Full text of Federal Reserve Bulletin : May 1996
The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
VOLUME 8 2 •
NUMBER 5 •
MAY 1 9 9 6
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn
• J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman
The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed
except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction of
Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
3 8 3 US.
INTERNATIONAL
TRANSACTIONS
as well as reiterating his views on some key
issues that are important for the nation's economic prospects over the medium term and says
that we have made significant and fundamental
gains in macroeconomic performance in recent
years, including lower rates of inflation, and
that the budget deficit has been narrowed—
developments that will provide the best possible
macroeconomic climate in which the nation can
address other economic challenges, before the
House Committee on the Budget, March 27,
1996.
IN
1995
In 1995, after three years of substantial
increases, the U.S. current account deficit widened only slightly, with some deterioration in
the balances on trade and investment income.
The current account deficit was counterbalanced
by large recorded net capital inflows and a large
positive statistical discrepancy.
3 9 4 INDUSTRIAL
UTILIZATION
PRODUCTION
FOR MARCH
AND
CAPACITY
1996
Industrial production declined 0.5 percent in
March, to 123.5 percent of its 1987 average,
after a revised gain of 1.3 percent in February.
Capacity utilization dropped 0.7 percentage
point in March, to 82.5 percent.
3 9 7 STATEMENTS
TO THE
CONGRESS
Richard Spillenkothen, Director, Division of
Banking Supervision and Regulation, discusses
the Federal Reserve's efforts to increase the
focus of examiners and other supervisory personnel on the risk management procedures of
banking organizations and says that Federal
Reserve examiners will be devoting more attention than in the past to reviewing a bank's
processes and controls to ensure that risk management practices are commensurate with risks,
before the House Committee on Banking and
Financial Services, March 13, 1996.
403 Alan Greenspan, Chairman, Board of Governors, discusses how the rapid pace of technological change and innovation will affect how
the Federal Reserve carries out its legislative
mandates, particularly in the areas of supervision and regulation of banks, stewardship of the
payments system, and monetary policy, before
the Senate Committee on Banking, Housing,
and Urban Affairs, March 26, 1996.
404 Chairman Greenspan updates an earlier review
of current economic conditions and the outlook
406 The Board of Governors comments on its position with regard to the coverage under the
Electronic Fund Transfer Act (EFTA) and the
Board's Regulation E of electronic benefit transfer (EBT) programs; the comments note the
Board's position that EBT and other electronic
fund transfer (EFT) systems are similar and that
all consumers using EFT services should receive
substantially the same protection under the
EFTA and Regulation E absent a showing that
the compliance costs outweigh the need for consumer protections, in a statement submitted for
the record to the House Committee on Banking
and Financial Services, March 27, 1996.
407
ANNOUNCEMENTS
Meeting of the Consumer Advisory Council.
Approval of a voluntary check-fraud survey.
Joint amendment by the Federal Reserve Board
and the Department of the Treasury to a rule
regarding recordkeeping related to certain funds
transfers by financial institutions.
Approval of final revisions to the official staff
commentary to Regulation Z.
Proposal to amend an outstanding proposal to
incorporate a measure for market risk into the
risk-based capital guidelines for banks and bank
holding companies.
Establishment of a Federal Reserve home page
on the World Wide Web.
Changes in Board staff.
4 0 9 MINUTES OF THE FEDERAL OPEN
COMMITTEE MEETING HELD ON
JANUARY 30-31,
1996
MARKET
Various bank holding company, bank service
corporation, and bank merger orders; and pending cases.
AND
OF FEDERAL
RESERVE
BANKS
BRANCHES
List of directors, by Federal Reserve District.
A 3 GUIDE
STATISTICS
TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A45 Domestic Nonfinancial Statistics
A53 International Statistics
A 6 7 GUIDE
TO STATISTICAL
SPECIAL
A 7 6 INDEX
A 7 8 BOARD
RELEASES
AND
TABLES
TO STATISTICAL
OF GOVERNORS
TABLES
AND
STAFF
A 8 0 FEDERAL OPEN MARKET COMMITTEE
STAFF; ADVISORY
COUNCILS
A 8 2 FEDERAL
A 8 4 MAPS
DEVELOPMENTS
4 6 9 DIRECTORS
AND BUSINESS
These tables reflect data available as of
March 27, 1996.
At its meeting on January 30-31, 1996, the
Committee approved without change the tentative ranges for 1996 that it had established in
July of last year. In keeping with its usual procedures under the Humphrey-Hawkins Act, the
Committee would review its ranges at midyear,
or sooner if interim conditions warranted, in
light of the growth and velocity behavior of the
aggregates and ongoing economic and financial
developments.
For the intermeeting period ahead, the Committee adopted a directive that called for a slight
reduction in the degree of pressure on reserve
positions, taking account of a possible reduction
in the discount rate. The directive did not
include a presumption about the likely direction
of an adjustment to policy during the intermeeting period.
4 2 1 LEGAL
A 1 FINANCIAL
BOARD
OF THE FEDERAL
A 8 6 FEDERAL
AND
RESERVE
RESERVE
OFFICES
PUBLICATIONS
RESERVE
BANKS,
AND
SYSTEM
BRANCHES,
383
U.S. International Transactions in 1995
Allan D. B runner, of the Board's Division of International Finance, prepared this article. Virginia Carper
provided research assistance.
1.
The U.S. current account deficit widened only slightly
in 1995 following three years of substantial increases.
The deficit flattened over the course of the year, and it
narrowed sharply in the fourth quarter, as imports of
goods and services flagged while exports picked up
(chart 1). The same factors underlying these developments should cause the U.S. external deficit in 1996
to remain close to its 1995 level.
Although the balance on trade in goods and services widened in 1995, by $5 billion, the increase
was the smallest since the balance began deteriorating again in 1992 (table 1). The values of exports and
imports grew rapidly and at about the same rate, but
net exports fell because the initial value of imports
was somewhat higher than the initial value of
exports. A small trade surplus with Mexico in 1994
turned into a large deficit last year following the peso
crisis and a substantial contraction in Mexican aggregate demand. The trade deficit with Canada also
worsened as Canadian growth slowed markedly. In
contrast, net shipments to Japan picked up significantly following a rise in the exchange value of the
yen in 1994 and early last year.
In quantity terms, the rates of growth of both
imports and exports of goods and services slowed
1.
U.S. external balances, 1984-95
NOTE. The data are quarterly at seasonally adjusted annual rates. Current
account data exclude foreign cash grants received in 1990-92.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S.
international transactions accounts.
markedly from robust rates in 1994, in line with
slower economic activity in the United States and
abroad. Still, export growth increased steadily
throughout the year, largely in response to the
strength of economic activity abroad as well as to a
stabilization of exports to Mexico. In contrast, import
growth sagged in the second half of the year as a
result of developments in the U.S. domestic economy
U.S. external balances, 1990-95
Billions of dollars
T
1990
3S Item
Item
1991
1992
Trade in goods and services, net
Goods, net
Services, net
mm
-80.0
-109.0
29.0
Investment income, net
Portfolio investment, net
Direct investment, net
20.7
-35.2
55.9
Unilateral transfers, net
Foreign cash grants to the United States .
Other transfers, net
-33.4
17.0
-50.4
itKHSBii'H^SIIs^^^KUtltHlttX^^^^^^^&^^i
Current account balance
1995
-74.8
-132.6
57.8
-106.2
-166.1
59.9
-1114
-174.5
63.1
-5.2
-8.4
3.2
10.1
-41.5
51.6
9.0
-47.3
56.3
-9.3
-54.4
45.1
-11.4
-70.6
59.1
-2.1
-16.2
14.0
-32.1
1.3
-33.4
-34.1
.0
-34.1
-35.8
.0
-35.8
-30.1
.0
-30.1
5.7
.0
5.7
-92.7
-61.5
-99.9
-151.2
-152.9
mm
15.1
-40.5
55.6
i p f j l i l i Jjjjjl
6.9 Ifllll®:
42.5 SS^filffi
-35.6
-7.4
WmM
•up
-109.7
-49.9
Hi
NOTE. In this and the tables that follow, components may not sum to totals
because of rounding.
1994
-29.4 H P
-39.5
-74.1 WKXif -96.1
44.7
56.6
MEMO:
Current account balance excluding foreign
cash grants
1993
L
——"
-62.8
1994-95
-1.7
-99.9
-1.7
H
-151.2
-152.9
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S.
international transactions accounts.
384
Federal Reserve Bulletin • May 1996
and a small increase in the relative price competitiveness of U.S. goods in domestic markets.
The balance on investment income declined about
$2 billion last year. The deterioration was due entirely
to a growing deficit in net portfolio investment
income, the result of a continued worsening of the
U.S. net portfolio investment position and increases
in interest rates in the United States in late 1994 and
early 1995. In contrast, net direct investment income
increased last year. Both receipts from U.S. direct
investment abroad and payments on foreign direct
investment in the United States increased rapidly, but
the increase in receipts was larger because U.S. direct
investment assets abroad are larger than foreign direct
investment assets in the United States and because
the rates of return reported by U.S. investors abroad
were larger and increased more than the rates of
return earned by foreign investors in the United
States.
The current account balance was buoyed somewhat last year by a temporary $6 billion reduction in
net unilateral transfers to foreigners. Most of the
reduction was due to a transient drop in government
grants to foreign countries: Because of U.S. government shutdowns in late 1995, government grants that
were scheduled to be disbursed in the fourth quarter
were delayed until the beginning of 1996.
Counterbalancing the continued large current
account deficit in 1995 were a large recorded net
inflow of capital and a large positive statistical discrepancy, which comprises some combination of
unrecorded net capital flows and unrecorded net current account receipts. Much of the recorded net capital inflow was in the form of a record increase in
foreign official holdings in the United States, a result
of both foreign exchange intervention by certain
industrialized countries and substantial reserve accumulation by several developing countries in Asia and
Latin America. Private foreign assets in the United
States increased sharply, but the increase was about
matched by additions to private U.S. assets abroad.
MAJOR ECONOMIC
INFLUENCES
ON U.S. INTERNATIONAL
TRANSACTIONS
The U.S. deficit in traded goods and services widened
considerably between 1991 and 1995, but the
increase last year was much less than in other recent
years. These developments are consistent with recent
movements in the two most important determinants
of trade flows: relative rates of economic growth and
relative price competitiveness. Although the U.S.
economy in 1995 grew at about the same pace as the
economies of its major trading partners, as has been
true historically, the increase in U.S. income had a
larger effect on expenditures on foreign goods and
services than the comparable increase in foreign
income had on expenditures on U.S. goods and services. This effect was offset somewhat by a small
improvement in U.S. price competitiveness last year,
which helped make U.S. goods and services more
attractive at home relative to imports and, to a lesser
extent, more attractive in foreign markets.
Financial and economic developments in Mexico
in late 1994 and in 1995 also had important effects on
U.S. trade. From 1991 through the third quarter of
1994, the U.S. balance on trade in goods and services
with Mexico was in surplus, averaging nearly $4 billion per year, as the Mexican economy grew somewhat faster than the U.S economy and the price of
U.S. goods relative to the price of Mexican goods fell
(chart 2). Following the December 1994 collapse of
the peso, the trade balance deteriorated rapidly,
resulting in a deficit of about $15 billion for 1995.
2.
Historical perspective on the U.S. trade balance with
Mexico and its proximate determinants, 1986-95
CPI-adjusted peso value of the U.S. dollar
U.S. International
The deterioration of the trade balance was due in part
to the direct effects of the real depreciation of the
peso relative to the dollar, which decreased the relative attractiveness of U.S exports to Mexico and may
also have increased U.S. demand for less-expensive
Mexican goods and services. Probably a more important factor in the decline, however, was a sharp
contraction of Mexican aggregate demand resulting
from efforts by the Mexican government to tighten
monetary conditions, maintain wage restraint, and
reduce government spending.
3.
Transactions in 1995
385
Historical perspective on the U.S. trade balance and its
proximate determinants, 1973-95
Billions of 1992 dollars
U.S. real net exports of goods and services
—
50
Ratio of foreign to U.S. real GDP 1
Relative Rates of Economic
Growth
The relationship between the U.S. trade balance in
goods and services and relative rates of economic
growth in other countries is most evident when the
balance is compared with deviations of the ratio of
foreign GDP to U.S. GDP from its historical trend
(chart 3, top and middle panels). The ratio's rising
trend means that the output of foreign countries has
grown faster, on average, than that of the United
States. The trade balance has tended to be closely
related to deviations from the trend because of close
historical associations between U.S. exports and foreign GDP and between U.S. imports and U.S. GDP.
Positive deviations from the trend (that is, ratios
higher than the trend ratio) indicate that foreign
economies are growing even faster relative to the
U.S. economy than has been true on average, and,
therefore, positive deviations are generally associated
with U.S. trade balance surpluses. Similarly, negative
deviations are usually associated with trade balance
deficits, though they have a somewhat larger effect
on net trade than do positive deviations of the same
magnitude because U.S. imports are more responsive
to changes in U.S. GDP than are U.S. exports to
changes in foreign GDP.
Although there have been periods (such as the
1980s) when swings in relative prices were a more
important determinant of the trade balance than relative economic growth, more recently, movements in
U.S. price competitiveness, as measured by the priceadjusted exchange value of the dollar (chart 3, bottom panel), have been quite modest and the trade
balance has tended to move more in line with relative
rates of GDP growth. In 1995, the economies of the
United States and its major trading partners slowed
markedly, to about the same rate of growth. Still, the
trade balance deficit widened somewhat for the year
as a whole, owing to the greater responsiveness of
U.S. expenditures on imports to changes in domestic
income compared with the responsiveness of foreign
Ratio scale, 1986:Q4= 100
1975
1980
1985
1990
1995
NOTE. The data are quarterly.
1. Foreign GDP is a weighted average of the GDPs of the foreign G-10
countries; see notes to table 2 for details. The straight line is the long-term trend.
2. The index is based on the foreign G-10 countries—Belgium-Luxembourg,
Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland,
and the United Kingdom—and eight developing countries—Brazil, Hong Kong,
Korea, Malaysia, Mexico, the Philippines, Singapore, and Taiwan.
expenditures on U.S. exports to changes in foreign
income.
The U.S. economy slowed to a 1 LA percent rate of
expansion in 1995 after growing at a 3'/2 percent rate
in 1994 (table 2). The slower growth was due partly
to efforts by businesses to reduce the pace of inventory accumulation after a burst of stockpiling in 1994.
Final sales also slowed last year, as the growth of
expenditures by both households and businesses
slowed from elevated rates of increase in 1994.
Although the growth of real expenditures on imported goods and services slowed, to a 414 percent
rate in 1995 from IIV2 percent in 1994, imports
continued to expand more rapidly than the pace of
overall domestic spending.
The growth of real GDP in major foreign industrial
countries other than Japan slowed sharply in 1995
from the robust rates of 1994. In Canada, where
386
Federal Reserve Bulletin • May 1996
economic activity had been particularly vigorous
through the end of 1994, the slowdown reflected
weaker U.S. growth and Canadian macroeconomic
policies directed toward improving the fiscal balance
and preventing the reemergence of inflationary pressures. In Germany and the other European economies, appreciation of their currencies relative to the
U.S. dollar in 1994 and in early 1995 and efforts to
reduce public sector deficits contributed to the decline
in the rate of real output growth. Japan, in contrast,
showed some tentative signs of recovery late in 1995
after almost no growth during the previous three
years.
Economic growth in the major developing countries also slowed on average in 1995 from the strong
pace of 1994. The substantial contraction of economic activity in Mexico had important effects on
U.S. trade, as noted earlier, but real output also
slowed in other developing countries, including
Argentina. The economies of the newly industrialized
Asian countries—Malaysia, Korea, and Taiwan, for
example—continued to grow rapidly in 1995, at
about the same rate as in 1994. Although growth in
most of these countries was driven by a strong expansion of internal demand, especially for investment,
most countries also benefited from very fast export
growth. The marked acceleration of exports was due
at least in part to a real depreciation of those countries' currencies against the yen and key European
currencies early in the year.
2.
U.S. Price
Competitiveness
U.S. external performance is also influenced by the
price competitiveness of those U.S. goods and services that compete against foreign imports in domestic markets and against other goods and services in
foreign markets. U.S. goods and services gained some
ground in domestic markets last year: The relative
price of imported goods rose slightly, as price
increases for imported goods just outpaced price
increases for domestic goods (chart 4). U.S. exports
have also become more competitive in world markets
in recent years. Higher prices for foreign goods and
services (especially in developing countries) relative
to the prices of U.S. exports were the primary contributor to this development, though the significant
depreciation of the foreign exchange value of the
dollar in 1994 and 1995 also played a part.
DEVELOPMENTS
IN GOODS AND
IN TRADE
SERVICES
Although the values of both exported and imported
goods and services increased markedly last year, the
value of imports rose somewhat more, causing the
deficit in goods and services to widen slightly. In
quantity terms, however, the rates of growth of both
exports and imports slowed, in line with the slowing
of the U.S. and foreign economies. (See the box for a
discussion of the effects of using chain-type measures
on the measurement of trade quantities as well as
prices.)
Growth of real GDP in the United States and selected
foreign economies, 1993-95
Percent change, fourth quarter to fourth quarter
Country
United States
Total foreign
Industrial countries2
Canada
Western Europe
Japan
Developing countries3 . . .
Asia
Latin America
Mexico
Other Latin America
1993
1994
2.2
3.5
2.8
1.8
3.1
.6
-.5
5.2
7.8
1.9
.8
2.9
4.5
3.9
5.4
3.7
.4
6.0
8.0
3.4
4.0
2.9
1995'
Relative prices of exports and imports, 1987-95
Index, 1989= 1.0
1.2
4 Increasing price competitiveness
1 of U.S. goods
»
2.0
1.4
.6
1.6
Exports
K—
1.25
—
1.15
—
1.05
—
0.95
•
7.5
-1.6
-6.6
3.0
NOTE. Aggregate measures are weighted by bilateral shares in U.S. nonagricultural merchandise exports in 1987-89.
1. Data for 1995 are partly estimated.
2. The industrial countries index includes Australia and New Zealand in
addition to Canada, Japan, and Western Europe. The index for Western Europe
comprises Belgium, France, Germany, Italy, the Netherlands, Sweden. Switzerland, the United Kingdom, Austria, Denmark, Finland, Greece, Ireland, Norway,
Portugal, Spain, and Turkey.
3. The developing countries in the index for Asia are the Peoples Republic
of China, Hong Kong, Korea, Malaysia, Mexico, the Philippines, Singapore, and
Taiwan. The countries in "Other Latin America" are Argentina, Brazil, Chile,
and Venezuela.
SOURCE. Various national sources.
4.
Imports
1
1
1987
1
1
1989
1
1
1991
1
1
1993
1
1
1995
NOTE. For exports, the index is the ratio of foreign prices to U.S. export
prices of nonagricultural products, excluding computers. For imports, the index
is the ratio of U.S. import prices of non-oil imports, excluding computers, to the
U.S. GDP deflator. The data are quarterly.
U.S. International
Transactions in 1995
387
Chain-Type Measures of U.S. Trade
In 1995, the U.S. Department of Commerce's Bureau of
Economic Analysis began computing quantity and price
indexes for the various categories of U.S trade and for other
measures of U.S. economic activity on a chain-type basis.
Previously, quantity measures were calculated on a
constant-dollar basis and price indexes on a fixed-weight
basis (specifically, as price deflators). The old measures did
not allow for the effects of changes in relative prices or
changes in the composition of goods and services over time.
In contrast, chain-type measures are calculated using
weights that shift over time, with weights for a particular
time period based on prices and quantities in adjacent years.
Although the move to chain-type measures had some
quantitative effects on the measurement of trade movements, it changed the qualitative nature of these data very
little. For the past several years, changes in quantities of
Constant (1987) dollars
exports and imports, when calculated on a constant (1987)
dollar basis, were by far the most important factor in the
rise in the value of exports and imports and in the widening
of the deficit in traded goods and services, whereas changes
in prices of exports and imports played only a small role
(chart, left panels). When calculated on a chain-type basis,
changes in the prices of exports and imports show somewhat faster growth, although measured trade movements
are still dominated by changes in quantities (chart, right
panels). The more rapid rises in prices produced by the
chain-type calculations are due mainly to a decrease in the
weight assigned to computers, whose prices have fallen
precipitously in recent years; in the chained (1992) dollar
series, computers are given about half the weight they were
given in the constant (1987) dollar series,
Chained (1992) dollars
1994
1995
1993
1994
1995
388
3.
Federal Reserve Bulletin • May 1996
U.S. international trade in goods and services, 1993-95
Billions of dollars
1993
Balance on goods and services
1994
1995
-76
Item
-106
-111
Exports of goods and services
Services
Goods
Agricultural
Computers
Aircraft and parts
Other capital
Consumer
Automotive products
Industrial supplies
Other
—
645
188
457
44
29
33
120
55
52
112
12
701
199
503
47
33
31
141
60
58
122
11
784
209
575
57
40
26
168
64
61
146
13
Imports of goods and services
Services
Goods
Petroleum and products
Computers
Other capital
Consumer
Automotive products
Industrial supplies
Foods and other
—
719
130
589
51
38
114
134
102
101
48
807
139
669
51
46
138
146
118
114
55
895
146
749
55
56
166
160
124
129
59
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S.
international transactions accounts.
Robust Expansion
of Exports
The value of exported goods and services rose almost
12 percent last year, the fastest rate of increase since
1989 (table 3). Most of the increase was due to a
rapid expansion of exported goods (especially capital
goods and industrial supplies); exports of services
advanced at a pace similar to that seen in recent
years. Although the pace of economic activity slowed
for many U.S. trading partners, demand for U.S.
goods and services increased in most major regions
of the world (table 4). The rate of growth of exports
to industrial countries accelerated, with exports to
Japan growing more than 20 percent and exports to
4.
U.S. exports of goods to its major trading partners,
1993-95
Western Europe rebounding to a 15 percent rate of
expansion. Exports to developing countries in Asia
and in Latin America (other than Mexico) were also
very robust. In contrast, exports to Mexico contracted
10 percent, following a 21 percent increase in 1994.
Almost half the increase in export value came from
rapid growth in the price of goods and services, as
export prices were pushed up somewhat faster than in
recent years. Growth in the quantity of exports (measured in chained (1992) dollars) picked up as the year
progressed and totaled 6V2 percent from the fourth
quarter of 1994 to the fourth quarter of 1995
(table 5). The bulk of the 1995 increase was in
exports of capital goods. High levels of investment
spending in foreign countries, especially in Asia, led
to a nearly 20 percent increase in exports of machinery. Machinery exports to Asian countries other than
Japan advanced at a 30 percent rate, with Malaysia
and other newly industrializing economies (especially Hong Kong, Korea, Singapore, and Taiwan)
accounting for most of the increase. Shipments of
machinery to Latin America were lackluster, primarily because shipments to Mexico contracted slightly.
Exports of computers and semiconductors accounted
for nearly two-thirds of the increase in machinery
exports, with the rest of the increase in a wide range
of other machines. The growth of capital goods
exports was held back only slightly by a further
decline in aircraft exports.
Exports of goods and services other than capital
goods, which accounted for about two-thirds of
exports last year, grew more slowly as a result of the
slower pace of consumption spending in industrialized countries. Exports of consumer goods grew only
2 percent, down from a double-digit rate of growth in
1994. Canada, Japan, and Asia (mostly Hong Kong
and Korea) each accounted for about one-fourth of
the increase in exported consumer goods; exports to
Mexico declined more than 15 percent. Automotive
Billions of dollars
1993
1994
Total
457
503
575
Industrial countries'
Canada
Western Europe
Japan
268
101
111
47
293
115
115
52
335
128
132
63
Developing countries2
Asia
Latin America
Mexico
Other Latin America
188
96
78
42
37
209
104
92
51
41
240
130
96
46
50
Percent
change,
1994-95
1995
Importing region
—
m
14
• • •'••B
14
11
15
21
15
25
4
-10
22
1. See note 2 to table 2.
2. See note 3 to table 2.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S.
international transactions accounts.
5.
Change in the quantity of U.S. exports, 1993-95
Percent change, fourth quarter to fourth quarter
Type of export
All exports
Agricultural
Computers
Aircraft and parts
Other capital
Consumer
Automotive products
Industrial supplies
1993
1994
1995
5.0
10.2
6.5
4.7
5.1
-5.7
22.9
-9.8
14.1
4.9
9.4
.2
-1.4
5.4
12.3
18.0
28.5
-16.9
22.2
13.0
10.3
7.6
2.5
3.3
7.7
-2.9
49.0
-16.7
16.8
2.1
-5.2
6.5
2.4
NOTE. Quantities are measured in chained (1992) dollars.
SOURCE. U.S. Department of Commerce, Bureau of the Census.
U.S. International
exports (including automotive parts to be assembled
and shipped back to the United States) contracted at a
5 percent rate, owing to a slowdown in the U.S. and
world auto markets. Notably, exports of automotive
products to Japan jumped nearly a third, although the
initial level of exports to Japan was relatively low.
Exports of automotive products to Mexico contracted
sharply.
Agricultural exports remained at an elevated level
following a large jump in late 1994. Bountiful U.S.
harvests in 1994 and robust world demand in 1995
(especially from Asia) resulted in vigorous shipments
throughout much of the year, although exports faltered somewhat in the second half of the year following lower-than-expected 1995 harvests in the United
States. The quantity of exported industrial supplies
other than agricultural products grew 6V2 percent
last year, about the same pace as in 1994. Exports of
services slowed to a 3 percent rate of expansion,
likely because of the slowdown in economic activity
in industrial countries.
Transactions in 1995
389
Imports of computers continued to expand rapidly,
and imports of capital goods other than computers—
semiconductors and industrial and service machinery,
for example—also posted sharp gains.
Imports of goods other than capital goods grew
much more slowly in 1995 than did imports of capital
goods. Imports of consumer goods grew less than
1 percent, the slowest rate of increase since 1992,
because of slowing imports of consumer durable
goods. Imports of consumer goods from Mexico and
China accounted for much of the increase, while
imports from Japan were flat.
Automotive imports contracted last year for the
first year since 1990, in line with the sharp slowdown
in U.S. automobile sales. Imports of automotive products from Mexico remained strong, but imports from
Canada were sluggish and imports from Japan contracted sharply. Imported quantities of industrial supplies were also weak, despite marked declines in the
price of these products (especially metals).
Oil Imports
Rapid Growth of Imports
The value of imported goods and services rose rapidly last year, only somewhat more slowly than in
1994. A significant portion of the increase was due to
a $12 billion surge in imports from Mexico. More
than half the increase in the total value of imports
was due to higher prices. The quantity of imports
rose 41/4 percent in 1995, considerably more slowly
than the double-digit rates of growth in 1993 and
1994 (table 6). The slowdown reflected slower U.S.
economic growth and, to a lesser extent, somewhat
higher import prices relative to the prices of domestic
goods.
The sharpest increase was in the quantity of
imported capital goods, which grew about 20 percent in 1995 compared with 30 percent in 1994.
6.
The value of oil imports rose more than 7 percent
from 1994 to 1995, as a $1.73 per barrel (12 percent)
increase in the average price of imported oil more
than offset a nearly 4 percent decline in the volume
imported. With the increase, the price returned to the
midpoint of its post-Gulf War trading range from
depressed levels in early 1994.
Changes in the prices of imported oil have tended
to mirror changes in spot oil prices (West Texas
intermediate) with a lag of several weeks (chart 5).
Spot prices fell during the fourth quarter of 1994
and began 1995 near $17 per barrel. The decline was
5.
Oil prices, 1983-95
Change in the quantity of U.S. imports, 1993-95
Percent change, fourth quarter to fourth quarter
Type of import
All imports
Services
Goods
Petroleum and products
Computers
Other capital
Consumer
Automotive products ..
Industrial supplies
Foods and other
1993
1994
11.4
11.6
4.3
8.7
.0
5.1
4.2
-.3
42.3
11.5
.3
-11.8
12.0
10.0
14.2
40.0
14.1
8.5
9.2
11.7
36.9
19.0
6.6
-.2
11.2
15.8
14.7
4.4
NOTE. Quantities are measured in chained (1992) dollars.
SOURCE. U.S. Department of Commerce, Bureau of the Census.
1995
-1.0
3.5
NOTE. The data are monthly.
SOURCE. Petroleum Intelligence Weekly, various issues; and U.S. Department
of Commerce, Bureau of Economic Analysis.
390
7.
Federal Reserve Bulletin • May 1996
U.S. oil consumption, production, and imports, selected years, 1980-95
Millions of barrels per day
Item
1980
1992
1993
1994
1995'
17.1
10.8
6.9
Consumption
Production
Imports
1985
15.7
11.2
5.1
17.0
9.8
7.9
17.2
9.6
8.6
17.7
9.4
9.0
17.7
9.4
8.8
SOURCE. U.S. Department of Energy, Energy Information Administration.
1. Estimates.
due to a warmer-than-normal winter as well as to
increases in non-OPEC oil production, especially
in the North Sea. Two major factors temporarily
increased prices during the year. The first was a
protracted labor strike in Brazil, which trimmed
roughly 600,000 barrels per day from non-OPEC oil
production and led to price rises through May, to
nearly $20 per barrel. During the summer, prices
declined, reflecting concerns about an overabundant
supply on world oil markets. Then Gulf of Mexico
hurricanes decreased October production roughly
600,000 barrels per day, and with colder-than-normal
weather, prices rose to $19 per barrel in December.
Import prices mirrored these spot price changes and
averaged $16.32 per barrel in 1995, $1.73 above the
average for 1994.
The quantity of oil imports edged down from a rate
of 9 million barrels per day in 1994 to 8.8 million
barrels per day in 1995 (table 7). The decrease
reflected a small drawdown of stocks; U.S. oil consumption and production changed little during the
year.
unilateral transfers abroad (table 1). The deterioration
in net investment income was due entirely to a larger
deficit in net portfolio investment income; net direct
investment income increased.
Net Portfolio Investment
The balance on portfolio income registered a deficit
of $71 billion last year, significantly larger than the
$54 billion deficit recorded in 1994 (table 8). The
balance on portfolio income has been in deficit since
1985 (chart 6), and the size of the deficit has broadly
mirrored the net portfolio investment position. The
net portfolio position deteriorated further last year,
accounting for somewhat less than half the increase
in the deficit on portfolio income. The remainder of
the increase was due to a rise in the effective rate
of return on the net portfolio position, with rates of
return on both portfolio assets and liabilities rising,
reflecting higher short-term U.S. interest rates in late
1994 and early 1995 (chart 7).
Net Direct Investment
DEVELOPMENTS
IN THE
NONTRADE CURRENT
ACCOUNT
Income
The balance on direct investment income rebounded
last year, increasing nearly $14 billion after declining
The balance on investment income declined about
$2 billion last year, but the decline was more than
offset by a temporary $6 billion reduction in net
8.
Income
6.
Net portfolio investment: Position and income, 1971-95
U.S. net investment income, 1992-95
Billions of dollars
Item
Investment income, net
Portfolio investment income, net
Receipts
Private
Government
Payments
Private
Government
Direct investment income, net
Receipts
Payments
1992
1993
1994
10
41
-47
58
53
5
105
63
42
52
52
62
0
5
-42
67
59
7
108
68
56
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S.
international transactions accounts.
NOTE. The data are annual averages. The year-end position for 1995 was
constructed by adding the recorded portfolio investment flows during 1995 to
the recorded year-end position for 1994.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis; and
the Federal Reserve Board.
U.S. International
7.
Rates of return on portfolio investment, 1986-95
1989
1991
1993
391
Transfers
1995
NOTE. For the net position, the data are the ratio of net investment income
(receipts minus payments) to net position (claims minus liabilities). For claims
(or liabilities), the data are the ratio of total receipts (or payments) to claims (or
liabilities).
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis; and
the Federal Reserve Board.
$11 billion in 1994 (table 8). The recovery was more
than accounted for by a $23 billion jump in receipts
on U.S. direct investment abroad. Receipts have
tended to fluctuate somewhat with cycles of foreign
economic activity and with changes in exchange
rates, but they have generally increased with the
growth of the U.S. direct investment position abroad
(chart 8). The bulk of the improvement in receipts
was due to a higher rate of return on US. direct
investment (table 9), although receipts also benefited
from an increase in the level of U.S. direct investment
abroad.
Payments on foreign direct investment in the
United States also increased in 1995, from $23 bil-
8.
in 1995
lion to $32 billion, thus continuing the recovery from
the very depressed levels recorded in the early 1990s.
Such payments did not grow between 1988 and 1993,
despite continued increases in the foreign direct
investment position in the United States (chart 8).
Although payments have been boosted in recent years
by somewhat higher rates of return on the foreign
direct investment position in the United States—
bringing the level of payments to record high levels—
rates of return remain quite low and are well below
their 1977-80 average (table 9).
Unilateral
1987
Transactions
Net unilateral transfers to foreigners—which include
government grants and pension payments as well as
net private transfers to foreigners—declined nearly
$6 billion last year, to $30 billion (table 1). Most of
the decrease was due to a temporary drop in government grants to foreign countries: Because of U.S.
government shutdowns, government grants that were
scheduled to be paid in the fourth quarter of 1995
were delayed until the beginning of 1996.
CAPITAL ACCOUNT
TRANSACTIONS
The large US. current account deficit in 1995 was
balanced by a large recorded net capital inflow and
by a positive statistical discrepancy in the international transactions accounts, which comprises both
unrecorded net capital inflows and unrecorded current account transactions (table 10). Most of the large
recorded capital inflow was due to a record $110 billion increase in foreign official holdings in the United
Direct investment: Position and income, 1977-95
Billions of dollars
Millions of dollars
Billions of dollars
U.S. direct investment abroad
Millions of dollars
Foreign direct investment
in the United States
800
—
IfftiN
600
Position
400
200
—
_
8
60
—
a
J
80
40
—
Receipts
20
Position
200
+
+
Payments
I
1 I
1977
NOTE. The position data are period averages using the current-cost measures
as of year-end for the current and previous years. The year-end data for 1995
were constructed by adding the recorded direct investment flows during 1995 to
the recorded year-end position for 1994.
I
I
1980
I
I
I
1983
I
I
I
1986
I
I
I
1989
I
1 I
1992
I
I
1 1
1995
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis; and
the Federal Reserve Board.
392
9.
Federal Reserve Bulletin • May 1996
Rates of return on direct investment, 1977-95
Percent
1977-80
1981-88
1989
1990
1991
1992
1993
1994
1995'
US, investment abroad
Current
Market
9.9
n.a.
8.0
n.a.
10.2
7.3
10.0
7.5
8.3
6.7
8.0
6.4
9.0
6.8
9.2
6.5
11.3
8.3
Foreign investment in the United States
Current
Market
7.0
n.a.
3.1
n.a.
1.6
1.4
.6
.5
-.7
-.6
.1
.1
1.0
.7
4.1
3.0
5.2
4.0
Item
NOTE. The rates of return are calculated as follows: The numerator is direct
investment receipts or payments, from the U.S. international transactions
accounts. The denominator is the average of year-end figures for the value of
direct investment for the current and previous years.
1. The year-end values of claims and liabilities that appear in the denominators are estimates constructed by adding the recorded direct investment flows
during 1995 to the recorded year-end positions for 1994.
n.a. Not available.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S.
international transactions accounts and U.S. international investment position.
States, reflecting both intervention on the part of
certain industrial countries to support the foreign
exchange value of the dollar and substantial reserve
accumulation by several developing countries in Asia
and Latin America.
Net purchases of U.S. securities by private foreigners were also quite large in 1995, reflecting the continued trend toward internationalization of securities
markets. Net purchases of U.S. Treasury securities by
private foreigners amounted to $99 billion, far
exceeding net purchases in previous years. In 1995,
as in 1994, much of the foreign activity in the U.S.
Treasury securities markets was channeled through
Caribbean financial centers, reflecting in part the
activities of hedge funds. A large portion of the net
purchases of Treasury securities from the Caribbean
appears to have been financed by repurchase agreements, accounting for a large part of the capital
outflows reported by banks and securities dealers.
Net purchases of U.S. corporate and other bonds were
also at record high levels, in part reflecting the intensive use of the Eurobond markets by U.S. corporations. Foreign net purchases of U.S. corporate stocks
(excluding stock swaps associated with cross-border
mergers) were well below previous peaks despite the
rapid rise in U.S. stock prices in 1995, which has in
the past tended to attract capital flows from abroad.
U.S. net purchases of foreign securities in 1995
rebounded strongly after a very weak first quarter.
For the year as a whole, net purchases of stocks from
Japan accounted for almost 40 percent of total U.S.
purchases of foreign stocks. U.S. investors apparently
10.
Composition of U.S. capital flows, 1991-95
Billions of dollars
Change,
1994-95
1991
1992
1993
1994
1995
Current account balance
-7
-62
-100
-151
-153
-2
Official capital, net
Foreign official assets in the United States
U.S. official reserve assets
Other U.S. government assets
26
17
6
3
43
41
4
-2
70
72
-1
0
44
39
5
0
100
110
-10
0
56
71
-15
0
Private capital, net
Net inflows reported by U.S. banking offices
Securities transactions, net
Private foreign net purchases of U.S. securities ..
Treasury securities
Corporate and other bonds1
Corporate stocks
U.S. net purchases of foreign securities
Stocks
Bonds
Direct investment, net
Foreign direct investment in the United States . . .
U.S. direct investment abroad1
Other
10
3
9
56
19
27
10
-46
-32
-15
-10
22
-32
8
45
36
17
64
37
31
-4
-46
-31
-15
-21
18
-39
14
-7
51
-38
104
24
61
19
-142
-61
-81
-32
41
-73
12
121
115
43
93
34
56
3
-50
-43
-7
0
49
-49
-37
46
-39
100
194
99
82
13
-94
-47
-47
-22
75
-97
7
-75
-154
57
101
65
26
10
-44
-4
-40
-22
26
-48
44
Statistical discrepancy
-29
-26
36
-14
7
21
Item
1. For 1991 and 1992, transactions with finance affiliates in the Netherlands
Antilles are excluded from direct investment outflows and included in foreign
purchases of U.S. securities. This adjustment was discontinued in 1993 on the
assumption that by then virtually all the Eurobonds issued by Netherlands
Antilles had come due.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S.
international transactions accounts.
U.S. International Transactions in 1995
had little interest in adding to their holdings of stocks
or bonds from emerging markets in Latin America, in
the wake of increased perceptions of risk resulting
from the Mexican peso crisis.
Direct investment inflows reached $75 billion in
1995, surpassing the previous record level, with
mergers and acquisitions adding substantially to the
inflow of funds from foreign direct investors in the
United States. U.S. direct investment abroad, which
totaled $97 billion, was even larger than foreign
direct investment in the United States and also surpassed previous peak levels. Mergers and acquisitions, as well as privatizations abroad, contributed to
the outflow.
PROSPECTS
FOR
1996
The U.S. external deficit in 1996 is expected to be
near its 1995 level. A pickup in economic activity for
393
our major trading partners should support expansion
of exports of U.S. goods and services. Recent data
also indicate that economic activity in the United
States has picked up a bit in the early part of this
year, suggesting a pace of import growth similar to
that in 1995. Despite a small appreciation of the
exchange value of the dollar in the first quarter, the
United States appears to be holding on to its recent
gains in international price competitiveness.
Although the deficit in the balance on portfolio
income is expected to grow larger this year, following a further deterioration in the net portfolio investment position, the increase is likely to be more than
offset by an increase in net direct investment income,
assuming that U.S. investors continue to earn high
rates of return on their investments abroad similar to
the rates earned in 1995. Net unilateral transfers to
foreigners will be boosted in 1996 by those transfers
that did not take place in the fourth quarter of last
year.
•
394
Industrial Production and Capacity Utilization
for March 1996
Released for publication
April 16
Industrial production declined 0.5 percent in March
after a revised gain of 1.3 percent in February.
A strike-related drop in motor vehicle assemblies
and parts production more than accounted for the
decrease in output. Excluding the production of
motor vehicles and parts, which dropped about
15 percent, industrial production rose 0.3 percent.
Despite the effects of the strike, overall industrial
production grew at an annual rate of 2.7 percent in
the first quarter, up from 0.6 percent in the preceding
quarter. The quarterly pickup largely reflects the
bounceback in the production of aircraft and parts,
which was sharply curtailed during the fourth quarter
by a strike at a major producer. At 123.5 percent of
its 1987 average, industrial production in March was
1.3 percent higher than it was in March 1995; exclud-
Industrial production indexes
Twelve-month percent change
Twelve-month percent change
10
Materials
10
_
Durable
manufacturing
Products
1990
1991
1992
1994
1993
1995
1996
1990
1991
1992
1993
1994
1995
1996
Capacity and industrial production
Ratio scale, 1987 production = 100
Ratio scale, 1987 production = 100
— Manufacturing
——
Capacity
140
——
*
-
120
100
Production
80
1
1
1
1
1
1
1
1
1
1
Percent of capacity
1
1
1
1
Percent of capacity
Manufacturing
Total industry
90
Utilization
90
Utilization
80
80
70
J
1982
I
1984
L
1986
J
1988
1990
1992
I
L
1994
70
1
1996
1982
1
1
1984
1
1
1986
All series are seasonally adjusted. Latest series, March. Capacity is an index of pclential industrial production.
tial
1
1988
1
1
1
1990
1
1
1992
1
1
1994
1
1996
395
Industrial production and capacity utilization, March 1996
Industrial production, index, 1987= 100
Percentage change
Category
1996
1995
19951
1996'
Mar.P
Mar. 1995
to
Mar. 1996
-.5
1.3
1.7
1.6
2.5
2.1
.8
-.5
-.9
-1.1
.4
-.4
1.2
-.2
5.0
1.4
1.4
1.5
2.0
.9
1.6
-1.1
-.8
-1.4
.1
2.0
.7
1.1
2.7
-.9
.1
4.9
Dec.r
Jan.r
Feb.r
Mar.P
Dec/
Jan/
Feb/
Total
122.8
122.5
124.1
123.5
.2
-.3
1.3
Previous estimate
122.7
122.1
123.7
.1
-.4
1.2
Major market groups
Products, total2
Consumer goods
Business equipment
Construction supplies
Materials
119.2
115.7
158.4
110.5
128.4
118.6
114.3
160.6
108.0
128.4
120.6
116.2
164.7
110.3
129.5
119.9
115.1
162.9
110.7
128.9
.3
-.2
1.0
1.6
.0
-.4
-1.2
1.4
-2.2
.0
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
124.8
134.8
113.8
98.1
125.1
124.5
134.9
113.0
97.0
125.7
126.4
137.6
114.0
98.5
124.3
125.4
135.7
114.0
100.4
125.1
.3
.4
.1
-.2
-.3
-.3
.1
-.7
-1.2
.5
MEMO
Capacity utilization, percent
1995
Average,
1967-95
Low,
1982
1996
High,
1988-89
Capacity,
percentage
change,
Mar. 1995
to
Mar. 1996
Mar.
Total
Dec.
Jan.
Feb/
Mar.P
82.8
82.3
83.2
82.5
3.8
82.7
82.1
82.9
81.9
80.2
85.8
87.6
92.2
81.3
79.7
85.2
86.5
92.6
82.3
81.1
85.2
87.9
91.4
81.4
79.9
85.1
89.6
92.0
4.3
4.9
2.8
.1
1.1
82.1
71.8
84.9
84.6
81.4
80.7
82.6
87.4
86.9
70.0
71.4
66.8
80.6
76.2
85.2
83.5
89.0
86.5
92.6
84.0
81.9
88.9
89.6
88.6
Previous estimate
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
ing the output of motor vehicles and parts, the gain
was 2.5 percent. Capacity utilization dropped 0.7 percentage point, to 82.5 percent.
When analyzed by market group, the data show
that the output of consumer goods declined 0.9 percent. The production of automotive products fell
11 percent, and the production of other durable consumer goods eased fractionally after a partial rebound
in February. The output of consumer nondurable
goods, such as foods and utility output for residential
use, gained 0.4 percent.
The production of business equipment declined
I.1 percent. The drop in assemblies of business vehicles caused the output of transit equipment to plunge
II.6 percent. The output of industrial equipment
dipped 0.7 percent after a sizable gain of 1.6 percent in February. Led by another strong increase in
the production of computer and office equipment,
the output of information processing equipment
advanced further. The output of business equipment
rose at an annual rate of 14.7 percent in the first
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
quarter after having barely increased in the fourth
quarter; the swing largely reflects the fourth-quarter
strike and the first-quarter return to work at a major
aircraft producer.
The output of construction supplies, which rose
0.4 percent in March, was up at an annual rate of
2 percent in the first quarter, down from 6 percent in
the fourth quarter of 1995. The production of materials declined 0.4 percent in March, with the weakness
concentrated in the durable goods materials used to
make motor vehicles. The production of basic metals
and parts for equipment, which includes parts for
aircraft and components for high-technology equipment, rose. The output of nondurable goods materials, such as paper and textiles, advanced 0.5 percent.
The production of energy materials, led by a gain in
coal mining, increased 1.0 percent.
When analyzed by industry group, the data show
that manufacturing output declined 0.8 percent;
excluding motor vehicles and parts, production rose
0.2 percent. Although production in durable manufac-
396
Federal Reserve Bulletin • May 1996
turing fell 1.4 percent because of the strike in the
motor vehicle and parts industry, production rose for
steel, computers, other transportation equipment,
lumber and products, and instruments. The output of
nondurables was little changed, as gains and losses
were fairly evenly spread among industries. The production in mining increased 2 percent, and output at
utilities rose 0.7 percent.
The factory operating rate, which had rebounded
1 percentage point in February, fell 0.9 percentage
point, to 81.4 percent. The utilization rate for motor
vehicles and parts—included in the advancedprocessing grouping—dropped from 78.2 percent to
66.4 percent and accounted for most of the overall
decline in utilization in manufacturing. Among other
advanced-processing industries, the changes in utilization were mixed. The utilization rate for primaryprocessing industries edged down 0.1 percentage
point. Rates remain elevated for primary metals,
machinery, and petroleum refining. In mining, the
utilization rate rose 1.7 percentage points; gains were
sizable in coal mining and oil and gas well drilling.
The operating rate for utilities reversed half of February's decline.
•
NOTICE
Updated estimates of industrial capacity for 1995 and
1996 will be included in the G.17 press release scheduled to be published on May 15, 1996. The updated
estimates will incorporate the data on actual and
planned investment by manufacturing industries that
were reported in the Census Bureau's Investment
Plans Survey issued in late March. The updates affect
the capacity utilization rates as of the beginning of
1995.
397
Statements to the Congress
Statement by Richard Spillenkothen, Director, Division of Banking Supervision and Regulation, Board
of Governors of the Federal Reserve System, before
the Committee on Banking and Financial Services,
U.S. House of Representatives, March 13, 1996
Thank you for the opportunity to discuss the Federal
Reserve's efforts to increase the focus of examiners
and other supervisory personnel on the risk management procedures of banking organizations. The subject of "risk management" has attracted much attention in recent years both in the financial community
and among the U.S. bank supervisory agencies and is
a timely topic for discussion with this committee.
Improvements in risk management procedures have
clearly affected the way in which many banks manage their activities and the agencies review them.
Advances in risk management techniques have also
permitted expanded product lines and more efficient
services, while providing methodologies that, if used
properly, can enable institutions to better control the
risks associated with ever more complex financial
instruments and growing volumes of transactions.
Risk management is the process of identifying,
measuring, reporting, and controlling risks, which
banks and other businesses have always done. In that
sense, it is nothing new. What is new is the technology that has facilitated product innovation and the
application of financial theory to the development of
new products. Many of the new products are highly
complex and are not best addressed by examination
on a transaction-by-transaction basis or by simply
verifying balance sheet values. Moreover, these products highlight the importance of managing a broad
range of risk in addition to traditional credit risk.
These risks include potential exposure to market,
liquidity, operational, legal, reputational, and other
risks.
Increasingly, therefore, the Federal Reserve has
engaged in a concentrated effort to focus the attention
of examiners on evaluating the adequacy of a bank's
processes for identifying, managing, and controlling
all of its risks when developing conclusions about the
overall safety and soundness of the institution. While
management processes at all banks may deserve more
attention, this focus is particularly important at large
institutions that conduct substantial volumes of trans-
actions daily, deal in highly complex instruments,
and can significantly alter their risk profiles on relatively short notice.
Let me emphasize that the traditional approach of
evaluating the quality of a bank's existing assets (that
is, its loans and investments) remains highly important to the Federal Reserve's supervisory process.
Our long-standing practice of reviewing credit risk
in a bank's portfolio (including the counterparty
credit risk in derivative instruments) is not being
de-emphasized. While recent attention has focused
lately on trading activities and complex instruments,
the possibilities for misadventures extend throughout
a bank, and we cannot forget the lessons of the past.
Not long ago, large institutions were experiencing
serious problems with excessive commercial real
estate lending—problems brought about by policies
and lending practices that were inconsistent with
market realities and principles of sound credit risk
management. In addition to asset quality, our examiners will continue to focus on other important and
traditional financial indicators, such as capital adequacy, earnings, and liquidity.
Still, technology and innovation have presented
banks with new ways of both taking and managing
risks. With the advent of off-balance-sheet, over-thecounter derivative instruments, for example, institutions of all sizes can adjust their yields, risks, and
liquidity much easier and quicker than they could
before, with either positive or negative results.
Accordingly, by itself, an assessment of the quality of
a bank's loans, investments, and other balance sheet
values at a point in time no longer provides the
assurance it once did that a sound institution is likely
to remain sound in the future. Losses at Barings PLC
and other institutions have shown how rapidly the
financial strength and condition of a bank can change
and demonstrate that it is essential for management to
implement and enforce sound controls and risk management practices that are appropriate for the activities the firm conducts. In the Barings case, it was not
risky instruments or credit risk but poor controls over
the actions of a rogue trader that broke the bank.
Indeed, a breakdown or an absence of internal controls or risk management systems has been the fundamental cause of recent financial problems at several
institutions.
398
Federal Reserve Bulletin • May 1996
Bank supervisors cannot be everywhere; nor can
they prevent every problem. Moreover, too much
supervision and government oversight would simply
stifle innovation and lead to a less competitive and
responsive financial system. Relying more on supervisory techniques that encourage banks to adopt
procedures to prevent excessive risk-taking—while
keeping in place fundamental prudential safeguards
such as adequate capital cushions—minimizes our
intrusion while at the same time enhancing safety and
soundness.
Management and the institutions themselves, not
supervisors, must be the principal source for detecting and deterring abusive and unsound practices
through adequate internal controls and operating procedures. Particularly at large institutions, market discipline can also play an important role, provided the
institutions make adequate disclosures. By emphasizing these points through focused, risk-oriented examination procedures and efforts that promote sound
disclosure and accounting standards, supervisors
hope to increase the likelihood that a bank's activities
will remain sound for the long term.
With that background, let me illustrate some of the
changes taking place within the industry and the
manner in which they are affecting our supervisory
practices.
ADVANCES
AT BANKING
IN RISK
MANAGEMENT
INSTITUTIONS
Advances in computerization and communications,
globalization of financial markets, and the resulting
competition have all served to develop opportunities,
inspire change, and bring about more efficient use of
scarce resources. Throughout the 1980s and 1990s,
for example, the market for securitized assets grew
rapidly—driven by the need for financial institutions
to maximize their use of capital and fueled by banking assets ranging from auto to commercial loans.
Financial derivatives also grew dramatically, as institutions found new ways to reallocate risks and
rewards to where they were most valued. In the
process, identifying and managing financial risk has
become more complex.
It is, indeed, pressures created by market events
that have brought about many of the advances in risk
management that we have seen, and these advances
have contributed to a more efficient and financially
stronger banking system. For example, during the
past five years, U.S. banks have been forced to
improve their management of market risks as their
trading activities became more complex and quadrupled in volume. Institutions have enhanced their
information systems to report trading positions on a
more timely basis and have also developed more
sophisticated risk measurement techniques, such as
the "value at risk" (VaR) measure currently used by
many large trading institutions. This measure considers historical volatilities of market movements in
calculating the probability of material and adverse
changes in the market values of trading portfolios
over the near term. Although specific techniques for
calculating VaR differ among institutions and continue to evolve, such measures represent a significant
advance in the management and measurement of
market risks.
While no one should underestimate the potential
risks in trading and derivatives activities, I would
note that the overall experience of U.S. banks in this
area has been favorable and that it has not been a
source of material problems to the banking system.
Even in the isolated cases in which we have seen
large trading losses, as with Barings and Daiwa, the
problems have related to fundamental violations of
the basic tenets of sound internal controls, such as
inadequate separation of duties, not with the inherent
complexities of the instruments involved.
Moreover, credit risk, the risk that a borrower will
default, has always been the most important risk to
commercial banks and has also been a difficult risk
for bankers to measure and control—whether or not it
entails derivatives instruments. Nevertheless, here,
too, opportunities for stronger risk management practices are growing daily as, again, technology makes
more things possible. For example, through their own
direct efforts and those of national consulting firms,
banks are significantly improving their loan analysis
and internal credit risk ratings to facilitate more efficient loan pricing and internal capital allocation relative to risk. Many banks are also devoting more
resources to identifying correlations among default
risks so that their risks can be diversified more effectively and managed on a portfolio basis.
CHANGES
IN BANK
SUPERVISION
All aspects of our supervisory process are undergoing
changes in response to advances in risk management
and industry innovation, including capital adequacy
guidelines, the examination and surveillance process,
and efforts to promote more public disclosure and
appropriate accounting conventions. These and other
initiatives are discussed briefly below and are listed
Statements to the Congress
in the attachment.1 Taken together, these efforts
should improve both the efficiency and the quality
of the supervision process while also reducing the
related costs to the banking system.
The Federal Reserve has always placed much
importance on strong capital adequacy among banks
and sought nearly a decade ago to develop and promote capital standards that acknowledged changing
practices within the banking system and that were
more sensitive to a bank's risk profile. The previous
primary capital standard served its purpose of
strengthening capital ratios, especially among the
nation's largest banks, but had clear limitations. The
existing risk-based capital standard that was adopted
by the Basle Committee on Banking Supervision
(Basle Committee) in 1988 provided a mechanism,
missing in the earlier standard, for addressing the
growing volume of off-balance-sheet transactions and
also distinguished among broad categories of credit
risk in instruments booked on the balance sheet.
While the current requirement is, itself, still crude
in many respects, it has given supervisors and the
banking system a framework for evaluating capital
adequacy that is more responsive to the level of credit
risk than had previously existed in regulatory standards, and it continues to evolve to meet changing
needs. For example, within the last two years, the
risk-based capital standard has been amended to
tailor capital requirements to a broader range of offbalance-sheet risks and to recognize practices within
the financial industry to reduce credit exposures
through netting arrangements.
Supervisors are also adapting the standard to take
advantage of improvements in risk measurement
methodologies to address market risks in trading
activities, that is, the risk to an institution's trading
position resulting from adverse movements in interest rates, foreign exchange rates, or commodity or
equity prices. Such market risks were not covered by
the risk-based capital agreement in 1988. Although
appropriate rulemaking procedures remain to be finalized in the United States, the Federal Reserve and the
other U.S. banking agencies expect in the coming
months to adopt new standards that will permit large
U.S. trading banks to use their internal "value-atrisk" models, subject to examiner oversight, to determine their future capital requirements for market risk.
Recognizing not only the advances in risk measurement but also the importance of sound risk management practices, this forthcoming standard will require
1. The attachment to this statement is available from Publications
Services, Mail Stop 127, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
399
large trading institutions to meet certain quantitative
and qualitative criteria. The quantitative requirements produce a level of consistency necessary for a
capital standard, while the qualitative requirements
provide specific standards for managing trading risks
that include the following elements of sound risk
management practice:
• A risk control unit that is independent of the
trading function
• A regular program for backtesting the bank's
performance to validate the accuracy of the VaR
measure
• Procedures for periodic stress testing to evaluate
the impact on a bank's condition of highly unusual
market moves
• Documented internal policies, controls, and
procedures
• Independent reviews of the risk management
process by internal auditors.
At the end of February, the Board of Governors
approved for public comment the final element of the
market risk proposal that deals with "backtesting"
the accuracy of a bank's internal model. We expect to
complete the rulemaking process for this proposal
this spring and to implement the new requirements by
the end of 1997.
The vast majority of all derivative transactions of
U.S. banking organizations are held in the trading
accounts of the largest banks and, thus, will be covered by these market risk capital requirements and
principles of sound management. As traded instruments, they are also marked-to-market daily, actively
managed, and incorporated into the institution's risk
management reports. Derivative instruments are also
subject to the counterparty credit risk provisions of
the existing Capital Accord and continue to be subject to examiner review from that perspective as well.
In placing a high importance on the management
process for trading and derivative activities, the Federal Reserve recognizes that these activities can rapidly change an institution's risk profile and transmit
problems from one institution to another. Consequently, we have worked with our colleagues domestically and abroad to expand the amount of information available to supervisors so that they can identify
more efficiently institutions at which strong risk management and control procedures are most important.
Early last year the U.S. banking agencies significantly
enhanced the information about derivatives in their
bank Call Reports to address the capital amendments
mentioned earlier and to obtain other information
about the underlying nature of derivatives' risks.
400
Federal Reserve Bulletin • May 1996
These efforts also contributed, last year, to a "joint
framework for supervisory information" about trading and derivatives activities of banks and securities
firms that was adopted by the Basle Committee and
the International Organisation of Securities Commissions (IOSCO).
Other supervisory initiatives involve promoting
and reinforcing sound risk management practices
throughout the banking industry, training examiners
in the underlying concepts of risk management and
measurement, requiring more extensive "scoping" of
a bank's risk profile before an examination, and
providing examiners with the technology and guidance they need to make their efforts more efficient.
Evaluating
Risk
Management
One important step that reflects our increasing focus
on risk management and controls is our recent decision to assign a formal rating to these areas in connection with on-site examinations beginning this year.
While supervisors have long reviewed internal controls during examinations, the rating process will
increase the focus on risk management and is
intended to highlight both the quantitative and qualitative aspects of a bank's system for identifying,
measuring, monitoring, and controlling its risks.
The rating of risk management will not alter the
way in which our examiners apply the interagency
CAMEL rating framework, but it will serve as a more
solid foundation for determining the overall management component of that system. Moreover, we are
also working with our colleagues from the other
federal banking agencies to develop a consistent
framework for incorporating market risks (including
interest rate risk and foreign exchange risk) as well as
risk management policies and practices more formally into the bank rating system.
Promoting
Sound
Practices
In many respects, the increased focus on risk management begins by identifying the practices that we
expect banks to follow and that we direct our examiners to evaluate. While much is not new, the expansion
of the more complex trading and derivatives activities has encouraged the Federal Reserve to formalize
its expectations regarding sound risk management
practices in several areas.
In all cases, of course, supervisory expectations
may vary significantly, depending upon the size and
complexity of the institution's activities. Large banks,
for example, will normally be expected to have more
formal policies, procedures, limits, and management
information systems than smaller banks and must
have more sophisticated measures of the risks they
take. Nevertheless, all institutions are expected to
follow basic sound management practices that are
appropriate for their unique circumstances and the
nature and level of the risks they take, whether those
risks involve innovative and complex instruments or
traditional forms of loans. This flexibility will inherently require judgment on the part of examiners and
other supervisory personnel when assessing the adequacy of a bank's policies and procedures.
Since 1993, we have issued a series of instructions,
policy statements, and examination manuals that have
stressed the importance of managing all risks inherent in the business of banking, including market and
credit risks, liquidity, legal, and reputational risks,
and, quite important, operational risks. In these documents and throughout our supervisory process, we
are emphasizing these four basic elements of sound
risk management:
• An active oversight role by bank boards of directors and senior management. Directors, in particular,
need not be experts in complex banking matters, but
they should receive adequate information about their
institution's risks that are measured and described in
terms they understand and should communicate to
management their tolerance for accepting risks.
Directors and senior managers must ensure that the
risks of new products are fully understood and that
adequate controls are in place before new products
are initiated. They also have the ongoing responsibility of ensuring that their directives are adequately
implemented and enforced throughout the institution.
• Adequate policies, limits, and procedures. These
elements should be tailored to the activities of the
institution and should provide specific guidance
regarding the nature and volume of risks the bank
may take. Limits should be consistent with the
board's willingness to take risks and with the institution's available capital and overall ability to manage
its risks.
• Adequate risk measurement, monitoring, and
management information systems. An institution
should be able to identify and measure its material
risks and clearly communicate their nature and level
to senior management on a timely basis. Reports
should identify instances in which established limits
have been exceeded and should prompt appropriate
corrective actions. The sophistication of the risk measures should be commensurate with the nature of the
institution's activities.
Statements to the Congress
• Adequate internal controls and audits. Having
an internal control process that monitors adherence to
established policies and procedures is critical to the
sound conduct of a bank's activities. The complexity
of control procedures may vary significantly among
institutions, but to be effective they should all involve
an appropriate segregation of duties, be administered
by qualified personnel, and be conducted with sufficient independence, scope, and frequency. Especially
at large institutions, examiners will be directing more
attention to the independence of internal auditors
and their ability to monitor and test the reliability of
management information systems and compliance
with internal policies and controls.
These principles are highly consistent with those
promoted by the Group of Thirty in its 1993 report
recommending sound practices in derivatives activities of financial institutions. Indeed, they are practices that virtually any business should employ in
managing and controlling its risks. In that sense,
efforts by the banking agencies to review and promote such practices should serve only to strengthen
the financial condition and management process at
banking organizations and to reduce the exposure a
bank's activities may present to the federal safety net.
This focus on risk management (particularly at large
institutions) should in no way reduce the effectiveness of banking organizations to compete, either domestically or abroad.
I also would stress that while it is important for an
institution to identify and document the policies, procedures, and controls it needs, simply maintaining the
proper documentation is meaningless if the procedures and controls are not implemented in practice.
Consequently, a critical aspect of evaluating risk
management and control procedures is testing and
validating the strength and integrity of the procedures
and checking the extent to which they are understood
and followed throughout the institution. Such validation efforts must be conducted by individuals who
have proper levels of organizational independence
and expertise, such as internal or external auditors,
on-site examiners, or managers or other professionals
within the institution with no direct connection to the
activity being reviewed.
More Efficient
Examinations
In addition to the actions I have outlined, the Federal
Reserve has undertaken other initiatives to make the
supervision process more efficient and risk-focused,
while reducing the burden on banking organizations.
401
For example, through administrative changes and by
making greater use of available technology, we are
increasing the time devoted to planning and preparing for an examination in order to tailor the examination to the unique circumstances and risk profile of
individual institutions.
Both the planning and the on-site examination
effort will be helped significantly with the introduction of the Examiner Workstation, which has been
recently developed by the Federal Reserve System.
This automated system, which is being tested in
cooperation with state and federal banking agencies,
permits examiners to download data directly from a
bank's computer, analyze portfolios on their personal
computers, and identify concentrations and other
characteristics within the bank's loan portfolio. As a
result, examiners should be able to reduce materially
the amount of time they spend on manual operations
and should be able to devote more time to identifying
and evaluating risks. The Federal Reserve is also
making greater use of loan-sampling techniques to
test the accuracy of internal loan risk-rating systems
and to improve the efficiency of the examination
process.
In addition to these steps, we are also engaged in
an ongoing, in-depth review of our examination and
supervisory processes. Our long-term objective is to
make the examination process even more riskfocused, cost-effective, and burden-sensitive without
sacrificing the quality of our examinations and their
ability to identify and evaluate fundamental safety
and soundness considerations.
The risk orientation of our supervisory process also
benefits from other factors. Recently we have supplemented information from our senior lending officer
survey by initiating a quarterly survey of bank
examiners that will give us more timely "hands-on"
feedback on important developments relating to
credit quality and management practices in banking
organizations.
Training
Although examiners review the risk management process in all activities of a bank, most of the recent
efforts of the Federal Reserve to train examiners
about risk management practices have been directed
at the more rapidly evolving activities of banks—
particularly those involving market risks. These
activities include trading and derivatives activities
and those of typical asset-liability committees
(ALCOs), which oversee a bank's investment portfolios and overall management of interest rate risk. In
402
Federal Reserve Bulletin • May 1996
these areas, the Federal Reserve has significantly
expanded its formal capital markets training programs to address risk management, including internal
controls, at all levels of examiner expertise.
Capital Markets
Coordinators
In recent years, the Federal Reserve's training and
capital market surveillance efforts have been facilitated by capital markets coordinators at each Reserve
Bank. These individuals, who are officers or senior
examiners, keep abreast of market activities of institutions in their Districts and meet together quarterly
to discuss supervisory policies and practices and to
share their insights and experiences with coordinators
from other Reserve Banks. They also participate
actively in planning and staffing examinations and
have helped significantly in developing and directing
conferences and training programs that focus on the
risk management of trading and derivatives activities.
The Board staff has worked closely with these coordinators in developing examiner guidance and in implementing surveillance screens for monitoring and
evaluating interest rate risk. We are also working
with the other federal banking agencies to revise the
Call Report to further strengthen our oversight and
supervisory efforts in this area.
The Federal Reserve's capital market supervisory
activities also benefit greatly from the experiences
and insights of its research economists and payment
system experts, at both the Board and the Reserve
Banks. These individuals complement the skills and
perspectives of supervisory personnel and contribute
to a stronger supervisory process. Their contributions
are particularly helpful with respect to risk management and market risk issues, which are likely to
become even more important to supervisors in the
future as market practices, risk management procedures, and financial innovations continue to evolve at
a rapid pace.
Disclosure
and Accounting
Standards
While capital requirements and supervisory oversight
are important in maintaining a financially sound
banking and financial system, market discipline can
also help greatly in stifling undesired behavior and
reinforcing supervisory efforts to encourage sound
risk management practices. For that reason, the Federal Reserve has worked at both the domestic and
international levels to promote adequate and more
uniform standards of supervisory reporting and disclosure, particularly with respect to internationally
active banking organizations. We are also supporting
the accounting profession in improving accounting
and disclosure standards.
CONCLUSION
Efforts of the Federal Reserve to expand the review
of a bank's risk management process are important,
particularly in the case of large institutions and those
with material holdings of derivatives and other complex instruments. These institutions and activities
must be well managed or they will present unacceptable risks to the federal safety net. Our examiners
will be devoting more attention than in the past to
reviewing a bank's processes and controls, whether
they relate to transactions or products new to the
bank or to traditional lending activities. Although our
goal is to ensure that risk management practices are
commensurate with risks, we want to encourage all
institutions to keep abreast of new techniques for
improving their management of risks.
The greater attention given to risk management
should not, however, be overstated and viewed as a
more dramatic change than it is. Strong management
procedures can go far in preventing problems
throughout a bank, but evaluating their real worth is
difficult without judging the bank's results. Assessing
"old fashioned lending" and evaluating loan quality
and the adequacy of bank capital and loan-loss
reserves will remain paramount.
Of course, no set of supervisory procedures will
detect or prevent all problems, and that should not be
our goal. In the past, some banks—large and small—
have had difficulties because of poor policies and
procedures and have failed as a result, typically
because of bad loans. Human nature being what it is,
there will undoubtedly be more problems ahead—
both for banks engaged in traditional lending activities and for those involved in trading and derivatives
activities. Our job as supervisors should be to limit
the frequency and scope of these problems and
ensure that they do not present unacceptable risks to
bank customers, the financial system, or the federal
safety net. Toward that purpose, we will continue our
efforts to review and improve supervisory techniques
and encourage sound risk management practices,
while recognizing that banks must take risks if they
are to be in a position to serve their customers and
communities and fulfill their role in the nation's
economy.
Statements to the Congress
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on Banking, Housing, and Urban Affairs,
U.S. Senate, March 26, 1996
I would like to begin by expressing my appreciation
to President Clinton for nominating me for another
term as Chairman of the Board of Governors of the
Federal Reserve System. I am honored at the confidence he has shown in me and pledge to him, to you,
and to the American people that if I am confirmed I
will continue to do my best to merit that confidence.
I also want to thank you for scheduling this hearing
so expeditiously. I like to think that I have had a
good, productive relationship with this committee
and the Congress during my tenure at the Federal
Reserve. If you and the Senate choose to confirm my
nomination, I intend to continue to work closely
with you and your colleagues in both houses on the
many issues confronting our financial system and our
economy.
As you know, I have come before you frequently
to discuss a variety of specific issues related to the
conduct of monetary policy and to banking and financial markets. I thought it appropriate on this occasion
to step back from day-to-day concerns and take a bit
of a longer view of the forces, especially the evidently more rapid pace of technological change and
innovation, that will affect how the Federal Reserve
carries out its legislative mandates over the years
ahead.
Last month, my testimony was concentrated on the
impact of these forces on the economy. Today I want
to address their effects on the Federal Reserve in
three main areas of responsibility—supervision and
regulation of banks, stewardship of the payments
system, and monetary policy.
The way we supervise financial institutions is an
area in which technology is both creating problems
and simultaneously giving us and the institutions we
supervise the tools to solve them. New instruments
and changing business practices have made obsolete
in many respects our previous emphasis on balance
sheets in examinations. A generation ago, a monthold balance sheet was fairly indicative of the current
state of an institution. Today, owing to the proliferation of transactions, a day-old balance sheet can be
obsolete. Moreover, much of what is important for
the health of an institution never finds its way onto
the balance sheet, except ultimately through its bottom line effect on capital. Accordingly, banks and
other intermediaries are relying increasingly on statistical models to measure and manage risk. By monitoring these models and by using them to test for
403
vulnerabilities, the Federal Reserve can leverage off
of this trend to enhance our own capabilities to
ensure a safe and sound banking system.
Ultimately, the smooth functioning of our financial
markets and economy rests on the payments system.
The Congress recognized this when it created the
Federal Reserve, making improvements to the payments system one of our preeminent tasks in 1913.
We have not lost sight of that objective, but it has
been complicated by the speed and volume of transactions within the United States and between the
United States and other countries. Because large
shocks can be transmitted rapidly around the world, a
breakdown in the payments system anywhere can
have adverse effects on the United States.
Here again, technology is being harnessed to
reduce the risk of a breakdown, especially by shortening the time that passes between when a transaction is
initiated and when it is settled. Events occurring in
that period that prevent the completion of the transaction can threaten the stability of the financial system.
We have been able to reduce the interval between
initiating and finalizing many types of securities
transactions, and I expect that reducing it further will
be a high priority in years to come. Ideally we seek a
system in which a transaction would be settled when
it was initiated. Facilities to do that, however, are
costly. Sometimes it is better to accept a minor system risk owing to float than to invest in resources
required to eliminate it. Fortunately, technology is
rapidly reducing costs, perhaps enabling the real
world to approach more closely the ideal.
We in the United States have a special responsibility because the dollar is the world's leading currency,
and a breakdown in dollar payments would have
repercussions far beyond our borders as well as at
home. Maintaining the key role of the dollar is important to American growth and standards of living.
Because foreigners want to invest in dollar securities,
our markets are more liquid and our interest rates are
lower than they otherwise would be. Because foreigners are willing to hold vast amounts of U.S. currency,
the interest costs of funding the U.S. government debt
is reduced $10 billion to $15 billion yearly.
A sound payments system is only one of our
responsibilities as the central bank for the world's
leading currency. Just as essential is a sound
currency—one whose value is not eroding significantly or erratically. But price stability is not an
objective you have given monetary policy just to
satisfy international investors. Rather, the fundamental reason for this goal is that its fulfillment is an
essential element in enabling the economy to reach
its full potential.
404
Federal Reserve Bulletin • May 1996
A challenge we at the Federal Reserve face, as we
have discussed on a number of occasions, is to assess
how innovation and technical change are affecting
the workings of the economy and its response to
monetary policy actions. Indeed, technological
change has begun to be felt at the very beginning of
the policy implementation process, enabling depositories to avoid holding non-interest-earning required
reserves and shrinking the reserve base through
which we work; we are looking at how we may have
to adapt to this development.
Change always presents problems. Nonetheless, I
look forward to the opportunity, if you confirm my
nomination, to continue to work with you, the President, and my colleagues at the Federal Reserve to
help the American people realize the full benefits our
innovative and entrepreneurial spirit can bestow.
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on the Budget, U.S. House of Representatives, March 27, 1996
ing to restrain spending. But the recent data seem to
indicate that those restraining influences are not so
strong as to seriously jeopardize the continued expansion of the economy. Data for February showed
increases in sales of motor vehicles and other types of
goods that are purchased at retail, and housing starts
rose further last month. In the business sector, real
outlays for fixed capital still appear to be trending up.
The labor market reports for February provided
additional evidence that the economy is moving past
the disruptions that had slowed it in previous months.
Payroll employment surged in February, more than
reversing the losses of January, and the unemployment rate, after having ticked up in January, dropped
back last month. It is possible that the February data
may have exaggerated the strength of the labor market to some extent, as we have not seen a similar
degree of strength in other labor market indicators,
such as initial claims for unemployment insurance.
But even so, the current economic expansion seems
to have exhibited staying power. The strike that has
recently affected the motor vehicle industry is likely
to result in additional volatility over the near term,
but like the disruptions of this past winter, it should
not have a great impact on underlying trends in the
economy.
The most recent reports on inflation also have been
reasonably encouraging. Price increases at the consumer level have been moderate, on average, in the
early part of 1996, and the twelve-month change in
the consumer price index has remained near recent
lows. In addition, producer prices have been well
behaved early this year; the prices of finished goods
changed little over the first two months of the year,
and materials prices in the producer price index
continued to edge down. While monetary policy, as
always, will need to be alert to inflation risks as we
move forward, the recent economic data suggest that
the economy should be able to continue operating at a
high level of resource utilization, sustaining growth
I appreciate the opportunity to appear before this
committee once again. As you know, I discussed
current economic conditions and the outlook rather
extensively in appearances before House and Senate
Banking committees just over a month ago. Today, I
would like to provide a brief update of comments that
I made then and reiterate my views on some key
issues that are important for our nation's economic
prospects over the medium term.
A month ago, the economy clearly had been perceived as soft over the latter part of 1995 and the
early weeks of 1996. There were uncertainties, however, about both the factors that might have given rise
to the softness in activity and the degree to which that
softness might persist.
Although not all of the uncertainties have been
resolved, recent data have confirmed the expectation
that a good bit of the economic sluggishness of late
1995 was related to inventory investment. The efforts
of businesses to reestablish more desirable relationships between their holdings of inventories and their
actual and prospective levels of sales held down
production. Toward the end of last year, the inventory
adjustments reached a point at which stocks actually
were being reduced in the aggregate. Although January, with its unusually severe weather, apparently
resulted in goods being bottled up for a time in some
parts of the economy, the underlying picture, as best
we can discern, seems to be one in which much, but
perhaps not all, of the needed inventory correction
already has been accomplished.
Ultimately, of course, the inventories that businesses want to hold will depend on the growth of
finai demand. At present, there are some factors, such
as high consumer debt levels, that still may be work
Statements to the Congress
without risking a reversal of progress that has been
made toward the goal of price stability.
As I noted last month, structural forces may be
assisting us in this regard. Introduction of new technologies into a wide variety of production processes
is affecting production costs and business pricing
throughout the economy. Successive generations of
these new technologies are being quickly embodied
in the nation's capital stock, and older technologies
are, at a somewhat slower pace, being phased out. As
a consequence, the nation's capital stock is turning
over at an increasingly rapid pace, not primarily
because of physical deterioration but as a reflection
of technological and economic obsolescence.
A major challenge that we face during this period
of rapid technical change is that of altering, with
minimal disruption, not only the existing organizational structures and production methods of firms but,
even more important, the skills of the labor force. At
present, the more rapid advance of information and
communications technology and the associated acceleration in the turnover of the capital stock are being
mirrored in a brisk restructuring of firms. In line with
their adoption of new organizational structures and
technologies, many enterprises are finding that their
needs for various forms of labor are evolving just
as quickly. In some cases, job skills that were adequate only five years ago are no longer as relevant.
Partly for that reason, most corporate restructurings
have involved a significant number of permanent
dismissals.
It would be neither feasible nor desirable to try to
restrain the technical forces that lie behind the huge
structural changes that are playing themselves out in
the business world and in the workplace. But we can
take steps that will help ease the transition between
the old and the new. Firms and employees alike need
to recognize that obtaining the potential rewards of
the new technologies in the years ahead will require a
renewed commitment to effective education and
training, especially on-the-job training. Such a commitment is essential if we are to prevent the disruptions to lives and to the nation's capacity to produce
that arise from mismatches between jobs and workers. We need to improve the preparation for the job
market our schools do, but even better schools are
unlikely to be able to provide adequate skills to
support a lifetime of work. Indeed, ensuring that our
labor force has the ongoing education and training
necessary to compete in an increasingly sophisticated
world economy is a critical task for the years ahead.
405
Fortunately, economic successes of the past decade
or so have put us in a better position to meet the
challenges that remain. We have made significant and
fundamental gains in macroeconomic performance in
recent years that enhance the prospects for maximum
sustainable economic growth. Inflation, as measured
by the consumer price index, has been gradually
reduced from a peak of more than 13 percent in 1979
to about 2Vi percent last year. Lower rates of inflation
have brought a variety of benefits to the economy,
including lower long-term interest rates, a sense of
greater economic stability, an improved environment
for household and business planning, and more
robust investment in capital expenditures. Hopefully,
the years ahead will see further progress against
inflation and the eventual achievement of price
stability.
We have also made considerable progress on the
fiscal front. Over the past ten years and especially
since 1993, our elected political leaders, through
sometimes prolonged and even painful negotiations,
have been successful in reaching several agreements
that have significantly narrowed the budget deficit.
But more remains to be done. As I have emphasized
many times, lower budget deficits are the surest and
most direct way to increase national saving. Higher
national saving would help to reduce real interest
rates further, promoting more rapid accumulation of
productive capital embodying recent technological
advances. Agreement is widely shared that attaining
a higher national saving rate quite soon is crucial,
particularly in view of the anticipated shift in the
nation's demographics in the first few decades of the
next century. As recent events in financial markets
seem to have demonstrated, delay in taking meaningful action on the budget comes at a cost. Although the
backup of long-term interest rates this year surely has
been in large part a reflection of an economy on
firmer footing than many market participants had
thought, long-term rates also have been affected by
perceptions in the market that priorities may be shifting away from deficit reduction.
Lower inflation and reduced budget deficits will by
no means solve all of the economic problems we
face. But the achievement of price stability and federal budget balance or surplus will provide the best
possible macroeconomic climate in which the nation
can address other economic challenges, including
those that arise as side effects of the otherwise beneficial and highly desirable process of technological
advance.
406
Federal Reserve Bulletin • May 1996
Statement of the Board of Governors of the Federal
Reserve System with Regard to Coverage by Regulation E of Electronic Benefit Transfers, submitted
for the record to the Committee on Banking and
Financial Services, U.S. House of Representatives,
March 27, 1996
The Board has been asked to comment on its position
with regard to the coverage under the Electronic
Fund Transfer Act (EFTA), and the Board's Regulation E, of electronic benefit transfer (EBT) programs.
Government benefits that are delivered electronically
include food stamps, Aid to Families with Dependent
Children, and social security benefits. Under amendments to Regulation E that the Board adopted in
February 1994, such EBT programs will be subject to
modified Regulation E requirements scheduled to
take effect on a mandatory basis on March 1, 1997
(see attached February 24, 1994 notice).1
The Board adopted the amendments covering EBT
programs pursuant to its authority under 904(c) and
(d) of the EFTA. Section 904(c) provides that the
rules issued by the Board "may contain such classifications, differentiations, or other provisions . . . as in
the judgment of the Board are necessary or proper to
effectuate the purposes of this title, [or] to prevent
circumvention or evasion thereof...." Section 904(d)
provides that if EFT services "are made available to
consumers by a person other than a financial institution holding a consumer's account, the Board shall
by regulation assure that the disclosures, protections,
responsibilities, and remedies created by this title are
made applicable to such persons and services." The
legislative history of the EFTA provides guidance on
the Board's authority to determine if particular services should be covered by the act. A Senate Banking
Committee report, in discussing section 904(c), stated
that "since no one can foresee EFT developments in
the future, regulations would keep pace with new
services and assure that the act's basic protections
continue to apply." (Senate Report 915, 95 Cong.,
2 Sess. (GPO, 1978)).
In adopting the amendments, the Board noted its
belief that the strong similarity of EBT systems and
other EFT services, the act's legislative history, and
the language of the EFTA and Regulation E supported coverage of EBT programs under the act and
regulation. The Board stated that, from a recipient's
viewpoint, an EBT system functions much the same
1. The attachment to this statement is available from Publications
Services, Mail Stop 127, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
as if the recipient had an ordinary checking account
with direct deposits of government benefits and with
automated teller machine and point of sale service
available to access the benefits and that all consumers
using EFT services should receive substantially the
same protection under the EFTA and Regulation E,
absent a showing that compliance costs outweigh the
need for consumer protections. The Board noted that
it recognized that benefit program agencies were
concerned about the operational and cost impacts of
coverage, specifically in the areas of liability for
unauthorized transfers and error resolution, but
believed that the cost data presented to support
exemptions in these areas were not definitive. In
response to concerns expressed by the states about
the potential impact of Regulation E on EBT programs and at the request of the Federal Electronic
Benefits Task Force, which represents all the major
federal agencies with benefit programs, the Board
delayed the date of mandatory compliance with the
final rule for a three year period—to March 1,
1997—so that states could continue to explore opportunities for provision of services through EBT.
Various bills relating to the status of EBT programs under the EFTA have been introduced in the
Congress. H.R.4, the "Personal Responsibility and
Work Opportunity Act of 1995," which was passed
by the Congress and vetoed by the President, contains provisions to exempt EBT programs that distribute needs-tested benefits and are established or
administered by states or localities. After careful
weighing of congressional intent, consumer rights
and the concerns about the impact of Regulation E
coverage on development of EBT systems, the Board
believes that coverage of EBT programs is required
under the law as it currently exists. The Board recognizes that the Congress may well want to reexamine
the issues regarding the scope of EFTA coverage in
light of developments since its enactment in 1978 and
to balance competing objectives in light of changing
national priorities. In particular, the Board believes it
would be useful for the Congress to address whether
or not EBT programs should be exempted from the
EFTA. However, if an exemption is limited to particular categories of EBT programs—or to EBT programs administered at the state and local level as may
be the case under H.R.4 and similar proposals—
varying rules for different government benefit programs would result. This could make it difficult to
implement the multipurpose, one-card, unified
national delivery system envisioned by the Federal
Electronic Benefits Transfer Task Force, established
in response to Vice President Gore's 1993 Report of
the National Performance Review.
•
407
Announcements
MEETING
OF THE CONSUMER
ADVISORY
COUNCIL
The Federal Reserve Board announced on March 8,
1996, that the Consumer Advisory Council would
meet on Thursday, March 28, in a session open to the
public. The council's function is to advise the Board
on the exercise of the Board's responsibilities under
the Consumer Credit Protection Act and on other
matters on which the Board seeks its advice.
APPROVAL
OF A VOLUNTARY
CHECK-FRAUD
SURVEY
The Federal Reserve Board on March 13, 1996, approved conducting a one-time, voluntary check-fraud
survey.
The responses to the survey will help the Board to
fulfill the congressional mandate to accomplish the
following:
JOINT AMENDMENT
TO A
RECORDKEEPING
RULE IN ACCORDANCE
WITH THE BANK
SECRECY
ACT
The Federal Reserve Board and the Department of
the Treasury on March 26, 1996, jointly issued
amendments to their rule that requires enhanced
recordkeeping related to certain funds transfers by
financial institutions, in accordance with the Bank
Secrecy Act.
The amendments revise the rule's definitions and
make technical conforming changes to the substantive provisions of the rule to conform the definitions
of the parties to an international funds transfer to
their meanings under Article 4A of the Uniform
Commercial Code. These changes are intended to
reduce the confusion of banks and nonbank financial
institutions as to the applicability of the recordkeeping rule and to reduce the cost of complying with the
rule's requirements.
The Board and the Treasury have also deferred the
effective date of the recordkeeping rule from April 1,
1996, to May 28, 1996. In addition, the Board
has deferred the effective date of subpart B of Regulation S (Reimbursement to Financial Institutions for
Assembling or Providing Financial Records), which
cross-references the recordkeeping requirements.
• Determine whether there is a pattern of significant increases in losses related to check fraud at
depository institutions attributable to the provisions
of the Expedited Funds Availability Act (EFAA)
• Consider whether an extension by one day of the
period between the deposit of a local check and the
availability of funds for withdrawal would be effective in reducing the volume of losses related to check
fraud
• Make recommendations for legislative actions.
APPROVAL OF FINAL REVISIONS
TO
THE OFFICIAL STAFF
COMMENTARY
TO REGULATION
Z
The survey forms were mailed to a random sample
of approximately 5,200 depository institutions and
requested data on check-fraud losses for the period
January 1, 1995, through December 31, 1995. The
data obtained from all respondents will be combined
to provide an estimate of total check-fraud losses in
the banking industry.
To provide comprehensive information to the Congress, the Board encouraged all institutions receiving
the survey to participate, even if they incurred no
losses due to check fraud during 1995. Completed
survey questionnaires were due on April 12, 1996.
The Federal Reserve Board on March 28, 1996, published final revisions to its official staff commentary
to Regulation Z (Truth in Lending).
The changes provide guidance mainly on issues
relating to reverse mortgages and mortgages bearing
rates above a certain percentage or fees above a
certain amount. The update also addresses issues of
general interest, such as a card issuer's responsibilities when a cardholder asserts a claim or defense
relating to a merchant dispute.
The final rule was effective April 1, 1996; however, compliance is optional until October 1, 1996.
408
Federal Reserve Bulletin •
May 1996
PROPOSED ACTION
The Federal Reserve Board along with the Office of
the Comptroller of the Currency and the Federal
Deposit Insurance Corporation on March 7, 1996,
requested comment on a proposal to amend an outstanding proposal to incorporate a measure for market risk into the risk-based capital guidelines for
banks and bank holding companies (banking organizations), which was issued in July 1995. Comments
were requested by April 8, 1996.
ESTABLISHMENT OF A FEDERAL RESERVE
HOME PAGE ON THE WORLD WIDE WEB
The Federal Reserve Board announced on March 25,
1996, that it had established a home page on the
World Wide Web to provide a wide variety of information to the general public. Initially, the Board's
home page (http://www.bog.frb.fed.us) provides the
following:
• An introductory statement of the role of the
Federal Reserve
• The text of Purposes and Functions, a book that
explains the mission and operations of the Federal
Reserve System
• A listing of Board publications and how to order
them
• An explanation of Board and System material
available through the U.S. Commerce Department
economic bulletin board
• A brief definition of each Federal Reserve
regulation
• Links to other Federal Reserve web sites operated by the Federal Reserve Banks of New York,
Philadelphia, Cleveland, Atlanta, Chicago, Minneapolis, St. Louis, and Dallas.
Other features will be added in the future. These
will include speeches and testimony of Board members, the minutes and schedule of meetings of the
Federal Open Market Committee, the Beige Book,
statistics gathered by the System including historical
data, press releases, banking matters including a listing of all applications received and actions taken, the
Federal Reserve Bulletin, and the Board's Annual
Report.
CHANGES IN BOARD STAFF
The Federal Reserve Board announced the retirement, effective April 1, 1996, of Anthony V. DiGioia,
Assistant Director in the Division of Human
Resources Management, after seventeen years of
service.
The Board also announced the retirement, effective
April 12, 1996, of Laura M. Homer, Assistant Director in the Division of Banking Supervision and Regulation, after nearly twenty-five years of service.
•
409
Minutes of the
Federal Open Market Committee Meeting
Held on January 30-31,1996
A meeting of the Federal Open Market Committee
was held in the offices of the Board of Governors of
the Federal Reserve System in Washington, D.C.,
starting on Tuesday, January 30, 1996, at 2:30 p.m.
and continuing on Wednesday, January 31, 1996, at
9:00 a.m.
Mr. Rosine,1 Senior Economist, Division of Research
and Statistics, Board of Governors
Mr. Reid,1 Economist, Division of Monetary Affairs,
Board of Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Present:
Mr. Greenspan, Chairman
Mr. McDonough, Vice Chairman
Mr. Boehne
Mr. Jordan
Mr. Kelley
Mr. Lindsey
Mr. McTeer
Ms. Phillips
Mr. Stern
Ms. Yellen
Mr. Beebe, Ms. Browne, Messrs. Davis, Dewald,
Goodfriend, and Hunter, Senior Vice Presidents,
Federal Reserve Banks of San Francisco, Boston,
Kansas City, St. Louis, Richmond, and Chicago
respectively
Mses. Krieger and Rosenbaum, Vice Presidents,
Federal Reserve Banks of New York and Atlanta
respectively
Messrs. Broaddus, Guynn, Moskow, and Parry,
Alternate Members of the Federal Open Market
Committee
Messrs. Hoenig, Melzer, and Ms. Minehan, Presidents
of the Federal Reserve Banks of Kansas City,
St. Louis, and Boston respectively
Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Mr. Coyne, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Prell, Economist
Mr. Truman, Economist
Messrs. Lang, Lindsey, Mishkin, Promisel, Rolnick,
Rosenblum, Siegman, Simpson, Sniderman, and
Stockton, Associate Economists
Mr. Fisher, Manager, System Open Market Account
Mr. Winn, Assistant to the Board, Office of Board
Members, Board of Governors
Mr. Ettin, Deputy Director, Division of Research and
Statistics, Board of Governors
Mr. Madigan, Associate Director, Division of
Monetary Affairs, Board of Governors
Mr. Slifman, Associate Director, Division of Research
and Statistics, Board of Governors
In the agenda for this meeting, it was reported that
advices of the election of the following members and
alternate members of the Federal Open Market Committee for the period commencing January 1, 1996,
and ending December 31, 1996, had been received
and that the named individuals had executed their
oaths of office.
The elected members and alternate members were
as follows:
William J. McDonough, President of the Federal Reserve
Bank of New York, with Ernest T. Patrikis, First Vice
President of the Federal Reserve Bank of New York,
as alternate;
Edward G. Boehne, President of the Federal Reserve Bank
of Philadelphia, with J. Alfred Broaddus, Jr., President of the Federal Reserve Bank of Richmond, as
alternate;
Jerry L. Jordan, President of the Federal Reserve Bank of
Cleveland, with Michael H. Moskow, President of the
Federal Reserve Bank of Chicago, as alternate;
Robert D. McTeer, President of the Federal Reserve Bank
of Dallas, with Jack Guynn, President of the Federal
Reserve Bank of Atlanta, as alternate;
Gary H. Stern, President of the Federal Reserve Bank of
Minneapolis, with Robert T. Parry, President of the
Federal Reserve Bank of San Francisco, as alternate.
1. Attended portions of meeting relating to the Committee's review
of the economic outlook and establishment of its monetary and debt
ranges for 1996.
410
Federal Reserve Bulletin • May 1996
By unanimous vote, the following officers of the
Federal Open Market Committee were elected to
serve until the election of their successors at the first
meeting of the Committee after December 31, 1996,
with the understanding that in the event of the discontinuance of their official connection with the Board of
Governors or with a Federal Reserve Bank, they
would cease to have any official connection with the
Federal Open Market Committee:
Alan Greenspan
William J. McDonough
Chairman
Vice Chairman
Donald L. Kohn
Normand R.V. Bernard
Joseph R. Coyne
Gary P. Gillum
J. Virgil Mattingly, Jr.
Thomas C. Baxter, Jr.
Michael J. Prell
Edwin M. Truman
Secretary and Economist
Deputy Secretary
Assistant Secretary
Assistant Secretary
General Counsel
Deputy General Counsel
Economist
Economist
Richard W. Lang, David E. Lindsey, Frederic S. Mishkin,
Larry J. Promisel, Arthur J. Rolnick, Harvey Rosenblum, Charles J. Siegman, Thomas D. Simpson,
Mark S. Sniderman, and David J. Stockton, Associate
Economists
By unanimous vote, the Federal Reserve Bank of
New York was selected to execute transactions for
the System Open Market Account until the adjournment of the first meeting of the Committee after
December 31, 1996.
By unanimous vote, Peter R. Fisher was selected to
serve at the pleasure of the Committee as Manager,
System Open Market Account, on the understanding
that his selection was subject to being satisfactory to
the Federal Reserve Bank of New York.
Secretary's note: Advice subsequently was received
that the selection of Mr. Fisher as Manager was satisfactory
to the board of directors of the Federal Reserve Bank of
New York.
By unanimous vote, the Authorization for Domestic Open Market Operations shown below was
reaffirmed.
AUTHORIZATION
FOR DOMESTIC
MARKET
OPERATIONS
OPEN
Reaffirmed January 30, 1996
1. The Federal Open Market Committee authorizes and
directs the Federal Reserve Bank of New York, to the
extent necessary to carry out the most recent domestic
policy directive adopted at a meeting of the Committee:
(a) To buy or sell U.S. Government securities, including securities of the Federal Financing Bank, and securities
that are direct obligations of, or fully guaranteed as to
principal and interest by, any agency of the United States in
the open market, from or to securities dealers and foreign
and international accounts maintained at the Federal
Reserve Bank of New York, on a cash, regular, or deferred
delivery basis, for the System Open Market Account at
market prices, and, for such Account, to exchange maturing U.S. Government and Federal agency securities with
the Treasury or the individual agencies or to allow them to
mature without replacement; provided that the aggregate
amount of U.S. Government and Federal agency securities
held in such Account (including forward commitments) at
the close of business on the day of a meeting of the
Committee at which action is taken with respect to a
domestic policy directive shall not be increased or
decreased by more than $8.0 billion during the period
commencing with the opening of business on the day
following such meeting and ending with the close of business on the day of the next such meeting;
(b) When appropriate, to buy or sell in the open
market, from or to acceptance dealers and foreign accounts
maintained at the Federal Reserve Bank of New York, on a
cash, regular, or deferred delivery basis, for the account of
the Federal Reserve Bank of New York at market discount
rates, prime bankers acceptances with maturities of up to
nine months at the time of acceptance that (1) arise out of
the current shipment of goods between countries or within
the United States, or (2) arise out of the storage within the
United States of goods under contract of sale or expected
to move into the channels of trade within a reasonable time
and that are secured throughout their life by a warehouse
receipt or similar document conveying title to the underlying goods; provided that the aggregate amount of bankers acceptances held at any one time shall not exceed
$100 million;
(c) To buy U.S. Government securities, obligations
that are direct obligations of, or fully guaranteed as to
principal and interest by, any agency of the United States,
and prime bankers acceptances of the types authorized for
purchase under 1(b) above, from dealers for the account of
the Federal Reserve Bank of New York under agreements
for repurchase of such securities, obligations, or acceptances in 15 calendar days or less, at rates that, unless
otherwise expressly authorized by the Committee, shall be
determined by competitive bidding, after applying reasonable limitations on the volume of agreements with individual dealers; provided that in the event Government
securities or agency issues covered by any such agreement
are not repurchased by the dealer pursuant to the agreement or a renewal thereof, they shall be sold in the market
or transferred to the System Open Market Account; and
provided further that in the event bankers acceptances
covered by any such agreement are not repurchased by the
seller, they shall continue to be held by the Federal Reserve
Bank or shall be sold in the open market.
2. In order to ensure the effective conduct of open
market operations, the Federal Open Market Committee
authorizes and directs the Federal Reserve Banks to lend
U.S. Government securities held in the System Open Market Account to Government securities dealers and to banks
participating in Government securities clearing arrangements conducted through a Federal Reserve Bank, under
such instructions as the Committee may specify from time
to time.
Minutes
3. In order to ensure the effective conduct of open
market operations, while assisting in the provision of shortterm investments for foreign and international accounts
maintained at the Federal Reserve Bank of New York, the
Federal Open Market Committee authorizes and directs the
Federal Reserve Bank of New York (a) for System Open
Market Account, to sell U.S. Government securities to such
foreign and international accounts on the bases set forth in
paragraph 1(a) under agreements providing for the resale
by such accounts of those securities within 15 calendar
days on terms comparable to those available on such
transactions in the market; and (b) for New York Bank
account, when appropriate, to undertake with dealers, subject to the conditions imposed on purchases and sales of
securities in paragraph 1(c), repurchase agreements in U.S.
Government and agency securities, and to arrange corresponding sale and repurchase agreements between its own
account and foreign and international accounts maintained
at the Bank. Transactions undertaken with such accounts
under the provisions of this paragraph may provide for a
service fee when appropriate.
By unanimous vote, the Authorization for Foreign
Currency Operations shown below was reaffirmed.
AUTHORIZATION
OPERATIONS
Reaffirmed
FOR FOREIGN
CURRENCY
January 30, 1996
1. The Federal Open Market Committee authorizes and
directs the Federal Reserve Bank of New York, for System
Open Market Account, to the extent necessary to carry out
the Committee's foreign currency directive and express
authorizations by the Committee pursuant thereto, and in
conformity with such procedural instructions as the Committee may issue from time to time:
A. To purchase and sell the following foreign currencies in the form of cable transfers through spot or forward
transactions on the open market at home and abroad,
including transactions with the U.S. Treasury, with the U.S.
Exchange Stabilization Fund established by Section 10 of
the Gold Reserve Act of 1934, with foreign monetary
authorities, with the Bank for International Settlements,
and with other international financial institutions:
Austrian schillings
Belgian francs
Canadian dollars
Danish kroner
Pounds sterling
French francs
German marks
Italian lire
Japanese yen
Mexican pesos
Netherlands guilders
Norwegian kroner
Swedish kronor
Swiss francs
B. To hold balances of, and to have outstanding forward contracts to receive or to deliver, the foreign currencies listed in paragraph A above.
C. To draw foreign currencies and to permit foreign
banks to draw dollars under the reciprocal currency
arrangements listed in paragraph 2 below, provided that
drawings by either party to any such arrangement shall be
fully liquidated within 12 months after any amount outstanding at that time was first drawn, unless the Commit
of the Federal
Open Market
Committee
411
tee, because of exceptional circumstances, specifically
authorizes a delay.
D. To maintain an overall open position in all foreign
currencies not exceeding $25.0 billion. For this purpose,
the overall open position in all foreign currencies is defined
as the sum (disregarding signs) of net positions in individual currencies. The net position in a single foreign
currency is defined as holdings of balances in that currency, plus outstanding contracts for future receipt, minus
outstanding contracts for future delivery of that currency,
i.e., as the sum of these elements with due regard to sign.
2. The Federal Open Market Committee directs the Federal Reserve Bank of New York to maintain reciprocal
currency arrangements ("swap" arrangements) for the System Open Market Account for periods up to a maximum of
12 months with the following foreign banks, which are
among those designated by the Board of Governors of the
Federal Reserve System under Section 214.5 of Regulation
N, Relations with Foreign Banks and Bankers, and with the
approval of the Committee to renew such arrangements on
maturity:
Foreign bank
Amount of arrangement
(millions of dollars
equivalent)
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
German Federal Bank
Bank of Italy
Bank of Japan
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
3,000
500
250
300
4,000
Bank for International Settlements:
Dollars against Swiss francs
Dollars against authorized European
currencies other than Swiss francs
1,250
600
Any changes in the terms of existing swap arrangements, and the proposed terms of any new arrangements
that may be authorized, shall be referred for review and
approval to the Committee.
3. All transactions in foreign currencies undertaken
under paragraph l.A. above shall, unless otherwise
expressly authorized by the Committee, be at prevailing
market rates. For the purpose of providing an investment
return on System holdings of foreign currencies, or for the
purpose of adjusting interest rates paid or received in
connection with swap drawings, transactions with foreign
central banks may be undertaken at non-market exchange
rates.
4. It shall be the normal practice to arrange with foreign
central banks for the coordination of foreign currency
transactions. In making operating arrangements with foreign central banks on System holdings of foreign currencies, the Federal Reserve Bank of New York shall not
commit itself to maintain any specific balance, unless
authorized by the Federal Open Market Committee. Any
agreements or understandings concerning the administration of the accounts maintained by the Federal Reserve
Bank of New York with the foreign banks designated
by the Board of Governors under Section 214.5 of Regula-
412
Federal Reserve Bulletin • May 1996
tion N shall be referred for review and approval to the
Committee.
5. Foreign currency holdings shall be invested insofar
as practicable, considering needs for minimum working
balances. Such investments shall be in liquid form, and
generally have no more than 12 months remaining to
maturity. When appropriate in connection with arrangements to provide investment facilities for foreign currency
holdings, U.S. Government securities may be purchased
from foreign central banks under agreements for repurchase of such securities within 30 calendar days.
6. All operations undertaken pursuant to the preceding
paragraphs shall be reported promptly to the Foreign Currency Subcommittee and the Committee. The Foreign Currency Subcommittee consists of the Chairman and Vice
Chairman of the Committee, the Vice Chairman of the
Board of Governors, and such other member of the Board
as the Chairman may designate (or in the absence of
members of the Board serving on the Subcommittee, other
Board members designated by the Chairman as alternates,
and in the absence of the Vice Chairman of the Committee,
his alternate). Meetings of the Subcommittee shall be
called at the request of any member, or at the request of the
Manager, System Open Market Account ("Manager"), for
the purposes of reviewing recent or contemplated operations and of consulting with the Manager on other matters
relating to his responsibilities. At the request of any member of the Subcommittee, questions arising from such
reviews and consultations shall be referred for determination to the Federal Open Market Committee.
7. The Chairman is authorized:
A. With the approval of the Committee, to enter into
any needed agreement or understanding with the Secretary
of the Treasury about the division of responsibility for
foreign currency operations between the System and the
Treasury;
B. To keep the Secretary of the Treasury fully advised
concerning System foreign currency operations, and to
consult with the Secretary on policy matters relating to
foreign currency operations;
C. From time to time, to transmit appropriate reports
and information to the National Advisory Council on International Monetary and Financial Policies.
8. Staff officers of the Committee are authorized to
transmit pertinent information on System foreign currency operations to appropriate officials of the Treasury
Department.
9. All Federal Reserve Banks shall participate in the
foreign currency operations for System Account in accordance with paragraph 3 G ( l ) of the Board of Governors'
Statement of Procedure with Respect to Foreign Relationships of Federal Reserve Banks dated January 1, 1944.
By unanimous vote, the Foreign Currency Directive shown below was reaffirmed.
FOREIGN
Reaffirmed
CURRENCY
DIRECTIVE
January 30, 1996
1. System operations in foreign currencies shall generally be directed at countering disorderly market conditions,
provided that market exchange rates for the U.S. dollar
reflect actions and behavior consistent with the IMF
Article IV, Section 1.
2. To achieve this end the System shall:
A. Undertake spot and forward purchases and sales
of foreign exchange.
B. Maintain reciprocal currency ("swap") arrangements with selected foreign central banks and with the
Bank for International Settlements.
C. Cooperate in other respects with central banks
of other countries and with international monetary
institutions.
3. Transactions may also be undertaken:
A. To adjust System balances in light of probable
future needs for currencies.
B. To provide means for meeting System and Treasury commitments in particular currencies, and to facilitate
operations of the Exchange Stabilization Fund.
C. For such other purposes as may be expressly
authorized by the Committee.
4. System foreign currency operations shall be
conducted:
A. In close and continuous consultation and cooperation with the United States Treasury;
B. In cooperation, as appropriate, with foreign monetary authorities; and
C. In a manner consistent with the obligations of the
United States in the International Monetary Fund regarding
exchange arrangements under the IMF Article IV.
By unanimous vote, the Procedural Instructions
with Respect to Foreign Currency Operations shown
below were reaffirmed.
PROCEDURAL
FOREIGN
Reaffirmed
INSTRUCTIONS
CURRENCY
WITH RESPECT
TO
OPERATIONS
January 30, 1996
In conducting operations pursuant to the authorization
and direction of the Federal Open Market Committee as set
forth in the Authorization for Foreign Currency Operations
and the Foreign Currency Directive, the Federal Reserve
Bank of New York, through the Manager, System Open
Market Account ("Manager"), shall be guided by the
following procedural understandings with respect to consultations and clearances with the Committee, the Foreign
Currency Subcommittee, and the Chairman of the Committee. All operations undertaken pursuant to such clearances
shall be reported promptly to the Committee.
1. The Manager shall clear with the Subcommittee (or
with the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time
available):
A. Any operation that would result in a change in the
System's overall open position in foreign currencies
exceeding $300 million on any day or $600 million since
the most recent regular meeting of the Committee.
B. Any operation that would result in a change on
any day in the System's net position in a single foreign
currency exceeding $150 million, or $300 million when the
operation is associated with repayment of swap drawings.
Minutes of the Federal
C. Any operation that might generate a substantial
volume of trading in a particular currency by the System,
even though the change in the System's net position in that
currency might be less than the limits specified in l.B.
D. Any swap drawing proposed by a foreign bank not
exceeding the larger of (i) $200 million or (ii) 15 percent of
the size of the swap arrangement.
2. The Manager shall clear with the Committee (or with
the Subcommittee, if the Subcommittee believes that consultation with the full Committee is not feasible in the time
available, or with the Chairman, if the Chairman believes
that consultation with the Subcommittee is not feasible in
the time available):
A. Any operation that would result in a change in the
System's overall open position in foreign currencies
exceeding $1.5 billion since the most recent regular meeting of the Committee.
B. Any swap drawing proposed by a foreign bank
exceeding the larger of (i) $200 million or (ii) 15 percent of
the size of the swap arrangement.
3. The Manager shall also consult with the Subcommittee or the Chairman about proposed swap drawings by the
System and about any operations that are not of a routine
character.
AGREEMENT
CURRENCIES
TO "WAREHOUSE"
FOREIGN
At its meeting on January 31-February 1, 1995, the
Committee had approved an increase from $5 billion
to $20 billion in the amount of eligible foreign currencies that the System was prepared to "warehouse"
for the Treasury and the Exchange Stabilization Fund
(ESF). The purpose of the warehousing facility,
which has been in place for many years, is to supplement the U.S. dollar resources of the Treasury and the
ESF for financing purchases of foreign currencies
and related international operations. The enlargement
of the warehousing agreement was intended to facilitate U.S. participation in the Multilateral Program to
Restore Financial Stability in Mexico, announced by
President Clinton on January 31, 1995, by warehousing up to $20 billion in German marks and Japanese
yen held by the Treasury through the ESF. The Committee had agreed that it would review each year the
need to maintain this level of warehousing authority
in light of the progress and requirements of the
program.
The Treasury and the Exchange Stabilization Fund
had made no use of the warehousing facility over the
past year. Nevertheless, consistent with Federal
Reserve support for the program of assistance to
Mexico, the members agreed that it was appropriate
to postpone consideration of an adjustment in the
overall size of the facility at least until the end of the
disbursement phase of the Mexican program cur
Open Market
Committee
413
rently scheduled for August 1996. Accordingly, the
Committee reaffirmed the warehousing authority by
unanimous vote.
By unanimous vote, the Program for Security of
FOMC Information was amended to conform it to the
treatment of transcripts of FOMC meetings and the
procedures that the Committee had been following
for some time in regard to redactions of confidential
information in transcripts and other documents that
are released to the public after five years. In addition,
the Committee agreed to amend the program so that
the automatic extension of Federal Reserve staff
access to confidential material after six months could
be suspended for certain particularly sensitive
documents.
On January 23, 1996, the continuing rules, resolutions, and other instruments of the Committee had
been distributed with the advice that, in accordance
with procedures approved by the Committee, they
were being called to the Committee's attention before
the January 30-31 organization meeting to give members an opportunity to raise any questions they might
have concerning them. Members were asked to indicate if they wished to have any of the instruments in
question placed on the agenda for consideration at
this meeting, and no requests for such consideration
were received.
By unanimous vote, the minutes of the meeting of
the Federal Open Market Committee held on December 19, 1995, were approved.
The Manager of the System Open Market Account
reported on recent developments in foreign exchange
markets. He indicated that the swap line drawing by
the Bank of Mexico had been repaid in full on
January 29, 1996. The Committee ratified that transaction by unanimous vote.
The Manager also reported on recent developments
in domestic financial markets and on System open
market transactions in U.S. government securities and
federal agency obligations during the period December 19, 1995, through January 30, 1996. By unanimous vote, the Committee ratified these transactions.
The Committee then turned to a discussion of the
economic and financial outlook, the ranges for the
growth of money and debt in 1996, and the implementation of monetary policy over the intermeeting
period ahead. A summary of the economic and financial information available at the time of the meeting
and of the Committee's discussion is provided below,
followed by the domestic policy directive that was
approved by the Committee and issued to the Federal
Reserve Bank of New York.
Only a limited amount of new information was
available for this meeting because of delays in gov-
414
Federal Reserve Bulletin • May 1996
ernment releases; that which was available, along
with anecdotal commentary, suggested that the economy had been growing relatively slowly in recent
months. Consumer spending had expanded modestly
on balance, growth in business investment in capital
goods appeared to have slackened somewhat recently,
and housing demand seemed to have leveled out.
Slower growth in final sales was leading to inventory
buildups in a few industries, and these buildups,
together with the disruptions from government shutdowns and severe weather, were having a restraining
effect on economic activity. The demand for labor
was still growing at a moderate pace, though, and the
unemployment rate remained relatively low. The
recent data on prices and wages had been mixed, but
there was no firm evidence of a change in underlying
inflation trends.
Nonfarm payroll employment continued to expand
moderately in December; the gain was in line with
the average monthly increase for 1995. Employment
in manufacturing, boosted by the settlement of a
strike at a major aircraft manufacturer, reversed the
declines of October and November. Construction
payrolls rose further in December, despite unfavorable weather in some parts of the country. Job growth
remained solid in much of the services industry,
although employment at personnel supply firms was
little changed. The civilian unemployment rate
remained at 5.6 percent in December.
Industrial production edged up in December and
for the fourth quarter as a whole advanced only
slightly; industrial activity remained sluggish in January according to the limited statistical information
that was available. In December, manufacturing output rose a bit in association with an increase in motor
vehicle assemblies and aircraft production. Elsewhere in manufacturing, the growth of output of
office and computing equipment slowed somewhat
from the rapid pace of previous months, and the
production of defense and space equipment and of
nondurable consumer goods registered sizable
declines. The output of utilities was boosted somewhat in December by the effect of colder-thanaverage temperatures on the demand for heating services. Utilization of total industrial capacity fell
slightly but remained at a moderately elevated level.
Retail sales continued to grow at a relatively modest rate in December, and the fourth-quarter increase
was considerably smaller than those of the previous
two quarters. In the fourth quarter, lower spending at
general merchandisers offset much of the sales gains
registered at automotive dealerships, furniture and
appliance stores, and building and supply outlets.
Consumer surveys indicated some deterioration in
consumer confidence in January. Recent indicators of
housing demand and activity were mixed. Sales of
new homes edged still lower in November (latest data
available), and sales of existing homes declined by a
larger amount in December than in November. However, housing starts rebounded in November from a
sizable October decline, and conditions in mortgage
markets remained quite favorable, led by a further
decline in rates.
The sparse statistical data available on business
fixed investment, along with anecdotal information,
suggested a moderation recently in the expansion of
business spending on capital goods, including some
slowing of investment in computers. Investment in
transportation equipment, however, apparently had
held up well in the fourth quarter. Incoming data on
construction contracts pointed to some slowing in the
growth of nonresidential building activity from a
relatively brisk pace during most of 1995.
The information available on business inventories
suggested that inventory imbalances might have
emerged in a few sectors in association with weakerthan-expected sales. Motor vehicle inventories were
at elevated levels compared with sales in late 1995,
and manufacturers responded by offering incentive
packages on new cars and trucks and by adjusting
downward their January production schedules. Data
on manufacturing and retail trade inventories for
November had been delayed, but published information on inventories held by wholesale distributors
indicated a decline in that month, reversing part
of October's sizable run-up. Much of the decline
occurred in nondurable goods, although machinery
distributors also reported a sizable liquidation. The
inventory-sales ratio for the wholesale trade sector
edged down in November but remained near the high
end of its range in recent years.
The nominal deficit on U.S. trade in goods and
services narrowed in October from its average rate
in the third quarter. The value of imports declined
more than the value of exports. Much of the contraction in imports reflected reductions in oil and automotive products that more than offset another strong
rise in computer goods. For exports, an advance in
machinery exports to record levels was outweighed
by a reduction in shipments of agricultural and automotive products. Available data on economic activity
in the major foreign industrial countries suggested
that the pace of expansion in Europe had slowed
further on average while growth in Japan had picked
up a little.
Recent data suggested little change in underlying
inflation trends. Consumer prices increased slightly
in December after having been unchanged in Novem-
Minutes of the Federal Open Market Committee
ber; food prices were quiescent over the two-month
period while energy prices rose on balance, with a
December rebound more than offsetting a sizable
November drop. Excluding food and energy items,
consumer prices were up modestly over the
November-December period and for all of 1995
advanced slightly more than in 1994. Producer prices
of finished goods were up considerably in November
and December after having risen slowly in earlier
months; in large part, the price increases late in the
year reflected sharp upward movements in both finished foods and finished energy prices. For 1995,
producer prices of finished goods other than food and
energy rose at a subdued pace, though somewhat
more than in 1994. Commodity prices had been
mixed recently after having trended down earlier.
Average hourly earnings of production and nonsupervisory workers increased somewhat in December
after having been unchanged in November. Increases
in average hourly earnings had been trending up over
the past several years.
At its meeting on December 19,1995, the Committee adopted a directive that called for some slight
easing in the degree of pressure on reserve positions,
which was expected to result in a decline in the
federal funds rate from around 53/4 percent to around
5Vz percent. The directive did not include a presumption about the likely direction of any adjustments to
policy during the intermeeting period. Accordingly,
the directive stated that in the context of the Committee's long-run objectives for price stability and
sustainable economic growth, and giving careful
consideration to economic, financial, and monetary
developments, slightly greater reserve restraint or
slightly lesser reserve restraint would be acceptable
during the intermeeting period. The reserve conditions associated with this directive were expected to
be consistent with moderate growth of M2 and M3
over coming months.
After the meeting, open market operations were
directed initially toward implementing the slight easing in the degree of reserve pressure that had been
adopted by the Committee and thereafter toward
maintaining this new reserve posture. Operations
were complicated by large swings in reserve
demands associated with year-end pressures and the
adverse effects of unusually severe winter weather on
check clearings. Although the federal funds rate
exhibited somewhat greater volatility than normal
over the period, it nonetheless averaged close to the
expected level of 5V2 percent. The occasional periods
of firmness in reserve market conditions contributed
to higher adjustment plus seasonal borrowing, on
average, over the period.
415
Most market interest rates had declined somewhat
further over the period after the December 19 meeting. Rates moved lower immediately after the policy
easing action, and most fell still more on balance
over the remainder of the intermeeting interval in
response to incoming information about the economy
and the prospects for fiscal policy, at least in the near
term. Both were seen as suggesting slower economic
expansion for a time and an increased likelihood of
additional easing of monetary policy in coming
months. With bond yields down on balance, and
occasionally approaching two-year lows, major
indexes of equity prices advanced sharply further.
The trade-weighted value of the dollar in terms of
the other G-10 currencies continued to rise over the
intermeeting period despite the decline in U.S. interest rates. The dollar's upward movement against the
German mark and other European currencies was
associated with increasing indications of further
weakening of economic expansion in key European
countries and greater declines in interest rates in
those countries than in the United States. The dollar's
appreciation relative to the Japanese yen appeared to
be related in part to a narrowing of Japan's trade and
current account surpluses. The dollar was unchanged
on balance against the Canadian dollar, while the
Mexican peso rose considerably in relation to the
dollar.
Growth of M2 and M3 strengthened in December
and January. The pickup in M2 growth partly
reflected the effect of recent declines in short-term
interest rates; those declines had made money market
instruments less attractive relative to household savings accounts in M2, whose offering rates tend to be
adjusted downward with a considerable lag. In addition, the flattening of the term structure of interest
rates had lessened the comparative attractiveness of
bond mutual funds, which had continued to experience only light inflows. Faster growth of M3 in
December and January was associated with both the
pickup in M2 expansion and the issuance of additional large time deposits to help finance a noticeable
step-up in bank loan demand in January. The expansion of M2 from the fourth quarter of 1994 to the
fourth quarter of 1995 was in the upper half of the
Committee's annual range, and M3 grew at the upper
end of its range. Growth of total domestic nonfinancial debt had been moderate in recent months, and for
the year was near the midpoint of this aggregate's
monitoring range.
The staff forecast prepared for this meeting suggested that economic activity would expand at a
relatively slow pace over the near term. This forecast
was not materially different from that prepared for
416
Federal Reserve Bulletin • May 1996
the December meeting, except for a slightly weaker
outlook for the current quarter that was related in part
to an inventory correction and the effects of unusually severe winter weather on spending and output.
Over the remainder of the two-year forecast horizon,
the economy was expected to grow generally along
its estimated potential. Consumer spending was
anticipated to keep pace with the growth of disposable income; concerns about job security remained
and consumer debt burdens had risen further, but the
still-ample availability of credit and the substantial
rise in the value of household equity holdings would
support additional increases in consumption. The further decline in mortgage rates recently from alreadyfavorable levels would help to sustain homebuilding
activity at a relatively high level. With sales and
profits projected to grow more slowly, and with utilization of existing capacity having eased considerably,
business investment in new equipment and structures
was expected to expand at a more moderate rate. In
light of the recent strengthening of the dollar, the
external sector was expected to exert a small restraining influence on real activity over the projection
period as a whole. Much uncertainty still surrounded
the fiscal outlook, but the recent impasse in the
budget negotiations between the Administration and
the Congress suggested a lower degree of fiscal
restraint over coming years than had been assumed in
the previous forecast. Given the projected outlook,
rates of utilization of labor and capital resources and
of inflation were not expected to change materially.
In the Committee's discussion of current and prospective economic activity, members noted a number
of temporary factors that were retarding the expansion. The weakness in business activity this winter
was to some extent the result of the partial shutdown
of the federal government and the severe storms in a
number of regions; both clearly were transitory influences on the economy. Growth of economic activity
also was being constrained by production cutbacks
stemming from efforts to bring stocks into better
alignment with disappointing sales in a number of
industries. Even so, in the absence of major overhangs in inventories of business equipment and consumer durables, and given favorable conditions in
financial markets, members believed that a resumption of moderate, sustainable growth after a relatively
brief period of weakness was the most likely outlook
for the economy. At the same time, many observed
that the risks to such an outcome did not seem
balanced. A number of concerns, including the extent
of the damping effects of high debt loads and employment uncertainty on consumption and questions about
the sources of further export growth, suggested the
possibility of sluggish expansion, while possible
developments on the upside were more difficult to
identify. With resource use unlikely to vary appreciably, the members generally expected no significant
change in the underlying inflation picture over the
year ahead. The recent performance of inflation had
some encouraging aspects, and the odds on greater
price pressures seemed relatively small at this time.
In keeping with the practice at meetings when the
Committee establishes its long-run ranges for growth
of the money and debt aggregates, the members of
the Committee and the Federal Reserve Bank presidents not currently serving as members had prepared
individual projections of economic activity, the rate
of unemployment, and inflation for the year 1996.
Measured on the basis of chain-weighted indexes, the
forecasts of the growth in real GDP had a central
tendency of 2 to VU percent and a full range of IV2 to
2Vi percent for the period from the fourth quarter of
1995 to the fourth quarter of 1996. The members and
nonmember presidents generally anticipated that economic expansion in line with their forecasts would be
associated with employment growth close to that of
the labor force. Accordingly, their forecasts of the
civilian rate of unemployment in the fourth quarter of
1996 were near the current level, with a central
tendency of 5VI to 53/4 percent and a full range of
5VI to 6 percent. Projections of the rate of inflation,
as reflected in the consumer price index, had a central
tendency of 23/4 to 3 percent; that central tendency
was on the high side of the outcome for 1995—when
the rise in the index was held down by damped
increases in food prices and declines in energy
prices—but a few of the forecasts anticipated a
slightly lower rate of inflation.
In their review of developments across the nation,
the Federal Reserve Bank presidents reported modest
growth in most major areas of the country. Many
referred, however, to an admixture of strengths and
weaknesses in their local economies, and a majority
observed that on balance growth in regional business
activity appeared to have slowed in the last few
months. In keeping with the data available for the
nation as a whole, the slowing seemed to be concentrated in manufacturing and especially at firms producing motor vehicles and parts. Some presidents
referred to relatively negative, or at least cautious,
sentiment among many of their business contacts.
Much of the recent softening in economic activity
appeared to arise from production cutbacks in various
sectors of the economy in which involuntary accumulation of inventories seemed to have occurred as a
result of weaker sales trends in the past few months.
The members expected this inventory adjustment pro-
Minutes of the Federal Open Market Committee
cess to have a relatively pronounced effect on production and overall business activity in the current quarter and perhaps to some extent in the second. While
a greater-than-expected inventory adjustment with
spreading effects through the economy could not be
ruled out, the underlying strength of demand was
likely to be sufficient to restore and sustain moderate
growth in overall economic activity as the current
inventory and production adjustments subsided.
With regard to consumer spending, members
referred to overall indications of lackluster retail sales
during the holiday season and into January. The
anecdotal commentary on retail sales attributed some
of the recent weakness in a number of areas to the
clearly temporary effects of unusually severe winter
weather and the partial shutdown of the federal government. The members anticipated that moderate
growth in retail sales would resume, though some felt
that the consumer sector might remain vulnerable on
the downside. The consumer spending outlook was
complicated by a number of crosscurrents. Negative
factors cited by the members included ongoing
concerns about job security that were being sustained by a continuing stream of workforce reduction announcements by major business concerns,
increased consumer debt burdens that were showing
up in rising delinquency rates on some types of loans,
and the apparent satisfaction of much of the earlier
pent-up demand for consumer durables. On the positive side, reduced interest rates, still readily available
credit, and the accumulation of financial wealth from
the sharp rise in stock and bond prices were seen
as likely to support continuing gains in consumer
spending.
Further increases in business fixed investment were
viewed as a likely prospect for the year ahead, though
the growth of such investment probably would be
well below the strong pace experienced earlier in the
current cyclical expansion. Anecdotal reports indicated continuing strength in nonresidential construction in some parts of the country, but declining rates
of capacity utilization augured reduced growth going
forward. The expansion of investment in producers'
durable equipment also was expected to slow, but
from a pace that had seemed unsustainable. While
appreciable further growth could be expected in
expenditures for high-tech equipment as business
firms continued to focus on improving the efficiency
of their operations in a highly competitive environment, spending for other types of equipment was
likely to be sluggish. Members noted in particular the
prospects for weaker business spending for motor
vehicles, especially for heavy trucks. However, the
fundamental determinants of investment in business
417
equipment, including the reduced cost of financing
such investment, remained positive and this sector of
the economy should continue to provide considerable
impetus to the expansion.
The members also viewed the considerable decline
that had occurred in mortgage interest rates and the
ample availability of housing finance as key factors
in their forecasts of sustained residential construction
at relatively high levels. Adverse weather conditions
appeared to have retarded homebuilding activity in a
number of areas in recent weeks, but several members commented that underlying trends in housing
demand were favorable and that residential construction had remained relatively strong in several parts of
the country.
The outlook for fiscal policy was uncertain, especially with regard to whether longer-term spending
and taxation measures would be enacted to implement the goal of a balanced federal budget by the
year 2002. For the year immediately ahead, however,
the members continued to anticipate considerable
restraint in federal spending, partly as a byproduct of
the current budget debate between the Congress and
the Administration. With regard to the external sector
of the economy, prospects for economic growth in
major trading partners—led by developments in
Europe—appeared to have weakened, and the recent
appreciation of the dollar in the foreign exchange
markets also might tend to damp net exports. Consequently, several members saw downside risks in the
foreign trade sector over the year ahead.
The members anticipated that inflation would
remain contained in 1996, but they did not expect
significant progress toward more stable prices. They
referred to crosscurrents bearing on the outlook for
wages and prices in the year ahead. Factors pointing
to potentially higher inflation included increased
pressures on food prices stemming from disappointing harvests in some areas and relatively low grain
supplies. More generally, resource utilization was
expected to remain high and greater pressures could
emerge in labor and product markets. Members noted
that one broad measure of wages had picked up and
that there was a small rise in the number of anecdotal
reports indicating that labor shortages were contributing to higher wages in some parts of the country. In
addition, unusually muted increases in the costs of
worker benefits had been holding down overall compensation costs, and this pattern might not persist. On
the other hand, high levels of resource utilization had
been associated for some time with lower rates of
growth in costs than would have been anticipated on
the basis of historical experience. In particular, a
general sense of job insecurity in a period of major
418
Federal Reserve Bulletin • May 1996
business restructurings was holding down increases
in labor compensation. In an environment of strong
competition, which was preventing many businesses
from passing on rising costs through higher prices,
firms continued to focus on efforts to control costs by
improving the efficiency of their operations, and this
was helping to hold down inflation. An apparent
decline in inflationary expectations also would provide a moderating influence on inflation trends in the
period ahead. While most of the members saw little
reason to anticipate appreciably lower inflation over
the year ahead, they also viewed the odds on a pickup
in inflation as fairly low; they could see possible
reasons for optimism on the long-run trend in inflation; and they generally remained confident that further progress toward price stability would be made
over the longer term.
In keeping with the requirements of the Full
Employment and Balanced Growth Act of 1978 (the
Humphrey-Hawkins Act), the Committee reviewed
the ranges for growth of the monetary and debt
aggregates in 1996 that it had established on a tentative basis at its meeting in July 1995. The tentative
ranges included expansion of 1 to 5 percent for M2
and 2 to 6 percent for M3, measured from the fourth
quarter of 1995 to the fourth quarter of 1996. The
monitoring range for growth of total domestic nonfinancial debt was provisionally set at 3 to 7 percent
for 1996. The tentative ranges for 1996 were
unchanged from the actual ranges for 1995. In July,
the range for M3 had been raised 2 percentage points
to reflect developments that seemed to be fostering a
return to the historical pattern of somewhat faster
growth in M3 than in M2.
In their discussion, the members took note of a
staff analysis which indicated that monetary expansion consistent with the moderate growth of nominal
GDP that the members were projecting for 1996 most
likely would be around the upper ends of the tentative
ranges adopted last July. M2 and M3 velocity over
the past couple of years had conformed more closely
on balance with historical patterns, and the projections assumed that this behavior would continue in
1996. In light of the experience of earlier years,
however, when the velocities of these aggregates had
exhibited pronounced atypical behavior, substantial
uncertainty still surrounded any projections of monetary expansion and the linkage between particular
rates of money growth and the basic objectives of
monetary policy.
Most members endorsed a proposal to adopt the
relatively low ranges for growth of M2 and M3 in
1996 that the Committee had set on a tentative basis
in July 1995. These members favored retention of the
tentative ranges because they could be viewed as
benchmarks for money growth that would be associated with price stability, assuming behavior of
velocity in line with historical experience, and a
reaffirmation of those ranges would underscore the
Committee's commitment to a policy of achieving
price stability over the longer term. Some members
also noted that any adjustment of these ranges to
align them more fully with projections of money
growth consistent with the Committee's expectations
for expansion of the economy and prices in 1996
could be misinterpreted. Such an action might be
seen as suggesting that the Committee had a greater
degree of confidence in the relationship between
money growth and broad measures of economic performance than was warranted by its current understanding of that relationship or that the Committee
was now placing greater emphasis on the broad
monetary aggregates as a gauge of the thrust of
monetary policy.
Two members favored somewhat higher growth
ranges for M2 and M3 in 1996. They noted that the
expansion of these broad aggregates was anticipated
to be around the upper ends of their tentative ranges,
and perhaps even higher, given the Committee's
expectations for the performance of the economy and
prices. In their view, the higher ranges would be
more consistent with what they saw as the Committee's obligations under the Federal Reserve Act to set
ranges consistent with expected or desired economic
outcomes for the year, and the reasons for establishing those ranges could easily be set forth and understood as an appropriate technical adjustment that
would not imply any lessened commitment to the
Committee's price stability goal.
The Committee unanimously preferred to retain
the 3 to 7 percent range for total domestic nonfinancial debt in 1996. This position took account of a staff
projection indicating that the debt aggregate was
likely to continue to grow at a rate generally in line
with the expansion of nominal GDP, although some
moderation in private credit demands was anticipated
and there were indications that lenders were no longer
easing their terms and conditions for granting credit
to consumers and businesses.
At the conclusion of its discussion, the Committee
voted to approve without change the tentative ranges
for 1996 that it had established in July of last year.
In keeping with its usual procedures under the
Humphrey-Hawkins Act, the Committee would
review its ranges at midyear, or sooner if interim
conditions warranted, in light of the growth and
velocity behavior of the aggregates and ongoing economic and financial developments. Accordingly,
Minutes of the Federal Open Market Committee
the following longer-run policy statement for 1995
was approved for inclusion in the domestic policy
directive:
The Federal Open Market Committee seeks monetary
and financial conditions that will foster price stability and
promote sustainable growth in output. In furtherance of
these objectives, the Committee at this meeting established
ranges for growth of M2 and M3 of 1 to 5 percent and 2 to
6 percent respectively, measured from the fourth quarter of
1995 to the fourth quarter of 1996. The monitoring range
for growth of total domestic nonfinancial debt was set at
3 to 7 percent for the year. The behavior of the monetary
aggregates will continue to be evaluated in the light of
progress toward price level stability, movements in their
velocities, and developments in the economy and financial
markets.
Votes for this action: Messrs. Greenspan, McDonough,
Boehne, Jordan, Kelley, McTeer, Ms. Phillips, and
Mr. Stern. Votes against this action: Mr. Lindsey and
Ms. Yellen.
Mr. Lindsey and Ms. Yellen dissented because they
preferred somewhat higher ranges for M2 and M3.
They recognized that the relationships between the
ranges for the monetary aggregates and broad measures of economic performance were subject to substantial uncertainty, but ranges higher than those
adopted on a tentative basis in July 1995 were more
likely to encompass monetary expansion consistent
with the central tendency of members' current forecasts of nominal GDP growth for 1996. Raising the
ranges for M2 and M3 would in their view conform
those ranges more closely with the provisions in the
Federal Reserve Act that require the System to communicate to the Congress its objectives and plans for
the growth of the aggregates for the calendar year.
They believed the Committee could readily explain
that such an adjustment to the ranges did not represent a lessened commitment to its price stability goal
or an increased emphasis on the monetary aggregates
in policy formulation.
The Committee also discussed alternatives to the
monetary aggregates for communicating its intentions with regard to the course of inflation over the
longer run. Some members thought that explicit
numerical goals or forecasts for inflation over a
period of years would have several important benefits, including enhanced credibility that could reduce
the costs of achieving price stability and greater
flexibility to respond to the emergence of economic
weakness by easing policy for a limited period
of time without arousing inflation concerns. Other
members, while endorsing fully the long-term goal of
price stability, had a number of reservations about
implementing such proposals, especially at this time.
419
Based on experience in the United States and elsewhere, many were skeptical about the payoff in terms
of greater credibility or flexibility in policy implementation. Moreover, they believed that substantially
more study and deliberation were required to explore
fully the alternatives and the consequences of
changes in the way the Committee formulated and
communicated its objectives. They also thought that
any such assessment would need to take account of
the prospects for, or disposition of, closely related
legislation that was now being considered in the
Congress. The Committee did not take any action on
this issue at this meeting, but it recognized that the
matter would need to be revisited from time to time.
In the Committee's discussion of policy for the
intermeeting period ahead, the members supported a
proposal calling for some slight easing in reserve
conditions. Although a pickup to an acceptable rate
of expansion was seen as the most likely course for
the economy in coming quarters, the risks of a shortfall in growth were believed to be significant. At the
same time, while most members were forecasting
high levels of resource use and little change in the
rate of inflation this year, they saw only a very
limited risk that a slight easing move might foster
higher inflation under prevailing circumstances, and
some felt that there were favorable prospects for a
slightly improved inflation performance. Under the
circumstances, a slight decrease was warranted in the
real federal funds rate from a level that a number of
members considered still a bit to the firm side—a
stance that seemed less appropriate in light of the
reduced threat over the last year of a pickup in
inflation. One member pointed out that such a
decrease would tend to counter the effects on aggregate demand of the recent rise in the foreign exchange
value of the dollar, which might continue to move
higher if interest rate declines expected by the markets were not forthcoming. It was noted that postponing a decision in this uncertain economic climate
could be defended on the ground that more evidence
was needed to ascertain whether the weakness in the
economy was quite temporary or more lasting; if
it was the former, inflationary pressures could
re-emerge at lower interest rates. On the other hand, a
few members commented that the currently sluggish
performance of the economy could be read as calling
for a more pronounced easing move, but they preferred a cautious approach to policy in light of current inflation trends and the uncertainties that surrounded their forecasts of some strengthening in the
economy.
The Chairman informed the Committee that he had
asked the members of the Board of Governors to
420
Federal Reserve Bulletin • May 1996
convene immediately after this meeting to consider a
reduction of VA percentage point in the discount rate.
Such a reduction had been proposed by a total of six
Federal Reserve Banks at this point. Given the easing
in reserve markets favored by the Committee and the
possibility of a lower discount rate, the members did
not believe that a further policy move was likely to
be needed during the intermeeting period. Accordingly, they favored an unbiased directive that did not
incorporate a presumption about the likely direction
of any adjustments to policy during the next several
weeks. In keeping with its usual practice, the Committee did not rule out the possibility of an intermeeting policy change on the basis of unanticipated economic or financial developments.
At the conclusion of the Committee's discussion,
all the members supported a directive that called for a
slight reduction in the degree of pressure on reserve
positions and that did not include a bias about the
likely direction of an adjustment to policy during the
intermeeting period, should unanticipated developments warrant a change in policy. Accordingly, the
Committee decided that in the context of its long-run
objectives for price stability and sustainable economic growth, and giving careful consideration to
economic, financial, and monetary developments,
slightly greater or slightly lesser reserve restraint
would be acceptable during the intermeeting period.
The reserve conditions contemplated at this meeting
were expected to be consistent with moderate growth
in M2 and M3 over coming months.
At the conclusion of the meeting, the Federal
Reserve Bank of New York was authorized and
directed, until instructed otherwise by the Committee, to execute transactions in the System Account
in accordance with the following domestic policy
directive:
The information reviewed at this meeting suggests that
the economy has been growing rather slowly in recent
months. Nonfarm payroll employment continued to expand
moderately in December, and the civilian unemployment
rate remained at 5.6 percent. Industrial production
increased only slightly further in the fourth quarter. Growth
of consumer spending was modest, on balance, over the
past several months. Housing starts rebounded in November from a sizable October decline. Orders for nondefense
capital goods point to a moderation in the expansion of
spending on business equipment, and nonresidential construction has risen appreciably further. The nominal deficit
on U.S. trade in goods and services narrowed in October
from its average rate in the third quarter. There has been no
clear change in underlying inflation trends.
Most market interest rates have declined somewhat since
the Committee meeting on December 19. In foreign
exchange markets, the trade-weighted value of the dollar in
terms of the other G-10 currencies has risen further over
the intermeeting period.
Growth of M2 and M3 strengthened in December and
January. From the fourth quarter of 1994 to the fourth
quarter of 1995, M2 expanded in the upper half of its range
and M3 grew at the upper end of its range. Growth in total
domestic nonfinancial debt has been moderate in recent
months, placing this aggregate near the midpoint of its
monitoring range for the year.
The Federal Open Market Committee seeks monetary
and financial conditions that will foster price stability and
promote sustainable growth in output. In furtherance of
these objectives, the Committee at this meeting established
ranges for growth of M2 and M3 of 1 to 5 percent and 2 to
6 percent respectively, measured from the fourth quarter of
1995 to the fourth quarter of 1996. The monitoring range
for growth of total domestic nonfinancial debt was set at
3 to 7 percent for the year. The behavior of the monetary
aggregates will continue to be evaluated in the light of
progress toward price level stability, movements in their
velocities, and developments in the economy and financial
markets.
In the implementation of policy for the immediate future,
the Committee seeks to decrease slightly the existing
degree of pressure on reserve positions, taking account of a
possible reduction in the discount rate. In the context of the
Committee's long-run objectives for price stability and
sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments,
slightly greater reserve restraint or slightly lesser reserve
restraint would be acceptable in the intermeeting period.
The contemplated reserve conditions are expected to be
consistent with moderate growth in M2 and M3 over
coming months.
Votes for short-run policy: Messrs. Greenspan,
McDonough, Boehne, Jordan, Kelley, Lindsey,
McTeer, Ms. Phillips, Mr. Stern, and Ms. Yellen. Votes
against this action: None.
It was agreed that the next meeting of the Committee would be held on Tuesday, March 26, 1996.
The meeting adjourned at 12:00 p.m.
Donald L. Kohn
Secretary
421
Legal Developments
JOINT FINAL RULE—AMENDMENT
SECRECY ACT
TO THE BANK
REGULATIONS
The Financial Crimes Enforcement Network ("FinCEN")
of the Department of the Treasury ("Treasury") and the
Board of Governors of the Federal Reserve System
("Board") jointly have adopted amendments to their final
rule that requires enhanced recordkeeping related to certain
funds transfers and transmittals of funds by financial institutions ("the joint rule"). These amendments revise the
joint rule's definitions and make technical conforming
changes to the substantive provisions of the joint rule to
conform the definitions of the parties to an international
transfer to their meanings under Article 4A of the Uniform
Commercial Code (U.C.C. 4A). The revised definitions
will also affect the provisions of a Treasury companion
rule, adopted in January 1995, known as the travel rule,
which requires financial institutions to include in transmittal orders certain information that must be maintained
under the joint rule. The amendments are intended to
reduce confusion of banks and nonbank financial institutions as to the applicability of the joint rule and the travel
rule and to reduce the cost of complying with the rules'
requirements. The Treasury and the Board believe that the
amendments will not have a material adverse effect on the
rules' usefulness in law enforcement investigations and
proceedings. The amendments should not affect a bank's
responsibilities under the rules with respect to domestic
funds transfers.
Effective May 28, 1996, 31 C.F.R. Part 103 is amended
as follows:
Part 103—Financial Recordkeeping and Reporting
of Currency and Foreign Transactions
1. The authority citation for Part 103 is revised to read as
follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C.
5311-5330.
2. Section 103.11 is amended by revising paragraphs (e),
(w), (y) introductory text, (aa), (bb), (dd), (kk) introductory
text, (11), and (mm) to read as follows:
Section 103.11—Meaning of terms.
(e) Beneficiary's bank. The bank or foreign bank identified
in a payment order in which an account of the beneficiary
is to be credited pursuant to the order or which otherwise is
to make payment to the beneficiary if the order does not
provide for payment to an account.
(w) Originator's bank. The receiving bank to which the
payment order of the originator is issued if the originator is
not a bank or foreign bank, or the originator if the originator is a bank or foreign bank.
(y) Payment order. An instruction of a sender to a receiving
bank, transmitted orally, electronically, or in writing, to
pay, or to cause another bank or foreign bank to pay, a
fixed or determinable amount of money to a beneficiary if:
(aa) Receiving bank. The bank or foreign bank to which
the sender's instruction is addressed,
(bb) Receiving financial institution. The financial institution or foreign financial agency to which the sender's
instruction is addressed. The term receiving financial
institution includes a receiving bank.
(dd) Recipient's financial institution. The financial institution or foreign financial agency identified in a transmittal order in which an account of the recipient is to be
credited pursuant to the transmittal order or which otherwise is to make payment to the recipient if the order
does not provide for payment to an account. The term
recipient's financial institution includes a beneficiary's
bank, except where the beneficiary is a recipient's financial institution.
(kk) Transmittal order. The term transmittal order includes a payment order and is an instruction of a sender
to a receiving financial institution, transmitted orally,
electronically, or in writing, to pay, or cause another
financial institution or foreign financial agency to pay, a
fixed or determinable amount of money to a recipient if:
(11) Transmittor. The sender of the first transmittal order
in a transmittal of funds. The term transmittor includes
an originator, except where the transmitter's financial
institution is a financial institution or foreign financial
agency other than a bank or foreign bank,
(mm) Transmittor's financial institution. The receiving
financial institution to which the transmittal order of the
422
Federal Reserve Bulletin • May 1996
transmittor is issued if the transmitter is not a financial
institution or foreign financial agency, or the transmittor
if the transmittor is a financial institution or foreign
financial agency. The term transmitter's financial institution includes an originator's bank, except where the
originator is a transmitter's financial institution other
than a bank or foreign bank.
3. In section 103.33, paragraphs (e) introductory text,
(e)(l)(i) introductory text, (e)(l)(ii), (e)(l)(iii), (e)(6)(i)(A)
through (e)(6)(i)(G), (e)(6)(ii), (f) introductory text,
(f)(l)(i) introductory text, (f)(l)(ii), (f)(l)(iii), (f)(6)(i)(A)
through (f)(6)(i)(G) and (f)(6)(ii) are revised to read as
follows:
Section 103.33—Records to be made and retained
by financial institutions.
(e) Banks. Each agent, agency, branch, or office located
within the United States of a bank is subject to the requirements of this paragraph (e) with respect to a funds transfer
in the amount of $3,000 or more:
(1) Recordkeeping requirements, (i) For each payment
order that it accepts as an originator's bank, a bank
shall obtain and retain either the original or a microfilm, other copy, or electronic record of the following
information relating to the payment order:
(ii) For each payment order that it accepts as an
intermediary bank, a bank shall retain either the original or a microfilm, other copy, or electronic record of
the payment order.
(iii) For each payment order that it accepts as a
beneficiary's bank, a bank shall retain either the original or a microfilm, other copy, or electronic record of
the payment order.
financial institution other than a bank is subject to the
requirements of this paragraph (f) with respect to a transmittal of funds in the amount of $3,000 or more:
(1) Recordkeeping requirements, (i) For each transmittal
order that it accepts as a transmitter's financial institution, a financial institution shall obtain and retain
either the original or a microfilm, other copy, or
electronic record of the following information relating
to the transmittal order:
(ii) For each transmittal order that it accepts as an
intermediary financial institution, a financial institution shall retain either the original or a microfilm,
other copy, or electronic record of the transmittal
order.
(iii) for each transmittal order that it accepts as a
recipient's financial institution, a financial institution
shall retain either the original or a microfilm, other
copy, or electronic record of the transmittal order.
(6)j ) * * *
Exceptions. * * *
(
(A) A bank;
(B) A wholly owned domestic subsidiary of a bank
chartered in the United States;
(C) A broker or dealer in securities;
(D) A wholly owned domestic subsidiary of a broker or dealer in securities;
(E) The United States;
(F) A state or local government; or
(G) A federal, state or local government agency or
instrumentality; and
(ii) Transmittals of funds where both the transmittor
and the recipient are the same person and the transmitter's financial institution and the recipient's financial
institution are the same broker or dealer in securities.
ORDERS ISSUED UNDER BANK HOLDING
COMPANY
ACT
(6) Exceptions. * * *
^ ***
(A) A bank;
(B) A wholly owned domestic subsidiary of a bank
chartered in the United States;
(C) A broker or dealer in securities;
(D) A wholly owned domestic subsidiary of a broker or dealer in securities;
(E) The United States;
(F) A state or local government; or
(G) A federal, state or local government agency or
instrumentality; and
(ii) Funds transfers where both the originator and the
beneficiary are the same person and the originator's
bank and the beneficiary's bank are the same bank.
(f) Nonbank financial institutions. Each agent, agency,
branch, or office located within the United States of a
Orders Issued Under Section 3 of the Bank
Company Act
Holding
Barretville Corporation
Barretville, Tennessee
Order Approving the Formation of a Bank Holding
Company
Barretville Corporation, Barretville ("Barretville"), has applied for the Board's approval under section 3 of the Bank
Holding Company Act (12 U.S.C. § 1842) ("BHC Act") to
become a bank holding company by acquiring 39.4 percent
of the voting shares of Somerville Bank and Trust Company, Somerville ("Somerville Bank"), both in Tennessee.
The shares currently are owned by Barretville Bank and
Legal Developments
Trust Company, Barretville, Tennessee ("Barretville
Bank"), and Barretville would become a wholly owned
subsidiary of Barretville Bank.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published (60
Federal Register 67,359 (1995)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set
forth in section 3(c) of the BHC Act.
Barretville Bank is the 31st largest commercial banking
organization in Tennessee, controlling total deposits of
approximately $177 million, representing less than 1 percent of total deposits in commercial banks in the state.1
Somerville Bank is the 74th largest commercial banking
organization in Tennessee, controlling total deposits of
approximately $90 million, representing less than 1 percent
of total deposits in commercial banks in the state. Barretville Bank and Somerville Bank both compete in the
Memphis banking market. This proposal represents a reorganization by Barretville Bank of its ownership interest in
Somerville Bank, and would not result in the acquisition by
Barretville Bank of any additional banking assets. Based
on all the facts of record, the Board concludes that the
proposal would not have a significantly adverse effect on
competition in any relevant banking market.
The Board previously has stated, and continues to believe, that ownership of a depository institution by another
depository institution raises serious policy concerns. Although banks are not precluded under the BHC Act from
owning other banks, the Board's policy since 1978 has
been to discourage the ownership of a bank by another
bank.2
This policy is based on a recognition that the use of
insured deposits to make such acquisitions is inappropriate
because the depositors of the parent bank would bear the
risk of failure of the subsidiary bank that should be borne,
and in the case of a nonbank parent company is borne, by
the parent bank's shareholders. The parent bank also would
be required to serve as a source of strength for the subsidiary bank.3 In addition, when a parent bank uses insured
deposits rather than new equity capital to make a bank
acquisition, the parent bank would generally continue with
the same amount of capital as before the acquisition,
thereby resulting in a structure that is financially less
secure.
The Board has carefully reviewed this policy in light of
the facts presented by this application. Barretville Bank's
ownership of its interest in Somerville Bank predates the
enactment of the BHC Act in 1956.4 Barretville Bank
became a bank holding company only as a consequence of
1. Statewide deposit data are as of June 30, 1995.
2. See, e.g., Depositors Trust Company, 64 Federal Reserve Bulletin
213 (1978); The Bank of Tokyo, Ltd., 78 Federal Reserve Bulletin 685
(1988).
3. See 12 C.F.R. 225.4(a).
4. Barretville Bank acquired its interest in Somerville Bank prior to
1948.
423
the passage of the Bank Holding Company Act Amendments of 1970, and was registered on August 19, 1971.
Barretville Bank has not increased its interest in Somerville Bank since it became a bank holding company, and
would not increase its interest in Somerville Bank or any
other bank through this proposal.5 This proposal represents
only a reorganization that would insert a registered bank
holding company between Barretville Bank and Somerville
Bank. Barretville is being formed, and this application has
been filed, at the request of the Federal Deposit Insurance
Corporation ("FDIC"), Barretville Bank's primary federal
supervisor, to conform the bank's ownership structure to
section 24 of the Federal Deposit Insurance Act ("FDI
Act"). 6 Barretville Bank and Somerville Bank are well
capitalized, and, based on all the facts of record, including
supervisory information, both banks appear to be in satisfactory condition.
Based on the foregoing and other facts of record, the
Board has concluded that the financial and managerial
resources and future prospects of Barretville and its subsidiary banks, as well as considerations relating to the convenience and needs of the community to be served and other
supervisory factors the Board is required to consider under
section 3 of the BHC Act are consistent with approval.
Accordingly, the Board has determined that the application
should be, and hereby is, approved. The Board's approval
is specifically conditioned on compliance with all the commitments made in connection with this application. The
commitments and conditions relied on by the Board in
reaching this decision are deemed to be conditions imposed in writing by the Board in connection with its
findings and decision, and, as such, may be enforced in
proceedings under applicable law.
This transaction shall not be consummated before the
fifteenth calendar day following the effective date of this
order or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of St. Louis,
acting pursuant to delegated authority.
By order of the Board of Governors, effective March 18,
1996.
5. Barretville Bank does not own more than 5 percent of the voting
shares of any bank or bank holding company other than Somerville
Bank.
6. Section 24 of the FDI Act prohibits state banks after December 19, 1992, from retaining an equity investment that is not permissible for a national bank, unless the insured state bank retains the equity
investment in a majority-owned subsidiary. See 12 U.S.C. § 1831a(c);
see also 12 C.F.R. 362.3. Barretville Bank's equity investment in
Somerville Bank would not be permissible for a national bank. See
12 U.S.C. § 24 (Seventh); see also 12 C.F.R. 1.7(b). Accordingly,
Barretville Bank may retain its interest in Somerville Bank only if the
FDIC approves its transfer to a majority-owned subsidiary, as this
proposal represents. The FDIC has approved this transaction, subject
to the formation of a bank holding company to hold Barretville Bank's
equity investment in Somerville Bank.
424
Federal Reserve Bulletin • May 1996
Voting for this action: Governors Kelley, Lindsey, Phillips, and
Yellen. Absent and not voting: Chairman Pro Tempore Greenspan.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
First Southern Bancorp, Inc.
Stanford, Kentucky
Order Approving Acquisition of Shares of a Bank
Holding Company
First Southern Bancorp, Inc., Stanford, Kentucky ("First
Southern"), a bank holding company within the meaning
of the Bank Holding Company Act ("BHC Act"), has
applied under section 3 of the BHC Act (12 U.S.C. § 1842)
to acquire up to 24.99 percent of the voting shares of Casey
County Bancorp, Inc. ("Casey") and thereby indirectly
acquire an interest in Casey's wholly owned subsidiary
bank, Casey County Bank, both of Liberty, Kentucky.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published (60
Federal Register 66,971 (1995)). The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set
forth in section 3 of the BHC Act.
First Southern, with consolidated assets of approximately $206 million, is the 28th largest commercial banking organization in Kentucky, controlling deposits of approximately $179 million, representing less than 1 percent
of total deposits in commercial banking organizations in
the state.1 Casey, with consolidated assets of approximately $79 million, is the 91 st largest commercial banking
organization in Kentucky, controlling approximately
$66 million in deposits, representing less than 1 percent of total
deposits in commercial banking organizations in the state.
Casey has objected to this proposal. Casey contends that
First Southern would attempt to control Casey and would
divert the attention of Casey's management from the operation of Casey.
As noted above, First Southern proposes to acquire less
than 25 percent of the voting shares of Casey. The Board
previously has indicated that the acquisition of less than a
controlling interest in a bank or bank holding company is
not a normal acquisition for a bank holding company.2 The
requirement in section 3(a)(3) of the BHC Act that the
Board's approval be obtained before a bank holding company acquires more than 5 percent of the voting shares of a
bank suggests, however, that Congress contemplated the
acquisition by bank holding companies of between 5 percent and 25 percent of the voting shares of a bank or a bank
holding company.3 Nothing in section 3(c) of the BHC Act,
moreover, requires denial of an application solely because
1. Asset and deposit data are as of September 30, 1995.
2. See, e.g., North Fork Bancorporation, Inc., 81 Federal Reserve
Bulletin 734 (1995) ("North Fork")-, State Street Boston Corporation,
67 Federal Reserve Bulletin 862 (1981).
3. 12 U.S.C. § 1842(a)(3); 12 C.F.R. 225.11(c).
a bank holding company proposes to acquire less than a
controlling interest in a bank or bank holding company.
Accordingly, the Board previously has approved the acquisition by a bank holding company of less than a controlling
interest in a bank or bank holding company.4
First Southern has stated that it does not propose to
control Casey and will not control Casey without obtaining
the prior approval of the Board. First Southern has made a
number of commitments that are similar to commitments
previously relied on by the Board in determining that an
investing bank holding company would not be able to
exercise a controlling influence over another bank holding
company or bank for purposes of the BHC Act.5 First
Southern has committed not to exercise or attempt to
exercise a controlling influence over the management or
policies of Casey or any of its subsidiaries; not to seek or
accept representation on the board of directors of Casey or
any of its subsidiaries; and not to have any representative
of First Southern serve as an officer, agent, or employee of
Casey or any of its subsidiaries. First Southern also has
committed not to attempt to influence the dividend policies, loan decisions or operations of Casey or any of its
subsidiaries. The Board has adequate supervisory authority
to monitor First Southern's compliance with its commitments, and expressly retains authority to initiate a control
proceeding against First Southern if facts presented later
indicate that First Southern or any of its subsidiaries or
affiliates in fact controls Casey for purposes of the BHC
Act.6 Based on these commitments and all other facts of
record, it is the Board's judgment that First Southern
would not acquire control of Casey for purposes of the
BHC Act through consummation of this proposal.
The Board's inquiry, however, does not end with its
finding that First Southern would not control Casey. The
Board previously has stated that noncontrolling interests in
directly competing banks or bank holding companies may
raise serious questions under the BHC Act.7 The Board has
noted that one company need not acquire control of an4. See, e.g., North Fork (acquisition of 19.9 percent of the voting
shares of a bank holding company); Mansura Bancshares, Inc., 79
Federal Reserve Bulletin 37 (1993) {"Mansura") (acquisition of
9.7 percent of the voting shares of a bank holding company); and
SunTrust Banks, Inc., 76 Federal Reserve Bulletin 542 (1990) ("SunTrust") (acquisition of up to 24.99 percent of the voting shares of a
bank).
5. See, e.g., Mansura at 39. The commitments provided by First
Southern are set forth in the Appendix.
6. Casey contends that First Southern contacted a number of shareholders of Casey with an offer to acquire shares of Casey and,
therefore, indicated an intent to acquire control of Casey. The BHC
Act and the Board's Regulation Y do not prohibit a bank holding
company from making an offer to purchase more than 5 percent of the
voting securities of a bank or bank holding company as long as the
bank holding company obtains Board approval before acquiring the
shares. There is no evidence that First Southern acquired more than
5 percent of the voting shares of Casey without receiving the Board's
approval. Moreover, as explained above, First Southern has stated that
it does not intend to exercise control over Casey and has made a
number of commitments to the Board designed to limit the possibility
that First Southern could exercise control over Casey.
7. See, e.g., North Fork; Mansura; and SunTrust.
Legal Developments
other company in order to substantially lessen competition
between them and that the specific facts of each case will
determine whether a minority investment would have significant anticompetitive effects.8 It is possible, for example,
that the acquisition of a substantial ownership interest in a
competitor or a potential competitor of the acquiring firm
might alter the market behavior of both firms in such a way
as to weaken or eliminate independence of action between
the organizations and increase the likelihood of cooperative operations.9
First Southern and Casey compete directly in the Danville, Kentucky, banking market ("Danville banking market").10 First Southern is the second largest commercial
bank or thrift institution ("depository institution") in the
market, controlling deposits of approximately $103 million, representing approximately 17 percent of total deposits in depository institutions in the market ("market deposits").11 Casey is the fourth largest depository institution in
the market, controlling deposits of approximately $62 million, representing approximately 11 percent of market deposits. As a combined organization, First Southern would
be the largest depository institution in the Danville banking
market, controlling deposits of approximately $165 million, representing approximately 28 percent of market deposits. The Herfindahl-Hirschman Index ("HHI") would
increase 370 points to 1648.12 Numerous competitors
would remain in the market. Thus, even if the Board were
to conclude that First Southern would control Casey after
consummation of this proposal, the elimination of competition between the two entities would not substantially lessen
competition in any relevant banking market. In light of all
the facts of record, the Board concludes that competitive
considerations are consistent with approval.
The Board also concludes that the managerial and financial resources and future prospects of the organizations
8 .Id.
9. See Mansura at 38.
10. The Danville banking market consists of Boyle and Lincoln
counties, the Lancaster and Bryantsville divisions of Garrard County,
and the northern portion of Casey County, all in Kentucky.
11. Market share data are as of June 30, 1994, and are based on
calculations in which the deposits of thrift institutions are included at
50 percent. The Board previously has indicated that thrift institutions
have become, or have the potential to become, significant competitors
of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin
788 (1990); National City Corporation, 70 Federal Reserve Bulletin
743 (1984). Thus, the Board has regularly included thrift deposits in
the calculation of market share on a 50-percent weighted basis. See,
e.g.. First Hawaiian Inc., 11 Federal Reserve Bulletin 52 (1991).
12. Under the revised Department of Justice Merger Guidelines,
49 Federal Register 26,823 (June 29, 1984), a market in which the
post-merger HHI is between 1000 and 1800 is considered to be
moderately concentrated. The Justice Department has informed the
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by more than 200 points. The Justice Department
has stated that the higher than normal HHI thresholds for screening
bank mergers for anticompetitive effects implicitly recognize the
competitive effect of limited-purpose lenders and other non-depository
financial entities.
425
involved in this proposal are consistent with approval.13
The convenience and needs factor and the other supervisory factors the Board must consider under section 3 of the
BHC Act also are consistent with approval.14
Based on the foregoing and all the facts of record, the
Board has determined that the application should be, and
hereby is, approved. The Board's approval is expressly
conditioned on First Southern's compliance with all the
commitments made in connection with this application.
The commitments and conditions relied on by the Board in
reaching this decision are deemed to be conditions imposed in writing by the Board in connection with its
findings and decision, and, as such, may be enforced in
proceedings under applicable law.
The transaction shall not be consummated before the
fifteenth calendar day following the effective date of this
order, and the transaction shall not be consummated later
than three months after the effective date of this order,
unless such period is extended for good cause by the Board
or the Federal Reserve Bank of Cleveland, acting pursuant
to delegated authority.
By order of the Board of Governors, effective March 4,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix
First Southern will not, directly or indirectly:
(1) Take any action that would cause Casey or any of its
subsidiaries to become a subsidiary of First Southern.
13. Casey contends that First Southern engaged in a tender offer for
Casey's shares without complying with applicable rules of the Securities and Exchange Commission ("SEC"). See 17 C.F.R. 240.14d-l
et seq. Based on a review of the record, and after consulting with staff
of the SEC, which is the federal agency with primary jurisdiction over
matters dealing with tender offers, the Board concludes that Casey has
not provided sufficient facts or information to support its allegation
that First Southern is or was engaged in a tender offer. The Board has
provided the SEC with a copy of Casey's allegation for consideration,
and the Board retains the authority to consider this matter in connection with its evaluation of future applications by First Southern or in
the context of its general supervisory jurisdiction over First Southern
if any violations of applicable law are substantiated.
14. The subsidiary banks of First Southern and Casey received
"satisfactory" ratings under the Community Reinvestment Act
(12U.S.C. § 2901 et seq. ) ("CRA") from their primary federal
supervisors at their most recent CRA performance evaluations. Casey
contends that the acquisition by another bank holding company of
control of Casey is not in the best interest of Casey's employees and
shareholders and the communities served by Casey and its subsidiary
bank. As discussed above, First Southern has stated that, after consummation of the proposal, it would be a passive investor in Casey and
would not control or attempt to control Casey; and that it would not
attempt to alter the policies or operations of Casey.
426
Federal Reserve Bulletin • May 1996
(2) Acquire or retain shares of Casey that would cause the
combined interests of First Southern, its affiliates, officers,
and directors to equal or exceed 25 percent of the outstanding voting shares of Casey.
(3) Exercise or attempt to exercise a controlling influence over
the management or policies of Casey or any of its subsidiaries.
(4) Seek or accept representation on the board of directors of
Casey or any of its subsidiaries.
(5) Serve, or have or seek to have any representative of First
Southern serve, as an officer, agent, or employee of Casey
or any of its subsidiaries.
(6) Propose a director or a slate of directors in opposition to
any nominee or slate of nominees proposed by management
or the board of directors of Casey.
(7) Solicit or participate in soliciting proxies with respect to
any matter presented to the shareholders of Casey.
(8) Attempt to influence Casey's or any of its subsidiaries'
dividend policies; loan, credit, or investment decisions;
pricing of services; personnel decisions; operations activities, including the location of any offices or branches or
their hours of operation, etc.; or any similar activities or
decisions of Casey or any of its subsidiaries.
(9) Enter into any banking or nonbanking transactions with
Casey, except that First Southern may establish and maintain deposit accounts with Casey or the bank subsidiaries of
Casey, provided that the aggregate balance of all such
deposit accounts does not exceed $500,000, and provided
that the accounts are maintained on substantially the same
terms as those prevailing for comparable accounts of persons unaffiliated with Casey.
(10) Dispose or threaten to dispose of shares of Casey in any
manner as a condition of specific action or non-action by
Casey or any of its subsidiaries.
The Governor and Company of the Bank of Ireland
Dublin, Ireland
Order Approving Acquisition of Banks
The Governor and Company of the Bank of Ireland, Dublin, Ireland ("BOI"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC Act"),
has applied under section 3 of the BHC Act (12U.S.C.
§ 1842) for approval to acquire 23.5 percent of the voting shares and control of Citizens Financial Group, Inc.,
Providence, Rhode Island ("Citizens"), and Citizens' subsidiary banks, Citizens Savings Bank and Citizens Trust
Company, both of Providence, Rhode Island, and Citizens
Bank of Massachusetts, Boston, Massachusetts.1
1. Citizens would be considered a subsidiary of BOI. Citizens
currently is a wholly owned subsidiary of The Royal Bank of Scotland
pic ("RBS"), which is a wholly owned subsidiary of The Royal Bank
of Scotland Group pic ("RBS Group"), both of Edinburgh, Scotland.
As part of this proposal, BOI would merge its wholly owned subsidiary bank holding company, Bank of Ireland First Holdings, Inc.,
Manchester, New Hampshire ("Holdings"), into Citizens. As a result,
Citizens would acquire control of Holdings's wholly owned subsid-
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 1760 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
BOI, with approximately $31.8 billion in total consolidated assets, is the second largest banking organization in
Ireland and the 191st largest banking organization in the
world.2 BOI operates a branch in New York. Holdings,
with approximately $4.2 billion in total consolidated assets, is the 101st largest commercial banking organization
in the United States and controls less than 1 percent of total
banking assets in the United States. Holdings operates one
subsidiary bank in New Hampshire. RBS Group, with
approximately $80.8 billion in total consolidated assets, is
the sixth largest banking organization in Great Britain and
the 92d largest banking organization in the world. RBS
Group's only direct subsidiary, RBS, operates a branch in
New York and an agency in California. Citizens, with
approximately $10.2 billion in total consolidated assets, is
the 60th largest commercial banking organization in the
United States and controls less than 1 percent of total
banking assets in the United States. Citizens operates subsidiary banks in Rhode Island and Massachusetts. After
consummation of this proposal, Citizens would become the
36th largest commercial banking organization in the United
States and would control less than 1 percent of total banking assets in the United States.
Interstate
Analysis
Section 3(d) of the BHC Act, as amended by section 101 of
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, allows the Board to approve an application by a bank holding company to acquire control of a
bank located in a state other than the home state of such
bank holding company if certain conditions are met.3 These
conditions are met in this case.4 In view of all the facts of
iary bank, First NH Bank, Manchester, New Hampshire ("First NH").
In consideration for the merger, BOI would receive newly issued
shares of the voting stock of Citizens, thereby reducing the shareholding interest of RBS and RBS Group in Citizens to 76.5 percent. RBS
Group, RBS, and Citizens have filed applications under the BHC Act
to acquire Holdings and First NH. See The Royal Bank of Scotland
Group pic, 82 Federal Reserve Bulletin 428 (1996).
2. Asset and domestic ranking data are as of September 30, 1995.
Foreign ranking data are as of December 31, 1994.
3. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is that state in which the operations of the bank
holding company's banking subsidiaries were principally conducted
on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later. For purposes of the BHC Act,
the home state of BOI is New Hampshire.
4. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
BOI is adequately capitalized and adequately managed. The requirement of Massachusetts law that BOI make a percentage of its assets
available for call by a state-sponsored housing entity has been satisfied. Upon consummation, BOI and its affiliates would control less
than 10 percent of the total amount of deposits of insured depository
Legal Developments
record, the Board is permitted to approve this proposal
under section 3(d) of the BHC Act.
Competitive
Considerations
Holdings and Citizens compete directly in the Boston
banking market.5 Holdings is the 13th largest banking or
thrift organization ("depository organization") in the market, controlling deposits of approximately $449 million,
representing less than 1 percent of total deposits in depository institutions in the market ("market deposits").6 Citizens is the sixth largest depository organization in the
market, controlling deposits of approximately $3.1 billion,
representing 4.7 percent of market deposits. After consummation of this proposal, Citizens would become the fifth
largest depository organization in the market, controlling
deposits of approximately $3.6 billion, representing
5.4 percent of market deposits. The market would remain
moderately concentrated, as measured by the HerfindahlHirschman Index ("HHI"),7 and numerous competitors
would remain. Based on all the facts of record, the Board
concludes that consummation of this proposal would not
result in any significantly adverse effects on competition or
the concentration of banking resources in the Boston banking market or any other relevant banking market.
Financial, Managerial, and Other Supervisory
Considerations
Under section 3 of the BHC Act, as amended by the
Foreign Bank Supervision Enhancement Act of 1991,8 the
Board may not approve any application by a company that
institutions in the United States, and less than the applicable state limit
on deposits in Massachusetts.
5. The Boston banking market is approximated by the Boston RMA
and the towns of Greenville, Lyndeborough, Mason, and New Ipswich
in Hillsborough County, all in New Hampshire.
6. Market share data are as of June 30, 1994, and include acquisitions consummated after that date. Market share data are based on
calculations in which the deposits of thrift institutions are included at
50 percent. The Board previously has indicated that thrift institutions
have become, or have the potential to become, significant competitors
of commercial banks. See Midwest Financial Group, 75 Federal
Reserve Bulletin (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included
thrift deposits in the calculation of market share on a 50-percent
weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve
Bulletin 52 (1991).
7. After consummation of this proposal, the HHI would increase by
6 points to 1020. Under the revised Department of Justice Merger
Guidelines (49 Federal Register 26,823 (June 29, 1984)), a market in
which the post-merger HHI is between 1000 and 1800 is considered to
be moderately concentrated. The Justice Department has informed the
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti-competitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by 200 points. The Justice Department has stated
that the higher than normal HHI thresholds for screening bank mergers for anti-competitive effects implicitly recognize the competitive
elfect of limited-purpose lenders and other non-depository financial
entities.
8. Pub. L. No. 102-242, § 201 et seq. , 105 Stat. 2286 (1991).
427
involves a foreign bank unless the bank is "subject to
comprehensive supervision or regulation on a consolidated
basis by the appropriate authorities in the bank's home
country."9 BOI's home country is Ireland, where it is
engaged in extensive banking and nonbanking activities.
The Central Bank of Ireland ("Central Bank") is the home
country supervisor for BOI.
The Board has previously determined, in connection
with an application by BOI under section 3 of the BHC Act
and the International Banking Act (12 U.S.C. § 3101
et seq.) ("IBA") that BOI was subject to home country
supervision by the Central Bank.10 Based on all the facts of
record, the Board has determined that the requirements of
section 3(c)(3)(B) of the BHC Act regarding comprehensive, consolidated supervision are met in this case.
In addition, BOI has committed that, to the extent not
prohibited by applicable law, it will make available to the
Board such information on the operations of BOI and any
of its affiliates that the Board deems necessary to determine
and enforce compliance with the BHC Act, the IBA, and
other applicable federal law. BOI also has committed to
cooperate with the Board to obtain any waivers or exemptions that may be necessary in order to enable it to make
any information available to the Board. In light of these
commitments and other facts of record, the Board has
concluded that BOI has provided adequate assurances of
access to any appropriate information the Board may request. For these reasons, and based on all the facts of
record, the Board concludes that the supervisory factors it
is required to consider under section 3 of the BHC Act are
consistent with approval.
The Board also must take into account the financial
condition of a foreign bank that files a section 3 application.11 BOI must comply with capital standards that conform to the Basle Capital Accord, as implemented by the
Republic of Ireland. BOI's capital exceeds the minimum
standards, and is equivalent to capital that would be required of a United States banking organization. The financial and managerial resources of BOI, Holdings, and First
NH are considered consistent with approval of this proposal. Factors relating to the convenience and needs of the
communities served by Holdings, Citizens, and their respective subsidiaries are consistent with approval, as are
9. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the
Board determines whether a foreign bank is subject to consolidated
home country supervision under the standards set forth in Regulation K. 12 C.F.R. 225.13(b)(5). Regulation K provides that a foreign
bank may be considered to be subject to consolidated supervision if
the Board determines that the bank is supervised or regulated in such a
manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign bank, including the
relationship of the bank to its affiliates, to assess the foreign bank's
overall financial condition and compliance with law and regulation.
12 C.F.R. 211.24(c)(l)(ii).
10. See Bank of Ireland, 81 Federal Reserve Bulletin 511 (1995).
11 .See 12 C.F.R. 225.13(b)(1).
428
Federal Reserve Bulletin • May 1996
the other supervisory factors the Board is required to
consider under section 3 of the BHC Act.12
The Royal Bank of Scotland Group pic
Edinburgh, Scotland
Conclusion
The Royal Bank of Scotland pic
Edinburgh, Scotland
Based on the foregoing and all other facts of record,
including all the commitments provided by BOI and its
affiliates in connection with this proposal, the Board has
determined that the application should be, and hereby is,
approved. The Board's approval of this proposal is specifically conditioned on compliance by BOI and its affiliates
with all the commitments made in connection with this
proposal and with the conditions referred to in this order.
Should any restrictions on access to information on the
operations or activities of BOI and any of its affiliates
subsequently interfere with the Board's ability to determine the compliance by BOI or its affiliates with applicable
federal statutes, the Board may require termination of any
of BOI's or its affiliates' direct or indirect activities in the
United States. These commitments and conditions shall be
deemed to be conditions imposed in writing by the Board
in connection with its findings and decisions, and, as such,
may be enforced in proceedings under applicable law.
This transaction shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of Boston,
acting pursuant to delegated authority.
By order of the Board of Governors, effective March 6,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
12. The Board has received a comment from a community organization commending First NH for its record of support for economic
development and the production of housing for low- and moderateincome households in New Hampshire and stating the commenter's
expectations for future efforts by Citizens and First NH in these and
other areas of community development. The Board notes that First NH
received a rating of "outstanding" in its most recent examination for
performance by the Federal Deposit Insurance Corporation ("FDIC"),
its primary supervisor, under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA"), as of December 1994. In addition, each subsidiary bank of Citizens was rated "outstanding" by the
FDIC as of its most recent examination for CRA performance.
Citizens Financial Group, Inc.
Providence, Rhode Island
Order Approving Merger of Bank Holding
Companies
The Royal Bank of Scotland Group pic ("RBS Group")
and The Royal Bank of Scotland pic ("RBS"), both of
Edinburgh, Scotland, and Citizens Financial Group, Inc.,
Providence, Rhode Island ("Citizens"), bank holding companies within the meaning of the Bank Holding Company
Act ("BHC Act"), have applied under section 3 of the
BHC Act (12 U.S.C. § 1842) for approval for Citizens to
merge with Bank of Ireland First Holdings, Inc. ("Holdings"), and thereby acquire control of Holdings' subsidiary
bank, First NH Bank ("First NH"), both of Manchester,
New Hampshire.1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(61 Federal Register 1760 (1996)). The time for filing
comments has expired, and the Board has considered the
application and all comments received in light of the
factors set forth in section 3 of the BHC Act.
RBS Group, with approximately $80.8 billion in total
consolidated assets, is the sixth largest banking organization in Great Britain and the 92nd largest banking organization in the world.2 RBS Group's only direct subsidiary,
RBS, operates a branch in New York and an agency in
California. Citizens, with approximately $10.2 billion in
total consolidated assets, is the 60th largest commercial
banking organization in the United States and controls less
than one percent of total banking assets in the United
States. Citizens operates subsidiary banks in Rhode Island
and Massachusetts. Holdings's parent company, The Governor and Company of the Bank of Ireland, Dublin, Ireland
("BOI"), with approximately $31.8 billion in total consolidated assets, is the second largest banking organization in
Ireland and the 191st largest banking organization in the
world. BOI operates a branch in New York. Holdings, with
approximately $4.2 billion in total consolidated assets, is
the 101st largest commercial banking organization in the
United States and controls less than 1 percent of total
1. Citizens is a wholly owned subsidiary of RBS, which is a wholly
owned subsidiary of RBS Group. Holdings is a wholly owned subsidiary of The Governor and Company of the Bank of Ireland, Dublin,
Ireland ("BOI"). In connection with this proposal, Citizens would
issue additional shares of its voting stock to BOI, which would result
in RBS Group's owning 76.5 percent and BOI's owning 23.5 percent
of the voting shares of Citizens. BOI has filed an application under the
BHC Act to acquire its interest in Citizens. See The Governor and
Company of the Bank of Ireland, 82 Federal Reserve Bulletin 426
(1996).
2. Asset and domestic ranking data are as of September 30, 1995.
Foreign ranking data are as of December 31, 1994.
Legal Developments
banking assets in the United States. Holdings operates one
subsidiary bank in New Hampshire. On consummation of
this proposal, Citizens would become the 36th largest
commercial banking organization in the United States and
would control less than 1 percent of total banking assets in
the United States.
Interstate
Analysis
Section 3(d) of the BHC Act, as amended by section 101 of
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, allows the Board to approve an application by a bank holding company to acquire control of a
bank located in a state other than the home state of such
bank holding company if certain conditions are met.3 These
conditions are met in this case.4 In view of all the facts of
record, the Board is permitted to approve this proposal
under section 3(d) of the BHC Act.
Competitive
Considerations
Citizens and Holdings compete directly in the Boston
banking market.5 Citizens is the sixth largest banking or
thrift organization ("depository organization") in the market, controlling deposits of approximately $3.1 billion,
representing 4.7 percent of total deposits in depository
institutions in the market ("market deposits").6 Holdings is
the 13 th largest depository organization in the market,
controlling deposits of approximately $449 million, representing less than 1 percent of market deposits. After consummation of this proposal, Citizens would become the
fifth largest depository organization in the market, controlling deposits of approximately $3.6 billion, representing
3. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is that state in which the operations of the bank
holding company's banking subsidiaries were principally conducted
on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later. For purposes of the BHC Act,
the home state of RBS Group, RBS, and Citizens is Rhode Island.
4. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
RBS Group, RBS, and Citizens are adequately capitalized and adequately managed. First NH has been in existence and continuously
operated for more than five years, the minimum period of time
required under New Hampshire law. Upon consummation of this
proposal, RBS Group and its affiliates would control less than
10 percent of the total amount of deposits of insured depository
institutions in the United States, and less than the applicable deposit
limit in New Hampshire.
5. The Boston banking market is approximated by the Boston RMA
and the towns of Greenville, Lyndeborough, Mason, and New Ipswich
in Hillsborough County, all in New Hampshire.
6. Market share data are as of June 30, 1994, and include acquisitions consummated after that date. Market share data are based on
calculations in which the deposits of thrift institutions are included at
50 percent. The Board previously has indicated that thrift institutions
have become, or have the potential to become, significant competitors
of commercial banks. See Midwest Financial Group, 75 Federal
Reserve Bulletin (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included
thrift deposits in the calculation of market share on a 50-percent
weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve
Bulletin 52 (1991).
429
5.4 percent of market deposits. The market would remain
moderately concentrated, as measured by the HerfindahlHirschman Index ("HHI"),7 and numerous competitors
would remain. Based on all the facts of record, the Board
concludes that consummation of this proposal would not
result in any significantly adverse elfects on competition or
the concentration of banking resources in the Boston banking market or any other relevant banking market.
Financial, Managerial, and Other
Considerations
Supervisory
Under section 3 of the BHC Act, as amended by the
Foreign Bank Supervision Enhancement Act of 1991,8 the
Board may not approve any application by a company that
involves a foreign bank unless the bank is "subject to
comprehensive supervision or regulation on a consolidated
basis by the appropriate authorities in the bank's home
country.9 RBS Group is the parent company for various
banking and nonbanking companies, including a subsidiary
bank located in the United Kingdom. The Bank of England
is the home country supervisor for RBS Group.
The Board previously has determined, in connection
with an application by RBS Group under section 3 of the
BHC Act and the International Banking Act (12 U.S.C.
§ 3101 et seq.) ("IBA"), that RBS Group was subject to
home country supervision by the Bank of England.10 The
RBS Group also is subject to supervision in the United
Kingdom by self-regulatory organizations that act under
authority delegated by the Department of Trade and Industry to the Securities and Investment Board, which estab-
7. After consummation of this proposal, the HHI would increase by
6 points to 1020. Under the revised Department of Justice Merger
Guidelines (49 Federal Register 26,823 (June 29, 1984)), a market in
which the post-merger HHI is between 1000 and 1800 is considered to
be moderately concentrated. The Justice Department has informed the
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti-competitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by 200 points. The Justice Department has stated
that the higher than normal HHI thresholds for screening bank mergers for anti-competitive effects implicitly recognize the competitive
effect of limited-purpose lenders and other non-depository financial
entities.
8. Pub. L. No. 102-242, § 201 et seq., 105 Stat. 2286 (1991).
9. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the
Board determines whether a foreign bank is subject to consolidated
home country supervision under the standards set forth in Regulation K. 12 C.F.R. 225.13(b)(5). Regulation K provides that a foreign
bank may be considered to be subject to consolidated supervision if
the Board determines that the bank is supervised or regulated in such a
manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign bank, including the
relationship of the bank to its affiliates, to assess the foreign bank's
overall financial condition and compliance with law and regulation.
12 C.F.R. 211.24(c)(l)(ii).
10. See The Royal Bank of Scotland Group pic, 79 Federal Reserve
Bulletin 1060 (1993) ("RBS Group Order"). The Board has made a
similar determination for several other United Kingdom banks under
the IBA. See also West Merchant Bank, 81 Federal Reserve Bulletin
519 (1995); Singer & Friedlander, Ltd., 79 Federal Reserve Bulletin
(1993); Coutts & Co., A.G., 79 Federal Reserve Bulletin 636 (1993).
430
Federal Reserve Bulletin • May 1996
lishes general principles that the self-regulatory organizations apply to firms engaged in particular types of
investment and insurance activities. These principles ensure that RBS Group or the relevant subsidiary is fit and
proper to perform the investment or insurance activities
and conforms to certain prudential standards, such as minimum capital requirements.11 Based on all the facts of
record, the Board has determined that the requirements of
section 3(c)(3)(B) of the BHC Act regarding comprehensive, consolidated supervision are met in this case.
In addition, RBS Group has committed that, to the extent
not prohibited by applicable law, it will make available to
the Board such information on the operations of RBS
Group and any of its affiliates that the Board deems necessary to determine and enforce compliance with the BHC
Act, the IBA, and other applicable federal laws. RBS
Group also has committed to cooperate with the Board to
obtain any waivers or exemptions that may be necessary in
order to enable RBS Group to make any information
available to the Board. In light of these commitments and
other facts of record, the Board has concluded that RBS
Group has provided adequate assurances of access to any
appropriate information the Board may request. For these
reasons and based on all the facts of record, the Board
concludes that the supervisory factors it is required to
consider under section 3 of the BHC Act are consistent
with approval.
The Board also taken into account the financial condition of a foreign bank that files a section 3 application.12
RBS Group must comply with capital standards that conform to the Basle Capital Accord, as implemented by the
United Kingdom. RBS Group's capital exceed the minimum standards and is equivalent to capital that would be
required of a United States banking organization. The
financial and managerial resources of RBS Group, RBS,
Citizens, and their subsidiary banks are considered consistent with approval of this proposal. Factors relating to the
convenience and needs of the communities served by Citizens, Holdings, and their respective subsidiaries are consistent with approval, as are the other supervisory factors the
Board is required to consider under section 3 of the BHC
Act.13
11. The self-regulatory organizations that supervise these investment and insurance activities are the Securities and Futures Authority
("SFA"), the Investment Management Regulatory Organization
("IMRO"), the Life Assurance and Unit Trust Regulatory Organization ("LAUTRO"), and the Financial Intermediaries, Managers, and
Brokers Regulatory Association ("FIMBRA"). In RBS Group Order,
the Board considered the supervision by SFA and IMRO of the
securities and investment activities of RBS Group and its subsidiaries,
and the supervision by LAUTRO and FIMBRA of the marketing of
life insurance and related products by RBS Group and its subsidiaries.
12. See 12 C.F.R. 225.13(b)(1).
13. The Board received a comment from a community organization
commending First NH for its record of support for economic development and the production of housing for low- and moderate-income
households in New Hampshire and stating the commenter's expectations for future efforts by Citizens and First NH in these and other
areas of community development. The Board notes that First NH
received a rating of "outstanding" in its most recent examination for
Conclusion
Based on the foregoing and all other facts of record,
including all the commitments made by RBS Group and its
affiliates in connection with this proposal, the Board has
determined that the applications should be, and hereby are,
approved. The Board's approval of this proposal is specifically conditioned on compliance by RBS Group and its
affiliates with all the commitments made in connection
with this proposal and with the conditions referred to in
this order. Should any restrictions on access to information
on the operations or activities of RBS Group and any of its
affiliates subsequently interfere with the Board's ability to
determine the compliance by RBS Group or its affiliates
with applicable federal statutes, the Board may require
termination of any of RBS Group's or any of its affiliates'
direct or indirect activities in the United States. These
commitments and conditions shall be deemed to be conditions imposed in writing by the Board in connection with
its findings and decisions, and, as such, may be enforced in
proceedings under applicable law.
This transaction shall not be consummated before the
fifteenth calendar day following the effective date of this
order, or later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of Boston,
acting pursuant to delegated authority.
By order of the Board of Governors, effective March 6,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Orders Issued Under Sections
Holding Company Act
3 and 4 of the
Bank
CoreStates Financial Corp
Philadelphia, Pennsylvania
Order Approving the Merger of Bank Holding
Companies
CoreStates Financial Corp, Philadelphia, Pennsylvania
("CoreStates"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has
applied for the Board's approval under section 3 of the
BHC Act (12 U.S.C. § 1842) to merge with Meridian
performance by the Federal Deposit Insurance Corporation ("FDIC"),
its primary supervisor, under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA"), as of December 1994. In addition, each subsidiary bank of Citizens was rated "outstanding" by the
FDIC as of its most recent examination for CRA performance.
Legal Developments
Bancorp, Inc., Reading, Pennsylvania ("Meridian"),1 and
thereby indirectly acquire Meridian's subsidiary banks:
Meridian Bank, Reading, Pennsylvania ("Meridian
Bank"); Meridian Bank, New Jersey, Cherry Hill, New
Jersey; and Delaware Trust Company, Wilmington, Delaware.2 CoreStates also has requested approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and
section 225.23 of the Board's Regulation Y (12 C.F.R.
225.23) of its notice to acquire the nonbanking subsidiaries
of Meridian listed in the Appendix and thereby engage
nationwide in permissible nonbanking activities.3
CoreStates also requested approval under section 25 of
the Federal Reserve Act (12 U.S.C. §§ 601-604a) and
section 211.3(a)(3) of the Board's Regulation K (12 C.F.R.
211.3(a)(3)) of its notice to establish a branch in the
Cayman Islands, British West Indies, through the acquisition of Meridian Bank's branch at that location.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(60 Federal Register 67,135 (1995)). The time for filing
comments has expired, and the Board has considered the
applications and notices and all comments received in light
of the factors set forth in sections 3 and 4 of the BHC Act
and the Federal Reserve Act.
CoreStates, with total consolidated assets of approximately $28.9 billion, operates subsidiary banks in Pennsylvania, New Jersey, and Delaware.4 CoreStates is the
27th largest commercial banking organization in the United
States, controlling less than 1 percent of total banking
assets in the United States, and is the third largest commercial banking organization in Pennsylvania, controlling
approximately $14.1 billion in deposits, representing
10.5 percent of all deposits in commercial banking organizations in the state ("state deposits").5 CoreStates also
engages in a number of permissible nonbanking activities
nationwide. Meridian, with total consolidated assets of
approximately $14.6 billion, operates subsidiary banks in
Pennsylvania, New Jersey, and Delaware. Meridian is the
41st largest commercial banking organization in the United
States, controlling less than 1 percent of total banking
1. CoreStates and Meridian also have granted to each other an
option to purchase up to 19.9 percent of the voting shares of the other
organization on the occurrence of certain circumstances, and have
applied for the Board's approval to exercise these options. These
options would become moot on consummation of this proposal.
2. CoreStates also has applied to acquire Meridian's noncontrolling
investment in 24.9 percent of the voting shares of First Commercial
Bank of Philadelphia and 6.7 percent of the voting shares of United
Bank of Philadelphia, both of Philadelphia, Pennsylvania. CoreStates
has agreed to comply with commitments made by Meridian in connection with Meridian's acquisition of these interests. See Board letter
dated March 20, 1992, to Timothy F. Demers, Esq.
3. In connection with this proposal, Meridian Bank would be
merged into CoreStates's lead subsidiary bank, CoreStates Bank,
N.A., Philadelphia, Pennsylvania ("CoreStates Bank"). CoreStates
Bank has filed an application with the Office of the Comptroller of the
Currency ("OCC") for approval of the bank merger.
4. Asset data are as of September 30, 1995, and take into account
transactions approved by the Board after this date.
5. Deposit data are as of June 30, 1995.
431
assets in the United States. Meridian is the fifth largest
commercial banking organization in Pennsylvania, controlling approximately $9.5 billion in deposits, representing
7.1 percent of state deposits. Meridian also engages in a
number of permissible nonbanking activities nationwide.
After consummation of this proposal, CoreStates would
be the 18th largest commercial banking organization in the
United States, with total consolidated assets of approximately $43.5 billion, and would control 1.2 percent of total
banking assets in the United States, and less than 1 percent
of total deposits in banks and savings associations insured
by the Federal Deposit Insurance Corporation. After consummation of this proposal and completion of the proposed branch divestitures, CoreStates would become the
second largest commercial banking organization in Pennsylvania, controlling approximately $23.5 billion in deposits, representing 17.6 percent of state deposits.6
Interstate
Analysis
Section 3(d) of the BHC Act, as amended by section 101 of
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, allows the Board to approve an application by a bank holding company to acquire control of a
bank located in a state other than the home state of such
bank holding company, if certain conditions are met. For
purposes of the BHC Act, the home state of CoreStates is
Pennsylvania.7 As noted above, Meridian controls banks in
Pennsylvania, New Jersey, and Delaware. The conditions
for an interstate acquisition enumerated in section 3(d) are
met in this case.8 In view of all the facts of record, the
Board is permitted to approve this proposal under section
3(d) of the BHC Act.
Competitive and Other
Considerations
CoreStates and Meridian operate subsidiary banks in Pennsylvania, New Jersey, and Delaware. CoreStates and Meridian compete directly in ten banking markets in these
6. On consummation of this proposal, CoreStates would become the
fourth largest commercial banking organization in New Jersey, controlling approximately $5.2 billion in state deposits, and the third
largest commercial banking organization in Delaware, controlling
approximately $1.2 billion in state deposits.
7. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is the state in which the operations of the bank
holding company's banking subsidiaries were principally conducted
on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later.
8. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
CoreStates is adequately capitalized and adequately managed. Meridian's subsidiary banks have been in existence and have continuously
operated for at least the minimum period of time required under
applicable state law. In addition, on consummation of this proposal,
CoreStates and its affiliates would control less than 10 percent of the
total amount of deposits of insured depository institutions in the
United States, and less than 30 percent of the total amount of deposits
of insured depository institutions in New Jersey or Delaware. All
other requirements of section 3(d) of the BHC Act also would be met
on consummation of this proposal.
432
Federal Reserve Bulletin • May 1996
states.9 On consummation of the proposal, eight of these
banking markets would remain unconcentrated or moderately concentrated,10 and the level of concentration in one
market would remain unchanged, as measured by the
Herfindahl-Hirschman Index ("HHI").11 In addition, numerous competitors would remain in these markets.
In the Berks County banking market,12 CoreStates is the
third largest banking or thrift organization ("depository
institution"), controlling deposits of approximately
$554 million, representing 11.8 percent of total deposits in
depository institutions in the market ("market deposits").
Meridian is the largest depository institution in the market,
controlling deposits of approximately $1.9 billion, representing 40.6 percent of market deposits. On consummation
of this proposal, CoreStates would become the largest
depository institution in the market, controlling deposits of
approximately $2.4 billion, representing 52.4 percent of
market deposits. The HHI in the market would increase by
957 points to 3061.
In order to mitigate the potential anticompetitive eifects
of this acquisition in the Berks County banking market,
CoreStates has committed to divest 10 branches with deposits of approximately $413 million to one or more acquirors whose purchase of branches would not substantially
lessen competition.13 On consummation of the proposed
9. These are the Berks County, Harrisburg, Lancaster, Lehigh Valley, Philadelphia, Scranton/Wilkes-Barre, and York banking markets
in Pennsylvania; the Vineland and Metropolitan New York/New Jersey banking markets in New Jersey; and the Wilmington banking
market in Delaware.
10. Market share data are as of June 30, 1995. Market share data are
based on calculations in which the deposits of thrift institutions are
included at 50 percent. The Board previously has indicated that thrift
institutions have become, or have the potential to become, significant
competitors of commercial banks. See Midwest Financial Group, 75
Federal Reserve Bulletin 386 (1989); National City Corporation, 70
Federal Reserve Bulletin 743 (1984). Thus, the Board regularly has
included thrift deposits in the calculation of market share on a
50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal
Reserve Bulletin 52 (1991).
11. The HHI in these markets would increase as follows: Harrisburg
(89 points to 1064); Lancaster (158 points to 1260); Lehigh Valley
(136 points to 1360); Philadelphia (266 points to 1471); Scranton/
Wilkes-Barre (13 points to 1140); York (38 points to 1100); Vineland
(154 points to 1551); and Metropolitan New York/New Jersey (1 point
to 706). The Wilmington banking market HHI would remain unchanged at 1933 points. Under the revised Department of Justice
Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a
market in which the post-merger HHI is less than 1000 is considered
to be unconcentrated, and a market in which the post-merger HHI is
between 1000 and 1800 is considered to be moderately concentrated.
The Justice Department has informed the Board that a bank merger or
acquisition generally will not be challenged (in the absence of other
factors indicating anticompetitive effects) unless the post-merger HHI
is at least 1800 and the merger increases the HHI by more than 200
points. The Justice Department has stated that the higher than normal
HHI thresholds for screening bank mergers for anticompetitive effects
implicitly recognize the competitive effect of limited-purpose lenders
and other non-depository financial institutions.
12. The Berks County banking market is approximated by Berks
County, Pennsylvania.
13. CoreStates has committed to execute, prior to consummation of
this proposal, agreements to sell these branches to one or more
divestitures, the HHI in the Berks County market would
increase by no more than 200 points to 2304.
A number of other factors mitigate the potential effect of
this proposal on competition in the Berks County banking
market. Sixteen commercial banking organizations would
remain in the market, including a de novo commercial bank
that entered the market in 1988 and now is the sixth largest
depository institution in the market. Moreover, data indicate the Berks County banking market is attractive for
entry. These data show that the population of Berks County
grew 7.7 percent from 1980 to 1990, and 3.6 percent from
1990 to 1995, compared to less than 1 percent and
1.6 percent during these respective periods for Pennsylvania as a whole. The median household income in Berks
County is also the tenth highest among 67 counties in the
state.14
The Board also considered the views of the Justice
Department and the Pennsylvania Attorney General. The
Justice Department has advised the Board that, subject to
completion of the divestitures proposed by CoreStates, the
proposal would not result in a significantly adverse effect
on competition in any relevant banking market.15 The
Pennsylvania Attorney General also has reviewed the competitive effects of the proposal and similarly has concluded
that, subject to completion of the proposed divestitures, the
proposal would not result in significantly adverse effects on
competition in any banking market in Pennsylvania.
Based on all the facts of record, including the commitments made in connection with this application, and for the
reasons discussed in this order, the Board concludes that
consummation of this proposal is not likely to have a
significantly adverse effect on competition or on the concentration of resources in any relevant banking market.16
depository institutions in a sale that would not cause the increase in
the market share following the divestiture to exceed Justice Department guidelines. CoreStates also has committed that the divestitures
will be completed within 180 days of consummation and, if they are
not, that it will transfer the unsold branches to an independent trustee
that is acceptable to the Board and will be instructed to sell the
branches promptly. See BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 11 Federal Reserve Bulletin 484 (1991). CoreStates has committed to submit to the Board, prior to consummation, an executed trust
agreement acceptable to the Board.
14. Population per banking office is 3,011 in Berks County, compared to an average of 2,860 persons per banking office in Pennsylvania as a whole and 2,767 persons per banking office in MSAs in the
state. Rand McNally Commercial Atlas (1995). The average dollar
volume of deposits per banking office in Berks County is
$43.6 million, compared to an average of $37.8 million per banking
office in Pennsylvania as a whole and $32.5 million per banking office
in MSAs in the state.
15. In reaching this conclusion, the Justice Department required the
divestiture of one branch with deposits of $31 million located in
Lebanon, Pennsylvania, in addition to the divestitures discussed
above.
16. In analyzing the competitive effects of this proposal, the Board
reviewed comments received from an individual maintaining that the
elimination of a competitor would adversely affect the deposit insurance coverage provided to customers of both institutions generally,
and in the Lehigh Valley banking market specifically. A comment
from another individual alleged that Meridian Bank's size and share
Legal Developments
This determination is conditioned on completion of the
divestitures proposed by CoreStates in connection with this
proposal.
The Board also has concluded in light of all the facts of
record that the financial and managerial resources17 and
future prospects of CoreStates, Meridian, and their respective subsidiaries, as well as the other supervisory factors
the Board must consider under section 3 of the BHC Act,
are consistent with approval.18
Convenience and Needs
Considerations
In acting on an applications under section 3 of the BHC
Act, the Board must consider the convenience and needs of
the communities to be served and take into account the
records of the relevant depository institutions under the
Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). The CRA requires the federal financial supervisory agencies to encourage financial institutions to help
meet the credit needs of the local communities in which
they operate, consistent with their safe and sound operation. To accomplish this end, the CRA requires the appropriate federal supervisory authority to "assess the institution's record of meeting the credit needs of its entire
community, including low- and moderate-income neighof market deposits permitted it to have an adverse influence on the
financial management of county and municipal governments in Berks
County by encouraging local government entities to incur excessive
amounts of public debt and to enter into publicly financed economic
redevelopment projects that interfere with private business initiatives.
17. In reviewing financial and managerial factors, the Board carefully considered comments alleging that a nonbanking lending subsidiary of CoreStates acted improperly in two commercial bankruptcy
cases in which it was a creditor and that Meridian Bank attempted to
collect from the commenter on a debt not legally owed. The facts of
record do not support the allegations concerning the two bankruptcy
proceedings involving CoreStates or the allegations regarding the
collection efforts of Meridian Bank. The Board also notes that such
matters are within the jurisdiction of the bankruptcy court or the court
in which the collection efforts are maintained to provide relief if the
allegations can be substantiated.
The Board also considered comments that a nonbanking investment
advisory subsidiary of Meridian failed to disclose a conflict of interest
to certain of its clients concerning low-quality debentures purchased
for their accounts. The Securities and Exchange Commission ("SEC")
investigated this incident and has taken the actions it deems appropriate to enforce the federal securities laws. The record indicates that
Meridian voluntarily reimbursed its clients for any losses sustained
when the conflict of interest was discovered at its investment advisory
subsidiary. N o current employees of Meridian were disciplined in the
1995 proceeding before the Securities and Exchange Commission as a
result of this incident, and all the recommendations made by an
independent auditor to improve the operations of the subsidiary have
been implemented. These allegations involve isolated instances in the
overall operations of CoreStates and Meridian, and have been considered by the Board in light of all the facts of record, including reports
of examination assessing the managerial resources of CoreStates and
Meridian.
18. An individual commenter also alleged that Meridian Bank and
other commercial business interests in Berks County have manipulated local government economic redevelopment projects for private
gain. The facts of record do not support the commenter's conclusion
that Meridian Bank has acted improperly in its dealings with local
government officials in Berks County.
433
borhoods, consistent with the safe and sound operations of
such institution," and to take that record into account in the
evaluation of bank expansion proposals.19
In reviewing the effect of this proposal on convenience
and needs, the Board carefully considered comments from
an individual who generally maintains that the management of CoreStates and Meridian are indifferent to the
needs of the public20 and that branch closings resulting
from the proposal would have an adverse effect on the
community.21 The Board has reviewed the CRA performance records of CoreStates and Meridian, comments and
CoreStates's responses, and all other relevant facts of
record in light of the CRA, the Board's regulations, and the
Statement of the Federal Financial Supervisory Agencies
Regarding the Community Reinvestment Act ("Agency
CRA Statement").22
The Board has carefully considered the CRA performance records of the subsidiary banks of CoreStates and
Meridian, respectively, including in particular the relevant
reports of examinations of CRA performance. The Agency
CRA Statement provides that a CRA examination is an
important and often controlling factor in the consideration
of an institution's CRA record and that reports of these
examinations will be given great weight in the applications
process.23 CoreStates's lead bank, CoreStates Bank, received a CRA performance rating of "outstanding" from
its primary federal supervisor, the OCC, at its most recent
examination for CRA performance as of August 21, 1995
("1995 Examination"). Meridian's lead bank, Meridian
Bank, also received a CRA performance rating of "outstanding" from the Federal Reserve Bank of Philadelphia
at its most recent examination for CRA performance as of
June 20, 1994.24 All other subsidiary banks of CoreStates
and Meridian received either "outstanding" or "satisfactory" ratings at their most recent CRA performance examinations.
19. 12 U.S.C. § 2903.
20. In particular, this individual alleges that Meridian Bank has
failed to fulfill its public representations that it would support the
redevelopment of the downtown area of Reading, Pennsylvania.
21. This commenter also maintains that the merger would result in
vacant real estate at locations currently occupied by CoreStates and
Meridian as separate institutions.
22. 54 Federal Register 13,742 (1989).
23. 54 Federal Register at 13,742.
24. Examiners noted that Meridian Bank's community development
activities include efforts focusing on Reading, Pennsylvania. The bank
supports the Greater Berks Development Fund, a fund designed to
improve the local economy of Reading and Berks County by providing financing for the acquisition, construction, and renovation of
manufacturing facilities. In 1990, Meridian Bank established the Meridian Community Partnership Development Corporation, which
makes debt and equity investments in corporations and projects that
foster community redevelopment, including economic development in
specific geographic areas in Pennsylvania. CoreStates Bank also participates in homebuyer assistance programs focused on Reading.
These include the PINES project, offered in partnership with Neighborhood Housing Services and three other banks, and the Purchase/
Rehab Mortgage Plan, offered by the bank in Berks County and
limited additional areas.
434
Federal Reserve Bulletin • May 1996
The 1995 Examination concluded that CoreStates Bank's
geographic distribution of credit applications and credit
extensions demonstrated reasonable penetration in all segments of the bank's community, including low- and
moderate-income areas. Examiners also noted that credit
ascertainment efforts included ongoing contact with community representatives and that products offered effectively
responded to the credit needs of the community.25 CoreStates Bank also uses a variety of methods to inform all
parts of its community of credit products available, including efforts through its Community Development Department that focus on direct contact with community leaders
and specialty advertisements in ethnically diverse community newspapers.
CoreStates Bank's Regional Urban Lending department
offers a number of mortgage products to assist in meeting
the credit needs of low- and moderate-income individuals.
These programs include the Delaware Valley Mortgage
Plan, which features flexible underwriting standards. CoreStates Bank originated 762 loans, totalling $27.9 million,
under this program in 1994 as compared to 568 loans,
totalling $17.3 million, originated in 1993. Other mortgage
programs assisting low- and moderate-income borrowers
include the Philadelphia Rehabilitation Plan, the Homestart
Program, and the 100% City Program.
Examiners also noted that CoreStates Bank actively participated in government sponsored lending programs. The
bank offers two expedited loan programs sponsored by the
Small Business Administration, the LOWDOC and the
FAST TRACK programs.26 In addition, CoreStates Bank
participates in the Philadelphia Housing Authority's Action Loan Program, which provides financing to homeowners who meet certain income requirements and who may
not have equity in their homes.27 The bank also participates
in several funds, including the Philadelphia Small Business
Micro Loan Fund and the Hispanic Chamber Small Business Micro Loan Fund, that are designed to make small
loans to businesses in amounts of $5,000 to $25,000 for
working capital and improvements. The 1995 Examination
also found that CoreStates Bank consistently maintained a
high level of participation in community development
projects throughout its delineated community.
CoreStates has indicated that it does not have a final
branch closing plan and cannot estimate how many
branches in low- and moderate-income census tracts would
be closed or consolidated. According to CoreStates, over
25. One commenter contended that the proposal would reduce the
availability of banking products for low- and moderate-income banking customers. The Board notes that CoreStates Bank offers several
basic and low-cost products and services, such as a no-fee checking
account for senior citizens and a "no frills" checking account with a
low monthly maintenance fee and a small minimum opening balance,
and would offer these products following consummation of this proposal.
26. Total small-business loans outstanding at year-end 1994 were
$344.1 million, as compared to $134 million in total small-business
loans outstanding at year-end 1993.
27. In 1994, CoreStates Bank originated 24 of these loans totalling
$325,000.
half of the branches under consideration for closure would
be less than one mile from another CoreStates branch. The
Board has carefully reviewed CoreStates's record of closing branches under its branch closing policy. Examiners
noted in the 1995 Examination that the bank has a well
defined branch closing policy, the key criteria of which
include service availability, community views, and CRA
considerations. During the evaluation period for the 1995
Examination, none of the 32 branches closed by the bank
were in low- or moderate-income areas.
The Board also notes that recent amendments to the
Federal Deposit Insurance Act require an insured depository institution to submit a notice of any proposed branch
closing to the appropriate federal banking agency no later
than 90 days before the date of the proposed branch closing.28 Customers of the insured depository institution also
must be notified. The Joint Agency Policy Statement on
Branch Closings ("Joint Policy Statement") requires that
the notice: (1) identify the branch to be closed and specify
the proposed date of closing; (2) provide a detailed statement of the reasons for the decision to close the branch;
and (3) provide statistical or other information in support
of such reasons consistent with the institution's written
policy for branch closings.29
The Board has carefully considered all the facts of
record, including the comments received, in reviewing the
convenience and needs factor under the BHC Act.30 Based
on a review of the entire record of performance of CoreStates and Meridian, the Board concludes that their records
of helping to meet the credit needs of their communities,
including low- and moderate-income neighborhoods, are
consistent with approval of these applications.
28. See section 228 of the Federal Deposit Insurance Corporation
Improvement Act of 1991, Pub. L. No. 102-242, 105 Stat. 2308
(1991), which added a new section 39 to the Federal Deposit Insurance Act (codified at 12 U.S.C. § 1831r-l).
29. 58 Federal Register 49,083 (1993). The Joint Policy Statement
also provides that the branch closing notice procedure does not apply
to the movement of a branch within its immediate neighborhood that
does not substantially affect the nature of the branch's business or the
customers it serves. Movements over short distances are viewed
essentially as branch consolidations or relocations under the Joint
Policy Statement.
30. A commenter maintained that the community would be adversely affected by job losses resulting from the proposal, particularly
in Berks County. The Board has previously concluded that the effect
of a proposed acquisition on employment in a community is not
among the factors included in the BHC Act. See Wells Fargo &
Company, 82 Federal Reserve Bulletin 445 (1996). The convenience
and needs factor under the BHC Act has been consistently interpreted
by the federal banking agencies, the courts, and Congress to relate to
the effect of a proposal on the availability and quality of banking
services in the community. The Board also notes that CoreStates
indicates that it has taken several steps to help minimize job losses.
For example, CoreStates has instituted a limited hiring freeze to
preserve as many open positions as possible for employees whose
positions are eliminated, and implemented a program to identify and
train such employees who have job skills directly applicable to other
business lines in CoreStates. CoreStates also has indicated that it will
provide enhanced severance benefits and outplacement services to
employees who cannot be immediately placed.
Legal Developments
Nonbanking
Activities
CoreStates also requested Board approval, pursuant to section 4(c)(8) of the BHC Act, to acquire the nonbanking
subsidiaries of Meridian listed in the Appendix and thereby
engage in the nonbanking activities described therein. Section 4(c)(8) of the BHC Act provides that a bank holding
company may, with Board approval, engage in any activity
that the Board determines to be "so closely related to
banking or managing or controlling banks as to be a proper
incident thereto." The Board previously has determined by
regulation and order that the proposed activities are closely
related to banking within the meaning of section 4(c)(8) of
the BHC Act.31 CoreStates has committed that it will
conduct all the proposed activities in accordance with the
Board's regulations and the Meridian Order.
In order to approve these notices, the Board also must
determine that the acquisition of Meridian's nonbanking
subsidiaries and performance of the proposed activities by
CoreStates "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects,
such as undue concentration of resources, decreased or
unfair competition, or unsound banking practices." As part
of the Board's evaluation of these factors, the Board considers the financial and managerial resources of the notificant and its subsidiaries and the effect the transaction
would have on such resources. Based on all the facts of
record, the Board concludes that financial and managerial
considerations are consistent with approval.
The Board also concludes, on the basis of the facts of
record, that this proposal should enable CoreStates to provide greater convenience and improved services to its
customers. In addition, while CoreStates operates subsidiaries that engage in several of these activities in competition with Meridian, the record indicates that there are
numerous providers of these services and that the markets
for these services are unconcentrated. There is no evidence
in the record to indicate that consummation of this proposal is likely to result in any significantly adverse effects,
such as undue concentration of resources, decreased or
unfair competition, conflicts of interests, or unsound banking practices that would outweigh the public benefits of
this proposal. Accordingly, the Board has determined that
the balance of public interest factors it must consider under
section 4(c)(8) of the BHC Act is favorable and consistent
with approval.
CoreStates also requested approval under section 25 of
the Federal Reserve Act (12 U.S.C. §§ 601-604a) and
section 211.3(a)(1) of the Board's Regulation K (12 C.F.R.
211.3(a)(1)) for approval to establish a branch in the Cayman Islands, at the location of the Meridian Bank branch
that CoreStates would acquire as a result of this transaction. The Board has considered the factors it is required to
31. See 12 C.F.R. 225.25(b)(1), (3), (4), (8)(i), (15)(i), and (16);
Meridian Bancorp, Inc., 80 Federal Reserve Bulletin 736 (1994)
(investment advisory and private placement activities) ("Meridian
Order").
435
consider when reviewing an application to establish a
branch pursuant to section 25 of the Federal Reserve Act
and, based on all the facts of record, and for the reasons
discussed in this order, finds these factors to be consistent
with approval.
Conclusion
Based on the foregoing and all other facts of record,
including all the commitments provided by CoreStates in
connection with this proposal, the Board has determined
that the applications and notices should be, and hereby are,
approved. The Board's approval is expressly conditioned
on compliance by CoreStates with all the commitments
made by CoreStates in connection with this proposal and
with the conditions referred to in this order, including the
commitment of CoreStates to divest certain branches. The
Board's determination on the proposed nonbanking activities also are subject to all the conditions set forth in
Regulation Y, including those in sections 225.7 and
225.23(g) of Regulation Y, and to the Board's authority to
require such modification or termination of the activities of
a bank holding company or any of its subsidiaries as the
Board finds necessary to ensure compliance with, or to
prevent evasions of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder. These
commitments and conditions shall be deemed to be conditions imposed in writing by the Board in connection with
its findings and decisions, and, as such, may be enforced in
proceedings under applicable law.
The acquisitions of Meridian's subsidiary banks under
this proposal shall not be consummated before the fifteenth
calendar day following the effective date of this order, and
the banking and nonbanking transactions shall not be consummated later than three months after the effective date of
this order, unless such period is extended for good cause by
the Board or by the Federal Reserve Bank of Philadelphia,
acting pursuant to delegated authority.
By order of the Board of Governors, effective March 25,
1996.
Voting for this action: Chairman Pro Tempore Greenspan and
Governors Kelley, Lindsey, Phillips, and Yellen.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix
Nonbanking Subsidiaries of Meridian to Be Acquired by
CoreStates
(1) McGlinn Capital Management, Inc., Wyomissing, Pennsylvania, and thereby engage in investment advisory and private placement activities. See Meridian Bancorp, Inc., 80
Federal Reserve Bulletin 736 (1994);
(2) Meridian Acceptance Corporation, Trenton, New Jersey,
and thereby engage in automobile purchase financing activ-
436
Federal Reserve Bulletin • May 1996
ities pursuant to section 225.25(b)(1) of the Board's Regulation Y;
(3) Meridian Asset Management, Inc., Malvern, Pennsylvania,
and thereby engage in trust activities pursuant to section
225.25(b)(3) of the Board's Regulation Y;
(4) Meridian Commercial Finance Corporation, Philadelphia,
Pennsylvania, and thereby engage in commercial lending
activities pursuant to section 225.25(b)(1) of the Board's
Regulation Y;
(5) Meridian Investment Company, Malvern, Pennsylvania,
and thereby engage in investment advisory activities pursuant to section 225.25(b)(4) of the Board's Regulation Y;
(6) Meridian Life Insurance Company, Phoenix, Arizona, and
thereby engage in credit-related insurance underwriting activities pursuant to section 225.25(b)(8)(i) of the Board's
Regulation Y;
(7) Meridian Securities, Inc., Reading, Pennsylvania, and
thereby engage in securities brokerage and related advisory
activities pursuant to section 225.25(b)(15)(i) and (ii) of the
Board's Regulation Y, and underwriting and dealing in
government obligations and money market instruments pursuant to section 225.25(b)(16) of the Board's Regulation Y;
(8) Meridian Trust Company, Malvern, Pennsylvania, and
thereby engage in trust activities pursuant to section
225.25(b)(3) of the Board's Regulation Y;
(9) Meridian Trust Company of California, San Francisco,
California (in dissolution), and thereby engage in trust
activities pursuant to section 225.25(b)(3) of the Board's
Regulation Y.
The Mitsubishi Bank, Limited
Tokyo,Japan
Order Approving Acquisition of Banks, Establishment of
Branches, Agencies, and Representative Offices, and
Notice to Engage in Nonbanking Activities
The Mitsubishi Bank, Limited, Tokyo, Japan ("Mitsubishi"), a bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), has applied for
Board approval under section 3 of the BHC Act (12 U.S.C.
§ 1842) to acquire The Bank of Tokyo, Ltd., Tokyo, Japan
("Bank of Tokyo"), also a bank holding company, and its
subsidiary banks, Union Bank, San Francisco, California
("Union Bank"); The Chicago-Tokyo Bank, Chicago, Illinois ("CTB"); and The Bank of Tokyo Trust Company,
New York, New York ("BOTT").1 Mitsubishi also has
applied for Board approval under section 4(c)(8) of the
1. Mitsubishi would merge with Bank of Tokyo, with Mitsubishi as
the surviving corporation. As part of this proposal, Union Bank would
transfer all of its banking assets and liabilities to Mitsubishi's subsidiary bank, The Bank of California, N.A., San Francisco, California
("BanCal"), and BanCal would change its name to Union Bank of
California, N.A. ("UBC"). The Office of the Comptroller of the
Currency ("OCC") approved this transfer on December 29, 1995.
After consummation of this proposal, UBC would continue to be
owned by an intermediate bank holding company that is 81-percent
owned by Mitsubishi.
BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 of
the Board's Regulation Y (12 C.F.R. 225.23) to acquire the
nonbanking subsidiaries of Bank of Tokyo (see Appendix)
and thereby engage nationwide in permissible nonbanking
activities.
Mitsubishi also proposes to acquire all branches, agencies, and representative offices of Bank of Tokyo in the
United States. Accordingly, Mitsubishi has applied under
sections 5(a) and 7(d) of the International Banking Act
(12 U.S.C. §§ 3103(a) and 3105(d)) ("IBA") and section 211.24 of the Board's Regulation K (12 C.F.R. 211.24)
to establish branches in Los Angeles and San Francisco,
California; Chicago, Illinois; New York, New York; Portland, Oregon; and Seattle, Washington; and agencies in
Coral Gables, Florida; Atlanta, Georgia; and Honolulu,
Hawaii. In addition, Mitsubishi has applied under section 10(a) of the IBA (12 U.S.C. § 3107(a)) and section
211.24 of Regulation K (12 C.F.R. 211.24) to establish
representative offices in Washington, D.C.; and Dallas and
Houston, Texas.
Mitsubishi also has given notice under sections 211.4
and 211.5 of Regulation K (12 C.F.R. 211.4 and 211.5) to
acquire BOT North America International, Inc., New York,
New York ("BOTNA"), an Agreement corporation under
section 25 of the Federal Reserve Act (12 U.S.C. §§ 601604a).2 In addition, BanCal has given notice under section 25 of the Federal Reserve Act and section 211.3 of
Regulation K (12 C.F.R. 211.3) to acquire the foreign
branches of Union Bank in Guam, the Commonwealth of
the Northern Mariana Islands, and the Cayman Islands.
Notice of this proposal, affording interested persons an
opportunity to submit comments, has been published in the
Federal Register (60 Federal Register 62,858 (1995)) and
in a newspaper of general circulation in each community
where Mitsubishi would establish a branch, agency, or
representative office as a result of this transaction.3 The
time for filing comments has expired, and the Board has
considered the applications and notices and all comments
received in light of the factors set forth in the BHC Act, the
Federal Reserve Act, and the IBA.
Mitsubishi, with approximately $553 billion in consolidated assets, is the sixth largest banking organization in the
world and controls less than 1 percent of total banking
2. BOTNA, a wholly owned subsidiary of Bank of Tokyo, holds
100 percent of the voting shares of Bank of Tokyo Mexico, S.A.,
Mexico City, Mexico.
3. Notices were published in the following communities: Los Angeles, California (The Los Angeles Times, February 12, 1996); San
Francisco, California (The San Francisco Chronicle, February 11,
1996); Washington, D.C. (The Washington Post, February 11, 1996);
Coral Gables, Florida (The Miami Herald, February 11, 1996); Atlanta, Georgia (The Atlanta Journal and Constitution, February 12,
1996); Honolulu, Hawaii (The Honolulu Advertiser, February 12,
1996); Chicago, Illinois (The Chicago Tribune, February 11, 1996);
New York, New York (The New York Times, February 12, 1996);
Portland, Oregon (The Oregonian, February 11, 1996); Dallas, Texas
(The Dallas Morning News, February 11, 1996); Houston, Texas (The
Houston Chronicle, February 11, 1996); and Seattle, Washington (The
Seattle Times, February 12, 1996).
Legal Developments
assets in the United States.4 In addition to its subsidiary
bank in California, Mitsubishi operates the following banking institutions in the United States: branches in Los Angeles, California; Chicago, Illinois; and New York, New
York; an agency in Houston, Texas; and representative
offices in San Francisco, California; Atlanta, Georgia; Minneapolis, Minnesota; Columbus, Ohio; Portland, Oregon;
and Seattle, Washington. Mitsubishi also engages in a
number of permissible nonbanking activities nationwide.
Bank of Tokyo, with approximately $273 billion in
consolidated assets, is the 22d largest banking organization
in the world and controls less than 1 percent of total
banking assets in the United States. In addition to its
subsidiary banks in California, Illinois, and New York,
Bank of Tokyo operates the following banking institutions
in the United States: branches in Chicago, Illinois; Portland, Oregon; and Seattle, Washington); agencies in
Los Angeles and San Francisco, California; Coral Gables,
Florida; Atlanta, Georgia; Honolulu, Hawaii; New York,
New York; and Dallas, Texas; and representative offices in
Washington, D.C., and Houston, Texas.
On consummation of this proposal, the resulting institution, which would be renamed Bank of Tokyo-Mitsubishi,
Ltd. ("BTM"), would become the largest banking organization in the world, with consolidated assets of approximately $826 billion, and would control less than 1 percent
of total banking assets in the United States.5 BTM would
remain a qualifying foreign banking organization under
section 211.23(b) of Regulation K (12 C.F.R. 211.23(b)).
Interstate
Analysis
As part of this proposal, Mitsubishi would acquire CTB,
located in Illinois, and BOTT, located in New York. Section 3(d) of the BHC Act, as amended by section 101 of the
Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994 ("Riegle-Neal Act"), allows the Board to
approve an application by a bank holding company to
acquire control of a bank located in a state other than the
home state of such bank holding company, if certain conditions are met.6 The conditions are met in this proposal,7
4. Asset and ranking data are as of September 30, 1995.
5. Assets held by non-FDIC insured depository institutions are not
included in this calculation.
6. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is the state in which the operations of the bank
holding company's banking subsidiaries were principally conducted
on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later. For purposes of the BHC Act,
the home state of Mitsubishi is California.
7. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
As discussed more fully elsewhere in this order, Mitsubishi is adequately capitalized and adequately managed. On consummation of
this proposal, BTM and its affiliates would control less than 10 percent
of the total amount of deposits of insured depository institutions in the
United States and less than 30 percent of the total amount of deposits
of insured depository institutions in Illinois or New York. Bank of
Tokyo's subsidiary banks in Illinois and New York have been in
existence and continuously operated for the minimum period of time
required under Illinois and New York law, respectively.
437
and in view of all the facts of record, the Board is permitted to approve the acquisition of BOTT and CTB under
section 3(d) of the BHC Act.
Mitsubishi also proposes to establish state-licensed
branches in Oregon and Washington. Under section 5(a)(2)
of the IBA, as amended by section 104 of the Riegle-Neal
Act, a foreign bank, with the approval of the Board and the
appropriate state banking supervisor, may establish and
operate a state-licensed branch or agency in any state
outside the home state of the foreign bank to the extent a
state bank with the same home state as the foreign bank
could do so under section 44 of the Federal Deposit Insurance Act ("FDI Act"). 8
Section 44 of the FDI Act permits the Board to approve
a merger transaction under the Bank Merger Act between
state banks with different home states prior to June 1, 1997,
if the home state of each bank, as of the date of the Board's
approval, expressly permits interstate merger transactions
with all out-of-state banks on an equal basis.9 California
and Oregon law satisfy this requirement.10 All other applicable conditions of section 44 of the FDI Act also are met
in this proposal.11 In view of all the facts of record,12 the
8. 12 U.S.C. § 3103(a)(2) and (a)(5); 12 U.S.C. § 1831u. The home
state of a foreign bank with a branch, agency, subsidiary commercial
lending company, or subsidiary bank in more than one state is the state
selected by the foreign bank from among such states. 12 U.S.C.
§ 3103(c)(1). For purposes of the IBA, the home state of Mitsubishi is
California. In connection with this proposal, Bank of Tokyo has given
notice to the Board under section 211.22(b) of Regulation K
(12 C.F.R. 211.22(b)) of its intention to change its home state to
Oregon before consummation of this proposal.
9. 12 U.S.C. § 1831u(a)(3)(A).
10. See 1995 Cal. Stat. ch. 480, § 3820 et seq.; 1995 Or. Laws S.B.
308, § 3.
11. Section 5(a) of the IBA requires that certain conditions of
section 44 of the FDI Act be met in order for the Board to approve an
interstate banking transaction under section 5(a)(2) of the IBA.
12 U.S.C. § 3103(a)(3)(C) (referring to sections 44(b)(1), 44(b)(3)
and 44(b)(4) of the FDI Act, 12 U.S.C. §§ 1831u(b)(l), (b)(3) and
(b)(4)). As discussed more fully elsewhere in this order, each of
Mitsubishi and Bank of Tokyo was adequately capitalized as of the
date these applications and notices were filed, and, upon consummation of this proposal, BTM would continue to be adequately capitalized and adequately managed. Bank of Tokyo's branch in Portland,
Oregon, has been in existence and continuously operated for the
minimum period of time required under Oregon law. Community
reinvestment considerations, as discussed more fully elsewhere in this
order, also are consistent with approval. All other applicable requirements of section 44 of the FDI Act also would be met on consummation of this proposal.
12. In connection with its change of its home state, Bank of Tokyo
is required under section 211.22(b)(2) of Regulation K (12 C.F.R.
211.22(b)(2)) to conform all domestic branches and investments in
banks that it acquired in reliance on its original selection of California
as its home state to the domestic branches and investments in banks
that would have been permissible had it originally selected Oregon as
its home state. Based on a review of Bank of Tokyo's domestic
branches and investments in banks in the United States and the
relevant federal and state law concerning interstate banking at all
relevant times, the Board has determined that, consistent with the
requirements of Regulation K, Bank of Tokyo could retain all its
branches and investments in banks in the United States after changing
its home state to Oregon.
438
Federal Reserve Bulletin • May 1996
Board is permitted to approve this proposal if the remaining criteria of section 5(a) of the IBA are met.13
In addition, under section 5(a)(7) of the IBA, the Board
may approve an application by a foreign bank to establish
and operate an agency or a state-licensed branch that
receives only deposits that may be received by an Edge Act
corporation under section 25A of the Federal Reserve Act
(12 U.S.C. §§ 611-631) ("limited branch") in any state
outside its home state, provided that the operation and
establishment of the agency or limited branch is expressly
permitted by the state in which it would be located and is
approved by the relevant state banking supervisor.14 Under
this proposal, Mitsubishi would establish agencies outside
its home state in Florida, Georgia, and Hawaii and limited
branches outside its home state in Illinois and New York.
Based on a review of the relevant statutory law of each of
these states, and subject to the condition that Mitsubishi
receive the approval of the state banking supervisor in each
of these states, the Board has determined that Mitsubishi
may establish agencies and limited branches in these states
when it satisfies the other conditions in the IBA.
Under section 10(d) of the IBA, the Board is prohibited
from approving the establishment of a representative office
in any state in contravention of state law.15 Based on a
review of the relevant statutory law of the District of
Columbia and Texas, the Board has determined that Mitsubishi's establishment of representative offices is consistent with the laws of these states.
Competitive
The subsidiary banks of Mitsubishi and Bank of Tokyo
compete directly in nine banking markets in California.17
After consummation of this proposal, all these banking
markets would remain unconcentrated or moderately concentrated18 as measured by the Herfindahl-Hirschman Index ("HHI"),19 and numerous competitors would remain
in each of the markets. Based on all the facts of record, the
Board concludes that consummation of the proposal would
not result in a significantly adverse effect on competition in
any relevant banking market.
Financial, Managerial, and Other Supervisory
Considerations
A. Evaluation under the BHC Act
In order to approve an application by a foreign bank to
acquire a United States bank or bank holding company, the
Board must determine under the BHC Act and Regulation Y that the foreign bank is subject to comprehensive
supervision or regulation on a consolidated basis by its
home country supervisor.20 The Board also must determine
that the foreign bank has provided adequate assurances that
it will make available to the Board such information on its
operations and activities and those of its affiliates that the
Board deems appropriate to determine and enforce compliance with applicable law.21
Considerations
Mitsubishi is the seventh largest commercial banking organization in California, controlling one bank with deposits
of $3.5 billion, representing approximately 1.5 percent of
total deposits in commercial banking organizations in the
state.16 Bank of Tokyo is the fourth largest commercial
banking organization in California, controlling one bank
with deposits of $13.5 billion, representing approximately
5.9 percent of total deposits in commercial banking organizations in the state. On consummation of this proposal,
BTM would become the third largest commercial banking
organization in California, with deposits of $17 billion,
representing approximately 7.5 percent of total deposits in
commercial banking organizations in the state.
13. The Riegle-Neal Act provides that a bank resulting from an
interstate merger may, with Board approval, retain and operate, as a
branch, any office that any bank involved in the merger transaction
operated as a main office or branch immediately before the merger
transaction. 12 U.S.C. § 1831u(d)(l). The Washington banking authorities do not object to the retention and operation of the Washington
branch after the merger. Accordingly, the Board is authorized to
approve the establishment by Mitsubishi of a branch in Seattle,
Washington. Bank of Tokyo's branches in Illinois and New York,
which are limited purpose branches under the Federal Reserve Act,
are discussed below.
14. 12 U.S.C. § 3103(a)(7).
15. 12 U.S.C. § 3107(d).
16. Deposit data are as of September 30, 1995.
17. These banking markets are the Bakersfield RMA, Fresno RMA,
Los Angeles RMA, Palm Springs RMA, Riverside-San Bernardino
RMA, Sacramento RMA, San Diego RMA, San Francisco-Oakland
RMA, and Stockton RMA.
18. Market data are as of June 30, 1994. Market share data are based
on calculations in which deposits of thrift institutions are included at
50 percent. The Board has previously indicated that thrift institutions
have become, or have the potential to become, significant competitors
of commercial banks. See Midwest Financial Group, 75 Federal
Reserve Bulletin 386 (1989); National City Corporation, 70 Federal
Reserve Bulletin 743 (1984). Thus, the Board has regularly included
thrift deposits in the calculation of market concentration on a
50-percent weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal
Reserve Bulletin 52 (1991).
19. The HHI would increase in each of the markets as follows:
Bakersfield (3 points to 1717), Fresno (11 points to 1542), Los
Angeles (6 points to 909), Palm Springs (6 points to 1223), RiversideSan Bernardino (13 points to 1513), Sacramento (3 points to 1359),
San Diego (27 points to 1243), San Francisco-Oakland (13 points to
1442), and Stockton (4 points to 1332). Under the revised Department
of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29,
1984), a market in which the post-merger HHI is less than 1000 is
considered to be unconcentrated, and a market in which the postmerger HHI is between 1000 and 1800 is considered to be moderately
concentrated. The Justice Department has informed the Board that a
bank merger or acquisition generally will not be challenged (in the
absence of other factors indicating anticompetitive effects) unless the
post-merger HHI is at least 1800 and the merger increases the HHI by
more than 200 points. The Justice Department has stated that the
higher than normal HHI thresholds for screening bank mergers for
anticompetitive effects implicitly recognize the competitive effect of
limited-purpose lenders and other non-depository financial institutions.
20. See 12 U.S.C. § 1842(c)(3)(B); 12 C.F.R. 225.13(b)(5).
21. See 12 U.S.C. § 1842(c)(3)(A); 12 C.F.R. 225.13(b)(4).
Legal Developments
The Board considers a foreign bank to be subject to
comprehensive supervision or regulation on a consolidated
basis if the Board determines that its home country supervisor receives sufficient information on the foreign bank's
worldwide operations, including the bank's relationship to
any affiliate, to assess the bank's overall financial condition
and compliance with law and regulation.22 In making its
determination concerning this proposal, the Board considered the following information.
Mitsubishi is subject to the regulatory and supervisory
authority of the Japanese Ministry of Finance ("MOF")
and the Bank of Japan. The Board previously has determined in connection with applications involving other Japanese banks that the banks were subject to comprehensive,
consolidated home country supervision.23 Mitsubishi is
supervised on substantially the same terms and conditions
as the other Japanese banks. Recently, the MOF announced
plans to enhance its bank supervision in a number of areas,
including strengthening on-site inspections; establishing
more comprehensive guidelines for internal audits, controls, and risk management; increasing enforcement tools
for distressed banking institutions; and promoting closer
information exchanges with foreign supervisory authorities. Based on all the facts of record, the Board has determined that Mitsubishi is subject to comprehensive supervision on a consolidated basis by its home country
supervisor.
Mitsubishi also has committed to make available to the
Board such information on its operations and the operations of its affiliates that the Board deems necessary to
determine and enforce compliance with the IBA, the BHC
Act, and other applicable federal law. To the extent that the
provision of such information may be prohibited by law,
Mitsubishi has committed to cooperate with the Board to
obtain any consents or waivers from third parties that may
be required to permit disclosure. In light of these commitments and other facts of record, and subject to the conditions of this order, the Board concludes that Mitsubishi has
provided adequate assurances of access by the Board to
22. In assessing this standard, the Board considers, among other
factors, the extent to which the foreign bank's home country supervisor:
(i) Ensures that the foreign bank has adequate procedures for
monitoring and controlling its activities worldwide;
(ii) Obtains information on the condition of the foreign bank and
its subsidiaries and offices outside the home country through
regular reports of examination, audit reports, or otherwise;
(iii) Obtains information on the dealings and relationships between the foreign bank and its affiliates, both foreign and domestic;
(iv) Receives from the foreign bank financial reports that are
consolidated on a worldwide basis, or comparable information
that permits analysis of the foreign bank's financial condition on
a worldwide, consolidated basis; and
(v) Evaluates prudential standards, such as capital adequacy and
risk asset exposure, on a worldwide basis.
The Board considers the foregoing to be indicia of comprehensive,
consolidated supervision. No single factor is essential, and other
elements may inform the Board's determination.
23. See The Sumitomo Bank, Limited, 82 Federal Reserve Bulletin
365 (1996); Bank of Tokyo, 81 Federal Reserve Bulletin 279 (1995).
439
any necessary information it may request.24 For these reasons, and based on all the facts of record, the Board
concludes that the supervisory factors it must consider
under section 3 of the BHC Act are consistent with approval.25
The Board also must consider the financial condition of
a foreign bank that files an application under section 3 of
the BHC Act.26 Mitsubishi and Bank of Tokyo must comply with capital standards that conform to the Basle Capital
Accord, as implemented by Japan. Mitsubishi's and Bank
of Tokyo's capital exceeds these minimum standards and is
equivalent to the capital required of a United States banking organization.27
Based on the foregoing and all the facts of record, the
Board has determined that the financial and managerial
resources and future prospects of Mitsubishi, Bank of
Tokyo, and their subsidiaries, are consistent with approval
of this proposal, as are the other supervisory factors the
Board must consider under section 3 of the BHC Act.
B. Evaluation under the IBA
In order to approve an application by a foreign bank to
establish a branch or agency, regardless of its location, the
Board must determine under the IBA and Regulation K
that each of the foreign bank and any parent foreign bank
engages directly in the business of banking outside the
United States and that the foreign bank has furnished to the
Board the information it needs to assess the application
24. Inner City Press/Community on the Move ("Protestant") has
raised issues about the supervision of the offshore branches of Union
Bank to be acquired by BanCal. The Board notes that three of the four
olfshore branches of Union Bank are full-service branches, and that all
the offshore branches of Union Bank, including its "shell" branch in
the Cayman Islands, would be subject to consolidated supervision by
federal banking supervisors. Based on all the facts of record, including
reports of examinations concerning these offshore branches, the Board
believes that the supervisory concerns raised by Protestant are not
present in this case.
25. Protestant contends that published press reports, including accounts of certain actions by a Bank of Tokyo employee in Japan,
indicate lax supervision and inadequate internal controls on the part of
Japanese banks and Japanese banking regulators. Protestant also cites
the consent order entered into by the Board and The Daiwa Bank,
Limited, Osaka, Japan ("Daiwa"), to terminate the banking operations of Daiwa in the United States. The Board has considered these
comments, and in particular, the comments as they relate to the
institutions involved in this acquisition, in light of all the facts of
record, including supervisory information from Japanese banking
supervisors. The employee's actions were detected by Bank of Tokyo
and Bank of Tokyo conducted an internal review of procedures and
investigation to detect similar incidents and found no other defalcations. The matter appears to be an isolated incident solely involving
the institution to be acquired.
26. See 12 C.F.R. 225.13(b)(1).
27. Protestant has questioned whether the financial statements of
Mitsubishi and Bank of Tokyo accurately reflect their financial condition in view of news stories concerning economic and banking conditions in Japan and the exposure of Bank of Tokyo to losses resulting
from the liquidation of jusen companies (real estate-related liabilities).
The Board has taken these comments into consideration in reviewing
the overall financial condition of Mitsubishi and Bank of Tokyo.
440
Federal Reserve Bulletin • May 1996
adequately.28 The Board also must determine that each of
the foreign bank and any parent foreign bank are subject to
comprehensive supervision or regulation on a consolidated
basis by their home country supervisor.29 Section 5(a) of
the IBA also establishes additional criteria that must be met
in order for the Board to approve the establishment of
branches outside a foreign bank's home state under section
5(a)(2) of the IBA.
Mitsubishi engages directly in the business of banking
outside the United States through its extensive banking
operations in Japan, Asia, Europe, and elsewhere. Mitsubishi also has provided the Board with the information
necessary to assess the application adequately. As noted
above, the Board has concluded that Mitsubishi is subject
to comprehensive supervision on a consolidated basis by
its home country supervisors.
The Board also has taken into account the additional
standards set forth in section 7 of the IBA (12 U.S.C.
§ 3105(d)(3) and (4)) and section 211.24(c)(2) of Regulation K (12 C.F.R. 211.24(c)(2)). In this regard, the MOF
and the Bank of Japan have no objection to the establishment of the proposed branches, agencies, and representative offices.
As noted above, Mitsubishi has capital that exceeds the
minimum standards of the Basle Capital Accord and is
considered to be equivalent to that required of a U.S.
banking organization. Mitsubishi has the experience and
capacity to support the proposed offices and has established
controls and procedures for the proposed offices to ensure
compliance with U.S. law. After consummation of the
proposed merger and establishment of the foreign bank
offices described above under the IBA, Mitsubishi would
continue to be adequately capitalized and managed. Based
on the record, the Board has determined that financial and
managerial factors are consistent with approval of the
proposed offices.
As noted above, the Board has concluded that Mitsubishi
has provided adequate assurances of access to any necessary information the Board may request. Mitsubishi also
has filed applications and notices with state banking supervisors in every state in which it would acquire an office of
Bank of Tokyo, and none of the states has objected to this
proposal.
Finally, with respect to the proposed establishment by
Mitsubishi of branches outside its home state pursuant to
section 5(a)(2) of the IBA, the Board has determined that
28. 12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24(c)(1).
29. Id. In acting on an application to establish a representative
office, the Board must take into account the standards applicable to the
establishment of a branch, agency, or commercial lending company.
12 U.S.C. § 3107(a)(2); 12 C.F.R. 211.24(d)(2). Because Mitsubishi
has applied to establish branches and agencies as well as representative offices, the Board has made its findings with respect to the
proposed representative offices in accordance with the stricter standards applicable to branch and agency applications.
the additional conditions specified in section 5(a)(3) of the
IBA are satisfied.30
Convenience and Needs
Considerations
In acting on an application to acquire a depository institution under the BHC Act, the Board must consider the
convenience and needs of the communities to be served
and take into account the records of the relevant depository
institutions under the Community Reinvestment Act
(12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the
federal financial supervisory agencies to encourage financial institutions to help meet the credit needs of the local
communities in which they operate, consistent with their
safe and sound operation. To accomplish this end, the CRA
requires the appropriate federal supervisory authority to
"assess the institution's record of meeting the credit needs
of its entire community, consistent with the safe and sound
operation of such institution," and to take that record into
account in its evaluation of applications.31
The Board received a number of comments supporting
this proposal,32 including comments from communitybased organizations in New York and Chicago that commended the CRA performance records of BOTT and CTB,
particularly their participation in lending programs to support the rehabilitation and purchase of housing for lowand moderate-income households and provision of grants
to support the operating budgets of community organizations. Two umbrella community-based groups in California, representing a number of smaller community organizations, also commended a community reinvestment pledge
made by BanCal and Union Bank to invest $11.25 billion
in California community development activities. Under
this pledge, the two banks have agreed to lend 4.5 percent
of their combined assets (which equal approximately
$25 billion) each year for 10 years to assist inner-city small
businesses, multi-family housing development, low- and
moderate-income homebuyers, and rural housing development. Guidance in administering the pledge will be pro30. The Board finds, pursuant to section 5(a)(3)(B) of the IBA, that
the financial resources of Mitsubishi are equivalent to those required
for a domestic bank to receive approval for interstate branching under
section 44 of the FDI Act. 12 U.S.C. § 3103(a)(3)(B). The Board also
has consulted with the Department of the Treasury concerning capital
equivalency and, as discussed above, has determined that Mitsubishi's
filings with state authorities, as well as factors under the Community
Reinvestment Act (12 U.S.C. § 2901 et seq.) relevant in this context,
are consistent with the proposed establishment of interstate branches
under section 5(a)(2) of the IBA.
31. See 12 U.S.C. § 2903. The Board also must consider relevant
CRA factors in acting on an interstate merger under section 5(a)(3)(C)
of the IBA, as well as any relevant requirements under state community reinvestment laws. Other than with respect to Mitsubishi's ownership of BanCal, Mitsubishi is not currently subject to federal or state
community reinvestment laws.
32. Protestant contends that the Board should give little weight to
comments in favor of this proposal from organizations that receive
grants from Mitsubishi or Bank of Tokyo. The Board has considered
the comments from all commenters supporting or opposing this proposal in light of the full record in this case and the factors the Board is
required to consider under the BHC Act and other relevant statutes.
Legal Developments
vided by an advisory committee made up of community
residents where the banks operate.
Comments opposing the proposal were received from
Inner City Press/Community on the Move ("Protestant").33
These comments criticize the amount of CRA-related lending by BOTT and CTB in their respective delineated
communities. Protestant also expressed concern that the
announced branch closings resulting from this proposal
would have an adverse effect on the convenience and needs
of the communities served by BanCal and Union Bank.34
The Board has carefully reviewed the CRA performance
records of Mitsubishi and Bank of Tokyo, and their respective subsidiary banks, particularly the relevant reports of
examinations of the CRA performance records of these
institutions. The Board also has carefully considered the
comments received on this proposal, as well as Mitsubishi's responses to those comments. The Board has reviewed this information, and all other relevant facts of
record, in light of the CRA, the Board's regulations, and
the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement").35
A. CRA Performance Evaluations of the Subsidiary
Banks of Mitsubishi and Bank of Tokyo
The Agency CRA Statement provides that a CRA examination is an important and often controlling factor in the
consideration of an institution's CRA record, and that
reports of these examinations will be given great weight in
the applications process.36 The Board notes that all the
subsidiary banks of Mitsubishi and Bank of Tokyo received "outstanding" or "satisfactory" ratings in their
most recent CRA performance examinations.
Mitsubishi's subsidiary bank, BanCal, received a "satisfactory" rating in its most recent examination for CRA
performance by its primary federal supervisor, the OCC, as
of January 23, 1996 ("1996 BanCal Examination"). Bank
of Tokyo's lead subsidiary bank, Union Bank ("Union
Bank"), received an "outstanding" rating in its most recent examination for CRA performance by its primary
federal supervisor, the Federal Deposit Insurance Corporation ("FDIC"), as of October 30, 1995 ("1995 UB Examination"). BOTT received an "outstanding" rating for CRA
performance from the FDIC, as of December 28, 1994
("1994 BOTT Examination"), and CTB received a "satis-
33. An individual also commented that the proposal would be
detrimental to consumers in general.
34. Protestant also argues that Bank of Tokyo should be required to
file an application under section 3 of the BHC Act to acquire deposits
of Daiwa Bank Trust Company, New York, New York ("Daiwa
Bank"). Bank of Tokyo has acquired no deposits from Daiwa Bank
but only agreed to consider applications from Daiwa Bank customers
to establish new accounts at BOTT. This arrangement does not come
within the filing requirements of the BHC Act.
35. 54 Federal Register 13,742 (1989).
36. Id. at 13,745.
441
factory" rating for CRA performance from the FDIC, as of
August 22, 1994 ("1994 CTB Examination").37
B. CRA Performance Records of Union Bank and
BanCal
Union Bank's record. The 1995 UB Examination found a
reasonable distribution of credit extensions, applications,
and denials in all segments of Union Bank's communities,
including low- and moderate-income census tracts. Marketing efforts. included direct mail advertising to low- and
moderate-income households within a mile of a Union
Bank branch, featuring low-cost checking and savings
products, homebuyer assistance programs, and consumer
loans.38 Senior management and the board of directors of
the bank analyzed the bank's reports of the geographical
distribution of loan products and loan denials in establishing new loan products, policies, marketing strategies, and
outreach efforts.
Examiners also noted that Union Bank participated in
several government-sponsored housing and small business
loan programs, including the FNMA Community Home
Buyer Program, FHA Title I Home Improvement Loan
Program, SBA 504 and 7A Programs, and California Pollution Control Finance Authority Program. Union Bank also
participated in several housing and economic development
projects, including a community development corporation
in the south central area of Los Angeles and a revolving
loan pool to provide permanent financing for the development of housing for low-income and very low-income
households. Union Bank also provided construction financing for several multi-unit apartment projects for low- and
moderate-income households.
BanCal's record. The 1996 BanCal Examination found
that the bank actively sought applications and extended
credit throughout its delineated communities, including
low- and moderate-income areas, and that the distribution
of loans, including mortgage and consumer loans, also was
reasonable. Bank management conducted a geographical
analysis of lending patterns at least annually and used the
information to plan CRA programs and develop marketing
strategies. BanCal participated in several loan pools to
provide community development, affordable housing, and
37. Examiners noted that CTB's performance could be improved by
increasing the percentage of loans within its delineated community.
CTB has increased its CRA-related lending in its delineated community, and Mitsubishi and Bank of Tokyo have established a goal to
double CTB's aggregate CRA-related lending within three to five
years, with approximately equal emphasis on housing and community
development loans and small business loans. Protestant maintains that
these goals are too vague and unenforceable. The Board has carefully
reviewed these issues in light of all the facts of record, including
CTB's overall satisfactory performance rating, supervisory information received from the FDIC, and other aspects of CTB's CRA
performance record.
38. Once every 12 to 18 months, Union Bank prepared a report of
consumer loans and deposits in each census tract in all counties in
which the bank operated a branch, and focused additional marketing
efforts on increasing consumer loans in census tracts with low loan
penetration.
442
Federal Reserve Bulletin • May 1996
small business financing, with an aggregate commitment of
$17.6 million. From 1994 to September 30, 1995, BanCal
also made 114 direct loans to small businesses, totaling
$17.1 million, and 543 home purchase loans, totaling
$56 million, to homebuyers in low- and moderate-income
areas under the bank's Community Outreach Program.
Branch closings. Mitsubishi has identified 21 branches it
proposes to consolidate or close after consummation of this
proposal. Ten of the branches are in low- or moderateincome census tracts, and five of these ten branches are in
minority census tracts. One branch is in a middle-income
census tract with a predominately minority population.
Each of these branches would be consolidated with a UBC
branch, located within one-half mile, that would remain
open after consummation of this proposal. Mitsubishi also
stated that the consolidation of branches was discussed
with local community-based organizations.
One other branch proposed to be closed is located in a
middle-income census tract with a predominately minority
population and is more than one mile but less than two
miles from another UBC branch that would remain open.
The final decision on this branch is subject to the branch
closing policy of BanCal. The policy requires the bank to
contact community groups whenever a proposed branch
closing would have a significantly adverse impact on the
availability of banking services in a community, and to
evaluate carefully the comments of community groups and
integrate them into the bank's final decision and implementation plans. Actions that may be taken to minimize the
impact of a branch closing on a neighborhood, and the
presence of other financial institutions in the neighborhood, also must be considered. BanCal's branch closing
policy, and the effect of branches closed under this policy
on the availability of banking products and services to the
communities involved, were reviewed by examiners in the
bank's most recent CRA performance examination and
found to be satisfactory.
C. CRA Performance Records of BOTT and CTB
The Board notes that BOTT and CTB focus on providing
credit and other banking services to corporate customers.
They do not engage in residential or other consumer lending, except to accommodate employees of their corporate
customers, or engage in other retail banking businesses,
and both institutions were considered by their primary
federal supervisor to be engaged in wholesale banking
activities.39 Institutions like BOTT and CTB, however, are
required to comply with the CRA, and their CRA perfor-
39. Institutions like BOTT and CTB will not be evaluated as
wholesale institutions after July 1, 1997, unless they are designated as
a "wholesale bank" by their primary supervisor under the new CRA
regulations (60 Federal Register 22,156 (1995)). Before that date,
large depository institutions with a wholesale business strategy may
continue to be evaluated under the current CRA regulations or elect to
be designated as a "wholesale bank" and evaluated under the "community development test" in the new CRA regulations.
mance record has been carefully reviewed in light of their
business strategy.40
BOTT's record. BOTT has taken a number of steps that
are consistent with its business strategy to help meet the
credit needs of its community. For example, the bank
participates as a lender or investor in large-scale housing or
community development programs sponsored by local government and private organizations, and provides grants to
several community organizations to help cover their operating costs. As of September 30, 1994, the bank had
$13.9 million of loans and $7.4 million of commitments
outstanding to support the community development programs of several organizations in New York City. These
programs included more than $7 million invested in a loan
pool administered by a small business investment corporation primarily to fund loans to purchase taxicab medallions
and provide working capital to various small minorityowned commercial establishments.
BOTT has $1.4 million of loans and $4.9 million of loan
commitments outstanding under a program sponsored by
the New York City Housing Partnership to help develop
housing for sale at below-market cost to low- and
moderate-income households and $1.3 million of loans and
$1.9 million of commitments outstanding to Community
Preservation Corporation, a nonprofit corporation that combines public and private financing to construct and rehabilitate low- and moderate-income housing in New York City,
Long Island, and the Hudson River valley. In addition,
BOTT committed $100,000 to the Closing Assistance for
Homebuyers Program sponsored by Neighborhood Housing Services of New York, Inc., which provides loans to
assist first-time low- and moderate-income homebuyers to
meet down payment and closing cost requirements.
The bank also holds a $100,000 certificate of deposit at
Community Capital Bank, a commercial bank in Brooklyn
operated primarily to serve the housing and small business
credit needs of low- and moderate-income neighborhoods.
BOTT has provided credit enhancements since 1988 for
$32 million of New York State Housing Finance Agency
bonds used to finance the construction of 732 housing units
for low- and moderate-income households. In addition,
40. See Continental Bank Corporation, 75 Federal Reserve Bulletin
304 (1989). Protestant maintains that the lending activities of BOTT
and CTB should be considered nationwide in evaluating their CRA
performance record. Protestant also contends that BOTT's currently
delineated community should be expanded to include upper Manhattan, the Bronx, and Brooklyn. The geographic scope of both institutions' delineated communities and the banks' efforts to help meet
credit needs within those communities were reviewed in their most
recent CRA performance evaluations. After an on-site review of the
banks' activities and local communities by their primary federal
supervisor, the geographic scope of these areas was found to be
reasonable and the banks' overall CRA performance record within
these areas was found to be outstanding for BOTT and satisfactory for
CTB. The Board believes that an assessment of an institution's
delineated community can most effectively be considered in an on-site
examination by the institution's primary federal supervisor, and that
this process provides a better opportunity to consider whether an
institution's delineated community reflects illegal discrimination in
light of all the institution's lending activities.
Legal Developments
BOTT provides grants up to $5,000 to nonprofit groups
that help to address housing needs, facilitate neighborhood
stabilization and provide job training and drug rehabilitation.41
CTB's record. CTB has adopted a CRA action plan for
reaching residents of low- and moderate-income areas of
its community, and its board of directors and senior management regularly review CRA activities and are active in
maintaining contact with and participating in programs that
assist in community development outside the bank's business strategy.
CTB has taken several steps to support community development in Chicago in a manner that is consistent with
its lending focus. The bank provided a $1.5 million revolving loan to Community Investment Corporation to help
finance the construction and rehabilitation of housing for
low-income households, and committed $800,000 to
Neighborhood Housing Services of Chicago, Inc., for housing rehabilitation and neighborhood stabilization in lowand moderate-income neighborhoods. CTB also committed
$1.9 million to a program to finance the purchase of
fast-food restaurant franchises by low- and moderateincome franchise operators.
In addition, CTB committed $1.5 million to a loan pool
with 46 lenders that is administered to provide financing
for rental housing for low- and moderate-income households. The bank also maintains a be low-market rate certificate of deposit for $250,000 at South Shore Bank, a commercial bank in Chicago operated primarily to finance the
rehabilitation of multi-family housing units and provide
small business loans in the Chicago area. The bank purchased $250,000 of municipal bonds from the City of
Chicago and $1.6 million of revenue bonds issued by the
Illinois Housing Development Authority for its Affordable
Housing Program. CTB also provides grants to support the
operating budgets of nonprofit organizations that help meet
housing needs and facilitate economic development 42
D. Conclusion on Convenience and Needs
Considerations
The Board has carefully considered all the facts of record,
including the comments received from all commenters and
Mitsubishi's response to those comments, the CRA performance records of the subsidiary banks of Mitsubishi and
Bank of Tokyo, including relevant reports of examination
from their primary federal supervisors. The Board also has
considered that neither the CRA nor the BHC Act require
that an institution meet the credit and other banking needs
of a community in specific ways or provide specific types
of products or services. Both statutes, and their implementing regulations, give a banking institution the freedom to
develop its own business strategy and products. Based on a
41. The bank made $139,000 in grants under this program in 1994.
42. For example, the bank gave a grant of $50,000 to Non-Profit
Financial Corporation, an organization that provides bridge financing
for small, nonprofit organizations.
443
review of the entire record, the Board concludes that convenience and needs considerations, including the CRA
records of performance of both organizations' subsidiary
banks, are consistent with approval of this proposal.43
Nonbanking
Activities
Mitsubishi also has given notice under section 4(c)(8) of
the BHC Act to acquire the nonbanking subsidiaries of
Bank of Tokyo listed in the Appendix and thereby engage
in the nonbanking activities described therein, and Union
Bank has given notice to retain its nonbanking subsidiaries
listed in the Appendix and continue to engage in the
nonbanking activities described therein. Section 4(c)(8) of
the BHC Act provides that a bank holding company may,
with Board approval, engage in any activity that the Board
determines to be "so closely related to banking or managing or controlling banks as to be a proper incident thereto."
The Board has previously determined by regulation or
order, subject to certain prudential limitations, that each of
the activities described in the Appendix is closely related
to banking within the meaning of section 4(c)(8) of the
BHC Act 4 4 Mitsubishi has provided the Board with all the
commitments the Board obtained in other cases in which it
has approved a bank holding company to engage in these
activities, and Mitsubishi has committed to conduct these
activities in accordance with the Board's regulations and
prior orders.
In order to approve this proposal, the Board also must
determine that the proposed activities are a proper incident
to banking, that is, that the proposed transaction can reasonably be expected to produce benefits to the public, such
as greater convenience, increased competition, or gains in
efficiency, that outweigh possible adverse effects, such as
undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices 45 As part of the Board's evaluation of these factors, the
Board considers the financial and managerial resources of
the notificant and its subsidiaries and the effect the transaction would have on such resources.46 On the basis of the
record, the Board believes that this proposal should enable
BTM to provide greater convenience and improved services to its customers. In addition, while Mitsubishi oper43. Protestant has expressed concern about Mitsubishi's plans to
manage BOTT, an insured depository institution subject to the CRA.
As part of this proposal, BTM intends to merge Mitsubishi's subsidiary trust company, Mitsubishi Bank Trust Company of New York,
New York, New York, into BOTT, with BOTT as the survivor.
Mitsubishi has indicated that the variety of community initiatives that
have been undertaken by BOTT will be continued and enhanced under
BOTT's recently established long-term CRA performance goals. Under these goals, BOTT intends to double its level of CRA-related
lending over the next three to five years.
44. See, e.g., The Bank of Tokyo, Ltd., 76 Federal Reserve Bulletin
654 (1990); The Bank of Tokyo, Ltd., 76 Federal Reserve Bulletin 546
(1990).
45. See 12 U.S.C. § 1843(c)(8).
46. See 12 C.F.R. 225.24; Fuji Bank, Limited, 75 Federal Reserve
Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve
Bulletin 155 (1987).
444
Federal Reserve Bulletin • May 1996
ates subsidiaries engaged in nonbanking activities that
compete with several of the nonbanking subsidiaries of
Bank of Tokyo and Union Bank, the markets for these
services are unconcentrated, and there are numerous providers of these services. As a result, consummation of this
proposal would have a de minimis effect on competition for
these services, and the Board concludes that the proposal
would not have a significantly adverse effect on competition in any relevant market.
There also is no evidence in the record to indicate that
consummation of this proposal is likely to result in any
significantly adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices that would not be
outweighed by the public benefits reasonably to be expected to result from this proposal. Accordingly, the Board
has determined that the balance of the public interest
factors it must consider under section 4(c)(8) of the BHC
Act is favorable and consistent with approval of this proposal.
Mitsubishi also has given notice of its intention to acquire BOTNA, a corporation operating under section 25 of
the Federal Reserve Act. Based on all the facts of record,
the Board concludes that the financial and managerial
resources of Mitsubishi are consistent with the acquisition
of this corporation. This proposal also would result in the
continuation of the international services currently provided by this organization and would be in the public
interest. Accordingly, the Board finds that the continued
operation of BOTNA by BTM is consistent with the Federal Reserve Act and Regulation K.
BanCal also has given notice pursuant to section 25 of
the Federal Reserve Act (12 U.S.C. §§ 601-604a) and section 211.3 of Regulation K (12 C.F.R. 211.3) to acquire the
branches of Union Bank in Guam, the Commonwealth of
the Northern Mariana Islands, and the Cayman Islands.
The Board has considered the factors it is required to
consider when reviewing a notice to establish branches
under section 25 of the Federal Reserve Act and, based on
all the facts of record, finds these factors to be consistent
with approval.
Conclusion
Based on the foregoing and all other facts of record,
including all the commitments provided by Mitsubishi in
connection with this proposal, the Board has determined
that the applications and notices should be, and hereby are,
approved. The Board's approval of this proposal is specifically conditioned on compliance by Mitsubishi and BTM
with all the commitments made in connection with this
proposal and with the conditions referred to in this order.47
47. The Board's authority to approve the establishment of the
proposed foreign bank offices parallels the continuing authority of
state banking supervisors to license offices of a foreign bank. The
Board's approval of these applications and notices does not supplant
the authority of the relevant state banking supervisors to license the
If any restrictions on access to information on the operations or activities of BTM and any of its affiliates subsequently interfere with the Board's ability to determine the
compliance by Mitsubishi or its affiliates with applicable
federal statutes, the Board may require termination of any
of Mitsubishi's or any of its affiliates' direct or indirect
activities in the United States. The Board's determination
on the proposed nonbanking activities also is subject to all
the conditions set forth in Regulation Y, including those in
sections 225.7 and 225.23(g) of Regulation Y, and to the
Board's authority to require such modification or termination of the activities of a bank holding company or any of
its subsidiaries as the Board finds necessary to ensure
compliance with, and to prevent evasion of, the provisions
of the BHC Act and the Board's regulations and orders
issued thereunder. These commitments and conditions shall
be deemed to be conditions imposed in writing by the
Board in connection with its findings and decision, and, as
such, may be enforced in proceedings under applicable
law.
The banking acquisitions under this proposal shall not be
consummated before the fifteenth calendar day following
the effective date of this order, and this proposal shall not
be consummated later than three months after the effective
date of this order, unless such period is extended by the
Board or by the Federal Reserve Bank of San Francisco,
acting pursuant to delegated authority.
By order of the Board of Governors, effective March 8,
1996.
Voting for this action: Chairman Pro Tempore Greenspan, and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix
Nonbanking Subsidiaries of Bank of Tokyo to Be
Acquired by Mitsubishi
(1) BOT Financial Corp., Boston, Massachusetts, and thereby
engage in making, acquiring, or servicing loans, pursuant to
section 225.25(b)(1); providing investment or financial advice, pursuant to section 225.25(b)(4); leasing activities
(directly and through its wholly owned subsidiary, BFC
Assets, Inc., Boston, Massachusetts), pursuant to section 225.25(b)(5); and providing data processing and data
transmission services, pursuant to section 225.25(b)(7) of
the Board's Regulation Y; and
(2) BOT Securities, Inc., New York, New York, and thereby
engage in making, acquiring, or servicing loans, pursuant to
section 225.25(b)(1); providing investment or financial advice, pursuant to section 225.25(b)(4); providing brokerage
proposed offices in accordance with any terms or conditions that such
state banking supervisors may impose.
Legal Developments
services, separately and in combination with investment
advisory services, pursuant to section 225.25(b)(15); underwriting and dealing in bank-eligible dealer securities, pursuant to section 225.25(b)(16); providing general information
and statistical forecasting with respect to foreign exchange
markets, pursuant to section 225.25(b)(17); acting as a
futures commission merchant, pursuant to section 225.25(b)(18) of the Board's Regulation Y; and trading
for its own account in certain foreign exchange spot, forward, futures, and options transactions, pursuant to The
Bank of Tokyo, Ltd., 76 Federal Reserve Bulletin 654
(1990).
Nonbanking Subsidiaries of Union Bank to Be Acquired
by Mitsubishi
(1) Bankers Commercial Corporation, San Diego, California,
and thereby engage in making, acquiring, or servicing loans,
pursuant to section 225.25(b)(1); providing investment or
financial advice, pursuant to section 225.25(b)(4); leasing
activities, pursuant to section 225.25(b)(5); and providing
data processing and data transmission services, pursuant to
section 225.25(b)(7) of the Board's Regulation Y;
(2) Stanco Properties, Inc., San Francisco, California, and
thereby engage in escrow and custodial activities, pursuant
to section 225.25(b)(3) of the Board's Regulation Y;
(3) UB Leasing, Inc., Los Angeles, California, and thereby
engage in making, acquiring, or servicing loans, pursuant to
section 225.25(b)(1); providing investment or financial advice, pursuant to section 225.25(b)(4); leasing activities,
pursuant to section 225.25(b)(5); and providing data processing and data transmission services, pursuant to section 225.25(b)(7) of the Board's Regulation Y;
(4) UB Mortgage Corp., San Francisco, California, and
thereby engage in servicing loans, pursuant to section 225.25(b)(1) of the Board's Regulation Y; and
(5) Unionbanc Leasing Corp., Los Angeles, California, and
thereby engage in making, acquiring, or servicing loans,
pursuant to section 225.25(b)(1); providing investment or
financial advice, pursuant to section 225.25(b)(4); leasing
activities, pursuant to section 225.25(b)(5); and providing
data processing and data transmission services, pursuant to
section 225.25(b)(7) of the Board's Regulation Y.
Wells Fargo & Company
San Francisco, California
Order Approving the Acquisition of a Bank Holding
Company and its Nonbanking and Foreign Subsidiaries
Wells Fargo & Company, San Francisco, California
("Wells Fargo"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC Act")
(12 U.S.C. § 1841 et seq.), has filed various applications
and notices seeking the Board's approval to acquire First
Interstate Bancorp, Los Angeles, California ("First Inter-
445
state"),1 and First Interstate's bank and nonbank subsidiaries.2 Applications and notices have been filed under sections 3, 4(c)(8), and 4(c)(13) of the BHC Act (12 U.S.C.
§§ 1842, 1843(c)(8) and (13)), and section 25 of the
Federal Reserve Act (12 U.S.C. § 601).
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published (60
Federal Register 58,627 and 62,859 (1995)). In light of the
extensive public interest in this proposal, the Board held a
series of public meetings to provide interested persons an
opportunity to present written information and oral testimony on the proposal (Press Releases dated January 4
and 16,1996). Seven public meetings were held, beginning
on January 22, 1996, in San Francisco and Los Angeles,
California.3
The Board received comments on the proposal from
approximately 834 commenters, 311 of whom testified at
the public meetings. Written comments were received from
approximately 523 commenters who did not testify at the
public meetings and from 166 commenters who testified at
the meetings. The time for filing comments has expired,
and the Board has considered the applications and notices
and all comments received in light of the factors set forth
in the BHC Act, the Federal Reserve Act, and regulations
promulgated thereunder.
Wells Fargo, with total consolidated assets of approximately $49.9 billion, operates subsidiary banks in California and a credit card bank in Arizona.4 Wells Fargo is the
17th largest commercial banking organization in the United
States, controlling approximately 1.2 percent of total banking assets in the United States and is the second largest
depository institution in California, controlling approximately $37.3 billion in deposits, representing 13 percent of
all deposits in depository institutions in the state ("state
deposits").5 Wells Fargo also engages in a number of
permissible nonbanking activities nationwide. First Interstate, with total consolidated assets of approximately
$55.1 billion, operates subsidiary banks in 13 states. First
Interstate is the 14th largest commercial banking organization in the United States, controlling approximately 1.3
percent of total banking assets in the United States. First
Interstate is the third largest depository institution in California, controlling approximately $20.9 billion in deposits,
representing 7.3 percent of state deposits.
1. First Interstate would merge with and into Wells Fargo, with
Wells Fargo as the surviving corporation.
2. First Interstate's subsidiary banks are listed in Appendix A. First
Interstate's nonbank and foreign subsidiaries are listed in Appendix B.
3. Two of these meetings were held in connection with the application filed by First Bank System, Minneapolis, Minnesota ("First
Bank"), to acquire First Interstate. First Bank subsequently withdrew
its application. The Board has considered all comments regarding the
CRA performance of Wells Fargo or First Interstate that were made in
connection with First Bank's application.
4. Asset data are as of September 30, 1995.
5. Depository institutions include commercial banks, savings banks,
and savings associations. State deposit data are as of June 30, 1995,
and are based on calculations in which the deposits of thrift institutions are included at 50 percent.
446
Federal Reserve Bulletin • May 1996
After consummation of the proposal, Wells Fargo would
be the seventh largest commercial banking organization in
the United States, with total consolidated assets of approximately $102.5 billion, and would control approximately
2.5 percent of the total banking assets in the United States,
and 2.6 percent of the total deposits in banks and savings
associations insured by the Federal Deposit Insurance Corporation ("FDIC"). After consummation of the proposal
and completion of the proposed branch divestitures, Wells
Fargo would remain the second largest depository institution in California, controlling approximately $55.7 in deposits, representing 19.4 percent of state deposits.6
Interstate
Analysis
Section 3(d) of the BHC Act, as amended by Section 101
of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, allows the Board to approve an application by a bank holding company to acquire control of a
bank located in a state other than the home state of such
bank holding company, if certain conditions are met. For
purposes of the BHC Act, Wells Fargo's home state is
California.7 As noted above, First Interstate controls banks
in Alaska, Arizona, California, Colorado, Idaho, Montana,
Nevada, New Mexico, Oregon, Texas, Utah, Washington,
and Wyoming. The conditions for an interstate acquisition
enumerated in section 3(d) are met in this case.8 In view of
all the facts of record, the Board is permitted to approve
this proposal under section 3(d) of the BHC Act.
Competitive
Considerations
This proposal represents a significant acquisition involving
the combination of the second and third largest banking
organizations in California, organizations that together
control 20.3 percent of all deposits in California and compete in 47 markets throughout the state.9 These organizations are among the largest providers of banking services
6. Deposit and market data are as of June 30, 1995. Asset and
deposit data take into account Wells Fargo's commitments to divest
certain assets and deposits, which are discussed later in this order.
7. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding
company's home state is that state in which the operations of the bank
holding company's banking subsidiaries were principally conducted
on July 1, 1966, or the date on which the company became a bank
holding company, whichever is later.
8. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
Wells Fargo is adequately capitalized and adequately managed. First
Interstate's subsidiary banks have been in existence and have continuously operated for at least the minimum period of time required under
applicable state law. In addition, upon consummation of this proposal,
Wells Fargo and its affiliates would control less than 10 percent of the
total amount of deposits of insured depository institutions in the
United States, and less than 30 percent of the total amount of deposits
of insured depository institutions in Arizona, or any other applicable
state deposit limit. All other requirements of section 3(d) of the BHC
Act also would be met after consummation of this proposal.
9. A description of these banking markets is contained in Appendix C. Wells Fargo and First Interstate do not operate insured depository institutions in the same banking markets in any state other than
California.
in these markets and have a significant competitive influence in many markets. Accordingly, the Board has taken
special care to analyze whether the combination of these
organizations would have a significantly adverse effect on
competition in any relevant banking market.
In evaluating the competitive effects of this proposal, the
Board carefully considered the information and views presented by commenters. The Board received approximately
316 comments from individuals and organizations regarding the competitive impact of this proposal. Many commenters argued that the proposal would eliminate one of
only three major banking competitors in California, and
would result in reduced availability of consumer financial
services, higher prices for banking services, less flexible
credit underwriting standards, and lower deposit rates.10
Commenters also contended that there would be fewer
lenders for small- and medium-sized businesses in many
banking markets, resulting in a reduction in the availability
of, and higher costs for, business credit.11
In accordance with its policy, the Board has analyzed the
competitive effects of this combination in each market in
which the two organizations operate using the depositbased Herfindahl-Hirschman Index ("HHI") and the HHI
levels set out in the revised Department of Justice Merger
Guidelines ("DOJ Guidelines").12 The Board notes that
these HHI levels are only guidelines that are used by the
Board and the other banking agencies to help identify cases
that are in need of a more detailed competitive analysis to
assure that the proposal does not have a significantly
adverse effect on competition in any relevant market.
Where the HHI or other data regarding the competitive
environment indicate that a combination is likely to have a
10. Some commenters also stated generally that the effect of the
proposal on the convenience and needs of the community would be
adverse due to branch closures, job losses, real estate vacancies, and
less price competition and, consequently, that convenience and needs
factors in this case would not outweigh the anticompetitive effects.
Several California cities also commented that the merger would result
in less competition and higher cost for government deposit services
because Wells Fargo is not an approved state government depository.
11. Commenters also believed there would be a reduction in the
availability of banking services in low- and moderate-income areas,
neighborhoods with predominantly African-American residents, and
other underserved areas, particularly in Los Angeles, and reduced
competition for affordable housing construction loans, resulting in
increased fees for such credit. These comments also are addressed in
the convenience and needs discussion, infra.
12. Under the revised DOJ Guidelines, 49 Federal Register 26,823
(June 29, 1984), a market in which the post-merger HHI is less than
1000 is considered unconcentrated and a market in which the postmerger HHI is between 1000 and 1800 is considered moderately
concentrated. A market in which the post-merger HHI is above 1800
is considered to be highly concentrated. In such markets, the Department of Justice (the "DOJ") is likely to challenge a merger that
increases the HHI by more than 50 points. The DOJ has informed the
Board that a bank acquisition or merger generally will not be challenged (in the absence of other factors indicating anti-competitive
effects) unless the post-merger HHI is at least 1800 and the merger or
acquisition increases the HHI by at least 200 points. The DOJ has
stated that the higher than normal threshold for anti-competitive
effects implicitly recognizes the competitive effect of limited-purpose
lenders and other non-depository financial entities.
Legal Developments
447
significant effect on competition, the Board must determine
whether the effect of the combination on competition is
significantly adverse. A proposal that fails to pass the HHI
market screen may nonetheless be approved because other
information, such as data regarding the strength of the
remaining competitors or the likelihood of potential entry
into the market, may indicate that the proposal would not
have a significantly adverse effect on competition. Similarly, in the case of a proposal that passes the screen,
information, such as data about the nature of competition
in the market, may indicate that the proposal would likely
have an adverse effect on competition.
In this case, the combination of Wells Fargo and First
Interstate, without divestitures, would not pass the traditional screen in a number of markets and would appear to
have a significantly adverse effect on competition in a
number of markets. Wells Fargo has proposed to divest 61
branches representing deposits of approximately $2.5 billion to address these potential competitive effects.13 As
illustrated by the table in Appendix D, after taking account
of the divestitures proposed by Wells Fargo, the proposal
would meet the initial screen in all markets in which Wells
Fargo and First Interstate compete.14
In considering whether these divestitures are sufficient to
offset the otherwise significantly adverse competitive effects of the combination and the concerns raised by commenters in writing and at the public meetings, the Board
looked at a number of factors. The Board considered the
effect of the proposal on small business lending, agricultural lending, correspondent banking services, and other
services that were of concern to commenters. The Board
also analyzed pricing data for loans and deposits in California and the effect of previous mergers between large banking organizations on the average prices for certain banking
products and services in California.
In addition, the Board paid special attention to the size
and the quality of the proposed divestitures. As noted
above, the divestitures would cause the resulting HHI in
each banking market to be well within the level specified in
the Board's initial screen. Importantly, Wells Fargo has
committed that these divestitures would be to a purchaser
that will continue to make commercial loans, including
middle-market, small business and agricultural loans, in
these markets and would be in a transaction that would be
consistent with the DO J Guidelines.
The Board also notes that numerous competitors, including the largest banking organizations in California, will
remain in nearly all of these markets following consummation of this proposal. In addition, numerous large thrifts
operate in California and have the potential to become
active participants or entry points for other participants in
these markets. Thrift institutions in California appear especially focused on mortgage lending activities and are not
strong providers of commercial loans, including small business loans. Nevertheless, the Board believes it is significant that these alternative franchises operate in California
and, specifically, in many of the markets in question in this
case. Finally, many of these markets are attractive for entry
and California has in place legislation that permits out of
state banking organizations to acquire banks throughout
the state.
The Board also has considered the views of the Department of Justice ("DOJ") and the Attorney General of
California. The DOJ has advised the Board that, subject to
completion of the divestitures proposed by Wells Fargo,
the proposal would not result in a significantly adverse
effect on competition in any relevant banking market. The
Attorney General of California has also reviewed the competitive effects of the proposal and has similarly concluded
that, subject to completion of the proposed divestitures, the
proposal would not result in significantly adverse effects in
competition in any banking market in California.
Based on all of the facts of record, including the analysis
discussed in this order, and in reliance on the commitments
discussed above as well as the other commitments made in
connection with this application, the Board concludes that
consummation of this proposal is not likely to have a
significantly adverse effect on competition in any relevant
banking market. This determination is subject to completion of the divestitures as proposed by Wells Fargo in
connection with this application.15 In addition, Wells Fargo
must obtain final contracts of sale for all relevant offices
prior to consummation of its acquisition of First Interstate.
13. Wells Fargo has committed to execute sales agreements for each
of the proposed divestitures prior to consummation of this proposal,
and to complete these divestitures within 180 days of consummation.
Wells Fargo also has committed that, in the event it is unsuccessful in
completing these divestitures within 180 days of consummation, it
will transfer the unsold branches to an independent trustee that is
acceptable to the Board and that will be instructed to sell the branches
promptly. See BankAmerica Corporation, 78 Federal Reserve Bulletin
338 (1992); United New Mexico Financial Corporation, 11 Federal
Reserve Bulletin 484 (1991). In addition, Wells Fargo has committed
to submit to the Board, prior to consummation of the acquisition, an
executed trust agreement acceptable to the Board stating the terms of
these divestitures.
15. The Board has considered comments suggesting that Wells
Fargo should be required to divest five branches in San Diego to a
locally-owned bank, with two of those branches in low-income communities. The proposed divestitures have been structured to maintain
significant competition to Wells Fargo in providing banking products
and services in the relevant banking markets. There is no evidence in
the record to suggest that this proposal would prevent the establishment of any other bank to serve minority and low- and moderateincome communities or impair the ability of existing banks to serve
such communities. As discussed in this order, the Board also has
considered carefully Wells Fargo's record in helping to meet the credit
needs of the communities that it serves, including minority and lowand moderate-income communities and the Board or another federal
banking agency must consider the Community Reinvestment Act
record of any institution that acquires these branches from Wells
Fargo.
14. Market share data used for the table in Appendix D are based on
calculations in which the deposits controlled by thrift institutions are
included at 50 percent.
448
Federal Reserve Bulletin • May 1996
Financial, Managerial and Future Prospects
Considerations
The Board has reviewed the financial resources of the
companies and banks involved in this proposal and the
effect of the proposed acquisition on the future prospects of
these organizations in light of all the facts of record,
including the views expressed by Wells Fargo and commenters. The proposed transaction represents a substantial
acquisition for Wells Fargo, which will more than double
the size of the organization.
The Board notes that Wells Fargo, First Interstate, and
their subsidiary banks are in satisfactory financial condition, and are expected to remain so after consummation of
this transaction. Although the purchase accounting adjustments for this transaction would result in the booking of
significant amounts of goodwill and other intangibles,16 the
Board notes that Wells Fargo would fully fund the purchase price with the issuance of stock, and that its consolidated capital ratios would exceed the "well capitalized"
thresholds after consummation of this transaction. Moreover, Wells Fargo has indicated that it believes its earnings
would remain strong as a result of new opportunities for
revenue growth, greater geographic diversification of its
risk profile, and significant cost savings and operational
efficiencies. Wells Fargo also has indicated that it believes
the merger would result in a stronger company that can
operate more efficiently to provide enhanced services to its
customers and communities.
Based on all the facts of record, including a review of
relevant reports of examination and all comments that have
been received relating to the financial factors in this proposal, the Board concludes that financial considerations,
including the future prospects of Wells Fargo, are consistent with approval. The Board also has reviewed the managerial resources of Wells Fargo in light of comments received on this proposal,17 and has concluded that based on
all the facts of record, including examination reports and
other supervisory information, managerial factors are consistent with approval.
16. Several commenters stated that Wells Fargo's net cost savings
assumptions are overly optimistic. Other commenters have criticized
Wells Fargo's use of the purchase accounting method or maintained
that the management of First Interstate would receive excessive severance packages compared to nonmanagement employees.
17. Several commenters objected to the loss of management functions located in Southern California. Other commenters raised concerns that the management of Wells Fargo does not have the experience to operate a multi-state bank holding company. Wells Fargo has
indicated that it intends to operate corporate headquarters in
San Francisco and Los Angeles, and that one or more of the senior
corporate officers would be based in Los Angeles. After consummation of the proposal, Wells Fargo would expand its board of directors
by up to seven seats, which would be filled by current members of
First Interstate's board of directors.
Convenience and Needs
Considerations
In acting on applications under section 3 of the BHC Act,
the Board must consider the convenience and needs of the
communities to be served and take into account the records
of the relevant depository institutions under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA").
The CRA requires the federal financial supervisory agencies to encourage financial institutions to help meet the
credit needs of the local communities in which they operate, consistent with their safe and sound operation. To
accomplish this end, the CRA requires the appropriate
federal supervisory authority to "assess the institution's
record of meeting the credit needs of its entire community,
including low- to moderate-income neighborhoods, consistent with the safe and sound operation of such institution,"
and to take that record into account in its evaluation of
bank expansion proposals.
A. Public Comments on Convenience and Needs
As noted above, the Board held a series of public meetings
at which interested persons could present testimony on the
convenience and needs factors and the CRA performance
records of the depository institutions in this case. The
Board also provided commenters who commented during
the public comment period an extended period of time in
which to submit their views. 18 A substantial majority of the
comments received by the Board, including the comments
presented by the 311 commenters who appeared at the
public meetings, related to the convenience and needs
aspects of the proposal. These commenters included representatives of community-based and nonprofit organizations, small business owners, customers of Wells Fargo and
First Interstate, First Interstate employees, local and state
government officials, members of the United States Congress, and individuals.19
Approximately 135 commenters supported the proposal
or commented favorably about the CRA performance
record of Wells Fargo.20 More than 600 commenters either
opposed the proposal, requested that the Board approve the
18. The Board also considered additional comments filed after the
close of the public comment period. Under the Board's Rules of
Procedure, the Board may in its discretion take into consideration the
substance of such comments. 12 C.F.R. 262.3(e).
19. Several individual commenters opposed this proposal on the
basis of their particular business dealings with Wells Fargo. The
Board believes that such isolated instances should be considered in
light of all the facts of record pertaining to Wells Fargo's CRA
performance. The complaints have been sent to the bank's primary
supervisor, the Office of the Comptroller of the Currency ("OCC").
20. The commenters included: (1) The Greenlining Institute,
San Francisco, California; (2) National Community Reinvestment
Network, Boston, Massachusetts; (3) the Asian Business Association
Incorporated, San Francisco, California; (4) the Phoenix Urban
League, Phoenix, Arizona; (5) Los Angeles Community Reinvestment
Center, Los Angeles, California; (6) American GI Forum of California, Santa Maria, California; (7) the Black Business Association of
Southern California, Los Angeles, California; and (8) the California
Hispanic Chamber of Commerce, San Francisco, California.
Legal Developments
merger subject to conditions suggested by the commenter,
or expressed concerns about the CRA performance record
of Wells Fargo or First Interstate.21 Commenters presented
information on a number of aspects of the CRA performance records of the banks involved, including the following:22
Small business lending. A number of commenters applauded Wells Fargo's participation in special loan programs, particularly in programs for businesses owned by
women and government-sponsored small business loan
programs. Other commenters noted that Wells Fargo had
provided assistance to their small businesses, including
business advice and increased lines of credit, which permitted expansion. Some commenters stated that Wells Fargo
was the only bank willing to lend to their start-up ventures.
Other commenters believed that Wells Fargo was unresponsive to the needs of small business, and that the types
of loans and level of personalized services were inferior to
the small business activities of First Interstate. Some commenters contended that the bank's participation in certain
small business lending programs sponsored by state and
federal government agencies and nonprofit organizations
was inadequate. Commenters also asserted that Wells Fargo
did not sufficiently ascertain the credit needs or market its
available loans and services to small businesses owned by
minorities in certain areas of California. A few commenters contended that Wells Fargo's management practices,
such as limited lending authority for branch managers,
frequent changes in branch personnel, and inadequate
branch facilities, were not conducive to small business
lending activities.
Housing-related lending. Wells Fargo was commended
by some commenters for a strong record of lending to
affordable housing projects in California. Commenters explained that the unique nature of some of these projects
made financing difficult to obtain. In addition, some commenters favorably noted Wells Fargo's financial support of
21. The commenters included: (1) California Reinvestment Committee, San Francisco, California; (2) Association of Community
Organizations for Reform Now, Washington, D.C.; (3) Black State
Employees Association of Texas, Inc., Dallas, Texas; (4) Washington
Reinvestment Alliance, Seattle, Washington; (5) Nevada Fair Housing
Center, Inc., Las Vegas, Nevada; (6) Sacramento Housing & Redevelopment Agency, Sacramento, California; (7) National Association for
the Advancement of Colored People, Los Angeles, California;
(8) Small Business Finance Corp, San Diego, California; (9) Communities for Accountable Reinvestment, Los Angeles, California;
(10) National Community Reinvestment Coalition, Washington, D.C.;
(11) East Bay Housing Organizations, Oakland, California; (12) Coalition for Women's Economic Development, Los Angeles, California;
(13) members of the U.S. House of Representatives; (14) several
members of California's Senate and General Assembly; and
(15) officials from several local communities, including mayors, members of city councils, and representatives of local government agencies.
22. Other issues raised by commenters commending or criticizing
the CRA performance record of the institutions involved or discussing
the effect of the proposal on the convenience and needs factor also
have been carefully considered by the Board. Many of these comments are addressed throughout this order.
449
housing-related financing through intermediaries and loan
pools on a local and national level.
Commenters opposing the proposal characterized efforts
by Wells Fargo and First Interstate in home mortgage
lending as inadequate to meet the housing-related credit
needs of low- and moderate-income ("LMI") and minority
borrowers in California and other states served by the
institutions. Those commenters criticized the decision by
both institutions to cease direct origination of mortgage
loans and to refer residential mortgage borrowers to joint
ventures maintained with unaffiliated third parties. One
commenter stated that data filed under the Home Mortgage
Disclosure Act ("HMDA") and other lending data from
Wells Fargo and First Interstate indicated disparate lending
patterns for LMI and minority borrowers, and inadequate
outreach and marketing efforts to minority residents in
certain areas.
Community
development
lending. A number of
community-based and nonprofit organizations supported
the proposal because of Wells Fargo's community reinvestment programs and projects. Other commenters maintained
that Wells Fargo provided less financial support to lending
programs sponsored by community-based organizations,
lending consortia, and community development corporations than First Interstate, and that the loss of First Interstate's support would have a significantly adverse effect on
community redevelopment efforts.23 Those commenters
also believed that after consummation of the proposal the
level of community redevelopment activities in California
would be less than the level of activities provided by Wells
Fargo and First Interstate as independent organizations.
Community reinvestment pledge. Many commenters
commended the 10-year/$45 billion community reinvestment pledge proposed by Wells Fargo in connection with
this proposal. They pointed out that it was the largest and
most comprehensive pledge made by a banking organization, and they believed that specific allocations under the
pledge, such as the $25 billion for small business loans and
$8.5 billion for commercial loans to middle market businesses, would significantly benefit LMI areas and small
businesses in California. Other commenters noted that
Wells Fargo had a record of meeting or exceeding its prior
community development pledges.
Some commenters criticized the pledge as lacking criteria for making funding decisions, and they raised questions
about its enforceability. Those commenters contended that
Wells Fargo should be required to form partnerships with
community-based organizations to decide how the funds
would be allocated. Some commenters noted that Wells
Fargo had not indicated a plan to address the credit needs
23. Some commenters questioned whether specific CRA-related
commitments that had been made by First Interstate would be honored
by Wells Fargo. Other commenters expressed concern that First Interstate's strong record of charitable contributions in large urban areas
like Los Angeles would not be continued by Wells Fargo.
450
Federal Reserve Bulletin • May 1996
of areas outside California that were currently served by
First Interstate.24
Branches and branch closings. A number of commenters raised issues about Wells Fargo's emphasis on providing banking services through "alternative distribution
points" in local supermarkets. Some commenters argued
that Wells Fargo's strategy of focusing on delivering banking products and services electronically and through supermarket facilities would impede access to these products
and services by unsophisticated people and would disproportionately disadvantage elderly and immigrant customers, as well as residents in LMI, minority, and rural areas.
Other commenters contended that this approach did not
adequately serve LMI areas and areas with predominately
minority residents because these areas are not generally
served by supermarkets. The commenters also maintained
that many communities would be adversely affected by
Wells Fargo's announced decision to close a large number
of First Interstate's "brick and mortar" branches in connection with this acquisition.25 Some commenters believed
that the level of service provided by Wells Fargo at its
branches to small business and retail customers was less
personalized, and generally inferior to, that of First Interstate.26
24. A few commenters maintained that Wells Fargo should meet
with community-based organizations and reach agreements to provide
loans, grants or assistance in specific amounts, or to participate in
particular programs or projects. While communications by depository
institutions with community groups provide a valuable method of
assessing and determining how an institution can best address the
credit needs of the community, the Board believes that the CRA does
not require that a depository institution enter into agreements with any
organization. Accordingly, in reviewing the proposal, the Board has
focused on the programs and policies that Wells Fargo has in place to
serve the credit needs of its communities. See Fifth Third Bancorp, 80
Federal Reserve Bulletin 838 (1994).
25. Some commenters raised concerns that Wells Fargo's plans to
close a number of First Interstate branches would result in a large
number of vacant buildings in California, which would fall into a state
of disrepair or become targets for graffiti. One commenter also criticized Wells Fargo's maintenance of properties that it acquired in
satisfaction of debts previously contracted in the southern sector of
Dallas, Texas. In response to these concerns. Wells Fargo stated that it
has and would continue to maintain the properties that it occupies or
owns in a responsible manner, and would pursue opportunities for
effective use of the branches to be closed.
26. Several commenters believed that Wells Fargo's efforts to attract
and hire minority and women vendors are inadequate and stated that
Wells Fargo should acquire more goods and services from businesses
owned by women and minorities. Some of the commenters maintained
that Wells Fargo should implement minority vendor outreach programs to inform minority vendors about opportunities and should
conduct seminars to introduce minority vendors to available contracting opportunities. Wells Fargo indicated that it encourages the use of
Minority/Women/Disabled-Owned Business Enterprise vendors
throughout the company. Wells Fargo also has indicated its intention
to develop, within the next year, purchasing goals for Minority/
Women/Disabled-Owned Business Enterprise vendors, and has set a
long-term goal of purchasing 40 percent of its goods and services
from businesses owned by women, minorities, and disabled individuals.
B. CRA Performance Evaluations of Wells Fargo
and First Interstate
The Board has carefully reviewed the CRA performance
records of Wells Fargo and First Interstate and their subsidiary depository institutions, particularly the relevant reports of examinations of the CRA performance. The Board
also has carefully considered the comments and testimony
presented at the public meetings and in written submissions,27 as well as Wells Fargo's responses to those comments. The Board has reviewed this information and all
other relevant facts of record, in light of the CRA, the fair
lending laws28 and other relevant credit-related laws, the
Board's regulations, and the Statement of the Federal Financial Supervisory Agencies Regarding the Community
Reinvestment Act ("Agency CRA Statement").29
The Agency CRA Statement provides that a CRA examination is an important and often controlling factor in the
consideration of an institution's CRA record and that reports of these examinations will be given great weight in
the applications process.30 Wells Fargo's lead bank, Wells
Fargo Bank N.A., San Francisco, California ("Wells Fargo
Bank"), which controls more than 97.6 percent of Wells
Fargo's total assets, received a CRA performance rating of
"outstanding" from its primary federal supervisor, the
Office of the Comptroller of the Currency ("OCC"), at its
most recent examination for CRA performance as of April
1994 ("Wells Fargo Examination").31 This represents
Wells Fargo Bank's third consecutive outstanding CRA
performance rating since January 1991.
First Interstate's lead bank, First Interstate Bank of California, Los Angeles, California ("FICAL"), which controls almost half of First Interstate's total assets, received a
CRA performance rating of "outstanding" from the Federal Reserve Bank of San Francisco ("Reserve Bank") at
its most recent examination for CRA performance as of
August 1995 ("FICAL Examination"). All other subsidiary banks of First Interstate received either "outstanding"
or "satisfactory" ratings in their most recent CRA performance examinations by the OCC, their primary federal
supervisor.32
27. Some commenters maintained that the number of commenters
supporting this proposal should be discounted because many of them
had received grants or other services from Wells Fargo. The description in this order of the number of commenters does not represent a
weighing by the Board of the comments. The Board has considered
the testimony and written submissions of all commenters supporting
and opposing this proposal in light of the full record in this case and
the factors the Board is required to consider under the BHC Act.
28. The Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq.)
("ECOA") and the Fair Housing Act (42 U.S.C. § 3601 et seq.) are
collectively referred to as "fair lending laws."
29. 54 Federal Register 13.742 (1989).
30. 54 Federal Register at 13,742.
31. Wells Fargo Bank, N.A., Phoenix, Arizona, a de novo credit
card bank formed in 1995, and Wells Fargo HSBC Trade Bank, N.A.,
San Francisco, California, a de novo bank approved by order dated
September 18, 1995 (81 Federal Reserve Bulletin 1037 (1995)), have
not been examined for CRA performance.
32. The ratings are set forth in Appendix E.
Legal Developments
C. Wells Fargo Bank's CRA Performance Record
In general. The Wells Fargo Examination found that the
bank's community delineation was reasonable and did not
arbitrarily exclude LMI neighborhoods. Examiners noted
that Wells Fargo Bank's geographic distribution of credit
extensions, applications, and denials was reasonable, and
that the distribution of consumer and business credit was
consistent with demographic patterns in the bank's community. Wells Fargo has stated that the delineated community for the combined institution would consist of all areas
currently included in the delineated community of each
institution.
The Wells Fargo Examination found that the bank's
ascertainment of community credit needs, which consisted
of community contacts, outreach programs, and an annual
internal bank-wide survey of credit needs, was extensive."
Examiners also concluded that the bank's marketing program was designed to inform all members of the community of its credit services, including specific advertising and
alternate marketing methods to reach LMI individuals.34
For example, the bank advertised mortgage products in
Spanish and English and printed product brochures in
English, Spanish, Korean, Chinese, and Vietnamese. The
Wells Fargo Examination also found that the bank had
engaged in several direct mail campaigns to market its
mortgage, consumer, and small business loan products.35
These direct mail efforts included a joint campaign in
Spanish with a local Los Angeles company experienced in
marketing to the Hispanic community in central Los Angeles. Wells Fargo Bank also participated in numerous conferences, seminars, and community activities, several of
which specifically focused on small businesses owned by
women and minorities.
Small business lending. Wells Fargo Bank's business
strategy for lending activities focuses on commercial and
corporate lending. The strategy includes an emphasis on
small business lending.36 Wells Fargo Bank made 24,957
new small business loans, totalling approximately
33. Examiners noted that the bank's management maintained ongoing and productive contacts with a wide range of organizations,
including federal, state, and local public officials; community, minority, and consumer groups; affordable housing developers; small business owners; and nonprofit agencies. Information derived from these
contacts was used in the development of new products as well as in
modifications to existing products.
34. Several commenters criticized Wells Fargo Bank's outreach and
marketing efforts to minority residents in certain geographic areas.
35. One commenter contended that Wells Fargo Bank does not
market its small business loans in the South Bronx, New York. Wells
Fargo Bank indicated that the bank acquires small business prospect
lists from national third party suppliers and uses internal selection
criteria that are not limited geographically by zip code or census tract.
While Wells Fargo Bank is located in California and does not operate
any offices in New York state, the bank reported that, in 1995, it sent
9,789 solicitations for revolving small business lines of credit to small
businesses in the South Bronx.
36. Wells Fargo Bank defines small businesses as businesses with
annual revenues of $5 million or less. The Bank indicated that more
than 80 percent of its 1995 small business loans in California were for
$50,000 or less.
451
$1.2 billion, in 1994, and 28,660 new small business loans,
totalling approximately $1.1 billion, through September 30, 1995.37 Of these loans, 6,487, totalling approximately $351 million, were made to borrowers in LMI
census tracts in 1994. During the first nine months of 1995,
the bank made 7,540 loans, totalling approximately $303
million, to borrowers in LMI census tracts.
Under its Community and Economic Development Loan
Program ("CEDL Program"), Wells Fargo Bank offers a
number of business loan products, including loans to small
businesses, businesses owned by minorities and women,
and small farms.38 Examiners concluded that the bank's
performance in lending to small businesses and small farms
was strong.
Wells Fargo Bank is actively involved in a number of
other small business lending programs.39 In particular, the
Wells Fargo Examination noted that the bank strongly
supported state legislation to create the California Capital
Access Program ("CalCAP"), which allows small businesses that do not qualify for traditional bank financing to
raise capital through a loan funded jointly by the state and
the bank 40 Since April 1994, Wells Fargo Bank has made
approximately 1,000 small business loans under CalCAP,
totalling $140 million. In addition, examiners noted that
the bank is the largest Small Business Administration
("SBA") 504 lender in California.41 Other Wells Fargo
Bank special lending programs include an alliance with the
National Association of Women Business Owners to provide a new $1 billion loan fund for women business
owners nationwide and a Minority Business Loan Outreach
Program to facilitate loans to minority business communities in California. In addition, in 1995, Wells Fargo Bank
37. This includes Small Business Administration, California Capital
Access Program, small farm loans, and loans made under other
government-guaranteed lending programs. Early in 1995, the bank
announced a goal of $2 billion for new loans to small businesses in
California by the end of 1995. Wells Fargo Bank indicated that
preliminary results of 1995 loan approvals show that the bank exceeded its $2 billion small business lending goal by approximately
$1.7 million.
38. Wells Fargo Bank defines small farms as farms with annual
revenues of $1 million or less.
39. Wells Fargo Bank originates small business loans through its
branches, by telephone, through direct mail solicitations, and through
the use of specialized business financing officers, who are trained
specifically to help small business owners. In addition, Wells Fargo
indicated that its National Business Banking Center, a new telephone
banking center, allows small business customers to address all their
banking needs 24 hours a day, seven days a week, with a telephone
call. For example, small business customers can handle account
maintenance, funds transfers, problem resolution, credit line increases,
consultations, and overdraft notification, and can open new accounts
by using the National Business Banking Center.
40. CalCAP assists small businesses by using public money to
attract private sector financing and by providing timely decisions on
the government's guarantee.
41. The SBA 504 loan program offers greater underwriting flexibility and longer terms on real estate and major equipment. The bank's
data show it made 295 SBA 504 loans, totalling $125.7 million, in
1994, and 324 SBA 504 loans, totalling $128.9, through November 30, 1995. Wells Fargo Bank also offers several other types of SBA
loans.
452
Federal Reserve Bulletin • May 1996
committed to make a total of $50 million in senior secured
bank loans for projects funded by the Los Angeles Community Development Bank ("LACDB"), which is scheduled to open in 1996. The LACDB is a multi-bank, city and
federal effort to provide venture capital to small businesses
to finance business expansion in the economically disadvantaged areas of South Central Los Angeles and the
San Fernando Valley.
Wells Fargo Bank also has provided investments, contributions, and technical assistance for several organizations
that provide micro-loans and/or start-up small business
financing. These organizations include the Kern Small
Business Loan Fund, Operation Hope, the Pasadena Enterprise Center, the San Francisco Renaissance, Assign International, the Black Economic Development Task Force,
Inc., the City Heights Community Development Corporation, and the Community Financial Resource Center. In
particular, the bank recently announced a $500,000 investment in the Vermont Slauson Community Development
Corporation, which provides micro-lending for start-up
small businesses in South Central Los Angeles.
Housing-related lending. Wells Fargo Bank participates
in various affordable housing activities, including lending
to developers of city-sponsored, nonprofit and for-profit
housing development projects. For example, the Wells
Fargo Examination noted that Wells Fargo Bank had committed $106 million to the development of 1,507 affordable
housing units in 20 development projects in 1994. Examiners also found that Wells Fargo Bank had provided a
$2.5 million capital investment in the California Equity
Fund, a nonprofit affiliate of the Local Initiatives Support
Corporation ("LISC"), which provides equity for the development of low-income housing projects throughout California; approximately $2 million in capital contributed to
organizations that sponsor affordable housing or small
business loan pools; and a $6.2 million line of credit to the
San Diego Housing Commission for a loan pool to support
rehabilitation in LMI communities. In addition, examiners
noted that Wells Fargo Bank had committed $50 million to
a $300 million lending pool established by the Bay Area
Residential Investment and Development Group to fund
the construction of up to 5,000 very low-, low-, and
moderate-income housing units.
Since the Wells Fargo Examination, the bank continued
to provide construction financing for affordable housing,
including the extension of 63 affordable housing-related
loan commitments, totalling $270 million, through September 30, 1995. Wells Fargo Bank also stated that it committed over $30 million to the California Community Reinvestment Corporation's ("CCRC") revolving loan pool,
which provides funds for permanent financing of affordable housing projects. CCRC has funded over 10,000 units
of housing in California since 1989, and Wells Fargo Bank
is the second largest investor in the CCRC. In addition,
Wells Fargo Bank made a $1 million contribution to LISC
in 1995 to finance nonprofit community development corporations, to construct affordable housing, and to provide
services in low-income urban and rural communities in
California.42 Wells Fargo also offered mortgage products
under the CEDL Program that feature no points, no application fees, and downpayments as low as 5 percent.
In April 1995, Wells Fargo Bank announced a joint
venture with Norwest Mortgage, Inc. ("Norwest Mortgage"), called Towne Square, Inc. ("Towne Square"),
whereby Norwest Mortgage will underwrite and fund and
Wells Fargo Bank will service residential mortgage loans
made to Wells Fargo Bank customers.43 First Interstate has
entered into a similar arrangement with PHH Mortgage Co.
("PHH").
A number of commenters argued that these joint ventures indicate that Wells Fargo Bank is no longer committed to serving the mortgage credit needs of its communities
and, consequently, that the bank's performance under the
CRA is inadequate. The Board notes that the CRA contemplates that depository institutions may choose to focus on
addressing particular credit needs of the community consistent with the bank's overall business strategy, and that the
CRA does not require banks to provide any specific type of
loan product or to participate in any specific type of loan
program. As explained above, Wells Fargo Bank has focused its activities principally on commercial lending and
has established and implemented significant commercial
lending programs throughout its delineated community.
The joint venture with Norwest Mortgage is an attempt by
Wells Fargo Bank to assure that customers throughout its
delineated community continue to have access to mortgage
credit, while allowing Wells Fargo Bank to focus its attention on the small business credit needs of it community.44
Moreover, Wells Fargo Bank is a substantial source of
credit for the construction of affordable housing.
The Board also has reviewed HMDA data in considering
comments relating to the past mortgage origination activities of both institutions. Those data indicate that from 1993
to 1994 Wells Fargo Bank increased its percentage of loan
originations to minorities from 25.7 percent to 40.5 percent
42. Wells Fargo Bank estimated that approximately one-third of its
loans for construction financing of affordable housing have supported
affordable housing in rural areas. The bank also indicated that it is
actively involved in financing rural self-help housing projects sponsored by the Farmers Home Mortgage Administration and the California Housing Finance Agency.
43. Wells Fargo Bank believes that the joint venture will result in
many benefits to its customers, including mortgage loans with more
flexible underwriting criteria under an arrangement with the Federal
National Mortgage Association, access to Norwest Mortgage's Federal Housing Administration ("FHA") and Veterans Administration
("VA") loan programs, easier application and approval processes, and
the introduction of a counseling program for new homebuyers.
44. Several commenters have criticized the lending records of these
joint ventures in LMI census tracts and census tracts with predominately minority populations in various cities. Wells Fargo responds
that Norwest Mortgage was selected for its joint venture after careful
consideration of Norwest Mortgage's lending activities involving LMI
and minority borrowers. In particular, Wells Fargo notes that Norwest
Mortgage has been recognized for its mortgage activities by the U.S.
Department of Housing and Urban Development and ranks as one of
the top five FHA lenders in 1994. Wells Fargo also intends to review
First Interstate's joint venture with PHH to determine if it should be
retained.
Legal Developments
and to LMI minority borrowers from 5 percent to 11.2 percent.45 From 1993 to 1994, FICAL also increased its percentage of loan originations to minority borrowers from
21.3 percent to 27.8 percent, and to LMI minority borrowers from 4.5 percent to 6.7 percent.46 However, HMDA
data also indicate that there are disparities in the denial
rates for both banks according to race.
The Board is concerned when an institution's record
indicates disparities in lending to minority applicants, and
it believes that all banks are obligated to ensure that their
lending practices are based on criteria that assure not only
safe and sound lending, but also equal access to credit by
creditworthy applicants regardless of race. The Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its community. The Board also recognizes that HMDA data have
limitations that make the data an inadequate basis, absent
other information, for determining that an institution has
engaged in illegal discrimination in making lending decisions.
Because of the limitations of HMDA data, the Board has
carefully reviewed other information, particularly examination reports that provide an on-site evaluation of compliance by these institutions with fair lending laws. The most
recent examinations of Wells Fargo Bank and FICAL
found no practices that were intended to discourage credit
applications nor were there any findings of prohibited
discrimination or other illegal credit practices.47 Both institutions were found to be in compliance with applicable fair
lending laws and regulations 48 Examiners noted moreover,
that Wells Fargo Bank's board and senior management had
written policies and procedures that effectively support
compliance with fair lending laws, and that the bank's
personnel at all levels receive regular training on compliance with fair lending laws and regulations. The Wells
Fargo Examination also found that the bank actively solicited applications for its credit products throughout its delineated community.
Community development and other lending. The Wells
Fargo Examination found that the bank engaged in a vari-
45. The bank also reported an increase in loan applications for the
acquisition of properties located in LMI census tracts and census
tracts with predominantly minority populations and from minority
applicants for the review period, despite a decline in these applications
for lenders in the aggregate.
46. From 1993 to 1994, the percentage of applications from African
Americans increased from 2.9 percent to 4.4 percent, Hispanics from
8.5 percent to 12.6 percent, and Asians from 3.8 percent to 4.1 percent.
47. Several commenters made general allegations that Wells Fargo
violated fair lending laws.
48. One commenter's allegations regarding First Interstate's compliance with fair lending laws were considered by the Board in the First
Interstate Bancorp, 80 Federal Reserve Bulletin 1016 (1994) (order
dated September 22, 1994) ("Sacramento Saving Order"), and for the
reasons discussed in that order, which are incorporated herein, were
determined not to warrant denial of the application. The recent FICAL
Examination noted two technical violations of the ECOA. Examiners,
however, determined that the violations were isolated and did not
adversely affect the bank's performance under the CRA.
453
ety of community development activities, including loans
totalling approximately $400 million for community revitalization and job retention initiatives since 1991, donation
of office space to community-based organizations, and
sponsorship of educational seminars and credit-related
trade shows. Examiners also noted that Wells Fargo Bank
engaged in a number of programs to assist disaster relief
throughout California. For example, the bank provided
grants, low-interest loans, and unsecured loans to support
fire, rainstorm, and earthquake relief. In addition, Wells
Fargo Bank participated in the Rebuild Los Angeles Community Lending Corporation, which was formed in 1992
after the civil disturbances in Los Angeles.
Wells Fargo Bank indicated that it also provides economic development contributions to programs that increase
the supply and availability of entry-level employment opportunities and that help provide employees entering the
workforce with current workplace skills. In addition, the
bank stated that it provides both staff and financial contributions to organizations that offer credit education and
counseling services, such as the Los Angeles Community
Financial Resource Center and Consumer Credit Counselors.49
Wells Fargo Bank also offers a variety of consumer
products designed to help meet the credit needs of its LMI
communities, including the Installment Loan Low Income
Finance Terms and Credit Card Low Income Finance
Terms products (collectively, "L.I.F.T. loans"), and Secured Credit Cards. L.I.F.T. loans, which are extended only
to low-income borrowers, feature low minimum loan
amounts starting at $500, and offer smaller monthly payments through longer terms. Wells Fargo Bank indicated
that it set a $10 million goal for originating both auto and
consumer L.I.F.T. loans in 1995, and noted that, through
October 31, 1995, the bank made 9,116 consumer L.I.F.T.
loans, totalling $31.6 million.50
Community reinvestment pledge. In connection with this
proposal, Wells Fargo announced a 10-year, $45 billion
community reinvestment pledge ("CRA Pledge").51 The
major elements of the CRA Pledge include the following:
(1) $7 billion in affordable housing and community
development, including construction financing for af-
49. In response to commenters who expressed concern that certain
types of loans, loan programs, or investments offered by First Interstate would cease after consummation of the proposal, Wells Fargo
stated that it will review all existing First Interstate lending commitments, programs, and investments, as well as its own CRA-related
activities, and would continue to participate in those activities that
work best in assisting to meet community needs.
50. Wells Fargo Bank indicated that, in 1994, it originated 1,387
consumer L.I.F.T. loans, totalling approximately $4.1 million, in LMI
census tracts, and that during the first nine months of 1995, it originated 2,606 consumer L.I.F.T. loans, totalling approximately
$7.9 million.
51. Several commenters characterized Wells Fargo's pledge as a
public relations strategy designed to win public opinion and contended that the pledge is too vague and is largely unenforceable. The
Board's consideration of Wells Fargo's record of CRA performance is
based on all the facts of record, and Wells Fargo's pledge for future
performance is only one aspect of this consideration.
454
Federal Reserve Bulletin • May 1996
fordable housing development, and non-residential
community/economic development projects that offer
neighborhood stabilization and job growth;
(2) $8.5 billion in commercial loans to middle market
businesses in support of economic development, including loans to businesses which are at least 50-percent
owned and controlled by minorities, women, or disabled
individuals, and loans to businesses located within established Enterprise or Empowerment Zones;
(3) $25 billion in small business loans to businesses
generally smaller than those served by the Commercial
Banking Group,52 and small farm loans;
(4) $2 billion in residential second mortgage loans to
one-to-four unit owner-occupied properties located in
low-income census tracts, or to LMI borrowers regardless of property location;53
(5) $2 billion in consumer loans to low-income individuals who do not meet the standard underwriting requirements for a loan, but have established some credit and
employment history; and
(6) $500 million in equity investments in community
development projects.
In addition to its CRA Pledge,Wells Fargo also has pledged
that the organization would make at least $300 million in
corporate contributions over 10 years, 75 percent of which
would be devoted to community economic development
projects, social services for the disadvantaged, and educational efforts primarily designed to benefit low-income,
disabled, and minority students.54
Wells Fargo notes that its 1990 pledge of $1 billion in
CRA-related lending over seven years under its CEDL
Program was exceeded in two and a half years. In addition,
in April 1993, Wells Fargo pledged $5 billion in CRArelated lending over ten years, and projects that the goal
will be exceeded in approximately three years.55
Branches and branch closings. A number of commenters have raised concerns that the branch closures projected
by Wells Fargo in connection with this proposal would
have an adverse effect on access to banking services,
particularly in LMI communities. Many commenters also
expressed concern with Wells Fargo Bank's general strategy of closing traditional "brick and mortar" branches in
favor of smaller in-store branches and banking centers.
These commenters contended that the in-store banking
centers would not serve the needs of customers as well as
52. Wells Fargo's Commercial Banking Group generally markets
credit to businesses with annual sales in excess of $5 million.
53. Several commenters maintained that Wells Fargo's CRA Pledge
does not meet the needs of LMI rural areas, particularly in central
California and outside California.
54. Wells Fargo also intends to honor all the charitable contribution
commitments made by FICAL to date.
55. Wells Fargo contends that the CRA Pledge increases the amount
of community lending for both institutions. Wells Fargo notes that, in
1993, FICAL announced a separate 10-year/$2 billion lending pledge
which, when added to Wells Fargo's earlier pledge of $5 billion,
would make the aggregate CRA-related lending goals for both institutions $7 billion.
traditional branches, particularly small business customers
and residents of LMI communities. In addition, some commenters expressed concern that Wells Fargo's focus on
electronic banking facilities, including banking by personal
computer, would not serve the needs of the elderly, the
disabled, non-English speaking individuals, people without
access to or familiarity with electronic facilities, and LMI
neighborhoods.
The Board has carefully considered these and the other
comments regarding branching in light of the facts of
record. Wells Fargo has indicated that it has not finally
determined either the number or location of branches that
will be closed or consolidated as a result of this transaction.
Wells Fargo has explained that a decision regarding branch
closures and consolidations cannot be made until it has had
an opportunity to obtain and evaluate data regarding customer usage of various facilities. Wells Fargo has provided
a preliminary indication of branch locations that are, or are
expected to be, under review. More than 55 percent of the
branches under review are within one-half mile of another
traditional full-service branch operated by Wells Fargo,
more than 75 percent are within one mile of another
full-service branch, and approximately 93 percent are
within 1.5 miles of a traditional full service Wells Fargo
branch. Nearly all of the offices under review are also
within closer proximity to an in-store banking facility.
Wells Fargo has indicated that it would follow its existing branch closure policy before closing any branches
acquired in this transaction. Under this policy, the bank's
Community Development Department must analyze a
number of factors before determining that a branch may be
closed. These factors include identifying the impact of the
branch closure on customers, evaluating alternative locations and facilities to service customers, analyzing patterns
of customer usage, and analyzing a number of real estate
issues, including the attractiveness and usefulness of the
facility. An important element of the branch closure policy
is an on-site visit to the branch and the affected neighborhood by a member of the bank's Community Development
Department to assess the potential effect of a branch closure on the availability of banking services in the community before a decision is made whether to close the branch.
A member of the bank's Community Development Department also responds to concerns expressed by community
representatives about proposed branch closings and assists
in determining actions that can be taken to mitigate those
concerns.
The Wells Fargo Examination found that the bank's
record of opening and closing branches reflected responsiveness to the needs of its community, and that branch
closures did not adversely affect access to the bank's loan
products and services.56 Examiners noted that the bank's
56. One commenter claimed that Wells Fargo Bank closed a large
number of branches since the bank's last CRA examination, and that
the Board should review the impact of these closures on the convenience and needs of the community. Wells Fargo indicated that, in
recent years, the bank has closed a number of branches, but has
Legal Developments
formal branch closure policy requires management to consider the potential impact on the community before closing
a branch, and that the bank refrains from closing branches
in areas where there are no other Wells Fargo Bank
branches nearby.
In order to address the specific concerns raised by commenters regarding branch closures that may result from
this proposal, Wells Fargo indicated that it will not close
branches in LMI communities without offering alternative
facilities to meet the needs of the surrounding neighborhood.57 In addition, Wells Fargo stated that it is continuing
to identify opportunities for new banking outlets in lowincome communities, independent of this proposal,58 and
would consider locations other than supermarkets in areas
where no major supermarkets are available. Wells Fargo
also indicated that it would continue to be flexible in the
design of in-store banking outlets to accommodate community needs, including small business needs.59
As noted above, a number of commenters also expressed
concern about the strategy followed by Wells Fargo of
converting traditional branch bank locations to banking
centers in supermarkets. Wells Fargo has explained that its
overall strategy is to increase the number, access, and
convenience of distribution points for banking services so
that it can better serve its communities.60 A major component of this strategy is to offer products and services
through in-store branches and in-store banking centers.61
The supermarket branches and banking centers operated by
Wells Fargo typically are open for longer hours than traditional branches and typically are staffed with bank personnel seven days a week as well as during evening hours on
weeknights. Personnel at supermarket branches and bank-
established a greater number of banking outlets than it has closed, in
an effort to expand its distribution system and enhance customer
convenience and accessibility.
57. Wells Fargo indicated that, in addition to major supermarket
chains, it has entered into arrangements with smaller grocery store
operations. In addition, where there is no grocery store branch alternative, Wells Fargo maintained that it would not close a traditional
branch unless there is a convenient traditional branch nearby.
58. For example, Wells Fargo indicated that it was in the process of
opening three new banking outlets in South Central Los Angeles.
59. Wells Fargo indicated that it is committed to using technology to
improve its level of service and variety of products, and to meet the
needs of customers for alternative delivery systems. Wells Fargo
indicated that, because residents in LMI communities may not yet be
able to use new technology to obtain banking services, it would rely
on other delivery systems in those communities, including an increased number of staffed banking outlets.
60. For example, Wells Fargo indicated that, in 1995, it increased its
number of banking outlets by 54 percent, and now has a total of 974
distribution points in California as compared to 633 in 1994. Wells
Fargo estimated that, by year-end 1996, the bank will have approximately 1,318 banking outlets in California.
61. An in-store branch is staffed with 4 - 6 full time banking officers,
and generally can conduct the full range of retail banking services
available at a traditional branch. An in-store banking center is
equipped with an ATM, a 24-hour telephone line to Wells Fargo
Bank's customer service center, and a sales kiosk, is staffed by a bank
officer, and can conduct the full range of retail banking services
available at a traditional branch, other than check cashing and merchant coin and currency services.
455
ing centers accept loan applications and assist customers in
applying for loans, opening new accounts, answering questions regarding banking services, and assisting customers
in using the ATMs and telephone services. In-store
branches and banking centers focus on providing banking
products and services to retail customers.
Wells Fargo currently addresses the credit needs of commercial customers, including small business customers,
through a combination of business loan representatives
who operate out of regional business loan centers and full
service branches. Wells Fargo expects to continue to emphasize its business loan representatives as the direct contacts for business lending activities. In addition to direct
contacts with business loan representatives, Wells Fargo
will accept small business loan applications at all of its
in-store branches and banking centers. Wells Fargo also
stated that it will continue to attempt to ensure that a
traditional branch is located within a reasonable distance to
areas with a high concentration of small retail businesses
that need coin and cash services. In addition, Wells Fargo
is planning to open Merchant Banking Centers that are
tailored to the specific needs of small businesses and will
offer a full line of business services, including coin and
teller services.
D. First Interstate's CRA Performance Record
Record in California. The FICAL Examination found that
the bank's community delineation was reasonable and did
not exclude any LMI areas that the bank would be expected to serve. Examiners also concluded that FICAL
effectively markets its products and services in a manner
that ensures that all segments of its local communities are
aware of those products, including advertisements in English, Mandarin, and Spanish in various local print media.62 FICAL also conducts various direct mailing campaigns with prospect lists developed by outside agencies
and from its existing customer base.
FICAL engages in lending activities through a number
of programs designed to help meet the credit needs of its
local communities, including LMI neighborhoods.63
Examiners noted that FICAL had exceeded its 1993
10-year/$2 billion lending commitment to make loans to
62. One commenter alleged that FICAL does not effectively market
its products and services in LMI areas and communities with predominantly minority residents and that the bank lacks an effective mechanism to measure the success of its marketing efforts.
63. Several commenters contended that First Interstate has not
complied with the commitments made in the Sacramento Savings
Order. Commenters also raised concerns about whether Wells Fargo
would continue to comply with commitments made in the Sacramento
Savings case and in connection with First Interstate's acquisition of
San Diego Financial Corporation, San Diego, California, First Interstate Bancorp, 80 Federal Reserve Bulletin 351 (1994). Based on all
the facts of record, including information from Wells Fargo and
supervisory reports of the Federal Reserve Bank of San Francisco
("Reserve Bank"), the Board concludes that First Interstate has complied substantially with the commitments made in the Sacramento
Savings Order.
456
Federal Reserve Bulletin • May 1996
assist in programs for the construction and acquisition of
low-income single and multi-family housing, state and
federally guaranteed loan programs, small business development and expansion, and nonprofit community-based
organizations.64 The bank also committed $50 million to
fund a portfolio loan program, the Mortgage Assistance
Program ("MAP"), with flexible underwriting criteria for
nonconforming mortgage loans.65 In addition, examiners
noted that FICAL offers several other specialized mortgage
programs to help meet the needs of LMI individuals,
including:
(1) The Down Payment Assistance Program, which offers below-market interest rates,
(2) The Home Buyers Assistance Program, which allows
downpayments to consist of a gift from a family member
or a grant, and
(3) The Community Advancement Program, which is
available to residences in LMI or predominantly minority neighborhoods.
These mortgage products also finance up to 95 percent of
the appraisal value of the home.66 In addition, FICAL
actively participates in FHA, VA, and Farmers Home Administration loan programs.67
The FICAL Examination also found an increase in the
bank's level of small business lending.68 In addition, examiners noted favorably FICAL's small business lending activities through its Government Guaranteed Lending Unit
and its support of the statewide California Economic Development Lending Initiative ("CEDLI"), a small business
loan consortium.69 FICAL participates in community development lending activities through two specialized lending units in its Community Lending Department, the Economic Development Unit70 and the Affordable Housing
64. FICAL's 1994 lending goal was $214 million ($110 million in
mortgage lending, $17 million in affordable housing, $70 million in
small business lending, and $17 million in government guaranteed
lending). FICAL originated more than $371 million in loans in 1994.
65. In 1994, FICAL funded $16.9 million under the MAP program,
and the bank funded an additional $3.1 million under the program, as
of August 1995.
66. One commenter alleged that denial rates under this program
were too high.
67. Examiners noted that FICAL funded 298 FHA and VA loans,
totalling approximately $24 million in 1994 (includes applications
received in 1993 and funded in 1994).
68. One commenter criticized FICAL's small business lending as
insufficient for an institution of its size. The FICAL Examination
noted that, in the first two quarters of 1995, the bank extended 11,738
small business loans, totalling $265 million, compared to 10,095 small
business loans, totalling approximately $65 million, in the first two
quarters of 1994. FICAL defines small business loans as loans in
principal amounts of $250,000 or less.
69. Wells Fargo has agreed to honor FICAL's commitments to
CEDLI.
70. The Economic Development Unit extends credit to organizations providing basic social services, promoting economic development and creating jobs in low-income areas, such as nonprofit groups
and organizations owned by minorities or women and new and expanding businesses. The FICAL Examination noted that this unit had
originated 41 loans, totalling $14.5 million, and has made seven loan
Unit.71 FICAL also offers First Interstate's Responsive
Specialized Terms ("F.I.R.S.T.") consumer loan program
to meet the special needs of low-income borrowers who
may not meet standard underwriting criteria.72
Record in other states. The Board also has considered
First Interstate's CRA performance record in states outside
California, and in particular, Nevada, Oregon, and Washington, in light of comments received.73 As noted above,
all of First Interstate's subsidiary banks in these states
received either "outstanding" or "satisfactory" ratings
from the OCC in their most recent examinations for CRA
performance (collectively, "OCC Examinations").74
The OCC Examinations found that the community delineations for all of First Interstate's subsidiary banks outside
of California were generally reasonable and did not exclude any LMI neighborhoods. None of the banks was
found to have engaged in illegal credit practices or practices that discouraged applications for credit. Examiners
also determined that the banks' ascertainment efforts were
effective, and that marketing activities were generally adequate and, in some cases, commendable. The banks engaged in various lending activities and community development programs to help meet the credit needs of its
communities, including LMI neighborhoods. Examiners
indicated that all these banks offered some type of program
to support affordable housing and small business lending in
their communities, and that all banks participated to some
extent in federal and local government-sponsored loan
programs. The OCC Examinations, moreover, found that
many of First Interstate's subsidiary banks were actively
involved in community development lending programs in
conjunction with local nonprofit organizations or community development corporations.
The FI Nevada Examination determined that the bank
had been active in its efforts to address a significant portion
of the identified credit needs in its delineated community,
and found that the bank's loans for residential mortgages,
housing rehabilitation, home improvement, small business,
and small farms were available throughout the community.
commitments, totalling $8.6 million, since the bank's last CRA performance examination in April 1994.
71. The Affordable Housing unit provides financing to developers of
affordable housing for LMI households, including the construction of
new properties and the rehabilitation of existing properties. The
FICAL Examination noted that this unit originated 27 loans, totalling
over $132 million, since the bank's last CRA performance examination in April 1994.
72. F.I.R.S.T. loans have longer terms and provide for lower
monthly payments than standard personal loans and can be unsecured
personal loans.
73. Wells Fargo also indicated that it intends to meet with
community-based organizations outside California to discuss CRArelated issues in areas outside of California that are served by First
Interstate.
74. The dates of the CRA examinations for subsidiaries operating in
Nevada, Oregon and Washington are: First Interstate Bank of Nevada,
Las Vegas, Nevada, in September 1994 ("FI Nevada Examination");
First Interstate Bank of Oregon, Portland, Oregon, in November 1994
("FI Oregon Examination"); and First Interstate Bank of Washington,
Seattle, Washington in November 1994 ("FI Washington Examination").
Legal Developments
In addition, the FI Nevada Examination noted that the bank
offered a number of credit products to meet the credit needs
of its delineated community, including:
(1) Loans under the State of Nevada Good Neighbors
Program, which provides below market rate mortgages
for LMI applicants,
(2) The City of Henderson Home Improvement Loan,
which focuses on owner-occupied houses for lowincome borrowers in Henderson, and
(3) Small business loans.
The FI Oregon Examination found that the bank had a
strong level of loan originations, with a majority of loans in
its delineated community, and strong lending performance
in LMI areas, small business loans, and consumer loans.
Examiners also found that the bank provided products that
were responsive to the needs of its communities, including
consumer loans in amounts as small as $300, a streamlined
small business loan program for loans up to $250,000, the
use of alternative credit history for a variety of consumer
loan products, and no-minimum-amount mortgage loans.
The FI Washington Examination also found that the
bank had a high level of loan originations in its delineated
community and a commitment to lend to individuals in
LMI areas and small businesses. In addition, the FI Washington Examination noted that the bank's overall level of
lending showed strong growth in all major loan categories.
For example, from June 30, 1993, through June 30, 1994,
the bank generated more than $41.2 million in small business loans of $100,000 or less.
E. Effect on Employment
The Board received a number of comments expressing
concern that the proposal would result in substantial job
losses among First Interstate's employees and would adversely affect the California economy. The BHC Act specifically enumerates the factors the Board may consider in
reviewing a proposal under that Act. These factors relate to
the effect of the proposal on competition, the financial and
managerial resources of the institutions involved, certain
supervisory factors, and the convenience and needs of the
communities served by the institutions involved. The effect
of the proposed acquisition on employment in a community is not among the factors included in the BHC Act. The
convenience and needs factor has been consistently interpreted by the federal banking agencies, the courts, and
Congress to relate to the effect of a proposal on the availability and quality of banking services in the community.
The Board notes in this case that Wells Fargo has indicated that it will provide support to displaced employees
and has taken several steps to minimize any adverse effects
of this proposal on employment or the economy. For example, Wells Fargo has initiated a hiring freeze in October
1995, and has established special programs, such as relocation assistance, training, and incentives, to reassign employees into growth areas of the company. Wells Fargo
also has indicated that severance payments and outplace-
457
ment assistance, such as career counseling and job search
support, will be offered to employees. Wells Fargo also has
announced plans to increase its lending to small businesses, particularly small businesses located in California,
which Wells Fargo believes will help create additional job
opportunities in its community.
Conclusion Regarding Convenience and Needs
Considerations
The Board recognizes that this proposal represents a major
transaction that will affect many communities, particularly
in California.75 Consideration of the effect of this proposal
on the convenience and needs of communities is an important component of the Board's review of this proposal. As
explained above, the information in this case demonstrates
that Wells Fargo has a strong record of helping to meet the
convenience and needs of the communities that it serves.
This record of performance has been demonstrated over
time and has been strongly rated through the course of
several examinations. Numerous commenters, including
many community representatives and organizations as well
as individual customers, have provided testimonials regarding the efforts made by Wells Fargo.
First Interstate also has demonstrated a strong commitment to its communities. Wells Fargo has indicated that it
will review the CRA-related programs initiated by First
Interstate, and will continue to participate in those activities that work best in assisting to meet community needs.
Differences in the business strategies between the two
organizations will likely result, however, in changes in the
types of and manner in which banking products and services will be provided to customers of First Interstate and
the communities that it serves. A significant number of
commenters have expressed concern about these potential
75. Several commenters maintained that the proposed merger would
have a significant impact in areas outside California, and that the
Board should hold public meetings or hearings in these areas, such as
Dallas and Houston, Texas, and Portland, Oregon. Section 3(b) of the
BHC Act does not require the Board to hold a public hearing on an
application unless the appropriate supervisory authority for the bank
to be acquired makes a timely written recommendation of denial of
the application. In this case, neither the OCC nor any appropriate state
supervisory authority has recommended denial.
Under the Board's rules, the Board may, in its discretion, hold a
public hearing or meeting on an application to clarify factual issues
related to the application and to provide an opportunity for testimony,
if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has
carefully considered these requests in light of all the facts of record.
As explained above, the Board held seven public meetings on this
proposal at which 311 commenters provided testimony. In the Board's
view, commenters have had ample opportunity to submit their views
and have, in fact, submitted substantial materials that have been
considered by the Board in acting on the application and notices.
Commenters' requests fail to demonstrate why their written submissions and oral testimony do not adequately present their allegations.
Based on all the facts of record, the Board has determined that
additional public hearings or meetings are not necessary to clarify the
factual record or otherwise warranted in this case, and, accordingly,
the requests for additional public hearings or meetings on the application are denied.
458
Federal Reserve Bulletin • May 1996
changes and the effects they may have on the availability
and quality of banking services in their communities.
However, neither the CRA nor the BHC Act require that
an institution help to meet the credit and other banking
needs of a community in specific ways or provide specific
types of products or services. Both Acts, and the regulations implementing those Acts, provide a banking institution with freedom to develop its own business strategy and
product offering.
As noted above, the record in this case shows that Wells
Fargo is making and has made very strong efforts to help
meet the credit needs of its communities and has indicated
its commitment generally to continue those efforts. In
connection with this proposal, Welis Fargo also has announced plans to strengthen its efforts further.
The Board has carefully weighed the concerns expressed
by commenters, including concerns about branch closures,
the continuation of First Interstate programs, the availability of various banking products and services, and the effect
of this proposal on various communities, and the information obtained through the examination process as well as
information supplied by Wells Fargo and other commenters regarding the record of Wells Fargo in meeting the
credit and banking needs of its communities, Wells Fargo's
record of providing banking services to customers through
traditional and nontraditional means, and Wells Fargo's
plans for strengthening the products and services that it
makes available to the community.76 The Board believes,
after considering all of these facts of record, including
consideration of the assessments of performance of relevant institutions under the CRA and the information provided by commenters, that the convenience and needs
factors in this case are consistent with approval. The Board
will continue to monitor and review the performance efforts made by Wells Fargo in future applications. In this
regard, the Board will monitor Wells Fargo's implementation of its branch closing policy in connection with the
76. Some commenters believed that, because the First Bank proposal was withdrawn, the comment period should have been reoper.ed
to allow the public to comment solely on the Wells Fargo proposal,
and that Wells Fargo should be required to file a new application to
acquire First Interstate. The Board is required under applicable law
and its processing procedures to act on applications submitted under
the BHC Act within specified time periods. The Board notes, moreover, that the commenters and Wells Fargo have had ample opportunity, including seven public meetings, to submit information for the
record and have, in fact, provided substantial submissions. As discussed above, the Board has carefully reviewed the record in this case,
including information provided by commenters and Wells Fargo about
its CRA performance since the most recent performance examinations
of its subsidiary banks and information relating to the possible effects
of this merger on the convenience and needs of the communities to be
served. Moreover, the Board considered all comments on the performance record of Wells Fargo, including comments made at the public
meetings, in connection with the First Bank application that was
withdrawn. Although Wells Fargo provided additional information on
this proposal, no new application was required because of the withdrawal of the First Bank application. Based on all the facts of record,
the Board concludes that the record is sufficient to act on this proposal
at this time, and that delay or denial of this proposal on the grounds of
informational insufficisncy is not warranted.
consolidation and closing of First Interstate branches and
the effect of the branching strategy announced by Wells
Fargo on the availability of banking services and convenience and needs of the community.
Other
Considerations
Wells Fargo also has filed notice under section 4(c)(8) of
the BHC Act to acquire First Interstate Resource Finance
Associates, Newport Beach, California, and thereby engage in making, acquiring, and servicing loans, and First
Interstate's voting interest in Star System, Inc., a California
nonprofit mutual benefit corporation, and thereby engage
in providing data transmission services through an electronic funds transfer network. The Board previously has
determined by regulation that the proposed activities are
closely related to banking for purposes of section 4(c)(8) of
the BHC Act.77 Wells Fargo has committed that it will
conduct these activities in accordance with the Board's
regulations and orders approving these activities for bank
holding companies.78
In order to approve these notices, the Board also must
determine that the acquisition of First Interstate's nonbanking subsidiaries and performance of the proposed activities
by Wells Fargo "can reasonably be expected to produce
benefits to the public . . . that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or
unsound banking practices."79 Wells Fargo maintains that
consummation of the proposal would expand the products
and services that it offers its customers. The record in this
case indicates that there are numerous providers of these
lending and data processing services, and there is no evidence in the record to indicate that consummation of this
proposal is likely to result in any significantly adverse
effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or
unsound banking practices that would outweigh the public
benefits of this proposal. Accordingly, the Board has determined that the balance of public interest factors it must
consider under section 4(c)(8) of the BHC Act is favorable
and consistent with approval.
Wells Fargo also has applied under section 25 of the
Federal Reserve Act (12 U.S.C. § 601) and section 211.3(a)(1) of the Board's Regulation K (12 C.F.R.
211.3(a)(1)), to establish branches in the following locations, which are First Interstate branches that Wells Fargo
would acquire as a result of the merger: London, United
Kingdom; Seoul, South Korea; and Taipei, Taiwan. The
Board has considered the factors it is required to consider
when reviewing applications for establishing branches pursuant to section 25 of the Federal Reserve Act and, based
77. See 12 C.F.R. 225.25 (b)(1) and (7).
78. Wells Fargo also has committed that it will not reactivate any
currently inactive subsidiaries of First Interstate without first obtaining the Board's approval.
79. 12 U.S.C. § 1843(c)(8).
Legal Developments
on all the facts of record and for the reasons discussed in
this order, finds those factors to be consistent with approval.
Wells Fargo also has provided notice under sections 211.5(b)(2)(i) and 211.5(c)(2) of the Board's Regulation K (12 C.F.R. 211.5(b)(2)(i) and 211.5(c)(2)), of its
proposed acquisition of 100 percent of the First Interstate
Bank of Canada, Toronto, Canada. In addition, Wells Fargo
has provided notice under section 4(c)(13) of the BHC Act
(12 U.S.C. § 1843(c)(13) and section 211.5(c)(2) of Regulation K (12 C.F.R. 211.5(c)(2)) of its intention to acquire
100 percent of certain foreign subsidiaries of First Interstate.80
Conclusion
Based on the foregoing, including the commitments made
to the Board by Wells Fargo in connection with the applications and notices, and in light of all the facts of record, the
Board has determined that the applications and notices
should be, and hereby are, approved.81 The Board's approval is specifically conditioned on compliance by Wells
Fargo with all commitments made in connection with the
applications and notices as well as the conditions discussed
in this order.
80. Under section 211.5(d)(6) of Regulation K (12 C.F.R.
211.5(d)(6)), these subsidiaries, listed in Appendix B, hold and own
property or problem assets associated with First Interstate's prior
operations in London. Wells Fargo has committed that it will not
reactivate any inactive foreign subsidiary of First Interstate or foreign
branch of FICAL without prior approval from the Board.
81. Several commenters also alleged that Wells Fargo Bank does
not have a sufficient number of African Americans and other minorities in senior management and that it discriminates against minorities
in its employment practices. Other commenters alleged that the proposal would result in a loss of jobs that currently are held by
minorities and women. One commenter asserted that First Interstate
engaged in employment discrimination. Wells Fargo indicated that it
formed a Cultural Diversity Committee in 1990, staffed by senior
managers who report directly to the Chairman, to recommend ways to
attract, retain, and promote employees and managers who reflect the
communities that it serves. Wells Fargo stated that it annually reviews
its affirmative action plans, and noted that, as of the third quarter 1995,
30 percent of Wells Fargo's officials and managers were minorities
and 58 percent were women. Moreover, Wells Fargo indicated that 35
percent of its current board of directors are minorities or women.
The Board notes that, because Wells Fargo Bank employs more than
50 people, serves as a depository of government funds, and acts as an
agent in selling or redeeming U.S. savings bonds and notes, it is
required by regulations of the Department of Labor to:
(1) file annual reports with the Equal Employment Opportunity
Commission ("EEOC"); and
(2) have in place a written affirmative action compliance program
which states efforts and plans to achieve equal opportunity in the
employment, hiring, promotion, and separation of personnel.
See 41 C.F.R. 60-1.7(a), 60-1.40. The Board also notes that,
pursuant to regulations of the Department of Labor, Wells Fargo, as
the parent company, also is required to file an annual report with the
EEOC covering all employees in its entire corporate structure. The
EEOC has jurisdiction for determining whether companies are in
compliance with the equal employment statutes. The Board is not
aware of any finding or adjudication of illegal employment practices
to date by Wells Fargo or First Interstate.
459
The Board's determination as to the nonbanking activities to be conducted by Wells Fargo is subject to all the
conditions in the Board's Regulation Y, including those in
sections 225.7 and 225.23(g) (12 C.F.R. 225.7 and
225.23(g)), and to the Board's authority to require such
modification or termination of the activities of a holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with, or to prevent evasion
of, the provisions and purposes of the BHC Act and the
Board's regulations and orders issued thereunder. The commitments and conditions relied on by the Board in reaching
this decision are deemed to be conditions imposed in
writing by the Board in connection with its findings and
decision, and as such may be enforced in proceedings
under applicable law.
The acquisition of First Interstate's subsidiary banks
shall not be consummated before the fifteenth calendar day
following the effective date of this order, and the banking
and nonbanking transactions shall not be consummated
later than three months following the effective date of this
order, unless such period is extended for good cause by the
Board or by the Reserve Bank, acting pursuant to delegated
authority.
By order of the Board of Governors, effective March 6,
1996.
Voting for this action: Chairman Pro Tempore Greenspan, and
Governors Lindsey, Phillips, and Yellen. Absent and not voting:
Governor Kelley.
JENNIFER J. JOHNSON
Deputy Secretary of the Board
Appendix A
First Interstate subsidiary
banks:
(1) First Interstate Bank of Alaska, National Association,
Anchorage, Alaska
(2) First Interstate Bank of Arizona, National Association,
Phoenix, Arizona
(3) First Interstate Bank of California, Los Angeles, California
(4) First Interstate Bank of Denver, National Association,
Denver, Colorado
(5) First Interstate Bank of Englewood, National Association,
Englewood, Colorado
(6) First Interstate Bank of Idaho, National Association, Boise,
Idaho
(7) First Interstate Bank of Montana, National Association,
Kalispell, Montana
(8) First Interstate Bank of Nevada, National Association,
Las Vegas, Nevada
(9) First Interstate Bank of New Mexico, National Association, Santa Fe, New Mexico
(10) First Interstate Bank of Oregon, National Association,
Portland, Oregon
(11) First Interstate Bank of Texas, National Association,
Houston, Texas
460
Federal Reserve Bulletin • May 1996
(12) First Interstate Bank of Utah, National Association,
Salt Lake City, Utah
(13) First Interstate Bank of Washington, National Association, Seattle, Washington
(14) First Interstate Bank of Wyoming, National Association,
Casper, Wyoming
(15) First Interstate Bank, Ltd., Los Angeles, California
(16) First Interstate Central Bank, Calabasas, California
Appendix B
Wells Fargo has filed notices under section 4(c)(8) of the
BHC Act to acquire the nonbanking subsidiaries of First
Interstate including:
(1) Star Systems, Inc., California, and thereby engage in data
processing activities, pursuant to 12 C.F.R. 225.25(b)(7);
and
(2) First Interstate Resource Finance Associates, Newport
Beach, California, and thereby engage in making, acquiring, and servicing loans, pursuant to 12 C.F.R. 225.25(b)(1).
Wells Fargo has provided notice under section 4(c)(13)
of the BHC Act to acquire the foreign subsidiaries of
First Interstate including:
(1) FIL Holding Co., London, England, and thereby hold
property or other problem assets, pursuant to 12 C.F.R.
211.5(d)(6);
(2) First Interstate Holding (UK) Ltd., London, England, and
thereby hold property or other problem assets, pursuant to
12 C.F.R. 211.5(d)(6); and
(3) First Interstate Services Co. (UK) Ltd., London, England,
and thereby hold property or other problem assets, pursuant
to 12 C.F.R. 211.5(d)(6).
Appendix C
Description of California Banking Markets in Which
Wells Fargo and First Interstate Compete
Auburn
Bakersfield
Chico
Davis
Delano
El Centro
Eureka-Arcata
Fairfield-Vacaville
Western Placer County outside of the
modified Sacramento Ranally Metropolitan Area ("RMA")
Bakersfield RMA, plus Shafter,
Arvin, and Buttonwillow
Chico RMA, plus Magalia, Surham,
and Paradise
Davis RMA, plus Dixon
Northern Kern County north of the
Bakersfield RMA
Central Imperial County outside of
the Calexico RMA
Eureka-Arcata RMA, plus Scotia and
Ferndale
Fairfield-Vacaville RMA, plus Winters
Fresno RMA, plus Kinsburg, Selma,
Kerman, and Caruthers
Western Nevada County
Grass Valley
Hemet RMA
Hemet
Kings County
Kings County
Lancaster RMA, plus Rosamond
Lancaster
Los Angeles RMA, plus Rancho
Los Angeles
Santa Margarita
Southwestern Merced County outLos Banos
side the modified Merced RMA
Western Madera County
Madera
Merced RMA, plus Livingston
Merced
Modesto RMA, plus Escalon, HughModesto
son, Ripon, and Oakdale
Monterey-Seaside RMA
Monterey-Seaside
Napa RMA, plus St. Helena
Napa
Oceanside RMA, plus Bonsall and
Oceanside
Fallbrook
Southern Butte County outside the
Oroville
modified Chico RMA
Oxnard-Ventura RMA, plus FillOxnard-Ventura
more, Santa Paula, Ojai, and Riru
Palm Springs RMA, plus Yucca ValPalm Springs
ley, Joshua Tree, Twentynine Palms,
Indio, Coachella, and La Quinta
Western El Dorado County outside
Placerville
the Sacramento RMA
Porterville RMA
Porterville
Redding RMA
Redding
Riverside-San Bernardino RMA,
Riversideplus Lake Arrowhead, Blue Jay, PerSan Bernardino
ris, Nuevo, Beaumont, and Banning
Sacramento RMA, plus Lincoln
Sacramento
Salinas RMA, plus Soledad and
Salinas
Gonzales
San Diego RMA
San Diego
San FranciscoSan Francisco-Oakland-San Jose
Oakland-San Jose RMA
San Luis Obispo
San Luis Obispo County excluding
the Santa Maria RMA
Santa Barbara
Santa Barbara RMA
Santa Cruz
Santa Cruz RMA
Santa Maria
Santa Maria RMA, plus Guadalupe
Santa Rosa
Santa Rosa RMA, plus Healdsburg
Sonoma
Southern Sonoma County outside of
the modified Santa Rosa RMA
Stockton RMA, plus Lodi, Linden,
Stockton
Lockeford, Manteca, Gait, Walnut
Grove, and Woodbridge
Western Riverside County outside
Sun City
the Riverside RMA and the Hemet
RMA
Fresno
Tehama County
Tracy
Turlock
Tehama County
Western San Joaquin County outside
the modified Stockton RMA
Southwestern Stanislaus County outside the modified Modesto RMA,
plus part of northwestern Merced
County
Legal Developments
Victorville
Visalia
Southwestern
San
Bernardino
County north of the Riverside RMA
Visalia RMA, plus Tulare, Exeter,
Woodlake, Three Rivers, and Lindsay
461
Yolo County outside the modified
Davis, Sacramento, and FairfieldVacaville RMAs
Yuba City-Marysville RMA, plus
Live Oak
Woodland
Yuba CityMarysville
Appendix D
Summary of Market Shares for California Banking Markets
Pre-Divestiture
HHI
before
HHI
after
Change
Amount
divested
(Millions of
dollars)
Auburn
Bakersfield
Chico
Davis
Dalano
El Centra
Eureka-Arcata
Fairfield-Vacaville
Fresno
Grass Valley
1337
1579
1377
1732
2547
2032
1971
1468
1740
1458
1557
2214
1797
2036
3529
2428
2024
1726
1817
1679
220
634
421
304
982
396
54
258
78
221
44.3
254.0
74.8
52.9
47.5
35.8
0
0
0
48.0
1337
1632
1488
1732
2547
2124
2024
1726
1817
1458
0
53
111
0
0
92
54
258
78
0
14.6
23.1
22.3
15.2
20.5
21.5
17.3
23.7
14.3
13.8
1/9
1/12
2/11
3/7
4/3
2/6
3/6
2/10
2/17
2/12
Hemet
Kings County
Lancaster
Los Angeles
Los Banos
Madera
Merced
Modesto
Monterey-Seaside
Napa
960
1493
1478
879
2351
1956
1672
964
1282
1239
1031
1735
1815
1014
2839
2404
1891
1146
1683
1326
70
243
337
135
488
448
219
182
401
87
13.8
22.4
53.5
0
18.6
28.9
15.8
0
73.9
0
1003
1493
1564
1014
2351
1956
1788
1146
1394
1326
42
0
86
135
0
0
116
182
112
87
11.3
23.3
20.1
16.5
27.5
25.5
19.7
22.2
24.2
17.8
3/13
1/9
2/8
2/186
2/5
2/6
3/7
1/22
1/13
3/11
Oceanside
Oroville
Oxnard-Ventura
Palm Springs
Placerville
Porterville
Redding
Riverside-San Bernardino
Sacramento
Salinas
1291
1505
1348
1012
1318
2236
1334
1444
1156
1500
1559
1771
1672
1197
1652
2408
1518
1519
1639
1620
268
266
324
184
334
172
184
76
483
120
46.1
39.1
160.4
112.4
49.5
0
0
0
525.6
0
1412
1505
1445
1056
1318
2408
1518
1519
1345
1620
121
0
97
44
0
172
184
76
189
120
20.9
12.5
20.7
14.4
14.9
18.7
19.2
12.6
26.1
21.6
2/14
3/7
2/22
2/21
3/9
2/5
2/9
2/37
1/38
2/10
San Diego
San Francisco-OaklandSan Jose
San Luis Obispo
Santa Barbara
Santa Cruz
Santa Maria
Santa Rosa
Sonoma
Stockton
Sun City
1153
1488
336
582.1
1333
181
23.6
1/49
1403
1427
1515
1247
1407
944
1511
974
1203
1514
1464
1573
1350
1437
1010
1711
1110
1452
111
37
58
76
30
66
200
136
249
16.1
0
0
0
0
0
15.5
0
48.7
1513
1464
1573
1350
1437
1010
1511
1110
1270
110
37
58
76
30
66
0
136
67
21.7
10.1
12.2
15.5
8.9
13.3
24.9
18.0
18.1
2/107
4/12
3/15
3/12
4/11
3/16
1/9
1/21
2/14
Tehama County
Tracy
Turlock
Victorville
Visalia
Woodland
Yuba City-Marysville
1750
1584
1212
1068
1478
1588
1351
1941
1972
1567
1133
1588
1938
1840
191
388
355
65
110
350
488
0
21.4
42.7
0
0
35.3
61.4
1941
1584
1300
1133
1588
1588
1469
191
0
88
65
110
0
118
21.0
25.4
21.1
12.1
16.3
22.7
23.5
2/5
1/7
1/11
3/15
2/13
2/8
1/11
Market
HHI
postdivestiture1
Change
Pro forma
market
share1
NOTE. APPROXIMATE TOTAL DIVESTITURE: $2.5 billion.
1. All post-divestiture HHI calculations and pro forma information assume that branches would be divested to out-of-market firms.
Pro forma
rank/
competitors1
462
Federal Reserve Bulletin • May 1996
Appendix E
First Interstate CRA Performance Examination Ratings
CRA rating
from the OCC
First Interstate subsidiary banks
First Interstate Bank of Alaska, N.A.,
Anchorage, Alaska
First Interstate Bank of Arizona, N.A.,
Phoenix, Arizona
First Interstate Bank of Denver, N.A.,
Denver, Colorado
First Interstate Bank of Englewood, N.A.,
Englewood, Colorado
First Interstate Bank of Idaho, N.A.,
Boise, Idaho
First Interstate Bank of Montana, N.A.,
Kalispell, Montana
First Interstate Bank of Nevada, N.A.,
Las Vegas, Nevada
First Interstate Bank of New Mexico, N.A.,
Santa Fe, New Mexico
First Interstate Bank of Oregon, N.A.,
Portland, Oregon
First Interstate Bank of Texas, N.A.,
Houston, Texas
First Interstate Bank of Utah, N.A.,
Salt Lake City, Utah
First Interstate Bank of Washington, N.A.,
Seattle, Washington
First Interstate Bank of Wyoming, N.A.,
Casper, Wyoming
APPLICATIONS APPROVED
satisfactory
Date
11/1/94
outstanding
8/2/94
satisfactory
9/8/94
outstanding
12/9/93
satisfactory
8/9/93
satisfactory
11/1/94
satisfactory
9/13/94
satisfactory
11/19/93
outstanding
11/1/94
satisfactory
11/18/93
satisfactory
11/1/94
satisfactory
UNDER BANK HOLDING COMPANY
7/30/93
satisfactory
10/15/93
ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Section 3
Applicant(s)
Bank(s)
Effective Date
First Commerce Corporation,
New Orleans, Louisiana
Louisiana Independent Bankshares, Inc.,
Baton Rouge, Louisiana
First National Banker's Bank,
Baton Rouge, Louisiana
March 19, 1996
APPLICATIONS APPROVED
By Federal Reserve
UNDER BANK HOLDING COMPANY
ACT
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
Caldwell Holding Company,
Columbia, Louisiana
Citizens Progressive Bank,
Columbia, Louisiana
Dallas
March 11, 1996
Legal Developments
463
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Dartmouth Capital Group, Inc.,
Encinitas, California
Dartmouth Capital Group, L.P.,
Encinitas, California
SDN Bancorp, Inc.,
Encinitas, California
Executive Bancshares, Inc.,
Paris, Texas
F & M National Corporation,
Winchester, Virginia
Fidelity Company,
Dyersville, Iowa
First Valley Bank Group, Inc.,
Harlingen, Texas
Liberty National Bank,
Huntington Beach, California
San Francisco
February 15, 1996
Collin County National Bank,
McKinney, Texas
FB&T Financial Corporation,
Fairfax, Virginia
Valley State Bank (In Organization),
Guttenberg, Iowa
Pharr Financial Corporation,
Pharr, Texas
Security State Bank,
Pharr, Texas
Pharr Financial Corporation,
Pharr, Texas
Security State Bank,
Pharr, Texas
Gateway Bank and Trust,
Ringgold, Georgia
Heritage National Bank,
Lawrenceville, Illinois
Gulf Southwest Bancorp,
Inc.,
Houston, Texas
Gulf Southwest Nevada Bancorp, Inc.,
Reno, Nevada
Merchants Bank,
Houston, Texas
Bank One, Pikeville, N.A.,
Pikeville, Kentucky
Pinnacle Bancshares, Incorporated,
Paw Paw, Illinois
State Bank of Paw Paw, Illinois
Paw Paw, Illinois
Stockmens Financial Corporation,
Rushville, Nebraska
Benson Financial Corporation,
San Antonio, Texas
Regional Bank of Colorado, N.A.,
Rifle, Colorado
First American Bank of Wahpeton,
Wahpeton, North Dakota
Dallas
March 6, 1996
Richmond
March 14, 1996
Chicago
February 28, 1996
Dallas
March 13, 1996
Dallas
March 13, 1996
Atlanta
February 23, 1996
St. Louis
March 6, 1996
Dallas
March 12, 1996
Richmond
February 15, 1996
Chicago
March 4, 1996
Kansas City
February 28, 1996
Minneapolis
March 19, 1996
Minneapolis
March 19, 1996
Minneapolis
February 13, 1996
Dallas
March 6, 1996
Dallas
March 6, 1996
First Valley Delaware Financial
Corporation,
Dover, Delaware
Gateway Bancshares, Inc.,
Ringgold, Georgia
Heritage Financial Corporation,
Lawrenceville, Illinois
JWL - GSW, Ltd.,
Houston, Texas
Mate wan Bancshares, Inc.,
Williamson, West Virginia
NBE Bancshares, Inc.,
Earlville, Illinois
Nebraska Bankshares, Inc.,
Farnam, Nebraska
Norwest Corporation,
Minneapolis, Minnesota
Norwest Corporation,
Minneapolis, Minnesota
Otto Bremer Foundation,
St. Paul, Minnesota
Bremer Financial Corporation,
St. Paul, Minnesota
Premier Bancshares, Inc.,
La Grange, Texas
Premier Holdings - Nevada, Inc.,
Carson City, Nevada
Premier Holdings - Nevada, Inc.,
Carson City, Nevada
La Grange State Bank,
La Grange, Texas
La Grange State Bank,
La Grange, Texas
464
Federal Reserve Bulletin • May 1996
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Private Bancorporation, Inc.,
Minneapolis, Minnesota
Puget Sound Bancorp,
Port Orchard, Washington
Quinlan Bancshares, Inc.,
Quinlan, Texas
Regions Financial Corporation,
Birmingham, Alabama
Stockmens Financial Corporation,
Rushville, Nebraska
Private Bank Minnesota,
Minneapolis, Minnesota
First National Bank of Port Orchard,
Port Orchard, Washington
Citizens State Bank,
Royse City, Texas
First Gwinnett Bancshares, Inc.,
Norcross, Georgia
Stockmens Management Company,
Rushville, Nebraska
Leffler Bank Holding Company,
Sidney, Nebraska
Nebraska State Bank,
Cozad, Nebraska
First National Bank of Fairfax,
Fairfax, Minnesota
The Wilson State Bank,
Wilson, Kansas
Minneapolis
February 15, 1996
San Francisco
February 22, 1996
Dallas
February 26, 1996
Atlanta
March 6, 1996
Kansas City
February 28, 1996
Minneapolis
March 6, 1996
Kansas City
February 27, 1996
Taylor Bancshares, Inc.,
North Mankato, Minnesota
Wilson Bancshares, Inc.,
Wilson, Kansas
Section 4
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Banc One Corporation,
Columbus, Ohio
Beulah Bancorporation, Inc.,
Sioux Falls, South Dakota
Farmers Bancshares, Inc.,
Hardinsburg, Kentucky
Banc One Leasing Corporation,
Columbus, Ohio
To engage de novo in making and
servicing loans
Breckinridge Loan, Inc.,
Hardinsburg, Kentucky
Farmers Bancshares Finance Corp., Inc..
Hardinsburg, Kentucky
First Finance Mortgage Company of
Southwestern Ohio,
Fairfield, Ohio
To engage in making and servicing
loans
To engage de novo in making and
servicing loans
Metro Savings Bank, F.S.B.,
Wood River, Illinois
Metro Financial Service Corporation,
Inc.,
Wood River, Illinois
USI Alliance Corp.,
Memphis, Tennessee
Progressive Service Corp.,
Gaylord, Minnesota
Synectic Solutions, Inc.,
Gaylord, Minnesota
To commence de novo in the extension
of credit to borrowers of its
subsidiary bank
Cleveland
March 4, 1996
Minneapolis
February 27, 1996
St. Louis
February 16, 1996
Cleveland
March 14, 1996
Chicago
March 13, 1996
Minneapolis
February 27, 1996
St. Louis
February 16, 1996
St. Louis
February 13, 1996
Minneapolis
February 28, 1996
Minneapolis
February 27, 1996
First Financial Bancorp,
Hamilton, Ohio
Heartland Bancshares, Inc.,
Lenox, Iowa
Lake Benton Bancorporation, Inc.
Sioux Falls, South Dakota
Mercantile Bancorporation Inc.,
St. Louis, Missouri
National Commerce Bancorporation,
Memphis, Tennessee
Notice of Progressive Growth Corp.,
Gaylord, Minnesota
Pembina County Bankshares, Ltd.,
Cavalier, North Dakota
Legal Developments
465
Section 4—Continued
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
PNC Bank Corp.,
Pittsburgh, Pennsylvania
Regions Financial Corporation,
Birmingham, Alabama
First Data Corporation,
Hackensack, New Jersey
First Federal Bank of Northwest
Georgia, Federal Savings Bank,
Cedartown, Georgia
Eagle Bancorp, Inc.,
Charleston, West Virginia
Cleveland
March 18, 1996
Atlanta
February 27, 1996
Richmond
March 6, 1996
United Bankshares, Inc.,
Charleston, West Virginia
Sections 3 and 4
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Prairieland Employees Stock
Ownership Plan,
Bushnell, Illinois
Prairieland Bancorp,
Bushnell, Illinois
Chicago
March 8, 1996
APPLICATIONS APPROVED
UNDER BANK MERGER
ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
The Bank of Waverly,
Waverly, Virginia
Chippewa Valley Bank,
Rittman, Ohio
Farmers Bank of Maryland,
Annapolis, Maryland
First Virginia Bank Commonwealth,
Grafton, Virginia
The Ohio Bank,
Findlay, Ohio
The Security Dollar Bank,
Niles, Ohio
Texas State Bank,
McAllen, Texas
First Union National Bank of Virginia,
Roanoke, Virginia
First National Bank of Ohio,
Akron, Ohio
First Virginia Bank-Maryland,
Upper Marlboro, Maryland
First Virginia Bank of Tidewater,
Norfolk, Virginia
Richmond
February 15, 1996
Cleveland
February 23, 1996
Richmond
February 29, 1996
Richmond
February 29, 1996
Cleveland
February 22, 1996
Cleveland
February 29, 1996
Dallas
March 13, 1996
San Francisco
March 8, 1996
Westamerica Bank,
San Rafael, California
Society National Bank,
Cleveland, Ohio
National City Bank, Northeast,
Akron, Ohio
The Border Bank,
Hidalgo, Texas
First State Bank and Trust Company,
Mission, Texas
Napa Valley Bank,
Napa, California
466
Federal Reserve Bulletin • May 1996
PENDING
CASES INVOLVING THE BOARD OF
GOVERNORS
This list of pending cases does not include suits against the
Federal Reserve Banks in which the Board of Governors is not
named a party.
Kuntz v. Board of Governors, No. 96-1079 (D.C. Cir., filed
March 7, 1996). Petition for review of a Board order dated
February 7, 1996, approving applications by The Fifth
Third Bank, Cincinnati, Ohio, and The Firth Third Bank of
Columbus, Columbus, Ohio, to acquire certain assets and
assume certain liabilities of 25 branches of NBD Bank,
Columbus, Ohio. Petitioner has moved to consolidate the
case with Kuntz v. Board of Governors, No. 95-1495.
Henderson v. Board of Governors, No. 96-1054 (D.C. Cir.,
filed February 16, 1996). Petition for review of a Board
order dated January 17, 1996, approving the merger of First
Citizens BancShares, Inc., Raleigh, North Carolina, with
Allied Bank Capital, Inc., Sanford, North Carolina. Petitioners' motion for a stay was denied on March 7, 1996.
Research Triangle Institute v. Board of Governors, No.
1-.96CV00102 (M.D.N.C., filed February 12, 1996). Contract dispute.
In re: Subpoena Duces Tecum, Misc. No. 96-MS-43(TPJ) (D.
D.C., filed February 7, 1996). Motion to enforce a subpoena
issued to the Board seeking, among other things, bank
examination material. On March 18, 1996, the matter was
stayed pending the disposition of the application for a writ
of certiorari from In re: Bankers Trust Co., 61 F.3d 465 (6th
Cir. 1996).
Inner City Press/Community on the Move v. Board of Governors, No. 96-4008 (2nd Cir., filed January 19, 1996). Petition for review of a Board order dated January 5, 1996,
approving the applications and notices by Chemical Banking Corporation to merge with The Chase Manhattan Corporation, both of New York, New York, and by Chemical
Bank to merge with The Chase Manhattan Bank, N.A., both
of New York, New York. Petitioners' motion for an emergency stay of the transaction was denied following oral
argument on March 26, 1996.
Hotchkiss v. Board of Governors, No. 3:96CV7033 (N.D.
Ohio, filed January 19, 1996). Appeal of order of bankruptcy court granting Board's motion for summary judgment in adversary proceeding challenging dischargeability
of Board consent order. The Board's brief is due April 1,
1996.
Menick v. Greenspan, No. 95-CV-01916 (D. D.C., filed October 10, 1995). Complaint alleging sex, age, and handicap
discrimination in employment.
Kuntz v. Board of Governors, No. 95-1495 (D.C. Cir., filed
September 21, 1995). Petition for review of Board order
dated August 23, 1995, approving the applications of The
Fifth Third Bank, Cincinnati, Ohio, to acquire certain assets
and assume certain liabilities of 12 branches of PNC Bank,
Ohio, N.A., Cincinnati, Ohio, and to establish certain
branches. The Board's motion to dismiss was filed on
October 26, 1995.
Lee v. Board of Governors, No. 95—4134 (2nd Cir., filed
August 22, 1995). Petition for review of Board orders dated
July 24, 1995, approving certain steps of a corporate reorganization of U.S. Trust Corporation, New York, New York,
and the acquisition of U.S. Trust by Chase Manhattan
Corporation, New York, New York. On September 12,
1995, the court denied petitioners' motion for an emergency
stay of the Board's orders.
Beckman v. Greenspan, No. 95-35473 (9th Cir., filed May 4,
1995). Appeal of dismissal of action against Board and
others seeking damages for alleged violations of constitutional and common law rights. The appellants' brief was
filed on June 23, 1995; the Board's brief was filed on
July 12, 1995.
Board of Governors v. Scott, Misc. No. 95-127 (LFO/PJA)
(D. D.C., filed April 14, 1995). Application to enforce an
administrative investigatory subpoena for documents and
testimony. On August 3, 1995, the magistrate judge issued
an order granting in part and denying in part the Board's
application. On September 18, 1995, the intervenor moved
for reconsideration of a portion of the magistrate's ruling.
Money Station, Inc. v. Board of Governors, No. 95-1182
(D.C. Cir., filed March 30, 1995). Petition for review of a
Board order dated March 1, 1995, approving notices by
Bank One Corporation, Columbus, Ohio; CoreStates Financial Corp., Philadelphia, Pennsylvania; PNC Bank Corp.,
Pittsburgh, Pennsylvania; and KeyCorp, Cleveland, Ohio,
to acquire certain data processing assets of National City
Corporation, Cleveland, Ohio, through a joint venture subsidiary. Oral argument was heard on February 2, 1996.
Jones v. Board of Governors, No. 95-1142 (D.C. Cir., filed
March 3, 1995). Petition for review of a Board order dated
February 2, 1995, approving the applications by First Commerce Corporation, New Orleans, Louisiana, to merge with
City Bancorp, Inc., New Iberia, Louisiana, and First Bankshares, Inc., Slidell, Louisiana. Oral argument was heard on
February 27, 1996. On March 26, 1996, the court denied the
petition for review.
In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., filed
January 6, 1995). Action to enforce subpoena seeking predecisional supervisory documents sought in connection with
an action by Bank of New England Corporation's trustee in
bankruptcy against the Federal Deposit Insurance Corporation. The Board filed its opposition on January 20, 1995.
Oral argument on the motion was held July 14, 1995.
Board of Governors v. Pharaon, No. 91-CIV-6250 (S.D. New
York, filed September 17, 1991). Action to freeze assets of
individual pending administrative adjudication of civil
money penalty assessment by the Board. On September 17,
1991, the court issued an order temporarily restraining the
transfer or disposition of the individual's assets.
Legal Developments
FINAL ENFORCEMENT
OF GOVERNORS
ORDERS ISSUED BY THE BOARD
Banque Worms, S.A.
Paris, France
The Federal Reserve Board announced on March 21, 1996,
the issuance of an Order of Assessment of a Civil Money
Penalty against Banque Worms, S.A., Paris, France, and
Banque Worms Capital Corporation, New York, New
York, and the execution of a Written Agreement by and
among Banque Worms, Banque Worms Capital Corporation, and the Federal Reserve Bank of New York.
The Daiwa Bank, Limited
Osaka, Japan
The Federal Reserve Board announced on March 22, 1996,
the issuance of an Order against The Daiwa Bank, Limited,
Osaka, Japan.
467
Swiss Bank Corporation
Basle, Switzerland
The Federal Reserve Board announced on March 6, 1996,
the issuance of an Order of Assessment of a Civil Money
Penalty against Swiss Bank Corporation, Basle, Switzerland.
WRITTEN AGREEMENTS APPROVED
RESERVE
BY FEDERAL
BANKS
Northern Bancorp, Inc.
Woburn, Massachusetts
The Federal Reserve Board announced on March 8, 1996,
the execution of a Written Agreement by and among the
Federal Reserve Bank of Boston; the Office of the Commissioner of Banks of the Commonwealth of Massachusetts;
Northern Bancorp, Inc., Woburn, Massachusetts ("Northern"); James J. Mawn, President and director of Northern;
and Robert L. McCrensky, a director of Northern.
469
Directors of
Federal Reserve Banks and Branches
Regional decentralization and a combination of governmental and private characteristics are important hallmarks
of the uniqueness of the Federal Reserve System. Under
the Federal Reserve Act, decentralization was achieved by
division of the country into twelve regions called Federal
Reserve Districts, and the establishment in each District of
a separately incorporated Federal Reserve Bank with its
own board of directors. The blending of governmental and
private characteristics is provided through ownership of the
stock of the Reserve Bank by member banks in its District,
which also elect the majority of the board of directors, and
by the general supervision of the Reserve Banks by the
Board of Governors, an agency of the federal government.
The Board also appoints a minority of each board of
directors. Thus, there are essential elements of regional
participation and counsel in the conduct of the System's
affairs for which the Federal Reserve relies importantly on
the contributions of the directors of the Federal Reserve
Banks and Branches.
The following list of directors of Federal Reserve Banks
and Branches shows for each director the class of directorship, the principal business affiliation, and the date the
current term expires. Each Federal Reserve Bank has nine
members on its board of directors: The member banks elect
the three Class A and three Class B directors, and the
Board of Governors appoints the three directors in Class C.
DISTRICT
Directors are chosen without discrimination as to race,
creed, color, sex, or national origin.
Class A directors of each Reserve Bank represent the
stockholding member banks of the Federal Reserve District. Class B and Class C directors represent the public and
are chosen with due, but not exclusive, consideration to the
interests of agriculture, commerce, industry, services, labor,
and consumers; they may not be officers, directors, or
employees of any bank. In addition, Class C directors may
not be stockholders of any bank. The Board of Governors
designates annually one Class C director as chairman of
the board of directors of each District Bank and designates
another Class C director as deputy chairman.
Each of the twenty-five Branches of the Federal Reserve
Banks has a board of either seven or five directors, a
majority of whom are appointed by the parent Federal
Reserve Bank; the others are appointed by the Board of
Governors. One of the Board's appointees is designated
annually as chairman of the board of that Branch in a
manner prescribed by the parent Federal Reserve Bank.
The names of the chairman and deputy chairman of the
board of directors of each Reserve Bank and of the chairman of each Branch are published monthly in the Federal
Reserve Bulletin.1
1. The current list appears on page A86 of this Bulletin.
Term expires
December 31
1—BOSTON
Class A
G. Kenneth Perine
Jane C. Walsh
Marshall N. Carter
President and Chief Executive Officer, National Bank of Middlebury,
Middlebury, Vermont
President, Northmark Bank, North Andover, Massachusetts
Chairman and Chief Executive Officer, State Street Bank and Trust
Company, Boston, Massachusetts
1996
Chairman and Chief Executive Officer, John Hancock Mutual Life
Insurance Company, Boston, Massachusetts
President and Chief Executive Officer, UNC Ventures, Inc., Boston,
Massachusetts
Adjunct Lecturer, John F. Kennedy School of Government, Harvard
University, Cambridge, Massachusetts
1996
1997
1998
Class B
Stephen L. Brown
Edward Dugger III
Robert R. Glauber
1997
1998
Class C
John E. Flynn
Jerome H. Grossman
William C. Brainard
Executive Director, The Quality Connection, East Dennis, Massachusetts
Health Quality, Inc., Boston, Massachusetts
Chairman, Department of Economics, Yale University, New Haven,
Connecticut
1996
1997
1998
470
Federal Reserve Bulletin • May 1996
DISTRICT 2—NEW
Term expires
December 31
YORK
Class A
J. William Johnson
J. Carter Bacot
Robert G. Wilmers
Chairman and Chief Executive Officer, The First National Bank of Long
Island, Glen Head, New York
Chairman and Chief Executive Officer, The Bank of New York, New York,
New York
Chairman, President, and Chief Executive Officer, Manufacturers and
Traders Trust Company, Buffalo, New York
1996
1997
1998
Class B
Sandra Feldman
Eugene R. McGrath
William C. Steere, Jr.
President, United Federation of Teachers, New York, New York
Chief Executive Officer, Consolidated Edison Company of New York, Inc.,
New York, New York
Chairman and Chief Executive Officer, Pfizer Inc., New York, New York
1996
1997
Chairman, AEA Investors Inc., New York, New York
Vice Chairman, President, and Chief Operating Officer, Teachers Insurance
and Annuity Association-College Retirement Equities Fund, New York,
New York
Chairman, The Blackstone Group, New York, New York
1996
1997
1998
Class C
John C. Whitehead
Thomas W. Jones
Peter G. Peterson
1998
BUFFALO BRANCH
Appointed by the Federal Reserve Bank
Louise C. Woerner
William E. Swan
Mark W. Adams
George W. Hamlin IV
Chairman and Chief Executive Officer, HCR, Rochester, New York
President and Chief Executive Officer, Lockport Savings Bank, Lockport,
New York
Owner and Operator, Adams Poultry Farm, Naples, New York
President and Chief Executive Officer, The Canandaigua National Bank
and Trust Company, Canandaigua, New York
1996
1997
1997
1998
Appointed by the Board of Governors
Joseph J. Castiglia
Louis J. Thomas
Bal Dixit
DISTRICT
Former President and Chief Executive Officer, Pratt & Lambert United,
Inc., Buffalo, New York
Director, United Steelworkers of America, Buffalo, New York
President and Chief Executive Officer, Newtex Industries, Inc., Victor,
New York
1996
1997
1998
3—PHILADELPHIA
Class A
Terry K. Dunkle
Dennis W. DiLazzero
Albert B. Murry
Chairman, United States National Bank, Johnstown, Pennsylvania
President and Chief Executive Officer, Minotola National Bank, Vineland,
New Jersey
President and Chief Executive Officer, Lebanon Valley National Bank,
Lebanon, Pennsylvania
1996
1997
President and Chief Executive Officer, Jackson-Cross Company,
Philadelphia, Pennsylvania
President and Chief Executive Officer, Burris Foods, Inc., Milford,
Delaware
Chairman, President, and Chief Executive Officer, Delmarva Power and
Light Company, Wilmington, Delaware
1996
1998
Class B
J. Richard Jones
Robert D. Burris
Howard E. Cosgrove
1997
1998
Directors of Federal Reserve Banks and Branches
DISTRICT
3—PHILADELPHIA—Continued
471
Term expires
December 31
Class C
Joan Carter
Donald J. Kennedy
Charisse R. Lillie
DISTRICT
President and Chief Operating Officer, UM Holdings Ltd., Haddonfield,
New Jersey
Business Manager, International Brotherhood of Electrical Workers, Local
Union No. 269, Trenton, New Jersey
Partner, Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania
1996
Chairman, President, and Chief Executive Officer, The Apple Creek
Banking Company, Apple Creek, Ohio
President and Chief Executive Officer, Southwest National Corporation,
Greensburg, Pennsylvania
Chairman and Chief Executive Officer, National City Corporation,
Cleveland, Ohio
1996
1997
1998
4—CLEVELAND
Class A
Alfred C. Leist
David S. Dahlmann
David A. Daberko
1997
1998
Class B
Thomas M. Nies
Michele Tolela Myers
I.N. Rendall Harper, Jr.
President, Cincom Systems, Inc., Cincinnati, Ohio
President, Denison University, Granville, Ohio
President and Chief Executive Officer, American Micrographics Company,
Inc., Monroeville, Pennsylvania
1996
1997
1998
Executive Secretary-Treasurer, Ohio State Building and Construction
Trades Council, Columbus, Ohio
President, GWH Holdings, Inc., Pittsburgh, Pennsylvania
Chief Executive, Old Mill Group, Hudson, Ohio
1996
Class C
Robert Y. Farrington
G. Watts Humphrey, Jr.
A. William Reynolds
CINCINNATI
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Judith G. Clabes
Phillip R. Cox
Jerry A. Grundhofer
Jean R. Hale
Director, Special Projects, Scripps Howard, Cincinnati, Ohio
President, Cox Financial Corporation, Cincinnati, Ohio
Chairman, President, and Chief Executive Officer, Star Banc Corporation,
Cincinnati, Ohio
President and Chief Executive Officer, Pikeville National Bank & Trust,
Pikeville, Kentucky
1996
1996
1997
1998
Appointed by the Board of Governors
John N. Taylor, Jr.
C. Wayne Shumate
Thomas Revely III
PITTSBURGH
Chairman and Chief Executive Officer, Kurz-Kasch, Inc., Dayton, Ohio
Chairman and Chief Executive Officer, Kentucky Textiles, Inc., Paris,
Kentucky
President and Chief Executive Officer, Cincinnati Bell Supply Co.,
Cincinnati, Ohio
1996
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Randall L.C. Russell
Wesley W. von Schack
Thomas J. O'Shane
Edward V. Randall, Jr.
President and Chief Executive Officer, Ranbar Technology, Inc., Glenshaw,
Pennsylvania
Chairman, President, and Chief Executive Officer, DQE, Pittsburgh,
Pennsylvania
President and Chief Executive Officer, First Western Bancorp, Inc.,
New Castle, Pennsylvania
President and CEO/Pittsburgh, PNC Bank, N.A., Pittsburgh, Pennsylvania
1996
1996
1997
1998
472
Federal Reserve Bulletin • May 1996
DISTRICT
4—CLEVELAND—Continued
PITTSBURGH
Term expires
December 31
BRANCH—Continued
Appointed by the Board of Governors
Sandra L. Phillips
John T. Ryan III
Gretchen R. Haggerty
DISTRICT
Executive Director, Pittsburgh Partnership for Neighborhood Development,
Pittsburgh, Pennsylvania
Chairman, President, and Chief Executive Officer, Mine Safety Appliances
Company, Pittsburgh, Pennsylvania
Vice President and Treasurer, USX Corporation, Pittsburgh, Pennsylvania
1996
Chairman and Chief Executive Officer, Signet Banking Corporation,
Richmond, Virginia
President and Chief Executive Officer, Horizon Bancorp, Inc., Greenbrier
Valley National Bank, Lewisburg, West Virginia
Chairman and Chief Executive Officer, The National Capital Bank of
Washington, Washington, D.C.
1996
Chairman, The North Carolina Enterprise Corporation, Raleigh,
North Carolina
Senior Vice President (Retired), ITT/Carbon Industries, Inc., Charleston,
West Virginia
President and Owner, The Ruppert Companies, Ashton, Maryland
1996
Executive Director, Consumer Federation of America, Washington, D.C.
President, Financial & Management Consulting, Inc., McLean, Virginia
Chairman, Lowe's Companies, Inc., Winston-Salem, North Carolina
1996
1997
1998
1997
1998
5—RICHMOND
Class A
Robert M. Freeman
Philip L. McLaughlin
George A. Didden III
1997
1998
Class B
Paul A. DelaCourt
L. Newton Thomas, Jr.
Craig A. Ruppert
1997
1998
Class C
Stephen Brobeck
Claudine B. Malone
Robert L. Strickland
BALTIMORE
BRANCH
Appointed by the Federal Reserve Bank
Morton I. Rapoport, M.D.
Thomas J. Hughes
F. Levi Ruark
Jeremiah E. Casey
President and Chief Executive Officer, University of Maryland Medical
System, Baltimore, Maryland
President and Chief Executive Officer, Navy Federal Credit Union, Vienna,
Virginia
Chairman, President, and Chief Executive Officer, The National Bank of
Cambridge, Cambridge, Maryland
Chairman, First Maryland Bancorp, Baltimore, Maryland
1996
1997
1997
1998
Appointed by the Board of Governors
Michael R. Watson
Rebecca Hahn Windsor
Daniel R. Baker
CHARLOTTE
President, Association of Maryland Pilots, Baltimore, Maryland
Chairman and Chief Executive Officer, Hahn Transportation, Inc.,
New Market, Maryland
President and Chief Executive Officer, Tate Access Floors, Inc., Jessup,
Maryland
1996
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Jim M. Cherry, Jr.
Dorothy H. Aranda
J. Walter McDowell
William G. Stevens
President and Chief Executive Officer, Williamsburg First National Bank,
Kingstree, South Carolina
President, Dohara Associates, Inc., Hilton Head Island, South Carolina
President and Chief Executive Officer, Wachovia Bank of North Carolina,
N.A., Winston-Salem, North Carolina
President and Chief Executive Officer, Greenwood Bank & Trust,
Greenwood, South Carolina
1996
1997
1997
1998
Directors of Federal Reserve Banks and Branches
473
Term expires
DISTRICT 5—RICHMOND—Continued
CHARLOTTE
December 31
BRANCH—Continued
Appointed by the Board of Governors
Dennis D. Lowery
Joan H. Zimmerman
James O. Roberson
DISTRICT
Chief Executive Officer and Chairman, Continental Ltd., Charlotte,
North Carolina
President, Southern Shows, Inc., Charlotte, North Carolina
President, Research Triangle Foundation of North Carolina, Research
Triangle Park, North Carolina
1996
1997
1998
6—ATLANTA
Class A
James B. Williams
D. Paul Jones, Jr.
Waymon L. Hickman
Chairman and Chief Executive Officer, SunTrust Banks, Inc., Atlanta,
Georgia
Chairman and Chief Executive Officer, Compass Bancshares, Inc.,
Birmingham, Alabama
Chairman and Chief Executive Officer, First Farmers and Merchants
National Bank, Columbia, Tennessee
1996
1997
1998
Class B
Andre M. Rubenstein
Maria Camila Leiva
Larry W. Kinderman
Chairman and Chief Executive Officer, Rubenstein Brothers, Inc.,
New Orleans, Louisiana
Executive Vice President, Miami Free Zone Corporation, Miami, Florida
President and Chief Executive Officer, Stockham Valves and Fittings, Inc.,
Birmingham, Alabama
1996
1997
1998
Class C
Daniel E. Sweat, Jr.
Hugh M. Brown
David R. Jones
Program Director, The America Project, Atlanta, Georgia
President and Chief Executive Officer, BAMSI, Inc., Titusville, Florida
President and Chief Executive Officer, Atlanta Gas Light Company,
Atlanta, Georgia
1996
1997
1998
BIRMINGHAM BRANCH
Appointed by the Federal Reserve Bank
Julian W. Banton
Marlin D. Moore, Jr.
Columbus Sanders
J. Stephen Nelson
Chairman, President, and Chief Executive Officer, SouthTrust Bank of
Alabama, N.A., Birmingham, Alabama
Chairman, Pritchett-Moore, Inc., Tuscaloosa, Alabama
President, Consolidated Industries, Inc., Huntsville, Alabama
Chairman and Chief Executive Officer, First National Bank of Brewton,
Brewton, Alabama
1996
1997
1997
1998
Appointed by the Board of Governors
Donald E. Boomershine
D. Bruce Carr
Patricia B. Compton
President, The Better Business Bureau of Central Alabama, Inc. and the
Counties of the Wiregrass, Birmingham, Alabama
International Representative, Laborers' International Union of North
America, Gadsden, Alabama
President, Patco, Inc., Georgiana, Alabama
1996
1997
1998
474
Federal Reserve Bulletin • May 1996
Term
DISTRICT 6—ATLANTA—Continued
expires
December 31
JACKSONVILLE BRANCH
Appointed by the Federal Reserve Bank
William G. Smith, Jr.
Terry R. West
Arnold A. Heggestad
Royce B. Walden
President and Chief Executive Officer, Capital City Bank Group,
Tallahassee, Florida
Chief Executive Officer, Jax Navy Federal Credit Union, Jacksonville,
Florida
Chester Holloway Professor of Entrepreneurship, University of Florida,
Gainesville, Florida
Vice President, Ward Bradford & Company, Orlando, Florida
1996
1997
1997
1998
Appointed by the Board of Governors
Joan Dial Ruffier
Patrick C. Kelly
Judy Jones
General Partner, Sunshine Cafes, Orlando, Florida
Chairman and Chief Executive Officer, Physician Sales & Service, Inc.,
Jacksonville, Florida
Executive Director, Florida Black Business Investment Board, Tallahassee,
Florida
1996
1997
1998
MIAMI BRANCH
Appointed by the Federal Reserve Bank
Pat L. Tornillo, Jr.
Steven C. Shimp
Carlos A. Migoya
E. Anthony Newton
Executive Vice President, United Teachers of Dade, Miami, Florida
President, O-A-K/Florida, Inc., Fort Myers, Florida
South Florida Regional President, First Union National Bank of Florida,
Miami, Florida
President and Chief Executive Officer, Island National Bank and Trust
Company, Palm Beach, Florida
1996
1996
1997
1998
Appointed by the Board of Governors
Michael T. Wilson
Kaaren Johnson-Street
R. Kirk Landon
President, Vinegar Bend Farms, Inc., Belle Glade, Florida
Vice President, Diversity Business Enterprise, Burger King Corporation,
Miami, Florida
Chairman, American Bankers Insurance Group, Miami, Florida
1996
1997
1998
NASHVILLE BRANCH
Appointed by the Federal Reserve Bank
Williams E. Arant, Jr.
Jack J. Vaughn
John E. Seward, Jr.
Dale W. Polley
Chairman, First Knoxville Bank, Knoxville, Tennessee
President, Hospitality & Attractions Group, Gaylord Entertainment
Company, Nashville, Tennessee
President and Chief Executive Officer, Paty Lumber Company, Inc.,
Piney Flats, Tennessee
President, First American National Bank, Nashville, Tennessee
1996
1997
1997
1998
Appointed by the Board of Governors
Paula Lovell
James E. Dalton, Jr.
Frances F. Marcum
President, Lovell Communications, Inc., Nashville, Tennessee
President and Chief Executive Officer, Quorum Health Group, Inc.,
Brentwood, Tennessee
Chairman and Chief Executive Officer, Micro Craft, Inc., Tullahoma,
Tennessee
1996
1997
1998
Directors
of Federal Reserve Banks and Branches
475
Term expires
DISTRICT 6—ATLANTA—Continued
DECEMBER 31
NEW ORLEANS BRANCH
Appointed by the Federal Reserve Bank
Howard C. Gaines
Angus R. Cooper II
Kay L. Nelson
Howell N. Gage
Chairman and Chief Executive Officer, First National Bank of Commerce,
New Orleans, Louisiana
Chairman and Chief Executive Officer, Cooper/T. Smith Corporation,
Mobile, Alabama
President, Nelson Capital Corporation, New Orleans, Louisiana
Chairman and Chief Executive Officer, Merchants Bank, Vicksburg,
Mississippi
1996
1997
1997
1998
Appointed by the Board of Governors
Victor Bussie
Jo Ann Slaydon
Lucimarian Roberts
DISTRICT
President, Louisiana AFL-CIO, Baton Rouge, Louisiana
President, Slaydon Consultants and Insight Productions and Advertising,
Baton Rouge, Louisiana
President, Mississippi Coast Coliseum Commission, Biloxi, Mississippi
1996
1997
Chairman and Chief Executive Officer (Retired), Northern Trust
Corporation and The Northern Trust Company, Chicago, Illinois
Chairman, President, and Chief Executive Officer, First Merchants
Corporation, Muncie, Indiana
Chairman, President, and Chief Executive Officer, Grundy National Bank,
Grundy Center, Iowa
1996
1998
7—CHICAGO
Class A
David W. Fox
Stefan S. Anderson
Arnold C. Schultz
1997
1998
Class B
A. Charlene Sullivan
Thomas C. DonDonald J. Schneider
Associate Professor of Management, Krannert Graduate School of
Management, Krannert Center, Purdue University, West Lafayette,
Indiana
President and Chief Executive Officer, Dorr's Pine Grove Farm Co.,
Marcus, Iowa
President, Schneider National, Inc., Green Bay, Wisconsin
1996
Member, Illinois State Labor Relations Board, Chicago, Illinois
Managing Partner, Washington, Pittman & McKeever, Chicago, Illinois
Chairman and Chief Executive Officer, Sears, Roebuck & Co.,
Hoffman Estates, Illinois
1996
1997
1998
1997
1998
Class C
Robert M. Healey
Lester H. McKeever, Jr.
Arthur C. Martinez
DETROIT BRANCH
Appointed by the Federal Reserve Bank
William E. Odom
Charles E. Allen
Charles R. Weeks
Richard M. Bell
Chairman and Chief Executive Officer, Ford Motor Credit Company,
Dearborn, Michigan
President and Chief Executive Officer, Graimark Realty Advisors, Inc.,
Detroit, Michigan
Chairman and Chief Executive Officer, Citizens Banking Corporation,
Flint, Michigan
President and Chief Executive Officer, The First National Bank of Three
Rivers, Three Rivers, Michigan
1996
1996
1997
1998
476
Federal Reserve Bulletin • May 1996
Term expires
DISTRICT 7—CHICAGO—Continued
December 31
DETROIT BRANCH—Continued
Appointed by the Board of Governors
Florine Mark
President and Chief Executive Officer, The WW Group, Inc., Farmington
Hills, Michigan
President and Chief Executive Officer, University of Michigan Hospitals,
Ann Arbor, Michigan
Chairman and Chief Executive Officer, R.L. Polk & Co., Detroit, Michigan
John D. Forsyth
Stephen R. Polk
DISTRICT 8—ST.
1996
1997
1998
LOUIS
Class A
W.D. Glover
Michael A. Alexander
Douglas M. Lester
Chairman and Chief Executive Officer, First National Bank of Eastern
Arkansas, Forrest City, Arkansas
Chairman and President, The First National Bank of Mount Vernon,
Mount Vernon, Illinois
Chairman and Chief Executive Officer, Trans Financial Bank, N.A.,
Bowling Green, Kentucky
1996
1997
1998
Class B
Warren R. Lee
Sandra B. Sanderson
Richard E. Bell
President, United Benefit Services, Inc., Louisville, Kentucky
President and Chief Executive Officer, Sanderson Plumbing Products, Inc.,
Columbus, Mississippi
President and Chief Executive Officer, Riceland Foods, Inc., Stuttgart,
Arkansas
1996
1997
Partner, Peoples & Hale, St. Louis, Missouri
President and Chief Executive Officer, Systems Service Enterprises, Inc.,
St. Louis, Missouri
Chairman, McDonnell Douglas Corporation, St. Louis, Missouri
1996
1997
1998
Class C
Veo Peoples, Jr.
Susan S. Elliott
John F. McDonnell
1998
LITTLE ROCK BRANCH
Appointed by the Federal Reserve Bank
Lee Frazier
James V. Kelley
Lunsford W. Bridges
Mark A. Shelton III
Vice President, St. Vincent Infirmary, Little Rock, Arkansas
Chairman, President, and Chief Executive Officer, First United Bancshares,
Inc., El Dorado, Arkansas
President and Chief Executive Officer, Metropolitan National Bank, Little
Rock, Arkansas
President, M.A. Shelton Farming Company, Altheimer, Arkansas
1996
1996
1997
1998
Appointed by the Board of Governors
Janet M. Jones
Robert D. Nabholz, Jr.
Betta M. Carney
President, The Janet Jones Company, Little Rock, Arkansas
Chief Executive Officer, Nabholz Construction Corporation, Conway,
Arkansas
Chief Executive Officer and Chairman, World Wide Travel Service, Inc.,
Little Rock, Arkansas
1996
1997
1998
Directors of Federal Reserve Banks and Branches
DISTRICT 8—ST.
LOUIS—Continued
97
Term expires
December 31
LOUISVILLE BRANCH
Appointed by the Federal Reserve Bank
Charles D. Storms
Robert M. Hall
Thomas E. Spragens, Jr.
Malcolm B. Chancey, Jr.
President and Chief Executive Officer, Red Spot Paint and Varnish
Company, Inc., Evansville, Indiana
Owner, East Fork Growers Farm, Seymour, Indiana
President, Farmers National Bank, Lebanon, Kentucky
Chairman and Chief Executive Officer, Bank One, Kentucky, N.A.,
Louisville, Kentucky
1996
1996
1997
1998
Appointed by the Board of Governors
John A. Williams
Debbie Scoppechio
Roger Reynolds
Chairman and Chief Executive Officer, Computer Services, Inc., Paducah,
Kentucky
Chairman, President, and Chief Executive Officer, Creative Alliance, Inc.,
Louisville, Kentucky
President and Chief Executive Officer, Material Resource Planners, Inc.
and Interlink Inc., Louisville, Kentucky
1996
1997
1998
MEMPHIS BRANCH
Appointed by the Federal Reserve Bank
Katie S. Winchester
Benjamin W. Rawlins, Jr.
Lewis F. Mallory, Jr.
Anthony M. Rampley
President, First Citizens National Bank, Dyersburg, Tennessee
Chairman and Chief Executive Officer, Union Planters Corporation,
Memphis, Tennessee
Chairman, President, and Chief Executive Officer, NBC Capital
Corporation, Starkville, Mississippi
President and Chief Executive Officer, Arkansas Glass Container
Corporation, Jonesboro, Arkansas
1996
1996
1997
1998
Appointed by the Board of Governors
Woods E. Eastland
Carol G. Crawley
John V. Myers
President and Chief Executive Officer, Staple Cotton Cooperative
Association, Greenwood, Mississippi
President, Mid-South Minority Business Council, Memphis, Tennessee
President, Better Business Bureau, Memphis, Tennessee
1996
President, First National Bank, Bowbells, North Dakota
President, The Northwestern Bank of Chippewa Falls, Chippewa Falls,
Wisconsin
1996
1997
1997
1998
DISTRICT 9—MINNEAPOLIS
Class A
Jerry B. Melby
William S. Pickerign
Vacancy
1998
Class B
Clarence D. Mortenson
Kathryn L. Ogren
Dennis W. Johnson
President, M/C Professional Associates Inc., Pierre, South Dakota
Owner, Bitterroot Motors, Missoula, Montana
President, TMI Systems Design Corporation, Dickinson, North Dakota
1996
1997
1998
Chairman, Graco, Inc., Minneapolis, Minnesota
Professor, Consumption Economics, and Director, Retail Food Industry
Center, University of Minnesota, St. Paul, Minnesota
Chairman, President, and Chief Executive Officer, Northern States Power
Company, Minneapolis, Minnesota
1996
1997
Class C
David A. Koch
Jean D. Kinsey
James J. Howard
1998
478
Federal Reserve Bulletin • May 1996
Term expires
DISTRICT 9—MINNEAPOLIS—Continued
DECEMBER 31
HELENA BRANCH
Appointed by the Federal Reserve Bank
Donald E. Olsson, Jr.
Sandra M. Stash
President, Ronan State Bank, Ronan, Montana
Manager, Montana Facilities, Atlantic Richfield Company (ARCO),
Anaconda, Montana
President and Chief Executive Officer, The First State Bank of Malta,
Malta, Montana
Ronald D. Scott
1996
1996
1997
Appointed by the Board of Governors
Lane W. Basso
Matthew J. Quinn
DISTRICT
10—KANSAS
President, Deaconess Medical Center, Billings, Montana
President, Carroll College, Helena, Montana
1996
1997
Chairman and Chief Executive Officer, Union Colony Bank, Greeley,
Colorado
President, Farmers State Bank & Trust Co., Superior, Nebraska
President, Chief Executive Officer, and Director, City National Bank,
Greeley, Nebraska
1996
Managing Partner, Davison & Sons Cattle Company, Arnett, Oklahoma
Area Managing Partner, Ernst & Young LLP, Denver, Colorado
M & T Trust, Albuquerque, New Mexico
1996
1997
1998
Executive Director, Kansas City Neighborhood Alliance, Kansas City,
Missouri
Chairman, President, and Chief Executive Officer, Kansas City Power &
Light Company, Kansas City, Missouri
Chairman and Chief Executive Officer, Godfather's Pizza, Inc., Omaha,
Nebraska
1996
CITY
Class A
Lawrence W. Menefee
Samuel P. Baird
William L. McQuillan
1997
1998
Class B
Charles W. Nichols
Jo Marie Dancik
Frank A. Potenziani
Class C
Colleen D. Hernandez
A. Drue Jennings
Herman Cain
DENVER
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Peter R. Decker
Richard I. Ledbetter
Clifford E. Kirk
Albert C. Yates
President, Peter R. Decker & Associates, Denver, Colorado
President and Chief Executive Officer, First National Bank of Farmington,
Farmington, New Mexico
President and Chief Executive Officer, First National Bank of Gillette,
Gillette, Wyoming
1996
1997
President, Colorado State University, Ft. Collins, Colorado
1998
1997
Appointed by the Board of Governors
Teresa N. McBride
Donald E. Gallegos
Peter I. Wold
President and Chief Executive Officer, McBride and Associates, Inc.,
Albuquerque, New Mexico
President, King Soopers, Denver, Colorado
Partner, Wold Oil & Gas Company, Casper, Wyoming
1996
1997
1998
Directors of Federal Reserve Banks and Branches
479
Term expires
DISTRICT 10—KANSAS CITY—Continued
OKLAHOMA
CITY
December 31
BRANCH
Appointed by the Federal Reserve Bank
William H. Braum
Michael S. Samis
Betty Bryant Shaull
Dennis M. Mitchell
President, Braum Ice Cream Co., Oklahoma City, Oklahoma
President and Chief Executive Officer, Macklanburg-Duncan Co.,
Oklahoma City, Oklahoma
President-Elect and Director, Bank of Cushing and Trust Company,
Cushing, Oklahoma
President, Citizens Bank of Ardmore, Ardmore, Oklahoma
1996
1997
1998
1998
Appointed by the Board of Governors
Hans Helmerich
Victor R. Schock
Barry L. Eller
President and Chief Executive Officer, Helmerich & Payne, Inc., Tulsa,
Oklahoma
President and Chief Executive Officer, Credit Counseling Centers, Tulsa,
Oklahoma
Senior Vice President and General Manager, MerCruiser, Stillwater,
Oklahoma
1996
1997
1998
OMAHA BRANCH
Appointed by the Federal Reserve Bank
Bruce R. Lauritzen
Donald A. Leu
Thomas H. Olson
Robert L. Peterson
President, First National Bank of Omaha, Omaha, Nebraska
President and Chief Executive Officer, Consumer Credit Counseling
Service, Omaha, Nebraska
Chairman, First National Bank, Sidney, Nebraska
Chairman, President, and Chief Executive Officer, IBP, Inc., Dakota City,
Nebraska
1996
1997
1997
1998
Appointed by the Board of Governors
LeRoy W. Thom
Arthur L. Shoener
Gladys Styles Johnston
President, T-L Irrigation Company, Hastings, Nebraska
Executive Vice President-Operations, Union Pacific Railroad, Omaha,
Nebraska
Chancellor, University of Nebraska at Kearney, Kearney, Nebraska
1996
1997
President and Chief Executive Officer, Texas Independent Bank, Dallas,
Texas
President and Chief Executive Officer, Security Bank, Ralls, Texas
President and Chief Executive Officer, The Security State Bank of Pecos,
Pecos, Texas
1996
1998
DISTRICT 11—DALLAS
Class A
Gayle M. Earls
Kirk A. McLaughlin
Dudley K. Montgomery
1997
1998
Class B
J.B. Cooper, Jr.
Vacancy
Milton Carroll
Farmer, Roscoe, Texas
Chairman and Chief Executive Officer, Instrument Products, Inc., Houston,
Texas
1996
1997
1998
Class C
James A. Martin
Cece Smith
Roger R. Hemminghaus
Second General Vice President, International Association of Bridge,
Structural, & Ornamental Iron Workers, Horseshoe Bay, Texas
General Partner, Phillips-Smith Specialty Retail Group, Dallas, Texas
Chairman, President, and Chief Executive Officer, Diamond Shamrock,
Inc., San Antonio, Texas
1996
1997
1998
480
Federal Reserve Bulletin • May 1996
Term expires
DISTRICT
11—DALLAS—Continued
EL PASO
BRANCH
December 31
Appointed by the Federal Reserve Bank
Ben H. Haines, Jr.
Lester L. Parker
1996
President and Chief Operating Officer, Bank of the West, El Paso, Texas
Veronica K. Callaghan
Hugo Bustamante, Jr.
President and Chief Executive Officer, First National Bank of Dona Ana
County, Las Cruces, New Mexico
Vice President and Principal, KASCO Ventures, Inc., El Paso, Texas
Owner and Chief Executive Officer, CarLube, Inc., ProntoLube, Inc.,
El Paso, Texas
1998
1996
1997
Appointed by the Board of Governors
Patricia Z. Holland-Branch
Alvin T. Johnson
Beauregard Brite White
HOUSTON
President and Director of Design, PZH Contract Design, Inc., El Paso,
Texas
President, Management Assistance Corporation of America, El Paso, Texas
Rancher, J.E. White, Jr. & Sons, Marfa, Texas
1996
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Judith B. Craven
Walter E. Johnson
Tieman H. Dippel, Jr.
J. Michael Solar
President, United Way of the Texas Gulf Coast, Houston, Texas
President and Chief Executive Officer, Southwest Bank of Texas, Houston,
Texas
Chairman and President, Brenham Bancshares, Inc., Brenham, Texas
Principal Attorney, Solar & Fernandes, L.L.P., Houston, Texas
1996
1996
1997
1998
Appointed by the Board of Governors
Robert C. McNair
Isaac H. Kempner III
Edward O. Gaylord
SAN ANTONIO
Chairman and Chief Executive Officer, Cogen Technologies, Inc., Houston,
Texas
Chairman, Imperial Holly Corporation, Sugar Land, Texas
Chairman, EOTT Energy Corp. and General Partner, EOTT Energy
Partners, L.P., Houston, Texas
1996
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Juliet V. Garcia
Douglas G. Macdonald
Calvin R. Weinheimer
Richard W. Evans, Jr.
President, The University of Texas at Brownsville, Brownsville, Texas
President, South Texas National Bank, Laredo, Texas
President and Chief Operating Officer, Kerrville Communications
Corporation, Kerrville, Texas
Chairman and Chief Executive Officer, Frost National Bank, San Antonio,
Texas
1996
1996
1997
1998
Appointed by the Board of Governors
Erich Wendl
H.B. Zachry, Jr.
Carol L. Thompson
Vice President, Webro Investment Corporation, Corpus Christi, Texas
Chairman and Chief Executive Officer, H.B. Zachry Company,
San Antonio, Texas
President, The Thompson Group, Austin, Texas
1996
1997
1998
Directors of Federal Reserve Banks and Branches
481
Term expires
DISTRICT
12—SAN
FRANCISCO
DECEMBER 31
Class A
Richard L. Mount
Gerry B. Cameron
Warren K.K. Luke
Chairman, President, and Chief Executive Officer, Saratoga Bancorp,
Saratoga, California
Chairman and Chief Executive Officer, U.S. Bancorp, Portland, Oregon
Vice Chairman, President, and Chief Executive Officer, Hawaii National
Bank, Honolulu, Hawaii
1996
1997
1998
Class B
Gary G. Michael
Krestine Corbin
Stanley T. Skinner
Chairman and Chief Executive Officer, Albertson's, Inc., Boise, Idaho
President and Chief Executive Officer, Sierra Machinery, Inc., Sparks,
Nevada
Chairman and Chief Executive Officer, Pacific Gas and Electric Co.,
San Francisco, California
1996
1997
Chairman and Chief Executive Officer (Retired), Kaiser Foundation Health
Plan, Inc. and Kaiser Foundation Hospitals, Oakland, California
Partner, Foster Pepper & Shefelman, Seattle, Washington
Executive Director, Anchorage Neighborhood Housing Services, Inc.,
Anchorage, Alaska
1996
1998
Class C
James A. Vohs
Judith M. Runstad
Cynthia A. Parker
Los
ANGELES
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Vacancy
William S. Randall
Antonia Hernandez
Stephen G. Carpenter
Scottsdale, Arizona
President and General Counsel, Mexican American Legal Defense and
Educational Fund, Los Angeles, California
Chairman and Chief Executive Officer, California United Bank, N.A.,
Encino, California
1996
1997
1997
1998
Appointed by the Board of Governors
Anita Landecker
David L. Moore
Anne L. Evans
PORTLAND
Western Regional Vice President, Local Initiatives Support Corporation,
Los Angeles, California
President, Western Growers Association, Irvine, California
Chairman, Evans Hotels, San Diego, California
1996
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Elizabeth K. Johnson
Cecil W. Drinkward
Thomas C. Young
John D. Eskildsen
President, TransWestern Aviation, Inc., Scappoose, Oregon
President and Chief Executive Officer, Hoffman Corporation, Portland,
Oregon
Chairman, President, and Chief Executive Officer, Northwest National
Bank, Vancouver, Washington
President and Chief Executive Officer, U.S. National Bank of Oregon,
Portland, Oregon
1996
1996
1997
1998
Appointed by the Board of Governors
Ross R. Runkel
Marvin R. O'Quinn
Carol A. Whipple
Professor of Law, Willamette University, Salem, Oregon
Chief Operating Officer, Providence Portland Medical Center, Portland,
Oregon
Proprietor, Rocking C Ranch, Elkton, Oregon
1996
1997
1998
482
Federal Reserve Bulletin • May 1996
Term expires
DISTRICT
SALT LAKE
12—SAN
CITY
FRANCISCO—Continued
DECEMBER 31
BRANCH
Appointed by the Federal Reserve Bank
Nancy Mortensen
R.D. Cash
J. Pat McMurray
Roy C. Nelson
Vice President-Marketing Services, ZCMI, Salt Lake City, Utah
Chairman, President, and Chief Executive Officer, Questar Corporation,
Salt Lake City, Utah
Chairman, President, and Chief Executive Officer, First Security Bank of
Idaho, Boise, Idaho
1996
1997
President, Bank of Utah, Ogden, Utah
1998
1998
Appointed by the Board of Governors
Constance G. Hogland
Gerald R. Sherratt
Richard E. Davis
SEATTLE
Executive Director, Boise Neighborhood Housing Services, Inc., Boise,
Idaho
President, Southern Utah University, Cedar City, Utah
President and Chief Executive Officer, Salt Lake Convention & Visitors
Bureau, Salt Lake City, Utah
1996
1997
1998
BRANCH
Appointed by the Federal Reserve Bank
Tomio Moriguchi
John V. Rindlaub
Thomas E. Cleveland
Constance L. Proctor
Chairman and Chief Executive Officer, Uwajimaya, Inc., Seattle,
Washington
Chairman and Chief Executive Officer, Seafirst Bank, Seattle, Washington
Chairman and Chief Executive Officer, Access Business Finance, Bellevue,
Washington
Partner, Alston, Courtnage, MacAulay & Proctor, Seattle, Washington
1996
1996
1997
1998
Appointed by the Board of Governors
George F. Russell, Jr.
William R. Wiley
Helen M. Rockey
Chairman, Frank Russell Company, Tacoma, Washington
Senior Vice President, Science & Technology Policy, Battelle Memorial
Institute, Richland, Washington
President and Chief Executive Officer, Brooks Sports, Inc., Bothell,
Washington
1996
1997
1998
1
Financial and Business Statistics
A3
GUIDE
TO TABULAR
DOMESTIC
FINANCIAL
STATISTICS
Money Stock and Bank Credit
A4
A5
A6
A7
Federal Finance
PRESENTATION
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—
Types and ownership
A31 U.S. government securities
dealers—Transactions
A32 U.S. government securities dealers—
Positions and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding
Securities Markets and Corporate Finance
Policy Instruments
A8 Federal Reserve Bank interest rates
A9 Reserve requirements of depository institutions
A10 Federal Reserve open market transactions
Federal Reserve Banks
A l l Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings
Monetary and Credit Aggregates
A13 Aggregate reserves of depository institutions
and monetary base
A14 Money stock, liquid assets, and debt measures
A16 Deposit interest rates and amounts outstanding—
commercial and BIF-insured banks
A17 Bank debits and deposit turnover
A34 New security issues—Tax-exempt state and local
governments and corporations
A35 Open-end investment companies—Net sales
and assets
A35 Corporate profits and their distribution
A36 Domestic finance companies—Assets and
liabilities, and consumer, real estate, and business
credit
Real Estate
A37 Mortgage markets
A38 Mortgage debt outstanding
Consumer Installment Credit
A39 Total outstanding
A39 Terms
Flow of Funds
Commercial Banking Institutions
A18 Assets and liabilities, Wednesday figures
Weekly Reporting Commercial Banks—
Assets and liabilities
A21 Large reporting banks
A23 Branches and agencies of foreign banks
A40
A42
A43
A44
Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
DOMESTIC
NONFINANCIAL
STATISTICS
Selected Measures
Financial Markets
A24 Commercial paper and bankers dollar
acceptances outstanding
A25 Prime rate charged by banks on short-term
business loans
A26 Interest rates—money and capital markets
All Stock market—Selected statistics
A45 Nonfinancial business activity—
Selected measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
2
Federal Reserve Bulletin • May 1996
DOMESTIC
NONFINANCIAL
STATISTICS-
CONTINUED
Selected Measures—Continued
A51 Gross domestic product and income
A52 Personal income and saving
INTERNATIONAL
STATISTICS
Reported by Nonbanking Business
Enterprises in the United States
A61 Liabilities to unaffiliated foreigners
A62 Claims on unaffiliated foreigners
Securities Holdings and Transactions
A63 Foreign transactions in securities
A64 Marketable U.S. Treasury bonds and
notes—Foreign transactions
Summary Statistics
A53
A54
A54
A54
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A55 Selected U.S. liabilities to foreign official
institutions
Interest and Exchange Rates
A65 Discount rates of foreign central banks
A65 Foreign short-term interest rates
A66 Foreign exchange rates
A 6 7 GUIDE
TO STATISTICAL
SPECIAL
SPECIAL
RELEASES
AND
TABLES
TABLES
Reported by Banks in the United States
A55
A56
A58
A59
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A59 Banks' own claims on unaffiliated foreigners
A60 Claims on foreign countries—
Combined domestic offices and foreign branches
A68 Terms of lending at commercial banks,
February 1996
A72 Assets and liabilities of U.S. branches and
agencies of foreign banks, December 31, 1995
A 7 6 INDEX TO STATISTICAL
TABLES
3
Guide to Tabular Presentation
SYMBOLS
c
e
n.a.
n.e.c.
P
r
*
0
ATS
BIF
CD
CMO
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
GENERAL
AND
ABBREVIATIONS
Corrected
Estimated
Not available
Not elsewhere classified
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
G-10
GNMA
GDP
HUD
IMF
10
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PO
REIT
REMIC
RP
RTC
SAIF
SCO
SDR
SIC
VA
Group of Ten
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Metropolitan statistical area
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Repurchase agreement
Resolution Trust Corporation
Savings Association Insurance Fund
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Department of Veterans Affairs
INFORMATION
In many of the tables, components do not sum to totals because of
rounding.
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed issues
of U.S. government agencies (the flow of funds figures also
include not fully guaranteed issues) as well as direct obligations of the Treasury. "State and local government" also includes municipalities, special districts, and other political
subdivisions.
A4
Domestic Financial Statistics • May 1996
1.10
RESERVES, M O N E Y STOCK, LIQUID ASSETS, A N D D E B T M E A S U R E S
Percent annual rate of change, seasonally adjusted1
1995r
1995
1996
Monetary or credit aggregate
Q3
Q4r
Oct.
Nov.
Dec.
Jan.r
Feb.
-7.5 r
—6.6r
— 8.2r
5.8r
-1.5 r
-2.5 r r
— 2.4
1.7
-6.9
-7.7
-6.4
2.7
-10.6
-13.5
-9.9
2.9
-10.7
-7.9
-9.8
1.3
.7
-6.6
-.5
5.0
-16.1
-21.0
-11.5
.4
-16.4
-2.7
-16.3
-4.2
-.1
1.0r
4.5r
6.r
5.4r
-.4
3.8r
6.3r
7.3r
7.0
-1.5
6.9r
8.0
9.1r
4.6
-5.1
3.9
4.3
5.8
4.5
-8.8
2.3
3.9
5.6
4.3
-3.0
3.6
2.6
1.1
6.2
-4.5
5.5
3.6
5.3
3.6
—6.2
4.9
7.5
4.8
2.2
-2.1
5.0
9.8
n.a.
n.a.
1.6r
19.9r
5.8r
16.9
10.9r
12.1
8.1
6.1
7.4
10.4
6.5
-1.2
9.9
-3.9
9.7
18.4
8.1
28.8
-12.7
24.5
11.8
-6.5
20.4
13.6
9.0
11.0
13.T
13.1
3.9
19.4
12.2
3.1
31.6
10.2
4.6
19.0
23.2
1.7
6.0
28.2
4.6
-6.7
16.6
-3.9
18.0
-20.1
19.7
22.6
-14.5
23.5
16.7
-7.3
4.3
13.7r
-2.8
4.7
8.0
.3
4.4
11.4
-6.3
6.1
4.8
-2.7
3.7
4.8
-3.0
-8.0
16.0
6.4
.7
3.2
Money market mutual funds
18 Retail
19 Institution-only
8.0r
17.6
14.2r
30.5
36.9r
27.6
16.5
9.2
12.5
10.3
13.5
2.1
13.0
12.9
9.0
17.5
15.6
70.0
Repurchase agreements and Eurodollars
20 Repurchase 10
agreements10
21 Eurodollars
32.4r
26.0
7.4r
18.6
—5.0r
9.4
-14.9
-6.3
-16.2
-10.2
-29.7
-28.4
-51.2
9.3
49.4
53.8
19.5
8.8
5.1
5.4
5.4
7.6r
4.6
4.7r
2.3
5.3
2.9
4.8
4.4
6.8
-.4
5.0
-3.3
4.2
Ql
1
2
3
4
Reserves of depository institutions2
Total
Required
Nonborrowed 3
Monetary base
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontransaction components
10 In M25
11 In M3 only6
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time7
Large time8'9
Thrift institutions
15 Savings, including MMDAs
16 Small time7
17 Large time8
12
13
14
Debt components4
22 Federal
23 Nonfederal
Q2
- 4 . rr
—4.4
-2.8 r
6.0
1. Unless otherwise noted, rates of change are calculated from average amounts outstanding during preceding month or quarter.
2. Figures incorporate adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements. (See also table 1.20.)
3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose
vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference
between current vault cash and the amount applied to satisfy current reserve requirements.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) 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 (money funds with minimum initial investments of less than
$50,000). 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 M1.
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2)
balances in institutional money funds (money funds with minimum initial investments of
$50,000 or more), (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
n.a.
n.a.
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.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury
securities, commercial paper, and bankers acceptances, net of money market fund holdings of
these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted
separately, and then adding this result to M3.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances, each seasonally adjusted separately.
6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees, each seasonally adjusted separately.
7. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All IRA and Keogh account balances at commercial banks and thrift institutions
are subtracted from small time deposits.
8. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
9. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the U.S. government, and foreign banks and official institutions.
10. Includes both overnight and term.
Money Stock and Bank Credit
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE BANK CREDIT1
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
Dec.
Jan.
Feb.
Jan. 17
Jan. 24
Jan. 31
Feb. 7
Feb. 14
Feb. 21
Feb. 28
420,757
416,469
408,619
416,530
412,457
409,555'
407,277
407,323
408,952
410,744
378,548
5,626
376,397
1,810
373,807
215
377,756
548
374,412
0
373,871
0
372,294
0
372,280
0
375,178
0
375,090
890
2,654
343
0
2,634
590
0
2,634
26
0
2,634
643
0
2,634
0
0
2,634
0
0
2,634
0
0
2,634
0
0
2,634
0
0
2,634
109
0
139
40
0
1,176
32,231
76
5
0
2,461
32,496
27
7
0
1,139
30,764
33
3
0
2,475
32,439
12
4
0
2,836'
32,558
10
5
0
653
32,382
28
6
0
817
31,498
7
8
0
628
31,767
8
8
0
1,382
29,742
69
8
0
1,834
30,110
11,050
10,168
23,969'
11,051
10,168
24,043r
11,053
10,168
24,104
11,050
10,168
24,039'
11,050
10,168
24,053'
11,052
10,168
24,067'
11,052
10,168
24,081
11,052
10,168
24,095
11,053
10,168
24,109
11,053
10,168
24,123
419,598'
271
417,900'
247
412,780
276
419,185'
225
415,719'
271
412,357'
271
411,927
273
412,404
274
413,270
279
413,351
279
6,762
204
5,487
366
12,847
20,410
6,298
191
5,997
333
12,741
18,024
4,953
220
6,005
386
12,600
16,724
5,548
174
5,428
287
12,940
18,000
7,218
174
6,421
310
12,877
14,738'
6,963
207
6,317
344
12,701
15,684'
5,493
204
6,842
408
12,040
15,392
5,204
177
5,835
375
12,659
15,710
5,137
220
5,784
393
12,779
16,421
3,883
279
5,592
376
12,856
19,472
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Acceptances
Loans to depository institutions
Adjustment credit
7
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and adjustments
20 Other
21 Other Federal Reserve liabilities and capital
22 Reserve balances with Federal Reserve Banks3 . . .
Wednesday figures
End-of-month figures
Dec.
Jan.
Feb.
Jan. 17
Jan. 24
Jan. 31
Feb. 7
Feb. 14
Feb. 21
Feb. 28
428,440
413,136'
409,890
426,583
408,769'
413,136'
406,608
409,636
412,823
416,515
378,197
12,762
378,208
0
376,519
0
377,701
1,500
372,514
0
378,208
0
372,061
0
374,081
0
375,706
0
376,928
6,230
2,634
1,100
0
2,634
0
0
2,634
0
0
2,634
3,000
0
2,634
0
0
2,634
0
0
2,634
0
0
2,634
0
0
2,634
0
0
2,634
765
0
111
24
0
107
33,504
10
5
0
928'
31,350
12
6
0
396
30,322
142
3
0
9,237
32,367
13
4
0
929'
32,675
10
5
0
928'
31,350
8
6
0
273
31,626
20
9
0
996
31,896
3
9
0
4,490
29,981
78
8
0
-749
30,621
11,050
10,168
24,01 l r
11,052
10,168
24,067'
11,053
10,168
24,137
11,050
10,168
24,039'
11,052
10,168
24,053'
11,052
10,168
24,067'
11,052
10,168
24,081
11,053
10,168
24,095
11,053
10,168
24,109
11,053
10,168
24,123
424,253r
270
412,652'
273
413,951
279
418,666'
270
414,445'
272
412,652'
273
412,884
273
413,386
278
414,066
280
414,253
279
5,979
386
6,349
932
12,342
23,159
8,210
165
6,317
406
11,832
18,568'
5,632
209
5,764
318
13,062
16,033
7,859
166
5,428
306
12,678
26,466
7,089
173
6,421
313
12,633
12,696'
8,210
165
6,317
406
11,832
18,568'
5,219
235
6,842
360
12,166
13,930
5,177
173
5,835
378
12,610
17,114
5,192
294
5,784
368
12,642
19,527
4,700
167
5,592
320
12,692
23,856
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account
Held under repurchase agreements
3
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6 Acceptances
Loans to depository institutions
Adjustment credit
7
8
Seasonal credit
9
Extended credit
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and adjustments
70 Other
21 Other Federal Reserve liabilities and capital 3
22 Reserve balances with Federal Reserve Banks
..
1. Amounts of cash held as reserves are shown in table 1.12, line 2.
2. Includes securities loaned—fully guaranteed by U.S. government securities pledged
with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back
under matched sale-purchase transactions.
3. Excludes required clearing balances and adjustments to compensate for float.
A6
Domestic Financial Statistics • May 1996
1.12
RESERVES A N D BORROWINGS
Depository Institutions'
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1996
Reserve balances with Reserve Banks2
Total vault cash3
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
1994
1995
Dec.
1
2
3
4
5
6
7
8
9
10
1993
1995
Dec.
Dec.
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.'
Feb.
29,374
36,818
33,484
3,334
62,858
61,795
1,063
82
31
0
24,658
40,378
36,682
3,696
61,340
60,172
1,168
209
100
0
20,440
42,117
37,460
4,657
57,900
56,622
1,278
257
40
0
20,565
40,186
36,255
3,932
56,819
55,832
988
282
258
0
20,519
40,652
36,640
4,012
57,159
56,209
950
278
252
0
20,055
40,564
36,345
4,219
56,400
55,319
1,081
245
199
0
20,066
40,576
36,332
4,244
56,397
55,454
943
204
73
0
20,440
42,117
37,460
4,657
57,900
56,622
1,278
257
40
0
17,763
44,790
39,170
5,620
56,934
55,449
1,485
38
7
0
16,792
42,205
36,957
5,248
53,749
52,898
851
35
7
0
Biweekly averages of daily figures for two week periods ending on dates indicated
1995
1996
Nov. 8
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks2
Total vault cash3
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowings at Reserve Banks8
Seasonal borrowings
Extended credit9
Nov. 22
Dec. 6
Dec. 20
Jan. 3
Jan. 17
Jan. 31r
Feb. 14
Feb. 28
Mar. 13
19,334
41,126
36,846
4,280
56,180
55,129
1,052
121
116
0
20,270
40,218
36,071
4,148
56,341
55,544
797
236
63
0
20,438
40,653
36,274
4,379
56,712
55,623
1,089
233
51
0
19,563
42,943
38,053
4,890
57,615
56,508
1,107
300
41
0
21,558
41,865
37,353
4,513
58,910
57,313
1,597
218
34
0
19,658
44,166
39,104
5,062
58,762
57,143
1,619
22
4
0
15,055
46,042
39,626
6,416
54,681
53,356
1,326
16
5
0
15,546
44,132
38,455
5,677
54,001
53,288
713
24
7
0
17,938
40,326
35,468
4,858
53,406
52,436
970
47
8
0
18,189
41,536
36,844
4,692
55,032
53,925
1,107
15
8
0
1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For
ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted.
2. Excludes required clearing balances and adjustments to compensate for float and
includes other off-balance-sheet "as-of" adjustments.
3. Total "lagged" vault cash held by depository institutions subject to reserve
requirements. Dates refer to the maintenance periods during which the vault cash may be used
to satisfy reserve requirements. The maintenance period for weekly reporters ends sixteen
days after the lagged computation period during which the vault cash is held. Before Nov. 25,
1992, the maintenance period ended thirty days after the lagged computation period.
4. All vault cash held during the lagged computation period by "bound" institutions (that
is, those whose required reserves exceed their vault cash) plus the amount of vault cash
applied during the maintenance period by "nonbound" institutions (that is, those whose vault
cash exceeds their required reserves) to satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Also includes adjustment credit.
9. Consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions deal with sustained
liquidity pressures. Because there is not the same need to repay such borrowing promptly as
with traditional short-term adjustment credit, the money market effect of extended credit is
similar to that of nonborrowed reserves.
Money Stock and Bank Credit
1.13
S E L E C T E D B O R R O W I N G S IN I M M E D I A T E L Y A V A I L A B L E F U N D S
A7
Large Banks'
Millions of dollars, averages of daily figures
1996, week ending Monday
Source and maturity
Jan.
1
2
3
4
5
6
7
8
Federal funds purchased, repurchase agreements, and other
selected borrowings
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and official
institutions, and U.S. government agencies
For one day or under continuing contract
For all other maturities
Repurchase agreements on U.S. government and federal
agency securities
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
1
Jan.
8
Jan.
15
Jan.
22
Jan.
29
Feb.
5
Feb.
12
Feb.
19
Feb.
26
87,495
17,781
94,378
14,765
90,305
14,524
85,691
13,759
78,477
14,068
84,184
13,704
83,771
13,211
84,683
13,189
79,608
13,147
20,342
21,663
23,127
19,427
23,688
19,529
24,098
19,155
19,658
19,908
23,281
18,768
23,504
19,861
23,102
19,558
23,785
18,911
17,233
22,925
20,104
25,774
20,047
27,454
19,938
26,854
18,932
28,083
21,283
28,316
20,264
32,043
22,225
28,315
21,598
28,358
41,272
18,286
45,524
16,154
43,602
16,790
43,700
15,799
41,234
15,225
41,233
15,369
41,155
15,691
39,608
16,552
38,913
15,665
64,799
30,267
68,303
34,492
64,929
37,095
65,987
32,429
60,616
29,037
59,372
30,104
58,204
29,055
60,125
29,222
57,919
30,887
MEMO
Federal funds loans and resale agreements in immediately
available funds in maturities of one day or under
continuing contract
9 To commercial banks in the United States
10 To all other specified customers2
1. Banks with assets of $4 billion or more as of Dec. 31, 1988.
Data in this table also appear in the Board's H.5 (507) weekly statistical release. For
ordering address, see inside front cover.
2. Brokers and nonbank dealers in securities, other depository institutions, foreign banks
and official institutions, and U.S. government agencies,
A8
Domestic Financial Statistics • May 1996
1.14
FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Adjustment credit1
Federal Reserve
Bank
Extended credit3
Seasonal credit"
Chicago
St. Louis
Minneapolis
Kansas City
Dal'as
San Francisco
Effective date
Previous rate
On
4/5/96
Effective date
Previous rate
On
4/5/96
Effective date
Previous rate
5.00
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
On
4/5/96
2/1/96
1/31/96
1/31/96
1/31/96
2/1/96
1/31/96
5.25
5.30
3/28/96
5.30
5.80
3/28/96
5.80
5.25
5.30
3/28/96
5.30
5.80
3/28/96
5.80
2/1/96
2/5/96
1/31/96
2/1/96
1/3 !/96
1/31/96
5.00
4
Range of rates for adjustment credit in recent years
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
6-6.5
6.5
6.5-7
7
7-7.25
7.25
7.75
8
8-8.5
8.5
8.5-9.5
9.5
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
In effect Dec. 31, 1977
1978—Jan.
9
20
May 11
12
July
3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov.
1
3
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
1981—May 5
10
10-10.5
10.5
10.5-11
10
10.5
10.5
11
11
11
11-12
12
12
12
12-13
13
12-13
13
13
13
12
12
11-12
11
•inge (or
\el)—All
R. Banks
F.R. Bank
of
N.Y.
1981—Nov. 2
6
Dec. 4
13-14
13
12
13
13
12
1982—July 20
23
Aug. 2
3
11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
11.5
11.5
11
11
10.5
10
10
9.5
9.5
9
9
9
8.5
8.5
1984—Apr. 9
13
Nov. 21
26
Dec. 24
8.5-9
9
8.5-9
8.5
8
9
9
8.5
8.5
8
1985—Mav 20
7.5-8
7.5
7.5
7.5
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
5.5-6
6
6
6
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
11
10-11
11
10
10
11
11
10
12
12-13
13
13-14
14
1
2
13
13
14
14
24
1986—Mar. 7
10
Apr. 21
23.
July 11
Auc. 21
22
1987—Sept. 4
11
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 oil adjustment credit loans of unusual size
that result from a major operating problem at the borrower's facility.
2. Available to help relatively small depository institutions meet regular seasonal needs for
funds that arise from a clear pattern of intrayearly movements in their deposits and loans and
that cannot be met through special industry lenders. The discount rate on seasonal credit takes
into account rates charged by market sources of funds and ordinarily is reestablished on the
first business day of each two-week reserve maintenance period: however, it is never less than
the discount rate applicable to adjustment credit.
3. May be made available to depository institutions when similar assistance is not
reasonably available from other sources, including special industry lenders. Such credit may
be provided when exceptional circumstances (including sustained deposit drains, impaired
access to money market funds, or sudden deterioration in loan repayment performance) or
practices involve only a particular institution, or to meet the needs of institutions experiencing
difficulties adjusting to changing market conditions over a longer period (particularly at times
of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is
charged on extended-credit loans outstanding less than thirty days; however, at the discretion
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
1988—Aua. 9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
27
6.5-7
7
7
7
Effective date
1990—Dec. 19
6.5
6.5
1
4
30
2
13
17
6
7
20
24
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5-4.5
3.5
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
2
7
3-3.5
3
3
3
1994—May 17
18
Aug. 16
18
Now 15
17
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
5.00
5.00
1991—Feb.
Apr.
May
Sept.
Nov.
Dec.
1992—July
1995—Feb.
In effect Apr. 5, 1996
of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a
tlexible 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 efl'cctive 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 w as eliminated on Nov. 17, 1981.
Policy Instruments
1.15
A9
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Requirement
Type of deposit
Percentage of
deposits
12/19/95
12/19/95
12/27/90
0
1. Required reserves must be held in the form of deposits with Federal Reserve Banks
or vault cash. Nonmember institutions may maintain reserve balances with a Federal
Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For
previous reserve requirements, see earlier editions of the Annual Report or the Federal
Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions
include commercial banks, mutual savings banks, savings and loan associations, credit
unions, agencies and branches of foreign banks, and Edge Act corporations.
2. Transaction accounts include all deposits against which the account holder is permitted
to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers for the purpose of making payments to
third persons or others. However, money market deposit accounts (MMDAs) and similar
accounts subject to the rules that permit no more than six preauthorized, automatic, or other
transfers per month, of which no more than three may be checks, are 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 Dec. 19, 1995, the amount was decreased from $54.0
million to $52.0 million.
Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the
amount of reservable liabilities subject to a zero percent reserve requirement each year for the
3
10
0
Net transaction accounts2
1 $0 million-$52.0 million3
2 More than $52.0 million4
Effective date
12/27/90
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. Effective Dec. 19, 1995, the
exemption was raised from $4.2 million to $4.3 million. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement.
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 11/2 years was reduced from 3 percent to 1 ]/l percent for
the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that
began Dec. 27, 1990. The reserve requirement on nonpersonal time deposits with an original
maturity of 1 V5 years or more has been zero since Oct. 6, 1983.
For institutions that report quarterly, the reserve requirement on nonpersonal time deposits
with an original maturity of less than 1 ]/l years was reduced from 3 percent to zero on Jan. 17,
1991.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero
in the same manner and on the same dates as was the reserve requirement on nonpersonal
time deposits with an original maturity of less than 1 'A years (see note 5).
A10
Domestic Financial Statistics • May 1996
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1995
Type of transaction
and maturity
1993
1994
1995
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
U.S. TREASURY SECURITIES
22
23
24
Outright transactions (excluding matched
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
25
26
Matched transactions
Gross purchases
Gross sales
27
28
Repurchase agreements
Gross purchases
Gross sales
29
Net change in U.S. Treasury securities
1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
17,717
0
332,229
0
17,484
0
376,277
0
10,932
0
398,487
900
0
0
25,213
0
433
0
39,195
0
409
0
30,333
0
1,350
0
29,397
900
4,271
0
39,057
0
0
0
31,535
0
0
0
31,476
0
1,223
0
31,368
-36,582
0
1,238
0
0
-21,444
0
390
0
0
0
0
0
0
2,063
-562
300
0
0
7,805
-5,599
0
0
0
0
0
485
0
0
1,745
-2,049
0
0
0
6,108
-4,937
0
390
0
0
0
0
0
0
2,048
-3,287
1,228
10,350
0
-27,140
0
9,168
0
-6,004
17,801
4,966
0
0
0
0
0
-2,063
562
0
0
-3,379
4,905
100
0
0
0
0
0
-1,745
2,049
0
0
-5,292
3,237
2,317
0
0
0
0
0
-2,048
3,287
4,168
0
0
0
3,818
0
-3,145
2,903
1,239
0
0
0
0
0
0
0
0
0
-319
1,800
0
0
0
0
0
0
0
0
400
0
-816
1,700
0
0
0
0
0
0
0
0
3,457
0
0
0
3,606
0
-918
775
3,122
0
0
0
0
0
0
0
0
0
-525
1,100
100
0
0
0
0
0
0
0
0
0
0
0
1,884
0
0
0
0
0
0
0
36,915
0
767
35,314
0
2,337
20,649
0
2,376
0
0
0
433
0
0
609
0
0
1,350
0
1,385
4,671
0
0
4,591
0
0
0
0
1,228
1,475,941
1,475,085
1,700,836
1,701,309
2,197,736
2,202,030
166,674
163,490
179,571
185,711
195,830
198,587
216,755
213,161
226,340
228,419
227,858
228,071
260,425
259,186
475,447
470,723
309,276
311,898
331,694
328,497
8,527
24,851
4,130
1,075
43,286
39,896
28,825
32,980
44,569
39,876
34,325
28,546
16,040
28,802
41,729
29,882
17,175
-13,141
-2,651
1,241
-597
7,285
10,157
-12,751
0
0
774
0
0
1,002
0
0
1,303
0
0
333
0
0
122
0
0
46
0
0
83
0
0
120
0
0
58
0
0
0
35,063
34,669
52,696
52,696
36,851
36,776
711
1,172
1,610
1,510
1,434
1,459
3,740
3,605
3,763
3,973
2,888
1,788
9,793
10,893
-380
-1,002
-1,228
-794
-22
52
-330
1,042
-1,100
41,348
28,880
15,948
-13,935
-2,673
-545
6,955
11,199
-13,851
FEDERAL AGENCY OBLIGATIONS
30
31
32
Outright transactions
Gross purchases
Gross sales
Redemptions
33
34
Repurchase agreements
Gross purchases
Gross sales
35
Net change in federal agency obligations
36
Total net change in System Open Market Account...
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
-71
1,170
Federal Reserve Banks
1.18
FEDERAL RESERVE BANKS
All
Condition and Federal Reserve Note Statements'
Millions of dollars
End of month
Wednesday
Jan. 31
Feb. 7
Feb. 14
1996
1995
1996
Account
Feb. 21
Feb. 28
Dec. 31
Jan. 31
Feb. 29
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3
Loans
4 To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
9 Total U.S. Treasury securities
2
11,052
10,168
513
11,052
10,168
535
11,053
10,168
551
11,053
10,168
550
11,053
10,168
543
11,050
10,168
424
11,052
10,168
513
11,053
10,168
547
15
0
0
14
0
0
29
0
0
12
0
0
86
0
0
135
0
0
15
0
0
18
0
0
2,634
0
2,634
0
2,634
0
2,634
0
2,634
765
2,634
1,100
2,634
0
2,634
0
378,208
372,061
374,081
375,706
383,158
390,959
378,208
376,519
378,208
184,355
149,785
44,069
0
376,519
182,666
148,885
44,969
0
10 Bought outright
11 Bills
1? Notes
13 Bonds
14 Held under repurchase agreements
378,208
184,355
149,785
44,069
0
372,061
178,207
149,785
44,069
0
374,081
180,227
149,785
44,069
0
375,706
181,852
148,885
44,969
0
376,928
183,074
148,885
44,969
6,230
378,197
183,116
151,013
44,069
12,762
15 Total loans and securities
380,857
374,709
376,744
378,352
386,643
394,829
380,857
379,171
6,374
1,134
4,791
1,140
Other assets
18 Denominated in foreign currencies
19 All other4
20 Total assets
6,374
1,134
6,001
1,134
6,579
1,138
13,201
1,141
5,577
1,141
19,798
10,447
19,808
10,701
19,816
10,976
19,824
8,899
19,833
9,625
21,099
11,258
19,798
10,447
20,212
8,965
440,344
16 Items in process of collection
17 Bank premises
4,769
1,126
434,108
437,024
443,188
444,582
454,723
440,344
436,048
LIABILITIES
389,371
389,610
390,120
390,786
390,952
400,935
389,371
390,640
22 Total deposits
33,903
26,943
29,141
31,551
35,524
36,908
33,903
28,135
23 Depository institutions
24 U.S. Treasury—General account
25 Foreign—Official accounts
26
25,122
8,210
165
406
21,128
5,219
235
360
23,362
5,177
173
378
25,696
5,192
294
368
30,337
4,700
167
320
29,611
5,979
386
932
25,122
8,210
165
406
21,768
5,632
209
318
5,239
4,181
5,389
4,111
5,154
4,270
8,209
4,192
5,414
4,185
4,538
4,409
5,239
4,181
4,211
4,158
432,693
426,053
428,683
434,738
436,075
446,790
432,693
427,144
3,996
3,654
1
4,007
3,835
214
4,024
3,918
399
4,036
3,938
476
4,037
3,945
525
3,966
3,966
0
3,996
3,654
1
4,031
3,945
928
440344
434,108
437,024
443,188
444,582
454,723
440,344
436,048
509,044
509,346
515,332
523,930
529,208
500,174
509,044
536,476
21 Federal Reserve notes
27 Deferred credit items
28 Other liabilities and accrued dividends'
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts
MEMO
34 Marketable U.S. Treasury securities held in custody for
foreign and international accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding (issued to Banks)
36 LESS: Held by Federal Reserve Banks
37 Federal Reserve notes, net
38
39
40
41
Collateral held against notes, net
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities
42 Total collateral
489,867
100,496
389,371
492,212
102,602
389,610
494,847
104,727
390,120
497,637
106,851
390,786
500,359
109,407
390,952
481,044
80,109
400,935
489,867
100,496
389,371
501,002
110,362
390,640
11,052
10,168
0
368,150
11,052
10,168
0
368,390
11,053
10,168
0
368,899
11,053
10,168
0
369,565
11,053
10,168
0
369,730
11,050
10,168
0
379,717
11,052
10,168
0
368,150
11,053
10,168
0
369,419
389,371
389,610
390,120
390,786
390,952
400,935
389,371
390,640
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical
release. For ordering address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with
Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under
matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury
bills maturing within ninety days.
5. Includes exchange-translation account reflecting the monthly revaluation at market
exchange rates of foreign exchange commitments.
A12
1.19
Domestic Financial Statistics • May 1996
FEDERAL RESERVE BANKS
Maturity Distribution of Loan and Security Holding
Millions of dollars
Wednesday
Type of holding and maturity
End of month
1996
1995
Jan. 31
Feb. 7
Feb. 14
Feb. 21
1 Total loans
15
34
15
2 Within fifteen days'
3 Sixteen days to ninety days
15
30
4
10
5
378,208
372,061
20,294
84,103
119,461
85,961
31,469
36,921
20,849
81,990
114,871
85,961
31,469
36,921
2,634
141
660
617
664
527
25
4 Total U.S. Treasury securities
5
6
7
8
9
10
Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
11 Total federal agency obligations
12
13
14
15
16
17
Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
Feb. 28
Dec. 31
Jan. 31
Feb. 29
16
77
87
15
35
15
7
75
2
85
2
15
32
3
374,081
375,706
383,158
378,197
378,208
376,519
16,830
83,529
119,371
85,961
31,469
36,921
13,271
87,393
116,519
88,571
32,150
37,801
20,393
87,722
117,566
87,524
32,151
37,801
7,580
93,738
123,217
85,273
31,469
36,921
20,294
84,103
119,461
85,961
31,469
36,921
4,962
87,722
124,656
89,228
32,151
37,801
2,634
2,634
2,635
3,399
2,634
2,634
2,634
0
859
604
619
527
25
0
909
604
569
527
25
365
544
604
569
527
25
1,180
510
615
543
527
25
240
474
527
841
527
25
141
660
617
664
527
25
415
510
615
543
527
25
1. Holdings under repurchase agreements are classified as maturing within fifteen days in
accordance with maximum maturity of the agreements.
1996
NOTE. Total acceptances data have been deleted from this table because data are no longer
available.
Monetary and Credit Aggregates
1.20
A13
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1995'
Item
1992
Dec.
1993
Dec.
1994
Dec.
July
Total reserves3
Nonborrowed reserves4
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base6
Aug.
Sept.
Oct:
Nov.
Dec.
Jan.'
Feb.
56.84
56.59
56.59
55.76
432.74
56.33
56.13
56.13
55.39
433.21
56.36'
56.11'
56.11'
55.09'
435.01'
55.61
55.57
55.57
54.12
435.15
54.85
54.81
54.81
54.00
433.62
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS2
1
2
3
4
5
1996
1995
Dec.
54.37r
54.24r
54.24'
53.21'
351.24'
60.52'
60.44'
60.44'
59.46'
386.88'
59.36'
59.16'
59.16'
58.20'
418.72'
56.36'
56.11'
56.11'
55.09'
435.01'
57.68
57.31
57.31
56.59
429.82
57.50
57.22
57.22
56.51
430.81
57.34
57.07
57.07
56.39
431.69
Not seasonally adjusted
6
7
8
9
10
7
Total reserves
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves8
Monetary base9
56.06
55.93
55.93
54.90
354.55
62.37
62.29
62.29
61.31
390.59
61.13
60.92
60.92
59.96
422.51
58.02'
57.76
57.76
56.74
439.03'
57.50
57.13
57.13
56.41
431.31
56.94
56.66
56.66
55.96
431.09
57.30
57.03
57.03
56.35
431.64
56.56
56.31
56.31
55.48
431.60
56.57
56.37
56.37
55.63
433.22
58.02'
57.76
57.76
56.74
439.03'
56.95
56.91
56.91
55.47
435.99
53.80
53.77
53.77
52.95
430.24
56.54
56.42
56.42
55.39
360.90
1.16
.12
62.86
62.78
62.78
61.80
397.62
1.06
.08
61.34
61.13
61.13
60.17
427.25
1.17
.21
57.90
57.64
57.64
56.62
444.45'
1.28
.26
57.39
57.02
57.02
56.30
435.56
1.09
.37
56.82
56.54
56.54
55.83
435.59
.99
.28
57.16
56.88
56.88
56.21
436.20
.95
.28
56.40
56.15
56.15
55.32
436.34
1.08
.25
56.40
56.19
56.19
55.45
438.19
.94
.20
57.90
57.64
57.64
56.62
444.45'
1.28
.26
56.93
56.90
56.90
55.45
441.94
1.49
.04
53.75
53.72
53.72
52.90
436.21
.85
.04
NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS10
11
12
13
14
15
16
17
Total reserves"
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base12
Excess reserves13
Borrowings from the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly
statistical release. Historical data starting in 1959 and estimates of the effect on required
reserves of changes in reserve requirements are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory
changes in reserve requirements. (See also table 1.10.)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted,
break-adjusted total reserves (line 1) less total borrowings of depository institutions from the
Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under the terms and
conditions established for the extended credit program to help depository institutions deal
with sustained liquidity pressures. Because there is not the same need to repay such
borrowing promptly as with traditional short-term adjustment credit, the money market effect
of extended credit is similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters
whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess
reserves (line 16).
8. To adjust required reserves for discontinuities that are due to regulatory changes in
reserve requirements, a multiplicative procedure is used to estimate what required reserves
would have been in past periods had current reserve requirements been in effect. Breakadjusted required reserves include required reserves against transactions deposits and nonpersonal time and savings deposits (but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus
(2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no
adjustments to eliminate the effects of discontinuities associated with regulatory changes in
reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve
requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total
reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float
at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for
all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current reserve
requirements. Since the introduction of contemporaneous reserve requirements in February
1984, currency and vault cash figures have been measured over the computation periods
ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
A14
1.21
Domestic Financial Statistics • May 1996
M O N E Y STOCK, LIQUID ASSETS, A N D D E B T M E A S U R E S 1
Billions of dollars, averages of daily figures
1995'
Item
1992
Dec.
1993
Dec.
1994
Dec.
1996
1995'
Dec.
Nov.
Dec.
Jan.'
Feb.
Seasonally adjusted
1
2
3
4
5
Measures2
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency3
Travelers checks4
Demand deposits5
Other checkable deposits6
1,024.4
3,438.7
4,187.3
5,075.8
11,881.7
1,128.6
3,494.1
4,249.6
5,164.5
12,516.4
1,148.7
3,509.4
4,319.7r
5,303.7r
13,153.2
1,124.8
3,660.2
4,572.7
5,683.2
13,871.3
1,129.0
3,643.6
4,559.0
5,658.2
13,829.6
1,124.8
3,660.2
4,572.7
5,683.2
13,871.3
1,119.0
3,675.0
4,601.3
5,705.9
13,897.1
1,117.0
3,690.2
4,638.9
n.a.
n.a.
292.9
8.1
339.1
384.2
322.4
7.9
384.3
414.0
354.9
8.5
382.4
402.9
373.2
8.9
389.8
353.0
371.6
8.9
388.2
360.3
373.2
8.9
389.8
353.0
373.6
8.9
393.5
343.0
373.3
8.9
397.4
337.5
2,414.3
748.6
2,365.4
755.6
2,360.7
810.3r
2,535.4
912.4
2,514.6
915.4
2,535.4
912.4
2,556.0
926.4
2,573.3
948.6
Commercial banks
12 Savings deposits, including MMDAs
13 Small time deposits9
14 Large time deposits10' "
754.1
509.3
286.6
785.0
470.4
272.3
751.9
505.4
298.7
775.0
576.2
342.4
760.3
575.4
340.7
775.0
576.2
342.4
793.2
578.4
340.5
804.2
576.5
345.6
Thrift institutions
15 Savings deposits, including MMDAs
16 Small time deposits9
17 Large time deposits'0
433.0
361.9
67.1
433.8
317.6
61.5
397.0
318.2
64.8
359.5
359.5
75.0
360.3
358.4
74.7
359.5
359.5
75.0
358.6
357.1
76.0
360.5
357.3
76.2
Money market mutual funds
18 Retail
19 Institution-only
356.0
199.8
358.7
197.9
388.1
183.7
465.1
226.4
460.1
224.0
465.1
226.4
468.6
229.7
474.7
243.1
Repurchase agreements and Eurodollars
20 Repurchase agreements'2
21 Eurodollars'2
128.1
66.9
157.5
66.3
180.8r
82.3
177.3
91.4
185.2
90.7
177.3
91.4
184.6
95.5
187.6
96.2
3,068.6
8,813.1
3,328.3
9,188.1
3,497.6
9,655.6
3,644.6
10,226.7
3,645.8
10,183.9
3,644.6
10,226.7
3,634.7
10,262.4
n.a.
Nontransaction components
10 In M27
11 In M3 only8
Debt components
22 Federal debt
23 Nonfederal debt
Not seasonally adjusted
2
24
25
26
27
28
Measures
Ml
M2
M3
L
Debt
29
30
31
32
Ml components
Currency3
Travelers checks45
Demand deposits
Other checkable deposits6
1,046.0
3,455.1
4,205.3
5,103.1
11,883.2
1,153.7
3,514.1
4,271.3
5,194.2
12,509.3
1,174.2
3,529.8
4,341.5'
5,333.2'
13,145.8
1,150.7
3,679.9
4,593.8
5,712.7
13,858.0
1,136.5
3,649.2
4,571.9
5,671.5
13,793.1
1,150.7
3,679.9
4,593.8
5,712.7
13,858.0
1,127.9
3,676.7
4,605.9
5,719.3
13,891.5
1,103.3
3,670.7
4,620.0
n.a.
n.a.
295.0
7.8
354.4
388.9
324.8
7.6
401.8
419.4
357.5
8.1
400.1
408.4
376.1
8.5
408.0
358.0
371.7
8.7
395.8
360.3
376.1
8.5
408.0
358.0
371.7
8.5
399.0
348.7
370.8
8.5
388.3
335.7
2,409.1
750.2
2,360.4
757.1
2,355.6
811.7'
2,529.2
913.8
2,512.7
922.7
2,529.2
913.8
2,548.8
929.2
2,567.4
949.3
Commercial banks
35 Savings deposits, including MMDAs
36 Small time deposits9
37 Large time deposits10' "
752.9
507.8
286.2
784.3
468.2
272.1
751.6
502.5
298.5
775.0
572.3
342.3
763.4
572.6
343.6
775.0
572.3
342.3
789.5
576.1
337.8
799.0
575.6
344.1
Thrift institutions
38 Savings deposits, including MMDAs
39 Small time deposits9
40 Large time deposits10
432.4
360.9
67.0
433.4
316.1
61.5
396.9
316.4
64.8
359.5
357.0
75.0
361.7
356.7
75.4
359.5
357.0
75.0
356.9
355.6
75.4
358.2
356.7
75.8
Money market mutual funds
41 Retail
42 Institution-only
355.1
201.1
358.3
199.4
388.2
185.5
465.4
228.6
458.3
226.3
465.4
228.6
470.6
237.3
478.0
248.7
Repurchase agreements and Eurodollars
43 Repurchase agreements'2
44 Eurodollars12
127.2r
68.7r
156.6r
61.6'
179.6'
83.4'
175.8
92.1
185.1
92.4
175.8
92.1
183.3
95.4
184.8
95.8
3,069.8
8,813.4
3,329.5
9,179.8
3,499.0
9,646.8
3,645.9
10,212.1
3,635.9
10,157.2
3,645.9
10,212.1
3,634.4
10,257.1
Nontransaction components
33 In M27
34 In M3 only8
Debt components
45 Federal debt
46 Nonfederal debt
Footnotes appear on following page.
n.a.
n.a.
Monetary and Credit Aggregates
A13
•
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly
statistical release. Historical data starting in 1959 are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) savings 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 (money funds with minimum initial investments of less than $50,000). Excludes individual retirement accounts (IRAs) and Keogh
balances at depository institutions and money market funds. Seasonally adjusted M2 is
calculated by summing savings deposits, small-denomination time deposits, and retail money
fund balances, each seasonally adjusted separately, and adding this result to seasonally
adjusted Ml.
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more)
issued by all depository institutions, (2) balances in institutional money funds (money funds
with minimum initial investments of $50,000 or more), (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.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury
securities, commercial paper, and bankers acceptances, net of money market fund holdings of
these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term
Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted
separately, and then adding this result to M3.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository
institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers.
Travelers checks issued by depository institutions are included in demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other than those
owed to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions, credit union
share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances.
8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees.
9. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are
subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the US. government, and foreign banks and official institutions.
12. Includes both overnight and term.
A16
1.22
Domestic Financial Statistics • May 1996
Commercial and BIF-insured saving banks1
DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING
1995
1993
1996
1994
Dec.
Dec.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.'
Feb.
Interest rates (annual effective yields)2
INSURED COMMERCIAL BANKS
1 Negotiable order of withdrawal accounts
2 Savings deposits3
3
4
5
6
7
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 years
More than 2 V2 years
1.86
2.46
1.96
2.92
1.97
3.17
1.93
3.13
1.93
3.12
1.94
3.14
1.93
3.11
1.95
3.13
1.92
3.10
1.92
3.01
1.94
2.98
2.65
2.91
3.13
3.55
4.28
3.79
4.44
5.12
5.74
6.30
4.20
4.81
5.27
5.53
5.79
4.17
4.77
5.18
5.38
5.62
4.10
4.77
5.15
5.39
5.63
4.10
4.75
5.14
5.32
5.60
4.11
4.75
5.15
5.31
5.56
4.12
4.74
5.12
5.27
5.49
4.11
4.69
5.03
5.18
5.41
4.01
4.57
4.92
5.03
5.26
3.97
4.47
4.79
4.90
5.11
1.87
2.63
1.94
2.87
1.98
2.97
1.97
2.97
1.98
2.96
1.98
2.96
1.97
2.97
1.94
2.99
1.91
2.99
1.85
2.95
1.84
2.92
2.81
3.02
3.80
4.89
4.24
5.22
4.28
5.16
4.34
5.12
4.29
5.08
4.34
5.06
4.45
5.02
4.44
4.95
4.38
4.87
4.29
4.79
3.31
3.67
4.62
5.52
6.09
6.43
5.61
5.78
5.99
5.47
5.62
5.82
5.45
5.60
5.78
5.35
5.51
5.74
5.32
5.50
5.69
5.28
5.46
5.64
5.19
5.32
5.47
5.07
5.22
5.34
4.93
5.11
5.25
BIF-INSURED SAVINGS BANKS4
8 Negotiable order of withdrawal accounts
9 Savings deposits3
10
11
12
13
14
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2'/i years
More than 2 Vi years
Amounts outstanding (millions of dollars)
INSURED COMMERCIAL BANKS
15 Negotiable order of withdrawal accounts
16 Savings deposits3
Personal
17
Nonpersonal
18
19
20
21
22
23
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 l/l years
More than 2lA years
24 IRA and Keogh plan deposits
305,237
767,035
598,276
168,759
304,896
737,068
580,438
156,630
276,406
721,498
566,220
155,279
274,140
726,697
570,299
156,398
267,644
735,930
575,204
160,726
253,174
744,839
584,239
160,600
258,411
747,943
587,235
160,707
259,259
767,431
599,787
167,644
252,434
793,168
628,372
164,796
248,464
774,748
617,570
157,177
246,906
798,356
634,471
163,885
29,362
109,050
145,386
139,781
180,461
32,265
96,650
163,062
164,395
192,712
32,258
92,364
189,110
198,805
195,689
33,142
91,975
189,011
202,467
195,623
30,937
90,796
189,565
204,453
201,306
29,804
92,220
189,338
203,548
200,182
29,940
94,418
188,859
206,993
200,201
31,083
97,401
188,043
211,169
202,357
32,807
96,902
187,828
211,388
203,227
34,275
96,811
186,068
214,093
200,849
36,879
101,149
186,561
214,984
202,184
144,011
144,097
149,488
150,426
150,648
149,570
151,094
151,869
152,390
152,984
155,305
11,191
80,376
77,263
3,113
11,175
70,082
67,159
2,923
11,237
66,952
63,736
3,216
11,147
66,409
63,194
3,215
10,999
66,478
63,149
3,329
11,408
69,752
66,403
3,349
11,317
69,636
66,193
3,443
11,613
70,265
66,688
3,577
12,727
71,402
67,919
3,482
11,410
67,540
64,172
3,369
12,047
71,129
67,798
3,331
2,746
12,974
17,469
16,589
20,501
2,144
11,361
18,391
17,787
21,293
1,555
10,939
21,545
24,413
22,733
1,769
11,030
21,969
24,876
22,713
1,856
11,079
22,294
25,029
22,563
1,739
11,258
24,837
27,825
23,351
1,768
11,231
25,036
27,755
23,470
1,903
11,848
25,887
28,247
23,574
2,115
12,754
27,072
28,966
24,247
1,988
12,581
26,750
26,968
22,769
2,231
14,053
28,400
27,891
22,733
19,791
19,008
20,196
20,286
20,333
21,913
21,784
21,758
21,949
21,229
21,251
BIF-INSURED SAVINGS BANKS4
25 Negotiable order of withdrawal accounts
26 Savings deposits3
Personal
27
28
Nonpersonal
29
30
31
32
33
Interest-bearing time deposits with balances of
less than $100,000, by maturity
7 to 91 days
92 to 182 days
183 days to 1 year
More than 1 year to 2 l/l years
More than 2 V2 years
34 IRA and Keogh plan accounts
1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508)
Special Supplementary Table monthly statistical release. For ordering address, see inside
front cover. Estimates are based on data collected by the Federal Reserve System from a
stratified random sample of about 425 commercial banks and 75 savings banks on the last day
of each month. Data are not seasonally adjusted and include IRA and Keogh deposits and
foreign currency-denominated deposits. Data exclude retail repurchase agreements and deposits held in U.S. branches and agencies of foreign banks.
2. As of October 31, 1994, interest rate data for NOW accounts and savings deposits
reflect a series break caused by a change in the survey used to collect these data.
3. Includes personal and nonpersonal money market deposits.
4. Includes both mutual and federal savings banks.
Monetary and Credit Aggregates A13
1.23
BANK DEBITS AND DEPOSIT TURNOVER 1
Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates
1995
Bank group, or type of deposit
July
DEBITS
Demand deposits3
1 All insured banks
2 Major New York City banks
3 Other banks
4 Other checkable deposits4
5 Savings deposits (including MMDAs)5
Sept.
Aug.
Oct.r
Nov/
Dec.
Seasonally adjusted
334,784.1
171,224.3
163,559.7
369,029.1
191,168.8
177,860.3
397,649.3
201,161.4
196,487.9
391,053.7
197,712.2
193,341.5
407,389.4
206,835.9
200,553.5
397,843.6
207,576.7
190,266.9
413,927.0
210,336.6
203,590.4
409,460.9
204,484.0
204,976.9
397,538.3
203,977.5
193,560.8
3,481.5
3,497.4
3,798.6
3,766.3
4,207.4
4,507.8
3,593.7
3,986.7
4,236.1
4,745.4
4,366.8
4,898.4
4,690.4
5,328.6
4,891.5
5,679.4
4,595.5
5,703.6
785.9
4,198.1
424.6
817.4
4,481.5
435.1
874.1
4,867.3
475.2
849.3
4,624.7
462.9
887.9
4,970.9
480.7
858.0
5,018.0
450.5
907.5
5,269.7
489.2
905.5
5,222.3
496.3
852.7
5,069.7
454.4
11.9
4.6
12.6
4.9
15.4
6.1
12.9
5.5
15.5
6.5
16.3
6.6
18.0
7.1
19.1
7.5
18.6
7.4
DEPOSIT TURNOVER
Demand deposits3
6 All insured banks
7 Major New York City banks
8 Other banks
9 Other checkable deposits4
10 Savings deposits (including MMDAs)5
DEBITS
Demand deposits3
11 All insured banks
12 Major New York City banks
13 Other banks
14 Other checkable deposits4
15 Savings deposits (including MMDAs)5
Not seasonally adjusted
334,899.2
171,283.5
163,615.7
369,121.8
191,226.0
177,895.7
397,657.8
201,182.6
196,475.3
390,226.6
196,873.1
193,353.5
421,875.3
213,958.6
207,916.7
395,203.2
207,994.2
187,209.0
413,547.6
212,506.0
201,041.7
398,219.1
202,744.5
195,474.6
411,802.7
210,780.0
201,022.7
3,481.7
3,498.3
3,795.6
3,764.4
4,202.6
4,500.8
3,525.4
4,054.1
4,203.3
4,750.1
4,431.9
4,849.1
4,565.4
5,075.1
4,566.6
5,388.7
4,784.8
6,013.9
786.1
4,197.9
424.8
818.2
4,490.3
435.3
874.6
4,873.1
475.4
848.2
4,657.5
462.8
936.7
5,343.0
506.7
856.4
5,069.5
445.3
895.4
5,292.2
476.7
860.5
5,046.6
462.5
847.5
4,900.9
453.9
11.9
4.6
12.6
4.9
15.3
6.1
12.9
5.6
15.6
6.5
16.7
6.6
17.7
6.8
17.8
7.1
19.0
7.8
DEPOSIT TURNOVER
Demand deposits3
16 All insured banks
17 Major New York City banks
18 Other banks
19 Other checkable deposits4
20 Savings deposits (including MMDAs)5
1. Historical tables containing revised data for earlier periods can be obtained from the
Publications Section, Division of Support Services, Board of Governors of the Federal
Reserve System, Washington, DC 20551.
Data in this table also appear in the Board's G.6 (406) monthly statistical release. For
ordering address, see inside front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and of states and
political subdivisions.
4. As of January 1994, other checkable deposits (OCDs), previously defined as automatic
transfer to demand deposits (ATSs) and negotiable order of withdrawal (NOW) accounts,
were expanded to include telephone and preauthorized transfer accounts. This change
redefined OCDs for debits data to be consistent with OCDs for deposits data.
5. Money market deposit accounts.
A18
1.26
Domestic Financial Statistics • May 1996
ASSETS AND LIABILITIES OF COMMERCIAL BANKS 1
Billions of dollars
Monthly averages
Account
1995r
1995
Feb.
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.r
Feb.
Feb. 7
Feb. 14
Feb. 21
Feb. 28
Seasonally adjusted
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
28 Residual (assets less liabilities)9
3,566.3
984.3
708.4
275.9
2,582.0
708.6
1,072.1
78.4
993.7
489.4
86.6
225.3
191.9
214.9
223.8
3,578.3
987.1
713.9
273.2
2,591.2
710.8
1,075.4
78.4
997.0
489.2
86.6
229.2
192.9
222.2
224.5
3,588.5
988.9
715.8
273.1
2,599.6
715.1
1,076.7
78.8
997.9
491.2
86.2
230.3
193.7
216.0
225.2
3,599.4
991.4
712.8
278.6
2,608.0
718.4
1,077.2
79.2
998.0
493.2
82.7
236.5
192.7
223.5
231.6
3,625.0
990.5
704.5
286.0
2,634.5
725.0
1,083.9
79.7
1,004.1
497.5
83.9
244.1
199.4
232.9
229.1
3,635.1
995.8
717.0
278.8
2,639.3
728.6
1,086.7
79.9
1,006.8
497.5
84.5
241.9
190.4
218.9
233.4
3,624.4
995.5
714.1
281.4
2,628.9
727.9
1,085.0
79.9
1,005.1
496.0
79.3
240.6
185.2
220.4
231.4
3,635.3
993.5
714.8
278.7
2,641.8
728.8
1,086.3
79.8
1,006.5
496.8
88.9
241.1
190.3
214.5
233.1
3,640.5
996.6
717.8
278.8
2,644.0
729.8
1,087.0
79.8
1,007.2
499.0
83.7
244.5
189.4
229.1
235.2
3,643.1
1,000.3
723.3
277.0
2,642.9
728.4
1,087.9
80.2
1,007.8
498.1
86.6
241.8
195.7
212.8
232.8
4,108.9
4,140.1
4,161.0
4,166.8
4,190.7
4,229.4
4,221.1
4,204.8
4,216.4
4,237.5
4,227.8
2,616.9
783.3
1,833.6
409.5
1,424.1
687.8
194.3
493.5
244.8
212.6
2,629.6
781.1
1,848.5
415.9
1,432.7
687.3
197.9
489.5
252.0
219.1
2,642.6
777.8
1,864.9
423.7
1,441.2
682.4
197.8
484.6
257.3
219.2
2,638.2
766.1
1,872.1
423.2
1,449.0
672.7
195.8
476.9
263.7
220.2
2,653.1
770.8
1,882.4
421.9
1,460.5
687.8
194.5
493.3
263.4
227.6
2,680.0
779.8
1,900.2
422.0
1,478.2
701.5
204.5
497.1
270.2
220.7
2,673.6
763.0
1,910.6
426.0
1,484.6
686.3
192.3
494.1
276.0
224.4
2,674.8
764.8
1,910.0
426.1
1,483.9
683.3
190.6
492.7
279.3
224.6
2,672.4
759.4
1,913.0
425.2
1,487.8
692.4
196.0
496.4
273.9
227.0
2,681.8
776.6
1,905.2
423.6
1,481.7
682.9
186.7
496.2
277.3
222.5
2,663.4
751.4
1,912.0
428.9
1,483.1
689.9
194.5
495.4
274.7
224.5
3,609.2
27 Total liabilities
3,543.5
980.2
708.5
271.7
2,563.3
702.0
1,068.1
78.2
989.9
485.7
84.3
223.3
189.3
211.6
221.5
2,545.9
801.4
1,744.5
374.6
1,369.9
644.7
181.3
463.4
248.0
170.6
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities8
3,367.5
939.3
724.8
214.5
2,428.2
670.2
1,021.8
76.0
945.9
459.4
73.4
203.3
178.9
213.7
232.0
3,935.5
16 Total assets7
17
18
19
20
21
22
23
24
25
26
1996
1996
ALL COMMERCIAL
BANKING INSTITUTIONS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Wednesday figures
3,762.0
3,788.0
3,801.6
3,794.8
3,831.9
3,872.4
3,860.4
3,862.0
3,865.7
3,864.5
3,852.5
326.3
346.8
352.1
359.5
372.0
358.8
357.1
360.7
342.7
350.7
373.0
375.3
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
45
46
47
48
49
50
51
52
53
54
55 Total liabilities
56 Residual (assets less liabilities)
Footnotes appear onfollowingpage.
9
3,571.1
987.3
710.1
277.2
2,583.9
704.0
1,074.0
78.9
995.2
490.7
86.3
228.8
187.8
215.8
224.9
3,580.0
988.8
712.1
276.7
2,591.2
706.8
1,078.6
79.1
999.5
489.8
85.2
230.8
192.1
223.2
224.9
3,594.8
987.8
714.1
273.6
2,607.0
713.4
1,082.4
79.3
1,003.1
492.0
87.5
231.7
197.0
220.1
224.7
3,606.9
981.6
708.0
273.6
2,625.3
716.6
1,081.9
79.2
1,002.7
499.0
86.5
241.3
205.0
238.1
231.3
3,615.4
978.0
698.9
279.0
2,637.4
722.1
1,083.6
79.6
1,004.1
502.1
85.6
243.9
208.1
240.3
229.7
3,626.6
990.9
712.4
278.5
2,635.7
726.7
1,083.6
79.5
1,004.2
498.1
87.3
240.0
192.6
219.7
232.8
3,618.4
990.5
709.6
280.9
2,627.9
724.7
1.083.5
79.4
1,004.1
498.1
82.0
239.5
189.3
210.6
231.4
3,631.3
991.5
710.9
280.5
2,639.9
726.4
1,084.5
79.5
1,005.0
498.1
91.1
239.7
194.9
213.3
232.0
3,623.4
988.8
712.4
276.4
2,634.6
726.9
1,082.5
79.3
1,003.1
499.3
84.9
241.1
189.4
240.3
232.7
3,634.8
993.8
717.5
276.3
2,641.0
728.8
1,083.6
79.6
1,004.1
497.2
91.7
239.8
195.7
216.5
234.0
4,095.6
4,142.5
4,163.5
4,179.8
4,224.4
4,237.0
4,215.1
4,193.1
4,214.9
4,229.2
4,224.4
2,537.3
794.5
1,742.8
375.1
1,367.6
644.2
183.0
461.2
249.6
170.5
2,603.8
769.0
1,834.8
408.7
1,426.1
686.2
188.3
497.9
243.1
212.4
2,628.4
779.8
1,848.6
414.9
1,433.7
693.5
190.2
503.3
247.6
219.3
2,642.6
778.0
1,864.6
422.2
1,442.5
688.1
192.9
495.2
258.4
218.5
2,654.2
779.7
1,874.5
424.2
1,450.3
681.7
197.9
483.7
262.6
222.1
2,684.2
805.9
1,878.3
420.9
1,457.5
692.2
207.3
484.9
264.0
222.9
2,686.7
791.5
1,895.2
419.0
1,476.2
688.7
211.3
477.4
277.3
222.4
2,664.7
755.9
1,908.8
426.6
1,482.2
680.7
193.9
486.8
278.2
225.0
2,661.2
752.3
1,908.8
425.8
1,483.0
669.4
191.4
478.0
272.4
225.4
2,666.3
754.7
1,911.7
425.5
1,486.1
682.3
196.0
486.3
272.8
227.5
2,672.3
769.8
1,902.5
424.0
1,478.5
681.8
190.5
491.3
286.6
221.4
2,656.0
746.6
1,909.4
430.7
1,478.7
691.0
196.8
494.1
283.5
226.0
3,601.6
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices
Other liabilities8
3,542.1
983.8
711.4
272.4
2,558.4
698.8
1.067.8
78.5
989.3
485.8
82.1
223.9
184.5
202.6
223.3
3,929.5
44 Total assets7
3,359.6
934.6
720.2
214.4
2,425.0
668.6
1,019.0
75.5
943.5
459.9
75.8
201.8
180.6
214.4
231.4
3,745.5
3,788.9
3,807.7
3,820.6
3,8633
3,875.0
3,848.5
3,828.3
3,848.9
3,862.0
3,856.3
355.9
359.3
361.1
362.0
366.6
364.8
366.0
367.2
368.1
327.9
350.1
353.7
Commercial Banking Institutions
1.26
A19
ASSETS AND LIABILITIES OF COMMERCIAL BANKS'—Continued
Billions of dollars
Wednesday figures
Monthly averages
Account
1995r
1995
Feb.
Aug.
Sept.
Oct.
Nov.
DOMESTICALLY CHARTERED
COMMERCIAL BANKS
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
Jan.r
Feb.
Feb. 7
Feb. 14
Feb. 21
Feb. 28
9
3,121.6
848.2
641.5
206.7
2,273.4
525.4
1,030.8
78.2
952.6
485.7
51.0
180.4
165.4
184.4
170.9
3,139.0
852.7
642.7
210.0
2,286.3
528.5
1,035.2
78.4
956.8
489.4
51.7
181.6
168.1
187.9
171.6
3,148.8
853.1
647.3
205.7
2,295.8
531.4
1,038.1
78.4
959.7
489.2
51.6
185.4
167.2
194.0
172.8
3,160.1
855.2
648.2
207.0
2.3W.9
534.5
1,040.1
78.8
961.2
491.2
53.6
185.5
168.8
185.8
173.6
3,172.9
856.2
645.0
211.2
2,316.7
534.7
1,041.4
79.2
962.2
493.2
56.4
191.0
173.1
193.0
178.1
3,193.7
855.6
641.2
214.5
2,338.1
539.8
1,049.2
79.7
969.5
497.5
55.8
195.8
181.7
201.3
175.8
3,192.4
854.1
644.2
209.8
2,338.3
540.8
1,053.0
79.9
973.1
497.5
52.5
194.5
173.6
189.1
177.9
3,185.7
854.3
642.9
211.4
2,331.4
540.4
1,051.2
79.9
971.3
496.0
49.8
194.0
167.4
190.8
176.4
3,192.2
853.5
643.8
209.7
2,338.7
540.8
1,052.6
79.8
972.7
496.8
54.7
193.9
172.0
182.9
178.0
3,197.3
855.4
645.1
210.2
2,342.0
541.2
1,053.1
79.8
973.3
499.0
52.3
196.4
177.4
199.3
179.3
3,195.9
855.1
646.7
208.3
2,340.8
541.1
1,054.5
80.2
974.4
498.1
53.4
193.7
176.7
183.8
177.3
3,585.4
3,609.9
3,626.1
3,631.8
3,660.6
3,695.5
3,676.4
3,663.8
3,668.5
3,696.6
3,677.2
2,395.5
791.3
1,604.2
236.1
1,368.1
537.7
163.3
374.4
86.8
126.8
2,448.4
774.0
1,674.4
250.3
1,424.1
567.2
175.9
391.3
90.8
136.9
2,458.9
772.1
1,686.8
255.0
1,431.8
569.6
178.8
390.7
92.2
141.6
2,469.8
768.7
1,701.1
260.9
1,440.1
567.0
178.0
389.0
92.6
141.2
2,471.4
756.6
1,714.8
267.5
1,447.3
565.1
176.0
389.1
89.8
142.8
2,488.4
760.8
1,727.7
269.8
1,457.9
577.2
176.0
401.2
91.4
146.7
2,519.5
769.7
1,749.8
271.6
1,478.2
590.3
182.8
407.6
93.2
144.5
2,512.5
753.0
1,759.6
273.5
1,486.1
572.3
172.4
399.8
90.1
146.4
2,514.3
755.0
1,759.4
274.2
1,485.2
572.3
172.5
399.8
90.0
146.2
2,510.6
748.1
1,762.5
273.8
1,488.7
576.9
175.5
401.4
84.8
148.7
2,524.6
766.7
1,757.9
273.6
1,484.3
570.2
168.0
402.3
92.8
145.7
2,498.7
742.0
1,756.7
272.6
1,484.2
572.5
173.1
399.4
93.3
145.4
3,146.8
83 Total liabilities
3,005.8
852.0
659.2
192.8
2,153.9
499.3
981.6
75.9
905.7
459.4
46.8
166.7
155.1
187.5
177.2
3,469.1
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices . . . .
Other liabilities8
84 Residual (assets less liabilities)
Dec.
Seasonally adjusted
72 Total assets7
73
74
75
76
77
78
79
80
81
82
1996
1996
3,243.3
3,2623
3,270.6
3,269.0
3303.7
3347.5
3321.2
3322.9
3321.0
33333
3309.9
348.0
355.2
340.9
347.5
363.3
367.2
322.3
342.1
347.6
355.5
362.8
356.9
Not seasonally adjusted
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other
Interbank loans4
Cash assets5
Other assets6
100 Total assets7
101
102
103
104
105
106
107
108
109
110
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices . . . .
Other liabilities8
111 Total liabilities
112 Residual (assets less liabilities)9
Footnotes appear on following page.
2,998.0
847.9
655.0
192.9
2,150.1
498.6
978.5
75.5
903.0
459.9
47.8
165.3
158.3
189.1
176.1
3,118.8
850.3
643.5
206.8
2,268.6
521.5
1,030.4
78.4
952.0
485.8
49.9
180.9
161.3
174.8
171.6
3,142.8
854.7
644.9
209.8
2,288.1
524.5
1,036.9
78.9
958.1
490.7
51.6
184.3
163.0
187.9
172.6
3,153.5
854.1
646.3
207.8
2,299.4
528.9
1,041.3
79.1
962.2
489.8
51.9
187.5
164.6
194.6
173.5
3,169.7
856.0
647.2
208.8
2,313.7
533.5
1,045.5
79.3
966.2
492.0
55.5
187.2
172.8
190.2
172.3
3,178.6
849.5
641.1
208.4
2,329.1
532.6
1,046.2
79.2
967.0
499.0
57.1
194.2
184.0
207.9
177.4
3,181.7
844.4
633.8
210.6
2,337.4
536.6
1,049.0
79.5
969.5
502.1
54.1
195.5
189.4
209.1
176.7
3,184.3
850.2
640.2
210.0
2,334.1
540.0
1,049.7
79.4
970.3
498.1
53.5
192.7
177.4
190.9
176.9
3,179.1
850.2
638.5
211.7
2,328.9
538.6
1,049.5
79.4
970.1
498.1
49.9
192.8
174.4
181.6
175.2
3,187.0
851.0
640.1
210.9
2,335.9
539.5
1,050.5
79.5
971.0
498.1
55.4
192.4
178.3
183.2
176.2
3,184.6
849.9
640.8
209.1
2,334.7
540.0
1,048.5
79.3
969.1
499.3
53.1
193.8
177.4
212.1
177.3
3,186.9
850.2
642.0
208.2
2,336.7
541.7
1,050.1
79.6
970.5
497.2
55.7
192.0
177.9
188.6
177.9
3,465.0
3,569.6
3,609.2
3,629.6
3,648.4
3,6913
3,7003
3,672.9
3,653.8
3,668.1
3,694.7
3,674.8
2,387.1
784.5
1,602.6
237.3
1,365.3
541.1
165.6
375.5
88.6
125.6
2,436.7
759.7
1,677.0
251.4
1,425.6
564.1
170.0
394.0
89.1
135.8
2,457.9
770.2
1,687.7
254.6
1,433.0
573.2
171.0
402.2
88.7
141.7
2,471.4
768.7
1,702.7
260.7
1,442.0
574.7
174.5
400.2
92.0
141.6
2,486.3
770.0
1,716.3
267.2
1,449.0
576.1
178.4
397.7
88.4
144.4
2,518.6
795.6
1,723.1
265.5
1,457.6
583.3
187.6
395.7
89.3
144.9
2,525.3
781.3
1,744.0
269.0
1,475.1
580.8
189.5
391.3
92.9
145.1
2,503.8
745.8
1,758.0
274.9
1,483.1
571.1
174.9
396.2
92.3
144.9
2,500.7
742.3
1,758.3
275.0
1,483.3
561.3
173.5
387.8
88.5
144.3
2,505.0
743.5
1,761.5
275.3
1,486.2
571.4
175.8
395.6
84.5
146.9
2,515.5
759.9
1,755.6
275.1
1,480.5
576.1
173.6
402.5
97.9
143.8
2,491.2
737.2
1,754.0
274.4
1,479.6
577.7
176.3
401.4
98.9
144.7
3,142.4
3,225.6
3,261.6
3,279.7
3,295.1
3336.1
3,344.2
3312.1
3,294.8
3307.9
33333
3312.5
322.7
344.0
347.6
349.9
353.3
355.1
356.2
360.8
359.0
360.2
361.4
362.3
A20
Domestic Financial Statistics • May 1996
NOTES TO TABLE 1.26
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of condition
(large domestic); other domestically chartered commercial banks (small domestic); branches
and agencies of foreign banks; New York State investment companies, and Edge Act and
agreement corporations (foreign-related institutions). Excludes international banking facilities. Data are Wednesday values, or pro rata averages of Wednesday values. Large domestic
banks constitute a universe; data for small domestic banks and foreign-related institutions are
estimates based on weekly samples and on quarter-end condition reports. Data are adjusted
for breaks caused by reclassifications of assets and liabilities.
2. Excludes federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
3. Consists of reserve repurchase agreements with broker-dealers and loans to purchase
and carry securities.
4. Consists of federal funds sold to, reverse repurchase agreements with, and loans to
commercial banks in the United States.
5. Includes vault cash, cash items in process of collection, demand balances due from
depository institutions in the United States, balances due from Federal Reserve Banks, and
other cash assets.
6. Excludes the due-from position with related foreign offices, which is included in lines
25, 53, 81, and 109.
7. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
8. Excludes the due-to position with related foreign offices, which is included in lines 25,
53, 81, and 109.
9. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis.
Weekly Reporting Commercial Banks
1.27
A21
ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars, Wednesday figures
1996
Account
Feb. 14
Feb. 21
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Feb. 7
Feb. 28
160,189
287,313
25,123
262,190
109,253
125,982
285,647
25,614
260,033
109,422
157,574
286,376
26,136
260,240
110,128
114,680
283,857
22,866
260,991
110,486
124,466
285,431
23,713
261,717
111,449r
114,156
288,919
25,041
263,877
111,233
114,434
289,779
26,625
263,154
111,554
135,342
291,741
29,457
262,284
111,866
117,264
290,002
27,636
262,366
111,686
41,356
63,494
48,088
126,712
2,022
64,916
19,036
4,473
14,563
45,880
59,774
39,877
62,864
47,870
124,219
1,693
66,311
19,036
4,455
14,581
47,275
56,216
39,562r
63,137r
47,412
125,452
1,572
66,107
19,034
4,441
14,594
47,072
57,773
38,921r
63,688r
47,896
125,849
1,579
66,067
19,038
4,442
14,596
47,029
58,202
38,288r
63,583r
48,398r
125,312
1,544
65,380
18,997
4,424
14,573
46,382
58,388
39,096
64,007
49,542
126,331
1,472
64,858
18,920
4,344
14,577
45,937
60,002
39,354
63,871
48,374
125,351
1,512
64,526
18,894
4,341
14,553
45,633
59,312
38,611
61,725
50,082
123,731
1,496
63,822
18,847
4,309
14,537
44,975
58,413
37,680
62,798
50,203
122,189
1,493
63,437
18,885
4,291
14,594
44,552
57,259
129,208
89,162
33,045
7,001
1,296,495
351,660
1,402
350,258
347,574
2,684
503,704
47,971
455,734
255,780
74,024
44,798
3,691
25,536
18,335
6,892
10,492
1,136
32,557
41,915
1,729
33,591
1,261,175
143,573
113,626
75,639
30,551
7,437
1,292,137
348,203
1,372
346,832
344,149
2,683
508,026r
47,998r
460,028
255,982r
72,530r
43,943
2,983
25,603
15,716
6,700
10,549
1,364
30,777
42,289
1,764
33,457
1,256,916
141,847
119,105
83,482
29,494
6,128
1,292,323
349,183
1,366
347,817
345,096
2,721
507,772r
48,050r
459,722
255,078r
72,985
44,792
3,108
25,085
16,165
6,594
10,554
1,196
30,364
42,431
1,732
33,455
1,257,135
142,533
110,323
73,330
30,575
6,418
1,281,905
349,477
1,404
348,073
345,327
2,746
505,832
48,019
457,813
252,221
71,046
42,887
3,701
24,458
15,425
6,579
10,713
1,182
26,975
42,455
1,736
33,288
1,246,880
138,716
110,591
74,148
29,894
6,549
1,285,560
352,561
1,318
351,242
348,472
2,770
506,327
48,000
458,327
251,132
69,537
41,267
3,153
25,117
17,495
6,522
10,606
1,159
27,530
42,691
1,735
33,277
1,250,548
142,061
99,437
62,420
28,656
8,361
1,280,238
351,278
1,409
349,868
347,086
2,782
507,327
47,882
459,445
250,113
69,070
40,599
3,263
25,207
14,857
6,485
10,513
1,154
26,597
42,847
1,721
33,400
1,245,117
138,588
109,726
69,746
32,119
7,862
1,283,005
351,669
1,450
350,218
347,443
2,776
507,318
47,922
459,396
250,065
68,847
39,487
3,209
26,151
17,063
6,460
10,547
1,228
26,522
43,286
1,770
33,471
1,247,764
141,000
104,420
67,806
29,421
7,192
1,283,551
351,919
1,495
350,424
347,652
2,772
504,417
47,781
456,635
250,181
69,881
40,410
3,655
25,816
17,445
6,408
10,458
1,140
28,321
43,382
1,770
33,348
1,248,434
139,700
107,153
70,082
29,951
7,119
1,283,655
352,951
1,465
351,485
348,669
2,816
505,117
47,985
457,132
247,835
69,468
40,573
2,788
26,107
19,657
6,532
10,553
1,281
26,754
43,509
1,778
33,276
1,248,601
141,311
2,108,169
2,048,237
2,088,176
2,020,305
2,038,409
2,012,548
2,028,054
2,043,366
2,026,520
ASSETS
1 Cash and balances due from depository institutions
2 U.S. Treasury and government securities
Trading account
i
4 Investment account
5
Mortgage-backed securities'
All others, by maturity
6
One year or less
7
One year through five years
8
More than five years
9 Other securities
10 Trading account
11 Investment account
12
State and local government, by maturity
13
One year or less
14
More than one year
Other bonds, corporate stocks, and securities
15
16 Other trading account assets
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
Federal funds sold2
To commercial banks in the United States
To nonbank brokers and dealers in securities
To others1
Other loans and leases, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and otherfinancialinstitutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other loans
Lease-financing receivables
LESS: Unearned income
Loan and lease reserve3
Other loans and leases, net
All other assets
45 Total assets
Footnotes appear on the following page.
A22
1.27
Domestic Financial Statistics • May 1996
ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued
Millions of dollars, Wednesday figures
1996
Account
Jan.
3
Jan.
10
Jan.
17
Jan.
24
Jan.
31
Feb.
7
Feb.
14
Feb.
21
Feb.
28
LIABILITIES
46 Deposits
47
Demand deposits
48
Individuals, partnerships, and corporations
49
Other holders
50
States and political subdivisions
51
U.S. government
52
Depository institutions in the United States
53
Banks in foreign countries
54
Foreign governments and official institutions
55
Certified and officers' checks
56
Transaction balances other than demand deposits4
57
Nontransaction balances
58
Individuals, partnerships, and corporations
59
Other holders
60
States and political subdivisions
61
U.S. government
62
Depository institutions in the United States
63
Foreign governments, official institutions, and banks . .
1,265,024
358,957
299,667
59,290
10,314
2,738
28,236
5,213
649
12,140
95,501
810,566
787,318
23,248
21,038
649
1,198
364
1,229,595
323,010
272,983
50,027
8,330
2,235
23,228
5,615
914
9,706
93,267
813,318
789,721
23,597
21,176
647
1,415
359
1,249,088
341,290
282,675
58,615
9,010
3,528
28,776
5,171
619
11,511
93,456
814,342
791,014
23,328
20,747
747
1,475
358
1,191,403
299,095
251,544
47,551
9,167
2,384
20,075
5,204
565
10,157
87,023
805,286
781,919
23,366
20,581
772
1,669
344
1,211,570
316,255
265,977
50,278
10,164
2,382
21,497 R
5,615
709
9,911
88,848
806,467
782,628
23,839
20,905
829
1,835
270
1,203,600
299,712
253,056
46,656
8,468
1,999
19,743
4,929
524
10,993
86,072
817,817
793,226
24,591
21,558
862
1,901
270
1,208,803
304,213
257,472
46,741
8,223
1,949
20,010
5,300
693
10,567
84,896
819,695
795,020
24,675
21,583
894
1,929
269
1,212,020
314,317
261,851
52,466
9,133
1,494
25,727
5,410
607
10,095
86,086
811,617
787,117
24,500
21,534
730
1,968
269
1,194,299
298,494
255,046
43,448
8,317
1,709
19,880
5,842
553
7,147
85,171
810,634
786,155
24,479
21,512
739
1,943
285
64
65
66
67
68
Liabilities for borrowed money5
Borrowings from Federal Reserve Banks
Treasury tax and loan notes
Other liabilities for borrowed money6
Other liabilities (including subordinated notes and debentures)...
428,120
170
5,393
422,557
222,939
413,913
0
4,444
409,469
211,286
418,726
130
10,501
408,095
226,170
406,710
0
23,060
383,650
227,098
409,504
0
21,404'
388,100'
221,315
396,891
0
3,560
393,331
215,939
406,215
0
5,233
400,981
215,868
410,656
0
5,295
405,360
223,966
410,004
0
21,228
388,776
225,510
69
Total liabilities
1,916,083
1,854,794
1,893,983
1,825,211
1,842,390
1,816,430
1,830,886
1,846,641
1,829,813
70
Residual (total assets less total liabilities)7
192,086
193,443
194,193
195,094
196,019
196,118
197,168
196,724
196,707
1,705,768
113,989
1,286
277
1,009
26,955
91,510"
1,696,047
116,464
1,246
277
970
27,812
80,395 R
1,694,982
118,011
1,237
277
960
27,364
91,158'
1,685,716
117,244
1,226
276
950
27,143
91,156 R
1,691,478
118,296
1,215
275
940
27,814
83,845
1,691,906
120,278
1,208
275
933
27,584
82,637
1,698,628
120,108
1,196
275
921
27,767
78,912
1,695,227
119,102
1,187
275
912
27,990
92,098
1,692,344
118,214
1,177
275
902
27,714
92,665
MEMO
71
72
73
74
75
76
77
Total loans and leases, gross, adjusted, plus securities8
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates9
Commercial and industrial
Other
Foreign branch credit extended to U.S. residents
Net owed to related institutions abroad
1. Includes certificates of participation, issued or guaranteed by agencies of the US.
government, in pools of residential mortgages.
2. Includes securities purchased under agreements to resell.
3. Includes allocated transfer risk reserve.
4. Includes negotiable order of withdrawal (NOWs) and automatic transfer service (ATS)
accounts, and telephone and preauthorized transfers of savings deposits.
5. Includes borrowings only from other than directly related institutions.
6. Includes federal funds purchased and securities sold under agreements to repurchase.
7. This balancing item is not intended as a measure of equity capital for use in capitaladequacy analysis.
8. Excludes loans to and federal funds transactions with commercial banks in the
United States.
9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank affiliates of
the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank
subsidiaries of the holding company.
10. Credit extended by foreign branches of domestically chartered weekly reporting banks
to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but includes
an unknown amount of credit extended to other than nonfinancial businesses.
Weekly Reporting Commercial Banks
1.28
A23
LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS
Assets and Liabilities
Millions of dollars, Wednesday figures
1996
Account
Jan. 17
Jan. 24
Jan. 31
Feb. 7
Feb. 14
Feb. 21
Feb. 28
Jan. 3
Jan. 10
18,596
18,650
18,805
19,282
18,636
17,402
18,058
16,949
16,736
42,284
40,773r
27,848
7,933
19,915
183,946r
118,Ol5r
4,655r
113,360r
107,67lr
5,689
21,759
42,760
40,854
32,484
8,993
23,491
182,012
117,610
4,753
• 112,856
107,167
5,689
21,510
42,772
43,387
31,089
8,890
22,199
181,623
118,359
4,920
113,439
107,713
5,725
21,502
42,214
43,857
29,905
8,091
21,814
180,999
118,615
5,035
113,580
107,626
5,954
21,253
42,544
46,968
27,917
7,602
20,314
181,613
118,802
5,134
113,668
107,765
5,903
21,165
46,388
44,397
28,750
6,251
22,499
181,988
120,234
5,141
115,093
109,132
5,961
21,326
46,201
44,610
31,485
6,845
24,640
184,179
120,718
5,080
115,638
109,617
6,021
21,280
46,714
43,079
25,529
4,414
21,114
184,096
120,720
5,163
115,556
109,635
5,921
21,285
49,319
43,606
31,387
7,963
23,425
185,279
120,880
5,271
115,609
109,686
5,923
21,009
30,495r
2,656r
3,209
24,629
6,807
30,330
2,618
3,235
24,478
5,267
30,089
2,387
3,003
24,699
5,033
29,737
2,630
2,844
24,262
4,732
30,063
2,444
2,819
24,800
4,888
28,888
2,341
2,907
23,640
4,891
29,382
2,791
2,781
23,809
5,781
29,575
2,381
2,703
24,491
5,850
29,673
2,413
3,050
24,210
7,027
633
4,654
40,739
650
4,957
40,274
642
4,476
38,941
643
4,491
39,981
587
4,557
40,209'
641
4,488
41,902
735
4,694
41,571
661
4,486
41,321
661
4,505
41,942
380,013r
382,644
384,586
383,607
386,917'
388,078
392,354
385,614
3%,525
102,209
4,541
3,653
888
97,668
69,031
28,637
102,853
4,556
3,809
747
98,297
69,258
29,039
101,358
4,354
3,584
770
97,004
67,936
29,067
100,494
4,134
3,118
1,015
96,360
66,080
30,280
100,709
4,483
3,416
1,067
96,226
65,759
30,466
101,265
4,280
3,289
991
96,985
66,191
30,794
100,901
4,910
3,335
1,576
95,991
64,697
31,294
99,493
4,247
3,268
980
95,246
65,020
30,226
104,173
3,887
3,166
721
100,287
68,828
31,458
74,151
48,649
10,481
38,168
25,502
4,212
21,290
59,281r
73,765
50,333
10,122
40,212
23,431
3,786
19,646
58,626
73,802
48,196
10,882
37,314
25,606
4,396
21,210
60,148
72,761
47,355
9,604
37,751
25,406
4,090
21,316
62,936
71,685
47,553
11,188
36,365
24,132
4,013
20,119
64,667r
73,162
44,921
7,831
37,090
28,240
4,119
24,122
64,812
73,791
45,700
9,046
36,654
28,091
4,479
23,612
63,753
71,983
43,012
7,648
35,365
28,971
3,864
25,107
62,228
75,816
45,012
10,198
34,814
30,803
4,304
26,500
64,960
380,013r
382,644
384,586
383,607
386,917r
388,078
392,354
385,614
396,525
284,26 l r
118,545r
286,499
121,790
287,593
121,309
286,254
120,048
288,996
120,826'
292,930
121,589
296,838
127,658
292,622
123,983
299,217
123,321
ASSETS
1 Cash and balances due from depository
institutions
2 U.S. Treasury and government agency
securities
3 Other securities
4 Federal funds sold1
5 To commercial banks in the United States
6 To others2
7 Other loans and leases, gross
8 Commercial and industrial
Bankers acceptances and commercial paper .
9
10
All other
U.S. addressees
11
12
Non-U.S. addressees
13 Loans secured by real estate
14 Loans to depository and financial
institutions
Commercial banks in the United States
15
Banks in foreign countries
16
Nonbank financial institutions
17
18 For purchasing and carrying securities
19 To foreign governments and official
institutions
20 All other
21 Other assets (claims on nonrelated parties)
22 Total assets3
LIABILITIES
23 Deposits or credit balances owed to other
than directly related institutions
24 Demand deposits4
Individuals, partnerships, and corporations . . . .
25
26 Other
27 Nontransaction accounts
Individuals, partnerships, and corporations . . . .
28
29 Other
30 Borrowings from other than directly
related institutions
31 Federal funds purchased5
32 From commercial banks in the United States ..
33 From others
34 Other liabilities for borrowed money
35 To commercial banks in the United States
36 To others
37 Other liabilities to nonrelated parties
38 Total liabilities6
MEMO
39 Total loans (gross) and securities, adjusted7
40 Net owed to related institutions abroad
1. Includes securities purchased under agreements to resell.
2. Includes transactions with nonbank brokers and dealers in securities.
3. For U.S. branches and agencies of foreign banks having a net "due from" position,
includes net due from related institutions abroad.
4. Includes other transaction deposits.
5. Includes securities sold under agreements to repurchase.
6. For U.S. branches and agencies of foreign banks having a net "due to" position,
includes net owed to related institutions abroad.
7. Excludes loans to and federal funds transactions with commercial banks in the United
States.
A24
1.32
DomesticNonfinancialStatistics • May 1996
COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
Year ending December
1996
1995'
Item
1991
1992
1994
1993
1995r
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
528,832
545,619
555,075
595,382
674,903
663,032
670,642
673,241
669,656
674,903
685,795
Financial companies'
2
Dealer-placed paper 2 , total
3
Directly placed paper 3 , total
212,999
182,463
226,456
171,605
218,947
180,389
223,038
207,701
275,815
210,828
262,969
216,238
269,636
215,179
271,299
215,982
276,223
213,574
275,815
210,828
288,367
208,164
4 Nonfinancial companies4
133,370
147,558
155,739
164,643
188,260
183,825
185,827
185,960
179,859
188,260
189,264
n.a.
n.a.
n.a.
Bankers dollar acceptances (not seasonally adjusted)5
5 Total
6
7
8
9
10
By holder
Accepting banks
Own bills
Bills bought from other banks
Federal Reserve Banks6
Foreign correspondents
Others
By basis
11 Imports into United States
12 Exports from United States
13 All other
43,770
38,194
32,348
29,835
11,017
9,347
1,670
10,555
9,097
1,458
12,421
10,707
1,714
11,783
10,462
1,321
1,739
31,014
1,276
26,364
725
19,202
410
17,642
12,843
10,351
20,577
12,209
8,096
17,890
10,217
7,293
14,838
10,062
6,355
13,417
1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales,
personal, and mortgage financing; factoring, finance leasing, and other business lending;
insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. As reported by financial companies that place their paper directly with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and
services.
n.a.
n.a.
n.a.
n.a.
5. Data on bankers dollar acceptances are gathered from approximately 100 institutions.
The reporting group is revised every January. Beginning January 1995, data for Bankers
dollar acceptances will be reported annually in September.
6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances for
its own account.
Financial Markets
1.33
PRIME RATE CHARGED BY BANKS
A25
Short-Term Business Loans1
Percent per year
Date of change
Rate
1993—Jan.
1
6.00
1994—Mar.
Apr.
May
Aug.
Nov.
24
19
17
16
15
6.25
6.75
7.25
7.75
8.50
1995—Feb. 1
July 7
Dec. 20
9.00
8.75
8.50
1996—Feb.
8.25
1
Period
Average
rate
1993
1994
1995
6.00
7.15
8.83
1993—Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
6.00
1. The prime rate is one of several base rates that banks use to price short-term business
loans. The table shows the date on which a new rate came to be the predominant one quoted
by a majority of the twenty-five largest banks by asset size, based on the most recent Call
Period
1994—Jan
Feb
Average
rate
Period
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
8.50
9.00
9.00
9.00
9.00
9.00
8.80
8.75
8.75
8.75
8.75
8.65
1996—Jan
Feb
Mar.
Apr
May
June
July
Aug
Sept
Ocl
Nov
Dec
6.00
6.00
6.06
6.45
6.99
7.25
7.25
7.51
7.75
7.75
8.15
8.50
1995—Jan
Feb
Average
rate
8.50
8.25
8.25
Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415)
monthly statistical releases. For ordering address, see inside front cover,
A26
1.35
DomesticNonfinancialStatistics • May 1996
INTEREST RATES
Money and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
1995
Item
1993
1994
1996
1996, week ending
1995
Nov.
Dec.
Jan.
Feb.
Jan. 26
Feb. 2
Feb. 9
Feb. 16
Feb. 23
MONEY MARKET INSTRUMENTS
1 Federal funds 1,2,3
2 Discount window borrowing2,4
3.02
3.00
4.21
3.60
5.83
5.21
5.80
5.25
5.60
5.25
5.56
5.24
5.22
5.00
5.44
5.25
5.53
5.21
5.21
5.00
5.09
5.00
5.17
5.00
3
4
5
Commercial papei,3,5,6
1-month
3-month
6-month
3.17
3.22
3.30
4.43
4.66
4.93
5.93
5.93
5.93
5.80
5.74
5.59
5.84
5.64
5.43
5.56
5.40
5.23
5.29
5.15
4.99
5.51
5.35
5.17
5.42
5.26
5.09
5.28
5.16
4.98
5.29
5.12
4.93
5.28
5.14
4.99
6
7
8
Finance paper, directly placed3,5,7
1-month
3-month
6-month
3.12
3.16
3.15
4.33
4.53
4.56
5.81
5.78
5.68
5.69
5.59
5.35
5.70
5.47
5.20
5.44
5.25
5.01
5.20
5.00
4.77
5.40
5.19
4.95
5.30
5.08
4.83
5.20
5.01
4.76
5.21
4.99
4.75
5.18
4.99
4.78
3.13
3.21
4.56
4.83
5.81
5.80
5.64
5.47
5.52
5.34
5.31
5.14
5.07
4.91
5.28
5.10
5.14
4.98
5.06
4.89
5.05
4.85
5.07
4.94
3.11
3.17
3.28
4.38
4.63
4.96
5.87
5.92
5.98
5.75
5.74
5.64
5.75
5.62
5.49
5.47
5.39
5.28
5.23
5.15
5.03
5.44
5.36
5.23
5.33
5.23
5.13
5.24
5.15
5.00
5.22
5.13
4.99
5.22
5.14
5.06
3.18
4.63
5.93
5.75
5.64
5.40
5.14
5.34
5.23
5.15
5.13
5.14
3.00
3.12
3.29
4.25
4.64
5.02
5.49
5.56
5.60
5.36
5.27
5.14
5.14
5.13
5.03
5.00
4.92
4.82
4.83
4.77
4.69
4.97
4.90
4.79
4.93
4.81
4.69
4.81
4.75
4.61
4.79
4.70
4.57
4.82
4.82
4.78
3.02
3.14
3.33
4.29
4.66
5.02
5.51
5.59
5.69
5.35
5.29
5.15
5.16
5.15
5.06
5.02
4.97
4.89
4.87
4.79
4.64
4.99
4.88
n.a.
5.01
4.90
n.a.
4.88
4.79
4.64
4.80
4.71
n.a.
4.78
4.75
n.a.
3.43
4.05
4.44
5.14
5.54
5.87
6.29
6.59
5.32
5.94
6.27
6.69
6.91
7.09
7.49
7.37
5.94
6.15
6.25
6.38
6.50
6.57
6.95
6.88
5.43
5.48
5.57
5.69
5.83
5.93
6.33
6.26
5.31
5.32
5.39
5.51
5.63
5.71
6.12
6.06
5.09
5.11
5.20
5.36
5.54
5.65
6.11
6.05
4.94
5.03
5.14
5.38
5.64
5.81
6.30
6.24
5.05
5.09
5.18
5.35
5.53
5.65
6.11
6.06
4.93
4.98
5.10
5.28
5.50
5.64
6.11
6.08
4.85
4.91
5.03
5.27
5.51
5.67
6.17
6.13
4.81
4.84
4.94
5.20
5.46
5.65
6.16
6.11
5.04
5.15
5.28
5.52
5.81
5.97
6.46
6.39
6.45
7.41
6.93
6.31
6.11
6.07
6.28
6.08
6.08
6.14
6.14
6.44
5.38
5.83
5.60
5.77
6.17
6.18
5.80
6.10
5.95
5.63
5.79
5.64
5.40
5.66
5.45
5.27
5.59
5.43
5.24
5.59
5.43
5.30
5.61
5.46
5.21
5.55
5.40
5.25
5,63
5.37
5.23
5.60
5.33
5.21
5.54
5.48
7.54
8.26
7.83
7.30
7.11
7.10
7.27
7.10
7.11
7.15
7.15
7.42
7.22
7.40
7.58
7.93
7.46
7.97
8.15
8.28
8.63
8.29
7.59
7.72
7.83
8.20
7.86
7.02
7.18
7.32
7.68
7.30
6.82
6.99
7.13
7.49
7.10
6.80
6.99
7.12
7.47
7.09
6.99
7.16
7.31
7.63
7.31
6.81
7.00
7.13
7.47
7.11
6.82
7.01
7.14
7.46
7.22
6.87
7.05
7.19
7.50
7.18
6.86
7.04
7.19
7.50
7.28
7.13
7.31
7.45
7.77
7.47
2.78
2.82
2.56
2.37
2.30
2.31
2.22
2.30
2.25
2.21
2.20
2.22
Bankers acceptances3,5,8
9
10
11
12
13
6-month
Certificates of deposit, secondary market3,9
1-month
3-month
6-month
14 Eurodollar deposits, 3-month 1,10
18
19
20
U.S. Treasury bills
Secondary market 3,5
3-month
6-month
1-year
Auction average 3,5, ''
3-month
6-month
1-year
21
22
23
24
25
2b
27
28
Constant maturities'2
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
15
16
17
U . S . TREASURY NOTES AND BONDS
Composite
29 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
Moody's series13
30
31 Baa
32 Bond Buyer series14
CORPORATE BONDS
33 Seasoned issues, all industries15
34
35
36
37
38
Rating group
Aaa
Aa
A
Baa
A-rated, recently offered utility bonds16
MEMO
Dividend-price ratio17
39 Common stocks
1. The daily effective federal funds rate is a weighted average of rates on trades through
New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday of the
current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year for bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. An average of offering rates on commercial paper placed by several leading dealers for
firms whose bond rating is AA or the equivalent.
7. An average of offering rates on paper directly placed by finance companies.
8. Representative closing yields for acceptances of the highest-rated money center banks.
9. An average of dealer offering rates on nationally traded certificates of deposit.
10. Bid rates for Eurodollar deposits at approximately 11:00 a.m. London time. Data are
for indication purposes only.
11. Auction date for daily data; weekly and monthly averages computed on an issue-date
basis.
12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Department of the Treasury.
13. General obligation bonds based on Thursday figures; Moody's Investors Service.
14. State and local government general obligation bonds maturing in twenty years are used
in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys'
A1 rating. Based on Thursday figures.
15. Daily figures from Moody's Investors Service. Based on yields to maturity on selected
long-term bonds.
16. Compilation of the Federal Reserve. This series is an estimate of the yield on recently
offered, A-rated utility bonds with a thirty-year maturity and five years of call protection.
Weekly data are based on Friday quotations.
17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in
the price index.
NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and
G.13 (415) monthly statistical releases. For ordering address, see inside front cover.
Financial Markets
1.36
STOCK MARKET
A27
Selected Statistics
1995
Indicator
1993
1994
1996
1995
June
Aug.
July
Sept.
Nov.
Oct.
Dec.
Jan.
Feb.
Prices and trading volume (averages of daily figures)
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
4
Utility
5
Finance
249.71
300.10
242.68
114.55
216.55
254.16
315.32
247.17
104.96
209.75
291.18
367.40
270.14
114.61
238.48
289.52
366.75
256.80
108.12
236.26
298.18
379.13
279.15
109.59
240.49
300.05
379.79
285.63
111.06
245.27
310.41
390.42
295.54
114.67
260.72
311.78
389.63
291.16
123.59
265.12
317.58
398.66
300.06
119.49
266.12
327.90
412.11
303.53
173.95
273.36
329.22
413.05
300.43
127.09
274.96
346.46
435.92
315.29
135.51
290.97
6 Standard & Poor's Corporation
(1941-43 = 10)'
451.63
460.42
541.72
539.35
557.37
559.11
578.77
582.92
595.53
614.57
614.42
649.54
7 American Stock Exchange
(Aug. 31, 1973 = 50)2
438.77
449.49
498.13
492.60
513.25
526.86
547.64
530.26
529.93
538.01
540.48
562.34
263,374
18,188
290,652
17,951
345,729
20,387
345,547
24,622
363,780
23,283
309,879
21,825
352,184
25,422
365,108
17,865
360,199
16,724
384,310
21,085
416,048
21,069
434,607
27,107
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers 3
60,310
61,160
76,680
66,340
67,600
71,440
77,076
75,005
77,875
76,680
73,530
77,090
Free credit balances at brokers4
11 Margin accounts5
12 Cash accounts
12,360
27,715
14,095
28,870
16,250
34,340
13,710
29,860
13,830
28,600
13,900
29,190
14,806
29,796
14,753
29,908
15,590
30,340
16,250
34,340
14,950
32,465
15,840
34,700
Margin requirements (percent of market value and effective date)6
Mar. 11, 1968
13 Margin stocks
14 Convertible bonds
15 Short sales
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. In July 1976 a financial group, composed of banks and insurance companies, was added
to the group of stocks on which the index is based. The index is now based on 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and
40 financial.
2. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has
included credit extended against stocks, convertible bonds, stocks acquired through the
exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds, and subscription issues was discontinued in
April 1984.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.
5. Series initiated in June 1984.
6. Margin requirements, stated in regulations adopted by the Board of Governors pursuant
to the Securities Exchange Act of 1934, limit the amount of credit that can be used to
purchase and carry "margin securities" (as defined in the regulations) when such credit is
Jan. 3, 1974
50
50
50
collateralized by securities. Margin requirements on securities other than options are the
difference between the market value (100 percent) and the maximum loan value of collateral
as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U,
effective May 1, 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective
Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the
initial margin required for writing options on securities, setting it at 30 percent of the current
market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the
required initial margin, allowing it to be the same as the option maintenance margin required
by the appropriate exchange or self-regulatory organization; such maintenance margin rules
must be approved by the Securities and Exchange Commission. Effective Jan. 31, 1986, the
SEC approved new maintenance margin rules, permitting margins to be the price of the option
plus 15 percent of the market value of the stock underlying the option.
Effective June 8, 1988, margins were set to be the price of the option plus 20 percent of the
market value of the stock underlying the option (or 15 percent in the case of stock-index
options).
A28
Domestic Financial Statistics • May 1996
1.38
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Fiscal year
1995
Type of account or operation
1993
1994r
1996
1995'
Sept.
U.S. budget1
1 Receipts, total
2
On-budget
3
Off-budget
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus or deficit ( - ) , total
8
On-budget
9
Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase (—))
12 Other 2
Oct.
Nov.
Dec.
Jan.
Feb.
1,153,535'
841,60r
311,934
1,408,205'
1,141,618'
266,587
-255,670'
-300,017'
45,347
1,257,745
922,719
335,026
1,460,914
1,181,542
279,372
-203,169
258,823
55,654
1,355,213
1,004,134
351,079
1,519,133
1,230,469
288,664
-163,920
-226,335
62,415
143,219
112,510
30,709
135,972'
119,796'
30,835'
7,247'
7,412
-126
95,593
72,200
23,393
118,352
92,151
26,200
-22,758
-19,951
-2,807
90,008
63,651
26,357
128,458
101,767
26,691
-38,450
-38,116
-334
138,271
110,322
27,949
132,984
121,753
11,232
5.286
-11,431
16,717
142,922
110,615
32,307
123,647
98,057
25,591
19,274
12,558
6,716
89,349
60,912
28,437
133,644
105,711
27,933
-44.295
-44,799
504
248,594
6,283
429
184,998
16,564
1,540
171,288
-2,007
-5,468
-6,618
-19,820
19,191'
13,353
16,755
-7,350
38,339
-4,911
5,022
-18,358
5,610
7,462
-4,747
-16,959
2,432
47,022
6,297
-9,024
52,506
17,289
35,217
35,942
6,848
29,094
37,949
8,620
29,329
37,949
8,620
29,329
21,194
7,018
14,176
26,105
5,703
20,402
20,495
5,979
14,515
37,454
8,210
29,243
31,157
5,632
25,525
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
15
Tax and loan accounts
1. Since 1990, off-budget items have been the social security trust funds (federal old-age
survivors insurance and federal disability insurance) and the U.S. Postal Service.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the
International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets;
accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous
liability (including checks outstanding) and asset accounts; seigniorage; increment on gold;
net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loanvaluation adjustment; and profit on sale of gold.
SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management
and Budget, Budget of the U.S. Government.
Federal Finance
1.39
A29
U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Calendar year
Fiscal year
1994
Source or type
1994
1996
1995
1995
1995
HI
H2
HI
H2
Dec.
Jan.
Feb.
RECEIPTS
1,257,737
1 All sources
2 Individual income taxes, net
3
Withheld
4
Presidential Election Campaign Fund
5
Nonwithheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions, net . . .
10
Employment taxes and contributions2
11
Self-employment taxes and contributions3 .
12
Unemployment insurance
13
Other net receipts4
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts5
1,355,213
652,234
625,557
710,542
656,400
138,271
142,922
89,349
543,055
459,699
70
160,047
76,761
590,244
499,927
69
175,786
85,538
275,052
225,387
63
117,937
68,325
273,474
240,062
10
42,031
9,207
307,498
251,398
58
132,006
75,958
292,393
256,918
9
43,100
10,058
53,179
50,597
0
3,227
646
86,192
55,351
1
31,159
319
40,327
46,722
7
3,163
9,565
154,205
13,820
461,475
428,810
24,433
28,004
4,661
174,422
17,418
484,473
451,045
27,127
28,878
4,550
80,536
6,933
248,301
228,714
20,762
17,301
2,284
78,392
7,331
220,141
206,613
4,135
11,177
2,349
92,132
10,399
261,837
228,663
23,429
18,001
2,267
88,302
7,518
224,269
211,323
3,557
10,702
2,247
38,954
932
37,762
37,123
333
223
416
6,381
1,223
42,197
40,742
2,188
1,081
374
3,797
2,105
38,960
36,011
278
2,546
403
55,225
20,099
15,225
22,274
57,484
19,301
14,763
31,944
26,444
9,500
8,197
11,170
30,062
11,042
7,071
13,305
27,452
8,847
7,424
15,749
30,014
9,849
7,718
11,374
4,870
1,439
1,383
1,618
4,241
1,482
1,288
2,364
4,308
1,456
1,090
1,517
1,460,841
1,519,133
710,620
752,151
760,824
752,505
OUTLAYS
18 All types
132,984
123,647
133,644
r
25,376
431
1,274
-163
1,711
708
20,243
1,089
1,536
115
1,869
336
21,691
2,604
1,326
54
1,817
345
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
281,642
17,083
16,227
5,219
21,064
15,046
272,066
16,434
16,724
4,936
22,105
9,773
133,844
5,800
8,502
2,237
10,111
7,451
141,885
11,889
7,604
2,923
11,911
7,623
135,862
4,791r
8,611
2,358
10,273
4,040
132,954
6,994
8,810
2,203
12,633
3,062
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
-5,118
38,066
10,454
-14,441
39,350
10,641
-4,962
16,739
4,571
-4,270
21,835
6,283
- 13,936r
18,193r
4,858r
-4,412
19,931
6,085
-451
3,117
912
-2,014
3,094
1,009
-1,024
2,960
396
46,307
54,263
19,262
27,450
25,738
24,820
3,623
5,418
4,498
29 Health
30 Social security and Medicare
31 Income security
107,122
464,312
214,031
115,418
495,701
220,449
53,195
232,777
109,080
54,147
236,817
101,806
58,759
251,975
117,638r
57,013
251,387
104,214
8,567
43,299
19,738
8,665
42,786
17,188
9,542
42,950
23,812
32
33
34
35
36
37,642
15,256
11,303
202,957
-37,772
37,938
16,223
13,835
232,173
-44,455
16,686
7,718
5,084
99,844
-17,308
19,761
7,753
7,355
109,434
-20,066
19,267r
8,062
5,798r
116,170
-17,632
18,684
8,113
7,623
119,350
-26,994
4,435
1,233
1,924
19,934
-2,683
2,165
1,806
391
20,765
-2,812
2,901
1,281
1,575
19,771
-2,855
Veterans benefits and services
Administration of justice
General government
Net interest6
Undistributed offsetting receipts7
1. Functional details do not sum to total outlays for calendar year data because revisions to
monthly totals have not been distributed among functions. Fiscal year total for receipts and
outlays do not correspond to calendar year data because revisions from the Budget have not
been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Includes interest received by trust funds.
7. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCE. Fiscal year totals: U.S. Department of the Treasury, Monthly Treasury Statement
of Receipts and Outlays of the U.S. Government-, monthly and half-year totals: U.S. Office of
Management and Budget, Budget of the U.S. Government, Fiscal Year 1997.
A30
DomesticNonfinancialStatistics • May 1996
1.40
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1993
1994
1995
Item
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
1 Federal debt outstanding
4,562
4,602
4,673
4,721
4,827
4,891
4,978
5,001
5,017
2 Public debt securities
3
Held by public
4
Held by agencies
4,536
3,382
1,154
4,576
3,434
1,142
4,646
3,443
1,203
4,693
3,480
1,213
4,800
3,543
1,257
4,864
3,610
1,255
4,951
3,635
1,317
4,974
3,653
1,321
4,989
n.a.
n.a.
27
27
0
26
26
0
28
27
0
29
29
0
27
27
0
27
26
0
27
27
0
27
27
0
28
n.a.
n.a.
4,446
4,491
4,559
4,605
4,711
4,775
4,861
4,885
4,900
4,445
0
4,491
0
4,559
0
4,605
0
4,711
0
4,774
0
4,861
0
4,885
0
4,900
0
4,900
4,900
4,900
4,900
4,900
4,900
4,900
4,900
4,900
5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt'
MEMO
11 Statutory debt limit
1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District of Columbia stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. U.S. Department of the Treasury, Monthly Statement of the Public Debt of the
United States and Treasury Bulletin.
Types and Ownership
Billions of dollars, end of period
1995
Type and holder
1992
1993
1994
1995
QI
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
gross public debt
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Nonmarketable1
State and local government series
Foreign issues2
Government
Public
Savings bonds and notes
Government account series3
Non-interest-bearing
By holder4
15 U.S. Treasury and other federal agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18
Commercial banks
19
Money market funds
20
Insurance companies
21
Other companies
22
State and local treasuries
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international5
26
Other miscellaneous investors6
Q3
Q4
4,177.0
4,535.7
4,800.2
4,988.7
4,864.1
4,951.4
4,974.0
4,988.7
4,173.9
2,754.1
657.7
1,608.9
472.5
1,419.8
153.5
37.4
37.4
.0
155.0
1,043.5
3.1
4,532.3
2,989.5
714.6
1,764.0
495.9
1,542.9
149.5
43.5
43.5
.0
169.4
1,150.0
3.4
4,769.2
3,126.0
733.8
1,867.0
510.3
1,643.1
132.6
42.5
42.5
.0
177.8
1,259.8
31.0
4,964.4
3,307.2
760.7
2,010.3
521.2
1,657.2
104.5
40.8
40.8
.0
181.9
1,299.6
24.3
4,860.5
3,227.3
756.5
1,938.2
517.7
1,633.2
122.9
41.8
41.8
.0
178.8
1,259.2
3.6
4,947.8
3,252.6
748.3
1,974.7
514.7
1,695.2
121.2
41.4
41.4
.0
1,322.0
3.6
4,950.6
3,260.5
742.5
1,980.3
522.6
1,690.2
113.4
41.0
41.0
.0
181.2
1,324.3
23.3
4,964.4
3,307.2
760.7
2,010.3
521.2
1,657.2
104.5
40.8
40.8
.0
181.9
1,299.6
24.3
1,047.8
302.5
2,839.9
294.4
79.7
197.5
192.5
476.7
1,153.5
334.2
3,047.7
322.2
80.8
234.5
213.0
508.9
1,257.1
374.1
3,168.0
290.6
67.6
242.8
226.5
440.8
1,254.7
369.3
3,239.2
307.5
67.7
249.2
230.3
402.7
1,316.6
389.0
3,245.0
297.7
58.7
253.5
227.7
375.8
1,320.8
374.1
3,279.5
295.0
64.2
255.0
224.1
370.0
157.3
131.9
549.7
760.2
171.9
137.9
623.0
755.4
180.5
150.7
688.6
879.9
181.4
161.4
729.0
910.0
182.6
161.6
784.1
903.4
183.5
162.4
847.8
877.5
1. Includes (not shown separately) securities issued to the Rural Electrification Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. Nonmarketable series denominated in dollars, and series denominated in foreign currency held by foreigners.
3. Held almost entirely by U.S. Treasury and other federal agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual
holdings; data for other groups are Treasury estimates.
Q2
n.a.
180.1
n.a.
5. Consists of investments of foreign balances and international accounts in the United
States.
6. Includes savings and loan associations, nonprofit institutions, credit unions, mutual
savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury
deposit accounts, and federally sponsored agencies.
SOURCES. U.S. Treasury Department, data by type of security, Monthly Statement of the
Public Debt of the United States; data by holder, Treasury Bulletin.
Federal Finance
1.42
U.S. GOVERNMENT SECURITIES DEALERS
A31
Transactions1
Millions of dollars, daily averages
1996
1995
1996, week ending
Item
Nov.
OUTRIGHT TRANSACTIONS
1
2
3
4
5
By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
9
U.S. Treasury
10
Federal agency
11
Mortgage-backed
6
7
8
Dec.
Jan.
Jan. 3
Jan. 10
57,014
94,461
50,029
26,013
34,071
54,313
53,618
47,601
52,037
50,869
56,486
56,939
66,365
56,382
63,493
75,724
84,303
43,615
26,368
33,205
103,365
54,608
27,947
37,009
62,937
36,055
28,180
18,185
80,614
53,920
26,535
53,361
100,864
54,687
28,897
46,897
126,171
59,142
29,975
28,581
121,484
58,119
26,477
28,703
124,315
69,703
26,486
49,268
97,119
71,497
26,419
47,660
139,440
71,386
27,570
34,847
149,129
61,941
26,578
30,067
114,669
775
12,428
104,651
672
12,863
123,512
954
12,634
82,108
623
6,594
109,151
631
16,778
119,761
750
16,481
141,748
1,328
10,475
139,201
1,200
9,989
148,974
1,367
16,433
129,505
1,377
17,213
155,082
945
14,038
164,587
799
10,950
86,835
25,238
21,643
77,580
25,696
20,342
88,079
26,993
24,375
64,485
27,557
11,591
77,421
25,904
36,584
86,659
28,147
30,416
100,050
28,647
18,107
97,341
25,278
18,714
111,408
25,119
32,835
95,493
25,041
30,447
119,236
26,625
20,809
122,206
25,779
19,117
764
603
451r
294
459
297
2,154
14,536
0
0
2,045
12,577
0
0
1,592
14,331
0
0
1,715
9,722
0
0
1,159
15,565
0
0
1,344
14,384
0
0
Jan. 17
Jan. 24
Jan. 31
Feb. 7
Feb. 14
Feb. 21
Feb. 28
2
FUTURES TRANSACTIONS 3
12
13
14
15
16
By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
405
2,254
14,646
0
0
675
1,513
14,583
0
0
203
358
524
305
1,206
14,504
0
0
1,153
15,602
0
0
3,664
23,229
0
0
3,186
17,566
0
0
OPTIONS TRANSACTIONS 4
17
18
19
20
21
By type of underlying security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
1,655
4,668
0
1,099
1,098
3,898
0
862
1,860
4,109
0
860
928
2,828
0
954
1,472
3,853
0
989
2,793
3,832
0
919
2,046
4,862
0
821
1,688
4,345
0
685
1,544
4,066
0
972
2,513
3,874
0
1,159
2,614
7,542
0
2,476
3,918
3,653
0
909
1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Monthly averages are based on the number of trading days in the month.
Transactions are assumed evenly distributed among the trading days of the report week.
Immediate, forward, and futures transactions are reported at principal value, which does not
include accrued interest; options transactions are reported at the face value of the underlying
securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Outright transactions include immediate and forward transactions. Immediate delivery
refers to purchases or sales of securities (other than mortgage-backed federal agency securities) for which delivery is scheduled in five business days or less and "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.
Major changes in the report form filed by primary dealers induced a break in the dealer data
series as of the week ending July 6, 1994.
A32
1.43
DomesticNonfinancialStatistics • May 1996
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Millions of dollars
1995
Nov.
1996
Dec.
1996, week ending
Jan.
Jan. 3
Jan. 10
Jan. 17
Jan. 24
Jan. 31
Feb. 7
Feb. 14
Feb. 21
Positions2
NET OUTRIGHT POSITIONS 3
1
2
3
4
5
By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
11,391
16,960
9,173
7,601
14,302
14,043
6,551
2,468
7,984
7,984
1,932
12,423
-9,732
21,768
35,869
21,659
-11,698
22,446
39,509
21,332
-14,408
23,115
38,362
23,756
-12,069
25,356
39,621
18,612
-11,958
24,789
37,124
17,387
-14,101
24,991
37,785
25,287
-15,848
23,637
40,213
23,003
-16,726
18,084
37,788
20,116
-12,740
25,297
38,760
10,734
-8,641
23,052
41,553
8,146
-14,695
21,080
39,944
-5,175
-2,484
-2,787
-2,393
-3,001
-3,147
-2,505
-2,663
-2,901
-2,652
-2,882
-4,508
-17,358
0
0
-4,338
-17,662
0
0
-2,534
-12,781
0
0
-4,351
-14,745
0
0
-3,176
-10,127
0
0
-3,158
-13,600
0
0
-1,144
-14,908
0
0
-1,878
-11,649
0
0
-2,375
-10,968
0
0
-2,704
-16,809
0
0
1,241
-5,373
0
0
NET FUTURES POSITIONS 4
6
7
8
9
10
By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
NET OPTIONS POSITIONS
11
12
13
14
15
By type of deliverable security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Federal agency
Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
479
3,629
0
1,199
-1,439
7,216
0
-90
-931
7,488
0
638
-1,058
8,742
0
608
-1,443
4,819
0
1,219
-145
8,255
0
209
-273
8,121
0
498
-1,808
8,221
0
640
-1,829
6,682
0
1,686
-850
7,324
0
1,777
1,112
-2,341
0
3,410
Financing5
Reverse repurchase agreements
16 Overnight and continuing
17 Term
249,011
404,181
240,460
389,626
258,137
405,768
247,477
368,655
248,451
396,047
253,892
403,107
243,761
446,293
291,013
393,531
261,033
450,293
272,198
464,098
269,437
381,535
Securities borrowed
18 Overnight and continuing
19 Term
152,800
64,611
154,078
62,835
171,843
59,920
164,769
58,637
175,912
60,169
173,330
59,834
168,665
60,040
172,495
60,188
164,331
65,626
159,871
64,365
171,620
64,703
2,005
56
4,132
69
3,114
53
4,712
28
5,002
39
2,461
79
2,286
47
2,022
58
1,577
315
1,658
68
2,117
77
Repurchase agreements
22 Overnight and continuing
23 Term
522,501
370,772
535,088
355,266
553,719
368,819
533,654
340,117
556,821
351,104
549,853
366,579
543,788
405,734
573,013
364,158
557,489
412,886
566,822
434,282
572,853
342,983
Securities loaned
24 Overnight and continuing
25 Term
6,001
2,794
5,543
1,916
5,566
1,578
6,051
1,479
6,155
1,657
5,524
1,534
5,678
1,564
4,699
1,600
4,401
1,780
4,129
2,670
5,052
2,655
Securities pledged
26 Overnight and continuing
27 Term
28,087
4,577
34,010
5,518
34,769
5,597
35,559
4,892
35,999
5,250
34,854
5,301
33,846
5,488
34,040
6,650
32,277
6,906
29,935
6,547
35,183
7,299
Collateralized loans
28 Overnight and continuing
29 Term
30 Total
17,639
2,092
n.a.
12,694
1,989
n.a.
n.a.
n.a.
17,606
n.a.
n.a.
14,310
n.a.
n.a.
18,617
n.a.
n.a.
20,973
n.a.
n.a.
15,856
17,275
n.a.
n.a.
18,124
n.a.
n.a.
14,891
n.a.
n.a.
12,828
MEMO: Matched book6
Securities in
31 Overnight and continuing
32 Term
244,861
401,682
240,188
391,284
264,459
403,403
255,769
367,770
258,116
397,677
271,371
401,084
253,080
441,503
278,995
388,620
257,499
449,324
266,238
460,794
251,446
388,695
Securities out
33 Overnight and continuing
34 Term
313,847
318,594
311,005
309,089
334,864
318,147
310,539
296,576
339,072
304,557
328,967
321,064
330,979
347,962
350,865
308,250
338,919
354,223
341,946
372,456
341,216
287,026
Securities received as pledge
20 Overnight and continuing
21 Term
n.a.
1. Data for positions and financing are obtained from reports submitted to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar
days of the report week are assumed to be constant. Monthly averages are based on the
number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net outright positions include immediate and forward positions. Net immediate positions include securities purchased or sold (other than mortgage-backed agency securities) that
have been delivered or are scheduled to be delivered in five business days or less and
"when-issued" securities that settle on the issue date of offering. Net immediate positions for
mortgage-backed agency securities include securities purchased or sold that have been
delivered or are scheduled to be delivered in thirty business days or less.
Forward positions reflect agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
n.a.
4. Futures positions reflect standardized agreements arranged on an exchange. All futures
positions are included regardless of time to delivery.
5. Overnight financing refers to agreements made on one business day that mature on the
next business day; continuing contracts are agreements that remain in effect for more than one
business day but have no specific maturity and can be terminated without advance notice by
either party; term agreements have a fixed maturity of more than one business day. Financing
data are reported in terms of actual funds paid or received, including accrued interest.
6. Matched-book data reflect financial intermediation activity in which the borrowing and
lending transactions are matched. Matched-book data are included in the financing breakdowns given above. The reverse repurchase and repurchase numbers are not always equal
because of the "matching" of securities of different values or different types of collateralization.
NOTE, "n.a." indicates that data are not published because of insufficient activity.
Major changes in the report form filed by primary dealers induced a break in the dealer data
series as of the week ending July 6, 1994.
Federal Finance
1.44
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A3 3
Debt Outstanding
Millions of dollars, end of period
1995
Agency
1991
1992
1993
1994
Aug.
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department1
4
Export-Import Bank 2 ' 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
10 Federally sponsored agencies7
11
Federal Home Loan Banks
12
Federal Home Loan Mortgage Corporation
13
Federal National Mortgage Association
14
Farm Credit Banks8
15
Student Loan Marketing Association 9
16
Financing Corporation10
17
Farm Credit Financial Assistance Corporation"
18
Resolution Funding Corporation12
Sept.
442,772
483,970
570,711
738,928
801,819
811,182
41,035
7
9,809
397
41,829
7
7,208
374
45,193
6
5,315
255
39,186
6
3,455
116
39,581
6
2,652
83
38,030
6
2,512
87
Oct.
Nov.
Dec.
n.a.
n.a.
n.a.
38,237 R
6
2,512
88
39,207
6
2,512
93
37,346
6
2,049
97
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
8,421
22,401
10,660
23,580
9,732
29,885
8,073
27,536
8,615
28,225
7,265
28,160
7,265
28,366
7,265
29,331
5,765
29,429
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
401,737
107,543
30,262
133,937
52,199
38,319
8,170
1,261
29,996
442,141
114,733
29,631
166,300
51,910
39,650
8,170
1,261
29,996
523,452
139,512
49,993
201,112
53,123
39,784
8,170
1,261
29,996
699,742
205,817
93,279
257,230
53,175
50,335
8,170
1,261
29,996
762,238
228,299
112,341
275,271
54,979
51,323
8,170
1,261
29,996
773,152
236,851
111,610
277,192
55,800
51,672
8,170
1,261
29,996
n.a.
n.a.
n.a.
234,192
115,626
280,582
56,529
51,906
8,170
1,261
29,996
239,034
115,603
289,768
56,694
50,535
8,170
1,261
29,996
243,194
119,961
299,174
57,379
47,529
8,170
1,261
29,996
185,576
154,994
128,187
103,817
86,776
84,297
82,622
81,693
78,681
9,803
8,201
4,820
10,725
7,202
10,440
4,790
6,975
5,309
9,732
4,760
6,325
MEMO
19 Federal Financing Bank debt 13
20
21
22
23
24
Lending to federal and federally sponsored agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6
3,449
8,073
2,646
8,615
2,506
7,265
2,506
7,265
2,506
7,265
2,043
5,765
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
3,200
3,200
3,200
3,200
3,200
3,200
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
48,534
18,562
84,931
42,979
18,172
64,436
38,619
17,578
45,864
33,719
17,392
37,984
27,384
17,276
27,655
26,845
17,276
27,205
26,210
17,045
26,396
21,015
17,141
30,566
21,015
17,144
29,514
14
Other lending
25 Farmers Home Administration
26 Rural Electrification Administration
27 Other
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.
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.
A34
1.45
DomesticNonfinancialStatistics • May 1996
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1995r
Type of issue or issuer,
or use
1994
1993
1996
1995r
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
1 All issues, new and refunding1
279,945
153,950
147,067
12,110
13,126
9,750
13,898
16,839
16,978
ll,340 r
11,598
By type of issue
2 General obligation
3 Revenue
90,599
189,346
54,404
99,546
55,963
88,826
4,466
7,644
4,592
8,534
3,482
6,268
6,184
7,714
6,194
10,645
5,489
11,489
2,652
8,688
2,063
9,535
By type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township
27,999
178,714
73,232
19,186
95,896
38,868
14,762
92,797
37,230
818
9,314
1,978
609
8,089
4,428
1,510
5,807
2,433
1,825
8,155
3,918
1,491
10,736
4,612
951
11,678
4,349
1,630
6,909
2,801
695
7,820
3,083
91,434
105,972
100,941
8,929
6,364
6,095
7,868
11,415
11,070
6,399
6,383
16,831
9,167
12,014
13,837
6,862
32,723
21,267
10,836
10,192
20,289
8,161
35,227
24,926
11,887
10,125
19,502
6,566
27,935
2,598
1,120
623
1,335
612
2,640
1,227
870
690
1,391
256
1,930
1,474
447
569
1,140
654
1,811
1,785
367
1,780
1,716
227
1,993
3,377
1,469
554
2,177
650
3,188
2,968
1,178
1,664
1,614
1,325
2,321
2,010
566
422
930
316
2,155
2,226
359
582
904
110
2,202
Company
beginning
January
1993;
7 Issues for new capital
8
9
10
11
12
13
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
NEW SECURITY ISSUES
SOURCES. Securities Data
Dealer's Digest before then.
Investment
U.S. Corporations
Millions of dollars
1995
Type of issue, offering,
or issuer
1993
1994
June
1 AH issues'
2 Bonds
2
By type of offering
3 Public, domestic
4 Private placement, domestic3
5 Sold abroad
6
7
8
9
10
11
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
12 Stocks2
By type of offering
13 Public preferred
14 Common
15 Private placement3
16
17
18
19
20
21
By industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
July
57,054
36,621r
50,163r
n.a.
49,293
31,955
r
r
Aug.
Sept.
Oct.'
Nov.'
57,258r
52,098
55,336
40,121
43,192
49,905r
43,452
47,568
34,619
38,500
Dec.'
Jan.
769,088
583,216r
646,634
498,018
r
487,029
121,226
38,379
365,198r
76,065r
56,755r
408,806'
n.a.
76,910'
43,106
n.a.
6,186
25,617
n.a.
6,337'
34,490'
n.a.
9,421'
43,137
n.a.
6,768'
36,692
n.a.
6,760
43,336
n.a.
4,232
32,219
n.a.
2,399
30,000
n.a.
8,500
88,160
58,559
10,816
56,330
31,950
400,820
43,423
40,735'
6,867
13,298
13,340
379,834
42,950'
37,139'
5,727
11,974'
18,158
369,769'
6,808
4,528
657
2,675
1,745
32,880
4,456
1,403
10
540
1,520
24,026'
4,082'
2,480
133
640
1,240
35,335'
3,284
2,607
908
911
2,829
39,365'
3,397
3,532
187
1,241
2,389
32,706
4,017
4,178
225
485
3,333
35,330
3,205
3,099
1,240
685
648
25,742
4,566
1,643
764
2,129
848
28,550
122,454
85,155
n a.
7,761
4,666r
6,252
7,353r
8,646
7,768
5,502
4,692
18,897
82,657
20,900
12,570r
47,828
24,800
10,964'
57,750'
742
7,019
n.a.
768
3,898
n.a.
1,261
5,005
n.a.
1,035
6,318'
n.a.
836
7,810
n.a.
2,210
5,558
n.a.
890
4,612
n.a.
2,167
2,525
n.a.
22,271
25,761
2,237
7,050
3,439
61,004
17,798
15,713
2,203
2,214
494
46,733
2,345
2,749
0
209
0
2,458
1,306
2,031
0
133
64
1,132
n.a.'
1,541
87
91
0
2,273
2,389'
2,791'
32'
190
47
1,905'
1,801
4,628
39
60
0
2,118
2,200
2,969
97
336
0
2,166
678
2,631
148
322
0
1,724
388
2,370
38
114
200
1,582
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, equities sold abroad, and Yankee bonds. Stock data include
ownership securities issued by limited partnerships.
1996
1995
43,911
2. Monthly data cover only public offerings.
3. Monthly data are not available.
SOURCES. Beginning July 1993, Securities Data Company and the Board of Governors of
the Federal Reserve System.
Securities Market and Corporate Finance
1.47
OPEN-END INVESTMENT COMPANIES
A35
Net Sales and Assets1
Millions of dollars
1996
1995
Item
1993
1994
June
July
Aug.
Sept.
Oct.
Nov.
Dec.r
Jan.
1 Sales of own shares'
851,885
841,286
74,749
76,081
72,113
68,694
72,730
70,499
94,719
112,332
2 Redemptions of own shares
3 Net sales3
567,881
284,004
699,823
141,463
61,932
12,817
56,344
19,736
57,610
14,503
54,473
14,221
56,174
16,556
52,727
17,772
67,945
26,774
75,354
36,978
4 Assets4
1,510,209
1,550,490
1,808,753
1,880,754
1,908,525
1,962,817
1,963,496
2,032,958
2,067,337
2,143,185
5 Cash5
6 Other
100,209
1,409,838
121,296
1,429,195
122,461
1,686,292
126,340
1,754,415
127,173
1,781,352
127,446
1,835,371
133,653
1,829,843
141,489
1,891,470
142,572
1,924,765
150,772
1,992,414
1. Data on sales and redemptions exclude money market mutual funds but include
limited-maturity municipal bond funds. Data on asset positions exclude both money market
mutual funds and limited-maturity municipal bond funds.
2. Includes reinvestment of net income dividends. Excludes reinvestment of capital gains
distributions and share issue of conversions from one fund to another in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out of money
market mutual funds within the same fund family.
1.48
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership, which
comprises substantially all open-end investment companies registered with the Securities and
Exchange Commission. Data reflect underwritings of newly formed companies after their
initial offering of securities.
CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1994
Account
1993
1994
1995
1995
Qi
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits-tax liability
4 Profits after taxes
5 Dividends
6 Undistributed profits
7 Inventory valuation
8 Capital consumption adjustment
Q3
Q4
Qi
Q2
Q3
Q4
464.5
464.3
163.8
300.5
197.3
103.3
526.5
528.2
195.3
332.9
211.0
121.9
n.a.
n.a.
n.a.
n.a.
227.4
n.a.
455.9
471.7
171.4
300.3
204.4
95.9
531.5
523.2
192.8
330.4
208.8
121.7
549.8
547.5
203.4
344.1
212.5
131.6
568.9
570.4
213.5
356.8
218.5
138.3
559.6
594.1
217.3
376.8
221.7
155.1
561.1
588.4
214.2
374.1
224.6
149.6
614.9
609.6
224.5
385.1
228.5
156.6
n.a.
n.a.
n.a.
n.a.
234.7
n.a.
-6.6
6.7
-13.3
11.6
-27.6
15.9
-3.9
-11.8
-9.8
18.1
-16.5
18.8
-22.8
21.3
-51.9
17.4
-42.3
15.0
-9.3
14.6
-6.8
16.5
SOURCE. U.S. Department of Commerce, Survey of Current Business.
Q2
A36
1.51
DomesticNonfinancialStatistics • May 1996
DOMESTIC FINANCE COMPANIES
Assets and Liabilities'
Billions of dollars, end of period; not seasonally adjusted
1994
Account
1992
1993
1995
1994
Ql
Q2
Q3
Q4
QL
Q2
Q3
ASSETS
1 Accounts receivable, gross2
2
Consumer
3
Business
4
Real estate
491.8
118.3
301.3
72.2
482.8
116.5
294.6
71.7
551.0
134.8
337.6
78.5
494.5
120.1
302.3
72.1
511.3
124.3
313.2
73.8
524.1
130.3
317.2
76.6
551.0
134.8
337.6
78.5
568.5
135.8
351.9
80.8
586.9
141.7
361.8
83.4
594.7
146.2
362.4
86.1
53.2
16.2
50.7
11.2
55.0
12.4
51.2
11.6
51.9
12.1
51.1
12.1
55.0
12.4
58.9
12.9
62.1
13.7
61.2
13.8
7 Accounts receivable, net
8 All other
422.4
142.5
420.9
170.9
483.5
183.4
431.7
171.2
447.3
174.6
460.9
177.2
483.5
183.4
496.7
194.6
511.1
198.1
519.7
198.1
9 Total assets
564.9
591.8
666.9
602.9
621.9
638.1
666.9
691.4
709.2
717.8
37.6
156.4
25.3
159.2
21.2
184.6
24.2
165.9
23.3
171.2
21.6
171.0
21.2
184.6
21.0
181.3
21.5
181.3
21.8
178.0
39.5
196.3
68.0
67.1
42.7
206.0
87.1
71.4
51.0
235.0
99.5
75.7
41.1
211.7
90.5
69.5
44.7
219.6
89.9
73.2
50.0
228.2
95.0
72.3
51.0
235.0
99.5
75.7
52.5
254.4
102.5
79.7
57.5
264.4
102.1
82.5
59.0
272.1
102.4 R
84.4
564.9
591.8
666.9
602.9
621.9
638.1
666.9
691.4
709.2
717.81"
5 LESS; Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
Debt
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
16 Total liabilities and capital
1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are amounts carried on the balance sheets of finance companies; securitized
pools are not shown, as they are not on the books.
1.52
DOMESTIC FINANCE COMPANIES
2. Before deduction for unearned income and losses,
Consumer, Real Estate, and Business Credit'
Millions of dollars, amounts outstanding, end of period
1995
Type of credit
1993
1994
1996
1995 R
Aug.
Oct.
Sept.
Nov.
Dec.r
Jan.
Seasonally adjusted
1 Total . . . .
545,533
614,784
690,191
671,807
675,247
682,627
687,187
690,191
695,943
2 Consumer.,
3 Real estate'
4 Business..
160,349
71,965
313,219
176,198
78,770
359,816
198,860
86,944
404,387
191,806
85,756
394,245
193,555
86,121
395,571
194,620
87,266
400,741
197,303
87,699
402,185
198,860
86,944
404,387
199,175
87,959
408,810
Not seasonally adjusted
5 Total
6 Consumer
7
Motor vehicles.
8
Other consumer
.
9
Securitized motor vehicles ^
10
Securitized other consumer
11 Real estate2
12 Business
13
Motor vehicles
14
Retail5...
15
Wholesale6
16
Leasing
17
Equipment
18
Retail....
19
Wholesale6
20
Leasing
21
Other business
22
Securitized business assets
23
Retail
24
Wholesale
25
Leasing
550,751
620,975
697,340
665,535
672,653
681,965
687,944
697,340
696,413
162,770
56,057
60,396
36,024
10,293
71,727
316,254
95,173
18,091
31,148
45,934
145,452
35,513
8,001
101,938
53,997
21,632
2,869
10,584
8,179
178,999
61,609
73,221
31,897
12,272
78,479
363,497
118,197
21,514
35,037
61,646
157,953
39,680
9,678
108,595
61,495
25,852
4,494
14,826
6,532
202,101
70,061
81,988
33,633
16,419
86,606
408,633
133,277
25,304
36,427
71,546
177,297
48,843
10,266
118,188
65,363
32,696
4,723
21,327
6,646
190,830
68,271
77,251
31,551
13,757
86,107
388,598
124,444
23,883
31,392
69,169
170,825
43,121
12,278
115,426
64,941
28,388
4,587
17,986
5,815
193,615
68,857
77,345
31,693
15,720
86,128
392,910
125,053
25,006
29,313
70,734
171,239
42,823
12,210
116,206
66,111
30,507
4,818
19,773
5,916
194,931
70,816
77,865
30,096
16,154
87,471
399,563
129,216
25,752
32,209
71,255
172,657
43,697
11,581
117,379
66,238
31,452
4,586
20,390
6,476
198,072
68,167
78,926
34,394
16,585
87,672
402,200
129,708
24,564
33,519
71,625
173,183
44,194
10,889
118,100
66,678
32,631
4,974
21,208
6,449
202,101
70,061
81,988
33,633
16,419
86,606
408,633
133,277
25,304
36,427
71,546
177,297
48,843
10,266
118,188
65,363
32,696
4,723
21,327
6,646
201,070
70,847
81,002
32,128
17,093
88,379
406,964
131,792
25,689
34,166
71,937
176,159
49,109
9,233
117,817
66,840
32,173
4,467
20,923
6,783
1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are before deductions for unearned income and losses. Data in this table also
appear in the Board's G.20 (422) monthly statistical release. For ordering address, see inside
front cover.
2. Includes all loans secured by liens on any type of real estate, for example, first and junior
mortgages and home equity loans.
3. Includes personal cash loans, mobile home loans, and loans to purchase other types of
consumer goods such as appliances, apparel, general merchandise, and recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Passenger car fleets and commercial land vehicles for which licenses are required.
6. Credit arising from transactions between manufacturers and dealers, that is, floor plan
financing.
7. Includes loans on commercial accounts receivable, factored commercial accounts, and
receivable dealer capital; small loans used primarily for business or farm purposes; and
wholesale and lease paper for mobile homes, campers, and travel trailers.
Real Estate
1.53
MORTGAGE MARKETS
A37
Mortgages on New Homes
Millions of dollars except as noted
1995
Item
1993
1994
1996
1995
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
Terms'
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)2
163.1
123.0
78.0
26.1
1.30
175.8
134.5
78.6
27.7
1.21
170.4
130.6
78.9
27.3
1.12
174.8
131.8
78.1
28.0
1.20
174.3
133.0
77.8
26.6
1.11
178.6
136.4
78.9
27.7
1.22
181.7
140.9
79.1
27.6
1.21
179.2
135.8
77.3
27.7
1.07
181.7
143.2
80.3
27.8
1.24
7.03
7.24
7.37
7.26
7.47
8.58
7.65
7.85
8.05
7.56
7.75
7.91
7.50
7.69
7.78
7.39
7.58
7.62
7.27
7,46
7.46
7.20
7.40
7.30
7.15
7.32
7.23
7.00
7.20
7.56
7.46
6.65
Yield (percent per year)
6 Contract rate1
7 Effective rate 1 ' 3
8 Contract rate (HUD series)4
170.4
130.8
78.8
27.5
1.29
8.68
7.96
8.18
7.57
8.03
7.49
8.03
7.26
7.61
7.16
7.51
7.01
7.52
6.82
7.11
6.71
7.57
6.85
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203)5
10 GNMA securities6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
II Total
12
FHA/VA insured
13
Conventional
190,861
23,857
167,004
222,057
27,558
194,499
253,511
28,762
224,749
238,850
28,787
210,063
241,378
28,726
212,652
246,234
28,765
217,469
249,928
28,901
221,027
253,511
28,762
224,749
255,619
28,622
226,997
257,970
28,502
229,468
14 Mortgage transactions purchased (during period)
92,037
62,389
56,598
5,688
5,002
7,443
6,148
6,243
4,810
5,371
Mortgage commitments (during period)
7
15 Issued
8
16 To sell
92,537
5,097
54,038
1,820
56,092
360
6,284
53
6,019
9
6,732
0
6,038
10
4,765
0
5,750
3
7,013
0
55,012
321
54,691
72,693
276
72,416
107,424
267
107,157
91,544
246
91,298
94,989
281
94,708
99,758
276
99,482
102,997
271
102,726
107,424
267
107,157
111,143
226R
110,917'
114,793
225
114,568
229,242
208,723
124,697
117,110
98,470
85,877
9,594
8,161
11,458
10,239
11,092
9,856
9,989
9,011
13,108
11,712
13,357
11,624
10,891
9,733
274,599
136,067
118,659
10,578
12,469
10,388
11,339
14,609
12,765
10,378
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage holdings (end of period f
17 Total
18
FHA/VA insured
19
Conventional
Mortgage transactions (during period)
20 Purchases
21 Sales
22 Mortgage commitments contracted (during period)
9
1. Weighted averages based on sample surveys of mortgages originated by major institutional lender groups for purchase of newly built homes; compiled by the Federal Housing
Finance Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the
seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built homes,
assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S.
Department of Housing and Urban Development (HUD). Based on transactions on the first
day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured
by the Federal Housing Administration (FHA) for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month.
6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association (GNMA),
assuming prepayment in twelve years on pools of thirty-year mortgages insured by the
Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments
converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal Home Loan
Mortgage Corporation's mortgage commitments and mortgage transactions include activity
under mortgage securities swap programs, whereas the corresponding data for FNMA
exclude swap activity.
A38
1.54
DomesticNonfinancialStatistics • May 1996
MORTGAGE DEBT
OUTSTANDING1
Millions of dollars, end of period
1994
Type of holder and property
1992
1995
1994
1993
Q4
1 All holders
Q1
Q2
Q3
Q4P
4,092,984R
4,268,919R
4,475,242
4,475,242
4,516,816R
4,584,661R
4,660,895
4,724,076
3,037,408
274,234
700,604r
80,738
3,227,633
270,796
689,296'
81,194
3,432,165
275,304
684,803
82,971
3,432,165
275,304
684,803
82,971
3,466,026'
276,398'
690,988'
83,403'
3,524,474'
280,390'
695,947'
83,850
3,591,013
284,237
701,225
84,420
3,640,099
289,187
710,498
84,292
1,769,187
894,513
507,780
38,024
328,826
19,882
627,972
489,622
69,791
68,235
324
246,702
11,441
27,770
198,269
9,222
1,767,835
940,444
556,538
38,635
324,409
20,862
598,330
469,959
67,362
60,704
305
229,061
9,458
25,814
184,305
9,484
1,815,810
1,004,280
611,697
38,916
331,100
22,567
596,199
477,499
64,400
54,011
289
215,332
7,910
24,306
173,539
9,577
1,815,810
1,004,280
611,697
38,916
331,100
22,567
596,199
477,499
64,400
54,011
289
215,332
7,910
24,306
173,539
9,577
1,841,815
1,024,854
625,378
39,746
336,795
22,936
601,777
483,625
63,778
54,085
288
215,184
7,892
24,250
173,142
9,900
1,868,175
1,053,048
648,705
40,593
340,176
23,575
599,745
482,005
64,404
53,054
282
215,382
7,911
24,310
173,565
9,596
1,895,285
1,072,780
662,126
43,003
343,826
23,824
604,614
489,150
63,569
51,604
291
217,892
8,006
24,601
175,643
9,643
1,901,935
1,080,320
665,044
43,522
347,927
23,827
602,855
488,234
62,171
52,160
290
218,759
8,038
24,700
176,353
9,668
22 Federal and related agencies
23
Government National Mortgage Association . . .
24
One- to four-family
25
Multifamily
26
Farmers Home Administration4
27
One- to four-family
28
Multifamily
29
Commercial
30
Farm
31
Federal Housing and Veterans' Administrations
32
One- to four-family
33
Multifamily
34
Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Commercial
38
Farm
39
Federal Deposit Insurance Corporation
40
One- to four-family
41
Multifamily
42
Commercial
43
Farm
44
Federal National Mortgage Association
45
One- to four-family
46
Multifamily
47
Federal Land Banks
48
One- to four-family
49
Farm
50
Federal Home Loan Mortgage Corporation
51
One- to four-family
52
Multifamily
286,263
30
30
0
41,695
16,912
10,575
5,158
9,050
12,581
5,153
7,428
32,045
12,960
9,621
9,464
0
0
0
0
0
0
137,584
124,016
13,568
28,664
1,687
26,977
33,665
31,032
2,633
328,598
22
15
7
41,386
15,303
10,940
5,406
9,739
12,215
5,364
6,851
17,284
7,203
5,327
4,754
0
14,112
2,367
1,426
10,319
0
166,642
151,310
15,332
28,460
1,675
26,785
48,476
45,929
2,547
323,491
6
6
0
41,781
13,826
11,319
5,670
10,966
10,964
4,753
6,211
10,428
5,200
2,859
2,369
0
7,821
1,049
1,595
5,177
0
178,059
162,160
15,899
28,555
1,671
26,885
45.876
43,046
2,830
323,491
6
6
0
41,781
13,826
11,319
5,670
10,966
10,964
4,753
6,211
10,428
5,200
2,859
2,369
0
7,821
1,049
1,595
5,177
0
178,059
162,160
15,899
28,555
1,671
26,885
45,876
43,046
2,830
319,770
15
15
0
41,857
13,507
11,418
5,807
11,124
10,890
4,715
6,175
9,342
4,755
2,494
2,092
0
6,730
840
1,310
4,580
0
177,615
161,780
15,835
28,065
1,651
26,414
45,256
42,122
3,134
315,208
7
7
0
41,917
13,217
11,512
5,949
11,239
10,098
4,838
5,260
6,456
2,870
1,940
1,645
0
6,039
731
1,135
4,173
0
178,462
162,674
15,788
28,005
1,648
26,357
44,224
40,963
3,261
314,358
2
2
0
41,858
12,914
11,557
6,096
11,291
9,535
4,918
4,617
4,889
2,299
1,420
1,170
0
5,015
618
722
3,674
0
182,229
166,393
15,836
28,151
1,656
26,495
42,678
39,244
3,434
310,408
2
2
0
41,791
12,643
11,617
6,248
11,282
9,497
4,867
4,629
1,700
761
515
424
0
4,303
492
428
3,383
0
183,782
168,122
15,660
28,019
1,652
26,367
41,315
37,463
3,852
53 Mortgage pools or trusts5
54
Government National Mortgage Association . . .
55
One- to four-family
56
Multifamily
57
Federal Home Loan Mortgage Corporation
58
One- to four-family
59
Multifamily
60
Federal National Mortgage Association
61
One- to four-family
62
Multifamily
63
Farmers Home Administration4
64
One- to four-family
65
Multifamily
66
Commercial
67
Farm
68
Private mortgage conduits
69
One- to four-family
70
Multifamily
71
Commercial
72
Farm
1,434,264
419,516
410,675
8,841
407,514
401,525
5,989
444,979
435,979
9,000
38
8
0
17
13
162,217
140,718
6,305
15,194
0
1,563,453
414,066
404,864
9,202
446,029
441,494
4,535
495,525
486,804
8,721
28
5
0
13
10
207,806
173,635
8,701
25,469
0
1,716,209
450,934
441,198
9,736
486,480
483,354
3,126
530,343
520,763
9,580
19
3
0
9
7
248,433
196,733
14,925
36,774
0
1,716,209
450,934
441,198
9,736
486,480
483,354
3,126
530,343
520,763
9,580
19
3
0
9
7
248,433
196,733
14,925
36,774
0
1,731,272
454,401
444,632
9,769
488,723
485,643
3,080
533,262
523,903
9,359
14
2
0
7
5
254,871
201,314
15,743
37,814
0
1,759,314
457,101
446,855
10,246
496,139
493,105
3,034
543,669
533,091
10,578
13
2
0
6
5
262,393
205,018
17,281
40,094
0
1,797,162
463,654
453,114
10,540
503,457
500,504
2,953
559,585
548,400
11,185
12
2
0
5
5
270,454
209,713
18,903
41,838
0
1,849,640
472,298
461,453
10,845
517,609
514,796
2,813
582,959
569,724
13,235
11
2
0
5
4
276,763
208,354
22,436
45,972
0
603,270r
447,871
64,688
75,44 l r
15,270
609,032'
455,709
65,397
73,917'
14,009
619,732
461,297
69,602
76,153
12,681
619,732
461,297
69,602
76,153
12,681
623,960'
464,252'
70,305'
76,667'
12,736
641,964'
480,834'
71,049'
77,284'
12,796
654,089
491,954
71,896
77,368
12,872
662,092
498,452
72,763
78,025
12,853
2
3
4
5
By type of property
One- to four-family residences
Multifamily residences
Commercial
Farm
By type of holder
6 Major financial institutions
7
Commercial banks2
8
One- to four-family
9
Multifamily
10
Commercial
11
Farm
12
Savings institutions3
13
One- to four-family
14
Multifamily
15
Commercial
16
Farm
17
Life insurance companies
18
One- to four-family
19
Multifamily
20
Commercial
21
Farm
73 Individuals and others6
74
One- to four-family
75
Multifamily
76
Commercial
77
Farm
1. Multifamily debt refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by bank trust
departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from
FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting
changes by the Farmers Home Administration.
5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by
the agency indicated.
6. Other holders include mortgage companies, real estate investment trusts, state and local
credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and
finance companies.
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.
Consumer Installment Credit
A39
CONSUMER INSTALLMENT CREDIT1
1.55
Millions of dollars, amounts outstanding, end of period
1996
1995
Holder and type of credit
1993
1995r
1994
Aug.
Oct.
Sept.
Nov.
Dec.r
Jan.
Seasonally adjusted
1 Total
790,351
902,853
1,024,809
989,695
993,843
1,005,178
l,015,029 r
1,024,809
1,035,114
2 Automobile
3 Revolving
4 Other2
280,566
286,588
223,197
317,237
334,511
251,106
353,326
395,234
276,249
339,770
379,669
270,255
341,155
382,094
270,595
344,671
387,180
273,326
349,138r
390,123r
275,768r
353,326
395,234
276,249
356,053
400,545
278,516
Not seasonally adjusted
809,440
925,000
1,050,642
990,428
996,525
1,005,423
l,018,961 r
1,050,642
1,045,035
By major holder
Commercial banks
Finance companies
Credit unions
Savings institutions
Nonfinancial business3
Pools of securitized assets4
367,566
116,453
101,634
37,855
55,296
130,636
427,851
134,830
119,594
38,468
60,957
143,300
464,993
152,059
132,033
38,500
57,497
205,560
451,784
145,522
128,424
38,634
55,723
170,341
449,502
146,202
129,027
38,894
54,177
178,723
451,232
148,681
130,261
38,500
54,607
182,142
453,690
147,093
130,970r
38,500
53,139
195,569
464,993
152,059
132,033
38,500
57,497
205,560
459,740
151,849
131,443
38,500
54,702
208,801
By major type of credit
12 Automobile
13
Commercial banks
14
Finance companies
Pools of securitized assets4
15
281,458
122,000
56,057
39,481
318,213
141,851
61,609
34,918
354,395
151,057
70,061
43,666
341,716
148,549
68,271
36,681
344,401
148,901
68,857
37,476
347,513
150,782
70,816
36,453
351,024r
149,905
68,167
43,240
354,395
151,057
70,061
43,666
354,313
152,290
70,847
41,901
16 Revolving
Commercial banks
17
18
Nonfinancial business3
Pools of securitized assets4
19
301,837
149,920
50,125
79,878
352,266
180,183
55,341
94,376
416,187
198,076
51,971
142,721
377,784
189,163
48,976
117,729
380,341
185,572
48,968
123,749
384,625
186,463
49,358
126,739
392,689r
189,405
47,839
132,978
416,187
198,076
51,971
142,721
409,006
189,317
49,267
147,083
20 Other
Commercial banks
21
22
Finance companies
73
Nonfinancial business3
24
Pools of securitized assets4
226,145
95,646
60,396
5,171
11,277
254,521
105,817
73,221
5,616
14,006
280,060
115,860
81,998
5,526
19,173
269,467
114,072
77,251
5,286
15,931
271,845
115,029
77,345
5,271
17,498
273,285
113,987
77,865
5,249
18,950
275,248r
114,380
78,926
5,300
19,351
280,060
115,860
81,998
5,526
19,173
281,716
118,133
81,002
5,435
19,817
5 Total
7
8
9
10
11
1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals that is scheduled to be repaid (or has the option of repayment) in two
or more installments. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Comprises mobile home loans and all other installment loans that are not included in
automobile or revolving credit, such as loans for education, boats, trailers, or vacations. These
loans may be secured or unsecured.
1.56
3. Includes retailers and gasoline companies.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Totals include estimates for certain holders for which only consumer credit totals are
available.
TERMS OF CONSUMER INSTALLMENT CREDIT1
Percent per year except as noted
1996
1995
Item
1993
1994
1995
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
INTEREST RATES
Commercial hanks2
1 48-month new car
2 24-month personal
8.09
13.47
8.12
13.19
9.57
13.94
n.a.
n.a.
9.44
13.84
n.a.
n.a.
n.a.
n.a.
9.36
13.80
n.a.
n.a.
n.a.
n.a.
Credit card plan
3 All accounts
4 Accounts assessed interest
n.a.
n.a.
15.69
15.77
16.02
15.79
n.a.
n.a.
15.98
15.94
n.a.
n.a.
n.a.
n.a.
15.81
15.71
n.a.
n.a.
n.a.
n.a.
Auto finance companies
5 New car
6 Used car
9.48
12.79
9.79
13.49
11.19
14.48
11.01
14.35
10.85
14.23
10.75
14.12
10.89
14.06
10.84
13.98
10.52
13.83
9.74
13.27
54.5
48.8
54.0
50.2
54.1
52.2
54.1
52.4
53.5
52.3
53.4
52.3
54.6
52.3
54.5
52.2
53.6
51.8
51.8
52.2
91
98
92
99
92
99
92
100
92
99
92
100
92
99
92
99
92
99
92
99
14,332
9,875
15,375
10,709
16,210
11,590
16,086
11,637
16,056
11,662
16,402
11,725
16,430
11,883
16,583
12,012
17,034
12,152
16,698
12,059
OTHER TERMS 3
Maturity (months)
1 New car
8 Used car
Loan-to-value ratio
9 New car
10 Used car
Amount financed (dollars)
11 New car
12 Used car
1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals that is scheduled to be repaid (or has the option of repayment) in two
or more installments. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Data are available for only the second month of each quarter,
3. At auto finance companies,
A40
1.57
DomesticNonfinancialStatistics • May 1996
F U N D S R A I S E D I N U.S. C R E D I T
MARKETS1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1995r
1994
Transaction category or sertor
1991
1992
1993
1995
Q2
Q3
Q4
Ql
Q2
Q3
Q4
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors....
480.6
545.3
625.9
617.0
716.7
581.2
579.9r
654.3
839.7
879.3
529.6
618.4
By sector and instrument
2 U.S. government
3 Treasury securities
4
Budget agency issues and mortgages
278.2
292.0
-13.8
304.0
303.8
.2
256.1
248.3
7.8
155.9
155.7
.2
144.4
142.9
1.5
131.3
126.6
4.7
135.6
132.8
2.9
150.1
155.7
-5.7
266.8
268.0
-1.2
202.8
201.2
1.6
65.8
65.4
.4
42.4
37.2
5.1
5 Private
202.4
241.3
369.8
461.1
572.3
449.9
444.3
504.2
572.9
676.5
463.9
576.0
y
10
n
12
13
14
13
16
By instrument
Municipal securities
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans and advances
87.8
78.8
158.4
173.6
-5.5
-10.0
.4
-14.8
-40.9
-18.4
-48.5
30.5
67.6
130.9
187.6
-10.4
-47.8
1.4
7.3
-13.7
8.6
10.1
74.8
75.2
157.2
187.9
-6.0
-25.0
.5
58.9
3.8
10.0
-10.2
-29.3
23.3
196.5
204.5
1.3
-11.1
1.8
121.2
72.7
21.4
55.4
-47.2
75.0
243.5
207.9
12.1
22.1
1.3
130.8
99.7
18.1
52.4
-20.7
37.4
194.2
186.2
4.0
1.1
2.9
129.8
58.7
9.7
40.8
-58.4
15.4
203.9
208.8
5.6
-12.7
2.2
124.8
97.1
26.4
35.1
-53.8
6.2
213.5
219.8
-4.2
-3.4
1.4
165.2
77.1
23.5
72.4
-48.2
55.3
217.7
192.1
2.6
21.2
1.7
93.8
146.6
23.1
84.5
-9.5
99.0
236.1
203.8
14.2
16.3
1.8
158.1
97.3
37.5
58.0
-113.0
60.7
278.2
244.6
13.7
17.6
2.3
109.6
85.4
16.0
26.9
-18.0
84.8
242.0
191.2
18.0
33.4
-.5
161.8
69.5
-4.1
40.0
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
182.7
-61.9
2.1
-11.0
-53.0
81.6
200.7
19.5
1.3
-16.0
34.1
21.1
246.5
61.0
2.0
7.0
52.0
62.3
360.3
144.3
2.8
12.1
129.3
-43.4
373.1
250.8
1.7
37.9
211.1
-51.5
349.9
139.4
7.8
10.0
121.7
-39.5
379.7
130.0
2.4
8.8
118.8
-65.4
419.1
153.6
-2.0
16.5
139.1
-68.5
303.5
316.8
.9
51.3
264.6
-47.5
390.4
302.4
3.6
34.4
264.3
-16.3
401.8
178.3
4.3
29.8
144.1
-116.2
396.5
205.5
-2.2
36.2
171.5
-26.1
23 Foreign net borrowing in United States
Bonds
24
Bank loans n.e.c
25
2b Commercial paper
Other loans and advances
27
14.8
15.0
3.1
6.4
-9.8
22.6
15.7
2.3
5.2
-.6
68.8
81.3
.7
-9.0
-4.2
-20.3
7.1
1.4
-27.3
-1.6
67.4
47.3
8.3
13.6
-1.8
-34.2
-17.4
-4.5
-5.2
-7.1
19.6
20.8
4.7
-8.1
2.2
33.5
27.7
-.5
5.9
.4
61.4
13.5
8.1
37.9
1.9
40.4
49.9
5.6
-11.1
-4.0
97.5
55.0
8.2
30.9
3.4
70.1
70.8
11.3
-3.4
-8.6
28 Total domestic plus foreign
495.4
568.0
694.7
596.6
784.1
546.9r
599.5
687.8
901.1
919.7
627.2
688.5
6
1
Financial sectors
29 Total net borrowing by financial sectors
30
31
32
33
34
33
36
37
38
39
B\ instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Other loans and advances
By borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
42 Private financial sectors
43
Commercial banks
Bank holding companies
44
43
Funding corporations
Savings institutions
46
Credit unions
47
Life insurance companies
48
4y
Finance companies
30
Mortgage companies
Real estate investment trusts (REITs)
31
52
Brokers and dealers
Issuers of asset-backed securities (ABSs)
53
154.5
240.1
290.8
459.4
455.9
380.1
419.7
544.8
264.9
433.6
461.7
663.5
145.7
9.2
136.6
.0
155.8
40.3
115.6
.0
164.2
80.6
83.6
.0
284.3
176.9
112.1
-4.8
213.6
108.5
105.1
.0
264.5
146.6
117.9
.0
245.7
152.1
93.6
.0
317.5
249.0
68.5
.0
93.0
62.9
30.0
.0
197.7
127.2
70.5
.0
230.1
101.5
128.6
.0
333.5
142.2
191.3
.0
8.7
68.8
.5
8.8
-32.0
-37.3
84.3
82.8
.6
2.2
-.7
-.6
126.6
119.8
3.6
-13.0
-6.2
22.4
175.2
113.4
9.8
-12.3
41.6
22.6
242.4
180.8
5.3
8.0
42.6
5.7
115.5
96.4
12.4
-27.4
4.3
29.8
174.0
99.5
12.0
-11.7
41.3
32.8
227.3
96.5
4.9
1.9
85.9
38.1
172.0
155.7
5.2
-3.0
38.5
-24.5
236.0
174.2
5.2
21.2
34.0
1.3
231.6
170.2
5.2
7.1
43.3
5.9
329.9
223.1
5.6
6.6
54.6
40.1
9.1
136.6
8.7
-10.7
—2.5
-6.5
-44.7
.0
.0
17.7
-2.4
1.2
3.7
52.9
40.2
115.6
84.3
7.7
2.3
13.2
-7.0
.0
.0
-1.6
8.0
.3
2.7
58.6
80.6
83.6
126.6
4.6
8.8
2.9
11.3
.2
.2
.2
.0
3.4
12.0
83.0
172.1
112.1
175.2
9.9
10.3
24.2
12.8
.2
.3
50.2
-11.5
13.7
.5
64.5
108.5
105.1
242.4
9.7
15.3
45.2
3.4
-.1
-.1
51.6
2.9
5.4
-5.0
114.1
146.6
117.9
115.5
10.6
10.1
-10.5
5.8
.2
.0
63.6
-18.2
15.3
.3
38.5
152.1
93.6
174.0
23.9
11.5
47.3
14.8
.5
.0
16.3
-7.0
18.8
-7.6
55.4
249.0
68.5
227.3
4.1
16.0
11.1
36.1
.2
1.3
57.3
1.1
6.3
19.3
74.5
62.9
30.0
172.0
6.3
13.3
61.5
-18.9
-.3
.0
83.1
-7.4
5.2
-29.5
58.8
127.2
70.5
236.0
18.2
23.8
21.7
-7.2
-.1
.1
57.2
14.8
5.2
-.1
102.2
101.5
128.6
231.6
9.6
25.2
52.1
5.3
.1
-.1
6.5
4.0
5.2
2.1
121.6
142.2
191.3
329.9
4.5
-1.3
45.5
34.2
.0
-.4
59.6
.0
6.0
7.7
174.1
Flow of Funds
1.57
A41
FUNDS RAISED IN U.S. CREDIT MARKETS 1 —Continued
1995r
1994
Transaction category or sector
1991
1992
1994
Q2
Q3
Q4
Ql
Q2
Q3
Q4
All sectors
54 Total net borrowing, all sectors
649.9
808.0
985.5
1,056.0
1,240.0
927.0
1,019.2
1,232.6
1,166.0
1,353.4
1,088.9
1,351.9
55
56
57
58
59
60
61
62
424.0
87.8
162.5
158.9
-14.8
-29.1
-44.0
-95.6
459.8
30.5
166.1
131.5
7.3
-9.3
13.1
8.9
420.3
74.8
276.3
160.8
58.9
-8.5
-5.1
8.0
444.9
-29.3
143.8
206.3
121.2
61.8
35.7
71.7
358.0
-47.2
303.0
248.8
130.8
116.0
74.3
56.2
395.8
-20.7
116.4
206.6
129.8
26.8
8.8
63.5
381.3
-58.4
135.7
215.9
124.8
90.1
59.6
70.2
467.5
-53.8
130.4
218.4
165.2
78.5
115.3
111.0
359.8
-48.2
224.5
223.0
93.8
151.7
99.5
61.8
400.5
-9.5
323.1
241.4
158.1
124.1
60.4
55.4
295.9
-113.0
285.9
283.4
109.6
100.7
90.2
36.2
375.9
-18.0
378.7
247.6
161.8
87.4
47.1
71.5
U.S. government securities
Municipal securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans and advances
Funds raised through mutual funds and corporate equities
63 Total net share issues
64 Mutual funds
65 Corporate equities
66
Nonfinancial corporations
Financial corporations
67
Foreign shares purchased by U.S. residents
68
209.4r
r
147.2
62.2
18.3
13.3
30.7
294.9r
209. f
85.8
27.0
28.1
30.7
442.1r
150.8r
r
r
323.7
118.4
21.3
36.6
60.5
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
F.2 through F.5. For ordering address, see inside front cover.
128.9
21.9r
-44.9
24. r
42.7
157.1
263.9r
171.1
-14.1
-76.0
14.2
47.8
r
199.6
64.3'
-2.0
20.4r
45.9
113.2r
-8i.r
18.1
169.2
190.1
250.9
129.7r
— 16.4r
-50.0
10.5r
23.1
-12.6'
-68.5
-118.0
16.3
33.2
65.1
-46.9
-68.4
8.7
12.8
174.1
-4.9
-59.6
17.7
37.0
195.7
-5.6
-98.8
11.2
82.0
249.7
1.2
-77.2
19.0
59.4
A42
1.58
DomesticNonfinancialStatistics • May 1996
SUMMARY OF FINANCIAL TRANSACTIONS1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1994
Transaction category or sector
1990
1991
1992
1993
1995'
1994
Q2
Q3
Q4
Qi
Q2
Q3
Q4
NET LENDING IN CREDIT MARKETS2
1 Total net lending in credit markets
904.1
649.9
808.0
985.5
927.0
1,019.2
1,232.6
1,166.0
1,353.4
1,088.9
1,351.9
216.1'
198.1r
-3.5
-26.1
47.6r
33.7
86.7
567.7r
14.0
150.3
8.1
125.1
94.9
28.4
-2.8
4.5
-6.3r
-157.6
107.2
26.4
54.0
32.8
29.5
.0
36.2
1.3
77.5
-.7
2.8
51.1
15.9
104.lr
27.9'
-5.3
30.7
50.8
10.5
13.3
522.0r
15.1
136.6
31.1
80.8
35.7
48.5
-1.5
-1.9
8.2'
-146.1
86.5
30.0
35.4
41.1
-9.2
11.2
80.1
12.8
32.7
-.7
17.5
48.9
10.0
90.2
84.0r
-.1
27.8
-21.5r
-11.9
98.2
631.5r
68.8
115.6
27.9
95.3
69.5
16.5
5.6
3.7
17.7
-61.3
78.5
6.7
41.1
23.0
7.5
.1
126.2
18.2
4.7
1.1
-1.3
53.8
8.0
62.7'
37.1'
.6
21.3
3.7
-18.4
128.3
812.8'
90.2
83.6
36.2
142.2
149.6
-9.8
.0
2.4
-19.1'
-1.7
100.9
27.7
45.9
19.8
-9.0
.0
159.5
11.0
20.4
.6
14.8
80.5
9.5
252.9'
294.8'
.7
51.9
-94.6 r
-24.2
134.4
693.0'
123.2
112.1
31.5
163.4
148.1
11.2
.9
3.3
-27.4'
34.9
66.3
24.9
47.0
29.0
68.2
-22.9
-7.1'
-5.5
30.0'
4.7
-44.2
57.8
7.1
255.5'
297.6'
1.5
27.5
-71.1
-14.6
65.7
620.4'
100.9
117.9
24.9
128.5
136.1
-10.0
.2
2.1
-35.6'
41.5
26.7
22.3
49.9
46.4
61.2
-36.3
55.4'
-11.6
26.6
6.6
-57.7
42.8
10.2
205.1'
283.9'
.7
37.4'
-117.0
-11.3
137.5
687.9'
125.4
93.6
29.7
183.4
155.6
22.9
2.7
2.2
-45.5'
53.8
89.5
25.3
42.5
-11.1
63.1
-14.0
-29.3'
-13.6
57.7
5.5
-21.9
46.3
7.7
252.0'
336.7'
.9
84.1
-169.7
-24.4
210.9
794.0'
175.2
68.5
30.0
174.5
174.2
-5.6
-2.4
8.3
-11.4'
32.4
79.4
30.4
74.7
36.6
80.4
2.1
-70.4'
-10.0
53.9'
.2
-8.0
54.3
1.4
.0
179.7
.5
-85.2
-94.9
-13.2
244.9
934.3
11.2
30.0
16.3
342.7
183.4
158.8
-2.0
2.4
47.1
28.2
132.4
19.2
58.9
62.4
91.8
-14.4
-28.8
3.5
53.1
1.8
30.5
46.7
1.6
-158.5
-99.4
-1.0
47.5
-105.7
-24.3
325.9
1,210.2
86.9
70.5
20.8
316.0
222.4
83.9
5.7
4.0
-9.6
9.4
131.2
21.7
57.2
3.2
70.1
29.9
21.6
6.4
135.2
1.8
146.2
89.8
1.8
-124.7
131.5
-1.0
-47.3
-207.9
-23.4
352.8
884.2
50.8
128.6
-11.1
243.5
227.5
24.1
-9.0
1.0
-22.0
40.9
77.0
21.8
47.5
53.0
42.9
7.3
51.3
8.4
33.2
1.8
-1.8
109.7
1.5
-137.1
-5.3
-2.2
37.5
-167.1
-30.1
159.8
1,359.3
166.8
191.3
24.7
153.6
112.9
34.3
6.0
.4
-42.8
1.6
91.5
22.8
61.6
12.1
47.3
.6
162.0
5.0
124.6
1.9
177.0
156.9
.8
904.1
2 Private domestic nonfinancial sectors
Households
4
Nonfarm noncorporate business
Nonfinancial corporate business
6
State and local governments
1 U.S. government
8 Rest of the world
y Financial sectors
10
Government sponsored enterprises
n
Federally related mortgage pools
12
Monetary authority
13
Commercial banking
14
U.S. chartered banks
15
Foreign banking offices in United States
16
Bank holding companies
17
Banks in U.S. affiliated areas
18
Funding corporations
19
Thrift institutions
20
Life insurance companies
21
Other insurance companies
22
Private pension funds
23
State and local government retirement funds
24
Finance companies
25
Mortgage companies
2b
Mutual funds
27
Closed-end funds
28
Money market mutual funds
29
Real estate investment trusts (REITs)
30
Brokers and dealers
31
Asset-backed securities issuers (ABSs)
32
Bank personal trusts
649.9
808.0
985.5
1,056.0
927.0
1,019.2
1,232.6
1,166.0
1,353.4
1,088.9
1,351.9
2.0
1.5
1.0
25.7
243.5r
35.0
43.6
63.7
-66.1
68.6
-24.2
27.9
62.9r
-44.6
3.5
35.8r
-4.8
9.8r
29.7
162.0r
-5.9
.0
.0
25.7
198.2r
-3.4
86.3
1.5
-58.5
41.6
-16.5
-26.5
147.2r
62.2
51.4
31.0r
-6.2
-,2r
16.1
277.4r
-1.6
-2.0
.2
27.3
238.6r
43.5
113.5
-57.2
-73.2
4.5
43.1
-3.5
209. r
85.8
4.6
46.6r
8.5
16.9r
-7.1
287.2
.8
.0
.4
35.2
247.3'
56.4'
117.3
-70.3
-23.5
20.2
71.2
-18.5
323.7'
118.4
61.4
37.8'
4.5
4.0'
1.6
296.3'
-5.8
.0
.7
34.0
248.0'
89.4'
-9.7
-40.0
19.6
43.3
78.3
45.8
128.9'
21.9'
-.1
111.9'
3.0
23.8'
18.8
265.9'
-14.6
.0
.6
21.7
220.7'
110.7'
-44.9
-57.5
-3.6
34.0
166.0
50.6
199.6'
64.3'
-20.7
114.4'
-13.1
36.8'
24.7
129.4'
.2
.0
.8
67.7
238.0'
4.1'
-66.0
-51.8
84.0
56.4
86.0
28.1
129.7'
-16.4'
-59.3
95.4'
10.1
46.6'
23.6
269.0'
-8.6
.0
.7
21.6
293.4'
98.4r
-40.5
-46.9
36.5
86.5
51.9
97.9
-12.6'
-68.5
37.1
156.3'
4.3
24.2'
11.9
372.1'
17.8
.0
.7
54.0
302.5
-17.4
42.8
18.1
116.8
59.9
161.8
39.2
65.1
-46.9
-10.7
112.1
15.5
28.1
21.0
366.0
10.3
.0
.7
49.9
310.7
28.7
133.5
112.0
69.2
233.5
130.7
90.6
174.1
-4.9
30.8
32.5
-4.0
32.6
22.3
467.2
9.0
8.6
.8
29.9
214.2
-41.4
-150.5
107.6
111.5
121.2
85.1
28.0
195.7
-5.6
35.4
184.2
4.4
48.3
20.8
289.2
-1.9
.0
.0
41.5
166.2
56.7
-76.1
120.3
24.7
154.8
65.0
10.0
249.7
1.2
26.9
77.1
-9.3
33.6
18.0
516.6
l,580.6 r
l,471.4 r
l,792.8 r
2,269.8r
2,133.8r
1,946.2'
1,965.5'
2,348.4'
2,512.3
3,273.6
2,385.3
2,827.2
3.3
8.5
-11.2 r
-13.1
4.5
36. r
.7
1.6
11.3'
-1.5
-1.3
29.7'
-4.8
-2.8
-3.0'
.8
-3.5
20.3'
7.4
-3.3
16.0'
-24.4
-2.3
-29.7'
13.2
-3.7
25.7
-16.3
-3.9
19.9
3.5
-3.5
-6.0
-24.3
-4.2
-41.5
.2
1.6
-27.r
25.9
-1.7
-75.8r
-.6
26.2
-9.5
-24.0
-1.0
8.9r
-.2
-4.9
3.6'
-2.8
10.8
.8'
-.2
4.2
34.3
-7.1
10.4
-48.8'
-.2
-2.7
27.9'
36.9'
8.5
-109.6'
-.2
5.4
108.1'
56.1
6.2
-336.3'
-.2
10.1
-47.3'
39.5'
10.8
-73.1'
-.2
-1.7
83.0'
55.8'
-.8
14.8'
-.2
.8
73.5
46.0
-8.7
-226.8
-.4
8.2
-40.1
81.7
31.9
-125.1
-.3
7.6
13.6
-1.8
11.2
-32.4
-.9
-29.4
-12.9
15.8
-13.1
-5.9
1,657.0'
l,443.8 r
1,772.0r
2,250.0'
2,183.7'
2,089.3'
2,005.7'
2,254.0'
2,592.5
3,317.5
2,393.5
2,943.7
1,056.0
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
33 Net flows through credit markets
34
35
36
3/
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
Other financial sources
Official foreign exchange
Special drawing rights certificates
Treasury currency
Life insurance reserves
Pension fund reserves
Interbank claims
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Corporate equities
Security credit
Trade payables
Taxes payable
Noncorporate proprietors' equity
Investment in bank personal trusts
Miscellaneous
54 Total financial sources
Floats not included in assets (—)
55 U.S. government checkable deposits
56 Other checkable deposits
5 7 Trade credit
58
59
60
61
62
63
Liabilities not identified as assets (—)
Treasury currency
Interbank claims
Security repurchase agreements
Foreign deposits
Taxes payable
Miscellaneous
64 Total identified to sectors as assets
•
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
F.6 and F.7. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares.
Flow of Funds
1.59
A43
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1
Billions of dollars, end of period
1995
1994
Transaction category or sector
1991
1992
1993
1994
Q2
Q4
Q3
Q1
Q2
Q3
Q4
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
11,348.2
11,896.7
12,537.4
13,160.6
12,808.0
12,962.6
13,160.6
13,338.7r
13,544.3r
13,686.8r
13,877.3
By sector and instrument
2 U.S. government
Treasury securities
3
Budget agency issues and mortgages
4
2,776.4
2,757.8
18.6
3,080.3
3,061.6
18.8
3,336.5
3,309.9
26.6
3,492.3
3,465.6
26.7
3,395.4
3,368.0
27.4
3,432.3
3,404.1
28.2
3,492.3
3,465.6
26.7
3,557.9
3,531.5
26.4
3,583.5
3,556.7
26.8
3,603.4
3,576.5
26.9
3,636.7
3,608.5
28.2
5 Private
8,571.8
8,816.3
9,200.9
9,668.3
9,412.6
9,530.3
9,668.3
9,780.8r
9,960.8r
10,083.4r
10,240.6
r
r
r
6
7
8
9
10
11
12
13
14
15
16
By instrument
Municipal securities
Corporate bonds
Mortgages
Home mortgages
Multifamily residential
Commercial
Farm
Consumer credit
Bank loans n.e.c
Commercial paper
Other loans and advances
1,272.2
1,086.9
3,957.8
2,849.8
282.8
745.9
79.3
797.2
686.0
98.5
673.2
1,302.8
1,154.5
4,088.7
3,037.4
272.5
698.1
80.7
804.6
672.2
107.1
686.5
1,377.5
1,229.7
4,260.0
3,227.6
267.8
683.4
81.2
863.5
676.0
117.8
676.3
1,348.2
1,253.0
4,456.5
3,432.2
269.1
672.3
83.0
984.7
748.6
139.2
738.0
1,372.2
1,247.6
4,345.8
3,318.7
268.8
676.3
82.1
891.6
705.3
135.7
714.4
1,362.6
1,251.5
4,401.9
3,376.0
270.2
673.1
82.6
929.4
724.7
138.7
721.6
1,348.2
1,253.0
4,456.5
3,432.2
269.1
672.3
83.0
984.7
748.6
139.2
738.0
l,334.8
1,266.8
4,496.8r
3,466.0r
269.8
611.6'
83.4
987.9
781.8r
149.8
762.9r
l,329.8
1,291.6
4,563.3r
3,524.5r
273.3r
681.6r
83.9
1,026.5
810.3'
162.9
776.4r
l,306.6
1,306.8
4,638.2r
3,591.0r
276.8r
686.l r
84.4
1,060.8
826.0r
163.3
781.8r
1,301.1
1,328.0
4,700.0
3,640.1
281.2
694.4
84.3
1,115.5
848.3
157.4
790.4
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
State and local government
3,822.9
3,674.2
135.0
1,137.3
2,401.9
1,074.8
4,023.6
3,696.8
136.3
1,122.9
2,437.6
1,095.9
4,272.4
3,770.3
138.3
1,129.9
2,502.0
1,158.2
4,632.3
3,921.1
141.2
1,142.0
2,638.0r
1,114.8
4,407.5
3,860.9r
141.5
1,135.6
2,583.7
1,144.2
4,511.8
3,885.6
143.1
1,137.4
2,605.0
1,132.8
4,632.3
3,921.1
141.2
1,142.0
2,638.0r
1,114.8
4,675. l r
4,004.2r
138.9
1,154.5
2,710.7r
l,101.6 r
4,780.3r
4,085.6r
142.8
l,163.3 r
2,779.4r
1,094.9r
4,890.0r
4,122.6r
144.9
l,170.4 r
2,807.3r
l,070.8 r
5,005.4
4,171.9
142.8
1,180.0
2,849.1
1,063.3
299.7
313.1
381.9
361.6
348.7
352.4
361.6
376.8
387.6
410.7
429.0
130.5
21.6
81.8
65.9
146.2
23.9
77.7
65.3
227.4
24.6
68.7
61.1
234.6
26.1
41.4
59.6
222.4
25.1
42.0
59.2
227.6
26.3
39.9
58.6
234.6
26.1
41.4
59.6
237.9
28.2
50.9
59.8
250.4
29.6
48.1
59.5
264.2
31.6
55.8
59.1
281.9
34.4
55.0
57.7
11,647.9
12,209.7
12,919.3
13,522.2
13,156.7
13,315.0
13,522.2
13,715.5r
13,931.9r
14,097.5r
14,306.3
23 Foreign credit market debt held in
United States
24
25
26
27
Bonds
Bank loans n.e.c
Commercial paper
Other loans and advances
28 Total credit market debt owed by nonfinancial
sectors, domestic and foreign
Financial sectors
29 Total credit market debt owed by
financial sectors
30
31
32
33
34
35
36
37
38
39
By instrument
U.S. government-related
Government-sponsored enterprises securities
Mortgage pool securities
Loans from U.S. government
Private
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Other loans and advances
By borrowing sector
40 Government-sponsored enterprises
41 Federally related mortgage pools
42 Private financial sectors
43 Commercial banks
44 Bank holding companies
45 Funding corporations
46 Savings institutions
47 Credit unions
48 Life insurance companies
49 Finance companies
50 Mortgage companies
51 Real estate investment trusts (REITs)
52 Brokers and dealers
53 Issuers of asset-backed securities (ABSs)
2,769.2
3,024.9
3,321.0
3,785.7
3,545.3
3,648.1
3,785.7
3,853.5r
3,964.8 r
4,078.0 r
4,244.3
1,564.2
402.9
1,156.5
4.8
1,205.1
649.1
4.8
78.4
385.7
87.1
1,720.0
443.1
1,272.0
4.8
1,304.9
738.2
5.4
80.5
394.3
86.6
1,884.1
523.7
1,355.6
4.8
1,436.9
858.0
8.9
67.6
393.5
108.9
2,168.4
700.6
1,467.8
.0
1,617.3
969.0
18.7
55.3
442.8
131.6
2,030.5
600.3
1,430.1
.0
1,514.9
920.0
14.5
56.3
410.3
113.8
2,089.8
638.3
1,451.5
.0
1,558.3
944.8
17.5
53.4
420.5
122.0
2,168.4
700.6
1,467.8
.0
1,617.3
969.0
18.7
55.3
442.8
131.6
2,192.7
716.3
1,476.4
.0
l,660.8 r
l,007.9 r
20.0
53.4r
454.1
125.4
2,245.0
748.1
1,496.9
.0
l,719.8 r
l,051.4 r
21.3r
58.4r
462.8
125.7
2,300.2
773.5
1,526.7
.0
1,777.7r
l,094.0 r
22.6r
60.3r
473.6
127.2
2,381.9
809.1
1,572.9
.0
1,862.3
1,149.8
24.0
63.3
488.0
137.2
407.7
1,156.5
1,205.1
72.3
112.3
139.1
95.4
.0
.0
391.9
22.2
13.6
19.0
339.3
447.9
1,272.0
1,304.9
80.0
114.6
161.6
88.4
.0
.0
390.4
30.2
13.9
21.7
404.2
528.5
1,355.6
1,436.9
84.6
123.4
169.9
99.6
.2
.2
390.5
30.2
17.4
33.7
487.2
700.6
1,467.8
1,617.3
94.5
133.6
199.3
112.4
.5
.6
440.7
18.7
31.1
34.3
551.6
600.3
1,430.1
1,514.9
86.7
126.8
191.5
99.7
.3
.3
414.2
20.2
24.8
31.3
519.2
638.3
1,451.5
1,558.3
92.6
129.6
200.6
103.4
.4
.3
420.9
18.5
29.5
29.4
533.0
700.6
1,467.8
1,617.3
94.5
133.6
199.3
112.4
.5
.6
440.7
18.7
31.1
34.3
551.6
716.3
1,476.4
l,660.8 r
95.0
137.0r
221.0r
107.7
.4
.6
456.7
16.9
32.4r
26.9
566.3r
748.1
1,496.9
l,719.8 r
99.9
142.9
229.9
105.9r
.3
.6
467.2
20.6
33.7r
26.8
591.9r
773.5
1,526.7
l,777.7 r
102.2
149.2
240.0r
107.2
.4
.6
471.9
21.6r
35.0
27.4
622.3r
809.1
1,572.9
1,862.3
104.1
148.9
247.1
115.8
.4
.5
492.3
21.6
36.5
29.3
665.8
All sectors
54 Total credit market debt, domestic and foreign....
55
56
57
58
59
60
61
62
U.S. government securities
Municipal securities
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans and advances
14,417.1
15,234.6
16,240.3
17,307.9
16,702.0
16,963.1
17,307.9
17,569.1r
17,896.7r
18,175.4r
18,550.6
4,335.7
1,272.2
1,866.5
3,962.6
797.2
785.9
565.9
831.0
4,795.5
1,302.8
2,038.9
4,094.1
804.6
776.6
579.0
843.1
5,215.8
1,377.5
2,315.2
4,269.0
863.5
768.2
580.0
851.1
5,660.7
1,348.2
2,456.5
4,475.2
984.7
830.0
623.5
929.1
5,425.9
1,372.2
2,390.0
4,360.3
891.6
786.7
587.9
887.4
5,522.1
1,362.6
2,423.9
4,419.4
929.4
804.3
599.2
902.2
5,660.7
1,348.2
2,456.5
4,475.2
984.7
830.0
623.5
929.1
5,750.6
l,334.8 r
2,512.7r
4,516.8r
987.9
863.3
654.7
948. r
5,828.5
l,329.8 r
2,593.4r
4,584.7r
1,026.5
898.2
673.8
961,7r
5,903.6
l,306.6 r
2,664.9r
4,660.9r
1,060.8
917.9
692.7
968. l r
6,018.7
1,301.1
2,759.6
4,724.1
1,115.5
946.0
700.4
985.4
1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, see inside front cover.
A44
1.60
DomesticNonfinancialStatistics • May 1996
SUMMARY OF FINANCIAL ASSETS AND LIABILITIES'
Billions of dollars except as noted, end of period
1994
Transaction category or sector
1991
1992
1993
1995
1994
Q2
CREDIT MARKET DEBT OUTSTANDING
1 Total credit market assets
Q3
Q4
Qi
Q2
Q3'
Q4
2
14,417.1
15,234.6
16,240.3
17,307.9
16,702.0
16,963.1
17,307.9
17,569.1'
17,896.7'
18,175.4
18,550.6
2,591.4
1,544.4r
38.3
230.0
778.7r
246.9
928.8
10,650.1
389.0
1,156.5
272.5
2,853.3
2,502.5
319.2
11.9
19.7
144.8
1,192.6
1,224.6
376.6
530.6
394.5
488.9
60.3
440.2
49.5
403.9
7.0
124.0
317.8
223.5
2,673.7
1,620.6r
38.1
257.8
151.2'
235.0
1,022.8
11,303.1
457.8
1,272.0
300.4
2,948.6
2,571.9
335.8
17.5
23.4
162.5
1,134.5
1,309.1
389.4
571.7
417.5
496.4
60.5
566.4
67.7
408.6
8.1
122.7
377.9
231.5
2,729.3
1,646.0'
38.8
283.7
760.8r
230.7
1,146.6
12,133.7
548.0
1,355.6
336.7
3,090.8
2,721.5
326.0
17.5
25.8
149.5
1,132.7
1,420.6
422.7
617.6
437.3
482.8
60.4
725.9
78.6
429.0
8.6
137.5
458.4
240.9
3,012.5'
1,971.1'
39.5
335.6
666.3r
206.5
1,255.7
12,833.2'
671.2
1,467.8
368.2
3,254.3
2,869.6
337.1
18.4
29.2
129.8'
1,167.6
1,487.0
446.4
664.6
466.3
551.0
37.5
718.8'
73.1
459.0'
13.3
93.3
516.1
248.0
2,824.7'
1,747.4'
39.1
298.5
739.8'
215.4
1,205.4
12,456.6'
596.0
1,430.1
351.6
3,155.9
2,780.3
330.8
18.3
26.5
138.7'
1,146.1
1,449.0
433.1
635.3
459.2
511.3
40.4
747.8'
79.0
433.5
11.9
100.8
491.0
245.7
2,893.9'
1,839.5'
39.3
306.8
708.3'
212.6
1,240.7
12,615.9'
627.5
1,451.5
356.8
3,203.9
2,822.3
335.5
19.0
27.1
130.5'
1,160.4
1,470.7
439.1
645.9
454.3
524.1
37.0
741.8'
75.6
437.9
13.3
95.3
502.6
247.7
3,012.5'
1,971.1'
39.5
335.6
666.3'
206.5
1,255.7
12,833.2'
671.2
1,467.8
368.2
3,254.3
2,869.6
337.1
18.4
29.2
129.8'
1,167.6
1,487.0
446.4
664.6
466.3
551.0
37.5
718.8'
73.1
459.0'
13.3
93.3
516.1
248.0
2,983.7'
1,996.3'
39.6
307.2'
640.6'
203.2
1,325.3'
13,056.9'
673.3
1,476.4
367.1
3,327.7
2,906.5
373.6
17.9
29.8
140.2'
1,173.4
1,523.1
451.8'
679.3'
480.7
568.5
33.9'
715.9
74.0'
480.6
13.8'
101.0
527.8'
248.4
2,929.5'
1,953.1'
39.4
319.0'
618.1'
197.1
1,403.4'
13,366.6'
695.8
1,496.9
375.7
3,409.8
2,963.7
396.0
19.3
30.8
135.7'
1,177.3
1,557.1
458.5'
693.6'
482.1
586.9
41.4'
721.5
75.6'
508.0
14.2'
137.5
550.3'
248.8
2,916.3
2,007.1
39.1
306.4
563.7
191.3
1,492.7
13,575.1
708.5
1,526.7
370.6
3,472.9
3,023.7
401.1
17.0
31.0
134.0
1,188.1
1,575.5
464.4
705.5
493.3
594.7
43.2
735.6
77.7
505.7
14.7
137.0
577.7
249.2
2,903.4
2,018.7
38.6
323.7
522.4
183.8
1,526.6
13,936.9
750.1
1,572.9
380.8
3,518.2
3,056.1
412.4
18.6
31.1
125.6
1,187.7
1,595.0
471.9
720.9
498.9
614.0
43.3
770.3
78.9
545.5
15.1
181.3
616.9
249.4
14,417.1
15,234.6
16,240.3
17,307.9
16,702.0
16,963.1
17,307.9
17,569.1'
17,896.7'
18,175.4
18,550.6
55.4
10.0
16.3
405.7
3,655.4
96.4
5,024.3
1,020.9
2,350.7
488.4
535.0
355.8
273.5
769.5
188.9
948.3r
71.2
639.3
4,443.8
51.8
8.0
16.5
433.0
4,055.1
132.6
5,050.2
1,134.4
2,293.5
415.2
539.5
399.9
267.7
992.5
217.7
995. r
79.7
660.6
4,791.2
53.4
8.0
17.0
468.2
4,471.6
189.3r
5,154.9
1,251.7
2,223.2
391.7
559.6
471.1
257.6
1,375.4
279.0
1,032.8'
84.2
691.3
5,102.9'
53.2
8.0
17.6
502.2
4,693.9
279.7'
5,296.0
1,242.0
2,183.3
411.2
602.9
549.4
307.1
1,477.3
279.0
1,144.8'
87.3
699.4
5,363.9'
54.9
8.0
17.3
479.9
4,524.0
237.5'
5,186.7
1,229.9
2,214.4
379.3
569.2
522.1
271.9
1,445.4
279.1
1,059.9'
82.0
680.0
5,239.7'
55.5
8.0
17.5
496.8
4,677.0'
250.1'
5,212.4
1,205.0
2,199.1
402.6
578.7
548.1
278.9
1,515.8
263.9
1,082.3'
86.3
701.1
5,322.2'
53.2
8.0
17.6
502.2
4,693.9
279.7'
5,296.0
1,242.0
2,183.3
411.2
602.9
549.4
307.1
1,477.3
279.0
1,144.8'
87.3
699.4
5,363.9'
64.1
8.0
17.8
515.7
4,895.7'
271.7'
5,389.5'
1,193.9
2,200.1
441.1
634.0
603.4'
316.9
1,552.8
269.5
1,143.8'
93.5
736.3
5,437.9'
67.1
8.0
18.0
528.1
5,095.4'
265.5'
5,572.4'
1,246.3
2,222.4'
456.2
678.5
629.3'
339.6
1,664.4
277.9
1,158.6'
88.6
774.6
5,510.4'
65.1
10.2
18.2
535.6
5,320.1
267.4
5,638.7
1,200.7
2,247.0
486.2
702.7
655.6
346.6
1,789.6
286.2
1,202.0
91.4
817.0
5,586.2
63.7
10.2
18.2
546.0
5,435.3
287.0
5,748.4
1,229.5
2,272.7
491.8
745.3
660.1
349.1
1,865.0
299.6
1,246.2
88.9
841.7
5,724.6
30,741.8r
32,718.6'
35,168.3'
37,210.2r
35,996.6'
36,652.0'
37,210.2r
37,965.3'
38,925.7r
39,803.2
40,725.4
Financial assets not included in liabilities ( + )
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business
22.3
4,863.6
2,521.0r
19.6
5,462.9
2,458.3r
20.1
6,278.5
2,476.3'
21.1
6,293.4
2,564.6'
20.8
5,965.8
2,523.9'
21.0
6,228.7
2,550.9'
21.1
6,293.4
2,564.6'
22.7
6,835.8
2,576.8'
22.9
7,393.0
2,608.5'
22.1
8,013.8
2,622.2
22.1
8,345.4
2,635.6
Floats not included in assets ( —)
57 U.S. government checkable deposits
58 Other checkable deposits
59 Trade credit
3.8
40.4
-263.r
6.8
42.0
— 251,0r
5.6
40.7
-215.1'
3.4
38.0
-219.0'
.9
38.7
-280.2'
1.2
30.6
-282.3'
3.4
38.0
-219.0'
4.2
33.3
-258.1'
2.0
35.7
-277.1'
.6
27.3
-283.9
3.1
34.2
-219.5
-4.7
-4.2
38.4r
222.6
17.8
-639.0 r
-4.9
-9.3
43.0r
217.6
25.3
—514.4r
-5.1
-4.7
77.3'
218.3
26.2
-589.8'
-5.4
-6.5
105.2'
258.7'
24.2
-723.9'
-5.2
-7.4
99.3'
231.4
21.3
-569.2'
-5.3
-3.4
98.0'
241.3'
22.0
-612.4'
-5.4
-6.5
105.2'
258.7'
24.2
-723.9'
-5.4
-2.7
131.6'
270.2'
7.9
-782.6'
-5.5
-2.9
115.0'
290.6
21.2'
-787.4'
-5.6
.1
130.4
290.2
23.6
-802.6
-5.8
-9.1
113.7
294.1
38.0
-785.0
38,736.6r
41,104.3r
44,389.7'
46,614.6'
44,977.5r
45,963.0'
46,614.6'
48,002.3'
49,558.5'
51,081.2
52,264.7
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
Private domestic nonfinancial sectors
Households
Nonfarm noncorporate business
Nonfinancial corporate business
State and local governments
U.S. government
Rest of the world
Financial sectors
Government-sponsored enterprises
Federally related mortgage pools
Monetary authority
Commercial banking
U.S. chartered banks
Foreign banking offices in United States
Bank holding companies
Banks in U.S. affiliated areas
Funding corporations
Thrift institutions
Life insurance companies
Other insurance companies
Private pension funds
State and local government retirement funds
Finance companies
Mortgage companies
Mutual funds
Closed-end funds
Money market mutual funds
Real estate investment trusts (REITs)
Brokers and dealers
Asset-backed securities issuers (ABSs)
Bank personal trusts
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
33 Total credit market debt
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Other liabilities
Official foreign exchange
Special drawing rights certificates
Treasury currency
Life insurance reserves
Pension fund reserves
Interbank claims
Deposits at financial institutions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Foreign deposits
Mutual fund shares
Security credit
Trade payables
Taxes payable
Investment in bank personal trusts
Miscellaneous
53 Total liabilities
60
61
62
63
64
65
Liabilities not identified as assets ( - )
Treasury currency
Interbank claims
Security repurchase agreements
Foreign deposits
Taxes payable
Miscellaneous
66 Total identified to sectors as assets
1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables
L.6 and L.7. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares.
Selected Measures
2.10
NONFINANCIAL BUSINESS ACTIVITY
A45
Selected Measures
Monthly data seasonally adjusted, and indexes 1 9 8 7 = 1 0 0 , except as noted
1995
1993
1994
1996
1995
June
July
Aug.
Oct.
Sept.
Nov.'
Dec.
Jan.'
Feb.
1 Industrial production1
111.5
118.1
121.9
121.4
121.5
122.7
122.8
122.2
122.6
122.7R
122.1
123.7
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
110.0
112.7
109.5
117.5
101.8
113.8
115.6
118.3
113.7
125.3
107.3
122.0
118.3
121.3
115.0
131.4
109.0
127.4
117.9
121.1
114.8
131.2
108.2
126.8
118.0
121.2
114.6
131.6
108.5
126.8
119.2
122.4
115.9
132.9
109.4
128.1
119.4
122.6
116.0
133.1
109.5
128.1
118.3
121.3
114.9
131.5
109.2
128.1
118.8
121.9
115.9
131.4
109.3
128.4
118.9'
121.8'
115.2'
132.2'
110.1'
128.4'
118.4
121.4
113.7
133.9
109.0
128.0
120.0
123.3
115.1
136.4
110.1
129.3
112.3
119.7
123.9
123.3
123.3
124.2
124.9
124.4
124.5
124.7
124.3
126.1
80.6
83.3
82.9
82.6
82.3
82.6
82.8
82.1
81.9
81.8
81.2
82.1
105.1
114.2
117.5r
122.0
119.0r
123.0
120.0r
119.0'
120.0
113.0'
114.0
108.0
108.4
94.3
94.8
95.3
112.9
141.3
136.0
119.3
142.4
134.7
111.3
95.6
95.1
97.4
116.3
148.3
142.6
125.0
149.2
145.1
114.4
98.2
96.9
98.3
119.5
157.4
150.5
129.3
157.8
152.7r
114.3
98.2
97.0
98.3
119.4
157.0
149.9
128.8
157.4
153.5
114.3
97.9
96.6
97.8
119.6
157.9r
151.3'
129.0
158.4r
152.9
114.6
97.9
96.6
97.9
119.9
158.0r
151.r
129.3
158.5r
153.9
114.7
97.9
96.4
97.7
120.1
158.8r
152.0'
129.6
159.3'
153.8
114.8
97.9
96.3
97.5
120.1
159.6'
153.0'
129.5
159.9'
153.4
115.0
97.8
96.2
97.4
120.4
160.0
152.9
129.5
160.5
154.7
115.1
98.0
96.4
97.7
120.6
161.0
153.7
130.0
161.5
155.8'
114.9
97.7
96.0
97.1
120.4
161.2
153.5
128.1
161.9
155.6
115.6
98.4
96.1
97.3
121.1
n.a.
n.a.
n.a.
n.a.
156.8
144.5
124.7
148.2
125.5
152.4
127.9
152.5
128.2
152.5
128.2
152.9
128.1
153.2
127.9
153.7
128.7'
153.6
128.6
153.5
129.0
154.4
129.5
154.9
129.4
2
3
4
5
6
7
Industry groupings
8 Manufacturing
9 Capacity utilization, manufacturing (percent)'
10 Construction contracts
3
11 Nonagricultural employment, total4
12
Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
15
Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
19
Disposable personal income5
20 Retail sales5
Prices6
21 Consumer (1982-84=100)
22 Producer finished goods (1982=100)
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in November 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve
Bulletin, vol. 82 (January 1996), pp. 16—25. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision,"
Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the Federal
Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge
Division.
4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers
employees only, excluding personnel in the armed forces.
2.11
5. Based on data from U.S. Department of Commerce, Survey of Current Business.
6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price
indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics,
Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series
mentioned in notes 3 and 6, can also be found in the Survey of Current Business.
Figures for industrial production for the latest month are preliminary, and many figures for
the three months preceding the latest month have been revised. See "Recent Developments in
Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp.
411-35. See also "Industrial Production Capacity and Capacity Utilization since 1987,"
Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605.
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data seasonally adjusted
1995
Category
1993
1994
1996
1995
July
Aug.
Sept.
Oct.
Nov.
Dec.'
Jan.'
Feb.
HOUSEHOLD SURVEY DATA 1
1 Civilian labor force2
Employment
Nonagricultural industries3
2
Agriculture
3
Unemployment
4
Number
Rate (percent of civilian labor force)
5
128,040
131,056
132,304
132,342'
132,298'
132,501'
132,473'
132,471'
132,352
132,903
133,018
116,232
3,074
119,651
3,409
121,460
3,440
121,423'
3,409
121,483'
3,376'
121,701'
3,335'
121,810'
3,434'
121,739'
3,323'
121,656
3,325
121,698
3,529
122,143
3,519
8,734
6.8
7,996
6.1
7,404
5.6
7,510'
5.7
7,439'
5.6
7,465'
5.6
7,229'
5.5
7,409'
5.6
7,371
5.6
7,677
5.8
7,355
5.5
110,525
113,423
116,597
116,575
116,838
116,932
117,000
117,212
117,357
117,169
117,874
18,003
611
4,642
5,787
25,675
6,712
30,278
18,817
18,064
604
4,916
5,842
26,362
6,789
31,805
19,041
18,406
579
5,244
6,194
27,156
6,948
32,788
19,282
18,353
577
5,226
6,195
27,184
6,938
32,820
19,282
18,357
575
5,233
6,217
27,177
6,947
32,986
19,346
18,322
573
5,262
6,206
27,245
6,957
33,047
19,320
18,301
571
5,287
6,217
27,256
6,977
33,076
19,315
18,272
567
5,295
6,240
27,362
6,991
33,185
19,300
18,307
569
5,297
6,231
27,376
7,001
33,248
19,328
18,232
568
5,314
6,230
27,319
7,003
33,204
19,299
18,258
574
5,435
6,246
27,501
7,028
33,491
19,341
ESTABLISHMENT SURVEY D A T A
6 Nonagricultural payroll employment4
7
8
9
10
11
12
13
14
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
1. Beginning January 1994, reflects redesign of current population survey and population
controls from the 1990 census.
2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly
figures are based on sample data collected during the calendar week that contains the twelfth
day; annual data are averages of monthly figures. By definition, seasonality does not exist in
population figures.
3. Includes self-employed, unpaid family, and domestic service workers.
4. Includes all full- and part-time employees who worked during, or received pay for, the
pay period that includes the twelfth day of the month; excludes proprietors, self-employed
persons, household and unpaid family workers, and members of the armed forces. Data are
adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this
time.
SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings.
A46
2.12
Domestic Nonfinancial Statistics • May 1996
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1995
QI
Q2
1995
Q3
Q4r
Output (1987=100)
Qi
Q2
1995
Q3
Q4
QI
Q2
Q4r
Q3
Capacity utilization rate (percent)2
Capacity (percent of 1987 output)
1 Total industry
121.8
121.4
122.3
122.5
143.7
145.0
146.4
147.8
84.8
83.7
83.6
2 Manufacturing
124.0
123.3
124.1
124.5
147.2
148.7
150.3
152.0
84.3
82.9
82.6
82.0
Primary processing3
Advanced processing4
119.1
126.3
117.7
126.0
117.1
127.5
117.1
128.1
133.4
153.8
134.4
155.6
135.4
157.5
136.4
159.5
89.3
82.2
87.6
81.0
86.5
80.9
85.9
80.3
5
6
/
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
132.0
105.3
121.2
125.4
115.6
171.9
167.9
147.7
131.4
102.9
119.1
121.9
115.1
174.4
171.2
140.5
133.0
104.6
118.2
121.3
113.9
178.9
178.4
140.7
134.2
105.8
118.9
121.4
115.2
186.8
182.9
140.5
156.8
117.4
126.9
130.9
121.5
194.8
191.6
172.1
158.9
118.0
127.5
131.7
121.9
199.6
197.6
174.2
161.1
118.6
128.0
132.5
122.2
204.5
203.9
176.4
163.4
119.2
128.6
133.2
122.5
209.7
210.4
178.7
84.2
89.7
95.6
95.8
95.2
88.2
87.7
85.8
82.7
87.2
93.4
92.6
94.5
87.4
86.7
80.6
82.5
88.2
92.3
91.6
93.2
87.5
87.5
79.8
82.1
88.7
92.4
91.1
94.0
89.1
86.9
78.6
89.6
88.7
86.9
79.0
132.2
132.2
132.1
132.1
67.8
67.1
65.8
59.8
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
115.2
116.4
121.0
125.3
127.5
108.3
114.4
113.7
121.2
124.0
122.9
108.0
114.3
110.9
119.5
124.6
118.3
109.2
113.9
109.4
117.9
126.2
123.0
107.7
136.6
129.1
130.6
153.7
132.1
116.0
137.5
130.1
131.5
154.7
133.8
116.2
138.4
131.1
132.5
155.6
135.4
116.4
139.4
132.1
133.4
156.6
137.1
116.6
84.3
90.2
92.7
81.5
96.5
93.3
83.2
87.5
92.1
80.1
91.9
92.9
82.6
84.6
90.2
80.1
87.3
93.8
81.7
82.8
88.4
80.6
89.7
92.4
100.6
118.4
118.9
100.7
120.7
120.4
100.2
124.7
125.0
98.1
123.9
123.7
112.0
134.4
131.7
112.0
134.8
132.1
112.0
135.2
132.5
112.1
135.6
133.0
89.8
88.0
90.3
89.9
89.5
91.1
89.4
92.3
94.3
87.5
91.4
93.1
1973
1975
Previous cycle5
High
Low
High
3
4
20 Mining
21 Utilities
22
Electric
Low
Latest cycle6
High
Low
1995r
1995
Feb.
Sept.
Oct.
82.8
1996
Nov.
Dec.
Jan.
Feb."
Capacity utilization rate (percent)2
1 Total industry
89.2
72.6
87.3
71.8
84.9
78.0
84.7
83.6
82.9
82.9
82.7
82.1
82.9
2 Manufacturing
88.9
70.8
87.3
70.0
85.2
76.6
84.2
82.8
82.1
81.9
81.8
81.2
82.1
92.2
87.5
68.9
72.0
89.7
86.3
66.8
71.4
89.0
83.5
77.9
76.1
89.3
82.0
86.8
81.1
86.0
80.5
85.9
80.3
85.7
80.1
84.9
79.6
85.7
80.6
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
88.8
90.1
100.6
105.8
92.9
68.5
62.2
66.2
66.6
61.3
86.9
87.6
102.4
110.4
90.5
65.0
60.9
46.8
38.3
62.2
84.0
93.3
92.8
95.7
88.7
73.7
76.1
74.2
72.0
75.2
84.2
89.4
95.2
95.4
94.9
83.0
89.4
94.4
95.7
92.6
82.0
88.8
90.1
86.5
94.6
82.2
87.9
93.9
94.7
92.9
82.1
89.5
93.3
92.2
94.6
81.6
87.3
94.2
95.1
93.0
82.8
88.1
95.4
95.5
95.3
96.4
87.8
93.4
74.5
63.8
51.1
92.1
89.4
93.0
64.9
71.1
44.5
84.0
84.9
85.1
71.8
77.0
56.6
88.2
87.5
86.2
87.9
87.8
80.9
88.4
87.6
78.5
88.9
87.2
78.7
89.8
85.9
78.7
89.8
84.3
75.4
90.6
85.9
78.1
77.0
66.6
81.1
66.9
88.4
78.8
67.9
65.0
60.6
58.8
60.0
63.0
64.0
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
87.9
92.0
96.9
87.9
102.0
96.7
71.8
60.4
69.0
69.9
50.6
81.1
87.0
91.7
94.2
85.1
90.9
89.5
76.9
73.8
82.0
70.1
63.4
68.2
86.7
92.1
94.8
85.9
97.0
88.5
80.3
78.8
86.7
79.0
74.8
84.6
84.1
89.8
92.7
81.1
95.6
93.1
82.4
84.1
89.2
80.4
88.7
94.5
82.2
84.3
90.0
81.1
89.4
91.8
81.6
82.5
87.1
80.5
90.3
92.1
81.3
81.7
88.0
80.4
89.5
93.3
80.7
78.1
85.9
80.3
81.2
81.7
86.3
80.2
94.2
95.7
94.4
95.6
99.0
88.4
82.5
82.7
96.6
88.3
88.3
80.6
76.2
78.7
86.5
92.6
94.8
86.1
83.1
86.7
90.0
88.2
90.4
89.2
90.7
92.5
87.6
89.8
93.1
87.7
92.5
93.0
87.2
91.9
93.1
86.8
90.7
92.2
88.1
89.6
91.7
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Primary processing3
Advanced processing4
20 Mining
21 Utilities
22 Electric
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in November 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve
Bulletin, vol. 82 (January 1996), pp. 16—25. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision,"
Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted
index of industrial production to the corresponding index of capacity.
3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic
materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass;
primary metals; and fabricated metals.
4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing
and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather
and products; machinery; transportation equipment; instruments; and miscellaneous manufactures.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value1
Monthly data seasonally adjusted
portion
1996
1995
1992
Group
1995
avg.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.r
Dec.r
Jan.
Feb.p
Index (1987 = 100)
MAJOR MARKETS
1 Total index
2 Products
3 Final products
Consumer goods, total
4
Durable consumer goods
5
Automotive products
6
Autos and trucks
7
Autos, consumer
8
9
Trucks, consumer
Auto parts and allied goods
10
Other
11
Appliances, televisions, and air
12
conditioners
Carpeting and furniture
13
14
Miscellaneous home goods
Nondurable consumer goods
15
Foods and tobacco
16
Clothing
17
Chemical products
18
Paper products
19
Energy
20
Fuels
21
Residential utilities
22
100.0
121.9
121.7
121.9
121.4
121.3
121.4
121.5
122.7
122.8
122.2
122.6
122.7
122.1
123.7
60.6
46.3
28.6
5.6
2.5
1.6
.9
.7
.9
3.0
118.3
121.3
115.0
124.2
130.7
131.4
103.1
181.7
127.8
118.6
118.3
121.1
114.9
127.3
135.3
138.2
111.5
185.2
127.9
120.4
118.5
121.5
115.3
126.0
134.4
137.5
111.2
183.6
126.7
118.6
117.7
120.9
114.4
124.9
131.7
132.8
105.5
180.9
128.0
119.0
117.5
120.6
114.1
121.6
127.1
127.4
99.4
177.1
125.0
116.7
117.9
121.1
114.8
122.3
129.1
129.5
99.2
183.6
126.8
116.3
118.0
121.2
114.6
121.4
125.3
123.9
101.0
163.9
126.6
118.1
119.2
122.4
115.9
124.0
130.7
132.0
100.6
188.2
126.6
118.1
119.4
122.6
116.0
125.8
132.9
133.1
102.6
187.7
130.8
119.6
118.3
121.3
114.9
123.4
128.5
128.6
100.2
179.1
126.7
118.9
118.8
121.9
115.9
124.9
130.5
129.8
100.2
182.8
130.2
119.9
118.9
121.8
115.2
126.2
132.8
132.1
99.5
190.6
132.7
120.4
118.4
121.4
113.7
120.1
125.4
123.9
92.8
179.9
127.0
115.5
120.0
123.3
115.1
124.6
132.6
133.4
99.9
193.6
129.4
117.5
.7
.8
1.5
23.0
10.3
2,4
4.5
2.9
2.9
.9
2.1
135.5
105.8
118.2
112.8
111.2
94.9
131.2
106.6
116.3
108.8
119.3
135.0
108.3
120.7
111.9
110.1
98.3
129.2
106.6
113.1
108.7
114.8
132.2
106.1
119.7
112.7
111.5
98.7
129.7
105.9
113.9
110.4
115.2
131.6
109.1
118.8
111.8
111.2
96.9
126.9
106.9
112.2
108.8
113.5
131.2
103.0
118.1
112.4
111.5
96.7
127.3
106.5
115.8
108.2
119.0
131.4
101.8
118.0
113.1
113.1
94.6
128.6
106.3
115.8
108.8
118.7
132.2
107.9
117.4
113.0
112.8
93.6
128.6
107.6
116.1
108.2
119.4
135.8
104.4
118.0
113.9
111.8
93.9
132.6
106.7
122.3
108.4
128.2
139.4
106.9
117.8
113.7
111.6
93.4
134.0
107.3
119.0
111.4
122.2
140.1
105.6
116.9
112.9
141.9
107.1
118.3
112.6
110.2
89.9
135.4
105.9
118.0
108.6
121.9
130.6
102.2
116.4
112.2
110.0
88.0
135.8
105.0
117.5
109.4
120.9
134.6
104.3
117.5
112.9
92.9
135.7
106.6
113.1
107.3
115.4
145.3
104.1
117.6
113.8
110.9
91.5
135.0
108.4
121.1
108.2
126.6
111.1
111.0
90.2
136.0
104.8
117.2
113.0
118.8
23
24
25
26
27
28
29
30
31
32
33
Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
17.7
13.7
5.7
1.4
4,0
2,6
1,2
1,4
3.3
.6
.2
131.4
155.7
198.1
373.4
127.4
136.3
140.1
123.2
65.9
87.1
152.7
131.0
154.3
188.7
334.9
127.2
145.9
147.7
127.2
68.2
88.8
144.6
131.4
155.1
191.6
343.6
126.9
145.7
146.2
126.3
67.8
87.2
145.8
131.3
155.0
194.5
356.4
126.1
142.9
141.5
123.2
67.1
89.3
146.6
130.8
154.3
193.9
362.1
126.5
139.6
137.8
122.7
66.8
90.5
148.3
131.2
155.1
196.0
363.2
126.2
140.3
139.5
122.6
66.8
86.8
149.6
131.6
155.7
197.2
371.7
127.1
139.8
139.9
122.6
66.5
88.4
148.6
132.9
157.5
201.0
379.6
129.1
138.0
141.3
122.2
66.1
89.5
155.9
133.1
158.2
203.0
390.0
128.7
137.9
143.3
123.3
65.2
88.3
158.0
131.5
156.5
206.5
402.9
128.6
122.3
135.7
120.9
64.4
83.5
158.9
131.4
156.9
208.1
417.8
129.1
119.6
134.2
121.4
62.9
83.1
161.8
132.2
158.2
209.7
431.6
129.1
124.1
135.3
121.7
62.0
83.8
164.4
133.9
160.7
213.5
446.2
129.3
130.0
129.0
121.8
61.6
85.1
158.1
136.4
163.8
218.7
458.7
130.4
133.9
136.0
122.6
61.8
89.7
34
35
36
Intermediate products, total
Construction supplies
Business supplies
14.3
5.3
9.0
109.0
108.2
109.6
109.5
109.5
109.6
109.2
109.2
109.3
108.2
108.0
108.5
108.2
106.6
109.4
108.2
107.2
109.1
108.5
107.3
109.5
109.4
107.0
111.0
109.5
108.4
110.3
109.2
108.3
109.9
109.3
108.7
109.9
110.1
110.4
110.1
109.0
108.0
109.8
110.1
110.5
110.0
37 Materials
38 Durable goods materials
Durable consumer parts
39
Equipment parts
40
Other
41
Basic metal materials
42
Nondurable goods materials
43
Textile materials
44
Paper materials
45
Chemical materials
46
Other
47
Energy materials
48
Primary energy
49
Converted fuel materials
50
39.4
20.8
4.0
7.5
9.2
3.1
8.9
1.1
1.8
3.9
2.1
9.7
6.3
3.3
127.4
141.5
138.5
163.0
126.2
125.7
119.8
109.2
120.4
124.4
116.5
106.6
101.8
116.1
127.1
140.2
142.6
155.4
127.0
126.4
121.5
113.5
121.6
125.7
117.8
106.4
102.3
114.5
127.2
140.3
140.4
157.3
127.0
126.7
121.5
113.6
122.5
125.6
117.4
106.4
102.1
114.9
127.0
139.8
137.9
158.9
125.9
126.1
121.7
113.2
122.3
125.6
118.4
106.6
102.2
115.5
127.2
139.8
135.9
160.3
125.6
125.5
122.2
112.8
125.6
126.2
116.9
107.2
102.3
116.9
126.8
139.7
135.8
161.7
124.5
123.5
120.4
109.0
121.0
125.2
117.4
107.2
103.0
115.5
126.8
140.2
133.9
164.4
124.4
124.9
118.9
102.6
123.9
124.4
113.8
107.5
102.3
118.1
128.1
142.3
138.4
167.1
124.9
123.1
118.8
109.2
120.4
123.1
114.6
108.5
101.4
122.8
128.1
144.1
139.8
169.1
126.8
127.0
117.8
106.2
117.0
123.3
115.1
105.8
101.2
115.0
128.1
143.9
138.6
169.4
126.5
124.3
118.7
107.3
121.4
122.9
114.6
105.5
101.7
113.1
128.4
145.3
140.1
171.0
127.9
128.1
116.6
104.8
114.3
122.7
114.1
105.7
100.8
115.4
128.4
144.9
139.2
170.9
127.5
127.0
117.3
103.1
115.0
122.0
118.8
105.9
100.4
116.8
128.0
145.2
139.6
171.2
127.7
126.9
115.6
99.2
113.3
121.7
115.4
105.1
99.7
116.1
129.3
147.4
140.1
175.7
129.0
129.5
116.6
103.9
113.5
122.1
116.1
105.0
100.1
115.0
97.2
95.2
121.5
120.9
121.1
120.4
121.3
120.6
120.9
120.3
121.0
120.5
121.1
120.5
121.2
120.7
122.3
121.7
122.4
121.8
121.9
121.3
122.3
121.7
122.3
121.7
122.0
121.5
123.3
122.8
98.2
27.0
25.7
118.2
113.9
114.9
118.4
113.4
115.1
118.5
113.8
115.4
117.9
113.1
114.6
117.8
113.3
113.9
117.8
113.9
114.7
117.8
114.0
114.5
118.9
114.8
115.1
118.9
114.9
115.7
118.1
114.0
115.1
118.4
115.0
115.3
118.3
114.1
114.9
117.6
113.1
113.3
119.0
113.9
114.9
12.5
157.0
154.7
155.8
156.2
155.8
156.5
157.2
158.9
159.5
158.4
159.0
160.4
163.8
166.5
12.2
29.7
133.0
134.9
134.6
134.5
134.8
134.6
133.7
134.3
132.5
134.4
133.2
133.8
133.2
133.7
134.4
135.1
134.3
136.1
131.6
136.2
130.8
136.6
131.1
136.5
132.6
136.2
134.8
138.0
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and trucks .
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
A48
2.13
Domestic Nonfinancial Statistics • May 1996
INDUSTRIAL PRODUCTION
Group
Indexes and Gross Value1—Continued
1992
propor-
SIC
code
1995
avg.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.r
Dec
Feb.p
Index (1987 = 100)
MAJOR INDUSTRIES
59 Total index
100.0
121.9
121.7
121.9
121.4
121.3
121.4
121.5
122.7
122.8
122.2
122.6
122.7
122.1
123.7
85.4
26.6
58.9
123.9
117.6
126.8
123.9
119.1
126.2
124.0
118.9
126.5
123.5
118.2
126.0
123.2
117.9
125.7
123.3
117.1
126.3
123.3
116.9
126.3
124.2
116.6
127.8
124.9
117.8
128.2
124.4
117.0
127.9
124.5
117.1
128.0
124.7
117.2
128.3
124.3
116.4
128.0
126.1
117.6
130.1
"'24
25
45.0
2.0
1.4
132.5
104.5
111.6
132.1
105.0
114.9
132.2
103.9
113.4
131.6
103.9
111.4
131.1
101.7
110.8
131.5
103.0
111.3
131.5
103.7
111.1
133.2
103.7
110.9
134.4
106.2
112.0
133.5
105.7
110.9
134.3
104.8
109.8
134.8
106.9
109.3
134.6
104.4
108.6
137.2
105.4
109.0
32
33
331,2
331PT
333-6,9
34
2.1
3.1
1.7
.1
1.4
5.0
104.1
119.2
122.4
114.7
114.8
113.9
104.7
120.8
124.9
116.4
115.3
115.0
104.7
121.3
125.8
116.8
115.4
114.3
103.4
120.2
123.5
114.7
115.7
112.3
104.1
119.5
123.0
113.0
114.8
113.7
103.8
117.5
119.2
112.9
114.9
113.7
103.2
118.3
119.3
111.5
116.5
112.4
103.0
115.4
117.7
114.2
111.9
114.3
103.8
121.0
127.0
118.6
113.2
115.1
104.5
115.7
115.1
111.3
115.8
114.0
104.9
120.8
126.1
116.4
113.8
114.5
104.2
120.1
123.1
118.0
116.0
114.9
104.5
121.5
127.1
113.9
114.1
114.4
105.9
123.2
127.9
60 Manufacturing
61 Primary processing
62 Advanced processing
79
80
Durable goods
Lumber and products
Furniture and fixtures
Stone, clay, and glass
products
Primary metals
Iron and steel
Raw steel
Nonfeirous
Fabricated metal products. . .
Industrial machinery and
equipment
Computer and office
equipment
Electrical machinery
Transportation equipment. . .
Motor vehicles and parts .
Autos and light trucks .
Aerospace and
miscellaneous
transportation
equipment
Instruments
Miscellaneous
81
82
83
84
85
86
87
88
89
90
91
Nondurable goods
Foods
Tobacco products
Textile null products
Apparel products
Paper and products
Printing and publishing
Chemicals and products . . . .
Petroleum products
Rubber and plastic products .
Leather and products
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
92 Mining
93 Metal
94 Coal
95 Oil and gas extraction
96 Stone and earth minerals
97 Utilities
98 Electric
99 Gas
117.0
115.3
35
8.0
177.8
171.8
172.4
174.3
174.6
174.4
176.0
179.5
181.3
183.8
186.5
190.0
191.6
194.8
357
36
37
371
371PT
1.8
7.2
9.5
4.8
2.5
373.4
174.9
113.3
141.9
131.3
334.9
167.7
118.5
148.4
138.6
343.6
169.4
118.0
147.6
137.9
356.4
169.6
115.7
143.0
132.9
362.1
171.1
113.2
138.8
127.3
363.2
173.0
113.4
139.7
129.2
371.7
175.7
111.6
136.7
124.3
379.6
178.7
114.1
142.1
131.6
390.0
180.8
114.1
143.3
132.8
402.9
182.4
109.3
139.7
128.4
417.8
183.6
108.6
140.7
129.6
431.6
182.8
109.6
141.2
131.5
446.2
181.2
108.9
135.7
123.3
458.7
186.4
112.1
140.8
132.7
372-6,9
38
39
4.7
5.4
1.3
85.8
110.7
122.7
89.7
110.5
124.1
89.5
110.9
123.3
89.4
111.2
122.7
88.5
109.6
122.3
88.1
110.9
123.1
87.6
110.2
121.4
87.2
111.4
122.4
85.9
111.3
122.9
80.0
111.4
122.2
77.7
111.5
123.3
79.2
110.0
123.5
83.2
110.4
122.3
84.5
111.9
123.7
20
21
22
23
26
27
28
29
30
31
40.5
9.4
1.6
1.8
2.2
3.6
6.8
9.9
1.4
3.5
.3
114.3
115.3
90.0
112.6
95.7
119.8
99.4
125.0
108.3
139.4
81.3
114.8
114.2
88.1
115.9
99.8
121.0
100.3
124.7
108.0
141.9
85.1
115.1
115.0
92.3
116.2
99.3
121.1
99.3
125.0
109.1
141.1
85.8
114.6
115.1
92.0
117.2
97.4
121.2
99.2
123.5
107.8
140.8
82.7
114.4
115.9
89.3
113.6
97.5
122.4
99.0
124.0
107.4
138.2
83.0
114.3
116.1
96.4
110.4
95.5
119.9
98.6
124.4
108.6
137.8
81.2
114.3
115.3
99.1
109.9
94.8
121.3
99.0
124.0
109.0
137.7
78.7
114.3
115.5
91.3
112.4
94.5
118.6
100.5
124.4
108.5
138.7
80.8
114.4
115.5
90.2
110.5
94.5
118.5
99.8
125.3
110.0
139.8
80.5
114.3
115.4
88.2
111.1
93.3
119.7
98.9
126.7
106.9
139.7
79.7
113.7
114.8
88.9
108.9
92.4
116.2
99.3
126.0
107.4
140.3
78.2
113.5
114.8
85.9
108.2
91.6
117.7
99.0
126.1
108.8
139.0
76.8
112.9
115.0
85.1
103.6
89.2
115.1
98.5
126.2
109.9
138.2
76.0
113.8
115.7
86.1
108.5
91.1
116.0
99.0
126.4
111.8
139.1
77.6
10
12
13
14
6.9
.5
1.0
4.8
.6
99.9
169.6
112.9
91.8
112.3
100.8
165.5
115.1
93.0
111.3
100.3
164.5
114.0
92.2
114.2
100.6
164.6
112.3
93.1
112.7
100.5
164.3
110.8
93.4
111.1
101.0
166.8
112.2
93.6
111.9
100.7
172.2
117.0
91.9
113.5
100.0
172.1
109.7
92.4
111.6
100.0
170.8
116.2
91.2
113.1
98.2
178.3
112.3
89.2
112.4
98.3
175.9
109.5
90.1
110.9
97.8
175.8
108.5
89.4
112.3
97.3
174.2
103.3
90.1
111.0
98.8
175.5
108.0
90.6
115.3
491,493PT
492,493PT
7.7
6.1
1.6
122.0
122.1
121.3
118.5
119.1
116.4
119.2
119.5
118.0
118.8
118.9
118.4
122.1
121.2
125.5
121.0
121.2
120.6
122.7
122.2
124.5
128.8
130.0
124.3
122.7
122.7
122.4
121.6
123.7
113.6
125.4
123.6
132.5
124.7
123.9
127.7
123.2
122.8
125.0
121.8
122.2
120.1
80.6
122.8
122.4
122.6
122.3
122.2
122.3
122.5
123.1
123.8
123.4
123.6
123.7
123.6
125.2
83.7
119.5
120.0
120.1
119.3
118.9
119.1
118.9
119.8
120.3
119.6
119.6
119.6
119.0
120.6
SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding office
and computing machines . . .
Gross value (billions of 1992 dollars, annual rates)
MAJOR MARKETS
102 Products, total
2,002.9
2,245.1
103 Final
KM Consumer goods
105 Equipment
106 Intermediate
1,552.2
1,033.4
518.8
450.7
1,748.2
1,130.0
618.2
496.9
2,246.9
2,252.0
2,236.5
2,231.5
2,239.1
2,238.8
2,257.8
2,268.1
2,240.3
2,255.8
2,261.1
2,246.4
2,283.0
1,748.6
1,131.1
617.5
498.3
1,755.0
1,135.5
619.5
497.0
1,743.1
1,125.2
617.9
493.4
1,737.4
1,122.3
615.1
494.0
1,745.6
1,128.4
617.1
493.5
1,743.2
1,124.0
619.2
495.6
1,760.5
1,135.7
624.8
497.3
1,768.2
1,141.1
627.1
499.9
1,741.9
1,125.1
616.7
498.4
1,756.8
1,139.3
617.5
499.0
1,757.1
1,134.7
622.4
504.1
1,747.8
1,118.1
629.7
498.6
1,779.9
1,137.8
642.2
503.0
1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For
the ordering address, see the inside front cover. The latest historical revision of the industrial
production index and the capacity utilization rates was released in November 1995. See "A
Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reser\'e
Bulletin, vol. 82 (January 1996), pp. 16-25. For a detailed description of the industrial
production index, see "Industrial Production: 1989 Developments and Historical Revision,"
Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204.
2. Standard industrial classification.
Selected Measures
2.14
A49
HOUSING AND CONSTRUCTION
Monthly figures at seasonally adjusted annual rates except as noted
1995
Item
1993
1994
1996
1995r
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
r
Dec.r
Jan.
Private residential real estate activity (thousands of units except as noted)
NEW UNITS
1,199
987
213
1,288
1,126
162
680
543
137
1,193
1,040
153
254
l,375 r
l,067 r
308r
1,457
1,198
259
762
558
204
1,347
1,160
187
304
1,333
999
334
1,354
1,076
278
778
549
229
1,311
1,065
247
340
666
293
670
337r
665
375
126.5r
147.8'
130.0r
I52.9r
133.0
157.6
18 Number sold
3,802r
3,946
Price of units sold (thousands
of dollars)2
19 Median
20 Average
106.8r
133.5'
109.8r
136.7r
1
2
3
4
5
6
7
8
9
10
11
12
13
Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period1
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped
Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period1
1,243
930
313
1,300
1,005
295
755
537r
218r
l,324 r
l,058 r
266r
335
1,275
958
317
1,301
1,036
265
755r
533r
222
1,256
l,049 r
207r
333
1,355
1,011
344
1,450
1,125
325
762'
539r
223
l,332 r
l,034 r
298r
337
1,368
1,044
324
1,401
1,135
266
772'
547r
225
l,247 r
l,019 r
228r
344
1,405
1,073
332
1,401
1,130
271
783'
555r
228
1,267'
l,009 r
258r
352
1,384
1,051
333
1,351
1,109
242
78 r
560r
22 l r
1,320r
1,039r
28 l r
354
1,448
1,069
379
1,458
1,129
329
790
562
228
1,360
1,081
279
355
1,478
1,110
368
1,425
1,150
275
803
572
231
1,213
995
218
352
1,372
1,050
322
1,447
1,140
307
813
578
235
1,358
1,072
286
352
667
347
724r
347
782r
344
707r
349
684r
350r
673r
360r
679
368
685
375
709
377
134.0
157.8
133.9
158.0
133.7
160.2
131.0
154.2
134.9
162.0
130.0
155.6r
135.2r
156.2r
137.0
160.7
138.0
165.1
130.0
152.0
3,807
3,470r
3,620r
3,800
3,970r
4,050r
4,090r
4,070r
4,000
3,870
3,720
112.9
138.9
108.0r
134.2
109. r
135.5r
116.2
143.3
116.0r
142.5r
117.6
144.5r
114.8r
140.2r
113.2r
138.7
114.3
139.5
113.9
138.7
114.8
141.2
1,243
905
338
1,278
1,017
261
7621
545r
217r
1,331r
l,085 r
246r
327
608r
349 r .
Price of units sold (thousands
16 Median
17 Average
EXISTING UNITS (one-family)
Value of new construction (millions of dollars)3
CONSTRUCTION
21 Total put in place
464,504
506,904
527,037
522,094
514,515
518,934
528,673
528,397
535,106
537,589
533,444
535,957
537,594
22 Private
23
Residential
24
Nonresidential
25
Industrial buildings
26
Commercial buildings
27
Other buildings
28
Public utilities and other
339,161
210,455
128,706
19,533
42,627
23,626
42,920
376,566
238,884
137,682
21,121
48,552
23,912
44,097
384,192
236,236
147,956
24,154
55,159
23,990
44,653
382,220
234,109
148,111
24,707
55,011
23,948
44,445
376,148
231,342
144,806
24,760
51,779
24,319
43,948
377,486
228,388
149,098
24,416
55,420
23,447
45,815
384,307
231,002
153,305
24,399
57,015
24,525
47,366
385,653
233,982
151,671
24,202
55,709
24,015
47,745
386,960
237,618
149,342
24,096
55,079
23,962
46,205
390,111
238,302
151,809
24,940
56,576
24,557
45,736
388,164
240,269
147,895
24,554
55,570
23,710
44,061
390,241
241,850
148,391
24,130
57,158
23,946
43,157
388,599
240,526
148,073
24,810
55,813
23,521
43,929
29 Public
30
Military
Highway
31
32
Conservation and development
33
Other
125,342
2,454
37,431
5,978
79,479
130,337
2,319
39,882
6,228
81,908
142,847
2,938
42,221
6,434
91,254
139,874
2,736
41,158
6,273
89,707
138,367
2,442
38,657
5,531
91,737
141,447
2,569
40,875
6,117
91,886
144,366
3,124
44,274
6,603
90,365
142,744
3,010
42,902
6,769
90,063
148,146
3,090
42,942
6,469
95,645
147,478
3,164
44,416
6,483
93,415
145,280
3,186
43,277
6,197
92,620
145,716
3,215
43,792
6,141
92,568
148,995
3,492
44,195
5,788
95,520
1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable with data for
previous periods because of changes by the Bureau of the Census in its estimating techniques.
For a description of these changes, see Construction Reports (C-30-76-5), issued by the
Census Bureau in July 1976.
SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are
private, domestic shipments as reported by the Manufactured Housing Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are
published by the National Association of Realtors. All back and current figures are available
from the originating agency. Permit authorizations are those reported to the Census Bureau
from 19,000 jurisdictions beginning in 1994.
A50
2.15
Domestic Nonfinancial Statistics • May 1996
CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier
Change from 3 months earlier
(annual rate)
Item
Change from 1 month earlier
1995
1995
Feb.
Index
level,
Feb.
1996 1
1996
1995
1996
Feb.
Mar.
June
Sept.
Dec.
Oct.
Nov.
Dec.
Jan.
Feb.
CONSUMER PRICES2
(1982-84=100)
1 All items
2.9
2.7
3.2
3.5
1.6
2.4
.3
.1
.2
.4
.2
154.9
2 Food
3 Energy items
4 All items less food and energy
Commodities
5
Services
6
3.1
1.7
3.0
1.9
3.4
2.3
1.2
2.9
1.7
3.4
.3
-1.5
4.1
2.6
4.8
3.6
5.8
3.0
.9
4.3
2.7
-10.5
2.8
2.0
3.0
1.9
1.9
2.2
1.7
2.5
.3
.3
.3
.2
.3
.0
-.9
.1
.1
.2
.1
1.1
.1
.1
.1
.1
1.9
.3
.4
.3
.1
.4
.2
-.1
.3
150.8
104.9
164.2
140.8
177.6
7 Finished goods
8
Consumer foods
y Consumer energy
Other consumer goods
10
n Capital equipment
1.7
1.3
2.3
1.5
1.9
2.0
1.9
1.8
2.3
1.7
1.6
-2.5
3.6
2.6
2.7
1.3
-2.5
1.5
2.9
1.8
1.6
8.8
-10.2
2.3
1.8
4.1
4.4
10.3
3.1
2.7
.2'
.3
.2'
.6
.2
3.7
.2
.1
.3
-.2
2.7
-.1
-.1
-.2
-.3
-.7
.1
.1
129.4
130.8
78.0
144.0
138.4
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
6.3
7.1
.6
.4
9.5
10.5
3.9
4.2
-.6
1.5
-.9
-3.2
-.2
-.2
— .2'
-.2
.1
-.4
.1
-.3
-.3
-.2
124.8
134.4
-8.0
1.9
16.4
10.6
6.6
-8.7
-4.6
-4.5
20.5
4.0
14.6
3.9
34.8
-21.0
-17.6
20.4
15.7
-19.6
2.4r
-.7
-2.4r
2.7r
-.3
2.3
-1.0
-.4
7.3
-.5
-1.1
-.5
115.1
74.2
161.6
PRODUCER PRICES
(1982=100)
Crude materials
14 Foods
15 Energy
16 Other
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.
.2'
-.R
-.R
.3r
,3r
1.0R
— 1 ,OR
2.1
-2.0r
.0
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
Selected Measures
2.16
A51
GROSS DOMESTIC PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1995
1994
Account
1993
1994
1995
Q4
QI
Q2
Q3 R
Q4
GROSS DOMESTIC PRODUCT
1
Total
6,550.2
6,931.4
7,247.7
7,080.0
7,147.8
7,196.5
7,298.5
7,348.1
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
4,454.1
530.7
1,368.9
2,554.6
4,698.7
580.9
1,429.7
2,688.1
4,923.4
606.5
1,485.2
2,831.7
4,796.0
602.7
1,459.0
2,734.4
4,836.3
593.0
1,471.6
2,771.7
4,908.7
604.0
1,486.9
2,817.9
4,960.0
615.8
1,491.4
2,852.8
4,988.8
613.2
1,491.2
2,884.4
871.1
850.5
598.8
171.8
427.0
251.7
1,014.4
954.9
667.2
180.2
487.0
287.7
1,067.5
1,029.3
739.9
200.1
539.8
289.4
1,050.1
991.4
697.9
188.8
509.1
293.5
1,072.0
1,013.9
723.6
194.5
529.0
290.4
1,050.3
1,016.3
734.4
197.6
536.8
281.9
1,074.8
1,036.6
746.3
202.5
543.8
290.3
1,072.7
1,050.5
755.3
205.8
549.5
295.2
20.6
20.1
59.5
45.9
38.1
40.7
58.7
55.1
58.1
60.8
34.0
36.1
38.2
41.5
22.2
24.4
-64.9
660.0
724.9
-96.4
722.0
818.4
-101.7
804.5
906.2
-99.7
763.6
863.3
-106.6
778.6
885.1
-122.4
796.9
919.3
-100.8
812.5
913.3
-76.9
830.1
907.0
6
7
8
9
10
11
Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
12
13
Change in business inventories
Nonfarm
14
15
16
Net exports of goods and services
Exports
Imports
17
18
19
Government consumption expenditures and gross investment
Federal
State and local
1,289.9
522.1
767.8
1.314.7
516.3
798.4
1,358.5
516.8
841.7
1,333.5
520.9
812.6
1,346.0
519.9
826.1
1,359.9
522.6
837.3
1,364.5
516.7
847.7
1,363.5
508.0
855.4
20
21
22
23
24
25
By major type of product
Final sales, total
Goods
Durable
Nondurable
Services
Structures
6,529.7
2,400.9
1,013.8
1,387.2
3,581.7
547.0
6,871.8
2,534.2
1,085.9
1,448.3
3,742.4
595.3
7,209.6
2,660.7
1,146.9
1,513.8
3,921.2
627.7
7,021.3
2,600.9
1,113.3
1,487.6
3.806.3
614.1
7,089.7
2,617.3
1,118.6
1,498.7
3,852.6
619.8
7,162.5
2,642.3
1,134.0
1,508.3
3,904.5
615.7
7,260.3
2,684.5
1,162.5
1,522.1
3,943.2
632.6
7,325.9
2,698.5
1,172.6
1,525.9
3,984.6
642.8
26
27
28
Change in business inventories
Durable goods
Nondurable goods
20.6
15.7
4.9
59.5
31.9
27.7
38.1
35.3
2.9
58.7
33.1
25.6
58.1
54.4
3.7
34.0
28.5
5.4
38.2
29.2
9.1
22.2
28.9
-6.7
6,383.8
6,604.2
6,740.8
6,691.3
6,701.6
6,709.4
6,768.3
6,783.8
5,194.4
5,495.1
n.a.
5,635.0
5,697.7
5,738.9
5,849.2
n.a.
4,178.9
3,393.3
619.6
2,773.6
785.6
363.6
422.0
4,235.9
3,442.3
624.1
2,818.2
793.7
367.8
425.9
4,281.1
3,480.3
626.9
2,853.4
800.8
370.6
430.2
485.2
454.7
30.6
MEMO
29
Total GDP in chained 1992 dollars
NATIONAL INCOME
30
Total
31
32
33
34
35
36
37
Compensation of employees
Wages and salaries
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income
38
39
40
41
3,809.4
3,095.2
584.2
2,511.0
714.2
333.3
380.9
4,008.3
3,255.9
602.5
2,653.4
752.4
350.2
402.2
4,209.4
3,419.7
621.7
2,798.0
789.7
365.7
424.0
4,083.7
3,320.2
608.3
2,711.9
763.6
355.8
407.8
4,141.6
3,363.0
616.3
2,746.6
778.6
360.8
417.7
Proprietors' income1
Business and professional1
Farm'
420.0
388.1
32.0
450.9
415.9
35.0
477.9
449.2
28.7
469.4
437.1
32.3
472.0
443.5
28.5
474.7
447.1
27.6
479.6
451.5
28.1
Rental income of persons"
102.5
116.6
122.2
121.9
120.6
121.6
120.9
125.7
42
43
44
45
Corporate profits'
Profits before tax3
Inventory valuation adjustment
Capital consumption adjustment
464.5
464.3
-6.6
6.7
526.5
528.2
-13.3
11.6
46
Net interest
398.1
392.8
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
n.a.
n.a.
-27.6
15.9
n.a.
568.9
570.4
-22.8
21.3
559.6
594.1
-51.9
17.4
561.1
588.4
-42.3
15.0
614.9
609.6
-9.3
14.6
n.a.
n.a.
391.1
403.9
402.6
397.8
n.a.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
-6.8
16.5
A52
2.17
Domestic Nonfinancial Statistics • May 1996
PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
1995
1994
Account
1993
1994
Q4
Q4
Q3
Q2
Qi
PERSONAL INCOME AND SAVING
5,479.2
2 Wage and salary disbursements
3
Commodity-producing industries
5
Distributive industries
7
Government and government enterprises
8 Other labor income
10
11
12
13
14
15
16
17
Business and professional1
Farm1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old age survivors, disability, and health insurance benefits
5,750.2
6,101.0
5,893.9
5,995.5
6,061.9
6,135.6
6,210.9
3,090.6
781.3
593.1
698.4
1,026.6
584.2
3,241.1
825.0
621.3
739.3
1,074.3
602.5
3,419.7
858.7
642.9
787.8
1,151.4
621.7
3,318.5
846.0
636.0
762.7
1,101.6
608.3
3,361.6
856.2
643.4
768.8
1,120.2
616.3
3,393.3
855.0
640.5
778.6
1,140.0
619.6
3,442.3
859.9
642.9
795.4
1,162.8
624.1
3.481.8
863.8
644.8
808.5
1.182.5
626.9
380.9
420.0
388.1
32.0
102.5
186.8
647.3
910.7
444.4
402.2
450.9
415.9
35.0
116.6
199.6
661.6
956.3
472.9
424.0
477.9
449.2
28.7
122.2
214.8
714.4
1,022.6
507.4
407.8
469.4
437.1
32.3
121.9
206.7
678.4
974.7
482.1
417.7
472.0
443.5
28.5
120.6
209.5
701.9
1,002.4
497.6
422.0
474.7
447.1
27.6
121.6
212.2
713.9
1,016.8
505.1
425.9
479.6
451.5
28.1
120.9
215.8
717.5
1,029.9
510.7
430.2
485.2
454.7
30.6
125.7
221.7
724.2
1,041.4
516.3
259.6
278.1
294.6
283.5
290.2
292.7
296.2
299.4
5,479.2
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
5,750.2
6,101.0
5,893.9
5,995.5
6,061.9
6,135.6
6,210.9
689.9
731.4
794.6
748.1
770.0
801.5
798.4
808.3
20 EQUALS: Disposable personal income
4,789.3
5,018.8
5,306.4
5,145.8
5,225.5
5,260.4
5,337.2
5,402.5
21
LESS: Personal outlays
4,572.9
4,826.5
5,065.7
4,927.9
4,972.2
5,049.0
5,104.6
5,137.2
22 EQUALS: Personal saving
216.4
192.4
240.7
217.8
253.3
211.4
232.6
265.4
24,724.2
16,807.5
18,075.0
25,332.6
17,150.4
18,320.0
25,620.7r
17,397.9r
18,752.0r
25,568.6
17,280.5
18,544.0
25,559.1
17,280.3
18,672.0
25,540.2
17,391.7
18,634.0
25,695.9
17,465.5
18,794.0
25,696.2
17,461.0
18,907.0
4.5
3.8
4.5
4.2
4.8
4.0
4.4
4.9
27 Gross saving
938.4
1,055.9
n.a.
1,064.9
1,110.5
1,092.3
1,155.7
n.a.
28 Gross private saving
964.5
1,006.0
n.a.
1,012.8
1,039.9
1,007.3
1,076.1
n.a.
29 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment
216.4
103.4
-6.6
192.4
120.2
-13.3
240.7
n.a.
-27.6
217.8
136.8
-22.8
253.3
120.6
-51.9
211.4
122.3
-42.3
232.6
162.0
-9.3
265.4
n.a.
-6.8
Capital consumption allowances
32 Corporate
33 Noncorporate
417.0
223.1
441.0
237.7
454.0
225.1
439.3
217.3
444.4
220.2
451.3
222.4
456.9
224.7
463.6
233.3
—159.8
-254.7
94.9
-90.2
-189.9
99.7
n.a.
n.a.
n.a.
-91.1
-190.4
99.3
-74.4
-173.3
99.0
-61.5
-160.5
99.0
-67.7
-161.6
93.9
37 Gross investment
993.5
1,087.2
n.a.
1,104.5
1,146.7
1,113.9
1,150.7
38 Gross private domestic investment
39 Net foreign investment
871.1
-88.2
1,014.4
-139.6
1,067.5
n.a.
1,050.1
-161.9
1,072.0
-144.4
1,050.3
-160.1
1,074.8
-148.9
55.1
31.3
21.6
-5.0
19
LESS: Personal tax and nontax payments
MEMO
Per capita (chained 1992 dollars)
23 Gross domestic product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
34 Government surplus, or deficit ( - ) , national income and
product accounts
Federal
State and local
35
36
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
n.a.
39.7
3,2
SOURCE. U.S. Department of Commerce, Survey of Current Business.
n.a.
n.a.
n.a.
n.a.
1,072.7
n.a.
n.a.
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted 1
1995
1994
Item credits or debits
1994
1993
1995
Q4
1 Balance on current account
2
Merchandise trade balance2
Merchandise exports
3
4
Merchandise imports
5
Military transactions, net
Other service transactions, net
6
7
Investment income, net
8
U.S. government grants
y
U.S. government pensions and other transfers
10
Private remittances and other transfers
n Change in U.S. government assets other than official
reserve assets, net (increase, - )
12 Change in U.S. official reserve assets (increase, - )
Gold
13
14
Special drawing rights (SDRs)
Ii
Reserve position in International Monetary Fund
16
Foreign currencies
17 Change in U.S. private assets abroad (increase, - )
18
Bank-reported claims3
Nonbank-reported claims
19
20
U.S. purchases of foreign securities, net
21
U.S. direct investments abroad, net
22 Change in foreign official assets in United States (increase, +)
23
U.S. Treasury securities
24
Other U.S. government obligations
Other U.S. government liabilities4
25
Other U.S. liabilities reported by U.S. banks3
26
Other foreign official assets5
27
28 Change in foreign private assets in United States (increase, +)
29
U.S. bank-reported liabilities3
30
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net
31
Foreign purchases of other U.S. securities, net
32
Foreign direct investments in United States, net
33
34 Allocation of special drawing rights
35 Discrepancy
36
Due to seasonal adjustment
Before seasonal adjustment
37
-99,925
-132,618
456,823
-589,441
448
57,328
9,000
-16,311
-3,785
-13,988
-151,245
-166,099
502,485
-668,584
2,148
57,739
-9,272
-15,814
-4,247
-15,700
-152,915
-174,469
574,879
-749,348
2,810
60,242
-11,402
-11,027
-3,114
-15,954
Ql
Q2
Q3
Q4P
-43,277
-43,488
133,926
-177,414
679
15,342
-4,571
-6,245
-1,063
-3,931
-38,454 r
-44,459'
138,325'
-182,784'
542
15,013'
-2,030'
-2,867
-682'
-3,971'
-43,142'
-48,654'
142,667'
-191,321'
587
14,726'
-2,684'
-2,284
-889'
-3,944'
-40,250
-43,326
145,050
-188,376
889
15,130
-5,163
-2,942
-887
-3,951
-31,073
-38,030
148,837
-186,867
792
15,369
-1,527
-2,934
-656
-4,087
-330
-322
-326
-931
-152
-180
246
-240
-1,379
0
-537
-44
-797
5,346
0
-441
494
5,293
-9,742
0
-808
-2,466
-6,468
2,033
0
-121
-27
2,181
-5,318
0
-867
-526
-3,925
-2,722
0
-156
-786
-1,780
-1,893
0
362
-991
-1,264
191
0
-147
-163
501
-182,880
29,947
1,581
-141,807
-72,601
-130,875
915
-32,621
-49,799
-49,370
-270,028
-59,004
-20,358
-93,769
-96,897
-56,258
-16,651
-12,449
-15,238
-11,920
-69,985'
-29,284
-11,518
-6,567
-22,616'
-97,453'
-39,982
-18,499
-21,731
-17,241'
-25,870
14,631
9,659
-33,998
-16,162
-76,720
-4,369
72,146
48,952
4,062
1,706
14,841
2,585
39,409
30,723
6,025
2,211
2,923
-2,473
110,483
68,773
3,734
1,814
32,896
3,266
-421
7,470
1,228
692
-9,856
45
22,308
10,131
1,126
-154
10,940
265
37,836
25,169
1,326
506
7,886
2,949
39,346
20,489
518
89
18,478
-228
10,993
12,984
764
1,373
-4,408
280
176,382
20,859
10,489
24,063
79,864
41,107
251,956
114,396
-4,324
33,811
58,625
49,448
315,842
19,906
27,578
99,081
94,576
74,701
85,136
34,676
-5,242
25,929
10,195
19,578
72,533
-531
10,113
29,910
15,816
17,225
86,496'
12,239
10,527
30,315
20,549
12,866'
77,198
-21,578
6,938
37,192
30,977
23,669
79,616
29,776
0
35,985
0
-14,269
0
6,684
35,985
-14,269
6,685
0
13,718
782
12,936
0
19,068'
6,162'
12,906'
0
19,165'
317'
18,847
0
-48,777
-7,076
-41,702
0
17,233
600
16,633
-31,473
-40,878
1,664
27,234
20,942
MEMO
Changes in official assets
38 U.S. official reserve assets (increase, - )
39 Foreign official assets in United States, excluding line 25
(increase, +)
40 Change in Organization of Petroleum Exporting Countries official
assets in United States (part of line 22)
-1,379
5,346
-9,742
2,033
-5,318
-2,722
-1,893
191
70,440
37,198
108,669
-1,113
22,462
37,330
39,257
9,620
-3,717
-1,184
4,482
1,120
-322
-11
6,278
-1,463
1. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38^10.
2. Data are on an international accounts basis. The data differ from the Census basis data,
shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from
merchandise trade data and are included in line 5.
3. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
4. Associated primarily with military sales contracts and other transactions arranged with
or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business.
A54
3.11
International Statistics • May 1996
U.S. FOREIGN TRADE1
Millions of dollars; monthly data seasonally adjusted
1996
1995'
Item
1993
1994
1995r
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan. p
1 Goods and services, balance
2
Merchandise
3
Services
-74,842
-132,618
57,777
-106,214
-166,101
59,887
-111,505
-174,555
63,050
-10,978
-16,177
5,199
-8,256
-13,453
5,197
-8,070
-13,697
5,627
-8,165
-13,692
5,527
-6,837
-12,125
5,288
-6,958
-12,306
5,348
-10,267
-15,421
5,154
4 Goods and services, exports
Merchandise
5
6
Services
644,579
456,824
187,755
701,200
502,484
198,716
783,705
574,877
208,828
63,688
46,310
17,378
66,545
49,023
17,522
67,574
49,717
17,857
66,652
48,920
17,732
67,393
49,523
17,870
68,109
50,398
17,711
66,597
48,871
17,726
7 Goods and services, imports
8
Merchandise
Services
9
-719,421
-589,442
-129,979
-807,414
-668,585
-138,829
-895,210
-749,432
-145,778
-74,666
-62,487
-12,179
-74,801
-62,476
-12,325
-75,644
-63,414
-12,230
-74,817
-62,612
-12,205
-74,230
-61,648
-12,582
-75,067
-62,704
-12,363
-76,864
-64,292
-12,572
1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.
3.12
SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.
U.S. RESERVE ASSETS
Millions of dollars, end of period
1995
Asset
1992
1993
1996
1994
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.p
71,323
1 Total
2 Gold stock, including Exchange
Stabilization Fund1
3 Special drawing rights2'3
4 Reserve position in International Monetary
Fund2
5 Foreign currencies4
73,442
74,335
91,534
86,648
87,152
86,224
85,755
85,832
82,717
84,270
11,056
8,503
11,053
9,039
11,051
10,039
11,053
11,487
11,053
11,146
11,051
11,035
11,051
10,949
11,050
11,034
11,050
11,037
11,052
10,778
11,053
11,106
11,759
40,005
11,818
41,532
12,030
41,215
14,761
54,233
14,470
49,979
14,681
50,385
14,700
49,524
14,572
49,099
14,649
49,096
14,312
46,575
14,813
47,298
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—$710 million; 1979—
$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1
Millions of dollars, end of period
1995
Asset
1992
1993
July
1 Deposits
Held in custody
2 U.S. Treasury securities"
3 Earmarked gold3
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.p
205
386
250
190
165
201
275
194
386
165
209
314.481
13,118
379,394
12,327
441,866
12,033
505,613
11,728
502,737
ll,728 r
506,572
11,728
507,075
11,709
522,950
11,702
522,170
11,702
532,776
11,702
559,741
11,689
1. Excludes deposits and U.S. Treasury securities held for international and regional
organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury
securities, in each case measured at face (not market) value.
1996
1994
3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not
included in the gold stock of the United States.
Summary Statistics
3.15
A55
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1995
Item
1993
1996
1994
July
2
3
4
5
6
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
8
9 Latin America and Caribbean
10
11 Africa
12 Other countries
Oct.
Nov.
520,828
r
604,548
612,972
619,517
618,417
632,446
629,660
643,813
69,721
151,100
73,28 l r
139,570
93,801
159,654
104,791
157,516
110,051
163,093
107,870
157,987
109,232
171,366
106,143
168,534
102,748
173,949
212,237
5,652
44,205
254,059
6,109
47,809
291,132
6,288
53,673
290,768
6,329
53,568
286,243
6,366
53,764
291,948
6,407
54,205
291,033
6,449
54,366
293,684
6,491
54,808
306,299
6,534
54,283
207,034
15,285
55,898
197,702
4,052
2,942
1 Total
Sept.
482,915
1
Aug.
215,274'
17,235
41,492
236,819
4,179
5,827
224,380
21,746
58,126
290,878
4,309
5,107
221,130
21,508
63,383
297,343
4,433
5,173
222,869
20,522
63,424
303,809
4,684
4,207
222,679
20,355
61,335
305,053
4,761
4,232
228,180
19,535
62,060
311,638
6,086
4,945
221,724
19,473
66,206
310,955
6,296
5,004
223,039
19,078
70,064
320,502
6,924
4,204
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
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
Dec.
Jan."
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 1989 benchmark survey of foreign portfolio investment in the United
States.
Reported by Banks in the United States1
Millions of dollars, end of period
1995
Item
1992
1993
1994
Mar.
1 Banks' liabilities
2 Banks' claims
Deposits
3
4
Other claims
5 Claims of banks' domestic customers2
72,796
62,799
24,240
38,559
4,432
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
78,259
62,017
20,993
41,024
12,854
89,661
60,279
19,670
40,609
10,587
June
Sept.
Dec.
96,190
72,694
24,440
48,254
8,732
106,715
77,171
28,915
48,256
9,890
102,160r
69,312
25,648
43,664
6,274
112,288
74,615
22,481
52,134
11,095
2. Assets owned by customers of the reporting bank located in the United States that
represent claims on foreigners held by reporting banks for the accounts of the domestic
customers.
A56
3.17
International Statistics • May 1996
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States'
Millions of dollars, end of period
1995
Item
1993
1994
1996
1995'
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.p
B Y HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
926,672
1,018,472
1,094,699
1,060,388
1,076,427'
1,074,023'
1,099,217'
1,105,264'
1,094,699
1,094,132
2 Banks' own liabilities
3
Demand deposits
4
Time deposits2
5
Other3
6
Own foreign offices4
626,919
21,569
175,106
111,971
318,273
722,155
23,386
186,512
116,699
395,558
748,784
24,452
192,988
139,172
392,172
731,017
24,104
191,793
141,518
373,602
745,680'
21,779
197,101'
139,335'
387,465'
735,136'
23,704'
188,153
136,550'
386,729'
762,708'
23,161'
202,532
146,456'
390,559
755,019'
23,114
193,829
154,115'
383,961
748,784
24,452
192,988
139,172
392,172
742,733
22,161
198,037
141,645
380,890
299,753
176,739
296,317
162,857
345,915
197,101
329,371
188,621
330,747
187,318
338,887
193,070
336,509
189,285
350,245
201,890
345,915
197,101
351,399
203,478
36,289
86,725
42,532
90,928
52,247
96,567
44,514
96,236
45,175
98,254
47,279
98,538
47,905
99,319
50,220
98,135
52,247
96,567
46,973
100,948
10,936
5,639
15
2,780
2,844
8,606
8,176
29
3,298
4,849
10,593
9,901
21
4,411
5,469
12,185
11,114
43
5,057
6,014
10,319'
9,015'
40
4,642
4,333'
13,011
12,120
24
4,315
7,781
10,294'
8,466'
77
3,901
4,488'
9,739'
8,284'
33
3,576
4,675'
10,593
9,901
21
4,411
5,469
10,337
9,343
30
4,227
5,086
5,297
4,275
430
281
692
350
1,071
551
1,304
826
891
354
1,828
1,342
1,455
962
692
350
994
764
1,022
0
149
341
520
486
493
341
1
0
478
0
537
0
0
0
0
1
230
0
220,821
64,144
1,600
21,653
40,891
212,851'
59,830'
1,564
23,511
34,755'
274,677
82,206
2,101
30,601
49,504
253,455
75,437
1,429
29,411
44,597
262,307
83,392
1,547
31,600
50,245
273,144
85,998
1,362
32,048
52,588
265,857
83,588
1,646
30,385
51,557
280,598
85,277
1,690
30,353
53,234
274,677
82,206
2,101
30,601
49,504
276,697
84,019
1,522
27,197
55,300
156,677
151,100
153,021
139,570
192,471
168,534
178,018
159,654
178,915
157,516
187,146
163,093
182,269
157,987
195,321
171,366
192,471
168,534
192,678
173,949
5,482
95
13,245
206
23,593
344
18,159
205
20,735
664
23,777
276
24,028
254
23,600
355
23,593
344
18,382
347
592,171
478,755
160,482
9,718
105,262
45,502
318,273
681,051'
566,161'
170,603'
10,633
111,171
48,799'
395,558
687,416
564,076
171,904
11,745
104,195
55,964
392,172
665,993
545,391
171,789
12,121
104,477
55,191
373,602
684,265'
562,825'
175,360
10,061
108,855
56,444
387,465'
670,548'
547,940'
161,211'
11,818'
98,861
50,532'
386,729'
699,343'
575,912'
185,353'
11,341'
114,650
59,362
390,559
687,674'
562,374'
178,413'
11,232
105,675
61,506'
383,961
687,416
564,076
171,904
11,745
104,195
55,964
392,172
684,390
555,788
174,898
10,250
111,098
53,550
380,890
113,416
10,712
114,890
11,240
123,340
15,634
120,602
15,535
121,440
15,489
122,608
16,170
123,431
16,429
125,300
16,687
123,340
15,634
128,602
15,995
17,020
85,684
14,505
89,145
13,035
94,671
10,583
94,484
10,142
95,809
9,690
96,748
9,754
97,248
13,070
95,543
13,035
94,671
13,740
98,867
102,744
78,381
10,236
45,411
22,734
115,964
87,988
11,160
48,532
28,296
122,013
92,601
10,585
53,781
28,235
128,755
99,075
10,511
52,848
35,716
119,536'
90,448'
10,131
52,004'
28,313
117,320
89,078
10,500
52,929
25,649
123,723
94,742
10,097
53,596
31,049
127,253
99,084
10,159
54,225
34,700
122,013
92,601
10,585
53,781
28,235
122,708
93,583
10,359
55,515
27,709
24,363
10,652
27,976
11,766
29,412
12,583
29,680
12,881
29,088
13,487
28,242
13,453
28,981
13,527
28,169
12,875
29,412
12,583
29,125
12,770
12,765
946
14,633
1,577
15,278
1,551
15,252
1,547
13,820
1,781
13,275
1,514
13,637
1,817
13,057
2,237
15,278
1,551
14,621
1,734
17,567
17,895
9,098
10,179
10,409
9,938
10,290
10,064
9,098
10,479
7 Banks' custodial liabilities5
8
U.S. Treasury bills and certificates6
9
Other negotiable and readily transferable
instruments7
10
Other
11 Nonmonetary international and regional organizations8. . .
12
Banks' own liabilities
Demand deposits
13
14
Time deposits2
Other3
15
16
17
18
19
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
20 Official institutions9
21
Banks' own liabilities
22
Demand deposits
23
Time deposits2
24
Other3
25
26
27
28
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
29 Banks10
30
Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits2
34
Other3
35
Own foreign offices4
36
37
38
39
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
40 Other foreigners
41
Banks' own liabilities
42
Demand deposits
43
Time deposits2
44
Other3
45
46
47
48
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers. Excludes bonds and notes of maturities longer than one year.
2. Excludes negotiable time certificates of deposit, which are included in "Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
principally of amounts owed to the head office or parent foreign bank, and to foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term securities, held
by or through reporting banks for foreign customers.
6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time certificates of
deposit.
8. Principally the International Bank for Reconstruction and Development, the InterAmerican Development Bank, and the Asian Development Bank. Excludes "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for International
Settlements.
10. Excludes central banks, which are included in "Official institutions."
Bank-Reported Data
3.17
A57
LIABILITIES TO FOREIGNERS Reported by Banks in the United States 1 —Continued
1995
Item
1993
1996
1995r
1994
July
Aug.
Sept.
Oct.
Nov,
Dec.
Jan.p
AREA
50 Total, all foreigners
926,672
1,018,472
1,094,699
1,060,388
1,076,427' l,074,023r 1,099,217r l,105,264r
1,094,699
1,094,132
51 Foreign countries
915,736
1,009,866
1,084,106
1,048,203
l,066,108r l,061,012r l,088,923r l,095,525r
1,084,106
1,083,795
52 Europe
Austria
53
54
Belgium and Luxembourg
Denmark
55
56 Finland
57
France
58 Germany
59
Greece
60
Italy
Netherlands
61
Norway
62
Portugal
63
64
Russia
Spain
65
Sweden
66
67
Switzerland
Turkey
68
United Kingdom
69
70
Yugoslavia"
Other Europe and other former U.S.S.R.12
71
377,911
1,917
28,670
4,517
1,872
40,316
26,685
1,519
11,759
16,096
2,966
3,366
2,511
20,496
2,738
41,560
3.227
133,993
372
33,331
393,141
3,653
21,978
2,784
1,436
45,217
27,191
1,393
10,885
16,033
2,338
2,846
2,714
14,675
3,094
41,956
3,341
163,793
245
27,769
364,270
3,537
24.815
2,921
2,831
39,198
24,085
2,011
10,670
15,212
1,394
2,761
7,949
10,012
3,245
43,610
4,124
139,438
177
26,280
377,662
3,923
24,803
2,131
2,390
42,880
33,794
2,311
10,223
11,743
1,119
3,165
6,313
9,127
2,209
42,192
2,973
151,341
214
24,811
364,270
3,537
24,815
2,921
2,831
39,198
24,085
2,011
10,670
15,212
1,394
2,761
7,949
10,012
3,245
43,610
4,124
139,438
177
26,280
367,840
3,437
24,881
2,979
2,421
39,697
25,975
1,998
9,616
11,055
1,067
3,055
7,858
11,837
2,555
40,834
4,301
152,627
163
21,484
376,545
3,869
24,598
2,468
2,270
43,314
31,257
2,398
10,823
10,685
2,087
2,933
7,265
10,000
2,896
41,644
3,523
150.781
146
23,588
362,080
5,221
24,039
2,476
1,972
38,117r
31,390
2,119
8,947
13,107
1,011
3,033
6,367
10,100
3,167
41,406
3,936
141,577
215
23,880r
377,103'
4,887
25,192
3,177
2,419
43,134r
26,362
2,033
10,251
15,609
1,048
2,902
7,338
13,467
2.035
42,588
4,067
147,448
210
22,936'
384,238
4,755
28,357
3,418
2,315
40,415'
26,798
2,265
10,759
15,541
1,287
2,718
8,979
10,809
3,720
41,178
4,010
148,384
171
28,359'
20,235
24,727
26,219
28,898
28,296
28,872
35,358
27,730
26,219
28,616
73 Latin America and Caribbean
74
Argentina
Bahamas
75
76
Bermuda
77
Brazil
78 British West Indies
79
Chile
80 Colombia
81
Cuba
82 Ecuador
Guatemala
83
84
Jamaica
Mexico
85
86 Netherlands Antilles
Panama
87
88
Peru
89
Uruguay
90
Venezuela
Other
91
362,238
14,477
73,820
8,117
5,301
193,699
3,183
3,171
33
880
1,207
410
28,019
4,686
3,582
929
1,611
12,786
6,327
423,797
17,203
104,002
8,445
9,145
229,525
3.126
4,615
13
875
1,121
529
12.250
5,217
4,551
900
1,597
13,983
6,700
438,379
12,236
94,622
4,897
23,816
237,529
2,825
3,666
8
1,315
1,275
481
24,582
4,685
4,264
974
1,835
11,812
7,557
436,258
12,404
88,731
7,092
21,232
245,078r
2,677
3,432
5
1,118
1,100
426
21,006
6,068
4,641
944
1,953
11,482
6,869r
447,521r
11,541r
96,017
6,794
26,743
244,305'
2,890
3,348'
3
1,160
1,122
444
22,120
4,778
4,998
1,028
l,933r
11,195
7,102r
434,352
11,180
92,850
5,996
27,592
234,643r
2.698
3,257
4
1,130
1,197
484
22,069
5,016
4,682
909
1,839
11,971
6,835'
439,956
11,539
96,287
6,589
27,366
236,053r
2,574
3,399
13
1,311
1.068
430
20,924
5,349
4,561
897
1,856
12,642
7,098r
436,613
13,034
87,719
6,561
27,364
240,353'
2,696
3,443
8
1,307
1,210
447
21,010
5,644
4,287
916
1,912
11,624
7,078'
438,379
12,236
94,622
4,897
23,816
237,529
2,825
3,666
8
1,315
1,275
481
24,582
4,685
4,264
974
1,835
11,812
7,557
436,302
13,524
96,500
5,028
21,863
234,801
2,978
3,713
7
1,236
1,058
500
23,632
4,448
4,030
1,025
1,800
12,660
7,499
92
144,527
155,642
240,806
192,264
199,624
223,08 l r
222,980'
232,298'
240,806
238,146
4,011
10,627
17,132
1,114
1,986
4,435
61.466
4,913
2,035
6,137
15,822
14,849
10,066
9,844
17,102
2,338
1,587
5,157
64,284
5,124
2,714
6,466
15,489
15,471
33,774
11,706
20,319
3,373
2,708
4,073
109,192
5,770
3,090
12,279
15,585
18,937
11,908
9,165
25,134
2,271
1,966
4,599
85,833
5,068
2,653
11,244
16,474
15,949
13,208
9,838
24,152
2,745
2,175
4,723
89,117
4,883
2,793
11,177
15,779
19,034
22,273
10,253
21,852
2,914
2,366
4,209
104,315
5,484r
2,786
11,803
16,895
17,931
22,364
10,729
21,879
3,010
2,174
3,812
104,566
5,368'
2,844
10,458
17,350
18,426
29,898
11,365
20,273
3,272
2,485
4,110'
105,546
5,593
2,889
12,144
16,277
18,446
33,774
11,706
20,319
3,373
2,708
4,073
109,192
5,770
3,090
12,279
15,585
18,937
35,733
12,310
20,295
3,262
2,011
4,371
106,727
5,079
2,394
13,121
14,390
18,453
6,633
2,208
99
451
12
1.303
2,560
6,523
1,879
97
433
9
1,343
2,762
7,641
2,136
104
739
10
1,797
2,855
6,966
1,840
94
1,002
13
1,364
2,653
6,989
1,924
87
746
15
1,667
2,550
7,033
2,127
79
467
9
1,792
2,559
7,211
1,948
66
934
4
1,544
2,715
7,793
1,907
60
1,206
9
1,826
2,785
7,641
2,136
104
739
10
1,797
2,855
7,679
1,848
99
1,217
11
1,774
2,730
4,192
3.308
884
6,036
5,142
894
6,791
5,648
1,143
6,155
5,473
682
7,133
5,459
1,674
5,594
4,777
817
6,315
5,007
1,308
6,853
5,758
1,095
6,791
5,648
1,143
5,212
4,334
878
10,936
6,851
3,218
867
8,606
7,537
613
456
10,593
8,944
893
756
12,185
10,496
834
855
10,319r
8,303r
1,010
1,006
13,011
11,279
876
856
10,294'
8,458'
552
1,284
9,739r
8,415'
371
953
10,593
8,944
893
756
10,337
9,354
349
634
72 Canada
93
94
95
96
97
98
99
100
101
102
103
104
China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries13
Other
105
106
107
108
109
110
111
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries14
Other
112 Other
Australia
Other
113
114
115 Nonmonetary international and regional organizations. . .
116 International15
117 Latin American regional16
118 Other regional17
11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
12. Includes the Bank for International Settlements. Since December 1992, has
included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
13. Comprises Bahrain, Iran, Iraq. Kuwait, Oman. Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
14. Comprises Algeria, Gabon, Libya, and Nigeria.
15. Principally the International Bank for Reconstruction and Development. Excludes
"holdings of dollars" of the International Monetary Fund.
16. Principally the Inter-American Development Bank.
17. Asian, African, Middle Eastern, and European regional organizations, except the Bank
for International Settlements, which is included in "Other Europe."
A58
3.18
International Statistics • May 1996
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1995
Area or country
1993
1994
July
1 Total, all foreigners
2 Foreign countries
3 Europe
4
Austria
5
Belgium and Luxembourg
6
Denmark
Finland
)
8 France
9 Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Russia
16 Spain
17 Sweden
18 Switzerland
19 Turkey
20 United Kingdom
21
Yugoslavia2
22 Other Europe and other former U.S.S.R.3
23 Canada
488,497r
486,263
1996
1995'
526,060
Aug.
Sept.
508,977
521,137r
r
r
486,092
481,672
524,208
507,660
519,720
123,741'
412
6,532
382
594
11,822
7,724
691
8,834
3,063
396
834
2,310
3,717
4,254
6,605
1,301
62,013'
473
1.784
125,807
692
6,738
1,030
691
12,768
7,608
604
6,043
2,957
504
938
949
3,530
4,098
7,493
874
66,858
265
1,167
130,211
565
7,557
404
1,055
14,770
8,842
441
5,364
5.049
665
888
660
2,166
2,060
7,074
785
67,389
147
4,330
127,027
616
8,073
443
967
15,443
7,149
445
6,070
4,478
1,206
987
495
3,640
3,580
7,540
725
63,871
230
1,069
127,681
685
8,257
428
1,001
15,200
8,731
386
5,757
4,354
1,047
916
506
3,494
2,840
7,362
768
64,607
230
1,112
Dec.
Jan.p
533,896
526,060
522,758
532,475
524,208
520,485
131,665
639
10,691
602
1,097
15,259
8,431
378
5,390
4,907
1,376
862
949
3,191
2,362
5,925
926
66,918
237
1,525
130,211
565
7,557
404
1,055
14,770
8,842
441
5,364
5,049
665
888
660
2,166
2,060
7,074
785
67,389
147
4,330
134,175
683
8,365
541
1,397
12,242
8,062
555
5,010
4,599
1,098
853
678
3,811
2,315
4,606
732
75,133
481
3,014
Oct.
Nov.'
515,059r
522,650r
r
520,992r
131,526'
880
7,103
634
1,916
14,807
8,081
404
5,651
4,471
1,457'
1,036
696
3,162
2,642
6,335'
830
69,022'
233
2,166
512,232
116,578
670
7,056
410
1,221
13,956
8,691
385
5,921
4,696
1,392
986
421
3,520
2,700
7,207
802
54,522
234
1,788
18,617'
18,298
16,120
18,903
17,306
18,623
17,835'
17,015
16,120
15,679
24 Latin America and Caribbean
25
Argentina
26
Bahamas
27
Bermuda
28 Brazil
29 British West Indies
30 Chile
Colombia
31
32 Cuba
33 Ecuador
34 Guatemala
35 Jamaica
36
Mexico
Netherlands Antilles
37
38
Panama
39 Peru
40
Uruguay
41
Venezuela
42
Other
225,238'
4,474
63,353
8,901
11,848
99,319
3,643
3,181
0
681
288
195
15,879'
2,683
2,894
657
969
2,910
3,363
224,060
5,845
66,775
8,481
9,582
95,766
3,819
4,004
0
681
366
258
17,728
1,580
2,184
997
503
1,831
3,660
257,356
6,439
59,236
5,718
13,297
123,899
5,024
4,550
0
823
457
323
18,028
9,229
3,003
1,829
474
1,656
3,371
238,847
6,242
59,906
6,373
12,511
114,504
4,264
4,183
0
768
340
277
17,152
2,730
2,520
1,333
424
1,650
3,670
250,189
6,151
61,224
8,944
12,962
117,892
4,663
4,270
0
725
350
290
16,832
6,313
2,503
1.368
424
1,596
3,682
250,335
6,114
62,888
6,295
13,022
120,013
4,388
4,358
0
805
361
287
16,486
5,602
2,594
1,464
386
1,480
3,792
251,307'
6,003
55,788
5,537
13,334
123,682
4,660
4,593
0
846
385
289
16,657'
9,233
2,846
1,501
441
1,826
3,686
266,623
6,090
60,030
8,096
12,983
129,460
4,775
4,516
0
847
424
285
16,826
12,048
3,049
1,577
451
1,678
3,488
257,356
6,439
59,236
5,718
13,297
123,899
5,024
4,550
0
823
457
323
18,028
9,229
3,003
1,829
474
1,656
3,371
256,948
6,185
60,284
5,011
13,252
121,895
5,842
4,622
0
841
439
299
16,986
11,043
2,793
1,762
422
1,575
3,697
43
111,775
107,350
115,298
117,212
118,264'
120,211'
114,575'
111,435
115,298
108,797
2,271
2,625
10,828
589
1,527
826
60,032
7,539
1,410
2,170
15,115
6,843
836
1,447
9,162
994
1,470
688
59,428
10,286
662
2,902
13,743
5,732
1,023
1,713
12,895
1,846
1,678
739
61,303
14,067
1,350
2,581
9,638
6,465
1,206
1,915
14,756
1,732
1,516
749
61,280
13,134
598
2,670
11,948
5,708
1,163
1,600
14,520
1,905
1,620
700
63,301
12,866'
623
2,594
11,403
5,969
1,316
1,584
15,677
1,944
1,596
712
63,075
12,992'
725
2,594
11,723
6,273
1,241
1,595
12,539
1,924
1,623
886
61,878
13,357'
673
2,568
9,963
6,328
1,069
1,484
10,713
1,823
1,583
728
60,522
14,107
789
2,538
9,604
6,475
1,023
1,713
12,895
1,846
1,678
739
61,303
14,067
1,350
2,581
9,638
6,465
1,014
1,407
13,235
1,864
1,369
668
55,901
14,345
814
2,376
8,142
7,662
3,861
196
481
633
4
1,129
1,418
3,028
225
429
671
2
842
859
2,727
210
514
465
1
552
985
2,907
193
645
531
7
659
872
2,826
194
653
544
2
614
819
2,705
202
647
454
2
615
785
2,783
224
457
604
1
586
911
2,732
268
433
462
1
578
990
2,727
210
514
465
1
552
985
2,798
208
514
483
3
589
1,001
63 Other
64
Australia
Other
65
2,860
2,037
823
3,129
2,186
943
2,496
1.622
874
2,764
2,072
692
3,454
2,072
1,382
3,780
2,639
1,141
2,966
2,095
871
3,005
1,969
1,036
2,496
1,622
874
2,088
1,819
269
66 Nonmonetary international and regional organizations6. . .
2,405
4,591
1,852
1,317
1,417
2,827
1,658
1,421
1,852
2,273
44
4b
46
47
48
49
50
51
52
53
54
55
China
People's Republic of China
Republic of China (Taiwan)
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries4
Other
56
57
58
59
60
61
62
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries5
Other
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
3. Includes the Bank for International Settlements. Since December 1992, has included all
parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in "Other Europe."
Bank-Reported Data
3.19
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars
A59
Reported by Banks in the United States1
Millions of dollars, end of period
1996
1995
Type of claim
1993
1994
1995'
July
Aug.
Sept.'
508,977
19,734
293,151
113,753
59,798
53,955
82,339
521,137'
21,449
297,060'
112,029
57,718
54,311
90,599'
515,059
22,292
298,240
107,294
50,764
56,530
87,233
Oct.'
Nov.'
Dec.
522,650
20,888
303,979
103,928
47,107
56,821
93,855
533,896
19,376
308,911
99,530
42,905
56,625
106,079
526,060
22,468
303,963
98,542
37,331
61,211
101,087
1 Total
575,613'
601,615
648,746
2 Banks' claims
3
Foreign public borrowers
4
Own foreign offices2
5
Unaffiliated foreign banks
6
Deposits
7
Other
8
All other foreigners
488,497r
29,228r
285,510
100,865
49,892
50,973
72,894r
486,263
23,410
283,548
111,682
59,230
52,452
67,623
526,060
22,468
303,963
98,542
37,331
61,211
101,087
87,116
41,734
115,352
64,829
122,686
57,529
132,601
66,067
122,686
57,529
31,186
36,008
45,265
45,190
45,265
14,196
14,515
19,892
21,344
19,892
7,918'
8,427'
8,380
8,821
Jan.P
8,380
9 Claims of banks' domestic customers3
10
Deposits
11
Negotiable and readily transferable
instruments4
12
Outstanding collections and other
claims
647,660
648,746
522,758
23,090
299,864
97,401
35,753
61,648
102,403
MEMO
13 Customer liability on acceptances
14 Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States5
29,150
32,565
34,221
30,245
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 US. banks, includes amounts due from own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
3.20
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
35,452
34,274
33,828
30,955
30,245
n.a.
principally of amounts due from the head office or parent foreign bank, and from foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial
paper.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of
deposit denominated in U.S. dollars issued by banks abroad.
Reported by Banks in the United States1
Millions of dollars, end of period
1995
Maturity, by borrower and area2
1992
1993'
1994
Mar.
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By borrower
Maturity of one year or less
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other3
Sept.
Dec.p
195,119
202,566
202,705
199,836
219,628'
216,646
221,559
163,325
17,813
145,512
31,794
13,266
18,528
172,662
17,828
154,834
29,904
10,874
19,030
176,870
15,597
161,273
25,835
7,670
18,165
171,297
15,792'
155,505'
28,539
7,689
20,850
191,144'
15,963'
175,181'
28,484'
7,726
20,758'
184,482
14,747
169,735
32,164
7,721
24,443
175,766
14,970
160,796
45,793
7,492
38,301
53,300
6,091
50,376
45,709
1,784
6,065
57,413
7,727
60,490
41,418
1,820
3,794
58,473
7,482
62,477
40,696
1,376
6,366
54,763
7,472
64,073
38,227
1,227
5,535
60,749
8,219
71,732'
44,365
1,447
4,632
52,374
7,721
73,977
44,219
1,261
4,930
53,901
6,097
72,118
40,041
1,270
2,339
5,367
3,287
15,312
5,038
2,380
410
5,310
2,581
14,025
5,606
1,935
447
3,901
2,521
12,293
4,744
1,561
815
4,533
3,622
13,074
5,228
1,605
477
3,704
3,110
14,243'
5,493
1,389
545
4,170
2,815
17,491
5,707
1,389
592
4,733
2,654
27,707
7,983
1,430
1,286
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
June
2. Maturity is time remaining until maturity,
3. Includes nonmonetary international and regional organizations.
A60
3.21
International Statistics • May 1996
CLAIMS ON FOREIGN COUNTRIES
Held by U.S. and Foreign Offices of U.S. Banks1
Billions of dollars, end of period
1993
Area or country
1991
1994
1995
1992
Mar.
Dec.
June
Sept.
Dec.
Mar.
June
Sept.
Dec.p
344.7
407.7r
478.9r
487.9r
487.3r
499.6
539.9
523.9
524.5
548.9
137.5
.0
11.3
8.3
5.6
.0
1.9
3.4
68.4
5.8
22.2
131.3
5.6
15.3
9.1
6.5
2.8
2.3
4.8
59.7
6.3
18.8
r
161.8
7.4
12.0
12.6
7.7
4.7
2.7
5.9
84.3r
6.9
17.6
180.8
8.0
16.6
29.9
15.6
4.1
2.9
6.3
70.0
7.8
19.6
175.4
8.6
19.1
25.0
14.0
3.6
3.0
6.5
65.1
9.7
20.7
183.8
9.6
21.2
24.2
11.6
3.5
2.6
6.2
78.4
10.0
16.5
193.0
7.0
19.7
24.7
11.8
3.6
2.7
6.9
85.8
9.8
21.0
208.3
8.3
20.1
31.3
10.6
3.6
3.1
6.2
89.9
10.7
24.5
200.3
7.3
19.3
29.9
10.7
4.3
3.0
6.1
86.7
10.8
22.1
195.3
8.5
17.5
28.6
12.6
3.9
2.7
6.0
79.8
11.7
24.0
200.2
12.1
19.2
26.8
11.5
3.3
2.7
6.1
80.7
9.4
28.5
13 Other industrialized countries
14
Austria
15
Denmark
16
Finland
17
Greece
18
Norway
19
Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
22.8
.6
.9
.7
2.6
1.4
.6
8.3
1.4
1.8
1.9
2.7
24.0
1.2
.9
.7
3.0
1.2
.4
8.9
1.3
1.7
1.7
2.9
25.6
.4
1.0
.4
3.2
1.7
.8
9.9
2.1
2.6
1.1
2.3
42.2
1.0
1.1
1.0
3.8
1.6
1.2
13.2
2.4
3.1
1.2
12.7
42.6
1.0
1.1
.8
4.6
1.6
1.1
12.6
2.1
2.8
1.2
13.7
42.5
1.0
.9
.8
4.3
1.6
1.0
14.0
1.8
1.0
1.2
15.0
45.3
1.1
1.2
1.0
4.5
2.0
1.2
13.6
1.6
2.7
1.0
15.4
43.9
.9
1.6
1.1
4.9
2.4
1.0
14.1
1.4
2.5
1.4
12.6
43.2
.7
1.1
.5
5.0
1.8
1.2
13.3
1.4
2.6
1.4
14.3
49.7
1.2
1.6
.7
5.1
2.3
1.7
13.3
2.0
3.0
1.3
17.4
50.0
.9
2.6
.8
5.7
3.2
1.1
11.6
1.9
4.7
1.2
16.4
25 OPEC 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
14.5
.7
5.4
2.7
4.2
1.5
15.8
.6
5.2
2.7
6.2
1.1
17.4
.5
5.1
3.3
7.4
1.2
22.9
.5
4.7
3.4
13.2
1.1
21.6
.5
4.5
3.2
12.4
1.1
21.6
.4
3.9
3.3
13.0
1.0
23.9
.5
3.7
3.8
15.0
.9
19.5
.5
3.5
4.0
10.7
.7
20.3
.7
3.5
4.1
11.4
.6
22.3
.7
3.0
4.4
13.5
.6
22.3
.7
2.7
5.0
13.3
.6
31 Non-OPEC developing countries
64.3
72.6
83. l r
94.4r
94.7r
93.r
95.9
98.4
103.6
103.5
112.0
4.8
9.6
3.6
1.7
15.5
.4
2.1
6.6
10.8
4.4
1.8
16.0
.5
2.6
7.7
12.0
4.7
2.1
17.8r
.4
3.1
8.7
(2.7
5.1
2.2
19.0r
.6
2.8
9.9
12.0
5.1
2.4
18.6r
.6
2.7
10.5
9.3
5.5
2.4
19.8r
.6
2.8
11.2
8.4
6.1
2.6
18.4
.5
2.7
11.4
9.2
6.4
2.6
17.8
.6
2.4
12.3
10.0
7.1
2.6
17.6
.8
2.6
10.9
13.1
6.4
2.9
16.3
.7
2.6
12.9
13.1
6.8
2.9
17.3
.8
2.8
.3
4.1
3.0
.5
6.8
2.3
3.7
1.7
2.4
.7
5.2
3.2
.4
6.6
3.1
3.6
2.2
3.1
2.0
7.3
3.2
.5
6.7
4.4
3.1
3.1
3.1
.8
7.6
3.4
.4
14.1
5.2
3.4
3.0
3.1
.8
7.1
3.7
.4
14.3
5.2
3.2
3.3
3.2
1.0
6.9
3.9
.4
14.4
3.9
2.9
3.5
3.4
1.1
9.2
4.2
.4
16.2
3.1
3.3
2.1
4.7
1.1
8.5
3.8
.6
16.9
3.9
3.0
3.3
4.9
1.4
9.0
4.0
.6
18.7
4.1
3.6
3.8
3.5
1.7
9.0
4.4
.5
18.0
4.3
3.3
3.9
3.6
1.8
9.4
4.4
.5
19.1
4.4
4.1
4.9
4.5
.4
.7
.0
.7
.2
.6
.0
1.0
.4
.7
.0
.8
.4
.7
.0
1.0
.5
.7
.0
.9
.3
.7
.0
.9
.3
.6
.0
.8
.4
.6
.0
.7
.4
.9
.0
.6
.4
.9
.0
.7
.4
.7
.0
.9
2.4
.9
.9
.7
3.1
1.9
.6
.6
3.2
1.6
.6
.9
3.4
1.5
.5
1.4
3.0
1.2
.5
1.4
3.0
1.1
.5
1.5
2.7
.8
.5
1.4
2.3
.6
.4
1.2
1.8
.4
.3
1.0
3.4
.6
.4
2.3
4.2
1.0
.3
2.8
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama6
62
Lebanon
63
Hong Kong
64
Singapore
65
Other
53.8
11.9
2.3
15.5
1.2
1.4
.1
14.3
7.1
.0
58.1
6.9
6.2
21.5
1.1
1.9
.1
13.9
6.5
.0
73.0
10.9
8.9
18.0
2.6
2.4
.1
18.7
11.2
.1
78.9
13.7
8.9
17.9
3.5
2.0
.1
19.7
13.0
.0
80.6
13.3
6.5
23.8
2.5
1.9
.1
21.8
10.6
.0
77.2
13.8
6.0
21.5
1.7
1.9
.1
20.3
11.8
.0
72.0
10.7
8.4
19.9
1.5
1.3
.1
19.9
10.1
.1
85.3
13.3
8.7
19.4
.9
1.1
.1
22.4
19.2
.0
82.4
8.4
8.5
23.7
2.5
1.3
.1
23.1
14.8
.0
86.4
12.6
6.3
23.4
5.5
1.3
.1
23.7
13.3
.1
103.0
15.0
6.3
32.0
9.9
1.4
.1
25.1
13.1
.1
66 Miscellaneous and unallocated8
47.9
39.7
43.4
55.9
69.7
65.8
66.7
82.0
72.1
63.7
56.9
1 Total
2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
5
Germany
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12
Japan
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
39
40
41
42
43
44
45
46
47
Asia
China
People's Republic of China
Republic of China (Taiwan)
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 3
52 Eastern Europe
53
Russia4
54
Yugoslavia5
55
Other
343.5
1. The banking offices covered by these data include U.S. offices and foreign branches of
U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered
include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include
large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository
institutions as well as some types of brokers and dealers. To eliminate duplication, the data
are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign
branch of the same banking institution.
These data are on a gross claims basis and do not necessarily reflect the ultimate country
risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks
are available in the quarterly Country Exposure Lending Survey published by the Federal
Financial Institutions Examination Council.
2. Organization of Petroleum Exporting Countries, shown individually; other members of
OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United
Arab Emirates); and Bahrain and Oman (not formally members of OPEC).
3. Excludes Liberia. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Soviet Union.
5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia.
6. Includes Canal Zone.
7. Foreign branch claims only.
8. Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported Data
3.22
A61
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period
1994
Type of liability, and area or country
1991
1992
1995
1993
June
Sept.
Dec.
Mar.
June
Sept.
1 Total
44,708
45,511
50,597
57,193
59,163
55,656
51,530
51,236
48,921
2 Payable in dollars
3 Payable in foreign currencies
39,029
5,679
37,456
8,055
38,728
11,869
43,410
13,783
43,412
15,751
39,645
16,011
37,246
14,284
35,530
15,706
35,169
13,752
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
22,518
18,104
4,414
23,841
16,960
6,881
29,226
18,545
10,681
35,256
23,461
11,795
37,973
24,091
13,882
34,301
20,165
14,136
31,118
18,047
13,071
30,545
16,277
14,268
27,485
15,133
12,352
7 Commercial liabilities
8
Trade payables
y
Advance receipts and other liabilities
22,190
9,252
12,938
21,670
9,566
12,104
21,371
8,802
12,569
21,937
9,911
12,026
21,190
9,550
11,640
21,355
10,005
11,350
20,412
9,844
10,568
20,691
10,527
10,164
21,436
10,061
11,375
10
11
Payable in dollars
Payable in foreign currencies
20,925
1,265
20,496
1,174
20,183
1,188
19,949
1,988
19,321
1,869
19,480
1,875
19,199
1,213
19,253
1,438
20,036
1,400
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
12,003
216
2,106
682
1,056
408
6,528
13,387
414
1,623
889
606
569
8,610
18,810
175
2,539
975
534
634
13,332
25,396
524
1,590
939
533
631
19,962
25,614
661
2,241
1,467
648
633
18,649
22,018
495
1,727
1,961
552
688
15,858
17,880
612
2,046
1,755
633
883
11,103
18,571
778
1,101
1,589
530
1,056
12,486
16,746
347
1,365
1,670
474
948
10,876
19
Canada
292
544
859
698
618
629
1,817
893
797
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
4,784
537
114
6
3,524
7
4
4,053
379
114
19
2,850
12
6
3,359
1,148
0
18
1,533
17
5
3,125
1,052
115
18
1,297
13
5
3,139
1,112
15
7
1,344
15
5
3,021
926
80
207
1,160
0
5
3,024
931
149
58
1,231
10
5
2,808
851
138
58
1,118
3
4
2,762
849
144
111
1,018
3
3
27
28
29
Asia
Japan
Middle Eastern oil-exporting countries'
5,381
4,116
13
5,818
4,750
19
5,956
4,887
23
5,998
5,064
24
8,450
7,248
31
8,448
7,314
35
8,201
7,182
27
8,080
7,153
25
6,992
6,308
25
30
31
Africa
Oil-exporting countries2
6
4
6
0
133
123
9
0
133
123
135
123
156
122
151
122
149
122
52
33
109
30
19
50
40
42
39
8,701
248
1,039
1,052
710
575
2,297
7,398
298
700
729
535
350
2,505
6,827
239
655
684
688
375
2,039
6,887
254
680
670
649
473
2,309
6,868
287
744
552
674
391
2,350
6,773
241
728
604
722
327
2,444
6,642
271
642
482
536
327
2,848
6,776
311
504
556
448
432
2,902
7,263
349
528
660
566
255
3,351
32
33
34
35
36
37
38
39
Allother 3
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
1,014
1,002
879
1,070
1,068
1,037
1,235
1,146
1,219
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,355
3
310
219
107
307
94
1,533
3
307
209
33
457
142
1,658
21
350
214
27
481
123
2,000
2
418
215
24
703
192
1,783
6
200
147
33
672
189
1,857
19
345
161
23
574
276
1,368
8
260
96
29
356
273
1,836
3
397
107
12
420
204
1,607
1
219
143
5
357
175
48
49
50
Asia
Japan
Middle Eastern oil-exporting countries1
9,334
3,721
1,498
10,594
3,612
1,889
10,980
4,314
1,534
10,832
4,250
1,835
10,370
4,128
1,663
10,741
4,555
1,576
10,151
4,110
1,787
9,978
3,531
1,790
10,275
3,475
1,647
51
52
Africa
Oil-exporting countries2
715
327
568
309
453
167
510
241
468
264
428
256
463
248
481
252
589
241
1,071
575
574
638
633
519
553
474
483
53
Other
3
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.
A62
International Statistics • May 1996
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States
Reported by Nonbanking Business Enterprises in
Millions of dollars, end of period
1994
Type of claim, and area or country
1991
1992
1995
1993
June
Sept.
Dec.
Mar.
June
Sept.
1 Total
45,262
45,073
49,159
52,510
54,833
57,888
52,218
58,030
53,646
2 Payable in dollars
3 Payable in foreign currencies
42,564
2,698
42,281
2,792
45,161
3,998
48,003
4,507
50,460
4,373
53,805
4,083
48,425
3,793
54,145
3,885
49,918
3,728
By type
4 Financial claims
b
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
y
Payable in dollars
10
Payable in foreign currencies
27,882
20,080
19,080
1,000
7,802
6,910
892
26,509
17,695
16,872
823
8,814
7,890
924
27,771
15,717
15,182
535
12,054
10,862
1,192
30,234
17,824
17,203
621
12,410
11,057
1,353
32,236
19,118
18,502
616
13,118
11,903
1,215
33,897
18,507
18,026
481
15,390
14,306
1,084
29,606
17,115
16,458
657
12,491
11,275
1,216
34,567
22,021
21,349
672
12,546
11,388
1,158
29,862
17,945
17,364
581
11,917
10,689
1,228
n Commercial claims
12
Trade receivables
13
Advance payments and other claims
17,380
14,468
2,912
18,564
16,007
2,557
21,388
18,425
2,963
22,276
19,475
2,801
22,597
19,825
2,772
23,991
21,158
2,833
22,612
20,415
2,197
23,463
21,312
2,151
23,784
21,657
2,127
14
lb
Payable in dollars
Payable in foreign currencies
16,574
806
17,519
1,045
19,117
2,271
19,743
2,533
20,055
2,542
21,473
2,518
20,692
1,920
21,408
2,055
21,865
1,919
16
17
18
19
20
21
22
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
13,441
13
269
283
334
581
11,534
9,331
8
764
326
515
490
6,252
7,299
134
826
526
502
530
3,585
7,372
84
995
459
472
539
3,673
8,914
115
931
413
503
777
5,023
7,936
86
800
540
429
523
4,649
7,630
146
808
527
606
490
4,040
7,923
155
731
355
601
514
4,787
7,840
160
753
301
522
530
4,924
23
Canada
24
2b
26
27
28
2y
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
34
3b
36
37
38
39
40
41
42
43
2,642
Japan
Middle Eastern oil-exporting countries'
Africa
Oil-exporting countries2
All other
3
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
1,833
2,032
3,470
3,812
3,581
3,848
3,705
3,526
10,717
827
8
351
9,056
212
40
13,893
778
40
686
11,747
445
29
16,224
1,336
125
654
12,699
872
161
16,465
1,376
39
466
13,390
629
32
16,608
1,121
52
411
13,694
691
31
19,536
2,424
27
520
15,228
723
35
16,109
940
37
528
13,531
583
27
21,160
2,355
85
502
17,013
638
27
15,316
1,552
35
851
11,787
487
50
640
350
5
864
668
3
1,657
892
3
2,221
1,344
1
2,176
661
19
1,871
953
141
1,504
621
4
1,231
467
3
2,160
1,404
4
57
1
83
9
99
1
185
0
197
0
373
0
141
9
138
9
188
6
385
505
460
521
529
600
374
410
832
8,193
194
1,585
955
645
295
2,086
8,451
189
1,537
933
552
362
2,094
9,105
184
1,947
1,018
423
432
2,377
8,976
189
1,788
940
294
686
2,445
8,810
178
1,766
883
331
538
2,505
9,540
213
1,881
1,027
311
557
2,556
8,947
199
1,790
977
324
556
2,388
9,190
218
1,669
1,023
341
612
2,459
8,896
224
1,706
997
338
438
2,513
44
Canada
1,121
1,286
1,781
1,875
1,906
1,988
2,010
2,003
2,004
45
46
47
48
4y
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,655
13
264
427
41
842
203
3,043
28
255
357
40
924
345
3,274
11
182
460
71
990
293
3,904
18
295
500
67
1,048
304
3,963
34
246
471
49
1,137
388
4,117
9
234
612
83
1,243
348
4,140
17
208
695
55
1,106
295
4,368
21
210
777
83
1,108
319
4,543
101
245
745
175
1,026
325
4,591
1,899
620
4,866
1.903
693
6,014
2,275
704
6,330
2,498
642
6,679
2,591
617
6,982
2,655
708
6,200
1,911
689
6,514
2,010
707
6,826
1,998
775
52
53
b4
Japan
Middle Eastern oil-exporting countries'
55
56
Africa
Oil-exporting countries"
430
95
554
78
493
72
480
83
447
61
454
67
468
71
478
60
544
74
57
Other3
390
364
721
711
792
910
847
910
971
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.
Securities Holdings and Transactions
3.24
A63
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1995
1996
Transaction, and area or country
1994
1996
1995
Jan.Jan.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.p
U.S. corporate securities
STOCKS
1
2
Foreign purchases
Foreign sales
3
4
350,593
348,716
462,884
451,709
43,574
41,948
42,444
40,009
41,908
39,366
44,450
44,218
41,492
42,860
41,937
39,071
46,479
44,372
43,574
41,948
Net purchases, or sales (—)
1,877
11,175
1,626
2,435
2,542
232
-1,368
2,866
2,107
1,626
Foreign countries
1,867
11,380
1,623
2,443
2,565
295
-1,328
2,877
2,109
1,623
6,714
-201
2,110
2,251
-30
840
-1,160
-2,111
-1,142
-1,234
1,162
29
771
4,847
-1,099
-1,837
3,507
-2,283
8,001
-1,517
5,814
-337
2,503
-2,725
2
68
1,954
164
239
660
639
-165
645
-487
-507
-40
94
6
52
2,045
261
8
364
-20
1,445
-425
881
-24
107
141
-5
-136
1,836
17
-104
431
-847
2,330
-10
1,811
-5
-961
-1,076
17
-123
-1,319
-126
-136
197
9
-1,114
-197
752
-77
1,048
-598
34
54
1,647
-54
5
528
449
878
-74
-2,920
-8
61
56
-17
-17
954
-58
-131
230
227
543
405
1,361
-63
342
-406
-26
-96
1,028
-382
-11
373
191
1,277
-175
219
148
883
1,231
-1
7
1,954
164
239
660
639
-165
645
-487
-507
-40
94
6
52
10
-205
3
-8
-23
-63
-40
-11
-2
3
5
6
7
8
9
10
11
12
13
14
15
16
17
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia
Japan
Africa
Other countries
18
Nonmonetary international and
regional organizations
BONDS 2
19
20
Foreign purchases
Foreign sales
21
289,586
229,665
291,950 R
206,951
26,525
17,596
23,911
14,949
24,742
16,741
27,212
17,759
26,367
19,199
31,642
20,741
21,698
21,117
26,525
17,596
Net purchases, or sales (—)
59,921
84,999r
8,929
8,962
8,001
9,453
7,168
10,901
581
8,929
22
Foreign countries
59,036
85,453r
8,887
9,129
7,982
9,431
7,236
10,948
553
8,887
23
24
25
26
27
28
29
30
31
32
33
34
35
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia
Japan
Africa
Other countries
37,065
242
657
3,322
1,055
31,642
2,958
5,442
771
12,153
5,486
-7
654
68,735 R
1,143
5,806
1,463
494
56,140 R
2,569
6,141
1,869
5,659
2,250
234
246
5,688
839
-26
156
171
3,803
104
2,096
-194
1,272
338
-16
-63
6,340
7
51
557
317
5,063
169
1,145
348
1,189
1,026
-13
-49
5,561
538
1,163
45
-99
3,775
415
754
281
919
1,008
64
-12
6,959
63
916
203
343
4,511
349
1,719
241
139
-371
23
1
6,361
732
113
204
148
4,542
139
-61
-246
1,126
645
-223
140
9,759
101
894
219
101
6,999
20
1,426
188
-705
-899
240
20
1,309
137
236
101
-381
925
181
-848
187
-293
-904
86
-69
5,688
839
-26
156
171
3,803
104
2,096
-194
1,272
338
-16
-63
36
Nonmonetary international and
regional organizations
42
-167
19
22
-68
-47
28
42
885
-454
Foreign securities
37
38
39
40
41
42
Stocks, net purchases, or sales (—)
Foreign purchases
Foreign sales
Bonds, net purchases, or sales (—)
Foreign purchases
Foreign sales
-48,071
386,106
434,177
-9,224
848,368
857,592
-50,720'
345,498 R
396,218 R
-46,928'
892,578
939,506'
-6,395
33,462
39,857
-4,439
84,527
88,966
-8,188
28,582
36,770
-4,079
67,187
71,266
-5,904
30,867
36,771
-3,755
72,277
76,032
-7,959
28,712
36,671
-5,206
83,396
88,602
-5,755
29,382
35,137
-7,580
76,889
84,469
-1,725
30,307
32,032
-6,235'
78,563
84,798'
-6,830
32,366
39,196
-3,989
80,310
84,299
-6,395
33,462
39,857
-4,439
84,527
88,966
43
Net purchases, or sales (—), of stocks and bonds . . . .
-57,295
—97,648r
-10,834
-12,267
-9,659
-13,165
-13,335
-7,960 r
-10,819
-10,834
44
Foreign countries
-57,815
-96,843"
-10,865
-12,048
-9,486
-13,220
-13,226
-7,882 r
-10,878
-10,865
45
46
47
48
49
50
51
Europe
Canada
Latin America and Caribbean
-3,516
-7,475
-18,334
-24,275
-17,427
-467
-47,913'
-7,871'
-7,071'
-33,744'
-24,773'
-327'
-3,943
-2,649
-3
-4,645
-3,427
-96
-7,955
-1,301
-185
-3,158
-3,586
-45
-2,539
-851
817
-7,250
-5,499
34
-2,928
-3,471
781
-7,533
-5,360
-117
-7,243
1,311
-3,883
-2,503
-849
5
-4,609
-494'
-184'
-2,001
-1,388
19
-6,099
-14
-802
-4,389
-3,685
-44
-3,943
-2,649
-3
-4,645
-3,427
-96
471
596
303
48
-913
-613
470
471
52
Nonmonetary international and
regional organizations
31
-219
-173
55
-109
-78
59
31
Japan
Africa
Other countries
-3,748
520
83r
-805
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities and securities of U.S. government
agencies and corporations. Also includes issues of new debt securities sold abroad by U.S.
corporations organized to finance direct investments abroad.
A64
3.25
International Statistics • May 1996
MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions'
Millions of dollars; net purchases, or sales (—) during period
Area or country
1994
1996
1995
1996
1995
Jan.Jan.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.p
1 Total estimated
78,801
133,991r
14,008
31,871
26,082
-11,072
4,819
15,307
-9,454
14,008
2 Foreign countries
78,637
133,552
13,703
31,382
26,442
-11,002
4,650
14,936
-9,016
13,703
38,542
1,098
5,709
1,254
794
481
23,365
5,841
3,491
50,000r
591
6,136
1,891
358
-472
34,778r
6,718
252
7,281
149
1,385
807
-45
76
1,167
3,742
1,867
13,336
-53
1,039
883
124
206
7,315
3,822
720
9,170
580
2,995
-1,468
100
-515
7,950
-472
-825
6,377
143
2,568
-1,915
61
818
5,570
-868
-2,284
-4,608
-25
2,831
160
92
174
-5,965
-1,875
-1,864
821
81
52
833
-30
-568
1,309
-856
-43
-1,120
171
452
381
-285
-664
-4,377
3,202
208
7,281
149
1,385
807
-45
76
1,167
3,742
1,867
-10,383
-319
-20,493
10,429
47,317
29,793
240
-570
48,609
-2
25,152
23,459
32,319
16,863
1,464'
908
-2,648
-142
8,922
-11,428
6,920
2,619
515
-232
513
-114
1,034
-407
16,490
6,658
-1
324
11,265
-359
5,364
6,260
7,322
5,430
-130
-360
-5,299
-524
1,171
-5,946
-10,055
-4,021
108
151
17,453
-92
3,033
14,512
-6,879
-10,115
501
47
13,496
232
3,723
9,541
-107
1,316
458
311
3,762
61
4,710
-1,009
-11,843
-5,695
252
-275
-2,648
-142
8,922
-11,428
6,920
2,619
515
-232
164
526
305
210
489
311
-45
105
-360
-140
-10
-70
-196
-6
169
2
185
371
368
-43
-438
-347
-154
439r
9r
261
-115
305
210
-45
78,637
41,822
36,815
133,552
39,625
93,927
13,703
12,615
1,088
31,382
16,790
14,592
26,442
-364
26,806
-11,002
-4,525
-6,477
4,650
5,705
-1,055
14,936
-915
15,851
-9,016
2,651
-11,667
13,703
12,615
1,088
-38
0
3,075
-658
0
3,582
0
-50
0
-624
0
-826
0
-1,085
0
-658
3
4
.1
6
7
8
9
in
u
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada
12
13
14
15
16
17
18
19
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Japan
Africa
Other
20 Nonmonetary international and regional organizations
21
International
22
Latin American regional
MEMO
23 Foreign countries
24
Official institutions
Other foreign
25
Oil-exporting countries
26 Middle East 2
27
1. Official and private transactions in marketable U.S. Treasury securities having an
original maturity of more than one year. Data are based on monthly transactions reports.
Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.
2
1,890
0
0
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
Interest and Exchange Rates
3.26
A65
DISCOUNT RATES OF FOREIGN CENTRAL BANKS1
Percent per year, averages of daily figures
Rate on Mar. 31, 1996
Rate on Mar. 31, 1996
Country
Country
Month
effective
Austria..,
Belgium. ,
Canada.. ,
Denmark .
France2 ..
3.0
3.0
5,25
3.75
3.8
Dec.
Dec.
Mar.
Feb.
Mar.
1995
1995
1996
1996
1996
1. Rates shown are mainly those at which the central bank either discounts or makes
advances against eligible commercial paper or government securities for commercial banks or
brokers. For countries with more than one rate applicable to such discounts or advances, the
rate shown is the one at which it is understood that the central bank transacts the largest
proportion of its credit operations.
3.27
Month
effective
Germany . ..
Italy
Japan
Netherlands .
Switzerland .
3.0
9.0
.5
2.75
1.5
Dec.
June
Sept.
Dec.
Dec.
1995
1995
1995
1995
1995
2. Since February 1981, the rate has been that at which the Bank of France discounts
Treasury bills for seven to ten days.
FOREIGN SHORT-TERM INTEREST RATES1
Percent per year, averages of daily figures
1995
Type or country
1993
1994
1996
1995
Sept.
1
2
3
4
5
6
7
8
9
10
Eurodollars
United Kingdom
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan
3.18
5.88
5.14
7.17
4.79
6.73
8.30
10.09
8.10
2.96
4.63
5.45
5.57
5.25
4.03
5.09
5.72
8.45
5.65
2.24
5.93
6.63
7.14
4.43
2.94
4.30
6.43
10.43
4.73
1.20
1. Rates are for three-month interbank loans, with the following exceptions: Canada,
finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate.
Oct.
Nov.
Dec.
Jan.
Feb.
5.74
6.71
6.66
4.09
2.67
3.85
5.86
10.36
4.20
.56
5.81
6.69
6.66
4.00
2.15
3.88
6.73
10.74
4.14
.51
5.75
6.61
6.02
3.91
1.98
3.73
5.74
10.65
3.87
.54
5.64
6.42
5.91
3.82
1.94
3.58
5.47
10.58
3.74
.52
5.40
6.31
5.58
3.51
1.65
3.20
4.56
10.05
3.47
.55
5.14
6.13
5.22
3.26
1.61
3.00
4.29
9.90
3.23
.61
Mar.
5.28
6.02
5.23
3.25
1.68
3.09
4.14
9.82
3.25
.60
A66
3.28
International Statistics • May 1996
FOREIGN EXCHANGE RATES'
C u r r e n c y u n i t s per d o l l a r e x c e p t as n o t e d
1995
Country/currency unit
1993
1994
1996
1995
Oct.
1
2
3
4
5
6
7
8
9
10
Australia/dollar 2
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
11
12
13
14
15
16
17
18
19
20
Hong Kong/dollar
India/rupee
Ireland/pound 2
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
N e w Zealand/dollar 2
Norway/krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound 2
MEMO
31 United States/dollar 3
Dec.
Jan.
Feb.
Mar.
67.993
11.639
34.581
1.2902
5.7795
6.4863
5.7251
5.6669
1.6545
229.64
73.161
11.409
33.426
1.3664
8.6404
6.3561
5.2340
5.5459
1.6216
242.50
74.073
10.076
29.472
1.3725
8.3700
5.5999
4.3763
4.9864
1.4321
231.68
75.699
9.955
29.105
1.3458
8.3353
5.4912
4.2781
4.9374
1.4143
232.65
74.534
9.974
29.154
1.3534
8.3334
5.4923
4.2489
4.8882
1.4173
234.16
74.053
10.142
29.615
1.3693
8.3350
5.5791
4.3361
4.9565
1.4406
238.06
74.171
10.296
30.081
1.3669
8.3384
5.6618
4.4510
5.0117
1.4635
240.91
75.557
10.321
30.115
1.3752
8.3338
5.6749
4.5532
5.0440
1.4669
242.21
77.136
10.391
30.371
1.3656
8.3495
5.7074
4.6066
5.0583
1.4776
241.54
7.7357
31.291
146.47
1,573.41
111.08
2.5738
1.8585
54.127
7.1009
161.08
7.7290
31.394
149.69
1,611.49
102.18
2.6237
1.8190
59.358
7.0553
165.93
7.7357
32.418
160.35
1,629.45
93.96
2.5073
1.6044
65.625
6.3355
149.88
7.7317
34.656
161.32
1,605.69
100.84
2.5324
1.5846
65.899
6.2397
148.94
7.7338
34.710
160.54
1,592.67
101.94
2.5389
1.5877
65.224
6.2536
148.68
7.7345
34.966
159.18
1,593.88
101.85
2.5399
1.6127
64.996
6.3579
151.03
7.7329
35.812
158.18
1,584.87
105.75
2.5563
1.6388
66.195
6.4275
151.90
7.7323
36.595
158.10
1,570.00
105.79
2.5487
1.6424
67.495
6.4103
152.49
7.7325
34.485
157.21
1,562.43
105.94
2.5417
1.6540
68.079
6.4277
152.93
1.6158
3.2729
805.75
127.48
48.211
7.7956
1.4781
26.416
25.333
150.16
1.5275
3.5526
806.93
133.88
49.170
7.7161
1.3667
26.465
25.161
153.19
1.4171
3.6286
772.82
124.64
51.047
7.1406
1.1812
26.495
24.921
157.85
1.4231
3.6502
767.20
122.51
52.539
6.8301
1.1453
26.925
25.115
157.79
1.4128
3.6499
769.78
121.81
53.199
6.6088
1.1437
27.257
25.166
156.25
1.4148
3.6632
771.31
122.53
53.808
6.6393
1.1631
27.315
25.164
154.05
1.4211
3.6413
787.13
123.38
53.874
6.7405
1.1818
27.406
25.298
152.88
1.4115
3.7420
780.12
123.65
53.716
6.8775
1.1967
27.485
25.250
153.60
1.4095
3.9293
781.31
124.39
53.748
6.7318
1.1959
27.400
25.251
152.71
84.25
84.10
84.14
93.18
91.32
1. Averages of certified noon buying rates in N e w York for cable transfers. Data in this
table also appear in the B o a r d ' s G.5 (405) monthly statistical release. For ordering address,
see inside front cover.
2. Value in U.S. cents.
Nov.
85.07
86.23
86.41
86.57
3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten
industrial countries. T h e weight for each of the ten countries is the 1972-76 average world
trade of that country divided by the average world trade of all ten countries combined. Series
revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), p. 700).
A67
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List Published
Semiannually,
with Latest Bulletin
Reference
Issue
Anticipated schedule of release dates for periodic releases
SPECIAL TABLES—Data Published
Irregularly,
December 1995
with Latest Bulletin
Page
A76
Reference
Title and Date
Issue
Page
Assets and liabilities of commercial banks
March 31, 1993
June 30, 1993
September 30, 1993
December 31, 1993
August
November
February
May
1993
1993
1994
1994
A70
A70
A70
A68
August
November
February
May
1995
1995
1996
1996
A68
A68
A68
A68
October
November
February
May
1995
1995
1996
1996
A68
A72
A72
A72
October
August
October
January
1992
1995
1995
1996
A70
A76
A72
A68
December
May
August
March
1991
1992
1992
1993
A79
A81
A83
A71
September 1995
A68
Terms of lending at commercial banks
May 1995
August 1995
November 1995
February 1996
Assets and liabilities of U.S. branches and agencies of foreign banks
March 31, 1995
June 30, 1995
September 30, 1995
December 31, 1995
Pro forma balance sheet and income statements for priced service operations
June 30, 1992
March 31, 1995
June 30,1995
September 30, 1995
Assets and liabilities of life insurance companies
June 30, 1991
September 30, 1991
December 31, 1991
September 30, 1992
Residential lending reported under the Home Mortgage Disclosure Act
1994
A68
4.23
Special Tables • May 1996
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 5-9, 1996'
Commercial and industrial loans
Type and maturity
of loan
Amount of
loans
(thousands of
dollars)
Average size
(thousands of
dollars)
Weighted
average
maturity2
Loan rate (percent)
Loans made
under
commitment
(percent)
6.37
6.29
6.76
21.5
19.5
32.0
63.0
58.7
84.6
7.31
6.49
8.10
47.7
35.1
59.9
7.07
5.79
8.12
44.7
15.9
68.5
60.5
49.0
70.0
6.67
Days
Loans
secured
by
collateral
(percent)
31.7
65.7
6.08
17.9
84.2
5.3
4.5
7.9
11.3
5.6
7.4
4.6
4.2
1.5
5.4
7.0
4.8
Weighted
average
effective3
Participation loans
(percent)
ALL BANKS
1 Overnight6
13,640,713
7,753
2 One month or less (excluding overnight)
3
Fixed rate
4
Floating rate
13,851,955
11,556,700
2,295,255
1,871
2,889
674
5 More than one month and less than one
year
6
Fixed rate
7
Floating rate
9,972,188
4,910,574
5,061,614
189
259
149
8 Demand7
9
Fixed rate
10
Floating rate
19,456,682
8,792,514
10,664,167
311
1,672
186
11 Total short-term
56,921,538
457
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
38,900,501
354,339
509,988
627,405
5,624,317
5,370,005
26,414,448
1,298
216
694
2,399
6,645
21,542
102
61
36
34
20
6.68
6.27
5.81
45.4
35.7
19.7
11.3
60.6
47.6
77.8
78.6
73.4
62.9
56.8
19 Floating rate (thousands of dollars)
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
18,021,037
1,833,124
3,561,980
1,537,083
3,960,005
1,519,985
5,608,860
191
26
199
671
1,892
6,626
19,108
119
164
154
150
119
7.94
9.67
9.10
8.55
8.10
7.13
6.58
61.5
80.5
73.8
66.5
58.6
42.2
53.3
76.6
86.1
87.6
90.1
86.4
82.4
54.2
26 Total long-term
7,996,293
290
7.90
64.5
78.6
27 Fixed rate (thousands of dollars)..
28
1-99
29
100-499
30
500-999
31
1,000 or more
2,201,220
7.90
9.79
9.10
7.44
7.57
68.1
93.8
85.3
71.8
58.6
29.1
50.2
76.2
61.9
10.1
198,295
194,712
107,721
1,700,492
193
20
197
693
5,039
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more
5,795,073
305,194
904,935
608,727
3,976,217
358
30
215
675
4,390
7.90
9.56
8.95
8.51
7.44
63.1
88.1
76.3
70.6
57.1
86.2
7.6
3.0
9.4
10.7
7.0
16
146
126
165
27
127
9.77
7.60
7.03
68.6
62.8
5.8
6.1
3.9
12.2
5.6
71.6
83.2
84.2
88.3
5.5
7.7
3.6
8.6
2.0
.5
6.3
7.3
11.9
Loan rate (percent)
Days
Effective
Nominal
5.86
6.23
5.69
6.05
9.7
19.2
60.7
62.2
.4
5.7
6.27
5.84
6.12
5.68
32.4
29.0
85.8
44.9
10.3
5.9
LOANS MADE BELOW PRIME 1 0
37 Overnight6
38 One month or less (excluding overnight) .
39 More than one month and less than one
13,287,632
13,233,783
9,746
4,327
40 Demand'
6,693,269
12,418,928
711
2,446
41 Total short-term
45,633,612
2,413
42 Fixed rate
43 Floating rate
37,464,802
3,908
876
5.95
6.36
5.78
6.19
15.5
46.4
60.3
61.8
5.3
3.0
44 Total long-term
4,295,927
45 Fixed rate
46 Floating rate . . .
1,387,530
2,908,397
476
1,196
6.76
6.67
6.59
6.48
63.1
57.2
62.6
86.1
15.3
4.3
year
Footnotes appear at the end of the table.
8,168,810
17
135
Financial Markets
4.23
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 5-9, 19961- -Continued
Commercial and industrial loans—Continued
Type and maturity
of loan
Amount of
loans
(thousands of
dollars)
Average size
(thousands of
dollars)
Weighted
average
maturity2
Loan rate (percent)
Loans made
under
commitment
(percent)
Participation loans
(percent)
6.31
18.1
6.26
6.66
16.3
30.5
63.1
58.8
92.8
4.3
4.5
2.5
7.00
6.38
7.70
28.6
89.6
90.9
50.3
88.2
9.4
11.4
7.0
6.50
5.49
7.63
40.1
12.5
71.3
55.5
47.9
64.2
9.8
3.1
6.36
Days
Loans
secured
by
collateral
(percent)
25.6
64.5
5.97
8.34
7.31
6.93
14.2
73.7
56.3
40.3
31.9
18.8
9.1
61.2
7.52
9.45
8.97
8.38
7.82
6.98
6.49
60.1
76.4
71.5
63.1
52.9
38.4
61.1
74.6
90.4
92.2
92.8
92.3
91.0
49.6
Weighted
average
effective3
LARGE BANKS
1 Overnight6
11,415,352
2 One month or less (excluding overnight)
3
Fixed rate
4
Floating rate
10,629,994
9,284,565
1,345,429
4,311
5,527
1,711
5 More than one month and less than one
year
Fixed rate
Floating rate
5,911,705
3,148,029
2,763,676
767
2,608
425
8 Demand7
9
Fixed rate
10
Floating rate
12,814,043
6,791,434
6,022,609
535
5,158
266
6
7
134
109
161
38.7
11 Total short-term
40,771,093
1,155
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
30,639,379
17,217
227,503
390,403
3,980,516
4,153,493
21,870,248
5,689
27
253
699
2,374
6,646
21,877
22
133
84
53
33
33
19 Floating rate (thousands of dollars)
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
10,131,713
613,178
1,614,338
775,920
2,036,685
927,082
4,164,511
339
32
204
663
1,930
6,611
114
149
151
145
26 Total long-term
5,324,265
7.86
61.1
86.4
27 Fixed rate (thousands of dollars). .
28
1-99
29
100-499
30
500-999
31
1,000 or more
1,395,880
9,623
60,114
54,384
1,271,759
1,764
32
267
686
6,764
7.70
8.90
8.36
7.27
7.68
61.0
90.3
74.2
70.5
59.8
66.0
63.3
84.6
82.5
64.5
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more
3,928,385
81,005
533,589
386,093
2,927,699
728
43
234
688
4,339
7.92
9.20
8.90
8.53
7.63
61.2
93.6
83.6
72.7
65.8
57.8
88.2
6.6
20,261
16
116
78
108
6.62
6.25
5.77
73.5
80.9
83.3
71.4
62.2
58.5
87.9
93.7
94.7
4.8
5.2
8.5
9.2
4.9
7.1
4.3
4.1
1.3
3.7
8.2
5.8
5.4
2.7
14.5
9.4
12.4
2.3
15.2
8.1
4.2
10.0
10.3
7.5
Loan rate (percent)
Days
Effective
Nominal'
5.85
6.25
5.68
6.07
7.8
17.2
62.0
17
63.1
.3
4.3
123
6.26
5.64
6.10
5.49
26.9
30.6
88.7
42.5
9.0
7.3
5.91
6.24
5.75
6.07
12.9
51.9
60.6
59.0
4.9
60.0
58.1
65.1
96.7
20.9
3.5
LOANS MADE BELOW PRIME 1 "
37 Overnight6
38 One month or less (excluding overnight)
39 More than one month and less than one
year
40 Demand7
11,177,782
10,400,816
11,145
5,392
4,425,262
9,636,925
2,593
3,790
41 Total short-term
35,640,785
4,963
42 Fixed rate
43 Floating rate
30,025,511
5,615,274
6,632
2,116
44 Total long-term
2,867,846
2,675
45 Fixed rate
46 Floating rate . . .
939,619
1,928,228
2,273
2,928
Footnotes appear at the end of the table.
9.2
6.53
6.64
6.76
6.47
6.56
2.0
A69
A70
4.23
Special Tables • May 1996
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 5-9, 1996'—Continued
Commercial and industrial loans—Continued
Type and maturity
of loan
Amount of
loans
(thousands of
dollars)
Average size
(thousands of
dollars)
Weighted
average
maturity2
Loan rate (percent)
Loans made
under
commitment
(percent)
32.9
32.4
34.1
62.7
58.5
72.9
7.76
60.8
77.8
8.1
6.68
46.7
71.5
68.2
85.2
13.6
3.8
53.6
27.1
65.0
70.1
53.1
77.5
3.3
.7
4.4
47.2
Days
Loans
secured
by
collateral
(percent)
68.6
5.7
31.8
84.7
78.6
54.0
44.7
22.7
21.7
58.6
46.2
75.3
70.8
78.3
65.7
48.9
6.9
4.4
7.4
14.9
7.2
63.2
79.2
84.0
83.8
87.4
4.4
1.7
6.9
5.7
3.7
13.5
Weighted
average
effective3
Participation loans
(percent)
OTHER BANKS
1 Overnight6
2,225,361
3,856
2 One month or less (excluding overnight)
3
Fixed rate
4
Floating rate
3,221,961
2,272,135
949,826
652
979
363
5 More than one month and less than one
year
6
Fixed rate
7
Floating rate
4,060,483
1,762,545
2,297,939
8 Demand7
9
Fixed rate
10
Floating rate
11 Total short-term
12 Fixed rate (thousands of dollars)
13
1-99
14
100-499
15
500-999
16
1,000-4,999
17
5,000-9,999
18
10,000 or more
19 Floating rate (thousands of dollars)
20
1-99
21
100-499
22
500-999
23
1,000-4,999
24
5,000-9,999
25
10,000 or more
26 Total long-term
6,642,639
2,001,081
4,641,558
6.58
6.44
6.91
163
156
169
8.58
8.17
172
508
134
6.81
8.76
16,150,445
181
8,261,122
336
337,122
282,484
237,002
1,643,802
1,216,512
4,544,200
193
686
2,462
6,644
20,064
7,889,323
1,219,946
1,947,642
761,163
1,923,321
592,903
1,444,349
122
125
23
196
680
1,854
6,650
16,415
155
155
125
95
60
16
50
127
116
73
44
37
44
168
9.84
7.83
7.19
6.84
6.35
6.01
8.48
9.78
9.21
8.73
8.40
7.37
82.6
6.86
75.7
70.1
64.6
48.0
30.7
80.2
68.9
67.3
10.6
12.6
6.0
8.6
6.1
.0
2,672,028
125
7.98
71.2
63.1
5.3
27 Fixed rate (thousands of dollars). .
28
1-99
29
100-499
30
500-999
31
1,000 or more
805,340
188,672
134,598
53,337
428,733
76
20
176
701
2,869
8.26
45.7
27.3
34.9
69.8
54.3
2.5
9.84
9.43
7.61
7.27
80.3
94.0
90.3
73.2
71.9
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1,000 or more
1,866,688
173
27
193
655
4,537
7.86
9.69
9.04
8.47
6.92
67.2
89.8
81.5
78.9
54.9
70.7
65.6
76.5
67.8
70.2
8.4
11.5
5.7
224,189
371,346
222,634
1,048,518
.1
3.5
12.4
2.0
6.5
2.6
Loan rate (percent)
Days
Effective3
Nominal1
LOANS MADE BELOW PRIME 1 0
37 Overnight6
38 One month or less (excluding overnight) .
39 More than one month and less than one
year
40 Demand'
2,109,850
2,832,967
41 Total short-term
9,992,826
852
42 Fixed rate
43 Floating rate
7,439,291
2,553,536
44 Total long-term
45 Fixed rate
46 Floating rate . . .
Footnotes appear at the end of the table.
5.91
6.14
5.74
5.97
19.7
26.5
53.9
59.2
1.5
10.8
6.30
6.53
6.14
6.35
43.1
23.5
80.0
12.7
53.1
1.0
1,471
383
6.10
6.63
5.94
6.45
25.8
34.2
58.8
67.8
6.9
5.4
1,428,081
334
6.66
6.49
447,911
980,169
179
553
7.01
6.50
6.84
6.32
69.6
55.4
57.3
65.2
5,853
2,508
2,268,006
2,782,003
16
158
3.5
6.0
Financial Markets
4.23
A71
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 5-9, 1996'—Continued
NOTES
1. The survey of terms of bank lending to business collects data on gross loan extensions
made during the first full business week in the mid-month of each quarter by a sample of 340
commercial banks of all sizes. A sample of 250 banks reports loans to farmers. The sample
data are blown up to estimate the lending terms at all insured commercial banks during that
week. The estimated terms of bank lending are not intended for use in collecting the terms of
loans extended over the entire quarter or residing in the portfolios of those banks. Construction and land development loans include both unsecured loans and loans secured by real
estate. Thus, some of the construction and land development loans would be reported on the
statement of condition as real estate loans and the remainder as business loans. Mortgage
loans, purchased loans, foreign loans, and loans of less that $1,000 are excluded from the
survey. As of September 30, 1990 assets of most of the large banks were at least $7.0 billion.
For all insured banks, total assets averaged $275 million.
2. Average maturities are weighted by loan size; excludes demand loans.
3. Effective (compounded) annual interest rate calculated from the stated rate and other
terms of the loans and weighted by loan size.
4. The chances are about two out of three that the average rate shown would differ by less
than the amount of the standard error from the average rate that would be found by a complete
survey of lending at all banks.
5. The rate used to price the largest dollar volume of loans. Base pricing rates include the
prime rate (sometimes referred to as a bank's "basic" or "reference" rate); the federal funds
rate; domestic money market rates other than the federal funds rate; foreign money market
rates; and other base rates not included in the foregoing classifications.
6. Overnight loans mature on the following business day.
7. Demand loans have no stated date of maturity.
8. Nominal (not compounded) annual interest rate calculated from the stated rate and other
terms of the loans and weighted by loan size.
9. Calculated by weighting the prime rate reported by each bank by the volume of loans
reported by that bank, summing the results, and then averaging over all reporting banks.
10. The proportion of loans made at rates below the prime may vary substantially from the
proportion of such loans outstanding in banks' portfolios.
A72
4.30
Special Tables • May 1996
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1995'—Continued
Millions of dollars except as noted
All states2
Item
I Total assets4
Total
including
IBFs3
New York
IBFs
only3
Total
including
IBFs
California
IBFs
only
Illinois
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
761,508
301,212
589,617
248,316
70,469
27,970
58,733
15,629
2 Claims on nonrelated parties
3 Cash and balances due from depository institutions
4
Cash items in process of collection and unposted debits
Currency and coin (U.S. and foreign)
3
6
Balances with depository institutions in United States
/
U.S. branches and agencies of other foreign banks
(including IBFs)
Other depository institutions in United States (including I B F s ) . . . .
Balances with banks in foreign countries and with foreign central
y
banks
Foreign branches of U.S. banks
10
u
Other banks in foreign countries and foreign central banks
12
Balances with Federal Reserve Banks
682,750
120.704
3,190
23
74,524
149,052
89,843
0
n.a.
52.309
528,166
108,043
3,011
16
66,364
123,637
78,871
0
n.a.
45,395
65,649
4,210
19
I
3,000
11,606
3,570
0
n.a.
2.422
54.058
6,859
106
I
4,607
8,624
6,408
0
n.a.
4,291
69,780
4,744
50,540
1.769
62,312
4,052
43,726
1,669
2,582
419
2,322
100
4,533
74
4,291
0
42.263
2,169
40.094
704
37,533
1,558
35,976
n.a.
38,026
1,937
36.090
626
33,476
1,352
32,124
n.a.
1.158
3
1,156
31
1,148
3
1,145
n.a.
2,138
155
1,983
7
2,118
155
1,963
n.a.
13 Total securities and loans
413,627
48,541
286,090
35,759
55,676
6,958
39,997
1,736
14 Total securities, book value
1.1 U.S. Treasury
16
Obligations of U.S. government agencies and corporations
1/
Other bonds, notes, debentures, and corporate stock (including state
and local securities)
18
Securities of foreign governmental units
All Other
19
94,934
26.379
25,389
10,205
n.a.
n.a.
87,142
25.242
24,776
8,978
n.a.
n.a.
4,275
611
416
624
n.a.
n.a.
2,910
406
52
578
n.a.
n.a.
43,165
14,294
28.872
10,205
4,493
5.712
37,124
12,948
24,176
8,978
3,965
5.013
3,248
701
2,547
624
272
352
2,452
547
1,906
578
230
347
20 Federal funds sold and securities purchased under agreements to
resell
21
U.S. branches and agencies of other foreign banks
Commercial banks in United States
22
Other
'23
53.260
11,621
13.906
27.734
5,994
3,786
92
2,117
49.800
10,536
12.753
26,511
5,252
3,407
87
1,759
1,366
564
483
318
514
329
0
186
1,478
252
359
867
190
50
0
140
318.836
142
318.693
38,343
7
38,336
199,040
93
198.948
26,785
4
26,781
51,440
39
51.401
6,336
2
6,334
37,091
4
37,087
1,158
0
1,158
34,397
34.385
13.283
12.091
1.192
73
21,030
443
20.586
32,227
204
22,403
7,281
7,031
249
0
15,122
338
14,784
784
20,499
22,799
7,767
6,903
864
68
14,964
364
14,600
25,619
52
14,550
3.794
3,592
202
0
10,756
315
10,441
481
9,738
6,241
4,611
4,503
108
5
1,625
20
1,605
2,229
151
4,612
3,119
3,089
30
0
1,493
20
1,473
55
2,154
879
479
393
86
0
400
0
400
3,546
0
576
303
289
14
0
273
0
273
205
37 Commercial and industrial loans
38
U.S. addressees (domicile)
39
Non-U.S. addressees (domicile)
40 Acceptances of other banks
41
U.S. banks
42
Foreign banks
43 Loans to foreign governments and official institutions (including
foreign central banks)
44 Loans for purchasing or carrying securities (secured and unsecured) . . .
45 All other loans
197.330
171.229
26,102
957
113
844
12,640
46
12,595
84
2
82
112,798
93,922
18,876
476
85
391
9,578
14
9,564
76
0
76
32,240
29,464
2,777
297
11
286
1,464
28
1,437
0
0
0
28,881
27,672
1,209
124
0
124
366
1
366
0
0
0
3.456
8,886
5.402
1,918
146
136
2,956
8,677
3,425
1,765
146
107
173
87
435
53
0
0
94
78
1,332
11
0
0
46 Assets held in trading accounts
4/ All other assets
48
Customers' liabilities on acceptances outstanding
49
U.S. addressees (domicile)
50
Non-U.S. addressees (domicile)
51
Other assets including other claims on nonrelated parties
52 Net due from related depository institutions5
53
Net due from head office and other related depository institutions5. . .
54
Net due from establishing entity, head offices, and other related
depository institutions5
47.202
47.957
9.551
7,087
2.464
38,406
78.758
78.758
488
4,187
n.a.
n.a.
n.a.
4,187
152,160
n.a.
44,035
40,198
6,662
4.684
1,978
33,535
61,451
61,451
401
3,354
n.a.
n.a.
n.a.
3.354
124,679
n.a.
542
3,854
2,030
1,879
151
1,824
4.820
4,820
86
478
n.a.
n.a.
n.a.
478
16,364
n.a.
2,622
3,103
503
354
149
2,600
4,675
4,675
0
289
n.a.
n.a.
n.a.
289
7,004
n.a.
24 Total loans, gross
25
LESS: Unearned income on loans
26
EQUALS: Loans, net
Total loans, gross, h\ category
21 Real estate loans
28 Loans to depository institutions
29
Commercial banks in United States (including IBFs)
30
U.S. branches and agencies of other foreign banks
Other commercial banks in United States
31
32
Other depository institutions in United States (including IBFs)
Banks in foreign countries
a
Foreign branches of U.S. banks
34
Other banks in foreign countries
35
36 Loans to other financial institutions
n.a.
152,160
n.a.
124.679
n.a.
16,364
n.a.
7,004
55 Total liabilities4
761,508
301,212
589,617
248,316
70,469
27,970
58,733
15,629
56 Liabilities to nonrelated parties
630.030
285,493
531.300
235,869
45,193
27,519
35,243
13,932
U.S. Branches and Agencies
4.30
A73
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1995'—Continued
Millions of dollars except as noted
All states2
Item
57 Total deposits and credit balances
58 Individuals, partnerships, and corporations
59
U.S. addressees (domicile)
60
Non-U.S. addressees (domicile)
61
Commercial banks in United States (including IBFs)
U.S. branches and agencies of other foreign banks
62
63
Other commercial banks in United States
64
Banks in foreign countries
65
Foreign branches of U.S. banks
Other banks in foreign countries
66
Foreign governments and official institutions
67
(including foreign central banks)
All other deposits and credit balances
68
Certified and official checks
69
70 Transaction accounts and credit balances (excluding IBFs)
Individuals, partnerships, and corporations
71
U.S. addressees (domicile)
72
Non-U.S. addressees (domicile)
73
Commercial banks in United States (including IBFs)
74
U.S. branches and agencies of other foreign banks
75
76
Other commercial banks in United States
Banks in foreign countries
77
Foreign branches of U.S. banks
78
Other banks in foreign countries
79
80 Foreign governments and official institutions
(including foreign central banks)
All other deposits and credit balances
81
Certified and official checks
82
83 Demand deposits (included in transaction accounts
and credit balances)
84 Individuals, partnerships, and corporations
U.S. addressees (domicile)
85
86
Non-U.S. addressees (domicile)
87
Commercial banks in United States (including IBFs)
U.S. branches and agencies of other foreign banks
88
Other commercial banks in United States
89
Banks in foreign countries
90
Foreign branches of U.S. banks
91
Other banks in foreign countries
92
Foreign governments and official institutions
93
(including foreign central banks)
All other deposits and credit balances
94
Certified and official checks
95
96 Nontransaction accounts (including MMDAs, excluding IBFs)
Individuals, partnerships, and corporations
97
98
U.S. addressees (domicile)
99
Non-U.S. addressees (domicile)
100 Commercial banks in United States (including IBFs)
101
U.S. branches and agencies of other foreign barks
Other commercial banks in United States
102
103 Banks in foreign countries
Foreign branches of U.S. banks
104
Other banks in foreign countries
105
106 Foreign governments and official institutions
(including foreign central banks)
All other deposits and credit balances
107
108 IBF deposit liabilities
Individuals, partnerships, and corporations
109
U.S. addressees (domicile)
110
111
Non-U.S. addressees (domicile)
112 Commercial banks in United States (including IBFs)
U.S. branches and agencies of other foreign banks
113
Other commercial banks in United States
114
115 Banks in foreign countries
Foreign branches of U.S. banks
116
Other banks in foreign countries
11/
118 Foreign governments and official institutions
(including foreign central banks)
119 All other deposits and credit balances
Footnotes appear at end of table.
Total
excluding
IBFs3
IBFs
only3
New York
Illinois
California
Total
excluding
IBFs
IBFs
only
Total
excluding
IBFs
IBFs
only
Total
excluding
IBFs
IBFs
only
161,662
111,785
99,249
12,536
27,644
16,514
11,130
8 320
2,575
5,745
214,291
15,386
170
15,216
49,966
46,550
3,417
119,645
4,680
114,965
137,059
91,138
84,356
6,782
25,103
15,048
10,055
7,779
2,474
5,305
193,848
10,407
170
10,237
46,224
43,303
2,921
111,937
4,204
107,733
5,479
4,498
3,045
1,452
88
84
304
241
50
191
5,769
599
0
599
1,649
1,487
162
2,442
120
2,322
10 810
9,389
8,534
855
1,154
531
623
86
0
86
7,666
194
0
194
1,836
1,526
310
3,334
291
3,043
3,945
9,609
359
29,210
85
3,558
9,177
304
25,196
84
198
26
28
1,079
0
13
159
9
2,301
1
8,783
6,815
4,890
1,925
98
51
47
905
2
903
7,028
5,394
4,212
1,182
92
49
43
720
1
719
429
330
249
82
2
0
1
40
0
40
368
355
323
32
0
0
0
1
0
1
443
164
359
388
130
304
3
26
28
2
2
9
8,239
6,389
4,723
1,666
94
50
43
882
2
880
6,812
5,251
4,151
1,100
89
49
40
699
1
698
337
259
194
65
1
0
0
39
0
39
356
342
310
32
0
0
0
1
0
1
n.a.
n a.
n.a.
413
103
359
382
87
304
3
8
28
2
1
9
152,879
104,970
94,360
10,611
27,546
16,463
11,083
7,415
2,573
4,842
130,031
85,744
8C 144
5,600
25,011
14,999
10,012
7,059
2,473
4,586
5,051
4,168
2,797
1,371
487
184
303
201
50
151
10,442
9,035
8,212
823
1,154
531
622
85
0
85
3,502
9,445
3,170
9,047
195
0
n a.
11
158
n a.
214,291
15,386
170
15,216
49,966
46,550
3.417
119,645
4,680
114,965
29.210
85
n.a.
193,848
10,407
170
10,237
46,224
43,303
2,921
111,937
4,204
107.733
25.196
84
n a.
5,769
599
0
599
1,649
1,487
162
2,442
120
2.322
1.079
0
n.a.
7,666
194
0
194
1,836
1,526
310
3,334
291
3.043
2.301
1
A74
4.30
Special Tables • May 1996
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1995'—Continued
Millions of dollars except as noted
All states2
Item
1 ?0 Federal funds purchased and securities sold under agreements to
121
U.S. branches and agencies of other foreign banks
17?
Other commercial banks in United States
173 Other
124 Other borrowed money
125 Owed to nonrelated commercial banks in United States (including
IBFs)
126 Owed to U.S. offices of nonrelated U.S. banks
177
Owed to U.S. branches and agencies of nonrelated
foreign banks
128 Owed to nonrelated banks in foreign countries
179 Owed to foreign branches of nonrelated U.S. banks
130 Owed to foreign offices of nonrelated foreign banks
131 Owed to others
132 All other liabilities
133 Branch or agency liability on acceptances executed and
outstanding
134 Trading liabilities
135 Other liabilities to nonrelated parties
136 Net due to related depository institutions5
137 Net owed to head office and other related depository institutions'. . .
138 Net owed to establishing entity, head office, and other related
depository institutions5
Total
including
IBFs3
New York
IBFs
only3
Total
including
IBFs
Illinois
California
IBFs
only
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
75,448
11,235
6,804
57,409
92,884
18,i 48
4,346
346
14,257
47,212
66,761
7.849
4,169
54,743
56,043
15,288
2,720
310
12,259
22,420
5,789
2,532
1,824
1,434
24,614
2,876
1,469
27
1,381
18,406
2,525
733
750
1,042
10,338
643
123
10
510
5,424
27,364
8,147
12,637
1,179
13,369
5,312
4,413
335
10,649
1,885
6,751
713
2,301
557
1,110
102
19,218
35,608
1,781
33,827
29,912
11,458
32,936
1,628
31,308
1,639
8,057
19,544
585
18,960
23,130
4,078
17,102
518
16,584
904
8,764
11,373
959
10,414
2,592
6,038
11,238
929
10,309
417
1,744
4,020
206
3,814
4,016
1,008
3,995
181
3,814
318
85,744
5,041
77,589
4,314
3,542
467
3,904
200
9,932
41,712
34,100
n. a.
116
4,925
6,999
40,091
30,500
n. a.
69
4,245
2,021
429
1,092
n. a.
47
421
507
1,172
2,226
n.a.
0
200
131,478
131,478
15,719
n a.
58,317
58,317
12,447
n.a.
25,275
25,275
452
n a.
23,489
23,489
1,697
n.a.
n.a.
15,719
n.a.
12,447
n.a.
452
n.a.
1,697
MEMO
134 Non-interest-bearing balances with commercial banks
in United States
140 Holding of commercial paper included in total loans
141 Holding of own acceptances included in commercial and
industrial loans
142 Commercial and industrial loans with remaining maturity of one year
or less
143 Predetermined interest rates
144 Floating interest rates
145 Commercial and industrial loans with remaining maturity of more
than one year
146 Predetermined interest rates
147 Floating interest rates
1,252
832
0
1,018
772
0
107
6
0
43
35
4,957
3,735
1,016
108
115,255
68,469
46,785
63,756
38,342
25,414
20,684
11,498
9,186
17,639
12,578
5,062
0
82,076
19,219
62,857
n.a.
49,042
11,774
37,267
n.a.
11,557
2,480
9,076
n.a.
11,242
3,392
7,850
n.a.
U.S. Branches and Agencies
4.30
A75
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1995'—Continued
Millions of dollars except as noted
All states2
Item
148 Components of total nontransaction accounts,
included in total deposits and credit balances of
nontransaction accounts, including IBFs
149
Time CDs in denominations of $100,000 or more
150
Other time deposits in denominations of $100,000
or more
151
Time CDs in denominations of $100,000 or more
with remaining maturity of more than 12 months
Total
excluding
IBFs3
IBFs
only3
I
1
155,853
119,470
28,789
New York
n.a.
7,594
All states2
Total
including
IBFs
152 Market value of securities held
153 Immediately available funds with a maturity greater than one day
included in other borrowed money
154 Number of reports filed6
0
51,290
526
1. Data are aggregates of categories reported on the quarterly form FFIEC 002, "Report of
Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The form was first
used for reporting data as of June 30, 1980, and was revised as of December 31, 1985. From
November 1972 through May 1980, U.S. branches and agencies of foreign banks had filed a
monthly FR 886a report. Aggregate data from that report were available through the Federal
Reserve monthly statistical release G.l 1, last issued on July 10,1980. Data in this table and in
the G.l 1 tables are not strictly comparable because of differences in reporting panels and in
definitions of balance sheet items.
2. Includes the District of Columbia.
3. Effective December 1981, the Federal Reserve Board amended Regulations D and Q to
permit banking offices located in the United States to operate international banking facilities
(IBFs). Since December 31, 1985, data for IBFs have been reported in a separate column.
These data are either included in or excluded from the total columns as indicated in the
headings. The notation "n.a." indicates that no IBF data have been reported for that item,
Total
excluding
IBFs
IBFs
only
1
133,579
101,917
25,118
California
n.a.
*
6,544
0
Total
including
IBFs
0
n.a.
0
25,799
251
IBFs
only
1
J
5,320
3,717
1,005
n.a.
598
New York
IBFs
only
Total
excluding
IBFs
Illinois
Total
excluding
IBFs
IBFs
only
0
n.a.
0
Total
including
IBFs
0
18,574
119
1
1
10,577
8,353
1,881
n.a.
343
California
IBFs
only
Illinois
IBFs
only
0
n.a.
0
Total
including
IBFs
0
5,735
47
IBFs
only
0
n.a.
0
either because the item is not an eligible IBF asset or liability or because that level of detail is
not reported for IBFs. From December 1981 through September 1985, IBF data were
included in all applicable items reported.
4. Total assets and total liabilities include net balances, if any, due from or owed to related
banking institutions in the United States and in foreign countries (see note 5). On the former
monthly branch and agency report, available through the G . l l monthly statistical release,
gross balances were included in total assets and total liabilities. Therefore, total asset and total
liability figures in this table are not comparable to those in the G.l 1 tables.
5. Related depository institutions includes the foreign head office and other U.S. and
foreign branches and agencies of a bank, a bank's parent holding company, and majorityowned banking subsidiaries of the bank and of its parent holding company (including
subsidiaries owned both directly and indirectly).
6. In some cases two or more offices of a foreign bank within the same metropolitan area
file a consolidated report.
A76
Index to Statistical Tables
References are to pages A3-A75
although the prefix 'A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 21, 22
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-23
Domestic finance companies, 36
Federal Reserve Banks, 11
Financial institutions, 28
Foreign banks, U.S. branches and agencies, 23, 72-75
Automobiles
Consumer installment credit, 39
Production, 47, 48
BANKERS acceptances, 11, 12, 21-24, 26
Bankers balances, 18-23, 72-75. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 26
Branch banks, 23
Business activity, nonfinancial, 45
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 11
Central banks, discount rates, 65
Certificates of deposit, 26
Commercial and industrial loans
Commercial banks, 21, 22
Weekly reporting banks, 21-23
Commercial banks
Assets and liabilities, 18-23, 68-71
Commercial and industrial loans, 18-23
Consumer loans held, by type and terms, 39
Deposit interest rates of insured, 16
Loans sold outright, 22
Real estate mortgages held, by holder and property, 38
Terms of lending, 68-71
Time and savings deposits, 4
Commercial paper, 24, 26, 36
Condition statements (See Assets and liabilities)
Construction, 45, 49
Consumer installment credit, 39
Consumer prices, 45
Consumption expenditures, 52, 53
Corporations
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 39
Currency in circulation, 5, 14
Customer credit, stock market, 27
DEBITS to deposit accounts, 17
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-23
Ownership by individuals, partnerships, and
corporations, 22, 23
Turnover, 17
Depository institutions
Reserve requirements, 9
Reserves and related items, 4, 5, 6, 13
Deposits (See also specific types)
Banks, by classes, 4, 18—23
Deposits—Continued
Banks, by classes, 4, 18-23
Federal Reserve Banks, 5,11
Interest rates, 16
Turnover, 17
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 26
FARM mortgage loans, 38
Federal agency obligations, 5, 10, 11, 12, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 33
Federal funds, 7, 21, 22, 23, 26, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 5, 11, 12, 30
Federal Reserve credit, 5,6, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 36
Business credit, 36
Loans, 39
Paper, 24, 26
Financial institutions, loans to, 21, 22, 23
Float, 5
Flow of funds, 40-44
Foreign banks, assets and liabilities of U.S. branches and
agencies, 22, 23, 72-75
Foreign currency operations, 11
Foreign deposits in U.S. banks, 5, 22
Foreign exchange rates, 66
Foreign trade, 54
Foreigners
Claims on, 55, 58, 59, 60, 62
Liabilities to, 22, 54, 55, 56, 61, 63, 64
GOLD
Certificate account, 11
Stock, 5, 54
Government National Mortgage Association, 33, 37, 38
Gross domestic product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 45, 51, 52
Industrial production, 45, 47
Installment loans, 39
Insurance companies, 30, 38
A77
Interest rates
Bonds, 26
Commercial banks, 68-71
Consumer installment credit, 39
Deposits, 16
Federal Reserve Banks, 8
Foreign central banks and foreign countries, 65
Money and capital markets, 26
Mortgages, 37
Prime rate, 25
International capital transactions of United States, 53-65
International organizations, 55, 56, 58, 61, 62
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18-23
Commercial banks, 4, 18-23
Federal Reserve Banks, 11, 12
Financial institutions, 38
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18—23
Commercial banks, 18-23
Federal Reserve Banks, 5, 6, 8, 11, 12
Financial institutions, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 27
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 7
Reserve requirements, 9
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 4, 13
Money and capital market rates, 26
Money stock measures and components, 4, 14
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 10
PERSONAL income, 52
Prices
Consumer and producer, 45, 50
Stock market, 27
Prime rate, 25
Producer prices, 45, 50
Production, 45, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 21, 22, 38
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
Repurchase agreements, 7
Reserve requirements, 9
Reserves
Commercial banks, 18
Depository institutions, 4, 5, 6, 13
Federal Reserve Banks, 11
U.S. reserve assets, 54
Residential mortgage loans, 37
Retail credit and retail sales, 39, 45
SAVING
Flow of funds, 40-44
National income accounts, 51
Savings institutions, 38, 39, 40
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 63
New issues, 34
Prices, 27
Special drawing rights, 5, 11, 53, 54
State and local governments
Deposits, 21, 22
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 21, 23
Rates on securities, 26
Stock market, selected statistics, 27
Stocks (See also Securities)
New issues, 34
Prices, 27
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 4. (See also Credit unions and Savings
institutions
Time and savings deposits, 4, 14, 16, 18-23
Trade, foreign, 54
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 11, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18-23
Treasury deposits at Reserve Banks, 5, 11, 28
U.S. government securities
Bank holdings, 18-23, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 5, 11, 12, 30
Foreign and international holdings and
transactions, 11,30, 64
Open market transactions, 10
Outstanding, by type and holder, 30, 31
Rates, 26
U.S. international transactions, 53-66
Utilities, production, 48
VETERANS Administration, 37, 38
WEEKLY reporting banks, 18-23
Wholesale (producer) prices, 45, 50
YIELDS (See Interest rates)
A78
Federal Reserve Board of Governors
and Official Staff
ALAN GREENSPAN, Chairman
OFFICE OF BOARD
Pro Tempore
DIVISION OF INTERNATIONAL
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
EDWARD W. KELLEY, JR.
LAWRENCE B . LINDSEY
to the Board
to the Board
THEODORE E. ALLISON, Assistant to the Board for Federal
Reserve System Affairs
LYNN S. FOX, Deputy Congressional Liaison
WINTHROP P. HAMBLEY, Special Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
PORTIA W. THOMPSON, Equal Employment Opportunity
Programs Adviser
EDWIN M. TRUMAN, Staff
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
DALE W. HENDERSON, Associate Director
DAVID H. HOWARD, Senior
Adviser
DONALD B. ADAMS, Assistant
Director
THOMAS A. CONNORS, Assistant
Director
PETER HOOPER III, Assistant
Director
KAREN H. JOHNSON, Assistant Director
CATHERINE L. MANN, Assistant Director
RALPH W. SMITH, JR., Assistant
LEGAL
DIVISION
Counsel
SCOTT G. ALVAREZ, Associate General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
KATHLEEN M. O'DAY, Associate General Counsel
ROBERT DEV. FRIERSON, Assistant General Counsel
KATHERINE H. WHEATLEY, Assistant General Counsel
OFFICE OF THE SECRETARY
Secretary
JENNIFER J. JOHNSON, Deputy Secretary
BARBARA R. LOWREY, Associate Secretary and Ombudsman
DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN,
Director
STEPHEN C. SCHEMERING, Deputy
DON E. KLINE, Associate
Director
Director
WILLIAM A . RYBACK, Associate
Director
HERBERT A. BIERN, Deputy Associate Director
ROGER T. COLE, Deputy Associate Director
JAMES I. GARNER, Deputy Associate Director
HOWARD A. AMER, Assistant
Director
GERALD A. EDWARDS, JR., Assistant
Director
STEPHEN M. HOFFMAN, JR., Assistant
Director
JAMES V. HOUPT, Assistant
Director
JACK P. JENNINGS, Assistant
MICHAEL J. PRELL,
STATISTICS
Director
EDWARD C. ETTIN, Deputy
Director
DAVID J. STOCKTON, Deputy Director
MARTHA BETHEA, Associate
Director
WILLIAM R. JONES, Associate
Director
MYRON L. KWAST, Associate
Director
PATRICK M. PARKINSON, Associate
Director
THOMAS D. SIMPSON, Associate
Director
LAWRENCE SLIFMAN, Associate Director
MARTHA S. SCANLON, Deputy Associate Director
PETER A. TINSLEY, Deputy Associate Director
FLINT BRAYTON, Assistant Director
DAVID S. JONES, Assistant
Director
STEPHEN A. RHOADES, Assistant
Director
CHARLES S. STRUCKMEYER, Assistant
Director
ALICE PATRICIA WHITE, Assistant
Director
JOYCE K. ZICKLER, Assistant Director
JOHN J. MINGO, Senior
G L E N N B . CANNER,
Adviser
Adviser
DIVISION OF MONETARY
DONALD L . KOHN,
AFFAIRS
Director
DAVID E. LINDSEY, Deputy Director
BRIAN F. MADIGAN, Associate Director
RICHARD D. PORTER, Deputy Associate Director
VINCENT R. REINHART, Assistant
Director
NORMAND R. V. BERNARD, Special Assistant to the Board
Director
MICHAEL G. MARTINSON, Assistant
Director
RHOGER H PUGH, Assistant
Director
SIDNEY M. SUSSAN, Assistant
Director
MOLLY S. WASSOM, Assistant
Director
WILLIAM SCHNEIDER, Project
Director,
National Information Center
Director
DIVISION OF RESEARCH AND
J. VIRGIL MATTINGLY, JR., General
WILLIAM W . WILES,
FINANCE
Director
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
GRIFFITH L . GARWOOD,
Director
GLENN E. LONEY, Associate
Director
DOLORES S. SMITH, Associate
Director
MAUREEN P. ENGLISH, Assistant
Director
IRENE SHAWN M C N U L T Y , Assistant
Director
A79
SUSAN M . PHILLIPS
JANET L. YELLEN
OFFICE OF
STAFF DIRECTOR
FOR MANAGEMENT
S. DAVID FROST, Staff
Director
SHEILA CLARK, EEO Programs
DIVISION OF HUMAN
MANAGEMENT
DAVID L . S H A N N O N ,
CLYDE H . FARNSWORTH, JR.,
Director
RESOURCES
Director
CONTROLLER
GEORGE E . LIVINGSTON,
Controller
STEPHEN J. CLARK, Assistant Controller (Programs and Budgets)
DARRELL R. PAULEY, Assistant Controller (Finance)
DIVISION OF SUPPORT
SERVICES
Director
GEORGE M. LOPEZ, Assistant
Director
DAVID L. WILLIAMS, Assistant Director
DIVISION OF INFORMATION
MANAGEMENT
STEPHEN R . MALPHRUS,
RESOURCES
Director
MARIANNE M. EMERSON, Assistant Director
Po KYUNG KIM, Assistant Director
RAYMOND H. MASSEY, Assistant
EDWARD T. MULRENIN, Assistant
Director
Director
DAY W. RADABAUGH, JR., Assistant Director
ELIZABETH B. RIGGS, Assistant
RICHARD C. STEVENS, Assistant
LOUISE L. ROSEMAN, Associate
Director
JACK DENNIS, JR., Assistant
Director
Director
JOHN H. PARRISH, Assistant Director
Director
FRED HOROWITZ, Assistant Director
ROBERT E . FRAZIER,
Director
DAVID L. ROBINSON, Deputy Director (Finance and Control)
EARL G. HAMILTON, Assistant Director
JOSEPH H. HAYES, JR., Assistant
OFFICE OF THE
OPERATIONS
JEFFREY C. MARQUARDT, Assistant
Director
JOHN R. WEIS, Associate
DIVISION OF RESERVE BANK
AND PA YMENT SYSTEMS
Director
Director
FLORENCE M. YOUNG, Assistant
Director
OFFICE OF THE INSPECTOR
BRENT L. BOWEN, Inspector
GENERAL
General
DONALD L. ROBINSON, Assistant Inspector General
BARRY R. SNYDER, Assistant Inspector General
A80
Federal R e s e r v e Bulletin •
May 1996
Federal Open Market Committee
and Advisory Councils
FEDERAL
OPEN
MARKET
COMMITTEE
MEMBERS
ALAN GREENSPAN,
WILLIAM J. MCDONOUGH, Vice Chairman
Chairman
EDWARD G . BOEHNE
LAWRENCE B . LINDSEY
GARY H . STERN
JERRY L. JORDAN
ROBERT D . MCTEER, JR.
JANET L . YELLEN
EDWARD W. KELLEY, JR.
SUSAN M . PHILLIPS
ALTERNATE
J. ALFRED BROADDUS, JR.
MICHAEL H . MOSKOW
JACK GUYNN
MEMBERS
ROBERT T. PARRY
ERNEST T. PATRIKIS
STAFF
DAVID E. LINDSEY, Associate
DONALD L. KOHN, Secretary and
Economist
NORMAND R.V. BERNARD, Deputy
Secretary
JOSEPH R. COYNE, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
FREDERIC S. MISHKIN, Associate
LARRY J. PROMISEL, Associate
ARTHUR J. ROLNICK, Associate
HARVEY ROSENBLUM, Associate
CHARLES J. SIEGMAN, Associate
THOMAS D. SIMPSON, Associate
MARK S. SNIDERMAN, Associate
DAVID J. STOCKTON, Associate
THOMAS C. BAXTER, JR., Deputy General Counsel
MICHAEL J. PRELL,
Economist
EDWIN M . TRUMAN,
Economist
RICHARD W. LANG, Associate
Economist
Economist
Economist
Economist
Economist
Economist
Economist
Economist
Economist
Economist
PETER R. FISHER, Manager, System Open Market Account
FEDERAL
ADVISORY
COUNCIL
RICHARD G . TILGHMAN,
President
FRANK V. CAHOUET, Vice President
Seventh District
Eighth District
RICHARD M . KOVACEVICH, Ninth District
CHARLES E. NELSON, Tenth District
CHARLES T. DOYLE, Eleventh District
VACANCY, Twelfth District
JR., First District
Second District
WALTER E. DALLER, JR., Third District
FRANK V. CAHOUET, Fourth District
RICHARD G . TILGHMAN, Fifth District
CHARLES E. RICE, Sixth District
WILLIAM M . CROZIER,
ROGER L. FITZSIMONDS,
WALTER V. SHIPLEY,
THOMAS H . JACOBSEN,
HERBERT V. PROCHNOW, Secretary
JAMES ANNABLE,
WILLIAM J. KORSVIK,
Emeritus
Co-Secretary
Co-Secretary
A81
CONSUMER
ADVISORY
COUNCIL
KATHARINE W. MCKEE, Durham, North Carolina, Chairman
JULIA M. SEWARD, Richmond, Virginia, Vice Chairman
RICHARD S . AMADOR, LOS A n g e l e s , C a l i f o r n i a
ERROL T. LOUIS, B r o o k l y n , N e w Y o r k
THOMAS R . BUTLER, R i v e r w o o d s , I l l i n o i s
WILLIAM N . L U N D , F a l m o u t h , M a i n e
ROBERT A . COOK, B a l t i m o r e , M a r y l a n d
RONALD A . PRILL, M i n n e a p o l i s , M i n n e s o t a
ALVIN J. COWANS, O r l a n d o , F l o r i d a
LISA RICE-COLEMAN, T o l e d o , O h i o
ELIZABETH G . FLORES, L a r e d o , T e x a s
JOHN R . RINES, D e t r o i t , M i c h i g a n
HERIBERTO FLORES, S p r i n g f i e l d , M a s s a c h u s e t t s
MARGOT SAUNDERS, W a s h i n g t o n , D . C .
EMANUEL FREEMAN, P h i l a d e l p h i a , P e n n s y l v a n i a
A N N E B . SHLAY, P h i l a d e l p h i a , P e n n s y l v a n i a
DAVID C . F Y N N , C l e v e l a n d , O h i o
REGINALD J. SMITH, Kansas City, Missouri
ROBERT G . GREER, H o u s t o n , T e x a s
GEORGE P. SURGEON, A r k a d e l p h i a , A r k a n s a s
KENNETH R. HARNEY, Chevy Chase, Maryland
GREGORY D . SQUIRES, M i l w a u k e e , W i s c o n s i n
GAIL K . HILLEBRAND, S a n F r a n c i s c o , C a l i f o r n i a
JOHN E. TAYLOR, W a s h i n g t o n , D . C .
TERRY JORDE, Cando, North Dakota
LORRAINE VANETTEN, T r o y , M i c h i g a n
FRANCINE JUSTA, N e w Y o r k , N e w Y o r k
THEODORE J. WYSOCKI, JR., C h i c a g o , I l l i n o i s
EUGENE I. LEHRMANN, M a d i s o n , W i s c o n s i n
LILY K. YAO, Honolulu, Hawaii
THRIFT
INSTITUTIONS
ADVISORY
COUNCIL
E. LEE BEARD, Hazleton, Pennsylvania, President
DAVID F. HOLLAND, Burlington, Massachusetts, Vice President
BARRY C . BURKHOLDER, H o u s t o n , T e x a s
CHARLES R . RINEHART, I r w i n d a l e , C a l i f o r n i a
MICHAEL T. CROWLEY, JR., M i l w a u k e e , W i s c o n s i n
JOSEPH C . SCULLY, C h i c a g o , I l l i n o i s
GEORGE L. ENGELKE, JR., Lake Success, New York
RONALD W . STIMPSON, M e m p h i s , T e n n e s s e e
DOUGLAS A . FERRARO, E n g l e w o o d , C o l o r a d o
LARRY T. WILSON, Raleigh, North Carolina
BEVERLY D . HARRIS, L i v i n g s t o n , M o n t a n a
WILLIAM W . ZUPPE, S p o k a n e , W a s h i n g t o n
A82
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES,
MS-127, Board of Governors of the Federal Reserve System,
Washington, DC 20551 or telephone (202) 452-3244 or FAX
(202) 728-5886. When a charge is indicated, payment should
accompany request and be made payable to the Board of Governors of the Federal Reserve System or may be ordered via
Mastercard or Visa. Payment from foreign residents should be
drawn on a U.S. bank.
BOOKS AND MISCELLANEOUS
PUBLICATIONS
THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS.
1994. 157 pp.
A N N U A L REPORT.
FEDERAL RESERVE REGULATORY SERVICE. L o o s e - l e a f ;
updated
monthly. (Requests must be prepaid.)
Consumer and Community Affairs Handbook. $75.00 per year.
Monetary Policy and Reserve Requirements Handbook. $75.00
per year.
Securities Credit Transactions Handbook. $75.00 per year.
The Payment System Handbook. $75.00 per year.
Federal Reserve Regulatory Service. Four vols. (Contains all
four Handbooks plus substantial additional material.) $200.00
per year.
Rates for subscribers outside the United States are as follows
and include additional air mail costs:
Federal Reserve Regulatory Service, $250.00 per year.
Each Handbook, $90.00 per year.
ANNUAL REPORT: BUDGET REVIEW, 1 9 9 4 - 9 5 .
FEDERAL RESERVE BULLETIN. M o n t h l y . $ 2 5 . 0 0 p e r y e a r or $ 2 . 5 0
THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI-
each in the United States, its possessions, Canada, and
Mexico. Elsewhere, $35.00 per year or $3.00 each.
ANNUAL STATISTICAL DIGEST: period covered, release date, number of pages, and price.
239 pp.
$ 6.50
October 1982
1981
266 pp.
$ 7.50
December 1983
1982
264 pp.
$11.50
October 1984
1983
254 pp.
$12.50
October 1985
1984
231 pp.
$15.00
October 1986
1985
$15.00
November 1987
288 pp.
1986
272 pp.
$15.00
October 1988
1987
256 pp.
$25.00
November 1989
1988
712 pp.
$25.00
March 1991
1980-89
185 pp.
$25.00
November 1991
1990
$25.00
November 1992
215 pp.
1991
$25.00
December 1993
215 pp.
1992
$25.00
December 1994
281 pp.
1993
$25.00
190 pp.
December 1995
1994
INDUSTRIAL
SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF
CHARTS. Weekly. $30.00 per year or $.70 each in the United
States, its possessions, Canada, and Mexico. Elsewhere,
$35.00 per year or $.80 each.
THE FEDERAL RESERVE ACT and other statutory provisions affecting the Federal Reserve System, as amended through August
1990. 646 pp. $10.00.
REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
ANNUAL
PERCENTAGE
RATE
TABLES
(Truth
in
Lending—
Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp.
Vol. II (Irregular Transactions). 1969. 116 pp. Each volume
$2.25.
GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 6 7 2 p p . $ 8 . 5 0 e a c h .
COUNTRY MODEL, May 1984. 590 pp. $14.50 each.
PRODUCTION — 1 9 8 6
EDITION.
December
1986.
440 pp. $9.00 each.
FINANCIAL
FUTURES
AND
OPTIONS
IN THE U . S .
ECONOMY.
December 1986. 264 pp. $10.00 each.
FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY-
SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each.
EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom use. Multiple copies are
available without charge.
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
A Guide to Business Credit for Women, Minorities, and Small
Businesses
Series on the Structure of the Federal Reserve System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Organization and Advisory Committees
A Consumer's Guide to Mortgage Lock-Ins
A Consumer's Guide to Mortgage Settlement Costs
A Consumer's Guide to Mortgage Refinancings
Home Mortgages: Understanding the Process and Your Right
to Fair Lending
How to File a Consumer Complaint
Making Deposits: When Will Your Money Be Available?
Making Sense of Savings
SHOP: The Card You Pick Can Save You Money
Welcome to the Federal Reserve
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
A83
STAFF STUDIES: Only Summaries Printed in the
BULLETIN
Studies and papers on economic and financial subjects that are of
general interest. Requests to obtain single copies of the full text or
to be added to the mailing list for the series may be sent to
Publications Services.
1 6 3 . CLEARANCE AND SETTLEMENT IN U . S . SECURITIES MAR-
KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob,
Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary
Ann Taylor. March 1992. 37 pp.
1 6 4 . THE
1989-92
CREDIT CRUNCH
FOR REAL ESTATE,
by
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
1 6 5 . THE DEMAND FOR TRADE CREDIT: A N INVESTIGATION OF
MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, b y
Staff Studies 1-157 are out of print.
Gregory E. Elliehausen and John D. Wolken. September
1 5 8 . THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIREMENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE
1 9 9 3 . 1 8 pp.
1 6 6 . THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, b y
PRODUCTS, by Mark J. Warshawsky with the assistance of
Dietrich Earnhart. September 1989. 23 pp.
Mark Carey, Stephen Prowse, John Rea, and Gregory Udell.
January 1994. I l l pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g a n d
1 6 7 . A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANKING, 1 9 8 0 - 9 3 , AND AN ASSESSMENT OF THE "OPERATING
PERFORMANCE" AND "EVENT S T U D Y " METHODOLOGIES,
Donald Savage. February 1990. 12 pp.
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y
Gregory E. Elliehausen and John D. Wolken. September
1 9 9 0 . 35 pp.
161. A
REVIEW
OF CORPORATE
RESTRUCTURING
ACTIVITY,
1980-90, by Margaret Hastings Pickering. May 1991.
21pp.
1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n A .
Rhoades. February 1992. 11 pp.
by Stephen A. Rhoades. July 1994. 37 pp.
1 6 8 . THE ECONOMICS OF THE PRIVATE EQUITY MARKET,
by
George W. Fenn, Nellie Liang, and Stephen Prowse. November 1 9 9 5 . 6 9 pp.
1 6 9 . BANK MERGERS AND INDUSTRYWIDE STRUCTURE, 1 9 8 0 - 9 4 ,
by Stephen A. Rhoades. February 1996. 32 pp.
A84
Maps of the Federal Reserve System
B
B
M
B
M
F
C
G
*
MINNEAPOLIS •
wmmmmmsmmmrnm^ms liliiiii
I I I I K S V M H
^
1
^
^
CLEVELAND
SAN FRANCISCO
1 0
KANSAS CITY •
BOCTON
ii
CHICAGO •
1 2
•
1
^
4
G
ST. LOUIS
G
• NEW YORK
PSLADELPHIA
$
RICHMOND
5
liiiillliliiiii ifflliilllSf I
^ATLANTA
U
•
DALLAS
ALASKA
HAWAII f !
LEGEND
Both
pages
• Federal Reserve Bank city
® Board of Governors of the Federal
Reserve System, Washington, D.C.
Facing
page
• Federal Reserve Branch city
—
Branch boundary
NOTE
The Federal Reserve officially identifies Districts by number and Reserve Bank city (shown on both pages) and by
letter (shown on the facing page).
In the 12th District, the Seattle Branch serves Alaska,
and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as
follows: the New York Bank serves the Commonwealth
of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of
Governors revised the branch boundaries of the System
most recently in December 1991.
A85
1-A
2-B
5-E
4-D
3-C
Baltimore M
D
vijL"
i*
/
VT
NH
Buffalo
HA
cr
•
A
wv
nc/
/
•Cincinnati
•Charlotte
^RI
NEW YORK
BOSTON
PHILADELPHIA
6-F
RICHMOND
CLEVELAND
7-G
8-H
•Nashville
MJ
Birmingham
W|
Louisville
Detroit*
IA
U ^
Jacksonville
LA
•
J
New Orleans
TN
•Memphis
A
Li
IN
FIR
Miami
CHICAGO
ATLANTA
9-1
ST. LOUIS
m
MINNEAPOLIS
10-J
12-L
wy
1 NB
Omaha*
CO
•
Defy*
MM.
•WA
^SEATTTE
//
1
Oklahotra City
Portland
m
OR
)
KANSAS CITY
NV"7
/
11-K
m
•
• *
) S alt Lake City
A PT E
NF T
HAWAII
*
AZ
DALLAS
SAN FRANCISCO
A86
Federal Reserve Banks, Branches,
and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Jerome H. Grossman
William C. Brainard
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
John C. Whitehead
Thomas W. Jones
Joseph J. Castiglia
William J. McDonough
Ernest T. Patrikis
Buffalo
14240
PHILADELPHIA
19105
Donald J. Kennedy
Joan Carter
44101
45201
15230
A. William Reynolds
G. Watts Humphrey, Jr.
John N. Taylor, Jr.
John T. Ryan III
Jerry L. Jordan
Sandra Pianalto
Cincinnati
Pittsburgh
RICHMOND*
23219
J. Alfred Broaddus, Jr.
Walter A. Varvel
Baltimore
Charlotte
Culpeper
21203
28230
22701
Claudine B. Malone
Robert L. Strickland
Michael R. Watson
James O. Roberson
Hugh M. Brown
Daniel E. Sweat, Jr.
Donald E. Boomershine
Joan D. Ruffier
R. Kirk Landon
Paula Lovell
Lucimarian Roberts
Jack Guynn
Patrick K. Barron
Robert M. Healey
Lester H. McKeever, Jr.
John D. Forsyth
Michael H. Moskow
William C. Conrad
John F. McDonnell
Susan S. Elliott
Janet M. Jones
John A. Williams
John V. Myers
Thomas C. Melzer
W. LeGrande Rives
Jean D. Kinsey
David A. Koch
Lane W. Basso
Gary H. Stern
Colleen K. Strand
Herman Cain
A. Drue Jennings
Peter I. Wold
Barry L. Eller
LeRoy W. Thorn
Thomas M. Hoenig
Richard K. Rasdall
Cece Smith
Roger R. Hemminghaus
Patricia Z. Holland-Branch
Issac H Kempner III
Carol L. Thompson
Robert D. McTeer, Jr.
Helen E. Holcomb
Judith M. Runstad
James A. Vohs
Anita E. Landecker
Ross R. Runkel
Gerald R. Sherratt
George F. Russell, Jr.
Carl W. Turnipseed1
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
Vice President
in charge of branch
Robert T. Parry
John F. Moore
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
SAN FRANCISCO ....
Los Angeles
Portland
Salt Lake City
Seattle
59601
64198
80217
73125
68102
75201
79999
77252
78295
94120
90051
97208
84125
98124
Charles A. Cerino1
Harold J. Swart1
William J. Tignanelli1
DanM. Bechter1
Julius Malinowski, Jr.2
James M. Mckee1
Fred R. Herr1
James D. Hawkins1
James T. Curry III
Melvyn K. Purcell
Robert J. Musso
David R. Allardice1
Robert A. Hopkins
Thomas A. Boone
John P. Baumgartner
John D. Johnson
Carl M. Gambs1
Mark L. Mullinix
Harold L. Shewmaker
Sammie C. Clay
Robert Smith, III1
James L. Stull1
Temporarily vacant
Raymond H. Laurence
Andrea P. Wolcott
Gordon Werkema1
*Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Jericho,
N e w York 11753; Utica at Oriskany, N e w 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. Assistant Vice President.
Publications of Interest
FEDERAL RESERVE CONSUMER CREDIT
PUBLICATIONS
The Federal Reserve Board publishes a series of pamphlets covering individual credit laws and topics, as
pictured below.
Three booklets on the mortgage process are available:
A Consumer's Guide to Mortgage Lock-Ins, A Consumer's Guide to Mortgage Refinancings, and A Consumer's
Guide to Mortgage Settlement Costs. These booklets
were prepared in conjunction with the Federal Home
Loan Bank Board and in consultation with other federal
agencies and trade and consumer groups. The Board
also publishes the Consumer Handbook to Credit Protection Laws, a complete guide to consumer credit protections. This forty-four-page booklet explains how to
shop and obtain credit, how to maintain a good credit
rating, and how to dispute unfair credit transactions.
Shop . . . The Card You Pick Can Save You Money is
designed to help consumers comparison shop when
looking for a credit card. It contains the results of the
Federal Reserve Board's survey of the terms of credit
card plans offered by credit card issuers throughout the
United States. Because the terms can affect the amount
an individual pays for using a credit card, the booklet
lists the annual percentage rate (APR), annual fee, grace
period, type of pricing (fixed or variable rate), and a
telephone number for each card issuer surveyed.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 127,
Board of Governors of the Federal Reserve System,
Washington, DC 20551. Multiple copies for classroom
use are also available free of charge.
Business
Credit
for W o m e n ,
Minorities, and
S m a l l Businesses
SHOP
The Card You Pick
Can Save You Money
Publications of Interest
FEDERAL RESERVE REGULATORY
SERVICE
To promote public understanding of its regulatory functions, the Board publishes the Federal Reserve Regulatory Service, a four-volume loose-leaf service containing all Board regulations as well as related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are published separately as handbooks pertaining to monetary
policy, securities credit, consumer affairs, and the payment system.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated monthly, and each contains citation indexes and a subject index.
The Monetary Policy and Reserve
Requirements
Handbook contains Regulations A, D, and Q, plus
related materials.
The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together
with related statutes, Board interpretations, rulings,
and staff opinions. Also included are the Board's list
GUIDE TO THE FLOW OF FUNDS
ACCOUNTS
A recent Federal Reserve publication, Guide to the Flow
of Funds Accounts, explains in detail how the U.S.
financial flow accounts are prepared. The accounts,
which are compiled by the Division of Research and
Statistics, are published in the Board's quarterly Z.l
statistical release, "Flow of Funds Accounts, Flows and
Outstandings." The Guide updates and replaces Introduction to Flow of Funds, published in 1980.
The 670-page Guide begins with an explanation of
the organization and uses of the flow of funds accounts
and their relationship to the national income and
product accounts prepared by the U.S. Department of
Commerce. Also discussed are the individual data
series that make up the accounts and such proce-
of marginable OTC stocks and its list of foreign margin
stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, BB, and DD,
and associated materials.
The Payment System Handbook deals with expedited
funds availability, check collection, wire transfers, and
risk-reduction policy. It includes Regulations CC, J, and
EE, related statutes and commentaries, and policy statements on risk reduction in the payment system.
For domestic subscribers, the annual rate is $200 for
the Federal Reserve Regulatory Service and $75 for
each Handbook. For subscribers outside the United
States, the price including additional air mail costs is
$250 for the Service and $90 for each Handbook. All
subscription requests must be accompanied by a check
or money order payable to the Board of Governors
of the Federal Reserve System. Orders should be
addressed to Publications Services, mail stop 127, Board
of Governors of the Federal Reserve System, Washington, DC 20551.
dures as seasonal adjustment, extrapolation, and
interpolation.
The balance of the Guide contains explanatory tables
corresponding to the tables of financial flows data that
appeared in the September 1992 Z.l release. These
tables give, for each data series, the source of the data or
the methods of calculation, along with annual data for
1991 that were published in the September 1992 release.
Guide to the Flow of Funds Accounts is available for
$8.50 per copy from Publications Services, Board of
Governors of the Federal Reserve System, Washington,
DC 20551. Orders must include a check or money order,
in U.S. dollars, made payable to the Board of Governors
of the Federal Reserve System.
@FedFRASER