Full text of Federal Reserve Bulletin : October 1982

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VOLUME 68 •

NUMBER 10 •

OCTOBER 1982

FEDERAL RESERVE

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

PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield
John M. Denkler • Griffith L. Garwood • James L. Kichline • Edwin M. Truman
Naomi P. Salus, Coordinator

The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Unit headed by Mendelle T. Berenson,
the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Helen L. Hulen.




Table of Contents
565 INTERNATIONAL

BANKING

can do to benefit housing and related industries is to pursue policies that will get rid of
inflation once and for all, before the Subcommittee on Forests, Family Farms, and
Energy of the House Committee on Agriculture, September 16, 1982.

FACILITIES

International banking facilities established
by banking offices in the United States have
shown substantial growth in the nine
months of their existence.

579 TREAS UR Y AND FEDERAL
RESERVE
FOREIGN EXCHANGE
OPERATIONS

From February through July the dollar was
generally strong against major foreign currencies.
609 STAFF

STUDIES

"Foreign Subsidiaries of U.S. Banking Organizations" shows that these subsidiaries
are an integral part of the international
financial network of large U.S. banks, that
their assets have increased tenfold during
the last decade, and that they are likely to
continue to be useful vehicles for U.S.
banks seeking to expand their international
banking capabilities.
"Redlining Research and Federal Legislative Response" finds little evidence to indicate that any neighborhood has been simultaneously redlined by all lenders, although
some discrimination by individual institutions may exist.

617 Henry C. Wallich, Member, Board of Governors, discusses the views of the Board on
foreign investment in U.S. banks and says
that on the whole the performance of foreign-owned banks has been satisfactory and
supervisory problems have not been serious, before the Subcommittee on Commerce, Consumer, and Monetary Affairs of
the House Committee on Government Operations, September 30, 1982.
625

ANNOUNCEMENTS

Amendments to Regulation D to change
from lagged to contemporaneous reserve
requirements the way depository institutions maintain reserves.
Amendments to Regulation E to reduce
regulatory burdens without giving up significant consumer protection in electronic
fund transfers.
Issuance of revised capital adequacy criteria.
Revision of official staff commentary on
Regulation Z.

612 IND US TRIAL PROD UCTION

Output declined about 0.6 percent in September.
614 STATEMENTS

TO

CONGRESS

Lyle E. Gramley, Member, Board of Governors, discusses the housing and forest
products industries in terms of their present
state and outlook for the future and says
that the most important thing government



Amendment to Regulation L that implements changes in the Depository Institutions Management Interlocks Act.
Change in reporting date for data on pastdue and other nonperforming loans.
Meeting of Consumer Advisory Council.
Publication of supplement to the Board's
list of over-the-counter stocks that are subject to its margin requirements.

Availability of Annual
1981.

Statistical

sets and were contributing to substantial
volatility in interest rates. The intermeeting
range for the federal funds rate, which
provides a mechanism for initiating further
consultation of the Committee, was set at 7
to 11 percent.

Digest,

Exemption of Massachusetts, Oklahoma,
and Wyoming from certain parts of the
Truth in Lending Act.
Proposed amendment to Regulation T regarding the use of private mortgage-backed
securities that may be used as collateral for
margin credit at securities brokers; proposed changes in Regulation L to simplify
and clarify Management Official Interlocks'
proposed rule that time deposits linked to a
line of credit on which checks or similar
third-party transfers can be drawn are subject to the reserve requirements of transaction accounts under Regulation D.
Hearing on a petition to prohibit the operation of sweep accounts by member banks.

637 LEGAL

DEVELOPMENTS

Amendments to Regulations A and Q; various bank holding company orders; and
pending cases.
AI

FINANCIAL AND BUSINESS

STATISTICS

A3
A46
A54
A70

Domestic Financial Statistics
Domestic Nonfinancial Statistics
International Statistics
Special Tables

Admission of three state banks to membership in the Federal Reserve System.

A69 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES

RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET COMMITTEE

A80 BOARD OF GOVERNORS AND STAFF

At its meeting on August 24, 1982, the
Committee agreed to reaffirm the objectives
for monetary growth established at the June
30-July 1 meeting calling for expansion at
annual rates of about 5 percent for Ml and
about 9 percent for M2 over the June to
September period. The Committee decided
that somewhat more rapid growth in the
monetary aggregates would be acceptable
depending upon evidence that economic
and financial uncertainties were fostering
unusual liquidity demands for monetary as-




A82 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
A83 FEDERAL RESERVE BANKS,
BRANCHES, AND OFFICES
A84 FEDERAL RESERVE
PUBLICATIONS

BOARD

A86 INDEX TO STATISTICAL

TABLES

A88 MAP OF FEDERAL RESERVE

SYSTEM

International Banking Facilities
This article was prepared by Sydney J. Key of
the Board's Division of International
Finance.
Footnotes appear at the end of the article.
The Federal Reserve Board permitted banking
offices in the United States to establish international banking facilities (IBFs) beginning in early
December 1981. The purpose was to allow these
banking offices to conduct a deposit and loan
business with foreign residents, including foreign
banks, without being subject to reserve requirements or interest rate ceilings. IBFs are also
exempt from the insurance coverage and assessments imposed by the Federal Deposit Insurance
Corporation. In addition, nine states have encouraged banking institutions to establish IBFs
by granting favorable tax treatment under state
or local law for IBF operations. As a result,
banking offices located in the United States can,
through their IBFs, conduct transactions with
foreign residents in a regulatory environment
broadly similar to that of the Eurocurrency market without having to use an offshore facility.
By early September 1982, nearly 400 banking
institutions—including U.S.-chartered banks,
U.S. agencies and branches of foreign banks, and
U.S. offices of Edge corporations—had established IBFs. Total assets at IBFs amounted to
more than $150 billion, of which IBFs in New
York accounted for more than three-quarters.
Chart 1 shows that IBF assets grew rapidly
during December 1981 as IBFs were opened in
large numbers and as assets were shifted to IBFs
from their establishing entities and from foreign
offices of those entities. Growth has continued in
1982 but at a more moderate pace. A considerable proportion of IBF activity is interbank, and
the bulk of IBF deposits have maturities of
fourteen days or more.
This article reviews the history of the IBF
proposal, summarizes the legal framework for
IBF operations, and then discusses the activities
of IBFs during the first nine months of their
existence.



HISTORY

OF THE IBF

PROPOSAL

During the 1960s, the Eurocurrency market grew
rapidly, as did participation in that market by
foreign branches of U.S.-chartered banks. This
development was in part a result of interest rate
ceilings, maturity limitations, and reserve requirements on deposits at banks in the United
States. U.S. measures to reduce net capital outflows from the United States—the Interest
Equalization Tax and Voluntary Foreign Credit
Restraint program, which were in effect from the
mid-1960s until January 1974—also contributed
to the growth of the offshore banking market.
By 1982, total deposits in the Eurocurrency
market amounted to an estimated $900 billion,
net of deposits between banks within the market.
Claims on nonbanks amounted to about $500
billion. Although dollar-denominated assets and
liabilities predominate, Euromarket activity includes all major currencies and is conducted in
international financial centers around the world.
The conventional definition of the Eurocurrency
market includes deposits and loans booked outside the country in whose currency they are
denominated. IBFs are domiciled in the United
1. IBF assets and liabilities
Ratio scale, billions of dollars

566

Federal Reserve Bulletin • October 1982

States; but, because their regulatory environment is broadly similar to that of the Euromarket, IBF deposits and loans, including those that
are denominated in dollars, can, for most purposes, be considered part of the Euromarket.
IBF-type proposals were first put forward in
the early 1970s to allow U.S. banks more flexibility under the Voluntary Foreign Credit Restraint
(VFCR) program, which set ceilings on claims on
foreigners held by U.S. banking offices. After the
removal of the VFCR and other U.S. capital
controls in January 1974, the idea of IBFs reemerged as a possible method of reducing the
burden of domestic reserve requirements and
interest rate limitations. Proposals for a "foreign
window" or a "free-trade banking zone" were
studied within the government as a way of granting regulatory relief. The Federal Reserve Board
was, however, concerned about the effect that
the adoption of such proposals would have on
the conduct of monetary policy and on competition among groups of U.S. banks.
The proposal that culminated in the final IBF
regulations was submitted to the Board by the
New York Clearing House Association in July
1978. The month before, the New York state
legislature had enacted a statute granting favorable tax treatment to IBFs under New York
State and City law, subject to the condition that
the Federal Reserve Board take action to exempt
IBF activities from reserve requirements and
interest rate limitations.
The Board considered the IBF proposal in
December 1978, and decided to request comment
on a number of its features and to analyze further
the issues involved. After passage of the Monetary Control Act of 1980, which broadened the
Federal Reserve Board's authority to impose
reserve requirements and explicitly confirmed
the Board's authority to exempt IBFs from such
requirements, the Board again considered IBFs
and issued proposed regulations for comment. In
June 1981 the Board adopted final regulations,
which became effective December 3, 1981.

FEDERAL RESERVE

BOARD

REGULATIONS

Although IBFs are often regarded as engaging in
loan and deposit transactions, in reality an IBF is
not an institution but rather a set of asset and



liability accounts segregated on the books of its
establishing entity. Under Federal Reserve
Board regulations, IBFs may be established by a
U.S.-chartered depository institution, a U.S.
branch or agency of a foreign bank, or a U.S.
office of an Edge or Agreement corporation. 1 No
formal application is required to open an IBF,
but an entity must notify its Federal Reserve
Bank before doing so and agree to comply with
the Federal Reserve Board's regulations, including recordkeeping, accounting, and reporting requirements. 2

Permissible

IBF

Activities

Transactions that may be booked at an IBF are
specified in the June 1981 amendments to Regulations D (Reserve Requirements of Depository
Institutions) and Q (Interest on Deposits) of the
Federal Reserve Board. In adopting these
amendments the Board intended to facilitate the
provision of international banking services to
foreign customers at banking offices in the United States. However, to avoid complicating the
conduct of domestic monetary policy, the Board
wanted to insulate U.S. economic activity from
IBF transactions. Among the Board's principal
concerns was the possibility that IBF accounts
might be substituted for transaction accounts
included in Ml or be used to circumvent reserve
requirements or interest rate ceilings. Consequently, the amendments to Regulations D and Q
impose a number of limitations on IBF activities
that do not apply to foreign branches of U n chartered banks.
First, IBF loan and deposit customers are
restricted to foreign residents (including banks),
other IBFs, and the entity establishing the IBF.
Lending to or accepting deposits from any other
U.S. resident is prohibited. Funds advanced to a
U.S. banking office from its own IBF are subject
to Eurocurrency reserve requirements in the
same manner as funds advanced from a bank's
foreign offices to its U.S. offices.
Second, limitations are placed on the maturity
of " I B F time deposits," which may be in the
form of deposits, borrowings, placements, or
similar instruments. An IBF may offer such
deposits with an overnight maturity to banks in
foreign countries, to other IBFs, and to domestic

International Banking Facilities

and foreign offices of its establishing entity; 3 but
IBF time deposits of nonbank foreign residents
are subject to a minimum maturity or notice
requirement of two business days.
Third, transactions of nonbank customers at
IBFs are subject to a minimum amount of
$100,000; a withdrawal of less than this amount is
permitted only to close out an account or to
withdraw accumulated interest. Deposits and
withdrawals of banks at IBFs are not subject to
any minimum amount.
Fourth, IBFs are prohibited from issuing negotiable instruments because such instruments
could be transferred by the original holder to
U.S. residents who are not eligible deposit customers of IBFs.
Fifth, an IBF may extend credit to a foreign
nonbank customer only if the proceeds are used
to finance operations of the borrower (or its
affiliates) outside the United States. Similarly,
under the Board's regulations, an IBF may accept a deposit from a foreign nonbank customer
only if the funds are used to support operations
of the depositor (or its affiliates) outside the
United States. 4
Sixth, IBFs may engage in limited kinds of
secondary market transactions; in particular,
they may purchase (or sell) IBF-eligible assets
such as loans, loan participations, securities,
certificates of deposit, and bankers acceptances
from (or to) any domestic or foreign customer,
except domestic affiliates of the establishing entity. 5

Permissible Activities
of U.S.
Banks

of Foreign

Branches

The limitations on IBFs are more restrictive than
those on foreign branches of U.S.-chartered
banks. In contrast to IBFs, such branches are
not prohibited from accepting deposits from and
making loans to U.S. residents. There are no
limitations on the maturities of deposits at such
branches provided that they are payable only
outside the United States. In addition, unlike
IBFs, foreign branches of U.S. banks may issue
negotiable instruments, such as certificates of
deposit and bankers acceptances, and they may
purchase or sell assets in secondary market
transactions without restriction.



567

However, for purposes of reserve requirements and interest rate ceilings, foreign branches
and IBFs are treated in a similar manner. Deposits at foreign branches of U.S. banks that are
payable only outside the United States are not
subject to reserve requirements or interest rate
ceilings. Net advances by a branch to its U.S.
parent bank, purchases of assets from its parent
bank, and branch loans to U.S. residents are
included in the calculation of the parent bank's
required Eurocurrency reserves. 6

OTHER BANKING

LAWS AND

REGULATIONS

In addition to the Federal Reserve Board's regulations, IBFs are governed by state and other
federal banking laws and regulations. An entity
that establishes an IBF does not obtain any new
powers by doing so, because an IBF is simply a
segregated set of books. Thus an establishing
entity may not engage in any type of business
through its IBF that it is not already permitted to
engage in under its federal or state charter or
license. For example, as a depository institution,
a federal savings and loan association could
establish an IBF, but as of this writing, it could
not make unsecured commercial loans through
the IBF because federal law does not permit the
association itself to make such loans.
Similarly, in meeting loan limitation requirements, establishing entities must include loans
made by the IBF. For example, IBFs established
by U.S. offices of an Edge corporation are subject to the lending limits and the leveraging
restrictions of the Edge corporation. 7
One example of the application of state banking laws and regulations to IBF activities involves U.S. offices of foreign banks. Some states
impose asset-pledge or asset-maintenance requirements based on the liabilities of state-licensed offices of foreign banks. Without special
action, these requirements would apply to liabilities of IBFs operated at such offices; however,
New York, California, and Florida have exempted IBF liabilities from these requirements.
Without special legislation, federal law would
have subjected deposits at IBFs established by
federally insured depository institutions to the
insurance coverage and concomitant assessments of the Federal Deposit Insurance Corpora-

568

Federal Reserve Bulletin • October 1982

tion. However, federal legislation enacted in late
1981 exempted deposits at IBFs from such coverage and assessments.

TAX LAWS AND

REGULATIONS

Favorable tax treatment under state and local
statutes has been an important factor for banks in
assessing the attractiveness of establishing an
IBF. Where favorable tax treatment for IBFs has
been granted, there are usually tax advantages in
booking loans at an IBF rather than at a domestic
office. For some U.S.-chartered banks, there are
also tax advantages to booking loans at an IBF
rather than at a shell branch because, in some
instances, state tax authorities have attempted to
apply state tax laws so that certain income from
shell branches would, in effect, be treated as
income of the domestic bank itself. In such a
situation, a bank may use an IBF instead of a
shell branch in order to rely on specific statutory
provisions granting tax relief to IBFs.
Nine states, including New York, California,
Illinois, and Florida, have enacted special tax
legislation for IBFs. 8 The provisions for tax relief
differ considerably, reflecting differences in both
the underlying state tax structures and the
amount and timing of the tax relief provided for
IBF operations. There have been no modifications to federal tax statutes for IBFs; as a result,
income arising from IBF activities is subject to
U.S. federal income taxation in the same manner
as other income of the domestic office of the
establishing entity.
New York was the first state to grant favorable
tax treatment to IBFs, but it limited that relief in
a number of ways. The statute established a
complex formula for determining an IBF's
"adjusted eligible net income," which is the
amount that is deductible from New York taxable income in computing New York State and
City income taxes. 9 Because the bulk of IBF
activity is located in that state, a summary of the
New York formula may be useful.
First, an IBF's "eligible net income" must be
calculated by subtracting its "applicable expenses" from its "eligible gross income." Eligible gross income consists of gross income from
making, arranging for, placing, or servicing loans




to foreign persons; the income derived from
deposits and placements with foreign banks or
other IBFs; and gains and losses on certain
foreign exchange transactions. Under regulations issued by the New York State Department
of Taxation and Finance, applicable expenses
include interest expenses, bad-debt deductions,
and other direct and indirect expenses.
Two adjustments must be made to a New York
IBF's eligible net income. The first is a deduction
for the "ineligible funding amount," which reflects the decision to give an IBF a tax benefit
only to the extent that the IBF is funded by
foreign persons, including other IBFs.
The second adjustment is a deduction for the
"floor amount." The purpose is to avoid an
abrupt decrease in tax revenues by reducing the
tax benefit granted to an IBF in proportion to the
decline in foreign lending activity on the domestic books of its establishing entity since 1975-77,
the base period. The floor amount is phased out,
but is not reduced to zero until the beginning of
the tenth taxable year of an IBF's existence.
In Illinois, the portion of a bank's adjusted
federal taxable income subject to state taxation is
determined by using a one-factor formula: the
ratio of a bank's gross income from Illinois
sources to its gross income from all sources. Tax
relief for IBFs was granted by allowing a bank to
exclude the "adjusted income" of its IBF from
its Illinois gross income for purposes of this
formula. However, like New York, Illinois requires that a floor amount be used to adjust an
IBF's income. 10 Illinois does not use the concept
of ineligible funding.
In California, a bank is taxed on the basis of
the worldwide activities of its "unitary" group—
that is, a group of affiliated corporations having
interrelated operations, including any that do
business in California. The amount of income
subject to California taxation is determined by an
apportionment formula that takes into account
the ratio of California to worldwide assets, revenues, and payroll. Tax relief for IBFs was granted by treating IBF assets and revenues as if they
were located outside California for purposes of
this formula.
In some states, special legislation for IBFs is
considered unnecessary; Texas, for example,
does not impose a tax on corporate income.

International Banking Facilities

1. Number of IBFs, by state and type of establishing
entity, September 8, 1982
State

Agencies
Offices of
UnEdge
Total
and
chartered
2
banks'
branches corporations

New York
California
Florida
Illinois
Texas
Pennsylvania
District of Columbia
Washington
Georgia
Massachusetts
Others4
Total

36
12
21
6
12
6
7
3
4
3
17
127

125
48
19
13

15
10
20
4
3
0
0
0
1
1
0
54

(3)

2
1
4
1
1
0
214

176
70
60
23
15
8
8
7
6
5
17
395

1. Only one thrift institution, a savings and loan association located
in Florida, has established an IBF; it is included with U.S.-chartered
banks in this table.
2. U.S. agencies and branches of foreign banks.
3. Under the Texas constitution, foreign banks are prohibited from
establishing agencies or branches in that state.
4. Connecticut, Kentucky, Louisiana, Michigan, New Jersey,
North Carolina, Ohio, and Rhode Island.

Although income from foreign sources is not
subject to Florida income taxes, that state enacted special IBF legislation to ensure that all
IBF operations would be exempt from Florida
income and other taxation.

569

78 percent of this total; in California, for about 13
percent; in Illinois, for nearly 6 percent; and in
Florida, for 2 percent.
IBF claims on unrelated parties amounted to
$131 billion (table 2). Claims on foreign banks
were the largest component of IBF assets: taken
together, balances due from banks in foreign
countries and loans to banks in foreign countries
accounted for more than two-fifths of claims on
unrelated parties. Business loans to foreign residents accounted for slightly more than onequarter of such claims; and loans to foreign
governments and official institutions accounted
for an additional 12 percent. (The growth of these
assets is shown in chart 2.)

2. Selected types of IBF assets
Ratio scale, billions of dotlars

Business loans to foreign residents

countries

Loans to foreign governments

IBF ACTIVITIES:

THE FIRST

NINE

MONTHS

As noted earlier, nearly 400 banking institutions
had established IBFs by September 8, 1982.
Almost half are located in New York; another
one-third are located in California and Florida.
(See table 1.) U.S. agencies and branches of
foreign banks account for more than half of the
total number of institutions establishing IBFs. 11
Of all the IBFs established by September 8,
only 219—or 55 percent—had total assets or
liabilities of $50 million or more and were therefore required to file a weekly report of their
activities with the Federal Reserve; of these, 38
had total assets or total liabilities of $1 billion or
more.

IBF

Assets

As of September 8, total IBF assets were $152
billion. IBFs in New York accounted for about



' Balances due from
banks in foreign
countries

IBFs of large U.S.-chartered banks and U.S.
agencies and branches of foreign banks had similar asset structures—that is, they had approximately the same proportion of claims on unrelated parties in most major asset categories. The
only notable difference between the two groups
involved claims on other IBFs, which were more
important for agencies and branches than for
large U.S. banks.
As of early September, IBFs at U.S. agencies
and branches of foreign banks accounted for a
substantial portion of IBF activity: 52 percent of
IBF claims on unrelated parties. Large U n chartered banks accounted for 42 percent of such
claims. By contrast, U.S. offices of Edge corpo-

570 Federal Reserve Bulletin • October 1982

rations accounted for only 5 percent of IBF
claims on unrelated parties; and smaller U n chartered banks accounted for the remaining 1
percent.
Of the approximately $68 billion in claims on
unrelated parties at IBFs of U.S. agencies and
branches of foreign banks, nearly three-fifths, or

$39 billion, was accounted for by U.S. agencies
and branches of Japanese banks. The amount of
IBF activity being conducted at agencies and
branches of Japanese banks is not surprising
because almost none of the Japanese banks have
Caribbean shell branches. 12
IBF loans and deposits may be denominated in

2. Assets and liabilities of international banking facilities, by type of establishing entity, September 8, 19821
Billions of dollars

Balance sheet item

Large
Unchartered
banks 2

Agencies
and
branches 3

All
other
entities 4

Total,
all
entities

54.8

68.0

8.5

131.3

2.4

10.8

2.0

15.2

11.1
.2
.1

12.4
0
1.0

4.2
0
0

27.7
.2
1.1

16.8
13.2
6.8
.9
1.8

17.0
14.7
9.1
.3
1.7

.7
1.0
.3
.1
.2

34.5
28.9
16.2
1.2
3.8

6.1

13.7

.4

20.2

60.9

81.6

8.9

151.5

ASSETS

1. Total claims on unrelated parties5
2. Loans and balances due from other IBFs
Balances due from
3.
Banks in foreign countries
4.
Foreign governments and official institutions
5. Securities of foreign residents
Loans to foreign residents
6.
Business (commercial and industrial) loans
7.
Banks in foreign countries
8.
Foreign governments and official institutions
9.
Other loans
10. Other assets in IBF accounts
11. Gross claims on foreign offices of establishing entity5
12. Total assets other than claims on U.S. offices of establishing
entity5
LIABILITIES

13. Total liabilities due to unrelated parties5

22.9

48.1

6.5

77.6

Liabilities due to other IBFs
Overnight maturity or notice
Liabilities due to banks in foreign countries
Overnight maturity or notice
2-13 days maturity or notice
14 days or more maturity or notice
Liabilities due to foreign governments and official institutions
Overnight maturity or notice
2-13 days maturity or notice
14 days or more maturity or notice
Liabilities due to other foreign residents
2-13 days maturity or notice
14 days or more maturity or notice
Other liabilities in IBF accounts

2.4
.1
9.7
.9
.1
8.8
3.6
1.6
.2
1.8
5.6
.2
5.4
1.0

12.3
.6
25.7
1.2
1.3
23.3
2.7
.5
.1
2.1
4.9
.2
4.8
1.3

.7
.1
1.8
.3
.2
1.4
.2
0
0
.2
3.4
.1
3.3
.4

15.4
.9
37.3
2.3
1.5
33.4
6.5
2.1
.3
4.1
13.8
.4
13.4
2.7

28. Gross liabilities due to foreign offices of establishing entity5
29. Total liabilities other than those due to U.S. offices of establishing entity5

34.6

22.2

1.3

58.1

57.6

70.3

7.8

135.7

30. Net due from or net due to ( - ) U.S. offices of establishing entity (item 29 minus item 12)5

-3.4

-11.3

-1.1

-15.8

MEMO: Net due from or net due to ( - ) foreign offices of establishing entity (item 11 minus item 28)5

-28.5

-8.6

-.9

-38.0

37

149

33

219

14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.

RESIDUAL

Number of reporters
1. Includes data only for entities whose IBFs had assets or liabilities of at least $50 million on September 8, 1982, or on any earlier
weekly IBF report date. (Details may not add to totals because of
rounding.)
2. Banks with domestic assets of $750 million or more on December
31, 1977.
3. U.S. agencies and branches of foreign banks.




4. U.S.-chartered banks with domestic assets of less than $750
million on December 31, 1977, and U.S. offices of Edge and Agreement corporations.
5. Includes amounts denominated in both U.S. dollars and other
currencies; unless noted, figures on all other lines include only
amounts denominated in U.S. dollars.

International Banking Facilities

either U.S. dollars or foreign currencies. Although U.S. banks had sought this ability, to
date the volume of IBF business denominated in
foreign currencies has been very small, accounting for only 2 to 3 percent of total assets or total
liabilities at IBFs of both large U.S.-chartered
banks and U.S. agencies and branches of foreign
banks. This compares with a share of business
denominated in foreign currencies of approximately 4 percent of total assets at Caribbean
branches of U.S. banks and about 25 percent of
total assets at London branches of U.S. banks.

4. Selected types of I B F liabilities
Ratio scale, billions of dolliars
Liabilities due to
in foreign
countries

: due to foreign
governments and official institutions
ions

Liabilities due to

IBF

IBFs have obtained most of their funding from
banks, including their establishing entities and
foreign offices of those entities. At first, IBFs
were funded primarily by net advances from
establishing entities and foreign offices of those
entities. As of the end of December 1981, IBF
liabilities due to unrelated parties were equal to
only one-third of IBF claims on unrelated parties
and amounted to about $18 billion. But, as chart
3 shows, the pattern of IBF funding has been
changing. In the aggregate, as of September 8,
1982, IBF liabilities due to unrelated parties had
increased to about 60 percent of IBF claims on
unrelated parties and amounted to $78 billion.
About half of these liabilities due to unrelated parties represented deposits of banks in
foreign countries. Foreign banks accounted for
approximately the same proportion of liabilities

3. C o m p o s i t i o n of I B F liabilities
Ratio scale, billions of dollars

•HMMHNHS

60

Net liabilities due to foreign
offices of establishing entity

if

/

1

ink foreign resi

Liabilities due to other IBFs

Funding

J

571

Net liabilities due to establishing entity
-




/

due to unrelated foreign residents at London and
Caribbean branches of U.S. banks. However,
relative to the size of the Eurocurrency market,
the volume of deposits of foreign banks at IBFs
was small. Such deposits amounted to $26 billion
at IBFs established by U.S. agencies and
branches of foreign banks and only $10 billion at
IBFs established by large U.S.-chartered banks.
In comparison, foreign branches of U.S.-chartered banks alone had $106 billion of liabilities
due to unrelated foreign banks as of July 30.
The maturity structure of IBF liabilities due to
foreign banks is typical of the maturity structure
of the Euromarket rather than that of the domestic interbank market. Although IBFs may offer
deposits with an overnight maturity to banks,
about 90 percent of the deposits of banks in
foreign countries on the IBF books as of early
September had maturities of fourteen days or
more. Bankers report that typical maturities are
from one to three months, a pattern similar to
that of the Euromarket, as contrasted with a
predominance of overnight maturities in the domestic interbank market.
The inter-IBF market is still quite small, but it
is growing. IBF liabilities due to other IBFs
increased from $l'/4 billion at the end of December 1981 to $15!/2 billion in early September
(chart 4). Of this total, U.S. agencies and
branches of foreign banks accounted for more
than $12 billion; these entities appear to use the
inter-IBF market as a substitute for the term

572

Federal Reserve Bulletin • October 1982

federal funds market, and so far, there has been
little trading of overnight funds among IBFs.
To date, rates paid on IBF deposits have been
virtually the same as rates on Eurodollar deposits of comparable size and maturity. Bankers
report only isolated instances of IBF deposit
rates below Eurodollar rates; a typical example
involves a bank located in a foreign country
acting in a fiduciary role for a customer with a
strong preference for an IBF deposit in the
United States. Bankers also report that rates on
deposits transferred to IBFs during times of
international crisis have not differed significantly
from Eurodollar rates.
The pattern of IBF funding of U.S.-chartered
banks has consistently differed from that of U.S.
agencies and branches of foreign banks. Agencies and branches have been funding a much
larger portion of their IBF claims on unrelated
parties with IBF liabilities due to unrelated parties. As of early September, they funded 71
percent of such claims with liabilities due to
unrelated parties; the comparable figure for large
U.S.-chartered banks was 42 percent.
This difference in the extent of direct funding
from unrelated foreign residents is reflected in a
difference in the reliance on net advances to
IBFs from foreign offices of the establishing
entity. As of early September, large U.S.-chartered banks funded 52 percent of their IBF
claims on unrelated parties with net advances
from their foreign offices to their IBFs; the
comparable figure for U.S. agencies and
branches of foreign banks was only 13 percent.
In the aggregate, large U.S.-chartered banks are
advancing funds to their foreign branches; thus
some portion of IBF funding from such branches
may be funding from the establishing entity that
is being channeled through its foreign branches.
The net position of an IBF vis-a-vis its establishing entity is a residual that balances the IBF
books. If IBF claims on unrelated parties and
related foreign offices exceed comparable IBF
liabilities, the establishing entity is advancing
funds to its IBF. If liabilities of an IBF exceed its
assets, the IBF is advancing funds to its establishing entity.
Under the New York State tax statute, funding
by the establishing entity is not funding by a
"foreign person" and therefore constitutes "ineligible funding," which reduces the tax benefit



allowed to an IBF. As expected, funding of New
York IBFs by large U.S.-chartered banks has
become very small; as already noted, funding
from the establishing entity appears to be channeled through foreign branches. However, despite this tax provision, funding of New York
IBFs by agency or branch establishing entities
amounted to more than $6Vi billion in the aggregate in early September.
Most of the other states with IBF tax statutes
do not use the concept of ineligible funding.
Outside New York, both large U.S.-chartered
banks and agencies and branches are, in the
aggregate, advancing funds to their IBFs. Of
course, both in New York and elsewhere, some
individual establishing entities are receiving
funds from their IBFs. As noted earlier, funds
acquired from an IBF are included in the calculation of an establishing entity's required reserves
against Eurocurrency liabilities.

Shifting of Assets and Liabilities
from U.S. Books of Establishing

to IBFs
Entities

As expected, some of the assets and liabilities on
the IBF books were shifted there from establishing entities and foreign offices of those entities.
In order to measure the effect of shifts of assets
and deposits to IBFs from banking offices in the
United States on domestic bank credit and the
monetary aggregates, the Federal Reserve has
collected data for amounts that were shifted from
U.S. books of establishing entities during the
first four weeks of each IBF's existence. 13
These data indicate that shifts of claims on
unrelated parties in initial four-week periods
amounted to about $34 billion by January 27,
1982. U.S. agencies and branches of foreign
banks accounted for nearly 85 percent of these
shifts. This is not surprising because, compared
with U.S.-chartered banks, the agencies and
branches had more IBF-eligible assets on their
U.S. books in the first place. As expected, shifts
from U.S. books of agencies and branches of
Japanese and Italian banks were particularly
large because, as noted earlier, almost none of
the Japanese and Italian banks have Caribbean
shell branches. The $16 billion in claims on
unrelated parties shifted from U.S. books of
agencies and branches of Japanese banks was

International Banking Facilities

equal to more than a fifth of total assets at all
U.S. agencies and branches of Japanese banks.
Initial four-week transfers to IBFs from U.S.
books of establishing entities of liabilities due to
unrelated parties, including those occurring at
maturity, have been relatively small. Agencies
and branches accounted for nearly 90 percent of
the approximately $6 billion in such transfers
that occurred through January 27, the bulk of
which was in liabilities due to foreign banks and
to foreign governments and official institutions.
Because deposits of foreign banks and official
institutions are excluded from the U.S. monetary
aggregates, the impact of such liability shifts on
the monetary aggregates was negligible. 14
Reports filed by additional establishing entities
from the end of January through early September show that these institutions shifted about $3
billion in claims on unrelated parties to their
IBFs during the first four weeks of the IBF's
existence. Of this amount, about $2 billion was
accounted for by agencies and branches. These
reports also show that during this period initial
four-week transfers to IBFs of liabilities due to
unrelated parties amounted to about %iA billion.
The excess of assets over liabilities shifted
from domestic books to IBFs during the initial
four-week periods was not surprising for several
reasons: first, a significant portion of domestic
office liabilities due to foreign residents comprises negotiable certificates of deposit, which
may not be offered by IBFs; second, Regulation
Q penalties for early withdrawal of certain time
deposits probably inhibited shifting, because a
deposit could be transferred to an IBF before
maturity without incurring such penalties only if
the maturity were not shortened and if the rate
were not changed; and, third, unlike shifting a
loan, shifting the booking of a deposit to an IBF
may involve renegotiation with the customer,
because the characteristics of IBF time deposits
are somewhat different from those of most domestic office liabilities.
A number of U.S. banking institutions still
have some loans to foreign residents and deposits of foreign residents on their U.S. books. For
example, as of September 8, large U.S.-chartered banks had about $71/2 billion in loans to
foreign banks, $7^3 billion in business loans to
foreign residents, and $5 billion in time deposits
of foreign banks and foreign governments and



573

official institutions on their domestic books. Although it is not known whether such loans and
deposits are IBF-eligible, some further shifting to
IBFs from U.S. offices may occur.

Shifting of Assets and Liabilities to IBFs
from Foreign Offices of
Establishing
Entities
No data are available for shifting to IBFs from
foreign offices of either U.S. or foreign banks.
However, the amounts of such shifts through
January 27 were estimated by subtracting the
amounts shifted to IBFs from U.S. books of
establishing entities from the amounts on the IBF
balance sheets. This calculation assumes that all
amounts on the IBF books at the end of January
were shifted from establishing entities or foreign
offices of those entities, and does not take into
account other business booked at IBFs or
amounts shifted from U.S. books of an establishing entity after the filing of its four-week domestic shift report. As a result, these estimates
represent an upper limit on amounts shifted to
IBFs from foreign offices of establishing entities
through the end of January.
As of January 27, IBFs established by U n chartered banks had about $25 billion in claims
on unrelated foreign residents and about $6 billion in liabilities due to unrelated foreign residents that were not shifted from U.S. offices of
these banks during the first four weeks after
establishment of an IBF (table 3). The comparable figures for IBFs established by U.S. agencies
and branches of foreign banks were about $5Vi
billion for claims on unrelated foreign residents
and $9 billion for liabilities due to unrelated
foreign residents.
That non-U.S. offices of foreign banks have
shifted much smaller amounts of assets to IBFs
than have non-U.S. offices of U.S. banks can be
explained in part by differences in tax incentives.
U.S. banks are subject to U.S. federal income
taxation on their worldwide income, which includes income of both their IBFs and their foreign offices. Therefore, shifting assets from a
foreign office to an IBF would not, in general,
increase a U.S. bank's federal income tax liability. Income arising from the activities of an IBF

574

Federal Reserve Bulletin • October 1982

at a U.S. agency or branch of a foreign bank is,
like that of an IBF of a U.S. bank, subject to
U.S. federal income taxation in the same manner
as income arising from the activities of the agency or branch itself. By contrast, income associated with activities at non-U.S. offices of foreign
banks is not subject to U.S. federal taxation,
provided that the income is not "effectively
connected" with the activities of a U.S. agency
or branch. As a result, a foreign bank would, in
general, increase its U.S. federal income tax
liability by shifting assets from a foreign office to
an IBF.
The estimates of potential shifting to IBFs
from foreign branches of U.S. banks are consistent with data from the monthly reports filed by
these branches. Although it is impossible to
determine what changes in branch activity would
have occurred in the absence of IBFs, shifting to
IBFs appears to have been associated with a
decline in transactions with unrelated foreign
residents at foreign branches of U.S. banks. As
table 3 shows, from the end of November to the
end of January, claims on and liabilities due to

unrelated foreign residents at Caribbean
branches of U.S. banks that had established
IBFs declined by amounts roughly similar to the
estimated shifts to IBFs from foreign offices of
U.S. banks. Moreover, bankers indicate that the
bulk of shifts to IBFs from foreign branches of
U.S. banks were from branches in Nassau and
the Caymans. Claims on and liabilities due to
unrelated foreign residents, particularly banks,
at London branches of U.S. banks also declined
from the end of November to the end of January,
but it is not clear to what extent these declines
were caused by shifting to IBFs.
The excess of estimated assets over estimated
liabilities shifted to IBFs from foreign branches
of U.S. banks implicitly involves advances from
the foreign branches to the IBFs, and is consistent with the change in the net position of the
Caribbean branches vis-a-vis their parent banks
in the United States, which include IBFs.
The decline in transactions with unrelated foreign residents at Caribbean branches that appears to have been associated with shifts to IBFs
during December and January continued through

3. Potential shifting to IBFs from foreign branches of U.S.-chartered banks through January 27, 1982
Billions of dollars

Item

Claims on unrelated foreign residents
1. Banks
2. Nonbanks
3. Public and official institutions
4. Total, lines 1-3 4
Liabilities due to unrelated foreign
5. Banks
6. Nonbanks
7. Public and official institutions
8. Total, lines 5-7 4

Amounts
outstanding
at IBFs,
1/27/82"

Shifts to
IBFs from
domestic
books 2

Potential
shifts to IBFs
from foreign
branches,
(2) - (1)

Changes at
Caribbean
branches,
11/30/81—1/29/823

(1)

(2)

(3)

(4)

(5)

1.2

12.3
8.7
3.8
24.8

-11.5
-7.8
-4.0
-23.3

-7.1
-.6

3.9
1.3
.9

-5.5
-1.2

13.5
10.9
4.7
29.1

2.2

.9
4.3

Changes at
London
branches,
11/30/81-1/29/821?

-.2

-7.9

residents
3.9
1.4
.9

6.1

6.2

-.1
-6.8

-6.5
-2.8
1.0
-8.3

-16.7

-3.0

MEMO

Excess of assets shifted to IBFs over
liabilities shifted to IBFs (line 4 minus
line 8)
Net liabilities due to U.S. offices (including
IBFs) on books of foreign branches
1. Includes only IBFs that were established by U.S.-chartered
banks on or before January 6, 1982, and that had assets or liabilities of
at least $50 million on January 27, 1982. Figures include amounts
denominated in U.S. dollars only.
2. Includes shifting through January 27, 1982, to IBFs that were
established on or before January 6, 1982, and that had assets or
liabilities of at least $50 million on January 27, 1982. Figures include
amounts denominated in U.S. dollars only.
3. Includes only branches that reported on form FR 2502 as of




4.2

18.7

November 30, 1981, and as of January 29, 1982 (the last business day
of the month), and whose U.S.-chartered parent banks had established IBFs.
4. Does not include claims on (other liabilities due to) other IBFs
because IBFs are not foreign residents. Securities of non-U.S. addressees and "other assets" ("other liabilities") in IBF accounts are
also excluded because the equivalent categories for foreign branches
of U.S. banks are not allocated between domestic and foreign
residents.

International Banking Facilities

575

5. Transactions with unrelated foreign residents at Caribbean branches of U.S.-chartered banks

mid-1982. This trend suggests that IBFs are
being used instead of shell branches to book
business that is IBF-eligible. As chart 5 shows,
Caribbean branch claims on three categories of
foreign residents—banks, nonbanks, and public
and official institutions—continued to decline
through the first half of 1982, although at a less
rapid rate than in December and January. Liabilities due to foreign banks at the Caribbean
branches continued to decline rather sharply.
As shown in table 4, despite the relatively
large decline in Caribbean branch transactions
with unrelated foreign residents over the entire

period from the end of November through the
end of July, considerable amounts of claims on
and liabilities due to unrelated foreign residents
remain on the Caribbean branch books.
At London branches of U.S.-chartered banks,
the pattern of activity since the end of January
appears to have been affected only slightly, if at
all, by the existence of IBFs. For example,
although claims on unrelated foreign banks at the
London branches declined in December and January, a time when many IBFs were established,
such claims remained approximately constant
from the end of January through July (chart 6).

6. Transactions with unrelated foreign residents at London branches of U.S.-chartered banks




576

Federal Reserve Bulletin • October 1982

4. Selected assets and liabilities of foreign branches of U.S.-chartered banks'
Billions of dollars
All branches

Caribbean branches

London branches

Item

Total assets/liabilities
Claims on unrelated parties 3
Foreign residents
U.S. residents
Liabilities due to unrelated parties 3
Foreign residents
U.S. residents

11/30/81

7/30/82

Percentage
change 2

11/30/81

7/30/82

Percentage
change 2

11/30/81

7/30/82

463
347
309
18
326
228
79

465
321
274
27
318
195
103

.5
-7.5
-11.1
52.0
-2.5
-14.7
30.9

149
117
100
12
89
41
44

141
93
67
22
85
25
58

-5.2
-20.4
-32.9
81.3
-4.8
-40.1
30.4

162
115
104
4
141
102
32

164
107
97
4
139
91
40

1. Data include all branches with total assets of at least $150
million—or "shell" branches with total assets of at least $501 million—
on the report date or on any previous report date in the same calendar
year.
2. Percentage changes were computed using unrounded numbers.

CONCLUSION

Claims on unrelated parties at IBFs amounted to
$57 billion on December 30, 1981, the end of the
first month of IBF operations. Since then, IBF
activity has continued to grow, and, as of September 8, 1982, such claims amounted to $131
billion. Although IBFs have been in operation for
less than a year, some definite patterns of activity have emerged. For example, on the liability
side, IBF business consists primarily of interbank and intrabank transactions. However, this
pattern may change over time as IBFs develop a
nonbank customer base.
Both U.S.-chartered banks and U.S. agencies
and branches of foreign banks that have established IBFs are continuing to develop ways to
use IBFs more effectively. New York State tax
regulations for IBFs were not issued until the end
of March 1982, and the prolonged uncertainty
regarding these regulations may partially explain
why some banking institutions have moved slowly in shifting assets to their IBFs.
The consensus in the banking community is




Percentage
change 2
-1.5
-6.7
-7.4
3.0
-1.7
-10.8
23.1

3. Claims on (liabilities due to) unrelated U.S. residents plus claims
on (liabilities due to) unrelated foreign residents do not equal total
claims on (liabilities due to) unrelated parties because an "other
assets" ("other liabilities") category is not allocated between domestic and foreign residents on the FR 2502 report form.

that, to date, IBFs have not attracted a substantial amount of new business. Rather, the business now on the IBF books either was shifted
there from establishing entities and foreign offices of those entities or would, in the absence of
IBFs, have been booked at the establishing entities or foreign offices of those entities.
Beyond the general forces underlying the
growth of the Eurocurrency market as a whole, a
number of factors are involved in the future
growth of IBFs. For example, the ability of IBFs
to attract deposits from foreign residents will
depend, among other things, on depositors' perceptions of advantages regarding the sovereign
risk associated with deposits subject to U.S. law
and on the extent to which banks actively market
IBF deposits.
Just how competitive IBFs will be with other
banking centers remains to be seen. Further
growth in IBF activity in the near future seems
likely as experience is gained with this innovation. And in the long term, IBFs have the potential to become a significant center of Euromarket
activity.
•

International

Banking Facilities

577

FOOTNOTES
1. In general, each branch or agency of a foreign bank may
establish an IBF. However, for regulatory and reporting
purposes IBF activities at a foreign bank's branches and
agencies in the same state and same Federal Reserve District
are regarded as activities of a single IBF.
A U.S.-chartered bank may engage in IBF activities at any
of its branch offices; since virtually all U.S.-chartered banks
may operate branches in only one state, for regulatory and
reporting purposes a U . S . bank is regarded as establishing
only one IBF. However, through its subsidiary Edge corporation, a U . S . banking organization may have IBFs in more
than one state.
In general, IBFs may be established at each U.S. office of a
subsidiary Edge corporation of a domestic or foreign bank.
However, as in the case of agencies and branches, for
regulatory and reporting purposes, IBF activities at offices of
Edge corporations in the same state and same Federal
Reserve District are regarded as activities of a single IBF.
2. Such notice must be filed two weeks before opening an
IBF. The basic accounting requirement is that an establishing
entity must segregate on its books and records the asset and
liability accounts of its IBF. At present the Board requires
entities whose IBFs have assets or liabilities of $50 million or
more to file weekly reports of their IBF accounts. All entities
with IBFs are required to file a quarterly report of their IBF
accounts as a supplement to their quarterly report of condition.
3. IBF transactions with foreign governments and official
institutions are treated in the same manner as IBF transactions with foreign banks. Deposits of foreign governments
and official institutions, like those of foreign banks, are not
included in the U.S. monetary aggregates.
4. This policy must be communicated in writing to IBF
nonbank customers when a credit or deposit relationship is
first established; foreign affiliates of U.S. entities must supply
a written acknowledgment.
5. The transactions must be at arm's length and without
recourse, and the assets involved must satisfy the use-ofproceeds requirement. In addition, an establishing entity and
its affiliates may not endorse or in any way guarantee a
negotiable instrument sold by its IBF in a secondary market
transaction.
6. In the calculation of such reserves, any amounts that the
foreign branches are, on a net basis, receiving from their
parent bank may be used to offset branch loans to U.S.
residents and purchases of assets from the parent bank.
7. Some banking organizations have requested that the
Board consider permitting lending limits and leveraging restrictions for an IBF established by a U . S . office of an Edge
corporation to be based on the capital of the parent bank,
rather than that of the Edge corporation.
8. The others are Connecticut, Maryland, Georgia, North
Carolina, and Washington; the District of Columbia has also
enacted IBF tax legislation.
9. Under N e w York law, N e w York taxable income may
be computed according to one of two methods: a separate
accounting basis; or a formula allocation basis under which a
portion of adjusted federal taxable income is allocated to




N e w York on the basis of a one-factor formula, the ratio of
gross income from N e w York sources to gross income from
all sources. Many N e w York banks use the separate accounting basis.
10. The adjustment for the floor amount in Illinois is
similar to that in N e w York except that the base year is 1980,
and the floor amount is not phased out.
11. Some multistate networks of related IBFs have been
established, particularly by foreign banks. Of the 126 U n chartered banks that have themselves established IBFs, 23
have related IBFs in at least one other state established by
offices of their subsidiary Edge corporations. Of the 138
foreign banks with U . S . agencies and branches that have
established IBFs, 87 have IBFs at agencies or branches in
only one state (in almost all cases, N e w York), while the
remaining 51 have IBFs at agencies or branches in at least
two states.
12. Like the Japanese banks, almost none of the major
Italian banks have Caribbean shell branches. A s of September 8, IBFs established by agencies and branches of Italian
banks had about %1Vi billion in claims on unrelated parties,
the largest figure for a European country. In the aggregate,
IBFs established by U . S . agencies and branches of European
banks had about $22 billion in such claims.
13. Asset sales from a U . S . banking office to its IBF are
subject to Eurocurrency reserve requirements; however, the
Federal Reserve Board's regulations permit assets to be transferred from a U.S. office to its IBF on a reserve-free basis
during the first four weeks after the institution has established
its IBF. This rule appears to provide an incentive for a banking
office to make such transfers during that period. However,
some large U.S.-chartered banks were substantial net lenders of
funds to their foreign branches, so that even after taking into
account such asset sales (and also loans to U.S. residents at
their foreign branches), these banks would have had no incentive arising from Eurocurrency reserve requirements to make
such transfers during the four-week period.
14. Shifting of assets and liabilities to IBFs had a relatively
small impact on required reserves. From December 3, 1981,
through January 1982, the period during which the bulk of
shifting from domestic books to IBFs occurred, the estimated
reduction in required reserves attributable to IBFs was only
about $180 million to $230 million compared with total
required reserves of about $41 billion for the week ending
December 2, 1981. Most of the impact was attributable to a
decline in Eurocurrency reserves, which are estimated to
have decreased between $140 million and $160 million compared with total Eurocurrency reserves of $550 million for the
week ending December 2. The reduction in Eurocurrency
reserves resulted principally from the transfer to IBFs of an
excess of claims on unrelated foreigners over liabilities due to
unrelated foreigners from the U . S . books of establishing
entities. These transfers created a "due from I B F " on the
books of the domestic office, which, because IBFs are
included with foreign branches for reserve requirement purposes, reduced U . S . offices' net liabilities due to foreign
branches and IBFs—one of the components used in calculating Eurocurrency reserve requirements.

579

Treasury and Federal Reserve
Foreign Exchange Operations
This 41st joint report reflects the Treasury-Federal Reserve policy of making available additional information on foreign exchange
operations
from time to time. The Federal Reserve Bank of
New York acts as agent for both the Treasury
and the Federal Open Market Committee of the
Federal Reserve System in the conduct of foreign
exchange
operations.
This report was prepared by Sam Y. Cross,
Manager of Foreign Operations for the System
Open Market Account and Executive Vice President in charge of the Foreign Group of the
Federal Reserve Bank of New York. It covers the
period January through July 1982. Previous reports have been published in the March and
September BULLETINS of each year beginning
with September 1962.
The dollar was generally strong during the February-through-July period of this review. It
climbed irregularly through the first half of the
year, and by early July reached levels against
several currencies not seen in many years. Although the dollar eased back from its highs
during the last weeks of July, it closed on balance
between 4 and 16 percent higher against major
foreign currencies.
For much of the period, market participants
focused on monetary policy developments here
and abroad though the movement of interest rate
differentials had less impact on dollar exchange
rates than in many earlier periods. In the United
States, money growth was strong even as the
economy contracted, and an unexpectedly large
bulge in the monetary aggregates in January
pushed growth in M l above its targeted range.
Market participants anticipated that the Federal
Reserve would tighten up on the availability of
banks' reserves, thereby restraining the growth
of money and credit even though concern was
mounting over recession in the United States.
Also, the prospect of continued large U.S. fiscal



deficits, even after the economy was projected to
emerge from recession, put pressures on the
financial markets.
Abroad, monetary authorities faced even more
prolonged weakness of their domestic economies
than experienced in the United States as well as
persistent inflationary pressures and structurally
large fiscal deficits. Pressures to stimulate demand and to lower record or near-record rates of
unemployment were intense. Expectations developed in the market that foreign authorities not
only would be reluctant to raise their interest
rates, but would also take advantage of opportunities to relax their financial policies, at least in
some measure.
In general, interest rate developments tended
to confirm these expectations through the first
half of the year. With the Federal Reserve restraining the growth of bank reserves, short-term
U.S. interest rates were bid up sharply in March
and again in June in anticipation of a renewed
expansion in the monetary aggregates. When
dollar interest rates rose, interest rates for assets
denominated in other currencies barely increased.
On those occasions when the demand for
money and credit subsided and U.S. interest
rates eased, such as in late February and late
April and early May, interest rates abroad also
tended to soften and some foreign central banks
reduced official lending rates. Moreover, in view
of improvements in inflation and balance of
payments performances, some countries, notably Germany and the Netherlands, were prepared at times to see a lowering in their domestic
interest rates even without comparable declines
in U.S. interest rates. As a result, there was a
tendency through June for actual and expected
interest rate differentials favoring the dollar to
widen when U.S. interest rates moved higher by
more than the differentials narrowed when U.S.
rates moved lower.

580

Federal Reserve Bulletin • October 1982

Meanwhile, several other factors supported
the demand for dollars. Underpinning the dollar
was growing evidence that inflation was receding
in the United States. To be sure, market participants had concerns about the stance of fiscal
policy, including fears that pressures would arise
on the Federal Reserve to relax monetary policy
prematurely and thereby dissipate the hard-won
gains in the anti-inflation fight. But, for the time
being, market participants were generally impressed by the commitment to reduce the role of
government in the private sector, by the steadfastness of the U.S. monetary authorities in
sticking with restrictive policies, and by the
results achieved so far. Wage settlements proved
surprisingly moderate, with some unions accepting pay cuts to prevent or cushion declines in
employment, and many union settlements actually suspended or otherwise modified even the
principle of cost-of-living increases. Forecasters
anticipated that, even if food and energy prices
were to increase again, the overall U.S. inflation
rate would decelerate substantially for the year
as a whole. Inflation in this country was therefore moving well below that of most U.S. trading
partners and was rapidly converging toward the
performance of traditionally "low inflation"
countries, such as Germany, Japan, and Switzerland.
Also, the deepening international recession, an
abrupt stagnation in the volume of world trade,
and a buildup of pressures for protectionist measures affected the United States less adversely
than many other countries. Confounding expectations of a swing into deficit, this country's
current account remained in surplus. Import
volumes, particularly of crude oil, declined
sharply in response to the recession in the economy and continued reaction to previous oil price
increases, while agricultural exports and the performance of services, most notably net investment income earnings, remained strong. Also, a
softening of most commodity prices and the
strengthening of the dollar led to an improvement
in the terms of trade, which helped hold down
the total cost of imports. At the same time,
further improvements in the current accounts of
Germany and Japan were stalled by the weakening global demand for manufactured goods, as
well as the slowdown of previously buoyant
markets in Asia and in Organization of Petroleum



Exporting Countries (OPEC) member states. Indeed, the more pessimistic outlook for growth of
world trade heightened competitive pressures,
particularly for those countries in which trade is
a major component of gross national product.
In addition, the United States continued to
prove attractive to foreign investors. For one
thing, economic policies of the United States
embodied a clear antiregulatory posture and a
strong commitment to private enterprise that,
combined with a relatively flexible structure of
management-worker relations, served as an inducement to foreign direct investment in the
United States. The domestic political and economic climate in many other parts of the world,
including continental Europe and Canada, was
often more uncertain for business and financial
investment.
In the first six months of 1982, foreign direct
investment in the United States continued to
exceed U.S. direct investment abroad. For another, the United States increasingly came to be
viewed as a safe haven for investors seeking
outlets for funds at a time of mounting international insecurity. Instability in Eastern Europe
and open hostilities in the Middle East were
thought to have more serious economic and
political implications for many countries abroad
than for the United States. These international
tensions posed difficult policy issues for authorities already grappling with divisive domestic
problems, underlining in the market's view the
difficulties foreign leaders confronted in dealing
with the numerous challenges before them.
These uncertainties therefore prompted sizable
net flows of long-term portfolio capital into the
United States that, to some extent, had their
counterpart in outflows from Germany and Japan.
Several of the factors underpinning the dollar
coalesced in early June. Hostilities in Lebanon
intensified, other developments in the Middle
East were temporarily unsettling, the financial
markets in the United States were wary of a
renewed bulge in the monetary aggregates, and
market speculation built up that competitive
pressures would soon force a realignment of the
European Monetary System (EMS). In the
event, the EMS was realigned over the June 1213 weekend, following an earlier adjustment of
parities in February. This time intense bidding

Foreign Exchange Operations

581

1. Drawings and repayments under reciprocal currency arrangements, January 1, 1982-July 31, 1982'
Millions of dollars equivalent; drawings, or repayments ( - )
Activity by foreign central banks
Bank drawing on System

Bank of Mexico

Outstanding,
Jan. 1, 1982

0

Outstanding,
July 31, 1982

1982
Q1

Q2

July

0

f 800.0
1-800.0

700.0}
-200.0)

700.0

Activity by the Federal Reserve System
Transactions with

Commitments,
Jan. 1, 1981

Commitments,
July 31, 1982

1982
Q1

Q2

July

Public series
German Federal Bank
Swiss National Bank

3,622.3
458.5

0
0

-451.0
0

-580.6
0

2,610.6
458.5

Total

4,080.8

0

-451.0

-580.6

3,069.1

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

pushed the dollar up, not only against the currencies that had been devalued in the joint float, but
also and unexpectedly against the German mark,
which had just been revalued, and against nonEMS currencies as well. With the dollar rising
sharply in unsettled markets, the U.S. authorities intervened on June 14 in an effort to restore
orderly trading conditions. Operating through
the Trading Desk, they bought $21 million equivalent of German marks and $9 million equivalent
of Japanese yen. This operation provided resistance to the rapid run-up in dollar rates and
helped restore more orderly trading conditions.
In July dollar interest rates dropped sharply.
The domestic economy was proving far weaker
than expected, with worrisome declines in production and with increases in unemployment.
Though corporate balance sheets remained generally strained by the burden of short-term debt,
overall credit demands slackened in response to
the continuing stagnation in demand and output.
Moreover, the growth of the monetary aggregates, for the first time in 1982, slowed sufficiently to bring Ml into target range, and with shortterm interest rates softening, the Federal
Reserve twice announced cuts in its discount
rate of Vi percentage point from 12 to 11 percent
by the end of July. Abroad, interest rates did not
decline nearly so much. The process of winding
down inflationary pressures had stalled. Although economic conditions generally had deteriorated further as the recession deepened, only
in a few countries, such as Great Britain and



France, did the authorities continue the earlier
trend toward an easing of monetary policy, and
short-term interest rates in most foreign industrial countries were either unchanged or moved
somewhat higher. Thus, interest rate differentials
narrowed dramatically, for example, from IVi to
4 percentage points vis-a-vis the German mark
and from 9Vi to 53/4 percentage points against the
Japanese yen.
The dollar weakened only slightly, however.
Market participants recognized that there continued to be important reasons other than interest
rates for buying and holding dollars. In addition,
by this time, market participants were shoring up
their liquidity positions in dollars as a precaution
against any funding difficulties that might arise in
the wake of the deteriorating financial positions
of major private and public-sector borrowers.
Some problems had arisen affecting U.S. banks
and other financial concerns, as in the cases of
Drysdale Securities and Penn Square Bank, as
well as private institutions abroad. Still other
difficulties related to the sovereign debts of various countries including major borrowers in Eastern Europe and Latin America. Among market
participants the feeling prevailed that, while individual U.S. institutions were vulnerable to serious financial strains, they were as a group in a
better position to cope with international financial pressures than nondollar-based institutions.
By the end of July the dollar was off the
highest levels of the period. Compared with
levels at the end of January, it was still about AVi

582

Federal Reserve Bulletin • October 1982

percent higher on balance against the Canadian
dollar and the German mark, nearly 7 percent
higher against pound sterling, and about 11 percent higher against the Japanese yen and the
Swiss franc. Against the currencies within the
EMS that had been devalued, the dollar rose on
balance between 9 percent and 16 percent. On a
trade-weighted basis the dollar rose nearly 10
percent.

2. U.S. Treasury and Federal Reserve
foreign exchange operations1
Net profits or losses (—), in millions of dollars
U.S. Treasury
Period

1982: 1
2
July
Valuation profits and losses on
outstanding assets and liabilities as of July 31, 1982 . . .

Federal
Reserve

0
0
0
-617.4

Exchange
Stabilization
Fund
16.9
1.5
1.7
-1,382.2

General
account
-

4.2
78.5
58.8
722.2

1. Data are on a value-date basis.

During the period, the Bank of Mexico requested and was granted three drawings on its
swap line under the Federal Reserve's reciprocal
currency arrangements. The drawings were
made at the end of April, June, and July, each for
one-day maturity.
On May 12 and July 26 the U.S. Treasury
redeemed further maturing German mark-denominated securities equivalent to $1,011.6 million. After these redemptions, the Treasury had
outstanding $3,069.1 million equivalent of the
foreign currency notes, public series, which had
been issued in the German and Swiss markets
with the cooperation of the respective authorities
in connection with the dollar-support program of
November 1978. Of the notes outstanding as of
July 31, 1982, a total of $2,610.6 million was
denominated in German marks and $458.5 million was denominated in Swiss francs. The maturity dates for those securities range between
September 1, 1982, and July 26, 1983.
In the seven months through July 1982, the
Federal Reserve had no gains or losses on its
foreign currency transactions. The Exchange
Stabilization Fund (ESF) gained $15.7 million net
in connection with sales of foreign currencies to
the Treasury general account, which the Trea


sury used to finance interest and principal payments on foreign currency-denominated securities. The Treasury general account gained $133.1
million net, reflecting $137.3 million of profits on
the redemption of German mark-denominated
securities, which was partially offset by $4.2
million of losses as a result of annual renewals at
current market rates of the agreement to warehouse Swiss-franc proceeds of Treasury securities with the Federal Reserve. As of July 31,
1982, valuation losses on outstanding balances
were $617.4 million for the Federal Reserve and
$1,382.2 million for the ESF. The Treasury general account had valuation gains of $722.2 million
related to outstanding issues of securities denominated in foreign currencies.

GERMAN

MARK

By late 1981 through early 1982 Germany's economic situation had improved in major respects.
Germany's export sector was enjoying boom
conditions aided by improved competitiveness,
which partly reflected the mark's prolonged depreciation against the dollar, and by exceptional
buoyancy in OPEC markets. Meanwhile, import
demand was sluggish, reflecting stagnation in the
domestic economy. This combination generated
a surplus in the current account in the fourth
quarter of 1981 and, for the year as a whole,
produced a dramatic narrowing of the deficit
from DM 30 billion to DM 17 billion. Inflation,
after peaking at an annual rate of 6.7 percent in
October 1981, slowed markedly in response to
softer international commodities prices, a flattening-out of unit labor costs, and the impact of
economic slack on wage-price behavior. Greater
progress by Germany than by most other countries in gaining balance of payments equilibrium
and in the fight against inflation had for some
time kept the mark strong within the EMS.
Therefore, even as the German currency declined against the dollar to trade around DM
2.3420 at the end of January, it tended to stabilize
in effective terms. The authorities felt able to
begin a cautious easing of monetary policy without incurring highly adverse exchange rate consequences and, beginning October 1981, lowered
the Lombard rate three times from 12 percent to
10 percent by late January. Looking ahead, many

Foreign Exchange Operations

exchange market participants expected the authorities would gain more room for maneuver,
particularly once U.S. interest rates dropped
from their high levels and large interest differentials adverse to the mark began to narrow.
Despite these achievements, however, major
economic problems persisted and were reflected
to a large extent in the weak performance of the
capital account. Domestically, nonwage labor
costs remained high and the role of the government in the economy expanded despite efforts to
consolidate the fiscal deficit. These trends were
thought to imply a loss of private initiative and
decisionmaking. They also generated worries in
the private sector about Germany's mediumterm growth prospects in view of the potential
need for future increases in taxes and the growing burden of social benefit programs. Internationally, there were heightened tensions in Poland, especially after the imposition of martial
law, a general deterioration in East-West relations, and renewed hostilities in the Middle East
as well as in some of the world's other trouble
spots. Many of these developments generated
important disagreements at the policy level and
drew attention to divisions within the ruling
coalition government.
In an environment of political and economic
uncertainty, large net flows of private direct
investment and long-term portfolio capital
moved from Germany to other countries, particularly the United States. The pressure of longterm capital outflows intensified when, contrary
to expectations, U.S. money growth accelerated
early in the year even as the U.S. domestic
economy was contracting. As short-term U.S.
interest rates moved higher, opening up interest
differentials adverse to the mark to about 6V2
percentage points by mid-February, capital flowed
out of Germany more heavily than before.
Meanwhile, Germany's current account performance in January and February suffered a
serious setback. The services balance reverted to
sizable deficit, partly as the result of growing
outflows of investment income and mounting
interest payments on public-sector borrowings.
Also, the trade surplus narrowed substantially,
underscoring the many risks to sustained, rapid
export growth that had begun to develop. There
were constraints presented by the financing
problems of Eastern European countries, the



583

decline of the OPEC surplus and oil revenues
placed limits on previously expanding markets,
and many large industrial economies were becoming locked into a pattern of domestic stagnation. By comparison, in the United States, recession-induced declines in import demand kept the
current account in surplus when a deficit was
expected, and forecasters began to assess the
outlook for U.S. balance of payments performance more favorably. In view of the unexpected
deterioration relative to the United States in both
current and long-term private capital accounts of
Germany's, the mark declined against the dollar,
moving lower almost without interruption
through mid-April.
Within the EMS, however, the mark remained
firm. In fact, after the realignment of the joint
float on February 21, in which the central rates of
the Belgian franc and the Danish krone were
adjusted downward
and 3 percent respectively, the mark was quick to move to the top of the
newly aligned band. Germany's superior inflation performance in relation to other EMS member states and the authorities' established policy
record of combating inflationary pressures
brought the mark into renewed demand, as traders and investors accelerated the shift of shortterm funds into the mark at the expense of other
EMS currencies whose prospects were less
promising.
The renewed strength of the mark within the
EMS served to mitigate conflicting pressures on
domestic monetary and exchange rate policies.
To be sure, outflows of long-term capital from
Germany to the United States showed no signs of
abating and the mark continued to weaken
against the dollar. But, with the German currency firm within the EMS, the effective exchange
rate held steady, thereby tempering the rise in
Germany's import prices. In addition, oil and
other dollar-denominated commodities that
loomed large in Germany's import bill and that
had contributed previously to the phenomenon
of imported inflation were declining in price.
Furthermore, the outlook for domestically generated price rises improved when, early in the wage
round, the pace-setting metals industry agreed on
annual wage increases of only 4.2 percent, compared with about 5 percent a year earlier.
Altogether, these considerations provided
greater insulation than before between develop-

584

Federal Reserve Bulletin • October 1982

ments in U.S. and German markets. The authorities were concerned, however, about the magnitude of the long-term outflows of funds. While
resisting calls for the imposition of capital controls, the German Federal Bank reached a new
gentleman's agreement late in February, with
large commercial banks limiting the size of individual foreign mark-denominated bond and note
issues. On March 19 the central bank lowered the
special Lombard rate Vz percentage point to 9V2
percent. The German Federal Bank also provided additional liquidity to the domestic markets,
but proceeded with considerable caution. The
authorities feared that too abrupt or rapid an
easing of monetary restrictiveness would undermine the progress achieved in reducing inflation
and inflationary expectations. They also wished
to avoid pushing the growth of central bank
money beyond the top of the annual growth
target of 4 to 7 percent.
The reduction of German interest rates was
followed immediately by interest rate cuts in
several other European centers, so that interest
rate relationships within Europe were largely
unchanged. By this time, interest differentials
among EMS states were widely seen as inadequate compensation for divergent inflation prospects and performance, so that the pressure of
large money flows into Germany persisted and
kept the mark pinned to the top of a fully
stretched EMS band. The German Federal Bank
and other EMS central banks absorbed part of
the pressure through purchases of EMS currencies against the sale of marks. Meanwhile, unlike
interest rates in Europe, those in the United
States had begun to rise again, ahead of the
anticipated bulge in money growth in April and
against the background of large U.S. budget
deficits overhanging the credit markets. In these
circumstances, the mark continued to decline
against the dollar, falling to DM 2.4225 by April
15, a drop of 3Vz percent from late-January
levels.
The German Federal Bank provided little intervention resistance to the mark's descent, partly not to aggravate strains within the EMS and
partly because the authorities felt unable to provide through the mechanism of intervention a
lasting and effective counterweight to the pressure of long-term capital outflows. Between the
end of January and the end of March, Germany's



foreign currency reserves declined only moderately from $37.5 billion to $37.1 billion.
After mid-April, market sentiment shifted for a
time in favor of the mark, as traders reacted to
Germany's record monthly trade surplus announced for March and to evidence of continued
moderate pay settlements in the 1982 wage
round. Moreover, U.S. interest rates turned suddenly downward as prolonged weakness of the
U.S. economy encouraged expectations of a
rapid unwinding of the April money bulge. Thus,
the mark rose against the dollar in the exchanges.
The German Federal Bank, while welcoming the
advance of the mark particularly for its favorable
implications for inflation, remained concerned
about the weakness of the domestic economy.
Hopes for an improvement in domestic demand were disappointed by the continued slump
in capital investment, the lack of consumer confidence, and the persistent rise in unemployment.
In these circumstances, the authorities acted
further to lower domestic interest rates. The
German Federal Bank on May 6 closed the
special Lombard facility and reintroduced regular Lombard credit at 9 percent, V2 percentage
point lower than the special lending rate. German
Federal Bank President Poehl stated that the
abolition of the special Lombard had symbolic
meaning: it signified success in decoupling monetary policy in Germany from that of other countries and signaled generally easier credit conditions that would foster economic recovery.
Following the reduction of the Lombard rate,
German money market rates moved lower, but
comparable U.S. rates declined even more, so
that the adverse interest differential against the
mark narrowed to 5V2 percentage points. The
mark thus continued to rise against the dollar and
reached DM 2.2770 by mid-May, up 6 percent
from the lows touched a month before.
However, the mark was unable to consolidate
these gains, because again U.S. interest rates
rebounded and market participants found reason
to question the strength of the underlying fundamentals of the German economy. For example,
Germany's trade surplus declined in April while
the U.S. trade account registered impressive
gains, raising new questions about the extent to
which current account trends would benefit the
mark. In addition, Germany's governing coalition was seen increasingly as threatened by pro-

Foreign Exchange Operations

tracted difficulties in reaching agreement on proposed spending cuts to reduce the 1983 federal
budget deficit and financing requirement. Unsettling geopolitical developments, such as the Israeli invasion of Lebanon and the conflict between Iran and Iraq, were also thought to have
more serious adverse consequences for Germany
than for the United States and to a lesser extent
the United Kingdom, considered less vulnerable
to a disruption of internationally traded oil.
The mark's weakening tendency against the
dollar contrasted with continued strength within
the EMS, where speculation of another realignment kept the German currency in heavy demand throughout the spring against weaker currencies, particularly the French and the Belgian
francs. In the event, shortly after the Versailles
economic summit the EMS was again realigned.
Over the June 12-13 weekend the mark and the
Dutch guilder parities were adjusted upward by
about 7 percent and 10 percent against the Italian
lira and French franc respectively, and 4lA percent against other participating currencies. That
same weekend, international concerns, which for
some time had supported the dollar in the exchanges, intensified with the death of King
Khaled of Saudi Arabia and the extension of
fighting in Lebanon among Israel, Syria, and the
Palestine Liberation Organization.
When trading resumed after the realignment
on Monday, June 14, the mark emerged at the
bottom of the newly aligned band and funds
flowed as anticipated from the revalued EMS
currencies into the currencies of the joint float
that had been devalued. But a portion of the
unwinding of long EMS currency positions was
reflected in heavy bidding for dollars in unsettled
trading conditions. The mark declined sharply
and unexpectedly against the dollar first in Europe and then in New York. At this time the U.S.
authorities intervened to purchase modest
amounts of German marks, as well as Japanese
yen. Operating on behalf of the Federal Reserve
and the U.S. Treasury, the Desk acquired $21
million equivalent of marks. It was publicly
announced that the U.S. authorities had conducted some intervention, the first since March
1981, in accordance with stated U.S. policy of
intervening to counter disorderly conditions. In
subsequent days and weeks, talk spread in the
market that concerted action was likely by the



585

U.S., European, and Japanese authorities to halt
the continuing run-up in dollar rates. While the
European authorities did on occasion operate in
a concerted fashion to restrain the decline of
their currencies against the dollar, the intervention operations were relatively modest in
amount. For their part the U.S. authorities did
not again intervene during the period under review.
Between mid-June and mid-July the mark was
pushed downward against the dollar, as exchange market participants grappled with several
sources of concern that worked in the direction
of further undermining confidence in the German
currency. One such concern centered on the
budget. Within the governing coalition, public
disagreement over the persistence of large budgetary deficits was often intense and each party
suffered heavy losses in local elections early in
the summer. A compromise on the 1983 budget
was finally reached in July, reducing the federal
government's projected net borrowing DM 6
billion to DM 28.5 billion. But, partly because
the budget rested on economic growth assumptions, which private analysts generally regarded
as highly optimistic, many questioned whether
the actual budget outcome would conform to the
compromise.
Financial concerns, too, worked against the
German currency. West German banks, of all
Western banks, were the most heavily committed in Eastern Europe and therefore had the most
to lose if Polish debt-rescheduling negotiations,
which had already dragged on for months, failed
to reach a successful conclusion. Unease about
the risks to the German economy of its deep
international involvement was also underscored
by the U.S. decision to ban the sale of U.S.
goods and technology, even if produced abroad
under license, to the Soviet Union's gas pipeline
project. Furthermore, the combination of restrictive monetary policy and slack demand generated liquidity strains in the private sector in Germany, as in several other countries.
These various problems dragged the mark
sharply lower, particularly as demands for dollar
liquidity accelerated in late June and early July.
At that time, banks bid aggressively in the money
markets to lock in their funding to finance the
heavy rollover of six-month credit coming due in
the Euromarkets and to meet precautionary de-

586

Federal Reserve Bulletin • October 1982

mands on the part of financial market participants laboring under the awareness of increased
risk in international lending. On July 7 the mark
dropped to as low as DM 2.52 in European
trading, a decline of about W/i percent from the
high reached in May.
Subsequently, U.S. interest rates began to
decline rapidly, narrowing the dollar's interest
rate advantage over the mark. The growth of the
U.S. monetary aggregates had slowed sufficiently to bring Ml back into target range (for the first
time in 1982), and with short-term interest rates
softening, the Federal Reserve twice announced
cuts in its discount rate of Vz percentage point,
thereby reducing the rate from 12 to 11 percent
by the end of July. But, even as interest differentials adverse to the mark narrowed to 4 percentage points, demand for the mark in the exchanges was muted. This lack of enthusiasm in
part reflected uncertainty in the exchange markets that the downtrend in U.S. interest rates
would be sustained. Participants were mindful of
frequent reversals in the past and focused on the
threat of significantly higher interest rates posed
by uncommonly large U.S. government deficits
projected for fiscal year 1983 and beyond. In
addition, sentiment toward the mark remained
adversely affected by the numerous challenges to
German policy and leaders presented by financial, trade, and political problems and by worries
that policies might not be adopted to deal with
these problems effectively.
By midsummer the weakness of the mark
against the dollar had become more of a constraint on the German authorities' policy options, even though on a trade-weighted effective
basis the German currency remained steady.
German policymakers hoped to lower domestic
interest rates further to support the economy,
which was stagnating far longer than expected.
With foreign orders trending sharply downward
and compounding persistently slack domestic
demand, industrial production dropped sharply
and unemployment climbed over 7 percent. But
the authorities were reluctant to take action that
would risk further undermining the mark in the
exchanges. The nation's inflation rate, after decelerating to 5 percent year on year in March,
was headed higher, in part owing to the continuing weakness of the mark against the dollar and
to administrative price increases. Moreover, the



outflows of capital in the long-term sector—
which reached nearly DM 13 billion in the first
five months of the year—were being augmented
by short-term outflows, as previous speculative
inflows were for the most part unwound following the EMS realignment. There was concern lest
these outflows gain momentum, particularly
since the mark was trading at or near the bottom
of the joint float, and following up on the February agreement with the commercial banks to
limit the volume of individual mark Eurobond
issues, the German Federal Bank asked to be
notified of any direct foreign credits of DM 50
million or more. At the same time, the authorities
pointed to an erosion of confidence in the domestic bond markets in which large financial requirements of the public sector appeared to hamper
further reductions of long-term rates. For these
reasons the German Federal Bank did not further
relax domestic monetary conditions as U.S. interest rates declined, but left its credit policies
unchanged at its council meeting late in July.
At the end of July the mark was trading at DM
2.4430, up about 3 percent from its lows, but
down about 4lA percent from levels at the end of
January. Between April and July, Germany's
foreign currency reserves were subject to diverse
tendencies. At times, particularly in June, the
German Federal Bank was active in the market
as a seller of dollars in support of the mark. The
German authorities, along with others in the
EMS, acted as sellers of marks to alleviate
strains within the joint float. After the June
realignment of the EMS, some of these mark
sales were reversed. On balance, therefore, Germany's reserves showed little further change to
stand at $36.5 billion at the end of July, down
about $1 billion over the six months under review. During the period, the U.S. Treasury paid
off $1,011.6 million equivalent of its German
mark-denominated securities. These redemptions, which occurred on May 12 and July 26, left
the Treasury with $2,610.6 million equivalent of
mark-denominated notes (public series) outstanding.
Swiss

FRANC

Early in 1982 the Swiss economy, while lagging
behind the downturn in demand and output in
most industrialized countries, was showing clear

Foreign Exchange Operations

signs of weakness. Domestic consumption was
declining, while previously buoyant investment
in plant and equipment leveled off and construction activity slackened in response to the higher
cost of credit. The stagnation in the economy
was cushioned to some extent by resiliency in
the export sector despite the strong appreciation
of the franc, as export contracts received last
year when foreign demand was stronger were
filled. But the sluggishness of demand on the part
of Switzerland's major customers, Germany in
particular, coupled with the lagged effect of the
rise in the franc, was expected to cause export
volumes to stagnate in the months ahead. At the
same time, inflation decelerated to about 6 percent at an annual rate from peaks of some 11
percent in the autumn. The improved price performance stemmed from the slowdown in domestic economic activity, a substantially tighter
stance of monetary policy in 1981, and lower
import costs—reflecting both the weakness of
international commodities prices and the sharp
rise of the franc in the exchanges.
Switzerland's encouraging progress on the inflation front, combined with its climate of political and social stability, made the franc an attractive asset, especially at a time when serious
economic problems and political uncertainties
undermined investor confidence in several other
European currencies. Indeed, short-term funds
flowed into the Swiss franc, keeping it relatively
firm against other European currencies even as it
weakened against the dollar. By the end of
January the franc was trading at SF 0.80 against
the German mark, not far below its historical
peaks, even as it had fallen back to SF 1.8680
against the dollar. In the weeks surrounding the
late-February realignment of the EMS joint float,
these inflows intensified. The inflows, together
with the demand for the franc arising from Switzerland's current account surplus, more than
offset the impact of longer term, interest-sensitive capital outflows, as international borrowers
took advantage of relatively lower interest rates
in Switzerland than in most other industrial
countries. As a result, the franc declined less
rapidly than other currencies against the dollar in
late February and early March to trade around
SF 1.88 against the U.S. currency and as high as
SF 0.7855 against the German mark.
With inflation moderating,



the

authorities

587

hoped to maintain a relatively neutral monetary
policy, pursuing the anti-inflation fight while at
the same time providing sufficient liquidity to
avoid exacerbating the developing weakness of
the economy. Accordingly, the Swiss National
Bank aimed to keep central bank money on its
targeted average growth of 3 percent for 1982.
The authorities made use of foreign currency
swaps to provide the domestic market with temporary liquidity, while also working in various
ways to add liquidity on a permanent basis.
Foreign currency swaps would necessarily remain the principal means of regulating liquidity
in the short run. But, over the longer run, the
authorities planned to expand open market operations in domestic assets. As the markets in
Switzerland responded to the increase in liquidity, domestic interest rates in both the money
and the capital markets moved progressively
lower, falling more rapidly than interest rates in
other European centers. The Swiss National
Bank confirmed this trend on March 19 by reducing the discount rate Vi percentage point to 5Vi
percent. Almost immediately thereafter, four
major Swiss banks cut their interest rates further
on large time deposits.
The drop in Swiss interest rates was considerable, shifting out three-month interest differentials adverse to franc-denominated assets to V/i
percentage points against the German mark and
9Vi percentage points against the dollar. Consequently, foreign official and corporate borrowers
placed heavier demands on Switzerland's capital
market and converted the proceeds of their
Swiss franc-denominated borrowings in the exchanges. At the same time, market participants
reportedly unwound speculative positions assumed earlier against weaker currencies within
the EMS. The buildup of capital outflows was
such that new foreign Swiss-franc bond issues in
the first quarter of 1982 increased 50 percent
over the corresponding months of 1981. The
pressure of these and other capital outflows
offset demand for the franc arising from the
current account surplus, which itself was proving
unexpectedly large. Tourism receipts and investment income remained strong. Moreover, the
traditional deficit on trade actually narrowed,
principally reflecting the impact on imports of
declining world oil prices and weakening domestic demand. But, in addition, exports slackened

588

Federal Reserve Bulletin • October 1982

only moderately because exporters accepted declining profit margins to maintain market shares
and because less price-sensitive, high-technology goods, which figure large in Switzerland's
export basket, continued to find outlets in major
foreign markets. Even so, exporters were
thought to be facing the limits of their ability to
compensate through decreasing profitability for
the recent strong appreciation of the franc, and
there were concerns that any further erosion in
competitiveness would begin to cause problems.
In the event, however, declining Swiss interest
rates induced large and rising net capital outflows, which brought the franc under selling
pressure in the exchange markets during the
spring. Market participants sensed that the Swiss
authorities were not intervening or otherwise
taking measures to support the exchange rate
and were not uncomfortable with a gradual decline of the currency. When the Swiss central
bank continued, as planned, supplying generous
amounts of liquidity to the domestic markets,
Swiss interest rates and the exchange rate fell
rapidly lower.
On May 6, however, the Swiss authorities did
not join other European authorities in reducing
official interest rates. At that time, the German
Federal Bank suspended its special Lombard
loan facility while the Netherlands Bank lowered
its rate on discount borrowings and the rate on
special advances. The Swiss authorities stated
that, in leaving the discount and Lombard rates
unchanged, they wished to discourage the view
from developing in the domestic markets that
monetary policy was directed toward interest
rates rather than toward the monetary aggregates. The authorities also found it desirable to
keep official lending rates at relatively high levels, compared with market interest rates, to
discourage excessive commercial bank borrowing from the central bank, particularly at the
month-end. But, even as official rates held
steady, market rates continued to ease so by late
May three-month interest differentials adverse to
assets denominated in Swiss francs widened to
about IOV2 and nearly 5 percentage points vis-avis the dollar and the mark respectively. In the
exchange markets, the franc declined to around
SF 1.9960 against the dollar and SF 0.8501
against the German mark at the end of May.
By June, market participants sensed that the



Swiss authorities might have less leeway than
before to continue as forcefully with the comparatively easier monetary policy approach adopted
early in the year. The rate of inflation had begun
to move back up, largely owing to the rapid
depreciation of the franc in the spring. There was
concern also that if the increase in prices went
too far, it might reignite inflationary expectations, while also becoming embedded in domestic costs through the process of wage indexation.
Moreover, the growth of central bank money,
which in May grew at 2.4 percent year over year,
began to approach the authorities' target. Thus,
when the liquidity provided through foreign exchange swaps was not fully replaced, expectations developed that conditions in the domestic
money market would be less liquid than before.
At the same time, broader concerns weighed
on many other European currencies and worked
to the advantage of the Swiss franc. The Swiss
government continued to exercise tight control
over federal finances, particularly on the expenditure side, and the budget deficit was expected
to remain under 1 percent of GNP in 1982 even as
economic activity stalled. Equilibrium in Swiss
public finances stood in contrast to developments in other countries, most of which were
experiencing serious difficulties in trying to hold
their deficits to levels that, relative to GNP,
already far exceeded that in Switzerland. Growing worries internationally about the risks of
sovereign lending and concerns over developing
liquidity strains posed less of a threat to the
financial health of major institutions in Switzerland than to institutions elsewhere. In addition,
political tensions, particularly the dangers of
expanding warfare in the Middle East, underscored the role of the Swiss franc as a safe haven
for international investors attracted by Switzerland's political stability.
For all these reasons, the franc became increasingly attractive to traders and investors
during June and July. The spot rate steadied
against the German mark, rather than weakening
as before, and the franc moved in line with
stronger EMS currencies against the dollar. At
the end of July the franc was trading at SF 2.08
against the dollar for a decline of about 11
percent since the end of January and at SF 0.85
against the German mark, for a decline of about
6V2 percent over the six months under review.

Foreign Exchange Operations

Between the end of January and the end of July,
Switzerland's foreign exchange reserves rose
from $10.5 billion to $11.8 billion, principally in
response to foreign currency swap operations
and interest earnings on outstanding reserves.
Intervention operations in the exchanges were
both infrequent and limited in scale.

JAPANESE

YEN

By early 1982, Japan had succeeded in reducing
its inflation rate to the lowest among the major
industrial countries and had recorded a huge
swing in its current account back into solid
surplus. Economic growth, however, was falling
short of the targeted rate of 4 percent for the year
ended March 1982, and there were but limited
choices available to the authorities to generate
economic recovery. Though stimulative measures had been taken in 1981, domestic demand
remained stagnant and gains in output were
almost entirely concentrated in the foreign sector. Looking ahead, the contribution of exports
to further growth appeared problematic. Further
increases in Japan's penetration of foreign markets in a recessionary environment threatened to
exacerbate tensions between Japan and its trading partners. Also, with slackening demand
abroad, it began to appear that export growth
might well be much weaker than expected in
1982 even if heightened trade tensions were
avoided. On the domestic front, a relatively
restrictive government budget had been announced in December for the fiscal year to start
in April 1982, in pursuit not of short-run expansion but of the medium-term goal of further
reducing the government's deficit as a proportion
of GNP. As a result, monetary policy was left
with the burden of providing stimulus to the
economy—a decision that had taken account of
Japan's success in curbing inflation and of its
strong current account position. The Bank of
Japan had reduced its discount rate and relaxed
its "window guidance" for commercial bank
lending in order to spur demand and announced
that first-quarter growth of its main monetary
aggregate (M2 plus certificates of deposit) was
expected to continue at the relatively expansive
rate of about 11 percent.
Following this shift in Japan's economic poli


589

cy, interest rates in Japan eased when yields on
dollar investments were rising once more. The
further widening of rate differentials already unfavorable to the yen prompted Japanese investors to step up the flow of long-term capital
abroad and encouraged foreigners to float Samurai bonds. The yen was thus under downward
pressure in the exchange markets in December,
and even more so after the new year. Despite the
authorities' expressed determination to limit the
easing of Japanese interest rates to protect the
yen, market participants saw little scope for
action to counter a sharp upward trend in foreign
interest rates given the weakness of the Japanese
economy and the policies then in force. Although
the Bank of Japan sold dollars in the exchange
markets to moderate the yen's decline, the exchange rate by the end of January 1982 had fallen
to ¥ 230.00, 8 percent below the high reached at
the end of November. In relation to the German
mark the yen's decline was smaller, at about IV2
percent, bringing the cross rate on January 29 to
¥ 98.21. At that point, Japanese foreign exchange reserves stood at $24.6 billion, down
about $400 million from levels at the the end of
November.
The yen declined further during the first half of
February, as interest rate differentials favoring
dollar over yen investments widened more than 2
percentage points to more than 10 percentage
points. Long-term investment overseas by Japanese residents continued large while short-term
capital inflows tapered off. Japanese individuals
purchased nearly $1 billion of the innovative
"zero-coupon" bonds being offered in the Euromarkets during January and February, reflecting
the attraction of these issues partly due to a
proposed tightening in Japan of tax reporting of
interest income on domestic bank deposits. Under these conditions the yen fell below ¥ 242 per
dollar by February 15. Then, from mid-February
to early March the yen gyrated widely with some
net upward trend largely in response to reports
that the Japanese authorities had intervened aggressively in the Tokyo market and were considering actions to limit the export of capital overseas. By early March the Bank of Japan
permitted a slight rise in interest rates for call
money to defend the exchange rate. The authorities asked Japanese securities companies to refrain temporarily from selling zero-coupon bonds

590 Federal Reserve Bulletin • October 1982

from March 4, while the Ministry of Finance
made public its intention to establish reporting
requirements for holders of these securities to
limit Japanese income tax avoidance. These developments lent support to the yen in the exchanges and by March 8 the yen had recovered
to ¥ 232.25 in the Far East, almost 4 percent
above the level of three weeks earlier.
From that time through the middle of April the
yen drifted lower in the exchanges. Foreign
interest rates, especially those in the United
States, failed to decline as expected and at home
new indications of weakness appeared in the
domestic economy. Publication of Japan's
fourth-quarter GNP figures made a particularly
strong impression because they showed a sharp
decline in net exports and resulted in the first
quarterly decline in Japanese real GNP in nearly
seven years. Prices began to drop sharply on the
Tokyo stock exchange, partly in response to
foreign sales of Japanese securities, reportedly
including sales by important OPEC investors.
These events in combination served to focus
market attention once again on the difficult
choices facing the Japanese authorities. In this
climate, debate intensified over ways through
which the government might help the domestic
economy. With inflation running about 3 percent
and the annual spring wage settlements promising to come out at a relatively moderate 7 percent
average increase, it seemed that domestic considerations argued in favor of reductions of Japanese interest rates. Also depressing sentiment
toward the yen were trade disputes with both the
United States and the European Community
countries, as the latter announced their intention
to file a formal General Agreement on Tariffs and
Trade complaint against Japan's export practices. Trade figures for February showed that
exports had declined by enough to turn that
month's current account back into deficit.
In early April, some fiscal measures were
taken to boost the domestic economy, but they
were milder than had been anticipated. While not
increasing the government's overall net expenditures planned for the fiscal year just beginning,
the government announced that it would accelerate the schedule of public works expenditures
and housing loan approvals as it had done in the
previous fiscal year. A shortfall of about 10
percent in the previous year's government tax



revenues was also announced, adding to the
government's borrowing requirement for the
1982-83 fiscal year. At the same time, the monetary authorities announced that yields on the
government's current issue of long-term bonds
would be lowered about lA percentage point—
less than had been anticipated. They also acted
to keep money market rates firm and to dispel
expectations of a seasonal easing of rates, in part
through a program of large-scale sales of Treasury bills, with a view toward preventing any
further widening of the adverse interest rate
differentials and containing the effects on domestic prices of the recent decline of the yen. Furthermore, the Bank of Japan approved a scaling
back of second-quarter lending plans of commercial banks to an overall increase of 17.6 percent,
and later announced its expectation that this
would support a somewhat slower monetary
growth rate of 10 percent. These announcements
alleviated concern in the exchange markets that
Japanese interest rates might ease, and trading in
the yen came into better balance in the exchanges.
In the two weeks after these measures, the yen
declined only slightly, reaching a low on April 15
of ¥ 248.15 against the dollar and ¥ 102.44 in
terms of the German mark. The Bank of Japan,
as in earlier months, sold substantial amounts of
dollars at times when the yen was dropping most
rapidly in the exchange markets. These sales
were reflected in a decline of $900 million in
foreign exchange reserves during March. When,
in addition, U.S. and Eurodollar interest rates
eased in mid-April, the yen briefly recovered.
Also at this time, actions were taken to postpone
foreigners' access to the Japanese capital market
and to tighten approval procedures for yensyndicated loans to foreign borrowers. The authorities regarded these actions as temporary
departures from their longer-term policy of liberalizing capital flows.
By mid-May the yen had moved back up to
about midwinter levels. Several times thereafter,
Bank of Japan Governor Mayekawa reaffirmed
the authorities' determination to keep interest
rates high in order to support the yen, and the
central bank backed that announcement with
large-scale Treasury bill sales. Yet market participants still worried that long-term interest rates
would have to be held down to assist the govern-

Foreign Exchange Operations

merit's coming bond flotation. Speculation also
arose that the Japanese authorities might be
moving to facilitate, rather than contain, capital
outflows following the announcement in May of
long-term liberalization measures affecting the
purposes for which Japanese banks could grant
syndicated loans in yen to foreigners. In addition, U.S. interest rates were firming once more
and interest differentials favoring dollar investments widened.
In this atmosphere, the yen declined steadily
after mid-May. Expectations of an agreement at
the Versailles summit to lower dollar interest
rates were widespread in the Tokyo market, and
the yen came under renewed selling pressure
after that meeting ended in early June without
any such announcement. The outbreak of fighting in Lebanon also made the dollar seem more
attractive as an investment medium, compared
with the yen and other currencies. Then, when
the U.S. dollar rose strongly against all currencies following the EMS realignment during the
June 12-13 weekend, the yen once again came on
offer. The rate dropped rapidly during the New
York trading session on Monday, June 14, falling
below ¥ 250 before the New York Desk entered
the market to buy $9 million equivalent of Japanese yen to restore more orderly conditions.
Nevertheless, the currency resumed its fall, despite support from the Bank of Japan. By June
28, the rate had reached a 27-month low of more
than ¥ 259 per dollar and ¥ 104 in terms of the
German mark, and Japanese reserves had declined more than $1 billion since the end of May
to stand at $21.7 billion.
In early July, the yen began to rise in response
to declining U.S. interest rates. The yen climbed
above ¥ 250 on July 23, just before the Federal
Reserve cut its official discount rate Vi percentage point, but its tenuous recovery soon faded.
Abroad, the better-than-expected current account performance of the United States and the
deceleration of inflation globally tended to erode
some of the benefits of Japan's earlier and superior economic performance. Within Japan, public
criticism of the government's economic policies
focused on the failure to reduce the government
deficit as quickly as planned, and interest rates
rose on the government's long-term bonds trading in the secondary market. In these circumstances, difficulties in setting an attractive



591

enough yield for the government's own flotation
of long-term bonds resulted in cancellation of the
issue scheduled for July. The yen's decline, once
started, received an additional push when participants on the International Monetary Market
(IMM) rushed to liquidate large long yen positions, producing some of the busiest trading ever
of yen futures contracts and bringing large offers
of yen into the forward interbank market. The
yen thus fell back nearly to the ¥ 259 level before
recovering some of its lost ground after the
announcement on July 30 of a second Federal
Reserve discount rate reduction.
The yen closed on July 30 at ¥ 255.60, down 10
percent from six months earlier and 3/4 percent
below the low point reached nearly a year earlier. The yen also declined against the German
mark, to close at ¥ 104.63, nearly equal to the
lowest level reached in the previous year although still far above the cross rates prevailing
before 1981. The Bank of Japan's periodic sales
of dollars while the currency was declining reduced foreign exchange reserves a total of $2.8
billion for the six-month period so that reserves
stood at $21.8 billion at the end of July.

STERLING

Early in 1982 sterling held steady in the exchange
markets, trading on January 29 at $1.8670 and
91.8 on the trade-weighted, effective index. The
authorities in the United Kingdom were generally seen as adhering to policies of monetary and
fiscal restraint, despite the pressures of largescale unemployment. Public-sector borrowing
had gone down as a percentage of GNP through
both increased taxes and the containment of
expenditures, as the public-sector wage bill was
brought under control. While the actual growth
of sterling M3 exceeded the annual growth range
of 7 to 11 percent, innovations in financial institutions and behavior appeared to have diminished the usefulness of the targeted aggregate as
a guide to monetary conditions. Other indicators
such as short-term interest rates, as well as the
substantial decline in inflation itself, suggested
continued monetary stringency.
Meanwhile, however, developments in the
U.K. economy generated discussion about the
desirability of some easing in the restrictiveness

592

Federal Reserve Bulletin • October 1982

of policy. To be sure, the economy showed signs
of recovery from the prolonged recession, as the
previously rapid reduction of inventories slowed
and as some types of investment began to revive.
But unemployment continued rising, and there
was reason to question whether the upturn in
investment was sustainable without some policy
stimulus to demand, a reduction of taxes, or
other action to improve company profitability.
At the same time, rapid gains in productivity,
moderate wage settlements, and the earlier depreciation of sterling in 1981 improved the ability
of British industry to compete internationally.
The gains in competitiveness, however, only
partially reversed the severe losses of the previous two years, so that the level of costs remained
high in relation to Britain's major trading partners. Consequently, the surpluses on the trade
and current accounts were expected to be eroded, even without a pickup in the economy.
Within the United Kingdom, several types of
stimuli came under scrutiny. Lower interest
rates, for example, would be expected to boost
investment, particularly stock building and construction. A depreciation of the exchange rate
would improve competitiveness and enhance exporters' profit margins. Public works measures
would provide the greatest number of jobs. A cut
in indirect taxes would reduce costs. Among
exchange market participants it was feared that,
whatever the specific measures, any significant
policy change aimed at restoring economic
growth would jeopardize the hard-won progress
already made in controlling inflation and inflationary expectations. As a result, sterling came
under downward pressure during February amid
market nervousness ahead of the government's
statement of policy in the forthcoming 1982-83
budget.
At this time, also, U.K. short-term interest
rates eased lower, extending the softening trend
established in autumn 1981, and major clearing
banks lowered their base lending rates xh percentage point to W h percent. These cuts coincided with a softening of interest rates in the
United States, but were not matched, as in
previous months, by lower interest rates elsewhere in Europe, so that selected interest differentials moved against sterling-denominated assets. Moreover, against the background of
weakening world oil prices the British National



Oil Corporation cut its price for North Sea oil,
thereby reducing projected domestic government
revenues as well as the contribution of oil earnings to the balance of payments. Sterling therefore eased back to $1.83 and 90.4 in effective
terms in early March.
On March 9 the government presented its
1982-83 budget, addressing the two principal
elements of its medium-term financial strategy:
the public-sector borrowing requirement and the
growth of money. Personal tax allowances and
excise taxes were increased about in line with
inflation, while the national insurance surcharge
paid by employers was reduced 1 percentage
point to 2Vi percent. On the expenditure side the
share of resources claimed by the public sector
was cut back. Altogether, the public-sector borrowing requirement was projected to decline
from £ IOV2 billion to £ 9V2 billion, or from about
4V2 percent to 3Vi percent of GNP. With respect
to the broad monetary aggregates, the government noted several factors boosting the growth
of sterling M3 above target. The civil service
dispute had postponed tax payments; the public
had increased its demand for liquid assets as a
medium for saving; other structural changes,
such as a shift in housing finance away from the
building societies, had enhanced the role of the
banks in financial transactions. Taking account
of these developments in the budget, the authorities raised the target range for sterling M3 growth
to 8 to 12 percent and also applied this growth
range both to the narrow money supply (Ml) and
to broad private-sector liquidity. In restating its
financial strategy, the government recognized
explicitly the usefulness of the exchange rate as
an indicator of financial ease or stringency.
The budget was well received and was seen by
the markets as compatible with a slowing of
inflation to below 10 percent per year and with a
continued easing in short-term interest rates. On
March 11, in fact, the clearing banks announced
another reduction of V2 percentage point in their
base lending rates to 13 percent. Meanwhile,
heavy official sales of public-sector debt to the
nonbank public continued to be larger than needed to fund the public-sector borrowing requirement. The program of debt sales, begun in the
winter, aimed at reducing the banks' cash holdings and thereby restraining the growth of broadly defined money. In effect, the authorities

Foreign Exchange Operations

sought to reverse a part of the increased intermediation through the banking system that had
swollen the growth of sterling M3. The combination of heavy sales of debt and massive tax
payments—reflecting the normal tax-gathering
season as well as the ongoing reflux of revenue
delayed earlier by the civil service dispute—put
pressure on the domestic market's cash position.
To relieve the shortages, the authorities acquired
sizable amounts of commercial bills, mainly
through outright purchases. Even so, Britain's
money markets remained comparatively tight at
a time when many interest rates on the Continent
were falling. With market sentiment also encouraged by the government's steadfast policy
stance, sterling traded firmly in the exchange
markets. Thus, the strong rise in the dollar at this
time was reflected less in movements of sterling
than in other currencies so that, even as the
pound fell to as low as $1.7780 in late March, it
remained quite stable around 91.0 to 91.4 in
effective terms.
On April 2, Argentina invaded the Falkland
Islands, initiating a crisis that in varying degrees
kept the sterling money and exchange markets
off balance through mid-June. At first, the pound
came under severe selling pressure, dropping to
as low as $1.7465 and in effective terms to 89.5
amid fears that the crisis could force the resignation of the Thatcher government and end its
conservative economic policies. But the Bank of
England reacted quickly, supporting sterling in
the exchanges to prevent sharp, disorderly
movements from cumulating and acting to stabilize the gilt-edge market as well. Thereafter, the
authorities continued to stabilize the markets,
which alternated between fears of prolonged
fighting and hopes of an early peaceful settlement. Sterling traded mostly within an effective
range between 89 and 91, and for the most part
between 90 and 91, despite the markets' vulnerability to news and rumors concerning the Falklands. Against the dollar, the pound fluctuated
more widely, rising to as high as $1.8360 in early
May when U.S. interest rates dropped back
sharply, but falling again to around $1.77 by midJune.
Meanwhile, during the Falklands crisis, underlying sentiment toward the pound improved.
There was evidence of subdued monetary
growth, with recent statistics showing that the



593

monetary aggregates, including sterling M3,
were growing within the government's target
range of 8 to 12 percent. Inflation decelerated
both on the wholesale and on the retail levels.
Manufacturing pay settlements averaged about 7
percent in the current wage round, compared
with more than 20 percent only two years previously, improving prospects for inflation to remain below double-digit rates. Moreover, publicsector borrowing in 1981-82 unexpectedly turned
out to be nearly £ 2 billion less than the official
target, and preliminary indications suggested
that the public-sector borrowing requirement
would fall short of the £ 9Vi billion projection for
fiscal 1982-83. In addition, data on the balance of
payments showed that, while the current account
surplus was shrinking, the deterioration was less
rapid than anticipated. To be sure, imports,
particularly of semimanufactured goods, posted
large increases, but the volume of U.K. non-oil
exports registered sizable growth as well.
After mid-June, when the United Kingdom
regained military control of the Falkland Islands
and the pressures of the crisis passed, favorable
developments within the U.K. economy showed
through decisively and benefited sterling in several respects. Domestically, optimism that progress on inflation would endure helped short-term
interest rates resume their decline and lent support to the rally that had earlier developed in
common stocks and gilt-edge instruments. In the
exchange markets, participants expressed confidence in the resolve of the authorities to maintain
steady and stringent financial policies over an
extended period. Moreover, the perceived ability
of British policy to meet stated goals stood in
contrast to market doubts about policy coherence and credibility in many other industrial
countries.
At the same time, other aspects of the international environment favored the pound. There
were growing worries over potential disruptions
to the flow of oil from the Middle East as the
result of fighting in Lebanon and between Iran
and Iraq. In an environment in which large banks
and nonfinancial institutions in other countries
were experiencing severe liquidity problems,
traders and investors became increasingly concerned about the creditworthiness of counterparts and the safety of their assets. In these
circumstances, both Britain's oil self-sufficiency

594

Federal Reserve Bulletin • October 1982

and the favorable reputation of London's financial system made sterling a relatively attractive
and secure asset. As funds flowed into the United Kingdom, sterling held up better than most
other major currencies against the surge of the
dollar in the exchanges. Although the pound
declined to as low as $1.7065 early in July, it
nonetheless remained steady on an effective basis, trading around 91.2.
During July, attention turned decisively to the
state of the economy. Growing evidence confirmed that after bottoming out in mid-1981 the
economy had shown little growth. In key areas of
British industry the outlook for a sustained recovery deteriorated badly. Private forecasters
and major international organizations, such as
the Organization for Economic Cooperation and
Development, revised downward their growth
forecasts for 1983. Deep disappointment about
the prospects for expansion in the economy and
the continued rise in unemployment prompted
renewed calls for some easing in government
policies.
By this time, however, the feeling had developed in the exchange markets that declines in
inflation, in the public-sector borrowing requirement, and in the growth of the monetary aggregates were all consistent with some easing in
interest rate policy and should not damage confidence in the pound. In the event, the Bank of
England steadily lowered its money market intervention rates, and U.K. interest rates fell more
rapidly than those in the United States. By the
end of July, U.K. bank rates reached the lowest
level since November 1978 and interest rate
differentials moved against sterling-denominated
assets. Even so, the pound gave up comparatively little ground in the exchange markets.
At the month-end the pound traded at $1.7475
against the dollar for a decline of 7 percent over
the six months under review. On an effective
basis, the pound closed the period at 91.5, down
about V* percent. Between the end of January
and the end of July the foreign exchange reserves
of the United Kingdom declined from $12.6
billion to $10.9 billion. The loss of reserves
reflected only in small part the authorities' intervention operations in the exchange market, particularly in the wake of the Falkland Islands
crisis. For the most part, the decline in reserves
reflected the revaluation losses of gold and dollar



swaps against European currency units (ECUs)
done with the European Fund for Monetary
Cooperation (FECOM) and other factors, such
as the repayments and accruals of external public-sector borrowings.

FRENCH

FRANC

Early in 1982 the French franc traded comfortably in the exchanges even as market sentiment
remained skeptical about the currency's longerterm outlook. Supporting the franc was a combination of foreign exchange controls, conversions
of public-sector foreign borrowings, and shortterm capital inflows by investors taking advantage of higher nominal interest rates in France
than in many other EMS countries. The franc
therefore remained in the upper portion of the
joint float in the early weeks of 1982, while
trading against the dollar at F F 5.9600 at the end
of January.
In the background, however, market participants expressed worry that French policies had
placed insufficient emphasis on curbing inflation
since the October 1981 realignment, thereby allowing the benefits of the franc's depreciation to
erode. The government appeared committed to
its original strategy of economic expansion
aimed at boosting jobs and absorbing the rapidly
growing labor force. However, the stimulus provided to consumption had not been accompanied
by a pickup in domestic investment and employment. Rather, the boost to demand was reflected
primarily in higher domestic prices, burgeoning
imports, and a worrisome increase in the government's budget deficit. At the same time, export
growth was hampered by depressed economic
conditions in most foreign markets. As a result,
France's trade and inflation performance deteriorated in relation both to earlier trends and to
several other industrial countries, particularly
those like Germany that had chosen to follow
economic policies of greater restraint.
These concerns found little reflection in exchange rate movements so long as official parities within the EMS could be expected to hold.
But, unexpectedly, on February 21 the Belgian
franc and the Danish krone were devalued
percent and 3 percent respectively, vis-a-vis the
French franc and all other EMS currencies.

Foreign Exchange Operations

Almost immediately, market participants began
to question the durability of the new parities in
view of concern, in private as well as official
circles, that the exchange rate relationships for
the franc did not accurately reflect the relative
competitiveness of the French economy and the
divergence of French economic policy from that
of other EMS countries. Speculation thus developed that the French currency would soon be
devalued in the context of another and more
extensive realignment of the EMS and, amid
heavy outflows of capital, the franc dropped to
the bottom of the joint float arrangement by the
end of February.
The French authorities were concerned about
the weakness of the French franc, but the top
priority remained providing stimulus to the domestic economy—particularly to avert heavy social and political costs of growing unemployment. Consequently, the authorities sought to
stem the selling pressures on the franc without
major revisions in domestic economic programs.
They also urged other countries to begin relaxing
their policies of restraint, believing that policy
stimulus elsewhere, particularly in the monetary
sphere, was important to promote a general
decline in international interest rates, a recovery
of the sagging world economy, and some improvement in the overall employment situation.
Meanwhile, to defend the franc the Bank of
France during March raised domestic interest
rates, moving call money rates for example to
some 18 percent from about 14 percent. These
actions reversed the previously easier tendency
in domestic interest rates, while also moving
counter to the downtrend in interest rates in most
other European centers.
The central bank also intervened heavily in the
exchanges as a seller of foreign currencies to
keep the franc trading within the required 2Va
percent band against the German mark and
Dutch guilder. Moreover, the government tightened exchange controls. Henceforth, exporters
were required to repatriate the proceeds of sales
abroad within two weeks rather than one month
as previously. French investments abroad in
excess of F F 1 million were to be financed totally
abroad rather than up to 75 percent from foreign
sources as before. Approval from the Bank of
France was required in more cases than before
for financial transfers of funds abroad. At the



595

same time, Finance Minister Delors spoke out
strongly against a devaluation of the franc.
These actions were seen in the market as
strong signals of the government's determination
to avoid a devaluation of the franc and prompted
nonresidents to begin covering their short currency positions. The purchases of franc balances
coincided with a tapering-off of special factors
that had also weighed on the franc, such as
compensation payments to nonresidents for their
ownership share in nationalized industries. Selling pressures on the franc therefore abated,
particularly once the long Easter weekend
passed without a realignment of the EMS. As a
result, the French currency moved from the
bottom to the middle of the joint float even as it
weakened further against the dollar, declining to
F F 6.2950 around mid-April.
But, otherwise, with respect to objectives for
the domestic economy, the French government
experienced difficulties. Heavier spending in the
public sector, enlarged by the nationalization of
twelve industrial groups, did not lead as expected to an improvement in business conditions. In
fact, investment activity remained weak, particularly in the private sector where industry faced
increased payments for imported materials and
had to shoulder the growing costs of domestic
reforms. The introduction of a shorter workweek
and in some sectors a longer vacation period,
with no accompanying decrease in compensation, together with higher taxes to finance additional social benefits, exerted a considerable
squeeze on corporate profit margins. Meanwhile,
consumer demand—the main factor sustaining
the economy in the latter part of 1981—began to
falter, further removing incentives to capital expenditure. Consequently, in the first quarter of
1982, industrial production and real GNP declined, and unemployment rose further, approaching the two million level.
Disappointment over the economy's performance prompted the French authorities to introduce several measures in the spring. For selected
investments, the government provided loans at
below-market interest rates. It also reduced employers' social security contributions in hard-hit
industries as well as in those pledged to maintain
a certain level of investment or employment. In
May the government proposed a supplementary
1982 budget, authorizing F F 5 billion in expendi-

596

Federal Reserve Bulletin • October 1982

tures for the purpose of supporting nationalized
companies, reducing selected business taxes,
and extending tax incentives to the agricultural
sector.
To contain the rise in the budget deficit, the
government reduced certain expenditures and
raised taxes. Specifically, expenditures by the
Social and Economic Development Fund were
cut back. With respect to revenues, effective
July 1 the authorities boosted the value-added
tax 1 percentage point to 18.6 percent, increased
taxes on banks and other public-sector and financial institutions, and requested banks to provide
equity financing and participation loans of about
FF 6 billion to nationalized firms to strengthen
their capital base. Meanwhile, to minimize the
monetary impact of these measures and to help
keep the monetary aggregates from growing beyond the targeted annual range of \2Vi to l3Vi
percent, the government began selling floatingrate Treasury bills. The new bills were designed
to attract institutional investors, such as insurance companies and pension funds, previously
reluctant to invest in paper with fixed interest
rates.
Exchange market participants welcomed the
authorities' move toward some tax relief for
business, but worried that, unless basic elements
of the overall strategy were changed, France
would move increasingly out of step with its
competitors regarding inflation, balance of payments, and budgetary developments. They noted
that France's inflation rate had accelerated to 14
percent, compared with only 5 percent in Germany. The cumulative trade deficit widened to FF
81 billion at an annual rate in the first four
months of the year, compared with a deficit of
FF 50.8 billion for all of 1981 and FF 62.4 billion
in 1980. And the budget deficit, officially projected to rise to FF 95 billion, about 3 percent of
GNP, was privately forecast to exceed FF 100
billion. Moreover, differing views among industrial countries about the appropriate policy approach to deal with stagflation in the world
economy persisted, and thus few market participants counted on policy convergence at the
international level to bring France into closer
alignment with its competitors.
Speculation therefore mounted that the franc
would be devalued as part of an EMS realignment or would be withdrawn from the joint float



altogether—perhaps even before the seven-nation economic summit in Versailles. Between
late April and early June the franc came under
repeated bouts of selling pressure, particularly
before weekends. The Bank of France again
raised domestic interest rates and intervened
heavily in the exchanges. But market participants, sensing the magnitude of the support
operations, viewed the authorities as having only
limited resources to maintain the franc within the
mandatory EMS limits, and so the selling pressures remained intense.
Over the June 12-13 weekend the French franc
was devalued within the EMS. Against the German mark and Dutch guilder, which were revalued against all other currencies within the EMS,
the franc was in effect devalued about 10 percent. Against currencies whose official parities
were unchanged, the franc was adjusted downward 53/4 percent. Against the Italian lira, itself
adjusted downward by 23/4 percent against all
participating currencies, the franc was in effect
depreciated about 3 percent. To support the
devaluation and to help promote a convergence
of inflation rates between France and other EMS
countries, the government introduced a fourmonth wage-price freeze to be followed by a
system of guidelines designed to slow inflation to
10 percent in 1982 and to 8 percent in 1983. The
French government also pledged to restrain the
growth of the government budget deficit to
no more than 3 percent of GNP this year and
next, largely through cutbacks in current expenditure.
In the exchange markets the French stabilization plan was seen as a compromise between the
desired policy of stimulus to respond to the
unemployment problem and the pressures for
restraint to deal with mounting inflation and the
weakness of the franc. Participants adopted a
cautious attitude, wondering whether the government would gain acceptance for its program
which in some respects, for example stiff wage
controls, appeared tougher than anti-inflation
measures imposed by its more conservative predecessors. Initially, at least, French unions—a
major source of political support for the Socialist
government—objected to the loss of purchasing
power implicit in the wage freeze and were
reluctant to give up the nearly automatic system
of wage indexing that for years had helped wages

Foreign Exchange Operations

keep pace with inflation. Industry, for its part,
objected to the price freeze. For, despite the
government's move after the devaluation to lower domestic interest rates, the rebuilding of profit
margins was still thought to be difficult, all the
more so without improvements in productivity.
As a result of the wait-and-see attitude in the
exchange markets, international investors were
hesitant to reconstitute franc-denominated assets, and the reflux of funds that developed
immediately after the realignment soon tapered
off. Nonetheless, in the six weeks to the end of
July the franc traded comfortably in the upper
part of the EMS and the Bank of France was able
to enter the market as a purchaser of currencies
in order to begin repaying debt and rebuilding
reserves. Against the dollar the franc weakened
along with other major currencies, falling to F F
7.00 on July 8 before recovering somewhat to
trade at F F 6.8025 in the New York market at the
end of July. At this level, the franc was about 14
percent lower on balance over the six-month
period under review. France's foreign exchange
reserves declined from $18.3 billion at the end of
January to $13.3 billion at the end of July. In
part, the decline reflected intervention support
for the franc by the Bank of France, financed
through reserve holdings and very short-term
borrowings within the EMS. The drop in reserves also reflected revaluation losses on gold
and dollar swaps against ECUs done with
FECOM.

ITALIAN

LIRA

The Italian lira was trading firmly at the top of
the EMS early in 1982, although it had fallen
back to LIT 1,250 against the rising U.S. dollar.
The lira's strength in the EMS partly reflected its
two devaluations within that currency arrangement during 1981. Also, some recent improvement had occurred in the Italian external balance
and domestic inflation rate, and substantial inflows of capital had been attracted by high Italian
interest rates. The Bank of Italy had taken advantage of the lira's relative strength to rebuild
its foreign currency reserves to a level of $17.8
billion at the end of January 1982.
The Italian inflation rate had begun to slow in
1981 and moderated further in January 1982. In



597

part, this progress reflected falling world prices
of oil and other raw materials, those price movements stemming from deepening recession in
most industrial economies. Moreover, price increases were slowing in Italy as the restrictive
monetary policy of the Bank of Italy began to
dampen domestic inflationary pressures. The lira
was also supported at this point by improvement
in the Italian current account deficit, which had
contracted from a $10 billion annual rate early in
1981 to a $3 billion rate by the year-end. The
improvement derived from both strong growth of
export volume and declines in imports. The gains
in exports reflected the 1981 devaluations of the
lira within the EMS and a surge in orders from
those OPEC nations that developed large current
account surpluses after the 1979-80 oil price
increases. At the same time, Italian imports had
declined due to the weak domestic economy and
the import deposit scheme, which had been
adopted in May 1981. (The deposit scheme required that a percentage of the foreign exchange
value of imports be placed in a non-interestbearing account with the Italian central bank.
Initially the deposit was set at 30 percent, but the
ratio had been gradually reduced to 15 percent by
the end of January 1982.)
The markets remained concerned that the recent Italian improvement in inflation and the
external account would be difficult to sustain.
OPEC current account surpluses had begun to
contract, threatening to limit further expansion
of Italian exports, while failure to make additional gains on domestic inflation and wage increases
was thought likely to result in declining competitiveness of Italian exports to industrial economies. Moreover, any upturn in domestic incomes
would be likely to spur imports. In contrast to
the favorable performance of the trade balance,
the surplus on the invisibles account deteriorated
during 1981, as increased borrowing abroad and
the high level of international interest rates
sharply pushed up the cost of servicing Italy's
external debt—a drain on the current account not
likely to be substantially relieved in 1982.
The inflation outlook was also clouded by the
long-standing problems of the huge government
deficit and steeply rising wage costs. The government had proposed an official ceiling of LIT 50
trillion for the 1982 public-sector borrowing requirement, slightly below last year's actual re-

598

Federal Reserve Bulletin • October 1982

suit. But, in 1981 the outcome had exceeded the
original ceiling of LIT 37.5 trillion by some LIT
17 trillion. Thus, market participants were skeptical that such an ambitious goal for 1982 was
feasible and worried that fiscal stimulus would
contribute to renewed inflationary pressures. On
the wage front, the government had begun negotiations with business and labor in the middle of
1981 to modify Italy's scala mobile, which provides for automatic quarterly adjustments in pay
to offset inflation. Into 1982, however, no significant progress had been made in these negotiations.
Finally, the Italian economy had weakened in
the second half of 1981, with real GNP declining
for the year as a whole for only the second time
since World War II. The softening of the domestic economy had contributed to slower price
increases in the short run, but had led to calls for
an easing of the strong anti-inflation stance of
monetary policy, which had held nominal Italian
interest rates well above those of Italy's major
trading partners into 1982. Many market participants remained concerned that any easing of
monetary policy would quickly release new inflationary pressures in the domestic economy and
also tend to reduce capital inflows.
Despite these concerns about the future, the
lira remained firm within the EMS into February
1982. The Italian authorities took advantage of
the lira's strength to suspend the import deposit
scheme in early February, about a month ahead
of its scheduled termination. This action was
taken to minimize speculative pressures in the
exchange markets that otherwise were expected
to result from the markets' anticipation of the
change at the end of the month. Although some
selling pressure emerged on the day of the announcement, the Bank of Italy was quick to
intervene and the lira soon steadied.
In the EMS realignment on February 21, the
lira, like the French franc, was left unchanged.
The realignment focused on the market's attention on the question of the future competitiveness of Italian exports and domestic economic
problems. In addition, Italian market interest
rates were easing, fostering rumors that the Bank
of Italy would lower its discount rate either
independently or in cooperation with the monetary authorities in Germany and France. In these
circumstances, the lira became caught up in



speculation over another EMS realignment, and
residents scrambled to purchase foreign currencies and to repay mark-denominated debt. As a
result, the lira, which had traded around the
middle of the new EMS band immediately after
the realignment, declined faster than other continental currencies against the dollar during
March. At times, it traded at or near the bottom
of the joint float despite heavy intervention by
the Bank of Italy, including its first sales of
marks in six months. Italian foreign currency
reserves declined $4.5 million during February
and March.
During April and the first part of May, the lira
generally remained under downward pressure in
the exchanges. The latest balance of payments
data, including the report of a record February
trade deficit of LIT 2.9 trillion, confirmed the
market's worry that export growth might stagnate, mainly as a result of the dwindling OPEC
surplus and the increased financing difficulties of
certain less developed countries, which limited
the scale of their imports. Also, Italian imports
had surged in the wake of the elimination of the
import deposit scheme, mostly to rebuild domestic inventories. At home, inflation remained considerably higher than that of Italy's major trading
partners, despite having slowed somewhat further, while market concern increased over the
deepening crisis within the government. Sharp
divisions over economic policy, particularly between the Christian Democrats and the Socialists, threatened to impede parliamentary adoption of a proposed austerity budget and to bring
down the Spadolini coalition government.
The market thus came to view the lira as a
candidate for devaluation within the EMS, generating adverse movements in leads and lags and
prompting Italian residents to repay foreign currency loans and to borrow lire. In order to curb
the leading and lagging of payments, the Foreign
Trade Ministry moved to tighten foreign exchange controls. In addition, residents were no
longer permitted to repay foreign currency loans
borrowed from Italian banks before maturity.
Subsequently, the Bank of Italy announced it
would increase its progressive penalties on lira
credit extensions in excess of its established
ceilings to counteract the widespread substitution by Italian borrowers of home currency for
foreign currency financing. In addition, the Bank

Foreign Exchange Operations

of Italy intervened frequently in the exchanges to
resist the decline in the rate, and it kept Italian
interest rates high and steady even though rates
abroad tended to ease. Nonetheless, the selling
pressures on the lira persisted, and late in April it
slipped below the 2!/4 percent limit required for
its partner currencies in the EMS, even though it
remained well within the broader 6 percent band
applying to the lira.
By late May, however, foreign currency inflows from the start of the tourist season, together with the earlier exchange control measures,
helped bring trading into better balance. In these
circumstances the view developed in the market
that a devaluation of the lira might be put off at
least until after the Versailles summit in June and
perhaps through the summer. The Bank of Italy
was able to scale back its support operations
considerably and, on occasion, even purchase
dollars to rebuild reserves. Nonetheless, foreign
currency reserves fell another $1.8 billion during
the two months.
Over the June 12-13 weekend the lira's central
rate within the EMS was adjusted downward 23A
percent against those currencies in the system
whose central rates remained unchanged, as part
of a realignment involving the French franc. In
effect, the lira was devalued about 7 percent
against the German mark and Dutch guilder,
each of which was revalued 4V4 percent. In
public statements after the realignment, Prime
Minister Spadolini asserted that the lira was
devalued solely to protect the competitiveness of
Italian exports in the face of the devaluation of
the French franc and not because the move was
necessary in the short run. At that point, Italy
expected an influx of funds during the tourist
season, by then well under way. The government
also announced the devaluation would be followed up with a package of austerity measures.
After the realignment, the lira traded above the
21/4 percent limit required for other participating
currencies. The Bank of Italy took advantage of
the lira's comfortable position within the EMS to
rebuild reserves and to ease short-term domestic
interest rates. Nonetheless, Italian rates remained high in relation to interest rates abroad
and continued to attract capital inflows, particularly with a lira devaluation no longer a near-term
prospect. The relative strength of the lira also



599

enabled the Italian authorities to relax foreign
exchange controls on export-related credit.
Against the strong dollar, however, the lira fell
back to a record low of LIT 1,401.50 in European
trading.
Despite the firmness of the lira within the
EMS, the market remained concerned over several issues. Impatience over the lack of progress
in negotiating ways to modify the scala mobile
had prompted employers' associations in first the
private and then the public sector to announce
they would withdraw from the 1975 agreement
with labor unions on wage indexation when it
expires in February 1983. Employers were seeking a number of reforms to the system, including
the exclusion of indirect taxes and externally
generated cost increases from the calculation of
wage increases, a more flexible escalator that
would allow firms to differentiate among various
wage and salary categories, and adjustments in
wages every four or six months rather than every
three months. Although many labor leaders accepted the need for some modification of the
agreement, the unions were sharply divided over
the nature and extent of any changes. The breakdown of negotiations to change the wage indexation system was a serious setback to the government's efforts to forge a social pact and to limit
wage increases in 1982 to 16 percent, and it
raised the possibility of protracted strikes by the
unions. Also, the outcome of the three-year wage
contract negotiations, which had not yet begun in
earnest even though some of the contracts had
expired the previous December, had been
thrown into greater doubt.
Meanwhile, after months of fractious debate,
the Italian cabinet finally approved a major stabilization program designed to hold the increase in
the state borrowing requirements in 1982 to a
level well beyond the original proposed ceiling of
LIT 50 trillion but lower than the estimated LIT
70 trillion that would result if no action were
taken. However, even after this action, the state
borrowing requirement would exceed that of
most other industrial countries and pose a threat
to the progress already made on the inflation
front. Furthermore, the program still awaited
final parliamentary approval.
By the end of July the lira was trading at LIT
1,367.00 against the dollar, down 9V4 percent
over the six-month period under review and

600

Federal Reserve Bulletin • October 1982

down 5 percent against the German mark. Meanwhile, Italy's foreign exchange reserves stood at
$13.9 billion, an increase of $3.9 billion over the
period.

EUROPEAN

MONETARY

SYSTEM

In early 1982 most countries participating in the
EMS joint float arrangement had been pursuing
generally restrictive macroeconomic policies for
about two years to counter inflationary pressures
arising from the second round of international oil
price increases. Some had made considerable
progress in reducing inflation and in limiting the
impact of higher oil prices and depreciating exchange rates on domestic wages and costs.
Meanwhile, the dramatic softening of previously
tight conditions in the world oil market and the
weakening of economic activity in the EMS (and
among industrial countries more generally)
helped erode many of the larger payments imbalances that had emerged in the aftermath of the oil
shock. But there were major problems as well.
Rigidities in economic and social structures—
which in varying degrees characterize all industrial countries—hampered the implementation of
restrictive policies in individual EMS member
states or meant that success in the battle against
inflation was achieved only at considerable cost.
Restrictive policies proved costly in terms of
output losses and unemployment, and the prospects for growth appeared more pessimistic than
expected earlier, even for countries that had
chosen to adopt policies of greater stimulus.
Also, while the progress on inflation was
achieved through tight monetary policies and
high interest rates, the outlook for maintaining a
durable reduction of inflation was being undermined by the persistence of unacceptably high
government deficits. Within individual countries
the listless state of domestic demand generated
efforts by domestic firms to sell in external
markets, competitive pressures among member
states were strong, and protectionist tendencies
were growing. Moreover, underlying the more
balanced pattern of payments positions were
substantial disparities in competitiveness.
Within the joint float arrangement, the Netherlands guilder, French franc, and Italian lira traded at the top while the German mark, the Belgian



franc, Danish krone, and Irish pound traded in
the middle and lower portions of the band. The
upper group contained currencies that were vulnerable on fundamental economic grounds, but
nonetheless remained firm, benefiting from a
combination of relatively high interest rates,
exchange controls, and expectations in the market that official parities established in October
1981 would hold at least in the near term. At the
bottom, requiring persistent intervention support, was the Belgian franc. Structural problems
in the Belgian economy were reflected in mounting public-sector fiscal deficits, in excess of 15
percent of GNP, and current account deficits,
which for some years had been financed through
government-arranged loans in dollars and in other currencies. The external public debt, which
was practically nil in 1977, had risen by the end
of 1981 to more than 10 percent of GNP.
Like governments in other small, open economies, the government of Belgium had for some
time rejected devaluation of its currency, arguing
that the benefits of such action would be quickly
eroded in view of the large role of international
trade in total GNP and the high degree of domestic wage indexation. But, because of the mounting gravity of the situation, the new government
that came to office after the November 1981
election had been granted special powers by
Parliament, including authority to constrain the
growth of wage increases. Consequently, a
change in the official parity of the Belgian franc
seemed more likely than before. Meanwhile,
Denmark and Ireland, which had also relied
heavily on foreign borrowings to finance large
fiscal and current account deficits, found the
inflows of private capital had slowed. To maintain balance in the foreign exchange market,
Ireland continued to place reliance on foreign
exchange controls. In Denmark, concern developed that the exchange rate for the krone did not
reflect the deterioration that had occurred in the
economy's external competitive position.
On February 21, the Belgian franc was devalued 8V2 percent and the Danish krone 3 percent
against all other participating currencies. In connection with the realignment, the Belgian authorities introduced measures aimed at stimulating private investment while reducing the
government borrowing requirement. The measures included a limited price freeze, the tempo-

Foreign Exchange Operations

rary suspension of wage indexation, and selected
tax reductions for business and industry. Immediately after the realignment, the Belgian franc
and Danish krone rose to the top of the newly
aligned band, the Netherlands guilder traded
around the middle, and the German mark,
French franc, Italian lira, and Irish pound moved
to the lower portion of the EMS band.
Exchange market participants were skeptical
that the new parities would stick, citing concerns
about relative competitiveness, unresolved
structural problems, and continued policy divergences. It was known in the market that the
governments of Belgium and Denmark had requested larger depreciations of their currencies
than had been agreed to by other member states,
and participants therefore questioned whether
the realignment was sufficient to rectify the various imbalances that had already emerged. At the
same time, the realignment appeared too narrow
in scope. It was seen in the market as failing to
address differences between currencies of countries benefiting from improving current account
and inflation performances, such as the German
mark and the Netherlands guilder, and currencies of countries where the outlook was decidedly less favorable, such as the French franc and
the Italian lira.
With respect to structural issues, Belgium and
Denmark were not alone in facing problems of
large and growing budget deficits and rigid wage
bargaining systems. In general, market participants felt that there was additional need in those
and other countries—France and Italy in particular—to contain wage demands, to reduce government expenditures, and to alleviate the pressures
of deficit financing on the financial markets and
ultimately on the growth of money. Looking
ahead, participants expressed worry that divergences in economic policy would compound existing differences in economic performance.
They noted that not all countries maintained
equal vigilance in the fight against inflation. In
the case of France, emphasis continued to be
placed on expansionary programs to curtail unemployment.
These concerns generated renewed tension
within the joint float and, as speculation mounted
that another realignment was inevitable, the German mark and the Dutch guilder moved to the
top of the system, while the Danish krone weak


601

ened, falling for a time to the middle of the band.
Meanwhile, the Belgian franc dropped to the
bottom of the joint float where it alternated with
the French franc. The Irish pound traded in the
lower portion of the band. The Italian lira, trading in its wider, 6 percent margin, fell below the
currencies in the narrow 2V4 percent band. On
March 19 and again on May 6—with the EMS
fully stretched—the central banks of Germany
and the Netherlands reduced their official lending rates. The authorities in the Netherlands had
room to provide some stimulus to stagnant domestic demand, owing to the favorable external
position of the Netherlands. Indeed, with domestic demand weaker than in most other EMS
countries, competitiveness improving, and natural gas export revenues boosted by earlier price
hikes, the Dutch current account posted a surplus estimated at around AV2 percent of GNP.
The reduction of interest rates in Germany and
the Netherlands provided only temporary relief
to the weaker currencies. The psychology of the
market grew increasingly pessimistic, as skepticism intensified about the willingness and ability
of the authorities in the weaker currency countries to correct imbalances in their economies.
Adverse social reaction within Belgium provoked by the post-February devaluation program
and by specific problems in the steel sector
(including demonstrations and strikes) cast doubt
on the durability of the government's austerity
measures. Elsewhere, institutional arrangements, coupled with the pressures of high and
rising unemployment, appeared to make a tightening of financial policies very nearly untenable,
particularly in Denmark and Ireland where domestic budget deficits widened sharply. To defend existing parities, the authorities of Belgium,
Ireland, and France raised official interest rates
while money market rates in Denmark moved
higher. France and Italy also tightened exchange
controls. And in all cases, intervention sales of
dollars and of stronger EMS currencies became
heavier and more frequent.
Over the weekend of June 12-13, the EMS was
again realigned. The central parities of the German mark and Dutch guilder were revalued by
4Va percent, while those of the French franc and
Italian lira were devalued by 53/4 percent and 23/4
percent respectively against the other participating currencies. The bilateral central rates of the

602

Federal Reserve Bulletin • October 1982

Belgian franc, Irish pound, and Danish krone
were otherwise left unchanged. In subsequent
days and weeks, the Italian lira and Franch franc
traded at the top of the newly aligned band, and
the Irish pound and Danish krone moved near
the top while the Belgian franc traded in the
middle. The German mark and Netherlands guilder traded at the bottom of the new alignment.
The new exchange rate structure and the relaxation of tensions enabled several EMS countries
previously constrained from easing monetary
conditions to reduce domestic interest rates.
France, Denmark, and Ireland permitted money
market rates to ease, while Belgium lowered
official lending rates. The tendency of interest
rates to ease occurred largely during July, when
U.S. interest rates were registering sharp declines from the high levels that had prevailed in
previous months.
However, the reduction of European interest
rates lagged behind the cuts in the United States.
The weakness of the EMS currency bloc as a
whole against the rising dollar made the authorities reluctant to take actions that could contribute to a further depreciation of their currencies.
In addition, within the EMS the reflux of funds
from revalued currencies into those that were
devalued was comparatively modest both in
scale and in duration, owing to the cautious
reaction of the market to the newly established
parities. To be sure, participants appreciated that
greater efforts than earlier in the year were being
made to harmonize economic policies, particularly in view of restrictive policy measures in
France and Italy that accompanied the realignment.
Nonetheless, participants awaited the evolution within various EMS countries of the proposed austerity and budget-tightening programs,
sensing that political and institutional difficulties
would make it hard for many governments to
carry out intended remedial measures. In these
circumstances, part of the unwinding of speculative positions occurred not within the EMS between revalued and devalued currencies but visa-vis the dollar instead. This meant that, while
the EMS mechanism operated free of strains
during the balance of June and July, individual
member states had less leeway than after previous realignments to relax monetary policy or to
enter the exchange market as buyers of currency



in order to repay debt or to rebuild international
reserve positions.

CANADIAN

DOLLAR

The Canadian dollar was declining against the
U.S. currency at the end of January 1982, having
fallen nearly 2 percent since November to
U.S.$0.8342 (Can.$ 1.1988), a level about 3 percent above its fifty-year low of August 1981. The
Canadian economy was in a deepening slump in
early 1982, but little apparent progress had yet
been made on Canada's persistent double-digit
inflation rate or the high rate of new wage
settlements. Because of the inflation problem
and the risk it would be worsened by further
declines in the exchange rate, Canadian monetary and fiscal policy remained anti-inflationary.
But the policy had been widely criticized in
Canada in a debate that appeared to intensify
each time new evidence appeared of declining
productive activity and worsening unemployment. The Canadian dollar tended to weaken in
the exchanges at such points, mainly reflecting
concern that interest rates would be lowered to
stimulate the economy and would trigger additional capital outflows. In fact, Canadian interest
rates had lagged behind the rapid rise of U.S.
rates during December and January, and by the
end of the month the favorable differential had
narrowed by as much as 5 percentage points and
had been reversed for some maturities.
Downward pressure on the Canadian dollar
also reflected the earlier worsening of Canada's
external position and the closely related controversy over energy policy. Despite the weakening
domestic economy, Canada's balance of payments position had deteriorated progressively
through the first three quarters of 1981, mainly
because of climbing external debt-service costs
but also because declining demand abroad cut
into Canadian exports. The deficit on current
account widened just as massive net investment
outflows developed in connection with the "Canadianization" of ownership in energy-related industries. If anything, Canadian energy policy
became even more controversial because of the
deteriorating financial position of Canadian energy companies. Falling world energy prices and
declining demand stretched the cash flows of

Foreign Exchange Operations

those companies at the same time that debtservice costs were climbing as a result of buyouts
of foreign equity interests. Moreover, the ownership goals of the national energy program had not
been reached, raising the specter of further large
capital outflows even though the Canadian government was thought prepared to accept a further slowing of the rate of buyout because of
financing difficulties and pressure on the exchange rate.
Reflecting this background, sentiment toward
the Canadian dollar was decidedly bearish as the
period opened. Large sales on Chicago's IMM
pushed the rate through the psychologically important level of U.S.$0.83 (equivalent to
Can.$1.2057 in the interbank market) on the first
day of February, and the rate declined through
most of the month as interest rate differentials
adverse to the Canadian currency opened up.
Highly publicized criticism of the government's
anti-inflation policies during a conference of the
ten provincial premiers contributed to nervousness in the exchanges, despite Prime Minister
Trudeau's strong reaffirmation of the government's policy stance. Then, three major private
participants withdrew from the Alsands development project in Alberta, drawing attention to the
problems being encountered in the government's
long-term program for Canada's energy development. In all, the Canadian dollar fell an additional 2xh percent during February to U.S.$0.81
(Can.$1.2346). Official operations moderated
pressures in the exchanges, and Canadian foreign currency reserves declined nearly $800 million during the month.
From late February through early May, the
Canadian dollar fluctuated in a range between
about U.S.$0.81 (Can.$1.2346) and U.S.$0,825
(Can.$1.2121). During early March the Canadian
dollar firmed in the exchanges, following actions
by the Bank of Canada to push interest rates
sharply higher and reestablish an interest rate
differential favorable to the Canadian dollar.
Market participants were reassured by these
actions and the accompanying statement by the
Bank of Canada that reaffirmed the policy of
maintaining a positive interest rate spread, relative to the United States, sufficient to attract
needed capital inflows. Also, Canada's trade
surplus had increased significantly in late 1981
and had jumped to a U.S.$1.3 billion surplus in



603

January, the largest in a year. In fact, the Canadian trade surplus remained large, subsequently
underpinning the currency for the remainder of
the period under review.
This recovery for the Canadian dollar proved
brief, as selling pressure against the Canadian
dollar reemerged by the middle of March. U.S.
interest rate increases outpaced those in Canada,
partly eroding the positive interest differentials
that had opened up, while evidence of the Canadian economy's weakness continued to cumulate. The Canadian currency thus declined during
the rest of March, but met resistance when it
approached the technically important U.S.$0.81
(Can.$1.2346) level. Through early May, the
exchange rate fluctuated just above this level,
responding mainly to modest variations in Canadian-U.S. interest rate differentials and participating only slightly in the general rise and fall of
foreign currencies against the U.S. dollar that
took place.
Market participants remained preoccupied
with the state of Canadian economic policy.
Their concerns gained new emphasis from the
news that unemployment had risen to 9 percent
in March, while consumer prices had registered
their second consecutive monthly increase of
more than 1 percent. Rumors developed in the
market, and were confirmed by an announcement on May 1, that the Alberta oil sands development project would be abandoned after withdrawal by all its private participants. The Bank
of Canada was a net seller of U.S. dollars during
March, recording a drop of approximately $500
million in reserves, but during April its net
reserve position remained about unchanged as
the central bank drew $500 million on its credit
lines with U.S. commercial banks to bolster
reserves.
The Canadian currency's relative steadiness
since late February ended abruptly in early May,
and a sustained slide began, which took the
Canadian dollar to record levels below $0.77
(Can.$1.30) by the third week of June. In a
sudden wave of selling, the exchange rate plummeted through the U.S.$0.81 level on May 12 for
the first time since August 1981. While market
participants were encouraged by another large
trade surplus in March, this good news was
swamped by an April jump in the unemployment
rate to 9.6 percent and by an article published in

604

Federal Reserve Bulletin • October 1982

a leading Toronto newspaper, which suggested
that the Canadian authorities might be considering a shift in policy toward stimulating the economy and allowing the currency to depreciate.
Government officials were quick to refute this
suggestion. Still, the Canadian dollar dropped
nearly 1 percent that day to close at U.S.$0.8059
(Can.$1.2408). The Bank of Canada provided
exchange market support and acted to tighten
cash reserves of the banking system. After a rise
of lA percentage point in the central bank's
discount rate and the Prime Minister's statement
assuring Parliament that there would be no devaluation or imposition of exchange controls,
market participants were reassured that, for the
moment, policy would not be changed. Announcement of modification to the export licensing criteria on natural gas also helped the Canadian currency.
Market sentiment deteriorated further in June,
however, on news of another decline in industrial
production and a record 10.2 percent unemployment rate in May, prompting more public calls
for lower interest rates. In addition, greater
concern developed about the financial strains
affecting Canadian corporations and even some
large Canadian banks. In this environment, news
that otherwise might have been favorable to the
exchange rate, such as better trade figures and a
higher discount rate for the Bank of Canada, only
served to confirm the likelihood of further weakening of the economy and thereby deepened the
mood of pessimism about prospects for the Canadian currency. Then, after the close of the
Versailles summit meeting, Prime Minister Trudeau indicated that Canada might take independent action if U.S. interest rates did not fall by
mid-July, suggesting to the market the possibility
of a change of heart by the authorities about
accepting the consequences of currency depreciation. Heavy speculative sales occurred in an
increasingly bearish atmosphere, particularly after the announcements of a further acceleration
of consumer price inflation during May and an 8
percent quarterly decline at an annual rate in real
GNP for the first three months of the year. The
exchange rate thus fell to a historic low of
U.S.$0.7683 (Can.$1.3016) on June 22.
At these levels, the Canadian dollar met resistance to further declines, steadied through early
July, and began a recovery that coincided with



the rapid declines in U.S. interest rates and a
softening of the U.S. dollar through the end of
the period. Corporations took advantage of the
historic low rates to meet their needs for Canadian currency, while professionals began taking
profits on their very large short positions. A new
budget was announced on June 28, and the main
feature was a proposal for a two-year national
effort to brake inflation. The program included a
cap on salary increases of government employees, limits on price increases in federally regulated sectors of the economy, some temporary
deindexation of personal income taxes and social
security payments, and new measures to assist
those most severely affected by the recession.
Market reaction to the budget announcement
was primarily negative, focusing on the Can.$9
billion increase to nearly Can.$20 billion in the
government's estimated total deficit for the current fiscal year, a change that resulted from the
low level of actual economic activity compared
with what had been assumed in the previous
budget. On the positive side, market participants
were relieved that government policy remained
firmly anti-inflationary. Thus, the exchange rate
fluctuated without significant gains. Canadian
gross foreign exchange holdings declined about
$500 million through May and June, even after
additional drawings on the credit lines with Canadian and foreign banks that amounted to $300
million in May and $1.4 billion in June.
The Canadian dollar firmed in the exchanges in
July, initially supported by technical factors, as
some widely used statistical models gave strong
"buy" signals and participants on the IMM
began turning their large short positions. U.S.
interest rates also began a decline, which was not
immediately matched by equivalent cuts in Canadian rates, and speculation arose in the market
that the authorities planned to tap foreign credit
markets again to bolster official reserves. These
supporting factors were reinforced by a continued strong trade performance, seasonal inflows
from tourism, and an unusually heavy schedule
of foreign borrowing conversions, which in combination appeared to swamp any negative impact
on sentiment from the report of yet another
increase in June unemployment to 10.9 percent
and the downgrading of some major Canadian
borrowers' debt issues by an American bondrating service. Some selling emerged later in the

Foreign Exchange Operations

month when wage talks between Prime Minister
Trudeau and the Canadian Labor Congress ended in disagreement, but this pressure soon abated
and the Canadian currency continued to firm
despite a temporary rise in U.S. interest rates
toward the end of the month.
The Canadian dollar thus closed the period at
U.S.$0.7987 (Can.$1.2520) on July 30, AVI percent lower than six months earlier, but still
nearly 4 percent higher than its lowest level
reached in June. As the Canadian dollar reversed
strongly during July, the Bank of Canada made
substantial net purchases of U.S. dollars and
repaid $750 million of its drawings on commercial banks, while adding about $400 million to
official foreign exchange reserves. During the six
months as a whole, Canada's official foreign
exchange reserves fell about $800 million to $2.1
billion, and $1.65 billion of the borrowings on
commercial bank credit lines remained outstanding as of the end of July.

MEXICAN

PESO

By early 1982, the Mexican peso was widely seen
by market participants as significantly overvalued in the exchange markets, reflecting the accumulated effects of a high and accelerating domestic inflation rate, a nearly fixed exchange rate
against the U.S. dollar over a period of several
years, and to an extent the appreciation of the
U.S. dollar after the middle of 1980. Dating from
early 1977 and increasingly after 1979, the Mexican authorities had followed an aggressive policy
of industrialization and expansion of domestic
employment, based on rapidly expanding oil
production and exports, and a program of borrowing abroad to finance the import of industrial
capital goods. These policies succeeded in their
major objectives, with real output expanding in
Mexico at an annual rate of more than 8 percent
in the four years through 1981 and with commensurate effects on employment.
At the same time, however, signs of strain appeared on both the domestic and the international fronts. Domestically, fiscal deficits had
climbed to approximately 15 percent of gross
domestic product by 1981, expansion of the
money supply had held steady at about 33 percent per annum for four consecutive years, wage



605

increases climbed, and in consequence, the rate
of inflation accelerated in 1980 and 1981 to nearly
30 percent. On the international front, the relatively stable peso exchange rate and rising domestic prices combined to spur imports of consumer goods, to depress Mexican non-oil
exports, and to worsen a trade deficit already
deepened by expanding capital goods imports
and recession in the industrial world.
Meanwhile, the rapid growth of external indebtedness and historically high international
interest rates led to rapidly climbing debt service
costs. Indeed, by the end of 1981, Mexican
public and private foreign currency debt reached
an estimated $75 billion, with debt-service costs
virtually absorbing total oil revenues in that year.
The oil price jump of 1979-80 had worked initially to increase Mexican foreign currency earnings
sharply, but the high prices by 1981 produced an
opposite effect, cutting deeply into world oil
demand and thereby halting the rapid rise in
Mexican oil production as well as lowering export earnings below what had been expected.
Moreover, late in 1981, the Mexican authorities
announced a 1982 public-sector budget clearly
intended to continue the rapid expansion of the
economy—a policy that intensified fears of even
more inflation and a peso devaluation, particularly in view of the deterioration in the external
account. Despite these developments, the peso
late in 1981 was trading at about Mex.$26
($0,038), in nominal terms only about 15 percent
below its level five years earlier, but in real terms
substantially higher.
The authorities initially responded to the growing pressure on the peso by accelerating the
gradual depreciation of the currency in the exchanges to an annual rate of about 17 percent by
the end of 1981. Nevertheless, there were frequent rumors of an impending maxi-devaluation—such as had occurred in 1976—prompting
bursts of foreign currency purchases by Mexican
residents and an erosion of Mexico's foreign
currency reserves, which at the end of 1981 were
reported at $3.7 billion. Then, on February 17,
1982, the Banco de Mexico announced that, in
view of the external situation, it would temporarily withdraw intervention support from the peso,
so that the peso could find an equilibrium level in
the market. The Mexican authorities saw the
problem primarily as one of external balance and

606

Federal Reserve Bulletin • October 1982

stated that an exchange rate adjustment would
make it possible to continue efforts to industrialize Mexico and to expand employment. Accordingly, such corrective measures as were announced to go along with the floating exchange
rate were addressed mainly to external considerations and to cushioning the domestic effects of
the devaluation. Public spending was to be reduced, with the savings used to cushion the
incomes of the workers from the effect of currency devaluation and to cover the increased peso
costs of servicing the public-sector external debt.
Price controls were announced, and domestic
interest rates were to be kept high, but measures
were also taken to ensure adequate credit flows
to critical sectors of the economy.
On the external side, the Mexican authorities
expected that the decline in the peso exchange
rate would substantially restore Mexico's competitive position in non-oil exports, sharply reduce nonessential imports, and halt the capital
flight. The expected swing in the Mexican trade
account was in turn thought likely to reduce
Mexico's need for external borrowing through
1982. In addition, import licensing was to be
tightened. Immediately after the announcement,
the peso dropped in the exchanges from
Mex.$26.74 to Mex.$38 and in the next two
weeks fell to about Mex.$45, a devaluation of
about 40 percent from the February 17 level.
Once trading settled down, some capital reflows
occurred, enabling Mexico to buy back some of
the reserves lost earlier. Through March and
much of April, an uneasy peace existed in the
exchange markets. The peso first climbed somewhat and then drifted lower amid some resident
selling, with market participants increasingly
concerned whether the February policy actions
were sufficient to correct the external imbalance.
But it soon became clear that much if not all of
the potential benefit of the devaluation would be
lost in a burst of inflation brought on by government actions aimed at cushioning the domestic
impacts of the devaluation. The main issue concerned wages. The government agreed in late
March with the trade unions for increases ranging from 10 to 30 percent, increases that followed
a 34 percent boost in the minimum wage on
January 1, 1982. Employers then contended that
the wage increases could not be absorbed without adjustments on the price front, leading the



government to announce a number of tax concessions, and promises of a sympathetic review of
requests for increases of controlled prices. In the
wake of these developments, market estimates of
1982 Mexican inflation were revised sharply
higher, some predicting a rate near 60 percent. In
consequence, the peso again came under sustained downward pressure in the exchanges and
capital flowed out of Mexico. The terms of
Mexico's new international borrowings, which
had begun to harden even before the February
devaluation, hardened further. In mid-April the
peso stood at about Mex.$46, and was being
allowed to decline in the exchanges at an annual
rate of about 22 percent.
Then, on April 21, the government of Mexico
announced a stabilization program, prompted by
the deteriorating external situation, but in this
instance including a major domestic austerity
program designed to facilitate improvement in
the external account. The seventeen-point program was aimed at sharp reduction of government spending and the fiscal deficit, largely
through increases in prices of public-sector
goods and services, a tightening of monetary
policy, and substantial further reductions of imports, which in turn would reduce the need to
borrow abroad. This program, if implemented as
announced, was thought by market participants
likely to result in a virtual cessation of Mexican
economic expansion in 1982 and thus was taken
as a more concerted attempt to deal with the
external situation than the February program.
The announcement of such a program only about
two months before national elections was also
taken by the market as an indication that the
Mexican authorities viewed the situation as increasingly serious. At the end of April, the
Federal Reserve received and granted a request
from the Banco de Mexico for a $600 million
drawing on the swap facility to meet month-end
liquidity needs.
In the weeks that followed, market concerns
focused on two closely linked issues. First,
whether the stabilization program would be implemented aggressively enough to redress the
serious internal and external imbalances and,
second, whether Mexico would be able to borrow enough on the international capital markets
to bridge the gap until the program had time to
work. With respect to the first issue, concern

Foreign Exchange Operations

arose that political pressures ahead of and even
after the July 4 national elections would force
postponement of key program elements, particularly the sharp price increases in domestic energy
and critical foodstuffs.
Through the late spring and early summer, it
became increasingly clear that Mexico was encountering considerable difficulty in rolling over
maturing foreign currency credits and raising
needed new cash. A "jumbo loan" of $21/2 billion
was floated in late May, about half of which was
new cash used to bolster foreign exchange reserves. The terms of the loan called for higher
interest rate spreads above the London interbank
offer rate (LIBOR) than had existed only a few
months before, but loan participations were slow
to sell outside the lead underwriting syndicate
despite the higher interest yield. A few weeks
later, Mexico successfully floated a Eurobond
issue, but only by offering a record interest yield
on such issues of ISV2 percent. At the same time,
private-sector borrowers also were experiencing
difficulties, particularly Grupo Industrial Alfa,
the large Mexican industrial conglomerate,
which earlier had suspended payments on its
international obligations. And again, at the end
of June, the Banco de Mexico requested and was
granted a $200 million drawing on its swap line
with the Federal Reserve to meet a temporary
liquidity need, with the funds taken down on
June 30 and repaid on July 1.
As the period drew to a close, signs appeared
that the April economic program was beginning
to take effect, although at the same time many
came to question whether the program was sufficient to restore external and internal balance
even if fully implemented. Imports had come
down sharply, partly in consequence of the Feb-




607

ruary devaluation, but also reflecting the April
import control program. While non-oil exports
had been sluggish to respond, oil exports on a
daily basis had rebounded to nearly the levels
originally targeted for all of 1982. On the domestic side, limitations on peso credit were showing
up in continuing interest rate increases. By late
July, rates on most short-term deposits had
climbed from just over 30 percent in February to
about 50 percent, high by historical standards in
Mexico but still well below the expected rate of
inflation. But the government expenditure reductions and price increases were proceeding less
rapidly than called for in the April program,
suggesting that the reduction of the fiscal deficit
in 1982 would be at best only about two-thirds of
the amount targeted in April.
Capital flight apparently tapered off somewhat
through late June and July, although downward
pressure on the peso in the exchanges continued.
However, with estimates of the inflation rate
progressively revised upward, market participants came to expect an acceleration in the
gradual peso depreciation or another major devaluation, and concern remained over the possibility of a renewal of significant speculative
pressure. Thus, it was clear that more time and
continued forceful government action would be
required before economic balance could be restored, with the implication that liquidity pressures would continue to be serious for some
time. At the end of July the peso had declined to
about Mex.$49 to the U.S. dollar. And, on the
final day of the period, Mexico again drew on its
swap line with the Federal Reserve to finance a
short-run liquidity need, taking down $700 million on July 30 and repaying the amount in full
the following business day.
•

609

Staff Studies
The staffs of the Board of Governors of the
Federal Reserve System and of the Federal
Reserve Banks undertake studies that cover a
wide range of economic and financial subjects.
In some instances the Federal Reserve
System
finances similar studies by members of the academic profession.
From time to time, papers that are of general
interest to the professions and to others are
selected for the Staff Studies series. These papers are summarized—or, occasionally,
printed
in full—in the FEDERAL RESERVE BULLETIN.

STUDY

SUMMARIES

FOREIGN SUBSIDIARIES

James

In all cases the analyses and conclusions set
forth are those of the authors and do not necessarily indicate concurrence by the Board of Governors, by the Federal Reserve Banks, or by the
members of their staffs.
Single copies of the full text of each of the
studies or papers summarized in the BULLETIN
are available without charge. The list of Federal
Reserve Board publications at the back of each
BULLETIN includes a separate section
entitled
"Staff Studies" that lists the studies that are
currently available.

V. Houpt

OF U.S.

and Michael

G.

BANKING

ORGANIZATIONS

Martinson—Staff,

Board

of

Governors

Prepared as a staff paper in mid-1982.

Whereas much attention has been given to the
recent increase in foreign ownership of U.S.
banks, the U.S. ownership of foreign banks and
financial institutions has gone largely unnoticed.
Indeed, many bank analysts ignore the role of
subsidiaries altogether and point solely to the
operations of foreign branches of U.S. banks to
indicate the level of the banks' foreign activity.
The data on foreign branches do, in fact, account
for most of the foreign assets of U.S. banks, but
they exclude the assets of the banks' subsidiaries, which by one measure exceed $83 billion.
This study discusses the growth trends and
activities of foreign subsidiaries of U.S. banks,
bank holding companies, and Edge corporations;
the roles these subsidiaries perform in the international operations of the parent organizations;
and the way they are supervised and regulated by
the Federal Reserve. The study is based on
annual financial data supplied by the foreign
subsidiaries, supplemented by information ob-




tained from examinations, on-site visits, applications, and other sources. Much of this type of
information is confidential for individual companies, but it has been sufficiently aggregated or
generalized to permit disclosure. Because many
of these statistics have not been previously released to the public, they should improve the
understanding of the structure and overseas activities of U.S. banks.
The study demonstrates that subsidiaries are
engaged in financial, bank-related activities, with
about two-thirds of the assets in foreign companies that are themselves basically commercial
banks. Other major activities of subsidiaries are
merchant banking, consumer finance, commercial finance, and leasing. Most subsidiaries are
located in Western Europe and offshore financial
centers, and 90 percent of the assets of foreign
subsidiaries are owned by ten large U.S. banking
organizations. The study identifies the major
subsidiaries by their principal functions and dis-

610

Federal Reserve Bulletin • October 1982

cusses both the banking and the nonbanking
companies. It shows that subsidiaries are an
integral part of the international financial networks of large U.S. banks, that their assets have

REDLINING:

RESEARCH

Glenn B. Canner—Staff,

increased tenfold during the last decade, and
that they are likely to continue to be a useful
vehicle for U.S. banks seeking to expand their
international banking capabilities.
•

AND FEDERAL LEGISLATIVE

Board of

RESPONSE

Governors

Prepared as a staff paper in mid-1982

Since 1975, the Congress has passed two legislative acts designed to encourage institutional
mortgage lenders—commercial banks, savings
and loan associations, credit unions, and mutual
savings banks—to help meet the housing credit
needs of the communities in which they are
chartered. The first, the Home Mortgage Disclosure Act (HMDA) of 1975, was enacted during a
ground swell of opposition to the alleged redlining activities of institutional mortgage lenders.
The second, the Community Reinvestment Act
(CRA), was passed in 1977. The CRA directed
four of the federal financial supervisory agencies—the Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, the Federal Home Loan Bank Board, and the
Federal Deposit Insurance Corporation—to use
their examinations and their reviews of applications by financial institutions to encourage these
institutions to help meet the credit needs of their
communities, including low- and moderate-income neighborhoods, in ways that are consistent
with safe and sound operation of the institution.
Whereas the HMDA relied on the force of public
disclosure to influence the loan policies of financial institutions toward certain sections of their
communities, the CRA placed responsibility for
promoting bank activity in these neighborhoods
on the regulatory agencies.
This paper focuses on the widespread research
that has analyzed the redlining issue. The review
describes the research methodologies, findings,
and limitations of each statistical approach. In
addition to the research, the paper discusses the
federal legislative response to redlining and examines issues related to the HMDA and the
CRA.
Studies of alleged redlining activities by depos-




itory institutions have shown wide disparities in
the number and dollar volume of conventional
mortgage loans extended to borrowers in different geographic areas. They also have shown that
in some neighborhoods mortgage finance is dominated by government-insured or governmentguaranteed contracts, and in others conventional
loans are predominant. In general the redlining
studies have found that variations in lender behavior toward borrowers in different geographic
areas can be traced to factors associated with
income variations, mortgage contract characteristics, lender specialization, property characteristics, neighborhood factors, and regulatory influences such as usury laws and mortgage
portfolio constraints. Anecdotal evidence and
information obtained from CRA analysis of bank
applications suggest that at times some lenders
have adopted mortgage loan policies that may
have restricted the flow of credit to certain
neighborhoods. However, the empirical studies
offer little evidence to indicate that any neighborhood has been simultaneously redlined by all
lenders, although some discrimination by individual institutions may exist.
The HMDA requires public disclosure of the
geographic distribution of home mortgage and
improvement loan extensions by federal depository institutions. Research indicates that the
HMDA data is useful both to banking regulators
in fair housing and CRA enforcement and to
community groups in supporting allegations of
unequal neighborhood treatment by lenders.
The CRA empowers the federal banking regulators to encourage the depository institutions to
serve the credit needs of their entire communities and to assess the degree to which they are
doing so. The act was not intended to impose

Staff Studies

bureaucratic credit allocation on the banking
system, a position the Federal Reserve Board
has reiterated on numerous occasions. However,
it may have that effect in practice because lenders, to avoid lengthy delays and possible denials
of bank applications, may choose to negotiate a
settlement with a particular community group.




611

The Federal Reserve has taken the position that
it will scrutinize carefully such agreements to
ensure that they are consistent with the safety
and soundness of the bank and that they do not
establish a preference for credit extensions that
is inconsistent with evenhanded treatment of
borrowers throughout the community.
•

612

Industrial Production
Released for publication October 15

second month, and output of defense and space
equipment continued to expand. At 137.3 percent of the 1967 average, the index for September is 10.8 percent below its recent peak in July
1981.
In market groupings in September, output of
consumer goods remained at its level in August,
as production of home goods and nondurable
consumer goods edged upward. Autos continued

Industrial production declined an estimated 0.6
percent in September, following a roughly similar drop in August. The decline in September was
concentrated in business equipment and in durable materials, while output of consumer goods
was unchanged on balance. Output of nondurable materials rose more than 1 percent for the
1967 = 100

1967 = 100

170

-TOTAL INDEX

Materials output

150
130

Annual rate, millions of units
18
14

i

-MANUFACTURING

/ ^

1976

1978

1980

1982

\

Products output

[

1969-70=100
180
140

170

1976

1978

l

l

i

Nondurable

Durable

\

1980

/

1982

All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: September.




613

1967 = 100

Percentage change from preceding month

1982

1982

Grouping
Aug."

Sept. e

May

June

July

Aug.

Sept.

Percentage
change,
Sept. 1981
to Sept.
1982

-.5

-.6

-9.4

-.8
-1.1
-1.0
-3.2
— .2
-1.9
.2
.5
.6
.0

-.4
-.4
.0
-.5
.1
-1.6
.8
-.1
.2
-.8

-6.7
-6.5
-2.3
-5.8
-1.1
-18.3
7.0
-7.2
-10.4
-13.6

-.4
-1.3
.6
-1.7
.5

-.6
-1.2
.3
-2.1
.3

-9.4
-12.8
-5.1
-20.2
.7

Major market groupings
Total industrial production

138.1

137.3

-.7

-.4

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

141.4
140.8
144.4
132.8
149.1
151.6
109.3
143.6
125.0
132.9

140.9
140.3
144.4
132.2
149.2
149.2
110.2
143.4
125.2
131.8

-.4
-.3
1.1
1.5
.9
-3.0
.5
-.8
-1.1
-1.4

-.1
-.1
.8
1.5
.6
-2.0
-.1
-.5
.7
-.6

.1
.3
.2
.8
1.9
.4
-1.3
1.4
.7
.9
-.5

Major industry groupings
137.7
124.3
156.9
118.2
168.4

Manufacturing
Durable
Nondurable
Mining
Utilities
p Preliminary.

e Estimated.

136.9
122.8
157.4
115.7
168.9

-.1
-.5
.2
-4.2
-.9

.4
.3
.4
-2.6
-1.1

NOTE. Indexes are seasonally adjusted.

to be assembled at the annual rate that had
prevailed in August—5.5 million units—but output of lightweight trucks for consumer use declined. Production of business equipment fell 1.6
percent in September, close to the average
monthly decline since the end of 1981. In September large declines occurred in production of
building and mining, manufacturing, and transit
equipment. Output of construction supplies
edged up in September, although somewhat less
than in each of the preceding three months.
Production of materials was curtailed 0.8 percent, reflecting a sharp reduction in durable
materials, particularly in parts for consumer




-.6
-.5
-.7
-3.9
-.1

goods and for equipment. Output of energy materials declined 1.5 percent as output of coal was
reduced mainly because of the rail strike. However, output of nondurable materials, such as
textiles, paper, and chemicals, increased 1.4
percent following a similarly large increase in
August.
In industry groupings, manufacturing output
was reduced 0.6 percent further in September
because of sharp cutbacks in durable goods
industries. Production in nondurable manufacturing continued to increase slightly as did utility
output. Mining output, however, was again reduced sharply.

614

Statements to Congress
Statement by Lyle E. Gramley, Member, Board
of Governors of the Federal Reserve
System,
before the Subcommittee
on Forests,
Family
Farms, and Energy of the Committee on Agriculture, U.S. House of Representatives,
September
16, 1982.
I am pleased to discuss with you the present state
of the housing and forest products industries and
the outlook for the future. My testimony will
review briefly the current economic and financial
situation, discuss the origins of the problems
facing housing and related industries, and indicate what I believe to be the appropriate course
for government policy in the period ahead.
The problems of the housing industry and
those that supply it are part of a broader economic malady. We must keep that carefully in mind
as we look for solutions. Quick fixes tailored to
specific industries could prove illusory, and
counterproductive over the longer term, if they
diverted us from attending to the broader policy
needs of the national economy.
We are now in the process of reversing an
inflation that began in the mid-1960s and that
steadily worsened until it threatened to bring
serious harm to our economic institutions. This
effort has imposed substantial costs in terms of
reduced output and employment, economic
hardships for individuals and families, and declining sales and profits for many businesses.
The credit-dependent housing industry and the
industries related to it clearly have suffered disproportionately. However, these industries
clearly have as much to gain as others—if not
more—from a successful effort to restore price
stability. We have made substantial progress
during the past two and a half years in reducing
inflation. Price stability, lower interest rates, and
a healthy economic recovery are all achievable.
We in the Federal Reserve will persist in our
policy of monetary discipline, and if the Congress and the administration are successful in
their efforts to reduce the deficit in the federal




budget, fiscal and monetary policy will be working together to defeat inflation.

THE CURRENT ECONOMIC

SITUATION

The nation has been in the grip of an economic
slowdown for some time. The recession began in
the housing and heavy durable goods industries,
but it has since become widespread among industries and geographic regions. Nevertheless,
those components of the economy most heavily
dependent on credit have been affected the longest and the most severely. By late last year,
housing starts had fallen to the lowest level since
World War II, and output in sectors closely
related to housing—such as the forest products
industry—has contracted sharply. The auto industry and producers of business capital equipment also have been hit hard.
The hardships resulting from high interest
rates have not stopped at our national borders.
High interest rates have had substantial adverse
effects on borrowers abroad, reflecting the increased economic interdependence of nations
and the growing integration of international capital markets.
The human costs of the recession have been
serious. The overall unemployment rate has
reached a post-World-War-II high of nearly 10
percent, or more than 10 million people. The fact
that the recession has been most severe in the
construction and durable goods industries means
that the burden of rising unemployment has been
relatively heavy on adult men, although joblessness among young and inexperienced workers
also is relatively high. In addition to those officially recorded as unemployed, hundreds of
thousands of discouraged workers who want
work have given up looking for jobs.
Economic and personal hardship has been
particularly severe in those areas of the country
where the most depressed industries are concentrated. Employment in the auto industry—which

615

is facing both cyclical and structural problems—
has fallen nearly a third during the past several
years; in July, the unemployment rate in Michigan was almost 15 percent. Because of the massive downswing in national housing activity,
scores of lumber mills have been closed or have
curtailed operations, and many thousands of
employees in the west and south—the areas in
which most of the nation's forest products are
produced—have been laid off or had their workweeks cut. In Washington and Oregon, for example, the number of persons employed in the
lumber industry during the second quarter of this
year was almost 30 percent below the level four
years earlier.
Economic and financial market developments
have taken a heavy toll on individuals and institutions in a wide range of other industries as
well. We have seen bankruptcy or reorganization
of a significant number of major corporations and
a large number of small businesses. Business
failures, in fact, have climbed to the highest
levels since the 1930s; even when measured
relative to the total number of concerns in operation, business failures are the highest in several
decades. And the substantial rise in market interest rates since 1978 has placed serious strains on
many financial institutions, particularly those
that traditionally have supplied the lion's share
of housing credit. Many thrift institutions that
relied on short-term deposit funds and made
long-term, fixed-rate mortgage loans have encountered severe earnings and net worth problems. Strenuous efforts by the regulatory agencies have been required to support capital
positions and to help arrange appropriate mergers and acquisitions of financially troubled firms.
About 300 mergers took place in the savings and
loan industry during 1981 and roughly 250 have
occurred so far this year, quite a few of which
were arranged or assisted by the regulators.
There is some evidence suggesting that the
recession of 1981-82 is now behind us. Real
gross national product increased somewhat in
the second quarter, when the rate of inventory
liquidation exercised less drag on the economy
than it had in the first three months of the year.
Moreover, the index of leading economic indicators has moved up for several months in a row.
Yet, there is little evidence so far that recovery
is under way. Labor markets continue to be



unusually weak; consumer spending remains
sluggish; and business fixed investment is declining substantially.
My judgment is that a pickup in activity is
likely to develop in the months ahead, bolstered
to a degree by the midyear tax cut and the effects
of the recent drop in market interest rates. History suggests, moreover, that some momentum
will develop once an upturn is in process. But the
toll of three years of financial and economic
stress will limit the pace of recovery for a while.
Business capital investment is perhaps the major
point of vulnerability. Current and planned outlays for plant and equipment have continued to
decline substantially; both domestic and export
markets are weak; capacity utilization is low;
temporary overbuilding of offices and stores has
appeared; operating profits of nonfinancial corporations have fallen to a postwar low; and the
illiquidity of many firms is likely to discourage
businesses from making long-term investment
commitments. Housing is not apt to contribute to
cyclical recovery to the extent that it has in past
upswings, at least not until long-term interest
rates decline considerably further. The overall
pace of expansion during the first several quarters of recovery, therefore, is apt to be a good
deal weaker than has been typical of other postwar recoveries from recession.

SOURCES OF THE

PROBLEMS

Two factors are primarily responsible for the
current condition of the general economy and the
credit-dependent sectors such as housing. The
first is the strong inflationary momentum that
built up over the past 15 years or so. The second
is the mix of public policies that has been in place
during much of the past several years.
Toward the end of the last decade, there was
fairly general recognition that inflation had been
allowed to get out of hand and that it was
seriously damaging our economy. Fighting inflation came to be recognized as the top priority for
economic policy. In late 1979, the Federal Reserve moved to ensure the monetary discipline
that was needed if inflationary pressures were to
be contained. Unfortunately, for a time the System carried on that battle largely alone. Large
and growing budget deficits created a serious

616

Federal Reserve Bulletin • October 1982

imbalance in fiscal policy, contributing to extraordinarily heavy pressures on financial markets and record interest rates.
Let me remind you of the serious state of the
federal budget at midyear 1982. Leaders from the
administration and the Congress agreed that,
under current law and assuming the President's
proposed defense buildup, the deficit in fiscal
1985 would exceed $230 billion if the economy
grew reasonably well—that is, at an average rate
of 4 percent a year—over the 1983-85 period.
The deficit in fiscal 1985 would then be about 5!/2
percent of GNP, by far the largest of any postwar
year. Since net private saving historically averages about 7 to 8 percent of GNP, a deficit of this
size would absorb roughly three-fourths of net
private saving, leaving precious little to finance
net private investment in business capital and
housing.
Even under the best of circumstances, bringing an end to an inflation that had gone on largely
unchecked for a decade and a half was bound to
be painful. But the threat that monetary and
fiscal policies might collide head on made it
doubly so.
Since midyear, interest rates on short-term
securities have come down dramatically, and
improvement has also occurred in those interest
rates that have such an important bearing on the
pace of economic activity—that is, on corporate
bond rates, mortgage rates, and the rates paid by
business borrowers at banks.
These developments reflect, in part, a recognition by financial market participants that the
recovery in economic activity likely to develop
over the rest of 1982 and on into 1983 will be
comparatively weak. They also stem, however,
from the improved prospects for budgetary discipline and a growing realization that monetary
restraint has contributed importantly to reduced
inflation.
In 1979 and 1980, the long-term trend rate of
price increase was probably in the neighborhood
of 10 percent. With food and energy prices rising
rapidly at that time, actual inflation rates were
above 12 percent. Since then, the underlying
trend rate of price rise has, I believe, been cut
nearly in half—largely because some moderation
has occurred in the rise of wages and salaries.
Improvements in productivity introduced by
business firms may also be helping to moderate



inflation. Moreover, we are benefiting on the
inflation front from the continued glut in world
oil markets, from the improvement in the value
of the dollar abroad, and from harvests of major
grain crops that will apparently be very abundant.
Slower inflation has helped to take pressure off
financial markets, by reducing demands for money and credit and by lowering the inflation premium contained in nominal interest rates. The
longer that improved price performance is maintained, the greater will be the confidence of
private market participants that a decisive downtrend in inflation is being achieved.
Sentiment in financial markets has also been
improved by evidence of the breakup of the
political logjam that appeared last spring to be
holding up progress on the budget. Passage of the
tax bill has not ended the need for concern about
federal deficits and the threat they contain for
financial markets and for private industries most
heavily dependent on credit. But its passage does
suggest that the clear and present danger of a
burgeoning deficit is widely recognized, and that
the process of reducing the government's absorption of credit is now under way.

FUTURE PROSPECTS

AND

POLICIES

Let me turn, next, to the policies that are most
likely to be successful in helping to restore health
to all major segments of our nation's economy.
The fight against inflation has been long and
arduous. A temptation exists, therefore, to become impatient, and to adopt a course of economic policies designed to encourage greater
strength of recovery in the near term. Declaring
the battle against inflation won would be premature. Inflationary expectations remain powerful,
despite recent progress on the price front, and
downgrading of the inflation problem as our top
priority could mean that the costs borne to this
point would have been largely wasted.
Indeed, I would argue that the single most
important thing government can do for the benefit of housing and related industries is to pursue
policies that will get rid of inflation once and for
all. Inflation produces the high interest rates that
cause ratios of monthly payments to borrower
income to rise to prohibitive levels during the

Statements

to Congress

617

early years of the home mortgage contract. Expectations of inflation also cause prices of houses
to shoot up faster than prices of consumer goods
and services, making it more difficult for firsttime home buyers to meet monthly payment and
downpayment requirements. During the latter
part of the 1970s, for example, average home
prices were rising at rates of nearly 20 percent
per year, roughly twice the pace for goods and
services generally or for personal income.
Inflation can be disastrous for rental housing, a
particularly important alternative for our less
affluent citizens. The production of apartment
structures for rent has been depressed for many
years, even as vacancy rates have fallen to
historic lows. Investors have been unwilling or
unable to take on the risks of rental projects for
which predicting returns is quite difficult, especially when local governments might abruptly
impose controls on the rents that can be charged.
We must have a sensible, coherent, and unambiguous set of federal policies to achieve a sustained economic recovery unhampered by resurgent inflation and heightened financial pressures.
The Federal Reserve is fully cognizant of the
need to follow policies that will permit a healthy
and sustained economic recovery. But we have
no intention of abandoning the basic monetary
discipline that is needed if we are to achieve that
goal. We recognize that excessive monetary
growth would simply embed inflation and inflationary expectations more deeply in the economic system, ultimately pushing long-term interest
rates to levels that would exacerbate the problems of housing and housing-related industries.

Our nation also badly needs actions to achieve
smaller "structural" federal deficits—that is, to
assure that deficits will decline as the economy
recovers. The congressional budget resolution
was a welcome show of determination to achieve
a sounder fiscal policy, and the recent tax bill
was a concrete step toward implementing the
needed budgetary restraint. But a great deal
more needs to be done as the economy expands.
Indeed, even if the objectives of the budget
resolution are fully reached, the deficit appears
likely to be higher in the next several fiscal years
than in the current year, despite the fact that the
economy will be expanding. Of course, some of
the deficit in fiscal year 1983 will reflect the
economic weakness this year and the time required merely to regain lost ground. But abstracting from those factors, a structural deficit
problem would remain to be dealt with, even if
all the deficit-reducing measures in the budget
resolution were enacted.
If we do not take strong steps to deal with this
budget problem, continuing federal deficits will
preempt an excessive share of net saving generated by the private sector and, in the process,
place renewed pressures on credit markets when
the economy starts expanding. This prospect, of
course, also influences the attitudes of both
borrowers and lenders, limiting the decline in
long-term rates of interest needed now by creditdependent sectors such as homebuilding. A credibly firmer budget posture is needed to promote
confidence that fiscal and monetary policies are
working together in fighting the battle against
inflation.
•

Statement by Henry C. Wallich, Member, Board
of Governors of the Federal Reserve
System,
before the Subcommittee
on Commerce, Consumer and Monetary Affairs of the Committee on
Government Operations, U.S. House of Representatives, September 30, 1982.

tion to the growing tide of foreign interest in
investing in our banking system. That interest, as
I mentioned then, reflected the growing internationalization of banking, which had been manifested earlier by the movement abroad by U.S.
banks. In the past two years, foreign investment
has continued at significant levels, though perhaps not so intensely. By the middle of this year,
134 banks were controlled by foreign banking
organizations and other foreign investors, or
about 35 more than when I last testified. These
134 banks account for approximately 5!/2 percent
of domestic banking assets.

This is the third time I have been privileged to
appear before this subcommittee to present the
views of the Board of Governors on the subject
of foreign investment in U.S. banks. On those
previous occasions in 1979 and 1980, some especially large acquisitions had drawn public atten


618

Federal Reserve Bulletin • October 1982

The invitation for the Board to be represented
at these hearings asked that the testimony treat
several specific points: first, the performance of
foreign-owned banking institutions; second, Federal Reserve policy on the supervision of foreign
bank holding companies; third, the procedures
followed by the Board in processing applications
by foreigners to invest in U.S. banks; and finally,
the issues that were present in recent, specific
applications.

THE PERFORMANCE OF
BANKING
INSTITUTIONS

FOREIGN-OWNED

In the past two years, there has been an increase
in foreign acquisitions of large U.S. banking
organizations such as Crocker National Corporation, Financial General Bankshares, and LITCO
Bancorporation. I shall come back to these acquisitions later. Significant interest has also been
shown in smaller institutions, notably in Florida
and California.
These acquisitions and investments have occurred recently and, indeed, some are currently
in process. It is yet too soon, therefore, to
attempt to draw any firm conclusions about the
performance of these banking organizations under their new owners. A s the subcommittee is

aware, the Board and the other bank regulatory
agencies have been monitoring on a continuous
basis the behavior and performance of foreignowned banking organizations. The most recent
overall review by the Board staff was completed
last year, and I have attached it to this statement
for the subcommittee's information. 1
The principal conclusions of the review may
be summarized as follows:
1. Before their acquisition, the banks generally had lower earnings and lower equity ratios
than other banks in their peer group.
2. After acquisition, earnings generally improved, though not fully to peer-group levels,
while equity ratios were raised to peer levels as a
result of infusions of capital by the new owners.
3. The business orientation of the acquired
banks did not change materially. Somewhat less
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.




emphasis on retail lending as a proportion of the
total was evident as a result of greater diversification of the lending portfolio.
4. Within the total group, the greatest improvement in earnings and the largest increases
in capital took place at banks acquired by foreign
individuals; however, the earnings base of these
banks was low before acquisition.
These generalizations are based on a review of
banks acquired by foreign interests and not those
established de novo by foreigners. They are also
based on information through 1980. However,
partial data for 1981 support these findings.
Supervisory experience forms another aspect
of the performance of foreign-owned banking
organizations. As you know, direct supervisory
responsibility is shared at the federal level among
the Office of the Comptroller of the Currency,
with responsibility for national banks; the Federal Reserve, with responsibility for state member
banks and bank holding companies; and the
Federal Deposit Insurance Corporation, with responsibility for all other insured banks. The
Federal Reserve has supervisory responsibility
for 12 state member banks that are owned by
foreigners and for 67 foreign-owned bank holding
companies. We have direct knowledge of and
experience only with these foreign-owned institutions. However, we do keep in close touch
with the other banking agencies about their supervisory experience with foreign-owned banks
under their jurisdictions. Specific material on the
supervisory experience has been filed by the
three agencies with the subcommittee. Here, I
should like to confine my remarks to some
general observations about that experience.
Supervisory experience may be judged in several ways. One way is according to the condition
of the banking institution because the ultimate
objective of bank supervision is the promotion of
sound and healthy banks. Another way is the
record of compliance by the banking institution
with the laws and regulations to which it is
subject.
On the first measure, evidence has already
been cited that the equity ratios and earnings of
banks acquired by foreigners generally showed
improvement. Further evidence is available from
the ratings assigned by the supervisory agencies
on the basis of examination reports. In response

Statements

to your request, the three banking agencies prepared and transmitted to the subcommittee a
summary table of the ratings of a sample of
banks. Of the 52 banks in the sample, 40 had
strong composite ratings for financial soundness
of one or two. Only 5 were rated unsatisfactory,
and some of these had been weak when acquired
by foreign investors.
The record of compliance is more difficult to
measure. There is probably not a bank in the
United States whose examination report does
not cite violations of law and regulations. Most
of these violations are technical and most are
immediately corrected, usually during the examination itself. Foreign-owned banks have proved
no different in this regard. A supervisory problem exists only when serious violations occur or
when a pattern of violations is recurring. This
situation may be cause for a cease-and-desist
order or some other supervisory action. On this
basis, our experience has been—and I believe
this is shared by the other agencies—that the
compliance record of foreign-owned banks
equals that of similar domestically owned banks.

SUPERVISION OF
FOREIGN BANK HOLDING

COMPANIES

Under the law, responsibility for the supervision
of bank holding companies has been assigned to
the Board. That responsibility includes all bank
holding companies whether domestically or foreign owned.
Of the 134 U.S. banks controlled by foreign
interests, 84 are held through corporations.
These corporations are required to become bank
holding companies and fall under the direct supervisory jurisdiction of the Board. Within this
group of 84 banks, 60 are owned by foreign
banking organizations and the remainder by individual investors.
The Board outlined its approach to the supervision of foreign bank holding companies in a
policy statement issued in February 1979. The
central theme of that statement is that the
Board's primary concerns are with the operations and activities conducted in the United
States and that our supervisory efforts would be
so directed. The Board's interest in the foreign
parent organization or in the foreign owners lies



to Congress

619

principally in their capability to be a continuing
source of strength to the banking operations in
the United States.
Since that statement appeared three and a half
years ago, the Board has implemented it in
several ways. First, before approving the establishment of a foreign bank holding company, the
Board assures itself about the financial and managerial resources of the foreign organization.
Applicants are required to furnish extensive information so as to enable the Board to render a
judgment that those resources are sufficient to
provide support to the U.S. subsidiary bank. The
same requirements apply to domestic applicants.
Also, foreign supervisory authorities are contacted about the financial condition and the reputation of the applicant.
Second, the Board has established annual reporting requirements through which foreign bank
holding companies submit information permitting an appraisal of the financial condition of the
foreign organization on a continuing basis. The
requirements also serve for assessing compliance
with regulations governing U.S. operations of
foreign banking organizations.
Third, a reporting system has been put in place
that monitors transactions between the U.S.
bank and the foreign parent organization on a
quarterly basis.
Fourth, foreign bank holding companies are
required to report any nonbank activities commenced in the United States and the authority
under which they are undertaken. The committee staff has seen copies of the reports that have
been filed with the Board.
A primary supervisory tool in the case of
domestic bank holding companies is the examination or inspection process. The examination
process is also an important supervisory tool in
the case of foreign bank holding companies,
although the ways in which this tool is employed
necessarily differ. The foreign organization itself
is not inspected, because it is located outside the
jurisdiction of the United States. For information
about the foreign organization, reliance is placed
on the reports just mentioned and on relationships with foreign supervisory authorities. Nor is
there a system of regular inspections of nonfinancial subsidiaries in the United States. As you
know, under the law, foreign banking organizations may have indirect subsidiaries in the Unit-

620

Federal Reserve Bulletin • October 1982

ed States that engage in nonfinancial activities of
kinds not permitted domestic bank holding companies, provided certain conditions are met. Because the Board is not responsible for the condition of the foreign banking organization and its
activities, financial and nonfinancial, outside the
United States, interest in any indirect nonfinancial activities in the United States is limited to
compliance with regulation. When the U.S. bank
is held by an intermediate U.S. holding company, that company and its nonbank subsidiaries
will be inspected, as necessary, on the same
terms as a domestic bank holding company. The
subsidiary banks are, of course, examined by the
relevant bank supervisory agency, and the Board
relies on the examination reports prepared by
those agencies to monitor the condition of those
institutions.
For the most part, foreign bank holding companies are foreign banking organizations. As
such, they are usually the major banks in their
home countries; they are supervised by foreign
banking authorities; and they have a recognized
reputation in the international marketplace.
These banks acknowledge that they are guests in
this country and are anxious to remain in good
standing by adherence to the rules and regulations to which they are subject. For these reasons, the Board has not been confronted with
serious problems in supervising the U.S. activities of these companies.
By contrast, when U.S. banks are controlled
by foreign individuals, certain supervisory problems do arise. One relates to the initial entry of
the foreign investors in seeking to acquire or
establish a bank. Another relates to the supervision of the continuing operations of those banks,
once they have been acquired. However, these
problems also exist when domestic individuals
acquire banks.
On the question of entry, the principal problem
is ascertaining the financial strength and reputation of the would-be foreign owners. This is a
problem faced by the Office of the Comptroller of
the Currency when foreign investors seek to
charter a national bank and by the various state
authorities when a state banking charter is
sought. The problem is also encountered in all
three federal banking agencies under the Change
in Bank Control Act when a foreign investor
seeks approval to acquire more than 10 percent



of an existing bank and becomes the largest
single shareholder. The relevant banking agency
has to determine the investor's condition and
status. The ability to make such a determination
is necessarily complicated by distance and differences in foreign conditions and standards.
On the question of continuing supervision,
there is the problem of assuring that the bank is
managed well and that it is not used for the
benefit of the foreign owners to the detriment of
the condition of the bank. Individual investors,
by comparison with banking organizations, may
not have the same interest in preserving their
banking reputations. The first line of defense on
this point is to limit entry to persons of undoubted integrity and banking experience. On the
whole, as described earlier, the banks owned by
foreign individuals have been managed well and
have posed few supervisory problems. However,
there have been exceptions, one being the American Bank and Trust Company situation in New
York several years ago, when a foreign investor
abused the bank to his own benefit. The subcommittee is familiar with that unfortunate experience, which illustrates the need for vigilance in
the examination process when dealing with
banks owned by individuals, whether domestic
or foreign.

FEDERAL RESERVE PROCEDURES
APPLICATION
ACQUISITIONS

ON

I should now like to turn to a description of how
the Board handles applications by foreigners to
acquire U.S. banking organizations.
The Bank Holding Company Act provides
several criteria that the Board is required to
consider in judging applications to form bank
holding companies: (1) the financial and managerial resources of the acquiring company and the
bank to be acquired; (2) the future prospects of
each; (3) the convenience and needs of the
community to be served; and (4) the effects of the
proposal on competition. Similar criteria are to
be considered by the banking agencies under the
Change in Bank Control Act. These criteria
apply to both foreign and domestic acquirers.
When an application is received by the Federal
Reserve from foreign banking organizations or
foreign individuals to form a bank holding com-

Statements

pany, the same general procedures are followed
and the same general information is required as if
domestic organizations or domestic individuals
were involved. Also, a concerted effort is made
to obtain additional information that will permit
an evaluation of the foreign banking organization
viewed against the environment in which it operates in its home country. Foreign individuals are
required to submit financial statements and other
information sufficient to assess their ability to
manage a banking organization and to stand
behind the acquired bank. Contact is usually
made with the appropriate foreign supervisory
authority about the condition and reputation of
the foreign applicant. When a foreign banking
organization is involved, this procedure is in
keeping with the broad agreement reached
among the central banks and bank supervisory
authorities of the Group of Ten countries and
Switzerland that foreign banks operating within
their territories should be adequately supervised
institutions in their home countries and that the
home country supervisors shall supervise the
activities of their banks on a consolidated basis.

SOME RECENT MAJOR

ACQUISITIONS

I propose now to comment on three recent major
acquisitions as requested in your letter to testify.
The cases are the following: (1) the acquisition of
Crocker National Corporation by Midland Bank
Limited; (2) the acquisition of Financial General
Bankshares by a group of Middle Eastern investors; and (3) the acquisition of LITCO Bancorporation by Banca Commerciale Italiana. My
remarks will be confined to the highlights of each
case. More details are contained in the Federal
Reserve Board's orders approving the acquisitions, which I should like to submit for inclusion
in the record.

Crocker

National

Corporation

In early 1981, Midland Bank Limited, one of the
major London clearing banks, applied to acquire
a majority interest in Crocker National Corporation, whose principal subsidiary bank and principal asset is Crocker National Bank. At the time,



to Congress

621

Midland Bank had total deposits of $55 billion
and was the third largest bank in the United
Kingdom. Crocker National Bank had total assets of $19 billion and was the fourth largest bank
in California and the twelfth largest in the United
States.
Under the proposal, Midland Bank would immediately acquire 51 percent of the stock of
Crocker National Corporation with the intention
of ultimately acquiring 57 percent. The end result
of the acquisition would be an infusion of $495
million in new capital into the Crocker National
Corporation. At the time of the application,
Midland Bank had no operating banking presence in the United States. Its only representation
was as a part owner of European American Bank
and Trust Company, a consortium bank in New
York owned by six banks from different European countries.
Although the acquisition of a large U.S. bank
was involved, virtually no issues were presented
by the application under the criteria specified in
the Bank Holding Company Act. The application
indicated no adverse competitive factors because
Midland Bank had no direct banking operations
in California or elsewhere in the United States.
Midland Bank was in strong financial condition,
and its reputation as an international bank was
undoubted. The proposed capital infusion was
regarded as a factor that weighed in favor of
approval.
In approving the bank acquisition, the Board
also had to consider the other activities of the
Midland Bank organization in the United States
and their consistency with the requirements of
the Bank Holding Company Act. As a result, the
Board order approving the bank holding company formation required that Midland divest its 20
percent interest in European American Bank on
the grounds that retention would be inconsistent
with the policy underlying section 3(d) of the act.
Under that section, bank holding companies are
effectively barred from acquiring more than 5
percent of the shares of a bank in another state.
The Board also denied an exemption from the
prohibitions of section 4 of the act for the activities of the U.S. subsidiary of Thomas Cook
Limited. That company provides retail and
wholesale travel services in the United States, an
activity that the Board has found to be not
closely related to banking.

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Federal Reserve Bulletin • October 1982

Financial

General

Bankshares

Financial General Bankshares is a multistate
bank holding company with 12 banks located in
the District of Columbia and the states of Maryland, New York, Tennessee, and Virginia. In
November 1978, the first applications to acquire
this holding company were made by Credit and
Commerce American Holdings of the Netherlands Antilles and Credit and Commerce American Investment of the Netherlands. The two
applicant companies were formed by a group of
individual investors from several Middle Eastern
countries for the purpose of the acquisition. A
protracted process ensued. The proposed acquisition was at first opposed by existing management of Financial General and its subsidiary
banks. Moreover, two of the state banking supervisors involved (Virginia and Tennessee) recommended denial on the grounds that the acquisition would be detrimental to the convenience and
needs of the communities served. In addition,
the Attorney General of the state of Maryland
issued an opinion that Maryland state law precluded a Maryland banking institution from being
subject to an "unfriendly" affiliation. In these
circumstances, the Board dismissed the first
applications on the grounds that it was prohibited
from approving a proposal that would violate
state law.
These complications were subsequently resolved, and a new application was filed in November 1980. Whereas a number of technical
issues remained, the principal issue for the Board
then became the identity of the purchasers, their
reputation and their financial strength, and what
those attributes meant for the future operations
of the bank holding company.
The Middle Eastern investor group consisted
of fourteen individuals and companies from Saudi Arabia, the United Arab Emirates, and Kuwait. The group included eight individuals, three
personal holding companies, two governmentowned companies, and one private company. In
the course of processing the application, a meeting was held at the Board's offices, which was
attended by representatives of the investor
group, counsel for the applicants, representatives of the state banking departments involved,
and the Comptroller of the Currency. The information developed at this meeting became part of



the record on which the Board based its decision.
In making that decision, the Board took special
care to review the financial resources of all the
investors. The information submitted demonstrated that all the investors possessed sufficient
financial resources to make the acquisition and
to provide future support if needed.
The financial factors relating to the acquisition
of Financial General were considered to be consistent with approval. So far as management was
concerned, the investors did not propose to take
an active role themselves. Rather, they proposed
to have all the director and top management
positions filled by qualified Americans. The
Board carefully reviewed the composition of the
proposed board of directors of Financial General
and the proposed senior management and was
satisfied about their qualifications.
The Board approved the acquisition on August
25, 1981. The transaction was consummated in
April 1982, and the name of the organization was
subsequently changed to First American Bankshares.

LITCO

Bancorporation

In December 1981, Banca Commerciale Italiana
(BCI) applied to the Board to acquire LITCO
Bancorporation of New York, a bank holding
company owning all of the shares of Long Island
Trust Company. Long Island Trust Company
had about $1.1 billion in assets, and its business
orientation was primarily directed toward domestic business in the metropolitan New York
area. BCI was the second largest bank in Italy
and had consolidated assets of about $34.5 billion. BCI conducted a wholesale banking business in the United States through branches in
New York and Chicago and an agency in Los
Angeles. BCI is indirectly owned by the Italian
government through a government holding company, Istituto per la Ricostruzione Industriale.
In this case, as with the Midland-Crocker
acquisition, there were few issues under the
statutory factors prescribed in the Bank Holding
Company Act. The Board found that the acquisition would have no significantly adverse effects
on the concentration of banking resources or on
existing or potential competition. BCI had made
a commitment to inject $20 million of foreign

Statements

capital into LITCO and to maintain LITCO
among the more strongly capitalized institutions
in the United States. As for BCI itself, the Board
made its evaluation on the basis of its policy
statement on supervision of foreign bank holding
companies that takes a number of factors into
account in judging the financial and managerial
resources of a foreign banking organization. In
addition to its financial condition, these factors
included the record and integrity of management,
the bank's standing and role in its home country,
and the opinion of the home country regulators.
Having considered these factors, the Board concluded that the financial and managerial resources of BCI were satisfactory.
During the Board's consideration of this case,
several issues emerged that stemmed from the
fact that BCI is indirectly owned by the government of Italy. The four largest banks in Italy are
nationalized institutions. All conduct banking
operations in several states in the United States.
The Italian government also operates a number
of nationalized industries and commercial enterprises, many of which have subsidiaries in the
United States.
The specific question that arose in these circumstances was how foreign governments or
governmental entities should be treated under
the Bank Holding Company Act. Should they be
subject to the same provisions as a private company, or is a different treatment warranted?
The principle of national treatment is the basic
government policy toward foreign banks and is
embodied in the International Banking Act of
1978. The essence of that principle is that foreign
banking organizations and their owners be treated the same as their domestic counterparts. The
Bank Holding Company Act, which governs the
activities of domestic banking organizations, has
among its purposes the prevention of conflicts of
interest and undue concentration of resources.
These objectives are intended to help ensure that
banks in the United States serve as effective and
impartial credit intermediaries. To this end, the
act provides that a private company cannot own
a U.S. bank and also own companies in the
United States that engage in industrial and commercial activities. Also, a private company cannot, as a general rule, own and operate banks in
more than one state. These rules apply to all
private companies, domestic or foreign, although



to Congress

623

for foreign private companies exceptions are
allowed for indirect interests in the U.S. operations of foreign commercial and industrial companies. Application of these rules would mean
that a foreign government could not indirectly
own banks in more than one state. Similarly, a
foreign government that indirectly owned a bank
in the United States would have to conform its
nonbanking activities in the United States to
those permissible to a privately owned foreign
banking organization. Failure to apply these
rules to foreign government-owned banks, it can
be argued, would give those organizations advantages over their privately owned counterparts
and thus would be inconsistent with the principle
of national treatment.
Distinctions can be drawn between private and
government ownership, and these distinctions
may form a basis for differences in treatment.
The Bank Holding Company Act presumes that
all banks and nonbank companies under common
ownership and control are operated as an integrated whole. That presumption stems from the
act's objectives of avoiding conflicts of interest
and undue concentration of resources when
banking and nonbanking activities are combined
under common control and management. This
presumption also reflects experience, especially
in the United States, that private companies do
operate in this way.
Foreign countries that have nationalized banks
and other enterprises have done so for a variety
of historical and policy reasons. Some foreign
governments do operate, and in fact have good
policy reasons for so operating, the nationalized
banks and nationalized businesses as separate
entities. However, conditions vary from country
to country and may change over time within a
country with changes in political philosophy or in
other circumstances. This diversity highlights
the difficulty of establishing a policy suitable to
all situations that avoids making arbitrary distinctions among countries.
The act provides little guidance on these questions. It expressly exempts from its application
organizations owned by the federal government
or state governments. However, it is silent on the
status of foreign governments.
The question of applying the act to foreign
governments is not concerned with the activities
they conduct within their own territories or out-

624

Federal Reserve Bulletin • October 1982

side the United States. It is solely concerned
with those activities that extend into the United
States. Applying the act to foreign governments
even in that more limited sense has broad implications that extend beyond the purely regulatory
issues. For example, strict application of the
limitation on nonbanking activities could preclude banks owned by foreign governments from
engaging in banking activities in the United
States. This could raise important questions in
the fields of U.S. foreign relations and U.S.
foreign investment and economic policy.
Before the BCI case, the Board had approved
a number of applications to form bank holding
companies by foreign banks that were government owned and when the foreign government
indirectly had commercial and industrial activities in the United States. In those cases, the
Board did not apply the act to the applicant's
government owners. After careful consideration,
and pending further examination of the issues
outlined here, the Board decided to continue the
previous practice in the BCI case.
In approving the application, the Board recognized that the act is concerned not only with
problems of actual conflicts of interest or concentration of resources but also with the potential for those problems. For this reason, the
Board in its order highlighted its belief that the
issues associated with foreign government ownership should be brought to the attention of the
public for further discussion and debate. Because of the complexity and far-reaching implications of these issues, some of which I have tried
to convey, the Board stated in its order that they
should be resolved in a congressional framework
in which all the relevant considerations could be
examined and weighed.
In recognition of the potential conflicts in the
BCI case, the Board decided that the banking
and nonbanking organizations owned by the Italian government were affiliates of LITCO. As a
consequence, the limitations on the amount and
the collateral requirements of section 23A of the
Federal Reserve Act would apply to extensions
of credit by LITCO to these affiliates. The Board
believed that the application of section 23A to




this situation would help limit the potential for
practices conflicting with the purposes of the
Bank Holding Company Act.

CONCLUSION

To sum up, foreign interest in establishing and
expanding banking operations in the United
States continues unabated. Most of those operations will continue to be conducted through
branches and agencies, but a reasonable expectation is that foreigners will also seek to acquire or
establish subsidiary banks. The involvement of
foreign banks in our banking system and foreign
investment in U.S. banks have benefited the
United States, and I believe that they will continue to do so.
In this statement I have tried to identify the
problems associated with foreign investments in
U.S. banks and to place these problems in perspective. On the whole, the performance of
foreign-owned banks has been satisfactory, and
supervisory problems have not been serious. As
foreign involvement in the banking system increases, new problems and new issues will surely
emerge. This calls for continuous monitoring of
developments and the adaptation of supervisory

requirements to them.
In discussing the BCI case, I devoted a large
amount of time to the issue of the treatment of
foreign governments and of entities owned by
foreign governments under the Bank Holding
Company Act. This issue is extremely complex,
and the questions that arise in evaluating the
issue are very difficult. The Board has not
reached any firm conclusions on these issues and
is not prepared to make legislative recommendations at this time. For this reason, the Board
welcomes these hearings as contributing to the
public discussion of these issues that it believes
desirable. We hope that the discussion will evoke
thoughtful and constructive consideration by the
Congress, other government agencies, foreign
banking authorities, and the banking community
both here and abroad.
•

625

Announcements
REGULATION

D:

AMENDMENTS

The Federal Reserve Board has announced final
approval of a change—from lagged to contemporaneous reserve requirements (CRR)—in the
way depository institutions maintain reserves.
The change, which will be made as amendments to Regulation D (Reserve Requirements of
Depository Institutions), are effective February
2, 1984. At that time, medium-sized and larger
depository institutions will begin posting reserves on transaction accounts with a two-day
rather than the current two-week accounting
delay. [Transaction accounts include checking,
negotiable order of withdrawal (NOW), automatic transfer, and share draft accounts.] Reserve
requirements on nontransaction liabilities will be
met on a lagged basis.
The Board acted after consideration of comment received on proposals published in November 1981, and after extensive staff study during
the past several years. The Board decided in
principle on June 28, 1982, to adopt contemporaneous reserve requirements on transaction deposits, but left open for later decision the questions of an effective date and whether reserve
periods for different sets of institutions should be
placed on a staggered basis, with half the institutions settling every other week. The Board has
decided against staggering settlement periods.
Contemporaneous reserve requirements are
expected to improve the implementation of monetary policy to a degree by strengthening the
linkage between reserves held by depository
institutions and the money supply. The Board
noted that sizable slippages will remain between
reserves and money, because short-run flows are
inherently volatile.
Under the present lagged reserve system, depository institutions must post their required
reserves in any given week based on their deposit levels two weeks earlier.
The effective date was placed 16 months ahead
to give both Reserve Banks and the depository



institutions that will maintain reserves on the
new basis enough time to make the adjustments
required in their administrative and data processing procedures.
As adopted by the Board, the principal features of CRR, set forth below, are for the most
part those proposed in November 1981:
1. Contemporaneous reserve requirements
will apply only to institutions reporting their
deposits on a weekly basis. (Certain institutions
with $15 million or less in total deposits report
deposits and calculate required reserves quarterly, and certain others, with reservable liabilities
under $2 million, will be exempt from reserve
requirements on enactment of legislation now
awaiting the President's signature [H.R. 6267]).
2. Reserves will be maintained over two-week
periods that will continue to end on a Wednesday.
3. All institutions subject to CRR will settle
their reserve accounts on the same day.
4. Required reserves will be computed on the
basis of average deposits over a two-week computation period ending on Monday. Reserves
required to be posted against transaction accounts will be maintained in the two-week period
ending on Wednesday, two days after the end of
the computation period. The two-day interval
provides time for calculation of required reserves.
5. Required reserves for other liabilities
against which reserves must be held—such as
certain kinds of time deposits—will also be computed on the basis of average deposits over a
two-week period ending on Monday, but the
reserves required will be posted in the 2-week
maintenance period beginning 17 days later, on a
Thursday.
6. Vault cash eligible to be counted as reserves will be equal to vault cash holdings during
the computation period ending 17 days before the
beginning of the maintenance period.
7. To assist depository institutions in implementing CRR the Board adopted transition peri-

626

Federal Reserve Bulletin • October 1982

ods for the carryover of reserve balance deficiencies or surpluses. During the first six months
following the start of CRR, reserve surpluses or
deficiencies that may be carried over into the
next reserve period will equal the greater of 3
percent of the daily average level of required
reserves (including required clearing balances),
or $25,000. During the next six months, the
permissible carryover will equal the greater of
2Yi percent of daily average required reserves, or
$25,000. Thereafter, the carryover is the greater
of 2 percent of daily average required reserves,
or $25,000.
The Board approved two other amendments to
Regulation D as follows:
1. The dates on which nonmember depository
institutions phasing in to the reserve requirements of the Monetary Control Act over an
eight-year period will be moved back one week,
so as to avoid falling in the middle of a reserve
maintenance period under the CRR schedule.
2. Depository institutions with less than $15
million in deposits and that are not subject to
CRR will continue to have a one-week maintenance period, with settlement day on Wednesday. Their computation week each quarter will
be shifted back two days from Wednesday to
Monday to align with the computation period of
institutions subject to CRR.

REGULATION

E:

AMENDMENTS

The Federal Reserve Board has announced
adoption of amendments to its Regulation E
(Electronic Fund Transfer), effective October 12,
1982. The Board acted after consideration of
comment received on proposals published in
March.
The amendments, which are intended to reduce regulatory burdens without giving up significant consumer protection, call for the following:
1. An exemption from the regulation, for financial institutions whose assets do not exceed
$25 million, of preauthorized transfers by government agencies and private corporations.
2. An exemption from the need to disclose, on
terminal receipts, the type of account involved in
an automated teller machine transaction, when
only a single account can be accessed.
3. An exemption from the requirement to pro


vide a periodic statement for each account when
a transfer is made between accounts of the same
consumer in the same institution.
4. Modifications to the requirements for documentation and error resolution procedures for
transfers initiated outside the United States.

REVISED

CAPITAL ADEQUACY

CRITERIA

The Federal Reserve Board has reaffirmed, with
one substantial change, its criteria adopted in
May (see BULLETIN, June 1982, pages 361-62)
for determining whether debt securities with a
mandatory requirement for future conversion to
equity can qualify as part of the primary capital
of state member banks and bank holding companies.
The Board began applying the criteria immediately after adoption, but invited comment from
the public. The amendment of the criteria was
adopted after consideration of comment received. It applies only to securities issued after
September 27, 1982. The Comptroller of the
Currency is announcing similar amendment of
these criteria, for national banks.
The amendment limits the issue of equity
commitment notes to 10 percent of primary capital, exclusive of mandatory convertible issues.
The Board left unchanged the requirement that
equity notes and equity commitment notes together may not make up more than 20 percent of
such primary capital of a banking organization.
Certain technical revisions were also made.
Equity commitment notes and equity notes are
the two forms in which mandatory convertible
debt has been issued recently by banking organizations.
The Board placed a cap on equity commitment
notes to encourage banking institutions to rely
more on equity notes in issuing mandatory convertible securities. The Board's view is that there
is greater assurance that equity notes will be
transformed into equity by the time of maturity
than is the case with equity commitment notes.
Equity commitment notes are issued with an
undertaking by the issuer to sell sufficient equity
during the life of the notes—up to 12 years—to
build up a fund to liquidate the notes at maturity.
Their transformation into stock may thus depend
on circumstances over a considerable period.

Announcements

In contrast, the contract attached to issues of
equity notes obligates the holder of the notes to
buy common or perpetual preferred stock of the
issuer at a specified price at or before maturity of
the notes, thus making conversion of the debt to
equity almost certain.
In view of its desire to encourage the growth of
equity in the primary capital of banking organizations, the Board therefore views equity notes
as a more desirable form of primary capital.
The Board's revised criteria are as follows:
Provisions Applicable to Both Types of
Mandatory Convertible Securities
1. The securities must mature in 12 years or less.
2. The aggregate amount of mandatory convertible
securities that will be included for regulatory purposes
for evaluating capital adequacy cannot exceed 20
percent of primary capital other than mandatory convertible securities.1
3. The issuer may redeem securities prior to maturity only with the proceeds of the sale of common or
perpetual preferred stock of the bank or bank holding
company or with the approval of its primary supervisor.
4. The holder of the security cannot accelerate the
payment of principal except in the event of bankruptcy, insolvency, or reorganization.
5. The security must be subordinate in right of
payment to all senior indebtedness of the issuer. In the
event that the proceeds of the security are reloaned to
an affiliate, the loan must be subordinated to the same
degree as the original issue.

Provisions Applicable Only to Securities
Mandatory Stock Purchase Contracts

with

1. The stock purchase contract can be separated
from a security and held separately only if the holder
of the contract provides sufficient collateral to the
issuer, or to an independent trustee for the benefit of
the issuer, to assure performance under the contract.2
1. In addition, for regulatory analysis of capital adequacy
the aggregate amount of securities payable from the sale of
common or perpetual preferred stock cannot exceed 10
percent of primary capital other than mandatory convertible
securities. See last paragraph of these criteria.
2. Collateral is defined as cash or certificates of deposit;
U.S. government securities that will mature prior to or
simultaneously with the maturity of the equity contract and
that have a par or maturity value at least equal to the amount
of the holder's obligation under the stock purchase contract;
standby letters of credit issued by a U.S. bank that is not an
affiliate of the issuer; or other collateral as may be designated
from time to time by the regulators.




627

2. The stock purchase contract must require the
purchase of either common or perpetual preferred
stock.

Provisions Applicable Only to Securities
Payable from the Sale of Common or
Perpetual Preferred Stock
1. The securities indenture must contain the following two provisions:
• The issuer will establish an identifiable and segregated fund solely from the sale of common or perpetual preferred stock, the proceeds of which will be the
sole source of repayment for the securities.
• By the time that one-third of the life of the
securities has run, the issuer must have paid into the
fund an amount equal to one-third of the original
principal of the securities. By the time that two-thirds
of the life of the securities has run, the issuer must
have paid into the fund an amount equal to two-thirds
of the original principal of the securities. At least 60
days prior to the maturity of the securities, the issuer
must have paid into the fund an amount equal to the
entire original principal of the securities. Payments
into the fund must come only from the sale of common
or perpetual preferred stock. 3
2. If the issuer fails to meet any of these periodic
funding requirements, its supervisor immediately will
cease to treat the unfunded securities as primary
capital.
3. If a security is issued by a subsidiary of a bank or
bank holding company, any guarantee of the principal
by that subsidiary's parent bank or bank holding
company must be subordinate to the same degree as
the security issued by the subsidiary and limited to
repayment of the principal amount of the security at its
final maturity.
4. For regulatory analysis of capital adequacy, the
aggregate amount of securities payable from the sale of
common or perpetual preferred stock cannot exceed
10 percent of primary capital other than mandatory
convertible securities.

REGULATION

Z: REVISED

COMMENTARY

The Federal Reserve Board has made public a
revision of its official staff commentary on Regulation Z (Truth in Lending).
The revision of the staff commentary, which
applies to and interprets the requirements of
Regulation Z, was effective September 17, 1982.
However, creditors have the option of continuing to rely on the existing Regulation Z commen3. The funded portions of the securities will be deducted
from primary capital to avoid double counting.

628

Federal Reserve Bulletin • October 1982

tary until April 1, 1983, when reliance on the
revised commentary becomes mandatory. The
new commentary is based on Regulation Z as
revised April 1, 1981, under the Truth in Lending
Simplification Act of 1980.
The commentary was revised after consideration of comment received on proposals in May
of this year. This is the first of expected periodic
revisions of the commentary to update it as
significant new questions arise about the application of the regulation to specific transactions.
The commentary is intended to substitute for
individual Board and staff interpretations. Reliance upon it is a defense against suit.
Changes in the commentary are generally in
the direction of providing more flexibility, while
preserving basic consumer protection. Changes
generally have been made only when necessary
to respond to significant questions that have
arisen since the commentary was first issued, or
to clarify language.
Issues dealt with in the revised commentary
include the following:
1. The use of the creditor's commercial lending rate as the base rate in variable-rate open-end
credit plans.
2. Application of the finance charge rules to
the offering of cash discounts in the sale of motor
vehicle fuel.
3. Prepayment disclosures in transactions involving prepaid finance charges.
4. Disclosures for several types of mortgage
financing plans, including growth equity mortgages and graduated-payment adjustable-rate
mortgages.

REGULATION

L:

AMENDMENT

The Federal Reserve Board on September 29,
1982, announced adoption of an amendment to
its Regulation L (Management Official Interlocks) that implements the Depository Institutions Management Interlocks Act, to reflect
changes in the act recently adopted by the Congress.
The Interlocks Act prohibits certain interlocking relationships among officials of financial institutions, including depository holding companies
and their affiliates.
The amendment permits—under a grandfather



clause of the act—a management official to continue in an interlocking relationship for the entire
10-year grandfathered period provided by the
act, despite certain changes in circumstances,
such as a merger of an institution involved in an
interlock. The amendment also permits a management official serving both a depository and a
nondepository institution to continue in both
positions although the nondepository institution
becomes a savings and loan holding company.

DATA ON PAST-DUE

LOANS

The three federal bank regulatory agencies—the
Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency—announced on September 15, 1982, that all FDIC-insured commercial
banks will begin reporting data on past-due and
other nonperforming loans at the end of the year.
For national banks, the new report will replace a
past-due loan schedule that has been submitted
to the Comptroller's Office for some years.
The Office of Management and Budget has
granted the agencies approval to collect data in
the form of a new supervisory supplement to the
reports of condition and income (call reports)
filed by all federally insured banks with federal
regulators. The new information will be collected
quarterly beginning with the December 31, 1982,
reports and will be made available to the public
beginning with the June 30, 1983, reports.
The agencies originally had hoped to institute
the new supplement beginning September 30,
1982. However, the delay until December is
needed to give reporting banks more time to
prepare for the new requirements. The delay
until the mid-1983 reports in making the information available to the public will permit time to
resolve problems that may arise in the reporting
and processing of the data.
The agencies said reports such as the new
supplement are critically important to their efforts to upgrade their off-site computerized monitoring systems and thus reduce the burden
placed on banks in on-site examinations. Improvements in such systems, the regulators said,
not only will help improve their surveillance of
banks but will also lower their costs and reduce
the overall burden on banks.

Announcements

In addition to providing better current data to
bank regulators, the information should be of
benefit to the depositing public and to other bank
creditors and to bank investors. The agencies
noted that public disclosure of this type is in line
with an increased emphasis on marketplace discipline and bank deregulation. They also noted
that, under the securities laws, registered bank
holding companies already disclose similar types
of information.
In commenting on this and other changes in
the call report mandated by the Federal Financial
Institutions Examination Council, a number of
banks and banking organizations said they recognized the regulators' need for additional information but they objected to the structure of some of
the revisions. In response, the agencies indicated
that they are prepared to meet with representatives of the banking industry to explore structural alternatives.

MEETING OF CONSUMER
COUNCIL

ADVISORY

The Federal Reserve Board has announced that
its Consumer Advisory Council met on October
27 and 28, 1982.
The Council, with 30 members who represent
a broad range of consumer and creditor interests,
advises the Board on its responsibilities regarding consumer credit protection legislation and
regulation at quarterly meetings.

TRUTH IN LENDING

and 5, dealing respectively with credit billing and
consumer leases.

NEW

PUBLICATION

The Annual Statistical Digest, 1981, is now
available. This one-year Digest is designed as a
compact source of economic—and especially financial—data. The object is to lighten the burden
of assembling time series by providing a single
source of historical continuations of the statistics
carried regularly in the FEDERAL RESERVE BULLETIN. The Digest also offers a continuation of
series that formerly appeared regularly in the
BULLETIN, as well as certain special, irregular
tables that the BULLETIN also once carried. The
domestic nonfinancial series included are those
for which the Board of Governors is the primary
source.
This issue of the Digest covers only 1981
unless data were revised for earlier years. It
serves to maintain the historical series first published in Banking and Monetary Statistics, 194170, and the Digest, 1970-1979 and 1980. A Concordance of Statistics will be included with all
orders. It serves as a guide to tables that cover
the same material in the current and the most
recent annual Digest, the ten-year Digest for
1970-79, and the BULLETIN.
Copies of the Digest are available from Publications Services, Board of Governors of the
Federal Reserve System, Washington, D.C.
20551. The price is $6.50 per copy.

EXEMPTIONS
REVISED

The Federal Reserve Board has granted exemptions, effective October 1, 1982, from certain
parts of the federal Truth in Lending Act to the
states of Massachusetts, Oklahoma, and Wyoming.
Exemptions from certain requirements of the
Truth in Lending Act were granted on the
grounds that consumer credit protection laws
and enforcement in these states met the standards of the act for exemptions. All three states
sought and received exemption from chapter 2 of
the act, which pertains to credit transactions.
Massachusetts and Oklahoma requested and received additional exemptions from chapters 4



629

OTC STOCK

LIST

The Federal Reserve Board has published a
supplement to its list of over-the-counter (OTC)
stocks that are subject to its margin regulations,
effective October 18, 1982. The supplement
should be used in conjunction with the list of
OTC margin stocks that was effective July 26,
1982.
Changes that have been made in the list, which
now includes 1,577 OTC stocks, are as follows:
73 stocks have been included for the first time; 10
stocks previously on the list have been removed
for substantially failing to meet the requirements
for continued listing; and 21 stocks have been

630

Federal Reserve Bulletin • October 1982

removed for reasons such as the companies
being listed on a national securities exchange or
being acquired by another firm. The supplement
is available on request from Publications Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.

PROPOSED

ACTIONS

The Federal Reserve Board has proposed for
public comment an amendment to Regulation T
(Credit by Brokers and Dealers) that would specify the characteristics of private mortgagebacked securities that may be used as collateral
for margin credit at securities brokers. Comment
should be received by October 29, 1982.
The Federal Reserve has also proposed
changes in Regulation L (Management Official
Interlocks) that would accomplish the following:
1. Simplify procedures for obtaining exceptions to the act and extensions of time to permit
compliance with the act.
2. Ease the burden of the act on depository
institution holding companies by redefining certain terms.
3. Entirely exclude from the prohibitions of
the act management officials whose functions
relate exclusively to retail merchandising and
manufacturing.
4. Broaden the circumstances under which the
exception to the prohibitions of the act is available on grounds of disruptive management loss.
5. Clarify the circumstances that require termination of nongrandfathered management official interlocks.
The Board will receive comment on the proposed changes in Regulation L for at least 30
days after their publication in the Federal Register.
The Federal Reserve Board has also deter-




mined that time deposits linked to a line of credit
on which checks or similar third-party transfers
can be drawn are subject to the reserve requirements of transaction accounts.
The Board made the rule—a temporary
amendment to Regulation D (Reserve Requirements of Depository Institutions)—effective October 7,1982, but requested comment by December 3, 1982, on its technical aspects pending
adoption on a permanent basis.

PETITION REGARDING
ARRANGEMENTS

SWEEP

The Federal Reserve Board has announced that
it is scheduling an informal hearing before the
Board's staff to gather information and give
interested parties an opportunity to express their
views in connection with a petition to the Board
by the Securities Industry Association to prohibit the operation of sweep accounts by member
banks. The hearing is scheduled for November 3
and 4, 1982, at the Board's offices in Washington, D.C. Comment may also be submitted in
writing.

SYSTEM
MEMBERSHIP:
ADMISSION OF STATE BANKS

The following banks were admitted to membership in the Federal Reserve System during the
period September 11 through October 10, 1982:
Delaware
Wilmington
Texas
Arlington
Canton

Chemical Bank (Delaware)
Commonwealth Bank
of Arlington
Traders State Bank

631

Record of Policy Actions of the
Federal Open Market Committee
Meeting Held on August 24, 1982
1. Domestic Policy Directive
The information reviewed at this
meeting suggested that real GNP
would advance only a little further in
the current quarter, following an increase at an annual rate of about 1 lA
percent in the second quarter. Average prices, as measured by the fixedweight price index for gross domestic business product, were continuing to rise more slowly than in
1981.
The nominal value of retail sales
rose 1 percent in July, according to
the advance report, recovering only
part of the 3!/4 percent decline recorded in June. Sales of new domestic automobiles, which had dropped
to an annual rate of 4.8 million units
in June, rose a little in July and early
August.
The index of industrial production
was about unchanged in July, following a cumulative decline of more
than 10 percent from the prerecession level in July 1981. Production of
business equipment continued to
drop at its recent pace of 2 to 3
percent per month, while output of
defense and space equipment continued to expand. Output of consumer
goods picked up, reflecting mainly
an increase in automobile assemblies, but automobile output in July
was at a rate substantially above the
sales pace of June and July, and
production schedules for August
were cut back.
Nonfarm payroll employment, after declining sharply in June, was
essentially unchanged in July, as
continued job losses in manufacturing were about offset by gains in
trade and service industries. The unemployment rate rose 0.3 percentage



point to 9.8 percent, as the civilian
labor force expanded and total civilian employment was unchanged.
Private housing starts rose 34 percent in July, more than reversing the
decline in June; but at an annual rate
of 1.2 million units, starts remained
low by historical standards. All of
the July increase was in multifamily
units; starts of such units more than
doubled, in part because of an upsurge in those qualifying for rental
subsidies under a federal government program terminating on September 30. That impending termination also apparently contributed to a
substantial rise in July in newly issued permits for multifamily units;
permits for single-family dwellings
declined slightly and were at about
the same pace as in the second quarter as a whole. Combined sales of
new and existing homes in June continued about 25 percent below those
of a year earlier.
The producer price index for finished goods and the consumer price
index both rose 0.6 percent in July,
following increases of 1.0 percent in
June. At the producer level, prices
of energy-related items increased
sharply in both months and in July
accounted for nearly all of the rise in
the index; prices of food and food
materials fell substantially in July.
At the consumer level, food prices
edged down in July, while increases
in energy prices and homeownership
costs moderated from the rapid rates
recorded in June. Over the first seven months of the year, the producer
price index for finished goods and
the consumer price index rose at
annual rates of about 3 percent and
5V2 percent respectively, compared
with increases of about 7 percent
and 9 percent in 1981. The advance

632

Federal Reserve Bulletin • October 1982

in the index of average hourly earnings also was considerably less rapid
through July than during 1981.
In foreign exchange markets the
trade-weighted value of the dollar
against major currencies, while fluctuating over a wide range, had
changed little on balance since late
June despite a sharp decline in U.S.
interest rates relative to foreign
rates. The strength of the dollar in
the face of narrowing interest rate
differentials apparently reflected
concerns of market participants
about economic and financial difficulties abroad. The U.S. foreign
trade deficit in the second quarter
was somewhat below the first-quarter deficit, reflecting primarily a substantial drop in petroleum imports;
the total of other imports rose somewhat and exports were about unchanged.
At its meeting on June 30-July 1,
the Committee had agreed to seek
behavior of reserve aggregates associated with growth of Ml and M2
from June to September at annual
rates of about 5 percent and about 9
percent respectively. It had also decided that somewhat more rapid
growth would be acceptable depending on evidence that economic and
financial uncertainties were leading
to exceptional liquidity demands.
Moreover, the Committee had noted
that seasonal uncertainties, together
with increased social security payments and the initial impact of the
tax cut on cash balances, might lead
to a temporary bulge in the monetary
aggregates, particularly Ml. The intermeeting range for the federal
funds rate, which provides a mechanism for initiating further consultation of the Committee, was set at 10
to 15 percent.
Ml in fact declined slightly in
July, following declines in May and
June, as demand deposits continued
to contract and growth in currency
slowed further. Growth of M2, after
moderating in June from a rapid pace
in previous months, accelerated
again in July. Small-denomination
time deposits increased sharply dur


ing the month, and shares in money
market mutual funds continued to
expand at a relatively strong pace; in
contrast, savings deposits at all depository institutions declined substantially after growing moderately
during earlier months of the year.
Total credit outstanding at U.S.
commercial banks grew at an annual
rate of about 6V2 percent in July, well
below the pace in the first half of the
year. Growth in business loans
slowed in July, but generally strong
business demands for short-term
credit were reflected in an increase
in loans booked at foreign branches
of U.S. banks and in a sharp acceleration in issuance of commercial
paper by nonfinancial businesses. Issuance of publicly offered bonds
rose in July.
Nonborrowed reserves expanded
relatively rapidly in July. However,
with the demand for reserves weak,
in part reflecting the sluggishness of
Ml, adjustment borrowing by depository institutions (including seasonal
borrowing) declined from an average
of about $1.1 billion in June to about
$330 million in the two statement
weeks ending August 18.
Market interest rates had declined
sharply over the period since the
last Committee meeting. Short-term
market rates fell 4 to 6 percentage
points. The federal funds rate, for
example, declined from around 1416
percent at the end of June to about
10 percent in the statement week
ending August 18 and to around 9
percent in the days immediately preceding this Committee meeting.
Bond yields declined about PA to 2
percentage points. A substantial part
of the decline in long-term rates occurred in an unusually strong rally in
debt markets around mid-August,
when record price increases also occurred in the stock market. The
strength of the downward movement
in interest rates apparently reflected
a shift in market sentiment about the
outlook for interest rates against the
background of strains in financial
markets, relatively weak economic
indicators, and legislative action on

Record of Policy Actions of the Federal Open Market Committee 70

the federal budget. Over the intermeeting interval, the prime rate
charged by commercial banks on
short-term business loans was lowered from I6I/2 percent to W/2 percent. In conjunction with the decline
in short-term market rates, the Federal Reserve discount rate was reduced in three steps from 12 percent
to 101/2 percent over the period. In
home mortgage markets, average
rates on new commitments for fixedrate conventional loans at savings
and loan associations declined about
Vi percentage point on balance.
The staff projections presented at
this meeting suggested that real GNP
would grow at a moderate pace over
the year ahead but that the unemployment rate would remain near its
recent high level. Inflation, as measured by the fixed-weight price index for gross domestic business
product, was expected to pick up
somewhat over the months ahead
from the substantially reduced pace
in the first half of 1982, but continued improvement in the underlying
trend was anticipated.
In the Committee's discussion of
the economic situation and outlook,
several members commented that
the timing of an economic recovery
was subject to considerable uncertainty, but no member expressed
disagreement with the general character of the staff projection. As at
other recent meetings, some Committee members suggested that the
principal risks of a deviation from
the projection were on the down
side. Reference was made to the
growing expressions of concern in
the business community and to financial strains being experienced by
many business firms, financial institutions, and others. In this situation,
spending might well remain weak in
key sectors of the economy. Business capital spending was cited as
especially vulnerable to remaining
depressed, particularly in the event
of renewed upward pressure on
long-term interest rates. On the other hand, it was observed, continued
success in the fight against inflation



would over time ease pressures in
long-term debt markets, improve
business confidence, and strengthen
business capital spending.
Some members commented that
to date the midyear reduction in federal income taxes and the concurrent
cost-of-living increase in social security payments appeared to have
had little impact on consumer spending. The view was expressed, however, that the midyear tax actions
were likely to exert a positive influence on a delayed basis. It was also
noted that the recently reduced levels of interest rates, if they were
sustained, would help to relieve financial pressures throughout the
economy and thereby contribute to
improvement in economic activity
over the months ahead.
At its meeting on June 30-July 1,
the Committee had begun a review
of the monetary growth objectives
for the period from the fourth quarter of 1981 to the fourth quarter of
1982 that it had set in early February. Subsequently, at a meeting on
July 15, the Committee had reaffirmed those objectives, which included ranges of Vh to 51/2 percent
for M l , 6 to 9 percent for M2, and
6'/2 to 9'/2 percent for M3. The associated range for bank credit was 6 to
9 percent. At the same time the
Committee agreed that growth in the
monetary and credit aggregates
around the top of the indicated
ranges would be acceptable in the
light of the relatively low base period
for the Ml target and other factors,
and that it would tolerate for some
period of time growth somewhat
above the target range should unusual precautionary demands for money
and liquidity be evident in the light
of current economic uncertainties.
The Committee also indicated that it
was tentatively planning to continue
the current ranges for 1983 but that it
would review that decision carefully
in the light of developments over the
remainder of 1982.
At this meeting the Committee reviewed the short-run objectives that
it had established at the previous

71 Federal Reserve Bulletin • October 1982

meeting calling for expansion at annual rates of about 5 percent for Ml
and about 9 percent for M2 over the
three months from June to September. Data available through mid-August indicated that growth in Ml was
running below the Committee's objective, while partial data suggested
that growth in M2 had moved above
the objective for the three-month
period. In relation to the Committee's objectives for the year as a
whole, the latest staff estimates indicated that the expansion of Ml was
within its longer-run range, while
that of M2 was somewhat above its
1982 range.
During the Committee's discussion, most of the members agreed
that the short-run growth objectives
adopted at the previous meeting remained appropriate under current
economic and financial conditions
and should be retained. The view
was expressed that the substantial
recent decline in interest rates,
which in part reflected growing public awareness of the progress that
had been made in curbing inflation,
provided welcome relief in easing
financial strains throughout the
e c o n o m y . A number of m e m b e r s e x -

pressed concern, however, about
the volatility of interest rates and
some commented that further sharp
movements in either direction over
the near term might have damaging
consequences. Some members emphasized that a pronounced increase
from current levels would aggravate
financial strains and inhibit recovery
in interest-sensitive sectors of the
economy. Some members also suggested that a large further decline
might foster a resurgence of inflationary expectations and could
prove to be unsustainable and therefore unsettling to financial markets.
Several members expressed the
view that the Committee should review its policy if reserve provision to
meet monetary growth objectives
was fostering a substantial change in
pressures on bank reserve positions
and in credit markets.
Reference was made to the rela


tive strength in M2 over the course
of recent weeks that appeared to be
related in part to unusual demands
for liquid investments, such as money market funds, at comparatively
attractive yields. The members
agreed that under prevailing circumstances, growth in M2 somewhat
above its short-run target would be
acceptable over the period immediately ahead.
At the conclusion of the discussion the Committee agreed to reaffirm the objectives for monetary
growth established at the June 30July 1 meeting for the June to September period. The Committee decided that somewhat more rapid
growth in the monetary aggregates
would be acceptable depending upon
evidence that economic and financial uncertainties were fostering unusual liquidity demands for monetary assets and were contributing to
substantial volatility in interest
rates. The intermeeting range for the
federal funds rate, which provides a
mechanism for initiating further consultation of the Committee, was set
at 7 to 11 percent.
The following domestic policy directive was issued to the Federal
Reserve Bank of New York:
The information reviewed at this meeting suggests only a little further advance
in real GNP in the current quarter, following a relatively small increase in the
second quarter, while prices on the average are continuing to rise more slowly
than in 1981. In July the nominal value of
retail sales rose somewhat from a sharply reduced June level; housing starts
increased substantially, though from a
relatively low rate; and industrial production and nonfarm payroll employment were essentially unchanged. The
unemployment rate rose 0.3 percentage
point to 9.8 percent. Over the first seven
months of the year the advance in the
index of average hourly earnings was
considerably less rapid than during 1981.
The weighted average value of the
dollar against major foreign currencies,
while fluctuating over a wide range, has
changed little on balance since late June
despite a sharp decline in U.S. interest
rates relative to foreign rates. Demand
for dollars appeared to reflect concern
about economic and financial difficulties
abroad. The U.S. foreign trade deficit in

Record of Policy Actions of the Federal Open Market Committee

the second quarter was somewhat below
the first-quarter deficit, with petroleum
imports down substantially.
Ml declined slightly in June and July,
while growth of M2 moderated somewhat from its average pace earlier in the
year. Business demands for credit, especially short-term credit, remained generally strong. Market interest rates have
declined sharply since around midyear,
reflecting a shift in market sentiment
about the outlook for interest rates
against the background of strains in financial markets, relatively weak economic indicators, and legislative action
on the federal budget. The Federal Reserve discount rate was reduced in three
steps from 12 percent to 10'/2 percent
during the period.
The Federal Open Market Committee
seeks to foster monetary and financial
conditions that will help to reduce inflation, promote a resumption of growth in
output on a sustainable basis, and contribute to a sustainable pattern of international transactions. At its meeting in
early February, the Committee had
agreed that its objectives would be furthered by growth of M l , M2, and M3
from the fourth quarter of 1981 to the
fourth quarter of 1982 within ranges of
2XA to 5VI percent, 6 to 9 percent, and 6VI
to 9VI percent respectively. The associated range for bank credit was 6 to 9
percent. The Committee began a review
of these ranges at its meeting on June 30July 1, and at a meeting on July 15, it
reaffirmed the targets for the year set in
February. At the same time the Committee agreed that growth in the monetary
and credit aggregates around the top of
the indicated ranges would be acceptable
in the light of the relatively low base
period for the Ml target and other factors, and that it would tolerate for some
period of time growth somewhat above
the target range should unusual precautionary demands for money and liquidity
be evident in the light of current economic uncertainties. The Committee also indicated that it was tentatively planning to
continue the current ranges for 1983 but
that it would review that decision carefully in the light of developments over
the remainder of 1982.
In the short run, the Committee continues to seek behavior of reserve aggregates consistent with growth of Ml and
M2 from June to September at annual
rates of about 5 percent and about 9
percent respectively. Somewhat more
rapid growth would be acceptable depending on evidence that economic and
financial uncertainties are leading to exceptional liquidity demands and changes
in financial asset holdings. The Chairman may call for Committee consultation if it appears to the Manager for



Domestic Operations that pursuit of the
monetary objectives and related reserve
paths during the period before the next
meeting is likely to be associated with a
federal funds rate persistently outside a
range of 7 to 11 percent.
Votes for this action: Messrs.
Volcker, Solomon, Balles, Black,
Ford, Mrs. Horn, Messrs. Martin,
Partee, Rice, and Mrs. Teeters. Vote
against this action: Mr. Wallich. Absent and not voting: Mr. Gramley.

Mr. Wallich dissented from this
action because he favored an approach to operations early in the
period that would lessen the chances
of short-term interest rates remaining below the prevailing discount
rate or falling further below it. He
was concerned that such interest
rate behavior would tend to accelerate monetary expansion and that
the necessary restraint of reserve
growth to curb such expansion might
lead to a sizable rebound in shortterm rates with adverse implications
for business and consumer confidence.
2. A u t h o r i z a t i o n f o r F o r e i g n
Currency Operations
At this meeting Committee members
were apprised of the status of ongoing discussions with the Government
of Mexico regarding short-term financing arrangements to support
Mexico's efforts to strengthen its
economic and financial position. At
its meeting on June 30-July 1, the
Committee had agreed, in response
to a request by officials of the Bank
of Mexico, that it would stand ready
to provide to the Bank of Mexico up
to the full $700 million available under the Federal Reserve System's
existing swap arrangement with that
Bank. Subsequently, on August 4,
1982, the Bank of Mexico, which
had drawn on its swap line on an
overnight basis on a few occasions in
recent months, drew $700 million for
a period of three months.
At the time of this meeting, negotiations were under way among Mexico, the U.S. Treasury, major central
banks, and other lenders to provide

635

636

Federal Reserve Bulletin • October 1982

multilateral financial support to
Mexico. The purpose of the support
was to effect an orderly transition to
an economic stabilization program
that the Government of Mexico had
announced was being developed.
The Committee authorized Federal
Reserve participation in the proposed multilateral financing package
through the temporary establishment of a special swap arrangement
of $325 million with the Bank of
Mexico in addition to the regular
arrangement of $700 million. Accordingly, paragraph 2 of the Committee's authorization for foreign
currency operations was amended,
effective August 28, 1982, for the
period through August 23, 1983, to
read as follows:
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
Regular
Special
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
Bank for International Settlements
Dollars against Swiss francs
Dollars against authorized European
currencies other than Swiss francs




250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
700
325
500
250
300
4,000
600
1,250

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.
Votes for this action: Messrs.
Volcker, Solomon, Balles, Black,
Ford, Mrs. Horn, Messrs. Martin,
Partee, Rice, Mrs. Teeters, and Mr.
Wallich. Votes against this action:
None. Absent and not voting: Mr.
Gramley.

On August 30, 1982, the U.S.
Treasury and the Federal Reserve
announced that they were participating with central banks of other
Group of Ten countries, Spain, and
Switzerland, under the aegis of the
Bank for International Settlements,
in making available to the Bank of
Mexico short-term financing totaling
$1.85 billion. The Treasury would
provide $600 million though the Exchange Stabilization Fund, in conjunction with the $325 million that
the Federal Reserve was making
available through its additional swap
arrangement. The multilateral financing program provided that
drawings by Mexico would be made
in line with progress toward agreement b e t w e e n t h e M e x i c a n G o v e r n -

ment and the International Monetary
Fund (IMF) on an economic adjustment program that will permit Mexico to qualify for drawings under the
IMF's Extended Fund Facility.

637

Legal Developments
AMENDMENTS

TO REGULATION

A

Federal Reserve Bank of—

The Board of Governors has amended its Regulation
A, Extensions of Credit by Federal Reserve Banks
(12 CFR Part 201), for the purpose of adjusting discount rates with a view to accommodating commerce
and business in accordance with other related rates
and the general credit situation of the country. The
action was taken to bring the discount rate into better
alignment with short-term market interest rates.
Effective on the dates specified in the text of the
regulation, sections 201.51 and 201.52 of Regulation A
are amended as set forth below:

Part 201—Extensions of Credit by Federal
Reserve Banks
Section 201.51—Short Term Adjustment Credit
for Depository Institutions.
The rates for short term adjustment credit provided to
depository institutions under § 201.3(a) of Regulation
A are:

Federal Reserve Bank of—
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Rate
10
10
10
10
10
10
10
10
10
10
10
10

10
10
10
10
10
10
10
10
10
10
10
10

Effective
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.

27,
27,
27,
30,
27,
27,
27,
27,
27,
27,
27,
27,

1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.

(b) The rates for other extended credit provided to
depository institutions under sustained liquidity pressures or where there are exceptional circumstances or
practices involving a particular institution under
§ 201.3(b)(2) of Regulation A are:

Federal Reserve Bank of—
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Rate
10
10
10
10
10
10
10
10
10
10
10
10

Effective
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.

27,
27,
27,
30,
27,
27,
27,
27,
27,
27,
27,
27,

1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.

Effective
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.

27,
27,
27,
30,
27,
27,
27,
27,
27,
27,
27,
27,

1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.
1982.

Section 201.52—Extended Credit to Depository
Institutions.
(a) The rates for seasonal credit extended to depository institutions under § 201.3(b)(1) of Regulation A
are:




Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco

Rate

Note. These rates apply for the first 60 days of borrowing. A 1
percent surcharge applies for borrowing during the next 90 days, and a
2 percent surcharge applies for borrowing thereafter.

AMENDMENTS

TO REGULATION

Q

The Board of Governors has amended Regulation Q—
Interest on Deposits (12 CFR Part 217) to permit
member banks to issue all time deposits in book-entry
form as an alternative to issuing certificates of deposit
in definitive form. The Board also adopted technical
amendments to conform Regulation Q to actions taken
by the Depository Institutions Deregulation Committee.
Effective September 1, 1982, the Board amends
Regulation Q (12 CFR Part 217) as follows:

638

Federal Reserve Bulletin • October 1982

Part 217—Interest on Deposits
1. Section 217.1 is amended by revising paragraph (b),
by removing paragraphs (c) and (d) and reserving
them, by removing footnotes 2 and 3 and renumbering
the remaining footnotes accordingly, and by revising
paragraph (h) to read as follows:

Section 217.1—Definitions.

(b)(1) "Time deposit" means
(i) a deposit that the depositor does not have a
right to withdraw for a period of 14 days or more
after the date of deposit. "Time deposit" includes
funds:
(A) Payable on a specified date not less than 14
days after the date of deposit;
(B) Payable at the expiration of a specified time
not less than 14 days after the date of deposit;
(C) Payable upon written notice which actually
is required to be given by the depositor not less
than 14 days before the date of repayment;1 or
(D) Such as "Christmas club" accounts and
"vacation club" accounts, that are deposited
under written contracts providing that no withdrawal shall be made until a certain number of
periodic deposits have been made during a
period of not less than three months even
though some of the deposits may be made
within 14 days from the end of the period;
(ii) A n " i n t e r n a t i o n a l b a n k i n g f a c i l i t y t i m e d e p o s it;" and

(iii) A deposit or account issued pursuant to
12 CFR 217.7(1) or 1204.121, including those with
an original maturity or notice period of seven to 13
days.
(2) A time deposit may be represented by a transferable or nontransferable, or a negotiable or nonnegotiable, certificate, instrument, passbook, statement
or otherwise. A time deposit evidenced by a certificate or instrument is payable only upon presentation
of the certificate or instrument. A time deposit
established in statement, book-entry, or other form
must be evidenced by a written agreement and
deposits must be confirmed by issuance of a receipt
or advice.
(c) [Reserved].

•A deposit with respect to which the bank merely reserves the right
to require notice of not less than 14 days before any withdrawal is
made is not a "time deposit" within the meaning of the above
definition.




(d) [Reserved].

(h) Obligations issued by the parent bank holding
company of a member bank.
(1) For the purposes of this part, the "deposits" of a
member bank also include an obligation that is (i)
issued in a denomination of less than $100,000; (ii)
required to be registered with the Securities and
Exchange Commission under the Securities Act of
1933; (iii) issued or guaranteed in whole or in part as
to principal or interest by the member bank's parent
which is a bank holding company under the Bank
Holding Company Act of 1956, as amended
(12 U.S.C. 1841-1850), regardless of the use of the
proceeds; and (iv) issued with a stated maturity,
notice period or redemption period of less than VA
years.
(2)(i) Effective April 1, 1983, this paragraph is
amended by striking the term "3'/2 years" wherever
it appears and inserting in its place the term "2'/2
years", (ii) Effective April 1, 1984, this paragraph is
amended by striking the term "2'/2 years" wherever
it appears and inserting in its place " 1V2 years",
(iii) Effective April 1, 1985, this paragraph is amended by striking the term "P/2 years" wherever it
appears and inserting in its place "6 months", (iv)
Effective March 31, 1986, this paragraph is amended
by striking the term "6 months" wherever it appears
and inserting in its place "14 days".
(3) The term "deposits" does not include those
obligations of a bank holding company that are
subject to interest rate limitations imposed pursuant
to Pub. L. 89-597.

2. Section 217.3 is amended by revising paragraph (f)
to read as follows:

Section 217.3—Interest on time and savings
deposits.

(f) No interest after maturity or expiration of notice.
After the date of maturity of any time deposit, such
deposit is a demand deposit, and no interest may be
paid on such deposit for any period subsequent to such
date. After the expiration of the period of notice given
with respect to the repayment of any time deposit or
savings deposit, such deposit is a demand deposit and
no interest may be paid on such deposit for any period
subsequent to the expiration of such notice, except
that, if the owner of such deposit advises the bank in
writing that the deposit will not be withdrawn pursuant
to such notice or that the deposit will thereafter again

Legal Developments

be subject to the contract or requirements applicable
to such deposit, the deposit will again constitute a time
deposit or savings deposit, as the case may be, after
the date upon which such advice is received by the
bank. On each certificate, passbook, or other document representing a time deposit, the bank shall have
printed or stamped a conspicuous statement indicating
that no interest will be paid on the deposit after the
maturity date or, in the case of a time deposit that is
automatically renewable, a conspicuous statement indicating that the contract will be renewed automatically upon maturity, and indicating the terms of such
renewal, Provided, however, that a member bank may
provide in any time deposit contract that if the deposit,
or any portion thereof, is withdrawn not more than
seven calendar days after a maturity date (one business day for deposits authorized by section 217.7(1)),
interest will be paid thereon at the originally specified
contract rate. A member bank may specify in the time
deposit contract that interest will be paid at any other
lower rate. However, in no event may the rate specified be less than the current rate paid on savings
deposits by the member bank.

3. Section 217.4 is amended by revising the first
sentence in subparagraph (l)(iii) of paragraph (d), by
revising subparagraphs (5) and (6) of paragraph (d),
and by revising paragraph (f) to read as follows:

Section 217.4—Payment of time deposits before
maturity.

^^ * * *
Q) *

*

*

(iii) Except as provided in § 217.7 (j) and (1), the
following minimum early withdrawal penalty shall
apply to time deposit contracts entered into, renewed, or extended on or after June 2, 1980:
*

*

*

(5) Except for time deposits on which no maximum
interest rate limitation is prescribed, any amendment of a time deposit contract that results in an
increase in the rate of interest paid or in a reduction
in the maturity of the deposit constitutes a payment
of the time deposit before maturity.
(6) For purposes of computing the penalty required
to be imposed under this paragraph, under a time
deposit agreement that provides that subsequent
deposits reset the maturity of the entire account,
each deposit maintained in the account for at least a
period equal to the original maturity of the deposit



639

may be regarded as having matured individually and
been redeposited at intervals equal to such period.
Except as provided in § 217.7(1)(4), when a time
deposit is payable only after notice, for funds on
deposit for at least the notice period, the penalty for
early withdrawal shall be imposed for at least the
notice period.

(f) Loans upon security of time deposits. Except as
provided in § 217.7(1)(3), a member bank may make a
loan to the depositor upon the security of his time
deposit provided that the rate of interest on such loan
shall be not less than 1 per cent per annum in excess of
the rate of interest on the time deposit.
4. Section 217.6 is amended by revising paragraph (i)
to read as follows:

Section 217.6—Advertising of interest on
deposits.

(i) Any advertisement, announcement, or solicitation
relating to interest paid by a member bank on a time
deposit issued pursuant to § 217.7(f) or 217.7(j) shall
include a clear and conspicuous notice that federal
regulations prohibit the compounding of interest during the term of the deposit.
5. Section 217.7 is amended by revising paragraphs (a),
(b), (d), (e), (f), (g), and (h), and by adding new
paragraphs (j), (k), and (1).

Section 217.7—Maximum rates of interest
payable by member banks on time and savings
deposits.
Pursuant to the provisions of section 19 of the Federal
Reserve Act and § 217.3 of this part, the Board of
Governors of the Federal Reserve System hereby
prescribes the following maximum rates' of interest
per annum payable by member banks of the Federal
Reserve System on time and savings deposits:
(a) Time deposits of $100,000 or more and IBF time
deposits. Except for a time deposit issued subject to all
the conditions of paragraph (1) or 12 CFR 1204.121,
there is no maximum rate of interest presently prescribed on any time deposit of $100,000 or more with a
maturity of 14 days or more or on IBF time deposits
issued under § 217.1(1).

640

Federal Reserve Bulletin • October 1982

(b) Fixed-ceiling time deposits. Except as provided in
paragraphs (a), (d), (e), (f), (g), (i), (j), (k), and (1), of
this section, no member bank shall pay interest on any
time deposit at a rate in excess of the applicable rate
under the following schedule:
Maximum
percent

Maturity
14 days or more but less than 90 days
90 days or more but less than 1 year
1 year or more but less than 2Vi years
2Vi years or more but less than 4 years
4 years or more but less than 6 years
6 years or more but less than 8 years
8 years or more
*

*

*

*

*

5'/4
5%

average on a discount basis) for U.S. Treasury bills
with maturities of 26 weeks at the auction held immediately prior to the date of deposit ("bill rate"), or (2)
the average of the four rates established and announced (auction average on a discount basis) for U.S.
Treasury bills with maturities of 26 weeks at the four
auctions held immediately prior to the date of deposit
("four-week average bill rate"). Rounding any rate to
the next higher rate is not permitted and interest may
not be compounded during the term of this deposit.

6
6V2

71/4
7'/:
TA

Bill rate or 4-week
average bill rate
7.50 percent or below
Above 7.50 percent

(d) Governmental unit time deposits. Except as provided in paragraphs (a), (f), (g), (j), (k), and (1) of this
section, and notwithstanding paragraph (b), no member bank shall pay interest on any time deposit which
consists of funds deposited to the credit of, or in which
the entire beneficial interest is held by, the United
States, any State of the United States, or any county,
municipality or political subdivision thereof, the District of Columbia, the Commonwealth of Puerto Rico,
the Virgin Islands, American Samoa, Guam, or political subdivision thereof, at a rate in excess of 8 per
cent. 2
(e) Individual Retirement Account and Keogh (H.R.
10) plan deposits. Notwithstanding paragraphs (b) and
(g) of this section, a member bank may pay interest at
any rate as agreed to by the depositor on any time
deposit with a maturity of one and one-half years or
more, that consists of funds deposited to the credit of,
or in which the entire beneficial interest is held by, an
individual pursuant to an Individual Retirement Account agreement or Keogh (H.R. 10) Plan established
pursuant to 26 U.S.C. (I.R.C. 1954) 219, 401, 404, 408,
and related provisions. A member bank may permit
additional deposits to be made to such a time deposit
at any time prior to its maturity without extending the
maturity of all or a portion of the entire balance in the
account.
(f) 26-week money market time deposits. Except as
provided in paragraph (a) of this section and notwithstanding paragraphs (b) and (d) of this section, a
member bank may pay interest on any nonnegotiable
time deposit of $10,000 or more, with a maturity of 26
weeks, at a rate not to exceed the ceiling rate set forth
below. The ceiling rate shall be based on the higher of
either (1) The rate established and announced (auction




Interest rate ceiling
7.75 percent
One-quarter of 1 percentage point plus
the higher of the bill rate or
4-week average bill rate.

A member bank may offer this category of time deposit
to all depositors. However, a member bank may pay
interest on any nonnegotiable time deposit of $10,000
or more with a maturity of 26 weeks which consists of
funds deposited to the credit of, or in which the entire
beneficial interest is held by:
(3) The United States, any State of the United
States, or any county, municipality or political subdivision thereof, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands,
American Samoa, Guam, or political subdivision
thereof; or
(4) An individual pursuant to an Individual Retirement Account agreement or Keogh (H.R. 10) Plan
established pursuant to 26 U.S.C. (I.R.C. 1954) 219,
401, 404, 408 and related provisions at a rate not to
exceed the ceiling rate payable on the same category
of deposit by any federally insured savings and loan
association or mutual savings bank. 3
(g) Time deposits with maturities of 2lh years to less
than 3>/2 years.
(1) Except as provided in paragraphs (a) and (e) of
this section and notwithstanding paragraphs (b) and
(d) of this section, a member bank may pay interest
on any nonnegotiable time deposit with an original
maturity of 2Vi years to less than V/i years at a rate

3
The ceiling rate of interest payable for this category of deposit by
federally insured savings and loan associations and mutual savings
banks is 7.75 percent when the bill rate or four-week average bill rate
is 7.25 percent or lower, one-half of one percent above the bill rate or
four-week average bill rate when the bill rate or four-week average bill
rate is above 7.25 percent but below 8.50 percent, 9.00 percent when
the bill rate is above 7.25 percent but below 8.50 percent or above but
below 8.75 percent, and one-quarter of one percent above the bill rate
or four-week average bill rate when the bill rate or four-week average
bill rate is 8.75 percent or above.

Legal Developments

not to exceed the higher of one-quarter of 1 per cent
below the average 2'/2-year yield for U . S . Treasury
securities as determined and announced by the U . S .
Department of the Treasury immediately prior to the
date of deposit, or 9.25 per cent. Such announcement is made by the U.S. Department of the Treasury every two weeks. The average 2'/2-year yield
will be rounded by the U.S. Department of the
Treasury to the nearest 5 basis points. The rate paid
on any such deposit cannot exceed the ceiling rate in
effect on the date of deposit. A member bank may
offer this category of time deposit to all depositors.
However, a member bank may pay interest on any
nonnegotiable time deposit with a maturity of 2/2
years to less than 3'/> years which consists of funds
deposited to the credit of, or in which the entire
beneficial interest is held by the United States, any
State of the United States, or any county, municipality or political subdivision thereof, the District of
Columbia, the Commonwealth of Puerto Rico, the
Virgin Islands, American Samoa, Guam, or political
subdivision thereof at a rate not to exceed the ceiling
rate payable on the same category of deposit by any
federally insured savings and loan association or
mutual savings bank. 4
(2) Effective April 1, 1983, this paragraph is amended by striking the term "2V2 years to less than 3/2
years" wherever it appears and inserting in its place
"l'/2 years to less than 2/2 years", and by striking
the term "average 2/2-year yield" wherever it appears and inserting in its place "average 1 '/2-year
yield".
(h) Obligations of the parent bank holding company of
a member bank. Interest may be paid on a deposit as
defined in section 217.1(h) at a rate not to exceed the
maximum rate payable by a member bank on a deposit
of equal maturity and denomination. For purposes of
this paragraph, the maturity of an obligation of a
parent bank holding company is the lesser of the stated
maturity period, notice period, or redemption period.

(j) 91-day time deposits. (1) Except as provided in
paragraph (a) of this section and notwithstanding paragraphs (b) and (d) of this section, a member bank may
pay interest on any negotiable or nonnegotiable time
deposit of $7,500 or more, with a maturity of 91 days,
at a rate not to exceed the ceiling rates set forth below.
Rounding any rate upward is not permitted, and interest may not be compounded during the term of this
deposit.

4*

* *




641

(2)(i) Except as provided in paragraphs (j)(2)(ii) and
(iii) of this section the ceiling rate of interest
payable by a member bank shall be the rate established and announced (auction average on a discount basis) for U.S. Treasury bills with maturities
of 91 days at the auction held immediately prior to
the date of deposit ("bill rate") minus one-quarter
of one percentage point (25 basis points).
(ii) If the bill rate is 9 per cent or below at the four
most recent auctions of U . S . Treasury bills with
maturities of 91 days held immediately prior to the
date of deposit, the ceiling rate of interest payable
by a member bank shall be the bill rate.
(iii) Effective May 1, 1983, the ceiling rate of
interest payable by a member bank on this category of deposit for deposits issued or renewed on or
after that date shall be the bill rate.
(3) Where all or any part of a time deposit issued
under this paragraph is paid before maturity, a
depositor shall forfeit an amount equal to at least all
interest earned on the amount withdrawn.
(k) Time deposits with original maturities of 3'h years
or more.
(1) Notwithstanding paragraphs (b) and (d) of this
section, a member bank may pay interest at any rate
as agreed to by the depositor on any time deposit
with an original maturity of 3'/> years or more that
has no minimum denomination but is made available
in a denomination of $500.
(2) Any time deposit with an original maturity of 1V2
years or more issued pursuant to this paragraph may
provide by contract that additional deposits may be
made to the account for a period of one year from
the date that it is established without extending the
original maturity date of the account. Deposits made
to the account more than one year after the date that
it is established shall extend the maturity of the
entire account for a period of time at least equal to
the original term of the account.
(3) Any time deposit offered pursuant to this paragraph may be issued in a negotiable or nonnegotiable form.
(4)(i) Effective April 1, 1983, this paragraph is
amended by striking the term "3'/> years" wherever it appears and inserting in its place the term
"2'/2 years".
(ii) Effective April 1, 1984, this paragraph is
amended by striking the term "2V2 years" wherever it appears and inserting in its place "1/2
years".
(iii) Effective April 1, 1985, this paragraph is
amended by striking the term "IV2 years" wherever it appears in subparagraph (1) and inserting
in its place "6 months".

642

Federal Reserve Bulletin • October 1982

(1) Seven-to-31 day time deposits of $20,000 or more.
(1) Notwithstanding paragraphs (b) and (d) of this
section, a member bank may pay interest on any
nonnegotiable time deposit of $20,000 or more, with
a maturity or required notice period of not less than
seven days nor more than 31 days, at a rate not to
exceed the ceiling rates set forth below. However, a
member bank shall not pay interest in excess of the
ceiling rate for regular savings deposits or accounts
on any day the balance in a time deposit issued
under this paragraph is less than $20,000. Rounding
any rate upward is not permitted.
(2)(i) For fixed interest rate, fixed maturity time
deposits issued under this paragraph, the ceiling
rate of interest payable by a member bank shall be
the rate established and announced (auction average on a discount basis) for U.S. Treasury bills
with maturities of 91 days at the auction held
immediately prior to the date of deposit or renewal ("bill rate") minus one-quarter of one percentage point (25 basis points).
(ii) For variable interest rate, fixed maturity time
deposits and for all notice accounts issued under
this paragraph, the ceiling rate of interest payable
by a member bank shall be the bill rate in effect on
the date of opening or renewal of the account
minus one-quarter of one percentage point (25
basis points). The interest rate on the account
then may be adjusted to be not in excess of the bill
rate, minus 25 basis points, established and announced at the most recent subsequent auction
during the life of the deposit but not less often
than every 31 days.
(iii) Notwithstanding subparagraphs (2)(i) and 2(ii)
of this paragraph, a member bank may pay interest at a rate not to exceed the bill rate on any time
deposit issued under this paragraph which consists of funds deposited to the credit of, or in
which the entire beneficial interest is held by:
(A) The United States, any State of the United
States, or any county, municipality or political
subdivision thereof, the District of Columbia,
the Commonwealth of Puerto Rico, the Virgin
Islands, American Samoa, Guam, or political
subdivision thereof; or
(B) An individual pursuant to an Individual
Retirement Account agreement or Keogh (H.R.
10) Plan established pursuant to 26 U.S.C. (IRC
1954) 219, 401, 404, 408, and related provisions.
(iv) The ceiling rates in paragraphs (l)(2)(i), (2)(ii)
and (2)(iii) of this section shall not apply.
(A) If the bill rate is 9 per cent or below at the
four most recent auctions of U.S. Treasury bills
with maturities of 91 days held prior to the date
of deposit or renewal. A member bank may pay



interest at any rate as agreed to by the depositor
on this category of deposit for deposits issued
or renewed during such period; or
(B) Effective May 1, 1983. A member bank may
pay interest at any rate as agreed to by the
depositor on this category of deposit for deposits issued or renewed on or after May 1, 1983.
(3)(i) A member bank is not permitted
(A) To lend funds to a depositor upon the
security of a time deposit that it has issued
under this paragraph, or
(B) To lend funds to a depositor to meet or
maintain the minimum denomination requirement of a time deposit issued under this paragraph.
(ii) The rate of interest and any other charges
imposed on an overdraft credit arrangement to
which withdrawals are paid or to which payments
upon maturity or expiration of a required notice
period are made from an account issued under this
paragraph must be not less than those imposed on
such overdrafts for customers that do not possess
an account issued under this paragraph at the
same institution.
(4)(i) Where all or any part of a time deposit issued
under this paragraph is paid before maturity or
expiration of the required notice period, a depositor shall forfeit an amount at least equal to the
greater of
(A) All interest earned on the amount withdrawn from the most recent of the date of
deposit, date of maturity, or date on which
notice was given, or
(B) All interest that could have been earned on
the amount withdrawn during a period equal to
one-half the maturity period or required notice
period.
(ii) Where all or any part of a time deposit issued
under this paragraph is withdrawn within one
business day after the maturity date of the deposit
or the date of expiration of notice of withdrawal,
no early withdrawal penalty is required to be
applied on the amount withdrawn.
(5) Additional deposits to an account issued under
this paragraph with a fixed maturity must be maintained in the account for a period at least equal to
the original term of the account and may be regarded
as having matured individually and having been
redeposited at intervals equal to such period. For
accounts issued under this paragraph that are subject to a notice period, additional deposits must
remain in the account for a period equal to at least
the notice period before such funds may be withdrawn without the imposition of an early withdrawal
penalty.

Legal Developments

643

By Order dated August 30, 1982, the Board approved
the application of First American Bank Corporation,
Kalamazoo, Michigan, under section 3(a)(3) of the
Bank Holding Company Act (12 U.S.C. § 1842(a)(3))
to acquire 100 percent of the voting shares of Huron
County Bank, Harbor Beach, Michigan ("Bank"). 1 In
this Statement, the Board sets forth its reasons for
approving the application.

Applicant, the fifth largest banking organization in
Michigan, controls 27 subsidiary banks with aggregate
deposits of $3.06 billion, representing 7.04 percent of
the total deposits in commercial banks in the state. 2
Upon acquisition of Bank (deposits of $20.6 million),
Applicant's share of deposits in commercial banks in
Michigan would increase by .05 percent, and Applicant would remain the fifth largest banking organization in the state. 3 Accordingly, consummation of this
proposal would not have an appreciable effect on
concentration of commercial banking resources in
Michigan.
Bank is the fourth largest banking organization in
the Huron County banking market, controlling approximately 8.7 percent of total deposits in commercial banks in the market. 4 Applicant, through a branch
office of a banking subsidiary in the Huron County
banking market, is the ninth largest banking organization in the relevant market and controls about 0.5
percent of the total deposits in the market. Upon
consummation, Applicant would become the fourth
largest banking organization in the market with 9.2
percent of the market's commercial banking deposits.
Although consummation of the proposal would eliminate some existing competition between Applicant and
Bank, the Board does not regard the effects on existing
competition to be so serious as to warrant denial of the
application. The four-firm concentration ratio will
increase by only 0.5 percent and there will remain
several other market competitors that could serve as
entry vehicles for banking organizations not currently
represented in the market. Accordingly, the Board
concludes that consummation of the proposal would
not have significantly adverse effects on existing or
potential competition, and would not increase the
concentration of banking resources in any relevant
area.
The financial and managerial resources of Applicant, its subsidiaries and Bank are regarded as generally satisfactory and their future prospects appear favorable. Accordingly, considerations relating to banking
factors are consistent with approval of the application.
Following consummation of the proposal, Applicant
intends to provide Bank with assistance in marketing
its NOW account program, and in establishing expand-

1. In conjunction with this application, Applicant requested prior
approval to merge HC State Bank, Harbor Beach, Michigan, a new
bank formed for the purpose of effecting the transaction, with Huron
County Bank under the charter of the former and with the title of
Huron County Bank pursuant to section 18(c) of the Federal Deposit
Insurance Act (12 U.S.C. § 1828(c)). After consideration of the
statutory factors in light of all the facts of record, the Board determined that the proposed merger is consistent with the public interest
and approved the merger application on August 30, 1982.

2. All banking data are as of June 30, 1981.
3. On August 30, 1982, the Board approved the application of First
American Bank Corporation to merge with Mid-Michigan Bank Corporation, Gladwin, Michigan. Upon consummation of that transaction, Applicant's share of deposits in commercial banks in Michigan
will increase by 0.15 percent.
4. The Huron County banking market consists of all but the extreme
southwestern portion of Huron County, Michigan, plus the community of Minden in adjacent Sanilac County, Michigan.

(6) Deposits to any account issued under this paragraph may not be made by automatically transferring funds from another account of the depositor at
the same institution where the transfer is initiated by
the level of the balance in any account.
(7)(i) Withdrawals from any account issued under
this paragraph may not be made (A) by check,
draft, or other third party payment instrument or
instruction drawn or issued by the depositor, or
(B) by automatically transferring funds to another
account of the depositor where the transfer is
initiated by the level of balance in any account
held by the depositor.
(ii) Payments at maturity or withdrawals may be
paid by (A) check or cash to the depositor, (B)
cash, draft, or electronic transfer issued by the
institution to a third party, or (C) transfer to any
other account held by the depositor.
(iii) Notice of withdrawal of an account issued
under this paragraph may be delivered by the
depositor to the institution by telephone or other
telecommunication, mail, messenger, standing order, or by appearance in person at the offices or
premises of the institution.
BANK HOLDING COMPANY AND BANK MERGER
ORDERS ISSUED BY THE BOARD OF GOVERNORS

Orders Under Section 3 of Bank
Company Act

Holding

Statement by the Board of Governors of the
Federal Reserve System Regarding the
Application of First American
Bank Corporation to Acquire Huron
County Bank




644

Federal Reserve Bulletin • October 1982

ed credit card services, ATMs, trust services and a
commercial leasing program, services that are not
currently offered by Bank, thus increasing Bank's
ability to serve its customers. In light of this proposed
expansion in services, the Board concludes that considerations relating to the convenience and needs of
the community to be served lend some weight toward
approval of the acquisition and outweigh any adverse
competitive effects that may result from consummation of the proposal. Accordingly, the Board concludes that consummation of the proposed transaction
would be in the public interest and that the application
should be approved.
On the basis of the record, the application has been
approved for the reasons summarized above. The
acquisition of shares of Bank shall not be made before
the thirtieth calendar day following the effective date
of the Order, or later than three months after the
effective date of the Order, unless such period is
extended for good cause by the Board of Governors or
by the Federal Reserve Bank of Chicago, pursuant to
delegated authority.
Board of Governors of the Federal Reserve System,
September 15, 1982.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

Secretary

of the Board.

InterFirst Corporation,
Dallas, Texas
Order Approving Acquisition
Company

of Bank Holding

InterFirst Corporation, Dallas, Texas, a bank holding
company within the meaning of the Bank Holding
Company Act of 1956, as amended (12 U.S.C. § 1841
et seq.), has applied for the Board's approval under
section 3 of the act (12 U.S.C. § 1842) to acquire
indirect control of Fannin Bank, Houston, Texas,
through the acquisition of its parent, Fannin Bancshares, Inc., Houston, Texas.
Notice of the application, affording opportunity for
interested persons to submit comments and views,
has been given in accordance with section 3(b) of the
act (12 U.S.C. § 1842(b)). The time for filing comments and views has expired and the Board has
considered the application and all comments received
in light of the factors set forth in section 3(c) of the act
(12 U.S.C. § 1842(c)).
InterFirst, the largest banking organization in Texas, controls 54 banking subsidiaries with aggregate
statewide deposits of $10.3 billion, representing 11
percent of the total deposits in commercial banking



organizations in the state. 1 Fannin Bank, the only
banking subsidiary of Fannin Bancshares, holds total
deposits of $373 million, representing 0.4 percent of
statewide deposits. Fannin Bancshares ranks 21st
among all commercial banking organizations in Texas.
Upon consummation of the proposed merger, InterFirst would remain the largest banking organization in
the state, and the percentage of statewide deposits
controlled by InterFirst would increase to 11.4 percent. The Board's view is that consummation of the
proposed merger would not have an appreciable effect
on the concentration of commercial banking resources
in Texas.
Fannin Bank operates in the Houston banking market, 2 where it holds 1.64 percent of market deposits
and ranks as the tenth largest of 110 commercial
banking organizations in the market. InterFirst is the
fifth largest commercial banking organization in the
Houston banking market with 11 banking subsidiaries,
and holds $1.48 billion in deposits, representing 6.51
percent of market deposits. Following consummation
of the proposed transaction, InterFirst would become
the fourth largest commercial banking organization in
the Houston market. Although the proposed acquisition will eliminate some competition between Fannin
Bank and InterFirst's banking subsidiaries in the
Houston banking market, the Board notes that the
market is not highly concentrated. Moreover, in recent
years the Houston banking market has experienced
rapid population and commercial growth, leading to
substantial expansion in banking in the market. In
view of these and other facts of record, the Board's
judgment is that the effects of the proposed transaction
on competition in the Houston banking market are not
so serious as to warrant denial of the application.
The financial and managerial resources of InterFirst, Fannin Bancshares, and their subsidiary banks
are regarded as generally satisfactory, and their future
prospects appear favorable. Accordingly, banking factors are consistent with approval of the proposal.
Although the proposed transaction will not bring
new services to the Houston banking market, the
present customers of Fannin Bank will benefit from
access to the InterFirst ATM network, and from the
intitiation or expansion of specialized lending services,
and international banking activities. Thus, considerations relating to the convenience and needs of the
community to be served are consistent with approval.
Accordingly, the Board's judgment is that consumma-

1. All deposit data as of June 30, 1981, reflecting acquisitions
approved as of June 30, 1982.
2. The relevant geographic banking market is the Houston RMA,
which consists of the majority of Harris County, and portions of
Waller, Fort Bend, Brazoria, Galveston, Chambers, Liberty, and
Montgomery Counties.

Legal Developments

tion of the proposal would be consistent with the
public interest.
On the basis of the record and for the reasons
discussed above, the application is hereby approved.
The transaction shall not be consummated before the
thirtieth day following the effective date of this Order,
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Dallas, pursuant to delegated authority.
By order of the Board of Governors, effective
September 16, 1982.
Voting for this action: Chairman Volcker and Governors
Wallich, Partee, Rice, and Gramley. Voting against this
action: Governor Teeters. Absent and not voting: Governor
Martin.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

Dissenting Statement

Secretary

of Governor

of the Board.

Teeters

I would deny the application of InterFirst Corporation
to acquire Fannin Bancshares, Inc. In this case, the
largest banking organization in Texas, operating the
fifth largest banking organization in the Houston banking market, is seeking to acquire the tenth largest
commercial banking organization in that market. In
my view, the acquisition would represent the elimination of a significant competitor from the Houston
market and would contribute to concentration of banking resources in a market that has been experiencing
concentration among its larger financial institutions.
Moreover, Fannin Bancshares, with total deposits of
$373 million, is of sufficient size and possesses sufficient resources to independently expand its operations
in the Houston banking market, as well as into other
markets in Texas. Thus, the acquisition of Fannin by
InterFirst would foreclose the possibility of future
expansion by a viable potential competitor in the state.
Accordingly, consummation of the transaction would,
in my view, have an adverse effect on competition
without offering any offsetting benefits or outweighing
convenience and needs considerations.
In light of the above, I would deny this application.
September 16, 1982

Milford Bancorporation,
Milford, Iowa
Order Denying Acquisition

of Bank

Milford Bancorporation, Milford, Iowa, a bank holding company within the meaning of the Bank Holding



645

Company Act, has applied for the Board's approval
under section 3(a)(3) of the act (12 U.S.C. § 1842(a)(3))
to acquire all of the voting shares of San Bancorp,
Sanborn, Iowa ("Company"), a registered one-bank
holding company, and to acquire indirectly its commercial bank subsidiary, Sanborn Savings Bank, Sanborn, Iowa ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired,
and the Board has considered the application and all
comments received in light of the factors set forth in
section 3(c) of the act (12 U.S.C. § 1842(c)).
The proposed transaction is essentially a reorganization whereby the shareholder who presently controls
Bank through Company will control Bank through
Applicant. Applicant, a one-bank holding company, is
the 320th largest banking organization in Iowa, controlling $19.1 million in deposits. 1 Upon acquisition of
Bank ($14.7 million in deposits) Applicant would control the 396th largest commercial bank in Iowa and
would hold approximately .17 percent of the total
deposits of commercial banks in the state.
Bank is the third largest of six commercial banking
organizations in the O'Brien County banking market,
and holds approximately 16 percent of the total deposits in commercial banks in the market. 2 Applicant's
banking subsidiary does not compete in the relevant
banking market. The facts of record indicate that
consummation of the proposal would not result in any
adverse effects upon competition or increase the concentration of banking resources in any relevant area.
Accordingly, the Board concludes that competitive
considerations are consistent with approval of the
application.
The Board has indicated on previous occasions that
a holding company should serve as a source of financial and managerial strength to its subsidiary bank(s),
and that the Board will closely examine the condition
of an applicant in each case with this consideration in
mind. Moreover, the Board has stated that in acting
upon future applications by an applicant, it will assess
the applicant's managerial resources in light of its
compliance with prior commitments to the Board. 3 In
this case, the Board concludes that the record presents
adverse considerations as they relate to the applicant

1. All banking data are as of December 31, 1981.
2. The O'Brien County banking market is approximated by all of
O'Brien County, Iowa, except the westernmost portion.
3. "First City Bancorporation of Texas, Inc. (Central Bank and
T r u s t C o m p a n y ) , 61 FEDERAL RESERVE BULLETIN 591 ( 1 9 7 5 ) , "
" B a n k S h a r e s I n c o r p o r a t e d , " 62 FEDERAL RESERVE BULLETIN 6 2 6

(1976), see also "American National Sidney Corp.", 66 FEDERAL
RESERVE BULLETIN 159 (1980).

646

Federal Reserve Bulletin • October 1982

bank holding company, that these considerations warrant denial of its proposed acquisition of Company and
Bank.
The Board's approval on January 20, 1978, of the
formation of Company and acquisition of Bank relied,
in part, upon a commitment made by the principal
shareholder of Company and Applicant, who also
serves as chairman and president of Applicant and
Dickinson Bank, chairman of Company, and president
of Bank, to inject by June 30, 1978, $200,000 of equity
capital into Applicant's subsidiary commercial bank,
Dickinson County Savings Bank, Milford, Iowa
("Dickinson Bank"). The capital injection was to have
been accomplished by principal's purchase with personal funds of 200 shares of unissued stock. To date,
Applicant's principal has not complied with this commitment. In view of the fact that Dickinson Bank's
overall condition has declined since its acquisition by
Applicant, the Board regards the continuing noncompliance with the commitment by Applicant's principal
as a factor reflecting adversely upon the financial and
managerial resources of Applicant, and as providing
sufficient grounds for denial of the present proposal.
In addition, the Board notes that Applicant would
incur a sizeable additional debt in connection with this
proposal. The amount of Applicant's original debt
upon formation in 1974 was limited to the maximum
amount Applicant demonstrated that it could retire
within the then-requisite 12-year period. However,
Applicant has not met its debt servicing projections,
nor has it significantly reduced its original acquisition
debt. Based upon this record, the Board is unable to
conclude that Applicant's projections will be fulfilled.
Accordingly, based upon the above and other facts of
record, the Board concludes that considerations relating to financial resources and future prospects of
Applicant, Dickinson Bank, and Bank weigh against
approval of this application.
No significant changes in Bank's operations or in
the services offered to customers are anticipated to
follow from consummation of the proposed acquisition. Consequently, convenience and needs factors
lend no weight toward approval of this proposal.
On the basis of the circumstances concerning this
application, the Board concludes that the banking
considerations involved in this proposal present adverse factors bearing upon the financial and managerial resources and future prospects of Applicant and
Bank. Such adverse factors are not outweighed by any
procompetitive effects of by benefits that would result
in better serving the convenience and needs of the
community. Accordingly, the Board's judgment is that
approval of the application would not be in the public
interest and that the application should be denied.
On the basis of the facts of record, the application is
denied for the reasons summarized above.



By order of the Board of Governors, effective
September 27, 1982.
Voting for this action: Chairman Volcker and Governors
Wallich, Partee, Teeters, Rice, and Gramley. Absent and not
voting: Governor Martin.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

Secretary

of the Board.

Trans world Corporation,
Lake Forest, Illinois
Order Approving Acquisition

of Bank

Trans world Corporation, Lake Forest, Illinois, a bank
holding company within the meaning of the Bank
Holding Company Act, has applied for the Board's
approval under section 3(a)(3) of the act (12 U.S.C.
§ 1842(a)(3)) to acquire shares of Dempster Plaza State
Bank, Niles, Illinois ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired,
and the Board has considered the application and all
comments received in light of the factors set forth in
section 3(c) of the act (12 U.S.C. § 1842(c)).
Applicant is a one bank holding company by virtue
of its control of The Northlake Bank, Northlake,
Illinois ("Northlake Bank") (deposits of $11.6 million). Both Northlake Bank and Bank, with deposits of
$21.7 million, are among the smaller commercial banks
in the state. 1 Upon consummation of the proposed
transaction, Applicant will become the 483rd largest
commercial banking organization in Illinois, and will
control 0.03 percent of the deposits in commercial
banks in that state. In light of the small share of the
state's commercial bank deposits that will be controlled by Applicant, the Board concludes that consummation of the transaction will not have any serious
adverse effects on the concentration of banking resources in Illinois.
The proposal represents a reorganization whereby
Applicant will acquire shares of Bank now held by its
principal. Because both Northlake Bank and Bank
compete in the Chicago banking market, 2 the 1977
acquisition of Bank by Applicant's principal eliminated some existing competition in the market. However,
consummation of the proposed transaction will in-

1. All banking data are as of December 31, 1981.
2. The Chicago banking market is approximated by Cook, DuPage,
and Lake Counties, Illinois.

Legal Developments

crease Applicant's share of deposits in commercial
banks in the market to only 0.05 percent. In light of the
small absolute and relative size of Northlake Bank and
Bank and the fact that numerous banking alternatives
will remain in the market after consummation, the
Board concludes that consummation will have no
significant effect on existing competition in any relevant market.
The financial and managerial resources of Applicant, Northlake Bank and Bank are generally satisfactory and the future prospects for each appear favorable especially in light of the additional capital that
Applicant will provide Bank. Thus, banking factors
are consistent with approval of the application. With
respect to the convenience and needs of the communities to be served, the Board notes that Bank's record
of serving its community has improved significantly
since its acquisition by Applicant's principal. Thus,
although no immediate changes in Bank's services are
contemplated, considerations relating to convenience
and needs of the community lend weight toward
approval of the application. Accordingly, the Board's
judgment is that the proposed acquisition is in the
public interest and that the application should be
approved. 3
On the basis of the record, the application is approved for the reasons summarized above. This transaction shall not be made before the thirtieth day
following the effective date of this Order, or later than
three months after the effective date of this Order,
unless such period is extended by the Board or by the
Federal Reserve Bank of Chicago, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
September 1, 1982.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Teeters, Rice, and Gramley. Absent and not
voting: Governor Partee.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

Secretary of the Board.

3. The Board notes that, pursuant to section 4(a)(2) of the Act
(12 U.S.C. § 1843(a)(2)), Applicant has indefinite grandfather privileges with respect to certain real estate activities. In this regard, there
is no evidence in the record that Applicant's continued performance of
these activities would result in any undue concentration of resources,
decreased or unfair competition, conflicts of interest, unsound banking practices or other adverse effects that would warrant termination
of these activities. Accordingly, the Board concludes termination of
these real estate activities is not warranted at this time. This determination is subject to later review by the Board or by the Reserve Bank.
Moreover, this determination is not an authorization to expand these
activities.




Orders Under Section 4 of Bank
Company Act

647

Holding

BankAmerica Corporation,
San Francisco, California
Order Approving Application
Equity Financing Activities

to Engage in

BankAmerica Corporation, San Francisco, California,
a bank holding company within the meaning of the
Bank Holding Company Act, has applied for the
Board's approval, under section 4(c)(8) of the act
(12 U.S.C. § 1843(c)(8)) and section 225.4(a) of the
Board's Regulation Y (12 C.F.R. § 225.4(a)), to engage
through its subsidiary, BA Mortgage and International
Realty Company, San Francisco, California ("BAMIRCO"), in the activity of arranging equity financing
for certain types of income-producing properties.
Notice of the application, affording interested persons an opportunity to submit comments and views on
the relatedness of the proposed activity to banking and
on the balance of public interest factors regarding the
application has been duly published (46 Federal Register 61297 (1981)). The time for filing comments and
views has expired and the Board has considered the
application and all comments received in light of the
public interest factors set forth in section 4(c)(8) of the
act.
Applicant is a bank holding company by virtue of its
control of Bank of America NT & SA, San Francisco,
California (domestic deposits of $51.2 billion), the
largest banking organization in California. Bank of
America controls 36.1 percent of total deposits in
commercial banks in that state. 1 Applicant also engages in certain nonbanking activities, including mortgage banking, commercial lending and leasing, credit
related insurance activities, investment advisory activities, and management consulting to depository institutions.
Applicant, through BAMIRCO, currently engages in
mortgage banking and servicing activities for which it
received Board approval under section 4(c)(8) of the
act and sections 225.4(a)(1) and (3) of Regulation Y.
BAMIRCO also is authorized to provide investment
advisory services under section 225.4(a)(5) of Regulation Y, including advice with respect to commercial or
industrial real estate.
BAMIRCO currently provides to persons seeking
financing for commercial or industrial income producing property a variety of financing services, including
the provision or arrangement of traditional mortgage
loans. In this application, BAMIRCO seeks authority
to provide these persons equity financing as an alter1. Banking data are as of June 30, 1981.

648

Federal Reserve Bulletin • October 1982

native to an extension of credit made or arranged by
BAMIRCO. 2 The equity financing activity will be
performed only by BAMIRCO, Applicant's mortgage
banking subsidiary, and will be offered only as an
alternative to traditional financing arrangements. BAMIRCO will not solicit for properties to be sold, list or
advertise properties for sale, or hold itself out or
advertise as a real estate broker or syndicator.
In order to approve an application submitted pursuant to section 4(c)(8) of the act to engage in a nonbank
activity, the Board is required to find that the activity
is closely related to banking or managing or controlling
banks. In determining whether an activity is closely
related to banking under section 4(c)(8) of the act, the
Board has used the following guidelines recognized by
the courts: (1) whether banks have generally provided
the proposed service; (2) whether banks generally
provide services that are operationally or functionally
so similar to the proposed service as to equip them
particularly well to provide the proposed service; or
(3) whether banks generally provide services that are
so integrally related to the proposed service as to
require their provision in specialized form. 3 In addition, the Board may consider other factors in deciding
what activities are closely related to banking. 4
Upon consideration of the entire record on this
application, including all public comments submitted,
the Board has determined, for the reasons explained
below, that Applicant's proposed equity financing
activity as conditioned by this Order is closely related
to banking.
Equity financing, as proposed by BankAmerica,
involves arranging for the financing of commercial or
industrial income-producing real estate through the
transfer of the title, control and risk of the project from
the owner/developer to one or more investors. BAMIRCO would represent the owner/developer and
would be paid a fee by the owner/developer for this
service. Neither BAMIRCO nor any of its affiliates
will provide financing to the investors in connection
with an equity financing arrangement. BAMIRCO will
arrange equity financing only in the case of commer-

2. A staff opinion issued on January 16, 1981, informed BAMIRCO
that, as an incident to its lending authority under section 225.4(a)(1), it
could place equity interests in connection with lending transactions in
which BAMIRCO was a participant or as part of a package where a
permanent mortgage loan was being made in connection with the
equity placement. The Board will review this staff opinion in light of
the limitations and conditions in this Order.
3. "National Courier Association" v. "Board of Governors," 516
F.2d 1229 (D.C. Cir. 1975).
4. "Alabama Association of Insurance Agents" v. "Board of
Governors," 553 F.2d 224, 241 (5th Cir. 1976), rehearing denied 558
F.2d 729 (1977), cert, denied. 435 U.S. 904 (1978). See "Board of
Governors" v. "Investment Company Institute," 450 U.S. 46, 55
(1981).




cial or industrial income-producing real property, only
where the financing arranged exceeds $1 million, and
will place equity financing only with institutional or
wealthy, professional individual investors.
The evidence of record shows that, in performing
the equity financing activity for commercial or industrial income-producing real estate, BAMIRCO needs
and will utilize the type of expertise and analysis
developed by financial institutions in evaluating and
arranging mortgage financing for such property. For
example, Applicant states that BAMIRCO would consult with the developer/owner to determine the nature,
objectives and financing requirements of a project;
would consider the project's concept, architectural
design, building layout, suitability for purpose and
prospects; would analyze traffic flow, competing projects, source of customers, the nature of the market;
would calculate projected rentals and income flows;
and would review the developer/owner's timetable for
the project; and availability of construction financing
and long term financing for the property. Based upon
its review, BAMIRCO would prepare a written analysis of the project and, in view of this analysis and its
knowledge of the current real estate financing market,
BAMIRCO would formulate financing alternatives,
which might include equity financing. According to
Applicant, in presenting a project to an investor this
analysis is the same, whether the ultimate financing is
in the form of a mortgage or equity financing.
The Board finds that the particular expertise and
analysis required to provide equity financing for large
commercial or industrial income-producing properties
is functionally and operationally similar to the analysis
and expertise that is required when a bank provides
traditional mortgage financing services for such properties. Banking organizations have historically provided financing for commercial and industrial properties
and thus are particularly well equipped to provide the
proposed service. The Board's judgment is that the
functional and operational similarity between mortgage banking and equity financing is further supported
by the fact that equity financing can be viewed as an
economic substitute for long-term mortgage financing.
Evidence in the record shows that investors have
increasingly turned to equity participations in projects
as a means of increasing their yields and protecting
themselves against inflation and interest rate fluctuations.
Moreover, the Board's view is that equity financing
as proposed by Applicant and as conditioned by this
Order bears a functional relationship to investment
advisory services traditionally and lawfully performed
by commercial banks with respect to commercial and
industrial real estate. Accordingly, on these bases and
based upon the evidence of record and subject to the

Legal Developments

conditions and limitations set forth in this Order, the
Board finds that equity financing by Applicant is
closely related to banking. 5
The Board has imposed the conditions in this Order
to confine the activity proposed by Applicant to equity
financing and to prevent Applicant from engaging in
real estate development or syndication. In equity
financing, BAMIRCO's function is limited to acting as
intermediary between developers and investors to
arrange financing. Neither BAMIRCO nor any affiliate
may acquire an interest in the real estate project for
which BAMIRCO arranges equity financing nor have
any role in the development of the project. Neither
BAMIRCO nor any of its affiliates shall participate in
managing, developing or syndicating property for
which BAMIRCO arranges equity financing, nor promote or sponsor the development or syndication of
such property. The fee BAMIRCO receives for arranging equity financing for a project shall not be based on
profits derived, or to be derived, from the property
and should not be larger than the fee that would be
charged by an unaffiliated intermediary. The Board
finds that Applicant's proposed equity financing activity will not constitute either real estate development or
real estate syndication, provided the above-mentioned
conditions and limitations are observed by Applicant
and BAMIRCO.
Before approving a bank holding company's application to engage in an activity that the Board determines is closely related to banking, the Board must
also find that consummation of the proposal can
reasonably be expected to produce benefits to the
public that outweigh possible adverse effects. With
respect to the proposed equity financing activity, it
appears from the record that authorizing the activity
for bank holding companies would enhance competition and provide greater convenience, increased efficiencies, and lower costs, without resulting in any
adverse consequences. Greater convenience and in-

5. In a 1972 decision, the Board required an applicant to divest a
general real estate brokerage subsidiary because the applicant had not
demonstrated that the proposed activity was closely related to banki n g . " B o a t m e n ' s B a n c s h a r e s , I n c , " 58 FEDERAL RESERVE BULLETIN

427 (1972). Some comments on BankAmerica's proposal suggested
that equity financing should be regarded as real estate brokerage and
impermissible under the Board's "Boatmen's" decision. However,
equity financing for incomeproducing properties was not an activity
considered in the "Boatmen's" case. Moreover, economic conditions
have changed significantly since 1972 when that determination was
made, and, as noted below, equity financing has become an economic
substitute for long-term mortgage financing. Because the particular
expertise and analysis required for equity financing are not involved in
general real estate borkerage, the Board's conclusion with respect to
BAMIRCO's proposed activities does not represent a departure from
the Board's position concerning the impermissibility of general real
estate brokerage.




649

creased competition would result by providing a
broader range of long-term financing alternatives and
by aiding the flow of funds between investors and
developers. This should also tend to produce lower
costs and increased efficiencies. Moreover, competition would be enhanced since mortgage company
subsidiaries of bank holding companies could better
compete with independent mortgage companies,
which may engage in both traditional mortgage banking and equity financing. Some concern was expressed
by commenters on the application that consummation
of the proposal might result in unfair competition by
allowing bank holding companies to engage in real
estate brokerage and might result in conflicts of interests with respect to subsidiary banks. As noted, the
Board has limited the proposed activity to exclude
general real estate brokerage. Moreover, in view of the
commitments and representations furnished by Applicant, including the prohibition against the financing by
BAMIRCO's affiliates of investors in an equity financing arrangement, the Board believes that approval of
the activity is not likely to result in any conflicts of
interest.
There is no evidence in the record to indicate that
Applicant's engaging in the proposed activity would
lead to any undue concentration of resources, decreased or unfair competition, unsound banking practices, or other adverse effects. The Board's view is
that the subject application to engage in the proposed
equity financing activity as limited by this Order would
produce benefits to the public that outweigh any
potential adverse effects.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the balance of the public interest factors that the Board
is required to consider under section 4(c)(8) of the act
is favorable. This determination is conditioned upon
Applicant's strictly limiting its activities as described in
information provided in connection with this application and as provided in this Order.
Accordingly, the application is hereby approved.
This determination is subject to the limitations set
forth in this Order, the conditions set forth in section
225.4(c) of Regulation Y, and 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
the provisions of and purposes of the act, and the
Board's regulations and orders issued thereunder, or
to prevent evasion thereof.
The proposed activity shall be commenced not later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of San
Francisco.

650 Federal Reserve Bulletin • October 1982

By order of the Board of Governors, effective
September 1, 1982.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Teeters, Rice, and Gramley. Absent and not
voting: Governor Partee.
( S i g n e d ) WILLIAM W . WILES,

[SEAL]

Secretary of the Board.

BankEast Corporation,
Manchester, New Hampshire
Order Conditionally Approving
Establishment
of de novo branch of Guaranty Savings Bank
BankEast Corporation, Manchester, New Hampshire,
a bank holding company within the meaning of the
Bank Holding Company Act, has applied for the
Board's approval under section 4(c)(8) of the act
(12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the
Board's Regulation Y (12 C.F.R. § 225.4(b)(2)) to
establish a de novo branch office in Pelham, New
Hampshire, of its existing subsidiary, BankEast Guaranty Savings Bank, Salem, New Hampshire ("Guaranty Bank"), an organization engaged pursuant to the
laws of New Hampshire in the activities of a guaranty
savings bank. 1
The Board by order approved the acquisition of
Guaranty Bank by BankEast (formerly First Financial
Group) and determined that the operation of such an
institution was closely related to banking in New
Hampshire. 2
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been duly published. The time for filing comments and
views has expired and the Board has considered the
application and all comments received in light of the
factors set forth in section 4(c)(8) of the act (12 U.S.C.
§ 1843(c)(8)).3

1. A guaranty savings bank is essentially the same as a mutual
savings bank except that the former is a stock institution. That is, the
ownership of the equity interest in a guaranty savings bank is vested in
the holders of the capital stock or special deposits. Under the current
laws of New Hampshire, guaranty savings banks may engage not only
in typical savings bank activities, such as accepting time and savings
deposits, acting as fiduciary and dealing in real estate mortgage
financing, but also in typical commercial bank activities (including
accepting demand deposits and making commercial loans) that exceed
those permissible for thrifts under federal statutes.
2. "First Financial Group of New Hampshire, Inc.", 66 FEDERAL
RESERVE BULLETIN 594 (1980). However, the Board has not added
the operation of a guaranty savings bank to the list of permissible
activities in section 225.4(a) of Regulation Y.
3. This application has been accepted and processed under section
4 of the act, and is approved only on the condition that Guaranty Bank
limit its commercial lending activity to that currently permissible to
thrift institutions under federal statute law.




BankEast (consolidated deposits of $417.6 million)
operates four commercial banks, three guaranty savings banks, and a mortgage company. 4 Guaranty Bank
currently operates a single office in Salem, New
Hampshire. 5 This application involves the establishment of a de novo branch of Guaranty Bank. There are
no other subsidiaries of Applicant operating in the
Boston banking market. Accordingly, it does not appear that consummation of the proposed transaction,
as conditioned in this Order, would result in any
adverse effects on competition in any relevant market.
The Board has previously determined that because
of the unique structural and competitive situation
between commercial banks and guaranty savings
banks in New Hampshire, the operation of a New
Hampshire guaranty savings bank by a New Hampshire bank holding company is so closely related to
banking as to be a proper incident thereto. 6 N o evidence has been presented to indicate that banking
conditions have substantially changed in New Hampshire since the Board's consideration of this issue
earlier this year, and BankEast must limit Guaranty
Bank's deposit-taking or commercial lending activities
to remain under the nonbanking provisions of the act.
The Board, therefore, confirms its finding that the
operation of a guaranty savings bank may be so closely
related to banking in New Hampshire as to be a proper
incident thereto.
Notwithstanding this general finding, the Board
must also consider the particular facts of this case to
determine whether the proposed acquisition is a proper incident to banking, that is, whether it "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 interest,
or unsound banking practices."
In considering previous applications under the act
involving the affiliation of commercial banks and guaranty savings banks in New Hampshire in 1980 and
1982, the Board noted the potential for serious conflicts of interests, unfair competition, and circumvention of the Regulation Q interest rate differential that
might arise from the operation of these two types of
institutions at nearby locations or in close mutual

4. All financial data are as of March 31, 1982, and include acquisitions as of June 30, 1982.
5. Salem, New Hampshire, is located in the Boston banking
market, which is approximated by the Boston RMA.
6. "Profile Bankshares, Inc.", 61 FEDERAL RESERVE BULLETIN
901 (1975); "First Financial Group of New Hampshire, Inc.", 66
FEDERAL RESERVE BULLETIN 594 (1980); "Heritage Banks Inc.", 66
FEDERAL RESERVE BULLETIN 590 (1980); "BankEast Corporation",
68 FEDERAL RESERVE BULLETIN 379 (1982), and; "BankEast Corpor a t i o n " , 6 8 FEDERAL RESERVE BULLETIN 116 (1982).

Legal Developments

support of each other ("tandem operations"). 7 In
order to limit the potential for these adverse effects the
Board approved those previous cases upon certain
conditions barring the two types of institutions from
conducting tandem operations. The Regulation Q interest rate differential on account categories in existence in December 1975 remains in effect until the
Depository Institutions Deregulation Committee eliminates rate ceilings or until March 31, 1986. In addition,
it does not appear that relevant considerations have
changed since May 1982, when the Board last reiterated its policy against tandem operations of thrifts and
commercial banks. Accordingly, the Board believes
that the following conditions must remain in effect and
must be extended in connection with its approval of
this application: (1) that BankEast will not establish
any commercial bank facility within the service area of
any office of Guaranty Bank without Board consent;
and (2) that BankEast will not shift assets or liabilities
from Guaranty Bank to any other subsidiary or from
any other subsidiary to Guaranty Bank. 8
Financial and managerial considerations and future
prospects concerning Applicant and its subsidiaries,
including Guaranty Bank, are generally satisfactory.
Except as discussed above, the Board has found that
no other adverse effects are likely to result from
consummation of this proposal. Also, it appears that
the proposed affiliation would produce several public
benefits including the introduction of a new source of
services in Pelham, N e w Hampshire, where there is
currently only one banking facility. In addition, Guaranty Bank's de novo branch office will introduce
NOW accounts, drive-up facilities, and automated
teller machines to Pelham.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the balance of public interest factors the Board is
required to consider under section 4(c)(8) is favorable
provided that BankEast and Guaranty Bank abide by
the conditions set forth herein. Accordingly, the application is hereby conditionally approved, subject to the
limitations described above relating to the commercial
lending activities of Guaranty Bank and restrictions
relating to tandem operations between BankEast's
commercial and guaranty savings bank subsidiaries.
This determination is further subject to the conditions
set forth in section 225.4(c) of Regulation Y and to the

7. " B a n k E a s t C o r p o r a t i o n " , 6 8 FEDERAL RESERVE BULLETIN 116

and 379 (1982); "First Financial Group of New Hampshire, Inc.", 66
FEDERAL RESERVE BULLETIN 5 9 4 ( 1 9 8 0 ) .

8. These conditions would remain effective so long as these institutions, or their successors remain affiliated. However, BankEast may
apply for relief from these conditions when the Regulation Q interest
rate differential has been eliminated, or if the Board changes its policy
generally regarding tandem operations.




651

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 the provisions and purposes of
the act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
The transaction shall be made not later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of Boston.
By order of the Board of Governors, effective
September 2, 1982.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Teeters, Rice, and Gramley. Absent and not
voting: Governor Partee.
( S i g n e d ) WILLIAM W . WILES,
[SEAL]

Secretary

of the

Board.

Bankers Trust New York Corporation,
New York, New York
Order Approving Application to Engage in Certain
Futures Commission Merchant
Activities
Bankers Trust New York Corporation, New York,
New York, a bank holding company within the meaning of the Bank Holding Company Act of 1956, as
amended (12 U.S.C. §§ 1841-1849), has applied for the
Board's approval, under section 4(c)(8) of the act
(12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the
Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to
engage through a de novo subsidiary, BT Capital
Markets Corp., New York, New York ("BTCM"), in
acting as a futures commission merchant (an "FCM")
for nonaffiliated persons, in the execution and clearance of certain futures contracts on major commodity
exchanges. Such contracts would cover U.S. Government securities (including Government National Mortgage Association, or "GNMA" securities), negotiable
money market instruments (including, in particular,
domestic and Eurodollar certificates of deposit
("CDs")), foreign exchange, and bullion.
Notice of the application, affording interested persons an opportunity to submit comments and views on
the relation of the proposed activity to banking and on
the balance of public interest factors regarding the
application, has been duly published (47 Federal Register 18180 (1982)). The time for filing comments and
views has expired, and the Board has considered the
application and all comments received in light of the
public interest factors set forth in section 4(c)(8) of the
act.

652

Federal Reserve Bulletin • October 1982

Applicant is a bank holding company by virtue of its
control of Bankers Trust Company, New York, New
York ("Bank") and several other banks. Applicant
holds total consolidated deposits of $24.9 billion, and
is the sixth largest commercial banking organization in
New York State. 1 Applicant, through certain of its
subsidiaries, engages in various permissible nonbanking activities.
The Board recently approved an application by J. P.
Morgan & Co. Incorporated, New York, New York
("Morgan"), another bank holding company within
the meaning of the act, to engage in FCM activities. 2
Applicant's proposal closely parallels that submitted
by Morgan, and the characteristics of Morgan on
which the Board relied in considering Morgan's application are shared by Applicant. Accordingly, the
Board considers it appropriate to examine Applicant's
proposal within the same framework the Board used to
consider Morgan's application.
Closely Related to Banking
In order to approve an application submitted pursuant
to section 4(c)(8) of the act, the Board is first required
to determine that the proposed activity is closely
related to banking or managing or controlling banks. In
approving Morgan's application, the Board determined that Morgan's proposed activities as an FCM,
with respect to the contracts involved in its application, would be closely related to banking. 3 Upon
consideration of all the facts of record, the Board has
determined, for the reasons explained below, that
BTCM's proposed activities as an FCM, with respect
to the contracts involved in this application, would
also be closely related to banking.
Bullion and Foreign Exchange. In the Board's Order approving Morgan's application, it was noted
that the Board had determined previously that FCM
activities or their equivalent, with respect to bullion
and foreign exchange, were closely related to banking. The Board made these earlier determinations in
connection with applications submitted by Republic
New York Corporation, New York, New York, 4
and Standard and Chartered Banking Group Ltd.,
London, England. 5 In deciding that Morgan's activities with respect to bullion and foreign exchange
were closely related to banking, the Board applied

the same factors it employed in reaching these two
earlier determinations to Morgan's proposal.
Upon examination of the record, it appears that
Applicant's situation is substantially similar to that
of Morgan. Bank is a New York State bank, and
New York law grants it the authority to buy and sell
bullion and foreign exchange. 6 Bank presently
trades bullion in London and, since the resumption
of gold trading in the United States, Bank has been
trading bullion in the New York market. FCM
activities in bullion on the part of BTCM would thus
appear to complement Bank's trading in the cash
bullion markets. In addition, because Bank already
trades in the cash and forward markets in bullion
and foreign exchange for its customers, acting as an
FCM in futures markets for the same commodities
would appear to be an "integral adjunct" to these
present services. Finally, it is reasonable to assume
that market participants for whom Bank trades
would regard futures contracts in bullion and foreign
exchange as the functional equivalent of forward
contracts for some purposes. Accordingly, Applicant's proposed activity could be considered fundamentally a substitute for other services Bank already provides. On this basis, the board concludes
that Applicant's proposal to act as an FCM for
bullion and foreign exchange is closely related to
banking.
Government Securities and Money Market Instruments. Applicant's proposal also involves the execution and clearance of futures contracts covering
U.S. bonds, Treasury bills, GNMA securities, and
negotiable money market instruments, particularly
domestic and Eurodollar CDs.
As with the Morgan application, the Board has
examined the portion of the record for this proposal
that concerns FCM activities for U.S. bonds, Treasury bills, GNMA securities, and negotiable money
market instruments, in light of Applicant's experience in related markets for these instruments. Bank
already trades in futures contracts covering various
U.S. Government and GNMA securities for its own
account. Bank has long been a major participant, for
the account of customers as well as its own account,
in the U.S. Government securities cash market.
Indeed, Bank is a member of the Association of
Primary Dealers, and among the members of the
Association, Bank has been consistently one of the

1. Banking data as of June 30, 1982.
2. "J. P. Morgan & Co. Incorporated", 68 FEDERAL RESERVE
BULLETIN 5 1 4 (1982).

3. Id. at 514.
4. "Republic New York Corporation", 63 FEDERAL RESERVE
BULLETIN 951 (1977).




5. "Standard and Chartered Banking Group, Ltd.", 38 Federal
Register 27552 (1973).
6. New York Banking Law § 96.1 (McKinney 1971).

Legal Developments

top five dealers in terms of volume over the last five
years. In addition, Bank is already providing a
forward market for the account of customers in
GNMA securities. Applicant's experience in these
activities has provided it with useful expertise in
areas that are operationally or functionally similar to
FCM activities for nonaffiliated persons in U.S.
bonds, Treasury bills, and GNMA securities. Accordingly, the Board concludes that the proposed
FCM activities for these instruments would be
closely related to banking.
The Board has also determined, in the circumstances of this case, that BTCM's proposed activities as an FCM with respect to futures contracts in
negotiable money market instruments would be
closely related to banking. Bank is an active participant in the cash markets for various money market
instruments, and this experience has provided Applicant with useful expertise in trading the underlying commodity involved in these futures contracts.
Like futures contracts in U.S. Government securities, futures contracts in these instruments are used
in large part to hedge against interest-rate risk
associated with holding and trading financial assets
and liabilities. There appears to be little basis for
distinguishing between the operational or functional
characteristics of FCM activities with respect to
contracts in these money market instruments and
those of FCM activities with respect to contracts in
Government securities.
Balance of Public Benefits and Adverse

Effects

In order to approve this application, the Board is also
required to determine that the performance of the
proposed activities by BTCM, "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." (12 U.S.C. § 1843(c)(8)).
Public Benefits
Consummation of the proposal would provide added
convenience to those clients of Bank who trade in the
cash, forward, and futures markets for the commodities involved in this application. The Board expects
that the de novo entry of BTCM into the market for
FCM services would increase the level of competition
among FCMs already in operation. Accordingly, the
Board has concluded that the performance of the
proposed activities by BTCM can reasonably be expected to produce benefits to the public.



653

Adverse Effects
In its Order approving Morgan's application, the
Board recognized that the activity of trading futures
contracts involves various types of financial risks and
potential conflicts of interest, and is susceptible to
anticompetitive and manipulative practices. The
Board noted, however, that Congress has addressed
those types of possible adverse effects through the
passage of the Commodity Exchange Act, as amended, 7 and the creation of the Commodity Futures Trading Commission ("CFTC"). The Board also noted that
the CFTC has promulgated regulations to effectuate
the provisions of the Commodity Exchange Act. 8
Applicant has chosen to conduct the proposed activities through a separately incorporated subsidiary that
would be subject to the Commodity Exchange Act and
CFTC regulation. The Board has considered the impact of the applicable statutes and regulations in its
evaluation of the likelihood that significant adverse
effects regarding conflicts of interests, unsound banking practices, decreased or unfair competition, or
undue concentration of resources would develop in
this case.
Conflicts of Interests. Conflicts of interest that
could be associated with this proposal fall into two
broad categories: those arising out of the general
business of engaging in FCM activities, and those
arising out of the particular circumstances of an
FCM that is a subsidiary of a bank holding company. Rules and regulations promulgated and enforced
by the CFTC and the relevant futures exchanges
substantially reduce the possibility for significant
conflicts of the first category. In addition, BTCM
has committed that it will, in addition to timestamping orders of all customers to the nearest
minute, execute all orders, to the extent consistent
with customers' specifications, in strictly chronological sequence, and that BTCM will execute each
order with reasonable promptness with due regard
to market conditions. The Board concludes that the
risk of conflicts of interest arising from the general
business of an FCM that may result from consummation of the proposal as submitted is not inconsistent with approval.

7. U.S.C. §§ 1-24.
8. For example, CFTC regulations require FCMs to keep detailed
records on many aspects of FCM activities, such as segregation of
funds and investments made on behalf of customers; (17 C.F.R.
§§ 1.20, .25); prescribe protective procedures for such activities as
buying and selling contracts of two customers on opposite sides of the
same transaction; (17 C.F.R. § 1.39); and impose minimum financial
and related reporting requirements; (17 C.F.R. §§ 1.10-.18).

654

Federal Reserve Bulletin • October 1982

With respect to the second category of conflicts,
the Board believes that existing statutory and supervisory safeguards, together with Applicant's internal control procedures, will substantially reduce the
possibility of significant adverse effects. For example, section 23A of the Federal Reserve Act 9 would
require any extension of credit by Bank to BTCM to
be secured by collateral of a value at least 20 percent
greater than the amount of the credit, or at least 10
percent greater than the amount of the credit if
secured by the obligations of any state or political
subdivision of a state. Any loans from Bank to
BTCM's customers would be subject to examination
by the Board and appropriate state authorities.
Furthermore, Applicant maintains internal procedures that generally prohibit disclosure among employees of Applicant and its subsidiaries of confidential information pertaining to customers,
whether received from customers or derived from
internal sources. Finally, as discussed below, the
circumstances of this application alleviate any substantial concern regarding the possibility of voluntary tying. There thus appears to be no significant
danger that conflicts associated with the fact that
BTCM would be a bank holding company subsidiary
will develop under this proposal.
Unsound Banking Practices. An FCM clearing and
executing contracts for nonaffiliated persons is generally exposed to several types of financial risks.
However, the Board believes that Applicant's competence, experience, and resources sufficiently
equip BTCM to deal with these risks. Furthermore,
the Board believes that the Commodity Exchange
Act and CFTC regulations are significant factors in
ameliorating the general hazards of the FCM activities proposed in the application. 10
As an FCM for nonaffiliated persons, BTCM
would be contractually liable for nonperformance by
a customer of BTCM on each futures contract
traded by BTCM for that customer. Similarly, in
some circumstances, BTCM could be obligated to
meet a margin call delivered to a customer of
BTCM. Applicant and its subsidiaries appear well
prepared to deal with these potential obligations.
The risks that a customer of BTCM would default on
a contract or fail to meet a margin call are essentially
credit risks of a type Bank has significant expertise

9. 12 U.S.C. § 371c.
10. Among the provisions the Board has considered in this regard
are the CFTC's net capital requirements, (17 C.F.R. §§ 1.17(a),
.17(c)(2), .17(c)(3), .52(a)), and the sections of the Commodity Exchange Act granting the CFTC the authority to establish position
limits and approve or disapprove daily price movement limits on
futures contracts, (7 U.S.C. §§ 6a, 7a(12)).




in evaluating. In addition, the record indicates that
BTCM would employ a high degree of credit selectivity in choosing its customers, who will include
institutional and commercial clients of Bank.
Applicant's proposal differs from Morgan's proposal in that Applicant does not initially anticipate
that BTCM will be a member of the exchanges with
which it deals. Accordingly, BTCM would not initially be exposed to contingent liability that exists
through the assessment provisions of clearing association guaranty funds. Applicant has indicated that
BTCM may in future stages of its proposed operations become a clearing member of the exchanges it
deals with.
Should BTCM become a member of an exchange
or clearing association, the degree of risk to Applicant associated with providing BTCM's services
could be increased through the practice of certain
exchanges or clearing associations of requiring the
parent corporation of a clearing member to also
become a member of that exchange or clearing
association. Applicant has committed that BTCM
would not, without the prior consent of the Board,
become a clearing member of any exchange whose
rules impose such a requirement that has not waived
that requirement for Applicant.
On the basis of all the facts of record, the Board
has concluded that the inherent risks of providing
FCM services for nonaffiliated persons under the
circumstances of this proposal are manageable in
view of the expertise and resources of Applicant and
its subsidiaries, the commitments entered into by
Applicant and BTCM, and the regulatory environment in which the FCM activities would be
conducted.
Decreased or Unfair Competition. It is conceivable
that a commercial bank in Bank's position could
exert pressure on its customers to use the services
of the bank's affiliated FCM, or that a borrower
could perceive that its use of an affiliated FCM
could secure more favorable terms for the borrower
in the borrower's banking business. As the Board
noted in its Order approving the Morgan application, compulsory tying arrangements are prohibited
by the Bank Holding Company Act, and voluntary
tying can only take place when a firm possesses
significant market power." However, as was the
case with Morgan, it appears that Applicant lacks
the requisite market power for voluntary tying to
occur, in view of the substantial competition among
FCMs and in commercial lending. In addition, Ap-

11. "Citicorp" (Citicorp Person-to-Person Financial Center of
Connecticut, Inc.), 67 FEDERAL RESERVE BULLETIN 443, 446 (1981).

Legal Developments

plicant has committed that BTCM will advise each
of BTCM's customers in writing that doing business
with BTCM will not in any way affect any provision
of credit to that customer from Bank or any other
subsidiary of Applicant.
Conclusion
On the basis of all the facts of record, the Board has
determined that in the circumstances of this case, the
provision by BTCM of the proposed FCM services to
nonaffiliated persons would not result in decreased or
unfair competition, conflicts of interests, unsound
banking practices, or undue concentration of resources
in either commercial banking or the market for FCM
services. In considering this application, the Board has
taken all the relevant facts of record into account. In
the circumstances of Applicant's proposal, the Board
believes it is appropriate to give special consideration
to the following features of the application:
1. BTCM will not trade for its own account.
2. The instruments and precious metals upon which
the proposed futures contracts are based are essentially financial in character and the contracts are of a
type that a bank may execute for its own account.
3. BTCM has an initial capitalization that is in
substantial excess of that required by CFTC regulations, and will maintain fully adequate capitalization.
4. BTCM and Bank have entered into a formal
service agreement that specifies the services that
Bank will supply to BTCM. These services include
the assessment of customer credit risk and continuous monitoring of customer positions and monitoring the status of customer margin accounts.
5. Through its proposed service agreement with
Bank, BTCM will be able to assess customer credit
risks, and will take such assessments into consideration in establishing appropriate position limits for
each customer, both with respect to each type of
contract and with respect to the customer's aggregate position for all contracts.
6. Applicant has committed that BTCM would not,
without the prior consent of the Board, become a
clearing member of any exchange whose rules require the parent corporation of a clearing member to
also become a clearing member, unless the requirement is waived with respect to Applicant.
7. BTCM has committed that it will, in addition to
time-stamping orders of all customers to the nearest
minute, execute all orders, to the extent consistent
with customers' specifications, in strictly chronological sequence, and that it will execute all orders
with reasonable promptness with due regard to
market conditions.



655

8. Applicant and its subsidiaries have demonstrated
expertise and established capability in the cash,
forward, or futures markets for each of the contracts
involved.
9. Applicant will require BTCM to advise each of its
customers in writing that doing business with BTCM
will not in any way affect any provision of credit to
that customer by Bank or any other subsidiary of
Applicant.
10. Applicant is adequately capitalized to engage in
additional nonbanking activities.
11. BTCM will not extend credit to customers for
the purpose of meeting initial or maintenance margin
required of customers, subject to the limited exception of posting margin on behalf of customers in
advance of prompt reimbursement.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the public benefits associated with consummation of
this proposal can reasonably be expected to outweigh
possible adverse effects, and that the balance of the
public interest factors, which the Board is required to
consider under section 4(c)(8) of the act, is favorable.
Accordingly, the application is hereby approved. 12
This determination is subject to the conditions set
forth in section 225.4(c) of Regulation Y and 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 the provisions and purposes of
the act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
The proposed activities shall not commence later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of New
York.
By order of the Board of Governors, effective
September 20, 1982.
Voting for this action: Chairman Volcker and Governors
Wallich, Partee, Teeters, Rice, and Gramley. Absent and not
voting: Governor Martin.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

Secretary

of the Board.

12. The Board notes that the circumstances of this application differ
from those of a recent application submitted pursuant to section 25(a)
of the Federal Reserve Act. "Bankers International Corporation", 67
FEDERAL RESERVE BULLETIN 3 6 4 ( 1 9 8 1 ) . T h a t a p p l i c a t i o n i n v o l v e d

brokerage activities with respect to futures contracts covering greasy
wool, live cattle, and boneless beef. In addition, the regulatory
environment in which the activities proposed in the earlier application
would have taken place differs in key respects from that involved in
this application.

656

Federal Reserve Bulletin • October 1982

Citicorp,
New York, New York
Order Approving Acquisition
Association

of Savings and Loan

Citicorp, New York, New York, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board's approval under
section 4(c)(8) of the act (12 U.S.C. § 1843(c)(8)) and
section 225.4(b)(2) of the Board's Regulation Y
(12 C.F.R. § 225.4(b)(2)), to acquire 100 percent of the
voting shares of Fidelity Federal Savings and Loan
Association of San Francisco, San Francisco, California ("Fidelity"), and its wholly-owned service corporation. Fidelity is a federally chartered and insured
savings and loan association and is the successor by
supervisory conversion of Fidelity Savings and Loan
Association, San Francisco, California, a California
guarantee stock savings and loan association, that was
closed by the State of California on April 13, 1982, and
placed under the receivership of the Federal Savings
and Loan Insurance Corporation ("FSLIC"). 1
By letters, dated August 13 and September 8, 1982,
the Federal Home Loan Bank Board ("FHLBB")
requested that the Board act expeditiously upon this
application in light of the emergency nature of the
situation at Fidelity and its deteriorating financial
condition. In light of this request, the Board promptly
published notice of the application in the Federal
Register, providing twenty-one days for interested
persons to comment on the application. In addition, in
order to provide a full opportunity for public comment, the Board ordered informal hearings on the
application in both Washington, D.C., and San Francisco, California, to receive comments and testimony
from interested persons on the application and to allow
interested persons to question Citicorp concerning its
proposal.
In response to its request for comment on this
application, the Board received thirty-five written
comments opposing the acquisition ("protestants")
and eleven favoring the acquisition. Ten general comments were received that did not take a position on the
proposal. In addition, the Board received sworn testimony from twenty-three persons who appeared at the
two hearings, as well as statements and other documents submitted by the participants at the hearings.
As discussed below, a number of protestants requested that the Board order a formal hearing on the
application.
1. Fidelity is currently operated as a mutual association. In order to
effect consummation of the proposal, Fidelity will be converted from a
mutual association and issued a charter as a stock federal savings and
loan association.




The Board has carefully considered the issues raised
by the protestants in writing or in oral testimony and,
in the Appendix attached to this Order, which is an
integral part hereof, the Board has analyzed these
comments and evaluated their relevance to the
Board's conclusions in light of the factors set forth in
section 4(c)(8) of the act. In addition, the findings of
the Board pursuant to section 4(c)(8) of the act are
elaborated in the Appendix. Based upon the record
before the Board in this matter, the Board makes the
following findings.
Citicorp, with total consolidated assets of $120.1
billion and deposits of $74.5 billion, is the second
largest banking organization in the United States. 2
Citicorp operates three subsidiary banks: Citibank,
N.A., New York, New York ("Citibank"), the second
largest commercial bank in New York with $21.9
billion in domestic deposits, representing 12.3 percent
of the deposits in commercial banks in New York (as
of June 30, 1981); Citibank (New York State), N.A.,
Buffalo, New York; and Citibank (South Dakota),
N.A., Sioux Falls, South Dakota. 3 Citicorp also controls numerous nonbanking subsidiaries located
throughout the United States, including subsidiaries
engaged in consumer lending, mortgage lending, mortgage servicing, industrial banking, and commercial
lending in California.
Fidelity is a savings and loan association headquartered in San Francisco, California, which operates
eighty-one offices in California, primarily in the San
Francisco area, and has regulatory approval for three
additional offices. Fidelity, with total assets of $2.9
billion, is the 16th largest savings and loan association
in California and the 42nd largest in the United States.
Fidelity is primarily engaged in taking savings deposits
and making loans to individuals secured by mortgages
on real property. Fidelity also owns a service corporation that operates in the States of Hawaii and Nevada
and that engages in the activities of mortgage brokering, loan servicing, mortgage lending, real estate development, and the sale and leasing of equipment to
Fidelity.
Citicorp's banking subsidiaries and Fidelity operate
in separate markets. Fidelity operates in ten California
SMS As, where it controls from .24 percent to 3.7
percent of the total deposits in commercial banks and
savings and loan associations in those markets. 4 Citi-

2. Unless otherwise indicated, all financial data are as of June 30,
1982.
3. Citicorp received Board approval on July 21, 1982, to acquire
Citibank (Delaware), Wilmington, Delaware, a proposed new bank.
" C i t i c o r p " , 6 8 FEDERAL RESERVE BULLETIN 4 9 9 ( 1 9 8 2 ) .

4. Fidelity's highest market share of 3.7 percent is in the VallejoFairfield-Napa SMSA, where it ranks as the sixth largest depository
institution.

Legal Developments

corp operates approximately twenty offices of its
nonbank subsidiaries in California, including industrial
loan company offices that engage in limited deposittaking activities. Those offices that engage in the same
activities as Fidelity have only insignificant market
shares and are located primarily in southern California, whereas Fidelity is located primarily in northern
California. For example, in originating first mortgages,
Citicorp and Fidelity together account for less than
1.5 percent of the total volume of mortgages originated
in California. Citicorp's share of deposits among
all deposit-taking institutions in California is also
insignificant.
Citicorp's application to acquire Fidelity was filed
and has been considered by the Board under section
4(c)(8) of the Bank Holding Company Act, which deals
with the permissible nonbanking activities of a bank
holding company. As explained in the Appendix to this
Order, the Board believes that a federally insured
savings and loan association that offers NOW accounts and that exercises no greater commercial lending powers than are now permitted to federal savings
and loan associations under the Home Owners' Loan
Act ("HOLA") is not a bank for purposes of the act.
In this connection, the Board also notes that the
acquisition and ownership of Fidelity is subject to the
Savings and Loan Holding Company Act Amendments of 1967 ("S&LHC Act"). 5 Thus, the Board
concludes that Fidelity is not a "bank" under the act,
that Citicorp's application is properly filed under section 4 of the act, and that the interstate banking
prohibition of section 3(d) of the act 6 does not bar
Board approval of this application.
Section 4(c)(8) of the act authorizes a bank holding
company to acquire a nonbank company if the activities of the nonbank company are determined by the
Board to be "so closely related to banking or managing or controlling banks as to be a proper incident
thereto." 7 The Board has determined previously that
the operation of a savings and loan association is
closely related to banking8 and reaffirms that determination in this Order.
With respect to the "proper incident" requirement,
section 4(c)(8) of the act requires the Board to consider
whether the performance of the activity by an affiliate
of a bank holding company "can reasonably be ex-

5. 12 U.S.C. § 1730a.
6. 12 U.S.C. § 1842(d).
7. 12 U.S.C. § 1843(c)(8).
8. " A m e r i c a n F l e t c h e r C o r p o r a t i o n " , 6 0 FEDERAL RESERVE BULLETIN 8 6 8 ( 1 9 7 4 ) ; " D . H . B a l d w i n & C o . " , 6 3 FEDERAL RESERVE

BULLETIN 280 (1977); "Interstate Financial Corp.", 68 FEDERAL
RESERVE BULLETIN 316 (1982). A recent Board staff study of thrift
institutions supports the view that operating a thrift institution is
closely related to banking. "Bank Holding Company Acquisitions of
Thrift Institutions", September 1981.




657

pected 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."
In 1977, the Board considered the general question
whether savings and loan association ("S&L") activities are a proper incident to banking. At that time, the
Board determined that, as a general matter, S&L
activities were not a proper incident to banking because the potential adverse effects of generally allowing affiliations of banks and savings and loan associations were then sufficiently strong to outweigh such
public benefits as might result in individual cases.
" D . H . B a l d w i n & C o . " , 6 3 F E D E R A L RESERVE B U L LETIN 2 8 0 ( 1 9 7 7 ) .

Because of the considerations elaborated in D. H.
Baldwin & Co., the Board has not been prepared to
permit bank holding companies to acquire thrift institutions on a general basis. However, the Board has
consistently regarded the Bank Holding Company Act
as authorizing the Board to permit such an acquisition.
As the problems of the thrift industry began to become
more acute in 1981, the Board advised Congress that,
in the absence of enactment of emergency thrift acquisition legislation, the public interest might dictate that
the Board use its existing authority under the act to
approve interindustry acquisitions on a case by case
basis. The Board indicated that, in the case of a failing
thrift institution, any adverse effects of a bank holding
company affiliation with a thrift might be overcome by
the public benefits associated with preserving the
failing institution. In April of this year, the Board
approved such an application in order to prevent the
failure of a thrift institution. 9
In a letter, dated August 13, 1982, FHLBB Chairman Richard Pratt informed the Board that the
FHLBB had selected Citicorp as the winning bidder
for Fidelity and urged the Board to act promptly on the
Citicorp application in view of the deteriorating financial condition of Fidelity and its continued deposit
outflows, earnings losses and continued and increasing
need for assistance. In a further letter of September 8,
1982, Chairman Pratt advised the Board that there is
no evidence that the rate of decline in Fidelity's
position will slow or that its condition can improve
unless it is acquired by an institution with greatly
superior resources that can rebuild public confidence
in the institution.
Fidelity's predecessor was placed in receivership on
April 13, 1982, more than five months ago, and Fidelity's condition has steadily deteriorated since that time.
9. "Interstate Financial Corporation", supra note 8.

658

Federal Reserve Bulletin • October 1982

Fidelity continues to lose deposits at a rate in excess of
$1 million per day and to experience operating losses,
estimated at over $200,000 per day. Fidelity has now
exhausted its net worth and, as contemplated at the
time the FHLBB authorized the FSLIC to transfer the
assets and liabilities of Fidelity's predecessor to Fidelity, Fidelity's net worth will be maintained by advances from the FSLIC, absent consummation of
Citicorp's proposal.
In view of the determination by the FHLBB, the
primary supervisory authority for Fidelity, with respect to the emergency financial condition at Fidelity,
the substantial savings to the FSLIC through the
Citicorp proposal, the present circumstances of the
thrift industry and the financial condition of a large
number of its members, and the other favorable public
benefit considerations listed in the Appendix, the
Board has determined that consummation of the Citicorp proposal, as specifically conditioned in this Order, may reasonably be expected to result in substantial public benefits. These benefits include increased
competition and greater convenience to the public
through the restoration of Fidelity as an effective
competitor and through Citicorp's stated commitments to meet the credit needs of Fidelity's communities. In its evaluation of the public benefits in this case,
the Board also has taken into account the beneficial
effect on the financial community as a whole of
implementing an additional mechanism for the solution
of the difficult problems for the thrift industry and the
federal insurance funds posed by the poor earnings
situation of this industry.
In the exercise of its responsibility under the act, the
Board has carefully considered whether Citicorp's
financial and managerial resources are adequate to
effect the proposed acquisition of Fidelity. The Board
notes that Citicorp has extensive experience in both
the consumer banking and consumer finance areas and
appears fully capable of revitalizing a consumer oriented depository institution such as Fidelity. In its evaluation of Citicorp's financial resources, the Board has
reviewed relevant data from Citicorp's inspection reports and the examination reports of its subsidiaries as
well as official reports and filings with the Board,
including data on Citicorp's loan portfolio. Based upon
this review, the Board concludes that the proposed
acquisition would not represent a significant additional
burden on Citicorp's financial resources, particularly
in view of Fidelity's size in relation to that of Citicorp.
Although the Board has noted, with respect to both
Citicorp and other large multinational banks, a long
term trend toward lower capital ratios, the Board also
has taken into account as a favorable factor the
improvement in Citicorp's capital over the past one
and one-half years and the recent improvement in its



earnings. The Board expects that Citicorp will continue its efforts to improve its capital position and will
take such efforts into consideration in acting on applications for further expansion of Citicorp's activities.
On balance, the Board concludes that Citicorp has
both the financial and managerial resources needed to
acquire Fidelity and make it a viable competitor without significant adverse effects on Citicorp.
As explained in the Appendix, the Board has reexamined, in the context of this application, the general
adverse factors cited in the Board's D. H. Baldwin
decision, including regulatory conflict, erosion of institutional rivalry and the potential for undermining
interstate banking prohibitions, and has determined
that these adverse effects are outweighed by the
substantial public benefits that are expected to result
from the restoration of Fidelity as an effective
competitor.
In addition, the Board has considered other possible
adverse effects that might be associated with this
particular application, including the potential for decreased or unfair competition, conflicts of interests,
financial risks, diversion of funds, participation in
impermissible activities, evasion of interest rate limitations, unsound banking practices, and undue concentration of resources.
In view of Citicorp's limited presence in the relevant
California markets served by Fidelity, the number and
size of financial organizations operating in these California markets, the legal prohibitions against Citicorp's expansion of its bank subsidiaries into California, and the fact that Fidelity is a failing institution
with limited competitive vigor, the Board concludes
that this proposal would not have any significant
adverse effects on existing or potential competition in
any relevant market. Indeed, the proposed acquisition
will have a substantial beneficial impact on competition by ensuring the continued operation of Fidelity as
a viable institution through access to the financial and
managerial resources of Citicorp.
The affiliation of Citicorp and Fidelity also is not
likely to result in unfair competition in view of the
various conditions imposed by the Board that require
Fidelity to be operated independently and not utilized
to further or enhance the activities of Citicorp's other
subsidiaries. In addition, Fidelity's activities will be
limited to those permissible under the act and its
offices will be limited to locations at which banks
located in California may establish branches.
To guard against possible adverse effects of affiliation in this case between a banking organization and a
savings and loan association, including the potential
for unfair competition and diversion of funds, the
Board has established the following as conditions for
its approval of the application:

Legal Developments

1. Citicorp shall operate Fidelity as a federal savings and loan association having as its primary
purpose the provision of residential housing credit.
Fidelity shall limit its activities to those permitted to
federal savings and loan associations currently under the Home Owners' Loan Act and to bank
holding companies and their subsidiaries under section 4(c)(8) of the Bank Holding Company Act.
These limitations shall apply to Fidelity's whollyowned service corporation, Fidelity Subsidiary Corporation, which shall have two years from the date
of this Order to complete the divestiture of its
impermissible real estate development projects.
2. Fidelity shall not establish or operate a remote
service unit at any location outside California.
3. Fidelity shall not establish or operate branches at
locations not permissible for national or state banks
located in California.10
4. Fidelity shall be operated as a separate, independent, profit-oriented corporate entity and shall not
be operated in tandem with any other subsidiary of
Citicorp. Citicorp and Fidelity shall limit their operations to effect this condition, and shall observe the
following conditions: (a) No banking or other subsidiary of Citicorp shall link its deposit-taking activities to accounts at Fidelity in a sweeping arrangement or similar arrangement, (b) Neither Citicorp
nor any of its subsidiaries shall solicit deposits or
loans for Fidelity; nor shall Fidelity, directly or
indirectly, solicit deposits or loans for any other
subsidiary of Citicorp.
5. To the extent necessary to ensure independent
operation of Fidelity and prevent the improper diversion of funds, there shall be no transactions
between Fidelity and Citicorp or any of its subsidiaries without the prior approval of the Federal Reserve Bank of New York. This limitation encompasses the transfer, purchase, sale or loan of any
assets or liabilities, but does not include infusions of
capital from Citicorp or the payment of dividends by
Fidelity to Citicorp. 11
6. Citicorp shall not change Fidelity's name to
include the word "bank" or any other term that
might confuse the public regarding Fidelity's status
as a nonbank thrift institution.
7. Fidelity shall not convert its charter to that of a
state savings and loan association or other state
chartered thrift institution or to a national or state

10. The Federal Reserve Bank of New York is hereby delegated
authority to act on applications by Citicorp to open additional offices
of Fidelity under section 225.4(b)(1) of Regulation Y. (12 C.F.R.
§ 225.4(b)(1)).
11. The Board does not consider any extension of credit by Citicorp
to Fidelity that is necessary to maintain Fidelity's liquidity or general
financial integrity to be covered by this limitation.




659

commercial bank without the Board's prior approval.
The Board concludes that consummation of the
proposal, subject to the conditions set out in this Order
and the Appendix thereto, may not reasonably be
expected to result in conflicts of interests, unsound
banking practices, undue concentration of resources,
or other adverse effects.
The Board also has considered the contention that
the FSLIC erred in not accepting a bid from one of the
California savings and loan associations that bid for
Fidelity. The selection of the most favorable bid for
Fidelity is a matter committed to the jurisdiction of the
FSLIC and the Board concludes that proper administration of the law requires that there should be only
one administrative decision on this issue. The law
assigns to the Board the responsibility under section
4(c)(8) of the Bank Holding Company act for a determination of the public benefits and adverse effects of
the application before it—the Citicorp application—
and the Board has discharged that responsibility in this
Order.
Based upon the foregoing and other facts and circumstances reflected in the record and as more fully
set forth in the Appendix, the Board has determined
that the acquisition of Fidelity by Citicorp would result
in substantial and compelling public benefits that are
sufficient to outweigh any adverse effects that may
reasonably be expected to result from this proposal,
including any potential adverse effects of the affiliation
of a commercial banking organization with a thrift
institution. Accordingly, the application is approved
subject to the conditions and limitations described in
this Order, the Appendix hereto, and the record of this
application.
The Board has also considered the requests of a
number of commenters that the Board delay action on
the application in order to allow for Congressional
action on bills now pending before Congress that, if
enacted, would establish specific procedures for acquisition of a failing thrift institution by a bank holding
company. 12 The Board notes that the proposed legislation would not prohibit Board approval of this application, but rather would facilitate the acquisition of
failing thrifts by bank holding companies across state
lines. Moreover, the FHLBB has advised that the
procedures utilized in the Fidelity bidding process
generally complied with the terms of these bills; that
an extensive attempt, over a long period of time, was
made to find interested and capable bidders from
within the industry; that a broad range of bidders,
including banks and savings and loan associations,
12. H.R. 4603, 97th Cong., 1st Sess. (1981); S. 2879, 97th Cong., 2d
Sess. (1982).

660

Federal Reserve Bulletin • October 1982

were initially invited to bid; that a rebidding was
organized at which California financial institutions
were given an opportunity to better or equal Citicorp's
bid; and that, accordingly, the basic concepts contained in both versions of these bills were embodied in
the procedure by which the FSLIC decided to accept
the Citicorp proposal.
In view of these considerations, the Board's established legal authority to authorize the acquisition, the
request of the FHLBB for expedited treatment of the
application in view of the emergency situation of
Fidelity, the clear public benefits of the application,
and the costs and uncertainties of delay, the Board has
determined that it would not be in the public interest to
delay a decision on the application.
The Board has also carefully considered the requests of several protestants that the Board hold a
formal hearing regarding Citicorp's proposal. For the
reasons specified in the Appendix to this Order, the
Board does not believe a formal hearing is required or
appropriate in this case and, accordingly, denies the
requests of the protestants for a formal hearing.
Several protestants have requested that, in the event
the Board approves the proposed acquisition, the
Board stay the effective date of the approval pending
judicial review of the Board's action. The Board has
reviewed these requests in light of the factors generally applied by the courts on stay requests and, based
upon that review as explained in the Appendix to this
Order, does not believe that a stay of the Board's
Order in this case is appropriate or in the public
interest. Accordingly, the Board hereby denies protestants' request for a stay of the Board's Order.
By Order of the Board of Governors, effective
September 28, 1982.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Teeters, Rice, and Gramley. Absent and not
voting: Governor Wallich.
( S i g n e d ) JAMES M C A F E E ,

[SEALI

Associate

Secretary

of the Board.

Appendix
In connection with its decision on the application of
Citicorp, New York, New York, under section 4(c)(8)
of the Bank Holding Company Act to acquire Fidelity
Federal Savings and Loan Association of San Francisco, San Francisco, California ("Fidelity"), the Board
issues the following statement containing additional
findings of fact and conclusions of law with respect to,
and the Board's analysis of the issues raised by, the
application and the comments received. 1
1. Among the protestants to the application were the Independent
Bankers Association of America ("IBAA"), the U.S. League of




Fidelity's Status as a Nonbank under the Bank
Holding Company Act
In its evaluation of the application, the Board considered the objections of a number of the protestants that
Fidelity should be regarded as a "bank" for purposes
of the act; that Citicorp's application to acquire Fidelity was, therefore, improperly filed under the nonbank
provisions of section 4(c)(8) of the act and should have
been filed, and should be considered by the Board,
under section 3 of the act, which requires prior Board
approval before a bank holding company such as
Citicorp may acquire control of a bank; and that,
because Fidelity is a bank, Board approval of its
acquisition by an out-of-state bank holding company
such as Citicorp is barred by section 3(d) of the act. 2
Section 3(d) prohibits the Board from approving an
application by a bank holding company to acquire an
interest in a bank located outside of the state in which
the operations of the bank holding company's subsidiary banks are principally conducted (in Citicorp's
case, the state of New York), unless such an acquisition is expressly permitted by the law of the state in
which the acquiree bank is located.
The act defines a bank as an institution that accepts
deposits that the depositor has a legal right to withdraw on demand and that is engaged in the business of
making commercial loans. 3 As a federal savings and
loan association, Fidelity is authorized to offer NOW
accounts and to engage in certain limited commercial
lending activities. 4 Based on the terms and legislative
history of the act, the Board has previously determined that, because of the check-like powers of NOW
accounts and because they generally perform the same
function as demand deposits, NOW accounts satisfy
the demand deposit test in the definition of "bank" in
the act. 5
As indicated, the Board believes that a federally
insured savings and loan association that offers NOW
accounts and exercises no greater commercial lending
powers than are now permitted to a federal savings

Savings Associations ("U.S. League"), the California Bankers Association, the California Savings and Loan League, and the Conference
of State Bank Supervisors.
The California financial institutions supervisory authorities also
appeared at the informal hearing in San Francisco to express their
concerns with the application and to urge delay of any Board decision
pending Congressional action on emergency thrift acquisition legislation. The state representatives expressed concern over the interstate
nature of the acquisition as well as the impact it might have on
California financial institutions and indicated that the Board should
hold a formal hearing to explore and evaluate these questions.
2. 12 U.S.C. § 1842(d).
3. 12 U.S.C. § 1841(c).
4. 12 U.S.C. §§ 1464(b) and (c) and 1832. Fidelity offers NOW
accounts and has outstanding about $190 million in commercial real
estate loans, representing about 6 percent of Fidelity's total assets.
5. " F i r s t B a n c o r p o r a t i o n " , 6 8 FEDERAL RESERVE BULLETIN 253
(1982).

Legal Developments

and loan association under the Home Owners' Loan
Act of 1933, as amended ("HOLA") is not a "bank"
for purposes of the act. 6 In reaching this decision, the
Board has relied on the fact that the lending activities
of federal savings and loan associations have historically been highly specialized and, under current statutory and regulatory provisions, continue to be concentrated in home mortgages. HOLA expressly provides
that the primary purpose of a federally chartered
savings and loan association is the provision of residential credit. 7
In this regard, the Board also notes that Congress
has designed a separate and independent statutory
structure for the regulation of federally insured savings
and loan associations and their holding companies.
While Congress has recently permitted federal savings
and loan associations to engage in limited non-residential mortgage lending, Congress has left intact a separate statutory and regulatory framework for the operation and ownership of federally insured savings and
loan associations and banks. In the Board's view, this
provides a strong indication of Congressional intent
that a federally insured savings and loan association
not be subject to the act as a bank. Federal savings and
loan associations are included within the definition of
"thrift institution" under section 2(i) of the act
(12 U.S.C. § 1841(0). This differentiation between
banks and thrift institutions in the definitional sections
of the act provides additional support for the conclusion that federal savings and loan associations that
engage in activities no broader than permitted by the
terms of the HOLA are not "banks" within the
meaning of the act. 8
For these reasons, the Board concludes that Fidelity
is not a bank under the act and its acquisition by
Citicorp is not barred by section 3(d) of the act. 9 As

661

noted, the Board has required, as a condition of its
approval, that Citicorp maintain Fidelity as a federal
savings and loan association subject to the restrictions
of HOLA. An expansion of Fidelity's activities beyond that now permitted to a federal savings and loan
association would represent a significant alteration of
Fidelity's activities and would require prior Board
approval under section 225.4(c) of Regulation Y
(12 C.F.R. § 225.4(c)).
The Operation of a Savings and Loan Association is
Closely Related to Banking
Section 4 of the Bank Holding Company Act generally
prohibits a bank holding company from engaging,
either directly or through a subsidiary, in nonbanking
activities, that is, in activities other than those of
banking or managing or controlling banks. 10 The principal exception to this prohibition is contained in
section 4(c)(8) of the act, which authorizes a bank
holding company to acquire a company engaged in
activities that "the Board after due notice and opportunity for hearing has determined (by order or regulation) to be so closely related to banking . . . as to be a
proper incident thereto." 11 In making the determination whether an activity is a proper incident to banking, section 4(c)(8) requires that:
the Board shall consider whether its performance by
an affiliate of a holding company 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. 12
Section 4(c)(8) thus requires the Board to make two
separate findings in order for a nonbanking activity to

6. " F i r s t B a n c o r p o r a t i o n " , 6 8 FEDERAL RESERVE BULLETIN 2 5 3

(1982); "Interstate Financial Corp.", 68 FEDERAL RESERVE BULLETIN 316 (1982). The industrial loan company involved in First Bancorporation offered NOW accounts and made commercial loans in excess
of the amount permitted to a federal thrift. Consequently, the Board
concluded that it was " b a n k " for purposes of the act. On the other
hand, the state chartered and insured savings and loan association in
Interstate did not make commercial loans and committed to secure
FSLIC insurance, and thus the Board determined that it was not a
"bank."
7. 12 U.S.C. § 1464. Under the HOLA, a Federal savings and loan
association is not permitted to engage in general commercial lending.
It may, however, invest up to 20 percent of its assets in commercial
real estate loans and may invest an additional 20 percent of its assets
in commercial paper. (12 U.S.C. § 1464(c)(2)(A) and (B)). Fidelity's
current loan portfolio appears permissible under the HOLA.
8. The Board notes that Congress has under consideration legislation that would expand the commercial lending authority of federal
savings and loan associations and that would specifically exempt an
association exercising such expanded commercial lending authority
from the definition of bank in the act. S.2879, 97th Cong., 2d Sess.
§ 333 (1982).
9. The nonbank provisions of section 4 of the act do not have an
interstate prohibition similar to that in section 3(d) of the act. Lewis v.
BT Investment Managers, Inc., 447 U.S. 27 (1980). There is a




provision in the S&LHC Act that prevents a savings and loan holding
company from acquiring an interest in an insured institution that
would result in the formation of a multiple savings and loan holding
company controlling an "insured institution" in more than one state
(12 U.S.C. § 1730a(e)(3)). Because none of Citicorp's currentlyowned bank or nonbank subsidiaries is included within the definition
of "insured institution" under the S&LHC Act, the proposed acquisition does not violate this prohibition.
Several protestants have claimed that Fidelity will be operated as a
branch of Citicorp's subsidiary banks and thereby violate the McFadden Act prohibitions against interstate branching (12 U.S.C. § 36).
The Board has considered this claim and finds that Fidelity will not
take deposits nor solicit or make loans on behalf of any Citicorp
subsidiary bank. In addition, Fidelity will be operated separately and
independently from Citicorp's bank subsidiaries and, as noted in the
Order, the Board has imposed conditions to ensure such separate
operation and to prevent tandem operations. On this basis, the Board
concludes that Fidelity will not be operated as a branch of any
Citicorp subsidiary bank, and its operation as a subsidiary of Citicorp
will not contravene the McFadden Act.
10. 12 U.S.C. § 1843(a)(2).
11. 12 U.S.C. § 1843(c)(8).
12. Id.

662

Federal Reserve Bulletin • October 1982

be permissible for a bank holding company. 13 First,
the Board must determine whether the activity is
"closely related to banking," that is, whether as a
general matter the activity is permissible for bank
holding companies. Second, the Board must determine
whether the performance of the proposed activity by
an applicant bank holding company may reasonably be
expected to produce public benefits that outweigh
possible adverse effects.
On a number of occasions over the past ten years,
the Board has considered, both in the context of a
rulemaking proceeding and specific applications,
whether the operation of a savings and loan association by a bank holding company is a permissible
activity for a bank holding company under the closely
related and proper incident tests in section 4(c)(8) of
the act. 14 In 1974, the Board concluded, on the basis of
a record compiled after notice and a rulemaking hearing in which numerous parties participated, that the
operation of a savings and loan assocation is closely
related to banking within the meaning of section 4(c)(8)
of the act. 15 The Board, however, denied the application because the applicant failed to demonstrate that it
could satisfy the proper incident to banking test, that
is, that the reasonably expected public benefits of the
proposal outweighed possible adverse effects. 16 In a
number of cases decided since that time, the Board has
consistently held to the position that the operation of a
savings and loan association is closely related to
banking.17
In this case, the Board reaffirms its view as expressed in American Fletcher Corp., and in other
decisions, that the operation of a savings and loan
association is an activity that is closely related to
banking. Both banks and savings and loan associations
are financial intermediaries with liability structures
dominated by deposits and asset structures dominated
by loans. The traditional deposit-taking and lending
activities of a savings and loan association are functionally and operationally similar to activities performed by banks and require the same type of analysis
and expertise.
While the Board believes that the operation of a
savings and loan association is an activity that is

13. National Courier Association v. Board of Governors, 516 F.2d
1229, 1232-1233 (D.C. Cir. 1975).
14. E.g., "Newport Savings and Loan Association", 58 FEDERAL
RESERVE BULLETIN 313 (1972); " A m e r i c a n
FEDERAL RESERVE BULLETIN 8 6 8 (1974).

Fletcher

Corp.",

60

15. "American Fletcher Corp.", supra note 14.
16. In American Fletcher Corp., the Board denied on the basis of
adverse financial considerations.
17. E . g . , " M e m p h i s T r u s t C o m p a n y " , 61 FEDERAL RESERVE BULLETIN 3 2 7 (1975); " D . H . B a l d w i n & C o . " , 6 3 FEDERAL RESERVE
BULLETIN 2 8 0 ( 1 9 7 7 ) ; " I n t e r s t a t e F i n a n c i a l C o r p . " , 68 FEDERAL
RESERVE BULLETIN 3 1 6 (1982).




closely related to banking, in order to approve such an
activity for a bank holding company, the Board must
also find that the proposal meets the proper incident to
banking test of section 4(c)(8) of the act.
The Operation of a Savings and Loan Association as
a Proper Incident to Banking
In 1977, the Board considered the general question
whether the operation of a savings and loan association is a proper incident to banking. At that time and
on the basis of the factual record presented in that
case, the Board determined that, as a general matter,
such an activity is not a proper incident to banking
because the potential adverse effects of allowing affiliations between banks and savings and loan associations on a general basis were sufficiently strong to
outweigh the public benefits that might result in individual cases. "D. H. Baldwin & Co.," (63 FEDERAL
RESERVE BULLETIN 280 (1977)). In the Baldwin case,
the Board identified three potential adverse effects
that could be expected to result from the affiliation of a
bank and a savings and loan association: the conflict
between the statutory and regulatory frameworks
within which banks and savings and loans operate ; the
erosion of institutional rivalry between banks and
savings and loans; and the potential for undermining
federal prohibitions against interstate banking. Based
upon competitive considerations and these generalized
adverse effects, and in the absence of any compelling
public benefits, the Board denied the application. In
subsequent years, the Board approved a number of
applications by bank holding companies in New
Hampshire to acquire thrift associations, but only on
the basis of the historical affiliations between banks
and thrifts in that state and certain structural and
competitive considerations of that affiliation.18
In 1982, in "Interstate Financial Corporation," (68
FEDERAL RESERVE B U L L E T I N 3 1 6 ( 1 9 8 2 ) ) , t h e B o a r d

was called upon for the first time to determine whether
the adverse effects identified in the Baldwin decision
could be offset by the benefits to the public associated
with preserving a financially troubled savings and loan
association. In Interstate, the Ohio Superintendent of
Building and Loan Associations requested the Board
to consider the application on an expedited basis in
view of the facts that the association had nearly
depleted its capital and under Ohio law its liquidation
would have been required in the near future. While

18. E.g., "First Financial Group of New Hampshire", (66 FEDERAL RESERVE BULLETIN 594 (1980)). On this same basis, the Board had
earlier approved applications by bank holding companies to acquire
thrifts in the state of Rhode Island. See, e.g., "Old Colony Cooperat i v e B a n k " , (58 FEDERAL RESERVE BULLETIN 4 1 7 (1972)).

Legal Developments

specifically stating that it did not overrule its conclusion in Baldwin that, as a general matter, the operation
of a savings and loan association by a bank holding
company is not a proper incident to banking, the
Board concluded, on the basis of the specific facts in
the Interstate case, that the public benefits of preserving the savings and loan association as a viable competitor were so substantial as to outweigh the adverse
effects of the interindustry affiliation. In analyzing the
public benefits of the proposal, the Board considered
the financial conditions facing the thrift industry generally, the financial condition of a number of its
members, the lack of any other viable alternatives to
address the association's financial condition, the request of the Ohio supervisory authorities for prompt
action, and the potential ramifications of a liquidation
of the association on the association's customers, the
depositing public, the state of Ohio, and the Ohio
Deposit Guarantee Fund.
Generalized Adverse Effects Identified in the D. H.
Baldwin Case
In its consideration of the proper incident test in
connection with this application, the Board has reexamined each of the potential adverse factors found in
Baldwin.
With regard to the potential for regulatory conflict,
Citicorp is currently a bank holding company and is
therefore subject to the provisions of the Bank Holding Company Act. Fidelity, as a federal savings and
loan association, is subject to the provisions of the
HOLA. In order to reduce the potential for conflict
between the Bank Holding Company Act and HOLA,
the Board conditions approval of this application upon
Fidelity's activities being limited to those that are
permitted both to federal thrift institutions currently
under the HOLA and to bank holding companies and
their nonbank subsidiaries under section 4(c)(8) of the
act. 19 This condition does not limit the performance of
the traditional deposit-taking and lending activities of
federal savings and loan associations by Fidelity. 20
19. See note 25, below. In the event Fidelity intends to engage,
directly or through a service corporation, in any additional nonbanking activity not covered by this application, Citicorp and Fidelity
would be required to obtain the Board's approval under section 4(c)(8)
of the act and section 225.4 of Regulation Y. This application covers
the traditional deposit-taking and lending activities of federal savings
and loan associations as currently authorized under HOLA, mortgage
brokering, loan servicing, and mortgage lending.
20. In its D. H. Baldwin decision, the Board expressed concern
that a condition that limited the activities of a savings and loan
association owned by a bank holding company would place the
association at a competitive disadvantage and prevent the full realization of public benefits that are expected from the operation of the
association. Indeed, the FHLBB had opposed the acquisition of a
savings and loan by a bank holding company on this basis. While the
Board recognizes that Fidelity's affiliation with Citicorp will limit




663

Upon consummation of the proposal, Citicorp will
become a savings and loan holding company under the
S&LHC Act. 21 As a savings and loan holding company
and a bank holding company, Citicorp will be required
to conform its activities to the requirements of both
statutes. As a unitary savings and loan holding company, Citicorp is prohibited from engaging in any activity
that would have the effect of evading a law or regulation applicable to an insured savings and loan association (12 U.S.C. § 1730a(c)(l)). 22 In the Board's view,
Citicorp will be able to continue its bank holding
company and commercial bank operations without
conflict with the S&LHC Act or the HOLA.
In view of the above, the Board concludes that while
some adverse consequences may result because of
regulatory conflicts between the Bank Holding Company Act, the HOLA, and the S&LHC Act, these
adverse effects are mitigated by the conditions imposed in this Order to require Citicorp's compliance
with the terms of each statute and, as discussed below,
to prevent any unfair competitive advantage accruing
to Citicorp or Fidelity by reason of the affiliation.
The Board also continues to believe that, as a
general matter, the affiliation between banks and
thrifts may produce possible adverse effects by diminishing the interindustry rivalry that has produced price
and service benefits to the public and by undermining
the prohibition of the act against interstate banking. 23
However, these adverse effects, in the context of this
case, are substantially mitigated by the fact that Fidelity is a failing institution that has lost its competitive
vigor and is able to continue operations only through
substantial federal financial assistance. As discussed
below, the Board believes that the revitilization of and
restoration of public confidence in Fidelity is a public
benefit that, along with other public benefits, outweighs any adverse effects that may result from consummation of the proposal.

Fidelity's ability to offer all services authorized under HOLA, the
affiliation will restore Fidelity to a viable competitive position and
allow it to continue to offer most authorized services. These benefits
are, in the Board's judgment, more than sufficient to outweigh the fact
that Fidelity may no longer engage in real estate development and
similar impermissible activities under the act, activities that represent
only a small fraction of Fidelity's overall operations. In this regard,
Citicorp has indicated it has no desire to engage in such activities, but
intends to promote Fidelity's basic consumer oriented services. The
Board also notes that the FHLBB has urged approval of the application as providing substantial public benefits through the restoration of
Fidelity as an active competitor that outweigh any possible adverse
effects.
21. 12 U.S.C. § 1730a.
22. The FHLBB has granted a waiver to Citicorp of the restrictions
on the amount of debt that can be incurred by a nondiversified savings
and loan holding company (12 U.S.C. § 1730a(g)).
23. S e e " D . H . B a l d w i n & C o . " , (63 FEDERAL RESERVE BULLETIN

280 (1977)).

664

Federal Reserve Bulletin • October 1982

Moreover, to ameliorate further the possible adverse effects of affiliation in this case between a
banking organization and a thrift association, the
Board has conditioned approval of the proposal to
require that Fidelity continue to be operated as a
savings and loan association having as its primary
purpose the provision of residential credit, that its
offices be confined to California, and that Fidelity and
Citicorp's subsidiaries be operated separately and
independently of one another. The Board believes that
such restrictions will minimize the potential for erosion of statutory prohibitions against interstate banking and maintain the independence and specialized
function of the savings and loan industry.
Other Possible Adverse Effects
As discussed below, the Board in its evaluation of the
application has also considered the potential for additional adverse effects that might result from consummation of Citicorp's particular proposal, including the
potential for decreased or unfair competition, conflicts
of interest, financial risks, diversion of funds, participation in impermissible nonbanking activities, evasion
of interest rate limitations, and undue concentration of
resources.
In this connection, the Board considered the contentions of the protestants that, in addition to the general
effects cited by the Board in Baldwin, the following
adverse effects may result from consummation of the
Citicorp proposal: (1) the acquisition would result in a
major restructuring of the financial services industry
and Citicorp would obtain an unfair competitive advantage over commercial banks and thrift organizations that are not afforded the combination in one
organization of thrift and commercial banking powers;
(2) decreased or unfair competition would result because Citicorp's substantial resources would enable it
to strengthen the competitive position of Fidelity to
the detriment of the already weakened thrift industry
in California; (3) Citicorp would operate Fidelity in
tandem with its banking and other subsidiaries through
the use of Fidelity's deposits to fund Citicorp's other
activities or through the use of Citicorp's other subsidiaries to attract deposits to Fidelity; (4) Citicorp may
not have the financial ability and resources to operate
and revitalize Fidelity ; and (5) the transaction would
result in an undue concentration of resources.
Protestants also allege that other adverse considerations warrant denial of Citicorp's proposal, namely,
(1) the procedures utilized by FSLIC in the bidding
process for Fidelity were unfair and the Citicorp offer
for Fidelity was not the offer most favorable to the
FSLIC and the public; (2) no emergency situation
exists at Fidelity in that it is no longer a failing



institution now that it is under FSLIC receivership;
and (3) the Citicorp proposal is not the only available
alternative to address Fidelity's situation and thus
does not qualify for approval under the criteria cited
by the Board in its Interstate decision.
Unfair competition. The Board does not believe that
the evidence of record in this case supports the
proposition that the acquisition would result in a
major restructuring of the financial services industry. On the contrary, the Board believes that the
proposed acquisition, in light of Citicorp's commitments and the conditions imposed by the Board in
this Order, will result in the operation of two independent and different types of depository institutions supported by the financial and managerial
strength of a parent holding company that will
permit these organizations to provide substantial
public benefits in their respective product and geographic markets.
Citicorp has filed an application to acquire and
operate a savings and loan association in California
and has stated that it will operate Fidelity independently of its commercial banking activities. The
Board has considered the application only on this
basis and its approval as conditioned by this Order is
designed to ensure that Fidelity will be operated as a
savings and loan association and will continue to
serve the specialized purpose for which it was
organized and will not be utilized to further or
enhance the activities of Citicorp's subsidiary
banks.
Participation
in non-permissable
activities.
The
Board has given careful consideration to the contention that Citicorp will obtain an unfair competitive
advantage over commercial banks through affiliation
with a savings and loan association that may engage
in activities that are not authorized for banks, for
example, certain service corporation activities. To
address these concerns, the Board has limited Fidelity's activities to those permissible for bank holding
companies under the act and to locations at which
banks located in California could establish
branches. As the Board has previously held, the act
requires that the activities of a thrift institution that
is acquired by a bank holding company must be
limited to those permissible under the act. 24 In
conformance with that holding, the Board's approval of this application does not authorize Citicorp to

24. "Central Pacific Corporation", 68 FEDERAL RESERVE BULLETIN 382 (1982). See "Interstate Financial Corporation", supra note 17.

Legal Developments

engage in any activity through Fidelity that is not
permissible under section 4(c)(8) of the act. 25
In addition, this Order does not authorize Fidelity
to perform any activity that is not permitted to a
federal savings and loan association under the
HOLA. As a condition of this Order, Fidelity may
not, without specific approval by the Board, exercise any deposit-taking or commercial lending powers not currently authorized by statute for a federal
savings and loan association.
In order to prevent Citicorp from securing any
competitive advantage with regard to geographic
location over commercial banking organizations operating in California, the Board's approval is conditioned upon Applicant not establishing branches of
Fidelity at locations not permissible for national or
state banks located in California. In order to prevent
any unfair competitive advantage that might result
from Fidelity's ability to establish remote service
units in other states, the Board also conditions
approval upon Applicant not establishing or operating a remote service unit at any location outside of
California. The Board believes that these restrictions are consistent with Citicorp's statements to the
Board that Citicorp intends to operate Fidelity as a
savings and loan association in California and does
not intend to use Fidelity to achieve interstate
branching or interstate acquisitions or to attract
deposits from Citicorp's New York customers or
from anywhere else in the country outside of California.
Diversion of funds. As noted in the Order, to further
ensure that Fidelity is operated as a savings and loan
association and not utilized to further or enhance the
activities of any Citicorp subsidiary, the Board has
imposed the conditions that require Fidelity to be
operated as a separate, independent, profit-oriented
corporate entity and has prohibited Fidelity from
being operated in tandem with any other subsidiary

25. This requirement is also applicable to activities performed by
Fidelity through a service corporation. The Board has previously held
that, under the act, a bank holding company subsidiary may not
perform indirectly through a service corporation an activity that is
impermissible for the bank holding company. Central Pacific Corp.,
supra note 24. Fidelity's service corporation, therefore, must terminate all activities that are not permissible under the act.
Fidelity currently is engaged, through its service corporation, in a
number of real estate development projects, an activity that is not
permissible for a bank holding company. In accordance with Citicorp's commitments and the terms of this Order, Fidelity may not
engage in any additional real estate development projects either
directly or through a service corporation. In order to afford Fidelity a
reasonable period of time to divest currently held impermissible assets
and in view of the fact that such assets consist primarily of real estate
projects, the Board has provided a two-year divestiture period for
such assets.




665

of Citicorp. 26 The Board has also prohibited certain
transactions between Fidelity and Citicorp or any of
its subsidiaries without the Board's prior approval.
While the Board has prohibited Citicorp from changing Fidelity's name to include the word "bank" or
any other term that might confuse the public regarding Fidelity's status as a nonbank thrift institution,
the Board does not regard as unfair competition
Applicant's use of the "Citi" prefix or the name
"Citicorp" in Fidelity's name.
The Board believes these conditions also address
the concerns raised by several of the protestants
regarding the potential for diversion of Fidelity's
funds by Citicorp. The potential adverse effects that
might result from shifting assets and liabilities between Fidelity and Citicorp's other subsidiaries to
take advantage of differing interest rates27 and costs
is further protected against through the restrictions
on interaffiliate transactions imposed by the Federal
Reserve Act (12 U.S.C. § 371c) and the S&LHC Act
(12 U.S.C. § 1730a(d)).
The Board has also considered the contention that
Citicorp's financial support for Fidelity will give
Fidelity an unfair competitive advantage over its
thrift competitors. In the Board's opinion, the restoration of Fidelity as a viable competitor and the
increased competition and improved and expanded
services that are expected of Fidelity through access
to the financial and managerial resources of Citicorp
may only be viewed as a public benefit. 28 The fact
that a particular depository institution is owned by
an organization that is able to provide it with financial and managerial assistance may provide the
institution with a competitive advantage, but there is
nothing unfair about such an advantage. 29 Indeed,
one of the principal concerns of the Board under the
act is that a bank holding company should serve as a
source of financial strength and support for its
subsidiaries. Finally, the restrictions imposed in this

26. The Board has previously indicated that serious adverse effects,
including the potential for conflicts of interest, unfair competition and
evasion of federal interest rate limitations, may result from the tandem
operations of a bank and a thrift association. "First Financial Group
of N e w

Hampshire,

Inc.",

6 6 FEDERAL RESERVE BULLETIN

594

(1980); "Heritage Banks, Inc.", 66 FEDERAL RESERVE BULLETIN 590
(1980).
27. Fidelity is subject to interest rate ceilings under 12 C.F.R. Part
526.
28. The fact that Citicorp will receive assistance from the FSLIC
also will not result in unfair competition. According to the FSLIC, the
Citicorp proposal in fact entails less financial assistance than the
proposal of any other bidder. However, even if this were not the case,
the FSLIC assistance merely remedies the severe competitive disadvantage now affecting Fidelity as a result of its weak financial
condition.
29. The Board also notes that a number of other thrift institutions in
California are owned by parent organizations that are able to provide
their subsidiaries with substantial financial support.

666

Federal Reserve Bulletin • October 1982

Order that Fidelity be operated as a separate, profitoriented savings and loan association will also protect against unfair competition by Fidelity through
its affiliation with Citicorp.
The Board also has considered the contention that
the Board's limitation of thrift acquisitions by bank
holding companies to situations involving a failing
institution and its case-by-case approach to such
situations creates an unfair competitive situation. 30
The Board's approach to the question of thrift
acquisitions by bank holding companies is mandated
by the act. Where the Board finds adverse effects
associated with a bank holding company proposal,
the Board is precluded from approving the proposal
in the absence of countervailing public benefits.
Because of the adverse effects associated with the
affiliation of banks and thrifts that were identified by
the Board in Baldwin, the Board may only approve
such an application where public benefits based on
the facts in a particular case outweigh adverse
effects. Such compelling public benefits have only
been found where the thrift institution is failing.
Undue Concentration of Resources. The Board has
considered whether the proposal will result in an
undue concentration of resources. Citicorp is the
second largest banking organization in the country
on the basis of total assets. Citicorp controls 1.29
percent of domestic deposits in commercial banks,
savings banks, and savings and loan associations in
the United States. On this basis, Citicorp is the third
largest financial institution in the United States.
Upon consummation, Citicorp would control approximately 1.37 percent of deposits in such institutions and would remain the third largest institution
on this basis. The acquisition would increase Citicorp's total assets by 2.5 percent.
Fidelity is the 42nd largest savings and loan
association in the United States, and is not viewed
by the Board as a dominant firm in its industry or in
any geographic market. On the basis of these facts
and in view of Fidelity's financial condition, the
Board concludes that consummation of the proposal
will not result in any undue concentration of resources.
The Board concludes that consummation of the
proposal, subject to the conditions set out in this
30. The Board notes that none of the protestants stated that it had
been prevented from submitting an offer to acquire Fidelity. Those
California institutions that did submit offers to acquire Fidelity were
afforded a second opportunity to meet or exceed the Citicorp bid. In
any event, the federal deposit insurance agencies have traditionally
limited the group of institutions from which bids are solicited to ensure
an orderly and prompt resolution of an emergency situation, and this
matter is appropriately reserved to the discretion of these agencies.




Order, may not reasonably be expected to result in
conflicts of interests, unsound banking practices, or
other adverse effects. 31
Reasonably Expected Public Benefits
The Board has also examined the record to determine
whether consummation of the proposal may reasonably be expected to produce public benefits. The
Board believes that Citicorp's acquisition of Fidelity
will provide a substantial and compelling public benefit in that Citicorp will provide Fidelity with sufficient
new capital funds and managerial assistance to restore
Fidelity as a viable competitor and to restore public
confidence in Fidelity. Fidelity is a substantial organization, serving thousands of customers in numerous
communities. In the Board's opinion, the public benefits generally associated with revitalization of a failing
financial institution are magnified in this case in view
of Fidelity's size and the number of its customers.
The record establishes that Citicorp has the financial
and managerial resources and the commitment to
serving the convenience and needs of the public to
achieve this result. The acquisition will restore an
active and effective competitor to, and increase competition in, numerous California markets, presents the
potential for expansion and increased competition in
other California markets, ensures the continuation of
services by Fidelity to its customers and the public,
and protects the interests of Fidelity's depositors, the
public, the savings and loan industry generally, and
the FSLIC. 32
The Board has considered as a substantial public
benefit the savings to the FSLIC that will result from
the proposal. The FHLBB has advised the Board that
the Citicorp bid was $143 million more favorable to

31. In reaching the conclusion that consummation of the proposal
would not have a substantial impact on Citicorp's overall financial
position and that Citicorp has both the financial and managerial
resources needed to acquire Fidelity and make it a viable competitor
without any significant adverse effects to Citicorp, the Board has
considered the comments of the IBAA, the U.S. League, and others
regarding Citicorp's foreign loan portfolio.
32. In this connection, the U.S. Department of Justice stated that
the acquisition of thrift institutions by bank holding companies is
procompetitive and will provide enhanced services at competitive
prices. Similarly, the Comptroller of the Currency urged approval of
the proposed acquisition on the basis that it would be procompetitive
and would provide significant public benefits. The Comptroller also
expressed the view that the cost savings to the FSLIC would be a
public benefit to other FSLIC-insured institutions and their depositors
in view of the potentially large liabilities of the FSLIC as a result of the
financial condition of the thrift industry. The Federal Deposit Insurance Corporation took no position on this particular application, but
stated its belief that the Board has discretion under the Bank Holding
Company Act to approve the acquisition by a bank holding company
of a thrift and that such an acquisition would provide an additional
alternative for resolving situations involving financially troubled financial institutions and would be in the public interest.

Legal Developments

FSLIC than any other bid received and $303 million
less than the cost of maintaining a phoenix association.
The FHLBB has also advised the Board that, using an
optimistic projection of interest rates, Citicorp's bid
was $56 million more favorable than the next lowest
second round bid and $35 million less than the cost of
maintaining a phoenix association.
Citicorp's commitment to the introduction of new
products and services and the expansion of current
services of Fidelity through access to Citicorp's financial and managerial resources also lends weight toward
approval. In addition to the substantial public benefits
associated with the revitalization of Fidelity that have
already been cited, Citicorp has stated that it intends
not only to restore Fidelity as a competitor but to
enhance its competitive position and to promote its
services to the public by providing Fidelity with access
to resources for the expansion of services in the areas
of NOW accounts, consumer loans, credit cards,
education loans, trust activities, and automated teller
facilities. This expansion of Fidelity's services and
operations also will provide greater convenience to the
public. Citicorp's experience and expertise, particularly in managing large scale operations and in the design
and implementation of electronic banking and financial
data processing, also should provide gains in efficiency
at Fidelity.
Finally, Citicorp has a good record of service to the
convenience and needs of the public, and has stated
that it intends to use its resources to promote and
expand Fidelity's service to its communities, including
services directed to the credit needs of low- and
moderate-income neighborhoods in those communities. 33 In this connection, Citicorp representatives
testified at the informal hearings that Fidelity would
consult with community groups to determine the credit
needs of the community and would study complaints
with respect to Fidelity's lending and correct any
deficiencies. The Board expects that Citicorp will
adhere strictly to these commitments.
Fidelity's Financial Condition
As stated above, protestants have asserted that Fidelity should not be regarded as a failing institution
because its condition has stabilized as a result of the
FSLIC receivership. According to protestants, this
FSLIC assistance could continue for some time without significant deterioration in Fidelity's condition.
Similarly, protestants state that declining interest rates

33. Although the Board does not believe that the Community
Reinvestment Act is applicable in the case of section 4 applications,
the Board has considered Citicorp's record under that statute in acting
upon this application.




667

have reduced funding costs for Fidelity and this also
has served to relieve pressure on the institution.
The Board concludes that any realistic assessment
of Fidelity's condition compels the conclusion that
Fidelity is a failing institution. It is undisputed that, on
April 13, 1982, following a period of substantial deposit losses and substantial borrowings from the Federal
Home Loan Bank of San Francisco ("Home Loan
Bank") of approximately $1.4 billion to maintain liquidity, the California Savings and Loan Commissioner closed Fidelity's predecessor and appointed the
FSLIC as receiver for the state on the basis that
Fidelity's predecessor was in an unsafe condition and
conducting its business in an unsafe and injurious
manner. Substantial operating losses have continued
at Fidelity since the receivership was announced and
Fidelity's approximately $2.9 billion in assets is now
supported by loans from the Home Loan Bank of over
$1.7 billion. Deposit withdrawals at Fidelity have also
been steady and substantial since appointment of the
FSLIC as receiver and have forced the FSLIC to
guarantee an advance of an additional $325 million to
Fidelity from the Home Loan Bank since April 13. The
FHLBB has provided the Board with data indicating
that deposit outflows at Fidelity have increased during
the first twenty-one days of September. The FHLBB
has also advised that Fidelity's operating losses continue substantially unabated and that Fidelity has
exhausted its net worth.
Much of the market value of a depository institution
such as Fidelity is derived from its deposit base. More
than 20 percent of Fidelity's deposit base has dissipated since March 31, and thus, the assets held by the
FSLIC as receiver must be regarded as wasting. In
addition, advances from the Home Loan Bank have
grown to the point that they exceed Fidelity's deposits
by a considerable margin. The FHLBB has informed
the Board that these advances now represent by far
the greatest ratio of advances to savings of any federally insured thrift institution.
The lack of public confidence in Fidelity even after
the creation of the FSLIC receivership supports, in the
Board's view, the statement of the FHLBB that there
is no evidence that the rate of decline in Fidelity's
position will slow or that its condition can improve
unless it is acquired by an entity with greatly superior
resources that can ensure Fidelity's revitalization and
rebuild public confidence in Fidelity. 34 In this regard,
the FHLBB has advised the Board that Fidelity's

34. Such an acquisition is also necessary to prevent the loss of
employees that Fidelity is experiencing. The current receivership
cannot provide the stability needed to retain key employees. Delay in
resolving Fidelity's problems would mean that even greater efforts
would be required to rebuild both employee morale and public
confidence.

668

Federal Reserve Bulletin • October 1982

acquisition by Citicorp would make Fidelity viable
again and remove any future risk that extraordinary
assistance by the FSLIC would be needed.
For these reasons, the Board concludes that Fidelity's continuing and unresolved financial problems
require prompt action to minimize the loss to the
FSLIC and provide Fidelity with a strong parent
organization capable of restoring public confidence in
that institution.
In the Board's judgment and in light of the commitments made by Citicorp and the conditions imposed in
this Order, the public benefits expected from the
restoration of public confidence in Fidelity and in the
savings and loan industry, the substantial savings to
the FSLIC, and reasonably expected gains in efficiency, increased competition and greater convenience to
the public, outweigh any adverse effects that are
associated with this proposal.
FSLIC Bid Procedures
Protestants have also asserted that, contrary to the
determination by the FSLIC, Citicorp's bid to acquire
Fidelity would not in fact result in the lowest cost to
the FSLIC and that the FSLIC erred in not accepting a
bid from one of the savings and loan associations that
bid for Fidelity. The Board does not believe that this is
a proper issue for resolution by the Board under
section 4(c)(8) of the act. 35 Section 4(c)(8) of the act
does not require a determination that a given proposal
is the most desirable that could be presented. Rather,
the statute directs the Board to determine whether
reasonably expected public benefits from any given
proposal outweigh possible adverse effects. The fact
that alternative purchasers may be available is not
determinative.
Even if the Board were to conclude that another bid
should have been accepted by the FSLIC, this decision would have little meaning because the Board has
no authority to award the right to acquire Fidelity to
another bidder. The decision as to which bid to accept
is committed to the exclusive discretion of the FSLIC.
An orderly administrative process dictates that the
Board not substitute its judgment for that of the
FSLIC. The Board does, however, note that the

35. The Board has considered the contention that the FSLIC is not
authorized to sell the assets held by Fidelity because of litigation
pending regarding the appointment by the FHLBB of the FSLIC as
federal receiver. Fidelity Savings and Loan Association v. FHLBB, et
al„ No. 82-4337 and 82-4354 (N.D. Calif.). The Board notes that the
appointment of the FSLIC as receiver has not been stayed or
otherwise enjoined and its appointment as receiver is, therefore, valid
at this time. Nor has the Court enjoined the FSLIC from transferring
Fidelity to Citicorp.




procedures followed by the FSLIC generally complied
with the procedures now under consideration by Congress for acquisition of failing federally insured thrift
institutions and that FSLIC's decision to allow a
second round of bidding for Fidelity in order to
provide California financial organizations with an opportunity to match the bid of Citicorp adhered to the
spirit of these proposals. The FSLIC also published
the procedures it followed in the second round bidding
in the Federal Register (47 Federal Register 31322
(1982)).
Available Alternatives to the Citicorp Proposal
A number of the protestants argue that the Board's
authority to approve a failing thrift acquisition under
the act is limited to the situation presented in the
Interstate case, where the Board found that one of the
factors in favor of approval was the fact that the bank
holding company's proposed acquisition was the only
available means by which the thrift institution could be
maintained as a competitor and its liquidation prevented.
The fact that the proposed bank holding company
acquisition of the thrift association in Interstate was
the only available means of dealing with its condition
was only one of the considerations that the Board took
into account in approving the Interstate application.
There is no legal requirement under the act that there
be no other viable alternative to a bank holding
company acquisition of a failing thrift, and there is no
indication in its Interstate decision that the Board
intended that this factor must be present in every bank
holding company application to acquire a failing
thrift.36 As was the case in Interstate, the primary
regulator for Fidelity has explored all of the alternatives and has determined that the Citicorp proposal is
substantially more favorable to Fidelity, its depositors
and creditors, and the FSLIC than any other bid and
substantially reduces the insurance liability and risk to
the FSLIC, including the potential cost, as compared
to any other bid. The presence or absence of alternatives is but one factor in the evaluation of public
benefits. As indicated, the Board's responsibility under the act is to balance public benefits against possible adverse effects. In this case, the Board believes
that the balance of public benefits is favorable and that
the application may be approved.

36. The approval of the primary regulatory authority for an acquisition of a failing thrift association is also not a requirement under
section 4(c)(8) of the act. In any event, in this case, the primary
regulator, the FHLBB, has urged Board approval of the application as
a means of restoring Fidelity to a viable condition.

Legal Developments

Requests for Formal Hearing
Several protestants (including the IBAA, the U.S.
League, the California Bankers, Crocker National
Bank, Fidelity Federal Savings and Loan Association,
Glendale, California, the California supervisory authorities, and Option Advisory Services, Inc.) have
requested that the Board hold a formal hearing regarding Citicorp's proposal. They raise as the basis for a
hearing the following: (1) discovery is necessary so
that all relevant facts associated with the application,
including the complete record of the FSLIC's consideration of various bids, may be provided to protestants; (2) the need to "probe" or "examine" whether
Citicorp has the financial resources to operate Fidelity
in light of current international economic conditions;
(3) the need to assess the policy implications of
Citicorp's application and the competitive effects of
the proposal on banks and thrifts in California and the
nation; (4) whether Fidelity is or will be operated as a
bank and whether its acquisition violates section 3(d)
of the BHC Act; (5) whether Citicorp's bid was more
favorable than any other bid; and (6) whether Fidelity's financial condition is so serious as to warrant
Board approval of this application.
Both the Board's Rules of Procedure37 and the
Federal Register notice regarding this application state
that any request for a formal hearing must indicate
why a written proceeding would not suffice in lieu of a
formal hearing and identify the disputed issues of fact
that would be resolved at the formal hearing. The
persons requesting a hearing did not comply with this
procedure. Rather, the hearing requests were conclusory in nature, did not delineate specific disputed
facts, and were based on issues derived from conclusions drawn from undisputed facts.
Apart from the fact that the protestants did not
comply with the Board's regulations and its notice, the
protestants also failed to raise any factual issues that
would warrant a hearing. With respect to the FSLIC
bid procedures, the Board believes that the issue of
which bid was the more favorable and the fairness of
FSLIC's procedures are not relevant to this proceeding and, thus, a hearing on these issues is not warranted. The question raised concerning Fidelity's status
under the act involves an issue of law that also does
not require a hearing. There is no dispute that Fidelity
offers NOW accounts and makes commercial real
estate loans in accordance with the provisions of the
HOLA.
Assessment of the quality of Citicorp's or Citibank's
loan portfolio and Citicorp's financial ability to oper-

37. 12 C.F.R. § 262.3(e) (1982).




669

ate Fidelity is a responsibility that is vested in the
federal bank regulatory agencies, and public participation in this process would be inconsistent with the
entire scheme of federal bank regulation. The Board's
assessment under the Bank Holding Company Act of
Citicorp's financial resources, including its overseas
loan portfolio, is based upon detailed examination of
the operations of Citicorp's subsidiaries. 38 Protestants
have alleged no dispute as to the facts regarding
Citicorp's financial resources or its foreign loans, but
rather have merely advanced conjectural and conclusory statements to support their hearing request on
this point. Indeed, the hearing requests are framed in
terms of a need to probe or examine rather than on any
specific or supported allegation of financial weakness.
In the Board's opinion, protestants' questions regarding Citicorp's financial resources and the conclusions to be drawn therefrom do not require a formal
hearing. Protestants were afforded ample opportunity
to present their testimony on these points and to
question Citicorp. To warrant a hearing, the Board
believes tht protestants must raise more than generalized claims and requests to "probe" an applicant's
financial resources. In the Board's opinion, the hearing requirement in the act, as it has been interpreted by
the courts, does not require the Board to hold a
hearing on the basis of conjecture or unsupported
allegations and the Board is not required "to investigate every potential adverse contingency which a
contestant hypothesizes." 39
The essential element of protestants' claim of unfair
competition is a request that the Board evaluate the
competitive impact of the proposal based on the
allegation that Citicorp would be an effective and
aggressive competitor with advantages not available to
its banking and thrift competitors. As explained
above, the Board believes it has addressed these
concerns through the imposition of appropriate conditions that eliminate the unfair competitive advantage
that the protestants claim may result, and in any event
material facts are not in issue regarding the allegation
of unfair competition.
The Board believes that the procedures it used to
solicit and explore the various policy and legislativetype concerns raised by protestants were appropriate
under the circumstances and fully adequate under the
act. The Board imposed no limitation on the length or
nature of the written comments. In addition, the Board
held informal hearings in Washington, D.C. and San
Francisco, California that were attended by a total of
38. Trial-type hearings are not required when examination or testing
is a better way to find the facts. 2 K. Davis, "Administrative Law
Treatise" § 12.12 at 455 (1979).
39. Connecticut Bankers Association v. Board of Governors, 627
F.2d 245, 254 (D.C. Cir. 1980).

670

Federal Reserve Bulletin • October 1982

approximately 200 people. All persons that wished to
speak at these hearings were given an opportunity to
do so, and all persons that spoke at the informal
hearings were given an opportunity to submit questions to Citicorp regarding the application. A number
of such questions were received and Citicorp responded to all of them. 40
In addition, the Board has explored the policy issues
raised by protestants on a number of occasions over
the last ten years, including in a rulemaking proceeding and oral presentation to the Board. Last year, the
Board's staff completed a detailed study of the implications of thrift acquisitions by bank holding companies. The Board solicited public comment on the
general issue of such acquisitions in conjunction with
this study, and reviewed some 379 written comments
on that study.
Based on the foregoing considerations, the Board
does not believe that a formal hearing is required or
appropriate in this case and denies the requests of the
protestants for a formal hearing.41
Request for a Stay of the Board's Order
Several protestants, including the IBAA, have requested that, in the event the Board approves the
proposed acquisition, the Board stay the effectiveness
of the approval pending judicial review of the Board's
action. The Board has reviewed these requests in light
of the factors generally applied by the courts on stay
requests, 42 and, based upon that review, does not
believe that a stay of the Board's Order in this case is
appropriate.
First, as explained in detail above, the Board believes that its approval of Citicorp's acquisition of
Fidelity, subject to the conditions imposed in the
Order, complies with all applicable procedural and
substantive requirements and is supported by substantial evidence. Accordingly, it is unlikely, in the
Board's opinion, that any protestants will be successful in overturning the Board's approval on judicial
review.
40. The hearing officer declined to present one series of questions to
Citicorp on the basis that the questions were unrelated to the
application to acquire Fidelity.
41. The Board provided 21 days notice in the Federal Register of
receipt of Citicorp's application to acquire Fidelity. Because the
Federal Register Act states that a statutory requirement of notice and
opportunity for hearing is satisfied by a notice period of fifteen days
(44 U.S.C. § 1508), the Board believes that the notice provided in this
case is legally sufficient. The Board also believes that the twenty-one
day comment period was appropriate in view of the request of the
FHLBB that the Board act expeditiously and the fact that the Board
also held two informal hearings at which interested persons could
provide comments on the application and question Citicorp concerning the proposal. The Board believes that interested persons have
been afforded ample opportunity under the circumstances to submit
their views on the proposal.
42. Virginia Petroleum Jobbers Association v. Federal Power
Commission, 259 F.2d 921, 925 (D.C. Cir. 1958).




Second, the Board has expressly found that Citicorp's acquisition of Fidelity is not likely, under the
conditions imposed by the Board, to result in any
significant unfair competitive advantage or other competitive harm to depository institutions that compete
with Fidelity or Citicorp or to their depositors or the
public generally. Moreover, in this case, there is little
likelihood that consummation of the acquisition would
prevent a reversal of the transaction should such
action subsequently become necessary because Fidelity will be maintained as a separate corporate entity.
Thus, in the Board's view, there is no likelihood of any
irreparable harm to any protestant if a stay is not
granted.
Third, the Board has found that, in light of Fidelity's
significant continuing daily net loss of deposits and its
operating losses, a delay in consummation of this
proposal would permit continued significant financial
harm to Fidelity that would otherwise be remedied by
consummation of the proposal. Moreover, delay
would continue to encourage the departure of employees and to exacerbate the adverse publicity regarding
Fidelity since its closing by supervisory authorities.
Because of these facts, the Board is concerned that it
may be more difficult to restore Fidelity to a viable
condition if a stay is granted.
The loss of Fidelity's important competitive presence would harm the customers for financial services
in its market areas. Citicorp would also be harmed by a
stay pending review since delay would increase significantly the amount of funds Citicorp would be required
to expend to revitalize Fidelity. Finally, during the
pendency of any stay, the FSLIC, as receiver of
Fidelity, may be required to extend funds to Fidelity to
cover its continuing operating losses and to assure
maintenance of some minimal net worth, funds that
could be used to assist other financially troubled
insured institutions. The Board finds, therefore, that
the granting of a stay would cause significant harm to
third parties.
Finally, the Board believes that a stay in this case is
clearly not in the public interest. A stay would leave
unresolved for a lengthy time the ultimate control and
ownership of a failing thrift institution, would prevent
the restoration of Fidelity as an active competitive
force in its market area, and could result in substantial
losses to the FSLIC.
For these reasons, the Board hereby denies protestants' request for a stay of the Board's Order.
Conditions of Approval
The Board's approval of this application is further
subject to the conditions set forth in section 225.4(c) of
Regulation Y and to the Board's authority to require
such modification or termination of the activities of a

Legal Developments

holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with the
provisions and purposes of the act and the Board's
regulations and orders issued thereunder, or to prevent evasion thereof. The transaction shall be made
not later than three months after the effective date of
this Order, unless that period is extended for good
cause by the Board or by the Federal Reserve Bank of
New York acting pursuant to authority hereby delegated.
By order of the Board of Governors, effective
September 28, 1982.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Teeters, Rice, and Gramley. Absent and not
voting: Governor Wallich.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

Secretary of the Board.

Order Under Section 25(a) Federal Reserve

Act

Citibank Overseas Investment Corporation,
Wilmington, Delaware
Order Approving Application to Engage in Certain
Futures Commission Merchant Activities
Citibank
Overseas
Investment
Corporation
("COIC"), Wilmington, Delaware, has applied for the
Board's approval under section 25(a) of the Federal
Reserve Act (12 U.S.C. § 615) and section 211.5 of the
Board's Regulation K (12 C.F.R. § 211.5) to engage,
through its subsidiary, Citifutures Limited, London,
England, in the activity of acting as a broker with
respect to gold bullion on the London Gold Futures
Market ("LGFM") and with respect to United Kingdom government bonds, and Eurodollar and sterling
deposit interest rate futures on the London International Financial Futures Exchange ("LIFFE").
COIC is a corporation organized under section 25(a)
of the Federal Reserve Act (an "Edge Corporation")
and is wholly-owned by Citibank, N.A., New York,
New York. Citibank is a subsidiary of Citicorp, New
York, New York, which is the second largest commercial banking organization in the United States with
consolidated assets of $120.1 billion as of June 30,
1982.
Edge Corporations are organized for the purpose of
engaging in international or foreign banking or other
international or foreign operations and are authorized
to invest in foreign companies that engage in activities
that are usual in connection with the transaction of
banking or other financial operations abroad. Regulation K lists activities determined by the Board to be



671

usual in connection with foreign banking or financial
operations and therefore permissible for a foreign
subsidiary of a United States banking organization
(12 C.F.R. § 211.5(d)). Included on this list, in section
211.5(d)(14) of Regulation K, are any activities that the
Board has determined by regulation or order are
closely related to banking under section 4(c)(8) of the
Bank Holding Company Act (12 U.S.C. § 1843(c)(8)).
By order dated July 1, 1982, the Board determined that
the activity of acting as a futures commission merchant ("FCM") in the execution and clearance of
certain futures contracts is, in the circumstances described in that order, closely related to banking under
section 4(c)(8). "J. P. Morgan & Co., Incorporated",
68 FEDERAL RESERVE BULLETIN 5 1 4 (1982) ( " M o r -

gan"). Therefore, absent action of the Board to remove the activity from coverage of section
211.5(d)(14) of Regulation K, the activity of acting as a
broker or an FCM for contracts based on precious
metals and certain financial instruments would be a
permissible activity for a foreign subsidiary of a United States banking organization.
An investor bank holding company, Edge Corporation or member bank would ordinarily be entitled to
engage in any permissible activity under the general
consent or notification procedures of Regulation K
(12 C.F.R. §§ 211.5(c)(1), (2)). However, in acting on
the Morgan application, the Board noted that the
activity of trading futures contracts involves various
types of financial risks to the FCM. In light of the
potential risks to the organization resulting from the
conduct of this activity, the Board has determined
under section 211.5(c) of Regulation K that it is
appropriate in all cases to suspend the operation of the
general consent procedures with respect to FCM activities conducted on exchanges outside the United
States and to require all investors that wish to engage
in these activities to obtain the prior approval of the
Board.1 A requirement of prior approval will enable
the Board to assess the financial condition of the
applicant in light of the activities to be commenced and
the rules of the exchange on which the activity is to be
conducted, and to ensure that such activities will be
conducted in accordance with high standards of financial prudence.
In the Morgan application, the Board identified
certain risks to which an organization is exposed by
engaging in FCM activities. As an FCM in the London
futures markets, Citifutures would be contractually
liable for nonperformance by a customer on each
futures contract traded by Citifutures for that custom-

1. The Board has determined that the prior notification, rather than
the specific consent, procedures of section 211.5(c) of Regulation K
shall apply to any investor that seeks to engage in this activity on the
LGFM or the LIFFE through a foreign subsidiary.

672

Federal Reserve Bulletin • October 1982

er. In addition, it appears that Citifutures may be
obligated to meet special variation margin calls made
of customers. However, these risks are essentially
credit risks of the type that a large and sophisticated
international banking organization such as Citicorp
has significant expertise in evaluating. Citifutures has
comprehensive written procedures for evaluating the
credit risk of potential customers, many of whom will
be clients of Citicorp/Citibank entities worldwide.
Other risks identified in the Morgan order related to
the risk associated with membership on certain commodity exchange clearing associations where the
member is exposed to a contingent liability for the
contractual obligations due the association by all clearing members. This potential liability exists through the
assessment provisions of certain clearing association
guaranty funds to which all clearing members must
contribute. Some exchanges could also require the
parent corporation of a clearing member to become a
member of the exchange or clearing association. In
this regard, the Board notes that the London exchanges involved in this application differ significantly
in a number of respects from the exchanges and
clearing associations considered by the Board in the
Morgan application. Neither the LGFM nor the
LIFFE is a "mutual market" in which members
mutually guarantee each other's liability either directly
or through mandatory assessments by a guaranty fund.
On the London exchanges, clearing of contracts is
done by the International Commodities Clearing
House Ltd. ("ICCH"), an independent clearing house
that is jointly owned by the London clearing banks and
that assures the integrity of the LGFM and the LIFFE.
In effect, ICCH substitutes itself as the counterparty in
all floor executions. ICCH's performance guaranty is
supported by its share capital, by the implied support
of its bank ownership and by a requirement that
members post initial and variation margin payments.
In considering this application, the Board has placed
particular reliance on the following factors associated
with COIC's proposal:
1. Citifutures, which is organized exclusively to
perform a brokerage function, will not trade for its
own account.
2. The instruments and precious metals upon which
the proposed futures contracts are based are essentially financial in character and are of a type that a
bank may execute for its own account.
3. Citifutures has and will maintain capitalization
that is fully adequate to conduct these activities in a
safe and sound manner.
4. Citifutures and Citibank have established a credit
approval process that specifies the services that
Citibank will supply to Citifutures, including the
assessment of customer credit risk, the continuous



monitoring of customer positions, and monitoring
the status of customer margin accounts.
5. By means of its credit approval process with
Citibank, Citifutures will assess customer credit
risks, and will take such assessments into consideration in establishing appropriate position limits for
each customer, both with respect to each type of
contract and with respect to the customer's aggregate position for all contracts.
6. Citifutures has stated that it will, in addition to
time-stamping orders of all customers to the nearest
minute, execute all orders, to the extent consistent
with customers' specifications, in chronological sequence, and that it will execute all orders with
reasonable promptness- with due regard to market
conditions.
7. Citicorp and its subsidiaries have demonstrated
expertise and established capability in the cash,
forward and futures markets for the type of contracts involved.
8. The provisions of FCM services by Citifutures to
a customer will not in any way affect the provision
of credit or other services to that customer by the
Citicorp organization.
9. Citifutures will not extend credit to customers for
the purpose of meeting initial or maintenance margin
required of customers, subject to the limited exception of posting margin on behalf of customers in
advance of prompt reimbursement.
The Board will consider these and similar factors in
acting on future proposals under Regulation K by
investors to engage in the activity of acting as an FCM
on the LGFM and the LIFFE.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the application should be and hereby is approved. This
determination is subject to such modification as the
Board finds necessary to assure compliance with the
provisions and purposes of the Federal Reserve Act
and the Board's regulations thereunder. In this regard,
the Board expects that COIC will notify the Board of
any substantial changes in the activities or regulations
of LIFFE, LGFM, or ICCH that would materially
increase the liability of the Citibank organization in
conducting these activities.
In considering this application, the Board recognized that a member bank may seek to conduct these
activities through a foreign branch, rather than
through a subsidiary. The Board is concerned that
such activities should be conducted by all U.S. banking organizations in accordance with high standards of
banking and financial prudence. In this regard, the
Board is considering the issuance of a statement of

Legal Developments

policy guidelines or regulations governing the participation of U.S. banking organizations in such activities.
By order of the Board of Governors, effective
September 29, 1981.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Teeters, Rice, and Gramley. Absent and not
voting: Governor Wallich.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

Secretary

of the Board.

Order Under Bank Merger Act
St. Joseph Valley Bank,
Elkhart, Indiana
Order Approving

Merger of Banks

St. Joseph Valley Bank, Elkhart, Indiana ("Applicant"), a subsidiary of SJV Corporation, Elkhart,
Indiana, a bank holding company within the meaning
of the Bank Holding Company Act, has applied for the
Board's approval under the Bank Merger Act
(12 U.S.C. § 1828(c)) to merge with the First National
Bank of Goshen, Goshen, Indiana ("Bank"), under
the charter and title of Applicant. St. Joseph Valley
Bank has concurrently applied for membership in the
Federal Reserve System. 1
Notice of this application, affording interested persons an opportunity to submit comments and views,
has been given in accordance with the Bank Merger
Act and the Board's Rules of Procedure (12 C.F.R.
§ 262.3(b)). As required by the Bank Merger Act,
reports of the competitive effects of the merger were
requested from the United States Attorney General,
the Comptroller of the Currency, and the Federal
Deposit Insurance Corporation. Comments were received from the Office of the United States Attorney
General, Mr. C. Gerald Pressler and Mr. Howard
Young. 2
Applicant is the 14th largest commercial banking
organization in Indiana, with total deposits of $269.8
million, representing 1.02 percent of the total deposits

1. The application for membership is being processed by the Federal
Reserve Bank of Chicago under delegated authority.
2. Mr. Pressler's remarks relate to matters of private negotiation
between shareholders and Applicant, and do not present grounds for
denial of this application. Mr. Young, the second protestant, expressed concerns regarding the administration of individual trust
accounts by Applicant, and the managerial strengths of Applicant.
After review of Mr. Young's remarks, Applicant's response, and a
report of an investigation into Mr. Young's allegations conducted by
the Indiana Department of Financial Institutions, it has been determined that Mr. Young's protest does not present grounds for denial of
this application.




673

in commercial banks in the state. 3 Bank is the 89th
largest commercial bank in the state with total deposits
of $70.5 million, representing less than one percent of
the total deposits in commercial banks in the state.
Upon consummation of the proposed merger, Applicant would become the 10th largest commercial banking institution in the state and would control approximately 1.29 percent of the total deposits in commercial
banking institutions in the state. Accordingly, consummation of this proposal would not have an appreciable
effect upon the concentration of commercial banking
resources in Indiana.
Applicant is located in Elkhart County and operates
14 banking offices: 12 located in Elkhart City, one
located in Nappanee, Indiana, and one located in
Bristol, Indiana. Bank is also located in Elkhart County and operates five offices, all located in Goshen,
Indiana. All offices of Applicant are at least 5 miles
from any offices of Bank. Elkhart County is a growing
population center adjacent to South Bend, Indiana,
and is included in the South Bend-Elkhart Ranally
Metro Area. The Board has previously determined
that Elkhart County is part of a banking market that
closely approximates the South Bend-Elkhart Ranally
Metro Area, which includes Elkhart County and St.
Joseph County. 4
In connection with this application, the Board has
considered comments submitted by the Office of the
Deputy Assistant Attorney General for the United
States, Antitrust Division ("Antitrust Division"), concerning the relevant market. The Antitrust Division
claims that the relevant banking market in this case
consists of the Elkhart County SMSA, which consists
of Elkhart County alone. On the basis of this definition
of the relevant banking merger, the Antitrust Division
has concluded that the merger of Applicant and Bank
would have a significantly adverse effect on competition. 5
The Antitrust Division makes several assertions in
support of its definition of the relevant banking market. First, the Antitrust Division asserts that commuting patterns and patterns of industrial and commercial
development and interaction between Elkhart County
and the surrounding counties, do not justify inclusion
of the adjacent counties in the Elkhart banking market.

3. All banking data are as of June 30, 1981.
4. See, e.g., "American National Bancorp, Inc.", Board Order
dated April 13, 1979. The relevant market as defined by the Board
includes all of Elkhart County, Indiana, and St. Joseph County,
Indiana (including South Bend but excluding Warren and Olive
townships) as well as Cass County, Michigan, and five townships in
Berrien County, Michigan (Oronke, Berrien, Buchanan, Niles, and
Bertrand).
5. Letter from Mr. Ronald G. Carr, Deputy Assistant Attorney
General, Antitrust Division, Department of Justice, to the Chairman
of the Board of Governors, dated May 14, 1982.

674

Federal Reserve Bulletin • October 1982

Second, the Antitrust Division asserts that, because
banks in Indiana are restricted to operations within a
single county by state branching laws and by a state
prohibition on multi-bank holding companies, banks in
Elkhart County do not have the opportunity to compete with banks in adjacent counties by establishing
branch offices or affiliates in those counties. 6
As the Board has previously indicated, the Board
believes that the relevant banking market must reflect
the commercial and banking realities and should consist of the localized area where the banks involved
offer their services and where local customers can
practicably turn for alternatives. 7 The key question to
be considered in making this selection "is not where
the parties to the merger do business or even where
they compete, but where, within the area of competitive overlap, the effect of the merger on competition
will be direct and immediate." 8
Applying these principles to the facts of this case,
the Board concludes that the relevant banking market
within which to evaluate the competitive effects of this
proposal includes Elkhart County, Indiana, St. Joseph
County, Indiana (including South Bend and excluding
Warren and Olive townships), Cass County, Michigan,
and five townships in Berrien County, Michigan
(Oronke, Berrien, Buchanan, Niles and Bertrand).
This area closely approximates the South Bend-Elkhart RMA, and includes the two major population
centers in Northern Indiana, South Bend and Elkhart
City, which are approximately 12 miles apart and
connected by extensive highway systems.
The Board believes that the Antitrust Division's
narrow definition of the relevant banking market as
Elkhart County alone unduly emphasizes the specific
locations at which banks are permitted to do business
in Indiana. The close proximity of Elkhart and South
Bend and the surrounding commercial and industrial
area has resulted in a substantial amount of commuting
across counties in this area. A study of commuting
patterns conducted by the Indiana Employment Security Division in 1972 revealed that approximately one
out of nine workers in this area commutes to work
outside of the workers' home county. Nearly 20 percent of the labor force employed in Elkhart County
commuted into Elkhart County from adjacent counties, with the vast majority of those commuters coming
from counties within the South Bend-Elkhart RMA. In
addition, over six percent of the work force residing in
Elkhart County commuted to other counties to work,

6. Indiana Code Annotated §§ 28-1-17-1 & 28-8-2-1 (Burns 1981).
7. S e e " W y o m i n g B a n c o r p o r a t i o n " , 6 8 FEDERAL RESERVE BULLE-

TIN 313, 314 (1982).
8. United States v. Philadelphia National Bank, 374 U.S. 321, 357
(1963); United States v. Phillipsburg National Bank, 399 U.S. 350,
364-65 (1970).




with St. Joseph County and townships in Michigan as
the final destination of over three-quarters of these
commuters.
These commuting patterns are corroborated by inclusion of Elkhart County and St. Joseph County in a
single Ranally Metro Area. An RMA is defined generally as a compact area with relatively high population
density that is linked by commuting, retail, and wholesale trade patterns. 9 By definition, an RMA includes a
central city or cities and all adjacent continuously built
up areas as well as certain other areas. These other
areas are included in a given RMA if a minimum of 20
percent of the labor force of that area or 8 percent of
the total population of that area commutes to the
central city and its adjacent built-up areas. The
Board's judgement is that an RMA usually designates
a defined geographic locality that is demographically
and commercially integrated. On this basis, the Board
has in many cases used RMA's as guides in defining
relevant geographic banking markets. 10
The Board believes that the fact that banks in
Indiana are legally restricted in their ability to branch
does not preclude them from competing for business
outside of their home county or preclude customers
from seeking the services of out-of-county banks. For
example, during 1980, 1981 and the first half of 1982,
Applicant spent approximately 29 percent of its total
advertising budget in efforts to reach customers in St.
Joseph County. 11 In addition, Applicant regularly targets over 20 percent of its banking solicitation calls to
potential customers in the South Bend-Elkhart area
outside of its home county of Elkhart County, and has
experienced a higher success rate from calls made
through this program to potential customers located
outside of its home county than from calls made to
potential customers within Elkhart County.
The record also indicates that non-residents of Elkhart County view banks in Elkhart County as practicable alternatives to banks in their home counties. For
example, during 1980, 1981 and the first half of 1982,
over 25 percent of the home improvement loans made
by Applicant (measured both by number and principal
amount) were sought by and made to residents of the
South Bend-Elkhart area living outside of Elkhart
County, Applicant's home county.

9. Rand McNally and Company, "1981 Commercial Atlas & Marketing Guide," p. 2 (1981).
10. See, e.g., "Ellis Banking Corporation," 64 FEDERAL RESERVE
BULLETIN 884 (1978).
11. While South Bend may be regarded as the media center in the
South Bend-Elkhart area, Elkhart city is served by three local radio
stations, two local television stations, and several local newspapers
and magazines. As a result, use of competing media in South Bend
evidences a conscious choice by banks located in Elkhart City to
reach potential customers in South Bend and the surrounding area.

Legal Developments

The Antitrust Division contends that the high unemployment rate presently being experienced by both
Elkhart and St. Joseph Counties (approximately 12
percent) has substantially reduced commuting in the
South Bend-Elkhart area. The record in this case does
not support this conclusion, and the Antitrust Division
has not provided any data showing that the unemployment rate has affected commuters in the Elkhart area
in any greater proportion than non-commuters. Further, while the unemployment rate at a given time may
affect the demand for banking services in the short
term, the relevant geographic market for a given
product is shaped by long-term employment patterns
and commercial development.
Accordingly, on the basis of the facts of record,
including the demographic and commercial integration
of the South Bend-Elkhart area, the substantial commuting patterns throughout the area, the significant
employment of area-wide marketing techniques, and
the recognition and active use by customers throughout the area of banks outside their home county as
practicable alternatives to banks within their home
county, the Board has determined that the relevant
geographic market in this case is the South BendElkhart area and is not, as the Antitrust Division
suggests, limited to Elkhart County alone.
Within the relevant banking market, Applicant is the
fourth largest of 22 commercial banking organizations,
controlling 11.0 percent of total deposits in commercial banks in the market. Bank ranks as the market's
12th largest commercial banking organization and
holds 2.9 percent of the total deposits in commercial
banks in the market. Upon consummation of the
proposed merger, Applicant would become the market's second largest commercial banking organization
and would control 13.9 percent of the total deposits in
commercial banks in the market.
Consummation of the proposed merger would eliminate some existing competition in the relevant banking
market. However, in view of all of the facts of record,
including the relatively low level of market concentra-

12. The four firm concentration ratio is 53.4 percent, and upon
consummation, would increase to 56.3 percent.




Legal Developments

675

tion, 12 Bank's small size, and the existence of numerous remaining banking alternatives in the market, the
Board does not regard the elimination of competition
in this case to be so significant as to warrant denial of
the application. Accordingly, the Board concludes that
consummation of the proposed merger would not have
a significant adverse effect upon existing or potential
competition. Thus, competitive effects are consistent
with approval.
The financial and managerial resources of Applicant, its parent, and Bank are regarded as generally
satisfactory and their future prospects appear favorable. As a result, considerations relating to banking
factors are consistent with approval. Although no new
banking services would be introduced to the relevant
banking market as a result of the proposed transaction,
the customers of Bank would benefit from the addition
of new services, including access to Applicant's Automatic Teller Machine network, the addition of VA and
FHA lending programs, and the addition of data
processing services. Thus, considerations relating to
the convenience and needs of the community to be
served are consistent with approval and tend to outweigh any adverse competitive effects of the transaction. Based upon the foregoing and other considerations reflected in the record, the Board's judgment is
that consummation of the transaction would be consistent with the public interest.
On the basis of the record and for the reasons
discussed above, the application is hereby approved.
The transaction shall not be consummated before the
thirtieth day following the effective date of this Order,
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Chicago, pursuant to delegated authority.
By order of the Board of Governors, effective
September 28, 1982.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Teeters, Rice, and Gramley. Absent and not
voting: Governor Wallich.
( S i g n e d ) JAMES M C A F E E ,

[SEAL]

Associate

continued on next page.

Secretary

of the Board.

676

Federal Reserve Bulletin • October 1982

ORDERS APPROVING APPLICATIONS
AND BANK MERGER ACT

UNDER THE BANK HOLDING COMPANY

ACT

By the Board of Governors
During September 1982, the Board of Governors approved the applications listed below. Copies are available
upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.

Section 3

Applicant

Cripple Creek Bancorporation, Inc.,
Cripple Creek, Colorado
First City Bancorporation of Texas, Inc.,
Houston, Texas
Mercantile Texas Corporation,
Dallas, Texas
Texas Commerce Bancshares, Inc.,
Houston, Texas

By Federal Reserve

Board action
(effective
date)

Bank(s)

Bank of Cripple Creek,
Cripple Creek, Colorado
First City Bank—East, N.A.,
El Paso, Texas
Ashford Bank,
Houston, Texas
Texas Commerce Bank-Greens Crossing,
N.A.,
Houston, Texas

September 27, 1982
September 7, 1982
September 17, 1982
September 15, 1982

Banks

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

Section 3
Applicant
Affiliated Bankshares of Colorado, Inc.,
Boulder, Colorado
American Heritage Bancorp, Inc.,
El Reno, Oklahoma
Ashby Bancshares, Inc.,
Ashby, Minnesota
Belfield Bancshares, Inc.,
Belfield, North Dakota
B.O.A. Bancshares, Inc.,
Houston, Texas
Cedar Valley Bankshares, Ltd.,
Charles City, Iowa
Central Bancorporation, Inc.,
Denver, Colorado
Central Colorado Company,
Denver, Colorado
C.C.B., Inc.,
Denver, Colorado



Bank(s)

Reserve
Bank

Effective
date

Alameda National Bank,
Lakewood, Colorado

Kansas City

August 27, 1982

American Heritage Bank,
El Reno, Oklahoma
First State Bank of Ashby,
Ashby, Minnesota
First National Bank of Belfield,
Belfield, North Dakota
Bank of Almeda,
Houston, Texas
First Security Bank & Trust
Company,
Charles City, Iowa
Central Bank of Chatfield, N.A.,
Littleton, Colorado

Kansas City

August 23, 1982

Minneapolis

August 31, 1982

Minneapolis

September 1, 1982

Dallas

September 8, 1982

Chicago

September 1, 1982

Kansas City

August 30, 1982

Legal Developments

677

Section 3—Continued
Applicant
Central Fidelity Banks, Inc.,
Richmond, Virginia
Century Bank Shares,
Lyman, Wyoming
Citizens Bank Holding Company,
Finley, North Dakota
Columbia Bancshares, Inc.,
Columbia, Illinois
Dallas Guaranty Bancshares,
Inc.,
Dallas, Texas
First & Merchants Corporation,
Richmond, Virginia
First Banc Group, Inc.,
Centralia, Illinois

First Bancorporation of Ohio,
Akron, Ohio
First Comanche Bancshares, Inc.,
Comanche, Texas
First National Columbus Bancorp,
Columbus, Nebraska
First Port Allen Bancshares, Inc.,
Port Allen, Louisiana
First Republic Bancshares, Inc.,
Rayville, Louisiana
Essex Iowa Bancorporation, Inc.,
Essex, Iowa
Follett Bancshares, Inc.,
Follett, Texas
Glendive Bancorporation, Inc.,
Glendive, Montana
Haskell Bancorporation, Inc.,
Haskell, Oklahoma
Humble Bancshares, Inc.,
Humble, Texas
Kersey Bancorp, Inc.,
Kersey, Colorado
The Magnolia State Corporation,
Bay Springs, Mississippi
Manchester Bancorp, Inc.,
Manchester, Kentucky



Bank(s)
The Washington County National
Bank of Abingdon,
Abingdon, Virginia
First State Bank of Lyman,
Lyman, Wyoming
Citizens State Bank of Finley,
Finley, North Dakota
Columbia National Bank,
Columbia, Illinois
Guaranty Bank,
Dallas, Texas
The Wise County National Bank,
Wise, Virginia
Ashley State Bank,
Ashley, Illinois
The First State Bank of Centralia,
Centralia, Illinois
Hoyleton State and Savings
Bank,
Hoyleton, Illinois
The Twinsburg Banking
Company,
Twinsburg, Ohio
First Comanche Bank,
Comanche, Texas
First National Bank and Trust
Company,
Columbus, Nebraska
First National Bank of Port Allen,
Port Allen, Louisiana
First Republic Bank,
Rayville, Louisiana
The First National Bank of
Essex,
Essex, Iowa
The Follett National Bank,
Follett, Texas
First Fidelity Bank,
Glendive, Montana
The First Bank of Haskell,
Haskell, Oklahoma
Humble National Bank,
Humble, Texas
Kersey State Bank,
Kersey, Colorado
Jasper County Bank,
Bay Springs, Mississippi
First State Bank,
Manchester, Kentucky

Reserve
Bank

Effective
date

Richmond

August 30, 1982

Kansas City

September 22, 1982

Minneapolis

August 27, 1982

St. Louis

September 15, 1982

Dallas

September 9, 1982

Richmond

September 7, 1982

St. Louis

September 10, 1982

Cleveland

September 8, 1982

Dallas

September 3, 1982

Kansas City

September 2, 1982

Atlanta

August 27, 1982

Dallas

September 16, 1982

Chicago

September 3, 1982

Dallas

September 2, 1982

Minneapolis

August 30, 1982

Kansas City

September 10, 1982

Dallas

September 20, 1982

Kansas City

September 1, 1982

Atlanta

August 27, 1982

Cleveland

September 3, 1982

678

Federal Reserve Bulletin • October 1982

Section 3—Continued
Applicant
Maple Hill Bancshares, Inc.,
Maple Hill, Kansas
Nacogdoches Commercial Bancshares, Inc.,
Nacogdoches, Texas
Nicol Bankshares Corp.,
Olathe, Kansas
Noble Bank Holding Company,
Inc.,
Red Wing, Minnesota
Northeast Bancorporation, Inc.,
Minneapolis, Minnesota
North Side Bancorp, Inc.,
Racine, Wisconsin

Palm Bancorp,
Palmerton, Pennsylvania
Peoples Bancshares, Ltd.,
Waterloo, Iowa
Plainview First National Bancshares, Inc.,
Plainview, Texas
Schreiner Bancshares, Inc.,
Kerrville, Texas
Security Bancshares, Inc.,
Dunseith, North Dakota
7L Corporation,
Tampa, Florida
First Florida Banks, Inc.,
Tampa, Florida
Union Bancshares, Inc.,
Livingston, Tennessee
Union Illinois Company,
East St. Louis, Illinois
Union National Corporation,
Mt. Lebanon, Pennsylvania
United Bancorporation, Inc.,
Rockford, Illinois




Bank(s)
The Stockgrowers State Bank,
Maple Hill, Kansas
Commercial National Bank in
Nacogdoches,
Nacogdoches, Texas
First Citibank of Olathe,
Olathe, Kansas
First State Bank of Red Wing,
Red Wing, Minnesota
First American State Bank of
Sargeant,
Sargeant, Minnesota
North Side Bank,
Racine, Wisconsin
North Side Bank of Caledonia,
Caledonia, Wisconsin
The First National Bank of
Palmerton,
Palmerton, Pennsylvania
K-S Banco, Inc.,
Waterloo, Iowa
First National Bancshares, Inc.,
Plainview, Texas
Southwest National Bank,
Austin, Texas
Security State Bank of Dunseith,
Dunseith, North Dakota
Clearwater Beach Bank,
Clearwater, Florida
Northeast Bank of Clearwater,
Clearwater, Florida
Union Bank & Trust Company,
Livingston, Tennessee
Columbia National Bank,
Columbia, Illinois
Keystone National Bank,
Punxsutawney, Pennsylvania
United Bank of Illinois, N.A.,
Rockford, Illinois
United Bank of Belvidere,
Belvidere, Illinois
United Bank of Southgate,
Rockford, Illinois
United Bancorporation, Inc.,
Rockford, Illinois
S.B.A. Company,
Rockford, Illinois

Reserve
Bank

Effective
date

Kansas City

September 8, 1982

Dallas

September 17, 1982

Kansas City

August 24, 1982

Minneapolis

September 1, 1982

Minneapolis

September 10, 1982

Chicago

September 16, 1982

Philadelphia

September 3, 1982

Chicago

August 31, 1982

Texas

September 2, 1982

Dallas

September 7, 1982

Minneapolis

September 2, 1982

Atlanta

September 7, 1982

Atlanta

September 10, 1982

St. Louis

September 15, 1982

Cleveland

August 27, 1982

Chicago

September 15, 1982

Legal Developments

679

Section 3—Continued
Reserve
Bank

Bank(s)

Applicant

Valley Bancorp, Inc.,
Hopkins, Missouri
Webbers Falls Bancorp, Inc.,
Webbers Falls, Oklahoma
Western National Bancorporation, Inc.,
Tulsa, Oklahoma

Oregon Corporation,
Rockford, Illinois
East Riverside Inc.,
Rockford, Illinois
Thirty-Three Venturers, Inc.,
Hopkins, Missouri
Webbers Falls State Bank,
Webbers Falls, Oklahoma
Western National Bank of Tulsa,
Tulsa, Oklahoma

Effective
date

Kansas City

September 2, 1982

Kansas City

August 27, 1982

Kansas City

August 26, 1982

Section 4
Nonbanking
company
(or activity)

Applicant

First National Bancshares, Inc.
East Lansing, Michigan
Citizens and Southern Georgia
Corporation,
Atlanta, Georgia
Puget Sound Bancorp,
Tacoma, Washington

Reserve
Bank

Effective
date

Le Ann Corporation,
East Lansing, Michigan
Oglethorpe Loan Company,
Savannah, Georgia

Chicago

September 13, 1982

Atlanta

August 31, 1982

Washington Mortgage Company, Inc.,
Seattle, Washington
Washington Leasing Corporation and Affiliated Escrow,
Inc.,

San Francisco

September 17, 1982

Seattle, W a s h i n g t o n

Sections 3 and 4

Applicant

Bank(s)

GL & ML Limited,
Aplington, Iowa

State Savings Bank,
Aplington, Iowa

Panora Financial
Corp.,
Panora, Iowa

Mid Iowa, Inc.,
Panora, Iowa
Panora State Bank,
Panora, Iowa




Nonbanking
company
(or activity)
Aplington Insurance,
Inc.,
Aplington, Iowa
to engage in general insurance activities in
a town with a population of less than
5,000

Reserve
Bank

Effective
date

Chicago

September 17, 1982

Chicago

September 24, 1982

680 Federal Reserve Bulletin • October 1982

ORDERS APPROVED

UNDER BANK MERGER

ACT

By the Board of Governors
Applicant

Bank(s)

United Virginia Bank,
Richmond, Virginia

The First National Bank
of Martinsville and
Henry County,
Fieldale, Virginia
Citizens National Bank,
New Market, Virginia

PENDING CASES INVOLVING

Effective
date

Richmond

September 7, 1982

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.
Association of Data Processing Service
Organizations, Inc., et al. v. Board of Governors, filed
August 1982, U.S.C. A. for the District of Columbia.
The Philadelphia Clearing House Association, et al. v.
Board of Governors, filed July 1982, U.S.D.C. for
the Eastern District of Pennsylvania.
Richter v. Board of Governors, et al., filed May 1982,
U.S.D.C. for the Northern District of Illinois.
Montgomery v. Utah, et al., filed May 1982, U.S.D.C.
for the District of Utah.
Wyoming Bancorporation v. Board of Governors, filed
May 1982, U.S.C.A. for the Tenth Circuit.
First Bancorporation
v. Board of Governors, filed
April 1982, U.S.C.A. for the Tenth Circuit.
Charles G. Vick v. Paul A. Volcker, et al., filed March
1982, U.S.D.C. for the District of Columbia.
Jolene Gustafson v. Board of Governors, filed March
1982, U.S.C.A. for the Fifth Circuit.
Christian Educational Association,
Inc. v. Federal
Reserve System, filed January 1982, U.S.D.C. for
the Middle District of Florida.
Option Advisory Service, Inc. v. Board of Governors,
filed December 1981, U.S.C.A. for the Second
Circuit.
Edwin F. Gordon v. Board of Governors, et al., filed
October 1981, U.S.C.A. for the Eleventh Circuit
(two consolidated cases).
Wendall Hall v. Board Governors, et al., filed September 1981, U.S.D.C. for the Northern District of
Georgia.




Reserve
Bank

Allen Wolfs on v. Board of Governors, filed September
1981, U.S.D.C. for the Middle District of Florida.
Option Advisory Service, Inc. v. Board of Governors,
filed September 1981, U.S.C.A. for the Second
Circuit (two cases).
Bank Stationers Association, Inc., et al. v. Board of
Governors, filed July 1981, U.S.D.C. for the Northern District of Georgia.
Public Interest Bounty Hunters v. Board of Governors, et al., filed June 1981, U.S.D.C. for the
Northern District of Georgia.
Edwin F. Gordon v. John Heimann, et al., filed May
1981, U.S.C.A. for the Fifth Circuit.
First Bank & Trust Company v. Board of Governors,
filed February 1981, U.S.D.C. for the Eastern District of Kentucky.
9 to 5 Organization for Women Office Workers v.
Board
of Governors,
filed
December 1980,
U.S.D.C. for the District of Massachusetts.
Securities Industry Association v. Board of Governors, et al., filed October 1980, U.S.D.C. for the
District of Columbia.
Securities Industry Association v. Board of Governors, et al., filed October 1980, U.S.C.A. for the
District of Columbia.
A. G. Becker, Inc. v. Board of Governors, et al., filed
October 1980, U.S.D.C. for the District of Columbia.
A. G. Becker, Inc. v. Board of Governors, et al., filed
October 1980, U.S.C.A. for the District of Columbia.
A. G. Becker, Inc. v. Board of Governors, et al., filed
August 1980, U.S.D.C. for the District of Columbia.
Berkovitz, et al. v. Government of Iran, et al., filed
June 1980, U.S.D.C. for the Northern District of
California.

1

Financial and Business Statistics
CONTENTS

Domestic

WEEKLY REPORTING COMMERCIAL

Financial

Statistics

A3
A4

Monetary aggregates and interest rates
Reserves of depository institutions, Reserve
Bank credit
A5 Reserves and borrowings of depository
institutions
A6 Federal funds and repurchase agreements of
large member banks

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

FINANCIAL
POLICY

BANKS

MARKETS

INSTRUMENTS

A7
A8
A9

Federal Reserve Bank interest rates
Depository institutions reserve requirements
Maximum interest rates payable on time and
savings deposits at federally insured 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
A12 Bank debits and deposit turnover
A13 Money stock measures and components
A14 Aggregate reserves of depository institutions
and monetary base
A15 Loans and securities of all commercial banks

COMMERCIAL

BANKS

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




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

FEDERAL
A30
A31
A32
A32

FINANCE

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

2

Federal Reserve Bulletin • October 1982

SECURITIES MARKETS AND
CORPORATE FINANCE

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

A56 Foreign branches of U.S. banks—Balance sheet
data
A58 Selected U.S. liabilities to foreign official
institutions
REPORTED BY BANKS IN THE UNITED

STATES

A58
A59
A61
A62

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

ESTATE

A40 Mortgage markets
A41 Mortgage debt outstanding

REPORTED BY NONBANKING
BUSINESS
ENTERPRISES IN THE UNITED STATES

CONSUMER INSTALLMENT

A64 Liabilities to unaffiliated foreigners
A65 Claims on unaffiliated foreigners

CREDIT

A42 Total outstanding and net change
A43 Extensions and liquidations

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

Statistics

A46 Nonfinancial business activity—Selected
measures
A46 Output, capacity, and capacity utilization
A47 Labor force, employment, and unemployment
A48 Industrial production—Indexes and gross value
A50 Housing and construction
A51 Consumer and producer prices
A52 Gross national product and income
A53 Personal income and saving
International
A54
A55
A55
A55

TRANSACTIONS

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

FLOW OF FUNDS

Domestic

SECURITIES HOLDINGS AND

Statistics

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




INTEREST AND EXCHANGE

RATES

A67 Discount rates of foreign central banks
A68 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular
Presentation,
Statistical Releases, and Special
Tables
Special

Tables

A70 Commercial bank assets and liabilities, June 30,
1982
A76 Assets and liabilities of U.S. branches and
agencies of foreign banks, June 30, 1982

Domestic Financial Statistics

A3

1.10 MONETARY AGGREGATES AND INTEREST RATES
1981

1982

1982

Item
Q3

Q4

Q2

Q1

Apr.

May

June

July

Aug.

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

1
2
3
4

Reserves of depository
Total
Required
Nonborrowed
Monetary base 2

institutions

5
6
7
8

Concepts of money and liquid
Ml
M2
M3
L

3.4
2.4
7.5
4.1'

3.1
3.5
10.9
3.8'

7.5
7.1
-.9
7.8

.6
1.1
4.2
7.1

2.4
5.2
2.1
9.2'

2.2
-.5
17.0
8.6

2.2
3.8
-.5
7.7

-1.6
-1.8
14.8
2.8

8.8
8.9
14.5
6.8

.3
8.3
11.2
11.9

5.7
8.9
9.3
10.7

10.4
9.8
8.7
10.3

3.3
9.5
10.7
11.9

11.0
10.0
12.0
11.9'

-2.4
10.7
11.3
13.0

-.3
6.6
8.8'
10.6

-.3'
9.7
12.6'
n.a.

10.4
14.2
18.4
n.a.

18.4
-22.7
24.3
36.0
2.6

8.3
-11.9
20.8
5.4
2.7

7.5
8.7
9.7
4.6
3.1

17.1'
2.0
23.8
17.0'
6.6

15.7
-.7
28.8
8.7
5.3

18.1
-1.5
20.8
24.0
9.9

17.3'
-3.7'
15.8
29.6'
3.8

22.9
-22.5'
29.1
36.4'
10.4'

16.3
-8.4
20.3
22.7
5.8

8.7

3.6

2.6

8.6

8.8

8.2

assets3

Time and savings deposits
Commercial banks
9
Total
10
Savings 4
11
Small-denomination time 5
12
Large-denomination time 6
13 Thrift institutions 7
14 Total loans and securities at commercial banks 8

1981
Q4

1982

Q1

Q2

5.6

6.4

6.2

1982
Q3

May

June

July

Aug.

Sept.

Interest rates (levels, percent per annum)

15
16
17
18

Short-term rates
Federal funds 9
Discount window borrowing 1 0
Treasury bills (3-month market yield)'
Commercial paper (3-month) 1 1 ' . . . .

Long-term rates
Bonds
19
U.S. government 1 3
20
State and local government 1 4
21
Aaa utility (new issue) 15
22 Conventional mortgages 1 6

13.59
13.04
11.75
13.04

14.23
12.00
12.81
13.81

14.52
12.00
12.42
13.81

11.01

14.14
12.54
15.67
17.33

14.27
13.02
15.71
17.10

13.74
12.33
15.73
16.63

12.94
11.39
14.25

1. Unless otherwise noted, rates of change are calculated from average amounts
outstanding in preceding month or quarter.
2. Includes reserve balances at Federal Reserve Banks in the current week plus
vault cash held two weeks earlier used to satisfy reserve requirements at all depository institutions plus currency outside the U.S. Treasury, Federal Reserve Banks,
the vaults of depository institutions, and surplus vault cash at depository institutions.
3. M l : Averages of daily figures for (1) currency outside the Treasury, Federal
Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due
to domestic banks, the U.S. government, and foreign banks and official institutions
less cash items in the process of collection and Federal Reserve float; and (4)
negotiable order of withdrawal ( N O W ) and automatic transfer service (ATS) accounts at banks and thrift institutions, credit union share draft ( C U S D ) accounts,
and demand deposits at mutual savings banks.
M2: M l plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eurodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and balances of money market mutual funds (general purpose and broker/
dealer).
M3: M2 plus large-denomination time deposits at all depository institutions and
term R P s at commercial banks and savings and loan associations and balances of
institution-only money market mutual funds.
L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper. Treasury bills and other
liquid Treasury securities, and U . S . savings bonds.
4. Savings deposits exclude N O W and A T S accounts at commercial banks and
thrifts and C U S D accounts at credit unions.




10.83
9.32
11.15

14.45
12.00
12.09
13.42

14.15
12.00
12.47
13.96

12.59
11.81
11.35
12.94

10.12
10.68

13.46
11.95
15.22
16.50

14.18
12.45
15.92
16.75

13.76
12.28
15.61
16.50

12.91
11.23
13.95
15.40

5. Small-denomination time deposits—including retail RPs—are those issued in
amounts of less than $100,000.
6. Large-denomination time deposits are those issued in amounts of $100,000 or
more.
7. Savings and loan associations, mutual savings banks, and credit unions.
8. Changes calculated from figures shown in table 1.23. Beginning December
1981, growth rates reflect shifts of foreign loans and securities from U.S. banking
offices to international banking facilities.
9. Averages of daily effective rates (average of the rates on a given date weighted
by the volume of transactions at those rates).
10. Rate for the Federal Reserve Bank of New York.
11. Quoted on a bank-discount basis.
12. Unweighted average of offering rates quoted by at least five dealers.
13. Market yields adjusted to a 20-year maturity by the U.S. Treasury.
14. Bond Buyer series for 20 issues of mixed quality.
15. Weighted averages of new publicly offered bonds rated A a a , A a , and A by
Moody's Investors Service and adjusted to an A a a basis. Federal Reserve compilations.
16. Average rates on new commitments for conventional first mortgages on new
homes in primary markets, unweighted and rounded to nearest 5 basis points, from
Dept. of Housing and U r b a n Development.
NOTE. Revisions in reserves of depository institutions reflect the transitional
phase-in of reserve requirements as specified in the Monetary Control Act of 1980.

A4
1.11

Domestic Financial Statistics • October 1982
RESERVES O F DEPOSITORY INSTITUTIONS, RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures

Weekly averages of daily figures for week ending

1982

1982

July

Aug.

Sept.

153,468

153,903

152,834

154,854

153,804

153,195

152,702

153,044

153,823

152,755

132,400
131,540
860
9,223
9,001
222
300
669
1,972
8,904
11,149
3,895
13,785

132,787
132,666
121
9,004
8,969
35
56
506
2,056
9,494
11,148
4,018
13,786

131,920
131,436
484
9,042
8,951
91
159
976
1,633
9,104
11,148
4,118
13,786

133,776
133,607
169
9,006
8,955
51
66
482
1,909
9,615
11,148
4,018
13,786

133,282
133,282
0
8,955
8,955
0
0
609
1,858
9,100
11,148
4,018
13,786

132,991
132,821
170
8,988
8,955
33
81
507
1,556
9,073
11,148
4,018
13,786

132,092
132,092
0
8,954
8,954
0
0
948
1,918
8,791
11,148
4,018
13,786

131,273
131,020
253
8,973
8,950
23
94
1,330
2,292
9,084
11,148
4,018
13,786

132,089
131,319
770
9,109
8,949
160
330
810
2,282
9,203
11,148
4,218
13,786

131,736
131,226
510
9,014
8,949
65
142
749
1,764
9,350
11,148
4,218
13,786

147,850
429

148,218
416

148,631
415

148,763
414

148,098
416

147,783
417

149,070
413

149,471
413

148,425
413

147,642
419

3,319
311
615

3,310
314
646

4,062
264
509

2,973
283
623

2,872
295
576

3,157
346
552

3,776
247
520

3,468
242
582

3,611
248
547

4,489
287
392

Aug. 18

Aug. 25

Sept. 1

Sept. 8

Sept. 15

Sept. 22

Sept. 29

SUPPLYING R E S E R V E F U N D S

1 Reserve Bank credit outstanding
2
3
4
5
6
7
8
9
10
11
12
13
14

U.S. government securities 1
Bought outright
Held under repurchase agreements
Federal agency securities
Bought outright
Held under repurchase agreements
Acceptances
Loans
Float
Other Federal Reserve assets
Gold stock
Special drawing rights certificate a c c o u n t . . .
Treasury currency outstanding
ABSORBING R E S E R V E FUNDS

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

220

234

275

234

236

247

268

275

291

296

5,280
24,273

5,246
24,471

4,836
22.894

5,284
25,233

5,210
25,052

5,030
24,614

4,630
22,729

4,952
22,592

4,897
24,543

4,882
23,501

End-of-month figures

Wednesday figures

1982

1982

July

Aug.

Sept.

Aug. 18

Aug. 25

Sept. 1

Sept. 8

Sept. 15

Sept. 22

153,768

153,643

156,519

154,669

156,689

155,223

152,659

154,865

153,665

151,850

132.640
132,640
0
9,001
9,001
0
0
458
1,713
9,956

132,858
131,669
1,189
9,184
8,955
229
565
449
1,446
9,141

134,393
130,591
3,802
9,950
8,949
1,001
813
1,123
567
9,673

133,189
133,189
0
8,955
8,955
0
0
935
2,477
9,113

134,738
134,738
0
8,955
8,955
0
0
1,637
2,156
9,203

132,883
132,883
0
8,954
8,954
0
0
1,356
3,201
8,829

130,683
130,683
0
8,954
8,954
0
0
482
3,170
9,370

129,645
129,645
0
8,949
8,949
0
0
3,798
3,315
9,158

131,205
131,205
0
8,949
8,949
0
0
1,965
2,110
9,436

130,305
130,305
0
8,949
8,949
0
0
1,154
1,937
9,505

11,149
4,018
13,786

11,148
4,018
13,786

11,148
4,218
13.786

11,148
4,018
13,786

11,148
4,018
13,786

11,148
4,018
13,786

11,148
4.018
13,786

11,148
4,018
13,786

11,148
4,218
13,786

11,148
4,218
13,786

147,051
418

148,310
418

148,110
423

148,824
414

148,132
416

148,578
415

150,064
410

149,343
413

148,241
413

148,178
421

3,275
982
663
221

3,234
348
502
247

10,975
396
405
300

3,147
310
587
234

3,541
319
598
237

3,460
344
563
247

4,041
226
534
259

3,565
305
573
268

3,648
235
410
279

8,320
295
386
296

5,359
24,752

4,791
24,745

5,047
20,015

5,084
25,021

5,042
27,356

4,531
26,037

4,673
21,404

4,716
24,634

4,725
24,866

4,669
18,437

Sept. 29

SUPPLYING R E S E R V E F U N D S

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

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

34 Gold stock
35 Special drawing rights certificate a c c o u n t . . .
36 Treasury currency outstanding
ABSORBING R E S E R V E F U N D S

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

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




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

Depository Institutions
1.12

RESERVES A N D BORROWINGS

A5

Depository Institutions

Millions of dollars
Monthly averages of daily figures
Reserve classification

1981
Dec.

1 Reserve balances with Reserve B a n k s 1 . . . .
2 Total vault cash (estimated)
3
Vault cash at institutions with required
reserve balances 2
4
Vault cash equal to required reserves at
other institutions
5
Surplus vault cash at other institutions 3 .
6 Reserve balances + total vault cash 4
7 Reserve balances + total vault cash used
to satisfy reserve requirements 4 - 5
8 Required reserves (estimated)
9 Excess reserve balances at Reserve Banks 4 - 6
10
Total borrowings at Reserve Banks
11
Seasonal borrowings at Reserve Banks
12
Extended credit at Reserve B a n k s . . . .

1982
Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.?

26,163
19,538

26,721
20,284

25,963
19,251

24,254
18,749

24,565
18,577

24,207
19,048

24,031
19,318

24,273
19,448

24,471
19,500

22,852
19,914

13,577

14,199

13,082

12,663

12.709

12,972

13,048

13,105

13,188

13,754

2,178
3,783
45,701

2,290
3,795
47,005

2,235
3,934
45,214

2,313
3,773
43.003

2.284
3,584
43,142

2,373
3,703
43,255

2,488
3,782
43,349

2,486
3,857
43,721

2,518
3,794
43,971

2,832
3,328
42,766

41,918
41,606
312
642
53
149

43,210
42,785
425
1.526
75
197

41,280
40,981
299
1,713
132
232

39,230
38,873
357
1,611
174
309

39,558
39,284
274
1,581
167
245

39,552
39,192
360
1,105
237
177

39,567
39,257
310
1,205
239
103

39,864
39,573
291
669
225
46

40,177
39,866
311
510
119
94

39,438
39,574
-136
976
102
118

Sept. 22P

Sept. 29P

Weekly averages of daily figures for week ending
1982
July 28
13 Reserve balances with Reserve B a n k s 1 . . . .
14 Total vault cash (estimated)
15
Vault cash at institutions with required
reserve balances 2
16
Vault cash equal to required reserves at
other institutions
17
Surplus vault cash at other institutions 3 .
18 Reserve balances + total vault cash 4
19 Reserve balances + total vault cash used
to satisfy reserve requirements 4 - 5
20 Required reserves (estimated)
21 Excess reserve balances at Reserve Banks 4 - 6
22
Total borrowings at Reserve Banks
23
Seasonal borrowings at Reserve Banks
24
Extended credit at Reserve B a n k s . . . .

Aug. 4

Aug. 11

Aug. 25

Sept. 1

Sept. 8

Sept. 15

24,148
20,252

23,955
19,846

23,302
20,172

25,233
19,227

25,052
18,834

24,614
19,579

22,729
20,006

22,592
20,541

24,542
18,745

23,512
20,418

13,623

13,520

13,372

13,003

12,822

13,397

13,476

13,734

13,320

14,200

2,597
4,032
44,400

2,520
3,806
43,801

2,814
3,986
43,474

2,397
3,827
44,460

2,429
3,583
43,886

2,417
3,765
44,193

3,179
3,351
42,735

3,229
3,578
43,133

2,404
3,021
43,287

2,879
3,339
43,930

40,368
40,057
311
548
188
24

39,995
39,701
294
679
166
20

39,488
39,162
326
369
133
64

40,633
40,314
319
482
131
123

40,303
40,043
260
609
94
118

40,428
40,066
362
507
95
116

39,384
38,719
665
948
106
116

39,555
39,235
320
1,330
89
116

40,266
40,002
264
809
100
118

40,591
40,279
312
749
112
124

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




Aug. 18

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

A6
1.13

Domestic Financial Statistics • October 1982
FEDERAL FUNDS A N D REPURCHASE AGREEMENTS
Averages of daily figures, in millions of dollars

Large Member Banks 1

1982, week ending Wednesday
By maturity and source

One day and continuing contract
1 Commercial banks in United States
2 Other depository institutions, foreign banks and foreign
official institutions, and U.S. government agencies .
3 Nonbank securities dealers
4 All other

5
6
7
8

Aug. 4

Aug. 11

Aug. 18

56,000

57,841

55,543

53,587

52,371

58,495

60,900

54,117

50,972

22,651'
5,023
22,441

22,494 r
5,932
21,577

22,172
4,996
22,031

22,720
4,800
22,766

22,401
4,989
21,586

21,308
5,125
22,192

22,967
4.886
21.615

24,836
5,655
21,240

24,267
4,713
20,731

4,730

4.448

4,549

4,622

4.833

5,020

5,126

4,454

4,390

8,432
4,306
9,924

8,718
4,567
9,672

8,761
4,486
10,274

8,573
4,620
9,574

8,491
4,938
9,064

8,354
4,281
8,879

8.515
4,634
9,068

8.480
5,025
9,059

8,171
5,616
9,284

24,491
4,724

23,906
4,408'

23,823
4,520 r

25,607
5,100

26,070
4,908

26,378
4,796

27,210
5,257

25,451
4,681

24,214
4,576

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

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

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




Aug. 25

Sept. 1

Sept. 8

Sept. 15

Sept. 22

Sept. 29

Policy Instruments
1.14

A7

F E D E R A L R E S E R V E B A N K INTEREST R A T E S
Percent per annum
C u r r e n t and previous levels
E x t e n d e d credit 1
S h o r t - t e r m a d j u s t m e n t credit
a n d seasonal credit

Federal Reserve
Bank

First 60 days
of borrowing

Next 90 days
of b o r r o w i n g

A f t e r 150 d a y s
Effective date
f o r c u r r e n t rates

Effective
date

Previous
rate

Boston
New Y o r k . . .
Philadelphia .
Cleveland
Richmond
Atlanta

8/27/82
8/27/82
8/27/82
8/30/82
8/27/82
8/27/82

10.5

Chicago
St. L o u i s
Minneapolis .
K a n s a s City .
Dallas
San Francisco

8/27/82
8/27/82
8/27/82
8/27/82
8/27/82
8/27/82

R a t e on
9/30/82

Previous
rate

R a t e on
9/30/82

R a t e on
9/30/82

Previous
rate

R a t e on
9/30/82

Previous
rate

8/27/82
8/27/82
8/27/82
8/30/82
8/27/82
8/27/82

12.5

10.5

10.5

8/27/82
8/27/82
8/27/82
8/27/82
8/27/82
8/27/82

11.5

R a n g e of rates in recent years 2

Effective date

In e f f e c t D e c . 31, 1973.
1974— A p r . 25
30
Dec. 9
16

Range (or
level)—
All F . R .
Banks

7V5
7V5-8
8
7V4-8

73/4

6
10
24
Feb.
5
7
M a r . 10
14
M a y 16
23
1976— J a n . 19
23
N o v . 22
26

7'/4-73/4
71/4-73/4
71/4
63/4-7'/4
63/4

1977— A u g . 30
31
Sept. 2
O c t . 26

5V4-53/4
51/4-53/4
53/4
6

1975— J a n .

61/4-6>/4
61/4
6-61/4
6
51/2-6
5V5
51/4-51/!

51/4

F.R.
Bank
of
N.Y.

71/5

Effective date

1978— J a n .

9.
20.
11.
12.
July
3.
10.
A u g . 21.
Sept. 22.
Oct. 16.
May

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

71/4
63/4
63/4
61/4
61/4
6
6
5Vi

51/5
51/4
51/4

20.

Nov.

6-6'/!
61/5
61/2-7
7
7-71/4
71/4
73/4
8
8-8'/5

81/2

1.
3.

8V5-9'/5
9V5

1979— July 20.
A u g . 17.
20.
Sept. 19.
Oct.

8.
10.

10
10-101/5
101/5
101/5-11
11
11-12
12

1980— F e b .

15.
19.
29.
30.

12-13
13
12-13
12

21.

F.R.
Bank
of
N.Y.

6V5
6V5
7
7
71/4

71/4
73/4

8

53/4
53/4
6

May

Effective date

1980— J u n e

13.
16.
28.
29.
Sept. 26.
N o v . 17.
Dec.
5.
8.

July

Range (or
level)—
All F . R .
Banks

F.R.
Bank
of
N.Y.

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

11
11
10
10
11
12
13
13

13-14
14
13-14
13
12

14
14
13
13
12

11.5-12
11.5
11-11.5
11
10.5
10-10.5
10

11.5
11.5
11
11
10.5
10
10

10

10

81/5

81/5
91/5

1981— M a y
Nov.

10
10V5
101/5
11
11
12
12

Dec.

13
13
13
12

5.
8.

9V5

51/4

1. A p p l i c a b l e t o a d v a n c e s w h e n exceptional circumstances or practices involve
only a p a r t i c u l a r d e p o s i t o r y institution a n d t o a d v a n c e s w h e n an institution is u n d e r
sustained liquidity p r e s s u r e s . See section 201.3(b)(2) of R e g u l a t i o n A .
2. R a t e s tor s h o r t - t e r m a d j u s t m e n t credit. For description a n d earlier d a t a see
t h e following publications of t h e B o a r d of G o v e r n o r s : Banking and
Monetary
Statistics, 1914-1941 a n d 1941-1970; Annual Statistical Digest, 1970-1979, and 1980.




R a n g e (or
level)—
All F . R .
Banks

2.
6.

4.

1982— July

20.
23.
A u g . 2.
3.
16.
27.
30.

In effect Sept. 30, 1982

In 1980 a n d 1981, t h e F e d e r a l R e s e r v e applied a s u r c h a r g e t o s h o r t - t e r m adj u s t m e n t credit b o r r o w i n g s by institutions with d e p o s i t s of $500 million or m o r e
that h a d b o r r o w e d in successive w e e k s or in m o r e t h a n 4 w e e k s in a c a l e n d a r
q u a r t e r . A 3 p e r c e n t s u r c h a r g e w a s in effect f r o m M a r . 17, 1980, t h r o u g h M a y 7,
1980. T h e r e was n o s u r c h a r g e until N o v . 17, 1980, w h e n a 2 p e r c e n t s u r c h a r g e w a s
a d o p t e d ; the s u r c h a r g e was s u b s e q u e n t l y raised t o 3 p e r c e n t o n D e c . 5, 1980, a n d
to 4 p e r c e n t o n M a y 5, 1981. T h e s u r c h a r g e was r e d u c e d to 3 p e r c e n t effective
Sept. 22, 1981, a n d t o 2 p e r c e n t effective O c t . 12. A s of O c t . 1, t h e f o r m u l a f o r
applying the surcharge was c h a n g e d f r o m a c a l e n d a r q u a r t e r t o a m o v i n g 13-week
period. T h e surcharge was e l i m i n a t e d o n N o v . 17, 1981.

A8
1.15

DomesticNonfinancialStatistics • October 1982
DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS 1
Percent of deposits

Type of deposit, and deposit interval
in millions of dollars

Net demand2
0-2
2-10
10-100
100-400
Over 400
Time and
Savings

Member bank requirements
before implementation of the
Monetary Control Act
Percent

Effective date

7
91,fi
113/4
123/4
16'/4

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

Net transaction

savings2,3

Time 4
0-5, by maturity
30-179 days
180 days to 4 years
4 years or more
Over 5, by maturity
30-179 days
180 days to 4 years
4 years or more

3

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

Effective date

3
12

11/13/80
11/13/80

3
0

4/29/82
4/29/82

3

11/13/80

accounts6-7

Nonpersonal
By original
Less than
3V2 years

time deposits8
maturity
3 Vi years
or more

Eurocurrency
All types

liabilities

3/16/67

3
m
1

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

6
IVi
1

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

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

N O T E S T O T A B L E 1.16
18. Between Jan. 1, 1980, and Aug. 1, 1981, commercial banks, and thrifts were
authorized to offer variable ceiling nonnegotiable time deposits with no required
minimum denomination and with maturities of 2Vi years or more. Effective Jan.
1, 1980, the maximum rate for commercial banks was 3A percentage point below
the average yield on 2V4 year U.S. Treasury securities; the ceiling rate for thrifts
was '/4 percentage point higher than that for commercial banks. Effective Mar. 1,
1980, a temporary ceiling of ll 3 /4 percent was placed on these accounts at commercial banks and 12 percent on these accounts at savings and loans. Effective
June 2, 1980, the ceiling rates for these deposits at commercial banks and savings
and loans was increased Vi percentage point. The temporary ceiling was retained,
and a minimum ceiling of 9.25 percent for commercial banks and 9.50 percent for
thrifts was established.
19. Effective Dec. 1, 1981, depository institutions were authorized to offer time
deposits not subject to interest rate ceilings when the funds are deposited to the
credit of, or in which the entire beneficial interest is held by, an individual pursuant
to an I R A agreement or Keogh ( H . R . 10) plan. Such time deposits must have a
minimum maturity of 18 months, and additions may be made to the time deposit
at any time before its maturity without extending the maturity of all or a portion
of the balance of the account.




Type of deposit, and
deposit interval

government and federal agency securities, federal funds borrowings f r o m nonmember institutions, and certain other obligations. In general, the base for the
marginal reserve requirement was originally the greater of (a) $100 million or (b)
the average amount of the managed liabilities held by a m e m b e r bank, Edge
corporation, or family of U.S. branches and agencies of a foreign bank for the two
statement weeks ending Sept. 26, 1979. For the computation period beginning Mar.
20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution's
U.S. office gross loans to foreigners and gross balances due from foreign offices
of other institutions between the base period (Sept. 13-26, 1979) and the week
ending Mar. 12,1980, whichever was greater. For the computation period beginning
May 29,1980, the base was increased by 7V5 percent above the base used to calculate
the marginal reserve in the statement week of May 14-21, 1980. In addition,
beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and
balances declined.
5. For existing n o n m e m b e r banks and thrift institutions at the time of implementation of the Monetary Control Act, the phase-in period ends Sept. 3, 1987.
For existing member banks the phase-in period is about three years, depending on
whether their new reserve requirements are greater or less than the old requirements. For existing agencies and branches of foreign banks, the phase-in ended
Aug. 12, 1982. New institutions have a two-year phase-in beginning with the date
that they open for business, except for those institutions having total reservable
liabilities of $50 million or more.
6. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment
orders of withdrawal, and telephone and preauthorized transfers (in excess of three
per month) for the purpose of making payments to third persons or others.
7. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement will apply be modified
annually to 80 percent of the percentage increase in transaction accounts held by
all depository institutions on the previous June 30. At the beginning of 1982 the
amount was accordingly increased from $25 million to $26 million.
8. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which the beneficial interest is
held by a depositor that is not a natural person. Also included are certain transferable time deposits held by natural persons, and certain obligations issued to
depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
The category of time deposit authorized by the Depository Institutions Deregulation Committee ( D I D C ) , effective Sept. 1, 1982 (original maturity or required
notice period of 7 to 31 days, required minimum deposit balance of $20,000, and
ceiling rate tied to the 91-day Treasury bill rate), is classified as a time deposit for
reserve requirement purposes.
NOTE. Required reserves must be held in the form of deposits with Federal
Reserve Banks or vault cash. After implementation of the Monetary Control Act,
nonmembers may maintain reserves on a pass-through basis with certain approved
institutions.

20. Effective May 1, 1982, depository institutions were authorized to offer negotiable or nonnegotiable time deposits with a minimum original maturity of V/2
years or more that are not subject to interest rate ceilings. Such time deposits have
no minimum denomination, but must be made available in a $500 denomination.
Additional deposits may be made to the account during the first year without
extending its maturity.
NOTE. Before Mar. 31, 1980, the maximum rates that could be paid by federally
insured commercial banks, mutual savings banks, and savings and loan associations
were established by the Board of Governors of the Federal Reserve System, the
Board of Directors of the Federal Deposit Insurance Corporation, and the Federal
Home Loan Bank Board under the provisions of 12 C F R 217, 329, and 526 respectively. Title II of the Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to establish
maximum rates of interest payable on deposits to the Depository Institutions Deregulation Committee. The maximum rates on time deposits in denominations of
$100,000 or more with maturities of 30-89 days were suspended in June 1970; such
deposits maturing in 90 days or more were suspended in May 1973. For information
regarding previous interest rate ceilings on all types of accounts, see earlier issues
of the FEDERAL RESERVE BULLETIN, the Federal Home Loan Bank Board Journal,
and the Annual Report of the Federal Deposit Insurance
Corporation.

Policy Instruments
1.16

M A X I M U M I N T E R E S T R A T E S P A Y A B L E on Time and Savings Deposits at Federally Insured Institutions
Percent per annum
Savings and loan associations and
mutual savings banks (thrift institutions)

Commercial banks

Type and maturity of deposit

In effect September 30, 1982

Previous maximum

1 Savings
2 Negotiable order of withdrawal accounts 2 . .
Time accounts 3
Fixed ceiling rates by maturity 4
3
14-89 d a y s '
4
90 days to 1 vear
5
1 to 2 years 7
6
2 to 2Vi years 7
7
2Yi to 4 jears 7
8
4 to 6 years 8
9
6 to 8 years 8
10
8 years or more 8
11
Issued to governmental units (all
maturities) 10
12
IRAs and Keoeh (H.R. 10) plans (3 years
or more) ™ n

18
19

51/4
51/4

7/1/79
12/31/80

53/4

5V4

8/1/79

6

7/1/73

6V2
71/4
IVi
3
7/4

1/1/80

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

8

6/1/78

8

6/1/78

Special variable ceiling rates by maturity
7-to 31-day time deposits 12
91-day time deposits 13
6-month money market time deposits 1 4 . . .
12-month all savers certificates
2 Vi years to less than 3 Vi years 17
Accounts with no ceiling rates
IRAs and Keogh (H.R. 10) plans (18
months or more) 19
3Vi years or more time deposits 20

1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loans.
2. For authorized states only. Federally insured commercial banks, savings and
loan associations, cooperative banks, and mutual savings banks in Massachusetts
f.nd New Hampshire were first permitted to offer negotiable order of withdrawal
(NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was extended to similar institutions throughout New England on Feb. 27, 1976, in New
York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979 and to similar
institutions nationwide effective Dec. 31, 1980.
3. For exceptions with respect to certain foreign time deposits see the BULLETIN
for October 1962 (p.-1279), August 1965 (p. 1084), and February 1968 (p. 167).
4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts
at savings and loan associations was decreased to 14 days and the minimum maturity
period for time deposits at savings and loan associations in excess of $100,000 was
decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity or notice
period for time deposits was decreased from 30 to 14 days at mutual savings banks.
5. Effective Oct. 30, 1980, the minimum maturity or notice period for time
deposits was decreased from 30 to 14 days at commercial banks.
6. No separate account category.
7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was
required for savings and loan associations, except in areas where mutual savings
banks permitted lower minimum denominations. This restriction was removed for
deposits maturing in less than 1 year, effective Nov. 1, 1973.
8. No minimum denomination. Until July 1, 1979, the minimum denomination
was $1,000 except for deposits representing funds contributed to an individual
retirement account (IRA) or a Keogh (H.R. 10) plan established pursuant to the
Internal Revenue Code. The $1,000 minimum requirement was removed for such
accounts in December 1975 and November 1976 respectively.
9. Between July 1, 1973, and Oct. 31, 1973, certificates maturing in 4 years or
more with minimum denominations of $1,000 had no ceiling; however, the amount
of such certificates that an institution could issue was limited to 5 percent of its
total time and savings deposits. Sales in excess of that amount, as well as certificates
of less than $1,000, were limited to the 6Vz percent ceiling on time deposits maturing
in 2Vi years or more. Effective Nov. 1,1973, ceilings were reimposed on certificates
maturing in 4 years or more with minimum denomination of $1,000. There is no
limitation on the amount of these certificates that banks can issue.
10. Accounts subject to fixed-rate ceilings. See footnote 8 for minimum denomination requirements.
11. Effective Jan. 1, 1980, commercial banks are permitted to pay the same rate
as thrifts on I R A and Keogh accounts and accounts of governmental units when
such deposits are placed in the new 2V£-year or more variable-ceiling certificates
or in 26-week money market certificates regardless of the level of the Treasury bill
rate.
12. Effective Sept. 1, 1982, depository institutions are authorized to issue nonnegotiable time deposits of $20,000 or more with a maturity or required notice
period of 7 to 31 days. The maximum rate of interest payable by thrift institutions
is the rate established and announced (auction average on a discount basis) for
U.S. Treasury bills with maturities of 91 days at the auction held immediately
before the date of deposit or renewal ("bill rate"). Commercial banks may pay
the bill minus 25 basis points. The interest rate ceiling is suspended when the bill
rate is 9 per cent or below for the four most recent auctions held before the date
of deposit or renewal. The maximum allowable rate from Sept. 1 through Sept. 7
was 8.604 for commercial banks and 8.354 for thrifts. The interest rate ceiling was
suspended for the remaining weeks in September.
13. Effective May 1, 1982, depository institutions were authorized to offer time
deposits that have a minimum denomination of $7,500 and a maturity of 91 days.
The ceiling rate of interest on these deposits is indexed to the discount rate (auction
average) on most recently issued 91-day Treasury bills for thrift institutions and
the discount rate minus 25 basis points for commercial banks. The rate differential
ends 1 year from the effective date of these instruments and is suspended at any
timr the Treasury bill discount rate is 9 percent or below for four consecutive




In effect September 30, 1982

Effective
date

Effective
date

13
14
15
16
17

A9

5
5V4

5Vi
5%
3
5/4
7'/4

5'/4

7/1/79
12/31/80

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

(6)
6

1/1/80

( )3
53/4

6V5
3

O

6

7Vi
7%

(')
11/1/73
12/23/74
6/1/78

7

11/1/73

6/4

7/6/77

(12
13)

(19)
n

16

(.8)

6/1/78

2
C
n( )
,5

(16

(,7

(19)

(19)

( )

( )

20

20

5

o

1/1/74

6

12/23/74

15

o(18)

51A

5'/5

8

o

Effective
date

Effective
date

7/1/73
1/1/74

:6)

73/4
73/4

Previous maximum

5/4

Vi

73/4
73/4

(>)
1/21/70
1/21/70
1/21/70
ii/1/73
12/23/74
7/6/77

oo

C132)
15
O
(18)

(19)
(2°)

C)

(16)
17

auctions. The maximum allowable rates in Sept. (in percent) for commercial banks
were as follows: Sept. 8, 8.565; Sept. 14, 8.161; Sept. 21, 7.849; Sept. 28, 7.801;
and for thrifts Sept. 8, 8.565; Sept. 14, 8.161; Sept. 21, 7.849; Sept. 28, 7.80.
14. Must have a maturity of exactly 26 weeks and a minimum denomination of
$10,000, and must be nonnegotiable.
15. Commercial banks and thrift institutions were authorized to offer money
market time deposits effective June 1, 1978. These deposits have a minimum denomination requirement of $10,000 and a maturity of 26 weeks. The ceiling rate
of interest on these deposits is indexed to the discount rate (auction average) on
most recently issued 26-week U.S. Treasury bills. Interest on these certificates may
not be compounded. Effective for all 6-month money market certificates issued
beginning Nov. 1, 1981, depository institutions may pay rates of interest on these
deposits indexed to the higher of (1) the rate for 26-week Treasury bills established
immediately before the date of deposit (bill rate) or (2) the average of the four
rates for 26-week Tresury bills established for the 4 weeks immediately before
the date of deposit (4-week average bill rate). Ceilings are determined as follows:
Bill rate or 4-week
average bill rate
7.50 percent or below
Above 7.50 percent

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

Commercial bank ceiling
7.75 percent
'/4 of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate
Thrift ceiling
7.75 percent
'/i of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate
9 percent
Vi of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate

The maximum allowable rates in Sept. for commercial banks and thrifts based on
the bill rate were as follows: Sept. 8, 9.855; Sept. 14, 9.954; Sept. 21, 9.693; Sept.
28, 9.446; and based on the 4-week average bill rate were as follows: Sept. 8, 9.79;
Sept. 14, 9.76; Sept. 21, 9.874; Sept. 28, 9.737
16. Effective Oct. 1, 1981, depository institutions are authorized to issue all
savers certificates (ASCs) with a 1-year maturity and an annual investment yield
equal to 70 percent of the average investment yield for 52-week U.S. Treasury bills
as determined by the auction of 52-week Treasury bills held immediately before
the calendar week in which the certificate is issued. A maximum lifetime exclusion
of $1,000 ($2,000 on a joint return) from gross income is generally authorized for
interest income from ASCs. The annual investment yield for ASCs issued in Sept.
(in percent) was as follows: Sept.5, 8.15.
17. Effective Aug. 1, 1981, commercial banks may pay interest on any variable
ceiling nonnegotiable time deposit with an original maturity of 2Vi years to less
than 4 years at a rate not to exceed Vi of 1 percent below the average 2V5-year
yield for U.S. Treasury securities as determined and announced by the Treasury
Department immediately before the date of deposit. Effective May 1, 1982, the
maximum maturity for this category of deposits was reduced to less than 3Vi years.
Thrift institutions may pay interest on these certificates at a rate not to exceed the
average 2V5-year yield for Treasury securities as determined and announced by the
Treasury Department immediately before the date of deposit. If the announced
average 2Vi-year yield for Treasury securities is less than 9.50 percent, commercial
banks may pay 9.25 percent and thrift institutions 9.50 percent for these deposits.
These deposits have no required minimum denomination, and interest may be
compounded on them. The ceiling rates of interest at which they may be offered
vary biweekly. The maximum allowable rates in Sept. (in percent) for commercial
banks were as follows: Sept. 14, 11.80; Sept. 28, 11.55; and for thrifts: Sept. 14,
12.05; Sept. 28, 11.80.
NOTES are continued on opposite page.

A10
1.17

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

1979

1980

1981
Feb.

Mar.

Apr.

May

June

July

Aug.

U . S . G O V E R N M E N T SECURITIES

Outright transactions (excluding matched
transactions)
1
2
3
4

Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions

5
6
7
8
9

15,998
6,855
0
2,900

7,668
7,331
0
3,389

13,899
6,746
0
1,816

1,017
868
0
0

474
995
0
600

4,149
0
0
0

595
519
0
400

1,559
0
200
0

1,905
1,175
-200
200

1,721
651
0
600

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

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

912
0
12,427
-18,251
0

317
23
13,794
-12,869
0

20
0
2,633
-940
0

0
0
900
-1,479
0

132
0
333
-525
0

0
0
1,498
-2,541
0

0
0
988
-1,249
0

71
0
382
0
0

0
0
4,938
-3,914
0

10
11
12
13

1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange

2,148
0
-12,693
7,508

2,138
0
-8,909
13.412

1,702
0
-10,299
10,117

50
0
-974
765

0
0
-900
1,479

570
0
-333
525

0
0
-1,000
1,600

0
0
-988
1,049

691
0
-382
200

0
0
-4,938
3,078

14
15
16
17

5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange

523
0
-4,646
2,181

703
0
-3.092
2,970

393
0
-3,495
1,500

0
0
-1,659
100

0
0
0
0

81
0
0
0

0
0
-498
941

0
0
0
0

113
0
0
0

0
0
601
837

18
19
20
21

Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange

454
0
0
1,619

811
0
-426
1,869

379
0
0
1,253

0
0
0
75

0
0
0
0

52
0
0
0

0
0
0
0

0
0
0
0

123
0
0
0

0
0
-601
0

22
23
24

All maturities1
Gross purchases
Gross sales
Redemptions

22,325
6,855
5,500

12.232
7,331
3.389

16,690
6,769
1,816

1,087
868
0

474
995
600

4,984
0
0

595
519
400

1,559
0
0

2,903
1,175
200

1,721
651
600

25
26

Matched transactions
Gross sales
Gross purchases

627,350
624,192

674,000
675,496

589,312
589,647

28,033
28,258

38,946
38,650

44,748
44,759

36,047
36,790

41,509
37,548

54,646
58,753

39,403
37,962

27
28

Repurchase agreements
Gross purchases
Gross sales

107,051
106,968

113,902
113,040

79,920
78,733

18.656
21,919

8,595
6,998

18,396
14,724

10,155
15,424

5,332
5,332

18,267
18,267

3,755
2,567

6,896

3,869

9.626

-2,820

179

8,667

-4,850

-2,402

5,636

217

853
399
134

668
0
145

494
0
108

0
0
32

0
0
13

0
0
5

0
0
1

0
0
6

0
0
1

0
0
46

37,321
36,960

28,895
28,863

13,320
13,576

872
1,006

554
471

2,033
1,119

1,305
2,301

831
831

4,389
4,389

1,095
866

681

555

130

-166

70

909

-997

-6

-1

183

116

73

-582

-597

488

280

-768

0

0

565

7,693

4,497

9,175

-3,583

737

9,856

-6,615

-2,408

5,634

966

29 Net change in U.S. government securities
F E D E R A L A G E N C Y OBLIGATIONS

30
31
32

Outright transactions
Gross purchases
Gross sales
Redemptions

33
34

Repurchase agreements
Gross purchases
Gross sales

35 Net change in federal agency obligations
BANKERS ACCEPTANCES

36 Repurchase agreements, net
37

Total net change in System Open Market
Account

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




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

Reserve Banks
1.18

FEDERAL RESERVE BANKS

All

Condition and Federal Reserve Note Statements

Millions of dollars

Account
Sept. 1

Sept. 8

Wednesday

End of month

1982

1982

Sept. 22

Sept. 15

Sept. 29

July

Sept.

Aug.

Consolidated condition statement

ASSETS
1
2
3

Gold certificate account
Special drawing rights certificate account

11,148
4.018
429

11,148
4,018
415

11,148
4,018
420

11,148
4,218
438

11,148
4,218
446

11,149
4.018
432

11,148
4,018
432

11,148
4,218
450

1.356
0

482
0

3.798
0

1,965
0

1,154
0

458
0

449
0

1,123
0

0

0

0

0

0

0

565

813

8.954
0

8,954
0

8.949
0

8,949
0

8,949
0

9.001
0

8,955
229

8,949
1,001

9
10
11
12
13
14

Loans
To depository institutions
Other
Acceptances
Held under repurchase agreements
Federal agency obligations
Bought outright
Held under repurchase agreements
U.S. government securities
Bought outright
Bills
Notes
Bonds
Total 1
Held under repurchase agreements
Total U.S. government securities

52.601
62.018
18.264
132,883
0
132.883

50,401
62,018
18,264
130,683
0
130,683

49.363
62,018
18,264
129,645
0
129,645

50,923
62.018
18.264
131.205
0
131,205

50,023
62.018
18,264
130,305
0
130,305

52,358
62,018
18.264
132,640
0
132.640

51,387
62,018
18,264
131,669
1.189
132,858

50,309
62,018
18,264
130,591
3,802
134,393

15

Total loans and securities

143,193

140,119

142,392

142,119

140,408

142,099

143,056

146,279

10.161
535

10,958
536

10,671
536

8,903
538

7.985
539

8,220
528

9,680
534

6,779
541

4.963
3.331

4,993
3,841

5,008
3,614

5.037
3.861

5,041
3,925

5,405
4.023

4,959
3,648

5,116
4,016

177,778

176,028

177,807

176,262

173,710

175,874

177,475

178,547

135.636

137,103

136.390

135.306

135,259

134,115

135,374

135,197

26.284
3.460
344
563

21,663
4,041
226
534

24.902
3,565
305
573

25.145
3,648
235
410

18,734
8,320
295
385

24.974
3,275
982
662

24,993
3.234
348
501

20,318
10,975
396
394

30,651

26,464

29,345

29,438

27,734

29,893

29,076

32,083

6.960
1.808

7,788
1,711

7,356
1,749

6,793
1,747

6,048
1,696

6.507
2,197

8,234
1,805

6,220
2,027

175,055

173,066

174,840

173,284

170,737

172,712

174,489

175,527

1.339
1,278
106

1,339
1,278
345

1.340
1.278
349

1,341
1,278
359

1,340
1,278
355

1,336
1,278
548

1,337
1,278
371

1,341
1,278
401

177,778

176,028

177,807

176,262

173,710

175,874

177,475

178,547

93.985

97.442

99,391

96,486

97,939

95,684

94,780

98,192

4
5
6
7
8

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

16
17

20

Total assets
LIABILITIES

21
22
23
24
25

Federal Reserve notes
Deposits
Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other

26

Total deposits

27
28

Deferred availability cash items
Other liabilities and accrued dividends 4

29

Total liabilities
CAPITAL ACCOUNTS

30
31
32

Capital paid in
Surplus
Other capital accounts

33
34

Total liabilities and capital accounts
MEMO: Marketable U.S. government securities held in
custody for foreign and international account

Federal Reserve note statement

35
36
37
38
39
40
41
42

Federal Reserve notes outstanding (issued to bank) . . . .
LESS: H e l d b y b a n k 5

Federal Reserve notes, net
Collateral for Federal Reserve notes
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. government and agency securities
Total collateral

155,840
20,204
135,636

155,975
18,872
137,103

156,342
19,952
136.390

156,519
21,213
135,306

156,405
21,146
135,259

155,017
20,902
134,115

155,800
20,426
135,374

156,412
21,215
135,197

11,148
4,018
0
120,470

11,148
4,018
0
121.937

11,148
4,018
17
121,207

11,148
4,218
0
119,940

11,148
4,218
11
119.882

11,149
4,018
0
118,948

11,148
4,018
120,208

11,148
4,218
0
119,831

135,636

137,103

136,390

135,306

135,259

134,115

135,374

135,197

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




0

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

A12
1.19

DomesticNonfinancialStatistics • October 1982
F E D E R A L RESERVE BANKS
Millions of dollars

Maturity Distribution of Loan and Security Holdings

Type and maturity groupings
Sept. 1

Sept. 8

Wednesday

E n d of month

1982

1982

Sept. 15

Sept. 22

Sept. 29

July 31

Aug. 31

Sept. 30

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

1,356
1,294
62
0

482
438
44
0

3,798
3,761
37
0

1,965
1,835
130
0

1,154
1,110
44
0

458
383
75
0

449
411
38
0

1,123
1,076
47
0

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

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

565
565
0
0

813
813
0
0

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

132,883
6,625
23,603
38,132
35,974
12,267
16,282

130,683
5,370
24,449
36,341
35,974
12,267
16,282

129,645
5,534
22,190
37,398
35,974
12,267
16,282

131,205
5,508
23,877
37,297
35,974
12,267
16,282

130,305
4,211
24,429
37,142
35,974
12,267
16,282

132,640
4,374
27,562
34,775
38,216
10,830
16,883

132,858
3,911
25,870
38,554
35,974
12,267
16,282

134,393
5,743
24,429
39,781
35,891
12,267
16,282

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

8,954
35
407
1,900
5,227
882
503

8,954
35
503
1,804
5,227
882
503

8,949
1
568
1,838
5,157
882
503

8,949
131
438
1,838
5,157
882
503

8,949
207
407
1,863
5,087
882
503

9,001
174
524
1,593
5,305
902
503

9,184
345
407
1,829
5,228
872
503

9,950
1,208
407
1,863
5,087
882
503

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

1.20

BANK DEBITS A N D DEPOSIT TURNOVER
Debits are shown in billions of dollars, turnover as ratio of debits to deposit. Monthly data are at annual rates.
1982
Bank group, or type of customer

1980

1979

1981
Feb.

Mar.

Apr.

May

June

87,488.1
37,379.7
50,108.4

88,259.6
37,016.6
51,243.0

929.0
90.2
570.4
1,589.6

1,069.9
107.6
593.4
1,770.9

315.8
1,292.8
202.0

322.7
1,326.4
208.6

14.0
11.4
3.8
7.1

15.8
13.5
3.9
7.8

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

49,775.0
18,512.7
31,262.3

63.013.4
25.192.5
37,820.9

80,059.7
33,642.7
46,417.0

85,274.3
35,983.8
49,290.5

83,617.4
34,218.3
49,399.1

83,404.1
35.238.0
48.166.1

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

ATS/NOW3
Business 4
Others 5
All accounts

83.3
77.3
515.2
675.8

158.4
93.4
605.3
857.2

741.3
112.1
582.2
1,435.6

836.7
95.2
534.8
1,466.7

935.4
115.4
586.9
1,637.6

1,072.5
103.0
609.6
1,785.1

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

163.5
646.2
113.3

201.6
813.7
134.3

281.4
1,100.5
182.8

307.1
1,252.1
198.0

304.7
1,211.7
200.7

301.3
1,255.3
193.7

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

ATS/NOW3
Business 4
Others 5
All accounts

7.8
7.2
2.7
3.1

1. Represents accounts of individuals, partnerships, and corporations, and of
states and political subdivisions.
2. Excludes special club accounts, such as Christmas and vacation clubs.
3. Accounts authorized for negotiable orders of withdrawal ( N O W ) and accounts
authorized for automatic transfer to demand deposits (ATS). A T S data availability
starts with December 1978.
4. Represents corporations and other profit-seeking organizations (excluding




9.7
9.3
3.4
4.2

14.2
12.3
3.7
6.6

13.0
12.1
3.6
6.6

14.2
14.6
3.9
7.3

15.4
13.2
4.0
7.8

commercial banks but including savings and loan associations, mutual savings banks,
credit unions, the Export-Import Bank, and federally sponsored lending agencies).
5. Savings accounts other than N O W ; business; and, from December 1978, ATS.
NOTE. Historical data for the period 1970 through June 1977 have been estimated;
these estimates are based in part on the debits series for 233 SMS As, which were
available through June 1977. Back data are available f r o m Publications Services,
Board of Governors of the Federal Reserve System, Washington, D . C . 20551.
Debits and turnover data for savings deposits are not available before July 1977.

Monetary Aggregates
1.21

A13

MONEY STOCK MEASURES A N D COMPONENTS
Billions of dollars, averages of daily figures
1982
Item

1978
Dec.

1979
Dec.

1980
Dec.

1981
Dec.
Apr.

May

June

July

Aug.

Seasonally adjusted
MEASURES1

1
2
3
4

Ml
M2
M3
L2

363.2
1,403.9
1,629.0
1,938.9

389.0
1,518.9
1,779.4
2,153.9

414.5
1,656.2
1,963.1
2,370.4

440.9
1,822.7
2,188.1
2.642.8

97.4
3.5
253.9
8.4
479.9
533.9
194.6

106.1
3.7
262.2
16.9
421.7
652.6
221.8

116.2
4.2
267.2
26.9
398.9
751.7
257.9

123.1
4.3
236.4
77.0
343.6
854.7
300.3

452.4
1.880.7
2,258.1
2,743.5 r

451.5
1,897.5
2,279.3
2,773.2

451.4
1,907.9
2.296.0 r
2,797.8

451.3'
l,923.4 r
2,320.2
n.a.

455.2
1.946.2
2,355.7
n.a.

128.8
4.4
230.6
87.4
344.0
919.7
335.8 r

129.5
4.4
231.1
90.2
342.1
930.2
339.4

SELECTED COMPONENTS

5
6
7
8
9
10
11

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

126.3
4.4
233.0
88.6
350.5
881.6
317.2

127.4
4.5
232.7
87.0
350.9
894.1
321.6

128.4
4.5
231.0
87.5
349.9
900.9
328.3

Not seasonally adjusted
MEASURES1

12
13
14
15

Ml
M2
M3
L2

372.5
1,408.5
1,637.5
1,946.6

398.8
1,524.7
1,789.2
2,162.8

424.6
1,662.5
1,973.9
2,380.2

451.2
1.829.4
2,199.9
2,653.8

455.5
1,887.9
2,266.1
2,754.1'

445.1
1,888.9
2,269.3
2,766.3

450.5
1,906.4 r
2,290.0
2,792.9

454.0
1,924.8 r
2,314.1
n.a.

454.0
1,938.7
2,342.3
n.a.

99.4
3.3
261.5
8.4
24.1
478.0
531.1

108.2
3.5
270.1
17.0
26.3
420.5
649.7

118.3
3.9
275.1
27.2
35.0
398.0
748.9

125.4
4.1
243.3
78.4
38.1
343.0
851.7

125.6
4.2
236.1
89.5
40.4
348. l r
888.1

127.2
4.3
228.3
85.4
42.8
347.4
895.3

128.3
4.7
230.4
87.2
43.0
348.0 '
902.3

129.8
4.9
231.5
87.9
43.5 r
348.3
914.1

130.0
4.9
229.3
89.8
44.7
346.2
919.9

7.1
3.1
198.6

34.4
9.3
226.0

61.9
13.9
262.3

151.2
33.7
305.4

161.9
31.5
317.9

164.3
32.8
320.3

168.6
33.7
323.9 r

171.3
36.7
328.3 r

180.0
43.1
333.5

SELECTED COMPONENTS

16
17
18
19
20
21
22

Currency
Traveler's checks 3
D e m a n d deposits
Other checkable deposits 7
Overnight RPs and Eurodollars 8
Savings deposits 4
Small-denomination time deposits 5
Money market mutual funds
23
General purpose and broker/dealer
24
Institution only
25 Large-denomination time deposits 6

1. Composition of the money stock measures is as follows:
M l : Averages of daily figures for (1) currency outside the Treasury, Federal
Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due
to domestic banks, the U.S. government, and foreign banks and official institutions
less cash items in the process of collection and Federal Reserve float; and (4)
negotiable order of withdrawal ( N O W ) and automatic transfer service (ATS) accounts at banks and thrift institutions, credit union share draft ( C U S D ) accounts,
and demand deposits at mutual savings banks.
M2: M l plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eurodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and balances of money market mutual funds (general purpose and broker/
dealer).
M3: M2 plus large-denomination time deposits at all depository institutions, term
RPs at commercial banks and savings and loan associations, and balances of institution-only money market mutual funds.
2. L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper. Treasury bills and other
liquid Treasury securities, and U.S. savings bonds.
3. Outstanding amount of U.S. dollar-denominated traveler's checks of nonbank
issuers.
4. Savings deposits exclude N O W and A T S accounts at commercial banks and
thrift institutions and C U S D s at credit unions.




5. Small-denomination time deposits—including retail RPs—are those issued in
amounts of less than $100,000.
6. Large-denomination time deposits are those issued in amounts of $100,000
or more and are net of the holdings of domestic banks, thrift institutions, the U.S.
government, money market mutual funds, and foreign banks and official institutions.
7. Includes A T S and N O W balances at all institutions, credit union share draft
balances, and demand deposits at mutual savings banks.
8. Overnight (and continuing contract) RPs are those issued by commercial
banks to other than depository institutions and money market mutual funds (general
purpose and broker/dealer), and overnight Eurodollars are those issued by Caribbean branches of m e m b e r banks to U.S. residents other than depository institutions and money market mutual funds (general purpose and broker/dealer).
NOTE. Latest monthly and weekly figures are available from the Board's H . 6
(508) release. Back data are available from the Banking Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D . C . 20551.

A14
1.22

DomesticNonfinancialStatistics • October 1982
A G G R E G A T E RESERVES OF DEPOSITORY INSTITUTIONS A N D MONETARY BASE 1
Billions of dollars, averages of daily figures
1982'
Item

1978
Dec.r

1979
Dec/

1980
Dec.r

1981
Dec.'
Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Seasonally adjusted

A D J U S T E D FOR
C H A N G E S IN R E S E R V E R E Q U I R E M E N T S 2

1 Total reserves 3

32.82

34.26

36.46

37.99

38.26

38.36

38.43

38.50

38.58

38.52

38.80

39.55

2 Nonborrowed reserves
3 Required reserves
4 Monetary base 4

31.95
32.59
132.2

32.79
33.93
142.5

34.77
35.95
155.0

37.35
37.67
162.7

36.47
37.96
164.7

36.80
37.99
165.2

36.87
38.16
166.5

37.39
38.15
167.7

37.37
38.27
168.8

37.83
38.21
169.2

38.29
38.49
170.1

38.62
39.19
171.9

Not seasonally adjusted
5 Total reserves 3

33.37

34.83

37.11

38.66

38.05

37.80

38.33

38.19

38.07

38.43

38.51

39.34

6 Nonborrowed reserves
7 Required reserves
8 Monetary base 4

32.50
33.13
134.8

33.35
34.50
145.4

35.42
36.59
158.0

38.03
38.34
165.8

36.26
37.75
162.9

36.24
37.44
163.3

36.76
38.06
165.6

37.07
37.83
167.1

36.86
37.76
168.2

37.74
38.12
170.0

38.00
38.20
170.4

38.41
38.97
171.4

41.68

43.91

40.66

41.92

41.29

39.24

39.56

39.55

39.57

39.97

40.18

39.95

40.81
41.45
144.6

42.43
43.58
156.2

38.97
40.15
162.4

41.29
41.60
169.7

39.50
40.98
166.8

37.68
38.87
165.4

37.99
39.28
167.6

38.43
39.19
169.2

38.36
39.26
170.4

39.28
39.65
172.3

39.66
39.87
172.8

39.02
39.58
172.3

N O T A D J U S T E D FOR
C H A N G E S IN RESERVE R E Q U I R E M E N T S 5

9 Total reserves 3
10 Nonborrowed reserves
11 Required reserves
12 Monetary base 4

1. Reserve aggregates include required reserves of member banks and Edge Act
corporations a n a other depository institutions. Discontinuities associated with the
implementation of the Monetary Control Act, the inclusion of Edge Act corporation
reserves, and other changes in Regulation D , have been removed. Beginning with
the week ended December 23, 1981, reserves aggregates have been reduced by
shifts of reservable liabilities t o international banking facilities (IBFs). On the basis
of reports of liabilities transferred to IBFs by U.S. commercial banks and U.S.
agencies and branches of foreign banks, it is estimated that required reserves were
lowered on average by $10 million to $20 million in December 1981 and $40 million
to $70 million in January 1982.
2. Reserve balances with Federal Reserve Banks (which exclude required clearing balances) plus vault cash at institutions with required reserve balances plus
vault cash equal to required reserves at other institutions.
3. Includes reserve balances and required clearing balances at Federal Reserve
Banks in the current week plus vault cash held two weeks earlier used to satisfy
reserve requirements at all depository institutions plus currency outside the U.S.
Treasury, Federal Reserve Banks, the vaults of depository institutions, and surplus
vault cash at depository institutions.
4. Reserves of depository institutions series reflect actual reserve requirement
percentages with no adjustments to eliminate the effect of changes in Regulation
D, including changes associated with the implementation of the Monetary Control
Act. Includes required reserves of m e m b e r banks and Edge Act corporations and
beginning November 13, 1980, other depository institutions. U n d e r the transitional
phase-in program of the Monetary Control Act of 1980, the net changes in required
reserves of depository institutions have been as follows: Effective Nov. 13, 1980,




a reduction of $2.9 billion; Feb. 12, 1981, an increase of $245 million: Mar. 12,
1981, an increase of $75 million; May 14, 1981, an increase of $245 million; Aug.
13, 1981, an increase of $230 million; Sept. 3, 1981, a reduction of $1.1 billion;
Nov. 12. 1981, an increase of $210 million; Jan. 14,1982, a reduction of $60 million;
Feb. 11, 1982 an increase of $170 million; Mar. 4, 1982, an estimated reduction of
$2.0 billion; May 13, 1982, an estimated increase of $150 million; Aug. 12, 1982
an estimated increase of $140 million; and Sept. 2, 1982, an estimated reduction
of $1.2 billion. Beginning with the week ended December 23, 1981, reserve aggregates have been reduced by shifts of reservable liabilities to IBFs. O n the basis
of reports of liabilities transferred to IBFs by U.S. commercial banks and U.S.
agencies and branches of foreign banks, it is estimated that required reserves were
lowered on average by $60 million to $90 million in December 1981 and $180
million to $230 million in January 1982, mostly reflecting a reduction in reservable
Eurocurrency transactions.
NOTE. Latest monthly and weekly figures are available from the Board's H.3(502)
statistical release. Back data and estimates of the impact on required reserves and
changes in reserve requirements are available from the Banking Section, Division
of Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D . C . 20551.

Monetary Aggregates
1.23

LOANS A N D SECURITIES

A15

All Commercial Banks 1

Billions of dollars; averages of Wednesday figures
1981
Dec.

2

1982
Apr.

2

May

2

June

2

1981
July

2

Aug.

2

Dec.

2

1982
Apr.

2

Seasonally adjusted
1 Total loans and securities 3
2 U.S. Treasury asecurities
3 Other securities
4 Total loans and leases 3
5
Commercial and industrial
loans
6
Real estate loans
7
Loans to individuals
8
Security loans
9
Loans to nonbank financial
institutions
10
Agricultural loans
11
Lease financing r e c e i v a b l e s . . . .
12
All other loans

May

2

June 2

July 2

Aug.2

Not seasonally adjusted

1,316.3

1,352.6

1,361.9

1,368.7

1,376.1

1,383.2

1,326.1

1,351.4

1,355.9

1,366.3

1,370.4

1,377.8

111.0
231.4
973.9

116.6
234.0
1,002.0

116.3
234.9
1,010.7

115.8
235.8
1,017.1

116.5
235.9
1.023.7

117.8
237.1
1,028.4

111.4
232.8
981.8

118.7
234.0
998.7

115.8
235.1
1,005.0

116.1
235.6
1,014.6

115.6
234.7
1,020.1

116.4
236.4
1,025.0

358.0
285.7
185.1
21.9

373.1
293.9
186.9
20.9

378.8
295.5
187.4
20.6

383.4
297.3
188.3
19.5

386.7
297.5
189.2
21.0

387.8
298.6
189.6
21.4

360.1
286.8
186.4
22.7

375.2
293.0
185.6
20.9

378.9
294.4
186.2
19.8

382.6
295.8
187.5
20.5

385.5
296.6
188.3
20.5

385.5
298.3
189.8
22.0

30.2
33.0
12.7
47.2

33.3
34.4
13.1
46.5

33.2
34.6
13.1
47.4

33.6
35.4
13.1
46.6

33.9
35.7
13.2
46.4

33.2
36.1
13.1
48.6

31.2
33.0
12.7
49.2

33.0
33.8
13.1
44.1

32.8
34.4
13.1
45.4

33.1
35.5
13.1
46.3

33.3
36.1
13.2
46.7

33.1
36.6
13.1
46.7

1,319.1

1,355.4

1,364.7

1,371.6

1,378.9

1,386.1

1,328.9

1,354.2

1,358.7

1,369.2

1,373.2

1,380.6

976.7
2.8

1,004.8
2.8

1,013.5
2.8

1,020.0
3.0

1,026.5
2.8

1,031.2
2.8

984.7
2.8

1,001.5
2.8

1,007.8
2.8

1,017.5
2.8

1,023.0
3.0

1,027.8
2.8

360.2

375.3

381.1

385.7

389.0

390.1

362.3

377.5

381.1

385.0

387.8

387.7

2.2
8.9

2.3
10.3

2.2
10.1

2.4
9.1

2.3
8.7

2.3
9.1

2.2
9.8

2.3
9.5

2.2
9.5

2.4
9.2

2.3
8.6

2.3
8.8

349.1
334.9
14.2
19.0

362.8
350.1
12.7
15.2

368.8
355.2
13.5
15.0

374.2
360.1
14.2
14.7

378.0
364.7
13.3
14.8

378.7
365.7
13.1
14.6

350.3
334.3
16.1
20.0

365.7
352.9
12.8
14.6

369.4
356.7
12.7
14.4

373.5
360.5
13.0
14.2

376.8
363.9
13.0
14.5

376.7
363.9
12.8
14.1

MEMO:

13 Total loans and securities plus
loans sold 3 - 7
14 Total loans plus loans sold 3 , 7
15 Total loans sold to affiliates 7 . . . .
16 Commercial and industrial loans
plus loans sold 7
17
Commercial and industrial
loans sold 7
18
Acceptances held
19
Other commercial and industrial loans
20
T o U.S. addressees 8
21
To non-U.S. addressees
22 Loans to foreign banks

1. Includes domestically chartered banks; U.S. branches and agencies of foreign
banks. New York investment companies majority owned by foreign banks, and
Edge Act corporations owned by domestically chartered and foreign banks.
2. Beginning D e c e m b e r 1981, shifts of foreign loans and securities from U.S.
banking offices to international banking facilities (IBFs) reduced the levels of
several items. Seasonally adjusted data that include adjustments for the amounts
shifted from domestic offices to IBFs are available in the Board's G . 7 (407) statistical release (available f r o m Publications Services, Board of Governors of the
Federal Reserve System, Washington, D . C . 20551).
3. Excludes loans to commercial banks in the United States.
4. The merger of a commercial bank with a mutual savings bank beginning Feb.
24, 1982, increased total loans and securities $1.0 billion; U.S. Treasury securities,
$0.1 billion; other securities, $0.1 billion; total loans and leases, $0.8 billion; and
real estate loans, $0.7 billion.
5. The merger of a commercial bank with a mutual savings bank beginning Mar.
17, 1982, increased total loans and securities $0.6 billion; U.S. Treasury securities,
$0.1 billion; other securities $0.1 billion; total loans and leases, $0.4 billion; and
real estate loans, $0.4 billion.




6. Beginning June 2, 1982, total loans and securities, total loans and leases, and
loans to individuals were increased $0.5 billion due to acquisition of loans by a
commercial bank from a nonbank institution.
7. Loans sold are those sold outright to a bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a
bank), and nonconsolidated nonbank subsidiaries of the holding company.
8. United States includes the 50 states and the District of Columbia.
NOTE. Data are prorated averages of Wednesday estimates for domestically
chartered banks, based on weekly reports of a sample of domestically chartered
banks and quarterly reports of all domestically chartered banks. For foreign-related
institutions, data are averages of month-end estimates based on weekly reports
from large agencies and branches and quarterly reports from all agencies, branches,
investment companies, and Edge Act corporations engaged in banking.

A16
1.24

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

1981

1982

Source
Dec.

1
2
3
4
5
6

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

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

122.0
122.6

116.3
118.2

116.2
120.7

98.5
98.9

89.5
87.9

88.0
88.5

83.8
84.8

83.5
84.3

82.1
85.6

84.4
86.5

80.0
82.1

78.4
82.8

111.1

109.0

110.0
114.6

114.2
114.6

116.2
114.6

113.8
114.3

113.6
114.6

113.1
113.9

113.2
116.6

113.8
115.9

114.3
116.3

116.7
121.1

8.2

4.5

3.4

-18.6

-29.6

-28.6

-32.6

-32.5

-33.9

-32.4

-37.1

-41.1

2.7

2.7

2.7

2.8

2.8

2.8

2.8

2.8

2.8

3.0

2.8

2.8

-14.7
37.5
22.8

-15.4
45.5
30.1

-14.9
47.9
32.9

-22.5
54.9
32.4

-27.1
55.1
28.0

-25.9
55.0
29.1

-28.8
56.7
27.9

-29.8
57.4
27.6

-29.8
58.1
28.3

-29.1
57.6
28.5

-32.7
60.3
27.6

-34.1
64.7
30.6

22.9
32.5
55.4

19.9
38.3
58.2

18.4
39.1
57.4

3.9
48.1
52.0

-2.5
50.0
47.5

-2.7
50.5
47.9

-3.8
50.0
46.2

-2.7
49.1
46.4

-4.1
49.4
45.4

-3.3
50.2
46.9

-4.4
52.7
48.3

-7.0
53.4
46.4

64.0
62.3

64.9
64.7

65.0
67.3

70.0
68.2

73.0
69.2

71.0
69.1

71.4
70.0

71.9
70.4

69.0
70.0

69.1
68.7

69.3
68.9

71.9
73.9

9.5
9.0

11.1
13.3

12.1
9.7

11.8
11.2

13.4
14.5

22.1
20.0

17.5
15.5

13.6
13.8

15.3
15.4

9.9
10.8

8.4
8.3

9.2
8.2

267.0
272.4

324.8
322.6

323.4
324.6

324.0
330.3

324.3
330.6

327.2
335.3

332.0
337.2

334.4
335.6

341.1
340.0

349.4
344.6

360.1
350.4

366.8
359.0

111.6

111.1

MEMO

7 Domestically chartered banks net positions
with own foreign branches, not seasonally adjusted 5
Gross due from balances
8
9
Gross due to balances
10 Foreign-related institutions net positions with
directly related institutions, not seasonally adjusted 6
11
Gross due from balances
12
Gross due to balances
Security RP borrowings
13
Seasonally adjusted*
14
Not seasonally adjusted
U.S. Treasury demand balances 8
15
Seasonally adjusted
16
Not seasonally adjusted
Time deposits, $100,000 or more 9
17
Seasonally adjusted
18
Not seasonally adjusted

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

5. Averages of daily figures for member and nonmember banks.
6. Averages of daily data.
7. Based on daily average data reported by 122 large banks.




8. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
9. Averages of Wednesday figures.
NOTE. Beginning December 1981, shifts of foreign assets and liabilities from U.S.
banking offices to international banking facilities (IBFs) reduced levels of several
items as follows: lines 1 and 2, $22.4 billion; lines 3 and 4, $1.7 billion; line 5,
$20.7 billion; line 7, $3.1 billion; and line 10, $17.6 billion.
For January 1982, the levels were reduced as follows: lines 1 and 2, $29.6 billion;
lines 3 and 4, $2.4 billion; line 5, $27.2 billion; line 7. $4.8 billion; and line 10,
$22.5 billion. For February the levels were reduced as follows: lines 1 and 2, $30.4
billion; lines 3 and 4, $2.4 billion; line 5, $28.0 billion; line 7, $4.9 billion; and line
10, $23.1 billion. For March the levels were reduced as follows: lines 1 and 2, $30.9
billion; lines 3 and 4, $2.4 billion; line 5, $28.5 billion; line 7, $4.9 billion; and line
10, $23.6 billion. For April the levels were reduced as follows: lines 1 and 2, $31.3
billion; lines 3 and 4, $2.4 billion; line 5, $29.0 billion; line 7, $5.0 billion; and line
10, $24.0 billion. For May the levels were reduced as follows: lines 1 and 2, $31.7
billion; lines 3 and 4, $2.4 billion; line 5, $29.3 billion; line 7. $5.0 billion; and line
10, $24.3 billion. For June the levels were reduced as follows: lines 1 and 2, $31.9
billion; lines 3 and 4, $2.4 billion; line 5, $29.5 billion; line 7. $5.0 billion; and line
10, $24.5 billion.

Commercial Banks
1.25

ASSETS A N D LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS

A17

Last-Wednesday-of-Month Series

Billions of dollars except for number of banks
1982

1981
Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

1,249.4
912.8
312.6
600.2
106.7
229.9

1.267.4
926.4
320.3
606.0
109.8
231.3

1,261.2
920.1
321.0
599.1
111.5
229.6

1,271.2
929.1
325.6
603.5
112.3
229.8

1,285.8
939.9
332.4
607.5
114.5
231.4

1.292.6
947.2
336.7
610.5
113.0
232.4

1.300.7
954.3
341.9
612.4
111.5
234.9

1.315.4
969.1
348.7
620.4
113.4
232.9

1,313.2
966.6
346.4
620.3
113.4
233.2

1.318.8
970.6
346.2
624.3
113.7
234.5

1,337.3
986.1
355.0
631.2
115.0
236.2

162.8
18.3
26.1
52.0
66.4

173.1
22.0
28.0
54.5
68.6

155.3
19.8
30.2
50.3
55.0

151.6
19.7
24.8
51.0
56.1

164.5
18.9
25.7
55.9
64.0

153.6
19.9
25.5
52.4
55.8

153.0
20.0
21.7
54.9
56.3

165.4
20.1
18.2
59.6
67.4

154.5
20.5
25.1
55.4
53.6

160.8
20.3
26.1
58.8
55.5

157.4
20.4
17.0
60.4
59.6

DOMESTICALLY C H A R T E R E D
COMMERCIAL B A N K S '

1 Loans and securities, excluding
interbank
2 Loans, excluding interbank
3
Commercial and industrial
4
Other
5 U.S. Treasury securities
6 Other securities
7 Cash assets, total
8
Currency and coin
9
Reserves with Federal Reserve Banks
10
Balances with depository institutions .
11
Cash items in process of collection . . .
12 Other assets 2

194.4

211.2

197.0

201.9

219.3

206.6

209.9

223.2

224.2

231.4

234.9

13 Total assets/total liabilities and c a p i t a l . . .

1,606.7

1,651.8

1,613.5

1,624.7

1,669.5

1,652.9

1,663.6

1,704.0

1,692.0

1,711.0

1,729.6

14 Deposits
15
Demand
16
Savings
17
Time

1,206.0
339.2
217.9
648.9

1,240.3
363.9
222.4
654.0

1,205.8
322.3
223.0
660.5

1,213.7
316.7
222.5
674.4

1,250.8
338.3
229.9
682.6

1.231.0
315.5
226.6
688.9

1,244.0
315.4
227.6
701.0

1.284.8
345.2
228.9
710.7

1,266.4
314.4
227.1
724.8

1,279.2
315.5
229.5
734.2

1,290.7
323.0
230.9
736.9

179.3
95.2
126.2

190.2
91.7
129.6

191.9
89.7
126.1

191.0
92.5
127.5

196.4
94.4
128.0

201.1
92.4
128.4

195.1
93.9
130.6

189.7
96.6
133.0

195.4
99.1
131.1

196.0
103.9
131.9

202.8
103.4
132.6

5.6
14,743

13.6
14,744

16.7
14,690

17.1
14.702

10.9
14.709

16.6
14.710

7.1
14,722

7.5
14.736

8.0
14.752

5.9
14,770

17.1
14,785

1,335.5
994.7
365.5
629.2
108.8
232.0

1,330.0
984.5
360.8
623.7
112.5
233.0

1,321.6
975.8
360.3
615.5
114.5
231.4

1,331.5
984.4
364.6
619.7
115.5
231.6

1.345.8
995.1
372.4
622.7
117.6
233.1

1.350.7
1.000.6
374.7
625.8
116.1
234.1

1.358.5
1.007.6
379.3
628.3
114.3
236.6

1,374.3
1,023.7
386.7
636.9
116.2
234.4

1.370.5
1.020.0
383.8
636.3
115.8
234.7

1.376.6
1.024.6
384.5
640.0
115.9
236.1

1.397.5
1.042.6
395.6
647.1
117.2
237.7

29 Cash assets, total
30
Currency and coin
31
Reserves with Federal Reserve Banks
32
Balances with depository institutions .
33
Cash items in process of collection . . .

179.3
18.3
27.5
66.0
67.4

188.1
22.0
29.3
67.1
69.6

170.0
19.8
31.3
62.7
56.1

165.8
19.7
26.1
63.0
57.1

178.8
18.9
26.9
68.0
65.0

168.1
19.9
26.8
64.6
56.8

167.7
20.0
23.0
67.3
57.3

180.3
20.2
19.6
72.2
68.4

169.4
20.5
26.4
68.0
54.6

176.2
20.4
27.5
71.9
56.5

173.7
20.4
18.4
74.2
60.6

34 Other assets 2

267.0

288.7

274.2

278.1

295.2

280.3

285.9

300.1

299.6

306.9

310.3

1,781.7

1,806.8

1,765.8

1,775.5

1,819.9

1,799.1

1,812.1

1,854.7

1,839.6

1,859.7

1,881.5

1,254.1
352.6
218.1
683.4

1,288.7
377.7
222.6
688.3

1,251.5
335.1
223.2
693.1

1,258.3
329.4
222.8
706.2

1,295.0
350.8
230.2
714.0

1.272.7
327.9
226.9
717.9

1,286.2
327.9
227.8
730.4

1,325.8
357.4
229.1
739.3

1.307.4
326.7
227.4
753.3

1.321.8
327.8
229.8
764.3

1.335.6
335.1
231.1
769.3

246.2
153.3
128.1

250.8
135.6
131.5

253.5
132.8
128.1

255.9
131.8
129.4

260.0
135.0
129.9

260.8
135.3
130.3

255.3
138.2
132.5

253.2
140.8
134.9

258.3
140.9
133.0

260.0
144.1
133.8

267.6
143.9
134.5

5.6
15.212

13.6
15,213

16.7
15.185

17.1
15,201

10.9
15,214

16.6
15,215

7.1
15.235

7.5
15,235

8.0
15.271

5.9
15,289

17.1
15.311

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

21 U.S. Treasury note balances included in
borrowing
22 Number of banks
A L L COMMERCIAL BANKING
INSTITUTIONS 3

23 Loans and securities, excluding
interbank
24 Loans, excluding interbank
25
Commercial and industrial
26
Other
27 U.S. Treasury securities
28 Other securities

35 Total assets/total liabilities and c a p i t a l . . .
36 Deposits
37
Demand
38
Savings
39
Time
40 Borrowings
41 Other liabilities
42 Residual (assets less liabilities)
MEMO:

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

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




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

A18
1.26

DomesticNonfinancialStatistics • October 1982
ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $750 Million or More on
December 31, 1977, Assets and Liabilities, 1982
Millions of dollars, Wednesday figures
Account

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

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

Loans
19 Federal funds sold 1
20
To commercial banks
To nonbank brokers and dealers in securities
21
22
To others
23 Other loans, gross
24
Commercial and industrial
25
Bankers acceptances and commercial paper
26
All other
27
U.S. addressees
28
Non-U.S. addressees
29
Real estate
30
To individuals for personal expenditures
To financial institutions
31
Commercial banks in the United States
Banks in foreign countries
32
33
Sales finance, personal finance companies, etc
34
Other financial institutions
T o nonbank brokers and dealers in securities
35
36
To others for purchasing and carrying securities 2
37
To finance agricultural production
All other
38
39 LESS: Unearned income
40
Loan loss reserve
4i Other loans, net
42 Lease financing receivables
43 All other assets
44 Total assets
Deposits
45 Demand deposits
46
Mutual savings banks
47
Individuals, partnerships, and corporations
48
States and political subdivisions
49
U.S. government
Commercial banks in the United States
50
51
Banks in foreign countries
Foreign governments and official institutions
52
Certified and officers' checks
53
54 Time and savings deposits
Savings
55
56
Individuals and nonprofit organizations
57
Partnerships and corporations operated for profit . .
58
Domestic governmental units
59
All Other
60
Time
61
Individuals, partnerships, and corporations
62
States and political subdivisions
63
U.S. government
64
Commercial banks in the United States
Foreign governments, official institutions, and
65
banks
Liabilities for borrowed money
66
Borrowings from Federal Reserve Banks
67
Treasury tax-and-loan notes
68
All other liabilities for borrowed money 3
69 Other liabilities and subordinated notes and debentures
70 Total liabilities
71 Residual (total assets minus total liabilities) 4

Aug. 11

Aug. 18

Aug. 25

48.793
6.804
32.537

43.068
6.470
34.505

45,076
6.296
34.204

44.471
6.616
36.778

58,086
7.707
34.258

633,119

628,446

631,097

627,061

38,662
9.348
29.314
9.656
17.356
2.303
78.226
3.906
74.320
15.444
55.842
7.340
48.502
3,034

39.148
9.485
29.663
9.935
17.452
2.276
79.603
5.402
74.201
15,397
55,734
7,171
48.562
3.070

38.752
8.764
29.988
10.574
17,185
2,228
77.970
3.495
74,475
15,563
55,841
7,142
48.699
3.071

42,224
30,461
8,737
3,026
487.244
210,958
4,143
206.815
199.863
6.952
130.236
72.792

37.842
27.269
7,663
2,909
485.143
211.324
4.457
206.867
199.989
6.878
130.419
72,688

6.687
7.278
11.375
16.138
8.060
2.573
6,549
14.599
5.826
7.413
474.006
11.053
125.294

Aug. 4

Sept. 15 p

Sept. 22p

Sept. 29p

53,080
7,485
31,974

56,356
7.777
34,659

46,116
7,381
34,154

47,974
7,118
28,728

636,201

638,989

641,507

635,520

638,786

37.399
7.685
29.714
10.180
17.444
2.090
78.074
3,519
74.555
15.613
55.851
7.073
48.779
3.091

37,113
6,952
30,161
10.375
17,684
2.101
78.718
4.152
74.566
15.596
55,831
7.066
48.765
3,139

38,740
8,056
30,684
10,411
18,031
2,243
80,204
5,884
74,320
15,454
55,713
7,075
48,638
3,153

38,811
7,733
31,078
10,734
18.186
2,159
78.103
3,872
74,231
15,410
55,708
7,177
48.531
3.113

38,018
7,173
30,845
10,714
18,041
2,090
78,035
3,655
74,380
15,434
55,823
7,032
48,791
3,123

38,019
7,203
30,816
10,352
18,304
2,159
78,504
3,967
74,537
15,530
55,936
7,052
48,884
3,071

40,033
28,859
8,164
3.010
487.656
211.082
3,996
207,086
200,218
6,868
130,611
72.836

39.512
28.286
8.690
2.536
485,351
210,271
4.241
206.030
198.990
7.040
130.943
73.028

41,585
31,062
7.986
2,537
492.114
212,757
5,138
207,619
200.611
7,008
131.052
73,374

41,641
31,005
8,294
2,341
491,779
213,043
4,657
208,386
201,096
7,290
131,087
73,268

43,975
33,186
8,643
2,146
493,984
216.076
4,990
211.087
203.846
7,241
131,291
73,449

39,315
28,491
8,695
2,129
493,497
216,927
4,696
212,231
204,986
7,245
131,627
73,488

39,499
28,778
8,767
1,954
496,030
217,415
4,812
212,603
205,198
7,405
131,660
73,652

6.970
7.169
11,253
16.224
5.931
2.578
6.544
14.043
5.855
7.434
471.853
11,045
124.723

7.059
7.047
11.156
16,351
7,939
2.598
6.549
14.428
5.856
7.458
474.342
11.046
125,781

6,991
6.884
11.294
16.098
6.409
2.573
6.496
14.363
5.833
7.442
472.076
11.028
126.078

7.206
7.277
11.627
16.486
7.690
2.567
6.567
15.510
5.792
7,537
478,785
11.067
129,941

8.456
7,479
11,010
16,186
7,167
2,591
6,504
14,988
5,788
7,587
478,404
11,087
130,130

7,059
7,498
11,028
16.456
7,068
2,530
6,480
15,048
5,797
5,569
780,618
11,111
131,821

6,708
7,255
10.805
16,242
6,736
2,538
6,516
14,655
5,763
7,582
480,152
11,089
128.550

6,780
6,905
11,120
16,171
7,892
2,604
6,571
15,261
5,764
7,504
482,763
11,097
128,871

857,601

848,258

853,501

852,033

877,260

872,744

883,231

862,811

862,574

167.617
640
123.784
4.952
3.290
18.619
6.993
1.029
8.310
397.362
80.658
77.360
2.748
525
24
316,704
278,272
20,631
444
12,423

160.863
592
122.536
4.844
1.851
17.375
6.235
870
6,558
395.572
80.183
76.855
2.739
565
24
315,389
277.046
20.849
427
12.242

160.990
552
122.154
4,350
2,556
17,714
6,026
1,004
6.633
399,508
79,956
76,656
2,733
542
25
319,552
279,874
21.059
451
13,104

160.153
503
120.755
4.519
1.444
17.951
5.846
1.091
8.043
400.998
79.820
76.478
2.791
533
19
321.177
281.180
21.429
583
12,912

182,564
654
136,351
4,850
900
20,735
5.875
1.244
11,954
401,576
80,977
77,596
2,812
548
20
320.599
280,606
21.854
618
12,561

176,419
666
132,570
4,632
1,233
21,356
6,771
1,022
8,168
401,611
81,970
78,554
2,856
539
21
319,641
279,709
21,786
592
12,651

182,465
606
135,420
5,575
6.132
19,751
5,918
861
8,201
401,109
82,011
78,610
2,806
578
18
319,098
279,104
21,700
573
12,836

162,924
521
123,045
4,883
2,347
17,896
6,006
959
7,266
402,652
80,344
77,043
2,757
524
20
322,308
282,175
f21,767
583
12,796

164,712
534
124,189
4,487
1,875
17,983
5,800
957
8,885
401,822
80,043
76,700
2,780
546
17
321,780
281,658
21,676
558
12,951

4,934

4,824

5,063

5,073

4,961

4,903

4,885

4,987

4,936

1.869
1,531
150.384
82.434

60
2,971
149.715
82.570

575
3,105
148,572
84,326

1.240
4,022
144.822
84.320

843
2,281
146,642
86,462

45
2,121
153,448
82,088

3,304
3,956
151,289
84,196

1,356
9,432
144,169
85,532

575
13,168
141,958
83,620

801,196

791,751

797,076

795,556

820,369

815,731

826,319

806,064

805,855

56.405

56.507

56.425

56.476

56,892

57,013

56,912

56,746

56,719

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




Sept. IP

Sept. 8 p

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

Weekly Reporting Banks
1.27

A19

LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1 Billion or More on
December 31, 1977, Assets and Liabilities
Millions of dollars, Wednesday figures, 1982
Account

1 Cash items in process of collection
2 Demand deposits due from banks in the United S t a t e s . . . .
3 All other cash and due from depository institutions
4

5
6
7

8
9
10
11

12
13
14

15
16

17
18

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

Sept. 15 p

Sept. 22p

Sept. 29p

49,974
6.750
29.654

53,266
7,071
32,065

43,412
6,742
31,338

45,528
6,441
26,255

596,218

598,503

600,967

595,027

598,385

34,186
7,525
26,660
9.111
15.720
1,830
71.677
3.378
68.299
14.436
50.994
6.343
44.651
2.869

33,978
6,854
27,124
9,300
15,983
1,840
72,320
4,004
68,316
14,424
50,985
6,334
44,650
2,907

35,590
7,965
27,625
9,335
16,306
1.984
73.746
5,666
68,080
14.280
50.879
6,348
44,532
2,921

35,498
7,627
27,870
9,591
16,385
1,894
71,670
3,711
67,960
14,231
50,827
6,390
44.437
2.901

34,696
7,064
27,632
9,560
16,246
1,826
71,611
3,539
68,072
14,246
50,913
6,232
44,680
2,913

34,643
7,108
27,535
9,181
16,459
1,895
72,116
3.839
68,278
14,357
51,059
6,289
44,770
2,861

36,041
25,601
7,510
2.929
460,396
200,516
3.783
196.733
190,003
6.731
123,328
65,444

35.830
25,177
8,159
2.493
458,144
199,712
4,020
195,692
188,777
6,916
123.635
65,632

37,510
27,496
7,513
2,500
464,706
202,156
4,913
197,243
190,363
6,880
123,731
65,922

37.161
26.947
7,909
2,305
464,346
202,388
4,423
197,966
190,809
7,157
123,787
65.835

39,810
29,417
8,284
2,109
466,317
205,248
4,703
200,546
193,434
7,112
123,973
65.996

35,272
25,313
7,868
2,091
465,752
206,015
4,324
201,691
194,578
7,113
124,266
66,014

35,762
25,592
8,250
1,920
468,097
206,424
4,494
201,929
194,651
7,278
124,266
66,141

6.829
7,082
11.069
15.798
5.894
2.348
6.354
13.345
5,209
7.048
445.745
10.715
120.908

6,925
6,973
10,972
15,923
7,903
2,362
6.360
13,688
5.207
7.071
448,118
10,716
121.884

6,844
6,807
11,118
15.687
6,380
2.338
6.311
13,680
5,186
7,056
445,903
10,700
122.186

7,028
7,193
11,452
16,066
7,662
2,338
6,382
14,774
5.150
7.146
452,411
10.738
126,044

8,290
7.358
10.843
15,776
7.134
2,361
6,319
14.254
5,145
7,195
452,006
10,753
126,316

6,875
7.416
10,851
16,041
7,033
2,301
6.297
14,286
5,152
7,176
453,989
10,780
128,045

6,555
7,168
10,629
15,830
6,700
2,309
6,335
13,931
5,113
7,192
453,448
10,758
124,809

6,615
6,821
10.950
15,773
7,850
2,371
6,390
14,495
5,115
7,119
455,863
10,760
125,054

Aug. 11

Aug. 18

45.901
6.179
30,075

40.624
5.824
31.997

42.539
5.695
31.658

42.098
6,015
34.038

55.244
7,037
31,606

593,054

588,594

591,301

587,596

35,558
9,238
26.320
8,629
15,651
2,040
71.874
3,778
68,096
14.249
51.025
6,619
44,406
2.821

35.963
9.378
26,585
8.914
15.658
2.013
73.279
5.290
67,989
14.216
50.913
6.451
44,462
2.860

35,567
8,629
26,938
9.520
15,452
1.966
71.576
3,345
68,231
14,380
50.996
6,402
44.593
2,856

37.748
26.682
8.127
2,938
460.083
200,444
3.962
196.482
189,669
6.813
122,958
65,442

33.606
23.710
7.072
2,824
458.001
200,826
4.253
196.573
189.822
6,752
123.163
65.293

6,549
7,204
11,178
15,723
8,019
2,342
6,368
13.853
5,182
7,027
447,874
10.722
121,447

Aug. 4

Aug. 25

Sept. I ?

Sept. 8 p

39
40
41
42
43

Loans
Federal funds sold 1
To commercial banks
T o nonbank brokers and dealers in securities
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate
To individuals for personal expenditures
To financial institutions
Commercial banks in the United States
Banks in foreign countries
Sales finance, personal finance companies, etc
Other financial institutions
T o nonbank brokers and dealers in securities
To others for purchasing and carrying securities 2
To finance agricultural production
All other
LESS: Unearned income
Loan loss reserve
Other loans, net
Lease financing receivables
All other assets

44

Total assets

807,378

798,663

803,795

802,633

826,888

821,960

832,195

812,086

812,423

Deposits
Demand deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for profit . . . .
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and banks .
Liabilities for borrowed money

155,947
616
114,842
4.454
3,020
17.065
6,931
1,024
7,994
373.049
74,432
71,395
2,528
485
24
298,616
262,356
18,861
393
12,072
4,934

149.875
574
113,907
4.405
1.678
15.986
6.184
865
6.277
371.279
73.997
70.933
2.519
521
24
297,282
261.179
18.987
371
11.920
4,824

149,985
535
113,530
3,891
2,319
16,375
5.977
1,003
6,354
375.302
73,769
70.722
2,516
506
25
301,533
264,083
19.174
393
12,819
5,063

149.259
489
112.150
4.018
1,305
16,623
5.794
1,087
7,792
376.786
73,658
70,581
2,574
484
19
303,129
265.331
19,551
524
12,650
5,073

170,515
636
126.934
4,324
804
19,147
5,815
1,239
11,616
377,142
74,730
71.611
2,589
509
20
302,412
264,676
19,915
549
12,310
4,961

164,286
640
123,203
4,057
1,068
19,691
6,726
1,020
7,881
377,088
75,629
72,481
2,632
495
21
301,458
263,776
19,808
524
12,447
4,903

170,048
589
126,134
5,059
5,470
18,205
5.856
847
7,889
376,455
75,653
72,571
2,570
494
18
300,802
263.027
19,754
506
12,629
4.885

151,413
506
114,542
4,249
1,921
16,538
5,954
951
6,751
378,084
74,148
71,111
2,535
482
20
303,936
266,008
19,845
516
12,580
4,987

153,241
518
115,199
3,974
1,688
16,608
5,719
935
8,599
377,051
73,856
70,776
2,556
507
17
303,195
265,294
19,754
496
12,715
4,936

1,865
1,388
141.962
80,274

5
2.756
141,355
80,377

525
2,858
140,121
82,049

1.103
3,745
136,694
82,054

836
2,101
138,704
84,220

1,952
145,244
79,914

3,239
3,678
143,324
82,061

1,297
8,806
135,863
83,394

535
12,393
134,561
81,450

754,483

745,647

750,839

749,642

773,518

768,484

778,806

758,858

759,231

52,895

53.016

52,955

52,989

53,370

53,476

53,388

53,228

53,192

19
20

21
22
23
24

25
26
27
28
29
30
31

32
33
34

35
36
37

38

45
46
47

48
49
50

51
52
53
54
5S

56
57
58
59
60

61
62
63
64
65
66
67

68
69
70

Treasury tax-and-loan notes
All other liabilities for borrowed money 3
Other liabilities and subordinated notes and debentures
Total liabilities

71 Residual (total assets minus total liabilities)

4

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




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

A20
1.28

DomesticNonfinancialStatistics • October 1982
LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities
Millions of dollars, Wednesday figures, 1982
Account

1 Cash items in process of collection
2 D e m a n d deposits due f r o m banks in the United
States
3 All other cash and due f r o m depository institutions..
4 Total loans and securities'

Aug. 11

Aug. 18

Aug. 25

Sept. I ?

Sept. SP

Sept. 15 p

Sept. 22P

Sept. 29P

14,644

12,759

13,494

14,923

22,531

16,109

18,914

14,156

16,655

1,336
6,262

1,160
6,877

1,302
5,953

1,248
6,812

1,567
5,726

1,200
5,468

1,587
8,967

1,773
5,110

1,191
4,522

139,746

136,605

138,920

140,826

144,483

142,458

143,435

142,802

142,266

6,428
1,064
4,776
587

6,313
1,047
4,703
563

6,447
1,222
4,672
553

6,374
1,096
4,790
488

6,437
1,109
4,839
488

6,678
1,016
5,094
568

6,708
1,138
5,052
518

6,602
1,117
4,982
503

6,556
991
4,989
576

14,245
2.003
11,314
1.664
9.650
928

14,123
2,003
11,199
1,514
9,685
922

14,116
2,010
11,169
1,470
9,698
937

14,168
2,059
11,172
1,454
9,717
938

14,191
2,054
11,160
1,422
9,738
977

14,108
2,042
11,081
1,431
9,650
984

13,939
2,022
10,951
1,411
9,540
966

13,908
2,015
10,931
1,271
9,660
962

13,928
2,084
10,920
1,253
9,666
924

9,400
4,314
3,664
1,421
113,425
59,412
1,139
58,273
56,899
1,374
18,463
11,364

8,087
3,709
3,163
1,215
111,855
59,291
1,314
57,977
56,663
1,314
18,462
11,386

8,850
4,004
3,619
1,227
113,283
59,249
1,305
57,944
56,642
1,302
18,507
11,434

11,467
6,150
4,347
969
112,599
59,057
1,250
57,807
56,399
1,408
18,769
11,460

11,690
6,946
3,783
961
115,956
59,963
1,683
58,280
56,912
1,368
18,812
11,524

9,989
4,955
4,084
950
115,477
59,890
1,381
58,508
57,117
1,391
18,823
11,535

10,524
5,321
4,300
902
116,088
61,381
1,482
59,899
58,528
1,371
18,919
11,531

10,687
5,812
3,824
1,051
115,418
61,575
1,311
60,264
58,749
1,516
18,969
11,590

8,982
4,045
4,067
869
116,578
61,222
1,197
60,025
58,410
1,615
18,941
11,594

1,842
2,884
4.911
4,720
4,929
620
440
3,838
1,496
2,255
109,673
2,119
51,020

2,068
2,775
4,777
4,794
3,548
625
432
3,696
1,511
2,262
108.082
2,118
50,739

1,946
2,748
4,674
4,863
5,001
644
432
3,783
1,513
2,263
109,507
2,119
50,169

1,928
2,501
4,851
4,829
4,262
612
426
3,902
1,510
2,270
108,818
2,104
50,111

2,019
2,848
5,146
5,098
5,148
616
491
4,290
1,500
2,292
112,164
2,091
52,305

2,835
3,109
4,734
4,849
4,750
642
428
3,881
1,484
2,309
111,683
2,090
52,015

1,961
3,002
4,781
4,966
4,725
618
416
3,786
1,491
2,333
112,264
2,112
51,595

1,879
2,764
4,560
4,914
4,415
621
413
3,718
1,490
2,325
111,604
2,092
50,572

1,986
2,544
4,723
4,902
5,516
649
424
4,074
1,490
2,289
112,799
2,093
50,615

215,128

210,259

211,957

216,025

228,703

219,340

226,610

216,504

217,342

43,804
320
27,589
679
830
3,669
5,499
788
4,431
73,775
9,633
9,293

42,555
323
28,529
848
496
3,858
4,813
627
3,060
73,437
9,626
9,259

42,244
283
28,319
432
662
4,011
4,637
754
3,146
75,063
9,599
9,246

44,762
231
29,311
452
381
4,740
4,398
806
4,443
75,469
9,560
9,228

54,114
300
34,783
602
140
5,529
4,395
950
7,416
76,005
9,671
9,342

48,304
306
31,976
751
318
4,828
5,197
759
4,171
75,260
9,812
9,475

51,336
300
34,330
1,233
1,612
4,491
4,613
595
4,162
74,528
9,834
9,498

43,974
260
29,440
607
508
4,495
4,573
665
3,426
74,310
9,664
9,332

45,781
249
30,407
519
474
3,915
4,491
686
5,042
72,705
9,645
9,311

232
105
2
64,143
54,188
2,289
78
5,255

231
134
2
63,811
54,024
2,330
77
5,148

231
120
2
65,464
55,071
2,386
94
5.659

235
96
2
65,909
55,429
2,350
190
5,688

241
85
2
66,333
55,851
2,442
224
5,583

246
88
3
65,447
55,173
2,384
211
5,526

237
97
2
64,694
54,487
2,372
197
5,533

231
99
1
64,646
54,692
2,333
206
5,352

228
105
1
63,060
53,183
2,300
195
5,376

2,333

2,232

2,254

2,252

2,234

2,153

2,105

2,063

2,006

947
45,742

525
837
44,704

175
1,268
46,017

670
620
46,156

702
47,430

1,855
1,103
48,651

891
2,805
45,339

28
3,134
47,864

Aug. 4

Securities
7
8
9
10

Investment account, by maturity
One year or less
Over one through five years
Over five years

13
14
15
16
17
18

Investment account
U.S. government agencies
States and political subdivision, by maturity . . . .
O n e year or less
Over one year
Other bonds, corporate stocks and s e c u r i t i e s . . . .

Loans
19 Federal funds sold 3
20
To commercial banks
21
To nonbank brokers and dealers in securities
22
T o others
23 Other loans, gross
24
Commercial and industrial
25
Bankers acceptances and commercial paper
26
All other
27
U.S. addressees
28
Non-U.S. addressees
29
Real estate
30
To individuals for personal expenditures
31
To financial institutions
Commercial banks in the United States
32
Banks in foreign countries
33
Sales finance, personal finance companies, e t c . . .
34
Other financial institutions
35
To nonbank brokers and dealers in securities
36
To others for purchasing and carrying securities 4 .
37
To finance agricultural production
38
All other
39 LESS: Unearned income
40
Loan loss reserve
41 Other loans, net
42 Lease financing receivables
43 All other assets 5
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65

Deposits
D e m a n d deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for
profit
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and
banks
Liabilities for borrowed money

67
Treasury tax-and-loan notes
68
All other liabilities for borrowed money 6
69 Other liabilities and subordinated notes and
debentures
70 Total liabilities
71 Residual (total assets minus total liabilities) 7

1.
2.
3.
4.

400
280
49.005
30,034

29,673

30,686

30,517

32,992

29,446

30,835

31,002

29,857

197,298

192,354

194,061

198,209

210,557

201,142

208,309

198,321

199,369

17,829

17,905

17,896

17,816

18,146

18,198

18,301

18,182

17,973

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




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

Weekly Reporting Banks
1.29

LARGE WEEKLY REPORTING COMMERCIAL BANKS

A21

Balance Sheet Memoranda

Millions of dollars, Wednesday figures, 1982
Account

Aug. 4

Aug. 1 1

Aug. 1 8

Aug. 2 5

Sept. 1 p

Sept. 8 ?

Sept. 15 P

Sept. 22P

Sept. 29P

616,495
499,972

B A N K S WITH A S S E T S OF $ 7 5 0 M I L L I O N OR M O R E

1 Total loans (gross) and securities adjusted 1
2 Total loans (gross) adjusted 1
3 D e m a n d deposits adjusted 2

609,209
492,321
96,915

607,496
488,746
98,568

608,492
491,770
95,642

605,059
489,586
96,287

611,261
495,430
102,844

612,903
493,959
100,750

614,628
497,714
100,226

613,665
497,612

96,564

96,880

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

202,763

201,316
144,794
56,522

205,141

206,667

205,841

203,854

149,800

56,867

148,434
57,408

57,344

57,100

206,555
148,887
57,667

205,787

148,642
56,499

204,620
147,276

542

2,795
2,256
540

2,822
2,278
544

2,881
2,318
563

2,833
2,272
561

2,835
2,280
555

2,820
2,260
560

2,855
2,274
582

2,281
580

10 Total loans (gross) and securities adjusted 1
11 Total loans (gross) adjusted 1
12 D e m a n d deposits adjusted 2

572,031
464,599
89,960

570,312
461,069
91,587

571,053
463,910
88,752

567,816
461,953
89,233

573,989
467,692
95,319

575,606
466,270
93,552

577,003
469,835
93,107

575,464
469,157
89,541

578,411
471,651
89,416

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

193,765
140,752
53,013

192,325
139,294
53,031

196,177
143,275
52,899

197,694
144,505
53,190

196,749
143,045
53,704

195,547
141,951
53,596

194,672
141,356
53,316

197,328
143,482
53,846

142,656

2,714
2,194
520

2,708
2,191
516

2,736
2,215
521

2,800
2,260
540

2,754
2,214
539

2,751
2,214
537

2,741
2,196
545

2,787
2,220
567

2,784
2,218
566

137,341
116,668
24,661

134,601
114,165
25,442

136,746
116,183
24,078

136,528
115,986
24,719

139,310
118,682
25,915

138,462
117,676
27,050

139,976
119,328
26,319

138,925
118,414
24,815

140,013
119,528
24,738

49,601
38,358
11,244

49,264
37,938
11,325

50,831
39,772
11,059

51,250
40,227
11,023

51,591
40,411
11,180

50,613
39,650
10,963

49,866
39,095
10,771

49,801
38,798
11,003

48,155
37,157
10,998

7 Loans sold outright to affiliates 3
8
Commercial and industrial
9
Other

146,289

56,474
2,804
2,261

146,755

148,230

57,556
2,861

B A N K S WITH ASSETS OF $ 1 B I L L I O N OR M O R E

16 Loans sold outright to affiliates 3
17
Commercial and industrial
18
Other

196,368
53,713

B A N K S IN N E W Y O R K C I T Y

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

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




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

A22
1.291

DomesticNonfinancialStatistics • October 1982
LARGE WEEKLY REPORTING BRANCHES A N D AGENCIES OF FOREIGN BANKS

Assets and Liabilities

Millions of dollars, Wednesday figures, 1982
Account

Aug. 4

Aug. 11

Aug. 18

Aug. 25

Sept. IP

Sept. 8 p

Sept. 15 p

Sept. 22p

Sept. 29p

Cash and due from depository institutions
Total loans and securities
U.S. Treasury securities
Other securities
Federal funds sold 1
T o commercial banks in United S t a t e s . .
T o others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addressees
Non-U.S. addressees
T o financial institutions
Commercial banks in United States . .
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities . .
All other
Other assets (claims on nonrelated
parties)
Net due from related institutions
Total assets

6,416
45,352
1,851
849
2,658
2,490
168
39,994
18,877

6,589
45,170
1,878
847
3,187
3,098
89
39,258
18,664

6,788
45,855
1,776
849
3,270
3,048
222
39,959
18,648

6,644
45,330
1,735
856
2,631
2,508
123
40,108
19,054

6,946
46,072
1,565
859
3,344
3,115
229
40,304
19,369

7,112
45,792
1,573
854
3,005
2,546
459
40,360
19,579

6,865
46,556
1,743
841
3,760
3,554
207
40,212
19,601

7,265
46,164
1,856
840
2,884
2,824
60
40,584
19,543

7,253
47,712
1,757
840
4,042
3,758
283
41,074
20,136

3,047
15,830
13,816
2,013
16,242
13,197
2,413
631
582
4,293

3,077
15,587
13,542
2,045
15,865
12,831
2,426
608
455
4,274

2,893
15,755
13,793
1,962
16,214
13,116
2,488
611
557
4,540

3,099
15,954
13,780
2,174
16,162
13,180
2,368
614
413
4,480

3,105
16,264
14,060
2,204
15,905
12,868
2,417
619
477
4,553

3,158
16,421
14,279
2,142
15,948
13,050
2,292
606
233
4,600

3,145
16,456
14,455
2,001
15,884
13,072
2,198
614
352
4,374

3,097
16,447
14,459
1,988
16,298
13,264
2,391
643
316
4,426

3,286
16,849
14,896
1,953
16,169
13,166
2,308
694
433
4,336

12,898
11,582
76,247

12,941
11,956
76,655

13,030
12,405
78,078

12,712
12,197
76,884

12,606
12,459
78,083

12,421
12,514
77,839

12,361
12,220
78,003

12,068
12,063
77,560

11,859
11,153
77,977

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

21,425
201
1,913

21,448
192
1,760

22,568
230
1,940

22,226
214
1,813

23,030
245
2,048

22,592
239
1,988

22,454
249
2,064

23,462
178
2,081

23,771
212
1,906

811
1,102
19,311

710
1,050
19,496

770
1,170
20,398

763
1,050
20,199

731
1,317
20,736

721
1,267
20,365

937
1,126
20,141

860
1,221
21,203

771
1,135
21,653

16,224
3,087
33,756
8,684

16,352
3,145
33,707
8,621

17,010
3,388
34,448
9,447

16,808
3,391
32,934
7,910

17,303
3,433
34,340
9,451

17,111
3,254
34,360
9,690

16,871
3,269
34,192
9,735

17,930
3,274
33,316
8,499

18,609
3,044
32,624
8,058

7,747
937
25,073
22,643
2,430
13,033
8,033
76,247

7,746
875
25,086
22,595
2,491
12,829
8,671
76,655

8.625
822
25,001
22,600
2,401
12,857
8,205
78,078

7,045
865
25,024
22,564
2,460
12,518
9,206
76,884

8,612
839
24,889
22,518
2,371
12,428
8,285
78,083

8,758
933
24,669
22,358
2,311
12,159
8,728
77,839

8,559
1,176
24,457
22,158
2,300
12,141
9,216
78,003

7,440
1,059
24,817
22,376
2,440
11,800
8,981
77,560

7,227
831
24,565
22,333
2,232
11,629
9,954
77,977

29,664
26,965

29,241
26,516

29,691
27,065

29,642
27,051

30,088
27,664

30,197
27,770

29,931
27,346

30,076
27,380

30,788
28,190

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

MEMO

41 Total loans (gross) and securities
adjusted'
42 Total loans (gross) adjusted 5

1. Includes securities purchased under agreements to resell.
2. Balances due to other than directly related institutions.
3. Borrowings from other than directly related institutions.
4. Includes securities sold under agreements to repurchase.
5. Excludes loans and federal funds transactions with commercial banks in United
States




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

Weekly Reporting Banks
1.30

LARGE WEEKLY REPORTING COMMERCIAL BANKS

A23

Domestic Classified Commercial and Industrial Loans

Millions of dollars

Industry classification
May 26

June 30

Outstanding

Net change during

1982

1982

July 28

Aug. 25

Sept. 29P

Q2

Q3

July

Aug.

Sept/

1 Durable goods manufacturing

28,842

29,104

28,543

29,155

31,469

465

2,367

-560

611

2,328

2 Nondurable goods manufacturing
Food, liquor, and tobacco
3
4
Textiles, apparel, and leather
5
Petroleum refining
6
Chemicals and rubber
7
Other nondurable goods

23,998
4,784
4,722
4,677
5,232
4,581

25,297
4,807
4,864
5,087
5,551
4,988

24,819
4,681
5,068
4,840
5,198
5,032

24,890
4,584
5,064
4,717
5,548
4,976

25,809
4,840
4,856
5,316
5,811
4,987

2,135
256
329
638
795
498

506
34
-7
220
260
1

-478
-126
204
-247
-353
44

71
-96
-4
-123
350
-56

939
243
-209
598
292
14

8 Mining (including crude petroleum and natural gas)

28,246

28,257

27,987

27,330

28,248

2,406

-7

-270

-657

931

9 Trade
10
Commodity dealers
Other wholesale
11
Retail
12

28,704
1,873
13,489
13,342

29,166
1,861
13,775
13,529

28,580
1,648
13,634
13,298

28,304
1,788
13,482
13,035

29,010
1,945
13,974
13,091

345
-460
249
556

-187
84
198
-469

-586
-214
-141
-231

-276
140
-152
-263

680
158
483
38

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

23,703
9,070
4,559
10,074

25,015
9,228
4,779
11,008

24,964
8,868
4,832
11,263

24,752
8,961
4,904
10,887

24,908
8,981
5,140
10,786

1,372
74
538
760

-105
-246
361
-220

-51
-360
52
256

-211
93
72
-376

155
16
235
-95

17 Construction
18 Services
19 All other 1

7,690
27,956
17,133

7,765
28,780
17,301

7,926
28,863
17,362

7,835
28,987
17,572

7,893
29,332
17,982

513
1,639
40

128
564
719

161
83
61

-91
124
210

63
357
420

186,271

190,684

189,044

188,825

194,651

8,914

3,986

-1,640

-219

5,874

89,282

89,849

87,247

87,050

89,290

2,646

-559

-2,602

-196

2,240

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

1. Includes commercial and industrial loans at a few banks with assets of $1
billion or more that do not classify their loans.




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

A24
1.31

DomesticNonfinancialStatistics • October 1982
GROSS D E M A N D DEPOSITS of Individuals, Partnerships, and Corporations1
Billions of dollars, estimated daily-average balances
Commercial banks
Type of holder
1978
Dec.

1980

19792
Dec.

Dec.
1 All holders—Individuals, partnerships, and
corporations
2
3
4
5
6

Financial business
Nonfinancial business
Consumer
Foreign
Other

294.6

302.2

27.8
152.7
97.4
2.7
14.1

27.1
157.7
99.2
3.1
15.1

315.5
29.8
162.3
102.4
3.3
17.2

1981
Mar. 3

280.8
30.8
144.3
86.7
3.4
15.6

June 4

1982
Sept.

f
1
n.a.
1
I
t

Dec.

Mar.

June

277.5

288.9

268.9

271.5

28.2
148.6
82.1
3.1
15.5

28.0
154.8
86.6
2.9
16.7

27.8
138.7
84.6
3.1
14.6

28.6
141.4
83.7
2.9
15.0

Weekly reporting banks
1980
1978
Dec.

19795
Dec.
Dec.

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

Financial business
Nonfinancial business
Consumer
Foreign
Other

Mar. 3

147.0

139.3

147.4

133.2

19.8
79.0
38.2
2.5
7.5

20.1
74.1
34.3
3.0
7.8

21.8
78.3
35.6
3.1
8.6

21.9
69.8
30.6
3.2
7.7

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




1981
June 4

1982
Sept.

Dec.

Mar.

June

!

131.3

137.5

126.8

127.9

n.a.
1

20.7
71.2
28.7
2.9
7.9

21.0
75.2
30.4
2.8
8.0

20.2
67.1
29.2
2.9
7.3

20.2
67.7
29.7
2.8
7.5

1

1

\

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

Deposits and Commercial Paper
1.32

A25

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

Instrument

1977
Dec.

1978
Dec.

1979 1
Dec.

1982
1980
Dec.

1981
Dec.
Mar.

Apr.

May

June

July

Aug.

Commercial paper (seasonally adjusted)
1 All issuers

2
3
4
5
6

Financial companies 2
Dealer-placed
paper3
Total
Bank-related (not seasonally
adjusted)
Directly placed paper4
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies 5

65,051

83,438

112,803

124,524

165,508

166,726

171,866

176,210

178,842

180,669

177,182

38,066

8,796

12,181

17,359

19,790

30,188

31,574

32,848

34,683

36,685

37,961

2,132

3,521

2,784

3,561

6,045

7,055

7,905

8,003

7,188

6,427

6,038

40,574

51,647

64,757

67,854

81,660

78,322

81,585

82,390

84,774

85,684

81,707

7,102
15,681

12,314
19,610

17,598
30,687

22,382
36,880

26,914
53,660

27,579
56,830

29,434
57,433

30,576
59,137

30,828
57,383

31,141
57,024

28,901
57.409

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

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

8
9
10
11
12
13

25,450

33,700

45,321

54,744

69,226

71,619

71,128

71,601

71,765

72,559

10,434
8,915
1,519

8,579
7,653
927

9,865
8,327
1,538

10,564
8,963
1,601

10,857
9,743
1,115

12,964
11,139
1,825

12,675
11,409
1,266

11,104
9,879
1,225

10,362
9,175
1,188

11,164
9,734
1,431

954
362
13,700

1
664
24,456

704
1,382
33,370

776
1,791
41,614

0
1,442
56,926

0
1,379
57,276

0
1,329
57,124

0
1,234
59,262

0
1,348
60,054

0
1,250
60,145

6,378
5,863
13,209

8,574
7,586
17,540

10,270
9,640
25,411

11,776
12,712
30,257

14,765
15,400
39,061

14,877
16,835
39,907

15,303
16,887
38,937

14,979
16,255
40,458

15,213
15,649
40,842

15,094
16,167
41,298

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




n a.

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

A26
1.33

DomesticNonfinancialStatistics • October 1982
PRIME R A T E C H A R G E D B Y B A N K S on Short-Term Business Loans
Percent per annum
Effective Date

Rate

20.00
19.50
19.00
18.00
17.50
17.00
16.5017.00
16.50
16.00
15.75

1.34

1982—Feb.

Rate

16.50
17.00
16.50
16.00
15.50
15.00
14.50
14.00
13.50

2.

18.

23.
July 20.
29.
Aug. 2.
16.
18.
23.

Average
rate

Month

1981—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

20.16
19.43
18.05
17.15
19.61
20.03
20.39
20.50
20.08
18.45
16.84
15.75

1982—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.

TERMS OF L E N D I N G A T C O M M E R C I A L B A N K S Survey of Loans Made, May 3-8, 1982
Size of loan (in thousands of dollars)
All
sizes
1-24

25-49

50-99

100-499

500-999

1,000
and over

S H O R T - T E R M COMMERCIAL AND
INDUSTRIAL L O A N S

1
2
3
4
5

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

36,600,259
161,197
1.2
17.11
16.58-17.51

885.940
115,667
3.4
18.51
17.42-19.51

501,046
14,935
3.8
18.56
17.55-19.25

707,807
11,137
3.4
18.06
17.62-18.50

2,349,121
13,022
3.6
17.77
17.00-18.67

1,198,641
1,848
2.4
17.98
17.00-18.97

30,957,703
4,588
.9
16.94
16.57-17.30

29.8
51.7
14.4

39.2
36.2
12.8

48.4
40.3
14.8

44.8
49.3
24.9

52.3
63.7
19.9

50.8
51.2
24.0

26.3
51.5
13.4

410,817
1,547
50.1
17.59
17.50-17.81

164,045
244
43.3
17.29
16.50-18.00

2,876,880
562
51.8
16.69
16.00-17.32

45.9
36.2

83.5
82.8

77.7
80.4

Percentage of amount of loans
6 With floating rate
7 Made under commitment
8 With no stated maturity
L O N G - T E R M COMMERCIAL AND
INDUSTRIAL L O A N S

9
10
11
12
13

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

1-99

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

71.7
72.1

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

21
22
23
24

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

33
34
35
36
37

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

500 and over

228,405
6,446
12.3
18.81
17.00-19.82

166,690
2,273
8.3
17.97
16.72-19.25

427,520
3,050
14.1
18.45
18.13-19.59

28.8
85.0
32.9
.9

37.7
74.1
55.5
1.9

22.5
82.1
65.6
1.1

47.1
80.6
19.3
2.7

20.7
97.9
18.4
1.4

29.0
82 .8
29.6
.0

30.0
4.8
65.2

40.0
3.2
56.8

54.0
1.1
44.9

40.8
4.9
54.3

26.0
2.7
71.3

21.9
7.1
71.0

1-9

10-24

25-49

50-99

916,297
805
10.6
16.96
16.07--17.88

100-249

250
and over

1,224,054
70,983
7.6
17.76
17.18-18.39

172,901
46.365
6.6
17.63
17.00-18.39

214,006
15,091
6.4
17.59
17.18-18.27

167,333
4.919
7.6
17.59
17.06-18.13

190,019
2,781
5.3
18.01
17.25-18.68

193,183
1,363
9.3
17.76
17.17-18.27

286,611
465
9.4
17.91
17.25-18.77

17.81
17.51
17.66
18.19
17.85

17.89
17.75
17.46
18.14
18.21

17.73
17.57
17.61
17.31
17.70

17.69
17.34
17.57
17.30
17.68

18.56
17.42
17.83

17.84
17.97
17.65

17.56

1. Interest rate range that covers the middle 50 percent of the total dollar amount

of loans made.

2. Fewer than 10 sample loans.


50-99

182.396
18,881
7.2
19.13
18.54-20.15

All
sizes
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per a n n u m ) . .
Interquartile range 1

25-49

1,921,308
31,454
11.1
17.80
16.07-19.10

Type of construction
25 1- to 4-family
26 Multifamily
27 Nonresidential

28
29
30
31
32

38.6
28.9
1-24

CONSTRUCTION AND
LAND DEVELOPMENT LOANS

16
17
18
19
20

253,640
18,222
29.9
18.80
17.79-19.56

3,705,382
20,575
49.8
16.96
16.50-17.51

*

17.76

*

17.85

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

*

17.59
*

17.98

Securities Markets
1.35

A27

INTEREST R A T E S Money and Capital Markets
Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted.
1982
Instrument

1979

1980

1982, week ending

1981
June

July

Aug.

Sept.

Sept. 3

Sept. 10

Sept. 17

Sept. 24

Oct. 1

MONEY MARKET RATES

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

11.19

13.36

16.38

14.15

12.59

10.12

10.31

10.15

10.14

10.27

10.31

10.12

10.86
10.97
10.91

12.76
12.66
12.29

15.69
15.32
14.76

13.95
13.96
13.79

12.62
12.94
13.00

9.50
10.15
10.80

9.96
10.36
10.86

9.58
10.10
10.84

9.99
10.29
10.95

10.17
10.64
11.20

9.88
10.37
10.76

9.86
10.17
10.45

10.78
10.47
10.25

12.44
11.49
11.28

15.30
14.08
13.73

13.79
13.09
12.69

12.42
12.24
12.15

9.32
9.62
9.93

9.89
9.65
9.63

9.52
9.44
9.47

9.97
9.70
9.65

9.79
9.79
9.74

10.79
9.67
9.67

9.77
9.42
9.42

11.04
n.a.

12.78
n.a.

15.32
14.66

14.00
13.76

12.90
12.91

10.34
10.90

10.40
10.82

10.12
10.99

10.33
10.96

10.68
11.11

10.47
10.68

10.16
10.33

11.03
11.22
11.44
11.96

12.91
13.07
12.99
14.00

15.91
15.91
15.77
16.79

14.18
14.46
14.66
15.45

12.88
13.44
13.80
14.37

10.07
10.61
11.53
11.57

10.23
11.66
11.46
11.74

9.98
10.42
11.64
11.26

10.15
10.58
11.64
11.53

10.53
10.94
11.81
11.94

10.21
10.73
11.31
11.93

10.08
10.43
10.86
11.61

10.07
10.06
9.75

11.43
11.37
10.89

14.03
13.80
13.14

12.47
12.70
12.57

11.35
11.88
11.90

8.68
9.88
10.37

7.92
9.37
9.92

8.31
9.59
10.12

8.34
9.63
10.09

8.03
9.57
10.12

7.53
9.21
9.77

7.52
8.85
9.51

10.041
10.017
9.817

11.506
11.374
10.748

14.077
13.811
13.159

12.108
12.310
12.173

11.914
12.236
12.318

9.006
10.105
11.195

8.196
9.539
10.286

8.604
9.746

8.565
9.605
10.286

8.161
9.704

7.849
9.443

7.801
9.196

10.67
10.12

12.05
11.77

14.78
14.56

14.07
14.47

13.24
13.80

11.43
12.32

10.85
11.78

11.12
11.93

11.10
12.01

11.55
11.48
11.43
11.46
11.39
11.30

14.44
14.24
14.06
13.91
13.72
13.44

14.48
14.43
14.47
14.30
14.18
13.92

14.00
14.07
14.07
13.95
13.76
13.55

12.62
13.00
13.14
13.06
12.91
12.77

12.03
12.25
12.36
12.34
12.16
12.07

12.25
12.54
12.77
12.69
12.48
12.38

12.23
12.47
12.60
12.58
12.42
12.21

10.67
11.68
11.80
11.96
12.11
12.13
12.14
11.95
11.86

10.34
11.37

9.71
9.52
9.48
9.44
9.33
9.29

11.05
11.90
12.05
12.16
12.43
12.63
12.58
12.39
12.25

8.74

10.81

12.87

13.32

12.97

12.15

11.48

11.76

11.63

11.62

11.30

11.18

5.92
6.73
6.52

7.85
9.01
8.59

10.43
11.76
11.33

11.55
12.74 c
12.45

11.47
13.17
12.28

10.68
12.36
11.23

9.76
11.75
10.66

9.40
12.00
10.74

9.40
12.00
10.75

10.00
12.00
10.74

10.00
11.50
10.58

10.00
11.25
10.48

10.12
9.63
9.94
10.20
10.69

12.75
11.94
12.50
12.89
13.67

15.06
14.17
14.75
15.29
16.04

15.77
14.81
15.26
16.07
16.92

15.70
14.61
15.21
16.20
16.80

15.06
13.71
14.48
15.70
16.32

14.34
12.94
13.72
15.07
15.63

14.56
13.20
14.00
15.32
15.73

14.43
13.03
13.87
15.18
15.63

14.43
13.08
13.80
15.13
15.72

14.25
12.83
13.57
14.95
15.65

14.09
12.66
13.44
14.84
15.40

10.03
10.02

12.74
12.70

15.56
15.56

15.92
15.84

15.61
15.61

13.95
14.47

13.50
13.57

13.88

13.93
13.87

13.60
13.67

13.14
13.28

13.31
13.30

9.07
5.46

10.57
5.25

12.36
5.41

12.96
5.97

13.24
6.31

12.78
6.32

12.41
5.63

12.38
5.80

12.42
5.61

12.44
5.52

12.47
5.54

12.35
5.66

CAPITAL M A R K E T R A T E S

U.S. Treasury notes and bonds 9
Constant maturities 1 0
20
1-year
21
2-year

it

23
24
25
26
27
28
29

3-year
5-year
7-year
10-year
20-year
30-year
Composite 1 2
Over 10 years (long-term)

State and local notes and bonds
Moody's series 1 3
3(1
Aaa
31
Baa
32
Bond Buyer series 1 4

33
34
35
36
37
38
39
40
41

Corporate bonds
Seasoned issues 15
All industries
Aaa
Aa
A
Baa
Aaa utility bonds 1 6
Recently offered issues
MEMO: Dividend/price ratio 1 7
Preferred stocks
Common stocks

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




11.60
11'. 74
11.77
11.78
11.65
11.76

11. Each weekly figure is calculated on a biweekly basis and is the average of
five business days ending on the Monday following the calendar week. T h e biweekly
rate is used to determine the maximum interest rate payable in the following twoweek period on small saver certificates. (See table 1.16.)
12. Unweighted averages of yields (to maturity or call) for all outstanding notes
and bonds neither due nor callable in less than 10 years, including several very low
yielding "flower" bonds.
13. General obligations only, based on figures for Thursday, from Moody's
Investors Service.
14. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. Issues included are long-term (20 years
or more). New-issue yields are based on quotations on date of offering; those on
recently offered issues (included only for first 4 weeks after termination of underwriter price restrictions), on Friday close-of-business quotations.
17. Standard and Poor's corporate series. Preferred stock ratio based on a sample
of ten issues: four public utilities, four industrials, one financial, and one transportation. Common stock ratios on the 500 stocks in the price index.

A28
1.36

DomesticNonfinancialStatistics • October 1982
STOCK MARKET

Selected Statistics
1982

Indicator

1979

1980

1981
Feb.

Jan.

Mar.

Apr.

May

July

June

Aug.

Sept.

Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
4
Utility
5
Finance
6 Standard & Poor's Corporation ( 1 9 4 1 ^ 3 = 1 0 ) 1 , . .
7 American Stock Exchange
(Aug. 31, 1973 = 100)

55.67
61.82
45.20
36.46
58.65
107.94

68.06
78.64
60.52
37.35
64.28
118.71

74.02
85.44
72.61
38.90
73.52
128.05

67.91
76.85
62.04
39.30
70.99
117.41

66.16
74.78
59.09
38.32
70.50
114.50

63.86
71.51
55.19
38.57
69.08
110.84

66.97
75.59
57.91
39.20
71.44
116.31

67.07
75.97
56.84
39.40
69.16
116.35

63.10
71.59
53.07
37.34
63.19
109.70

62.82
71.37
53.40
37.20
61.59
109.38

62.91
70.98
53.98
38.19
62.84
109.65

70.21
80.08
61.39
40.36
69.66
122.43

186.56

300.94

343.58

296.49

275.10

255.08

271.15

272.88

254.72

250.63

253.54

286.22

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

32,233
4,182

44.867
6,377

46.967
5.346

48.419
4,497

51,169
4,400

55,227
4,329

54,116
3,937

51,328
4,292

50,481
3,720

54,530 r
3,611

76,031
5,567

73,710
5,064

Customer financing (end-of-period balances, in millions of dollars)
10 Regulated margin credit at
brokers-dealers 2

11,619

14,721

14,411

13,441

13,023

12,095

12,202

12,237

11,783

11,729

11,396

11 Margin stock 3
12 Convertible bonds
13 Subscription issues

11,450
167
2

14,500
219
2

14.150
259
2

13,190
249
2

12,770
251
2

11,840
249
6

11,950
251
1

11,990
246
1

11,540
242
1

11,470
258
1

11,150
245
1

n a.

1,105
4,060

2,105
6,070

3,515
7,150

3,455
6,575

3,755
6.595

3,895
6,510

4,145
6,270

4,175
6,355

4,215
6,345

4,410
6,730

4.470
7,550

1
t

Free credit balances at brokers4
14 Margin-account
15 Cash-account

f

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

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

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

16.0
29.0
27.0
14.0
8.0
7.0

14.0
30.0
25.0
14.0
9.0
8.0

37.0
21.0
22.0
10.0
6.0
6.0

37.0
24.0
16.0
10.0
7.0
6.0

44.0
22.0
15.0
8.0
6.0
5.0

39.0
24.0
16.0
10.0
6.0
5.0

34.0
25.0
18.0
10.0
7.0
6.0

40.0
24.0
15.0
9.0
6.0
5.0

43.0
21.0
16.0
9.0
6.0
5.0

44.0
23.0
13.0
9.0
6.0
5.0

30.0
26.0
18.0
12.0
8.0
6.0

n a.
1
1
1

Special miscellaneous-account balances at brokers (end of period)
23 Total balances (millions of dollars) 6
Distribution by equity status
(percent)
24 Net credit status
Debt status, equity of
25
60 percent or more
26
Less than 60 percent

16,150

21,690

25,870

26,080

26,850

28,030

28,252

28,521

29,798

29,773

31,102

44.2

47.8

58.0

58.0

58.0

59.0

57.0

58.0

59.0

59.0

60.0

47.0
8.8

44.4
7.7

31.0
11.0

31.0
11.0

30.0
12.0

28.0
13.0

29.0
13.0

29.0
13.0

28.0
13.0

26.0
14.0

28.0
12.0

f
1
n.a.
1

I
t

Margin requirements (percent of market value and effective date) 7
Mar. 11, 1968
27 Margin stocks
28 Convertible bonds
29 Short sales

June

70
50
70

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




, 1968
80
60
80

May 6, 1970

Dec. 6. 1971

Nov. 24, 1972

65
50
65

55
50
55

65
50
65

Jan. 3, 1974
50
50
50

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

Financial Institutions
1.37

SELECTED FINANCIAL INSTITUTIONS

A29

Selected Assets and Liabilities

Millions of dollars, end of period
1982

1981
Account

1979

1980
Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

Julyr

Aug.

697,354
510,413
72,477
114,464

702,413
509,291
73,676
119,446

Savings and loan associations
1
2
3
4

Assets
Mortgages
Cash and investment securities 1
Other

578,962
475,688
46,341
56,933

630,712
503,192
57,928
69,592

660,326
519,146
61,369
79,811

663,844
518,350
62,756
82,738

667,600
517,493
64,089
86,018

671,895
516,284
66,585
89,026

678,039
515,896
67,758
94,835

681,368
514,475
67,859
99,034

686,942
513,807
69,931
103,204

692,245
512,746
70,451
109,228

578,962

630,712

660,326

663,844

667,600

671,895

678,039

681,368

686,942

692,425

697,354

702,413

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

511,636
64,586
47,045
17,541
8,767
12,394

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

524,374
89,097
62,794
26,303
6,369
15,612

526,382
89,099
62,581
26,518
6,249
18,356

529,064
89,465
62,690
26,775
6,144
20,145

535,566
91,013
63,639
27,374
6,399
18,574

532,899
93,883
65,347
28,536
6,550
22,012

534,517
94,440
65,216
29,224
6,748
25,819

537,965
97,177
66,925
30,252
7,087
24,732

539,127
98,762
67,019
31,743
7,231
27,433

541,490
99,139
66,417
32,722
7,446
29,889

12 Net worth 2

32,638

33,329

28,742

28,392

27,514

27,077

26,487

26,024

25,418

25,454

24,801

24,449

13 MEMO: Mortgage loan commitments
outstanding 3

16,007

16,102

15,758

15,225

15,131

15,397

15,582

16,375

16,622

16,828

15,924

16,728

5 Liabilities and net worth
6
7
8
9
10
11

Savings capital
Borrowed money
FHLBB
Other
Loans in process
Other

Mutual savings banks 4
163,405

171,564

175,258

175,728

175,938

175,763

174,776

174,813

174,952

175,091

175,563

98,908
9,253

99,865
11,733

99,879
15,073

99,997
14,753

99,788
15,029

98,838
15,604

97,464
16,514

97,160
16,424

96,334
17,409

96,346
16,546

96,231
17,104

7,658
2,930
37,086
3,156
4,412

8,949
2,390
39,282
4,334
5,011

9,508
2,271
37,874
5,039
5,615

9,810
2,288
37,791
5,442
5,649

9,991
2,290
37,849
5,210
5,781

9,966
2,293
37,781
5,412
5,869

10,072
2,276
37,379
5,219
5,852

10,146
2,269
37,473
5,494
5,846

9,968
2,259
37,486
5,469
6,027

10,112
2,253
36,958
6,040
6,836

10,036
2,247
36,670
6,167
7,109

22 Liabilities

163,405

171,564

175,258

175,728

175,938

175,763

174,776

174,813

174,952

175,091

175,563

23
24
25
26
27
28
29
30

146,006
144,070
61,123
82,947
1,936
5,873
11,525

154,805
151,416
53,971
97,445
2,086
6,695
11,368

153,809
151,787
48,456
103,331
2,023
11,434
10,015

155,110
153,003
49,425
103,578
2,108
10,632
9,986

154,843
152,801
48,898
103,903
2,042
11.280
9,814

154,626
152,616
48,297
104,318
2,010
11,464
9,672

154,022
151,979
48,412
103,567
2,043
11,132
9,622

153,187
151,021
47,733
103,288
2,166
12,141
9,485

153,354
151,253
47,895
103,358
2,101
12,246
9,352

154,273
152,030
47,942
104,088
2,243
11,230
9,588

154,204
151,845
47,534
104,310
2,359
11,940
9,419

3,182

1,476

1,207

1,293

916

950

978

953

998

1,010

992

14 Assets
15
16
17
18
19
20
21

Loans
Mortgage
Other
Securities
U.S. government 5
State and local government
Corporate and other 6
Cash
Other assets

Deposits
Regular 7
Ordinary savings
Time
Other
Other liabilities
General reserve accounts
MEMO: Mortgage loan commitments
outstanding 8

n a.

Life insurance companies

31 Assets
37
33
34
35
36
37
38
39
40
41
42

Securities
Government
United States 9
State and local
Foreign 1 0
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets

432,282

479,210

523,866

525,803

529,094

531,166

535,402

539,801

543,470

547,075

551,124

338
4,888
6,428
9,022
222,332
178,171
48,757
119,421
13,007
44,825
27,563

21,378
5,345
6,701
9,332
238,113
190,747
47,366
131,030
15,063
41,411
31.702

25,147
8,105
7,172
9,870
256,881
209,639
47,242
137,275
17,819
48,246
38,499

25,209
8,167
7,151
9,891
255,769
208,098
47,670
137,747
18,278
48,706
40,094

25,916
8,771
7,247
9,898
259,279
211,917
47,362
138,210
18,409
49,059
38,121

26,208
9,019
7,302
9,887
259,449
213,180
46,269
138,372
18,702
49,490
38,945

26,958
9,576
7,369
10,013
259,770
213,683
46,087
138,762
19,167
50,052
40,696

27,346
9,832
7,467
10,045
262,599
215,586
47,013
139,206
19,516
50,573
40,561

27,835
10,187
7,543
10,105
264,107
217,594
46,513
139,455
19,713
50,992
41,368

28,243
10,403
7,643
10,197
265,080
219,006
46,074
139,539
19,959
51,438
42,816

28,694
10,774
7,705
10,215
267,627
221,503
46,124
140,044
20,198
51,867
42,694

n a.

Credit unions

43 Total assets/liabilities and capital

65,854

71,709

76,830

77,682

78,012

78,986

81,055

81,351

82,858

84,107

84,423

85,102

44
45
46
47
48
49
50
51

35,934
29,920
53,125
28,698
24,426
56,232
35,530
25,702

39,801
31,908
47,774
25,627
22,147
64,399
36,348
28,051

42,025
34,805
50,631
27,508
23,123
67,981
37,261
30,720

42,382
35,300
50,448
27,458
22,990
68,871
37,574
31,297

42,512
35.500
49,949
27,204
22,745
69,432
37,875
31,557

43,111
35,875
49,610
27,051
22,559
70,227
38,331
31,896

44,263
36,792
49,668
27,119
22,549
72,218
39,431
32,787

44,371
36,980
49,533
27,064
22,469
72,569
39,688
32,881

45,077
37,781
49,556
27,073
22,483
73,602
40,213
33,389

45,705
38,402
49,919
27,295
22,624
74,834
40,710
34,124

45,931
38,492
50,133
27,351
22,782
75,088
40,969
34,119

46,310
38,792
50,733
27,659
23,074
75,331
41,178
34,153

Federal
State
Loans outstanding
Federal
State
Savings
Federal (shares)
State (shares and deposits)

For notes see bottom of page A30.




A30
1.38

DomesticNonfinancialStatistics • October 1982
F E D E R A L FISCAL A N D FINANCING O P E R A T I O N S
Millions of dollars
Calendar year

Type of account or operation

Fiscal
year
1979

Fiscal
year
1980

Fiscal
year
1981

1981
HI

U.S. budget
1 Receipts'
2 Outlays 1 ' 2
3 Surplus, or deficit ( - )
4
Trust funds
5
Federal f u n d s 3
Off-budget

9
10
11

H2

HI

1982
June

July

Aug.

463,302
490,997
-27,694
18,335
-46,030

517,112
576,675
-59,563
8,801
-68,364

599,272
657,204
-57,932
6,817
-64,749

317,304
333,115
-15,811
5,797
-21,608

301,777
358,558
-56,780
-8,085
-48,697

322,478
348,678
-26,200
-17,690
-43,889

66,353
59,629
6,724
5,192
1,532

44,675
64,506
-19,831
-6,171
-13,660

44,924
59,628
-14,704
-1,997
-12,707

-13,261
793

-14,549
303

-20,769
-236

-11,046
-900

-8,728
-1,752

-7,942
227

-2,052
-216

-939
-192

-1,336
-711

-40,162

-73,808

-78,936

-27,757

-67,260

-33,914

4,457

-20,962

-16,751

33,641

70,515

79,329

33,213

54,081

41,728

3,260

14,348

21,086

-408
6,929

-355
3,648

-1,878
1,485

2,873
-8,328

-1,111
14,290

-408
-7,405

3,489
-4,228

1,061
5,553

2,338
-6,673

24,176
6,489
17,687

20,990
4,102
16,888

18,670
3,520
15,150

16,389
2,923
13,466

12,046
4,301
7,745

10,999
4,099
6,900

10,999
4,099
6,900

10,398
3,275
7,123

8,019
3,234
4,785

entities (surplus, or deficit

(-))

6 Federal Financing Bank outlays
7 Other4

8

1982

U.S. budget plus off-budget,
including
Federal Financing Bank
Surplus, or deficit ( - )
Source or financing
Borrowing from the public
Cash and monetary assets (decrease, or
increase ( - )y
Other6
MEMO:

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

1. The Budget of the U.S. Government, Fiscal Year 1983, has reclassified supplemental medical insurance premiums and voluntary hospital insurance premiums,
previously included in other social insurance receipts, as offsetting receipts in the
health function.
2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was reclassified from an off-budget agency to an on-budget agency in the Department of
Labor.
3. Half-year figures are calculated as a residual (total surplus/deficit less trust
fund surplus/deficit).
4. Other off-budget includes Postal Service F u n d ; Rural Electrification and Telephone Revolving Fund; and Rural Telephone Bank; it also includes petroleum
acquisition and transportation and strategic petroleum reserve effective November
1981.

5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold
tranche drawing rights; loans to International Monetary F u n d ; and other cash and
monetary assets.
6. Includes accrued interest payable to the public; allocations of special drawing
rights; deposit funds; miscellaneous liability (including checks outstanding) a n a
asset accounts; seigniorage; increment on gold; net gain/loss for U.S. currency
valuation adjustment; net gain/loss for I M F valuation adjustment; and profit on
the sale of gold.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
G o v e r n m e n t , " Treasury Bulletin, and the Budget of the United States
Government,
Fiscal Year 1983.

N O T E S T O T A B L E 1.37
1. Holdings of stock of the Federal H o m e Loan Banks are included in "other
assets."
2. Includes net undistributed income, which is accrued by most, but not all,
associations.
3. Excludes figures for loans in process, which are shown as a liability.
4. The N A M S B reports that, effective April 1979, balance sheet data are not
strictly comparable with previous months. Beginning April 1979, data are reported
on a net-of-valuation-reserves basis. Before that date, data were reported on a
gross-of-valuation-reserves basis.
5. Beginning April 1979, includes obligations of U.S. government agencies. Before that date, this item was included in "Corporate and o t h e r . "
6. Includes securities of foreign governments and international organizations
and, before April 1979, nonguaranteed issues of U.S. government agencies.
7. Excludes checking, club, and school accounts.
8. Commitments outstanding (including loans in process) of banks in New York
State as reported to the Savings Banks Association of the state of New York.
9. Direct and guaranteed obligations. Excludes federal agency issues not guaranteed, which are shown in the table under "Business" securities.




10. Issues of foreign governments and their subdivisions and bonds of the International Bank for Reconstruction and Development.
NOTE. Savings and loan associations: Estimates by the F H L B B for all associations
in the United States. D a t a are based on monthly reports of federally insured
associations and annual reports of other associations. Even when revised, data for
current and preceding year are subject to further revision.
Mutual savings banks: Estimates of National Association of Mutual Savings
Banks for all savings banks in the United States.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. A d j u s t m e n t s for interest due and accrued and for differences between market and book values are not made on each item separately but'
are included, in total, in "other assets."
Credit unions: Estimates by the National Credit Union Administration for a
group of federal and state-chartered credit unions that account for about 30 percent
of credit union assets. Figures are preliminary and revised annually to incorporate
recent benchmark data.

Federal Finance
1.39

A31

U.S. B U D G E T RECEIPTS A N D OUTLAYS
Millions of dollars
Calendar year

Source or type

Fiscal
year
1979

Fiscal
year
1980

Fiscal
year
1981

1981

1982

HI

H2

HI

1982
June

July

Aug.

RECEIPTS

1 All sources 1

463,302

517,112

599,272

317,304

301,777

322,478

66,353

44,675

44,924

217,841
195,295
36
56,215
33,705

244,069
223,763
39
63,746
43,479

285,917
256,332
41
76,844
47,299

142,889
126,101
36
59,907
43,155

147,035
134,199
5
17,391
4,559

150,565
133,575
34
66,174
49,217

32,273
21,912
4
11,774
1,417

23,987
23,769
4
2,233
2,019

20,867
20,521
1
1,529
1,185

71,448
5,771

72,380
7,780

73,733
12,596

44,048
6,565

31,056
738

37,836
8,028

11,943
1,354

2,445
1,844

1,694
1,271

138,939

157,803

182,720

101,316

91,592

108,079

17,572

14,874

17,961

115,041

133,042

156,953

83,851

82,984

88,795

16,189

13,860

14,823

5,034
15,387
3,477

5,723
15,336
3,702

6,041
16,129
3,598

6,240
9,205
2,020

244
6,355
2,009

7,357
9,809
2,119

828
217
336

-649
1,292
370

0
2,743
396

18,745
7,439
5,411
9,252

24,329
7,174
6,389
12,748

40,839
8,083
6,787
13,790

21,945
3,926
3,259
6,487

22,097
4,661
3,742
8,441

17,525
4,310
4,208
7,984

2,768
771
745
1,634

2,774
773
624
1,042

2,828
747
681
1,418

18 All types 1 - 6

490,997

576,675

657,204

333,115

358,558

346,286

59,629

64,506

59,628

19
20
21
22
23
24

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

117,681
6,091
5,041
6,856
12,091
6,238

135,856
10,733
5,722
6,313
13,812
4,762

159,765
11,130
6,359
10,277
13,525
5,572

80,005
5,999
3,314
5,677
6,476
3,101

87,421
4,655
3,388
4,394
7,296
5,181

93,154
5,183
3,370
2,814
5,636
7,087

16,419
402
543
601
1,041
53

16,757
460
552
171
1,161
831

15,318
395
620
256
1,172
707

Commerce and housing credit
Transportation
Community and regional development —
Education, training, employment, social
services
29 Health 1
30 Income security 6

2,579
17,459
9,542

7,788
21,120
10,068

3,946
23,381
9,394

2,073
11,991
4,621

1,825
10,753
4,269

1,410
9,915
3,193

4
1,752
557

996
1,608
502

-385
1,836
675

29,685
46,962
160,159

30,767
55,220
193,100

31,402
65,982
225,099

15,928
33,113
113,490

13,878
35,322
129,269

12,595
37,213
112,782

1,997
6,772
20,812

1,838
6,275
22,385

2,408
6,356
20,346

19,928
4,153
4,093
8,372
52,566
-18,488

21,183
4,570
4,505
8,584
64,504
-21,933

22,988
4,698
4,614
6,856
82,537
-30,320

10,531
2,344
2,692
3,015
41,178
-12,432

12,880
2,290
2,311
3,043
47,667
-17,281

10,865
2,334
2,410
3,325
50,070
-14,680

1,927
353
393
204
13,787
-7,989

3,099
376
207
1,165
7,158
-1,036

997
427
630
38
8,871
-1,038

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

Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 5
OUTLAYS

25
26
27
28

31
32
33
34
35
36

Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Interest
Undistributed offsetting receipts 7

1. T h e Budget of the U.S. Government, Fiscal Year 1983 has reclassified supplemental medical insurance premiums and voluntary hospital insurance premiums,
previously included in other social insurance receipts, as offsetting receipts in the
health function.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.




5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
6. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was reclassified from an off-budget agency to an on-budget agency in the D e p a r t m e n t of
Labor.
7. Consists of interest received by trust funds, rents and royalties on the outer
continental shelf, and U.S. government contributions for employee retirement.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" and the Budget of the U.S. Government, Fiscal Year 1983.

A32
1.40

Domestic Financial Statistics • October 1982
F E D E R A L D E B T SUBJECT TO S T A T U T O R Y LIMITATION
Billions of dollars
1980

1982

1981

Item
June 30

Sept. 30

Dec. 31

Mar. 31

June 30

Sept. 30

Dec. 31

Mar. 31

June 30

1 Federal debt outstanding

884.4

914.3

936.7

970.9

977.4

1,003.9

1,034.7

1,066.4

1,084.7

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

877.6
682.7
194.9

907.7
710.0
197.7

930.2
737.7
192.5

964.5
773.7
190.9

971.2
771.3
199.9

997.9
789.8
208.1

1,028.7
825.5
203.2

1,061.3
858.9
202.4

1,079.6
867.9
211.7

6.8
5.3
1.5

6.6
5.1
1.5

6.5
5.0
1.5

6.4
4.9
1.5

6.2
4.7
1.5

6.1
4.6
1.5

6.0
4.6
1.4

5.1
3.9
1.2

5.0
3.9
1.1

5 Agency securities
Held by public
6
7
Held by agencies

878.7

908.7

931.2

965.5

972.2

998.8

1,029.7

1,062.2

1,080.5

9 Public debt securities
10 Other debt 1

877.0
1.7

907.1
1.6

929.6
1.6

963.9
1.6

970.6
1.6

997.2
1.6

1,028.1
1.6

1,060.7
1.5

1,079.0
1.5

11 MEMO: Statutory debt limit

925.0

925.0

935.1

985.0

985.0

999.8

1,079.8

1,079.8

1,143.1

8 Debt subject to statutory limit

1. Includes guaranteed debt of government agencies, specified participation certificates, notes to international lending organizations, and District of Columbia
stadium bonds.

1.41

GROSS PUBLIC D E B T OF U.S. T R E A S U R Y

NOTE. Data from Treasury Bulletin (U.S. Treasury D e p a r t m e n t ) ,

Types and Ownership

Billions of dollars, end of period
1982
Type and holder

1978

1979

1980

1981
May

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

By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues 3
Government
Public
Savings bonds and notes
Government account series 4

June

Sept.

845.1

930.2

1,028.7

1,071.7

1,079.6

1,089.6

1,109.2

1,142.0

782.4
487.5
161.7
265.8
60.0
294.8
2.2
24.3
29.6
28.0
1.6
80.9
157.5

844.0
530.7
172.6
283.4
74.7
313.2
2.2
24.6
28.8
23.6
5.3
79.9
177.5

928.9
623.2
216.1
321.6
85.4
305.7

1,027.3
720.3
245.0
375.3
99.9
307.0

1,066.4
755.7
256.1
398.4
101.2
310.7

1,078.4
764.0
256.0
406.9
101.1
314.4

1,083.3
774.1
262.0
411.1
101.0
309.2

1,108.1
801.4
273.1
427.4
100.9
306.7

1,140.9
824.4
277.9

23.8
24.0
17.6
6.4
72.5
185.1

23.0
19.0
14.9
4.1
68.1
196.7

23.4
18.4
14.8
3.6
67.3
201.3

23.4
17.5
13.8
3.6
67.4
206.0

23.4
16.6
13.6
3.1
67.4
201.5

23.5
15.6
12.5
3.1
67.4
119.9

23.6
14.7
12.2
2.4
67.5
210.5

5.3

1.2

1.1

1.1

1.2

6.8

1.2

1.3

1.4

16
17
18
19
20
21
22
23

170.0
109.6
508.6
93.2
5.0
15.7
19.6
64.4

187.1
117.5
540.5
96.4
4.7
16.7
22.9
69.9

192.5
121.3
616.4
116.0
5.4
20.1
25.7
78.8

203.3
131.0
694.5
109.4
5.2
19.1
37.8
85.6

206.7
129.4
735.2
109.4
5.7
21.5 r
38.8
91.8

211.7
127.0
740.9
117.0
5.7
22.2
38.9
91.2

24
25
26
27

Individuals
Savings bonds
Other securities
Foreign and international 6
Other miscellaneous investors 7

80.7
30.3
137.8
58.9

79.9
36.2
124.4
90.1

72.5
56.7
127.7
106.9

68.0
75.6
141.4
152.3

67.4
78.8
138.9
182.9

67.4
78.8
141.9
177.8

1. Includes (not shown separately): Securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. These nonmarketable bonds, also known as Investment Series B Bonds, may
be exchanged (or converted) at the owner's option for l'/2 percent, 5-year marketable Treasury notes. Convertible bonds that have been so exchanged are removed from this category and recorded in the notes category (line 5).
3. Nonmarketable dollar-denominated and foreign currency-denominated series
held by foreigners.
4. Held almost entirely by U.S. government agencies and trust funds.




Aug.

789.2

By holder5
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Mutual savings banks
Insurance companies
Other companies
State and local governments

15 Non-interest-bearing debt

July

n a.

n a.

103.6
316.4

n a.

5. D a t a for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.
6. Consists of investments of foreign balances and international accounts in the
United States.
7. Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers, certain government deposit accounts, and
government sponsored agencies.
NOTE. Gross public debt excludes guaranteed agency securities.
D a t a by type of security from Monthly Statement of the Public Debt of the United
States (U.S. Treasury Department); data by holder from Treasury
Bulletin.

Federal Finance
1.42

U.S. G O V E R N M E N T M A R K E T A B L E SECURITIES

A33

Ownership, by maturity

Par value; millions of dollars, end of period
1982

1982
Type of holder

1980

1980

1981
June

1981

July

June

July

1 to 5 years

All maturities

1 All holders

623,186

720,293

763,995

774,077

197,409

228,550

249,021

245,985

2 U.S. government agencies and trust funds
3 Federal Reserve Banks

9,564
121,328

8,669
130,954

7,994
127,005

7,988
131,533

1,990
35,835

1,906
38,223

1,775
37,484

1,770
37,834

492,294
77,868
3,917
11,930
7,758
4,225
21,058
365,539

580,671
74,618
3,971
12,090
4,214
4,1227
18,991
462,663

628,997
82,431
4,415
13,453
3,710
5,062
22,631
497,294

634,556
74,707
4,335
13,708
3,497
4,896
21,703
511,711

159,585
44,482
1,925
4,504
2,203
2,289
4,595
99,577

188,422
39,021
1,870
5,596
1,146
2,260
4,278
134,251

209,762
41,479
2,063
6,342
929
2,852
4,696
151,401

206,381
38,662
2,010
6,265
803
2,733
4,552
151,355

4 Private investors
5
Commercial banks
6
Mutual savings banks
7
Insurance companies
8
Nonfinancial corporations
9
Savings and loan associations
10
State and local governments
11
All others

Total, within 1 year

12 All holders
13 U.S. government agencies and trust funds
14 Federal Reserve Banks
15 Private investors
16
Commercial banks
17
Mutual savings banks
18
Insurance companies
19
Nonfinancial corporations
20
Savings and loan associations
21
State and local governments
22
All others

5 to 10 years

297,385

340,082

355,611

361,264

56,037

63,483

67,108

74,631

830
56,858

647
64,113

144
62,202

145
65,986

1,404
13,548

779
11,854

779
10,559

779
10,830

239,697
25,197
1,246
1,940
4,281
1,646
7,750
197,636

275,322
29,480
1,569
2,201
2,421
1,731
7,536
230,383

293,264
33,944
1,794
2,244
1,694
1,927
7,622
244,040

295,116
29,877
1,794
2,402
1,582
1,784
6,289
251,388

41,175
5,793
455
3,037
357
216
2,030
29,287

50,851
4,496
238
2,507
344
98
2,365
40,804

55,770
3,978
220
2,682
277
141
2,606
45,867

63,022
3,161
199
2,879
280
255
2,885
53,363

10 to 20 years

Bills, within 1 year
23 AH holders
24 U.S. government agencies and trust funds
25 Federal Reserve Banks
26 Private investors
27
Commercial banks
28
Mutual savings banks
29
Insurance companies
30
Nonfinancial corporations
31
Savings and loan associations
32
State and local governments
33
All others

216,104

245,015
»

256,007

262,009

1
43,971

49,679

1
47,921

2
52,358

172,132
9,856
394
672
2,363
818
5,413
152,616

195,335
9,667
423
760
1,173
363
5,126
177,824

208,085
13,556
586
762
998
760
4,789
186,634

209,650
10,062
604
925
1,010
681
3,746
192,622

44,744

46,246

46,205

3,686
5,919

3,996
6,692

3,952
6,642

3,952
6,669

27,250
1,071
181
1,718
431
52
3,597
20,200

34,055
873
151
1,119
131
16
2,824
28,940

35,651
1,351
182
1,367
481
29
4,814
27,428

35,583
1,336
181
1,361
511
29
4,858
27,208

36,854

Over 20 years

Other, within 1 year
34 All holders

81,281

95,068

99,604

99,237

35,500

43,434

46,010

46,010

35 U.S. government agencies and trust funds
36 Federal Reserve Banks

829
12,888

647
14,433

143
14,281

143
13,627

1,656
9,258

1,340
10,073

1,343
10,118

1,343
10,214

37 Private investors
38
Commercial banks
39
Mutual savings banks
40
Insurance companies
41
Nonfinancial corporations
42
Savings and loan associations
43
State and local governments
44
All others

67,565
15,341
852
1,268
1,918
828
2,337
45,020

79,987
19,814
1,146
1,442
1,248
1,368
2,410
52,560

85,180
20,388
1,208
1,481
696
1,167
2,833
57,406

85,467
19,815
1,190
1,476
573
1,103
2,542
58,767

24,587
1,325
110
730
476
21
3,086
18,838

32,020
749
144
666
172
17
1,988
28,285

34,549
1,679
156
819
329
114
2,893
28,559

34,453
1,670
151
801
321
96
3,019
28,397

NOTE. Direct public issues only. Based on Treasury Survey of Ownership from
Treasury Bulletin (U.S. Treasury Department).
D a t a complete for U.S. government agencies and trust funds and Federal Reserve
Banks, but data for other groups include only holdings of those institutions that
report. T h e following figures show, for each category, the number and proportion
reporting as of July 31,1982: (1) 5,279 commercial banks, 439 mutual savings banks.




and 726 insurance companies, each about 80 percent; (2) 405 nonfinancial corporations and 457 savings and loan associations, each about 50 percent; and (3)
488 state and local governments, about 40 percent.
"All others," a residual, includes holdings of all those not reporting in the
Treasury Survey, including investor groups not listed separately.

A34
1.43

DomesticNonfinancialStatistics • October 1982
U.S. G O V E R N M E N T SECURITIES D E A L E R S
Par value; averages of daily figures, in millions of dollars

Transactions

1982
Item

1979

1980

1982, week ending Wednesday

1981
June

July

Aug.

Aug. 25

Sept. 1

Sept. 8

Sept. 15

Sept. 22

1

Immediate delivery 1
U.S. government securities

13,183

18,331

24,728

27,136

33,328

41,041

40,165

37,643

36,644

33,605

42,358

2
3
4
5
6

By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years

7,915
454
2,417
1,121
1,276

11,413
421
3,330
1,464
1,704

14,768
621
4,360
2,451
2,528

16,831
646
4,438
2,821
2,400

20,675
1,011
5,899
3,558
2,186

23,655
1,094
8,784
4,186
3,323

24,169
1.037
8,175
3,426
3.359

20,155
867
8,854
4,928
2,838

24,297
894
5,058
3,909
2,486

20,343
1,379
5,144
3,952
2,788

22,374
1,323
11,233
3,905
3,523

/
8
9
10
11
12
13
14
15
16
17
18

By type of customer
U . S . government securities
dealers
U.S. government securities
brokers
All others 2
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures transactions 3
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions 4
U.S. government securities
Federal agency securities

1,448

1,484

1,640

1,693

2,095

1,997

2,293

1,765

2,127

1,712

1,970

5,170
6,564
2,723
1,764

7,610
9,237
3,258
2,472

11,750
11,337
3,306
4,477
1,807
6,128

13,061
12,382
3,237
5,518
2,250
8,131

16,106
15,127
4,011
6,068
2,915
7,308

19,616
19,429
5,000
5,391
2,781
7,686

19,327
18.545
5,778
5,662
2,399
7,754

17,139
18,739
4,336
3,893
2,267
7,460

16,732
17,785
3,722
3,983
2,415
7,709

15,661
16,232
4,274
4,479
2,356
7,966

19,210
21,179
4,958
4,801
2,317
7,703

3,523
1,330
234

4,629
1,215
267

4,969
1,033
285

6,404
1,573
331

6,564
1,455
348

5,798
1,593
294

4,934
1,688
262

6,856
1,432
263

6,382
3,357
311

365
1,370

692
537

482
610

743
787

437
856

554
720

594
721

1,014
1,221

1,323
1,107

T
1
n.a.

n.a.

1

\

1. Before 1981, data for immediate transactions include forward transactions.
2. Includes, among others, all other dealers and brokers in commodities and
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
3. Futures contracts are standardized agreements arranged on an organized exchange in which parties commit to purchase or sell securities for delivery at a future
date.
4. Forward transactions are agreements arranged in the over-the-counter market
in which securities are purchased (sold) for cdelivery after 5 business days f r o m the

1.44

U.S. G O V E R N M E N T SECURITIES D E A L E R S

date of the transaction for government securities (Treasury bills, notes, and bonds)
or after 30 days for mortgage-backed agency issues.
NOTE. Averages for transactions are based on number of trading days in the
period.
Transactions are market purchases and sales of U.S. government securities dealers reporting to the Federal Reserve Bank of New York. The figures exclude
allotments of, and exchanges for, new U.S. government securities, redemptions of
called or matured securities, purchases or sales of securities under repurchase
agreement, reverse repurchase (resale), or similar contracts.

Positions and Financing

Averages of daily figures, in millions of dollars
1982
1979

1980

1982, week ending Wednesday

1981
June

July

Aug.

Aug. 4

Aug. 11

Aug. 18

Aug. 25

Sept. 1

Positions

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Net immediate 1
U.S. government securities
Bills
Other within 1 year
1 - 5 years
5-10 years
Over 10 years
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities
Forward positions
U.S. government securities
Federal agency securities

3,223
3,813
-325
-455
160
30
1,471
2,794
i
t
1
n.a.
I

\

4,306
4.103
-1,062
434
166
665
797
3,115
1
t
1
n.a.
1
1

1

9,033
6,485
-1,526
1,488
292
2,294
2,277
3,435
1,746
2,658

11,075
7,284
-462
2,206
-254
2,301
2,976
5,580
2,666
3,503

9,161
7,163
-2,027
2,552
-417
1,890
2,878
7,728
3,023
3,779

4,893
1,265
-632
2,269
-248
1,880
3,578
7,834
3,207
3,658

7,258
3,510
-506
3,075
-827
2,005
3,522
8,529
3,668
4,015

8,928
4,672
-527
3,092
-264
1,955
3,460
7,904
3,343
3,542

6,432
2,393
-688
2,692
-73
2,108
3,769
8,382
3,394
3,502

1,578
-1,493
-747
2,043
-38
1,813
3,599
7,850
2,909
3,791

418
-2,426
-655
2,005
-25
1,517
3,454
6,539
2,988
3,448

-8,934
-2,733
522

-6,067
-2,045
73

-1,542
-2,878
295

6,185
-2,915
-11

4,069
-3,103
341

4,448
-3,406
236

6,540
-3,628
270

7,944
-2,332
-405

7,512
-1,862
-438

-603
-451

-760
-1,452

-444
-1,227

-612
-1,241

-376
-1,132

-228
-1,187

-676
-1,148

-860
-1,396

-1,204
-1,320

Financing 2
Reverse repurchase agreements 3
Overnight and continuing
Term agreements
Repurchase agreements 4
18
Overnight and continuing
19
Term agreements
16
17

For notes see opposite page.




f

f

1
n.a.
1

1
n.a.

1 1

14,568
32,048

25,655
39,795

27,391
44,136

29,374
50,497

26,411
53,984

29,554
47,881

30,204
49,642

31,327
50,482

32,046
49,411

35,919
29,449

42,038
35,525

54,660
37,821

50,318
48,692

53,397
46,621

51,382
47,753

49,094
48,854

47,399
51,538

47,107
50,409

Federal Finance
1.45

A35

F E D E R A L A N D F E D E R A L L Y S P O N S O R E D C R E D I T A G E N C I E S Debt Outstanding
Millions of dollars, end of period
1982

1981
Agency

1 Federal and federally sponsored agencies 1
2 Federal agencies
3
Defense Department 2
4
Export-Import Bank 3 ' 4
5
Federal Housing Administration 5
6
Government National Mortgage Association
participation certificates 6
7
Postal Service 7
8
Tennessee Valley Authority
9
United States Railway Association 7
10 Federally sponsored agencies 1
11 Federal H o m e Loan Banks
12 Federal H o m e Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Federal Land Banks
15 Federal Intermediate Credit Banks
16 Banks for Cooperatives
17 Farm Credit Banks 1
18 Student Loan Marketing Association 8
19 Other

1978

1979

1980
Dec.

Jan.

Feb.

Mar.

Apr.

May

June

137,063

163,290

193,229

227,210

226,418

226,539

228,749

232,274

234,593

238,787

23,488
968
8,711
588

24,715
738
9,191
537

28,606
610
11,250
477

31,806
484
13,339
413

31,053
470
13,135
406

30,806
460
12,861
397

31.408
454
13,421
382

31,613
447
13,475
376

31,551
434
13,416
363

32,274
419
13,939
358

3,141
2,364
7,460
356

2,979
1,837
8,997
436

2,817
1,770
11,190
492

2,715
1,538
13,115
202

2,191
1,538
13,115
198

2,165
1,538
13,187
198

2,165
1,538
13,250
198

2,165
1,538
13,410
202

2,165
1,471
13,500
202

2,165
1,471
13,715
207

113,575
27,563
2,262
41,080
20,360
11,469
4,843
5,081
915
2

138,575
33,330
2,771
48,486
16,006
2,676
584
33,216
1,505
1

164,623
41,258
2,536
55,185
12,365
1,821
584
48,153
2,720
1

195,404
58,090
2,604
58,749
9,717
1,388
220
60,034
4,600
2

195,365
57,387
2,604
58,860
8,717
1,388
220
61,187
5,000
2

195,733
57,743
2,604
59,018
8,717
1,388
220
61,041
5,000
2

197,341
58,839
2,500
59,270
8,717
1,388
220
61,405
5,000
2

200,661
59,937
2,500
60,478
8,217
926
220
63,381
5,000
2

203,042
60,772
2,500
61,996
8,217
926
220
63,409
5,000
2

206,513
61,883
3,099
62,660
8,217
926
220
64,506
5,000
2

51,298

67,383

87,460

110,698

111,965

112,367

113,567

114,961

117,475

120,241

6,898
2,114
915
5,635
356

8,353
1,587
1,505
7,272
436

10,654
1,520
2,720
9,465
492

12,741
1,288
4,600
11,390
202

12,741
1,288
5,000
11,435
198

12,741
1,288
5,000
11,462
198

13,305
1,288
5,000
11,525
198

13,305
1,288
5,000
11,685
202

13,305
1,221
5,000
11,775
202

13,829
1,221
5,000
11,990
207

23,825
4,604
6,951

32,050
6,484
9,696

39,431
9,196
13,982

48,821
13,516
18,140

49,026
13,836
18,441

49,081
13,989
18,608

48,681
14,452
19,118

49,356
14,716
19,409

51,056
15,046
19,870

52,346
15,454
20,194

MEMO:

20 Federal Financing Bank debt 1 ' 9
Lending
21
22
23
24
25

to federal and federally

sponsored

Export-Import Bank 4
Postal Service 7
Student Loan Marketing Association 8
Tennessee Valley Authority
United States Railway Association 7

Other
Lending10
26 Farmers H o m e Administration
27 Rural Electrification Administration
28 Other

1. In September 1977 the Farm Credit Banks issued their first consolidated bonds,
and in January 1979 they began issuing these bonds on a regular basis to replace
the financing activities of the Federal Land Banks, the Federal Intermediate Credit
Banks, and the Banks for Cooperatives. Line 17 represents those consolidated
bonds outstanding, as well as any discount notes that have been issued. Lines 1
and 10 reflect the addition of this item.
2. Consists of mortgages assumed by the Defense Department between 1957 and
1963 under family housing and homeowners assistance programs.
3. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
5. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the securities market.
6. Certificates of participation issued prior to fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers H o m e Administration; D e p a r t m e n t of Health, Education, and Welfare; Department

N O T E S T O T A B L E 1.44
1. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on
a commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). T h e maturities of some repurchase agreements are sufficiently long, however, to suggest that the securities
involved are not available for trading purposes. Securities owned, and hence dealer
positions, do not include securities to resell (reverse RPs). Before 1981, data for
immediate positions include forward positions.
2. Figures cover financing involving U.S. government and federal agency securities, negotiable C D s , bankers acceptances, and commercial paper.




of Housing and Urban Development; Small Business Administration; and the
Veterans Administration.
7. Off-budget.
8. Unlike other federally sponsored agencies, the Student Loan Marketing Association may borrow from the Federal Financing Bank (FFB) since its obligations
are guaranteed by the Department of Health, Education, and Welfare.
9. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since FFB incurs
debt solely for the purpose of lending to other agencies, its debt is not included in
the main portion of the table in order to avoid double counting.
10. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any particular agency being generally small. The Farmers H o m e Administration item consists
exclusively of agency assets, while the Rural Electrification Administration entry
contains both agency assets and guaranteed loans.

3. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities obtained
have been used as collateral on borrowings, i.e., matched agreements.
4. Includes both repurchase agreements undertaken to finance positions and
"matched b o o k " repurchase agreements.
NOTE. D a t a for positions are averages of daily figures, in terms of par value,
based on the number of trading days in the period. Positions are shown net and
are on a commitment basis. D a t a for financing are based on Wednesday figures,
in terms of actual money borrowed or lent.

A36
1.46

DomesticNonfinancialStatistics • October 1982
N E W SECURITY ISSUES of State and Local Governments
Millions of dollars
1982

Type of issue or issuer.
1979

1980

1981
Jan/

1 All issues, new and refunding 1

Feb.

Mar.r

Apr.'

Mayr

Juner

July

43,365

48,367

47,732

3,911

3,720

5,661

6,708

5,619

5,813

5,823

12,109
53
31,256
67

14,100
38
34,267
57

12,394
34
35,338
55

1,038
2
2,873
4

1,054
0
2,666
6

1,733
9
3,928
5

2,222
10
4,486
32

1,506
10
4,113
38

1,811
16
4,002
45

967
22
4,856
49

Type of issuer
6 State
7 Special district and statutory authority
8 Municipalities, counties, townships, school districts

4,314
23,434
15,617

5,304
26,972
16,090

5,288
27,499
14,945

514
2,135
1,262

234
2,187
1,299

432
2,993
2,236

1,061
3,880
1,767

601
2,975
2,043

1,074
2,899
1,840

257
3,987
1,579

9 Issues for new capital, total

41,505

46,736

46,530

3,754

3,679

4,798

6,682

5,489

5,723

5,637

Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes

5,130
2,441
8,594
15,968
3,836
5,536

4.572
2.621
8,149
19,958
3,974
7,462

4,547
3,447
10,037
12,729
7,651
8,119

236
144
1,189
927
468
790

266
207
1,284
837
501
584

405
363
754
1,773
636
867

460
284
1,333
2,339
667
1,599

483
292
1,363
2,026
350
975

724
300
830
2,292
397
1,180

288
117
1,269
3,033
493
437

2
3
4
5

10
11
12
13
14
15

Type of issue
General obligation
U.S. government loans 2
Revenue
U.S. government loans 2

1. Par amounts of long-term issues based on date of sale.
2. Consists of tax-exempt issues guaranteed by the Farmers Home Administration.

1.47

SOURCE. Public Securities Association.

N E W S E C U R I T Y ISSUES of Corporations
Millions of dollars
Type of issue or issuer,
or use

1982
1979

1980

1981
Jan.

1 All issues

1

Feb.

Mar.

Apr.r

Mayr

June

July

51,533

73,694

69,283

2,954

3,294

6,436

4,622

6,675

4,030

5,264

2 Bonds

40,208

53,206

44,643

1,278

1,879

4,512

2,575

4,420

2,836

3,337

Type of offering
3 Public
4 Private placement

25,814
14,394

41,587
11,619

37,653
6,989

614
664

1,464
415

3,540
972

2,100
475

3.973
447

2,398
438

2,868
469

9,678
3,948
3,119
8,153
4,219
11,094

15,409
6,693
3,329
9,557
6,683
11,534

12,325
5,229
2,054
8,963
4,280
11,793

283
230
43
493
8
221

262
59
3
345
364
845

708
691
224
1,568
84
1,236

497
139
26
888
16
1,010

608
490
74
1.186
315
1,748

211
329
79
699
174
1.344

1,290
492
40
536
75
905

11,325

20,489

24,642

1,676

1,415

1,924

2,047

2,255

1,194

1,927

3,574
7,751

3,631
16,858

1,796
22,846

199
1,477

185
1,230

199
1,725

172
1,875

888
1,367

67
1,127

645
1,282

1,679
2,623
255
5,171
303
1,293

4,839
5,245
549
6,230
567
3,059

4,838
7,436
735
5,486
1,778
4,371

129
723
25
449
58
292

67
426
73
743
2
104

394
653
27
547
3
301

102
770
15
756
3
401

162
569
35
401
30
1,058

53
339
52
242
8
499

105
615
5
267
96
839

5
6
7
8
9
10

Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

11 Stocks
Type
12 Preferred
13 Common
14
15
16
17
18
19

Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial

1. Figures, which represent gross proceeds of issues maturing in more than one
year, sold for cash in the United States, are principal amount or number of units
multiplied by offering price. Excludes offerings of less than $100,000, secondary
offerings, undefined or exempted issues as defined in the Securities Act of




1933, employee stock plans, investment companies other than closed-end, intracorporate transactions, and sales to foreigners.
SOURCE. Securities and Exchange Commission.

Corporate Finance
1.48

O P E N - E N D I N V E S T M E N T COMPANIES
Millions of dollars

A37

Net Sales and Asset Position

1982
Item

1980

1981
Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

INVESTMENT C O M P A N I E S 1

1
2
3

Sales of own shares 2
Redemptions of own shares 3
Net sales

15,266
12,012
3,254

20,596
15,866
4,730

2,049
1,475
1,557

2,049
1,456
593

3,325
2,056
1,269

2,754
2,293
461

2,345
1,854
491

3,061
2,038
1,023

3,304
2,145
1,159

4,322
2,336
1,986

4
5
6

Assets 4
Cash position 5
Other

58,400
5,321
53,079

55,207
5,277
49,930

54,347
5,424
48,923

52,695
5,540
47,155

53,001
5,752
47,249

56,026
6,083
49,943

54,889
5,992
48,896

54,238
6,298
47,940

54,592
5,992
48,600

62,214
6,042
56,172

5. Also includes all U.S. government securities and other short-term debt securities.

1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment
of capital gains distributions and share issue of conversions from one fund to another
in the same group.
3. Excludes share redemption resulting f r o m conversions from one fund to another in the same group.
4. Market value at end of period, less current liabilities.

1.49

NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.

C O R P O R A T E PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1980
Account

1979

1980

Q4
1
3
4
5
6

Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits

7
8

Inventory valuation
Capital consumption adjustment

1

1982

Q1

Q2

Q3

Q4

Q1

Q2

194.8
252.7
87.6
165.1
52.7
112.4

181.6
242.4
84.6
157.8
58.1
99.7

190.6
232.1
81.2
150.9
65.1
85.8

181.2
245.9
87.8
158.1
59.6
98.5

200.3
253.1
91.5
161.6
61.5
100.1

185.1
225.4
79.2
146.2
64.0
82.2

193.1
233.3
82.4
150.9
66.8
84.1

183.9
216.5
71.6
144.9
68.1
76.8

157.1
171.6
56.7
114.9
68.8
46.1

155.4
171.7
55.3
116.4
69.3
47.1

-43.1
-14.8

-43.0
-17.8

-24.6
-16.8

-45.5
-19.2

-35.5
-17.3

-22.8
-17.5

-23.0
-17.1

-17.1
-15.5

-4.4
-10.1

-9.4
-6.9

SOURCE. Survey of Current Business (U.S. Department of Commerce).




1981

1981

A38
1.50

DomesticNonfinancialStatistics • October 1982
NONFINANCIAL CORPORATIONS

Current Assets and Liabilities

Billions of dollars, except for ratio
1981

Account

1976

1977

1978

1979

1982

1980
Q1

Q2

Q4

Q3

Q1

1

Current assets

827.4

912.7

1,043.7

1,218.2

1,336.1

1,374.6

1,385.9

1,405.7

1,419.3

1,413.2

2
3
4
5
6

Cash
U.S. government securities
Notes and accounts receivable
Inventories
Other

88.2
23.5
292.9
342.5
80.3

97.2
18.2
330.3
376.9
90.1

105.5
17.3
388.0
431.6
101.3

118.0
17.0
461.1
505.5
116.7

127.3
19.9
509.0
540.2
139.6

126.9
19.8
524.2
555.4
148.4

126.7
20.5
528.3
559.3
151.0

125.7
18.6
535.4
569.8
156.3

132.1
18.6
527.9
578.5
162.2

122.0
17.6
526.0
584.4
163.1

7

Current liabilities

495.1

557.1

669.3

807.8

886.8

916.1

921.6

954.1

964.1

966.3

8
9

Notes and accounts payable
Other

282.1
213.0

317.6
239.6

382.9
286.4

461.2
346.6

508.3
378.5

510.3
405.8

513.1
408.4

533.6
420.5

544.2
419.9

533.4
432.8

10

Net working capital

332.4

355.5

374.4

410.5

449.3

458.5

464.3

451.7

455.1

446.9

11

MEMO: Current ratio

1.671

1.638

1.559

1.508

1.507

1.500

1.504

1.473

1.472

1.463

1

1. Ratio of total current assets to total current liabilities.

All data in this table reflect the most current benchmarks. Complete data are
available upon request from the Flow of Funds Section, Division of Research and
Statistics.

NOTE. For a description of this series, see "Working Capital of Nonfinancial
Corporations" in the July 1978 BULLETIN, pp. 533-37.

SOURCE. Federal Trade Commission.

1.51

T O T A L N O N F A R M BUSINESS E X P E N D I T U R E S on New Plant and Equipment
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1981

Industry 1

1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Trade and services
11 Communication and other 2

1980

1981

Q2

Q3

Q4

Q1

Q2

Q3

1

Q41

295.63

321.49

323.66

316.73

328.25

327.83

327.72

323.22

320.24

324.47

58.91
56.90

61.84
64.95

59.50
64.74

63.10
62.40

62.58
67.53

60.78
66.14

60.84
67.48

59.03
64.74

59.98
63.10

58.80
64.09

13.51

16.86

16.48

16.80

17.55

16.81

17.60

16.56

15.66

16.02

4.25
4.01
3.82

4.24
3.81
4.00

4.51
3.86
3.95

4.38
3.29
4.04

4.18
3.34
4.09

4.18
4.82
4.12

4.56
3.20
4.23

4.73
3.54
4.06

4.10
3.79
3.50

4.64
4.85
4.07

28.12
7.32
81.79
36.99

29.74
8.65
86.33
41.06

32.29
8.61
87.40
42.33

29.32
8.53
85.88
39.02

30.54
9.01
87.55
41.89

31.14
8.60
88.33
42.92

30.95
9.17
87.80
41.89

32.26
9.14
88.85
40.33

32.67
7.87
86.71
42.85

33.15
8.50
86.07
44.09

1. Anticipated by business.
2. " O t h e r " consists of construction; social services and membership organizations; and forestry, fisheries, and agricultural services.




1982

19821

SOURCE. Survey of Current Business (U.S. Dept. of Commerce).

Corporate Finance
1.52

DOMESTIC F I N A N C E COMPANIES
Billions of dollars, end of period

Assets and Liabilities

1982

1981

Account

A39

1978

1977

1979

1980
Q1

Q2

Q4

Q3

Q1

Q2

ASSETS

1
2
3
4
5
6
7
8

Accounts receivable, gross
Consumer
Business
Total
LESS: Reserves for unearned income and losses . . . .
Accounts receivable, net
Cash and bank deposits
Securities
All other

9

Total assets

44.0
55.2
99.2
12.7
86.5
2.6
.9
14.3

52.6
63.3
116.0
15.6
100.4
3.5
1.3
17.3

65.7
70.3
136.0
20.0
116.0

73.6
72.3
145.9
23.3
122.6

76.1
72.7
148.7
24.3
124.5

79.0
78.2
157.2
25.7
131.4

84.5
76.9
161.3
27.7
133.6

85.5
80.6
166.1
28.9
137.2

85.1
80.9
166.0
29.1
136.9

88.0
82.6
170.6
30.2
140.4

24.91

27.5

30.8

31.6

34.5

34.2

35.0

37.3

104.3

122.4

140.9

150.1

155.3

163.0

168.1

171.4

171.9

177.8

5.9
29.6

6.5
34.5

8.5
43.3

13.2
43.4

13.1
44.2

14.4
49.0

14.7
51.2

15.4
51.2

15.4
46.2

14.5
50.3

6.2
36.0
11.5

8.1
43.6
12.6

8.2
46.7
14.2

7.5
52.4
14.3

8.2
51.6
17.3

8.5
52.6
17.0

11.9
50.7
17.1

9.6
54.8
17.8

9.0
59.0
19.0

9.3
60.3
18.9

>

J

LIABILITIES
10
11

Bank loans
Commercial paper
Short-term, n.e.c
Long-term, n.e.c
Other

12
13
14
15

Capital, surplus, and undivided profits

16

Total liabilities and capital

15.1

17.2

19.9

19.4

20.9

21.5

22.4

22.8

23.3

24.5

104.3

122.4

140.9

150.1

155.3

163.0

168.1

171.4

171.9

177.8

1. Beginning Q 1 1979, asset items on lines 6, 7, and 8 are combined.
NOTE. Components may not add to totals due to rounding.

1.53

D O M E S T I C F I N A N C E COMPANIES Business Credit
Millions of dollars, seasonally adjusted except as noted

Type

Accounts
receivable
outstanding
July 31,
19821

Changes in accounts
receivable

Extensions

Repayments

1982

1982

1982

May

June

July

May

June

July

May

June

July

1 Total

82,649

50

1,064

868

20,033

21,355

20,284

19,983

20,271

19,416

2
3
4
5

12,303
13,762
27,820

362
-199
-74

149
1,020
-184

-118
1,035
-11

1,235
5,269
1,503

1,056
6,364
1,331

802
5,878
1,365

873
5,468
1,577

907
5,344
1,515

920
4,843
1,376

9,329
19,433

171
-210

-111
190

85
-123

10,151
1,875

10,611
1,973

10,571
1,668

9,980
2,085

10,722
1,783

10,486
1,791

Retail automotive (commercial vehicles)
Wholesale automotive
Retail paper on business, industrial, and farm e q u i p m e n t . . . .
Loans on commercial accounts receivable and factored commercial accounts receivable
6 All other business credit
1. Not seasonally adjusted.




A40
1.54

DomesticNonfinancialStatistics • October 1982
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1982
Item

1979

1980

1981
Feb.

Mar.

Apr.

May

June

July

Aug.

Terms and yields in primary and secondary markets

PRIMARY M A R K E T S

1
2
3
4
5
.6

Conventional mortgages on new homes
Terms1
Purchase price (thousands of dollars)
A m o u n t of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2
Contract rate (percent per annum)

Yield (percent per
7 F H L B B series 5
8 H U D series 4

74.4
53.3
73.9
28.5
1.66
10.48

83.4
59.2
73.2
28.2
2.09
12.25

90.4
65.3
74.8
27.7
2.67
14.16

97.3
71.1
76.5
28.1
3.01
14.44

90.0
65.4
75.7
27.4
2.90
14.93

95.7
70.4
77.2
28.6
3.28
15.13

86.4
64.8
77.4
25.9
3.16
15.11

89.4
66.2
77.0
27.4
3.00
14.74

98.4r
73.1'
77.3
28.4 r
3.15 r
15.01 r

91.4
66.5
74.1
26.4
2.87
15.05

10.77
11.15

12.65
13.95

14.74
16.52

15.12
17.20

15.67
16.80

15.84
16.65

15.89
16.50

15.40
16.75

15.70 r
16.50

15.68
15.40

10.92
10.22

13.44
12.55

16.29
15.29

17.10
16.21

16.41
15.54

16.31
15.40

16.19
15.30

16.73
15.84

16.29
15.56

14.61
14.74

11.17
11.77

14.11
14.43

16.70
16.64

18.00
17.91

17.29
17.09

16.66

16.27
16.33

16.22
16.73

16.85

15 78
15.78

annum)

SECONDARY MARKETS

Yield (percent per annum)
9 F H A mortgages ( H U D series) 5
10 G N M A securities 6
F N M A auctions 7
12

Conventional loans

Activity in secondary markets
FEDERAL NATIONAL M O R T G A G E ASSOCIATION

Mortgage holdings (end of
13 Total
14
FHA/VA-insured
15
Conventional
Mortgage transactions
16 Purchases
17 Sales

period)

(during

48,050
33,673
14,377

55,104
37,365
17,725

58,675
39,341
19,334

62,112
39,926
22,185

62,544
39,893
22,654

63,132
39,834
23,298

63,951
39,808
24,143

65,008
39,829
25,179

66,158
39,853
26,305

67,810
39,922
27,888

10,812
0

8,099
0

6,112
2

519
0

604
0

755
0

1,006
0

1,223
0

1,354
0

1,931
0

10,179
6,409

8,083
3,278

9,331
3,717

1,174
3,857

1,903
4,990

2,482
6,586

1,550
7,016

1,583
7,206

2,016
7,674

1,820
6,900

8,860.4
3,920.9

8,605.4
4,002.0

2,487.2
1,478.0

41.7
23.4

45.7
29.6

7.0
0.0

35.7
7.4

33.1
7.4

8.9
0.0

43.3
5.7

4,495.3
2,343.6

3,639.2
1,748.5

2,524.7
1,392.3

28.6
19.6

65.0
32.3

29.5
22.0

37.8
23.0

59.0
33.1

37.2
23.6

70.1
42.9

3,543
1,995
1,549

4,362
2,116
2,246

5,245
2,236
3,010

5,342
2,218
3,124

5.320
2,227
3,094

5,274
2,226
3,048

5,279
2,232
3,047

5,295
2,225
3,069

5,309
2,232
3,017

5,201
2,216
2,985

5,717
4,544

3,723
2,527

3,789
3,531

1,228
1,115

1,479
1,564

2,143
2,177

1,214
1,194

1,581
1,562

2,237
2,204

2,529
2,619

5,542
797

3,859
447

6,974
3,518

565
4,336

2,523
5,461

2,824
6,041

2,692
7,420

3,166
8,970

2,189
8,544

2,768
9,318

period)

Mortgage
commitments8
18 Contracted (during period)
19 Outstanding (end of period)
Auction of 4-month commitments to buy
Government-underwritten loans
Offered
Accepted
Conventional loans
22
Offered
23
Accepted
20
21

FEDERAL H O M E LOAN MORTGAGE CORPORATION

Mortgage holdings
24 Total
25
FHA/VA
26
Conventional

(end of

Mortgage transactions
27 Purchases
28 Sales

period)9

(during

period)

10

Mortgage
commitments
29 Contracted (during period)
30 Outstanding (end of period)

1. Weighted averages based on sample surveys of mortgages originated by m a j o r
institutional lender groups. Compiled by the Federal H o m e Loan Bank Board in
cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower
or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages,
rounded to the nearest 5 basis points; f r o m Department of Housing and Urban
Development.
5. Average gross yields on 30-year, minimum-downpayment, Federal Housing
Administration-insured first mortgages for immediate delivery in the private secondary market. Any gaps in data are due to periods of adjustment to changes in
maximum permissible contract rates.
6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities,




assuming prepayment in 12 years on pools of 30-year F H A / V A mortgages carrying
the prevailing ceiling rate. Monthly figures are unweighted averages of Monday
quotations for the month.
7. Average gross yields (before deduction of 38 basis points for mortgage servicing) on accepted bids in Federal National Mortgage Association's auctions of
4-month commitments to purchase home mortgages, assuming prepayment in 12
years for 30-year mortgages. N o adjustments are made for F N M A commitment
fees or stock related requirements. Monthly figures are unweighted averages for
auctions conducted within the month.
8. Includes some multifamily and nonprofit hospital loan commitments in addition to 1- to 4-family loan commitments accepted in F N M A ' s free market auction
system, and through the F N M A - G N M A tandem plans.
9. Includes participation as well as whole loans.
10. Includes conventional and government-underwritten loans.

Real Estate Debt
1.55

A41

MORTGAGE DEBT OUTSTANDING
Millions of dollars, end of period
1982

1981
Type of holder, and type of property

1979

1980

1981
Q2

Q3

Q4

Q1

Q2'

1,337,797
891,115
128,433
235,572
82,677

1,471,835
987,028
137,134
255,655
92,018

1,583,690'
l,060,517 r
141,481'
279,968 r
101,724 r

1,533,254'
1,028,355'
139,280'
268,095'
97,524'

1,561,669'
1,047,689'
140,228'
273,746'
100,006'

1,583,690'
1,060,517'
141,481'
279,968'
101,724'

1,603,057'
1,071,647'
142,672'
284,829'
103,909'

1,625,886
1,085,540
143,962
290,772
105,612

6 Major financial institutions
7
Commercial banks 1
8
1- to 4-family
9
Multifamily
10
Commercial
11
Farm
12
Mutual savings banks
13
1- to 4-family
14
Multifamily
15
Commercial
16
Farm

938,567
245,187
149,460
11,180
75,957
8,590
98,908
66,140
16,557
16,162
49

997,168
263,030
160,326
12,924
81,081
8,699
99,865
67,489
16,058
16,278
40

1,040,630'
284,536'
170,013'
15,132 r
91,026'
8,365'
99,997
68,187
15,960
15,810
40

1,023,133'
273,225
164,873
13,800
86,091
8,461
99,993
68,035
15,909
15,999
50

1,033,825'
279,017'
167,550'
14,481'
88,588'
8,398'
99,994
68,116
15,939
15,909
30

1,040,630'
284,536'
170,013'
15,132'
91,026'
8,365'
99,997
68,187
15,960
15,810
40

1,041,487'
289,365'
171,350'
15,338'
94,256'
8,421'
97,464
66,305'
15,536'
15,594
29'

1,042,663
294,022
172,596
15,431
97,522
8,473
96,357
65,381
15,338
15,598
40

17
18
19
20

Savings and loan associations
1- to 4-family
Multifamily
Commercial

475,688
394,345
37,579
43,764

503,192
419,763
38,142
45,287

518,350
432,978
37,684
47,688

515,256
430,702
38,077
46,477

518,778
433,750
37,975
47,053

518,350
432,978
37,684
47,688

515,896
430,928
37,506
47,462

512,745
428,194
36,866
47,685

21
22
23
2.4
25

Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm

118,784
16,193
19,274
71,137
12,180

131,081
17,943
19,514
80,666
12,958

137,747'
17,201'
19,283 r
88,163'
13,100'

134,659'
17,549'
19,495'
84,571'
13,044'

136,036'
17,376'
19,441'
86,070'
13,149'

137,747'
17,201'
19,283'
88,163'
13,100'

138,762'
17,086'
19,199'
89,529'
12,948'

139,539
16,451
18,982
91,113
12,993

97,084
3,852
763
3,089

114,300
4,642
704
3,938

126,112
4,765
693
4,072

119,124
4,972
698
4,274

121,772
4,382
696
3,686

126,112
4,765
693
4,072

128,721
4,438
689
3,749

132,240
4,669
688
3,981

1
2
3
4
5

All holders
1- to 4-family
Multifamily
Commercial
Farm

26 Federal and related agencies
27
Government National Mortgage Association
28
1- to 4-family
29
Multifamily
30
31
32
33
34

Farmers H o m e Administration
1- to 4-family
Multifamily
Commercial
Farm

1,274
417
71
174
612

3,492
916
610
411
1,555

2,235
914
473
506
342

2,662
1,151
464
357
690

1,562
500
242
325
495

2,235
914
473
506
342

2,469
715
615
499
640

2,038
792
198
444
604

35
36
37

Federal Housing and Veterans Administration
1- to 4-family
Multifamily

5,555
1,955
3,600

5,640
2,051
3,589

5,999
2,289
3,710

5,895
2,172
3,723

6,005
2,240
3,765

5,999
2,289
3,710

6,003
2,266
3,737

5,960
2,210
3,750

38
39
40

Federal National Mortgage Association
1- to 4-family
Multifamily

51,091
45,488
5,603

57,327
51,775
5,552

61,412
55,986
5,426

57,657
52,181
5,476

59,682
54,227
5,455

61,412
55,986
5,426

62,544
57,142
5,402

65,008
59,631
5,377

41
47
43

Federal Land Banks
1- to 4-family
Farm

31,277
1,552
29,725

38,131
2,099
36,032

46,446
2,788
43,658

42,681
2,401
40,280

44,708
2,605
42,103

46,446
2,788
43,658

47,947
2,874
45,073

49,270
2,954
46,316

44
45
46

Federal H o m e Loan Mortgage Corporation
1- to 4-family
Multifamily

4,035
3,059
976

5,068
3,873
1,195

5,255
4,018
1,237

5,257
4,025
1,232

5,433
4,166
1,267

5,255
4,018
1,237

5,320
4,075
1,245

5,295
4,042
1,253

118,664
75,787
73,853
1,934

142,258
93,874
91,602
2,272

162,990
105,790
103,007
2,783

152,308
100,558
98,057
2,501

158,140
103,750
101,068
2,682

162,990
105,790
103,007
2,783

172,292
108,592
105,701
2,891

182,945
111,459
108,487
2,972

47 Mortgage pools or trusts 2
48
Government National Mortgage Association
49
1- to 4-family
Multifamily
50
51
57
53

Federal H o m e Loan Mortgage Corporation
1- to 4-family
Multifamily

15,180
12,149
3,031

16,854
13,471
3,383

19,843'
15,888'
3,955

17,565
14,115
3,450

17,936
14,401
3,535

19,843'
15,888'
3,955

23,959'
18,995'
4,964

28,693
22,637
6,056

54
55
56
57
58
59
60

Federal National Mortgage Association 3
1- to 4-family
Farmers H o m e Administration
1- to 4-family
Multifamily
Commercial
Farm

n.a.
n.a.
27,697
14,884
2,163
4,328
6,322

n.a.
n.a.
31,530
16,683
2,612
5,271
6,964

717
717
36,640
18,378
3,426
6,161
8,675

n.a.
n.a.
34,185
17,165
3,097
5,750
8,173

n.a.
n.a.
36,454
18,407
3,488
6,040
8,519

717
717
36,640
18,378
3,426
6,161
8,675

2,786
2,786
36,955
18,740
3,447
6,351
8,417

4,556
4,556
38,273
19,056
4,026
6,574
8,581

183,482
110,857
23,376
24,050
25,199

218,109
138,333
27,345
26,661
25,770

253,958
167,460
28,340
30,614
27,544

238,689
155,231
27,782
28,850
26,826

247,932
162,587
28,272
29,761
27,312

253,958
167,460
28,340
30,614
27,544

260,557
171,995
29,043
31,138
28,381

268,038
177,865
29,732
31,836
28,605

61 Individual and others 4
1- to 4-family 5
67
Multifamily
63
64
Commercial
Farm
65

1. Includes loans held by nondeposit trust companies but not bank trust departments.
2. Outstanding principal balances of mortgages backing securities insured or
guaranteed by the agency indicated.
3. Outstanding balances on F N M A ' s issues of securities backed by pools of
conventional mortgages held in trust. T h e program was implemented by F N M A
in October 1981.
4. Other holders include mortgage companies, real estate investment trusts, state
and local credit agencies, state and local retirement funds, noninsured pension
funds, credit unions, and U.S. agencies for which amounts are small or for which
separate data are not readily available.
5. Includes a new estimate of residential mortgage credit provided by individuals.




NOTE. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve in conjunction with the
Federal H o m e Loan Bank Board and the D e p a r t m e n t of Commerce. Separation
of nonfarm mortgage debt by type of property, if not reported directly, and interpolations and extrapolations when required, are estimated mainly by the Federal
Reserve. Multifamily debt refers to loans on structures of five or more units.

A42
1.56

DomesticNonfinancialStatistics • October 1982
C O N S U M E R I N S T A L L M E N T CREDIT 1 Total Outstanding, and Net Change
Millions of dollars
1982
HnlHpr onrf fvrw» of rrf^Hit

1979

1980

1981
Feb.

Mar.

Apr.

May

June

July

Aug.

A m o u n t s outstanding (end of p e r i o d )

312,024

313,472

333,375

327,435

327,131

328,363

329,338

331,851

332,471

333,808

154,177
68,318
46,517
28,119
8,424
3,729
2,740

147,013
76,756
44,041
28,448
9,911
4,468
2,835

149,300
89,818
45,954
29,551
11,598
4,403
2,751

146,922
89,009
45,586
27,013
11,738
4,433
2,734

146,454
89,591
45,632
26,530
11,926
4,229
2,769

146,616
90,674
45,450
26,537
12,081
4,227
2,778

146,147
91,958
45,472
26,536
12,202
4,218
2,805

146,775
93,009
45,882
26,645
12,312
4,398
2,830

146,745
93,353
45,698
26,710
12,520
4,600
2,845

147,275
93,207
46,154
26,751
12,833
4,714
2,874

By major type of credit
9 Automobile
10
Commercial b a n k s
11
Indirect p a p e r
12
Direct loans
13
Credit unions
14
Finance companies

116,362
67,367
38,338
29,029
22,244
26,751

116,838
61,536
35,233
26,303
21,060
34,242

126,431
59,181
35,097
24,084
21,975
45,275

125,294
58,604
34,920
23,684
21,799
44,891

125,559
58,510
34,888
23,622
21,821
45,228

126,201
58,458
34,920
23,538
21,733
46,010

127,220
58,099
34,791
23,308
21,744
47,377

128,415
58,140
34,903
23,237
21,940
48,335

128,359
58,131
34,979
23,152
21,852
48,376

128,281
58,222
34,996
23,226
22,071
47,988

15 Revolving
16
Commercial banks
17
Retailers
18
Gasoline companies

56,937
29,862
23,346
3,729

58,352
29,765
24,119
4,468

63,049
33,110
25,536
4,403

59,514
31,923
23,158
4,433

58,491
31,532
22,730
4,229

58,641
31,638
22,776
4,227

58,647
31,619
22,810
4,218

59,302
31,974
22,930
4,398

59,824
32,205
23,019
4,600

60,475
32,691
23,070
4,714

19 Mobile h o m e
20
Commercial banks
21
Finance c o m p a n i e s
22
Savings a n d loans
23
Credit unions

16,838
10,647
3,390
2,307
494

17,322
10,371
3,745
2,737
469

18,486
10,300
4,494
3,203
489

18,343
10,111
4,506
3,241
485

18,363
10,037
4,548
3,293
486

18,402
9,974
4,608
3,336
484

18,479
9,960
4,666
3,369
484

18,543
9,924
4,731
3,400
488

18,601
9,857
4,801
3,458
486

18,741
9,790
4,916
3,544
491

121,887
46,301
38,177
23,779
4,773
6,117
2,740

120,960
45,341
38,769
22,512
4,329
7,174
2,835

125,409
46,709
40,049
23,490
4,015
8,395
2,751

124,284
46,284
39,612
23,302
3,855
8,497
2,734

124,718
46,375
39,815
23,326
3,800
8,633
2,769

125,119
46,546
40,056
23,233
3,761
8,745
2,778

124,992
46,469
39,915
23,244
3,726
8,833
2,805

125,591
46,737
39,943
23,454
3,715
8,912
2,830

125,687
46,552
40,176
23,360
3,691
9,063
2,845

126,311
46,572
40,303
23,592
3,681
9,289
2,874

1 Total
2
3
4
5
6
7
8

By major holder
Commercial banks
Finance companies
Credit unions
Retailers 2
Savings and loans
Gasoline companies
M u t u a l savings b a n k s

24 O t h e r
25
Commercial b a n k s
26
Finance c o m p a n i e s
27
Credit unions
28
Retailers
29
Savings and loans
30
Mutual savings b a n k s

Net change (during p e r i o d ) 3

38,381

1,448

19,894

75

990

1,175

1,399

1,349

570

66

18,161
14,020
2,185
2,132
1,327
509
47

-7,163
8,438
-2,475
329
1,485
739
95

2,284
13,062
1,913
1,103
1,682
-65
-85

-171
307
-135
-124
173
36
-11

166
673
-122
171
251
-150
1

96
544
132
181
205
-6
23

-13
1,126
w39
68
221
-20
56

-100
874
38
304
187
38
8

-66
195
-69
297
196
3
14

-252
-142
179
-109
268
65
57

By major type of credit
39 A u t o m o b i l e
40
Commercial banks
41
Indirect p a p e r
42
Direct loans
43
Credit unions
44
Finance companies

14,715
6,857
4,488
2,369
1,044
6,814

477
-5,830
-3,104
-2,726
-1,184
7,491

9,595
-2,355
-136
-2,219
914
11,033

-56
-180
-141
-39
-59
183

-28
-248
-130
-118
-55
275

233
-159
2
-161
54
338

959
-305
-52
-253
-34
1,298

655
-240
-52
-188
28
867

61
101
225
-124
-26
-14

-402
-146
-129
-17
65
-321

45 Revolving
46
Commercial banks
47
Retailers
48
Gasoline c o m p a n i e s

8,628
5,521
2,598
509

1,415
-97
773
739

4,697
3,345
1,417
-65

-155
-65
-126
36

307
296
161
-150

499
285
220
-6

537
436
121
-20

507
219
250
38

612
266
343
3

143
162
-84
65

49 Mobile h o m e
50
Commercial banks
51
Finance companies
52
Savings a n d loans
53
Credit unions

1,603
1,102
238
240
23

483
-276
355
430
-25

1,161
-74
749
466
20

-44
-110
56
14
-4

15
-82
52
47
-2

51
-48
53
43
3

70
-41
44
67
0

67
-58
64
60
1

63
-57
73
47
0

141
-62
108
94
1

13,435
4,681
6,968
1,118
-466
1,087
47

-927
-960
592
-1,266
-444
1,056
95

4,441
1,368
1,280
975
-314
1,217
-85

330
184
68
-72
2
159
-11

696
200
346
-65
10
204
1

392
18
153
75
-39
162
23

-167
-103
-216
-5
-53
154
56

120
-21
-57
9
54
127
8

-166
-376
136
-43
-46
149
14

184
-206
71
113
-25
174
57

31 Total

32
33
34
35
36
37
38

By major holder
Commercial banks
Finance c o m p a n i e s
Credit unions
Retailers 2
Savings a n d loans
Gasoline companies
M u t u a l savings b a n k s

54 O t h e r
55
Commercial banks
56
Finance companies
57
Credit unions
58
Retailers
59
Savings a n d loans
60
Mutual savings b a n k s

1. T h e B o a r d ' s series cover most short- and intermediate-term credit e x t e n d e d
to individuals through regular business channels, usually t o finance the purchase
of consumer goods and services or to refinance debts incurred for such purposes,
and scheduled to be repaid (or with the o p t i o n of r e p a y m e n t ) in two or m o r e
installments.
2. Includes a u t o dealers a n d excludes 30-day charge credit held by travel and
e n t e r t a i n m e n t companies.




3. Net change equals extensions m i n u s liquidations ( r e p a y m e n t s , charge-offs a n d
other credit); figures f o r all m o n t h s are seasonally a d j u s t e d .
NOTE: Total consumer noninstallment credit outstanding—credit scheduled t o
be repaid in a l u m p s u m , including single-payment loans, charge accounts, a n d
service c r e d i t — a m o u n t e d t o , not seasonally a d j u s t e d $71.3 billion at the e n d of
1979, $74.8 billion at t h e e n d of 1980, a n d $80.2 billion at the e n d of 1981.

Consumer Debt
1.57

A43

C O N S U M E R INSTALLMENT C R E D I T Extensions and Liquidations
Millions of dollars; monthly data are seasonally adjusted.
1982
Holder and fvnp nf credit

1979
Feb.

Mar.

Apr.

May

June

July

Aug.

Extensions
324,777

306,076

336,341

27,150

27,462

28,648

29,197

29,737

27,514

27,579

154,733
61,518
34,926
47,676
5,901
18,005
2,018

134,960
60,801
29,594
49,942
6,621
22,253
1,905

146,186
66,344
35,444
53,430
8,142
24,902
1,893

12,431
4,857
2,695
4,254
754
2,007
152

12,519
5,002
2,631
4,536
788
1,835
151

12,790
5,343
3,010
4,618
823
1,915
185

12,765
6,135
2,902
4,449
841
1,880
225

13,460
5,700
2,887
4,762
785
1,969
174

12,485
4,607
2,711
4,785
803
1,944
179

12,499
4,685
2,904
4,396
863
2,021
211

By major type of credit
y Automobile
10
Commercial banks
ii
Indirect paper
12
Direct loans
13
Credit unions
14
Finance companies

93,901
53,554
29,623
23,931
17,397
22,950

83,454
41,109
22,558
18,551
15,294
27,051

94,404
42,792
24,941
17,851
18,084
33,527

7,283
3,415
1,875
1,540
1,363
2,505

7,183
3,393
1,875
1,518
1,420
2,370

7,871
3,499
2,079
1,420
1,542
2,830

8,429
3,317
1,954
1,363
1,483
3,629

8,182
3,404
2,036
1,368
1,497
3,281

7,332
3,687
2,324
1,363
1,389
2,256

7,112
3,454
1,957
1,497
1,499
2,159

15 Revolving
16
Commercial banks
17
Retailers
Gasoline companies
18

120,174
61,048
41,121
18,005

128,068
61,593
44,222
22,253

140,135
67,370
47,863
24,902

11,730
5,928
3,795
2,007

12,143
6,235
4,073
1,835

12,416
6,309
4,192
1,915

12,528
6,604
4,044
1,880

13,361
7,141
4,251
1,969

12,551
6,237
4,370
1,944

12,497
6,512
3,964
2,021

6,471
4,542
797
948
184

5,093
2,937
898
1,146
113

6,028
3,106
1,313
1,432
176

364
136
117
102
9

411
156
120
126
9

544
253
122
151
18

478
201
114
151
12

459
180
129
137
13

441
173
133
123
12

581
194
193
181
13

104,231
35,589
37,771
17,345
6,555
4,953
2,018

89,461
29,321
32,852
14,187
5,720
5,476
1,905

95,774
32,918
31,504
17,182
5,567
6,710
1,893

7,773
2,952
2,235
1,323
459
652
152

7,725
2,735
2,512
1,202
463
662
151

7,853
2,729
2,391
1,450
426
672
185

7,762
2,643
2,392
1,407
405
690
225

7,735
2,735
2,290
1,377
511
648
174

7,190
2,388
2,218
1,310
415
680
179

7,389
2,339
2,333
1,392
432
682
211

1 Total
2
3
4
5
6
7
8

By major holder
Commercial banks
Finance companies
Credit unions
Retailers 1
Savings and loans
Gasoline companies
Mutual savings banks

19 Mobile home
20
Commercial banks
21
Finance companies
22
Savings and loans
23
Credit unions
24 Other
25
Commercial banks
26
Finance companies
Credit unions
27
2.8
Retailers
29
Savings and loans
30
Mutual savings banks

Liquidations
286,396

304,628

316,447

27,075

26,472

27,509

27,798

28,388

26,944

27,513

136,572
47,498
32,741
45,544
4,574
17,496
1,971

142,123
52,363
32,069
49,613
5,136
21,514
1,810

143,902
53,282
33,531
52,327
6,640
24,967
1,978

12,602
4,550
2,830
4,378
581
1,971
163

12,353
4,329
2,753
4,365
537
1,985
150

12,694
4,799
2,878
4,437
618
1,921
162

12,778
5,009
2,941
4,381
620
1,900
169

13,560
4,826
2,849
4,458
598
1,931
166

12,551
4,412
2,780
4,488
607
1,941
165

12,751
4,827
2,725
4,505
595
1,956
154

By major type of credit
39 Automobile
40
Commercial banks
41
Indirect paper
42
Direct loans
Credit unions
43
44
Finance companies

79,186
46,697
25,135
21,562
16,353
16,136

82,977
46,939
25,662
21,277
16,478
19,560

84,809
45,147
25,077
20.070
17,169
22,494

7,339
3,595
2,016
1,579
1,422
2,322

7,211
3,641
2,005
1,636
1,475
2,095

7,638
3,658
2,077
1,581
1,488
2,492

7,470
3,622
2,006
1,616
1,517
2,331

7,527
3,644
2,088
1,556
1,469
2,414

7,271
3,586
2,099
1,487
1,415
2,270

7,514
3,600
2,086
1,514
1,434
2,480

45 Revolving
46
Commercial banks
47
Retailers
48
Gasoline companies

111,546
55,527
38,523
17,496

126,653
61,690
43,449
21,514

135,438
64,025
46,446
24,967

11,885
5,993
3,921
1,971

11,836
5,939
3,912
1,985

11,917
6,024
3,972
1,921

11,991
6,168
3,923
1,900

12,854
6,922
4,001
1,931

11,939
5,971
4,027
1,941

12,354
6,350
4,048
1,956

4,868
3,440
559
708
161

4,610
3,213
543
716
138

4,867
3,180
564
966
156

408
246
61
88
13

396
238
68
79
11

493
301
69
108
15

408
242
70
84
12

392
238
65
77
12

378
230
60
76
12

440
256
85
87
12

90,796
30,908
30,803
16,227
7,021
3,866
1,971

90,388
30,281
32,260
15,453
6,164
4,420
1,810

91,333
31,550
30,224
16,207
5,881
5,493
1,978

7,443
2,768
2,167
1,395
457
493
163

7,029
2,535
2,166
1,267
453
458
150

7,461
2,711
2,238
1,375
465
510
162

7,929
2,746
2,608
1,412
458
536
169

7,615
2,756
2,347
1,368
457
521
166

7,356
2,764
2,082
1,353
461
531
165

7,205
2,545
2,262
1,279
457
508
154

31 Total
32
33
34
35
36
37
38

By major holder
Commercial banks
Finance companies
Credit unions
Retailers 1
Savings and loans
Gasoline companies
Mutual savings banks

49 Mobile home
50
Commercial banks
51
Finance companies
52
Savings and loans
53
Credit unions
54 Other
Commercial banks
55
Finance companies
56
57
Credit unions
58
Retailers
59
Savings and loans
60
Mutual savings banks

1. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.




A44
1.58

DomesticNonfinancialStatistics • October 1982
F U N D S R A I S E D IN U.S. C R E D I T M A R K E T S
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1979
Transaction r a t f o n r v sprtnr

1976

1977

1978

1979

1980

1980

1981

1982

1981
H2

HI

H2

HI

H2

HI

Nonfinancial sectors
1 Total funds raised
2 Excluding equities
By sector and instrument
3 U.S. government
4
Treasury securities
Agency issues and mortgages
5
6 All other nonfinancial sectors
7
Corporate equities
8
Debt instruments
9
Private domestic nonfinancial sectors
10
Corporate equities
11
Debt instruments
12
Debt capital instruments
State and local obligations
13
14
Corporate bonds
Mortgages
lb
H o m e mortgages
16
Multifamily residential
17
Commercial
18
Farm
19
Other debt instruments
20
Consumer credit
21
Bank loans n.e.c
22
Open market paper
23
Other
24
25
26
27
28
29
30
31
32
33
34
35
36

By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate
Foreign
Corporate equities
D e b t instruments
Bonds
Bank loans n.e.c
Open market paper
U.S. government loans

273.5
262.7

334.3
331.2

401.7
402.3

402.0
409.1

397.1
382.2

406.9
418.4

406.6
411.0

363.0
354.2

431.2
410.2

438.2
436.7

375.7
400.2

385.2
385.6

69.0
69.1
-.1
204.5
10.8
193.6
184.9
10.5
174.3
123.6
15.7
22.8

56.8
57.6
-.9
277.5
3.1
274.4
263.6
2.7
260.9
169.8
21.9
21.0

53.7
55.1
-1.4
348.0
-.6
348.7
314.8
-.1
314.9
198.7
28.4
20.1

37.4
38.8
-1.4
364.7
-7.1
371.7
343.6
-7.8
351.5
216.0
29.8
22.5

79.2
79.8
-.6
317.9
15.0
303.0
288.7
12.9
275.8
204.1
35.9
33.2

87.4
87.8
-.5
319.6
-11.5
331.0
292.3
-11.5
303.7
175.0
32.9
23.9

46.1
46.6
-.5
360.5
-4.3
364.9
332.2
-6.1
338.3
213.1
32.8
22.6

63.3
63.9
-.6
299.8
8.9
290.9
268.8
6.9
261.9
203.8
30.7
37.3

95.1
95.7
-.6
336.1
21.0
315.0
308.5
18.8
289.7
204.4
41.0
29.0

81.9
82.4
-.5
356.3
1.6
354.8
321.7
.9
320.8
196.5
35.1
24.7

92.9
93.2
-.4
282.8
-24.5
307.3
262.9
-23.8
286.7
153.5
30.6
23.0

99.0
98.6
.4
286.3
-.4
286.6
272.7
-.1
272.8
157.6
46.8
18.5

63.9
3.9
11.6
5.7
50.7
25.4
4.4
4.0
16.9

94.3
7.1
18.4
7.1
91.1
40.2
26.7
2.9
21.3

112.1
9.2
21.7
7.2
116.2
48.8
37.1
5.2
25.1

120.1
7.8
23.9
11.8
135.5
45.4
49.2
11.1
29.7

96.7
8.8
20.2
9.3
71.7
4.9
35.4
6.6
24.9

78.6
4.6
25.3
9.8
128.8
25.3
51.1
19.2
33.1

113.9
6.9
25.4
11.5
125.2
41.0
39.6
17.4
27.2

96.5
8.1
20.3
10.9
58.1
-3.3
18.0
20.3
23.0

96.9
9.5
20.1
7.8
85.4
13.0
52.7
-7.1
26.7

95.2
5.1
27.4
9.0
124.3
29.4
47.7
10.7
36.5

62.0
4.1
23.2
10.5
133.2
21.2
54.6
27.6
29.8

66.7
5.6
14.0
6.1
115.2
16.0
84.6
3.4
11.2

184.9
15.2
89.5
80.2
10.2
15.4

263.6
15.4
137.3
110.9
12.3
28.3

314.8
19.1
169.3
126.3
14.6
32.4

343.6
20.2
176.5
146.9
21.4
34.4

288.7
27.3
117.5
143.9
14.4
33.8

292.3
22.3
120.4
149.5
16.4
40.5

332.2
22.5
165.8
143.9
22.7
37.0

268.8
21.8
115.2
131.8
15.7
27.5

308.5
32.8
119.8
155.9
13.0
40.2

321.7
25.1
141.0
155.6
19.9
41.8

262.9
19.5
99.9
143.5
12.8
39.3

272.7
34.3
102.2
136.1
4.8
25.6

54.5
19.6
.3
19.3
8.6
5.6
1.9

70.4
13.9
.4
13.5
5.1
3.1
2.4

79.3
33.2
-.5
33.8
4.2
19.1
6.6

91.2
21.0
.8
20.2
3.9
2.3
11.2

95.7
29.3
2.1
27.2
.8
11.5
10.1

92.6
27.3

84.2
28.3
1.7
26.6
4.9
2.6
16.3

88.6
31.0
1.9
29.0
2.0
5.9
15.7

102.7
27.5
2.2
25.3
-.4
17.2
4.5

93.9
34.6
.7
34.0
3.3
5.0
20.6

91.4
19.9
-.7
20.6
7.6
2.3
7.1

105.8
13.6
-.2
13.8
2.1
-2.0
11.3

*

27.3
5.5
3.7
13.9

Financial sectors
37 Total funds raised
38
39
40
41
42
43
44
45
46
47
48
49

By instrument
U.S. government related
Sponsored credit agency securities
Mortgage pool securities
Loans from U.S. government
Private financial sectors
Corporate equities
D e b t instruments
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper and RPs
Loans from Federal H o m e Loan Banks

By sector
50 Sponsored credit agencies
51 Mortgage pools
52 Private financial sectors
Commercial banks
53
54
Bank affiliates
Savings and loan associations
55
Other insurance companies
56
57
Finance companies
58
REITs
Open-end investment companies
59

22.5

52.2

77.5

83.9

68.5

89.3

78.7

65.1

71.9

95.5

83.0

107.4

14.3
2.5
12.2
8.2
-.2
8.4
9.8
2.1
-3.7
2.2
-2.0
22.5

21.9
7.0
16.1
30.3
3.4
26.9
10.1
3.1
-.3
9.6
4.3
52.2

36.7
23.1
13.6
40.8
2.5
38.3
7.5
.9
2.8
14.6
12.5
77.5

47.3
24.3
23.1
36.6
3.2
33.4
7.8
-1.2
-.4
18.0
9.2
83.9

43.6
24.4
19.2
24.9
7.2
17.7
7.1
-.9
-.4
4.8
7.1
68.5

45.1
30.1
15.0
44.1
8.6
35.6
-.8
-2.9
2.2
20.9
16.2
89.3

50.8
25.8
25.0
27.9
2.6
25.3
7.7
-2.9
.5
10.8
9.2
78.7

47.3
27.1
20.2
17.7
7.5
10.3
9.9
-5.3
.1
-.1
5.8
65.1

39.8
21.7
18.1
32.0
6.9
25.2
4.4
3.5
-.9
9.7
8.5
71.9

42.5
26.9
15.6
53.0
9.7
43.4
-2.1
-2.3
3.7
24.8
19.3
95.5

47.8
33.3
14.5
35.3
7.5
27.8
.4
-3.5
.7
17.0
13.2
83.0

61.1
21.9
39.2
46.3
16.1
30.2
-3.3
1.7
2.2
15.8
13.8
107.4

2.1
12.2
8.2
2.3
5.4
.1
.9
4.3
-2.2
-2.4

5.8
16.1
30.3
1.1
2.0
9.9
1.4
16.9
-1.9
.9

23.1
13.6
40.8
1.3
7.2
14.3
.8
18.1
-.9
-.1

24.3
23.1
36.6
1.6
6.5
11.4
.9
16.6
-.3
.1

24.4
19.2
24.9
.5
6.9
6.6
1.1
6.3
-1.5
5.0

30.1
15.0
44.1
.4
8.3
13.1
1.1
14.1
-.5
7.7

25.8
25.0
27.9
1.8
4.9
10.2
.9
11.0
-.1
-.8

27.1
20.2
17.7
.8
5.8
.1
1.0
6.0
-1.4
5.5

21.7
18.1
32.0
.3
8.0
13.2
1.1
6.5
-1.7
4.5

26.9
15.6
53.0
.2
6.9
19.2
1.1
17.3
-.6
8.9

33.3
14.5
35.3
.5
9.7
6.9
1.1
11.0
-.3
6.5

21.9
39.2
46.3
1.0
9.3
16.4
1.0
4.1
*

14.5

All sectors
60 Total funds raised, by instrument

296.0

386.5

479.2

485.9

465.6

496.2

485.3

428.1

503.1

533.7

458.7

492.6

61 Investment company shares
62 Other corporate equities
63 Debt instruments
64
U.S. government securities
65
State and local obligations
66
Corporate and foreign bonds
67
Mortgages
68
Consumer credit
69
Bank loans n.e.c
70
Open market paper and RPs
Other loans
71

-2.4
13.1
285.4
83.8
15.7
41.2
87.1
25.4
6.2
8.1
17.8

.9
5.6
379.9
79.9
21.9
36.1
129.9
40.2
29.5
15.0
27.4

-.1
1.9
477.4
90.5
28.4
31.8
151.0
48.8
59.0
26.4
41.5

.1
-3.9
489.7
84.8
29.8
34.2
162.4
45.4
51.0
40.3
41.8

5.0
17.1
443.5
122.9
35.9
41.1
134.0
4.9
46.5
21.6
36.6

7.7
-10.6
499.1
132.6
32.9
28.5
115.2
25.3
57.0
54.0
53.7

-.8
-.9
487.1
97.0
32.8
35.2
154.7
41.0
42.7
44.5
39.2

5.5
10.8
411.8
110.7
30.7
49.3
130.4
-3.3
24.0
35.9
34.1

4.5
23.4
475.2
135.1
41.0
33.0
137.7
13.0
69.0
7.2
39.2

8.9
2.3
522.5
124.5
35.1
26.0
134.3
29.4
56.4
56.2
60.7

6.5
-23.5
475.7
140.7
30.6
30.9
96.2
21.2
57.6
51.8
46.6

14.5
1.2
476.9
160.1
46.8
17.3
94.0
16.0
84.8
30.5
27.4




Flow of Funds
1.59

DIRECT A N D I N D I R E C T S O U R C E S OF F U N D S TO CREDIT MARKETS
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates
1979
Transaction category, or sector

1 Total funds advanced in credit markets to nonfinancial sectors
2
3
4

5
6

7
8
9
10
11

By public agencies and foreign
Total net advances
U.S. government securities
Residential mortgages
F H L B advances to savings and loans
Other loans and securities
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
Agency borrowing not included in line 1

Private domestic funds advanced
12 Total net advances
13
U.S. government securities
14
State and local obligations
Corporate and foreign bonds
15
16
Residential mortgages
17
Other mortgages and loans
18
LESS: Federal H o m e Loan Bank advances
Private financial
intermediation
19 Credit market funds advanced by private financial institutions
20
Commercial banking
21
Savings institutions
22
Insurance and pension funds
Other finance
23
24 Sources of funds
25
Private domestic deposits
26
Credit market borrowing
27
Other sources
28
Foreign funds
29
Treasury balances
30
Insurance and pension reserves
Other, net
31
Private domestic nonfinancial
investors
32 Direct lending in credit markets
33
U.S. government securities
34
State and local obligations
35
Corporate and foreign bonds
36
Commercial paper
37
Other
38 Deposits and currency
39
Currency
40
Checkable deposits
41
Small time and savings accounts
42
Money market fund shares
43
Large time deposits
44
Security RPs
Foreign deposits
45
46 Total of credit market instruments, deposits and
currency
47

48
49

A45

Public support rate (in percent)
Private financial intermediation (in p e r c e n t ) . . .
Total foreign funds

1977

1976

1978

1979

1980

1980

1982

1981

1981
H2

HI

H2

HI

H2

HI

262.7

331.2

402.3

409.1

382.2

418.4

411.0

354.2

410.2

436.7

400.2

385.6

49.8
23.1
12.3
-2.0
16.4

79.2
34.9
20.0
4.3
20.1

101.9
36.1
25.7
12.5
27.6

74.6
-6.3
35.8
9.2
35.9

95.8
15.7
31.7
7.1
41.3

95.9
17.2
23.4
16.2
39.1

101.0
16.6
36.7
9.2
38.6

104.6
20.5
34.9
5.8
43.4

87.0
10.9
28.5
8.5
39.1

98.7
15.9
21.4
19.3
42.1

93.2
18.5
25.5
13.2
36.0

91.6
1.1
47.1
13.8
29.7

7.9
16.8
9.8
15.2
14.3

10.0
22.4
7.1
39.6
21.9

17.1
39.9
7.0
38.0
36.7

19.0
52.4
7.7
-4.6
47.3

23.7
44.4
4.5
23.2
43.6

24.2
46.0
9.2
16.6
45.1

18.7
56.9
14.0
11.3
50.8

24.6
45.2
14.9
19.9
47.3

22.8
43.7
-5.9
26.5
39.8

27.1
44.3
-3.7
30.9
42.5

21.2
47.7
22.1
2.2
47.8

10.6
61.8
-6.5
25.8
61.1

227.1
60.7
15.7
30.5
55.4
62.9
-2.0

273.9
45.1
21.9
22.2
81.4
107.6
4.3

337.1
54.3
28.4
22.4
95.5
149.1
12.5

381.8
91.1
29.8
23.7
92.0
154.3
9.2

329.9
107.2
35.9
25.8
73.7
94.4
7.1

367.6
115.4
32.9
20.6
59.7
155.3
16.2

360.8
80.5
32.8
24.1
84.0
148.7
9.2

296.9
90.2
30.7
31.6
69.6
80.6
5.8

362.9
124.2
41.0
20.1
77.8
108.3
8.5

380.5
108.5
35.1
18.6
78.8
158.7
19.3

354.7
122.3
30.6
22.7
40.5
151.8
13.2

355.1
159.1
46.8
4.4
25.0
133.5
13.8

190.9
59.6
70.2
49.7
11.4

261.7
87.6
81.6
69.0
23.5

302.9
128.7
73.6
75.0
25.6

292.2
121.1
55.5
66.4
49.2

257.9
99.7
54.1
74.4
29.8

301.3
103.5
24.6
75.8
97.4

260.7
108.1
48.9
60.1
43.6

245.4
64.7
34.9
84.3
61.5

270.4
134.8
73.2
64.4
-1.9

326.3
107.8
43.9
75.8
98.8

276.3
99.2
5.3
75.8
95.9

289.4
123.3
30.6
93.3
42.3

190.9
124.4
8.4
58.0
-4.7
-.1
34.3
28.5

261.7
138.9
26.9
96.0
1.2
4.3
51.4
39.1

302.9
141.1
38.3
123.5
6.3
6.8
62.2
48.3

292.2
142.5
33.4
116.4
25.6
.4
49.1
41.3

257.9
167.8
17.7
72.4
-23.0
-2.6
65.4
32.6

301.3
211.2
35.6
54.6
-8.8
-1.1
70.8
-6.4

260.7
145.9
25.3
89.5
3.4
-.7
43.8
43.0

245.4
162.5
10.3
72.7
-20.0
-6.1
70.3
28.6

270.4
173.1
25.2
72.1
-26.0
1.0
60.5
36.6

326.3
212.0
43.4
70.9
-.7
6.0
66.0
-.4

276.3
210.3
27.8
38.2
-16.8
-8.2
75.6
-12.3

289.4
172.0
30.2
87.1
-30.6
-5.2
78.5
44.4

44.7
15.9
3.3
11.8
1.9
11.8

39.0
24.6
-.8
-5.1
9.6
10.7

72.5
36.3
3.6
-2.9
15.6
19.9

122.9
61.4
9.4
10.2
12.1
29.8

89.7
38.3
12.6
9.3
-3.4
32.9

101.9
50.4
20.3
-7.9
3.5
35.6

125.4
54.9
11.5
16.9
14.6
27.6

61.7
23.3
6.2
7.8
-8.1
32.5

117.7
53.3
18.9
10.8
1.4
33.3

97.5
43.0
22.8
-9.2
-1.4
42.3

106.2
57.7
17.8
-6.6
8.4
29.0

95.9
60.2
27.2
-23.0
6.9
24.7

133.4
7.3
10.4
123.7
-12.0
2.3
1.7

148.5
8.3
17.2
93.5
.2
25.8
2.2
1.3

152.3
9.3
16.3
63.7
6.9
46.6
7.5
2.0

151.9
7.9
19.2
61.0
34.4
21.2
6.6
1.5

179.2
10.3
4.2
79.5
29.2
48.3
6.5
1.1

221.0
9.5
18.3
46.6
107.5
36.3
2.5
.3

149.9
6.3
22.5
50.7
38.6
39.4
-5.3
-2.3

172.4
9.3
-2.5
73.4
61.9
24.4
5.3
.6

186.1
11.3
11.0
85.7
-3.4
72.1
7.8
1.7

218.6
5.8
26.5
26.9
104.1
46.8
7.7
.8

223.4
13.2
10.1
66.3
110.8
25.7
-2.6
-.2

170.0
2.0
7.0
90.0
39.7
48.3
-12.9
-4.1

178.1

187.5

224.9

274.8

269.0

322.8

275.3

234.1

303.8

316.1

329.6

265.9

19.0
84.0
10.5

23.9
95.6
40.8

25.3
89.9
44.3

18.2
76.5
21.0

25.1
78.2
.2

22.9
82.0
7.8

24.6
72.3
14.8

29.5
82.7

21.2
74.5
.5

22.6
85.8
30.3

23.3
77.9
-14.6

23.8
81.5
-4.7

*

MEMO: Corporate equities not included above
50 Total net issues
51
Mutual fund shares
Other equities
52

10.6

6.5

1.9

-3.8

22.1

-2.9

-1.7

16.3

27.9

11.2

-17.0

15.7

-2.4
13.1

.9
5.6

-.1
1.9

.1
-3.9

5.0
17.1

7.7
-10.6

-.8
-.9

5.5
10.8

4.5
23.4

8.9
2.3

6.5
-23.5

14.5
1.2

53 Acquisitions by financial institutions
54 Other net purchases

12.5
-1.9

7.4
-.8

4.6
-2.7

10.4
-14.2

14.6
7.5

22.9
-25.8

14.2
-15.9

8.6
7.7

20.7
7.2

25.3
-14.1

20.5
-37.5

22.2
-6.5

NOTES BY LINE NUMBER.

1.
2.
6.
11.
12.
17.
25.
26.
28.
29.
30.

Line 2 of table 1.58.
Sum of lines 3 - 6 or 7-10.
Includes farm and commercial mortgages.
Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum
of lines 27, 32, and 38 less lines 39 and 45.
Includes farm and commercial mortgages.
Line 38 less lines 39 and 45.
Excludes equity issues and investment company shares. Includes line 18.
Foreign deposits at commercial banks, bank borrowings from foreign branches,
and liabilities of foreign banking agencies to foreign affiliates.
Demand deposits at commercial banks.
Excludes net investment of these reserves in corporate equities.




31. Mainly retained earnings and net miscellaneous liabilities.
32. Line 12 less line 19 plus line 26.
33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes
mortgages.
39. Mainly an offset to line 9.
46. Lines 32 plus 38, or line 12 less line 27 plus 39 and 45.
47. Line 2/line 1.
48. Line 19/line 12.
49. Sum of lines 10 and 28.
50. 52. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types quarterly, and annually
for flows and for amounts outstanding, may be obtained from Flow of Funds
Section, Division of Research and Statistics, Board of Governors of the Federal
Reserve System, Washington, D . C . 20551.

A46
2.10

Domestic Nonfinancial Statistics • October 1982
NONFINANCIAL BUSINESS ACTIVITY

Selected Measures

1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1982
1979

Measure

1980

1981
Jan.

Feb.

Mar.

Apr.

May

Juner

Aug.''

July

Sept.

1 Industrial production 1

152.5

147.0

151.0

140.7

142.9

141.7

140.2

139.2

138.7

138.8

138.1

137.3

Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials

150.0
147.2
150.8
142.2
160.5
156.4

146.7
145.3
145.4
145.2
151.9
147.6

150.6
149.5
147.9
151.5
154.4
151.6

142.9
142.8
139.6
147.2
143.4
137.2

144.6
144.1
141.8
147.3
146.3
140.4

143.7
143.3
141.5
145.9
145.2
138.5

142.9
142.6
142.1
143.4
143.7
136.2

142.3
142.2
143.6
140.4
142.6
134.3

142.1
142.1
144.8
138.4
141.9
133.5

142.5
142.4
145.9
137.6
142.9
132.9

141.4
140.8
144.4
135.8
143.6
132.9

140.9
140.3
144.4
134.6
143.4
131.8

153.6

146.7

150.4

138.5

140.9

140.1

138.7

137.9

137.7

138.2

137.7

136.9

85.7
87.4

79.1
80.0

78.5
79.9

71.1
71.4

72.2
72.9

71.6
71.8

70.8
70.5

70.2
69.4

70.0
68.8

70.1
68.4

69.6
68.3

69.1
67.6

2
3
4
5
6
7

Industry
groupings
8 Manufacturing
Capacity utilization (percent) 1 - 2
9
Manufacturing
10
Industrial materials industries
3

121.0

106.0

107.0

118.0

97.0

105.0

88.0

94.0

111.0

98.0

112.0

112.0

12
13
14
15
16
17
18
19
20
21

Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income 5
Retail sales®

136.5
113.5
108.2
105.3
149.1
309.7
289.8
249.0
301.2
281.6

137.4
110.3
104.4
99.4
152.6
342.9
317.6
264.3
332.9
303.8

138.5
110.2
103.7
98.5
155.0
383.5
349.9
288.1
370.3
330.6

137.5
105.9
100.4
93.2
154.8
396.7
359.6
286.1
385.0
326.0

137.5
105.7
100.0
92.9
154.9
399.0
362.2
289.0
386.5
334.9

137.2
104.9
99.3
92.1
155.0
399.8
361.3
286.4
387.7
333.5

136.9
104.2
98.6
91.2
154.8
402.5
362.2
286.3
391.7
337.4

137.0
104.1
98.3
90.9
155.1
405.7
365.4
288.1
392.9
347.1

136.5
102.9
97.3
89.8
154.9
407.3
366.0
288.4
393.4
336.4

136.1
102.3
96.7
89.2
154.6
411.5
367.8
288.3
401.3
341.8

135.7
101.4
96.0
88.3
154.4
412.9
368.5
287.1
402.3
338.4

135.3
101.0
95.5
87.9
154.1
n.a.
n.a.
n.a.
n.a.
341.9

22
23

Prices 7
Consumer
Producer finished goods

217.4
217.7

246.8
247.0

272.4
269.8

282.5
277.9

283.4
277.9

283.1
277.3

284.3
277.3

287.1
277.7

290.6
279.9

292.2
281.7

292.8
282.4

n.a.
n.a.

11 Construction contracts (1977 = 100)

1. The industrial production and capacity utilization series have been revised
back to January 1979.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, and Department of Commerce.
3. Index of dollar value of total construction contracts, including residential,
nonresidential, and heavy engineering, f r o m McGraw-Hill Information Systems
Company, F. W. Dodge Division.
4. Based on data in Employment
and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the A r m e d Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).

2.11

6. Based on Bureau of Census data published in Survey of Current Business.
7. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and
6, and indexes for series mentioned in notes 3 and 7 may also be found in the
Survey of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.

OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION
Seasonally adjusted
1981

1982

1981

1982

1981

1982

Series
Q4

Q1

Q2

Q3

Output (1967 = 100)
1 Manufacturing
2 Primary processing
3 Advanced processing

145.0
143.5
145.8

4 Materials
5 Durable goods
6
Metal materials
7 Nondurable goods
Textile, paper, and chemical
8
9
Textile
10
Paper
Chemical
11
12 Energy materials




Q4

Q1

Q2

Q3

Capacity (percent of 1967 output)

Q4

Q1

Q2

Q3

Utilization rate (percent)

139.8
137.1
141.6

138.1
132.3
141.2

137.6
131.5
140.7

193.9
197.5
192.0

195.2
198.6
193.5

196.4
199.5
194.9

197.7
200.4
196.2

74.8
72.7
75.9

71.6
69.1
73.2

70.3
66.3
72.5

69.6
65.6
71.7

144.0

138.7

134.7

132.5

191.5

192.6

193.7

194.6

75.2

72.0

69.6

68.1

140.2
99.5
164.5
169.4
106.8
147.0
206.2
127.9

130.9
90.9
161.0
164.5
101.3
146.1
200.0
129.8

127.1
77.0
156.8
160.5
101.8
142.0
194.0
125.5

124.6
n.a.
154.0
157.1
n.a.
n.a.
n.a.
125.1

195.3
142.1
213.1
223.9
141.6
162.8
284.4
155.8

196.4
142.3
214.6
225.6
142.1
163.8
287.3
156.5

197.3
142.4
216.1
227.3
142.4
164.6
289.6
157.0

198.3
n.a.
217.4
228.8
n.a.
n.a.
n.a.
157.6

71.8
70.1
77.2
75.7
75.4
90.3
72.5
82.1

66.7
63.9
75.0
72.9
71.3
89.2
69.6
82.9

64.4
54.1
72.6
70.6
71.5
86.3
67.0
79.9

62.9
n.a.
70.8
68.6
n.a.
n.a.
n.a.
79.3

Labor Market
2.11

A47

Continued
Previous cycle 1
High

Low

Latest cycle 2

1981

Low

Sept.

High

1982
Jan.

Mar.

Feb.

Apr.

May

June'

July'

Aug.'

Sept.

Capacity utilization rate (percent)
13 Manufacturing

88.0

69.0

87.2

74.9

78.3

71.1

72.2

71.6

70.8

70.2

70.0

70.1

69.6

69.1

14
15

93.8
85.5

68.2
69.4

90.1
86.2

71.0
77.2

78.2
78.3

68.5
72.8

70.0
73.6

68.6
73.2

67.2
72.6

66.1
72.5

65.7
72.3

65.7
72.4

65.5
71.8

65.5
71.0

16 Materials
Durable goods
17
Metal materials
18

92.6
91.5
98.3

69.4
63.6
68.6

88.8
88.4
96.0

73.8
68.2
59.6

80.0
77.3
79.1

71.4
66.2
65.8

72.9
67.4
64.7

71.8
66.4
61.1

70.5
65.0
56.2

69.4
64.2
53.9

68.8
64.0
52.2

68.4
63.7
50.8

68.3
63.1
51.4

67.6
61.8
n.a.

19
20

94.5

67.2

91.6

77.5

82.9

73.2

76.5

75.3

74.4

72.5

70.9

70.1

70.8

71.7

21
22
23

Nondurable goods
Textile, paper, and
chemical
Textile
Paper
Chemical

95.1
92.6
99.4
95.5

65.3
57.9
72.4
64.2

92.2
90.6
97.7
91.3

75.3
80.9
89.3
70.7

82.1
81.3
95.7
79.2

70.7
68.6
87.6
67.4

74.4
71.9
90.7
71.3

73.7
73.5
89.4
70.2

72.5
73.4
87.4
69.0

70.6
71.5
86.1
66.9

68.8
69.6
85.3
65.0

67.8
69.6
85.3
63.7

68.4
71.5
87.7
63.6

69.6
n.a.
n.a.
n.a.

24

Energy materials

94.6

84.8

88.3

82.7

83.0

83.7

83.2

81.8

80.2

79.9

79.8

80.1

79.6

78.3

Primary processing
Advanced p r o c e s s i n g . . . .

1. Monthly high 1973; monthly low 1975.

2.12

2. Preliminary; monthly highs December 1978 through January 1980; monthly
lows July 1980 through October 1980.

LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1982
Category

1979

1980

1981
Mar.

Apr.

May

June

July

Aug

Sept.

H O U S E H O L D SURVEY D A T A

1 Noninstitutional population 1

166,951

169,847

172,272

173,842

174,019

174,201

174,363

174,544

174,707

174,888

2 Labor force (including A r m e d Forces) 1 . . .
Civilian labor force
3

107,050
104,962

109,042
106,940

110,812
108,670

111,521
109,346

111,823
109,648

112,841
110,666

112,364
110,191

112,702
110,522

112,840
110,644

113,178
110,980

Nonagricultural industries 2
Agriculture
Unemployment
6
Number
Rate (percent of civilian labor force) .
7
8 Not in labor force

95,477
3,347

95,938
3,364

97,030
3,368

96,144
3,349

96,032
3,309

96,629
3,488

96,406
3,357

96,272
3,460

96,404
3,435

96,352
3,368

6,137
5.8
59,901

7,637
7.1
60,805

8,273
7.6
61,460

9,854
9.0
62,321

10,307
9.4
62,196

10,549
9.5
61,360

10,427
9.5
61,999

10,790
9.8
61,842

10,805
9.8
61,867

11,260
10.1
61,710

4
5

ESTABLISHMENT S U R V E Y D A T A

9 Nonagricultural payroll employment 3
10
11
12
13
14
15
16
17

Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government

89,823

90,564

91,548

90,304

90,083

90,166

89,839

89,535'

89,268 r

89,038

21,040
958
4,463
5,136
20,192
4,975
17,112
15,947

20,300
1,020
4,399
5,143
20,386
5,168
17,901
16,249

20,264
1,104
4,307
5,152
20,736
5,330
18,598
16,056

19,319
1,197
3,934
5,100
20,655
5,336
18,904
15,859

19,169
1,182
3,938
5,094
20,584
5,335
18,929
15,852

19,115
1,152
3,988
5,101
20,652
5,342
18,963
15,853

18,930
1,124
3,940
5,078
20,595
5,352
18,988
15,832

18,813'
1,100'
3,927'
5,044'
20,615'
5,359'
19,042'
15,635'

18,662'
1,082'
3,895'
5,024'
20,544'
5,361'
19,042'
15,658'

18,576
1,080
3,890
5,023
20,488
5,367
19,054
15,560

1. Persons 16 years of age and over. Monthly figures, which are based on sample
data, relate to the calendar week that contains the 12th day; annual data are
averages of monthly figures. By definition, seasonality does not exist in population
figures. Based on data f r o m Employment and Earnings (U.S. Department of Labor).
2. Includes self-employed, unpaid family, and domestic service workers.




3. Data include all full- and part-time employees who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family workers, and members of the A r m e d Forces. Data are adjusted to the March 1979
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).

A48
2.13

Domestic Nonfinancial Statistics • October 1982
INDUSTRIAL PRODUCTION

Indexes and Gross Value

Monthly data are seasonally adjusted.

Grouping

1967
proportion

1981
average

. 1981
Sept.

Oct.

1982

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.?

Sept/

Index (1967 = 100)
MAJOR MARKET

1 Total index
2 Products
3
Final products
4
Consumer goods
5
Equipment
6
Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9
Automotive products
10
Autos and utility vehicles
11
Autos
12
Auto parts and allied g o o d s . . .
13
Home goods
14
Appliances, A/C, and TV . . . .
15
Appliances and TV
16
Carpeting and furniture
17
Miscellaneous home g o o d s . . . .

100.00

151.0

151.6

149.1

146.3

143.4

140.7

142.9

141.7

140.2

139.2

138.7

138.8

138.1

137.3

60.71
47.82
27.68
20.14
12.89
39.29

150.6
149.5
147.9
151.8
154.4
151.6

151.0
150.0
147.8
152.9
154.6
152.5

149.4
148.9
146.5
152.1
151.4
148.5

147.5
147.2
144.0
151.5
148.7
144.6

146.2
146.3
142.0
152.1
145.9
139.0

142.9
142.8
139.6
147.2
143.4
137.2

144.6
144.1
141.8
147.3
146.3
140.4

143.7
143.3
141.5
145.9
145.2
138.5

142.9
142.6
142.1
143.4
143.7
136.2

142.3
142.2
143.6
140.4
142.6
134.3

142.1
142.1
144.8
138.4
141.9
133.5

142.5
142.4
145.9
137.6
142.9
132.9

141.4
140.8
144.4
135.8
143.6
132.9

140.9
140.3
144.4
134.6
143.4
131.8

7.89
2.83
2.03
1.90

140.5
137.9

136.3
132.8
101.7
92.5
211.8
138.2
116.7
118.7
152.6
143.9

129.7
121.7
88.9
81.1
205.0
134.1
107.7
108.7
146.9
143.2

123.2
119.2
87.5
78.1
199.7
125.4
85.7
86.6
144.4
139.1

120.1
109.2
71.6
61.3
204.4
126.3
100.6
101.6
137.9
135.4

125.9
117.5
82.0
70.5
207.8
130.6
103.5
104.1
147.8
138.1

128.1
125.0
93.6
79.8
204.5
129.9
97.0
97.4
151.3
138.9

130.7
129.9
100.5
87.2
204.6
131.1
102.7
103.1
151.8
138.0

132.6
138.9
111.8
96.1
207.6
129.1
100.5
101.5
145.9
137.7

134.6
143.0
117.1
101.9
208.6
129.9
106.4
108.8
149.0
134.9

137.2
149.4
127.7
114.6
204.4
130.3
102.7
106.1
150.9
136.8

132.8
136.7
109.6
96.1
205.2
130.6
103.9
107.9
150.3
137.0

132.2
135.0
106.9
96.3
206.2
130.7
107.2

148.1

146.6

147.9

148.8

149.4

149.1

149.2

158.3
148.1
170.0
218.3
128.7
151.9
174.5

159.0
149.9
169.5
216.6
126.7
153.6
173.7

159.9
150.9
170.4
219.8
126.7
152.8
171.1

160.3'
151.2
170.8
221.3
128.1
151.4
167.7

160.1

160.2

171.5
224.7
129.0
149.2

171.6

5.06
1.40
1.33
1.07
2.59

103.4
205.6
142.0
119.6
121.2
158.0
147.4

140.4
139.1
110.0
103.3
212.9
141.1
119.0
121.4
158.6
145.8

18 Nondurable consumer goods
19
Clothing
20
Consumer staples
21
Consumer foods and tobacco .
22
Nonfood staples
23
Consumer chemical products
24
Consumer paper products . .
25
Consumer energy products .
26
Residential utilities

19.79
4.29
15.50
8.33
7.17
2.63
1.92
2.62
1.45

150.9
119.8
159.5
150.3
170.0
223.1
127.9
147.7
166.3

150.8
119.3
159.5
149.5
171.1
227.5
127.7
146.4
162.8

150.5
117.8
159.6
150.7
169.9
223.0
126.9
148.2
166.2

149.7
116.1
159.0
150.4
169.1
220.3
125.7
149.4
167.4

149.5
113.8
159.4
150.9
169.3
220.1
127.2
149.1
167.5

147.4
106.0
158.9
150.0
169.1
220.1
127.0
148.9
172.3

159.2
151.1
168.7
218.2
130.2
147.2
171.6

146.8
158.1
149.6
168.0
217.8
127.8
147.6
170.4
169.0

Equipment
27 Business
28
Industrial
29
Building and mining
30
Manufacturing
31
Power

12.63
6.77
1.44
3.85
1.47

181.1
166.4
286.2
127.9
149.7

182.7
168.9
293.6
129.3
150.4

180.5
166.9
295.6
125.7
148.4

179.0
165.1
293.8
123.6
147.1

179.0
164.0
294.6
122.0
145.5

172.2
158.1
289.0
116.9
137.4

171.6
155.9
274.9
116.8
141.1

151.2
256.9
116.3
139.0
189.5

164.9
145.9
242.2
114.0
134.8

159.9
138.9
224.4
109.7
131.5

156.7
134.0
209.0
107.5
129.9

154.6
131.0
200.4
105.8
128.6

151.6
127.6
190.5
103.8
128.0

149.2
125.0
183.0
102.2
127.9

5.86
3.26
1.93
67

198.0
258.7
125.4
112.0

198.5
264.2
121.0
102.1

196.2
259.8
120.6
104.6

195.0
260.6
116.6
101.7

196.3
262.9
117.5
98.9

188.5
256.1
109.0
88.4

189.9
256.4
110.4
95.1

257.8
110.5
84.9
107.0

186.9
253.1
110.9
83.5

184.1
247.7
110.9
85.8

183.0
247.5
108.3
84.1

182.0
248.4
106.3
76.9

179.3
246.7
102.1
74.2

177.1
245.8
97.6

36 Defense and space

7.51

102.7

103.0

104.5

105.3

107.0

105.2

106.5

125.6

107.2

107.7

107.6

109.1

109.3

110.2

Intermediate products
37 Construction supplies
38 Business supplies
39
Commercial energy p r o d u c t s . . . .

6.42
6.47
1.14

141.9
166.7
176.4

139.7
169.4
174.2

135.2
167.5
174.3

130.1
167.1
177.0

127.0
164.6
177.3

124.2
162.4
181.7

127.5
165.1
184.1

164.6
184.5
130.7

123.6
163.7
183.5

122.2
162.8
180.3

123.1
160.6
178.3

124.2
161.5
178.1

125.0
162.1
178.6

125.2

20.35
4.58
5.44
10.34
5.57

149.1
114.5
191.2
142.3
112.0

150.4
114.5
192.7
144.1
113.1

145.6
107.6
190.3
138.9
106.5

141.0
102.8
188.7
132.9
101.6

134.0
92.9
183.3
126.1
94.8

129.7
86.9
177.2
123.6
94.5

132.4
92.2
180.1
125.1
94.3

130.7
94.1
177.5
122.2
88.6

128.1
94.7
173.9
118.8
82.3

126.6
98.9
170.0
116.1
79.4

126.6
103.1
168.3
115.1
77.4

126.0
103.8
166.5
114.5
75.8

125.2
101.0
164.4
115.3
76.4

122.7
98.0
159.1
114.4

10.47

174.6

175.5

170.6

164.7

158.3

156.8

164.2

162.0

160.3

156.6

153.5

152.0

154.0

156.1

7.62
1.85
1.62
4.15
1.70
1.14

181.4
113.0
150.6
224.0
169.3
137.4

182.5
114.9
155.1
223.4
170.9
136.2

176.4
111.6
149.6
215.9
166.7
137.1

169.9
106.9
150.2
205.8
163.5
131.9

161.9
102.0
141.2
196.8
161.9
128.6

159.1
97.3
143.2
193.0
162.4
132.4

167.9
102.2
148.5
204.9
166.7
136.0

166.6
104.5
146.7
202.2
161.3
132.4

164.4
104.5
143.5
199.3
159.8
134.2

160.4
101.8
141.8
193.9
157.2
130.6

156.7
99.1
140.7
188.7
158.5
124.8

155.0
99.3
140.9
185.4
157.2
124.7

156.6
102.1
145.0
185.5
161.6
124.6

159.6

52 Energy materials
53
Primary energy
54
Converted fuel materials

129.0
115.0
145.9

128.9
117.4
142.9

128.3
116.4
142.8

128.1
115.6
143.4

127.4
115.9
141.4

130.9
119.2
145.1

130.3
119.5
143.4

128.2
119.2
139.1

125.8
117.3
136.1

125.4
116.9
135.7

125.4
116.6
136.0

126.1
117.5
136.6

125.5
116.4
136.5

123.6

4.65
3.82

Supplementary groups
55 Home goods and clothing
56 Energy, total
57
Products
58
Materials

9.35
12.23
3.76

131.8
137.4
156.4
129.0

131.1
136.8
154.8
128.9

128.8
136.9
156.1
128.3

125.9
137.2
157.8
128.1

120.1
136.7
157.7
127.4

117.0
139.5
158.8
130.9

120.1
138.9
158.4
130.3

118.9
137.6
158.8
128.2

118.9
136.7
161.5
125.8

119.5
136.5
161.7
125.4

120.2
136.2
160.5
125.4

121.0
136.4
159.5
126.1

120.9
135.5
158.1
125.5

120.9
134.5

32
33
34
35

Commercial transit, farm
Commercial
Transit
Farm

Materials
40 Durable goods materials
41
Durable consumer parts
42
Equipment parts
43
Durable materials n.e.c
44
Basic metal materials
45 Nondurable goods materials
46
Textile, paper, and chemical
materials
47
Textile materials
48
Paper materials
49
Chemical materials
50
Containers, nondurable
51
Nondurable materials n.e.c




80

111.2

135.6

123.6

Output
2.13

A49

Continued
1967

Grouping

SIC
code

proportion

1981

1982

1981

avg.
Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Index (1967

100)

May

June

July

Aug.P S e p t . '

M A J O R INDUSTRY

1 Mining and utilities
2
Mining
3
Utilities
4
Electric
5 Manufacturing
6
Nondurable
7
Durable

12.05
6.36
5.69
3.88
87.95
35.97
51.98

155.0
142.2
169.1
190.9
150.4
164.8
140.5

155.8
145.0
167.8
188.3
151.1
165.9
140.9

156.1
145.3
168.1
189.4
148.0
162.8
137.8

155.4
143.3
168.9
190.9
145.0
160.3
134.4

154.7
142.6
168.2
190.2
142.0
157.4
131.3

157.4
144.5
171.8
195.2
138.5
155.1
127.1

155.6
142.4
170.4
192.5
140.9
157.8
129.3

153.1
138.1
170.0
191.7
140.1
157.3
128.2

151.6
134.1
171.0
193.1
138.7
156.1
126.7

148.8
128.9
170.9
193.4
137.9
155.0
126.1

145.2
123.5
169.4
191.6
137.7
155.3
125.5

142.7
120.3
167.6
189.1
138.2
155.9
125.9

141.9
118.2
168.4
190.3
137.7
156.9
124.3

140.8
115.7
168.9
190.9
136.9
157.4
122.8

10
11.12
13
14

.51
.69
4.40
.75

123.1
141.3
146.8
129.4

121.5
161.9
148.8
123.4

119.8
166.9
148.9
122.0

115.4
160.8
148.4
116.7

110.9
145.5
150.5
115.7

121.3
147.9
151.5
115.8

120.8
156.0
146.6
120.5

109.9
155.6
141.4
121.6

108.8
146.2
137.7
119.6

90.0
149.2
132.7
114.6

71.8
144.4
129.1
106.6

58.1
140.3
127.3
103.8

58.0
139.9
123.9
105.8

127.8
121.8

126.7

8
9
10
11

Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals

12
13
14
15
16

Nondurable
manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products

20
21
22
23
26

8.75
.67
2.68
3.31
3.21

152.1
122.2
135.7
120.4
155.0

150.7
•122.4
136.3
122.5
158.6

151.4
124.3
132.5
117.8
153.3

153.0
119.6
126.1
113.8
152.6

152.8
112.6
122.8
114.1
146.6

151.1
112.7
120.0

151.7
126.7
125.8

150.8
126.7
126.0

149.7
116.1
126.3

150.5
118.6
123.5

151.0
123.6
123.7

151.6
119.9
124.5

148.3

151.5

150.6

149.8

146.5

146.8

146.9

150.3

152.0

17
18
19
20
21

Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products

27
28
29
30
31

4.72
7.74
1.79
2.24
.86

144.2
215.6
129.7
274.0
69.3

145.9
216.3
129.1
282.2
69.7

145.6
208.8
128.3
276.0
71.2

143.4
204.6
128.0
264.1
70.8

145.3
199.8
128.3
247.3
65.6

145.6
196.7
123.3
244.7
63.1

146.4
201.3
119.5
251.8
64.0

145.9
200.3
121.3
253.4
61.2

144.2
198.6
120.8
255.1
60.6

143.8
193.6
122.2
257.0
61.1

142.6
193.2
124.3
258.9
62.3

144.3
194.0
124.7
256.8
62.9

145.6
195.9
119.7
258.7
62.4

146.0

22
23
24
25

Durable
manufactures
Ordnance, private and government .
Lumber and products
Furniture and fixtures
Clay, glass, stone products

19.91
24
25
32

3.64
1.64
1.37
2.74

81.1
119.1
157.2
147.9

82.3
113.2
159.9
147.3

82.5
109.6
157.2
143.4

84.3
104.7
153.7
135.9

85.5
104.8
149.4
131.5

84.1
99.2
144.3
128.5

83.8
104.9
148.4
135.0

83.8
103.5
150.2
131.5

85.2
106.2
151.8
127.0

86.3
110.6
151.1
125.0

86.5
112.2
152.5
126.1

86.7
116.9
154.0
126.9

87.5
115.9
155.2
128.1

88.5

26
27
28
29
30

Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery

33
331.2
34
35
36

6.57
4.21
5.93
9.15
8.05

107.9
99.8
136.4
171.2
178.4

108.6
99.2
136.8
173.9
180.0

102.3
92.2
133.8
169.7
179.6

96.6
87.2
130.2
167.9
175.7

89.6
79.2
126.1
167.4
170.7

89.7
79.6
120.7
160.9
168.2

88.5
78.5
121.4
160.0
172.9

83.0
73.0
121.1
157.3
172.6

76.4
65.1
119.1
153.7
172.2

75.2
62.4
115.8
150.0
170.9

72.8
58.0
115.0
147.4
170.8

72.9
58.1
115.6
147.2
170.3

72.2
57.2
114.0
145.0
169.8

112.0
142.3
168.0

37
371

9.27
4.50

116.1
122.3

114.2
120.4

110.6
113.8

106.1
105.5

103.7
100.4

96.6
90.4

102.0
98.6

104.4
105.6

105.9
110.7

110.0
119.8

111.6
124.0

112.7
127.2

107.7
117.7

105.3
114.8

372-9
38
39

4.77
2.11
1.51

110.2
170.3
154.7

108.5
169.7
154.2

107.5
168.6
151.5

106.8
167.1
151.7

106.8
166.8
147.9

102.4
162.2
144.9

105.3
164.5
144.5

103.2
163.0
145.3

101.3
162.8
144.6

100.8
163.8
141.7

99.9
164.8
136.8

99.0
165.4
134.2

98.2
165.0
132.7

96.3
162.5
131.1

31 Transportation equipment
32
Motor vehicles and parts
33
Aerospace and miscellaneous transportation equipment
34 Instruments
35 Miscellaneous manufactures

121.9

71.1

Gross value (billions of 1972 dollars, annual rates)
MAJOR MARKET

36 Products, total.

507.4

612.3

611.5

605.0

597.6

592.8

577.4

588.1

586.8

582.1

586 1

584.1

583.7

37 Final
38
Consumer goods .
39
Equipment
40 Intermediate

390.9
277.5
113.4
116.6

474.1
318.0
156.1
138.2

473.0
317.7
155.3
138.4

470.1
314.3
155.8
134.9

465.2
310.5
154.7
132.4

462.3
307.2
155.1
130.5

448.8
298.9
149.9
128.7

457.1
306.3
150.8
131.1

456.6
306.9
149.7
130.2

453.5
306.7
146.8
128.6

458.3
312.3
146.0
127.8

456.7
313.1
143.5
127.4

455.5
313.7
141.8
128.2

1. 1972 dollar value.
NOTE. Published groupings include some series and subtotals not shown separately. For description and historical data, see Industrial Production—1976
Revision
(Board of Governors of the Federal Reserve System: Washington, D . C . ) , December 1977.




451.2
312.0
139.3
128.5

448.9
310.8
138.1
128.9

A50
2.14

Domestic Nonfinancial Statistics • October 1982
HOUSING A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1982
1979

Item

1980

1981
Jan.

Feb.

Mar.

Apr.

May'

June'

July'

Aug.

Private residential real estate activity (thousands of units)

NEW UNITS

1 Permits authorized
2
1-family
3
2-or-more-family

1,552
981
570

1,191
710
480

986
454
421

803
450
353

792
436
356

851
460
391

879
450
429

944
488
456

929
516
413

1,062
500
562

886
494
392

4 Started
5
1-family
6
2-or-more-family

1,745
1,194
551

1,292
852
440

1,084
705
379

885
592
293

945
568
377

931
621
310

882
566
316

1,066
631
435

908
621
287

1,195
625
570

1,002
610
397

7 U n d e r construction, end of period 1
8
1-family
9
2-or-more-family

1,140
639
501

896
515
382

682
382
301

684
394
291

688
400
288

682
399
283

673
393
280

664
382
282

662
385
277

678
381
297

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

1,855
1,286
569

1,502
957
545

1,266
818
447

1,063
640
423

920
545
375

926
585
341

962
596
366

1,138
684
454

935
580
355

991
673
318

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

277

222

241

211

251

252

255

246

257

246

n.a.

709
402

545
342

436
278

399
275

376
274

380
269

335
264

395
259

372
253

352
250

359
247

62.8

64.7

68.8

66.2

65.7

67.2

70.2

69.3

69.6

71.8

73.2

71.9

76.4

83.1

78.0

80.7

83.7

85.0

86.5

85.5

87.7

92.3

3,701

2,881

2,350

1,860

1,950

1,990

1,910

1,900

1,980

1,890

1,790

55.5
64.0

62.1
72.7

66.1
78.0

66.4
79.8

66.9
78.8

67.0
79.1

67.1
79.4

67.8
80.6

69.4
82.3

69.2
82.0

69.3
82.4

10 Completed
11
1-family
12
2-or-more-family
13 Mobile homes shipped
Merchant builder activity in I-family
14 Number sold
15 N u m b e r for sale, end of period 1
Price (thousands
Median
16
Units sold
Average
17
Units sold

of

units

dollars)2

EXISTING U N I T S ( 1 - f a m i l y )

18 Number sold
Price of units sold (thousands
19 Median
20 Average

of

dollars)2

Value of new construction 3 (millions of dollars)

CONSTRUCTION

21 Total put in place

230,412

230,748

238,198

225,086

222,615

224,583

226,095 r

228,745

231,589

228,740

232,316

22 Private
23
Residential
24
Nonresidential, total
Buildings
25
Industrial
26
Commercial
27
Other
28
Public utilities and other

181,622
99,028
82,594

175,701
87,261
88,440

185,221
86,566
98,655

175,493
73,737
101,756

173,026
69,161
103,865

173,605
70,040
103,565

175,142'
72,300'
102,842'

179,941
75,453
104,488

182,651
75,251
107,400

180,301
76,200
104,101

182,087
77,306
104,781

14,953
24,919
7,427
35,295

13,839
29,940
8,654
36,007

17,031
34,243
9,543
37,838

17,113
36,161
9,558
38,924

17,211
36,841
10,002
39,811

16,641
38,362
9,880
38,682

15,882
38,437
9,897
38,626'

17,118
36,818
10,427
40,125

18,424
38,048
10,579
40,349

16,404
37,512
10,130
40,055

17,377
37,249
10,501
39,654

48,790
1,648
11,997
4,586
30,559

55,047
1,880
13,808
5,089
34,270

52,977
1,966
13,304
5,225
32,482

49,593
2,092
11,479
5,232
30,790

49,589
1,459
12,422
5,301
30,407

50,978
2,317
13,307
5,056
30,298

50,953'
1,706'
12,113
5,493'
31,641'

48,804
2,140
11,655
5,223
29,786

48,938
1,901
13,073
5,051
28,913

48,439
1,891
14,119
5,060
27,369

50,229
2,079
13,424
5,078
29,648

29 Public
30
Military
Highway
31
32
Conservation and development
33
Other

1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly comparable
with data in prior periods 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 Bureau in July 1976.




NOTE. Census Bureau estimates for all series except (a) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing Institute
and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing
units, which are published by the National Association of Realtors. All back and
current figures are available f r o m originating agency. Permit authorizations are
those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978.

Prices
2.15

A51

C O N S U M E R A N D P R O D U C E R PRICES
Percentage changes based on seasonally adjusted data, except as noted
12 months to

3 months (at annual rate) to

Item

1981
1981
Aug.

1 month to

1982

Index
level
Aug.
1982
(1967
= 100)'

1982

1982
Aug.
Sept.

Dec.

Mar.

June

Apr.

May

June

July

Aug.

CONSUMER PRICES2

1 All items

10.9

5.9

12.8

5.4

1.0

9.3

.2

1.0

1.0

.6

.3

292.8

2 Commodities
Food
3
4
Commodities less food
5
Durable
6
Nondurable
7 Services
8
Rent
9
Services less rent

8.2
7.2
8.7
8.7
8.7
14.6
8.9
15.4

4.0
3.6
4.1
5.9
2.0
8.6
7.5
8.7

8.5
7.7
9.0
10.8
4.6
19.2
10.2
20.4

3.6
1.7
4.3
1.2
3.8
7.8
9.0
7.6

-.8
3.9
-2.6
3.5
-4.9
3.5
5.9
3.3

7.8
7.3
7.9
14.1
1.9
11.3
5.6
11.9

-.3
.3
-.5
.6
-2.2
.9
.2
1.0

.9
.8
.9
1.4
.7
.9
.8
1.0

1.3
.6
1.5
1.3
2.0
.8
.4
.9

.6
-.1
.8
.3
1.1
.6
1.0
.5

.0
-.3
.2
.3
.2
.6
.5
.6

266.4
287.4
253.8
244.6
263.6
338.9
226.0
360.5

11.6
11.5
14.7

6.4
7.1
6.7

13.9
15.0
21.5

6.2
5.6
.3

.9
3.0
-2.4

9.7
10.6
19.8

.2
.8
1.3

1.0
.9
1.8

1.2
.9
1.4

.7
.6
.4

.4
.5
.4

292.5
279.8
385.9

8.0
7.4
4.0
8.9
9.9
10.0

4.0
3.6
1.4
4.5
5.9
.6

3.4
2.8
1.6
3.2
5.7
5.2

5.5
4.5
-3.9
7.8
9.7
2.7

.9'
.6'
6.1'
-1.4'
2.4'
-1.8'

4.1'
3.5'
11.5'
.4'
6.2'
-1.4'

.1
.0
1.7'
-.7
.3'
-.8

.1'
.3'
.6'
.6'
.4
.1'

.6
.6
-1.5
1.5
.5
.5

.6
.6
.1
.8
.7
-.1

282.4
282.7
259.8
290.1
281.4
316.3

20.8
-5.4

-2.9
-4.2

1.1
-18.2

-6.0
-25.5

-18.0'
23.3

8.5'
24.3

-.3'
3.5

1.8'
2.7

1.0
-2.7

-.1
-1.0

471.1
250.7

Other groupings
11) All items less food
11 All items less food and energy
12 Homeownership
P R O D U C E R PRICES

13 Finished goods
14
Consumer
15
Foods
16
Excluding foods
17
Capital equipment
18 Intermediate materials 3
Crude materials
19
Nonfood
20
Food

1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers.




1.0
1.1'
.5
1.4
.8
.3
.6
-.6

3. Excludes intermediate materials tor food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.

A52

Domestic Nonfinancial Statistics • October 1982

2.16

GROSS NATIONAL PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1981
Account

1979

1980

1982

1981
Q2

Q3

Q4

Q1

Q2 r

GROSS NATIONAL PRODUCT

2,417.8

2,633.1

2,937.7

2,901.8

2,980.9

3,003.2

2,995.5

3,045.2

1.507.2
213.4
600.0
693.7

1,667.2
214.3
670.4
782.5

1,843.2
234.6
734.5
874.1

1,819.4
230.4
729.6
859.4

1,868.8
241.2
741.3
886.3

1,884.5
229.6
746.5
908.3

1,919.4
237.9
749.1
932.4

1,947.8
240.7
755.0
952.1

423.0
408.8
290.2
98.3
191.9
118.6
114.0

402.4
412.4
309.2
110.5
198.6
103.2
98.3

471.5
451.1
346.1
129.7
216.4
105.0
99.7

475.5
450.9
341.3
127.0
214.3
109.5
104.7

486.0
454.2
353.0
132.7
220.2
101.2
95.6

468.9
455.7
360.2
139.6
220.6
95.5
89.4

414.8
450.4
357.0
141.4
215.6
93.4
87.9

431.5
447.7
352.2
143.6
208.6
95.5
89.6

14.3
8.6

-10.0
-5.7

20.5
15.0

24.6
19.3

31.8
24.6

13.2
6.0

-35.6
-36.0

-16.2
-15.0

15 Net exports of goods and services
16
Exports
17
Imports

13.2
281.4
268.1

25.2
339.2
314.0

26.1
367.3
341.3

23.7
368.9
345.1

25.9
367.2
341.3

23.5
367.9
344.4

31.3
359.9
328.6

34.9
365.8
330.9

18 Government purchases of goods and services
19
Federal
20
State and local

474.4
168.3
306.0

538.4
197.2
341.2

596.9
229.0
368.0

583.2
218.2
365.0

600.2
230.0
370.1

626.3
250.5
375.7

630.1
249.7
380.4

630.9
244.3
386.6

2,403.5
1,065.6
464.8
600.8
1,089.7
262.5

2,643.1
1,141.9
477.3
664.6
1,225.6
265.7

2,917.3
1,289.2
528.1
761.1
1,364.3
284.2

2,877.2
1,276.0
538.2
737.8
1,340.2
285.6

2,949.1
1,317.0
547.3
769.7
1,382.1
281.9

2,989.9
1,298.5
504.9
793.6
1,421.5
283.3

3,031.1
1,269.4
482.4
787.0
1,444.4
281.7

3,061.4
1,283.1
505.9
777.2
1,476.7
285.3

14.3
10.5
3.8

-10.0
-5.2
-4.8

20.5
8.7
11.8

24.6
18.5
6.1

31.8
19.8
12.0

13.2
-5.6
18.9

-35.6
-30.9
-4.8

-16.2
-6.6
-9.6

1,479.4

1,474.0

1,502.6

1,502.2

1,510.4

1,490.1

1,470.7

1,478.4

31 Total

1,966.7

2,117.1

2,352.5

2,324.4

2,387.3

2,404.5

2,396.9

2,425.2

32 Compensation of employees
33
Wages and salaries
34
Government and government enterprises
35
Other
36
Supplement to wages and salaries
37
Employer contributions for social insurance
38
Other labor income

1.458.1
1,237.4
236.2
1.001.4
220.7
105.8
114.9

1.598.6
1.356.1
260.2
1,095.9
242.5
115.3
127.3

1.767.6
1,494.0
283.1
1.210.9
273.6
133.2
140.4

1,750.0
1,479.4
279.8
1,199.6
270.6
132.1
138.4

1.789.1
1,512.6
284.0
1,228.6
276.5
134.3
142.2

1,813.4
1,531.1
292.3
1,238.8
282.3
136.5
145.8

1,830.8
1,541.5
296.3
1.245.2
289.3
140.2
149.1

1,850.7
1,556.6
300.0
1,256.6
294.1
141.7
152.5

132.1
100.2
31.9

116.3
96.9
19.4

124.7
100.7
24.0

123.8
101.2
22.5

127.5
100.4
27.1

124.1
99.5
24.6

116.4
98.6
17.8

117.3
99.9
17.4

1 Total
2
3
4
5

By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services

6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
Nonfarm
13
14

Change in business inventories
Nonfarm

By major type of
21 Final sales, total
22
Goods
23
Durable
24
Nondurable
25
Services
26
Structures

product

27 Change in business inventories
28
Durable goods
29
Nondurable goods
30 MEMO: Total GNP in 1972 dollars
N A T I O N A L INCOME

39 Proprietors' income 1
40
Business and professional 1
41
Farm 1
42 Rental income of persons 2
43 Corporate profits'
44
Profits before tax 3
45
Inventory valuation adjustment
46
Capital consumption adjustment
47 Net interest

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.

27.9

32.9

33.9

34.0

33.6

33.6

33.9

34.2

194.8
252.7
-43.1
-14.8

181.6
242.5
-43.0
-17.8

190.6
232.1
-24.6
-16.8

185.1
225.4
-22.8
-17.5

193.1
233.3
-23.0
-17.1

183.9
216.5
-17.1
-15.5

157.1
171.6
-4.4
-10.1

155.4
171.7
-9.4
-6.9

153.8

187.7

235.7

231.6

244.0

249.5

258.7

267.5

3. For after-tax profits, dividends, and the like, see table 1.49.
SOURCE. Survey of Current Business (Department of Commerce).

End Tape 06292STB10




National Income Accounts
2.17

A53

PERSONAL INCOME A N D SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1981
Account

1979

1980

1982

1981
Q2

03

Q4

Q2r

Q1

PERSONAL INCOME AND SAVING

1 Total personal income

1,943.8

2,160.2

2,404.1

2,380.6

2,458.2

2,494.6

2,510.5

2,552.7

2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises

1.237.6
438.4
333.9
303.4
259.7
236.2

1,356.1
468.0
354.4
330.5
297.5
260.2

1,493.9
510.8
386.4
361.4
338.6
283.1

1,479.4
507.2
386.9
358.7
333.7
279.8

1,512.3
519.3
392.9
366.5
342.8
283.8

1,531.2
517.7
388.7
368.3
352.8
292.4

1,541.6
514.3
385.1
371.4
359.5
296.5

1,556.6
513.6
385.6
375.4
367.6
300.0

114.9
132.1
100.2
31.9
27.9
50.8
209.6
250.3
131.8

127.3
116.3
96.9
19.4
32.9
55.9
256.3
297.2
154.2

140.4
124.7
100.7
24.0
33.9
62.5
308.5
336.3
182.0

138.4
123.8
101.2
22.5
34.0
61.5
320.6
327.0
173.7

142.2
127.5
100.4
27.1
33.6
64.1
339.6
344.8
190.6

145.8
124.1
99.5
24.6
33.6
65.2
351.0
350.7
192.8

149.1
116.4
98.6
17.8
33.9
65.8
359.7
354.6
194.7

152.5
117.3
99.S
17.4
34.2
66.1
372.0
365.2
197.5

8
9
10
11
12
13
14
15
16
17

Other labor income
Proprietors' income 1
Business and professional 1
Farm 1
Rental income of persons 2
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits
LESS: Personal contributions for social insurance

18 EQUALS: Personal income
19

LESS: Personal tax and nontax payments

81.1

88.7

104.9

104.1

106.1

107.0

110.6

111.4

1.943.8

2,160.2

2,404.1

2,380.6

2,458.2

2,494.6

2,510.5

2,552.7

301.0

336.3

386.7

384.2

398.1

393.2

393.4

401.2

20 EQUALS: Disposable personal income

1,650.2

1,824.1

2,029.2

1,996.5

2,060.0

2,101.4

2,117.1

2,151.5

21

LESS: Personal outlays

1,553.5

1.717.9

1,898.9

1,874.5

1,925.7

1,942.7

1,977.9

2,007.2

22 EQUALS: Personal saving

96.7

106.2

130.2

122.0

134.4

158.6

139.1

144.3

6,572
4,120
4,512
5.9

6,474
4,087
4,472
5.8

6,536
4,122
4,538
6.4

6,544
4,115
4,516
6.1

6,563
4,134
4,557
6.5

6,458
4,088
4,559
7.5

6,360
4,104
4,527
6.6

6,380
4,121
4,552
6.7

MEMO:

Per capita (1972 dollars)
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (percent)
G R O S S SAVING

27 Gross saving
28
29
30
31

Gross private saving
Personal saving
Undistributed corporate profits'
Corporate inventory valuation adjustment

Capital consumption
allowances
32 Corporate
33 Noncorporate
34 Wage accruals less disbursements
35 Government surplus, or deficit ( - ) , national income and
product accounts
Federal
State and local

36
37

422.8

406.3

477.5

482.4

490.0

476.3

428.8

441.5

407.3
96.7
54.5
-43.1

438.3
106.2
38.9
-43.0

504.7
130.2
44.4
-24.6

488.9
122.0
42.0
-22.8

513.4
134.4
43.9
-23.0

547.7
158.6
44.3
-17.1

520.3
139.1
32.5
-4.4

529.0
144.3
30.7
-9.4

157.5
98.6
.0

181.2
112.0
.0

206.2
123.9
.0

202.9
122.1
.0

209.7
125.5
.0

216.0
128.7
.0

218.9
129.8
.0

223.4
130.5
.0

14.3
-16.1
30.4

-33.2
-61.4
28.2

-28.2
-60.0
31.7

-7.6
-40.5
32.9

-24.5
-58.0
33.5

-72.5
-101.7
29.1

-90.7
-118.4
27.7

-87.5
-119.6
32.1

1.1

1.2

1.1

1.1

1.1

1.1

.0

.0

39 Gross investment

421.2

410.1

475.6

477.8

489.1

469.0

421.3

442.3

40 Gross private domestic
41 Net foreign

423.0
-1.8

402.4
7.8

471.5
4.1

475.5
2.3

486.0
3.1

468.9
0.1

414.8
6.5

431.5
10.8

42 Statistical discrepancy

-1.5

3.9

-1.9

-4.6

-0.8

-7.2

-7.5

.8

38 Capital grants received by the United States, net

1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.




SOURCE. Survey of Current Business (Department of Commerce).

A54
3.10

International Statistics • October 1982
U.S. INTERNATIONAL TRANSACTIONS

Summary

Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
1981
Item credits or debits

1979

1980

1982

1981
Q2

Q3

Q1r

Q4

Q2 p

-466

1,520

4,471

1,399
1,975

751
-1,834

-927
1,293

1,088
742

2,062
2,680

-27,346
184,473
-211,819
-2,035
31,215
3,262

-25,338
224,237
-249,575
-2,472
29,910
6,203

-27,889
236,254
-264,143
-1,541
33,037
7,472

-6,547
60,284
-66,831
-587
8,201
1,842

-7,845
57,694
-65,539
8,1^3
2,160

-9,185
57,593
-66,778
-528
8,529
2,127

-5,873
55,780
-61,653
167
6,861
1,981

-5,784
55,094
-60,878
371
7,672
1,535

-2,011
-3,549

-2,101
-4,681

-2,104
-4,504

-524
-986

-558
-1,250

-562
-1,308

-575
-1,473

-662
-1,070

11 Change in U.S. government assets, other than official reserve assets, net (increase, - )

-3,743

-5,126

-5,137

-1,518

-1,257

-987

-904

-1,559

12 Change in U.S. official reserve assets (increase, - )
13
Gold
14
Special drawing rights (SDRs)
15
Reserve position in International Monetary Fund
16
Foreign currencies

-1,133
-65
-1,136
-189
257

-8,155
0
-16
-1,667
-6,472

-5,175
0
-1,823
-2,491
-861

-905
0
-23
-780
-102

-4
0
-225
-647
868

262
0
-134
-358
754

-1,089
0
-400
-547
-142

-1,132
0
-241
-814
-77

17 Change in U.S. private assets abroad (increase, - ) 3
18
Bank-reported claims
19
Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net 3

-59,469
-26,213
-3,307
-4,726
-25,222

-72,746
-46,838
-3,146
-3,524
-19,238

-98,982
-84,531
-331
-5,429
-8,691

-19,143
-14,998
2,470
-1,511
-5,104

-15,996
-15,254
855
-618
-979

-46,952
-42,645
-508
-2,843
-956

-29,208
-32,708
4,112
-531
-81

-31,924
-33,866
n.a.
-409
2,351

22 Change in foreign official assets in the United States
(increase, + )
23
U.S. Treasury securities
24
Other U.S. government obligations
25
Other U.S. government liabilities 4
26
Other U.S. liabilities reported by U.S. banks
27
Other foreign official assets 5

-13,697
-22,435
463
-73
7.213
1,135

15,442
9,708
2,187
561
-159
3,145

4,785
4,983
1,289
-69
-4,083
2,665

-2,860
-2,063
536
48
-2,028
647

-5,835
-4,635
545
-337
-2,382
974

8,119
4,439
-246
275
3,436
215

-3,122
-1,344
-296
-182
-1,516
216

1,935
-2,087
258
361
3,367
36

28 Change in foreign private assets in the United States
(increase, +) 2 f
29
U.S. bank-reported liabilities
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
33
Foreign direct investments in the United States, net 3 . . . .

52,157
32,607
1,362
4,960
1,351
11,877

39,042
10,743
6,530
2,645
5,457
13,666

73,136
41,262
532
2,932
7,109
21,301

16,324
7,663
-162
750
3,533
4,540

22,715
16,916
1,006
-446
761
4,478

30,988
20,476
-457
1,238
396
9,335

28,203
25,423
-982
1,277
1,319
1,166

29,248
22,006
n.a.
2,074
2,495
2,673

34 Allocation of SDRs
35 Discrepancy

1,139
25,212

1,152
28,870

1,093
25,809

0
6,703
503

0
-374
-2,144

0
9,497
2,474

0
5,032
-899

0
1,370
577

25,212

28,870

25,809

6,200

1,770

7,023

5,931

793

1 Balance on current account
3
4
5
6
7
8
9
10

37

Merchandise trade balance 2
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net 3
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)

Statistical discrepancy in recorded data before seasonal
adjustment
MEMO:

Changes in official assets
U.S. official reserve assets (increase, ~)
Foreign official assets in the United States
(increase, + )
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39

-1,133

-8,155

-5.175

-905

-4

262

-1,089

-1,132

-13,624

14,881

4,854

-2,908

-5,498

7,844

-2,940

1,574

5,543

12,769

13,314

2,786

2,935

2,230

4,988

3,072

631

602

214

132

64

93

126

465

1. Seasonal factors are no longer calculated for lines 12 through 41.
2. D a t a are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing; military exports
are excluded f r o m merchandise data and are included in line 6.
3. Includes reinvested earnings of incorporated affiliates.




4. Primarily associated with military sales contracts and other transactions arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current
(U.S. Department of Commerce).

Business

Trade and Reserve and Official Assets
3.11

A55

U . S. F O R E I G N T R A D E
Millions of dollars; monthly data are seasonally adjusted.
1982
Item

1979

1980

1981
Feb.

1

E X P O R T S of domestic and foreign
merchandise excluding grant-aid
shipments

2

G E N E R A L I M P O R T S including merchandise for immediate consumption plus entries into bonded
warehouses

3

T r a d e balance

181,860

220,626

233.677

18,704

Apr.

May

18,602

17,843

June

July

18,822

18,218

Aug.

18,026

17,498

209,458

244,871

261,305

19,090

20.349

17.387

20,558

21,310

19,559

23,494

-27,598

-24,245

-27,628

-387

-1,747

456

-2,340

-2,488

-1,532

-5,996

not covered in Census statistics, and (2) the exclusion of military sales (which are
combined with other military transactions and reported separately in the "service
account" in table 3.10, line 6). On the import side, additions are made for gold,
ship purchases, imports of electricity from Canada and other transactions; military
payments are excluded and shown separately as indicated above.

NOTE. T h e data through 1981 in this table are reported by the Bureau of Census
data on a free-alongside-ship (f.a.s.) value basis—that is, value at the port of export.
Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in the Census
basis trade data; this adjustment has been made for all data shown in the table.
Beginning with 1982 data, the value of imports are on a customs valuation basis.
The Census basis data differ from merchandise trade data shown in table 3.10,
U.S. International Transactions Summary, for reasons of coverage and timing. On
the export side, the largest adjustments are: (1) the addition of exports to Canada

3.12

Mar.

SOURCE. FT900 "Summary of U.S. Export and Import Merchandise T r a d e "
(U.S. Department of Commerce, Bureau of the Census).

U.S. R E S E R V E ASSETS
Millions of dollars, end of period
1982
1979

Type

1980

1981
Mar.

Apr.

May

June

July

Aug.

Sept.

1

Total 1

18,956

26,756

30,075

29,944

31,552

30,915

30,671

31,227

31,233

30,993

2

Gold stock, including Exchange Stabilization Fund 1

11,172

11,160

11,151

11.150

11,149

11,149

11,149

11.149

11,148

11,148

3

Special drawing rights 2 - 3

2,724

2,610

4,095

4,306

4,294

4,521

4,461

4,591

4,601

4,809

4

Reserve position in International Monetary Fund 2

1,253

2,852

5,055

5,367

6,022

6,099

6,062

6,386

6,433

6,406

5

Foreign currencies 4 - 5

3,807

10,134

9,774

9.121

10,097

9,146

8,999

9,101

9,051

8,630

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.
2. Beginning July 1974, the I M F adopted a technique for valuing the S D R based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through D e c e m b e r 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdings and reserve position
in the I M F also are valued on this basis beginning July 1974.

3.13

3. Includes allocations by the International Monetary Fund of S D R s as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus net transactions in SDRs.
4. Beginning November 1978, valued at current market exchange rates.
5. Includes U.S. government securities held under repurchase agreement against
receipt of foreign currencies, if any.

FOREIGN OFFICIAL ASSETS H E L D A T F E D E R A L RESERVE BANKS
Millions of dollars, end of period
1982
Assets

1979

1980

1981
Mar.

1 Deposits
Assets held in custody
2 U.S. Treasury securities'
3 Earmarked gold 2

May

June

July

Aug.

Sept.

429

411

505

421

966

308

585

982

347

396

95,075
15,169

102,417
14,965

104,680
14,804

103,964
14,798

102,346
14,788

102,112
14,778

103,292
14,777

106,696
14,762

104.136
14,761

106.117
14,726

1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
2. The value of earmarked gold increased because of the changes in par value
of the U.S. dollar in May 1972 and in October 1973.




Apr.

NOTE. Excludes deposits and U.S. Treasury securities held for international and
regional organizations. E a r m a r k e d gold is gold held for foreign and international
accounts and is not included in the gold stock of the United States,

A56
3.14

International Statistics • October 1982
FOREIGN B R A N C H E S OF U.S. B A N K S

Balance Sheet D a t a

Millions of dollars, end of period

. .

.

1982
1980
Jan.

Feb.

Mar

Apr.

May

June

July?

All foreign countries
1 Total, all currencies
2 Claims on United States
3
Parent bank
4
Other
5 Claims on foreigners
6
Other branches of parent bank
7
Banks
8
Public borrowers
9
Nonbank foreigners
10 Other assets
11 Total payable in U.S. dollars
12 Claims on United States
13
Parent bank
14
Other
15 Claims on foreigners
16
Other branches of parent bank
17
Banks
18
Public borrowers
19
Nonbank foreigners
20 Other assets

364,409

401,135

462,790

459,998

461,249

463,663

460,225

461,591

458,570

465,155

32,302
25,929
6,373

28,460
20,202
8,258

63,540
43,064
20.476

69,794
49,206
20,588

69,539
47,996
21,543

75,745
51,978
23,767

77,914
54,563
23,351

79,606
56,152
23,454

83,538
57,969
25,569

82,727
55,337
27,390

317,330
79,662
123,420
26,097
88,151

354,960
77,019
146.448
28,033
103,460

379,102
87,840
150,892
28,197
112,173

370,124
89,010
145,528
26,568
109,018

371,644
88,637
146,317
26,851
109,839

368,678
86,853
146,960
26,333
108,532

362,690
86,186
142,387
25,590
108,527

362,271
88,468
139,400 r
24,989
109,414'

356,160
87,254
137,362
25,226
106,318

363,190
88,918
142,707
24,641
106,924

14,777

17,715

20,148

20,080

20,066

19,240

19,621

19,714

18,872

19,238

267,713

291,798

350,678

351,125

353,001

355,535

351,349

351,757

353,545

359,489

31,171
25,632
5,539

27,191
19,896
7,295

61,939
42,518
19,421

68,241
48,623
19,618

67,983
47,402
20,581

74,226
51,389
22,837

76,410
54,107
22,303

78,000
55,667
22,333

81,971
57,472
24,499

81,084
54,658
26,426

229,120
61,525
96,261
21,629
49,705

255,391
58,541
117,342
23,491
56,017

277,085
69,403
122,253
22,877
62,552

270,696
71,999
117,148
21,180
60,369

272,903
72,094
118,227
21,483
61,099

269,548
70,377
117,371
20,632
61,168

263,047
69,409
113,673
20,170
59,795

261,822
70,795
110,783'
19,579
60,665'

260,301
70,435
110,064
19,944
59,858

266,603
71,952
115,012
19,293
60,346

7,422

9,216

11.654

12,188

12,115

11,761

11,892

11,935

11,273

11,802

United Kingdom
21 Total, all currencies
22 Claims on United States
23
Parent bank
24
Other
25 Claims on foreigners
26
Other branches of parent bank
27
Banks
28
Public borrowers
29
Nonbank foreigners

130,873

144,717

157,229

157,892

162,351

161,471

159,481

161,036

158,466

163,899

11,117
9,338
1,779

7,509
5,275
2,234

11,823
7,885
3,938

13,935
10,264
3,671

15,884
12,044
3,840

16,343
12,446
3,897

17,676
13,750
3,926

20,155
15,854
4,301

20,744
16,768
3,976

24,301
20,019
4,282

115,123
34,291
51,343
4,919
24,570

131,142
34,760
58,741
6,688
30,953

138,888
41,367
56,315
7,490
33,716

137,953
41,468
56,164
7,249
33,072

140,197
40,935
57,975
7,370
33,917

139,292
41,186
56,940
7,541
33,625

135,634
39,811
55,545
6,822
33,456

134,845
39,621
54,674'
6,663
33,887'

131,860
37,696
54,727
6,595
32,842

133,418
36,704
56,428
6,456
33,830

4,633

6,066

6,518

6,004

6,270

5,836

6,171

6,063

5,862

6,180

31 Total payable in U.S. dollars

94,287

99,699

115,188

116,870

121,432

120,432

117,914

119,586

120,002

125,040

32 Claims on United States
33
Parent bank
34
Other

10,746
9,297
1,449

7,116
5,229
1,887

11.246
7,721
3,525

13,438
10,098
3,340

15,391
11,881
3,510

15,842
12,293
3,549

17,182
13,623
3,559

19,608
15,663
3,945

20,256
16,599
3,657

23,760
19,790
3,970

35 Claims on foreigners
36
Other branches of parent bank
37
Banks
38
Public borrowers
39
Nonbank foreigners

81,294
28,928
36,760
3,319
12,287

89,723
28,268
42,073
4,911
14,471

99,850
35,439
40,703
5,595
18,113

99,473
35,875
40,610
5,423
17,565

101,861
35,697
42,453
5,467
18,244

100,500
36,055
40,732
5,360
18,353

96,595
34,240
40,070
4,717
17,568

95,926
33,922
39,593'
4,507
17,904'

95,857
32,567
40,479
4,655
18,156

97,153
31,461
42,515
4,513
18,664

2,247

2,860

4,092

3,959

4,180

4,090

4,137

4,052

3,889

4,127

30 Other assets

40 Other assets

Bahamas and Caymans
108,977

123,837

149,051

146,585

142,853

143,795

142,941

139,836

141,607

140,828

42 Claims on United States
43
Parent bank
44
Other

19,124
15,196
3,928

17,751
12,631
5,120

46,343
31,440
14,903

50,647
35,453
15,194

49,060
32,704
16,356

54,019
35,311
18,708

55,533
37,013
18,520

54,316
36,099
18,217

56,662
35,987
20,675

52,479
30,278
22,201

45 Claims on foreigners
46
Other branches of parent bank
47
Banks
48
Public borrowers
49
Nonbank foreigners

86,718
9,689
43,189
12,905
20,935

101,926
13,342
54,861
12,577
21,146

98,205
12,951
55.299
10,010
19,945

91,538
14,084
50,754
8,713
17,987

89,405
14,384
48,951
8,584
17,486

85,465
12,035
47,867
7,980
17,583

83,124
12,640
45,768
7,847
16,869

81,191
14,248
43,165
7,348
16,430

80,948
15,479
42,521
7,314
15,634

84,310
17,521
44,208
7,018
15,563

41 Total, all currencies

50 Other assets
51 Total payable in U.S. dollars




3,135

4,160

4,503

4,400

4,388

4,311

4,284

4,329

3,997

4,039

102,368

117,654

143,686

141,447

137,842

138,748

137,840

134,925

136,639

135,349

Overseas Branches
3.14

A57

Continued

1982
T ' kT»

1979

1981
Jan.

Feb.

Mar.

Apr.

May

June

JulyP

All foreign countries
52 Total, all currencies
53 To United States
54
Parent bank
55
Other banks in United States
56
Nonbanks
57 To foreigners
Other branches of parent bank
58
59
Banks
60
Official institutions
Nonbank foreigners
61
62 Other liabilities
63 Total payable in U.S. dollars
64 T o United States
65
Parent bank
66
Other banks in United States
Nonbanks
67
68 To foreigners
69
Other branches of parent bank
70
Banks
71
Official institutions
Nonbank foreigners
72
73 Other liabilities

364,409

401,135

462,790

459,998

461,249

463,663

460,225

461,591

458,570

465,155

66,689
24,533
13,968
28,188

91,079
39,286
14,473
37,275

137,712
56,143
19,343
62,226

144,175
56,047
19,886
68,242

145,487
55,378
22,652
67,457

150,837
58,766
24,431
67,640

153,064
56,881
26,026
70,157

156,103
56,234
27,680
72,189

160,881
59,016
29,711
72,154

163,782
60,746
31,584
71,452

283,510
77,640
122,922
35,668
47,280

295,411
75,773
132,116
32,473
55,049

305,630
86,406
124,896
25,997
68,331

296,183
85,644
118,512
25,124
66,903

296,188
84,351
118,939
24,625
68,273

293,369
85,581
117,069
23,039
67,680

286,969
84,150
111,660
22,340
68,819

284,373
85,631
107,337
22,703
68,702

278,216
84,547
104,894
19,909
68,866

281,731
86,815
106,217
20,246
68,453

14,210

14,690

19,448

19,640

19,574

19,457

20,192

21,115

19,473

19,642

273,857

303,281

364,390

364,005

366,885

369,503

366,655

368,327

369,109

375,650

64,530
23,403
13,771
27,356

88,157
37,528
14,203
36,426

134,645
54,291
19,029
61,325

141,163
53,969
19,759
67,435

142,521
53,355
22,441
66,725

147,790
56,701
24,190
66,899

149,960
54,820
25,689
69,451

152,973
54,272
27,265
71,436

157,684
56,988
29,375
71,321

160,527
58,765
31,252
70,510

201,514
60,551
80,691
29,048
31,224

206,883
58,172
87,497
24,697
36,517

217,602
69,309
79,584
20,288
48,421

210,860
69,149
74,293
19,937
47,481

212,915
68,187
76,101
19,322
49,305

210,267
69,497
73,181
18,120
49,469

204,984
68,047
69,276
17,491
50,170

202,547
68,540
66,627
17,900
49,480

200,027
68,547
65,567
15,368
50,545

203,905
70,457
66,788
15,744
50,916

7,813

8,241

12,143

11,982

11,449

11,446

11,711

12,807

11,398

11,218

United Kingdom
74 Total, all currencies
75 To United States
76
Parent bank
Other banks in United States
77
Nonbanks
78
79 To foreigners
80
Other branches of parent bank
81
Banks
Official institutions
82
83
Nonbank foreigners

130,873

144,717

157,229

157,892

162,351

161,471

159,481

161,036

158,466

163,899

20,986
3,104
7,693
10.189

21,785
4,225
5,716
11,844

38,022
5,444
7,502
25,076

40,768
6,413
7,313
27,042

43,358
6,765
8,973
27,620

42,481
6,313
8,607
27,561

41,886
8,006
8,345
25,535

43,882
6,694
8,972
28,216

44,086
6,323
9,985
27,778

46,589
6,849
11,215
28,525

104,032
12,567
47,620
24,202
19,643

117,438
15,384
56,262
21,412
24,380

112,255
16,545
51,336
16,517
27,857

110,036
16,270
49,622
16,110
28,034

111,417
16,546
49,937
15,965
28,969

111,262
17,245
49,616
14,608
29,793

109,629
18,358
47,549
13,908
29,814

109,199
19,412
46,204
14,119
29,464

106,665
17,771
46,628
11,746
30,520

109,274
18,010
48,847
12,088
30,329

5.855

5,494

6,952

7,088

7,576

7,728

7,966

7,955

7,715

8,036

85 Total payable in U.S. dollars

95,449

103,440

120,277

121,407

127,029

126,359

124,248

126,901

125,859

130,992

86 To United States
87
Parent bank
Other banks in United States
88
Nonbanks
89

20,552
3,054
7,651
9,847

21,080
4,078
5,626
11,376

37,332
5,350
7,249
24,733

40,276
6,296
7,289
26,691

42,809
6,660
8,884
27,265

41,885
6,211
8,489
27,185

41,198
7,907
8,167
25,124

43,143
6,624
8,755
27.764

43,323
6,212
9,806
27,305

45,753
6,773
11,048
27,932

90 To foreigners
91
Other branches of parent bank
92
Banks
93
Official institutions
Nonbank foreigners
94

72,397
8,446
29,424
20,192
14,335

79,636
10,474
35,388
17,024
16,750

79,034
12,048
32,298
13,612
21,076

77,463
11,900
30,995
13,497
21,071

80,581
12,254
32,249
13,418
22,660

80,825
13,130
32,090
12,196
23,409

79,444
14,102
30,415
11,568
23,359

79,914
14,958
29,965
11,829
23,162

78,794
13,903
30,557
9,843
24,491

81,376
14,202
32,670
10,212
24,292

2,500

2,724

3,911

3,668

3.639

3,649

3,606

3,844

3,742

3,863

84 Other liabilities

95 Other liabilities

Bahamas and Caymans
108,977

123,837

149,051

146,585

142,853

143,795

142,941

139,836

141,607

140,828

97 To United States
98
Parent bank
99
Other banks in United States
100
Nonbanks

37,719
15,267
5,204
17,248

59,666
28,181
7.379
24,106

85,704
39,250
10,620
35,834

89,032
37,777
11,208
40,047

87,429
36,682
12,211
38,536

91,808
39,146
14,285
38,377

94,166
35,806
15,907
42,453

94,421
36,395
16,834
41,192

97,707
39,225
17,416
41,066

98,371
40,867
17,860
39,644

101 To foreigners
Other branches of parent bank
102
103
Banks
104
Official institutions
Nonbank foreigners
105

68,598
20,875
33,631
4,866
9,226

61,218
17,040
29,895
4.361
9,922

60,012
20,641
23,202
3,498
12,671

54,494
20,721
18,624
3,149
12,000

52,333
19,814
18,221
2,505
11,793

49,005
18,614
16,418
2,607
11,366

45,773
17,365
14,723
2,512
11,173

42,032
15,888
13,457
2,448
10,239

41,145
15,890
12,620
2,466
10,169

39,710
15,045
11,730
2,402
10,533

96 Total, all currencies

106 Other liabilities
107 Total payable in U.S. dollars




2,660

2,953

3,335

3,059

3,091

2,982

3,002

3,383

2,755

2,747

103,460

119,657

145,227

142,793

139,247

140,115

139,461

136,504

138,369

137,638

A58
3.15

International Statistics • October 1982
SELECTED U . S . LIABILITIES T O F O R E I G N OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1982
Item

1980

1981
Feb.

1 Total 1
2
3
4
5
6
1
8
9
10
11
12

By type
Liabilities reported by banks in the United States 2
U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U . S . Treasury securities 5
By area
Western E u r o p e 1
Canada
Latin America and Caribbean
Asia
Other countries 6

Apr.

May.

June

JulyP

Aug.''

164,578

169,697

166,209

166,757

165,526

166,993

168,382

169,886

169,233

30,381
56,243

26,567
52,389

24,713
48,174

25,051
47,048

26,326
43,850

27,723
42,741

28,459
43,509

25,469
45,824

26,501
44,182

41,455
14,654
21,845

53,150
11,791
25,800

56,333
11,291
25,698

57,647
11,291
25,720

58,459
11,050
25,841

59,933
10,750
25,846

60,251
10,150
26,013

63,068
9,750
25,775

63,435
9,350
25,765

81,592
1,562
5,688
70,784
4,123
829

65,479
2,403
6,954
91,790
1,829
1,242

62,049
1,669
6,308
93,559
1,474
1,150

60,364
1,647
6,562
95,247
1,337
1,600

57,393
1,721
7,124
94,866
1,823
2,599

57,382
1,329
7,248
95,908
1,381
3,745

58,079
1,568
7,692
95,494
1,437
4,112

58,772
1,519
7,164
97,147
1,485
3,799

61,084
1,771
6,742
94,924
1,326
3,386

1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial
paper, negotiable time certificates of deposit, and borrowings under repurchase
agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds
and notes payable in foreign currencies.

3.16

Mar.

5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern E u r o p e .
NOTE. Based on Treasury Department data and on data reported to the Treasury
Department by banks (including Federal Reserve Banks) and securities dealers in
the United States.

LIABILITIES T O A N D CLAIMS O N F O R E I G N E R S Reported by Banks in the United States
Payable in Foreign Currencies
Millions of dollars, end of period
1981
Item

1979

1980

Sept.
1
2
3
4
5

Banks' own liabilities
Banks' own claims 1
Deposits
Other claims
Claims of banks' domestic customers 2

1. Includes claims of banks' domestic customers through March 1978.
2. Assets owned by customers of the reporting bank located in the United States
that represent claims on foreigners held by reporting banks for the accounts of
their domestic customers.




1,918
2,419
994
1,425
580

3,748
4,206
2,507
1,699
962

1982

1981

3,798
5,220
3,398
1,822
971

2,878
4,078
2,409
1,669
248

Dec.
3,798
5,220
3,398
1,822
971

Mar.
4,326
5,612
3,796
1,816
944

June
4,640
6,363
3,560
2,803
924

NOTE. D a t a on claims exclude foreign currencies held by U.S. monetary authorities.

Nonbank-Reported
3.17

LIABILITIES TO FOREIGNERS
Payable in U.S. dollars

Data

A59

Reported by Banks in the United States

Millions of dollars, end of period
1982
Holder and type of liability

1979

1980

1981
Feb.

Mar.

Apr.

May

June'

July

Aug.f

1 All foreigners

187,521

205,297

242,981

254,520

261,219

266,256

274,341

285,911

284,169

293,328

2 Banks' own liabilities
3
D e m a n d deposits
4
Time deposits 1
Other 2
6
Own foreign offices 3

117,196
23,303
13,623
16,453
63,817

124,791
23,462
15,076
17,583
68,670

162,755
19,677
28,816
17,418
96,844

179,819
17,808
36,555
17,235
108,221

187,559
16,498
43,597
18,989
108,475

194,898
18,161
48,552
18,570
109,616

203,120
16,550
53,414
21,171
111,984

212,634
17,285
56,007
22,146
117,196

208,300
17,101
59,516
20,385
111,298

217,780
15,694
62,077
24,133
115,607

70,325
48,573

80,506
57,595

80,225
55,312

74,701
51,142

73,660
50,152

71,358
47,353

71,222
46,476

73,277
48,817

75,869
51,211

75,548
49,646

19,396
2,356

20,079
2,832

18,944
5,970

18,718
4,842

18,901
4,607

19,326
4,679

20,751
3,995

20,448
4,011

20,649
4,009

22,124
3,778

2,356

2,344

2,721

2,091

2,045

2,043

3,039

4,001

4,082

5,073

714
260
151
303

444
146
85
212

638
262
58
318

298
135
76
87

445
209
141
96

603
149
286
168

1,272
185
471
616

1,233
300
586
347

2,246
343
633
1,271

3,093
265
453
2,376

1,643
102

1,900
254

2,083
541

1,792
277

1,599
109

1,439
142

1,767
253

2,768
1,425

1,835
487

1,980
328

1,538
2

1,646
0

1,542
0

1,515
0

1,490
0

1,297
0

1,514
0

1,343
0

1,349
0

1,652
0

7 Banks' custody liabilities 4
8
U.S. Treasury bills and certificates 5
Other negotiable and readily transferable
9
instruments 6
10
Other
11 Nonmonetary international and regional
organizations 7
12 Banks' own liabilities
13
D e m a n d deposits
14
Time deposits 1
15
Other 2
16 Banks' custody liabilities 4
17
U.S. Treasury bills and certificates
18
Other negotiable and readily transferable
instruments 6
19
Other
8

78,206

86,624

78,957

72,886

72,099

70,176

70,464

71,968

71,293

70,683

21 Banks' own liabilities
22
D e m a n d deposits
23
Time deposits 1
24
Other 2

18,292
4,671
3,050
10,571

17,826
3,771
3,612
10,443

16,808
2,612
4,146
10,050

14,959
2,385
4,261
8,312

15,326
2,277
4,866
8,183

17,112
3,241
5,623
8,248

17,626
2,156
5,769
9,702

18,964
3,167
5,500
10,297

15,927
2,800
6,101
7,026

16,240
2,035
5,700
8,506

25 Banks' custody liabilities 4
26
U.S. Treasury bills and certificates 5
27
Other negotiable and readily transferable
instruments 6
28
Other

59,914
47,666

68,798
56,243

62,149
52,389

57,927
48,174

56,773
47,048

53,064
43,850

52,838
42,741

53,004
43,509

55,366
45,824

54,443
41,182

12,196
52

12,501
54

9,712
47

9,717
37

9,685
40

9,029
185

10,057
40

9,461
33

9,507
36

10,224
37

29 Banks'

88,316

96,415

135,355

151,420

157,787

161,176

165,642

173,299

171,001

177,852

30 Banks' own liabilities
Unaffiliated foreign banks
31
32
D e m a n d deposits
33
Time deposits 1
34
Other 2
Own foreign offices 3
35

83,299
19,482
13,285
1,667
4,530
63,817

90,456
21,786
14,188
1,703
5,895
68,670

123,640
26,796
11,614
8,654
6,528
96,844

140,669
32,448
10,444
13,653
8,350
108,221

146,591
38,116
9,267
18,653
10,195
108,475

148,456
38,840
9,915
19,260
9,664
109,616

153,081
41,097
9,697
21,248
10,152
111,984

160,594
43,398
9,274
23,403
10,721
117,196

157,329
46,032
9,384
25,381
11,267
111,298

163,642
48,036
8,776
26,737
12,523
115,607

5,017
422

5,959
623

11,715
1,683

10,751
1,876

11,197
2,213

12,720
2,592

12,562
2,698

12,706
2,926

13,671
3,872

14,209
3,970

2,415
2,179

2,748
2,588

4,421
5,611

4,405
4,470

4,729
4,255

5,968
4,160

6,097
3,766

6,520
3,260

6,661
3,138

7,102
3,138

20 Official institutions

36 Banks' custody liabilities 4
37
U.S. Treasury bills and certificates
38
Other negotiable and readily transferable
instruments 6
39
Other
40 Other foreigners

18,642

19,914

25,947

28,124

29,288

32,861

35,196

36,642

37,794

39,720

41 Banks' own liabilities
42
D e m a n d deposits
43
Time deposits
44
Other 2

14,891
5,087
8,755
1,048

16,065
5,356
9,676
1,033

21,669
5,189
15,958
523

23,893
4,843
18,564
485

25,196
4,745
19,936
515

28,727
4,855
23,383
489

31,140
4,512
25,926
702

31,842
4,544
26,518
781

32,798
4,575
27,401
822

34,804
4,888
29,187
729

3,751
382

3,849
474

4,278
698

4,231
815

4,092
782

4,134
769

4,055
784

4,800
957

4,996
1,028

4,916
1,167

3,247
123

3,185
190

3,268
312

3,081
335

2,997
313

3,032
334

3,082
189

3,125
718

3,133
835

3,147
603

10,984

10,745

10,672

10,916

11,169

11,673

12,652

12,878

12,962

13,892

45 Banks' custody liabilities 4
46
U.S. Treasury bills and certificates
47
Other negotiable and readily transferable
instruments 6
48
Other
49 MEMO: Negotiable time certificates of
deposit in custody for foreigners

1. Excludes negotiable time certificates of deposit, which are included in " O t h e r
negotiable and readily transferable instruments." Data for time deposits before
April 1978 represent short-term only.
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign subsidiaries consolidated in "Consolidated Report of Condition" filed with bank regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due to head office or parent foreign bank, and foreign
branches, agencies or wholly owned subsidiaries of head office or parent foreign
bank.
4. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks.




5. Includes nonmarketable certificates of indebtedness and Treasury bills issued
to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."

A60
3.17

International Statistics • October 1982
Continued
1982
A r e a and country

1979

1980
Feb.

Mar.

Apr.

May

June'

July

August?

1 Total

187,521

205,297

242,981

254,520

261,219

266,256

274,341

285,911

284,169

293,328

2 Foreign countries

185,164

202,953

240,259

252,430

259,174

264,213

271,302

281,910

280,088

288,255

90,952
413
2,375
1,092
398
10,433
12,935
635
7,782
2,337
1,267
557
1,259
2,005
17,954
120
24,700
266
4,070
52
302

90,897
523
4,019
497
455
12,125
9,973
670
7,572
2,441
1,344
374
1,500
1,737
16,689
242
22,680
681
6,939
68
370

90,942
587
4,117
333
296
8,486
7,665
463
7,290
2,823
1,457
354
916
1,545
18,723
518
28,288
375
6,165
49
493

91,957
647
3,254
524
292
8,047
6,668
535
6,497
3,027
1,129
275
946
1,480
18,515
216
34.073
219
5,279
52
284

93,541
545
3,002
514
273
7,792
7,698
472
4,300
3,111
1,518
272
1,136
1,358
19,199
283
35,146
223
6,256
44
400

91,890
472
2,898
613
229
6,737
6,555
457
3,695
2,963
1,666
272
1,055
1,373
20,339
364
35,452
259
6,106
37
350

97,484
454
3,075
608
212
6,312
6,954
549
3,420
2,719
1,981
276
1,114
1,425
21,651
204
39,893
237
6,000
30
371

102,699
434
2,869
510
181
9,234
6,221
512
4,720
2,836
1,370
365
1,191
1,416
22,473
167
41,159
314
6,163
44
521

106,219
501
2.957
452
162
8,635
5,624
506
5,760
2,762
1,333
365
1,133
1,385
23,853
222
44,115
320
5,694
41
397

111,915
532
3,217
446
266
8,156
5,397
559
6,703
2,804
1,634
453
1,223
1,278
25,019
287
46,800
317
6,336
47
440

3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
13
Norway
14
Portugal
15
Spain
16
Sweden
17
Switzerland
18
Turkey
19
United Kingdom
20
Yugoslavia
21
Other Western Europe 1
22
U.S.S.R
23
Other Eastern E u r o p e 2
24 Canada
25 Latin America
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British West
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35
Guatemala 3
36
Jamaica 3
37
Mexico
38
Netherlands
39
Panama
40
Peru
41
Uruguay
42
Venezuela
43
Other Latin

and Caribbean

Indies

Antilles

America and Caribbean

44 Asia
China
45
Mainland
46
Taiwan
47
Hong Kong
48
India
49
Indonesia
50
Israel
51
Japan
52
Korea
53
Philippines
54
Thailand
55
Middle-East oil-exporting countries 4
56
Other Asia
57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries 5
63
Other Africa
64 Other countries
65
Australia
66
All other
67 Nonmonetary international and regional
organizations
International
Latin American regional
Other regional 6

68
69
70

7,379

10,031

10,250

11,105

10,780

12,298

10,619

11,541

11,167

11,574

49,686
1,582
15,255
430
1,005
11,138
468
2,617
13
425
414
76
4,185
499
4,483
383
202
4,192
2,318

53,170
2,132
16,381
670
1,216
12,766
460
3,077
6
371
367
97
4,547
413
4,718
403
254
3,170
2,123

84,685
2,445
34.400
765
1,568
17,794
664
2,993
9
434
479
87
7,163
3,182
4,847
694
367
4,245
2,548

94,715
2,897
43,675
865
1,803
18,847
815
2,924
10
370
519
100
7,246
3,234
3,357
531
479
4,578
2,464

98,073
3,037
44,689
1,113
1,352
18,844
951
2,654
7
513
590
129
7,646
3,434
4,190
532
323
5,120
2,948

103,809
2,729
45,608
1,165
1,462
19,623
992
2,639
6
491
569
133
8,533
3,474
4,238
620
410
8,061
3,056

105,507
2,203
44,819
1,350
1,615
19,690
1,224
2,515
6
465
583
104
8,992
3,449
4,338
753
561
9,421
3,419

109,452
2,030
44,615
1,300
1,822
22,631
1,124
2,700
6
559
580
100
8.957
3.727
5,357
1,069
542
9,310
3,022

103,877
2,095
39,474
1,303
1,823
21,986
1,525
2,699
7
527
613
139
9,643
3,602
4,884
931
609
9,143
2,874

107,226
2,644
41,823
1,290
1,944
22,801
1,165
2,636
9
478
616
136
9,259
3,793
4,689
984
656
9,239
3,066

33,005

42,420

49,784

50,409

52,607

50,362

51,066

51,143

52,047

50,819

49
1,393
1,672
527
504
707
8,907
993
795
277
15,300
1,879

49
1,662
2,548
416
730
883
16,281
1,528
919
464
14,453
2,487

158
2,082
3,950
385
640
592
20,550
2,013
874
534
13.154
4.852

215
2,253
4,302
414
1,241
507
20,778
2,162
739
494
13,569
3,735

257
2,213
4,195
435
1,127
449
21,955
2,138
671
340
14,799
4,028

331
2,291
4,587
544
837
539
19,307
2,355
691
517
14,347
4,016

284
2,372
4,737
603
784
562
19,008
2,191
758
474
14,400
4,893

244
2,334
4,880
540
583
610
18,994
1,863
839
485
14,267
5,503

261
2,371
4,918
551
722
476
19,833
1,934
660
450
14,243
5,629

245
2,253
4,551
655
593
486
19,283
1,712
728
369
14,106
5,838

3,239
475
33
184
110
1,635
804

5,187
485
33
288
57
3,540
783

3,180
360
32
420
26
1,395
946

2,814
339
35
368
40
1,112
920

2,398
297
36
330
69
627
1,039

3,111
411
52
308
41
1,144
1,156

2,629
382
37
305
27
846
1,031

2,675
447
59
335
37
901
896

2,692
430
52
339
25
1,025
821

3,205
398
47
341
25
915
1,479

904
684
220

1,247
950
297

1,419
1,223
196

1,430
1,204
226

1,775
1,550
225

2,743
2,542
201

3,997
3,752
245

4,400
4,172
228

4,085
3,831
254

3,516
3,317
199

2,356
1,238
806
313

2.344
1,157
890
296

2,721
1,661
710
350

2,091
1,082
706
303

2,045
1,081
630
334

2,043
1,269
450
323

3,039
2,064
661
314

4,001
2,860
694
446

4,082
3,064
606
412

5,073
3,998
713
362

1. Includes the Bank for International Settlements. Beginning April 1978. also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Democratic Republic, Hungary, Poland, and R o m a n i a .
3. Included in " O t h e r Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United A r a b Emirates (Trucial States).
5. Comprises Algeria, G a b o n , Libya, and Nigeria.




6. Asian, African, Middle Eastern, and European regional organizations, except
the Bank for International Settlements, which is included in " O t h e r Western
Europe."
A Liabilities and claims of banks in the United States were increased, beginning
in December 1981, by the shift from foreign branches to international banking
facilities in the United States of liabilities to, and claims on, foreign residents.

Nonbank-Reported
3.18

Data

A61

BANKS' O W N CLAIMS ON F O R E I G N E R S Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1982

Area and country

1980

1979

1981A

Mar.

Feb.

May

Apr.

June'

July

Aug.P

1 Total

133,943

172,592

251,029

266,483

276,924

287,562

299,979

314,381

322,901

326,915

2 Foreign countries

133,906

172,514

250,973

266,435

276,868

287,522

299,936

314,338

322,856

326,809

28,388
284
1,339
147
202
3,322
1,179
154
1,631
514
276
330
1,051
542
1,165
149
13,795
611
175
268
1,254

32,108
236
1,621
1.27
460
2,958
948
256
3,364
575
227
331
993
783
1,446
145
14,917
853
179
281
1,410

49,047
121
2,843
188
547
4,126
936
333
5,240
686
384
529
2,100
1,206
2,213
424
23,645
1,224
209
367
1,725

54,695
172
3,280
253
573
4,951
870
321
5,644
814
437
666
2,507
1,504
2,001
522
26,665
1,243
192
262
1,817

56,937
130
3,778
285
574
5,579
1,123
325
5,333
956
447
724
2,619
1,550
1,709
496
27,784
1,200
317
218
1,790

59,319
200
3,848
286
525
5,042
1,483
279
5,099
750
452
813
2,499
1,441
1,564
487
31,081
1,238
282
195
1,755

62,009
201
3,669
276
638
5,508
1,512
262
5,842
917
416
797
2,624
1,692
1,557
573
31,974
1,202
386
251
1,711

64,115
140
3,760
287
736
6,405
1,758
297
6,024
1,005
429
938
3,086
1,638
1,596
584
31,834
1,294
247
296
1,761

67,304
189
4,101
308
699
5,938
1,736
305
6,295
1,119
538
990
3,308
1,518
1,601
646
34,410
1,266
280
276
1,781

70,683
189
4,419
323
776
6,027
1,569
270
6,583
1,110
487
970
3,520
1,718
1,589
600
36,891
1,220
291
315
1,816

3 Europe
4
Austria
Belgium-Luxembourg
5
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
13
Norway
14
Portugal
15
Spain
16
Sweden
Switzerland
17
18
Turkey
19
United Kingdom
20
Yugoslavia
21
Other Western Europe1
22
U.S.S.R
23
Other Eastern Europe2
24 Canada
2 5 Latin A m e r i c a
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British W e s t
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35
Guatemala3
36
Jamaica3
37
Mexico
38
Netherlands
39
Panama
40
Peru
41
Uruguay
42
Venezuela
43
O t h e r Latin

and Caribbean

Indies

Antilles

America and Caribbean

4 4 Asia
45
46
47
48
49
50
51
52
53
54
55
56

China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle E a s t oil-exporting c o u n t r i e s 4
Other Asia

57
58
59
60
61
62
63

Egypt
Morocco
South Africa
Zaire
Oil-exporting c o u n t r i e s 5
Other

6 4 O t h e r countries
65
Australia
66
All o t h e r

4,143

4,810

9,164

9,925

10,970

11,805

11,323

12,693

13,070

12,087

67,993
4,389
18,918
496
7,713
9,818
1,441
1,614
4
1,025
134
47
9,099
248
6,041
652
105
4,657
1,593

92,992
5,689
29,419
218
10,496
15,663
1,951
1,752
3
1,190
137
36
12,595
821
4,974
890
137
5,438
1,583

138,114
7,522
43,437
346
16,918
21,913
3,690
2,018
3
1,531
124
62
22,407
1,076
6,780
1,218
157
7.069
1,844

148,003
8,827
45,860
481
17,878
22,031
4,363
2,067
9
1,752
119
115
24,301
1,150
7,306
1,433
240
7,727
2,374

152,875
8,928
47,586
401
18,723
22,975
4,513
2,018
3
1,837
106
151
25,174
873
7,509
1,518
232
8,085
2,245

158,097
10,896
47,606
575
19,380
22,739
4,590
2,146
137
1,879
116
130
26,087
886
8,246
1,589
316
8,560
2,220

166,757
10,816
48,730
396
20,413
25,469
4,884
2,265
37
1,852
112
781
28,321
880
8,318
1,672
346
9,172
2,295

173,201
11,012
51,849
414
21,147
25,825
5,268
2,554
3
2,022
124
124
29,547
1,028
8,660
2,047
381
9,138
2,057

178,007
10,971
52,398
402
21,556
27,912
5,228
2,612
8
2,027
147
578
29,727
1,032
9,146
2,064
413
9,681
2,105

181,309
10,945
54,617
385
22,471
28,501
5,377
2,640
3
2,048
116
153
29,346
778
9,565
2,062
457
9,805
2,039

30,730

39,078

49,770

48,211

50,107

52,115

53,117

57,368

57,417

55,999

35
1,821
1,804
92
131
990
16,911
3,793
737
933
1,548
1,934

195
2,469
2,247
142
245
1,172
21,361
5,697
989
876
1,432
2,252

107
2,461
4,126
123
346
1,562
26,757
7,324
1,817
564
1,575
3,009

65
2,215
4,287
188
330
1,467
26,081
6,272
1,989
559
1,991
2,766

84
2,300
5,434
212
356
1,241
25,972
6,564
2,270
513
2,021
3,139

98
2,275
5,344
195
308
1,160
27,358
6,953
2,266
565
2,411
3,182

68
2,114
5,978
185
315
1,391
26,732
7,103
2,459
502
2,613
3,656

124
2,048
6,390
252
288
1,835
29,258
7,119
2,605
459
2,564
4,426

139
1,977
6,124
266
294
1,637
30,091
6,878
2,605
406
2,665
4,335

127
1,891
6,407
235
297
1,534
28,397
6,967
2,611
388
2,614
4,530

1,797
114
103
445
144
391
600

2,377
151
223
370
94
805
734

3,503
238
284
1,011
112
657
1,201

4,019
293
273
1,249
93
593
1,518

4,203
327
294
1,426
89
637
1,429

4,383
345
312
1,344
100
725
1,557

4,768
400
278
1,387
81
839
1,783

4,851
416
334
1,467
84
799
1,751

5,029
378
314
1,620
81
849
1,787

4,847
399
368
1,574
58
762
1,685

855
673
182

1,150
859
290

1,376
1,203
172

1,583
1,385
198

1,777
1,501
276

1,803
1,560
243

1,961
1,655
306

2,111
1,806
305

2,028
1,700
328

1,885
1,538
347

36

78

56

47

57

40

43

43

45

106

6 7 N o n m o n e t a r y i n t e r n a t i o n a l a n d regional

organizations 6

1. Includes the B a n k f o r I n t e r n a t i o n a l Settlements. Beginning April 1978, also
includes E a s t e r n E u r o p e a n c o u n t r i e s n o t listed in line 23.
2. Beginning April 1978 c o m p r i s e s B u l g a r i a , Czechoslovakia, the G e r m a n D e m ocratic R e p u b l i c , H u n g a r y , P o l a n d , a n d R o m a n i a .
3. Included in " O t h e r L a t i n A m e r i c a a n d C a r i b b e a n " t h r o u g h M a r c h 1978.
4. C o m p r i s e s B a h r a i n , I r a n , I r a q , K u w a i t , O m a n , Q a t a r , Saudi A r a b i a , and
U n i t e d A r a b E m i r a t e s (Trucial States).




5. C o m p r i s e s A l g e r i a , G a b o n , Libya, a n d Nigeria.
6. Excludes the B a n k f o r I n t e r n a t i o n a l S e t t l e m e n t s , which is included in " O t h e r
Western E u r o p e . "
NOTE. D a t a f o r period prior to April 1978 include claims of b a n k s ' domestic
customers on foreigners.
^ Liabilities a n d claims of b a n k s in the U n i t e d States w e r e increased, beginning
in D e c e m b e r 1981, by the shift f r o m foreign b r a n c h e s to international b a n k i n g
facilities in the U n i t e d States of liabilities to, a n d claims o n , foreign residents.

A62
3.19

International Statistics • October 1982
BANKS' OWN A N D D O M E S T I C CUSTOMERS' CLAIMS ON F O R E I G N E R S Reported by Banks in the
United States
Payable in U.S. Dollars
Millions of dollars, end of period
1982
Type of claim

1979

1980

1981A
Feb.

Mar.

Apr.

May

June'

1 Total

154,030

198,698

286,398'

2
3
4
5
6
7
8

133,943
15,937
47,428
40,927
6,274
34,654
29,650

172,592
20,882
65,084
50,168
8,254
41,914
36,459

251,029
31,193
96,639
74,091
22,689
51,403
49,105

20,088
955

26,106
885

35,368'
1,378

41,271'
1,512

42,230
1,426

13,100

15,574

25,752

32,328

31,966

6,032

9,648

18,021

22,714

29,565

22,305'

24.511 r

39,820'

Banks' own claims on foreigners
Foreign public borrowers
Own foreign offices 1
Unaffiliated foreign banks
Deposits
Other
All other foreigners

9 Claims of banks' domestic customers 2 . .

318,196'
266,483
33,460
98,305
82,946
26,259
56,686
51,772

276,924
33,705
101,710
87,288
28,709
58,579
54,222

July''

AugP

356,611
287,562
35,203
106,115
90,760
29,152
61,607
55,484

299,979
37,593
107,618'
97,112
33,432
63,679
57,657

314,381
40,001
113,722
101,756
35,667
66,090
58,901

326,915
322,901
40,698
114,098
108,364
39,998
68,366
59,741

326,915
41,750
117,090
108,843
39,658
69,185
59,232

11 Negotiable and readily transferable
12 Outstanding collections and other
8,238'

7,431'

8,838

30,480'

32,929

13 MEMO: Customer liability on

Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States 5

43,781

1. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due from head office or parent foreign bank, and foreign
branches, agencies, or wholly owned subsidiaries of head office or parent foreign
bank.
2. Assets owned by customers of the reporting bank located in the United States
that represent claims on foreigners held by reporting banks for the account of their
domestic customers.
3. Principally negotiable time certificates of deposit and bankers acceptances.

3.20

41,362

40,806

43,947'

44,304

44,939

n.a.

4. Data for March 1978 and for period before that are outstanding collections
only.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of deposit denominated in U.S. dollars issued by banks abroad. For description of changes in data reported by nonbanks, see July 1979 BULLETIN, p. 550.
A Liabilities and claims of banks in the United States were increased, beginning
in December 1981, by the shift from foreign branches to international banking
facilities in the United States of liabilities to, and claims on, foreign residents.
NOTE. Beginning April 1978, data for banks' own claims are given on a monthly
basis, but the data for claims of banks' own domestic customers are available on
a quarterly basis only.

BANKS' O W N CLAIMS O N U N A F F I L I A T E D F O R E I G N E R S Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1979

1980

1981

Dec.

Dec.

June

Sept

86,181

106,748

117,610

122,477

65,152
7,233
57,919
21,030
8,371
12,659

82,555
9,974
72,581
24,193
10,152
14,041

92,124
11,752
80,372
25,486
11,177
14,309

15,235
1,777
24,928
21,641
1,077
493

18,715
2,723
32,034
26,686
1,757
640

4,160
1,317
12,814
1,911
655
173

5,118
1,448
15,075
1,865
507
179

1982

Maturity; by borrower and area

1 Total
By borrower
Maturity of 1 year or less 1
Foreign public borrowers
All other foreigners
Maturity of over 1 year 1
Foreign public borrowers
All other foreigners

2
3
4
5
6
7

8
9
10
11
12
13

By area
Maturity of 1 year or less 1
Europe
Canada
Latin America and Caribbean

Africa
All other 2
Maturity of over 1 year 1
14
Europe
Canada
15
16
Latin America and Caribbean
17
18
Africa
All other 2
19
1. Remaining time to maturity.
2. Includes nonmonetary international and regional organizations.




Mar.

June

153,914

174,403

199,743

94,957
12,990
81,967
27,520
12,564
14,956

115,885
15,196
100,689
38,029
15,640
22,389

132,875
16,344
116,531
41,528
16,851
24,678

151,417
19,308
132,110
48,326
20,003
28,322

21,149
3,314
33,584
31,509
1,768
801

23,015
3,959
35,590
29,295
2,324
774

27,883
4,634
48,461
31,508
2,457
943

34,228
5,791
58,144
30,578
2,884
1,249

39,076
6,579
67,444
33,788
3,309
1,220

6,312
1,317
15,458
1,679
559
161

6,424
1,347
17,478
1,550
548
172

8,099
1,774
25,088
1,902
899
267

8,435
1,863
27,623
2,236
1,056
315

9,340
2,345
32,340
2,455
1,275
571

Dec. A '

A Liabilities and claims of banks in the United States were increased, beginning
in December 1981, by the shift from foreign branches to international banking
facilities in the United States of liabilities to, and claims on, foreign residents.

Nonbank-Reported

Data

A63

CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 1

3.21

Billions of dollars, end of period
1980
Area or country

1978 2

1982

1981

1979
June

Sept.

Dec.

Mar.

June

Sept.

Dec.

Mar.

June''

266.2

303.9

328.8

339.3

352.0

372.1

382.8

399.8

412.3

411.0

419.2

124.7
9.0
12.2
11.3
6.7
4.4
2.1
5.3
47.3
6.0
20.6

138.4
11.1
11.7
12.2
6.4
4.8
2.4
4.7
56.4
6.3
22.4

154.2
13.1
14.1
12.7
6.9
4.5
2.7
3.3
64.4
7.2
25.5

158.8
13.6
13.9
12.9
7.2
4.4
2.8
3.4
66.7
7.7
26.1

162.1
13.0
14.1
12.1
8.2
4.4
2.9
5.0
67.4
8.4
26.5

168.5
13.6
14.5
13.3
7.7
4.6
3.2
5.1
68.5
8.9
29.1

168.3
13.8
14.7
12.1
8.4
4.2
3.1
5.2
67.0
10.8
28.9

172.2
14.1
16.0
12.7
8.6
3.7
3.4
5.1
68.8
11.8
28.0

173.9
13.3
15.3
12.9
9.8
4.0
3.7
5.5
69.1
11.0
29.4

172.1
13.1
15.8
12.4
8.9
4.0
4.0
5.3
68.7
11.4
28.4

170.3
13.8
16.3
12.6
8.8
4.0
3.9
5.1
66.4
10.9
28.5

13 O t h e r developed countries
14
Austria
15
Denmark
16
Finland
17
Greece
18
Norway
19
Portugal
20
21
Turkey
22
O t h e r Western E u r o p e
South Africa
23
24
Australia

19.4
1.7
2.0
1.2
2.3
2.1
.6
3.5
1.5
1.3
2.0
1.4

19.9
2.0
2.2
1.2
2.4
2.3
.7
3.5
1.4
1.4
1.3
1.3

20.3
1.8
2.2
1.3
2.5
2.4
.6
3.9
1.4
1.6
1.5
1.2

20.6
1.8
2.2
1.2
2.6
2.4
.7
4.2
1.3
1.7
1.2
1.2

21.6
1.9
2.3
1.4
2.8
2.6
.6
4.4
1.5
1.7
1.1
1.3

23.5
1.8
2.4
1.4
2.7
2.8
.6
5.5
1.5
1.8
1.5
1.5

24.8
2.1
2.3
1.3
3.0
2.8
.8
5.7
1.4
1.8
1.9
1.7

26.4
2.2
2.5
1.4
2.9
3.0
1.0
5.8
1.5
1.9
2.5
1.9

28.4
1.9
2.3
1.7
2.8
3.1
1.1
6.6
1.4
2.1
2.8
2.5

30.5
2.1
2.5
1.6
2.8
3.2
1.1
7.1
1.5
2.2
3.2
3.1

31.6
2.1
2.6
1.6
2.5
3.2
1.5
7.2
1.4
2.2
3.4
3.8

25 O P E C countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries

22.7
1.6
7.2
2.0
9.5
2.5

22.9
1.7
8.7
1.9
8.0
2.6

20.9
1.8
7.9
1.9
6.9
2.5

21.4
1.9
8.5
1.9
6.7
2.4

22.7
2.1
9.1
1.8
6.9
2.8

21.7
2.0
8.3
2.1
6.7
2.6

22.2
2.0
8.8
2.1
6.8
2.6

23.5
2.1
9.2
2.5
7.1
2.6

24.4
2.2
9.6
2.5
7.6
2.5

24.7
2.3
9.4
2.7
8.2
2.2

25.3
2.3
9.4
2.7
8.6
2.3

31 N o n - O P E C developing countries

52.6

63.0

67.7

73.0

77.4

82.2

84.8

90.2

95.8

94.0

100.0

3.0
14.9
1.6
1.4
10.8
1.7
3.6

5.0
15.2
2.5
2.2
12.0
1.5
3.7

5.6
15.3
2.7
2.2
13.6
1.4
3.6

7.6
15.8
3.2
2.4
14.4
1.5
3.9

7.9
16.2
3.7
2.6
15.9
1.8
3.9

9.5
17.0
4.0
2.4
17.0
1.8
4.7

8.5
17.5
4.8
2.5
18.2
1.7
3.8

9.3
17.7
5.5
2.5
20.0
1.8
4.2

9.3
19.0
5.8
2.6
21.5
2.0
4.1

9.3
18.9
5.6
2.2
22.1
1.8
4.0

8.9
20.2
6.0
2.5
23.9
2.3
3.9

.0
2.9
.2
1.0
3.9
.6
2.8
1.2
.2

.1
3.4
.2
1.3
5.4
1.0
4.2
1.5
.5

.1
3.8
.2
1.2
7.1
1.1
4.6
1.5
.5

.1
4.1

.5

.2
4.2
.3
1.5
7.1
1.1
5.1
1.6
.6

.2
4.4
.3
1.3
7.7
1.2
4.8
1.6
.5

.2
4.6
.3
1.8
8.8
1.4
5.1
1.5
.7

.2
5.1
.3
1.5
8.6
1.4
5.6
1.4
.8

.2
5.1
.3
2.0
9.4
1.7
6.0
1.5
1.0

.2
5.1
.5
1.6
8.6
1.7
5.8
1.3
1.0

.3
5.8
.5
2.1
8.8
1.8
6.2
1.3
1.2

Other Africa 4

.4
.6
.2
1.4

.6
.6
.2
1.7

.8
.5
.2
1.9

.6
.6
.2
2.1

.8
.7
.2
2.1

.8
.6
.2
2.2

.7
.5
.2
2.1

1.0
.7
.2
2.2

1.1
.7
.2
2.3

1.3
.7
.2
2.3

1.3
.7
.2
2.3

52 Eastern E u r o p e
53
U.S.S.R
54
Yugoslavia
Other
55

6.9
1.3
1.5
4.1

7.3
.7
1.8
4.8

7.2
.5
2.1
4.5

7.3
.5
2.1
4.7

7.4
.4
2.3
4.6

7.7
.4
2.4
4.8

7.7
.5
2.5
4.8

7.7
.4
2.5
4.7

7.7
.6
2.5
4.7

7.0
.4
2.4
4.2

6.4
.4
2.3
3.7

31.0
10.4
.7
7.4
.8
3.0
.1
4.2
3.9
.5

40.4
13.7
.8
9.4
1.2
4.3
.2
6.0
4.5
.4

44.3
13.7
.6
9.8
1.2
4.9
.2
6.9
5.9
.4

44.6
13.2
.6
10.1
1.3
5.6
.2
7.5
5.6
.4

47.0
13.7
.6
10.6
2.1
5.4
.2
8.1
5.9
.3

53.7
15.5
.7
11.9
2.3
6.5
.2
8.4
7.3
.9

59.3
17.9
.7
12.6
2.4
6.9
.2
10.3
8.1
.3

61.7
21.3
.8
12.1
2.2
6.7
.2
10.3
8.0
.1

63.6
18.9
.7
12.6
3.2
7.5
.2
11.8
8.6
.1

64.5
19.8
.7
11.6
3.2
7.0
.2
12.8
9.2
.1

67.3
22.5
.7
11.6
3.0
6.8
.2
13.0
9.5
.1

9.1

11.7

14.3

13.7

14.0

14.9

15.7

18.2

18.7

18.2

18.3

1 Total
2 G - 1 0 countries and Switzerland
3
Belgium-Luxembourg
4
France
Germany
5
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10
United Kingdom
Canada
11
12
Japan

32
33
34
35
36
37
38

39
40
41
42
43
44
45
46
47
48
49
50
51

Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Other Latin America
Asia
China
Mainland
Taiwan
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
Africa
Egypt
Morocco

56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 5
62
Lebanon
Hong Kong
63
64
Singapore
65
Others 6
66 Miscellaneous and unallocated 7

1. T h e banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. T o minimize duplication, the data are adjusted to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.18 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches). However,
see also footnote 2.
2. Beginning with data for June 1978, the claims of the U.S. offices




1.1
1.1

in this table include only banks' own claims payable in dollars. For earlier dates
the claims of the U.S. offices also include customer claims and foreign currency
claims (amounting in June 1978 to S10 billion).
3. In addition to the Organization of Petroleum Exporting Countries shown
individually, this group includes other members of O P E C (Algeria, G a b o n , Iran,
Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and U n i t e d A r a b Emirates) as
well as Bahrain and O m a n (not formally members of O P E C ) .
4. Excludes Liberia.
5. Includes Canal Z o n e beginning December 1979.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.

A64
3.22

International Statistics • October 1982
L I A B I L I T I E S T O U N A F F I L I A T E D F O R E I G N E R S R e p o r t e d by N o n b a n k i n g Business Enterprises in the
U n i t e d States 1
Millions of dollars, end of period
1981
Type, and area or country

1979

1980

1982

1981
June'

Sept. '

Dec. '

Mar.

1 Total

17,383 r

22,125'

22,001

21,696

23,347

22,001

21,460'

2 Payable in dollars
3 Payable in foreign currencies 2

14,288'
3,095'

18,394'
3,731'

18,367
3,635

18,393
3,303

20,218
3,129

18,367
3,635

18,785'
2,675'

By type
4 Financial liabilities
Payable in dollars
5
Payable in foreign currencies
6

7,476 r
5,192'
2,284'

11,282'
8,494'
2,788'

11,723
9,130
2,593

11,730
9,351
2,378

12,894
10,592
2,302

11,723
9,130
2,593

11,930'
10,043'
1,887'

7 Commercial liabilities
8
Trade payables
Advance receipts and other liabilities
9

9,906'
4,591'
5,315

10,843'
4,940'
5,903

10,278
4,647
5,631

9,966
4,488
5,479

10,453
4,364
6,089

10,278
4,647
5,631

9,530
3,961
5,569

9,095
811 r

9,900
943'

9,237
1,041

9,042
924

9,626
827

9.237
1,041

8,742
788

4,649'
322'
175
497
829
170
2,477'

6,467'
465'
327
582
681
354
3,923'

6,667
431
636
491
738
715
3,531

6,257
519
372
451
772
345
3,672

7,824
482
846
430
664
465
4,773

6,667
431
636
491
738
715
3,531

7,584'
534'
856'
503
735'
707
4,143'

10
11

12
13
14
15
16
17
18

Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

532

964

958

978

977

958

1,483
375
81
18
514
121
72

3,103
964
1
23
1,452
99
81

3,114
1,279
7
22
1,045
102
98

3,597
1,272
1
20
1,538
98
91

3,247
1,019
6
20
1,395
107
90

3,114
1,279
7
22
1,045
102
98

2,968'
1,095
6
27
1,123'
67
97

804
726
31

723
644
38

957
792
47

869
750
29

814
696
30

957
792
47

450
293
63'

Africa
Oil-exporting countries 4

4
1

11
1

3
0

5
0

3
1

3
0

2
0

All other 5

4

15

24

24

29

24

12

3,771
67
573
545
221
424
884

3,981
72
558
617
225
380
1,029

3,961
78
575
590
238
569
925

3,771
67
573
545
221
424
884

3,421
50
504
473
232
400
824

19

Canada

20
21
22
23
24
25
26

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

27
28
29

Asia
Japan
Middle East oil-exporting countries 3

30
31
32
33
34
35
36
37
38
39

Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

40

Canada

41
42
43
44
45
46
47

Latin America
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

48
49
50

Japan
Middle East oil-exporting countries 3

3,707'
137
467
545
227
316'
1,077

4,402'
90
582
679
219
499'
1,209

914

924

876

870

735

834

870

857

1,323
69
32
203
21
257
301

1,259
8
75
111
35
326
319

986
2
67
67
2
293
276

1,149
4
72
54
34
319
290

1,087
3
113
61
11
345
273

986
2
67
67
2
293
276

770
22
71
83
27
176
194

2,991
583
1,014

3,034
802
890

3,285
1,094
910

2,803
867
837

3,221
775
881

3,285
1,094
910

3,214
1,081
816

51
52

Africa
Oil-exporting countries 4

728
384

817
517

703
344

676
392

757
355

703
344

664
247

53

All other 5

233

456

664

622

593

664

604

1. For a description of the changes in the International Statistics tables, see July
1979 BULLETIN, p. 550.
2. Before December 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.




3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United A r a b Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.

Nonbank-Reported
3.23

CLAIMS O N U N A F F I L I A T E D F O R E I G N E R S
United States 1
Millions of dollars, end of period

Data

A65

Reported by Nonbanking Business Enterprises in the

1981
Type, and area or country

1979

1980 '

1982

1981
June '

Sept. '

Dec. '

Mar. '

1 Total

31,375'

34,743

35,790

35,638

34,544

35,790

30,042

2 Payable in dollars
3 Payable in foreign currencies 2

28,183'
3,193

31,803
2,940

32,206
3,584

32,596
3,042

31,541
3,003

32,206
3,584

27,435
2,607

By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies

18,484'
12,847'
11,931'
916
5,637
3,810
1,826

20,057
14,220
13,445
775
5,837
4,154
1,683

20,906
14,694
14,080
614
6,212
3,758
2,454

20,409
14,683
13,956
727
5,726
3,988
1,738

19,586
13,775
13,048
727
5,811
4,116
1,695

20,906
14,694
14,080
614
6,212
3,758
2,454

17,658
12,590
12,133
457
5,068
3,439
1,629

11 Commercial claims
12
Trade receivables
13
Advance payments and other claims

12,892
12,188
704

14,686
13,953
733

14,884
13,944
940

15,229
14,359
870

14,959
14,048
911

14,884
13,944
940

12,384
11,449
935

14
15

12,441
450

14,203
483

14,368
516

14,652
577

14,377
582

14,368
516

11,864
520

6,179
195
337
230
51
59
4,992

4,592
43
325
244
50
87
3,505

5,213
174
377
139
52
116
4,009

4,846
26
348
320
68
100
3,659

4,592
43
325
244
50
87
3,505

4,511
16
422
197
79
53
3,502

16
17
18
19
20
21
22

Payable in dollars
Payable in foreign currencies
By area or country
Financial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

6,191'
32
177
409
53
73
5,111

23

Canada

4.997'

5,064

6,624

6,186

6,032

6,624

4,891

24
25
26
27
28
29
30

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

6,293
2,765
30
163
2,011
157
143

7,823
3,479
135
96
2,755
208
137

8,589
3,902
18
30
3,500
313
148

8,121
3,346
33
20
3,421
264
143

7,747
3,262
15
66
3,313
283
143

8,589
3,902
18
30
3,500
313
148

7,377
3,482
27
49
2,797
281
130

31
32
33

Asia
Japan
Middle East oil-exporting countries 3

706
199
16

722
189
20

882
363
37

637
137
19

623
111
29

882
363
37

680
267
36

34
35

Africa
Oil-exporting countries 4

253
49

238
26

168
46

216
39

222
41

168
46

164
43

44

32

51

37

116

51

34

4,909
202
727
589
298
272
901

5,512
233
1,129
591
318
353
928

5,329
234
776
554
303
427
967

5,470
235
784
572
308
474
1,067

5,347
220
767
580
308
404
1,032

5,329
234
776
554
303
427
967

4,342
245
696
444
227
354
1,057

36
37
38
39
40
41
42
43

All o t h e r

5

Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom

44

Canada

859

914

967

1,016

1,017

967

939

45
46
47
48
49
50
51

Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela

2,879
21
197
645
16
708
343

3,765
21
108
861
34
1,101
410

3,464
12
223
668
12
1,020
422

3,821
29
208
824
34
1,121
420

3,726
18
241
726
13
983
454

3,464
12
223
668
12
1,020
422

2,904
80
212
417
23
759
394

52
53
54

Asia
Japan
Middle East oil-exporting countries 3

3,451
1,177
765

3,522
1,052
825

3,914
1,244
901

3,813
1,241
937

3,700
1,129
829

3,914
1,244
901

3,151
1,158
757

55
56

Africa
Oil-exporting countries 4

554
133

655
156

750
152

705
137

717
154

750
152

584
142

57

All other 5

240

318

459

404

451

459

463

1. For a description of the changes in the International Statistics tables, see July
1979 BULLETIN, p. 550.
2. Prior to D e c e m b e r 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.




3. Comprises Bahrain, Iran, Iraq, Kuwait, O m a n , Qatar, Saudi Arabia, and
United A r a b Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.

A66
3.24

International Statistics • October 1982
F O R E I G N T R A N S A C T I O N S IN SECURITIES
Millions of dollars
1982
Transactions, and area or country

1980

1982

1981
Jan.Aug.

Feb.

Mar.

Apr.

May

July

June

A u g .P

U.S. corporate securities

STOCKS

40,298
34,870

40,603
34,835

20,141
17,686

2,524
1,988

2,635
2,506

2,359
2,101

2,622
2,186

2,166
1,863

3 Net purchases, or sales ( - )

5,427

5,768

2,455

536

129

258

436

4 Foreign countries

5,409

5,743

2,418

537

120

252

429

3,116
492
169
-328
310
2,528
887
148
1,206
16
-1
38

3,606
892
-28
39
280
2,209
783
-30
1,140
284
7
-46

1,932
-103
161
106
-287
2,049
-122
151
478
-79
-3
62

347
-6
17
38
-33
317
20
31
137
-6
1
6

166
-51
42
1
-60
223
-118
-19
84
4
-3
6

167
33
29
-9
-66
176

158
-25
11
23
-85
225
2
25
73
39
-3
6

292
2
21
2
-31
297
-45
-69
-133
-54
1

12

306
-48
43
36
6
279
-10
22
104
-21
1
27

0

264
-8
-16
12
-57
364
74
121
100
-42
0
5

18

24

37

9

6

6

4

6

2

15,425
9,964

17,290
12,247

12,368
10,412

929
930

1,619
1,481

2,217
1,485

1,929
1,199

1,483
1,153

1,732
1,623

1,512
1,764

20 Net purchases, or sales ( - )

5,461

5,043

1,956

-1

138

733

730

330

110

-252

21 Foreign countries

5,526

4,976

1,988

10

144

674

690

356

75

-116

22
23
24
25
26
27
28
29
30
31
32
33

1,576
129
212
-65
54
1,257
135
185
3,499
117
5
10

1,356
11
848
70
108
181
-12
132
3,465
44
-1
-7

1,971
115
1,786
45
157
-156
167
133
-303
37
-19
2

16
14
104
0
8
-102
15
-11
-63
52

540
20
396
14
46
59
46
-8
126
-18
-13
1

704
46
500
11
48
91
23
15
-112
61

-32
-18
102
0
31
-108
4
18
-78
-31

0
0

244
23
115
5
12
67
21
61
22
9
0
-1

185
3
256
-4
-22
-63
1
17
-68
-60

2

169
12
225
17
15
-102
29
26
-41
-29
-6
-3

-65

66

-32

-11

-6

59

40

1 Foreign purchases
2 Foreign sales

5
6
7
8
9
10
11
12
13
14
15
16

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries

17 Nonmonetary international and
regional organizations

-I

0

53
61
-40
0

2,648
2,648

3,171
2,646

303

0

525

299

-6

523

BONDS2

18 Foreign purchases
19 Foreign sales

Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries

34 Nonmonetary international and
regional organizations

0

0

0

0

2

-26

35

-136

Foreign securities
35 Stocks, net purchases, or sales ( - )
36
Foreign purchases
37
Foreign sales

-2,136
7,893
10,029

-39
9,261
9,300

168
4,187
4,019

38
509
471

31
692
661

-65
383
448

-115
486
601

79
619
540

44
444
400

11
531
520

38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
40
Foreign sales

-1,001
17,084
18,086

-5,436
17,540
22,976

-2,832
17,893
20,724

-99
1,513
1,612

-540
2,549
3,089

-33
2,254
2,287

461
2,755
2,294

-762
2,033
2,795

-544
2,288
2,832

-1,208
3,279
4,487

41 Net purchases, or sales ( - ) , of stocks and bonds .

-3,138

-5,475

-2,664

-62

-509

-98

346

-684

-500

-1,197

42
43
44
45
46
47
48
49

-4,014
-1,108
-1,948
86
-1,147
24
79

-4,463
-681
-3,698
170
-291
-53
90

-2,352
-557
-1,579
728
-963
-17
37

-121
-58
-102
67
-21
-1
-7

-525
109
-628
96
-115
-5
17

-32
-127
120
202
-209
-17

-305
-425
-81
76
127

0

126
-40
76
144
-53
-1
-1

-2

-507
-21
-266
26
-255
3
6

-999
-128
-533
49
-433
17
29

876

-1,012

-312

60

16

-66

219

-379

7

-198

Foreign countries
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
Nonmonetary international and
regional organizations

1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
O m a n , Qatar, Saudi Arabia, and United A r a b Emirates (Trucial States).




0

2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securities sold
abroad by U . S . corporations organized to finance direct investments abroad.

Investment Transactions and Discount Rates
3.25

M A R K E T A B L E U.S. T R E A S U R Y B O N D S A N D NOTES

A67

Foreign Holdings and Transactions

Millions of dollars
1982

1982
1980

Country or area

1981
Jan.Aug.

Mar.

Feb.

Apr.

May

June

Aug .p

July

Holdings (end of period) 1
1 Estimated total 2

57,549

70,201

73,800

75,794

77,268

77,836

78,199

79,655

80,477

2 Foreign countries 2

52,961

64,530

68,273

70,251

71,925

72,950

73,005

75,363

76,737

3 Europe2
4
Belgium-Luxembourg
5
Germany 2
6
Netherlands
7
Sweden
8
Switzerland 2
9
United Kingdom
10
Other Western Europe
11
Eastern E u r o p e
12 Canada

24,468
77
12,327
1,884
595
1,485
7,323
111
0
449

23,976
543
11,861
1,955
643
846
6,709
1,419
0
514

25,332
363
12,845
2,038
635
984
6,931
1,535
0
499

26,085
539
13,055
2,052
697
1,025
7,037
1,680
0
458

26,393
709
13,231
2,139
662
1,157
6,737
1,757
0
473

26,021
340
12,974
2,152
655
1,134
6,811
1,954
0
506

25,738
152
13,022
2,176
652
1,039
6,674
2,023
0
410

26,454
155
13,535
2,147
650
1,016
6,923
2,028
0
445

27,729
576
13,959
2,312
644
1,100
7,125
2,012
0
352

13
14
15
16
17
18
19
20

999
292
285
421
26,112
9,479
919
14

736
286
319
131
38,671
10,780
631
2

728
286
337
104
41,310
11,022
400
5

760
286
370
103
42,531
11,203
401
17

886
306
383
196
43,750
11,381
403
22

938
296
437
204
45,060
11,396
405
21

910
253
432
224
45,516
11,137
405
26

848
229
402
217
47,189
11,289
405
23

1,166
222
611
333
47,175
11,247
305
12

4,588
4,548
36

5,671
5,637
1

5,527
5,493
-4

5,543
5,529
-4

5,343
5,278
-4

4,886
4,822
-4

5,194
5,123
-4'

4,292
4,167
-4

3,740
3,629
-4

Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
All other

21 Nonmonetary international and regional organizations
22
International
23
Latin American regional

Transactions (net purchases, or sales

- ) during period)

24 Total 2

6,066

12,652

10,276

2,313

1,994

1,474

568

362

1,457

822

25 Foreign countries 2
26
Official institutions
27
Other foreign 2
28 Nonmonetary international and regional organizations

6,906
3,865
3,040
-843

11,568
11,694
-127
1,085

12,207
10,285
1,921
-1,931

2,423
2,343
80
-110

1,978
1,314
664
16

1,674
812
862
-200

1,025
1,474
-448
-457

54
318
-264
309

2,358
2,817
-458
-903

1,374
367
1,007
-553

MEMO: Oil-exporting countries
29 Middle East 3
30 Africa 4

7,672
327

11.156
-289

7,169
-327

1,373
-119

470
0

906
2

907
2

924
0

1,313
0

257
-100

1. Estimated official and private holdings of marketable U.S. Treasury securities
with an original maturity of more than 1 year. D a t a are based on a benchmark
survey of holdings as of Jan. 31,1971, and monthly transactions reports. Excludes
nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.

3.26

2. Beginning December 1978, includes U.S. Treasury notes publicly issued to
private foreign residents denominated in foreign currencies.
3. Comprises Bahrain, Iran, Iraq, Kuwait, O m a n , Qatar, Saudi Arabia, and
United A r a b Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.

DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Rate on Sept. 30, 1982
Percent

Argentina
Austria . .
Belgium..
Brazil
Canada . .
Denmark.

Rate on Sept. 30, 1982
Country

Country

226.0
6.25
12.5
49.0
12.98

11.00

Month
effective
Aug.
Aug.
Sept.
Mar.
Sept.
Oct.

1982
1982
1982
1981
1982
1980

Percent
France 1
Germany, Fed. Rep. of
Italy
Japan
Netherlands
Norway

1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank




Rate on Sept. 30, 1982
Country

either

13.75
7.0
18.0
5.5
7.0
9.0

Month
effective
Sept.
Aug.
Aug.
Dec.
Aug.
Nov.

1982
1982
1981
1981
1982
1979

Sweden
Switzerland
United Kingdom'
Venezuela

Percent

Month
effective

10.0
5.0

Mar. 1982
Aug. 1982

14.0

Aug. 1981

discounts or makes advances against eligible commercial paper and/or
government
commercial
banks
or
brokers.
For
countries
with
more than one rate applicable to such discounts or advances, the rate
shown is the one at which it is understood the central bank transacts the
largest proportion of its credit operations.

A68
3.27

International Statistics • October 1982
F O R E I G N SHORT-TERM INTEREST R A T E S
Percent per annum, averages of daily figures
1982
Country, or type

1979

1980

1981
Apr.

Mar.
1
2
3
4
5
6
7
8
9
10

May

June

July

Aug.

Sept.

Eurodollars
United Kingdom
Canada
Germany
Switzerland

11.96
13.60
11.91
6.64
2.04

14.00
16.59
13.12
9.45
5.79

16.79
13.86
18.84
12.05
9.15

14.90
13.53
15.67
9.84
6.37

15.20
13.69
15.74
9.30
4.96

14.53
13.31
15.46
9.12
3.80

15.45
12.96
16.84
9.22
5.39

14.37
12.35
16.23
9.41
4.32

11.57
11.08
14.76
8.94
4.07

11.74
10.84
13.57
8.13
3.97

Netherlands
France
Italy
Belgium
Japan

9.33
9.44
11.85
10.48
6.10

10.60
12.18
17.50
14.06
11.45

11.52
15.28
19.98
15.28
7.58

8.90
15.21
20.63
14.02
6.43

8.20
16.36
20.62
14.95
6.57

8.62
16.17
20.59
15.00
6.80

8.75
15.67
20.51
15.38
7.14

8.95
14.64
20.18
15.22
7.15

8.66
14.43
19.52
14.00
7.14

7.85
14.09
18.56
13.06
7.19

NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.

3.28

FOREIGN EXCHANGE RATES
Currency units per dollar
1982
Country/currency

1979

1980

1981
Apr.

May

June

July

Aug.

Sept.

1
2
3
4
5
6
7
8
9
10

Argentina/peso
Australia/dollar 1
Austria/schilling
Belgium/franc
Brazil/cruzeiro
Canada/dollar
Chile/peso
China, P.R./yuan
Colombia/peso
Denmark/krone

n.a.
111.77
13.387
29.342
n.a.
1.1603
n.a.
n.a.
n.a.
5.2622

n.a.
114.00
12.945
29.237
n.a.
1.1693
n.a.
n.a.
n.a.
5.6345

n.a.
114.95
15.948
37.194
92.374
1.1990
n.a.
1.7031
n.a.
7.1350

11761.36
105.15
16.853
45.292
151.03
1.2252
39.407
1.8565
61.057
8.1591

13942.50
105.94
16.274
43.666
159.08
1.2336
39.537
1.8123
62.365
7.8444

15025.00
103.23
17.114
46.183
167.70
1.2756
43.373
1.9014
63.318
8.3481

19671.43
101.09
17.342
47.029
177.97
1.2699
47.228
1.9300
65.539
8.5402

21172.73
97.83
17.431
47.483
188.25
1.2452
54.941
1.9432
65.179
8.6482

25961.90
95.820
17.597
48.300
201.73
1.2348
62.643
1.9567
65.921
8.8038

11
12
13
14
15
16
17
18
19
20

Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Indonesia/rupiah
Iran/rial
Ireland/pound 1
Israel/shekel

3.8886
4.2566
1.8342
n.a.
n.a.
8.1555
n.a.
n.a.
204.65
n.a.

3.7206
4.2250
1.8175
n.a.
n.a.
7.8866
n.a.
n.a.
205.77
n.a.

4.3128
5.4396
2.2631
n.a.
5.5678
8.6807
n.a.
79.324
161.32
n.a.

4.6097
6.2457
2.3970
63.541
5.8270
9.3923
651.14
n.a.
144.22
20.014

4.5045
6.0237
2.3127
62.892
5.7549
9.2965
653.67
n.a.
149.60
21.184

4.6763
6.5785
2.4292
67.795
5.8669
9.4668
654.98
n.a.
141.92
23.179

4.7278
6.8560
2.4662
69.434
5.9025
9.5633
659.18
n.a.
139.48
25.320

4.7515
6.9285
2.4813
70.165
6.0598
9.5741
662.11
n.a.
138.54
26.940

4.8014
7.0649
2.5055
70.946
,6.1253
9.6495
662.75
n.a.
136.53
28.922

2.1
22
23
24
25
26
27
28
29
30

Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar 1
Norway/krone
Peru/sol
Philippines/peso
Portugal/escudo

831.10
219.02
2.1721
22.816
2.0072
102.23
5.0650
n.a.
n.a.
48.953

856.20
226.63
2.1767
22.968
1.9875
97.34
4.9381
n.a.
n.a.
50.082

1138.60
220.63
2.3048
24.547
2.4998
86.848
5.7430
n.a.
7.8113
61.739

1321.60
244.11
2.3395
46.152
2.6594
76.562
6.0820
591.29
8.3565
72.493

1283.37
236.96
2.2907
46.903
2.5709
77.025
5.9675
622.87
8.4016
70.610

1358.43
251.20
2.3392
47.716
2.6848
74.951
6.1869
656.11
8.4511
78.477

1382.26
255.03
2.3554
48.594
2.7239
73.990
6.3557
693.56
8.4802
84.514

1392.60
259.04
2.3528
90.187
2.7295
73.217
6.6785
730.97
8.5142
85.914

1411.19
263.29
2.3610
101.86
2.7444
72.419
6.8999
772.08
8.6521
87.702

31
32
33
34
35
36
37
38
39
40

Singapore/dollar
South Africa/rand/ 1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Thailand/baht
United Kingdom/pound 1
Venezuela/bolivar

n.a.
118.72
n.a.
67.158
15.570
4.2892
1.6643
n.a.
212.24
n.a.

n.a.
128.54
n.a.
71.758
16.167
4.2309
1.6772
n.a.
232.58
n.a.

2.1053
114.77
n.a.
92.396
18.967
5.0659
1.9674
21.731
202.43
4.2781

2.1329
94.880
721.03
106.15
20.575
5.9144
1.9624
23.025
177.20
4.3023

2.0886
94.010
724.35
102.987
20.365
5.7888
1.9500
23.000
181.03
4.2991

2.1379
89.57
738.30
109.215
20.750
6.0244
2.0789
23.000
175.63
4.2953

2.1464
87.20
743.06
111.57
20.895
6.1159
2.0960
23.000
173.54
4.2951

2.1594
86.77
744.45
112.079
20.895
6.1441
2.1119
23.000
172.50
4.2981

2.1671
86.830
743.61
113.049
20.918
6.2313
2.1418
23.000
171.20
4.3006

88.09

87.39

102.94

114.07

111.03

116.97

118.91

119.63

120.93

MEMO:

United States/dollar 2

1. Value in U.S. cents.
2. Index of weighted-average exchange value of U.S. dollar against currencies of other G - 1 0 countries plus Switzerland. March 1973 = 100.
Weights are 1972-76 global trade of each of the 10 countries. Series




revised as of August 1978. For description and back data, see " I n d e x of
the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on page
700 of the August 1978 BULLETIN.
NOTE. Averages of certified noon buying rates in New York for cable transfers.

A69

Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE TO TABULAR

Symbols and
c
e
p
r
*

PRESENTATION

Abbreviations

Corrected
Estimated
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)

General

0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs

Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable

Information

Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct

STATISTICAL

obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.

RELEASES

List Published Semiannually,

with Latest Bulletin

Reference

Anticipated schedule of release dates for periodic releases

SPECIAL

Issue
June 1982

Page
A76

TABLES

Published Irregularly, with Latest Bulletin
Assets and liabilities of U.S.
Commercial bank assets and
Commercial bank assets and
Commercial bank assets and
Commercial bank assets and

branches and agencies of foreign banks, June 30, 1982
liabilities, September 30, 1981
liabilities, December 31, 1981
liabilities, March 31, 1982
liabilities, June 30, 1982

Special tables begin on next page.




Reference
October
January
April
July
October

1982
1982
1982
1982
1982

A76
A70
All
A70
A70

A70
4.20

Special Tables • October 1982
D O M E S T I C A N D F O R E I G N OFFICES, Commercial Banks with Assets of $100 Million or over'p
Consolidated Report of Condition; June 30, 1982
Millions of dollars
Banks with foreign offices 2
Insured
Foreign
offices 3

1 Total assets
2 Cash and due from depository institutions
3
Currency and coin (U.S. and foreign)
4
Balances with Federal Reserve Banks
5
Balances with other central banks
6
D e m a n d balances with commercial banks in United States
7
All other balances with depository institutions in United States and with banks in foreign
countries
8
Time and savings balances with commercial banks in United States
9
Balances with other depository institutions in United States
10
Balances with banks in foreign countries
11
Foreign branches of other U.S. banks
12
Other banks in foreign countries
13
Cash items in process of collection
14 Total securities, loans, and lease financing receivables
15 Total securities, book value
16
U . S . Treasury
17
Obligations of other U.S. government agencies and corporations
18
Obligations of states and political subdivisions in United States
19
All other securities
20
Other bonds, notes, and debentures
21
Federal Reserve and corporate stock
22
Trading account securities
23
24
25
26
27

Federal funds sold and securities purchased under agreements to resell
Total loans, gross
LESS: Unearned income on loans
Allowance for possible loan loss
EQUALS: Loans, net

Total loans, gross, by category
28 Real estate loans
29
Construction and land development
30
Secured by farmland
31
Secured by residential properties
32
1- to 4-family
33
FHA-insured or VA-guaranteed
34
Conventional
35
Multifamily
36
FHA-insured
37
Conventional
38
Secured by nonfarm nonresidential properties

1,659,191

1,217,234

388,174

877,777

441,957

280,847
14,930
18,041
3,618
18,141

226,729
8,671
12,595
3,618
7,521

127,212
274

54,119
6,259
5,446

3,522
215

99,517
8,397
12,334
96
7,306

160,979
17,276
732
142,971

8

121,195
5,964
274
114,956
17,049
97,908
1,745

19,711
2,504
105
17,102
3,676
13,426
51,673

20,073
8,808
353
10,913

65,138

140,905
8,468
379
132,059
20,725
111,334
53,418

1,246,761

879,246

208,877

670,369

367,515

234,145
63,184
38,893
105,790
26,278
10,964
1,890
13,424

125,350
28,788
16,017
57,664

9,736

8,548
1,401
12,933

27
632
8,870
6,989
173
1,709

115,614
28,580
15,990
57,032
14,011
1,559
1,228
11,224

108,795
34,396
22,876
48,126
3,397
2,416
489
491

60,874
960,939
14,520
10,253
936,166

36,712
718,659
7,543
7,519
703,597

920
197,657
1,831
291
195,536

35,791
521,002
5,712
7,228
508,062

24,162
242,279
6,977
2,734
232,568

224,387

137,652

8,660

128,992
32,242
848
70,482
66,815
3,959
62,857
3,667
224
3,443
25,420

86,735
11,051
1,426
48,520
46,270
2,019
44,252
2,249
73
2,177
25,738

55,590
4,434
7,841
3,681
4,160
19,875
724
19,151
10,860
12,580

6,426
596
3,782

8,765
6,062
2,703
6,191
230,096
206,421
23,675

1,899
405
1,494
5,304
76,332

61,733
50,471
20,980
9,952
8,558
1,394
3,535
16,004
3,283
4,110
8,612
11,262
3,851

39 Loans to financial institutions
40
R E I T s and mortgage companies in United States
41
Commercial banks in United States
42
U.S. branches and agencies of foreign banks
43
Other commercial banks
44
Banks in foreign countries
45
Foreign branches of other U.S. banks
46
Other
47
Finance companies in United States
48
Other financial institutions

71
72
73
74
75
76
77
78
79
80

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets
Investment in unconsolidated subsidiaries and associated companies
Customers' liability on acceptances outstanding
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Net due from foreign branches, foreign subsidiaries, Edge and agreement subsidiaries...
Other




22,882

261

208

89,203
4,532
8,501
3,988
4,513
45,609

1,020
44,589

11,118
19,443

49 Loans for purchasing or carrying securities
50
Brokers and dealers in securities
51
Other
52 Loans to finance agricultural production and other loans to farmers
53 Commercial and industrial loans
54
U.S. addressees (domicile)
55
Non-U.S. addressees (domicile)
56 Loans to individuals for household, family, and other personal expenditures
57
Installment loans
58
Passenger automobiles
59
Credit cards and related plans
60
Retail (charge account) credit card
61
Check and revolving credit
62
Mobile homes
63
Other installment loans
64
Other retail consumer goods
65
Residential property repair and modernization
66
Other installment loans for household, family, and other personal expenditures
67
Single-payment loans
68 All other loans
69
Loans to foreign governments and official institutions
70
Other

Domestic
offices

10,330
7,251
3,079
6,911
351,071
222,265

128,806
137,915

76,182

(4)

10,620

W

11,720

(4 9)3
H4

(0449)2
1,063

(4)

47.311
32,999
14.312

25,537
23,352
2,185

69,596
57,104
16,559
21,022
17,041
3,982
3,206
16,317
4,241
3,590
8,486
12,492
21,773
9,647
12,126

13,587
14,689
1,495
95,075
1,446
59,120
18,798
40,322
(4)
34,509

2,685
1,452
93
50,540
1,076
15,870

10,902
13,236
1,402
93,252
370
43,251

1,989
9,202
901
10,221
62
426

27,033
22,599

9,732

8

21,684
11,911

(44)

4

( )

(44)
H

Commercial Banks
4.20

A71

Continued
Banks with foreign offices 2
Item

Insured
Foreign
offices 3

Total

Domestic
offices

Banks
without
foreign
offices

81 Total liabilities and equity capital5

1,659,191

1,217,234

441,957

1,565,085

1,156,351

(*)
387,925

(4)

82 Total liabilities excluding subordinated debt

817,142

408,734

83 Total deposits
84
Individuals, partnerships, and corporations
85
U.S. government
86
States and political subdivisions in United States
87
All other
88
Foreign governments and official institutions
89
Commercial banks in United States
90
U.S. branches and agencies of foreign banks
91
Other commercial banks in United States
92
Banks in foreign countries
93
Foreign branches of other U.S. banks
94
Other banks in foreign countries
95
Certified and officers' checks, travelers checks, and letters of credit sold for cash

1,261,124
972,857
4,436
55,271
216,631
26,865
69,474

320,153
168,123
264
557
150,491
19,884
27,519
3,357
24,162
103,088
17,907
85,181
719

580,391
486,376
2,872
26,288
57,130
6,805
33,549
1,754
31,794
16,776
2,025
14,752
7,724

360,581
318,359
1,301
28,427
9,010
176
8,406

11,929

900,544
654,499
3,136
26,845
207,621
26,689
61,068
5,111
55,956
119,865
19,932
99,933
8,443

153,431

118,332

370

117,962

35,099

44,342
6,261
38,081
2,201
103,986
59,809

40,223
4,282
35,941
1,449
95,802
59,383

15,492

4,119
1,979
2,140
752
8,184
427

44,177

36,420

15,492
16
51,893
13,950
27,033
10,910

24,731
4,282
20,449
1,433
92,626
45,432
21,684
25,509

259

3,941

96 Federal funds purchased and securities sold under agreements to repurchase in domestic offices
and Edge and agreement subsidiaries
97 Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed
money
98
Interest-bearing demand notes (note balances) issued to U.S. Treasury
99
Other liabilities for borrowed money
100 Mortgage indebtedness and liability for capitalized leases
101 All other liabilities
102
Acceptances executed and outstanding
103
Net aue to foreign branches, foreign subsidiaries, Edge and agreement subsidiaries
104
Other
105 Subordinated notes and debentures
106 Total equity capital 5
107
Preferred stock
108
Common stock
109
Surplus
110
Undivided profits and reserve for contingencies and other capital reserves
111
Undivided profits
112
Reserve for contingencies and other capital reserves

0
4

( )
120,292

(4)

(4)

(4)

(4)

0(4)
428
(44)
(
)
3,485

(4)

7,757

5,866

4,200

88,241
217
17,129
29,465
41,429
40,586
844

56,683
131
11,150
17,757
27,645
27,256
389

267,952
152,991
520,029
287,385
253,726
33,660
44,610

177,122
78,032
325,237
214,445
185,113
29,333
22,790

0
0
0
0
0
0
0

177,122
78,032
325,237
214,445
185,113
29,333
22,790

90,830
74,959
194,791
72,940
68,613
4,327
21,819

0
15,469
174,948

0
7,968
103,168

0
0
0

0
7,968
103,168

0
7,501
71,780

80,760

(4)

75,583
55,704
19,879

14,588

60,996

(4)

5,176

M

W

[*)
(4)

6,557

(4)

6,229

(4)

(4)

555

5,675
201

327
836

1,647,490
274,875
61,597
941,396
1,241,560
252,802
164,474
36,891

1,207,586
224,210
34,334
707,553
881,835

342,624
125,023
862
197,412
315,403

128,770
34,913

538
15,339

864,963
99,187
33,472
510,141
566,432
183,900
128,233
19,574

439,904
50,665
27,263
233,843
359,725
68,902
35,704
1,978

1,708

194

194

194

1,514

(4)
r)
(4)
r)
r)
r)
r)

(44)
()

(4)
(4)
(4)
r)
r)

1,666
31,557
86
5,979
11,708
13,785
13,330
455

MEMO

Deposits in domestic offices
Total demand
Total savings
Total time
Time deposits of $100,000 or more
Certificates of deposit (CDs) in denominations of $100,000 or more
Other
Savings deposits authorized for automatic transfer and NOW accounts
Money market time certificates of $10,000 and less than $100,000 with original maturities of 26
weeks
121 All savers certificates
122 Demand deposits adjusted 6

113
114
115
116
117
118
119
120

123 Standby letters of credit, total
124
U.S. addressees (domicile)
125
Non-U.S. addressees (domicile)
126 Standby letters of credit conveyed to others through participations (included in total standby
letters of credit)
127 Holdings of commercial paper included in total gross loans
Average for 30 calendar days (or calendar month) ending with report date
128 Total assets
129 Cash and due from depository institutions
130 Federal funds sold ana securities purchased under agreements to resell
131 Total loans
132 Total deposits
133 Time CDs in denominations of $100,000 or more in domestic offices
134 Federal funds purchased and securities sold under agreements to repurchase
135 Other liabilities for borrowed money
136 Number of banks
For notes see end of table.




(4)

04

()

(4)

A72
4.21

Special Tables • October 1982
D O M E S T I C O F F I C E S , Insured C o m m e r c i a l B a n k s with A s s e t s of $100 Million or o v e r 1 7 ' '
Consolidated R e p o r t of Condition; June 30, 1982
Millions of dollars
Member banks
Item

Total

1

Total assets

2
3
4
5
6
7
8
9
10
11

Cash and due from depository institutions
Currency and coin (U.S. and foreign)
Balances with Federal Reserve Banks
Balances with other central banks
D e m a n d balances with commercial banks in United States
All other balances with depository institutions in United States and with banks in foreign
countries
Time and savings balances with commercial banks in United States
Balances with other depository institutions in United States
Balances with banks in foreign countries
Cash items in process of collection

12

Total securities, loans, and lease financing receivables

13
14
15
16
17
18
19
20

Total securities, book value
U.S. Treasury
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions in United States
All other securities
Other bonds, notes, and debentures
Federal Reserve and corporate stock
Trading account securities

21

Federal funds sold and securities purchased under agreements to resell

22
23
24
25

Total loans, gross
LESS: U n e a r n e d income on loans
Allowance for possible loan loss
EQUALS: Loans, net

Nonmember
insured

Insured
National

State

1,319,733

1,114,859

845,225

269,634

204,874

153,635
14,656
17,780
96
17,926

133,065
12,412
17,039
96
12,335

97,921
9,778
12,645
79
9,775

35,144
2,634
4,394
17
2,559

20,570
2,244
741
0
5,592

39,784
11,311
458
28,015
63,393

30,614
7,639
170
22,805
60,571

23,039
5,878
132
17,029
42,604

7,574
1,761
38
5,775
17,966

9,170
3,672
288
5,210
2,823

1,037,884

866,016

658,613

207,403

171,868

224,410
62,976
38,867
105,159
17,408
3,975
1,717
11,716

175,328
46,880
28,431
84,598
15,419
2,384
1,538
11,497

132,870
35,268
22,944
64,012
10,647
1,731
1,162
7,754

42,458
11,613
5,487
20,586
4,772
652
376
3,744

49,081
16,096
10,436
20,560
1,990
1,591
180
218

59,954

50,859

39,278

11,580

9,095

763,282
12,690
9,962
740,630

646,416
9,664
8,714
628,038

491,596
7,269
6,574
477,754

154,820
2,396
2,140
150,284

116,866
3,025
1,248
112,592

215,726
43,293
2,275
119,001
113,085
5,977
107,108
5,916
296
5,620
51,158

172,516
36,513
1,658
95,448
90,733
5,326
85,406
4,715
215
4,500
38,897

141,493
28,456
1,480
79,678
75,908
4,346
71,562
3,770
113
3,657
31,879

31,023
8,058
178
15,770
14,824
980
13,844
945
102
843
7,018

43,211
6,780
616
23,553
22,353
651
21,702
1,200
81
1,119
12,261

37
38

62,016
5,030

39

11,623

57,324
4,689
8,613
19,816
11,131

35,338
3,362
5,657
10,672
6,929

21,986
1,327
2,956
9,145

4,692
341
3,010
551

4,202

221

13,075

8,719

4,356

568

10,106
6,240
3,866
10,046
267,740

6,015

4,092

3,074
2,941
9,185

3,166

557
227

Total loans, gross, by category
Real estate loans
Construction and land development
Secured by farmland
Secured by residential properties
1- to 4-family
FHA-insured or VA-guaranteed
Conventional
Multifamily
34
FHA-insured
35
Conventional
36
Secured by nonfarm nonresidential properties

26
27
28
29
30
31
32
33

Loans to financial institutions
R E I T s and mortgage companies in United States
Commercial banks in United States
40
Banks in foreign countries
41
Finance companies in United States
42
Other financial institutions
43 Loans for purchasing or carrying securities
44
Brokers and dealers in securities
45
Other
4 6 Loans to finance agricultural production and other loans to farmers
47 Commercial and industrial loans

20,368
11,353
13,643
10,663
6,467

4,197
11,495
306,427

48 Loans to individuals for household, family, and other personal expenditures
49
Installment loans
Passenger automobiles
50
Credit cards and related plans
51
Retail (charge account) credit card
52
Check and revolving credit
53
54
Mobile homes
55
Other installment loans
56
Other retail consumer goods
57
Residential property repair and modernization
Other installment loans for household, family, and other personal expenditures
58
59
Single-payment loans
6 0 All other loans

131,329
107,575
37,539
30,975
25,599

Lease financing receivables
62 Bank premises, furniture and fixtures, and other assets representing bank premises
63 Real estate owned other than bank premises
64 All other assets
65
Investment in unconsolidated subsidiaries and associated companies
Customers' liability on acceptances outstanding
66
67
Net due from foreign branches, foreign subsidiaries, Edge and agreement subsidiaries
6K
Other
61




5,376
6,741

104,926

85,737
28,306

27,844
23,236
4,608

32,321
7,523
7,700
17,097
23,754

5,383
24,204
5,940
5,472
12,792
19,189

25,624

23,756

12,891
22,438
2,303
103,473
432
43,677
27,033
32,331

11,792
18,156
1,883
95,738
398
42,779
24,969
27,591

198,606

85,570
70,517
23,071
22,987
19,381
3,607

4,904
19,555
4,875
4,433
10,247
15,053
15,390
8,711
14,692

1,493
72,506

367
30,947
20,821
20,372

925

330

861
69,134

38,687

19,357
15,220
5,235
4,856

3,855
1,001
479
4,649
1,065

1,039
2,545
4,137

1,449
26,403

21,838
9,232
3,131
2,363
768

1,358
8,117
1,583
2,228
4,305

8,367

4,565
1,868

3,081
3,464
391
23,231
31
11,832
4,148
7,220

1,099
4,282
419
7,735
34
898
2,064
4,740

Commercial Banks
4.21

A73

Continued
Member banks
Item

Nonmember
insured

Insured
National

Total

State

69 Total liabilities and equity capital 8

1,319,733

1,114,859

845,225

269,634

204,874

70 Total liabilities excluding subordinated debt

1,225,876

1,036,209

785,736

250,473

189,667

71 Total deposits
72
Individuals, partnerships, and corporations
73
U.S. government
74
States and political subdivisions in United States
All other
75
Foreign governments and official institutions
76
Commercial banks in United States
77
78
Banks in foreign countries
Certified and officers' checks, travelers checks, and letters of credit sold for cash
79

940,971
804,735
4,173
54,715
66,140
6,981
41,955
17,204
11,209

771,172
653,944
3,685
41,316
62,775
6,755
39,550
16,470
9,452

598,421
514,387
2,822
33,976
41,397
4,155
28,524
8.718
5,839

172,752
139,557
863
7,340
21,378
2,600
11,025
7,752
3,613

169,799
150,790
488
13,399
3,365
226
2,405
734
1,757

80 Demand deposits
81
Mutual savings banks
82
Other individuals, partnerships, and corporations
U.S. government
83
84
States and political subdivisions in United States
85
All other
Foreign governments and official institutions
86
Commercial banks in United States
87
88
Banks in foreign countries
89
Certified and officers' checks, travelers checks, and letters of credit sold for cash

267,952
944
206,462
3,410
10,672
35,253
1,668
26,200
7,385
11,209

227,880
819
172,032
3,018
8,759
33,800
1,638
25,039
7,123
9,452

167,749
424
129,573
2,256
6,994
22,664
976
18,720
2,968
5,839

60,131
395
42,459
762
1,766
11,136
662
6,319
4,155
3,613

40,072
125
34,430
392
1,913
1,453
30
1,161
262
1,757

90 Time deposits
91
Mutual savings banks
Other individuals, partnerships, and corporations
92
93
U.S. government
94
States and political subdivisions in United States
95
All other
96
Foreign governments and official institutions
Commercial banks in United States
97
Banks in foreign countries
98

520,029
253
446,018
708
42,187
30,862
5,290
15,754
9,819

423,499
233
362,592
617
31,107
28,951
5,094
14,510
9,347

334,195
162
288,892
517
25,915
18,710
3,156
9,804
5,749

89,304
71
73,700
100
5,192
10,241
1.938
4,705
3,598

96,529
21
83,426
91
11,080
1,911
195
1,244
472

99 Savings deposits
100
Mutual savings banks
101
Other individuals, partnerships, and corporations
Individuals and nonprofit organizations
102
103
Corporations and other profit organizations
104
U.S. government
States and political subdivisions in United States
105
All other
106
Foreign governments and official institutions
107
108
Commercial banks in United States
109
Banks in foreign countries

152,991

119,793

96,477

23,316

33,198

151,057
145,394
5,663
54
1,855
24
23
1

118,268
114,257
4,011
50
1,450
24
23
1

95,337
92,110
3,226
49
1,068
23
22

32,788
31,137
1,651
4
405

*

22,932
22,147
785
1
383
1
1
1

110 Federal funds purchased and securities sold under agreements to repurchase
111 Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed
money
Interest-bearing demand notes (note balances) issued to U.S. Treasury
112
Other liabilities for borrowed money
113
114 Mortgage indebtedness and liability for capitalized leases

153,061

140,800

108,067

32,733

12,260

28,850
6,261
22,588
2,185

26,885
5,513
21,372
1,789

13,852
3,985
9,868
1,510

13,032
1,528
11,504
279

1,965
749
1,216
396

115 All other liabilities
Acceptances executed and outstanding
116
Net due to foreign branches, foreign subsidiaries. Edge and agreement subsidiaries
117
118

100,809
45,859
21,684
33,266

95,562
44,961
21,112
29,489

63,885
33,075
9,935
20,875

31,677
11,885
11,177
8,615

5,247
898
572
3 777

119 Subordinated notes and debentures
120 Total equity capital 8

*

*

*

*

*

*
*
*
*

5,607

4,473

3,048

1,425

1,134

88,250

74,177

56,441

17,736

14,073

287,385
253,726
33,660
44,610

243,836
212,357
31,478
35,076

185,666
164,743
20,923
28,775

58,170
47,615
10,555
6,301

43,550
41,368
2,181
9,534

0
15,469
174,948

0
11,978
139,253

0
9,761
104,169

0
2,217
35,083

0
3,490
35,695

66,172
6,002
1,037

63,355
5,873
641

41,154
4,151
485

22,200
1,721
157

2,817
130
396

1,304,867
149,852
60,735
743,984
926,157
252,802
163,936
21,552

1,101,958
130,667
50,801
630,882
757,536
211,362
151,809
20,375

833,893
97,229
39,663
479,319
589,339
164,208
114,570
9,879

268,065
33,438
11,138
151,563
168,197
47,154
37,239
10,496

202,908
19,185
9,935
113,102
168,620
41,440
12,128
1,177

1,708

1,061

884

177

647

MEMO

121 Time deposits of $100,000 or more
Certificates of deposit (CDs) in denominations of $100,000 or more
122
P3
Other
124 Savings deposits authorized for automatic transfer and N O W accounts
125 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26
weeks
126 All savers certificates
127 Demand deposits adjusted 6
128 Total standby letters of credit
Conveyed to others through participation (included in standby letters of credit)
129
130 Holdings of commercial paper included in total gross loans
131
132
133
134
135
136
137
138

Average for 30 calendar days (or calendar month) ending with report date
Total assets
Cash and due from depository institutions
Federal funds sold and securities purchased under agreements to resell
Total loans
Total deposits
Time CDs in denominations of $100,000 or more in domestic offices
Federal funds purchased and securities sold under agreements to repurchase
Other liabilities for borrowed money

139 Number of banks
For notes see end of table.




A74
4.22

Special Tables • October 1982
D O M E S T I C OFFICES, Insured Commercial Bank Assets and Liabilities"'
Consolidated Report of Condition; June 30, 1982
Millions of dollars
Member banks
Item

Insured
Total

1
2
3
4
5
6
7
8
9

Cash and due f r o m depository institutions
Currency and coin (U.S. and foreign)
Balances with Federal Reserve Banks
Balances with other central banks
D e m a n d balances with commercial banks in United States
All other balances with depository institutions in United States and banks in foreign countries
Cash items in process of collection
Total securities, loans, and lease financing receivables

10
11
12
13
14

Total securities, book value
U.S. Treasury
Obligations of other U.S. government agencies and corporations
Obligations of states and political subdivisions in United States
All other securities

15

Federal funds sold and securities purchased under agreements to resell

16 Total loans, gross
17 LESS: U n e a r n e d income on loans
18
Allowance for possible loan
1 9 EQUALS: L o a n s , n e t

loss

National

State

insured

1,722,905

1,282,006

985,399

296,607

440,899

188,164
20,055
20,203
96
30,763
51,176
65,872

149,269
14,882
19,287
96
16,752
36,133
62,119

111,604
11,850
14,541
79
13,589
27,676
43,870

37,665
3,032
4,747
17
3,163
8,457
18,249

38,895
5,173
915
0
14,011
15,042
3,753

1,388,811

1,009,704

778,997

230,707

379,108

343,621
102,410
72,760
149,280
19,172

224,102
62,746
41,963
103,208
16,186

173,846
48,346
34,263
79,965
11,272

50,256
14,399
7,7Q0
23,243
4,914

119,519
39,664
30,797
46,072
2,986

84,149

61,339

47,957

13,382

22,810

979,143
19,305
12,051
947,787

734,345
12,460
9,602
712,283

565,250
9,616
7,328
548,306

169,095
2,844
2,275
163,977

244,798
6,845
2,449
235,505

20
21
22
23
24
25
26

Total loans, gross, by category
Real estate loans
Construction and land development
Secured by farmland
Secured by residential properties
1- to 4-family
Multifamily
Secured by nonfarm nonresidential properties

291,017
48,492
8,451
164,469
157,292
7,177
69,606

202,914
38,281
3,702
114,766
109,583
5,183
46,165

166,593
30,013
3,092
95,490
91,335
4,155
37,998

36,321
8,268
610
19,276
18,249
1,028
8,166

88,103
10,210
4,748
49,703
47,708
1,994
23,441

27
28
29
30

Loans to financial institutions
Loans for purchasing or carrying securities
Loans to finance agricultural production and other loans to farmers
Commercial and industrial loans

66,391
11,261
35,759
361,074

59,322
10,320
19,160
290,092

37,139
6,196
16,677
217,752

22,184
4,124
2,483
72,340

7,068
941
16,599
70,982

31
32
33
34
35
36
37
38

Loans to individuals for household, family, and other personal expenditures
Installment loans
Passenger automobiles
Credit cards and related plans
Mobile homes
All other installment loans for household, family, and other personal expenditures
Single-payment loans
All other loans

184,460
147,018
57,743
32,587
9,966
46,721
37,442
29,182

127,321
102,614
36,806
28,842
6,814
30,151
24,707
25,214

104,328
84,663
30,265
23,723
6,124
24,551
19,665
16,564

22,994
17,951
6,542
5,119
690
5,601
5,042
8,650

57,138
44,404
20,937
3,745
3,152
16,569
12,734
3,968

39
40
41
42

Lease financing receivables
Bank premises, furniture and fixtures, and other assets representing bank premises
Real estate owned other than bank premises
All other assets

13,253
30,572
3,258
112,099

11,980
21,505
2,235
99,293

8,887
17,504
1,775
75,519

3,092
4,001
460
23,774

1,274
9,067
1,023
12,806




Commercial Banks
4.22

A75

Continued
Member banks
Item

Insured
Total

National

State

Nonmember
insured

43 Total liabilities and equity capital 8

1,722,905

1,282,006

985,399

296,607

440,899

44 Total liabilities excluding subordinated debt

1,593,493

1,188,690

913,628

275,062

404,803

45 Total deposits
46
Individuals, partnerships, and corporations
47
U.S. government
48
States and political subdivisions in United States
49
All other
50
Certified and officers' checks, travelers checks, and letters of credit sold for cash

1,290,997
1,120,747
5,101
83.783
67,279
14.086

915,124
784,482
4,089
52,501
63,396
10,657

719,325
623,994
3,177
43,417
41,869
6,868

195,800
160,488
912
9,084
21,527
3,788

375,873
336,265
1,012
31,283
3,884
3,430

51 Demand deposits
52
Individuals, partnerships, and corporations
53
U.S. government
54
States and political subdivisions in United States
55
All other
56
Certified and officers' checks, travelers checks, and letters of credit sold for cash

341,450
271,500
4,164
15,881
35,819
14,086

258,716
199,590
3,357
10,959
34,154
10,657

193,966
152,745
2,551
8,854
22,947
6,868

64,751
46,845
806
2,105
11,207
3,788

82,734
71,910
807
4,922
1,665
3,430

57 Time deposits
58
Other individuals, partnerships, and corporations
59
U.S. government
60
States and political subdivisions in United States
61
All other

723,621
627,295
870
64,059
31,398

505,544
436,372
677
39,295
29,201

402,913
350,642
572
32,816
18,883

102,632
85,730
105
6,479
10,318

218,077
190,924
193
24,764
2,197

62 Savings deposits
63
Corporations and other profit organizations
64
Other individuals, partnerships, and corporations
65
U.S. government
66
States and political subdivisions in United States

225,925
7,977
213,975
67
3,844
63

150,864
4,940
143,581
55
2,247
41

122,446
4,000
116.608
54
1.746
38

28,418
941
26,973
1
501
2

75,061
3,036
70,395
12
1,597
22

68 Federal funds purchased and securities sold under agreements to repurchase
69 Interest-bearing demand notes (note balances) issued to U.S. Treasury and other liabilities for
borrowed money
70 Mortgage indebtedness and liability for capitalized leases
71 All other liabilities

161,901

145,454

111.861

33,593

16,447

30,672
2,596
107,326

27,894
1,945
98,272

14,619
1,629
66,195

13,276
315
32,078

2,778
652
9,054

72 Subordinated notes and debentures
73 Total equity capital 8

6,186

4,713

3,260

1,453

1,473

123,225

88,603

68,511

20,092

34,622

333,851
296,817
37,034
68,151

261,916
229,031
32,885
45,035

201,119
178,998
22,121
37,266

60,796
50,033
10,764
7,769

71,936
67,786
4,149
23.116

0
22,321
244,651

0
14,825
167,849

0
12.135
128.543

0
2.690
39,305

0
7,496
76,802

67,817

64,002

41.714

22,288

3,815

1,276,268

901,476

710,209

191,267

374,792

14,409

5,533

4,501

1,032

8,876

MEMO

74 Time deposits of $100,000 or more
75
Certificates of deposit (CDs) in denominations of $100,000 or more
76
Other
77 Savings deposits authorized for automatic transfer and NOW accounts
78 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26
weeks
79 All savers certificates
80 D e m a n d deposits adjusted 6
81 Total standby letters of credit
Average for 30 calendar days (or calendar month) ending with report date
82 Total deposits
83 Number of banks
1. Effective Dec. 31, 1978, the report of condition was substantially revised for
commercial banks. Commercial banks with assets less than $100 million and with
domestic offices only were given the option to complete either the abbreviated or
the standard set of reports. Banks with foreign offices began reporting in greater
detail on a consolidated domestic and foreign basis. These tables reflect the varying
levels of reporting detail.
Beginning Dec. 3, 1981, depository institutions may establish international banking facilities (IBFs). Activity of IBFs established by U.S. commercial banks is
reflected in the appropriate asset and liability line items in the domestic office
portion of the tables. Activity of IBFs established by Edge Act and Agreement
subsidiaries of U.S. commercial banks is reflected in the appropriate asset and
liability line items in the foreign office portion of the tables. When there is a column
for fully consolidated foreign and domestic data, activity of IBFs is reflected in the
appropriate asset and liability line items in that portion of the tables.
2. All transactions between domestic and foreign offices of a bank are reported
in " N e t due f r o m " and " N e t due t o " (lines 79 and 103). All other lines represent
transactions with parties other than the domestic and foreign offices of each bank.
Since these intra-office transactions are erased by consolidation, total assets and
liabilities are the sum of all except intra-office balances.




3. Foreign offices include branches in foreign countries and in U.S. territories
and possessions, subsidiaries in foreign countries, and all offices of Edge Act and
agreement corporations wherever located.
4. This item is unavailable for all or some of the banks because of the lesser
detail available from banks without foreign offices, the inapplicability of certain
items to banks that have only domestic offices, and the absence of detail on a fully
consolidated basis for banks with foreign offices.
5. Equity capital is not allocated between the domestic and foreign offices of
banks with foreign offices.
6. Demand deposits adjusted equal demand deposits other than domestic commercial interbank and U.S. government less cash items in process of collection.
7. Domestic offices exclude branches in foreign countries and in U.S. territories
and possessions, subsidiaries in foreign countries, and all offices of Edge Act and
agreement corporations wherever located.
8. This item contains the capital accounts of U.S. banks that have no Edge or
foreign operations and reflects the difference between domestic office assets and
liabilities of U.S. banks with Edge or foreign operations excluding the capital
accounts of their Edge or foreign subsidiaries.

A76
4.30

Special Tables • October 1982
A S S E T S A N D LIABILITIES of U . S . Branches and Agencies of Foreign Banks, June 30, 19821
Millions of dollars
All states 2

New York

Total
1 Total assets 5

Branches 4

Agencies

Branches 4

Agencies

Other states 2

California.
total 3

Item

Illinois,
branches
Branches

Agencies

186,608

137,935

48,673

120,199

7,699

37,647

8,673

8,337

4,052

2 Cash and due from depository institutions
3
Currency and coin (U.S. and foreign)
4
Balances with Federal Reserve Banks
5
Balances with other central banks
6
Demand balances with commercial banks in United
States
7
All other balances with depository institutions in
United States and with banks in foreign
countries
8
Time and savings balances with commercial banks
in United States
9
Balances with other depository institutions in
United States
10
Balances with banks in foreign countries
11
Foreign branches of U.S. banks
12
Other banks in foreign countries
13
Cash items in process of collection

21.644
22
971
4

20.295
20
892
1

1.349
2
79
3

18,407
16
726
1

266
1
32
0

877
1
41
3

1.610
i
26
1

239
1
135
0

246
1
10
0

1.171

1.035

136

953

53

62

45

33

25

19,346

18,232

1,114

16,603

178

757

1.533

67

209

8.181

7.505

676

6,458

141

448

963

66

105

121
11.044
1.215
9,829
130

110
10.617
1.187
9.430
114

11
427
28
399
15

110
10,035
1.122
8.912
109

0
38
8
29
1

11
298
19
279
12

0
570
65
505
2

0
0
0
0
3

0
104
1
103
2

14 Total securities, loans, and lease financing receivables..

120,228

91,547

28,681

80,164

5,164

20,672

6,429

4,391

3,409

15 Total securities, book value
16
U.S. Treasury
17
Obligations of other U.S. government agencies and
corporations
18
Obligations of states and political subdivisions in
United States
19
Other bonds, notes, debentures, and corporate stock

4,709
2.680

4.248
2.450

462
230

4.046
2.388

265
190

200
43

170
37

26
21

2
0

477

454

23

442

7

18

5

5

0

76
1,476

72
1.272

5
204

52
1,163

2
66

1
139

20
109

0
0

2
0

8,149

6.458

1.691

5,964

1.240

486

230

192

37

7.384
765

5.698
760

1.686
5

5.231
734

1.235
5

486
0

204
26

192
0

37
0

8.097
329
7.768

6.406
307
6.099

1,691
22
1,669

5.915
139
5.777

1.239
21
1.218

486
1
486

228
6
222

192
163
28

37
0
37

20 Federal funds sold and securities purchased under
agreements to resell
21
22
23
24
25
26

By holder
Commercial banks in United States
Others
By type
One-day maturity or continuing contract
Securities purchased under agreements to r e s e l l . . .
Other
Other securities purchased under agreements to
resell

27 Total loans, gross
28 LESS: Unearned income on loans
29 EQUALS: Loans, net
Total loans, gross, bv category
30 Real estate loans
31 Loans to financial institutions
32
Commercial banks in United States
33
U.S. branches and agencies of other foreign banks
34
Other commercial banks
35
Banks in foreign countries
36
Foreign branches of U.S. banks
37
Other
38
Other financial institutions

52

51

1

49

1

0

2

0

0

115.738
220
115.518

87.447
148
87.299

28.291
73
28,219

76.250
133
76.117

4.909
11
4.898

20,530
58
20.471

6.270
12
6.259

4,367
2
4,364

3,412

1.407

1.765

4

3.408

4.720

2.018

2,701

34.544
17.443
16.174
1.269
15.822
1.450
14.372
1.279

7,288
4.738
4.401
337
2,349
103
2.245
201

31,911
15,724
14.519
1.205
15.200
1,414
13,786
986

12
1.151
355
321
34
655
46
609
140

5.920
4.393
4.079
314
1.495
63
1.432
32

57
2,379
1.479
1.464
16
610
26
584
290

476
224
221
185
36
2
0
2
1

1,002

41,832
22,181
20,576
1,606
18.171
1.553
16.618
1.480

39 Loans for purchasing or carrying securities
40 Commercial and industrial loans
41
U.S. addressees (domicile)
42
Non-U.S. addressees (domicile)
43 Loans to individuals for household, family, and other
personal expenditures
44 All other loans
45
Loans to foreign governments and official
institutions
46
Other

541
55,197
31.253
23.944

505
38.888
21.349
17.540

36
16.309
9.904
6,404

443
31.493
15.550
15,942

36
3.271
933
2.338

60
11.415
7.827
3,587

0

3.468
2,958
510

2
3.558
2.502
1.056

0
1.992
1.482
511

206
13.243

149
11.342

56
1.901

109
10.887

11
429

49
1.320

8
358

20
87

8
161

10.866
2.377

9.050
2.292

1.816
85

8,661
2,226

407
23

1.281
39

326
32

55
32

135
25

47 Lease financing receivables
48 All other assets
49
Customers' liability on acceptances outstanding
50
U.S. addressees (domicile)
51
Non-U.S. addressees (domicile)
52
Net due from related banking institutions 6
53
Other

1
36,587
11.493
5,809
5,684
18,228
6,866

1
19.635
8.048
3.437
4.611
5.872
5,715

0

1
15.665
7,724
3.309
4,416
2,663
5.277

0
1.030

0

0

16.951
3,445
2.371
1,073
12,356
1,150

15,612
2,638
2,322
315
12,076
898

404
130
94
36

0
3.516
184
27
157
3,194
139

360
33
7
26
238
88




784
50
734
57
189

0

274

248
8
8
1
209
4
205
31

0

U.S. Branches and Agencies
4.30

All

Continued
All states 2

New York

Item

55 Total deposits and credit balances
Individuals, partnerships, and corporations
56
57
U.S. addressees (domicile)
58
Non-U. S. addressees (domicile)
59
U.S. government, states, and political subdivisions
in United States
60
All other
61
Foreign governments and official institutions
62
Commercial banks in United States
63
U.S. branches and agencies of other foreign
banks
64
Other commercial banks in United States
65
Banks in foreign countries
Foreign branches of U.S. banks
66
67
Other banks in foreign countries
68
Certified and officers' checks, travelers checks,
and letters of credit sold for cash

Illinois,
branches

Branches 4

Agencies

Branches 4

Agencies

186,608

137,935

48,673

120,199

7,699

37,647

70,799
29,996
23,057
6,939

65,313
28,408
22,980
5,428

5,486
1,588
77
1,511

57,528
21,895
16,878
5,017

1,136
239
41
198

3,703
847
85
763

131
40,673
5,031
9,945

72
36,832
4,708
8,541

58
3,840
323
1,403

20
35,613
4,601
7,947

58
839
42
188

6,512
3,432
25,077
3,879
21,119

5,685
2,856
23,064
3,535
19,530

827
576
2,013
344
1,669

5,305
2,642
22,576
3,491
19,085

Total
54 Total liabilities 5

Other states 2

California,
total 3

Branches

Agencies

8,673

8,337

4,052

2,040
897
692
205

5,595
5,484
5,347
137

798
634
14
619

2
2,853
281
1,190

1
1,142
90
572

50
61
17
17

0
165
0
31

83
105
549
118
432

740
450
1,358
217
1,141

376
196
463
36
427

5
12
14
7
8

4
27
116
9
107

619

519

100

489

59

25

17

13

17

69 Demand deposits
70
Individuals, partnerships, and corporations
71
U.S. addressees (domicile)
72
Non-U.S. addressees (domicile)
73
U.S. government, states, and political subdivisions
in United States
74
All other
75
Foreign governments and official institutions
76
Commercial banks in United States
77
U.S. branches and agencies of other foreign
banks
Other commercial banks in United States
78
79
Banks in foreign countries
80
Certified and officers' checks, travelers checks,
and letters of credit sold for cash

3,275
1,499
960
538

3,083
1,437
960
477

191
62
0
62

2,842
1,251
785
466

59
0
0
0

68
28
7
21

105
83
80
3

127
95
88
7

74
41
0
41

9
1,767
411
82

9
1,638
402
82

0
130
9
0

7
1,585
385
79

0
59
0
0

1
39
9
0

0
21
1
1

1
31
17
2

0
32
0
0

28
54
655

28
54
635

0
0
20

28
51
632

0
0
0

0
0
5

0
1
2

0
2
0

0
0
15

619

519

100

489

59

25

17

13

17

81 Time deposits
Individuals, partnerships, and corporations
82
83
U.S. addressees (domicile)
84
Non-U.S. addressees (domicile)
85
U.S. government, states, and political subdivisions
in United States
86
All other
87
Foreign governments and official institutions
88
Commercial banks in United States
89
U.S. branches and agencies of other foreign
banks
90
Other commercial banks in United States
91
Banks in foreign countries

66,779
27,992
21,754
6,238

61,746
26,630
21,753
4,877

5,034
1,362
0
1,361

54,264
20,364
15,881
4,483

885
139
0
133

3,583
773
53
720

1,905
785
584
200

5,441
5,362
5,234
128

701
570
0
569

122
38,665
4,593
9,817

64
35,052
4,301
8,439

0
3,613
350
1,377

13
33,887
4,212
7,848

0
688
79
166

1
2,809
271
1,186

0
1,121
89
570

49
30
0
16

0
132
0
31

6,479
3,337
24,256

5,653
2,787
22,313

827
551
1,943

5,272
2,576
21,827

83
84
501

740
446
1,352

375
195
461

5
11
14

4
27
101

92 Savings deposits
Individuals, partnerships, and corporations
93
94
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
95
96
U.S. government, states, and political subdivisions
in United States
97
All other

278
278
198
79

252
252
198
54

26
26
0
26

192
192
144
47

0
0
0
0

23
23
3
20

29
29
27
2

26
26
23
2

8
8
0
8

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

98 Credit balances
Individuals, partnerships, and corporations
99
1(M)
U.S. addressees (domicile)
101
Non-U.S. addressees (domicile)
102
U.S. government, states, and political subdivisions
in United States
103
All other
104
Foreign governments and official institutions
105
Commercial banks in United States
U.S. branches and agencies of other foreign
106
banks
Other commercial banks in United States
107
Banks in foreign countries
108

467
228
144
84

232
90
69
21

236
138
77
63

230
89
67
21

192
100
41
60

29
23
22
2

0
0
0
0

1
1

15
15
14

0

1

0
240
27
46

0
142
5
20

0
98
23
26

0
142
5
20

0
92
21
22

0
6
1
4

0
0
0
0

0
0
0
0

0
0
0
0

5
41
166

5
16
117

0
26
49

5
16
117

0
21
49

0
4
0

0
0
0

0
0
0

0
0
0

For notes see end of table.




1

A78
4.30

Special Tables • October 1982
Continued
All states 2

New York

Item

no
111
112
113
114
115

By holder
Commercial banks in United States
Others
By type
One-day maturity or continuing contract
Securities sold under agreements to repurchase . . .
Other
Other securities sold under agreements to
repurchase

Illinois,
branches

Branches 4

Agencies

Branches 4

Agencies

17,918

11,168

6,750

9,851

1,940

3,697

15,209
2,709

9,766
1,402

5,443
1,306

8,482
1,369

1,566
374

16,739
940
15,799

10,136
778
9,358

6,603
162
6,441

8,851
652
8,199

1,845
54
1,791

Total
109 Federal funds purchased and sold under agreement to
repurchase

Other states 2

California,
total 3

Branches

Agencies

999

232

1,198

3,613
85

967
32

231
0

350
848

3,645
108
3,538

967
10
957

232
115
116

1,198
0
1,198

1,179

1,032

147

1,000

95

52

32

0

0

116 Other liabilities for borrowed money
117
Owed to banks
118
U.S. addressees (domicile)
119
Non-U.S. addressees (domicile)
120
Owed to others
121
U.S. addressees (domicile)
122
Non-U.S. addressees (domicile)

48,130
45,550
43,336
2,215
2,579
2,157
423

21,557
19,661
17,828
1,833
1,896
1,583
312

26,573
25,889
25,507
382
684
573
111

19,805
17,973
16,266
1,707
1,832
1,523
309

1,636
1,604
1,481
123
32
3
29

24,639
23,994
23,836
158
645
571
74

928
891
854
37
37
35
2

731
705
640
64
26
25
1

391
384
259
125
7
0
7

123 All other liabilities
124
Acceptances executed and outstanding
125
Net due to related banking institutions 6
126
Other

49,761
13,356
32,151
4,254

39,898
9,780
26,598
3,520

9,863
3,576
5,553
734

33,015
9,455
20,437
3,123

2,987
812
2,071
104

5,608
2,740
2,292
575

4,707
132
4,406
169

1,780
183
1,379
217

1,665
34
1,566
64

127 Time deposits of $100,000 or more
128
Certificates of deposit (CDs) in denominations of
$100,000 or more
129
Other
130 Savings deposits authorized for automatic transfer and
NOW accounts
131 Money market time certificates of $10,000 and less
than $100,000 with original maturities of 26 weeks
132 Time certificates of deposit in denominations of
$100,000 or more with remaining maturity of
more than 12 months

52,895

50,838

2,057

43,607

19

1,516

1,697

5,401

655

28,274
24,621

26,995
23,843

1,279
778

20,486
23,121

1
19

914
602

1,108
588

5,316
85

449
206

27

17

10

4

0

4

5

6

7

2

2

0

0

0

1

0

0

0

2,435

2,367

68

2,116

0

11

34

214

59

133
134
135
136
137
138
139
140

5,061
78,297
9,926
6,764
10,906
8,693
2,214

3,488
75,160
9,549
4,100
8,889
7,074
1,815

1,573
3,137
377
2,665
2,017
1,619
399

3,164
69,433
5,520
3,603
7,837
6,318
1,519

40
3,088
43
396
347
198
149

1,518
67
2
2,201
1,181
970
211

26
5,668
257
295
468
328
139

298
40
3,772
193
393
275
118

15
2
332
77
680
603
77

2,110

2,008

102

1,993

23

78

14

0

2

MEMO

Acceptances refinanced with a U.S.-chartered bank . . .
Statutory or regulatory asset pledge requirement
Statutory or regulatory asset maintenance requirement
Commercial letters of credit
Standby letters of credit, total
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Standby letters of credit conveyed to others through
participations (included in total standby letters of
credit)

141 Holdings of commercial paper included in total gross
loans
142 Holdings of acceptances included in total commercial
ana industrial loans
143 Immediately available funds with a maturity greater
than one day (included in other liabilities for borrowed money)
144 Gross due from related banking institutions 6
145
U.S. addressees (domicile)
146
Branches and agencies in United States
147
In the same state as reporter
In other states
148
149
U.S. banking subsidiaries 7
150
Non-U.S. addressees (domicile)
151
H e a d office and non-U.S. branches and agencies..
152
Non-U.S. banking companies and offices
153 Gross due to related banking institutions 6
154
U.S. addressees (domicile)
155
Branches and agencies in United States
156
In the same state as reporter
157
In other states
158
U.S. banking subsidiaries 7
159
Non-U.S. addressees (domicile)
160
H e a d office and non-U.S. branches and agencies..
161
Non-U.S. banking companies and offices




655

605

50

567

10

40

38

0

0

5,250

3,783

1,467

3,687

89

1,337

61

35

41

33,888

12,660

21,229

11,406

1,399

19,668

681

500

235

77,582
22,282
21,914
659
21,255
368
55,300
52,834
2,466

53,622
9,166
8,968
285
8,683
198
44,456
42,098
2,358

23,960
13,116
12,946
374
12,572
170
10,844
10,736
108

46,224
4,602
4,432
244
4,188
170
41,623
39,285
2,338

5,295
1,644
1,591
12
1,579
54
3,651
3,626
24

17,976
11,277
11,160
355
10,805
117
6,699
6,634
65

2,678
175
147
0
147
28
2,503
2,485
18

4,609
4,302
4,302
41
4,261
0
307
306
2

800
283
283
7
276
0
517
498
19

91,506
21,307
21,018
478
20,540
289
70,199
68,529
1,669

74,349
15,235
15,005
186
14,820
230
59,114
57,529
1,585

17,157
6,072
6,013
292
5,721
59
11,085
11,001
84

63,998
9,955
9,792
76
9,716
163
54,043
52,489
1,554

7,309
2,405
2,404
0
2,404
0
4,904
4,843
61

8,192
2,967
2,943
292
2,651
25
5,225
5,204
21

7,083
2,975
2,912
70
2,841
63
4,108
4,102
6

2,795
2,088
2,086
39
2,947
2
706
689
17

2,129
917
881
0
881
36
1,212
1,202
9

U. S. Branches and Agencies
4.30

Continued
All states 2

New York

Item

165
166
167
168
169
170

Average for 30 calendar days (or calendar month) ending
with report date
Total assets
Cash and due f r o m depository institutions
Federal funds sold a n a securities purchased under
agreements to resell
Totalloans
Loans to banks in foreign countries
Total deposits and credit balances
Time C D s in denominations of $100,000 or more
Federal funds purchased and securities sold under
agreements to repurchase
Other liabilities for borrowed money

171 Number of reports filed 8

Agencies

Branches 4

Agencies

178,795
19,192

130,621
18,018

48,174
1,173

113,361
16,373

7,375
264

37,549
772

6,473
110,988
17,703
66,528
27,453

4,915
83,106
15,430
61,593
26,250

1,558
27,882
2,273
4,936
1,203

4,620
72,168
14,745
54,069
20,007

1.118
4,749
623
1,054
1

16,790
46,287

10,197
20,144

6,593
26,142

8,992
18,506

387

205

182

127

1. D a t a are aggregates of categories reported on the quarterly form F F I E C 002,
"Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks."
This form was first used for reporting data as of June 30, 1980. From November
1972 through May 1980, U.S. branches and agencies of foreign banks had filed a
monthly F R 886a report. Aggregate data from that report were available through
the Federal Reserve statistical release G . l l , last issued on July 10, 1980. Data in
this table and in the G . l l 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. Agencies account for virtually all of the assets and liabilities reported in
California.
4. Includes all offices that have the power to accept deposits from U.S. residents,
including any such offices that are considered agencies under state law.
5. Total assets and total liabilities include net balances, if any, due from or due
to related banking institutions in the United States and in foreign countries (see




California,
total 3

Branches 4

Total

162
163
164

A79

O t h e r states 3
Illinois,
branches
Branches

Agencies

8,582
1,401

8,005
218

3,924
164

424
20,379
1,454
3.357
873

149
6,090
673
1,995
1,033

131
4,292
2
5,387
5,104

30
3,309
207
665
415

1.588
1,634

3,951
24,192

947
880

238
685

1,074
390

45

105

38

31

41

footnote 6). O n the former monthly branch and agency report, available through the G . l l 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 l tables.
6. "Related banking institutions" includes the foreign head office and other U.S.
and foreign branches and agencies of the b a n k , the bank's parent holding company,
and majority-owned banking subsidiaries of the bank and of its parent holding
company (including subsidiaries owned both directly and indirectly). Gross amounts
due from and due to related banking institutions are shown as m e m o items.
7. " U . S . banking subsidiaries" refers to U.S. banking subsidiaries majorityowned by the foreign bank and by related foreign banks and includes U . S . offices
of U.S.-chartered commercial banks, of Edge Act and Agreement corporations,
and of New York State (Article XII) investment companies.
8. In some cases two or more offices of a foreign bank within the same metropolitan area file a consolidated report.

A80

Federal Reserve Board of Governors
PAUL A . VOLCKER,
PRESTON M A R T I N ,

OFFICE

Chairman
Vice Chairman

OF BOARD

MEMBERS

JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant

to the
to the

HENRY C. WALLICH
J. CHARLES PARTEE

OFFICE OF STAFF DIRECTOR
MONETARY
AND FINANCIAL
Board
Board

FRANK O'BRIEN, JR., Deputy Assistant to the Board
ANTHONY F. COLE, Special Assistant to the Board
WILLIAM R. MALONI, Special Assistant to the Board
NAOMI P. SALUS, Special Assistant to the Board
WILLIAM R. JONES, Manager, Operations Review Program

STEPHEN H . AXILROD, Staff

Director

EDWARD C. ETTIN, Deputy Staff

NORMAND R.V. BERNARD, Special Assistant

OF RESEARCH

AND

to the Board

STATISTICS

DIVISION
JAMES L . K I C H L I N E ,

MICHAEL BRADFIELD, General

Counsel

ROBERT E. MANNION, Deputy General Counsel
J. VIRGIL MATTINGLY, JR., Associate General Counsel
GILBERT T. SCHWARTZ, Associate General Counsel
RICHARD M. ASHTON, Assistant General Counsel
NANCY P. JACKLIN, Assistant General Counsel
MARYELLEN A. BROWN, Assistant to the General Counsel

Director

JOSEPH S. ZEISEL, Deputy
Director
MICHAEL J. PRELL, Associate
Director

JARED J. ENZLER, Senior Deputy Associate
Director
DONALD L. KOHN, Senior Deputy Associate
Director
ELEANOR J. STOCKWELL, Senior Deputy Associate
Director
HELMUT F. WENDEL, Deputy Associate
Director
MARTHA BETHEA, Assistant

Director

JOE M. CLEAVER, Assistant

Director

ROBERT M. FISHER, Assistant

OFFICE

Director

MURRAY ALTMANN, Assistant
to the Board
STANLEY J. SIGEL, Assistant
to the Board

DIVISION
LEGAL

FOR
POLICY

OF THE

SECRETARY

WILLIAM W . W I L E S ,

Secretary

BARBARA R. LOWREY, Associate
Secretary
JAMES MCAFEE, Associate
Secretary

DIVISION
OF
CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . G A R W O O D ,

DIVISION
OF
SUPERVISION
JOHN E . R Y A N ,

Director

BANKING
AND
REGULATION
Director

FREDERICK R. DAHL, Associate
Director
DON E. KLINE, Associate
Director
WILLIAM TAYLOR, Associate

Director

JACK M. EGERTSON, Assistant

Director

ROBERT A . JACOBSEN, Assistant
ROBERT S. PLOTKIN, Assistant
THOMAS A . SIDMAN, Assistant
SIDNEY M . SUSSAN, Assistant
SAMUEL H . TALLEY, Assistant

LAURA M. HOMER, Securities




STEPHEN P. TAYLOR, Assistant

Director
Director
Director
Director
Director

Credit Officer

Director

PETER A. TINSLEY, Assistant
Director
LEVON H. GARABEDIAN, Assistant Director

DIVISION

JERAULD C. KLUCKMAN, Associate
Director
GLENN E. LONEY, Assistant
Director
DOLORES S. SMITH, Assistant
Director

Director

DAVID E. LINDSEY, Assistant
Director
LAWRENCE SLIFMAN, Assistant
Director
FREDERICK M. STRUBLE, Assistant
Director

OF INTERNATIONAL

EDWIN M . TRUMAN,

(Administration)

FINANCE

Director

ROBERT F. GEMMILL, Associate
CHARLES J. SIEGMAN, Associate

Director
Director

LARRY J. PROMISEL, Senior Deputy Associate
Director
DALE W. HENDERSON, Deputy Associate
Director
SAMUEL PIZER, Staff
Adviser
MICHAEL P. DOOLEY, Assistant
RALPH W . SMITH, JR., Assistant

Director
Director

A81

and Official Staff
NANCY H . TEETERS

LYLE E . GRAMLEY

EMMETT J. RICE

OFFICE
STAFF

OF

DIVISION

DIRECTOR

FOR

JOHN M. DENKLER, Staff Director
EDWARD T. MULRENIN, Assistant Staff Director
JOSEPH W. DANIELS, SR., Director of Equal Employment
Opportunity

OFFICE
OF DATA

SERVICES

DONALD E . ANDERSON,
Director
ROBERT E . FRAZIER, Associate
Director
WALTER W . K R E I M A N N , Associate
Director

FEDERAL
DIVISION

OF SUPPORT

MANAGEMENT

OF STAFF

DIRECTOR

RESERVE

BANK

PROCESSING
THEODORE E. ALLISON, Staff

CHARLES L . H A M P T O N ,

Director

ULYESS D . BLACK, Associate

Director

DIVISION

GLENN L. CUMMINS, Assistant
NEAL H. HILLERMAN, Assistant

Director
Director

BANK

ROBERT J. Z E M E L , Assistant

OF

Director

Director

JOHN R. WEIS, Assistant

Director

CHARLES W . W O O D , Assistant

OFFICE

OF THE

Director

CONTROLLER

GEORGE E . LIVINGSTON,

Controller

*On loan from the Federal Reserve Bank of New York.




OF FEDERAL

RESERVE

OPERATIONS

C L Y D E H . FARNSWORTH, J R . ,
LORIN S . M E E D E R , Associate

DAVID L. ROBINSON, Associate

PERSONNEL

DAVID L . SHANNON,

Director

Director

BRUCE M. BEARDSLEY, Deputy

DIVISION

FOR
ACTIVITIES

Director
Director

Director

C . WILLIAM SCHLEICHER, J R . , Associate
WALTER A L T H A U S E N , Assistant
Director
CHARLES W . B E N N E T T , Assistant
Director
A N N E M . D E B E E R , Assistant
Director
JACK D E N N I S , J R . , Assistant
Director
RICHARD B . G R E E N , Assistant
Director

EARL G. HAMILTON, Assistant

Director

ELLIOTT C . M C E N T E E , Assistant
Director
* H O W A R D F . C R U M B , Acting
Adviser

Director

A82

Federal Reserve Bulletin • October 1982

FOMC and Advisory Councils
FEDERAL OPEN MARKET

COMMITTEE

PAUL A . VOLCKER,

A N T H O N Y M . SOLOMON, Vice

Chairman
L Y L E E . GRAMLEY
KAREN N . HORN
PRESTON MARTIN

JOHN J. BALLES
ROBERT P . BLACK
WILLIAM F . FORD

STEPHEN H . AXILROD, Staff
Director
MURRAY A L T M A N N ,
Secretary
N O R M A N D R . V . BERNARD, Assistant

NANCY M. STEELE, Deputy Assistant
MICHAEL BRADFIELD, General

Secretary

Secretary

Counsel

JAMES H. OLTMAN, Deputy General Counsel
ROBERT E. MANNION, Assistant General Counsel
JAMES L . KICHLINE,
Economist
JOHN M . DAVIS, Associate
Economist

Chairman

J. CHARLES PARTEE
EMMETT J. RICE
N A N C Y H . TEETERS
HENRY C . WALLICH
RICHARD G . DAVIS, Associate
E D W A R D C . E T T I N , Associate
MICHAEL W . K E R A N , Associate
D O N A L D L . KOCH, Associate
JAMES PARTHEMOS, Associate
MICHAEL J. PRELL, Associate
CHARLES J. SIEGMAN, Associate
E D W I N M . T R U M A N , Associate
JOSEPH S . ZEISEL, Associate

Economist
Economist
Economist
Economist
Economist
Economist
Economist
Economist
Economist

PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account
SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account

FEDERAL ADVISORY

COUNCIL
DONALD C. PLATTEN, Second District, President
ROBERT M. SURDAM, Seventh District, Vice President
RONALD TERRY, E i g h t h D i s t r i c t
CLARENCE G . FRAME, N i n t h D i s t r i c t
GORDON E . WELLS, T e n t h D i s t r i c t

WILLIAM S . EDGERLY, F i r s t D i s t r i c t
JOHN H . WALTHER, T h i r d D i s t r i c t
JOHN G . M C C O Y , F o u r t h D i s t r i c t
VINCENT C . BURKE, J R . , F i f t h D i s t r i c t
ROBERT STRICKLAND, S i x t h D i s t r i c t

T. C. FROST, JR., Eleventh District
JOSEPH J. PINOLA, T w e l f t h D i s t r i c t
HERBERT V . PROCHNOW,
WILLIAM J. KORSVIK, Associate

CONSUMER ADVISORY

Secretary
Secretary

COUNCIL

CHARLOTTE H. SCOTT, Charlottesville, Virginia, Chairman
MARGARET REILLY-PETRONE, Upper Montclair, N e w Jersey, Vice Chairman
ARTHUR F. BOUTON, Little Rock, Arkansas

SHIRLEY T . HOSOI, L o s A n g e l e s , C a l i f o r n i a

JULIA H . B O Y D , A l e x a n d r i a , V i r g i n i a
ELLEN BROADMAN, W a s h i n g t o n , D . C .

GEORGE S . IRVIN, D e n v e r , C o l o r a d o

GERALD R. CHRISTENSEN, Salt Lake City, Utah
JOSEPH N. CUGINI, Westerly, Rhode Island
RICHARD S . D ' A G O S T I N O , W i l m i n g t o n , D e l a w a r e
SUSAN PIERSON D E W I T T , S p r i n g f i e l d , I l l i n o i s
JOANNE S . FAULKNER, N e w H a v e n , C o n n e c t i c u t
MEREDITH FERNSTROM, N e w Y o r k , N e w Y o r k
ALLEN J. FISHBEIN, W a s h i n g t o n , D . C .

HARRY N . JACKSON, M i n n e a p o l i s , M i n n e s o t a
F . THOMAS JUSTER, A n n A r b o r , M i c h i g a n

ROBERT J. MCEWEN, S. J., Chestnut Hill, Massachusetts
STAN L . M U L A R Z , C h i c a g o , I l l i n o i s
WILLIAM J. O ' C O N N O R , B u f f a l o , N e w Y o r k
WILLARD P . OGBURN, B o s t o n ,

Massachusetts

JANET J. RATHE, P o r t l a n d , O r e g o n
R E N E REIXACH, R o c h e s t e r , N e w Y o r k

E. C. A. FORSBERG, SR., Atlanta, Georgia

PETER D . SCHELLIE, W a s h i n g t o n ,

LUTHER R . GATLING, N e w Y o r k , N e w Y o r k
VERNARD W . H E N L E Y , R i c h m o n d , V i r g i n i a
JUAN J. HINOJOSA, M c A l l e n , T e x a s

N A N C Y Z . SPILLMAN, L o s A n g e l e s , C a l i f o r n i a
CLINTON W A R N E , C l e v e l a n d , O h i o




D.C.

FREDERICK T . WEIMER, C h i c a g o , I l l i n o i s

A83

Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK,
branch, or facility
Zip

Chairman
Deputy Chairman

President
First Vice President

BOSTON*

02106

Robert P. Henderson
Thomas I. Atkins

Frank E. Morris
James A. Mcintosh

NEW YORK*

10045

Robert H. Knight, Esq.
Boris Yavitz
Frederick D. Berkeley, III

Anthony M. Solomon
Thomas M. Timlen

Buffalo

14240

John T. Keane

PHILADELPHIA

19105

Jean A. Crockett
Robert M. Landis, Esq.

Edward G. Boehne
Richard L. Smoot

CLEVELAND*

44101

J. L. Jackson
William H. Knoell
Clifford R. Meyer
Milton G. Hulme, Jr.

Karen N. Horn
William H. Hendricks

Steven Muller
Paul E. Reichardt
Edward H. Covell
Naomi G. Albanese

Robert P. Black
Jimmie R. Monhollon

Cincinnati
Pittsburgh

45201
15230

RICHMOND*

23219

Baltimore
21203
Charlotte
28230
Culpeper
Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans

30301
35202
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

59601
64198
80217
73125
68102
75222
79999
77001
78295

SAN FRANCISCO

94120

Los Angeles
Portland
Salt Lake City
Seattle

90051
97208
84130
98124

Vice President
in charge of branch

Robert E. Showalter
Harold J. Swart

Robert D. McTeer, Jr.
Stuart P. Fishburne
Albert D. Tinkelenberg

William A. Fickling, Jr.
John H. Weitnauer, Jr.
William H. Martin, III
Copeland D. Newbern
Eugene E. Cohen
Cecelia Adkins
Leslie B. Lampton

William F. Ford
Robert P. Forrestal

John Sagan
Stanton R. Cook
Russell G. Mawby

Silas Keehn
Daniel M. Doyle

Armand C. Stalnaker
W. L. Hadley Griffin
Richard V. Warner
James F. Thompson
Donald B. Weis

Lawrence K. Roos
Donald W. Moriarty, Jr.

William G. Phillips
John B. Davis, Jr.
Ernest B. Corrick

E. Gerald Corrigan
Thomas E. Gainor

Paul H. Henson
Doris M. Drury
James E. Nielson
Christine H. Anthony
Robert G. Lueder

Roger Guffey
Henry R. Czerwinski

Gerald D. Hines
John V. James
A. J. Losee
Jerome L. Howard
Lawrence L. Crum

Robert H. Boykin
William H. Wallace

Caroline L. Ahmanson
Alan C. Furth
Bruce M. Schwaegler
John C. Hampton
Wendell J. Ashton
John W. Ellis

John J. Balles
John B. Williams

Hiram J. Honea
Charles D. East
Patrick K. Barron
Jeffrey J. Wells
James D. Hawkins

William C. Conrad

John F. Breen
Donald L. Henry
Randall C. Sumner

Robert F. McNellis

Wayne W. Martin
William G. Evans
Robert D. Hamilton

Joel L. Koonce, Jr.
J. Z. Rowe
Thomas H. Robertson

Richard C. Dunn
Angelo S. Carella
A. Grant Holman
Gerald R. Kelly

'Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, N e w Jersey 07016;
Jericho, N e w York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.




A84

Federal Reserve Board Publications
Copies are available from PUBLICATIONS SERVICES,
Room MP-510, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551. When a charge is indicated, remittance
should accompany
request and be made
THE

FEDERAL RESERVE
TIONS. 1 9 7 4 . 125 p p .
A N N U A L REPORT.

SYSTEM—PURPOSES

AND

FUNC-

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and Mexico; 10 or more of same issue to one address,
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BANKING A N D MONETARY STATISTICS. 1 9 1 4 - 1 9 4 1 . ( R e p r i n t

of Part I only) 1976. 682 pp. $5.00.
AND

MONETARY

Each volume $1.00; 10 or more to one address, $.85
each.
OPEN MARKET POLICIES A N D OPERATING

FEDERAL RESERVE B U L L E T I N . M o n t h l y . $ 2 0 . 0 0 p e r y e a r o r

BANKING

payable to the order of the Board of Governors of the Federal
Reserve System. Remittance from foreign residents
should
be drawn on a U.S. bank. Stamps and coupons are not
accepted.

STATISTICS,

PROCEDURES—

STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to
one address, $1.75 each.
REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHANISM. Vol. 1. 1 9 7 1 . 2 7 6 p p . Vol. 2. 1 9 7 1 . 173 p p . Vol. 3.

1972. 220 pp. Each volume $3.00; 10 or more to one
address, $2.50 each.
THE ECONOMETRICS OF PRICE DETERMINATION

1941-1970.

1976.

1,168 pp. $15.00.
A N N U A L STATISTICAL DIGEST

1971-75. 1976. 339 pp. $5.00 per copy.
1972-76. 1977. 377 pp. $10.00 per copy.
1973-77. 1978. 361 pp. $12.00 per copy.
1974-78. 1980. 305 pp. $10.00 per copy.
1970-79. 1981. 587 pp. $20.00 per copy.
1980.
1981. 241 pp. $10.00 per copy.
1981.
1982. 239 pp. $6.50 per copy.
FEDERAL RESERVE CHART BOOK. Issued four times a year in
February, May, August, and November. Subscription
includes one issue of Historical Chart Book. $7.00 per
year or $2.00 each in the United States, its possessions,
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HISTORICAL CHART BOOK. Issued annually in Sept. Subscription to Federal Reserve Chart Book includes one issue.
$1.25 each in the United States, its possessions, Canada,
and Mexico; 10 or more to one address, $1.00 each.
Elsewhere, $1.50 each.
SELECTED INTEREST A N D EXCHANGE RATES—WEEKLY SE-

RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in
the United States, its possessions, Canada, and Mexico;
10 or more of same issue to one address, $13.50 per year
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THE FEDERAL RESERVE ACT, as amended through December
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REGULATIONS OF THE BOARD OF GOVERNORS OF THE F E D ERAL RESERVE SYSTEM.
B A N K CREDIT-CARD A N D CHECK-CREDIT PLANS. 1 9 6 8 . 102

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REPORT OF THE JOINT TREASURY-FEDERAL RESERVE S T U D Y
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JOINT TREASURY-FEDERAL RESERVE S T U D Y OF THE GOVERNMENT SECURITIES MARKET; STAFF S T U D I E S — P A R T

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FEDERAL RESERVE STAFF S T U D Y : W A Y S TO MODERATE
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LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS.

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IMPROVING THE MONETARY AGGREGATES: REPORT OF THE
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A N N U A L PERCENTAGE RATE TABLES ( T r u t h in

Lending—

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THE B A N K HOLDING COMPANY

MOVEMENT TO 1 9 7 8 :

A

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IMPROVING THE MONETARY AGGREGATES: S T A F F PAPERS.

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PUBLIC POLICY A N D CAPITAL FORMATION.

1981. 326

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ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each.




A85

FEDERAL RESERVE REGULATORY SERVICE. L o o s e l e a f ; u p d a t -

ed at least monthly. (Requests must be prepaid.)
Consumer and Community Affairs Handbook. $60.00 per
year.
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$60.00 per year.

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Federal Reserve Regulatory Service. 3 vols. (Contains all
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$175.00 per year.

Rates for subscribers outside the United States are as
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STAFF STUDIES: Summaries
Bulletin

Only Printed

in the

Studies and papers on economic and financial subjects
that are of general interest. Requests to obtain single copies
of the full text or to be added to the mailing list for the series
may be sent to Publications
Services.
PERFORMANCE A N D CHARACTERISTICS OF E D G E CORPORA-

TIONS, by James V. Houpt. Feb. 1981. 56 pp.
BANKING STRUCTURE A N D PERFORMANCE AT THE STATE

LEVEL DURING THE 1970s, by Stephen A. Rhoades. Mar.
1981. 26 pp.
FEDERAL RESERVE DECISIONS ON B A N K MERGERS A N D A C -

QUISITIONS DURING THE 1970s, by Stephen A. Rhoades.
Aug. 1981. 16 pp.
BELOW THE BOTTOM L I N E : T H E U S E OF CONTINGENCIES
A N D COMMITMENTS BY COMMERCIAL B A N K S , b y B e n j a -

CONSUMER EDUCATION

min Wolkowitz and others. Jan. 1982. 186 pp.

PAMPHLETS

Short pamphlets
suitable for
copies available without charge.

classroom

use.

Multiple

Alice in Debitland
Consumer Handbook to Credit Protection Laws
Dealing with Inflation: Obstacles and Opportunities
The Equal Credit Opportunity Act and . . . Age
The Equal Credit Opportunity Act and . . . Credit Rights in
Housing
The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide
Incidental Credit
The Equal Credit Opportunity Act and . . . Women
Fair Credit Billing
Federal Reserve Glossary
Guide to Federal Reserve Regulations
How to File A Consumer Credit Complaint
If You Borrow To Buy Stock
If You Use A Credit Card
Series on the Structure of the Federal Reserve System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Monetary Control Act of 1980
Organization and Advisory Committees
Truth in Leasing
U.S. Currency
What Truth in Lending Means to You




MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE ON
COMPETITION A N D PERFORMANCE IN BANKING MAR-

KETS, by Timothy J. Curry and John T. Rose. Jan. 1982.
9 pp.
COSTS, SCALE ECONOMIES, COMPETITION, A N D PRODUCT
M I X IN THE U . S . PAYMENTS MECHANISM, b y D a v i d B .

Humphrey. Apr. 1982. 18 pp.
DIVISIA

MONETARY

AGGREGATES:

COMPILATION,

DATA,

AND HISTORICAL BEHAVIOR, by William A. Barnett and
Paul A. Spindt. May 1982. 82 pp.
THE COMMUNITY REINVESTMENT A C T A N D CREDIT ALLO-

CATION, by Glenn Canner. June 1982. 8 pp.
INTEREST RATES A N D TERMS ON CONSTRUCTION LOANS AT

COMMERCIAL BANKS, by David F. Seiders. July 1982.
14 pp.
STRUCTURE-PERFORMANCE STUDIES IN BANKING: A N U P DATED SUMMARY A N D EVALUATION, b y S t e p h e n A .

Rhoades. Aug. 1982. 15 pp.

REPRINTS
Most of the articles reprinted do not exceed 12 pages.
Revision of Bank Credit Series. 12/71.
Rates on Consumer Installment Loans. 9/73.
Industrial Electric Power Use. 1/76.
Revised Series for Member Bank Deposits and Aggregate
Reserves. 4/76.
Federal Reserve Operations in Payment Mechanisms: A
Summary. 6/76.
Perspectives on Personal Saving. 8/80.
The Impact of Rising Oil Prices on the Major Foreign
Industrial Countries. 10/80.
Federal Reserve and the Payments System: Upgrading Electronic Capabilities for the 1980s. 2/81.
Survey of Finance Companies, 1980. 5/81.
Bank Lending in Developing Countries. 9/81.
U.S. International Transactions in 1981. 4/82.
The Commercial Paper Market since the Mid-Seventies. 6/82.
Applying the Theory of Probable Future Competition. 9/82.
International Banking Facilities. 10/82.

A86

Index to Statistical Tables
References are to pages A3 through A79 although the prefix 'A"
ACCEPTANCES, bankers, 10, 25, 27
Agricultural loans, commercial banks, 18, 19, 20, 26
Assets and liabilities (See also Foreigners)
Banks, by classes, 17, 18-21, 70-75
Domestic finance companies, 39
Federal Reserve Banks, 11
Foreign banks, U.S. branches and agencies, 22, 76
Nonfinancial corporations, 38
Savings institutions, 29
Automobiles
Consumer installment credit, 42, 43
Production, 48, 49
BANKERS balances, 17, 18-20, 70, 72, 74
(See also Foreigners)
Banks for Cooperatives, 35
Bonds (See also U.S. government securities)
New issues, 36
Rates, 3
Branch banks, 15, 21, 22, 56, 76
Business activity, nonfinancial, 46
Business expenditures on new plant and equipment, 38
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 17, 71, 73, 75
Federal Reserve Banks, 11
Central banks, 67
Certificates of deposit, 21, 27
Commercial and industrial loans
Commercial banks, 15, 17, 22, 26
Weekly reporting banks, 18-22, 23
Commercial banks
Assets and liabilities, 17, 18-21, 70-75
Business loans, 26
Commercial and industrial loans, 15, 17, 22, 23, 26
Consumer loans held, by type, 42, 43
Loans sold outright, 21
Nondeposit funds, 16
Number, by classes, 17, 71, 73, 75
Real estate mortgages held, by holder and property, 41
Time and savings deposits, 3
Commercial paper, 3, 25, 27, 39
Condition statements (See Assets and liabilities)
Construction, 46, 50
Consumer installment credit, 42, 43
Consumer prices, 46, 51
Consumption expenditures, 52, 53
Corporations
Profits and their distribution, 37
Security issues, 36, 66
Cost of living (See Consumer prices)
Credit unions, 29, 42, 43
(See also Thrift institutions)
Currency and coin, 5, 17, 70, 72, 74
Currency in circulation, 4, 13
Customer credit, stock market, 28
DEBITS to deposit accounts, 12
Debt (See specific types of debt or securities)
Demand deposits
Adjusted, commercial banks, 12
Banks, by classes, 17, 18-21, 71, 73, 75




is omitted in this index

Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 24
Turnover, 12
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 14
Deposits (See also specific types).
Banks, by classes, 3, 17, 18-21, 29, 71, 73, 75
Federal Reserve Banks, 4, 11
Turnover, 12
Discount rates at Reserve Banks and at foreign central
banks (See Interest rates)
Discounts and advances by Reserve Banks (See
Loans)
Dividends, corporate, 37
EMPLOYMENT, 46, 47
Eurodollars, 27
FARM mortgage loans, 41
Federal agency obligations, 4, 10, 11, 12, 34
Federal credit agencies, 35
Federal finance
Debt subject to statutory limitation and types and
ownership of gross debt, 32
Receipts and outlays, 30, 31
Treasury financing of surplus, or deficit, 30
Treasury operating balance, 30
Federal Financing Bank, 30, 35
Federal funds, 3, 6, 18, 19, 20, 27, 30
Federal Home Loan Banks, 35
Federal Home Loan Mortgage Corporation, 35, 40, 41
Federal Housing Administration, 35, 40, 41
Federal Intermediate Credit Banks, 35
Federal Land Banks, 35, 41
Federal National Mortgage Association, 35, 40, 41
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 4, 11, 12, 32, 33
Federal Reserve credit, 4, 5, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 35
Finance companies
Assets and liabilities, 39
Business credit, 39
Loans, 18, 19, 20, 42, 43
Paper, 25, 27
Financial institutions
Loans to, 18, 19, 20
Selected assets and liabilities, 29
Float, 4
Flow of funds, 44, 45
Foreign banks, assets and liabilities of U.S. branches and
agencies, 22, 76
Foreign currency operations, 11
Foreign deposits in U.S. banks, 4, 11, 18, 19, 20
Foreign exchange rates, 68
Foreign trade, 55
Foreigners
Claims on, 56, 58, 61, 62, 63, 65
Liabilities to, 21, 55, 56-60, 64, 66, 67

A87

GOLD
Certificate account, 11
Stock, 4, 55
Government National Mortgage Association, 35, 40, 41
Gross national product, 52, 53
HOUSING, new and existing units, 50
INCOME, personal and national, 46, 52, 53
Industrial production, 46, 48
Installment loans, 42, 43
Insurance companies, 29, 32, 33, 41
Insured commercial banks, 70-75
Interbank loans and deposits, 17
Interest rates
Bonds, 3
Business loans of banks, 26
Federal Reserve Banks, 3, 7
Foreign central banks and foreign countries, 67
Money and capital markets, 3, 27
Mortgages, 3, 40
Prime rate, commercial banks, 26
Time and savings deposits, 9
International capital transactions of United States, 54-67
International organizations, 58, 59-61, 64-67
Inventories, 52
Investment companies, issues and assets, 37
Investments (See also specific types)
Banks, by classes, 17, 29
Commercial banks, 3, 15, 17, 18-20, 70, 72, 74
Federal Reserve Banks, 11, 12
Savings institutions, 29, 41
LABOR force, 47
Life insurance companies (See Insurance
companies)
Loans (See also specific types)
Banks, by classes, 17, 18—21
Commercial banks, 3, 15, 17, 18-21, 22, 26, 70, 72, 74
Federal Reserve Banks, 3, 4, 5, 7, 11, 12
Insured or guaranteed by United States, 40, 41
Savings institutions, 29, 41
MANUFACTURING
Capacity utilization, 46
Production, 46, 49
Margin requirements, 28
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 49
Mobile home shipments, 50
Monetary and credit aggregates, 3, 14
Money and capital market rates (See Interest
rates)
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds (See Investment companies)
Mutual savings banks, 9, 18-20, 29, 32, 33, 41, 42, 43
(See also Thrift institutions)
NATIONAL defense outlays, 31
National income, 52
OPEN market transactions, 10
PERSONAL income, 53
Prices
Consumer and producer, 46, 51
Stock market, 28
Prime rate, commercial banks, 26
Producer prices, 46, 51
Production, 46, 48
Profits, corporate, 37




REAL estate loans
Banks, by classes, 18-20, 41
Rates, terms, yields, and activity, 3, 40
Savings institutions, 27
Type of holder and property mortgaged, 41
Repurchase agreements and federal funds, 6, 18, 19, 20
Reserve requirements, 8
Reserves
Commercial banks, 17, 71
Depository institutions, 3, 4, 5, 14
Federal Reserve Banks, 11
U.S. reserve assets, 55
Residential mortgage loans, 40
Retail credit and retail sales, 42, 43, 46
SAVING
Flow of funds, 44, 45
National income accounts, 53
Savings and loan assns., 9, 29, 33, 41, 42, 43, 44
(See also Thrift institutions)
Savings deposits (See Time and savings deposits)
Securities (See specific types)
Federal and federally sponsored credit agencies, 35
Foreign transactions, 66
New issues, 36
Prices, 28
Special drawing rights, 4, 11, 54, 55
State and local governments
Deposits, 18, 19, 20
Holdings of U.S. government securities, 32, 33
New security issues, 36
Ownership of securities issued by, 18, 19, 20, 29
Rates on securities, 3
Stock market, 28
Stocks (See also Securities)
New issues, 36
Prices, 28
TAX receipts, federal, 31
Thrift institutions, 3 (See also Credit unions,
Mutual savings banks, and Savings and loan
associations)
Time and savings deposits, 3, 9, 12, 17, 18-21, 71, 73, 75
Trade, foreign, 55
Treasury currency, Treasury cash, 4
Treasury deposits, 4, 11, 30
Treasury operating balance, 30
UNEMPLOYMENT, 47
U.S. international transactions, 54-67
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 11, 30
U.S. government securities
Bank holdings, 17, 18-20, 32, 33, 70, 72, 74
Dealer transactions, positions, and financing, 34
Federal Reserve Bank holdings, 4, 11, 12, 32, 33
Foreign and international holdings and transactions, 11,
32, 67
Open market transactions, 10
Outstanding, by type and ownership, 32, 33
Ownership of securities issued by, 29
Rates, 3, 27
Utilities, production, 49
VETERANS Administration, 40, 41
WEEKLY reporting banks, 18-23
Wholesale (producer) prices, 46, 51
YIELDS (See Interest rates)

A88

The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories

LEGEND

— ~ Boundaries of Federal Reserve Districts
Boundaries of Federal Reserve Branch
Territories

®

Federal Reserve Bank Cities

*

Federal Reserve Branch Cities
Federal Reserve Bank Facility

Q

Board of Governors of the Federal Reserve
System