Full text of Federal Reserve Bulletin : October 1988
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VOLUME 7 4 •
NUMBER 10 •
1 ;
Au
OCTOBER 1988
FEDERAL RESERVE
BULLETIN
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 • Donald L. Kohn • Michael J. Prell • 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
633 EXCHANGE RATES,
AND THE J-CURVE
ADJUSTMENT,
Commentary on the monthly trade statistics
often implies that it is the negative effects of
a depreciation reflected in the J-curve that
have been responsible for the continuation
of the nominal trade deficit. The analysis in
this article suggests that though these effects may in fact be evident in a temporary
phase before the deficit improves, they are
relatively small and are not a major cause of
the persistence of the U.S. trade deficit.
645 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE OPERATIONS
Market sentiment toward the dollar turned
strongly positive during the three months
ending in July, and the dollar moved higher
for most of the period.
650 INDUSTRIAL
PRODUCTION
Industrial production increased an estimated 0.8 percent in July.
652
ANNOUNCEMENTS
Change in the discount rate.
Survey on the uses of financial services by
small businesses.
Revisions to Regulation C.
Amendment to Regulation T.
Update to staff guidelines on Regulation
AA.
Proposed amendment to Regulation CC.
Changes in Board staff.
Admission of two state banks to membership in the Federal Reserve System.
654 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET COMMITTEE
At its meeting on June 29-30, 1988, the
Committee reviewed the ranges for growth
in the monetary and debt aggregates that it
had established in February for 1988 and
decided on tentative ranges for growth in
those measures in 1989. For 1988, the Committee decided not to change the ranges that
it had set earlier. These included growth of
4 to 8 percent for both M2 and M3 for the
period from the fourth quarter of 1987 to the
fourth quarter of 1988. The monitoring
range of 7 to 11 percent for growth in total
domestic nonfinancial debt also was retained for 1988. With regard to the tentative
ranges in 1989, the Committee agreed to
reduce the range for M2 by a full percentage
point and that for M3 by Vi percentage
point. The monitoring range for expansion
in total domestic nonfinancial debt also was
lowered by Vi percentage point. It was
understood that all the ranges for next year
were provisional and that they would be
reviewed in early 1989 in the light of intervening developments.
The Committee again decided not to set a
specific range for Ml for 1988 or 1989, but
to continue to appraise the behavior of this
monetary measure in terms of its velocity
and against the background of developments in the economy and financial markets
and the nature of emerging price pressures.
With regard to the implementation of
policy for the period immediately ahead,
the Committee adopted a directive that
called for a slight increase in the degree of
pressure on reserve positions. The members indicated that somewhat greater reserve restraint would be acceptable, or
slightly lesser reserve restraint might be
acceptable, depending on indications of in-
flationary pressures, the strength of the
business expansion, developments in foreign exchange and domestic financial markets, and the behavior of the monetary
aggregates. The reserve conditions contemplated by the Committee were expected to
be consistent with growth in M2 and M3 at
annual rates of about 5l/2 and 7 percent
respectively over the three-month period
from June through September. The intermeeting range for the federal funds rate,
which provides one mechanism for initiating consultation of the Committee when its
boundaries are persistently exceeded, was
left unchanged at 5 to 9 percent.
663 LEGAL
AI FINANCIAL AND BUSINESS
STATISTICS
These tables reflect data available
August 29, 1988.
as of
A3 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A70 BOARD OF GOVERNORS AND STAFF
AH FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY
COUNCILS
DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
A74 FEDERAL RESERVE
PUBLICATIONS
BOARD
AH INDEX TO STATISTICAL
TABLES
A79 FEDERAL RESERVE
BANKS,
BRANCHES, AND OFFICES
A80 MAP OF FEDERAL RESERVE
SYSTEM
Exchange Rates, Adjustment, and
the J-Curve
Ellen E. Meade of the Board's Division of International Finance prepared this article. Kathryn
A. Larin provided research assistance. Footnotes appear at the end of the article.
Because the exchange value of the dollar has
declined so much since early 1985 and because
the monthly trade statistics have been scrutinized so thoroughly for any sign of a turnaround
in the nominal trade balance, the phenomenon
that has been called the J-curve has received
considerable attention. In fact, commentary on
the statistics often implies that it is the negative
effects of a depreciation reflected in the J-curve
that have been responsible for the continuation
of the nominal trade deficit. The analysis in this
article suggests that though these effects may in
fact be evident in a temporary phase before the
deficit improves, they have been relatively small
and are not a major cause of the persistence of
the U.S. trade deficit.
Between early 1985 and the middle of 1988, the
exchange value of the U.S. dollar in terms of the
currencies of other industrial countries registered
a sizable depreciation, reversing most of its rise
in the early half of the decade. The weighted
average value of the dollar measured against the
currencies of the other Group of Ten countries
declined over 40 percent in about two and onehalf years (chart l). 1 Despite an uninterrupted
decline of this magnitude, which might have been
expected, other things equal, to stimulate exports and restrain imports, the nominal trade and
current account deficits of the United States
continued to widen through late 1987: by the last
quarter of that year, the nominal balance on
merchandise trade had declined to a deficit of
$165 billion (annual rate), and the current account balance registered a deficit of $134 billion
(chart 2);2 essentially, movements in the nominal
trade balance over this period have been mirrored in the current account. During the first half
of 1988, the trade balance appears to have begun
its long-awaited improvement, as a marked
slackening in the growth of imports has reinforced a continuation of the strong growth in
exports.
These developments suggest that the J-curve
phenomenon in fact had a role in the latest
developments in the international accounts. The
J-curve describes the graphic representation of
the path the nominal trade balance—that is, the
balance expressed in current dollars—takes in
response to a depreciation of the dollar; it also
helps illuminate the difference between the adjustments of the nominal balance and of the real
1. The G-10 trade-weighted value of the U.S. dollar
2. U.S. nominal external balances
Index, March 1973 = 100
150
•125
•100
Billions of dollars
634
Federal Reserve Bulletin • October 1988
balance. Just after a depreciation, the nominal
trade balance continues moving into deeper deficit for a time before the hoped-for response to
the depreciation takes hold. The line that balance
traces on a graph thus dips down before turning
up, taking the shape of the letter J (as it does in
the chart on the facing page).
The adjustments to the changes in relative
prices, and thus the adjustment in the nominal
trade balance, that are implied by shifts in exchange rates are expected to take place over
some reasonable period of time rather than immediately. Still, the nominal trade balance has
been unusually sluggish in responding to the
decline in the value of the dollar since 1985.
Meanwhile, the real merchandise trade balance—that is, the quantity of goods exported
minus the quantity of goods imported, measured
in 1982 dollars—has moved from a deficit of over
$180 billion in the third quarter of 1986 to one of
$118 billion in the second quarter of this year
(chart 3). Of the two elements in the balance, the
export side has been primarily responsible for
this improvement, as the decline in the value of
the dollar has made U.S. products more competitive in foreign markets.
What is the expected response of the U.S.
nominal trade balance following a depreciation of
the dollar, and how important has the J-curve
phenomenon been in the United States since
1985? In answering this question, this article first
reviews the textbook definition of the J-curve
and translates this definition into an empirical
model. Next, the empirical model is used to
simulate the adjustment path resulting from a
change in the dollar's exchange value. The first
simulation illustrates the classic textbook case of
3. Net volume of U.S. merchandise exports
Billions of 1982 dollars
the J-curve by examining the response of the
nominal trade balance to a discrete change in
exchange rates. In this simulation, the generated
J-curve does not include the secondary effects on
the nominal trade balance of changes in income
and prices that would follow a change in exchange rates. Two additional simulations examine the J-curve resulting from a discrete change
and from a continuous change in the dollar's
value, both when secondary effects on income
and prices are considered.
The section that follows discusses the J-curves
for three categories of trade that together account for a significant portion of U.S. exports
and imports: industrial supplies and materials,
capital goods (excluding automobiles), and consumer goods. The disaggregated J-curves highlight the differences in the responses of individual
markets to changes in exchange rates. The next
section reports the results of an experiment in
which the actual nominal trade balance is contrasted with the one that would have resulted had
the dollar remained at its peak in the first quarter
of 1985. The difference between the actual and
the hypothetical nominal trade balance generates
a "J-curve," which is analyzed and discussed. A
final section presents some concluding remarks.
THE TEXTBOOK J-CURVE
In the textbook J-curve, dollar import prices rise
immediately following a depreciation of the dollar, completely incorporating the change in exchange rates (chart 4); on the other hand, export
prices do not change. Meanwhile, the trade balance in real terms responds more slowly. Over
time the quantity of imports contracts as the rise
in import prices relative to domestic prices acts
to reduce the demand for imports, and the quantity of exports is stimulated by the decline in
U.S. export prices, expressed in foreign currency, relative to foreign prices. Initially, the
increase in the price of imports is larger than the
decline in the volume of imports, so that the
nominal trade balance worsens. Later, after the
volumes of exports and imports have adjusted
sufficiently to outweigh the increase in import
prices, the nominal trade balance improves. A
key aspect of the J-curve phenomenon is that
Exchange Rates, Adjustment, and the J-Curve
4. Classic J-curve response to
a one-time depreciation of the dollar 1
~
~~
Percent
635
depends on domestic income and relative prices.
The nominal balance of trade is the value of
exports less the value of imports. In algebraic
terms,
Import prices
TB = X • px - M • pm.
In this expression,
TB =
X =
px =
M =
pm =
J
I
I
I
I
I
I
I
Current dollars
Quarter
1. Dollar depreciation takes place at the beginning of quarter 1.
prices of traded goods respond to a change in
exchange rates before quantities of those goods
adjust significantly to changes in relative prices.
Channels
of
Transmission
The actual relationships between changes in exchange rates on the one hand and changes in
prices and quantities of traded products on the
other that underlie the J-curve are somewhat
more complicated than is depicted in the strict
textbook case. Both export and import prices are
presumed to depend primarily on production
costs. If pricing is not strictly competitive, prices
do not depend entirely on cost conditions in the
producing country, but are adjusted in part to
reflect market conditions. For any one country,
the volume of exports depends on foreign income
and relative prices, while the volume of imports
trade balance in current dollars
quantity of exports
price of exports
quantity of imports
price of imports.
Changes in exchange rates affect the nominal
trade balance through four channels: directly
through export and import prices, and indirectly
through the response of export and import volumes to an alteration in relative prices. The
interaction of these direct and indirect effects
creates the J-curve in the nominal trade
balance. 3 ' 4 The more quickly import prices respond to the change in exchange rates and the
more slowly import and export volumes adjust,
the larger will be the initial worsening of the
nominal trade balance and the longer will be the
delay before a net improvement. 5
Lagged
Adjustment
Empirical estimates of these trade equations can
be used to quantify the magnitude and length of
the textbook J-curve. In the partial-equilibrium
model of the U.S. current account used for
analysis and forecasting by the staff of the Federal Reserve Board (called here the Board staff
model), lags in adjustment play an important role
in explaining the behavior of trade prices and
volumes. 6 (A partial-equilibrium model is one
that does not explain behavior completely, but
assumes some behavior is predetermined. For
example, the Board staff model describes the
U.S. current account, but assumes that the values for U.S. gross national product and prices
are fixed. Thus changes in U.S. growth affect the
current account but changes in the current account do not affect GNP.) While the particular
representation of these lags may be somewhat
arbitrary, lags are necessary to capture the full
636
Federal Reserve Bulletin • October 1988
effect on one variable of the change in another. 7
In the Board staff model, 100 percent of a change
in the foreign exchange value of the dollar has
been passed through to the prices of non-oil
imports on average over the past two decades
(top panel of chart 5 and table l). 8,9 This is a
long-run response; although about one-half of the
adjustment does occur within two quarters of the
dollar's depreciation, the full adjustment of nonoil import prices is not complete for two years.
This estimated response is more drawn out than
the response in the textbook case; because the
full response does not occur immediately, the
initial worsening of the nominal trade balance is
smaller than the one in the textbook case. In
other words, the lagged adjustment of import
prices tends to weaken the initial J-curve effect.
The volumes of exports and imports also adjust slowly to changes in exchange rates. Estimates in the Board staff model suggest that the
volumes continue to respond for about two years
to changes in the dollar's value (bottom panel of
chart 5).10 The adjustment of export volume is
gradual and smooth over the eight quarters. The
volume of imports adjusts much more rapidly at
first: over one-half of the adjustment appears
three quarters after the change in exchange rates,
as table 1 shows.
Several factors are responsible for these lags in
the adjustment of export and import volumes to
changes in relative prices. 11 First, information or
recognition lags reflect the time it takes for firms
5. Model estimate of responses to a one-time
10 percent depreciation of the dollar 1
Percent
Non-oil import price
Billions of 1982 dollars
50
Exports
•25
Imports
2
4
6
8
10
12
Quarter
1. Dollar depreciation takes place at the beginning of quarter 1.
to become aware of changes in the prices of
alternative suppliers. Second, contract lags result because firms are committed to particular
suppliers for sustained periods. Finally, order or
delivery lags measure the time between a firm's
placement of an order with a supplier and its
1. Estimated responses of prices and volumes of traded goods to a 10 percent depreciation in the exchange
value of the dollar, Board staff model1
Percent of the original price or volume
Volume
Prices of non-oil imports
Quarter after
depreciation
Non-oil imports
Nonagricultural exports
Change in quarter
Cumulative change
Change in quarter
Cumulative change
Change in quarter
Cumulative change
2.7
2.1
1.7
1.3
1.0
.7
.4
.2
2.7
4.8
6.5
7.8
8.8
9.5
9.9
10.1
-1.1
-2.4
-2.5
-2.3
-1.6
-1.1
-.4
-.2
-1.1
-3.5
-6.0
-8.3
-9.9
-11.0
-11.4
-11.6
.6
1.2
1.3
1.6
1.6
1.4
1.1
.7
.6
1.8
3.1
4.7
6.3
7.7
8.8
9.5
0
1
2
3
4
5
7
1. For an appreciation, these changes would have the same absolute value, but they would have the opposite sign.
Responses shown are for the standard primary categories of exports
and imports. Agricultural exports and oil imports are treated separately in the Board staff model.
Exchange Rates, Adjustment,
delivery. All of these factors tend to stretch out
the J-curve.
Estimates of the responsiveness of trade prices
and volumes to changes in exchange rates will
depend on the data used, the lag structure imposed, and the period of estimation. Assessing
the likelihood of a particular adjustment requires two steps: first, examining the estimates
of the parameters of the various models, and
then incorporating the way their J-curves respond to alternative estimates of crucial elasticities.
6. Responses of the nominal external balances
to a depreciation of the dollar
One-time depreciation with no feedback 1
—
75
One-time depreciation with feedback 2
I
0
I
i
2
I
I
4
I
I
6
I
I
8
I
I
10
I
I
12
I
I
14
I
16
Quarter
1. The dollar depreciates 10 percent in quarter 1 of the simulation
and remains at the new lower level thereafter. No indirect feedbacks
included.
2. The dollar depreciates 10 percent in quarter 1 of the simulation
and remains at the new lower level thereafter. These estimates include
the indirect effects of the dollar's depreciation on prices, interest
rates, and income.
3. The dollar depreciates at an annual rate of 10 percent beginning
in quarter 1 of the simulation. These estimates include the indirect
effects of the dollar's depreciation on prices, interest rates, and
income.
and the J-Curve
637
AN ESTIMATED J-CURVE
The Board staff model of the U.S. current account was used to investigate the adjustment
path of the nominal trade balance subsequent to
a depreciation of the dollar. This decline in the
dollar was presumed to occur exogenously, perhaps by a shift in the preferences of the holders
of dollar-denominated assets, and not as a result
of changes in fiscal or monetary policy. 12
Three simulations illustrate the effect of a
dollar depreciation on the U.S. trade balance.
The first is similar to the textbook case, in that
the adjustment path is traced out assuming no
feedback effects to income and prices after a
change in exchange rates. 13 The second and third
simulations consider two alternative paths of
dollar depreciation when the secondary effects
are not suppressed.
In the textbook simulation, the foreign exchange value of the dollar in terms of the other
G-10 currencies was presumed to depreciate 10
percent in the first period and remain constant
thereafter. 14 The nominal trade balance worsens
somewhat initially, but shows net improvement
by the second quarter after the shock (chart 6).
The negative portion of the " J " is quite shallow,
and it is relatively short, because the response of
import prices to the exchange rate change is
delayed and because the volume of exports increases, as discussed above. Thus, the textbook
simulation suggests that the U.S. nominal trade
balance does not worsen much after a depreciation and that a net improvement occurs quite
soon. (See the box on the current account.)
The second simulation assumed a path for the
dollar identical to the one in the textbook simulation, but incorporated feedback responses to
the dollar's decline. The third simulation also
included these secondary effects, but examined
the results of a continuous decline in the dollar's
exchange value at an annual rate of 10 percent. 15
Because domestic and foreign income, prices,
and interest rates are predetermined in the Board
staff model, these simulations required some
assumptions about the reactions of these variables to the depreciation of the dollar. Feedbacks
to these predetermined variables were obtained
from simulations using the Federal Reserve
Board staff's Multicountry Model (MCM) and
638
Federal Reserve Bulletin • October 1988
The Current
Account
The current account balance is a current dollar
measure that includes the net balance on service
transactions and unilateral transfers as well as the
merchandise trade balance. Included in the service
balance are net investment income and net income
from other service items (such as transportation
and tourism). Although the service account has
moved from surplus toward deficit in the 1980s as
liabilities have accumulated to finance the deficit on
the current account, the very large deterioration in
the current account during this period reflects
mostly developments in the trade balance.
Despite the close relationship between the current account and the nominal trade balance, the
J-curve on the current account is not identical to
the adjustment path of the trade balance. The
reason is that net investment income receipts increase immediately as the dollar depreciates. That
immediate increase reflects a capital gain from the
revaluation of some assets and expenses denomi-
assuming an unchanged monetary policy (as indexed by the rate of growth of M2) after the
exchange rate shock. 16 ' 17 Thus, the feedbacks for
the predetermined variables correspond to estimates of the changes in income, prices, and
interest rates that would result from an outward
shift in aggregate demand in the United States,
given unchanged growth in money.
When secondary effects are incorporated, the
trade balance adjusts in roughly the same pattern
as it does in the textbook case, but the overall
improvement is somewhat less (chart 6). This
difference results because the feedback effects of
the depreciation serve to increase U.S. growth
and lower foreign growth, increasing imports and
reducing exports relative to the first simulation.
After a continuous decline in the dollar, the
effects on the external balance are stretched out
(reflecting a series of overlapping J-curves resulting from a small depreciation in the dollar each
quarter). As in the first and second simulations,
the trade balance worsens initially, but an improvement is evident by the sixth quarter.
As the simulation experiments illustrate, the
length of time between the initial depreciation of
the dollar and an improvement in the nominal
nated in foreign currencies that are held by foreign
affiliates of U.S. corporations. In addition, there is
a smaller continuing positive effect as the flow of
income receipts that are denominated in foreign
currencies are translated into dollar terms. Since
the dollar began to depreciate in the second quarter
of 1985, capital gains on net investment-income
receipts due to such revaluation effects have averaged more than $11 billion at an annual rate; most
of this sum is attributable to the effects of currency
revaluation.
These revaluation effects are important in explaining the J-curve in the current account (chart 6).
For a discrete change in the value of the dollar, the
current account records an immediate improvement. After the initial positive revaluation effects,
the response of the current account is more in line
with that of the trade balance. When the depreciation of the dollar is continuous, the current account
shows a small initial improvement, and the revaluation effects are phased in continuously as the dollar
declines.
trade balance depends on how long the dollar
depreciation lasts; but even with a continuous,
smooth depreciation, the negative J-curve effect
is small and soon overcome.
SENSITIVITY
OF THE
J-CURVE
To assess the reliability of the simulation results,
it is necessary to know how sensitive the J-curve
path is to changes in the estimates of key model
parameters. Clearly, if the adjustment path were
highly sensitive to small variations of the parameters, then the response of the nominal external
balance to exchange rate shocks would be subject to a good deal of uncertainty. The evidence
in this area is mixed. In one model of bilateral
trade flows, the timing but not the magnitude of
the overall adjustment is sensitive to changes in
relationships between exchange rates and import
prices. 18 On the other hand, in the Board staff
model, neither the magnitude nor the timing of
the adjustment path is very sensitive to changes
in relationships between exchange rates and import prices. However, changes in the response of
import volumes to relative prices (with no change
Exchange Rates, Adjustment,
in the sensitivity of import prices to exchange
rates) generate a substantial movement in both
the timing and the magnitude of the eventual
adjustment. 19
While sensitivity analysis helps to assess the
likelihood of any particular predicted adjustment
path, it is not suited to examining some issues.
For instance, if the adjustment path is sensitive
to factors that are not included in the empirical
model, then the response to the determinants of
trade flows, such as changes in exchange rates,
may not be accurately predicted. Specifically,
exchange rate expectations may be important in
the adjustment of the trade balance. 20 The expectation of further depreciation of the dollar could
stimulate imports for a time, as importers temporarily step up demand for products they expect
to be yet more expensive tomorrow. If expectations are important, then using a model that
ignores them may well lead to underpredictions
of the magnitude of the initial negative portion of
the J-curve as well as of the time until a net
improvement. As a related point, the response to
exchange rates may depend on whether these
changes are perceived as permanent or transitory; if the model's equations do not make this
distinction, then the model may not accurately
predict the overall response to the shock.
DISAGGREGATING THE J-CURVE
The response of the aggregate nominal external
balance to changes in exchange rates is an amalgam of responses in individual markets. Market
structure and behavior can differ markedly
among product categories, so that the response
in a particular market may look quite different
from the aggregate response. To understand the
individual responses that compose this aggregate
adjustment process, it helps to examine trade
developments and J-curves for certain broad
commodity groups. The examination here focuses on three of six broad end-use categories:
non-oil industrial supplies, capital goods excluding automobiles, and consumer goods, which
together accounted for about 80 percent of the
volume of nonagricultural exports and about 70
percent of the volume of non-oil imports in 1987
(table 2).21
and the J-Curve
639
2. Composition of U.S. trade,
by end-use category, 1987
Percent of volume
End-use category
Exports
Non-oil
imports
Foods, feeds, and beverages
Non-oil industrial supplies
Capital goods (excluding automobiles).
Automobiles
Consumer goods
Other
10.7
24.9
39.1
8.3
6.0
11.0
6.6
20.5
27.5
18.9
21.4
5.1
100.0
100.0
Total, all end-use categories
SOURCE. Survey of Current Business, vol. 68 (July 1988), table 4.4,
p. 70.
Until 1984, the United States was a heavy net
exporter of industrial supplies; since that time,
net trade in this sector has shown either a small
surplus or a deficit, as imports of these products
have grown (chart 7). Exports of capital goods
have tended to dominate imports and nominal
trade has shown a surplus, while trade in consumer goods has been in deficit because imports
in this category are so important. During the
early 1980s, net nominal trade declined for all
three of these end-use categories, reflecting the
effects of the substantial appreciation of the
dollar. The timing of the improvement in the
trade position subsequent to the decline in the
dollar since early 1985 has differed for these
categories, although by the middle of this year,
each of the individual balances evidenced some
improvement. Net nominal trade in industrial
supplies began to improve in late 1986, while net
trade in capital goods did not begin to trend
upward until the middle of 1987. The improve
7. N o m i n a l external b a l a n c e s f o r
selected p r o d u c t categories
Billions of dollars
^
50
Capital goods
«
25
^
+
^
Industrial supplies and materials
Consumer g o o d s S ^
I
1978
i
i
1980
i
i
1982
i
i
1984
1986
1988
640
Federal Reserve Bulletin • October 1988
ment in both categories was generated largely by
strong growth in exports reinforced by moderation in the growth of imports. Consumer goods,
on the other hand, have registered net improvement only over the first half of 1988, because
imports, stimulated by rising domestic demand,
have been slow to respond to the significant
decline in the dollar.
The structure and the length of the adjustment
lags in the estimated equations used to generate
J-curves for industrial supplies, capital goods,
and consumer goods are practically identical to
those of the aggregate equations in the Board
staff model. Unlike the aggregate equations,
however, these equations were estimated using
values of explanatory variables (such as production costs, exchange rates, domestic prices, and
income) that are specific to the particular category and therefore reflect the specific developments in that market. 22 Although the individual
responses were not constrained to "add up" to
the aggregate response, the product adjustment
path illustrates the process that underlies the
aggregate response.
Like the textbook J-curve described above,
the sectoral J-curves were generated assuming a
one-time dollar depreciation of 10 percent in the
first quarter of the simulation and no secondary
effects to income and prices (chart 8). For industrial supplies, the initial negative path of the
J-curve is quite deep, indicating the rapid response of import prices of these products to
exchange rate changes. The negative portion is
short, however, and a net improvement is soon
realized. The adjustment path of capital goods
has no negative portion, while net trade in con-
sumer goods appears unresponsive to exchange
rate changes.
The way the adjustment paths for the three
product groups differ helps explain the uncertainty surrounding the aggregate J-curve.
Changes in the dollar's exchange value may be
dominated by movements against one or several
currencies, and not distributed proportionately
against all currencies. 23 The size and the timing
of the aggregate adjustment of the trade balance
will then depend on the size of the change in the
exchange rate of the dollar against the currency
of each U.S. competitor; on the particular kind of
trade involved; and on the characteristic rapid or
sluggish response to exchange rate changes. For
example, if the dollar depreciates relatively more
against currencies of countries that are heavily
involved in trade of capital goods, then the net
improvement in the nominal trade balance will
occur immediately, other things equal. Examination of the adjustment paths of the particular
products thus helps point up the range of uncertainty in the aggregate response.
THE J-CURVE AND PERSISTENCE
OF THE TRADE DEFICIT
Many observers have concluded that the J-curve
phenomenon is responsible for the persistence of
the U.S. nominal trade deficit. A discussion of
the recent behavior of import prices and a simulation with hypothetical, counterfactual assumptions can test the validity of that conclusion.
Import
8. J - c u r v e f o r selected p r o d u c t categories
Billions of dollars
^Industrial supplies and materials
-Capital goods
6
8
Quarter
10
— 5
Prices
Estimates made with the Board staff model of the
adjustment lags in trade equations reflect average
historical relationships among exchange rates,
prices, and quantities. Over the past two years,
import prices appear to have responded more
slowly to the depreciation of the dollar than
historical experience predicted. Since mid-1985,
the actual rise in import prices on average, as
measured by the implicit deflator for non-oil
imports in the national income and product accounts, has been smaller than both the rise in the
model estimate of the deflator and the rise in the
Exchange Rates, Adjustment, and the J-Curve
9 . N o n - o i l i m p o r t prices 1
Index, 1980=100
641
been partially responsible for the apparent unresponsiveness of import prices to the decline in
the dollar since early 1985.
Foreign prices in dollars
Non-oil import prices Model estimate
—
N
V
/
—
—
Hypothetical
/
I
O
Non-oil import prices
75
Actual
1
1978
1
1
1980
1
1
1982
1
1
1984
1
1
1986
1
1988
1. Foreign price levels are consumer price indexes in 10 industrial
countries and 8 developing countries (in dollars). The measure of
import prices used is the NIPA implicit deflator for non-oil imports.
average level of foreign consumer prices in dollars (chart 9).
Several developments explain the failure of
import prices to show the anticipated increase. 24
In brief, foreign suppliers appear to have responded to the recent depreciation of the dollar
by cutting profit margins rather than by increasing dollar prices, thus slowing the increase in
import prices relative to historical experience.
Furthermore, estimates of foreign production
costs suggest that they may actually have been
declining somewhat (or at least increasing less
than foreign consumer prices) in some countries;
thus, estimates of import prices based on
changes in foreign consumer prices could have
meant an overprediction of the rise in import
prices following the dollar's depreciation. Finally, the apparent lack of response of U.S.
import prices also may be an artifact of the price
measure. Prices of business machines (primarily
computers and related products) have been declining over the recent period, and the share of
business machines in overall imports has been
expanding. In a price index with variable
weights, such as the NIPA implicit deflator, such
developments tend to depress the overall level of
import prices. Research by Federal Reserve
Board staff indicates that while some erosion of
foreign profit margins may have caused import
prices to respond less than they have in the past,
prices of imports excluding business machines
have been predicted more accurately by standard
model equations than have aggregate indexes of
import prices. Such a difference suggests that
import prices of business machines may have
J-Curve
O
In assessing the effect of the J-curve phenomenon on the nominal trade balance after the dollar
depreciation that began in early 1985, the issue is
not whether the nominal trade balance has begun
to register net improvement, but rather whether
the nominal trade balance has improved more
than it would have had the dollar never declined.
This question can be addressed through a simulation exercise that traces out the path the nominal trade balance would have taken had the
dollar remained at the peak it reached in the first
quarter of 1985.25 The difference between the
actual and the estimated trade balance gives the
"J-curve" for the hypothetical experiment (chart
10).26 This exercise suggests that the J-curve
effects associated with the depreciation of the
dollar did not substantially worsen the nominal
trade balance. On the other hand, those effects
did tend to postpone the improvement in the
nominal trade balance. In the hypothetical adjustment path, the negative portion of the J-curve
is deeper and lasts longer than that estimated for
a continuous decline in the dollar of 10 percent at
an annual rate. This difference appears because
the hypothetical J-curve is generated from a
particular series of unequal continuous depreci-
10. E f f e c t o f d e p r e c i a t i o n o n n o m i n a l m e r c h a n d i s e
trade b a l a n c e , c o u n t e r f a c t u a l e x p e r i m e n t
Billions of dollars
1985
1986
1987
1988
642
Federal Reserve Bulletin • October 1988
ations; the average depreciation in 1986 exceeded that recorded in 1985. Nevertheless, as
chart 10 shows, the actual nominal trade balance
improved relative to the hypothetical trade balance beginning in the first quarter of 1987, and
that improvement is estimated to have exceeded
$65 billion by the middle of 1988.
and imports—exports totalled roughly $250 billion in 1987, imports exceeded $400 billion—the
rate of growth in exports must exceed the rate of
growth in imports by a substantial margin for the
trade balance merely to remain unchanged.
Thus, factors other than the J-curve phenomenon
are largely responsible for the persistence of the
U.S. trade deficit.
CONCLUSION
This article has discussed the adjustment path of
the U.S. nominal trade balance in response to a
decline in the exchange value of the dollar,
popularly termed the J-curve. Some analysts
have claimed that negative J-curve effects are
responsible for the persistence of the U.S. trade
deficit. 27 The analysis presented in this article
does not support that claim. First, in general, the
initial, negative portion of the adjustment path is
shallow and relatively short-lived (but depends
on the particular path of the dollar depreciation).
Furthermore, import prices have responded less
in the recent period to declines in the dollar's
exchange value than it seemed they would in the
light of historical experience, thereby further
muting the J-curve effect. Finally, according to
the results of a hypothetical simulation, regardless of the initial negative portion of the J-curve,
since early last year the nominal trade balance
has been improving relative to the trade balance
that would have ensued had the dollar never
declined from its peak.
The question is, then, how to explain the
continued widening of the external deficit
through the end of 1987. An answer to this
question involves several factors. First, the gap
that developed during the early years of this
decade between the growth rates of U.S. income
and domestic demand on one hand and foreign
income and domestic demand on the other, persists. Accompanying this gap has been the worsening of the Latin American debt problem, which
has tended to slow the expansion of exports to
many traditional U.S. markets. Second, because
the adjustment process involves long lags, the
substantial appreciation of the dollar through
early 1985 continued for some time to have
negative effects on the external balance. Third,
given the large difference in the levels of exports
NOTES
1. This index of the dollar exchange rate (foreign currency
units per dollar) is a weighted average of bilateral exchange
rates between the United States and the other Group of Ten
countries (Canada, Belgium, France, Germany, Italy, Japan,
Netherlands, Sweden, Switzerland, and the United Kingdom); the index is constructed using average weights for each
country in multilateral trade for the years 1972 to 1976, with
March 1973 equal to 100.
2. The current account experienced a transitory improvement in the fourth quarter of 1987 that was due to the
inclusion in direct investment receipts of the effects of the
dollar's depreciation on the valuation of assets (and liabilities) in foreign currencies associated with those investments.
Thus, the worsening of the trade deficit in the fourth quarter
was partly offset in the current account. In the third quarter
of 1987, the current account deficit was almost $170 billion at
an annual rate, and for the first quarter of this year it was
about $148 billion.
3. While the textbook account of the J-curve considers
both the direct and the indirect effects described here, it does
not incorporate the secondary effects of a change in exchange
rates on domestic and foreign income and prices.
4. The effect of changes in exchange rates on the prices of
exports is small. While this effect is included in the simulation
results discussed below, it is not highlighted in the discussion.
5. Throughout this article, it is assumed that a depreciation
of the dollar results eventually in a net improvement of the
trade balance. Although this presumption is standard and is
supported by empirical findings, it is not necessarily true
unless the Marshall-Lerner condition holds. The MarshallLerner condition specifies long-run responsiveness of export
and import volumes to a decline in exchange rates that is
necessary if the trade balance is to improve; for example, if
quantities of exports and imports are completely unchanged
by a decline in the value of the dollar, then a net improvement
in the trade balance will never materialize.
6. William L. Helkie and Peter Hooper, "An Empirical
Analysis of the External Deficit, 1980-86," in Ralph C.
Bryant, Gerald Holtham, and Peter Hooper, eds., External
Deficits and the Dollar (Brookings Institution, 1988), pp. 1056.
7. A conference on comparative model performance at the
Brookings Institution in January 1987 examined the parameters, system properties, historical tracking performance, and
simulation results for six model groups. The different lag
structures for each model involved in the conference are
summarized in External Deficits and the Dollar, annex, pp.
101-39.
Exchange Rates, Adjustment, and the J-Curve
8. The estimation period of the model is 1968:1 through
1984:4. Recent work by Baldwin and others has suggested
that a structural shift in the relationship between exchange
rates and import prices may have occurred during the
1980s. The evidence from this literature is that the effect of
exchange rate changes on import prices has been attenuated;
this attentuation would tend, ceteris paribus, to weaken the
initial negative J-portion in the adjustment of the trade
balance. See Richard Baldwin, "Some Empirical Evidence
on Hysteresis in Aggregate U . S . Import Prices," National
Bureau of Economic Research Working Papers 2483 (January
1988).
9. The Board staff model equation for the price of non-oil
imports includes a measure of foreign prices, exchange rates,
and an index of non-oil commodity prices as explanatory
variables. Changes in exchange rates affect the price of
non-oil imports both directly and indirectly through the effect
on commodity prices. The response in table 1 and chart 5
includes both direct and indirect effects.
10. The adjustment paths traced out in charts 5, 6, and 8
were calibrated to the levels of trade in the first quarter of
1988.
11. An earlier discussion of these adjustment factors is
found in Helen B. Junz and Rudolf R. Rhomberg, "Price
Competitiveness in Export Trade Among Industrial Countries," American Economic Review, vol. 63 (May 1973), pp.
412-18..
12. More generally, a change in the dollar's exchange value
can result from a variety of causes. Policy changes that affect
the dollar ordinarily affect the path of other macroeconomic
variables that will also influence trade prices and volumes.
For example, an easing of monetary policy that stimulates the
growth of income in addition to a depreciation of the dollar
could cause a worsening of the trade balance, if the stimulus
to imports (from the increase in income) were to outweigh the
boost to exports (from the decline in the dollar).
13. Unlike the strict textbook formulation, the simulated
J-curve includes the adjustment lags in the Board staff
model.
14. The exchange rate measure used in the Federal Reserve
Board's model is an 18-country index, which includes 8
developing countries (Brazil, Hong Kong, Malaysia, Mexico,
the Philippines, Singapore, South Korea, and Taiwan) in
addition to the G-10 countries. In this broader index, the G-10
countries have a weight in multilateral trade of about 80
percent. For all the simulation exercises, a nominal depreciation of 10 percent in the G-10 index was associated with a 5
percent decline in real terms against the currencies of the 8
developing countries. This decline translates into a real
decline of almost 9 percent in the G-18 index. For a detailed
discussion of different weighted average indexes of exchange
rates, see B. Dianne Pauls, "Measuring the Foreign Exchange Value of the Dollar," FEDERAL RESERVE BULLETIN,
vol. 73 (June 1987), pp. 411-22.
15. By the end of the 16-quarter simulation horizon, the
nominal G-10 dollar had depreciated 32 percent and the real
G-18 dollar index had declined 26 percent.
16. The MCM is a multicountry macro model with individual sectors for the United States, Canada, Germany, Japan,
and Great Britain. For further details, see Hali J. Edison,
Jaime R. Marquez, and Ralph W. Tryon, "The Structure and
Properties of the Federal Reserve Board Multicountry
Model," Economic Modelling, vol. 4 (April 1987), pp. 115315.
17. The following table gives the cumulative feedback
effects used in the reported simulations on the rate of increase
643
of U.S. consumer prices and real G N P and for the change in
the Treasury bill rate resulting from a one-time 10 percent
depreciation of the dollar:
Variable
4 quarters
8 quarters
12 quarters 16 quarters
Consumer prices
(percent)
Real GNP
(percent)
Treasury bill rate.
5
1.0
1.25
1.25
.2
.5
.4
1.0
.2
1.0
.0
1.0
Feedbacks to foreign prices were of roughly the same magnitude (but in the opposite direction) as the feedback effects
to U.S. prices. The effects on foreign G N P were about twice
the size (but in the opposite direction) of those on U . S . G N P .
18. Jaime Marquez, "Income and Price Elasticities of
Foreign Trade Flows: Econometric Estimation and Analysis
of the U.S. Trade Deficit," International Finance Discussion
Papers 324 (Board of Governors of the Federal Reserve
System, June 1988).
19. Ellen E. Meade, " U . S . External Adjustment in Response to the Lower Dollar: The J-Curve," in a volume
edited by Donald Fair reporting a conference, "The International Adjustment Process," sponsored by the Soci6t6 Universitaire Europ^enne de Recherches Financieres in Helsinki, Finland, May 18-21, 1988 (forthcoming).
20. See John F. Wilson and Wendy E. Takacs, "Expectations and the Adjustment of Trade Flows Under Floating
Exchange-Rates: Leads, Lags and the J-Curve," International Finance Discussion Papers 160 (Board of Governors of
the Federal Reserve System, April 1980).
21. The foods, feeds, and beverages category is netted out
of total exports to form nonagricultural exports.
22. For example, the export price of a category is explained
using the domestic producer price index for that category and
an index of the weighted average prices of foreign producers
for that category (the weights are category-specific export
shares), converted to dollar terms using an exchange rate
constructed with category-specific weights. For further details on the category-specific variables and the construction
of data, see Catherine L. Mann and Ellen E. Meade, "Empirical Analysis of Trade: A Disaggregated Approach"
(Board of Governors of the Federal Reserve System, N o v e m ber 1987).
23. Recall that the aggregate J-curve was generated assuming equal proportionate nominal depreciation against all G-10
currencies, and equal proportionate real depreciation against
the currencies of the 8 developing countries.
24. For a detailed discussion of these reasons, see Peter
Hooper and Catherine L. Mann, The Emergence and Persistence of the U.S. External Imbalance:
1980-87, Princeton
Studies in International Finance (forthcoming).
25. The level of the G-10 trade-weighted dollar was 156 in
the first quarter of 1985. The average depreciation of the
dollar was 11 percent in 1985, 16 percent in 1986, and 13
percent in 1987. The counterfactual simulation was generated
using the Board staff model of the U . S . current account, and
assuming the rough feedbacks on income, prices, and interest
rates implied in note 17.
26. The hypothetical trade balance discussed is not
adjusted to incorporate the model errors made during this
period. If the model errors made over the period of the
dollar's depreciation are unbiased estimates of the model
errors that would have been made had the dollar never
644 Federal Reserve Bulletin • October 1988
declined, then the hypothetical trade balance should be
adjusted to incorporate these errors. Including these errors
does not change the basic result of the simulation experiment:
the negative portion of the adjustment path is relatively short,
and the net improvement by mid-1988 is sizable.
27. For example, Koch and Rosensweig have pointed to a
"delayed J-curve," due to the sluggish response of import
prices during the recent period. In their "delayed J-curve,"
the net improvement in the trade balance is substantially
postponed relative to the textbook J-curve. This delayed
response relies on little or no adjustment of export volumes
after a change in the dollar, so that the eventual response of
import prices draws out the negative portion of the J-curve.
Finding a "delayed J-curve" is somewhat curious given that
Koch and Rosensweig discuss evidence of a substantial
responsiveness of export volumes to exchange rate changes.
See Jeffrey A. Rosensweig and Paul D. Koch, "The U.S.
Dollar and the 'Delayed J-Curve,' " Federal Reserve Bank of
Atlanta, Economic Review, vol. 73 (July/August 1988), pp. 2 15.
645
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report, covering the period May
through July 1988, 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.1
Market sentiment toward the dollar turned
strongly positive during the three months ending
in July, and the dollar moved higher for most of
the period. On balance, the dollar rose 9Vi percent in terms of other Group of Ten currencies on
a trade-weighted basis (Federal Reserve Board of
Governors staff index). But the increase against
individual currencies varied considerably. The
dollar rose approximately 12 percent against the
German mark and most continental currencies,
returning close to its level against the German
mark of a year earlier. It advanced a more
modest 6V2 percent and 9Va percent respectively
against the Japanese yen and against sterling,
remaining well below its levels of a year earlier.
Against the Canadian dollar, the dollar declined
1 Vz percent.
In keeping with the Group of Seven (G-7)
understandings about fostering exchange rate
stability—most recently reiterated in the Economic Declaration at the Toronto Summit in
June—the U.S. authorities entered the market at
times to counter the dollar's rise, operating in
coordination with other central banks. Market
sales of dollars by the U.S. authorities between
late June and the end of July totaled $2.9 billion,
all against German marks.
1. The charts for the report are available on request from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
Throughout the period, the dollar was buoyed
by any new signs of strength in the U.S. economy, which were thought likely to lead to a
tighter monetary policy and higher interest rates.
With statistics measuring U.S. economic growth
continuing to point to greater gains than had
previously been expected, market participants
recognized that the focus of policy attention had
shifted from concerns about recession to concerns about inflation. Statements by several Federal Reserve officials had conveyed uneasiness
about the potential risks for inflation of relatively
tight labor markets and capacity constraints in
some industries. As it was, short-term interest
rates in the United States had already firmed
somewhat between mid-March and the beginning
of May, maintaining and in some cases, increasing interest differentials favoring investment in
dollar-denominated assets.
Until mid-June, the factors supporting a higher
dollar were partially counterbalanced by uncertainty about the sustainability of external adjustment and about official reactions to any rise in
dollar exchange rates. Thus, the dollar's rise
early in the period was relatively modest. The
dollar strengthened more decisively after midJune, with market participants increasingly perceiving that international adjustment was indeed
proceeding and that major industrial nations
might tolerate some further increase in the dollar.
For the period as a whole, the dollar's upward
movement against the mark was especially pronounced. There were questions about the longerterm prospects for investment in the German
economy, in part stemming from labor costs and
continued concern over the government's intended imposition of withholding taxes on foreign investments in Germany. In these circumstances, there were heavy flows of capital out of
Germany, amounting in the first half of 1988 to a
record DM50.6 billion.
646 Federal Reserve Bulletin • October 1988
The dollar's relative stability against the yen in
part reflected favorable assessments of the outlook for the Japanese economy. In particular,
market participants were impressed with the
extent to which the Japanese economy appeared
to be adjusting to its external imbalances and
experiencing vigorous increases in domestic demand.
MAY TO MID-JUNE
The dollar rose gradually against the mark from
May until the middle of June. From its opening of
DM1.6775, it moved irregularly higher, breaking
through the DM1.70 level by mid-May and reaching DM1.7224 by mid-June. It showed little increase on balance against the yen, however.
The dollar's rise partly reflected a widening
perception that U.S. economic growth continued
to be buoyant and that the Federal Reserve's
policy stance might be tightened if pressures on
capacity became troublesome. The report in
early May of a decline in U.S. civilian unemployment to its lowest level in 14 years and of strong
gains in manufacturing employment, together
with a larger-than-expected upward revision in
first-quarter figures for the gross national product
later that month, provided further evidence that
economic activity was expanding rapidly. The
fact that the country's export sector and manufacturing industries were contributing strongly to
the economy's improved performance provided
reassurance that adjustment was well under way.
Moreover, market participants detected that the
Federal Reserve had adopted a firmer policy
stance. With financial markets generally reassured by the authorities' concern about inflation,
U.S. long-term interest rates eased somewhat,
and long-term interest rate differentials favoring
the dollar generally narrowed, though they remained strongly positive. But as U.S. short-term
interest rates rose, short-term differentials favoring the dollar widened between the beginning of
May and mid-June, especially against the European currencies.
In addition, confidence in the efforts of G-7
authorities to foster exchange rate stability had
increased as the dollar traded in a relatively
narrow range throughout the spring and U.S.
export performance improved. As a consequence, concerns about exchange rate risk diminished, and investors became more confident
about investing in dollar-denominated assets to
take advantage of the relatively high yields on
fixed-income securities available in the United
States.
Moreover, reports circulated in the market of
increased demand for dollars by banks' customers. Many firms had previously established shortdollar positions on the expectation that the threeand-one-half-year decline of the dollar would
continue well into 1988. When instead the dollar
firmed, several corporations and financial institutions began to consider that the dollar's long
decline had bottomed out. These market participants reportedly purchased dollars to avoid
losses that might result from having to convert
foreign currency receivables at still higher dollar
levels. In this environment, market professionals
perceived that a large magnitude of dollar buying
might come into the exchange market if exchange
rate expectations were to shift in favor of the
dollar, and a sense of upside risk for the dollar
began to emerge.
Under these circumstances, the market's longstanding bearish sentiment toward the dollar
lessened, but was not eliminated. One concern
was that tightening labor markets and capacity
1. Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution
Amount of
facility,
July 31, 1988
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
German Federal Bank
250
1,000
2,000
250
3,000
2,000
6,000
Bank of Italy
Bank of Japan
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
3,000
5,000
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
Foreign Exchange Operations
constraints in the United States might undermine
further adjustment as well as lead to a buildup of
inflationary pressures. This concern was reflected in the exchange markets when, on May
17, the dollar gained only modest ground from
the announcement of an unexpected improvement in the U.S. trade deficit for March. This
muted response occurred, in part, because the
data recorded a sharp rise in imports that, if
continued, might hinder further improvement in
the trade balance.
Another element of uncertainty about how far
the dollar might advance was the presumed reaction of foreign monetary authorities to any
significant exchange rate move. For several
months, rumors had circulated in the exchange
markets that those central banks that had intervened heavily to support the dollar in 1987 were
taking advantage of opportunities to sell dollars.
Talk of dollar sales by G-7 central banks intensified shortly after the release of the March trade
figures in mid-May. Throughout late May there
was persistent talk in the market that the Bundesbank was regularly selling dollars. Gradually,
market participants became convinced that foreign officials would act to contain the dollar's rise
through intervention. At the end of May, the
Bundesbank began selling small amounts of dollars openly at the Frankfurt fixing. On June 3, the
Bundesbank reported sharp declines in its net
monetary reserves, particularly in the foreign
currency reserves component. From late May
through mid-June, these declines, attributed by
the market largely to dollar sales, amounted to
DM7.4 billion. Press reports indicated that other
G-7 countries might also seek to reduce their
dollar holdings.
Market participants also began to anticipate
that foreign monetary authorities would take
647
advantage of any increases in U.S. interest rates
to increase their own interest rates. Monetary
aggregates were growing relatively rapidly in a
number of countries. Also, during the first week
of June, officials of several industrial countries
openly expressed concerns about a potential rise
in inflation worldwide against a background of
rising commodity prices. German and Japanese
officials also noted the inflationary impact of the
dollar's rise and underscored the importance of
maintaining domestic price stability.
In these circumstances, the dollar fluctuated
irregularly upward, as market participants
adjusted their evaluations of official attitudes
toward exchange rate movements. In the middle
of June, the dollar was trading about 2Vz percent
higher on balance against the mark and other
European currencies and was unchanged on balance against the yen from the beginning of the
period.
MID-JUNE THROUGH JULY
As time passed, market participants became increasingly impressed with the dollar's resilience,
they noted that the dollar had shrugged off both
intervention and statements by foreign officials
aimed at resisting the declines of their own
currencies. They also watched for reactions to
the Bundesbank's June 21 decision to increase
the interest rate on its repurchase agreements
and looked to the upcoming communique from
the summit meeting in Toronto for further indications of policy actions that might affect exchange rates.
On June 14, the announcement of a U.S. trade
deficit for April that was much smaller than
expected reassured market participants that the
2. Drawings and repayments by foreign central banks under special swap arrangements with the U.S. Treasury 1
Millions of dollars; drawings or repayments ( - )
Central bank drawing
on the U.S. Treasury
Central Bank of the Argentine Republic
National Bank of Yugoslavia
Central Bank of Brazil
1. Data are on a value-date basis.
2. No facility.
Amount of
facility
Outstanding,
as of
May 1, 1988
May
June
July
Outstanding,
as of
July 29, 1988
550.0
50.0
250.0
160.0
(2)
(2)
-160.0
0
0
0
50.0
0
0
-16.1
232.5
(2)
33.9
232.5
648 Federal Reserve Bulletin • October 1988
correction of global imbalances was continuing,
even in the face of a relatively robust U.S.
economy. The market's concerns that strong
domestic demand and capacity constraints would
limit the scope for further trade adjustment were
diminished by the data for April, which showed a
decline in imports. The dollar's reaction to this
set of trade figures was stronger than that of the
previous month, with dollar exchange rates moving up sharply to trade at DM1.7450 and Y126.50
soon after release of the trade figures.
Later in June, the Economic Declaration issued after the Toronto Summit left the market
with the impression that the G-7 monetary authorities would tolerate a further rise of the
dollar. Although the Declaration repeated the
precise words of the December 1987 statement
by the G-7, the dollar was already 8 percent
higher in terms of the mark than at the time of the
December statement. This different market environment, together with comments by several
officials following the Toronto meetings, led to an
interpretation that some further rise was acceptable.
As a result of these developments, the dollar
began to rise more quickly in late June. As the
dollar broke through DM1.80 and higher levels
not previously anticipated, there were reports of
corporations and financial institutions moving to
reduce their short-dollar positions. There were
also dollar purchases associated with the covering of options positions that had been established
in anticipation of a continued dollar decline.
In these circumstances, the U.S. authorities
entered the market for the first time during the
period on June 27. The authorities continued to
operate, intervening on 15 of the remaining 23
business days through the end of July and working closely in coordination with other central
banks to foster exchange rate stability.
There were several occasions during July
when upward pressure on dollar rates was considerable. Some of these occurred when new
economic statistics were released confirming the
buoyancy of the U.S. economy. The dollar was
especially well bid, for example, after the July 8
report of a further decline in U.S. civilian unemployment and after the July 27 release of GNP
data pointing to a seasonally adjusted rate of
growth of 3.1 percent for the second quarter. The
dollar also came into demand after the report on
July 15 of May trade figures that reassured market participants that U.S. trade adjustment remained on track. Meanwhile, press coverage of
Chairman Greenspan's congressional testimony
reinforced the expectation that the U.S. authorities stood ready to counter inflationary pressures. Under these circumstances, the dollar
generally moved up during early July, reaching
its highs of the period against the mark and the
yen at DM1.8925 on July 18 and Y135.55 on July
15 respectively. But by the end of July, the dollar
was trading off its highs at DM1.8780 and
Y133.15 respectively.
Between June 27 and July 29, the U.S. authorities sold a total of $2.9 billion in the market, all
against marks. Of the total, $1,317.5 million was
sold by the Federal Reserve and $1,612.5 million
was sold by the Treasury's Exchange Stabilization Fund (ESF). These operations were conducted in cooperation with other central banks.
In other industrialized countries, the authorities also intervened to sell dollars, on occasion in
substantial amounts. In addition, interest rates in
a number of foreign countries increased as the
authorities sought to limit the decline of their
currencies against the dollar or otherwise respond to signs of quickening price pressures.
In other operations, the U.S. authorities increased holdings of foreign currencies by
$1,282.3 million equivalent through sales of Special Drawing Rights (SDRs) and dollars to other
official institutions and through receipt of principal repayments and interest payments due to the
United States under the Supplementary Financing Facility of the International Monetary Fund.
3. Net profits or losses ( - ) on U.S. Treasury and
Federal Reserve current foreign exchange
operations 1
Millions of dollars
Period
May 1, 1988-July 31, 1988
Valuation profits and losses on
outstanding assets and liabilities
as of July 31, 1988
1. Data are on a value-date basis.
Federal
Reserve
0
1,101.2
U.S.
Treasury
Exchange
Stabilization
Fund
0
856.7
Foreign Exchange Operations
As of the end of July, cumulative bookkeeping
or valuation gains on outstanding foreign currency balances were $1,101.2 million for the
Federal Reserve and $856.7 million for the ESF.
These valuation gains represent the increase in
the dollar value of outstanding currency assets
valued at end-of-period exchange rates, compared with the rates prevailing at the time the
foreign currencies were acquired.
The Federal Reserve and the ESF regularly
invest their foreign currency balances in a variety
of instruments that yield market-related rates of
return and that have a high degree of quality and
liquidity. A portion of the balances is invested in
securities issued by foreign governments. As of
the end of July, holdings of such securities by the
Federal Reserve amounted to $1,408.2 million
equivalent, and holdings by the Treasury
amounted to the equivalent of $1,604.8 million.
During the period under review, the U.S.
Treasury, through the ESF, received repayment
of its financing facility for Argentina and participated in multilateral financing facilities for Yugoslavia and Brazil.
649
Argentina. On May 31, the Central Bank of the
Argentine Republic fully repaid the $160 million
second drawing of a $550 million short-term
financing facility provided by the U.S. Treasury
through the Exchange Stabilization Fund,
thereby fully liquidating the facility.
Yugoslavia. On June 10, the U.S. Treasury,
through the ESF, together with the Bank for
International Settlements (BIS) acting for several
central banks, agreed to provide $250 million in
short-term financing facilities to the National
Bank of Yugoslavia. On June 15, the National
Bank of Yugoslavia drew the full $50 million of
the ESF facility. On July 1, $16.1 million was
repaid.
Brazil. On July 27, the U.S. Treasury, through
the ESF, together with the BIS acting for several
central banks, agreed to provide $500 million in
short-term financing facilities to Brazil. The
ESF's facility was $250 million. On July 29, the
Central Bank of Brazil drew $232.5 million from
the ESF facility.
650
Industrial Production
tion of construction supplies remained sluggish.
At 137.7 percent of the 1977 average, the total
index in July was 5.4 percent higher than it was a
year earlier.
In market groups, output of consumer goods
advanced 0.3 percent further in July, reflecting
gains in home goods, such as appliances, as well
as in nondurable consumer goods. Automobile
assemblies in July, at an annual rate of 7.1 million
Released for publication August 15
Industrial production increased 0.8 percent in
July, compared with the rise of 0.4 percent in
June. The July strength was mainly related to
another sizable gain in the output of business
equipment as well as to sharp increases in both
durable and nondurable materials. In contrast,
auto assemblies decreased in July, and produc-
Ratio scale, 1977 = 100
_ TOTAL INDEX
Products
140
120
Materials
100
80
_ MANUFACTURING
140
_ MATERIALS
Nondurable
Durable
120
-
100
Energy
I
1982
1984
1986
All series are seasonally adjusted. Latest figures: July.
1988
1982
1
1
1984
1
1
1986
1
1988
651
1977 = 100
Percentage change from preceding month
1988
1988
Group
June
July
Mar.
Apr.
May
June
July
Percentage
change,
July 1987
to July
1988
Major market groups
Total industrial production
136.6
137.7
.2
.5
.5
.4
.8
5.4
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment...
Defense and space
Intermediate products...
Construction supplies.
Materials
145.4
143.9
133.0
125.2
135.8
158.2
184.3
150.6
138.2
124.7
146.1
144.8
133.4
124.8
136.6
159.7
185.0
150.8
137.8
126.2
.2
.1
-.1
-.2
-.1
.6
-.6
.3
-.3
.3
.3
.5
.6
2.4
.0
.8
-1.1
-.2
.2
.8
.5
.6
.5
2.0
-.1
1.4
-1.2
.3
.5
.5
.4
.4
.3
-.4
.6
.9
-.7
.3
-.1
.4
.5
.6
.3
-.3
.6
1.0
.4
.2
-.3
1.2
4.8
5.0
3.5
3.7
3.4
9.7
-2.0
4.0
3.5
6.5
.2
.1
.4
.5
2.5
.8
.8
.8
.6
.6
5.6
7.0
3.7
4.9
4.2
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
.4
.3
.5
1.2
-2.0
143.1
142.8
143.6
104.1
115.8
142.0
141.7
142.5
103.5
115.2
.6
.6
.4
2.0
-2.0
.6
1.3
-.3
-1.6
1.2
NOTE. Indexes are seasonally adjusted.
units, were down from June's rate of 7.5 million
units, and the production of light trucks for
consumer use also decreased. The index for
business equipment rose rapidly again in July,
with all main sectors, except transit equipment,
advancing.
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
135.4
136.1
136.6
135.4
136.1
136.6
137.7
.5
.5
.4
.5
.5
.4
.8
Output of construction supplies has changed
little, on balance, since February, and declined
slightly in both June and July, owing mainly to a
strike in the lumber industry. The strong gains in
the output of materials in July reflected widespread gains, most notably in metals, paper,
chemicals, and coal.
In industry groups, manufacturing output increased 0.8 percent in July. In durable manufacturing, the gains were largest in primary metals
and nonelectrical machinery; large gains also
occurred in several nondurable industries. Production at both utilities and mines rose 0.6 percent.
652
Announcements
CHANGE IN THE DISCOUNT
RATE
The Federal Reserve Board announced on August 9, 1988, an increase in the discount rate from
6 percent to 6V2 percent, effective immediately.
The decision reflected the intent of the Federal
Reserve to reduce inflationary pressures. The
action was also taken in light of the growing
spread of market interest rates over the discount
rate.
In taking the action, the Board voted on requests submitted by the Boards of Directors of
the Federal Reserve Banks of Boston, New
York, Philadelphia, Cleveland, Richmond, Atlanta, St. Louis, Kansas City, and San Francisco. The Board subsequently approved similar
requests by the Federal Reserve Bank of Minneapolis, effective August 9; by the Federal Reserve Bank of Chicago, effective August 10; and
by the Federal Reserve Bank of Dallas, effective
August 11. The discount rate is the interest rate
that is charged depository institutions when they
borrow from their District Federal Reserve
Banks.
SURVEY ON USES OF FINANCIAL
BY SMALL BUSINESSES
SERVICES
The Federal Reserve Board on August 17, 1988,
announced plans for a national survey to obtain
information on the sources and use of credit and
other financial services by small businesses.
The major purpose of the survey, which is
being cosponsored by the Small Business Administration, is to determine how financial innovation and the deregulation of financial markets
have affected the financial behavior of small
business firms.
Beginning in September, more than 4,000 randomly selected small business firms will be surveyed, on a voluntary and confidential basis, by
the Research Triangle Institute in North Carolina, which has been commissioned to conduct
the survey. Businesses will be asked about the
types of financial services they are using and the
firms that supply them.
The study is the first comprehensive analysis
of the effect of financial deregulation on small
businesses and its implications for bank regulation. The information obtained will address questions in a variety of areas, including the demand
for currency and payments services, the effects
of bank mergers and holding company acquisitions of banks, and the impact of bank regulation
on small businesses.
The traditional view has been that most small
businesses were financed by local commercial
banks. The survey is designed to determine if this
view is still appropriate, given the entry of new
firms, such as thrift institutions and venture
capital firms, into the provision of payment and
credit services. Does the small business still
obtain its checking account, other bank accounts, and longer-term financing from its local
bank? Or, does the small firm, like large businesses, have the option of selecting a wider
variety of services from both bank and nonbank
firms located not just within its home town, but
across the nation?
A report on the findings will be published in the
F E D E R A L R E S E R V E B U L L E T I N early in 1990.
REVISIONS TO REGULATION
C
The Federal Reserve Board published on August
12, 1988, revisions to its Regulation C (Home
Mortgage Disclosure) to incorporate recent congressional amendments that extend the Home
Mortgage Disclosure Act (HMDA) permanently
and expand its coverage. The changes were
effective September 19.
The HMDA and the Board's Regulation C
require financial institutions that have more than
$10 million in assets and have home or branch
offices in metropolitan statistical areas (MSAs) or
primary metropolitan statistical areas to disclose
annually their originations and purchases of
home mortgage and home improvement loans.
653
Besides the permanent extension of the act, the
Congress also expanded the act's coverage to
include savings and loan service corporations
and mortgage banking subsidiaries of bank and
savings and loan holding companies. The
changes to the regulation also include redrafted
instructions to the reporting forms to further
simplify and clarify them.
AMENDMENT
TO REGULATION
T
The Federal Reserve Board approved on August
10, 1988, an amendment to Regulation T (Credit
by Brokers and Dealers) to make certain foreign
sovereign debt securities marginable. The
amendment was effective September 15, 1988.
The amendment will permit brokers and dealers to extend "good faith" loan value on longterm debt securities issued or guaranteed as a
general obligation by a foreign sovereign, its
provinces, states, or cities, or a supranational
entity if there is available an explicit or implicit
rating of the entity in one of the two highest
rating categories by a nationally recognized statistical rating organization.
UPDATE TO STAFF GUIDELINES ON
REGULATION
AA
The Federal Reserve Board published on July 29,
1988, the second update to its staff guidelines on
the Credit Practices Rule under Regulation AA.
The updated guidelines became effective August
1, 1988.
The Board's Credit Practices Rule, applicable
to all banks and their subsidiaries, addresses
unfair or deceptive acts or practices in the extending of consumer credit. The rule does not
apply to loans for the purchase of real property.
Banks are prohibited from using certain remedies
to enforce consumer credit obligations and from
using a late charge practice commonly referred to
as "pyramiding." The rule also provides protections for cosigners of consumer credit obligations.
PROPOSED AMENDMENT
TO REGULATION CC
The Federal Reserve Board has approved an
interim rule amending Regulation CC (Avail
ability of Funds and Collection of Checks) to
conform the definition of "paying bank" to the
Expedited Funds Availability Act as interpreted
by a recent court decision. The Board has
adopted amendments conforming to the court
decision on an interim basis to ensure that they
are in place when the act takes effect on September 1, 1988. The Board requested comment by
September 12, 1988, on the interim rule pending
consideration of a longer-term response to the
court decision.
CHANGES IN BOARD
STAFF
The Board of Governors announced the appointment of Roger T. Cole to the official staff as
Assistant Director in the Division of Banking
Supervision and Regulation, effective August 16,
1988. Mr. Cole will have responsibility for the
Financial Analysis, Policy Development, and
Policy Implementation Sections.
Mr. Cole came to the Board in September 1979
as a senior financial analyst, and since November
1987 has acted as Assistant to the Staff Director.
He has a B.A. in economics from Bucknell
University and an M.A. from Johns Hopkins
University.
The Board has also approved a restructuring of
the Division of Banking Supervision and Regulations, which realigns the responsibilities of several division officers.
The Board also announced the resignation of
Lynn Smith Fox, Special Assistant to the Board,
effective September 9, 1988.
SYSTEM MEMBERSHIP: ADMISSION OF
STATE BANKS
The following state banks were admitted to membership in the Federal Reserve System during the
period August 1 through August 31, 1988:
Pennsylvania
Media
West Chester
Security First Bank
Bank of the Brandywine
Valley
654
Record of Policy Actions of the
Federal Open Market Committee
MEETING HELD ON JUNE 29-30,
Domestic
Policy
1988
Directive
The information reviewed at this meeting suggested that economic activity was continuing to
expand at a relatively vigorous pace, though
apparently not quite as rapidly as earlier this
year. Growth in output was being sustained by
considerable strength in manufacturing; the latter
appeared to reflect in part a continuing improvement in the nation's trade balance as well as
ongoing expansion in domestic demands. Various measures of prices and wages suggested
some intensification of inflation in recent months.
Growth in nonfarm payroll employment moderated somewhat in April and May, particularly
in construction, trade, and services. However,
manufacturing employment and the average
workweek showed continued strength. In May,
household employment fell sharply and reversed
a large gain in April. The civilian unemployment
rate rose from 5.4 percent in April to 5.6 percent
in May, but it remained slightly below the firstquarter average.
Industrial production increased considerably
in April and May. Assemblies of motor vehicles
and the production of capital goods rose substantially in both months. The output of materials
also strengthened over the two months, but that
of nonauto consumer goods edged down. There
were widespread increases in capacity utilization
rates in April and May. Those rates have risen to
high levels in primary processing industries.
After increasing appreciably in the first quarter, retail sales were little changed on balance
over April and May. Sales of durable goods
edged down from recent advanced levels, while
spending on nondurable goods extended the sluggish pattern in evidence over the previous two
quarters. Housing starts fell to an annual rate of
1.38 million units in May, down from a rate of
approximately 1 Vi million units over the preceding three months. Despite the decline, data on
building permits and home sales suggested that
the pace of housing activity was little changed.
Business fixed investment also appeared to
have leveled off at a high rate recently. Outlays
for structures increased in April, particularly in
the industrial sector, but new commitments for
nonresidential construction were trending down.
While new orders for nondefense capital goods
showed little change in April and May, the latest
survey data implied further gains in capital
spending over the second half of 1988. Nonfarm
inventory investment in April remained close to
its first-quarter pace. The buildup in stocks continued to be sizable in manufacturing and wholesale trade and was concentrated in industries
experiencing strong domestic and foreign demand. At the retail level, nonauto inventory
investment slowed sharply in April, while inventories of automotive products rose somewhat
after declining substantially in the first quarter.
The U.S. merchandise trade deficit narrowed
in April on a seasonally adjusted basis, essentially reflecting a decline in imports across a wide
range of commodity categories. Exports fell
slightly in April after a large increase in March.
Real economic activity expanded strongly during
the first quarter in most of the major foreign
industrial countries, but available indicators
pointed to some slowing in the second quarter,
while inflation remained subdued.
Over April and May, the consumer price index
rose at about the average pace of the first quarter, despite a sizable advance in retail food and
energy prices. At the producer level, prices of
finished goods continued to increase in May at
the quickened pace of the previous two months.
Prices of a broad range of commodities, particularly agricultural goods, increased sharply in the
655
past few weeks, in part because of the effects of
the drought. The rise in average hourly earnings
of private nonfarm workers picked up significantly in April and May.
The dollar firmed considerably in foreign exchange markets from late May through mid-June,
and it subsequently appreciated further in the
days leading up to the Committee meeting. In
relation to other G-10 currencies, the dollar finished the period on average about 6 percent
above its level at the time of the previous Committee meeting on May 17. Continuing improvement in the U.S. trade balance and perceptions
that inflationary pressures would be resisted with
tighter monetary policy helped to strengthen the
dollar.
At its previous meeting in May, the Committee
adopted a directive that called initially for maintaining the existing degree of pressure on reserve
positions. The Committee agreed that some
slight firming would be implemented after a short
interval following this meeting, assuming that
economic and financial conditions did not diverge significantly from the members' expectations. In particular, the conduct of open market
operations would take account of conditions in
financial markets, the strength of the business
expansion, indications of inflation, the performance of the dollar in foreign exchange markets,
and the behavior of the monetary aggregates.
Later in the intermeeting period, some added
reserve restraint would be acceptable, or some
slight lessening of reserve pressure might be
acceptable, depending on ongoing economic and
financial developments. The contemplated reserve conditions were expected to be associated
with growth in M2 and M3 at annual rates of 6 to
7 percent over the period from March to June.
The members agreed that the intermeeting range
for the federal funds rate should be raised by 1
percentage point to a range of 5 to 9 percent.
In accordance with the Committee's instructions, open market operations were directed
toward a slight increase in the degree of reserve
pressure starting in the latter part of May. In the
two reserve maintenance periods ending June 15,
adjustment plus seasonal borrowing rose to an
average of $530 million. That average included a
bulge over the Memorial Day holiday in late
May. The implementation of firmer reserve con-
ditions, interacting with market expectations of a
tighter monetary policy and some seasonal pressures in the money market, contributed to an
increase in the federal funds rate from about 7
percent at the time of the May meeting to around
73/s to IV2 percent by mid-June. Subsequently, a
marginal further increase was sought in the degree of reserve restraint. This further adjustment
in open market operations was made in the
context of a flow of economic information that
suggested a continuing risk of greater inflation
and a directive that called for evaluating new
economic data with a greater readiness to tighten
than to ease. Adjustment plus seasonal borrowing averaged about $520 million in the reserve
maintenance period ending June 29. Federal
funds traded mostly around IVi percent during
this period but rose to around 8 percent late in
the month with the approach of the quarterly
statement date.
Most other short-term interest rates rose by lA
to Vs percentage point during the intermeeting
period. In contrast, bond yields declined by
about the same amount over the interval. Demands for long-term debt instruments appeared
to be buoyed by improved prospects for the
dollar and by signs that the economic expansion
might be moderating toward a more sustainable
pace in the context of perceptions that monetary
policy was being tightened in a timely manner.
Broad indexes of stock prices increased appreciably on balance over the period since mid-May.
Growth of M2 and M3 slowed substantially in
May, and Ml was about unchanged. This weaker
performance reflected mainly a runoff of taxrelated balances. Based on partial data through
midmonth, growth of the monetary aggregates
appeared to have rebounded in June, though it
remained below that registered earlier in the year
as increases in market interest rates in recent
months apparently began to damp demands for
money. Expansion in total domestic nonfinancial
debt thus far this year was estimated to have
moderated somewhat from the pace in 1987.
The staff projection prepared for this meeting
suggested that the economy would expand at a
more moderate pace in the quarters immediately
ahead. Growth in output would be held down by
the effects of the drought on agricultural output,
a decline in automobile production, and a more
656 Federal Reserve Bulletin • October 1988
restrained pace of nonfarm inventory accumulation than was thought to have occurred in recent
months. Over the longer run, the course of the
economy would depend to an important extent
on developments in financial markets. To the
degree that demands were strong, in a context of
an anti-inflation monetary policy, this would
show through in pressures in those markets tending to restrain domestic spending. The staff projection continued to anticipate a sluggish pace of
consumer spending, substantially slower growth
in business fixed investment, and subdued housing activity; it also assumed a mildly restrictive
fiscal policy. As in earlier projections, improvement in the trade balance was expected to contribute substantially to continuing growth in
overall economic activity. Prices and wages were
expected to rise somewhat more rapidly in the
quarters ahead because of the continuing effects
of the dollar's depreciation on prices of non-oil
imports and of reduced margins of unutilized
production resources. Increases in food prices as
a consequence of drought conditions were also
expected to contribute to inflationary pressures
over the quarters immediately ahead.
In the Committee's discussion of the economic
situation and outlook, the members generally
agreed that some moderation in the rate of economic expansion was a reasonable expectation
for the next several quarters. Indeed, although
the specific rate of economic growth that would
foster achievement of the Committee's price
stability goal could not be anticipated with any
degree of precision, the members generally
agreed that a considerably slower rate of expansion than appeared to have occurred in the first
half of 1988 would probably be needed, given
already high utilization rates of labor and capital
resources. Views differed, however, with regard
to the likely extent of the slowing that might
already be under way. Many members expressed
concern that, in the absence of tighter fiscal and
monetary policies, the momentum of the economy pointed to faster growth than would be
consistent with the Committee's objective of
containing inflationary pressures over time.
Some other members gave more emphasis to
recent data that seemed to point to more moderate economic growth. They noted that the higher
interest and exchange rates and the slower mon-
etary growth that had accompanied the tightening of monetary policy over the spring would be
restraining demands over coming quarters, and
they saw a lesser risk of a significant pickup in
inflation. In the view of these members, inflation
remained a major concern, but additional information was needed to assess whether the economy was on a course that would lead to an
intensification of price pressures.
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 prepared
specific projections of growth in real and nominal
GNP, the rate of unemployment, and changes in
the overall price level. With regard to rates of
expansion in real GNP, the projections had a
central tendency of 23A to 3 percent for 1988 as a
whole, implying a considerable slowing over the
second half of the year; for the year 1989 the
central tendency of the projections was 2 to 2Vi
percent or close to that implied for the second
half of this year. Projections of growth in nominal
GNP centered on rates of 53A to 63A percent for
1988 and 5 to 7 percent for 1989. The projected
rates of civilian unemployment had a central
tendency of 5lA to 53A percent for the fourth
quarter of 1988 and 5l/2 to 6 percent for the fourth
quarter of 1989. With respect to the rate of
inflation, as indexed by the GNP deflator, the
projections centered on rates of 3 to 33A percent
for 1988 and 3 to AVI percent for 1989. The
somewhat higher midpoint of the central tendency for 1989 overstated the anticipated pickup
in inflation for technical reasons, including a shift
in the composition of output that had produced
an unusually low increase in the deflator for the
first quarter of 1988. In making these projections
the members took account of the Committee's
objectives for monetary growth established at
this meeting and assumed that the fiscal policy
understandings reached by the Congress and the
administration in late 1987 would be fully implemented. The members also assumed that fluctuations in the exchange value of the dollar would
not be of sufficient magnitude to affect economic
growth and inflation materially in the period
through the end of 1989.
In their review of developments bearing on the
Record of Policy Actions of the Federal Open Market Committee
prospects for the economy, the members generally agreed that the outlook for consumer and
business spending pointed to slower growth in
domestic final demands over the next several
quarters, but they continued to anticipate that
further improvement in the nation's trade balance would provide a major impetus to sustained
moderate expansion in overall economic activity.
There was uncertainty about strength of demands in the economy from both domestic and
foreign sources. Some recent data on consumption and investment seemed to suggest that demands were moderating a bit in the second
quarter; moreover, the rise in interest rates
would be damping domestic demands over coming quarters, and the higher dollar, if it persisted,
could restrain the pace of external adjustment. In
addition, money stock growth, taking 1987 and
the first half of 1988 together, had been much less
rapid than in previous years, and this suggested
some restraint in the economy. On the other
hand, the economy seemed to have a good deal
of momentum and it was far from clear whether
the slowing, if any, would be sufficient to relieve
growing pressures on resources. Consumption
seemed sluggish, but restrained consumer spending was needed to allow production resources to
be shifted to sectors that competed in international markets. Reports from the Federal Reserve Districts suggested that the improved international
competitiveness
of
domestic
producers continued to boost manufacturing activity and that capital spending to expand and
modernize industry would likely continue fairly
robust, if below the extraordinary pace of the
first quarter. Economic activity abroad had been
somewhat stronger than expected, and if that
pattern continued it would tend to boost demands on U.S. exporters.
An important uncertainty in the economic outlook, at least in the view of some members, was
the prospective performance of inventories. A
somewhat reduced rate of inventory accumulation was desirable to prevent an excess buildup
in relation to sales, but a surge in inventory
investment could not be ruled out. Such a development would contribute to demand pressures
and would threaten the sustainability of the expansion. Members also noted that the drought
was having an adverse impact on agriculture in
657
several parts of the country, but its ultimate
effects on the economy were difficult to predict.
A timely improvement in moisture conditions
might yet limit that impact for many producers.
In areas unaffected by the drought, agricultural
producers were benefiting from higher prices of
agricultural commodities.
During the Committee's discussion, the members focused a great deal of attention on the
outlook for prices and wages. Specific developments, such as rising import prices and the
impact of the drought on agricultural prices, were
contributing to inflationary pressures. However,
of more fundamental concern to members was
the possibility that aggregate demand pressures
in the economy might prove excessive in relation
to available labor and capital resources, especially given the high levels of resource utilization
already prevailing. By some measures, prices
had risen somewhat more rapidly in recent
months, although any associated worsening of
inflationary expectations, at least as reflected in
certain key financial markets, appeared to have
been muted, perhaps by favorable reactions to
the System's tightening moves. With regard to
wages, some members commented that recent
wage data, on the whole, had an upward tilt.
Reports from different parts of the country suggested that labor market conditions were relatively taut in many, but not all, areas, but there
were few reports of substantial acceleration in
rates of wage increases. Many business executives were expressing concern, however, about
their continuing ability to restrain demands for
higher wages. For the moment, priority in labor
negotiations continued to be placed on job security issues, and many business executives, facing
domestic and foreign competition, continued to
emphasize measures to increase productivity and
hold down unit labor costs.
Against the background of the Committee's
views regarding the economic outlook and in
keeping with the requirements of the Full Employment and Balanced Growth Act of 1978 (the
Humphrey-Hawkins Act), the Committee at this
meeting reviewed the ranges for growth in the
monetary and debt aggregates that it had established in February for 1988 and decided on
tentative ranges for growth in those measures in
1989. The 1988 ranges included growth of 4 to 8
658 Federal Reserve Bulletin • October 1988
percent for both M2 and M3 for the period from
the fourth quarter of 1987 to the fourth quarter of
1988. A monitoring range of 7 to 11 percent had
been set for growth in total domestic nonfinancial
debt in 1988. For the year to date, cumulative
expansion of M2 and M3 had been in the upper
portion of the ranges established by the Committee, while expansion in nonfinancial debt had
been around the middle of its range. With regard
to Ml, the Committee had decided in February
not to set a numerical target for 1988 but to
appraise the behavior of this monetary measure
in terms of its velocity and against the background of developments in the economy and
financial markets and the nature of emerging
price pressures.
In the Committee's review of the ranges that
had been set for 1988, all of the members found
acceptable a proposal to retain the current
ranges. The Committee took account of a staff
analysis that indicated that a moderation in the
growth of M2 over the second half of 1988,
bringing M2 expansion to around the middle of
the Committee's range for the year, was consistent with the slower growth of income that was
both expected and desirable. The slower M2
growth also would reflect the impact of the rise in
market interest rates in recent months in association with an expectation that depository institutions characteristically would not adjust offering
rates fully on their interest-bearing deposits or
would do so only after a considerable delay.
Growth of M3 was projected to exceed that of
M2 during the remainder of 1988, reflecting needs
to finance fairly robust credit growth at depository institutions. Nonetheless, the growth of M3
was projected to remain well within the Committee's range for the year. Growth in total domestic
nonfinancial debt was expected to remain near
the middle of its range and thus still appreciably
above the projected expansion in nominal GNP,
in part because of a widened corporate financing
gap.
With regard to the ranges in 1989, the members
generally agreed that achievement of sustained
economic expansion and concurrent progress
toward price stability would require that the
ranges continue to be ratcheted down over time.
However, views differed as to how much, if any,
of this reduction should be scheduled at this time
for 1989—especially in light of the uncertainty at
mid-1988 as to what economic and financial conditions would prevail in 1989. With deposit rate
deregulation, the aggregates had become more
interest sensitive, and it had become increasingly
difficult to anticipate very far in advance what
rates of monetary growth would be appropriate.
Many members favored a reduction of a full
percentage point in the M2 range. They viewed
such a reduction as necessary to constrain income growth in a period when underlying inflation pressures could remain strong and velocity
could be increasing. Most other members favored a smaller reduction, or no reduction, in the
money growth ranges. Some anticipated that the
expansion in business activity as 1989 began
might well be slower than most members currently anticipated. Interest rates might also be
lower, thereby tending to damp velocity. Because of uncertainty about the outlook, there was
a risk that a part, or all, of any current reductions
might have to be reversed when the ranges were
reexamined in February, with adverse effects in
terms of the public's perception of the System's
anti-inflation resolve. In the view of these members, the ranges could be adjusted downward in
February, when the outlook for 1989 would be in
clearer focus. On the other hand, one member
felt that a reduction of more than 1 percentage
point in the M2 range probably would be needed
if progress was to be made in lowering the rate of
inflation in 1989. Despite their differing preferences and in recognition of the possibility of
revisions next February in these tentative
ranges, all but one member indicated they could
accept a reduction of a full percentage point in
the M2 range. This would communicate the System's intention to restrain any tendency for inflation to accelerate next year and, indeed, to
move over time toward price stability. In light of
the uncertainties, the Committee decided to retain the 4-point width for all the aggregates in
1989. Consideration would be given to narrowing
the ranges to 3 percentage points when they were
reviewed in February.
The tentative range for M3 was reduced by Vz
percentage point and left somewhat higher than
that for M2. Growth in M3 had shown a tendency
to exceed M2 growth over time and that pattern
was expected to continue. The range for M3 had
Record of Policy Actions of the Federal Open Market Committee
been set above that for M2 in a number of earlier
years. The monitoring range for expansion in
total domestic nonfinancial debt also was lowered on a tentative basis by Vi percentage point
from the range for 1988. In the economic environment projected for 1989, growth in nonfinancial debt was believed likely to slow a bit from
the already reduced pace now expected for all of
1988. Even so, with business loan demands expected to remain relatively strong, growth in
nonfinancial debt would probably continue to
exceed that of nominal GNP by a considerable
margin.
The Committee again decided not to set a
specific range for Ml for 1988 or 1989. The
velocity of Ml had exhibited sharp swings in
recent years. The latter were in part the result of
the increased sensitivity of Ml to fluctuations in
market interest rates since the deregulation of
deposit rate ceilings. The Committee concluded
that the prospective relationships between Ml
and aggregate measures of economic performance remained too uncertain to justify reliance
on this monetary aggregate as a guide for monetary policy, at least insofar as could be judged at
this point for next year. Similarly, after Committee consideration most members preferred not to
make use of another narrow monetary measure,
the monetary base, in guiding monetary policy.
In recent years, the base had varied less in
relation to economic activity and prices than had
Ml, but its velocity had nonetheless fluctuated
substantially, and sometimes unpredictably,
from year to year.
At the conclusion of this discussion, the Committee approved for inclusion in the domestic
policy directive the following paragraphs relating
to its objectives for the broader aggregates and
nonfinancial debt in 1988 and the role of Ml:
The Federal Open Market Committee seeks monetary and financial conditions that will foster 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 reaffirmed at this
meeting the ranges it had established in February for
growth of 4 to 8 percent for both M2 and M3, measured from the fourth quarter of 1987 to the fourth
quarter of 1988. The monitoring range for growth in
total domestic nonfinancial debt was also maintained
at 7 to 11 percent for the year.
659
With respect to M l , the Committee reaffirmed its
decision in February not to establish a specific target
for 1988 and also decided not to set a tentative range
for 1989. The behavior of this aggregate will continue
to be evaluated in the light of movements in its
velocity, developments in the economy and financial
markets, and the nature of emerging price pressures.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Black, Forrestal, Heller, Hoskins,
Johnson, Kelley, Parry, and Ms. Seger. Votes
against this action: None.
The following paragraph relating to the ranges
for 1989 was approved for inclusion in the domestic policy directive:
For 1989, the Committee agreed on tentative ranges
for monetary growth, measured from the fourth quarter of 1988 to the fourth quarter of 1989, of 3 to 7
percent for M2 and V/z to IVi percent for M3. The
Committee set the associated monitoring range for
growth in total domestic nonfinancial debt at 6Vi to
101/2 percent. It was understood that all these ranges
were provisional and that they would be reviewed in
early 1989 in the light of intervening developments.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Black, Forrestal, Heller, Hoskins,
Johnson, Kelley, and Parry. Vote against this action: Ms. Seger.
Ms. Seger dissented because she preferred to
retain—at least for now—this year's ranges of 4
to 8 percent for growth in both M2 and M3 for
1989. The economic outlook for next year remained highly uncertain at this point, and she
was concerned about reducing the ranges so far
in advance and incurring the risk of having to
reverse that decision next February. Such a
reversal would create unnecessary uncertainty
about the conduct of monetary policy. She recognized that further reductions in the M2 and M3
ranges might well be needed over time to bring
inflation under control, and she would be prepared to lower those ranges early next year if
economic conditions and prospects appeared to
warrant such an action at that time.
In the course of the Committee's discussion of
policy implementation for the period immediately ahead, considerable emphasis was given by
some members to the desirability of avoiding any
impression of a reversal in what was widely
660 Federal Reserve Bulletin • October 1988
perceived as the thrust of policy in recent months
toward a gradual increase in the degree of restraint. Several observed that the tightening actions of recent months had had a salutary effect
on financial markets, and, as evidenced in part by
the performance of the bond markets, on inflation expectations. The Committee did not contemplate any easing of policy in the current
economic environment, and some members were
concerned that maintaining the degree of reserve
pressure sought recently might well be interpreted as a move to an easier policy once the
effects of seasonal pressures on money market
interest rates subsided. In present circumstances
such a development could have an exaggerated
effect on inflationary attitudes and thus on the
effectiveness of monetary policy. A slight increase in reserve pressure would help to maintain
the general thrust of policy and its perception by
the markets; some further tightening could be
assessed as new data, especially pertaining to
inflation pressures, became available. Other
members preferred a somewhat greater degree of
firming immediately. They were concerned that
there were substantial risks that the tightening
actions to date might not be sufficient to limit the
expansion to a noninflationary pace, and some
felt that an increase in the discount rate might
helpfully complement open market operations at
this juncture.
Some members favored steady reserve conditions. They gave more emphasis to the anticipated lagged effects of earlier policy tightening
actions, and most of these members also interpreted recent information as indicative of some
slowing in the business expansion. They also
were concerned that any firming, however slight,
would add to existing upward pressures on the
dollar. The rise in the dollar already suggested
monetary restraint in the United States, and
further upward movements might work against
needed adjustment of external imbalances. Some
firming might well be needed at some point and
should be reflected in a directive that indicated a
greater willingness to tighten than to ease in
response to new data. However, economic and
monetary indicators in this view did not point to
the need for any tightening at this time.
According to a staff analysis prepared for this
meeting, the implementation of unchanged or
slightly firmer reserve conditions was likely to be
associated with some slowing in the growth of
Ml and M2 during the months ahead, largely
reflecting the impact on deposit growth of more
attractive yields on short-term market instruments stemming from the recent rise in market
rates. Growth in M3 might be better maintained
as banks and thrift institutions continued to finance still sizable expansion in credit demands
through issuance of managed liabilities. In these
circumstances, cumulative growth in both M2
and M3 through September would be expected to
remain in the upper halves of the Committee's
1988 ranges, albeit with M2 declining toward the
midpoint of its range.
With regard to possible changes in the degree
of reserve pressure during the intermeeting period, all of the members agreed that operations
should be adjusted more readily toward further
tightening than toward some easing. However,
those who preferred no change in the degree of
reserve restraint, at least for now, also thought
that the directive should incorporate such a presumption only if there were no immediate tightening. The relatively long span between meetings
and the importance of the forthcoming data to an
assessment of the evolving economic and price
outlook, might well require consideration of intermeeting adjustments in the stance of open
market operations in coming weeks. In addition,
developments in financial markets, especially the
foreign exchange market, could have an important effect on the timing of policy actions in the
near term, and such developments would need to
be reviewed carefully. The members generally
endorsed a suggestion to give particular weight to
incoming information bearing on the outlook for
inflation during the intermeeting period, though
the usual attention should also continue to be
given to the strength of the economic expansion,
conditions in domestic and foreign exchange
markets, and the growth of the monetary aggregates.
At the conclusion of the Committee's discussion, a majority of the members indicated that
they preferred or could accept a directive that
called for a slight increase in the degree of
pressure on reserve positions. The members indicated that somewhat greater reserve restraint
would be acceptable, or slightly lesser reserve
Record
of Policy Actions
restraint might b e acceptable, depending on indications of inflationary pressures, the strength of
t h e business expansion, developments in foreign
e x c h a n g e and domestic financial m a r k e t s , and
t h e behavior of the monetary aggregates. T h e
r e s e r v e conditions contemplated by the Committee w e r e e x p e c t e d to b e consistent with growth in
M2 and M 3 at annual rates of about 5V2 and 7
p e r c e n t respectively over the three-month period
f r o m J u n e through September. In keeping with
its decision on the longer-run ranges, the Committee decided not to indicate any expectations
regarding the growth of M l over the m o n t h s
immediately a h e a d . T h e m e m b e r s agreed that the
intermeeting range f o r the federal f u n d s rate,
which p r o v i d e s o n e mechanism f o r initiating consultation of the C o m m i t t e e when its boundaries
are persistently e x c e e d e d , should be left unchanged at 5 to 9 percent.
At the conclusion of the meeting the following
domestic policy directive was issued to the Federal R e s e r v e B a n k of N e w York:
The information reviewed at this meeting suggests
that economic activity has continued to expand at a
fairly vigorous pace. Growth in total nonfarm payroll
employment moderated somewhat in April and May.
The civilian unemployment rate rose to 5.6 percent in
May, a level just below its average in the first quarter.
Industrial production advanced considerably in April
and May. Retail sales were little changed on balance
over the two months after rising appreciably in the first
quarter. Available data indicate that business capital
spending has remained at the high level reached in the
first quarter. Housing starts fell sharply in May, but
other indicators suggested little change in the pace of
recent housing activity. The nominal U.S. merchandise trade deficit declined substantially in April, as
imports dropped sharply and exports were essentially
unchanged. Most measures indicate that prices and
wages have risen somewhat more rapidly in recent
months. Prices of a broad range of commodities,
particularly agricultural goods, have increased sharply
in the past few weeks.
Short-term interest rates have risen since the Committee's meeting on May 17, while bond yields have
moved lower. The trade-weighted foreign exchange
value of the dollar in terms of the other G-10 currencies appreciated considerably over the intermeeting
period.
Expansion of M2 and M3 slowed considerably in
May and Ml was about unchanged, but data available
for June suggested some pickup in monetary growth.
From a fourth-quarter base, M2 and M3 have grown at
rates in the upper portion of the ranges established by
of the Federal
Open Market
Committee
661
the Committee for 1988. Expansion in total domestic
nonfinancial debt for the year thus far appears to be at
a pace somewhat below that in 1987.
The Federal Open Market Committee seeks monetary and financial conditions that will foster 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 reaffirmed at this
meeting the ranges it had established in February for
growth of 4 to 8 percent for both M2 and M3, measured from the fourth quarter of 1987 to the fourth
quarter of 1988. The monitoring range for growth in
total domestic nonfinancial debt was also maintained
at 7 to 11 percent for the year.
For 1989, the Committee agreed on tentative ranges
for monetary growth, measured from the fourth quarter of 1988 to the fourth quarter of 1989, of 3 to 7
percent for M2 and 3!/2 to 71/2 percent for M3. The
Committee set the associated monitoring range for
growth in total domestic nonfinancial debt at 6V2 to
IOV2 percent. It was understood that all these ranges
were provisional and that they would be reviewed in
early 1989 in the light of intervening developments.
With respect to Ml, the Committee reaffirmed its
decision in February not to establish a specific target
for 1988 and also decided not to set a tentative range
for 1989. The behavior of this aggregate will continue
to be evaluated in the light of movements in its
velocity, developments in the economy and financial
markets, and the nature of emerging price pressures.
In the implementation of policy for the immediate
future, the Committee seeks to increase slightly the
existing degree of pressure on reserve positions. Taking account of indications of inflationary pressures, the
strength of the business expansion, developments in
foreign exchange and domestic financial markets, and
the behavior of the monetary aggregates, somewhat
greater reserve restraint would, or slightly lesser reserve restraint might, be acceptable in the intermeeting period. The contemplated reserve conditions are
expected to be consistent with growth in M2 and M3
over the period from June through September at
annual rates of about 5V2 and 7 percent, respectively.
The Chairman may call for Committee consultation if
it appears to the Manager for 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 5 to 9
percent.
Votes for the paragraph on short-term policy implementation: Messrs. Greenspan, Corrigan,
Black, Forrestal, Heller, Hoskins, Johnson, and
Parry. Votes against: Messrs. Angell, Kelley, and
Ms. Seger.
M e s s r s . Angell a n d Kelley a n d M s . Seger
dissented b e c a u s e they preferred to direct policy
662 Federal Reserve Bulletin • October 1988
toward maintaining unchanged conditions of reserve availability. They did not rule out the
possible need for some firming later during the
intermeeting period, subject to a review of developments by the Committee.
Mr. Angell indicated that he supported a continued slowing in the growth of the monetary
aggregates that was directed toward price level
stability over time. In his view, while longer-run
developments in prices remained somewhat uncertain, recent information from exchange rate
and commodity markets, as well as the monetary
aggregates, called for a pause in the process of
continuous tightening in order to gain additional
insight regarding the effects of previous actions.
In addition, the dollar had been under substantial
upward pressure, which had prompted central
bank intervention. He felt that the exchange rate
objectives implied in dollar sales would be frustrated by the double sterilization of reserves
implied by monetary tightening. He wanted to
call attention to the cross purposes of these
actions.
Mr. Kelley noted that he had supported firming
actions over the past several months, but he
could not concur with a decision to increase
reserve pressure further at this time. The economy, for the most part, was behaving satisfactorily, with evidence that the rate of growth in real
activity might be decelerating. He recognized
and shared the concern that inflation had the
potential to accelerate. However, there was insufficient evidence at this time to justify further
tightening that might foster undue slowing in
economic growth. He would be prepared to
support appropriate firming action later should
adequate evidence of increased inflationary pressures emerge, taking into account overall economic activity.
Ms. Seger emphasized that some current business indicators already pointed to a slower economic expansion. Moreover, the full impact of
the firming of policy in recent months had not yet
materialized. In the circumstances and also taking into account the strength of the dollar and the
absence of broad indications of significant acceleration in the rate of inflation, she believed that a
further increase in the degree of reserve restraint
represented an unwarranted risk at this time to
satisfactory economic performance.
663
Legal Developments
AMENDMENT
TO REGULATION
3. Section 201.52 is revised to read as follows:
A
The Board of Governors is amending 12 C.F.R. Part
201, its Regulation A (Extensions of Credit by Federal
Reserve Banks), for the purpose of increasing discount
rates. The decision reflects the intent of the Federal
Reserve to reduce inflationary pressures. The action
was also taken in light of the growing spread of market
interest rates over the discount rate. The Board acted
on requests submitted by the Boards of Directors of
the twelve Federal Reserve Banks. The discount rate
is the interest rate that is charged depository institutions when they borrow from their district Federal
Reserve Banks.
Effective on the dates specified below, 12 C.F.R.
Part 201 is amended as follows:
Part 201—Extensions of Credit by Federal
Reserve Banks
1. The authority citation for 12 C.F.R. Part 201
continues to read as follows:
Authority: Sees. 10(a), 10(b), 13, 13a, 14(d) and 19 of
the Federal Reserve Act (12 U.S.C. 347a, 347b, 343
et seq., 347c, 348 et seq., 357, 374, 374a and 461); and
sec. 7(b) of the International Banking Act of 1978
(12 U.S.C. 347d).
2. Section 201.51 is revised to read as follows:
Section 201.51—Short-term adjustment credit
for depository institutions.
The rates for short-term adjustment credit provided to
depository institutions under section 201.3(a) of Regulation A are:
Federal Reserve Bank
Rate
Effective
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
6.5
6.5
6.5
6.5
6.5
6.5
August
August
August
August
August
August
9,
9,
9,
9,
9,
9,
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
6.5
6.5
6.5
6.5
6.5
6.5
August
August
August
August
August
August
10, 1988
9, 1988
9, 1988
9, 1988
11, 1988
9, 1988
1988
1988
1988
1988
1988
1988
Section 201.52—Extended credit for depository
institutions.
(a) Seasonal credit. The rates for seasonal credit
extended to depository institutions under section
201.3(b)(1) of Regulation A are:
Federal Reserve Bank
Rate
Effective
Richmond
Atlanta
6.5
6.5
6.5
6.5
6.5
6.5
August
August
August
August
August
August
9,
9,
9,
9,
9,
9,
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
6.5
6.5
6.5
6.5
6.5
6.5
August
August
August
August
August
August
10, 1988
9, 1988
9, 1988
9, 1988
11, 1988
9, 1988
Boston
New York
Philadelphia
1988
1988
1988
1988
1988
1988
(b) Other extended credit. The rates for other extended credit provided to depository institutions under
sustained liquidity pressures or where there are exceptional circumstances or practices involving a particular
institution under section 201.3(b)(2) of Regulation A
are:
Federal Reserve Bank
Boston
New York
Philadelphia
Cleveland
Rate
Effective
Atlanta
6.5
6.5
6.5
6.5
6.5
6.5
August
August
August
August
August
August
9,
9,
9,
9,
9,
9,
1988
1988
1988
1988
1988
1988
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
6.5
6.5
6.5
6.5
6.5
6.5
August
August
August
August
August
August
10, 1988
9, 1988
9, 1988
9, 1988
11, 1988
9, 1988
664
Federal Reserve Bulletin • October 1988
These rates apply for the first 30 days of borrowing.
For credit outstanding for more than 30 days, a flexible
rate will be charged which takes into account rates on
market sources of funds, but in no case will the rate
charged be less than the basic discount rate plus
one-half percentage point. Where credit provided to a
particular depository institution is anticipated to be
outstanding for an unusually prolonged period and in
relatively large amounts, the 30-day time period may
be lengthened or shortened.
FINAL RULE—REVISIONS
TO REGULATION C
The Board of Governors has adopted a revised
12 C.F.R. Part 203, its Regulation C (Home Mortgage
Disclosure). The revised regulation incorporates recent amendments to the Home Mortgage Disclosure
Act that were contained in the Housing and Community Development Act of 1987. These statutory amendments permanently extend the act and expand its
coverage to include mortgage banking subsidiaries of
bank and savings and loan holding companies, and
savings and loan service corporations that originate or
purchase mortgage loans. Other revisions stem from a
review made in accordance with the Board's Regulatory Improvement Program.
The HMDA-1 form, which is used by banks, thrifts,
and other depository institutions for reporting loan
data, remains essentially unchanged. The Board has
adopted a separate form HMDA-2 for use by mortgage
banking subsidiaries of holding companies and newly
covered service corporations, because these institutions are required to exclude FHA loans from their
reports.
Effective September 19, 1988, 12 C.F.R. Part 203 is
revised to read as follows:
pursuant to the Home Mortgage Disclosure Act
12 U.S.C. 2801 et seq.). The information collection
requirements have been approved by the U.S. Office
of Management and Budget under 44 U.S.C. 3501 et
seq. and have been assigned OMB No. 7100-0090.
(b) Purpose.
(1) This regulation carries out the purposes of the
Home Mortgage Disclosure Act, which is intended
to provide the public with loan data that can be
used:
(i) to help determine whether financial institutions
are serving the housing needs of their communities; and
(ii) to assist public officials in distributing public
sector investments so as to attract private investment to areas where it is needed.
(2) Neither the act nor this regulation is intended to
encourage unsound lending practices or the allocation of credit.
(c) Scope. This regulation applies to financial institutions, as defined in section 203.2(e), and requires them
to disclose loan data at their home and certain branch
offices and to report the data to supervisory agencies.
(d) Central data depositories. Loan data are available
to the public at central data depositories located in
each metropolitan statistical area. The Federal Financial Institutions Examination Council aggregates loan
data for all institutions in each metropolitan statistical
area, showing lending patterns by location, age of
housing stock, income level, and racial characteristics.
A listing of central data depositories can be obtained
from the U.S. Department of Housing and Urban
Development, Washington, D.C. 20410, or from any of
the agencies listed in Appendix B.
Section 203.2—Definitions.
Part 203—Home Mortgage Disclosure
Section 203.1—Authority, purpose, and scope.
Section 203.2—Definitions.
Section 203.3—Exempt institutions.
Section 203.4—Compilation of loan data.
Section 203.5—Disclosure and reporting.
Section 203.6—Enforcement.
Appendix A Forms and instructions.
Appendix B Federal supervisory agencies.
Authority:
12 U.S.C. 2801-2810.
Section 203.1—Authority, purpose, and scope.
(a) Authority. This regulation is issued by the Board of
Governors of the Federal Reserve System ("Board")
In this regulation:
(a) Act means the Home Mortgage Disclosure Act
(12 U.S.C. 2801 et seq.).
(b) Branch office means:
(1) (i) any office of a financial institution that is
approved as a branch by a federal or state supervisory agency; or
(ii) for a financial institution that is not required to
obtain approval for a branch office, any office of
the institution that takes applications from the
public for home purchase or home improvement
loans.
(2) The term excludes free-standing automated teller
machines and other electronic terminals.
(c) Federal Housing Administration (FHA), Farmers
Home Administration (FmHA), or Veterans Adminis-
Legal Developments
tration (VA) loans mean mortgage loans insured under
Title II of the National Housing Act or Title V of the
Housing Act of 1949 or guaranteed under Chapter 37
of Title 38 of the United States Code.
(d) Federally related mortgage loan means any loan
(other than temporary financing such as a construction
loan) secured by a first lien on a l-to-4 family dwelling
(including a condominium, a cooperative, or a mobile
or manufactured home):
(1) that is originated by a federally insured or
regulated institution;
(2) that is insured, guaranteed, or supplemented by
any federal agency; or
(3) that the originator intends to sell to the Federal
National Mortgage Association, the Government
National Mortgage Association, or the Federal
Home Loan Mortgage Corporation.
(e) Financial institution means:
(1) (i) a commercial bank, savings bank, savings and
loan association, building and loan association,
homestead association (including a cooperative
bank) or credit union that originates federally
related mortgage loans;
(ii) a mortgage banking subsidiary of a savings and
loan holding company, or a mortgage banking
subsidiary of a bank holding company; however, a
subsidiary is not a "mortgage banking subsidiary" under this section unless, in the preceding
calendar year, ten percent or more of its loan
volume, measured in dollars, consisted of home
purchase loans; or
(iii) a savings and loan service corporation that
originates or purchases mortgage loans, other
than a savings and loan service corporation identified in paragraph (e)(2) of this section.
(2) A majority-owned subsidiary of a financial institution, including a majority-owned savings and loan
service corporation, is deemed to be part of the
parent institution for purposes of this regulation.
(f) Home improvement loan means any loan that:
(1) is stated by the borrower (at the time of the loan
application) to be for the purpose of repairing,
rehabilitating, or remodeling a residential dwelling
(including a condominium, cooperative, or mobile
or manufactured home) located in a state; and
(2) is classified by the financial institution as a home
improvement loan.
(g) Home purchase loan means any loan secured by
and made for the purpose of purchasing, or refinancing
the purchase of, a residential dwelling (including a
condominium, cooperative, or mobile or manufactured home) located in a state.
(h) Metropolitan statistical area or MSA means a
metropolitan statistical area or a primary metropolitan
665
statistical area, as defined by the U.S. Office of Management and Budget.
(i) State means any state of the United States of
America, the District of Columbia, and the Commonwealth of Puerto Rico.
Section 203.3—Exempt institutions.
(a) Exemption based on asset size or location. A
financial institution is exempt from the requirements of
this regulation for a given calendar year if on the
preceding December 31:
(1) its total assets were $10,000,000 or less; or
(2) it had neither a home office nor a branch office in
an MSA.
(b) Exemption based on state law.
(1) A state-chartered financial institution is exempt
from the requirements of this regulation if the Board
determines that the institution is subject to a state
disclosure law that contains requirements substantially similar to those imposed by this regulation and
contains adequate provisions for enforcement.
(2) Any state, state-chartered financial institution, or
association of such institutions may apply to the
Board for an exemption under this paragraph.
(3) An institution that is exempt under this paragraph shall submit the data required by the state
disclosure law to its state supervisory agency, for
purposes of aggregation.
(c) Loss of exemption.
(1) An institution losing an exemption that was
based on asset size or location under paragraph (a)
of this section shall compile loan data in compliance
with this regulation beginning with the calendar year
following the year in which it lost its exemption.
(2) An institution losing an exemption that was
based on state law under paragraph (b) of this
section shall compile loan data in compliance with
this regulation beginning with the calendar year
following the year for which it last reported loan
data under the state disclosure law.
Section 203.4—Compilation of loan data.
(a) Data to be included. A financial institution shall
compile data on the number and total dollar amount of
home purchase and home improvement loans originated or purchased (by the institution and any majority-owned subsidiary) at any time during the calendar
year, whether or not the loans are later sold. The
institution shall compile the loan data in the format
prescribed in Appendix A of this regulation.
(b) Itemization of data. A financial institution shall
present the loan data separately for originations and
666
Federal Reserve Bulletin • October 1988
purchases, itemizing the data by census tract or
county and by type of loan, as prescribed below. It
shall use the MSA boundaries (defined by the U.S.
Office of Management and Budget) that were in effect
on January 1 of the calendar year for which the data
are compiled, and shall use the census tract maps from
the most recent census tract series prepared by the
U.S. Bureau of the Census.
(1) Geographic itemization.
(i) Itemization by census tract or county. For each
MSA in which the institution has a home or
branch office, the institution shall itemize the loan
data:
(A) by the census tract in which the property
purchased or improved is located, or
(B) by the county in which the property purchased or improved is located, if the property is
located in an area not assigned census tracts or
in a county with a population of 30,000 or less.
(ii) Property located elsewhere. The institution
shall list the loan data as an aggregate sum for
loans on property located outside an MSA, or
located in an MSA where the institution has
neither a home nor a branch office.
(2) Type-of-loan itemization. The financial institution shall further itemize the loan data within each
geographic unit by loan category as follows:
(i) FHA, FmHA, and VA home purchase loans on
l-to-4 family dwellings (except as provided in
paragraph (c)(2) of this section);
(ii) conventional home purchase loans on l-to-4
family dwellings;
(iii) home improvement loans on l-to-4 family
dwellings;
(iv) loans on dwellings for 5 or more families
(including both home purchase and home improvement loans); and
(v) loans reported in the l-to-4 family categories
that are made to nonoccupant borrowers, except
for loans on property located outside an MSA, or
located in an MSA where the institution has
neither a home nor a branch office.
(c) Data to be excluded.
(1) A financial institution shall not report:
(i) loans originated or purchased by the financial
institution acting in a fiduciary capacity (such as
trustee);
(ii) loans on unimproved land;
(iii) refinancings, between the original parties,
involving no increase in the outstanding principal
aside from closing costs and accrued finance
charges;
(iv) temporary financing (such as bridge or construction loans);
(v) the purchase of an interest in a pool of mort-
gage loans (such as mortgage participation certificates); or
(vi) the purchase solely of the right to service
loans.
(2) Mortgage banking subsidiaries of holding companies and savings and loan service corporations (as
defined in section 203.2(e)(1)) shall not report FHA
loans insured under Title I or II of the National
Housing Act.
Section 203.5—Disclosure and reporting.
(a) Time requirements. By March 31 following the
calendar year for which the loan data are compiled, a
financial institution shall:
(1) make a complete loan data disclosure statement
available to the public, and continue to make it
available for five years from that date; and
(2) send two copies of its complete loan disclosure
statement to the agency office specified in Appendix B of this regulation.
(b) Availability to the public.
(1) A financial institution shall make a complete loan
disclosure statement available at its home office.
(2) If it has branch offices in other MS As, the
financial institution shall also make a statement
available in at least one branch office in each of
those MS As; the statement at a branch office need
only contain data relating to property in the MSA
where that branch office is located.
(3) A financial institution shall make its disclosure
statement available for inspection and copying during the hours the office is normally open to the
public for business. A financial institution that provides photocopying facilities may impose a reasonable charge for this service.
(c) Notice of availability. A financial institution shall
post a general notice about the availability of its
disclosure statement in the lobbies of its home office
and any branch offices located in an MSA. Upon
request, it shall promptly provide the location of the
institution's offices where the disclosure statement is
available. At its option, an institution may include the
location in its notice.
Section 203.6—Enforcement.
(a) Administrative enforcement. A violation of the act
or this regulation is subject to administrative sanctions
as provided in section 305 of the act. Compliance is
enforced by the agencies listed in Appendix B of this
regulation.
(b) Bona fide errors. An error in compiling or disclosing loan data is not a violation of the act or this
regulation if it was unintentional and occurred despite
Legal Developments
the maintenance of procedures reasonably adapted to
avoid such errors.
APPENDIX A—FORMS AND INSTRUCTIONS
"Mortgage Loan Disclosure
Statement"
Form HMDA-1
Public reporting burden for this collection of information is estimated to vary from 2 to 50 hours per
response, with an average of 30 hours per response,
including time to gather and maintain the data needed
and to review instructions and complete the information collection. Send comments regarding this burden
estimate or any other aspect of this collection of
information, including suggestions for reducing the
burden, to Secretary, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551;
and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington,
D.C. 20503.
Instructions to Commercial Banks, Savings
Banks, Savings and Loan Associations, Credit
Unions and Other Depository Institutions
A. Who Must Use This Form
1. A commercial bank, savings bank, savings and loan
association, building and loan association, homestead
association (including a cooperative bank) or credit
union must complete this HMDA-1 form to disclose
loan data for a given calendar year if on the preceding
December 31 the institution:
a. had assets of more than $10 million, and
b. had a home or a branch office in a metropolitan
statistical area (MSA) or a primary metropolitan
statistical area (PMSA).
Example: If on December 31, 1987, your home office
was located in an MSA and your assets exceeded $10
million, you must compile data and complete a disclosure statement for all home purchase and home improvement loans that you originate or purchase during
calendar year 1988.
2. However, your institution need not complete a
disclosure statement—even though it meets the tests
for asset size and location—if it makes no first-lien
mortgage loans on l-to-4 family dwellings in the calendar year for which the data are compiled.
3. Any majority-owned subsidiary is deemed to be part
of the parent institution. Consequently, you should
consolidate into your disclosure statement loan data
relating to originations and purchases by all of your
667
institution's majority-owned subsidiaries (including a
majority-owned service corporation, in the case of a
savings and loan association). To comply with the
requirements described under section G (Geographic
Itemization) below, itemize loan data for MS As or
PMSAs where the parent institution has a home or
branch offices.
Example: If you have a home and branch offices in
New York City, and your subsidiary's loan offices are
in Philadelphia, itemize data by census tract (or
county) only for the New York PMSA. Report loan
data on loans relating to property located anywhere
outside the New York PMSA (including loans in Philadelphia) as an aggregate sum in Section 2 (Loans on
property not located in MSAs/PMSAs where institution has home or branch offices).
B. Who Must Use Other Forms
1. Mortgage banking subsidiaries of bank holding
companies, mortgage banking subsidiaries of savings
and loan holding companies, and savings and loan
service corporations that originate or purchase mortgage loans (other than service corporations that are
majority-owned by a single savings and loan association) must use the HMDA-2 form instead of the
HMDA-1.
2. Institutions that have been exempted by the Federal
Reserve Board from complying with federal law because they are covered by a similar state law on
mortgage loan disclosures must use the disclosure
form required by their state law.
C. Format
1. You must use the format of the HMDA-1 form, but
you are not required to use the form itself. For
example, you may produce a computer printout of
your disclosure statement instead. But you must give
all the identifying information asked for at the top of
the form, use the prescribed column headings, provide
the signature of a certifying officer, etc.
2. If your report on loan originations or purchases
consists of more than one page, number the pages and
include the name of your institution and the MSA
number at the top of each page. Enter the totals for the
MSA on the final page; do not give subtotals on earlier
pages. Report the Section 2 data (Loans on property
not located in MSAs/PMSAs) on the final page. If your
report contains itemized data for more than one MSA,
report the Section 2 data only once for Part A and once
for Part B — do not repeat the data on the report for
each MSA.
OMB No. 7100-0090 Approval expires June 1990.
This report is required by law (12 USC 2801-2810 and 12 CFR 203)
MORTGAGE LOAN DISCLOSURE STATEMENT, FORM HMDA-1
F O R U S E BY D E P O S I T O R Y
Control number (agency use only)
•u
INSTITUTIONS
Part A—Originations
Report for loans made in 19
Reporting institution
Enforcement agency for reporting institution
MSA/PMSA number for data reported in Section 1
Address
Name of MSA/PMSA
Address
Section 1—Loans on property located in MSA/PMSA where institution has a home or branch office
Loans on 1-to-4 Family Dwellings
FHA, FmHA, and VA
Conventional
Home Improvement Loans
Loans on Multifamily Dwellings for
5 or More Families
(home purchases and
home improvement)
A
B
C
D
Home Purchase Loans
CENSUS TRACT (in numerical sequence)
Nonoccupant Loans
on 1-to-4 Family Dwellings
from columns A, B and C
E
or
COUNTY (name or number)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
MRA/PMRA TOTAL
Section 2—Loans on property not located in MSAs/PMSAs where institution has home or branch offices
I hereby certify to the accuracy of this report.
The report includes •
does not include •
loan data for majority-owned subsidiaries.
Signature of Certifying Officer
Print Name of Person Completing Form
Telephone Number (include Area Code and Extension)
Total Dollar Amount
(thousands)
MORTGAGE LOAN DISCLOSURE STATEMENT, FORM HMDA-1
Control number (agency use only)
F O R U S E BY D E P O S I T O R Y
-u
INSTITUTIONS
Part B—Purchases
Report for loans made in 19
Reporting institution
Enforcement agency for reporting institution
MSA/PMSA number for data reported in Section 1
Address
Address
Name of MSA/PMSA
Section 1—Loans on property located in MSA/PMSA where institution has a home or branch office
Loans on 1-to-4 Family Dwellings
Conventional
Home Improvement Loans
Loans on Multifamily Dwellings for
5 or More Families
(home purchases and
home improvement)
B
C
D
Home Purchase Loans
FHA, FmHA, and VA
Nonoccupant Loans
on 1-to-4 Family Dwellings
from columns A, B and C
E
CENSUS TRACT (in numerical sequence)
A
or
COUNTY (name or number)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
MSA/PMSA TOTAL
Section 2—Loans on property not located in MSAs/PMSAs where institution has home or branch offices
I hereby certify to the accuracy of this report.
The report includes •
does not include Q
loan data for majority-owned subsidiaries.
Signature of Certifying Officer
Print Name of Person Completing Form
Telephone Number (include Area Code and Extension)
Total Dollar Amount
(thousands)
670 Federal Reserve Bulletin • October 1988
D. When and Where Statement is Due
1. You must send two copies of your disclosure
statement to the office specified by your federal supervisory agency no later than March 31 following the
calendar year for which the loan data are compiled.
2. The completed disclosure statement must be signed
by an officer of your institution (for both Part A and
Part B, on the final page of each) certifying to the
accuracy of the data and indicating whether the statement includes data of a majority-owned subsidiary.
(See paragraph 3 of section A above.)
3. You also must make your disclosure statement
available no later than March 31 for inspection by the
public at your home office and, if you have branch
offices in other MS As, at one branch office in each of
these MS As.
E. Data to Be Shown
1. Originations and purchases. Show the data on home
purchase and home improvement loans that you originated or purchased during the calendar year covered
by the disclosure statement. Report the data on loan
originations on Part A of the form and the data on loan
purchases on Part B of the form even if the loans were
subsequently sold. If you have no loans to report in
one of the two parts, enter "none" in the column
provided for census tract numbers and enter zeros in
Columns A through E; this helps to show that no part
of an institution's report has been lost.
2. Number and total dollar amount. Show the number
of loans and the total dollar amount of loans for each
category on the statement. For home purchase loans
that you originate, "total dollar amount" means the
original principal amount of the loan. For home purchase loans that you purchase, "total dollar amount"
means the unpaid principal balance of the loan at time
of purchase. For home improvement loans (both originations and purchases), you may include unpaid finance charges in the "total dollar amount" if that is
how you record such loans on your books.
3. Rounding. Round all dollar amounts to the nearest
thousand ($500 should be rounded up), and show in
terms of thousands.
F. Data to Be Excluded
Do not report the following types of loans:
1. loans that, although secured by real estate, are made
for purposes other than for home purchase or home
improvement (for example, do not report a loan secured by residential real property for purposes of
financing education, a vacation, or business operations);
2. loans made or purchased in a fiduciary capacity (for
example, by your trust department);
3. loans on unimproved land;
4. refinancing of a loan that you originated, if the
refinancing involves no increase in the outstanding
principal, aside from closing costs and unpaid finance
charges;
5. construction loans and other temporary financing;
6. purchase of an interest in a pool of mortgage loans
such as mortgage participation certificates; or
7. purchases solely of the right to service loans.
G. Geographic Itemization (breakdown of loan
data for each MSA or PMSA by census tract or
county and of loan data in the outside-MSA/
PMSA category).
1. MSAIPMSA. You must compile loan data geographically for each MSA or PMSA in which you have a
home or branch office. (See item 6 below for treatment
of loans on property outside MSAs/PMSAs). Start a
new page for each MSA or PMSA, if you itemize data
for more than one MSA/PMSA. You must use the
MSA/PMSA boundaries (defined by the U.S. Office of
Management and Budget) that were in effect on January 1 of the calendar year for which the loan data are
compiled.
2. Census tract or county. For loans on property that
is located within one of these MS As or PMSAs,
itemize the data by the census tract in which the
property is located, except that you must itemize the
data by county instead of census tract when the
property:
a. is located in an area that is not divided into census
tracts on the U. S. Census Bureau's census tract
outline maps (see item 3 below); or
b. is located in a county with a population of 30,000
or less.
To determine population, use the Census Bureau's
PC80-1-A population series even if the population has
increased above 30,000 since 1980.
3. Census tract maps. To determine census tract
numbers, consult the U.S. Census Bureau's census
tract outline maps. You may use the maps of the
appropriate MSAs/PMSAs in the Census Bureau's
PHC80-2 series for the 1980 census, or use equivalent
census data from the Census Bureau (such as GBF/
DIME files) or from a private publisher. Use the maps
in the 1980 series even if more current maps are
available.
4. Compilation. Enter the data for all loans made in a
given census tract on the same line, listing the number
and total dollar amount in the appropriate columns (as
described below in section H) and listing the census
Legal Developments
tracts in numerical sequence. Do the same for loans
made in a given county.
5. Duplicate census tract numbers. If you have a home
or branch office in the New York, NY PMSA, note
that there are duplicate census tract numbers in New
York City. When reporting, you must indicate the
county (by name or number) in addition to the tract
number for these census tracts.
6. Outside-MSA/PMSA.
If the loans are for property
that is located outside those MS As or PMS As in which
you have a home or branch office (or outside any MSA
or PMSA), report the loan data as an aggregate sum in
Section 2 of the form. You do not have to itemize these
loans by census tract or county. (But you will have to
itemize the data by type of loan, as described in
section H below.)
H. Type-of-Loan Itemization (Breakdown of
each geographic grouping into loan categories—Columns A-E).
Column A: FHA, FmHA, and VA loans on l-to-4
family dwellings.
I. Report in Column A loans made for the purpose of
purchasing a residential dwelling for 1 to 4 families if
the loan is secured by a lien and if it is insured or
guaranteed by FHA, FmHA, or VA.
2. At your option, you may include loans that are made
for home improvement purposes but are secured by a
first lien, if you normally classify first-lien loans as
purchase loans.
3. Include refinancings if there is an increase in the
outstanding principal aside from any increase related
to closing costs or unpaid finance charges, or if you
refinance a loan originally made by another lender.
4. Include any nonoccupant FHA, FmHA, or VA
loans in this column as well as in Column E.
5. Do not report any FHA Title I (home improvement)
loans in Column A; these loans are to be entered in
Column C.
Column B: Conventional home purchase loans on
l-to-4 family dwellings.
1. Report in Column B conventional loans (all loans
other than FHA, FmHA, and VA loans) made for the
purpose of purchasing a residential dwelling for 1 to 4
families if the loans are secured by a lien.
2. Include refinancings if there is an increase in the
outstanding principal aside from any increase related
to closing costs or unpaid finance charges, or if you
refinance a loan originally made by another lender.
3. Include any nonoccupant conventional loans in this
column as well as in Column E.
671
4. At your option, you may include loans that are made
for home improvement purposes but that are secured
by a first lien, if you normally classify first-lien loans as
purchase loans.
Column C: Home improvement loans on l-to-4
family dwellings.
1. Report in Column C only loans that:
a. the borrowers have said are to be used for
repairing, rehabilitating, or remodeling residential
dwellings, and
b. are recorded on your books as home improvement loans.
2. For home equity lines of credit, you may include in
Column C that portion of the line of credit that the
borrower indicates will be used for home improvement, at the time the account is opened. Report only in
the year the line is established.
3. Include both secured and unsecured loans.
4. You may include unpaid finance charges in the
"total dollar amount" if that is how you record such
loans on your books.
5. Include any nonoccupant home improvement loans
in this column as well as in Column E.
Column D: Loans on multifamily dwellings (5 or
more families).
1. Report in Column D loans on dwellings for 5 or
more families, including both loans for home purchase
and loans for home improvement.
2. Do not report loans on individual condominium or
cooperative units in Column D; report such loans in
Columns A, B, or C.
Column E: Nonoccupant
dwellings.
loans on l-to-4 family
1. Report in Column E any home purchase and home
improvement loans on l-to-4 family dwellings (listed in
Columns A, B, and C) that were made to borrowers
who indicated at the time of the loan application that
they did not intend to use the property as a principal
dwelling.
2. In completing Column E of Part B, you may assume
that a purchased loan does not fall within this "nonoccupant" category unless your documents contain information to the contrary.
3. Do not complete Column E for loans that you report
under Section 2 (Loans on property not located in
MSAs/PMSAs), in either Part A (Originations) or Part
B (Purchases). (See pages 668 and 669 for form
HMDA-1.)
OMB No. 7100-0090 Approval expires June 1990.
This report is required by law (12 USC 2801-2810 and 12 CFR 203).
MORTGAGE LOAN DISCLOSURE STATEMENT, FORM HMDA-2
Control number (agency use only)
F O R U S E BY: • M O R T G A G E B A N K I N G S U B S I D I A R I E S O F H O L D I N G C O M P A N I E S
• CERTAIN SAVINGS A N D LOAN S E R V I C E C O R P O R A T I O N S
Part A—Originations
U - U
Report for loans made in 19
Reporting institution
Enforcement agency for reporting institution
MSA/PMSA number for data reported in Section
Name of MSA/PMSA
Name of Parent Company
Section 1—Loans on property located in MSA/PMSA where institution has a home or branch office
Loans on 1-to-4 Family Dwellings
Home Purchase Loans
FmHA and VA
Conventional
A
B
Home Improvement Loans
Loans on Multifamily Dwellings for
5 or More Families
(home purchases and
home improvement)
CENSUS TRACT (in numerical sequence)
Nonoccupant Loans
on M 0 - 4 Family Dwellings
from columns A, B and C
E
D
C
or
COUNTY (name or number)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
MSA/PMSA TOTAI
Section 2—Loans on property not located in MSAs/PMSAs where institution has home or branch offices
I hereby certify to the accuracy of this report.
Signature of Certifying Officer
Print Name of Person Completing Form
Telephone Number (include Area Code and Extension)
Total Dollar Amount
(thousands)
MORTGAGE LOAN DISCLOSURE STATEMENT, FORM HMDA-2
Control number (agency use only)
•u
F O R U S E BY: • M O R T G A G E B A N K I N G S U B S I D I A R I E S O F H O L D I N G C O M P A N I E S
• C E R T A I N S A V I N G S A N D LOAN S E R V I C E C O R P O R A T I O N S
Part B—Purchases
Report for loans made in 19
Reporting institution
Enforcement agency for reporting institution
MSA/PMSA number for data reported in Section 1
Name of MSA/PMSA
Name of Parent Company
Section 1—Loans on property located in MSA/PMSA where institution has a home or branch office
Loans on 1-to-4 Family Dwellings
Home Purchase Loans
FmHA and VA
Conventional
Home Improvement Loans
Loans on Multifamily Dwellings for
5 or More Families
(home purchases and
home improvement)
Nonoccupant Loans
on 1 -to-4 Family Dwellings
from columns A, B and C
CENSUS TRACT (in numerical sequence)
A
B
E
D
C
or
COUNTY (name or number)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
Total Dollar Amount
(thousands)
No. of
Loans
MSA/PMSA TOTAL
Section 2—Loans on property not located in MSAs/PMSAs where institution has home or branch offices
I hereby certify to the accuracy of this report.
Signature of Certifying Officer
Print Name of Person Completing Form
Telephone Number (include Area Code and Extension)
Total Dollar Amount
(thousands)
674 Federal Reserve Bulletin • October 1988
"Mortgage Loan Disclosure
Statement"
Form HMDA-2
Public reporting burden for this collection of information is estimated to vary from 30 to 100 hours per
response, with an average of 60 hours per response,
including time to gather and maintain the data needed
and to review instructions and complete the information collection. Send comments regarding this burden
estimate or any other aspect of this collection of
information, including suggestions for reducing the
burden, to Secretary, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551;
and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington,
D.C. 20503.
Instructions to Mortgage Banking Subsidiaries
of Holding Companies and to Savings and
Loan Service Corporations
A. Who Must Use This Form
1. A mortgage banking subsidiary of a bank holding
company, a mortgage banking subsidiary of a savings
and loan holding company, or a savings and loan
service corporation that originates or purchases mortgage loans (other than a service corporation that is
majority-owned by a single savings and loan association) must complete this HMDA-2 form to disclose
loan data for the current calendar year if on the
preceding December 31 the subsidiary or service corporation:
a. had assets of more than $10 million, and
b. had a home or branch office in a metropolitan
statistical area (MSA) or a primary metropolitan
statistical area (PMSA).
Example: If on December 31, 1987, your home office
was in an MSA and your assets exceeded $10 million,
you must compile data and complete a disclosure
statement for all home purchase and home improvement loans that you originate or purchase during
calendar year 1988.
2. For purposes of loan disclosure requirements (including geographic itemization under section G
below), a branch office means any office of your
institution (not of an affiliate) that takes applications
from the public.
B. Who Must Use Other Forms
1. Commercial banks, savings banks, savings and loan
associations, building and loan associations, homestead associations (including cooperative banks) and
credit unions must use the HMDA-1 form, instead of
the HMDA-2.
2. A service corporation that is majority-owned by a
single savings and loan association is deemed to be
part of the parent institution, and its loan data will be
reported on a consolidated basis with the parent's data
on the HMDA-1.
3. Institutions that have been exempted by the Federal
Reserve Board from complying with the federal law
because they are covered by a similar state law on
mortgage loan disclosures must use the disclosure
form required by their state law.
C. Format
1. You must use the format of the HMDA-2 form, but
you are not required to use the form itself. For
example, you may produce a computer printout of
your disclosure statement instead. But you must give
all the identifying information asked for at the top of
the form, use the prescribed column headings, provide
the signature of a certifying officer, etc.
2. If your report on loan originations or purchases
consists of more than one page, number the pages and
include the name of your institution and the MSA
number at the top of each page. Enter the totals for the
MSA on the final page; do not give subtotals on earlier
pages. Report the Section 2 data (Loans on property
not located in MSAs/PMSAs) on the final page. If your
report contains itemized data for more than one MSA,
report the Section 2 data only once for Part A and once
for Part B — do not repeat the data on the report for
each MSA.
D. When and Where Statement is Due
1. You must send two copies of your disclosure
statement to the office specified by your federal supervisory agency no later than March 31 following the
calendar year for which the loan data are compiled.
2. The completed disclosure statement must be signed
by an officer of your institution (for both Part A and
Part B on the final page of each), certifying to the
accuracy of the data.
3. You also must make your disclosure statement
available no later than March 31 for inspection by the
public at your home office and, if you have branch
offices in other MS As, at one branch office in each of
these MS As.
Legal Developments
E. Data to Be Shown
1. Originations and purchases. Show the data on home
purchase and home improvement loans that you originated or purchased during the calendar year covered
by the disclosure statement. Report the data on loan
originations on Part A of the form and the data on
purchases on Part B of the form even if the loans were
subsequently sold. If you have no loans to report in
one of the two parts, enter "none" in the column
provided for census tract numbers and enter zeros in
Columns A through E; this helps to show that no part
of an institution's report has been lost.
2. Number and total dollar amount. Show both the
number of loans and the total dollar amount of loans
for each category on the statement. For home purchase loans that you originate, "total dollar amount"
means the original principal amount of the loan. For
home purchase loans that you purchase, "total dollar
amount" means the unpaid principal balance of the
loan at time of purchase. For home improvement loans
(both originations and purchases), you may include
unpaid finance charges in the "total dollar amount" if
that is how you record such loans on your books.
3. Rounding. Round all dollar amounts to the nearest
thousand ($500 should be rounded up), and show in
terms of thousands.
F. Data to Be Excluded
Do not report the following types of loans:
1. loans that, although secured by real estate, are made
for purposes other than for home purchase or home
improvement (for example, do not report a loan secured by residential real property for purposes of
financing education, a vacation, or business operations);
2. loans made or purchased in a fiduciary capacity ;
3. loans on unimproved land;
4. refinancing of a loan that you originated, if the
refinancing involves no increase in the outstanding
principal, aside from closing costs and unpaid finance
charges;
5. construction loans and other temporary financing;
6. purchase of an interest in a pool of mortgage loans
such as mortgage participation certificates;
7. purchases solely of the right to service loans; or
8. FHA home purchase and home improvement loans
(at your option, you may record FHA Loans on form
HMDA-2A, "Mortgage Loan Statement for Optional
Disclosure of FHA Loans").
675
G. Geographic Itemization (breakdown of loan
data for each MSA or PMSA by census tract or
county, and aggregation of loan data for the
outside-MSA/PMSA category).
1. MSA/PMSA. You must compile loan data geographically for each MSA or PMSA in which you have a
home or branch office. (See item 6 below for treatment
of loans on property outside such MSAs/PMSAs).
Start a new page for each MSA or PMSA if you
itemize data for more than one MSA/PMSA. You must
use the MSA/PMSA boundaries (defined by the U.S.
Office of Management and Budget) that were in effect
on January 1 of the calendar year for which the loan
data are compiled.
2. Census tract or county. For loans on property that
is located within one of these MS As or PMSAs,
itemize the data by the census tract in which the
property is located, except that you must itemize the
data by county instead of census tract when the
property:
a. is located in an area that is not divided into census
tracts on the U.S. Census Bureau's census tract
outline maps (see item 3 below); or
b. is located in a county with a population of 30,000
or less. To determine population, use the Census
Bureau's PC80-1-A population series even if the
population has increased above 30,000 since 1980.
3. Census tract maps. To determine census tract
numbers, consult the U.S. Census Bureau's census
tract outline maps. You may use the maps of the
appropriate MSAs/PMSAs in the Census Bureau's
PHC80-2 series for the 1980 census, or use equivalent
census data from the Census Bureau (such as GBF/
DIME files) or from a private publisher. Use the maps
in the 1980 series even if more current maps are
available.
4. Compilation. Enter the data for all loans made in a
given census tract on the same line, listing the number
and total dollar amount in the appropriate columns (as
described below in section H) and listing the census
tracts in numerical sequence. Do the same for loans
made in a given county.
5. Duplicate census tract numbers. If you have a home
or branch office in the New York, NY PMSA, note
that there are duplicate census tract numbers in New
York City. When reporting, you must indicate the
county (by name or number) in addition to the tract
number for these census tracts.
6. Outside-MSA/PMSA. If the loans are for property
that is located outside those MSAs or PMSAs in which
you have a home or branch office (or outside any MSA
or PMSA), report the loan data as an aggregate sum in
Section 2 of the form. You do not have to itemize the
loans by census tract or county. (But you will have to
676 Federal Reserve Bulletin • October 1988
itemize the data by type of loan, as described in
section H below.)
H. Type-of-Loan Itemization (breakdown of
each geographic grouping into loan categories—Columns A-E).
Column A: FmHA and VA loans on l-to-4 family
dwellings.
I. Report in Column A loans made for the purpose of
purchasing a residential dwelling for 1 to 4 families if
the loan is secured by a lien and if it is insured or
guaranteed by FmHA or VA.
2. At your option, you may include loans that are made
for home improvement purposes but are secured by a
first lien, if you normally classify first-lien loans as
purchase loans.
3. Include refinancings if there is an increase in the
outstanding principal aside from any increase related
to closing costs or unpaid finance charges, or if you
refinance a loan originally made by another lender.
4. Include any nonoccupant loans in this column as
well as in Column E.
5. Do not include FHA loans in Column A. At your
option, you may record FHA loans on form HMDA2A, "Mortgage Loan Statement for Optional Disclosure of FHA Loans."
Column B: Conventional home purchase loans on
l-to-4 family dwellings.
1. Report in Column B conventional loans (all loans
other than FmHA and VA loans) made for the purpose
of purchasing a residential dwelling for 1 to 4 families
if the loan is secured by a lien.
2. Include refinancings if there is an increase in the
outstanding principal aside from any increase related
to closing costs or unpaid finance charges, or if you
refinance a loan originally made by another lender.
3. Include any nonoccupant conventional loans in this
column as well as in Column E.
4. At your option, you may include loans that are made
for home improvement purposes but that are secured
by a first lien, if you normally classify first-lien loans as
purchase loans.
Column C: Home improvement loans on l-to-4
family dwellings.
1. Report in Column C only loans that:
a. the borrowers have said are to be used for
repairing, rehabilitating, or remodeling residential
dwellings, and
b. are recorded on your books as home improvement loans.
2. For home equity lines of credit, you may include in
Column C that portion of the line of credit that the
borrower indicates will be used for home improvement, at the time the account is opened. Report only
for the year in which the line is established.
3. Include both secured and unsecured loans.
4. You may include unpaid finance charges in the
"total dollar amount" if that is how you record such
loans on your books.
5. Include any nonoccupant home improvement loans
in this column as well as in Column E.
6. Do not report FHA loans in Column C. At your
option, you may report FHA loans on form HMDA2A, "Mortgage Loan Statement for Optional Disclosure of FHA Loans."
Column D: Loans on multifamily dwellings (5 or
more families).
1. Report in Column D all loans on dwellings for 5 or
more families, including both loans for home purchase
and loans for home improvement.
2. Do not report loans on individual condominium or
cooperative units; report such loans in Columns A, B,
or C.
3. Do not report FHA loans in Column D. At your
option, you may report FHA loans on form HMDA2A, "Mortgage Loan Statement for Optional Disclosure of FHA Loans."
Column E: Nonoccupant
dwellings.
loans on l-to-4 family
1. Report in Column E any home purchase and home
improvement loans on l-to-4 family dwellings (listed in
Columns A, B, and C) that were made to borrowers
who indicated at the time of the loan application that
they did not intend to use the property as a principal
dwelling.
2. In completing Column E of Part B, you may assume
that a purchased loan does not fall within this "nonoccupant" category unless your documents contain information to the contrary.
3. Do not complete Column E for loans that you report
under Section 2 (Loans on property not located in
MSAs/PMSAs where institution has home or branch
offices), in either Part A (Originations) or Part B
(Purchases). (See pages 672 and 673 for form
HMDA-2.)
Legal Developments
"Mortgage
Disclosure
Loan Statement for
of FHA
Loans"
Optional
677
ings and multifamily dwellings for 5 or more families.
(See page 678 for form HMDA-2 A.)
Form HMDA-2A
This collection of information is not required. Mortgage banking subsidiaries of holding companies and
certain savings and loan associations may record their
FHA loans on this form if they wish to make that data
available to the public. Public reporting burden for this
collection of information is estimated to vary from 10
to 50 hours per response, with an average of 20 hours
per response, including time to gather and maintain the
data needed and to review instructions and complete
the information collection. Send comments regarding
this burden estimate or any other aspect of this collection of information, including suggestions for reducing
the burden, to Secretary, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551;
and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington,
D.C. 20503.
Instructions
to Mortgage Banking
Subsidiaries
of Holding Companies and to Certain
Savings
and Loan Service
Corporations
APPENDIX B—FEDERAL
AGENCIES
SUPERVISORY
The following list indicates which federal agency is
responsible for enforcing compliance by each class of
covered institutions. Questions should be directed,
and copies of your disclosure statements should be
sent, to the office specified below. You may also
obtain posters from these agencies that you can use to
inform the public of the availability of your disclosure
statement.
National Banks
Comptroller of the Currency regional office serving the
district in which the national bank is located.
State M e m b e r B a n k s and Mortgage Banking
Subsidiaries of Bank Holding C o m p a n i e s
Federal Reserve Bank serving the district in which the
state member bank or mortgage banking subsidiary is
located.
A . W h o M a y U s e This F o r m
If you are the mortgage banking subsidiary of a bank
holding company or of a savings and loan holding
company, or if you are a savings and loan service
corporation that files the HMDA-2 form, you are
required to exclude data on FHA Title I (home improvement) and FHA Title II (home purchase) loans
from your form HMDA-2. At your option, however,
you may record FHA loans on form HMDA-2A and
make the form available to the public along with your
HMDA-2 disclosure statement.
N o n m e m b e r Insured B a n k s (except f o r F e d e r a l
Savings Banks)
Federal Deposit Insurance Corporation Regional Director for the region in which the bank is located.
Savings Institutions I n s u r e d by F S L I C ,
Mortgage Banking Subsidiaries of Savings and
L o a n Holding C o m p a n i e s , Savings a n d L o a n
Service Corporations, and M e m b e r s of the
F H L B System (except f o r State Savings B a n k s
insured by F D I C )
B. D a t a to b e S h o w n
1. For loans that you originate, see the instructions
that are provided for the HMDA-2 form under section
G (Geographic Itemization). Report the number and
total dollar amount of FHA home purchase loans in
Column 1 and FHA home improvement loans in
Column 2. Include loans oil both l-to-4 family dwellings and multifamily dwellings for 5 or more families.
2. For loans that you purchase, see the instructions
that are provided for the HMDA-2 form under section
G (Geographic Itemization). Report the number and
total dollar amount of FliA home purchase loans in
Column 3 and FHA home improvement loans in
Column 4. Include loans on both l-to-4 family dwell
Federal Home Loan Bank Board Supervisory Agent in
the district in which the institution is located.
Credit Unions
Office of Examination and Insurance
National Credit Union Administration
1776 G Street, N.W.
Washington, D.C. 20456
Other Financial Institutions
Federal Deposit Insurance Corporation Regional Director for the region in which the institution is located.
OMB No. 7100-0090 Approval expires June 1990.
This report authorized by law (12 USC 2801-2810 and 12 CFR 203).
MORTGAGE LOAN STATEMENT FOR OPTIONAL DISCLOSURE
OF FHA LOANS, FORM HMDA-2A
FOR USE BY: • MORTGAGE BANKING SUBSIDIARIES OF HOLDING COMPANIES
• CERTAIN SAVINGS A N D LOAN SERVICE CORPORATIONS
Record of FHA loans made in 19
Institution
Enforcement agency for this institution
MSA/PMSA number for data reported in Section 1
Name of MSA/PMSA
Name of Parent Company
Section 1—Loans on property located in MSA/PMSA where institution has a home or branch office
FHA Loans Originated
CENSUS TRACT (in numerical sequence)
FHA Loans Purchased
Home Purchase Loans
Home improvement Loans
Home Purchase Loans
Home Improvement Loans
1
2
3
4
or
COUNTY (name or number)
MSA/PMSA
No. of Loans
Total Dollar Amount
(thousands)
TDTAI
Section 2—Loans on property not located in MSAs/PMSAs where institution has home or branch offices
No. of Loans
Total Dollar Amount
(thousands)
No. of Loans
Total Dollar Amount
(thousands)
No. of Loans
Total Dollar Amount
(thousands)
Legal Developments
AMENDMENT TO REGULATION T
The Board of Governors is amending 12 C.F.R. Part
220, its Regulation T. The regulation will permit broker-dealers to extend "good faith" loan value on
long-term debt securities issued or guaranteed as a
general obligation by a foreign sovereign, its provinces, cities or states, or a supranational entity if there
is available an explicit or implicit rating of the entity in
one of the two highest rating categories by a nationally
recognized statistical rating organization. The amendment will provide equitable treatment for U.S. brokerdealers who, unlike banks and foreign broker-dealers,
were previously prohibited from extending purpose
credit on these securities.
Effective September 15, 1988, 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. §§ 78c, 78g, 78h, 78q, and 78w.
2. Section 220.2 is amended by adding a new paragraph (r)(4) to read:
Section 220.2—Definitions
(r) "OTC margin bond" means:
*
*
*
(4) A debt security issued or guaranteed as a general
obligation by the government of a foreign country,
its provinces, states, or cities, or a supranational
entity, if at the time of the extension of credit one of
the following is rated in one of the two highest rating
categories by a nationally recognized statistical rating organization:
(i) the issue,
(ii) the issuer or guarantor (implicitly), or
(iii) other outstanding unsecured long-term debt
securities issued or guaranteed by the government
or entity.
679
Collection of Checks), with respect to the laws of
Illinois and New York and with respect to section
4-213(5) of the Uniform Commercial Code.
Effective September 1, 1988, 12 C.F.R. Part 229 is
amended as follows:
1. The authority citation for Part 229 continues to read
as follows:
Authority: Title VI of Pub. L. 100-86, 101 Stat. 552,
635, 12 U.S.C. 4001 et seq.
2. A new Appendix F is added to read as follows:
APPENDIX F—OFFICIAL BOARD
INTERPRETATIONS; PREEMPTION
DETERMINATIONS UNIFORM COMMERCIAL
CODE, SECTION 4-213(5)
Section 4-213(5) of the Uniform Commercial Code
("U.C.C.") provides that money deposited in a bank
is available for withdrawal as of right at the opening of
business of the banking day after deposit. Although
the language "deposited in a bank" is unclear, arguably it is broader than the language "made in person to
an employee of the depositary bank", which conditions the next-day availability of cash under Regulation CC (§ 229.10(a)(1)). Under Regulation CC, deposits of cash that are not made in person to an employee
of the depositary bank must be made available by the
second business day after the banking day of deposit
(§ 229.10(a)(2)). Therefore, this provision of the
U.C.C. may call for the availability of certain cash
deposits in a shorter time than provided in Regulation CC.
This provision of the U.C.C., however, is subject to
§ 4-103(1), which provides, in part, that "the effect of
the provisions of this Article may be varied by agreement . . . . " (The Regulation CC funds availability
requirements may not be varied by agreement.)
U.C.C. § 4-213(5) supersedes the Regulation CC provision in § 229.10(a)(2), but a depositary bank may not
agree with its customer under § 4-103(1) of the Code to
extend availability beyond the time periods provided
in § 229.10(a) of Regulation CC.
ILLINOIS
AMENDMENT TO REGULATION CC
The Board of Governors is amending 12 C.F.R. Part
229, its Regulation CC (Availability of Funds and
The Board has been requested, in accordance with
§ 229.20(d) of Regulation CC (12 C.F.R. Part 229), to
determine whether the Expedited Funds Availability
680 Federal Reserve Bulletin • October 1988
Act and Subpart B, and, in connection therewith,
Subpart A, of Regulation CC, preempt provisions of
Illinois law relating to the availability of funds. Section
4-213(5) of the Uniform Commercial Code as adopted
in Illinois (Illinois Revised Statutes Chapter 26, paragraph 4-213(5), enacted July 26, 1988) provides that:
Time periods after which deposits must be available for
withdrawal shall be determined by the provisions of the
federal Expedited Funds Availability Act (Title VI of the
Competitive Equality Banking Act of 1987) and the
regulations promulgated by the Federal Reserve Board
for the implementation of that Act.
Section 4-213(5) of the Illinois law does not supersede Regulation CC; and, because this provision of
Illinois law does not permit funds to be made available
for withdrawal in a longer period of time than required
under the Act and Regulation, it is not preempted by
Regulation CC.
NEW YORK
Background
The Board has been requested, in accordance with
§ 229.20(d) of Regulation CC (12 C.F.R. Part 229), to
determine whether the Expedited Funds Availability
Act and Subpart B, and, in connection therewith,
Subpart A, of Regulation CC, preempt the provisions
of New York law concerning the availability of funds.
This preemption determination specifies those provisions in the New York funds availability law that
supersede the Act and Regulation CC. (See also the
Board's preemption determination regarding U.C.C.
§ 4-213(5), pertaining to availability of cash deposits,
in paragraph (a), above.)
The New York State Banking Department, pursuant
to section 14-d of the New York Banking Law, has
issued regulations requiring that funds deposited in an
account be made available for withdrawal within specified time periods, and providing certain exceptions to
those availability schedules.
Part 34 of the New York State Banking Department's General Regulations establishes time frames
within which commercial banks, trust companies, and
branches of foreign banks ("banks") and savings
banks, savings and loan associations, and credit
unions ("savings institutions") must make funds deposited in customer accounts available for withdrawal.
Different schedules apply to deposits in banks and
savings institutions. Deposits must be made available
for withdrawal not later than the following number of
business days following the business day of deposit:
Banks
Local checks (same city)
In-state checks
Out-of-state checks
$100 or less checks—on us checks
(in-state); Treasury checks;
New York state and local
government checks
Nonproprietary ATMs
Savings
Institutions
3
4
7
4
5
9
2
+1
2
+1
NOTE: Part 34 requires that funds be available at the start of the
business day subsequent to the number of days specified in the
regulation. To simplify comparisons of the New York and federal
regulations, the Board has converted the time periods used in Part 34
to the method used in Regulation CC; i.e. the number of business days
following the day of deposit.
Coverage
The New York law and regulation govern the availability of funds deposited into savings and time deposits, as well as to "accounts" as defined in § 229.2(a) of
Regulation CC. The federal preemption of state funds
availability laws only applies to "accounts" subject to
Regulation CC, which generally include transaction
accounts. Thus, to the extent that the New York law
applies to deposits in time, savings, and other accounts (such as accounts in which the account holder
is another bank or foreign bank) that are not
"accounts" under Regulation CC, the state funds
availability law will continue to apply. (Note, however, that under § 229.19(e) of Regulation CC, Holds
on other funds, the federal availability schedules may
apply to savings, time, and other accounts not defined
as "accounts" under Regulation CC, in certain circumstances.) The New York State Superintendent of
Banks stated, in her comments to the Board, that
"[t]he Banking Department believes that the Regulation CC definition of 'account' to the extent it applies
to transaction accounts preempts the scope of the
accounts as defined in Part 34."
The New York law and regulation apply to "items"
deposited to accounts. Part 34.2(e) defines " i t e m " as
" a check, negotiable order of withdrawal or money
order deposited into an account." The Board interprets the definition of "item" in New York law to be
consistent with the definition of "check" in Regulation CC (§ 229.2(k)).
Availability
Schedules
The following provisions of New York law provide for
the same or a shorter hold for certain categories of
checks than is provided under Regulation CC, and
supersede the federal availability requirements. All
other provisions of the New York law relating to the
Legal Developments
availability of funds deposited in "accounts" are preempted by Regulation CC, because they provide for
longer availability than is provided for in Regulation CC.
Temporary Schedule. The New York regulation
requires that items payable by a local bank or savings
institution (i.e., one that is located in the same city,
town, or village, and which uses the same clearing
facility, as the depositary bank) be made available for
withdrawal not later than the start of business on the
third business day following deposit, if deposited in a
bank (Part 34.2(a)(1)). The New York Superintendent
of Banking has interpreted "clearing facility" to include both check clearinghouse associations and Federal Reserve check processing facilities. (See December 21, 1983, letter from Vincent Tese, New York
State Superintendent of Banks, regarding adoption of
Part 34.) Regulation CC (§ 229.11(b)) also requires that
the proceeds of these check deposits be made available for withdrawal not later than the start of business
on the third business day following deposit. Regulation CC, however, includes a time period adjustment
which permits a depositary bank to delay the time it
must make funds available by cash or similar means,
for deposits of local checks cleared outside a check
clearinghouse arrangement (§ 229.11(b)(2)). New York
law supersedes this time period adjustment for withdrawal by cash and similar means for local checks (as
defined by New York law) deposited in banks and
cleared through the Federal Reserve.
Temporary availability schedule, New York
Banks
31.3
In-state nonlocal checks
Out-of-state nonlocal
4
Savings
Institutions
32
54
73'4
r
3
4
5
7
3
5
6
7
Deposits at nonproprietary ATMs
Treasury checks, state and local
government checks, on us (in-state)
Local checks (same city)
All other deposits
1. Withdrawals by cash or similar means for local checks cleared
outside the same check clearing facility (i.e., outside a check clearinghouse or the Federal Reserve) may be delayed in accordance with
§ 229.11(c).
2. Withdrawals by cash or similar means for local checks cleared
outside a check clearinghouse may be delayed in accordance with
§ 229.11(c).
3. In order to extend the hold beyond the availability schedule, a
state exception as well as a federal exception must be applicable. In no
case can the hold be extended beyond that permitted under Regulation
CC.
4. Schedule is subject to reductions for certain nonlocal checks.
See Appendix B-l of Regulation CC.
The New York regulation requires items payable by
an in-state bank or savings institution to be available
681
for withdrawal not later than the start of business on
the fourth business day following deposit, if deposited
in a bank (Part 34.3(a)(2)), or the fifth business day
following deposit, if deposited in a savings institution
(Part 34.3(b)(2)). These time periods are shorter than
the seventh business day availability required for
nonlocal checks under § 229.11(c) of Regulation CC, although they are not necessarily shorter than
the schedules for nonlocal checks set forth in
§ 229.11(c)(2) and Appendix B-l of Regulation CC.
Thus, these state schedules supersede the federal
schedule to the extent that they apply to an item
payable by a New York bank or savings institution
that is defined as a nonlocal check under Regulation CC and the applicable state schedule is less than
the applicable schedule specified in § 229.11(c) and
Appendix B-l.
Parts 34.3(a)(8) and (b)(8) provide that for any item
deposited at a shared or nonproprietary electronic
facility, the depositary bank may, at its option, add
one business day to the relevant state schedule for
the item being deposited. In the following cases, the
state schedules applicable to deposits at nonproprietary ATMs to accounts in banks supersede the
federal schedule, which provides for seventh day
availability:
Treasury checks, state and local government
checks, on us in-state checks—Third business day
Local checks—Fourth business day
In-state checks—Fifth business day
The state schedules applicable to deposits at nonproprietary ATMs to accounts in savings institutions
supersede the federal schedule for the following items:
Treasury checks, state and local government
checks, on us in-state checks—Third business day
Local checks—Fifth business day
In-state checks—Sixth business day
Permanent Schedule. Under Part 34.3(a)(2), in-state
checks must be made available for withdrawal by the
start of business on the fourth business day following
deposit, if deposited in a bank, and the fifth business
day following deposit, if deposited in a savings institution. The New York schedule for banks supersedes
the Regulation CC requirement in the permanent
schedule that nonlocal checks be made available for
withdrawal by the start of the fifth business day
following deposit, with a time period adjustment for
withdrawals by cash or similar means, to the extent
that the in-state checks are defined as nonlocal under
Regulation CC, and the Regulation CC schedule for
nonlocal checks is not shortened under § 229.12(c)(2)
and Appendix B-2 of Regulation CC. In addition, the
New York schedule for savings institutions supersedes
the Regulation CC time period adjustment in the
permanent schedule for withdrawal by cash or similar
682
Federal Reserve Bulletin • October 1988
means, to the extent that the in-state checks are
defined as nonlocal under Regulation CC, and the
Regulation CC schedule for nonlocal checks is not
shortened under § 229.12(c)(2) and Appendix B-2.
The following charts show the relationship between
the New York law that supersedes Regulation CC and
the temporary and permanent availability schedules in
Regulation CC. Sections 229.10(b) and (c) of Regulation CC preempt the New York law and thus are not
affected by it.
Permanent Availability Schedule, New York
Banks
In-state, nonlocal checks
Out-of-state, nonlocal checks
Savings
Institutions
2i
21
51
51
42,3
52.
3
1. Withdrawals by cash or similar means may be delayed in
accordance with § 229.12(d).
2. Schedule is subject to reductions for certain nonlocal checks.
See Appendix B-2 of Regulation CC.
3. In order to extend the hold beyond the availability schedule, a
state exception must be applicable. To extend the hold beyond the
applicable federal availability schedule, a federal exception must also
be applicable. In no case can the hold be extended beyond that
permitted under Regulation CC.
Exceptions to the Availability Schedules. New York
law provides exceptions to the state availability schedules for large deposits, new accounts, repeated overdrafters, doubtful collectibility, foreign items, and
emergency conditions (Part 34.4). In all instances
where the federal availability schedule preempts the
state availability schedule, the state exceptions do not
apply. In such cases, the depositary bank may only
invoke the federal exceptions. For those deposits to
which the state availability schedule applies, however,
the depositary bank may invoke a state exception and
place a hold on the deposit up to the federal availability schedule limit for that type of deposit. Once the
federal availability schedule limit is reached, the depositary bank may further extend the hold under any
of the federal exceptions that apply to that deposit.
Any time a depositary bank invokes an exception to
extend a hold beyond the time periods otherwise
permitted by law, it must give notice of the extended
hold to its customer in accordance with § 229.13(g) of
Regulation CC.
Variation by Agreement. Part 34.4(f) provides that
the New York regulation does not prohibit a depositary bank from agreeing with its customer to make
funds available for withdrawal in a longer period of
time than prescribed in New York law because of
special circumstances, "provided that such agreement
is not contained in a preprinted form and is not a usual,
regular business practice of the depositary bank." The
variation by agreement provision would remain in
effect for those provisions of New York law that
supersede Regulation CC; however, a depositary bank
could not agree with its customer to extend availability
beyond the times permitted under Regulation CC.
Business Day I Banking Day. New York law requires
availability within a specified number of "business
days" following the "business d a y " of deposit. "Business day" is defined as any day excluding Saturdays,
Sundays, and legal holidays (Part 34.2(c)). Legal holiday is not further defined in the regulation. The New
York definition of business day is preempted by the
Regulation CC definitions of "business day" and
"banking day".
Part 34.2(c) also provides that "for electronic
branches, opening and closing times shall be the hours
of the closest manned office of the depositary bank."
The Commentary to the Regulation CC definition of
"banking day" provides that "deposits at an ATM are
considered made at the branch holding the account
into which the deposit is made for purposes of determining the day of deposit." The Regulation CC rule to
determine what constitutes a banking day for ATM
deposits preempts the New York provision.
Disclosures
Part 34.5 of New York law requires depositary banks
to disclose their funds availability policy to their
customers, and to post their availability schedule in
each branch location. The purposes of the disclosures
concerning funds availability appear to be met by the
disclosure requirements in Regulation CC. Regulation
CC preempts state disclosure requirements concerning
funds availability that relate to "accounts". Thus, Part
34.5 of New York law is preempted by Regulation CC,
to the extent that it applies to "accounts", as defined
by Regulation CC. The New York disclosure rules
would continue to apply to savings, time, and other
accounts not governed by Regulation CC disclosure
requirements.
ORDERS ISSUED UNDER BANK
COMPANY ACT
HOLDING
Orders Issued Under Section 3 of the Bank
Holding Company Act
Banco Bilbao-Vizcaya, S.A.
Bilbao, Spain
Order Approving Formation of a Bank
Company
Holding
Banco Bilbao-Vizcaya, S.A., Bilbao, Spain ("BBV"),
has applied for the Board's approval pursuant to
Legal Developments
section 3(a)(1) of the Bank Holding Company Act
("BHC Act") (12 U.S.C. § 1842(a)(1)), to become a
bank holding company by acquiring 98.9 percent of the
voting shares of Banco Comercial de Mayaguez, Mayaguez, Puerto Rico ("Banco Comercial"). 1
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (53 Federal Register 25,010 (1988)). 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 BHC Act.
BB V will be the result of the proposed consolidation
under Spanish law of Banco de Vizcaya, S.A., Vizcaya, Spain ("Vizcaya") and Banco de Bilbao, S.A.,
Bilbao, Spain. It will become the largest bank in Spain,
with total assets of approximately $57.7 billion.2 BBV
has applied in connection with this consolidation to
retain the shares of Banco Comercial currently held by
Vizcaya. On a pro forma basis, BBV would have 3,216
branches in Spain, and operate 26 branches and 12
representative offices worldwide, including a branch in
New York and agencies in Miami and San Francisco.
BBV has elected New York as its home state under
the International Banking Act of 1978.3 The acquisition of Banco Comercial raises no issue under the
Douglas Amendment because Puerto Rico is not considered to be a state for purposes of that statute.
Banco Comercial is the seventh largest commercial
banking organization in Puerto Rico, controlling deposits of $307 million, representing 2.7 percent of the
total deposits in commercial banks in Puerto Rico. 4
Based upon the facts in the record, including the fact
that the two consolidating organizations, Vizcaya and
Bilbao, do not compete in any of the same banking
markets in the United States, the Board concludes that
the proposed transaction will not have any adverse
effect on competition, or increase the concentration of
resources in any relevant market in the United States.
Section 3(c) of the BHC Act requires in every case
that the Board consider the financial resources of the
applicant organization and the bank to be acquired. In
accordance with the principles of national treatment
and competitive equity, the Board has stated that it
expects a foreign bank to meet the same general
standards of financial strength as domestic bank hold1. Section 2(c) of the BHC Act defines a bank for purposes of the
Act to include any bank chartered pursuant to the laws of Puerto Rico.
2. Banking data are as of December 31, 1987.
3. See The Bank of Nova Scotia, 61 FEDERAL RESERVE BULLETIN
309 (1975). Vizcaya is a bank holding company within the meaning of
the BHC Act by virtue of its ownership of shares of Banco Comercial
and a minority interest in New Mexico Banquest Investors Corporation, Santa Fe, New Mexico ("Banquest"). Vizcaya will divest its
interest in Banquest.
4. Deposit data are as of June 30, 1988.
683
ing companies and to be able to serve as a source of
strength to its United States banking operations. 5 In
considering applications of foreign banking organizations, the Board has noted that foreign banks operate
outside the United States in accordance with different
regulatory and supervisory requirements, accounting
principles, asset quality standards, and banking practices and traditions, and that these differences have
made it difficult to compare the capital positions of
domestic and foreign banks. The Board, however,
recently adopted a proposal to supplement its consideration of capital adequacy with a risk-based system
that has been agreed to by the member countries of the
Basle Committee on Banking Regulations and Supervisory Practices and the other domestic federal banking agencies. 6 The Board considers the Basle Committee proposal an important step toward a more
consistent and equitable international standard for
assessing capital adequacy. Until that framework becomes effective, however, the Board will continue to
evaluate applications involving foreign banking organizations on a case-by-case basis consistent with its
prior precedent.
In this case, the Board notes that the primary capital
ratio of BBV, after making adjustments to reflect
differences in banking and accounting practices, is
slightly below the minimum capital guidelines for
United States multinational bank holding companies.
The Board notes, however, that BBV's application
represents a request to retain ownership of shares
already held by Vizcaya and a reduction in the presence in the United States of these organizations in
connection with the consolidation of two foreign organizations. The transaction will not result in a diminution of the consolidated organization's capital. Moreover, BBV will be in compliance with the capital and
other financial requirements of Spanish banking organizations. The Board also notes that BBV's risk-based
capital ratios exceed the 1990 transitional standards.
The Board has placed considerable emphasis on the
fact that Banco Comercial is strongly capitalized and
small in relation to BBV. The Board expects that BBV
will maintain Banco Comercial among the more
strongly capitalized banking organizations of compa5. Toyo Trust and Banking Co., Ltd., 74 FEDERAL RESERVE
BULLETIN 623 (Order dated July 11, 1988);7aryo Kobe Bank, 74
FEDERAL RESERVE BULLETIN 621 (Order dated July 8, 1988); Sumitomo Trust & Banking Co., Ltd., 73 FEDERAL RESERVE BULLETIN 749
(1987); Ljubljanska Banka-Associated Bank, 72 FEDERAL RESERVE
BULLETIN 489 (1986); The Mitsubishi Trust and Banking Corporation,
72 FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of
Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See
also, Policy Statement on Supervision and Regulation of ForeignBased Bank Holding Companies, Federal Reserve Regulatory Service
114-835 (1979).
6. 53 Federal Register 8,549 (1988).
684
Federal Reserve Bulletin • October 1988
rable size in the United States. In view of these and
other facts of record, the Board finds that financial
considerations are consistent with approval.
The Board has also determined that considerations
relating to managerial factors as well as those relating
to the convenience and needs of the community to be
served 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. The 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 New York, acting pursuant to delegated authority.
By order of the Board of Governors, effective August 31, 1988.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, Kelley, and LaWare. Absent and
not voting: Chairman Greenspan.
JAMES M C A F E E
Associate Secretary of the Board
Bank of Seoul
Seoul, Korea
Order Approving Formation of a Bank Holding
Company
Bank of Seoul, Seoul, Korea ("Applicant"), has applied for the Board's approval under section 3(a)(1) of
the Bank Holding Company Act of 1956, as amended
(12 U.S.C. § 1842(a)(1)) ("BHC Act"), to become a
bank holding company by acquiring all of the outstanding voting shares of Seoul Bank of California, Los
Angeles, California ("Bank").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the BHC Act
(53 Federal Register 9,143 (1988)). The time for filing
comments has expired, and the Board has considered
the application and all comments received in light of
the factors set forth in section 3(c) of the BHC Act
(12 U.S.C. § 1842(c)).
Applicant, with total assets of approximately $15.7
billion, is the largest banking institution in South
Korea and the 147th largest commercial bank in the
world. 1 Applicant has 191 offices in Korea and operates 6 branches and 2 representative offices world-
1. Asset data are as of June 30, 1988. Banking data are as of
December 31, 1986. Ranking is as of July 31, 1987.
wide, including agencies in New York and Los
Angeles and a representative office in Houston. 2
Bank, a de novo institution, will provide a full range
of commercial banking services in the Metropolitan
Los Angeles banking market. 3 In view of the de novo
status of Bank and based upon the facts in the record,
the Board concludes that the proposed transaction will
have no adverse effect on existing or probable future
competition, nor will it increase the concentration of
resources in any relevant market.
Section 3(c) of the Act requires in every case that
the Board consider the financial resources of the
applicant organization and the bank to be acquired. In
accordance with the principles of national treatment
and competitive equity, the Board has stated that it
expects a foreign bank to meet the same general
standards of financial strength as domestic bank holding companies and to be able to serve as a source of
strength to its United States banking operations. 4 In
considering applications of foreign banking organizations, the Board has noted that foreign banks operate
outside the United States in accordance with different
regulatory and supervisory requirements, accounting
principles, asset quality standards, and banking practices and traditions, and that these differences have
made it difficult to compare the capital positions of
domestic and foreign banks. The Board, however,
recently adopted a proposal to supplement its consideration of capital adequacy with a risk-based system
that has been agreed to by the member countries of the
Basle Committee on Banking Regulations and Supervisory Practices and the other domestic federal banking agencies. 5 The Board considers the Basle Committee proposal an important step toward a more
consistent and equitable international standard for
assessing capital adequacy.
2. Applicant had originally selected New York as its home state
under the Board's Regulation K (12 C.F.R. 211.22(b)), but has
notified the Board of its intention to change its home state to California
pursuant to the provision of Regulation K permitting a one-time
change of home state (12 C.F.R. 211.22(c)). In connection with this,
Applicant will cease accepting deposits from United States citizens
and residents at its New York office.
3. The Metropolitan Los Angeles banking market is defined by the
Los Angeles RMA.
4. Toyo Trust and Banking Co., Ltd., 74 FEDERAL RESERVE
BULLETIN 623 (Order dated July 11, 1988); Taiyo Kobe Bank, Ltd., 74
FEDERAL RESERVE BULLETIN 621 (Order dated July 8, 1988); Sumitomo Trust & Banking Co., Ltd., 11 FEDERAL RESERVE BULLETIN 749
(1987); Ljubljanska Banka-Associated Bank, 72 FEDERAL RESERVE
BULLETIN 489 (1986); The Mitsubishi Trust and Banking Corporation,
72 FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of
Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See
also, Policy Statement on Supervision and Regulation of ForeignBased Bank Holding Companies, Federal Reserve Regulatory Service
14-835 (1979).
5. 53 Federal Register 8,549 (1988).
Legal Developments
In this case, the Board notes that the primary capital
ratio of Applicant is slightly below the minimum
capital guidelines for United States multinational bank
holding companies. However, Applicant's ratios of
equity, Tier 1, and Tier 2 capital to risk assets, exceed
the 1990 transitional standards. The Board also notes
that Bank is being established de novo, will initially be
small in relation to Applicant and will be strongly
capitalized. As Bank's size increases, the Board will
expect Applicant to maintain Bank among the more
strongly capitalized banking organizations of comparable size in the United States. The Board has also
considered that Applicant has just recently completed
the first phase of a capital improvement plan that
raised $246 million in common equity. Moreover,
Applicant is in compliance with the capital and other
financial requirements of Korean banking organizations. In view of these and other facts of record, the
Board finds that considerations relating to banking
factors are consistent with approval.
Applicant has a 9.1 percent interest in Korea Associated Securities, Inc., New York, New York, a
company engaged in the securities business in the
United States. While this interest appears to meet the
requirements for the grandfather privileges under section 8(c)(1) of the International Banking Act of 1978
(the "IBA") (12 U.S.C. § 3106(c)(1)), section 8(c)(2)
of the IBA provides that such grandfather rights shall
terminate two years after the date on which the foreign
bank becomes a bank holding company. 6 Consistent
with this provision, Applicant has committed to reduce its interest in Korea Associated Securities, Inc.,
to less than 5 percent within two years of consummation of the proposed transaction.
The Board has also determined that considerations
relating to the convenience and needs of the community to be served are consistent with approval. Based
on the foregoing and other facts of record, the Board
has determined that consummation of the transaction
would be consistent with the public interest. Accordingly, 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
San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective August 31, 1988.
6. 12 U.S.C. § 3106(c)(2).
685
Voting for this action: Vice Chairman Johnson and Governors Angell, Heller, Kelley, and La Ware. Voting against this
action: Governor Seger. Absent and not voting: Chairman
Greenspan.
JAMES M C A F E E
Associate Secretary of the Board
The Bank of Tokyo, Ltd.
Tokyo,Japan
Order Approving the Formation of a Bank Holding
Company and the Acquisition of a Bank
The Bank of Tokyo, Ltd., Tokyo, Japan ("Applicant"), 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 indirectly acquire 100 percent of the
voting shares of Union Bank, Los Angeles, California,
in connection with the proposed merger of Union
Bank into Applicant's 77-percent-owned subsidiary
bank, California First Bank, San Francisco, California. In connection with the proposed merger, California First Bank has applied for the Board's approval
under section 3(a)(1) of the Act (12 U.S.C.
§ 1842(a)(1)) to become a bank holding company for a
two-day period by acquiring 100 percent of the voting
shares of Union Bank.
Applicant proposes to acquire Union Bank through
a series of transactions. First, a subsidiary of California First Bank will merge into Standard Chartered
Holdings, Inc. ("Holdings"), a holding company of
Union Bank. California First Bank will thereby acquire, and Applicant will indirectly acquire, 100 percent of the voting shares of Union Bank. Second,
Holdings will be merged into California First Bank.
Third, Union Bancorp, Holdings' subsidiary and
Union Bank's immediate holding company, will be
merged into California First Bank. Finally, Union
Bank itself will merge into California First Bank. The
resulting bank will operate under the corporate charter
of California First Bank and the name "Union Bank."
The merger of California First Bank's interim subsidiary into Holdings, by which Applicant will indirectly
acquire the voting shares of Union Bank, will take
place after the close of banking hours on a Friday, and
the mergers of Holdings, Union Bancorp, and Union
Bank into California First Bank will take place on the
following Monday. The Federal Deposit Insurance
Corporation approved the merger of Union Bank into
California First Bank on July 19, 1988.
Section 3(a)(3) of the Act requires Board approval
before a bank holding company may acquire direct or
686 Federal Reserve Bulletin • October 1988
indirect ownership or control of more than 5 percent of
the voting shares of a bank. Because Applicant will
indirectly acquire the shares of Union Bank prior to
consummating the merger of Union Bank into California First Bank, the transaction is literally subject to the
prior approval requirements of the Act. While section
3(a)(4) of the Act exempts from the Act's prior approval requirements the acquisition by a holding company bank of the assets of another bank, that section
does not by its terms exempt a holding company
bank's acquisition of the voting shares of another
bank, as proposed by Applicant. See 12 C.F.R.
§ 225.12(d). Accordingly, when a bank holding company directly, or indirectly through a subsidiary bank,
acquires shares of a bank that it previously did not
control, an application is required, even where a
portion of the overall transaction is subject to review
under the Bank Merger Act (12 U.S.C. § 1828). See
Girard Bank v. Board of Governors of the Federal
Reserve System, 748 F.2d 838 (3d Cir. 1984). Because
Applicant will indirectly acquire the shares of Union
Bank prior to consummating the merger of Union
Bank into California First Bank, an application under
section 3 of the Act is required under the terms of the
Act.
The Board has given careful consideration to Applicant's suggestion that, in light of the Federal Deposit
Insurance Corporation's approval of the merger of
Union Bank into California First Bank pursuant to the
Bank Merger Act, the Board not object to consummation of the proposal without Applicant's filing an
application under the Act in this case. In this regard,
the Board notes that Union Bank, the bank to be
acquired, is a major U.S. banking organization. The
Board also has taken into account its general oversight
responsibilities for foreign banks in the United States
and the fact that the acquiror is a significant foreign
banking organization. These factors raise important
policy and financial considerations under the Act that
the Board believes require its consideration. Accordingly, the Board has determined that Applicant and
California First Bank are required to obtain prior
approval for the proposed acquisition of the voting
shares of Union Bank under section 3(a) of the Act.
Notice of the applications, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. (53
Federal Register 30,871 (1988)). 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
(12 U.S.C. § 1842(c)).
California First Bank is the sixth largest commercial
bank in California, with deposits of $4,731 billion,
representing 2.3 percent of the total deposits in com
mercial banks in the state. Union Bank is the fifth
largest commercial bank in the state, with total deposits of $7,825 billion, representing 3.8 percent of the
total deposits in commercial banks in the state. Upon
consummation of the proposed transaction, the resultant bank's share of total deposits in commercial banks
in the state would be approximately 6.1 percent, and
the resultant bank would be the fifth largest commercial bank in the state. 1
Applicant, with total consolidated assets equivalent
to approximately $183 billion 2 , ranks as the 22nd
largest bank in the world. In addition to California
First Bank, Applicant owns one other subsidiary bank
in the United States, The Bank of Tokyo Trust Company, New York, New York. Applicant acquired these
bank subsidiaries prior to the enactment in 1956 of the
Douglas Amendment's interstate banking requirement
and, therefore, may retain these companies under the
Douglas Amendment and section 5(b) of the International Banking Act (12 U.S.C. § 3103(b)). California is
the principal state of operation of Applicant for purposes of the Douglas Amendment and is Applicant's
home state for purposes of the International Banking
Act. Because Union Bank will be located in Applicant's principal state of operation for purposes of the
Act and home state for purposes of the International
Banking Act, the Board concludes that the acquisition
of Union Bank by Applicant is consistent with the
provisions of the Douglas Amendment and section 5 of
the International Banking Act.
Applicant also operates agencies in New York,
Miami, San Francisco, Los Angeles, and Honolulu;
branches in Portland and Seattle; and representative
offices in Chicago, Washington, D.C., Houston, and
Atlanta. In addition, Applicant owns Bank of Tokyo
International, U.S.A., an Edge Act corporation headquartered in Miami; Tokyo Bancorp International
(Houston) Inc., an Agreement corporation located in
Houston; and BOT Securities Inc., a wholly owned
subsidiary in New York that is engaged primarily in
the delivery and placement of U.S. Treasury bills.
Indirectly through The Bank of Tokyo Trust Company, Applicant also owns 50 percent of Nissei-BOT
Asset Management Corporation, a New York corporation engaged in investment advisory services.
California First Bank competes with Union Bank in
nine banking markets in California. Consummation of
the proposal would not have a significant adverse
effect on competition in any of these markets. Five of
1. Statewide data are as of December 31, 1986.
2. Banking data are as of March 31, 1988, and reflect the yen/dollar
exchange rate as of that date. Rankings are as of December 31, 1987.
Legal Developments
these markets 3 would be only moderately concentrated after consummation of the proposal, 4 and in all
of these markets the increase in market share is small.
The remaining four markets are already considered
concentrated under the Guidelines and would remain
so upon consummation. 5 The increase in concentration resulting from the proposal, however, as measured by the increase in the HHI in these markets, is
either very small or nonexistent. 6 In addition, the
presence of thrift institutions in these markets further
mitigates any anticompetitive effects in the markets. 7
Section 3(c) of the Act requires in every case that
the Board consider the financial resources of the
applicant organization and the bank or bank holding
company to be acquired. The Board has stated and
continues to believe that capital adequacy is an especially important factor in the analysis of bank holding
company expansion proposals, particularly in transactions, such as this, where a major acquisition is
proposed. 8 In this regard, the Board has stated that it
expects banking organizations contemplating expansion proposals to maintain strong capital levels substantially above the minimum levels specified in the
Board's Capital Adequacy Guidelines 9 without significant reliance on intangibles, particularly goodwill.
3. These markets are the Bakersfield, Los Angeles, OceansideVista, San Diego, and Stockton markets, all in California.
4. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)) ("Guidelines"), a market in
which the post-merger Herfindahl-Hirschman Index ( " H H I " ) is over
1800 is considered highly concentrated. In such markets, the Department of Justice is likely to challenge a merger that produces an
increase in the HHI of more than 50 points. The Department of Justice
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
Department of Justice 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 non-depository financial entities.
5. These markets are the Fresno, Sacramento, San Bernardino, and
San Francisco markets, all in California.
6. The pre-merger HHI for the Fresno market is 1941 and would
increase by 7 points upon consummation; the pre-merger HHI for the
Sacramento market is 1998 and would increase by 3 points; the
pre-merger HHI for the San Bernardino market is 2383 and would not
increase upon consummation; and the pre-merger HHI for the San
Francisco market is 2227 and would increase by 8 points.
7. The Board has previously indicated that thrift institutions have
become, or have the potential to become, major competitors of
commercial banks. National City Corporation, 70 FEDERAL RESERVE
BULLETIN 743 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE
BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL
RESERVE BULLETIN 802 (1983); First Tennessee National Corporation,
6 9 FEDERAL RESERVE BULLETIN 298 (1983).
8. Chemical New York Corporation, 73 FEDERAL RESERVE BULLETIN 3 7 8 ( 1 9 8 7 ) ; Citicorp,
National
7 2 FEDERAL RESERVE BULLETIN 4 9 7 ( 1 9 8 6 ) ;
City Corporation,
( 1 9 8 4 ) ; Banks
of Mid-America,
460 (1984); Manufacturers
70 FEDERAL RESERVE BULLETIN 743
Inc.,
7 0 FEDERAL RESERVE BULLETIN
Hanover Corporation (CIT), 70 FEDERAL
RESERVE BULLETIN 4 5 2 ( 1 9 8 4 ) .
9. Capital Adequacy Guidelines, 50 Federal Register 16,057 (1985),
71 FEDERAL RESERVE BULLETIN 4 4 5 (1985).
687
The Board carefully analyzes the effect of expansion
proposals on the preservation or achievement of
strong capital levels and has adopted a policy that
there should be no significant diminution of financial
strength below these levels for the purpose of effecting
major expansion proposals. 10
In accordance with the principles of national treatment and competitive equity, the Board has stated that
it expects foreign banks seeking to establish or acquire
banking organizations in the United States to meet the
same general standards of financial strength as domestic bank holding companies and to be able to serve as
a source of strength to their banking operations in the
United States. 11 In considering applications of foreign
banking organizations, the Board has noted that foreign banks operate outside the United States in accordance with different regulatory and supervisory
requirements, accounting principles, asset quality
standards, and banking practices and traditions, and
that these differences have made it difficult to compare
the capital positions of domestic and foreign banks.
The Board, however, recently adopted a proposal to
supplement its consideration of capital adequacy with
a risk-based system that has been agreed to by the
member countries of the Basle Committee on Banking
Regulations and Supervisory Practices and the other
domestic federal banking agencies. 12 The Japanese
Ministry of Finance in April of this year acted to
implement for Japanese banking organizations the
risk-based capital framework developed by the Basle
Committee. The Board considers the Basle Committee
proposal an important step toward a more consistent
and equitable international standard for assessing capital adequacy.
In this case, the Board notes that the primary capital
ratio of Applicant meets United States standards after
making adjustments to reflect Japanese banking and
10. Thus, for example, the Board has generally approved the proposals involving a decline in capital only where the applicants have
promptly restored their capital to pre-acquisition levels following
consummation of the proposals and have implemented programs of
capital improvement to raise capital significantly above minimum
l e v e l s . See,
e.g.,
Citicorp,
7 2 FEDERAL RESERVE BULLETIN
726
(1986); Security Pacific Corporation, 72 FEDERAL RESERVE BULLETIN
800 (1986). See also Security Banks of Montana, 71 FEDERAL RESERVE BULLETIN 2 4 6 ( 1 9 8 5 ) .
11. See Toyo Trust and Banking Co., Ltd., 74 FEDERAL RESERVE
BULLETIN 623 (Order dated July 11, 1988); Taiyo Kobe Bank, 74
FEDERAL RESERVE BULLETIN 621 (Order dated July 8, 1988); Sumitomo Trust & Banking Co., Ltd., 73 FEDERAL RESERVE BULLETIN 749
(1987); Ljubljanska Banka-Associated Bank, 72 FEDERAL RESERVE
BULLETIN 489 (1986); The Mitsubishi Trust and Banking Corporation,
72 FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of
Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See
also Policy Statement on Supervision and Regulation of ForeignBased Holding Companies, Federal Reserve Regulatory Service
114-835 (1979).
12. 53 Federal Register 8,549 (1988).
688 Federal Reserve Bulletin • October 1988
accounting practices, including consideration of a portion of the unrealized appreciation in Applicant's
portfolio of equity securities consistent with the principles in the Basle capital framework. 13 The Board
also has considered several additional factors that
mitigate its concern in this case. Applicant has committed to maintain the resultant bank of the merger
among the more strongly capitalized banking organizations of comparable size in the United States. The
Board notes further that Applicant is in compliance
with the capital and other financial requirements of
Japanese banking organizations. In addition, the
Board has considered as favorable factors that, in
anticipation of implementation of the Basle Committee
risk-based capital framework and this proposed transaction, Applicant has increased its equity capital by
approximately $940 million through the issuance of
common stock on April 30, 1988, and the retention of
earnings through Applicant's most recent fiscal year.
The Board also notes that Applicant's capital improvement program is consistent with meeting the standards
in the Basle Committee capital framework for 1990 and
1992.
In this regard, California First Bank has indicated
that it will fund the $750 million purchase price of
Union Bank through the issuance by California First
Bank of new common shares, the assumption or
replacement by California First Bank of outstanding
Union Bancorp preferred stock and subordinated capital notes, and from internally generated funds. As
noted above, subsequent to the execution of the letter
of intent with respect to the proposed transaction,
Applicant raised approximately $745 million of new
common equity, which is substantially in excess of the
cash amount of Applicant's proposed investment in
connection with the transaction. Accordingly, consummation of the proposal will not result in any
diminution of Applicant's overall capital position.
Based on a review of all the facts of record, the
Board concludes that the financial and managerial
factors are consistent with approval of this application.
In considering the convenience and needs of the
communities to be served, the Board has taken into
account the records of California First Bank and
Union Bank under the Community Reinvestment Act
("CRA"), 12 U.S.C. § 2901 et seq,14 The Board notes
that the Federal Deposit Insurance Corporation has
13. Capital
Adequacy
Guidelines,
50 Federal
Register
16,057
(1985), 71 FEDERAL RESERVE BULLETIN 4 4 5 (1985).
14. The CRA requires the Board, in its evaluation of a bank holding
company application, to assess the record of an applicant in meeting
the credit needs of the entire community, including the low- and
moderate-income neighborhoods, consistent with safe and sound
operation.
indicated that there are certain areas in which California First Bank should improve its CRA performance.
In response, California First Bank has adopted a
comprehensive CRA plan, which includes:
- creation of direct deposit checking accounts with
no minimum balance requirements or monthly service charges for low-income individuals;
- expected increased funding for California First
Bank's contributions program and expanded use of
the program to support low-income housing and
small business development;
- intensified efforts to provide bilingual banking
services in such languages as Chinese, Korean,
Tagalog, and Vietnamese, with an emphasis on
providing services in Spanish; and
- the establishment of a formal community outreach
program to maintain dialogue with community organizations in minority, low- and moderate-income
areas.
Under the plan, California First Bank plans to make
$84 million available in housing-related and small
business loans in minority and low-income communities during 1988 to 1990, consistent with safe and
sound banking practices.
Based on the foregoing and all the facts of record,
the Board concludes that convenience and needs considerations are consistent with approval.
California First Bank engages, through several joint
ventures, in real estate investment and development
activities authorized by state law. In addition, Union
Bank owns minority interests in two joint ventures
engaged in certain other activities authorized under
state law. These investments represent more than 5
percent of the outstanding voting shares of the joint
ventures and involve the conduct of activities that are
not permissible under section 4 of the Act. 15 The
investments also are not permissible under section
225.22(d)(2) of Regulation Y (relating to activities
conducted by nonbank subsidiaries of holding company state banks), because the joint ventures are not
wholly owned by California First Bank or Union Bank
as required under that regulation. 16 Accordingly, Ap-
15. Security
Pacific
Corporation,
7 2 FEDERAL RESERVE BULLETIN
800 (1986).
16. 12 C.F.R. § 225.22(d)(2). The Board adopted this regulation in
1971 in the absence of evidence that acquisitions by holding company
banks were resulting in evasions of the purposes of the Act. Board
Press Release dated May 13, 1971, 36 Federal Register 9,292 (May 22,
1971). The Board, however, stated that it would review the continued
merits of the regulation from time to time in light of experience in
administering the Act. Id. The Board currently has this regulation
under review and has asked for comment, in connection with the
exercise of real estate development powers by holding company
banks, as to whether modifications in the regulation are appropriate.
Legal Developments
plicant has committed to conform these investments to
the requirements of the Act and the Board's regulations and has committed that all future real estate and
other investments by the resultant bank and its subsidiaries will conform to the Board's regulations, including section 225.22(d)(2) of Regulation Y. In addition, Applicant has made certain commitments limiting
its real estate investments and has agreed to conform
to any change in Board regulations or policy with
respect to real estate investments.
Based on the foregoing and other facts of record and
in reliance on the commitments made by Applicant
and California First Bank, the Board has determined
that consummation of the transaction would be in the
public interest and that the application should be, and
hereby is, approved. 17 The 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 San Francisco, pursuant
to delegated authority.
By order of the Board of Governors, effective August 31, 1988.
Voting for this action: Vice Chairman Johnson and Governors Angell, Heller, Kelley, and La Ware. Voting against this
action: Governor Seger. Absent and not voting: Chairman
Greenspan.
JAMES M C A F E E
Associate Secretary of the Board
Dissenting Statement of Governor Seger
I dissent from the Board's action in this case. I believe
that foreign banking organizations whose primary capital, based on U.S. accounting principles, is below the
Board's minimum capital guidelines for U.S. banking
organizations have an unfair competitive advantage in
the United States over domestic banking organizations. In my view, such foreign organizations should
be judged against the same financial and managerial
standards, including the Board's capital adequacy
guidelines, as are applied to domestic banking organizations. The majority concludes that Applicant's primary capital meets United States standards. To do so,
however, the majority makes adjustments that are not
17. By approving California First Bank's application to acquire the
shares of Union Bank, the Board is not overruling the precedent
established by Depositors Trust Company, 64 FEDERAL RESERVE
BULLETIN 213 (1978). In that case the Board held as a matter of policy
that it would not approve the application of a commercial bank to
operate as a bank holding company. California First Bank, however,
is acquiring the shares of Union Bank for a short time only and solely
for the purpose of effecting the merger of Union Bank into California
First Bank.
689
available for U.S. banks under guidelines that have not
yet become effective for U.S. or foreign banking
organizations.
In addition, I am concerned that while this application would permit a large Japanese banking organization to acquire a bank in the U.S., U.S. banking
organizations are not permitted to make comparable
acquisitions in Japan. While some progress is being
made in opening Japanese markets to U.S. banking
organizations, U.S. banking organizations and other
financial institutions, in my opinion, are still far from
being afforded the full opportunity to compete in
Japan.
August 31, 1988
First Bank System, Inc.
Minneapolis, Minnesota
Order Approving Acquisition of a Bank Holding
Company
First Bank System, Inc., Minneapolis, Minnesota, a
bank holding company within the meaning of the Bank
Holding Company Act (12 U.S.C. § 1841 et seq.)
("BHC Act"), has applied for the Board's approval
under section 3(a)(3) of the BHC Act (12 U.S.C.
§ 1842(a)(3)) to acquire all the voting shares of Cottage
Grove Bancorporation, Inc., Cottage Grove, Minnesota ("Cottage Grove"), and thereby indirectly acquire Minnesota National Bank of Cottage Grove,
Cottage Grove, Minnesota ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (53 Federal Register 13,322 (1988)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the BHC Act.
First Bank System is the largest commercial banking
organization in Minnesota, controlling deposits of
$11.3 billion, representing 29 percent of the total
deposits in commercial banking organizations in the
state. 1 Bank is among the smaller banking organizations in Minnesota, controlling deposits of $28 million,
representing less than one percent of total deposits in
commercial banking organizations in the state. Upon
consummation of this proposal, First Bank System
would control $11,328 billion in deposits, representing
29.1 percent of statewide commercial bank deposits.
Consummation of this proposal would not increase
significantly the concentration of banking resources in
Minnesota.
1. Banking data are as of December 31, 1986. Thrift data are as of
June 30, 1986.
690 Federal Reserve Bulletin • October 1988
First Bank System competes directly with Cottage
Grove in the Minneapolis-St. Paul banking market. 2
First Bank System is the largest commercial banking
organization in the market, with deposits of $9.3
billion, representing 40 percent of the market's total
deposits in commercial banks. Cottage Grove is the
85th largest commercial banking organization in the
market, with $28 million in deposits, representing 0.1
percent of the market's total commercial bank deposits. The Minneapolis-St. Paul banking market is considered highly concentrated with a four firm ratio of
73.4 percent. Consummation of this proposal would
increase the Herfindahl-Hirschman Index ("HHI") of
the market by 10 points to 2285.3
Although consummation of this proposal would
eliminate some existing competition in the Minneapolis-St. Paul banking market, over 116 other commercial banks would continue to operate in the market. In
addition, the Board has considered the presence of
thrift institutions in the banking market in its analysis
of this proposal. The Board previously has indicated
that thrift institutions have become, or have the potential to become, major competitors of commercial
banks. 4 Thrift institutions already exert a considerable
competitive influence in the market as providers of
NOW accounts and consumer loans, and many are
engaged in the business of making commercial loans.
Based upon the size, market share and commercial
lending activities of thrift institutions in the market,
the Board has concluded that thrift institutions exert a
significant influence upon competition in the Minneapolis-St. Paul banking market. 5 Accordingly, in view of
all the facts of record, and in particular in light of the
small increase in concentration in the market, the
2. The Minneapolis-St. Paul banking market is defined as the
Minneapolis-St. Paul RMA adjusted to include all of Scott and Carver
Counties and Lanesburgh Township in Le Sueur County.
3. 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 over 1800 is considered highly concentrated, and the
Department is likely to challenge a merger that increases the HHI by
more than 50 points unless other factors indicate that the merger will
not substantially lessen competition. The Department of Justice has
informed the Board that a bank merger or acquisition is not likely to
be challenged (in the absence of other factors indicating an anticompetitive effect) 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 anti-competitive effects
implicitly recognizes the competitive effects of limited purpose lenders and other non-depository financial entities.
4. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743
(1984); NCNB Bancorporation, 70 FEDERAL RESERVE BULLETIN 225
(1984); General Bancshares Corporation, 69 FEDERAL RESERVE BULLETIN 802 (1983); and First Tennessee National Corporation, 69
FEDERAL RESERVE BULLETIN 2 9 8 ( 1 9 8 3 ) .
5. If 50 percent of the deposits controlled by thrift institutions were
included in the calculation of market concentration, First Bank and
Cottage Grove would control 36.1 percent and 0.1 percent of total
market deposits, respectively. The HHI would increase by 8 points to
1898 upon consummation of this proposal.
Board has determined that consummation of this proposal would not have a significant adverse effect on
existing competition in the Minneapolis-St. Paul banking market.
The financial and managerial resources and future
prospects of First Bank System, its subsidiary banks,
Cottage Grove and Bank also are consistent with
approval of the proposal.
In considering the convenience and needs of the
communities to be served, the Board has taken into
account the records of First Bank System and Cottage
Grove under the Community Reinvestment Act
("CRA"). 6 The CRA requires the federal banking
agencies, in connection with their examination of
financial institutions, to assess the record of banks
under their supervision in meeting the credit needs of
their entire communities, the low- and moderateincome neighborhoods, consistent with the safe and
sound operation of the institutions. The CRA also
requires the agencies to take these records into account when acting on certain applications involving
the institutions.
The Board has received comments regarding First
Bank System's CRA performance generally and with
particular respect to its subsidiary, the First Bank of
Billings, Billings, Montana ("Billings Bank"). In light
of these comments, the Board has reviewed the overall
CRA record of First Bank System and of the Billings
Bank in particular. The most recent report of examination of the Billings Bank identified certain areas
where the Billings Bank could improve its performance, particularly with regard to real estate lending
and the bank's efforts to market its credit services to
its community. In order to strengthen the Billings
Bank's CRA performance, First Bank System has
committed to do the following:
1) Establish lending goals and strategies to enhance
home mortgage, home improvement, and business
lending activities in the Billings south side neighborhood.
2) Establish means of communication by which First
Bank of Billings will inform and address the needs of
low- and moderate-income and minority individuals
and families in its community.
3) Provide means by which community groups will
initiate local participation in the lending program.
First Bank System is also in the process of implementing a corporate CRA policy that will give accountability for CRA compliance at various levels within the
First Bank System organization. The policy specifies
mechanisms for ensuring and monitoring CRA compliance at Applicant's subsidiary banks, and as well
6. 12 U.S.C. § 2901
etseq.
Legal Developments
691
implements a coordinated compliance strategy among
the banks. Based upon the Board's review of First
Bank System's CRA record, and after taking into
account First Bank System's commitments to enhance
its ability to meet the convenience and needs of all
segments of its community, the Board has determined
that the convenience and needs factors are consistent
with approval of the application.
Accordingly, based on the foregoing and other facts
of record, the Board has determined that the application should be, and hereby is, approved. The acquisition 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
Minneapolis, acting pursuant to delegated authority.
By order of the Board of Governors, effective August 31, 1988.
ately pursuant to the provisions of section 3(b) of the
Act (12 U.S.C. § 1842(b)) in order to safeguard
depositors of Bank. Having considered the record of
this application in light of the factors contained in the
Act, the Secretary of the Board has determined that
consummation of the transaction would be in the
public interest and that the application should be
approved on a basis that would not preclude immediate consummation of the proposal. On the basis of
these considerations, the application is approved.
The transaction may be consummated immediately
but in no event later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of San Francisco, acting pursuant to delegated authority.
By order of the Secretary of the Board acting
pursuant to delegated authority for the Board of Governors, effective August 2, 1988.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, Kelley, and LaWare. Absent and
not voting: Chairman Greenspan.
Secretary of the Board
JAMES M C A F E E
Associate Secretary of the Board
First Interstate Bancorp
Los Angeles, California
Order Approving the Acquisition of a Bank
First Interstate Bancorp, Los Angeles, California, a
bank holding company within the meaning of the Bank
Holding Company Act, (the "Act"), has applied for
approval under section 3(a)(3) of the Act (12 U.S.C. §
1842(a)(3)) to acquire Alaska Continental Bank, Anchorage, Alaska.
Public notice of the application before the Board is
not required by the Act and in view of the emergency
situation the Board has not followed its normal practice of affording interested parties the opportunity to
submit comments and views. In view of the emergency
situation involving Bank, the Alaska Director of Banking and Securities has recommended immediate action
by the Board to prevent the probable failure of Bank.
In connection with the application, the Secretary of
the Board has taken into consideration the competitive
effects of the proposed transaction and the financial
and managerial resources and future prospects of the
banks concerned, and the convenience and needs of
the communities to be served. On the basis of the
information before the Board, the Secretary of the
Board finds that an emergency situation exists so as to
require that the Secretary of the Board act immedi
WILLIAM W . WILES
First McAllen International Bancshares, Inc.
McAllen, Texas
Order Approving Formation of a Bank Holding
Company
First McAllen International Bancshares, Inc., McAllen, Texas ("Applicant"), has applied for the Board's
approval under section 3(a)(1) of the Bank Holding
Company Act, as amended ("BHC Act") (12 U.S.C.
§ 1842(a)(1)), to become a bank holding company by
acquiring 100 percent of the voting shares of Inter
National Bank of McAllen, McAllen, Texas
("Bank").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the BHC Act
(12 U.S.C. § 1842(b)). The time for filing comments
has expired, and the Board has considered the application and all comments received in light of the factors
set forth in section 3(c) of the BHC Act (12 U.S.C.
§ 1842(c)).
Applicant, a non-operating corporation with no subsidiaries, was organized for the purpose of becoming a
bank holding company by acquiring Bank. Bank holds
deposits of $33.2 million and ranks 567 out of 1242
commercial banking organizations in Texas. 1 Based on
all the facts of record, the Board believes that consum-
1. All banking data are as of December 31, 1987.
692
Federal Reserve Bulletin • October 1988
mation of the proposal would have no adverse effect
on the concentration of banking resources in Texas.
Further, because this proposal represents the restructuring of Bank's ownership into corporate form,
consummation of the proposed transaction would not
result in any adverse effects on existing or potential
competition, nor would it increase the concentration
of banking resources in any relevant banking market.
Accordingly, the Board concludes that competitive
considerations under the BHC Act are consistent with
approval of the application.
The Board has previously indicated that a bank
holding company should serve as a source of financial
and managerial strength to its subsidiary banks. 2 Although Applicant will incur some debt in connection
with this proposal, it appears that Applicant will be
able to service its debt. Accordingly, the Board concludes that 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 are also consistent
with approval.
Based on the foregoing and all the facts of record
and the commitments offered in this case, the Board
has determined that the application should be, and
hereby is, approved. The 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 Dallas, acting pursuant to
delegated authority.
By order of the Board of Governors, effective August 12, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
Associate Secretary of the Board
Fort Madison Financial Company
Fort Madison, Iowa
Order Approving Formation of a Bank Holding
Company
Fort Madison Financial Company, Fort Madison,
Iowa ("Fort Madison"), has applied for the Board's
approval pursuant to section 3(a)(1) of the Bank Hold-
2. Policy Statement: Responsibility of Bank Holding Companies to
Act as Sources of Strength to Their Subsidiary Banks, 52 Federal
Register 15,707 (1987); CNB Bancorp, Inc., Danville, Illinois, 73
FEDERAL RESERVE BULLETIN 5 9 8 ( 1 9 8 7 ) .
ing Company Act, as amended (12 U.S.C.
§ 1842(a)(1)) ("BHC Act"), to become a bank holding
company by acquiring all of the voting shares of Fort
Madison Bank & Trust Company, Fort Madison, Iowa
("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
given in accordance with section 3(b) of the BHC Act
(53 Federal Register 16,898 (1988)). The time for filing
comments has expired, and the Board has considered
the application and all comments received in light of
the factors set forth in section 3(c) of the BHC Act.
Fort Madison, a non-operating corporation with no
subsidiaries, 1 has applied to become a bank holding
company by acquiring Bank, which holds deposits of
$51.1 million.2 Upon consummation of this proposal,
Fort Madison will become the 124th largest banking
organization in Iowa, controlling less than one percent
of total deposits held by commercial banks in the state.
Bank operates in the Fort Madison-Keokuk banking
market, 3 where it is the second largest of fourteen
banks and controls 13.2 percent of total deposits in
commercial banks in the market. The principals of
Fort Madison are not affiliated with any other depository institutions in this market. Consummation of this
proposal would not result in any adverse effects upon
competition or increase the concentration of banking
resources in any relevant area. Accordingly, the Board
concludes that competitive considerations under the
BHC Act are consistent with approval.
The Board previously has indicated that a bank
holding company should serve as a source of financial
and managerial strength for its subsidiary bank. 4 Although Fort Madison will incur debt in connection
with this proposal, it appears that Fort Madison will be
able to service its debt and serve as a source of
financial and managerial strength to Bank, particularly
in light of certain commitments by Fort Madison's
principals. Accordingly, the Board concludes that the
financial and managerial resources of Fort Madison
and Bank are consistent with approval. 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 the commitments made by Fort Madison and
1. Fort Madison recently sold its ownership in its sole banking
subsidiary, Iowa State Bank, Fort Madison, Iowa, and currently is not
a bank holding company.
2. All banking data are as of June 30, 1987.
3. The Fort Madison-Keokuk banking market is approximated by
Lee County, Iowa, excluding Greenbay and Cedar Township; and
including the western portion of Hancock County, Illinois.
4. Policy Statement: Responsibility of Bank Holding Companies to
Act as Sources of Strength to their Subsidiary Banks, 52 Federal
Register
15,707 ( 1 9 8 7 ) ; CNB
BULLETIN 5 9 8 (1987).
Bancorp,
Inc.,
7 3 FEDERAL RESERVE
Legal Developments
its principals, the Board has determined that the
application should be, and hereby is, approved. The
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 Chicago, acting pursuant to delegated authority.
By order of the Board of Governors, effective August 15, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Heller. Absent and not voting:
Governor Kelley.
JAMES M C A F E E
Associate Secretary of the Board
HRH Bancorp, Inc.
Grant City, Missouri
Order Approving Formation of a Bank Holding
Company
HRH Bancorp, Inc., Grant City, Missouri, has applied
for the Board's approval under section 3(a)(1) of the
Bank Holding Company Act (12 U.S.C. § 1842(a)(1))
("BHC Act"), to become a bank holding company by
acquiring all of the outstanding voting shares of Farmers Bank of Grant City/Sheridan, Grant City, Missouri
("Bank").
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3(b) of the BHC Act
(53 Federal Register 7,971 (1988)). The time for filing
comments has expired, and the Board has considered
the application and all comments received in light of
the factors set forth in section 3(c) of the BHC Act.
Applicant is a nonoperating corporation formed to
acquire Bank. Bank is among the smaller commercial
banking organizations in Missouri, with total deposits
of $11.9 million, representing less than one percent of
the total deposits in commercial banks in the state. 1
Consummation of the transaction would not result in
an increase in the concentration of banking resources
in Missouri.
Bank operates in the Worth County banking
market, 2 where it is the second largest of two commercial banks, controlling 33.5 percent of the total deposits in commercial banks in the market. Principals of
Applicant are not affiliated with any other depository
1. Banking data are as of December 31, 1987.
2. The Worth County banking market is approximated by Worth
County, Missouri.
693
institutions in this market. Consummation of this
proposal would not result in any adverse effects upon
competition or increase the concentration of banking
resources in any relevant area.
Applicant will acquire Bank with existing funds and
proposes to make an additional capital injection into
Bank. The capital injection will serve to improve the
condition of Bank and enhance its future prospects.
Based upon the facts of record, including certain
commitments made by Applicant's principal, the financial and managerial resources and future prospects
of Applicant and Bank are consistent with approval.
Considerations relating to convenience and needs of
the community to be served also are consistent with
approval of the application.
Based on the foregoing and other facts of record, the
Board has determined that consummation of the transaction would be in the public interest and that the
application should be, and hereby is, approved. The
transaction shall not be consummated before the thirtieth calendar day following the effective date of this
Order, or later than three months following the effective date of this Order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of Kansas City, acting pursuant to delegated
authority.
By order of the Board of Governors, effective August 31, 1988.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, Kelley, and La Ware. Absent and
not voting: Chairman Greenspan.
JAMES M C A F E E
Associate Secretary of the Board
Moore Financial Group Incorporated
Boise, Idaho
Order Approving Acquisition of a Bank Holding
Company
Moore Financial Group Incorporated, Boise, Idaho
("Moore"), a bank holding company within the meaning of the Bank Holding Company Act (the " A c t " )
(12 U.S.C. § 1841 etseq.), has applied for the Board's
approval pursuant to section 3(a)(3) of the Act
(12 U.S.C. § 1842(a)(3)), to acquire all of the voting
shares of Western Bank Holding Company, Bellevue,
Washington ("Western"), and thereby indirectly acquire First Western Bank, Bellevue, Washington
("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (53 Federal Register 23,152 (1988)). The
694 Federal Reserve Bulletin • October 1988
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.
Section 3(d) of the Act (12 U.S.C. § 1842(d)), the
Douglas Amendment, prohibits the Board from approving an application by a bank holding company to
acquire control of any bank located outside of the bank
holding company's home state unless the acquisition is
"specifically authorized by the statute laws of the state
in which such bank is located, by language to that
effect and not merely by implication." 1
Moore's home state is Idaho 2 and Bank's home state
is Washington. Effective July 1, 1987, the interstate
banking statute of Washington authorizes bank holding companies located in other states to acquire a
Washington bank subject to certain conditions, including in pertinent part:
(1) that the acquiree bank has been in operation for
three years or more; and
(2) that the state in which the acquirer bank holding
company principally conducts its operations permits
a Washington bank or bank holding company to
acquire a bank or bank holding company in that
state. 3
Section 30.04.232(c) of that statute also requires that
the Washington Supervisor of Banking adopt a rule
making a determination whether the laws of a particular state meet this reciprocity requirement. Upon a
review of the record, this transaction fulfills the requirements of Washington law. Bank has been in
operation since 1979, and the Washington Supervisor
of Banking has adopted a regulation determining that
the interstate banking statute of Idaho meets the
reciprocity requirement. 4
The interstate banking statute of Idaho permits
out-of-state bank holding companies without geographic limitation to acquire control of the stock or
assets of Idaho financial institutions, subject to approval by the Director of the Department of Finance. 5
Based on the foregoing and other facts of record, the
Board has determined that the proposed acquisition is
specifically authorized by the statute laws of Washington and thus Board approval is not prohibited by the
1. A bank holding company's home state is the state in which the
operations of the bank holding company's subsidiary banks were
principally located on July 1, 1966, or on the date on which the
company became a bank holding company, whichever is later.
2. Moore controls bank subsidiaries in Idaho, Oregon and Utah.
More than 80 percent of Moore's assets are located in Idaho, which is
considered Moore's home state.
3. Wash. Rev. Code Ann. § 30.04.230 et seq. (1986).
4. Wash. Admin. Code § 50-48-100 (1988).
5. Idaho Code § 26-2605 (Supp. 1987).
Douglas Amendment. Inasmuch as section 30.04.230
of the Washington Revised Code requires approval of
this transaction by the Washington Supervisor of
Banking, the Board's Order is specifically conditioned
upon satisfaction of this state regulatory requirement.
Moore, a multi-bank holding company with three
commercial bank subsidiaries, controls total deposits
of $2.5 billion and engages in certain nonbanking
activities. It is the largest commercial banking organization in Idaho, controlling deposits of $2.2 billion,
which represent 37.4 percent of the deposits in commercial banking organizations in the state. 6 Western, a
one-bank holding company, controls Bank, which is
the 42nd largest commercial banking organization in
Washington and controls deposits of $30.5 million,
representing less than one percent of the deposits in
commercial banking organizations in the state.
The Board has considered the effects of the proposal
upon competition in the relevant banking markets.
Because Moore does not operate a bank in any market
in which Western operates a banking subsidiary, consummation of the proposal would not eliminate significant existing competition in any relevant banking
market. The Board has also concluded that consummation of this proposal would not have any significant
adverse effect on probable future competition in any
relevant banking market.
The financial and managerial resources and future
prospects of Moore, its subsidiary banks, Western and
Bank are considered consistent with approval. The
convenience and needs of the communities to be
served are also consistent with approval of the application.
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved, subject to the concurrence of
the Washington Supervisor of Banking. This acquisition 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
San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective August 24, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, and LaWare. Absent and not voting: Governors Angell, Heller, and Kelley.
JAMES M C A F E E
Associate Secretary of the Board
6. All banking data are as of December 31, 1986.
Legal Developments
The Union of Arkansas Corporation
Little Rock, Arkansas
Orders Issued Under Section 4 of the Bank
Holding Company Act
Order Approving Acquisition of a Bank
Bankers Trust New York Company
New York, New York
The Union of Arkansas Corporation, Little Rock,
Arkansas, a bank holding company within the meaning
of the Bank Holding Company Act ("Act")
(12 U.S.C. § 1841 et seq.), has applied for approval
under section 3(a)(3) of the Act (12 U.S.C. §
1842(a)(3)) to acquire the successor of BancFirstWestlake, N.A., Austin, Texas.
Public notice of the application before the Board is
not required by the Act and in view of the emergency
situation the Board has not followed its normal practice of affording interested parties the opportunity to
submit comments and views. In view of the emergency
situation involving Bank, the Comptroller of the Currency has recommended immediate action by the
Board to prevent the probable failure of First National
Bank.
In connection with the application, the Secretary of
the Board has taken into consideration the competitive
effects of the proposed transaction and the financial
and managerial resources and future prospects of the
banks concerned, and the convenience and needs of
the communities to be served. On the basis of the
information before the Board, the Secretary of the
Board finds that an emergency situation exists so as to
require that the Secretary of the Board act immediately pursuant to the provisions of section 3(b) of the
Act (12 U.S.C. § 1842(b)) in order to safeguard depositors of Bank. Having considered the record of this
application in light of the factors contained in the Act,
the Secretary of the Board has determined that consummation of the transaction would be in the public
interest and that the application should be approved on
a basis that would not preclude immediate consummation of the proposal. On the basis of these considerations, the application is approved.
The transaction may be consummated immediately
but in no event 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 Secretary of the Board acting
pursuant to delegated authority for the Board of Governors, effective August 25, 1988.
WILLIAM W . WILES
Secretary of the Board
695
Order Approving Application to Engage in
Combined Investment Advisory and Securities
Brokerage Activities
Bankers Trust New York Company, New York, New
York ("BTNY"), 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
and section 225.21(a) of the Board's Regulation Y
(12 C.F.R. § 225.21(a)), to expand the authority of its
wholly owned subsidiary, BT Brokerage Corporation,
New York, New York ("BT Brokerage"), to include
the activities of: providing investment advisory and
research services to "Institutional Customers"; 1 furnishing general economic advice and forecasting; and
providing an integrated combination of securities brokerage services and investment advisory activities
("full-service brokerage activities") to such customers. BT Brokerage presently engages in securities
brokerage services throughout the United States
pursuant to section 225.25(b)(15) of Regulation Y,
12 C.F.R. § 225.25(b)(15), and now proposes to provide its expanded investment advisory and full-service
brokerage activities to institutional customers in addition to its previously approved discount brokerage
activities.
BTNY has also applied to expand the authority of its
wholly owned subsidiary BT Securities, New York,
New York ("BT Securities"), to include the provision
of discount brokerage, investment advice, and full-service brokerage activities to institutional customers
1. An Institutional Customer is defined by BTNY to be:
(1) a bank (acting in an individual or fiduciary capacity); an
insurance company; a registered investment company under the
Investment Company Act of 1940; or a corporation, partnership,
trust, proprietorship, organization or institutional entity with assets
exceeding $1,000,000 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 $1,000,000, or
whose investment decisions are made by a bank, insurance company or investment advisor registered under the Investment Advisors Act of 1940 (the "Advisors Act");
(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 $1,000,000;
(4) a broker-dealer or option trader registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), or other securities,
investment or banking professional; or
(5) an entity all of the equity owners of which are Institutional
Customers.
696 Federal Reserve Bulletin • October 1988
only. 2 BT Securities presently engages in underwriting
and dealing in U.S. government and other bankeligible securities under section 225.25(b)(16) of Regulation Y, 12 C.F.R. § 225.25(b)(16), and in certain
bank-ineligible securities on a limited basis. 3
BTNY, with total consolidated assets of $60.0 billion, is the 8th largest commercial banking organization in the nation. It operates three subsidiary banks,
one each in New York, Delaware, and Florida, and
engages directly and through other subsidiaries in a
broad range of nonbanking activities. 4
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been duly published (52 Federal Register
49,505 (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.
I. Background
The Board has previously determined that a combination of investment advice and securities execution
services to institutional customers through the same
bank holding company subsidiary is closely related
and a proper incident to banking under section 4(c)(8)
of the BHC Act and does not violate the GlassSteagall Act. 5
BTNY has structured its proposal to parallel in most
substantive respects the NatWest, J.P. Morgan and
Manufacturers Hanover proposals. BT Brokerage and
BT Securities will hold themselves out as separate and
distinct corporations with their own properties, assets,
liabilities, capital, books and records. 6 All of the
brokerage subsidiaries' notices, advice, confirmations,
correspondence and other documentation will be
2. Both BT Securities and BT Brokerage will also provide services
to other subsidiaries of BTNY as permissible servicing activities
under section 225.22 of Regulation Y, 12 C.F.R. § 225.22.
3. BT Securities has been authorized to underwrite and deal in
municipal revenue bonds, commercial paper, mortgage-related securities and consumer receivables-related securities, so long as it is not
"engaged principally" in such activities in contravention of section 20
o f t h e G l a s s - S t e a g a l l A c t . Citicorp,
et al.,
II. BHC Act Factors
BTNY has proposed several modifications to the conduct of activities approved in NatWest, J.P. Morgan,
and Manufacturers Hanover. For the reasons set forth
below, the Board concludes that these modifications
do not alter the underlying rationale of the Board's
previous decisions in those cases that the combined
activities are closely related to banking and a proper
incident thereto. 9
A. Definition of Institutional Customer.
BTNY's definition of institutional customer differs
from that approved in Manufacturers Hanover only in
that the definition includes investment or banking
professionals. In the Board's view, expansion of the
definition of institutional customers to include investment and banking professionals would not materially
increase the likelihood of significant adverse effects.
BTNY also proposes that the subsidiaries make
available their services to employees of BTNY and its
subsidiaries who may not be investment or banking
professionals, in order that BTNY may monitor the
employees' securities activities for compliance with
BTNY's insider trading rules. Because these employees would be retail, rather than institutional custom-
7 3 FEDERAL RESERVE
BULLETIN 473 (1987) ("Citicorp" or "Section 20 Order").
4. Banking data are as of March 31, 1988.
5. National Westminster Bank PLC, et al., 72 FEDERAL RESERVE
BULLETIN 584 (1986) ( ' " N a t W e s t " ) ajfdsub nom., Securities Industry
Ass'n v. Board of Governors, 821 F.2d 810 (D.C. Cir. 1987), cert,
denied, 108 S. Ct. 697 (1988); J.P. Morgan and Company, Inc. 73
FEDERAL RESERVE BULLETIN 8 1 0 ("J.P.
Morgan")-,
Manufacturers
Hanover
Corporation,
7 3 FEDERAL RESERVE BULLETIN 9 3 0 (1987)
("Manufacturers
Hanover").
6. Any back office services provided by affiliates will be compensated for in accordance with the fair market pricing provisions of
section 23B of the Federal Reserve Act, 12 U.S.C. § 371c-l.
Moreover, any research or investment advice purchased from affiliates also will be compensated for in accordance with section 23B.
clearly imprinted to avoid confusion with affiliated
banks. All customer agreements will specify that the
brokerage subsidiaries are solely responsible for their
contractual obligations and commitments.
As in earlier proposals approved by the Board,
when both BT Brokerage and BT Securities purchase
securities for a customer from an affiliate, they will
disclose that fact to the customer and obtain the
customer's consent. 7 The brokerage subsidiaries also
will fully disclose their dual role as securities broker
and investment advisor to their institutional
customers. 8 In addition, the brokerage subsidiaries
will exercise discretionary portfolio management for
institutional customers; the subsidiaries do not intend
to market such services.
7. As further specified below, the disclosure terms and procedures
for each subsidiary will vary slightly, inasmuch as BT Brokerage
conducts purely agency activities. In contrast, BT Securities also may
hold a principal's position with respect to the securities it is brokering
or recommending, and therefore is subject to different disclosure
requirements under applicable securities law.
8. The brokerage subsidiaries will not offer their services to noninstitutional customers.
9. The Board hereby incorporates by reference its rationale and
findings in the NatWest and J.P. Morgan Orders regarding the
closely-relatedness of the proposed activities to banking. In addition,
these modifications do not alter the Board's determination in NatWest
and subsequent cases that the proposed activities are not activities
covered by section 20 of the Glass-Steagall Act.
Legal Developments
ers, BTNY has committed to restrict the services
provided to such employees in accordance with the
Board's recent Order approving the combination of
investment advisory and securities brokerage services
for retail customers. See Bank of New England Corporation,
74 FEDERAL RESERVE BULLETIN 700 ( O r d e r
dated August 10, 1988).
B. BT Securities Taking a Principal's Position.
BT Securities may take a principal's position in those
securities it is authorized to underwrite and deal in,
and as well may broker or recommend such securities
to its institutional customers. 10
With respect to potential conflicts of interest arising
from such dual activities, BTNY has committed to a
series of disclosure and other requirements that would
tend to mitigate the potential for such adverse effects.
Both BT Securities and BT Brokerage will prominently disclose in writing to each customer before
entering into an agreement to provide any brokerage
or advisory services that the brokerage subsidiaries
are not banks, are separate from any affiliated bank,
and the securities sold, offered, or recommended by
these subsidiaries are not deposits, are not insured by
the FDIC, are not guaranteed by an affiliated bank,
and are not otherwise an obligation of an affiliated
bank (unless such is in fact the case). Moreover, under
federal securities laws and common law fiduciary
requirements, both BT Securities and BT Brokerage
are required to disclose to an advisory customer any
interest of an affiliate as underwriter or market maker
in the securities being purchased or recommended.
With respect to BT Securities, BTNY also has
committed that this subsidiary will give prior notice to
customers as to whether it is acting as principal or
agent in any particular transaction, as set forth
below. 11 (The brokerage subsidiaries will not, pursuant to this proposal, offer securities to the public as
agent for an issuer).
10. As noted above, BT Securities may underwrite and deal in U.S.
government obligations and general obligations of states and municipalities and other securities member banks may underwrite and deal,
as well as municipal revenue bonds, commercial paper, mortgagerelated securities and consumer receivables-related securities.
11. In particular, BT Securities intends to inform its brokerage/
advisory customers of its underwriter/dealer role in three ways. First,
it will send out a special disclosure statement to each brokerage/
advisory customer at the commencement of the customer relationship
(or at the time of commencing full-service brokerage) informing the
customer that, as a general matter, BT Securities might be a principal,
or might be engaged in an underwriting, with respect to certain
securities as to which brokerage/advisory services are being provided.
Second, at the time a brokerage order is being taken, the customer will
be informed (usually orally) whether BT Securities is acting as agent
or as principal with respect to the security. Third, confirmations sent
to customers will state whether BT Securities is acting as agent or as
principal.
697
With respect to BT Brokerage, BTNY has committed that in any transaction in which BT Brokerage
purchases securities for an institutional customer from
an affiliate, BT Brokerage also will make prior disclosure of that fact to the customer and obtain the
customer's consent. This disclosure will occur both at
the beginning of the relationship with the institutional
customer and upon confirmation of each order. 12
In view of BTNY's provision for extensive disclosures in both brokerage subsidiaries regarding securities in which BT Securities may hold a principal's
position, and the likely financial sophistication of
BTNY's institutional customers, the Board concludes
that the likelihood of adverse effects, such as conflicts
of interests, arising from this aspect of the proposal is
substantially mitigated.
C. Cross Marketing of Services.
As previously approved in the J.P. Morgan proposal,
the brokerage subsidiaries will share customer lists
with bank affiliates, 13 as well as confidential information regarding such customers, only with the customers' consent. 14 In addition, BTNY proposes a cross
marketing of services whereby the brokerage subsidiaries and their affiliates will have an opportunity to
introduce each other's services to institutional
customers. 15
BTNY acknowledges that its affiliates cannot engage in such activities inconsistent with the cross
marketing restrictions in the Board's Section 20 Orders. Moreover, BTNY has proposed no cross marketing services that would be inconsistent with those
12. In addition, in order to ensure that its institutional customers
would receive unbiased investment advice from BT Brokerage,
BTNY has committed that research personnel of BT Brokerage will
not be provided with position reports regarding the securities its
affiliates may hold in inventory. As in J.P. Morgan, this condition
should help to ensure that institutional customers of BT Brokerage
receive unbiased investment advice.
For compliance reasons, BT Brokerage may, at the time a research
report is being released, disclose to customers its affiliates' positions
in securities that are the subject of the research report. If this
procedure is followed, research personnel may be able to learn about
affiliates' positions—after the research report is prepared—by virtue
of the public disclosure of those positions.
13. Furthermore, BTNY proposes making available to affiliated
banks the investment recommendations and research that it makes
available to unaffiliated investor clients or that are non-confidential.
14. BTNY has committed that there will be no flow of confidential
customer information between any affiliated bank and the brokerage
subsidiaries without customer consent. Additionally, any confidential
information obtained by a bank affiliate in its commercial banking
business will be subject to BTNY's policy against disclosure to
persons other than on a "need to know" basis.
15. BTNY proposes, as examples, that a bank affiliate could
introduce BT Brokerage to a client who is seeking to make open
market purchases of its own stock, or sales personnel at BT Securities
may sell certain instruments issued by affiliated banks, such as
certificates of deposit and bankers acceptances of Bankers Trust
Company.
698
Federal Reserve Bulletin • October 1988
Orders. In addition, and as noted above, both BT
Brokerage and BT Securities provide extensive disclosure at the commencement of their relationship with
an institutional customer regarding their separation
from an affiliated bank. Finally, as required by section
23B of the Federal Reserve Act, no affiliated bank may
engage in advertising for these subsidiaries stating or
suggesting that an affiliated bank is responsible for the
subsidiaries' obligations, or enter into any agreement
so stating or suggesting. In light of these factors, the
Board concludes that the private introduction of institutional customers to services of affiliates (consistent
with the terms of the Section 20 Orders) would not
result in significant adverse effects.
D. Management Interlocks Between BT
Brokerage and Affiliated Banks.
BTNY commits that no officer of any affiliated bank
will serve as an officer of BT Brokerage, and no
director of any affiliated bank will serve as an officer or
director of BT Brokerage. 16 Furthermore, as mandated by the Section 20 Order, BTNY commits that
there will be no interlocking relationships whatsoever
between affiliated banks and BT Securities. BTNY
proposes, however, that officers of affiliated banks
may serve as directors of BT Brokerage.
Under BTNY's present plan, one Executive Vice
President of Bankers Trust Company would serve as a
director of BT Brokerage. That officer would have
direct line responsibility for certain trust, investment
advisory and brokerage activities in Bankers Trust
Company, but not for lending activities. He would also
have a role in strategic planning and other general
managerial matters relating to Bankers Trust Company's private banking business as a whole, which
includes lending, but no responsibility for customer
interface or credit decisions in lending activities. 17
16. In addition, BTNY has committed that there will be no employee interlocks between BT Brokerage and affiliated banks.
17. BTNY asserts that the Executive Vice President in question
would be triply removed from the risks that BTNY's "Chinese Wall"
is designed to deal with. First, given his lack of responsibility for
customer interface or credit decisions for lending activities, he would
generally not receive material non-public information arising out of
lending activities. Second, the part of Bankers Trust Company he will
be associated with, the private banking group, generally makes loans
to individuals and to privately held companies, not to issuers of traded
securities, so even if he were to come into possession of confidential
information about a borrower, the information would ordinarily not be
material information as to any issuer of traded securities. Third,
BTNY contends that the Executive Vice President's activities relating
to BT Brokerage would involve him in broad oversight of the
corporation's activities, not in the preparation or dissemination of
investment advice.
The Board's reluctance in prior Orders 18 to authorize management interlocks between securities affiliates and domestic banks advances the principle of
corporate separateness, where an affiliated bank is
insulated from the financial fortunes of its securities
affiliate and from the risk of financial loss in those
securities in which the securities affiliate may hold a
principal's position. In addition, these interlock prohibitions serve to prevent common control of the decision-making process within a bank and its securities
affiliate so as not to influence the independent judgments of these subsidiaries, which would serve to
undermine the separation of these entities that the
Board seeks to achieve. These concerns, however, are
of a substantially smaller magnitude here, where BT
Brokerage would be engaged in purely agency activities and where no substantial capital is put at risk. 19
Therefore, the corporate separateness achieved
through entirely separate management structures is
not as critical for BT Brokerage as it would be for a
subsidiary (such as BT Securities) which may take a
principal's position in those securities it brokers and
recommends, and thereby subject that subsidiary to
the risk of substantial financial loss.
These prohibitions also reduce the potential for
conflicts of interests where one individual is required
to advance the differing objectives of a bank and its
securities affiliate, as well as to enhance the separation
of such affiliates. Such interlocks could facilitate the
flow of information between the affiliates, such that
commitments designed to allow bank commercial
lending departments to remain impartial extenders of
credit—uninfluenced by the fortunes or recommendations of its securities affiliate—could be rendered ineffective and result in unsound banking practices. In
view of the substantial Chinese Walls erected by
BTNY to prevent such information flows, and the
reduced incentive to engage in such unsound practices
where the affiliate has no salesman's stake in the
securities it brokers or recommends, the Board believes that the potential for such conflicts is substantially mitigated.
18. See, e.g., the Board's NatWest and Manufacturers
Hanover
Orders cited above; see also Bank of Nova Scotia, 74 FEDERAL
RESERVE BULLETIN 2 4 9 ( 1 9 8 8 ) .
19. In this regard, the Board notes that the current version of the
Proxmire Financial Modernization Act of 1988 prohibits officer or
director interlocks between a "securities affiliate" (engaged in the
underwriting of bank-ineligible securities) and an affiliated bank,
subject to a general asset limitation exception inapplicable here. This
prohibition does not extend to companies engaging solely in agency
activities, such as BT Brokerage. See S. 1886, 100th Cong., 2d Sess.,
134 Cong. Rec. S3520 (daily ed. March 31, 1988).
Legal Developments
III. Conclusion
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the public benefits associated with this proposal can
reasonably be expected to outweigh its 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 BTNY and the conditions
stated or incorporated by reference in this Order. 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 compliance 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 New
York, pursuant to delegated authority.
By order of the Board of Governors, effective August 15, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Heller. Absent and not voting:
Governor Kelley.
JAMES M C A F E E
Associate Secretary of the Board
Bank of Boston Corporation
Boston, Massachusetts
Order Approving Application to Engage in
Underwriting and Dealing in Certain Securities to a
Limited Extent
Bank of Boston Corporation, Boston, Massachusetts,
a bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), 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
225.23 of the Board's Regulation Y (12 C.F.R.
§ 225.23) to engage de novo through BancBoston
Securities, Inc., Boston, Massachusetts ("Company"), on a limited basis in underwriting and dealing in:
(1) municipal revenue bonds, including certain industrial development bonds;
(2) 1-4 family mortgage-related securities;
699
(3) commercial paper; and
(4) consumer-receivable-related securities ("CRRs")
(collectively "ineligible securities").
Applicant has also applied to engage through
Company in underwriting and dealing in securities
that state member banks are permitted to underwrite
and deal in under the Glass-Steagall Act (hereinafter "bank-eligible securities"), as permitted by section 225.25(b)(16) of Regulation Y (12 C.F.R.
§ 225.25(b)(16)).
Applicant, with consolidated assets of $33.4 billion,
is the 13th largest banking organization in the nation. It
operates four subsidiary banks and engages directly
and through subsidiaries in a broad range of permissible nonbanking activities. 1
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (53 Federal Register 7,970
(1988)). The Securities Industry Association, a trade
association of the investment banking industry, opposes the application for the reasons stated in its
earlier protests to similar applications by Citicorp, J.P.
Morgan & Co. Incorporated and Bankers Trust New
York Corporation. The California Bankers Association commented in favor of the application.
The Board has previously determined that underwriting and dealing in bank-eligible securities is closely
related to banking under section 4(c)(8) of the BHC
Act. 12 C.F.R. § 225.25(b)(16). In addition, the Board
concludes that Company's performance of this activity
may reasonably be expected to result in public benefits
which would outweigh adverse effects under the
proper incident to banking standard of section 4(c)(8)
of the BHC Act. Accordingly, Applicant may engage
through Company in underwriting and dealing in bankeligible securities to the extent that state member
banks are authorized by section 16 of the GlassSteagall Act.
The Board has also previously determined that the
conduct of the proposed ineligible securities underwriting and dealing activity is consistent with section
20 of the Glass-Steagall Act, provided the underwriting subsidiary derives no more than 5 percent of its
total gross revenue from underwriting and dealing in
the approved securities over any two-year period. 2
1. All data are as of March 31, 1988.
2. Citicorp, J.P. Morgan & Co. Incorporated and Bankers Trust
New
York
Corporation,
7 3 FEDERAL RESERVE BULLETIN 4 7 3 ( 1 9 8 7 )
("Citicorp/Morgan/Bankers Trust"), ajfd sub nom., Securities Industry Association v. Board of Governors of the Federal Reserve System,
839 F.2d 47 (2d Cir. 1988), cert, denied, 108 S. Ct. 697 (1988) ("SIA v.
Board"); and Chemical New York Corporation, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp,
Manufacturers Hanover Corporation and Security Pacific Corporation,
7 3 FEDERAL RESERVE BULLETIN 7 3 1 ( 1 9 8 7 ) ( " C h e m i c a l " ) .
700
Federal Reserve Bulletin • October 1988
The Board further found that, subject to the prudential
framework of limitations established in those cases to
address the potential for conflicts of interests, unsound
banking practices or other adverse effects, the proposed underwriting and dealing activities were so
closely related to banking as to be a proper incident
thereto within the meaning of section 4(c)(8) of the
BHC Act. Applicant has committed to conduct its
ineligible underwriting and dealing activities subject to
the 5 percent revenue test and the prudential limitations established by the Board in its Citicorp!Morgan!
Bankers Trust and Chemical Orders. 3
Consummation of the proposal would provide added
convenience to Applicant's customers. In addition,
the Board expects that the de novo entry of Applicant
into the market for these services would increase the
level of competition among providers of these services. Accordingly, the Board has determined that the
performance of the proposed activities by Applicant
can reasonably be expected to produce public benefits
which would outweigh adverse effects under the
proper incident to banking standard of section 4(c)(8)
of the BHC Act. 4
Based on the above, the Board has determined to
approve the underwriting application subject to all of
the terms and conditions established in the Citicorp!
Morgan!Bankers Trust and Chemical Orders, except
the market share limitation. 5
The Board's determination is 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 a bank holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder.
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
3. Applicant has not proposed a market share limitation. Accordingly, and in light of the decision in SIA v. Board, the Board has
determined not to require Applicant to comply with a market share
limitation.
4. Company may also provide services that are necessary incidents
to these approved activities. The incidental services should be taken
into account in computing the gross revenue limit on the underwriting
subsidiary's ineligible underwriting and dealing activities, to the
extent such limits apply to particular incidental activities.
5. The industrial development bonds approved in those applications
and for Applicant in this case are only those tax exempt bonds in
which the governmental issuer, or the governmental unit on behalf of
which the bonds are issued, is the owner for federal income tax
purposes of the financed facility (such as airports, mass commuting
facilities, and water pollution control facilities). Without further
approval from the Board, Company may underwrite or deal in only
these types of industrial development bonds.
by the Board or by the Federal Reserve Bank of
Boston, pursuant to delegated authority.
By order of the Board of Governors, effective August 8, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
Associate Secretary of the Board
Bank of New England Corporation
Boston, Massachusetts
Order Approving Application to Engage in
Combined Investment Advisory and Securities
Brokerage Activities
Bank of New England Corporation, Boston, Massachusetts ("BNEC"), 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 and section 225.21(a) of the Board's Regulation Y, 12 C.F.R. § 225.21(a), to expand the authority of its wholly owned subsidiary, New England
Discount Brokerage, Inc. ( " N E D B " ) , to include the
activities of providing investment advisory and research services 1 to "institutional" and retail
customers. 2 NEDB presently engages in securities
brokerage services throughout the United States pursuant to section 225.25(b)(15) of Regulation Y,
12 C.F.R. § 225.25(b)(15), and now proposes to combine investment advice with its brokerage services
1. NEDB will furnish general economic information and advice,
general economic statistical forecasting services and industry studies
to its customers. NEDB will also provide these services to its affiliates
as permissible servicing activities under section 225.22 of the Board's
Regulation Y, 12 C.F.R. § 225.22.
2. An Institutional Customer is defined by Applicant to include:
(1) a bank (acting in an individual or fiduciary capacity); a savings
and loan association; an insurance company; a registered investment company under the 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 $1,000,000 or
whose investment decisions are made by a bank, insurance company or investment adviser registered under the Investment Advisers 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 $1,000,000;
(4) a broker-dealer or option trader registered under the Securities
Exchange Act of 1934, or other securities professionals; or
(5) an entity all of the equity owners of which are Institutional
Customers.
The term "retail customer" means any customer that does not meet
the definition of an "institutional customer".
Legal Developments
("full-service brokerage") for institutional and retail
customers.
Applicant, with total consolidated assets of $28.8
billion, is the 19th largest commercial banking organization in the nation. 3 It operates ten subsidiary banks,
seven in Massachusetts and one each in Connecticut,
Maine, and Rhode Island, and engages directly and
through other subsidiaries in various nonbanking activities.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been duly published (52 Federal Register
44,934 (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.
I. Background
The Board has previously determined that the combined offering of investment advice with securities
execution services to institutional customers from the
same bank holding company subsidiary is closely
related and a proper incident to banking under section
4(c)(8) of the BHC Act and does not violate the GlassSteagall Act. National Westminster Bank PLC, et al.,
72
FEDERAL
("NatWest");4
FEDERAL
Morgan");
RESERVE
BULLETIN
584
(1986)
J.P. Morgan and Company, Inc., 73
RESERVE
BULLETIN
Manufacturers
810
(1987)
("/.P.
Hanover Corporation, 73
FEDERAL RESERVE BULLETIN 930 (1987) ( " M a n u f a c -
turers Hanover"). The principal difference between
the NatWest application and this proposal is the provision of such combined services to retail as well as
institutional customers.
Under this proposal, NEDB will not act as principal
or take a position (i.e., bear the financial risk) in any
securities it brokers or recommends. In line with
NatWest, Applicant has committed that NEDB will
hold itself out as a separate and distinct corporation
with its own properties, assets, liabilities, capital,
books and records. 5 To further ensure the separation
of NEDB and its bank affiliates and to avoid potential
conflicts of interests, no officer, director, or employee
of any bank affiliate of NEDB will serve at the same
3. Banking data are as of March 31, 1988.
4. Affirmed sub nom., Securities Industry Ass'n v. Board of Governors, 821 F.2d 810 (D.C. Cir. 1987), cert, denied, 108 S. Ct. 697 (1988).
5. All of NEDB's notices, advice, confirmations, correspondence
and other documentation will clearly indicate NEDB's separate identity in order to avoid any confusion between NEDB and its bank
affiliates. NEDB also will specify in all customer agreements that
NEDB is solely responsible for its contractual obligations and commitments.
701
time as an officer, director, or employee of NEDB.
NEDB will offer investment advice, as well as provide
securities execution services, to institutional and retail
customers on an integrated basis, i.e., NEDB will not
charge an explicit fee for the investment advice and
will receive fees only for transactions executed for
customers. Applicant has also made certain additional
commitments paralleling those in previous orders
which tend to mitigate potential conflicts of interests. 6
To address the potential for conflicts of interests
that might arise in the extension of the full-service
brokerage activity to retail customers, Applicant has
committed that, before providing any brokerage or
advisory services to retail customers, NEDB will
prominently disclose in writing to each of such customers that NEDB is not a bank and is separate from
any affiliated bank, and that the securities sold, offered, or recommended by NEDB are not deposits, are
not insured by the FDIC, are not guaranteed by an
affiliated bank, and are not otherwise an obligation of
an affiliated bank, unless such is in fact the case.
BNEC has also stated that NEDB will not recommend, purchase, or sell for its customers any security
being underwritten by an affiliate or in which an
affiliate makes a market. 7 NEDB will provide discretionary investment management for institutional customers only, under the same terms and conditions as
previously approved by the Board in its J.P. Morgan
Order. Such discretionary investment management
services will not be provided for retail customers.
Finally, no affiliated bank will engage in advertising for
NEDB stating or suggesting that an affiliated bank is
responsible in any way for NEDB's obligations or
enter into any agreement so stating or suggesting.
6. For example, NEDB will not transmit advisory research or
recommendations to the commercial lending department of any bank
affiliate. In addition, NEDB will provide notice to its customers that
an affiliated bank may be a lender to an issuer of securities. NEDB
proposes to share customer lists with affiliates, as previously approved in the Board's Manufacturers Hanover Order. In order to
guard against potential adverse effects arising from the exchange of
such lists, Applicant has committed that: NEDB will use customer
lists for general advertising purposes only, such as mass mailings;
customers of its affiliates will not be individually solicited; and that
such lists will not indicate whether the customers are depositors or
borrowers of affiliated banks or include any information regarding
extensions of credit by any affiliate. Moreover, NEDB and its affiliates
will not share any other confidential information concerning their
respective customers.
7. NEDB may, however, recommend, purchase, or sell for its
customers corporate stock or commercial paper issued by Applicant
or its affiliates to fund their activities in accordance with the appropriate Board and securities regulations regarding the conduct of such
funding activities. See, e.g., 12 C.F.R. § 250.221.
702
Federal Reserve Bulletin • October 1988
II. Glass-Steagall Act
Considerations
As noted, the Board in NatWest and subsequent cases
concluded that the combined offering of investment
advisory and securities execution services to institutional customers by bank holding company subsidiaries did not violate the Glass-Steagall Act and was
consistent with the intent of that Act. The Board does
not believe that the expansion of this activity to retail
customers alters that determination. The relevant
Glass-Steagall Act provisions make no distinction
between brokerage activities based on whether the
customer is an institutional or a retail customer. Accordingly, for the reasons noted in the Board's NatWest Order and in light of the current record, the
Board concludes that the combination of investment
advice and execution services proposed here does not
constitute a "public sale" of securities for purposes of
section 20 or 32 of the Glass-Steagall Act and that the
proposal is consistent with the terms and intent of that
Act.
to the proposed activity as to require their provision in
a specialized form. 8
In the NatWest Order, the Board determined that
the provision of combined investment advisory and
securities execution services to institutional customers
by the same subsidiary was closely related to
banking. 9 The extension of these services to retail
customers does not alter the functional nature of the
activity. In this regard, the Board notes that banks
have traditionally provided, in conjunction with affiliates, both investment advice and securities execution
services on behalf of trust customers, in a manner that
closely resembles full-service brokerage activities. 10
In addition, the Board notes that the Office of the
Comptroller of the Currency has authorized national
banks and their subsidiaries to offer combined investment advisory and securities brokerage services for
retail customers. 11
On the basis of these considerations, the Board
concludes that the proposed activity is closely related
to banking.
III. Bank Holding Company Act Factors
B. The Proper Incident to Banking Analysis
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.
12 U.S.C. § 1843(c)(8). For the reasons set forth below, the Board believes that the expansion of fullservice brokerage services to retail customers does
not alter the underlying rationale of the Board's
decision in NatWest that such combined activities
are closely related to banking and a proper incident
thereto, particularly in light of the additional commitments made by Applicant regarding the provision
of the combined services to retail customers.
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
provision of full-service brokerage activities to retail
customers would produce the type of 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
8. Nat'l Courier Ass'n v. Board of Governors, 516 F.2d 1229, 1237
(D.C. Cir. 1975). 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 Ass'n v. Board of
Governors, 104 S. Ct. 3003, 3005-06 n.5 (1984).
9. The Board preferred two distinct grounds for its determination.
The Board concluded that banks generally provide services that are so
functionally similar to the proposed activity as to equip bank holding
companies particularly well to provide the proposed activity. Independently, the Board also found that the combined services were
closely related to banking on the basis that the functional nature and
scope of two previously approved activities—investment advice and
discount brokerage—would not be altered when the activities were
combined.
10. The Board notes that NEDB expects to rely primarily on
research provided by third parties in serving its customers. NEDB
expects that much of this research will be available from the trust
departments of its affiliated banks.
11. OCC Interpretive Letter No. 386 (June 19, 1987), reprinted in
[Current] Fed. Banking L. Rep. (CCH)/85,610, at 77,932.
Legal Developments
mentioned in the BHC Act, such as conflicts of interests or unsafe or unsound banking practices, or the
"subtle hazards" that the Supreme Court has stated
the Glass-Steagall Act was designed to prevent, such
as damage to the reputation of the bank or the
"churning" of brokerage accounts, that would outweigh any public benefits associated with the proposal.
1. Public Benefits
NEDB will enter the full-service brokerage market as
a de novo competitor, which may be expected to result
in increased competition. Moreover, the ability to
offer and to obtain the combined brokerage and investment advisory services at the same location would
result in increased efficiencies for NEDB as well as
increased convenience for institutional and retail customers.
2. Potential Adverse
Effects
The activity proposed here is substantially similar to
that approved by the Board in the Nat West 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
securities execution services. Moreover, Applicant
has made additional commitments, outlined above,
that are designed to address the potential for conflicts
of interests and other adverse effects that may result
from the provision of the combined services to retail
customers. As discussed below, subject to these commitments and conditions, the Board has determined
that the provision of full-service brokerage to both
institutional and retail customers is a proper incident
to banking.
It does not appear likely that the provision of
full-service brokerage services to institutional and
retail customers will lead NEDB to churn its accounts
or recommend unsuitable investments for its clients,
substantially for the reasons already outlined in the
Board's NatWest, J.P. Morgan, and Manufacturers
Hanover Orders. The record reflects the fact that
NEDB, as a registered broker-dealer, must abide by
the antifraud provisions of the Securities Exchange
Act of 1934, as well as the general antifraud provisions
in Securities and Exchange Commission Regula
703
tions. 12 Moreover, as in prior orders regarding the
conduct of these activities, the Board conditions its
approval of the proposal on NEDB's observance of
the same standards of care and conduct applicable to
fiduciaries that are imposed on investment advisers
pursuant to section 225.25(b)(4) of Regulation Y.
The Board also notes that Applicant has made
commitments which tend to mitigate the potential for
conflicts of interests. NEDB will not provide investment advice to its brokerage customers with respect to
shares of any investment company for which BNEC or
any of its affiliates serves as investment adviser.
NEDB will also provide a general disclosure statement
to its customers, which will point out that an affiliated
bank may be a lender to an issuer of securities. As
noted above, BNEC has stated that NEDB will not
recommend, purchase, or sell for its customers any
security being underwritten by an affiliate or in which
it makes a market. 13 Finally, NEDB will not have any
discretion over the investments of its retail customers,
acting solely to execute the specific buy and sell orders
of such customers.
The Board does not believe that unsound banking
practices would result from this proposal. The mere
expansion of the customer base for full-service brokerage activities should not create any greater likelihood
of affiliated banks failing to provide impartial credit or
shoring-up failing securities affiliates. Furthermore,
the Board believes that Applicant's extensive pretransaction disclosure commitments regarding the separation of NEDB from its banking affiliates should be
sufficient to prevent any potential damage to affiliated
banks' reputations arising from the extension of fullservice brokerage services to retail customers. 14 In
sum, the Board believes that its determination in the
NatWest proposal that unsound banking practices
would not likely result from these combined activities
remains unaffected by the inclusion of retail customers
within the ambit of such activities.
12. 15 U.S.C. § 78k, and 17 C.F.R. § 240.15cl-2(a), respectively.
These provisions have been interpreted as prohibiting churning. See,
e.g., First Securities Corp., 40 S.E.C. 589, 591 (1961); Hecht v.
Harris, Upham & Co., 283 F. Supp. 417, 435 (N.D. Cal. 1968).
13. NEDB may, however, recommend, purchase or sell for its
customers corporate stock or commercial paper issued by Applicant
or its affiliates to fund their activities in accordance with the appropriate securities regulations and relevant Board interpretations regarding the conduct of such funding activities.
14. Applicant has indicated that affiliates may provide certain back
office services to NEDB, in accord with section 225.22 of the Board's
Regulation Y, 12 C.F.R. § 225.22. As these activities would be
purely administrative in nature, with no identifiable contact with
NEDB's retail customers, these activities would not increase the
likelihood of customer association of NEDB with its bank affiliates.
The provision of similar back office services to a full-service brokerage subsidiary was approved by the Board in its J.P. Morgan Order.
704
Federal Reserve Bulletin • October 1988
IV. 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. 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 compliance with the provisions and purposes of the BHC Act
and the Board's regulations and orders issued thereunder, or to prevent evasion thereof.
This proposal shall not be consummated later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of Boston,
pursuant to delegated authority.
By order of the Board of Governors, effective August 10, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
Associate Secretary of the Board
The Chase Manhattan Corporation
New York, New York
Order Approving Application to Engage in
Combined Investment Advisory and Securities
Brokerage Activities
The Chase Manhattan Corporation, New York, New
York, a bank holding company within the meaning of
the Bank Holding Company Act of 1956, as amended
(12 U.S.C. § 1841 et seq.) ("BHC Act"), 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 225.23
of the Board's Regulation Y (12 C.F.R. § 225.23) to
expand the authority of its wholly owned subsidiary,
Chase Manhattan Treasury Corporation, New York,
New York ("Company"), to include offering investment advice and securities brokerage activities on a
combined basis to institutional customers.
Applicant also proposes to engage through Company in providing portfolio investment advice and
research to institutional customers and affiliates and in
furnishing general economic information and financial
advice, general economic statistical forecasting services, and industry studies to institutional customers.
The Board has previously determined that these investment advisory activities are generally permissible
for bank holding companies. 1
Company has previously received Board authorization to underwrite and deal in commercial paper,
municipal revenue bonds, 1-4 family mortgage-related
securities and consumer-receivable-related securities
("ineligible securities"), as long as Company is not
principally engaged in such activities. 2
Applicant, with consolidated assets of $97.6 billion, 3
is the second largest commercial banking organization
in the nation. It operates seven subsidiary banks and
engages in a broad range of permissible nonbanking
activities in the United States and abroad.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been duly published (53 Federal Register
5,833 (1988)). 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.
The Board has previously determined that the offering of a combination of investment advice and
securities execution services to institutional customers
through the same bank holding company subsidiary is
closely related and a proper incident to banking under
section 4(c)(8) of the BHC Act and does not violate the
Glass-Steagall Act. 4 Applicant has applied to conduct
its brokerage activities in accordance with the limitations approved by the Board in its prior decisions. 5
1. 12 C.F.R. §§ 225.25(b)(4)(iii) and (iv).
2. The Chase Manhattan Corporation, 73 FEDERAL RESERVE BULLETIN 607 (1987) (underwriting and dealing in municipal revenue
bonds and mortgage-related securities); Chemical New York Corporation/The Chase Manhattan Corporation, et al., 73 FEDERAL RESERVE BULLETIN 731 (1987) ( u n d e r w r i t i n g a n d d e a l i n g in c o n s u m e r -
receivable-related
securities);
Corporation,
FEDERAL
74
and
RESERVE
The
Chase
BULLETIN
Manhattan
391
(1988)
(underwriting and dealing in commercial paper).
3. Banking data are as of March 31, 1988.
4. National Westminster Bank PLC, et al., 72 FEDERAL RESERVE
BULLETIN 584 (1986) ("NatWest"), aff d sub nom., Securities Industry Ass'n v. Board of Governors, 821 F.2d 810 (D.C. Cir. 1987), cert,
denied, 108 S. Ct. 697 (1988); J.P. Morgan and Company, Inc., 73
FEDERAL RESERVE BULLETIN 8 1 0 ("J.P.
Morgan");
and
Manufacturers Hanover
Corporation,
11 FEDERAL RESERVE BULLETIN 9 3 0
(1987) ("Manufacturers Hanover").
5. Company will be maintained and will hold itself out to the public
as a separate and distinct corporate entity with its own properties,
assets, liabilities, books and records. It will conduct its business
independently from Applicant and its affiliates, and all of Company's
notices, advice, confirmations, correspondence and other documen-
Legal Developments
Applicant, however, proposes to expand the definition of institutional customer to include corporations,
partnerships, proprietorships, organizations, and institutional entities with net worths exceeding $1 million.6
In the Board's view, and for the reasons set forth
below, this modification does not alter the underlying
rationale of the Board's prior decisions that the combined activities are closely related to banking and a
proper incident thereto.
Applicant's definition of institutional customer differs from that approved in Manufacturers
Hanover
only in that the definition includes corporations, partnerships, proprietorships, organizations, and institutional entities with net worths exceeding $1 million.7
The Manufacturers Hanover Order approved a $1
million threshold for institutional customers, but limited the net worth test to natural persons. Entities
other than natural persons qualified as institutional
customers only if they fit within certain categories of
financial institutions or securities or investment companies.
In the Manufacturers Hanover Order, the Board's
objective in limiting the clients of the full service
brokerage affiliate to institutional customers was to
ensure that the customers of such affiliates would be
tation will clearly indicate the separate identity of Company in order
to avoid confusion with Applicant and other affiliates. Any "back
office" services provided by affiliates will be compensated for on an
arm's-length basis. Moreover, any research or investment advice
purchased from affiliates will also be compensated for on an arm'slength basis.
As previously approved in J.P. Morgan, Company proposes to
exercise discretionary portfolio management for institutional customers only within defined parameters and at the customer's request.
Applicant does not intend to market this service. If securities transactions on behalf of an institutional customer are executed with an
affiliate of Company, Company will disclose that fact to the customer
and obtain the customer's consent in writing prior to execution of the
transaction. Any such transactions will only be made on an arm'slength basis consistent with the applicable securities laws, rules, and
regulations.
6. An institutional customer is defined by Applicant to be:
(1) a bank (acting in an individual or fiduciary capacity); a savings
and loan association; an insurance company; a registered investment company under the Investment Company Act of 1940; or a
corporation, partnership, proprietorship, organization or institutional entity with net worth exceeding $1,000,000;
(2) an employee benefit plan with assets exceeding $1,000,000, 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 $1,000,000;
(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.
7. Applicant has substituted the above definition of "institutional
customer" for the Manufacturers Hanover category of corporations,
partnerships, proprietorships, organizations, or institutional entities
that regularly invest in the types of securities as to which investment
advice is given or that regularly engage in transactions in securities.
705
financially sophisticated and thus unlikely to place
undue reliance on investment advice received and
better able to detect investment advice motivated by
self-interest. Applicant's proposal would simply extend the $1 million net worth test to corporations,
partnerships and other organizations in addition to
natural persons. The Board believes that such entities
can be expected to possess a degree of financial
sophistication comparable to that of natural persons
with equivalent net worths and that such entities hence
would be as unlikely to place undue reliance on
investment advice received and would be as able to
detect investment advice motivated by self-interest.
As previously approved in Bankers Trust New York
Company,8 Company proposes to recommend or broker securities in which it has taken a principal's
position. As proposed in Bankers Trust, Company will
inform its customers upon commencement of a brokerage/advisory relationship that, as a general matter,
Company might be a principal with respect to securities as to which brokerage and related advisory services are being provided. In addition, whenever Company, acting as principal, sells a security from its
inventory to a customer, this fact will be disclosed to
the customer (usually orally) prior to the execution of
the trade and in the written confirmation thereof. 9
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the public benefits associated with 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 stated or incorporated by reference in this Order.
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 compliance with the provisions and purposes of
the BHC Act and the Board's regulations and orders
issued thereunder, or to prevent evasion thereof.
8. 74 FEDERAL RESERVE BULLETIN 695 (Order dated August 15,
1988) ("Bankers Trust").
9. Also as approved in Bankers Trust, Applicant proposes to engage
in cross-marketing to the extent that employees of Applicant and its
affiliates with responsibility for developing customer relations will
make customers aware of products offered by other affiliates. Such
cross-marketing activities would be subject to the restrictions imposed
on Applicant by the Board as a condition to its approval of Company's
ineligible securities underwriting and dealing activities.
706
Federal Reserve Bulletin • October 1988
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 New
York, pursuant to delegated authority.
By order of the Board of Governors, effective August 15, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, and Heller. Absent and not voting:
Governor Kelley.
JAMES M C A F E E
Associate Secretary of the Board
First Chicago Corporation
Chicago, Illinois
Order Conditionally Approving Application to
Underwrite and Deal in Certain Securities to a
Limited Extent
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.)
("BHC Act"), has applied for the Board's approval
under section 4(c)(8) of the BHC Act and section
225.21(a) of the Board's Regulation Y, 12 C.F.R.
§ 225.21(a), to engage through a wholly owned subsidiary, First Chicago Capital Markets, Inc., Chicago,
Illinois ("Company"), in underwriting and dealing in,
on a limited basis, the following securities:
(1) municipal revenue bonds, including certain industrial development bonds;
(2) 1-4 family mortgage-related securities;
(3) commercial paper; and
(4) consumer-receivable-related securities ("CRRs")
(collectively "ineligible securities").
Applicant proposes to conduct Company's underwriting and dealing activity in these securities in the
same manner as previously approved by the Board
except that Company would limit its gross revenues
from these activities to no more than 10 percent of
Company's gross revenues. 1 However, Applicant also
states that should the Board not approve its request for
10 percent, a 5 percent level would be acceptable.
Applicant also proposes to underwrite and deal in
securities that state member banks are permitted to
1. See, e.g., Citicorp, J.P. Morgan & Co. Incorporated and
Bankers Trust New York Corporation, 73 FEDERAL RESERVE BULLETIN 473 (1987) and Chemical New York Corporation, The Chase
Manhattan Corporation, Bankers Trust New York Corporation, Citicorp, Manufacturers Hanover Corporation and Security Pacific Corporation,
7 3 FEDERAL RESERVE BULLETIN 7 3 1 ( 1 9 8 7 ) .
underwrite and deal in under section 16 of the Banking
Act of 1933 (the "Glass-Steagall Act") (12 U.S.C.
§§ 24 Seventh and 335) (hereinafter "bank-eligible
securities"), as permitted by section 225.25(b)(16) of
Regulation Y (12 C.F.R. § 225.25(b)(16)).
Applicant, with consolidated assets of $44.4 billion,
is the eleventh largest banking organization in the
nation. It operates 14 subsidiary banks and engages in
a broad range of permissible nonbanking activities in
the United States. 2
Notice of the application, affording interested parties an opportunity to submit comments, has been duly
published (53 Federal Register 2,782 (1988)). 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.
The Board has previously determined that underwriting and dealing in bank-eligible securities is closely
related to banking under section 4(c)(8) of the BHC
Act. 12 C.F.R. § 225.25(b)(16). In addition, the
Board concludes that Company's performance of this
activity may reasonably be expected to result in public
benefits which would outweigh adverse effects under
the proper incident to banking standard of section
4(c)(8) of the BHC Act. Accordingly, Applicant may
engage through Company in underwriting and dealing
in bank-eligible securities to the extent that state
member banks are authorized by section 16 of the
Glass-Steagall Act.
On April 30, 1987, the Board approved applications
by Citicorp, J.P. Morgan and Bankers Trust to underwrite and deal in, through their bank-eligible securities
underwriting subsidiaries, 1-4 family mortgagebacked securities, municipal revenue bonds (and certain industrial development bonds) and (except for
Citicorp) commercial paper. 3 The Board concluded
that the underwriting subsidiaries would not be "engaged principally" in underwriting or dealing in securities within the meaning of section 20 of the GlassSteagall Act 4 provided they derived no more than
5 percent of their total gross revenues from underwriting and dealing in the approved securities over any
two-year period and their underwriting and dealing
activities did not exceed 5 percent of the market for
2. Asset and banking data are as of June 30, 1988. Ranking is as of
March 31, 1988.
3. CiticorplMorganlBankers Trust, supra. The Board subsequently
approved similar applications by a number of other bank holding
companies.
4. Section 20 of the Glass-Steagall Act (12 U.S.C. § 377) prohibits
the affiliation of a member bank with "any corporation . . . engaged
principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through syndicate participation of
stocks, bonds, debentures, notes, or other securities . . . . "
Legal Developments
each particular type of security involved. 5 The Board
further found that, subject to the prudential framework
of limitations established in those cases to address the
potential for conflicts of interest, unsound banking
practices or other adverse effects, the proposed underwriting and dealing activities were so closely related to
banking as to be a proper incident thereto within the
meaning of section 4(c)(8) of the BHC Act. On July 14,
1987, the Board subsequently decided that underwriting and dealing in CRRs is so closely related to
banking as to be a proper incident thereto within the
meaning of section 4(c)(8) of the BHC Act. 6
In its original decision, the Board stated that the 5
percent gross revenue threshold represents a conservative approach to measuring the level of ineligible
underwriting and dealing and that it would review this
determination after the applicants had gained experience in operating their underwriting subsidiaries, to
determine whether the 5 percent level should be
increased up to a maximum level of 10 percent. On
February 8, 1988, the United States Court of Appeals
for the Second Circuit upheld the Board's determination regarding the above revenue limitation and, on
June 13, the U.S. Supreme Court declined to review
that decision. 7 The underwriting subsidiaries have
only recently commenced operations following the
Supreme Court's decision.
Applicant has requested a 10 percent limitation as a
basis for making a not-principally-engaged determination, suggesting that a higher threshold of activity
would enhance Company's ability to provide services
to its customers, thereby increasing the public benefits
stemming from the proposal. However, the Board has
previously stated that it would be desirable to obtain
experience in the operation of securities affiliates at
the conservative level of 5 percent for a period of time,
and accordingly the Board has determined to maintain
the underwriting level at 5 percent. As stated in these
cases, however, the Board will review this decision
within one year from the effective date of its initial
707
Section 20 decisions to assess whether higher levels
should be established. 8
For the reasons set forth in the Board's Citicorp/
Morgan/Bankers Trust and Chemical Orders, the
Board concludes that Applicant's proposal to engage
through Company in underwriting and dealing in municipal revenue bonds, 9 1-4 family mortgage-related
securities, commercial paper and consumer-receivable-related securities would not result in a violation of
section 20 of the Glass-Steagall Act and is closely
related and a proper incident to banking within the
meaning of section 4(c)(8) of the BHC Act provided
Applicant limit Company's activities as provided in
those Orders, except with regard to the market share
limitation.
Accordingly, the Board has determined to approve
the underwriting application subject to all of the terms
and conditions established in the Citicorp!Morgan!
Bankers Trust and Chemical Orders, except as provided above. The Board hereby adopts and incorporates herein by reference the reasoning and analysis
contained in those Orders.
The Board's approval of this application extends
only to activities conducted within the limitations of
section 225.25(b)(16) of the Board's Regulation Y and
the Citicorp!Morgan!Bankers
Trust, Chemical and
Bankers Trust Orders as modified above, including the
Board's reservation of authority to establish additional
limitations to ensure that the subsidiary's activities are
consistent with safety and soundness, conflicts of
interests and other relevant considerations under the
BHC Act. Underwriting and dealing in the approved
securities in any manner other than as approved in
those Orders and above 10 is not within the scope of the
Board's approval and is not authorized for Company.
8. Applicant has also proposed to privately place ineligible securities as agent as an incident to its underwriting and dealing activities.
The Board has previously determined that private placement as agent
does not fall within the terms of the Glass-Steagall Act if those
activities are carried out within the prudential framework of limitations set forth by the Board in Bankers Trust New York Corporation.
7 3 FEDERAL RESERVE BULLETIN 138 ( 1 9 8 7 ) . A p p l i c a n t h a s c o m m i t t e d
5. In this regard, the Board notes that the U.S. Court of Appeals for
the Second Circuit has upheld the Board's determination that the
underwriting subsidiaries would not be engaged principally in ineligible securities underwriting and dealing under the above revenue
limitation and the U.S. Supreme Court has declined to review that
decision. Securities Industry Association v. Board of Governors of the
Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 108
S. Ct. 697 (1988) ( " S M v. Board'). The Supreme Court also let stand
the lower court's determination that the 5 percent market share
limitation was not adequately supported by the facts of record.
Accordingly, the Board has determined not to impose a market share
limitation in this case.
6. Chemical, supra.
7. SIA V. Board, supra.
to the Bankers Trust limitations.
9. The industrial development bonds approved in those applications
and for Applicant in this case are only those tax exempt bonds in
which the governmental issuer, or the governmental unit on behalf of
which the bonds are issued, is the owner for federal income tax
purposes of the financed facility (such as airports, mass commuting
facilities, and water pollution control facilities). Without further
approval from the Board, Company may underwrite or deal in only
these types of industrial development bonds.
10. Company may also provide services that are necessary incidents
to these approved activities. The incidental services should be taken
into account in computing the gross revenue and market share limits
on the underwriting subsidiaries' ineligible underwriting and dealing
activities, to the extent such limits apply to particular incidental
activities.
708
Federal Reserve Bulletin • October 1988
The Board's determination is 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 compliance 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
Chicago, pursuant to delegated authority.
By order of the Board of Governors, effective August 4, 1988.
Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, and Heller. Absent and not voting:
Chairman Greenspan and Governor Kelley.
JAMES M C A F E E
Associate Secretary of the Board
Order Issued Under Sections 3 and 4 of the
Bank Holding Company
Act
First Chicago Corporation
Chicago, Illinois
Order Approving Acquisition of a Bank Holding
Company
First Chicago Corporation, Chicago, Illinois ("First
Chicago"), a bank holding company within the meaning of the Bank Holding Company Act (12 U.S.C.
§ 1841 et seq.) ("BHC Act"), has applied for the
Board's approval under section 3 of the BHC Act
(12 U.S.C. § 1842) to acquire Gary-Wheaton Corporation, Wheaton, Illinois ("Gary-Wheaton"), and
thereby indirectly to acquire its subsidiary banks:
Gary-Wheaton Bank, Wheaton, Illinois; GaryWheaton Bank of Batavia, Batavia, Illinois; GaryWheaton Bank of Downers Grove, Downers Grove,
Illinois; and Gary-Wheaton Bank of Fox Valley, Aurora, Illinois. 1 Applicant has also applied for the
Board's approval pursuant to section 4(c)(8) of the
BHC Act (12 U.S.C. § 1843(c)(8)) to acquire GaryWheaton Stock Brokerage, Inc., Wheaton, Illinois,
and G-W Life Insurance Company, Wheaton, Illinois,
1. Alternatively, in the event that an entity other than First Chicago
gains control of Gary-Wheaton, First Chicago has proposed to acquire
an option to purchase up to 25 percent of the voting shares of
Gary-Wheaton.
and thereby engage in discount brokerage activities
and credit life reinsurance activities. 2 These activities
are authorized for bank holding companies pursuant to
sections 225.25(b)(15) and 225.25(b)(8)(ii), respectively, of the Board's Regulation Y.
Notice of the applications, affording interested persons an opportunity to submit comments, has been
published (53 Federal Register 15,879 (1988)). 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 BHC Act.
First Chicago, with approximately $15.8 billion in
domestic deposits, is the largest commercial banking
organization in Illinois, controlling approximately 14.7
percent of deposits in commercial banking organizations in Illinois. 3 Gary-Wheaton is the 21st largest
commercial banking organization in Illinois, with deposits of approximately $728.0 million, controlling
approximately 0.7 percent of total deposits in commercial banking organizations in Illinois. Upon consummation of this proposal, First Chicago would remain
the largest commercial banking organization in Illinois, controlling deposits in Illinois of approximately
$16.5 billion, representing approximately 15.4 percent
of total deposits in commercial banking organizations
in the state. Consummation of the proposal would not
have a significant adverse effect on the concentration
of banking resources in Illinois.
First Chicago competes directly with Gary-Wheaton
in the Chicago and Aurora banking markets.
In the Chicago banking market, 4 First Chicago is the
largest of 257 commercial banking organizations, controlling deposits of $15.7 billion, representing 22.5
percent of the total deposits in commercial banking
organizations in the market. Gary-Wheaton is the 16th
largest commercial banking organization in the banking market, controlling deposits of $626.0 million,
representing 0.9 percent of the total deposits in commercial banking organizations in the market. Upon
consummation of this proposal, First Chicago would
control deposits of $16.3 billion, representing 23.4
percent of the total deposits in commercial banks in
the market. The Chicago banking market is considered
unconcentrated, with a Herfindahl-Hirschman Index
("HHI") of 801. Upon consummation, the HHI would
2. In connection with these applications, First Chicago Acquisition
II Corp., Chicago, Illinois ("Acquisition Corp."), has applied to
become a bank holding company through the merger of Gary-Wheaton
with and into Acquisition Corp. Acquisition Corp. also has applied to
acquire Gary-Wheaton Stock Brokerage, Inc. and G-W Life Insurance
Company.
3. Data are as of June 30, 1987.
4. The Chicago banking market is approximated by Cook, Lake and
DuPage counties in Illinois.
Legal Developments
increase by 40 points to 841.5 The four-firm concentration ratio for the market would increase from 49
percent to 50 percent. Based on the facts of record, the
Board concludes that consummation of the proposal
would not have a substantial adverse effect on competition in the Chicago banking market.
In the Aurora banking market, 6 First Chicago is the
7th largest of 19 commercial banking organizations,
controlling deposits of $66.3 million, representing 4.5
percent of the total deposits in commercial banking
organizations in the market. Gary-Wheaton is the 5th
largest commercial banking organization in the banking market, controlling deposits of $101.4 million,
representing 6.9 percent of the total deposits in commercial banking organizations in the market. Upon
consummation of this proposal, First Chicago would
control deposits of $167.7 million, representing 11.4
percent of the total deposits in commercial banking
organizations in the market. The Aurora banking market is moderately concentrated, with an HHI of 1063.
Upon consummation, the HHI would increase by 62
points to 1125. The four-firm concentration ratio for
the market would increase from 56.3 percent to 59.3
percent. Accordingly, the Board concludes that consummation of this proposal would not have a substantial adverse effect upon competition in the Aurora
banking market.
The financial and managerial resources of First
Chicago and Gary-Wheaton are consistent with approval. Convenience and needs considerations also
are consistent with approval.
5. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)) a market in which the
post-merger HHI is between 1000 and 1800 is considered moderately
concentrated. In such markets, the Department is likely to challenge
a merger that increases the HHI by more than 100 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 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 non-depository financial entities.
6. 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.
Legal Developments
709
As indicated earlier, First Chicago also has applied,
pursuant to section 4(c)(8), to acquire a discount
brokerage subsidiary and a credit life reinsurance
subsidiary of Gary-Wheaton. First Chicago currently
provides discount brokerage and credit related insurance services. The markets for these activities have
numerous competitors and are regional or national in
scope. Accordingly, the Board concludes that consummation of this proposal will 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 BHC Act is favorable and consistent with
approval of the applications to acquire Gary-Wheaton'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 GaryWheaton 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 Chicago, pursuant to delegated authority. The
determinations as to First Chicago'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 BHC Act and the Board's regulations and orders issued thereunder, or to prevent
evasion thereof.
By order of the Board of Governors, effective August 1, 1988.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
Associate Secretary of the Board
continued on next page.
710 Federal Reserve Bulletin • October 1988
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By the Secretary of the Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon
request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
Section 3
Applicant
FirstBank Holding Company of
Colorado,
Lake wood, Colorado
Bank(s)
First Bank of Green Mountain, N.A.,
Lakewood, Colorado
FirstBank at Arapahoe/Holly, N.A.,
Arapahoe County, Colorado
Effective
date
August 10, 1988
Section 4
. . .
Nonbanking
Activity/Company
First Wachovia Corporation,
Winston Salem, North Carolina
First Union Corporation,
Charlotte, North Carolina
CB&T Bancshares, Inc.,
Columbus, Georgia
Barnett Banks, Inc.,
Jacksonville, Florida
Sun Trust Banks, Inc.,
Atlanta, Georgia
Citizens and Southern Corporation,
Atlanta, Georgia
Bank South Corporation,
Atlanta, Georgia
Norwest Corporation,
Minneapolis, Minnesota
to engage in management consulting to
depository institutions
August 29, 1988
Underwriting Specialists,
Minneapolis, Minnesota
August 12, 1988
Effective
date
Legal Developments
711
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Section 3
Applicant
Ameribanc, Inc.,
St. Joseph, Missouri
ANB Corporation,
Muncie, Indiana
Bancshares of Dyer, Inc.,
Dyer, Tennessee
Bankshares Corporation of
Niceville,
Niceville, Florida
BBOK Bancshares, Inc.,
Wichita, Kansas
BSB Bancorp, Inc.,
Wilmington, Delaware
Capital Bancshares, Inc.,
Brookfield, Missouri
Central West Bancorporation,
Casey, Iowa
Citizens Bancorp,
Riverdale, Maryland
Citizens State Bancorp, Inc.,
New Baltimore, Michigan
Clyde Financial Corporation,
Clyde, Texas
Commerce Bancorp, Inc.,
Cherry Hill, New Jersey
Commex Financial Corporation,
Kennesaw, Georgia
Commonwealth Bankshares, Inc.,
Norfolk, Virginia
Comm. Bancorp, Inc.,
Forest City, Pennsylvania
Community Bank System, Inc.,
Dewitt, New York
Delaware Bancshares, Inc.,
Walton, New York
Bank(s)
First Financial Bank of St.
Charles County,
Lake St. Louis, Missouri
The Saratoga State Bank,
Saratoga, Indiana
Bank of Dyer,
Dyer, Tennessee
Peoples National Bank of
Niceville,
Niceville, Florida
Bankers' Bank of Kansas, N.A.,
Wichita, Kansas
Binghamton Savings Bank,
Binghamton, New York
Caldwell County Bank,
Hamilton, Missouri
Security State Bank,
Casey, Iowa
McLachlen Bancshares
Corporation,
Washington, D.C.
Citizens State Savings Bank,
New Baltimore, Michigan
The Peoples State Bank,
Clyde, Texas
Commerce Bank/Harrisburg,
Camp Hill, Pennsylvania
Commercial Exchange Bank,
Kennesaw, Georgia
Bank of the Commonwealth,
Norfolk, Virginia
The First National Bank of
Nicholson,
Nicholson, Pennsylvania
ComuniCorp, Inc.,
Addison, New York
The National Bank of Delaware
County, Walton,
Walton, New York
Reserve
Bank
Effective
date
Kansas City
August 12, 1988
Chicago
July 21, 1988
St. Louis
August 2, 1988
Atlanta
August 9, 1988
Kansas City
August 3, 1988
New York
August 5, 1988
Kansas City
July 29, 1988
Chicago
August 3, 1988
Richmond
July 26, 1988
Chicago
August 4, 1988
Dallas
July 22, 1988
Philadelphia
August 12, 1988
Atlanta
August 18, 1988
Richmond
July 21, 1988
Philadelphia
July 22, 1988
New York
August 24, 1988
New York
July 22, 1988
712
Federal Reserve Bulletin • October 1988
Section 3—Continued
Applicant
Eastern Bancshares, Inc.,
Romney, West Virginia
Eufaula BancCorp, Inc.,
Eufaula, Alabama
Fifth Third Bancorp,
Cincinnati, Ohio
FIRST MIDWEST BANCORP,
INC.,
Naperville, Illinois
First American Bancshares of
Blooming Prairie, Inc.,
Blooming Prairie, Minnesota
First Virginia Banks, Inc.,
Falls Church, Virginia
First Wisconsin Corporation,
Milwaukee, Wisconsin
Fourth Financial Corporation,
Wichita, Kansas
IV Corporate Woods Acquisition,
Inc.,
Wichita, Kansas
Grand Bank Financial
Corporation,
Grand Rapids, Michigan
Greenwood National
Bancorporation,
Greenwood, South Carolina
Havana Bancshares, Inc.,
Springfield, Illinois
Heritage Bancorp, Inc.,
Northampton, Massachusetts
Hickman Corporation,
Hickman, Nebraska
Illini Community Bancorp, Inc.,
Springfield, Illinois
Indiana National Corporation,
Indianapolis, Indiana
Jackson County Bancorp, Inc.,
Gainesboro, Tennessee
Johnson Heritage Bancorp, Ltd.,
Racine, Wisconsin
Kansas Banc Corporation,
Kansas, Illinois
Bank(s)
The First National Bank of
Romney,
Romney, West Virginia
Eufaula Bank & Trust Company,
Eufaula, Alabama
Decatur Bancshares, Inc.,
Greensburg, Indiana
Continental Illinois Bank of
Deerfield, National
Association,
Deerfield, Illinois
Continental Bank of Buffalo
Grove, N.A.,
Buffalo Grove, Illinois
First American Bank of Blooming
Prairie,
Blooming Prairie, Minnesota
Monroe Bancshares, Inc.,
Madisonville, Tennessee
Century Bancorp, Inc.,
Circle Pines, Minnesota
Corporate Bankshares, Inc.,
Overland Park, Kansas
Reserve
Bank
Effective
date
Richmond
July 22, 1988
Atlanta
August 2, 1988
Cleveland
July 27, 1988
Chicago
July 20, 1988
Minneapolis
July 21, 1988
Richmond
July 29, 1988
Chicago
August 11, 1988
Kansas City
July 29, 1988
Grand Bank,
Grand Rapids, Michigan
Chicago
August 4, 1988
Greenwood National Bank,
Greenwood, South Carolina
Richmond
August 23, 1988
State Bank of Havana,
Havana, Illinois
Heritage-NIS Bank for Savings,
Northampton, Massachusetts
First State Bank,
Hickman, Nebraska
SBV Bancshares, Inc.,
Virden, Illinois
Morgan County Bancorp,
Mooresville, Indiana
Jackson County Bank,
Gainesboro, Tennessee
Community National Bank,
Mukwonago, Wisconsin
Kansas State Bank,
Kansas, Illinois
Chicago
August 1, 1988
Boston
August 12, 1988
Kansas City
August 19, 1988
Chicago
August 18, 1988
Chicago
August 8, 1988
Atlanta
August 1, 1988
Chicago
August 18, 1988
Chicago
August 2, 1988
Legal Developments
713
Section 3—Continued
Applicant
Kentucky Bancorporation, Inc.,
Covington, Kentucky
Key Bancshares of Idaho, Inc.,
Boise, Idaho
KeyCorp,
Albany, New York
Lexington Bancshares, Inc.,
Lexington, Kentucky
Magna Group, Inc.,
Belleville, Illinois
Mascoutah Acquisition Company,
Wilmington, Delaware
Mark Twain Bancshares, Inc.,
St. Louis, Missouri
Marshall & Ilsley Corporation,
Milwaukee, Wisconsin
Mercantile Bancorp, Inc.,
Quincy, Illinois
Mercantile Capital Corp.,
Boston, Massachusetts
National Penn Bancshares, Inc.,
Boyertown, Pennsylvania
NBB Bancorp, Inc.,
New Bedford, Massachusetts
North Adams Bancshares, Inc.,
Ursa, Illinois
ONB Corporation,
Clifton Springs, New York
Ostrander Bancshares, Inc.,
Ostrander, Minnesota
Peoples, Inc.,
Ottawa, Kansas
Provident Bankshares
Corporation,
Baltimore, Maryland
Richwood Bancshares, Inc.,
Rich wood, Ohio
Bank(s)
The First National Bank of
Georgetown,
Georgetown, Ohio
IB&T CORP.,
Boise, Idaho
Reserve
Bank
Effective
date
Cleveland
August 12, 1988
New York
August 19, 1988
The Fayette Banking Company,
Lexington, Kentucky
First Bancorp of Mascoutah,
Ltd.,
Mascoutah, Illinois
Cleveland
August 10, 1988
St. Louis
August 19, 1988
Bancenter One Group, Inc.,
Chesterfield, Missouri
GREATER MILWAUKEE
FINANCIAL CORP.,
Milwaukee, Wisconsin
HARTLAND BANCORP., INC.,
Hartland, Wisconsin
VILLAGE BANC HOLDING
CO., INC.,
Elm Grove, Wisconsin
Security State Bank of Hamilton,
Hamilton, Illinois
Mercantile Bank and Trust
Company,
Boston, Massachusetts
First Capital Bank,
York, Pennsylvania
New Bedford Institution for
Savings,
New Bedford, Massachusetts
B.W. Bancshares, Inc.,
Warrensburg, Illinois
The Ontario National Bank of
Clifton Springs,
Clifton Springs, New York
Ostrander State Bank,
Ostrander, Minnesota
Peoples Savings, Inc.,
Ottawa, Kansas
First Security Bank of Maryland,
Baltimore, Maryland
St. Louis
August 10, 1988
Chicago
July 22, 1988
St. Louis
July 25, 1988
Boston
August 15, 1988
Philadelphia
July 29, 1988
Boston
August 18, 1988
St. Louis
August 19, 1988
New York
August 24, 1988
Minneapolis
July 21, 1988
Kansas City
August 12, 1988
Richmond
August 4, 1988
Cleveland
August 18, 1988
The Richwood Banking
Company,
Richwood, Ohio
714
Federal Reserve Bulletin • October 1988
Section 3—Continued
Applicant
Salin Bancshares of North
Central Indiana, Inc.,
Indianapolis, Indiana
Shelby County Bancorp, Inc.,
Shelbyville, Illinois
Sooner Southwest Bankshares,
Inc.,
Bristow, Oklahoma
Southeastern Bancorp, Inc.,
Greeleyville, South Carolina
The One Bancorp,
Portland, Maine
The Weld State Company,
Ft. Lupton, Colorado
TraCorp, Inc.,
Tullahoma, Tennessee
Warren Bancorp, Inc.,
Peabody, Massachusetts
Wathena Bancshares, Inc.,
Wathena, Kansas
Bank(s)
Reserve
Bank
Effective
date
Carroll Financial Corporation,
Burlington, Indiana
Chicago
July 29, 1988
Strasburg State Bank,
Strasburg, Illinois
Anadarko Bancshares, Inc.,
Bristow, Oklahoma
Chicago
July 27, 1988
Kansas City
August 12, 1988
Bank of Greeleyville,
Greeleyville, South Carolina
Southstate Bank for Savings,
Brockton, Massachusetts
Central Bank of Craig, N.A.,
Craig, Colorado
The Traders National Bank of
Tullahoma,
Tullahoma, Tennessee
Warren Five Cents Savings Bank,
Peabody, Massachusetts
Farmers State Bank,
Wathena, Kansas
Richmond
August 9, 1988
Boston
August 23, 1988
Kansas City
August 5, 1988
Atlanta
August 15, 1988
Boston
August 12, 1988
Kansas City
August 12, 1988
Section 4
Applicant
Delhi Bancshares, Inc.,
Traer, Iowa
First American Bank
Corporation,
Elk Grove Village, Illinois
First NH Banks, Inc.,
Manchester, New Hampshire
Westpac Banking Corporation,
Sydney, Australia
Nonbanking
Activity/Company
Manchester Insurance Service,
Manchester, Iowa
CFM, Inc.,
New Ulm, Minnesota
to engage in data processing
services
EG&G Financial Services, Inc.,
Wellesley, Massachusetts
to engage in bullion industry
financing
Reserve
Bank
Effective
date
Chicago
August 19, 1988
Chicago
August 5, 1988
Boston
August 16, 1988
New York
July 28, 1988
Sections 3 and 4
Applicant
Lena Spitzer Limited
Partnership,
Streeter, North Dakota
Old Kent Financial Corporation,
Grand Rapids, Michigan
Nonbanking
Activity/Company
Reserve
Bank
Effective
date
Streeter Insurance Agency, Inc.,
Streeter, North Dakota
Minneapolis
August 5, 1988
Unibancorp, Inc.,
Chicago, Illinois
Chicago
August 1, 1988
Legal Developments
715
APPLICATIONS APPROVED UNDER BANK MERGER ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Applicant
New Bank,
Madisonville, Tennessee
Richwood Interim Bank,
Rich wood, Ohio
United Jersey Bank,
Hackensack, New Jersey
Bank(s)
Bank of Madisonville,
Madisonville, Tennessee
The Richwood Banking
Company,
Richwood, Ohio
United Jersey Bank/Edgewater
National,
Englewood Cliffs, New Jersey
Reserve
Bank
Effective
date
Atlanta
July 29, 1988
Cleveland
August 18, 1988
New York
August 1, 1988
PENDING CASES INVOLVING THE BOARD OF GOVERNORS
This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of
Governors is not named a party.
Whitney v. United States, et al., No. CA3-88-1596-H
(N.D. Tex., filed July 7, 1988).
Credit Union National Association, Inc., et al., v.
Board of Governors, No. 88-1295 (D.D.C. May 13,
1988).
Bonilla v. Board of Governors, No. 88-1464 (7th Cir.,
filed March 11, 1988).
Cohen v. Board of Governors, No. 88-1061 (D.N.J.,
filed March 7, 1988).
Stoddard v. Board of Governors, No. 88-1148 (D.C.
Cir., filed Feb. 25, 1988).
Independent Insurance Agents of America, Inc. v.
Board of Governors, No. 87-1686 (D.C. Cir., filed
Nov. 19, 1987).
National Association of Casualty and Surety Agents,
et al., v. Board of Governors, Nos. 87-1644, 871801, 88-1001,
88-1206, 88-1245,
88-1270
(D.C. Cir., filed Nov. 4, Dec. 21, 1987, Jan. 4,
March 18, March 30, April 7, 1988).
Teichgraeber v. Board of Governors, No. 87-2505-0
(D. Kan., filed Oct. 16, 1987).
Northeast Bancorp v. Board of Governors, No. 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).
The Chase Manhattan Corporation v. Board of Governors, No. 87-1333 (D.C. Cir., filed July 20, 1987).
Lewis v. Board of Governors, Nos. 87-3455, 87-3545
(11th Cir., filed June 25, Aug. 3, 1987).
Securities Industry Association v. Board of Governors, et al., No. 87-1169 (D.C. Cir., filed April 17,
1987).
CBC, Inc. v. Board of Governors, No. 86-1001 (10th
Cir., filed Jan. 2, 1986).
Al
Financial and Business Statistics
WEEKLY REPORTING COMMERCIAL
CONTENTS
Domestic Financial Statistics
MONEY STOCK AND BANK CREDIT
A3 Reserves, money stock, liquid assets, and debt
measures
A4 Reserves of depository institutions, Reserve
Bank credit
A5 Reserves and borrowings—Depository
institutions
A6 Selected borrowings in immediately available
funds—Large member banks
POLICY
INSTRUMENTS
A7 Federal Reserve Bank interest rates
A8 Reserve requirements of depository institutions
A9 Federal Reserve open market transactions
FEDERAL RESERVE
BANKS
A10 Condition and Federal Reserve note statements
Al 1 Maturity distribution of loan and security
holdings
MONETARY AND CREDIT AGGREGATES
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
A19
A20
A21
A22
BANKS
Assets and liabilities
All reporting banks
Banks in New 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 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 New security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales
and asset position
A35 Corporate profits and their distribution
A36 Total nonfarm business expenditures on new
plant and equipment
88
Federal Reserve Bulletin • October 1988
A37 Domestic finance companies—Assets and
liabilities and business credit
REAL
ESTATE
A38 Mortgage markets
A39 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A40 Total outstanding and net change
A41 Terms
FLOW OF FUNDS
A42 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
Domestic Nonfinancial Statistics
SELECTED
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
A53
A54
A54
A54
A55 Foreign branches of U.S. banks—Balance
sheet data
A57 Selected U.S. liabilities to foreign official
institutions
Statistics
STATISTICS
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
REPORTED BY BANKS IN THE UNITED
STATES
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
BUSINESS
ENTERPRISES IN THE UNITED STATES
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES 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
Money Stock and Bank Credit
1.10
A3
RESERVES, MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES
Monetary and credit aggregates
(annua! rates of change, seasonally adjusted in percent) 1
Item
1987
Q3
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base
Concepts
5 Ml
6 M2
7 M3
8 L
9 Debt
Q4
Q1
1988
Q2R
Mar.
Apr.
May r
June'
July
3.8
8.0
-23.7
5.9
12.3
13.9
-13.0
11.4
-.2
-3.8
8.5
5.0
5.4
8.6
-4.8
6.2
12.0
9.7
5.2
10.1
.2
4.4
4.2
7.5
8.3
9.8
5.3
6.4
3.5
7.6
9.0
2.9
5.3
8.7
11.3R
9.8
7.2
11.4 R
8.6R
n.a.
n.a.
9.8R
5.4
9.3R
-2.6''
5.8
3.4
3.7
10.6
.9
14.5
6.5
15.1
11.7
6.6
8.1
12.9
6.2
20.5
9.6
8.6
25.5
3.0
10.7
9.0
1.7
.0
6.0
.0
2.9
5.3
8.4
11.1
n.a.
n.a.
institutions2
of money, liquid assets,
Nontransaction
y
1 0 In M2
11 In M3 only 6
1988
and
-.9
.3
.3
5.1
2.5
1.4
2.4
7.8
3.5
2.9
1.5
8.3
5.8
7.2
-6.5
7.6
.8
2.8
4.5
4.3
7.9
3.9
3.9
5.4
5.7
10.1
3.8
6.7
7.0
6.5
8.3
6.3
7.7
7.0
8.5
8.4
3.6
11.0
3.9
11.3
7.7
7.9
8.3
4.3
10.1
7.4
6.8
.7
14.8
10.5
6.3
13.7
3.4
11.0
11.8
6.4
14.6
11.6
5.5
7.0
9.3
9.9
-3.8
16.0
-2.4
21.3
6.6
14.0
22.2
15.7
8.8
7.1
18.0
1.5
7.6
debt4
5.4R
8.6R
l.Y
components
Time and savings
deposits
Commercial banks
Savings 7
Small-denomination time
Large-denomination time 9 ' 10
Thrift institutions
15
Savings'
16
Small-denomination time
17
Large-denomination time
12
13
14
Debt
components4
18 Federal
19 Nonfederal
20 Total loans and securities at commercial banks
5.8
8.5
9.3
8.0
8.2
8.5
15.2
10.9
6.2
5.5
5.1
10.8
7.9
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. To 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
compensate for float also are subtracted from the actual series.
3. The 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 CRR, all components 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 CRR, 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 component 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:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of depository institutions; (2) travelers checks of nonbank issuers; (3) demand
deposits at all commercial banks other than those due to depository institutions,
the U . S . government, and foreign banks and official institutions less cash items in
the process of collection and Federal Reserve float; and (4) other checkable
deposits (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.
M2: Ml 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
6.7 r
-2.2
10.1
13.6 R
16.0 R
5.7
7.1
2.7
9.R
11.4
10.0
13.0
4.9
institutions and money market funds. Also excludes all balances held by U . S .
commercial banks, money market funds (general purpose and broker-dealer),
foreign governments and commercial banks, and the U . S . government.
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
funds. Excludes amounts held by depository institutions, the U . S . government,
money market funds, and foreign banks and official institutions. Also subtracted
is 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. Growth rates for debt reflect adjustments 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), MMDAs, 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 funds.
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 accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
11. Changes calculated from figures shown in table 1.23.
A4 DomesticNonfinancialStatistics • October 1988
1.11
R E S E R V E S OF DEPOSITORY I N S T I T U T I O N S A N D R E S E R V E B A N K CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1988
1988
Factors
May
June
July
June 15
June 22
June 29
July 6
July 13
July 20
July 27
249,800
251,010
253,673
250,624
250,967
252,634
254,882
256,086
252,593
251,401
223,732
222,187
1,545
7,777
7,272
505
0
2,592
649
15,050
11,063
5,018
18,427
225,333
224,690
643
7,590
7,268
322
0
3,040
478
14,569
11,063
5,018
18,478
225,800
224,319
1,481
8,140
7,242
898
0
3,508
936
15,289
11,063
5,018
18,503
224,931
224,931
0
7,268
7,268
0
0
3,651
359
14,415
11,063
5,018
18,472
224,955
224,955
0
7,268
7,268
0
0
3,034
845
14,865
11,063
5,018
18,482
226,509
224,495
2,014
8,327
7,268
1,059
0
2,281
519
14,998
11,063
5,018
18,492
226,817
223,256
3,561
9,464
7,268
2,196
0
3,434
334
14,832
11,063
5,018
18,481
227,986
225,882
2,104
8.329
7,268
1,061
0
3,878
939
14,953
11,063
5,018
18,491
225,254
224,440
814
8,180
7,258
922
0
3,138
766
15,255
11,063
5,018
18,505
224,208
223,390
818
7,319
7,201
118
0
3,398
806
15,670
11,063
5,018
18,519
230,482
475
233,525
455
235,965
414
233,640
459
233,382
457
233,267
449
236,183
426
237,232
421
236,025
417
234,880
406
7,276
259
4,306
243
3,695
272
3,110
236
4,252
257
6,529
235
4,686
316
4,148
226
3,209
244
3,594
315
1,922
360
1,949
329
1,857
329
1,827
304
1,938
322
1,811
363
1,943
1,824
293
1,797
350
1,935
357
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit
2
U.S. government securities 1
3
Bought outright
4
Held under repurchase agreements
5
Federal agency obligations
6
Bought outright
7
Held under repurchase agreements,
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
335
7,302
7,348
7,306
7,463
7,417
7,510
36,231
37,413 '
38,418
38,140
37,506
37,045
7.330
7,446
7,392
39,183
37,691
37,122
July 13
July 20
July 27
7,077
38,478
End-of-month figures
Wednesday figures
1988
1988
May
June
July
June 15
June 22
June 29
July 6
SUPPLYING RESERVE F U N D S
23 Reserve Bank credit
248,274
254,647
252,440
253,545
248,875
256,429
254,427
260,783
250,990
248,719
24
U.S. government securities'
25
Bought outright
26
Held under repurchase agreements
27
Federal agency obligations
28
Bought outright
29
Held under repurchase agreements
30
Acceptances
31
Loans
32
Float
33
Other Federal Reserve assets
34 Gold stock 2
35 Special drawing rights certificate a c c o u n t . . .
36 Treasury currency outstanding
223,192
223,192
0
7,268
7,268
0
0
3,304
122
14,388
11,063
5,018
18,451
227,636
222,450
5,186
9,508
7,268
2,240
0
2,464
259
14,780
11,063
5,018
18,501
224,450
224,450
0
7,201
7,201
0
0
3,650
774
16,365
11,063
5,018
18,531
226,697
226,697
0
7,268
7,268
0
0
4,388
624
14,568
11,063
5,018
18,481
223,663
223,663
0
7,268
7,268
0
0
2,297
861
14,786
11,063
5,018
18,491
228,438
223,010
5,428
9,821
7,268
2,553
0
2,244
522
15,404
11,063
5,018
18,501
226,059
223,748
2,311
8,850
7,268
1,582
0
3,080
1,666
14,772
11,063
5,018
18,489
227,258
226,214
1,044
7,893
7,268
625
0
9,434
976
15,222
11,063
5,018
18,503
223,988
223,988
0
7,201
7,201
0
0
3,123
1,102
15,576
11,063
5,018
18,517
220,727
220,727
0
7,201
7,201
0
0
3,415
1,616
15,760
11,062
5,018
18,531
232,758
459
235,513
432
234,990
397
233,776
458
233,246
452
234,426
432
237,279
418
236,982
419
235,610
407
234,979
397
2,871
298
9,762
382
3,910
269
3,787
219
4,122
204
8,216
203
4,154
339
4,106
205
3,606
266
3,490
343
1,660
427
1,655
351
1,642
291
1,653
363
1,657
275
1,657
359
1,658
313
1,659
285
1,637
323
1,641
322
ABSORBING RESERVE F U N D S
37 Currency in circulation
38 Treasury cash holdings
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
7,235
7,109
7,200
7,235
7,265
7,394
6,886
7,309
7,226
7,157
37,098
34,026
38,352
40,616
36,227
38,325
37,949
44,402
36,512
35,001
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
R E S E R V E S A N D BORROWINGS
A5
Depository Institutions 1
Millions of dollars
Monthly averages 9
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks 2
Total vault cash 1
Vault
Surplus
Total reserves 6
Required reserves
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks 8
1985
1986
1987
1987
1988
Dec.
Dec.
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
27,620
22,953
20,522
2,431
48,142
47,085
1,058
1,318
56
499
37,360
24,079
22,199
1,879
59,560
58,191
1,369
827
38
303
37,673
26,155
24,449
1,706
62,123
61,094
1,029
777
93
483
37,673
26,155
24,449
1,706
62,123
61,094
1,029
777
93
483
37,485
26,919
25,155
1,764
62,640
61,345
1,295
1,082
59
372
34,211
28,119
25,836
2,283
60,047
58,914
1,133
396
75
205
36,027
25,926
24,049
1,877
60,076
59,147
929
1,752
119
1,478
38,429
25,200
23,636
1,564
62,064
61,205
859
2,993
146
2,624
36,509
25,873
24,172
1,700
60,681
59,641
1,040
2,578
246
2,107
37,907
25,717
24,084
1,632
61,991
61,103
888
3,083
311
2,554
Biweekly averages of daily figures for weeks ending
1988
11
1?
13
14
15
16
17
18
19
20
Reserve balances with Reserve Banks 2
Total vault cash
Vault 4
Surplus
Total reserves
Required reserves
^
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
Apr. 6
Apr. 20
May 4
May 18
June 1
June 15
June 29
July 13r
July 27
Aug. 10
37,003
25,336
23,610
1,726
60,613
59,696
917
2,817
122
2,494
39,123
25,205
23,709
1,497
62,831
62,145
686
3,619
124
3,278
38,313
25,112
23,549
1,563
61,862
60,796
1,067
2,224
191
1,787
36,737
25,726
24,122
1,604
60,859
59,959
901
2,175
241
1,798
35,707
26,265
24,418
1,847
60,125
58,943
1,182
3,120
269
2,538
38,644
25,118
23,614
1,504
62,258
61,563
696
3,465
287
2,986
37,260
26,237
24,492
1,745
61,752
60,692
1,060
2,658
337
2,138
38,831
26,270
24,629
1,641
63,460
62,599
861
3,656
352
2,340
37,399
26,647
24,889
1,758
62,288
61,085
1,203
3,268
390
2,663
37,346
26,571
24,762
1,810
62,107
61,305
803
3,339
407
2,748
1. These data also appear in the Board's H.3 (502) release. For address, see inside front cover.
2. Excludes required clearing balances and adjustments to compensate for
float.
3. 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.
4. 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.
5. 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.
6. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate 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.
7. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
8. 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.
9. Data are prorated monthly averages of biweekly averages.
A6 DomesticNonfinancialStatistics • October 1988
1.13
S E L E C T E D BORROWINGS IN IMMEDIATELY A V A I L A B L E F U N D S
Large Member Banks'
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
From other depository institutions, foreign banks and
foreign official institutions, and U . S . government
agencies
For one day or under continuing contract
For all other maturities
Dec. 14
Dec. 21
Dec. 28
Jan. 4
Jan. 11
Jan. 18
Jan. 25
Feb. 1
Feb. 8
75,774
9,608
70,856
8,953
67,536
9,409
75,090
8,611
75,188
9,297
70,870
9,300
69,234
8,966
68,643
8,899
73,658
10,198
27,276
7,468
24,725
6,968
22,860
7,191
23,602
6,886
28,254
5,920
29,954
5,897
28,418
6,140
28,852
6,356
33,324
6,762
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
For all other maturities
14,052
13,274
14,741
12,119
12,170
12,603
15,781
8,110
14,660
10,653
14,427
12,060
15,796
13,614
16,800
14,309
15,386
15,290
27,093
9,942
24,887
9,886
24,512
12,018
25,793
9,675
27,673
9,984
27,327
9,420
26,5%
10,378
26,307
10,268
25,172
9,986
MEMO: Federal funds loans and resale agreements in
immediately available funds in maturities of one day
or under continuing contract
9 To commercial banks in the United States
10 To all other specified customers
30,472
11,027
31,147
11,062
30,352
10,326
34,041
10,793
35,783
12,665
35,356
12,541
35,063
14,446
36,523
15,399
35,727
15,169
5
6
7
8
1. Banks with assets of $1 billion or more as of Dec. 31, 1977 .
These data also appear in the Board's H.5 (507) release. For address, see inside
front cover.
2. Brokers and nonbank dealers in securities; other depository institutions;
foreign banks and official institutions; and United States government agencies,
Policy Instruments
1.14
A7
F E D E R A L R E S E R V E B A N K INTEREST R A T E S
Percent per year
Current and previous levels
Extended credit 2
Adjustment credit
and
Seasonal credit'
Federal Reserve
Bank
On
8/24/88
Effective
date
Previous
rate
6 Vl
8/9/88
8/9/88
8/9/88
8/9/88
8/9/88
8/9/88
6
Boston
N e w York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
6
Vi
After 30 days of borrowing 3
First 30 days of borrowing
8/10/88
8/9/88
8/9/88
8/9/88
8/11/88
8/9/88
6
On
8/24/88
Effective
date
Previous
rate
On
8/24/88
Effective
date
Previous
rate
8/9/88
8/9/88
8/9/88
8/9/88
8/9/88
8/9/88
6
8.45
8/11/88
8/11/88
8/11/88
8/11/88
8/11/88
8/11/88
8.40
6V1
6
Vl
8/10/88
8/9/88
8/9/88
8/9/88
8/11/88
8/9/88
6
8.45
8/11/88
8/11/88
8/11/88
8/11/88
8/11/88
8/11/88
Effective date
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
7/28/88
8.40
Range of rates for adjustment credit in recent years 4
Effective date
In effect Dec. 31, 1977.
1978-—Jan.
9
20
May 11
12
July
3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
1979-- J u l y 20
Aug. 17
20
Sept. 19
21
Oct.
8
10
1980-- F e b .
15
19
May 29
30
June 13
16
Range (or
level)—
All F.R.
Banks
6
6-6V1
6V1
evi-i
1
7-7V4
F.R.
Bank
of
N.Y.
6
6V1
6V1
1
1
IVi
IVi
Effective date
1980—July
28
29
Sept. 26
Nov. 17
Dec. 5
8
8-8W
8 Vi
SVi-9'A
9Vi
8
Nov.
5
8
2
8 Vi
9Vi
Dec.
4
10
10-10W
lOVi
10
IVi,
73/4
10V^-11
7V4
SVi
91/2
10W
10'/!
11
11-12
12
11
11
12
12
12-13
13
13
13
12-13
13
12
11-12
11
12
11
11
1981—May
6
1982—July
20
23
2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
Aug.
1. Adjustment credit is available on a short-term basis to help depository
institutions meet temporary needs for funds that 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 from a major operating problem at the borrower's facility.
Seasonal credit is available to help smaller depository institutions meet regular,
seasonal needs for funds that cannot be met through special industry lenders and
that arise from a combination of expected patterns of movement in their deposits
and loans. A temporary 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. The program was reestablished 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. Extended credit is available to depository institutions, when similar assistance is not reasonably available from 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
F.R.
Bank
of
N.Y.
Effective date
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
10-11
10
11
12
12-13
10
10
11
12
13
1984—Apr.
&V1-9
9
8>/>-9
%Vl
8
9
9
m
8 Vi
8
13-14
14
13-14
13
12
14
14
13
13
12
1985—May 20
24
lVi-%
IVi
IVi
IVi
1986—Mar.
1-1 Vi
1
evi-i
6
5^-6
5 Vi
1
1
6 Vi
6
5 Vi
5 Vi
HVi-12
UVi
11-iivs
11
10^
10-10Vi
10
9^-10
9 Vi
9-9'/i
9
m-9
S'A-9
8 Vl
1m
1 \Vl
11
11
10V2
10
10
9 Vi
9 Vi
9
9
9
8 Vi
8 Vi
9
13
Nov. 21
26
Dec. 24
7
10
Apr. 21
July 11
Aug. 21
22
1987—Sept.
4
11
5Vz-6
6
6
6
1988—Aug.
9
11
6 - 6 Vi
6 Vi
6 Vi
6 Vi
6 Vi
(>Vi
In effect August 24, 1988
somewhat above rates on market sources of funds ordinarily will be charged, but
in no case will the rate charged be less than the basic discount rate plus 50 basis
points. The flexible rate is reestablished 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 Governors:
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 weeks or in more than four weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7,
1980. There was no surcharge until N o v . 17,1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the
formula for applying the surcharge was changed from a calendar quarter to a
moving 13-week period. The surcharge was eliminated on N o v . 17, 1981.
A8 DomesticNonfinancialStatistics • October 1988
1.15
R E S E R V E R E Q U I R E M E N T S OF DEPOSITORY INSTITUTIONS 1
Percent of deposits
Type of deposit, and
deposit interval
Depository institution requirements
after implementation of the
Monetary Control Act
Percent of
deposits
Net transaction accounts •
$0 million-$40.5 million
More than $40.5 million . . .
Effective date
12/15/87
12/15/87
Nonpersonal time deposits5
By original maturity
Less than 1 Vi years
1 xh years or more
3
0
10/6/83
10/6/83
Eurocurrency
All types
3
11/13/80
liabilities
1. Reserve requirements in effect on Dec. 31, 1987. Required reserves must be
held in the form of deposits with Federal Reserve Banks or vault cash. Nonmembers 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. Under 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 Garn-St 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. 15, 1987, the exemption was raised from $2.9
million to $3.2 million. In determining the reserve requirements of depository
institutions, the exemption shall apply in the following order: (1) net NOW
accounts (NOW accounts less allowable deductions); (2) net other transaction
accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting
with those with the highest reserve ratio. With respect to NOW accounts and
other transaction accounts, the exemption applies only to such accounts 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 no 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. 15,
1987 for institutions reporting quarterly and Dec. 29, 1987 for institutions
reporting weekly, the amount was increased from $36.7 million to $40.5 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
F E D E R A L R E S E R V E O P E N MARKET TRANSACTIONS 1
Millions of dollars
1988
1987
1985
T y p e of transaction
1987
1986
Apr.
Feb.
May
U . S . TREASURY SECURITIES
Outright transactions (excluding
transactions)
1
2
3
4
Treasury bills
G r o s s purchases
G r o s s sales
Exchange
Redemptions
5
6
7
8
9
Others within 1 year
G r o s s purchases
G r o s s sales
Maturity shift
Exchange
Redemptions
matched
22,214
4,118
22,602
2,502
18,983
6,050
3,500
1,000
9,029
1,349
190
0
0
19,763
-17,717
18,673
-20,179
3,658
300
21,502
-20,388
70
0
0
0
0
0
150
0
0
0
0
49
0
600
346
538
0
1,600
560
0
0
0
423
0
0
0
1,092
0
0
0
479
0
1,400
-1,742
0
950
-754
0
0
0
1,939
-2,868
0
0
0
2,051
-2,089
0
-1,688
0
0
0
-840
749
0
800
-952
2,643
0
0
-2,051
2,089
3,661
0
-823
1,434
-1,102
3,724
0
0
-110
5
0
175
-987
150
1,017
0
-45
254
-387
400
966
0
0
0
-157
200
0
0
1,646
-4,324
0
10
11
12
13
1 to 5 years
G r o s s purchases
G r o s s sales
Maturity shift
Exchange
2,185
893
0
0
-17,459
13,853
-17,058
16,984
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
458
100
-1,857
2,184
18
19
20
21
Over 10 years
G r o s s purchases
G r o s s sales
Maturity shift
Exchange
293
158
-447
1,679
1,150
500
26,499
4,218
3,500
24,078
2,502
1,000
37,171
6,802
9,099
4,259
0
0
600
346
1,513
1,600
560
0
0
7,160
0
0
Matched
transactions
25 Gross sales
26 Gross purchases
866,175
865,968
927,997
927,247
950,923
950,935
104,833
105,917
78,358
78,513
97,892
99,139
104,527
104,572
86,900
85,608
115,287
115,115
Repurchase
agreements2
27 Gross purchases
28 G r o s s sales
134,253
132,351
170,431
160,268
314,620
324,666
23,512
25,264
10,591
14,237
18,696
11,088
15,871
23,478
20,477
29,989
11,235
3,591
-4,140
13,476
-7,779
All maturities
22 G r o s s purchases
23 Gross sales
24 Redemptions
29 N e t change in U . S . government securities
0
2,589
10,231
452
-17,974
18,938
-1,400
1,742
236
2,441
596
-1,620
2,050
-3,529
950
0
0
0
1,858
445
0
0
0
0
0
0
0
0
0
0
0
49
-1,520
605
0
0
0
0
0
0
F E D E R A L A G E N C Y OBLIGATIONS
Outright
transactions
30 G r o s s purchases
31 Gross sales
32 Redemptions
Repurchase
agreements2
33 G r o s s purchases
34 Gross sales
35 N e t change in federal agency obligations .
36 Total net change in System Open Market
Account
0
0
0
0
131
0
0
120
9,718
10,679
4,042
5,357
4,243
1,447
4,771
7,566
-1,274
-975
-1,446
2,676
-2,807
9,961
2,617
-5,586
16,151
-10,585
398
276
22,183
20,877
31,142
30,522
80,353
81,351
1,144
222
21,621
30,211
1. Sales, redemptions, and negative figures reduce holdings of the S y s t e m Open
Market A c c o u n t ; all other figures increase such holdings. Details may not add to
totals b e c a u s e of rounding.
0
0
162
0
0
-1,541
2. In July 1984 the Open Market Trading D e s k discontinued accepting bankers
acceptances in repurchase agreements,
A10 DomesticNonfinancialStatistics • October 1988
1.18
FEDERAL RESERVE BANKS
Condition and Federal Reserve N o t e Statements 1
Millions of dollars
Account
June 29
July 6
Wednesday
End of month
1988
1988
July 13
July 20
July 27
May
June
July
Consolidated condition statement
ASSETS
1
2
3
Gold certificate account
Special drawing rights certificate account
11,063
5,018
380
11,063
5,018
348
11,063
5,018
350
11,063
5,018
361
11,062
5,018
374
11,063
5,018
402
11,063
5,018
369
11,063
5,018
383
2,244
0
0
3,080
0
0
9,434
0
0
3,123
0
0
3,415
0
0
3,304
0
0
2,464
0
0
3,650
0
0
7,268
2,553
7,268
1,582
7,268
625
7,201
0
7,201
0
7,268
0
7,268
2,240
7,201
0
9
10
11
12
13
14
Loans
To depository institutions
Other
Acceptances held under repurchase agreements
Federal agency obligations
Bought outright
Held under repurchase agreements
U . S . Treasury securities
Bought outright
Bills
Notes
Bonds
Total bought outright 2
Held under repurchase agreements
Total U . S . Treasury securities
106,033
87,484
29,493
223,010
5,428
228,438
106,771
87,484
29,493
223,748
2,311
226,059
109,237
87,484
29,493
226,214
1,044
227,258
107,011
87,484
29,493
223,988
0
223,988
103,750
87,484
29,493
220,727
0
220,727
106,215
87,484
29,493
223,192
0
223,192
105,473
87,484
29,493
222,450
5,186
227,636
107,473
87,484
29,493
224,450
0
224,450
15
Total loans and securities
240,503
237,989
244,585
234,312
231,343
233,764
239,608
235,301
6,604
727
7,278
729
4
5
6
7
8
Items in process of collection
Bank premises
Other assets
18
Denominated in foreign currencies
19
All other
16
17
20
Total assets
6,155
725
10,495
727
6,977
729
7,239
728
7,239
729
5,354
723
6,457
8,222
6,236
7,809
6,478
8,015
7,050
7,798
7,118
7,913
6,349
7,316
6,226
7,827
7,561
8,075
278,523
279,685
283,215
273,569
270,7%
269,989
277,442
275,408
216,736
219,557
219,248
217,862
217,219
215,168
217,812
217,240
39,982
8,216
203
359
39,607
4,154
339
313
46,061
4,106
205
285
38,149
3,606
266
323
36,642
3,490
343
322
38,758
2,871
298
427
35,681
9,762
382
351
39,994
3,910
269
291
48,760
44,413
50,657
42,344
40,797
42,354
46,176
44,464
5,633
2,847
8,829
2,595
6,001
2,747
6,137
2,650
5,623
2,588
5,232
2,539
6,345
2,819
6,504
2,611
273,976
275,394
278,653
268,993
266,227
265,293
273,152
270,819
2,110
2,047
390
2,113
2,047
131
2,117
2,047
398
2,117
2,047
412
2,118
2,047
404
2,101
2,047
548
2,110
2,039
141
2,119
2,046
424
LIABILITIES
22
23
24
25
Federal Reserve notes
Deposits
To depository institutions
U . S . Treasury—General account
Foreign—Official accounts
Other
26
Total deposits
77
28
Deferred credit items
Other liabilities and accrued dividends 5
29
Total liabilities
30
31
32
Capital paid in
Surplus
Other capital accounts
33
Total liabilities and capital accounts
278,523
279,685
283,215
273,569
270,796
269,989
277,442
275,408
34
MEMO: Marketable U . S . Treasury securities held in
custody for foreign and international accounts
226,364
225,926
225,945
224,445
224,329
230,917
228,226
226,294
21
CAPITAL ACCOUNTS
Federal Reserve note statement
260,133
43,397
216,736
260,036
40,479
219,557
260,748
41,500
219,248
261,263
43,401
217,862
261,825
44,606
217,219
258,661
43,493
215,168
260,049
42,237
217,812
262,021
44,781
217,240
38
39
40
41
Federal Reserve notes outstanding issued to bank
LESS: Held by bank
Federal Reserve notes, net
Collateral held against notes net:
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U . S . Treasury and agency securities
11,063
5,018
0
200,655
11,063
5,018
0
203,476
11,063
5,018
0
203,167
11,063
5,018
0
201,781
11,062
5,018
0
201,139
11,063
5,018
0
199,087
11,063
5,018
0
201,731
11,063
5,018
0
201,159
42
Total collateral
216,736
219,557
219,248
217,862
217,219
215,168
217,812
217,240
35
36
37
1. Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U . S . Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within 90 days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
A11
Maturity Distribution of Loan and Security Holdings
Millions of dollars
Type and maturity groupings
June 29
1 Loans—Total
2
Within 15 days
3
16 days to 90 days
4
91 days to 1 year
6
7
Within 15 days
16 days to 90 days
9 U.S. Treasury securities—Total
10
Within 15 days 1
11
16 days to 90 days
12
91 days to 1 year
13
Over 1 year to 5 years
14
Over 5 years to 10 years
15
Over 10 years
16 Federal agency obligations—Total
17
Within 15 days'
18
16 days to 90 days
20
21
22
Over 1 year to 5 years
Over 5 years to 10 years
Over 10 years
July 6
Wednesday
End of month
1988
1988
July 13
July 20
July 27
May 31
June 30
July 29
2,244
2,184
60
0
3,080
2,896
184
0
9,434
9,225
209
0
3,123
3,050
73
0
3,415
3,246
169
0
3,282
3,185
97
0
2,464
2,336
128
0
3,650
3,510
140
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
228,438
16,317
50,356
66,292
53,530
15,435
26,508
226,059
12,454
53,765
63,925
53,972
15,435
26,508
227,258
9,550
55,018
66,775
53,972
15,435
26,508
223,988
10,247
51,240
66,785
53,722
15,486
26,508
220,727
7,273
50,742
66,996
53,722
15,486
26,508
223,192
7,372
53,232
67,115
53,530
15,435
26,508
227,636
10,569
50,269
70,884
53,971
15,435
26,508
224,450
7,756
56,583
64,395
53,722
15,486
26,508
9,821
2,783
694
1,808
3,204
1,143
189
8,850
1,649
837
1,778
3,254
1,143
189
7,893
733
802
1,802
3,224
1,143
189
7,201
165
678
1,847
3,179
1,143
189
7,201
174
776
1,759
3,173
1,130
189
7,268
246
661
1,728
3,309
1,135
189
9,508
2,470
694
1,808
3,204
1,143
189
7,201
185
765
1,759
3,173
1,130
189
1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements.
A12 DomesticNonfinancialStatistics • October 1988
1.20
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1
Billions of dollars, averages of daily figures
1988
Item
1984
Dec.
1985
Dec.
1986
Dec.
1987
Dec.
1987
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 2
1 Total reserves 3
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
40.96
47.26
57.46
58.72
58.72
59.46
59.57
59.76
60.37
60.37
60.64
61.25
37.77
40.38
40.11
200.45
45.94
46.44
46.20
218.26
56.63
56.93
56.09
240.80
57.94
58.43
57.69
257.93
57.94
58.43
57.69
257.93
58.38
58.75
58.16
260.72
59.18
59.38
58.44
262.02
58.01
59.49
58.83
263.32
57.38
60.00
59.51
265.81
57.79
59.89
59.32
266.92
57.55
60.11
59.75'
268.3 l r
57.81
60.34
60.23
270.56
Not seasonally adjusted
6 Total reserves 3
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit 4
Required reserves
Monetary base
41.84
48.27
58.70
60.02
60.02
61.20
58.66
58.85
60.95
59.45
60.68
61.47
38.65
41.26
40.99
203.39
46.95
47.45
47.21
221.49
57.87
58.18
57.33
244.55
59.25
59.73
58.99
262.05
59.25
59.73
58.99
262.05
60.12
60.49
59.90
262.01
58.27
58.47
57.53
259.01
57.10
58.58
57.92
260.77
57.95
60.58
60.09
265.01
56.88
58.98
58.41
265.73
57.60
60.15
59.79'
269.44'
58.03
60.57
60.46
272.35
40.70
48.14
59.56
62.12
62.12
62.64
60.05
60.08
62.06
60.68
61.99
62.76
37.51
40.09
39.84
204.18
46.82
47.41
47.08
223.53
58.73
59.04
58.19
247.71
61.35
61.86
61.09
266.16
61.35
61.86
61.09
266.16
61.56
62.12
61.34
265.79
59.65
59.82
58.91
262.60
58.32
59.58
59.15
263.98
59.07
61.89
61.21
268.13
58.10
60.08
59.64
268.90
58.91
61.47
61.10'
272.65'
59.32
61.99
61.75
275.53
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 6
11 Total reserves 3
12
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit 4
Required reserves
Monetary base
1. Latest monthly and biweekly figures are available from the Board's H.3(502)
statistical release. Historical data and estimates of the impact on required reserves
of changes in reserve requirements are available from the Monetary and Reserves
Projections Section. Division of Monetary Affairs. Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To 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
compensate for float also are subtracted from the actual series.
3. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus 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. 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.
5. The monetary base not adjusted for discontinuities consists of total reserves
plus required clearing balances and adjustments to compensate for float at Federal
Reserve Banks and 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. Currency and vault
cash figures are measured over the weekly computation period ending Monday.
The seasonally adjusted monetary base consists of seasonally adjusted total
reserves, which include excess reserves on a not seasonally adjusted basis, plus
the seasonally adjusted currency component of the money stock and the remaining items seasonally adjusted as a whole.
6. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated with
implementation of the Monetary Control Act or other regulatory changes to
reserve requirements.
Monetary and Credit Aggregates
1.21
A13
M O N E Y STOCK, L I Q U I D ASSETS, A N D D E B T M E A S U R E S 1
Billions of dollars, averages of daily figures
1988
Item 2
1984
Dec.
1985
Dec.
1986
Dec.
1987
Dec.
Apr.
May r
June r
July
Seasonally adjusted
1 Ml
7 M2
M3
4 L
5
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits
6
7
8
9
551.9
2,363.6
2,978.3
3,519.4
5,932.6
620.1
2,562.6
3,196.4
3,825.9
6,749.4
725.4
2,807.8
3,490.4
4,133.8
7,607.6
750.8
2,901.1
3,661.1
4,323.9
8,305.5
770.1
2,991.4
3,766.7
4,460.5
8,529.7
770.2
3,002.3
3,779.8
4,488.4
8,588.5
776.5
3,015.5
3,799.9
4,501.6
8,643.2
782.3
3,022.9
3,816.8
n.a.
n.a.
156.1
5.2
244.1
146.4
167.7
5.9
267.2
179.2
180.4
6.5
303.3
235.2
196.5
7.1
288.0
259.3
202.5
7.3
290.2
270.1
203.6
7.4
287.4
271.9
204.9
7.3
289.9
274.4
206.3
7.2
290.6
278.3
1,811.7
614.7
1,942.5
633.8
2,082.4
682.6
2,150.3
760.0
2,221.3
775.3
2,232.1
777.5
2,239.0
784.4
2,240.6
793.9
10
11
Nontransactions components
In M2 .
In M3 only 8
1?
13
Savings deposits 9
Commercial Banks
Thrift institutions
122.6
162.9
124.8
176.6
155.5
215.2
178.2
236.0
184.2
238.6
186.0
239.2
188.0
241.0
189.5
242.2
14
15
Small-denomination time deposits 1 0
Commercial Banks
Thrift institutions
386.3
497.0
383.3
496.2
364.6
488.6
384.6
528.5
402.5
562.3
404.7
567.3
406.8
568.1
409.7
568.1
16
17
Money market mutual funds
General purpose and broker-dealer
Institution-only
167.5
62.7
176.5
64.5
208.0
84.4
221.1
89.6
235.8
91.9
231.7
90.0
228.9
86.3
229.5
84.8
18
19
Large-denomination time deposits 1 1
Commercial Banks
Thrift institutions
270.2
146.8
284.9
151.6
288.9
150.3
323.5
161.2
325.7
167.3
327.9
168.1
333.5
168.1
340.6
168.5
70
21
Debt components
Federal debt
Nonfederal debt
1,365.3
4,567.3
1,584.3
5,165.1
1,804.5
5,803.2
1,954.7
6,350.8
2,018.5
6,511.2
2,023.1
6,565.4
2,032.1
6,611.2
n.a.
n.a.
Not seasonally adjusted
77 Ml
73 M2
74
75 L
26
564.5
2,373.2
2,991.4
3,532.7
5,927.1
633.5
2,573.9
3,211.0
3,841.4
6,740.6
740.6
2,821.5
3,507.2
4,151.9
7,593.3
765.9
2,914.8
3,677.7
4,342.0
8,289.3
778.3
2,998.9
3,771.5
4,460.8
8,500.0
763.8
2,988.5
3,767.3
4,470.9
8,558.8
778.8
3,013.3
3,795.2
4,498.2
8,618.3
785.5
3,027.5
3,814.2
n.a.
n.a.
158.5
4.9
253.0
148.2
170.2
5.5
276.9
180.9
183.0
6.0
314.4
237.3
199.4
6.5
298.5
261.6
201.6
6.9
292.0
277.8
203.6
7.1
282.9
270.1
205.8
7.6
291.0
274.4
207.9
8.2
292.7
276.8
1,808.7
618.2
1,940.3
637.1
2,080.8
685.7
2,148.9
762.9
2,220.7
772.6
2,224.7
778.8
2,234.5
781.9
2,242.0
786.7
77
78
29
30
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits
31
32
Nontransactions components
M2 7
M3 only 8
33
34
Money market deposit accounts
Commercial Banks
Thrift institutions
267.4
149.4
332.8
180.8
379.6
192.9
358.2
167.0
360.3
163.0
357.0
162.6
359.9
162.4
359.2
161.7
35
36
Savings deposits 9
Commercial Banks
Thrift institutions
121.5
161.5
123.7
174.8
154.2
212.9
176.7
233.3
185.1
239.4
187.1
241.2
189.6
243.8
191.4
245.5
37
38
Small-denomination time deposits 1 0
Commercial Banks
Thrift institutions
386.9
498.2
384.0
497.5
365.3
489.7
385.2
529.3
399.6
560.9
401.4
562.8
405.4
564.6
410.2
568.3
39
40
Money market mutual funds
General purpose and broker-dealer
Institution-only
167.5
62.7
176.5
64.5
208.0
84.4
221.1
89.6
235.8
91.9
231.7
90.0
228.9
86.3
229.5
84.8
41
42
Large-denomination time deposits 11
Commercial Banks 1 2
Thrift institutions
270.9
146.8
285.4
151.9
289.1
150.7
323.6
161.8
325.6
165.7
328.5
167.2
332.7
166.9
337.8
167.0
43
44
Debt components
Federal debt
Nonfederal debt
1,364.7
4,562.4
1,583.7
5,156.9
1,803.9
5,789.4
1,954.1
6,335.1
2,001.6
6,498.4
2,005.2
6,553.6
2,014.7
6,603.6
For notes see following page.
n.a.
n.a.
A14 DomesticNonfinancialStatistics • October 1988
NOTES TO T A B L E 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
release. Historical data are available from the Banking Section, Division of
Monetary Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. 20551.
2. 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 depository institutions; (2) travelers checks of nonbank issuers; (3) demand
deposits at all commercial banks other than those due to depository institutions,
the U . S . government, and foreign banks and official institutions less cash items in
the process of collection and Federal Reserve float; and (4) other checkable
deposits (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.
M2: Ml 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, MMDAs, 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
funds. Also excludes all balances held by U . S . commercial banks, money market
funds (general purpose and broker-dealer), foreign governments and commercial
banks, and the U.S. government.
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
funds. Excludes amounts held by depository institutions, the U . S . government,
money market funds, and foreign banks and official institutions. Also subtracted
is 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.
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
depository institutions.
4. Outstanding amount of U . S . dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other
than those due to depository institutions, the U . S . government, and foreign banks
and official institutions less cash items in the process of collection and Federal
Reserve float.
6. Consists of N O W and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions.
7. 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.
8. Sum of large time deposits, term RPs, and term Eurodollars of U.S.
residents, money market fund balances (institution-only), less the estimated
amount of overnight RPs and Eurodollars held by institution-only money market
funds.
9. Savings deposits exclude MMDAs.
10. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All individual retirement accoums (IRA) and
Keogh accounts at commercial banks and thrifts are subtracted from small time
deposits.
11. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
12. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
Monetary and Credit Aggregates
1.22
A15
B A N K DEBITS A N D DEPOSIT T U R N O V E R 1
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1988
1987
Bank group, or type of customer
19852
19862
19872
Jan.
Dec.
Mar.
Apr.
May
Seasonally adjusted
D E B I T S TO
Demand deposits 3
1
All insured banks
2
Major N e w York City banks
3
Other banks
4 A T S - N 0 W accounts 4
5 Savings deposits 5
Feb.
156,091.6
70,585.8
85,505.9
1,823.5
384.9
188,345.8
91,397.3
96,948.8
2,182.5
403.5
217,115.9
104,496.3
112,619.6
2,402.7
526.5
203,290.6
92,640.1
110,650.5
2,525.7
556.0
213,270.8
98,733.8
114,537.0
2,352.7
534.9
221,057.3
104,568.3
116,489.0
2,730.3
596.0
218,986.7
101,161.0
117,825.7
2,856.8
640.7
213,971.5
100,695.1
113,276.4
2,557.9
543.7
224,052.3
109,714.7
114,337.6
2,664.9
574.7
500.3
2,196.9
305.7
15.8
3.2
556.5
2,498.2
321.2
15.6
3.0
612.1
2,670.6
357.0
13.8
3.1
590.4
2,608.1
358.3
14.2
3.2
602.5
2,600.3
362.5
13.0
3.0
628.2
2,844.8
369.7
14.9
3.3
628.8
2,811.0
377.3
15.5
3.5
600.2
2,700.6
354.9
13.8
3.0
630.9
2,881.3
360.6
14.2
3.1
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 3
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts 4
Savings deposits
Not seasonally adjusted
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 4
15 MMDA
16 Savings deposits
156,052.3
70,559.2
85,493.1
1,826.4
1,223.9
385.3
188,506.4
91,500.0
97,006.6
2,184.6
1,609.4
404.1
217,124.8
104,518.6
112,606.1
2,404.8
1,954.2
526.8
222,338.9
102,548.7
119,790.3
2,645.3
2,276.4
568.9
210,029.1
40.3
112,189.0
2,565.2
2,305.6
552.5
208,899.2
36.8
110,792.7
2,468.6
2,102.8
526.3
233,286.6
109,557.8
123,728.8
2,825.0
2,337.5
616.5
214,848.8
101,141.9
113,706.9
2,745.3
2,372.8
603.2
222,685.5
106,335.6
116,349.9
2,601.3
2,341.0
566.4
499.9
2,196.3
305.6
15.8
4.0
3.2
556.7
2,499.1
321.2
15.6
4.5
3.0
612.3
2,674.9
356.9
13.8
5.3
3.1
615.0
2,661.4
370.9
14.6
6.4
3.2
578.7
2,430.3
347.7
13.9
6.5
3.1
610.5
2,664.6
362.8
13.5
5.9
3.0
684.3
3,005.7
406.4
15.3
6.5
3.4
601.8
. 2,706.2
355.7
14.4
6.6
3.3
638.6
2,895.6
372.9
14.1
6.6
3.1
DEPOSIT TURNOVER
17
18
19
20
21
22
Demand deposits 3
All insured banks
Major N e w York City banks,
Other banks
A T S - N O W accounts 4
MMDA6
Savings deposits
1. Historical tables containing revised data for earlier periods may be obtained
from the Monetary and Reserves Projections Section, Division of Monetary
Affairs, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
These data also appear on the Board's G.6 (406) release. For address, see inside
front cover.
2. Annual averages of monthly figures.
3. Represents accounts of individuals, partnerships, and corporations and
of states and political subdivisions.
4. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). ATS data are
available beginning December 1978.
5. Excludes ATS and NOW accounts, MMDA and special club accounts, such
as Christmas and vacation clubs.
6. Money market deposit accounts.
A16 DomesticNonfinancialStatistics • October 1988
1.23
L O A N S A N D SECURITIES
All Commercial Banks 1
Billions of dollars; averages of Wednesday figures
1987
1988
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 2
5
Commercial and industrial . . . . .
6
Bankers acceptances held . . .
/
Other commercial and
industrial
8
U.S. addressees 4
9
Non-U.S. addressees
10
Real estate
11
Individual
12
Security
13
Nonbank financial
institutions
14
Agricultural
15
State and political
subdivisions
16
Foreign banks
Foreign official institutions
18
Lease financing receivables
19
All other loans
11
2,199.0
2,214.7
2,227.6
2,232.1
2,230.6
2,242.4
2,259.8
2,274.8
2,297.7
2,322.5
2,343.9
2,353.5
328.5
193.7
1,676.8
554.0
5.3
331.3
193.7
1,689.8
559.0
5.4
331.7
194.2
1,701.7
562.8
5.5
331.1
196.2
1,704.8
563.1
4.6
333.2
196.0
1,701.4
565.5
4.3
334.6
193.9
1,714.0
568.3
4.5
334.9
195.6
1,729.2
571.1
4.5
338.9
197.5
1,738.4
569.3
4.8
343.0
198.2
1,756.4
578.8
4.7
345.9
197.6
1,778.9
587.4
4.5
349.8
198.5
1,795.5
594.4
4.5
344.8
199.1
1,809.5
600.7
4.4
548.7
540.6
8.1
556.8
321.5
45.4
553.6
545.7
7.9
561.7
322.8
46.1
557.3
549.4
7.9
569.4
324.1
47.1
558.5
551.0
7.5
576.2
325.0
39.3
561.2
553.1
8.2
582.3
325.9
33.4
563.9
554.9
9.0
587.5
327.9
36.3
566.6
557.6
8.9
593.0
330.8
41.3
564.5
556.1
8.4
598.2
334.6
39.8
574.1
565.8
8.3
604.4
337.6
38.1
582.9
575.7
7.1
612.6
339.1
38.8
589.9
583.0
7.0
618.9
340.6
38.6
596.2
589.4
6.8
624.9
341.6
38.0
31.5
29.7
31.4
29.6
31.7
29.6
31.9
29.3
31.9
29.2
32.1
29.3
32.7
29.5
32.1
29.5
31.2
29.5
31.8
29.4
31.4
29.0
31.9
28.3
54.8
9.1
5.7
24.0
44.2
54.7
9.2
5.7
24.1
45.4
54.1
9.6
5.8
24.3
43.1
53.4
8.8
5.7
24.5
47.6
51.2
8.2
5.6
24.8
43.3
52.3
8.2
5.6
24.8
41.6
52.3
7.8
5.2
24.7
40.9
52.1
8.1
5.2
24.8
44.7 r
51.9
8.5
5.2
25.0
46.1
51.6
8.2
5.3
25.3
49.5
51.5
8.2
5.2
25.8
51.8
51.1
8.5
5.2
26.5
52.9
Not seasonally adjusted
20 Total loans and securities 2
2,188.8
2,211.6
2,222.4
2,231.3
2,247.0
2,255.0
2,264.5
2,275.0
2,298.8
2,319.1
2,340.0
2,343.3
21 U . S . government securities
22 Other securities
23 Total loans and leases 2
24
Commercial and industrial . . . . .
25
Bankers acceptances held . . .
26
Other commercial and
industrial
27
U . S . addressees
28
Non-U.S. addressees
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
328.3
193.6
1,666.9
549.5
5.3
331.3
193.8
1,686.6
555.7
5.5
329.3
193.3
1,699.8
558.7
5.4
331.0
195.6
1,704.7
562.0
4.6
333.1
196.6
1,717.3
569.6
4.4
336.1
196.5
1,722.4
568.0
4.3
340.0
196.3
1,728.2
570.3
4.4
340.8
197.1
1,737.2
574.5
4.8
342.6
197.8
1,758.5
582.8
4.7
344.3
197.7
1,777.1
589.8
4.5
346.3
198.0
1,795.7
595.9
4.6
343.9
197.9
1,801.6
597.8
4.5
544.2
536.0
8.3
556.8
321.5
43.3
550.2
542.1
8.1
562.4
324.3
44.8
553.3
545.3
8.1
570.0
325.7
45.6
557.4
549.3
8.1
576.8
326.7
39.4
565.2
557.1
8.1
583.2
330.2
35.1
563.7
555.5
8.2
587.8
331.3
37.1
565.9
557.4
8.5
592.3
330.2
39.7
569.7
561.5
8.1
597.4
331.5
39.3
578.1
570.0
8.1
603.4
334.5
39.8
585.3
577.9
7.3
612.0
336.3
39.3
591.3
584.2
7.1
618.6
338.5
40.0
593.3
586.0
7.3
624.9
340.2
37.5
31.4
30.6
31.8
30.7
31.7
30.4
32.3
29.6
33.2
28.9
32.4
28.6
31.6
28.5
31.1
28.5
31.1
28.7
31.5
29.1
31.5
29.3
31.7
28.9
54.1
8.9
5.7
23.9
41.0
53.8
9.5
5.7
24.0
43.9
53.2
9.8
5.8
23.9
44.8
52.3
8.8
5.7
24.2
46.8
51.2
8.6
5.6
24.8
46.8
54.1
8.4
5.6
25.0
44.1
53.5
8.0
5.2
24.9
43.8
53.0
8.0
5.2
25.0
43.8
52.4
8.1
5.2
25.2
47.1
51.6
7.9
5.3
25.4
48.9
51.1
8.1
5.2
26.0
51.3
50.3
8.5
5.2
26.5
50.1
1. These data also appear in the Board's G.7 (407) release. For address, see
inside front cover.
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
1.24
All
MAJOR N O N D E P O S I T F U N D S OF COMMERCIAL B A N K S 1
Monthly averages, billions of dollars
1988
1987
Source
Total nondeposit funds
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
166.8
166.9
177.3
177.7
176.3
176.3
173.8
176.1
177.4
178.2
178.9
179.2
176.7
179.2
174.2
175.1
181.5
180.7
191.5
191.3
190.7
187.0
187.5
183.7
167.1
167.2
165.0
165.4
164.7
164.8
165.9
168.3
162.2
163.1
169.8
170.1
173.6
176.1
177.4
178.2
179.5
178.7
181.6
181.4
181.7
178.1
176.5
172.7
-.3
12.3
11.6
7.9
15.2
9.1
3.1
-3.1
2.0
9.8
8.9
11.0
-17.7
64.5
46.8
-11.8
63.8
52.0
-14.7
67.7
53.0
-17.1
70.4
53.3
-14.0
69.5
55.5
-16.5
71.2
54.7
-20.2
72.9
52.7
-25.3
76.6
51.3
-22.2
72.9
50.7
-16.4
69.6
53.3
-16.0
69.4
53.4
-13.6
70.2
56.6
17.4
77.7
95.0
24.1
77.3
101.4
26.3
79.7
106.0
24.9
83.2
108.2
29.2
79.8
109.0
25.6
85.2
110.9'
23.3
87.3
110.6
22.1
88.6
110.7
24.2
88.3
112.4
26.2
89.9
116.0
25.0
93.6
118.5
24.6
94.0
118.7
105.2
105.3
107.4
107.8
107.6
107.6
107.0
109.3
106.5
107.4
108.9
109.3
107.7
110.3
108.2
109.1
112.0
111.2
114.9
114.7
117.7
114.1
114.8
21.8
21.7
24.7
30.4
22.0
21.0
20.2
22.0
394.0'
393.9'
396.4'
397.1'
400.5'
399.8'
MEMO
6 Domestically chartered banks' net positions
with own foreign branches,
not seasonally adjusted
7
Gross due from balances
8
Gross due to balances
9 Foreign-related institutions' net positions
with directly related institutions,
not seasonally adjusted 5
10
Gross due from balances
11
Gross due to balances
Security RP borrowings
12
Seasonally adjusted
13
Not seasonally adjusted
U . S . Treasury demand balances
14
Seasonally adjusted
15
Not seasonally adjusted
Time deposits, $100,000 or more 8
16
Seasonally adjusted
17
Not seasonally adjusted
28.5
21.6
24.9
25.5
34.2
30.7
35.7
25.8
26.1
22.4
18.6
24.9
22.6
28.2
24.9
22.3
372.3
371.8
373.0
373.2
380.5
380.4
387.0
387.0
389.2
389.3
389.1
390.1
394.4
394.7
396.1
398.2
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.
These data also appear in the Board's G.10 (411) release. For address, see
inside front cover.
2. Includes seasonally adjusted federal funds, RPs, and other borrowings from
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
111.0
406.7
403.9
business. This includes borrowings from Federal Reserve Banks and from foreign
banks, term federal funds, overdrawn due from bank balances, loan RPs, and
participations in pooled loans.
4. Averages of daily figures for member and nonmember 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 1988
1.25
A S S E T S A N D LIABILITIES OF COMMERCIAL B A N K I N G INSTITUTIONS
Last-Wednesday-of-Month Series 1
Billions of dollars
1987
1988
Account
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June r
July
2,374.8
501.7
313.8
187.9
19.5
1,853.6
157.4
1,696.2
560.7
564.1
325.3
246.0
2,402.4
503.8
316.0
187.9
19.6
1,878.9
172.9
1,706.1
559.7
571.7
326.7
248.0
2,389.9
508.0
317.3
190.7
20.3
1,861.6
162.0
1,699.7
561.1
577.4
326.9
234.3
2,430.5
514.4
321.4
193.1
16.9
1,899.2
172.1
1,727.2
576.4
586.3
332.4
232.1
2,416.5
516.0
323.7
192.2
18.2
1,882.3
160.9
1,721.4
565.4
589.3
330.8
235.8
2,424.1
515.4
323.6
191.8
21.9
1,886.9
162.8
1,724.1
570.4
592.7
330.4
230.6
2,444.6
518.3
324.6
193.7
20.3
1,906.0
161.0
1,745.0
576.9
600.0
332.7
235.4
2,462.9
520.3
328.1
192.1
19.6
1,923.0
161.6
1,761.5
584.1
605.9
335.9
235.6
2,469.0
522.5
330.0
192.6
20.3
1,926.2
154.0
1,772.1
588.7
613.9
336.3
233.2
2,508.7
519.8
326.8
192.9
22.1
1,966.8
166.6
1,800.2
600.3
621.3
339.3
239.3
2,503.3
520.8
328.3
192.4
23.9
1,958.6
160.2
1,798.4
594.7
626.6
340.4
236.7
223.8
32.9
24.5
81.6
223.5
38.3
25.0
79.0
215.2
33.8
24.0
76.1
232.5
36.2
28.5
79.9
209.7
33.3
25.8
70.7
203.3
32.8
25.1
66.8
207.9
32.1
24.8
74.1
210.8
32.2
25.4
76.4
197.0
26.0
25.4
71.6
218.2
34.4
26.5
77.2
213.7
30.7
25.9
75.8
32.7
52.1
32.3
48.9
32.9
48.4
36.6
51.4
31.3
48.6
30.0
48.5
31.6
45.3
30.6
46.2
29.5
44.6
31.9
48.3
31.6
49.8
A L L COMMERCIAL B A N K I N G
INSTITUTIONS 2
1
2
3
4
5
6
7
8
9
10
11
12
Loans and securities
Investment securities
U . S . government securities
Other
Trading account assets
Total loans
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Individual
All other
Total cash assets
Reserves with Federal Reserve Banks.
Cash in vault
Cash items in process of collection . . .
Demand balances at U . S . depository
institutions
Other cash assets
18
13
14
15
16
17
19
Other assets
193.6
186.3
187.5
184.0
177.7
178.1
189.0
185.2
182.0
189.1
182.7
20
Total assets/total liabilities and capital
2,792.2
2,812.2
2,792.6
2,847.1
2,803.9
2,805.5
2,841.5
2,859.0
2,848.0
2,916.0
2,899.6
21
22
23
24
25
26
27
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
1,972.4
612.4
535.3
824.7
416.3
224.7
178.8
1,971.2
598.1
531.7
841.4
435.7
225.5
179.8
1,974.1
592.0
531.1
851.0
420.1
218.9
179.5
2,009.1
623.3
528.0
857.9
426.2
231.5
180.4
1,969.0
576.2
531.7
861.1
446.1
208.1
180.7
1,975.0
567.5
535.6
871.8
444.2
205.3
181.0
2,004.1
587.6
539.7
876.8
446.3
211.1
180.0
2,007.2
595.0
536.0
876.2
456.3
214.1
181.4
2,004.6
578.1
542.0
884.4
448.7
211.8
182.9
2,038.3
602.3
544.5
891.6
478.1
215.2
184.5
2,045.8
597.3
545.3
903.2
456.9
213.3
183.6
327.7
329.9
331.7
332.4
337.7
340.8
340.1
342.8
345.7
343.5
345.9
193.5
193.5
196.6
198.9
196.5
196.5
198.5
197.1
197.2
198.4
198.8
2,195.4
475.9
302.9
173.0
19.5
1,700.0
125.0
1,575.0
470.2
554.0
325.0
225.8
2,218.6
478.7
305.7
173.0
19.6
1,720.3
133.3
1,587.0
470.6
561.9
326.4
228.1
2,213.8
482.6
306.4
176.2
20.3
1,711.0
130.5
1,580.4
472.0
567.3
326.6
214.6
2,238.5
488.3
311.0
177.3
16.9
1,733.3
135.3
1,598.0
479.4
575.0
332.1
211.6
2,232.9
488.0
312.1
175.9
18.2
1,726.6
131.4
1,595.2
472.7
577.9
330.5
214.1
2,237.8
487.6
312.2
175.4
21.9
1,728.3
133.4
1,595.0
475.6
580.3
330.1
209.0
2,255.8
490.4
313.1
177.2
20.3
1,745.1
132.2
1,612.9
480.7
587.3
332.4
212.5
2,272.0
493.8
316.8
177.0
19.6
1,758.6
129.0
1,629.7
487.2
593.0
335.6
213.9
2,277.3
495.2
317.7
177.6
20.3
1,761.8
125.5
1,636.3
488.8
600.5
336.0
211.0
2,303.8
492.4
314.9
177.5
22.1
1,789.3
133.5
1,655.8
492.5
607.9
338.9
216.5
2,306.6
492.8
315.7
177.0
23.9
1,789.9
131.2
1,658.7
490.9
613.6
340.1
214.2
204.8
30.9
24.4
81.0
207.8
36.5
24.9
78.4
199.3
31.5
24.0
75.7
214.9
35.1
28.4
79.5
192.1
31.7
25.7
70.2
184.4
30.5
25.1
66.3
191.7
30.1
24.7
73.6
194.3
30.8
25.4
75.9
180.8
23.6
25.4
71.1
199.4
32.9
26.4
76.6
194.1
29.5
25.9
75.2
30.8
37.7
30.6
37.3
31.4
36.7
34.7
37.3
29.7
34.8
28.4
34.0
30.0
33.4
29.0
33.3
27.8
32.9
30.1
33.4
29.7
33.8
134.2
130.0
123.7
127.2
118.9
121.4
MEMO
U . S . government securities (including
trading account)
2 9 Other securities (including trading account)
28
DOMESTICALLY C H A R T E R E D
COMMERCIAL B A N K S 3
30
31
32
33
34
35
36
37
38
39
40
41
Loans and securities
Investment securities
U.S. Treasury securities
Other
Trading account assets
Total loans
Interbank loans
Loans excluding interbank
Commercial and industrial
Real estate
Individual
All other
Total cash assets
Reserves with Federal Reserve Banks.
Cash in vault
Cash items in process of collection . . .
Demand balances at U.S. depository
institutions
Other cash assets
47
42
43
44
45
46
48
Other assets
126.8
125.1
121.7
129.4
124.0
49
Total assets/liabilities and capital
2,534.5
2,556.4
2,536.8
2,580.7
2,543.9
2,543.6
2,574.3
2,591.5
2,579.7
2,632.7
2,624.7
50
51
52
53
54
55
56
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
1,910.3
603.9
533.2
773.3
324.7
123.8
175.6
1,909.1
589.5
529.5
790.1
345.7
125.0
176.6
1,912.4
583.7
528.8
799.9
323.2
124.8
176.3
1,944.6
614.9
525.7
804.1
331.9
127.0
177.2
1,906.9
567.9
529.4
809.6
347.0
112.5
177.5
1,912.2
559.6
533.2
819.4
344.8
108.8
177.8
1,940.1
579.2
537.3
823.6
343.4
114.0
176.8
1,943.7
586.4
533.6
823.7
351.0
118.5
178.2
1,940.6
569.8
539.6
831.2
344.2
115.2
179.7
1,972.7
593.6
541.7
837.4
362.0
116.7
181.3
1,980.0
588.6
542.8
848.6
346.0
118.2
180.4
1. Back data are available from the Banking and Monetary Statistics section,
Board of Governors of the Federal Reserve System, Washington, D.C., 20551.
These data also appear in the Board's weekly H.8 (510) release.
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 banks include all member banks
and insured nonmember banks.
Weekly Reporting Commercial Banks
1.26
A19
A S S E T S A N D LIABILITIES OF LARGE W E E K L Y REPORTING COMMERCIAL B A N K S 1
Millions of dollars, Wednesday figures
1988
Account
1 Cash and balances due from depository institutions
2 Total loans, leases, and securities, net
June 1
June 8
133,443
103,512'
June 15
June 22
123,097
100,236
1,138,997' 1,123,307' 1,144,402' 1,124,669
June 29
July 6
July 13
July 20
July 27
117,852
110,500
105,055
103,025
1,128,652' 1,126,645
1,124,510
1,126,173
1,127,761
107,943
3 U.S. Treasury and government agency
4
Trading account
Investment account
6
Mortgage-backed securities 2
All other maturing in
7
One year or less
8
Over one through five years
9
Over five years
10 Other securities
11
Trading account
12
Investment account
13
States and political subdivisions, by maturity
14
One year or less
IS
Over one year
16
Other bonds, corporate stocks, and securities
17 Other trading account assets
131,985r
16,311
115,674'
41,817 r
133,957'
18,859
115,099'
41.85C
134,732'
21,246
113,486'
41,313'
131,568'
18,016
113,552'
41,888'
129,891'
16,677
113,214'
41,501'
129,170
16,945
112,225
41,591
129,312
16,386
112,926
41,836
130,605
17,232
113,372
42,409
130,874
17,535
113,340
42,299
17,136
47,183
9,538
73,788 r
1,719
72,069'
48,531
5,661
42,870
23,538'
3,262
16,588
47,131
9,530
73,336'
1,654
71,682'
48,275
5,633
42,642
23,407'
2,972
16,426
46,186
9,561
73,431'
1,929
71,502'
48,212
5,590
42,621
23,29c
3,418
16,176
45,988
9,499
72,873'
1,690
71,182'
48,138
5,541
42,598
23,044'
3,257
16,715
45,368
9,630
73,385'
1,939
71,445'
48,006
5,348
42,659
23,439'
3,474'
17,243
43,789
9,602
72,786
1,808
70,977
47,334
5,207
42,128
23,643
3,568
17,238
44,461
9,391
72,855
1,705
71,150
47,377
5,176
42,201
23,773
3,304
17,188
45,101
8,674
72,794
1,613
71,180
47,410
5,141
42,269
23,770
3,542
17,422
44,803
8,815
73,012
1,898
71,114
47,456
5,160
42,296
23,658
4,463
18 Federal funds sold 3
19
To commercial banks
70
To nonbank brokers and dealers in securities
71
To others
77 Other loans and leases, gross
73
Other loans, gross
Commercial and industrial
74
Bankers acceptances and commercial paper
76
All other
77
U.S. addressees
28
Non-U.S. addressees
85,346
52,608
21,695
11,044
886,018'
864,521'
299,289'
2,232
297,057'
294,446'
2,611
71,904
42,943
18,669
10,292
882,495'
860,715'
299,949'
2,206
297,744'
295,124'
2,619
86,870
53,762
22,456
10,651
887,253'
865,410'
300,578'
2,083
298,495'
295,930'
2,565
70,770
42,184
19,610
8,976
887,518'
865,589'
300,333'
2,111
298,221'
295,670'
2,552
74,583
47,640
18,249
8,694
888,317
866,348'
300,860'
2,158
298,702'
2%, 171'
2,531
68,276
43,678
16,769
7,829
893,433
871,324
301,902
2,180
299,722
297,200
2,522
70,904
44,984
17,644
8,276
888,626
866,300
298,801
1,994
296,806
294,280
2,526
69,914
43,363
18,065
8,486
889,896
867,453
299,447
2,000
297,446
294,925
2,521
71,024
43,799
18,185
9,040
888,844
866,423
299,344
2,009
297,334
294,699
2,635
79
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
277,449'
18,528'
258,921'
162,420'
50,464'
23,226'
4,055
23,184
13,737
5,715
31,006
2,235
22,205'
21,497'
4,901'
36,500
844,617'
126,495'
277,871'
18,647'
259,224'
162,491'
49,754'
23,307'
3,829
22,619
11,568
5,745
30,897
1,950
20,489'
21,780'
4,916'
36,442
841,137'
122,486'
278,928
18,780'
260,149'
162,48C
49,293'
22,753'
4,071
22,469
13,772
5,609
30,837
2,080
21,831'
21,844'
4,918'
36,384
845,952'
127,258'
279,803'
18,910'
260,893'
162,379'
49,964'
23,435'
4,198
22,330
12,856
5,672
30,793
1,978
21,812'
21,929'
4,941'
36,376
846,201
123,042
280,882'
19,042'
261,840'
162,397'
48,676'
22,173'
3,786
22,717
13,712
5,645'
30,759
1,982
21,435'
21,969'
4,913
36,086
847,318
128,183
281,306
19,086
262,220
162,510
51,392
22,694
5,264
23,433
13,497
5,695
30,414
1,975
22,634
22,109
4,846
35,742
852,845
128,254
282,629
19,199
263,430
162,531
50,716
23,251
4,667
22,798
12,460
5,706
30,385
1,948
21,122
22,326
4,850
35,641
848,135
122,754
282,868
19,270
263,598
162,855
51,202
24,071
4,669
22,461
11,827
5,623
30,235
1,971
21,426
22,443
4,866
35,712
849,318
124,485
283,663
19,367
264,297
162,296
50,609
24,212
4,103
22,294
11,994
5,566
30,352
1,866
20,732
22,421
4,897
35,559
848,388
123,014
1,364,778' 1,372,751
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the . United States
Banks in foreign countries
Nonbank depository and 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
47 Total assets
48 Demand deposits
49
Individuals, partnerships, and corporations
50
States and political subdivisions
51
U.S. government
52
Depository institutions in the United States
53
Banks in foreign countries
54
Foreign governments and official institutions
55
Certified and officers' checks
56 Transaction balances other than demand deposits
57 Nontransaction balances
58
Individuals, partnerships, and corporations
59
States and political subdivisions
60
U.S. government
61
Depository institutions in the United States
67.
Foreign governments, official institutions, and banks
63 Liabilities for borrowed money
64
Borrowings from Federal Reserve Banks
65
Treasury tax-and-loan notes
66
All other liabilities for borrowed money 5
67 Other liabilities and subordinated notes and debentures
68 Total liabilities
69 Residual (total assets minus total liabilities) 6
1,398,935' 1,349,305' 1,394,758' 1,347,947
268,245
205,929
7,331
1,536
32,132
7,719
892
12,705
73,306
596,663
555,922'
30.19C
1,068'
8,772'
710'
287,721
2,550
13,599
271,572
84,906'
226,567'
179,592
5,336
3,153
21,738'
6,283
732
9,733
73,295
598,320
557,433'
30,382'
1,056'
8,738'
711'
277,693
2,900
3,066
271,727
84,626'
1,310,841' 1,260,503
88,094
88,803
263,607
198,136
7,023
15,723
26,086
6,225
777
9,635
73,605
599,690
558,868'
30,373'
1,062'
8,627'
759'
283,767'
3,853
3,056'
276,857'
85,702'
222,352
175,839
6,463
2,785
20,939
6,988
687
8,650
71,019
601,289
560,713'
30,045'
1,071'
8,673'
789
282,480
1,800
26,044
254,636
82,502
1,306,371' 1,259,642
88,386
88,304
1,357,765
1,355,713
1,353,800
255,698
198,415
5,886
4,312
27,170
8,449
886
10,577
74,449
601,640
563,383
27,920
1,038
8,485
813
269,257
2,600
7,653
259,004
82,874
229,897
185,126
5,441
1,300
21,073
6,554
640
9,762
72,863
603,004
564,232
28,247
1,048
8,682
795
277,395
8,732
12,241
256,422
85,107
228,400
180,699
5,966
4,226
21,547
6,627
980
8,354
72,364
602,832
564,044
28,436
1,041
8,498
813
274,272
2,625
14,708
256,939
88,427
226,382
177,638
6,156
2,898
22,598
6,988
856
9,246
71,614
604,081
564,675
28,822
1,061
8,6%
826
273,604
2,815
16,059
254,729
89,084
1,276,350' 1,283,918
232,704
182,577
5,979
3,008
22,433
7,170
1,091
10,446
70,702
599,672
559,925'
29,213
1,080
8,660'
793
287,781'
1,675
25,580
260,526'
85,491
88,428
1,268,267
1,266,295
1,264,764
88,833
89,497
89,418
89,036
1,100,860
895,336
183,009
16,670
1,509
1,054
455
255,540
1,096,766
891,294
184,257
16,005
1,486
1,031
455
255,085
1,099,316
892,376
184,642
16,709
1,476
1,020
456
254,140
1,100,206
891,857
186,633
17,258
1,424
968
456
253,128
MEMO
70
71
77
73
74
75
76
77
Total loans and leases (gross) and investments adjusted 7 . . . 1,104,564' 1,098,415' 1,109,189' 1,100,366' 1,099,838'
888,149'
897,608'
893,088'
895,530'
892,669'
Total loans and leases (gross) adjusted
180,498'
182,329
182,688'
183,477'
184,693'
Time deposits in amounts of $100,000 or more
16,510
17,143
16,477
16,280
15,534
U.S. Treasury securities maturing in one year or less
1,522
1,474
1,468
1,403
1,441
Loans sold outright to affiliates—total
1,027
1,018
1,068
953
989
Commercial and industrial
447
449
454
450
452
Other
255,212
254,595
255,227
253,607
254,349
Nontransaction savings deposits (including MMDAs)
1. Beginning Jan. 6, 1988, the "Large bank" reporting group was revised
somewhat, eliminating some former reporters with less than $2 billion of assets
and adding some new reporters with assets greater than $3 billion.
2. Includes U.S. government-issued or guaranteed certificates of participation
in pools of residential mortgages.
3. Includes securities purchased under agreements to resell.
4. Includes allocated transfer risk reserve.
5. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
6. This is 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.
8. Loans sold are those sold outright to a bank's own foreign branches,
nonconsolidated nonbank affiliates of the bank, the bank's holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
A20 DomesticNonfinancialStatistics • October 1988
1.28
A S S E T S A N D LIABILITIES OF L A R G E W E E K L Y REPORTING COMMERCIAL B A N K S
IN N E W YORK CITY 1
Millions of dollars, Wednesday figures
1988
Account
June 1
1 Cash balances due from depository institutions
2 Total loans, leases and securities, net 2
Securities
3 U . S . Treasury and government agency
4
Trading account 3
Investment account
5
Mortgage-backed securities 4
6
All other maturing in
One year or less
7
8
Over one through five years
9
Over five years
10 Other securities
11
Trading account 3
12
Investment account
States and political subdivisions, by maturity
13
One year or less
14
15
Over one year
16
Other bonds, corporate stocks, and securities
17 Other trading account assets
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Loans and leases
Federal funds sold 5
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans and leases, gross
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
Revolving, home equity
All other
To individuals for personal expenditures
T o depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank 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 7
47 Total assets
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
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, NOW, Super NOW, telephone transfers)
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 from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money 8
Other liabilities and subordinated notes and debentures
68 ToUl liabilities
69 Residual (total assets minus total liabilities) 9
June 8
June 15
June 22
June 29
July 6
July 13
July 20
July 27
35,082
25,185
33,809
21,791
27,325
26,919
27,251
24,432
22,474
226,149
215,179
228,243
218,686
218,753
215,109
218,565
218,904
217,776
0
0
14,856
5,520
0
0
14,882
5,513
0
0
14,818
5,512
0
0
14,747
5,453
0
0
14,702
5,431
0
0
14,586
5,509
0
0
14,638
5,748
0
0
14,771
5,724
0
0
14,785
5,669
2,414
4,750
2,171
0
0
16,801
12,950
1,002
11,947
3,852
0
2,385
4,809
2,175
0
0
16,802
12,949
996
11,953
3,853
0
2,325
4,839
2,141
0
0
16,798
12,953
986
11,967
3,846
0
2,315
4,838
2,141
0
0
16,679
12,937
979
11,958
3,742
0
2,311
4,811
2,149
0
0
16,444
12,866
866
12,000
3,578
0
2,220
4,678
2,180
0
0
16,304
12,620
907
11,713
3,684
0
2,187
4,747
1,956
0
0
16,484
12,713
925
11,788
3,771
0
2,187
4,816
2,044
0
0
16,488
12,739
929
11,811
3,748
0
2,285
4,816
2,014
0
0
16,529
12,774
930
11,844
3,756
0
38,139
16,984
13,026
8,129
171,689
166,720
57,161
487
56,674
56,204
470
46,666
2,937
43,728
21,529
21,247
11,993
2,512
6,742
5,893
289
6,904
733
6,297
4,969
1,520
13,817
156,352
60,885
30,357
12,099
10,411
7,846
168,464
163,238
57,189
454
56,735
56,302
433
46,767
2,950
43,818
21,523
20,670
12,210
2,222
6,238
3,935
291
6,952
481
5,429
5,226
1,532
13,794
153,137
58,708
39,542
18,374
13,467
7,701
172,414
167,159
58,122
431
57,691
57,284
407
46,670
2,966
43,703
21,491
21,010
12,027
2,544
6,439
5,717
302
6,886
656
6,306
5,255
1,537
13,793
157,085
61,415
30,766
13,951
10,485
6,330
171,832
166,557
57,548
422
57,126
56,730
396
46,%2
2,980
43,982
21,302
22,027
12,896
2,763
6,368
4,556
298
6,866
575
6,422
5,275
1,546
13,791
156,494
56,621
32,545
16,573
9,730
6,242
170,391
165,110
57,389
446
56,943
56,515
428
47,041
2,995
44,046
20,928
20,730
11,944
2,247
6,540
5,480
295
6,836
607
5,804
5,281
1,564
13,765
155,062
59,110 r
26,762
12,495
8,918
5,349
172,531
167,214
57,634
539
57,095
56,689
406
47,265
3,008
44,257
20,867
22,506
12,676
3,352
6,478
5,322
290
6,763
525
6,042
5,317
1,501
13,574
157,456
59,052
31,628
15,985
10,015
5,628
170,845
165,350
57,103
461
56,642
56,226
417
47,523
3,022
44,501
20,804
21,433
12,354
2,818
6,261
4,958
299
6,754
627
5,848
5,495
1,516
13,514
155,815
54,830
31,641
15,497
10,529
5,615
171,073
165,567
57,952
445
57,507
57,078
430
47,359
3,036
44,322
20,910
21,328
12,124
2,850
6,354
4,490
206
6,716
653
5,953
5,506
1,535
13,533
156,004
56,038
31,313
14,538
10,748
6,026
170,159
164,685
57,779
484
57,294
56,760
535
47,680
3,055
44,625
20,945
20,448
12,003
2,163
6,282
4,628
203
6,743
559
5,701
5,474
1,553
13,456
155,150
57,589
322,116
299,072
323,466
297,099
305,188 r
301,079
300,646
299,374
297,839
72,300
47,495
1,109
207
10,277
6,448
753
6,011
55,003
37,919
579
646
5,520
5,057
584
4,697
70,948
47,320
1,226
4,624
8,026
5,049
625
4.078
54,348
37,910
631
483
5,439
5,761
505
3,618
59,105
40,222
775
560
6,078
5,934
858
4,679
65,389
44,368
791
846
6,802
7,112
686
4,783
55,557
39,221
638
168
5,024
5,337
478
4,689
56,398
39,513
917
751
5,743
5,365
834
3,275
55,264
37,351
695
541
6,214
5,787
711
3,965
8,873
106,195
97,532
6,667
41
1,695
261
76,690
0
4,098
72,592
32,541
8,812
105,232
96,490
6,702
30
1,751
258
72,151
0
677
71,474
31,988
8,952
105,894
%,922
6,851
33
1,816
272
78,023
725
609
76,689
33,992
8,6%
106,290
97,125
7,001
42
1,817
303
72,718
0
7,526
65,192
29,545
8,644
105,347
%,600
6,657
42
1,740
307
73,865'
0
6,879
66,986'
32,797
8,920
106,055
97,584
6,304
41
1,808
318
65,354
0
1,480
63,874
29,849
8,788
105,714
%,843
6,668
40
1,858
303
72,389
3,815
3,112
65,462
32,281
8,681
105,829
97,038
6,720
34
1,734
302
67,731
0
4,221
63,510
34,890
8,579
106,336
97,240
6,868
37
1,877
313
67,496
0
5,083
62,413
34,737
296,600
273,186
297,810
271,5%
279,758'
275,567
274,728
273,529
272,412
25,516
25,886
25,656
25,502
25,430
25,512
25,918
25,845
25,427
212,508
180,851
37,346
3,620
206,1%
174,512
37,334
4,262
213,172
181,555
37,350
3,700
207,178
175,752
37,767
3,158
205,565
174,419
37,031
3,302
205,014
174,123
37,485
3,472
205,256
174,134
37,681
2,831
206,352
175,093
37,844
3,222
206,245
174,931
38,751
3,774
MEMO
70
71
72
73
Total loans and leases (gross) and investments adjusted 2,10
Total loans and leases (gross) adjusted 10
Time deposits in amounts of $100,000 or more
U . S . Treasury securities maturing in one year or less
1. These data also appear in the Board's H.4.2 (504) release. For address, see
inside front cover.
2. Excludes trading account securities.
3. Not available due to confidentiality.
4. Includes U.S. government-issued or guaranteed certificates of participation
in pools of residential mortgages.
5. Includes securities purchased under agreements to resell.
6. Includes allocated transfer risk reserve.
http://fraser.stlouisfed.org/
Federal Reserve Bank of St. Louis
7. Includes trading account securities.
8. Includes federal funds purchased and securities sold under agreements to
repurchase.
9. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
10. Exclusive of loans and federal funds transactions with domestic commercial banks.
Weekly Reporting Commercial Banks
1.30
L A R G E W E E K L Y REPORTING U . S . B R A N C H E S A N D A G E N C I E S OF F O R E I G N B A N K S 1
Liabilities
A21
Assets and
Millions of dollars, Wednesday figures
1988
Account
1 Cash and due from depository institutions . . .
2 Total loans and securities
3 U . S . Treasury and government agency
securities
4 Other securities
5 Federal funds sold 2
6
To commercial banks in the United States .
7
T o others
8 Other loans, gross
9
Commercial and industrial
10
Bankers acceptances and commercial
paper
11
All other
17
U . S . addressees
n
Non-U.S. addressees
14
To financial institutions
15
Commercial banks in the United States..
16
Banks in foreign countries
Nonbank financial institutions
17
18
To foreign governments and ofiScial
institutions
19
For purchasing and carrying securities
?0
All other
21 Other assets (claims on nonrelated parties) . .
72 Net due from related institutions
23 Total assets
24
Deposits or credit balances due to other
than directly related institutions
25
Transaction accounts and credit balances 3 .
26
Individuals, partnerships, and
corporations
Other
71
28
Nontransaction accounts
Individuals, partnerships, and
29
corporations
30
Other
31
Borrowings from other than directly
related institutions
32
Federal funds purchased
33
From commercial banks in the
United States
34
From others
Other liabilities for borrowed money
35
36
T o commercial banks in the
United States
37
To others
38 Other liabilities to nonrelated parties
39 Net due to related institutions
40 Total liabilities
June 1
June 8
June 15
June 22
June 29
July 6
July 13
July 20
July 27
11,174
105,741
10,467
105,264
11,571
108,728
10,705
107,658
11,604
111,058'
11,219
110,308
11,720
109,191
10,893
107,888
11,441
106,775
7,780
7,605
8,469
5,546
2,923
81,886
55,094
7,892
7,605
7,610
5,137
2,473
82,157
55,245
8,352
7,609
10,842
7,645
3,197
81,926
54,911
8,234
7,609
7,672
4,857
2,815
84,144
56,536
8,102
7,595
9,764
6,827
2,937
85,598'
57,'733'
7,831
7,566
8,113
5,826
2,286
86,798
58,562
8,000
7,561
8,691
6,166
2,525
84,939
57,150
8,282
7,570
8,570
6,319
2,251
83,466
56,149
8,562
7,496
8,609
6,428
2,182
82,107
55,548
1,678
53,415
51,398
2,017
15,052
10,422'
1,146
3,484'
1,641
53,604
51,590
2,014
15,161
10,860r
1,180
3,121'
1,604
53,306
51,317
1,990
14,834
10,494'
1,037
3,303'
1,707
54,829
52,794
2,034
15,244
10,928'
1,127
3,189'
1,574
56,159'
54,124'
2,034'
15,2%
11,340'
918
3,039'
1,712
56,851
54,799
2,052
15,845
11,465
991
3,389
1,702
55,448
53,374
2,074
15,662
11,307
1,039
3,316
1,509
54,640
52,456
2,184
15,023
10,772
999
3,252
1,609
53,938
51,955
1,983
14,834
10,731
1,006
3,097
596
1,382
9,763
31,366
15,942
164,223
585
1,433
9,732
31,231
16,704
163,666
586
1,622
9,972
31,418
17,879
169,597
558
1,811
9,994
31,382
15,546
165,291
562
2,100
9,907
32,335
15,269
170,266'
590
1,851
9,950
32,292
16,366
170,185
574
1,690
9,862
31,929
16,804
169,644
533
1,644
10,117
32,361
16,317
167,460
640
1,347
9,739
31,383
15,146
164,745
42,217
3,758
42,566
3,616
42,858
3,827
42,906
3,852
43,122
3,680
42,793
4,167
42,689
3,731
42,575
3,601
42,903
3,591
2,322
1,435
38,459
2,312
1,304
38,950
2,448
1,379
39,031
2,261
1,591
39,054
2,134
1,546
39,442
2,481
1,686
38,626
2,288
1,443
38,959
2,324
1,277
38,974
2,320
1,271
39,311
31,187
7,272
31,833
7,116
31,924
7,107
31,715
7,339
32,268
7,174
31,551
7,075
31,693
7,266
31,572
7,402
31,718
7,593
66,542
32,883
65,965
32,712
70,988
37,834
66,816
31,781
70,311'
32,614
69,383
32,896
70,599
33,842
69,177
31,121
66,194
27,896
16,328
16,556
33,659
16,788
15,924
33,253
20,807
17,027
33,154
15,561
16,220
35,035
16,053
16,562
37,696'
19,407
13,489
36,486
16,837
17,005
36,757
15,544
15,577
38,056
13,900
13,996
38,298
25,089
8,570
32,676
22,787
164,223
24,184
9,069
32,926
22,209
163,666
23,364
9,791
33,104
22,647
169,597
25,236
9,799
32,969
22,600
165,291
26,596'
11,100
33,787
23,046
170,266'
25,959
10,528
33,624
24,386
170,185
26,861
9,896
33,395
22,960
169,644
27,686
10,370
33,945
21,763
167,460
27,871
10,427
33,029
22,619
164,745
92,892'
77,195'
93,017
77,619
91,718
76,157
90,797
74,944
89,616
73,558
MEMO
41 Total loans (gross) and securities adjusted 6 ..
42 Total loans (gross) adjusted 6
89,773'
74,388'
89,267'
73,770'
90,589'
74,629'
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. These data also appear in the
Board's H.4.2 (504) release. For address, see inside front cover.
2. Includes securities purchased under agreements to resell.
91,874'
76,031'
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 funds sold to commercial banks in the
United States.
A22 DomesticNonfinancialStatistics • October 1988
1.31
GROSS D E M A N D DEPOSITS Individuals, Partnerships, and Corporations 1
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
Type of holder
1987
1983
Dec.
1984
Dec.
1988
1986
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
1 AH holders—Individuals, partnerships, and
corporations
293.5
302.7
321.0
363.6
335.9
340.2
339.0
343.5
328.6
n.a.
2
3
4
5
6
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
41.4
202.0
91.1
3.3
25.8
35.9
183.0
88.9
2.9
25.2
36.6
187.2
90.1
3.2
23.1
36.5
188.2
88.7
3.2
22.4
36.3
191.9
90.0
3.4
21.9
33.9
184.1
86.9
3.5
20.3
n.a.
n.a.
n.a.
n.a.
n.a.
Financial business
Nonfinancial business
Consumer
Foreign
Other
Weekly reporting banks
1987
1983
Dec.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
1984,
Dec. 2
1988
1986
Dec.
Mar.
June
Sept.
Dec.
Mar. 5
June
146.2
157.1
168.6
195.1
178.1
179.3
179.1
183.8
181.8
191.5
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
32.5
106.4
37.5
3.3
15.4
28.7
94.4
36.8
2.8
15.5
29.3
94.8
37.5
3.1
14.6
29.3
96.0
37.2
3.1
13.5
28.6
100.0
39.1
3.3
12.7
27.0
98.2
41.7
3.4
11.4
29.9
103.1
42.3
3.3
13.0
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 December 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
thrift institutions. Historical data have not been revised. The 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.
9
D'e 5<
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 .
5. Beginning March 1988, 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 December 1987 based on the new weekly reporting panel are: financial
business, 29.4; nonfinancial business, 105.1; consumer, 41.1; foreign, 3.4; other,
13.1.
Financial Markets
1.32
A23
COMMERCIAL PAPER A N D B A N K E R S D O L L A R ACCEPTANCES O U T S T A N D I N G
Millions o f dollars, e n d o f period
1988
1983
Dec.
Instrument
1984
Dec.
1985
Dec.
1986
Dec.
1987
Dec.
Jan. 1
Feb.
Mar.
Apr.
May
June
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
Financial companies 2
Dealer-placed
paper
Total
Bank-related (not seasonally
adjusted)
Directly placed
paper4
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies 5
187,658
237,586
298,779
329,991
357,129
380,339
388,893
391,305
406,484
414,312
417,788
44,455
56,485
78,443
101,072
101,958
120,930
125,914
128,680
133,946
137,838
142,322
2,441
2,035
1,602
2,265
1,428
1,694
1,724
1,371
1,093
1,422
1,448
97,042
110,543
135,320
151,820
173,939
175,467
174,595
173,316
180,119
185,876
184,658
35,566
46,161
42,105
70,558
44,778
85,016
40,860
77,099
43,173
81,232
45,425
83,942
43,987
88,384
43,681
89,309
45,703
92,419
47,719
90,598
45,294
90,808
Bankers dollar acceptances (not seasonally adjusted) 6
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 from United States
16 All other
78,309
78,364
68,413
64,974
70,565
63,152 r
62,419
63,454
64,111
63,332
64,259
9,355
8,125
1,230
9,811
8,621
1,191
11,197
9,471
1,726
13,423
11,707
1,716
10,943
9,464
1,479
8,646'
7,804 r
843
9,629
8,561
1,067
10,243
8,825
1,417
10,295
8,929
1,366
9,342
8,518
825
9,614
8,741
873
418
729
67,807
0
671
67,881
0
937
56,279
0
1,317
50,234
0
965
58,658
0
831
53,674 r
0
833
51,958
0
795
52,417
0
803
53,013
0
1,050
52,940
0
1,273
53,371
15,649
16,880
45,781
17,845
16,305
44,214
15,147
13,204
40,062
14,670
12,960
37,344
16,483
15,227
38,855
14,469'
14,054
34,629'
14,354
13,891
34,173
14,575
13,899
34,980
14,735'
14,724'
34,651'
14,044
14,520
34,768
14,244
14,606
35,410
1. Data reflect a break in series resulting from additions to the reporting
panel and from the correction of a misclassification that had understated dealerplaced financial and overstated nonfinancial outstandings.
2. Institutions engaged primarily in activities such as, but not limited to,
commercial savings, and mortgage banking; sales, personal, and mortgage financing; factoring, finance leasing, and other business lending; insurance underwriting; and other investment activities.
3. Includes all financial company paper sold by dealers in the open market.
4. As reported by financial companies that place their paper directly with
investors.
1.33
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
6. Beginning January 1988, the number of respondents in the bankers acceptance survey were reduced from 155 to 111 institutions—those with $100 million
or more in total acceptances. The new reporting group accounts for over 90
percent of total acceptances activity.
PRIME R A T E C H A R G E D BY B A N K S on Short-Term Business Loans
Percent per year
Effective Date
10.50
10.00
9.50
9.00
8.50
8.00
7.50
Rate
1
1
15
Sept. 4
Oct. 7
??
Nov. 5
7.75
8.00
8.25
8.75
9.25
9.00
8.75
1988 —Feb. ?
May 11
July 14
Aug. 11
8.50
9.00
9.50
1987 —Apr.
May
10.00
NOTE. These data also appear in the Board's H.15 (519) release. For address,
see inside front cover.
Month
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.
May
June
July
Aug.
Sept.
Oct..
9.50
9.50
9.10
8.83
8.50
8.50
8.16
7.90
7.50
7.50
Month
1986 — N o v .
Dec.
1987 —Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1988 —Jan.
Feb.
Mar.
Apr.
May
June
July,
A24 DomesticNonfinancialStatistics • October 1988
1.35
I N T E R E S T R A T E S Money and Capital Markets
Averages, percent per year; weekly and monthly figures are averages of business day data unless otherwise noted.
1988, week ending
1988
Instrument
1985
1986
1987
Apr.
May
June
July
July 1
July 8
July 15
July 22
July 29
MONEY MARKET RATES
1 Federal funds 1 ' 2
2 Discount window borrowing 1 ' '
Commercial paper '
3
1-month
3-month
4
5
6-month
Finance paper, directly placed '
1-month
6
3-month
7
6-month
8
Bankers acceptances •
9
3-month
6-month
..
10
Certificates of deposit, secondary market
1-month
11
3-month
12
13
6-month
14 Eurodollar deposits. 3-month
U . S . Treasury bills 5
Secondary market 9
15
3-month
6-month
16
1-year
17
Auction average
3-month
18
19
6-month
1-year
20
8.10
7.69
6.80
6.32
6.66
5.66
6.87
6.00
7.09
6.00
7.51
6.00
7.75
6.00
7.63
6.00
7.81
6.00
7.59
6.00
7.83
6.00
7.80
6.00
7.93
7.95
8.00
6.61
6.49
6.39
6.74
6.82
6.85
6.80
6.86
6.92
7.07
7.19
7.31
7.41
7.49
7.53
7.72
7.82
7.90
7.56
7.59
7.60
7.60
7.64
7.67
7.68
7.79
7.88
7.79
7.91
8.01
7.82
7.95
8.07
7.90
7.77
7.74
6.57
6.38
6.31
6.61
6.54
6.37
6.71
6.67
6.51
6.96
7.00
6.75
7.23
7.25
7.01
7.62
7.55
7.19
7.43
7.32
7.08
7.48
7.37
7.09
7.61
7.55
7.19
7.69
7.64
7.26
7.76
7.70
7.28
7.91
7.95
6.38
6.28
6.75
6.78
6.79
6.86
7.12
7.25
7.38
7.41
7.77
7.85
7.48
7.48
7.59
7.62
7.76
7.84
7.86
7.94
7.92
8.02
7.96
8.04
8.24
8.28
6.61
6.51
6.50
6.71
6.75
6.87
7.01
7.06
6.80
6.92
7.14
7.05
7.04
7.24
7.52
7.40
7.41
7.51
7.69
7.61
7.73
7.94
8.18
8.09
7.54
7.62
7.76
7.69
7.64
7.76
7.92
7.79
7.69
7.91
8.17
8.00
7.78
8.03
8.30
8.18
7.82
8.08
8.38
8.24
7.47
7.65
7.81
5.97
6.02
6.07
5.78
6.03
6.33
5.91
6.21
6.56
6.26
6.56
6.90
6.46
6.71
6.99
6.73
6.99
7.22
6.57
6.75
7.01
6.58
6.78
7.11
6.70
7.00
7.25
6.72
7.07
7.25
6.93
7.12
7.31
7.47
7.64
7.80
5.98
6.03
6.18
5.82
6.05
6.33
5.92
6.21
6.57
6.27
6.53
6.74
6.50
6.76
7.08
6.73
6.97
7.04
6.59
6.75
n.a.
6.57
6.71
7.04
6.72
6.99
n.a.
6.76
7.09
n.a.
6.88
7.09
n.a.
8.42
9.27
9.64
10.12
10.50
10.62
10.97
10.79
6.45
6.86
7.06
7.30
7.54
7.67
7.85
7.78
6.77
7.42
7.68
7.94
8.23
8.39
n.a.
8.59
7.01
7.59
7.83
8.19
8.52
8.72
n.a.
8.95
7.40
8.00
8.24
8.58
8.89
9.09
n.a.
9.23
7.49
8.03
8.22
8.49
8.78
8.92
n.a.
9.00
7.75
8.28
8.44
8.66
8.91
9.06
n.a.
9.14
7.52
8.04
8.21
8.46
8.73
8.86
n.a.
8.90
7.62
8.12
8.27
8.51
8.80
8.93
n.a.
8.99
7.79
8.29
8.45
8.67
8.94
9.08
n.a.
9.14
7.79
8.34
8.51
8.72
8.97
9.13
n.a.
9.23
7.85
8.39
8.56
8.74
8.97
9.12
n.a.
9.22
10.75
8.14
8.64
8.91
9.24
9.04
9.20
8.99
9.09
9.23
9.27
9.24
8.60
9.58
9.11
6.95
7.76
7.32
7.14
8.17
7.64
7.33
7.82
7.81
7.56
7.90
7.90
7.51
7.86
7.78
7.50
7.86
7.76
7.50
8.00
7.74
7.45
7.85
7.75
7.51
7.90
7.77
7.55
7.90
7.77
7.48
7.80
7.76
12.05
11.37
11.82
12.28
12.72
9.71
9.02
9.47
9.95
10.39
9.91
9.38
9.68
9.99
10.58
10.15
9.67
9.86
10.17
10.90
10.37
9.90
10.10
10.41
11.04
10.36
9.86
10.13
10.42
11.00
10.47
9.96
10.26
10.55
11.11
10.31
9.82
10.09
10.37
10.97
10.37
9.84
10.17
10.43
11.02
10.46
9.95
10.24
10.53
11.11
10.52
10.03
10.31
10.61
11.14
10.55
10.03
10.34
10.63
11.20
12.06
9.61
9.95
10.23
10.61
10.41
10.40
10.25
10.39
10.44
10.44
10.41
10.49
4.25
8.76
3.48
8.37
3.08
9.19
3.57
9.25
3.80
9.32
3.58
9.34
3.65
9.38
3.60
9.41
3.59
9.29
3.63
9.30
3.63
9.36
3.75
CAPITAL MARKET RATES
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
U.S. Treasury notes and bonds 1 1
Constant maturities
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite 1 3
Over 10 years (long-term)
State and local notes and bonds
Moody's series
Aaa
Baa
Bond Buyer series
Corporate bonds
Seasoned issues 1 6
All industries
Aaa
Aa
A
Baa
A-rated, recently-offered utility
bonds 1 7
MEMO: Dividend/price ratio 18
39
Preferred stocks
Common stocks
40
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 N e w 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 November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and
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 "flower" 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 Thursday.
16. Daily figures from Moody'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 of ten 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 A23
1.36
STOCK MARKET
Selected Statistics
1987
Indicator
1985
1986
-
1988
1987
Nov.
Dec.
Jan.
Mar.
Feb.
Apr.
May
June
July
Prices and trading (averages of daily 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 & Poor's Corporation
(1941-43 = 10)'
7 American Stock Exchange
(Aug. 31, 1973 = 5 0 ?
Volume of trading (thousands
8 N e w York Stock Exchange
9 American Stock Exchange
of
108.09
123.79
104.11
56.75
114.21
136.00
155.85
119.87
71.36
147.19
161.70
195.31
140.39
74.29
146.48
137.21
163.42
117.57
69.86
118.30
134.88
162.19
115.85
67.39
111.47
140.55
168.47
121.20
70.01
119.40
145.13
173.44
126.09
72.89
124.36
149.88
181.57
135.15
71.16
125.27
148.46
181.01
133.40
69.35
121.66
144.99
176.02
127.63
68.66
120.35
152.72
184.92
136.02
72.25
129.04
152.12
184.09
136.49
71.49
129.99
186.84
236.34
286.83
245.01
240.96
250.48
258.13
265.74
262.61
256.12
270.68
269.05
229.10
264.38
316.61
249.42
248.52
267.29
276.54
295.78
300.43
296.30
306.13
307.48
109,191
8,355
141,385
11,846
188,647
13,832
179,513
11,268
178,517
13,422
174,755
9,853
184,688
9,961
176,189
12,442
162,518
10,706
153,906
8,931
195,772
11,348
166,916
9,938
shares)
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers 3
Free credit balances
11 Margin-account
12 Cash-account
at
28,390
36,840
31,990
34,180
31,990
31,320
31,990
32,660
33,270
33,070
32,300
31,770
2,715
12,840
4,880
19,000
4,750
15,640
6,700
15,360
4,750
15,640
4,675
15,270
4,555
14,695
4,615
14,355
4,395
13,965
4,380
14,150
4,580
14,460
4,485
14,340
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
Nov. 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 SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26 DomesticNonfinancialStatistics • October 1988
1.37
S E L E C T E D F I N A N C I A L INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1987
Account
1985
1988
1986
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr/
May
1,284,893
FSLIC-insured institutions
1 Assets
2 Mortgages
3 Mortgage-backed securities
4
Contra-assets to mortgage assets'
5 Commercial loans
6 Consumer loans
7 Contra-assets to nonmortgage loans2
8 Cash and investment
securities
9 Other 3
1,070,012
1,163,851
1,216,995
1,218,829
1,261,438
1,274,318
690,717
697,451
704,815
708,433
713,488'
717,933'
721,593'
722,945'
723,852'
725,511
728,880
733,522
115,525
158,193
186,101
191,829
197,131'
200,039'
201,828'
201,604'
197,676'
197,586
202,252
204,751
45,219
17,424
45,809
41,799
23,683
51,622
42,023
23,174
56,079
42,438
23,300
56,118
42,182'
23,256
56,548
41,396
23,294
57,465
42,344'
23,163'
57,902'
41,269'
23,530
58,336'
40,812'
23,333'
58,681'
41,247
24,125
58,399
39,293
24,349
59,114
39,715
24,308
60,240
2,521
3,041
3,242
3,442
143,538
104,739
164,844
112,898
170,071
122,020
164,034
120,995
10 Liabilities and net worth . 1,070,012
1,163,851
1,216,995
1,218,829
890,664
196,929
100,025
96,904
23,975
52,282
904,441
232,332
104,191
128,141
28,170
52,052
908,907
234,941
106,250
128,691
24,599
50,382
11
12
13
14
15
16
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
843,932
157,666
84,390
73,276
21,756
46,657
1,239,883' 1,246,983' 1,250,855' 1,254,785' 1,257,367'
3,373
3,430
3,578'
3,524'
3,630
3,510
3,402
169,937'
123,291'
174,075
124,085'
176,461
124,233
178,150
124,375
179,729
125,460
1,239,883' 1,246,983' 1,250,855' 1,254,785' 1,257,367'
1,261,438
1,274,318
1,284,893
958,470
237,467
112,388
125,079
22,489
43,012
962,250
244,762
113,029
131,733
24,597
42,708
963,694
250,462
114,994
135,468
27,191
43,548
173,121'
121,894'
916,843
246,370'
109,736
136,634'
27,098'
49,573'
170,713'
122,367'
922,340
247,461'
111,283
136,178'
27,404'
49,777'
3,467
169,717'
122,462
932,616'
249,917'
116,363
133,554'
21,941'
46,382'
939,079
245,954'
114,053
131,901'
23,871'
45,881'
946,790
239,319'
112,725
126,594'
25,816'
45,442'
FSLIC-insured federal savings banks
131,868
210,562
272,134
272,834
276,560
279,221
284,272
284,303
295,952
307,758
311,424
323,018
18 Mortgages
19 Mortgage-backed securi
ties
20
Contra-assets to mort
gage assets 1
21 Commercial loans
22 Consumer loans
23 Contra-assets to nonmortgage l o a n r . . .
24 Finance leases plus
interest
25 Cash and investment . .
26 Other
72,355
113,638
156,048
156,705
158,507
161,014
164,013
163,915'
171,592'
178,142
180,464
186,681
15,676
29,766
43,532
44,421
45,117
45,237
45,826
46,171
46,687
48,004
49,231
51,247
13,180
8,853
6,213
16,549
8,700
6,188
16,582
8,787
6,275
16,563
8,809
6,540
17,343
9,100'
6,504
17,696
8,909
6,496
17,649
9,175
6,971
18,795
9,458
7,503
19,137
9,344
7,663
19,610
9,720
7,774
20,417
704
702
690
712
678
698
737
800
724
708
11,723
19,034
577
34,267
24,506
552
33,589
24,199
550
34,902
24,122
566
33,965
24,078
591
35,347
24,070
604
34,645
24,428
584
35,718
25,516
611
38,199
26,418
615
38,288
25,822
652
39,917
26,757
27 Liabilities and net worth
131,868
210,562
272,134
272,834
276,560
279,221
284,272
284,303
295,952
307,758
311,424
323,018
28
29
30
31
32
33
103,462
19,323
10,510
8,813
2,732
6,351
157,872
37,329
19,897
17,432
4,263
11,098
194,853
55,660
25,546
30,114
6,450
15,172
195,213
56,549
26,287
30,262
5,631
15,444
197,298
57,551
27,350
30,201
6,293
15,416
199,114
58,277
27,947
30,330
6,350
15,481
203,196
60,716
29,617
31,099
5,324
15,036
204,329
59,206
28,280
30,926
5,838
14,930
214,169
59,704
29,169
30,535
6,602
15,478
224,168
61,553
30,456
31,097
6,084
15,963
226,469
62,555
30,075
32,480
6,459
16,098
232,582
66,805
31,682
35,123
7,188
16,598
17 Assets
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
8,361
Savings banks
34 Assets
35
36
Loans
Mortgage
Other
Securities
U.S. government
Mortgage-backed
securities
State and local
government
Corporate and other .
Cash
Other assets
216,776
236,866
249,888
251,472
255,989
260,600
259,643
258,628
259,224
262,100
262,269
264,507
110,448
30,876
118,323
35,167
130,721
36,793
133,298
36,134
135,317
36,471
137,044
37,189
138,494
33,871
137,858
35,095
139,108
35,752
140,835
36,476
139,691
37,471
143,235
35,927
13,111
14,209
13,720
13,122
13,817
15,694
13,510
12,776
12,269
12,225
13,203
12,490
19,481
25,836
28,913
29,655
30,202
31,144
32,772
32,241
32,423
32,272
31,072
31,861
2,323
21,199
6,225
13,113
2,185
20,459
6,894
13,793
2,038
18,573
4,823
14,307
2,023
18,431
4,484
14,325
2,034
18,062
5,529
14,557
2,046
17,583
5,063
14,837
2,003
18,772
5,864
14,357
1,994
18,780
4,841
15,043
2,053
18,271
5,002
14,346
2,033
18,336
4,881
15,042
2,013
18,549
5,237
15,033
1,933
18,298
5,383
15,380
43 Liabilities
216,776
236,866
249,888
251,472
255,989
260,600
259,643
258,628
259,224
262,100
262,269
264,507
44 Deposits
Regular
45
Ordinary savings .
46
47
Time
Other
48
49 Other liabilities
50 General reserve
accounts
185,972
181,921
33,018
103,311
4,051
17,414
192,194
186,345
37,717
100,809
5,849
25,274
195,895
190,335
41,767
105,133
5,560
32,467
196,824
191,376
41,773
107,063
5,448
32,827
199,336
193,777
42,045
109,486
5,559
34,226
202,030
196,724
42,493
112,231
5,306
36,167
201,497
196,037
41,959
112,429
5,460
35,720
199,545
194,322
41,047
112,781
5,223
36,836
200,391
195,336
41,234
113,751
5,055
35,787
203,407
198,273
41,867
115,529
5,134
35,737
203,273
197,801
41,741
115,887
5,472
35,827
205,692
200,098
42,403
117,297
5,594
35,836
12,823
18,105
20,471
20,407
20,365
21,133
20,633
20,514
20,894
21,024
21,109
21,179
37
38
39
40
41
42
Financial Markets A23
1.37—Continued
1987
Account
1985
1988
1986
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr/
May
169,111
169,175
172,456
109,797
59,314
109,913
59,262
112,595
59,855
101,965
65,732
36,233
156,045
101,847
54,198
103,271
66,431
36,840
155,105
101,048
54,057
105,704
68,213
37,491
157,764
103,129
54,635
Credit unions 5
51 Total assets/liabilities
and capital
52
53
Federal
State
54 Loans outstanding . .
55
Federal
56
State
57 Savings
58
Federal
59
State
118,010
147,726
77,861
40,149
95,483
52,243
73,513
47,933
25,580
105,963
70,926
35,037
86,137
55,304
30,833
134,327
87,954
46,373
I 1 1 1 1 1 t
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
I 1 1 1 1 1 1
Life insurance companies
60 Assets
61
62
63
64
65
66
67
68
69
70
71
Securities
Government
United States 6 ..
State and local .
Foreign
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
825,901
937,551
1,017,018
1,026,919
1,021,148
1,024,460
1,033,170
1,042,350
1,052,645
1,065,549
1,075,541
75,230
51,700
9,708
13,822
423,712
346,216
77,496
171,797
28,822
54,369
71,971
84,640
59,033
11,659
13,948
492,807
401,943
90,864
193,842
31,615
54,055
80,592
89,924
64,150
11,190
14,584
551,701
442,604
109,097
202,241
32,992
53,330
86,830
89,408
63,352
11,087
14,969
558,787
451,453
107,334
204,264
33,048
53,422
87,991
90,782
64,880
11,363
14,539
549,426
455,678
93,748
206,507
33,235
53,413
87,785
91,227
65,186
11,539
14,502
548,767
459,537
89,230
208,839
33,538
53,334
88,755
91,302
64,551
11,758
14,993
553,486
461,942
91,544
212,375
34,016
53,313
88,678
91,682
64,922
11,749
15,011
563,019
469,207
93,812
212,637
34,178
53,265
87,569
92,497
65,534
11,859
15,104
571,070
476,448
94,622
213,182
34,503
52,720
88,673
92,408
65,218
12,033
15,157
580,392
484,403
95,989
214,815
34,845
52,604
90,499
93,946
66,749
11,976
15,221
587,846
490,285
97,561
215,383
34,964
52,568
90,834
1. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
mortgage loans, contracts, and pass-through securities include loans in process,
unearned discounts and deferred loan fees, valuation allowances for mortgages
"held for sale," and specific reserves and other valuation allowances.
2. Contra-assets are credit-balance accounts that must be subtracted from the
corresponding gross asset categories to yield net asset levels. Contra-assets to
nonmortgage loans include loans in process, unearned discounts and deferred loan
fees, and specific reserves and valuation allowances.
3. Holding of stock in Federal Home Loan Bank and Finance leases plus
interest are included in "Other" (line 9).
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 "Business" securities.
7. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
n.a.
NOTE. FSLlC-insured institutions: Estimates by the F H L B B for all institutions
insured by the FSLIC and based on the F H L B B thrift Financial Report.
FSLIC-insured federal savings banks: Estimates by the F H L B B for federal
savings banks insured by the FSLIC and based on the F H L B B thrift Financial
Report.
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 "other assets."
A28 DomesticNonfinancialStatistics • October 1988
1.38
F E D E R A L F I S C A L A N D F I N A N C I N G OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
U.S. budget1
1 Receipts, total
2
On-budget
3
Off-budget
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus, or deficit ( - ) , total
8
On-budget
9
Off-budget
Source of financing (total)
Borrowing from the public
Operating cash (decrease, or increase
(-)l
12
Other 2
10
11
Fiscal
year
1986
Fiscal
year
1987
769,091
568,862
200,228
990,258
806,760
183,498
-221,167
-237,898
16,731
854,143
640,741
213,402
1,004,586
810,754
193,832
-150,444
-170,014
19,570
1988
Feb.
Mar.
Apr.
May
60,355
40,610
19,745
84,382 r
66,629'
17,753
-24,027'
-26,019'
1,992
65,730
44,958
20,772
95,013'
76,994'
18,020
-29,283'
-32,036'
2,752
109,323
81,993
27,330
95,554'
79,629'
15,925
13,769'
2,364'
11,405
59,711
39,764
19,947
82,295'
64,688'
17,607
-22,583'
-24,924'
2,340
June
99,205'
77,643'
21,562
89,862'
72,678'
17,184
9,343'
4.965'
4,379
July
60,690
40,980
19,710
83,634
66,818
16,816
-22,944
-25,838
2,894
236,187
150,070
20,157
17,160
-334
7,559
11,391
3,665
-14,324
-696
-5,052
5,426
11,002
-7,257
6,009
5,979
-23,276
9,719
27,223
-12,321
-20,638
-244
15,696
3,583
31,384
7,514
23,870
36,436
9,120
27,316
28,922
2,473
26,450
22,913
2,403
20,510
46,189
16,186
30,003
18,966
2,871
16,095
39,604
9,762
29,842
23,908
3,910
19,998
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
15
Tax and loan accounts
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. The Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the FFB to finance their programs. The act has also moved two
social security trust funds (Federal old-age survivors insurance and Federal
disability insurance trust funds) off-budget.
2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to
international monetary fund; other cash and monetary assets; accrued interest
payable to the public; allocations of special drawing rights; deposit funds;
miscellaneous liability (including checks outstanding) and asset accounts;
seigniorage; increment on gold; net gain/loss for U.S. currency valuation adjustment; net gainAoss for IMF valuation adjustment; and profit on the sale of gold.
SOURCE. Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government and the Budget of the U.S.
Government.
Federal Finance
1.39
A29
U . S . B U D G E T RECEIPTS A N D O U T L A Y S 1
Millions of dollars
Calendar year
Source or type
Fiscal
year
1986
Fiscal
year
1987
1986
H2
1988
1987
1988
HI
H2
HI
May
June
July
RECEIPTS
769,091
854,143
387,524
447,282
421,712
476,115'
59,711
99,205'
60,690
348,959
314,803
36
105,994
71,873
392,557
322,463
33
142,957
72,896
183,156
164,071
4
27,733
8,652
205,157
156,760
30
112,421
64,052
192,575
170,203
4
31,223
8,853
207,801
169,300
28
101,614
63,283'
17,958
27,071
7
9,714
18,834
46,234
30,995
3
16,667
1,573'
25,791
25,567
2
2,300
2,078
80,442
17,298
102,859
18,933
42,108
8,230
52,396
10,881
52,821
7,119
58,002
8,706
2,748
1,136
19,213
866
3,101
1,602
283,901
303,318
134,006
163,519
143,755
181,058
33,396
27,967
26,915
255,062
273,185
122,246
146,696
130,388
164,412
24,948
27,200
24,964
11,840
24,098
4,742
13,987
25,418
4,715
1,338
9,328
2,429
12,020
14,514
2,310
1,889
10,977
2,390
14,839
14,363
2,284
974
8,073
375
1,965
352
415
0
1,598
353
32,919
13,327
6,958
19,884
32,510
15,032
7,493
19,307
15,947
7,282
3,649
9,605
15,845
7,129
3,818
10,299
17,680
7,993
3,610
10,399
16,440
7,851
3,863
9,950
3,055
1,282
751
1,657
3,136
1,430
644
1,590
3,250
1,343
627
1,265
18 All types
990,231
1,004,586
506,556
503,112'
532,839'
513,001'
82,295'
89,862'
83,634
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
273,375
14,152
8,976
4,735
13,639
31,449
281,999
11,649
9,216
4,115
13,363
27,356
138,544
8,938
4,594
2,446
7,141
15,660
142,886
4,374
4,324
2,335
6,175
11,824
146,995
4,487
5,469
1,468
7,590
14,640
143,080
7,150
5,361
555
6,776
7,872
20,967
907
911
507
1,133
1,304
25,317
1,602
1,023
516
1,458
20
24,449
1,568
961
257
1,096
311
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
4,890
28,117
7,233
6,182
26,228
5,051
3,764
14,745
3,651
4,893
12,113
3,108
3,852
14,096
2,075
5,951
12,700
2,765
163
2,427
296
1,826
2,397
468
-337
2,335
-109
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 2
11
Self-employment taxes and
contributions 3
12
Unemployment insurance
13
Other net receipts 4
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts
OUTLAYS
30,585
29,724
16,209
14,182
15,592
15,451
2,410
2,431
1,984
29 Health
30 Social security and medicare
31 Income security
35,935
268,921
119,796
39,968
282,473
123,250
18,795
138,299
59,979
20,318
142,864
62,248
20,750
158,469
61,201
22,643
135,322
65,555
3,741
24,487
10,214
4,119
28,234
8,203
3,502
23,475
10,907
32
33
34
35
36
37
26,356
6,603
6,104
6,431
136,008
-33,007
26,782
7,548
5,948
1,621
138,570
-36,455
14,190
3,413
1,860
2,886
66,226
-16,475
12,264
3,626
3,344
337
70,110
-19,102
14,956
4,291
3,560
1,175
71,933
-17,684
13,241
4,761
4,337
448
76,098
-17,766
1,441
831
1,017
0
12,719
-3,303
2,120
827
1,486
0
11,061
-3,251
2,354
735
174
0
12,677
-2,706
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest 6
Undistributed offsetting receipts
1. Functional details do not add to total outlays for calendar year data because
revisions to monthly totals have not been distributed among functions. Fiscal year
total for outlays does not correspond to calendar year data because revisions from
the Budget have not been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
6. Net interest function includes interest received by trust funds.
7. Consists of rents and royalties on the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCES. U . S . Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government, and the U.S. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 1988.
A30
1.40
Domestic Financial Statistics • October 1988
F E D E R A L D E B T SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1986
1988
1987
Item
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
1 Federal debt outstanding
1991.1
2,063.6
2,129.5
2,218.9
2,250.7
2,313.1
2,354.3
2,435.2
2,493.2
2 Public debt securities
3
Held by public
4
Held by agencies
1986.8
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
2,309.3
1,871.1
438.1
2,350.3
1,893.1
457.2
2,431.7
1,954.1
477.6
2,487.6
1,996.7
490.8
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
3.8
2.8 r
1.0
4.0
3.0
1.0
3.5
2.7
.8
5.6
5.1
.6
5 Agency securities
6
Held by public
7
Held by agencies
1,973.3
2,060.0
2,111.0
2,200.5
2,232.4
2,295.0
2,336.0
2,417.4
2,487.0
9 Public debt securities
10 Other debt 1
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
2,293.7
1.3
2,334.7
1.3
2,416.3
1.1
2,486.7
.3
11 MEMO: Statutory debt limit
2,078.7
2,078.7
2,111.0
2,300.0
2,300.0
2,320.0
2,800.0
2,800.0
2,800.0
8 Debt subject to statutory limit
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 P U B L I C D E B T OF U.S. T R E A S U R Y
SOURCES. Treasury Bulletin and Monthly Statement
United States.
of the Public Debt of the
Types and Ownership
Billions of dollars, end of period
1987
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
Government
Public
Savings bonds and n o t e s . . .
Government account series 3
14 Non-interest-bearing debt
1984
1985
1986
1988
1987
Q2
Q3
Q4
Q1
1,663.0
1,945.9
2,214.8
2,431.7
2,309.3
2,350.3
2,431.7
2,487.6
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
2,428.9
1,724.7
389.5
1,037.9
282.5
704.2
139.3
4.0
4.0
.0
99.2
461.3
2,306.7
1,659.0
391.0
984.4
268.6
647.7
125.4
5.1
5.1
.0
95.2
421.6
2,347.7
1.676.0
378.3
1.005.1
277.6
671.8
129.0
4.3
4.3
.0
97.0
440.7
2,428.9
1,724.7
389.5
1,037.9
282.5
704.2
139.3
4.0
4.0
.0
99.2
461.3
2,484.9
1,758.7
392.6
1,059.9
291.3
726.2
142.9
6.1
6.1
.0
102.3
474.4
2.3
2.5
2.8
2.8
2.6
2.5
2.8
2.6
403.1
211.3
238.3 r
28.0
135.4
68.8
260.0
477.6
222.6
1,745.2
253.3 r
14.3
n.a.
84.6
n.a.
438.1
212.3
1,657.7
238.4 r
20.6
140.0
79.7
n.a.
457.2
211.9
1,682.6
251.3 r
15.2
143.0
81.8
n.a.
477.6
222.6
1,745.2
253.3 r
14.3
n.a.
84.6
n.a.
n.a.
n.a.
1,778.2
260.7
14.9
n.a.
n.a.
n.a.
92.3
70.5
251.6
467.1
101.1
n.a.
287.3
n.a.
96.8
68.6
268.6
n.a.
98.5
70.4
267.0
n.a.
101.1
n.a.
287.3
n.a.
4
By holder
15 U.S. government agencies and trust funds
16 Federal Reserve Banks
17 Private investors
18
Commercial banks
19
Money market funds
20
Insurance companies
21
Other companies
22
State and local Treasurys
Individuals
23
Savings bonds
24
Other securities
25
Foreign and international5
26
Other miscellaneous investors 6
289.6
160.9
1,212.5
183.4
25.9
88.7'
50.1
173.0
348.9
181.3
1,417.2
192.2
25.1
115.4
59.0
224.0
74.5
69.3
192.9
354.7
79.8
75.0
212.5
434.2
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.
1,602.0
104.0
n.a.
323.5
n.a.
5. Consists of investments of foreign and international accounts. Excludes
non-interest-bearing notes issued to the International Monetary Fund.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally-sponsored agencies.
SOURCES. 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
A31
Transactions 1
U . S . G O V E R N M E N T SECURITIES D E A L E R S
Par value; averages of daily figures, in millions of dollars
1988
Item
1
2
3
4
5
6
V
8
9
10
11
12
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
1985
1986
May r
June1,
July
June 22
June 29 r
July 6
July 13
July 20
July 27
75,331
95,445
110,052
105,200
111,010
92,209
122,109
113,014
91,759
100,880
89,812
89,824
32,900
1,811
18,361
12,703
9,556
34,247
2,115
24,667
20,456
13,961
37,924
3,272
27,918
24,014
16,923
30,344
3,848
30,825
23,925
16,259
28,060
3,826
31,292
28,079
19,753
29,211
2,941
23,139
23,292
13,627
28,985
3,940
39,533
30,013
19,637
30,147
4,202
34,441
24,092
20,132
30,303
3,612
20,747
23,242
13,856
30,301
3,014
23,368
29,661
14,536
28,518
2,800
21,789
22,645
14,060
29,045
2,890
24,966
20,061
12,863
3,336
3,670
2,936
2,620
2,766
2,257
2,917
3,369
2,350
2,171
1,827
2,685
36,222
35,773
11,640
4,016
3,242
12,717
49,558
42,218
16,748
4,355
3,272
16,660
61,539
45,576
18,087
4,112
2,965
17,135
63,549
39,031
15,182
2,910
2,125
17,765
66,145
42,097
15,660
3,193
2,114
24,139
55,142
34,808
14,273
3,313
2,400
26,729
75,418
43,773
11,913
3,282
2,006
27,976
65,044
44,600
14,930
3,465
2,169
24,765
51,532
37,877
13,186
3,085
2,630
29,250
60,669
38,039
15,659
3,273
2,354
27,325
54,649
33,335
15,515
3,574
2,408
26,128
54,551
32,587
12,094
3,244
2,215
25,095
5,561
6,085
252
3,311
7,175
16
3,233
8,964
5
3,193
9,081
0
2,205
11,565
0
1,886
8,540
0
3,111
12,423
0
1,615
11,657
0
1,471
8,477
0
2,516
9,420
0
1,781
8,437
0
2,053
8,401
0
1,283
3,857
1,876
7,831
2,029
9,290
2,516
8,598
2,330
9,370
1,673
7,088
4,186
9,957
2,203
7,148
965
5,271
1,640
9,166
1,348
8,071
2,613
5,182
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.
The figures exclude allotments of, and exchanges for, new U.S. Treasury
securities, redemptions of called or matured securities, purchases or sales of
securities under repurchase agreement, reverse repurchase (resale), or similar
contracts.
2. Data for immediate transactions do not include forward transactions.
3. Includes, among others, all other dealers and brokers in commodities and
1988
1987
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 DomesticNonfinancialStatistics • October 1988
1.43
U . S . G O V E R N M E N T SECURITIES D E A L E R S
Positions and Financing 1
Averages of daily figures, in millions of dollars
1988
Item
1985
1986
1988
1987
May r
June'
July
June 29'
July 6
July 13
July 20
July 27
Positions
Net immediate 2
U.S. Treasury securities
7,391
12,912
-6,216
-26,408
-25,186
-30,235
-20,164
-24,726
-27,532
-31,634
-34,120
2
3
4
5
6
Bills
Other within 1 year
1-5 years
5 - 1 0 years
Over 10 years
10,075
1,050
5,154
-6,202
-2,686
12,761
3,706
9,146
-9,505
-3,197
4,317
1,557
649
-6,564
-6,174
86
-2,613
-6,785
-8,649
-8,446
1,723
-983
-7,541
-10,274
-8,112
32
-2,634
-4,668
-13,892
-9,074
967
-587
-2,559
-11,070
-6,915
1,395
-2,491
-2,165
-13,477
-7,988
1,071
-3,192
-3,037
-14,160
-8,214
-1,183
-2,703
-5,403
-13,111
-9,234
-510
-2,233
-7,582
-14,042
-9,754
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
22,860
9,192
4,586
5,570
32,984
10,485
5,526
8,089
31,910
8,188
3,661
7,496
26,785
6,075
2,395
4,519
29,417
8,066
2,618
5,561
31,002
8,843
2,734
5,846
30,131
8,502
2,917
5,612
29,531
9,679
3,094
6,290
31,200
8,888
2,715
5,120
32,924
8,791
2,770
5,931
29,703
8,447
2,520
5,952
-7,322
4,465
-722
-18,059
3,473
-153
-3,373
5,988
-95
-2,027
4,460
0
-2,695
4,136
0
909
7,518
0
-2,024
3,805
0
-1,176
6,724
0
338
6,251
0
1,944
8,483
0
1,733
7,946
0
-911
-9,420
-2,144
-11,840
-1,211
-18,817
2,191
-14,977
1,114
-17,820
1,356
-18,777
1,838
-18,567
623
-18,348
910
-19,585
1,415
-19,716
2,083
-17,152
1
11
12
13
14
15
Financing 3
Reverse repurchase agreements 4
Overnight and continuing
Term
Repurchase agreements 5
18
Overnight and continuing
Term
19
16
17
68,035
80,509
98,954
108,693
124,791
148,033
133,373
173,858
139,006
168,069
132,912
173,938
141,251
163,380
130,391
162,655
133,643
171,138
133,835
174,307
132,327
179,198
101,410
70,076
141,735
102,640
170,840
120,980
169,031
139,537
176,017
131,104
170,062
130,220
180,348
130,217
172,365
119,605
171,418
128,451
173,896
128,207
165,821
136,480
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of N e w 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 CDs, 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 book" repurchase agreements.
NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially
estimated.
Federal Finance
1.44
F E D E R A L A N D F E D E R A L L Y S P O N S O R E D CREDIT A G E N C I E S
A33
Debt Outstanding
Millions of dollars, end of period
1988
Agency
1984
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department 1
4
Export-Import Bank 2 , 3
5
Federal Housing Administration 4
6
Government National Mortgage Association participation
certificates
7
Postal Service 6
8
Tennessee Valley Authority
9
United States Railway Association
10 Federally sponsored agencies 7
11
Federal Home Loan Banks
12
Federal Home Loan Mortgage Corporation
13
Federal National Mortgage Association
14
Farm Credit Banks
15
Student Loan Marketing Association
16
Financing Corporation 9
1985
1986
1987
Feb.
Mar.
Apr.
May
June
271,220
293,905
307,361
341,386
346,901
351,356
348,273
352,216
35,145
142
15,882
133
36,390
71
15,678
115
36,958
33
14,211
138
37,981
13
11,978
183
37,286
12
11,978
101
36,844
12
11,494
100
36,672
11
11,494
103
36,430
11
11,494
105
36,361
11
11,232
116
2,165
1,337
15,435
51
2,165
1,940
16,347
74
2,165
3,104
17,222
85
1,615
6,103
18,089
0
1,165
6,103
17,927
0
1,165
6,103
17,970
0
830
6,103
18,131
0
830
•$,842
830
5,842
18,330
0
237,012
65,085
10,270
83,720
72,192
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
n.a.
n.a.
n.a.
303,405
115,725
17,645
97,057
55,275
16,503
1,200
309,615
117,569
19,405
98,593
55,275
16,923
1,850
314,512
118,250
20,143
99,853
56,145
18,271
1,850
311,601
118,153
17,199
100,911
54,311
18,877
2,150
315,786
117,864
19,495
102,515
54,578
18,434
2,900
104,757
55,779
19,257
2,900
145,217
153,373
157,510
152,417
150,178
149,721
150,044
149,986
149,833
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
11,972
5,853
4,940
16,709
0
11,972
5,853
4,940
16,547
0
11,488
5,853
4,940
16,590
0
11,488
5,853
4,940
16,751
0
11,488
5,592
4,940
16,768
0
11,226
5,592
4,940
16,950
0
58,971
20,693
29,853
64,234
20,654
31,429
65,374
21,680
32,545
59,674
21,191
32,078
59,674
19,193
31,999
59,674
19,184
31,992
59,674
19,203
32,135
59,674
19,218
32,306
59,674
19,204
32,247
re, 1 4 8
0
n.a.
n.a.
117,773
n.a.
MEMO
17 Federal Financing Bank debt 10
18
19
20
21
22
Lending to federal and federally sponsored
Export-Import Bank 3
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other Lending11
23 Farmers Home Administration
24 Rural Electrification Administration
25 Other
agencies
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. Once 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.
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 Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
10. The FFB, 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.
11. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any
particular agency being generally small. The Farmers Home Administration item
consists exclusively of agency assets, while the Rural Electrification Administration entry contains both agency assets and guaranteed loans.
A34 DomesticNonfinancialStatistics • October 1988
1.45
N E W SECURITY I S S U E S
Tax-Exempt State and Local Governments
Millions of dollars
1987
Type of issue or issuer,
or use
1985
1986
1988
1987
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June'
July
1 All issues, new and refunding 1
214,189
147,011
102,407
8,385
5,412
8,585
9,821
5,847
7,846
13,912
8,057
Type of issue
2 General obligation
3 Revenue
52,622
161,567
46,346
100,664
30,589
71,818
1,995
6,390
1,259
4,153
2,880
5,705
2,776
7,045
1,707
4,140
3,085
4,761
4,237
9,675
1,816
6,241
Type of issuer
4 State
5 Special district and statutory authority 2
6 Municipalities, counties, and townships
13,004
134,363
66,822
14,474
89,997
42,541
10,102
65,460
26,845
550
5,447
2,388
423
3,220
1,769
1,197
5,154
2,234
739
6,310
2,772
441
4,078
1,328
913
4,625
2,308
1,349
8,629
3,934
143
5,216
2,698
7 Issues for new capital, total
156,050
83,490
56,789
5,913
2,862
5,773
6,044
3,948
5,190
8,935
7,178
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
16,658
12,070
26,852
63,181
12,892
24,398
16,948
11,666
35,383
17,332
5,594
47,433
9,525
3,677
7,912
11,107
6,551
18,020
931
455
377
1,278
1,297
1,575
841
189
326
740
153
613
754
826
655
650
2,473
415
933
559
1,016
1,218
105
2,213
911
215
429
1,099
298
996
1,316
452
580
694
248
1,900
1,320
858
635
2,060
434
3,628
1,345
1,446
194
1,078
188
2,927
8
9
10
11
12
13
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts beginning 1986.
1.46
N E W SECURITY I S S U E S
SOURCES. Securities Data/Bond Buyer Municipal Data Base beginning 1986.
Public Securities Association for earlier data.
U . S . Corporations
Millions of dollars
1987
Type of issue or issuer,
or use
1985
1986
1988
1987
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
239,015
423,726
392,156
14,322
11,872
22,175
22,394
25,902
21,202 r
23,413
29,168
203,500
355,293
325,648
13,624
11,098
19,485
18,504
20,815
18,490'
19,382
24,995
119,559
46,200
37,781
231,936
80,760
42,596
209,279
92,070
24,299
12,891
n.a.
733
10,763
n.a.
335
18,246
n.a.
1,239
16,713
n.a.
1,791
19,827
n.a.
988'
16,177
n.a.
2,313'
17,496
n.a.
1,886
22,000
n.a.
2,995
63,973
17,066
6,020
13,649
10,832
91,958
91,548
40,124
9,971
31,426
16,659
165,564
61,666
49,327
11,974
23,004
7,340
172,343
1,280
483
0
895
290
10,676
928
2,577
226
1,570
510
5,287
3,053
2,084
0
1,142
206
13,000
3,151
1,396
200
1,718
101
11,937
3,482
1,007
1,017
2,259
115
12,935
4,503'
771
890
1,170
411
10,746'
4,206
1,446
184
1,929
69
11,546
5,284
2,136
580
1,700
910
14,384
12 Stocks 3
35,515
68,433
66,508
698
774
2,690
3,890
5,087
2,712
4,031
4,173
Type
13 Preferred
14 Common
15 Private placement 3
6,505
29,010
11,514
50,316
6,603
10,123
43,228
13,157
162
533
n.a.
61
713
n.a.
1,388
1,302
n.a.
376
3,534
n.a.
625
4,490
n.a.
241
2,471
n.a.
285
3,746
n.a.
501
3,672
n.a.
5,700
9,149
1,544
1,966
978
16,178
15,027
10,617
2,427
4,020
1,825
34,517
13,880
12,888
2,439
4,322
1,458
31,521
237
86
149
25
1
200
76
14
1
0
11
672
268
360
1
100
60
1,901
296
44
474
142
0
2,933
256
99
32
93
63
4,544
318
276
150
238
109
1,621
1,080
157
15
59
78
2,642
1,695
466
51
188
13
1,760
1 All issues'
2 Bonds
2
Type of offering
3 Public, domestic
4 Private placement, domestic
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. Before 1987, annual totals include
underwritten issues only.
SOURCES. IDD Information Services, Inc., U . S . Securities and Exchange
Commission and the Board of Governors of the Federal Reserve System.
Securities Market and Corporate Finance
1.47
O P E N - E N D I N V E S T M E N T COMPANIES
A35
N e t Sales and Asset Position
Millions of dollars
1987
Item
1986
1988
1987
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
INVESTMENT COMPANIES 1
1 Sales of own shares 2
411,751
381,260
21,927
26,494
30,343
23,265
24,589
23,162
19,579
22,516
2 Redemptions of own shares 3
3 Net sales
239,394
172,357
314,252
67,008
20,400
1,507
28,099
-1,605
22,324
8,019
20,914
2,351
23,968
620
25,000
-1,828
21,412
-1,833
23,201
-685
4 Assets 4
424,156
453,842
446,479
453,842
468,998
481,232
473,206
473,321
468,735
483,574
6 Other
30,716
393,440
38,006
415,836
41,432
405,047
38,006
415,836
40,157
428,841
41,232
439,995
43,561
426,645
45,307
428,014
45,003
423,732
43,691
439,883
5. Also includes all U.S. government securities and other short-term debt
securities.
1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment of capital gains distributions and share issue of conversions from one fund
to another in the same group.
3. Excludes share redemption resulting from conversions from one fund to
another in the same group.
4. Market value at end of period, less current liabilities.
1.48
NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
CORPORATE PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1987
1986
Account
1985
1986
1988
1987
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2 P
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
282.3
224.2
96.4
127.8
83.2
44.5
298.8
236.3
106.6
129.8
88.2
41.5
310.4
276.7
133.8
142.9
95.5
47.4
301.2
240.5
107.9
132.6
88.9
43.7
293.9
252.1
114.3
137.9
89.8
48.1
298.3
261.8
126.3
135.5
91.7
43.8
305.2
273.7
132.6
141.1
94.0
47.0
322.0
289.4
140.0
149.5
97.0
52.4
316.1
281.9
136.2
145.7
99.3
46.4
316.2
286.2
136.9
149.4
101.3
48.1
332.0
310.7
144.1
166.6
103.1
63.5
7 Inventory valuation
8 Capital consumption adjustment
-1.7
59.8
8.3
54.1
-18.0
51.7
8.7
52.0
-8.1
49.8
-14.4
50.8
-20.0
51.5
-19.5
52.1
-18.2
52.4
-19.4
49.4
-27.1
48.4
SOURCE. Survey of Current Business (Department of Commerce).
A36 DomesticNonfinancialStatistics • October 1988
1.50
T O T A L N O N F A R M B U S I N E S S E X P E N D I T U R E S on N e w Plant and Equipment
•
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1986
Industry
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and o t h e r
1986
1987
1988
Q4
Ql
Q2
Q3
Q4
Ql
Q2 1
Q3 1
379.47
388.60
430.23
386.09
374.23
377.65
393.13
409.37
409.73
429.01
438.22
69.14
73.56
70.91
74.55
163.01
85.39
69.87
74.20
70.47
70.18
68.76
72.03
71.78
75.78
72.64
80.20
75.33
82.45
79.00
83.82
79.30
86.43
11.22
11.34
12.39
10.31
10.31
11.02
11.64
12.39
12.50
12.87
12.51
6.66
6.26
5.89
5.91
6.55
6.39
6.65
7.62
6.97
6.41
6.84
6.25
5.55
7.46
5.97
5.77
5.72
6.19
6.21
5.91
7.05
6.10
7.12
6.35
6.76
6.90
6.94
6.78
7.44
6.58
6.81
8.43
7.37
33.91
12.47
160.38
31.58
13.18
168.19
32.90
14.28
186.40
33.78
12.34
166.08
30.85
12.75
160.70
31.13
12.35
164.69
31.31
13.58
169.87
33.01
14.06
177.50
29.94
14.37
174.54
32.55
13.81
186.15
34.31
14.63
188.44
• 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.
1987
19881
2. "Other" 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 F I N A N C E COMPANIES
A37
Assets and Liabilities 1
Billions of dollars, end of period
1986
Account
1983
1984
1987
1985
Q2
Q3
Q4
Q1
Q2
Q3
Q4
ASSETS
Accounts receivable, gross
1 Consumer
2 Business
Real estate
4
Total
83.3
113.4
20.5
217.3
89.9
137.8
23.8
251.5
111.9
157.5
28.0
297.4
123.4
166.8
29.8
320.0
135.3
159.7
31.0
326.0
134.7
173.4
32.6
340.6
131.1
181.4
34.7
347.2
134.7
188.1
36.5
359.3
141.6
188.3
38.0
367.9
141.1
207.6
39.5
388.2
30.3
3.7
33.8
4.2
39.2
4.9
40.7
5.1
42.4
5.4
41.5
5.8
40.4
5.9
41.2
6.2
42.5
6.5
45.3
6.8
5
6
Less:
Reserves for unearned income
Reserves for losses
7
8
Accounts receivable, net
All other
183.2
34.4
213.5
35.7
253.3
45.3
274.2
49.5
278.2
60.0
293.3
58.6
300.9
59.0
311.9
57.7
318.9
64.5
336.1
58.2
9
Total assets
217.6
249.2
298.6
323.7
338.2
351.9
359.9
369.6
383.4
394.3
18.3
60.5
20.0
73.1
18.0
99.2
16.3
108.4
16.8
112.8
18.6
117.8
17.2
119.1
17.3
120.4
15.9
124.2
16.4
128.4
11.1
67.7
31.2
28.9
12.9
77.2
34.5
31.5
12.7
94.4
41.5
32.8
15.8
106.9
40.9
35.4
16.4
111.7
45.0
35.6
17.5
117.5
44.1
36.4
21.8
118.7
46.5
36.6
24.8
121.8
49.1
36.3
26.9
128.2
48.6
39.5
28.0
137.1
52.8
31.5
217.6
249.2
298.6
323.7
338.2
351.9
359.9
369.6
383.4
394.3
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
1. NOTE. Components may not add to totals because of rounding.
1.52
DOMESTIC F I N A N C E COMPANIES
Business Credit Outstanding and N e t Change 1
Millions of dollars, seasonally adjusted
1987
1988
Type
1
2
3
4
5
6
7
8
9
10
Total
Retail financing of installment sales
Automotive (commercial vehicles)
Business, industrial, and farm equipment
Wholesale financing
Automotive
Equipment
All other
Leasing
Automotive
Equipment
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
156,297
171,966
205,869
206,755
213,337
216,007
218,914
220,304
222,133
20,660
22,483
25,952
22,950
35,674
24,987
36,419
25,474
36,318
26,976
36,914
27,081
37,619
27,263
37,219
27,081
37,519
27,548
23,988
4,568
6,809
23,419
5,423
7,079
31,059
5,693
8,408
30,115
5,308
8,454
28,654
5,323
8,331
27,329
5,251
8,347
27,361
5,429
8,311
28,260
5,237
8,414
28,731
5,557
8,481
16,275
34,768
19,783
37,833
21,943
43,002
22,943
43,245
23,100
48,175
23,493
50,411
23,458
51,092
23,690
52,126
24,076
52,365
15,765
10,981
15,959
13,568
18,024
17,079
18,506
16,291
17,862
17,062
17,895
19,287
18,789
19,592
18,700
19,578
18,595
19,260
Net change (during period)
11
12
13
14
15
16
17
18
19
20
Retail financing of installment sales
Automotive (commercial vehicles)
Business, industrial, and farm equipment
Wholesale financing
Automotive
Equipment
All other
Leasing
Automotive
Equipment
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
19,607
15,669
3,040
886
549
2,670
2,907
1,390
1,829
5,067
-363
5,292
467
1,220
223
745
487
-101
-232
596
105
705
182
-400
-181
300
467
5,423
-867
1,069
-569
855
270
158
-101
257
-944
-385
46
-1,461
14
-123
-1,325
-72
16
32
178
-36
899
-192
103
471
320
67
3,896
2,685
3,508
3,065
-70
1,038
1,000
243
157
632
393
2,236
-34
681
231
1,034
386
239
2,161
536
194
2,587
-477
792
482
-788
-643
770
-643
689
894
305
-88
-14
-105
-318
1. These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
A38 DomesticNonfinancialStatistics • October 1988
1.53
MORTGAGE M A R K E T S
Millions of dollars; exceptions noted.
1988
Item
1985
1986
1987
Jan.
Feb.
Mar.
Apr.
May'
June
July
Terms and yields in primary and secondary markets
PRIMARY M A R K E T S
1
2
3
4
5
6
Conventional mortgages on new homes
Terms
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) .
Contract rate (percent per year)
Yield (percent per
1 F H L B B series'
8 H U D series 4
104.1
77.4
77.1
26.9
2.53
11.12
118.1
86.2
75.2
26.6
2.48
9.82
137.0
100.5
75.2
27.8
2.26
8.94
150.1
108.4
74.0
28.2
2.17
8.75
139.4
104.3
76.4
28.1
2.23
8.76
147.2
106.3
75.0
27.3
2.28
8.77
151.4
112.1
76.2
27.7
2.20
8.76
145.3
108.0
76.4
28.1
2.15
8.59
152.0'
110.2'
73.8'
27.5'
2.16'
8.9C
152.9
111.9
75.2
28.4
2.24
8.80
11.58
12.28
10.25
10.07
9.31
10.13
9.10
10.09
9.12
9.80
9.15
9.99
9.13
10.19
8.95
10.48
9.26'
n.a.
9.17
n.a.
12.24
11.61
9.91
9.30
10.12
9.42
10.17
9.83
9.86
9.53
10.28
9.53
10.46
9.67
10.84
9.93
n.a.
9.88
n.a.
9.91
year)
SECONDARY MARKETS
Yield (percent per year)
9 F H A mortgages ( H U D series) 5
10 G N M A securities 6
Activity in secondary markets
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/V A-insured
13
Conventional
Mortgage transactions
14 Purchases
period)
(during
94,574
34,244
60,331
98,048
29,683
68,365
95,030
21,660
73,370
97,159
20,237
76,923
98,358
20,181
78,177
99,787
20,094
79,693
100,796
19,932
80,864
101,747
19,805
81,941
102,368
19,765
82,603
102,540
19,677
82,864
21,510
30,826
20,531
1,267
2,629
2,776
2,409
2,138
2,372
1,960
20,155
3,402
32,987
3,386
25,415
4,886
2,254
5,542
2,516
4,966
3,823
6,149
2,555
6,033
2,142
5,777
2,179
5,365
1,108
4,277
12,399
841
11,559
13,517
746
12,771
12,802
686
12,116
13,090
632
12,458
13,926
646
13,280
14,386
641
13,745
14,822
635
14,187
15,228
633
14,595
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
44,012
38,905
103,474
100,236
76,845
75,082
2,168
1,832
3,293
2,414
2,932
2,312
2,772
2,271
2,877
2,325
n.a.
n.a.
n.a.
n.a.
48,989
110,855
71,467
3,868
4,910
4,262
6,437
5,159
n.a.
n.a.
period)
Mortgage
commitments7
15 Contracted (during period)
16 Outstanding (end of period)
F E D E R A L H O M E L O A N MORTGAGE CORPORATION
Mortgage holdings (end of
17 Total
18
FHA/VA
19
Conventional
Mortgage transactions
20 Purchases
21 Sales
periodf
(during
Mortgage
commitments9
22 Contracted (during period)
period)
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups; compiled by the Federal Home Loan Bank
Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages; from Department of Housing and Urban Development.
5. Average gross yields on 30-year, minimum-downpayment, Federal Housing
Administration-insured first mortgages for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month. Large
monthly movements in average yields may reflect market adjustments to changes
in maximum permissable contract rates.
6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying
the prevailing ceiling rate. Monthly figures are averages of Friday figures from the
Wall Street Journal.
7. Includes some multifamily and nonprofit hospital loan commitments in
addition to 1- to 4-family loan commitments accepted in F N M A ' s free market
auction system, and through the F N M A - G N M A tandem plans.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's mortgage commitments and mortgage transactions include activity under mortgage/
securities swap programs, while the corresponding data for F N M A exclude swap
activity.
Real Estate
1.54
A39
MORTGAGE D E B T O U T S T A N D I N G 1
Millions of dollars, end of period
1988
1987
Type of holder, and type of property
1985
1986
1987
Q2
Q3
Q4
Ql'
Q2
1 All holders
2,269,173
2,568,562
2,908,970
2,756,502'
2,832,537'
2,908,970'
2,952,881
3,024,144
? 1- to 4-family
3 Multifamily
4 Commercial
5
1,467,409
214,045
482,029
105,690
1,668,209
247,024
556,569
96,760
1,889,198
273,556
656,305
89,911
1,780,662'
263,560'
620,159'
92,121'
1,837,209'
268,519'
635,897'
90,912'
1,889,198'
273,556'
656,305'
89,911'
1,919,364
277,262
667,036
89,219
1,972,195
282,811
680,400
88,738
1,390,394
429,196
213,434
23,373
181,032
11,357
1,507,289
502,534
235,814
31,173
222,799
12,748
1,700,820
591,151
275,761
33,296
267,663
14,431
1,607,000'
544,759'
252,813'
30,543'
247,576'
13,827'
1,648,328'
567,OOC
263,762'
32,114'
256,981'
14,143'
1,700,820'
591,151'
275,761'
33,296'
267,663'
14,431'
1,722,742
603,408
279,977
33,585
275,081
14,765
1,762,742
622,237
289,029
34,347
283,678
15,183
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
193,842
12,827
20,952
149,111
10,952
33,601
856,945
598,886
106,359
150,943
824,961
572,075
102,933
149,183
838,737
583,432
104,609
149,938
856,945'
598,886'
106,359'
150,943'
863,110
603,532
107,687
151,136
878,972
617,121
109,854
151,245
212,375
13,226
22,524
166,722
9,903
40,349
200,382
12,745
21,663
155,611
10,363
36,898
204,263
12,742
21,968
159,464
10,089
38,328
212,375
13,226
22,524
166,722
9,903
40,349
214,815
13,653
22,723
168,774
9,665
41,409
219,015
14,053
22,823
172,624
9,515
42,518
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
192,721
444
25
419
43,051
18,169
8,044
6,603
10,235
196,514
667
45
622
48,085
21,157
7,808
8,553
10,567
191,520
458
25
433
42,978
18,111
7,903
6,592
10,372
192,721
444
25
419
43,051
18,169
8,044
6,603
10,235
196,909
434
25
409
43,076
18,185
8,115
6,640
10,136
199,780
425
24
401
42,767
18,248
8,213
6,288
10,018
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
5,574
2,557
3,017
96,649
89,666
6,983
34,131
2,008
32,123
12,872
11,430
1,442
5,268
2,531
2,737
94,064
87,013
7,051
35,833
2,108
33,725
12,597
11,172
1,425
5,330
2,452
2,878
94,884
87,901
6,983
34,930
2,055
32,875
12,940
11,570
1,370
5,574
2,557
3,017
96,649
89,666
6,983
34,131
2,008
32,123
12,872
11,430
1,442
5,660
2,608
3,052
99,787
92,828
6,959
33,566
1,975
31,591
14,386
12,749
1,637
5,544
2,452
3,092
102,368
95,404
6,964
33,048
1,945
31,103
15,628
13,768
1,860
44 Mortgage pools or trusts 6
45
Government National Mortgage Association
46
1- to 4-family
47
Multifamily
48
Federal Home Loan Mortgage Corporation
49
1- to 4-family
SO
Multifamily
SI
Federal National Mortgage Association
s?
1- to 4-family
S3
Multifamily
54
Farmers Home Administration
55
1- to 4-family
S6
57
Commercial
58
Farm
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
531,591
262,697
256,920
5,777
171,372
166,667
4,705
97,174
95,791
1,383
348
142
670,394
317,555
309,806
7,749
212,634
205,977
6,657
139,960
137,988
1,972
245
121
615,142
293,246
286,091
7,155
200,284
194,238
6,046
121,270
119,617
1,653
342
149
648,084
308,339
300,815
7,524
208,872
202,308
6,564
130,540
128,770
1,770
333
144
670,394
317,555
309,806
7,749
212,634
205,977
6,657
139,960
137,988
1,972
245
121
683,114
322,976
315,095
7,881
214,724
208,138
6,586
145,242
142,330
2,912
172
65
703,960
329,976
321,924
8,052
216,440
209,900
6,540
157,438
153,253
4,185
106
23
132
74
63
61
126
67
124
65
63
61
58
49
41
42
59 Individuals and others 7
60
1- to 4-family
61
Multifamily
67
63
Farm
296,809
165,835
55,424
49,207
26,343
325,882
180,896
66,133
54,845
24,008
345,035
183,229
75,094
64,311
22,401
337,846
182,010
73,924
59,110
22,802
344,605
184,794
74,403
62,798
22,610
345,035
183,229
75,094
64,311
22,401
350,116
186,795
75,716
65,347
22,258
357,662
192,533
76,480
66,524
22,125
6 Selected financial institutions
7
Commercial banks 2
8
1- to 4-family
9
Multifamily
10
Commercial
11
Farm
1?
13
14
IS
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 4
73 Federal and related agencies
74
Government National Mortgage Association
75
1- to 4-family
76
Multifamily
77
Farmers Home Administration
78
1- to 4-family
79
Multifamily
30
Commercial
31
Farm
37
33
34
3S
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 Home 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 (credit balance accounts that must be subtracted from the corresponding gross asset categories to yield net asset levels).
4. Assumed to be entirely 1- to 4-family loans.
5. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from FmHA 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 funds, noninsured
pension funds, credit unions, and other U.S. agencies.
A40 DomesticNonfinancialStatistics • October 1988
1.55
C O N S U M E R I N S T A L L M E N T CREDIT 1 Total Outstanding, and Net Change, seasonally adjusted
Millions of dollars
1987
Holder, and type of credit
1986
1988
1987
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May r
June
Amounts outstanding (end of period)
571,833
613,022
606,926
608,728
613,022
619,258
624,294
629,485
633,336
636,318
641,752
By major holder
Commercial banks
Finance companies 2
Credit unions
Retailers
Savings institutions
Gasoline companies
262,139
133,698
76,191
39,660
56,881
3,264
281,564
140,072
81,065
42,782
63,949
3,590
278,855
139,236
80,672
42,012
62,457
3,694
279,550
138,928
80,923
42,291
63,412
3,624
281,564
140,072
81,065
42,782
63,949
3,590
284,753
141,695
81,662
42,926
64,633
3,590
287,344
142,946
81,897
43,080
65,396
3,631
290,831
144,053
82,595
43,271
65,078
3,657
293,166
144,516
83,204
43,295
65,387
3,769
295,546
144,454
83,881
43,162
65,509
3,765
300,108
144,748
84,679
43,450
65,054
3,713
By major type of credit
S Automobile
9
Commercial banks
10
Credit unions
11
Finance companies
12
Savings institutions
246,109
100,907
38,413
92,350
14,439
267,180
108,438
43,474
98,026
17,242
263,823
107,414
42,612
97,261
16,536
264,474
107,727
43,071
96,733
16,943
267,180
108,438
43,474
98,026
17,242
269,883
109,298
43,959
99,147
17,479
273,133
111,021
44,251
100,123
17,738
276,762
113,593
44,795
100,669
17,705
278,567
114,868
45,293
100,564
17,841
279,418
115,951
45,831
99,708
17,928
281,834
117,640
46,438
99,900
17,856
n Revolving
14
Commercial banks
15
Retailers
16
Gasoline companies
17
Savings institutions
18
Credit unions
136,381
86,757
34,320
3,264
8,366
3,674
159,307
98,808
36,959
3,590
13,279
6,671
155,196
97,416
36,270
3,694
11,922
5,894
156,425
97,378
36,501
3,624
12,636
6,286
159,307
98,808
36,959
3,590
13,279
6,671
162,065
100,879
37,087
3,590
13,601
6,908
163,462
101,537
37,231
3,631
13,945
7,117
165,643
103,152
37,408
3,657
14,059
7,368
167,356
104,250
37,414
3,769
14,309
7,614
169,154
105,742
37,259
3,765
14,518
7,870
172,001
108,021
37,526
3,713
14,599
8,140
19 Mobile home
20
Commercial banks
21
Finance companies
22
Savings institutions
26,883
8,926
8,822
9,135
25,957
9,101
7,771
9,085
26,698
9,174
8,228
9,296
26,604
9,169
8,211
9,224
25,957
9,101
7,771
9,085
25,926
9,064
7,753
9,109
25,857
9,035
7,679
9,143
25,732
8,993
7,640
9,099
25,764
9,047
7,575
9,142
25,703
8,966
7,578
9,159
25,498
8,889
7,513
9,095
23 Other
24
Commercial banks
25
Finance companies
26
Credit unions
27
Retailers
28
Savings institutions
162,460
65,549
32,526
34,104
5,340
24,941
160,578
65,217
34,275
30,920
5,823
24,343
161,209
64,851
33,747
32,166
5,742
24,703
161,225
65,276
33,984
31,566
5,790
24,609
160,578
65,217
34,275
30,920
5,823
24,343
161,384
65,512
34,795
30,795
5,839
24,444
161,842
65,750
35,144
30,529
5,849
24,570
161,348
65,094
35,744
30,432
5,863
24,216
161,649
65,001
36,376
30,297
5,880
24,095
162,043
64,887
37,168
30,180
5,903
23,904
162,419
65,557
37,335
30,101
5,923
23,503
1 Total
2
3
4
6
7
Net change (during period)
54,078
41,189
3,949
1,802
4,294
6,236
5,036
5,191
3,851
2,982
5,434
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
20,495
22,670
4,268
466
7,223
-1,044
19,425
6,374
4,874
3,122
7,068
326
2,050
841
321
380
359
-2
695
-308
251
279
955
-70
2,014
1,144
142
491
537
-34
3,189
1,623
597
144
684
0
2,591
1,251
235
154
763
41
3,487
1,107
698
191
-318
26
2,335
463
609
24
309
112
2,380
-62
677
-133
122
-4
4,562
294
798
288
-455
-52
By major type of credit
36 Automobile
Commercial banks
37
38
Credit unions
39
Finance companies
40
Savings institutions
36,473
8,178
2,388
22,823
3,084
21,071
7,531
5,061
5,676
2,803
1,921
729
494
452
246
651
313
459
-528
407
2,706
711
403
1,293
299
2,703
860
485
1,121
237
3,250
1,723
292
976
259
3,629
2,572
544
546
-33
1,805
1,275
498
-105
136
851
1,083
538
-856
87
2,416
1,689
607
192
-72
41 Revolving
Commercial banks
42
43
Retailers
44
Gasoline companies
45
Savings institutions
46
Credit unions
14,368
11,150
47
-1,044
2,078
2,137
22,926
12,051
2,639
326
4,913
2,997
2,643
1,333
329
-2
589
394
1,229
-38
231
-70
714
392
2,882
1,430
458
-34
643
385
2,758
2,071
128
0
322
237
1,397
658
144
41
344
209
2,181
1,615
177
26
114
251
1,713
1,098
6
112
250
246
1,798
1,492
-155
-4
209
256
2,847
2,279
267
-52
81
270
47 Mobile home
Commercial banks
48
49
Finance companies
50
Savings institutions
49
-627
-472
1,148
-926
175
-1,051
-50
-147
17
-7
-157
-94
-5
-17
-72
-647
-68
-440
-139
-31
-37
-18
24
-69
-29
-74
34
-125
-42
-39
-44
32
54
-65
43
-61
-81
3
17
-205
-77
-65
-64
51 Other
52
Commercial banks
53
Finance companies
54
Credit unions
55
Retailers
Savings institutions
56
3,188
1,794
319
-257
419
913
-1,882
-332
1,749
-3,184
483
-598
-468
-29
396
-567
51
-319
16
425
237
-600
48
-94
-647
-59
291
-646
33
-266
806
295
520
-125
16
101
458
238
349
-266
10
126
-494
-656
600
-97
14
-354
301
-93
632
-135
17
-121
394
-114
792
-117
23
-191
376
670
167
-79
20
-401
29 Total
30
31
32
33
34
35
1. The Board's series cover most short- and intermediate-term credit extended
to individuals that is scheduled to be repaid (or has the option of repayment) in
two or more installments.
These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
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.
Consumer Installment Credit
1.56
A41
TERMS OF C O N S U M E R I N S T A L L M E N T CREDIT 1
Percent unless noted otherwise
1987
Item
1985
1986
1988
1987
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
INTEREST R A T E S
1
2
3
4
6
Commercial banks 2
48-month new c a r
24-month personal
120-month mobile home 3
Credit card
Auto finance companies
N e w car
Used car
12.91
15.94
14.96
18.69
11.33
14.82
13.99
18.26
10.45
14.22
13.38
17.92
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.72
14.46
13.45
17.80
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.55
14.40
13.49
17.78
n.a.
n.a.
n.a.
n.a.
11.98
17.59
9.44
15.95
10,73
14.60
12.23
14.97
12.19
14.56
12.26
14.75
12.24
14.77
12.29
14.82
12.29
14.81
12.32
14.83
51.5
41.4
50.0
42.6
53.5
45.2
55.5
45.3
55.5
47.2
55.9
46.8
56.0
46.9
56.2
46.9
56.2
46.9
56.3
46.9
91
94
91
97
93
98
93
99
93
98
94
99
94
98
94
98
94
99
94
99
9,915
6,089
10,665
6,555
11,203
7,420
11,645
7,718
11,534
7,612
11,447
7,619
11,493
7,587
11,553
7,662
11,624
7,778
11,626
7,899
OTHER TERMS4
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. These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
2. Data for midmonth of quarter only.
3. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
4. At auto finance companies.
A42 DomesticNonfinancialStatistics • October 1988
1.57
F U N D S R A I S E D I N U . S . CREDIT M A R K E T S
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1984
Transaction category, sector
1983
1984
1985
1986
1985
1987
1986
1987
H2
HI
H2
H2
HI
HI
H2
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors
By sector and instrument
2 U . S . government
3
Treasury securities
13
18
22
Farm
Other
Farm
550.2
753.9
854.8
831.7
672.2
790.4
722.7
986.8
679.1
984.4
623.1
721.4
186.6
186.7
-.1
198.8
199.0
-.2
223.6
223.7
-.1
215.0
214.7
.4
143.8
142.3
1.5
207.2
207.3
-.1
204.8
204.9
-.1
242.5
242.5
-.1
207.2
207.4
-.1
222.8
222.0
.9
152.8
151.7
1.0
134.9
132.9
2.0
363.6
253.4
53.7
16.0
183.6
117.5
14.2
49.3
2.6
555.1
313.6
50.4
46.1
217.1
129.7
25.1
63.2
-.9
631.1
447.8
136.4
73.8
237.7
151.9
29.2
62.5
-6.0
616.7
452.7
30.8
121.3
300.6
201.2
33.1
74.6
-8.4
528.4
435.6
34.5
99.4
301.7
211.4
25.0
71.5
-6.3
583.3
342.5
67.0
69.8
205.7
119.9
22.4
63.8
-.4
518.0
350.4
67.0
62.2
221.2
139.2
25.0
59.5
-2.5
744.3
545.2
205.8
85.3
254.2
164.7
33.4
65.5
-9.5
471.8
365.6
-15.6
135.3
245.9
163.9
31.3
59.7
-9.0
761.6
539.8
77.2
107.3
355.4
238.6
34.9
89.6
-7.7
470.3
443.6
34.9
97.3
311.4
221.0
30.0
69.8
-9.3
586.4
427.7
34.1
101.6
291.9
201.9
20.1
73.1
-3.2
110.2
56.6
23.2
-.8
31.3
241.5
90.4
67.1
21.7
62.2
183.3
94.6
38.6
14.6
35.5
164.0
65.8
66.5
-9.3
41.0
92.8
41.8
9.3
2.3
39.4
240.8
86.2
63.0
16.8
74.7
167.5
95.3
21.0
14.4
36.8
199.1
93.9
56.2
14.8
34.2
106.3
71.0
12.2
-13.1
36.2
221.7
60.6
120.8
-5.5
45.8
26.7
28.3
-32.6
4.5
26.6
158.8
55.2
51.2
.1
52.2
363.6
34.0
188.2
4.1
77.0
60.3
555.1
27.4
234.6
-.1
97.0
196.0
631.1
91.8
293.4
-13.9
93.1
166.7
616.7
44.3
281.1
-15.1
116.2
190.2
528.4
33.9
248.9
-11.7
103.3
153.9
583.3
38.6
234.2
.4
92.2
217.8
518.0
56.3
259.8
-7.0
85.7
123.2
744.3
127.2
327.1
-20.8
100.5
210.3
471.8
4.3
233.0
-16.9
96.7
154.7
761.6
84.3
329.3
-13.3
135.6
225.8
470.3
33.2
231.1
-17.8
104.5
119.4
586.4
34.7
266.8
-5.6
102.1
188.5
17.3
3.1
3.6
6.5
4.1
8.3
3.8
-6.6
6.2
5.0
1.2
3.8
-2.8
6.2
-6.0
9.0
2.6
-1.0
11.5
-4.0
3.8
6.3
-3.6
2.1
-1.0
-19.4
6.3
-11.9
-4.3
-9.6
-5.8
5.5
-5.8
2.8
-8.2
8.2
2.1
.1
9.6
-3.7
21.5
6.2
1.5
19.1
-5.3
-3.5
-1.1
-3.5
3.9
-2.7
-7.4
-1.7
-3.2
-5.3
2.7
15.0
14.3
-4.1
9.5
-4.7
567.5
762.2
856.0
840.7
676.0
771.0
716.9
995.0
700.5
980.9
615.7
736.3
Financial sectors
31 Total net borrowing by financial sectors . . .
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
By instrument
U.S. government related
Sponsored credit agency securities
Mortgage pool securities
Loans from U.S. government
Private financial sectors
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper
Loans from Federal Home Loan Banks
By sector
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Finance companies
REITs
CMO Issuers
99.3
151.9
199.0
295.3
284.2
150.7
175.1
222.8
242.3
348.2
319.3
249.7
67.8
1.4
66.4
74.9
30.4
44.4
73.5
41.5
.4
.7
16.0
14.9
78.3
48.9
2.3
14.6
12.5
106.3
14.6
89.5
2.2
116.5
48.3
.1
2.9
49.4
15.9
136.1
8.7
126.5
.8
106.2
72.1
.6
4.0
15.1
14.4
220.1
21.7
200.0
-1.5
128.1
66.0
-.5
4.0
33.4
25.2
180.5
8.1
174.0
-1.5
138.7
80.2
.2
-4.7
49.4
13.6
156.5
52.3
104.1
-.1
21.3
-7.0
168.3
30.2
138.8
-.8
116.0
65.8
.3
-3.3
28.8
24.4
96.8
26.6
70.3
77.0
36.2
.4
.7
24.1
15.7
178.1
15.2
163.3
-.4
117.2
69.0
.1
4.0
24.2
19.8
77.3
31.5
45.8
31.5
17.4
101.5
20.6
79.9
1.1
97.4
48.6
.1
2.6
32.0
14.2
1.4
66.4
31.5
5.0
12.1
-2.1
12.9
-.1
3.7
30.4
44.4
77.0
7.3
15.6
22.7
18.9
.1
12.4
21.7
79.9
97.4
-4.9
14.5
22.3
53.9
-.7
12.2
14.9
163.3
117.2
-3.6
4.6
29.8
49.7
-.3
37.1
29.5
138.8
116.0
7.1
3.0
35.7
30.8
1.4
38.0
31.5
45.8
73.5
-5.3
10.8
23.3
29.6
.1
15.0
26.6
70.3
78.3
-4.7
10.2
14.2
49.7
-.6
9.5
16.8
89.5
116.5
-5.0
18.9
30.4
58.1
-.8
14.9
9.5
126.5
106.2
-2.7
-1.7
25.5
53.1
.6
31.4
20.2
200.0
128.1
-4.6
10.9
34.0
46.3
-1.3
42.8
6.6
174.0
138.7
14.1
11.5
27.7
32.9
52.6
52.3
104.1
93.2
.1
-5.6
43.8
28.7
2.9
23.3
*
*
*
93.2
51.4
.3
-1.9
8.2
35.2
All sectors
51 Total net borrowing
666.8
914.1
52
53
54
55
56
57
58
59
254.4
53.7
36.5
183.6
56.6
26.7
26.9
28.4
273.8
50.4
86.1
217.4
90.4
61.1
52.0
82.9
U.S. government securities . .
State and local obligations . . .
Corporate and foreign bonds .
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
1,054.9 1,136.0
960.2
921.8
892.1
1,217.8
942.8
1,329.1
935.0
986.0
393.5
30.8
192.9
300.7
65.8
69.5
26.4
56.5
312.9
34.5
171.5
301.9
41.8
2.4
33.2
62.1
284.5
67.0
117.6
206.0
86.2
51.8
28.6
80.0
301.7
67.0
116.6
221.2
95.3
17.5
31.8
41.1
346.6
205.8
135.7
254.2
93.9
59.2
73.7
48.6
342.5
-15.6
213.6
246.5
71.0
17.7
21.0
46.1
444.5
77.2
172.1
354.9
60.6
121.3
31.7
66.8
334.8
34.9
175.8
311.6
28.3
-40.5
48.6
41.5
291.4
34.1
167.3
292.2
55.2
45.3
17.8
82.7
324.2
136.4
126.1
237.7
94.6
38.3
52.8
44.8
External corporate equity funds raised in United States
60 Total new share issues
61.8
-36.4
19.9
91.6
1.6
-24.9
3.0
36.7
100.8
82.3
84.5
-81.3
61
62
63
64
65
27.2
34.6
28.3
2.6
3.7
29.3
-65.7
-74.5
7.8
.9
85.7
-65.8
-81.5
12.0
3.7
163.3
-71.7
-80.8
8.3
.7
75.4
-73.8
-76.5
5.4
-2.7
32.2
-57.1
-69.4
8.8
3.5
64.2
-61.2
-75.5
11.2
3.1
107.1
-70.4
-87.5
12.8
4.3
155.5
-54.7
-68.7
7.5
6.6
171.1
-88.7
-92.7
9.1
-5.1
147.2
-62.7
-70.0
5.4
1.9
3.6
-84.9
-83.0
5.3
-7.2
Mutual funds
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States.
Flow of Funds
1.58
A43
DIRECT A N D I N D I R E C T SOURCES OF F U N D S TO CREDIT MARKETS
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates.
1984
Transaction category, or sector
1983
1984
1 Total funds advanced in credit markets to domestic
?
3
4
5
6
By public agencies and foreign
Total net advances
U . S . government securities
Residential mortgages
F H L B advances to savings and loans
Other loans and securities
1985
1986
1987
1986
1985
1987
H2
HI
H2
HI
H2
HI
H2
550.2
753.9
854.8
831.7
672.2
790.4
722.7
986.8
679.1
984.4
623.1
721.4
114.0
26.3
76.1
-7.0
18.6
157.6
39.3
56.5
15.7
46.2
202.3
47.1
94.6
14.2
46.3
319.7
84.8
160.3
19.8
54.7
231.6
58.2
135.6
24.4
13.4
182.5
51.0
57.4
14.9
59.2
195.8
50.3
88.6
12.5
44.4
208.7
43.9
100.7
15.9
48.2
264.7
74.0
123.7
14.4
52.6
374.6
95.6
196.9
25.2
56.9
237.0
45.4
166.8
13.6
11.1
226.3
71.0
104.6
35.2
15.4
7
8
9
10
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
9.7
69.8
10.9
23.7
17.1
74.3
8.4
57.9
16.8
101.5
21.6
62.3
9.5
177.3
30.2
102.6
-13.7
166.2
10.0
69.2
26.6
75.2
4.8
75.9
25.1
96.4
27.5
46.8
8.4
106.7
15.8
77.8
10.8
128.2
13.2
112.5
8.2
226.5
47.2
92.7
-16.6
168.1
10.8
74.6
-11.2
164.7
9.1
63.8
II
12
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
67.8
17.3
74.9
8.3
101.5
1.2
178.1
9.0
168.3
3.8
77.3
-19.4
96.8
-5.8
106.3
8.2
136.1
21.5
220.1
-3.5
180.5
-7.4
156.5
15.0
U.S. government securities
State and local obligations
Corporate and foreign bonds
Residential mortgages
Other mortgages and loans
LESS: Federal Home Loan Bank advances
521.3
228.1
53.7
14.5
55.0
162.4
-7.0
679.5
234.5
50.4
35.1
98.2
276.9
15.7
755.2
277.0
136.4
40.8
86.4
228.8
14.2
699.2
308.7
30.8
83.4
74.0
222.1
19.8
612.6
254.7
34.5
85.5
100.8
161.6
24.4
665.7
233.5
67.0
53.0
84.8
242.3
14.9
618.0
251.3
67.0
39.7
75.5
197.0
12.5
892.5
302.7
205.8
42.0
97.4
260.6
15.9
571.9
268.6
-15.6
100.2
71.5
161.7
14.4
826.4
348.9
77.2
66.6
76.5
282.4
25.2
559.3
289.5
34.9
70.3
84.1
94.1
13.6
666.5
220.4
34.1
100.7
117.3
229.2
35.2
Private financial intermediation
70 Credit market funds advanced by private financial
institutions
Commercial banking
71
V
Savings institutions
73
Insurance and pension funds
Other finance
24
395.8
144.3
135.6
100.1
15.8
559.8
168.9
150.2
121.8
118.9
579.5
186.3
83.0
156.0
154.2
726.9
194.7
105.5
176.7
249.9
558.7
136.6
135.8
177.2
109.4
532.1
145.5
133.5
95.3
157.8
483.8
143.3
54.5
139.4
146.5
675.2
229.4
111.4
172.5
161.9
638.5
117.2
94.5
169.0
257.9
815.3
272.3
116.6
184.4
241.9
578.5
99.1
106.4
210.2
162.8
538.9
173.6
165.1
144.2
56.0
75 Sources of funds
Private domestic deposits and RPs
76
27
Credit market borrowing
395.8
215.4
31.5
559.8
316.9
77.0
579.5
213.2
97.4
726.9
271.4
117.2
558.7
163.8
116.0
532.1
353.5
73.5
483.8
191.4
78.3
675.2
235.0
116.5
638.5
252.2
106.2
815.3
290.6
128.1
578.5
60.0
138.7
538.9
265.4
93.2
78
79
30
31
32
148.9
14.6
-5.3
109.7
30.0
165.9
8.8
4.0
118.6
34.5
268.9
19.7
10.3
141.0
98.1
338.3
12.9
1.7
152.8
170.9
279.0
44.0
-5.8
147.8
93.0
105.1
1.7
10.8
74.6
18.0
214.1
10.8
13.9
118.6
71.4
323.6
28.6
6.6
163.4
124.7
280.1
11.9
-4.2
136.6
135.8
396.5
14.0
7.6
168.9
206.1
379.8
24.5
4.3
175.2
175.7
180.3
63.5
-16.0
120.3
12.5
Private domestic nonfinancial
investors
33 Direct lending in credit markets
34
U.S. government securities
35
State and local obligations
36
Corporate and foreign bonds
37
Open market paper
Other
38
157.0
99.3
40.3
-11.6
12.0
17.0
196.7
123.6
30.4
5.2
9.3
28.1
273.2
145.3
47.6
11.8
43.9
24.6
89.4
47.1
-5.4
34.7
-4.8
17.9
169.9
69.4
58.7
23.0
6.8
12.1
207.1
84.3
50.4
36.9
3.0
32.5
212.5
156.2
14.8
15.4
3.5
22.6
333.9
134.5
80.4
8.2
84.2
26.6
39.7
42.2
-67.6
68.8
-17.3
13.6
139.2
51.9
56.8
.7
7.7
22.1
119.5
72.9
25.6
-8.0
19.0
9.9
220.8
66.3
91.8
53.9
-5.5
14.3
39 Deposits and currency
40
Currency
Checkable deposits
41
47
Small time and savings accounts
43
Money market fund shares
44
Large time deposits
4S
Security RPs
Deposits in foreign countries
46
232.8
14.3
28.8
215.4
-39.0
-8.3
18.5
3.1
320.4
8.6
28.0
150.7
49.0
84.3
5.0
-5.1
223.5
12.4
41.5
138.6
8.9
7.6
16.6
-2.1
291.8
14.4
100.1
120.8
43.8
-11.6
18.3
5.9
180.6
19.0
-.2
78.8
27.2
31.0
26.9
-2.2
354.0
3.6
29.9
169.9
73.4
79.1
1.2
-3.1
198.3
15.9
13.8
162.1
10.6
-7.3
12.2
-9.0
248.7
8.8
69.2
115.1
7.1
22.5
21.1
4.9
261.9
10.7
82.5
112.6
46.9
.2
10.0
-.9
321.6
18.2
117.8
129.0
40.6
-23.3
26.5
12.8
45.1
9.6
-21.6
51.7
3.1
4.0
22.7
-24.5
313.9
28.4
21.3
105.9
51.3
55.9
31.0
20.1
47 Total of credit market instruments, deposits, and
currency
Private
13
14
15
16
17
18
19
domestic funds
advanced
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
389.9
517.1
496.7
381.2
350.5
561.1
410.7
582.6
301.6
460.9
164.6
534.7
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
20.1
75.9
38.2
20.7
82.4
66.7
23.6
76.7
82.0
38.0
104.0
115.5
34.3
91.2
113.2
23.7
79.9
77.6
27.3
78.3
57.7
21.0
75.6
106.4
37.8
111.6
124.4
38.2
98.7
106.7
38.5
103.4
99.2
30.7
80.8
127.2
MEMO: Corporate equities not included above
SI Total net issues
5?
Mutual fund shares
53
Other equities
54 Acquisitions by financial institutions
55 Other net purchases
61.8
27.2
34.6
51.1
10.7
-36.4
29.3
-65.7
19.7
-56.1
19.9
85.7
-65.8
43.4
-22.9
91.6
163.3
-71.7
50.6
41.0
1.6
75.4
-73.8
43.0
-41.4
-24.9
32.2
-57.1
39.7
-64.6
3.0
64.2
-61.2
59.5
-55.8
36.7
107.1
-70.4
27.3
9.5
100.8
155.5
-54.7
46.5
54.3
82.3
171.1
-88.7
54.6
27.7
84.5
147.2
-62.7
67.4
17.1
-81.3
3.6
-84.9
18.5
-99.9
48
49
50
N O T E S BY LINE N U M B E R .
1. Line 1 of table 1.57.
2. Sum of lines 3 - 6 or 7-10.
6. Includes farm and commercial mortgages.
11. Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
13. 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.
18. Includes farm and commercial mortgages.
26. Line 39 less lines 40 and 46.
27. Excludes equity issues and investment company shares. Includes line 19.
29. Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign affiliates, less
claims on foreign affiliates and deposits by banking in foreign banks.
30. 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 Governors of the Federal Reserve System, Washington,
D.C. 20551.
A44
2.10
D o m e s t i c Nonfinancial Statistics • October 1988
N O N F I N A N C I A L B U S I N E S S ACTIVITY
Selected Measures 1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1987
1985
Measure
1986
1988
1987
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May r
June
July"
1 Industrial production
123.7
125.1
129.8
133.2
133.9
134.4
134.4
134.7
135.4
136.1
136.6
137.7
Market
groupings
Products, total
Final, total
Consumer g o o d s
Equipment
Intermediate
Materials
130.6
131.0
119.8
145.8
129.3
114.3
133.3
132.5
124.0
143.6
136.2
113.8
138.3
136.8
127.7
148.8
143.5
118.2
141.0
139.2
129.4
152.2
147.3
122.5
141.3
139.8
129.8
153.1
146.5
123.7
142.7
141.1
131.2
154.3
148.1
123.0
143.4
141.6
131.3
155.3
149.4
122.1
143.6
141.8
131.2
155.9
149.9
122.5
144.1
142.5
131.9
156.5
149.6
123.6
144.9
143.3
132.5
157.6
150.1
124.2
145.4
143.9
133.0
158.5
150.6
124.7
146.1
144.8
133.4
159.8
150.8
126.2
126.4
129.1
134.6
137.9
138.9
139.4
139.5
140.0
140.8
141.7
142.0
143.1
80.1
80.3
79.7
78.6
81.1
80.5
82.2
82.9
82.6
83.6
82.7
83.0
82.6
82.3
82.7
82.4
82.9
82.9
83.2
83.2
83.2
83.4
83.7
84.2
2
3
4
5
6
7
Industry
groupings
8 Manufacturing
Capacity utilization (percent) 2
9
Manufacturing
10
Industrial materials industries
3
150.0
158.0
161.0
157.0
157.0
145.0
159.0
154.0
144.0
157.0
165.0
156.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income
Retail sales®
118.3
102.1
97.8
92.6
125.0
206.9
198.8
172.8
205.8
189.6
120.7
100.9
96.3
91.2
129.0
219.7
210.7
177.4
218.9
199.5
124.1
101.8
96.8
92.1
133.4
235.1
226.2
183.8
232.7
209.3
125.7
103.2
98.0
93.2
135.1
241.6
233.3
188.3
239.0
211.9
126.1
103.5
98.3
93.5
135.6
245.0
236.8
188.2
242.1
214.2
126.4
103.4
98.4
93.5
136.1
244.0
235.7
189.4
242.4
214.5
127.0
103.8
98.5
93.7
136.7
245.5
237.3
190.2
244.8
216.7
127.3
104.1
98.6
93.7
137.1
248.0
238.9
193.6
247.0
220.3
127.7
104.5
98.8
93.9
137.4
248.8
240.9
192.8
243.3
219.4
127.9
104.6
99.0
94.1
137.7
250.1
242.3
193.8
249.5
221.2
128.6
105.1
99.3
94.4
138.4
251.7
244.2
195.4
251.3
222.1
128.9
105.5
99.6
94.8
138.7
253.3
246.7
196.9
252.8
223.2
22
23
Prices 7
Consumer (1982-84 = 100)
Producer finished g o o d s (1982 = 100) . . .
107.6
104.7
109.6
103.2
113.6
105.4
115.4
106.3
115.4
105.8
115.7
106.3
116.0
106.1
116.5
106.2
117.1
106.9
117.5
107.5
118.0
107.9
118.5
108.5
11 Construction contracts (1982 = 100)
1. A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. S e e " A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
(1977=100) through D e c e m b e r 1984 in the FEDERAL RESERVE BULLETIN, vol. 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
s h o w n in the September BULLETIN.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal R e s e r v e , McGraw-Hill E c o n o m i c s Department, Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. D o d g e Division.
4. Based on data in Employment
and Earnings ( U . S . Department of Labor).
Series covers e m p l o y e e s only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business ( U . S . Department of Commerce).
6. Based o n Bureau of Census data published in Survey of Current
Business.
7. Data without seasonal adjustment, as published in Monthly Labor
Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U . S . Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current
Business.
Figures for industrial production for the last t w o months are preliminary and
estimated, respectively.
Selected Measures
2.11
A45
L A B O R FORCE, E M P L O Y M E N T , 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.
1987
Category
1985
1986
1988
1987
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June'
July
HOUSEHOLD SURVEY DATA
1 Noninstitutional population 1
180,440
182,822
185,010
185,882
186,083
186,219
186,361
186,478
186,600
186,755
186,911
2 Labor force (including Armed Forces) 1
Civilian labor force
3
117,695
115,461
120,078
117,834
122,122
119,865
122,984
120,722
123,436
121,175
123,598
121,348
123,153
120,903
123,569
121,323
123,204
120,978
123,665
121,472
123,866
121,684
4
5
103,971
3,179
106,434
3,163
109,232
3,208
110,529
3,215
110,836
3,293
111,182
3,228
110,899
3,204
111,485
3,228
111,160
3,035
111,933
3,085
112,014
3,046
8,312
7.2
62,745
8,237
7.0
62,744
7,425
6.2
62,888
6,978
5.8
62,898
7,046
5.8
62,647
6,938
5.7
62,621
6,801
5.6
63,208
6,610
5.4
62,909
6,783
5.6
63,396
6,455
5.3
63,090
6,625
5.4
63,045
97,519
99,525
102,310
104,001
104,262
104,729
105,020
105,281
105,489
106,021
106,304
19,260
927
4,673
5,238
23,073
5,955
22,000
16,394
18,965
777
4,816
5,255
23,683
6,283
23,053
16,693
19,065
721
4,998
5,385
24,381
6,549
24,196
17,015
19,348
735
5,118
5,481
24,768
6,619
24,725
17,207
19,369
728
5,083
5,499
24,937
6,633
24,795
17,218
19,390
731
5,150
5,513
25,080
6,636
24,975
17,254
19,405
733
5,192
5,530
25,111
6,651
25,078
17,320
19,460
737
5,238
5,543
25,182
6,650
25,163
17,308
19,490
739
5,237
5,556
25,245
6,656
25,216
17,350
19,545
740
5,305
5,578
25,358
6,676
25,459
17,360
19,613
740
5,319
5,593
25,464
6,678
25,522
17,375
Nonagricultural industries
Agriculture
Unemployment
6
Number
Rate (percent of civilian labor force)
7
8 Not in labor force
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment 3
10
11
12
13
14
15
16
17
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
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 who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family
workers, and members of the 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 1988
O U T P U T , CAPACITY, A N D CAPACITY UTILIZATION 1
Seasonally adjusted
1988r
1987r
1987
1987
1988
1988
Series
Q3
Q4
Q1
Q2
Q3
Output (1977 = 100)
1 Total
Q4
Q1
Q2
Q3
Capacity (percent of 1977 output)
Q4
Q1
Q2'
Utilization rate (percent)
131.0
133.2
134.5
136.1
161.3
162.2
163.1
164.2
81.2
82.1
82.4
82.9
2 Mining
3 Utilities
100.7
111.8
104.3
112.3
102.5
114.7
103.8
112.8
129.0'
138.8
128.4
139.4
127.7
139.8
127.0
140.1
78.0
80.5
81.2
80.6
80.3
82.0
81.7
80.5
industry
4 Manufacturing
135.7
138.1
139.6
141.5
166.7
167.7
168.9
170.2
81.4
82.3
82.7
83.1
5 Primary processing
6 Advanced p r o c e s s i n g . . .
119.2
145.8
122.2
147.6
123.0
149.7
123.9
152.1
139.8
182.9
140.6
184.1
141.6'
185.6
142.7
186.7
85.3
79.7
86.9
80.1
86.9
80.7
86.9
81.5
7 Materials
119.2
122.5
122.5
124.1
147.2
147.8
148.5
149.3
81.0
82.9
82.5
83.1
8 Durable goods
9
Metal materials
10 Nondurable goods
Textile, paper, and chemical . . .
11
12
Paper
13
Chemical
125.7
83.8
128.2
130.5
144.6
130.2
130.3
91.4
130.1
133.0
145.1
135.5
131.5
86.2
129.4
131.6
145.7
133.5
134.2
88.3
130.6
132.4
145.4
135.7
163.9
109.4
144.7
144.4
145.1
150.9
164.7 r
108.9
145.6
145.4
146.2
152.0'
165.7
108.8
146.8
146.7 r
147.6
153.5 r
166.8
109.1
148.3
148.5
149.2 f
155.4 r
76.7
76.5
88.6
90.4 r
99.6
86.3
79.1
84.0
89.3
91.5
99.2
89.1
79.4
79.2
88.1
89.7 r
98.7
87.0
80.5
80.9
88.1
89.2
97.5
87.3
14 Energy materials
100.0
102.1
100.9
100.9
120.1
119.9
119.7
119.4
83.3
85.2
84.3
84.5
Previous cycle 2
High
Low
Latest cycle 3
1987
Low
July
High
1987
Nov.
1988
Dec/
Jan.
Feb.
Mar/
Apr/
May'
June r
July
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
81.1
82.1
82.4
82.5
82.4
82.4
82.7
82.9
83.1
83.5
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
76.8
80.2
81.5
81.2
81.5
80.0
80.7
82.4
79.5
82.6
80.6
81.0
82.3
79.3
81.1
80.2
81.7
82.1
82.3
82.5
18 Manufacturing
87.7
69.9
86.5
68.0
81.5
82.2
82.6
82.7
82.6
82.7
82.9
83.2
83.2
83.7
19 Primary processing
20 Advanced processing..
91.9
86.0
68.3
71.1
89.1
85.1
65.0
69.5
85.4
79.8
87.0
80.0
87.6
80.3
87.1
80.7
86.6
80.7
86.9
80.7
86.9
81.2
87.0
81.6
86.6
81.7
87.3
82.0
21 Materials
92.0
70.5
89.1
68.5
80.6
82.9
83.6
83.0
82.3
82.4
82.9
83.2
83.4
84.2
22 Durable goods
Metal materials
23
91.8
99.2
64.4
67.1
89.8
93.6
60.9
45.7
76.5
73.8
79.0
83.3
80.0
86.3
79.7
80.1
79.3
79.3
79.1
78.3
79.7
79.3
80.9
82.0
80.8
81.4
81.6
84.6
24 Nondurable goods . . . .
91.1
66.7
88.1
70.7
88.4
89.0
90.8
88.8
87.3
88.3
88.7
87.9
87.6
88.2
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.8
79.9
63.5
90.0
101.6
90.9
91.0
98.7
88.6
93.1
101.6
90.9
90.8
100.6
87.8
88.5
97.8
85.7
89.9
97.8
87.5
90.1
98.1
88.0
88.7
98.1
86.9
88.6
96.3
87.0
89.3
''6
28 Energy materials
94.6
86.9
94.0
82.3
82.4
85.7
84.8
84.7
84.1
84.1
84.5
83.7
85.2
86.3
25
Textile, paper, and
chemical
1. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
2. Monthly high 1973; monthly low 1975.
3. Monthly highs 1978 through 1980; monthly lows 1982.
Selected Measures
2.13
A47
Indexes and Gross Value 1
INDUSTRIAL PRODUCTION
Monthly data are seasonally adjusted
portion
1988
1987
1977
Groups
1987
avg.
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May
June"
July'
Index (1977 = 100)
MAJOR M A R K E T
100.00
129.8
130.6
131.2
131.0
132.5
133.2
133.9
134.4
134.4
134.7
135.4
136.1
136.6
137.7
57.72
44.77
25.52
19.25
12.94
42.28
138.3
136.8
127.7
148.8
143.4
118.2
139.5
137.9
128.9
149.7
145.0
118.5
139.9
138.4
129.4
150.2
145.3
119.4
139.4
137.8
127.7
151.2
144.9
119.7
140.9
139.3
129.0
153.0
146.1
121.2
141.0
139.2
129.4
152.2
147.3
122.5
141.3
139.8
129.8
153.1
146.5
123.7
142.7
141.1
131.2
154.3
148.1
123.0
143.4
141.6
131.3
155.3
149.4
122.1
143.6
141.8
131.2
155.9
149.9
122.5
144.1
142.5
131.9
156.5
149.6
123.6
144.9
143.3
132.5
157.6
150.1
124.2
145.4
143.9
133.0
158.5
150.6
124.7
146.1
144.8
133.4
159.8
150.8
126.2
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
120.2
118.5
115.1
90.7
160.5
123.5
121.6
141.5
142.1
130.7
102.0
120.4
117.5
112.3
86.4
160.4
125.3
122.5
141.7
142.6
134.1
102.2
121.2
118.0
112.4
76.8
178.4
126.6
123.6
147.1
145.5
132.0
102.0
118.6
114.2
107.2
79.1
159.4
124.8
121.9
141.8
140.6
131.6
102.2
124.3
124.3
122.2
94.7
173.2
127.5
124.3
145.7
146.1
132.9
104.1
123.9
121.3
118.7
91.9
168.5
125.2
125.8
150.1
150.5
133.5
103.9
120.3
115.4
110.2
83.7
159.5
123.3
123.9
142.7
142.6
133.9
104.8
121.7
118.7
112.8
77.5
178.3
127.7
124.0
142.2
140.9
134.2
105.2
120.6
117.6
111.8
79.5
171.6
126.4
122.8
140.6
141.4
132.3
104.7
120.4
120.6
116.4
86.3
172.2
126.9
120.2
132.8
132.7
133.1
103.9
123.3
121.9
118.0
91.0
168.2
127.8
124.3
143.2
142.2
133.1
105.7
125.7
127.1
126.9
98.9
178.9
127.3
124.7
142.4
143.0
135.7
105.7
125.2
126.5
125.3
99.0
174.1
128.3
124.1
138.8
137.9
136.4
106.7
124.8
123.7
120.1
93.8
19 Nondurable consumer goods
Consumer staples
70
Consumer foods and tobacco
?1
Nonfood staples
??
?3
Consumer chemical products
Consumer paper products
?4
?5
Consumer energy
Consumer fuel
?6
Residential utilities
27
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
130.5
137.3
136.2
138.5
162.9
151.8
106.3
93.1
119.8
132.1
138.9
137.2
140.6
165.7
153.8
108.0
92.7
123.6
132.5
139.2
137.4
141.2
167.4
153.9
107.7
91.4
124.3
131.0
137.8
137.0
138.6
163.6
153.2
105.0
91.6
118.7
130.8
137.4
137.5
137.2
160.0
151.8
105.8
92.4
119.4
131.5
138.3
137.3
139.4
163.5
152.8
107.4
93.2
121.8
133.3
140.7
139.2
142.2
167.7
157.0
108.0
95.4
120.7
134.7
142.3
140.3
144.3
170.7
157.1
110.6
95.4
126.0
135.3
142.9
140.8
145.0
171.7
157.5
111.3
97.0
125.8
135.1
142.5
139.4
145.7
172.7
159.1
111.0
97.9
124.5
135.1
142.5
138.3
146.8
175.6
161.4
109.6
98.9
120.5
135.1
142.7
139.4
146.1
176.1
161.5
107.3
94.3
120.6
135.8
143.4
140.2
146.8
176.0
162.8
108.2
92.1
136.6
144.4
Equipment
78 Business and defense equipment
79
Business equipment
Construction, mining, and farm
30
Manufacturing
31
3?
Power
33
Commercial
Transit
34
Defense and space equipment
35
18.01
14.34
2.08
3.27
1.27
5.22
2.49
3.67
153.6
144.5
62.2
117.9
82.6
226.5
108.4
188.9
154.4
145.6
65.0
120.4
81.8
227.9
106.1
188.7
154.5
145.6
66.4
120.9
82.8
227.7
104.7
189.1
155.2
146.3
66.1
122.0
81.1
229.1
105.1
189.8
157.2
148.7
66.5
120.5
83.0
232.4
112.5
190.3
156.6
148.3
66.3
120.6
83.1
232.1
111.2
188.7
157.8
149.8
67.4
122.2
84.2
235.5
109.1
188.9
159.2
151.2
67.1
125.4
86.2
238.0
106.5
190.6
160.3
152.4
67.6
124.9
88.3
240.3
108.2
191.0
160.8
153.3
68.3
127.0
87.8
239.9
111.1
189.9
161.4
154.6
70.8
127.7
87.0
241.5
112.3
187.9
162.7
156.8
71.1
128.6
87.1
245.5
115.2
185.6
163.5
158.2
72.3
129.6
88.3
247.4
116.3
184.3
164.8
159.7
72.9
131.8
89.3
249.9
115.9
185.0
5.95
6.99
5.67
1.31
131.5
153.5
158.6
131.1
133.1
155.2
160.5
132.3
132.5
156.3
161.0
135.8
132.3
155.6
160.9
132.7
133.3
157.1
162.3
134.6
134.2
158.4
164.3
132.9
133.8
157.4
163.3
131.8
136.8
157.8
163.1
135.0
137.7
159.4
165.0
135.3
137.3
160.7
166.6
135.3
137.6
159.9
165.7
134.6
138.3
160.2
165.4
137.8
138.2
161.1
165.9
140.3
137.8
20.50
4.92
5.94
9.64
4.64
125.0
100.9
159.0
116.4
86.7
125.2
98.5
159.3
117.7
86.6
125.5
99.6
159.5
117.9
90.4
126.4
99.0
161.1
118.9
91.3
128.7
102.3
162.2
121.6
95.3
130.2
103.1
163.2
123.6
96.5
132.0
104.6
165.3
125.5
100.0
131.8
104.7
167.4
123.7
92.9
131.4
104.4
167.6
123.0
91.4
131.3
103.5
167.3
123.4
90.5
132.7
106.2
168.9
124.0
91.6
134.9
109.6
170.7
125.7
94.6
135.0
109.8
171.1
125.6
94.3
136.7
110.0
172.9
128.0
98.1
45 Nondurable goods materials
46
Textile, paper, and chemical
materials
47
Textile materials
48
Pulp and paper materials
Chemical materials
49
Miscellaneous nondurable materials . . .
50
10.09
125.8
127.6
128.3
128.6
128.2
129.6
132.5
129.9
128.1
130.1
131.1
130.4
130.4
131.7
7.53
1.52
1.55
4.46
2.57
127.6
111.7
141.0
128.4
120.4
129.6
117.8
145.4
128.1
122.0
130.6
116.7
145.0
130.4
121.4
131.2
116.0
143.3
132.2
120.9
131.0
113.0
142.0
133.4
119.7
132.3
112.7
144.4
134.7
121.7
135.6
113.6
149.0
138.4
123.3
132.7
112.6
148.0
134.2
121.8
129.9
110.2
144.4
131.5
123.0
132.4
112.7
144.8
134.8
123.2
133.3
111.9
145.8
136.2
124.6
131.7
107.0
146.4
135.1
126.5
132.1
109.5
144.1
135.7
133.6
51 Energy materials
5?
Primary energy
Converted fuel materials
53
11.69
7.57
4.12
99.8
105.0
90.3
99.0
102.5
92.5
100.9
104.6
94.1
100.2
104.6
92.2
101.8
106.8
92.7
102.8
108.4
92.6
101.7
107.7
90.7
101.4
107.3
90.6
100.6
104.8
93.0
100.6
105.0
92.6
101.0
106.7
90.5
100.0
104.3
92.1
101.6
105.6
94.3
102.8
1 Total index
?
Final products
Consumer goods
Equipment
6
Intermediate products
7 Materials
4
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
Home goods
14
Appliances, A/C and TV
15
Appliances and TV
16
Carpeting
and furniture
17
Miscellaneous home goods
18
Intermediate
products
36 Construction supplies
37 Business supplies
General business supplies
38
Commercial energy products
39
Materials
40 Durable goods materials
Durable consumer parts
41
47
Durable materials n.e.c
43
Basic metal materials
44
129.1
125.6
141.4
148!6
A48 Domestic Nonfinancial Statistics • October 1988
2.13
INDUSTRIAL PRODUCTION Indexes and Gross Value 1 —Continued
Groups
SIC
code
1977
1987
1988
1987
avg.
July
Sept.
Aug.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May
June p
July'
Index (1977 = 100)
MAJOR I N D U S T R Y
140.8
142.3
139.7
106.5
103.0
112.3
141.7
141.9
141.5
107.9
103.5
115.2
142.0
142.5
141.7
108.5
104.1
115.8
143.1
143.6
142.8
84.9
129.1
94.8
136.9
86.9
136.0
95.5
141.2
84.9
127.8
95.0
142.4
126.9
96.0
140.1
132.6
95.3
15.79
9.83
5.96
84.21
35.11
49.10
104.3
100.7
110.3
134.6
136.7
133.1
103.7
99.2
111.2
135.6
138.5
133.5
105.4
100.9
112.9
135.9
138.8
133.8
105.4
101.9
111.2
135.7
138.6
133.7
106.8
103.6
112.1
137.3
138.1
136.8
107.9
104.6
113.2
137.9
139.6
136.7
107.3
104.6
111.7
138.9
141.3
137.3
107.8
103.3
115.2
139.4
141.4
137.9
106.8
101.5
115.6
139.5
141.1
138.4
106.7
102.7
113.3
140.0
141.7
138.8
107.1
104.7
10
11.12
13
14
.50
1.60
7.07
.66
77.5
131.8
92.7
128.2
71.4
127.9
91.8
130.7
79.3
130.5
93.0
130.3
86.5
133.3
93.3
130.0
85.6
140.3
94.1
131.0
90.4
142.9
94.2
134.1
96.5
140.6
94.1
135.6
91.5
140.2
93.1
132.1
83.9
133.7
92.4
134.3
1 Mining and utilities
2
Mining
3
Utilities
4 Manufacturing
5
Nondurable
6
Durable
111.0
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
137.7
103.4
115.8
107.4
144.4
138.5
106.8
118.3
109.7
148.8
138.8
110.4
119.8
108.4
148.9
139.5
101.7
118.2
107.6
147.4
138.0
103.7
116.8
108.0
146.0
138.9
106.5
117.3
109.4
148.3
140.1
110.5
118.2
107.8
150.6
141.2
105.8
116.2
108.7
149.9
141.9
107.0
115.3
108.5
148.0
141.1
107.2
117.0
108.7
149.1
140.3
107.2
117.3
109.2
149.2
141.4
106.8
114.2
108.6
149.5
142.0
16
17
18
19
20
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products
27
28
29
30
31
4.54
8.05
2.40
2.80
.53
172.0
140.1
93.5
163.6
60.0
174.0
140.8
94.1
167.2
59.2
174.7
142.3
92.9
164.8
61.3
174.9
142.4
93.5
165.2
60.7
175.2
141.5
94.6
166.7
59.6
175.7
144.4
93.3
169.9
60.7
176.9
147.9
96.1
170.6
57.5
177.5
147.9
96.3
170.5
58.3
178.7
145.4
95.9
172.3
59.7
180.4
146.4
98.4
172.2
59.5
181.8
148.9
98.5
172.3
58.0
180.1
148.4
95.0
173.8
57.1
182.2
149.1
94.2
174.8
57.6
Durable
manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, and stone products.
24
25
32
2.30
1.27
2.72
130.3
152.8
119.1
132.8
156.2
118.8
131.1
155.2
116.5
126.9
155.9
118.6
129.8
156.0
118.9
134.0
158.5
120.5
133.6
159.4
120.1
136.3
158.0
120.4
139.0
158.3
121.6
137.8
159.4
122.5
138.0
159.2
121.4
139.9
159.6
121.5
138.6
160.9
122.4
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
111.0
111.1
81.4
70.9
111.1
84.5
74.6
152.7
172.3
155.3
172.5
85.1
76.0
110.1
154.3
174.3
156.6
173.4
90.6
82.0
113.5
158.0
175.5
90.2
79.7
113.6
157.2
175.6
90.6
81.9
115.8
161.0
175.9
86.5
77.8
117.1
162.9
177.4
86.4
77.4
117.6
163.6
177.8
85.1
74.2
118.8
164.6
176.6
85.3
74.5
118.8
167.2
178.7
89.2
78.6
120.0
170.0
179.0
87.6
75.0
120.6
171.3
179.4
121.1
173.5
181.0
37
371
9.13
5.25
129.2
111.8
127.6
109.4
128.1
109.1
125.5
105.6
132.0
116.0
130.4
114.0
128.1
110.2
128.6
109.7
128.4
109.3
130.0
113.0
130.4
114.8
133.1
119.6
132.4
119.0
132.3
116.9
372-6.9
38
39
3.87
2.66
1.46
152.8
143.9
102.6
152.3
143.8
100.5
153.9
146.3
102.2
152.5
145.6
102.1
153.7
146.7
104.6
152.7
147.8
104.5
152.4
145.5
105.6
154.2
148.2
105.0
154.5
149.2
104.4
153.0
149.7
105.1
151.5
150.5
105.9
151.5
151.3
106.8
150.6
152.8
107.7
153.3
154.4
4.17
126.6
131.0
132.0
127.5
126.8
127.5
125.6
130.3
130.7
129.0
127.6
129.7
133.7
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
81.5
70.8
115.9
146.9
183.2
94.7
91.4
Gross value (billions of 1982 dollars, annual rates)
MAJOR M A R K E T
35 Products, total
517.5
1,735.8 1,732.5 1,741.7 1,735.9 1,774.1 1,772.4 1,778.8 1,790.6 1,797.5 1,807.5 1,812.2 1,819.2 1,816.9 1,809.5
36 Final
37
Consumer goods
38
Equipment
39 Intermediate
405.7
272.7
133.0
111.9
1,333.8 1,326.6 1,334.9 1,330.3 1,360.9 1,359.9 1,359.4 1,375.5 1,381.1 1,385.9 1,393.9 1,397.1 1,396.8 1,389.5
898.5 894.0 892.4
866.0 863.2 866.4 856.9 876.6 879.8 881.2 893.6 893.7
893.2 899.1
467.8 463.5 468.5 473.4 484.4 480.1 478.2 481.9 487.3 492.7 494.7 498.7 502.7
497.2
402.0 405.9 406.8 405.6 413.2 412.5 419.4 415.1
416.5
421.6 418.4 422.0 420.1
419.8
1. These data also appear in the Board's G. 12.3 (414) release. For address, see
inside front cover.
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 Production" and accompanying tables that contain revised indexes
(1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
Selected Measures
2.14
A49
H O U S I N G A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1988
1987
Item
1985
1986
1987
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May'
June
Private residential real estate activity (thousands of units)
N E W UNITS
111
1,750
1,071
679
1,535
1,024
511
1,501
983
518
1,453
962
491
1,459
971
488
1,372
957
415
1,248
918
330
1,429
1,003
426
1,476
1,030
446
1,449
960
489
1,436
982
454
1,493
1,002
491
1,742
1,072
669
1,805
1,179
626
1,621
1,146
474
1,679
1,211
468
1,538
1,105
433
1,661
1,129
532
1,399
1,035
364
1,382
1,016
366
1,519
1,102
417
1,529
1,172
357
1,584
1,093
491
1,393
1,004
389
1,454
1,089
365
1,063
539
524
1,074
583
490
987
591
397
1,046
627
419
1,044
627
417
1,042
625
417
1,016
618
398
1,008
614
394
983
596
387
999
617
382
999
622
377
984
610
374
984
612
372
1,703
1,072
631
1,756
1,120
637
1,669
1,123
546
1,591
1,100
491
1,565
1,114
451
1,571
1,088
483
1,624
1,104
520
1,550
1,098
452
1,452
1,043
409
1,598
1,094
1,665
1,059
1,455
1,093
1,485
1,080
606
362
405
1 Permits authorized
2
1-family
2-or-more-family
3
1,733
957
4 Started
1-family
5
6
2-or-more-family
7 Under construction, end of period 1 .
1-family
8
9
2-or-more-family
10 Completed
11
1-family
12
2-or-more-family
504
13 Mobile homes shipped
284
244
233
240
234
222
227
200
208
212
213
216
230
Merchant builder activity in
1-family units
14 Number sold
15 Number for sale, end of period
688
350
748
672
370
644
361
653
360
625
362
586
365
579
368
648
359
664
372
681
368
677
372
734
370
Price (thousands
of
361
dollars)2
16
Units sold
Average
17
Units sold
84.3
92.2
104.7
106.5
106.5
117.0
111.8
119.0
110.9
108.9
111.0
110.0
117.8
101.0
112.2
127.9
133.5
125.8
139.2
136.2
144.4
137.6
133.2
135.6
133.6
141.2
3,217
3,566
3,530
3,430
3,470
3,370
3,330
3,170
3,250
3,330
3,520
3,590
3,780
75.4
90.6
80.3
98.3
85.6
106.2
85.5
106.9
84.6
106.1
85.0
106.6
85.4
107.1
87.4
108.7
88.1
110.4
87.9
110.7
87.3
108.7
88.8
111.9
90.6
115.1
EXISTING U N I T S ( 1 - f a m i l y )
18 Number sold
Price of units sold
(thousands of dollars)2
20 Average
Value of new construction 3 (millions of dollars)
CONSTRUCTION
21 Total put in place
355,735
386,093
398,848
405,375
400,818
407,066
410,870
395,264
392,456
403,555
399,163
402,269
402,771
22 Private
23
Residential
24
Nonresidential, total
Buildings
25
Industrial
26
Commercial
27
Other
28
Public utilities and other
291,665
158,475
133,190
314,651
187,147
127,504
323,819
194,772
129,047
327,131
194,801
132,330
325,915
194,547
131,368
331,497
195,599
135,898
331,641
195,822
135,819
321,550
195,168
126,382
317,754
192,097
125,657
324,257
195,554
128,703
319,979
191,665
128,314
322,545
189,936
132,609
324,166
188,144
136,022
15,769
59,629
12,619
45,173
13,747
56,762
13,216
43,779
13,707
55,448
15,464
44,428
15,332
56,531
15,497
44,970
13,968
56,890
16,018
44,492
14,512
59,374
16,692
45,320
14,130
55,831
17,708
48,150
13,480
53,555
16,954
42,393
13,489
53,571
17,101
41,496
14,546
54,843
17,301
42,013
15,235
56,023
16,409
40,647
15,753
57,419
16,972
42,465
16,742
57,308
17,199
44,773
64,070
3,235
21,540
4,777
34,518
71,437
3,868
22,681
4,646
40,242
75,028
4,327
22,758
5,162
42,781
78,244
6,048
23,145
5,023
44,028
74,903
4,010
24.374
5,144
41.375
75,569
5,080
23,439
4,871
42,179
79,228
4,879
25,274
5,759
43,316
73,715
4,172
24,808
4,038
40,697
74,702
3,280
25,348
4,535
41,539
79,298
4,216
26,963
4,899
43,220
79,184
4,414
27,276
4,470
43,024
79,724
4,273
25,254
4,744
45,453
78,604
4,633
24,919
4,774
44,278
29 Public
30
Military
31
Highway
32
Conservation and d e v e l o p m e n t . . .
33
Other
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly
comparable with data in prior periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports ( C - 3 0 - 7 6 - 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 Domestic Nonfinancial Statistics • October 1988
2.15
C O N S U M E R A N D PRODUCER PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Item
Change from 3 months earlier
(at annual rate)
1987
1987
1988
July
July
Change from 1 month earlier
1988
Index
level
July
1988
1988'
Dec.
Mar/
June'
July
Mar/
Apr/
May
June
July
CONSUMER PRICES 2
(1982-84=100)
1
All items
3.9
4.1
3.9
3.2
4.2
4.5
.5
.4
.3
.3
.4
118.5
2
3
4
5
6
Food
Energy items
All items less food and energy
Commodities
Services
4.2
4.4
4.0
2.9
4.6
4.5
.3
4.5
3.6
4.9
2.1
6.0
3.8
2.9
4.3
2.8
-3.9
4.4
2.5
5.0
1.4
-4.9
5.4
4.7
5.9
7.1
4.2
4.3
3.9
4.5
.3
.0
.6
.7
.5
.7
.8
.4
.6
.2
.4
.5
.2
.2
.4
.6
-.2
.4
.2
.5
1.0
.3
.3
.3
.4
118.8
91.4
123.3
115.2
128.0
3.4
2.5
13.0
2.7
1.8
2.4
2.5
-4.3
4.1
2.3
3.8
-1.8
16.5
4.6
4.0
-1.9
-5.7
-9.6
1.7
-.7
2.7
6.0
-18.5
5.7
3.2
4.6
9.4
4.8
2.4
3.6
.6
.8
1.2
.3
.2
.3
.3
2.7
-.1
.2
.5
.9
.2
.3
.4
.4
1.1
-1.6
.3
.4
.5
.4
.0
.9
.1
108.5
113.7
60.7
118.9
114.2
4.0
3.0
5.4
7.2
5.6
5.3
4.3
7.2
4.3
8.2
7.4
6.9
.5
.6
.7
.6
.6
.5
.6
.5
.6
.7
107.7
115.7
4.0
17.9
10.2
11.7
-14.0
14.8
-4.8
5.9
39.4
-4.8
-15.2
18.0
17.7
-24.1
15.9
30.5
12.2
-7.0
.8
-2.4
1.1
.2
2.6
-.3
2.4
1.3
-1.7
4.2
-1.0
.2
1.5
-5.4
1.9
109.9
66.9
132.8
PRODUCER PRICES
(1982=100)
) Finished goods
8
Consumer foods
9
Consumer energy
10
Other consumer goods
11
Capital equipment
12
13
Intermediate materials 3
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 N A T I O N A L PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1987
Account
1985
1986
1988
1987
Q2
Q3
Q4
QL
Q2'
GROSS N A T I O N A L P R O D U C T
4,014.9
4,240.3
4,526.7
4,484.2
4,568.0
4,662.8
4,724.5
4,819.7
2,629.0
372.2
911.2
1,345.6
2,807.5
406.5
943.6
1,457.3
3,012.1
421.9
997.9
1,592.3
2,992.2
420.5
995.3
1,576.4
3,058.2
441.4
1,006.6
1,610.2
3,076.3
422.0
1,012.4
1,641.9
3,128.1
437.8
1,016.2
1,674.1
3,189.1
448.2
1,035.7
1,705.2
643.1
631.8
442.9
153.2
289.7
188.8
665.9
650.4
433.9
138.5
295.4
216.6
712.9
673.7
446.8
139.5
307.3
226.9
698.5
665.8
438.2
134.4
303.8
227.6
702.8
688.3
462.1
143.0
319.1
226.2
764.9
692.9
464.1
147.7
316.3
228.8
763.4
698.1
471.5
140.1
331.3
226.6
758.2
715.3
488.2
145.4
342.8
227.1
11.3
14.6
15.5
17.4
39.2
40.7
32.7
31.4
14.5
17.8
72.0
72.8
65.3
49.4
42.9
32.5
14 Net exports of goods and services
15
Exports
Imports
16
-78.0
370.9
448.9
-104.4
378.4
482.8
-123.0
428.0
551.1
-122.2
416.8
539.0
-125.2
440.4
565.6
-125.7
459.7
585.4
-112.1
487.8
599.9
-88.6
508.0
596.6
17 Government purchases of goods and services
18
Federal
19
State and local
820.8
355.2
465.6
871.2
366.2
505.0
924.7
382.0
542.8
915.7
377.5
538.2
932.2
386.3
546.0
947.3
391.4
555.9
945.2
377.7
567.5
961.0
381.6
579.4
4,003.6
1,641.2
706.5
934.6
1,968.3
405.4
4,224.7
1,697.9
725.3
972.6
2,118.3
424.0
4,487.5
1,792.5
776.3
1,016.3
2,295.7
438.4
4,451.5
1,774.6
767.1
1,007.5
2,276.2
433.4
4,553.5
1,812.9
792.2
1,020.7
2,314.4
440.6
4,590.7
1,849.4
808.7
1,040.7
2,363.9
449.5
4,659.2
1,879.4
819.3
1,060.1
2,405.2
439.9
4,776.9
1,924.8
846.7
1,078.1
2,447.5
447.4
11.3
6.4
4.9
15.5
4.2
11.3
39.2
26.6
12.6
32.7
24.3
8.4
14.5
2.9
11.6
72.0
50.5
21.6
65.3
26.6
38.6
42.9
17.4
25.5
3,618.7
3,721.7
3,847.0
3,823.0
3,865.3
3,923.0
3,956.1
3,988.1
30 Total
3,234.0
3,437.1
3,678.7
3,631.8
3,708.0
3,802.0
3,850.8
3,933.9
31 Compensation of employees
32
Wages and salaries
Government and government enterprises
33
34
Other
35
Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
2,367.5
1,975.2
372.0
1,603.4
392.4
204.8
187.6
2,507.1
2,094.0
393.7
1,700.3
413.1
217.0
196.1
2,683.4
2,248.4
420.1
1,828.3
435.0
227.1
207.9
2,652.0
2,220.6
416.9
1,803.7
431.3
225.0
206.4
2,702.8
2,265.3
423.2
1,842.1
437.5
228.2
209.3
2,769.9
2,324.8
429.2
1,895.6
445.1
232.7
212.4
2,816.4
2,358.7
437.1
1,921.6
457.7
243.1
214.6
2,874.0
2,410.0
443.0
1,967.0
464.0
247.5
216.5
255.9
225.6
30.2
286.7
250.3
36.4
312.9
270.0
43.0
308.9
265.9
43.0
306.8
271.5
35.2
326.0
279.0
47.0
323.9
279.2
44.7
328.2
285.4
42.7
1 Total
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
13
Change in business inventories
Nonfarm
By major type of
20 Final sales, total
21
Goods
22
Durable
23
Nondurable
24
Services
25
Structures
product
26 Change in business inventories
27
Durable goods
28
Nondurable goods
29 M E M O
Total GNP in 1982 dollars
N A T I O N A L INCOME
38 Proprietors' income 1
39
Business and professional 1
Farm 1
40
41 Rental income of persons 2
9.2
12.4
18.4
17.8
18.1
20.5
20.5
19.0
42 Corporate profits 1
43
Profits before tax
44
Inventory valuation adjustment
45
Capital consumption adjustment
282.3
224.3
-1.7
59.7
298.9
236.4
8.3
54.2
310.4
276.7
-18.0
51.7
305.2
273.7
-20.0
51.5
322.0
289.4
-19.5
52.1
316.1
281.9
-18.2
52.4
316.2
286.2
-19.4
49.4
332.0
310.7
-27.1
48.4
46 Net interest
319.0
331.9
353.6
348.1
358.3
369.5
373.9
380.8
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A52 Domestic Nonfinancial Statistics • October 1988
2.17
P E R S O N A L INCOME A N D S A V I N G
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1988
1987
1985
Account
1986
1987
Q2r
Q2
Q3
Q4
3,736.1
3,801.0
3,906.8
3,951.4
4,021.9
2,358.7
676.0
509.6
558.2
687.4
437.1
2,410.0
689.1
517.4
572.2
705.7
443.0
214.6
323.9
279.2
44.7
20.5
93.5
554.2
576.3
298.1
216.5
328.2
285.4
42.7
19.0
95.0
563.7
583.0
300.4
Ql
PERSONAL INCOME A N D S A V I N G
1 Total personal income
3,325.3
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises
8 Other labor income
9 Proprietors' income 1
10
Business and professional 1
11
Farm 1
12 Rental income of persons
14 Personal interest income
15 Transfer payments
16
Old-age survivors, disability, and health insurance benefits
17
...
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
3,531.1
3,780.0
1,975.4
608.9
460.9
473.2
521.3
372.0
2,094.0
625.5
473.1
498.9
575.9
393.7
2,248.4
649.8
490.3
531.7
646.8
420.1
2,220.6
642.8
484.6
526.1
634.8
416.9
2,265.1
652.8
492.6
536.8
652.4
423.0
2,325.1
665.5
501.3
547.3
682.8
429.5
187.6
255.9
225.6
30.2
9.2
78.7
478.0
489.8
253.4
196.1
286.7
250.3
36.4
12.4
82.8
499.1
521.1
269.3
207.9
312.9
270.0
43.0
18.4
88.6
527.0
548.8
282.9
206.4
308.9
265.9
43.0
17.8
87.3
517.9
547.8
282.8
209.3
306.8
271.5
35.2
18.1
89.9
533.0
551.7
284.5
212.4
326.0
279.0
47.0
20.5
91.9
550.0
556.8
286.5
149.3
161.1
172.0
170.5
172.7
175.9
190.2
193.5
3,325.3
3,531.1
3,780.0
3,736.1
3,801.0
3,906.8
3,951.4
4,021.9
486.6
511.4
570.3
582.0
576.2
591.0
575.8
601.0
20 EQUALS: Disposable personal income
2,838.7
3,019.6
3,209.7
3,154.1
3,224.9
3,315.8
3,375.6
3,421.0
21
LESS: Personal outlays
2,713.3
2,898.0
3,105.5
3,084.7
3,152.3
3,171.8
3,225.7
3,288.3
22 EQUALS: Personal saving
125.4
121.7
104.2
69.5
72.6
144.0
149.9
132.6
15,122.0
9,840.3
10,625.0
4.4
15,398.0
10,158.0
10,929.0
4.0
15,772.8
10,336.2
11,012.0
3.2
15,700.2
10,335.1
10,889.0
2.2
15,834.9
10,426.8
10,989.0
2.3
16,031.8
10,346.1
11,145.0
4.3
16,127.6
10,435.4
11,260.0
4.4
16,224.9
10,484.9
11,247.0
3.9
533.5
537.2
560.4
542.4
556.8
603.4
627.0
645.3
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)
GROSS S A V I N G
27 Gross saving
28 Gross private saving
30 Undistributed corporate profits 1
31 Corporate inventory valuation adjustment
Capital consumption
34
681.6
121.7
104.1
8.3
665.3
104.2
81.1
-18.0
625.0
69.5
78.5
-20.0
642.2
72.6
85.0
-19.5
714.1
144.0
80.5
-18.2
726.3
149.9
78.1
-19.4
268.6
168.7
282.4
173.5
297.5
182.5
295.4
181.6
299.7
184.9
303.7
185.8
309.8
188.5
312.9
189.7
-131.8
-196.9
65.1
-144.4
-205.6
61.2
-104.9
-157.8
52.9
-82.6
-144.0
61.4
-85.5
-138.3
52.9
-110.7
-160.4
49.7
-99.2
-155.1
55.8
-74.7
-130.9
56.2
528.7
523.6
552.3
539.9
541.7
597.0
612.0
631.0
643.1
-114.4
665.9
-142.4
712.9
-160.6
698.5
-158.6
702.8
-161.1
764.9
-167.8
763.4
-151.3
758.2
-127.2
-4.8
-13.6
-8.1
-2.5
-15.1
-6.4
-15.0
-14.3
allowances
Government surplus, or deficit ( - ) , national income and
product accounts
38 Gross private domestic
39 Net foreign
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
665.3
125.4
102.6
-1.7
720.0
132.6
84.8
-27.1
SOURCE. Survey of Current Business
(Department of Commerce).
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
1988
1987
Item credits or debits
1985
1986
1987
Ql
Q2
Q3
Q4
Qlp
-37,624
-33,032
-39,871
56,791
-96,662
-78
5,076
-143
-867
-2,100
-40,852
-41,799
-39,552
59,864
-99,416
-179
1,692
13
-884
-2,241
-41,967
-47,330
-39,665
64,902
-104,567
-851
1,067
87
-855
-2,125
-33,523
-31,803
-41,192
68,013
-109,205
-1,261
12,539
479
-828
-3,545
-39,751
-34,937
-35,945
74,672
-110,617
-899
-595
735
-868
-2,283
-115,102
-138,827
-153,964
-122,148
215,935
-338,083
-3,431
25,936
-449
-3,786
-11,223
-144,547
223,969
-368,516
-4,372
23,143
2,257
-3,571
-11,738
-160,280
249,570
-409,850
-2,369
20,374
1,755
-3,434
-10,011
11 Change in U.S. government assets, other than official
reserve assets, net (increase, —)
-2,829
-2,000
1,162
67
-170
252
1,012
-780
12 Change in U.S. official reserve assets (increase, - )
13
Gold
14
Special drawing rights (SDRs)
15
Reserve position in International Monetary Fund
16
Foreign currencies
-3,858
0
-897
908
-3,869
312
0
-246
1,500
-942
9,149
0
-509
2,070
7,588
1,956
0
76
606
1,274
3,419
0
-171
335
3,255
32
0
-210
407
-165
3,741
0
-205
722
3,225
1,503
0
155
446
901
17 Change in U.S. private assets abroad (increase, - ) 3
18
Bank-reported claims
19
Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U . S . direct investments abroad, net 3
-25,949
-1,323
923
-7,481
-18,068
-96,303
-59,975
-4,220
-4,297
-27,811
-86,298
-40,531
3,145
-4,456
-44,456
9,049
21,870
-491
-1,639
-10,691
-26,127
-22,422
2,603
-88
-6,220
-25,576
-16,519
-215
-972
-7,870
-43,645
-23,460
1,248
-1,757
-19,676
8,169
17,402
-4,388
-4,845
22 Change in foreign official assets in the United States
(increase, + )
23
U.S. Treasury securities
24
Other U . S . government obligations
25
Other U . S . government liabilities
26
Other U.S. liabilities reported by U.S. banks
27
Other foreign official assets
-1,196
-838
-301
767
645
-1,469
35,507
34,364
-1,214
2,054
1,187
-884
44,968
43,361
1,570
-2,824
3,901
-1,040
13,977
12,193
-62
-1,337
3,543
-360
10,332
11,083
256
-1,309
615
-313
611
842
714
-287
-34
-624
20,047
19,243
662
108
-223
257
24,372
27,568
-116
-251
-1,996
-833
28 Change in foreign private assets in the United States
(increase, + ) 3
29
U . S . bank-reported liabilities
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
Foreign direct investments in the United States, net
33
131,096
41,045
-366
20,433
50,962
19,022
185,746
79,783
-2,906
3,809
70,969
34,091
166,521
87,778
2,150
-7,596
42,213
41,976
19,122
-6,100
1,696
-2,826
18,373
7,979
40,327
17,961
1,570
-2,431
15,998
7,229
71,047
46,153
-116
-2,835
12,819
15,026
36,025
29,764
-1,000
496
-4,977
11,742
3,504
-15,994
0
17,839
0
15,566
0
18,461
0
-6,547
4,141
0
13,071
-2,615
0
-4,399
-4,658
0
16,342
3,138
0
2,984
3,925
17,839
15,566
18,461
-10,688
15,686
259
13,204
-941
1 Balance on current account
2
Not seasonally adjusted
3
Merchandise trade balance 2
4
Merchandise exports
5
Merchandise imports
6
Military transactions, net
7
Investment income, net 3
8
Other service transactions, net
9
Remittances, pensions, and other transfers
10
U.S. government grants (excluding military)
34 Allocation of SDRs
35 Discrepancy
36
Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
adjustment
7,001
2,328
10,169
MEMO
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in the United States (increase, + )
excluding line 25
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
-3,858
312
9,149
1,956
3,419
32
3,741
1,503
— 1,963
33,453
47,792
15,314
11,641
898
19,939
24,623
-6,709
-9,327
-9,956
-2,801
-2,681
-1,723
-2,750
-1,331
46
101
58
8
26
13
12
15
1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and
38-41.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing. Military
exports are excluded from merchandise data and are included in line 6.
3. Includes reinvested earnings.
4. Primarily associated with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business
(Department of Commerce).
A54 International Statistics • October 1988
3.11
U . S . FOREIGN TRADE 1
Millions of dollars; monthly data are not seasonally adjusted.
1987
Item
1
EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments, f.a.s. value
2
G E N E R A L IMPORTS including
merchandise for immediate
consumption plus entries into
bonded warehouses, c.i.f. value . . . .
3
Trade balance
1985
218,815
1986
227,159
254,122
Dec.
Jan.
Feb.
Mar.
Apr.
May r
June
24,314
22,990
24,139
29,106
26,335
28,143
27,385
352,463
382,295
424,442
37,340
34,523
37,133
38,633
36,528
37,657
40,008
-133,648
-155,137
-170,320
-13,026
-11,533
-12,994
-9,528
-10,193
-9,514
-12,624
1. The Census basis data differ from merchandise trade data shown in table
3.10, U.S. International Transactions Summary, for reasons of coverage and
timing. On the export side, the largest adjustment is the exclusion of military sales
(which are combined with other military transactions and reported separately in
the "service account" in table 3.10, line 6). On the import side, additions are made
for gold, ship purchases, imports of electricity from Canada, and other transac-
3.12
1988
1987
tions; military payments are excluded and shown separately as indicated above.
As of Jan. 1, 1987 census data are released 45 days after the end of the month.
Total exports and the trade balance reflect adjustments for undocumented exports
to Canada.
SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(Department of Commerce, Bureau of the Census).
U.S. RESERVE ASSETS
Millions of dollars, end of period
1988
Type
1985
1986
1987
Jan.
Feb.
Mar.
Apr.
May
June
July"
45,798
42,955
43,064
43,186
42,730
41,949
41,028
43,876
1
Total
43,186
48,511
2
Gold stock, including Exchange
Stabilization Fund 1
11,090
11,064
11,078
11,068
11,063
11,063
11,063
11,063
11,063
11,063
3
Special drawing rights 2,3
7,293
8,395
10,283
9,765
9,761
9,899
9,589
9,543
9,180
8,984
4
Reserve position in International
Monetary Fund 2
11,947
11,730
11,349
10,804
10.445
10,645
10,803
10,431
9,992
9,773
12,856
17,322
13,088
11,318
11,795
11,579
11,275
10,912
10,793
14,056
5
Foreign currencies
4
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdiings and reserve position
3.13
in the IMF also are valued on this basis beginning July 1974.
3. Includes allocations by the International Monetary Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus transactions in SDRs.
4. Valued at current market exchange rates.
FOREIGN OFFICIAL A S S E T S H E L D AT F E D E R A L R E S E R V E B A N K S 1
Millions of dollars, end of period
1988
Assets
1985
1986
1987
Jan.
1 Deposits
Assets held in custody
i
2 U.S. Treasury securities
3 Earmarked gold 3
Mar.
Apr.
May
June
July
480
287
244
355
343
534
215
297
381
269
121,004
14,245
155,835
14,048
195,126
13,919
206,675
13,882
215,308
13,824
222,407
13,773
224,725
13,719
226,341
13,654
223,127
13,662
223,296
13,666
1. Excludes deposits and U . S . Treasury securities held for international and
regional organizations.
2. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
Feb.
3. Earmarked gold and the gold stock are valued at $42.22 per fine troy ounce,
Earmarked gold is gold held for foreign and international accounts and is not
included in the pold stock of the United States.
Summary Statistics
3.14
FOREIGN B R A N C H E S OF U . S . B A N K S
A55
Balance Sheet Data 1
Millions of dollars, end of period
1988
1987
Asset account
Dec.
Jan.
Feb.
Mar.
Apr.
May
June''
All foreign countries
1 Total, all currencies
2 Claims on United States
3
Parent bank
4
Other banks in United States
5
Nonbanks
6 Claims on foreigners
7
Other branches of parent bank
8
Banks
9
Public borrowers
Nonbank foreigners
10
453,656
458,012
456,628
518,604
503,254
495,003
502,398
488,939
492,844
487,822
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
114,563
83,492
13,685
17,386
312,955
96,281
105,237
23,706
87,731
138,034
105,845
16,416
15,773
342,506
122,155
108,856
21,828
89,667
131,376
95,482
14,910
20,984
334,074
115,275
108,161
21,329
89,309
131,012
94,348
15,008
21,656
326,653
111,671
105,604
21,331
88,047
135,514'
99,109'
14,587'
21,818'
328,153'
108,972
106,761'
21,748
90,672
139,186
102,957
13,271'
22,958'
314,338
103,090
101,226
20,827
89,195
141,789
104,299
14,483
23,007
315,303
102,931
103,429
20,991
87,952
141,076
104,568
14,283
22,225
311,322
106,722
100,686
20,439
83,475
20,101
22,630
29,110
38,064
37,804
37,338
38,731
35,415
35,752
35,424
12 Total payable in U.S. dollars
350,636
336,520
317,487
350,106
335,313
330,726
333,874
327,736
334,112
335,207
13 Claims on United States
14
Parent bank
15
Other banks in United States
16
Nonbanks
17 Claims on foreigners
18
Other branches of parent bank
19
Banks
20
Public borrowers
21
Nonbank foreigners
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
110,620
82,082
12,830
15,708
195,063
72,197
66,421
16,708
39,737
132,023
103,251
14,657
14,115
202,427
88,284
63,706
14,730
35,707
124,893
92,466
13,439
18,988
196,154
84,468
61,359
14,720
35,607
124,786
91,271
13,886
19,629
190,922
83,063
58,181
14,645
35,033
128,945'
95,844'
13,270'
19,831'
190,583'
81,692
58,099'
14,853
35,939
133,299
100,320
12,257'
20,722'
179,712
75,654
54,578
14,407
35,073
136,077
101,578
13,458
21,041
182,981
76,136
57,102
14,342
35,401
135,492
101,585
13,520
20,387
183,641
79,774
55,234
13,924
34,709
10,610
9,753
11,804
15,656
14,266
15,018
14,346
14,725
15,054
16,074
11 Other assets
22 Other assets
United Kingdom
23 Total, all currencies
144,385
148,599
140,917
158,695
160,244
157,634
155,657
152,592
156,184
151,835
24 Claims on United States
25
Parent bank
26
Other banks in United States
27
Nonbanks
28 Claims on foreigners
29
Other branches of parent bank
30
Banks
31
Public borrowers
32
Nonbank foreigners
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
32,518
27,350
1,259
3,909
115,700
39,903
36,735
4,752
34,310
32,464
26,923
1,558
3,983
118,407
39,702
39,697
4,639
34,369
32,869
27,484
1,527
3,858
115,489
38,077
38,654
4,613
34,145
29,581'
24,580'
1,191'
3,810'
116,975'
34,278
40,247'
5,312
37,138
31,618
26,155
1,013
4,450
112,261
33,019
38,790
4,914
35,538
32,832
27,506
1,360
3,966
114,452
33,849
39,883
4,987
35,733
33,852
28,535
1,322
3,995
107,856
32,446
37,108
4,742
33,560
33 Other assets
34 Total payable in U.S. dollars
35 Claims on United States
36
Parent bank
37
Other banks in United States
38
Nonbanks
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
42
Public borrowers
43
Nonbank foreigners
44 Other assets
4,882
5,225
6,810
10,477
9,373
9,276
9,101
8,713
8,900
10,127
112,809
108,626
95,028
100,574
102,148
101,642
95,972
93,214
97,188
95,326
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
30,439
26,304
1,044
3,091
64,560
28,635
19,188
3,313
13,424
30,156
25,854
1,132
3,170
67,458
29,336
20,814
3,313
13,995
30,971
26,565
1,273
3,133
66,313
29,813
19,516
3,347
13,637
27,388'
23,285'
1,025'
3,078'
64,247'
26,812
19,656'
3,864
13,915
29,555
25,137
781
3,637
59,434
24,867
18,065
3,412
13,090
30,736
26,608
1,068
3,060
62,018
25,448
19,555
3,252
13,763
31,855
27,672
1,069
3,114
57,969
23,843
17,477
3,188
13,461
2,996
3,059
3,697
5,575
4,534
4,358
4,337
4,225
4,434
5,502
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
47
Parent bank
48
Other banks in United States
49
Nonbanks
50 Claims on foreigners
51
Other branches of parent bank
52
Banks
53
Public borrowers
54
Nonbank foreigners
55 Other assets
56 Total payable in U.S. dollars
146,811
142,055
142,592
160,321
148,718
143,630
153,254
152,930
156,353
159,747
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
78,048
54,575
11,156
12,317
60,005
17,296
27,476
7,051
8,182
85,318
60,048
14,277
10,993
70,162
21,277
33,751
7,428
7,706
79,893
51,249
12,472
16,172
63,469
19,802
29,340
7,257
7,070
78,015
48,402
12,662
16,951
60,111
18,486
27,687
7,063
6,875
85,847
56,330
12,400
17,117
61,952
19,368
28,637
6,891
7,056
88,293
59,240
11,409
17,644
58,808
17,790
26,690
6,849
7,479
90,896
60,419
12,348
18,129
59,374
18,463
27,019
6,955
6,937
88,144
58,626
12,122
17,396
65,856
24,745
27,650
6,836
6,625
3,917
3,309
4,539
4,841
5,356
5,504
5,455
5,829
6,083
5,747
141,562
136,794
136,813
151,434
141,135
135,916
145,050
145,398
148,545
152,248
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
A56 International Statistics • October 1988
3.14—Continued
1987
1988
Liability account
Dec.
Jan.
Feb.
Mar.
Apr.
May
June p
All foreign countries
57 Total, all currencies
453,656
458,012
456,628
518,604
503,254
495,003
502,398
488,939
492,844
487,822
58 Negotiable CDs
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
37,725
147,583
78,739
18,409
50,435
34,607
156,281
84,657
16,894
54,730
31,629
152,465
83,394
15,646
53,425
30,929
161,390
87,606
20,559
53,225
29,277
150,676
78,590
15,801
56,285
31,158
149,402
85,142
14,237
50,023
31,854
157,063
91,628
14,806
50,629
31,585
155,381'
85,586'
16,246'
53,549
32,175
162,002
86,944
15,389
59,669
29,485
156,351
87,431
14,625
54,295
63 To foreigners
64
Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
247,907
93,909
78,203
20,281
55,514
20,441
245,939
89,529
76,814
19,520
60,076
21,185
253,775
95,146
77,809
17,835
62,985
18,759
304,790
124,601
87,261
19,564
73,364
21,495
302,042
116,434
89,552
21,130
74,926
21,259
293,360
111,949
88,400
20,373
72,638
21,083
290,064
109,071
88,257
18,608
74,128
23,417
281,162'
105,148'
85,097
18,006
72,911
20,811
277,106
104,667
82,499
17,700
72,240
21,561
281,027
110,418
82,494
17,159
70,956
20,959
69 Total payable in U.S. dollars
367,145
353,712
336,406
361,438
344,805
341,536
344,395
337,122
341,729
341,556
70 Negotiable CDs
71 To United States
72
Parent bank
73
Other banks in United States
74
Nonbanks
35,227
143,571
76,254
17,935
49,382
31,063
150,905
81,631
16,264
53,010
28,466
144,483
79,305
14,609
50,569
26,768
148,442
81,783
19,155
47,504
24,785
139,185
73,064
14,433
51,688
26,386
138,737
79,363
12,918
46,456
26,869
144,983
84,801
13,501
46,681
26,596
144,783'
79,904'
15,035 r
49,844
27,233
149,576
80,378
13,999
55,199
25,015
144,514
80,927
13,186
50,401
75 To foreigners
76
Other branches of parent bank
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
178,260
77,770
45,123
15,773
39,594
10,087
163,583
71,078
37,365
14,359
40,781
8,161
156,806
71,181
33,850
12,371
39,404
6,651
177,711
90,469
35,065
12,409
39,768
8,517
172,285
84,298
33,315
12,736
41,936
8,550
167,623
82,9%
32,278
12,071
40,278
8,790
163,275
81,073
30,688
10,489
41,025
9,268
156,848'
76,708 r
29,924
10,539
39,677
8,895
155,519
76,920
28,712
10,028
39,859
9,401
162,151
83,482
29,014
9,571
40,084
9,876
United Kingdom
144,385
148,599
140,917
158,695
160,244
157,634
155,657
152,592
156,184
151,835
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonbanks
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
26,988
23,470
13,223
1,740
8,507
25,184
25,209
14,177
1,596
9,436
26,786
26,382
15,527
1,615
9,240
27,279
22,725
14,506
1,768
6,451
27,090
23,868
14,904
1,508
7,456
27,659
27,145
15,518
2,408
9,219
25,390
25,120
15,9%
1,791
7,333
87 To foreigners
88
Other branches of parent bank
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
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
98,689
33,078
34,290
11,015
20,306
9,548
100,001
33,344
34,820
11,571
20,266
9,850
94,235
30,350
33,520
11,048
19,317
10,231
95,049
30,211
33,316
9,624
21,898
10,604
92,219
27,383
32,970
10,181
21,685
9,415
91,995
28,743
31,995
9,672
21,585
9,385
91,691
28,%7
33,125
8,893
20,706
9,634
81 Total, all currencies
117,497
112,697
99,707
102,550
105,138
105,162
98,982
96,532
99,378
97,555
94 Negotiable CDs
95 T o United States
96
Parent bank
97
Other banks in United States
98
Nonbanks
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
24,926
17,752
12,026
1,512
4,214
22,875
20,799
13,307
1,398
6,094
24,281
23,019
14,626
1,401
6,992
24,716
19,116
13,622
1,556
3,938
24,392
20,310
13,947
1,306
5,057
24,994
22,405
14,134
2,184
6,087
22,960
20,889
14,712
1,512
4,665
99 To foreigners
100
Other branches of parent bank
101
Banks
102
Official institutions
103
Nonbank foreigners
104 Other liabilities
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
55,919
22,334
15,580
7,530
10,475
3,953
57,620
22,870
16,119
7,993
10,638
3,844
53,444
21,753
14,401
7,045
10,245
4,418
50,590
21,292
13,106
5,181
11,011
4,560
47,589
18,060
12,889
5,918
10,722
4,241
47,%9
18,902
12,860
5,470
10,737
4,010
48,777
20,303
12,957
4,700
10,817
4,929
93 Total payable in U.S. dollars
Bahamas and Caymans
105 Total, all currencies
146,811
142,055
142,592
160,321
148,718
143,630
153,254
152,930
156,353
159,747
106 Negotiable CDs
107 To United States
108
Parent bank
109
Other banks in United States
110
Nonbanks
615
102,955
47,162
13,938
41,855
610
104,556
45,554
12,778
46,224
847
106,081
49,481
11,715
44,885
885
113,950
53,239
17,224
43,487
851
105,147
46,594
13,017
45,536
940
99,821
48,976
11,455
39,390
1,069
110,451
55,981
11,829
42,641
1,038
109,199
50,623
13,621
44,955
1,0%
112,605
51,792
11,684
49,129
941
109,424
52,280
11,451
45,693
40,320
16,782
12,405
2,054
9,079
2,921
35,053
14,075
10,669
1,776
8,533
1,836
34,400
12,631
8,617
2,719
10,433
1,264
43,815
19,185
10,769
1,504
12,357
1,671
40,822
18,629
9,344
1,377
11,472
1,898
41,234
18,604
9,825
1,179
11,626
1,635
40,038
17,260
9,404
1,873
11,501
1,6%
40,953
19,420
9,162
1,164
11,207
1,740
40,369
18,909
9,080
1,053
11,327
2,283
47,390
24,755
9,803
1,850
10,982
1,992
143,582
138,322
138,774
152,927
141,750
136,636
145,366
146,134
148,923
151,713
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
Summary Statistics
3.15
A57
S E L E C T E D U . S . LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1987
Item
1 Total 1
By type
2 Liabilities reported by banks in the United States
3 U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
4
Marketable
5
Nonmarketable
6 U.S. securities other than U . S . Treasury securities
7
8
9
10
11
12
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries 6
1985
Dec.
Jan.
Feb.
Mar.
Apr.
May
June p
178,380
211,834
259,517
266,925
276,233
286,547
286,547 r
294,747
290,733
26,734
53,252
27,920
75,650
31,833
88,829
32,528
90,635
32,121
93,407
29,879
95,624
29,683 r
94,974
31,460
96,604
30,714
95,300
77,154
3,550
17,690
91,368
1,300
15,596
122,432
300
16,123
127,550
300
15,912
134,719
300
15,686
142,865
792
15,170
145,940
795
15,155
150,002
499
15,182
149,272
502
14,945
74,447
1,315
11,148
86,448
1,824
3,199
88,629
2,004
8,417
105,868
1,503
5,412
124,620
4,961
8,328
116,060
1,402
4,147
127,753
6,182
7,950
119,139
1,458
4,442
127,614
6,839
8,296
127,304
1,495
4,682
129,376
7,954
8,734
131,423
1,512
4,839
129,791 r
8,314
8,520
132,016
1,417
5,993
131,457
9,372
9,145
135,086
1,418
7,773
126,609
10,773
9,319
134,427
1,266
7,837
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
3.16
1988
1986
bonds and notes payable in foreign currencies.
5. Debt securities of U . S . government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
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 A N D CLAIMS O N FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies 1
Millions of dollars, end of period
1987
Item
1 Banks' own liabilities
2 Banks' own claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers
1984
8,586
11,984
4,998
6,986
569
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
1985
15,368
16,294
8,437
7,857
580
1988
1986
29,702
26,180
14,129
12,052
2,507
June
Sept.
Dec.
Mar.
39,487
34,209
12,043
22,166
923
46,800
41,239
14,535
26,704
1,067
55,688
50,486
18,109
32,377
551
55,871
51,344
17,463
33,881
810
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A58 International Statistics • October 1988
3.17
LIABILITIES TO FOREIGNERS
Payable in U . S . dollars
Reported by Banks in the United States
Millions of dollars, end of period
1987
Holder and type of liability
1984
1985
1988
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June p
1 All foreigners
407,306
435,726
540,9%
618,903
601,332
605,301
607,023
611,259'
628,668
635,190
2 Banks' own liabilities
3
Demand deposits
4
Time deposits 1
5
Other.
6
Own foreign offices 3
306,898
19,571
110,413
26,268
150,646
341,070
21,107
117,278
29,305
173,381
406,485
23,789
130,891
42,705
209,100
469,829
22,718
148,401
51,120
247,590
446,391
20,740
138,964
52,694
233,993
446,235
21,129
140,178
52,661
232,268
444,887
21,889
137,890
46,997
238,110
449,323 r
20,777
134,335'
45,642 r
248,570'
464,797
23,259
138,164
47,351
256,022
475,168
24,360
140,468
47,656
262,684
100,408
76,368
94,656
69,133
134,511
90,398
149,074
101,743
154,941
103,861
159,066
107,087
162,136
109,233
161,935
107,881
163,871
108,803
160,022
107,649
18,747
5,293
17,964
7,558
15,417
28,696
16,791
30,540
16,727
34,353
15,650
36,328
16,121
36,783
16,017
38,038
16,595
38,472
16,504
35,869
7 Banks' custody liabilities 4
8
U . S . Treasury bills and certificates 5
9
Other negotiable and readily transferable
instruments 6
10
Other
11 Nonmonetary international and regional
organizations
4,454
5,821
5,807
4,387
5,875
8,640
6,033
4,575
6,889
7,879
12 Banks' own liabilities
13
Demand deposits
14
Time deposits
15
Other 2 .
2,014
254
1,267
493
2,621
85
2,067
469
3,958
199
2,065
1,693
2,626
249
1,538
839
4,052
70
1,583
2,398
6,629
74
2,481
4,074
4,031
134
2,061
1,836
2,412
67
335
2,010
4,898
695
1,981
2,223
5,142
1,202
1,873
2,068
16 Banks' custody liabilities 4
17
U.S. Treasury bills and certificates
18
Other negotiable and readily transferable
instruments 6
19
Other
2,440
916
3,200
1,736
1,849
259
1,761
265
1,823
613
2,011
415
2,002
635
2,163
587
1,991
132
2,737
745
1,524
0
1,464
0
1,590
0
1,497
0
1,210
0
1,521
75
1,351
16
1,564
11
1,852
7
1,989
3
20 Official institutions
8
86,065
79,985
103,569
120,662
123,163
125,527
125,503
124,657'
128,065
126,013
21 Banks' own liabilities
22
Demand deposits
23
Time deposits'
24
Other
19,039
1,823
9,374
7,842
20,835
2,077
10,949
7,809
25,427
2,267
10,497
12,663
28,698
1,949
12,843
13,906
29,901
1,605
11,913
16,383
29,234
1,861
11,654
15,719
26,928
2,021
11,749
13,158
26,623'
1,660
11,753'
13,209
28,451
2,351
12,860
13,240
27,979
1,860
12,012
14,107
25 Banks' custody liabilities 4
26
U.S. Treasury bills and certificates 5
27
Other negotiable and readily transferable
instruments
28
Other
67,026
59,976
59,150
53,252
78,142
75,650
91,965
88,829
93,262
90,635
%,294
93,407
98,575
95,624
98,033
94,974
99,613
96,604
98,034
95,300
6,966
84
5,824
75
2,347
145
2,990
146
2,442
185
2,592
295
2,750
201
2,939
120
2,775
234
2,528
207
29 Banks 9
248,893
275,589
351,745
414,152
391,750
390,848
395,463
401,972'
413,092
421,514
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits
34
Other.
35
Own foreign offices
225,368
74,722
10,556
47,095
17.071
150,646
252,723
79,341
10,271
49,510
19,561
173,381
310,166
101,066
10,303
64,232
26,531
209,100
371,471
123,880
10,915
79,710
33,256
247,590
345,597
111,605
9,786
71,130
30,689
233,993
344,040
111,773
9,759
71,709
30,305
232,268
347,937
109,827
10,000
70,171
29,655
238,110
353,971'
105,402'
9,438
68,128'
27,835'
248,57C
364,747
108,725
10,260
69,543
28,923
256,022
374,399
111,715
11,060
71,724
28,931
262,684
23,525
11,448
22,866
9,832
41,579
9,984
42,682
9,134
46,152
8,979
46,808
9,526
47,526
9,597
48,000
8,889
48,345
8,872
47,115
8,173
7,236
4,841
6,040
6,994
5,165
26,431
5,392
28,156
5,580
31,594
4,436
32,846
4,627
33,303
4,637
34,474
4,341
35,132
4,747
34,196
36 Banks' custody liabilities 4
37
U . S . Treasury bills and certificates
38
Other negotiable and readily transferable
instruments 6
39
Other
40 Other foreigners
67,894
74,331
79,875
79,701
80,544
80,285
80,024
80,055
80,622
79,784
41 Banks' own liabilities
42
Demand deposits
Time deposits
43
44
Other.
60,477
6,938
52,678
861
64,892
8,673
54,752
1,467
66,934
11,019
54,097
1,818
67,034
9,605
54,310
3,119
66,841
9,279
54,338
3,224
66,332
9,435
54,334
2,563
65,990
9,734
53,909
2,347
66,317
9,612
54,118
2,586
66,700
9,953
53,781
2,966
67,648
10,239
54,859
2,551
7,417
4,029
9,439
4,314
12,941
4,506
12,666
3,515
13,703
3,633
13,953
3,740
14,034
3,378
13,739
3,430
13,922
3,1%
12,136
3,432
3,021
367
4,636
489
6,315
2,120
6,914
2,238
7,495
2,575
7,102
3,112
7,393
3,263
6,876
3,433
7,628
3,099
7,240
1,464
10,476
9,845
7,4%
7,314
7,647
7,370
7,325
7,480
8,261
7,650
45 Banks' custody liabilities 4
46
U . S . Treasury bills and certificates
47
Other negotiable and readily transferable
instruments 6
48
Other
49 MEMO: Negotiable time certificates of deposit in
custody for foreigners
1. Excludes negotiable time certificates of deposit, which are included in
"Other 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. Data exclude "holdings of
dollars" of the International Monetary Fund.
8. Foreign central banks, 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
Area and country
1984
1985
1988
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June p
1 Total
407,306
435,726
540,996
618,903
601,332
605,301
607,023
611,259'
628,668
635,190
2 Foreign countries
402,852
429,905
535,189
614,516
595,457
596,660
600,990
606,684 r
621,779
627,311
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
180,556
1,181
6,729
482
580
22,862
5,762
700
10,875
5,600
735
699
2,407
884
30,534
454
85,334
630
3,326
80
702
234,651
920
9,347
760
377
29,954
7,047
689
12,073
5,014
1,362
801
2,621
1,379
33,765
703
116,717
710
9,798
31
582
225,552
992
9,433
551
401
28,198
7,701
638
11,259
5,272
1,196
725
2,359
1,393
31,932
674
111,845
541
9,683
37
721
226,517
964
9,832
659
369
28,868
8,872
639
11,001
5,302
828
780
2,433
1,719
32,006
541
112,207
557
8,340
49
549
213,023
958
8,804
930
405
28,449
6,594
656
10,076
5,399
917
877
2,618
1,836
31,815
616
101,590
550
9,244
66
623
218,567'
1,172
9,629'
1,034
504
27,040
6,893'
656
10,040
5,154'
1,101
917
2,415'
1,692'
30,523'
518
109,547'
566
8,473'
44
649'
227,853
1,090
9,893
1,164
478
28,189
6,483
675
9,285
5,757
1,239
910
2,839
2,280
31,343
628
115,434
586
8,984
136
460
226,527
941
10,358
1,363
431
26,964
5,095
653
10,690
5,351
1,171
910
4,120
1,535
30,213
1,477
114,428
690
9,275
246
615
3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
Finland
7
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
Norway
13
14
Portugal
15
Spain
Sweden
16
Switzerland
17
18
Turkey
United Kingdom
19
20
Yugoslavia
Other Western Europe
21
22
U.S.S.R
Other Eastern Europe
23
16,059
17,427
26,345
30,084
28,691
25,967
27,330
27,010'
27,875
30,055
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
210,318
4,757
73,619
2,922
4,325
72,263
2,054
4,285
7
1,236
1,123
136
13,745
4,970
6,886
1,163
1,537
10,171
5,119
220,365
5,006
74,590
2,335
4,003
81,675
2,210
4,208
12
1,082
1,082
160
14,480
4,972
7,414
1,275
1,580
9,048
5,234
212,097
4,902
69,205
2,187
3,937
78,503
2,122
3,947
8
1,115
1,098
150
15,024
4,987
7,329
1,235
1,670
9,174
5,502
212,731
5,092
64,964
2,021
3,747
82,625
2,361
3,897
9
1,133
1,098
148
15,186
5,231
6,983
1,328
1,753
9,729
5,426
222,136
5,101
70,266
2,214
4,074
88,344
2,314
3,833
8
1,169
1,182
208
15,783
5,207
4,306
1,364
1,763
9,411
5,591
225,890'
5,307
69,970'
2,402
3,992
92,722'
2,251
3,843
13
1,174
1,209
209
15,347
5,345
4,059
1,424
1,743
9,564
5,315
229,548
5,219
74,123
2,927
4,119
91,188
2,184
4,395
9
1,206
1,191
152
15,866
5,348
4,005
1,423
1,715
9,255
5,221
231,879
5,875
73,522
1,998
4,646
93,924
2,378
4,502
10
1,206
1,208
156
15,680
5,306
4,156
1,441
1,879
8,728
5,264
71,187
72,280
108,831
121,401
121,245
122,973
129,265
125,649'
125,587
127,866
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
18,902
9,393
674
1,547
1,892
47,410
1,141
1,866
1,119
12,352
11,058
1,162
21,503
10,196
582
1,399
1,292
54,418
1,637
1,085
1,345
13,994
12,788
1,336
22,878
9,579
571
1,474
1,270
55,221
1,709
1,035
1,433
12,503
12,237
1,352
23,884
10,010
879
1,583
1,333
56,346
1,502
1,009
1,354
12,408
11,311
1,562
24,005
10,011
659
1,547
1,400
60,334
1,593
1,095
1,189
12,735
13,135
1,814'
23,982
9,631
675
1,063'
1,292
58,567
1,574
1,015
1,181
12,647'
12,208
1,921
23,874
10,209
619
1,016
1,190
58,021
1,476
975
1,448
12,412
12,426
1,725
23,064
9,240
940
1,049
1,334
60,759
1,561
951
1,095
12,099
14,048
3,396
647
118
328
153
1,189
961
4,883
1,363
163
388
163
1,494
1,312
4,021
706
92
270
74
1,519
1,360
3,945
1,151
194
202
67
1,014
1,316
3,758
1,142
71
214
89
981
1,261
3,756
1,119
69
194
86
1,047
1,241
4,034
1,099
75
387
81
1,062
1,330
3,878
1,218
68
195
82
1,008
1,307
4,054
1,196
65
266
63
1,090
1,373
4,028
1,186
73
245
60
1,121
1,343
64 Other countries
65
Australia
66
All other
5,684
5,300
384
3,347
2,779
568
5,118
4,196
922
4,070
3,327
744
4,114
3,319
795
4,717
3,814
903
5,203
4,154
1,048
5,689
4,885
804
6,862
5,943
919
6,956
6,016
940
67 Nonmonetary international and regional
organizations
International
68
69
Latin American regional
Other regional 6
70
4,454
3,747
587
120
5,821
4,806
894
121
5,807
4,620
1,033
154
4,387
2,754
1,272
362
5,875
4,301
1,181
393
8,640
6,600
1,505
536
6,033
4,330
1,305
397
4,575
2,691
1,528
356
6,889
4,955
1,727
207
7,879
5,924
1,769
186
24 Canada
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
Chile
31
32
Colombia
Cuba
33
34
Ecuador
35
Guatemala
36
Jamaica
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
Uruguay
41
Venezuela
42
Other
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
Other
57
58
59
60
61
62
63
Egypt
Morocco
South Africa
Zaire
Oil-exporting countries 4
Other
1. Includes the Bank for International Settlements and Eastern European
countries that are not listed in line 23.
2. 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, Gabon, Libya, and Nigeria.
5. Excludes "holdings of dollars" of the International Monetary Fund.
6. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
A59
A60 International Statistics • October 1988
3.18
B A N K S ' O W N CLAIMS O N F O R E I G N E R S Reported by Banks in the United States
Payable in U . S . Dollars
Millions of dollars, end of period
1987
Area and country
1984
1985
1988
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June"
1 Total
400,162
401,608
444,745
460,261
443,890
442,204
442,486
431,724 r
449,881
457,633
2 Foreign countries
399,363
400,577
441,724
456,857
441,191
439,980
440,360
430,412 r
448,735
455,088
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
107,823
728
7,498
688
987
11,356
1,816
648
9,043
3,296
672
739
1,492
1,964
3,352
1,543
58,335
1,835
539
345
948
102,324
793
9,382
717
1,010
13,475
2,061
461
7,467
2,619
934
477
1,849
2,269
2,689
1,681
50,839
1,700
660
389
852
97,437
762
9,626
852
876
11,680
2,195
576
6,508
2,902
842
471
1,628
2,106
2,569
1,637
48,753
1,694
578
386
795
100,441
800
9,793
746
835
12,268
1,927
711
6,164
2,879
746
499
1,965
2,274
3,086
1,660
50,493
1,702
725
380
790
94,574
846
8,254
874
729
12,226
1,881
6%
6,453
2,780
627
425
1,761
2,229
2,237
1,593
47,430
1,658
747
328
802
93,236'
893'
8,792'
612'
993
10,791
1,610'
513
6,211
2,865'
650
439
1,766'
2,347'
2,452
1,733
47,133'
1,618'
573
377
866'
100,668
867
8,726
632
1,106
12,145
1,894
558
6,606
2,766
886
400
1,911
2,480
3,093
1,543
51,657
1,586
598
339
876
100,901
805
7,887
640
954
12,192
2,839
590
7,053
2,644
589
358
1,864
2,087
3,274
1,495
52,037
1,623
662
506
800
3 Europe
4
Austria
5
Belgium-Luxembourg
Denmark
6
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
16,109
16,482
21,006
25,284
23,457
21,930
21,155
22,044'
23,796
24,582
25 Latin America and Caribbean
Argentina
26
27
Bahamas
Bermuda
28
29
Brazil
30
British West Indies
31
Chile
32
Colombia
Cuba
33
Ecuador
34
35
Guatemala 3
36
Jamaica 3
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
43
Other Latin America and Caribbean
24 Canada
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
208,825
12,091
59,342
418
25,716
46,284
6,558
2,821
0
2,439
140
198
30,698
1,041
5,436
1,661
940
11,108
1,936
214,807
11,990
64,744
474
25,879
49,944
6,305
2,740
1
2,286
144
188
29,534
980
4,739
1,323
968
10,834
1,735
208,046
12,032
60,879
375
25,932
47,882
6,327
2,709
0
2,339
134
202
29,139
1,009
4,304
1,316
961
10,753
1,753
203,500
11,977
57,415
311
25,905
47,340
6,260
2,668
0
2,238
140
191
29,217
1,146
3,818
1,336
955
10,872
1,710
209,103
12,226
58,264
1,471
25,993
52,529
6,099
2,652
0
2,239
149
201
27,974
1,159
3,108
1,277
929
11,005
1,831
199,557'
12,288'
54,625'
669
26,099'
47,486'
6,132'
2,721'
1
2,883'
141
212
27,303'
1,304
2,749
1,283
913
10,944
1,805
203,036
12,312
59,239
366
26,119
47,997
5,998
3,082
0
2,197
149
177
26,670
1,434
2,586
1,277
880
10,833
1,719
201,596
12,345
56,365
1,302
26,263
49,516
5,856
3,088
1
2,140
144
184
26,239
1,229
2,483
1,145
885
10,778
1,631
44 Asia
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries
Other Asia
66,316
66,212
96,126
106,472
105,025
106,870
108,148
108,480'
113,729
120,115
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
2,681
8,307
321
723
1,634
59,674
7,182
2,217
578
4,122
7,901
968
4,577
8,216
510
580
1,363
69,113
5,094
2,069
493
4,858
8,633
886
3,877
7,593
495
566
1,282
71,229
4,943
1,961
520
3,567
8,108
887
3,813
7,948
548
632
1,211
73,215
4,777
1,966
521
3,454
7,897
1,0%
3,554
8,473
565
645
1,238
72,797
5,011
2,074
541
3,538
8,616
1,140
3,807
6,328'
542
643
1,284
75,434'
4,769
1,959'
516
3,922'
8,136
841
3,805
8,341
507
631
1,259
78,395
5,041
2,012
596
3,541
8,760
1,065
3,957
9,618
499
695
1,213
82,372
4,985
2,055
576
4,573
8,508
57 Africa
58
Egypt
59
Morocco
South Africa
60
61
Zaire
62
Oil-exporting countries
Other
63
6,615
728
583
2,795
18
842
1,649
5,407
721
575
1,942
20
630
1,520
4,650
567
598
1,550
28
694
1,213
4,742
521
542
1,507
15
1,003
1,153
4,807
513
491
1,520
36
1,019
1,229
4,865
469
490
1,461
82
1,086
1,276
4,881
483
487
1,458
46
1,142
1,265
4,879'
484'
495'
1,439'
47
1,137
1,276
5,092
503
483
1,496
42
1,244
1,324
5,418
603
484
1,694
41
1,274
1,322
64 Other countries
65
Australia
66
Allother
3,447
2,769
678
3,390
2,413
978
3,294
1,949
1,345
3,228
2,189
1,039
2,419
1,428
991
2,375
1,430
945
2,499
1,481
1,019
2,216'
1,360'
856'
2,413
1,405
1,008
2,477
1,593
884
800
1,030
3,021
3,404
2,700
2,224
2,126
1,312'
1,147
2,545
45
46
47
48
49
50
51
52
53
54
55
56
67 Nonmonetary international and regional
organizations
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 "Other Latin America and Caribbean" 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
"Other Western Europe."
Nonbank-Reported
3.19
Data
A61
B A N K S ' O W N A N D DOMESTIC CUSTOMERS' CLAIMS O N FOREIGNERS Reported by Banks in the
United States 1
Payable in U . S . Dollars
Millions of dollars, end of period
1988
1987
Type of claim
1984
1985
1986
Dec.
Jan.
Feb.
Mar.
1 Total
433,078
430,489
478,650
497,977
2 Banks' own claims on foreigners
3
Foreign public borrowers
4
Own foreign offices
5
Unaffiliated foreign banks
6
Deposits
7
Other
8
All other foreigners
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
444,745
64,095
211,533
122,946
57,484
65,462
46,171
460,261
64,660
224,934
127,713
60,618
67,095
42,955
32,916
3,380
28,881
3,335
33,905
4,413
37,716
3,650
37,152'
5,011
23,805
19,332
24,044
26,696
23,451'
5,732
6,214
5,448
7,370
8,689'
37,103
28,487
25,706
23,828
40,714
38,102
41,396
38,090
9 Claims of banks' domestic c u s t o m e r s 3 . . .
11
Apr.'
May
431,724
61,065
210,862
117,293
55,806
61,487
42,504
449,881
61,395
224,203
123,000
57,012
65,988
41,283
42,992
41,851
479,638R
443,890
63,766
217,579
120,467
55,437
65,030
42,079
442,204
62,687
218,758
118,918
55,801
63,117
41,842
442,486
61,822
220,882
118,282
55,927
62,355
41,500
June p
457,633
457,633
62,756
229,018
123,450
58,751
64,698
42,410
Negotiable and readily transferable
12 Outstanding collections and other
13 MEMO: Customer liability on
Dollar deposits in banks abroad,
reported by nonbanking business
enterprises in the United States . . . .
34,258
39,504
37,637'
n.a.
3. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the account
of their domestic customers.
4. Principally negotiable time certificates of deposit and bankers acceptances.
5. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U . S . dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see July 1979 BULLETIN,
p. 550.
1. Data for banks' own claims are given on a monthly basis, but the data for
claims of banks' own domestic customers are available on a quarterly basis only.
2. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies,
branches, and majority-owned
subsidiaries
of
foreign banks: principally amounts due from head office or parent foreign bank,
and foreign branches, agencies, or wholly owned subsidiaries of head office or
parent foreign bank.
3.20
18,769
B A N K S ' O W N CLAIMS ON U N A F F I L I A T E D FOREIGNERS Reported by Banks in the United States
Payable in U . S . Dollars
Millions of dollars, end of period
1987
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 year or less'
Foreign public borrowers
All other foreigners
Maturity over 1 year
Foreign public borrowers
All other foreigners
By area
Maturity of 1 year or less 1
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 2
Maturity of over 1 year 1
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 2
1. Remaining time to maturity.
1984
1985
1988
1986
June
Sept.
Dec.
Mar.'
243,952
227,903
232,295
237,608
237,521
235,447
219,327
167,858
23,912
143,947
76,094
38,695
37,399
160,824
26,302
134,522
67,078
34,512
32,567
160,555
24,842
135,714
71,740
39,103
32,637
168,238
23,702
144,537
69,370
39,372
29,997
167,187
26,914
140,273
70,334
39,476
30,858
164,396
25,986
138,410
71,051
38,626
32,425
152,592
24,300
128,291
66,735
35,763
30,972
58,498
6,028
62,791
33,504
4,442
2,593
56,585
6,401
63,328
27,966
3,753
2,791
61,784
5,895
56,271
29,457
2,882
4,267
69,138
5,773
55,691
31,184
2,989
3,463
62,941
5,890
58,387
32,161
2,871
4,937
59,123
5,712
56,410
36,436
2,824
3,891
51,522
4,939
55,472
35,992
2,605
2,062
9,605
1,882
56,144
5,323
2,033
1,107
7,634
1,805
50,674
4,502
1,538
926
6,737
1,925
56,719
4,043
1,539
777
6,479
1,664
55,609
3,495
1,512
611
6,753
1,579
55,089
3,497
1,622
1,794
6,831
2,661
53,788
3,649
1,746
2,375
6,011
2,233
51,609
3,627
2,192
1,063
2. Includes nonmonetary international and regional organizations.
A62 International Statistics • October 1988
CLAIMS ON FOREIGN COUNTRIES Held by U . S . Offices and Foreign Branches of U.S.-Chartered Banks 1 - 2
3.21
Billions of dollars, end of period
1986
Area or country
1 Total
1984
1987
1988
1985
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
405.7
385.3
385.6
389.7
389.5
389.6
395.2'
384.8
387.5'
381.5'
371.4'
148.1
8.7
14.1
9.0
10.1
3.9
3.2
3.9
60.3
7.9
27.1
146.0
9.2
12.1
10.5
9.6
3.7
2.7
4.4
63.0
6.8
23.9
152.8
8.2
13.6
11.2
8.3
3.5
2.8
5.3
67.4
6.0
26.5
160.3
9.0
15.1
11.5
9.3
3.4
2.9
5.6
69.2
7.0
27.2
159.0
8.5
14.7
12.5
8.1
3.9
2.7
4.8
70.3
6.2
27.4
158.0
8.4
13.8
11.7
9.0
4.6
2.4
5.8
71.9
5.4
25.0
162.7
9.1
13.3
12.7
8.6
4.4
3.0
5.8
73.7'
5.3
26.9
158.T
8.3
12.5
11.2
7.5
7.3
2.4
5.7
72.<y
4.7'
26.3
155.6
8.2
13.7
10.5
6.6
4.8
2.6
5.4
72.1
4.7
27.0
160.3'
10.1
13.8
12.6
7.3
4.1
2.1
5.6
69.1
5.6
30.1'
157.2'
9.4
11.5
11.8
7.4
3.3
2.1
5.1
71.2'
5.0
30.3
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
33.6
1.6
2.2
1.9
2.9
3.0
1.4
6.5
1.9
1.7
4.5
6.0
29.9
1.5
2.3
1.6
2.6
2.9
1.2
5.8
1.8
2.0
3.2
5.0
31.1
1.5
2.5
1.9
2.5
2.7
1.0
6.4
2.1
2.4
3.1
4.9
30.7
1.7
2.4
1.6
2.6
3.0
1.1
6.4
2.5
2.1
3.1
4.2
29.5
1.7
2.3
1.7
2.3
2.7
1.0
6.7
2.1
1.6
3.1
4.1
26.2
1.7
1.7
1.4
2.3
2.4
.8
5.8
2.0
1.4
3.1
3.5
25.7
1.9
1.7
1.4
2.1
2.2
.8
6.3
1.7
1.4
3.0
3.2
25.2
1.8
1.5
1.4
2.0
2.1
.8
6.1
1.7
1.5
3.0
3.1
25.9
1.9
1.6
1.4
1.9
2.0
.8
7.4
1.5
1.6
2.9
2.9
26.2
1.9
1.7
1.3
2.0
2.3
.5
8.0
1.6
1.6'
2.9
2.5
26.2'
1.6
1.4
1.0
2.3
2.0
.4
9.0
1.6
1.9
2.8
2.1'
25 OPEC countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
24.9
2.2
9.3
3.3
7.9
2.3
21.3
2.1
8.9
3.0
5.3
2.0
20.4
2.2
8.7
3.3
4.5
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
20.0
2.1
8.5
2.4
5.4
1.6
18.8
2.1
8.4
2.2
4.4
1.7
18.9
2.0
8.2
2.0
4.9
1.7
17.1
1.9
8.0
1.9
3.6
1.7
17.1
1.9
8.0
1.9
3.6'
1.7
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
111.8
104.2
102.9
102.0
100.0
99.7
100.2'
100. r
97.4'
97.3'
94.(K
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
8.7
26.3
7.0
2.9
25.7
2.2
3.9
8.8
25.4
6.9
2.6
23.9
1.8
3.4
8.8
25.6
7.0
2.3
23.9
1.7
3.3
9.2
25.5
7.1
2.2
24.0
1.6
3.3
9.3
25.4
7.2
2.0
24.0
1.5
3.3
9.5
25.3
7.1
2.1
24.0
1.5
3.1
9.5
26.0
7.2
2.0
23.9
1.4
3.0
9.5
25.0
7.2
1.9
25.3
1.3
2.9
9.3
25.1
7.0
1.9
24.7
1.2
2.8
9.4
24.7
6.9
2.0
23.6
1.1
2.7
9.5
23.9
6.6
1.9
22.5
1.1
2.8
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.7
5.1
.9
1.8
10.6
2.7
6.0
1.8
1.1
.5
4.5
1.2
1.6
9.2
2.4
5.7
1.4
1.0
.6
4.3
1.2
1.3
9.2
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
5.5
1.7
1.4
6.2
1.9
5.4
.9
.6
.6
6.6
1.7
1.3
5.6
1.7
5.4
.8
.7
.3
5.9
1.9
1.3
4.9
1.6
5.4
.7
.7
.3
8.2
1.9
1.0
4.9'
1.5
5.1
.7
.7
.4
6.1'
2.1
1.0'
5.6'
1.5
5.1
1.0
.7
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.2
.8
.1
2.1
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'
.6
.9
.1
1.1
.6
.8
.1
1.3'
.5
.9
.0
1.1
.5
.9
.1
1.0
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
4.4
.1
2.3
2.0
4.1
.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
3.0
.1
1.6
1.3
3.3
.3
1.7
1.3
3.3
.5
1.7
1.2
3.0
.4
1.6
l.C
2.9
.3
1.7
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 5
62
Lebanon
63
Hong Kong
64
Singapore
65
Others 6
65.6
21.5
.9
11.8
3.4
6.7
.1
11.4
9.8
.0
62.9
21.2
.7
11.6
2.2
6.0
.1
11.4
9.8
.0
57.5
21.2
.7
9.2
2.2
4.3
.1
11.4
8.4
.0
55.4
17.1
.4
12.2
2.4
4.2
.1
9.5
9.3
.0
60.5
19.9
.4
12.8
1.9
5.1
.1
10.5
9.7
.0
63.2
22.3
.7
13.6
1.8
4.1
.1
11.2
9.4
.0
63.5
24.0
.8
12.5'
1.7
4.2'
.1
11.4
8.6
.0
61. V
20.1'
.6
14.3'
1.3
3.9'
.1
12.5
8.3'
.0
64.4'
25.7
.6
12.7'
1.2
3.7'
.1
12.3
8.1
.0
54.4'
17.3
.6
13.2'
1.2
3.7'
.1
11.2'
7.0
.0
52.7'
15.9
1.8
11.7'
1.3
3.2
.1
11.3
7.4
.0
66 Miscellaneous and unallocated 7
17.3
16.9
16.8
16.8
17.2
19.8
20.1
18.1
21.9
23.2
21.4'
31 Non-OPEC developing countries
1. The 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 "shell" branches
.y
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
3. This group comprises the Organization of Petroleum Exporting Countries
shown individually, other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait,
Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates), and Bahrain and
Oman (not formally members of OPEC).
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 Data
3.22
A63
LIABILITIES TO U N A F F I L I A T E D FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States 1
Millions of dollars, end of period
1987
Type, and area or country
1985
1984
1988
1986
Mar.
June
Sept.
Mar.
Dec.
1 Total
29,357
27,825
25,779
27,568
29,019
28,669
27,641
29,632
2 Payable in dollars
3 Payable in foreign currencies
26,389
2,968
24,296
3,529
21,980
3,800
23,410
4,158
24,565
4,454
24,141
4,528
22,304
5,337
23,198
6,434
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
14,509
12,553
1,955
13,600
11,257
2,343
12,312
9,827
2,485
13,183
10,446
2,737
14,096
11,197
2,899
13,034
10,080
2,954
11,625
8,148
3,477
13,972
9,447
4,526
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities . .
14,849
7,005
7,843
14,225
6,685
7,540
13,467
6,462
7,004
14,386
7,073
7,313
14,923
7,286
7,637
15,635
7,548
8,086
16,016
7,425
8,591
15,659
6,619
9,040
13,836
1,013
13,039
1,186
12,153
1,314
12,964
1,422
13,368
1,555
14,061
1,574
14,157
1,859
13,751
1,909
6,728
471
995
489
590
569
3,297
7,700
349
857
376
861
610
4,305
8,079
270
661
368
704
646
5,140
8,434
232
758
463
693
663
5,365
9,713
257
822
402
669
655
6,646
9,298
230
615
505
641
685
6,357
7,845
202
415
583
1,014
493
4,946
9,850
241
365
586
1,013
775
6,689
10
11
12
13
14
15
16
17
18
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
19
Canada
863
839
399
431
441
397
400
467
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
5,086
1,926
13
35
2,103
367
137
3,184
1,123
4
29
1,843
15
3
1,961
614
4
32
1,163
22
0
2,366
669
0
26
1,545
30
0
1,744
398
0
22
1,223
29
2
961
280
0
22
580
17
3
847
278
0
25
476
13
0
1,310
264
0
23
924
15
2
27
28
29
Asia
Japan
Middle East oil-exporting countries 2 .
1,777
1,209
155
1,815
1,198
82
1,805
1,398
8
1,882
1,480
7
2,131
1,751
7
2,300
1,830
7
2,429
2,042
8
2,260
1,868
12
30
Africa
14
0
12
0
1
1
3
1
1
0
2
0
4
1
5
3
41
50
67
67
66
76
100
80
4,001
48
438
622
245
257
1,095
4,074
62
453
607
364
379
976
4,447
101
352
714
424
387
1,341
4,498
85
380
582
356
484
1,309
4,966
111
423
585
324
557
1,380
4,951
56
437
674
336
556
1,473
5,626
125
451
916
421
559
1,668
5,748
144
441
817
483
529
1,797
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
1,975
1,449
1,405
1,407
1,371
1,399
1,301
1,402
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,871
7
114
124
32
586
636
1,088
12
77
58
44
430
212
924
32
156
61
49
217
216
1,128
28
325
82
93
189
223
1,069
13
266
88
67
214
203
1,082
22
252
40
47
231
176
865
19
168
46
19
189
162
886
17
325
59
14
161
77
48
49
50
Asia
Japan
Middle East oil-exporting countries '
5,285
1,256
2,372
6,046
1,799
2,829
5,091
2,052
1,679
5,814
2,468
1,943
5,919
2,481
1,867
6,511
2,422
2,104
6,573
2,580
1,964
5,881
2,518
1,067
51
52
Africa
Oil-exporting countries 3
588
233
587
238
619
197
520
170
524
166
572
151
574
135
551
133
53
All other 4
1,128
982
980
1,019
1,074
1,119
1,078
1,193
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 International Statistics • October 1988
3.23
CLAIMS O N U N A F F I L I A T E D FOREIGNERS
United States 1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1987
Type, and area or country
1984
1985
1988
1986
Mar.
June
Sept.
Dec.
Mar.
1 Total
29,901
28,876
33,399
34,094
31,628
31,405
30,055
30,372
2 Payable in dollars
3 Payable in foreign currencies
27,304
2,597
26,574
2,302
31,031
2,367
31,446
2,649
28,686
2,941
28,880
2,525
26,965
3,089
28,393
1,979
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
19,254
14,621
14,202
420
4,633
3,190
1,442
18,891
15,526
14,911
615
3,364
2,330
1,035
23,424
17,283
16,726
557
6,141
4,792
1,349
24,235
16,955
16,112
842
7,280
5,937
1,343
21,736
14,687
13,482
1,205
7,048
5,773
1,275
21,068
15,796
14,919
877
5,271
4,151
1,120
19,571
13,673
12,246
1,426
5,899
4,790
1,109
19,584
12,238
11,684
555
7,346
6,294
1,051
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims
10,646
9,177
1,470
9,986
8,696
1,290
9,975
8,783
1,192
9,859
8,803
1,056
9,892
8,849
1,043
10,338
9,385
953
10,483
9,476
1,007
10,788
9,739
1,049
9,912
735
9,333
652
9,513
462
9,397
463
9,431
461
9,810
528
9,929
554
10,415
373
5,762
15
126
224
66
66
4,864
6,929
10
184
223
161
74
6,007
8,827
41
138
111
151
185
7,957
9,421
15
181
163
132
77
8,500
9,975
6
169
92
140
98
9,271
9,475
26
171
99
157
44
8,783
9,066
6
359
69
282
76
8,040
9,432
15
328
85
334
56
8,369
14
15
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
3,988
3,260
3,965
3,828
3,344
2,895
2,796
2,840
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
8,216
3,306
6
100
4,043
215
125
7,846
2,698
6
78
4,571
180
48
9,209
2,628
6
73
6,078
174
21
9,574
3,968
3
71
5,157
164
20
7,554
2,589
6
103
4,425
167
20
7,502
3,328
2
102
3,687
173
18
6,757
1,865
7
53
4,378
172
19
6,397
2,253
43
86
3,482
154
35
31
32
33
Asia
Japan
Middle East oil-exporting countries 2
961
353
13
731
475
4
1,316
999
7
1,188
931
7
789
452
6
1,105
737
10
830
550
10
841
673
8
34
35
Africa
Oil-exporting countries 3
210
85
103
29
85
28
84
19
58
9
71
14
65
7
53
7
117
21
22
140
16
20
58
21
3,801
165
440
374
335
271
1,063
3,533
175
426
346
284
284
898
3,708
133
414
444
164
217
999
3,690
145
419
447
154
196
1,072
3,845
137
439
526
172
187
1,074
4,115
169
416
545
190
206
1,227
4,116
177
593
555
132
185
1,086
4,132
192
484
629
150
173
1,088
36
37
38
39
40
41
42
43
All other
4
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
1,021
1,023
934
977
1,046
1,049
927
1,169
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,052
8
115
214
7
583
206
1,753
13
93
206
6
510
157
1,857
28
193
234
39
412
237
1,818
11
180
216
25
451
173
1,728
14
169
202
19
346
203
1,709
12
143
230
20
368
192
1,907
19
159
226
25
363
297
1,969
14
171
215
24
373
324
52
53
54
Asia
Japan
Middle East oil-exporting countries
3,073
1,191
668
2,982
1,016
638
2,755
881
563
2,703
927
525
2,642
952
452
2,796
1,026
434
2,892
1,150
450
2,871
1,105
402
55
56
Africa
Oil-exporting countries
470
134
437
130
500
139
432
141
378
123
407
124
400
144
418
154
57
All other 4
229
257
222
240
255
262
240
229
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 T R A N S A C T I O N S IN SECURITIES
Millions of dollars
Transactions, and area or country
1986
1988
1987
Jan.June
Dec.
1988
1987
Jan.
Feb.
Mar.
Apr.
May
June p
U.S. corporate securities
STOCKS
148,114
129,395
249,113
232,849
96,007
96,178
13,627
16,630
12,923
12,891
16,344
16,720
18,068
18,482
15,022'
13,705'
13,654
14,723
19,996
19,657
3 Net purchases, or sales ( - )
18,719
16,264
-171
-3,004
32
-376
-414
1,317'
-1,069
339
4 Foreign countries
18,927
16,313
-103
-2,943
64
-344
-444
1,300'
-976
297
9,559
459
341
936
1,560
4,826
816
3,031
976
3,876
297
373
1,928
905
-74
892
-1,123
630
1,048
1,314
-1,360
12,896
123
365
-1,541
-165
203
-480
-862
-734
90
247
-1,398
2,332
39
130
-2,329
-393
-149
34
-743
-959
111
-50
-448
-160
-6
-61
-222
-96
67
-72
-110
-136
147
-143
104
159
7
12
-323
-29
-37
59
-252
-130
-167
261
-251
70
-18
85
-360
-7
171
-223
-32
-331
-61
98
-788
577
5
84
481
-1
104
-145
-17
429
241
230'
24
372
19
-67
-1,151
-153
-66
-43
-247
-711
102
-82
62
106
23
-35
33
121
-36
-56
-204
146
-172
-116
-549
1,049
3
51
-208
-48
-68
-61
-32
-33
31
17
-92
42
123,169
72,520
105,856
78,312
41,057
29,372
6,807
5,432
5,024
5,193
6,453
6,039
7,799
5,594
5,618
4,433
7,810
3,518
8,352
4,594
1 Foreign purchases
2 Foreign sales
6
7
8
9
10
11
1?
13
14
15
16
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
17 Nonmonetary international and
regional organizations
BONDS2
18 Foreign purchases
19 Foreign sales
20 Net purchases, or sales ( - )
50,648
27,544
11,685
1,375
-169
414
2,206
1,185
4,292
3,757
21 Foreign countries
49,801
26,804
12,206
975
458
532
2,201
1,186
4,262
3,567
39,313
389
-251
387
4,529
33,900
548
1,476
-2,961
11,270
16
139
21,989
194
33
269
1,587
19,770
1,296
2,473
-548
1,638
16
-61
7,114
125
1,024
308
55
5,210
505
930
-238
3,905
-14
5
576
-13
87
1
-208
713
114
292
-16
-7
3
0
272
51
61
-13
-56
333
29
-22
-164
347
0
-4
263
13
118
-1
60
49
-29
316
-76
88
-22
-8
1,462
57
260
30
-14
976
87
245
144
270
3
-11
658
7
347
58
-15
228
104
100
-61
377
4
5
2,256
-18
11
180
152
1,886
98
134
10
1,749
-2
17
2,202
15
226
55
-71
1,738
216
157
-92
1,075
4
5
847
740
-521
400
-627
-119
5
-1
31
191
77
73
74
75
76
77
78
79
30
31
37.
33
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
Foreign sales
37
-1,853
49,149
51,002
1,149
95,263
94,114
292
35,569
35,277
840
4,897
4,057
511
4,989
4,478
-678
5,717
6,396
-724
6,693
7,417
372
5,797
5,425
963
5,983
5,020
-152
6,389
6,542
38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
Foreign sales
40
-3,685
166,992
170,677
-7,830
199,010
206,840
-3,875
92,802
96,677
-1,490
12,322
13,812
-1,326
12,812
14,137
-1,433
15,858
17,291
-1,179
16,561
17,740
-137
15,593
15,730
873
15,119
14,246
-673
16,860
17,533
41 Net purchases, or sales (—), of stocks and bonds . . . .
-5,538
-6,682
-3,583
-650
-814
-2,111
-1,903
235
1,836
-825
42 Foreign countries
-6,493
-6,713
-3,896
-336
-879
-2,131
-1,944
179
1,620
-741
-18,026
-876
3,476
10,858
52
-1,977
-12,083
-4,065
828
9,338
89
-820
-3,396
-2,422
1,355
511
74
-19
-493
107
2
159
10
-121
-326
-654
126
-197
9
163
-1,627
-648
-64
37
3
169
-1,541
-366
138
-154
48
-70
483
-406
538
-407
14
-43
719
-162
322
716
-1
24
-1,104
-186
295
515
1
-262
955
31
313
-314
65
20
41
56
216
-84
43
44
45
46
47
48
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 International Statistics • October 1988
3.25
M A R K E T A B L E U.S. TREASURY BONDS A N D NOTES
Foreign Transactions
Millions of dollars
Country or area
1986
1988
1987
Jan.June
Dec.
1988
1987
Jan.
Feb.
Mar.
Apr.
May
June p
-2,202
Transactions, net purchases or sales i - ) during period 1
1 Estimated total 2
19,388
25,587
38,952
2,507
4,645
12,083
9,980
3,433
11,013
2 Foreign countries 2
20,491
30,889
37,863
4,121
5,740
12,832
9,017
3,728
9,923
-3,377
16,326
-245
7,670
1,283
132
329
4,546
2,613
0
881
23,716
653
13,330
-913
210
1,917
3,975
4,563
-19
4,526
15,885
1,302
2,776
-327
-501
262
5,696
6,645
32
3,505
1,387
-103
1,157
-78
28
-530
1,220
-307
1
711
4,321
469
3,045
-337
-61
118
-101
1,179
9
356
5,878
242
1,397
334
26
-1,188
4,373
678
16
559
3,471
454
919
378
-245
643
-244
1,570
-3
372
2,332
47
1,576
117
-93
344
97
238
5
133
3,108
159
79
-22
104
-309
1,523
1,560
14
1,415
-3,226
-68
-4,241
-796
-232
654
47
1,420
-10
669
926
-96
1,130
-108
1,345
-22
-54
1,067
-2,192
150
-1,142
-1,200
4,488
868
-56
407
903
37
815
51
16,874
15,719
-23
720
-188
1
120
-309
2,210
2,012
49
-48
219
0
184
36
772
2,979
-38
110
630
-1
320
311
5,921
4,996
25
-182
198
20
169
10
5,463
4330
5
-492
75
15
97
-36
713
687
0
475
360
1
-17
376
4,427
2,820
-13
626
-580
2
63
-645
-422
-92
-1
183
21 Nonmonetary international and regional organizations
22
International
23
Latin American regional
-1,104
-1,430
157
-5,300
-4,387
3
1,091
1,432
-29
-1,614
-1,620
0
-1,095
-1,023
8
-748
-879
-2
963
968
-5
-295
-334
0
1,091
1,155
7
1,175
1,546
-38
Memo
24 Foreign countries 2
25
Official institutions
26
Other foreign 2
20,491
14,214
6,283
30,889
31,064
-181
37,863
26,840
11,021
4,121
1,670
2,451
5,740
5,118
622
12,832
7,169
5,663
9,017
8,146
871
3,728
3,075
653
9,923
5,062
4,860
-3,377
-1,730
-1,648
-1,529
5
-3,142
16
-827
1
338
-1
-809
0
-296
0
578
0
514
0
-612
0
-201
0
3 Europe 2
4
Belgium-Luxembourg
5
Germany
6
Netherlands
7
Sweden
8
Switzerland 2
9
United Kingdom
10
Other Western Europe
11
Eastern Europe
12 Canada
13
14
15
16
17
18
19
20
27
28
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
All other
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.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
Interest and Exchange Rates
3.26
A67
D I S C O U N T R A T E S OF FOREIGN C E N T R A L B A N K S
Percent per year
Country
Country
Percent
4.0
7.5
49.0
9.80
7.0
Austria..
Belgium .
Brazil . . .
Canada..
Denmark
Country
Month
effective
Aug.
Aug.
Mar.
Aug.
Oct.
1988
1988
1981
1988
1983
Percent
France
Germany, Fed. Rep. of
Italy
Japan
Netherlands
1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
3.27
Rate on Aug. 31, 1988
Rate on Aug. 31, 1988
Rate on Aug. 31, 1988
7.0
3.5
12.5
2.5
4.0
Month
effective
Aug.
Aug.
Aug.
Feb.
Aug.
1988
1988
1988
1987
1988
Percent
8.0
3.0
Norway
Switzerland . . . .
United Kingdom 2
Venezuela
Month
effective
June 1983
Aug. 1988
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 year, averages of daily figures
1988
Country, or type
1
2
3
4
5
6
7
8
9
10
1985
1986
1987
Feb.
Mar.
Apr.
May
June
July
Aug.
Eurodollars
United Kingdom
Canada
Germany
Switzerland
8.27
12.16
9.64
5.40
4.92
6.70
10.87
9.18
4.58
4.19
7.07
9.65
8.38
3.97
3.67
6.73
9.18
8.58
3.29
1.48
6.74
8.83
8.63
3.38
1.61
7.05
8.25
8.90
3.37
1.83
7.40
8.00
9.07
3.51
2.23
7.61
8.91
9.44
3.88
2.82
8.09
10.45
9.42
4.88
3.67
8.47
11.29
9.92
5.28
3.57
Netherlands
France
Italy
Belgium
Japan
6.29
9.91
14.86
9.60
6.47
5.56
7.68
12.60
8.04
4.96
5.24
8.14
11.15
7.01
3.87
3.98
7.54
10.80
6.19
3.82
3.97
7.89
11.11
6.09
3.82
3.98
7.99
10.54
6.08
3.80
4.07
7.81
10.57
6.05
3.80
4.10
7.27
10.90
6.04
3.82
4.85
7.32
11.02
6.84
3.84
4.50
7.58
11.02
7.25
3.98
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A68 International Statistics • October 1988
3.28
FOREIGN EXCHANGE RATES'
Currency units per dollar
1988
Country/currency
1
2
3
4
5
6
Australia/dollar^
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
1985
1987
Apr.
May
June
July
Aug.
70.026
20.676
59.336
1.3658
2.9434
10.598
67.093
15.260
44.662
1.3896
3.4615
8.0954
70.136
12.649
37.357
1.3259
3.7314
6.8477
73.29
11.767
35.126
1.2492
3.7314
6261
74.80
11.744
34.962
1.2353
3.7314
6.4207
77.74
11.912
35.381
1.2373
3.7314
6.4938
80.76
12.380
36.786
1.2176
3.7314
6.6893
80.00
12.991
38.649
1.2075
3.7314
7.0266
80.57
13.281
39.562
1.2237
3.7314
7.2280
7
8
9
10
11
12
13
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/punt
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
4.4036
6.0121
1.7981
135.47
7.7985
12.943
148.79
4.0483
5.6893
1.6770
134.60
7.8028
12.979
159.33
4.0064
5.6704
1.6710
133.86
7.8166
13.158
159.81
4.0297
5.7348
1.6935
135.75
7.8156
13.315
157.78
4.1761
5.9310
1.7579
140.69
7.8073
13.785
152.65
4.3896
6.2241
1.8466
147.85
7.8135
14.079
145.49
4.4720
6.3919
1.8880
151.62
7.8050
14.217
142.17
14
15
16
17
18
19
20
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar2 . . .
Norway/krone
Portugal/escudo
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
1297.03
144.60
2.5185
2.0263
59.327
6.7408
141.20
1240.67
127.11
2.5689
1.8837
66.239
6.3337
137.48
1240.99
124.90
2.5743
1.8749
66.143
6.2140
136.77
1258.81
124.79
2.5847
1.8987
68.889
6.1875
138.44
1305.56
127.47
2.5860
1.9767
69.996
6.3951
143.54
1367.26
133.02
2.6267
2.0827
66.832
6.7207
150.42
1397.93
133.77
2.6520
2.1319
64.815
6.9016
153.72
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound
2.2008
2.2343
861.89
169.98
27.187
8.6031
2.4551
39.889
27.193
129.74
2.1782
2.2918
884.61
140.04
27.933
7.1272
1.7979
37.837
26.314
146.77
2.1059
2.0385
825.93
123.54
29.471
6.3468
1.4918
31.756
25.774
163.98
2.0133
2.1330
757.37
112.38
30.892
5.9497
1.3863
28.687
25.232
183.30
2.0044
2.1428
745.31
110.80
30.939
5.8892
1.3823
28.695
25.171
187.82
2.0109
2.2114
739.44
112.04
30.993
5.9091
1.4111
28.666
25.170
186.95
2.0285
2.2716
732.88
116.25
31.133
6.1074
1.4629
28.723
25.280
177.68
2.0459
2.3985
728.67
122.27
31.782
6.3542
1.5343
28.726
25.523
170.51
2.0417
2.4531
725.74
124.122
32.807
6.4878
1.5837
28.693
25.560
169.65
89.74
92.58
MEMO
31 United States/dollar3 . . .
143.01
96.94
1. Averages of certified noon buying rates in New York for cable transfers.
Data in this table also appear in the Board's G.5 (405) release. For address, see
inside front cover.
2. Value in U.S. cents.
3. Index of weighted-average exchange value of U.S. dollar against the
98.29
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 1 9 7 8 , p . 7 0 0 ) .
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
N o t available
N o t 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
July 1988
Page
A87
SPECIAL TABLES
Published Irregularly, with Latest Bulletin
Reference
Assets and liabilities of commercial banks, March 31, 1987
Assets and liabilities of commercial banks, June 30, 1987
Assets and liabilities of commercial banks, September 30, 1987
Assets and liabilities of commercial banks, December 31, 1987
Assets and liabilities of U . S . branches and agencies of foreign banks, June 30, 1987
Assets and liabilities of U . S . branches and agencies of foreign banks, September 30, 1987
Assets and liabilities of U . S . branches and agencies of foreign banks, December 31, 1987
Assets and liabilities of U . S . branches and agencies of foreign banks, March 31, 1988
Terms of lending at commercial banks, August 1987
Terms of lending at commercial banks, November 1987
Terms of Lending at commercial banks, February 1988
Terms of lending at commercial banks, May 1988
Pro forma balance sheet and income statements for priced service operations, June 30, 1987
Pro forma balance sheet and income statements for priced service operations, September 30,1987 .
Pro forma balance sheet and income statments for priced service operations, March 31, 1987
October
February
April
June
November
February
June
September
January
September
May
September
November
February
August
1987
1988
1988
1988
1987
1988
1988
1988
1988
1988
1988
1988
1987
1988
1988
A70
A70
A70
A70
A70
A76
A76
A82
A70
A76
A70
A70
A74
A80
A70
A70
Federal Reserve Board of Governors
M A N U E L H . JOHNSON,
Chairman
Vice Chairman
WAYNE D. ANGELL
OFFICE OF BOARD
MEMBERS
DIVISION OF INTERNATIONAL
A L A N GREENSPAN,
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
to the
to the
Board
Board
BOB STAHLY MOORE, Special Assistant
LEGAL
to the Board
MARTHA R . SEGER
EDWIN M. TRUMAN, Staff
Director
LARRY J. PROMISEL, Senior Associate
CHARLES J. SIEGMAN, Senior Associate
DAVID H. HOWARD, Deputy Associate
Director
Director
Director
Adviser
ROBERT F. GEMMILL, Staff
DONALD B . ADAMS, Assistant
Director
PETER HOOPER III, Assistant
Director
DIVISION
MICHAEL BRADFIELD, 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. BROWN, Assistant to the General Counsel
KAREN H. JOHNSON, Assistant
Director
DIVISION OF RESEARCH AND
STATISTICS
Director
EDWARD C. ETTIN, Deputy
Director
JARED J. ENZLER, Associate
Director
THOMAS D . SIMPSON, Associate
Director
SECRETARY
WILLIAM W . W I L E S ,
Director
RALPH W . SMITH, JR., Assistant
MICHAEL J. PRELL,
OFFICE OF THE
FINANCE
LAWRENCE SLIFMAN, Associate
Secretary
BARBARA R. LOWREY, Associate
Secretary
JAMES MCAFEE, Associate
Secretary
Director
ELEANOR J. STOCKWELL, Associate
Director
MARTHA BETHEA, Deputy Associate
PETER A. TINSLEY, Deputy Associate
Director
Director
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
MARK N . GREENE, Assistant
Director
MYRON L. KWAST, Assistant
Director
SUSAN J. LEPPER, Assistant
Director
MARTHA S. SCANLON, Assistant
Director
GRIFFITH L . G A R W O O D ,
DAVID J. STOCKTON, Assistant
JOYCE K. ZICKLER, Assistant
Director
GLENN E. LONEY, Assistant
ELLEN MALAND, Assistant
DOLORES S. SMITH, Assistant
Director
Director
Director
DIVISION OF BANKING
SUPERVISION AND REGULATION
WILLIAM TAYLOR, Staff
Director
JOE M. CLEAVER, Assistant
Director
(Administration)
DIVISION OF MONETARY
DONALD L . KOHN,
AFFAIRS
Director
RICHARD D . PORTER, Assistant
Director
NORMAND R.V. BERNARD, Special Assistant
OFFICE OF THE INSPECTOR
Director
Credit
Officer
BRENT L. BOWEN, Inspector
to the
GENERAL
Director
ROGER T. COLE, Assistant
Director
JAMES I. GARNER, Assistant
Director
JAMES D . GOETZINGER, Assistant
Director
MICHAEL G. MARTINSON, Assistant
Director
ROBERT S. PLOTKIN, Assistant
Director
SIDNEY M . SUSSAN, Assistant
Director
LAURA M. HOMER, Securities
LEVON H . GARABEDIAN, Assistant
DAVID E. LINDSEY, Deputy
Director
BRIAN F. MADIGAN, Assistant
Director
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 . BIERN, Assistant
Director
Director
General
Board
A71
and Official Staff
H . ROBERT HELLER
JOHN P . L A W A R E
E D W A R D W . K E L L E Y , JR.
OFFICE OF
STAFF DIRECTOR FOR
S . D A V I D FROST, Staff
OFFICE OF STAFF DIRECTOR FOR
FEDERAL RESERVE BANK ACTIVITIES
MANAGEMENT
THEODORE E. ALLISON, Staff
Director
EDWARD T. MULRENIN, Assistant Staff Director
PORTIA W. THOMPSON, Equal Employment
Opportunity
Programs
Officer
DIVISION OF HUMAN RESOURCES
DAVID L . SHANNON,
CLYDE H . FARNSWORTH, JR.,
ELLIOTT C . M C E N T E E , Associate
DAVID L. ROBINSON, Associate
Director
ANTHONY V . DIGIOIA, Assistant
JOSEPH H . HAYES, JR., Assistant
FRED HOROWITZ, Assistant
Director
LOUISE L . ROSEMAN, Assistant
FLORENCE M . Y O U N G ,
Adviser
Controller
DIVISON OF SUPPORT SERVICES
DAVID L. WILLIAMS, Assistant
Director
Director
OFFICE OF THE EXECUTIVE DIRECTOR FOR
INFORMATION RESOURCES MANAGEMENT
ALLEN E . BEUTEL, Executive
Director
STEPHEN R . MALPHRUS, Associate
Director
DIVISION OF HARDWARE AND SOFTWARE
SYSTEMS
BRUCE M . B E A R D S L E Y , D i r e c t o r
THOMAS C . J U D D , Assistant
Director
ELIZABETH B . RIGGS, Assistant
Director
ROBERT J. ZEMEL, Assistant
Director
DIVISION OF APPLICATIONS DEVELOPMENT
STATISTICAL SERVICES
WILLIAM R . JONES,
Director
DAY W. RADEBAUGH, Assistant
Director
RICHARD C . STEVENS, Assistant
PATRICIA A . WELCH, Assistant
Director
Director
Director
EARL G. HAMILTON, Assistant
Director
JOHN H. PARRISH, Assistant
Director
STEPHEN J. CLARK, Assistant Controller (Programs and
Budgets)
DARRELL R. PAULEY, Assistant Controller
(Finance)
ROBERT E . FRAZIER,
Director
GEORGE M . LOPEZ, Assistant
Director
Director
C . WILLIAM SCHLEICHER, JR., Associate
Director
CHARLES W . BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
Director
Director
OFFICE OF THE CONTROLLER
GEORGE E . LIVINGSTON,
RESERVE
MANAGEMENT
Director
JOHN R. WEIS, Associate
DIVISION OF FEDERAL
BANK OPERATIONS
Director
AND
Director
158
Federal Reserve Bulletin • October 1988
Federal Open Market Committee
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
E. GERALD CORRIGAN, Vice
ALAN GREENSPAN,Chairman
W A Y N E D . ANGELL
ROBERT P . BLACK
ROBERT P . FORRESTAL
H . ROBERT HELLER
W . LEE HOSKINS
MANUEL H . JOHNSON
ALTERNATE
E D W A R D W . KELLEY, JR.
JOHN P . L A W A R E
ROBERT T . PARRY
MARTHA R . SEGER
MEMBERS
THOMAS C . MELZER
FRANK E . MORRIS
ROGER GUFFEY
SILAS K E E H N
Chairman
JAMES H . OLTMAN
STAFF
D O N A L D L . K O H N , Secretary
and
Economist
N O R M A N D R . V . BERNARD, Assistant
Secretary
MICHAEL BRADFIELD, General
Counsel
ERNEST T. PATRIKIS, Deputy
General
MICHAEL J. PRELL,
Economist
E D W I N M . TRUMAN,
Economist
JOHN H . BEEBE, Associate
Economist
J. ALFRED BROADDUS, JR., Associate
Counsel
JOHN M . DAVIS, Associate
Economist
RICHARD G . DAVIS, Associate
Economist
D A V I D E . LINDSEY, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D . SIMPSON, Associate
Economist
LAWRENCE SLIFMAN, Associate
SHEILA L . TSCHINKEL, Associate
Economist
Economist
Economist
PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market
Account
SAM Y. CROSS, Manager for Foreign Operations, System Open Market
Account
FEDERAL ADVISORY
COUNCIL
CHARLES T . FISHER, III,
BENNETT A . BROWN, Vice
J. TERRENCE MURRAY, First District
WILLARD C. BUTCHER, Second District
SAMUEL A. MCCULLOUGH, Third District
THOMAS H. O'BRIEN, Fourth District
FREDERICK DEANE, JR., Fifth District
BENNETT A. BROWN, Sixth District
President
President
CHARLES T . FISHER, III, S e v e n t h D i s t r i c t
DONALD N. BRANDIN, Eighth District
DEWALT H. ANKENY, Jr., Ninth District
F. PHILLIPS GILTNER, Tenth District
T. C. FROST, Eleventh District
PAUL HAZEN, Twelfth District
HERBERT V . PROCHNOW,
WILLIAM J. KORSVIK, Associate
Secretary
Secretary
A73
and Advisory Councils
CONSUMER ADVISORY
COUNCIL
STEVEN W. HAMM, Columbia, South Carolina, Chairman
EDWARD J. WILLIAMS, Chicago, Illinois, Vice Chairman
NAOMI G. ALBANESE, Greensboro, North Carolina
STEPHEN BROBECK, W a s h i n g t o n , D . C .
E D W I N B . BROOKS, JR., R i c h m o n d , V i r g i n i a
JUDITH N . B R O W N , E d i n a , M i n n e s o t a
MICHAEL S . CASSIDY, N e w Y o r k , N e w Y o r k
BETTY TOM CHU, Arcadia, California
JERRY D . CRAFT, A t l a n t a , G e o r g i a
DONALD C. DAY, Boston, Massachusetts
RICHARD B . D O B Y , D e n v e r , C o l o r a d o
RICHARD H . F I N K , W a s h i n g t o n , D . C .
NEIL J. FOGARTY, Jersey City, N e w Jersey
STEPHEN GARDNER, D a l l a s , T e x a s
KENNETH A . HALL, P i c a y u n e , M i s s i s s i p p i
ELENA G. HANGGI, Little Rock, Arkansas
THRIFT INSTITUTIONS ADVISORY
ROBERT A . HESS, W a s h i n g t o n , D . C .
ROBERT J. HOBBS, B o s t o n , M a s s a c h u s e t t s
RAMON E. JOHNSON, Salt Lake City, Utah
ROBERT W. JOHNSON, West Lafayette, Indiana
A . J. (JACK) K I N G , K a l i s p e l l , M o n t a n a
JOHN M . KOLESAR, C l e v e l a n d , O h i o
A L A N B . LERNER, D a l l a s , T e x a s
RICHARD L . D . MORSE, M a n h a t t a n , K a n s a s
WILLIAM E . O D O M , D e a r b o r n , M i c h i g a n
SANDRA R . PARKER, R i c h m o n d , V i r g i n i a
SANDRA PHILLIPS, P i t t s b u r g h , P e n n s y l v a n i a
JANE S H U L L , P h i l a d e l p h i a , P e n n s y l v a n i a
RALPH E . SPURGIN, C o l u m b u s , O h i o
LAWRENCE WINTHROP, P o r t l a n d , O r e g o n
COUNCIL
JAMIE J. JACKSON, Houston, Texas, President
GERALD M. CZARNECKI, Honolulu, Hawaii, Vice President
ROBERT S . D U N C A N , H a t t i e s b u r g , M i s s i s s i p p i
BETTY GREGG, P h o e n i x , A r i z o n a
JOSEPH W . MOSMILLER, B a l t i m o r e , M a r y l a n d
JANET M . PAVLISKA, A r l i n g t o n , M a s s a c h u s e t t s
THOMAS A. KINST, Hoffman Estates, Illinois
RAY MARTIN, LOS Angeles, California
JOE C. MORRIS, Emporia, Kansas
WILLIAM G . SCHUETT, M i l w a u k e e , W i s c o n s i n
D O N A L D B . SHACKELFORD, C o l u m b u s , O h i o
Louis H. PEPPER, Seattle, Washington
A74
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T H E BANK
PUBLIC POLICY AND CAPITAL FORMATION.
CONSUMER EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom
are available without charge.
use. Multiple
copies
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
Fair Credit Billing
Federal Reserve Glossary
A Guide to Business Credit and the Equal Credit Opportunity
Act
Guide to Federal Reserve Regulations
How to File A Consumer Credit Complaint
If You Borrow To Buy Stock
If You Use A Credit Card
Series on the Structure of the Federal Reserve
System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Organization and Advisory Committees
A Consumer's Guide to Mortgage Lock-Ins
A Consumer's Guide to Mortgage Closings
A Consumer's Guide to Mortgage Refinancing
Making Deposits: When Will Your Money Be Available?
A75
PAMPHLETS FOR FINANCIAL
INSTITUTIONS
Short pamphlets
on regulatory compliance, primarily
suitable for banks, bank holding companies and creditors.
GATION, by Bonnie E. Loopesko. N o v e m b e r 1983. Out
of print.
134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: A REVIEW OF THE LITERATURE, b y
Ralph W. Tryon. October 1983. 14 pp. Out of print.
Limit of 50 copies
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
Construction Loan Disclosures and Regulation Z
Finance Charges Under Regulation Z
H o w to Determine the Credit N e e d s of Your Community
Regulation Z: The Right of Rescission
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
135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: APPLICATIONS TO C A N A D A , GERMANY,
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 .
137. THE IMPLICATIONS FOR BANK MERGER POLICY OF
FINANCIAL DEREGULATION, INTERSTATE BANKING,
AND FINANCIAL SUPERMARKETS, b y S t e p h e n
A.
Rhoades. February 1984. Out of print.
138. ANTITRUST L A W S , JUSTICE DEPARTMENT GUIDELINES,
AND THE LIMITS OF CONCENTRATION IN LOCAL B A N K -
ING 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.
140. GEOGRAPHIC MARKET DELINEATION: A
STAFF STUDIES: Summaries
Only Printed
in the
Bulletin
Studies and papers on economic and financial subjects that
are of general interest. Requests to obtain single copies of
the full text or to be added to the mailing list for the series
may be sent to Publications
Services.
Staff Studies 115-125 are out of print.
ECON-
OMY, by Darrell Cohen and Peter B. Clark. January
1984. 16 pp. Out of print.
REVIEW OF
THE LITERATURE, by John D. Wolken. N o v e m b e r 1984.
38 pp. Out of print.
141. A COMPARISON OF DIRECT DEPOSIT A N D CHECK PAY-
MENT COSTS, by William Dudley. N o v e m b e r
15 pp. Out of print.
1984.
142. MERGERS AND ACQUISITIONS BY COMMERCIAL BANKS,
1960-83, by Stephen A. Rhoades. December 1984. 30
pp. Out of print.
143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF THE
ELECTRONIC F U N D TRANSFER ACT: RECENT SURVEY
114. MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE
ON COMPETITION AND PERFORMANCE IN BANKING
EVIDENCE, by Frederick J. Schroeder. April 1985. 23
pp. Out of print.
MARKETS, by Timothy J. Curry and John T. Rose. Jan.
1982. 9 pp.
144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CONSUMER CREDIT REGULATIONS: T H E TRUTH IN L E N D I N G
AND EQUAL CREDIT OPPORTUNITY L A W S , b y G r e g o r y
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 1975, BY M a r g a r e t L .
Greene. August 1984. 16 pp. Out of print.
128. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: SEPTEMBER 1977-DECEMBER 1979, b y M a r -
garet L. Greene. October 1984. 40 pp. Out of print.
129. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: OCTOBER I98O-OCTOBER 1981, b y M a r g a r e t
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 . DOLLARDEUTSCHE MARK INTERVENTION, b y L a u r e n c e R . Ja-
cobson. October 1983. 8 pp.
132. TIME-SERIES STUDIES OF THE RELATIONSHIP BETWEEN
EXCHANGE RATES A N D INTERVENTION: A REVIEW OF
THE TECHNIQUES A N D LITERATURE, b y K e n n e t h R o -
goff. October 1983. 15 pp.
133. RELATIONSHIPS AMONG EXCHANGE RATES, INTERVENTION, A N D INTEREST RATES: A N EMPIRICAL INVESTI-
E. Elliehausen and Robert D. Kurtz. May 1985. 10 pp.
145. SERVICE CHARGES AS A SOURCE OF B A N K INCOME A N D
THEIR IMPACT ON CONSUMERS, b y G l e n n B . C a n n e r a n d
Robert D. Kurtz. August 1985. 31 pp. Out of print.
146. T H E ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, b y
Thomas F. Brady. November 1985. 25 pp.
147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) INDEXES OF THE MONETARY AGGREGATES, b y H e l e n T.
Farr and Deborah Johnson. December 1985. 42 pp.
148. T H E MACROECONOMIC AND SECTORAL EFFECTS OF THE
ECONOMIC RECOVERY TAX ACT: SOME SIMULATION
RESULTS, by Flint Brayton and Peter B. Clark. December 1985. 17 pp.
149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN
BANKING BEFORE A N D AFTER ACQUISITION, b y S t e p h e n
A. Rhoades. April 1986. 32 pp.
150. STATISTICAL COST ACCOUNTING MODELS IN BANKING:
A REEXAMINATION A N D AN APPLICATION, b y J o h n T .
Rose and John D. Wolken. May 1986. 13 pp.
151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRIC-
ING FROM 1983 THROUGH 1985, by Patrick I. M a h o n e y ,
Alice P. White, Paul F. O'Brien,
McLaughlin. January 1987. 30 pp.
and Mary
M.
152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A
A76
REVIEW OF THE LITERATURE, by Mark J. Warshawsky.
April 1987. 18 pp.
1 5 3 . STOCK MARKET VOLATILITY, b y C a r o l y n D . D a v i s a n d
Alice P. White. September 1987. 14 pp.
1 5 4 . T H E EFFECTS ON CONSUMERS AND CREDITORS OF PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, b y
Glenn B. Canner and James T. Fergus. October 1987.
26 pp.
155. T H E F U N D I N G OF PRIVATE PENSION PLANS, b y M a r k J.
Warshawsky. November 1987. 25 pp.
156. INTERNATIONAL TRENDS FOR U . S . BANKS A N D B A N K -
ING MARKETS, by James V. Houpt. May 1988. 47 pp.
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.
Measuring the Foreign-Exchange Value of the Dollar. 6/87.
Changes in Consumer Installment Debt: Evidence from the
1983 and 1986 Surveys of Consumer Finances. 10/87.
U.S. International Transactions in 1987. 5/88.
Home Equity Lines of Credit. 6/88.
A77
Index to Statistical Tables
References are to pages A3-A68 although the prefix 'A"
ACCEPTANCES, bankers (,See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20
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. (See also Foreigners)
Bonds (See also U.S. government securities)
N e w 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
Federal Reserve Banks, 10
Central banks, discount rates, 67
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20
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
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
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or
Demand deposits
Banks, by classes, 18-21
securities)
is omitted in this index
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
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
A78
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
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
Federal Reserve Banks, 4, 5, 7, 10, 11
Financial institutions, 26, 39
Insured or guaranteed by United States, 38, 39
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
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
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 also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
N e w 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
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
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
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)
A79
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
George N. Hatsopoulos
Richard N. Cooper
Frank E. Morris
Robert W. Eisenmenger
N E W YORK*
10045
John R. Opel
To be announced
Mary Ann Lambertsen
E. Gerald Corrigan
James H. Oltman
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
Nevius M. Curtis
Peter A. Benoliel
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
Robert A. Georgine
Hanne M. Merriman
Thomas R. Shelton
G. Alex Bernhardt
Robert P. Black
Jimmie R. Monhollon
Bradley Currey, Jr.
Larry L. Prince
Roy D. Terry
E. William Nash, Jr.
Sue McCourt Cobb
Condon S. Bush
Sharon A. Perlis
Robert P. Forrestal
Jack Guynn
Robert J. Day
Marcus Alexis
Richard T. Lindgren
Silas Keehn
Daniel M. Doyle
Robert L. Virgil, Jr.
H. Edwin Trusheim
James R. Rodgers
Lois H. Gray
Sandra B. Sanderson
Thomas C. Melzer
James R. Bowen
Michael W. Wright
John A. Rollwagen
Marcia S. Anderson
Gary H. Stern
Thomas E. Gainor
Irvine O. Hockaday, Jr.
Fred W. Lyons, Jr.
James C. Wilson
Patience S. Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Peyton Yates
Walter M. Mischer, Jr.
Robert F. McDermott
Robert H. Boykin
William H.Wallace
Robert F. Erburu
Carolyn S. Chambers
Richard C. Seaver
Paul E. Bragdon
Don M. Wheeler
Carol A. Nygren
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
N e w Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. L O U I S
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
K A N S A S CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
L o s Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino 1
Harold J. Swart 1
Robert D. McTeer, Jr. 1
Albert D. Tinkelenberg 1
John G. Stoides
Delmar Harrison 1
Fred R. Herr 1
James D. Hawkins 1
James Curry III
Donald E. Nelson
Robert J. Musso
Roby L. Sloan 1
John F. Breen
Howard Wells
Paul I. Black, Jr.
Robert F. McNellis
Enis Alldredge, Jr.
William G. Evans
Robert D. Hamilton
Tony J. Salvaggio 1
Sammie C. Clay
Robert Smith, III 1
Thomas H. Robertson
John F. Hoover 1
Thomas C. Warren 2
Angelo S. Carella 1
E. Ronald Liggett 1
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.
1. Senior Vice President.
2. Executive Vice President.
A80
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
April 1984
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LEGEND
— B o u n d a r i e s of Federal Reserve Districts
Boundaries of Federal Reserve Branch
Territories
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Federal Reserve Bank Cities
*
Federal R e s e r v e Branch Cities
Federal R e s e r v e Bank Facility
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Board of G o v e r n o r s of the Federal Reserve
System
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@FedFRASER