 September 1999 September 2000 A 76 A 76 Com m unity d evelopm en t lending reported under the Com m unity R einvestm ent A ct 1998 1999 September 2000 A 79 A64 Federal Reserve Bulletin □ March 2001 Index to Statistical Tables References are to pages A3-A62, although the prefix ‘A ” is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Assets and liabilities (See also Foreigners) Commercial banks, 15-21 Domestic finance companies, 32, 33 Federal Reserve Banks, 10 Foreign-related institutions, 20 Automobiles Consumer credit, 36 Production, 44, 45 BANKERS acceptances, 5, 10, 22, 23 Bankers balances, 15-21. (See also Foreigners) Bonds (See also U.S. government securities) New issues, 31 Rates, 23 Business activity, nonfinancial, 42 Business loans (See Commercial and industrial loans) CAPACITY utilization, 43 Capital accounts Commercial banks, 15-21 Federal Reserve Banks, 10 Certificates o f deposit, 23 Commercial and industrial loans Commercial banks, 15-21 Weekly reporting banks, 17, 18 Commercial banks Assets and liabilities, 15-21 Commercial and industrial loans, 15-21 Consumer loans held, by type and terms, 36 Real estate mortgages held, by holder and property, 35 Time and savings deposits, 4 Commercial paper, 22, 23, 32 Condition statements (See Assets and liabilities) Construction, 42, 46 Consumer credit, 36 Consumer prices, 42 Consumption expenditures, 48, 49 Corporations Profits and their distribution, 32 Security issues, 31, 61 Cost o f living (See Consumer prices) Credit unions, 36 Currency in circulation, 5, 13 Customer credit, stock market, 24 DEBT (See specific types of debt or securities) Demand deposits, 15-21 Depository institutions Reserve requirements, 8 Reserves and related items, 4 -6 , 12 Deposits (See also specific types) Commercial banks, 4, 15-21 Federal Reserve Banks, 5, 10 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) Dividends, corporate, 32 EMPLOYMENT, 42 Euro, 62 FARM mortgage loans, 35 Federal agency obligations, 5, 9-11, 28, 29 Federal credit agencies, 30 Federal finance Debt subject to statutory limitation, and types and ownership of gross debt, 27 Receipts and outlays, 25, 26 Treasury financing of surplus, or deficit, 25 Treasury operating balance, 25 Federal Financing Bank, 30 Federal funds, 23, 25 Federal Home Loan Banks, 30 Federal Home Loan Mortgage Corporation, 30, 34, 35 Federal Housing Administration, 30, 34, 35 Federal Land Banks, 35 Federal National Mortgage Association, 30, 34, 35 Federal Reserve Banks Condition statement, 10 Discount rates (See Interest rates) U.S. government securities, 5, 10, 11, 27 Federal Reserve credit, 5, 6, 10, 12 Federal Reserve notes, 10 Federally sponsored credit agencies, 30 Finance companies Assets and liabilities, 32 Business credit, 33 Loans, 36 Paper, 22, 23 Float, 5 Flow of funds, 37-41 Foreign currency operations, 10 Foreign deposits in U.S. banks, 5 Foreign exchange rates, 62 Foreign-related institutions, 20 Foreign trade, 51 Foreigners Claims on, 52, 55-7, 59 Liabilities to, 5 1 -4 , 58, 60, 61 GOLD Certificate account, 10 Stock, 5, 51 Government National Mortgage Association, 30, 34, 35 Gross domestic product, 48, 49 HOUSING, new and existing units, 46 INCOME, personal and national, 42, 48, 49 Industrial production, 42, 44 Insurance companies, 27, 35 Interest rates Bonds, 23 Consumer credit, 36 Federal Reserve Banks, 7 Money and capital markets, 23 Mortgages, 34 Prime rate, 22 International capital transactions of United States, 50-61 International organizations, 52, 53, 55, 58, 59 Inventories, 48 Investment companies, issues and assets, 32 Investments (See also specific types) Commercial banks, 4, 15-21 Federal Reserve Banks, 10, 11 Financial institutions, 35 LABOR force, 42 Life insurance companies (See Insurance companies) A65 Loans (See also specific types) Commercial banks, 15-21 Federal Reserve Banks, 5-7, 10, 11 Financial institutions, 35 Insured or guaranteed by United States, 34, 35 MANUFACTURING Capacity utilization, 43 Production, 43, 45 Margin requirements, 24 Member banks, reserve requirements, 8 Mining production, 45 Mobile homes shipped, 46 Monetary and credit aggregates, 4, 12 Money and capital market rates, 23 Money stock measures and components, 4, 13 Mortgages (See Real estate loans) Mutual funds, 13, 32 Mutual savings banks (See Thrift institutions) NATIONAL defense outlays, 26 National income, 48 OPEN market transactions, 9 PERSONAL income, 49 Prices Consumer and producer, 42, 47 Stock market, 24 Prime rate, 22 Producer prices, 42, 47 Production, 42, 44 Profits, corporate, 32 REAL estate loans Banks, 15-21, 35 Terms, yields, and activity, 34 Type and holder and property mortgaged, 35 Reserve requirements, 8 Reserves Commercial banks, 15-21 Depository institutions, 4 -6 , 12 Federal Reserve Banks, 10 U.S. reserve assets, 51 Residential mortgage loans, 34, 35 Retail credit and retail sales, 36, 42 SAVING Flow o f funds, 37-41 National income accounts, 48 Savings deposits (See Time and savings deposits) Savings institutions, 35, 36, 37-41 Securities (See also specific types) Federal and federally sponsored credit agencies, 30 Foreign transactions, 60 New issues, 31 Prices, 24 Special drawing rights, 5, 10, 50, 51 State and local governments Holdings of U S . government securities, 27 New security issues, 31 Rates on securities, 23 Stock market, selected statistics, 24 Stocks (See also Securities) New issues, 31 Prices, 24 Student Loan Marketing Association, 30 TAX receipts, federal, 26 Thrift institutions, 4. (See also Credit unions and Savings institutions) Time and savings deposits, 4, 13, 15-21 Trade, foreign, 51 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 Treasury operating balance, 25 UNEMPLOYMENT, 42 U.S. government balances Commercial bank holdings, 15-21 Treasury deposits at Reserve Banks, 5, 10, 25 U.S. government securities Bank holdings, 15-21, 27 Dealer transactions, positions, and financing, 29 Federal Reserve Banks holdings, 5, 10, 11, 27 Foreign and international holdings and transactions, 10, 27, 61 Open market transactions, 9 Outstanding, by type and holder, 27, 28 Rates, 23 U.S. international transactions, 50-62 Utilities, production, 45 VETERANS Administration, 34, 35 WEEKLY reporting banks, 17, 18 Wholesale (producer) prices, 42, 47 YIELDS (See Interest rates) A66 Federal Reserve Bulletin □ March 2001 Federal Reserve Board of Governors and Official Staff A lan R oger O G r een spa n , W. Chairman Jr., Vice Chairman L aurence M D iv is io n o f in t e r n a t io n a l F er g u so n , f f ic e o f b o a r d em bers Edw ard W. K e l l e y , Jr. H. M e y e r L y n n S. F ox, A ssista n t to the B oard K a r e n H . J o h n s o n , D irecto r M i c h e l l e A . S m i t h , A ssista n t to the Board D a v i d H . H o w a r d , D epu ty D irecto r F in a n c e D o n a l d J. W i n n , A ssista n t to the B oard V i n c e n t R . R e i n h a r t , D epu ty D irector W i n t h r o p P. H a m b l e y , D epu ty C ongressional Liaison T h o m a s A . C o n n o r s , A ssociate D irector J o h n L o p e z , S pecial A ssistan t to the B oard D a l e W . H e n d e r s o n , A sso cia te D irector B o b S t a h l y M o o r e , S pecial A ssistan t to the B oard R i c h a r d T. F r e e m a n , A ssistan t D irector R o s a n n a P i a n a l t o - C a m e r o n , Special A ssistant to the Board W i l l i a m L . H e l k i e , A ssistan t D irecto r D a v i d W . S k i d m o r e , S pecial A ssistan t to the B oard S t e v e n B . K a m in , A ssistan t D irecto r D i a n e E . W e r n e k e , S pecial A ssistan t to the B oard R a l p h W . T r y o n , A ssistan t D irector Legal D d iv is io n iv is io n o f Research and J. V i r g i l M a t t i n g l y , J r ., G en eral Counsel D a v i d J. S t o c k t o n , D irecto r S c o t t G . A l v a r e z , A sso cia te G en eral Counsel E d w a r d C . E t t i n , D epu ty D irecto r R i c h a r d M . A s h t o n , A sso cia te G en eral Counsel K a t h l e e n M . O ’D a y , A sso cia te G en eral Counsel A n n E . M i s b a c k , A ssistan t G en eral Counsel S a n d r a L . R i c h a r d s o n , A ssistan t G eneral Counsel S t e p h e n L . S i c i l i a n o , A ssista n t G eneral Counsel K a t h e r i n e H . W h e a t l e y , A ssistan t G eneral Counsel O F F IC E O F TH E S E C R E T A R Y J e n n i f e r J. J o h n s o n , S ecretary R o b e r t d e V . F r i e r s o n , A sso cia te Secretary B a r b a r a R . L o w r e y , A ssociate S ecretary an d Om budsm an D IV IS IO N O F B A N K IN G S u p e r v is io n a n d r e g S t a t is t ic s D a v i d W i l c o x , D epu ty D irecto r W i l l i a m R . J o n e s , A ssociate D irector M y r o n L . K w a s t , A sso cia te D irecto r S t e p h e n D . O l i n e r , A sso cia te D irecto r P a t r i c k M . P a r k i n s o n , A ssociate D irecto r L a w r e n c e S l i f m a n , A ssociate D irector C h a r l e s S . S t r u c k m e y e r , A sso cia te D irector M a r t h a S . S c a n l o n , D epu ty A ssociate D irector J o y c e K . Z i c k l e r , D epu ty A ssociate D irector W a y n e S . P a s s m o r e , A ssistan t D irector D a v i d L . R e i f s c h n e i d e r , A ssistan t D irector J a n i c e S h a c k - M a r q u e z , A ssistan t D irector A l i c e P a t r i c i a W h i t e , A ssista n t D irector u l a t io n G l e n n B . C a n n e r , S en ior A d v iser R i c h a r d S p i l l e n k o t h e n , D irecto r D a v i d S . J o n e s , Sen ior A d v iser S t e p h e n C . S c h e m e r i n g , D epu ty D irector H e r b e r t A . B i e r n , Senior A ssociate D irector T h o m a s D . S im p s o n , Sen ior A d v iser R o g e r T. C o l e , S enior A ssociate D irector D W i l l i a m A . R y b a c k , Senior A ssociate D irector G e r a l d A . E d w a r d s , J r ., A ssociate D irector S t e p h e n M . H o f f m a n , J r ., A sso cia te D irector J a m e s V. H o u p t , A sso ciate D irector J a c k P. J e n n i n g s , A ssociate D irector M i c h a e l G . M a r t i n s o n , A ssociate D irector M o l l y S . W a s s o m , A ssociate D irector H o w a r d A . A m e r , D epu ty A ssociate D irector N o r a h M . B a r g e r , D epu ty A ssociate D irector iv is io n o f M onetary A f f a ir s D o n a l d L . K o h n , D irecto r D a v i d E . L i n d s e y , D epu ty D irecto r B r i a n F. M a d i g a n , A sso cia te D irector R i c h a r d D . P o r t e r , D epu ty A sso cia te D irector W i l l i a m C . W h i t e s e l l , A ssistan t D irecto r N o r m a n d R.V. B e r n a r d , S pecial A ssistan t to the Board D iv is io n o f C C on su m er o m m u n it y A B e t s y C r o s s , D epu ty A ssociate D irecto r and R i c h a r d A . S m a l l , D epu ty A ssociate D irector D o l o r e s S . S m i t h , D irecto r f f a ir s D e b o r a h P. B a i l e y , A ssistan t D irecto r G l e n n E . L o n e y , D epu ty D irecto r B a r b a r a J. B o u c h a r d , A ssistan t D irector S a n d r a F. B r a u n s t e i n , A ssistan t D irector A n g e l a D e s m o n d , A ssistan t D irecto r M a u r e e n P. E n g l i s h , A ssistan t D irector J a m e s A . E m b e r s i t , A ssistan t D irecto r A d r i e n n e D . H u r t , A ssistan t D irector C h a r l e s H . H o l m , A ssistan t D irecto r I r e n e S h a w n M c N u l t y , A ssista n t D irecto r H e id i W i l l m a n n R i c h a r d s , A ssistan t D irector W i l l i a m G . S p a n i e l , A ssistan t D irecto r D a v i d M . W r i g h t , A ssistan t D irector S i d n e y M . S u s s a n , A d v iser W i l l i a m C . S c h n e i d e r , J r ., P roject Director, N ation al Inform ation C enter A67 E d w a r d M . G r a m l ic h O f f ic e of Staff D ir e c t o r f o r D M anagem ent S t e p h e n R . M a l p h r u s , S taff D irector iv is io n o f r e s e r v e b a n k and Paym ent O p e r a t io n s S ystem s L o u i s e L . R o s e m a n , D irecto r P a u l W. B e t t g e , A sso cia te D irector M a n a g e m e n t d iv is io n K e n n e t h D . B u c k l e y , A ssistan t D irecto r S t e p h e n J. C l a r k , A sso cia te Director, Finance Function T i l l e n a G. C l a r k , A ssistan t D irector D a r r e l l R . P a u l e y , A sso ciate Director, Human R esources J o s e p h H . H a y e s , J r ., A ssistan t D irecto r Function C h r i s t i n e M . F i e l d s , A ssistan t Director, Human R esources Function S h e i l a C l a r k , EEO P rogram s D irector J e f f r e y C . M a r q u a r d t , A ssistan t D irecto r E d g a r A. M a r t i n d a l e , A ssistan t D irecto r M a r s h a R e i d h i l l , A ssistan t D irecto r J e f f J. S t e h m , A ssistan t D irector D IV IS IO N O F S U P P O R T S E R V IC E S O F F IC E O F T H E IN S P E C T O R G E N E R A L R o b e r t E. F r a z i e r , D irecto r B a r r y R . S n y d e r , In spector G eneral G e o r g e M . L o p e z , A ssista n t D irector D o n a l d L. R o b i n s o n , D epu ty In spector G eneral D a v i d L. W i l l i a m s , A ssista n t D irector D IV IS IO N O F IN F O R M A T IO N T E C H N O L O G Y R i c h a r d C. S t e v e n s , D irecto r M a r i a n n e M . E m e r s o n , D epu ty D irector M a u r e e n T. H a n n a n , A ssociate D irector R a y m o n d H. M a s s e y , A sso ciate D irector G e a r y L. C u n n i n g h a m , A ssistan t D irector W a y n e A. E d m o n d s o n , A ssistan t D irecto r P o K y u n g K im , A ssista n t D irector S u s a n F. M a r y c z , A ssista n t D irector S h a r o n L. M o w r y , A ssista n t D irector D a y W . R a d e b a u g h , J r ., A ssistan t D irector A68 Federal Reserve Bulletin □ March 2001 Federal Open Market Committee and Advisory Councils F e d e r a l O p e n M a r k e t C o m m it t e e M em bers A l a n G r e e n s p a n , Chairman W i l l i a m J. M c D o n o u g h , Vice Chairman R o g e r W. F e r g u s o n , J r. E d w a r d W. K e l l e y , Jr. M ic h a e l H. M E d w a r d M. G r a m l i c h L a u r e n c e H. M e y e r W il l ia m Poole T h o m a s M. H o e n i g C a t h y E. M in e h a n o sk o w A lternate M em bers J e r r y L. J o r d a n A n th o n y M . S a n to m e ro R o b e r t D. M c T e e r , Jr. G a r y H. S t e r n J a m ie B. S t e w a r t , J r . Staff D o n a l d L . K o h n , S ecretary an d Econom ist J e f f r e y C . F u h r e r , A ssociate E conom ist N o r m a n d R .V . B e r n a r d , D epu ty Secretary C r a i g S . H a k k i o , A ssociate E conom ist L y n n S . F o x , A ssista n t Secretary D a v i d H . H o w a r d , A ssociate E conom ist G a r y P. G i l l u m , A ssistan t Secretary W i l l i a m C . H u n t e r , A ssociate E conom ist J. V i r g i l M a t t i n g l y , J r ., G en eral Counsel D a v i d E . L i n d s e y , A ssociate E conom ist T h o m a s C . B a x t e r , J r ., D epu ty G eneral Counsel R o b e r t H . R a s c h e , A ssociate E conom ist K a r e n H. J o h n s o n , Econom ist V i n c e n t R . R e i n h a r t , A ssociate E conom ist D a v i d J. S t o c k t o n , E conom ist L a w r e n c e S l i f m a n , A sso cia te E conom ist C h r i s t i n e M . C u m m in g , A ssociate Econom ist P e t e r R . F i s h e r , M anager, System Open M arket Account FEDERAL ADVISORY COUNCIL D o u g l a s A. W a r n e r , III, P residen t L a w r e n c e K . F i s h , Vice P residen t L a w r e n c e K. F i s h , F ir s t District A l a n G. M c N a l l y , Seventh District D o u g l a s A. W a r n e r III, S e c o n d District K a t i e S . W i n c h e s t e r , Eighth District R o n a l d L . H a n k e y , T h ir d District R . S c o t t J o n e s , Ninth District D a v i d A . D a b e r k o , F o u r th District C a m d e n R . F i n e , Tenth District L . M. B a k e r , J r ., Fifth District R i c h a r d W . E v a n s , J r ., Eleventh District L . P h i l l i p H u m a n n , Sixth District L i n n e t F. D e i l y , Twelfth District J a m e s A n n a b l e , C o-Secretary W i l l i a m J. K o r s v i k , C o-Secretary A69 C o n su m e r A d v is o r y C o u n c il L a u r e n A n d e r s o n , N ew Orleans, Louisiana, Chairm an D o r o t h y B r o a d m a n , San Francisco, California, Vice Chairm an A n t h o n y S . A b b a t e , S a d d le b r o o k , N ew J e r se y A n n e S . L i, T r e n to n , N e w J e r s e y T e r e s a A . B r y c e , S t. L o u is , M is s o u r i J. P a t r i c k L id d y , C in c in n a t i, O h io M a l c o l m B u s h , C h ic a g o , I llin o is O s c a r M a r q u i s , P a rk R id g e , I llin o is M a n u e l C a s a n o v a , J r ., Brow nsville, T e x a s J e r e m y N o w a k , P h ila d e lp h ia , P e n n s y lv a n ia C o n s t a n c e K . C h a m b e r l i n , R ic h m o n d , V ir g in ia N a n c y P i e r c e , K a n s a s C ity , M is s o u r i R o b e r t M . C h e a d l e , A d a , O k la h o m a M a r t a R a m o s , S a n J u a n , P u e r to R ic o M a r y E l l e n D o m e i e r , N ew U lm , M in n e s o ta R o n a l d A . R e i t e r , S a n F r a n c is c o , California L e s t e r W . F i r s t e n b e r g e r , E v a n s v i lle , In d ia n a E l i z a b e t h R e n u a r t , B o s to n , M a ssa c h u se tts J o h n C . G a m b o a , S a n F r a n c is c o , C a lifo r n ia R u s s e l l W . S c h r a d e r , S a n F r a n c is c o , California E a r l J a r o l i m e k , F a r g o , N o r th D a k o ta F r a n k T o r r e s , J r ., W a s h in g to n , D is t r ic t o f C o lu m b ia W i l l i e M . J o n e s , B o sto n , M a ssa ch u setts G a r y S . W a s h i n g t o n , C h i c a g o , I llin o is M . D e a n K e y e s , S t. L o u is , M is s o u r i R o b e r t L . W y n n II, M a d is o n , W is c o n s in Th r if t I n s t it u t io n s A d v is o r y C o u n c il T h o m a s S. J o h n s o n , N ew York, N ew York, Presiden t M a r k H. W r i g h t , San Antonio, Texas, Vice P residen t T o m R . D o r e t y , Tampa, Florida J a m e s F. M c K e n n a , Brookfield, W is c o n s in R o n a l d S . E l i a s o n , Provo, Utah C h a r l e s C . P e a r s o n , J r ., H a r r isb u r g , P e n n s y lv a n ia D . R . G r im e s , Alpharetta, Georgia H e r b e r t M . S a n d l e r , Oakland, C a lif o r n ia C o r n e l i u s D. M a h o n e y , W estfield, M assachusetts E v e r e t t S t i l e s , Franklin, N o r th C a r o lin a K a r e n L. M c C o r m i c k , Port A n geles, W ashington C l a r e n c e Z u g e l t e r , K a n s a s C ity , M is s o u r i A70 Federal Reserve Bulletin □ March 2001 Federal Reserve Board Publications F o r ordering assistan ce, w rite PUBLICATIONS SERVICES, M S-127, Board o f G overnors o f the Federal Reserve System , W ashington, DC 20551, or telephone (202) 452-3244, or FAX (202) 728 -5 8 8 6 . You m ay also use the p u b lica tio n s order fo rm a va ila b le on the B o a r d ’s W orld Wide Web site (http://w w w .federalreserve.gov). When a charge is indicated, p a y m ent should accom pan y request an d be m ade p a y a b le to the B oard o f G overn ors o f the F ederal R eserve System o r m ay be ordered via M astercard, Visa, o r A m erican Express. P aym en t from fo reig n residents sh ou ld be draw n on a U.S. bank. B o oks and M The F ederal is c e l l a n e o u s p u b l ic a t io n s R eser ve S y st e m — P ur po ses and F u n c t io n s . 1994. 157 pp. A n n u a l R e p o r t , 1999. A n n u a l R e p o r t : B u d g e t R e v i e w , 2000. F e d e r a l R e s e r v e B u l l e t i n . Monthly. $25.00 per year or $2.50 each in the United States, its possession s, Canada, and M exico. Elsewhere, $35.00 per year or $3.00 each. A S t a t i s t i c a l D i g e s t : p e r io d c o v e r e d , r e le a s e d a te , n u m nnual ber o f pages, and price. October 1982 1981 1982 D ecem ber 1983 O ctober 1984 1983 1984 O ctober 1985 O ctober 1986 1985 N ovem ber 1987 1986 1987 O ctober 1988 N ovem ber 1989 1988 1 9 8 0 -8 9 March 1991 N ovem ber 1991 1990 N ovem ber 1992 1991 D ecem ber 1993 1992 D ecem ber 1994 1993 D ecem ber 1995 1994 N ovem ber 1996 1 9 9 0 -9 5 239 266 264 254 231 288 272 256 712 185 215 215 281 190 404 $ 6.50 $ 7.50 $11.50 $12.50 $15.00 $15.00 $15.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 pp. pp. pp. pp. pp. pp. pp. pp. pp. pp. pp. pp. pp. pp. pp. S e le c t e d I n t e r e s t a n d E x c h a n g e R a t e s — W e e k ly S e r ie s o f C h a r t s . W eekly. $30.00 per year or $.70 each in the United States, its possession s, Canada, and M exico. Elsewhere, $35.00 per year or $.80 each. R e g u l a t io n s of the B oard of G overnors of the F ederal R eser ve S y st e m . P e r c e n t a g e R a t e T a b l e s (Truth in Lending— Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volum e $5.00. A nnual G u id e to th e F lo w of Funds A cc o u n ts. January 2000. 1,186 pp. $20.00 each. S e r v i c e . Loose-leaf; updated monthly. (Requests must be prepaid.) Consum er and Community Affairs Handbook. $75.00 per year. M onetary P olicy 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. F e d e r a l R eserv e R e g u la to r y R ates f o r su bscribers ou tside the U nited States are as fo llo w s an d include addition al a ir m ail costs: Federal Reserve Regulatory Service, $ 250.00 per year. Each Handbook, $90.00 per year. 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Consum er Handbook on Adjustable Rate M ortgages Consum er Handbook to Credit Protection Laws A Guide to Business Credit for W om en, M inorities, and Small Businesses Series on the Structure o f the F ederal R eserve System The Board o f Governors o f the Federal R eserve System The Federal Open Market Com m ittee Federal Reserve Bank Board o f Directors Federal Reserve Banks A Consum er’s Guide to M ortgage Lock-Ins A Consum er’s Guide to M ortgage Settlem ent Costs A Consum er’s Guide to M ortgage Refinancings H om e M ortgages: Understanding the Process and Your Right to Fair Lending H ow to F ile a Consumer Com plaint about a Bank Making Sense o f Savings W elcom e to the Federal Reserve W hen Your H om e is on the Line: What You Should Know About H om e Equity Lines o f Credit K eys to V ehicle Leasing (also available in Spanish) Looking for the B est M ortgage (also available in Spanish) A71 STAFF STUDIES: Only Sum m aries P rinted in the B U L L E T IN Studies and p a p e rs on econom ic a n d finan cial su bjects that are o f g en eral interest. R equests to obtain single copies o f the fu ll text o r to be a d d ed to the m ailing list f o r the series m ay be sen t to P ublication s Services. 164. T h e 1 9 8 9 -9 2 C r e d i t C r u n c h f o r R e a l E s t a t e , by James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. 167. A S u m m a r y o f M e r g e r P e r f o r m a n c e S t u d i e s i n B a n k i n g , 19 8 0 -9 3 , a n d a n A s s e s s m e n t o f t h e “ O p e r a t i n g P e rfo rm a n ce” and “E v e n t S tu d y ” M e th o d o lo g ie s , by Stephen A . Rhoades. July 1994. 37 pp. 170. T h e C o s t o f I m p l e m e n t i n g C o n s u m e r F i n a n c i a l R e g u Staff Studies 1 -1 5 8 , 161, 163, 165, 166, 168, and 169 are out o f print. Staff Studies 1 6 5 -1 7 4 are available on line at w w w .federalreserve.gov/pubs/staffstudies. 159. N e w D a t a o n t h e P e r f o r m a n c e o f N o n b a n k S u b s i d i a r i e s o f B a n k H o l d i n g C o m p a n ie s , by N e l l i e L ia n g an d D o n a ld Savage. February 1990. 12 p p . 160. B a n k i n g M a r k e t s a n d t h e U s e o f F i n a n c i a l S e r v i c e s b y S m a l l a n d M e d i u m - S i z e d B u s i n e s s e s , by Gregory E. Elliehausen and John D. W olken. September 1990. 35 pp. 162. E v i d e n c e o n t h e S i z e o f B a n k i n g M a r k e t s f r o m M o r t g a g e L o a n R a t e s i n T w e n t y C i t i e s , b y S t e p h e n A. R h o a d e s . F e b r u a r y 1992. 11 p p . la t io n s : A n A n a ly s is o f E x p e r ie n c e w it h t h e T r u th i n S a v i n g s A c t , by Gregory Elliehausen and Barbara R . Lowrey. D ecem ber 1997. 17 pp. 171. T h e C o s t o f B a n k R e g u l a t i o n : A R e v i e w o f t h e E v i d e n c e , by Gregory Elliehausen. April 1998. 35 pp. 172. U s i n g S u b o r d i n a t e d D e b t a s a n I n s t r u m e n t o f M a r k e t D i s c i p l i n e , by Study Group on Subordinated N otes and Debentures, Federal Reserve System . D ecem ber 1999. 69 pp. 173. I m p r o v i n g P u b l i c D i s c l o s u r e i n B a n k i n g , by Study Group on D isclosure, Federal R eserve System . March 2000. 35 pp. 174. B a n k M e r g e r s a n d B a n k i n g S t r u c t u r e i n t h e U n i t e d S t a t e s , 1 9 8 0 -9 8 , by Stephen Rhoades. August 2000. 33 pp. A72 Federal Reserve Bulletin □ March 2001 Maps of the Federal Reserve System ew York ■ i p »- w % HAWAII L egend 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 N ote The Federal Reserve officially identifies Districts by num ber and Reserve Bank city (shown on both pages) and by letter (shown on the facing page). In the 12th District, the Seattle Branch serves Alaska, and the San Francisco Bank serves Hawaii. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth of Puerto Rico and the U.S. Virgin Islands; the San Fran cisco Bank serves American Samoa, Guam, and the Com monwealth of the Northern M ariana Islands. The Board of Governors revised the branch boundaries of the System most recently in February 1996. A73 1-A 2-B 3-C 4-D ! ■ / NJ N ew Baltimore md inati Buffalo B o ston 5-E Pittsburgh Yo r k 6-F NY P h il a d e l p h ia C leveland R ic h m o n d 8-H 7-G sville A tlanta C h ic a g o S t . L o u is 9-1 MN M in n e a p o l is 12-L 10-J K a n s a s C it y S a n F r a n c is c o A74 Federal Reserve Bulletin □ March 2001 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK branch, or facility Zip Chairman Deputy Chairman BOSTON* .............................02106 William C. Brainard William O. Taylor NEW Y O R K *........................ 10045 Buffalo ............................... 14240 PHILADELPHIA ................. 19105 Peter G. Peterson Charles A. Heimbold, Jr. Bal Dixit Charisse R. Lillie Glenn A. Schaeffer CLEVELAND* .................... 44101 David H. Hoag Robert W. Mahoney Cincinnati ..........................45201 George C. Juilfs Pittsburgh .......................... 15230 Charles E. Bunch RICHMOND* ...................... 23219 Baltimore ........................... 21203 Charlotte............................. 28230 Jeremiah J. Sheehan Wesley S. Williams, Jr. George L. Russell, Jr. James F. Goodmon President First Vice President Cathy E. Minehan Paul M. Connolly William J. McDonough Jamie B. Stewart, Jr. Barbara L. Walter1 Anthony M. Santomero William H. Stone, Jr. Jerry L. Jordan Sandra Pianalto Barbara B. Henshaw Robert B. Schaub J. Alfred Broaddus, Jr. Walter A. Varvel William J. Tignanelli1 Dan M. Bechter1 ATLANTA ............................. 30303 John F. Wieland Paula Lovell Birmingham ...................... 35283 Catherine Sloss Crenshaw Jacksonville ...................... 32231 Julie K. Hilton Miami ................................ 33152 Mark T. Sodders Nashville ........................... 37203 Whitney Johns Martin New Orleans .....................70161 Ben Tom Roberts Jack Guynn CHICAGO* ........................... 60690 Michael H. Moskow William C. Conrad Detroit ................................ 48231 Arthur C. Martinez Robert J. Darnall Timothy D. Leuliette ST. LOUIS ............................. 63166 Charles W. Mueller Walter L. Metcalfe, Jr. Little Rock ........................ 72203 Vick M. Crawley L o u isv ille........................... 40232 Roger Reynolds Memphis ........................... 38101 Gregory M. Duckett MINNEAPOLIS ...................55480 Helena ................................ 59601 James J. Howard Ronald N. Zwieg Thomas O. Markle KANSAS C IT Y .....................64198 Terrence P. Dunn Jo Marie Dancik D en v er................................ 80217 Kathryn A. Paul Oklahoma City ................. 73125 Patricia B. Fennell O m aha................................ 68102 Gladys Styles Johnston D A L L A S .................................75201 H. B. Zachry, Jr. Patricia M. Patterson El Paso ............................... 79999 Beauregard Brite White Houston ............................. 77252 Edward O. Gaylord San Antonio ...................... 78295 Patty P. Mueller SAN FRANCISCO ..............94120 Nelson C. Rising George M. Scalise Los Angeles ...................... 90051 William D. Jones Portland ............................. 97208 Nancy Wilgenbusch Salt Lake City ................... 84125 H. Roger Boyer Seattle .................................98124 Richard R. Sonstelie Vice President in charge of branch Patrick K. BarronJames M. McKee Andre T. Anderson Robert J. Slack James T. Curry III Melvyn K. Purcell1 Robert J. M usso1 David R. Allardice1 William Poole W. LeGrande Rives Robert A. Hopkins Thomas A. Boone Martha Perine Beard Gary H. Stern James M. Lyon Samuel H. Gane Thomas M. Hoenig Richard K. Rasdall Carl M. G am bs1 Kelly J. Dubbert Steven D. Evans Robert D. McTeer, Jr. Helen E. Holcomb Sammie C. Clay Robert Smith III1 James L. S tu ll1 Robert T. Parry John F. Moore Mark L. M ullinix2 Raymond H. Laurence1 Andrea P. Wolcott Gordon R. G. Werkema2 ’'Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607. 1. Senior Vice President. 2. Executive Vice President A75 Publications of Interest F e d e r a l R e s e r v e R e g u l a t o r y S e r v ic e To prom ote public understanding o f its regulatory func tions, the B oard publishes the Federal Reserve Regu latory Service, a four-volum e loose-leaf service con taining all B oard regulations as w ell as related statutes, interpretations, policy statem ents, rulings, and staff opinions. For those w ith a m ore specialized interest in the B o ard’s regulations, parts o f this service are pub lished separately as handbooks pertaining to m onetary policy, securities credit, consum er affairs, and the pay m ent system. T hese publications are designed to help those who m ust frequently refer to the B oard’s regulatory m ateri als. They are updated monthly, and each contains cita tion indexes and a subject index. The Monetary Policy and Reserve Requirements Handbook contains R egulations A, D, and Q, plus related materials. The Securities Credit Transactions Handbook con tains R egulations T, U, and X, dealing w ith exten sions o f credit for the purchase o f securities, together w ith related statutes, B oard interpretations, rulings, and staff opinions. A lso included is the B o ard ’s list of foreign m argin stocks. The Consumer and Community Affairs Handbook contains R egulations B, C, E, G, M , P, Z, AA, BB, and DD, and associated m aterials. The Payment System Handbook deals w ith expedited funds availability, check collection, w ire transfers, and risk-reduction policy. It includes Regulations CC, J, and EE, related statutes and com m entaries, and policy statem ents on risk reduction in the paym ent system. F or dom estic subscribers, the annual rate is $200 for the Federal Reserve Regulatory Service and $75 for each handbook. F or subscribers outside the U nited States, the price including additional air m ail costs is $250 for the service and $90 for each handbook. The Federal Reserve Regulatory Service is also avail able on CD -R O M for use on personal com puters. For a standalone PC, the annual subscription fee is $300. For netw ork subscriptions, the annual fee is $300 for 1 con current user, $750 for a m axim um o f 10 concurrent users, $2,000 for a m axim um o f 50 concurrent users, and $3,000 for a m axim um o f 100 concurrent users. Subscribers outside the U nited States should add $50 to cover additional airm ail costs. For further inform a tion, call (202) 452-3244. A ll subscription requests m ust be accom panied by a check or m oney order payable to the B oard o f G over nors o f the Federal R eserve System . O rders should be addressed to Publications Services, m ail stop 127, Board o f G overnors o f the Federal R eserve System , W ashing ton, DC 20551. GU IDE TO THE FL O W OF FUNDS ACCO U NTS A new edition o f Guide to the Flow of Funds Accounts is now available from the B oard o f G overnors. The new edition incorporates changes to the accounts since the initial edition was published in 1993. L ike the earlier publication, it explains the principles underlying the flow o f funds accounts and describes how the accounts are constructed. It lists each flow series in the B oard’s flow o f funds publication, “ Flow o f Funds A ccounts of the U nited S tates” (the Z .l quarterly statistical release), and describes how the series is derived from source data. The Guide also explains the relationship betw een the flow o f funds accounts and the national incom e and product accounts and discusses the analytical uses of flow o f funds data. T he publication can be purchased, for $20.00, from Publications Services, B oard o f G over nors o f the Federal R eserve System , W ashington, DC 20551. A76 Federal Reserve Bulletin □ March 2001 Federal Reserve Statistical Releases Available on the Commerce Department’s Economic Bulletin Board The Board of Governors of the Federal Reserve System makes some of its statistical releases available to the public through the U.S. Department of Commerce’s economic bulletin board. Computer access to the releases can be obtained by subscription. For further information regarding a subscription to the economic bulletin board, please call (202) 4821986. The releases transmitted to the economic bulletin board, on a regular basis, are the following: Reference Number Statistical release Frequency o f release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered and Foreign Related Banking Institutions Weekly/Monday H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z.l Flow of Funds Quarterly