Full text of Federal Reserve Bulletin : October 1987
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VOLUME 7 3 •
NUMBER 10 •
m
v *
OCTOBER 1987
FEDERAL RESERVE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • Michael Bradfield • S. David Frost
• Griffith L. Garwood • Edwin M. Truman
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by Mendelle T.
Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
761 CHANGES IN CONSUMER INSTALLMENT
DEBT. EVIDENCE FROM
THE 1983 AND 1986 SURVEYS
OF CONSUMER FINANCES
This article uses survey data to examine
recent changes in consumer installment
debt, making particular use of the fact that
the 1983 and 1986 surveys interviewed the
same families.
Admission of two state banks to membership in the Federal Reserve System.
789 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET COMMITTEE
Amendment to Regulation T.
At its meeting on July 7, 1987, the Committee reviewed its objectives established in
February for growth of the monetary and
debt aggregates in 1987 and set tentative
objectives for growth in 1988. For the period from the fourth quarter of 1986 to the
fourth quarter of 1987, the Committee decided not to change the ranges set in February for growth of 51/2 to 8V2 percent for both
M2 and M3. The Committee agreed that
growth in these aggregates around the lower
ends of their ranges might be appropriate,
depending on the circumstances. The monitoring range for expansion in total domestic
nonfinancial debt also was left unchanged at
8 to 11 percent for 1987. For 1988 the
Committee agreed on tentative reductions
of V2 percentage point to ranges of 5 to 8
percent for both M2 and M3. The Committee also reduced the associated range for
growth in total domestic nonfinancial debt
by V2 percentage point to IV2 to IOV2 percent
for 1988. With respect to M l , the Committee decided not to set a specific target for
growth over the remainder of 1987 or to
establish a tentative range for 1988. It was
understood that all the ranges for 1988 were
provisional and that they would be reviewed in early 1988 in the light of intervening developments. The issues involved with
establishing a target for Ml would be carefully reappraised at the beginning of 1988.
Statement of Guidance for reporting activities of nonbank banks.
With regard to the implementation of
policy for the period immediately ahead,
779 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE OPERATIONS
During the three-month period ending in
July, the dollar first stabilized and then
advanced modestly to close up 6V2 percent
against the Japanese yen and roughly 4
percent against the German mark and other
European currencies.
783 STAFF STUDIES
In "The Effects on Consumers and Creditors of Proposed Ceilings on Credit Card
Interest Rates," the authors focus on the
likely effects of restrictive rate ceilings on
the availability of credit cards and on possible creditor responses to lowered revenue.
785 INDUSTRIAL
PRODUCTION
Industrial production increased an estimated 0.8 percent in July.
787
Proposed amendment to Regulation T concerning the exercise of employee-owned
stock options.
ANNOUNCEMENTS
Change in the discount rate.
Amendments to Regulation E.
Amendment to Regulation K.
the Committee agreed on the desirability of
a directive that called for no change in the
degree of pressure on reserve positions.
Some firming or some easing of reserve
conditions would be acceptable depending
especially on developments relating to inflation and the performance of the dollar in
foreign exchange markets, while also taking
account of the behavior of the monetary
aggregates and the strength of the business
expansion. This approach to policy implementation was expected to be consistent
with growth of M2 and M3 at annual rates of
around 5 percent and IV2 percent respectively, over the three-month period from
June to September. Over the same period,
growth in Ml was expected to resume after
declining on balance in May and June but to
remain well below its pace in 1986. The
members agreed that the intermeeting range
for the federal funds rate, which provides a
mechanism for initiating consultation of the
Committee when its boundaries are persistently exceeded, should be left unchanged
at 4 to 8 percent.
799 LEGAL
DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
AI FINANCIAL AND BUSINESS
STATISTICS
A3 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO TABULAR PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A76 BOARD OF GOVERNORS AND STAFF
A78 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
A80 FEDERAL RESERVE
PUBLICATIONS
BOARD
A83 INDEX TO STATISTICAL
TABLES
A84 FEDERAL RESERVE BANKS,
AND OFFICES
BRANCHES,
A86 MAP OF FEDERAL RESERVE
SYSTEM
Changes in Consumer Installment Debt:
Evidence from the 1983 and 1986
Surveys of Consumer Finances
This article was prepared by Robert B. Avery,
Gregory E. Elliehausen, and Arthur B. Kennickell
of the Board's Division of Research and
Statistics, with the assistance of Aliki Antonatos,
Charles Luckett, and Phoebe Roaf.
Consumer installment debt has grown substantially during the current economic expansion. By
1986, the level of such debt outstanding had
reached a record high relative to disposable
income. Aggregate data, however, reveal little
about the behavior underlying this growth.
Household surveys provide an opportunity to
learn who borrows, how much is borrowed, and
for what purposes the credit is used.
This article uses survey data to examine the
elements underlying the recent rise in consumer
installment debt, which consists of credit card
debt, automobile and home improvement loans,
and other regular-payment loans for durables and
personal expenses. The data are from the 1983
and 1986 Surveys of Consumer Finances, which
were sponsored by the Board of Governors of
the Federal Reserve System, the U.S. Department of Health and Human Services, and six
other government agencies. In general, household surveys allow one to examine the distribution of debt over the population in terms of
income, age, and other demographic characteristics. A particularly valuable feature of the 1983
and 1986 surveys is that the same families were
interviewed in both years; this continuity allows
one to link changes in consumer debt with
changes in the economic circumstances of specific families.
Several findings emerge from this study. First,
debt-service payments have risen at a much
slower rate than the stock of debt has. This
finding can be explained by a gradual lengthening
of contract maturities and, more recently, a
decrease in interest rates. While little of the
growth in aggregate debt payments can be attributed to changes in demographics other than the
general increase in population, the growth does
appear to be closely linked to increases in income and was greatest among families with high
income.
Second, the types of credit consumers use
have changed in importance. Credit cards appear
to be playing a greater role in consumer borrowing than they had previously. The surveys also
suggest that between 1983 and 1986 only a small
amount of home equity credit (mortgage debt)
was substituted for consumer installment credit.
That three-quarters of the families with consumer installment debt were homeowners, however,
suggests a potential for such substitution. Since
the 1986 survey, the substitution of mortgage
credit for consumer credit may have increased in
response to changes in the federal tax law and to
the heavy promotion of home equity lines of
credit.
Third, the debt burdens of families as measured by the ratio of their payments to their
income vary considerably over time. Only a few
families appear to carry heavy debt burdens over
long periods: most families with heavy debt
burdens appear to reduce their ratio of payments
to income substantially, primarily through increases in their income. Nevertheless, some concern about this group seems warranted. The
share of aggregate payments made by families
with large payments relative to their income rose
substantially between 1983 and 1986, despite the
relatively small change in the number of such
families.
Finally, more than 80 percent of the families
that have consumer installment debt also have
financial assets or home equity sufficient to permit liquidating their debts in emergencies. This
762
Federal Reserve Bulletin • October 1987
finding appears to hold for more than half of the
families with high payments relative to their
income.
2. Ratio of consumer installment debt to disposable
income
AGGREGATE CHANGES IN CONSUMER DEBT
IN RECENT YEARS
The growth in consumer credit from 1983 to 1986
is the most recent expansion in a cyclical pattern
that has characterized the period since World
W a r II ( s e e t h e FEDERAL RESERVE BULLETIN f o r
June 1985). The first half of the 1970s marked the
end of a long period of moderate growth in
consumer debt. In the following years, consumer
borrowing expanded sharply (chart 1). Consumer
installment credit outstanding grew at an average
compound annual rate of 15 percent between
1976 and 1979, compared with the 10 percent rate
that prevailed between 1970 and 1975.
Several factors contributed to the acceleration
of consumer debt in the late 1970s. Coincident
with the quickening of inflation after 1975, consumers increased their use of installment credit
to finance purchases of durables. At the same
time, the maturities of contracts on new consumer loans began to lengthen. The lengthening of
contract maturities reduced the rate at which
debt had to be repaid, and thus a given stock of
outstanding debt implied a lighter burden of debt
service than otherwise would have been the
case. The reduction in the rate of debt repayment
lowered consumers' monthly payments, probably stimulated the demand for credit, and further
increased the stock of outstanding debt. Finally,
an increase in the use of credit cards appears also
to have contributed to this growth.
During the recessions of 1980 and 1981-82,
1. Consumer installment credit outstanding
Ratio scale, billions of dollars
1970
1974
1978
1982
Shaded areas represent periods of economic recession.
1986
1970
1974
1978
1982
1986
Shaded areas represent periods of economic recession.
growth in consumer debt slowed dramatically.
Between 1979 and 1982, consumer installment
credit outstanding grew at an annual compound
rate of less than 6 percent per year. During this
period, constraints on the supply of credit became important. Market rates of interest rose to
state ceilings; as a result, lenders limited credit.
Besides these constraints, the federal government's short-lived program in 1980 to control
credit led creditors to adopt restrictive measures.
Consumer borrowing expanded rapidly after
the 1981-82 recession. From the end of the
recession until the beginning of 1987, consumer
installment credit outstanding grew at an average
compound annual rate of 18 percent. Much of
this growth reflected the normal pattern in an
economic expansion.
SOME LIMITATIONS OF AGGREGATE
MEASURES
Changes in the aggregate stock of consumer
installment debt may not fully reflect the changes
in the role of debt or their relation to other
economic changes. One adjustment that is often
made to this aggregate measure is to divide it by
aggregate disposable personal income; this ratio
is commonly used as an indicator of the burden
of such debt on households (chart 2). Even with
the adjustment, this measure has a serious limitation: changes in the ratio have no simple relation
to changes in the circumstances of individual
households. Such information is best obtained
from household surveys.
Another limitation of the stock measure of
consumer installment debt is that, in the short
run, changes in the level of installment payments
are believed to be tied more closely to changes in
Changes in Consumer Installment Debt
household behavior than are changes in the stock
of debt. Unfortunately, information on aggregate
consumer installment payments is not available,
though it can be estimated from household survey data.
SURVEY
763
credit card balances. Closed-end consumer credit includes all consumer installment debt with
regularly scheduled payments. Financed balances on credit cards include only the part of the
charges appearing on families' most recent credit
card statements that remain after the most recent
payments. Thus this measure of payments does
not reflect the portion of the reported aggregate
stock of credit card debt that is attributable to the
use of credit cards as a convenient substitute for
currency or checks (see the F E D E R A L R E S E R V E
B U L L E T I N for March 1 9 8 7 ) . The construction of
these payment variables is discussed more fully
in the appendix. Many families pay more on both
credit card debt and closed-end consumer debt;
the payment variable used here represents their
minimum monthly obligation.
The surveys indicate that monthly payments
on consumer installment debt measured in this
way have risen less rapidly than the corresponding aggregate of consumer installment debt has.
While the volume of consumer installment credit
grew at an average compound annual rate of 17.9
percent from 1983 to 1986, monthly payments
increased at an annual rate of 11.5 percent (table
1). This finding is consistent with the effects of
changes in the terms of typical loan contracts:
the continuing trend toward longer contract maturities and, since the early 1980s, lower interest
rates. For example, a borrower with typical
terms for a new-car loan could have borrowed 21
percent more in early 1986 than in early 1983 for
the same monthly payment.
The surveys enable one to estimate more than
aggregate totals. In particular, they allow the
association of debt and debt payments with a
MEASURES
Comprehensive household survey data are available for only a few years during the 1970-86
period. The Survey Research Center of the University of Michigan conducted Surveys of Consumer Finances in 1970, 1977, 1983, and 1986.
These surveys collected information on family
assets, debts, income, employment, and demographic characteristics. (For a more detailed
description of the surveys, see the appendix.)
For the 1986 survey, respondents to the 1983
survey were reinterviewed. Thus, using the 1983
and 1986 surveys, one can study changes in the
consumer installment debt of individual families
over a period during which aggregate consumer
debt grew rapidly, and one can relate those
changes to the family's income and assets.
From the data collected in the four surveys, an
estimate of payments on consumer installment
debt was constructed to correspond as closely as
possible to payments on the measured aggregate
stock. Payments on consumer installment debt
are defined throughout the rest of this article as
the sum of scheduled monthly payments on
closed-end consumer credit and 5 percent of
financed balances on credit cards, which is commonly the minimum payment on outstanding
1. Aggregate and survey-based measures of debt, selected years, 1970-86'
Percent, except as noted
Measure
i
Aggregate
Consumer installment debt outstanding (billions of dollars)
Annua] compound rate of change from preceding period
Ratio of installment debt to disposable income
Survey-based
Payments per month (billions of dollars)
Annual compound rate of change from preceding period
Families with debt
Mean ratio of debtors' payments to income
1. Figures in this and all subsequent tables are based on data
1970
1977
1983
1986
Memo:
Weighted
average,
1970-86
100.5
210.0
11.2
15.1
337.0
8.2
14.1
551.8
17.9
19.6
253.8
11.2
15.0
5.0
8.1
56.4
10.9
7.7
7.3
56.9
9.3
10.6
11.5
58.5
10.0
5.8
8.4
55.9
10.2
'
14.2
2.7
52.6
10.4
supplied by families with a head 25 years of age or more (see the
appendix).
764
Federal Reserve Bulletin • October 1987
broad range of economic and demographic characteristics. One can determine the types of families that have consumer debt; examine the
changes in their debt; and, by looking at the
abilities of debtors to repay their loans, explore
the issue of debt burden. For example, a simple
survey measure of payments, the mean ratio of
monthly payments on family debt to gross
monthly family income, gives a different picture
of the perceived recent rise in debt burden than
that given by the aggregate measure: whereas the
aggregate ratio of installment debt to disposable
income has increased more than 5 percentage
points over all, the survey-based ratio of payments to income has changed only slightly over
the past 16 years (see table 1). The next sections
show how this apparent stability masks complex
changes.
SURVEY EVIDENCE ON CHANGES IN DEBT
The 1983 and 1986 surveys allow a more detailed
look at the factors connected with the recent rise
in consumer debt. They reveal some ties be-
tween income, automobile purchases, the use of
credit cards, and the growth in consumer credit.
While the surveys show a strong association of
the levels of family debt with demographic characteristics and with expenditures for durables
other than automobiles, these factors appear to
explain very little about the growth in debt.
Debt and Demographic
Change
Much of the recent increase in consumer debt is
commonly attributed to demographic changes in
the population. The use a family makes of consumer installment debt has been traditionally
viewed as closely associated with its stage in the
life cycle. A fundamental concept of the economic life cycle is that at different points in life a
family's income and desired expenditures may
not match. The income of young families is
generally below its long-term level, yet families
in that stage must bear the large costs of furnishing a place to live and of rearing children. Theory
leads one to expect that these families try to
bridge the temporary gap between income and
2. Use of consumer installment credit by families with selected characteristics, 1983 and 1986
Percent, except as noted
1986
1983
Median
Share
of total
payments
81
131
201
266
386
45
100
150
215
250
8.8
8.6
7.2
6.5
4.9
4.2
12.4
28.3
24.6
30.5
19.8
23.9
26.9
15.0
14.4
20.0
23.3
25.8
15.3
15.5
68.9
77.2
70.1
53.5
25.4
206
250
274
192
101
173
192
145
88
45
7.4
7.8
6.1
4.8
4.4
27.5
32.5
22.4
13.2
4.5
24.6
21.2
16.8
16.3
21.1
24.7
21.5
14.9
16.4
22.5
76.9
23.1
60.3
54.3
238
163
160
100
6.4
7.6
79.8
20.2
67.2
32.8
70.9
29.1
6.2
82.7
59.0
223
150
6.4
85.0
82.9
82.6
101
7.9
17.2
56.2
195
100
8.0
15.0
17.1
17.4
134
6.6
100.0
58.5
218
145
6.6
100.0
100.0
100.0
Median
Share
of total
payments
Families
with
consumer
debt
Mean
87
116
168
211
283
50
80
142
187
216
12.2
7.6
7.1
6.0
4.2
5.2
14.5
31.4
23.4
25.5
33.2
51.7
69.5
76.9
65.0
70.7
74.6
65.2
50.5
21.2
171
196
192
164
89
138
150
153
108
40
7.2
6.5
6.8
5.6
4.5
30.0
31.2
21.2
13.6
4.0
Type of occupancy
Homeowner
Renter
58.5
53.6
194
131
158
92
6.3
6.9
Race or national
origin of head
Caucasian
Nonwhite or
Hispanic
56.3
176
138
59.6
169
All families with head
25 years of age or
more
56.9
175
Mean
Income (1986 dollars)
Less than 10,000 . . .
10,000-19,999
20,000-34,999
35,000-49,999
50,000 or more
30.2
51.8
68.9
73.4
62.2
Age of head (years)
25-34
35-44
45-54
55-64
65 or more
Family characteristic
Memo:
Distribution of
families
Median
ratio of
payments
to income
Median
ratio of
payments
to income
Families
with
consumer
debt
Monthly
payment
(dollars)
Monthly
payment
(dollars)
1983
1986
Changes in Consumer Installment Debt
765
3. Actual and projected consumer installment payments by families with selected characteristics, 1983-86
Percent
Increase in
payments, 1983-86
Actual
growth in
income per
family,
1983-86
(5)
Memo:
Proportion of
all families,
1986"
(1)
Actual 1986
share of
payments 1
(2)
Head 25-44 years of age
Unmarried, no children
Married, no children
Married, youngest child under 6
Married, youngest child over 6
10.6
5.0
12.6
10.7
10.9
8.8
19.7
14.7
30.0
-5.6
25.6
14.5
88.7
16.3
54.6
0.4
47.4
26.3
17.5
13.8
Head 45 years of age or more
Married, children
Married, no children, not working 3
Married, no children, working
Unmarried, no children, not working 3
Unmarried, no children, working
5.9
11.1
13.7
15.9
6.6
8.2
3.5
19.5
3.0
5.5
-8.1
20.1
15.8
48.1
11.9
-0.2
22.4
62.8
164.0
76.6
21.0
10.0
3.8
21.9
29.1
Head over 25 years, unmarried, with children
8.0
6.2
19.1
45.1
45.8
All families with head 25 years of age or more
100.0
100.0
14.2
38.3
14.3
Family characteristic
Projected 2
(3)
Actual
(4)
1. Details may not add to totals because of rounding.
2. Payments are projected by multiplying 1983 group payments by
the rate of inflation and by the population increase for each group.
3. Head of family not in labor force.
expenditure by borrowing. Many economists
have speculated that, during the past several
years, credit has expanded in part because the
"baby boom" generation has moved into the lifecycle phase most associated with the purchase of
major durables, which are typically tied to the
use of installment credit.
The distribution of debt payments across various income and age groups in 1986 is broadly
consistent with the life-cycle theory (table 2).
The use of debt, in terms both of incidence and of
payment levels, is highest for families whose
heads are 25 to 54 years of age and lowest among
families with heads 55 years of age and older.
Thus a shift of population toward younger families, which are likely to be heavy users of debt,
may be expected to raise aggregate borrowing.
Survey data suggest, however, that demographic changes from 1983 to 1986 may have
actually damped the growth of debt in the population. In particular, while the proportion of
families with heads between 25 and 45 years of
age increased from 1983 to 1986, the proportion
of families of older unmarried people, which
generally hold little debt, grew even faster. Calculations presented in table 3 take some account
of demographic shifts by first dividing families
into 10 representative life-cycle groups. Column
3 shows the growth in payments predicted for
each group on the bases of inflation and of the
growth in the number of each type of family. The
14.2 percent figure at the bottom of the column is
the weighted average of the predictions for each
group and thus is an estimate of payment growth
accounting for both population shifts and for
overall population growth. If debt payments of
all groups had increased equally at the rate of
growth of the overall population and of inflation,
payments would have grown by 19 percent over
this period. That this number is greater than the
14.2 percent growth projected taking account of
demographic shifts and overall growth suggests
that these shifts have damped the growth of
credit.
The projections of 14.2 percent and 19 percent
are both much lower than the 38.3 percent
growth in payments observed between the two
surveys. The unexplained difference is reflected
in broad deviations of predicted and actual increases for almost all the subgroups, as shown by
the comparison of columns 3 and 4 of table 3.
These figures suggest that, with the exception of
young married couples with children six years of
age or older, each group had actual growth of
payments in 1986 larger than their predicted
growth. The behavior of the exceptional group is
somewhat puzzling. The actual increase for this
group, which is largely the same as the 35- to 44-
766
Federal Reserve Bulletin • October 1987
year-old group in table 2, was very small despite
a projected increase higher than average.
One explanation of this anomaly may be the
relatively slow growth in income for this group
(column 5 of table 3). As noted in the December
1986 issue of the F E D E R A L R E S E R V E B U L L E T I N ,
sluggish growth in purchases of automobiles and
other durables has been linked to the income
performance of this group. One of the other two
groups with less than average income growth—
households with nonworking, married head; who
are more than 45 years of age—had an actual
increase in payments only slightly larger than
predicted. These findings suggest that the growth
in debt payments is closely linked to the growth
in income. This conclusion highlights the importance of changes in income in explaining the
aggregate growth of payments from 1983 to 1986.
As shown in table 2, the share of payments made
by families in the highest income category grew
from 25.5 to 30.5 percent. This group had the
highest growth in income as well (not shown in
the tables).
Debt and
Purchases
More than 85 percent of the debts observed in
1986 were debts acquired since 1983 and thus
almost surely were connected to purchases over
the intervening period. In the traditional view,
most consumer installment debt is closely associated with expenditures for large durables and
automobiles. Indeed, as table 4 shows, families
who made large purchases between 1983 and
1986 were more likely than the group of all
families to have debts and to have larger-thanaverage installment debt payments in 1986 (compare with the last row of table 2). However, the
incidence, level, and share of total payments of
these families, except for automobile purchasers,
changed only slightly over the three-year period.
Families that purchased automobiles appear to
have significantly increased their share of debt
payments. The increase is even greater when the
calculations exclude financed credit card payments (not shown in the table). The increase in
the use of automobile credit relative to other
closed-end credit may be due to promotional
subsidies offered by automobile finance companies.
There are indications that the kinds of purchases for which debt is used may have changed.
The survey data suggest that the role of credit
cards in debt payments has increased substantially, though the share of the aggregate stock of
consumer installment debt that credit cards account for remains comparatively small. The proportion of families having credit card debt,
whether alone or in combination with closed-end
debt, increased 5.7 percentage points between
1983 and 1986 (see table 5). Estimated payments
for financed credit card debt, as shown in the last
column of the table, rose from 16.9 percent of
total installment payments in 1983 to 25.3 percent in 1986. This increase, in which virtually
every income and age group participated, accounts for almost half of the increase in installment debt payments since 1983. Such a large
share is surprising given that interest rates on
credit cards did not fall as rapidly as other rates
4. Consumer installment debt for families with selected major expenditures between 1983 and 1986
Percent, except as noted
1983
Expenditure
Move
Major purchase
New house
Automobile
Other 1
Major medical expense
College for children
1986
Families
with
debt
Median
monthly
payment
(dollars)
Median
ratio of
payment
to income
Expenditure
group's
share of
all 1983
payments
Families
with
debt
Median
monthly
payment
(dollars)
Median
ratio of
payment
to income
Expenditure
group's
share of
all 1986
payments
66.5
129
7.1
31.5
63.7
160
6.8
34.1
69.6
67.8
72.6
59.2
72.9
170
143
200
180
160
7.2
6.6
6.9
8.2
5.2
16.4
62.7
41.8
24.2
14.8
70.2
71.6
73.9
62.3
74.1
180
200
225
182
198
6.0
7.7
6.7
8.0
5.1
17.0
78.7
49.5
28.1
19.8
1. Hobby or recreation items and home improvements totaling $3,000.00 or more.
Changes in Consumer Installment Debt
767
5. Distribution of families with selected characteristics, by type of consumer installment debt, 1986
Percent
Total 1
Memo:
Share of
debt
payments
attributed
to credit
card debt
No debt
Credit
card only
Closedend only
Both
credit
card and
closed-end
Income (dollars)
Less than 10,000
10,000-19,999
20,000-34,999
35,000-49,999
50,000 or more
66.8
48.3
30.5
23.1
35.0
16.5
24.3
30.9
30.9
22.9
14.0
13.1
17.7
13.4
15.8
2.8
14.3
20.9
32.6
26.4
100.0
100.0
100.0
100.0
100.0
19.0
27.6
25.2
27.8
23.3
Age of head (years)
25-34
35-44
45-54
55-64
65 or more
31.1
22.8
29.9
46.5
74.6
26.3
28.3
29.3
28.1
16.4
20.5
16.6
17.5
13.1
6.8
22.1
32.3
23.2
12.3
2.2
100.0
100.0
100.0
100.0
100.0
26.9
26.0
20.9
26.7
28.2
All families with head 25 years of age or more
1983
1986
43.1
41.5
15.9
25.2
19.0
14.9
22.0
18.4
100.0
100.0
16.9
25.3
Family characteristic
1. Details may not add to totals because of rounding.
did over this period. Moreover, promotional
subsidies of closed-end debt, particularly for
automobiles, should have contributed, at least
indirectly, to proportionately less borrowing on
credit cards. This apparent contradiction may
arise from changes in the way families use credit
card debt. A great part of the unpaid balances on
credit cards may be treated by families not as
long-term installment debt but rather as payments that are delayed for a few months to
accommodate mismatches in their patterns of
income and expenditure. Families using credit
cards in this way may be less sensitive to differentials in interest rates.
Substitution
between
Consumer
Debt
Mortgage
and
Survey measures of consumer installment payments from 1983 to 1986 may understate the true
change in the use of consumer debt because the
relation between consumer debt and mortgage
debt has changed. Driven by a significant drop in
interest rates and by the spreading use of new
mortgage instruments, outstanding family mortgage debt, according to survey estimates, grew
45 percent over the three years, while reported
property values increased only 26 percent. This
difference in growth suggests that some of the
increase in mortgage debt was used for purposes
other than housing and thus could have substituted for other kinds of debt.
Survey evidence suggests that mortgage debt
was indeed used that way but with only a small
effect on the overall level of consumer debt (table
6. New mortgage borrowing, homeowning families
with heads 25 years of age and more, 1983-86'
Housing and
mortgage status
of homeowner
No move,
1983-86
No mortgage in
1983
Mortgage in
1983
Move to new
home,
1983-86
No mortgage in
1983
Mortgage in
1983
Percent
of
group
with
new
mortgage
Net
new
mortgage financing
(billions
of dollars)2
Memo
Percent
of all
families3
Stock of consumer debt of families with new
mortgages (billions of dollars)
1983
1986
4.4
22.0
24.4
2.9
2.4
12.2
64.1
31.2
17.3
18.6
42.8
3.0
.9
1.5
1.2
91.5
2.6
3.1
8.4
12.5
1. Includes only those who owned homes in both 1983 and 1986.
2. Amount outstanding on current mortgage less amount of retired
mortgage that would have been outstanding in 1986. For movers, the
net change in home value including selling costs was also subtracted.
3. This column does not sum to 100.0 because the table covers
homeowners only.
768
Federal Reserve Bulletin • October 1987
6). Of homeowners with mortgages in 1983, more
than 12 percent of those who did not move during
the three years ending in 1986 refinanced their
mortgages, and more than 4 percent of those
homeowners without a mortgage in 1983 took out
a mortgage (or home equity loan) over this
period. Further, more than 80 percent of the
families moving from one owned home to another (the average of the last two rows of the first
column of table 6 weighted by population) are
estimated to have taken out new mortgage debt.
The total net new financing from these mortgages
(the sum of the numbers in the second column) is
equivalent to more than one-sixth of the consumer debt outstanding in 1986. Determining what
portion of these funds was substituted for consumer debt is difficult, however. Those families
acquiring new mortgage financing actually increased their consumer debt over the three
years, although their share of total outstanding
debt fell from 18 percent to 12 percent (not
shown in the table). If these families had maintained their dollar amount of borrowings so that
they continued to account for 18 percent of total
consumer installment debt outstanding, aggregate outstanding debt would have been 5.9 percent higher, other things being equal. This comparison suggests that the substitution of
mortgage debt for consumer credit in 1983-86
was small.
In the future, borrowers likely will substitute
mortgage financing more extensively for traditional consumer credit. The 1986 tax law gradually eliminates tax deductibility of interest payments on most consumer loans. Given sufficient
home equity, however, all expenditures financed
by home mortgages will still be fully deductible.
The potential for substituting mortgage debt for
consumer debt is considerable. In 1986, the
aggregate home equity of families with consumer
installment debts was 3.4 times the stock of such
debts. As table 7 shows, homeowners are also
considerably more likely than others to have
consumer debt, and a significant portion of nearly every group of homeowners has both mortgage and consumer debt.
CHANGES IN DEBT-PAYMENT
BURDENS
Because the 1983 and 1986 surveys interviewed
the same families, they reveal the effects of
changes in families' economic circumstances on
consumer installment debt and debt burden. The
most striking finding is that debt burdens of
individual families vary greatly over time, a fact
that is obscured in data from separate crosssection surveys. Most families with relatively
heavy debt in 1983 had lighter burdens by 1986.
Virtually all families that had such heavy debt in
1986 had lighter burdens in 1983.
7. Distribution of families with selected characteristics, by mortgage and consumer installment debt, 1986
Percent
Homeowners 1
Others 1
No
debt
Consumer
installment
debt
Memo:
Share of
group
owning
homes
No
debt
Consumer
installment
debt only
Mortgage
only
Mortgage
and
consumer
installment
debt
Income (dollars)
Less than 10,000
10,000-19,999
20,000-34,999
35,000-49,999
50,000 or more
56.3
39.1
17.8
11.1
12.4
24.6
18.1
15.9
14.3
7.5
9.3
13.0
12.6
11.4
21.5
9.9
29.8
53.6
62.8
58.7
68.6
42.8
30.5
26.7
46.1
31.4
57.2
69.5
73.3
53.9
58.6
59.6
70.3
84.8
91.2
Age of head (years)
25 34
35-44
45-54
55-64
65 or more
6.2
4.2
11.7
31.2
65.3
7.0
8.5
20.1
24.2
19.8
18.9
16.3
14.2
13.1
7.7
67.9
71.1
54.0
31.5
7.2
37.9
28.5
46.2
54.7
80.8
62.1
71.5
53.8
45.3
19.2
53.0
70.7
80.2
79.1
78.7
All families with head 25 years of
age or more
1983
1986
27.5
26.0
14.5
15.9
14.0
13.7
44.0
44.4
46.4
45.7
53.6
54.3
Family characteristic
y^ijiiMiv !
1. Details may not add to 100 percent because of rounding.
67.2
70.9
Changes in Consumer Installment Debt
769
8. Distribution of families with heads 25 years of age and older, by ratio of consumer debt payments
to income, selected years, 1970-86
Percent
Debt status
No debt
Ratio of debt payments to income
1-9 percent
10-29 percent
30 percent or more
All families1
1986
Memo: Share
of 1986 debt
payments
allotted to
credit card
debt
1970
1977
1983
47.4
43.6
43.1
41.5
33.0
17.5
2.2
34.7
19.3
2.4
37.6
17.0
2.3
38.9
16.9
2.7
40.0
18.5
11.7
100.0
100.0
100.0
100.0
25.3
1. Details may not add to totals because of rounding.
Debt burden is difficult to measure. Debt payments, while reflecting the obligation of families,
do not necessarily reflect the ability of families to
pay. The fraction of family income obligated to
debt service can nevertheless be used as a crude
measure of debt burden. To examine changes in
burden thus measured, we divided the families
surveyed into four groups: those with no consumer debt, those with payments of 1 to 9
percent of gross income, those with payments of
10 to 29 percent, and those with payments of 30
percent or more of gross income. Though the
proportion of families with no consumer debt
was somewhat higher in 1970 than in later years,
the proportion of debtors in these groups
changed little after 1970 (table 8).
As is clear from the changes in the debts of
individual families in the 1983 and 1986 surveys
reported in table 9, much variability underlies
this apparent stability. The rows show the percentage of families that moved from a given
payment group in 1983 to payment groups de-
fined for 1986, as indicated by the column headings. For example, 28.4 percent of the 1983 highpayment group had no debts at all in 1986, and
only 8.9 percent of the families that were in the
highest debt payment group in 1983 were still in
that group in 1986 (fourth row). For the other two
groups of families with debts in 1983, a majority
had the same debt-payment burden or a lighter
one by 1986.
Sources
of
Change
The debt burden of a household may change for
many reasons. Family finances may be affected
by changes in the composition of the family, by
the aging of its members, by large purchases that
require financing, and by events such as becoming unemployed. These changes, in turn, may
affect family borrowing and debt-payment burdens. In the short run, changes in debt likely will
lag changes in income. Families faced with a
shortfall in income cannot immediately curtail
9. Distribution of families with heads 25 years of age and older and with selected ratios of consumer debt
payments to income in 1983, by ratio of payments to income in 1986
Percent
Ratio of payments to income, 1986
Ratio of payments to income, 1983
No consumer
debt
1-9 percent
10-29 percent
30 percent or
more
All
families 1
No consumer debt
Debt
1-9 percent
10-29 percent
30 percent or more
68.5
19.9
8.9
2.7
100.0
22.9
22.8
28.4
55.4
47.0
28.6
19.8
26.2
34.2
1.9
4.0
8.9
100.0
100.0
100.0
AU families
41.5
38.9
16.9
2.7
100.0
1. Details may not add to totals because of rounding.
770
Federal Reserve Bulletin • October 1987
10. Selected data on consumer installment debt, by change in respondent's status, 1983-86
1983
Change in respondent's status,
1983-86
Separated or divorced
Widowed
Married
Had child
1986
Percent of
group with
consumer
installment
debt
Median
monthly
payment
(dollars)
Median ratio
of payments
to income
Percent of
group with
consumer
installment
debt
Median
monthly
payment
(dollars)
Median ratio
of payments
to income
55.2
32.3
72.5
73.2
88
75
140
125
6.8
7.6
10.1
6.8
55.9
31.2
74.3
76.5
100
50
225
200
7.4
6.0
6.0
7.2
their outstanding loans without drawing on their
assets or declaring bankruptcy. Similarly, families may regard some increases in income as
temporary and be unwilling to take on new debt.
Changes in family structure appear to have a
significant effect on families' debt burdens (table
10). For all these families, except those in which
the respondent had been widowed, the incidence
of debt and the level of payments increased. For
newly married couples, the payment burden fell,
probably because their income significantly increased (not shown in the table).
The survey data reveal that changes in income
are as important as changes in debt payments in
the shifting of families' debt burdens (table 11).
For example, as shown in the last column of the
table, most families that had the highest ratios of
payments to income in 1986 had experienced
11. Debt and income characteristics of families classified by ratio of consumer installment debt payments to
income in 1983, by payment ratio in 1986
Percent, except as noted
Ratio of payments to income in 1986
Item
All
1986
groups
No
consumer
debt
1-9
percent
10-29
percent
30
percent
or more
All groups, 1983
Median monthly 1986 payments (dollars)
Median annual 1986 income (dollars)
Median change in income, 1983-86
Proportion making major purchases, 1983-86'
Families with increase in monthly payments, 1983-86
145
22,704
7.1
61.2
38.7
0
15,000
-1.6
43.2
0
75
30,550
13.2
71.5
55.0
300
24,000
13.3
80.1
87.1
375
10,000
-20.9
72.3
94.9
No consumer debt
Median monthly 1986 payments (dollars)
Median annual 1986 income (dollars)
Median change in income, 1983-86
Proportion making major purchases, 1983-861
Families with increase in monthly payments, 1983-86
91
15,000
1.3
49.2
31.5
0
13,000
-.9
40.3
0
47
25,000
11.1
64.5
100.0
204
16,000
11.5
77.3
100.0
260
4,342
-67.8
70.5
100.0
1-9 percent of income
Median monthly 1986 payments (dollars)
Median annual 1986 income (dollars)
Median change in income, 1983-86
Proportion making major purchases, 1983-86'
Families with increase in monthly payments, 1983-86
147
29,312
7.1
70.9
53.8
0
22,000
-7.8
57.0
0
85
34,000
10.4
72.7
60.1
306
25,000
6.7
80.7
94.6
5%
17,750
-33.2
83.9
94.9
10-29 percent of income
Median monthly 1986 payments (dollars)
Median annual 1986 income (dollars)
Median change in income, 1983-86
Proportion making major purchases, 1983-86'
Families with increase in monthly payments, 1983-86
186
26,000
15.7
68.2
25.8
0
17,172
7.1
32.8
0
80
30,000
23.0
75.1
6.3
365
30,000
28.0
85.7
73.7
575
15,200
-12.0
73.7
86.9
30 percent or more of income
Median monthly 1986 payments (dollars)
Median annual 1986 income (dollars)
Median change in income, 1983-86
Proportion making major purchases, 1983-86'
Families with increase in monthly payments, 1983-86
200
20,000
75.0
52.1
22.3
0
12,000
23.5
55.2
0
125
23,000
119.2
66.1
9.6
228
20,000
75.0
43.9
31.3
200
5,484
-2.2
28.4
100.0
1. Major purchases include automobiles, major durables, hobby or recreation items, and home improvements.
Changes in Consumer Installment Debt
declines in their income over the previous three
years; the median decline was 20.9 percent.
Also, virtually all high-debt families in 1986 (94.9
percent) had increased their level of payments.
Families with debts in 1986 that had lower payment ratios than they had in 1983 substantially
increased their income and, in general, were
more likely to have decreased their level of
payments. Income increases were particularly
dramatic for families that had had the highest
ratios in 1983 but had lower ones in 1986, suggesting that these families may have been experiencing temporarily low income in 1983. This
change in income, combined with the decrease in
payments for almost 80 percent of the 1983 highratio group, led to the striking reduction of debtpayment burden for this group in 1986.
Purchases also played a part in changes in
debt-payment burdens. Except for families that
were in the group with high payment ratios in
both years, debtors who stayed in the same
group or moved to a higher one were also more
likely than the population as a whole to have
made a major purchase.
771
Some of the observed movements of families
to lower ratio groups may have resulted from
bankruptcy rather than from the repayment of
debts. From aggregate data, we estimated that
about 1 percent of families in the 1986 survey
probably declared bankruptcy over the preceding three years (such information was not collected in the surveys). Under the extreme assumption that all families subsequently declaring
bankruptcy were in the 1983 high-ratio group—a
very unlikely correspondence—at most one-third
of the 1983 high-ratio families could have reduced their debt burdens through bankruptcy.
Thus the general lightening in the debt-payment
burdens for the 1983 high-ratio group most likely
reflects improvement in income rather than liquidation of debts through bankruptcy.
Families
Burdens
with Heavy
Debt-Payment
Families in the group with the highest ratios of
payments to income are of particular concern.
12. Families with selected characteristics and heavy debt in 1986, by 1983 debt-payment group
Percent, except as noted
Ratio of payments to income in 1983
Family characteristic in 1986
No
consumer
debt
30
percent
or more
Memo:
All
families
with debt
in 1986
1-9
percent
10-29
percent
32.9
20.1
28.6
18.4
69.6
13.9
16.5
1.1
100.0
-6,777
25.9
52.7
13.5
7.1
.9
100.0
-6,373
100.0
-2,900
100.0
-123
All ages'
16.7
31.7
3.4
12.2
35.9
100.0
27.6
29.2
3.1
36.7
3.5
100.0
19.1
24.9
25.5
23.8
6.9
100.0
30.4
12.0
12.9
44.8
100.0
29.1
28.3
17.8
15.0
9.8
100.0
Type of debt
Credit card
Closed-end
All types 2
7.5
97.4
100.0
86.7
92.5
100.0
63.3
96.2
100.0
43.3
100.0
100.0
74.5
56.9
100.0
70.5
3.7
45.0
86.4
78.9
49.2
42.7
89.7
60.5
40.2
17.5
83.0
28.4
16.5
44.8
73.2
64.3
35.3
22.0
79.4
Family income (dollars)
Less than 10,000
10,000-19,999
20,000-34,999
35,000-49,999
50,000 or more
All incomes 1
Median change in income, 1983-86 (dollars)
Age of head (years)
25 34
35-44
45 54
55 to 64
Major expense, 1983-86
Purchase of car
Other purchase
Medical
All major expenses 3
1. Details may not add to 100.0 percent because of rounding.
2. Totals of details exceed 100.0 percent because some families had
both types of debt.
72.5
11.6
14.8
*
#
*
*
*
11.3
20.6
30.7
20.1
17.2
100.0
2,700
3. Totals of details exceed the reported total because some families
made more than one type of major purchase,
*Less than 0.05 percent.
772
Federal Reserve Bulletin • October 1987
Because of their heavy payment burden, they
may have the greatest potential for default.
While this group is small, their debt appears to be
sufficient so that default would have some disruptive effects on lenders. To assess that concern, we examined in more detail the changes in
the economic circumstances of the 1986 highratio group.
Table 12 presents the characteristics of families that had heavy debt-payment burdens in
1986 classified by their 1983 payment groups.
Families that went from no debt in 1983 to a high
debt-payment ratio in 1986 appear very different
from those that went from a low or moderate
ratio to a high one. Families that went from no
debt to a high ratio were more likely to be in
lower income groups in 1986 and were disproportionately elderly. Moreover, their income decreased more than that of the other groups over
the three-year period. Most of the debt acquired
by the group was closed-end, rather than credit
card, debt and was associated largely with buying a car or with major medical expenditures. As
noted earlier, because of their generally low or
reduced income, borrowing for any major purchase was more likely to have caused them to
have a high ratio of payments to income. The
families that had heavy burdens of debt payment
in both years were similar to the group that had
no debt in 1983.
In contrast to the families with no debt or with
a high payment ratio in 1983, those families
whose payment burdens increased from the lower levels (1-29 percent) in 1983 to the highest
ones in 1986 generally were younger and were
more likely to have income only somewhat below average than to be poor. For them, incurring
debt was more likely to be associated with a rise
in a broad range of expenditures, as reflected in
the higher proportion of credit card payments in
their debt service. These families, too, were
more likely than the population of all debtors in
1986 to have bought a car in the prior three years.
Changes
of Total
in the
Distribution
Payments
Despite the similar proportion of families in the
high-ratio groups in 1983 and 1986, the share of
payments made by families with high payment
ratios rose dramatically (table 13). The top panel
of the table shows the percentage of all families
13. Distribution of 1983 payment-ratio groups and 1983 and 1986 payments, by 1986 payment-ratio groups
Percent
1986 ratio of payments to income
1983 ratio of payments to income
All 1986
groups1
No
consumer
debt
1-9
percent
10-29
percent
30
percent
or more
All groups
Families
Total 1983 payments
Total 1986 payments
100.0
100.0
100.0
41.5
20.3
0
38.9
51.6
37.1
16.9
25.2
46.6
2.7
2.9
16.3
No consumer debt
Families
Total 1983 payments
Total 1986 payments
40.5
0
19.6
27.8
0
0
8.1
0
5.9
3.6
0
6.9
1.1
0
6.8
1-9 percent of income
Families
Total 1983 payment*
Total 1986 payments
38.1
37.4
47.6
8.7
8.3
0
21.1
20.5
21.4
7.6
8.3
22.4
.7
.4
3.8
10-29 percent of income
Families
Total 1983 payments
Total 1986 payments
19.5
55.8
30.1
4.4
10.4
0
9.2
28.8
9.2
5.1
14.4
15.6
.8
2.2
5.3
1.9
6.8
2.6
.5
1.6
0
.5
2.4
.6
.6
2.4
1.6
.2
.3
.4
30 percent or more of income
Families
Total 1983 payments
Total 1986 payments
1. Because the figures in this table are based on the families interviewed both in 1983 and in 1986 and are weighted to reflect the
structure of the 1986 population, the percentage of families here differs slightly from that in table 8.
Changes in Consumer Installment Debt
773
14. Relation of assets to debt of payment-ratio groups, 1986'
Percent
Financial assets
Payment-ratio group
Financial assets plus home
equity
Home equity
Ratio to
debt of all
respondents
in group2
Proportion
whose assets
exceed their
debt
Ratio to
debt of all
respondents
in group2
Proportion
whose assets
exceed their
debt
Ratio to
debt of all
respondents
in group2
Proportion
whose assets
exceed their
debt
1-9 percent
10-29 percent
30 percent or more
75.4
48.8
41.3
67.7
24.0
12.3
81.7
70.7
50.6
72.4
58.8
51.0
94.1
80.4
70.6
90.4
65.6
53.8
All families with head 25 years of
age or more
1983
1986
50.3
56.8
51.1
52.2
77.2
71.1
66.0
67.4
87.2
83.5
80.4
81.4
1. Based on families with heads 25 years of age and more.
2. To reflect implicit debt coverage at the level of the individual
family, the numerator is the sum over all families of each family's
coverage up to the amount of its consumer installment debt, and the
denominator is total consumer installment debt.
in each payment-ratio group, and the rest shows
the percentage of total 1983 and 1986 payments
each group accounted for. Thus the 16.3 percent
figure in the third row of the fifth column is the
share of total 1986 payments made by the 1986
high-ratio group, a figure significantly higher
than the 6.8 percent share of total 1983 payments
made by the 1983 high-ratio group (next-to-last
row of the first column). Shares of payments,
like the ratios of payments to income, are highly
variable. The 1986 high-ratio group made only
2.9 percent of total payments in 1983. Similarly,
by 1986 the share of payments by the 1983 highratio group had fallen to only 2.6 percent. Families that were in the middle-ratio groups in both
1983 and 1986 made more than two-thirds of the
total payments.
lenders of second mortgages generally will lend
only 80 percent of home equity for consumer
debts, 75 percent of families still had financial
assets or usable home equity at least as great as
their consumer debts, and 77 percent of debt was
covered in this way (these data are not shown in
the table).
Families with the smallest ratio of payments to
income also had the highest ratio of assets to
debt, but even families with high ratios of payments to income had assets to offset 71 percent
of their debts. In 1986, more than half the group
with the highest debt-payment burden had financial assets or home equity at least as large as
their consumer debts.
Although home equity constitutes most of this
implicit debt coverage, financial assets offered
significant coverage (see the first two columns of
table 14). That the majority of families with
consumer installment debts have financial assets
greater than the value of their debts suggests that
borrowing decisions are part of more complex
portfolio decisions. Further work with the 1983
and 1986 surveys will explore these connections.
CREDIT RISK
The potential for credit risk suggested by the
overall rise in the ratio of total payments on
consumer installment debt to income and by the
increase in the share of total payments by the
group with high ratios of payments to income is a
cause for some concern. Survey evidence may
temper this concern.
In both the 1983 and the 1986 surveys, about
four-fifths of families had assets of greater value
than their consumer debts outstanding (table 14).
In 1986, 83.5 percent of consumer installment
debt outstanding, evaluated family by family,
was matched by financial assets or home equity
(the fifth row of the fifth column). Given that
CONCLUSIONS
While the data from the 1983 and 1986 surveys
are not sufficient to explain fully the great increase in consumer installment debt between
these years, they do suggest that such debt has
more complex variations over time than might be
implied by either aggregate data or simple crosssection surveys. In spite of the recent sharp rise
774
Federal Reserve Bulletin • October 1987
in aggregate consumer installment debt, the surveys offer evidence of a smaller rise in the
associated debt-service payments. While crosssection surveys give an appearance of stability in
the patterns of debt holdings and debt burdens,
observation of the same families over the 198386 period indicates that the debt positions of
families move considerably over time.
The survey evidence on credit risk suggests
that most consumer debt is, at least implicitly,
covered by family assets, even for those families
with the highest ratios of debt payments to
income. Moreover, according to the data, fam-
ilies with high debt-payment burdens in 1983
were able to improve their positions through
growth in income by 1986. Whether those in the
1986 high-ratio group will be able to improve
their positions may depend on overall economic
conditions. During 1983-86, the economy's expansion, the decrease in unemployment, and the
increase in disposable income probably aided the
lightening of the burden of families that had high
ratios of payments to income in 1983. If economic growth moderates, families in the current highratio group may find reducing their debt-payment
burdens more difficult.
APPENDIX: PREPARATION OF SURVEY DATA
sample was selected using a method known as
multistage area probability sampling, which
draws a representative sample of housing units
or households in the contiguous 48 states of the
United States exclusive of individuals on military
bases and in institutions. 2 The supplemental
high-income sample of the 1983 survey was intended to increase the representation of wealthy
families in the survey. The high-income sample
was drawn from a large sample of 1980 tax
returns using multifaceted sampling criteria. The
sampling procedure was designed to preserve the
privacy of tax information and to protect the
identity of survey respondents. The results reported in this article are based on the full 1983
sample, which includes the supplemental highincome observations. 3
The unit of observation was the family. A
"family" consists of all individuals living togeth-
This appendix briefly discusses the collection
and the preparation of the data used in the text.
Issues include the design and the content of the
surveys, the editing procedures employed to deal
with problems of missing data, the construction
of sampling weights used to calculate the population estimates, and definitions for debt variables.
Survey
Design
Most of the survey data in this article were
drawn from the 1983 and 1986 Surveys of Consumer Finances conducted by the Survey Research Center of the University of Michigan
under the direction of Richard T. Curtin. 1 The
sample for the 1983 survey consists of an area
probability sample (3,665 households in the final
sample) and a supplementary sample of highincome respondents drawn from tax files (438
cases in the final sample). The area probability
1. Data were used also from the 1970 and 1977 Surveys of
Consumer Finances; see George Katona, Louis Mandell, and
Jay Schmeideskamp, 1970 Survey of Consumer Finances
(Institute for Social Research, 1971), and Thomas A. Durkin
and Gregory E. Elliehausen, 1977 Consumer Credit Survey
(Board of Governors of the Federal Reserve System, 1978).
Data from the 1983 and 1986 Surveys of Consumer Finances
are available from the National Technical Information Services, 5285 Port Royal Road, Springfield, Virginia 22161.
2. See Leslie Kish, Survey Sampling (Wiley, 1965).
3. The distribution of consumer debt in the 1983 area
probability sample differs only slightly from that in the full
1983 sample, which includes the high-income observations.
Hence, consumer credit statistics from the full 1983 sample
can be compared with statistics from the cross-section samples in the 1970 and 1977 surveys. For variables that have
highly skewed distributions, however, the full 1983 sample is
not comparable to 1970 and 1977 cross-section samples. See
Robert B. Avery, Gregory E. Elliehausen, and Arthur B.
Kennickell, "Measuring Wealth with Survey Data: An Evaluation of the 1983 Survey of Consumer Finances," Research
Papers in Banking and Financial Economics 99 (Board of
Governors of the Federal Reserve System, Division of Research and Statistics, Financial Studies Section, 1987).
Changes in Consumer Installment Debt
er in the same household who are related by
blood, marriage (including partnership), or adoption. A "family" may also be a single individual.
In a few cases, when two or more families lived
in a household, only the primary or economically
dominant family was interviewed. The head of
the family or a financially knowledgeable spouse
was selected as a respondent.
Respondents were interviewed in person for 75
minutes. The interview solicited a detailed inventory of the families' assets and liabilities, including all deposit accounts, stocks, bonds, business
and property holdings, homes, insurance, automobiles, pensions, and all debts and mortgages.
Besides the standard demographic data, income
information, and work history, information was
obtained on the respondent's use and understanding of credit and other financial services.
Interviewing took place between February and
July of 1983.
The 1986 survey reinterviewed respondents to
the 1983 survey. If the respondent had been
divorced or separated since the 1983 interview,
both the original respondent and the former
spouse were included in the 1986 sample. Other
members who left the family to form new households, however, were not included. As in the
earlier survey, the unit of observation was the
family.
The questionnaire for the 1986 survey covered
the marital history of the respondent and the
spouse, the disposition of wealth in divorce or
upon death of a spouse, changes in employment
of the respondent and the spouse, purchases and
sales of houses since 1983, refinancings of mortgages, purchases of automobiles, expenditures
for consumer durables, current debt payments
and asset holdings, attitudes about saving, expenditures for children's education, charitable
activities, unusual expenses and income, and
total family income in the 1983-86 period.
The 2,822 interviews were conducted by telephone from June to September 1986; they lasted
an average of 27 minutes. Table A.l summarizes
the sample composition for the 1986 survey.
The samples used for this article include only
families with heads 25 years of age or older. The
reason for using this subsample is that the design
for the 1986 survey undersampled new households in the under-25 age group and hence was
775
A . l . Composition of the sample of the 1986 Survey
of Consumer Finances
Percent of
1983 sample
Family characteristic
Age (years) and marital status
in 1983
24 or less
Married
Unmarried male
Unmarried female
25-34
Married
Unmarried male
Unmarried female
35-44
Married
Unmarried male
Unmarried female
45-54
Married
Unmarried male
Unmarried female
55-64
Married
Unmarried male
Unmarried female
65 or more
Married
Unmarried male
Unmarried female
Percent of
1983 group
also in 1986
sample
3.3
2.1
2.6
64.7
56.0
46.7
13.5
4.1
5.0
65.6
59.2
58.0
13.6
1.8
4.1
70.7
71.1
62.1
10.5
1.7
3.2
70.9
50.6
66.5
9.8
1.5
3.7
72.1
48.9
70.6
9.9
1.8
7.7
60.6
41.4
55.1
1983 income (dollars)
10,000 or less
10,000-19,999
20,000-34,999
35,000-49,999
50,000 or more
24.0
26.8
26.1
12.9
10.2
46.5
62.4
70.8
75.8
77.6
Race or national origin of head
Caucasian
Nonwhite or Hispanic
82.6
17.4
67.5
47.6
1983 ratio of payments
income
No consumer debt
1-9 percent
10-29 percent
30 percent or more
43.5
36.9
17.3
2.4
57.6
69.5
68.9
62.1
100.0
64.0
to
All families
deemed inadequate for representing change in
that group. Statistics computed from the 1983
survey, which should be representative of all age
groups, suggest that the exclusion of families in
the under-25 group will reduce measured outstanding debt 5.5 percent and installment debt
payments 6.1 percent.
Errors of Sampling,
Nonresponse
Reporting,
and
The results of this survey, and the estimates of
population characteristics derived from it, are
subject to errors based on the degree to which
776
Federal Reserve Bulletin • October 1987
A.2. Approximate 95 percent sampling errors of
survey estimates of percentages in the 1983 and
1986 surveys and of changes in percentages
between the two surveys'
Percent
Survey results
Full 1983
sample
Full 1986
sample
Changes
between
1983 and
1986
surveys 2
50
30
20
10
5
1
1.5
1.4
1.2
.9
.7
.3
1.8
1.6
1.4
1.1
.8
.4
2.4
2.2
1.9
1.4
1.0
.5
1. 1.96 standard errors.
2. For estimates based on the full samples of each survey.
the sample differs from the general population, to
errors arising during the interview, and to errors
derived from incomplete responses.
First, all estimates based on the survey data
are subject to sampling error, which is a measure
of the random deviation of the survey findings
resulting from the selection of a particular sample. Table A.2 contains the approximate sampling errors associated with the percentage estimates made with various sample sizes, assuming
a confidence interval of 95 percent. 4 The odds
are 95 in 100 that the estimated percentages
reported lie within a range—the confidence interval—equal to the reported percentages plus or
minus the sampling error. For example, for estimates based on the entire 1986 survey sample,
the 95 percent confidence interval for an estimated value of 20 percent is approximately 18.6 to
21.4 percent.
Second, because undoubtedly some respondents misunderstood the questions, lacked interest in the survey, or falsified responses, the
survey estimates are subject to reporting errors.
Such errors likely arose also because interviewers misinterpreted responses or asked questions
in an inconsistent manner. For these surveys,
training interviewers carefully and motivating
4. For the approximate sampling errors associated with
other sample sizes and reported percentages from a survey,
assuming a confidence interval of 95 percent, see Katona,
Mandell, and Schmeideskamp, 1970 Survey, table 14-2,
p. 251. This source also provides a table of approximate
sampling errors for differences in percentages.
respondents to report accurately helped to minimize response errors. The data were also carefully checked for inconsistencies in coding and
editing to eliminate such errors to the extent
feasible.
Third, because some families selected for participation in the survey could not be interviewed,
the survey estimates are subject to nonresponse
errors. If nonresponse arose randomly in the
sample, it should have caused no bias in estimates of population statistics. Making such a
judgment is difficult in large multipurpose surveys such as the Survey of Consumer Finances.
One can, however, partially correct for nonresponse errors by observing how the sample interviewed differs from the population in the distribution of certain characteristics as a result of
both sampling and nonresponse errors. To the
degree that these deviations result from systematic tendencies in the population, the sampling
weights used in all calculations in this article
compensate for biases in sampling and nonresponse.
Finally, observations with missing values for
some of the variables are another source of error
in the survey estimates, similar to that arising
from failure to secure an interview. Statistical
methods were used to estimate missing values
based on other information reported by respondents. All missing values were imputed in the
data used to prepare this article. 5
Sampling
Weights
The final samples in the 1983 and 1986 Surveys of
Consumer Finances differ from a purely random
sample of U.S. households in two principal
ways. First, the surveys were designed to sample
wealthy households at a higher rate than the rest
of the population. Second, sampling errors in the
1983 sample and nonresponse during the first or
second interview could have caused the final
samples to differ from the population. One means
5. See Graham Kalton, Compensating for Missing Survey
Data (Institute for Social Research, 1983), for a discussion of
the benefits of imputation. See Avery, Elliehausen, and
Kennickell, "Measuring Wealth," for a discussion of missing
values and imputation in the 1983 Survey of Consumer
Finances.
Changes in Consumer Installment Debt
of making formal correction for deviations of the
final sample from the population was to use
sampling weights in the calculation of the statistics. 6
The Weight for the 1983 survey is a revised
version of the weight used in the article on the
1983 Survey of Consumer Finances in the March
1 9 8 6 issue of the F E D E R A L R E S E R V E B U L L E T I N . 7
The revised weight was designed to provide a
better mesh of the area probability and highincome samples. Weights were adjusted so that
the weighted number of high-income families
was the same as an estimate obtained from the
Internal Revenue Service tax file model for
1982.8
Weights for the 1986 survey were designed to
compensate for the possibility that respondents
to a 1983 survey who could be reached three
years later might not be fully representative of
the 1986 population. This situation might occur
both because attrition is not random, as suggested by the large differences in response rates for
the demographic groups in table A.l, and because the distribution of families changes as a
result of aging, marriage, divorce, and immigration. The initial 1986 weight was computed by
adjusting the 1983 weight for sample attrition
(measured separately for a number of sample
subgroups). This weight was further adjusted to
bring estimated population totals for various
groups defined by age and marital status into line
with estimates obtained from the March 1986
Current Population Survey. 9
6. See D.G. Horwitz and D.J. Thompson, "A Generalization of Sampling without Replacement from a Finite Universe," Journal of the American Statistical Association, vol.
48 (December 1952), pp. 396-404.
7. Robert B. Avery and Gregory E. Elliehausen, "Financial Characteristics of High-Income Families," FEDERAL
RESERVE B U L L E T I N , vol. 72 (March 1986), pp. 163-77.
8. For technical details, see Robert B. Avery, Gregory E.
Elliehausen, and Arthur B. Kennickell, "Reconciling Flowof-Funds and Survey-Based Measures of Household Wealth"
(paper presented at the annual meeting of the American
Statistical Association, San Francisco, August 18, 1987).
9. Not all bias in the 1986 sample can be fully corrected by
weights. For example, some of the respondents to the 1983
survey—such as divorced people who lived with their parents—would not have been selected as respondents in a 1986
cross-section survey because they were no longer family
heads or spouses of family heads. Thus the weighted 1986
sample slightly distorts homeownership and other age-related
variables. Most of the other distortions are believed to be
minor.
Preparation
of Debt
20
Variables
Respondents to the 1983 survey were asked to
report the purpose, the amount borrowed, the
origination date, the interest rate, the size and
frequency of payment, and the scheduled number of payments for each consumer loan and
mortgage. These data were sufficient to compute
the family's debt outstanding at the time of the
interview, as well as its scheduled payments.
Also, respondents were asked to report financed
balances on all lines of credit; on loans without
scheduled payments; and on credit cards after
they had made their previous payments.
In 1986, respondents were asked similar questions about their mortgages and financed balances on credit cards; but, because of time
constraints, they were asked to report only the
size and frequency of payments for regularpayment consumer loans. Therefore, the precise
amount outstanding could be computed only for
mortgages, credit cards, and loans without regular payments. Total outstanding 1986 balances on
installment loans were estimated for each family
using ratios based on typical terms prevailing
during 1983-86 and the reported debt payments.
These are rough estimates, however, and were
used only to estimate the collateralization of
consumer debt by home equity and financial
assets reported in text tables 6 and 14.
The figures for monthly payments reported in
this article include only scheduled payments on
certain loans and 5 percent of the reported unpaid credit card balances, which is the typical
minimum monthly payment required for a credit
card account with no new charges. All mortgage,
property, and business loans were excluded.
Loans without regularly scheduled payments and
payments on open-ended lines of credit also were
excluded. The payment variable is an estimate of
the monthly payment obligation and may not
reflect the actual payments made by families.
Loan payments were constructed in this manner to correspond as closely as possible to payments that would be made on aggregate consumer installment debt. Nevertheless, loan estimates
from the survey are still likely to differ from
aggregate totals because of unavoidable accounting differences. For example, aggregate consumer debt totals cover all credit card debt, includ-
778
Federal Reserve Bulletin • October 1987
ing current charges and financed balances.
Aggregate debt totals reported by many finance
companies include prepaid interest payments
and thus overstate the amount outstanding. Personal borrowing for business purposes is included in the aggregate consumer credit statistics,
but it is excluded from survey estimates. Reconciliation of these factors can align survey and
aggregate estimates more closely than may appear possible at first glance. 10 Caution should
nevertheless be used in drawing exact comparisons.
10. Avery, Elliehausen, and Kennickell, "Reconciling
Flow-of-Funds and Survey-Based Measures."
779
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report, covering the period May
through July 1987, provides information on Treasury and System foreign exchange operations. It
was prepared by Sam Y. Cross, Manager of
Foreign Operations of the System Open Market
Account and Executive Vice President in charge
of the Foreign Group of the Federal Reserve
Bank of New York.'
Early in May, the dollar moved down against
major foreign currencies, continuing a trend that
had prevailed throughout the year. But during
the rest of the three-month period ending in July,
the dollar first stabilized and then advanced
modestly to close up 6V2 percent against the
Japanese yen and roughly 4 percent against the
German- mark and other European currencies.
The U.S. authorities intervened in the market
during three episodes in the period.
As the May-July period opened, many market
participants were not yet convinced that the
authorities of the major industrialized countries
were committed to exchange rate stability. To be
sure, statements by both U.S. and Japanese
officials during preceding weeks had been interpreted as indicating a genuine concern about the
effects of further sharp downward movements in
dollar rates and a willingness to cooperate closely to foster exchange rate stability. Nevertheless,
traders were disappointed that, after the dollar's
2'/2-year decline, progress in diminishing the
world's external imbalances was so slow. They
were mindful of the intense political pressure in
the United States over trade issues and wary that
there might be new calls for a lower dollar. They
were concerned that any further exchange rate
decline might add to domestic inflation. They
1. T h e charts f o r the report are available o n request f r o m
Publications S e r v i c e s , Board of G o v e r n o r s of the Federal
R e s e r v e S y s t e m , W a s h i n g t o n , D . C . 20551.
noted, as well, that a decline in U.S. final domestic demand was reported in the first quarter data
on gross national product. Consequently, many
market participants remained skeptical that the
authorities would attach a high enough priority to
exchange rate stability to alter domestic economic policies if necessary.
Thus, traders retained their bearish attitude
toward the dollar, even though they were aware
that the authorities of the Group of Seven (G-7)
industrial nations had intervened to purchase
dollars in substantial amounts since late March.
There was skepticism that private investors,
already experiencing substantial exchange rate
losses on their dollar portfolios, would continue
to place funds in the United States. Although
long-term interest rate differentials favoring dollar assets were at their highest levels since the
dollar was at its peak in 1985, market participants
questioned whether this interest rate advantage
would prove sufficient to induce heavy participation by Japanese and other investors in the U.S.
1. F e d e r a l R e s e r v e r e c i p r o c a l c u r r e n c y a r r a n g e m e n t s
Millions of dollars
Institution
Amount of
facility,
July 31, 1987
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
250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
700
500
250
300
4,000
Bank for International
Settlements
Dollars against Swiss francs
Dollars against other authorized European
currencies
Total
600
1,250
30,100
780
Federal Reserve Bulletin • October 1987
Treasury's refunding operation early in May.
The dollar therefore continued to decline during
the first week of May. It moved down to
DM1.7590, its lowest level against the mark in
nearly seven years. Against the yen, it eased
back to ¥137.95, not far above the 40-year low
touched just weeks before.
In these circumstances, the U.S. authorities
entered the market in early May, in keeping with
the February agreement in Paris and the Washington agreement in April to contain the intense
selling pressure on the dollar. On the first two
business days of May, the Trading Desk at the
Federal Reserve Bank of New York purchased
$140 million against marks and $20 million
against yen in the first intervention episode of the
period under review.
Meanwhile, market participants had taken
note of comments made by Chairman Volcker
and by Japanese Prime Minister Nakasone in late
April, indicating that the central banks of the two
countries were willing to adjust their monetary
policies in a way that would lend support to the
dollar. Mr. Nakasone announced that the Bank
of Japan would act to ease short-term interest
rates. Mr. Volcker stated that the Federal Reserve had "snugged u p " monetary policy in light
of the exchange rate pressure. Short-term interest rate differentials had already widened in favor
of the dollar even before these comments, as
U.S. market rates responded to growing inflation
concerns. But when U.S. interest rates continued to firm and these differentials continued to
expand in May, market participants came increasingly to see the industrialized countries as
committed to exchange rate stability.
At the same time, some of the worst fears in
the markets proved to be unfounded. It soon
became clear that Japanese institutions had, in
fact, made sizable bond purchases at the May
Treasury refunding. Reports that the U.S. unemployment rate had fallen to 6.3 percent in April
and that producer prices had increased sharply
by 0.7 percent for the same month were seen as
giving the U.S. monetary authorities both more
room and a greater need to tighten policy. Meanwhile, officials in Japan indicated that they were
willing to guide money market rates lower. Also,
the Bundesbank lowered the minimum rate on its
repurchase agreements and reduced the lower
limit for money market rates by cutting the rate
at which it stood ready to sell three-day Treasury
bills. These actions were interpreted by the markets as indicating that the German authorities
were willing to join the Japanese and U.S. central banks in adjusting monetary policies to foster
exchange rate stability.
Other developments also helped to reduce
selling pressures against the dollar. After Japanese authorities urged financial institutions in
Japan to refrain from speculative dollar sales and
required these institutions to report their foreign
exchange positions much more frequently, traders in Tokyo became reluctant to make sizable
dollar sales. Later in May, the prospect for
greater economic policy convergence improved
when Japan's Parliament finally approved the
budget for the fiscal year ending March 1988,
paving the way for an extraordinary parliamentary session during the summer to draw up a
supplementary budget aimed at expanding domestic demand. Then, following reports of an
attack on a U.S. naval vessel in the Persian Gulf,
the dollar also began to derive some benefit from
the view that a disruption in oil supplies would be
relatively less detrimental to the United States
than to many other developed countries. In response to these developments, the dollar gradually moved up from its early May lows to trade at
DM1.7830 and at ¥140.40 on May 18.
The underlying market sentiment toward the
dollar remained cautious, however, and the dollar was still vulnerable to potentially adverse
news. In fact, two episodes did occur between
mid-May and early June that temporarily precipitated renewed bouts of selling pressure against
the dollar. The first occurred on May 19 when a
major U.S. money-center bank announced a
restructuring of its capital and loan-loss reserves
that would imply a substantial reported loss for
the second quarter. The second episode occurred
on June 2 following the announcement that Paul
Volcker would not serve a third term as Chairman of the Federal Reserve Board. In both
episodes the U.S. authorities intervened to blunt
the selling pressures. In the first, the Desk purchased a total of $133 million against the mark,
partly in New York and partly in Pacific markets
in coordination with the Bank of Japan. In the
second, the Desk purchased a total of $410
million against marks along with $103 million
against yen in New York and in the Far East.
Treasury and Federal Reserve Foreign Exchange Operations
This latter operation was undertaken in cooperation with the Bundesbank, the Bank of France,
the Bank of Italy, and the Bank of Japan. In both
episodes, the intervention operations helped reassure market participants, and the dollar
promptly moved up to levels higher than had
prevailed beforehand. Market participants began
to feel that the dollar was regaining notable
resiliency.
In mid-June, at the time of the Venice summit
meeting, the leaders of the G-7 industrial nations
reaffirmed the earlier Paris and Washington
agreements with respect to exchange rates.
Moreover, the communique announced a plan
for enhanced multilateral surveillance, including
more extensive use of medium-term economic
objectives and interim performance indicators.
The call for improved surveillance, though seen
by some observers as a sign that international
economic policy cooperation would increase in
the future, left market participants initially disappointed that no concrete initiatives to support the
dollar were forthcoming. But the dollar softened
only temporarily during the meeting, subsequently reversing the decline without intervention support.
By late June, traders were becoming increasingly impressed with the resilience that the dollar
had shown to adverse news in the preceding
weeks. In addition, the dollar began to benefit
from the release of several economic statistics
and other evidence suggesting a better-than-expected performance for the U.S. economy. During the course of the summer, anecdotal reports
of rising export volumes gave market participants a basis for seeing the external sector as a
growing source of demand. Preliminary estimates of the GNP data for the second quarter
released in mid-July, indicating that the change
in the level of net exports was positive for the
third consecutive quarter, seemed to confirm this
view. Under these circumstances, the market
showed only short-lived disappointment when,
in the middle of July, the U.S. trade figures
showed a modest widening in the deficit to $14.4
billion in May after having declined in March and
April. Indeed, this was yet another occasion
when selling pressure against the dollar was
quickly shaken off.
By contrast, market participants were becoming disappointed about the economic outlook for
781
many of the United States' trading partners.
Although there were some indications that the
Japanese economy was beginning to recover
from the depressing effects of the yen's earlier
rise, news in Germany that manufacturing orders
and retail sales had declined in May and that
unemployment remained high underscored market views about the underlying weakness of the
economy there. Even in the United Kingdom,
the European country with the most optimistic
outlook just a few months before, a series of
disappointing statistics tended to suggest that the
economy was beginning to overheat and raised
questions in the market about the near-term
outlook for sterling-denominated bonds and
stocks.
Against this background, market participants
began to buy back dollars previously sold. Reports of increased corporate demand ahead of
the quarter-end, buying by Japanese investors to
reduce hedges on U.S. investments, and renewed investor interest in U.S. securities circulated in the market. Meanwhile, rising tensions in
the Persian Gulf and talk of large dollar purchases from the Middle East tended to strengthen the dollar's role as a store of value and
currency of choice for flight capital at times of
political uncertainty.
Thus, the dollar moved up steadily for several
weeks after mid-June and then firmed within a
fairly narrow range for the rest of the period
under review. The more stable dollar, together
with the receding of inflationary fears following a
report of a slowdown in producer price inflation
for May, gave a lift to U.S. bond prices and led to
an easing of market interest rates generally. At
the same time, some of the bullish sentiment that
had prevailed in the Japanese and German bond
markets faded, so that interest rate differentials
favoring the dollar narrowed somewhat.
As the dollar firmed, market participants came
increasingly to expect the G-7 central banks to
intervene at some point to sell dollars in an effort
to restrain the dollar's rise. Traders assumed that
the U.S. authorities would try to retain the
favorable trade effects of the dollar's depreciation of the past two years and noted that the U.S.
authorities had sold dollars in early March at
around DM1.87 against the mark. They were also
aware that, with central bank money in Germany
growing more rapidly than targeted by the
782
Federal Reserve Bulletin • October 1987
2. Drawings and repayments by foreign central banks under special swap arrangement with the U.S. Treasury 1
Millions of dollars; drawings or repayments ( - )
Central bank drawing
on the U.S. Treasury
Amount of
facility
Outstanding,
May 1,
1987
May
June
July
Outstanding,
July 31,
1987
Central Bank of the Argentine Republic...
225.0
225.0
0
0
-225.0
( )
2
1. Data are on a value-date basis.
2. No facility
Bundesbank for the year, the German central
bank might try to absorb liquidity once the dollar
strengthened—either through domestic monetary operations or by selling dollars in the exchange market. As the rate approached DM1.87,
rumors circulated in the market at various times
that the Federal Reserve or the Bundesbank
were selling dollars. As long as some market
participants believed the central banks would
effectively contain any significant upward pressure against the dollar, there was little incentive
for them to build up speculative long positions in
the dollar.
Consequently, the dollar fluctuated generally
in a narrow range through the end of July. It
closed the three-month reporting period at
DM1.8600, up 53A percent against the mark, and
at ¥150.05, up S3A percent against the yen, from
its lows in early May. On a trade-weighted basis
in terms of the other G-10 currencies, as measured by the index developed by the staff of the
Federal Reserve Board, the dollar had risen
nearly 4 percent during the three-month period.
During the period, the U.S. authorities sold a
total of $806 million equivalent of foreign ex3. Net profits or losses (—) on U.S. Treasury and
Federal Reserve current foreign exchange
operations'
Millions of dollars
Period
May 1, 1987July 31, 1987
Valuation profits and
losses on outstanding
assets and liabilities
as of July 31, 1987
1. Data are on a value-date basis.
Federal
Reserve
U.S. Treasury
Exchange
Stabilization
Fund
103.2
109.7
1,580.2
1,422.8
change—$683 million equivalent of marks and
$123 million equivalent of yen. These operations
were financed equally from Federal Reserve and
U.S. Treasury balances.
On July 15, the Central Bank of the Argentine
Republic fully repaid a $500 million multilateral
short-term credit facility provided by the U.S.
Treasury through the Exchange Stabilization
Fund (ESF) and the central banks of several
other countries. As noted in the previous report,
the full amount was drawn on March 9. The
ESF's portion of the facility was $225 million.
In the period from May 1 through July 31, the
Federal Reserve and the ESF realized profits of
$103.2 million and $109.7 million respectively on
sales of foreign currency. As of July 31, cumulative bookkeeping or valuation gains on outstanding foreign currency balances were $1,580.2 million for the Federal Reserve and $1,422.8 million
for the Treasury's ESF. These valuation gains
represent the increase in the dollar value of
outstanding foreign currency assets valued at
end-of-period exchange rates, compared with the
rates prevailing at the time the currencies were
acquired.
The Federal Reserve and the ESF regularly
invest foreign currency balances acquired in the
market as a result of their foreign exchange
operations in a variety of instruments that yield
market rates of return and that have a high
degree of quality and liquidity. A portion of the
Federal Reserve's invested balances—$953.6
million equivalent as of July 31, 1987—were held
in securities issued by foreign governments under the authority provided by the Monetary
Control Act of 1980. The Treasury also held
some of its invested balances—$2,537.2 million
equivalent as of the same date—in such securities.
783
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.
From time to time the results of studies that are
of general interest to the professions and to
others are summarized in the F E D E R A L R E S E R V E
BULLETIN.
The analyses and conclusions set forth are
those of the authors and do not necessarily
STUDY
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 B U L L E T I N
are available without charge. The list of Federal
Reserve Board publications at the back of each
B U L L E T I N includes a separate section
entitled
"Staff Studies" that lists the studies that are
currently available.
SUMMARY
THE EFFECTS ON CONSUMERS AND CREDITORS OF PROPOSED CEILINGS
ON CREDIT CARD INTEREST RATES
Glenn B. Canner and James T. Fergus—Staff, Board of Governors
Prepared as a staff study in the spring of 1987
Most interest rates have fallen substantially since
the early 1980s, but those on credit card debt
have changed relatively little. This disparity has
led to assertions that credit card rates are excessive in view of the decline in the funding costs of
card issuers. As a consequence, the Congress
considered legislation in 1986 that would have
imposed a nationwide rate ceiling on credit card
accounts.
This study focuses on issues raised by the
proposed federal limits on credit card interest
rates, including the likely effects of such restrictive rate ceilings on the availability of credit card
services to different groups of consumers. It also
explores the consequences, for consumers, of
possible creditor responses to rate ceilings such
as modifications of nonrate prices of card services, alterations in other terms on credit card
accounts, and the raising of prices on merchandise. Evidence for the staff study comes primari
ly from studies that have evaluated the effects on
consumers of interest rate restrictions at the
state level.
The study concludes that the imposition of
restrictive ceilings on credit card interest rates
may be associated with wide-ranging and largely
unpredictable effects on consumers. While card
holders who typically incur finance charges may
benefit initially from mandated reductions in the
rates they pay, these same consumers are likely
to be adversely affected by compensatory actions that card issuers could take either to reduce
costs or to bolster other sources of revenue.
Such actions are also likely to have an adverse
effect on other groups of consumers such as
credit card applicants, who may face more restrictive credit-screening standards.
Moreover, some adverse consequences of a
nationwide ceiling on credit card rates could be
felt even by those consumers who do not use
784
Federal Reserve Bulletin • October 1987
credit cards. For example, retailers might increase some merchandise prices—either to help
offset reduced finance-charge revenue on retailer
credit card plans or as a result of higher fees they
must pay to banks to process credit card charges.
Higher retail prices could mean that customers
who usually pay in cash—including lower-income families who cannot obtain credit cards—
would subsidize buyers who use credit card
services.
785
Industrial Production
als has generally accelerated in recent months,
whereas certain earlier sources of expansion—
construction supplies and defense equipment—
have shown little net gain so far in 1987. At 129.8
percent of the 1977 average, the total index in
July was almost 4 percent higher than it was a
year earlier.
In market groups, output of consumer goods
advanced 0.7 percent in July after an uneven
Released for publication August 14
Industrial production increased 0.8 percent in
July, after upward revised increases of 0.4 percent in June and 0.7 percent in May. Gains in
July were widespread among products and materials. The strength evident thus far in 1987 has
arisen from quite different sectors than the
growth in 1986. Output of equipment and materi-
Ratio scale, 1977 = 100
140
TOTAL INDEX
-
-
Products
120
Materials
100
i
80
MANUFACTURING
Durable
^
140
—
120
Nondurable
—
1
1
1
1
1
1
_
i
i
MATERIALS
Nondurable
1
1
1
-
Durable
•-
-
^
100
—
Energy
I
80
1
1
1
1
1
INTERMEDIATE PRODUCTS
Business supplies
240
Construction supplies
FINAL PRODUCTS
OIL AND GAS DRILLING
200
240
200
Defense and space
160
160
120
140
100
20
Consumer goods
100
80
80
60
1981
1983
1985
All series are seasonally adjusted. Latest figures: July.
1987
1981
1983
1985
1987
786
Federal Reserve Bulletin • October 1987
1977 = 100
Percentage change from preceding month
1987
1987
Group
July
June
Mar.
Apr.
May
June
July
Percentage
change,
July 1986
to July
1987
Major market groups
Total industrial production
128.8
129.8
.1
.1
.7
.4
.8
3.9
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment..
Defense and s p a c e . . .
Intermediate p r o d u c t s . .
Construction supplies
Materials
137.2
135.8
127.9
119.2
131.1
142.5
185.9
141.9
127.6
117.3
138.2
136.9
128.8
119.9
132.0
143.7
186.3
142.7
128.3
118.2
.1
.0
.0
-1.0
.3
.0
.0
.5
.1
.1
-.4
-.4
-.7
-2.6
.0
.0
-.3
-.4
-.9
.8
1.0
.8
.9
1.7
.7
.8
.2
1.4
.7
.2
.1
.1
.1
-.7
.3
.4
-.3
.0
-.6
.7
.8
.8
.7
.6
.7
.9
.2
.6
.6
.8
3.8
3.7
2.9
3.1
2.8
4.2
3.7
3.9
3.5
4.1
.3
.2
.4
.9
.1
.8
.8
.9
1.1
.6
4.2
3.6
5.1
2.4
3.3
Major industry groups
134.7
132.0
138.4
99.4
113.3
133.6
130.9
137.2
98.4
112.7
Manufacturing.
Durable
Nondurable .
Mining
Utilities
2
1
4
3
1
.1
-.4
.7
.5
-.5
.5
.5
.6
.5
3.3
NOTE. Indexes are seasonally adjusted.
performance in recent months. Automotive production increased sharply, owing entirely to a
sizable increase in light truck production of
which a large portion is for consumer use. Auto
assemblies, however, were reduced during the
month to an annual rate of 6.7 million units from
a 6.9 million rate in June, and some further cuts
are anticipated. Production of goods for the
home fell back in July after having increased in
May and June. Output of this sector has retreated from very high levels at the end of 1986, yet
remains almost 5 percent higher than it was a
year earlier. Nondurable consumer goods in-
Total industrial production—Revisions
Estimates as shown last month and current estimates
Index (1977=100)
Month
April
May
June
July
Percentage change
from previous
months
Previous
Current
Previous
Current
127.3
128.0
128.2
127.4
128.3
128.8
129.8
.0
.5
.2
...
.1
.7
.4
.8
creased strongly in July, largely reflecting gains
in the output of clothing and food.
Output of business equipment was up 0.9
percent, as marked gains continued in construction and mining, manufacturing, and commercial
equipment. Output of defense and space equipment was up only slightly in July and has
changed little on balance thus far in 1987. Production of construction supplies increased 0.6
percent in July, but it, too, has been essentially
flat since the end of 1986.
Production of materials was up 0.8 percent in
July, bolstered by a sharp gain in durable materials such as metals, particularly steel, and equipment parts. Nondurable materials, such as textiles, paper, and chemicals, continued to show
output gains.
In industry groups, manufacturing production
rose 0.8 percent in July, with strong gains in both
durable and nondurable industries. Output of
mines posted a strong gain for the third consecutive month, reflecting renewed strength in metal
mining as well as increases in coal and oil and gas
extraction. Production by utilities also increased
in July.
787
Announcements
CHANGE IN THE DISCOUNT
RATE
The Federal Reserve Board approved on September 4, 1987, an increase in the discount rate
from 5Vi percent to 6 percent, effective immediately.
The decision reflects the intent of the Federal
Reserve to deal effectively and in a timely way
with potential inflationary pressures.
In taking the action, the Board voted on requests submitted by the Boards of Directors of
the Federal Reserve Banks of New York and
Cleveland. The Board subsequently approved
similar requests by the Federal Reserve Banks of
Philadelphia, Atlanta, Chicago, and Kansas City,
also effective on September 4; by the Federal
Reserve Bank of Richmond, effective September
5; by the Federal Reserve Bank of Minneapolis,
effective September 8; by the Federal Reserve
Banks of Boston, St. Louis, and San Francisco,
effective September 9; and by the Federal Reserve Bank of Dallas, effective September 11.
The discount rate is the interest rate that is
charged depository institutions when they borrow from their District Federal Reserve Banks.
AMENDMENTS TO REGULATION E
The Federal Reserve Board approved on August
13, 1987, amendments to Regulation E (Electronic Fund Transfers (EFT)) that eliminate the periodic statement requirement for providers of EFT
services that do not hold consumer accounts.
The amendments apply, for example, to retailers
that offer point-of-sale E F T services to consumers and clear the transactions through the automated clearinghouse system.
Elimination of the periodic statement requirement is subject to the following conditions:
• The debit card issued to consumers must
include an address or telephone number to be
used to contact the service provider.
• The information needed to identify the transaction in accordance with Regulation E, including the terminal location, must be sent to the
account-holding financial institution (AHFI).
• The time periods available to the consumer
for notice of errors and lost or stolen debit cards
must be extended, and certain additional disclosures must be provided.
The amendments also will require AHFIs to
include a description of these EFT transactions
on periodic statements provided to their customers. To facilitate compliance for AHFIs, disclosure of the terminal location will not be required
until July 1, 1990. Also, financial institutions
with assets of $25 million or less will not be
required to comply with any aspect of the regulation as to these EFT transactions (except to
cooperate with the service provider in the investigation of errors) until July 1, 1990.
AMENDMENT TO REGULATION
K
The Federal Reserve Board announced on August 12, 1987, that it has liberalized the provisions of Regulation K (International Banking
Operations) to permit certain investments abroad
by U.S. banking organizations through debt-forequity swaps.
The amendment is effective immediately.
However, the Board also has requested comments by September 30, 1987, as part of a
continuing review of regulations governing debtfor-equity investments.
The purpose of the amendment is to provide
additional flexibility for U.S. banking organizations to make investments in companies being
privatized in heavily indebted developing countries. The eligible countries would be developing
countries that have engaged in restructurings of
sovereign debt held by foreign creditors since
1980.
The amendment will permit a U.S. banking
788
Federal Reserve Bulletin • October 1987
organization to acquire as much as 100 percent of
the shares of a foreign nonfinancial company in
the following circumstances:
• The nonfinancial company must be in the
process of being transferred from public to private ownership.
• The country in which the company is located
must be a heavily indebted developing country.
• The shares must be acquired through a debtfor-equity swap.
• The shares must be held by the bank holding
company or its subsidiaries.
• The ownership interest must be divested
within five years from the date of acquisition,
unless the Board extends the time for good
cause, but in no event longer than a total of ten
years.
adopted Competitive Equality Banking Act of
1987. 1
The new law provides grandfather privileges to
nonbanking companies that on March 5 controlled a nonbank bank and required those companies to report to the Board on the bank's
activities. The report must be filed within 60 days
of the August 10 enactment date.
A number of companies qualifying under the
grandfather' provision have requested guidance
as to where the report should be filed and what it
should contain. The report should be filed with
the District Bank in the Federal Reserve District
where the nonbank bank is located; it should
indicate the date the company acquired the nonbank bank; and it should describe each of the
nonbank bank's activities.
PROPOSED ACTION
AMENDMENT TO REGULATION T
The Federal Reserve Board approved on August
24, 1987, an amendment to Regulation T (Credit
by Brokers and Dealers) that revises the definition of over-the-counter margin bonds to include
any "mortgage related security."
The principal effect of the amendment permits
a broker-dealer to give "good faith" loan value
in a margin account to any "mortgage related
security" that is privately placed.
A "mortgage related security" that has been
publicly offered generally was already eligible for
credit at a broker-dealer.
The amendment was effective August 27, 1987.
STATEMENT OF GUIDANCE FOR REPORTING
ACTIVITIES OF NONBANK BANKS
The Federal Reserve Board issued on August 21,
1987, a statement of guidance for companies that
control a nonbank bank and must report the
bank's activities to the Board under the newly
The Federal Reserve Board has approved a
proposed amendment to Regulation T (Credit by
Brokers and Dealers) to permit broker-dealers to
aid in the exercise of employee-owned stock
options. Comments on the proposed amendment
should be received by the Board by September
28, 1987.
SYSTEM MEMBERSHIP: ADMISSION OF
STATE BANKS
The following state banks were admitted to membership in the Federal Reserve System during the
period July 1 through July 31, 1987:
Florida
Mary Esther
Pennsylvania
Philadelphia
Emerald Coast State Bank
First Bank of Philadelphia
1. Copies of the statement are available on request from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
789
Record of Policy Actions of the
Federal Open Market Committee
MEETING HELD ON JULY
Domestic
Policy
7,1987
Directive
The information reviewed at this meeting suggested that economic activity expanded at a
moderate pace in the second quarter, as consumer expenditures grew at a relatively modest pace,
business capital spending experienced some recovery, and the trade deficit apparently continued to narrow in volume terms. Producer and
consumer prices slowed in May, after sizable
increases earlier in the year that reflected, to a
considerable extent, higher energy prices. Rising
import prices also contributed to higher consumer prices. Wage increases have remained relatively limited in recent months.
Payroll employment rose modestly further in
May and June, following substantial increases in
the first four months of the year, with the gains
again concentrated in the service-producing sector. Employment advances in the goods-producing sector were lackluster as manufacturing employment rose minimally. In June, the household
survey indicated a small drop in employment,
but the labor force fell noticeably. As a result,
the unemployment rate fell 0.2 percentage point
to 6.1 percent; most of the drop in employment
was attributed to fewer young people than normal entering the labor force as of the early June
survey week.
The index of industrial production rose 0.5
percent in May; and following upward revisions
to the three preceding months, the index was 2Vi
percent (annual rate) above the first-quarter average. The recent growth reflects in part the
increased production of business equipment, especially high-technology capital goods, and of a
wide variety of consumer goods. In the motor
vehicles sector, however, auto assemblies have
slowed in recent months due to relatively depressed sales and large dealer stocks.
Partly because of the lagging auto sales, consumer spending in real terms has been sluggish in
recent months, though above its first-quarter
pace. Outlays for services have continued to
advance steadily, but total auto sales dropped
back noticeably in May to the slow pace experienced in the first quarter. Excluding autos, outlays for durables have been flat on balance since
the end of 1986, while spending on nondurable
goods has edged down.
Housing activity has dropped back from its
elevated pace early this year. Total starts fell to
an annual rate of 1.62 million units in May.
Single-family starts were down appreciably, apparently reflecting the upturn in mortgage interest rates after March. Multifamily starts increased somewhat from an extremely low level
in April but remained below the first-quarter
average.
Business fixed investment has rebounded after
a tax-related decline at the beginning of the year.
Shipments of nondefense capital goods were
about flat in April and May but on average were
above the first-quarter level. Outlays for nonresidential structures turned up in May, with the
gains fairly widespread; and petroleum-drilling
activity has continued to recover. In addition,
new orders for nondefense capital goods, excluding aircraft, picked up in the spring and new
commitments for nonresidential construction
have moved up slightly.
Inventory investment apparently slowed in the
second quarter from its its rapid first-quarter
pace. Production cutbacks trimmed auto inventories, but the level of dealer stocks still was
relatively high. Outside of autos, inventory
changes have been relatively small in recent
months and inventory-sales ratios have remained low.
The U.S. merchandise trade deficit in nominal
terms was about unchanged in the first quarter
from its value in the final quarter of 1986. Prelim-
790
Federal Reserve Bulletin • October 1987
inary data suggest that the deficit declined in
April as exports rose and imports fell from their
first-quarter rate. Economic activity has remained sluggish in most major foreign industrial
nations so far this year. Real GNP and industrial
production declined sharply in Germany in the
first quarter, although industrial production
picked up in April and May. Japan has shown the
reverse pattern with declines in industrial production registered in both April and May.
Inflation rates slowed in May. The consumer
price index (CPI) rose 0.3 percent, after more
rapid increases earlier this year. Increases in
retail energy prices, which had boosted prices
during the first quarter, were smaller in April and
May and accounted for much of the slower rise in
consumer prices. However, the price of crude oil
has advanced further since mid-April, which
suggests upward pressure on retail energy prices
in the period ahead. Excluding food and energy,
the CPI has risen about 1 percentage point faster
so far this year than in 1986 partly because of
more rapid increases in consumer goods that
have high import proportions. Wage inflation, in
contrast, has remained relatively low for the year
to date.
At its meeting on May 19, the Committee
adopted a directive that called for increasing
somewhat the degree of reserve pressure from
that sought in the weeks just before the meeting,
taking into account the possibility of a change in
the discount rate. The members agreed that
somewhat greater reserve restraint would, or
somewhat lesser reserve restraint might, be acceptable depending on developments relating to
inflation and the dollar in foreign exchange markets, as well as the behavior of the monetary
aggregates and the strength of the business expansion. M2 and M3 were expected to grow at
annual rates of around 6 percent or less from
March through June, while growth in Ml was
expected to be well below its pace in 1986. The
intermeeting range for federal funds was left
unchanged at 4 to 8 percent.
Adjustment plus seasonal borrowing at the
discount window averaged $580 million for the
three complete maintenance periods since the
May meeting, close to its average level around
the time of that meeting. Borrowing during the
first full maintenance period after the May meeting was heavy, particularly over the long Memo
rial Day weekend when an imminent increase in
the discount rate was expected by market participants. Total reserves decreased at an annual rate
of about 2 percent between April and June,
reflecting a falloff in required reserves associated
with a net contraction in Ml.
M2 grew only a little on balance in May and
June, bringing its growth rate for the March to
June period to 23A percent, and its Ml component declined over the two months. While some
of the weakness in May reflected the unwinding
of the previous tax-related buildup, more generally these aggregates appear to have been substantially affected by the increase in market
interest rates among other factors this year.
Expansion in M3 was better maintained as banks
and thrift institutions continued to fund a moderate pace of credit extension, and for the March to
June period this aggregate increased at an annual
rate of 5Vi percent. The growth of M2 in 1987
through June left this aggregate below the lower
end of the growth " c o n e " representing the Committee's 5Vi to SVz percent range for the year, and
growth of M3 around the lower end of its 5Vi to
8V2 percent growth cone.
Early in the intermeeting period interest rates
remained near the higher levels reached in the
weeks before the May meeting, as markets continued to reflect concerns about the course of
inflation and the dollar. However, rates subsequently declined in response to a sharp drop in
some commodity prices, a firmer dollar, and an
abatement of inflation fears. The federal funds
rate continued to average around 63/4 percent
during the intermeeting period, but other shortterm interest rates were down 10 to 55 basis
points on balance. Longer-term Treasury yields
were about 60 basis points lower and corporate
bond rates declined about half that much. The
commitment rate for fixed-rate mortgages fell
slightly since the May FOMC meeting, but still
was well above the low established earlier in the
year. Stock price indexes increased strongly
over most of the period to record levels.
The dollar strengthened somewhat during the
intermeeting period, boosted in part by the announcement of an economic stimulus package in
Japan as well as better than expected economic
and price news for the United States. On balance, the weighted-average foreign exchange
value of the dollar against other G-10 currencies
Record of Policy Actions of the FOMC
moved up by about 33A percent since the May
meeting, including increases of nearly VA percent against the yen and 33A percent against the
mark. Over the same period, bond rates rose
substantially in Germany and Japan, and with
U.S. long-term rates declining somewhat, the
rate differentials narrowed.
The staff projections suggested that real GNP
would grow at a moderate rate through the end of
1987 and perhaps slow slightly from this pace in
1988. Improvement in the external sector was
expected to be a major factor contributing to
growth in overall output. Growth in domestic
demand was anticipated to be sluggish over the
forecast horizon. In particular, the rise in import
prices associated with the fall in the dollar was
expected to hold down real income gains
and thus consumer expenditures. Construction
spending was anticipated to be damped by high
vacancy rates for office structures and rental
housing and recent increases in mortgage rates,
while the expansion of government expenditures
would likely be held down by budgetary limitations. Business equipment spending, however,
should rise moderately in coming quarters, reflecting continued modernization efforts and expanding domestic production. Inflation rates
were forecast to edge down over the second half
of this year but then to move up again in 1988,
primarily due to increases in nonpetroleum import prices. Moreover, with the civilian unemployment rate projected to remain close to 6lA
percent, labor market slack would have a reduced influence in damping inflationary pressures.
In the Committee's discussion of the economic
situation and outlook, the members generally
agreed that business activity was likely to expand at a moderate pace over the balance of the
year. Greater uncertainty surrounded the outlook for 1988, but most of the members felt that
further moderate growth also was a reasonable
expectation for next year. In general, the members anticipated relatively sluggish expansion in
domestic demands over the projection horizon,
and as at earlier meetings they believed that
sustained growth in overall activity would depend to an important extent on the achievement
of significant improvement in the nation's balance of trade. Most of the members anticipated a
marginally higher rate of price increase in 1988.
791
In keeping with the usual practice at meetings
when the Committee considers its long-run objectives for monetary growth, the members of
the Committee and the Federal Reserve Bank
presidents not currently serving as members
presented specific projections of economic
growth, the rate of unemployment, and changes
in the overall price level. With regard to the rate
of expansion in real GNP, the projections had a
central tendency of 2Vi to 3 percent for 1987 as a
whole and the same central tendency for 1988,
though with a slightly wider range of individual
forecasts for next year. Projections of growth in
nominal GNP centered on ranges of 6XA to 7
percent for 1987 and 53A to 7 percent for 1988.
The rate of unemployment was not expected to
deviate significantly from current levels; the central tendency of the forecasts was 6.2 to 6.4
percent for the fourth quarter of 1987 and 6.0 to
6.5 percent for the fourth quarter of 1988. With
respect to the rate of inflation, as indexed by the
GNP deflator, the projections centered on rates
of 33A percent for 1987 and 4 percent for 1988. In
making these forecasts, the members took account of the Committee's objectives for monetary growth established at this meeting. The
members also assumed that fluctuations in the
exchange value of the dollar would not be of
sufficient magnitude to affect the projections
significantly.
While the central tendency of the members'
forecasts suggested some moderation in the rate
of expansion from the pace currently indicated
for the first half of this year, business activity
was thought likely to be better balanced in that a
number of previously depressed industries, notably in manufacturing, would benefit from further
growth in net exports. Some members commented that relatively moderate expansion in line with
that forecast by most of the members would
represent a satisfactory economic performance
under foreseeable circumstances. In this view
appreciably faster growth would incur a considerable risk of increased inflationary pressures
and the resulting distortions would threaten the
sustainability of the expansion itself. Relatively
rapid growth in domestic demands, in particular,
would be inconsistent with needed external adjustment.
In the Committee's discussion of various factors bearing on the business outlook, some mem-
792
Federal Reserve Bulletin • October 1987
bers commented that the growth in consumer
demands seemed likely to be reasonably well
maintained, especially in the services area, based
on current trends and on prior cyclical experience. Others gave more weight to recent indications of softness in overall consumer spending
and, in the context of increased consumer debt
burdens and a relatively low saving rate, they
saw relatively weak growth as a more likely
prospect for the next several quarters. The members generally expected further improvement in
net exports as both importers and exporters
continued to adjust to a lower value of the dollar,
but the extent of such improvement remained
subject to considerable uncertainty. The possibility of relatively limited economic expansion in
key foreign industrial countries was again cited
as a negative factor. With regard to the federal
budget deficit, the members emphasized that
further reductions were essential to assure satisfactory economic performance over time. The
outlook for continuing progress in lowering the
deficit was uncertain, but any reduction in the
deficit would tend to relieve pressures on financial markets, particularly in the context of diminished inflows of funds from abroad as the balance
of trade improved, and would enhance the ability
of the domestic economy to fund needed private
capital formation.
The members differed to some extent in their
assessments of the outlook for inflation, although
most expected higher import prices to contribute
to slightly greater price pressures in the period
through 1988. In one view, there was a considerable risk that rising import prices would have a
sizable impact on domestic pricing decisions as
well. That risk might be augmented by efforts to
raise wages in line with increasing inflation,
particularly with reduced levels of unemployment and possible pressures on capacity in some
industries experiencing strong export demand.
Other members commented, however, that most
industries were still operating appreciably below
capacity, including in many cases industries that
had been depressed earlier by the effects of the
dollar's appreciation; some members also noted
that most commodities remained in ample supply
on world markets. A key factor tending to limit
inflationary pressures was the continuing moderation in overall wage increases, but the members
recognized that a substantial upturn, if it were to
occur, would deal a major setback to the effort to
restore price stability. The members also observed that potential developments in world oil
prices were a major uncertainty in the inflation
outlook.
At this meeting the Committee reviewed its
ranges for growth of monetary and debt aggregates in 1987 and established tentative ranges for
1988 within the framework of the Full Employment and Balanced Growth Act of 1978 (the
Humphrey-Hawkins Act). 1 At its meeting on
February 10-11, 1987, the Committee had adopted growth ranges of 5l/z to 8V2 percent for both
M2 and M3 for the period from the fourth quarter
of 1986 to the fourth quarter of 1987. The associated range for growth in total domestic nonfinancial debt was set at 8 to 11 percent. The Committee had anticipated that growth in Ml would slow
in 1987 from its very rapid pace in 1986, but the
members had decided not to establish a numerical target for the year; instead, the appropriateness of Ml changes would be evaluated during
the year in the light of the behavior of Ml
velocity, developments in the economy and financial markets, and potential inflationary pressures.
In the course of the Committee's review of the
ranges for 1987, most of the members indicated a
preference for not changing the existing ranges
set in February, but some sentiment also was
expressed in favor of a slightly lower range for
M2. The members took account of the sharp
deceleration in the growth of the broader aggregates thus far in 1987, especially in M2. However, with the advance in business activity evidencing reasonable momentum and velocity showing
signs of increasing in the context of rising interest rates associated with a pickup in inflation and
a weaker dollar, the members viewed such a
development as acceptable.
According to a staff analysis prepared for this
meeting, the relatively weak growth in the monetary aggregates in the first half of the year
appeared to reflect a number of developments
whose impact might be greatly diminished over
1. The midyear Monetary Policy Report prepared pursuant
to this legislation was transmitted to the Congress on July 21,
1 9 8 7 , and was published in the F E D E R A L R E S E R V E B U L L E TIN, vol. 7 3 (August 1 9 8 7 ) , pp. 6 3 3 - 4 6 .
Record of Policy Actions of the FOMC
coming quarters. To some extent, special factors
related to the tax reform legislation may have
helped to depress the growth in M2, while
growth in M3 also was restrained by some unusual patterns in funding asset expansion at depository institutions. However, the available evidence suggested that a substantial portion of the
slowing in monetary growth could be attributed
to relatively slow adjustments in deposit interest
rates to rising market rates. Opportunity costs of
holding money balances had increased over the
spring after an extended period of declines. By
the time of the meeting, rates on many components of the broad aggregates had adjusted to the
higher market rates and the impact of wider
opportunity costs on overall M2 and M3 growth
appeared to be abating. The analysis concluded
that growth in M2 could be expected to pick up
over the balance of the year to a rate closer to the
expansion in nominal GNP, assuming steady
reserve conditions and market interest rates near
current levels, and for the year as a whole M2
might expand at a rate around the lower end of
the Committee's existing range. Growth in M3
also might strengthen somewhat over the balance
of the year, leaving this aggregate well within its
range.
In further discussion a number of members
took the view that the existing M2 range should
not be "fine tuned" at this time despite the
outlook for actual growth near the bottom of the
range for 1987 as a whole. The members recognized that in light of the weakness during the first
half of the year and the uncertainties that were
involved, growth in this aggregate might in fact
be somewhat below the lower end of the range
for 1987. The latter development, if it occurred,
would be acceptable provided it was associated
with some strengthening in M2 velocity and
satisfactory economic performance; in particular, a very limited pickup in M2 growth might be
appropriate should the dollar tend to weaken or
inflation concerns intensify. A number of members expressed concern that a reduction in the
M2 range at this point might be misread as an
indication of intended firming in monetary policy. On the other hand, several members observed that they would not endorse an easier
policy posture solely for the purpose of assuring
M2 growth within the Committee's existing
range without regard for ongoing economic and
793
financial developments, including the behavior
of the dollar in foreign exchange markets.
The members anticipated that growth in the
debt of nonfinancial sectors would remain well
within its monitoring range for the year, reflecting a marked reduction from the expansion in
other recent years. The reduced rate of expansion was in large measure the consequence of a
lower federal deficit and some slowing in state
and local government borrowing. However, with
growth in private debt remaining relatively
strong and that in federal debt still on the high
side, expansion in total nonfinancial debt appeared likely to continue to exceed that in nominal GNP and average close to its pace of recent
months over the balance of the year.
Turning to Ml, the members considered
whether or not a specific numerical range should
be reestablished for its growth over the balance
of this year or tentatively for 1988. The sharp
slowing of Ml growth thus far in 1987 following a
long period of rapid expansion, while appropriate
in the circumstances of the first half of the year,
provided further evidence that this aggregate had
become highly sensitive to movements in interest
rates and other factors. The members concluded
that the prospective behavior of Ml remained
subject to exceptional uncertainties, and no
member favored establishing a specific target
range at this time. However, the behavior of this
aggregate, evaluated in the light of other economic and financial developments, would be
taken into account in implementing policy over
the second half of the year. The Committee also
discussed MIA—a narrower measure of aggregate transactions accounts that includes demand
deposits plus currency in circulation but excludes other checkable deposits from Ml. The
members noted that the characteristics of this
aggregate probably also had changed in recent
years as households shifted transactions deposits
from demand to NOW accounts and more businesses adopted sophisticated techniques for
managing their cash balances. The velocity of
this aggregate had varied less than that of Ml,
but given the uncertainties in its relationship to
the economy and prices, the members saw no
advantage at this time in introducing MIA as a
formal guide to policy.
At the conclusion of the Committee's review,
all of the members indicated that they favored, or
794
Federal Reserve Bulletin • October 1987
could accept, a proposal not to change the ranges
for growth in the broader aggregates or the
monitoring range for nonfinancial debt that had
been established in February for the year 1987.
Growth in both M2 and M3 around the lower
ends of their ranges might be acceptable depending on developments relating to their velocities
and attendant economic and financial conditions,
notably the strength of inflationary pressures.
No numerical range would be established for Ml
growth in 1987, or tentatively for 1988, but Ml
developments, weighed in the context of emerging economic and financial conditions, would be
taken into account in reaching operational decisions over the balance of 1987, and the desirability of a numerical range for 1988 would be
reassessed early next year in the light of circumstances at that time.
Thereupon, the Committee approved the following paragraphs relating to its objectives for
the broader aggregates and nonfinancial debt in
1987 and the role of Ml:
The Committee agreed at this meeting to reaffirm
the ranges established in February for growth of 5V2 to
8V2 percent for both M2 and M3, measured from the
fourth quarter of 1986 to the fourth quarter of 1987.
The Committee agreed that growth in these aggregates
around the lower ends of their ranges may be appropriate in light of developments with respect to velocity
and signs of the potential for some strengthening in
underlying inflationary pressures, provided that economic activity is expanding at an acceptable pace. The
monitoring range for growth in total domestic nonfinancial debt set in February for the year was left
unchanged at 8 to 11 percent.
With respect to M l , the Committee recognized that,
based on experience, the behavior of that aggregate
must be judged in the light of other evidence relating to
economic activity and prices; fluctuations in Ml have
become much more sensitive in recent years to
changes in interest rates, among other factors. Because of this sensitivity, which has been reflected in a
sharp slowing of the decline in Ml velocity over the
first half of the year, the Committee again decided not
to establish a specific target for growth in Ml over the
remainder of 1987 and no tentative range has been set
for 1988. The appropriateness of changes in Ml this
year will continue to be evaluated in the light of the
behavior of its velocity, developments in the economy
and financial markets, and the nature of emerging
price pressures. The Committee welcomes substantially slower growth of Ml in 1987 than in 1986 in the
context of continuing economic expansion and some
evidence of greater inflationary pressures. The Committee in reaching operational decisions over the bal
ance of the year will take account of growth in Ml in
the light of circumstances then prevailing. The issues
involved with establishing a target for Ml will be
carefully reappraised at the beginning of 1988.
Votes for this action: Messrs. Volcker, Corrigan,
Angell, Boehne, Boykin, Heller, Johnson, Keehn,
Kelley, Ms. Seger, and Mr. Stern. Votes against
this action: None.
With regard to the tentative ranges for 1988, all
but one member of the Committee felt that some
reduction in the broader aggregates from their
1987 ranges would be consistent with the Committee's longer-run objective of fostering progress toward price stability while also encouraging
sustained expansion in business activity. A majority indicated a preference for reducing the M2
range by Vi percentage point. Of these, a number
commented that, should economic and financial
conditions warrant, they would be prepared to
support a further reduction of V2 percentage point
when the tentative ranges were reviewed in
February 1988. Some sentiment was expressed
for lowering the M2 range by a full percentage
point at this time on the ground that such a
reduction appeared fully consistent with satisfactory economic growth and with the reduced rate
of inflation that was anticipated and desired over
the longer run; in this view a smaller reduction
might not appear sufficiently decisive with respect to restraining inflation. However, one
member expressed concern that a reduction of
more than Vi percentage point would establish a
lower limit that might not be consistent with
adequate economic growth, at least insofar as
could be foreseen at this time. In light of the
uncertainties that were involved some members
also indicated that they could support a proposal
to widen the tentative range for M2 in the expectation that it might be narrowed later. Others
objected to a wider range on the ground that,
because of the Committee's focus on the broader
aggregates, such a range might be viewed as
weakening the importance of the Committee's
monetary targets.
At the conclusion of the Committee's discussion, all but one of the members indicated that
they could accept a reduction of V2 percentage
point in the tentative ranges for M2 and M3 and
in the monitoring range for nonfinancial debt in
1988. It was understood that all these ranges
Record of Policy Actions of the FOMC
were provisional and that they, along with the
possibility of establishing a numerical range for
M l , would be reviewed in early 1988 in the light
of intervening developments.
The following paragraph relating to the ranges
for 1988 was approved for inclusion in the domestic policy directive:
For 1988, the Committee agreed on tentative ranges
of monetary grow th, measured from the fourth quarter
of 1987 to the fourth quarter of 1988, of 5 to 8 percent
for both M2 and M3. The Committee provisionally set
the associated range for growth in total domestic
nonfinancial debt at IVi to IOV2 percent.
Votes for this action: Messrs. Volcker, Corrigan,
Angell, Boehne, Boykin, Heller, Johnson, Keehn,
Kelley, and Stern. Vote against this action: Ms.
Seger.
Ms. Seger dissented because she did not want
to reduce at this time the tentative M2 and M3
ranges for 1988 below those established for this
year. In her view the performance of key sectors
of the domestic economy implied a relatively
weak business expansion, and she did not anticipate enough offsetting support from gains in
foreign trade. In the circumstances, inflationary
pressures seemed likely to remain subdued, and
she concluded that a policy consistent with monetary growth within this year's ranges would
probably be needed to sustain the expansion in
1988. She recognized that the economic outlook
was surrounded by a great deal of uncertainty,
and she would be prepared to lower the M2 and
M3 ranges early next year if intervening developments seemed to warrant such a reduction.
In the Committee's discussion of policy implementation for the weeks immediately ahead, all
of the members indicated that they were in favor
of continuing to direct open market operations
toward maintaining the existing degree of reserve
availability. Recent financial developments, including indications of some easing in inflationary
sentiment and the emergence of a more stable
dollar in foreign exchange markets, along with
evidence of continued moderate expansion in
business activity did not point to the need for any
change in reserve conditions at this time. The
outlook for monetary expansion also seemed
consistent with such a stance since unchanged
reserve conditions and relatively stable market
rates were thought likely to be associated with
795
some strengthening in money growth over the
third quarter. Even so, the cumulative expansion
of M2 through September might still be somewhat below the Committee's target range for the
year; growth in M3 might move this aggregate
closer to the middle of the Committee's 1987
range by September. The outlook for growth in
Ml remained uncertain, but a relatively moderate rate of expansion in this aggregate over the
third quarter appeared consistent with stable
reserve conditions and the Committee's expectations for the broader aggregates.
Most members felt that there should be no
presumption about the likely direction of any
intermeeting adjustment in policy implementation. The market concerns about inflation and
downward pressures on the dollar that had argued for a relatively prompt firming of reserve
conditions at the time of the May meeting had
eased somewhat, and growth in the monetary
aggregates had been quite restrained in recent
months. One member felt that policy implementation should be especially alert to developments
that might call for some easing, given the risks in
this view that indicators of business activity
might prove to be weaker than expected and a
related belief that the risks of greater inflation
were limited. The members generally indicated
that attention should continue to be given to
developments bearing on the outlook for inflation and the performance of the dollar in foreign
exchange markets, but in keeping with the Committee's usual approach to policy implementation, any decision to alter reserve objectives
during the intermeeting period would take account of the behavior of the monetary aggregates
and the overall performance of the economy.
At the conclusion of the Committee's discussion, all of the members agreed on the desirability of a directive that called for no change in the
degree of pressure on reserve positions. Some
firming or some easing of reserve conditions
would be acceptable depending especially on
developments relating to inflation and the performance of the dollar in foreign exchange markets, while also taking account of the behavior of
the monetary aggregates and the strength of the
business expansion. This approach to policy
implementation was expected to be consistent
with growth of M2 and M3 at annual rates of
around 5 percent and IVi percent respectively,
796
Federal Reserve Bulletin • October 1987
over the three-month period from June to September. Over the same period, growth in Ml was
expected to resume after declining on balance in
May and June but to remain well below its pace
in 1986. Because the behavior of Ml was still
subject to unusual uncertainty and in keeping
with its decision regarding the longer-run target,
the Committee decided to continue its practice of
not specifying a numerical expectation for its
short-run growth. The members agreed that the
intermeeting range for the federal funds rate,
which provides a mechanism for initiating consultation of the Committee when its boundaries
are persistently exceeded, should be left unchanged at 4 to 8 percent.
At the conclusion of the meeting the following
domestic policy directive was issued to the Federal Reserve Bank of New York:
The information reviewed at this meeting suggests
on balance that economic activity expanded at a
moderate pace in the second quarter. In May and
June, total nonfarm payroll employment rose modestly
further, with most of the gains continuing to be in the
service-producing sectors. The civilian unemployment
rate fell to 6.1 percent in June and was down appreciably from its average level in the first quarter. Industrial
production increased substantially in May after rising
moderately on balance in earlier months of the year.
Consumer spending appears to have increased in the
second quarter, but housing starts were down somewhat further in May to a level considerably below their
first-quarter average. Recent indicators of business
capital spending point to some recovery, particularly
in equipment outlays, from a depressed level in the
first quarter. In April the merchandise trade deficit
was smaller than in March and below the monthly
average for the first quarter. The rise in consumer and
producer prices moderated in May but for the year to
date prices have risen more rapidly than in 1986,
primarily reflecting sizable increases in prices of energy and non-oil imports. Wage increases have remained
relatively moderate in recent months.
M2 increased slightly in May and June while growth
of M3 remained moderate. For 1987 through June,
expansion of M2 has been below the lower end of the
range established by the Committee for the year, and
growth of M3 around the lower end of its range.
Following a surge in April, Ml contracted on balance
in May and June. Expansion in total domestic nonfinancial debt has moderated this year.
Most interest rates have declined somewhat on
balance since the May 19 meeting of the Committee. In
foreign exchange markets, the trade-weighted value of
the dollar against the other G-10 currencies has risen
on balance since the May meeting.
The Federal Open Market Committee seeks mone
tary and financial conditions that will foster reasonable
price stability over time, promote growth in output on
a sustainable basis, and contribute to an improved
pattern of international transactions. In furtherance of
these objectives the Committee agreed at this meeting
to reaffirm the ranges established in February for
growth of 5V2 to 8V2 percent for both M2 and M3,
measured from the fourth quarter of 1986 to the fourth
quarter of 1987. The Committee agreed that growth in
these aggregates around the lower ends of their ranges
may be appropriate in light of developments with
respect to velocity and signs of the potential for some
strengthening in underlying inflationary pressures,
provided that economic activity is expanding at an
acceptable pace. The monitoring range for growth in
total domestic nonfinancial debt set in February for
the year was left unchanged at 8 to 11 percent.
For 1988, the Committee agreed on tentative ranges
of monetary growth, measured from the fourth quarter
of 1987 to the fourth quarter of 1988, of 5 to 8 percent
for both M2 and M3. The Committee provisionally set
the associated range for growth in total domestic
nonfinancial debt at IV2 to KM percent.
With respect to M l , the Committee recognized that,
based on experience, the behavior of that aggregate
must be judged in the light of other evidence relating to
economic activity and prices; fluctuations in Ml have
become much more sensitive in recent years to
changes in interest rates, among other factors. Because of this sensitivity, which has been reflected in a
sharp slowing of the decline in Ml velocity over the
first half of the year, the Committee again decided not
to establish a specific target for growth in Ml over the
remainder of 1987 and no tentative range has been set
for 1988. The appropriateness of changes in Ml this
year will continue to be evaluated in the light of the
behavior of its velocity, developments in the economy
and financial markets, and the nature of emerging
price pressures. The Committee welcomes substantially slower growth of Ml in 1987 than in 1986 in the
context of continuing economic expansion and some
evidence of greater inflationary pressures. The Committee in reaching operational decisions over the balance of the year will take account of growth in Ml in
the light of circumstances then prevailing. The issues
involved with establishing a target for Ml will be
carefully reappraised at the beginning of 1988.
In the implementation of policy for the immediate
future, the Committee seeks to maintain the existing
degree of pressure on reserve positions. Somewhat
greater reserve restraint or somewhat lesser reserve
restraint would be acceptable depending on indications of inflationary pressures and on developments in
the aggregates and the strength of the business expansion. This approach is expected to be consistent
with growth in M2 and M3 over the period from June
through September at annual rates of around 5 and l x h
percent, respectively. Growth in Ml, while picking up
from recent levels, is expected to remain well below its
pace during 1986. The Chairman may call for Committee consultation if it appears to the Manager for
Record of Policy Actions of the FOMC
Domestic Operations that reserve conditions during
the period before the next meeting are likely to be
associated with a federal funds rate persistently outside a range of 4 to 8 percent.
797
Votes for the short-run operational paragraph:
Messrs. Volcker, Corrigan, Angell, Boehne, Boykin, Heller, Johnson, Keehn, Kelley, Ms. Seger,
and Mr. Stern. Votes against this action: None.
799
Legal Developments
AMENDMENT
TO REGULATION
E
The Board of Governors is amending 12 C.F.R. Part
205, its Regulation E, by issuing a final rule amending
the requirements concerning electronic fund transfer
("EFT") services initiated by non-account-holding
financial institutions (at point of sale, for example) and
processed through the automated clearing house system for debiting to a customer's account. The amendments eliminate the periodic statement requirement
for persons that provide EFT services to consumers,
but do not hold consumer accounts, if they:
(1) issue a debit card to the consumer that includes
an address or telephone number to be used by the
consumer to contact the service provider;
(2) send information needed to identify the transaction in accordance with Regulation E to the accountholding financial institution; and
(3) extend the time periods available to the consumer for notice of errors and lost or stolen debit cards,
and give certain additional disclosures. The amendment also requires account-holding financial institutions to include a description of these EFT transactions on periodic statements provided to their
customers.
Effective November 15, 1987. However, disclosure
of the terminal location will not be required until July
1, 1990; and account-holding institutions with assets of
$25 million or less will not be required to comply
(except to cooperate with the service provider in the
investigation of errors) until July 1, 1990. The Board
amends 12 C.F.R. Part 205 as follows:
Part 205—Electronic Fund Transfers
1. The authority citation for Part 205 continues to read
as follows:
Authority:
1693b).
Pub. L. 95-630, 92 Stat. 3730 (15 U.S.C.
2. Section 205.14 is amended by revising paragraphs
(a)(2) and (b) as follows:
Section 205.14—Services Offered by Financial
Institutions Not Holding Consumer's Account
(a) Compliance
by service-providing
institution.
* **
(2) Sections 205.7, 205.8, and 205.9 shall require the
service-providing institution to provide those disclosures and documentation that are within its knowledge and the purview of its relationship with the
consumer. The service-providing institution need
not furnish a periodic statement to the consumer
under section 205.9(b), if the service-providing institution:
(i) Issues a debit card, to be used by the consumer
to initiate electronic fund transfers, that bears the
name of the service-providing institution and an
address or telephone number that can be used to
contact the service-providing institution;
(ii) Transmits the applicable transaction identification information specified by section 205.9(b)(1)
to the consumer's account-holding institution, in
the format prescribed by the automated clearing
house system used to clear the fund transfers;
(iii) Discloses to the consumer, in addition to the
information required by section 205.7, that the
service-providing institution (not the accountholding institution) is responsible for all electronic
fund transfers made with the debit card, and that
all inquiries and error notices related to such
transfers should be directed to the service-providing institution; that the service-providing institution will not issue a periodic statement, and that
the consumer should retain all terminal receipts to
verify transactions; and that the consumer must
notify the service-providing institution concerning
loss or theft of the debit card;
(iv) Provides on or with the receipts required by
section 205.9(a) the address and telephone number to be used for inquiries and error notices and
for reporting the loss or theft of the debit card;
and
(v) Extends the time period set forth in section
205.6(b)(1) for notice of loss or theft of a debit
card, from 2 business days to 4 business days after
the consumer learns of the loss or theft; and
800
Federal Reserve Bulletin • October 1987
extends the time periods set forth in sections
205.6(b)(2) and 205.11(b)(1) for reporting unauthorized transfers or alleged errors, from 60 days to
90 days following the transmittal of a periodic
statement.
jf:
*
jf;
sfc
(b) Compliance
by account-holding
institution.
An
account-holding institution described in paragraph (a)
of this section need not comply with the requirements
of the act and this regulation with respect to electronic
fund transfers to or from the consumer's account made
by the service-providing institution, except that the
account-holding institution shall:
(1) Comply with section 205.9 by providing a periodic statement and describing each transaction from
the service-providing institution that is debited or
credited to the consumer's account in accordance
with section 205.9(b); 13 but the account-holding institution has no liability for failure to provide this
information if the failure is due to its not having
received the necessary information from the service-providing institution in the prescribed format;
and
(2) Comply with section 205.11 by promptly providing to the service-providing institution, upon its
request, information or copies of documents required for the purpose of investigating alleged errors
or for furnishing copies of documents to the consumer; and by honoring debits to the account in
accordance with section 205.11(f)(2).
3. Appendix A is amended by revising the first sentence of the introductory language and by adding
section A ( l l ) as follows:
APPENDIX
A—Model Disclosure Clauses
This appendix contains model disclosure clauses for
optional use by financial institutions to facilitate compliance with the disclosure requirements of sections
205.5(a)(3), (b)(2), and (b)(3), 205.6(a)(3), 205.7, and
205.14(a)(2). * * *
*
*
*
*
*
13. Account-holding institutions shall not be required to furnish the
terminal location as part of the transaction description until July 1,
1990. In addition, account-holding institutions with assets of $25
million or less shall not be required to comply with section 205.9(b)
until July 1, 1990.
Section A(ll)—Disclosure From ServiceProviding Institution That Does Not Send
Periodic Statements (§ 205.14(a)(2))
A L L QUESTIONS A B O U T
TRANSACTIONS
MADE WITH Y O U R ( N A M E OF CARD) CARD
M U S T B E DIRECT TO U S ( N A M E OF SERVICE
PROVIDER), A N D N O T TO T H E B A N K OR OTHER F I N A N C I A L INSTITUTION W H E R E YOU
H A V E YOUR A C C O U N T . We are responsible for
the (name of service) service and for resolving any
errors in transactions made with your (name of card)
card.
We will not send you a periodic statement listing
transactions that you make using your (name of card)
card. The transactions will appear only on the statement issued by your bank or other financial institution.
S A V E THE RECEIPTS Y O U ARE GIVEN W H E N
YOU U S E Y O U R ( N A M E OF CARD) CARD, A N D
CHECK THEM A G A I N S T T H E
ACCOUNT
STATEMENT Y O U RECEIVE FROM YOUR
B A N K OR OTHER F I N A N C I A L INSTITUTION. If
you have any questions about one of these transactions, call or write us at (telephone number and
address) (the telephone number and address indicated
below).
IF YOUR (NAME OF CARD) CARD IS LOST OR
STOLEN, NOTIFY U S A T O N C E by calling or
writing to us at (telephone number and address).
AMENDMENT
TO REGULATION
K
The Board of Governors is amending 12 C.F.R. Part
211, its Regulation K, by issuing a final rule to permit
investors to acquire from foreign governments ownership of certain foreign companies engaged in nonfinancial activities in the context of exchanging debt obligations of the government for equity ownership interest
in the companies.
Effective immediately, the Board amends 12
C.F.R. Part 211 as follows:
Part 211—International
Banking
Operations
- 1. The authority citation for 12 C.F.R. Part 211 is
revised to read as follows:
Authority: 12 U . S . C . 221 et seq.; 12 U . S . C . 1841
et seq.; Pub. L. 95-369; 92 Stat. 607; 12 U . S . C . 3101
et seq.; Title II, Pub. L. 97-290, 96 Stat. 1235; Title IX,
Pub. L. 98-181, 97 Stat. 1153, 12 U.S.C. 3901 et seq.
2. Part 211 is amended by adding a new paragraph (f)
to section 211.5, as follows:
Legal Developments
Section 211.5—Investments and Activities
Abroad
(f) Investment made through debt-for-equity
conversions
(1) Permissible Investment. In addition to an investment that may be made under other provisions of
this section, a bank holding company may acquire
up to and including 100 percent of the shares of (or
other ownership interest in) a foreign company if:
(i) the shares are acquired from the government of
an eligible country or from its agencies or instrumentalities;
(ii) the shares are acquired by conversion of
sovereign debt obligations of the eligible country
either through a direct exchange of debt obligations or a payment for the debt in local currency,
the proceeds of which are used to purchase the
shares;
(iii) the shares are held by the bank holding
company or its subsidiaries, provided however
that such shares may not be held by a U.S.
insured bank or its subsidiaries;
(iv) the shares are divested within five years of
acquisition unless the Board extends such time
period for good cause shown but no such extensions may in the aggregate exceed five years; and
(v) an investment shall be made under this paragraph in accordance with the investment procedures of paragraph (c) of this section and shall be
subject to paragraph (b)(3)(i)(A) and (B) of this
section.
that are engaged in the same or related lines of
business as the company.
AMENDMENT
TO REGULATION
T
The Board of Governors is amending 12 C.F.R. Part
220, its Regulation T, by revising the definition of
"OTC margin bond." The amended definition will
include any "mortgage related security," a term defined in the Secondary Mortgage Market Enhancement Act of 1984 and in section 3(a)(41) of the Securities Exchange Act of 1934.
Effective August 27, 1987, the Board amends
12 C.F.R. Part 220 as follows:
Part 220—Credit by Brokers and Dealers
1. The authority citation for Part 220 continues to read
as follows:
Authority:
15 U . S . C . sections 78c, 78h, 78q, and 78w.
2. Part 220 is amended by removing the period and
adding "; or " at the end of paragraph (r)(2)(iii) and
adding a new paragraph (r)(3) as follows:
Section 220.2—Definitions
(r) "OTC margin bond" means:
(3) A "mortgage related security" as defined in
seciton 3(a)(41) of the Act.
(2) Definitions. For purposes of this paragraph:
(i) an "eligible country" means a country that,
since 1980, has restructured its sovereign debt
held by foreign creditors; and
(ii) "investment" shall have the meaning set forth
in section 211.2(i) of this part and, for purposes of
this paragraph, shall include loans or other extensions of credit by the bank holding company or its
affiliates to a company acquired pursuant to this
paragraph.
ORDERS ISSUED UNDER BANK
HOLDING
COMPANY ACT, BANK MERGER ACT, BANK
SERVICE CORPORATION ACT, AND FEDERAL
RESERVE ACT
(3) Conditions.
(i) Any company acquired pursuant to this paragraph shall not bear a name similar to the name of
the acquiring bank holding company or any of its
affiliates; and
(ii) Neither the bank holding company nor its
affiliates shall provide to any company acquired
pursuant to this paragraph any confidential business or other information concerning customers
Order Approving the Acquisition
Bank Holding
Company
801
Orders Issued Under Section 3 of the Bank
Holding Company Act
Baltimore Bancorp
Baltimore, Maryland
and Formation
of a
Baltimore Bancorp, Baltimore, Maryland ("Bancorp"), a bank holding company within the meaning of
the Bank Holding Company Act ("Act"), 12 U . S . C .
§ 1842 et seq., has applied pursuant to section 3(a)(3)
of the Act, 12 U . S . C . §1843(a)(3), to acquire Metropolitan Holding
Company,
Washington,
D.C.
802
Federal Reserve Bulletin • October 1987
("MHC"), and thereby indirectly to acquire MHC's
banking subsidiary, Metropolitan Bank of Bethesda,
Bethesda, Maryland ("Metro Bank"), the successor
by conversion to Metropolitan Federal Savings and
Loan Association of Bethesda, Bethesda, Maryland
("MFSL"). MHC has applied for the Board's approval pursuant to section 3(a)(1) of the Act to become a
bank holding company by acquiring Metro Bank; and
has applied pursuant to section 3(a)(3) of the Act to
acquire 16.7 percent of the Bank of Baltimore, Baltimore, Maryland.1
Notice of the applications, affording interested persons an opportunity to submit comments, has been
given in accordance with section 3(b) of the Act, 52
Federal Register 9,708 (1987). The time for filing
comments has expired, and the Board has considered
the applications and all comments received in light of
the factors set forth in section 3(c) of the Act.
Metro Bank is the commercial bank successor to
MFSL, a federally chartered savings and loan association, the accounts of which are insured by the Federal
Savings and Loan Insurance Corporation ("FSLIC").
MFSL has adopted a conversion plan by which it will
convert to a state-chartered savings and loan association and then will convert to Metro Bank, a statechartered commercial bank, the accounts of which
would be insured by the Federal Deposit Insurance
Corporation ("FDIC").
Because Metro Bank, at the time of acquisition by
Bancorp, will accept demand deposits and be engaged
in the business of making commercial loans, Metro
Bank would be a "bank" for purposes of the Act, and
Bancorp and MHC properly have applied to acquire
Metro Bank under section 3 of the Act, which governs
the acquisition of banks by bank holding companies.
Bancorp, with deposits of $1.9 billion, 2 is the seventh largest commercial banking organization in Maryland, controlling 6.7 percent of the total deposits in
commercial banking organizations in the state. Upon
the conversion of MFSL to Metro Bank, MHC will
control deposits of $426.9 million, representing 1.1
percent of the total deposits in commercial banking
organizations in the state. Upon consummation of this
proposal, Bancorp would become the sixth largest
commercial banking organization in Maryland and
control deposits of $2.3 billion, representing 7.8 per-
1. Upon consummation, Bancorp proposes to merge MHC into a
newly formed, wholly owned subsidiary of Bancorp and to merge
Metro Bank into its banking subsidiary, Bank of Baltimore. Thus,
after consummation, Metro Bank will no longer exist as a separate
banking organization and MHC will be a wholly owned subsidiary of
Bancorp, controlling 16.7 percent of the shares of the Bank of
Baltimore.
2. State deposit data are as of December 31, 1986.
cent of the total deposits in commercial banking organizations in the state. Consummation of this proposal
would not have any significant adverse effect upon the
concentration of banking resources in the state.
Bancorp competes directly with Metro Bank in
three banking markets: Annapolis, Frederick County
and Washington, D.C. 3 Bancorp and Metro Bank are
among the smaller banking organizations in each of
these markets, controlling together less than 5 percent
of deposits in commercial banks in each of the markets. 4 Moreover, consummation of the proposal would
increase concentration in the markets, as measured by
the Herfindahl-Hirschman Index ("HHI"), only
slightly. The HHI in each of the markets would
increase by fewer than 10 points. Based upon the
foregoing, the Board concludes that consummation of
the proposal would not have a substantial adverse
competitive effect in any relevant banking market.
In evaluating these applications, the Board has
considered the financial resources of Bancorp and the
effect on those resources of the proposed acquisition.
The Board has stated and continues to believe that
capital adequacy is an especially important factor in
the analysis of bank holding company proposals, particularly in transactions where a significant acquisition
is proposed. 5 In this regard, the Board has stated that
banking organizations experiencing substantial growth
internally and by acquisition, such as Applicant,
should maintain a strong capital position substantially
above the minimum levels specified in the Capital
Adequacy Guidelines without significant reliance on
intangibles, particularly goodwill. 6
Bancorp's existing tangible primary and total capital
ratios are well above the minimum levels specified in
the Board's Capital Adequacy Guidelines. 7 In order to
effect the proposed acquisition, Bancorp will incur a
substantial amount of goodwill upon consummation of
the proposed acquisition, although its tangible primary
capital ratio would still be above the minimum level
specified in the Board's Guidelines. Moreover, Bancorp has in connection with this application committed
3. The Annapolis banking market is defined as the Annapolis
Ranally Metro Area ("RMA"). The Frederick banking market is
defined as all of Frederick County, Maryland, except for the small
southeast portion included in the Washington, D.C. RMA banking
market. The Washington, D.C. banking market is defined as the
Washington, D.C. RMA.
4. All market banking data are as of June 30, 1985.
5. See e.g., Chase Manhattan Corporation, 70 FEDERAL RESERVE
BULLETIN
5 2 9 ( 1 9 8 4 ) ; NCNB
Corporation,
6 9 FEDERAL
RESERVE
BULLETIN 4 9 (1983).
6. National
City
Corporation,
70 FEDERAL RESERVE BULLETIN
743, 746 (1984).
7. Capital Adequacy
16,066-67
(1985)).
(April
24,
Guidelines,
1985) (71
50 Federal
Register
16,057,
F E D E R A L RESERVE B U L L E T I N
445
Legal Developments
to strengthen its tangible primary capital ratio following consummation of the proposal.
Based upon a review of all the facts of record, the
Board has determined that the financial and managerial resources of Bancorp and MHC are consistent with
approval. Considerations relating to the convenience
and needs of the communities to be served also are
consistent with approval of this application.
Metro Bank's nonbanking subsidiary, Metropolitan
Insurance Services, Inc., although currently inactive,
is authorized to engage in general insurance activities
that generally are impermissible for bank holding
companies. Accordingly, Bancorp has agreed that it
will cause Metropolitan Insurance Services, Inc. to
cease business prior to MHC becoming a bank holding
company.
The Board notes that this application involves the
acquisition of a bank that results from the conversion
of a non-failing, FSLIC-insured state savings bank.
The acquisition proposed here, however, does not fall
within the scope of the Board's policy and rulings
regarding acquisitions of thrift institutions under section 4 of the Act 8 or the provisions of the 1982 Garn-St
Germain Depository Institutions Act regarding acquisitions of thrift institutions. Upon its acquisition by
Bancorp, Metro Bank will accept demand deposits and
engage in commercial lending, and will be subject to all
the banking standards of the Act.
The Board expects that Bancorp will comply with all
state and federal requirements necessary for consummation of the acquisition, and the Board's approval of
this application under the Act is not intended to
preempt any such requirements. 9 The Board has previously stated that its approval of transactions under
section 3 of the Act does not relieve an applicant or the
bank involved of the responsibility to obtain approval
under other federal or state laws and regulations and
does not shield an applicant from the consequences of
violations of other laws. 1 0
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The transactions shall not
be consummated before the thirtieth calendar day
following the effective date of this Order, or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
8. D.H.
Baldwin
Company,
63 FEDERAL RESERVE BULLETIN 280
(1977).
9. The Board may not approve an application that would result in a
violation of federal or state law. Whitney National Bank v. Bank of
New
Orleans,
379 U . S . 411 (1964).
10. Hartford National Corporation (Order dated June 1, 1987);
Comerica
Inc.,
7 3 F E D E R A L RESERVE B U L L E T I N 5 9 9 ( 1 9 8 7 ) ;
SafraCorp, 7 3 F E D E R A L RESERVE B U L L E T I N 1 3 7 ( 1 9 8 7 ) ; The One
Bancorp,
7 3 F E D E R A L RESERVE B U L L E T I N 5 5 , 1 3 5 ( 1 9 8 7 ) .
803
Board or by the Federal Reserve Bank of Richmond
acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 3, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, and Kelley. Absent and not
voting: Chairman Volcker.
JAMES MCAFEE
[SEAL]
Associate
Secretary
of the
Board
Community First Minnesota Bankshares, Inc.
Fargo, North Dakota
Order Approving
Company
Formation
of a Bank
Holding
Community First Minnesota Bankshares, Inc., Fargo,
North Dakota, has applied for the Board's approval
under section 3(a)(1) of the Bank Holding Company
Act ("Act") (12 U . S . C . § 1842(a)(1)), to become a
bank holding company by acquiring the following
banks from First Bank System, Inc., Minneapolis,
Minnesota ("First Bank System"): First Bank Benson, National Association, Benson, Minnesota; First
Bank (N.A.)—Little Falls, Little Falls, Minnesota;
First Bank Southwest, National Association, Marshall, Minnesota; The First State Bank in Paynesville,
Paynesville, Minnesota; First Bank of Wheaton, National Association, Wheaton, Minnesota; and The
First National Bank in Windom, Windom, Minnesota
("Banks").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
published (52 Federal Register 17,334 (1987)). The
time for filing comments has expired, and the Board
has considered the application and all comments received 1 in light of the factors set forth in section 3(c) of
the Act (12 § U . S . C . § 1842(c)).
Applicant is a nonoperating corporation formed for
the purpose of acquiring Banks from First Bank Sys-
1. Comments were submitted by The Independent Insurance
Agents of America, The National Association of Casualty and Surety
Agents, The National Association of Life Underwriters, The National
Association of Professional Insurance Agents, and The National
Association of Surety Bond Producers (collectively the "Trade Associations"). The Trade Associations allege that a lease arrangement
between Banks and an independently owned and operated insurance
agency will cause Applicant to be engaged in insurance activities
prohibited by section 4(c)(8) of the Act. The Board has carefully
considered the comments submitted by the Trade Associations,
Applicant's response, and all the facts of record, and has concluded
that the proposed lease arrangement, as modified by Applicant, will
not cause Applicant to be engaged in impermissible insurance activities for purposes of the Act.
804
Federal Reserve Bulletin • October 1987
tem. Upon consummation of the proposal, Applicant
will control total deposits of approximately $199.3
million, representing less than one percent of total
deposits in commercial banking organizations in the
state, and would become the tenth largest commercial
banking organization in the state. 2 Based on all the
facts of record, the Board believes that consummation
of the proposal would have no significantly adverse
effect on the concentration of banking resources in
Minnesota.
The Board has considered the effects of the proposal
upon competition in the relevant banking markets. 3
Applicant does not currently operate any banking or
nonbanking subsidiary in any market in which Banks
operate. Moreover, upon consummation of the proposal, a significant number of competitors will remain
in each market in which the Banks operate. Based on
all the facts of record, the Board believes that consummation of the proposal would not result in any significantly adverse effect on existing or potential competition or increase the concentration of banking
resources in any relevant banking market. Thus, competitive factors are consistent with approval.
The financial and managerial resources of the Applicant and Banks are consistent with approval, especially in light of Applicant's plan to increase its consolidated capital position. Considerations relating to the
convenience and needs of the communities to be
served are also consistent with approval.
Based on the foregoing and other facts of record,
including certain commitments made by Applicant, the
Board has determined that the application should be
and hereby is approved. The acquisition should not be
consummated before the thirtieth calendar day following the effective date of this Order or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of Minneapolis, acting
pursuant to delegated authority.
2. Banking data are as of December 31, 1986.
3. Benson Bank operates in the Benson banking market, which is
approximated by part of Swift County, Minnesota.
Little Falls Bank operates in the Little Falls banking market, which
is approximated by Morrison County and part of Todd County, all in
Minnesota.
Marshall Bank operates in the Marshall banking market, which is
approximated by Lincoln and Lyon Counties, and parts of Murray,
Redwood, and Yellow Medicine Counties, all in Minnesota.
Paynesville Bank operates in the St. Cloud banking market, which
is approximated by Stearns and Benton Counties, and part of Sherburne County, all in Minnesota.
Wheaton Bank operates in the Watertown banking market, which is
approximated by Codington, Roberts, Grant, Clark, Hamlin, and
Deuel Counties, South Dakota; and Big Stone and Traverse Counties,
and parts of Lac Qui Parle County, Minnesota.
Windom Bank operates in the Worthington banking market, which
is approximated by Cottonwood, Jackson, and Nobles Counties, and
part of Murray County, all in Minnesota.
By order of the Board of Governors, effective
August 17, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Heller, and Kelley. Absent and not voting:
Governor Angell.
WILLIAM W . WILES
[SEAL]
Secretary
of the
Board
Community First North Dakota Bankshares,
Inc.
Fargo, North Dakota
Order Approving
Company
Formation
of a Bank
Holding
Community First North Dakota Bankshares, Inc.,
Fargo, North Dakota, has applied for the Board's
approval under section 3(a)(1) of the Bank Holding
Company Act ("Act") (12 U . S . C . § 1842(a)(1)), to
become a bank holding company by acquiring the
following banks from First Bank System, Inc., Minneapolis, Minnesota ("First Bank System"): The First
State Bank of Cooperstown, Cooperstown, North
Dakota; First National Bank in Lidgerwood, Lidgerwood, North Dakota; First Bank of North Dakota
(N.A.) Wahpeton, Wahpeton, North Dakota; and The
First National Bank and Trust Company of Dickinson,
Dickinson, North Dakota ("Banks").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
published (52 Federal Register 17,334 (1987)). The
time for filing comments has expired, and the Board
has considered the application and all comments received 1 in light of the factors set forth in section 3(c) of
the Act (12 U.S.C. § 1842(c)).
Applicant is a nonoperating corporation formed for
the purpose of acquiring Banks from First Bank System. Upon consummation of the proposal, Applicant
will control total deposits of approximately $140.8
million, representing 2.3 percent of total deposits in
1. Comments were submitted by The Independent Insurance
Agents of America, The National Association of Casualty and Surety
Agents, The National Association of Life Underwriters, The National
Association of Professional Insurance Agents, and The National
Association of Surety Bond Producers (collectively the "Trade Associations"). The Trade Associations allege that a lease arrangement
between Banks and an independently owned and operated insurance
agency will cause Applicant to be engaged in insurance activities
prohibited by section 4(c)(8) of the Act. The Board has carefully
considered the comments submitted by the Trade Associations,
Applicant's response, and all the facts of record, and has concluded
that the proposed lease arrangement, as modified by Applicant, will
not cause Applicant to be engaged in impermissible insurance activities for purposes of the Act.
Legal Developments
commercial banking organizations in the state, and
would become the sixth largest commercial banking
organization in the state. 2 Based on all the facts of
record, the Board believes that consummation of the
proposal would have no significantly adverse effect on
the concentration of banking resources in North Dakota.
The Board has considered the effects of the proposal
upon competition in the relevant banking markets. 3
Applicant does not currently operate any banking or
nonbanking subsidiary in any market in which Banks
operate. Moreover, upon consummation of the proposal, a significant number of competitors will remain
in each market in which the Banks operate. Based on
all the facts of record, the Board believes that consummation of the proposal would not result in any significantly adverse effect on existing or potential competition or increase the concentration of banking
resources in any relevant banking market. Thus, competitive factors are consistent with approval.
The financial and managerial resources of Applicant
and Banks are consistent with approval, especially in
light of Applicant's plan to increase its consolidated
capital position. Considerations relating to the convenience and needs of the communities to be served are
also consistent with approval.
Based on the foregoing and other facts of record,
including certain commitments made by Applicant, the
Board has determined that the application should be
and hereby is approved. The acquisition should not be
consummated before the thirtieth calendar day following the effective date of this Order or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of Minneapolis, acting
pursuant to delegated authority.
By order of the Board of Governors, effective
August 17, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Heller, and Kelley. Absent and not voting:
Governor Angell.
805
Community First South Dakota Bankshares,
Inc.
Fargo, North Dakota
Order Approving
Company
Formation
of a Bank
Holding
Community First South Dakota Bankshares, Inc.,
Fargo, North Dakota, has applied for the Board's
approval under section 3(a)(1) of the Bank Holding
Company Act ("Act") (12 U . S . C . § 1842(a)(1)), to
become a bank holding company by acquiring six de
novo state-chartered banks: Community First State
Bank of Hot Springs, Hot Springs, South Dakota;
Community First State Bank of Huron, Huron, South
Dakota; Community State Bank in Lemmon, Lemmon, South Dakota; Community First State Bank of
Platte, Platte, South Dakota; Community First State
Bank of Redfield, Redfield, South Dakota; and Community First State Bank of Vermillion, Vermillion,
South Dakota ("Banks"). These banks are being
formed to purchase the assets and assume the deposit
and other liabilities of nine branches of First Bank
South Dakota, N . A . , Sioux Falls, South Dakota, a
subsidiary of First Bank System, Inc., Minneapolis,
Minnesota ("First Bank System"), located in the
communities in which the Banks propose to operate.
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
published (52 Federal Register 17,334 (1987)). The
time for filing comments has expired, and the Board
has considered the application and all comments received 1 in light of the factors set forth in section 3(c) of
the Act (12 U . S . C . § 1842(c)).
Applicant is a nonoperating corporation formed for
the purpose of acquiring, through Banks, certain
branches of First Bank South Dakota, N . A . Upon
consummation of the proposal, Applicant will control
total deposits of approximately $388.0 million, representing 4.6 percent of total deposits in commercial
banking organizations in the state, and would become
WILLIAM W . WILES
[SEAL]
Secretary
of the Board
2. Banking data are as of December 31, 1986.
3. Cooperstown Bank operates in the Jamestown banking market,
which is approximated by Eddy, Foster, Stutsman, Barnes, and
LaMoure Counties and parts of Griggs and Dickey Counties, all in
North Dakota.
Dickinson Bank operates in the Dickinson banking market, which is
approximated by Dunn, Billings, Golden Valley, Slope, Stark, and
Hettinger Counties, all in North Dakota.
Lidgerwood Bank and Wahpeton Bank both operate in the Wahpeton-Breckenridge banking market, which is approximated by Sargeant
County and parts of Richland County in North Dakota, and part of
Wilken County, Minnesota.
1. Comments were submitted by The Independent Insurance
Agents of America, The National Association of Casualty and Surety
Agents, The National Association of Life Underwriters, The National
Association of Professional Insurance Agents, and The National
Association of Surety Bond Producers (collectively the "Trade Associations"). The Trade Associations allege that a lease arrangement
between Banks and an independently owned and operated insurance
agency will cause Applicant to be engaged in insurance activities
prohibited by section 4(c)(8) of the Act. The Board has carefully
considered the comments submitted by the Trade Associations,
Applicant's response, and all the facts of record, and has concluded
that the proposed lease arrangement, as modified by Applicant, will
not cause Applicant to be engaged in impermissible insurance activities for purposes of the Act.
806
Federal Reserve Bulletin • October 1987
the third largest commercial banking organization in
the state. 2 Based on all the facts of record, the Board
believes that consummation of the proposal would
have no significantly adverse effect on the concentration of banking resources in South Dakota.
The Board has considered the effects of the proposal
upon competition in the relevant banking markets. 3
Applicant does not currently operate any banking or
nonbanking subsidiary in any market in which Banks
will operate. Moreover, upon consummation of the
proposal, a significant number of competitors will
remain in each market in which the Banks will operate.
Based on all the facts of record, the Board believes
that consummation of the proposal would not result in
any significantly adverse effect on existing or potential
competition or increase the concentration of banking
resources in any relevant banking market. Thus, competitive factors are consistent with approval.
The financial and managerial resources of Applicant
and Banks are consistent with approval, especially in
light of Applicant's plan to increase its consolidated
capital position. Considerations relating to the convenience and needs of the communities to be served are
also consistent with approval.
Based on the foregoing and other facts of record,
including certain commitments made by Applicant, the
Board has determined that the application should be
and hereby is approved. The acquisitions should not
be consummated before the thirtieth calendar day
following the effective date of this Order or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
2. Banking data are as of June 30, 1985.
3. Hot Springs Bank operates in the Rapid City banking market,
which is approximated by Butte, Lawrence, Pennington, Custer, Fall
River, Haakon, Jackson, and Bennett Counties, and part of Meade
County, all in South Dakota.
Huron Bank operates in the Huron banking market, which is
approximated by Hand, Beadle, Buffalo, Jerauld, and Sanborn Counties, and parts of Miner and Kingsbury Counties, all in South Dakota.
Lemmon Bank operates in the Buffalo-Bowman banking market,
which is approximated by Harding County and part of Perkins
County, South Dakota, and Adams and Bowman Counties, North
Dakota.
Platte Bank and its Corsica branch operate in the Mitchell banking
market, which is approximated by Hanson, Aurora, Brule, Davison,
Douglas, Charles Mix, and Hutchinson Counties, all in South Dakota.
Redfield Bank operates in the Aberdeen banking market, which is
approximated by McPherson, Edmunds, Faulk, Brown, Spink, Marshall, and Day Counties, South Dakota, and parts of Dickey County,
North Dakota. The Gettysburg Branch of Redfield Bank operates in
the Pierre banking market, which is approximated by Sulley, Hyde,
Stanley, Hughes, Jones, and Lyman Counties, and parts of Potter
County, all in South Dakota. The Clark Branch of Redfield Bank
operates in the Watertown banking market, which is approximated by
Codington, Roberts, Grant, Clark, Hamlin, and Deuel Counties,
South Dakota; and Traverse and Big Stone Counties, and parts of Lac
Qui Parle County, Minnesota.
Vermillion Bank operates in the Vermillion banking market, which
is approximated by Clay County and part of Union County, both in
South Dakota.
Board or by the Federal Reserve Bank of Minneapolis,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 17, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Heller, and Kelley. Absent and not voting:
Governor Angell.
WILLIAM W . WILES
[SEAL]
Secretary
of the
Board
Genbeach Company, Inc.
Beattyville, Kentucky
Order Approving
Company
Formation
of a Bank
Holding
Genbeach Company, Inc., Beattyville, Kentucky, has
applied for the Board's approval under section 3(a)(1)
of the Bank Holding Company Act ("Act")
(12 U . S . C . § 1842(a)(1)), to become a bank holding
company by acquiring 57.2 percent of the outstanding
voting shares of Peoples Exchange Bancorp, Inc.,
Beattyville, Kentucky ("Bancorp"), a one-bank holding company by virtue of its control of Peoples Exchange Bank of Beattyville ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act (52
Federal Register 20,780 (1987)). The time for filing
comments has expired, and the Board has considered
the application and all comments received in light of
the factors set forth in section 3(c) of the Act
(12 U . S . C . § 1842(c)).
Applicant is a nonoperating company that has been
formed for the purpose of becoming a bank holding
company by acquiring the shares of Bancorp currently
held by two of Applicant's principals, who are members of the same family. Upon consummation of the
proposal, the principals' shares of Bancorp would be
exchanged for shares of Applicant. Thus, this proposal
essentially represents a restructuring of existing ownership interests. 1
Bank is the 116th largest commercial banking organization in Kentucky, with total deposits of $48 million, representing 0.19 percent of the total deposits in
commercial banks in the state. 2 Bank operates in the
1. Prior to consummation, shares of Bancorp representing less than
1 percent of the outstanding voting shares would be transferred by one
of the principals to a third member of the family. These shares would
also be exchanged for shares of Applicant.
2. All banking data are as of December 31, 1986.
Legal Developments
Lee-Owsley banking market. 3 The principals of Applicant are not associated with any other banking organization in this market. Consummation of this proposal
would not result in any adverse effect upon competition or increase the concentration of banking resources in the relevant area. Accordingly, the Board
concludes that competitive considerations under the
Act are consistent with approval.
The financial and managerial resources and future
prospects of Applicant, Bancorp, and Bank are considered consistent with approval of the proposal. Considerations relating to the convenience and needs of
the community to be served also are consistent with
approval.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. This transaction shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
the Federal Reserve Bank of Cleveland, acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 6, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, and Kelley. Absent and not
voting: Chairman Volcker.
JAMES MCAFEE
[SEAL]
Associate
Secretary
of the Board
Union Planters Corporation
Memphis, Tennessee
Order Approving
Acquisition
of a Bank
Union Planters Corporation, Memphis, Tennessee, a
bank holding company within the meaning of the Bank
Holding Company Act ("Act") (12 U . S . C . § 1841
et seq.), has applied for the Board's approval under
section 3(a)(3) of the Act to acquire at least 90 percent
of the voting shares of Bank of Trenton and Trust
Company, Trenton, Tennessee ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (52 Federal Register 19,926 (1987)).
The time for filing comments has expired, and the
Board has considered the application and all com-
3. The Lee-Owsley banking market consists of Lee and Owsley
counties in Kentucky.
807
ments received in light of the factors set forth in
section 3(c) of the Act.
Applicant is the fifth largest commercial banking
organization in Tennessee, controlling deposits of $1.8
billion, representing 5.8 percent of the total deposits in
commercial banking organizations in the state. 1 Bank
is one of the smaller commercial banking organizations
in Tennessee, with deposits of $25 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state. Consummation
of this proposal would not have any significant adverse
effect upon the concentration of banking resources in
the state.
Applicant and Bank compete directly in the Gibson
County banking market. 2 Applicant, with deposits of
$104.5 million, is the largest of 12 commercial banking
organizations in the market, controlling 28.6 percent of
the total deposits in commercial banking organizations
in the market. 3 Bank is the market's fourth largest
commercial banking organization and controls 6.4
percent of the total deposits in commercial banking
organizations in the market. Upon consummation of
the proposal, Applicant would control 35.1 percent of
the deposits in commercial banks in the market. The
Gibson County market is considered moderately concentrated with a four-firm concentration ratio of 65.3
percent which, upon consummation, would increase to
71.7 percent. The Herfindahl-Hirschman Index
("HHI") would increase by 369 points to 1852. 4
Although consummation of this proposal would
eliminate some existing competition between Applicant and Bank in the Gibson County banking market,
numerous other commercial banking organizations
would continue to operate in the market. In addition,
the Board has considered the presence of thrift institutions in the market in its analysis of this proposal.
The Board previously has indicated that thrift institutions have become, or have the potential to become,
1. State banking data are as of December 31, 1986.
2. The Gibson County banking market is approximated by Gibson
County, Tennessee.
3. Market banking data are as of June 30, 1986.
4. Under the revised Department of Justice Merger Guidelines (40
Federal Register 26,823) a market in which the post-merger HHI is
over 1800 is considered concentrated. In such markets, the Department is likely to challenge a merger that increases the HHI by more
than 50 points. The Department has informed the Board that a bank
merger or acquisition generally will not be challenged (in the absence
of other factors indicating anticompetitive effects) unless the postmerger HHI is at least 1800 and the merger increases the HHI by at
least 200 points. The Justice Department has stated that the higher
than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognizes the competitive effect of limited
purpose lenders and other nondepository financial entities.
808
Federal Reserve Bulletin • October 1987
major competitors of commercial banks. 5 Three thrift
institutions operate offices in the Gibson County banking market, controlling 21.6 percent of the market's
total deposits. These institutions compete with commercial banks in the market as providers of a wide
array of deposit and lending services to consumer and
commercial customers. In view of these facts, the
Board has concluded that thrift institutions exert a
significant competitive influence that mitigates the
anticompetitive effects of this proposal in the Gibson
County market. 6 On the basis of the foregoing, the
Board concludes that consummation of the proposal
would not have a substantial adverse competitive
effect in the Gibson County banking market.
The financial and managerial resources of Applicant
and Bank are consistent with approval. Considerations
relating to the convenience and needs of the communities to be served also are consistent with approval.
As part of this proposal, Applicant will acquire
indirectly Bank's insurance agency subsidiary that
engages in general insurance activities in Trenton, a
town with a population of fewer than 5,000 residents.
In reviewing the application, the Board has considered
the comments of various insurance groups 7 asserting
that exemption C to the insurance prohibitions contained in the 1982 Garn-St Germain Act amendments
to the Act 8 may not be used by bank holding companies, such as Applicant, that do not have their principal place of banking business in a town with a population of fewer than 5,000 residents. The Board,
however, previously has determined in its insurance
rulemaking proceeding and by Order that exemption C
does not impose such a requirement on bank holding
companies that engage in general insurance activities
in towns under 5,000 in population. 9 In this regard,
Title II of the Competitive Equality Banking Act of
1987 ("CEBA"), which was signed into law on August
5. National
City Corporation,
70 FEDERAL RESERVE BULLETIN 743
(1984); The Chase Manhattan
BULLETIN 529 (1984); NCNB
Corporation,70
Bancorporation,
10, 1987, prohibits the Board from approving an application by a bank holding company to acquire a company, including a state bank, that is engaged, directly or
through a subsidiary, in any insurance agency or
underwriting activities beyond those permitted in exemptions (A) through (G) to the insurance prohibitions
contained in the 1982 Garn-St Germain Act amendments to section 4(c)(8) of the Act. Applicant has
committed to conduct its insurance agency activities
pursuant to the terms of exemption C. Accordingly,
the Board's approval of the application is not precluded by Title II of CEBA.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. The acquisition of Bank shall
not be consummated before the thirtieth calendar day
following the effective date of this Order, or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of St. Louis,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 20, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Angell, and Heller. Absent and not voting: Governors Seger and Kelley.
WILLIAM W . WILES
[SEAL]
Secretary
of the
Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Hong Kong and Shanghai Banking Corporation
Hong Kong, B.C.C.
Kellett, N.V.
Curacao, Netherlands Antilles
FEDERAL RESERVE
70 FEDERAL RESERVE
BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL
RESERVE BULLETIN 802 (1983); First Tennessee Corporation, 69
HSBC Holdings, B.V.
Amsterdam, The Netherlands
F E D E R A L RESERVE B U L L E T I N 2 9 8 ( 1 9 8 3 ) .
6. If 50 percent of deposits held by thrift institutions in the Gibson
County banking market were included in the calculation of market
concentration, Applicant would control 25.2 percent of the market's
total deposits and Bank would control 5.7 percent of such deposits.
Upon consummation, the HHI would increase by 286 points to 1501.
7. Comments were received from the Association of Life Underwriters, National Association of Professional Insurance Agents, Independent Insurance Agents of America, Inc., National Association of
Casualty and Surety Agents, and National Association of Surety Bond
Producers.
8. 12 U.S.C. § 1843(c)(8)(C)(i).
9. 12 C.F.R. § 225.25(b)(8)(iii); see also Amendments to Regulation Y Governing Permissible Insurance Activities for Bank Holding
Companies, 51 Federal Register 36,201 (1986); First United Bancshares,
Inc.,
73 FEDERAL RESERVE BULLETIN 162 (1987).
Marine Midland Banks, Inc.
Buffalo, New York
Order Approving the Issuance and Sale of
Denominated Payment
Instruments
Variably
Hong Kong and Shanghai Banking Corporation, Hong
Kong, B.C.C., Kellett N . V . , Curacao, Netherlands
Antilles, H S B C Holdings, B . V . , Amsterdam, The
Netherlands and Marine Midland Banks, Inc., Buffalo,
N e w York ("Marine") (collectively referred to as
Legal Developments
"Applicants"), each a bank holding company within
the meaning of the Bank Holding Company Act
("BHC Act"), have applied for the Board's approval
under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(a)(3)) and section 225.23(a)(3) of the Board's
Regulation Y (12 U.S.C. § 225.23(a)(3) to engage
through a newly formed subsidiary, Marine Midland
Payment Services, Inc., in the issuance and sale of
payment instruments, as follows:
(1) domestic money orders up to a maximum face
value of $10,000; and
(2) official checks with no maximum limitation on
the face amount, but subject to certain conditions.
These instruments would be sold throughout New
York exclusively through branches of Marine's subsidiary, Marine Midland Bank, N.A. ("Marine
Bank"). 1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (52 Federal Register 24,532 (1987)). The
time for filing comments 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 BHC Act.
Marine controls total consolidated assets of approximately $24 billion and is the seventh largest bank
holding company in the state of New York based on
total domestic deposits in Marine Bank. 2 Applicants
also engage in a number of nonbanking activities.
Regulation Y includes on the list of permissible
nonbanking activities the issuance and sale of money
orders and other similar consumer-type payment instruments with a face value not exceeding $1,000.3 The
Board also has approved by order, a number of
applications to engage in the issuance of payment
instruments with a $10,000 maximum face value. 4 In
each case, the Board determined that the issuance and
sale of payment instruments in increased denominations would not affect the fundamental nature of the
activity as otherwise permitted under Regulation Y. In
those orders, the Board also expressed its concern
over potential adverse effects on monetary policy
because such instruments are not subject to the trans-
1. Applicant proposes to furnish data processing, marketing, and
servicing assistance in connection with its payment instrument activities. These activities are permissible pursuant to section 4(c)(1)(C) of
the BHC Act.
2. Asset data are as of March 31, 1987, and deposit data are as of
December 31, 1986.
3. 12 C.F.R. § 225.25(b)(12).
4. BankAmerica
Corporation,
Manhattan
71 FEDERAL RESERVE BULLETIN 905 (1985); Citicorp,
F E D E R A L RESERVE B U L L E T I N 5 8 ( 1 9 8 5 ) .
action account reserve requirements that serve as an
essential tool of monetary policy. Accordingly, the
Board conditioned its approval on the requirement
that Applicant file with the Board weekly reports of
daily data on this activity.
In Wells Fargo & Company,5 the Board approved a
proposal to engage in the issuance and sale of official
checks with no maximum limitation on the face
amount subject to certain commitments designed to
mitigate the potential adverse effects on monetary
policy. Applicants have made these same commitments.
Specifically, Applicants have committed that they
will deposit into a demand deposit account at Marine
Bank the proceeds of any official check having a face
value in excess of $10,000, and the proceeds of each
item will remain in the demand account until the
respective payment instrument is paid. Weekly reports
will be made of daily data showing separately the
aggregate value of all outstanding instruments (including money orders as well as official checks) with face
values of up to $10,000, as well as the aggregate value
of all official checks with face values exceeding
$10,000.
In light of the commitments and procedures outlined
above, the Board has determined that its concerns
regarding potential adverse effects on the reserve base
have been sufficiently mitigated as to be consistent
with approval. The Board's approval to engage in this
activity is subject to the continued evaluation of its
potential adverse effects on monetary policy. If the
Board discerns such effects in the future, it would
require appropriate modification of the activity and the
imposition of additional reserve requirements.
In order to approve this application under section
4(c)(8), the Board must find that Applicants' performance of the proposed activity could "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).
Consistent with the Board's findings in the Wells
Fargo Order, the record here reflects that the sale of
these larger denominated money orders by Applicants
would increase competition in this field, provide greater convenience for purchasers, result in gains in efficiency and generally make these instruments more
readily available to the public. There is no evidence in
the record that consummation of this proposal would
70 FEDERAL RESERVE BULLETIN 364
(1984) and Order approved July 21, 1987; see also Chase
Corporation,
809
71
5. Wells Fargo
& Company,
72 FEDERAL RESERVE BULLETIN 148
(1986). See also, FirstBank Holding Company of Colorado, 72 FEDERAL RESERVE B U L L E T I N 6 6 2 ( 1 9 8 6 ) .
810
Federal Reserve Bulletin • October 1987
result in unsound banking practices, unfair competition, conflicts of interests, or undue concentration of
resources. Accordingly, the Board believes that public
benefits of the proposal 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 it is required
to consider under section 4(c)(8) is favorable. This
determination is subject to all of the conditions set
forth in Regulation Y, including sections 225.4(d) and
225.23(b), and to the Board's authority to require such
modification or termination of the activities of a holding company or any of its subsidiaries as the Board
finds necessary to assure compliance with the provisions and purposes of the BHC Act and the Board's
regulations and orders issued thereunder, or to prevent evasion thereof.
The activity shall be commenced no 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 N e w York, acting
pursuant to delegated authority.
By order of the Board of Governors, effective
August 17, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
WILLIAM W . WILES
[SEAL]
Secretary
of the Board
J.P. Morgan & Co. Incorporated
New York, New York
Order Approving Application to Engage in Combined
Investment Advisory and Securities
Execution
Services
J.P. Morgan & Co. Incorporated ("JPM"), N e w York,
N e w York, a bank holding company within the meaning of the Bank Holding Company Act ("Act" or
" B H C Act"), has applied, pursuant to section 4(c)(8)
of the BHC Act (12 U . S . C . § 1843(c)(8)) and section
225.23(a)(3) of the Board's Regulation Y (12 C.F.R.
§ 225.23(a)(3)), to expand the authority of its wholly
owned subsidiary, J.P. Morgan Equities Inc. ("JPM
Equities"), to include the provision of investment
advisory services for "Institutional Customers." 1
1. An Institutional Customer is defined by JPM to be:
(1) a bank (acting in an individual or fiduciary capacity); an
insurance company; a registered investment company under the
JPM Equities proposes to conduct these activities
from offices in N e w York City and London, England,
for its affiliates and for institutional customers in the
United States and abroad.
On June 3, 1986, the Federal Reserve Bank of N e w
York, pursuant to authority delegated by the Board,
approved JPM's application to engage through JPM
Equities in brokerage activities in accordance with
section 225.225(b)(15) of the Board's Regulation Y.
JPM now proposes to expand the activities of JPM
Equities to include providing to institutional customers and its affiliates, 2 in conjunction with its brokerage
services, various investment advisory services, including portfolio investment advice and research, general economic advice, and forecasting. The Board has
approved the separate provision of investment advisory services by bank holding company subsidiaries and
has incorporated this activity into Regulation Y.
(12 C.F.R. § 225.25(b)(4)).
Notice of the application, affording interested parties an opportunity to comment, has been duly published (51 Federal Register 42,004 (1986)). The time for
filing comments has expired, and the Board has considered the application and all comments received,
including comments opposing the proposal from the
Securities Industry Association (the "SIA"), a national trade association of the securities industry, in light
of the public interest factors set forth in section 4(c)(8)
of the BHC Act.
The Board previously has determined by Order that
the combination of investment advice and securities
execution services to institutional customers is a permissible activity for bank holding companies under
section 4(c)(8) of the B H C Act, and does not constitute
the underwriting or public sale of securities under
section 20 of the Glass-Steagall Act. National
Westminister Bank PLC, et al., 72 FEDERAL RESERVE
Investment Company Act of 1940; or a corporation, partnership,
proprietorship, organization or institutional entity that regularly
invests in the types of securities as to which investment advice is
given, or that regularly engages in transactions in securities;
(2) an employee benefit plan with assets exceeding $5,000,000, or
whose investment decisions are made by a bank, insurance company or investment advisor registered under the Investment Advisors
Act of 1940;
(3) a natural person whose individual net worth (or joint net worth
with his or her spouse) at the time of receipt of the investment
advice or brokerage services exceeds $5,000,000;
(4) a broker-dealer or option trader registered under the Securities
Exchange Act of 1934, or other securities professional; or
(5) an entity all of the equity owners of which are institutional
customers.
2. The provision of such services by JPM Equities to other JPM
affiliates is a permissible servicing activity under section 225.22(a) of
Regulation Y, 12 C.F.R. § 225.22.
Legal Developments
BULLETIN 584 (1986) ( " N a t W e s t " ) . That determination recently has been upheld by the U.S. Court of
Appeals for the District of Columbia Circuit in Securities Industry Association
v. Board of
Governors,
et al„ No. 86-1412 (slip op. July 7, 1987).
The current proposal parallels in almost all respects
the NatWest proposal, and thus raises substantially
identical issues to those resolved by the Board in its
approval of that application. In this regard, the Board
has carefully considered the comments filed by the
SI A regarding this proposal, which incorporated by
reference its comments to the NatWest proposal. The
SIA also urges the Board to defer consideration of this
application until resolution of the NatWest litigation in
order to avoid a multiplicity of suits.
Upon consideration of the entire record of the
instant application, the analysis contained in the
NatWest Order, 3 and for the additional reasons set
forth below, the Board concludes that the activities
proposed herein are closely related to banking and a
proper incident thereto under section 4(c)(8) of the
BHC Act, and that consummation of the proposal
would not result in a violation of the Glass-Steagall
Act. Accordingly, the Board has determined to approve the application.
I. BHC Act Factors
Section 4(c)(8) imposes a two-step test for determining
the permissibility of nonbanking activities for bank
holding companies:
(1) whether the activity is closely related to banking;
and
(2) whether the activity is a "proper incident" to
banking—that is, whether the proposed activity can
reasonably be expected to produce benefits to the
public that outweigh possible adverse effects.
A. Closely Related to Banking Analysis
Based on guidelines established in the National Courier case, a particular activity may be found to meet the
"closely related to banking" test if it is demonstrated
that banks generally have in fact provided the proposed activity; that banks generally provide services
that are operationally or functionally so similar to the
proposed activity as to equip them particularly well to
provide the proposed activity; or that banks generally
provide services that are so integrally related to the
3. The Board hereby incorporates by reference its rationale for
approval of the NatWest proposal.
811
proposed activity as to require their provision in a
specialized form. 4
In the NatWest Order, the Board determined in the
context of an application by an individual bank holding
company that the combined offering by the same
subsidiary of investment advisory and securities execution services to institutional customers is closely
related to banking. In NatWest, the Board found that
the proposed activities represented the combination of
two permissible activities in such a way that it did not
alter the functional nature of the activities. The Board
also determined that the joint offering of brokerage and
investment advice was a proper incident to banking.
The proposed activities here are identical to those
approved in that case, except that JPM Equities would
exercise limited investment discretion at a customer's
specific request.
Although JPM Equities anticipates that, as a general
matter, its institutional customers will want to make
their own investment decisions, JPM Equities also
desires to make available to such customers a service
typically offered by similar firms: that within defined
parameters established by the client, JPM Equities
would be authorized to exercise discretion in buying
and selling securities on behalf of the client.
Such investment discretion would be exercised only
at the request of a client; JPM Equities does not intend
to market or solicit managed accounts. Moreover,
JPM Equities would obtain the consent of its client
before engaging in securities transactions on the client's behalf with an affiliate of JPM Equities. Each
client would receive confirmation of each transaction,
as well as monthly statements which would indicate in
detail the terms of each transaction executed on the
client's behalf. Each client would, therefore, always
be aware of the scope of JPM Equities' activities for its
account.
The discretion proposed by Applicant has traditionally been performed by banks and is encompassed
within the investment advisory activity previously
approved by the Board, as the Supreme Court recognized in Board of Governors v. Investment
Company
Institute, 450 U.S. 46 (1981) ( " / C / / / " ) :
4. National Courier Association v. Board of Governors, 516 F.2d
1229 (D.C. Cir. 1975). However, the National Courier guidelines are
not the exclusive basis for finding a close relationship between a
proposed activity and banking. The Board has stated that in acting on
a request to engage in a new nonbanking activity, it will consider any
other factor that an applicant may advance to demonstrate a reasonable or close connection or relationship of the activity to banking. 49
Federal Register 794 , 806 (1984); Securities Industry Association v.
Board of Governors, 468 U.S. 207, 210-11 n.5 (1984) ("Schwab").
812
Federal Reserve Bulletin • October 1987
The services of an investment advisor are not significantly different from the traditional fiduciary functions of
banks. The principal activity of an investment advisor is
to manage the investment portfolio of its advisee—to
invest and reinvest the funds of the client. Banks have
engaged in that sort of activity for decades.
1CI1I, 450 U . S . at 55. 5
In the Board's view, the addition of investment
discretion to the activities previously approved in the
NatWest Order does not appear to alter the functional
nature of the component activities. The only apparent
difference between conducting the activities separately under the current provisions of Regulation Y and
conducting them together as proposed by JPM Equities, would be that JPM Equities would receive a
single fee for both services. The Board does not
believe that this difference is sufficiently material to
render the combined activities not closely related to
banking. Accordingly, the Board concludes that the
proposed activity is closely related to banking.
B. The "Proper Incident to Banking" Analysis
With respect to the "proper incident" requirement,
section 4(c)(8) of the BHC Act requires the Board to
consider whether the performance of the activity 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."
An issue raised by this proposal is whether the
combination of investment discretion with the previously approved investment advisory and securities
brokerage services would produce the type of adverse
effects, such as conflicts of interests or unsafe or
unsound banking practices mentioned in the BHC Act,
or the "subtle hazards" that the Supreme Court has
stated the Glass-Steagall Act intended to prevent,
such as damage to the reputation of the bank or the
"churning" of brokerage commissions, 6 that would
outweigh any public benefits associated with the proposal.
1. Public Benefits of the
Proposal
The proposal will result in public benefits because
JPM Equities will enter the brokerage market as a
de novo competitor. In addition, the ability to offer the
combined services at the same location will result in
increased efficiencies for JPM Equities, as well as
increased convenience for its customers.
2. Analysis
of Potential
Adverse
Effects
The activity proposed here is substantially similar to
that approved by the Board in the NatWest Order. In
like fashion, Applicant has made a series of commitments and conditions regarding the conduct of this
activity that parallel in pertinent part the commitments
and conditions in the NatWest Order that were designed to address the potential for adverse effects
arising from the combination of investment advice and
execution services. Subject to these commitments and
conditions, the Board has determined that the addition
of limited investment discretion to full-service brokerage is a proper incident to banking. 7
As an initial matter, banks, bank holding companies,
and their subsidiaries have traditionally managed money in discretionary accounts for their customers. The
addition of such discretionary activity to existing
investment advisory and brokerage activities would
not appear to increase measurably any likelihood of
abuse of this trust company function, or increase the
likelihood of abuse with respect to the investment
advisory and brokerage components of the activity.
The elements of investment discretion, advice, and
execution services are directly present in (or may be
linked with) existing trust company accounts and
closed-end investment companies operated by such
institutions.
In addition, the record reflects that the intended
customers for investment advice — institutional customers — will have the opportunity and the incentive
to monitor closely the activity in their accounts, and to
identify readily any abuses that might occur. The
efforts Applicant will undertake to ensure that no
confidential information is communicated between
JPM Equities and its commercial lending affiliates
(except when a client of JPM Equities specifically
requests that certain information regarding the client
be shared with another affiliate) are sufficient to assure
that JPM will not use these discretionary accounts in
an attempt to shore up the financial position of corporations borrowing from JPM Equities' commercial
5. The exercise of investment discretion by bank holding companies is also the type of activity authorized as a trust company function
under the provisions of Regulation Y. 12 C.F.R. § 225.25(b)(3). Sovran
Financial
Corporation,
73 FEDERAL RESERVE BULLETIN 744
(Order dated July 15, 1987).
6. See e.g., Schwab, 468 U.S. at 2 2 0 - 2 1 J C I I I , 450 U.S. at 66-67.
7. The Board made a substantially similar determination in the
recently approved Sovran Order.
Legal Developments
lending affiliates, particularly inasmuch as Applicant
expects that such investment discretion would be
exercised only in "rare circumstances."
Finally, it does not appear likely that the management of discretionary accounts by JPM Equities will
lead it to churn its accounts or make unsuitable
investments for its clients, substantially for the reasons already outlined in the Board's NatWest Order.
That is, JPM Equities would be a full-service brokerdealer under the Securities Exchange Act of 1934,
would be registered under the Investment Advisors
Act of 1940, and would be a member of the National
Association of Securities Dealers. It would, therefore,
be subject to the anti-fraud provisions of these statutes
and the fiduciary rules and regulations imposed thereunder, which prohibit the churning of customer accounts and the recommendation of unsuitable securities.
The addition of investment discretion to the proposed activity would not change this analysis since the
following additional factors regarding the proposal
should serve to minimize the potential for churning:
(1) the nature of the investment discretion to be
exercised;
(2) JPM Equities' intended clients — institutional
customers — are likely to be financially sophisticated and able to detect the presence of churning; and
(3) confirmation of each transaction will be provided
to the client, in addition to monthly statements
which would indicate in detail the terms of each
transaction executed on the client's behalf.
In addition to the exercise of limited investment
discretion by JPM Equities, this application also proposes certain changes in the structure and operation of
the combined activities that distinguish it slightly from
the NatWest proposal. 8 The Board has carefully considered the record with respect to these proposed
modifications to the conduct of the activity, in light of
8. These differences are:
(1) the corporate title of JPM Equities resembles that of Applicant's
bank subsidiary;
(2) JPM Equities will offer discount brokerage services, without
investment advice, to non-institutional customers;
(3) JPM Equities will receive certain back-office support services
from its affiliates;
(4) at the specific request of a client, JPM Equities would provide
information about that client (such as an investment profile) to a
commercial lending affiliate, if such client is an existing customer of
that affiliate; and
(5) research personnel at JPM Equities from time to time may
provide corporate or industry profiles to its foreign securities
affiliates (but JPM Equities would not be made aware of those
securities that the affiliate carries in its inventory).
813
its NatWest analysis and the recently approved Sovran Order. In the Board's view, these differences do
not warrant denial of the proposal, or require the
imposition of new or changed conditions on the conduct of the proposed activity in order that the activity
remain a proper incident to banking.
In sum, the addition of investment discretion to
what is essentially the activity previously approved by
the Board in its NatWest Order does not represent a
material change to the nature or conduct of that
activity that would alter the Board's prior determinations that:
(1) the activity is closely related to banking; and
(2) the activity is a proper incident to banking, that
is, the proposal is likely to result in public benefits
that outweigh adverse effects.
II. Consistency With the Glass-Steagall
Act
The Board previously has determined, and the U.S.
Court of Appeals in the NatWest decision has upheld,
that the combined offering by a bank holding company
subsidiary of investment advisory and securities execution services does not constitute the "public sale"
of securities for purposes of section 20 of the GlassSteagall Act. 9 JPM Equities now proposes to add to
these combined services limited investment discretion. The Board concludes that the addition of such
investment discretion to these combined services
would not convert these activities to the public sale of
securities.
The U.S. Supreme Court stated in the ICIII case
that "[t]he management of a customer's investment
portfolio—even when the manager has the power to
sell securities owned by the customer—is not the kind
of selling activity that Congress contemplated when it
enacted § 21" of the Glass-Steagall Act, 450 U.S. at
63, because when the advisor acts in this situation it is
"for the account of its customer—not for its own
account." Id., at 66 n.37. There is no reason to believe
that the Court's holding with respect to section 21,
which prohibits any entity "engaged in the business of
. . . selling" securities from receiving deposits, would
9. The Glass-Steagall provisions relevant to this proposal are
section 20's prohibition on the affiliation between a member bank and
a "corporation . . . engaged principally in the issue, flotation, underwriting, public sale or distribution at wholesale or retail or through
syndicate participation of stocks . . . or securities" and section 32's
prohibition on an officer or director interlock between a member bank
and a company primarily engaged in such activities. JPM is affiliated
with a member bank and therefore must comply with both of these
sections. For ease of discussion, this Order will refer only to section
20, although the analysis is equally applicable to section 32.
814
Federal Reserve Bulletin • October 1987
not be equally applicable to the "public sale" provision in section 20. 10
Moreover, in NatWest the court upheld the Board's
conclusion that the combined provision of brokerage
and investment advice would not constitute the public
sale of securities because the company providing the
services did not purchase any securities for its own
account from an issuer, did not make a market for
securities with its own funds, and did not offer securities to the public as agent of the issuer of the securities. 11 The addition of limited investment discretion to
the combined activities of investment advice and brokerage services does not, in the Board's view, result in
JPM Equities' purchasing securities for its own account or functioning as an agent for an issuer of
securities. Indeed, as the ICIII case points out, if the
Glass-Steagall Act were intended to prohibit the management of a customer investment portfolio — even
when the manager has the power to sell securities
owned by the customer — then "the statute would
prohibit banks from continuing to manage accounts in
a fiduciary capacity or as agent for an individual. We
do not believe Congress intended that such a reading
be given § 21 [of the Glass-Steagall Act]." 450 U.S. at
63. When viewed in light of the relevant Board and
Supreme Court precedents, the Board believes that
the addition of investment discretion to the combined
offering of investment advisory and securities brokerage services to institutional customers does not transform the activity into a public sale for purposes of the
Glass-Steagall Act.
Nor, in the Board's view, would the oft-cited "subtle hazards" underlying enactment of the Glass-Steagall Act — such as conflicts of interest; the failure to
provide unbiased investment advice; the churning of
brokerage accounts; the possible damage to a bank's
reputation arising from the activities of its securities
affiliates — render the proposed activities inconsistent
with the terms or spirit of that act. The Board notes
that the U.S. Court of Appeals for the District of
Columbia Circuit, both in its NatWest decision and in
the Bankers Trust II case, 12 has confirmed the Board's
view that a subtle hazards analysis is undertaken only
in order to confirm that the literal interpretation of the
10. In fact, the Supreme Court has specifically noted that " a less
stringent standard should apply to determine whether a holding
company has violated section 20 than is applied to a determination of
whether a bank has violated sections 16 and 21." ICIII, 450 U.S. at 61
n.26.
11. The courts have left open the question whether "best efforts"
underwriting is covered by the Glass-Steagall Act. 468 U.S. at 218
n.17.
12. Securities Industry Association v. Board of Governors, 807
F.2d 1052 (D.C. Cir. 1986).
statute is correct or to shed light on possibly ambiguous statutory language. Where, as here, the activity is
permissible under the literal terms of the statute, the
subtle hazards analysis is unnecessary to determine
the legality of the activity under the Glass-Steagall
A c t . 7 2 FEDERAL RESERVE BULLETIN at 5 9 4 .
In NatWest, the court upheld the Board's determination that the combined provision of brokerage and
investment advice would not give rise to any of the
subtle hazards at which the Glass-Steagall Act was
aimed. As explained above, the addition of investment
discretion to the activities approved by the Board in
NatWest does not increase the likelihood of any
conflicts of interest or other abuses. A review of the
record under the proper incident to banking test contained in the separate statutory provisions of the BHC
Act indicates that the proposed activity would not give
rise to such subtle hazards, especially in view of the
Applicant's adoption, in substantial part, of the commitments made and the conditions set forth in the
NatWest Order. Accordingly, the Board finds that the
proposed activity is consistent with the terms and
spirit of the Glass-Steagall Act.
III.
Conclusion
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 that the Board is required to
consider under section 4(c)(8) of the BHC Act is
favorable. Accordingly, the application is hereby approved, subject to the commitments made by Applicant and the conditions (whether explicitly stated or
incorporated by reference) in this Order.13 This determination is further subject to all of the conditions set
forth in the Board's Regulation Y, including those in
sections 225.4(d) and 225.23(b), and to the Board's
authority to require modification or termination of the
activities of the holding company or any of its subsidiaries as the Board finds necessary to assure compli-
13. With respect to the SIA's comments regarding a proposed delay
of the Board's decision on this proposal in order to await the outcome
of the pending NatWest litigation as well as to avoid prospective
litigation, the Board notes that the U.S. Court of Appeals for the
District of Columbia Circuit has only recently upheld the Board's
approval of the NatWest application. Further, the Board does not
believe it appropriate to suspend the regulatory process because of the
prospect of potential litigation, especially in view of the recent
favorable judicial ruling on a virtually identical proposal. Accordingly,
the SIA's request is denied.
Legal Developments
ance with the provisions and purposes of the BHC Act
and the Board's regulations and orders issued thereunder, or to prevent evasion thereof.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board, or by the Federal Reserve Bank of N e w
York, pursuant to delegated authority.
By order of the Board of Governors, effective
August 5, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, and Kelley. Absent and not
voting: Chairman Volcker.
JAMES MCAFEE
[SEAL]
Associate
Secretary
of the Board
Security Pacific Corporation
Los Angeles, California
Order Approving Application to Establish an
Automated Trading System for Options On United
States Government
Securities
Security Pacific Corporation, Los Angeles, California
("Applicant"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act") (12 U . S . C . § 1841 et seq.), has applied for the
Board's approval under section 4(c)(8) of the BHC Act
(12 U . S . C . § 1843(c)(8)), and section 225.25(a) of the
Board's Regulation Y (12 C.F.R. § 225.25(a)) to engage de novo, through two wholly owned subsidiaries,
Security
Pacific Options Trading
Corporation
("SPOT") and Security Pacific Options Services Corporation ("SPOSC"), in securities brokerage, clearing, and other services in connection with a system for
the trading of options on United States Treasury
securities.
Applicant, with total consolidated assets of $64.0
billion, is the third largest banking organization in
California and the seventh largest nationwide. 1 It
operates six bank subsidiaries and engages in a broad
range of permissible nonbanking activities in the United States and abroad.
Notice of the proposal, affording interested persons
an opportunity to submit comments on the proposal,
has been published (51 Federal Register
47,060
(1986)). The Board received adverse comments from
the Chicago Board of Trade, the Chicago Mercantile
1. Banking statistical data are as of March 31, 1987, and banking
structure data are as of April 15, 1987.
815
Exchange, the Chicago Board Options Exchange, Inc.
and the Chicago Board Options Clearing Corporation
("protestants").
In addition, the Board received a number of comments from members of Congress expressing concerns
similar to those presented by the protesting exchanges. Two favorable comments were received from
primary dealers in U . S . government securities (Citicorp and Greenwich Capital Markets, Inc.).
I. Description of the Options Trading
System
Applicant proposes to establish and operate a proprietary system for trading put and call options on United
States Treasury securities. The system would be used
by government securities dealers and other institutions
that wish to trade in options on Treasury securities.
The system would allow participants to acquire options on Treasury securities without disclosing their
identity to other market participants. The options
traded through the system differ from the standardized
futures and options contracts on U . S . government
securities that are traded on the protesting exchanges
in that many of the terms of each option traded in the
system will be variable and the subject of negotiation
between participants (as is customary in the over-thecounter markets). However, some limited terms of the
options will be standardized to promote liquid trading. 2
Applicant's proposed subsidiaries would provide
services to participants in the trading system. SPOT
will act as a "blind broker" for the system participants. Specifically, SPOT will provide an automated
communications network linking video display terminals in participants' offices. The communication network would disseminate to the participants bid and ask
quotations by participants on options on Treasury
securities. If participants wish to accept a quotation
transmitted through the network, SPOT would execute the transactions at the direction of the participants. SPOT will act solely as agent; it will not take a
position for its own account in the options traded. 3
2. Initially participants in the system will be able to trade put and
call options based upon delivery of 200 specific issues of couponbearing Treasury securities. Eventually, the system will encompass
options on the full range of Treasury securities, from bills to all
coupon bearing obligations.
3. SPOT will provide these brokerage services to customers without recourse and will receive compensation in the form of commissions.
816
Federal Reserve Bulletin • October 1987
Dealers that trade options through the system will
not enter into transactions directly with each other.
Each party to an options transaction will buy an option
from or sell an option to a third party unaffiliated with
Applicant, GECC Options Corporation ("GOC"), a
wholly owned subsidiary of General Electric Credit
Corporation ("GECC"). 4 GOC will issue all options
traded in the system. GECC will unconditionally guarantee the options. 5 At the time GOC issues an option
to one participant in the transaction, GOC will issue an
offsetting option on exactly the same terms with the
other participant, thus in effect running a "matched
book."
Applicant's subsidiary, SPOSC, will act as clearing
agent with respect to transactions effected through the
system, comparing, matching, clearing, and settling
the purchase of the option contracts. SPOSC would
also calculate and hold the margin that participants
writing options would be required to deposit to secure
their contingent obligations under those options.
SPOSC would also establish rules and procedures to
govern the operations of the system, relating to, for
example, the hours and places of trading, position
limits and capital adequacy standards for individual
participants, and unfair and fraudulent trading practices, and would establish a mechanism for enforcing
these rules. SPOSC will also operate facilities to store
and update options trading information and will engage
in other similar incidental services.
Finally, SPOSC will also be responsible for determining which institutions may become participants in
the options trading system. Participation in the system
is open to any person designated as a primary dealer
by the Federal Reserve Bank of New York and to
other institutional customers that meet certain financial and other requirements to be established by
SPOSC. 6
In addition, Applicant's lead subsidiary bank, Security Pacific National Bank, Los Angeles, California
("Bank"), would provide a standby letter of credit to
GOC in the amount of $35 million. GOC would be able
to draw on the letter of credit in the event of a default
by one or more of the participants on an obligation to
GOC.
4. GECC is a subsidiary of General Electric Financial Services,
Inc., which in turn is a subsidiary of the General Electric Company.
General Electric Financial Services, Inc. controls 80 percent of the
shares of Kidder, Peabody, an investment banking firm. None of the
activities relating to the options trading system will be conducted in
offices identifiable with Kidder; there will be no interlocks, and no
tandem operations. On the basis of this legal, physical and functional
separation, Kidder might apply to be a participant in the system.
5. The issuance of the options by GOC allows government securities dealers and other institutions to trade options anonymously
without revealing their market positions, and without having to assess
the creditworthiness of the other participant to the transaction in each
case.
6. The majority of participants are expected to be commercial
banks, brokers, dealers, and other institutional investors, including
pension funds and trust departments.
1. Closely Related
II. Bank Holding Company Act
In every application under section 4(c)(8) of the BHC
Act, the Board must find that the proposed activity is
"so closely related to banking . . . as to be a proper
incident thereto." This statutory standard requires
that two separate tests be met for an activity to be
permissible for a bank holding company. First, the
Board must determine that the activity is, as a general
matter, "closely related to banking." Second, the
Board must find in a particular case that the performance of the activity by the applicant bank holding
company may reasonably be expected to produce
public benefits that outweigh possible adverse effects.
The protestants have raised a number of issues in
opposition to the subject proposal under the BHC Act.
In summary, the protestants allege that:
Closely related to banking: The proposed activities
go beyond previously approved brokerage and clearing activities and are not closely related to traditional
banking activities.
Public Benefits versus Adverse Effects: N o substantial public benefits would result from the proposal and,
in any event, public benefits would be outweighed by
possible adverse effects.
Glass-Steagall
Act: The proposed activities would
violate the Banking Act of 1933 ("Glass-Steagall
Act").
Hearing request: There exist disputed material facts
for which a hearing is required before the Board may
consider the merits of the proposal.
to Banking
Analysis
Based on guidelines established in the National Courier decision, a particular activity may be found to meet
the "closely related to banking" test if it is demonstrated that:
(1) banks generally have in fact provided the proposed activity;
(2) banks generally provide services that are operationally or functionally so similar to the proposed
activity as to equip them particularly well to provide
the proposed activity; or
Legal Developments
(3) banks generally provide services that are so
integrally related to the proposed activity as to
require their provision in a specialized form. 7
In its Regulation Y, the Board has determined that
providing securities brokerage services and performing activities of a trust company are permissible for
bank holding companies. 12 U.S.C. 225.25(b)(15),
(b)(3). Applicant maintains the proposed services of
SPOSC and SPOT fall within these previously approved activities. The protestants contend that the
proposal does not meet the closely related to banking
test on the basis that the functions involved in this
activity go beyond previously approved clearing and
brokerage activities. In particular, the protestants argue that securities brokers do not maintain their own
trading markets, and that clearing agencies perform
only largely ministerial functions in connection with
the clearance and settlement of securities transactions
and do not engage in administration and enforcement
of rules relating to the trading of securities. Protestants
contend that banks have no expertise or experience in
such functions and thus they are not closely related to
banking.
As discussed below, the Board believes the highly
specialized brokerage and clearing functions to be
provided by SPOT and SPOSC are significantly different from the kind of retail discount brokerage and
traditional securities and options clearing functions
described in the provisions of Regulation Y. In addition, although Applicant describes the proposed operations of SPOT and SPOSC as separate, stand-alone
activities, the Board notes that the functions of the two
companies would be closely interrelated and thus their
operations should be viewed as a single activity.
However, the fact that the proposed activities are not
currently on the list of permissible activities in Regulation Y does not preclude the Board from finding that
they meet the closely related to banking test in the
statute, if the Board finds that there is a sufficiently
close functional relationship between the proposed
activities and traditional banking functions.
(a) Blind brokerage. As described above, SPOT will
provide an automated communications network
among the dealers participating in the system that will
allow SPOT to execute orders by participants to enter
into the options traded in the system. The Board
concludes that this kind of blind brokering of options
7. National Courier Association v. Board of Governors of the
Federal Reserve System, 516 F.2d 1229, 1237 (D.C. Cir. 1975)). The
National Courier guidelines are not the exclusive basis for a closely
related determination. Id. at 1237. The Board may consider any other
basis that may demonstrate that the activity has a close relationship to
banking. 49 Federal Register 806 (1984).
817
among dealers does not fall within the scope of the
discount retail securities brokerage described in section 225.25(b)(15) of Regulation Y. As the Board
explained when it adopted this provision of Regulation
Y, the provision was intended to cover the activities
involved in the Board's BankAmericalSchwab
decision, 8 which involved a retail broker that executed
orders from the public for all types of securities both
on exchanges and in the over-the-counter markets. In
contrast, SPOT's brokerage services also involve creation of a communications network linking terminals
in participants' offices and would be provided only
with respect to options on Treasury securities and only
to a limited group of government securities dealers and
other institutions that participate in the trading system. 9
The Board has, however, previously determined by
order that acting as a broker's broker in the interdealer
market is closely related to banking.
Independent
Bankers Financial Corporation,71 FEDERAL RESERVE
BULLETIN 651 (1985)(municipal securities); Chemical
New York Corporation!Liberty Brokerage, 73 FEDERAL RESERVE BULLETIN 362 (1987) (U.S. government
securities). For example, Independent Bankers involved a proposal by a subsidiary of that bank holding
company to enter into a joint venture with Mills &
Allen PLC, a London based firm engaged in communications and securities activities, to become one of a
limited number of U.S. interdealer brokers in municipal securities, which are not traded on the exchanges.
The broker involved, like SPOT, proposed to act as a
"blind broker"—standing between buyer and seller to
assure the anonymity of traders. The Board found that
this function is closely related to the retail securities
brokerage activities performed by banks. In Liberty
Brokerage, the Board subsequently determined that
serving as a blind broker in U.S. government securities, including disseminating price quotations on
closed-circuit display screens located in dealer trading
rooms, is closely related to banking.
SPOT would provide essentially the same kind of
services with respect to options on Treasury securities
as the brokers' brokers in the previous approvals
provide with respect to other types of securities. The
Board finds that the traditional brokerage activities of
banks are operationally and functionally so similar to
SPOT's proposed services that banking organizations
8. 69 FEDERAL RESERVE BULLETIN 105 (1983), affirmed in
Securi-
ties Industry Ass'n v. Board of Governors, 468 U.S. 207 (1984).
9. In 1984, the San Francisco Reserve Bank, acting pursuant to
delegated authority, approved a notice by Applicant to engage in
discount brokerage through RMJ. RMJ was a government securities
"broker's broker" that operated an automated network of trading
screens located in dealer's offices. But RMJ did not provide services
exclusively to participants in a trading system administered by Applicant. Applicant subsequently divested RMJ.
818
Federal Reserve Bulletin • October 1987
are particularly well equipped to provide them. 10 Accordingly, the Board finds that these activities are
closely related to banking.
(b) Clearing options and related functions. SPOSC
will perform several functions in connection with the
proposed trading system. First, SPOSC will clear and
settle options traded through the system. The Board
has previously recognized that clearing of securities
transactions has traditionally been performed by trust
departments of banks, and trust department functions
are permissible for bank holding companies under
Regulation Y. 12 C.F.R. 225.25(b)(3). In addition, the
Board previously has authorized futures commission
merchant subsidiaries of bank holding companies to
combine futures and options execution and clearing
activities. See section 225.25(b)(18) of Regulation Y
(execution and clearance of futures traded on commodity exchanges) and Citicorp, 70 FEDERAL RESERVE BULLETIN 591 (1984) (execution and clearance
of options on government securities traded on securities exchanges). Accordingly, the Board finds that the
SPOSC's clearance of options on Treasury securities
traded through SPOT'S automated quotation system
involves identical operations and thus is closely related to banking.
SPOSC would also perform other activities: setting
margin requirements and establishing and enforcing
rules governing the trading of options through SPOT
and the clearing of those options transactions. The
Board has not previously approved such activities for
a bank holding company. In the Board's view, however, these activities are permissible for SPOSC under
section 4(c)(8). The Board finds that SPOSC's setting
and assuring the maintenance of margin against participants' contingent obligations to perform options they
have written is so functionally similar to traditional
credit-risk functions of banks that banking organizations are particularly well equipped to provide this
service. 11 Thus, this activity is closely related to
10. Protestant the Chicago Board of Trade ("CBOT") asserts that
SPOT's functions would go beyond mere brokerage because unlike
the typical broker SPOT would execute orders from both sides of the
transaction—both the purchaser and the writer of the option being
traded. This fact does not, however, distinguish SPOT's activities
from what even retail brokers do in executing orders in the over-thecounter markets, where in order to execute an order to buy or sell a
security the broker must solicit a comparable sell or buy order in order
to complete the transaction. Also, as CBOT points out, SPOT would
seek to execute orders only from those dealers and other institutions
that have been admitted to the trading system. Brokers typically
execute orders with any market maker or in any market if that method
of execution is the most efficient. The Board finds, however, that this
limitation on SPOT's activities does not alter the basic function SPOT
performs, only the class of customers for which the services would be
performed.
11. See, e.g., F.R.R.S. 113-1579.1 (Policy Statement on Repurchase Transactions).
banking for purposes of section 4(c)(8). In determining
the amount of required margin, SPOSC would be
required to make an assessment both of an individual
participant's financial ability to perform its obligations
as well as an assessment of the cost of buying or selling
the underlying Treasury securities in the event of
nonperformance. 12
As a result of their traditional lending and other
functions, banks have special expertise in assessing,
monitoring and reducing credit risk by setting and
administering collateral requirements and other forms
of risk amelioration. In addition, banks possess special
expertise in risk management in the U.S. government
securities market as a result of their extensive activities as dealers in those securities. Banks are among the
largest participants in the market for Treasury securities and exchange-traded options and futures relating
to Treasury securities. Banks also play an important
role in the over-the-counter market for options on
Treasury securities and in this role have developed
experience in managing their positions and monitoring
and placing limitations on the positions of other participants with whom they deal directly in this market.
In addition, the Board is of the view that SPOSC's
role in establishing rules governing the trading of
options through SPOT's automatic quotation system is
a necessary incident to operation of such a system.
These functions are necessary for the safe and efficient
operation of the quotation system and for the protection of those institutions that use the system. As noted
above, banks provide clearing agency services in
connection with securities transactions, and clearing
agencies generally issue rules regarding operation of
these clearing functions and establish procedures for
enforcing the rules. 13 Those rules are very similar to
the kind of rules and procedures that SPOSC would
establish with regard to the automated quotation system. 14
12. The amount of required margin is based upon two components
considered in conjunction with an options pricing model. The first
component is a "mark to market" factor, which represents the net
amount of the estimated cost of liquidating a participant's short
position with respect to options written (by buying or selling the
underlying securities at the current market price in order to perform
the option or by acquiring an offsetting option), offset by the estimated
proceeds from liquidating the participant's long position on options it
holds. The second component of the required margin is a performance
factor that involves a calculation of maximum potential cost that might
be incurred due to adverse market trends that occur before a defaulting participant's position can be completely liquidated.
13. See generally 15 U.S.C. § 78q-1(b)(3), 12 C.F.R. 208.8(g)-(i).
14. SPOSC will also store data on options traded through the
system. The function is a permissible one either as an incidental
operation necessary to SPOSC's clearing activity or as an independent
data processing function. 12 C.F.R. 225.25(b)(7).
Legal Developments
The protestants allege that the services proposed by
Applicant and its affiliate, viewed in their entirety, are
functionally equivalent to operating a securities "exchange" for trading options on Treasury securities
that would not be registered as required under the
securities laws. 15 However, status as an exchange,
either under the securities laws or in common understanding, is not, in the Board's view, determinative of
permissibility under the "closely related to banking"
test of section 4(c)(8), which looks to the functional
similarity of nonbanking activities to banking functions, not their precise legal status. Except in cases
where a valid law prohibits consummation of a particular proposal by a bank holding company, the Board is
not required to consider every law that might apply to
an acquisition by a bank holding company in reviewing
the transaction under the BHC Act. 16 Moreover,
Board approval of a transaction under the BHC Act
does not excuse a bank holding company from compliance with all other laws that may apply.
The Board also notes that the staff of the Securities
and Exchange Commission has advised Applicant that
the staff will not recommend enforcement action
against Applicant, its affiliates, or participants in the
system for violations of the Securities Exchange Act if
the system is not registered as an exchange with the
SEC under the Exchange Act. 17
2. Balance of Public Benefits and Adverse
Effects
With respect to the proper incident requirement of
section 4(c)(8), the Board must consider whether the
performance of the proposed nonbanking activity by
an affiliate of a bank 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 interest, or unsound
15. The Securities Exchange Act defines "exchange" as any organization that constitutes, maintains or provides a market place or
facilities for bringing together purchasers and sellers of securities.
15 U.S.C. § 78c(a)(l). Section 5 of the Exchange Act prohibits,
among other things, broker-dealers, through use of the mails or
interstate commerce, from using the facility of an exchange unless that
exchange is registered with the Commission or is exempted from
registration. 15 U.S.C. § 78e.
16. See Whitney Nat'I Bank v. Bank of New Orleans and Trust Co.,
379 U.S. 411, 418-19 (1965); Plaza Bank of Westport v. Board of
Governors, 575 F.2d 1248, 1251 (8th Cir. 1978).
17. The staffs position was conditioned on, among other things,
Applicant's provision to the staff of certain information concerning the
actual operation of the system. Although the staff's no-action letter
states that it expresses no legal conclusion regarding the applicability
of the federal securities laws, the SEC staff, in explaining its views to
the Commission members, characterized Applicant's proposed activities, not as an exchange, but as equivalent at least as proposed to
those of a blind broker and a clearing corporation.
819
banking practices. The Board finds that provision of
the proposed services by Applicant's subsidiaries,
SPOT and SPOSC, can reasonably be expected to
result in public benefits that outweigh possible adverse
effects.
(a) Public Benefits. The Board finds that this proposal
is likely to result in some public benefits.
Increased Competition.
The automated quotation
system on Treasury options would be a de novo entrant into the market for options on U.S. government
securities and approval could reasonably be expected
to increase competition in this market by affording
dealers and other institutional investors an alternative
method to hedge portfolio risk or to discover price
movements in the market. It has long been recognized
that unless there is evidence to the contrary, commencement of an activity de novo is presumed to
result in benefits to the public through increased
competition. See 12 C.F.R. 225.24.
Protestant CBOT argues that no public benefits are
likely because the existing securities exchanges on
which Treasury options are traded already provide a
sufficiently liquid marketplace for those seeking to
hedge exposure in their securities portfolio or to assess
price trends. But the undisputed facts show that
Applicant's system would trade nonstandardized options whose terms would be established by the parties
to the option transaction themselves and thus would
facilitate trades that are not available on the protestant
exchanges.
Greater Convenience and Increased Efficiency. For
these reasons, the Board also finds that the proposal is
likely to lead to greater convenience for institutions
seeking to engage in options transactions. This proposal is likely, in the Board's view, to improve the
liquidity and thus the overall efficiency of this market
by providing a convenient means for price discovery
and by allowing participants to enter into nonstandardized options transactions particularly suited to their
own needs without losing anonymity and without the
burden of assessing the creditworthiness of the contra
parties.
(b) Adverse Effects. The protestants maintain that the
proposal would give rise to unsound banking practices, conflicts of interest, unfair or decreased competition, and undue concentration of resources. Based on
the record of the application, and after careful consideration of the comments of the protestants and other
interested parties, the Board finds that the potential
for unsound banking practices, conflicts of interest,
and other adverse effects, is not likely to result from
this proposal under the limitations adopted by Applicant and established by the Board.
820
Federal Reserve Bulletin • October 1987
Unsound Banking Practices. The Board has carefully considered the protestants' allegations with respect
to unsound banking practices. However, the Board
finds that the risk of loss to Applicant would not be
excessive or inconsistent with prudent banking standards. As discussed below, the risk of loss to Applicant is substantially mitigated by the structure and
limitations Applicant has adopted to guard against
possible adverse effects.
Liability on the Options Traded. As explained
above, neither SPOT nor SPOSC would be parties to
the options traded by the participants. Participants
trading options through the system will each enter into
an option contract with GOC, a company unaffiliated
with Applicant and its subsidiaries. 18 Thus, GOC will
assume legal liability to perform all options it writes in
connection with trades effected through the system. 19
Should GOC incur losses in connection with the
system's operation, Bank's letter of credit in favor of
GOC will allow GOC to require Bank to cover the first
$35 million of such losses. 20 However, in the Board's
judgment, the letter of credit arrangements included in
the proposal do not involve an excessive risk of loss to
Applicant. The maximum amount of Bank's liability
under the letter of credit is well within the bank's
lending limit to any individual borrower. 21 Bank must
review the financial condition of each participant to
determine whether it meets the criteria established by
SPOSC before the participant may trade through the
system. Bank will continually monitor the creditworthiness of each participant. The Office of the Comptroller of the Currency, Bank's primary regulator, has
reviewed the terms of the letter of credit and found the
transaction to be consistent with national banking
laws.
18. GOC's parent corporation, GECC, a large financial services
company, will unconditionally guarantee GOC's liability under the
options.
19. GOC's possible liability will be minimized by the fact that for
each option it writes in favor of a participant to a trade, GOC will hold
an offsetting option from the other participant to the trade. If the
holder of the option chooses to exercise the put or call, GOC would in
turn exercise the offsetting put or call with the other participant. If that
participant fails to perform, GOC might incur a loss. The requirements
for maintenance of margin and for substantial financial resources for
participants are designed to minimize the risk of loss in such cases.
20. In authorizing bank holding companies to execute and clear
certain types of options traded on major commodity exchanges, the
Board has required that the parent bank holding company itself may
not become a member of the exchange or clearing association.
12 C.F.R. 225.25(b)(18). This requirement is designed to insulate the
parent from possible contingent and unlimited liability for assessments
by the clearing corporation of members to cover the obligations of any
o t h e r m e m b e r s . See Citicorp,
68 FEDERAL RESERVE BULLETIN 776,
779 (1982). Here, in contrast, none of Applicant's affiliates would be
subject to such assessments.
21. See 12 U.S.C. § 84. Currently the bank's legal lending limit, on
an unsecured basis, is in excess of $280 million.
The protestants assert that the amount of Bank's
letter of credit could be unilaterally increased. However, Applicant has committed that the amount of Bank's
liability under the letter of credit would not be increased without prior review of the Board and the
Comptroller. There are no other agreements that might
affect Applicant's financial liability to GOC or GECC
in connection with the operation of the quotation and
execution system. 22 The Board recognizes, however,
that Bank may extend lines of credit to GOC or its
affiliates that could be used in practice to cover losses
incurred by GOC over and above the $35 million limit
specified in the letter of credit, thereby increasing
Applicant's risk of loss through operation of the system. In order to assure that any risk of loss remains
within the current manageable levels, the Board requires, as a condition of approval of the application,
that any credit extended to GOC or any of its affiliates
be extended under different terms, at different times,
and for different purposes than if GOC had drawn on
the letter of credit. In the Board's opinion, these
safeguards are sufficient to protect Applicant and its
subsidiaries against unwarranted financial loss as a
result of these proposals.
Likelihood of Losses in the System. The protestants
assert that even if the General Electric affiliates, and
not SPOT and SPOSC, have undertaken the direct
credit risk of the system, in the event of catastrophic
or extreme events, such as insolvency of the issuer
and guarantor of the options or computer failure,
Applicant may be held responsible for losses incurred
because of its overall operation of the system, or
because of some negligent act by Applicant. Significant losses suffered by participants, the protestants
argue, could also damage public confidence in Applicant and its subsidiary banks.
In the Board's judgment, however, the possibility
that Applicant might be held responsible for losses
incurred by others trading in the system is extremely
remote. As the Board has previously noted, the functions to be performed by Applicant are functionally
and operationally similar to the functions Applicant
performs in its banking operations, such as retail
brokerage activities. The Board does not believe that
the functions of SPOT and SPOSC with respect to the
operation of the proposed specialized trading system
in options would entail more risk of being held liable
for losses suffered by customers or of damage to the
22. As explained below, SPOT and SPOSC would adopt a series of
safeguards to minimize the risk that options traded through the system
would result in losses to GOC for which Bank would become liable
under the letter of credit.
Legal Developments
reputation of affiliated banks than the functions performed by banking organizations in conducting these
similar activities. 23 In any event, Applicant has proposed a number of safeguards to prevent signficant
trading losses. Applicant has committed that without
prior Board review:
(1) the aggregate "matched book" amount of
Treasury securities underlying all options outstanding in the system at any time will not be permitted to
exceed $15 billion; and
(2) the maximum potential system exposure (the
calculation of the "worst case" possible overnight
exposure of GOC and GECC) will be monitored
daily and will not exceed the lesser of $60 million or
200 percent of the available outstanding balance of
the letter of credit. Trading limits would also be
imposed on each participant, tied to the aggregate
margin obligations that a participant would be permitted to incur.
Applicant has also made commitments to ensure
that SPOT and SPOSC will remain adequately capitalized. SPOT and SPOSC initially will each have $1
million in capital, and twice each year capital will be
adjusted so that the combined capital of SPOT and
SPOSC will be at least 10 percent of the average
maximum potential system exposure for the prior six
months. In addition, Applicant has, in its procedures
for the system, in the contractual provisions under
which it would act as agent for participants, and in its
insurance coverage, taken steps to keep the potential
liability of SPOT and SPOSC to a minimum. 24
The Board has also considered the protestants'
allegations that the likelihood of substantial losses on
23. The CBOT contends that Applicant has not shown the ability to
conduct the proposed activities, pointing to allegations that another
securities clearing subsidiary of Applicant in New York failed to
discover certain fraudulent practices by a government securities
dealer using those services that led to the failure of that dealer. The
Board notes that these allegations are the subject of pending litigation.
However, these assertions are not relevant here because as a result of
the Government Securities Act of 1986, which was not in effect at the
time of these alleged practices, SPOSC would be required to register
as a clearing agency under section 17A of the Securities Exchange Act
and the rules of the SEC issued pursuant to this section. These rules
are designed to prevent fraudulent practices in the performance of
clearing activities.
24. Protestants also allege that, to avoid incurring losses in particular options traded, participants might argue that the options were
traded on an unregistered exchange in violation of the Securities
Exchange Act and, therefore, are void under section 29 of that Act. It
is unlikely that such an eventuality would result in such significant
liability in connection with the system that it would adversely affect
Applicant or its subsidiaries. Even if the courts were to determine that
the options were unlawful because they were traded on an unregistered "exchange," the courts nevertheless have refused to allow a
party to such a contract to obtain an unfair advantage by attempting to
have the contract voided.
821
options traded through the system is particularly significant here because certain of the specific financial
safeguards of the system, the margin system, trading
limits and enforcement of other limits against system
participants, are inadequate. However, given that Applicant's direct liability for system losses is strictly
limited to the letter of credit from Bank, the Board
cannot conclude that the proposed design of the system would result in undue risk to Applicant.
In particular, protestant the Chicago Mercantile
Exchange asserts that SPOSC will not be able to
compute accurate margin requirements because there
is little secondary trading in many of the options
traded in the system or in the underlying securities for
such options and thus current market prices will not be
available. However, Applicant represents, and the
protestants have not disputed, that SPOSC will rely in
establishing margin on a pricing model developed by
an independent consultant based on an option pricing
model used by many primary dealers and other financial institutions. Applicant has described in reasonable
detail the methods to be employed in computing
required margin and the Board is unable to conclude
that the proposed margin procedures are so inadequate
as to present an excessive risk of loss to Applicant or
its subsidiaries. 25
Protestants also allege that the quotation and execution system would involve inordinate risk of loss
because the system would not be subject to the
regulatory requirements of the securities laws applicable to securities exchanges. To the extent these allegations raise concerns about the protection of investors
trading the options, the Board notes that Congress has
allocated responsibility for protecting participants in
the nation's securities markets to the SEC under the
provisions of the Securities Exchange Act. As explained above, the Commission's staff believes that at
least at this time Applicant need not comply with the
requirements applicable to securities exchanges under
that law. The Board does not believe that it should
substitute its judgment for that of the SEC or its staff in
this critical area of SEC responsibility.
Moreover, the fact that the proposed system will not
be registered as an exchange with the SEC in no way
implies a lack of regulatory supervision. By virtue of
the Government Securities Act of 1986, SPOSC will be
subject to SEC regulation applicable to clearing agencies. Section 17A(b)(3)(F) of the Securities Exchange
25. Applicant has also explained that enforcement of trading position limits against participants by rejecting trades that exceed such
limits would not interfere with any trading strategy by the participants
involved because parties to a rejected trade would be notified of this
fact immediately.
822
Federal Reserve Bulletin • October 1987
Act (15 U.S.C. § 78q-1(b)(3)(F)) requires clearing
agencies to adopt rules that are similar to the regulatory scheme imposed on securities exchanges. 26 Included in the SEC's extensive oversight responsibility
over clearing agencies is the requirement that each
agency have adequate disciplinary procedures to enforce its internal rules. In addition, under the Government Securities Act of 1986, SPOT must register with
the SEC as a government securities broker. As a
result, SPOT will be subject to the financial responsibility and other rules promulgated by the Department
of Treasury under that Act. In addition, as a condition
of the SEC staffs no-action position on applicability of
regulations governing exchanges, the staff has stated
that it will continue to review the operation of the
system. In addition, the Board will continue to monitor Applicant, SPOT, and SPOSC after consummation
through the bank holding company inspection process.
Conflicts of Interest. The Board has also considered
whether the proposed system would result in conflicts
of interest, including those suggested by the protestants relating to access to confidential information,
possible insider trading, impairment of credit judgment, a "salesman's stake" and possible trading for
the account of public investors. Given the limitations
on the activity and the restrictions adopted by Applicant as discussed below, the Board believes there
would not be a significant potential for conflicts to
arise from the proposal.
Use of confidential or inside information.
The
Board notes that Bank will have access to confidential
information concerning the financial condition of participants in the system in order to assure their creditworthiness. Applicant also deals in government securities for its own account as a primary dealer. However,
the Board finds no potential that this confidential
customer information obtained in connection with
Applicant's proposal would be misused. Banking and
nonbanking subsidiaries of bank holding companies
routinely obtain such information in their traditional
fiduciary, lending and permissible securities brokerage
and clearing activities. Applicant has committed that it
will implement procedures to assure the confidentiality of any information it obtains by virtue of its role in
26. These rules must be designed "to promote the prompt and
accurate clearance and settlement of securities transactions, to assure
the safeguarding of securities and funds which are in the custody or
control of the clearing agency or for which it is responsible, to foster
cooperation and coordination with persons engaged in the clearance
and settlement of securities transactions, to remove impediments to
and perfect the mechanism of a national system for the prompt and
accurate clearance and settlement of securities transactions, and, in
general to protect investors and the public interest; and are not
designed to permit unfair discrimination in the admission of participants or among participants in the use of the clearing agency. . . . "
15 U.S.C. § 78q-l(b)(3)(F).
the system so that credit information concerning participants is not disclosed to those engaged in Applicant's primary dealer or capital markets activities.
Moreover, in performing the proposed services,
SPOT and SPOSC will obtain up-to-date information
concerning trading in options by participants in the
system and their overall market strategies. The protestants allege that Applicant may use this market information obtained by SPOT and SPOSC in trading for its
own account, especially if Applicant's government
securities dealer operation trades options through the
system.
Applicant has committed that its government securities dealer operation will not execute trades through
the options system without first providing Board staff
an opportunity to review the proposed participation.
While this limitation serves, at least at this time, to
minimize possible conflicts of interest, the Board does
not believe this limitation alone is adequate to eliminate all potential conflicts. Accordingly, the Board
requires as a condition of its approval of the application, that Applicant establish procedures to assure that
information obtained by personnel of SPOT and
SPOSC relating to the trading of options through the
quotation system is not transmitted in any manner to
those individuals involved in Applicant's government
securities dealing operations. 27
Impairment of credit judgment. The Board also
considered the possibility that the operation of the
system could tempt Bank or Applicant's other lending
subsidiaries to extend unsound credit, for example, to
support the creditworthiness of a participant in order
to permit it to trade in the system. The Board notes
that the possibility of this type of unsound lending is
mitigated to some extent by the insulation of the
proposed system from the credit operations of Applicant's separate lending subsidiaries.
The likelihood of impairment of credit judgment is
also limited by the lack of incentive for unsound
extensions of credit to participants or to the GE
affiliates. Incurring such risk would be fundamentally
inconsistent with Applicant's deliberate structuring of
the system to minimize risk to itself. Moreover,
SPOT's and SPOSC's activities would account for
only a small portion of Applicant's banking and nonbanking operations.
27. In Compagnie Financiere de Suez, 72 FEDERAL RESERVE
BULLETIN 141 (1986), the Board recognized the potential conflicts
between a company's trading in foreign exchange for its own account
and its role as a specialist in foreign currency on the floor of an
exchange. However, the Board's disapproval of that proposal was
based in large part on the fact that a specialist must trade for its own
account in order to create an orderly market for the security involved,
which SPOT and SPOSC will not do.
Legal Developments
In addition, Applicant has committed that Bank will
not extend credit to any participant in the system for
the sole identifiable purpose of meeting margin requirements on options traded through the system. The
Board believes, however, that Applicant's lending
subsidiaries might nevertheless have an incentive to
extend credit that indirectly would be used to finance a
participant's obligations arising out of the options
system. Thus, the Board requires as a condition of its
approval of this application that any credit extended to
system participants by Applicant's lending subsidiaries be on different terms, at different times, and for
different purposes than if the subsidiary lent funds
directly to cover the participant's margin call.
Promotional interest of Applicant. With respect to
the protestants' allegation that Applicant would have a
promotional interest in the system, the Board notes
initially that the BHC Act and the Glass-Steagall Act
do not prohibit a bank holding company from promoting permissible nonbanking services. The Board has,
however, carefully considered whether Applicant
would acquire a "salesman's interest" that would be
likely to impair Applicant's provision of fiduciary or
other services to customers.
The possibility that such a conflict of interest might
arise is minimized by the fact, as previously noted,
that Applicant's role will be limited to acting as agent
to execute and clear options contracts negotiated by
third party participants. For these services, Applicant's subsidiaries will receive brokerage commissions
and other transaction-based fees from participants.
Applicant will not have the investment stake and risk
of an underwriter or dealer in the specific options
securities.
Trading by participants for the account of customers. The protestants also allege that participants in
Applicant's system would be subject to a conflict of
interest if the participant begins to trade options for
the account of its own customers as well as for its own
account. The Board notes that this would not present a
conflict of interest issue with respect to Applicant,
since Applicant would not trade on the system.
In addition, as previously noted, unlike standardized options currently traded on exchanges, the options to be traded in the system will be customized to
the particular needs and investment strategies of the
participants or their customers. Accordingly, it does
not appear to the Board that there is anywhere near
the same potential for conflicts of interests between
participants and their customers as are present in the
case of standardized options traded on exchanges, i.e.,
it is considerably less likely that a participant and its
customer would seek to purchase or sell an identical
option in the same time frame. Thus, as a practical
matter, it would be much more difficult for a partici
823
pant to trade ahead of its customer or allocate the best
price on an identical option to the participant's own
account. Furthermore, in view of the highly sophisticated business acumen of investors that are likely to
be drawn to this market, the Board does not believe
that investors would continue to use the services of
any participant that executes orders to its own advantage over that of its customers.
Unfair or Decreased Competition. Applicant seeks
to engage de novo in the proposed brokerage, clearing,
and related activities. Thus, the proposal does not
involve a combination of existing competitors or the
elimination of any existing provider of services and
would not result in any decreased competition.
The Board has also carefully considered the protestants' argument that approval would result in unfair
competitive advantages. The protestants allege that
Applicant would have a competitive advantage over
the protesting exchanges in, for example, not being
subject to regulation as an exchange and in enjoying
"safety net" guarantees from the federal government
because SPOT and SPOSC would be affiliated with
federally insured banks. In addition, protestants allege
that because Applicant and the system participants
would have access to the quotes for options traded
through SPOT and SPOSC, they would enjoy an unfair
competitive advantage over non-participants in the
overall government securities markets. The Board
finds that this proposal would not result in unfair
competition for the following reasons.
Any advantage SPOT and SPOSC might obtain from
not having to comply with all of the regulatory requirements applicable to a securities exchange under the
securities laws results solely from the fact that the staff
of the SEC has decided, at least at the present, not to
initiate enforcement action to require compliance with
these requirements. 28 As the Board has previously
noted, disparities or advantages based on the legal
structure governing the conduct of specific activities
are not the kind of factors Congress intended the
Board to assess as unfair competition in section
4(c)(8). 29 Moreover, as discussed above, Applicant,
while it is subject to a different regulatory framework
than the framework for securities exchanges, is not
free from regulation in the conduct of the proposed
activity.
With respect to protestants' claim concerning unfair
advantage based on the federal "safety net" guarantees for banks, there is no evidence that SPOT or
28. The staff's decision was at least tacitly approved by members of
the Commission. See transcript of meeting of SEC on August 8, 1986.
29. BankAmerica
Corporation!Schwab,
B U L L E T I N 1 0 5 , 111 ( 1 9 8 3 ) .
69
FEDERAL
RESERVE
824
Federal Reserve Bulletin • October 1987
SPOSC, or the participants who would use their
services, would enjoy any unfair advantage resulting
from those federal guarantees. SPOT and SPOSC are
nonbanking subsidiaries of a bank holding company,
legally separate and apart from Applicant's subsidiary
banks. Accordingly, they would not have access to
funding from federally insured deposits or the Federal
Reserve's discount window, and transfers to SPOT
and SPOSC from banking affiliates would be subject to
the lending limitations and collateral requirements of
the Federal Reserve Act. 3 0
The Board also finds that Applicant's control over
membership in the system and thus its access to
quotes and other trading information disseminated
through the system will not result in unfair or decreased competition in the government securities markets. While access to participation in the system and
thus to the market information that would be disseminated through it is limited, the limitation on participation does not represent the type of unfair or unethical
business conduct (as defined by common law or under
state or federal law) that constitutes unfair competition
under the BHC Act. BankAmericalSchwab,
69 FEDER-
finds the possibility of voluntary tying would be remote given that eligibility to use SPOT's and SPOSC's
services is determined by pre-established and objective financial criteria and the dealers and other investors may use a number of sources of options and other
risk reduction services, including the exchanges and
the over-the-counter markets.
Undue concentration
of resources. The Board has
carefully considered the possibility, alleged by the
protestants, that the proposal would result in an undue
concentration of resources. The Board finds that the
proposal is unlikely to lead to any such possible
adverse effects.
The Board has previously noted that Applicant will
enter into the proposed activity de novo; no acquisition of significant financial assets by Applicant is
involved. Moreover, the addition of Applicant as a
provider of options services to dealers and investors in
U . S . government securities would promote deconcentration in the market for trading in options contracts
and other forms of risk reduction used by dealers and
investors.
AL RESERVE BULLETIN at 110.
III. Glass-Steagall
SPOSC has specified the criteria for determining
membership in the system, and these criteria relate
solely to capital adequacy and financial responsibility
standards that are essential in a system where participants trade without knowledge of the identity of the
contra party. 31 Moreover, there is no restriction
against the disclosure of quotation information by
participants to third parties.
Moreover, the possibility that access to the system
might be tied to the use of other products or services
offered by Applicant or its subsidiaries is also not a
likely adverse effect. An explicit attempt to tie services or products by Applicant would be unlawful
pursuant to the anti-tying provisions of the Bank
Holding Company Act Amendments of
1970
(12 U . S . C . §§ 1971-72). The Board has also considered the possibility of more subtle tying that might
occur when implicitly coerced joint sales of Applicant's products result from a customer's belief that he
or she stands a better chance of obtaining a scarce
product by purchasing another product or service from
the same seller. Where products or services are in
ample supply, such tie-ins are unlikely. The Board
The Board has also considered the protestants' arguments that this proposal would violate the Banking Act
of 1933 ("Glass-Steagall Act"), which restricts the
securities underwriting and similar activities of banks
and their affiliates.
As is relevant here, section 20 of the Act prohibits
the affiliation of a member bank with a firm that is
"engaged principally . . . in the issue, flotation, underwriting, public sale, or distribution" of securities.
12 U.S.C. § 377. Protestants allege that SPOT and
SPOSC will be affiliates of Bank, a member bank, and
that they would be engaged principally in issuing and
underwriting the options traded through the quotation
and execution system. The Board concludes that the
proposed activities of SPOT and SPOSC would not
violate the terms of the applicable Glass-Steagall Act
provisions. SPOT and SPOSC will not, in the Board's
view, be engaged in issuing or underwriting securities,
or any similar activity restricted by section 20. 32
An "issuer" of a security is generally considered to
be the entity that creates the rights and obligations
30. See 12 U.S.C. §§ 371c, 375b, 1828(j); 12 C.F.R. 215.4(a).
31. Although the Board noted in Liberty Brokerage that the Department of Justice was investigating the possibility of restraint of trade
under an arrangement between interdealer brokers that would limit
access to primary dealers, that concern does not arise here because
participation is open to any qualified entity, not just primary dealers.
Act
32. Options on U.S. government securities are deemed to be
"securities" and futures on U.S. government securities are deemed to
be "commodities" for purposes of the 1982 "Accord" amendments to
the Securities Exchange Act and the Commodity Exchange Act
dividing the regulatory jurisdiction of the SEC and the CFTC over
options and futures instruments the trading in which is regulated by
these agencies. 15 U.S.C. § 77b; 7 U.S.C. § 2(a). In defining the
scope of the term "securities" used in provisions of the Glass-
Legal Developments
reflected by the security and makes the initial transfer
of the security to another. 33 Under this proposal,
however, GOC is the sole issuer of the options. When
participants anonymously agree upon terms, GOC will
write options with the participants on the negotiated
terms, creating rights in the participants that are
enforceable only against GOC (or, contingently,
against GECC, the guarantor of the options issued by
GOC). Neither SPOT nor SPOSC will be a party or
undertake any liability with respect to the options
contracts.
In addition, the protestants maintain that the proposal would render Applicant an "underwriter" of
options. In the ordinary meaning of the term, an
underwriter purchases a new issue of securities from
the issuer at a stated price and then resells them to the
public. 34 The term "underwriter" can also refer to a
person who undertakes to offer securities to the public
acting only as agent on behalf of an issuer. 35 SPOT and
SPOSC will act as execution and clearing agents at the
direction of the participants that wish to enter into
contracts that they negotiate with each other through
the use of computer screens and telephone communications. SPOT and SPOSC will not make any offer of
options contracts on behalf of the issuer, GOC. In
addition, SPOT and SPOSC will not perform the
typical functions of an underwriter—such as marketing, setting the price for an issue, purchasing a part of
an issue if it cannot be sold to the public, and agreeing
to use best efforts to distribute an issue. Nor will
SPOT or SPOSC be engaged in dealing in the contracts
within the meaning of section 20, since they will not
purchase any contracts for their own accounts. 36
The Board has also considered the protestants'
allegations that in economic reality Applicant should
nonetheless be considered the issuer or underwriter of
Steagall Act, the Supreme Court found relevant the statutory definition of "security" in the securities laws enacted at the same time as
Glass-Steagall in Securities Industry Association v. Board of Governors (Bankers Trust /), 468 U.S. 137 (1984). It is unresolved whether
the 1982 "Accord" amendment to the Securities Exchange Act of
1934 would be as relevant. The Board does not reach this issue and
assumes, for purposes of its analysis of the application of the GlassSteagall Act here, that the options contracts issued by GOC are
securities.
33. See section 2(4) of the Securities Act of 1933 (15 U.S.C.
§ 77b(4)); Federal Reserve Board Staff Study, Commercial Bank
Private Placement Activities 86 (1977).
34. Securities Industry Ass'n v. Board of Governors (Schwab), 468
U.S. 207, 217-18 & n.17 (1984).
35. Federal Reserve Board, Statement Concerning Applicability of
the Glass-Steagall Act to the Commercial Paper Placement Activities
of Bankers Trust Company (June 4, 1985), 22. The courts have left
open the question of whether this "best efforts" underwriting is
covered by the Act. See Schwab, 468 U.S. at 218 n.17.
36. Citicorp/J.P. Morgan & Co. Incorporated/Bankers Trust New
York
Corporation,
7 3 F E D E R A L RESERVE B U L L E T I N 4 7 3 , 4 8 1 ( 1 9 8 7 ) .
825
the options because Applicant would be a partner in
GOC in a joint venture to issue the options and
because Bank's letter of credit to GOC at least in part
guarantees GOC's obligation on the options. Applicant
will, however, maintain an arms-length contractual
relationship with GOC and GECC under which these
entities will receive a share of fees generated from
options transactions. Under this proposal, Applicant is
not acquiring an equity interest in GOC or GECC, and
those entities are not acquiring an equity interest in
Applicant or any of its subsidiaries. Accordingly, the
Board is unable to conclude that these separate entities are jointly engaged in the issuance or underwriting
of options contracts.
Moreover, the Board has concluded that Bank's
issuance of a letter of credit to GOC would not make
Bank an "underwriter" of securities within the meaning of the Glass-Steagall Act. It is clear that Bank
makes no offer of options contracts on behalf of the
issuer and would not acquire the options contracts.
Under this proposal, Bank's letter of credit is a
contractual arrangement, separate from the option
contracts, under which Bank agrees to pay GOC in the
event of participants' defaults up to the amount of the
letter of credit. The Board notes that for many years
banking organizations have entered into contractual
arrangements to guarantee the obligations of issuers of
securities. These credit arrangements have never been
understood to be violations of the provisions of the
Glass-Steagall Act.
Protestants also allege that the proposal would violate the policy of the Glass-Steagall Act, giving rise to
certain of the "subtle hazards" the Act seeks to
eliminate (relating to possible damage to the reputation
of Applicant's banking affiliates or a salesman's interest that might lead to unsound credit practices). However, the "subtle hazards" have never alone caused
the Supreme Court to hold that an activity violates or
is permitted by the Glass-Steagall Act. The analysis of
such hazards only reinforced the Court's conclusion
that the activity in question was permitted or prohibited as a matter of statutory interpretation of the plain
meaning of the terms of the Act. 37 As explained above,
the activities of SPOT and SPOSC do not fall within
the plain meaning of the Glass-Steagall Act prohibitions.
Moreover, the Board has considered the alleged
hazards in its evaluation of the proposal under section
4(c)(8) of the BHC Act and has for the reasons
37. Securities Industry Association v. Board of Governors,
F.2d 1052, 1069 (D.C. Cir. 1986), cert, denied, 55 U.S.L.W.
(1987). See, e.g., Investment Company Institute v. Camp, 401
617 (1971); Board of Governors v. Investment Company Institute,
U.S. 46 (1981); Bankers Trust I; Schwab.
807
3853
U.S.
450
826
Federal Reserve Bulletin • October 1987
explained above concluded these hazards would be
unlikely, given the limitations on the proposed activity, which include restrictions on the involvement of
Applicant's banking affiliates in the proposal.
IV. Request for Formal Hearing
Each of the protestants has requested that the Board
conduct a formal evidentiary hearing with respect to
this proposal. Section 4(c)(8) of the BHC Act specifies
that the Board provide "due notice and opportunity
for hearing" before approving any application under
that section. The Board's Regulation Y provides that
the Board will order a hearing on a proposal under
section 4(c)(8) "only if there are disputed issues of
material fact that cannot be resolved in some other
manner." 12 C.F.R. 225.23(g). This standard incorporates the criteria established by the courts for determining when a hearing must be held with respect to a
section 4(c)(8) proposal. As the courts have stated,
[A] protestant does not become entitled to an evidentiary
hearing merely on request, or on a bald or conclusory
allegation that . . . a dispute exists. The protestant
must make a minimal showing that material facts are in
dispute, thereby demonstrating that an inquiry in depth
is appropriate.
Connecticut Bankers Ass' n v. Board of Governors, 627
F.2d 245, 251 (D.C. Cir. 1980).38
After reviewing the protestants' requests for hearing, the Board concludes that the protestants have
failed to demonstrate that facts material to the Board's
decision on this proposal are disputed. Applicant has
described in detail the manner in which the activities,
which would be initiated de novo, are to be conducted. The Board's approval of this proposal extends only
to the facts described by Applicant. 39
Each of the protestants has submitted a list of
alleged factual issues in dispute, but in the Board's
view a careful examination of these issues reveals that
none of the protestants dispute any of the facts material to the Board's decision in this case. Accordingly, a
formal evidentiary hearing in this case would serve no
purpose and is not required.
The alleged issues of material fact identified by the
protestants fall into three general categories. In the
first category are issues relating solely to questions of
law or to the ultimate conclusions the Board must
38. See Independent Bankers Ass'n of Georgia v. Board of Governors, 516 F.2d 1206, 1220 (D.C. Cir. 1975) (an agency is not required
to conduct an evidentiary hearing if interested parties disputed none of
the material facts on which the agency's decision could rest).
39. See 12 C.F.R. 225.23(b)(3).
reach in applying the terms of the BHC Act. 4 0 These
types of issues do not dispute any statements of fact
and clearly do not warrant the conduct of an evidentiary hearing in order to resolve.
The second category of alleged factual disputes
involves questions that seek additional information
with respect to the manner in which the proposed
activities would be conducted. 4 1 To the extent these
requests for additional information are material to
issues the Board must consider, 4 2 those requests do
not dispute any facts already in the record. Some of
the areas of inquiry raised by these questions have
been responded to by supplemental information in the
record. 43 In any event, it is the Board's judgment, for
the reasons explained above, that the proposed activities have been described in sufficient detail to allow
the Board to consider the activity under the applicable
statutory standards.
Of particular significance with respect to these suggested inquiries is the fact that Applicant's proposal
involves proposed new activities. Any formal hearing
on the issues proposed by the protestants would
necessarily inquire exclusively into future conduct,
which cannot, even under the most exhaustive adjudicatory procedures, be predicted with accuracy. There
is no reason to believe that, if a hearing were conducted on this proposal, Applicant's witnesses would
testify that the proposed activities would be conducted
other than as described in Applicant's written submissions in the record. Moreover, in this case there is no
40. Included in this category are questions relating to whether the
proposed activities go beyond permissible activities approved for
brokers or clearing agents, whether Applicant or its subsidiaries
would be subject to contingent liability for losses sustained by GOC or
by system participants, and whether there is a private right of action
for violation of the Securities Exchange Act provisions requiring
registration of securities exchanges.
41. Included within this category are questions related to whether
the amount of Bank's letter of credit to GOC would be increased, what
procedures would apply to protect against abusive trading practices,
whether market information obtained by SPOT and SPOSC would be
used by Applicant in trading for its own account, whether nonparticipants would have access to quotations disseminated throughout the system, what safeguards will protect customers of participants
if participants also trade for the account of customers, what criteria
will be used in determining what institutions may be participants, and
whether SPOT and SPOSC personnel would have working relationships with other affiliates of Applicant.
42. As explained above, for example, since Applicant will assume
direct liability for only the first $35 million of losses connected with
the system, questions related to the detailed specific measures for
preventing losses are of only marginal relevance since it is highly
unlikely that Applicant would be held liable for trading losses incurred
by system participants or GOC.
43. For example, Applicant has committed that the amount of
Bank's letter of credit in favor of GOC would not be increased without
further supervisory approval.
Legal Developments
record of past conduct of the activities at issue that
could be used to challenge Applicant's testimony. 4 4
The third category of asserted factual disputes involves questions calling for some judgment or prediction with respect to the operation of the proposed
activity, such as whether the margin and market risk
procedures to be used by the system will be adequate,
whether trading limits imposed would be adequate,
and whether self-imposed limitations on insider trading would be sufficient. 45 Such inquiries are not designed to dispute facts in the record or even to elicit
new facts. Rather than challenging existing facts, these
questions call into question inferences and opinions
drawn from the undisputed facts. 4 6 A formal hearing is
unnecessary to resolve these kinds of issues. Accordingly, the protestants' requests for a hearing are denied.
Conclusion
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 BHC Act, is
favorable. Accordingly, the application is hereby approved.
The Board notes that Congress has under consideration legislation (Conf. Rep. N o . 100-261) that provides that the Board may not allow by action, inaction,
827
or otherwise, any bank holding company or subsidiary
or affiliate thereof to engage in the operation of a
nondealer marketplace in options, between March 6,
1987, and March 1, 1988. The Board calls Applicant's
attention to these provisions and notes that the Board
retains jurisdiction over the application to act to carry
out the requirements of such legislation at such time as
they may become law.
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 BHC 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 San
Francisco.
By order of the Board of Governors, effective
August 5, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, and Kelley. Absent and not
voting: Chairman Volcker.
JAMES MCAFEE
[SEAL]
Associate
Secretary
of the Board
Trustcorp, Inc.
Toledo, Ohio
44. In this respect, the application here differs fundamentally from
other cases in which a hearing has been ordered by the courts. E.g.,
American Bancorporation v. Board of Governors, 509 F.2d 29 (8th
Cir. 1974) (acquisition of going concern that was already conducting
the proposed activity).
45. A number of the alleged issues on which a hearing is allegedly
required are immaterial to the issues the Board must consider, such as
whether the proposed activities constitute a securities market.
46. There is no merit to the protestants' contention that Applicant
has withheld from the Board meaningful information relating to its
proposal or that the Board has withheld such information from the
protestants. Applicant, in connection with the submission of its
proposal for Board consideration, provided extensive documents
describing the proposed system in substantial detail. Copies of all of
these documents were made available to protestants without delay
with one exception—a document containing the proprietary, technical
design specifications for SPOT and SPOSC. The Board determined
not to make that document public because the document contained
confidential commercial or financial information which is exempt from
public disclosure pursuant to 5 U.S.C. § 552(b)(4) and because
disclosure, while not necessary for meaningful comment in light of all
the other documents submitted by Applicant that explained each
aspect of the system, would be likely to cause substantial harm to the
competitive position of Applicant.
Order Denying Application to Retain Shares of a
General Insurance
Agency
Trustcorp, Inc., Toledo, Ohio, a registered bank holding company within the meaning of the Bank Holding
Company Act ( " B H C Act") (12 U.S.C. § 1841
et seq.), has applied for the Board's approval under
section 4(c)(8)(G) of the BHC Act (12 U.S.C.
§ 1843(c)(8)(G)) and section 225.25(b)(8)(vii) of Regulation Y (12 C.F.R. § 225.25(b)(8)(vii)) to retain
shares of St. Joseph Insurance Agency, Inc., South
Bend, Indiana ("Agency"), a company that proposes
to engage in general insurance agency activities on a
nationwide basis.
Notice of this application, affording opportunity for
interested persons to submit comments, has been duly
published (51 Federal Register 37,237 (1986)). The
time for filing comments has expired, and the Board
828
Federal Reserve Bulletin • October 1987
has considered all comments received 1 in light of the
public interest factors set forth in section 4(c)(8) of the
BHC Act.
On December 1, 1986, the Federal Reserve Bank of
Cleveland ("Reserve Bank"), acting pursuant to delegated authority, approved Applicant's application under section 3 of the BHC Act to acquire St. Joseph
Bancorporation, Inc., South Bend, Indiana ("St. Joseph"). Action on Applicant's section 4 application to
engage in general insurance activities through St.
Joseph's insurance agency subsidiary, Agency, was
deferred in order to permit the Board to more fully
consider the question of Agency's authority to engage
in general insurance agency operations pursuant to
exemption G of Title VI of the Garn-St Germain
Depository Institutions Act of 1982 ("Garn-St Germain Act"). (12 U.S.C. § 1843(c)(8)(G)).
Title VI of the Garn-St Germain Act amended
section 4(c)(8) of the BHC Act to provide that the
Board may not determine insurance agency and underwriting activities are closely related to banking, and,
therefore, permissible for bank holding companies.
Title VI provided seven specific exemptions to this
general prohibition, however, including exemption G,
which permits bank holding companies to engage in
insurance agency activities "where the activity is
performed or shares of the company involved are
owned, directly or indirectly, by a bank holding company . . . which, prior to January 1, 1971, was engaged, directly or indirectly, in insurance agency activities as a consequence of approval by the Board
. . . ." 12 U.S.C. § 1843(c)(8)(G).2
St. Joseph Bancorporation is one of a small group of
companies that potentially qualify for exemption G
rights because in 1961 the Board approved the application of St. Joseph Agency, Inc., a predecessor to St.
Joseph, to engage in general insurance agency activi-
1. The following insurance trade groups ("Protestants") have filed
comments in opposition to the proposed transaction: the Independent
Insurance Agents of America, Inc.; the National Association of
Casualty and Surety Agents; the National Association of Surety Bond
Producers; the National Association of Life Underwriters; and the
National Association of Professional Insurance Agents.
The following commenters support Applicant's claim to acquire
Agency and its grandfather rights: Mellon Bank, N.A.; First Security
Corporation; Insurance/Financial Affiliates of America, Inc.; Insurance/Banking Council of America; First Virginia Bank, Inc.; United
Banks of Colorado Inc.; Bremer Financial Corp.; Norwest Corporation; and First Bank System.
2. On October 3, 1986, the Board amended its Regulation Y
(12 C.F.R. § 225.25(b)(8) (1987)) to include the insurance agency
activities delineated in the seven exemptions to the Garn-St Germain
Act among the list of activities which the Board has found to be
closely related to banking and thus permissible for bank holding
companies under section 4(c)(8) of the BHC Act. 51 Federal Register
36,201 (1986).
ties. 3 Agency continued to engage in insurance agency
activities pursuant to this Board approval until June
30, 1982. On that date, several months before passage
of the Garn-St Germain Act, Agency sold its accounts, books, records, customer lists and goodwill
associated therewith, to another local insurance agency. In connection with this transaction, Agency entered into a five-year non-compete agreement with
that agency covering the local St. Joseph County
market. That agreement required that Agency refer all
insurance agency business in the St. Joseph market to
the purchasing agency for a fee, but allowed Agency to
conduct business outside of St. Joseph County. Despite the sale of its assets in June 1982, Agency has
maintained its status as a corporation in good standing
as well as its license to engage in general insurance
agency business under the laws of Indiana. Agency
also has retained officers and directors, rented office
space and produced periodic financial reports. Agency
has employed no full-time personnel, but occasionally
has hired a part-time insurance consultant. 4
The most significant issue presented by this proposal is whether such exemption G grandfather rights as
St. Joseph and Agency may possess may be retained
after Agency's acquisition by Applicant. In the
Board's view, analysis of this issue must begin with
the fact that Applicant is seeking to acquire a company
engaged in a nonbanking activity—operation of a
general insurance agency—and section 4 of the BHC
Act prohibits a bank holding company from making an
acquisition of a nonbanking company unless the acquisition falls within one of the exceptions to the general
prohibition of section 4. The principal exception to this
prohibition is section 4(c)(8) which permits the acquisition of nonbanking companies engaged in activities the
Board has determined are "closely related to banking". Section 4(c)(8), however, contains a specific
restriction on insurance activities, providing that such
activities are not "closely related to banking." Thus,
3. St. Joseph
Agency,
Inc.,
47 FEDERAL RESERVE BULLETIN 290
(1961). Between 1961 and 1982, St. Joseph undertook several corporate reorganizations which resulted in Agency converting from a
direct subsidiary of the bank holding company to a direct subsidiary of
St. Joseph Bank and Trust Company ("Bank"), St. Joseph's subsidiary bank.
4. The Board recognizes that Applicant's claim to succeed to
Agency's exemption G grandfather rights is based on the presumption
that Agency itself has such grandfather rights. Protestants contend
that Agency discontinued its insurance activities by virtue of its June
1982 sale of assets. As a result, Protestants argue that Agency has
forfeited its grandfather rights.
Applicant, on the other hand, notes that exemption G imposes no
requirement that a qualifying company be "continuously engaged" in
insurance activities from that date of Board approval. The Board has
determined that Agency's grandfather rights lapsed when St. Joseph
was acquired by Applicant, and, therefore, the Board has not found it
necessary to decide this issue.
Legal Developments
under the literal terms of section 4 of the BHC Act,
Applicant may not acquire Agency because it is engaged in an impermissible activity—operation of a
general insurance agency.
Applicant attempts to avoid this general prohibition
against nonbanking activities in section 4 and the
specific limitation on insurance activities in section
4(c)(8) by arguing that it may rely on exemption G of
section 4(c)(8). This provision by its terms does not
apply to Applicant, however, because Applicant was
not engaged prior to January 1, 1971, directly or
indirectly, in insurance agency activities as a consequence of Board approval. Applicant nevertheless
contends that Agency and St. Joseph retain eligibility
under exemption G, and that Applicant's indirect
ownership of Agency is irrelevant to this determination. Applicant argues that St. Joseph does not forego
its status as a "grandfathered" bank holding company
even after it becomes a subsidiary of a nongrandfathered entity. In the Board's view, this argument incorrectly focuses on whether St. Joseph itself continues
to qualify for exemption G grandfather benefits, and
ignores the more fundamental question whether Applicant may acquire a company engaged in otherwise
impermissible insurance agency operations.
As the Board has previously noted, the prohibitions
in section 4 against nonbanking activities apply to all
bank holding companies, and each bank holding company must independently qualify under some provision of section 4 in order to undertake a nonbanking
endeavor. 5 Thus, regardless of whether the BHC Act
permits Agency or St. Joseph to engage in grandfathered insurance operations, Applicant, as an acquiring
bank holding company, also must comply with the
nonbanking restrictions of the BHC Act.
The Board notes that the unrestricted nature of
exemption G rights prevents the Board as a practical
matter from viewing such rights as attaching only to
the exemption G company without effect on the acquiring nongrandfathered bank holding company. Exemption G rights permit Agency to engage in the sale
of all types of insurance to the general public from any
location. Agency, for example, could operate in every
office of Applicant and could solicit every customer of
Applicant for any type of insurance. There is little
distinction between Agency conducting such activities
and Applicant conducting them directly. Moreover,
given the scope of exemption G rights, the resources,
size and office network of a larger company could
greatly expand the range of insurance agency activities
of an exemption G company. There is no indication
5. See, e.g., Maryland National
SERVE B U L L E T I N 3 1 0 ( 1 9 8 7 ) .
Corporation,
73 FEDERAL RE-
829
that Congress, which enacted Title VI to limit the
scope of insurance powers that could be exercised by
bank holding companies, intended the substantial
powers of exemption G should be exercised by companies with the potential to expand so significantly the
scope and amount of insurance sold and the locations
from which such insurance is offered.
Moreover, Applicant's claim to preserve Agency's
exemption G grandfather rights would run counter to
the Board's general position that grandfather rights
under section 4 of the BHC Act are to be narrowly
construed, and that the applicant itself, and not only
the proposed bank holding company subsidiary, must
qualify for any exemption from the nonbanking prohibitions of the BHC Act. 6 The Board notes that there is
no support in the terms of exemption G or its legislative history to justify a departure from the Board's
traditional reading of grandfather provisions under
section 4 of the Act.
In this respect, exemption G is distinguishable from
exemption D of the Garn-St Germain Act. (12 U.S.C.
§ 1843(c)(8)(D)). In prior decisions with respect to
exemption D, the Board has not required the subsidiary with grandfather rights to terminate its insurance
agency activities upon acquisition by another bank
holding company. 7 The Board's decisions were based
on the terms, 8 limited scope and unique legislative
history of exemption D. That legislative history makes
clear that the entire focus of exemption D is on the
subsidiary conducting the grandfathered activity, and
exemption D rights attach only to that subsidiary
rather than to its parent corporation and may not
generally be expanded to other components of the
bank holding company system. The impact of shifting
control of an exemption D subsidiary is more limited
than under exemption G because the grandfathered
exemption D entity must continue to conduct the
activity directly. It may sell only the types of insurance already sold (or the equivalent) and it may do so
only in a limited number of states.
For the foregoing reasons, the Board concludes that
such exemption G rights as St. Joseph and Agency
may have possessed expired when St. Joseph was
acquired by Applicant and Applicant is not entitled to
engage, directly or through Agency, in general insurance activities pursuant to exemption G. This decision
6. Id.
7. See,
Sovran
Financial
Corp.,
73 FEDERAL RESERVE BULLETIN
672 (1987); Maryland
National
Corp., Order dated July 1, 1987.
Accord,
BankAmerica
(1983); Fuji Bank Ltd.,
Corp, 69 FEDERAL RESERVE BULLETIN 568
70 FEDERAL RESERVE BULLETIN 50 (1984).
8. The Board notes that by its terms exemption D, unlike exemption G, confers the authorization to conduct insurance agency activities directly in the subsidiary that was actually conducting the activity
on May 1, 1982.
830
Federal Reserve Bulletin • October 1987
is reached without prejudice to Applicant's claim to
more limited grandfather rights pursuant to exemption
D. In this regard, the Board notes that Agency appears
to have a claim that it qualifies initially for exemption
D rights. Agency was engaged lawfully in insurance
activities on May 1, 1982, the grandfather date in
exemption D, and despite the sale on June 30, 1982, of
substantially all of its assets, Agency has not renounced or abandoned its Board authorization under
the BHC Act to conduct insurance operations. On the
contrary, retention of its insurance license and corporate shell, the limited duration of its covenant not to
compete, as well as to continue referral of customers
and receipt of a fixed percentage of premiums from
such referral customers as fees, are evidence of an
intent not to abandon Agency. As noted above, the
Board has determined, based on the terms, legislative
history and limited scope of benefits conferred, that
exemption D rights alone among bank holding company grandfather rights, may survive the acquisition of a
grandfathered subsidiary by a nongrandfathered banking firm. The Board is unable to finally determine
whether Agency has exemption D rights in the absence
of an application raising the issue. The Board will act
expeditiously on any such application as Applicant
may file.
For the foregoing reasons, the Board has determined that such exemption G grandfather rights as
Agency may have possessed expired upon the acquisition of St. Joseph by Applicant and that Applicant's
application directly or indirectly to retain shares of
Agency pursuant to exemption G grandfather rights
should be, and hereby is, denied.
By order of the Board of Governors, effective
August 4, 1987.
Voting for this action: Vice Chairman Johnson, and Governors Seger, Angell, and Heller. Abstaining from this action:
Governor Kelley. Absent and not voting: Chairman Volcker.
JAMES MCAFEE
[SEAL]
Associate
Secretary
of the Board
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
First Chicago Corporation
Chicago, Illinois
Order Approving
Company
Acquisition
of a Bank
Holding
First Chicago Corporation, Chicago, Illinois, a bank
holding company within the meaning of the Bank
Holding Company Act (12 U . S . C . § 1841 et seq.) (the
"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 First United Financial Services, Inc., Arlington Heights, Illinois ("First United"), and thereby
indirectly acquire Oak Park Trust & Savings Bank,
Oak Park, Illinois; Mount Prospect State Bank, Mount
Prospect, Illinois; Bloomingdale State Bank, Bloomingdale, Illinois; The Dunham Bank, St. Charles,
Illinois; and United National Bank, Arlington Heights,
Illinois. 1 Applicant also has applied under section
4(c)(8) of the Act (12 U . S . C . § 1843(c)(8)) to acquire
Arlington Mortgage Company, Arlington Heights, Illinois, and thereby engage in the activities of making,
acquiring and servicing loans or other extensions of
credit; Arlington Commercial Finance, Arlington
Heights, Illinois, and thereby engage in the activities
of making, acquiring and servicing loans or other
extensions of credit, and leasing personal or real
property; First United Trust Company, Oak Park,
Illinois, and thereby engage in trust company functions; and B.I.P. Incorporated, Bloomingdale, Illinois,
and thereby engage in data processing activities.
These activities are authorized for bank holding companies pursuant to the Board's Regulation Y
(12 C.F.R. § 225.25(b)(1), (3), (5), and (7)).
Notice of the applications, affording opportunity for
interested persons to submit comments, has been
published (52 Federal Register 18,608, 24,342 (1987)).
The time for filing comments has expired, and the
Board has considered the applications and all comments received in light of the factors set forth in
sections 3(c) and 4(c)(8) of the Act.
Applicant is the largest commercial banking organization in Illinois with approximately $14.2 billion in
domestic deposits, representing approximately 13.7
percent of the total deposits in commercial banks in
the state. 2 First United is the 16th largest commercial
banking organization in Illinois with domestic deposits
of approximately $824.6 million, representing approximately 0.8 percent of the total deposits in commercial
banks in Illinois. Upon consummation of the proposal,
Applicant would control deposits of approximately
$15.0 billion, representing approximately 14.5 percent
of the total deposits in commercial banks in the state.
Consummation of this proposal would not have a
significant effect on the concentration of banking resources in Illinois.
1. Applicant will acquire First United through a merger of First
United with First Chicago Acquisition Corporation, Chicago, Illinois
("Acquisition Corporation"), a wholly owned subsidiary of Applicant. In connection with this application, Acquisition Corporation has
applied to become a bank holding company and to acquire First
United's nonbanking subsidiaries.
2. Data are as of June 30, 1986.
Legal Developments
Applicant and First United compete in the Chicago
banking market. 3 Applicant is the largest commercial
banking organization in the market, controlling approximately 21.1 percent of total deposits in commercial banks in the market. First United is the 13th
largest commercial banking organization in the market, controlling deposits of approximately $772.9 million, representing approximately 1.2 percent of total
deposits in commercial banks in the market. Upon
consummation of the proposal, Applicant would remain the largest commercial banking organization in
the market, controlling approximately 22.3 percent of
total deposits in commercial banks in the market. The
Chicago banking market is considered unconcentrated, with a Herfindahl-Hirschman Index ("HHI") of
790. Upon consummation, the HHI would increase by
51 points to 841. 4 Accordingly, the Board concludes
that consummation of the proposal would not have a
substantial adverse competitive effect in the Chicago
banking market.
First United also operates in the Aurora banking
market, a market where Applicant does not compete. 5
The Aurora market is unconcentrated, however, and
thus, the Board concludes that consummation of this
proposal would not have a significant adverse effect on
probable future competition in any relevant market.
In evaluating this application, the Board has considered the financial resources of Applicant and the effect
on these resources of the proposed acquisition. The
Board has stated and continues to believe that capital
adequacy is an especially important factor in the
analysis of bank holding company proposals, particularly in transactions where a significant acquisition is
proposed. 6
In this regard, the Board expects that banking
organizations experiencing significant growth internally and by acquisition, such as Applicant, should main-
3. The Chicago banking market is approximated by Cook, Lake and
DuPage counties in Illinois.
4. Under the revised Department of Justice Merger Guidelines, (49
Federal Register 26,823 (June 29, 1984)), any market in which the
post-merger HHI is less than 1000 is considered unconcentrated and
the Department will not challenge a merger or acquisition resulting in
an HHI of less than 1000, except in extraordinary circumstances. The
Department has informed the Board that a bank merger or acquisition
generally will not be challenged (in the absence of other factors
indicating anticompetitive effects) unless the post-merger HHI is at
least 1800 and the merger increases the HHI by at least 200 points.
The Justice Department has stated that the higher than normal HHI
thresholds for screening bank mergers for anticompetitive effects
implicitly recognizes the competitive effect of limited purpose lenders
and other nondepository financial entities.
5. The Aurora banking market is approximated by the southern
portion of Kane County, Piano, Bristol, Oswego, Fox, and Kendall
townships in Kendall County, and Sandwich township in DeKalb
County, all in Illinois.
6. See e.g., Chase Manhattan Corporation, 70 FEDERAL RESERVE
BULLETIN
5 2 9 ( 1 9 8 4 ) ; NCNB
BULLETIN 4 9 ( 1 9 8 3 ) .
Corporation,
6 9 FEDERAL
RESERVE
831
tain a strong capital position substantially above the
minimum levels specified in the Capital Adequacy
Guidelines without significant reliance on intangibles,
particularly goodwill. 7 The Board will carefully analyze the effect of expansion proposals on the preservation or achievement of such capital positions.
The Board has reviewed this case in the light of
Applicant's capital and improved financial position.
The Board notes that although this transaction involves some debt, the larger part of the transaction
will be funded with equity and Applicant has strengthened its capital position through the issuance of primary capital instruments. In addition, Applicant recognizes the desirability of maintaining a strong capital
base, and the Board intends to monitor Applicant's
capital position in the future. Accordingly, on the basis
of the above considerations, the Board concludes that
financial and managerial factors are consistent with
approval of this application. Convenience and needs of
the communities to be served are also consistent with
approval of this application.
Applicant also has applied, pursuant to section
4(c)(8), to acquire the nonbanking subsidiaries of First
United. Applicant operates nonbanking subsidiaries
that compete with First United in the activities of
commercial and consumer finance, leasing, and trust
services. The markets for these activities have numerous competitors and are regional or national in scope.
Accordingly, the Board concludes that this proposal
would not have any significant adverse effect upon
competition in any relevant market.
There is no evidence in the record to indicate that
approval of this proposal would result in undue concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices,
or other adverse effects on the public interest. Accordingly, the Board has determined that the balance of
public interest factors it must consider under section
4(c)(8) of the Act is favorable and consistent with
approval of the applications to acquire First United's
nonbanking subsidiaries and activities.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The acquisition of First
United shall not be consummated before the thirtieth
calendar day following the effective date of this Order,
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
7. Capital Adequacy Guidelines, 50 Federal
Register
16,057,
1 6 , 0 6 6 - 6 7 (April 24, 1985) (71 FEDERAL RESERVE BULLETIN 445
(1985)); National
743, 746 (1984).
City Corporation,
70 FEDERAL RESERVE BULLETIN
832
Federal Reserve Bulletin • October 1987
Chicago, acting pursuant to delegated authority. The
determinations as to Applicant's nonbanking activities
are subject to all of the conditions contained in Regulation Y, including those in sections 225.4(d) and
225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)),
and to the Board's authority to require such modification or termination of the activities of a holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with the provisions
and purposes of the Act and the Board's regulations
and orders issued thereunder, or to prevent evasion
thereof.
By order of the Board of Governors, effective August 3, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, and Kelley. Absent and not
voting: Chairman Volcker.
JAMES MCAFEE
[SEAL]
Associate
Secretary
of the Board
Jason Bankshares, Inc.
Offerle, Kansas
Order Approving
Company
Formation
of a Bank
Holding
Jason Bankshares, Inc., Offerle, Kansas, has applied
for the Board's approval pursuant to section 3(a)(1) of
the Bank Holding Company Act (12 U . S . C . §
1842(a)(1)) ("Act") to become a bank holding company by acquiring all of the voting shares of Offerle
Investment Co., Inc., a registered bank holding company, and its subsidiary, The Farmers State Bank,
Offerle, Kansas ("Bank"). Jason Bankshares has also
applied for Board approval pursuant to section
4(c)(8)(C) of the Act (12 U.S.C. § 1843(8)(C» to
conduct general insurance agency activities in Offerle,
Kansas.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
given in accordance with sections 3(b) and section 4(c)
of the Act. The time for filing comments has expired,
and the Board has considered the applications and all
comments received in light of the factors set forth in
sections 3 and 4 of the Act.
Applicant is a nonoperating corporation formed for
the purpose of becoming a bank holding company by
acquiring Bank. Applicant proposes to merge with
Offerle Investment Co., Inc., upon consummation of
the proposal and to hold shares of Bank directly.
Bank, with total assets of approximately $8.9 million,
is one of the smaller commercial banking organizations
in Kansas, controlling less than 0.1 percent of the total
deposits in commercial banking organizations in the
state. 1 Consummation of this acquisition would not
result in a significant increase in the concentration of
banking resources in Kansas.
Bank is the third larjgest of three banks in the
Edwards County, Kansas, banking market, controlling
19.3 percent of the total deposits in commercial banks
operating in the market. Applicant does not control
any banking or nonbanking subsidiaries in the Edwards County banking market. Based on these and
other facts of record, the Board believes that consummation of this proposal is not likely to have a significantly adverse effect upon competition in any relevant
banking market. Accordingly, the Board concludes
that competitive factors are consistent with approval.
The financial and managerial resources and future
prospects of Applicant and Bank are considered consistent with approval, especially in light of commitments made by Applicant and its principal in connection with this application. Although Applicant will
incur debt in connection with this proposal, Applicant
appears capable of servicing the debt while maintaining capital at an adequate level. Considerations relating to the convenience and needs of the community to
be served are consistent with approval.
Applicant has also applied, pursuant to exemption C
of section 4(c)(8) of the Act and
section
225.25(b)(8)(iii) of the Board's Regulation
Y
(12 C.F.R. 225.25(b)(8)(iii», to conduct general insurance agency activities in a place that has a population
not exceeding 5,000 residents. The Board has determined that general insurance agency activities are
closely related to banking where the bank holding
company engages in these activities in a place where
the bank holding company has a lending office and the
population does not exceed 5,000 residents. 2 Applicant proposes to continue to engage in general insurance activities conducted by Offerle Investment Co.,
Inc., in Offerle, Kansas. Offerle, Kansas, is a town
with a population of less than 5,000, and is the
community in which the Bank is located and operates.
There is no evidence in the record indicating that
consummation of the proposal would result in any
undue concentration of resources, adverse effects on
competition, conflicts of interests, unsound banking
practices, or any other adverse effects. Moreover, the
1. All banking data are as of December 31, 1985.
2. 12 C.F.R. 225.25(b)(8)(iii); 51 Federal Register 36,201 (October 9, 1986).
Legal Developments
Board also has determined that the balance of the
public interest factors the Board is required to consider under section 4(c)(8) of the Act is favorable.
Accordingly, based upon the foregoing and other
facts of record, the Board had determined that the
applications under sections 3 and 4 of the Act should
be, and hereby, are approved. The transactions shall
not be consummated before the thirtieth day following
the effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Kansas City, pursuant to
delegated authority. The determination regarding the
nonbanking activities of Applicant is subject to all the
conditions set forth in Regulation Y, including sections
225.4(d) and 225.23(b) (12 C.F.R. 225.4(d) and
ORDERS APPROVED
By Federal Reserve
UNDER BANK HOLDING
833
225.23(b)), and to the Board's authority to require
such modification or termination of the activities of a
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with, or to
prevent evasion of, the provisions and purposes of the
Act and the Board's regulations and orders issued
thereunder.
By order of the Board of Governors, effective
August 17, 1987.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
WILLIAM W . WILES
[SEAL]
COMPANY
Secretary
of the
Board
ACT
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Section 3
Applicant
Allegheny Valley Bancorp, Inc.
Pittsburgh, Pennsylvania
Bancshares 2000, Inc.
McLean, Virginia
Bank of Jackson Employee
Profit Sharing Plan and
Money Purchase Pension Plan
Jackson, Louisiana
Banks of Mid-America, Inc.
Oklahoma City, Oklahoma
Blissfield Bank Corporation
Blissfield, Michigan
Central Wisconsin Bankshares,
Inc.
Wausau, Wisconsin
Citizens Investments, Inc.
Vineland, N e w Jersey
Commercial Bancorp, Inc.
Obion, Tennessee
Community Bancshares of
Chanute, Inc.
Chanute, Kansas
Bank(s)
Allegheny Valley Bank of
Pittsburgh
Pittsburgh, Pennsylvania
Bank 2000 of Reston, National
Association
Reston, Virginia
BOJ Bancshares, Inc.
Jackson, Louisiana
F & M Bancorporation, Inc.
Tulsa, Oklahoma
The Blissfield State Bank
Blissfield, Michigan
Peoples' Bancshares of Antigo,
Inc.
Antigo, Wisconsin
Sun National Bank
Medford, N e w Jersey
The Commercial Bank
Obion, Tennessee
Community National Bank
Chanute, Kansas
Reserve
Bank
Effective
date
Cleveland
August 10, 1987
Richmond
August 24, 1987
Atlanta
July 30, 1987
Kansas City
August 13, 1987
Chicago
July 30, 1987
Chicago
July 30, 1987
Philadelphia
August 5, 1987
St. Louis
July 30, 1987
Kansas City
August 5, 1987
834
Federal Reserve Bulletin • October 1987
Section 3—Continued
Applicant
Cornerstone Financial
Corporation
Derry, New Hampshire
Crown Bancshares II, Inc.
Topeka Kansas
Devon Holding Company, Inc.
Bala Cynwyd, Pennsylvania
DNB Financial
Riverside, California
F & M Bancorporation, Inc.
Kaukauna, Wisconsin
FIRSTBANK CORP.
Alma, Michigan
First Financial Services, Inc.
Falls City, Nebraska
First Highland Corp.
Highland, Illinois
First Midwest Corporation of
Delaware
Elm wood Park, Illinois
First State Fremont, Inc.
Fremont, Nebraska
First Union Bancorporation,
Inc.
Streator, Illinois
First United Bancorporation
Anderson, South Carolina
First Wisconsin Corporation
Milwaukee, Wisconsin
FNB Financial Corporation
Shelby, Ohio
Forsyth Bancshares, Inc.
Forsyth, Montana
Gratiot Bancshares, Inc.
Gratiot, Wisconsin
Groesbeck Bancshares, Inc.
Groesbeck, Texas
Hancock Bancorp, Inc.
Hawesville, Kentucky
r, w x
Bank(s)
Reserve
Bank
Effective
^
Cornerstone Bank
Nashua, New Hampshire
Boston
August 14, 1987
Johnson County Bankshares, Inc.
Prairie Village, Kansas
Dominion Bank
Devon, Pennsylvania
De Anza National Bank
Riverside, California
The Security State Bank
Amherst Junction, Wisconsin
Comerica Bank—West Branch,
N.A.
West Branch, Michigan
Comerica Bank-Central
Sheherd, Michigan
Packers Management Company,
Inc.
Omaha, Nebraska
The First National Bank of
Highland
Highland, Illinois
State Bank of Union
Union, Illinois
Kansas City
August 28, 1987
Philadelphia
August 18, 1987
San Francisco
July 31, 1987
Chicago
August 7,1987
Chicago
August 7, 1987
Kansas City
June 16, 1987
St. Louis
August 21, 1987
Chicago
August 21, 1987
Kansas City
August 21, 1987
Chicago
August 4, 1987
Richmond
August 19, 1987
Chicago
August 4, 1987
Cleveland
August 6, 1987
Minneapolis
August 26, 1986
Chicago
August 14, 1987
Dallas
August 5, 1987
St. Louis
August 4, 1987
First State Bank
Fremont, Nebraska
The First National Bank of
Triumph
Triumph, Illinois
Anderson National Bank
Anderson, South Carolina
Shelard Bancshares, Inc.
St. Louis Park, Minnesota
The First National Bank of
Shelby
Shelby, Ohio
First State Bank of Forsyth
Forsyth, Montana
Gratiot State Bank
Gratiot, Wisconsin
Farmers State Bank
Groesbeck, Texas
Hancock Bank and Trust
Company
Hawesville, Kentucky
Legal Developments
Section 3—Continued
. ..
Applicant
Hardwick Holding Company
Dalton, Georgia
Henrietta Bancshares, Inc.
Henrietta, Texas
Key Centurion Bancshares, Inc.
Charleston, West Virginia
Liberty Bancorp of Georgia
Clayton, Georgia
Longview Financial Corporation
Longview, Texas
Magna Group, Inc.
Belleville, Illinois
FFC Acquisition Company
Belleville, Illinois
Miles Bancshares, Inc.
Advance, Missouri
Minnesota-Wisconsin
Bancshares, Inc.
Newport, Minnesota
NESB Corp.
New London, Connecticut
Ottawa Bancshares, Inc.
Ottawa, Kansas
Park Falls Agency, Inc.
Park Falls, Wisconsin
PEOTONE BANCORP, INC.
Peotone, Illinois
Rock River Bancorporation
Oregon, Illinois
Rocky Mountain
Bancorporation, Inc.
Aspen, Colorado
SB&T Corporation
Smyrna, Georgia
Security Chicago Corp.
Chicago, Illinois
Security National Corporation
Maitland, Florida
„ ., .
Bank(s)
Calhoun First National Bank
Calhoun, Georgia
First State Bank,
Hubbard, Texas
The Cental National Bank of
Buckhannon
Buckhannon, West Virginia
The Gordon Bank
Gordon, Georgia
Lindale Bancshares, Inc.
Lindale, Texas
Firstplace Financial Corporation
Lincoln, Illinois
Bowen State Bank
Bowen, Illinois
Town and Country Bancshares,
Inc.
Newport, Minnesota
New England Savings Bank
N e w London, Connecticut
Lyon County State Bancshares,
Inc.
Emporia, Kansas
Bradley Bank
Tomahawk, Wisconsin
Rock River Bancorporation, Inc.
Oregon, Illinois
United Bank of Ogle County,
National Association
Oregon, Illinois
The Bank of Aspen
Aspen, Colorado
Smyrna Bank & Trust Company
Smyrna, Georgia
First State Bancorp of Princeton,
Illinois
Princeton, Illinois
Security National Bank of
America
Maitland, Florida
Reserve
Bank
Effective
date
Atlanta
July 30, 1987
Dallas
August t4, 1987
Richmond
August 12, 1987
Atlanta
July 31, 1987
Dallas
August 5, 1987
St. Louis
July 31, 1987
St. Louis
July 29, 1987
Minneapolis
August 28, 1987
Boston
July 31, 1987
Kansas City
August 19, 1987
Minneapolis
August 17, 1987
Chicago
August 4, 1987
Chicago
August 4, 1987
Kansas City
August 27, 1987
Atlanta
August 24, 1987
Chicago
August 10, 1987
Atlanta
August 12, 1987
835
836
Federal Reserve Bulletin • October 1987
Section 3—Continued
..
Applicant
State Bancorp, Inc.
Bruceton Mills, West Virginia
Stillman BancCorp, Inc.
Stillman Valley, Illinois
Suburban Bancorp, Inc.
Palatine, Illinois
Success Financial Group, Inc.
Lincolnshire, Illinois
TCB Investments, Inc.
Kansas City, Missouri
Trustcorp, Inc.
Toledo, Ohio
Trustcorp, Inc.
Toledo, Ohio
United Missouri Bancshares,
Inc.
Kansas City, Missouri
Valley Bancorp, Inc.
Brighton, Colorado
Wesbanco, Inc.
Wheeling, West Virginia
Wesbanco, Inc.
Wheeling, West Virginia
Woodstock Acquisition Corp.
Woodstock, Illinois
Zappco,Inc.
St. Cloud, Minnesota
t. w w
Bank(s)
Terra Alta Bank
Terra Alta, West Virginia
United Bank of Rochelle
Rochelle, Illinois
Woodstock State Bancorp, Inc.
Woodstock, Illinois
Lincolnshire Bancshares, Inc.
Lincolnshire, Illinois
Bell wood Bancorporation, Inc.
Bellwood, Illinois
Tri-County Bancshares, Inc.
El Dorado Springs, Missouri
Midwest Bancorp, Inc.
Columbus, Indiana
Citizens Trust Bancorp, Inc.
Ann Arbor, Michigan
United Missouri Bank, U.S.A.
Wilmington, Delaware
Lyons Bancorp, Inc.
Brighton, Colorado
First Financial Bancorp, Inc.
Wheeling, West Virginia
Bank of Sissonville
Sissonville, West Virginia
Woodstock State Bancorp, Inc.
Woodstock, Illinois
Melrose Bancshares, Inc.
Melrose, Minnesota
Reserve
Bank
Effective
^
Richmond
August 20, 1987
Chicago
August 21, 1987
Chicago
August 6, 1987
Chicago
August 19, 1987
Kansas City
June 19, 1987
Cleveland
July 31, 1987
Cleveland
August 18, 1987
Kansas City
August 13, 1987
Kansas City
July 29, 1987
Cleveland
August 5, 1987
Cleveland
August 3, 1987
Chicago
August 6, 1987
Minneapolis
August 20, 1987
Section 4
Applicant
Allied Irish Banks, P.L.C.
Dublin, Ireland
First Maryland Bancorp
Baltimore, Maryland
First State Banking Corporation
Alcester, South Dakota
Nonbanking
Activity/Company
First Maryland Cheque
Corporation
Baltimore, Maryland
issuance and sale of money
orders and data processing
management
McKellips Insurance Company,
Inc.
Alcester, South Dakota
Brandon Insurance Agency
Brandon, South Dakota
Valley Springs Insurance Agency
Valley Springs, South Dakota
data processing services
Bank
Effective
date
Richmond
August 24, 1987
Minneapolis
August 20, 1987
Legal Developments
Section 4—Continued
Nonbanking
Activity/Company
Applicant
HUNTLEY BANCSHARES,
INC.
Huntley, Illinois
Madelia Bancshares, Inc.
Madelia, Minnesota
Marshall & Ilsley Corporation
Milwaukee, Wisconsin
Midwest Financial Group, Inc.
Peoria, Illinois
OMNIBANCORP
Denver, Colorado
Ozark Bankshares, Inc.
Ozark, Arkansas
Bank
Effective
date
Rohrson Insurance Agency
Hampshire, Illinois
Chicago
August 12, 1987
Madelia Agency, Inc.
Madelia, Minnesota
making, acquiring, and
servicing loans
Software Development
Corporation
Fort Lauderdale, Florida
Midwest Financial Investment
Management Company
Peoria, Illinois
investment advisory services
MSHC, Inc.
Denver, Colorado
mortgage lending activities
Ozark Financial Services, Inc.
Ozark, Arkansas
Ozark Commercial Corporation
Tulsa, Oklahoma
Minneapolis
August 5, 1987
Chicago
August 26, 1987
Chicago
August 11, 1987
Kansas City
August 28, 1987
St. Louis
August 20, 1987
Sections 3 and 4
..
Bank(s)/Nonbanking
Company
pp
Dominion Bankshares
Corporation
Roanoke, Virginia
ORDERS APPROVED
By Federal Reserve
First Springfield National
Corporation
Springfield, Tennessee
UNDER BANK MERGER
Richmond
Effective
date
August 20, 1987
ACT
Banks
Applicant
The Blissfield State Bank
Blissfield, Michigan
Norstar Bank of Long Island
Hempstead, N e w York
Norstar Bank of Upstate N Y
Albany, N e w York
Reserve
Bank
Bank(s)
Blissfield Interim Bank
Blissfield, Michigan
Norstar Bank of Commerce
N e w York, N e w York
Norstar Bank of the Hudson
Valley, N . A .
Newburgh, N e w York
Reserve
Bank
Effective
date
Chicago
July 30, 1987
N e w York
August 4, 1987
N e w York
August 5, 1987
837
838
Federal Reserve Bulletin • October 1987
PENDING
CASES INVOLVING
THE BOARD OF
GOVERNORS
This list of pending cases does not include suits against
Governors is not named a party.
Barrett v. Volcker, N o . 87-2280 (D.D.C., filed August
17, 1987).
Northeast Bancorp v. Board of Governors, N o . 871365 (D.C. Cir., filed July 31, 1987).
National Association of Casualty & Insurance
Agents
v. Board of Governors, Nos. 87-1354, 87-1355 (D.C.
Cir., filed July 29, 1987).
Air Continental,
Inc. v. Federal Reserve Board of
Boston, et. al, N o . 87-1877-N (D. Massachusetts,
filed July 23, 1987).
The Chase Manhattan Corporation v. Board of Governors, N o . 87-1333 (D.C. Cir., filed July 20, 1987).
Securities Industry Association
v. Board of Governors, N o s . 87-4091, 87-4093, 87-4095 (2d Cir., filed
July 1 and July 15, 1987).
Lewis v. Board of Governors, Nos. 87-3455, 87-3545
(11th Cir., filed June 25, August 3, 1987).
Securities Industry Association
v. Board of Governors, et al. N o . 87-4041 and consolidated cases (2d
Cir., filed May 1, 1987).
Securities Industry Association
v. Board of Governors, et al., N o . 87-1169 (D.C. Cir., filed April 17,
1987).
Bankers Trust New York Corp. v. Board of Governors,
No. 87-1035 (D.C. Cir., filed Jan. 23, 1987).
Securities Industry Association
v. Board of Governors, et al., N o . 87-1030 (D.C. Cir., filed Jan. 20,
1987).
Grimm v. Board of Governors, No. 87-4006 (2d Cir.,
filed Jan. 16, 1987).
Independent Insurance Agents of America, et al. v.
Board of Governors,
N o s . 86-1572, 1573, 1576
(D.C. Cir., filed Oct. 24, 1986).
Independent
Community
Bankers Association
of
South Dakota v. Board of Governors, N o . 86-5373
(8th Cir., filed Oct. 3, 1986).
Jenkins v. Board of Governors, N o . 86-1419 (D.C.
Cir., filed July 18, 1986).
the Federal
Reserve
Banks in which the Board
of
Securities Industry Association
v. Board of Governors, N o . 86-1412 (D.C. Cir., filed July 14, 1986).
Optical Coating Laboratory,
Inc. v. United
States,
N o . 288-86C (U.S. Claims Ct., filed May 6, 1986).
CBC, Inc. v. Board of Governors, N o . 86-1001 (10th
Cir., filed Jan. 2, 1986).
Myers, et al. v. Federal Reserve Board, N o . 85-1427
(D. Idaho, filed N o v . 18, 1985).
Souser, et al. v. Volcker, et al., N o . 85-C-2370, et al.
(D. Colo., filed N o v . 1, 1985).
Podolak v. Volcker, N o . C85-0456, et al. (D. Wyo.,
filed Oct. 28, 1985).
Kolb v. Wilkinson, et al., N o . C85-4184 (N.D. Iowa,
filed Oct. 22, 1985).
Farmer v. Wilkinson, et al., N o . 4-85-CIVIL-1448 (D.
Minn., filed Oct. 21, 1985).
Kurkowski v. Wilkinson, et al, N o . CV-85-0-916 (D.
N e b . , filed Oct. 16, 1985).
Alfson v. Wilkinson, et al., N o . A l - 8 5 - 2 6 7 (D. N . D . ,
filed Oct. 8, 1985).
Independent
Community
Bankers
Association
of
South Dakota v. Board of Governors, N o . 84-1496
(D.C. Cir., filed Aug. 7, 1985).
Urwyler, et al. v. Internal Revenue Service, et al., N o .
85-2877 (9th Cir., filed July 18, 1985).
Wight, et al. v. Internal Revenue Service, et al., N o .
85-2826 (9th Cir., filed July 12, 1985).
Florida Bankers Association
v. Board of Governors,
No. 84-3883 and N o . 84-3884 (11th Cir., filed Feb.
15, 1985).
Florida Department
of Banking v. Board of Governors, N o . 84-3831 (11th Cir., filed Feb. 15, 1985),
and N o . 84-3832 (11th Cir., filed Feb. 15, 1985).
Lewis v. Volcker, et al., N o . 86-3210 (6th Cir., filed
Jan. 14, 1985).
Brown v. United States Congress, et al., N o . 84-28876(IG) (S.D. Cal., filed Dec. 7, 1984).
Melcher v. Federal Open Market Committee, N o . 8 4 1335 (D.D.C., filed Apr. 30, 1984).
A1
Financial and Business Statistics
CONTENTS
Domestic
MONEY
A3
A4
A5
A6
Financial
Statistics
STOCK AND BANK
CREDIT
Reserves, money stock, liquid assets, and debt
measures
Reserves of depository institutions, Reserve
Bank credit
Reserves and borrowings—Depository
institutions
Selected borrowings in immediately available
funds—Large member banks
POLICY
A7
A8
A9
WEEKLY REPORTING
INSTRUMENTS
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Federal Reserve open market transactions
A19
A20
A21
A22
BANKS
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holdings
MONETAR Y AND CREDIT AGGREGA TES
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Bank debits and deposit turnover
A16 Loans and securities—All commercial banks
COMMERCIAL
BANKING
INSTITUTIONS
A17 Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
BANKS
Assets and liabilities
All reporting banks
Banks in N e w York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
FINANCIAL
MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
FEDERAL
FEDERAL RESERVE
COMMERCIAL
FINANCE
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U . S . Treasury—Types and
ownership
A31 U.S. government securities dealers—
Transactions
A32 U.S. government securities dealers—Positions
and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding
SECURITIES MARKETS AND
CORPORATE
FINANCE
A34 N e w security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales and
asset position
A35 Corporate profits and their distribution
2
Federal Reserve Bulletin • October 1987
A36 Nonfinancial corporations—Assets and
liabilities
A36 Total nonfarm business expenditures on new
plant and equipment
A37 Domestic finance companies—Assets and
liabilities and business credit
A54 Foreign official assets held at Federal Reserve
Banks
A55 Foreign branches of U . S . banks—Balance sheet
data
A57 Selected U . S . liabilities to foreign official
institutions
REAL
REPORTED BY BANKS
ESTATE
A38 Mortgage markets
A39 Mortgage debt outstanding
CONSUMER
INSTALLMENT
CREDIT
A40 Total outstanding and net change
A41 Terms
IN THE UNITED
A57
A58
A60
A61
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
ENTERPRISES IN THE UNITED
FLOW OF FUNDS
BUSINESS
STATES
A42 Funds raised in U . S . credit markets
A43 Direct and indirect sources of funds to credit
markets
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
Domestic Nonfinancial
SECURITIES
SELECTED
Statistics
MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross national product and income
A52 Personal income and saving
International
SUMMARY
Statistics
STATISTICS
A53 U.S. international transactions—Summary
A54 U.S. foreign trade
A54 U.S. reserve assets
STATES
HOLDINGS
AND
TRANSACTIONS
A65 Foreign transactions in securities
A66 Marketable U . S . Treasury bonds and notes—
Foreign transactions
INTEREST AND EXCHANGE
RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular Presentation,
Statistical Releases, and Special
Tables
SPECIAL TABLES
A70 Terms of lending at commercial banks, May 31,
1987
Money Stock and Bank Credit
1.10
A3
RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent) 1
Item
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 3
5
6
7
8
9
Concepts
Ml
M2
M3
L
Debt
of money,
Nontrgnsaction
10 In M2 y
11 In M3 only 6
1987
1986
1987
Q3
Q4
01
Q2
Mar.
Apr.
May
June'
July
21.0
21.9
21.3
9.7
24.3
22.8
25.3
11.0
16.4
16.5
18.5
11.3
8.0
8.4
5.4
6.8
-.4
5.9
.2
2.9
23.3
25.5
13.6
9.9
8.2
3.1
7.5
8.7
-13.3
-15.9
-8.1
.5
-2.1
6.8
.1
4.8
16.5
10.6
9.7
8.1
12.5
17.0
9.2
8.0
8.2
12.1
13.1
6.3
6.4'
6.4
10.4
6.4
2.4'
3.9"
3.1
9.2'
3.4'
1.4
1.6
-2.9
8.3'
17.5'
5.7'
5.4'
3.9'
9.9'
4.5
.3'
4.7 r
9.2
10.6'
-10.4
1.0
5.2
1.4
9.8
1.8
2.8
n.a.
n.a.
n.a.
8.6
6.2
6.6
3.2
4.0
6.4
.9'
10.3
.7'
2.6
1.6'
4.3
-1.2'
22.6
5.1
21.8
3.2
-1.0
institutions2
iquid assets,
and
debt4
components
Time and savings
deposits
Commercial banks
Savings 7
Small-denomination time
Large-denomination time
Thrift institutions
15
Savings'
16
Small-denomination time
17
Large-denomination time
25.0
-7.5
-1.5
36.9
-10.7
.1
37.3
-4.9
9.7
24.1
-4.5r
18.3
28.5
-8.6
12.2
27.8
-8.3
27.7
16.0
-1.3
18.8'
6.9
10.4
16.6
7.5
10.7
-5.0
21.0
-3.4
2.8
23.2
-6.4
-7.0
27.3
-4.3
-9.5
25.9 r
1.2'
-8.4
28.6
.C
-9.5
30.5
1.2'
-19.1
17.4'
-,5r
2.4
12.6
10.4
8.9
2.0
12.5
8.8
Debt
components4
18 Federal
19 Nonfederal
20 Total loans and securities at commercial banks
14.7
11.9
10.6
11.5
12.3
9.1
9.7
10.6
10.1
9.6 r
9.1'
7.0
5.9
9.0
3.8
8.4
10.4'
11.9
15.1
9.3'
7.4
14.9
8.3
3.2
n.a.
n.a.
1.3
12
13
14
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. T o adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
c o m p e n s a t e for float also are subtracted from the actual series.
3. T h e monetary base not adjusted for discontinuities consists of total
reserves plus required clearing balances and adjustments to compensate for float
at Federal Reserve Banks plus the currency component of the money stock less
the amount of vault cash holdings of thrift institutions that is included in the
currency component of the money stock plus, for institutions not having required
reserve balances, the excess of current vault cash over the amount applied to
satisfy current reserve requirements. After the introduction of contemporaneous
reserve requirements (CRR), currency and vault cash figures are measured over
the weekly computation period ending Monday.
Before C R R , all c o m p o n e n t s of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After C R R , the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency c o m p o n e n t of the money stock plus the remaining items seasonally
adjusted as a whole.
4. Composition of the money stock measures and debt is as follows:
M l : (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers 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) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. T h e currency and demand
deposit c o m p o n e n t s exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their O C D liabilities.
M2: M l plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide. Money Market Deposit Accounts
(MMDAs), savings and small-denomination time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and balances in both taxable and
tax-exempt general purpose and broker/dealer money market mutual funds.
Excludes individual retirement accounts (IRA) and Keogh balances at depository
institutions and money market f u n d s . Also excludes all balances held by U . S .
commercial banks, money market f u n d s (general purpose and broker/dealer),
foreign governments and commercial b a n k s , and the U . S . government. Also
subtracted is a consolidation adjustment that represents the estimated amount of
demand deposits and vault cash held by thrift institutions to service their time and
savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U . S . banks
worldwide and at all banking offices in the United Kingdom and C a n a d a , and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U . S . government,
money market f u n d s , and foreign banks and official institutions. Also subtracted
is a consolidation adjustment that represents the estimated amount of overnight
RPs and Eurodollars held by institution-only money market mutual f u n d s .
L: M3 plus the nonbank public holdings of U . S . savings b o n d s , short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local g o v e r n m e n t s , and private
nonfinancial sectors. Private debt consists of corporate b o n d s , mortgages, consumer credit (including bank loans), other bank loans, commercial p a p e r , bankers
acceptances, and other debt instruments. T h e source of data on domestic
nonfinancial debt is the Federal Reserve B o a r d ' s flow of f u n d s a c c o u n t s . Debt
data are based on monthly averages. Growth rates for debt reflect a d j u s t m e n t s for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker/dealer), M M D A s , and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U . S . residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual f u n d s .
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh a c c o u n t s at commercial
banks and thrifts are subtracted f r o m small time deposits.
9. Large-denomination time deposits are those issued in a m o u n t s of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial b a n k s less those held by
money market mutual f u n d s , depository institutions, and foreign banks and
official institutions.
11. Changes calculated f r o m figures shown in table 1.23.
A4
DomesticNonfinancialStatistics • October 1987
1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1987
1987
May
June
July
June 17
June 24
July 1
July 8
July 15
July 22
July 29
241,800
235,851
233,463
231,766
240,768
241,794
236,717
234,054
232,936
230,331
213,797
206,318
7,479
10,065
7,683
2,382
0
1,179
645
16,114
11,073
5,018
17,795
210,941
208,728
2,213
8,030
7,683
347
0
737
724
15,419
11,069
5,018
17,866
208,364
208,258
106
7,690
7,660
30
0
673
979
15,757
11,069
5,018
17,917
207,434
206,895
539
7,726
7,683
43
0
651
821
15,134
11,069
5,018
17,863
215,306
210,886
4,420
8,132
7,683
449
0
823
757
15,750
11,069
5,018
17,877
215,509
210,984
4,525
8,676
7,683
993
0
888
755
15,965
11,069
5,018
17,890
210,313
210,313
0
7,683
7,683
0
0
718
2,392
15,611
11,069
5,018
17,900
209,239
209,239
0
7,683
7,683
0
0
673
669
15,790
11,069
5,018
17,910
208,503
208,503
0
7,657
7,657
0
0
507
619
15,649
11,069
5,018
17,920
205,452
205,452
0
7,623
7,623
0
0
796
527
15,933
11,069
5,018
17,930
212,064
523
214,465
507
216,400
486
214,795
511
214,356
502
214,612
497
216,901
493
217,243
490
216,202
486
215,462
479
16,028
314
8,776
246
5,140
258
3,879
228
14,570
237
15,561
303
4,865
243
5,685
271
5,316
249
3,872
254
2,095
407
2,072
404
2,200
352
2,239
361
2,036
333
1,990
574
2,116
347
2,072
405
2,418
334
2,060
325
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit
2
U.S. government securities 1
3
Bought outright
4
Held under repurchase a g r e e m e n t s . . . .
5
Federal agency obligations
6
Bought outright
7
Held under repurchase a g r e e m e n t s . . . .
8
Acceptances
9
Loans
10
Float
11
Other Federal Reserve assets
12 Gold stock 2
13 Special drawing rights certificate a c c o u n t . .
14 Treasury currency outstanding
ABSORBING RESERVE F U N D S
15 Currency in circulation^
16 Treasury cash holdings 2
Deposits, other than reserve balances, with
Federal Reserve Banks
17
Treasury
18
Foreign
19
Service-related balances and
adjustments
20
Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3
6,910
6,814
6,664
6,891
6,950
6,903
6,630
6,771
6,724
6,599
37,344
36,520
35,966
36,811
35,748
35,331
39,109
35,115
35,214
35,297
July 22
July 29
End-of-month figures
Wednesday figures
1987
1987
May
June
July
June 17
June 24
July 1
23 Reserve Bank credit
231,880
239,216
234,310
235,159
242,395
234,995
235,558
232,395
233,865
231,830
24
25
26
27
28
29
30
31
32
33
U.S. government securities'
Bought outright
Held under repurchase a g r e e m e n t s . . . .
Federal agency obligations
Bought outright
Held under repurchase a g r e e m e n t s . . . .
Acceptances
Loans
Float
Other Federal Reserve assets
207,304
207,304
0
7,683
7,683
0
0
832
922
15,139
212,306
210,248
2,058
8,679
7,683
996
0
972
1,579
15,680
208,170
204,871
3,299
8,553
7,623
930
0
634
507
16,446
210,326
206,555
3,771
7,985
7,683
302
0
716
772
15,360
216,671
210,712
5,959
8,394
7,683
711
0
760
645
15,925
209,604
209,604
0
7,683
7,683
0
0
807
1,324
15,577
210,080
210,080
0
7,683
7,683
0
0
627
1,463
15,705
207,460
207,460
0
7,683
7,683
0
0
723
789
15,740
209,230
209,230
0
7,623
7,623
0
0
497
646
15,869
206,296
206,296
0
7,623
7,623
0
0
1,613
163
16,135
34 Gold stock 2
35 Special drawing rights certificate a c c o u n t . .
36 Treasury currency outstanding
11,070
5,018
17,823
11,069
5,018
17,889
11,069
5,018
17,939
11,068
5,018
17,875
11,069
5,018
17,889
11,069
5,018
17,899
11,069
5,018
17,909
11,069
5,018
17,919
11,069
5,018
17,929
11,069
5,018
17,939
213,547
514
215,201
492
215,938
470
214,807
503
214,300
499
215,780
492
217,570
490
216,965
490
215,884
483
215,722
470
6,383
320
13,774
318
5,365
262
8,126
232
16,356
208
10,005
289
6,142
244
3,351
381
6,038
283
4,711
244
1,779
372
1,775
458
1,747
281
1,823
389
1,771
374
1,775
490
1,783
322
1,779
618
1,762
286
1,762
342
July 8
July 15
SUPPLYING RESERVE F U N D S
ABSORBING R E S E R V E F U N D S
37 Currency in circulation^
38 Treasury cash holdings 2
Deposits, other than reserve balances, with
Federal Reserve Banks
39
Treasury
40
Foreign
41
Service-related balances and
adjustments
42
Other
43 Other Federal Reserve liabilities and
capital
44 Reserve balances with Federal
Reserve Banks 3
6,511
6,847
6,520
6,785
6,832
6,495
6,461
6,592
6,539
6,422
36,365
34,327
37,754
36,456
36,031
33,655
36,542
36,225
36,606
36,184
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes any securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Revised for periods between October 1986 and April 1987. At times during
this interval, outstanding gold certificates were inadvertently in excess of the gold
stock. Revised data not included in this table are available from the Division of
Research and Statistics, Banking Section.
3. Excludes required clearing balances and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Money Stock and Bank Credit
1.12 RESERVES AND BORROWINGS
A5
Depository Institutions
Millions of dollars
Monthly averages 8
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks 1
Total vault cash
Vault 3
Surplus 4 .
Total reserves
Required reserves
Excess reserve balances at Reserve Banks 6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
1984
1985
1986
1986
Dec.
Dec.
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
21,738
22,313
18,958
3,355
40,696
39,843
853
3,186
113
2,604
27,620
22,953
20,522
2,431
48,142
47,085
1,058
1,318
56
499
37,360
24,071
22,199
1,872
59,560
58,191
1,369
827
38
303
37,360
24,071
22,199
1,872
59,560
58,191
1,369
827
38
303
36,584
25,049
23,084
1,965
59,668
58,600
1,068
580
34
225
33,625
25,889
23,435
2,454
57,060
55,849
1,211
556
71
283
35,318
23,759
21,743
2,016
57,061
56,146
916
527
91
264
37,807
23,353
21,587
1,767
59,393
58,566
827
993
120
270
36,466
23,693
21,873
1,820
58,339
57,260
1,079
1,035
196
288
36,309
24,380
22,475
1,905
58,784
57,594
1,190
776
259
273
1987
Biweekly averages of daily figures for weeks ending
1987
11
12
13
14
15
16
17
18
19
20
Reserve balances with Reserve Banks 1
Total vault cash 2
Vault
Surplus 4
Total reserves 5
Required reserves
Excess reserve balances at Reserve Banks 6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
Apr. 8
Apr. 22
May 6
May 20
June 3'
June IT
July 1
July 15
July 29"
Aug. 12"'
36,358
23,198
21,350
1,848
57,708
57,029
679
641
98
248
38,746
23,479
21,761
1,719
60,506
59,703
804
956
110
267
37,612
23,289
21,519
1,770
59,131
58,115
1,016
1,410
159
299
36,327
23,552
21,801
1,751
58,128
57,066
1,063
830
190
276
36,018
24,094
22,158
1,936
58,176
57,042
1,134
1,094
226
297
37,145
23,668
21,972
1,696
59,117
58,313
804
635
230
254
35,475
25,215
23,092
2,123
58,567
56,947
1,620
856
298
289
37,083
24,238
22,470
1,769
59,553
59,081
472
696
271
261
35,220
25,029
22,998
2,031
58,218
57,245
974
652
294
133
35,832
24,306
22,413
1,893
58,245
57,465
780
564
289
120
1. Excludes required clearing balances and adjustments to compensate for
float.
2. Dates refer to the maintenance periods in which the vault cash can be used
to satisfy reserve requirements. Under contemporaneous reserve requirements,
maintenance periods end 30 days after the lagged computation periods in which
the balances are held.
3. Equal to all vault cash held during the lagged computation period by
institutions having required reserve balances at Federal Reserve Banks plus the
amount of vault cash equal to required reserves during the maintenance period at
institutions having no required reserve balances.
4. Total vault cash at institutions having no required reserve balances less the
amount of vault cash equal to their required reserves during the maintenance
period.
5. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to c o m p e n s a t e for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
7. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
8. Before February 1984, data are prorated monthly averages of weekly
averages; beginning February 1984, data are prorated monthly averages of
biweekly averages.
NOTE. These data also appear in the B o a r d ' s H . 3 (502) release. For address, see
inside front cover.
A6
DomesticNonfinancialStatistics • October 1987
1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Member Banks1
Averages of daily figures, in millions of dollars
1987 week ending Monday
Maturity and source
1
2
3
4
Federal funds purchased, repurchase agreements,
and
other selected borrowing in immediately
available
funds
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
F r o m other depository institutions, foreign banks and
foreign official institutions, and United States government agencies
For one day or under continuing contract
For all other maturities
Apr. 6
Apr. 13
Apr. 20
Apr. 27
May 4
May 11
May 18
May 25
June 1
80,467
8,639
81,639
8,974
80,380
9,877
72,677
8,966
74,589
8,951
72,245
9,378
74,184
9,341
70,799
9,586
71,703
9,567
38,912
7,996
42,536
8,039
35,818
8,381
35,509
8,384
36,261
9,872
37,474
9,708
34,183
9,731
34,329
9,654
34,356
9,008
12,556
9,869
12,495
13,167
12,713
13,596
12,815
15,000
11,755
14,898
11,404
15,298
11,482
15,980
10,800
14,975
26,048
10,332
21,149
12,483
24,810
9,038
24,187
8,7%
23,189
8,702
24,329
8,678
24,777
8,561
25,068
8,741
28,649
11,124
30,933
11,615
29,588
13,656
32,471 r
12,864
27,344'
11,449
29,146
13,004
26,958
13,353
29,083
13,481
Repurchase agreements on U.S. government and federal
agency securities in immediately available funds
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
F o r all other maturities
26,225
9,940
MEMO: Federal f u n d s loans and resale agreements in immediately available f u n d s in maturities of one day or
under continuing contract
9 To commercial banks in the United States
10 T o all other specified customers
29,107
11,329
5
6
7
8
12,806
9,347
1. Banks with assets of $1 billion or more as of Dec. 31, 1977.
r
2. Brokers and nonbank dealers in securities; other depository institutions;
foreign banks and official institutions; and United States government agencies.
Policy Instruments
A7
1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Federal Reserve
Bank
Boston
N e w York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
K a n s a s City
Dallas
San Francisco . . .
Extended Credit 3
Adjustment Credit
and
Seasonal Credit 1
On
8/26/87
Effective
Date
5Vi
8/21/86
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
5Vi
After 30 days of Borrowing 3
First 30 days of Borrowing
Previous
Rate
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
8/21/86
6
On
8/26/87
Effective
Date
Previous
Rate
On
8/26/87
Effective
Date
Previous
Rate
5 Vi
8/21/86
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
6
7.20
8/13/87
8/13/87
8/13/87
8/13/87
8/13/87
8/13/87
7.15
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
8/21/86
5 Vi
6
7.20
8/13/87
8/13/87
8/13/87
8/13/87
8/13/87
8/13/87
Effective Date
7/30/87
7/30/86
7/30/87
7/30/87
7/30/87
7/30/87
7/30/87
7/30/87
7/30/87
7/30/87
7/30/87
7/30/87
7.15
Range of rates for adjustment credit in recent years 4
Effective date
In effect Dec. 31, 1973
1974—Apr. 25
30
Dec. 9
16
1975—Jan.
6
10
24
Feb. 5
7
Mar. 10
14
May 16
23
1976—Jan.
19
23
N o v . 22
26
1977—Aug. 30
31
Sept. 2
Oct. 26
1978—Jan.
9
20
May 11
12
July
3
July 10
Range (or
level)—
All F.R.
Banks
IVi
7Vi-8
8
7-V4-8
V/4
iVir-VM
iv^-m
71/4
63/4-7'/4
63/4
6V4-6V4
6V4
6-61/4
6
5Vi-6
5Vi
5V4-5Vi
5V4
5V4-5V4
51/4-53/4
53/4
6
F.R.
Bank
of
N.Y.
7Vi
8
8
73/4
73/4
73/4
7V4
7V4
63/4
6-V4
6V4
6V4
6
6
<iVi
51/4
51/4
5 Vi
5V4
53/4
53/4
6
6-6Vi
6Vi
61/2
6Vi-7
7
7
7
61/!
7-7!/4
7V4
7^4
7V4
Effective date
F.R.
Bank
of
N.Y.
1978—Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
73/4
73/4
8
8-8?/!
8Vi
8Vi-9Vi
9 Vi
8
8!/!
8
9Vi
9Vi
1979—July 20
Aug. 17
20
Sept. 19
21
Oct.
8
10
10
10-10
low
10Vi-ll
11
11-12
12
10
lOVi
10W
11
11
12
12
1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13
13
13
12
11
11
10
10
11
12
13
13
1981—May
13-14
14
13-14
13
12
14
14
13
13
12
Nov.
Dec.
5.
8
2
6
4
1. A d j u s t m e n t credit is available on a short-term basis to help depository
institutions meet t e m p o r a r y n e e d s for f u n d s thai cannot be met through reasonable alternative sources. After May 19,1986, the highest rate established for loans
to depository institutions may be charged on adjustment credit loans of unusual
size that result f r o m a major operating problem at the b o r r o w e r ' s facility.
Seasonal credit is available to help smaller depository institutions meet regular,
seasonal needs for f u n d s that cannot be met through special industry lenders and
that arise f r o m a combination of expected patterns of movement in their deposits
and loans. A t e m p o r a r y simplified seasonal program was established on Mar. 8,
1985, and the interest rate was a fixed rate Vi percent above the rate on adjustment
credit. T h e program was re-established on Feb. 18, 1986 and again on Jan. 28,
1987; the rate may be either the same as that for adjustment credit or a fixed rate
Vi percent higher.
2. E x t e n d e d credit is available to depository institutions, where similar assistance is not reasonably available f r o m other sources, when exceptional circumstances or practices involve only a particular institution or when an institution is
experiencing difficulties adjusting to changing market conditions over a longer
period of time.
3. For extended-credit loans outstanding more than 30 days, a flexible rate
Range (or
level)—
All F.R.
Banks
Vl
Vi
Range (or
level)—
All F . R .
Banks
F.R.
Bank
of
N.Y.
20
23
2
3
16
27
30
Oct. 12
13
N o v . 22
26
Dec. 14
15
17
llVi-12
11 Vi
11-llVi
11
10
lO-lOVi
10
9Vi-10
9
9-9
9
8Vi-9
8Vi-9
11
11
11
11
10 Vi
10
10
9Vi
9
9
9
9
8
9
13
N o v . 21
26
Dec. 24
8Vi-9
9
8Vi-9
8Vi
8
9
9
8Vi
1985—May 20
24
7Vi-8
Effective date
1982—July
Aug.
1984—Apr.
1986—Mar.
7
10
Apr. 21
23
July 11
Aug. 21
22
In effect August 26, 1987
Vi
V>
Vl
8V1
IVi
1-lVl
7
6Vi-7
6V1
6
5Vi-6
5
5
Vi
Vi
Vi
Vi
Vi
Vl
8V1
8V2
8
IVi
IVi
1
1
6 Vi
6Vi
6
5Vi
5Vi
5Vi
somewhat above rates on market sources of f u n d s ordinarily will be c h a r g e d , but
in no case will the rate charged be less than the basic discount rate plus 50 basis
points. T h e flexible rate is re-established on the first business day of each
two-week reserve maintenance period. At the discretion of the Federal Reserve
Bank, the time period for which the basic discount rate is applied may be
shortened.
4. For earlier data, see the following publications of the Board of G o v e r n o r s :
Banking and Monetary Statistics,
1914-1941, and 1941-1970; Annual
Statistical
Digest,
1970-1979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term
adjustment credit borrowings by institutions with deposits of $500 million or more
that had borrowed in successive w e e k s or in more than 4 w e e k s in a calendar
quarter. A 3 percent surcharge was in effect f r o m Mar. 17, 1980 through May 7,
1980. There was no surcharge until N o v . 17,1980, when a 2 percent s u r c h a r g e w a s
a d o p t e d ; the surcharge was subsequently raised to 3 percent on Dec. 5 , 1 9 8 0 , and
to 4 percent on May 5, 1981. T h e surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective O c t . 12, 1981. As of O c t . 1, 1981 the
formula for applying the surcharge was changed f r o m a calendar q u a r t e r to a
moving 13-week period. The surcharge was eliminated on N o v . 17, 1981.
A8
DomesticNonfinancialStatistics • October 1987
1.15
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
Percent of deposits
Type of deposit, <tnd
deposit interval'
Depository institution requirements
after implementation of the
Monetary Control Act
Net transaction
accounts3,4
$0 million-$36.7 m i l l i o n . . . .
More than $36.7 million . . .
NonpersonaI time deposits5
By original maturity
Less than \V2 years
1V5 years or more
Eurocurrency
All types
10/6/86
10/6/83
liabilities
1. Reserve requirements in effect on Dec. 31,1986. Required reserves must be
held in the form of deposits with Federal Reserve Banks or vault cash.
N o n m e m b e r s may maintain reserve balances with a Federal Reserve Bank
indirectly on a pass-through basis with certain approved institutions. For previous
reserve requirements, see earlier editions of the Annual Report and of the
FEDERAL RESERVE BULLETIN. 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 corporations.
2. The G a r n - S t . Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. N o corresponding adjustment is to be made in
the event of a decrease. On Dec. 30, 1986, the exemption was raised from $2.6
million to $2.9 million. In determining the reserve requirements of depository
institutions, the exemption shall apply in the following order: (1) net N O W
accounts (NOW accounts less allowable deductions); (2) net other transaction
accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting
11/13/80
with those with the highest reserve ratio. With respect to N O W a c c o u n t s and
other transaction accounts, the exemption applies only to such a c c o u n t s that
would be subject to a 3 percent reserve requirement.
3. 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.
However, MMDAs and similar accounts subject to the rules that permit n o more
than six preauthorized, automatic, or other transfers per month, of which no more
than three can be checks, are not transaction accounts (such accounts are savings
deposits subject to time deposit reserve requirements).
4. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage increase in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 30,
1986, the amount was increased from $31.7 million to $36.7 million.
5. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a 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.
Policy Instruments
1.17
A9
FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
1987
1986
1984
Type of transaction
1986
1985
Dec.
Feb.
Jan.
Mar.
May
Apr.
June
U . S . TREASURY SECURITIES
Outright transactions (excluding
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
V
8
9
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
matched
20,036
8,557
22,214
4,118
0
0
7,700
3,500
1,126
0
16,354
-20,840
1,349
0
22,602
2,502
0
1,000
5,422
0
0
0
997
583
0
0
191
3,581
0
800
1,062
0
0
0
4,226
653
0
0
1,697
0
0
0
575
22
0
0
190
0
18,673
-20,179
0
0
0
1,280
-1,502
0
0
0
611
0
0
0
0
1,855
-4,954
0
0
0
1,762
-1,799
0
1,232
0
1,375
-522
0
0
0
4,063
-1,336
0
535
0
1,715
-1,812
0
0
19,763
-17,717
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
1,638
0
-13,709
16,039
-17,459
13,853
893
0
-17,058
16,984
0
0
-1,280
1,502
0
0
-591
0
0
252
-1,650
4,354
0
0
-1,762
1,799
3,642
0
-1,373
522
0
0
-1,804
1,111
1,394
0
-1,715
1,812
14
15
16
11
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
536
300
-2,371
2,750
458
100
-1,857
2,184
236
0
-1,620
2,050
0
0
0
0
0
0
-20
0
0
0
-204
400
0
0
0
0
914
0
-3
0
0
0
-2,259
150
312
0
0
0
18
19
20
21
Over 10 years
Gross purchases
G r o s s sales
Maturity shift
Exchange
441
0
-275
2,052
293
0
-447
1,679
158
0
0
1,150
0
0
0
0
0
0
0
0
0
0
0
200
0
0
0
0
669
0
0
0
0
0
0
75
251
0
0
0
22
23
24
All maturities
Gross purchases
Gross sales
Redemptions
23,776
8,857
7,700
26,499
4,218
3,500
24,078
2,502
1,000
5,422
0
0
997
583
0
191
3,833
800
1,062
0
0
10,683
653
0
1,697
0
0
3,066
22
0
25
26
Matched
transactions
Gross sales
Gross purchases
808,986
810,432
866,175
865,968
927,997
927,247
91,404
88,730
63,865
65,145
82,086
81,387
72,306
73,476
83,822
82,494
91,642
92,137
87,228
87,128
2/
28
Repurchase
agreements2
Gross purchases
Gross sales
127,933
127,690
134,253
132,351
170,431
160,268
44,303
32,028
36,373
46,897
0
3,168
5,657
5,657
37,653
23,881
59,340
73,111
24,167
22,108
8,908
20,477
29,989
15,023
-8,830
-8,307
2,231
22,474
-11,580
5,002
29 Net change in U.S. government securities
2,185
0
FEDERAL AGENCY OBLIGATIONS
30
31
32
Outright
transactions
Gross purchases
Gross sales
Redemptions
33
34
Repurchase
agreements2
Gross purchases
Gross sales
0
0
0
0
0
256
162
398
0
0
0
0
0
110
0
0
0
0
0
0
0
0
37
0
0
0
0
0
0
11,509
11,328
22,183
20,877
31,142
30,522
5,488
3,522
4,714
6,171
0
857
897
897
9,265
5,908
16,071
19,428
3,907
2,910
-76
1,144
222
1,965
-1,567
-857
0
3,320
-3,357
997
36 Repurchase agreements, net
-418
0
0
0
0
0
0
0
0
0
37 Total net change in System Open Market
Account
8,414
21,621
30,211
16,988
-10,397
-9,165
2,231
25,794
-14,936
5,999
35 Net change in federal agency obligations
0
BANKERS ACCEPTANCES
1. 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.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
A10
1.18
DomesticNonfinancialStatistics • October 1987
FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements1
Millions of dollars
Account
July 1
July 8
Wednesday
End of month
1987
1987
July 15
July 22
July 29
May
June
July
Consolidated condition statement
ASSETS
11,069
5,018
441
11,069
5,018
627
11,069
5,018
638
11,069
5,018
645
11,069
5,018
646
11,070
5,018
476
11,069
5,018
451
11,069
5,018
647
807
0
0
627
0
0
723
0
0
497
0
0
1,613
0
0
832
0
0
972
0
0
634
0
0
7,683
0
7,683
0
7,683
0
7,623
0
7,623
0
7,683
0
7,683
996
7,623
930
107,058
75,522
27,024
209,604
0
209,604
107,609
75,447
27,024
210,080
0
210,080
105,114
75,322
27,024
207,460
0
207,460
106,884
75,322
27,024
209,230
0
209,230
103,950
75,322
27,024
206,2%
0
206,296
107,250
73,303
26,751
207,304
0
207,304
107,702
75,522
27,024
210,248
2,058
212,306
102,526
75,322
27,023
204,871
3,299
208,170
218,094
218,390
215,866
217,350
215,532
215,819
221,957
217,357
8,319
683
7,304
683
7,133
685
6,249
687
5,542
685
6,356
678
9,801
683
5,575
687
7,782
7,112
7,787
7,235
7,794
7,261
7,799
7,383
7,804
7,648
8,035
6,426
7,782
7,183
7,666
8,096
258,518
258,113
255,464
256,200
253,944
253,878
263,944
256,115
198,814
200,778
200,174
199,083
198,898
196.714
198,255
199,115
35,369
10,005
289
490
38,325
6,142
244
322
38,004
3,351
381
618
38,368
6,038
283
286
37,950
4,711
244
342
38,144
6,383
320
372
36,102
13,774
318
458
39,501
5,365
262
281
46,153
45,033
42,354
44,975
43,247
45,219
50,652
45,409
7,056
2,265
5,841
2,232
6,344
2,358
5,603
2,288
5,379
2,186
5,434
2,300
8,190
2,356
5,071
2,341
254,288
253,884
251,230
251,949
249,710
249,667
259,453
251,936
1,962
1,873
395
1,962
1,873
394
1.966
1,873
395
1,969
1,873
409
1,970
1,873
391
1,950
1,873
388
1,961
1,873
657
1,970
1,872
337
33 Total liabilities and capital accounts
258,518
258,113
255,464
256,200
253,944
253,878
263,944
256,115
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international account
180,426
181,482
179,371
178,442
176,935
181,247
183,125
176,181
1
2
3
4
6
7
8
9
10
11
12
13
14
Gold certificate account
Special drawing rights certificate account
Coin
Loans
T o depository institutions
Other
A c c e p t a n c e s held under repurchase agreements
Federal agency obligations
Bought outright
Held under repurchase agreements
U . S . T r e a s u r y securities
Bought outright
Bills
Notes
Bonds
Total bought outrightHeld u n d e r r e p u r c h a s e a g r e e m e n t s
Total U . S . T r e a s u r y securities
15 Total loans and securities
16 Items in process of collection
17 Bank premises
Other assets
18
Denominated in foreign c u r r e n c i e s '
19
All o t h e r 4
20 Total assets
LIABILITIES
21 Federal Reserve notes
Deposits
22
T o depository institutions
23
U.S. Treasury—General account
24
Foreign—Official a c c o u n t s
25
Other
26 Total deposits
27 Deferred credit items
28 Other liabilities and a c c r u e d dividends'*
29 Total liabilities
CAPITAL
ACCOUNTS
30 Capital paid in
31 Surplus
32 O t h e r capital a c c o u n t s
Federal Reserve note statement
35 Federal Reserve notes outstanding issued to bank
36
LESS: Held by bank
Federal Reserve notes, net
37
Collateral held against notes net:
38
Gold certificate account
39
Special drawing rights certificate account
40
O t h e r eligible assets
41
U . S . Treasury and agency securities
244,393
45,579
198,814
244,782
44,004
200,778
245,777
45,603
200,174
246,450
47,367
199,083
247,480
48,582
198,898
241,604
44,890
196,714
244,360
46,105
198,255
247,656
48,541
199,115
11,069
5,018
0
182,727
11,069
5,018
0
184,691
11,069
5,018
0
184,087
11,069
5,018
0
182,996
11,069
5,018
0
182,811
11,070
5,018
0
180,626
11,069
5,018
0
182,168
11,069
5,018
0
183,028
42 Total collateral
198,814
200,778
200,174
199,083
198,898
196,714
198,255
199,115
1. Some of these data also appear in the Board's H.4.1 (503) release. For
a d d r e s s , see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of C h i c a g o
in Treasury bills maturing within 90 d a y s .
5. Includes exchange-translation a c c o u n t reflecting the monthly revaluation at
market exchange rates of foreign-exchange c o m m i t m e n t s .
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holdings
Millions of dollars
T y p e and maturity groupings
July 1
1 Loans—Total
2
Within 15 days . . .
3
16 d a y s to 90 days
4
91 d a y s to 1 year .
5 Acceptances—Total..
6
Within 15 d a y s
7
16 d a y s to 90 d a y s
8
91 d a y s to 1 year ..
9 U . S . T r e a s u r y securities—Total
10
Within 15 d a y s '
11
16 days t o 80 d a y s
12
91 d a y s to 1 year
13
O v e r 1 year to 5 years
14
O v e r 5 years to 10 years
1 5 0 v e r 10 y e a r s
16 Federal agency obligations—Total
17
Within 15 days 1
18
16 days to 90 d a y s
19
91 d a y s to 1 year
20
O v e r 1 year to 5 years
21
O v e r 5 years to 10 years
22
O v e r 10 years
July 8
Wednesday
End of month
1987
1987
July 15
July 22
July 29
May 29
J u n e 30
July 31
807
660
147
0
627
472
155
0
723
571
152
0
497
471
26
0
1,613
1,582
31
0
832
752
80
0
972
887
85
0
634
503
131
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
209,604
10,383
47,368
70,894
41,956
14,742
24,261
210.080
11,215
51,135
66,846
41,881
14,742
24,261
207,460
8,345
48,786
69,657
41,709
14,702
24,261
209,230
11,592
47,449
69,517
41,709
14,702
24,261
206,2%
12,059
45,756
67,809
41,709
14,702
24,261
207,304
8,970
51,848
66,885
41,160
14,430
24,011
212,306
8,789
51.563
70,995
41,956
14,742
24,261
208,170
12,461
49,845
65,929
40,972
14,702
24,261
7,683
22
614
1,659
3,814
1,294
280
7,683
81
826
1,389
3,814
1,293
280
7,683
68
906
1,300
3,826
1,303
280
7,623
132
838
1,311
3,774
1,288
280
7,623
164
843
1,307
3,741
1,288
280
7,683
281
532
1,521
3,763
1,306
280
8,679
1,229
614
1,449
3.814
1,293
280
8,553
1,093
843
1,307
3,741
1,289
280
Holdings under r e p u r c h a s e a g r e e m e n t s are classified as maturing within 15 days in accordance with maximum maturity of the a g r e e m e n t s .
A12
DomesticNonfinancialStatistics • October 1987
1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE
Billions of dollars, averages of daily figures
1986
Item
1983
Dec.
1984
Dec.
1985
Dec.
1987
1986
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
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 '
1 Total reserves 2
2
3
4
5
Nonborrowed reserves
N o n b o r r o w e d r e s e r v e s plus e x t e n d e d credit
Required reserves
Monetary base4
36.16
39.51
46.06
56.17
56.17
56.88
56.87
56.85
57.95
58.35
57.71
57.61
35.38
35.38
35.59
185.38
36.32
38.93
38.66
199.20
44.74
45.24
45.00
217.32
55.34
55.64
54.80
239.51
55.34
55.64
54.80
239.51
56.30
56.53
55.82
242.43
56.32
56.60
55.66
243.97
56.33 r
56.59
55.94
244.56
56.96
57.23
57.13
246.59
57.32
57.60
57.27
248.37
56.93
57.20
56.52
248.48
56.93
57.12
56.84
249.46
Notseasonallyadjusted
6 Total reserves 2
7
8
9
10
Nonborrowed reserves
N o n b o r r o w e d r e s e r v e s plus e x t e n d e d credit
Required reserves
Monetary base4
36.87
40.57
47.24
57.64
57.64
58.73
56.09
56.07
58.37
57.30
57.63
57.74
36.09
36.10
36.31
188.65
37.38
39.98
39.71
202.34
45.92
46.42
46.18
220.82
56.81
57.11
56.27
243.63
56.81
57.11
56.27
243.63
58.15
58.38
57.66
243.42
55.53
55.81'
54.88
240.82
55.54
55.80'
55.15
241.93
57.38
57.65
57.54
246.07
56.26
56.55
56.22
246.83
56.85
57.12
56.44'
249.29
57.07
57.27
56.98
251.42
38.89
40.70
48.14
59.56
59.56
59.67
57.06
57.06
59.39
58.34
58.78
58.84
38.12
38.12
38.33
192.26
37.51
40.09
39.84
204.18
46.82
47.41
47.08
223.53
58.73
59.04
58.19
247.71
58.73
59.04
58.19
247.71
59.09
59.32
58.60
246.75
56.50
56.74
55.85
244.22
56.53
56.82
56.15
244.98
58.40
58.19
58.57
249.24
57.30
58.03
57.26
249.94
58.01
58.34
57.59
252.54
58.16
58.37
58.08
254.67
N O T 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 5
11 Total reserves 2
12
13
14
15
Nonborrowed reserves
N o n b o r r o w e d r e s e r v e s plus e x t e n d e d credit 3
Required reserves
Monetary base4
1. Figures i n c o r p o r a t e a d j u s t m e n t s f o r discontinuities a s s o c i a t e d with the
i m p l e m e n t a t i o n of the M o n e t a r y C o n t r o l Act and o t h e r regulatory c h a n g e s to
r e s e r v e r e q u i r e m e n t s . T o a d j u s t f o r discontinuities d u e to 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 o n r e s e r v a b l e n o n d e p o s i t liabilities, the s u m of such required
r e s e r v e s is s u b t r a c t e d f r o m the actual series. Similarly, in a d j u s t i n g f o r
discontinuities in the m o n e t a r y b a s e , r e q u i r e d clearing b a l a n c e s a n d a d j u s t m e n t s
to c o m p e n s a t e f o r float a l s o are s u b t r a c t e d f r o m the actual series.
2. Total r e s e r v e s not a d j u s t e d f o r discontinuities consist of r e s e r v e b a l a n c e s
with F e d e r a l R e s e r v e B a n k s , w h i c h e x c l u d e r e q u i r e d clearing b a l a n c e s and
a d j u s t m e n t s to c o m p e n s a t e f o r float, plus vault c a s h held during the lagged
c o m p u t a t i o n period by institutions having required r e s e r v e b a l a n c e s at F e d e r a l
R e s e r v e B a n k s p l u s t h e a m o u n t of vault c a s h equal t o r e q u i r e d r e s e r v e s during t h e
m a i n t e n a n c e period at institutions having no required r e s e r v e b a l a n c e s .
3. E x t e n d e d credit c o n s i s t s of b o r r o w i n g at the d i s c o u n t w i n d o w u n d e r the
t e r m s a n d c o n d i t i o n s e s t a b l i s h e d f o r the e x t e n d e d credit p r o g r a m t o help
d e p o s i t o r y institutions deal with s u s t a i n e d liquidity p r e s s u r e s . B e c a u s e t h e r e is
not the s a m e need to r e p a y s u c h b o r r o w i n g p r o m p t l y a s t h e r e is with traditional
s h o r t - t e r m a d j u s t m e n t c r e d i t , t h e m o n e y m a r k e t impact of e x t e n d e d credit is
similar t o that of n o n b o r r o w e d r e s e r v e s .
4. T h e m o n e t a r y base not a d j u s t e d f o r discontinuities c o n s i s t s of total r e s e r v e s
p l u s r e q u i r e d clearing b a l a n c e s and a d j u s t m e n t s to c o m p e n s a t e f o r float at F e d e r a l
R e s e r v e B a n k s a n d the c u r r e n c y c o m p o n e n t of the m o n e y s t o c k less the a m o u n t
of vault c a s h holdings of thrift institutions that is included in t h e c u r r e n c y
c o m p o n e n t of the m o n e y s t o c k p l u s , f o r institutions not h a v i n g r e q u i r e d r e s e r v e
b a l a n c e s , the e x c e s s of c u r r e n t vault c a s h o v e r the a m o u n t applied t o s a t i s f y
c u r r e n t r e s e r v e r e q u i r e m e n t s . A f t e r the i n t r o d u c t i o n of c o n t e m p o r a n e o u s r e s e r v e
r e q u i r e m e n t s ( C R R ) , c u r r e n c y a n d vault c a s h figures a r e m e a s u r e d o v e r the
weekly c o m p u t a t i o n period e n d i n g M o n d a y .
B e f o r e C R R , all c o m p o n e n t s of the m o n e t a r y base o t h e r than e x c e s s r e s e r v e s
are seasonally a d j u s t e d a s a w h o l e , r a t h e r t h a n by c o m p o n e n t , a n d e x c e s s
r e s e r v e s are a d d e d on a not s e a s o n a l l y a d j u s t e d basis. A f t e r C R R , the s e a s o n a l l y
a d j u s t e d series c o n s i s t s of s e a s o n a l l y a d j u s t e d total r e s e r v e s , w h i c h include
e x c e s s r e s e r v e s on a not seasonally a d j u s t e d basis, plus t h e s e a s o n a l l y a d j u s t e d
c u r r e n c y c o m p o n e n t of the m o n e y s t o c k a n d the r e m a i n i n g i t e m s s e a s o n a l l y
adjusted as a whole.
5. R e f l e c t s actual r e s e r v e r e q u i r e m e n t s , including t h o s e o n n o n d e p o s i t liabilities, with no a d j u s t m e n t s to eliminate the e f f e c t s of discontinuities a s s o c i a t e d with
implementation of the M o n e t a r y C o n t r o l Act o r o t h e r r e g u l a t o r y c h a n g e s t o
reserve requirements.
NOTE. L a t e s t m o n t h l y a n d b i w e e k l y f i g u r e s are available f r o m the B o a r d ' s
H.3(502) statistical r e l e a s e . Historical d a t a and e s t i m a t e s of t h e i m p a c t o n
required r e s e r v e s of 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 a r e available f r o m the
B a n k i n g S e c t i o n , Division of R e s e a r c h a n d Statistics, B o a r d of G o v e r n o r s of t h e
F e d e r a l R e s e r v e S y s t e m , W a s h i n g t o n , D . C . 20551.
Monetary and Credit Aggregates
1.21
A13
MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Billions of dollars, averages of daily figures
1987
Item 1
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
Apr/
May r
June'
July
Seasonally adjusted
7
8
9
557.5
2,369.1
2,985.4
3,529.0
5,946.2
627.0
2,569.5
3,205.5
3,838.9
6,774.9
730.5
2,800.1
3,489.1
4,141.1
7,630.4
750.3
2,837.9
3,538.8
4,185.8
7,845.1
753.1
2,838.7
3,552.8
4,217.8
7,914.6
746.6
2,840.3
3,567.4
4,226.0
7,979.5
747.6
2,846.0
3,572.5
n.a.
n.a.
148.3
4.9
242.3
131.4
158.5
5.2
248.3
145.5
170.6
5.9
272.2
178.3
183.5
6.4
308.3
232.2
188.9
6.8
303.9
250.7
190.2
6.7
303.9
252.2
191.1
6.8
297.4
251.2
192.1
6.7
296.2
252.5
1,657.7
508.2
1,811.5
616.3
1,942.5
636.1
2,069.7
689.0
2,087.6
700.9
2,085.6
714.1
2,093.7
727.1
2,098.4
726.5
526.9
2,184.6
2,692.8
3,154.6
5,206.2'
1 Ml
7 M2
M3
4 L
5 Debt
M l components
Currency 2
Travelers checks
Demand deposits 4
Other checkable deposits
10
11
Nontransactions c o m p o n e n t s
In M 2 6 . . .
In M3 only
12
13
Savings deposits 8
Commercial Banks
Thrift institutions
133.2
173.0
122.2
166.6
124.6
179.0
154.5
211.8
172.2
233.8
174.5
237.2
175.5
239.7
176.6
240.1
14
15
Small denomination time deposits 9
Commercial Banks
Thrift institutions
350.9
432.9
386.6
498.6
383.9
500.3
364.7
488.7
357.5
486.1
357.1
485.9
360.2
489.9
363.4
494.9
16
17
Money market mutual f u n d s
General purpose and broker/dealer
Institution-only
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
211.0
83.1
209.1
81.8
210.2
81.3
210.4
83.4
18
19
Large denomination time deposits 1 0
Commercial Banks
Thrift institutions
230.0
96.2
269.6
147.3
284.1
152.1
291.8
155.3
305.9
148.7
310.7
149.0
314.9
150.1
313.6
151.2
20
21
Debt c o m p o n e n t s
Federal debt
Nonfederal debt
1,170.5
4,035.7 r
1,365.3
4,580.9
1,584.6
5,190.3
1,841.1
6,004.0
1,864.2
6,050.3
1,887.4
6,092.1
n.a.
n.a.
1,804.5
5,825.9'
Not seasonally adjusted
7?
73
74
75
26
Ml
M2
M3
L
Debt
27
28
29
30
M l components
Currency"
Travelers checks 3
Demand deposits 4
Other checkable deposits 5
31
32
Nontransactions components
M2 6
M3 only 7
33
34
Money market deposit accounts
Commercial Banks
Thrift institutions
538.3
2,191.6
2,702.4
3,163.1
5,200.7
570.3
2,378.3
2,997.2
3,539.7
5,940.6
641.0
2,580.5
3,218.8
3,850.7
6,768.3
746.5
2,813.6
3,504.4
4,154.5
7,623.1'
757.5
2,846.6
3,546.9
4,193.8
7,817.5
744.9
2.827.7
3,543.0
4,202.2
7,878.2
749.1
2,841.4
3,565.3
4,225.3
7,937.7
751.5
2,853.1
3,572.4
n.a.
n.a.
150.6
4.6
251.0
132.2
160.8
4.9
257.2
147.4
173.1
5.5
282.0
180.4
186.2
6.0
319.5
235.0
188.0
6.4
305.8
257.4
190.2
6.5
298.8
249.4
191.9
7.1
298.8
251.3
193.8
7.7
298.7
251.4
1,653.3
510.8
1,808.0
618.9
1,939.5
638.3
2,067.1
690.7
2,089.0
700.3
2,082.7
715.3
2,092.3
723.9
2,101.6
719.3
230.4
148.5
267.4
150.0
332.5
180.7
379.0
192.4
375.4
190.0
368.9
188.3
367.6
185.9
365.2
182.8
8
35
36
Savings deposits
Commercial Banks
Thrift institutions
132.2
172.4
121.4
166.2
123.9
178.8
153.8
211.8
172.1
234.0
174.8
237.8
176.6
240.8
178.4
241.8
37
38
Small denomination time deposits 9
Commercial Banks
Thrift institutions
351.1
433.5
386.7
499.6
383.8
501.5
364.4
489.8
355.6
484.4
355.7
482.6
359.7
487.1
363.9
494.5
39
40
Money market mutual f u n d s
General purpose and broker/dealer
Institution-only
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
211.0
83.1
209.1
81.8
210.2
81.3
210.4
83.4
41
42
Large denomination time deposits 1 0
Commercial Banks
Thrift institutions
231.6
96.3
271.2
147.3
285.6
151.9
293.2
154.9
303.2
148.0
309.2
149.0
311.8
149.7
310.3
150.6
43
44
Debt c o m p o n e n t s
Federal debt
Nonfederal debt
1,170.2
4,030.5
1,364.7
4,575.8
1,583.7
5,184.5
1,846.7
5,970.7
1,857.8
6,020.4
1,869.1
6,068.6
F o r notes see following page.
1,803.3
5,819.8 r
n.a.
n.a.
A14
DomesticNonfinancialStatistics • October 1987
N O T E S T O T A B L E 1.21
1. Composition of the money stock measures and debt is as follows:
M l : (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial b a n k s 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) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. T h e currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their O C D liabilities.
M2: M l plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U . S banks worldwide, M M D A s , savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker/dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
f u n d s . Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker/dealer), foreign governments and commercial
banks, and the U . S . government. Also subtracted is a consolidation adjustment
that represents the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U . S . residents at foreign branches of U . S . banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
f u n d s . Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted
is a consolidation adjustment that represents the estimated amount of overnight
RPs and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are based on monthly averages.
2. Currency outside the U . S . Treasury, Federal Reserve Banks, a n d , vaults of
commercial banks. Excludes the estimated amount of vault cash held by thrift
institutions to service their O C D liabilities.
3. Outstanding amount of U.S. dollar-denominated travelers c h e c k s of
nonbank issuers. Travelers checks issued by depository institutions are included
in demand deposits.
4. Demand deposits at commercial banks and foreign-related institutions other
than those due to domestic banks, the U . S . government, and foreign b a n k s and
official institutions less cash items in the process of collection and Federal
Reserve float. Excludes the estimated amount of d e m a n d deposits held at
commercial banks by thrift institutions to service their O C D liabilities.
5. Consists of N O W and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions. Other
checkable deposits seasonally adjusted equals the difference between the seasonally adjusted sum of demand deposits plus O C D and seasonally adjusted d e m a n d
deposits. Included are all ceiling free " S u p e r N O W s , " authorized by the
Depository Institutions Deregulation committee to be offered beginning Jan. 5,
1983.
6. Sum of overnight RPs and overnight Eurodollars, money market fund
balances (general purpose and broker/dealer), M M D A s , and savings and small
time deposits, less the consolidation adjustment that represents the estimated
amount of demand deposits and vault cash held by thrift institutions to service
their time and savings deposits liabilities.
7. Sum of large time deposits, term RPs, and term Eurodollars of U . S .
residents, money market fund balances (institution-only), less a consolidation
adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds.
8. Savings deposits exclude M M D A s .
9. Smnall-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All individual retirement a c c o u n t s (IRA) and
Keogh accounts at commercial b a n k s and thrifts are subtracted f r o m small time
deposits.
10. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
11. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
NOTE: Latest monthly and weekly figures are available f r o m the B o a r d ' s H . 6
(508) release. Historical data are available f r o m the Banking Section, Division of
Research and Statistics, Board of Governors of the Federal Reserve S y s t e m ,
Washington, D.C. 20551.
Monetary and Credit Aggregates
1.22
A15
B A N K DEBITS A N D DEPOSIT T U R N O V E R
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1987
1986
Bank group, or type of customer
Feb.
Jan.
Apr.
May
June
Seasonally adjusted
D E B I T S TO
Demand deposits
1
All insured banks
2
Major N e w York City banks
3
Other banks
i
4 A T S - N O W accounts 3
5 Savings deposits
Mar.
128,440.8
57,392.7
71,048.1
1,588.7
633.1
154,556.0
70,445.1
84,110.9
1,920.8
539.0
189,534.1
91,212.9
98,321.4
2,351.1
410.3
210,574.2
99,357.1
111,217.1
2,255.7
459.2
211,169.4
98,712.3
112,457.1
2,306.0
477.7
217,019.7
104,224.5
112,795.2
2,344.6
468.6
224,603.0
107,159.2
117,443.7
2,384.7
528.0
222,774.5
106,599.1
116,175.4
2,425.1
508.9
212,202.0
100,320.9
111,881.1
2,437.0
568.2
434.4
1,843.0
268.6
15.8
5.0
496.5
2,168.9
301.8
16.7
4.5
561.8
2,460.6
327.4
16.8
3.1
580.3
2,426.4
345.5
13.4
2.9
594.7
2,461.0
357.0
13.5
2.9
613.8
2,707.8
358.0
13.6
2.8
627.0
2,711.5
368.5
13.6
3.1
613.0
2,660.3
359.3
13.9
2.9
594.9
2,713.7
349.9
14.0
3.3
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 2
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts 3
Savings deposits
Not seasonally adjusted
D E B I T S TO
Demand deposits
11
All insured banks
12
Major N e w York City banks
13
Other banks
14 A T S - N O W accounts 3
15 MMDA
16 Savings deposits
128,059.1
57,282.4
70,776.9
1,579.5
848.8
632.9
154,108.4
70,400.9
83,707.8
1,903.4
1,179.0
538.7
189,443.3
91,294.4
98,149.0
2,338.4
1,599.3
404.3
216,638.7
102,274.2
114,364.5
2,679.2
1,913.3
499.0
191,572.9
89,866.7
101,706.2
2,173.2
1,600.7
434.6
222,532.0
106,161.2
116,370.8
2,422.7
1,754.4
476.2
229,095.0
108,597.8
120,497.3
2,735.8
2,071.1
570.8
209,229.8
98,828.3
110,401.5
2,420.5
1,786.2
492.4
224,042.8
106,422.2
117,620.6
2,617.4
1,901.2
571.5
433.5
1,838.6
267.9
15.7
3.5
5.0
497.4
2,191.1
301.6
16.6
3.8
4.5
564.0
2,494.3
327.9
16.8
4.5
3.1
579.9
2,345.5
346.6
15.7
5.1
3.1
550.0
2,273.2
329.4
12.9
4.3
2.7
641.0
2,742.6
377.3
14.1
4.7
2.9
635.1
2,755.6
375.0
15.2
5.6
3.4
582.7
2,496.3
345.6
14.0
4.9
2.8
630.0
2,816.8
370.1
15.1
5.2
3.3
DEPOSIT TURNOVER
17
18
19
20
21
22
Demand deposits 2
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts 3
MMDA
Savings deposits
1. Annual averages of monthly figures.
2. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). A T S data are
available beginning December 1978.
4. Excludes ATS and N O W accounts, M M D A and special club accounts, such
as Christmas and vacation clubs.
5. Money market deposit accounts.
NOTE. Historical data for demand deposits are available back to 1970 estimated
in part from the debits series for 233 S M S A s that were available through J u n e
1977. Historical data for A T S - N O W and savings deposits are available back to
July 1977. Back data are available on request f r o m the Banking Section, Division
of Research and Statistics, Board of Governors of the Federal Reserve S y s t e m ,
Washington, D.C. 20551.
These data also appear on the B o a r d ' s G.6 (406) release. For address, see inside
front cover.
A16
1.23
DomesticNonfinancialStatistics • October 1987
LOANS AND SECURITIES
All C o m m e r c i a l B a n k s 1
Billions of dollars; averages of Wednesday figures
1986
1987
Category
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Seasonally adjusted
1 Total loans and securities 2
2 U.S. government securities
3 Other securities
4 Total loans and leases"
5
Commercial and industrial . . . . .
6
Bankers acceptances held . . .
7
Other commercial and
industrial
8
U.S. addressees 4
9
N o n - U . S . addressees 4
10
Real estate
11
Individual
12
Security
13
Nonbank financial
institutions
14
Agricultural
15
State and political
subdivisions
16
Foreign banks
1/
Foreign official institutions
18
Lease financing receivables . . . .
19
All other loans
2,022.6
2,044.6
2,052.4
2,063.5
2,089.8
2,118.3
2,119.7
2,126.2
2,147.3
2,160.6
2,166.3
2,169.0
291.5
196.0
1,535.1
515.2
6.5
294.9
204.2
1,545.4
517.3
6.6
299.6
199.8
1,553.0
520.0
6.7
304.1
197.9
1,561.5
525.7
6.4
309.9
196.9
1,583.0
541.4
6.4
316.3
190.2
1.611.8
554.1
6.8
315.2
193.8
1,610.7
553.8
6.8
314.3
195.5
1,616.4
551.7
6.2
315.8
197.2
1,634.3
553.9
6.5
320.1
197.6
1,642.9
555.9
6.8
316.7
198.5
1,651.2
558.1
6.8
319.7
196.9
1,652.4
555.6
6.7
508.7
499.8
8.9
464.8
308.1
43.1
510.7
501.7
9.0
468.9
309.9
42.8
513.3
504.6
8.8
474.2
311.2
39.1
519.2
510.7
8.5
479.6
312.6
40.1
535.0
525.7
9.4
489.0
314.2
38.6
547.2
537.8
9.5
499.2
314.9
37.7
546.9
537.9
9.1
504.0
315.2
38.5
545.5
536.8
8.7
511.0
315.7
38.3
547.4
538.9
8.5
517.9
316.6
43.6
549.0
540.8
8.2
526.3
316.7
42.0
551.3
542.8
8.5
536.8
314.6
42.5
548.9
540.6
8.3
544.0
314.3
41.7
34.5
33.0
34.9
32.7
35.5
32.4
34.9
32.2'
35.2
31.8'
35.7
31.4''
34.7
30.8'
35.0
30.0'
35.4
29.8'
35.4
29.9'
33.9
29.9'
31.9
30.0
60.1
10.1
6.1
20.7
39.6
60.0
10.1
6.0
21.1
41.8
59.3
10.0
6.0
21.8
43.4
58.7
10.0
5.9
22.0
39.9'
57.9
10.4
5.8
22.2
36.4''
57.8
10.6
5.9
22.1
42.4''
57.2
10.3
6.1
22.2
38.0'
56.9
9.7
6.7
22.3
38.9'
56.0
9.9
6.7
22.6
41.9'
55.2
9.9
5.8
22.9
43.0'
54.4
10.3
5.3
23.0
42.4'
53.2
9.4
5.2
23.2
43.9
Not seasonally adjusted
20 Total loans and securities 2
2,015.1
2,042.3
2,044.0
2,064.2
2,105.2
2,123.7
2,121.6
2,127.8
2,148.4
2,157.9
2,166.1
2,164.1
21 U.S. government securities
22 Other securities
23 Total loans and leases 24
Commercial and industrial
25
Bankers acceptances h e l d 3 . . .
26
Other commercial and
industrial
27
U.S. addressees 4
28
N o n - U . S . addressees 4
29
Real estate
30
Individual
31
Security
32
Nonbank financial
institutions
33
Agricultural
34
State and political
subdivisions
35
Foreign banks
36
Foreign official institutions
37
Lease financing receivables . . . .
38
All other loans
290.5
196.2
1,528.4
512.8
6.3
293.8
205.0
1,543.5
516.1
6.7
296.1
200.1
1,547.8
517.8
6.6
303.2
198.3
1,562.6
525.2
6.6
308.3
198.1
1,598.7
544.3
6.7
314.6
193.7
1,615.4
552.4
6.7
318.9
194.1
1,608.6
551.7
6.7
317.2
194.4
1,616.2
554.5
6.2
317.7
195.2
1,635.4
556.5
6.4
319.7
196.8
1,641.4
557.5
6.7
317.1
197.0
1,651.9
559.3
6.9
320.9
194.8
1,648.4
554.7
6.8
506.5
497.3
9.1
464.9
307.9
40.7
509.4
500.2
9.2
469.9
310.8
41.3
511.2
502.1
9.1
475.1
312.3
37.8
518.5
509.5
9.1
480.7
313.7
40.4
537.6
528.8
8.8
489.9
317.8
40.9
545.8
537.1
8.7
499.3
317.9
39.4
545.0
536.3
8.7
503.1
314.7
37.5
548.3
539.9
8.4
509.8
313.3
38.6
550.0
541.6
8.4
516.7
314.4
45.1
550.8
542.4
8.4
525.4
314.8
42.1
552.4
543.7
8.7
536.5
313.2
43.2
547.9
539.1
8.8
544.2
313.2
40.9
34.8
33.9
35.6
33.7
35.6
33.1
35.4
32.3''
36.4
31.5''
35.7
30.7'
33.8
29.9'
33.8
29.1'
34.8
29.1'
34.9
29.7'
34.0
30.3'
31.9
30.7
60.1
9.9
6.1
20.6
36.8
60.0
10.3
6.0
21.0
39.0
59.3
10.0
6.0
21.5
39.1
58.7
10.1
5.9
21.8
38.5 r
57.9
10.9
5.8
22.2
41.2'
57.8
10.7
5.9
22.4
43.1''
57.2
10.5
6.1
22.4
41.5'
56.9
9.7
6.7
22.5
41.2'
56.0
9.5
6.7
22.7
43.9'
55.2
9.6
5.8
22.9
43.5'
54.4
10.0
5.3
23.0
42.8'
53.2
9.4
5.2
23.1
41.9
1. These data also appear in the Board's G.7 (407) release.
2. Excludes loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the 50 states and the District of Columbia.
Commercial Banking Institutions
A17
1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Monthly averages, billions of dollars
1987
1986
Source
Total nondeposit fund£
Seasonally adjusted*
Not seasonally adjusted
Federal funds, RPs, and other
borrowings from nonbanks
3
Seasonally adjusted
4
Not seasonally adjusted
5 Net balances due to foreign-related
institutions, not seasonally
adjusted
1
2
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
137.9
137.8
142.6
141.9
140.5
139.6'
144.2
145.7
145.0'
145. 1'
153.5
153.0
157.5
160.1
161.6
163.9
157.5
157.6
165.4
166.2
160.7
158.2'
152.8
149.8
167.4
167.3
166.9
166.2
167.8
166.9
166.0
167.5
164.0
164.1
169.1
168.6
169.4
172.0
167.8
170.1
167.7
167.8
165.5
166.2
162.6
160.0
160.5
157.5
-29.5
-24.3
-27.3
-21.8
-19.0r
-15.6
-11.9
-6.2
-10.2
.0
-1.9
-7.6
-31.2
75.2
44.0
-29.2
74.0
44.8
-31.9
73.5
41.6
-28.7
70.8
42.1
-30.6'
73.3''
42.7
-26.1
71.6
45.5
-23.7
68.3
44.6
-21.1
66.1
45.0
-22.9
70.5
47.6
-15.6
68.5
52.9
-15.6
67.1
51.6'
-22.2
66.5
44.2
1.7
66.3
67.9
4.9
67.9
72.7
4.6
68.2'
72.9
6.9
68.7
75.6
11.6
70.8
82.5
10.5
75.0
85.5
11.8
72.9
84.7
14.9
71.1
86.0
12.7
72.6
85.3
15.5
75.4
90.9
13.7
77.1
90.8
14.6
77.1
91.7
95.9
95.8
95.9
95.2
97.0
96.1
96.9
98.5
97.0
97.1
99.2
98.7
95.5
98.1
92.5
94.8
95.3
95.4
95.1
95.9
96.4
93.8
96.5
93.5
14.5
11.1
16.5
18.2
17.1
15.3
23.2
15.3
21.2
19.2
21.3
27.5
23.2
28.6
17.7
17.1
20.7
21.6
26.1
30.8
27.9'
25.5
24.7
26.6
344.3
344.0
344.1
345.5
342.5
343.7
343.2
343.9
345.6
347.0
350.1
351.3
351.1
353.2
354.1
356.4
359.8
357.2'
366.2
364.8'
372.9'
369.8'
371.8
368.5
MEMO
6 Domestically chartered banks' net
positions with own foreign
branches, not seasonally
7
Gross due f r o m balances
8
Gross due to balances
9 Foreign-related institutions' net
positions with directly related
institutions, not seasonally
adjusted'
10
Gross due from balances
11
Gross due to balances
Security R P borrowings
1?
Seasonally adjusted
13
Not seasonally adjusted
U . S . Treasury demand b a l a n c e s '
14
Seasonally adjusted
15
Not seasonally adjusted
Time deposits, $100,000 or more 8
16
Seasonally adjusted
17
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. N e w
York investment companies majority owned by foreign banks, and Edge Act
corporations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal f u n d s , RPs, and other borrowings f r o m
nonbanks and not seasonally adjusted net Eurodollars.
3. Other 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 f r o m Federal Reserve Banks and from foreign
banks, term federal funds, overdrawn due f r o m bank balances, loan RPs, and
participations in pooled loans.
4. Averages of daily figures for m e m b e r and n o n m e m b e r banks.
5. Averages of daily data.
6. Based on daily average data reported by 122 large banks.
7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
8. Averages of Wednesday figures.
A18
DomesticNonfinancialStatistics • October 1987
1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS
Last-Wednesday-of-Month Series1
Billions of dollars
1986
1987
Account
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
2,179.7
469.4
276.6
192.8
27.9
1,682.4
139.8
1,542.5
515.9
470.5
311.2
244.9
2,183.2
471.9
282.8
189.1
26.0
1,685.3
141.2
1,544.1
517.2
476.2
312.8
237.8
2,227.3
475.4
287.3
188.0
28.1
1,723.8
154.7
1,569.1
524.9
481.8
314.1
248.2
2,314.3
479.6
292.6
187.0
27.8
1,807.0
168.9
1,638.1
568.2
497.5
320.4
252.0
2,284.8
482.2
296.1
186.1
26.4
1,776.3
160.1
1,616.2
551.1
499.9
317.0
248.3
2,279.4
484.7
298.8
185.9
29.0
1,765.6
156.7
1,608.9
551.5
503.5
314.7
239.2
2,279.2
486.2
299.5
186.7
25.2
1,767.8
154.3
1,613.5
555.3
510.7
313.1
234.4
2,306.2
492.5
305.1
187.5
23.3
1,790.3
151.8
1,638.5
555.5
519.0
315.2
248.9
2,318.9
495.4
307.0
188.4
21.4
1,802.1
160.4
1,641.7
558.2
527.4
314.8
241.3
2,312.6
493.0
303.2
189.8
20.1
1,799.5'
151.0
1,648.6
558.2 r
538.7'
312.8
238.9'
2,323.3
497.4
308.0
189.4
20.4
1,805.5
157.4
1,648.1
551.7
546.9
314.3
235.3
199.3
28.2
22.9
66.2
203.5
31.6
23.5
66.2
227.0
32.2
22.2
86.5
273.7
41.2
25.7
111.3
214.4
33.4
23.7
74.5
206.3
28.4
23.5
71.4
203.8
31.1
22.9
68.1
209.7
29.8
24.0
74.5
230.8
37.9
25.1
81.3
213.2
33.8
24.2
74.4
207.1
32.8
24.4
68.6
32.8
49.2
33.1
49.0
38.3
47.9
43.3
52.3
34.0
48.8
33.0
50.1
32.7
49.0
33.9
47.5
37.2
49.3
31.1
49.7
31.7
49.5
ALL COMMERCIAL BANKING
INSTITUTIONS2
1 Loans and securities
2
Investment securities
3
U.S. government securities
4
Other
5
Trading account assets
6
Total loans
7
Interbank loans
8
Loans excluding interbank
9
Commercial and industrial
10
Real estate
11
Individual
12
All other
13 Total cash assets
14
Reserves with Federal Reserve Banks.
15
Cash in vault
16
Cash items in process of collection . . .
17
Demand balances at U . S . depository
institutions
18
Other cash assets
201.4
198.6
202.2
224.8
201.3
201.1
202.1
204.0
208.7
204.1
189.2
20 Total assets/total liabilities and c a p i t a l . . . .
19 Other assets
2,580.4
2,585.3
2,656.5
2,812.8
2,700.5
2,686.8
2,685.2
2,719.9
2,758.3
2,729.9
2,719.6
21
22
23
24
25
26
27
1,834.5
538.9
505.5
790.1
391.6
176.3
178.1
1,847.1
548.8
516.0
782.2
383.3
175.7
179.2
1,900.2
596.3
522.9
781.1
397.4
180.0
178.9
2,018.0
691.1
535.0
791.9
414.5
199.6
180.6
1,898.3
577.8
532.3
788.2
432.7
188.0
181.5
1,895.5
569.2
535.9
790.3
425.6
184.6
181.2
1,899.6
568.8
539.7
791.2
414.9
188.7
181.9
1,919.5
590.7
535.1
793.6
422.7
195.2
182.5
1,939.1
596.9
538.6
803.6
435.6
200.3
183.3
1,923.8
578.3
535.1'
810.3'
428.2
200.5
177.4
1,924.9
573.9
536.2
814.8
423.5
200.6
170.6
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
MEMO
28 U . S . government securities (including
trading account)
29 Other securities (including trading account)
293.2
299.5
304.8
308.4
314.5
320.1
316.7
318.9
320.6
315.5
322.4
204.1
198.4
198.8
198.9
194.1
193.7
194.7
196.9
196.1
197.6
195.4
2,044.8
450.5
267.9
182.5
27.9
1,566.4
115.6
1,450.8
448.1
464.3
310.9
227.5
2,052.1
452.9
273.6
179.3
26.0
1,573.2
118.8
1,454.3
449.0
470.0
312.5
222.7
2,094.7
457.1
279.0
178.2
28.1
1,609.5
133.0
1,476.4
455.7
475.1
313.8
231.8
2,154.4
459.3
283.0
176.3
27.8
1,667.3
137.9
1,529.5
488.2
490.3
320.1
230.9
2,136.7
461.5
286.8
174.8
26.4
1,648.8
134.3
1,514.5
475.5
493.2
316.7
229.2
2,130.3
463.3
289.2
174.1
29.0
1,638.0
130.5
1,507.5
474.1
497.0
314.4
221.9
2,121.7
463.6
289.4
174.2
25.2
1,632.9
124.1
1,508.8
474.6
504.1
312.7
217.4
2,146.9
470.0
295.2
174.8
23.3
1,653.6
124.2
1,529.3
473.5
512.0
314.9
229.0
2,156.2
471.5
296.7
174.8
21.4
1,663.3
128.6
1,534.7
475.3
520.3
314.5
224.7
2,151.0
469.6
293.8
175.8
20.1
1,661.2'
121.5
1,539.7
471.8'
531.7'
312.5
223.8
2,156.7
473.6
298.2
175.4
20.4
1,662.7
122.7
1,540.0
466.0
539.5
313.9
220.6
182.5
26.9
22.9
65.8
185.6
29.7
23.5
65.6
210.0
29.8
22.2
86.1
253.5
39.7
25.7
110.9
196.6
31.2
23.6
74.0
188.9
27.1
23.5
71.0
186.5
29.7
22.8
67.7
192.5
27.2
24.0
74.0
213.2
35.9
25.0
80.9
195.4
32.1
24.1
73.8'
189.1
31.4
24.4
68.2
30.9
36.0
31.3
35.5
36.3
35.6
40.8
36.4
32.2
35.6
31.1
36.4
31.1
35.2
31.9
35.4
35.1
36.2
29.4
35.9
29.9
35.3
DOMESTICALLY CHARTERED
COMMERCIAL BANKS1
30 Loans and securities
31
Investment securities
32
U . S . Treasury securities
33
Other
34
Trading account assets
35
Total loans
36
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
40
Individual
41
All other
42 Total cash assets
43
Reserves with Federal Reserve Banks.
44
Cash in vault
45
Cash items in process of collection . . .
46
Demand balances at U.S. depository
institutions
47
Other cash assets
48 Other assets
143.5
141.0
141.6
165.0
141.5
144.0
143.4
144.4
143.1
134.8
122.0
49 Total assets/liabilities and capital
2,370.8
2,378.7
2,446.3
2,572.8
2,474.8
2,463.2
2,451.5
2,483.8
2,512.5
2,481.1
2,467.9
50
51
52
53
54
55
56
1,779.3
530.6
503.7
745.0
306.9
109.6
174.9
1,792.8
540.9
514.1
737.7
301.3
108.6
176.0
1,844.8
588.2
520.8
735.8
314.1
111.7
175.8
1,957.0
682.2
533.0
741.8
322.9
115.5
177.5
1,840.8
569.4
530.3
741.1
341.7
114.0
178.3
1,838.2
561.3
533.9
743.0
336.1
110.8
178.1
1,840.7
560.5
537.7
742.5
319.1
113.0
178.8
1,857.1
582.2
533.1
741.8
328.2
119.1
179.4
1,876.5
588.4
536.6
751.4
337.1
118.8
180.2
1,861.9
569.8
533.1'
759.0'
328.5
116.4
174.3
1,864.1
565.8
534.1
764.3
320.6
115.7
167.4
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
1. Data have been revised because of benchmarking to new Call Reports and
new seasonal factors beginning July 1985. Back data are available from the
Banking Section. Board of G o v e r n o r s of the Federal Reserve System, Washington, D.C., 20551.
Figures are partly estimated. They include all bank-premises subsidiaries and
other significant majority-owned domestic subsidiaries. Loan and securities data
for domestically chartered commercial banks are estimates for the last Wednesday of the month based on a sample of weekly reporting banks and quarter-end
condition report data. Data for other banking institutions are estimates made for
the last Wednesday of the month based on a weekly reporting sample of
foreign-related institutions and quarter-end condition reports.
2. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks. Edge Act and
Agreement corporations, and N e w York State foreign investment corporations.
3. Insured domestically chartered commercial b a n k s include all m e m b e r banks
and insured nonmember banks.
Weekly Reporting Commercial Banks
A19
1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More on
December 31, 1982, Assets and Liabilities
Millions of dollars, Wednesday figures
1987
June 3
June 10
June 17
June 24
July 1
July 8
July 15
July 22
July 29
100,068'
103,833
102,919
122,818
96,723
108,152
96,111
96,851
L,019,562R
1,008,802'
1,008,924
999,318'
1,012,728
996,044
1,003,050
988,286
992,800
3 U . S . Treasury and government agency
4
Trading acount
5
Investment account, by maturity
6
One year or less
7
Over one through five years
8
Over five years
9 Other securities
10
Trading account
11
Investment account
12
States and political subdivisions, by maturity
13
One year or less
14
O v e r one year
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
111,940
13,449
98,490
15,566
44,422
38,503
67,805
3,189
64,616
51,188
6,428
44,760
13,428
3,875
110,809
12,900
97,909
15,396
44,201
38,312
68,013
3,369
64,644
51,096
6,360
44,736
13,548
4,208
109,782
13,102
96,680
14,956
44,118
37,606
68,203
3,547
64,655
51,038
6,347
44,691
13,617
4,315
108,014'
12,389'
95,624
15,547
43,106
36,970
68,888
4,161
64,726
50,920
6,248
44,672
13,807
3,622
109,325
12,577
96,748
16,772
42,466
37,511
67,782
3,922
63,859
49,853
5,486
44,367
14,006
3,468
110,947
13,253
97,695
16,722
42,684
38,288
66,767
2,873
63,894
49,831
5,545
44,286
14,063
3,034
114,002
15,890
98,112
16,230
42,995
38,888
66,874
2.890
63,984
49,856
5.602
44,254
14,127
2,789
114,942
15,520
99,421
16,291
43,928
39,202
67,121
3,001
64,120
49,945
5,597
44,348
14,175
2,432
113,702
14,359
99,343
16,096
44,254
38,993
67,544
3,335
64,209
49,983
5,691
44,292
14,226
2,697
17 Federal f u n d s sold 1
18
To commercial banks
19
To nonbank brokers and dealers in securities
20
T o others
21 Other loans and leases, gross
22
Other loans, gross
23
Commercial and industrial
24
Bankers acceptances and commercial paper
25
All other
26
U.S. addressees
27
N o n - U . S . addressees
69,204
41,15<T
20,482'
7,573
794,438 r
775,372
278,687'
2,162 r
276,525'
273,326'
3,199'
60,292
32,054
20,378
7,860
793,214'
774,102
278,128'
2,500
275,628'
272,412'
3,216'
61,583
35,604
19,099
6,880
795,132
776,065
277,108'
2,507
274,601'
271,420'
3,181'
59,545
33,816
18,892
6,837
790,402'
771,293'
275,296'
2,456
272,841'
269,663'
3,178'
74,688
44,429
22,701
7,558
796,088
777,241
276,956
2,449
274,507
271,404
3,103
63,448
38,716
19,102
5,630
790,367
771,488
273,777
2,281
271,496
268,419
3,077
69,700
42,651
18,996
8,053
788,266
769,348
273,110
2,247
270,863
267,794
3,069
59,563
34,480
18,184
6,899
782,918
763,980
271,234
2,247
268,987
265,961
3,026
63,556
36,710
19,721
7,125
783,990
765,032
269,461
2,275
267,186
264,130
3,056
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
227,074'
140,970'
52,725 r
22,447 r
5,035
25,243
15,771
5,525
33,041'
2,958 r
18,620
19,067'
4,442'
23,260 r
766,737'
124,782'
228,034'
141,038'
53,130'
22,138'
5,338
25,655
15,162
5,522
32,933
2,956'
17,198
19,113'
4,461'
23,274'
765,480'
119,586'
230,718'
140,494'
52,914
21,468
5,266
26,180
14,835
5,594'
33,097
3,072'
18,233
19,067
4,468
25,623
765,041
120,582
230,474'
140,820'
51,072
20,870
5,159
25,042
14,377
5,627'
32,633
2,969'
18,025'
19,109
4,487
26,665
759,250'
123,220'
230,826
141,089
51,620
21,771
5,168
24,681
15,546
5,660
32,117
2,986
20,440
18,848
4,502
34,122
757,464
130,223
230,857
140,956
51,885
22,061
5,173
24,651
14,292
5,619
32,189
2,938
18,974
18,880
4,518
34,002
751,847
126,221
231,045
140,967
51,108
22,261
4,626
24,221
14,304
5,579
32,135
2,980
18,120
18,917
4,528
34,052
749,685
126,774
231,082
141,139
49,047
21,576
4,634
22,837
13,461
5,590
31,948
3,071
17,406
18,939
4,525
34,165
744,229
123,830
231,802
141,670
49,833
21,892
4,927
23,014
14,432
5,598
31,909
2,867
17,460
18,958
4,542
34,146
745,301
119,739
1,249,733'
1,228,457'
1,225,457'
1,265,769
1,218,988
1,237,976
1,208,227
1,209,390
232,077
177,630
5,042
4,555
26,695
6,358
1,012
10,784
61,650
526,378
486,346'
28,303
920
9,895'
914
255,756'
0
13,364
242,392'
89,413'
221,688
173,787
4,961
2,578
24,292
6,502
1,059
8,507
60,902
526,835
487,052'
28,205
897
9,773'
907
247,797
0
11,330
236,467
86,188'
221,672'
167,339'
5,476
3,030
23,445'
7,776
979
13,627
58,566'
525,447
486,313'
27,522
888
9,885'
839
248,736'
0
20,766
227,970'
88,705'
265,470
202,898
6,878
1,708
33,020
7,151
1,213
12,601
60,909
527,267
489,575
26,266
908
9,678
840
252,357
0
19,006
233,351
84,164
223,024
174,256
5,092
2,698
23,844
6,501
1,028
9,606
61,098
528,382
490,754
26,253
922
9,665
788
249,235
0
20,594
228,641
80,909
239,998
185,989
6,095
4,294
27,215
6,342
1,105
8,957
60,439
530,220
493,120
25,788
928
9,602
783
251,358
21
19,655
231,681
79,576
215,380
167,541
5,437
2,400
23,077
6,210
1,023
9,691
59,826
526,663
489,569
25,815
915
9,541
823
247,663
0
21,062
226,600
82,482
215,173
166,280
5,192
2,768
23,125
7,032
1,014
9,763
59,387
526,207
489,118
25,664
896
9,700
828
247,027
982
11,783
234,262
85,508
1,165,274'
1,143,410'
1,150,776
1,143,126'
1,190,168
1,142,648
1,161,591
1,132,014
1,133,302
84,458'
85,047'
82,564
82,330
75,601
76,339
76,386
76,213
76,088
983,667'
800,046'
165,648
1,581
1,023
558
232,488
982,344'
799,314'
165,823
1,568
1,009
559
232,182
981,943
799,643
165,500'
1,597
1,032
564
231,262
975,783'
795,261'
166,169'
1,621
1,051
570
229,087
985,151
804,576
163,471
1,785
1,222
564
232,878
973,787
793,038
165,465
1,723
1,126
598
231,266
976,719
793,054
165,528
1,690
1,124
566
232,795
970,920
786,426
164,886
1,719
1,139
580
229,503
972,886
788,944
164,875
1,682
1,127
556
228,913
105,389
1 Cash and balances due from depository institutions
2 Total loans, leases and securities, net
Real estate loans
T o individuals for personal expenditures
T o depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
N o n b a n k depository and other financial institutions
F o r purchasing and carrying securities
T o finance agricultural production
T o states and political subdivisions
To foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
All other assets
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and banks . . .
Liabilities for borrowed money
Borrowings f r o m Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money
Other liabilities and subordinated note and debentures .
65 Total liabilities
66 Residual (total assets minus total liabilities) 3
MEMO
67
68
69
70
71
72
73
Total loans and leases (gross) and investments adjusted
Total loans and leases (gross) adjusted
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates—total
Commercial and industrial
Other
Nontransaction savings deposits (including MMDAs)
229,294
178,798
6,228
1,875
24,815
5,889
1,262
10,427
60,585'
526,483
487,088'
27,749
897
9,766'
983
250,416
0
20,240
230,176
83,996'
.
1. Includes securities purchased under agreements to resell.
2. Includes federal f u n d s 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.
3. This is not a measure of equity capital for use in capital-adequacy analysis or
for other analytic uses.
1,233,340
4. Exclusive of loans and federal funds transactions with domestic commercial
banks.
5. Loans sold are those sold outright to a b a n k ' s o w n foreign branches,
nonconsolidated nonbank affiliates of the bank, the b a n k ' s holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of the holding c o m p a n y .
A20
1.28
DomesticNonfinancialStatistics • October 1987
LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities
Millions of dollars, Wednesday figures except as noted
1987
Account
June 10
June 3
1 Cash balances due from depository institutions
2 Total loans, leases and securities, net 1
Securities
3 U.S. Treasury and government agency*
4
Trading account 2
5
Investment account, by maturity
6
One year or less
7
Over one through five years
8
Over five years
9 Other securities*
10
Trading account*
11
Investment account
12
States and political subdivisions, by maturity
13
One year or less
14
Over one year
15
Other bonds, corporate ^tocks and securities
16 Other trading account assets*
Loans and
18
19
21 Other loans and leases, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
27
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
45
46
47
48
49
50
51
52
53
54
55
56
N o n - U . S . addressees
T o individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
N o n b a n k depository and other financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
All other assets 4
Deposits
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
(ATS, N O W , Super N O W , telephone transfers)
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
58
Depository institutions in the United States
59
Foreign governments, official institutions and banks
60 Liabilities for borrowed money
61
Borrowings from Federal Reserve Banks
62
Treasury tax-and-loan notes
63
All other liabilities for borrowed money
64 Other liabilities and subordinated note and debentures
65 Total liabilities
66 Residual (total assets minus total liabilities) 6
July 8
July 15
July 22
July 29
26,669
23,217
29,880
38,582
22,074
29,764
23,823
23,208
219,222
218,048
216,253
217,860
208,595
213,756
206,393
211,225
0
0
14.483
1,786
5,616
7,080
0
0
16,507
14,036
1,380
12,656
2,471
0
0
0
13,931
1,348
5,638
6,946
0
0
16,494
13,989
1,348
12,640
2,505
0
0
0
13,863
1,259
5,712
6,892
0
0
16,533
13,970
1,328
12,641
2,563
0
0
0
13,865
1,249
5,666
6,950
0
0
16,550
13,939
1,262
12,677
2,610
0
0
0
13,751
1,642
5,125
6,984
0
0
16,179
13,474
984
12,490
2,705
0
0
0
13,783
1,673
5,093
7,016
0
0
16,228
13,506
1,021
12,485
2,722
0
0
0
13,844
1,632
5,253
6,959
0
0
16,260
13,510
1,006
12,504
2,750
0
0
0
13,948
1,678
5,372
6,897
0
0
16,294
13,517
939
12,578
2,777
0
0
0
13,914
1,700
5,372
6,840
0
0
16,401
13,593
1,061
12,532
2,808
0
28,358
10,875
12,100
5,383
175,252
170,487
62,101
532
61,569
61,096
474
43,060
20,777
21,112
11,694
2,703
6,716
8,340
270
8,027
794
6,004
4,765
1,479
9,620
164,153
59,339
26,984
8,838
12,759
5,386
172,978
168,193
61,489
606
60,883
60,384
499
43,228
20,827
21,073
11,261
2,929
6,884
7,464
273
7,987
824
5,026
4,785
1,487
9,678
161,813
56,655
25,812
10,305
11,153
4,354
173,931
169,203
61,367
557
60,810
60,325
485
43,497
20,939
21,356
11,327
3,007
7,022
7,130
290
7,888
918
5,817
4,728
1,492
10,599
161,840
57,570
26,621
10,861
11,455
4,305
171,637
166,888
59,784
538
59,246
58,740
506
43,676
20,948
21,226
11,422
2,792
7,012
6,310
279
7,876
806
5,981
4,750
1,499
10,920
159,218
59,263
30,713
10,988
14,873
4,853
173,037
168,270
59,610
556
59,054
58,560
494
43,662
20,884
21,527
12,126
3,022
6,380
6,757
275
7,758
800
6,998
4,767
1,493
14,327
157,217
62,761
23,829
9,482
11,146
3,201
170,515
165,733
58,713
465
58,248
57,754
493
43,560
20,895
21,007
11,607
3,090
6,309
6,186
276
7,831
788
6,477
4,782
1,502
14,258
154,754
61,445
30,135
13,908
11,279
4,948
169,293
164,502
58,496
503
57,992
57,521
472
43,423
20,968
20,322
11,294
2,744
6,284
6,481
250
7,869
838
5,855
4,791
1,512
14,264
153,518
63,727
24,557
10,121
10,003
4,433
167,354
162,530
57,932
437
57,495
57,045
449
43,484
21,046
19,696
11,200
2,636
5,861
5,698
252
7,860
871
5,689
4,825
1,511
14,250
151,594
62,759
28,124
12,010
11,240
4,874
168,542
163,732
57,142
479
56,664
56,214
450
44,176
21,247
19,887
10,883
2,896
6,108
6,895
289
7,838
713
5,544
4,811
1,519
14,237
152,787
58,424
308,442
302,546
298,835
305,397
319,204
292,114
307,248
292,976
292,858
58,091
39,131
636
869
6,201
5,210
880
5,164
56,444
39,400
667
417
6,100
5,375
927
3,558
59,130
41,208
704
170
5,947
4,789
1,120
5,191
62,713
40,254
689
525
6,084
5,647
837
8,676
80,504
55,325
1,197
176
11,113
5,917
1,024
5,752
56,174
38,767
877
476
5,547
5,379
879
4,249
66,458
46,043
1,591
825
8,181
5,113
975
3,730
57,165
39,358
867
411
5,615
5,156
834
4,924
55,828
37,324
674
537
5,761
5,928
871
4,732
8,210
100,106
91,118
6,833
26
1,633
496
76,753
8,197
99,024
90,222
6,807
24
1,512
458
72,216
0
4,939
67,277
35,628
7,868
98,586
89,880
6,698
26
1,536
446
73,082
0
5,115
67,966
38,195
8,090
100,088
91,354
6,790
25
1,473
447
75,510
0
4,563
70,947
33,618
8,120
99,749
90,836
6,975
58
1,470
410
74,062
0
4,727
69,335
32,014
8,037
101,245
92,450
6,828
59
1,500
407
78,089
0
4,536
73,553
31,460
8,007
99,689
90,915
6,795
60
1,512
406
73,688
3,132
73,620
39,780
8,137
99,279
90,351
6,850
24
1,566
488
76,569
0
2,853
73,716
36,498
4,799
68,889
32,594
7,932
99,534
90,709
6,883
56
1,478
408
73,346
900
2,594
69,852
34,477
282,940
276,926
274,195
280,443
297,812
270,119
285,289
271,143
271,116
25,502
25,620
24,640
24,954
21,392
21,994
21,959
21,833
21,741
212,032
181,042
37,386
210,288
179,863
36,664
208,507
178,110
36,374
206,389
175,975
36,301
210,567
180,637
35,883
203,266
173,254
36,914
204,330
174,226
36,910
200,833
170,591
36,998
204,088
173,774
36,848
0
1. Excludes trading account securities.
2. Not available due to confidentiality.
3. Includes securities purchased under agreements to resell.
4. Includes trading account securities.
5. Includes federal funds purchased and securities sold under agreements to
repurchase.
July 1
25,602
MEMO
67 Total loans and leases (gross) and investments adjusted 1 ,
68 Total loans and leases (gross) adjusted 7
69 Time deposits in amounts of $100,000 or more
June 24
223,501
leases
To commercial banks
T o nonbank brokers and dealers in securities
23
24
25
June 17
0
6. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
7. Exclusive of loans and federal funds transactions with domestic commercial
banks.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
Weekly Reporting Commercial Banks
1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS 1
Liabilities
A21
Assets and
Millions of dollars, Wednesday figures
1987
Account
37
38
39
40
Cash and due from depository institutions . . .
Total loans and securities
U.S. Treasury and govt, agency securities . . .
Other securities
Federal funds sold"
To commercial banks in the United States .
T o others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addressees
N o n - U . S . addressees
To financial institutions
Commercial banks in the United S t a t e s . .
Banks in foreign countries
Nonbank financial institutions
To foreign govts, and official institutions . .
For purchasing and carrying securities . . . .
All other
Other assets (claims on nonrelated parties) . .
Net due from related institutions
Total assets
Deposits or credit balances due to other
than directly related institutions
Transaction accounts and credit balances' .
Individuals, partnerships, and
corporations
Other
Nontransaction accounts
Individuals, partnerships, and
corporations
Other
Borrowings from other than directly
related institutions
Federal f u n d s purchased
From commercial banks in the
United States
From others
Other liabilities for borrowed money
T o commercial banks in the
United States
T o others
Other liablities to nonrelated parties
Net due to related institutions
Total liabilities
41
42
Total loans (gross) and securities adjusted
Total loans (gross) ajdusted 6
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
June 3
June 10
June 17
June 24
July 1
July 8
July 15
July 22
July 29
10,217
90,194
6,913
8,279
4,599
4,006
593
70,403
44,145
9,552
92,276
6,670
8,300
5,933
5,284
649
71,372
45.271
9,725
92,581
6,772
8,263
5,971
5,155
816
71,574
45,920
9,957
93,071
6,487
8,325
5,924
5,208
716
72,335
46,224
9,582
94,026
6,612
8,364
6,601
6,003
598
72,448
46,175
10,498
91,272
6,462
8,376
5,089
4,544
545
71,346
45,575
10,507
94,148
6,527
8,371
7,267
6,649
618
71,983
45,524
10,492
94,509
6,801
8,341
7,651
7,024
627
71,716
45,526
10,399
94,826
6,754
8,325
7,937
7,124
812
71,810
45,762
3,114
41,031
38,516
2,516
17,514
13,922
922
2,670
372
2,496
5,877
25,309R
17,706R
143,427
3,238
42,033
39,525
2,508
17,414
13,700
1,099
2,616
359
2,588
5,740
25,043R
17,167
144,038
3,470
42,450
39,860
2,590
17,062
13,520
998
2,543
416
2,243
5,933
25,891
16,626
144,824
3,321
42,903
40,258
2,646
17,506
13,870
1,108
2,528
367
2,291
5,948
26,748
16,431
146,208
3,241
42,933
40,118
2,815
16,929
13,311
1,035
2,583
342
2,860
6,142
26,835
17,905
148,348
3,092
42,483
39,475
3,008
17,053
13,594
896
2,564
333
2,304
6,080
27,046
17,589
146,405
3,232
42,291
39,498
2,794
17,566
13,967
973
2,626
410
2,259
6,223
27,134
18,283
150,072
3,323
42,203
39,542
2,661
17,359
13,850
828
2,680
287
2,155
6,388
27,061
16,152
148,214
3,603
42,159
39,491
2,668
17,284
13,772
908
2,604
277
2,019
6,468
26,974
15,931
148,131
43,628
3,612
43,457
3,329
42,636
3,251
42,743
3,281
42,184
3,271
42,132
3,183
42,142
3,667
41,810
3,245
41,948
3,022
2,191
1,422
40,015
2,083
1,247
40.128
2,029
1,222
39,385
1,969
1,312
39,462
1,967
1,304
38,913
2,016
1,167
38,948
2,015
1,652
38,474
2,032
1,212
38,565
1,992
1,030
38,926
32,828
7,188
32,951
7,177
31,707
7,678
31,777
7,685
30,757
8,156
30,965
7,984
30,700
7,774
30,640
7,926
31,646
7,280
57.340
26,274
56,515
25,071
56,605
23,759
55,199
24,010
59,054
27,046
58,802
27,389
60,717
29,515
58,176
26,973
57,345
25,432
16,366
9,908
31,065
13,894
11,177
31,444
13,866
9,894
32,846
13,253
10,757
31,189
16,649
10,397
32,008
16,110
11,280
31,412
19,516
9,999
31,201
14,755
12,218
31,202
13,508
11,924
31,913
26,242
4,823
28,723
13,737
143,427
26,448
4,996
28,660
15,405
144,038
27,594
5,252
29,857
15,725
144,824
25,971
5,217
30,299
17,967
146,208
26,220
5,788
30,186
16,924
148,348
26,169
5,243
30,394
15,077
146,405
26,093
5,108
30,399
16,814
150,072
25,185
6,017
30,307
17,920
148,214
26,135
5,778
30,543
18,294
148,131
72,266
57,074
73,292
58,322
73,905
58,870
73,993
59,181
74,712
59,736
73,135
58,297
73,531
58,633
73,635
58,492
73,930
58,850
MEMO
..
1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and
agencies of foreign banks that include those branches and agencies with assets of
$750 million or more on June 30,1980, plus those branches and agencies that had
reached the $750 million asset level on Dec. 31, 1984.
2. Includes securities purchased under agreements to resell.
3. Includes credit balances, demand deposits, and other checkable deposits.
4. Includes savings deposits, money market deposit accounts, and time deposits.
5. Includes securities sold under agreements to repurchase.
6. Exclusive of loans to and federal f u n d s sold to commercial banks in the
United States.
A22
1.31
DomesticNonfinancialStatistics • October 1987
G R O S S D E M A N D D E P O S I T S Individuals, P a r t n e r s h i p s , and C o r p o r a t i o n s 1
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
1986
Type of holder
1982
Dec.
1983
Dec.
1984
Dec.
1987
1985
Dec.
Mar.
June
Sept.
Dec.
Mar.
1 All holders—Individuals, partnerships, and
corporations
291.8
293.5
302.7
321.0
307.4
322.4
333.6
363.6
335.9
2
3
4
5
6
35.4
150.5
85.9
3.0
17.0
32.8
161.1
78.5
3.3
17.8
31.7
166.3
81.5
3.6
19.7
32.3
178.5
85.5
3.5
21.2
31.8
166.6
84.0
3.4
21.6
32.3
180.0
86.4
3.0
20.7
35.9
185.9
86.3
3.3
22.2
41.4
202.0
91.1
3.3
25.8
35.9
183.0
88.9
2.9
25.2
Financial business
Nonfinancial business
Consumer
Foreign
Other
June
t
1
n.a.
Weekly reporting banks
1987
1986
1982
Dec.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
1983
Dec.
1985
Dec.4
Mar.
June
Sept.
Dec.
Mar.
June
144.2
146.2
157.1
168.6
159.7
168.5
174.7
195.1
ns.r
179.3
26.7
74.3
31.9
2.9
8.4
24.2
79.8
29.7
3.1
9.3
25.3
87.1
30.5
3.4
10.9
25.9
94.5
33.2
3.1
12.0
25.5
86.8
32.6
3.3
11.5
25.7
93.1
34.9
2.9
11.9
28.9
94.8
35.0
3.2
12.8
32.5
106.4
37.5
3.3
15.4
28.7
94.4
36.8
2.8
15.5
29.3
94.8
37.6
3.1
14.6
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.
Figures may not add to totals because of rounding.
2. Beginning in March 1984, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for D e c e m b e r 1983 based on the new weekly reporting panel are: financial
business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other
9.5.
3. Beginning March 1985, financial business deposits and, by implication, total
gross demand deposits have been redefined to exclude demand deposits due to
1984
Dec. 2
thrift institutions. Historical data have not been revised. T h e estimated volume of
such deposits for December 1984 is $5.0 billion at all insured commercial banks
and $3.0 billion at weekly reporting banks.
4. Historical data back to March 1985 have been revised to account for
corrections of bank reporting errors. Historical data before March 1985 have not
been revised, and may contain reporting errors. Data for all commercial banks for
March 1985 were revised as follows (in billions of dollars): all holders, - . 3 ;
financial business, - . 8 ; nonfinancial business, - . 4 ; consumer, .9; foreign, .1;
other, - . 1 . Data for weekly reporting banks for March 1985 were revised as
follows (in billions of dollars): all holders, - . 1 ; financial business, - . 7 ;
nonfinancial business, - . 5 ; consumer, 1.1; foreign, .1; other, - . 2 .
Financial Markets
A23
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1987 r
1982
Dec.
Instrument
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
Financial companies 3
Dealer-placed
paper
Total
Bank-related (not seasonally
adjusted)
Directly placed
paper
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies 6
166,436
187,658
237,586
300,899
331,016
337,190
336,677
338,797
346,769
354,249
348,741
34,605
44,455
56,485
78,443
100,207
101,964
102,939
102,889
103,957
105,397
108,691
2,516
2,441
2,035
1,602
2,265
2,284
2,174
2,116
2,307
2,429
2,430
84,393
97,042
110,543
135,504
152,385
157,252
158,955
159,333
163,421
169,225
161,921
32,034
47,437
35,566
46,161
42,105
70,558
44,778
86,952
40,860
78,424
45,085
77,973
45,722
74,784
46,634
76,575
48,604
79,391
48,401
79,627
47,862
78,129
Bankers dollar acceptances (not seasonally adjusted) 7
7 Total
8
9
10
11
12
13
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
Basis
14 Imports into United States
15 Exports f r o m United States
16 All other
79,543
78,309
78,364
68,413
64,974
65,049
65,144
65,954
66,752
67,779
69,622
10,910
9,471
1,439
9,355
8,125
1,230
9,811
8,621
1,191
11,197
9,471
1,726
13,423
11,707
1,716
13,224
10,662
2,561
11,828
10,006
1,821
12,246
10,516
1,730
11,180
9,784
1,3%
11,201
9,569
1,631
11,234
9,661
1,573
1,480
949
66,204
418
729
67,807
0
671
67,881
0
937
56,279
0
1,317
50,234
0
983
50,843
0
1,230
52,087
0
1,453
52,255
0
1,519
54,052
0
1,547
55,032
0
1,717
56,671
17,683
16,328
45,531
15,649
16,880
45,781
17,845
16,305
44,214
15,147
13,204
40,062
14,670
12,960
37,344
14,459
12,783
37,807
14,615
12,876
37,654
14,711
13,083
38,159
15,116
13,836
37,800
15,361
14,028
38,376
16,179
14,161
39,281
1. Effective Dec. 1, 1982, there was a break in the commercial paper series.
T h e key changes in the content of the data involved additions to the reporting
panel, the exclusion of broker or dealer placed borrowings under any master note
agreements f r o m the reported data, and the reclassification of a large portion of
bank-related paper f r o m dealer-placed to directly placed.
2. Correction of a previous misclassification of paper by a reporter has created
a break in the series beginning December 1983. The correction adds some paper
to nonfinancial and to dealer-placed financial paper.
3. 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.
4. Includes all financial company paper sold by dealers in the open market.
5. As reported by financial companies that place their paper directly with
investors.
6. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
7. Beginning October 1984, the number of respondents in the b a n k e r s acceptance survey were reduced from 340 to 160 institutions—those with $50 million or
more in total acceptances. The new reporting group accounts for over 95 percent
of total acceptances activity.
1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per annum
Effective Date
10.50
10.00
9.50
9.00
8.50
1986—July 11
Aug. 20
1987—Apr.
1986—May
1
1.
15.
Month
8.00
7.50
7.75
8.00
8.25
NOTE. These data also appear in the B o a r d ' s H.15 (519) release. For address,
see inside front cover.
Average
rate
1985—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
10.61
10.50
10.50
10.50
10.31
9.78
9.50
9.50
9.50
9.50
9.50
9.50
1986—Jan.
Feb.
Mar.
Apr.
9.50
9.50
9.10
8.83
Month
1986—May
July
Aug
Sept
Oct
Nov
Dec
1987—Jan
Feb
Mar
Apr
June
July
Aug
Average
rate
8.50
8.50
8.16
7.90
7.50
7.50
7.50
7.50
7.50
7.50
7.50
7.75
8.14
8.25
8.25
8.25
A24
1.35
DomesticNonfinancialStatistics • October 1987
I N T E R E S T 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.
1987, week ending
1987
Instrument
1984
1985
1986
Apr.
May
June
July
July 3
July 10
July 17
July 24
July 31
MONEY MARKET RATES
1
7
10.22
8.80
8.10
7.69
6.80
6.33
6.37
5.50
6.85
5.50
6.73
5.50
6.58
5.50
6.61
5.50
6.64
5.50
6.52
5.50
6.57
5.50
6.63
5.50
10.05
10.10
10.16
7.94
7.95
8.01
6.62
6.49
6.39
6.39
6.45
6.50
6.83
6.93
7.04
6.86
6.92
7.00
6.57
6.65
6.72
6.82
6.86
6.91
6.65
6.70
6.75
6.52
6.59
6.66
6.49
6.58
6.67
6.56
6.65
6.75
9.97
9.73
9.65
7.91
7.77
7.75
6.58
6.38
6.31
6.28
6.22
6.14
6.78
6.74
6.47
6.80
6.77
6.50
6.53
6.48
6.35
6.74
6.63
6.40
6.61
6.54
6.38
6.46
6.43
6.32
6.47
6.43
6.34
6.53
6.48
6.33
10.14
10.19
7.92
7.96
6.39
6.29
6.41
6.44
6.91
7.03
6.83
6.91
6.59
6.65
6.76
6.79
6.63
6.65
6.52
6.57
6.54
6.63
6.62
6.71
10.17
10.37
10.68
10.73
7.97
8.05
8.25
8.28
6.61
6.52
6.51
6.71
6.42
6.52
6.65
6.73
6.81
6.99
7.24
7.25
6.84
6.94
7.15
7.11
6.60
6.70
6.87
6.87
6.83
6.88
7.04
7.08
6.64
6.73
6.87
6.93
6.56
6.64
6.79
6.84
6.56
6.65
6.84
6.79
6.58
6.72
6.94
6.90
9.52
9.76
9.92
7.48
7.65
7.81
5.98
6.03
6.08
5.64
5.90
6.09
5.66
6.05
6.52
5.67
5.99
6.35
5.69
5.76
6.24
5.68
5.88
6.25
5.61
5.56
6.20
5.58
5.56
6.11
5.66
5.82
6.26
5.94
6.10
6.40
9.57
9.80
9.91
7.49
7.66
7.76
5.97
6.02
6.07
5.76
5.93
5.92
5.75
6.11
6.56
5.69
5.99
6.54
5.78
5.86
6.22
5.82
6.00
5.62
5.68
6.22
5.55
5.54
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.89
11.65
11.89
12.24
12.40
12.44
12.48
12.39
8.43
9.27
9.64
10.13
10.51
10.62
10.97
10.79
6.46
6.87
7.06
7.31
7.55
7.68
7.85
7.80
6.50
7.02
7.32
7.57
7.83
8.02
7.00
7.76
8.02
8.26
8.47
8.61
6.80
7.57
7.82
8.02
8.27
8.40
6.68
7.44
7.74
8.01
8.27
8.45
6.71
7.44
7.72
7.96
8.20
8.35
6.61
7.36
7.65
7.91
8.14
8.32
6.53
7.35
7.65
7.93
8.19
8.38
6.71
7.46
7.77
8.05
8.33
8.52
6.88
7.62
7.91
8.18
8.45
8.62
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
8.25
8.78
8.57
8.64
8.48
8.45
8.56
8.75
8.86
11.99
10.75
8.14
8.31
8.79
8.63
8.70
8.60
8.56
8.63
8.78
8.89
9.61
10.38
10.10
8.60
9.58
9.11
6.95
7.76
7.32
7.20
8.29
7.55
7.61
8.78
8.00
7.48
8.68
7.79
7.18
8.37
7.72
7.30
8.55
7.81
7.15
8.40
7.67
7.15
8.35
7.66
7.10
8.25
7.72
7.20
8.30
7.73
13.49
12.71
13.31
13.74
14.19
12.05
11.37
11.82
12.28
12.72
9.71
9.02
9.47
9.95
10.39
9.35
8.85
9.15
9.36
10.04
9.82
9.33
9.59
9.83
10.51
9.87
9.32
9.65
9.98
10.52
9.92
9.42
9.64
10.00
10.61
9.85
9.33
9.60
9.93
10.52
9.83
9.31
9.57
9.92
10.52
9.88
9.36
9.59
9.98
10.57
9.95
9.46
9.66
10.04
10.62
10.04
9.56
9.77
10.10
10.74
13.81
12.06
9.61
9.51
10.05
10.05
10.17
10.01
10.07
10.12
10.34
10.44
11.59
4.64
10.49
4.25
8.76
3.48
7.94
2.99
8.41
3.02
8.31
2.92
8.25
2.83
8.34
2.87
8.27
2.84
8.29
2.81
8.18
2.84
8.18
2.78
Commercial paper '
3
4
5
Finance paper, directly placed 4 .
6
7
8
Bankers acceptances
9
10
Certificates of deposit, secondary market
11
V
13
14
7
U.S. Treasury bills*
Secondary market 9
15
16
17
Auction average
18
19
20
6.14
6.20
CAPITAL MARKET RATES
U.S. Treasury notes aqd bonds 1 1
Constant maturities 1 *
">1
n
">4
76
77
78
Composite
79
State and local notes and bonds
M o o d y ' s series 1 4
30
31
37
Baa
Corporate bonds
Seasoned issues 1 6
33
34
35
36
37
38
Aa
A
Baa
A-rated, recently-offered utility
bonds 1 7
MEMO: Dividend/price ratio
39
40
18
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 averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of New York.
4. 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 N o v e m b e r 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
150-179 days for finance paper.
5. Yields are quoted on a bank-discount basis, rather than in an investment
yield basis (which would give a higher figure).
6. 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).
7. Unweighted average of offered rates quoted by at least five dealers early in
the day.
8. Calendar week average. For indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
11. Yields are based on closing bid prices quoted by at least five dealers.
12. 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.
13. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including one very low yielding " f l o w e r " bond.
14. General obligations based on Thursday figures; Moody's Investors Service.
15. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for T h u r s d a y .
16. Daily figures from M o o d y ' s Investors Service. Based on yields to maturity
on selected long-term bonds.
17. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
18. Standard and Poor's corporate series. Preferred stock ratio based on a
sample o f t e n issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H.15 (519) and G.13 (415) releases.
For address, see inside front cover.
Financial Markets
1.36
STOCK MARKET
A25
Selected Statistics
1987
1986
1984
Indicator
1985
1986
Nov.
Dec.
Jan.
Feb.
Mar.
Prices and trading (averages of daily
Apr.
May
June
July
figures)
Common stock prices
1 N e w York Stock Exchange
(Dec. 31, 1965 = 50)
2
Industrial
3
Transportation
4
Utility
5
Finance
6 Standard & P o o r ' s Corporation (1941-43 = 10)' . . . .
7 American Stock Exchange
(Aug. 31, 1973 = 50)
92.46
108.01
85.63
46.44
89.28
160.50
108.09
123.79
104.11
56.75
114.21
186.84
136.00
155.85
119.87
71.36
147.19
236.34
140.84
162.10
122.27
75.77
142.97
245.09
142.12
163.85
121.26
76.07
144.29
248.61
151.17
175.60
126.61
78.54
153.32
264.51
160.23
189.17
135.49
78.19
158.41
280.93
166.43
198.95
138.55
77.15
162.41
292.47
163.88
199.03
137.91
72.74
150.52
289.32
163.00
198.78
141.30
71.64
145.97
289.12
169.58
206.61
150.39
74.25
152.73
301.36
174.28
214.12
157.49
74.18
152.27
310.09
207.96
229.10
264.38
265.14
264.65
289.02
315.60
332.55
330.65
328.77
334.49
348.68
Volume of trading (thousands
8 N e w York Stock Exchange
9 American Stock Exchange
91,084
6,107
109,191 141,385
8,355
11,846
154,776
10,513
148,228
12,272
192,419
14,755
183,478
14,962
180,251
15,678
187,135
14,420
170,898
11,655
163,380
12,813
180,356
12,857
of
shares)
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers 3
Free credit bala/tces
11 Margin-account'
12 Cash-account
at
22,470
28,390
36,840
37,090
36,840
34,960
35,740
38,080
39,820
38,890
38,420
40,250
1,755
10,215
2,715
12,840
4,880
19,000
3,765
15,045
4,880
19,000
5,060
17,395
4,470
17,325
4,730
17,370
4,660
17,285
4,355
16,985
3,680
15,405
4,095
15,930
brokers4
Margin requirements (percent of market value and effective date) 6
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
N o v . 24, 1972
Jan. 3, 1974
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
50
50
50
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. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Beginning July 1983, under the revised Regulation T , margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in April 1984.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
5. N e w series beginning June 1984.
6. These regulations, adopted by the Board of Governors pursuant to the
Securities Exchange Act of 1934, limit the amount of credit to purchase and carry
"margin securities" (as defined in the regulations) when such credit is
collateralized by securities. Margin requirements on securities other than options
are the difference between the market value (100 percent) and the maximum loan
value of collateral as prescribed by the Board. Regulation T was adopted effective
Oct. 15, 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar.
11, 1968; and Regulation X, effective N o v . 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market-value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the S E C
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26
1.37
DomesticNonfinancialStatistics • October 1987
SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1987
1986
Account
1984
1985
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Savings and loan a s s o c i a t i o n s
1 Assets
903,488
948,781
957,945
965,032
957,229
961,894
964,0%
963,316
935,525'
936,945'
939,999
944,372'
959,454
2
3
4
5
555,291
124,801
223,396
583,235
97,303
126,712
238,833
565,353
113.100
132,787
259,798
566,438
113,621
138,863
259,726
557,137
117,617
138,619
261,415
557,303
121,606
138,213
250,781
556,780
122,682
141,510
250,297
553,552
123,257
142,700
251,769
n.a.
129,338
133,011
261,739
n.a.
128,855'
136,221
263,473
n.a.
129,255
138,787
266,540
n.a.
134,754'
136,170
274,951
n.a.
141,055
138,002
284,059
903,488
948,781
957,945
965,032
957,229
961,894
964,096
963,316
935,525'
936,945'
939,999
944,372'
959,454
725,045
125,666
64,207
61,459
17,944
750,071
138,798
73,888
64,910
19,045
747,020
146,578
75,058
71,520
22,785
749,020
148,541
75,594
72,947
24,706
743,518
155,748
80,364
75,384
15,461
742,747
152,567
75,295
77,272
23,255
740,066
156,920
75,626
81,294
24,078
741,081
159,742
80,194
79,548
20,071
721,765
153,363'
75,552
77,811'
19,764'
722,283
152,161'
75,673
76,488'
21,810"
724,118
158,236
76,478
81,758
18,676
717,080'
165,942'
77,870
88,072'
20,483'
718.685
171,496
78,804
92,692
22,533
34,833
41,064
41,560
42,764
42,503
43,326
43,034
42,423
40,631'
40,689'
40,313
40,880'
40,231
61,305
54,475
55,687
53,180
51,163
49,887
48,222
41,650
n.a.
n.a.
n.a.
n.a.
Mortgages
M o r t g a g e - b a c k e d secu ri tie s . . . .
C a s h and i n v e s t m e n t s e c u r i t i e s 1
Other
6 Liabilities a n d net w o r t h
7 S a v i n g s capital
8 Borrowed money
9
FHLBB
10
Other
11 O t h e r
12 N e t w o r t h 2
MEMO
13 M o r t g a g e loan c o m m i t m e n t s
outstanding3
n.a.
F S L I C - i n s u r e d f e d e r a l savings b a n k s
14 Assets
98,559
131,868
183,317
186,810
196,225
202,106
204,918
210,562
235,428'
235,762'
241,425
246,277'
253,007
15 M o r t g a g e s
16 M o r t g a g e - b a c k e d secu ritie s
17 O t h e r
57,429
9,949
10,971
72,355
15,676
11,723
101,755
23,247
17,027
103,019
24,097
17,056
108,627
26.431
18,509
110,826
27,516
18,697
112,117
28,324
19,266
113,638
29,766
19,034
136,770'
33,570
15,769'
136,489'
34,634
16,059'
138,705
36,104
16,739
140,861
37,511
17,032'
144,588
39,382
17,201
18 Liabilities a n d net w o r t h
98,559
131,868
183,317
186,810
196,225
202,106
204,918
210,562
235,428'
235,762
241,425
246,277'
253,007
19
20
21
72
73
24
79,572
12,798
7,515
5,283
1,903
4,286
103,462
19,323
10,510
8,813
2,732
6,351
140,610
28,722
15,866
12,856
4,564
9,422
142,858
29,390
16,123
13,267
4,914
9,647
149,074
32,319
16,853
15,466
4,666
10,165
152,834
33,430
17,382
16,048
5,330
10,511
154,447
33,937
17,863
16,074
5,652
10,883
157,872
37,329
19,897
17,432
4,263
11,098
176,741'
40,614
20,730
19,884
5,303'
12,774'
177,359'
39,777
20,226
19,551
5,480'
13,151'
178,689
43,915
21,104
22,811
5,251'
13,569'
180,642'
46,125
21,718
24,407
5,542'
13,977'
182,805
49,896
22,788
27,108
6,041
14,272
3,234
5,355
10,139
9,770
10,221
9,356
9,952
8,686
n.a.
n.a.
n.a.
n.a.
n.a.
S a v i n g s capital
Borrowed money
FHLBB
Other
Other
Net worth
MEMO
25 M o r t g a g e loan c o m m i t m e n t s
outstanding3
Savings banks
26 Assets
27
28
29
30
31
32
33
34
Loans
Mortgage
Other
Securities
U.S. government
M o r t g a g e - b a c k e d sec u r itie s
S t a t e a n d local g o v e r n m e n t
Corporate and other
Cash
Other assets
35 Liabilities
36 D e p o s i t s
37
Regular 4
38
O r d i n a r y savings
39
Time
40
Other
41 O t h e r liabilities
42 G e n e r a l r e s e r v e a c c o u n t s . . .
203,898
216,776
224,569
227,011
228,854
230,919
232,577
236,866
235,603
238,074
240,739
243,454'
245,906
102,895
24,954
110,448
30,876
111,971
36,421
113,265
37,350
114,188
37,298
116,648
36,130
117,612
36,149
118,323
35,167
119,199
36,122
119,737
37,207
121,178
38,012
122,769'
37,136'
124,936
37,313
14,643
19,215
2,077
23,747
4,954
11,413
13,111
19,481
2,323
21,199
6,225
13,113
12,297
22,954
2,309
20,862
4,651
13,104
12,043
21,161
2,400
20,602
5,018
13,172
12,357
23,216
2,407
20,902
4,811
13,675
12,585
23,437
2,347
21,156
5,195
13,421
13,037
24,051
2,290
20,749
5,052
13,637
14,209
25,836
2,185
20,459
6,894
13,793
13,332
26,220
2,180
19,795
5,239
13,516
13,525
26,893
2,168
19,770
5,143
13,631
13,631
27,463
2,041
19,598
5,703
13,713
13,743'
28,700'
2,063'
19,768
5,308'
13,967'
13,650
28,739
2,053
19,956
5,176
14,083
203,898
216,776
224,569
227,011
228,854
230,919
232,577
236,866
235,603
238,074
240,739
243,454'
245,906
188,615
183,433
34,166
102,374
5,182
20,641
15,084
189,937
184,764
34,530
102,668
5,173
21,360
15,427
190,210
185,002
35,227
102,191
5,208
21,947
16,319
190,334
185,254
36,165
101,125
5,080
23,319
16,896
190,858
185,958
36,739
101,240
4,900
24,254
17,146
192,194
186,345
37,717
100,809
5,849
25,274
18,105
191,441
186,385
38,467
100,604
5,056
24,710
18,236
192,559
187,597
39,370
100,922
4,962
25,663
18,486
193,693
188,432
40,558
100,896
5,261
27,003
18,830
193,347'
187,791'
41,326'
100,308'
5,556'
29,105'
19,423'
194,742
189,048
41,967
100,607
5,694
30,436
19,603
180,616
177,418
33,739
104,732
3,198
12,504
10,510
185,972
181,921
33,018
103,311
4,051
17,414
12,823
Financial Markets
All
1.37—Continued
1987
1986
Account
1984
1985
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Credit unions 5
43 Total assets/liabilities and capital.
93,036
118,010
137,901
139,233
140,496
143,662
145,653
147,726
149,383
149,751
153,253
154,549
156,086
44
45
63,205
29,831
77,861
40,149
89,539
48,362
90,367
48,866
91,981
48,515
93,257
50,405
94,638
51,015
95,483
52,243
96,801
52,586
96,753
52,998
98,799
54,454
99,751
54,798
100,153
55,933
62,561
42,337
20,224
84,348
57,539
26,809
73,513
47,933
25,580
105,963
70,926
35,037
79,647
51,331
28,316
125,331
82,596
42,735
80,656
52,007
28,649
126,268
83,132
43,136
81,820
53,042
28,778
128,125
84,607
43,518
83,388
53,434
29,954
130,483
86,158
44,325
84,635
53,877
30,758
131,778
87,009
44,769
86,137
55,304
30,833
134,327
87,954
46,373
85,984
55,313
30,671
n.a.
89,717
46,130
85,651
54,912
30,739
n.a.
89,485
46,956
86,101
55,118
30,983
n.a.
91,042
47,768
87,089
55,740
31,349
n.a.
92,012
48,002
87,765
55,952
31.813
n.a.
97,189
49,248
Federal
State
46 L o a n s outstanding
47
Federal
48
State
49 Savings
50
Federal
51
State
Life insurance companies
52 Assets
53
54
55
56
57
58
59
60
61
62
63
Securities
Government
United States 6
State and local
Foreign
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
722,979
825,901
877,919
887,255
892,304
860,682
910,691
920,771
931,962
943,421
955,269
63,899
42,204
8,713
12,982
359,333
295,998
63,335
156,699
25,767
54,505
63,776
75,230
51,700
9,708
13,822
423,712
346,216
77,496
171,797
28,822
54,369
71,971
78,722
54,321
10,350
14,051
455,013
369,704
85,309
182,542
31,151
54,249
76,214
79,188
54,487
10,472
14,229
463,135
374,670
88,465
183,943
31,844
54,247
74,898
81,636
56,698
10,606
14,332
462,540
378,267
84,273
185,268
31,725
54,273
76,862
82,047
57,511
10,212
14,324
467,433
381,381
86,052
186,976
31,918
54,199
77,798
84,858
59,802
10,712
14,344
473,860
386,293
87,567
189,460
32,184
54,152
76,177
85,849
61,494
10,267
14,088
474,485
386,994
87,491
192,975
32,079
54,016
81,367
85,000
61,014
10,048
13,938
487,837
395,994
91,843
193,395
32,229
53,692
79,809
87,678
63,580
10,264
13,834
497,143
401,231
95,912
193,957
32,061
53,696
78,886
90,699
66,577
10,423
13,699
501,622
404,112
97,510
194,689
31,875
53,580
82,804
1. Holdings of stock of the Federal H o m e Loan Banks are in " o t h e r a s s e t s . "
2. Includes net undistributed income accrued by most associations.
3. As of July 1985, data include loans in process.
4. Excludes checking, club, and school accounts.
5. Data include all federally insured credit unions, both federal and state
chartered, serving natural persons.
6. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under " B u s i n e s s " securities.
7. 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 based on annual benchmarks for non-FSLICinsured associations and the experience of FSLIC-insured associations.
n. a.
n.a.
FSLIC-insured
federal savings banks: Estimates by the F H L B B for federal
savings banks insured by the F S L I C and based on monthly reports of federally
insured institutions.
Savings banks: Estimates by the National Council of Savings Institutions for all
savings banks in the United States and for FDIC-insured savings banks that have
converted to federal savings banks.
Credit unions: Estimates by the National Credit Union Administration for
federally chartered and federally insured state-chartered credit unions serving
natural persons.
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. Adjustments for interest due and accrued and for
differences between market and book values are not made on each item separately
but are included, in total, in " o t h e r a s s e t s . "
A28
1.38
DomesticNonfinancialStatistics • October 1987
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
T y p e of account or operation
U.S.
budget1
1 Receipts, total
On-budget
2
Off-budget
4 Outlays, total
On-budget
5
Off-budget
6
7 Surplus, or deficit ( - ) , total
On-budget
8
Off-budget
9
10
11
Source of financing (total)
Borrowing f r o m the public
Operating cash (decrease, or increase
(-)
12
Other 2
Fiscal
year
1984
Fiscal
year
1985
Fiscal
year
1986
1987
Feb.
Mar.
Apr.
May
June
July
769,091
568,862
200,228
989,815
806,318
183,498
-220,725
-237,455
16,371
55,463
37,919
17,544
83,828
67,138
16,690
-28,366
-29,219
854
56,515
38,469
18,046
84,527
67,872
16,655
-28,012
-29,403
1,391
122,897
99,083
23,814
84,240
69,215
15,025
38,657
29,867
8,790
47,691
30,205
17,486
83,435
66,389
17,046
-35,744
-36,184
440
82,945
64,222
18,723
83,366
66,221
17,145
-420
-1,998
1,578
64,223
47,880
16,343
86,491
70,806
15,685
-22,268
-22,926
658
666,457
500,382
166,075
851,781
685,968
165,813
-185,324
-185,586
262
734,057
547,886
186,171
946,316
769,509
176,807
-212,260
-221,623
9,363
170,817
197,269
236,284
15,248
7,884
9,075
13,005
9,655
-3,103
6,631
7,875
13,367
1,630
-14,324
-1,235
16,491
-3,456
15,846
4,506
-46,775
-543
22,638
-1,478
-6,966
-2,801
20,655
4,716
30,426
8,514
21,913
17,060
4,174
12,886
31,384
7,514
23,870
24,816
3,482
21,334
8,969
3,576
5,394
55,744
29,688
26,056
33,106
6,383
26,723
40,072
13,774
26,298
19,417
5,365
14,052
MEMO
13 T r e a s u r y operating balance (level, end of
period)
14
Federal Reserve Banks
15
T a x and loan a c c o u n t s
1. In a c c o r d a n c e with the Balanced Budget and Emergency Deficit Control Act
of 1985, all f o r m e r off-budget entries are now presented on-budget. The Federal
Financing Bank ( F F B ) activities are now shown as separate accounts under the
agencies that use the F F B to finance their programs. The act has also moved two
social security trust f u n d s (Federal old-age survivors insurance and Federal
disability insurance trust funds) off-budget.
2. Includes S D R s ; r e s e r v e position on the U.S. quota in the I M F ; loans to
international m o n e t a r y f u n d ; other cash and monetary assets; accrued interest
payable to the public; allocations of special drawing rights; deposit f u n d s ;
miscellaneous liability (including c h e c k s outstanding) and asset a c c o u n t s ;
seigniorage; increment on gold; net gain/loss for U . S . c u r r e n c y valuation adjustment; net gain/loss for I M F valuation a d j u s t m e n t ; and profit on the sale of gold.
Reflecting the change in Monthly T r e a s u r y Statement classification, Table 2,
monthly data as well as fiscal year data now include m o n e t a r y a s s e t s other than
operating cash with " o t h e r " , sources of financing, (line 12).
SOURCE. " M o n t h l y Treasury Statement of Receipts and O u t l a y s of the U . S .
G o v e r n m e n t " and the Budget of the U.S.
Government.
Federal Finance
1.39
A29
U.S. BUDGET RECEIPTS AND OUTLAYS
Millions of dollars
Calendar year
Source or type
Fiscal
year
1985
Fiscal
year
1986
1987
1987
1986
1985
H2
HI
H2
HI
May
June
July
RECEIPTS
1 All sources
2 Individual income taxes, net
3
Withheld
4
Presidential Election Campaign Fund . . . .
5
Nonwithheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10
Employment taxes and
contributions
11
Self-employment taxes and
contributions
12
Unemployment insurance
13
Other net receipts
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 4
734,057
769,091
364,790
394,345
387,524
447,282
47,691
82,945
64,223
334,531
298,941
35
101,328
65,743
348,959
314,838
36
105,994
71,873
169,987
155,725
6
22,295
8,038
169,444
153,919
31
78,981
63,488
183,156
164,071
4
27,733
8,652
205,157
156,760
30
112,421
64,052
9,275
24,823
7
7,228
22,782
40,521
25,525
4
16,574
1,583
31,889
31,596
2
2,452
2,160
77,413
16,082
80,442
17,298
36,528
7,751
41,946
9,557
42,108
8,230
52,396
10,881
2,885
1,042
13,572
2,599
3,812
1,454
265,163
283,901
128,017
156,714
134,006
163,519
30,218
24,712
23,346
234,646
255,062
116,276
139,706
122,246
146,6%
22,270
23,981
20,890
10,468
25,758
4,759
11,840
24,098
4,742
985
9,281
2,458
10,581
14,674
2,333
1,338
9,328
2,429
12,020
14,514
2,310
732
7,529
419
1,612
315
416
155
2,038
417
35,992
12,079
6,422
18,539
32,919
13,323
6,958
19,887
18,470
6,354
3,323
9,861
15,944
6,369
3,487
10,002
15,947
7,282
3,649
9,605
15,845
7,129
3,818
10,299
2,633
1,142
726
1,853
3,099
1,415
507
1,719
2,908
1,420
671
1,631
946,316
989,815
487,188
486,037
504,785
503,338
83,435
83,366
86,491
138,544
8,876
4,594
2,735
7,141
16,160
142,846
4,420
4,324
2,335
6,179
11,824
23,471
831
779
356
985
716
24,694
1,068
836
598
1,176
-342
24,126
1,145
836
256
1,392
1,462
4,889
12,113
3,108
997
2,089
585
703
2,539
584
232
2,289
603
OUTLAYS
18 Ail types
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology . . . .
Energy
Natural resources and environment
Agriculture
25
26
27
28
C o m m e r c e and housing credit
Transportation
Community and regional development
Education, training, employment, social
services
252,748
16,176
8,627
5,685
13,357
25,565
273,369
14,471
9,017
4,792
13,508
31,169
134,675
8,367
4,727
3,305
7,553
15,412
135,367
5,384
12,519
2,484
6,245
14,482
4,229
25,838
7,680
4,258
28,058
7,510
644
15,360
3,901
860
12,658
3,169
3,647
14,745
3,494
29,342
29,662
14,481
14,712
15,268
14,182
2,255
2,143
1,854
29 Health
30 Social security and medicare
31 Income security
33,542
254,446
128,200
35,936
190,850
120,686
17,237
129,037
59,457
17,872
135,214
60,786
19,814
138,2%
59,628
20,318
142,864
62,248
3,544
23,782
10,273
3,525
26,339
7,931
3,466
26,431
11,460
32
33
34
35
36
37
26,352
6,277
5,228
6,353
129,436
-32,759
26,614
6,555
6,7%
6,430
135,284
-33,244
14,527
3,212
3,634
3,391
67,448
-17,953
12,193
3,352
3,566
2,179
68,054
-17,193
14,497
3,360
2,786
2,767
65,816
-17,426
12,264
3,626
3,238
455
70,110
-18,005
2,047
646
358
62
12,284
-2,626
2,440
690
1,448
54
10,010
-3,069
3,368
754
209
167
11,711
-2,831
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest'
Undistributed offsetting receipts
1. Old-age, disability, and hospital insurance, and railroad retirement accounts.
2. Old-age, disability, and hospital insurance.
3. Federal employee retirement contributions and civil service retirement and
disability f u n d .
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
5. Net interest function includes interest received by trust f u n d s .
6. Consists of 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 .
G o v e r n m e n t , " and the Budget of the U.S. Government,
Fiscal Year 1988.
A30
D o m e s t i c Financial Statistics •
O c t o b e r 1987
1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1985
1986
1987
Item
Mar. 31
June 30
Sept. 30
1 Federal debt outstanding
1,715.1
1,779.0
2 Public debt securities
3
Held by public
4
Held by agencies
1,710.7
1,415.2
295.5
5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
1,827.5
1,950.3
1,991.1
2,063.6
2,129.5
2,218.9
2,250.7
1,774.6
1,460.5
314.2
1,823.1
1,506.6
316.5
1,945.9
1,597.1
348.9
1,986.8
1,634.3
352.6
2,059.3
1,684.9
374.4
2,125.3
1,742.4
382.9
2,214.8
1,811.7
403.1
2,246.7
1,839.3
407.5
4.4
3.3
1.1
4.4
3.3
1.1
4.4
3.3
1.1
4.4
3.3
1.1
4.3
3.2
1.1
4.3
3.2
1.1
4.2
3.2
1.1
4.0
3.0
1.1
4.0
2.9
1.1
1,711.4
1,775.3
1,823.8
1,932.4
1,973.3
2,060.0
2,111.0
2,200.5
2,232.4
1,931.1
1.3
1,972.0
1.3
2,058.7
1.3
2,109.7
1.3
2,199.3
1.3
2,231.1
1.3
2,078.7
2,078.7
2,078.7
2,111.0
2,300.0
2,300.0
9 Public debt securities
10 Other debt 1
1,710.1
1.3
1,774.0
1.3
1,822.5
1.3
11 MEMO: Statutory debt limit
1,823.8
1,823.8
1,823.8
1. Includes guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.
1.41 GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. Treasury Bulletin and Monthly
United
States.
Statement
of the Public Debt of the
Types and Ownership
Billions of dollars, end of period
1987
1986
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues 2
Government
Public
Savings bonds and notes
Government account series 3
14 Non-interest-bearing debt
15
16
17
18
19
20
21
22
23
24
25
26
By holder4
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Money market funds
Insurance companies
Other companies
State and local Treasurys
Individuals
Savings bonds
Other securities
Foreign and international 5
Other miscellaneous investors 6
1983
1985
1986
Q2
Q3
Q4
Q1
1,410.7
1,663.0
1,945.9
2,214.8
2,059.3
2,125.3
2,214.8
2,246.7
1,400.9
1,050.9
343.8
573.4
133.7
350.0
36.7
10.4
10.4
.0
70.7
231.9
1,660.6
1,247.4
374.4
705.1
167.9
413.2
44.4
9.1
9.1
.0
73.1
286.2
1,943.4
1,437.7
399.9
812.5
211.1
505.7
87.5
7.5
7.5
.0
78.1
332.2
2,212.0
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2,056.7
1,498.2
396.9
869.3
232.3
558.5
98.2
5.3
5.3
.0
82.3
372.3
2,122.7
1,564.3
410.7
896.9
241.7
558.4
102.4
4.1
4.1
.0
85.6
365.9
2,212.0
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2,244.0
1,635.7
406.2
955.3
259.3
608.3
118.5
4.9
4.9
.0
93.0
391.4
9.8
2.3
2.5
2.8
2.6
2.6
2.8
2.7
236.3
151.9
1,022.6
188.8
22.8
56.7
39.7
155.1
289.6
160.9
1,212.5
183.4
25.9
76.4
50.1
179.4
348.9
181.3
1,417.2
192.2
25.1
95.8
59.0
n.a.
403.1
211.3
1,602.0
225.0
28.6
106.9
68.8
n.a.
374.4
183.8
1,502.7
197.2
22.8
97.7
61.2
n.a.
382.9
190.8
1,553.3
212.5
24.9
100.9
65.7
n.a.
403.1
211.3
1,602.0
225.0
28.6
106.9
68.8
n.a.
407.5
n.a.
1,641.4
232.0
18.8
n.a.
72.1
n.a.
71.5
61.9
166.3
259.8
74.5
69.3
192.9
360.6
79.8
75.0
214.6
n.a.
92.3
70.4
257.0
n.a.
83.8
75.7
239.8
n.a.
87.1
70.9
256.3
n.a.
92.3
70.4
257.0
n.a.
94.7
68.4
272.1
n.a.
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. Treasury agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. Treasury agencies and trust funds
are actual holdings; data for other groups are Treasury estimates.
1984
5. Consists of investments of foreign and international accounts. Excludes
non-interest-bearing notes issued to the International Monetary F u n d .
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust f u n d s , dealers and b r o k e r s , certain
U.S. Treasury deposit accounts, and federally-sponsored agencies.
SOURCES. Data by type of security, U.S. Treasury Department,
Monthly
Statement of the Public Debt of the United States; data by holder. Treasury
Bulletin.
Federal Finance
1.42 U.S. GOVERNMENT SECURITIES DEALERS
A31
Transaction1
Par value; averages of daily figures, in millions of dollars
1987
1987
Item
1
?
3
4
6
7
8
9
10
11
1?
13
14
15
16
17
18
Immediate delivery 2
U.S. Treasury securities
By maturity
Bills
Other within 1 year
1 - 5 years
5 - 1 0 years
Over 10 years
By type of customer
U . S . government securities
dealers
U.S. government securities
brokers
All others 3
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures contracts
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions"
U.S. Treasury securities
Federal agency securities
1984
1985
1986
June'
July
June 24
July 1
July 8
July 15
July 22
July 29
52,778
75,331
95,447
116,376
110,375
90,988
103,585
112,717
94,223
93,990
85,192
81,505
26,035
1,305
11,733
7,606
6,099
32,900
1,811
18,361
12,703
9,556
34,249
2,115
24,667
20,455
13,961
36,915
3,084
30,992
22,726
22,660
35,309
3,446
26,593
27,509
17,518
32,410
3,575
22,177
19,410
13,416
26,908
2,585
30,174
25,792
18,127
37,942
4,052
26,978
28,681
15,065
36,439
3,854
21,306
20,042
12,581
33,263
3,420
22,022
20,684
14,601
26,649
2,846
21,387
20,421
13,890
26,112
4,050
19,434
18,083
13,827
2,919
3,336
3,646
2,801
2,822
2,3%
2,243
3,766
3,317
2,300
2,153
1,554
25,580
24,278
7,846
4,947
3,243
10,018
36,222
35,773
11,640
4,016
3,242
12,717
49,368
42,218
16,746
4,355
3,272
16,660
63,082
49,815
19,695
3,880
2,762
18,375
58,797
47,962
18,625
3,973
2,740
17,227
48,812
38,971
17,918
3,938
3,143
17,882
55,136
46,206
20,413
3,649
2,352
15,493
59,572
49,378
17,798
3,788
3,136
19,523
49,776
41,128
16,663
4,667
3,528
19,782
50,812
40,878
23,650
4,249
3,543
18,515
46,773
36,265
19,097
3,813
2,897
16,645
45,987
33,964
13,042
3,523
2,733
15,576
6,947
4,533
264
5,561
6,085
252
3,311
7,175
16
4,128
10,374
6
2,810
8,001
13
2,080
6,813
6
2,021
6,723
19
2,351
6,471
0
1,549
6,179
8
2,029
7,361
0
1,777
6,350
0
2,507
7,178
21
1,364
2,843
1,283
3,857
1,876
7,830
2,841
11,951
1,869
9,875
819
9,854
2,544
10,570
1,695
5,%1
993
8,355
994
13,647
781
11,277
653
7,603
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of N e w York by the U . S . government securities dealers on
its published list of primary dealers.
Averages for transactions are based on the number of trading days in the period.
T h e figures exclude allotments of, and exchanges for, new U.S. Treasury
securities, redemptions of called o r matured securities, purchases or sales of
securities under repurchase agreement, reverse repurchase (resale), or similar
contracts.
2. Data for immediate transactions d o not include forward transactions.
3. Includes, among others, all other dealers and brokers in commodities and
May r
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
4. 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.
5. Forward transactions are agreements arranged in the over-the-counter
market in which securities are purchased (sold) for delivery after 5 business days
from the date of the transaction for Treasury securities (Treasury bills, notes, and
bonds) or after 30 days for mortgage-backed agency issues.
A32
1.43
DomesticNonfinancialStatistics • October 1987
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Averages of daily figures, in millions of dollars
1987
Item
1984
1985
1987
1986
May
June
July
July 1
July 8
July 15
July 22
July 29
Positions
1
Net immediate'
U.S. Treasury securities
5,429
7,391
13,055
-8,006'
-8,888
-7,442
-3,314
-4,151
-8,315
-15,551
2
3
4
5
6
Bills
Other within 1 year
1 - 5 years
5 - 1 0 years
O v e r 10 years
5,500
63
2,159
-1,119
-1,174
10,075
1,050
5,154
-6,202
-2,686
12,723
3,699
9,297
-9,504
-3,161
-5,943r
3,527''
1,072
-7,636'
-4,494'
2,240'
2,106'
371
-7,525''
-5,197
5,018
1.259
-2,326
-6,999
-5,839
1,948
1,508
2,473
-7,120
-6,251
7,374
1,835
389
-6,799
-6,114
8,860
1,201
-1,060
-6,916
-6,235
6,244
1,497
-3,393
-6,799
-5,863
657
1,228
-4,937
-7,271
-5,229
7
8
9
10
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities
Forward positions
U.S. Treasury securities
Federal agency securities
15,294
7,369
3,874
3,788
22,860
9,192
4,586
5,570
33,066
10,533
5,535
8,087
32,760
8,996
3,712
6,588
32,014'
8,612
3,777
7,202'"
33,197
7.414
3,188
6,462
31,002
7,933
3,916
6,667
32,074
7,492
3,915
6,673
34,430
7,597
3,315
6,338
35,128
7,266
2,915
6,125
31,869
7,093
2,689
6,393
-4,525
1,794
233
-7,322
4,465
-722
-18.062
3,489
-153
1,779
2,609
-98
-585'
3,181'
-100
918
6,1%
-96
-45
4,136
-96
2,051
4,960
-96
1,297
5,630
-96
629
6,684
-96
90
7,326
-96
-1,643
-9,205
-911
-9,420
-2,304
-11,909
-921
-19,241'
-1,759
-20,161
-1,005
-17,725
-1,486
-19,285
-1,433
-21,431
-1,666
-21,718
-2,419
-18,733
11
12
13
14
15
-13,475
-4,292''
-20,339
Financing 1
Reverse repurchase agreements 4
Overnight and continuing
Term agreements . .
Repurchase agreements'
18
Overnight and continuing
19
Term agreement
16
17
44,078
68,357
68,035
80,509
98,954
108,693
122,078
151,163
100,701
149,724
124,938
150,323
126,344
144,974
113,887
143,952
124,534
149,616
125,703
149,427
133,211
156,483
75,717
57,047
101,410
70,076
141,735
102,640
165,707
124,599
172,523
121,818
168,870
120,198
175,758
112,881
165,780
110,193
170,584
117,249
168,703
123,135
166,552
129,083
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of New York by the U.S. Treasury
securities dealers on its published list of primary dealers.
Data for positions are averages of daily figures, in terms of par value, based on
the number of trading days in the period. Positions are net amounts and are shown
on a commitment basis. Data for financing are in terms of actual amounts
borrowed or lent and are based on Wednesday figures.
2. 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). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Immediate positions include
reverses to maturity, which are securities that were sold after having been
obtained under reverse repurchase agreements that mature on the same day as the
securities. Data for immediate positions do not include forward positions.
3. Figures cover financing involving U.S. Treasury and federal agency securities, negotiable C D s , bankers acceptances, and commercial paper.
4. 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, that is, matched agreements.
5. Includes both repurchase agreements undertaken to finance positions and
"matched b o o k " repurchase agreements.
NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially
estimated.
Federal Finance
1.44
FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1987
1984
Agency
1 Federal and federally sponsored agencies
7 Federal agencies
3
Defense Department
Export-Import Bank 2 - 3
4
5
Federal Housing Administration 4
Government National Mortgage Association participation
6
certificates'
7
Postal Service
8
Tennessee Valley Authority
9
United States Railway Association 6
10 Federally sponsored agencies 7
11
Federal H o m e Loan Banks
17
Federal H o m e Loan Mortgage Corporation
13
Federal National Mortgage Association
14
Farm Credit Banks
15
Student Loan Marketing Association
1985
1986
Jan.
Feb.
Mar.
Apr.
May
271,220
293,905
307,361
305,114
305,603
305,033R
306,909
308,547
35,145
142
15,882
133
36,390
71
15,678
115
36,958
33
14,211
138
37,041
32
14,211
136
37,073
27
14,211
147
36,660
24
13,813
158
36,531
23
13,813
165
36,587
21
13,813
168
2,165
1,337
15,435
51
2,165
1,940
16,347
74
2,165
3,104
17,222
85
2,165
3,104
17,308
85
2,165
3,104
17,334
85
2,165
3,104
17,311
85
1,965
3,104
17,376
85
1,965
3,104
17,431
85
237,012 r
65,085
10,270
83,720
72,192 r
5,745
257,515
74,447
11,926
93,896
68,851
8,395
270,553''
88,752
13,589
93,563
62,478'
12,171
268,073
90,225
13,492
92,588
59,984
11,784
268,530
91.313
13,847
91,522
59,367
12,481
266,948 r
92,087
13,074'
91,618
57,613'
12,556'
270,378
94,606
14,850
89,741
57,251
13,930
271,960
95,931
14,637
90,514
56,648
14,230
145,217
153,373
157,510
157,650
157,724
157,012
157,177
157,331
15,852
1,087
5,000
13,710
51
15,670
1,690
5,000
14,622
74
14,205
2,854
4,970
15,797
85
14,205
2,854
4,970
15,928
85
14,205
2,854
4,970
15,954
85
13,807
2,854
4,970
15,931
85
13,807
2,854
4,970
15,996
85
13,807
2,854
4,970
16,051
85
58,971
20,693
29,853
64,234
20,654
31,429
65,374
21,680
32,545
65,374
21,719
32,515
65,374
21,749
32,533
65,224
21,473
32,668
65,254
21,487
32,724
65,304
21,525
32,735
June
n a.
99,680
n.a.
91,039
56,601 r
14,422'
MEMO
16 Federal Financing Bank debt
Lending
17
18
19
20
21
to federal
and federally
sponsored
Export-Import Bank
Postal Service
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association
Other
Lending10
77 F a r m e r s H o m e Administration
73 Rural Electrification Administration
24
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. O n c e issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing
and Urban Development; Small Business Administration; and the Veterans
Administration.
6. Off-budget.
n a.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Some data are estimated.
8. Before late 1981, the Association obtained financing through the Federal
Financing Bank (FFB).
9. The F F B , which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since F F B
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 F F B 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 F a r m e r s H o m e Administration item
consists exclusively of agency assets, while the Rural Electrification Administration entry contains both agency assets and guaranteed loans.
A34
1.45
DomesticNonfinancialStatistics • October 1987
NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1986
Type of issue or issuer,
or use
1984
1985
1987
1986'
Dec.
Jan.
Feb.
Mar.
Apr.
May
June'
July
106,641
214,189
147,011
15,662
7,343
8,969
14,591
6,849
6,037
10,718
6,755
Type of issue
2 General obligation
3 Revenue
26,485
80,156
52,622
161,567
46,346
100,664
4,426
11,236
1,100
6,243
3,643
5,325
3,853
10,738
3,449
3,405
2,872
3,165
3,329
7,389
2,271
4,484
Type of issuer
4 State
^
5 Special district and statutory authority"
6 Municipalities, counties, townships
9,129
63,550
33,962
13,004
134,363
78,754'
14,474
89,997
42,541
966'
10,431
4,265
153
5,275
1,915
1.364
5,825
1,781
1,217
10,004
3,370
427
4,790
1,637
1,001
3,019
2,017
1,125
6,453
3,127
803
3,836
2,101
7 Issues for new capital, total
94,050
156,050
83,490
10,050
1,930
2,774
4,480
3,237
3,848
7,552
4,672
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
7,553
7,552
17,844
29,928
15,415
15,758
16,658
12,070
26,852
63,181
12,892
24,398
16,948
11,666
35,383
17,332
5,594
47,433
925
356
1,165
2,930'
2,845
1,829
452
92
681
380
38
286
448
145
482
527
89
1,084
659
111
444
991
368
1,907
774
98
571
468
33
1,295
789
194
561
454
161
1,689
1,554
705
1,410
1,082
401
2,399
853
644
805
622
407
1,341
1 All issues, new and refunding'
8
9
10
11
1?
13
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts beginning April 1986.
SOURCES. Securities Data Company beginning April 1986. Public Securities
Association for earlier data. This new data source began with the N o v e m b e r
BULLETIN.
1.46 NEW SECURITY ISSUES
U.S. Corporations
Millions of dollars
1986
Type of issue or issuer,
or use
1984
1985
1987
1986
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
1 All issues'
132,531
201,269
375,056
31,588
27,206
24,168
27,048
37,953
23,735
19,969
27,513
2 Bonds 2
109,903
165,754
313,226
24,989
20,958
21,253
23,281
28,143
19,518
13,431
21,269
73,579
36,324
22,613
119,559
46,195
37,781
232,465
80,761
42,596
22,028
n.a.
2,961
18,920
n.a.
2,038
20,250
n.a.
1,003
20,274
n.a.
3,007
23,388
n.a.
4,755
17,634
n.a.
1,884
11,394
n.a.
2,037
20,000
n.a.
1,529
24,607
13,726
4,694
10,679
2,997
53,199
52,128
15,140
5,743
12,957
10,456
69,332
78,584
37,277
9,734
31,058
15,489
141,086
3,928
1,621
0
2,587
1,158
15,696
4,153
2,432
70
2,498
776
11,029
4,638
1,253
0
1,491
65
13,806
4,253
1,884
176
2,715
410
13,844
7,180
4,261
521
794
710
14.678
2,734
1,683
168
1,370
175
13,389
5,035
754
21
572
138
6,912
4,104
2,057
0
2,034
205
12,869
12 Stocks 3
22,628
35,515
68,433
6,599
6,248
2,915
3,767
9,810
4,217
6,538
6,244
Type
13 Preferred
14 C o m m o n
4,118
18,510
6,505
29,010
11,514
50,316
6,603
1,390
5,209
n.a.
1,293
4,955
n.a.
429
2,486
n.a.
905
2,862
n.a.
2,257
7.553
n.a.
526
3,691
n.a.
1,170
5,368
n.a.
1,177
5,067
n.a.
4,054
6,277
589
1,624
419
9,665
5,700
9,149
1,544
1,966
978
16,178
15,027
10,617
2,427
4,020
1,825
34,517
2,565
535
15
218
104
3,162
1,781
709
183
873
101
2,601
365
148
0
237
16
2,149
814
437
191
509
9
1,807
2,016
2,366
299
907
57
4,165
653
2.203
230
297
18
816
1,066
1,516
3
374
200
3,379
1,505
1,149
132
689
511
2,258
Type of offering
3 Public, domestic
4 Private placement, domestic 3
5. Sold abroad
6
7
8
9
10
11
16
17
18
19
20
21
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
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, are principal amount or number of units multiplied by offering price.
Excludes secondary offerings, employee stock plans, investment companies other
than closed-end, intracorporate transactions, equities sold abroad, and Yankee
bonds. Stock data include ownership securities issued by limited partnerships.
2. Monthly data include only public offerings.
3. Data are not available on a monthly basis.
SOURCES. IDD Information Services, Inc., U.S. Securities and Exchange
Commission and the Board of G o v e r n o r s of the Federal Reserve System.
Securities Market and Corporate Finance
1.47 OPEN-END INVESTMENT COMPANIES
A35
Net Sales and Asset Position
Millions of dollars
1987
1986
Item
1985
1986
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
INVESTMENT COMPANIES'
1 Sales of own shares 2
222,670
411,483
33,672
44,796
50,116
36,307
40,378
42,857
28,295
28,652
2 Redemptions of own shares 3
3 Net sales
132,440
90,230
239,394
172,089
20,724
12,948
34,835
9,961
26,565
23,551
21,576
14,731
24,730
15,648
37,448
5,409
23,453
4,842
23,707
4,945
4 Assets 4
251,695
424,156
416,939
424,156
464,415
490,643
506,752
502,487
500,634
516,819
20,607
231,088
30,716
393,440
29,579
387,360
30,716
393,440
34,098
430,317
35,279
455,364
37,090
469,662
43,009
459,478
39,158
461,476
41,537
475,282
5 Cash position
6 Other
5
5. Also includes all U.S. government securities and other s h o r t - t e r m 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 from conversions from one fund to
another in the same group.
4. Market value at end of period, less current liabilities.
NOTE. Investment Company Institute data based on reports of m e m b e r s , which
comprise substantially all o p e n - e n d investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1985
Account
1984
1985
1986
1987
1986
Q3
Q4
QL
Q2
Q3
Q4
QL
Q2
2
3
4
5
6
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
266.9
239.9
93.9
146.1
79.0
67.0
277.6
224.8
96.7
128.1
81.3
46.8
284.4
231.9
105.0
126.8
86.8
40.0
292.8
230.2
100.5
129.7
81.2
48.5
277.8
233.5
99.1
134.4
81.7
52.7
288.0
218.9
98.1
120.9
84.3
36.6
282.3
224.4
102.1
122.3
86.6
35.7
286.4
236.3
106.1
130.2
87.7
42.5
281.1
247.9
113.9
134.0
88.6
45.4
294.0
257.0
128.0
129.0
90.3
38.7
296.8
268.7
134.2
134.5
92.4
42.2
7 Inventory valuation
8 Capital consumption adjustment
-5.8
32.8
-.8
53.5
6.5
46.0
6.5
56.0
-9.8
54.2
17.8
51.3
11.3
46.7
6.0
44.0
-8.9
42.1
-11.3
48.2
-20.0
48.0
SOURCE. Survey of Current Business
(Department of Commerce).
A36
DomesticNonfinancialStatistics • October 1987
1.49 NONFINANCIAL CORPORATIONS
Assets and Liabilities1
Billions of dollars, except for ratio
1986
1985
Account
1 Current
1980
1981
1982
1983
1984
Ql
Q2
Q3
Q4
Ql
1,328.3
1,419.6
1,437.1
1,565.9
1,703.0
1,722.7
1,734.6
1,763.0
1,784.6
1,795.7
127.0
18.7
507.5
543.0
132.1
135.6
17.7
532.5
584.0
149.7
147.8
23.0
517.4
579.0
169.8
171.8
31.0
583.0
603.4
186.7
173.6
36.2
633.1
656.9
203.2
167.5
35.7
650.3
665.7
203.5
167.1
35.4
654.1
666.7
211.2
176.3
32.6
661.0
675.0
218.0
189.2
33.0
671.5
666.0
224.9
195.3
31.0
663.4
679.6
226.3
7 C u r r e n t liabilities
890.6
971.3
986.0
1,059.6
1,163.6
1,174.1
1,182.9
1,211.9
1,233.6
1,222.3
8 N o t e s and accounts payable
9 Other
514.4
376.2
547.1
424.1
550.7
435.3
595.7
463.9
647.8
515.8
636.9
537.1
651.7
531.2
670.4
541.5
682.7
550.9
668.4
553.9
10 Net working capital
437.8
448.3
451.1
516.3
539.5
548.6
551.7
551.1
551.0
573.4
11 MEMO: Current ratio 2
1.492
1.462
1.459
1.487
1.464
1.467
1.466
1.455
1.447
1.469
2
3
4
5
6
assets
Cash
U . S . government securities
N o t e s and accounts receivable
Inventories
Other
1. F o r a description of this series, see "Working Capital of Nonfinancial
C o r p o r a t i o n s " in the July 1978 BULLETIN, pp. 533-37. Data are not currently
available after 1986:1.
2. Ratio of total current assets to total current liabilities.
SOURCE. Federal Trade Commission and Bureau of the Census,
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment A
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1985
Industry
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5
Railroad
Air
6
7
Other
Public utilities
8
Electric
9
G a s and other
10 Commercial and other 2
1985
1986
1987
Q4
Ql
Q2
Q3
Q4
Ql
Q2 1
Q3 1
387.13
379.27
390.89
397.88
377.94
375.92
374.55
388.69
372.24
392.02
397.06
73.27
80.21
69.08
73.65
70.86
75.05
75.47
82.79
68.01
76.02
68.33
73.35
69.31
69.89
70.68
75.33
69.72
69.65
73.06
73.83
71.84
76.61
15.88
11.25
10.45
15.25
12.99
11.22
10.15
10.63
10.17
10.85
10.60
7.08
4.79
6.15
6.63
6.26
5.86
6.06
6.76
6.58
6.74
6.07
6.34
6.22
6.58
5.42
6.77
5.77
5.74
7.31
5.69
6.03
6.25
6.99
6.24
5.29
7.55
5.93
6.32
6.76
6.39
6.84
6.36
6.82
36.11
12.71
150.93
33.93
12.51
160.10
32.93
12.71
169.50
36.38
13.41
155.42
34.21
12.82
155.67
33.81
12.74
158.18
33.91
11.99
160.25
33.78
12.49
166.31
30.81
12.63
160.49
33.51
12.43
168.86
33.97
12.82
171.19
A T r a d e and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1. Anticipated by business.
1986
19871
2. " O t h e r " consists of construction; wholesale and retail trade; finance and
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
Securities Markets and Corporate Finance
1.51
DOMESTIC FINANCE COMPANIES
A37
Assets and Liabilities
Billions of dollars, end of period
1987
1986
Account
1982
1983
1985
1984
QL
Q2
03
Q4
QL
Q2
ASSETS
1
2
3
4
Accounts receivable, gross
Consumer
Business
Real estate
Total
5
6
Less:
R e s e r v e s for unearned income
R e s e r v e s for losses
7
8
9
75.3
100.4
18.7
194.3
83.3
113.4
20.5
217.3
89.9
137.8
23.8
251.5
113.4
158.3
28.9
300.6
117.2
165.9
29.9
312.9
125.1
167.7
30.8
323.6
137.1
161.0
32.1
330.2
136.5
174.8
33.7
345.0
133.9
182.8
35.1
351.8
136.9
189.0
36.3
362.1
29.9
3.3
30.3
3.7
33.8
4.2
39.2
4.9
40.0
5.0
40.7
5.1
42.4
5.4
41.4
5.8
40.4
5.9
41.2
6.2
A c c o u n t s receivable, net
All other
161.1
30.4
183.2
34.4
213.5
35.7
256.5
45.3
268.0
48.8
277.8
48.8
282.4
59.9
297.8
57.9
305.5
59.0
314.8
57.0
Total assets
191.5
217.6
249.2
301.9
316.8
326.6
342.3
355.6
364.5
371.8
16.5
51.4
18.3
60.5
20.0
73.1
20.6
99.2
19.0
104.3
19.2
108.4
20.2
112.8
22.2
117.8
17.3
119.1
17.2
118.7
11.9
63.7
21.6
26.4
11.1
67.7
31.2
28.9
12.9
77.2
34.5
31.5
12.5
93.1
40.9
35.7
13.4
101.0
42.3
36.7
15.4
105.2
40.1
38.4
16.0
109.8
44.1
39.4
17.2
115.6
43.4
39.4
21.6
118.4
46.3
41.8
24.2
120.4
48.1
43.1
191.5
217.6
249.2
301.9
316.8
326.6
342.3
355.6
364.5
371.8
LIABILITIES
12
13
14
15
Bank loans
Commercial paper
Debt
Other short-term
Long-term
All other liabilities
Capital, surplus, and undivided profits
16
Total liabilities and capital
10
11
NOTE. C o m p o n e n t s may not add to totals because of rounding.
1.52
DOMESTIC FINANCE COMPANIES
Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
Accounts
receivable
outstanding
June 30,
Changes in accounts receivable
Extensions
Repayments
1987
1987
1987
19871
1
2
3
4
5
6
7
8
9
10
Total
Retail financing of installment sales
A u t o m o t i v e (commercial vehicles)
Business, industrial, and farm equipment
Wholesale financing
Automotive
Equipment
All o t h e r
Leasing
Automotive
Equipment
L o a n s on commercial a c c o u n t s receivable and factored commercial a c c o u n t s receivable
All other business credit
Apr.
May
June
Apr.
May
June
Apr.
May
June
188,999
3,534
2,904
1,714
29,212
28,101
30,390
25,678
25,197
28,677
29,409
23,421
750
4
739
310
691
623
1,200
1,352
1,507
1,460
1,259
1,699
449
1,349
768
1,150
568
1,076
30,328
5,558
8,532
620
76
-25
1,133
-16
75
298
115
-256
11,474
690
3,056
10,709
513
2,964
11,701
591
3,246
10,854
614
3,082
9,577
530
2.889
11,404
476
3,502
20,508
39,695
515
582
-78
182
3
-14
1,136
970
1,455
838
1,171
1,019
622
388
1,533
655
1,168
1,033
16,701
14,847
723
290
96
464
-117
371
8,122
1,211
7,262
1,394
8,150
1,554
7,399
921
7,166
929
8,268
1,183
T h e s e data also appear in the B o a r d ' s G.20 (422) release. For address, see
inside front c o v e r .
1. Not seasonally adjusted,
A38
1.53
DomesticNonfinancialStatistics • October 1987
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1987
Item
1984
Jan.
Feb.
Mar.
Apr.
May
June
July
T e r m s and yields in primary and s e c o n d a r y m a r k e t s
PRIMARY MARKETS
1
2
3
4
5
6
Conventional mortgages on new homes
Terms1
P u r c h a s e price ( t h o u s a n d s of dollars)
A m o u n t of loan ( t h o u s a n d s of dollars)
Loan/price ratio (percent)
Maturity (years)
s
F e e s and c h a r g e s (percent of loan a m o u n t ) "
C o n t r a c t rate (percent per a n n u m )
Yield (percent per
1 F H L B B series 5
8 H U D series 4
96.8
73.7
78.7
27.8
2.64
11.87
104.1
77.4
77.1
26.9
2.53
11.12
118.1
86.2
75.2
26.6
2.48
9.82
132.6
97.3
75.5
27.7
2.23
9.14
12.37
13.80
11.58
12.28
10.25
10.07
9.51
6.30'
13.81
13.13
12.24
11.61
9.91
9.30
8.79
8.46
135.6
99.1
75.3
27.6
2.21
8.87
130.2
95.0
74.3
27.1
2.20
8.77
136.9
100.9
75.2
27.1
2.23
8.84
132.9
99.0
76.1
28.0
2.26
8.99
131.8
97.5
75.9
28.0
2.40
9.05
129.0
96.0
76.0
28.0
2.50
9.03
9.23
6.40''
9.14
6.45'
9.21
6.55'
9.37
6.65'
9.45
6.7(Y
9.44
6.70
8.81
8.28
8.94
8.18
10.02
8.85
10.61
9.40
10.33
9.50
n.a.
year)
SECONDARY MARKETS
Yield (percent per year)
9 F H A mortgages ( H U D series)
10 G N M A securities 6
9.59
Activity in s e c o n d a r y m a r k e t s
F E D E R A L N A T I O N A L MORTGAGE ASSOCIATION
Mortgage holdings (end of
11 Total
12
FHA/VA-insured
13
Conventional
Mortgage transactions
14 P u r c h a s e s
period)
(during
83,339
35,148
48,191
94,574
34,244
60,331
98,048
29,683
68,365
96,382
22.178
74,204
95,514
22,063
73,451
95,140
21,843
73,297
94,404
21,765
72,639
94,064
21,999
72,065
94,064
21,892
72,173
94,154
21,730
72,424
16,721
21,510
30,826
1,346
979
1,435
2,118
1.718
1,690
1,569
21,007
6,384
20,155
3,402
32,987
3,386
948
2,258
912
2,175
2,805
3,539
3,208
4,421
1,726
4,410
1,745
4,448
2,373
5,071
9,283
910
8,373
12,399
841
11,559
13,517
746
12,771
12,986
686
12,300
12,911
722
12,189
12,940
717
12,223
12,492
708
11,784
12,442
688
11,754
1
T
21,886
18,506
44,012
38,905
103,474
100,236
7.950
8,269
7,961
7,840
9,394
9,143
9,777
9,357
7,995
7,767
n.a.
32,603
48,989
110,855
7,685
9,197
9,669
8,408
7,182
T
period)
Mortgage
commitments7
15 C o n t r a c t e d (during period)
16 O u t s t a n d i n g (end of period)
F E D E R A L H O M E L O A N MORTGAGE CORPORATION
Mortgage holdings
17 Total
18
FHA/VA
19
Conventional
(end of
Mortgage transactions
20 P u r c h a s e s
21 Sales
periodJ8
(during
Mortgage
commitments9
22 C o n t r a c t e d (during period)
1
period)
1. Weighted a v e r a g e s based on sample surveys of mortgages originated by
m a j o r institutional lender g r o u p s ; compiled by the Federal H o m e Loan Bank
Board in c o o p e r a t i o n with the Federal Deposit Insurance C o r p o r a t i o n .
2. Includes all f e e s , c o m m i s s i o n s , d i s c o u n t s , and " p o i n t s " paid (by the
b o r r o w e r or the seller) to obtain a loan.
3. A v e r a g e effective interest rates on loans closed, a s s u m i n g p r e p a y m e n t at the
e n d of 10 y e a r s .
4. A v e r a g e c o n t r a c t rates on new c o m m i t m e n t s for conventional first mortgages; f r o m D e p a r t m e n t of H o u s i n g and U r b a n D e v e l o p m e n t .
5. A v e r a g e gross yields on 30-year, m i n i m u m - d o w n p a y m e n t . Federal Housing
Administration-insured first m o r t g a g e s f o r immediate delivery in the private
s e c o n d a r y m a r k e t . Based on t r a n s a c t i o n s on first day of s u b s e q u e n t m o n t h . Large
monthly m o v e m e n t s in a v e r a g e yields may reflect market a d j u s t m e n t s to changes
in m a x i m u m p e r m i s s a b l e c o n t r a c t r a t e s .
n a.
1
6. Average net yields t o investors on G o v e r n m e n t National Mortgage A s s o c i ation g u a r a n t e e d , m o r t g a g e - b a c k e d , fully modified pass-through securities, assuming p r e p a y m e n t in 12 y e a r s on pools of 30-year F H A / V A m o r t g a g e s c a r r y i n g
the prevailing ceiling rate. Monthly figures are a v e r a g e s of Friday figures f r o m the
Wall Street
Journal.
7. Includes some multifamily and nonprofit hospital loan c o m m i t m e n t s in
addition to 1- to 4-family loan c o m m i t m e n t s a c c e p t e d in F N M A ' s f r e e m a r k e t
auction system, and through the F N M A - G N M A t a n d e m plans.
8. Includes participation as well as w h o l e loans.
9. Includes conventional and g o v e r n m e n t - u n d e r w r i t t e n loans. F H L M C ' s m o r t gage c o m m i t m e n t s and mortgage t r a n s a c t i o n s include activity u n d e r mortgage/
securities swap p r o g r a m s , while the c o r r e s p o n d i n g d a t a for F N M A e x c l u d e s w a p
activity.
Real Estate
A39
1.54 MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1987
1986'
Type of holder, and type of property
1984 r
1985'
1986'
Q2
Q3
Q4
Ql'
Q2
1 All holders
2,035,238
2,269,173
2,565,867
2,386,022
2,471,574
2,565,867
2,659,478
2,744,720
? 1- to 4-family
3 Multifamily
4 Commercial
5
1,318,545
185,604
419,444
111,645
1,467,409
214,045
482,029
105,690
1,666,357
246,879
555,825
96,806
1,544,392
229,405
511,038
101,187
1,607,799
237,661
526,535
99,579
1,666,357
246,879
555,825
%,806
1,709,794
259,286
597,082
93,316
1,770,342
266,941
615,839
91,598
1,269,702
379,498
196,163
20,264
152,894
10,177
1,390,394
429,1%
213,434
23,373
181,032
11,357
1,506,422
502,534
235,814
31,173
222,799
12,748
1,435,437
456,163
221,640
26,799
195,484
12,240
1,464,213
474,658
228,593
28,623
204,996
12,446
1,506,422
502.534
235,814
31,173
222,799
12,748
1,557,550
517,271
241,512
31,745
230,771
13,243
1,601,315
542,575
251,701
33,585
243,399
13,890
709,718
528,791
75,567
104,896
464
156,699
14,120
18,938
111,175
12,466
23,787
760,499
554,301
89,739
115,771
688
171,797
12,381
19,894
127,670
11,852
28,902
777,312
558,412
97,059
121,236
605
192,975
12,763
20,847
148,367
10,998
33,601
768,435
556,039
92,563
119,195
638
180,041
12,608
20,181
135,924
11,328
30,798
772,175
557,938
94,227
119,406
604
185,269
12,927
20,709
140,213
11,420
32,111
777,312
558,412
97,059
121,236
605
192,975
12.763
20,847
148,367
10,998
33,601
809,967
557,065
103,698
148,688
516
195,225
12,763
20,797
151,167
10,498
35,087
823,217
567,262
105,649
149,804
502
198,625
12,763
20,797
154,767
10,298
36,898
158,993
2,301
585
1,716
1,276
213
119
497
447
166,928
1,473
539
934
733
183
113
159
278
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
161,398
876
49
827
570
146
66
111
247
159,505
887
48
839
457
132
57
115
153
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
199,509
687
46
641
48,203
21,390
7,710
8,463
10,640
195,972
665
45
620
48,085
21,157
7,808
8,553
10,567
4,816
2,048
2,768
87,940
82,175
5,765
52,261
3,074
49,187
10,399
9,654
745
4,920
2,254
2,666
98,282
91,966
6,316
47,498
2,798
44,700
14,022
11,881
2,141
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2.353
37,631
11,564
10,010
1,554
5,094
2,449
2,645
97,295
90,460
6,835
43,369
2,552
40,817
14,194
11,890
2,304
4,966
2,331
2,635
97,717
90,508
7,209
42,119
2,478
39,641
13,359
11,127
2,232
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
5,177
2,447
2,730
95,140
88,106
7,034
37,362
2,198
35,164
12,940
11,774
1,166
5,254
2,504
2,750
94,064
87,013
7,051
35,562
2,092
33,470
12,342
10,820
1,522
44 Mortgage pools or trusts 6
45
Government National Mortgage Association
46
1- to 4-family
47
Multifamily
48
Federal H o m e Loan Mortgage Corporation
49
1- to 4-family
50
Multifamily
51
Federal National Mortgage Association
5?
1- to 4-family
53
Multifamily
54
Farmers Home Administration
55
1- to 4-family
56
Multifamily
Commercial
57
58
Farm
332,057
179,981
175,589
4,392
70,822
70,253
569
36,215
35,965
250
45,039
21,813
5,841
7,559
9,826
415,042
212,145
207,198
4,947
100,387
99,515
872
54,987
54,036
951
47,523
22,186
6,675
8,190
10,472
529,763
260,869
255,132
5,737
171,372
166,667
4,705
97,174
95,791
1,383
348
142
0
132
74
475,615
229,204
223,838
5,366
125,903
123,676
2,227
72,377
71,153
1,224
48,131
21,987
7,170
8,347
10,627
522,721
241,230
235,664
5,566
146,871
143,734
3,137
86,359
85,171
1,188
48,261
21,782
7,353
8,409
10,717
529,763
260,869
255,132
5,737
171,372
166,667
4,705
97,174
95,791
1,383
348
142
0
132
74
571,705
277,386
271,065
6,321
186,295
180,602
5,693
107,673
106,068
1,605
351
154
0
127
70
612,188
290,512
283,892
6,620
200,064
194,064
6,000
121,270
119,540
1,730
342
149
0
126
67
59 Individuals and others 7
60
1- to 4-family
61
Multifamily
6?
Commercial
Farm
63
274,486
154,315
48,670
42,423
29,078
296,809
165,835
55,424
49,207
26,343
325,882
180,896
66,133
54,845
24,008
313,572
175,107
61,198
51,977
25,290
325,135
183,255
63,886
53,396
24,598
325,882
180,896
66,133
54,845
24,008
330,714
179,517
70,146
57,866
23,185
335,245
180,442
72,809
59,190
22,804
6 Selected financial institutions
7
Commercial banks"
8
1- to 4-family
9
Multifamily
Commercial
10
Farm
11
1?
13
14
If
16
17
18
19
70
71
22
Savings institutions 3
1- to 4-family
Multifamily
Commercial
Farm
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
Finance companies
73 Federal and related agencies
Government National Mortgage Association
74
75
1- to 4-family
76
Multifamily
77
Farmers H o m e Administration
78
1- to 4-family
79
Multifamily
30
Commercial
Farm
31
37.
33
34
35
36
37
38
39
40
41
47
43
Federal Housing and Veterans Administration
1- to 4-family
Multifamily
Federal National Mortgage Association
1- to 4-family
Multifamily
Federal Land Banks
1- to 4-family
Farm
Federal H o m e Loan Mortgage Corporation
1- to 4-family
Multifamily
1. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve. Multifamily debt refers
to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not bank trust
departments.
3. Includes savings banks and savings and loan associations. Beginning 1987:1,
data reported by FSLIC-insured institutions include loans in process and other
contra assets.
4. Assumed to be entirely 1- to 4-family loans.
5. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from F m H A mortgage pools to F m H A mortgage holdings in 1986: 4,
because of accounting changes by the Farmers Home Administration.
6. Outstanding principal balances of mortgage pools backing securities insured
or guaranteed by the agency indicated.
7. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement f u n d s , noninsured
pension funds, credit unions, and other U.S. agencies.
A40
DomesticNonfinancialStatistics • October 1987
1.55 CONSUMER INSTALLMENT CREDIT1-4 Total Outstanding, and Net Change, seasonally adjusted
Millions of dollars
1986
1987
Holder, and type of credit
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Mayr
June
Amounts outstanding (end of period)
1 Total
522,805
577,784
576,874
577,656
577,784
578,578
579,591
579,913
583,595
583,276
586,737
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
242,084
113,070
72,119
38,864
52,433
4,235
261,604
136,494
77,857
40,586
58,037
3,205
260,940
138,038
76,995
40,565
57,046
3,289
262,949
136,314
77,508
40,496
57,168
3,221
261,604
136,494
77,857
40,586
58,037
3,205
261,694
135,802
78,284
40,617
58,906
3,276
262,105
136,009
78,492
40,644
59,031
3,311
261,933
136,050
78,569
40,469
59,488
3,405
263,433
137,091
79,255
40,467
59,826
3,522
263,463
136,398
79,476
40,318
60,045
3,576
264,167
138,038
79,713
40,287
60,999
3,532
By major type of credit
8 Automobile
9
Commercial banks
to Credit unions
11
Finance companies
12
Savings institutions
208,057
93,003
35,635
70,091
9,328
245,055
100,709
39,029
93,274
12,043
243,400
99,385
38,597
93,786
11,632
243,005
100,221
38,854
92,188
11,742
245,055
100,709
39,029
93,274
12,043
245,472
101,389
39,243
92,617
12,223
246,064
101,688
39,347
92,780
12,249
246,290
101,528
39,386
93,032
12,344
247,663
101,781
39,730
93,738
12,414
247,578
102,189
39,841
93,089
12,459
249,539
102,652
39,959
94,270
12,657
13 Revolving
14
Commercial banks
15
Retailers
16
Gasoline companies
17
Savings institutions
18
Credit unions
122,021
75,866
34,695
4,235
5,705
1,520
134,938
85,652
36,240
3,205
7,713
2,128
133,816
84,868
36,190
3,289
7,445
2,024
134,391
85,426
36,137
3,221
7,529
2,078
134,938
85,652
36,240
3,205
7,713
2,128
134,916
85,395
36,277
3,276
7,829
2,139
135,663
86,053
36,308
3,311
7,845
2,145
135,166
85,567
36,141
3,405
7,906
2,147
136,706
86,929
36,139
3,522
7,951
2,166
136,869
87,133
36,009
3,576
7,980
2,172
137,258
87,469
35,971
3,532
8,107
2,179
19 Mobile home
Commercial b a n k s
20
21
Finance companies
22
Savings institutions
25,488
9,538
9,391
6,559
25,710
8,812
9,028
7,870
25,784
9,025
9,149
7,610
25,731
8,951
9,091
7,689
25,710
8,812
9,028
7,870
25,852
8,787
9,077
7,988
25,789
8,739
9,045
8,005
25,614
8,725
8,823
8,067
25,626
8,698
8,816
8,112
25,542
8,615
8,785
8,142
25,695
8,617
8,807
8,271
23 Other
24
Commercial banks
25
Finance companies
26
Credit unions
27
Retailers
Savings institutions
28
167,239
63,677
33,588
34,964
4,169
30,841
172,081
66,431
34,192
36,700
4,346
30,412
173,874
67,662
35,104
36,374
4,375
30,359
174,529
68,351
35,035
36,576
4,359
30,208
172,081
66,431
34,192
36,700
4,346
30,412
172,338
66,122
34,108
36,901
4,340
30,867
172,076
65,625
34,183
36,999
4,336
30,932
172,844
66,113
34,196
37,036
4,327
31,172
173,600
66,026
34,537
37,359
4,328
31,349
173,287
65,527
34,524
37,463
4,310
31,463
174,245
65,429
34,962
37,575
4,315
31,963
2
3
4
5
6
7
Net change (during period)
29 Total
76,622
54,979
5,594
782
128
794
1,013
322
3,682
-319
3,461
By major holder
Commercial b a n k s
Finance companies 2
Credit unions
Retailers
Savings institutions
Gasoline companies
32,926
23,566
6,493
1,660
12,103
-126
19,520
23,424
5,738
1,722
5,604
-1,030
1,950
2,522
696
110
359
-44
2,009
-1,724
513
-69
122
-68
-1,345
180
349
90
869
-16
90
-692
427
31
869
71
411
207
208
27
125
35
-172
41
77
-175
457
94
1,500
1,041
686
-2
338
117
30
-693
221
-149
219
54
704
1,640
237
-31
954
-44
By major type of credit
36 Automobile
37
Commercial banks
38
Credit unions
39
Finance companies
40
Savings institutions
35,705
9,103
5,330
17,840
3,432
36,998
7,706
3,394
23,183
2,715
4,386
1,328
349
2,545
164
-395
836
257
-1,598
110
2,050
488
175
1,086
301
417
680
214
-657
180
592
299
104
163
26
226
-160
39
252
95
1,373
253
344
706
70
-85
408
111
-649
45
1,961
463
118
1,181
198
41 Revolving
42
Commercial banks
43
Retailers
44
Gasoline companies
45
Savings institutions
46
Credit unions
22,401
17,721
1,488
-126
2,771
547
12,917
9,786
1,545
-1,030
2,008
608
693
438
104
-44
137
58
575
558
-53
-68
84
54
547
226
103
-16
184
50
-22
-257
37
71
116
11
747
658
31
35
16
6
-497
-486
-167
94
61
2
1,540
1,362
-2
117
45
19
163
204
-130
54
29
6
389
336
-38
-44
127
7
47 Mobile home
48
Commercial banks
49
Finance companies
50
Savings institutions
778
-85
-405
1,268
222
-726
-363
1,311
52
9
-67
110
-53
-74
-58
79
-21
-139
-63
181
142
-25
49
118
-63
-48
-32
17
-175
-14
-222
62
12
-27
-7
45
-84
-83
-31
30
153
2
22
129
51 Other
52
Commercial banks
Finance companies
53
54
Credit unions
55
Retailers
56
Savings institutions
17,738
6,187
6,131
616
172
4,632
4,842
2,754
604
1,736
177
-429
463
175
45
289
6
-52
655
689
-69
202
-16
-151
-2,448
-1,920
-843
124
-13
204
257
-309
-84
201
-6
455
-262
-497
75
98
-4
65
768
488
13
37
-9
240
756
-87
341
323
1
177
-313
-499
-13
104
-18
114
958
-98
438
112
5
500
30
31
32
33
34
35
1. T h e B o a r d ' s series cover most s h o r t - and i n t e r m e d i a t e - t e r m credit extended to individuals that is scheduled to be repaid (or has the option of
repayment) in two or more installments.
2. More detail for finance companies is available in the G.20 statistical release,
3. Excludes 3 0 - d a y charge credit held by travel and entertainment companies,
4. All data have been revised.
Consumer Installment Credit
A41
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT
Percent unless noted otherwise
1987
1986
Item
1984
1985
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
INTEREST RATES
1
2
3
4
5
<6
Commercial banks 1
48-month new c a r
24-month personal
120-month mobile home
Credit card
Auto finance companies
N e w car
Used car
13.71
16.47
15.58
18.77
12.91
15.94
14.96
18.69
11.33
14.82
13.99
18.26
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.58
14.19
13.49
18.09
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.35
14.10
13.42
18.10
n.a.
n.a.
n.a.
n.a.
14.62
17.85
11.98
17.59
9.44
15.95
5.40
15.23
6.12
15.17
11.83
15.20
11.71
15.12
11.65
14.62
10.78
14.56
10.59
14.40
48.3
39.7
51.5
41.4
50.0
42.6
44.5
42.5
45.3
42.2
53.4
42.6
53.3
42.7
53.8
44.8
53.6
44.7
53.7
44.9
88
92
91
94
91
97
92
98
92
97
93
97
93
98
94
98
94
99
94
99
9,333
5,691
9,915
6,089
10,665
6,555
11,162
6,763
11,340
6,746
11,160
6,946
10,835
7,168
10,902
7,067
10,602
7,075
10,641
7,145
OTHER TERMS3
7
8
9
10
11
12
Maturity (months)
N e w car
Used car
Loan-to-value ratio
N e w car
Used car
Amount financed (dollars)
N e w car
Used car
1. Data for midmonth of quarter only.
2. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
3. At auto finance companies.
NOTE. These data also appear in the B o a r d ' s G.19 (421) release. F o r address,
see inside front cover.
A42
1.57
DomesticNonfinancialStatistics • October 1987
F U N D S R A I S E D IN U . S . CREDIT M A R K E T S
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1981
1982
1983
1984
1986
1985
1984
Transaction category, sector
1986
1985
HI
H2
HI
H2
HI
H2
Nonfinancial sectors
375.8
387.4
548.8
756.3
869.3
834.0
727.8
784.8
732.6
1,006.1
706.0
962.5
87.4
87.8
-.5
161.3
162.1
-.9
186.6
186.7
-.1
198.8
199.0
-.2
223.6
223.7
-.1
214.3
214.7
-.3
181.3
181.5
-.2
216.3
216.4
-.1
201.8
201.9
-.1
245.5
245.5
-.1
211.3
211.4
-.1
217.5
218.0
-.5
5 Private domestic nonfinancial sectors
6
Debt capital instruments
7
Tax-exempt obligations
8
Corporate bonds
9
Mortgages
10
H o m e mortgages
11
Multifamily residential
12
Commercial
13
Farm
288.5
155.5
23.4
22.8
109.3
72.2
4.8
22.2
10.0
226.2
148.3
44.2
18.7
85.4
50.5
5.4
25.2
4.2
362.2
252.8
53.7
16.0
183.0
117.1
14.1
49.0
2.8
557.5
314.0
50.4
46.1
217.5
129.9
25.1
63.3
-.8
645.7
461.7
152.4
73.9
235.4
150.3
29.2
62.4
-6.4
619.6
461.7
49.5
113.7
298.5
199.2
33.0
73.7
-7.4
546.5
298.4
42.8
31.2
224.5
135.2
27.5
62.9
-1.1
568.5
329.6
58.0
61.1
210.5
124.7
22.7
63.7
-.5
530.8
355.4
67.5
72.7
215.2
133.1
24.6
60.3
-2.8
760.6
568.0
237.3
75.1
255.7
167.5
33.7
64.4
-10.0
494.7
392.3
15.9
137.0
239.3
156.1
30.8
59.7
-7.4
745.0
531.2
83.0
90.4
357.7
242.3
35.1
87.7
-7.4
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
133.0
22.6
57.0
14.7
38.7
77.9
17.7
52.9
-6.1
13.4
109.5
56.8
25.8
-.8
27.7
243.5
95.0
80.1
21.7
46.6
184.0
96.6
41.3
14.6
31.4
157.9
65.8
71.0
-9.3
30.3
248.1
98.7
91.9
24.8
32.7
238.9
91.3
68.4
18.7
60.5
175.4
97.3
24.9
12.3
40.9
192.6
95.9
57.7
16.9
22.0
102.4
70.6
17.6
-15.7
29.9
213.9
61.6
124.4
-3.0
30.7
19
20
By borrowing sector
State and local governments
288.5
6.8
121.4
16.6
38.5
105.2
226.2
21.5
88.4
6.8
40.2
69.2
362.2
34.0
188.0
4.3
76.6
59.3
557.5
27.4
239.5
.1
97.1
193.4
645.7
107.8
295.0
-13.6
92.8
163.7
619.6
59.4
282.1
-14.4
114.6
178.0
546.5
25.2
232.8
-.4
101.4
187.4
568.5
29.6
246.2
.5
92.7
199.5
530.8
56.8
253.6
-5.9
85.6
140.7
760.6
158.7
336.4
-21.3
99.9
186.8
494.7
35.7
222.4
-15.1
94.4
157.3
745.0
83.2
342.3
-13.7
134.7
198.6
23.5
5.4
3.0
3.9
11.1
16.0
6.7
-5.5
1.9
13.0
17.4
3.1
3.6
6.5
4.1
6.1
1.3
-6.6
6.2
5.3
1.7
4.0
-2.8
6.2
-5.7
9.7
3.2
-1.0
11.5
-4.0
35.5
1.1
-2.2
18.0
18.7
-23.3
1.5
-11.1
-5.6
-8.1
-4.1
5.5
-6.1
4.2
-7.8
7.5
2.6
.4
8.2
-3.6
24.3
7.1
1.4
20.6
-4.8
-5.0
-.8
-3.5
2.4
-3.1
399.3
403.4
566.2
762.4
871.0
843.6
763.3
761.5
728.4
1,013.5
730.3
957.6
1 Total net borrowing by domestic nonfinancial sectors
By sector and
instrument
2 U . S . government
3
Treasury securities
4
Agency issues and mortgages
22
23
24
Farm
Nonfarm noncorporate
Corporate
25 Foreign net borrowing in United States
26
Bonds
27
Bank loans n.e.c
28
Open market paper
29
U . S . government loans
30 Total domestic plus foreign
Financial sectors
31 Total net borrowing by financial sectors
By instrument
32 U.S. government related
33
Sponsored credit agency securities
34
Mortgage pool securities
37
38
39
40
41
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
42 Sponsored credit agencies
44 Private financial sectors
45
Commercial banks
47
48
49
Savings and loan associations
Finance companies
REITs
101.9
90.1
94.0
139.0
186.9
248.4
134.2
143.8
154.8
218.9
185.9
310.9
47.4
30.5
15.0
1.9
54.5
4.4
64.9
14.9
49.5
.4
25.2
12.5
.1
1.9
9.9
.8
67.8
1.4
66.4
74.9
30.4
44.4
80.0
31.8
48.2
92.9
25.3
67.6
64.4
17.3
.4
-.1
31.1
15.7
63.8
29.3
.4
1.4
17.0
15.7
61.9
35.3
-.1
21.3
-7.0
64.1
23.3
.4
.7
24.1
15.7
173.7
12.6
161.4
-.4
74.8
26.6
.1
4.0
24.2
19.8
69.8
29.1
40.7
26.2
12.1
101.5
20.6
79.9
1.1
85.3
36.5
.1
2.6
32.0
14.2
.9
13.9
11.7
110.2
15.9
92.1
2.2
108.8
37.7
.1
4.2
50.1
16.7
129.5
4.4
124.3
.8
56.4
25.5
.6
2.4
14.4
13.5
217.8
20.8
198.6
-1.5
93.1
27.7
-.4
5.6
34.1
26.2
1.4
66.4
26.2
5.0
12.1
-2.1
11.4
-.2
30.4
44.4
64.1
7.3
15.6
22.7
17.8
.8
21.7
79.9
85.3
-4.9
14.5
22.3
52.8
.5
12.2
161.4
74.8
-3.6
4.5
29.2
44.1
.6
29.1
40.7
64.4
15.4
23.7
20.2
4.3
.8
31.8
48.2
63.8
-.9
7.5
25.1
31.3
.8
25.3
67.6
61.9
-9.2
13.7
12.1
44.8
.5
18.1
92.1
108.8
-.6
15.3
32.6
60.9
.5
5.2
124.3
56.4
-6.7
1.7
23.1
37.5
.9
19.3
198.6
93.1
-.5
7.4
35.3
50.6
.3
*
1.2
32.7
16.2
32.4
15.0
54.5
11.6
9.2
15.5
18.5
-.2
15.3
49.5
25.2
11.7
6.8
2.5
4.3
*
*
*
All sectors
50 Total net borrowing
501.3
493.5
660.2
901.4
1057.8
1092.1
897.5
905.3
833.3
1,232.4
916.2
1268.5
51
52
53
U.S. government securities
State and local obligations
Corporate and foreign bonds
55
Consumer credit
57
58
Open market paper
Other loans
133.0
23.4
32.6
109.2
22.6
61.2
51.3
68.0
225.9
44.2
37.8
85.4
17.7
49.3
5.7
27.6
254.4
53.7
31.2
183.0
56.8
29.3
26.9
24.8
273.8
50.4
70.7
217.8
95.0
74.2
52.0
67.6
324.2
152.4
114.4
235.4
96.6
41.0
52.8
41.0
388.4
49.5
143.5
298.6
65.8
74.0
26.4
45.8
251.2
42.8
49.6
224.8
98.7
89.6
73.8
67.1
296.4
58.0
91.9
210.8
91.3
58.8
30.1
68.1
294.8
67.5
113.5
215.2
97.3
19.8
30.4
44.8
353.5
237.3
115.3
255.7
95.9
62.3
75.2
37.3
340.0
15.9
169.6
239.9
70.6
21.4
19.3
39.4
436.9
83.0
117.4
357.3
61.6
126.6
33.4
52.3
External corporate equity f u n d s raised in United States
50 Total new share issues
61
62
63
64
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States
-3.3
6.0
-9.3
-11.5
1.9
.3
33.6
16.8
16.8
11.4
4.0
1.5
67.0
32.1
34.9
28.3
2.7
3.9
-31.1
37.5
119.5
38.0
-69.1
-77.0
6.7
1.2
103.4
-65.9
-81.6
11.7
4.0
191.7
-72.1
-80.8
7.0
1.6
-40.1
-22.2
33.3
41.6
146.8
92.3
39.3
-79.4
-84.5
5.9
-.7
36.6
-58.8
-69.4
7.6
3.0
93.6
-60.4
-75.7
113.1
-71.5
-87.5
12.4
3.6
198.7
-52.0
-68.7
8.3
8.5
184.6
-92.3
-92.7
5.7
-5.3
11.0
4.3
Flow of Funds
1.58
A43
D I R E C T A N D I N D I R E C T S O U R C E S O F F U N D S TO CREDIT M A R K E T S
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates.
1984
Transaction category, or sector
1981
1982
1983
1984
1985
1986
1985
1986
HI
H2
HI
H2
HI
H2
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
375.8
387.4
548.8
756.3
869.3
834.0
727.8
784.8
732.6
1,006.1
706.0
962.5
By public agencies and foreign
? Total net advances
3
U.S. government securities
4
Residential mortgages
5
F H L B advances to savings and loans
6
Other loans and securities
115.4
104.4
17.1 • 22.7
23.5
61.0
16.2
.8
30.8
47.7
115.3
27.6
76.1
-7.0
18.6
154.6
36.0
56.5
15.7
46.5
203.3
47.2
94.6
14.2
47.3
311.1
87.8
158.5
19.8
45.0
132.5
26.8
52.7
15.7
37.5
176.6
45.2
60.2
15.7
55.5
201.8
53.1
85.6
11.7
51.4
204.9
41.3
103.7
16.7
43.2
267.6
85.4
121.0
13.5
47.7
354.5
90.1
196.0
26.2
42.3
7
8
9
10
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
24.0
48.2
9.2
23.0
15.9
65.5
9.8
24.1
9.7
69.8
10.9
24.9
17.4
73.3
8.4
55.5
17.8
101.5
21.6
62.4
10.9
176.6
30.2
93.4
9.0
74.0
8.8
40.7
25.7
72.5
8.0
70.4
28.8
98.2
23.7
51.0
6.7
104.9
19.5
73.8
12.9
135.3
9.8
109.7
9.0
217.9
50.6
77.1
11
12
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
47.4
23.5
64.9
16.0
67.8
17.4
74.9
6.1
101.5
1.7
173.7
9.7
69.8
35.5
80.0
-23.3
92.9
-4.1
110.2
7.5
129.5
24.3
217.8
-5.0
342.3
115.9
23.4
19.8
53.5
145.9
16.2
352.9
203.1
44.2
14.8
-5.3
96.9
.8
518.7
226.9
53.7
14.6
55.0
161.5
-7.0
682.7
237.8
50.4
32.6
98.5
279.1
15.7
769.2
277.0
152.4
41.2
84.8
228.1
14.2
706.2
300.6
49.5
79.0
73.7
223.2
19.8
700.5
224.4
42.8
25.6
109.9
313.6
15.7
664.9
251.2
58.0
39.6
87.0
244.7
15.7
619.6
241.7
67.5
49.7
72.0
200.4
11.7
918.8
312.2
237.3
32.7
97.5
255.9
16.7
592.1
254.5
15.9
104.2
65.9
165.0
13.5
820.9
346.8
83.0
53.9
81.4
281.9
26.2
320.2
106.5
26.2
93.5
94.0
261.9
110.2
21.8
86.2
43.7
391.9
144.3
135.6
97.8
14.1
550.5
168.9
149.2
124.0
108.3
554.4
186.3
83.4
141.0
143.6
647.9
194.8
105.3
137.2
210.5
581.8
184.2
173.5
144.5
79.5
519.1
153.5
124.9
103.5
137.2
471.3
133.8
63.0
121.8
152.7
637.4
238.8
103.9
160.1
134.5
572.4
106.9
101.4
128.6
235.6
724.0
283.0
109.3
145.9
185.8
320.2
214.5
54.5
261.9
195.2
25.2
391.9
212.2
26.2
550.5
317.6
64.1
554.4
204.8
85.3
647.9
242.3
74.8
581.8
300.2
64.4
519.1
334.9
63.8
471.3
203.0
61.9
637.4
206.6
108.8
572.4
224.5
56.4
724.0
260.3
93.1
51.2
-23.7
-1.1
89.6
-13.6
41.5
-31.4
6.1
92.5
-25.7
153.4
16.3
-5.3
110.6
31.8
168.8
5.4
4.0
112.5
46.8
264.2
17.7
10.3
107.0
129.2
330.8
12.4
1.7
120.0
196.6
217.2
3.0
-.1
146.5
67.8
120.4
7.8
8.2
78.5
25.9
206.5
11.2
14.4
97.4
83.5
322.0
24.3
6.1
116.6
175.0
291.5
.9
-5.5
104.5
191.5
370.5
24.0
9.0
135.5
202.1
76.6
37.1
11.1
-4.0
1.4
31.0
116.3
69.9
25.0
2.0
-1.3
20.6
153.0
95.5
39.0
-12.7
15.1
16.2
196.4
132.9
29.6
-3.4
8.9
28.3
300.2
150.9
59.2
13.2
51.8
25.1
133.1
81.0
17.8
12.3
1.4
20.6
183.1
142.2
25.0
-26.8
15.7
26.9
209.6
123.6
34.3
19.9
2.2
29.7
210.2
130.8
20.5
25.4
7.3
26.3
390.2
171.0
98.0
1.0
96.3
24.0
76.1
41.4
-21.8
49.3
-13.8
21.0
190.0
120.9
57.4
-24.7
16.7
19.8
39 Deposits and currency
40
Currency
41
Checkable deposits
4?
Samll time and savings accounts
43
Money market fund shares
44
Large time deposits
45
Security RPs
46
Deposits in foreign countries
222.4
9.5
18.5
47.3
107.5
36.0
5.2
-1.7
204.5
9.7
18.6
135.7
24.7
5.2
11.1
-.4
229.7
14.3
28.8
215.3
-44.1
-6.3
18.5
3.1
321.1
8.6
27.8
150.7
47.2
84.9
7.0
-5.1
215.1
12.4
42.0
137.5
-2.2
14.0
13.4
-2.1
262.7
14.4
99.4
123.1
20.8
-8.2
7.2
6.0
311.3
13.1
29.4
136.4
30.2
93.4
10.8
-2.0
330.9
4.1
26.3
164.9
64.2
76.5
3.1
-8.2
215.9
15.8
18.2
167.1
4.2
-.8
14.3
-2.9
214.3
9.0
65.8
108.0
-8.6
28.9
12.5
-1.3
241.6
10.9
83.1
119.5
29.0
.9
-7.9
6.2
284.0
17.9
115.9
126.7
12.7
-17.3
22.3
5.7
47 Total of credit market instruments, deposits and
currency
299.0
320.7
382.7
517.4
515.3
395.8
494.4
540.5
426.0
604.5
317.8
474.0
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
26.2
93.6
-.7
28.6
74.2
-7.3
20.4
75.5
41.3
20.3
80.6
60.9
23.3
72.1
80.1
36.9
91.7
105.8
17.4
83.1
43.7
23.2
78.1
78.2
27.7
76.1
62.2
20.2
69.4
98.1
36.6
96.7
110.5
37.0
88.2
101.1
MEMO: Corporate equities not included above
SI Total net issues
5?
Mutual fund shares
S3
Other equities
54 Acquisitions by financial institutions
55 Other net purchases
-3.3
6.0
-9.3
19.9
-23.2
33.6
16.8
16.8
27.6
6.0
67.0
32.1
34.9
46.8
20.2
-31.1
38.0
-69.1
8.2
-39.4
37.5
103.4
-65.9
33.3
4.1
119.5
191.7
-72.1
25.2
94.3
-40.1
39.3
-79.4
-4.1
-36.0
-22.2
36.6
-58.8
20.6
-42.7
33.3
93.6
-60.4
54.0
-20.7
41.6
113.1
-71.5
12.6
29.0
146.8
198.7
-52.0
35.4
111.4
92.3
184.6
-92.3
15.1
77.2
Private domestic funds
advanced
13 Total net advances
14
U.S. government securities
15
State and local obligations
16
Corporate and foreign bonds
17
Residential mortgages
18
Other mortgages and loans
19
LESS: Federal Home Loan Bank advances
Private financial
intermediation
?.<) Credit market funds advanced by private financial
Commercial banking
Savings institutions
Insurance and pension funds
Other finance
71
V
73
24
?">
76
27
Sources of funds
Private domestic deposits and RPs
Credit market borrowing
?8
79
30
31
32
33
34
35
36
37
38
Other sources
Foreign f u n d s
Treasury balances
Insurance and pension reserves
Other, net
Private domestic nonfinancial
investors
Direct lending in credit markets
U . S . government securities
State and local obligations
Corporate and foreign bonds
Open market paper
Other
48
49
50
N O T E S BY L I N E N U M B E R .
1.
2.
6.
11.
13.
18.
26.
27.
29.
30.
Line 1 of table 1.57.
Sum of lines 3 - 6 or 7-10.
Includes farm and commercial mortgages.
Credit market f u n d s raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33.
Also sum of lines 28 and 47 less lines 40 and 46.
Includes farm and commercial mortgages.
Line 39 less lines 40 and 46.
Excludes equity issues and investment company shares. Includes line 19.
Foreign deposits at commercial banks, bank borrowings f r o m foreign
branches, and liabilities of foreign banking agencies to foreign affiliates,
less claims on foreign affiliates and deposits by banking in foreign banks.
Demand deposits and note balances at commercial banks.
31. Excludes net investment of these reserves in corporate equities.
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 13 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 38 includes mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/line 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding may be obtained from Flow of Funds Section, Division of Research
and Statistics, Board of G o v e r n o r s of the Federal Reserve S y s t e m , Washington,
D.C. 20551.
A44
2.10
Domestic Nonfinancial Statistics • October 1987
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1986
Measure
1984
1985
1987
1986
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.'
May'
June'
July
1 Industrial production
121.4
123.8
125.1
126.0
126.7
126.5
127.2
127.3
127.4
128.3
128.8
129.8
Market
groupings
P r o d u c t s , total
Final, total
C o n s u m e r goods
Equipment
Intermediate
Materials
126.7
127.3
118.0
139.6
124.7
114.2
130.8
131.1
120.2
145.4
130.0
114.2
133.2
132.3
124.5
142.7
136.4
113.9
134.5
133.1
125.6
143.1
139.2
114.3
135.0
133.7
127.2
142.2
139.7
115.2
134.9
133.6
126.8
142.8
139.1
115.2
136.1
135.0
127.5
144.9
139.7
115.1
136.2
135.0
127.5
145.0
140.4
115.2
135.7
134.5
126.6
144.9
139.9
116.2
137.0
135.6
127.8
146.0
141.8
116.4
137.2
135.8
127.9
146.3
141.9
117.3
138.2
136.9
128.8
147.8
142.7
118.2
123.4
126.4
129.1
130.3
131.1
131.1
132.0
132.3
132.4
133.1
133.6
134.7
80.5
82.0
80.1
80.2
79.8
78.5
79.7
78.8
80.0
78.9
79.9'
78.8
80.3'
78.7
80.3''
78.7
80.2
79.2
80.4
79.3
80.5
79.8
81.0
80.3
2
3
4
5
6
7
Industry
groupings
8 Manufacturing
C a p a c i t y utilization ( p e r c e n t 9
Manufacturing
10
Industrial materials industries
1 1 C o n s t r u c t i o n c o n t r a c t s (1982 = 100)
1
135.0
148.0
155.0
156.0
155.0
155.0'
151.0'
165.0'
162.0
149.0
161.0
163.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural e m p l o y m e n t , total
G o o d s - p r o d u c i n g , total
M a n u f a c t u r i n g , total
Manufacturing, p r o d u c t i o n - w o r k e r . . . .
Service-producing
Personal i n c o m e , total
W a g e s and salary d i s b u r s e m e n t s
Manufacturing
Disposable personal i n c o m e
Retail sales 6
114.6
101.6
98.4
94.1
120.0
193.4
185.0
164.6
193.5
179.0
118.3
102.4
97.8
92.9
125.0
207.0
198.7
172.8
206.0
190.6
120.8
102.4
96.5
92.1
128.9
219.9
210.2
176.4
219.1
199.9
121.8
101.2
96.3
91.1
130.4
223.3
214.5
177.4
221.8
200.9
121.9
101.2
96.4
91.3
130.6
224.8
214.8
177.7
222.7
211.8
122.4
101.5
96.3
91.1
131.1
225.9
216.3
178.5
224.3
196.8
122.7
101.6
96.4
91.4
131.5
228.4
218.0
179.1
227.5
206.3
122.9
101.7
96.5
91.4
131.8
229.1
218.6
179.2
228.1
206.8
123.2
101.7
96.6
91.5
132.2
230.2
219.5
178.9
222.6
207.4
123.3
101.7
96.6
91.6
132.4
231.0
220.7
179.9
229.9
207.3
123.5
101.8
91.7
132.5
231.6
221.3
180.1
229.4
210.2
123.8
102.1
97.0
92.1
132.9
232.5
221.9
180.0
230.3
211.8
22
23
Prices 7
C o n s u m e r (1967 = 100)
P r o d u c e r finished goods (1967 = 100) . . .
311.1
291.1
322.2
293.7
328.4
289.6
330.8
290.7
331.1
290.4
333.1
291.8
334.4
292.3
335.9
292.3
337.7
295.0
338.7
296.3
340.1
296.8
340.8
297.8
4
1. A m a j o r revision of the industrial production index and the capacity
utilization rates w a s released in July 1985. See " A Revision of the Index of
Industrial P r o d u c t i o n " and a c c o m p a n y i n g tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1 9 8 4 i n t h e F E D E R A L RESERVE B U L L E T I N , v o l . 7 1
(July 1985), pp. 487-501. T h e revised i n d e x e s for January through June 1985 were
s h o w n in the S e p t e m b e r BULLETIN.
2. Ratios of i n d e x e s of p r o d u c t i o n to indexes of capacity. Based on data f r o m
Federal R e s e r v e , McGraw-Hill E c o n o m i c s D e p a r t m e n t , D e p a r t m e n t of C o m m e r c e , and o t h e r s o u r c e s .
3. Index of dollar value of total c o n s t r u c t i o n c o n t r a c t s , including residential,
nonresidential and heavy engineering, f r o m McGraw-Hill Information S y s t e m s
C o m p a n y , F. W. Dodge Division.
4. Based on d a t a in Employment
and Earnings ( U . S . D e p a r t m e n t of Labor).
Series c o v e r s e m p l o y e e s only, excluding personnel in the A r m e d F o r c e s .
96.7
5. Based on data in Survey of Current Business ( U . S . D e p a r t m e n t of C o m merce).
6. Based on Bureau of C e n s u s d a t a published in Survey of Current
Business.
7. Data without seasonal a d j u s t m e n t , as published in Monthly Labor
Review.
Seasonally a d j u s t e d d a t a for c h a n g e s in the price indexes m a y be obtained f r o m
the Bureau of L a b o r Statistics, U . S . D e p a r t m e n t of L a b o r .
NOTE. Basic d a t a (not index n u m b e r s ) for series mentioned in n o t e s 4, 5,and 6,
and indexes for series mentioned in notes 3 and 7 may also b e f o u n d in the Survey
of Current
Business.
Figures for industrial production f o r the last t w o m o n t h s are preliminary a n d
estimated, respectively.
Selected Measures
2.11
A45
LABOR FORCE, EMPLOYMENT, A N D U N E M P L O Y M E N T
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1986
Category
1984
1985
1987
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
HOUSEHOLD SURVEY DATA
1 Noninstitutional population 1
178,602
180,440
182,822
183,815
184,092
184,259
184,436
184,597
184,777
184,941
185,127
2 Labor force (including Armed Forces) 1
3
Civilian labor force
Employment
4
Nonagricultural industries
Agriculture
Unemployment
6
Number
7
Rate (percent of civilian labor f o r c e ) . . . .
8 Not in labor force
115,763
113,544
117,695
115,461
120,078
117,834
120,854
118,586
121,299
119,034
121,610
119,349
121,479
119,222
121,588
119,335
122,237
119,993
121,755
119,517
122,194
119,952
101,685
3,321
103,971
3,179
106,434
3,163
107,476
3,161
107,866
3,145
108,146
3,236
108,084
3,284
108,545
3,290
109,112
3,335
109,079
3,178
109,508
3,219
8,539
7.5
62,839
8,312
7.2
62,745
8,237
7.0
62,744
7,949
6.7
62,961
8,023
6.7
62,793
7,967
6.7
62,649
7,854
6.6
62,957
7,500
6.3
63,009
7,546
6.3
62,540
7,260
6.1
63,186
7,224
6.0
62,933
9 Nonagricultural payroll employment 3
94,496
97,519
99,610
100,567
100,919
101,150
101,329
101,598
101,708''
101,811'
102,115
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
19,378
966
4,383
5,159
22,100
5,689
20,797
16,023
19,260
927
4,673
5,238
23,073
5,955
22,000
16,394
18,994
783
4,904
5,244
23,580
6,297
23,099
16,710
18,970
724
4,936
5,286
23,732
6,451
23,544
16,924
18,956
718
5,034
5,304
23,821
6,480
23,670
16,936
18,986
719
5,038
5,315
23,897
6,501
23,759
16,935
18,995
722
5,032
5,333
23,902
6,526
23,842
16,977
19,011
729
5,019
5,348
23,969
6,558
23,926
17,038
19,018'
735
4,999'
5,344'
23,980'
6,576
24,025'
17,031'
19,028'
737'
5,010'
5,351'
23,997'
6,595'
24,051'
17,042
19,098
742
5,009
5,344
24,068
6,614
24,133
17,107
ESTABLISHMENT SURVEY DATA
10
11
12
13
14
15
16
17
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 from 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 w h o worked during, or
received pay for, the pay period that includes the 12th day of the m o n t h , and
exclude proprietors, self-employed persons, domestic servants, unpaid family
workers, and members of the Armed Forces. Data are adjusted to the March 1984
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).
A46
2.12
Domestic Nonfinancial Statistics • October 1987
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION
Seasonally adjusted
1987
1986
1986
1986
1987
1987
Series
Q4
Q3
Ql
Q2
Q3
Q4
Ql
Q2
Q3
Capacity (percent of 1977 output)
Output (1977 = 100)
Q4
Ql
Q2'
Utilization rate (percent)
1 Total industry
125.0
126.0
127.0
127.8
157.9
158.8
159.6
160.5
79.1
79.3
79.6
79.8
2 Mining
3 Utilities
96.6
108.8
96.6
110.4
96.6
109.5
97.1
110.5
131.9
137.5
131.7
138.1
131.3
138.7
130.7
139.3
73.2
79.1
73.3
79.9
73.6
79.0
74.7
80.0
4 Manufacturing
129.4
130.4
131.8
132.6
162.4
163.4
164.4
165.5
79.7
79.8
80.2
80.4
5 Primary processing
6 A d v a n c e d processing
112.1
139.7
114.0
140.4
115.1
141.8
116.5
142.4
134.6
179.1
135.1
180.4
135.9
181.7
136.5
183.0
83.3
78.0
84.3
77.8
84.8
78.1
85.4
78.2
7 Materials
8 Durable goods
9
Metal materials
10 N o n d u r a b l e goods
11
Textile, paper, and chemical . . .
P
13
14 Energy materials
Previous cycle 1
High
Low
113.4
114.3
115.1
116.5
145.3
145.8
146.3
146.8
78.1
78.4
78.7
79.4
118.8
73.1
119.7
120.4
135.1
117.7
120.1
75.7
121.1
122.4
136.0
120.1
121.2
75.5
122.8
124.2
136.4
122.5
122.1
77.1
125.7
127.2
161.5
114.0
139.9
139.2
138.9
144.7
162.2
113.4
140.4
139.6
139.7
145.0
163.0
112.7
141.0
140.4
140.8
145.6
163.6
111.7
142.0
141.4
73.6
64.2
85.6
86.5
97.3
81.4
74.0
66.7
86.4
87.6
97.3
82.8
74.4
67.0
87.1
88.5
96.9
84.1
74.7
69.1
88.3
89.5
96.2
85.0
98.6
98.2
97.8
98.7
121.4
121.6
121.6
121.5
81.2
80.7
80.5
81.7
Latest cycle 2
High
Low
1986
July
1986
Nov.
1987
Dec.
Jan.
Feb.
Mar.
Apr/
May'"
June
July
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
79.2
79.4
79.6
79.4
79.7
79.6
79.5
79.9
80.1
80.5
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
73.5
79.9
73.9
80.5
73.8
79.5
73.9
79.1
73.3
79.0
73.6
78.9
74.2
78.4
74.6
80.8
75.4
80.8
76.3
81.1
18 M a n u f a c t u r i n g
87.7
69.9
86.5
68.0
79.7
79.8
80.0
79.9
80.3
80.3
80.2
80.4
80.5
81.0
19 Primary p r o c e s s i n g . . . .
20 A d v a n c e d p r o c e s s i n g . .
91.9
86.0
68.3
71.1
89.1
85.1
65.1
69.5
82.9
78.4
84.4
77.7
85.0
77.9
84.8
77.8
84.7
78.3
84.8
78.1
85.3
77.9
85.4
78.3
85.5
78.3
86.4
78.7
21 Materials
92.0
70.5
89.1
68.4
78.3
78.4
78.9
78.8
78.7
78.7
79.2
79.3
79.8
80.3
22 Durable goods
23
Metal materials
91.8
99.2
64.4
67.1
89.8
93.6
60.9
45.7
73.7
63.8
74.2
68.4
74.3
66.5
74.0
65.9
74.6
67.3
74.7
68.0
74.8
68.5
74.4
68.8
74.9
70.0
75.7
73.7
24 N o n d u r a b l e goods . . . .
91.1
66.7
88.1
70.6
85.0
85.7
87.7
87.5
86.8
86.8
88.5
88.1
88.3
88.5
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.6
79.9
63.3
85.6
97.8
80.2
86.7
96.0
81.7
89.2
100.2
84.3
89.3
98.3
84.9
88.1
97.1
83.7
88.1
95.4
83.7
89.9
95.8
85.2
89.3
96.4
85.2
89.4
96.5
84.5
89.8
">6
">7
28 Energy materials
94.6
86.9
94.0
82.2
82.3
81.2
81.2
81.3
80.3
79.8
80.3
82.0
82.8
83.1
25
Textile, paper, and
chemical
1. Monthly high 1973; monthly low 1975.
2. Monthly highs 1978 through 1980; monthly lows 1982.
NOTE. These data also appear in the B o a r d ' s G . 3 (402) release. F o r a d d r e s s , see
inside front cover.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
Indexes and Gross Value
A47
•
Monthly data are seasonally adjusted
portion
1987
1986
1977
Groups
1986
avg.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.'
May
June''
July''
Index(1977 = 100)
MAJOR MARKET
1
Total index
? Products
Final products
Consumer goods
4
5
Equipment
6
Intermediate products
7 Materials
100.00
125.0
124.9
125.1
124.9
125.3
126.0
126.7
126.5
127.2
127.3
127.4
128.3
128.8
129.8
136.1
135.0
127.5
144.9
139.7
115.1
136.2
135.0
127.5
145.0
140.4
115.2
135.7
134.5
126.6
144.9
139.9
116.2
137.0
135.6
127.8
146.0
141.8
116.4
137.2
135.8
127.9
146.3
141.9
117.3
138.2
136.9
128.8
147.8
142.7
118.2
119.2
114.7
107.7
87.9
119.9
117.2
111.5
86.1
125.2
122.6
143.6
144.2
133.4
101.4
125.7
122.0
140.3
132.0
138.4
57.72
44.77
25.52
19.25
12.94
42.28
133.2
132.3
124.5
142.7
136.4
113.9
133.2
132.0
125.2
141.0
137.3
113.6
133.8
132.6
125.1
142.5
137.8
113.2
133.3
132.2
124.2
142.8
137.0
113.5
134.0
132.7
124.7
143.3
138.7
113.3
134.5
133.1
125.6
143.1
139.2
114.3
135.0
133.7
127.2
142.2
139.7
115.2
134.9
133.6
126.8
142.8
139.1
115.2
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
116.2
115.1
112.9
97.3
141.8
118.4
117.1
139.5
141.6
125.8
96.0
116.3
116.4
114.5
95.3
150.3
119.1
116.3
138.9
141.6
126.6
94.1
115.7
114.5
110.4
87.8
152.4
120.7
116.7
139.4
142.5
125.8
95.1
117.4
117.0
116.8
96.2
155.1
117.3
117.7
141.2
143.5
126.2
96.0
116.3
112.7
107.7
91.9
137.1
120.1
119.0
142.6
144.3
128.8
96.5
118.4
114.6
107.6
92.3
136.0
125.2
121.2
148.1
150.0
131.1
96.3
121.5
117.7
115.6
99.5
145.6
120.8
124.4
153.2
155.1
132.0
99.4
120.0
117.6
117.9
94.3
161.9
117.1
121.9
146.9
148.9
129.1
99.8
122.4
123.5
125.2
105.3
162.1
121.0
121.6
145.2
146.7
130.8
99.3
121.2
121.2
121.6
100.9
159.9
120.5
121.2
142.9
143.8
131.3
99.8
118.1
115.7
111.5
91.8
148.1
121.9
119.9
137.7
139.2
133.5
99.4
120.1
117.7
113.1
91.0
154.2
124.6
121.8
142.2
142.3
133.3
100.7
19 Nondurable c o n s u m e r goods
?() C o n s u m e r staples
C o n s u m e r foods and tobacco
71
Nonfood staples
7?
C o n s u m e r chemical products
73
74
Consumer paper products
?5
Consumer energy
Consumer fuel
76
27
Residential utilities
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
127.5
97.0
134.1
131.9
136.5
161.2
147.4
105.7
92.8
128.4
135.3
132.2
138.5
166.4
146.4
106.6
91.2
122.3
128.6
135.5
133.2
137.9
163.4
147.7
107.1
94.9
119.6
126.7
133.6
131.0
136.3
161.1
145.7
106.3
92.0
120.9
127.8
134.4
131.6
137.2
161.7
150.3
105.2
90.8
119.8
128.3
135.0
132.6
137.4
161.0
151.5
105.5
91.7
119.6
129.4
136.0
133.9
138.2
163.1
150.1
106.4
92.2
120.8
129.2
135.9
132.9
139.0
165.9
149.4
106.3
95.0
117.8
129.4
135.9
134.0
137.9
164.7
147.8
105.7
92.5
119.2
129.8
136.5
134.8
138.2
165.7
147.5
105.8
94.1
117.7
129.8
136.4
134.4
138.5
164.7
148.9
106.5
94.5
118.7
130.7
137.2
135.0
139.6
165.4
152.4
106.4
92.1
121.0
131.1
137.6
135.2
140.0
165.4
153.4
106.8
92.3
Equipment
78 Business and defense equipment
79
Business equipment
10
Construction, mining, and farm
31
Manufacturing
37
Power
33
Commercial
34
Transit
35
Defense and space equipment
18.01
14.34
2.08
3.27
1.27
5.22
2.49
3.67
147.1
138.6
59.8
112.0
81.6
214.6
109.2
180.3
146.4
137.9
60.6
112.6
81.7
214.5
103.9
179.5
147.8
139.3
58.3
113.3
81.7
217.5
106.9
181.0
148.0
139.3
58.1
113.0
80.3
215.1
113.3
182.0
148.4
139.1
58.0
112.7
80.5
215.4
111.8
184.6
148.1
138.6
56.6
109.6
79.5
217.3
110.7
184.9
147.0
137.1
58.2
108.8
80.2
213.7
108.9
185.8
147.7
138.1
57.2
110.1
79.6
215.9
109.5
185.2
150.1
140.8
56.8
111.5
81.2
218.4
117.4
186.5
150.1
140.8
58.1
110.9
81.7
219.7
114.0
186.6
150.0
140.8
58.6
82.4
220.9
110.4
186.1
151.0
141.9
61.7
111.5
84.0
222.0
186.5
151.3
142.5
63.0
113.1
82.7
223.8
107.7
185.9
5.95
6.99
5.67
1.31
124.7
146.4
150.6
128.3
124.0
148.6
153.3
128.3
125.4
148.4
152.5
130.6
125.9
146.4
151.2
125.8
126.3
149.3
154.1
128.8
126.8
149.7
153.7
132.4
127.9
149.8
154.3
130.3
128.3
148.3
153.3
126.8
128.4
149.4
154.1
128.8
128.5
150.5
155.2
130.3
127.3
150.5
155.5
129.0
128.3
153.4
157.6
135.0
127.6
154.1
159.3
131.6
128.3
20.50
4.92
5.94
9.64
4.64
119.7
98.5
153.9
109.4
80.0
118.8
96.7
154.3
108.2
77.4
118.8
95.2
155.6
108.1
76.9
118.9
95.3
154.8
108.8
78.4
119.2
97.0
153.5
109.4
78.8
120.4
98.0
154.5
110.7
82.1
120.7
98.8
154.2
111.2
80.3
120.5
99.0
154.0
110.8
79.2
121.5
100.0
155.6
111.5
80.3
121.8
98.9
155.8
112.6
80.8
122.2
96.2
157.1
114.1
81.8
121.8
95.4
156.1
114.1
81.8
122.7
96.2
157.2
115.0
83.4
124.1
95.1
159.3
117.3
45 Nondurable goods materials
46
Textile, paper, and chemical
materials
47
Textile materials
48
Pulp and paper materials
49
Chemical materials
50
Miscellaneous nondurable materials . . .
10.09
118.3
118.9
119.7
120.6
120.3
120.2
123.2
123.2
122.5
122.8
125.4
125.1
125.6
126.2
7.53
1.52
1.55
4.46
2.57
118.9
110.6
132.1
117.1
116.5
119.0
111.2
135.6
115.9
118.3
120.5
113.4
136.0
117.5
117.2
121.8
116.0
133.7
119.7
117.1
121.3
114.3
133.5
119.5
117.5
121.0
115.6
134.2
118.5
117.6
124.7
116.1
140.2
122.3
118.5
125.0
116.5
137.9
123.4
118.0
123.6
115.8
136.7
121.8
119.0
124.0
118.5
134.7
122.1
119.2
126.9
126.2
126.7
127.5
135.8
124.4
121.1
137.1
124.7
122.0
137.6
123.8
51 Energy materials
52
Primary energy
Converted fuel materials
53
11.69
7.57
4.12
99.9
105.5
89.6
99.9
104.8
90.9
97.9
103.7
87.3
98.0
103.8
87.4
96.9
102.7
86.2
98.7
104.8
87.6
98.8
105.1
87.3
98.9
104.1
89.4
97.6
102.6
88.5
97.0
101.5
88.9
97.5
102.3
88.7
99.6
103.1
93.0
100.6
104.1
94.1
Consumer
goods
8 Durable consumer goods
9
Automotive products
10
Autos and trucks
Autos, consumer
11
Trucks, consumer
1?
Auto parts and allied goods
N
14
Home goods
Appliances, A/C and TV
15
Appliances and TV
16
17
Carpeting and furniture
Miscellaneous home goods
18
Intermediate
products
36 Construction supplies
37 Business supplies
38
General business supplies
Commercial energy products
39
Materials
40 Durable goods materials
Durable c o n s u m e r parts
41
Equipment parts
42
43
Durable materials n.e.c
44
Basic metal materials
111.1
111.0
140.9
165.4
152.4
143.7
114.3
83.4
226.0
107.6
186.3
100.9
A48
2.13
Domestic Nonfinancial Statistics • October 1987
INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued
Groups
SIC
code
1977
proportion
1987
1986
1986
avg.
July
Aug.
Sept.
Oct.
Nov.
Dec
Jan.
Feb.
Mar.
Apr.'
May
June''
July'
Index (1977 = 100)
M A J O R INDUSTRY
15.79
9.83
5.96
84.21
35.11
49.10
103.4
99.6
109.6
129.1
130.9
127.9
101.8
97.1
109.7
129.2
131.7
127.4
100.9
96.4
108.3
129.5
132.2
127.5
100.8
96.2
108.3
129.5
131.4
128.1
100.7
95.6
109.3
129.9
132.3
128.1
102.6
97.4
111.2
130.3
132.7
128.6
101.9
96.7
110.6
131.1
133.7
129.2
101.9
97.2
109.5
131.1
134.1
129.0
101.3
96.2
109.6
132.0
134.3
130.4
101.4
96.5
109.5
132.3
134.8
130.5
101.5
97.0
109.0
132.4
135.8
130.0
103.2
97.5
112.6
133.1
136.6
130.6
103.8
98.4
112.7
133.6
137.2
130.9
104.6
99.4
113.3
134.7
138.4
132.0
10
11.12
13
14
.50
1.60
7.07
.66
124.2
94.7
113.9
69.2
120.2
92.4
111.8
70.9
122.2
90.7
114.8
70.7
120.8
91.0
111.7
68.5
117.6
90.5
116.4
68.3
130.1
90.4
115.2
73.5
124.3
90.9
109.6
72.1
133.5
89.9
107.1
72.0
127.7
89.5
110.0
71.6
121.8
91.0
113.1
66.7
121.6
92.0
114.4
71 7
126.6
91.2
113.7
130.1
91.6
113.8
132.1
92.3
135.7
98.7
118.4
107.4
140.5
136.1
100.7
119.3
107.1
139.2
136.1
99.4
122.9
106.6
139.9
137.1
99 0
122.5
108.1
140.9
137.5
1 Mining and utilities
2
Mining
3
Utilities
4 Manufacturing
5
Nondurable
6
Durable
7
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
11
12
13
14
15
Nondurable
manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
7.96
.62
2.29
2.79
3.15
133.6
96.6
113.2
103.6
136.4
134.3
97.9
113.4
102.5
138.1
135.1
97.1
114.7
102.5
138.6
134.3
89.8
116.0
102.7
136.9
133.7
100.1
116.1
104.2
137.8
134.4
96.8
117.8
105.1
139.5
135.3
92.9
118.4
141.6
135.3
89.1
118.0
107.2
139.8
16
17
18
19
20
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic p r o d u c t s . . . .
Leather and products
27
28
29
30
31
4.54
8.05
2.40
2.80
.53
163.4
133.0
92.1
153.3
61.3
165.4
134.1
90.6
155.5
61.9
164.6
134.4
94.0
155.5
62.0
163.0
133.9
93.3
154.9
59.4
167.8
133.9
91.1
157.6
60.2
168.5
132.3
92.0
159.0
61.3
167.7
134.6
92.5
160.7
59.4
168.1
137.4
94.7
158.1
58.3
166.7
137.7
91.9
159.2
59.6
168.2
138.3
91.4
161.3
59.1
171.4
138.2
94.0
163.8
59.3
174.0
138.0
92.6
166.0
61.2
174.8
138.5
91.6
168.2
59.8
24
25
32
2.30
1.27
2.72
123.4
146.7
120.2
120.8
149.5
119.6
122.5
148.3
119.7
125.0
147.7
121.6
125.9
149.2
118.1
129.5
148.6
120.6
133.1
150.5
121.7
130.2
148.7
122.8
130.0
151.8
121.5
129.5
153.4
122.7
128.9
155.9
122.9
131.0
156.2
121.4
129.6
159.9
120.1
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
75.8
63.4
107.4
141.9
166.5
73.6
61.7
105.7
142.6
166.8
73.4
60.8
105.9
142.6
167.2
74.1
61.1
107.3
140.9
166.9
74.2
62.2
108.3
142.2
167.7
76.8
64.8
107.1
141.2
168.3
73.5
60.5
108.3
139.9
170.2
73.6
60.2
108.0
140.3
169.2
76.3
63.1
108.2
142.3
169.3
77.5
65.1
108.8
143.7
167.6
76.8
65.0
108.6
145.2
166.5
77.5
65.7
107.9
146.3
168.6
77.8
66.5
109.1
148.0
169.3
109.2
149.7
169.5
37
371
9.13
5.25
125.8
110.9
125.6
111.2
125.1
108.2
127.7
112.2
125.2
107.1
125.6
107.9
127.0
111.2
128.1
112.2
131.8
117.8
130.6
115.5
127.1
109.3
127.7
110.1
125.3
106.7
126.2
107.8
72-6.9
38
39
3.87
2.66
1.46
146.1
141.3
99.3
145.2
141.7
97.5
148.0
142.0
98.3
148.7
141.7
97.7
149.7
140.3
99.0
149.6
141.1
98.9
148.4
142.4
103.1
149.6
142.5
101.8
150.7
143.3
101.1
151.2
142.0
101.4
151.3
144.1
100.0
151.5
143.5
101.5
150.4
144.7
104.0
151.2
145.0
4.17
122.2
125.4
122.4
122.8
123.8
125.1
123.5
121.7
122.3
123.3
123.4
127.5
126.8
Durable
manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, stone products
24
25
26
27
28
Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery
29 Transportation equipment
30
Motor vehicles and parts
31
Aerospace and miscellaneous
transportation equipment
32 Instruments
33 Miscellaneous m a n u f a c t u r e s . . .
Utilities
34 Electric
124.1
141.6
175.6
92.0
80.7
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKET
35 Products, total
517.5
1,702.2 1,669.9 1,681.3 1,677.8 1,683.9 1,690.8 1,701.9 1,707.1 1,721.4 1,724.3 1,713.3 1,726.5 1,716.6 1,722.3
36 Final
37
Consumer goods.
38
Equipment
39 Intermediate
405.7
272.7
133.0
111.9
1,314.5 1,282.7 1,292.6 1,292.3 1,292.5 1,297.6 1,306.7 1,315.1 1,331.9 1,330.5 1,320.1 1,327.0 1,320.0 1,323.0
859.2
864.7
853.8 842.4 846.9 839.8 839.3 847.2 860.5 865.5
869.7
870.0 863.0 865.4
458.2 440.4 445.7 452.5 453.2 450.4 446.2
449.6 462.2
460.4 457.1 461.6 460.8
458.3
391.4
393.2 395.3 391.9
389.5
393.9 393.3 399.5
396.6
399.3
387.6 387.1 388.7 385.5
A A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See " A Revision of the Index of
Industrial P r o d u c t i o n " and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1 9 8 4 in t h e F E D E R A L RESERVE B U L L E T I N , v o l . 7 1
(July 1985). pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
NOTE. These data also appear in the Board's G.12.3 (414) release. For address,
see inside front cover.
Selected Measures
2.14
A49
HOUSING A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1987
1986
1984
Item
1985
1986
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May'
June
Private residential real estate activity (thousands of units)
NEW
UNITS
1
Permits authorized
? 1-family
2-or-more-family
3
1,682
922
759
1,733
957
777
1,750
1,071
679
1,687
1,071
616
1,664
1,036
628
1,667
1,028
639
1,862
1,184
678
1,652
1,085
567
1,676
1,204
472
1,719
1,150
569
1,598
1,058
540
1,493
1,009
484
1,517
1,039
478
4 Started
5
1-family
2-or-more-family
6
1,749
1,084
665
1,742
1,072
669
1,805
1,179
626
1,689
1,123
566
1,657
1,114
543
1,637
1,129
508
1,813
1,233
580
1,816
1,253
563
1,838
1,303
535
1,730
1,211
519
1,643
1,208
435
1,606
1,130
476
1,597
1,096
501
7 Under construction, end of period 1
8
1-family
2-or-more-family
9
1,051
556
494
1,063
539
524
1,074
583
490
1,154
627
527
1,142
625
518
1,125
619
506
1,104
610
494
1,089
609
480
1,096
621
476
1,085
618
467
1,070
623
446
1,063
621
442
1,067
625
443
1,652
1,025
627
1,703
1,072
631
1,756
1,120
637
1,740
1,113
627
1,745
1,165
580
1,774
1,158
616
1,894
1,184
710
1,956
1,217
739
1,726
1,107
619
1,689
1,141
548
1,830
1,148
682
1,615
1,156
459
1,572
1,078
494
296
284
244
243
241
237
251
242
231
228
227
222
231
639
358
688
350
748
361
744
355
675
357
691
353
768
357
712
358
740
358
12V
358 r
733
359
636
356
658
360
80.0
84.3
92.2
95.0
96.4
94.0
95.0
98.5
95.2
98.4R
97.4
106.0
110.0
97.5
101.0
112.2
114.0
114.9
113.6
118.9
122.1
121.3
119.5
118.6
128.6
139.7
2,868
3,217
3,566
3,710
3,760
3,850
4,060
3,480
3,690
3,680
3,560
3,770
3,500
72.3
85.9
75.4
90.6
80.3
98.3
80.3
98.2
79.4
97.3
80.4
99.1
80.8
100.6
82.1
100.1
85.0
104.3
85.6
104.9
85.0
105.0
85.2
106.3
85.2
106.0
10 Completed
1-family
11
2-or-more-family
12
13 Mobile homes shipped
Merchant builder activity in 1-family
14 Number sold
15 Number for sale, end of period
Price (thousands
Median
Units sold
16
17
of
units
dollars)2
Units sold
EXISTING UNITS (1-family)
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
328,643 355,995 388,815 400,115 394,871 390,646 380,175 384,716 401,644 388,303 397,136 394,303 390,084
22 Private
23
Residential
24
Nonresidential, total
Buildings
25
Industrial
26
Commercial
27
Other
28
Public utilities and other
270,978 291,665 316,589 324,886 322,929 320,417 306,826 310,170 326,453 312,203 320,841 319,665 317,877
153,849 158,475 187,147 198,786 192,592 194,463 181,682 187,813 203,115 190,812 199,523 193,089 195,457
117,129 133,190 129,442 126,100 130,337 125,954 125,144 122,357 123,338 121,391 121,318 126,576 122,420
29 Public
30
Military
31
Highway
32
Conservation and development
33
Other
13,746
39,357
12,547
51,479
15,769
51,315
12,619
53,487
13,747
48,592
13,216
53,887
13,015
55,235
13,026
44,824
14,634
56,121
13,820
45,762
13,404
54,193
13,787
44,570
13,207
54,809
14,231
42,897
12,094
50,881
14,755
44,627
12,112
53,071
14,776
43,379
11,354
52,285
15,143
42,609
11,504
50,920
14,989
43,905
13,362
53,039
14,981
45,194
12,360
50,476
14,880
44,704
57,662
2,839
18,772
4,654
31,397
64,326
3,283
21,756
4,746
34,541
72,225
3,919
23,360
4,668
40,278
75,229
5,076
22,609
4,741
42,803
71,942
3,566
22,643
4,726
41,007
70,229
4,007
19,958
4,647
41,617
73,348
4,313
21,935
4,954
42,146
74,546
4,100
23,508
5,155
41,783
75,191
2,806
23,260
4,883
44,242
76,100
3,893
23,575
4,792
43,840
76,295
3,749
22,703
5,649
44,194
74,638
4,129
22,541
4,800
43,168
72,207
4,141
21,254
5,490
41,322
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 (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices
of existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 16,000 jurisdictions
beginning with 1978.
A50
2.15
Domestic Nonfinancial Statistics • October 1987
CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Item
1986
1986
July
1987
1987
July
Sept.
Change from 1 month earlier
Dec.
Mar/
Index
level
July
1987
(1967
= 100) 1
1987
June r
Mar.
Apr.
May
June
July
CONSUMER PRICES2
1 All items
2 Food
3 Energy items
4 All items less food and energy
5
Commodities
6
Services
1.6
3.9
2.0
2.5
6.2
4.6
.4
.4
.3
.4
.2
340.8
3.4
-16.2
4.1
1.5
5.6
4.2
4.3
4.0
2.9
4.6
8.4
-21.0
3.7
2.6
4.3
4.1
-9.9
3.7
1.4
5.1
2.5
26.1
5.2
5.1
5.3
6.5
7.9
4.0
3.8
3.8
-.1
1.0
.5
.7
.4
.3
.3
.5
.6
.4
.5
.2
.3
.3
.3
.7
1.5
.2
.0
.2
-.2
.1
.3
.3
.4
333.6
382.4
339.9
269.6
416.0
-2.4
3.4
-37.1
2.3
1.9
3.5
2.6
14.3
2.7
1.9
-.4
11.2
-42.7
2.3
2.0
1.8
1.0
-12.5
4.4
3.4
4.3
-6.7
59.8
4.2
.4
4.7
14.3
10.9
-.3
1.4
,5r
.1
1.8 r
.8'
.1
,6 r
1.5
1.7 r
.C
,2r
.3
1.4
.0
-.2
.1
.2
.5
.9
.1
.0
.2
-.6
1.5
.3
.1
297.8
287.6
527.5
265.7
312.1
-4.5
-.5
4.0
3.0
-1.5
1.5
-1.2
1.2
7.8
3.3
5.2
4.5
.3 r
.2
.3
.2
.4
.4
.6
.5
.8
.5
322.8
313.2
1.2
-29.7
1.1
3.7
19.0
10.6
18.1
-19.6
-24.1
-2.7
-.5
8.5
-10.3
50.0
15.9
34.0
15.8
33.7
,4 r
1.0 r
-.3'
4.1 r
,lr
.8 r
4.8
2.7
2.4
-1.4
.9
4.2
-2.0
2.8
2.9
243.1
629.5
276.4
PRODUCER PRICES
7 Finished goods
8
Consumer foods
9
Consumer energy
10
Other consumer goods
11
Capital equipment
12 Intermediate materials 3
13
Excluding energy
14
15
16
Crude materials
Foods
Energy
Other
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers and reflect a
rental equivalence measure of homeownership after 1982.
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected Measures
2.16
A51
GROSS NATIONAL PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1987
1986
1984
Account
GROSS NATIONAL
1985
1986
Q3
Q4
Ql
Q2'
Q3
PRODUCT
1 Total
3,772.2
4,010.3
4,235.0
4,211.6
4,265.9
4,288.1
4,377.7
4,447.7
By source
7 Personal consumption expenditures
3
Durable goods
4
Nondurable goods
5
Services
2,430.5
335.5
867.3
1,227.6
2,629.4
368.7
913.1
1,347.5
2,799.8
402.4
939.4
1,458.0
2,765.8
386.4
934.3
1,445.1
2,837.1
427.6
940.0
1,469.5
2.858.6
419.8
946.3
1,492.4
2,893.8
396.1
969.9
1,527.7
2,947.3
407.5
982.3
1,557.5
664.8
597.1
416.0
141.1
274.9
181.1
641.6
631.6
442.6
152.5
290.1
189.0
671.0
655.2
436.9
137.4
299.5
218.3
679.4
651.9
433.8
135.9
297.9
218.1
660.8
657.3
433.5
131.1
302.4
223.8
660.2
666.6
439.7
132.9
306.7
226.9
699.9
648.2
422.8
128.7
294.1
225.4
700.9
660.4
432.3
130.0
302.3
228.1
67.7
60.5
10.0
13.6
15.7
16.8
27.5
24.5
3.5
-.9
-6.4
5.1
51.6
48.7
40.4
27.4
-58.9
383.5
442.4
-79.2
369.9
449.2
-105.5
376.2
481.7
-100.8
371.3
472.1
-110.5
376.6
487.1
-116.9
383.3
500.2
-112.2
397.3
509.5
-118.6
411.0
529.7
735.9
310.5
425.3
818.6
353.9
464.7
869.7
366.2
503.5
867.2
368.4
498.8
878.5
371.2
507.3
886.3
368.6
517.7
896.2
366.9
529.3
918.2
380.3
537.8
3,704.5
1,581.3
681.5'
899.9 r
1,813.9'
376.9'
4,000.3
1,637.9
704.3'
933.6'
1,969.2'
403.1'
4,219.3
1,693.8
726.8'
967.0'
2,116.2'
425.0''
4,184.0
1,689.9
717.0
972.9
2,097.9
423.8
4,262.4
1,703.6
735.8
967.8
2,136.6
425.7
4,294.6
1,698.9
737.3
961.6
2,160.0
429.3
4,326.0
1,738.7
747.0
991.7
2,212.0
426.9
4,407.3
1,759.9
750.1
1,009.8
2,257.6
430.2
67.7
40.2'
27.5''
10.0
7.3''
2.7''
15.7
4.8'
10.9'
27.5
10.1
17.5
3.5
-12.1
15.6
-6.4
-4.5
-1.9
51.6
35.2
16.5
40.4
19.4
21.0
3,718.0
3,731.5
3,772.2
3,793.7
6 Gross private domestic investment
7
Fixed investment
8
9
Structures
10
Producers' durable equipment
11
Residential structures
1?
13
Change in business inventories
Nonfarm
14 Net exports of goods and services
IS
16
Imports
17 Government purchases of goods and services
18
19
State and local
By major type of
70 Final sales, total
71
77
73
Nondurable
74
25
Structures
product
76 Change in business inventories
77
Durable goods
28
Nondurable goods
79 M E M O
Total G N P in 1982 dollars
3,501.4
3,607.5
3,713.3
3,704.7
30
3,028.6
3,229.9
3,422.0
3,414.1
3,438.7
3,471.0
3,548.3
3,597.8
31 Compensation of employees
3?
Wages and salaries
33
Government and government enterprises
34
Other
35
Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
2,213.9
1,838.8
346.1
1,492.5
375.1
192.2
182.9
2,370.8
1,974.7
372.3
1,602.6
396.1
203.8
192.3
2,504.9
2,089.1
394.8
1,694.3
415.8
214.7
201.1
2,487.6
2,074.6
391.6
1,683.0
413.0
213.1
199.8
2,515.1
2,097.9
397.7
1,700.2
417.2
214.9
202.3
2,552.0
2,128.5
403.8
1,724.7
423.5
219.1
204.4
2,589.9
2,163.3
412.2
1,751.1
426.6
220.0
206.7
2,623.7
2,191.6
418.1
1,773.5
432.0
222.5
209.5
234.5
204.0
30.5
257.3
227.6
29.7
289.8
252.6
37.2
298.1
250.1
48.1
292.5
256.2
36.3
297.8
261.2
36.6
320.9
269.7
51.3
327.7
276.0
51.6
NATIONAL
INCOME
38 Proprietors' income 1
39
Business and professional
40
Farm 1
8.5
9.0
16.7
17.4
17.2
18.4
20.0
18.9
47 Corporate profits 1
43
Profits before tax
44
Inventory valuation adjustment
45
Capital consumption adjustment
266.9
240.0
-5.8
32.7
277.6
224.8
-.7
53.5
284.4
231.9
6.5
46.0
282.3
224.4
11.3
46.7
286.4
236.3
6.0
44.0
281.1
247.9
-8.9
42.1
294.0
257.0
-11.3
48.2
296.5
267.1
-18.8
48.2
46 Net interest
304.8
315.3
326.1
328.7
327.5
321.7
323.6
331.1
41 Rental income of persons"
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For a f t e r - t a x profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of C o m m e r c e ) .
A52
2.17
Domestic Nonfinancial Statistics • October 1987
PERSONAL INCOME AND SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1986
Account
1984
1985
1987
1986
Q4
Q3
Ql
Q2'
Q3
PERSONAL INCOME AND SAVING
1 Total personal income
3,108.7
3,327.0
3,534.3
3,526.6
3,553.6
3,593.6
3,662.0
3,713.4
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises
1,838.6
577.6
439.1
442.8
472.1
346.1
1,974.9
609.2
460.9
473.0
520.4
372.3
2,089.1
623.3
470.5
497.1
573.9
394.8
2,074.6
621.2
468.7
493.7
568.1
391.6
2,097.9
622.8
470.0
498.6
578.8
397.7
2,128.5
628.4
474.5
504.7
591.6
403.8
2,163.3
632.9
477.2
511.5
606.7
412.2
2,191.6
635.2
479.1
519.0
619.4
418.1
182.9
234.5
204.0
30.5
8.5
75.5
444.7
456.6
235.7
192.3
257.3
227.6
29.7
9.0
76.3
476.5
489.7
253.4
201.1
289.8
252.6
37.2
16.7
81.2
497.6
518.3
269.2
199.8
298.1
250.1
48.1
17.4
81.0
500.0
514.5
266.4
202.3
292.5
256.2
36.3
17.2
82.1
498.1
523.6
272.4
204.4
297.8
261.2
36.6
18.4
82.9
496.8
526.6
273.5
206.7
320.9
269.7
51.3
20.0
84.5
499.8
533.7
278.0
209.5
327.7
276.0
51.6
18.9
86.3
506.3
541.5
282.3
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income
Business and professional
Farm 1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits . . .
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
132.7
148.9
159.6
158.8
160.1
161.8
166.7
168.4
3,108.7
3,327.0
3,534.3
3,526.6
3,553.6
3,593.6
3,662.0
3,713.4
440.2
485.9
512.2
504.2
515.3
532.0
536.1
578.0
20 EQUALS: Disposable personal income
2,668.6
2,841.1
3,022.1
3,022.4
3,038.2
3,061.6
3,125.9
3,135.4
21
LESS: Personal outlays
2,504.5
2,714.1
2,891.5
2,856.4
2,929.4
2,952.6
2,987.5
3,041.4
22 EQUALS: Personal saving
164.1
127.1
130.6
166.0
108.9
109.0
138.4
94.0
15,353.0
10,088.2
11,024.0
5.5
15,369.9
10,241.8
10,968.0
3.6
15,387.6
10,228.8
10,956.0
3.6
15,523.4
10,188.9
11,008.0
4.4
15,579.8
10,221.7
10,875.0
3.0
19
LESS: Personal tax and nontax payments
MEMO
Per capita (1982 dollars)
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (percent)
14,770.6' 9,488.6 r
10,419.0
6.1
15,073.7'
9,830.2'
10,622.0
4.5
15,368.3'
10,141.9'
10,947.0
4.3
GROSS SAVING
27 Gross saving
568.5
531.3
532.0
538.7
516.2
515.3
554.3
549.5
28
29
30
31
673.5
164.1
94.0
-5.8
664.2
127.1
99.6
-.7
679.8
130.6
92.6
6.5
713.7
166.0
93.6
11.3
660.4
108.9
92.6
6.0
653.4
109.0
78.5
-8.9
683.8
138.4
75.6
-11.3
641.8
94.0
71.4
-18.8
254.5
160.9
269.1
168.5
282.8
173.8
280.9
173.2
284.3
174.6
289.3
176.6
291.8
178.0
294.4
182.0
-105.0
-169.6
64.6
-132.9
-196.0
63.1
-147.8
-204.7
56.8
-175.0
-230.2
55.1
-144.1
-203.7
59.6
-138.1
-188.7
50.6
-129.5
-170.5
41.0
-92.3
-141.9
49.6
573.9
525.7
527.1
539.6
510.1
503.7
552.1
544.7
664.8
-90.9
641.6
-115.9
671.0
-143.9
679.4
-139.8
660.8
-150.7
660.2
-156.5
699.9
-147.7
700.9
-156.2
5.4
-5.6
-4.9
.9
-6.1
-11.6
-2.2
-4.8
Gross private saving
Personal saving
Undistributed c o r p o r a t e profits
Corporate inventory valuation adjustment
Capital consumption
32 Corporate
33 N o n c o r p o r a t e
34
35
36
allowances
Government surplus, or deficit ( - ) , national income and
product accounts
Federal
State and local
37 Gross investment
38 Gross private domestic
39 Net foreign
40 Statistical discripancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
SOURCE. Survey of Current Business
(Department of C o m m e r c e ) .
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
Item c r e d i t s o r d e b i t s
Ql
Q2
Q3
Q4
Ql"
1 B a l a n c e on c u r r e n t a c c o u n t
2
Not seasonally adjusted
-107,013
-116,394
-141,352
-33,040
-30,090
-33,755
-34,634
-36,583
-40,230
-37,977
-36,398
-37,122
-33,866
3
4
5
6
7
8
-112,522
219,900
-332,422
-1,942
18,490
1,138
-122,148
215,935
-338,083
-3,338
25,398
-1,005
-144,339
224,361
-368,700
-3,662
20,844
1,463
-34,978
53,878
-88,856
-1,298
6,425
-168
-33,651
56,928
-90,579
-1,054
4,587
530
-37,115
56,534
-93,649
-815
5,339
342
-38,595
57,021
-95,616
-495
4,492
759
-38,330
58,212
-96,542
198
3,836
264
-3,637
-8,541
-4,079
-11,222
-3,885
-11,772
-943
-2,078
-918
-3,249
-875
-3,459
-1,151
-2,987
-993
-2,097
132
1,956
0
76
9
10
Merchandise trade balance"
Merchandise exports
Merchandise imports
Military t r a n s a c t i o n s , net
I n v e s t m e n t i n c o m e , netO t h e r service t r a n s a c t i o n s , net
Remittances, pensions, and other transfers
U . S . g o v e r n m e n t g r a n t s (excluding military)
11 C h a n g e in U . S . g o v e r n m e n t a s s e t s , o t h e r t h a n official
r e s e r v e a s s e t s , net ( i n c r e a s e , - )
219
-1,454
-5,476
-2,831
-1,920
-240
12 C h a n g e in U . S . official r e s e r v e a s s e t s ( i n c r e a s e , - )
13
Gold
14
Special d r a w i n g rights ( S D R s )
15
R e s e r v e position in I n t e r n a t i o n a l M o n e t a r y Fund
16
Foreign c u r r e n c i e s
-3,130
-3,858
312
-115
0
0
0
0
0
0
0
-979
-995
-1,156
-897
908
-3,869
-246
1,500
-942
-274
344
-185
-104
366
-246
163
508
-391
-31
283
-120
17 C h a n g e in U . S . p r i v a t e a s s e t s a b r o a d ( i n c r e a s e , - ) 3
18
B a n k - r e p o r t e d claims
19
Nonbank-reported claims
20
U . S . p u r c h a s e of f o r e i g n securities, net
21
U . S . direct i n v e s t m e n t s a b r o a d , net
-13,685
-11,127
5,019
-4,756
-2,821
-24,711
-1,323
1,361
-7,481
-17,268
-94,374
-59,039
-3,986
-3,302
-28,047
-13,415
6,373
-2,947
-5,886
-10,955
-25,303
-14,734
-1,894
-1,149
-7,526
-23,304
-18,878
685
620
-5,731
-32,351
-31,800
170
3,113
-3,834
'-I,3i7'
-9,968
22 C h a n g e in foreign official a s s e t s in the United States
(increase, + )
23
U . S . Treasury securities
24
O t h e r U . S . g o v e r n m e n t obligations
25
O t h e r U . S . g o v e r n m e n t liabilities 4
26
O t h e r U . S . liabilities r e p o r t e d by U . S . b a n k s
27
O t h e r foreign official a s s e t s '
2,987
4,690
13
586
555
-2,857
-1,140
-838
-301
823
645
-1,469
34,698
34,515
-1,214
1,723
554
2,576
3,238
-177
406
-1,254
363
15,568
14,538
-644
925
15,551
12,167
-276
999
2,963
-302
1,003
4,572
-117
-607
-2,435
-410
14,123
11,999
-51
-1,421
3,964
-368
28 C h a n g e in foreign p r i v a t e a s s e t s in the U n i t e d S t a t e s
( i n c r e a s e , + )3
29
U . S . b a n k - r e p o r t e d liabilities
30
U . S . n o n b a n k - r e p o r t e d liabilities
31
F o r e i g n p r i v a t e p u r c h a s e s of U . S . T r e a s u r y securities, net
32
F o r e i g n p u r c h a s e s of o t h e r U . S . securities, net
33
F o r e i g n direct i n v e s t m e n t s in the United S t a t e s , net 3
99,481
33,849
4,704
23,001
12,568
25,359
131,012
41,045
-450
20,433
50,962
19,022
178,689
77,350
-2,791
8,275
70,802
25,053
33,746
8,487
-2,193
7,035
18,571
1,846
33,475
3,899
-1,553
3,705
22,888
4,536
54,040
30,360
57,428
34,604
1,035
-3,074
12,269
12,594
13,435
-13,836
34 Allocation of S D R s
35 D i s c r e p a n c y
36
Owing to seasonal adjustments
37
Statistical d i s c r e p a n c y in r e c o r d e d d a t a b e f o r e seasonal
adjustment
16
1,280
-531
280
-80
609
17,074
6,077
606
1,274
16,517
27,802 .
"'5,445'
18,454
3,372
0
0
0
0
0
0
0
0
26,837
17,920
23,947
10,488
2,294
10,241
-2,044
-8,530
-4,153
11,750
3,904
-9,128
2,749
26,837
17,920
23,947
8,194
12,285
-4,377
7,846
-11,877
MEMO
C h a n g e s in official a s s e t s
U . S . official r e s e r v e a s s e t s (increase, - )
Foreign official a s s e t s in the U n i t e d S t a t e s (increase, + )
e x c l u d i n g line 25
40 C h a n g e in O r g a n i z a t i o n of P e t r o l e u m E x p o r t i n g C o u n t r i e s
official a s s e t s in t h e U n i t e d S t a t e s (part of line 22
above)
41 T r a n s f e r s u n d e r military grant p r o g r a m s (excluded f r o m
lines 4, 6, a n d 10 a b o v e )
38
39
1. S e a s o n a l f a c t o r s a r e not c a l c u l a t e d f o r lines
38-41.
2. D a t a a r e o n a n i n t e r n a t i o n a l a c c o u n t s (IA)
basis d a t a , s h o w n in t a b l e 3.11, f o r r e a s o n s of
e x p o r t s are e x c l u d e d f r o m m e r c h a n d i s e d a t a and
3. I n c l u d e s r e i n v e s t e d e a r n i n g s .
-3,130
-3,858
312
-115
16
280
132
1,956
2,401
-1,963
32,975
2,170
14,643
14,552
1,610
15,544
-4,504
-6,709
-8,508
1,876
-2,166
-3,023
-5,195
-2,941
19
11
19
53
10
153
6, 10, 12-16, 1 8 - 2 0 , 22-34, a n d
basis. Differs f r o m the C e n s u s
c o v e r a g e a n d timing. Military
are included in line 6.
46
101
4. Primarily a s s o c i a t e d with military sales c o n t r a c t s a n d o t h e r t r a n s a c t i o n s
a r r a n g e d with or through foreign official a g e n c i e s .
5. C o n s i s t s of i n v e s t m e n t s in U . S . c o r p o r a t e s t o c k s a n d in d e b t s e c u r i t i e s of
private c o r p o r a t i o n s a n d state and local g o v e r n m e n t s .
NOTE. Data are f r o m B u r e a u of E c o n o m i c A n a l y s i s , Survey of Current
Business
( D e p a r t m e n t of C o m m e r c e ) .
A54
International Statistics • October 1987
U.S. FOREIGN TRADE 1
3.11
Millions of dollars; monthly data are not seasonally adjusted.
1987
Item
1983
1984
1985
1986
Jan.
Feb.
Mar.
Apr.
May
June
16,755
19,360
21,776
20,496
20,784
21,126
1
E X P O R T S of domestic and foreign
merchandise excluding grant-aid
shipments, f.a.s. value
2
G E N E R A L I M P O R T S including
merchandise for immediate
consumption plus entries into
bonded w a r e h o u s e s , c.i.f. value . . . .
269,878
346,364
352,463
382,964
28,692
33,725
34,694
33.459
34,822
36.838
3
T r a d e balance
-64,240
-122,389
-133,648
-156,156
-11,937
-14,365
-12,918
12,963
-14,039
-15,711
205,639
223,976
218,815
1. T h e C e n s u s basis data differ f r o m merchandise trade data shown in table
3.10, U.S. International Transactions S u m m a r y , for reasons of coverage and
timing. On the export side, the largest adjustment is the exclusion of military sales
(which are combined with other military transactions and reported separately in
the " s e r v i c e a c c o u n t " in table 3.10, line 6). On the import side, additions are made
for gold, ship p u r c h a s e s , imports of electricity from Canada, and other transac-
3.12
226,808
tions; military p a y m e n t s are excluded and shown separately as indicated
As of Jan. 1, 1987 census data are released 45 d a y s a f t e r the end of the
Total exports and the trade balance reflect a d j u s t m e n t s for u n d o c u m e n t e d
to Canada.
SOURCE. FT900 " S u m m a r y of U.S. Export and Import M e r c h a n d i s e
(Department of C o m m e r c e , Bureau of the Census).
above.
month.
exports
Trade"
U.S. RESERVE ASSETS
Millions of dollars, end of period
1987
Type
1984
1985
1986
Jan.
Feb.
Mar.
Apr.
May
June
July"
1
Total
34,934
43,186
48,517
49,386
49,358
48,824
46,591
45,913
45,140
44,318
2
Gold stock, including Exchange Stabilization F u n d '
11,096
11,090
11,064
11,062
11,085
11,081
11,076
11,070
11,069
11,069
3
Special drawing rights 2 - 3
5,641
7,293
8,395
8,470
8,615
8,740
8,879
8,904
8.856
8,813
4
Reserve position in International Monetary Fund"
11,541
11,947
11,730
11,872
11,699
11,711
11,745
11,517
11,313
10,964
6,656
12,856
17,328
17,982
17,959
17,292
14,891
14,422
13,902
13,472
5
Foreign currencies
4
1. Gold held under e a r m a r k at Federal Reserve Banks for foreign and international a c c o u n t s is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. BeginningJuly 1974, the I M F a d o p t e d a technique for valuing the SDR 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 M o n e t a r y Fund of S D R s as follows:
$867 million on Jan. 1, 1970; $717 million on J a n . 1, 1971; $710 million on J a n . 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on J a n . 1, 1980; and $1,093
million on Jan. 1, 1981; plus transactions in S D R s .
4. Valued at current market exchange rates.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS
Millions of dollars, end of period
1987
Assets
1984
1985
1986
Jan.
1 Deposits
Assets held in custody
2 U . S . Treasury securities 1
3 E a r m a r k e d gold 2
Mar.
Apr.
May
June
July
267
480
287
226
255
268
342
319
318
261
118,000
14,242
121,004
14,245
155,835
14,048
159,597
14,041
160,942
14,046
167,423
14,036
172,929
14,031
175,849
14,031
176,657
14,034
171,269
14,010
1. Marketable U . S . Treasury bills, notes, and bonds; and nonmarketable U.S.
T r e a s u r y securities payable in dollars and in foreign currencies.
2. E a r m a r k e d gold is valued at $42.22 per fine troy ounce.
Feb.
NOTE. Excludes deposits and U . S . Treasury securities held for international
and regional organizations. Earmarked gold is gold held for foreign and international accounts and is not included in the gold stock of the United States.
Summary Statistics
3.14
FOREIGN BRANCHES OF U.S. BANKS
A55
Balance Sheet Data1
Millions of dollars, end of period
1987
1986
1983
Asset account
1984
1985
Dec.
Jan.
Feb.
Mar.
Apr.
May
June?
All foreign countries
1 Total, all currencies
7 Claims on United States
3
Parent bank
4
Other banks in United States 2
5
Nonbanks 2
6 Claims on foreigners
7
Other branches of parent bank
8
9
Public borrowers
Nonbank foreigners
10
1
453,656
458,012
456,628
457,298'
457,819
457,007'
485,166'
487,436
475,068
115,542
82,026
,, ...
113,393
78,109
13,664
21,620
320,162
95,184
100,397
23,343
101,238
119,706
87,201
13,057
19,448
315,676
91,399
102,960
23,478
97,839
114,685
83,492
13,685
17,508
312,833
96,281
105,237
23,584
87,731
116,035'
83,956'
12,714
19,365
308,907'
91,543'
105,384'
22,573'
89,407
114,450
82,588
13,158
18,704
310,687'
89,656
109,748
22,418'
88,865
112,094'
81,677'
13,044
17,373'
310,819'
89,200
109,580
22,666'
89,373'
128,069'
93,753'
15,277
19,039
321,699
93,669'
115,561'
22,765
89,704
126,916
92,218
16,990
17,708
328,087
101.309
113,971
23,295
89,512
123,339
89,395
15,956
17,988
319,868
101,232
107,130
22,684
88,822
342,689
96,004
117,668
24,517
107,785
11 Other assets
12 Total payable in U.S. dollars
N Claims on United States
14
Parent bank
15
Other banks in United States 2
16
Nonbanks2
17 Claims on foreigners
18
Other branches of parent bank
19
Banks
70
Public borrowers
21
Nonbank foreigners
477,090
18,859
20,101
22,630
29,110
32,356'
34,094'
35,398
32,433
31,861
371,508
350,636
336,520
317,487
308,712'
311,669
306,431'
329,259'
336,235
329,343
113,436
80,909
247,406
78,431
93,332
17,890
60,977
111,426
77,229
13,500
20,697
228,600
78,746
76,940
17,626
55,288
116,638
85,971
12,454
18,213
210,129
72,727
71,868
17,260
48,274
110,742
82,082
12,830
15,830
194,941
72,197
66,421
16,586
39,737
111,367'
82,194'
11,531
17,642
185,547'
65,732'
63,608'
16,457
39,750
110,011
81,029
12,102
16,880
189,205
64,550
68,320
16,320
40,015
107,245'
79,817'
11,907
15,521'
185,541'
63,983
65,997
16,347'
39,214
122,278'
91,798'
13,468
17,012
192,715
66,916'
69,808'
16,512
39,479
121,458
90,182
15,354
15,922
201,261
75,014
69,395
16,812
40,040
118,353
87,559
14,647
16,147
198,408
75,771
66,877
16,271
39,489
10,666
10,610
9,753
11,804
11,798'
12,453
13,645
14,266
13,516
12,582
1
22 Other assets
32,682'
United Kingdom
23 Total, all currencies
74 Claims on United States
7S
Parent bank
76
Other banks in United States 2
77
Nonbanks2
78 Claims on foreigners
79
Other branches of parent bank
30
Banks
31
Public borrowers
32
Nonbank foreigners
158,732
144,385
148,599
140,917
144,093
146,188
145,486
149,998
154,371
146,678
34,433
29,111
27,675
21,862
1,429
4,384
111,828
37,953
37,443
5,334
31,098
33,157
26,970
1,106
5,081
110,217
31,576
39,250
5,644
33,747
24,599
19,085
1,612
3,902
109,508
33,422
39,468
4,990
31,628
28,720
23,330
1,220
4,170
108,720
30,218
40,677
4,942
32,883
28,851
23,326
1,258
4,267
110,274
29,575
43,189
4,983
32,527
28,503
23,303
1,288
3,912
109,297
28,782
42,537
4,897
33,081
31,001
25,315
1,564
4,122
111,113
29,936'
42,961'
4,964
33,252
34,427
28,935
1,507
3,985
112,997
33,412
41,216
5,234
33,110
30,859
25,944
1,194
3,721
107,789
32,641
37,181
4,684
33,283
119,280
36,565
43,352
5,898
33,465
33 Other assets
34 Total payable in U.S. dollars
35 Claims on United States
36
Parent bank
37
Other banks in United States 2
38
Nonbanks 2
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
47
Public borrowers
43
N o n b a n k foreigners
44 Other assets
5,019
4,882
5,225
6,810
6,653
7,063
7,686
7,884
6,947
8,030
126,012
112,809
108,626
95,028
95,359
97,568
95,319
99,398
104,622
97,623
33,756
28,756
88,917
31,838
32,188
4,194
20,697
26,868
21,495
1,363
4,010
82,945
33,607
26,805
4,030
18,503
32,092
26,568
1,005
4,519
73,475
26,011
26,139
3,999
17,326
23,193
18,526
1,475
3,192
68,138
26,361
23,251
3,677
14,849
27,070
22,673
996
3,401
65,022
22,720
23,629
3,681
14,992
27,290
22,749
1,061
3,480
66,872
22,578
25,685
3,716
14,893
26,665
22,662
980
3,023
64,466
21,785
24,225
3,660
14,796
29,066
24,689
1,192
3,185
66,257
22,339'
24,962'
3,712
15,244
32,542
28,228
1,157
3,157
68,469
25,921
23,263
3,785
15,500
29,252
25,286
950
3,016
64,676
25,409
20,998
3,470
14,799
3,339
2,996
3,059
3,697
3,267
3,406
4,188
4,075
3,611
3,695
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
47
Parent bank
48
Other banks in United States 2
49
Nonbanks2
50 Claims on foreigners
51
Other branches of parent bank
57
Banks
53
Public borrowers
54
Nonbank foreigners
55 Other assets
56 Total payable in U.S. dollars
152,083
146,811
142,055
142,592
134,620'
133,229
134,189'
146,776'
141,668
142,048
75,309
48,720
77,296
49,449
11,544
16,303
65,598
17,661
30,246
6,089
11,602
74,864
50,553
11,204
13,107
63,882
19,042
28,192
6,458
10,190
78,170
54,575
11,156
12,439
59,883
17,296
27,476
6,929
8,182
73,414'
48,807'
10,625
13,982
56,076'
14,511'
26,364'
7,026
8,175
68,873
44,759
10,924
13,190
59,036
15,481
28,139
6,974
8,442
67,586'
44,502'
10,855
12,229'
60,766'
16,529
28,568
7,038'
8,631
78,248'
52,086'
12,649
13,513
62,770
16,562
30,917
7,120
8,171
73,351
46,486
14,494
12,371
63,021
15,775
31,352
7,304
8,590
72,480
45,910
13,659
12,911
65,220
18,873
30,934
7,025
8,388
1
72,868
20,626
36,842
6,093
12,592
3,906
3,917
3,309
4,539
5,130'
5,320
145,641
141,562
136,794
136,813
128,467'
126,605
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for " s h e l l " branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
5,837
127,160'
5,758
138,784'
5,296
4,348
133,323
135,207
2. Data for assets vis-a-vis other banks in the United States and vis-a-vis
nonbanks are combined for dates before June 1984.
A56
3.14
International Statistics • October 1987
Continued
1986
iyo4
1987
iyoj
Dec.
Jan.
Feb.
Mar.
Apr.
May
JuneP
All foreign countries
57 Total, all currencies
477,090
453,656
458,012
456,628
457,298'
457,819
457,007'
485,166'
487,436
475,068
58 Negotiable CDs 3
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
n.a.
188,070
81,261
29,453
77,356
37,725
147,583
78,739
18,409
50,435
34,607
155,538
83,914
16,894
54,730
31,629
151,632
82,561
15,646
53,425
33,395
140,391'
70,071 r
15,051
55,269'
36,074
140,341'
73,095
13,602
53,644'
34,873
141,693'
71,092'
13,695
56,906'
33,155
152,698'
75,080'
16,913
60,705
34,360
149,989
74,551
16,908
58,530
31,827
149,919
78,369
16,560
54,990
63 To foreigners
64
Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
269,685
90,615
92,889
18,896
68,845
19,335
247,907
93,909
78,203
20,281
55,514
20,441
245,939
89,529
76,814
19,520
60,076
21,928
253,775
95,146
77,809
17,835
62,985
19,592
262,780'
89,351'
88,468'
19,532
65,429
20,732'
261,649'
88,524
86,037
19,818
67,270'
19,755
260,659
87,867
84,976
20,591
67,225
19,782
278,022'
94,590'
92,704
21,293
69,435
21,291
284,126
101,777
90,236
23,058
69,055
18,961
274,085
100,760
81,619
21,965
69,741
19,237
69 Total payable in U.S. dollars
388,291
367,145
353,712
336,406
322,920'
326,319
321,706'
340,408'
347,150
340,851
70 Negotiable CDs 3
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks
n.a.
184,305
79,035
28,936
76,334
35,227
143,571
76,254
17,935
49,382
31,063
150,162
80,888
16,264
53,010
28,466
143,650
78,472
14,609
50,569
29,921
131,876'
65,443'
14,047
52,386'
32,407
131,912'
68,540
12,505
50,867'
31,148
132,765'
65,981'
12,593
54,191'
29,505
141,465'
68,403'
15,455
57,607
30,763
141,087
70,067
15,742
55,278
27,980
141,457
74,225
15,348
51,884
75 To foreigners
76
Other branches of parent bank
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
194,139
73,522
57,022
13,855
51,260
9,847
178,260
77,770
45,123
15,773
39,594
10,087
163,583
71,078
37,365
14,359
40,781
8,904
156,806
71,181
33,850
12,371
39,404
7,484
153,935'
63,428'
36,864'
13,688
39,955
7,188'
154,416'
63,640
36,816
13,189
40,771'
7,584
149,949
62,172
35,116
13,392
39,269
7,844
161,216
67,278
39,111
14,318
40,509
8,222
167,664
74,769
36,216
16,068
40,611
7,636
163,530
74,136
32,202
15,687
41,505
7,884
149,998
United Kingdom
158,732
144,385
148,599
140,917
144,093
146,188
145,486
154,371
146,678
82 Negotiable CDs 3
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonbanks
n.a.
55,799
14,021
11,328
30,450
34,413
25,250
14,651
3,125
7,474
31,260
29,422
19,330
2,974
7,118
27,781
24,657
14,469
2,649
7,539
29,432
19,465
10,004
2,154
7,307
32,233
22,501
12,735
2,154
7,612
30,968
21,433
12,332
1,816
7,285
29,311
23,936'
13,170'
2,205
8,561
30,226
26,291
15,145
2,273
8,873
27,511
24,512
14,745
2,109
7,658
87 To foreigners
88
Other branches of parent bank
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
95,847
19,038
41,624
10,151
25,034
7,086
77,424
21,631
30,436
10,154
15,203
7,298
78,525
23,389
28,581
9,676
16,879
9,392
79,498
25,036
30,877
6,836
16,749
8,981
86,229
23,595
36,479
8,484
17,671
8,967
82,418
21,230
35,434
7,832
17,922
9,036
83,723
21,371
35,971
7,827
18,554
9,362
87,381'
22,421'
37,562
8,871
18,527
9,370
89,673
26,367
35,282
10,004
18,020
8,181
86,041
25,350
32,334
9,450
18,907
8,614
81 Total, all currencies
131,167
117,497
112,697
99,707
98,741
101,971
98,967
101,793
106,093
100,031
94 Negotiable CDs 3
95 To United States
% Parent bank
97
Other banks in United States
98
Nonbanks
n.a.
54,691
13,839
11,044
29,808
33,070
24,105
14,339
2,980
6,786
29,337
27,756
18,956
2,826
5,974
26,169
22,075
14,021
2,325
5,729
27,701
16,829
9,451
1,887
5,491
30,175
19,894
12,157
1,926
5,811
28,868
18,940
11,606
1,602
5,732
27,189
21,144
12,352
2,021
6,771
28,345
23,561
14,528
2,027
7,006
25,695
21,850
14,252
1,899
5,699
99 T o foreigners
100
Other branches of parent bank
101
Banks
102
Official institutions
10.3
Nonbank foreigners
104 Other liabilities
73,279
15,403
29,320
8,279
20,277
3,197
56,923
18,294
18,356
8,871
11,402
3,399
51,980
18,493
14,344
7,661
11,482
3,624
48,138
17,951
15,203
4,934
10,050
3,325
51,174
16,386
18,626
6,096
10,066
3,037
48,610
14,691
18,207
5,176
10,536
3,292
47,531
14,471
18,027
4,924
10,109
3,628
49,708
14,367
19,498
5,786
10,057
3,752
51,029
18,430
15,555
7,214
9,830
3,158
49,089
17,654
13,864
6,985
10,586
3,397
93 Total payable in U.S. dollars
Bahamas and Caymans
105 Total, all currencies
152,083
146,811
142,055
142,592
134,620'
134,189'
146,776'
141,668
142,048
106 Negotiable CDs 3
107 To United States
108
Parent bank
109
Other banks in United States
110
Nonbanks
n.a.
111,299
50,980
16,057
44,262
615
102,955
47,162
13,938
41,855
610
103,813
44,811
12,778
46,224
847
105,248
48,648
11,715
44,885
995
99,052'
40,869'
11,687
46,496'
855
95,516'
40,409
10,151
44,956'
813
98,912'
39,851'
10,568
48,493'
883
107,367'
43,315'
13,345
50,707
1,092
101,542
40,052
13,185
48,305
1,118
102,824
43,503
13,143
46,178
38,445
14,936
11,876
1,919
11,274
2,339
40,320
16,782
12,405
2,054
9,079
2,921
35,053
14,075
10,669
1,776
8,533
2,579
34,400
12,631
8,617
2,719
10,433
2,097
32,557'
11,371'
8,080'
2,808
10,298
2,016'
34,758'
12,972
8,070
3,013
10,703'
2,100
32,501
11,673
8,140
2,836
9,852
1,963
36,491
13,891
9,452
2,937
10,211
2,035
36,825
13,359
9,885
3,072
10,509
2,209
36,014
14,023
7,954
3,185
10,852
2,092
148,278
143,582
138,322
138,774
129,400'
140,796'
136,679
137,628
111 To foreigners
112
Other branches of parent bank
113
Banks
114
Official institutions
115
Nonbank foreigners
116 Other liabilities
117 Total payable in U.S. dollars
3. Before June 1984, liabilities on negotiable CDs were included in liabilities to
the United States or liabilities to foreigners, according to the address of the initial
purchaser.
130,592
133,229
129,183
Summary Statistics
3.15
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1987'
1986
Item
1 Total 1
2
3
4
S
6
7
8
9
10
11
12
By type
^
Liabilities reported by banks in the United States"
U.S. Treasury bills and certificates'
U.S. Treasury bonds and notes
Marketable
Nonmarketable
,
U.S. securities other than U.S. Treasury securities
By area
Western Europe
Canada
Latin America and Caribbean
Africa
Other countries 6
1984
1985
Jan.
Feb.
Mar.
Apr.'
May
June"
180,348
178,380
211,706
213,416
215,512
227,043
235,937
236,012
236,455
26,090
59,976
26,734
53,252
27.626
75,650
27,629
75,718
29,438
75,434
31,237
79,629
32,661
84,640
31,296
81,553
29,791
80,663
69,019
5,800
19,463
77,154
3,550
17,690
91,534
1,300
15,596
93,032
1,300
15,737
93,866
1,300
15,474
99,703
1,300
15,174
102,192
1,300
15,144
106,638
1,300
15,225
110,188
700
15,113
69,818
1,528
8,565
93,701
1,263
5,472
74,447
1.315
11,148
86,448
1,824
3,199
88.289
2,004
8.367
106,024
1.503
5.519
89,681
3,383
7,680
107,448
1,300
3,926
90,914
3,761
7,425
108,886
1,164
3,362
99,711
5,110
8,241
108,662
1,192
4,127
105,720
3,922
9,290
109,991
1,284
5,728
107,966
3,482
7,923
109,641
1,628
5,372
109,069
3,502
7,519
108,928
1,405
6,030
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
Dec.
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
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 TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies1
Millions of dollars, end of period
1987
1986
Item
1 Banks' own liabilities
2 Banks' own claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers 1
1983
5.219
7,231
2,731
4,501
1,059
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
2. Assets owned by customers of the reporting bank located in the United
1984
8,586
11,984
4,998
6,986
569
1985
15,368
16,294
8,437
7,857
580
June
Sept.
Dec.
Mar.
24,314
20,937
11,072
9,865
1,385
29,467
24,124
13,220
10,904
1,597
29,404
25,150
13,173
11,977
2,508
36,319
32,261
13,722
18,539
2,034
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A58
3.17
International Statistics • October 1987
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States
Millions of dollars, end of period
1986
Holder and type of liability
1983
1984
1987
1985
Dec.
Jan.
Feb.
Mar.
Apr.'
May
June''
1 A11 foreigners
369,607
407,306
435,726
538,895
525,505
522,597
524,768
552,326
555,635
539,492
2 Banks' own liabilities
3
Demand deposits
4
Time deposits
5
Other 2
6
Own foreign offices 3
279,087
17,470
90,632
25,874
145,111
306,898
19,571
110,413
26,268
150,646
341,070
21,107
117,278
29,305
173,381
404,760
23,788
131,136
40,880
208,956
392,094
22,490
125,207
39,549
204,848
388,147
22,449
125,728
40,611
199,359
389,715
22,303
125,129
42,458
199,825
412,186
22,174
132,702
46,034
211,275
415,626
22,973
133,134
45,860
213,659
400,315
23,222
132,840
40,933
203,320
90,520
68,669
100,408
76,368
94,656
69,133
134,134
90,257
133,411
89,278
134,450
90,695
135,054
93,048
140,141
97,789
140,010
95,959
139,178
93,688
17,467
4,385
18,747
5,293
17,964
7,558
16,523
27,354
14,656
29,477
13,839
29,916
14,744
27,262
14,625
27,727
15,953
28,098
16,582
28,908
5,957
4,454
5,821
4,699
5,081
4,520
3,889
7,344
3,867
3,962
2,850
199
2,066
584
3,732
183
2,515
1,034
2,193
157
1,488
548
2,510
246
1,230
1,033
5,750
159
3,100
2,490
2,203
106
960
1,137
2,472
72
950
1,451
7 Banks' custody liabilities 4
8
U . S . Treasury bills and certificates
9
Other negotiable and readily transferable
instruments 6
10
Other
11 Nonmonetary international and regional
organizations 7
12 Banks' own liabilities
13
Demand deposits
14
Time deposits
15
Other 2
4,632
297
3,584
750
2,014
254
1,267
493
2,621
85
2,067
469
16 Banks' custody liabilities 4
17
U . S . Treasury bills and certificates
Other negotiable and readily transferable
18
instruments 6
Other
19
1,325
463
2,440
916
3,200
1,736
1,849
259
1,349
86
2,326
1,213
1,379
154
1,594
428
1,664
440
1,490
266
862
0
1,524
0
1,464
0
1,590
0
1,261
2
1,112
1
1,225
0
1,152
14
1,224
0
1,224
0
20 Official institutions 8
79,876
86,065
79,985
103,275
103,346
104,872
110,866
117,302
112,849
110,454
21 Banks' own liabilities
22
Demand deposits
73
Time deposits 1
24
Other 2
19,427
1,837
7,318
10,272
19,039
1,823
9,374
7,842
20,835
2,077
10,949
7,809
25,134
2,267
10,752
12,115
25,403
1,487
11,335
12,580
26,880
1,513
11,385
13,982
28,103
1,923
11,135
15.044
29,675
1,829
12,527
15,318
28,433
2,089
11,017
15,327
26,401
1,744
12,226
12,431
25 Banks' custody liabilities 4
26
U . S . Treasury bills and certificates'
27
Other negotiable and readily transferable
instruments 6
Other
28
60,448
54,341
67,026
59,976
59,150
53,252
78,142
75,650
77,944
75,718
77,992
75,434
82,763
79,629
87,627
84,640
84,415
81,553
84,052
80,663
6,082
25
6,966
84
5,824
75
2,347
145
2,158
69
2,418
140
3,001
132
2,832
154
2,715
147
3,141
248
29 Banks 9
226,887
248,893
275,589
350,491
339,648
335,517
334,231
350,499
358,910
347,373
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits 1
34
Other 2
35
Own foreign offices 3
205,347
60,236
8,759
37,439
14,038
145,111
225,368
74,722
10,556
47,095
17,071
150,646
252,723
79,341
10,271
49,510
19,561
173,381
309,928
100,971
10,303
64,245
26,424
208,956
297,037
92,189
10,434
57,912
23,844
204,848
293,144
93,785
10,103
60,007
23,675
199,359
295,092
95,268
9,510
61,856
23.902
199,825
311,360
100,084
9,781
64,926
25,378
211,275
319,148
105,489
10,558
68,113
26,818
213,659
306,192
102,872
10,301
67,872
24.700
203.320
36 Banks' custody liabilities 4
37
U.S. Treasury bills and certificates
38
Other negotiable and readily transferable
instruments 6
Other
39
21,540
10,178
23,525
11,448
22,866
9,832
40,563
9,962
42,611
9,826
42,373
10,486
39,138
9,744
39,140
9,538
39,761
9,774
41,181
9,066
7,485
3,877
7,236
4,841
6,040
6,994
5,513
25,089
5,433
27,352
4,340
27,547
4,367
25,026
4,256
25,346
4,376
25,611
5,821
26.294
40 Other foreigners
56,887
67,894
74,331
80,430
77,429
77,688
75,783
77,181
80,011
77,703
41 Banks' own liabilities
42
Demand deposits
43
Time deposits
Other 2
44
49,680
6,577
42,290
813
60,477
6,938
52,678
861
64,892
8,673
54,752
1,467
66,849
11,019
54,073
1,757
65,923
10,386
53,446
2,091
65,929
10,676
52,848
2,405
64,009
10,623
50,908
2,479
65,401
10,405
52,148
2,848
65,841
10,220
53,043
2,578
65,249
11,105
51,792
2,352
7,207
3,686
7,417
4,029
9,439
4,314
13,580
4,387
11,507
3,648
11,759
3,563
11,773
3,520
11,780
3,183
14,169
4,192
12,454
3,694
3,038
483
3,021
367
4,636
489
7,074
2,120
5,804
2,055
5,969
2,227
6,150
2,103
6,385
2,212
7,638
2,340
6,395
2,366
10,346
10,476
9,845
7,343
7,191
7,722
7,694
7,976
8,541
7,373
45 Banks' custody liabilities 4
46
U.S. Treasury bills and certificates
Other negotiable and readily transferable
47
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."
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."
Nonbank-Reported
Data
3.17 Continued
1987
1986
Area and country
1983
1984
1985
Dec.
Jan.
Feb.
Mar.
Apr.'
May
June''
1 Total
369,607
407,306
435,726
538,895
525,505
522,597
524,768
552,326
555,635
539,492
2 Foreign countries
363,649
402,852
429,905
534,196
520,424
518,077
520,879
544,982
551,769
535,530
138,072
585
2,709
466
531
9,441
3,599
520
8,462
4,290
1,673
373
1,603
1,799
32,246
467
60,683
562
7,403
65
596
153,145
615
4,114
438
418
12,701
3,358
699
10,762
4,731
1,548
597
2,082
1,676
31,740
584
68,671
602
7,192
79
537
164,114
693
5,243
513
496
15,541
4,835
666
9,667
4,212
948
652
2,114
1,422
29,020
429
76,728
673
9,635
105
523
180,871
1,186
6,788
485
580
22,850
5,823
706
10,875
5,558
737
700
2,393
889
30,967
454
85,352
631
3,117
80
702
179,253
972
6,729
449
565
21,372
6,813
745
9,375
5,155
678
657
2,238
884
28,913
375
87,911
554
4,309
21
535
181,082
928
7,587
520
762
22,654
5,907
749
8,489
5,354
554
709
2,333
1,062
27,555
359
90,105
565
4,319
23
546
182,527
798
7,230
623
937
23,835
7,412
641
10,101
4,968
495
689
2,224
1,065
27,544
412
88,390
564
3,902
30
669
191,655
1,057
7,904
425
942
27,399
6,419
601
11,337
5,967
567
660
2,233
1,251
26,500
833
91,765
526
4,572
32
665
206,537
921
9,335
459
909
27,858
10,077
643
11,726
5,442
571
607
2,194
1,496
27,074
378
102,308
429
3,534
37
538
202,904
974
9,566
425
616
27,947
7,115
691
11,943
4,787
503
704
2,322
1,297
28,639
455
99,395
433
4,386
36
671
16,026
16,059
17,427
26,256
26,105
25,189
26,553
25,294
24,522
21,913
3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
Finland
7
8
France
9
Germany
10
Greece
11
Italy
Netherlands
1?
13
Norway
14
Portugal
Spain
1")
16
Sweden
Switzerland
17
Turkey
18
19
United Kingdom
Yugoslavia
20
Other Western Europe 1
71
?? U . S . S . R
Other Eastern Europe"
23
24 C a n a d a
140,088
4,038
55,818
2,266
3,168
34,545
1,842
1,689
8
1,047
788
109
10,392
3,879
5,924
1,166
1,244
8,632
3,535
153,381
4,394
56,897
2,370
5,275
36,773
2,001
2,514
10
1,092
896
183
12,303
4,220
6,951
1,266
1,394
10,545
4,297
167,856
6,032
57,657
2,765
5,373
42,674
2,049
3,104
11
1,239
1,071
122
14,060
4,875
7,514
1,167
1,552
11,922
4,668
208,949
4,754
73,267
2,951
4,321
71,151
2,053
4.281
7
1,235
1,122
136
13,631
4,914
6,865
1,163
1,537
10,452
5,109
195,666
4,499
64,998
2,282
3,813
66,775
2,208
4,273
6
1,049
1,124
149
13,584
5,593
7,361
1,110
1,609
10,494
4,741
191,636
4,668
62,970
2,506
3,797
65,509
2,046
4,268
7
1,120
1,081
145
13,423
5,652
6,475
1,131
1,583
10,362
4,894
195,412
4,725
62,581
2,293
3,693
69,860
2,060
4,271
6
1,014
1,082
230
13,207
5,643
6,664
1,062
1,630
10,365
5,026
206,806
4,406
72,101
2,180
3,616
69,213
2,253
4,349
6
1,044
1,164
149
15,053
5,706
7,091
1,086
1,520
10,587
5,280
204,528
4,806
69,330
2,594
3,960
70,266
2,034
4,289
26
1,093
1,167
189
13,935
5,171
7,341
1,095
1,507
10,292
5,432
195,523
4,795
66,327
2,172
3,673
65,156
1,972
4,363
8
1,121
1,122
158
13,746
5,760
7,125
1,137
1,504
10,169
5,218
58,570
71,187
72,280
108.969
112,058
113,439
108,942
112,345
107,784
106,549
249
4,051
6,657
464
997
1,722
18,079
1,648
1,234
747
12,976
9,748
1,153
4,990
6,581
507
1,033
1,268
21,640
1.730
1,383
1,257
16,804
12,841
1,607
7,786
8,067
712
1,466
1,601
23,077
1,665
1,140
1,358
14,523
9,276
1,476
18,903
9,518
673
1,548
1,890
47,437
1,141
1,865
1,120
12,356
11,042
2,046
19,553
9,388
663
1,410
1,761
49,997
1,058
1,811
1,282
12,322
10,768
1,650
21,127
9,329
686
1,591
1,892
50,921
1,017
1,779
1,224
12,104
10,120
1,973
20,106
9,160
500
1,414
1,666
48,983
1,129
1,737
1,235
11,581
9,456
1,899
19,460
9,357
526
1,460
1,302
53,392
1,177
1,426
1,131
11,399
9,816
1,842
17,333
9,365
569
1,243
1,084
50,434
1,343
1,312
1,174
10,902
11,182
1,737
16,308
9,123
714
1,773
1,229
49,334
1,401
1,223
1,144
11,433
11,130
57 Africa
58
Egypt
59
Morocco
60
South Africa
Zaire
61
Oil-exporting countries
62
Other Africa
63
2,827
671
84
449
87
620
917
3,3%
647
118
328
153
1,189
961
4,883
1,363
163
388
163
1,494
1,312
4,019
706
92
271
74
1,518
1,358
3,661
607
74
341
54
1,336
1,248
3,499
791
76
201
42
1,156
1,233
3,457
753
99
178
40
1,108
1,278
3,702
847
101
287
39
1,212
1,216
4,003
1,052
86
198
74
1,267
1,326
3,757
1,006
106
188
58
1,115
1,285
64 Other countries
65
Australia
66
All other
8,067
7,857
210
5,684
5,300
384
3,347
2,779
568
5,131
4,209
922
3,680
2,683
997
3,232
2,465
767
3,988
3,027
960
5,179
4,292
888
4,394
3,589
805
4,883
4,113
770
67 Nonmonetary international and regional organizations
International
Latin American regional
Other regional'
5,957
5,273
419
265
4,454
3,747
587
120
5,821
4,806
894
121
4,699
3,512
1,033
154
5,081
3,958
960
164
4,520
3,606
762
152
3,889
2,897
788
204
7,344
6,075
850
420
3,867
2,384
994
488
3,962
2,560
1,047
356
75 Latin America and Caribbean
Argentina
76
Bahamas
77
78
Bermuda
29
Brazil
British West Indies
30
31
Chile
37
Colombia
33
Cuba
Ecuador
34
35
Guatemala
36
Jamaica
37
Mexico
Netherlands Antilles
38
39
Pa na ma
40
Peru
Uruguay
41
Venezuela
42
Other Latin America and Caribbean
43
44
45
46
47
48
49
50
51
57.
53
54
55
56
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle-East oil-exporting countries 3
Other Asia
68
69
70
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 Romania.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, G a b o n , Libya, and Nigeria.
5. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in " O t h e r
Western E u r o p e . "
A59
A60
3.18
International Statistics • October 1987
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1986
Area and country
1983
1984
1987
1985
Dec.
Jan.
Feb.
Mar.
Apr.
May
June"
1 Total
391,312
400,162
401,608
444,257
421,086
417,258
414,321
439,040 r
436,491
429,498
2 Foreign countries
391,148
399,363
400,577
441,273
421,017
417,081
413,777
434,309'
436,248
427,794
91,927
401
5,639
1,275
1,044
8,766
1,284
476
9,018
1,267
690
1,114
3,573
3,358
1.863
812
47,364
1,718
477
192
1,598
99,014
433
4,794
648
898
9,157
1,306
817
9,119
1,356
675
1.243
2,884
2,230
2,123
1,130
56,185
1,886
596
142
1,389
106,413
598
5,772
706
823
9,124
1,267
991
8,848
1,258
706
1,058
1,908
2,219
3.171
1,200
62,566
1,964
998
130
1,107
107,347
728
7,503
692
947
11,369
1,818
648
9,042
3,299
654
706
1,459
1,945
3,049
1,541
58,282
1,836
540
345
944
100,775
641
7,556
650
797
9,058
2,269
635
7,898
2,077
741
677
1,479
2,280
2,622
1,469
55,856
1,775
522
396
1,379
102,234
549
8,905
624
1,050
9,960
1,725
634
7,337
2,090
766
679
1,637
2,422
2,413
1,436
56,387
1,769
477
401
971
99,393
660
8,083
651
1,003
9,858
1,632
535
6,991
2,371
667
737
1,768
2,464
2.338
1,577
54,035
1,840
781
367
1,032
108,154'
750
8,544
574
1,127
10,816'
1,371'
460
7,536
3,075
683
615''
1,977'
2,417
2,905
1,559
59,864'
1,763
670
375'
1,073''
115,387
668
9,956
569
1,046
12,076
1,507
457
8,331
2,989
776
641
2,107
2,618
3,593
1,623
62,743
1,803
515
357
1,012
114,467
782
9,757
744
1,046
12,029
1,548
496
8,696
5,806
764
659
1,848
2,333
2,614
1,785
59,649
1,755
581
582
993
3 Europe
4
Austria
3
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 Europe 2
24 C a n a d a
16,341
16,109
16,482
20.958
20,749
19,186
19,829
20,225
19,341
19,112
205,491
11,749
59,633
566
24,667
35,527
6,072
3,745
0
2,307
129
215
34,802
1,154
7,848
2,536
977
11,287
2,277
207,862
11,050
58,009
592
26,315
38,205
6,839
3.499
0
2,420
158
252
34.885
1,350
7,707
2.384
1,088
11,017
2,091
202,674
11,462
58,258
499
25,283
38,881
6,603
3,249
0
2,390
194
224
31,799
1,340
6,645
1,947
960
10,871
2,067
208,852
12,089
59,547
418
25,666
46,306
6,543
2,819
0
2,449
140
198
30,607
1,039
5,434
1,643
940
11,078
1,938
195,571
12,114
52,090
415
25,798
41,128
6,475
2,801
10
2,425
133
199
30,289
960
5,270
1,635
937
11,028
1,864
196,337
12,211
52,952
376
25,810
41,074
6,603
2,743
1
2,422
145
199
29,999
945
5,204
1,626
932
11,185
1,910
199,037
12,162
53,679
532
26,082
42,774
6,412
2,692
6
2,338
135
192
29,817
992
5,543
1,593
959
11,282
1,845
209,196'
12,129'
62,639 r
740
25,986'
43,256''
6,412'
2,686'
9
2,381
120
189
30,119'
1,202
5,771'
1,601'
957
11,089'
1,910
204,255
12,335
57,778
1,230
25,734
44,073
6,326
2,650
9
2,372
115
184
30.080
1,072
4,791
1,599
962
11,046
1,900
201,438
12,254
54,906
2,141
25,505
42,766
6,554
2,648
1
2,354
109
182
30,274
1,362
4,933
1,565
950
11,032
1,903
67,837
66,316
66,212
96,198
95,989
91,767
87,783
88,990'
89,571
85,085
292
1,908
8,489
330
805
1,832
30,354
9,943
2,107
1,219
4,954
5,603
710
1,849
7,293
425
724
2,088
29,066
9,285
2,555
1.125
5,044
6,152
639
1,535
6,797
450
698
1,991
31,249
9.226
2,224
845
4,298
6,260
787
2,675
8,300
321
718
1,635
59,852
7,159
2,208
577
4,122
7,845
983
2,617
8,443
333
699
1,601
58,319
6,783
2,154
521
5,483
8,053
873
2,890
9,225
325
679
1,521
55,594
6,161
2,127
557
4,892
6,922
1,373
2,910
8,254
486
652
1,545
52,267
6,011
2,282
492
5,150
6,362
1,360'
3,278''
7,931'
314
627'
1,509
54,292
5,352'
2,121
461
4,598
7,148
1,175
3,592
7,725
379
657
1,459
55,097
6,078
2,064
540
3,797
7,009
993
3,300
7,638
429
677
1,450
52,405
5,210
2,109
552
3,806
6,513
57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries
Other
63
6,654
747
440
2,634
33
1,073
1,727
6,615
728
583
2,795
18
842
1,649
5,407
721
575
1,942
20
630
1,520
4,621
567
598
1,531
28
688
1,208
4,618
577
590
1,534
36
725
1,156
4,678
593
585
1,548
42
743
1,168
4,853
618
584
1,550
42
856
1,204
4,795'
574
565
1,578
41
801'
1,236
4,867
585
566
1,591
43
840
1,243
4,707
599
563
1,506
39
818
1,183
64 Other countries
65
Australia
66
All other
2,898
2,256
642
3,447
2,769
678
3,390
2,413
978
3,297
1,952
1,345
3,316
2,081
1,235
2,878
1,902
976
2,882
1,990
892
2,949'
2,065'
884
2,828
1,897
931
2,986
1,980
1,006
164
800
1,030
2,983
69
178
544
4,731'
244
1,703
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35
Guatemala 3
36
Jamaica 3
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
Other
Latin America and Caribbean
43
44
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 East oil-exporting countries 4
Other Asia
67 N o n m o n e t a r y international and regional
organizations 6
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 Romania.
3. Included in " O t h e r Latin America and C a r i b b e a n " through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
" O t h e r Western E u r o p e . "
Nonbank-Reported
3.19
Data
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States Payable in U.S. Dollars
Millions of dollars, end of period
1986
1983
T y p e of claim
1 Total
2
3
4
5
6
7
8
Banks' own claims on foreigners
Foreign public borrowers
O w n foreign offices
Unaffiliated foreign banks
Deposits
Other
All o t h e r f o r e i g n e r s
9 Claims of b a n k s ' d o m e s t i c
customers"...
1984
1987
1985
430,489
Dec.
Jan.
Feb.
Mar.
Apr.'
May
June''
478,221
421,086
417,258
445,899'
439,040
436,491
429,498
439,040
65,706
206,944
121,747
57,394
64,353
44,643
436,491
62,400
203,583
125,924
60,304
65,620
44,584
429,498
63,153
196,802
125,306
60,210
65,096
44,238
46,773
45,513
n.a.
426,215
433,078
391,312
57,569
146,393
123,837
47,126
76,711
63,514
400,162
62,237
156,216
124,932
49,226
75,706
56,777
401,608
60,507
174,261
116,654
48,372
68,282
50,185
444,257
63,950
211,759
122,747
57,299
65,447
45,801
34,903
2,969
32,916
3,380
28,881
3,335
33,964
4,413
31,578'
3,402
26,064
23,805
19,332
24,044
20,551
5,870
5,732
6,214
5,508
37,715
37,103
28,487
25,616
46,337
40,714
38,102
43,994
421,086
61,794
192,595
121,036
54,376
66,660
45,662
417,258
61,709
190,911
120,287
55,526
64,760
44,352
414,321
62,737
190,070
117,063
53,652
63,411
44,450
11 N e g o t i a b l e a n d r e a d i l y t r a n s f e r a b l e
12 O u t s t a n d i n g c o l l e c t i o n s a n d o t h e r
7,625''
13 M E M O : C u s t o m e r liability o n
D o l l a r d e p o s i t s in b a n k s a b r o a d ,
reported by nonbanking business
e n t e r p r i s e s in t h e U n i t e d S t a t e s 4 . . . .
46,583
49,528
44,404'
3. P r i n c i p a l l y n e g o t i a b l e t i m e c e r t i f i c a t e s o f d e p o s i t a n d b a n k e r s a c c e p t a n c e s .
4. I n c l u d e s d e m a n d a n d t i m e d e p o s i t s a n d n e g o t i a b l e a n d
nonnegotiable
c e r t i f i c a t e s o f d e p o s i t d e n o m i n a t e d in U . S . d o l l a r s i s s u e d b y b a n k s a b r o a d . F o r
d e s c r i p t i o n o f c h a n g e s in d a t a r e p o r t e d b y n o n b a n k s , s e e J u l y 1 9 7 9 B U L L E T I N , p .
550.
NOTE. B e g i n n i n g April 1978, d a t a f o r b a n k s ' o w n c l a i m s a r e g i v e n o n a m o n t h l y
basis, but the data for claims of b a n k s ' o w n d o m e s t i c c u s t o m e r s are available on
a quarterly basis only.
1. U.S. banks:
includes a m o u n t s due from o w n foreign branches and foreign
s u b s i d i a r i e s c o n s o l i d a t e d i n " C o n s o l i d a t e d R e p o r t o f C o n d i t i o n " filed w i t h b a n k
r e g u l a t o r y a g e n c i e s . Agencies,
branches,
and majority-owned
subsidiaries
of
foreign
banks:
principally a m o u n t s due f r o m head office or parent foreign bank,
a n d f o r e i g n b r a n c h e s , a g e n c i e s , o r w h o l l y o w n e d s u b s i d i a r i e s of h e a d o f f i c e o r
parent foreign bank.
2. A s s e t s o w n e d b y c u s t o m e r s o f t h e r e p o r t i n g b a n k l o c a t e d in t h e U n i t e d
States that represent claims on foreigners held by reporting b a n k s for the account
of their d o m e s t i c c u s t o m e r s .
3.20
25,449
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1987
1986
Maturity; by borrower and area
1 Total
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By
borrower
Maturity of 1 y e a r o r less1
Foreign public borrowers
All o t h e r f o r e i g n e r s
Maturity over 1 year1
Foreign public borrowers
All o t h e r f o r e i g n e r s
By
area
Maturity of 1 y e a r or less1
Europe
Canada
Latin America and Caribbean
Asia
Africa
All o t h e r 2
Maturity of o v e r 1 y e a r
Europe
Canada
Latin America and Caribbean
Asia
Africa
All o t h e r 2
1. R e m a i n i n g t i m e t o m a t u r i t y .
1983
1984
1985
June
Sept.
Dec.
Mar.
243,715
243,952
227,903
222,824
224,754
231,413
225,211
176,158
24,039
152,120
67,557
32,521
35,036
167,858
23,912
143,947
76,094
38,695
37,399
160,824
26,302
134,522
67,078
34,512
32,567
152,743
23,172
129,571
70,081
37,582
32,499
155,258
22,528
132,731
69,496
38.350
31,145
159,909
24,921
134,988
71,504
39,783
31,722
153,302
22,411
130,891
71,909
41,005
30904
56,117
6,211
73,660
34,403
4,199
1,569
58,498
6,028
62,791
33,504
4,442
2,593
56,585
6,401
63,328
27,966
3,753
2,791
58,028
6,103
57,436
25,796
3,297
2,083
59,428
6,199
58,212
26.505
3,071
1,845
61,227
5,840
56,050
29,476
2,858
4,458
57,806
5,504
54,078
29,538
3,145
3,231
13,576
1,857
43,888
4,850
2,286
1,101
9,605
1,882
56,144
5,323
2,033
1,107
7,634
1,805
50,674
4,502
1,538
926
7,945
2,256
53,621
4,043
1,497
719
7,230
1,930
54,137
3,976
1,479
744
6,826
1,930
56,337
4,081
1,534
795
6,954
1,936
56.623
4,197
1,626
573
2. I n c l u d e s 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 r e g i o n a l
organizations.
A61
A62
International Statistics • October 1987
3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 12
Billions of dollars, end of period
1985
Area or country
1982
1983
1986
1987
1984
June
Sept.
Dec.
June
Sept.
Dec.
Mar.
r
Mar.
433.9
405.7
405.5
396.8
394.9
391.9
393.l
389.9'
389.5'
390.0 r
396.3
167.8
12.4
16.2
11.3
11.4
3.5
5.1
4.3
65.3
8.3
29.9
148.1
8.7
14.1
9.0
10.1
3.9
3.2
3.9
60.3
7.9
27.1
153.0
9.3
14.5
8.9
10.0
3.8
3.1
4.2
65.4
9.1
24.7
146.7
8.9
13.5
9.6
8.6
3.7
2.9
4.0
65.7
8.1
21.7
152.0
9.5
14.8
9.8
8.4
3.4
3.1
4.1
67.1
7.6
24.3
148.5
9.3
12.3
10.5
9.8
3.7
2.8
4.4
64.6
7.0
24.2
156.6 r
8.3
13.8
11.3
8.5
3.5
2.9
5.4
68.6 r
6.3
28.0
160.0'
9.0
15.1
11.5
9.3
3.4
2.9
5.6
69.0 r
6.9
27.4
158.9'
8.5
14.7 r
12.5
8.1
3.9
2.7
4.8
70. l r
6.1
27.7
157.9
8.4
13.8
11.7
9.0
4.6
2.4
5.5
71.8
5.4
25.3
163.5 r
9.1
13.4
12.2 r
8.6
4.4
3.0
5.8
74.6
5.2
27.2
13 Other developed countries
14
Austria
15
Denmark
16
Finland
17
Greece
18
Norway
19
Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
36.0
1.9
3.4
2.4
2.8
3.3
1.5
7.1
1.7
1.8
4.7
5.4
33.6
1.6
2.2
1.9
2.9
3.0
1.4
6.5
1.9
1.7
4.5
6.0
32.8
1.6
2.1
1.8
2.9
2.9
1.4
6.4
1.9
1.7
4.2
6.1
32.3
1.6
1.9
1.8
2.9
2.9
1.3
5.9
2.0
1.8
3.9
6.2
32.0
1.7
2.1
1.8
2.8
3.4
1.4
6.1
2.1
1.7
3.3
5.6
30.4
1.6
2.4
1.6
2.6
2.9
1.3
5.8
1.9
2.0
3.2
5.0
31.6
1.6
2.5
1.9
2.5
2.7
1.1
6.4
2.3
2.4
3.2
4.9
30.6
1.7
2.4
1.6
2.6
3.0
1.0
6.4
2.5
2.1
3.1
4.2
29.4
1.7
2.3
1.7
2.3
2.7
1.0
6.7
2.1
1.6
3.1
4.1
26.0
1.7
1.7
1.4
2.3
2.4
.8
5.8
2.0
1.4
3.0
3.5
26. l r
1.9
1.8
1.4
2.1
2.1
.9
6.2
1.9
1.6
3.1
3.2
25 O P E C countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
28.4
2.2
9.9
3.4
9.8
3.0
24.9
2.2
9.3
3.3
7.9
2.3
24.5
2.2
9.3
3.3
7.4
2.3
22.8
2.2
9.3
3.1
6.1
2.2
22.7
2.2
9.0
3.1
6.2
2.3
21.6
2.1
8.9
3.0
5.5
2.0
20.7
2.2
8.7
3.3
4.7
1.8
20.6
2.1
8.8
3.0
5.0
1.7
20.0
2.2
8.7
2.8
4.6
1.7
19.6
2.2
8.6
2.5
4.5
1.7
20.2
2.1
8.7
2.3 r
5.5
1.6
1 Total
2 G-10 countries and Switzerland
3
Belgium-Luxembourg
4
France
5
Germany
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12
Japan
31 N o n - O P E C developing countries
110.8
111.8
110.8
110.0
107.8
105.1
103.8
101.7
99.9
99.5
100.0
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
9.5
23.1
6.4
3.2
25.8
2.4
4.2
8.7
26.3
7.0
2.9
25.7
2.2
3.9
8.6
26.4
7.0
2.8
25.5
2.2
3.8
8.6
26.6
6.9
2.7
25.3
2.1
3.7
8.9
25.5
6.6
2.6
24.4
1.9
3.5
8.9
25.6
7.0
2.7
24.2
1.8
3.4
8.9
25.7
7.0
2.3
24.1
1.7
3.3
9.2
25.4
7.1
2.2
23.9
1.6
3.3
9.3
25.3
7.2
2.0
23.9
1.5
3.3
9.5
25.3
7.1
2.1
23.9
1.4
3.1
9.5
25.6
7.3
2.0
23.9 r
1.4
3.0
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.3
5.2
.9
1.9
11.2
2.8
6.1
2.2
1.0
.7
5.1
.9
1.8
10.6
2.7
6.0
1.8
1.1
.7
5.3
.9
1.7
10.4
2.7
6.1
1.7
1.1
.3
5.5
.9
2.3
10.0
2.8
6.0
1.6
.9
1.1
5.1
1.1
1.5
10.4
2.7
6.0
1.7
.9
.5
4.5
1.2
1.6
9.4
2.4
5.7
1.4
1.0
.6
4.3
1.2
1.3
9.5
2.2
5.6
1.3
.9
.6
3.7
1.3
1.6
8.7
2.0
5.7
1.1
.8
.6
4.3
1.3
1.4
7.3
2.1
5.4
1.0
.7
.4
4.9
1.2
1.5
6.7
2.1
5.4
.9
.7
.9
5.4
1.7 r
1.4
6.2
1.9
5.4
.9
.6
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.5
.8
.1
2.3
1.2
.8
.1
2.1
1.1
.8
.1
2.2
1.0
.8
.1
2.0
1.0
.9
.1
2.0
1.0
.9
.1
1.9
.9
.9
.1
1.9
.9
.9
.1
1.7
.7
.9
.1
1.6
.7
.9
.1
1.6
.6
.9
.1
1.4
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
5.3
.2
2.4
2.8
4.4
.1
2.3
2.0
4.3
.2
2.2
1.9
4.3
.3
2.2
1.8
4.6
.2
2.4
1.9
4.2
.1
2.2
1.8
4.0
.3
2.0
1.7
4.0
.3
2.0
1.7
3.4
.1
1.9
1.4
3.2
.1
1.7
1.4
3.1
.1
1.6
1.3
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama62
Lebanon
63
Hong Kong
64
Singapore
65
Others 6
68.9
21.7
.9
12.2
4.2
5.8
.1
13.8
10.3
.0
65.6
21.5
.9
11.8
3.4
6.7
.1
11.4
9.8
.0
63.2
20.1
.7
12.3
3.3
5.5
.1
11.4
9.9
.0
63.9
21.1
.9
12.1
3.2
5.4
.1
11.4
9.7
.0
58.8
16.6
.8
12.3
2.3
6.1
.0
11.4
9.4
.0
65.4
21.4
.7
13.4
2.3
6.0
.1
11.5
9.9
.0
60.lr
21.5
.7
11.3
2.3
4.4 r
.1
11.5
8.4
.0
56.3 r
17.3
.5
13.0
2.3
4.2 r
.1
9.5
9.3
.0
61.(T
20.0
.4
13.2
1.9
5.1 r
.1
10.5
9.7
.0
64.2'
22.5
.7
14.5
1.8
4.1 r
.1
11.2
9.3
.0
65.4 r
23.8 r
.8
13. Y
1.7
5.5
.1
11.5
8.8
.0
66 Miscellaneous and unallocated 7
16.8
17.3
16.9
16.9
17.3
16.9
16.3 r
16.6 r
17. C
19.6 r
IS.C
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. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or
another foreign branch of the same banking institution. The data in this table
combine foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the
claims of U.S. offices in table 3.18 (excluding those held by agencies and branches
of foreign banks and those constituting claims on own foreign branches).
2. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for " s h e l l " branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
3. Besides the Organization of Petroleum Exporting Countries shown individually, this group includes other members of O P E C (Algeria, Gabon, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well
as Bahrain and Oman (nor formally members of OPEC).
4. Excludes Liberia.
5. Includes Canal Zone beginning December 1979.
6. Foreign branch claims only.
7. Includes N e w Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
3.22
Data
A63
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States1
Millions of dollars, end of period
1987
1986
Type, and area or country
1984
1983
1985
Mar.
June
Sept.
Dec.
Mar.
1 Total
25,346
29,357
27,685
26,346
24,848
25,183
25,385
25,580
2 Payable in dollars
3 Payable in foreign currencies
22,233
3,113
26,389
2,968
24,296
3,389
22,589
3,757
21,162
3,686
21,240
3,943
21,541
3,844
20,028
5,551
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
10,572
8,700
1,872
14,509
12,553
1,955
13,460
11,257
2,203
13,017
10,750
2,267
11,728
9,637
2,091
12,285
9,908
2,376
12,134
9,694
2,440
12,686
9,983
2,703
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities . .
14,774
7,765
7,009
14,849
7,005
7,843
14,225
6,685
7,540
13,329
5,618
7,711
13,120
5,472
7,648
12,899
5,723
7,175
13,250
6,289
6,961
12.894
6,072
6,822
13,533
1,241
13,836
1,013
13,039
1,186
11,839
1,490
11,525
1,595
11,331
1,567
11,847
1,404
10,046
2,848
5,742
302
843
502
621
486
2,839
6,728
471
995
489
590
569
3,297
7,560
329
857
434
745
620
4,254
7,456
440
851
388
630
636
4,167
7,046
390
686
280
635
505
4,252
7,678
424
501
319
708
636
4,660
7,891
245
737
372
701
714
4,830
7,929
205
702
368
690
817
4.886
764
863
839
832
367
362
402
431
10
11
12
13
14
15
16
17
18
19
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,596
751
13
32
1,041
213
124
5,086
1,926
13
35
2,103
367
137
3,184
1,123
4
29
1,843
15
3
2,810
958
4
26
1,639
20
3
2,463
874
14
27
1,406
30
3
2,283
863
4
28
1,270
18
5
1,969
621
4
32
1,160
22
3
2,366
668
0
26
1,544
30
3
27
28
29
Asia
Japan
Middle East oil-exporting countries- .
1,424
991
170
1,777
1,209
155
1,815
1,198
82
1,874
1,267
78
1,735
1,264
43
1,881
1,446
3
1,792
1,377
8
1.869
1,459
7
30
Africa
19
0
14
0
12
0
12
0
12
0
4
2
1
1
3
1
27
41
50
32
104
76
79
88
3,245
62
437
427
268
241
732
4,001
48
438
622
245
257
1,095
4,074
62
453
607
364
379
976
3,925
66
382
546
545
261
957
3,817
58
358
561
586
284
864
4,367
75
370
637
613
361
1,104
4,420
99
338
693
493
384
1,279
4,454
85
281
602
374
483
1,320
31
32
33
34
35
36
37
38
39
40
Oil-exporting countries 3
All other 4
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
1,841
1,975
1,449
1,445
1,367
1,312
1,386
1,350
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,473
1
67
44
6
585
432
1,871
7
114
124
32
586
636
1,088
12
77
58
44
430
212
1,107
26
218
64
7
256
364
1,242
10
294
45
35
235
488
846
37
172
43
45
197
207
850
19
132
59
48
210
215
1,165
28
294
81
88
182
316
48
49
50
Asia
Japan
Middle East oil-exporting countries 2 -
6,741
1,247
4,178
5,285
1,256
2,372
6,046
1,799
2,829
5,384
2,039
2,171
5,075
2,100
1,787
4,807
2,136
1,492
5,011
2,046
1,666
4,931
2,443
1,175
51
52
Africa
Oil-exporting countries 3
553
167
588
233
587
238
486
148
567
215
585
176
619
197
520
170
53
All other 4
921
1,128
982
983
1,053
982
963
475
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A64
3.23
International Statistics • October 1987
CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1986
Type, and area or country
1984
1983
1987
1985
Mar.
June
Sept.
Dec.
Mar.
1 Total
34,911
29,901
28,760
31,404
33,869
33,879
32,839
34,492
2 Payable in dollars
3 Payable in foreign currencies
31,815
3,096
27.304
2,597
26,457
2,302
29.217
2,187
31,687
2,182
31,186
2,693
30,245
2,594
31,426
3,067
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
Other financial claims
8
9
Payable in dollars
10
Payable in foreign currencies
23,780
18,496
17,993
503
5,284
3,328
1,956
19,254
14,621
14,202
420
4,633
3,190
1,442
18,774
15,526
14,911
615
3,248
2,213
1,035
22,017
18,633
18,176
457
3,384
2,291
1,093
24,726
21,418
20,863
555
3.308
2,287
1,021
24,666
19,262
18,698
564
5,404
4,042
1,362
23,251
18,167
17,614
553
5,083
3,799
1,284
24,063
18,239
17,491
748
5,824
4,481
1,343
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims
11,131
9,721
1,410
10,646
9,177
1,470
9,986
8,696
1,290
9,387
8,087
1,300
9,142
7,802
1,341
9.213
8,030
1,183
9,588
8,442
1,146
10,429
9,407
1,022
14
15
10,494
637
9,912
735
9,333
652
8,750
637
8,537
606
8,445
767
8,832
756
9,453
976
6,488
37
150
163
71
38
5,817
5,762
15
126
224
66
66
4,864
6,812
10
184
223
61
74
6,007
7,204
10
217
174
61
166
6,331
10,155
11
257
148
17
177
9,328
10,452
67
418
129
44
138
9,429
8,656
41
131
91
87
134
7,925
9,265
15
167
140
70
74
8,437
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
23
Canada
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
5,989
3,988
3,260
4,020
4,429
3,956
4,056
3.828
10,234
4,771
102
53
4.206
293
134
8,216
3,306
6
100
4,043
215
125
7,846
2,698
6
78
4,571
180
48
10,073
3,516
2
77
6,034
178
43
9,258
3,315
17
75
5,402
176
42
9,353
2,884
19
105
5,949
173
40
9,110
2,539
13
67
6,057
173
24
9,521
3,945
3
72
5,099
164
23
31
32
33
Asia
Japan
Middle East oil-exporting countries"
764
297
4
961
353
13
731
475
4
619
350
2
776
499
2
740
390
2
1,317
986
11
1,220
957
11
34
35
Africa
Oil-exporting countries 3
147
55
210
85
103
29
87
27
89
25
84
18
85
28
84
19
36
All other 4
159
117
21
14
20
81
27
145
3,670
135
459
349
334
317
809
3,801
165
440
374
335
271
1,063
3,533
175
426
346
284
284
898
3,390
148
384
399
221
247
795
3,304
131
391
418
230
228
674
3,385
126
415
401
184
233
853
3,520
127
387
428
199
213
820
3,618
143
418
454
163
195
1016
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
829
1,021
1,023
1,061
965
950
909
1,821
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2.695
8
190
493
7
884
272
2,052
8
115
214
7
583
206
1,753
13
93
206
6
510
157
1,592
27
82
217
7
388
172
1,611
24
148
193
29
323
181
1,687
29
132
207
23
316
192
1,861
29
158
229
55
388
219
1,704
11
127
211
22
415
157
52
53
54
Asia
Japan
Middle East oil-exporting countries"
3,063
1,114
737
3,073
1,191
668
2,982
1,016
638
2,609
801
630
2,574
845
622
2,487
792
600
2,619
840
506
2620
936
466
55
56
Africa
Oil-exporting countries
588
139
470
134
437
130
491
167
450
170
469
168
464
134
425
141
57
All other 4
286
229
257
244
237
234
215
241
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
3.24
A65
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
Transactions, and area or country
1985
1987
1986
Jan.June
Dec.
1987
1986
Jan.
Feb.
Mar.
Apr.
May
June''
23,066
18,003
20,704
17,392''
19,603
15,952
18,682
17,054
U.S. corporate securities
STOCKS
81,995
77,054
Foreign purchases
2 Foreign sales
1
148,090
129,382
120,387
101,963
14,096
12,320
17,628
15,964
20,704
17,599
3 Net purchases, or sales ( - )
4,941
18,708
18,424
1,776
1,664
3,105
5,063
3,312
3,651
1,628
4 Foreign countries
4,857
18,916
18,585
1,696
1,744
3,204
5,026
3,250
3,687
1,673
2,057
-438
730
-123
-75
1,665
356
1,718
238
296
24
168
9,559
459
341
936
1,560
4,826
807
3,029
976
3,876
297
373
7,862
1,804
-41
689
829
3,953
387
1,671
-365
8,367
90
572
557
113
24
14
47
363
102
220
267
450
17
84
1,061
140
62
53
101
647
100
308
136
91
-1
49
1,786
446
16
91
100
996
-118
331
-175
1,153
15
212
1,841
656
19
69
177
783
343
372
-230
2,638
1
61
1,027''
332
-101
124
306
181
252''
36
21
1,790
59
65
1,478
123
118
120
351
675
48
334
-90
1,686
45
185
669
107
-155
232
-206
671
-238
290
-26
1,009
-30
-1
84
-208
-161
80
-80
-100
37
-36
-45
18 Foreign purchases
19 Foreign sales
86,587
42,455
122,953
72,499
58,099
42,174
11,879
7,741
9,308
7,180
8,021
5,457
12,117
8,281
9,873''
6.559
8,963
6,823
9,817
7,874
20 Net purchases, or sales (—)
44,132
50,454
15,925
4,138
2,127
2,565
3,836
3.314'
2,140
1,943
21 Foreign countries
44,227
49,607
15,662
4,242
2,216
2,179
3,994
3,138'
2,270
1,866
40,047
210
2,001
222
3.987
32,762
190
498
-2,648
6,091
11
38
39,126
389
-251
387
4,529
33,706
548
1,468
-2,961
11,270
16
139
13,022
133
60
154
1,039
11,580
683
639
-215
1,565
21
-53
3,065
32
-19
52
-117
2,761
153
102
-258
1,174
3
3
1,372
6
-213
-7
66
1,389
-103
103
-57
917
0
-16
1,402
17
145
-29
78
1,178
364
98
-139
469
1
-16
3,600
81
198
69
558
2,931
190
65
-12
169
3
-22
2,864 r
-22
-121
47
50
2,839'
161
123
62
-73
1
0
1,682
7
-29
38
182
1,544
23
254
59
252
7
-6
2,103
43
80
37
105
1.698
49
-4
-128
-169
8
8
-95
847
263
-104
-88
386
-157
176
-130
77
5
6
7
8
9
10
11
17
13
14
15
16
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Africa
Other countries
17 Nonmonetary international and
regional organizations
BONDS
7?
73
74
75
76
77
78
79
30
31
37
33
62
2
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
Foreign securities
35 Stocks, net purchases, or sales ( - )
36
Foreign purchases
37
Foreign sales
-3,941
20,861
24,803
-1,912
48,787
50,699
-2,178
43,000
45,177
63
4,570
4,507
-204
4,906
5,110
-561
7,175
7,736
-708
7,015
7,722
-1,160"
7,120
8,280'
669
8,014
7,345
-214
8,770
8,984
38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
Foreign sales
40
-3,999
81,216
85,214
-3,361
166,781
170,142
-94
108,620
108,714
-487
16,332
16,818
319
11,427
11,108
-70
15,822
15,891
-545
16,650
17,195
-579'
19,012
19,591'
-1,108
20,035
21,143
1,890
25,675
23,785
— 1,11*9- 4 3 9
1,676
1,874'
-457
2,028
-682
-202
-416
306
-1
-524
-2,682'
-3
259
636
8
-91
-1,952
-414
204
1,690
20
-6
8
-526
121
2,533
6
-112
267
135
18
-353
41 Net purchases, o r sales ( - ) , of stocks and bonds . . . .
-7,940
-5,273
-2,272
-424
114
-631
-1,253
42 Foreign countries
-9,003
-6,357
-2,560
-873
-27
-711
-1,520
43
44
45
46
47
48
-9,887
-1,686
1,797
659
75
38
-17,893
-875
3,479
10,858
52
-1,977
-6,753
-2,106
661
6,257
37
-655
-1,401
-264
233
1,465
3
-909
-226
-3%
389
168
4
34
-1,219
-566
104
925
0
45
1,063
1,084
288
449
142
80
Europe
Canada
Latin America and Caribbean
Africa
Other countries
49 Nonmonetary international and
regional organizations
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities, and securities of U.S.
government agencies and corporations. Also includes issues of new debt securi-
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
A66
3.25
International Statistics • October 1987
MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
Country or area
1985
1987
1986
Jan.June
Dec.
1987
1986
Jan.
Feb.
Mar.
Apr.
May
June''
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total -
29,208
20,061
16,399
1,006
-436
961
7,028
-2,990
-248
12,084
2 Foreign countries -
28,768
21,164
17,323
-474
580
1,846
4,145
-1,405
3,731
8,426
3 Europe"
4
Belgium-Luxembourg
5
Germany"
6
Netherlands
7
Sweden
8
Switzerland 2
9
United Kingdom
10
Other Western Europe
11
Eastern Europe
12 Canada
4,303
476
1,917
269
976
773
-1,810
1,701
0
-188
16,866
349
7,531
1,283
132
310
4,648
2,613
0
881
14,403
263
7,637
-95
228
3,680
509
2,218
-36
2,290
1,016
75
-487
-58
-236
-428
1,036
1,114
0
297
1,376
59
581
-366
-229
-135
1,227
236
3
846
1,751
211
1,118
41
440
473
-15
-518
0
-416
5,832
-35
2,141
-212
334
1,641
328
1,635
0
709
375
-35
1,106
-22
32
652
-1,089
-230
-40
703
1,695
4
1,417
352
-166
413
-524
198
1
37
3,374
58
1,274
111
-183
636
582
896
0
413
13 Latin America and Caribbean
14
Venezuela
15
Other Latin America and Caribbean
16
Netherlands Antilles
17 Asia
18
Japan
19
20 All other
4,315
248
2,336
1,731
19,919
17,909
112
308
875
-95
1,128
-159
1,341
-77
-54
1,255
-987
96
-1,219
135
757
315
-32
892
%
29
95
-28
-2,067
-2,086
-14
198
-1,006
-33
-445
-528
-922
-76
6
280
-290
18
373
-682
1,231
1,767
-34
-396
-62
102
-156
-8
-2,378
-2,457
12
32
-30
14
-176
133
-2,880
-2,561
-15
442
-381
11
-302
-90
2,136
-541
11
233
782
-17
-512
1,311
3,570
4,183
-13
300
442
-436
18
-1,105
-1,430
157
-924
-49
13
1,478
1,412
0
-1,016
-1,070
0
-885
-886
0
2,883
2,833
11
-1,585
— 1,347
0
-3,980
-3,114
0
3,659
3,535
3
28,768
8,135
20,631
21,164
14,380
6,787
17,323
18,653
-1,331
-474
309
-782
580
1,498
-918
1,846
834
1,012
4,145
5,837
-1,691
-1,405
2,489''
-3,894'
3,731
4,447
-715
8,426
3,550
4,875
-1,547
7
-1,473
5
-1,797
20
-21
0
-721
1
-962
1
226
17
636
0
-857
1
21 Nonmonetary international and regional organizations
International
22
23
Latin American regional
Memo
24 Foreign countries 2
25
Official institutions
Other foreign'
26
77
28
Oil-exporting countries
Middle East 3
Africa 4
1. Estimated official and private transactions in marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based on
monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
2. Includes U.S. Treasury notes publicly issued to private foreign residents
denominated in foreign currencies.
-120
0
3. Comprises Bahrain, Iran, Iraq, Kuwait, O m a n , Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria,
Interest and Exchange Rates
A67
3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Rate on July 31, 1987
Rate on July 31, 1987
Percent
Month
effective
3.5
7.25
49.0
9.22
7.0
Jan. 1987
July 1987
Mar. 1981
July 1987
Oct. 1983
Austria..
Belgium .
Brazil . . .
Canada..
Denmark
Country
Month
effective
Month
effective
France
Germany, Fed. Rep. o f .
Italy
Japan
Netherlands
1. As of the end of F e o - jary 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 either discounts
3.27
Rate on July 31, 1987
Country
Country
7.5
3.5
11.5
2.5
4.5
July 1987
Mar. 1986
Mar. 1987
Feb. 1987
Mar. 1986
Norway
Switzerland . . . . _ .
United Kingdom"
Venezuela
8.0
3.5
June 1983
Jan. 1987
Oct. 1985
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.
FOREIGN SHORT-TERM INTEREST RATES
Percent per annum, averages of daily figures
1987
Country, or type
1
2
3
4
5
6
7
8
9
10
1984
1985
1986
Jan.
Feb.
Mar.
Apr.
May
June
July
Eurodollars
United Kingdom
Canada
Germany
Switzerland
10.75
9.91
11.29
5.96
4.35
8.27
12.16
9.64
5.40
4.92
6.70
10.87
9.18
4.58
4.19
6.10
10.98
7.95
4.45
3.63
6.32
10.79
7.44
3.94
3.58
6.37
9.90
7.14
3.97
3.93
6.73
9.72
7.62
3.85
3.65
7.25
8.79
8.22
3.73
3.63
7.11
8.85
8.40
3.67
3.77
6.87
9.17
8.61
3.83
3.60
Netherlands
France
Italy
Belgium
Japan
6.08
11.66
17.08
11.41
6.32
6.29
9.91
14.86
9.60
6.47
5.56
7.68
12.60
8.04
4.96
5.58
8.49
11.39
7.88
4.23
5.31
8.36
11.13
7.75
3.98
5.38
7.85
10.65
7.49
4.00
5.31
7.87
10.03
7.21
3.92
5.11
8.09
10.15
7.13
3.77
5.15
8.18
10.67
6.78
3.71
5.21
7.83
10.92
6.54
3.74
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A68
3.28
International Statistics • October 1987
FOREIGN EXCHANGE RATES
Currency units per dollar
1987
Country/currency
1
2
3
4
5
6
7
Australia/dollar
Austria/schilling
Belgium/franc
Brazil/cruzeiro
Canada/dollar
China, P.R./yuan
Denmark/krone
8
9
10
11
12
13
14
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/pound 1
15
16
17
18
19
20
31
Italy/lira
Japan/yen
Malay sia/ringgit
Netherlands/guilder
N e w Zealand/dollar 1
Norway/krone
Portugal/escudo
22
23
24
25
26
27
28
29
30
31
Singapore/dollar
South Africa/rand 1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/point 1
1984
1985
1986
Feb.
Mar.
Apr.
May
June
July
87.937
20.005
57.749
1841.50
1.2953
2.3308
10.354
70.026
20.676
59.336
6205.10
1.3658
2.9434
10.598
67.093
15.260
44.662
13.051
1.3896
3.4615
8.0954
66.77
12.833
37.789
18.08
1.3340
3.7314
6.8939
68.17
12.905
38.029
20.56
1.3194
3.7314
6.9166
71.19
12.739
35.562
22.59
1.3183
3.7314
6.8388
71.42
12.574
37.091
n.a.
1.3411
3.7314
6.7333
71.79
12.793
37.712
n.a.
1.338
3.7314
6.8555
70.79
12.996
38.329
n.a.
1.3262
3.7314
7.0179
6.0007
8.7355
2.8454
112.73
7.8188
11.348
108.64
6.1971
8.9799
2.9419
138.40
7.7911
12.332
106.62
5.0721
6.9256
2.1704
139.93
7.8037
12.597
134.14
4.5556
6.0760
1.8239
133.88
7.7952
13.062
145.93
4.5102
6.1091
1.8355
134.68
7.8017
12.924
145.54
4.4227
6.0332
1.8125
133.502
7.8023
12.8224
147.49
4.3604
5.9748
1.7881
133.35
7.8049
12.666
149.59
4.4281
6.0739
1.8189
136.06
7.8080
12.837
147.25
4.4882
6.1530
1.8482
139.313
7.8090
13.01
144.99
1756.10
237.45
2.3448
3.2083
57.837
8.1596
147.70
1908.90
238.47
2.4806
3.3184
49.752
8.5933
172.07
1491.16
168.35
2.5830
2.4484
52.456
7.3984
149.80
1297.74
153.41
2.5418
2.0592
54.815
7.0067
141.62
1305.90
151.43
2.5230
2.0731
56.333
6.9335
141.48
1292.96
143.00
2.4861
2.0447
57.751
6.7781
140.339
1290.80
140.48
2.4759
2.0154
57.639
6.6632
139.18
1316.50
144.55
2.5078
2.0490
58.686
6.7147
142.12
1337.96
150.29
2.5414
2.0814
59.644
6.7632
144.51
2.1325
69.534
807.91
160.78
25.428
8.2706
2.3500
39.633
23.582
133.66
2.2008
45.57
861.89
169.98
27.187
8.6031
2.4551
39.889
27.193
129.74
2.1782
43.952
884.61
140.04
27.933
7.1272
1.7979
37.837
26.314
146.77
2.1410
47.97
857.38
128.62
28.662
6.5016
1.5403
35.056
25.933
152.80
2.1418
48.21
856.11
128.86
28.823
6.4202
1.5391
34.681
25.881
159.23
2.1350
49.55
845.00
126.975
28.902
6.3210
1.4968
33.863
25.695
162.99
2.1202
49.87
832.53
125.28
28.988
6.2606
1.4705
32.354
25.629
166.66
2.1176
49.41
818.39
126.33
29.171
6.3482
1.5085
31.226
25.779
162.88
2.1183
48.52
811.81
126.97
29.405
6.4466
1.5365
31.114
26.041
160.90
138.19
143.01
112.22
99.46
98.99
97.09
96.05
MEMO
32 United S t a t e s / d o l l a r
1. Value in U.S. cents.
2. Index of weighted-average exchange value of U.S. dollar against the
currencies of 10 industrial countries. The weight for each of the 10 countries is the
1972-76 average world trade of that country divided by the average world trade of
all 10 countries combined. Series revised as of August 1978 (see FEDERAL
RESERVE B U L L E T I N , v o l . 6 4 , A u g u s t 1978, p . 700).
97.78
99.36
3. Currency reform.
NOTE. Averages of certified noon buying rates in N e w York for cable transfers.
Data in this table also appear in the B o a r d ' s G.5 (405) release. For address, see
inside front cover.
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
Issue
Anticipated schedule of release dates for periodic releases
SPECIAL
June 1987
Page
A89
TABLES
Published Irregularly, with Latest Bulletin Reference
Assets
Assets
Assets
Assets
Assets
Assets
Assets
Assets
Terms
Terms
Terms
Terms
and liabilities of commercial banks, June 30, 1986
and liabilities of commercial banks, September 30, 1986
and liabilities of commercial banks, December 31, 1986
and liabilities of commercial banks, March 31, 1987
and liabilities of U.S. branches and agencies of foreign banks,
and liabilities of U.S. branches and agencies of foreign banks,
and liabilities of U.S. branches and agencies of foreign banks,
and liabilities of U.S. branches and agencies of foreign banks,
of lending at commercial banks, August 1986
of lending at commercial banks, November 1986
of lending at commercial banks, February 1987
of lending at commercial banks, May 1987
Special tables begin on next page.
June 30, 1986
September 30, 1986
December 31, 1986
March 31, 1987
June
July
July
October
December
March
May
August
December
February
May
September
1987
1987
1987
1987
1986
1987
1987
1987
1986
1987
1987
1987
A76
A70
A76
A70
A76
A70
A76
A70
A70
A70
A70
A70
A70
4.20
Special Tables • October 1987
DOMESTIC AND FOREIGN OFFICES, Insured Commercial Bank Assets and Liabilities1-2
Consolidated Report of Condition, March 31, 1987
Millions of dollars
Banks with domestic
offices only 8
Banks with foreign offices 5 ' 7
Item
Total
Total
1 Total assets 6
2 Cash and balances due f r o m depository institutions
Cash items in process of collection, unposted debits, and currency
3
4
Cash items in process of collection and unposted debits and coin
5
Currency and coin
6
Balances due from depository institutions in the United States
7
Balances due f r o m banks in foreign countries and foreign central banks
8
Balances due f r o m Federal Reserve Banks
Foreign
Domestic
Over 100
2,854,973
1,658,818
437,454
1,272,207
787,964
408,190
342,568
239,943
79,405
n.a.
n.a.
34,989
100,977
24,571
119,162
1,682
n.a.
n.a.
20,595
96,778
107
120,781
77,723
67,061
10,662
14,394
4,199
24,465
66,915
26,163
18,223
7,941
23,141
5,887
11,724
35,710
f
1
n.a.
1
MEMO
9
Noninterest-bearing balances due from commercial banks in the United
States (included in balances due from depository institutions in the U.S.)
10 Total securities, loans and lease financing receivables, net
11 Total securities, book value
12
U.S. Treasury securities and U.S. government agency and corporation
obligations
13
U.S. Treasury securities
14
U.S. government agency and corporation obligations
15
All holdings of U.S. government-issued or guaranteed certificates of
participation in pools of residential mortgages
16
All other
17
Securities issued by states and political subdivisions in the United States
18
Taxable
19
Tax-exempt
20
Other securities
22
23
">4
25
26
27
28
29
30
31
All holdings of private certificates of participation in pools of
residential mortgages
All other
Federal funds sold and securities purchased under agreements to resell
Total loans and lease financing receivables, gross
LESS: Unearned income on loans
Total loans and leases (net of unearned income)
LESS: Allowance for loan and lease losses
LESS: Allocated transfer risk reserves
EQUALS: Total loans and leases, net
Total loans, gross, by category
32 Loans secured by real estate
33
Construction and land development
34
Farmland
35
1 4 family residential properties
36
Multifamily (5 or more) residential properties
37
N o n f a r m nonresidential properties
38 Loans to depository institutions
39
T o commercial banks in the United States
40
To other depository institutions in the United States
41
T o banks in foreign countries
42
43
44
45
46
47
48
49
L o a n s to finance agricultural production and other loans to farmers
Commercial and industrial loans
T o U.S. addressees (domicile)
T o non-U.S. addressees (domicile)
Acceptances of other banks
U.S. banks
Foreign banks
Loans to individuals for household, family and other personal expenditures
(includes purchased paper)
50
Credit cards and related plans
51
Other (includes single payment and installment)
52 Obligations (other than securities) of states and political subdivisions in the U.S.
(includes nonrated industrial development obligations)
53
Taxable
54
Tax-exempt
5 5 All other loans
56
Loans to foreign governments and official institutions
57
Other loans
58
L o a n s for purchasing and carrying securities
All other loans
59
60
61
62
63
64
65
66
67
68
Lease financing receivables
Assets held in trading accounts
Premises and fixed assets (including capitalized leases)
Other real estate owned
Investments in unconsolidated subsidiaries and associated companies
C u s t o m e r s ' liability on acceptances outstanding
Net due f r o m own foreign offices, Edge and Agreement subsidiaries and IBFs . . .
Intangible assets
Other assets
U n d e r 100
1
k
1
n.a.
1
\
14,064
12,144
687,912
354,586
165,518
171,166
117,969
99,004
59,768
39,237
105,147
63,875
41,272
12,152
n.a.
n.a.
129
33
801
0
801
25,115
881
30,389
8,848
53,021
248
52,773
13,492
11,879
16,446
24,826
49,355
907
48,447
16,664
16,327
12,152
n.a.
27,540
1,014
26,526
7,714
3,326
9,434
25,848
0
881
24,234
3,326
8,553
1,613
2,011
14,315
337
957
6,757
127,232
1,725,937
15,165
1,710,772
29,008
107
1,681,656
52,467
1,028,111
6,733
1,021,377
18,213
106
1,003,059
233
228,871
2,231
226,638
n.a.
n.a.
n.a.
52,234
799,240
4,502
794,739
n.a.
n.a.
n.a.
43,407
486,576
5,779
480,797
7,458
0
473,339
31,358
211,249
2,653
208,597
3,337
1
205,259
524,036
n.a.
n.a.
n.a.
n.a.
n.a.
67,293
n.a.
n.a.
n.a.
247,650
n.a.
n.a.
n.a.
n.a.
n.a.
60,224
22,157
4,635
33,433
16,727
n.a.
n.a.
n.a.
n.a.
n.a.
30,082
1,161
222
28,700
230,923
73,802
1,482
87,163
8,265
60,211
30,142
20,996
4,414
4,733
184,488
28,969
3,685
85,862
5,677
60,295
6,262
5,169
792
301
91,898
7,681
8,048
49,951
1,934
24,284
806
n.a.
n.a.
n.a.
29,151
581,472
n.a.
n.a.
2,688
n.a.
n.a.
5,328
404,886
303,077
101,809
1,015
289
725
391
113,802
15,886
97,917
375
23
352
4,937
291,084
287,191
3,892
640
267
374
6,310
128,004
127,392
612
922
n.a.
n.a.
17,513
48,583
n.a.
n.a.
751
n.a.
n.a.
313,506
78,702
234,803
140,321
42,492
97,829
11,846
n.a.
n.a.
128,474
n.a.
n.a.
127,282
34,264
93,018
45,903
1,947
43,956
58,075
2,569
55,505
122,076
n.a.
n.a.
n.a.
n.a.
36,189
452
35,737
109,419
39,160
70,260
n.a.
n.a.
597
0
597
50,456
35,986
14,470
n.a.
n.a.
35,592
452
35,140
58,963
3,173
55,790
15,613
40,177
19,242
1,844
17,398
10,056
240
9,815
2,018
7,797
2,644
273
2,370
2,602
n.a.
n.a.
n.a.
n.a.
27,639
43,024
42,708
9,742
2,531
40,817
n.a.
4,073
79,396
23,078
41,593
21,774
3,916
1,861
40,347
n.a.
2,705
59,064
4,594
18,603
1
t
1
n.a.
18,484
22,990
n.a.
n.a.
n.a.
n.a.
40,294
n.a.
n.a.
4,011
1,035
13,586
3,155
621
449
n.a.
1,215
13,077
550
396
7,348
2,671
49
22
n.a.
153
7,255
n.a.
9,387
n.a.
n.a.
192,091
26,573
99,661
60,263
39,399
657
495
162
59,117
n.a.
130,717
2,170
128,547
62,986
n.a.
30,518
8,881
53,822
248
53,574
38,608
12,760
6,294
30,506
T
n.a.
2,290,114
1,247,617
481,226
216,961
n.a.
n.a.
1
I
T
Commercial Banks
4.20
Continued
Banks with domestic
offices only 5
Banks with foreign offices 3 4
Item
Total
Total
Foreign
67 Total liabilities, limited-life preferred stock and equity capital
2,854,973
1,658,818
68 Total liabilities 7
69
Limited-life preferred stock
2,671,722
1,566,497
81
64
70
71
72
73
74
75
76
77
78
79
2,204,632
1,183,218
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and official checks
All other 8
80 Total transaction accounts
81
Individuals, partnerships, and corporations
82
U.S. government
83
States and political subdivisions in the United States
84
Commercial banks in the United States
85
Other depository institutions in the United States
86
87
Foreign governments and official institutions
88
Certified and official checks
89
All other
90 Demand deposits (included in total transaction accounts)
91
Individuals, partnerships, and corporations
92
U.S. government
93
States and political subdivisions in the United States
94
Commercial banks in the United States
Other depository institutions in the United States
95
Banks in foreign countries
%
97
Foreign governments and official institutions
98
Certified and official checks
99
All other
100 Total nontransaction accounts
Individuals, partnerships, and corporations
101
102
U.S. government
103
States and political subdivisions in the United States
104
Commercial banks in the United States
U.S. branches and agencies of foreign banks
105
106
Other commercial banks in the United States
Other depository institutions in the United States
107
108
Banks in foreign countries
109
Foreign branches of other U.S. banks
110
Other banks in foreign countries
Foreign governments and official institutions
111
112
All other
113
114
115
116
117
118
119
120
A71
Federal funds purchased and securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury
Other borrowed money
Banks liability on acceptances executed and outstanding
Notes and debentures subordinated to deposits
Net due to own foreign offices, Edge and Agreement subsidiaries and IBFs
All other liabilities
Total equity capital 9
n a.
r
20,075
n.a.
n.a.
n.a.
436,988
n.a.
1,180,351
n.a.
n.a.
331,796
184,059
n.a.
n.a.
30,905
12,461
n .a.
29,104
627
118,006
r
n.a.
Domestic
n a.
Over 100
Under 100
787,964
408,190
731,922
373,303
15
1
851,423
750,876
2,048
35,804
36,526
4,589
7,943
1,801
11,834
656,504
594,489
1,499
40,255
11,806
3,048
192
174
5,044
364,910
332,399
632
26,173
1,788
1,310
n.a.
n.a.
2,571
37
311,518
252,313
1,366
6,837
26,766
4,061
7,245
1,094
11,834
197,031
173,706
1,042
8,435
6,936
1,779
81
8
5,044
98,958
88,563
464
6,452
409
486
n.a.
n.a.
2,571
13
249,336
191,505
1,362
5,471
26,766
4,060
7,245
1,092
11,834
128,945
109,540
1,004
4,565
6,931
1,769
81
7
5,044
539,904
498,563
683
28,967
9,760
884
8,876
527
698
11
687
707
459,473
420,783
457
31,820
4,870
717
4,153
1,270
111
88
23
166
54,962
48,608
446
2,440
408
476
n.a.
n.a.
2,571
13
265,952
243,836
168
19,721
1,379
n.a.
n.a.
825
n.a.
n.a.
n.a.
n.a.
24
n.a.
n.a.
n a.
243,619
n a.
91,959
40,993
17,158
n a.
67,590
183,170
196,401
n.a.
74,274
40,527
14,594
n a.
53,167
92,257
481
n.a.
31,351
9,123
n.a.
n a.
n a.
n.a.
195,920
4,315
42,923
31,404
n.a.
10,549
n.a.
n.a.
44,412
1,241
16,908
445
2,200
n.a.
10,213
56,026
2,806
215
777
21
364
n.a.
4,210
34,886
1,896
1,463
434
30,196
23,615
5,259
977
1,097
30,163
3,627
2,084
1,151
n.a.
15,250
611
460
388
MEMO
121 Holdings of commercial paper included in total loans, gross
122 Total individual retirement accounts (IRA) and Keogh plan accounts
123
124 Total brokered retail deposits
125
Issued in denominations of $100,000 or less
126
Issued in denominations greater than $100,000 and participated out by the
broker in shares of $100,000 or less
Savings deposits
127
Money market deposit accounts (MMDAs)
Other savings deposits (excluding MMDAs)
128
129 Total time deposits of less than $100,000
130 Time certificates of deposit of $100,000 or more
131 Open-account time deposits of $100,000 or more
132 All NOW accounts (including Super NOW)
133 Total time and savings deposits
n.a.
n.a.
Quarterly averages
134
135 Obligations (other than securities) of states and political subdivisions
in the United States
136 Transaction accounts in domestic offices (NOW accounts, ATS accounts and
telephone and preauthorized transfer accounts
Nontransaction accounts in domestic offices
137
Money market deposit accounts (MMDAs)
138
139
Time certificates of deposit of $100,000 or more
140
All other time deposits
141 Number of banks
Footnotes appear at the end of table 4.22
13,895
256
n.a.
4,282
933
73
175,087
67,867
127,778
141,468
27,704
57,940
602,087
136,438
65,623
169
84,131
4,150
64,780
527,559
59,376
33,524
128,372
43,100
1,580
41,941
309,948
783,635
472,859
206,357
36,178
18,889
n.a.
82,974
69,608
44,349
175,918
63,446
140,257
154,781
136,959
64,349
83,697
175,255
59,264
32,850
42,851
130,863
2,378
11,261
n.a.
A72
4.21
Special Tables • October 1987
DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices'-2 3
Consolidated Report of Condition, March 31, 1987
Millions of dollars
Members
Item
Total
1 Total assets 6
2 Cash and balances due f r o m depository institutions
3
Cash items in process of collection and unposted debits
4
Currency and coin
5
Balances due from depository institutions in the United States
6
Balances due from banks in foreign countries and foreign central banks
7
Balances due f r o m Federal Reserve Banks
8 Total securities, loans and lease financing receivables, (net of unearned income)
9 Total securities, book value
10
U.S. Treasury securities
11
U . S . government agency and corporation obligations
12
All holdings of U . S . government-issued or guaranteed certificates of
participation in pools of residential mortgages
N
All other
14
Securities issued by states and political subdivisions in the United States
15
16
Tax-exempt
17
Other domestic securities
18
All holdings of private certificates of participation in pools of residential mortgages
19
All other
20
Foreign securities
Nonmembers
Total
National
State
2,060,171
1,677,853
1,315,862
361,991
382,317
187,695
85,284
18,602
37,534
10,086
36,188
158,240
78,608
15,308
25,870
7,756
30,698
123,801
60,603
12,554
21,410
6,049
23,185
34,438
18,005
2,754
4,459
1,708
7,513
29,456
6,676
3,294
11,665
2,330
5,491
1,707,861
1,373,253
1,087,832
285,421
334,607
336,684
123,643
80,509
256,597
94,311
60,493
199,862
75,339
49,267
56,735
18,972
11,226
80,087
29,331
20,016
46,835
33,674
102,376
1,156
101,220
28,206
5,337
22,868
1,951
38,676
21,817
80,558
637
79,922
19,573
4,527
15,046
1,662
31,148
18,119
59,304
535
58,769
15,432
2,622
12,810
520
7,528
3,698
21,254
101
21,153
4,140
1,905
2,235
1,142
8,159
11,857
21,818
519
21,298
8,633
810
7,823
289
95,640
79,072
59,215
19,856
16,569
1,285,817
10,281
1,275,536
1,045,363
7,779
1,037,584
834,682
5,928
828,754
210,681
1,851
208,830
240,454
2,502
237,952
415,411
102,771
5,167
173,025
13,941
120,506
26,165
5,206
5,034
11,247
318,351
83,832
3,518
130,504
10,943
89,554
22,593
4,980
4,925
8,971
270,460
68,691
3,102
112,414
9,470
76,783
17,650
3,892
2,932
7,918
47,891
15,141
416
18,089
1,473
12,771
4,944
1,088
1,993
1,053
97,059
18,938
1,650
42,521
2,998
30,952
3,572
226
108
2,276
419,087
414,583
4,504
346,517
342,552
3,965
266,623
263,349
3,274
79,894
79,202
692
72,570
72,031
539
1,563
561
429
1,144
447
336
1,063
406
332
81
41
5
419
114
93
41 Loans to individuals for household, family and other personal expenditures
(includes purchased paper)
42 Loans to foreign governments and official institutions
43 Obligations (other than securities) of states and political subdivisions in the United States . . . .
44
45
Tax-exempt
46
47
L o a n s for purchasing and carrying securities
48
255,756
3,414
54,834
2,296
52,538
65,605
17,631
47,974
208,516
3,254
45,926
1,514
44,411
59,979
16,044
43,935
170,562
2,362
34,264
1,285
32,979
40,939
9,454
31,485
37,955
892
11,662
230
11,432
19,040
6,590
12,450
47,240
160
8,908
782
8,127
5,626
1,587
4,039
49 Lease financing receivables
50 C u s t o m e r s ' liability on acceptances outstanding
51 Net due from own foreign offices, Edge and Agreement subsidiaries and IBFs
52
22,495
30,838
40,294
133,777
20,206
29,884
36,012
116,477
16,017
20,901
26,901
83,328
4,189
8,983
9,111
33,149
2,289
955
4,282
17,300
21 Federal funds sold and securities purchased under agreements to resell
22 Total loans and lease financing receivables, gross
23
LESS: Unearned income on loans
24 Total loans and leases (net of unearned income)
25
26
77
28
29
30
31
32
33
34
Total loans, gross, by category
Loans secured by real estate
Construction and land development
Farmland
1-4 family residential properties
Multifamily (5 or more) residential properties
Nonfarm nonresidential properties
Loans to commercial banks in the United States
Loans to other depository institutions in the United States
Loans to banks in foreign countries
Loans to finance agricultural production and other loans to farmers
35 Commercial and industrial loans
36
To U.S. addressees (domicile)
37
To non-U.S. addressees (domicile)
38 Acceptances of other banks 1 0
39
Of U.S. banks
40
Commercial Banks
4.21
A73
Continued
Members
Item
Nonmembers
Total
Total
National
State
53 Total liabilities and equity capital
2,060,171
1,677,853
1,315,862
361,991
382,317
54 Total liabilities 7
1,912,273
1,557,908
1,223,233
334,675
354,365
55
56
57
58
59
60
61
62
63
1,507,927
1,345,365
3,547
76,059
48,332
7,637
8,135
1,975
16,877
1,190,428
1,057,368
2,893
57,027
43,800
5,896
7,578
1,726
14,142
951,610
850,577
2,509
47,776
32,863
4,353
3,638
763
9,134
238,818
206,790
384
9,251
10,937
1,543
3,940
962
5,008
317,499
287,998
654
19,032
4,532
1,741
557
249
2,736
64 Total transaction accounts
65
Individuals, partnerships, and corporations
66
U.S. government
67
States and political subdivisions in the United States
68
Commercial banks in the United States
69
Other depository institutions in the United States
Banks in foreign countries
70
71
Foreign governments and official institutions
Certified and official checks
72
508,549
426,019
2,408
15,272
33,702
5,840
7,327
1,102
16,877
417,546
343,631
1,971
12,218
32,288
5,162
7,093
1,038
14,142
324,998
272,826
1,666
9,908
23,930
3,723
3,355
456
9,134
92,548
70,805
305
2,310
8,358
1,439
3,738
582
5,008
91,003
82,388
436
3,054
1,414
678
233
64
2,736
73 Demand deposits (included in total transaction accounts)
74
Individuals, partnerships, and corporations
75
76
States and political subdivisions in the United States
77
Commercial banks in the United States
78
Other depository institutions in the United States
79
Banks in foreign countries
Foreign governments and official institutions
80
Certified and official checks
81
378,281
301,045
2,366
10,036
33,697
5,829
7,326
1,099
16,877
317,684
247,598
1,993
8,440
32,284
5,153
7,093
1,037
14,142
241,333
192,260
1,630
6,854
23,926
3,716
3,355
455
9,134
76,351
55,338
303
1,586
8,358
1,436
3,738
582
5,008
60,597
53,447
433
1,596
1,413
676
233
62
2,736
8? Total nontransaction accounts
83
Individuals, partnerships, and corporations
84
U.S. government
85
States and political subdivisions in the United States
Commercial banks in the United States
86
U.S. branches and agencies of foreign banks
87
Other commercial banks in the United States
88
89
Other depository institutions in the United States
Banks in foreign countries
90
91
Foreign branches of other U.S. banks
9?
Other banks in foreign countries
Foreign governments and official institutions
93
999,377
919,346
1,139
60,787
14,631
1,602
13,029
1,797
809
99
710
873
772,882
713,736
922
44,809
11,512
1,039
10,473
734
485
13
472
688
626,612
577,751
842
37,868
8,934
1,002
7,932
630
283
8
275
308
146,270
135,985
80
6,941
2,578
37
2.541
104
202
5
197
380
226,495
205,609
218
15,978
3,118
563
2,555
1,063
324
86
238
185
94
95
%
97
98
99
100
240,332
5,556
59,831
31,849
2,200
10,549
64,579
218,957
5,050
53,374
30,895
1,301
9,792
57,902
165,122
3,575
36,205
21,876
1,154
8,579
43,690
53,835
1,476
17,169
9,019
147
1,213
14,212
21,375
506
6,457
955
898
757
6,676
147,897
119,945
92,629
27,317
27,952
1,530
60,359
27,242
7,342
2,128
1,175
46,749
22,585
5,793
1,267
1,014
38,595
19,355
4,902
1,223
161
8,154
3,230
890
44
355
13,610
4,657
1,550
861
5,215
4,525
3,679
846
689
311,526
133,490
296,909
225,598
31,854
122,720
1,129,646
245,288
103,242
221,741
174,304
28,307
93,958
872,744
198,315
80,611
187,666
141,564
18,456
78,455
710,277
46,973
22,631
34,075
32,740
9,851
15,503
162,467
66,237
30,249
75,168
51,294
3,547
28,762
256,902
1,256,494
55,067
1,022,439
46,305
816,630
34,181
205,809
12,124
234,055
8,762
152,582
121,726
95,860
25,866
30,855
312,877
127,795
223,953
330,036
246,637
98,278
173,543
250,120
199,951
77,200
141,866
206,402
46,686
21,079
31,677
43,718
66,239
29,517
50,410
79,916
2,634
1,511
1,279
232
1,123
Individuals, partnerships, and corporations
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Foreign governments and official institutions
Certified and official checks
Federal funds purchased and securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury
Other borrowed money
Banks liability on acceptances executed and outstanding
Notes and debentures subordinated to deposits
Net due to own foreign offices, Edge and Agreement subsidiaries and IBFs
101 Total equity capital 9
MEMO
10?
103
104
105
106
107
108
109
110
111
11?
113
114
Holdings of commercial paper included in total loans, gross
Total individual retirement accounts (IRA) and Keogh plan accounts
Total brokered deposits
Total brokered retail deposits
Issued in denominations of $100,000 or less
Issued in denominations greater than $100,000 and participated out by the broker in shares
of $100,000 or less
Savings deposits
Money market deposit accounts (MMDAs)
Other savings accounts
Total time deposits of less than $100,000
Time certificates of deposit of $100,000 or more
Open-account time deposits of $100,000 or more
All NOW accounts (including Super NOW accounts)
Total time and savings deposits
Quarterly averages
115
116 Obligations (other than securities) of states and political subdivisions in the United States
117 Transaction accounts (NOW accounts, ATS accounts and telephone preauthorized
transfer accounts)
118
119
170
121
Nontransaction accounts
Money market deposit accounts (MMDAs)
Other savings deposits
Time certificates of deposit of $100,000 or more
All other time deposits
122 Number of banks
Footnotes appear at the end of table 4.22
A74
4.22
Special Tables • October 1987
DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities12-3
Consolidated Report of Condition, March 31, 1987
Millions of dollars
Members
Item
Total
1 Total assets 6
Nonmembers
Total
National
State
2,468,361
1,850,604
1,457,957
392,647
617,757
223,406
22,484
35,594
165,327
174,030
16,976
20,796
136,258
137,132
13,929
17,319
105,884
36,898
3,047
3,476
30,374
49,376
5,508
14,799
29,069
2,065,785
1,524,071
1,211,458
312,613
541,714
454,653
286,867
129,916
2,170
127,746
37,870
6,294
31,576
126,998
1,497,066
12,934
1,484,133
303,743
187,203
91,747
979
90,768
24,793
4,942
19,852
93,692
1,135,588
8,953
1,126,636
238,316
150,777
68,515
817
67,698
19,024
2,939
16,086
71,651
908,374
6,883
901,491
65,427
36,426
23,232
162
23,070
5,769
2,003
3,766
22,041
227,214
2,070
225,145
150,910
99,664
38,169
1,191
36,978
13,077
1,353
11,724
33,307
361,478
3,981
357,497
507,309
110,452
13,216
222,976
15,876
144,790
357,302
87,391
6,294
151,959
11,740
99,917
302,276
71,650
5,332
129,758
10,131
85,406
55,026
15,742
963
22,201
1,609
14,512
150,007
23,060
6,921
71,017
4,136
44,872
37,211
28,760
467,670
2,314
33,001
15,373
368,315
1,499
24,934
12,975
284,508
1,348
8,066
2,398
83,807
151
4,210
13,387
99,355
815
301,660
57,478
2,569
54,908
71,621
23,044
30,860
40,294
148,311
228,374
46,990
1,626
45,364
64,319
20,416
29,893
36,012
122,610
186,808
35,163
1,380
33,783
44,175
16,187
20,908
26,901
88,459
41,566
11,828
246
11,582
20,144
4,229
8,985
9,111
34,151
73,285
10,488
944
9,544
7,302
2,629
967
4,282
25,701
38 Total liabilities and equity capital
2,468,361
1,850,604
1,457,957
392,647
617,757
39 Total liabilities 7
2,285,576
1,716,054
1,353,455
362,599
569,522
41
42
43
44
45
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
47
All other
1,872,837
1,677,764
4,179
102,232
50,120
8,947
19,449
10,147
1,344,607
1,198,315
3,165
67,072
44,879
6,542
15,312
9,322
1,078,714
966,817
2,736
56,101
33,668
4,902
10,076
4,417
265,893
231,498
429
10,971
11,211
1,640
5,236
4,905
528,229
479,449
1,014
35,160
5,241
2,405
4,136
825
48 Total transaction accounts
49
Individuals, partnerships, and corporations
50
U.S. government
51
States and political subdivisions in the United States
52
Commercial banks in the United States
53
Other depository institutions in the United States
54
Certified and official checks
55
All other
607,507
514,583
2,872
21,724
34,111
6,326
19,449
8,441
459,322
381,116
2,175
14,614
32,576
5,391
15,312
8,136
359,554
303,958
1,837
11,896
24,055
3,918
10,076
3,813
99,768
77,158
338
2,718
8,521
1,473
5,236
4,323
148,185
133,467
697
7,110
1,535
935
4,136
305
56 Demand deposits (included in total transaction accounts)
57
Individuals, partnerships, and corporations
58
U.S. government
59
States and political subdivisions in the United States
60
Commercial banks in the United States
61
Other depository institutions in the United States
62
Certified and official checks
63
All other
433,243
349,653
2,813
12.476
34,105
6,305
19,449
8,438
341,539
268,653
2,129
9,356
32,571
5,378
15,312
8,135
261,014
209,752
1,794
7,619
24,051
3,908
10,076
3,812
80,525
58,901
335
1,738
8,521
1,470
5,236
4,322
91,704
81,000
684
3,120
1,534
927
4,136
303
1,265,329
1,163,181
1,307
80,508
16,009
2,622
1,706
885,285
817,199
990
52,458
12,304
1,151
1,186
719,160
662,859
899
44,205
9,613
984
604
166,125
154,340
91
8,253
2,691
167
582
380,044
345,982
317
28,050
3,706
1,470
520
2 Cash and balances due from depository institutions
3
Currency and coin
4
Noninterest-bearing balances due f r o m commercial banks
5
Other
6 Total securities, loans, and lease financing receivables (net of unearned income)
7
8
9
10
11
12
13
14
15
16
17
18
Total securities, book value
U.S. Treasury securities and U.S. government agency and corporation obligations
Securities issued by states and political subdivisions in the United States
Taxable
Tax-exempt
Other securities
All holdings of private certificates of participation in pools of residential mortgages
All other
Federal funds sold and securities purchased under agreements to resell
Total loans and lease financing receivables, gross
LESS: Unearned income on loans
Total loans and leases (net of unearned income)
Total loans, gross, by category
19 Loans secured by real estate
20
Construction and land development
22
23
24
1-4 family residential properties
Multifamily (5 or more) residential properties
Nonfarm nonresidential properties
25 Loans to depository institutions
26 Loans to finance agricultural production and other loans to farmers
28 Acceptances of other banks
29 Loans to individuals for household, family and other personal expenditures
(includes purchased paper)
30 Obligations (other than securities) of states and political subdivisions in the United States
31
Nonrated industrial development obligations
32
Other obligations (excluding securities)
33 All other loans
34 Lease financing receivables
35 Customers' liability on acceptances outstanding
36 Net due from own foreign offices, Edge and Agreement subsidiaries and IBFs
37 Remaining assets
64 Total nontransaction accounts
65
Individuals, partnerships, and corporations
66
U.S. government
67
States and political subdivisions in the United States
68
Commercial banks in the United States
69
Other depository institutions in the United States
70
All other
Commercial Banks
4.22
A75
Continued
Members
Nonmembers
Total
Item
Total
National
State
243,138
5,771
60,608
31,870
2,563
10,549
68,789
220,519
5,146
53,841
30,904
1,378
9,792
59,659
166,353
3,654
36,481
21,883
1,221
8,579
45,149
54,166
1,492
17,360
9,021
157
1,213
14,510
22,619
624
6,767
966
1,186
757
9,130
182,785
134,549
104,501
30,048
48,236
79 Assets held in trading accounts 1 0
80
U.S. Treasury securities
81
U.S. government agency corporation obligations
82
Securities issued by states and political subdivisions in the United States
Other bonds, notes and debentures
83
84
Certificates of deposit
85
Commercial paper
86
Bankers acceptances
87
Other
24,421
11,307
3,670
3,520
433
1,413
129
2,158
841
23,830
11,272
3,628
3,491
431
1,413
129
2,115
831
14,442
6,118
2,150
2,267
280
1,161
129
1,258
598
9,388
5,154
1,478
1,224
151
252
0
857
233
591
35
42
29
2
0
0
43
10
88 Total individual retirement accounts (IRA) and Keogh plan accounts
89 Total brokered deposits
90 Total brokered retail deposits
91
Issued in denominations of $100,000 or less
92
Issued in denominations greater than $100,000 and participated out by the broker in
shares of $100,000 or less
75,609
27,852
7,803
2,516
52,853
22,894
6,027
1,459
43,653
19,611
5,098
1,382
9,200
3,282
929
77
22,756
4,959
1,776
1,056
5,287
4,567
3,715
852
720
370,902
167,014
425,281
268,698
33,434
164,660
1,439,594
271,675
117,319
272,621
194,752
28,918
111,246
1,003,068
220,035
91,901
229,211
159,045
18,966
92,797
817,700
51,639
25,418
43,409
35,707
9,952
18,449
185,368
99,227
49,695
152,661
73,946
4,516
53,415
436,526
1,462,851
1,110,653
888,834
221,818
352,198
196,931
140,002
110,540
29,462
56,929
372,140
160,645
266,805
460,899
272,931
112,100
193,924
301,832
221,641
88,235
159,323
248,691
51,290
23,864
34,601
53,141
99,210
48,546
72,881
159,066
13,895
5,844
4,752
1,092
8,051
71
72
73
74
75
76
77
Federal funds purchased and securities sold under agreements to repurchase
Demand notes issued to the U . S . Treasury
Other borrowed money
Banks liability on acceptances executed and outstanding
N o t e s and debentures subordinated to deposits
Net due to own foreign offices, Edge and Agreement subsidiaries and IBFs
Remaining liabilities
78 Total equity capital 9
MEMO
93
94
95
%
97
98
99
Savings deposits
Money market deposit accounts (MMDAs)
Other savings deposits
Total time deposits of less than $100,000
Time certificates of deposit of $100,000 or more
Open-account time deposits of $100,000 or more
All N O W accounts (including Super N O W )
Total time and savings deposits
Quarterly
averages
100 Total loans
101 Transaction accounts ( N O W accounts, A T S accounts, and telephone and preauthorized
transfer accounts)
102
103
104
105
Nontransaction accounts
Money market deposit accounts (MMDAs)
Other savings deposits
Time certificates of deposit of $100,000 or more
All other time deposits
106 N u m b e r of banks
1. Effective Mar. 31, 1984, the report of condition was substantially revised
for commercial banks. Some of the changes are as follows: (1) Previously, banks
with international banking facilities (IBFs) that had no other foreign offices were
considered domestic reporters. Beginning with the Mar. 31, 1984 call report these
banks are considered foreign and domestic reporters and must file the foreign and
domestic report of condition; (2) banks with assets greater than $1 billion have
additional items reported; (3) the domestic office detail for banks with foreign
offices has been reduced considerably; and (4) banks with assets under $25 million
have been excused f r o m reporting certain detail items.
2. The " n . a . " for some of the items is used to indicate the lesser detail
available from banks without foreign offices, the inapplicability of certain items to
banks that have only domestic offices and/or the absence of detail on a fully
consolidated basis for banks with foreign offices.
3. 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 . " All other lines represent
transactions with parties other than the domestic and foreign offices of each bank.
Since these intraoffice transactions are nullified by consolidation, total assets and
total liabilities for the entire bank may not equal the sum of assets and liabilities
respectively, of the domestic and foreign offices.
4. Foreign offices include branches in foreign countries, Puerto Rico, and in
U.S. territories and possessions; subsidiaries in foreign countries; all offices of
Edge Act and Agreement corporations wherever located and IBFs.
5. The 'over 100' column refers to those respondents whose assets, as of June
30 of the previous calendar year, were equal to or exceeded $100 million. (These
respondents file the F F I E C 032 or F F I E C 033 call report.) T h e ' u n d e r 100' column
refers to those respondents whose assets, as of June 30 of the previous calendar
year, were less than $100 million. (These respondents filed the F F I E C 034 call
report.)
6. Since the domestic portion of allowances for loan and lease losses and
allocated transfer risk reserve are not reported for banks with foreign offices, the
components of total assets (domestic) will not add to the actual total (domestic).
7. Since the foreign portion of demand notes issued to the U . S . Treasury is not
reported for banks with foreign offices, the components of total liabilities (foreign)
will not add to the actual total (foreign).
8. The definition of 'all other' varies by report form and therefore by column
in this table. See the instructions for more detail.
9. Equity capital is not allocated between the domestic and foreign offices of
banks with foreign offices.
10. Components of assets held in trading accounts are only reported for banks
with total assets of $1 billion or more; therefore the c o m p o n e n t s will not add to the
totals for this item.
A76
Federal Reserve Board of Governors
M A N U E L H . JOHNSON,
Chairman
Vice Chairman
W A Y N E D . ANGELL
OFFICE
MEMBERS
DIVISION
A L A N GREENSPAN,
OF BOARD
JOSEPH R . C O Y N E , Assistant
D O N A L D J. W I N N , Assistant
to the
to the
Board
Board
NORMAND R.V. BERNARD, Special Assistant to the Board
LYNN SMITH FOX, Special Assistant to the Board
BOB S. MOORE, Special Assistant to the Board
MARTHA R . SEGER
OF RESEARCH
AND
E D W A R D C . E T T I N , Deputy
STATISTICS
Director
DONALD L. KOHN, Deputy Director
(Monetary Policy and Financial Markets)
MICHAEL J. PRELL, Deputy
JARED J. E N Z L E R , Associate
Director
Director
DAVID E. LINDSEY, Associate
Director
ELEANOR J. STOCKWELL, Associate
LEGAL
DIVISION
MICHAEL B R A D F I E L D , General
Counsel
J. VIRGIL MATTINGLY, JR., Deputy General Counsel
RICHARD M. ASHTON, Associate General Counsel
OLIVER IRELAND, Associate General Counsel
RICKI R. TIGERT, Assistant General Counsel
MARYELLEN A. BICOWN, Assistant to the General Counsel
Director
MARTHA BETHEA, Deputy Associate Director
THOMAS D. SIMPSON, Deputy Associate Director
LAWRENCE SLIFMAN, Deputy Associate Director
PETER A. TINSLEY, Deputy Associate Director
S U S A N J. LEPPER, Assistant
RICHARD D . PORTER, Assistant
MARTHA S . S C A N L O N , Assistant
Director
Director
Director
JOYCE K. ZICKLER, Assistant
Director
L E V O N H . G A R A B E D I A N , Assistant
Director
(Administration)
OFFICE OF THE
SECRETARY
DIVISION
WILLIAM W . W I L E S ,
Secretary
BARBARA R . L O W R E Y , Associate
Secretary
JAMES M C A F E E , Associate
Secretary
DIVISION OF
CONSUMER
AND COMMUNITY
AFFAIRS
B R E N T L . B O W E N , Inspector
E D W I N M . T R U M A N , Staff
GENERAL
General
FINANCE
Director
LARRY J. PROMISEL, Senior Associate
Director
CHARLES J. SIEGMAN, Senior Associate Director
DAVID H. HOWARD, Deputy Associate Director
ROBERT F . G E M M I L L , Staff
D O N A L D B . A D A M S , Assistant
PETER HOOPER I I I , Assistant
GRIFFITH L . G A R W O O D ,
Director
G L E N N E . L O N E Y , Assistant
Director
ELLEN M A L A N D , Assistant
Director
DOLORES S . S M I T H , Assistant
Director
OFFICE OF THE INSPECTOR
OF INTERNATIONAL
Adviser
Director
Director
KAREN H. JOHNSON, Assistant
Director
RALPH W . S M I T H , J R . , Assistant
Director
DIVISION OF
BANKING
SUPERVISION
AND
REGULATION
WILLIAM TAYLOR, Staff
Director
Director1
FRANKLIN D . DREYER, Deputy
DON E. KLINE, Associate Director
FREDERICK M. STRUBLE, Associate
Director
WILLIAM A. RYBACK, Deputy Associate Director
STEPHEN C. SCHEMERING, Deputy Associate Director
RICHARD SPILLENKOTHEN, Deputy Associate Director
HERBERT A . B I E R N , Assistant
JOE M. CLEAVER, Assistant
Director
Director
A N T H O N Y C O R N Y N , Assistant
JAMES I. GARNER, Assistant
Director
Director
JAMES D . GOETZINGER, Assistant
MICHAEL G . M A R T I N S O N , Assistant
ROBERT S . PLOTKIN, Assistant
S I D N E Y M . S U S S A N , Assistant
Director
Director
Director
Director
LAURA M. HOMER, Securities Credit Officer
1, On loan from the Federal Reserve Bank of Chicago.
A77
and Official Staff
H . ROBERT HELLER
E D W A R D W . KELLEY, JR.
OFFICE OF
STAFF DIRECTOR
FOR
S. DAVID FROST, Staff
OFFICE OF STAFF DIRECTOR
FOR
FEDERAL RESERVE BANK
ACTIVITIES
MANAGEMENT
THEODORE E. ALLISON, Staff Director
Director
EDWARD T. MULRENIN, Assistant Staff Director
PORTIA W. THOMPSON, Equal Employment
Opportunity
Programs Officer
DIVISION
OF
PERSONNEL
DIVISION OF FEDERAL
BANK
OPERATIONS
RESERVE
C L Y D E H . FARNSWORTH, J R . ,
ELLIOTT C. MCENTEE, Associate
DAVID L . SHANNON,
Director
JOHN R. WEIS, Assistant
Director
CHARLES W. WOOD, Assistant
OFFICE
OF THE
DAVID L. ROBINSON, Associate
EARL G. HAMILTON, Assistant Director
JOHN H. PARRISH, Assistant Director
FLORENCE M . Y O U N G ,
DIVISION
Controller
OF SUPPORT
ROBERT E . FRAZIER,
SERVICES
Director
GEORGE M. LOPEZ, Assistant
Director
DAVID L. WILLIAMS, Assistant
Director
OFFICE OF THE EXECUTIVE
INFORMATION
RESOURCES
DIRECTOR
FOR
MANAGEMENT
ALLEN E. BEUTEL, Executive
Director
STEPHEN R. MALPHRUS, Associate
Director
DIVISION
SYSTEMS
OF HARDWARE
BRUCE M . BEARDSLEY,
AND
SOFTWARE
Director
THOMAS C. JUDD, Assistant
Director
ELIZABETH B. RIGGS, Assistant
Director
ROBERT J. ZEMEL, Assistant
Director
DIVISION OF APPLICATIONS
STATISTICAL
SERVICES
WILLIAM R . JONES,
DEVELOPMENT
Director
DAY W. RADEBAUGH, Assistant
Director
RICHARD C. STEVENS, Assistant
PATRICIA A . WELCH, Assistant
Director
Director
Director
Director
C. WILLIAM SCHLEICHER, JR., Associate
Director
CHARLES W. BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
Director
CONTROLLER
GEORGE E . LIVINGSTON,
Director
AND
Adviser
78
Federal Reserve Bulletin • October 1987
Federal Open Market Committee
FEDERAL
OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
E. GERALD CORRIGAN, Vice Chairman
Chairman
W A Y N E D . ANGELL
E D W A R D G . BOEHNE
ROBERT H . BOYKIN
E D W A R D W . KELLEY, JR.
MARTHA R . SEGER
GARY H . STERN
H . ROBERT HELLER
M A N U E L H . JOHNSON
SILAS KEEHN
ALTERNATE
ROBERT P. BLACK
ROBERT T . PARRY
MEMBERS
ROBERT P . FORRESTAL
THOMAS M . TIMLEN
W . LEE HOSKINS
STAFF
DONALD L. KOHN, Secretary and Staff Adviser
NORMAND R . V . BERNARD, Assistant
Secretary
ROSEMARY R. LONEY, Deputy Assistant
MICHAEL BRADFIELD, General
Secretary
Counsel
JAMES H. OLTMAN, Deputy General Counsel
EDWIN M. TRUMAN, Economist
(International)
PETER FOUSEK, Associate
Economist
RICHARD W. LANG, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
MICHAEL J. PRELL, Associate
Economist
ARTHUR J. ROLNICK, Associate
Economist
HARVEY ROSENBLUM, Associate
Economist
KARL A . SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D . SIMPSON, Associate
Economist
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
JOHN G . MEDLIN JR.,
JULIEN L. MCCALL, Vice
President
President
JOHN F . MCGILLICUDDY, D E W A L T H . ANKENY, JR., AND F . PHILLIPS GILTNER,
JOHN P . L A WARE, First District
JOHN F. MCGILLICUDDY, Second District
SAMUEL A . MCCULLOUGH, Third District
JULIEN L . MCCALL, Fourth District
JOHN G . M E D L I N , JR., Fifth District
BENNETT A . BROWN, Sixth District
Directors
CHARLES T. FISHER, III, Seventh District
D O N A L D N. B R A N D I N , Eighth District
D E W A L T H . ANKENY, JR., Ninth District
F . PHILLIPS GILTNER, Tenth District
GERALD W . FRONTERHOUSE, Eleventh District
JOHN D. MANGELS, Twelfth District
HERBERT V . PROCHNOW, SECRETARY
WILLIAM J. KORSVIK, ASSOCIATE SECRETARY
A79
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
E D W A R D N . LANGE, Seattle, Washington,
STEVEN W. H A M M , Columbia, South Carolina,
E D W I N B . BROOKS, JR., Richmond, Virginia
JONATHAN A . BROWN, W a s h i n g t o n , D . C .
JUDITH N. BROWN, Edina, Minnesota
MICHAEL S. CASSIDY, New York, New York
THERESA FAITH CUMMINGS, Springfield, Illinois
RICHARD B. DOBY, Denver, Colorado
RICHARD H . FINK, Washington, D.C.
NEIL J. FOGARTY, Jersey City, N e w Jersey
STEPHEN GARDNER, Dallas, Texas
KENNETH A. H A L L , Picayune, Mississippi
ELENA G . HANGGI, Little Rock, Arkansas
ROBERT J. HOBBS, Boston, Massachusetts
RAMON E. JOHNSON, Salt Lake City, Utah
ROBERT W. JOHNSON, West Lafayette, Indiana
THRIFT INSTITUTIONS
ADVISORY
JOHN
M. KOLESAR, Cleveland, Ohio
ALAN B. LERNER, Dallas, Texas
FRED S. MCCHESNEY, Chicago, Illinois
RICHARD L. D. MORSE, Manhattan, Kansas
HELEN E . NELSON, Mill Valley, California
SANDRA R. PARKER, Richmond, Virginia
JOSEPH L. PERKOWSKI, Centerville, Minnesota
BRENDA L. SCHNEIDER, Detroit, Michigan
JANE SHULL, Philadelphia, Pennsylvania
TED L. SPURLOCK, Dallas, Texas
MEL R. STILLER, Boston, Massachusetts
CHRISTOPHER J. SUMNER, Salt Lake City, Utah
EDWARD J. WILLIAMS, Chicago, Illinois
MICHAEL ZOROYA, St. Louis, Missouri
COUNCIL
MICHAEL R. WISE, Denver, Colorado,
JAMIE J. JACKSON, Houston, Texas, Vice
GERALD M. CZARNECKI, Mobile, Alabama
JOHN C. DICUS, Topeka, Kansas
BETTY GREGG, Phoenix, Arizona
THOMAS A. KINST, Hoffman Estates,
RAY MARTIN, Los Angeles, California
Chairman
Vice Chairman
President
President
DONALD F. MCCORMICK, Livingston, N e w Jersey
JANET
M. PAVLISKA, Arlington, Massachusetts
HERSCHEL ROSENTHAL, Miami, Florida
Illinois
Milwaukee, Wisconsin
GARY L. SIRMON, Walla Walla, Washington
WILLIAM G . SCHUETT,
A80
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BANKING AND MONETARY STATISTICS. 1 9 1 4 - 1 9 4 1 . (Reprint
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A81
PAMPHLETS
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Short pamphlets on regulatory compliance, primarily suitable for banks, bank holding companies and creditors.
REVIEW OF THE TECHNIQUES AND LITERATURE, b y
Kenneth Rogoff. October 1983. 15 pp.
133. RELATIONSHIPS AMONG EXCHANGE RATES, INTERVENTION, AND INTEREST RATES: A N EMPIRICAL IN-
VESTIGATION, by Bonnie E. Loopesko. November
1983. Out of print.
Limit of 50 copies
134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: A REVIEW OF THE LITERATURE, b y
The Board of Directors' Opportunities in Community Reinvestment
The Board of Directors' Role in Consumer Law Compliance
Combined Construction/Permanent Loan Disclosure and
Regulation Z
Community Development Corporations and the Federal Reserve
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The Right to Financial Privacy Act
Signature Rules in Community Property States: Regulation B
Signature Rules: Regulation B
Timing Requirements for Adverse Action Notices: Regulation B
What An Adverse Action Notice Must Contain: Regulation B
Understanding Prepaid Finance Charges: Regulation Z
Ralph W. Tryon. October 1983. 14 pp. Out of print.
135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: APPLICATIONS TO C A N A D A , GERMA-
NY, AND JAPAN, by Deborah J. Danker, Richard A.
Haas, Dale W. Henderson, Steven A. Symansky, and
Ralph W. Tryon. April 1985. 27 pp. Out of print.
136. THE EFFECTS OF FISCAL POLICY ON THE U . S . ECONO-
MY, by Darrell Cohen and Peter B. Clark. January
1984. 16 pp. Out of print.
137. THE IMPLICATIONS FOR BANK MERGER POLICY OF
FINANCIAL DEREGULATION, INTERSTATE BANKING,
AND
FINANCIAL
SUPERMARKETS,
by
Stephen
A.
Rhoades. February 1984. Out of print.
138. ANTITRUST L A W S , JUSTICE DEPARTMENT GUIDELINES, A N D THE LIMITS OF CONCENTRATION IN LOCAL BANKING MARKETS, by James Burke. June 1984.
14 pp. Out of print.
139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN
THE UNITED STATES, by Thomas D. Simpson and
Patrick M. Parkinson. August 1984. 20 pp.
STAFF
STUDIES:
Bulletin
Summaries 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
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140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF
THE LITERATURE, by John D. Wolken. November
1984. 38 pp. Out of print.
141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAYMENT COSTS, by William Dudley. November 1984.
15 pp. Out of print.
142. MERGERS
AND
BANKS, 1 9 6 0 - 8 3 ,
ACQUISITIONS
BY
COMMERCIAL
by Stephen A . Rhoades. December
1984. 30 pp. Out of print.
Staff Studies 115-125 are out of print.
114. MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE ON COMPETITION AND PERFORMANCE IN
BANKING MARKETS, by Timothy J. Curry and John T.
Rose. Jan. 1982. 9 pp.
126. DEFINITION A N D MEASUREMENT OF EXCHANGE MAR-
KET INTERVENTION, by Donald B. Adams and Dale
W. Henderson. August 1983. 5 pp. Out of print.
127. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: JANUARY-MARCH 1 9 7 5 , by Margaret L.
Greene. August 1984. 16 pp. Out of print.
128. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: SEPTEMBER 1977-DECEMBER 1 9 7 9 , b y M a r -
garet L. Greene. October 1984. 40 pp. Out of print.
129. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: OCTOBER 1 9 8 0 - O c T O B E R 1 9 8 1 , by Margaret
L. Greene. August 1984. 36 pp.
130. EFFECTS OF EXCHANGE RATE VARIABILITY ON INTERNATIONAL TRADE A N D OTHER ECONOMIC VARIABLES: A REVIEW OF THE LITERATURE, by Victoria S .
Farrell with Dean A. DeRosa and T. Ashby McCown.
January 1984. Out of print.
131. CALCULATIONS OF PROFITABILITY FOR U . S . D O L L A R DEUTSCHE MARK INTERVENTION, by Laurence R .
Jacobson. October 1983. 8 pp.
132. TIME-SERIES STUDIES OF THE RELATIONSHIP BETWEEN EXCHANGE RATES A N D INTERVENTION: A
143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF
THE ELECTRONIC F U N D TRANSFER ACT: RECENT
SURVEY EVIDENCE, by Frederick J. Schroeder. April
1985. 23 pp. Out of print.
144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CONSUMER CREDIT REGULATIONS: THE TRUTH IN L E N D ING AND EQUAL CREDIT OPPORTUNITY L A W S , b y
Gregory E. Elliehausen and Robert D. Kurtz. May
1985. 10 pp.
145. SERVICE CHARGES AS A SOURCE OF BANK INCOME
AND THEIR IMPACT ON CONSUMERS, by Glenn B .
Canner and Robert D. Kurtz. August 1985. 31 pp. Out
of print.
146. THE ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL BANKS, 1 9 7 7 - 8 4 ,
by Thomas F. Brady. November 1985. 25 pp.
147. REVISIONS IN THE MONETARY SERVICES (DIVISIA)
INDEXES OF THE MONETARY AGGREGATES, by Helen
T. Farr and Deborah Johnson. December 1985. 42 pp.
148. THE MACROECONOMIC A N D SECTORAL EFFECTS OF
THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA-
TION RESULTS, by Flint Brayton and Peter B. Clark.
December 1985. 17 pp.
149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS
IN BANKING BEFORE AND AFTER ACQUISITION, b y
Stephen A. Rhoades. April 1986. 32 pp.
150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: A REEXAMINATION AND AN APPLICATION, b y
John T. Rose and John D. Wolken. May 1986. 13 pp.
A82
151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT
PRICING FROM 1 9 8 3 THROUGH 1 9 8 5 , b y P a t r i c k I.
Mahoney, Alice P. White, Paul F. O'Brien, and Mary
M. McLaughlin. January 1987. 30 pp.
152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A
REVIEW OF THE LITERATURE, by Mark J. War-
shawsky. April 1987. 18 pp.
by Carolyn D. Davis
and Alice P. White. September 1987. 14 pp.
153. STOCK MARKET VOLATILITY,
REPRINTS
OF BULLETIN
ARTICLES
Most of the articles reprinted do not exceed 12 pages.
Limit of 10 copies
Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
Ten Staff Studies. 11/83.
A Financial Perspective on Agriculture. 1/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
A Revision of the Index of Industrial Production. 7/85.
Financial Innovation and Deregulation in Foreign Industrial
Countries. 10/85.
Recent Developments in the Bankers Acceptance Market.
1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and
U.S. Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
U.S. International Transactions in 1986. 5/87.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
A83
Index to Statistical Tables
References are to pages A3-A75 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20, 70-75
Domestic finance companies, 37
Federal Reserve Banks, 10
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21
Nonfinancial corporations, 36
Automobiles
Consumer installment credit, 40, 41
Production, 47, 48
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20, 70, 72, 74 (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 24
Branch banks, 21, 55
Business activity, nonfinancial, 44
Business expenditures on new plant and equipment, 36
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18, 71, 73, 75
Federal Reserve Banks, 10
Central banks, discount rates, 67
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19, 70, 72, 74
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20, 70-75
Commercial and industrial loans, 16, 18, 19, 20, 21
Consumer loans held, by type, and terms, 40, 41
Loans sold outright, 19
Nondeposit funds, 17
Number, by classes, 71, 73, 75
Real estate mortgages held, by holder and property, 39
Time and savings deposits, 3
Commercial paper, 23, 24, 37
Condition statements (See Assets and liabilities)
Construction, 44, 49,
Consumer installment credit, 40, 41
Consumer prices, 44, 50
Consumption expenditures, 51, 52
Corporations
Nonfinancial, assets and liabilities, 36
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 26, 40. (See also Thrift institutions)
Currency and coin, 18, 70, 72, 74
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-21, 71, 73, 75
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21, 71, 73, 75
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks and foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 24
FARM mortgage loans, 39
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and
ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 6, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 38, 39
Federal Housing Administration, 33, 38, 39
Federal Land Banks, 39
Federal National Mortgage Association, 33, 38, 39
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federal Savings and Loan Insurance Corporation insured
institutions, 26
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 37
Business credit, 37
Loans, 40, 41
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4
Flow of funds, 42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66
A84
GOLD
Certificate account, 10
Stock, 4, 54
Government National Mortgage Association, 33, 38, 39
Gross national product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 44, 51, 52
Industrial production, 44, 47
Installment loans, 40, 41
Insurance companies, 26, 30, 39
Interest rates
Bonds, 24
Consumer installment credit, 41
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 67
Money and capital markets, 24
Mortgages, 38
Prime rate, 23
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 39, 70
Federal Reserve Banks, 10, 11
Financial institutions, 26, 39
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-20
Commercial banks, 3, 16, 18-20, 70, 72, 74
Federal Reserve Banks, 4, 5, 7, 10, 11
Financial institutions, 26, 39
Insured or guaranteed by United States, 38, 39
Real estate loans—Continued
Financial institutions, 26
Terms, yields, and activity, 38
Type of holder and property mortgaged, 39
Repurchase agreements, 6, 17, 19, 20, 21
Reserve requirements, 8
Reserves
Commercial banks, 18, 71
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 54
Residential mortgage loans, 38
Retail credit and retail sales, 40, 41, 44
SAVING
Flow of funds, 42, 43
National income accounts, 51
Savings and loan associations, 26, 39, 40, 42. (See also
Thrift institutions)
Savings banks, 26, 39, 40
Savings deposits (See Time and savings deposits)
Securities (See specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 53, 54
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 19, 20, 26
Rates on securities, 24
Stock market, selected statistics, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 3, 12
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks, (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 9
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 25
Prime rate, 23
Producer prices, 44, 50
Production, 44, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 39, 72
TAX receipts, federal, 29
Thrift institutions, 3. (See also Credit unions and Savings
and loan associations)
Time and savings deposits, 3, 13, 17, 18, 19, 20, 21, 71, 73,
75
Trade, foreign, 54
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 18-20, 21, 30, 70, 72, 74
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 66
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 38, 39
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)
A85
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK,
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Joseph A. Baute
George N. Hatsopoulos
Frank E. Morris
Robert W. Eisenmenger
NEW YORK*
10045
John R. Opel
Virginia A. Dwyer
Mary Ann Lambertsen
E. Gerald Corrigan
Thomas M. Timlen
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
Nevius M. Curtis
George E. Bartol III
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Charles W. Parry
John R. Miller
Owen B. Butler
James E. Haas
W. Lee Hoskins
William H. Hendricks
Leroy T. Canoles, Jr.
Robert A. Georgine
Gloria L. Johnson
Wallace J. Jorgenson
Robert P. Black
Jimmie R. Monhollon
Bradley Currey, Jr.
Larry L. Prince
A. G. Trammell
Andrew A. Robinson
Robert D. Apelgren
C. Warren Neel
Caroline K. Theus
Robert P. Forrestal
Jack Guynn
Robert J. Day
Marcus Alexis
Robert E. Brewer
Silas Keehn
Daniel M. Doyle
W.L. Hadley Griffin
Robert L. Virgil, Jr.
James R. Rodgers
Raymond M. Burse
Katherine H. Smythe
Thomas C. Melzer
Joseph P. Garbarini
John B. Davis, Jr.
Michael W. Wright
Warren H. Ross
Gary H. Stern
Thomas E. Gainor
Irvine O. Hockaday, Jr.
Robert G. Lueder
James E. Nielson
Patience S. Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Mary Carmen Saucedo
Walter M. Mischer, Jr.
Robert F. McDermott
Robert H. Boykin
William H. Wallace
Fred W. Andrew
Robert F. Erburu
Richard C. Seaver
Paul E. Bragdon
Don M. Wheeler
John W. Ellis
Robert T. Parry
Carl E. Powell
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino1
Harold J. Swart1
Robert D. McTeer, Jr.1
Albert D. Tinkelenberg1
John G. Stoides 1
Delmar Harrison1
Fred R. Herr1
James D. Hawkins 1
Patrick K. Barron1
Donald E. Nelson
Henry H. Bourgaux
Roby L. Sloan1
John F. Breen
James E. Conrad
Paul I. Black, Jr.
Robert F. McNellis
Enis Alldredge, Jr.
William G. Evans
Robert D. Hamilton
Tony J. Salvaggio1
Sammie C. Clay
Robert Smith, III
Thomas H. Robertson
Thomas C. Warren2
Angelo S. Carella1
E. Ronald Liggett1
Gerald R. Kelly 1
*Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016;
Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
Digitized for 1.FRASER
Senior Vice President.
http://fraser.stlouisfed.org/
2. Executive Vice President.
Federal Reserve Bank of St. Louis
A86
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
LEGEND
Boundaries of Federal Reserve Districts
®
Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
*
Federal Reserve Branch Cities
Federal Reserve Bank Facility
Q
Board of Governors of the Federal Reserve
System
@FedFRASER