Full text of Federal Reserve Bulletin : October 1989
The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
VOLUME 7 5 •
NUMBER 10 •
OCTOBER 1 9 8 9
FEDERAL RESERVE
BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood
• Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • 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
659 ASSET SECURITIZATION:
A SUPERVISORY PERSPECTIVE
This article describes the mechanics of the
securitization process, the structures of
asset-backed securities, and the involvement of banking organizations in this process; it also discusses the incentives for
issuing and acquiring asset-backed securities. Asset securitization is examined from
a supervisory perspective by outlining the
supervisory issues associated with issuance
or ownership of asset-backed securities and
the supervisory policies and procedures
used by the Federal Reserve in this area.
670 TREASURY AND FEDERAL RESERVE
FOREIGN EXCHANGE OPERATIONS
The dollar ended the three-month period
from May through July VA percent lower on
a trade-weighted basis as measured by the
staff of the Board of Governors. The dollar's net movements against individual currencies varied considerably: It was 3 percent higher against the Japanese yen; V/A
percent higher against the British pound; VA
percent lower against the German mark;
and VA percent lower against the Canadian
dollar.
675 INDUSTRIAL
PRODUCTION
Industrial production rose 0.2 percent in
July after a decline of 0.1 percent (revised)
in June.
677 STATEMENTS TO CONGRESS
Wayne D. Angell and Edward W. Kelley,
Jr., members, Board of Governors of the
Federal Reserve System, discuss the Federal Reserve Board's budget and major initiatives for 1989 and the Reserve Banks'
budgets and major System initiatives, before the Subcommittee on Domestic Monetary Policy of the House Committee on
Banking, Finance and Urban Affairs, August 3, 1989.
684 Brent L. Bowen, Inspector General of the
Board of Governors, discusses the establishment, organization, and operation of the
Office of Inspector General and says that
the Inspector General has the independence
and the authority to carry out his statutory
responsibilities, before the Subcommittee
on Domestic Monetary Policy of the House
Committee on Banking, Finance and Urban
Affairs, August 3, 1989.
689 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET COMMITTEE
At its meeting on July 5 - 6 , 1989, the Committee reviewed the ranges of growth of the
monetary and debt aggregates that it had
established in February for 1989 and decided on tentative ranges for growth of
these aggregates in 1990. For 1989, the
Committee agreed to reaffirm the ranges set
in February of 3 to 7 percent and 3Vi to IVi
percent for M2 and M3 respectively. The
monitoring range for growth of total domestic nonfinancial debt also was maintained at
6V2 to IOI/2 percent for 1989. On a tentative
basis, the Committee decided to use for
1990 the same ranges as in 1989 for growth
in each of the monetary aggregates and in
total domestic nonfinancial debt. It was
agreed that these ranges would be reviewed
in early 1990 in the light of economic and
financial conditions prevailing then.
With regard to the implementation of
policy for the period immediately ahead,
the Committee adopted a directive that
called for some slight easing in the degree of
pressure on reserve positions. Some firming
or some easing of reserve conditions would
be acceptable during the intermeeting period depending on indications of inflationary pressures, the strength of the business
expansion, the behavior of the monetary
aggregates, and developments in foreign
exchange and domestic financial markets.
The contemplated reserve conditions were
expected to be consistent with growth of
M2 and M3 over the period from June
through September at annual rates of about
7 percent. The intermeeting range for the
federal funds rate was lowered by 1 percentage point to 7 to 11 percent.
698
AI FINANCIAL AND BUSINESS
These tables reflect
August 30, 1989.
data
STATISTICS
available
as of
A3 Domestic Financial Statistics
A46 Domestic Nonfinancial Statistics
A55 International Statistics
A71 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A74 BOARD OF GOVERNORS AND STAFF
A76 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY
COUNCILS
ANNOUNCEMENTS
Continuation of the designation of primary
dealers controlled by firms from the United
Kingdom and Japan.
Publication of a brochure on home equity
lines of credit.
Change in Board staff.
Admission of two state banks to membership in the Federal Reserve System.
701 LEGAL
DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
A78 FEDERAL RESERVE
PUBLICATIONS
BOARD
A80 INDEX TO STATISTICAL
TABLES
A82 FEDERAL RESERVE BANKS,
BRANCHES, AND OFFICES
A83 MAP OF FEDERAL RESERVE
SYSTEM
Asset Securitization: A Supervisory
Perspective
Thomas R. Boemio and Gerald A. Edwards, Jr.,
of the Board's Division of Banking
Supervision
and Regulation prepared this article.
Michael
Boennighausen contributed research
assistance.
In recent years the number of banks and bank
holding companies (referred to here as banking
organizations) that have issued securities
backed by their assets and that have acquired
asset-backed securities as investments has increased markedly. The reason for this increase
is that securitization activities, if conducted in a
prudent manner, can yield significant financial
and operational benefits for banking organizations. At the same time, bank supervisors must
carefully assess the effect of asset securitization
activities on the financial condition, performance, and risk profiles of banking organizations.
This article examines asset securitization
from a supervisory perspective. The first section describes the mechanics of the securitization process, the structures of asset-backed
securities, and the involvement of banking organizations in this process. It also discusses the
incentives for issuing and acquiring assetbacked securities.
The second section outlines the supervisory
issues associated with ownership or issuance of
asset-backed securities by banking organizations
and the supervisory policies and procedures used
by the Federal Reserve System in light of the
growing involvement of banking organizations in
asset securitization. It summarizes generally accepted accounting principles (GAAP) and bank
regulatory reporting requirements as they pertain
to sales treatment of asset securitization transactions. This section also examines the provisions
of the risk-based capital guidelines that relate to
the asset securitization process.
AN OVERVIEW OF ASSET
SECURITIZATION
In its simplest form, asset securitization involves
the selling of assets. The process first segregates
generally illiquid assets into pools and transforms
these pools into capital market instruments. The
payment of principal and interest on these instruments depends on the cash flows from the assets
in the pool that underlies the new securities. The
new securities may differ from their underlying
assets in terms of denominations, cash flows, and
other features that make the securities more
attractive to investors.
Asset securitization, as we know it, began
when the federal government encouraged the
securitization of residential mortgages. In 1970,
the Government National Mortgage Association
(GNMA) created the first publicly traded mortgage-backed security. Soon, the Federal National Mortgage Association (FNMA) and the
Federal Home Loan Mortgage Corporation
(FHLMC), both government-sponsored agencies, also developed mortgage-backed securities.
The guarantees that these government or government-sponsored agencies provide, which assure
investors of the payment of principal and interest, have greatly facilitated the securitization of
mortgage assets.
Asset securitization has grown dramatically
over the past few years. The outstanding amount
of residential mortgage-backed, pass-through securities, which are the largest segment of the
asset-backed securities market, has increased
approximately 168 percent since year-end 1984 to
$769 billion by year-end 1988 (table 1). In addition to rapid growth in residential mortgagebacked securities, recent years have witnessed
an explosion in the issuance of securities backed
by other assets: credit card receivables, automobile loans, boat loans, commercial real estate
loans, home equity loans, student loans, nonper-
660
Federal Reserve Bulletin • October 1989
1. O u t s t a n d i n g a m o u n t o f p a s s - t h r o u g h s e c u r i t i e s
backed by residential mortgages
Billions of dollars
Type of pass-through
Year
1984
1985
1986
1987
1988
GNMA
FHLMC
FNMA
Private
issues'
180.0
212.1
262.7
317.6
340.5
70.8
100.4
171.4
212.6
225.0
36.2
55.0
97.2
140.0
178.3
n.a.
n.a.
6.3
14.0
25.1
Total
287.0
367.5
537.6
684.2
768.9
1. The source for these data is Financial World Publications,
n.a. Not available.
forming loans, and lease receivables. The annual
issuance of securities backed by assets other
than mortgages has increased from slightly more
than $1 billion in 1985 to more than $16 billion by
the end of 1988.
The Securitization
Process
The asset securitization process begins, as depicted in the chart, with the segregation of loans
or leases into pools that are relatively homogeneous with respect to type of credit, maturity,
and interest rate risk. These pools of assets are
then transferred to a trust or other entity known
as an issuer because it issues the securities that
are acquired by investors. These asset-backed
securities may take the form of debt, certificates of beneficial ownership, or other instruments. The issuer is typically protected from
bankruptcy by various structural and legal arrangements. A sponsor that provides the assets
to be securitized owns or otherwise establishes
the issuer.
Each issue of asset-backed securities has a
servicer responsible for collecting interest and
principal payments on the loans or leases in the
underlying pool of assets and for transmitting
these funds to investors (or a trustee representing
them). A trustee monitors the activities of servicers to ensure that they properly fulfill their
role.
A guarantor may also be involved to see that
principal and interest payments will be received
by investors on a timely basis, even if the servicer is unable to collect these payments from the
obligors. Many issues of mortgage-backed secu-
rities are either guaranteed directly by GNMA, a
government agency backed by the full faith and
credit of the U.S. government, or by FNMA or
FHLMC, government-sponsored agencies that
are not backed by the full faith and credit of the
U.S. government but are perceived by the credit
markets to have its implicit support. Privately
issued, mortgage-backed securities and other
types of asset-backed securities generally depend
on some form of credit enhancement provided by
the originator or third party to insulate the investor from some or all of any credit losses. Usually,
credit enhancement is provided for several multiples of the historical losses experienced on the
particular asset backing the security.
One form of credit enhancement is the recourse provision, or guarantee, that requires
the originator to cover any losses up to an
amount contractually agreed upon. Some assetbacked securities, such as those backed by
credit card receivables, typically use a "spread
account." This account is actually an escrow
account whose funds are derived from a portion
of the spread between the interest earned on the
assets in the underlying pool and the lower
interest paid on securities issued by the trust.
The amounts that accumulate in the account are
used to cover credit losses in the underlying
asset pool up to several multiples of historical
losses on the underlying assets.
Overcollateralization, another form of credit
enhancement covering a predetermined amount
of potential credit losses, occurs when the value
of the underlying assets exceeds the face value of
the securities. Also, the senior-subordinated security structure provides credit enhancement,
generally to the senior class. Under such a structure, at least two classes of asset-backed securities are issued, with the senior class having a
priority claim on the cash flows from the underlying pool of assets. Since the senior class has
this priority claim, cash flows from the underlying pool of assets must first satisfy the requirements of the senior class. Only after these requirements have been met will the cash flows be
directed to service the subordinated class. Therefore, the subordinated class must absorb credit
losses before any are charged to the senior
portion. Other forms of credit enhancement include standby letters of credit or surety bonds
Asset Securitization: A Supervisory Perspective
from third parties that protect investors against
losses.
An investment banking firm or other organization generally serves as an underwriter for assetbacked securities. In addition, for asset-backed
issues that are publicly offered, a credit rating
agency will analyze the policies and operations of
the originator and servicer, as well as the structure, underlying pool of assets, expected cash
flows, and other attributes of such securities.
Before assigning a rating to the issue, the rating
agency will also assess the extent of loss protection provided to investors by any credit enhancements associated with the issue. (See the chart.)
Traditional lending activities are generally
funded by deposits or other liabilities, and both
the assets and related liabilities are reflected on
the balance sheet. Deposit liabilities must generally increase to fund additional loans.
In contrast, the securitization process generally does not increase on-balance-sheet liabilities
in proportion to the volume of loans or other
assets being originated and securitized. As discussed more fully below, when banking organi-
zations securitize their assets and these transactions are treated as sales, both the assets and the
related asset-backed securities (that is, liabilities)
are removed from the balance sheet. The cash
proceeds from the securitization transactions are
generally used to originate or acquire additional
loans or other assets for securitization, and the
process is then repeated. Thus, for the same
volume of loan originations, securitization results in lower amounts of assets and liabilities
when compared with traditional lending activities.
The Structure
Asset-Backed
of
Securities
Asset securitization involves different kinds of
capital market instruments. These instruments
may be structured as "pass-throughs" or "paythroughs." Under a pass-through structure, the
cash flows from the underlying pool of assets
are passed through to investors on a pro rata
basis. This type of security is typically a single-
Pass-through, asset-backed securities: structure and cash flows
Forwards
principal <nid
interest
payments
Remit • i
principal and I
interest j |
payments
1
Originator/
Sponsor/
Servicer
Purchases
credit
enhancement
Initial cash
proceeds
from
securities
Transfers
loans on
receivables
661
"Passes through" principal and
interest payments
Initial cash
proceeds
from
Initial cash
purchase
Provides credit
enhancement for the
asset pool, for example,
by a letter of credit
Cash flows
Structure
662
Federal Reserve Bulletin • October 1989
class instrument such as a GNMA passthrough. The pay-through structure, which has
multiple classes, combines the cash flows from
the underlying pool of assets and reallocates
them to two or more issues of securities that
have different cash flow characteristics and
maturities. An example is the collateralized
mortgage obligation (CMO), which has a series
of bond classes, each with its own specified
coupon and stated maturity. In most cases, the
assets that make up the CMO collateral pools
are pass-through securities backed by residential mortgages. Scheduled principal payments,
and any prepayments, from the underlying collateral go first to the earliest maturing class of
bonds. This first class of bonds must be retired
before the principal cash flows are used to retire
the later bond classes. The development of the
pay-through structure was a result of the desire
to broaden the marketability of these securities
to investors who were interested in maturities
other than those generally associated with passthrough securities.
Multiple-class, asset-backed securities may
also be issued as derivative instruments such as
"stripped" securities. Investors in each class of
a stripped security will receive a different portion of the principal and interest cash flows
from the underlying pool of assets. In their
purest form, stripped securities may be issued
as interest-only (IO) strips for which investors
receive 100 percent of the interest from the
underlying pool of assets and as principal-only
(PO) strips for which the investors receive all of
the principal.
In addition to these securities, other types of
financial instruments may arise as a result of
asset securitization. One such instrument is
loan servicing rights that are created when
organizations purchase the right to act as servicers for pools of loans. The cost of these
purchased servicing rights may be recorded as
an intangible asset when certain criteria are
met. Excess servicing fee receivables, another
financial instrument, generally arise when the
cash flows from the underlying assets that a
servicer expects to receive exceed standard
normal servicing fees. Another instrument, asset-backed securities residuals (sometimes referred to as "residuals" or "residual inter-
ests"), represents claims on any cash flows that
remain after all obligations to investors and any
related expenses have been met. Such excess
cash flows may result from overcollateralization or from reinvestment income. Residuals
can be retained by sponsors or purchased by
investors in the form of securities.
Involvement
of
Banking
Organizations
Banking organizations have long been involved
in asset securitization, particularly in the welldeveloped market for securities backed by residential mortgages. More recently, banking organizations, besides substantially augmenting
the volume of their activities in this area, have
also started securitizing other types of assets,
as mentioned earlier, particularly credit card
receivables. Also, many banking organizations
have increased their reliance on securitization
for funding, have acted as servicers or trustees
for securitized issues, and have purchased asset-backed securities or derivative instruments
for investment or other purposes.
Currently, securities subsidiaries of bank
holding companies may underwrite assetbacked securities originated by third parties as
long as the criteria of the Federal Reserve
Board's section 20 orders are met. 1 In June
1987, the Comptroller of the Currency (OCC)
permitted national banks to underwrite securities backed by their own assets. This decision
was challenged, and in December 1988, a federal district court ruled that such underwriting
activities were in violation of the Glass-Steagall
Act. The decision was recently reversed upon
appeal by the OCC.
1. In April and May 1987, the Board approved applications
to underwrite and deal in, to a limited extent, one- to
four-family mortgage-related securities that are rated as investment quality (that is, one of the top four categories) by a
nationally recognized rating agency. The Board found that
these proposals, as limited in the Order, are consistent with
section 20 of the Glass-Steagall Act. In addition, the Board
approved applications, in July 1987, to underwrite and deal
in, on a limited basis, consumer-receivable-related securities.
Asset Securitization: A Supervisory Perspective
Banking organizations securitize assets to accomplish several objectives. First, in selling rather than
holding the originated assets, banking organizations
are able to lower liabilities and assets and, therefore,
reduce their reserve and capital requirements and
deposit insurance premiums. Securitization also
provides an additional source of funding, generally
at a lower cost than other funding sources. At the
same time, the organization can earn fee income
from originating loans that are sold and by then
servicing those loans.
Decisions to sell rather than hold loans that are
used to back securities also affect the timing for
recording fee revenue in the income statement.
Once the sales are completed, banking organizations can immediately recognize income from (1)
syndication fees, (2) previously deferred loan
fees related to loans that are sold, and (3) any
excess servicing fees created by the asset securitization process.
Thus, asset sales boost standard income measures, such as return on assets, in two ways.
They serve to bolster income in the period of the
sale through the generation of fees while reducing the total volume of assets and thus raising the
return on assets ratio. By creating a process, or
"pipeline," that continually originates and securitizes assets, thereby removing them from the
balance sheet, a banking organization can use its
systems and loan expertise to originate loans that
otherwise might not be made. Thus, a banking
organization can increase its share of markets for
particular types of loans without the deterioration of its capital ratios.
The largest purchasers of asset-backed securities have been pension funds, insurance companies, savings and loan associations, and commercial banks. Investors tend to be risk averse.
Thus, asset-backed securities are attractive investments because they are considered relatively
safe as a result of the government or governmentsponsored agencies' guarantees or because of
private credit enhancements. Also, the returns
on asset-backed securities are typically higher
than those on U.S. Treasury securities with
comparable maturities. Furthermore, investors
are able to diversify their portfolio by acquiring
different types of assets, for example, mortgages
or credit card receivables, from different geographic areas.
\
663
SUPERVISORY CONSIDERATIONS, POLICIES,
AND PROCEDURES REGARDING
ASSET SECURITIZATION
While clear benefits accrue to banking organizations that engage in securitization activities and
that invest in asset-backed securities, these activities have the potential of increasing the overall risk profile of the banking organization if they
are not carried out in a prudent manner. For the
most part, the risks that financial institutions
encounter in the securitization process are identical to those that they face in traditional lending
transactions. These involve credit risk, concentration risk, operational risk, liquidity risk, funding risk, and interest rate risk—including prepayment risk. However, since the securitization
process separates the traditional lending function
into several limited roles, such as originator,
servicer, credit enhancer, trustee, and investor,
the types of risks that a bank will encounter will
differ depending on the role it assumes.
As with direct investments in the underlying
assets, investors in asset-backed securities will
be exposed to credit risk, that is, the risk that
obligors will default on principal and interest
payments. Investors are also subject to the risk
that the various parties in the securitization process, for example, the servicer or trustee, will be
unable to fulfill their contractual obligations.
Moreover, investors may be susceptible to concentrations of risks across various asset-backed
security issues through overexposure to an organization performing several roles in the securitization process or as a result of geographic concentrations within the pool of assets providing
the cash flows for an individual issue. Since the
secondary markets for certain asset-backed securities are thin, investors may also encounter
greater-than-anticipated difficulties in selling
their securities. Furthermore, certain derivative
instruments, such as stripped, asset-backed securities and residuals, may be extremely sensitive to interest rates and volatile in price. Therefore, these instruments may dramatically affect
the risk exposure of investors unless they are
used in a properly structured hedging strategy.
Banking organizations that issue asset-backed
securities may be subject to pressures to sell only
their best assets—thus reducing the quality of
664
Federal Reserve Bulletin • October 1989
their own loan portfolios. On the other hand,
some banking organizations may feel pressures
to relax their credit standards because they can
sell assets with higher risk than those they normally would retain for their own portfolios.
Banking organizations that service securitization issues must ensure that their policies, operations, and systems will not permit breakdowns
that may lead to defaults. Issuers and servicers
may face pressures to provide "moral recourse"
by repurchasing securities backed by loans or
leases they have originated that have deteriorated and become nonperforming. Funding risk
may also be a problem for issuers when market
aberrations do not permit the timely issuance of
asset-backed securities that are in the securitization pipeline.
In view of the increasing involvement of banking organizations in the asset securitization process and the desire to foster prudent banking
practice with respect to this activity, the Federal
Reserve and the other banking regulators have
taken several steps over the years to address
securitization activities. These include (1) maintenance of regulatory reporting requirements for
sales treatment that discourage banks from retaining credit risk when securitizing their assets;
(2) issuance of an interagency supervisory policy
statement, which discusses investments in
stripped, asset-backed securities and residual
interests; (3) development of the risk-based capital framework; and (4) development of examination guidelines for various aspects of the securitization process.
Sales versus Financing
for Reporting
Purposes
Treatment
Asset securitization transactions are frequently
structured to obtain certain accounting treatments, which, in turn, affect reported measures
of profitability and capital adequacy. These measures are used extensively in analyses performed
by supervisory agencies and by the public to
assess the financial condition and performance of
banking organizations.
In transferring assets into a pool to serve as
collateral for asset-backed securities, a key
question is whether the transfer should be
treated as a sale of the assets or as a collater-
alized borrowing, that is, a financing transaction secured by assets. Sales treatment results
in the removal of the assets from the banking
organization's balance sheet, thus reducing total assets relative to earnings and capital, and
thereby producing higher performance and capital ratios. Treatment of these transactions as
financings, however, means that the assets in
the pool remain on the balance sheet and are
subject to capital requirements, and the related
liabilities are subject to reserve requirements. 2
From a supervisory standpoint, outright sales
do not present a problem in that such transactions transfer all of the risks and rewards of
ownership of the underlying assets. On the
other hand, transfers that involve recourse to
the selling institution, if treated as sales, can
result in credit risk that is not reflected on the
balance sheet of that institution.
For bank holding companies and their nonbank affiliates, or for any other nonbank entity
publishing audited financial statements, these
accounting treatments are determined by
GAAP. Bank holding companies also follow
GAAP when preparing regulatory reports filed
with the Federal Reserve. Insured commercial
banks, on the other hand, must report asset
securitization transactions in accordance with
regulatory reporting requirements set forth in
the instructions for the commercial bank Reports of Condition and Income (Call Reports).
The federal banking agencies jointly determine
these reporting requirements, which are published by the Federal Financial Institutions Examination Council (FFIEC). While these regulatory reporting requirements usually follow
GAAP, special reporting requirements apply to
sales of assets, including those involved in asset
securitization. When asset transfers do not involve recourse to the selling institution, then
both GAAP and regulatory reporting requirements are consistent.
2. Note, however, that the Federal Reserve's Regulation D
(Reserve Requirements of Depository Institutions) defines
what constitutes a reservable liability of a depository institution. Thus, although a given transaction may qualify as an
asset sale for Call Report purposes, it nevertheless could
result in a reservable liability under Regulation D.
!
Asset Securitization: A Supervisory Perspective
Sales
Treatment
for Financial Reporting
Purposes
665
therein, less the unearned portion of these fees
and charges). 4
Under GAAP, an asset sale occurs when both the
risks and rewards of ownership have been transferred to the purchaser. Thus, asset transfers for
securitization that do not involve direct or indirect recourse to the transferring banking organization are treated as sales. When asset transfers
involve recourse, on the other hand, sales or
financing treatment is determined by the criteria
specified by Financial Accounting Standards
Board Statement No. 77 (FASB 77). 3
FASB 77 defines recourse as the right of a
transferee of assets to receive payment from the
transferor for the "failure of the debtors to pay
when due, effects of prepayments, or adjustments resulting from defects in the eligibility of
the transferred receivables." This standard establishes the following criteria that, if satisfied,
permit a transfer of receivables with recourse to
be considered a sale of the assets rather than a
financing transaction:
1. The transferor surrenders control of the
future economic benefits relating to the receivables.
2. The transferor can reasonably estimate its
obligation under the recourse provisions.
3. The transferee cannot return the receivables
to the transferor except pursuant to the recourse
provisions.
When the transfer of assets is deemed a sale in
accordance with these criteria, the assets that
have been sold are removed from the transferor's
balance sheet.
At the same time, the amount of losses estimated to accrue to the seller under the recourse
provisions must be recorded as a direct liability
on the seller's books. This balance sheet liability
(the recourse liability account) must be periodically adjusted to reflect any changes in such loss
estimates. The sales gain or loss is the difference
between the sales price, adjusted for this accrual
of estimated losses, and the recorded amount of
net receivables (gross receivables, including any
fees or charges owed by the debtors included
As an exception to the general rule, under the
separate Call Report instruction for "participation in pools of residential mortgages," banks
engaging in the disposal of residential mortgage
loan pools under the programs of GNMA,
FNMA, and FHLMC are able to treat such
transactions as sales of the underlying mortgages
without regard to the amount of risk retained by
the seller.
Banks that sell "private" certificates of participation in pools of residential mortgages, (that is,
pools that are not sold through a government
agency program) are permitted to treat such
transactions as sales only when the selling "bank
does not retain any significant risk of loss, either
directly or indirectly." Recourse is deemed significant when the maximum contractual exposure
3. FASB 77, "Reporting by Transferors for Transfers of
Receivables with Recourse," was issued in December 1983.
4. Similar but stricter rules applying to CMOs are presented in FASB Technical Bulletin 85-2, "Collateralized
Mortgage Obligations."
Sales Treatment
for Call Report
Purposes
The Call Report instructions for commercial
banks contain a general rule that applies to all
"sales of assets," other than participations in
pools of residential mortgages. This instruction
provides that a transfer of loans or other assets is
reported as a sale "only if the transferring institution (1) retains no risk of loss from the assets
transferred resulting from any cause and (2) has
no obligation to any party for the payment of
principal or interest on the assets transferred
resulting from any cause." A transfer involving
any retention of risk or obligation for payment,
even if limited under the terms of the transfer
agreement, is generally considered a borrowing
transaction, and the entire amount of the assets
transferred must remain on the books of the
transferring institution. This risk retention may
occur directly as a result of recourse provisions
or, indirectly, as a result of retaining a subordinated class of an asset-backed security or by
some other means. Thus, securitization transactions involving recourse to the originator will
generally be reported as financings for Call Report purposes.
666
Federal Reserve Bulletin • October 1989
under the recourse provision (or through retention of a subordinate interest in the mortgages) at
the time of the transfer is greater than the amount
of the probable loss that the bank has reasonably
estimated for the transferred mortgages. Under
such circumstances, the issuing bank has retained the entire risk of loss, and the transfer of
mortgages must be reported as a financing transaction.
The special reporting requirements for transfers involving residential mortgages were implemented so as not to hamper the development of
the secondary mortgage markets. When these
reporting requirements were adopted, sales of
residential mortgages entailed little or no risk
retention by the selling institution. The FFIEC is
now reviewing the general regulatory reporting
treatment of asset sales with recourse. In connection with this review, the FFIEC is evaluating
the need for the special reporting requirements
for residential mortgage sales and the appropriate
way to apply capital requirements to transfers of
residential mortgages with recourse. The FASB
is also reviewing GAAP accounting standards for
asset sales with recourse in conjunction with its
Financial Instruments Project and expects to
develop a comprehensive set of accounting standards for all financial instruments, including
those associated with asset securitization.
Regarding the rationale for the regulatory reporting requirements for asset sales with recourse, the banking regulators historically have
considered the existence of any risk that may be
borne by the seller as the determining factor in
deciding if sales treatment is appropriate. Also,
regulators have traditionally been concerned that
loss estimation may be virtually impossible for
certain types of loans, such as commercial loans,
construction loans, and loans to developing
countries. Such estimates, however, may be possible for pools of residential mortgages or consumer loans. Under GAAP, sales treatment is
prohibited when losses on the transferred loans
cannot be estimated.
In some asset transfers, the transferor, generally the originator, may be subject to a partial or
limited recourse provision. Even when the terms
of the transfer ostensibly provide only limited
recourse, it may, in fact, comprise all losses that
are likely to occur. Thus the potential losses to
the bank are the same as they would have been if
the assets had not been sold. For example, in the
transfer of a group of high quality assets with a
"reasonably estimated" loss rate of 1 percent, if
the transferor assumes the risk of default up to a
maximum of 10 percent of the total dollar value
of the assets transferred, the transferor in effect
retains the entire risk inherent in the assets
transferred. In addition, to remain viable in the
market, the transferor may feel moral pressure to
insulate investors from any losses above the
amount it is legally committed to meet.
Finally, when "sales" can only be made with
recourse, as opposed to selling assets at enough
of a discount to insulate the purchaser of the
assets from all but catastrophic losses, banks
may tend to sell only the highest quality assets
and keep those of lower quality.
As the asset securitization process has
evolved, the banking agencies have reviewed
proposed types of asset securitization transactions for compliance with the rules for reporting
sales of assets on the Call Report. One such
transaction approved by the banking agencies did
not involve recourse to the selling bank but
instead used a separate spread account, funded
through excess cash flows from the underlying
pool of assets, to absorb credit losses on the
transferred loans. The Federal Reserve and the
other banking agencies determined that, for regulatory reporting purposes, sales treatment is
appropriate for such structures because the selling bank does not retain the risk of loss.
Interagency
Investment
Policy
Statement
On April 20, 1988, the Federal Reserve, along
with the other federal banking agencies, issued a
policy statement that addressed investment and
trading practices of insured commercial banks.
This policy statement also covered stripped,
mortgage-backed securities and residual interests. Supervisory concerns about these instruments arise because of their extreme sensitivity
to interest rates and the resulting price volatility.
Generally, POs increase in value when interest
rates decline because prepayments of mortgages
increase, thus shortening their maturities and
allowing investors to recover their investment
sooner than they anticipated. In contrast, IOs
Asset Securitization: A Supervisory Perspective
and residuals increase in value when interest
rates rise because prepayments decline, maturities lengthen, and more interest is collected on
the underlying mortgages. Therefore, banking
organizations sometimes use the purchase of a
PO to offset the effect of interest rate movements
on the value of mortgage servicing, and the
purchase of an 10 or residual to offset interest
rate risk associated with mortgages and similar
instruments.
However, when purchasing an 10, PO, or
residual, without offsetting hedges, the investor
may be speculating on future interest rate movements and how those movements will affect the
prepayment of the underlying collateral. Furthermore, stripped, mortgage-backed securities that
do not have the guarantee of a government
agency or government-sponsored agency as to
principal and interest have an added element of
credit risk. The interagency policy statement on
such investments discussed the appropriateness
of them for banks and the prudential measures
that a bank should take to protect itself from
undue risk when it invests in these instruments.5
Under guidelines set forth in the policy statement, IOs and POs may be unsuitable for an
institution's investment portfolio, particularly if
held in significant amounts. Generally, these
guidelines state that banks should not invest in
stripped, mortgage-backed securities, such as
IOs and POs, unless they have highly sophisticated and well-managed securities portfolios,
mortgage portfolios, or mortgage banking functions. In such institutions, however, the acquisition of IOs and POs should only be undertaken in
conformance with carefully developed and documented plans prescribing specific positioning
limits and control arrangements that have been
approved by the bank's board of directors.
Risk-Based Capital Provisions
Asset
Securitization
Affecting
Capital requirements play an important role in
the supervision of banking organizations. The
new risk-based capital framework, published in
•f '
•
5. Press release, "Supervisory Policy Concerning Selection of Securities Dealers and Unsuitable Investment Practices," Federal Reserve Board, April 20, 1988.
667
January 1989, assigns assets and the credit equivalent amounts of off-balance-sheet items to various broad risk categories, depending on the level
of credit risk associated with that asset. The
aggregate dollar value of the amount in each risk
category is then multiplied by the risk weight
associated with it. The resulting weighted values
from each of the risk categories are added together, and this sum is the bank's total of riskweighted assets. An organization's capital (composed of stockholders' equity and certain other
items) is then divided by its total of risk-weighted
assets to calculate its capital ratio.6 The riskbased capital framework will be phased in beginning at the end of 1990 and will be fully effective
in 1993.
The risk-based capital framework has three
main features that will affect the asset securitization activities of banking organizations. First, the
framework assigns risk weights to loans, assetbacked securities, and other assets related to
securitization. Second, bank holding companies
that transfer assets with recourse to the seller as
part of the securitization process will now explicitly be required to hold capital against their
off-balance-sheet credit exposures. Third, banking organizations that provide credit enhancement to asset securitization issues through
standby letters of credit or by other means will
have to hold capital against the related offbalance-sheet credit exposures.
The risk weights assigned to an asset-backed
security depend on the issuer and whether the
assets that constitute the collateral pool are mortgage related, for example, residential mortgages
or pass-through securities. Asset-backed securities issued by a trust or by a single-purpose
corporation and backed by nonmortgage assets
will receive a risk weight of 100 percent.
Securities guaranteed by U.S. government
agencies and those issued by U.S. governmentsponsored agencies are assigned risk weights of 0
and 20 percent respectively because of the low
degree of credit risk. Accordingly, mortgagebacked, pass-through securities guaranteed by
6. The amounts used for this calculation are taken from a
banking organization's regulatory reports: the Call Report for
commercial banks and the Consolidated Financial Statements
for Bank Holding Companies (F.R. Y-9C).
668
Federal Reserve Bulletin • October 1989
GNMA will have a risk weight of 0 percent. In
addition, securities such as participation certificates and CMOs issued by FNMA or FHLMC
will have a risk weight of 20 percent.
However, several types of securities issued by
FNMA and FHLMC are excluded from the
lower risk weight and slotted in the 100 percent
risk weight category. Residual interests (for example, CMO residuals) and subordinated classes
of pass-through securities or CMOs that absorb
more than their pro rata share of loss are assigned to the 100 percent risk weight category.
Furthermore, all stripped, mortgage-backed securities, including IOs, POs, and similar instruments will also receive a risk weight of 100
percent because of their extreme price volatility.
The treatment of stripped, mortgage-backed securities will be reconsidered when a method to
measure interest rate risk is incorporated into the
risk-based capital guidelines.
A privately issued, mortgage-backed security
that meets the criteria listed below is considered
either a direct or indirect holding of the underlying mortgage-related assets and is assigned to the
same risk category as those assets (for example,
U.S. government agency securities, U.S. government-sponsored agency securities, FHA- and
VA-guaranteed mortgages, and conventional
mortgages). However, under no circumstances
will a privately issued, mortgage-backed security
be assigned to the 0 percent risk-weight category.
Therefore, private issues that are backed by
GNMA securities will be assigned to the 20
percent risk-weight category as opposed to the 0
percent category appropriate to the underlying
GNMA securities. The criteria that a privately
issued, mortgage-backed security must meet to
be assigned the same risk weight as the underlying assets are as follows:
1. The underlying assets are held by an independent trustee, and the trustee has a first priority, perfected security interest in the underlying
assets on behalf of the holders of the security.
2. The holder of the security has an undivided
pro rata ownership interest in the underlying
mortgage assets, or the trust or single purpose
entity (or conduit) that issues the security has no
liabilities unrelated to the issued securities.
3. The cash flow from the underlying assets in
all cases fully meets the cash flow requirements
of the security without undue reliance on any
reinvestment income.
4. N o material reinvestment risk is associated
with any funds awaiting distribution to the holders of the security.
Those privately issued, mortgage-backed securities that do not meet the above criteria will
receive a risk weight of 100 percent (table 2).
If the underlying pool of mortgage-related assets is composed of more than one type of asset,
then the entire class of mortgage-backed securities is assigned to the category of the asset with
the highest risk weight in the pool. If the security
is backed by a pool consisting of U.S. government-sponsored agency securities, for example,
FHLMC participation certificates, that qualify
for a risk weight of 20 percent and conventional
mortgage loans that qualify for a risk weight of 50
percent, then the security would receive the 50
percent risk weight.
As previously mentioned, bank holding companies report their activities in accordance with
GAAP, which permits asset securitization transactions to be treated as sales when certain criteria are met, even when there is recourse to the
seller. With the advent of the risk-based capital
guidelines, bank holding companies will be explicitly required to hold capital against the offbalance-sheet credit exposure arising from the
contingent liability associated with the recourse
provisions. This exposure is considered a direct
credit substitute that would be converted at 100
2. Risk weights accorded to asset-backed securities
under the risk-based capital guidelines
Type of asset-backed securities
Risk weight
(percent)
GNMAs
FHLMC and FNMA securities
Privately issued, mortgage-backed securities
collateralized by GNMA, FHLMC, or
FNMA securities, or by FHA- or
VA-guaranteed mortgages'
Privately issued, mortgage-backed securities
collateralized by one- to four-family
residential properties'
Stripped, mortgage-backed securities,
residual interests, and subordinated
class securities
Asset-backed securities collateralized by
nonmortgage assets
0
20
20
50
100
100
1. Privately-issued, mortgage-backed securities must meet the criteria outlined in the risk-based capital guidelines to be accorded the
risk weight of the underlying collateral.
Asset Securitization: A Supervisory Perspective
percent to an on-balance-sheet credit equivalent
amount for appropriate risk weighting.
Banking organizations that issue standby letters of credit as credit enhancements for assetbacked security issues must hold capital against
these contingent liabilities under the risk-based
capital guidelines. According to the guidelines,
financial standby letters of credit are direct credit
substitutes, which are converted in their entirety
to credit equivalent amounts. The credit equivalent amounts are then risk weighted according to
the type of counterparty or, if relevant, to any
guarantee or collateral.
Examination
for Asset
Guidelines
Securitization7
The Federal Reserve is also in the process of
developing and implementing guidelines to assist
examiners in the on-site review of the involvement of banking organizations in securitization,
both as participants and as investors. The guidelines provide a more structured framework for
assessing the risks associated with the securitization process at banking organizations and for
determining that they have implemented certain
prudential policies and procedures in this area. In
accordance with these guidelines, examiners are
to determine that the following conditions are
being satisfied:
• Securitization activities are integrated into
the overall strategic objectives of the organization.
• Sources of credit risk are understood, and properly analyzed and managed, without excessive reliance on credit ratings by outside agencies.
• Credit, operational, and other risks are recognized and are addressed through appropriate
policies, procedures, management reports, and
other controls.
7. The Federal Reserve's examination guidelines were
developed by the Asset Securitization Task Force headed by
Franklin D. Dreyer, Senior Vice President, Federal Reserve
Bank of Chicago. The other members of the task force, from
the Reserve Banks, are James Barnes, Lawrence Cuy,
George Gregorash, Barbara Kavanagh, Mark Levonian, and
Donald Wilson, and from the Board, Roger Cole and the
authors.
669
• Liquidity and market risks are recognized,
and the organization is not excessively dependent on securitization as a substitute for funding
or as a source of income.
• Steps have been taken to minimize the potential for conflicts of interest due to securitization.
• Possible sources of structural failure in securitization transactions are recognized, and the
organization has adopted measures to minimize
the effect of such failures, should they occur.
• The organization is aware of the legal risks and
uncertainty regarding various aspects of securitization.
• Concentrations of exposure in the underlying
asset pools, in the asset-backed securities portfolio, or in the structural elements of securitization transactions are avoided.
• All sources of risk are evaluated at the inception of each securitization activity and are monitored on an ongoing basis.
Moreover, special seminars on asset securitization have been conducted for senior examiners, and in depth coverage of securitization issues will continue to be part of a regular
examiner training program.
CONCLUSION
In recent years the complexity of asset securitization has increased, and this trend most likely
will continue. In addition, securitization is increasing in other countries, and international
markets for asset-backed securities are expected
to grow rapidly.
Asset securitization activities should remain
beneficial to banking organizations when conducted in a prudent manner. Banking organizations, however, must carefully evaluate the risks
inherent in new forms of asset securitization and
maintain appropriate controls, systems, and
other measures to minimize these risks. The
Federal Reserve Board will continue to review
new asset-backed security structures as they
develop to assess the associated risks to banking
organizations and the financial system and to
factor these developments into its supervisory
process.
670
Treasury and Federal Reserve
Foreign Exchange Operations
This quarterly report, covering the period May
through July 1989, provides information on Treasury and System foreign exchange operations. It
was presented 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. Cathy Weintraub was primarily responsible for preparation of the report.1
The dollar was under upward pressure in the first
half of the period under review, continuing a
tendency that had begun toward the end of the
previous reporting period. The dollar was supported by strong investment demand until late
May. In early June, after a brief period of relative
market calm, the dollar came under renewed
upward pressure amid large capital flows precipitated by escalating tensions in China. These two
waves of upward pressure were met with heavy
and sustained intervention.
After mid-June the dollar retreated and, on
balance, ended the three-month period VA percent
lower on a trade-weighted basis as measured by
the staff of the Board of Governors. This reversal
in the dollar's direction coincided with changes
in the market's assessment of the U.S. economic
outlook—in particular, emerging indications of a
softening of economic growth and somewhat
lessened price pressures led to market expectations of an easier U.S. monetary policy stance
and lower short-term interest rates. Economic
and political developments abroad also influenced movements in dollar exchange rates over
the course of the three-month period.
Against individual currencies, the dollar's net
movements varied considerably. The dollar
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.
closed the period approximately 3 percent higher
against the Japanese yen and \ VA percent higher
against the British pound, while it was about VA
percent lower against the German mark and VA
percent lower against the Canadian dollar.
Intervention sales of dollars by the U.S. authorities between May and the end of July totaled
$11,917 million, of which $7,237.5 million were
sold against Japanese yen and $4,679.5 million
against German marks—the largest U.S. intervention for any three-month reporting period.
The bulk of these dollar sales occurred in May
and early June when the U.S. monetary authorities were intervening vigorously, in keeping with
the Group of Seven (G-7) policy commitments to
foster exchange rate stability. At the same time,
a statement from the White House expressed
concern about the dollar's appreciation and indicated that, if sustained or extended, it could
undermine international efforts to reduce global
trade imbalances. For the balance of the period,
intervention sales of dollars were modest as
upward pressures on the dollar subsided.
THE DOLLAR FIRMS IN MAY
During May, as in earlier months of 1989, the
dollar was buoyed by investment and commercial demand. At the opening of the three-month
period, investors and commercial interests were
gaining confidence about increasing the share of
dollar assets in their overall portfolios and reducing the hedged proportion of their dollar assets.
The relatively stable performance of the dollar
during the previous year had led many to conclude that it was no longer necessary to maintain
costly hedges to protect their dollar exposures
against exchange rate loss. Actions to unwind
these hedge positions continued to exert powerful upward pressure on the dollar, while adjust-
ments in commercial leads and lags also contributed to the dollar's upward momentum.
Meanwhile, investors continued to be attracted
to the relatively high interest rates available on
dollar-denominated instruments, even though interest rate differentials favoring the dollar had
already narrowed considerably from levels of last
fall and winter. Also, market sources reported
the widespread view that the prospect for capital
gains on long-term fixed income dollar securities
seemed attractive given the growing perception
that the U.S. economic expansion was slowing
and that interest rates in the United States were
likely to continue to decline.
With sentiment toward the dollar decidedly
positive during early May, the dollar advanced
smartly. To counter the upward pressure, the
U.S. monetary authorities sold a total of $550
million against marks and $400 million against
yen between May 1 and May 8, following through
on operations begun at the end of April.
The upward pressures intensified after the May
12 report of a smaller-than-expected rise in U.S.
producer prices during April buoyed both the
U.S. bond and exchange markets. By May 15 the
dollar broke through the significant technical and
psychological level of DM1.9250 against the
mark. Attitudes toward the dollar became even
more bullish after the May 17 release of preliminary U.S. trade data for March indicating sharp
1. Federal Reserve reciprocal currency arrangements
Millions of dollars
Institution
Amount of
facility,
July 31, 1989
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
Deutsche Bundesbank
Bank of Italy
Bank of Japan
250
1,000
2,000
250
3,000
2,000
6,000
3,000
5,000
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
700
500
250
300
4,000
Bank for International Settlements
Dollars against Swiss francs
Dollars against other authorized European
currencies
1,250
Total
600
30,100
improvement in U.S. external performance. On
May 22, the dollar pierced the DM2.00 level
against the mark and ¥ 1 4 0 against the yen. By
May 24, the dollar reached DM2.0150 and
¥142.85, up roughly IVA percent against the mark
and yen respectively from the end of April.
As the dollar moved to levels not seen since
the February 1987 Louvre Accord, market participants increasingly came to question the will of
the G-7 monetary authorities to halt the dollar's
rise. Under these circumstances, official warnings about the negative consequences of dollar
appreciation went unheeded. Instead, market
participants gave more credence to statements
by some U.S. and foreign officials that seemed to
reinforce the idea that the G-7 monetary authorities were prepared to tolerate the recent higher
levels for the dollar. Upward pressure continued
to mount as market participants bid for dollars
amid fears that the currency would go even
higher.
In this environment, the U.S. authorities intensified their intervention operations to resist the
dollar's rise. They sold a total of $5,785 million
between May 12 and May 31, reflecting sales of
$3,000 million against marks and $2,785 million
against yen. Of these amounts, a total of $2
billion was sold on May 18 and May 19 alone.
By late May, upward pressure on the dollar
abated and a more cautious atmosphere returned
to the foreign exchange market. A confluence of
factors contributed to the dollar's retracement at
the end of the month: The cumulative effect of
sizable and persistent central bank intervention
operations came to weigh upon the currency, and
these operations were viewed as a strong signal
that U.S. and foreign officials were seriously
committed to fostering exchange rate stability
and were determined to resist the dollar's rise.
Official interest rate increases in Japan, Britain,
Switzerland, and elsewhere in Europe late in the
month, though prompted by domestic considerations, were also seen as contributing to a more
stable exchange rate environment. Moreover,
indications of a moderation in the pace of U.S.
economic growth began to accumulate, reinforcing expectations that U.S. monetary policy
might soon be eased and, therefore, that favorable interest rate differentials would continue to
narrow.
672
Federal Reserve Bulletin • October 1989
The financial markets took special note of the
June 2 release of U.S. nonfarm payroll figures for
May that showed slower employment growth
than the markets had previously anticipated.
These data were seen as increasing the likelihood
that the Federal Reserve would soon ease its
monetary stance. The dollar moved sharply
lower, declining about 2 percent against the yen
over the course of the day. The dollar closed on
June 2 at DM1.9420 and at ¥140.45, V/i percent
lower against the mark and VA percent lower
against the yen respectively from the levels
reached on May 24, but VA percent and 5VI
percent higher respectively from the opening of
the reporting period.
RENEWED
IN EARLY
UPWARD
PRESSURE
TO
MID-JUNE
On June 5, however, the dollar moved abruptly
higher amid heightened market sensitivity to
political instability. In particular, market attention shifted to news commentary on the Chinese
government's efforts to suppress a student demonstration that reflected growing pressures for
democratic reform in China. The escalating tensions in China led many market participants to
anticipate capital outflows from East Asia or
safe-haven considerations stemming from a reassessment of the prospects for economic and
political stability in the region. A sharp decline in
the Hong Kong stock index added to the uncertainty of the time. The dollar's rise was particularly pronounced against the yen as the Japanese
currency remained vulnerable to selling pressures, in part because of the additional uncertainties associated with Japan's political situation.
The dollar was bid up strongly, notwithstanding
reductions in the prime lending rate at several
U.S. banks on June 5 and an easing of the federal
funds rate on the following day.
The bullish sentiment toward the dollar continued to build in advance of the June 15 release of
U.S. trade data, which were expected to show a
greatly reduced trade gap for April. The dollar
moved higher immediately after the preliminary
report of a narrowing of the trade deficit to $8.26
billion, from a revised deficit of $9.55 billion in
March. By midmorning in New York trading that
day, the dollar was pushed up to DM2.0470
against the mark and ¥151.90 against the yen, its
highest levels in more than two years. At these
levels, the dollar was 83/4 percent higher against
the mark and 14!/4 percent higher against the yen
from the end of April and was trading roughly 31
percent and 26 percent higher respectively from
the record lows reached on January 4, 1988.
THE DOLLAR
DECLINED
IN LATE
JUNE
As impressive as the dollar's upsurge had been,
market participants noted that the dollar failed to
move above the key technical levels of DM2.05
against the mark and ¥ 1 5 2 against the yen on
June 15, and profit-taking began to move the
dollar lower. Selling momentum quickly built as
market participants scrambled to unwind longdollar positions. The dollar plunged in volatile
trading, and many participants started to question whether this decline was the beginning of a
sea change in the dollar's direction. The dollar
closed on June 15 at DM1.9820 against the mark
and at ¥145.30 against the yen, down 3LA percent
and 4LA percent respectively from the highs
reached only hours earlier.
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 Venezuela
Central Bank of Bolivia
1. Data are on a value-date basis.
2. The facility expired on May 15, 1989.
Amount of
facility
Outstanding,
April 30,
1989
May
June
July
Outstanding,
July 31,
1989
450.02
100.03
0
...
...
...
100.0
100.0
3. The facility was established on July 11, 1989.
Treasury and Federal Reserve Foreign Exchange Operations
At the same time, the dollar was perceived as
vulnerable to central bank intervention operations. Consistent and heavy intervention sales of
dollars by the U.S. authorities, undertaken in coordination with other central banks, continued after
the dollar moved down from its peak and helped
convince market participants that the G-7 monetary
authorities were firmly committed to resisting the
dollar's rise and to maintaining exchange rate stability. By mid-June, market participants had become
more aware of the scale of intervention. Intervention sales of dollars by the U.S. authorities between
June 6 and June 30 totaled $4,952 million, including
$3,822.5 million sold against yen and $1,129.5 million sold against marks.
By late June, market attention had shifted back to
the outlook for the U.S. economy and monetary
policy. Indications of a softening in economic activity continued to appear, highlighted by the June 23
report of a sharp drop in durable goods orders in
May. Further, emerging signs pointed to some lessening of price pressures and to an underlying trend
in inflation that was less severe than markets had
previously feared. Market participants noted the
easing in the federal funds rate that had already
taken place earlier in the month and expected further declines. The dollar moved lower as market
participants anticipated that favorable interest rate
differentials would narrow further, thereby diminishing the relative attractiveness of dollar-denominated instruments.
An undertone of caution set in as the perceptions
of downside risk associated with holding dollar
assets increased. By late June, portfolio adjustments
to reduce hedging ratios appeared to taper off.
Capital flows from East Asia also appeared to di-
673
3. N e t p r o f i t s o r l o s s e s ( - ) o n U . S . T r e a s u r y a n d
Federal R e s e r v e current foreign e x c h a n g e
o p e r a t i o n s , M a y 1 - J u l y 31, 19891
Millions of dollars
Federal
Reserve
0
Valuation profits and losses
on outstanding assets
and liabilities as of
July 31, 1989
1,045.5
B Ess
U.S. Treasury
Exchange
Stabilization
Fund
77.3
502.8
1. Data are on a value-date basis.
minish. Furthermore, corporations reportedly refrained from buying dollars as the currency continued to decline. Under these circumstances, the
dollar experienced only a brief bout of upward
pressure in the aftermath of a June 25 upper house
by-election in Japan.
The dollar subsequently resumed its decline as
market attention again centered on the prospects
for further narrowing of favorable interest rate
differentials. Accumulating signs of slowing U.S.
economic growth were seen by market participants as increasing the likelihood that the Federal Reserve would again ease its monetary
stance. At the same time, economic statistics
were suggesting buoyant growth and increasing
inflationary pressures abroad. In these circumstances, the monetary authorities in Germany
and several other continental countries announced increases of Vi to 1 full percentage point
in their official interest rates on June 29. On July
6, the dollar traded as low as ¥137.85 against the
yen, down 53/4 percent from the June 9 close.
Warehousing Operations
During the three-month period, the Federal Reserve warehoused foreign currencies for the Exchange Stabilization Fund (ESF) of the Treasury.
Such warehousing operations have been carried out
from time to time since 1963. In carrying out such
an operation, the Federal Reserve buys the foreign
currency in a spot purchase from the Treasury and
simultaneously sells it back to the Treasury at the
same exchange rate for a future maturity date. A
key aspect of this type of transaction is that, since
both the Federal Reserve and the Treasury agree to
pay and to receive the same amount of foreign
currency, as specified by the use of the same
exchange rate, neither party incurs any foreign
exchange rate risk by virtue of this transaction. The
ESF may realize a profit or loss at the time the
warehousing transaction is undertaken and remains
exposed to valuation gains or losses on the foreign
currencies being warehoused (see table 3). A warehousing transaction is reversed when the Treasury
repays dollars and the Federal Reserve repays the
foreign currency it has acquired from the Treasury.
674
Federal Reserve Bulletin • October 1989
During the second week in July, however,
sentiment toward the dollar turned temporarily
more positive. A series of economic reports
released on July 14 was viewed in the exchange
market as favoring the dollar. These reports
confirmed that economic activity was setting into
a sustainable rate, while price data suggested that
the Federal Reserve might not have as much
leeway to lower interest rates as previously supposed. But then, in his congressional testimony
on July 20, Chairman Greenspan stated that the
balance of risks in the U.S. economy had shifted
away from greater inflation and that monetary
policy had been adjusted accordingly. The testimony temporarily revived expectations that U.S.
interest rates would continue to move lower, and
dollar rates subsequently drifted irregularly
lower through the balance of the month.
During July, at times when there appeared to
be upward pressure building toward the dollar,
the U.S. authorities entered the market to contain the pressure. These operations, however,
were modest and intermittent. In fact, the Trading Desk at the Federal Reserve Bank of New
York operated on only three days during July,
selling a total of $230 million dollars against yen
between July 11 and July 21. On July 31, the
dollar closed the three-month reporting period at
DM1.8648 against the mark and at ¥136.90
against the yen.
The total intervention sales of $11,917 million
during the three-month reporting period were
shared equally by the U.S. Treasury, through the
Exchange Stabilization Fund (ESF), and the
Federal Reserve System. To finance a portion of
these operations, the ESF "warehoused" $4,000
million equivalent of foreign currencies with the
Federal Reserve.
In other operations, the ESF acquired $198.0
million equivalent of Japanese yen through sales
of Special Drawing Rights and repayments under
the Supplementary Financing Facility of the International Monetary Fund. Also during the period, Bolivia drew the full $100 million from a
short-term facility established on July 11 by the
U.S. Treasury through the ESF. The ESF shortterm facility with Venezuela, established on
March 10, expired in May. There was no activity
in the facility during the period.
As of the end of July, cumulative bookkeeping
or valuation gains on outstanding foreign currency balances were $1,045.5 million for the
Federal Reserve and $502.8 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 goverments. As of
the end of July, holdings of such securities by the
Federal Reserve amounted to $5,113.6 million
equivalent, and holdings by the Treasury
amounted to the equivalent of $5,856.9 million.
675
Industrial Production
duction fell sharply, and output of construction
supplies, on balance, remained weak. At 141.7
percent of the 1977 average, the total index in
July was 2.7 percent higher than it was a year
earlier. Manufacturing output rose 0.2 percent in
July. Capacity utilization in manufacturing, at
83.9 percent, was about unchanged from June.
Detailed data for capacity utilization are shown
Released for publication August 16
Industrial production rose 0.2 percent in July
following a revised 0.1 percent decline in June.
The July gain mainly reflected a rebound in the
output of total materials as well as continued
strength in business equipment excluding motor
vehicles. In contrast, automobile and truck pro-
Ratio scale, 1977=100
160
140
120
100
80
160
140
120
100
80
180
160
140
120
100
All series are seasonally adjusted. Latest series: July.
676
Federal Reserve Bulletin • October 1989
1977 = 100
Percentage change from preceding month
1989
1989
Group
July
June
Mar.
Apr.
May
June
July
Percentage
change,
July 1988
to July
1989
Major market groups
Total industrial production
141.4
141.7
.1
.7
-.1
-.1
.2
2.7
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment...
Defense and space
Intermediate products...
Construction supplies.
Materials
151.9
150.7
139.4
130.5
142.7
168.9
181.1
156.1
139.8
127.2
151.9
150.6
138.9
127.2
143.3
169.3
181.7
156.4
139.3
127.8
.3
.2
-.3
-1.1
.0
.8
-.3
.6
-.1
-.1
.7
.9
.8
1.6
.6
.9
.7
.3
.6
.8
.1
.2
-.2
-.7
.0
.7
.5
-.2
-.6
-.4
.1
.1
.1
-.5
.3
.0
.2
-.1
.4
-.4
.0
-.1
-.4
-2.5
.4
.2
.3
.2
-.4
.5
3.7
.0
-.1
.2
-1.1
-1.2
.2
.0
.5
.3
.8
3.5
1.5
— 1.7
1.1
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
148.3
146.7
150.6
100.7
115.8
148.1
146.8
149.9
100.4
114.9
.1
-.1
.4
.6
.9
.7
.7
.7
.9
-.4
.0
.0
.0
-.8
-.7
3.3
2.7
4.1
-3.5
1.2
NOTE. Indexes are seasonally adjusted.
separately in "Capacity Utilization," Federal
Reserve monthly statistical release G.3.
In market groups, durable consumer goods fell
2.5 percent in July, owing mainly to a significant
curtailment in output of both autos and light
trucks for consumer use; auto assemblies fell
from an annual rate of 6.8 million units in June to
a rate of 6.0 million units in July. In addition, the
output of home goods, which had grown rapidly
during the first half of this year, fell noticeably in
July as the production of appliances dropped
Total industrial production—Revisions
Estimates as shown last month and current estimates
Index (1977=100)
Month
Apr
May
June
July
Percentage change
from previous
months
Previous
Current
Previous
Current
141.6
141.4
141.1
141.7
141.6
141.4
141.7
.6
-.1
-.2
.7
-.1
-.1
.2
back from a high level in June. Nondurable
consumer goods rose again as all major sectors
posted gains.
The further large increase in business equipment excluding motor vehicles again was led by
gains in manufacturing and commercial equipment as well as aircraft production. Materials
output rose in July, with increases widespread;
this rebound followed two months during which
most categories of durable and nondurable materials had weakened. The main exception to this
pattern was textile materials, which has been
strong since March. Energy materials, following
two months of strike-related declines, edged up
in July.
In industry groups, manufacturing production
rose slightly in July as most nondurable industries advanced. Durables were unchanged in July
as production of motor vehicles and parts fell,
but primary metals and aerospace industries
rose. Outside manufacturing, production at both
mines and utilities increased following declines
during most of the second quarter.
677
Statements to Congress
Statement by Wayne D. Angell and Edward W.
Kelley, Jr., Members, Board of Governors of the
Federal Reserve System, before the Subcommittee on Domestic Monetary Policy of the Committee on Banking, Finance and Urban Affairs, U.S.
House of Representatives,
August 3, 1989.
It is a pleasure for Governor Kelley and me to
visit with this subcommittee today. This is the
third time that I have had the opportunity to
discuss and review the Federal Reserve System's
expenses and budget with you. Today as we look
at the Federal Reserve System's budget for 1989,
Governor Kelley will discuss the Board's budget
and major initiatives, and my comments will
focus on the Reserve Bank budgets, as well as
major System initiatives.
The Board has recently made available to the
public and to this subcommittee copies of our
publication entitled Annual Report: Budget Review, 1988-89 presenting detailed information
about spending plans for 1989. Some of the
attached tables have been updated for 1988 actual experience and, therefore, small variations
exist from data in that document. 1
For 1989, the Federal Reserve System has
budgeted operating expenses of $1.4 billion, an
increase of 5.5 percent over 1988 actual expenses. Before getting to the substance of our
1989 budget, I would remind the subcommittee of
two aspects of Federal Reserve System operations that affect our budget in unusual ways.
First, 41 percent of System expenses arise from
services provided to depository institutions for
which, by law, we charge fees adequate to cover
all costs. Since additional costs of these services
are covered by additional revenues, any increases in costs do not result in reduced earnings
returned to the U.S. Treasury. In fact, since fees
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
cover actual costs plus imputed taxes and return
on capital (what we call the private sector adjustment factor) and the cost of float, increased costs
in priced services actually increase our earnings
contribution to the Treasury. Second, many fiscal agency operations are provided to the Treasury Department and other agencies on a reimbursable basis. Altogether, 58 percent of our
total expenses are either recovered through pricing or are reimbursable.
HISTORICAL
OVERVIEW
It may be helpful to put the budget for 1989 in
perspective by sketching the most recent tenyear history of System expenses. Between 1978
and 1988, Federal Reserve System expenses increased at an average annual rate of 6.8 percent;
System employment decreased at a rate of 0.1
percent; and volume increased 41 percent. Although unit costs did increase in the early 1980s
as Federal Reserve Bank volumes adjusted to
pricing after implementation of the Monetary
Control Act, since 1983, when the transition to
pricing was completed, unit cost for the composite of all functions has declined 0.8 percent per
year on average even while improvements have
been made in the quality of services.
For priced services, a decline in unit costs has
been particularly sharp in the electronic payment
areas in which equipment is more readily substituted for human resources, in which volume
growth has been the highest, and in which the
general decline in the cost of computing equipment relative to capacity has had the greatest
effect. In commercial check processing, on the
other hand, for which there has been a significant
effort to increase availability and other improvements in the quality of services, there has been
an increase in unit cost of 1.7 percent per year
since 1983. In the most recent year-over-year
comparison (1988 over 1987) check unit costs
678
Federal Reserve Bulletin • October 1989
rose 4.5 percent due to implementing provisions
of the Expedited Funds Availability legislation
(EFA).
For nonpriced cash operations—involving the
distribution of currency and coin—the decline in
unit cost has also been sharp; since 1983 the
average decline has been 4.1 percent per year. In
fiscal agency operations, also nonpriced, there
has been an increase in unit cost of 1.2 percent
per year since 1983, but a decline in unit cost of
3.1 percent since 1986.
From 1987 to 1988 we have seen an increase in
overall unit costs of 1.8 percent in the composite,
mainly reflecting the implementation of the Expedited Funds Availability Legislation.
The impact of a long-term productivity gain is
perhaps best seen in our trend in Reserve Bank
employment. In spite of significant growth in
volumes of operations, major transition adjustments following new legislation, and rapid
changes in the banking industry, actual employment has decreased from 1978 to 1988 by 142
employees.
In presenting our spending plans for 1989, I
would like to mention that both the Reserve
Bank budgets and the Board's budget must be
approved by the Board of Governors. Reserve
Bank budgets are first approved by the Bank's
Board of Directors and then reviewed by the
Committee on Federal Reserve Bank Activities
before submission to the Board of Governors.
Governor Kelley oversees the Board's budget,
and I will turn to him for that discussion.
BUDGET OF THE BOARD OF GOVERNORS
I am happy to address you today on the 1989
budget of the Board of Governors of the Federal
Reserve System. Since the budget process of the
Board has been discussed in testimony provided
in earlier years, and since it is thoroughly covered in the Annual Report: Budget Review for
1988-89, I do not plan to discuss it today.
Instead I will limit myself to the major themes of
the 1989 budget, some trend information you
may find useful, and a discussion of some of the
more significant issues facing the Board.
In November 1988 the Board approved a 1989
budget of $96.0 million. This amount was 6.0
percent greater than our 1988 expenses. While
this increase was somewhat higher than the level
experienced in 1986, 1987, or 1988, it was necessary in light of new initiatives facing the Board
and of some areas for which we had to commit
additional resources. Also, the very low increases in 1986 and 1987 reflected the initial
savings associated with our successful program
to reduce staff 10 percent while assuming a
growing workload. While the effect on our yearto-year increment has now disappeared, the savings from this staff reduction continue each year
since the Board has not increased the number of
positions since that reduction.
TEN-YEAR
TREND
Over the last ten years the Board's expenses
have increased at an average annual rate of 6.0
percent. In real terms, this rate of increase is 1.4
percent per year. The number of employees
included in the 1989 budget is virtually identical
to the number at the end of 1978 in spite of
dramatic increases in the Board's workload. Key
pieces of legislation that have affected the
Board's workload over the period include the
Financial Institutions Regulatory and Interest
Rate Control Act, the International Banking Act,
the Monetary Control Act, and most recently the
Expedited Funds Availability Section of the
Competitive Equality Banking Act. Recently, of
course, we have devoted a meaningful amount of
our resources to issues related to the savings and
loan problem.
Each of these acts has had substantial cost
implications for the Board. Typically, however,
after an initial period of adjustment, we have
found ways to reduce the volume of resources
necessary to meet our ongoing responsibilities
along with newly assigned functions. For instance, implementation of the Monetary Control
Act in 1980 required extensive data processing
resources to accommodate the collection of reserve data for the almost 35,000 financial institutions the act added to the 5,400 previously covered by the Federal Reserve. To accommodate
the cost growth related to the increase, steps
were taken in 1985 to streamline the transmission, editing, storage, and analysis of these data;
Statements
those steps have been extremely successful in
reducing costs. In an organization that must
gather, store, and manipulate large quantities of
data, an aggressive office automation program
has substantially improved the productivity of
staff members and has been, in part, responsible
for our ability to limit the size of our staff.
MAJOR ISSUES
Financial
Services
Industry
Developments
Basic changes in the financial and banking industries have forced us in recent years to plan for
and deal with new and complex issues. Earlier in
the 1980s, deregulation forced us to increase the
quantity and quality of our supervision efforts.
Recently, efforts to assist in resolving the savings
and loan problem, combined with the large number of problem institutions in the banking industry, have greatly increased our workload.
International
Issues
Increasingly, we find ourselves analyzing a
global economy in which we must foresee problems to react correctly and quickly when they do
occur. The debt situation in less developed countries, our own foreign trade deficit and exchange
rate issues, and international supervision continue to require significant resources.
Monetary
Policy
Both of the above sets of issues created new
complexities in the management of monetary
policy. To confront these issues, we have researched new analytical concepts and have enhanced our data collection through new surveys
that supplement our traditional methods of dealing with this critical mission.
Other New
Initiatives
As we informed you last year, we continue to be
able to hold the line on expenses and employment because of the dedication of our staff and
our aggressive program to improve productivity
through automation. Factors leading to the in-
to Congress
679
crease in expenses included funding for the following: a 4.1 percent general pay increase (equal
to the federal general pay increase) and for the
initial costs of our new compensation program; a
major survey of consumer finances to update and
expand the volume of information available for
monetary and economic policymaking; and continuation of our other efforts to enhance the
supervision function. We also initiated a program
to consolidate key banking structure and financial data into a database to be used throughout
the Federal Reserve System. This program is of
particular importance since the number of financial institutions that do business in more than one
Reserve Bank District is growing. Finally, there
was a 20 percent increase in the cost of the Office
of the Inspector General that the Board established in 1987. This increase reflected simply the
full-year cost of a complete staff rather than the
part-year costs during 1988 while the office was
starting up.
NEW COMPENSATION PROGRAM
The complexity of the issues I have discussed
has required us to take steps to ensure that we
are able to recruit and retain a very capable staff.
As we have testified in each of the past two
years, the major threat to our ability to maintain
such a staff has been the growing disparity between our salaries and those of the marketplace,
particularly for some of our key job families. Our
1989 budget provides funding to implement a new
compensation program that is more market and
performance appreciative than our former system and will offer compensation that is competitive with the private sector or government agencies that perform work similar to our own.
In 1987 and again in 1988, as interim measures
to combat this problem, we adjusted the salary
structure for some job families. These changes
were to maintain some measure of comparability
with the marketplace. As entry level salaries for
such professional positions as economists and
attorneys escalated, and as salary compression
and turnover of experienced people became a
greater problem, it became clear that such measures were not adequate. In response we developed a more comprehensive program to ensure
680
Federal Reserve Bulletin • October 1989
that the Board's overall salary structure was
equitable and competitive. Surveys were conducted of salary rates for jobs similar to those at
the Board, and salary administration procedures
were developed. The surveys found that there
were a significant number of employees who
were not being properly compensated in comparison to market rates.
To rectify this situation the Board has approved a new compensation program for employees, the first phase of which we initiated on July
2. The plan is to phase in the new program over
an eighteen-month period, reaching the final adjustment in January 1991.
The new compensation program for all of our
employees will increase our 1989 salary costs
$1.6 million, or 1.7 percent of the budget. Had the
whole program been implemented in 1989, rather
than being phased in, the full-year cost would
have been $4.6 million or 4.8 percent. The increases in certain job families are greater than
others, however, since the increases are targeted
at those career paths that were found to be
underpaid in the surveys conducted by the consultants to the Board. Future increases for employees will be tied to the market.
PRODUCTIVITY
Throughout this statement, I have referred to our
having handled increases in the workload without corresponding increases in staffing levels. I
might cite some examples for the period 1980
through 1988:
• Because of the Monetary Control Act, the
number of financial institutions from which the
Board was required to collect reserve data rose
from 5,400 to more than 40,000 in 1981.
• The number of bank holding companies
(BHCs) monitored has risen from approximately
3,100 to approximately 6,400.
• The number of bank and BHC examination
reports analyzed rose from approximately 600 to
approximately 1,400 in the same period.
• The number of bank holding companies under extra supervisory review rose from 300 to
approximately 1,500.
These examples are typical of the kinds of
increases the Board has encountered. I would
add that the volumes cited explain only part of
the effect of workload growth—the complexity of
the issues involved has greatly increased also.
In summary then, the 1989 budget provides the
resources necessary for the Board to properly
perform its critical functions. At the same time
the budget continues to demonstrate the restraint
that the Board has always shown in the use of
resources.
At this point I would return the presentation to
Governor Angell for a discussion of the Reserve
Bank budgets.
RESERVE BANK BUDGETS
The total budgeted expense of the Reserve
Banks—both priced and nonpriced—was held to
the 1989 budget objective of 5.5 percent over
estimated 1988 expenditures. Again these increases include the cost of EFA, which is expected to account for 0.4 percent of the overall
increase. Besides EFA, eight major initiatives
account for much of the budgeted increase in
Reserve Bank expenses. To fund these major
initiatives of $26.4 million, the remainder of the
budget increase was limited to 3.5 percent so as
to meet the budget objective.
The larger initiatives for 1989 include the following:
1. Automation ($9.8 million). Reserve Bank
operations in today's environment require a
more fail-safe computer environment, more use
of office automation, and extended communication networks. Included are projects to make the
nation's payments system more available and
reliable, and to provide for disaster recovery.
2. Facility improvements ($5.7 million). Many
of the System's facilities are 40 to 50 years old
and are no longer efficient. In 1989, building
projects in four Districts account for most of this
increase. One project is for asbestos management; the others will provide needed office and
vault space. Later in my remarks, I shall stress
the need for the Congress to remove the limitation on Federal Reserve Branch building funds to
enable us to continue to meet public needs for
Federal Reserve services.
3. Increased supervisory and regulatory activities ($3.1 million). The Reserve Banks require
Statements
greater resources to conduct more holding company examinations, to implement Regulation CC
(EFA), and to handle the greater complexity of
examinations generally.
4. Programs for the U.S. Treasury ($2.2 million). These programs will lead to long-run efficiencies in the issuance of savings bonds and
other public debt instruments but result in additional expenses at some Reserve Banks. The
programs involve more centralization of operations and increased automation.
It may be helpful to turn to the 1989 budgeted
expenses on a program basis for four service lines.
Expenses for Services to Financial Institutions
and the Public total $884.8 million and account
for almost two-thirds of the Reserve Banks' 1989
budgets. Expenses are budgeted to increase 4.3
percent over actual 1988. Employment is budgeted at 9,049 employees, an increase of 16
employees or 0.2 percent over 1988. Revenue
from these services is expected to offset $704
million of the $885 million.
Commercial check processing is by far the
largest service ($440.1 million), comprising almost half the budgeted expenses of this service
line and employing 5,478. Expenses for this
service are increasing $11.4 million, or 2.6 percent over 1988, and the number of staff members
will decrease by nine. The Banks expect to
process 15.4 billion commercial checks in 1989,
an increase of 2.8 percent, while unit cost is
expected to increase 2.2 percent. Added expenses of $5.4 million and additional staff of 134
can be attributed to the full-year effect of the
Expedited Funds Availability Act, which went
into effect in September 1988. Some consolidation of operations and the discontinuance of a
number of temporary employees will offset the
budget increases needed to implement the Expedited Funds Availability Act.
Expenses for the currency and coin service are
expected to rise $5.4 million, or 3.8 percent. The
number of employees in this service has been
decreased by 10, to 1,717. Volume is expected to
increase 4.2 percent and unit cost to decline 1.3
percent. Approximately 17.9 billion pieces are
expected to pass through high speed currency
sorters.
Expenses for the automated clearinghouse service are expected to increase 6.0 million in 1989
to Congress
681
or 8.9 percent, and employment is expected to
increase by 16. The staff is expected to expand
primarily to accommodate a service the System
intends to offer in 1989 called Government Notification of Change. Requested by the Treasury,
this service converts paper documents to electronic form at the Reserve Banks. Volume for the
ACH service is expected to increase 14.7 percent
and unit cost to decrease 7.2 percent.
Expenses for the funds transfer service are expected to increase $3.8 million, or 6.2 percent,
reflecting a staff increase of two and an increase in
volume of 4.0 percent. The growth of volume in this
service has slowed because of mergers of bank
holding companies and bank consolidations.
Expenses for the book-entry securities service
will increase $3.8 million, or 14.9 percent, while
employment and volume remain flat. Unit cost is
increasing 9.9 percent and can be attributed to
two factors, increased support costs to test and
maintain the Book-Entry Securities System
(BESS) and improvements in contingency capabilities.
Expenses for Supervision and
Regulation,
which total $201.5 million, are expected to increase $16.4 million, or 8.9 percent, over 1988.
This area now accounts for 15.1 percent of total
expenses, compared with 12.8 percent in 1983. A
staff level of 2,250 is budgeted, an increase of 41,
or 1.9 percent, over 1988. Expenses have increased at an annual rate of 8.9 percent since
1983 and staff levels have grown by 395, or 21
percent.
The 1989 increase in costs and employment is
the result of continued growth in the number of
bank holding companies; increases in the number
of de novo banks that, under Board guidelines,
require more frequent examinations; the System's enhanced program for examinations of
international operations of U.S. banks and U.S.
offices of foreign banks; and monitoring for compliance with Regulation CC. The increase for
staff, spread over most Districts, is moderate
compared with that in recent years. Other factors
contributing to the cost increment are a greater
emphasis on monitoring reserve accounts with
respect to daylight and overnight overdrafts, the
full-year effects of the development of the National Information Center, and the continued
expansion in the use of microcomputers.
682
Federal Reserve Bulletin • October 1989
Expenses for Services to the U.S. Treasury
and Other Government Agencies are budgeted
at $148.4 million, an increase of $6.8 million, or
4.8 percent, from 1988. These services account
for approximately 11 percent of operating costs.
Staffing is budgeted to decrease by 14, or 0.8
percent, to 1,805. Approximately $99 million of
the $149 million are reimbursable expenses.
The reduction in employment reflects major
efforts over several years by the Reserve Banks
and the Treasury to promote efficiency, generally
through consolidation and automation of operations. Most Districts have budgeted reductions
for 1989.
Major operational changes are taking place in
the savings bonds area. The Ohio Project features centralized issuance of over-the-counter
savings bonds. The Masterfile Payroll program
involves accounting for and printing bonds
purchased through payroll deduction plans.
These projects, when fully implemented, are
expected to save the Treasury about $25 million
annually.
Expenses for Monetary and Economic Policy
at the Federal Reserve Banks total $95.8 million
and account for approximately 7 percent of their
1989 budgets. Expenses are expected to increase
$8.5 million, or 9.8 percent, over 1988. Employment will increase 20 or 2.6 percent to 786.
Net additions to the staff, salary actions, and
automation initiatives are the main sources of
higher spending. The 1989 staffing level is slightly
lower than that budgeted for 1988.
A brief review of Reserve Bank expenses on
an object of expense basis also might be useful to
the subcommittee.
Personnel expenses consist of salaries for
officers and employees, other expenses to compensate personnel, and retirement and other
benefits. The major resource of the Reserve
Banks is their people, and total personnel costs
account for 63 percent of total Federal Reserve
expenses. Personnel costs are expected to increase $40.1 million, or 5.0 percent, in 1989.
Salaries—the major component of this category—are budgeted to increase 5.1 percent.
Each Federal Reserve Bank conducts an annual
survey as a starting point for determining its
salary structure for staff members other than
officers. Nationwide surveys are used to adjust
the structure of officers' salaries. All structure
adjustments are approved by the Board of
Governors.
Merit increases are the primary source of
higher expenses for salaries. Also contributing
are promotions, reclassifications, and higher
levels of staffing. These increases are partially
offset by position vacancies, by the replacement of a departing employee with one at lower
pay, and by reduced expenses for overtime.
Expenses for retirement and other benefits,
which account for 11 percent of the Banks'
budget, are anticipated to increase 10.9 percent
in 1989. This increase is a result of the continued
escalation in hospital and medical costs, a rise in
the maximum salary subject to Social Security
tax, and increased participation in the System's
thrift plan.
Nonpersonnel expenses account for 37 percent
of the Banks' expenses and are projected to
increase 6.0 percent in 1989. Within this category
are the following:
Equipment expenses are 7.7 percent higher for
1989 and will account for 12 percent of total
operating costs. The increase results from the
purchase of data processing and data communications equipment to handle increased workloads
and improve contingency functions, and the fullyear impact of equipment purchased to meet the
demands of the Expedited Funds Availability
Act.
Building expenses, which account for 9 percent of total expenses, are expected to increase
8.5 percent in 1989. Building expansion and
renovation projects contribute to increased expenses for property depreciation, real estate
taxes, utilities, and other building operations.
Depreciation expenses will also increase in 1989
as numerous smaller renovation and repair
projects are completed.
Shipping costs account for 6 percent of the
1989 budget and will increase 2.2 percent next
year. This increase is primarily the result of
expanded check routes necessary for EFA.
Table 7 depicts the plans of the Reserve Banks
for capital spending in 1989. By their nature,
capital outlays vary greatly from year to year.
Outlays for buildings and for data processing and
communications equipment continue to dominate Reserve Bank capital budgets.
Statements
SPECIAL BUDGET EMPHASIS
Before concluding my testimony I would like to
mention briefly several initiatives that will have a
major impact on Reserve Bank expenditures and
operations into the next decade.
As you may remember, the Expedited Funds
Availability Act gave the Federal Reserve Board
regulatory authority to improve the check collection
and return check systems. As a result of the EFA,
the Reserve Banks implemented several new services to expedite the handling of returned checks.
The Reserve Banks began to offer the new services
on September 1,1988, to speed the return of unpaid
checks. Federal Reserve volumes of returned
checks have increased approximately 25 percent
since the implementation of the service.
In 1989 the Reserve Banks have budgeted
$19.3 million and 348 employees for EFA; these
numbers represent the full-year effect of an increase of $5.4 million and 134 employees over
1988 levels of expenditure and employment.
These expenses will be recovered through fees
charged to users.
For 1989 the Board of Governors has approved
research and development on three projects intended to provide long-range benefits to the
payments system. Because spending on such
projects is relatively high and short-term, the
Federal Reserve accounts for it separately from
its operating expenses but includes it in its total
budget. The budget for special projects in 1989 is
$11.1 million, or $6.2 million more than was
budgeted for special projects in 1988.
In mid-1985 the Federal Reserve began research on digital image capture as it might be
applied to check processing. The archiving of
information on checks written by the U.S.
Treasury and the processing of return items are
the potential applications with the most stringent requirements. The information captured
from such checks must be especially detailed
and of high quality and therefore requires a
large capacity for data storage. These two
check processes were thus selected as the most
likely to determine the feasibility of the technology. If the technology is successful, it could
replace the Federal Reserve's current practice
of microfilming government checks and could
speed the handling of return items.
to Congress
683
In 1989 the check imaging project, building
upon the first three years of results, will test an
imaging system at two Reserve Banks with highspeed check processors. Total 1989 expenses for
the project are estimated to be $1.7 million and
will be recovered through the pricing of services.
The digital image processing technology discussed above for checks is also under development as a means of detecting counterfeit U.S.
currency. This Optical Counterfeit Detection
System (OCDS) program is one of several programs designed to detect counterfeits that come
into the Federal Reserve. These research and
development efforts are budgeted for $1.7 million
in 1989.
A study by the Federal Reserve has indicated
that, to meet the needs of users, the System must
extend the number of hours it provides electronic
payment services and that to better control risk
in the payments system, it must improve the
reliability of these services. The study also indicated that users of electronic payments are looking for more flexibility in the range of services
offered as well as cost effectiveness. In 1989 the
Federal Reserve will complete its testing of
equipment to satisfy these requirements.
The Federal Reserve is installing the equipment at three Reserve Banks and developing
software for the automated clearinghouse service. The program, budgeted at $6.1 million for
1989, will also demonstrate the use of faulttolerant equipment for the transfer of funds and
securities and will be recovered through fees. Of
course as part of our long-range strategy for
improving the payments mechanism, the Federal
Reserve System continues to place emphasis on
the quality and reliability of its electronic payment services. This strategy involves not only
improving the reliability of Fedwire operations,
but also involves providing contingency processing facilities to address both noncatastrophic
and catastrophic outages.
The Federal Reserve System takes great pride
in its efforts to improve efficiency. I mentioned
earlier that I would return to the subject of
facility planning. We recognize that facilities
have an effect on how well we operate, and we
are concerned that we may be unable to construct, expand, or modernize Branch Federal
Reserve Bank Buildings unless there is a change
684
Federal Reserve Bulletin • October 1989
in the "building proper" fund. As you know from
the information provided to the subcommittee
last year, the Federal Reserve at this time is close
to depleting its authorized fund for Federal Reserve Branch buildings. Without relief, we are
not able to do the planning and preparatory work
to provide needed improvements for operations
at the following branches:
Branch
Estimated cost
(millions of dollars)
Birmingham
Nashville
Houston
San Antonio
El Paso
Salt Lake City
35
30
15
10
10
10
As you may realize, branch operations consist
mainly of priced service operations and a significant portion of the capital cost of the facilities
Statement by Brent L. Bowen, Inspector
General, Board of Governors of the Federal Reserve
System, before the Subcommittee
on Domestic
Monetary Policy of the Committee on Banking,
Finance and Urban Affairs, U.S. House of Representatives, August 3, 1989.
I am pleased to appear today to discuss the
establishment and operation of the Office of
Inspector General at the Board of Governors of
the Federal Reserve System.
HISTORY, RESPONSIBILITIES,
AUTHORITY
AND
The Board established the Office of Inspector
General on July 6, 1987, in line with the provisions of the Inspector General Act of 1978, with
a staff authorization of nine. The Board appointed me as the Inspector General on July 20,
1987. By November, I had hired an investigator,
five auditors, and a staff assistant. Soon thereafter, we conducted a vulnerability assessment that
formed the basis for our 1988 and 1989 annual
would be recovered through revenues from the
sale of Federal Reserve services. With a normal
planning and building horizon of about five years,
we are in jeopardy of being unable to provide
services to the financial community and the public.
We recommend to the subcommittee that the
limitation on branch construction expenditures
be eliminated.
CONCLUSION
Both Governor Kelley and I thank you for this
opportunity to address the subcommittee on the
Federal Reserve System budget. The existing
budget processes are working well in controlling
costs, while at the same time encouraging quality
improvements. We welcome your comments and
would be pleased to address any questions you
may have on our budget.
•
plans. I appointed an Assistant Inspector General in February 1989.
Very little had to be changed when the Inspector General Act Amendments of 1988 were
passed on October 18, 1988. By November 16,
we had provided the Board with an updated
charter to reflect the semiannual and other reporting relationships with the Congress and to
solidify the reporting relationship to the Chairman. Indeed, all of the provisions of the amendments were instituted immediately except for the
subpoena power, which could only be authorized
by the Congress. That provision took effect in
April with the new law.
For the record, our office is charged by law to
accomplish the following: (1) conduct and supervise audits and investigations of Board programs and operations; (2) recommend and provide leadership and coordination for activities
that promote economy, efficiency, and effectiveness in Board programs and operations; (3)
help prevent and detect fraud, waste, and
abuse; and (4) keep the Chairman and the
Congress fully and currently informed, through
semiannual reports and other means, about any
fraud and other serious problems or deficiencies
Statements
in Board programs and operations and the status of corrective actions.
In addition, the office has added an operations review or general management audit function, oversees the financial audit of the Board's
books by a public accounting firm, reviews
regulations and legislation for economy and
efficiency, and is responsible for following up
on recommendations made by other auditing
entities.
The new legislation limits the Inspectors
General (IGs) of the Board and of the Treasury
in a way that other IGs are not affected. That is,
in the case of the Board, the Chairman can
prohibit me as IG from carrying out or completing any audit or investigation or from issuing
any subpoena to prevent the disclosure of information relating to policy matters that could
reasonably be expected to have a significant
influence on the economy or market behavior.
If this were to occur, I am required to inform
this and other relevant committees of the Congress.
ORGANIZATION AND STAFFING
The office is organized according to three major
functions: audits, operations reviews, and investigations. Auditors perform comprehensive
evaluations of the Board's programs and operations, supervise the audit of the annual financial statements performed by the Board's external auditor, and advise Board managers and
other staff members on management systems
and internal controls. Staff members from
throughout the Federal Reserve System assist
us in performing management audits, or operations reviews as we call them, of the Board's
offices and divisions. These operations reviews
focus on ensuring the efficient and effective
administration of programs, delivery of services, and compliance with applicable laws,
regulations, policies, and procedures. The Special Assistant for Investigations has established
a full investigative program to address allegations of possible and actual fraud, mismanagement, and abuse; violations of laws and regulations; and "Hotline" complaints.
to Congress
685
The IG staff members are well versed in auditing and investigative standards and techniques
and have a good balance of skills and experience.
To illustrate, we have two certified information
systems auditors, two certified public accountants, a candidate for certification as an internal
auditor, and an experienced investigator who is
also certified as a fraud examiner. The Assistant
IG holds certifications as both an internal auditor
and an information systems auditor, and I am a
certified fraud examiner. I have an attorneyclient relationship with a senior attorney in the
Board's Legal Division and have used several
auditors and technical and professional people
from the Federal Reserve Banks for short periods of time to assist in our operations reviews
and audits.
INDEPENDENCE
The members of the Board recognize the critical
importance of an independent IG function and
have been highly supportive of our work. The
Office of Inspector General has full independence
of operation and activity and quick access to
members of the Board individually and to the
Board as a whole. Those being audited and I
have not always agreed on our recommendations; but each has respected our policy of open
and honest communications and our "call it as
we see it" approach, and top management has
addressed our recommendations. The first audit
my office performed was of Board member expenses. That audit sent a message to the staff that
the IG is independent and that the office will
address all operations and activities of the organization with the full support of the members of
the Board. Access to information throughout the
organization is immediate and complete.
While I have independent contract and personnel authority, I have chosen, for the most part, to
follow the Board's processes as an administrative convenience, departing only to appoint the
Assistant Inspector General as an officer of the
Board, a function of the full Board for all other
officer appointments. Only the Chairman and
then the Board as a whole review the office's
budget proposals. After approval, budget of the
Office of Inspector General becomes a line item
in the Board's consolidated budget.
686
Federal Reserve Bulletin • October 1989
COMMENT ON FINANCIAL CONTROLS
I contract with a public accounting firm to certify
the fairness of the Board's financial statements
each year. To make this certification, these auditors must evaluate internal controls to identify
any areas of material weaknesses and have found
none. In accordance with Government Auditing
Standards, the auditors prepared a report on
compliance with applicable laws and regulations
and a report on internal accounting controls for
both 1987 and 1988. While some nonmaterial
items were identified in each of these years, they
were corrected immediately. The managing partner and I present our findings to the full Board.
The General Accounting Office's (GAO) June
1988 report for the House Banking Committee,
which addressed Federal Reserve administrative
expenses, confirmed the appropriateness of these
expenses for 1985 and 1986. Our office will begin
our annual audit of sensitive payments in conformance with GAO guidelines as part of the
financial audit of the Board's books this fall.
In addition, our office reviews the work of the
public accounting firm's evaluation of the procedures used to examine the Federal Reserve
Banks, and we have just completed an operations
review of the Division of Federal Reserve Bank
Operations that includes an evaluation of its
approach in evaluating the Federal Reserve
Banks.
AUDITS
Let me now give you a brief overview of our
work as it relates to the three main functional
areas. First, with respect to audits, our office has
initiated eleven audits (including one survey) and
has issued reports on six of these to date. Six
more will be initiated by the end of the year in
accordance with our annual plan. I have already
mentioned our contract with a public accounting
firm to issue an opinion on the fairness of the
Board's financial statements. We have the same
firm certify the financial statements of the Federal Financial Institutions Examinations Council
as well, since the Board provides administrative
support to that organization. Both our internal
audits and the public accounting firm's evalua-
tions comply with the U.S. General Accounting
Office's Government Auditing Standards.
Thus far, we have conducted, or are conducting, an audit or a survey of Board member
expenses, contingency planning efforts, automation program management, distributed data processing systems, procurement activities, compensation practices,
information
security,
personal computer software and security, physical security controls, and a data processing reporting system, as well as the certification of the
Board's financial statements discussed earlier.
These audits resulted in recommendations for
improving internal controls and for improving the
economy and efficiency of Board operations. We
also assisted an external auditor in their review
of the System's Benefit Office, and participated
with other financial institutions regulatory agencies in a review of the administrative activities of
the Federal Financial Institutions Examinations
Council. Our audit plan calls for us to initiate the
annual certification of the Board's financial statements and audits in inventory management, records management, bank holding company performance systems, computer access security, and
secure voice systems by the end of the year.
OPERATIONS REVIEWS
The second major functional area of our responsibilities is more programmatic in nature:We
conduct operations reviews of the Board's offices
and divisions on a five-year cycle. Review teams
composed of staff members from the Federal
Reserve Banks who have expertise in the area
under review and staff members from the Office
of Inspector General do the following: (1) determine whether stated program objectives are being achieved; (2) assess the efficiency and effectiveness with which these objectives are being
achieved; (3) assess the quality of services provided to the Board and the System; (4) determine
the existence and adequacy of administrative
controls; (5) determine compliance with applicable laws, regulations, policies, and procedures;
(6) follow up on any findings and recommendations from previous audits or reviews; and (7)
identify areas for possible improvement. After a
formal report has been issued by the Office of
Statements
Inspector General, the team leader and I present
our findings to the full Board.
Thus far, we have reviewed six functional
areas: the Office of the Secretary, the Division
of Human Resources Management, the Division
of Banking Supervision and Regulation, the
Equal Employment Opportunity Program, the
Division of Hardware and Software Systems,
and a combined look at the Office of Federal
Reserve Bank Activities and the Division of
Federal Reserve Bank Operations. Later this
year we plan to review the Office of Executive
Director for Information Resource Management
and the Division of Applications Development
and Statistical Services. Reviews of the Divisions of Monetary Policy, Research and Statistics, and International Finance will be conducted in 1990, with the remaining offices and
divisions scheduled for 1991 and 1992.
INVESTIGATIONS
We introduced the criminal investigation function in the Office of Inspector General by establishing a hotline in late 1987 that is available 24
hours per day. Many of our hotline calls have
placed us in the ombudsman role of referring
problems and concerns to management. Other
calls have involved administrative issues involving violations of the Board's standards of
conduct or management policies. Besides our
hotline calls, we have received complaints from
Board managers, Board employees, other federal and State agencies, private citizens, and
corporate entities and have initiated some investigations based on audit referrals or our own
concerns. There have been a few potential
criminal violations in which the results of our
investigations were discussed with an Assistant
U . S . Attorney and disposed of administratively
at his suggestion. Incidentally, our hotline number is (202) 452-6400 should anyone reading or
hearing this statement have an issue to bring to
our attention. We conduct all of our investigations using Quality Standards for
Investigations
established by the President's Council on Integrity and Efficiency and, in each case, maintain
confidentiality and privacy as required by law.
ADDITIONAL
to Congress
687
ACTIVITIES
While we had to spend some important time in
setting up the office with policies and procedures and appropriate equipment and facilities,
we thought it important to conduct immediate
operational activities and begin our program of
audits, operations reviews, and investigations.
We also take an active role in other areas
associated with the inspector general function:
We follow up on our own and GAO reports on
the Federal Reserve Board's activities, review
Board policies and procedures, participate in
automation steering groups as formal audit representatives, and participate in fraud and security violation prevention campaigns. We are also
structuring ourselves to review relevant legislation and regulations as prescribed by the IG
Act, and are addressing ways to prevent fraud,
waste, abuse, mismanagement, and violations
of security. I am a member of the Federal
Reserve System's Conference of General Auditors, participate with the President's Council on
Integrity and Efficiency's Coordinating Conference, and serve on the Council's Communications Subcommittee. Our office members are
affiliated with professional organizations such
as the Association of Federal Investigators,
the American Institute of Certified Public Accountants, the Association of Government
Accountants, the Institute of Internal Auditors,
and the National Association of Certified Fraud
Examiners.
FUTURE
DIRECTION
Our office is now in the process of charting a
course that will carry us through the 1990s. While
our initial vulnerability assessment served a very
useful purpose in getting our operation started, it
is important that we continually ensure ourselves
that our work focuses on timely and significant
issues. While we plan to continue with the audits,
operations reviews, and additional activities
cited above—and to continue our emphasis on a
full investigations program—our efforts will address more of the main mission areas of the
Board's operations.
688
Federal Reserve Bulletin • October 1989
SUMMARY
The Chairman and other members of the Board
have insisted on a qualified Office of Inspector
General, and I have the independence and authority to carry out my statutory responsibilities.
While some members of the organization are still
getting acquainted with the concept, we are
respected for our integrity and appreciated for
our "call it as we see it" approach and policy of
open communications. We are moving forward
with our mission to prevent and detect problems
and to assist Board management in having more
efficient and more effective operations. Our reports are available to this and other committees
of the Congress and to the public, and of course
we will be submitting our first formal report to
you this fall.
•
689
Record of Policy Actions
of the Federal Open Market Committee
MEETING HELD ON JULY
1. Domestic
Policy
5-6,1989
Directive
The information reviewed at this meeting tended
to confirm earlier indications that economic
growth had slowed this year. Recent data on
production and spending suggested a fairly consistent pattern of weakness in housing and in
consumer goods, notably motor vehicles. Running counter to that trend was a further sizable
increase in spending for business equipment following a strong first quarter; in addition, the
trade deficit had narrowed further. Broad measures of prices continued to rise more rapidly
than in 1988, reflecting sharp upward pressures
on energy and food prices. There had been no
discernible step-up in the pace of wage inflation,
however, even though levels of labor utilization
remained relatively high.
Growth in total nonfarm payrolls moderated
substantially in recent months from the pace of
the previous two years. Employment in manufacturing and construction fell in May and on
balance had changed little in both sectors since
January. Job growth in services was relatively
weak in May, judged by recent standards, as
gains in trade and business services were small.
Despite the slower pace of payroll growth this
year, the factory workweek remained high by
historical standards in May, and initial claims for
unemployment insurance had increased only
slightly through mid-June. The civilian unemployment rate, at 5.2 percent in May, stayed
close to its average level in earlier months of the
year.
Industrial production increased on balance in
April and May at about the reduced rate experienced earlier in the year. Assemblies of motor
vehicles, which had turned up in April, fell
appreciably in May. Production of consumer
goods other than automobiles also softened in
May, and output of construction supplies registered a decline for the fourth consecutive month.
Production of business equipment excluding automobiles continued to advance strongly in April
and May, partly as a result of a surge in the
manufacture of computers but also owing to
gains for a variety of other types of equipment,
particularly capital goods for manufacturing industries. Total industrial capacity utilization retraced its April rise in May but remained well
above its relatively high level of a year ago.
Operating rates in manufacturing slipped further
in May for primary processing industries, while
those for advanced processing industries were
sustained at the already high levels evident in
earlier months of the year.
Despite considerable gains in real disposable
income in recent quarters, the sluggish growth in
consumer spending that had emerged earlier in
1989 continued into the second quarter. In May,
a decline in expenditures was led by a reduction
in outlays for motor vehicles, although spending
also was flat or down for a broad range of other
goods, both durable and nondurable. In contrast
to outlays on goods, growth in purchases of
services was well maintained. Housing starts
declined slightly further in May, as single-family
starts slipped back to their weak level of March.
Starts of multifamily units were little changed in
May from the seven-year low recorded in April.
Home sales had fallen this year.
Recent indicators of business capital spending
suggested a further substantial increase in the
second quarter after a strong first quarter. Shipments of nondefense capital goods advanced
sharply in April, with solid gains for most broad
categories, and remained high in May. Nonresidential construction activity had changed little in
recent quarters although industrial structures put
in place strengthened somewhat, perhaps re-
690
Federal Reserve Bulletin • October 1989
fleeting sustained high levels of factory utilization in some industries. Inventory investment by
manufacturers continued in April at about the
first-quarter pace and such inventories remained
in line with shipments. Much of the increase in
factory inventories was concentrated in workin-process stocks in the aircraft industry, where
production had been strong. In the retail sector,
dealer stocks of automobiles remained high, and
inventories at other retail establishments had
risen a bit relative to sales, measured on a
constant-dollar basis, but there were only limited
indications of excess stocks in the nonautomotive segments of retailing.
The nominal U.S. merchandise trade deficit
narrowed in April from a first-quarter average
that was the smallest in four years. Exports
strengthened a little in April when a decline in
sales of agricultural products from their high
March levels was outweighed by increases in
most other major trade categories, especially
industrial supplies and machinery. Appreciable
declines in imports of automotive products,
machinery, and foods more than offset a rise in
oil imports. Available data suggested some
slowing recently in the growth of economic
activity in the major foreign industrial countries
following robust expansion in the first quarter;
inflation rates had moved up in most of those
countries.
Continuing a pattern of sharp increases this
year, producer prices of finished goods were up
substantially further in May. The May rise was
led by further advances in prices of food and
energy products, but prices of nonfood, nonenergy goods also rose after being about unchanged in April. In April and May, increases in
prices of most materials were noticeably smaller
than those registered for finished goods. The
consumer price index rose sharply further in
April and May. Over the first five months of the
year consumer prices increased at a faster rate
than in 1988; however, excluding food and energy, the rate of increase in these prices differed
little from last year's pace, partly because of the
damping effect of the appreciation of the dollar
on the prices of a broad range of imported goods.
Recent data for labor compensation indicated
that year-over-year increases in average hourly
earnings of production and nonsupervisory
workers remained near the average pace evident
since mid-1988.
In foreign exchange markets, the dollar recorded significant gains against most of the other
G-10 currencies in the weeks after the Committee
meeting on May 16; in mid-June, the dollar
reached a two and one-half year high against the
mark and a one and one-half year high against the
yen. Smaller-than-anticipated trade deficits announced for March and April, political events in
China and Japan, and expectations of capital
gains in U.S. bond and equity markets appeared
to have helped trigger buying pressure at a time
of narrowing differentials between interest rates
in the United States and abroad. The dollar
subsequently fell back sharply in often volatile
trading, its weighted-average value in terms of
the other G-10 currencies more than retracing the
earlier rise. The decline in the value of the dollar
occurred largely in the absence of significant new
economic developments or clear indications of a
reassessment of economic fundamentals by market participants.
At its meeting on May 16, the Committee
adopted a directive calling for no immediate
change in the degree of pressure on reserve
positions. The Committee agreed that somewhat
greater or somewhat lesser reserve restraint
would be acceptable over the intermeeting period
depending on indications of inflationary pressures, the strength of the business expansion, the
behavior of the monetary aggregates, and developments in foreign exchange and domestic financial markets. This policy stance was expected to
be consistent with growth of M2 and M3 at
annual rates of around IV2 and 4 percent respectively over the period from March through June.
Immediately after the Committee meeting, the
Manager for Domestic Operations directed operations toward maintaining the existing degree of
pressure on reserve positions. A technical upward revision was made to the assumed level of
adjustment plus seasonal borrowing to bring it in
line with desired overall conditions in reserve
markets; this revision resulted from the recent,
unusual strength of seasonal borrowing that perhaps was associated with heavier demands for
crop-production loans at a time of weak deposit
growth at agricultural banks. Later in the intermeeting period, a variety of developments began
Record of Policy Actions of the Federal Open Market Committee
to suggest that a slackening in inflation pressures
might be in prospect as indications of slower
economic expansion continued to accumulate,
monetary growth remained sluggish, and the
dollar climbed further. In these circumstances,
the Manager for Domestic Operations acted in
early June to reduce somewhat the degree of
pressures on reserve positions. Adjustment plus
seasonal borrowing averaged about $550 million
over the three full reserve maintenance periods
completed since the May 16 meeting, while the
federal funds rate moved down about VA percentage point to 9Vi percent or slightly higher more
recently.
Other market interest rates also fell over the
intermeeting period in response to indications of
a continuing softness in the economy and a better
outlook for inflation as well as to the easing of
monetary policy. Short-term market rates
dropped 25 to 70 basis points, and the prime rate
was lowered Vz percentage point to 11 percent in
early June. In long-term debt markets, yields on
Treasury coupon issues dropped 70 to 90 basis
points. Stock prices rallied through much of the
intermeeting period, and major indexes reached
new post-1987-crash highs before giving up most
of those gains.
M2 and M3 declined in May, primarily because
of sizable reductions in transaction and other
liquid deposit balances that seemed to be related
to the clearing of unexpectedly large payments to
cover federal tax liabilities for 1988. Through
mid-June, growth of these aggregates appeared
to have rebounded in conjunction with some
rebuilding of tax-depleted balances and the declines in market interest rates that brought some
narrowing of the large opportunity costs associated with holding liquid deposits. Nonetheless,
the growth of M2 for the year to date remained
below the lower end of the Committee's annual
target range. Ml continued to contract through
mid-June, as weakness in transaction balances,
especially in demand deposits, persisted. Domestic nonfinancial debt expanded in May at a
slightly lower rate than it did in the first quarter.
The staff projections prepared for this meeting
suggested that growth of the nonfarm economy
over the remainder of 1989 and for 1990 was
likely to be at a pace a little lower than that
estimated for the first half of this year. The
691
projection continued to assume that normal agricultural growing conditions would prevail. Although the recent strengthening of the dollar was
tending to damp import prices and thereby domestic inflation, the staff anticipated that, with
margins of unutilized labor and other production
resources still relatively low, most measures of
prices and labor costs would increase at slightly
faster rates in 1989 than in 1988. Inflationary
pressures were expected to abate a bit in 1990,
partly in response to gradually mounting slack in
labor and product markets. The staff projected
that the contribution of foreign trade to growth
would be very limited, as real export gains
dropped well below the pace of recent quarters,
and that fiscal policy would remain moderately
restrictive. In view of expected meager gains in
employment and real income, consumer spending would be sluggish through 1990. Housing
activity was projected to benefit from the recent
drop in interest rates. Relatively sluggish final
demands along with reduced capacity utilization
rates were expected to have a restraining effect
on the growth of business capital spending.
In the Committee's discussion of current and
prospective economic conditions, members focused on accumulating indications of reduced
growth in business activity and on the implications for the outlook for the economy and prices.
The members generally concluded that continuing expansion at a relatively slow pace was a
reasonable expectation for the next several quarters and that the associated lessening of pressures on labor and capital resources was likely to
foster progress in curbing inflation over time.
Members noted that the economic outlook was
subject to considerable uncertainty and that substantial deviations from current expectations
might well occur. The latest information suggested some risk that the expansion might
weaken further, but current business conditions
provided few indications of the kinds of imbalances and distortions that often lead to downturns in economic activity. Some members emphasized that a recession,
should one
materialize, might be aggravated by the debt
burdens or debt exposure of many business and
financial firms. At the same time, inflation remained unacceptably high and cost pressures
substantial; however, in the context of a weaker
692
Federal Reserve Bulletin • October 1989
economic outlook and an extended period of
slow monetary growth, the risks of a sustained
acceleration in inflation appeared to be more
limited than they had earlier in the year. Nonetheless, a policy designed to bring about some
reduction in underlying inflation pressures and
improvement in the nation's external accounts
might be associated with relatively slow growth
of domestic spending for some time.
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 provided
specific projections of growth in real and nominal
GNP, the rate of unemployment, and the rate of
inflation. With regard to the rate of expansion in
real GNP, the projections had a central tendency
of 2 to 2VI percent for 1989 as a whole, implying
continuing growth at a reduced pace in the second half of the year; for the year 1990 the central
tendency was Wi to 2 percent. Projections of
growth in nominal GNP converged on rates of 6
to 7 percent for 1989 and 5 ¥2 to 63A percent for
1990. The projected rates of unemployment centered around 5V2 percent for the fourth quarter of
1989 and 5!/2 to 6 percent for the fourth quarter of
1990. With respect to the rate of inflation, the
projections had a central tendency for the consumer price index of 5 to 5l/2 percent for 1989 and
4V2 to 5 percent for 1990. In making these projections the members took account of the Committee's decisions at this meeting with regard to
the objectives for monetary growth in 1989 and
1990. The members assumed that progress would
be made in reducing the federal budget deficit
and 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 1990.
In their review of specific developments bearing on the outlook for the economy, members
observed that growth appeared to be slowing in
many parts of the country but that the utilization
of labor and capital resources remained high in
most regions and continued to improve in others
from relatively depressed levels. In general, business sentiment remained favorable, though the
emergence of somewhat more cautious attitudes
was detected in a number of areas and industries.
With regard to specific sectors of the economy,
current data and business contacts did not suggest any general backup in inventories apart from
motor vehicles; however, there were some recent reports of marginally excessive inventories
in a few nonautomotive businesses, and a further
slippage in the growth of final demand could lead
to efforts to pare inventories and production
schedules. The members generally anticipated
continued overall growth in business fixed investment, though at a pace much reduced from
that experienced earlier in the year. Nonresidential construction activity was lagging in many
areas, but the demand for business equipment
remained relatively vigorous, in part because of
sales abroad. Housing activity was weak in a
number of markets, including some that had
displayed considerable vigor until recently, but
the decline in mortgage rates was believed likely
to sustain activity in this sector of the economy.
A key element in the outlook for overall business activity was the prospects for consumer
spending; many members saw little basis for
anticipating further slowing in the expansion of
consumer expenditures, but others were less
persuaded and some cited in particular the possibility that relatively weak sales of motor vehicles might continue. Foreign trade was another
important sector bearing on the economic outlook. Some further growth in net exports was
viewed as a reasonable prospect, but the improvement might be limited if the dollar remained
strong and growth slowed in key economies
abroad. Finally, a number of members stressed
that some acceleration in monetary growth from
the pace in the first half of the year likely was
needed to help support expansion in business
activity.
Turning to the outlook for inflation, members
generally anticipated that reduced economic
growth in line with the central tendency of their
forecasts would contribute to some damping of
underlying inflationary pressures by 1990. The
rate of increase in the consumer price index
might well moderate over the balance of this
year, assuming relief from special factors that
had affected food and energy prices during the
first half. In particular, the larger farm crops that
were anticipated this year would tend to reduce
pressures on food prices, and recent oil price
Record of Policy Actions of the Federal Open Market Committee
developments suggested some softening in consumer energy prices. Other favorable developments included generally restrained increases in
wages despite ongoing labor shortages in many
parts of the nation and, as evidenced in part by
business contacts around the country, some apparent lessening of inflationary expectations. In
addition, commodity prices had been subdued in
recent months, supporting indications of less
intense demands in industrial sectors and perhaps pointing to slower increases in consumer
prices in the months ahead. On the negative side,
some members stressed that underlying inflation
pressures remained strong and, given current
levels of resource use, an expansion in line with
the forecasts of most members might avert accelerating inflation but was less likely to foster any
significant decline over the forecast horizon.
More generally, the members' forecasts pointed
to a rate of inflation that was unacceptably high
and that moderated only slightly over this period;
moreover, the risks of some acceleration, while
small, were not negligible especially if economic
growth turned out to be appreciably faster than
most members currently anticipated, putting additional pressure on resources.
Against the background of the Committee's
views regarding prospective economic developments 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 1989 and
decided on tentative ranges for growth in those
measures in 1990. The 1989 ranges included
growth of 3 to 7 percent for M2 and 3!/2 to IVi
percent for M3 for the period from the fourth
quarter of 1988 to the fourth quarter of 1989. A
monitoring range of 6V2 to IOV2 percent had been
set for growth in total domestic nonfinancial debt
in 1989. For the year to June, the cumulative
expansion of M2 was at a rate about 1 percentage
point below the Committee's range, while that of
M3 placed it at the lower bound of its range. The
expansion in nonfinancial debt was near the
middle of its range in the first half of the year.
In the Committee's review of the ranges for
1989, all of the members endorsed a proposal to
retain the ranges set in February. The Committee
693
took account of a staff analysis that indicated that
the more rapid growth in M2 and M3 since
mid-May was likely to persist over the months
ahead and that by the fourth quarter both aggregates would be well within the current ranges for
the year. The staff assessment incorporated the
impact of the recent declines in market interest
rates, which would tend to reduce the opportunity costs of holding M2 balances, and also
assumed that there would be no special factors
influencing the growth of the aggregates such as
those experienced earlier in the year. Expansion
in total domestic nonfinancial debt was projected
to continue at a rate around the middle of its
range through year-end; growth in this measure
had been trending lower in recent years but it
remained at a pace appreciably above that for
nominal GNP. The members concluded that the
ranges set in February for 1989 were still consistent with the Committee's objectives of fostering
sustained expansion in economic activity and
progress toward price stability.
The ranges for 1989 represented reductions
from those for 1988, and the members agreed that
restrained monetary growth and further reductions in the ranges would be needed over time to
achieve and maintain price stability. Views differed, however, as to whether the ranges for 1990
should be reduced at this meeting.
A majority of the members indicated a preference for extending the 1989 ranges provisionally
to 1990, subject to the usual review next February in light of the economic and financial conditions prevailing then. The outlook for next year
was uncertain, especially this far in advance.
Nonetheless, the 1989 ranges were likely in this
view to encompass monetary growth that would
foster desired economic expansion and moderation of price pressures in 1990. This outcome
could be associated with somewhat more rapid
growth of M2 in 1990 than appeared to be in train
for 1989. Such a pickup in monetary growth
would be consistent with expansion of nominal
GNP along the lines of the central tendency of
the members' forecasts and should be associated
with only minor changes in interest rates and
hence in velocity next year. Moreover, somewhat faster growth in M2 might be needed next
year to counter any potential weakening tendencies that might develop in the economy. In these
694
Federal Reserve Bulletin • October 1989
circumstances there existed a considerable risk
that a reduction in the range for M2 might have to
be reversed next year or growth in excess of the
range tolerated. Either development might be
viewed as inconsistent with the stability and
predictability of policy that tended to enhance its
effectiveness over time. Especially in light of the
foregoing considerations, a marginal reduction in
the ranges, although it might be seen as more
consistent with the long-run objective of price
stability, would seem to imply greater precision
than was warranted by the Committee's current
ability to project next year's developments. If
small adjustments were called for, they could be
made early next year when a more firmly based
decision would be possible.
Members who preferred lower ranges for
1990 gave a good deal of emphasis to the
desirability of continuing the Committee's policy of reducing the ranges from year to year in
order to implement anti-inflationary objectives.
In this view, a failure to reduce the ranges at
least slightly in present circumstances might be
read as an implicit acceptance of current rates
of inflation. These members recognized the
possibility that monetary growth next year
might be at the upper end, or even above, the
ranges that they favored, especially if interest
rates were to decline further in the interim. If
economic and financial conditions early next
year suggested a need, they would be prepared
to raise the ranges at that time. Such a decision
would be made in the light of circumstances
that provided the rationale for it and need not
therefore have the adverse consequences for
inflationary expectations that some members
feared. Members who favored lower ranges also
did not want to rule out the possibility that
inflation pressures next year might turn out to
be more intense than was currently anticipated
and that relatively limited monetary expansion
therefore might remain appropriate.
In light of the persisting uncertainties about the
relationship between monetary expansion and
ultimate policy objectives, the members were in
favor of retaining relatively wide ranges of 4
percentage points for M2 and M3. For many
years prior to 1988, the Committee had set narrower ranges, almostmniformly of 3 percentage
points, for the broader monetary aggregates and
for total domestic nonfinancial debt. Wider
ranges provided greater scope for achieving monetary growth that was consistent with the Committee's objectives for the economy. In assessing
appropriate rates of monetary expansion in the
prevailing uncertain environment, the Committee would continue to evaluate a wide assortment
of economic and financial indicators.
At the conclusion of this review, the Committee approved for inclusion in the domestic policy
directive the following statement of its objectives
for growth of the broader monetary aggregates
and nonfinancial debt for the year 1989:
The Committee reaffirmed at this meeting the ranges
it had established in February for growth of M2 and
M3 of 3 to 7 percent and 3,/2 to IVi percent, respectively, measured from the fourth quarter of 1988 to the
fourth quarter of 1989. The monitoring range for
growth of total domestic nonfinancial debt also was
maintained at 6'/2 to IOV2 percent for the year.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Guffey, Johnson, Keehn, Kelley,
LaWare, Melzer, Ms. Seger, and Mr. Syron. Votes
against this action: None. Absent and not voting:
Mr. Heller.
For the year 1990, the Committee approved for
inclusion in the domestic policy directive the
following statement regarding the ranges for
growth of the monetary aggregates and nonfinancial debt:
For 1990, on a tentative basis, the Committee
agreed to use the same ranges as in 1989 for growth
in each of the monetary aggregates and debt, measured from the fourth quarter of 1989 to the fourth
quarter of 1990. The behavior of the monetary aggregates will continue to be evaluated in the light of
movements in their velocities, developments in the
economy and financial markets, and progress toward
price level stability.
Votes for this action: Messrs. Greenspan, Corrigan, Angell, Guffey, Johnson, Kelley, LaWare,
Melzer, Ms. Seger, and Mr. Syron. Vote against:
Mr. Keehn. Absent and not voting: Mr. Heller.
Mr. Keehn dissented because he wanted to
reduce the ranges for 1990. In his view, a reduction of the ranges for next year would provide an
important signal of the System's continuing commitment to price stability. While the velocity of
Record of Policy Actions of the Federal Open Market Committee
the monetary aggregates had been erratic recently, lower ranges for the aggregates would
encompass desirable rates of monetary growth
should more normal conditions prevail next year.
Given the uncertainty in the relationship between
the monetary aggregates and economic growth,
he would, however, be prepared to adjust the
ranges early next year on the basis of intervening
developments.
In the Committee's discussion of policy implementation for the period until the next meeting,
the members generally agreed that recent developments suggested that some further easing of
reserve conditions would be appropriate. Nearly
all endorsed a proposal to lessen the degree of
reserve pressure marginally at this time, but one
member favored somewhat greater easing and
another saw merit in a phased lessening of reserve pressures in the weeks ahead. Many emphasized that current economic and financial
uncertainties called for caution in adjusting policy at this point. In this view, more than a slight
move to less restraint could have an undesirable
effect on inflationary expectations and, at least in
the absence of further indications of lagging
economic growth, could lead eventually to upward pressure on long-term interest rates. Moreover, in the view of some members, there remained some risk that inflationary pressures
would intensify and that the easing might have to
be reversed later. Caution also was indicated in
light of the prevailing sensitivity and volatility of
financial markets.
Several members emphasized the need for
faster monetary growth than had been experienced in recent months. Some acceleration in the
rate of monetary expansion had occurred since
the middle of May, and a staff analysis suggested
that such growth was likely to continue as the full
effect of recent declines in market interest rates
was felt. On the assumption of no further
changes in interest rates, the staff projection
anticipated that cumulative M2 growth would
reach the bottom of the Committee's annual
range by late summer. However, given the uncertainties that were involved, a number of members felt that some further easing was desirable to
improve the prospects that monetary growth
would be within the Committee's ranges for the
year, if only in the lower part of the range in the
695
case of M2. A moderate pickup in monetary
growth at this time would help assure continued
expansion of the economy and possibly avoid a
situation in which a substantial weakening of the
economy would be followed by rapid monetary
growth and a marked rebound in activity—a
pattern that would be unlikely to foster the
Committee's objective of price stability over
time.
Turning to the question of possible intermeeting adjustments in the degree of reserve restraint,
a majority of the members indicated a preference
for retaining an unbiased instruction as in the
directive for the May meeting. This approach, in
the context of the indicated preference of the
members to move toward some immediate easing, was in keeping with the caution about future
policy moves favored by most members. This
caution was dictated by current uncertainties
regarding the economic outlook, the still rapid
rate of inflation, and the relatively sensitive conditions in financial markets. Others preferred an
intermeeting instruction that was tilted toward
ease partly to help underscore—in conjunction
with a decision to ease—their view that the risks
were in the direction of a shortfall in economic
growth from current expectations and therefore
that any intermeeting adjustment would very
likely be in the direction of less restraint. Indeed,
in this view a dramatic and unlikely turnaround
would be needed in the tenor of the incoming
economic information to warrant any firming in
the weeks ahead.
In light of the easing of reserve conditions in
early June and the further slight easing contemplated at this meeting, the members decided to
lower the intermeeting range for the federal funds
rate by 1 percentage point to 7 to 11 percent.
Such a reduction centered the range more closely
around the federal funds rate that was expected
after this meeting. The range for the federal funds
rate provides one mechanism for initiating consultation of the Committee when its boundaries
are persistently exceeded.
At the conclusion of the Committee's discussion, all but one of the members indicated that
they preferred or could accept a directive that
called for some slight easing in the degree of
pressure on reserve positions. Some firming or
some easing of reserve conditions would be
696
Federal Reserve Bulletin • October 1989
acceptable during the intermeeting period depending on indications of inflationary pressures,
the strength of the business expansion, the behavior of the monetary aggregates, and developments in foreign exchange and domestic financial
markets. The reserve conditions contemplated
by the Committee were expected to be consistent
with some acceleration in the growth of M2 and
M3 to annual rates of around 7 percent over the
three-month period from June to September.
At the end of the meeting, the following domestic policy directive was issued to the Federal
Reserve Bank of N e w York:
The information reviewed at this meeting tends to
confirm earlier indications that economic growth has
slowed this year. Gains in total nonfarm payroll employment have moderated substantially in recent
months, but the civilian unemployment rate, at 5.2
percent in May, remained close to its average level in
earlier months of the year. Industrial production increased on balance in April and May at about the
reduced rate experienced earlier in the year. Growth in
consumer spending has weakened considerably this
year. Housing starts declined slightly further in May.
Recent indicators of business capital spending suggest
a substantial additional increase in the second quarter
after a rebound in the first quarter. The nominal U.S.
merchandise trade deficit narrowed in April from a
substantially reduced average value in the first quarter. Broad measures of prices have risen more rapidly
this year than in 1988, reflecting sharp increases in
energy and food prices.
Interest rates have fallen since the Committee meeting on May 16, with the largest declines generally
occurring in long-term markets. In foreign exchange
markets, the trade-weighted value of the dollar in
terms of the other G-10 currencies rose sharply earlier
in the intermeeting period but subsequently more than
retraced that rise in often volatile trading.
M2 and M3 declined in May, primarily because of
sizable reductions in transaction and other liquid balances arising from the clearing of unusually large tax
payments; data through mid-June point to a rebound in
these measures of money. Thus far this year expansion
of M2 has been at a rate below the Committee's annual
range, while growth of M3 has been around the lower
bound of the Committee's range.
The Federal Open Market Committee seeks monetary and financial conditions that will foster price
stability, 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 M2
and M3 of 3 to 7 percent and 3!/2 to IVi percent,
respectively, measured from the fourth quarter of 1988
to the fourth quarter of 1989. The monitoring range for
growth of total domestic nonfinancial debt also was
maintained at 6V2 to IOV2 percent for the year. For
1990, on a tentative basis, the Committee agreed to use
the same ranges as in 1989 for growth in each of the
monetary aggregates and debt, measured from the
fourth quarter of 1989 to the fourth quarter of 1990.
The behavior of the monetary aggregates will continue
to be evaluated in the light of movements in their
velocities, developments in the economy and financial
markets, and progress toward price level stability.
In the implementation of policy for the immediate
future, the Committee seeks to decrease slightly the
existing degree of pressure on reserve positions. Taking account of indications of inflationary pressures, the
strength of the business expansion, the behavior of the
monetary aggregates, and developments in foreign
exchange and domestic financial markets, somewhat
greater reserve restraint or somewhat lesser reserve
restraint would be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with growth of M2 and M3
over the period from June through September at
annual rates of about 7 percent. 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 7 to 11 percent.
Votes for the paragraph on short-term policy implementation: Messrs. Greenspan, Corrigan, Angell, Guffey, Johnson, Keehn, Kelley, LaWare,
Melzer, and Syron. Vote against this action: Ms.
Seger. Absent and not voting: Mr. Heller.
Ms. Seger dissented because she felt that
somewhat greater easing was warranted. In her
view, the expansion in business activity already
had slowed substantially and recent developments pointed to further weakness. While a
change in monetary policy would have little
effect on the economy over the remainder of this
year, a more pronounced easing than the Committee currently contemplated was needed to
foster financial conditions that would support the
economy in 1990 and beyond.
2. Authorization
for
Domestic
Open Market
Operations
Effective July 7,1989, the Committee approved a
temporary increase of $2 billion, to $8 billion, in
the limit between Committee meetings on
changes in System Account holdings of U.S.
Record of Policy Actions of the Federal Open Market Committee
government and federal agency securities specified in paragraph 1(a) of the Authorization for
Domestic Open Market Operations. Subsequently, effective July 31, 1989, the Committee
approved a further increase of $2 billion, to $10
billion, in the intermeeting limit. Both increases
applied to the period ending with the close of
business on August 22, 1989.
Votes for the action effective July 7: Messrs.
Greenspan, Corrigan, Angell, Gufifey, Johnson,
Keehn, Kelley, LaWare, Melzer, Ms. Seger and
Mr. Syron. Votes against this action: None. Absent
and not voting: Mr. Heller.
Votes for the action effective July 31: Messrs.
Greenspan, Angell, Boykin, Guffey, Johnson,
Keehn, Kelley, Oltman, Ms. Seger, and Mr. Syron.
Votes against this action: None. Absent and not
voting: Messrs. Heller and LaWare. (Messrs. Boykin and Oltman voted as alternates for Messrs.
Melzer and Corrigan, respectively.)
697
The increases were approved on the recommendation of the Manager for Domestic Operations. The Manager had advised on July 5 that
the usual leeway of $6 billion for changes in
System account holdings probably would not be
sufficient over the intermeeting period, partly
because of expected sales of securities to offset
large declines in balances held by the U . S . Treasury at the Federal Reserve Banks and because
of large foreign currency transactions. On July
28, the Manager advised that the remaining leeway under the $8 billion limit had been reduced
to about $650 million, mainly as a result of declines
in Treasury balances at the Reserve Banks but also
owing to further official foreign currency transactions and smaller-than-expected increases in currency in circulation. The Manager anticipated that
additional leeway might be necessary to meet continuing needs to absorb reserves in upcoming reserve maintenance periods.
698
Announcements
DESIGNATIONS OF PRIMARY DEALERS
CONTROLLED BY FIRMS
FROM THE UNITED KINGDOM
AND JAPAN
The Federal Reserve Board and the Federal
Reserve Bank of N e w York have determined
that the designations of primary dealers controlled by firms from the United Kingdom and
Japan will be continued because U.S. firms are
accorded "the same competitive opportunities" as domestic firms in the government debt
markets of those two countries. This determination has been made under the terms of the
Primary Dealers Act of 1988, which takes effect
on August 23, 1989.
Under the act, the Federal Reserve may not
continue to designate or newly designate as a
primary dealer "any person of a foreign country
. . . if such country does not accord to U.S.
companies the same competitive opportunities in
underwriting and distribution of government debt
instruments" as the country accords to domestic
companies.
The act currently applies only to the United
Kingdom and Japan, since they are the only
home countries of firms now owning primary
dealers that are not otherwise grandfathered or
exempt from the terms of the act.
The Federal Reserve has undertaken comprehensive studies of the characteristics of government securities markets in these two countries as
well as of markets in the Federal Republic of
Germany and Switzerland, which are home
countries of firms that have expressed interest in
the possibility of becoming primary dealers in the
future.
The Federal Reserve will monitor developments on an ongoing basis to ensure that requirements of the act continue to be met as
foreign government securities markets change
over time.
Copies of a report on this matter are available
from Publications Services, Board of Governors
of the Federal Reserve System, Washington,
D.C. 20551.
PUBLICATION OF BROCHURE
ON HOME EQUITY LINES
OF CREDIT
The Federal Reserve Board announced on August 1, 1989, the publication of its brochure on
home equity lines of credit that fulfills the provisions of the Home Equity Loan Consumer Protection Act.
The new brochure is entitled, "When Your
Home Is on the Line: What You Should Know
About Home Equity Lines of Credit." It provides consumers with basic information about
the features of a home equity line of credit and
what to look for and to compare when shopping
for credit. Under provisions of the act, this
brochure, or one similar to it, must be provided
to the consumer along with an application, although extra time is permitted in some cases.
Copies of the brochure are available from
Publications Services, Board of Governors of the
Federal Reserve System, Washington, D.C.
20551 or from the Federal Reserve Banks. Parties interested in mass reproduction of the brochure may purchase negatives. For further information, contact Publications Services (202) 4523244.
CHANGE IN BOARD
STAFF
Ms. Patricia A. Welch, Assistant Director in the
Division of Applications Development and Statistical Services, will resign, effective January 15,
1990.
Announcements
SYSTEM MEMBERSHIP:
ADMISSION OF STATE BANKS
Kentucky
Louisville
The following state banks were admitted to membership in the Federal Reserve System during the
period August 1 through August 31, 1989.
Pennsylvania
Blue Bell
699
Mid-America Bank of
Louisville and Trust
Company
Madison Bank
701
Legal Developments
FINAL RULE—AMENDMENT
PROCEDURE
TO RULES OF
The Board of Governors is amending 12 C.F.R. Part
262, its Rules of Procedure, to update the citations to
statutory and regulatory provisions.
Effective August 1, 1989, 12 C.F.R. Part 262 is
amended as follows:
ORDERS ISSUED UNDER BANK
COMPANY ACT
HOLDING
Orders Issued Under Section 3 of the Bank
Holding Company Act
ARSEBECO, Inc.
Falls City, Nebraska
Order Approving Acquisition of a Bank
Part 262—Rules of
Procedure
1. The authority citation for Part 262 continues to read
as follows:
Authority. 5 U.S.C. 552.
2. Section 262.2(b) is amended by revising "section
261.6(a)" to read "section 261.6(b)".
3. Section 262.3(a) is amended by revising "section
261.4(d)" to read "section 261.9(a)".
4. Section 262.3(c) is amended by revising "in the case
of a foreign bank holding company, as defined in
section 225.4(g) of this chapter," to read "in the case
of a foreign banking organization, as defined in section
211.23(a)(2) of this chapter,".
5. Section 262.3<j)(l)(ii) is amended by revising
"12 U.S.C. 1828(c)(l)(6)" to read "12 U.S.C.
1828(c)(6)".
6. Section 262.30) is further amended by deleting
paragraphs (3) and (4) and by revising paragraph (2) to
read as follows:
Section 262.3—Applications
(j) Special procedures for certain applications.* * *
(2) For special rules governing procedures for section 4 applications, refer to section 225.23 of this
chapter.
ARSEBECO, Inc., Falls City, Nebraska ("ARSEBECO"), a bank holding company registered pursuant
to the Bank Holding Company Act ("BHC Act"), has
applied for the Board's approval under section 3(a)(3)
of the BHC Act (12 U.S.C. § 1843(a)(3)) to acquire
State Bank of Stella, Stella, Nebraska ("Stella
Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (54 Federal Register 21,667 (1989)). 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.
ARSEBECO controls one subsidiary bank, Richardson County Bank and Trust Company, also of Falls
City, Nebraska ("Richardson Bank"), controlling deposits of $43.5 million, and is the 64th largest commercial banking organization in Nebraska with less than
one percent of total deposits in commercial banks in
the state. Bank is one of the smaller commercial
banking organizations in the state, controlling deposits
of $12.8 million, representing less than one percent of
total deposits in commercial banks in the state.1 Accordingly, consummation of this proposal would not
significantly increase the concentration of banking
resources in Nebraska.
Both Stella Bank and Richardson Bank compete
directly in the Richardson County banking market.2
Richardson Bank is the second largest of five commercial banking organizations that operate in the market,
1. Commercial banking data are as of December 31, 1988. Thrift
data are as of June 30, 1988.
2. The Richardson County banking market is approximated by
Richardson County, Nebraska.
702
Federal Reserve Bulletin • October 1989
controlling deposits of $43.5 million, representing
32.0 percent of total deposits in commercial banking
organizations in the market. Stella Bank is the fourth
largest commercial banking organization in the
market, controlling deposits of $12.8 million, representing 9.4 percent of total deposits in commercial
banking organizations in the market. Upon consummmation of this proposal, ARSEBECO would
become the largest commercial banking organization
in the market, controlling $56.3 million in deposits,
representing 41.4 percent of total deposits in the
market. The market would be considered highly
concentrated with the post-consummation Herfindahl-Hirschman Index ("HHI") increasing 602
points to 3400.3
Although consummation of this proposal would
eliminate some existing competition in the Richardson County market, several factors mitigate the
potential anticompetitive effects of this proposal.
The Board has considered as a significant factor
Bank's financial condition and its ability to function
as a viable competitor in the market. Stella Bank has
suffered financial difficulties in recent years, and as a
result, has not been a strong competitor in the
market. As a part of this proposal, ARSEBECO has
committed to increase the capital of Stella Bank to a
level significantly above the Board's minimum capital adequacy guideline requirements. By restoring
Stella Bank's capital, this acquisition should ensure
Stella Bank's ability to service the convenience and
needs of its community. In addition, the market is
not attractive for entry by an entity outside of the
market because of the market's small size and slow
rate of growth.
In addition, the Board has considered the presence
of two thrift institutions in this market in its analysis of
this proposal. The Board has previously indicated that
thrift institutions have become, or have the potential
to become, major competitors of commercial banks.4
3. 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 over 1800 is considered highly concentrated. 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.
4. National
City Corporation,
(1984); The Chase Manhattan
BULLETIN 529 (1984); NCNB
70 FEDERAL RESERVE
Bancorporation,
70 FEDERAL RESERVE
69 FEDERAL RESERVE BULLETIN 298 (1983).
This action was taken pursuant to the Board's Rules
Regarding Delegation of Authority (12 C.F.R. 265.1a(c)) by a
committee of Board members. Voting for this action: Chairman Greenspan and Governors Kelley and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
70 FEDERAL RESERVE BULLETIN 743
Corporation,
BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL
RESERVE BULLETIN 802 (1983); and First Tennessee National Corporation,
Based upon size and market share of thrift institutions
in the Richardson County banking market, the Board
has concluded that thrift institutions exert a competitive influence that mitigates in part the anticompetitive
effects of this proposal.5 Accordingly, based on the
facts of record in this case, the Board believes that
consummation of the proposal would not have a
significantly adverse effect on competition in any
relevant market.
The financial and managerial resources and future
prospects of ARSEBECO and Richardson Bank are
consistent with approval. In light of ARSEBECO's
proposed immediate capital injection and commitment
of managerial resources to Stella Bank, its financial
and managerial resources and future prospects will be
enhanced. Thus, considerations relating to banking
factors lend weight toward approval of this application.
The record of this application also indicates that
this transaction would provide substantial benefits to
the convenience and needs of the community by
averting further deterioration of Stella Bank's financial condition. In this context, the Board concludes
that the benefit of maintaining services to Bank's
customers that could be derived from this proposal
lends significant weight toward approval of this proposal and outweighs any anticompetitive effects that
would result from consummation of the proposal.
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 of Stella 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 Kansas City, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
August 14, 1989.
5. If 50 percent of the deposits held by thrift institutions were
included in the calculation of market concentration, Richardson Bank
would control 27.1 percent of the market's deposits and Stella Bank
would control 8.0 percent of the market deposits. The HHI would
increase by 432 points to 2573.
Legal Developments
Banknorth Group, Inc.
Burlington, Vermont
Order Approving the Formation and Merger of Bank
Holding Companies and the Acquisition of Banking
Subsidiaries
Banknorth Group, Inc., Burlington, Vermont
("Banknorth"), has applied for the Board's approval
under section 3 of the Bank Holding Company Act
(12 U.S.C. § 1842) ("BHC Act") to become a bank
holding company and to acquire by merger Banknorth
Group, Inc., Burlington, Vermont ("Old Banknorth")
and Howard Bancorp, Burlington, Vermont ("Howard"), both bank holding companies within the meaning of the BHC Act (12 U.S.C. § 1841 et seq.).1
Banknorth also proposes to acquire indirectly the
banking subsidiaries of Old Banknorth and Howard.2
Notice of the applications, affording an opportunity
for interested persons to submit comments, has been
duly published (54 Federal Register 24,749 (1989)).
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.
Banknorth is a non-operating company formed for
the purpose of acquiring Old Banknorth and Howard.
Old Banknorth is the second largest of nineteen banking organizations in Vermont, controlling total deposits of $745 million, representing 15.6 percent of the
total deposits in commercial banking organizations in
the state.3 Howard is the third largest banking organization in Vermont, controlling $663 million in deposits, representing 13.9 percent of the total deposits in
commercial banking organizations in the state. Upon
consummation of the proposal and all planned divestitures, Banknorth would become the largest banking
organization in Vermont. It would control deposits of
approximately $1.4 billion, representing 29.5 percent
of the total deposits in commercial banking organizations in Vermont. Consummation of this proposal
1. Banknorth, a newly formed corporation, proposes to acquire all
of the outstanding voting shares of Old Banknorth and Howard
through an exchange of shares and a merger of each bank holding
company with and into Banknorth.
2. Old Banknorth has two bank subsidiaries: First Vermont Bank
and Trust Company, Brattleboro, Vermont, and Franklin-Lamoille
Bank, St. Albans, Vermont. Howard has three bank subsidiaries: The
Howard Bank, National Association, Burlington, Vermont; Woodstock National Bank, Woodstock, Vermont; and Granite Savings
Bank and Trust Company, Barre, Vermont. Old Banknorth also
indirectly controls a mortgage banking subsidiary. Banknorth has
chosen not to seek approval of that subsidiary's activity and will
consequently forfeit its authority to conduct mortgage banking activities through a nonbank subsidiary.
3. State deposit data are as of March 31, 1989, and market deposit
data are as of June 30, 1987.
703
would not have a significant adverse effect upon the
concentration of commercial banking resources in any
relevant market.
Old Banknorth and Howard compete directly in the
following three Vermont banking markets: BarreMontpelier, Burlington-St. Albans, and Rutland. The
Board previously has indicated that thrift institutions
have become, or have the potential to become, important competitors of commercial banks.4 In analyzing
the competitive factors in each of these markets, the
Board has considered the presence of a number of
savings banks.
In the Barre-Montpelier market, Old Banknorth is
the third largest of eight commercial banking organizations, controlling $72.3 million in deposits, representing 15.4 percent of total deposits in commercial
banks in that market.5 Howard is the largest commercial banking organization in the Barre-Montpelier market, controlling $150.4 million in deposits, representing 32.1 percent of total deposits in commercial banks
in the market. Upon consummation of this proposal,
Banknorth would become the largest commercial
banking organization, controlling $222.7 million in
deposits, representing 47.5 percent of the market share
of commercial banks. Following consummation, seven
commercial banks and two savings banks would remain in the market. The concentration ratio of the four
largest commercial banking organizations in the BarreMontpelier market would increase 13 percentage
points to 93 percent and the Herfindahl-Hirschman
4. Midwest
Financial
( 1 9 8 9 ) ; CB&TBancshares,
(1989); National
Group,
75 FEDERAL RESERVE BULLETIN 386
Inc.,
7 5 FEDERAL RESERVE BULLETIN 3 8 1
City Corporation,
70 FEDERAL RESERVE BULLETIN
743 (1984). The Board previously has indicated that, when analyzing
the anticompetitive effects of a particular proposal, it may consider
the competitiveness of thrift institutions at a level greater than 50
percent of thrift deposits when appropriate. Fleet Financial Group,
Inc.,
7 4 F E D E R A L RESERVE B U L L E T I N 6 2 ( 1 9 8 8 ) ; Hartford
Corporation,
National
7 3 F E D E R A L RESERVE B U L L E T I N 7 2 0 ( 1 9 8 7 ) . T h e c o n -
sideration of thrift competition at such a level is appropriate to the
competitive analysis of this proposal with respect to all the relevant
markets. All but one of the thrifts in these markets are state chartered
savings banks, empowered under Vermont law to exercise virtually
the same powers enjoyed by commercial banks. Vt. Stat. Ann. tit. 8,
§ 606 (1988). These savings banks provide a full array of commercial
banking services in addition to offering traditional thrift products. For
example, these savings banks maintain commercial lending departments that employ several commercial lending officers, offer commercial and industrial loans and commercial real estate loans, and offer
commercial demand deposit accounts. Moreover, the commercial
lending activities of savings banks in these markets are significant. For
savings banks in the relevant markets, the average ratio of commercial
and industrial loans (other than those secured by real estate) to total
assets is approximately 8.2 percent, well above the 2.5 percent
average for thrifts on a nationwide basis.
5. The Barre-Montpelier market is approximated by Washington
County, excluding the towns of Fayston, Waitsfield and Warren; and
with the addition of the towns of Groton, Hardwick, Stannard, and
Walden in Caledonia County and the towns of Chelsea, Orange,
Topsham, Washington and Williamstown in Orange County.
704
Federal Reserve Bulletin • October 1989
Index ("HHI") would increase by 991 points to 2964.6
In order to mitigate the adverse competitive effects
on competition in this market that would otherwise
result from consummation of this proposal, Old
Banknorth has committed to divest on or before consummation of the merger two of its banking offices in
Barre-Montpelier to a party that does not compete in
this market.7 In light of the facts of record, including
the divestiture plan, the number of competitors remaining in the market, and the competition offered by
savings banks in this market, the Board has concluded
that consummation of this proposal would not have a
significant adverse effect on competition in the BarreMontpelier market.
In the Rutland banking market, Banknorth would
become the largest of seven commercial banking organizations upon consummation of proposal.8 Several
market characteristics mitigate the anticompetitive
effects of the proposal. Seven commercial banks and
three savings banks would remain in the market following consummation. The Rutland market also is
6. 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 above 1800 is considered highly concentrated. In
such markets, the Department is likely to challenge a merger that
increases the HHI by more than 50 points. The Department has
informed the Board that a bank merger or acquisition generally will
not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the
merger increases the HHI by 200 points. The Justice Department has
stated that the higher than normal HHI thresholds for screening bank
mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial entities.
7. The Board's policy regarding divestitures intended to remedy
anticompetitive effects of a merger or acquisition proposal requires
that such divestitures must occur on or before consummation. Fleet
Financial Group, Inc., 74 FEDERAL RESERVE BULLETIN 62 (1988);
Barnett Banks of Florida, Inc., 68 FEDERAL RESERVE BULLETIN 190
(1982). Upon consummation of this proposal with planned divestitures
of these offices, which control deposits of $55.8 million, Banknorth
would become the largest commercial banking organization in the
market, controlling deposits of $166.8 million, representing 35.6
percent of the market. The four-firm concentration ratio would decline
3 points to 77 and the HHI would increase 225 points to 2116.
Assuming the inclusion in pro forma market concentration calculations of 100 percent of Barre-Montpelier market savings banks deposits, Banknorth's market share would be 25.5 percent and the HHI
would increase by 116 points to 1720.
8. The Rutland banking market is approximated by Rutland County,
excluding the towns of Danby, Pawlet and Wells; and with the
addition of the town of Goshen in Addison County. Old Banknorth is
the third largest of eight commercial banking organizations in this
market, controlling $78.8 million in deposits, which represents 15.9
percent of the total deposits in commercial banks. Howard is the
fourth largest commercial banking organization, controlling $76.3
million in deposits, which represents 15.4 percent of the total deposits
in commercial banks. Following consummation, the four-firm concentration ratio would increase 11 percentage points to 90 percent and the
HHI would increase 489 points to 2294. Assuming the inclusion in pro
forma market concentration calculations of 100 percent of the deposits
held by Rutland market savings banks, Banknorth would rank second
in the market, with a market share 22.9 percent. The four-firm
concentration ratio would increase 11 percentage points to 82 percent
and the HHI would increase 266 points to 1835.
relatively attractive for entry, as evidenced by the
1988 de novo establishment of a savings bank branch
in the market by an outside competitor. Moreover, the
Rutland market has exhibited a trend toward
deconcentration.9 In light of the facts of record, including the number of competitors remaining in the
market and the competition offered by savings banks
in this market, the Board concludes that consummation of this proposal would not have a significant
adverse effect on competition in the Rutland market.
In the Burlington-St. Albans market, Banknorth
would become the largest of seven commercial banking organizations.10 Following consummation, six
commercial banks and two savings banks would remain in the market. The Burlington-St. Albans market
also exhibits an attractiveness of entry that mitigates
possible anticompetitive effects of the proposal. The
market encompasses Vermont's largest Metropolitan
Statistical Area and compares favorably to the rest of
the state in terms of population growth, per capita
household income, and total deposits per branch.11 In
addition, a de novo savings bank branch was established in the market in 1988. In light of the facts of
record, including the number of competitors remaining
in the market and the competition offered by savings
banks in this market, the Board concludes that consummation of this proposal would not have a significant adverse effect on competition in the BurlingtonSt. Albans market.
The Board also has considered the effects of the
proposal on probable future competition in markets in
which Old Banknorth and Howard do not compete. In
9. The HHI for commercial banking organizations declined by 278
points between 1983 and 1987.
10. Based on facts of the record, including a recent market survey,
the former separate banking markets of Burlington and St. Albans
have been reconstituted into the new, combined market of BurlingtonSt. Albans. The Burlington-St. Albans banking market is approximated by the Burlington Ranally Metropolitan Area, Franklin County,
and the towns of Monkton and Starksboro in Addison County; Bolton,
Buel's Gore, Huntington, Underhill, and Westford in Chittenden
County; Alburg, Grand Isle, and Isle La Motte in Grand Isle County;
and Belvidere, Cambridge and Waterville in Lamoille County. Old
Banknorth is the fourth largest of seven commercial banking organizations in this market, controlling $129.3 million in deposits, which
represents 11.5 percent of the total deposits in commercial banks.
Howard is the second largest commercial banking organization,
controlling $253.1 million in deposits, which represents 22.5 percent of
the total deposits in commercial banks. After consummation, the
four-firm concentration ratio would increase 7 percentage points to 93
percent and the HHI would increase 519 points to 2680. Assuming the
inclusion in pro forma market concentration calculations of 100
percent of the deposits of Burlington-St. Albans market savings
banks, Banknorth would rank first, with a market share of 29.3
percent. The four-firm concentration ratio would increase seven
points to 81 and the HHI would increase 216 points to 1880.
11. Between 1980 and 1986, population increased 7.8 percent in the
market compared to 5.8 percent in Vermont as a whole. In 1986, per
capita household income was $14,238 in the market versus $13,342 in
Vermont. Total deposits per banking office were $24.5 million in the
market versus $23.6 million in Vermont.
Legal Developments
light of the market concentration and the number of
probable future entrants into those markets, the Board
concludes that consummation of this proposal would
not have a significant adverse effect on probable future
competition in any relevant market.
The financial and managerial resources of Old
Banknorth and Howard and their subsidiaries are
consistent with approval. No additional debt will be
incurred in connection with the proposal. Considerations relating to the convenience and needs of the
communities to be served by Banknorth's proposed
subsidiary banks also are consistent with approval of
this application.
Accordingly, based on the foregoing and other facts
of the record, including Old Banknorth's divestiture
commitments, the Board has determined that the
applications should be, and hereby are, approved. The
proposal 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
Boston, acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 14, 1989.
This action was taken pursuant to the Board's Rules
Regarding Delegation of Authority (12 C.F.R. 265.1a(c)) by a
committee of Board members. Voting for this action: Chairman Greenspan and Governors Kelley and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
B.M.J. Financial Corp.
Bordentown, N e w Jersey
705
(1989)). 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)).
Section 3(d) of the BHC Act (12 U.S.C. § 1842(d)),
the Douglas Amendment, prohibits the Board from
approving an application by a bank holding company
to acquire a bank located outside of the bank holding
company's home state, unless such 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." 12 U.S.C.
§ 1842(d).
In 1986, the Pennsylvania legislature authorized
reciprocal acquisitions of Pennsylvania banking institutions by out-of-state bank holding companies under
certain conditions.1 New Jersey's interstate banking
statute has been explicitly recognized by the Pennsylvania legislature to be reciprocal with Pennsylvania's
laws as the New Jersey law existed on March 31,
1986,2 and B.M.J. Financial's proposal appears to
meet the conditions of Pennsylvania law.
B.M.J. Financial is the 15th largest commercial
banking organization in New Jersey, controlling deposits of $641 million, which represents approximately
.91 percent of the total deposits in commercial banking
organizations in the state.3
Bank, a de novo institution, is being organized as a
state-chartered member bank. It will provide a broad
range of commercial banking services in the Philadelphia/Trenton market.4 In view of the de novo status of
Bank and based upon the facts of record, the Board
concludes that the proposed transaction would have
no adverse effects on existing or future competition,
nor would it increase the concentration of resources in
any relevant market. In addition, the financial and
Order Approving Acquisition of Bank and
Membership in the Federal Reserve System
B.M.J. Financial Corp., Bordentown, New Jersey
("B.M.J. Financial"), a bank holding company within
the meaning of the Bank Holding Company Act
("BHC Act"), has applied for the Board's approval
under section 3(a)(3) of the BHC Act (12 U.S.C.
§ 1842(a)(3)) to acquire all of the voting shares of Bank
of Delaware Valley, Fairless Hills, Pennsylvania
("Bank"), a de novo commercial bank. Bank also has
applied, pursuant to section 9 of the Federal Reserve
Act (12 U.S.C. § 321 et seq.), and section 208.4 of the
Board's Regulation H (12 C.F.R. 208.4), to become a
member of the Federal Reserve System.
Notice of the application under the BHC Act, affording interested persons an opportunity to submit
comments, has been given in accordance with section
3(b) of the BHC Act (54 Federal Register 24,593
1. These conditions include:
(i) reciprocal acquisition rights for Pennsylvania bank holding
companies;
(ii) for acquisitions before March 4, 1990, location within a defined
region (which includes New Jersey) and 75 percent of the acquiring
bank holding company's deposits within the defined region;
(iii) a limitation on the number of Pennsylvania institutions owned
by an out-of-state bank holding company to the number of institutions permitted for a Pennsylvania bank holding company (currently
four); and
(iv) approval by the Pennsylvania Department of Banking. See,
7 Penn. Stat. § 116(b). The Board's approval is conditional upon
B.M.J. Financial obtaining approval from the appropriate state
regulatory authorities.
2. 7 Penn. Stat. § 116(c)(iv). There have been no substantive
amendments to New Jersey law that would affect this determination.
3. Deposit and asset data are as of December 31, 1988.
4. The Philadelphia/Trenton market is approximated by Bucks,
Chester, Delaware, Montgomery, and Philadelphia Counties, Pennsylvania; and Burlington, Camden, Gloucester, and Mercer Counties,
New Jersey. Bank's primary service area includes Falls Township,
Middletown, Lower Makefield, and Bristol Township, Pennsylvania.
706
Federal Reserve Bulletin • October 1989
managerial resources of B.M.J. Financial and its subsidiaries are consistent with approval.
In considering the convenience and needs of the
community to be served, the Board has taken into
account the record of B.M.J. Financial's banks under
the Community Reinvestment Act (12 U.S.C. § 2901
et seq.) ("CRA"). The CRA requires that federal bank
supervisory agencies encourage financial institutions
to help meet the credit needs of the local communities
in which they operate consistent with the safe and
sound operation of such institutions. To accomplish
this end, the CRA requires the appropriate federal
supervisory authority to "assess the institution's
record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution." The Board is required to "take
such record into account in its evaluation" of applications under section 3 of the BHC Act.
In this regard, the Board has received comments
from the Affordable Housing Coalition of Burlington County, Inc., Mount Holly, New Jersey
("Coalition"). 5 Coalition is a group of individuals
and organizations concerned about affordable housing. Coalition has alleged that the CRA records of
B.M.J. Financial's lead bank, Bank of Mid-Jersey,
Bordentown, New Jersey ("Mid-Jersey"), and one
of its other subsidiary banks, Mount Holly State
Bank, Mount Holly, New Jersey ("Mount Holly"),
are deficient, particularly with regard to the banks'
participation in programs sponsored by the New
Jersey Mortgage and Finance Agency, FHA, FMHA,
and VA loan programs, support of community
reinvestment and community development, and initiatives to ascertain the credit needs of their surrounding communities. Coalition also has challenged
the appropriateness of B.M.J. Financial's CRA
Statement and training programs. Finally, Coalition
claims B.M.J. Financial has participated in very
few isolated programs sponsored by non-profit
groups.
The Board has reviewed the CRA record of the
banks in accordance with its practice and procedure.
The Board notes that the three subsidiary banks of
B.M.J. Financial have received satisfactory CRA assessments from their primary supervisory agencies.
There is no indication of any pattern of discrimination
by B.M.J. Financial's bank subsidiaries. The primary
bank supervisors have examined the CRA Statements
of the banks and have determined the Statements are
satisfactory. B.M.J. Financial's banks have established Advisory Boards to ascertain the credit needs of
their communities.
Mid-Jersey is an active participant in the New
Jersey Higher Education Assistance Agency in its
lending activities for student loans. Mid-Jersey also
holds municipal security obligations, which provide
financial assistance to local communities in New
Jersey. Mid-Jersey has received an award for its
participation in the Bordentown City-Farnsworth
Avenue Revitalization Program, a neighborhood
preservation program sponsored by the New Jersey
Department of Community Affairs. This program
provides interest-free loans and grants for the renovation of business and residential real estate in the
City of Bordentown.
Mount Holly participates in loan programs sponsored by the New Jersey Mortgage Finance Agency,
Small Business Administration, and Guaranteed Student Loan Association. In addition, Mount Holly
participates in a Burlington County sponsored small
business loan guarantee program. Mount Holly also
has provided construction loans to a builder of lowcost housing. Additionally, Mount Holly has extended
credit to churches, synagogues, and local community
service organizations. Mount Holly's awareness of the
credit needs of its community is maintained by direct
involvement with civic organizations and personal
contact between bank officers and government officials. Mount Holly has advised appropriate community officials of its interest in participating in community development programs in its community and is
involved in aspects of program planning and
implementation.6
In order to ensure B.M.J. Financial and its subsidiary banks continue to comply with the policies of the
CRA, an officer of B.M.J. Financial has been appointed to coordinate the CRA efforts of the banks to
ensure that every effort is made to ascertain the needs
of their communities. This will be in addition to the
6. The Board has previously recognized that participation in these
types of programs is an effective means for assuring that the services
of depository institutions reach low- and moderate-income segments
of the communities served by these institutions (see, e.g., Bank of
Ireland,
5. The League of Women Voters of the Moorestown Area, Moorestown, New Jersey, has filed a statement supporting this protest. The
Fair Lending Coalition of New Jersey, Newark, New Jersey, also
submitted a letter in support of this protest. In addition, the Fair
Lending Coalition submitted comments urging the Board to deny the
application on the same grounds as those submitted by Coalition.
75 FEDERAL RESERVE BULLETIN 39, 41 (1989)), and recently
affirmed this position in the Community Reinvestment Act Statement
released jointly by the federal depository institutions regulatory
agencies on March 21, 1989. 54 Federal Register 13,742 (1989). As
noted in the Statement, federal agencies will continue to consider
favorably financial-institution leadership in concerted efforts to improve low- and moderate-income areas in the community and participation by financial institutions in public and private partnerships to
promote economic and community development efforts.
Legal Developments
Advisory Boards B.M.J. Financial already has in
place. B.M.J. Financial also will take steps to better
inform all individuals of the services offered by its
banks.
Finally, B.M.J. Financial has committed to explore
the possibility of lower than market mortgage and
home improvement loans.
On the basis of the record in this case, including the
past CRA performance of B.M.J. Financial and its
subsidiary banks and its commitments and plans for
future action, the Board concludes that considerations
relating to the convenience and needs of the community to be served are consistent with approval.
Bank has applied under section 9 of the Federal
Reserve Act (12 U.S.C. § 321 et seq.), and section 208
of the Board's Regulation H (12 C.F.R. 208.4), to
become a member of the Federal Reserve System
upon consummation of the acquisition. The Board has
considered the factors it is required to consider when
approving applications for membership pursuant to
section 9 of the Federal Reserve Act (12 U.S.C. § 322)
and section 6 of the Federal Deposit Insurance Act
(12 U.S.C. § 1816), and finds those factors to be
consistent with approval. Bank appears to meet all of
the criteria for admission to membership, including
capital requirements and considerations related to
management, character and quality. Accordingly,
Bank's application to become a member of the Federal
Reserve System is approved.
On the basis of the entire record, including the
commitments of B.M.J. Financial, the section 3 application to acquire control of Bank and the section 9
application to become a member of the Federal Reserve System are approved for the reasons summarized above. This approval is conditional upon approval from the appropriate state regulatory
authorities. The proposal shall not be consummated
before the 30th calendar day following the effective
date of this Order, or later than three months after the
effective date of this Order, and Bank shall be open for
business not later than six months after the effective
date of this Order. The latter two periods may be
extended for good cause by the Board or the Federal
Reserve Bank of Philadelphia, pursuant to delegated
authority.
By order of the Board of Governors, effective
August 14, 1989.
This action was taken pursuant to the Board's Rules
Regarding Delegation of Authority (12 C.F.R. 265.1a(c)) by a
committee of Board members. Voting for this action: Chairman Greenspan and Governors Kelley and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
707
Equimark Corporation
Pittsburgh, Pennsylvania
Order Approving Acquisition of a Bank Holding
Company
Equimark Corporation ("Equimark") and EquiManagement, Inc. ("EquiManagement"), both of Pittsburgh, Pennsylvania (collectively "Applicants"),
bank holding companies within the meaning of the
Bank Holding Company Act (the "BHC Act"), have
applied for the Board's approval under section 3 of
the BHC Act (12 U.S.C. § 1842) to acquire up to 42.4
percent of National Bancshares Corporation of
Texas, San Antonio, Texas ("NBC"), 1 and to control NBC through a management agreement approved by the FDIC and NBC that provides
Equimark and EquiManagement with certain general
control over the daily operations of NBC.
NBC, with total assets of approximately $2.2
billion,2 has 12 bank subsidiaries. The FDIC has
determined that the bank subsidiaries of NBC are in
danger of closing and is providing assistance to NBC
pursuant to section 13(c) of the Federal Deposit
Insurance Act, as amended (12 U.S.C. § 1823(c)).
The FDIC solicited offers for the acquisition of NBC
from qualified bidders. On July 21, 1989, the FDIC
selected Applicants' bid for NBC, and advised that
Applicants had been selected as the winning bidder.
The FDIC recommended expeditious action on these
applications by the Board. The OCC has also recommended approval of the transaction.
In view of this situation and the need for expeditious
action to protect the interest of NBC's depositors, it
has been determined, pursuant to section 3(b) of the
BHC Act (12 U.S.C. § 1842(b)), section 225.14(h) of
the Regulation Y (12 C.F.R. 225.14(h)), and section
262.3(1) of the Board's Rules of Procedure (12 C.F.R.
262.3(1)), to dispense with the notice provisions of the
BHC Act.
Under section 3(d) of the BHC Act (12 U.S.C.
§ 1842(d)), the Douglas Amendment, a bank holding
company generally may not be allowed to acquire
control of any bank located outside of the holding
1. In connection with these applications, LTL Acquisition Corporation, San
Antonio, Texas, has applied to become a bank holding company through the
acquisition of the twelve subsidiary banks of NBC. Equimaiic proposes to
acquire 32.4 percent of the voting shares of LTL Acquisition Corporation and
EquiManagement proposes to acquire 10 percent of the voting shares of LTL
Acquisition Corporation.
2. Asset data are as of March 31, 1989.
708
Federal Reserve Bulletin • October 1989
company's principal state of operations.3 Applicants,
with approximately $3.5 billion in total assets as of
March 31, 1989, are bank holding companies that
principally operate in Pennsylvania for purposes of the
Douglas Amendment. As noted above, NBC is located
in Texas.
Effective January 1, 1987, Texas enacted an interstate banking statute that permits out-of-state bank
holding companies to acquire established Texas banks
and bank holding companies under certain conditions.
Action on these applications is specifically conditioned
on Applicants' compliance with any and all applicable
laws of the State of Texas. Accordingly, the provisions
of section 3(d) of the BHC Act and of any relevant
state law will not bar approval of the proposed transaction.
In evaluating an application under section 3 of the
BHC Act, the Board is required to consider the
financial and managerial resources and future prospects of the companies involved, the effect of the
proposal on competition, and the convenience and
needs of the communities to be served. Under the
proposal, Applicants will provide NBC with new management officials. The agreement in principle between
Applicants and the FDIC will recapitalize NBC, and
permit NBC to continue to provide a full range of
services to its customers.
Based on these and all of the other facts of record,
including the bid proposal made by Applicants and
accepted by the FDIC, and Applicants' stated intent to
raise substantially more equity capital than the amount
of its investment in NBC, the financial and managerial
resources and future prospects of Applicants, their
subsidiaries, NBC and its subsidiaries are consistent
with approval of these applications. The benefits to the
convenience and needs of the communities in Texas of
maintaining NBC as a viable competitor in Texas
weigh in favor of approval of these applications.
Applicants have no banking offices in Texas and
have no nonbanking offices in any relevant market.
Accordingly, consummation of the proposal would not
increase the concentration of banking resources or
have any significant adverse effects on competition in
Texas or any other relevant market.
Based on the foregoing and all of the facts of record,
the General Counsel and the Staff Director of the
Division of Banking Supervision and Regulation have
determined, acting pursuant to authority specifically
delegated by the Board in this case, that the applica-
3. A bank holding company's principal state of banking operations
is the state in which the operations of the bank holding company's
banking subsidiaries were principally conducted on the later of July 1,
1966, or the date on which the company became a bank holding
company.
tions under section 3 of the BHC Act should be, and
hereby are, approved. This action is limited to approval of the transaction according to the terms and
conditions of Applicants' bid as presented to the
Federal Reserve System, and any significant change in
those terms or conditions may require further review
by the Board.
The FDIC has informed the Board that expeditious
action on Applicants' proposal is necessary in order
to permit Applicants to assume control of NBC and
continue to operate NBC as a viable competitor
serving its communities. In light of these and all the
facts of record in this case, the General Counsel and
the Staff Director of the Division of Banking Supervision and Regulation, acting pursuant to authority
delegated by the Board, have determined, in accordance with section 11(b) of the BHC Act, that expeditious action on these applications is necessary and
that Applicants may immediately acquire control of
NBC and may consummate their proposed investment in NBC on or after the fifth calendar day
following the effective date of this Order. The transaction shall not be consummated later than three
months after the effective date of this Order, unless
the period for consummation is extended for good
cause by the Board or the Federal Reserve Bank of
Cleveland under delegated authority.
By order, approved pursuant to authority delegated
by the Board, effective August 23, 1989.
WILLIAM W . WILES
Secretary of the Board
First Interstate Bancorp
Los Angeles, California
First Interstate Bank of California
Los Angeles, California
Order Approving Acquisition of a Bank and Merger
of Banks
First Interstate Bancorp, Los Angeles, California, a
bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act"), has
applied for the Board's approval under section 3 of
the BHC Act (12 U.S.C. § 1842) to acquire all of the
voting shares of Bank of Alex Brown, Sacramento,
California, and Meridian National Bank, Concord,
California. In addition, First Interstate Bank of California, Los Angeles, California ("First Interstate
Bank"), a state member banking subsidiary of First
Interstate Bancorp, has applied for the Board's approval under the Bank Merger Act (12 U.S.C.
Legal Developments
§ 1828(c)) to merge with Bank of Alex Brown under
the charter and title of First Interstate Bank.1
Notice of the applications under the BHC Act and
the Bank Merger Act, affording interested persons an
opportunity to submit comments, has been given in
accordance with the BHC Act, the Bank Merger Act,
and the Board's Rules of Procedure (12 C.F.R.
262.3(b)) (54 Federal Register 11,076 (1989) and 54
Federal Register 24,751 (1989)). As required by the
Bank Merger Act, reports of the competitive effects of
the merger were requested from the United States
Attorney General, the Office of the Comptroller of the
Currency, and the Federal Deposit Insurance Corporation. The time for filing comments has expired, and
the Board has considered the applications and all
comments received in light of the factors and considerations set forth in section 3(c) of the BHC Act and
the Bank Merger Act.
First Interstate Bancorp is the fourth largest of 420
banking organizations in California, controlling $16.4
billion in deposits, which represents 8.33 percent of
total deposits in commercial banks in the state.2 Bank
of Alex Brown and Meridian National Bank, combined, rank 37th in California, with $340 million in
deposits, which represents 0.17 percent of total deposits in commercial banks in the state. Upon consummation of the proposed merger, First Interstate Bancorp
would remain the fourth largest commercial banking
organization in California, controlling $16.7 billion in
deposits, representing 8.5 percent of total deposits in
commercial banks in the state. Consummation of the
proposal would not have any significant adverse effect
on the concentration of banking resources in California.
Applicant competes with Bank of Alex Brown and
Meridian National Bank (together referred to as
"Banks") in the Sacramento, San Francisco-Oakland,
and Auburn banking markets in California.3 Applicant
is the third largest of 31 commercial banking organizations in the Sacramento market, with deposits of
$377 million, representing 6.9 percent of total deposits
1. First Interstate Bank proposes to effect the merger through a
series of transactions. First, a wholly owned subsidiary of First
Interstate Bank will merge into Alex Brown Financial Group, the
parent bank holding company of Bank of Alex Brown and Meridian
National Bank. Immediately after the merger, Alex Brown Financial
Group will be dissolved and liquidated into First Interstate Bank, and
First Interstate Bank will transfer all of the outstanding shares of
Meridian National Bank to First Interstate Bancorp. Bank of Alex
Brown will then be merged into First Interstate Bank.
2. Deposit, state ranking, and market data are as of June 30, 1987.
3. The Sacramento banking market is comprised of the Sacramento
Rand McNally Metropolitan Area ("RMA"). The San FranciscoOakland banking market is comprised of the San Francisco-Oakland
RMA. The Auburn banking market is comprised of the southwest
portion of Placer County around Auburn, which includes the cities of
Auburn, Foresthill, Lincoln, Colfax, and Meadow Vista in southwest
Placer County.
709
in commercial banks in the market ("market deposits"). On a combined basis, Banks would be the
seventh largest commercial banking organization in
the Sacramento market, with deposits of $154 million,
representing 2.8 percent of market deposits. Upon
consummation, Applicant would remain the third largest commercial banking organization in the market,
controlling $531 million in deposits, or 9.7 percent of
market deposits. The Sacramento market is considered concentrated, with a Herfindahl-Hirschman Index ("HHI") of 1877, which would increase by 38
points to 1915 upon consummation of the proposal.4
Applicant is the third largest of 94 commercial
banking organizations in the San Francisco-Oakland
market, with deposits of $2.73 billion, representing 5.1
percent of market deposits. On a combined basis,
Banks would rank 31st in the San Francisco-Oakland
market, with deposits of $100 million, representing 0.2
percent of market deposits. Upon consummation, Applicant would remain the third largest commercial
banking organization in the market, controlling $2.83
billion in deposits, or 5.3 percent of market deposits.
The San Francisco-Oakland market is considered concentrated, with an HHI of 2085, which would increase
by 2 points to 2087 upon consummation.
Applicant ranks sixth out of seven commercial
banking organizations in the Auburn banking market,
with deposits of $16.6 million, representing 5.4 percent
of market deposits. On a combined basis, Banks would
be the fourth largest commercial banking organization
in the Auburn market, with deposits of $22.8 million,
representing 7.3 percent of market deposits. Upon
consummation, Applicant would become the fourth
largest commercial banking organization in the market, controlling $39.4 million in deposits, or 12.7
percent of market deposits. The Auburn market is
considered concentrated, with an HHI of 2418, which
would increase by 79 points to 2497 upon consummation.
On the basis of the foregoing, the Board concludes
that consummation of the proposal would not have a
significant adverse effect on competition in any of
these markets or in any other relevant banking market.
4. 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 above 1800 is considered highly concentrated. In
such markets, the Department of Justice is unlikely to challenge a
merger or acquisition if the increase in the HHI is less 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.
710
Federal Reserve Bulletin • October 1989
The increase in concentration resulting from the proposal in each market is minimal, and in each market, a
significant number of competitors would remain after
consummation. In addition, the presence of thrift
institutions in these markets further mitigates any
anticompetitive effects in the markets.5 The Board
also does not believe that the consummation of the
proposal would have a significant adverse effect on
probable future competition in any relevant market.
The Board has considered several factors that bear
on the assessment of financial factors in this case.
First, Applicant proposes to acquire Banks through a
cash purchase amounting to approximately $41 million, which will result in only a slight lessening of the
overall capital strength of Applicant. Following the
acquisition of Banks, Applicant's capital ratios will
remain above the minimum levels specified in the
Board's Capital Adequacy Guidelines. Furthermore,
the Board notes that Applicant has issued $225 million
in perpetual preferred stock this year in order to
strengthen its capital position. Finally, Applicant
projects, and the Board expects Applicant to achieve,
continued improvement in its equity capital position.
Accordingly, on the basis of the above considerations, the Board concludes that financial factors are
consistent with approval of this proposal. Managerial
resources, convenience and needs considerations, and
future prospects of Applicant and Banks are also
consistent with approval.
First Interstate Bank will acquire, as part of the
merger, Alex Brown Development Corporation
("ABDC"), a wholly owned subsidiary of Bank of
Alex Brown. ABDC engages, through two joint ventures, in real estate development activities authorized
by state law. These investments represent more than
five 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 BHC
5. 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
B U L L E T I N 7 4 3 ( 1 9 8 4 ) ; NCNB
Bancorporation,
7 0 F E D E R A L RESERVE
Act. 6 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 ABDC as required under that
regulation.7 Accordingly, First Interstate Bank has
committed to divest these investments within two
years of the effective date of the merger.
Based on the foregoing and other facts of record, the
Board has determined that the applications under the
Bank Merger Act and section 3 of the BHC Act should
be, and hereby are, approved. The transactions shall
not be consummated before the thirtieth calendar day
following the effective date of this Order, or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 1, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, and Kelley. Voting against this action:
Governor Angell. Absent and not voting: Governors Heller
and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
Dissenting Statement of Governor Angell
Applicant's proposal involves a cash acquisition that is
not supported through the issuance of new common
equity capital. While the acquisition is small in relation
to the size of Applicant, the acquisition contemplated
is the last in a series of cash acquisitions that in the
aggregate may not be considered de minimis. I recognize that Applicant has raised some capital to
strengthen its overall capital position, and that Applicant has projected further strengthening of its capital
position. I would not permit proposals such as this,
however, unless the applicant has taken or will take
action before consummation to raise additional common equity to offset the purchase price of the acqui-
BULLETIN 225 (1984); General Bancshares Corporation,
69 FEDERAL
RESERVE BULLETIN 802 (1983); First Tennessee National
Corporation,
6 9 F E D E R A L RESERVE B U L L E T I N 2 9 8 ( 1 9 8 3 ) .
If 50 percent of the deposits controlled by thrift institutions were
included in the calculation of market concentration, Applicant and, on
a combined basis, Banks, would control 4.9 percent and 2.0 percent,
respectively, of market deposits in the Sacramento market. The HHI
for the Sacramento market would increase by 20 points to 1071 upon
consummation of the proposal. In the San Francisco-Oakland banking
market, Applicant would control 3.8 percent and Banks, on a combined basis, would control 0.14 percent of market deposits. The HHI
for the San Francisco-Oakland market would increase by 1 point to
1204 upon consummation. In the Auburn banking market, Applicant
would control 3.3 percent and Banks, on a combined basis, would
control 4.5 percent of market deposits. The HHI for the Auburn
market would increase by 30 points to 1201 upon consummation.
6. Security
Pacific
Corporation,
72 FEDERAL RESERVE BULLETIN
800 (1986).
7. 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 BHC Act.
Board Press Release dated May 13, 1971, 36 Federal Register 9292
(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 BHC Act. Id. In December 1988, in
light of a number of developments, the Board asked for comment on
whether to retain or rescind this regulation. 53 Federal Register 48,915
(1988). The comment period on the proposal ended on April 28, 1989,
and the matter is under review by the Board.
Legal Developments
sition. I therefore am unable to agree with the Board's
decision to approve this application.
August 3, 1989
F . N . B . A . Holding Company, Inc.
North Miami, Florida
Order Denying Formation of a Bank Holding
Company
F.N.B.A. Holding Company, Inc., North Miami, Florida ("FNBA"), has applied for the Board's approval
pursuant to section 3(a)(1) of the Bank Holding Company Act ("Act") (12 U.S.C. § 1841 et seq.), to become a bank holding company by acquiring 100 percent of the voting shares of First National Bank of
Arvada, Arvada, Colorado ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (54 Federal Register 21,667 (1989)).
The time for filing comments has expired, and the
Board has considered the application and all comments received in light of the factors set forth in
section 3(c) of the Act.
FNBA is a non-operating company formed for the
purpose of acquiring Bank. Bank is the 108th largest
commercial banking organization in Colorado, controlling deposits of $42 million, representing less than
one percent of the total deposits in commercial banking organizations in the state.1 Bank is the 34th largest
commercial banking organization in the Denver/Boulder banking market,2 controlling less than one percent
of the total deposits in commercial banking organizations in the market.
In evaluating this application, the Board is required,
under section 3 of the Act, to consider the financial
and managerial resources of FNBA and Bank and the
effect of the proposed acquisition on the future prospects of Bank and applicant organization. The Board
previously has stated that a bank holding company
should serve as a source of financial and managerial
strength to its subsidiary banks, and that the Board
would closely examine the condition of an applicant
and its subsidiaries in each case with this consideration in mind.3
The Board notes that Bank is in weakened financial
condition and is in need of financial and managerial
1. State banking data and market data are as of December 31, 1987.
2. The Denver/Boulder banking market includes the Denver RMA
and the Boulder RMA.
3. See St. Croix Valley Bancshares, Inc., 75 FEDERAL RESERVE
BULLETIN 575 (1989).
711
support.4 In this regard, Bank's capital position is not
consistent with capital adequacy quidelines after consideration of all relevant factors. In the Board's view,
the record does not support a finding that FNBA has
either the financial or managerial resources to support
Bank, particularly given its need for additional capital.
The proposal does not involve any addition to Bank's
capital nor has FNBA submitted a plan to improve the
condition of Bank. In addition, as noted above, FNBA
is a non-operating holding company, and does not
appear to have sufficient resources itself to provide
financial assistance to Bank. In its examination of the
full record of this case, the Board has also reviewed
the financial resources of the principals of FNBA. This
review has not mitigated the Board's concerns regarding FNBA's inability to act as a source of financial
strength.
The Board also notes that the principals of FNBA
are private investors who do not have relevant experience in managing a bank. This deficiency is of
significance when, as in this case, the subsidiary is in
a weakened financial condition. These facts raise
concerns regarding the future prospects of Bank if
acquired by FNBA under its current proposal.5
Based on all of the facts of record in this case, the
Board finds that financial and managerial considerations are not consistent with approval of the application.
Considerations relating to competitive factors and
the convenience and needs of the community to be
served are consistent with, but are not sufficient to
warrant, approval of the application.
On the basis of the facts of record, the Board
concludes that the banking considerations involved in
this proposal present adverse factors bearing upon the
financial and managerial resources and future prospects of FNBA and Bank. Such adverse factors are
not outweighed by any pro-competitive effects or by
significant benefits that would better serve the convenience and needs of the community. Accordingly, it is
the Board's judgment that approval of the application
would not be in the public interest and that the
application should be, and hereby is, denied.
4. In 1988, the shares of Bank were acquired by a bank subsidiary
of a large bank holding company ("Company") in satisfaction of a
debt previously contracted. Since Company acquired Bank, Company
has been involved in the implementation of various policies and
procedures at Bank that have improved Bank's lending function, and
has provided Bank with management guidance. Company has not
provided Bank with capital, however.
5. The Board has stated that the requirement that a bank holding
company act as a source of strength policy may be modified or delayed
in the case of a one bank holding company formation. However, no
exception can be made when, as in this case, the bank to be acquired
is in weakened condition. Policy Statement on the Assessment of
Financial Factors in the Formation of One Bank Holding Companies,
12 C.F.R. 225, appendix C.
712
Federal Reserve Bulletin • October 1989
By order of the Board of Governors, effective August 28, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
The Summit Bancorporation
Summit, N e w Jersey
Order Approving Acquisition of Shares of a Bank
Holding Company
The Summit Bancorporation, Summit, New Jersey
("Summit"), a bank holding company within the
meaning of the Bank Holding Company Act ("BHC
Act"), has applied for the Board's approval under
section 3(a)(3) of the BHC Act, 12 U.S.C.
§ 1842(a)(3), to acquire up to 9.9 percent of the voting
shares of Central Jersey Bancorp, Freehold, New
Jersey ("Central Jersey").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (54 Federal Register 24,753 (1989)). The
time for filing comments has expired, and the Board
has considered the application and all comments received, including comments submitted by Central Jersey in opposition to this proposal, in light of the factors
set forth in section 3(c) of the BHC Act.
Central Jersey argues that this application should be
denied because it represents a minority investment by
a bank holding company in a bank or bank holding
company.1 The Board, however, has previously approved the acquisition by a bank holding company of
less than a controlling interest in a bank, noting that
"nothing in section 3(c) of the [BHC] Act requires
denial of an application solely because a bank holding
company proposes to acquire less than a controlling
interest in a bank or bank holding company."2 The
1. Additionally, Central Jersey expresses concerns about the manner in which Summit has chosen to finance this acquisition and alleges
that this proposal may have an adverse effect on Summit's financial
condition. Central Jersey also maintains that approval of this application may encourage large and speculative investments that may
adversely affect the safety and soundness of other bank holding
companies. In addition, Central Jersey points out that although the
Board's past authorizations of minority investments by bank holding
companies may be justified as a prelude to potential full acquisition,
Central Jersey contends that Summit appears to lack the financial
resources necessary to acquire all of the voting shares of Central
Jersey. The Board has reviewed this application in light of these
comments and concludes that these comments do not warrant denial
of this proposal, and that financial and managerial considerations
regarding Summit are consistent with approval.
2. Midlantic
Banks,
Inc.,
70 FEDERAL RESERVE BULLETIN 776,
776-77 (1984)(acquisition of 24.9 percent of the voting shares of a bank
Board has also noted that the requirement in section
3(a)(3) of the BHC Act that the Board's prior approval
be obtained before a bank holding company acquires
more than 5 percent of the voting shares of a bank also
suggests that Congress contemplated the acquisition
by bank holding companies of between 5 percent and
25 percent of the voting shares of banks. For these
reasons, the Board concludes that the purchase by
Summit of less than a controlling interest in Central
Jersey is not a factor that, by itself, justifies denial of
this application.3
Central Jersey also contends that approval of the
application would permit Summit to control Central
Jersey because no other shareholder owns more than 5
percent of the outstanding common stock of Central
Jersey, and the ownership interest by Summit would
allow it to block or approve certain extraordinary
transactions under the bylaws of Central Jersey.4 As
part of this proposal, Summit has made a number of
commitments to address this concern. In particular,
Summit has committed that it will not, without the
Board's prior approval:
(1) exercise or attempt to exercise a controlling
influence over the management or policies of Central Jersey or its bank subsidiary;
(2) have or seek to have any employees or representative serve as an officer, agent or employee of
Central Jersey or its bank subsidiary;
(3) take any action causing Central Jersey or its bank
subsidiary to become a subsidiary of applicant;
(4) acquire or retain shares that would cause the
combined interest of applicant and its officers, directors and affiliates to equal or exceed 25 percent of
the outstanding voting shares of Central Jersey,
(5) propose a director or slate of directors in opposition to a nominee or slate of nominees proposed by
holding company). See, e.g., Comerica Inc., 69 FEDERAL RESERVE
BULLETIN 911 (1983)(acquisition of 21.6 percent of the voting shares
of a bank); State Street Boston Corporation, 67 FEDERAL RESERVE
BULLETIN 862, 863 (1981)(acquisition of 16.6 percent of the voting
shares of a bank holding company); Lincoln National Company, 63
FEDERAL RESERVE BULLETIN 405 (1977)(acquisition o f 9 . 9 percent o f
the voting shares of a bank); and First Piedmont
Corporation,
59
FEDERAL RESERVE BULLETIN 456 (1973)(acquisition o f 9 . 5 p e r c e n t o f
the voting shares of a bank).
3. The ability of Summit to purchase all of the voting shares of
Central Jersey is not an issue at this time. Summit has applied to
acquire up to a total of 9.9 percent of the voting shares of Central
Jersey. Any further investment by Summit in the voting shares of
Central Jersey would require Board approval. In addition, in the event
that Summit proposes otherwise to acquire control of Central Jersey in
the future, it must obtain the Board's prior approval. If Summit makes
such a proposal, the Board will at that time reexamine the effects of
the proposal under the factors set forth in section 3(c) of the BHC Act.
4. Based upon a review of Central Jersey's bylaws, it does not
appear that, with 9.9 percent of Central Jersey's common shares,
Summit will be able to block or approve certain extraordinary
transactions under Central Jersey's bylaws.
Legal Developments
the management or board of directors of Central
Jersey;
(6) attempt to influence the dividend policies or
practices of Central Jersey or its bank subsidiary;
(7) solicit or participate in soliciting proxies with
respect to any matter presented to the shareholders
of Central Jersey ;
(8) attempt to influence the loan and credit decisions
or policies of Central Jersey and its bank subsidiary,
the pricing of services, any personnel decision, the
location of any offices, branching, the hours of
operation, or similar activities of Central Jersey and
its bank subsidiary;
(9) dispose or threaten to dispose of shares of
Central Jersey in any manner as a condition of
specific action or nonaction by Central Jersey;
(10) enter into any other banking or nonbanking
transactions with Central Jersey, except that applicant may establish and maintain deposit accounts
with bank subsidiaries of Central Jersey, provided
that the aggregate balances of all such accounts do
not exceed $500,000 and that the accounts are
maintained on substantially the same terms as those
prevailing for comparable accounts of persons unaffiliated with Central Jersey ; or
(11) seek or accept representation on the board of
directors of Central Jersey.
Summit also has committed not to take other action to
cause Central Jersey to become a subsidiary of Summit without prior Board approval.
Based on the facts of record and Summit's commitments, the Board has concluded that Summit would
not acquire control or the ability to exercise a controlling influence over Central Jersey upon consummation
of this proposal.
The Board's inquiry does not end, however, with its
finding that Summit will not control Central Jersey.
The Board notes that noncontrolling interests in directly competing banks or bank holding companies
may raise serious questions under the BHC Act. The
Board has previously noted that one company need
not acquire control of another in order to substantially
lessen competition between them, and that the specific
facts of each case will determine whether the minority
investment in a company will be anticompetitive.5 In
this case, it is the Board's judgment, based upon
careful analysis of the record, that no significant
reduction in competition is likely to result from the
acquisition. The record shows that there will be no
officer or director interlocks between Summit and
Central Jersey, that Summit intends the acquisition to
5 . See
Sun Banks,
Inc.,
7 1 F E D E R A L RESERVE B U L L E T I N 2 4 3 ( 1 9 8 5 ) .
713
be a strictly passive investment, and that Summit is
prohibited by the BHC Act and its commitments from
acting in concert with any other entity for control of
Central Jersey. Moreover, as discussed below, even
were the Board to conclude that Summit would control
Central Jersey, the elimination of competition between
the two entities is not so substantial as to warrant
denial of the application. The record shows that Summit and Central Jersey operate in a highly competitive
market and each controls less than one percent of the
market's deposits.
Summit is the seventh largest banking organization
in New Jersey, controlling deposits of $3.0 billion,
representing approximately 4.3 percent of the total
deposits in commercial banking organizations in the
state.6 Central Jersey is the fourteenth largest commercial banking organization in New Jersey, controlling deposits of $1.2 billion, representing approximately 1.7 percent of the total deposits in commercial
banking organizations in the state.
The subsidiary banks of Summit and Central Jersey
compete directly in the Metropolitan New York-New
Jersey banking market.7 Summit and Central Jersey
each control less than one percent of the total deposits
in commercial banks in this market.8 The Metropolitan
New York-New Jersey banking market is unconcentrated, with a four-firm concentration ratio of 46.8
percent and a Herfindahl-Hirschman Index ("HHI")
of 719, which would increase by 1 point to 720 upon
consummation of this proposal.9
The financial and managerial resources and future
prospects of Summit and Central Jersey and their
subsidiaries are consistent with approval of this application. The Board concludes, after carefully considering the comments raised by Central Jersey and the
entire record in this case, that consummation of the
proposal would not have a material adverse effect on
the financial and managerial resources or future prospects of Summit, Central Jersey, or their bank subsidiaries. In reaching this conclusion, the Board notes
that Central Jersey and its subsidiary are adequately
capitalized with satisfactory records of operations,
6. Statewide data are for commercial banking organizations as of
June 30, 1989.
7. The Metropolitan New York-New Jersey banking market includes New York City; Nassau, Orange, Putnam, Rockland, Suffolk,
Sullivan, and Westchester Counties in New York; Bergen, Essex,
Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic,
Somerset, Sussex, Union, and Warren Counties in New Jersey; and
parts of Fairfield County in Connecticut.
8. Data for the Metropolitan New York-New Jersey banking market
are for commercial banking organizations as of June 30, 1986.
9. Under the revised Department of Justice Merger Guidelines
(49 Federal Register 26,823 (June 29, 1984)), a market in which the
post-merger HHI is less than 1000 is considered to be unconcentrated.
In such markets, the Department of Justice will not challenge a merger
or acquisition except in extraordinary circumstances.
714
Federal Reserve Bulletin • October 1989
and concludes that the record does not indicate that
the proposed acquisition by Summit would adversely
affect, in any material way, the capitalization or operations of Central Jersey.
Considerations relating to the convenience and
needs of the communities to be served by Summit's
and Central Jersey's subsidiary banks are consistent
with approval of this application.
Based on the foregoing and other facts of record,
and in reliance upon commitments made by Summit,
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 by the Federal Reserve Bank of New York,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 28, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
United Counties Bancorporation
Cranford, N e w Jersey
Order Approving Acquisition of Shares of a Bank
Holding Company
United Counties Bancorporation, Cranford, New Jersey ("United Counties"), a bank holding company
within the meaning of the Bank Holding Company Act
("BHC Act"), has applied for the Board's approval
under section 3(a)(3) of the BHC Act, 12 U.S.C.
§ 1842(a)(3), to acquire up to 9.9 percent of the voting
shares of Central Jersey Bancorp, Freehold, New
Jersey ("Central Jersey").
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (54 Federal Register 20,921 (1989)). The
time for filing comments has expired, and the Board
has considered the application and all comments received, including comments submitted by Central Jersey in opposition to this proposal, in light of the factors
set forth in section 3(c) of the BHC Act.
Central Jersey argues that this application should be
denied because it represents a minority investment by
a bank holding company in a bank or bank holding
company.1 The Board, however, has previously approved the acquisition by a bank holding company of
less than a controlling interest in a bank, noting that
"nothing in section 3(c) of the [BHC] Act requires
denial of an application solely because a bank holding
company proposes to acquire less than a controlling
interest in a bank or bank holding company."2 The
Board has also noted that the requirement in section
3(a)(3) of the BHC Act that the Board's prior approval
be obtained before a bank holding company acquires
more than 5 percent of the voting shares of a bank also
suggests that Congress contemplated the acquisition
by bank holding companies of between 5 percent and
25 percent of the voting shares of banks. For these
reasons, the Board concludes that the purchase by
United Counties of less than a controlling interest in
Central Jersey is not a factor that, by itself, justifies
denial of this application.3
Central Jersey also contends that approval of the
application would permit United Counties to control
Central Jersey because no other shareholder owns
more than 5 percent of the outstanding common stock
of Central Jersey, and the ownership interest by
United Counties would allow it to block or approve
certain extraordinary transactions under the bylaws of
1. Additionally, Central Jersey expresses concerns about the manner in which United Counties has chosen to finance this acquisition
and alleges that this proposal may have an adverse effect on United
Counties's financial condition. Central Jersey also maintains that
approval of this application may encourage large and speculative
investments that may adversely affect the safety and soundness of
other bank holding companies. In addition, Central Jersey points out
that although the Board's past authorizations of minority investments
by bank holding companies may be justified as a prelude to potential
full acquisition, Central Jersey contends that United Counties appears
to lack the financial resources necessary to acquire all of the voting
shares of Central Jersey. The Board has reviewed this application in
light of these comments and concludes that these comments do not
warrant denial of this proposal, and that financial and managerial
considerations regarding United Counties are consistent with approval.
2. Midlantic
Banks,
Inc.,
70 FEDERAL RESERVE BULLETIN 776,
776-77 (1984)(acquisition of 24.9 percent of the voting shares of a bank
holding company). See, e.g., Comerica Inc., 69 FEDERAL RESERVE
BULLETIN 911 (1983)(acquisition of 21.6 percent of the voting shares
of a bank); State Street Boston Corporation, 67 FEDERAL RESERVE
BULLETIN 862, 863 (1981)(acquisition of 16.6 percent of the voting
shares of a bank holding company); Lincoln National Company, 63
FEDERAL RESERVE BULLETIN 405 (1977)(acquisition of 9 . 9 p e r c e n t of
the voting shares of a bank); and First Piedmont
Corporation,
59
FEDERAL RESERVE BULLETIN 4 5 6 (1973)(acquisition o f 9 . 5 p e r c e n t o f
the voting shares of a bank).
3. The ability of United Counties to purchase all of the voting shares
of Central Jersey is not at issue at this time. United Counties has
applied to acquire up to a total of 9.9 percent of the voting shares of
Central Jersey. Any further investment by United Counties in the
voting shares of Central Jersey would require Board approval. In
addition, in the event that United Counties proposes otherwise to
acquire control of Central Jersey in the future, it must obtain the
Board's prior approval. If United Counties makes such a proposal, the
Board will at that time reexamine the effects of the proposal under the
factors set forth in section 3(c) of the BHC Act.
Legal Developments
Central Jersey.4 As part of this proposal, United
Counties has made a number of commitments to
address this concern. In particular, United Counties
has committed that it will not, without the Board's
prior approval:
(1) exercise or attempt to exercise a controlling
influence over the management or policies of Central Jersey or its bank subsidiary;
(2) have or seek to have any employees or representative serve as an officer, agent or employee of
Central Jersey or its bank subsidiary;
(3) take any action causing Central Jersey or its bank
subsidiary to become a subsidiary of applicant;
(4) acquire or retain shares that would cause the
combined interest of applicant and its officers, directors and affiliates to equal or exceed 25 percent of
the outstanding voting shares of Central Jersey;
(5) propose a director or slate of directors in opposition to a nominee or slate of nominees proposed by
the management or board of directors of Central
Jersey;
(6) attempt to influence the dividend policies or
practices of Central Jersey or its bank subsidiary;
(7) solicit or participate in soliciting proxies with
respect to any matter presented to the shareholders
of Central Jersey;
(8) attempt to influence the loan and credit decisions
or policies of Central Jersey and its bank subsidiary,
the pricing of services, any personnel decision, the
location of any offices, branching, the hours of
operation, or similar activities of Central Jersey and
its bank subsidiary;
(9) dispose or threaten to dispose of shares of
Central Jersey in any manner as a condition of
specific action or nonaction by Central Jersey;
(10) enter into any other banking or nonbanking
transactions with Central Jersey, except that applicant may establish and maintain deposit accounts
with bank subsidiaries of Central Jersey, provided
that the aggregate balances of all such accounts do
not exceed $500,000 and that the accounts are
maintained on substantially the same terms as those
prevailing for comparable accounts of persons unaffiliated with Central Jersey; or
(11) seek or accept representation on the board of
directors of Central Jersey.
United Counties also has committed not to take other
action to cause Central Jersey to become a subsidiary
of United Counties without prior Board approval.
4. Based upon a review of Central Jersey's bylaws, it does not
appear that, with 9.9 percent of Central Jersey's common shares,
United Counties will be able to block or approve certain extraordinary
transactions under Central Jersey's bylaws.
715
Based on the facts of record and United Counties's
commitments, the Board has concluded that United
Counties would not acquire control or the ability to
exercise a controlling influence over Central Jersey
upon consummation of this proposal.
The Board's inquiry does not end, however, with its
finding that United Counties will not control Central
Jersey. The Board notes that noncontrolling interests
in directly competing banks or bank holding companies may raise serious questions under the BHC Act.
The Board has previously noted that one company
need not acquire control of another in order to substantially lessen competition between them, and that
the specific facts of each case will determine whether
the minority investment in a company will be
anticompetitive.5 In this case, it is the Board's judgment, based upon careful analysis of the record, that
no significant reduction in competition is likely to
result from the acquisition. The record shows that
there will be no officer or director interlocks between
United Counties and Central Jersey, that United
Counties intends the acquisition to be a strictly passive
investment, and that United Counties is prohibited by
the BHC Act and its commitments from acting in
concert with any other entity for control of Central
Jersey. Moreover, as discussed below, even were the
Board to conclude that United Counties would control
Central Jersey, the elimination of competition between
the two entities is not so substantial as to warrant
denial of the application. The record shows that
United Counties and Central Jersey operate in a highly
competitive market and each controls less than one
percent of the market's deposits.
United Counties is the sixteenth largest banking
organization in New Jersey, controlling deposits of
$924.9 million, representing approximately 1.3 percent
of the total deposits in commercial banking organizations in the state.6 Central Jersey is the fourteenth
largest commercial banking organization in New Jersey, controlling deposits of $1.2 billion, representing
approximately 1.7 percent of the total deposits in
commercial banking organizations in the state.
The subsidiary banks of United Counties and Central Jersey compete directly in the Metropolitan New
York-New Jersey banking market.7 United Counties
and Central Jersey each control less than one percent
5 . See Sun Banks,
Inc.,
7 1 F E D E R A L RESERVE B U L L E T I N 2 4 3 ( 1 9 8 5 ) .
6. Statewide data are for commercial banking organizations as of
June 30, 1989.
7. The Metropolitan New York-New Jersey banking market includes New York City; Nassau, Orange, Putnam, Rockland, Suffolk,
Sullivan, and Westchester Counties in New York; Bergen, Essex,
Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic,
Somerset, Sussex, Union, and Warren Counties in New Jersey; and
parts of Fairfield County in Connecticut.
716
Federal Reserve Bulletin • October 1989
of the total deposits of commercial banks in this
market.8 The Metropolitan New York-New Jersey
banking market is unconcentrated, with a four-firm
concentration ratio of 46.8 and a HerfindahlHirschman Index ("HHI") of 719, which would increase by 1 point to 720 upon consummation of this
proposal.9
The financial and managerial resources and future
prospects of United Counties and Central Jersey and
their subsidiaries are consistent with approval of this
application. The Board concludes, after carefully
considering the comments raised by Central Jersey
and the entire record in this case, that consummation
of the proposal would not have a material adverse
effect on the financial and managerial resources or
future prospects of United Counties, Central Jersey,
or their bank subsidiaries. In reaching this conclusion, the Board notes that Central Jersey and its
subsidiary are adequately capitalized with satisfactory records of operations, and concludes that the
record does not indicate that the proposed acquisition by United Counties would adversely affect, in
any material way, the capitalization or operations of
Central Jersey.
Considerations relating to the convenience and
needs of the communities to be served by United
Counties's and Central Jersey's subsidiary banks are
consistent with approval of this application.
Based on the foregoing and other facts of record,
and in reliance upon commitments made by United
Counties, 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 by the Federal Reserve
Bank of New York, acting pursuant to delegated
authority.
By order of the Board of Governors, effective
August 28, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and La Ware.
JENNIFER J. JOHNSON
Associate Secretary of the Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Citicorp
N e w York, N e w York
Order Granting Relief from Certain Conditions
Relating to the Operation of Subsidiary Savings
Associations
Citicorp, New York, New York ("Citicorp"), has
petitioned the Board for relief from certain conditions
imposed by the Board by Order on the operation of
Citicorp's California, Florida and Illinois savings association subsidiaries.1 The conditions from which
Citicorp has requested relief (the so-called "tandem
operations conditions") provide that savings associations acquired by a bank holding company may not be
operated in tandem with any other subsidiary of the
bank holding company, and require approval by the
appropriate Federal Reserve Bank before the savings
association engages in any transactions with the bank
holding company or its other subsidiaries.2
Notice of the petition, affording interested persons
an opportunity to submit comments, has been published (54 Federal Register 15,806 (1989)). The time for
filing comments has expired, and the Board has considered the petition and all comments received in light
of all relevant statutory factors.
The provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA"), which became effective on August 9,
1989, require the Board to remove the tandem operations conditions as they apply to savings associations that are currently owned by bank holding
companies.3
Based on the provisions of FIRREA, its review of
the record, and in light of changed economic and
regulatory circumstances, the Board hereby grants
Citicorp's request for relief from the tandem operations conditions as they apply to Citicorp's savings
association subsidiaries. Transactions between Citicorp's savings association subsidiaries and its bank
subsidiaries continue to be subject to the provisions of
sections 23A and 23B of the Federal Reserve Act
(12 U.S.C. §§ 371c and 371c-l), provisions of the
Bank Holding Company Act relating to tying arrange-
1. Citicorp (New Biscayne Federal Savings & Loan), 70 FEDERAL
8. Data for the Metropolitan New York-New Jersey banking market
are for commercial banking organizations as of June 30, 1986.
9. Under the revised Department of Justice Merger Guidelines
(49 Federal Register 26,823 (June 29, 1984)), a market in which the
post-merger HHI is less than 1000 is considered to be unconcentrated.
In such markets, the Department of Justice will not challenge a merger
or acquisition except in extraordinary circumstances.
RESERVE BULLETIN 157 (1984); Citicorp
Loan
Association),
70
FEDERAL
(First Federal
RESERVE
BULLETIN
Citicorp (Fidelity Federal Savings & Loan Association),
Savings
149
&
(1984);
68 FEDERAL
RESERVE B U L L E T I N 6 5 6 ( 1 9 8 2 ) .
2. The text of these conditions is set out in Appendix I to this Order.
3. Financial Institutions Reform, Recovery, and Enforcement Act
o f 1989, P u b . L . N o . 1 0 1 - 7 3 , § 6 0 1 , 103 Stat. 183, 4 0 8 (1989).
Legal Developments
ments (12 U.S.C. § 1971 et al.), as well as all other
applicable statutory provisions.
By order of the Board of Governors, effective
August 21, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
Appendix I
(1) the savings associations be operated as separate,
independent, profit-oriented corporate entities and not
be operated in tandem with any other subsidiary of the
bank holding company. In order to carry out this
condition, the bank holding company and savings
associations would limit their operations so that:
(a) no banking or other subsidiary of the bank
holding company would link its deposit-taking activities to accounts at the savings associations in a
sweeping arrangement or similar arrangement;
(b) the savings associations would not directly or
indirectly solicit deposits or loans for any other
subsidiary of the bank holding company and the
bank holding company and its subsidiaries would
not solicit deposits or loans for the savings associations;
(2) to the extent necessary to insure independent
operation of the savings association and prevent the
improper diversion of funds, the savings associations
not engage in any transactions with the bank holding
company or its other subsidiaries without prior approval of the appropriate Federal Reserve Bank;
Compagnie Financiere de Suez
Paris, France
Banque Indosuez
Paris, France
Order Approving Acquisition of a General
Partnership Interest in an Investment Adviser
Compagnie Financiere de Suez and its wholly owned
subsidiary, Banque Indosuez, both of Paris, France
(collectively "Applicant"), foreign banking organizations subject to the Bank Holding Company Act
("BHC Act"), have applied for the Board's approval
under section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), to acquire indirectly
through their de novo subsidiary, IndoSuez North
America Asset Management, Inc. ("IndoSuez Asset
61
Management"), a general partnership interest in
Daniel Breen & Company, L.P., Houston, Texas
("Company"), which will be a registered investment
adviser.1 Applicant seeks to engage indirectly through
Company in the following activities which have been
approved by the Board for bank holding companies:
(1) providing portfolio investment advice and investment management services to institutions and
individuals pursuant to 12 C.F.R. 225.25(b)(4)(iii);
and
(2) serving as investment advisor to investment
companies pursuant to 12 C.F.R. 225.25(b)(4)(ii).
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (54 Federal Register 18,597 (1989)).
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.
Banque Indosuez, with total adjusted assets equivalent to approximately $46.3 billion, is the 85th largest
banking organization in the world and the 8th largest
banking organization in France.2 In the United States,
Applicant maintains branches in New York and Chicago, agencies in Los Angeles and Houston, and an
Edge Corporation. Accordingly, Applicant is subject
to the nonbanking restrictions of section 4 of the BHC
Act as a bank holding company.
The Board has previously determined by regulation
that the investment advisory services that Applicant
proposes to conduct through IndoSuez Asset Management are closely related to banking and permissible for
bank holding companies. 12 C.F.R. 225.25(b)(4). Applicant and IndoSuez Asset Management propose to
conduct these activities pursuant to the requirements
of the Board's regulations.
Prior decisions of the Board indicate a concern that
joint ventures could potentially lead to a matrix of
relationships between co-venturers that could break
down the legally mandated separation of banking and
commerce, create the possibility of conflicts of interest
and other adverse effects that the BHC Act was
designed to prevent, or impair or give the appearance
of impairing the ability of the banking organization to
function effectively as an independent and impartial
1. IndoSuez Asset Management will acquire a 40 percent general
partnership interest in Company. Company will assume the advisory
contracts of Daniel Breen & Company, which will no longer engage in
any activity other than holding a general partnership interest in
Company. IndoSuez Asset Management will have an option to purchase the remaining partnership interests in Company over the next
six years.
2. Data are as of December 31, 1988.
718
Federal Reserve Bulletin • October 1989
provider of credit.3 Further, joint ventures must be
carefully analyzed for any possible adverse effects on
competition and on the financial condition of the
banking organization involved in the proposal.
Daniel Breen & Company has stated that it will
engage only in holding its investment in Company.
Further, Applicant has committed to notify the Board
in the event that Daniel Breen & Company determines
to engage in any securities business that is impermissible for a state member bank under the Glass-Steagall
Act, and to seek Board approval of Applicant's retention of its interest in Company should the activities of
Daniel Breen & Company be inconsistent with the
Board's Order approving this application.
In applications under section 4(c)(8) of the BHC
Act, the Board considers the financial condition and
resources of the applicant and its subsidiaries, and the
effects of the proposed transaction on those
resources. 4 In accordance with the principles of national treatment and competitive equality, the Board
has stated its expectation that a foreign bank meet the
same general standards of financial strength as domestic bank holding companies and 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 make it difficult to compare the
capital positions of domestic and foreign banks. In the
past, the Board has addressed the complex issues
involved in balancing these concerns in the context of
individual applications on a case-by-case basis, making adjustments as appropriate to an applicant's capital
to reflect differences in accounting treatment and
regulatory practices.
The Board recently has adopted a proposal to supplement its consideration of capital adequacy with a
risk-based system that is simultaneously being proposed by the member countries of the Basle Commit-
3. See, e.g., Independent Bankers Financial Corporation, 72 FEDERAL RESERVE BULLETIN 664 (1986); and
Amsterdam-Rotterdam
Bank, N.V., 70 FEDERAL RESERVE BULLETIN 835 (1984).
4. 12 C . F . R . 225.24; Bayerische
Vereinsbank
AG, 73 FEDERAL
RESERVE BULLETIN 1 5 5 , 1 5 6 ( 1 9 8 7 ) .
5. Nippon Credit Bank, Ltd., 75 FEDERAL RESERVE BULLETIN 308
(1989); The Long-Term Credit Bank, 74 FEDERAL RESERVE BULLETIN
577 (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 71 (1986); The
Mitsubishi Bank Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984).
See also Policy Statement on Supervision and Regulation of Foreign
Based Bank Holding Companies, Federal Reserve Regulatory Service
11 4-835 (1979).
tee 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 norm 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 Banque Indosuez is below the minimum capital guidelines for United States multinational bank
holding companies. Banque Indosuez, however, meets
the 1990 interim risk-based guidelines, and its core
capital exceeds the 1992 minimum standard adopted
by the Basle Committee. In addition, Banque Indosuez proposes to raise additional equity capital by
year-end 1989, at which time its capital is projected to
meet primary and total capital guidelines. The Board
also notes that the application involves nonbanking
activities that generate fee income and that require a
small commitment of capital. In view of these and
other facts of record, the Board has determined that
financial factors are consistent with approval of the
application.
To approve the application, the Board must find that
Applicant's performance of the activities in question
"can reasonably be expected to produce benefits to
the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts
of interests, or unsound banking practices."
12 U.S.C. § 1843(c)(8). Applicant does not currently
engage in investment advisory activities in the United
States. Accordingly, consummation of this proposal
would not result in decreased competition. Moreover,
Applicant's proposal can be expected to result in an
increase in competition due to the financial support
provided by Applicant and the increased access of
customers to foreign markets.
In light of the facts of record and the commitments
offered by Applicant, the Board finds that the proposal
would not result in conflicts of interests or decreased
or unfair competition. There is also no evidence in the
record that indicates that Applicant's proposal would
result in any undue concentration of resources, unsound banking practices or other adverse effects.
Based on the foregoing and other facts of record,
including the commitments made by Applicant, IndoSuez Asset Management and shareholders of Company, the Board has determined that the balance of
6. 54 Federal Register 4186 (1989).
Legal Developments
public interest factors that it must consider under
section 4(c)(8) of the BHC Act is favorable. Accordingly, the Board has determined that the application
should be, and hereby is, approved. This determination is subject to all of the conditions set forth in the
Board's Regulation Y, including sections 225.4(d) and
225.23(b), and to the Board's authority to require such
modification or termination of the activities of a bank
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 24, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
The Long-Term Credit Bank of Japan, Limited
Tokyo,Japan
Order Approving Application to Conduct Investment
Advisory Activities
The Long-Term Credit Bank of Japan, Limited,
Tokyo, Japan ("Applicant"), a foreign bank subject
to the provisions of the Bank Holding Company Act
(the "BHC Act"), has applied, pursuant to section
4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and
section 225.21(a) of the Board's Regulation Y
(12 C.F.R. 225.21(a)), for the Board's approval to
acquire through its wholly owned subsidiary, LTCB
Capital Markets, Inc., Wilmington, Delaware
("LCM"), 60 percent of the voting equity of LTCBMAS Investment Management, Inc., Bala-Cynwyd,
Pennsylvania ("Company"), a de novo company that
proposes to engage in investment advisory activities
that are permissible for bank holding companies
under section 225.25(b)(4) of the Board's Regulation
Y (12 C.F.R. 225.25(b)(4)). The remaining 40 percent
of Company would be acquired by Miller, Anderson
& Sherrerd, Bala-Cynwyd, Pennsylvania ("MAS").
Notice of the application, affording interested persons an opportunity to submit comments, has been
719
duly published (54 Federal Register 24,261 (1989)).
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 4(c)(8) of the BHC Act.
Applicant is the twentieth largest banking organization worldwide and the twelfth largest in Japan,
controlling total consolidated assets of approximately U.S. $184.5 billion.1 Applicant is a registered
bank holding company by virtue of its ownership of
LTCB Trust Company, New York, New York, a
state-chartered trust company the deposits of which
are insured by the Federal Deposit Insurance Corporation. In addition, Applicant maintains a branch
in New York, New York, a limited branch in Chicago, Illinois, and an agency in Los Angeles, California.
MAS is a limited partnership currently engaged in
providing discretionary money management services
to corporate and governmental pension plans, endowment funds, foundations, and other tax-exempt
institutional investors in the United States. Almost
all of MAS's revenues are derived from providing
investment advisory services that would be permissible for bank holding companies.2
The Board has previously determined by regulation that the investment advisory services that Applicant proposes to conduct through Company are
closely related to banking and permissible for bank
holding companies. 12 C.F.R. 225.25(b)(4). Applicant and Company propose to conduct these activities pursuant to the requirements of the Board's
regulations. The Board must also find that the proposed acquisition "can reasonably be expected to
produce benefits to the public . . . that outweigh the
possible adverse effects, such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices."
12 U.S.C. § 1843(c)(8).
In prior decisions, the Board has expressed concern that joint ventures could potentially lead to a
matrix of relationships between co-venturers that
could break down the legally mandated separation of
banking and commerce, create the possibility of
conflicts of interest, and other adverse effects that
the BHC Act was designed to prevent, or impair or
give the appearance of impairing the ability of the
banking organization to function effectively as an
1. All banking data are as of March 31, 1989.
2. MAS also sponsors the MAS Pooled Trust Fund (the "Fund"), a
diversified investment company, which accounts for a small portion of
MAS's business and assets under management.
720
Federal Reserve Bulletin • October 1989
independent and impartial provider of credit.3 Further, joint ventures must be carefully analyzed for
any possible adverse effects on competition and on
the financial condition of the banking organization
involved in the proposal.
In prior cases involving joint ventures between bank
holding companies and firms generally engaged in
securities activities not authorized for bank holding
companies, the Board has relied upon a series of
commitments to address these potential adverse effects. These commitments are designed to separate the
activities of the joint venture from those of the nonbanking co-venturer. See
Amsterdam-Rotterdam
Bank, N.V., 7 0 FEDERAL RESERVE BULLETIN 8 3 5
( 1 9 8 4 ) . In this case, Applicant has made a number of
commitments similar to those that the Board has relied
upon in other cases. The commitments are designed to
ensure a separation between the joint venture and
MAS's activities related to the Fund. Applicant also
has committed to apply for the Board's approval to
retain its interest in Company if MAS expands its
activities beyond its current investment advisory activities. If required by the Board in such circumstances, Applicant will cause LCM to divest its interest in Company. Under the circumstances of this case,
and in view of the fact that most of the activities of
MAS are permissible for bank holding companies, the
Board finds these commitments are sufficient to address its concerns with potential adverse effects associated with the joint venture.
With regard to the competitive factors, two of
Applicant's affiliates currently compete with MAS in
the United States. LTCB Trust Company offers investment advisory services primarily to institutional
Japanese customers. Applicant anticipates that these
accounts will be transferred to Company. Greenwich
Asset Management, Inc., Greenwich, Connecticut
("GAM"), an indirect subsidiary of Applicant, engages in investment advisory services primarily with
respect to U.S. Treasury securities, and futures and
options on financial instruments. Following consummation of the proposal, GAM would continue to
provide these services. The portion of the market for
investment and advisory services controlled by each
of these companies is small, and the market for these
services is highly competitive and served by numerous
competitors. In light of these facts, consummation of
this proposal would not significantly reduce competition or result in any other significantly adverse effects
on competition in any relevant market.
In every case involving a nonbanking acquisition by
a bank holding company under section 4 of the BHC
Act, the Board considers the financial condition and
resources of the applicant and its subsidiaries and the
effect of the transaction on these resources. 4 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.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 is simultaneously being proposed by the member
countries of the Basle Committee on Banking Regulations and Supervisory Practices and the other domestic federal banking agencies. 6 The Japanese Ministry
of Finance in April of last 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 primary capital ratio of Applicant,
as publicly reported, is well below the minimum level
specified in the Board's Capital Adequacy Guidelines.
After making adjustments to reflect Japanese banking
and accounting practices, however, 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,
4. 12 C.F.R. 225.24; The Fuji Bank, Limited,
BULLETIN 94 (1989); Bayerische
75 FEDERAL RESERVE
Vereinsbank AG, 73 FEDERAL RE-
SERVE B U L L E T I N 1 5 5 , 1 5 6 ( 1 9 8 7 ) .
5. See Toyo Trust and Banking Co., Ltd., 74 FEDERAL RESERVE
BULLETIN 623 (1988); Taiyo
Kobe
Bank,
74 FEDERAL RESERVE
BULLETIN 621 (1988); The Long-Term Credit Bank of Japan,
Limited,
14 FEDERAL RESERVE BULLETIN 573 (1988); The Sanwa Bank, Limited, 74 FEDERAL RESERVE BULLETIN 578 (1988); Sumitomo Trust &
Banking
Co., Ltd., 11 FEDERAL RESERVE BULLETIN 749 (1987);
Ljubljanska
Banka-Associated
Bank, 12 FEDERAL RESERVE BULLE-
TIN 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
3. See, e.g., Amsterdam-Rotterdam
Bank, N.V.,
RESERVE BULLETIN 835 (1984); The Fuji Bank,
Ltd.,
RESERVE BULLETIN 577 (1989); and The Maybaco
Equitable
Bancorpation,
70 FEDERAL
75 FEDERAL
Company
and
60 FEDERAL RESERVE BULLETIN 375 (1983).
also, Policy Statement on Supervision and Regulation of ForeignBased Holding Companies, Federal Reserve Regulatory Service
f 4-835 (1979).
6. 54 Federal Register 4186 (1989).
Legal Developments
Applicant's capital ratio meets United States standards.
The Board also has considered several additional
factors that mitigate its concern in this case. The
Board notes that the application involves nonbanking
activities that require a small commitment of capital
and that Applicant is in compliance with the capital
and other financial requirements of Japanese banking
organizations. Since Japan is a signatory to the Basle
Accord, it can be expected to ensure compliance by its
banks with the risk-based capital standards by 1992.
Based on these and other facts of record, the Board
concludes that financial considerations are consistent
with approval of the application.
Consummation of Applicant's proposal may be expected to provide increased convenience to Company's customers and gains in efficiency. Accordingly,
the Board has determined that performance of the
proposed activities by Company can reasonably be
expected to produce benefits to the public.
For these reasons, and in reliance on the commitments offered in this case, the Board believes that the
proposal is not likely to result in decreased or unfair
competition, conflicts of interests, unsound banking
practices, concentration of resources or other adverse
effects, and that the balance of public interest factors
that the Board is required to consider under section
4(c)(8) of the BHC Act is favorable. Accordingly, the
Board has determined that the application should be,
and hereby is, approved. In approving this application,
the Board has relied on all the commitments made by
Applicant, Company and MAS. This determination is
also subject to all 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 such 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 the provisions and purposes of the BHC Act
and the Board's regulations and orders issued thereunder, or to prevent evasion thereof.
The proposed activity shall be commenced not later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of New
York, acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 28, 1989.
Voting for this action: Chairman Greenspan, and Governors Johnson, Angell, Kelley, and LaWare. Voting against
this action: Governor Seger.
721
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
available for United States banks under guidelines that
have not yet become effective for U.S. or foreign
banking organizations.
August 28, 1989
Michigan National Corporation
Farmington Hills, Michigan
Order Granting Relief from Certain Conditions
Relating to the Operation of a Subsidiary Savings
Association
Michigan National Corporation, Farmington Hills,
Michigan ("Michigan National"), has petitioned the
Board for relief from certain conditions imposed by
the Board by Order on the operation of Michigan
National's savings association subsidiary, Beverly
Hills Federal Savings Bank, Beverly Hills, California.1
The conditions from which Michigan National has
requested relief (the so-called "tandem operations
conditions") provide that savings associations acquired by a bank holding company may not be operated in tandem with any other subsidiary of the bank
holding company, and require approval by the appropriate Federal Reserve Bank before the savings association engages in any transactions with the bank
holding company or its other subsidiaries.2
The provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA"), which became effective on August 9,
1989, require the Board to remove the tandem operations conditions as they apply to savings associations that are currently owned by bank holding
companies.3
1. See Michigan National
Corporation,
75 FEDERAL RESERVE
BULLETIN 8 8 ( 1 9 8 9 ) .
JENNIFER J. JOHNSON
Associate Secretary of the Board
2. The text of these conditions is set out in Appendix I to this Order.
3. Financial Institutions Reform, Recovery, and Enforcement Act
o f 1989, P u b . L . N o . 1 0 1 - 7 3 , § 6 0 1 , 103 S t a t . 183, 4 0 8 ( 1 9 8 9 ) .
722
Federal Reserve Bulletin • October 1989
Based on the provisions of FIRREA, its review of
the record, and in light of changed economic and
regulatory circumstances, the Board hereby grants
Michigan National's request for relief from the tandem operations conditions as they apply to its savings association subsidiary. Transactions between
Michigan National's savings association subsidiary
and its bank subsidiaries continue to be subject
to the provisions of sections 23A and 23B of the
Federal Reserve Act (12 U.S.C. §§ 371c and 371c-l),
provisions of the Bank Holding Company Act
relating to tying arrangements (12U.S.C. §1971
et al.), as well as all other applicable statutory
provisions.
By order of the Board of Governors, effective
August 21, 1989.
Voting for this action: Chairman Greenspan and Governors
Johnson, Seger, Angell, Kelley, and LaWare.
JENNIFER J. JOHNSON
Associate Secretary of the Board
APPLICATIONS
APPROVED
By the Secretary
UNDER BANK MERGER
Appendix I
(1) the savings associations be operated as separate,
independent, profit-oriented corporate entities and
not be operated in tandem with any other subsidiary
of the bank holding company. In order to carry out
this condition, the bank holding company and savings associations would limit their operations so that:
(a) no banking or other subsidiary of the bank
holding company would link its deposit-taking activities to accounts at the savings associations in a
sweeping arrangement or similar arrangement;
(b) the savings associations would not directly or indirectly solicit deposits or loans for any other subsidiary
of the bank holding company and the bank holding
company and its subsidiaries would not solicit deposits
or loans for the savings associations;
(2) to the extent necessary to insure independent
operation of the savings association and prevent the
improper diversion of funds, the savings associations
not engage in any transactions with the bank holding
company or its other subsidiaries without prior approval of the appropriate Federal Reserve Bank;
ACT
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.
Applicant
Sovran Bank/Central South,
Nashville, Tennessee
Bank(s)
Sovran Bank/Hickman County,
Centerville, Tennessee
Sovran Bank/Eastern,
Oak Ridge, Tennessee
Effective
^
August 23, 1989
Legal Developments
APPLICATIONS
APPROVED
By Federal Reserve
UNDER BANK HOLDING
COMPANY
723
ACT
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Section 3
Applicant
Abbott Bank Group, Inc.,
Alliance, Nebraska
American Bancorp of Ponca
City, Inc.,
Ponca City, Oklahoma
Bancpal, Inc.,
Palatine, Illinois
Bank Maryland Corp.,
Towson, Maryland
Bryan Bancorp of Georgia, Inc.,
Richmond Hill, Georgia
CB&T Bancshares, Inc.,
Columbus, Georgia
TB&C Bancshares, Inc.,
Columbus, Georgia
FBC Holding Company, Inc.,
Crestview, Florida
First National Bank of Blue
Island Employee Stock
Ownership Trust,
Blue Island, Illinois
Fourth Financial Corporation,
Wichita, Kansas
F & P Bancshares Inc.,
Lexington, Kentucky
Gold Bancshares, Inc.,
Seneca, Kansas
Horizon Bancorp, Inc.,
Bethesda, Maryland
Iowa Financial Bancorporation,
Minneapolis, Minnesota
Litchville State Bank Holding
Company,
Litchville, North Dakota
Bank(s)
Bridgeport Banshares, Inc.,
Bridgeport, Nebraska
Hemingford Banshares, Inc.,
Hemingford, Nebraska
Hyannis Banshares, Inc.,
Hyannis, Nebraska
American National Bank,
Ponca City, Oklahoma
Reserve
Bank
Effective
date
Kansas City
August 10, 1989
Kansas City
August 9, 1989
Chicago
August 9, 1989
Richmond
August 18, 1989
Atlanta
August 11, 1989
Atlanta
August 8, 1989
First Bank of Crestview,
Crestview, Florida
Great Lakes Financial
Resources, Inc.,
Blue Island, Illinois
Atlanta
August 4, 1989
Chicago
August 11, 1989
Exchange Holding, Inc.,
El Dorado, Kansas
First Bancorp of Springfield, Inc.,
Springfield, Kentucky
Comanche Bancshares, Inc.,
Coldwater, Kansas
Oketo Bancshares, Inc.,
Marysville, Kansas
GOLDCrest Bank,
Bethesda, Maryland
First National Bank of Oelwein,
Oelwein, Iowa
BP Corporation,
Minneapolis, Minnesota
Litchville State Bank,
Litchville, North Dakota
Kansas City
July 31, 1989
St. Louis
July 27, 1989
Kansas City
August 14, 1989
Richmond
August 14, 1989
Chicago
July 31, 1989
Minneapolis
August 2, 1989
Bank of Palatine,
Palatine, Illinois
Heritage International Bank, Inc.,
Bethesda, Maryland
Bryan Bank & Trust,
Richmond Hill, Georgia
Vanguard Banks, Inc.,
Valparaiso, Florida
724
Federal Reserve Bulletin • October 1989
Section 3—Continued
Applicant
Mackinaw Valley Financial
Services, Inc.,
Mackinaw, Illinois
Marshall & Ilsley Corporation,
Milwaukee, Wisconsin
Mercantile Bancshares, Inc.,
Jonesboro, Arkansas
Merchant Bank Corporation,
Atlanta, Georgia
Merchant House,
' Santa Ana, California
Miami Corporation,
Chicago, Illinois
Minonk Bancshares, Inc.,
Minonk, Illinois
North Linn Corporation,
Coggon, Iowa
Oelwein Bancorporation,
Minneapolis, Minnesota
ONBANCorp, Inc.,
Syracuse, New York
PINNACLE BANC GROUP,
Inc.,
Oak Brook, Illinois
Plain view Holding Company,
Plain view, Nebraska
Security Exchange Bancorp.,
Inc.,
Duncan, Oklahoma
South Banking Company,
Alma, Georgia
SouthTrust Corporation,
Birmingham, Alabama
Stone County National
Bancshares, Inc.,
Crane, Missouri
Teton Bancshares, Inc.,
Fairfield, Montana
Bank(s)
Reserve
Bank
Effective
date
First Security Bank,
Mackinaw, Illinois
Chicago
August 11, 1989
First National Bank of Cudahy,
Cudahy, Wisconsin
North Arkansas Bancshares, Inc.,
Jonesboro, Arkansas
Mammoth Investment and Credit
Corporation, Inc.,
Mammoth Spring, Arkansas
The Merchant Bank of Atlanta,
Atlanta, Georgia
PNB Financial Group,
Newport Beach, California
Northwest Financial Corp.,
Chicago, Illinois
Citizens Group, Inc.,
Toluca, Illinois
Linn County State Bank,
Coggon, Iowa
Iowa Financial Bancorporation,
Minneapolis, Minnesota
Iowa State Savings Bank,
Clinton, Iowa
Onondaga Savings Bank,
Syracuse, New York
S B H Corp.,
Silvis, Illinois
Chicago
August 4, 1989
St. Louis
July 27, 1989
Atlanta
August 21, 1989
San Francisco
August 10, 1989
Chicago
August 21, 1989
Chicago
July 27, 1989
Chicago
July 31, 1989
Chicago
July 31, 1989
New York
August 14, 1989
Chicago
July 31, 1989
Farmers National Bank,
Pilger, Nebraska
Deshler State Company,
Deshler, Nebraska
American National Bank of
Duncan,
Duncan, Oklahoma
Georgia Peoples Bankshares,
Inc.,
Baxley, Georgia
Florida Community Banks, Inc.,
Bonifay, Florida
Florida Central Banks, Inc.,
Chipley, Florida
Stone County National Bank,
Crane, Missouri
Kansas City
August 1, 1989
Kansas City
August 4, 1989
Atlanta
August 18, 1989
Atlanta
August 14, 1989
St. Louis
July 25, 1989
Minneapolis
August 24, 1989
Choteau Bancorporation, Inc.,
Choteau, Montana
Legal Developments
Section 3—Continued
Applicant
Wilkinson Banking Corporation,
Greenwood, Arkansas
Withee Bank Shares, Inc.,
Withee, Wisconsin
Bank(s)
Farmers Bank,
Greenwood, Arkansas
State Bank of Withee,
Withee, Wisconsin
Reserve
Bank
Effective
date
St. Louis
July 28, 1989
Chicago
August 8, 1989
Section 4
Applicant
Barclays PLC,
London, England
Barclays Bank PLC,
London, England
BayBanks, Inc.,
Boston, Massachusetts
Chemical Banking Corporation,
New York, New York
Manufacturers Hanover
Corporation,
New York, New York
National Westminster Bank PLC,
London, England
NatWest Holdings, Inc.,
New York, New York
Northeast Bancorp, Inc.,
New Haven, Connecticut
The Bank of New York
Company, Inc.,
New York, New York
The Chase Manhattan
Corporation,
New York, New York
The Hongkong and Shanghai
Banking Corporation,
Hong Kong, B.C.C.
Kellett NV,
Curacao, Netherlands Antilles
HSBC Holdings BV,
Amsterdam, the Netherlands
Marine Midland Banks, Inc.,
Buffalo, New York
Comerica Incorporated,
Detroit, Michigan
First Bank System, Inc.,
Minneapolis, Minnesota
Home Interstate Bancorp,
Signal Hill, California
Logansport Bancorp, Inc.,
Indianapolis, Indiana
Nonbanking
Activity/Company
Reserve
Bank
Effective
date
to engage in data processing and
related activities
New York
August 14, 1989
Bloomfield Mortgage
Corporation,
Southfield, Michigan
Swanson Insurance Associates,
Billings, Montana
Bancorp Capital Group, Inc.,
Signal Hill, California
Skyline Village,
Corunna, Indiana
Chicago
July 31, 1989
Minneapolis
August 11, 1989
San Francisco
August 11, 1989
Chicago
July 27, 1989
725
726
Federal Reserve Bulletin • October 1989
Section 3—Continued
Nonbanking
Activity/Company
Applicant
Security Pacific Corporation,
Los Angeles, California
Society for Savings Bancorp, Inc.
Hartford, Connecticut
APPLICATIONS
APPROVED
By Federal Reserve
General Electric Capital
Corporation,
Stamford, Connecticut
CADRE, Inc.,
Avon, Connecticut
UNDER BANK MERGER
Reserve
Bank
Effective
date
San Francisco
August 21, 1989
Boston
August 15, 1989
ACT
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
BancFirst,
Oklahoma City, Oklahoma
First Bank of Crestview,
Crestview, Florida
First Community Bank, Inc.,
Princeton, West Virginia
PENDING CASES INVOLVING
Reserve
Bank
Bank(s)
Applicant
The Liberty State Bank of
Tahlequah,
Tahlequah, Oklahoma
First Interim Bank,
Crestview, Florida
Cherry River National Bank,
Rich wood, West Virginia
THE BOARD OF
Effective
date
Kansas City
July 27, 1989
Atlanta
August 4, 1989
Richmond
July 28, 1989
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.
CB&T Bancshares, Inc. v. Board of Governors, No.
89-1394 (D.C. Cir., filed June 21, 1989).
MCorp v. Board of Governors, No. 89-1677 (S.D.
Tex. filed May 2, 1989).
Independent Insurance Agents of America, Inc. v.
Board of Governors, No. 89-4030 (2d Cir., filed
March 9, 1989).
Securities Industry Association v. Board of Governors,
No. 89-1127 (D.C. Cir. filed February 16, 1989).
American Land Title Association v. Board of Governors, No. 88-1872 (D.C. Cir., filed December 16,
1988).
MCorp v. Board of Governors, No. CA3-88-2693-F
(N.D. Tex., filed October 28, 1988).
White v. Board of Governors, No. CU-S-88-623-RDF
(D. Nev., filed July 29, 1988).
VanDyke v. Board of Governors, No. 88-5280 (8th
Cir., filed July 13, 1988).
Baugh v. Board of Governors, No. C88-3037 (N.D.
Iowa, filed April 8, 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).
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).
A1
Financial and Business Statistics
N O T E . The following
tables may have some
discontinuities in historical data for some series
beginning with the March 1989 issue: 1.10, 1.17,
1.20, 1.21, 1.22, 1.23, 1.24, 1.25, 1.26,
1.28,1.30,
1.31, 1.32,1.35, 1.36, 1.37, 1.39, 1.40,1.41,
1.42,
1.43, 1.45,1.46, 1.47, 1.48, 1.50, 1.53, 1.54, 1.55,
1.56, 2.11, 2.14, 2.15, 2.16, 2.17, 3.14, and 3.21.
For a more detailed explanation of the changes,
see the announcement
on pages 288-89 of the
April 1989
BULLETIN.
CONTENTS
COMMERCIAL BANKING
Domestic
ALL Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
Financial
Statistics
INSTITUTIONS
WEEKLY REPORTING COMMERCIAL
MONEY
STOCK AND BANK
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
A19
A20
A21
A22
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
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
A l l Maturity distribution of loan and security
holdings
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
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
MONETARY
BANKS
CREDIT
A28
A29
A30
A30
FINANCE
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types
and ownership
A31 U.S. government securities
dealers—Transactions
2
Federal Reserve Bulletin • October 1989
A32 U.S. government securities dealers—Positions
and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding
SECURITIES MARKETS AND
CORPORATE
FINANCE
A53 Gross national product and income
A54 Personal income and saving
International
SUMMARY
A34 New security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales
and asset position
A3 5 Corporate profits and their distribution
A35 Total nonfarm business expenditures on new
plant and equipment
A36 Domestic finance companies—Assets and
liabilities and business credit
Statistics
STATISTICS
A55
A56
A56
A56
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A57 Foreign branches of U.S. banks—Balance
sheet data
A59 Selected U.S. liabilities to foreign official
institutions
REPORTED BY BANKS
REAL
ESTATE
A37 Mortgage markets
A3 8 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A39 Total outstanding and net change
A40 Terms
A41 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
A44 Summary of credit market debt outstanding
A45 Summary of credit market claims, by holder
SELECTED
Nonfinancial
STATES
A59
A60
A62
A63
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A63 Banks' own claims on unaffiliated foreigners
A64 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
BUSINESS
ENTERPRISES IN THE UNITED STATES
FLOW OF FUNDS
Domestic
IN THE UNITED
Statistics
A65 Liabilities to unaffiliated foreigners
A66 Claims on unaffiliated foreigners
SECURITIES HOLDINGS
AND
TRANSACTIONS
A67 Foreign transactions in securities
A68 Marketable U.S. Treasury bonds and
notes—Foreign transactions
MEASURES
A46 Nonfinancial business activity—Selected
measures
A47 Labor force, employment, and unemployment
A48 Output, capacity, and capacity utilization
A49 Industrial production—Indexes and gross value
A51 Housing and construction
A52 Consumer and producer prices
INTEREST AND EXCHANGE
RATES
A69 Discount rates of foreign central banks
A69 Foreign short-term interest rates
A70 Foreign exchange rates
A71 Guide to Tabular
Statistical
Releases,
Tables
Presentation,
and
Special
Money Stock and Bank Credit
A3
1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES
Annual rates of change, seasonally adjusted in percent1
1989
1988
1989
Monetary and credit aggregates
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 3
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontrqnsaction
10 In M2 5
11 In M3 only 6
Q3
Q4
Ql
Q2'
Mar.
Apr.'
May'
June'
July
3.1
2.9
1.3
6.5
-.8
-1.5
5.3
4.8
-4.2
-4.4
.0
4.6
-8.7
-7.6
-10.2
1.5
-8.1
-4.3
-14.9
4.6
-7.8
-4.3
-17.9
.3
-14.6
-20.0
-3.2
-1.5
-8.0
-5.5
-3.4
3.1
7.2
6.0
24.2
4.0
5.2
3.8
5.6
7.1
8.6
2.3
3.6
4.8
5.4
9.1
-.4
1.8'
3.7
4.8
8.2
-5.6
1.0
2.7
3.6
7.5
-1.7
3.5'
6.5'
8.7'
7.5
-4.8
.7
2.2
4.5
7.2
-15.1
-3.6
-1.5
-1.1
7.6
-4.7
6.0
5.4
.4
6.9
11.0
12.5
9.6
n.a.
n.a.
3.3
12.2
4.1
9.0
2.6
10.3r
3.3
8.9
5.3'
2.6
7.6
.3
5.9
9.5
3.4
13.0
-.7
7.9
11.6
18.2
4.0
18.0
13.0
-3.7
22.5
18.1
-14.2
29.0
17.9
-10.8
28.6
23.0
-19.1
34.3
22.2
-20.4
28.3
10.1
-6.6
12.0
2.0
3.4
7.5
5.6
2.1
5.4
3.9
-2.5
6.6
8.0 r
-7.7
4.3
1.3'
-19.0
14.1
5.9
-10.7
3.4'
-.3
-25.6
17.4
12.5
-26.3
22.5
8.0
-9.1
15.4
2.0
-5.5
9.0
-8.3
7.1
9.1
7.8
9.5
7.7
8.4
6.6
7.8
12.5
5.9
5.1
7.9
2.9
9.1
3.2
8.0
n.a.
n.a.
2
institutions
components
Time and savings deposits
Commercial banks
Savings
Small-denomination time
Large-denomination time 9 ' 10
Thrift institutions
15
Savings
16 Small-denomination time
17 Large-denomination time 9
12
13
14
Debt components4
18 Federal
19 Nonfederal
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
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.
A4
DomesticNonfinancialStatistics • October 1989
1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1989
1989
Factors
May
June'
July
June 14
267,629
263,924
262,0%
259,907
262,225
271,098
234,995
230,783
4,212
8,387
6,654
1,733
227,688
227,291
397
6,754
6,654
100
222,972
225,637
225,637
160
6,674
6,637
37
224,643
224,643
6,654
6,654
0
0
0
6,654
6,654
231,898
230,621
1,277
6,987
6,654
333
1,717
801
21,729
1,495
1,279
26,709
11,061
8,518
19,188
685
742
31,024
11,066
8,518
19,245
2,255
1,266
24,094
11,060
8,518
19,181
939
1,611
28,378
11,061
8,518
19,191
992
1,564
29,657
11,061
8,518
19,201
245,574
486
247,860
249,824
466
248,280
490
247,710
488
14,126
227
10,072
251
6,067
229
5,397
253
1,855
528
1,924
303
1,970
262
1,778
253
June 21
June 28
July 5
July 12
July 19
267,270
266,156
260,162
229,392
228,967
425
6,750
6,654
96
227,176
226,467
709
6,816
6,654
162
221,426
221,426
773
314
30,041
11,064
8,518
19,211
661
1,163
30,340
11,067
8,518
19,221
687
522
30,873
11,066
8,518
19,239
247,298
486
249,619
475
251,361
473
250,131
464
9,274
242
18,343
215
11,214
249
6,308
236
5,155
210
1,929
298
1,957
328
2,302
239
2,102
226
1,673
228
July 26
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit
2 U.S. government securities1
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 account..
14 Treasury currency outstanding
0
11,061
6,703
19,049
0
222,812
0
0
0
0
0
0
0
0
6,654
6,654
0
0
ABSORBING RESERVE F U N D S
15 Currency in circulation
16 Treasury cash holdings2
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
8,480
8,101
8,029
8,261
8,170
8,217
8,166
8,331
7,915
33,166
33,692
34,085
33,953
32,885
33,033
33,798
35,923
33,207
End-of-month figures
Wednesday figures
1989
1989
May
June'
July
June 14
23 Reserve Bank credit
256,669
269,037
259,145
262,688
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 account...
36 Treasury currency outstanding
223,535
223,535
231,767
231,767
218,676
218,676
227,654
227,654
June 28
July 5
July 12
July 19
268,271
271,518
230,162
230,162
231,062
231,062
263,390
273,579
258,897
224,359
224,359
233,198
228,237
4,961
7,791
6,654
1,137
219,810
219,810
July 26
SUPPLYING RESERVE F U N D S
0
0
0
0
0
0
0
0
6,654
6,654
6,654
6,654
6,609
6,609
6,654
6,654
6,654
6,654
6,654
6,654
6,654
6,654
2,033
2,064
22,383
11,060
8,518
19,073
841
-203
29,978
11,063
8,518
19,211
594
351
32,915
11,066
8,518
19,309
2,384
1,701
24,295
11,060
8,518
19,181
832
1,640
28,983
0
0
0
8,518
19,191
1,759
1,338
30,705
11,062
8,518
19,201
665
1,322
30,390
11,066
8,518
19,211
687
1,060
30,843
11,066
8,518
19,221
632
1,233
30,569
11,067
8,518
19,239
247,525
488
249,139
474
248,637
451
248,164
490
247,489
487
247,936
481
250,933
475
251,209
464
249,646
464
429
12,153
275
5,312
371
5,281
293
19,822
203
19,244
287
6,751
215
5,431
184
4,984
242
1,616
524
1,616
229
1,592
236
1,616
242
1,598
267
1,598
327
1,600
228
1,591
206
1,588
254
0
0
0
0
0
0
0
0
0
0
11,061
0
0
0
0
6,654
6,654
ABSORBING RESERVE F U N D S
37 Currency in circulation
38 Treasury cash holdings2
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'
7,513
8,178
8,693
8,078
7,984
7,962
7,898
8,071
7,655
33,553
35,765
32,747
37,280
29,190
32,463
34,085
45,227
32,887
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.
Components may not add to totals because of rounding.
Money Stock and Bank Credit
1.12 RESERVES AND BORROWINGS
A5
Depository Institutions1
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
Vault4
Surplus
Total reserves 6
Required reserves
1
Excess reserve balances at Reserve Banks
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
1986
1987
1988
1989
Dec.
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
37,360
24,077
22,199
1,878
59,560
58,191
1,369
827
38
303
37,673
26,185
24,449
1,736
62,123
61,094
1,029
777
93
483
37,830
27,197
25,909
1,288
63,739
62,699
1,040
1,716
130
1,244
36,475
28,376
26,993
1,383
63,468
62,323
1,145
1,662
76
1,046
32,834
29,776
27,859
1,917
60,693
59,539
1,154
1,487
97
1,050
34,623
27,059
25,589
1,470
60,212
59,255
957
1,813
139
1,334
35,841
26,746
25,456
1,290
61,288
60,511
776
2,289
213
1,707
33,199
27,166
25,712
1,454
58,911
57,881
1,031
1,720
345
1,197
33,852
27,151
25,735
1,416
59,587
58,682
905
1,490
431
917
33,904
27,851
26,352
1,500
60,255
59,290
966
694
497
106
Biweekly averages of daily figures for weeks ending
1989
11
12
13
14
15
16
17
18
19
20
2
Reserve balances with Reserve Banks
Total vault cash
Vault4
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
Apr. 19
May 3
May 17
May 31
June 14
June 28
July 12r
July 26
Aug. 9
Aug. 23
36,239
26,339
25,174
1,166
61,413
61,190
223
2,582
190
1,970
35,863
27,106
25,723
1,383
61,586
60,345
1,241
1,968
265
1,387
33,864
26,644
25,352
1,292
59,216
58,357
859
1,739
336
1,206
31,964
27,701
26,071
1,631
58,034
56,877
1,158
1,649
373
1,148
34,608
26,607
25,301
1,306
59,909
59,012
897
2,126
388
1,657
32,950
27,630
26,104
1,526
59,054
58,154
901
965
467
287
34,866
27,607
26,191
1,416
61,057
60,067
990
717
483
146
33,410
27,948
26,432
1,517
59,842
58,807
1,035
681
509
90
32,977
28,166
26,514
1,653
59,491
58,778
713
676
497
55
32,627
28,852
27,213
1,639
59,840
58,737
1,104
753
489
44
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 1989
1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Member Banks1
Averages of daily figures, in millions of dollars
1988 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
Aug. 22
Aug. 29
Sept. 5
Sept. 12
Sept. 19
Sept. 26
Oct. 3
Oct. 10
Oct. 17
66,871
10,102
64,904
10,187
69,394
10,001
69,451
9,714
65,767
9,443
62,866
9,450
66,221
8,919
71,087
9,090
68,324
8,970
26,570
6,700
26,952
6,579
27,114
6,629
29,922
6,581
26,636
6,895
27,000
6,273
25,144
6,081
28,535
6,340
29,991
6,386
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
16,304
12,587
15,212
13,177
15,337
12,365
15,072
11,524
14,5%
13,136
13,683
13,293
12,927
12,723
13,238
12,699
13,880
12,221
27,452
10,559
28,070
10,701
27,866
10,279
27,761
9,691
27,123
10,429
27,616
10,341
27,876
9,629
26,825
10,089
28,236
9,594
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 2
35,147
14,952
34,797
14,010
39,559
14,263
34,356
13,677
37,066
14,421
37,013
13,079
39,869
13,513
37,509
14,007
38,388
15,296
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
A7
1.14 FEDERAL RESERVE BANK INTEREST RATES
Percent per year
Current and previous levels
Extended credit 2
Adjustment credit
and
Seasonal credit 1
Federal Reserve
Bank
On
8/24/89
Effective
date
7
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
Boston
N e w York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco . . .
7
After 30 days of borrowing 3
First 30 days of borrowing
Previous
rate
On
8/24/89
Effective
date
7
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
2/24/89
6V1
2/24/89
2/24/89
2/24/89
2/24/89
2/27/89
2/24/89
6V1
2/24/89
2/24/89
2/24/89
2/24/89
2/27/89
2/24/89
7
Previous
rate
6
6
On
8/24/89
Effective
date
Previous
rate
9.35
8/24/89
8/24/89
8/24/89
8/24/89
8/24/89
8/24/89
9.20
Vi
Vl
9.35
8/24/89
8/24/89
8/24/89
8/24/89
8/24/89
8/24/89
Effective date
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
8/10/89
9.20
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
Range (or
level)—
All F.R.
Banks
6
Vl
Vl
kVi-l
6-6
6
7
7-7'A
m
7 3 /4
F.R.
Bank
of
N.Y.
6
6
6
7
7
Vi
Vi
IV*
7V4
8
8
8Vi-9Vi
9
9
9
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
10
10-10W
10
10
11
11-12
12
11
1980—Feb. 15
19
May 29
30
June 13
16
12-13
13
12-13
12
11-12
11
13
13
13
12
11
11
IOV2
lOVi-11
1980—July
28
29
Sept. 26
Nov. 17
Dec. 5
1981—May
7 3 /4
8
8-8Vi
SVi
Vi
Effective date
Vi
%Vi
Vi
Vi
11
12
12
Vl
Nov.
Dec.
5
8
2
6
4
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 for 1986 and 1987 but was not renewed for
1988.
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
somewhat above rates on market sources of funds ordinarily will be charged, but
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.
9
13
Nov. 21
26
Dec. 24
m-9
9
SVi-9
m
8
9
9
8 Vl
8 Vl
8
13-14
14
13-14
13
12
14
14
13
13
12
1985—May 20
24
lVi-%
IVi
7 Vi
IVi
7
10
Apr. 21
July 11
Aug. 21
22
1-lVi
1
6W-7
6
5Vi-6
5 Vi
7
7
6 Vl
6
5 Vl
5 Vl
11 Vi—12
UVi
11-llto
11
lOVi
10-10Vt>
10
9Vi-10
9 Vi
9-9V2
9
SVl-9
ZVl-9
8 Vl
1 IVi
im
11
11
10
10
9 Vi
9 Vi
9
9
9
&Vi
m
1986—Mar.
1987—Sept.
4
11
5^-6
6
6
6
1988—Aug.
9
11
6 - 6 Vi
6 Vl
6 Vl
6 Vi
6Vl-7
1
7
7
7
7
1989—Feb. 24
27
In effect Aug. 24, 1989
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 Nov. 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 Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • October 1989
1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1
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-$41.5 million
More than $41.5 million . . .
Effective date
12/20/88
12/20/88
Nonpersonal time deposits5
By original maturity
Less than 11/2 years
1 Vl 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, 1988. 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. No corresponding adjustment is to be made in
the event of a decrease. On Dec. 20, 1988, the exemption was raised from $3.2
million to $3.4 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. 20,
1988 for institutions reporting quarterly and Dec. 27, 1988 for institutions
reporting weekly, the amount was increased from $40.5 million to $41.5 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
A9
1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1
Millions of dollars
1989
1988
Type of transaction
1986
1987
1988
Dec.
Jan.
Feb.
Apr.
Mar.
May
June
U . S . TREASURY SECURITIES
Outright transactions (excluding matched
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
7
8
9
22,604
2,502
0
1,000
18,983
6,051
0
9,029
8,223
587
0
2,200
1,125
0
0
0
0
154
0
600
0
3,688
0
1,600
0
0
0
0
3,077
0
0
0
311
321
0
1,200
0
571
0
1,200
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
190
0
18,674
-20,180
0
3,659
300
21,504
-20,388
70
2,176
0
23,854
-24,588
0
1,084
0
1,750
-1,703
0
0
0
620
-2,703
0
0
0
5,418
-2,308
0
0
0
2,646
-2,322
0
172
0
1,657
-110
0
0
0
2,863
-3,628
0
0
0
1,828
-1,434
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
893
0
-17,058
16,985
10,231
452
-17,975
18,938
5,485
800
-17,720
22,515
1,824
0
-1,750
1,703
0
3
-541
2,492
0
225
-5,319
2,008
0
0
-2,646
2,322
1,436
0
-1,532
0
0
75
-2,036
3,328
0
0
-1,828
1,434
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
236
0
-1,620
2,050
2,441
0
-3,529
950
1,579
175
-5,946
1,797
562
0
0
0
0
20
-79
212
0
0
-100
200
0
0
0
0
287
0
-125
110
0
0
258
200
0
0
0
0
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
158
0
0
1,150
1,858
0
0
500
1,398
0
-188
275
432
0
0
0
0
0
0
0
0
0
0
100
0
0
0
0
284
0
0
0
0
0
-1,086
100
0
0
0
0
24,081
2,502
1,000
37,170
6,803
9,099
18,863
1,562
2,200
5,028
0
0
0
177
600
0
3,913
1,600
0
0
0
5,255
0
0
311
3%
1,200
0
571
1,200
927,999
927,247
950,923
950,935
1,168,484
1,168,142
93,650
93,584
94,204
94,252
110,393
112,472
83,677
82,821
77,349
78,259
123,029
113,041
128,139
138,141
170,431
160,268
314,621
324,666
152,613
151,497
15,575
14,815
17,208
21,969
0
0
0
0
22,244
12,547
31,419
41,117
6,203
6,203
29,988
11,234
15,872
5,721
-5,489
-3,434
-856
15,863
-20,971
8,232
0
0
398
0
0
276
0
0
587
0
0
135
0
0
148
0
0
40
0
0
0
0
0
125
0
0
0
0
0
0
31,142
30,521
80,353
81,350
57,259
56,471
7,672
6,853
8,980
11,081
0
0
0
0
7,207
3,366
12,732
16,573
1,666
1,666
35 Net change in federal agency obligations
222
-1,274
198
683
-2,249
-40
0
3,716
-3,841
0
36 Total net change in System Open Market
Account
30,212
9,961
16,070
6,404
-7,738
-3,474
-856
19,579
-24,812
8,232
All maturities
22 Gross purchases
23 Gross sales
24 Redemptions
Matched transactions
25 Gross sales
26 Gross purchases
2
Repurchase
agreements
27 Gross purchases
28 Gross sales
29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase
agreements2
33 Gross purchases
34 Gross sales
1. Sales, redemptions, and negative figures reduce holdings of the System Open
Market Account; all other figures increase such holdings. Details may not add to
totals because of rounding.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
A10
DomesticNonfinancialStatistics • October 1989
1.18 FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements1
Millions of dollars
Account
June 28
July 5
Wednesday
End of month
1989
1989
July 12
July 19
July 26
May
June
July
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
i
Loans
4
To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Federal agency obligations
Bought outright
7
8
Held under repurchase agreements
U.S. Treasury securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total bought outright'
13 Held under repurchase agreements
14 Total U.S. Treasury securities
15 Total loans and securities
16 Items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies 3
19 All other 4
20 Total assets
11,062
8,518
449
11,066
8,518
428
11,066
8,518
423
11,067
8,518
429
11,067
8,518
443
11,060
8,518
432
11,063
8,518
445
11,066
8,518
450
1,759
0
0
665
0
0
687
0
0
632
0
0
622
0
0
2,033
0
0
840
0
0
594
0
0
6,654
0
6,654
0
6,654
1,137
6,654
0
6,609
0
6,654
0
6,655
0
6,609
0
108,326
92,322
30,414
231,062
0
231,062
101,632
92,313
30,414
224,359
0
224,359
105,511
92,313
30,414
228,237
4,961
233,198
97,0%
92,300
30,414
219,810
0
219,810
97,184
92,300
30,414
219,897
0
219,897
100,799
92,322
30,414
223,535
0
223,535
109,031
92,322
30,414
231,767
0
231,767
95,962
92,300
30,414
218,676
0
218,676
239,475
231,678
241,676
227,095
227,128
232,222
239,263
225,879
6,740
767
6,297
766
6,990
767
7,374
767
6,234
767
10,442
761
6,550
767
4,409
768
18,956
10,982
19,460
10,164
19,486
10,590
19,580
10,221
20,618
10,709
13,656
7,966
19,213
10,001
21,529
10,618
296,949
288,377
299,516
285,051
285,483
285,057
295,816
283,237
LIABILITIES
21 Federal Reserve notes
Deposits
To depository institutions
23
U.S. Treasury—General account
24
Foreign—Official accounts
25
Other
229,666
232,625
232,876
231,301
230,300
229,372
230,847
230,229
22
34,061
19,244
287
327
35,685
6,751
215
228
-46,818
5,431
184
206
34,475
4,984
242
254
36,555
4,925
200
483
33,553
5,288
429
524
37,381
12,153
275
228
34,339
5,312
371
236
26 Total deposits
53,919
42,879
52,638
39,954
42,164
39,794
50,040
40,258
5,402
3,258
4,975
3,102
5,930
3,355
6,141
2,925
5,429
2,881
8,378
3,212
6,751
3,272
4,057
2,841
292,245
283,581
294,800
280,321
280,774
280,756
290,911
277,384
2,145
2,112
447
2,151
2,112
533
2,158
2,112
446
2,162
2,112
456
2,154
2,112
443
2,142
2,081
78
2,146
2,117
649
2,156
2,112
1,585
33 Total liabilities and capital accounts
296,949
288,377
299,516
285,051
285,483
285,057
295,816
283,237
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international accounts
233,119
231,321
232,347
234,831
237,112
234,667
362,000
236,847
27 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding issued to bank
36
LESS: Held by bank
37
Federal Reserve notes, net
Collateral held against notes net:
38
Gold certificate account
39
Special drawing rights certificate account
40
Other eligible assets
41
U.S. Treasury and agency securities
273,315
43,649
229,666
272,972
40,348
232,625
273,666
40,790
232,876
274,195
42,895
231,301
274,225
43,925
230,300
271,562
42,190
229,372
272,983
42,135
230,847
274,736
44,507
230,229
11,062
8,518
0
210,086
11,066
8,518
0
213,041
11,066
8,518
0
213,292
11,067
8,518
0
211,716
11,067
8,518
0
210,716
11,060
8,518
0
209,794
11,063
8,518
0
211,266
11,066
8,518
0
210,645
42 Total collateral
229,666
232,625
232,876
231,301
230,300
229,372
230,847
230,229
1. Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover. Components may not add to totals because of
rounding.
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
All
Maturity Distribution of Loan and Security Holdings1
Millions of dollars
Type and maturity groupings
June 28
July 5
Wednesday
End of month
1989
1989
July 12
July 19
July 26
May 31
June 30
July 31
1 Loans—Total
Within 15 days
2
3
16 days to 90 days
91 days to 1 year
4
991
926
65
0
665
348
317
0
687
356
331
0
632
553
77
0
622
545
77
0
2,033
1,940
93
0
1,495
1,339
156
0
594
415
179
0
5 Acceptances—Total
Within 15 days
6
16 days to 90 days
7
8
91 days to 1 year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
231,062
12,757
50,726
74,975
52,786
13,511
26,306
224,359
10,953
48,226
72,978
52,393
13,502
26,306
233,198
11,914
53,626
75,457
52,393
13,502
26,306
219,810
6,880
49,651
71,076
52,274
13,623
26,306
219,897
8,743
47,967
70,984
52,274
13,623
26,306
223,535
4,691
49,365
76,876
52,786
13,511
26,306
231,767
8,812
56,198
74,546
52,393
13,512
26,306
218,676
9,144
48,395
69,625
51,583
13,623
26,306
6,654
152
642
1,289
3,386
996
189
6,654
75
744
1,314
3,336
996
189
7,791
1,242
728
1.310
3.311
1,011
189
6,654
206
627
1.310
3.311
1,011
189
6,609
101
657
1,396
3,249
1,016
189
6,654
347
473
1,324
3,352
969
189
6,654
152
642
1,289
3,386
996
189
6,609
101
721
1,332
3,249
1,016
189
9 U.S. Treasury securities—Total
10
Within 15 days 2
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 2
18
16 days to 90 days
19 91 days to 1 year
20
Over 1 year to 5 years
21
Over 5 years to 10 years
22
Over 10 years
1. Holdings under repurchase agreements are classified as maturing within 15
days in accordance with maximum maturity of the agreements.
NOTE: Components may not add to totals because of rounding,
A12
DomesticNonfinancialStatistics • October 1989
1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1989
1988
Item
1985
Dec.
1987
Dec.
1986
Dec.
1988
Dec.
Dec.
Jam.
Feb.
Mar.
Apr.
May
June
July
Seasonally adjusted
ADJUSTED FOR
CHANGES ' N RESERVE REQUIREMENTS 2
1 Total reserves3
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
48.49
58.14
58.69
60.71
60.71
60.37
60.26
59.85
59.46
58.74
58.35
58.70
47.17
47.67
47.44
219.51
57.31
57.62
56.77
241.45
57.92
58.40
57.66
257.99
58.99
60.23
59.67
275.50
58.99
60.23
59.67
275.50
58.71
59.75
59.23
276.78
58.77
59.82
59.11
277.55
58.04
59.38
58.90
278.61
57.17
58.88
58.69
278.67
57.02
58.22
57.71
278.33
56.86
57.78
57.44
279.06
58.01
58.11
57.73
279.98
Not seasonally adjusted
6 Total reserves 3
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit
Required reserves
Monetary base
49.59
59.46
60.06
62.21
62.21
62.07
59.37
58.94
60.01
57.72
58.41
58.96
48.27
48.77
48.53
222.73
58.64
58.94
58.09
245.25
59.28
59.76
59.03
262.08
60.50
61.74
61.17
279.71
60.50
61.74
61.17
279.71
60.40
61.45
60.92
277.92
57.88
58.93
58.22
274.36
57.13
58.46
57.98
275.62
57.72
59.43
59.23
278.11
56.00
57.20
56.69
277.49
56.92
57.84
57.51
280.18
58.26
58.37
57.99
282.07
48.14
59.56
62.12
63.74
63.74
63.47
60.69
60.21
61.29
58.91
59.59
60.26
46.82
47.32
47.08
223.53
58.73
59.04
58.19
247.71
61.35
61.83
61.09
266.16
62.02
63.27
62.70
283.18
62.02
63.27
62.70
283.18
61.81
62.85
62.32
281.31
59.21
60.26
59.54
277.66
58.40
59.73
59.25
278.94
59.00
60.71
60.51
281.52
57.19
58.39
57.88
280.54
58.10
59.01
58.68
283.27
59.56
59.67
59.29
285.36
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS
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 helpdepository institutions deal with sustained liquidity pressures. Because there isnot
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
A13
1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES 1
Billions of dollars, averages of daily figures
1989'
2
1985
Dec.
1986
Dec.
1987
Dec.
1988
Dec.
May
June
July
783.1
3,080.0
3,956.2
4,742.1
9,285.1
773.3
3,070.7
3,951.2
4,737.6
9,344.0
770.3
3,086.0
3,969.0
4,739.2
9,397.4
777.3
3,118.1
4,000.6
n.a.
n.a.
Apr.
Seasonally adjusted
1
2
3
4
5
Ml
M2
M3
L
Debt
6
7
8
9
Ml components
Currency
Travelers checks
Demand deposits
Other checkable deposits
620.5
2,567.4
3,201.7
3,830.6
6,733.3
725.9
2,811.2
3,494.9
4,137.1
7,596.9
752.3
2,909.9
3,677.6
4,340.2
8,310.7
167.8
5.9
267.3
179.5
180.5
6.5
303.2
235.8
196.4
7.1
288.3
260.4
211.8
7.6
288.6
282.3
215.9
7.3
281.4
278.5
216.4
7.3
278.2
271.3
217.4
7.2
275.0
270.7
218.0
7.1
279.0
273.2
1,946.9
634.3
2,085.3
683.7
2,157.7
767.6
2,279.2
844.9r
2,296.9
876.2
2,297.4
880.5
2,315.7
883.1
2,340.8
882.5
790.3
3,069.4
3,914.3r
4,675.0'
9,052.1
10
11
Nontransactions components
In M2
In M3 only 8
12
13
Savings deposits 9
Commercial Banks
Thrift institutions
125.0
176.6
155.8
215.2
178.5
237.8
192.5
238.8
185.6
227.3
182.4
222.3
181.4
220.6
181.9
219.6
14
15
Small-denomination time deposits 10
Commercial Banks
Thrift institutions
383.3
499.2
364.6
489.3
385.3
528.8
443.1
582.2
485.5
597.6
496.9
608.8
501.9
616.6
505.0
621.3
16
17
Money market mutual funds
General purpose and broker-dealer
Institution-only
176.5
64.5
208.0
84.4
221.1
89.6
239.4
87.6
259.1
87.7
258.9
91.6
265.1
95.1
274.6
98.2
285.1
151.5
288.8
150.1
325.4
162.0
364.9
172.9
392.6
175.2
395.9
176.4
396.6
176.7
398.4
175.4
1,585.3
5,147.9
1,805.8
5,791.1
1,957.5
6,353.1
2,114.0
6,938.1
2,171.8
7,113.3
2,177.0
7,167.1
2,182.7
7,214.7
n.a.
n.a.
791.3
3,091.6
3,961.8
4,743.8
9,248.6
767.1
3,061.2
3,941.1
4,726.2
9,310.7
773.8
3,088.8
3,969.6
4,740.2
9,369.5
781.8
3,125.9
4,002.3
n.a.
n.a.
215.1
7.0
283.2
286.0
216.6
7.1
273.3
270.1
218.5
7.5
276.4
271.4
219.7
8.1
281.6
272.5
2,300.3
870.2
2,294.2
879.9
2,315.0
880.8
2,344.1
876.4
18
19
Large-denomination time deposits
Commercial Banks 12
Thrift institutions
20
21
Debt components
Federal debt
Nonfederal debt
11
Not seasonally adjusted
633.5
2,576.2
3,213.3
3,843.7
6,723.5
740.4
2,821.1
3,507.4
4,152.0
7,581.1
766.4
2,918.7
3,688.5
4,354.5
8,292.8
170.2
5.5
276.9
180.9
183.0
6.0
314.0
237.4
199.3
6.5
298.6
262.0
1,942.7
637.1
2,080.7
686.3
2,152.3
769.8
Money market deposit accounts
Commercial Banks
Thrift institutions
332.8
180.7
379.6
192.9
358.8
167.5
352.5
150.3
336.2
135.0
327.0
130.0
328.1
128.8
330.9
129.0
35
36
Savings deposits 9
Commercial Banks
Thrift institutions
123.7
174.8
154.2
212.7
176.6
234.8
190.3
235.6
186.2
227.9
183.6
223.7
183.2
223.3
184.3
223.2
37
38
Small-denomination time deposits 10
Commercial Banks
Thrift institutions
384.0
499.9
365.3
489.8
386.1
529.1
444.1
582.4
483.5
598.5
493.2
605.7
499.6
612.8
504.4
619.7
39
40
Money market mutual funds
General purpose and broker-dealer
Institution-only
176.5
64.5
208.0
84.4
221.1
89.6
239.4
87.6
259.1
87.7
258.9
91.6
265.1
95.1
274.6
98.2
41
42
Large-denomination time deposits 11
Commercial Banks 12
Thrift institutions
285.4
151.8
289.1
150.7
325.8
163.0
365.6
174. V
390.5
173.7
394.7
175.2
395.1
174.8
395.7
173.3
43
44
Debt components
Federal debt
Nonfederal debt
1,583.7
5,139.8
1,803.9
5,777.2
1,955.6
6,337.2
2,111.8
6,925.7
2,155.1
7,093.5
2,159.5
7,151.2
2,165.2
7,204.3
22
23
24
25
26
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency
Travelers checks 4
Demand deposits
Other checkable deposits
31
32
Nontransactions components
M2r.
M3 only 8
3?
34
For notes see following page.
804.4
3,077.1
3,924. l r
4,688.5
9,037.5
214.9
6.9
298.8
283.7
2,272.8
847.0'
n.a.
n.a.
A14
DomesticNonfinancialStatistics • October 1989
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508)
release. Historical data are available from the Monetary and Reserves Projection
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:
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, 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 NOW 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), MMDAs, 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 accounts (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 TURNOVER1
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1988
Bank group, or type of customer
1986
1987
1989
1988
Dec.
Feb.
Mar.
Apr.
May
Seasonally adjusted
DEBITS TO
Demand deposits
1
All insured banks
2
Major New York City banks
Other banks
3
4 ATS-NOW accounts 4
5 Savings deposits
Jan.
188,346.0
91,397.3
96,948.8
2,182.5
403.5
217,116.2
104,496.3
112,619.8
2,402.7
526.5
226,888.4
107,547.3
119,341.2
2,757.7
583.0
245,617.5
111,115.5
134,502.0
3,020.8
640.7
252,226.7
109,875.9
142,350.8
2,976.2
647.4
255,774.3
121,770.1
134,004.2
3,054.9
649.2
249,088.3
111,387.4
137,700.9
3,264.9
675.2
245,230.1
107,808.9
137,421.3
2,986.4
585.5
266,468.1
120,984.1
145,483.9
3,406.5
647.2
556.5
2,498.2
321.2
15.6
3.0
612.1
2,670.6
357.0
13.8
3.1
641.2
2,903.5
376.8
14.7
3.1
698.5
3,140.7
425.3
15.8
3.4
716.3
3,113.7
449.3
15.6
3.5
734.4
3,618.0
425.9
16.0
3.5
721.0
3,393.0
440.4
17.1
3.6
697.5
3,092.2
433.9
15.7
3.2
767.1
3,342.1
467.5
18.2
3.6
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
Savings deposits
Not seasonally adjusted
DEBITS TO
Demand deposits
11 All insured banks
12 Major New York City banks
13 Other banks
14 ATS-NOW accounts 4
15 MMDA
16 Savings deposits
188,506.7
91,500.1
97,006.7
2,184.6
1,609.4
404.1
217,125.1
104,518.8
112,606.2
2,404.8
1,954.2
526.8
227,010.7
107,565.0
119,445.7
2,754.7
2,430.1
578.0
258,119.4
117,470.7
140,648.8
3,163.8
2,940.5
655.6
257,649.6
112,480.2
145,169.4
3,245.1
3,072.5
668.7
231,347.8
110,047.2
121,300.6
2,762.1
2,622.4
573.3
264,581.6
120,202.2
144,379.4
3,228.6
2,636.7
649.6
238,265.6
105,461.7
132,803.9
3,205.2
2,700.2
649.6
274,861.8
121,507.2
153,354.6
3,325.2
2,910.5
637.9
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
641.7
2,901.4
377.1
14.7
6.9
3.1
699.1
3,058.1
425.2
16.3
8.4
3.5
713.7
2,998.6
448.7
16.7
8.9
3.6
683.1
3,255.7
397.8
14.5
7.8
3.1
782.3
3,603.3
473.6
16.9
7.8
3.5
676.6
3,017.6
418.7
16.3
8.1
3.5
805.9
3,482.5
500.9
18.0
9.0
3.5
DEPOSIT TURNOVER
17
18
19
20
21
22
Demand deposits 3
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 4
MMDA
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 1989
1.23 LOANS AND SECURITIES
All Commercial Banks1
Billions of dollars; averages of Wednesday figures
1988
Aug.
Sept.
Oct.
1989
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Seasonally adjusted
1 Total loans and securities
2
2 U.S. government securities
i Other securities
4 Total loans and leases 2
5
Commercial and industrial . . . . .
6
Bankers acceptances held . . .
7
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
lb
Foreign banks
17
Foreign official institutions
18 Lease financing receivables
19 All other loans
2,377.6
2,381.5
2,401.4
2,410.2
2,417.2
2,422.8
2,451.9
2,464.9
2,470.9
2,486.3
2,496.8
2,518.1
350.9
196.5
1,830.1
597.4
4.3
353.1
195.2
1,833.2
598.1
4.1
355.6
196.8
1,848.9
601.6
4.1
358.8
195.9
1,855.6
601.8
4.3
361.4
194.0
1,861.9
601.9
4.1
360.4
189.6
1,872.9
606.6
4.4
361.8
190.4
1,899.7
619.0
4.2
368.8
189.7
1,906.5
617.8
4.0
370.7
187.2
1,913.1
620.6
4.1
373.5
186.4
1,926.5
626.3
4.2
373.8
185.7
1,937.3
624.9
4.2
374.4
184.6
1,959.1
632.2
4.1
593.2
586.5
6.7
643.0
347.7
39.6
594.0
587.2
6.9
650.3
350.2
36.5
597.5
590.9
6.5
659.8
351.6
38.5
597.4
591.3
6.1
665.3
353.0
38.2
597.8
591.8
5.9
672.0
355.5
38.5
602.2
596.6'
5.7
678.9
357.9
37.7
614.8
609.9
4.9
685.6
358.9
44.7
613.7
608.3
5.4
691.8
360.6
43.6
616.6
611.7
4.8'
699.5
362.9
40.0
622.1
616.6
5.4'
705.5
365.4
38.0
620.7
615.2
5.5
712.0
366.0
41.1
628.1
622.2
5.9
719.8
367.0
40.3
31.1
29.6
30.7
29.6
30.4
29.8
30.2
30.3
30.0
30.7
30.3
30.7
30.6
30.7
29.7
30.7
29.2
30.4
29.0
30.3
30.6'
30.3'
31.7
30.4
48.2
8.0
5.1
28.1
52.2
48.0
7.2
5.0
28.5
49.1
48.5
7.6
4.9 r
28.9
47.5
47.7
8.1
4.9
29.1
47.0 r
46.8
7.6
4.9
29.2
44.8'
44.4
7.8
4.8
29.4
44.4
44.5
8.5
4.8
29.6
42.7'
44.6
8.2'
4.8
29.6
45.2'
44.6
8.3
4.9'
29.8
42^
44.6
9.4'
4.9'
30.0
43.1'
44.5
9.3'
4.7
29.9
43.8'
44.3
8.9
4.5
30.3
49.7
Not seasonally adjusted
20 Total loans and securities
2
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 4 .
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
2,370.5
2,378.9
2,392.6
2,409.2
2,429.6
2,430.7
2,453.6
2,462.8
2,473.9
2,487.4
2,500.9
2,511.7
351.2
196.8
1,822.5
593.1
4.3
352.9
195.0
1,831.0
593.3
4.2
352.6
195.6
1,844.4
597.0
4.2
357.5
196.0
1,855.7
599.3
4.3
361.6
193.7
1,874.2
605.0
4.1
362.2
191.7
1,876.9
605.8
4.1
366.3
190.1
1,897.2
618.3
4.1
370.2
188.9
1,903.7
621.1
4.0
370.9
187.2
1,915.9
625.2
4.0
372.6
186.8
1,928.0
630.0
4.3
372.6
186.0
1,942.3'
629.0
4.4
373.1
184.1
1,954.6
631.0
4.2
588.8
582.2
6.6
644.2
347.8
38.3
589.1
582.5
6.6
651.9
351.8
35.1
592.8
586.6
6.2
660.7
352.6
36.9
595.0
588.9
6.1
667.2
354.1
37.6
600.9
594.8
6.1
673.3
359.4
38.9
601.7
596.4
5.3
678.9
360.7
38.2
614.2
608.9
5.3
683.6
358.2
43.8
617.1
611.8'
5.3
689.2
357.7
44.1
621.3
616.0'
5.3
697.4
360.3
42.0
625.8
620.2
5.5'
704.1
363.2
38.9
624.6
619.0
5.6
712.1
364.5
42.8'
626.8
621.2
5.6
720.5
365.9
39.9
31.0
30.4
30.7
30.5
30.1
30.6
30.3
30.5
31.1
30.5
30.7
30.1
30.0
29.8
29.1
29.6
29.0'
29.6
29.2'
30.1
30.8'
30.7'
31.7
31.1
47.7
7.9
5.1
28.0
48.9
47.3
7.4
5.0
28.4
49.6
48.0
7.6
4.9r
28.7
47.3
47.1
8.2
4.9
28.9
47.5r
46.6
7.9
4.9
29.4
47.3
45.8
8.1'
4.8
29.7
44.0'
45.5
8.5
4.8
29.7
45.0
45.1
8.0
4.8
29.7
45.4'
44.8
8.0
4^
29.8
44.7'
44.5
9.0
4.9"
30.0
44.2'
44.2
9.1
4.7
30.0
44.5'
43.7
9.0
4.5
30.2
47.1
1. Data have been revised because of benchmarking beginning January 1984.
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
A17
1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS 1
Monthly averages, billions of dollars
1988
1989
Source
Seasonally adjusted
1 Total nondeposit funds
—
2 Net balances due to related foreign offices . . . .
3 Borrowings from other than commercial banks
in United States 4
4
Domestically chartered banks
5
Foreign-related banks
Not seasonally adjusted
6 Total nondeposit funds
—
7 Net balances due to related foreign offices
8
Domestically chartered banks
9
Foreign-related banks
10 Borrowings from other than commercial banks
in United States 4
11
Domestically chartered banks
12
Federal funds and security RP
borrowings
Other 6
13
14
Foreign-related banks
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
219.4
19.2
210.0
8.2
210.9
5.6
217.3
9.3
214.6
6.7
207.4
8.0
210.6'
10.7
211.2
s.or
204.3
2.9
207.1
-.1
223.0
7.9'
226.8
11.1
200.3
165.8
34.5
201.8
165.8
36.0
205.3
167.1
38.2
208.0
168.7
39.3
207.9
168.9
39.0
199.4
162.4
37.0
199.9
160.7
39.2
203.1
165.1
38. V
201.5'
162.8
38.7'
207.2
166.5
40.7
215.1 r
175.0
40.0
215.7
173.9
41.8
218.3
18.7
-7.3
26.0
206.6
9.2
-15.7
24.9
204.9
5.2
-20.5
25.7
214.1
10.3
-19.2
29.5
209.0
9.2
-20.7
29.9
206.6 r
7.7
-20.5
28.2
215.4 r
10.4
-17.9
28.3
216.8
7.0
-19.8
26.8 r
207.0
.8
-23.0
23.8'
214.7
2.6
-22.1
24.6
226. 1'
8.1
-18.5
26.6
222.6
8.1
-16.6
24.7
199.6
165.3
197.3
162.1
199.7
162.9
203.7
167.4
199.8
162.9
198.9
160.8
204.9
164.4
209.8'
170.2
206.2
166.7
212.2'
171.0
218.0'
176.4'
214.4
172.1
160.3
5.0
34.2
157.6
4.4
35.3
158.8
4.1
36.8
162.8
4.6
36.3
159.3
3.5
37.0
157.4
3.4
38.1
161.2
3.2
40.5
166.7
3.5
39.6 r
162.4
4.3
39.5
167.3
3.7
41.1
172.9
3.4
41.6
169.4
2.7
42.4
414.6
415.1
419.7
421.7
423.2
424.7
424.5
425.6
429.2
429.8
434.9
434.5
440.3
440.2
446.7R
448.2
452.7
450.6
456.8 r
455.5
458.8'
457.3'
461.6
458.9
17.1
11.9
23.5
24.6
27.2
27.7
23.0
16.3
24.9
22.9
20.3
25.0
20.3
25.9
20.3
18.1
20.9
20.2
27.1
34.3
27.4'
26.2
22.7
23.0
MEMO
Gross large time deposits
Seasonally adjusted
Not seasonally adjusted
U.S. Treasury demand balances at commercial
banks 8
17
Seasonally adjusted
18
Not seasonally adjusted
15
16
1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks, New
York investment companies majority owned by foreign banks, and Edge Act
corporations owned by domestically chartered and foreign banks.
These data also appear in the Board's G.10 (411) release. For address, see
inside front cover.
2. Includes federal funds, RPs, and other borrowing from nonbanks and net
balances due to related foreign offices.
3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and
U.S. branches and agencies of foreign banks with related foreign offices plus net
positions with own IBFs.
4. Other borrowings are borrowings through any instrument, such as a promissory note or due bill, given for the purpose of borrowing money for the banking
business. This includes borrowings from Federal Reserve Banks and from foreign
banks, term federal funds, loan RPs, and sales of participations in pooled loans.
5. Based on daily average data reported weekly by approximately 120 large
banks and quarterly or annual data reported by other banks.
6. Figures are partly daily averages and partly averages of Wednesday data.
7. Time deposits in denominations of $100,000 or more. Estimated averages of
daily data.
8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at commercial banks. Averages of daily data.
A18
DomesticNonfinancialStatistics • October 1989
1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS
Last-Wednesday-of-Month Series1
Billions of dollars
1988
1989
Account
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
2,535.6
526.8
336.4
190.4
21.2
1,987.5
154.9
1,832.7
593.3
654.7
352.7
232.0
2,551.6
524.8
334.1
190.7
24.9
2,002.0
161.3
1,840.7
595.0
661.8
353.3
230.6
2,591.6
532.9
341.5
191.4
24.8
2,033.9
170.3
1,863.6
601.3
669.6
355.3
237.5
2,601.6
533.5
345.3
188.2
19.2
2,048.9
165.7
1,883.2
608.8
676.3
361.4
236.6
2,587.0
533.5
347.3
186.2
21.5
2,032.1
159.9
1,872.2
604.6
679.7
360.8
227.0
2,624.0
535.8
351.3
184.5
20.1
2,068.0
173.2
1,894.9
617.6
684.1
358.3
234.8
2,627.1
539.1
355.5
183.6
21.8
2,066.2
154.9
1,911.3
622.9
692.6
358.1
237.7
2,623.0
538.3
356.6
181.7
17.8
2,066.8
150.7
1,916.2
627.3
699.4
361.8
227.7
2,659.8
541.1
359.1
182.0
19.2
2,099.5
160.5
1,939.0
631.1
706.7
363.8
237.4
2,660.7
541.6
362.2
179.4
18.2
2,100.9
155.0
1,945.9
628.3
715.1
366.0
236.6
2,677.1
538.3
360.3
178.1
19.8
2,119.0
162.4
1,956.6
635.3
722.8
366.2
232.3
216.6
31.1
26.2
76.3
209.9
31.7
26.3
72.9
237.5
33.8
28.7
89.8
246.3
34.5
30.3
92.3
216.1
31.5
27.5
76.4
227.4
27.7
26.6
89.1
211.5
30.9
26.8
75.9
215.8
33.4
26.9
78.8
248.3
27.8
27.9
107.6
214.2
27.9
27.6
78.7
211.7
30.6
27.4
75.2
29.8
53.2
29.4
49.6
32.4
52.8
34.4
54.8
28.7
52.0
33.3
50.7
28.8
49.0
28.5
48.3
34.9
50.2
29.6
50.5
28.8
49.7
A L L COMMERCIAL BANKING
INSTITUTIONS 2
1 Loans and securities
2
Investment securities
3
U.S. government securities
4
Other
5
Trading account assets
6
Total loans
7
Interbank loans
8
Loans excluding interbank
9
Commercial and industrial
10
Real estate
Individual
11
12
All other
13 Total cash assets
14 Reserves with Federal Reserve Banks.
15 Cash in vault
16 Cash items in process of collection . . .
17
Demand balances at U.S. depository
institutions
18 Other cash assets
194.5
200.3
200.7
200.0
194.6
191.4
194.1
200.7
206.8
198.7
201.1
20 Total assets/total liabilities and capital
19 Other assets
2,946.7
2,961.8
3,029.7
3,047.9
2,997.8
3,042.8
3,032.7
3,039.5
3,114.9
3,073.6
3,090.0
21
22
23
24
25
26
27
2,062.8
588.3
536.6
937.9
471.8
220.8
191.4
2,072.2
587.8
537.8
946.7
482.6
214.5
192.5
2,125.8
628.6
541.1
956.1
479.0
229.0
195.9
2,145.7
642.7
535.6
967.5
473.1
233.7
195.3
2,097.1
586.6
528.8
981.7
493.6
209.1
198.0
2,125.2
602.6
527.3
995.3
502.9
216.5
198.2
2,123.7
583.2
523.2
1,017.3
483.6
223.9
201.4
2,134.2
594.5
512.0
1,027.6
486.7
217.4
201.2
2,182.6
628.5
509.7
1,044.3
510.6
218.6
203.2
2,138.2
580.5
507.4
1,050.2
512.7
218.4
204.4
2,152.0
579.4
514.0
1,058.6
510.2
223.1
204.7
352.6
354.0
361.0
359.4
364.4
366.2
372.1
369.5
372.3
374.4
373.5
195.4
195.7
196.7
193.4
190.5
189.7
188.8
186.6
188.0
185.4
184.6
2,339.8
501.7
325.0
176.7
21.2
1,816.9
126.2
1,690.7
490.2
634.8
352.3
213.3
2,353.9
499.3
322.8
176.5
24.9
1,829.8
131.3
1,698.5
492.7
641.3
353.0
211.6
2,389.8
507.1
329.9
177.1
24.8
1,858.0
139.7
1,718.3
498.7
647.7
354.9
217.0
2,391.9
507.2
333.2
174.0
19.2
1,865.4
133.1
1,732.3
500.6
654.3
361.1
216.3
2,385.1
507.0
334.5
172.6
21.5
1,856.6
131.4
1,725.2
498.9
657.7
360.5
208.1
2,405.9
509.0
338.1
171.0
20.1
1,876.8
138.9
1,737.8
503.4
661.7
358.0
214.7
2,407.8
513.1
342.7
170.4
21.8
1,872.8
122.3
1,750.5
506.1
669.8
357.7
216.9
2,407.8
513.8
344.1
169.7
17.8
1,876.2
120.2
1,756.0
511.3
676.0
361.4
207.3
2,446.0
516.1
345.9
170.2
19.2
1,910.6
131.5
1,779.2
515.5
683.2
363.5
217.0
2,439.9
517.3
349.5
167.8
18.2
1,904.5
119.3
1,785.1
511.6
691.6
365.6
216.3
2,452.1
514.2
347.8
166.5
19.8
1,918.1
126.4
1,791.7
515.6
698.2
365.8
212.0
194.1
29.0
26.1
75.9
190.2
29.9
26.2
72.2
216.6
32.6
28.6
89.0
223.1
33.1
30.3
91.4
193.5
30.1
27.4
75.6
206.4
26.6
26.6
88.1
191.4
29.5
26.8
75.1
195.3
30.7
26.8
77.9
227.0
26.7
27.9
106.6
192.3
26.6
27.6
77.7
190.1
29.6
27.4
74.4
27.7
35.3
27.4
34.4
30.5
35.8
32.4
35.9
26.8
33.6
31.2
33.9
26.6
33.4
26.8
33.1
32.9
33.0
27.5
32.9
27.0
31.7
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
MEMO
28 U.S. government securities (including
trading account)
29 Other securities (including trading
account)
DOMESTICALLY CHARTERED
COMMERCIAL BANKS 3
30 Loans and securities
Investment securities
31
32
U.S. government securities
Other
33
34
Trading account assets
35
Total loans
36
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
40
Individual
All other
41
42 Total cash assets
Reserves with Federal Reserve Banks.
43
44
Cash in vault
45
Cash items in process of collection . . .
46
Demand balances at U.S. depository
institutions
47
Other cash assets
127.3
130.4
132.2
135.6
128.1
129.6
130.6
134.6
133.6
131.6
128.4
49 Total assets/liabilities and capital
2,661.3
2,674.5
2,738.6
2,750.5
2,706.7
2,741.8
2,729.9
2,737.7
2,806.6
2,763.9
2,770.6
50
51
52
53
54
55
56
1,995.7
579.5
534.1
882.1
359.5
118.2
187.8
2,004.0
578.2
535.2
890.7
365.2
116.3
189.0
2,056.3
618.7
538.6
899.0
366.1
123.8
192.4
2,073.0
632.9
533.1
907.0
363.7
122.0
191.8
2,026.1
577.4
526.4
922.3
377.1
109.0
194.5
2,052.7
593.5
524.8
934.4
378.7
115.8
194.6
2,047.4
574.1
520.7
952.6
362.8
121.7
197.9
2,056.2
584.8
509.4
961.9
368.2
115.6
197.7
2,103.0
618.7
507.1
977.2
383.0
120.9
199.7
2,058.8
571.2
504.8
982.9
387.3
116.9
200.8
2,071.3
570.2
511.3
989.9
380.2
117.8
201.2
37.5
597.3
38.5
602.7
39.7
608.0
40.1
614.2
40.7
617.0
41.7
620.0
42.5
627.3
43.4
632.6
44.3
638.9
45.3
646.2
45.7
652.5
48 Other assets
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
MEMO
57 Real estate loans, revolving
58 Real estate loans, other
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 New York State foreign investment corporations.
3. Insured domestically chartered commercial banks include all member banks
and insured nonmember banks.
Weekly Reporting Commercial Banks
A19
1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS 1
Millions of dollars, Wednesday figures
1989
Account
M a y 31
126,047 R
1 C a s h and balances d u e f r o m depository institutions
1,213,512
2 T o t a l l o a n s , leases, a n d securities, n e t
June 7
103,021'
1,201,589
J u n e 14
112,907
1,203,738
J u n e 21
103,146'
1,208,875
J u n e 28
July 5
J u l y 12
J u l y 19
J u l y 26
105,727
121,904
116,706
105,662
105,395
1,208,607
1,224,771
1,217,310
1,207,891
1,216,173
3 U.S. Treasury and government agency
4
Trading account
5
Investment account
6
Mortgage-backed securities3
All o t h e r m a t u r i n g in
O n e y e a r or less
7
O v e r o n e t h r o u g h five y e a r s
8
9
O v e r five y e a r s
10 O t h e r s e c u r i t i e s
Trading account
11
Investment account
12
N
S t a t e s a n d political s u b d i v i s i o n s , b y m a t u r i t y
14
O n e year or less
15
Over one year
O t h e r bonds, corporate stocks, and securities
16
17 O t h e r t r a d i n g a c c o u n t a s s e t s
137,220
13,216
124,003
53,356'
137,634
13,548
124,086
53,508'
137,626
13,823
123,803
53,518
140,272
14,427
125,845
55,368'
140,742
12,168
128,575
57,264
141,500
13,152
128,348
57,534
140,479
13,389
127,090
57,684
140,334
12,688
127,646
58,591
142,712
13,224
129,488
60,455
21,415'
41,192'
8,041'
72,670
1,138
71,533
44,473
5,051
39,422
27,060
4,829
21,592'
41,052'
7,934'
72,054
842
71,211
44,216
4,981
39,235
26,996
5,232
21,340
40,934
8,011
72,010
1,027
70,982
44,153
4,971
39,181
26,830
4,810
21,347'
40,772'
8,358'
72,176
1,045
71,131
44,069
4,915
39,154
27,062
4,634
21,950
40,734
8,626
71,651
1,113
70,538
43,847
4,783
39,063
26,691
4,870
21,053
40,694
9,068
71,156
1,151
70,004
43,132
4,525
38,607
26,872
5,243
20,894
39,733
8,778
71,083
1,033
70,050
43,172
4,666
38,505
26,878
4,964
20,718
39,624
8,713
71,242
1,075
70,166
43,286
4,740
38,546
26,880
5,434
20,472
39,545
9,017
71,457
1,232
70,225
43,243
4,830
38,412
26,982
5,328
18 F e d e r a l f u n d s s o l d 4
19
To commercial banks
70
T o n o n b a n k b r o k e r s a n d d e a l e r s in s e c u r i t i e s
71
To others
27. O t h e r l o a n s a n d l e a s e s , g r o s s
73
Other loans, gross
24
Commercial and industrial
25
Bankers acceptances and commercial paper
76
All o t h e r
27
U.S. addressees
28
Non-U.S. addressees
77,178
51,929
18,223
7,026
959,975'
935,367'
317,331'
1,978
315,353'
313,424'
1,929'
68,424
42,728
18,593
7,102
956,741'
932,164'
316,467'
1,840
314,627'
312,723'
1,904'
69,935
44,934
19,299
5,702
957,766
933,176
315,680
1,879
313,801
311,965
1,836
70,210
45,070
18,841
6,299
959,963'
935,318'
315,19C
1,803
313,388'
311,517'
1,871'
72,860
48,091
18,409
6,360
956,660
931,988
313,384
1,781
311,603
309,696
1,907
78,924
53,455
19,174
6,295
965,448
940,668
316,172
1,892
314,280
312,405
1,875
72,247
49,264
16,261
6,721
965,618
940,858
315,152
1,667
313,485
311,767
1,719
61,897
41,507
14,695
5,695
966,206
941,367
315,626
1,755
313,870
312,107
1,763
63,820
44,919
12,721
6,179
969,881
945,022
319,013
1,761
317,252
315,636
1,616
79
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
327,480'
24,422'
303,058'
169,495'
47,914'
21,679'
4,809'
21,426'
15,640'
5,696'
27,143'
1,853'
22,814'
24,608
4,895'
33,465
921,615
131,085'
328,051'
24,533'
303,518'
168,929'
47,207'
21,044'
4,775'
21,387'
14,288'
5,731'
27,119
1,993'
22,378'
24,576'
4,907'
33,589'
918,245
132,019'
329,624
24,746
304,878
169,414
45,839
20,253
3,950
21,636
15,695
5,726
27,037
1,922
22,239
24,590
4,919
33,490
919,356
130,697
330,800'
24,872'
305,929'
168,990'
46,148'
19,632'
4,412'
22,104'
16,135'
5,748'
27,067'
1,879'
23,361'
24,645
4,937'
33,443'
921,583
131,785'
331,538
24,541
306,997
169,469
43,406
17,619
3,976
21,810
17,028
5,805
26,996
1,823
22,539
24,672
4,948
33,228
918,484
128,227
332,033
24,496
307,537
169,618
46,614
19,398
5,006
22,209
16,382
5,869
26,812
1,845
25,323
24,780
4,836
32,663
927,949
135,575
333,123
24,561
308,561
169,946
46,829
20,088
4,452
22,289
17,449
5,972
26,699
2,000
23,688
24,760
4,849
32,232
928,537
128,694
334,097
24,679
309,418
169,992
47,758
20,869
4,414
22,474
15,962
5,975
26,718
1,888
23,352
24,839
4,935
32,285
928,985
128,502
335,181
24,750
310,432
170,007
47,218
21,212
4,192
21,813
16,360
5,937
26,735
1,640
22,932
24,858
4,944
32,081
932,855
124,465
1,470,644'
1,436,629'
1,447,342
1,443,806'
1,442,562
1,482,250
1,462,710
1,442,055
1,446,033
244,114
189,983
5,894
2,678
25,996
8,515
669
10,378
74,271
673,096
631,697'
32,401'
922
7,420
657
289,130
1,349
21,700
266,081
89,654'
219,785
175,662
5,420
3,373
19,292
7,206
954
7,879
75,696
677,506
636,172'
32,17c
916
7,537'
711
277,162
1,520
8,003
267,639
85,728'
226,181
180,957
5,890
4,547
19,817
6,020
891
8,059
74,883
676,569
635,473
32,069
882
7,466
679
282,707
1,720
7,165
273,822
86,028
219,160
174,885
6,616
1,888
19,736
7,030
866
8,138
72,702
675,376
634,831'
31,482'
882
7,484
696
289,438
0
25,165
264,273
86,365'
219,187
173,820
6,078
2,516
20,081
6,707
1,022
8,963
71,824
674,735
634,492
31,154
898
7,494
696
291,896
960
25,191
265,746
84,046
255,695
203,404
7,340
2,058
22,729
7,857
835
11,471
76,580
682,277
642,978
30,082
917
7,681
620
280,388
0
11,939
268,448
86,143
224,157
180,033
5,725
3,071
19,998
6,622
955
7,753
74,576
682,662
643,189
30,349
933
7,562
629
293,606
0
13,430
280,176
86,225
222,146
177,274
5,724
4,410
19,117
6,966
832
7,822
73,877
681,581
642,373
30,010
925
7,638
634
276,542
25
13,493
263,023
86,583
215,863
172,225
5,862
3,046
19,246
6,410
809
8,265
72,951
681,918
642,564
30,110
928
7,679
637
286,563
0
16,136
270,427
87,679
1,370,266'
1,335,878'
1,346,368
1,343,041'
1,341,689
1,381,083
1,361,226
1,340,729
1,344,975
100,378'
100,751'
100,973
100,765'
100,873
101,167
101,484
101,326
101,058
MEMO
T o t a l l o a n s a n d l e a s e s ( g r o s s ) a n d i n v e s t m e n t s a d j u s t e d 8 . 1,178,264'
963,545'
Total loans and leases (gross) adjusted
215,426'
T i m e d e p o s i t s in a m o u n t s o f $ 1 0 0 , 0 0 0 o r m o r e
19,418'
U . S . T r e a s u r y s e c u r i t i e s m a t u r i n g in o n e y e a r o r l e s s
1,775
L o a n s sold o u t r i g h t t o a f f i l i a t e s — t o t a l
1,466
Commercial and industrial
309
Other
246,395
N o n t r a n s a c t i o n savings deposits (including M M D A s )
1,176,313'
961,392'
217,253'
19,896'
1,854
1,542
312
248,402
1,176,960
962,514
217,440
18,892
1,859
1,548
312
246,968
1,182,553'
965,471'
216,782
18,898'
1,863
1,544
319
246,010
1,181,074
963,811
216,742
18,603
1,800
1,479
320
245,348
1,189,418
971,519
217,229
18,455
1,625
1,306
319
251,750
1,185,038
968,512
218,934
18,765
1,639
1,308
330
250,068
1,182,735
965,726
218,144
18,906
1,686
1,347
338
249,928
1,187,067
967,569
217,940
18,367
1,670
1,332
338
250,100
Real estate loans
Revolving, h o m e equity
All o t h e r
T o individuals for personal expenditures
T o d e p o s i t o r y a n d financial i n s t i t u t i o n s
C o m m e r c i a l b a n k s in t h e U n i t e d S t a t e s
B a n k s in f o r e i g n c o u n t r i e s
N o n b a n k d e p o s i t o r y a n d o t h e r financial institutions . .
F o r purchasing and carrying securities
T o finance a g r i c u l t u r a l p r o d u c t i o n
T o states and political subdivisions
T o f o r e i g n g o v e r n m e n t s a n d official i n s t i t u t i o n s
All o t h e r
L e a s e financing r e c e i v a b l e s
LESS: U n e a r n e d i n c o m e
L o a n and lease reserve
Other loans and leases, net
All o t h e r a s s e t s
47 T o t a l assets
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
Demand deposits
Individuals, partnerships, and corporations
States a n d political subdivisions
U.S. government
D e p o s i t o r y i n s t i t u t i o n s in t h e U n i t e d S t a t e s
B a n k s in f o r e i g n c o u n t r i e s
F o r e i g n g o v e r n m e n t s a n d official i n s t i t u t i o n s
Certified and officers' c h e c k s
Transaction balances other than d e m a n d deposits
Nontransaction balances
Individuals, partnerships, and corporations
S t a t e s a n d political subdivisions
U.S. government
D e p o s i t o r y i n s t i t u t i o n s in t h e U n i t e d S t a t e s
F o r e i g n g o v e r n m e n t s , official i n s t i t u t i o n s , a n d b a n k s
Liabilities f o r b o r r o w e d m o n e y
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All o t h e r liabilities f o r b o r r o w e d m o n e y 6
O t h e r liabilities a n d s u b o r d i n a t e d n o t e s a n d d e b e n t u r e s
68 T o t a l liabilities
69 R e s i d u a l ( t o t a l a s s e t s m i n u s t o t a l liabilities) 7
70
71
72
73
74
75
76
77
..
..
1. B e g i n n i n g J a n . 6, 1988, t h e " L a r g e b a n k " r e p o r t i n g g r o u p w a s r e v i s e d
s o m e w h a t , e l i m i n a t i n g s o m e f o r m e r r e p o r t e r s w i t h l e s s t h a n $2 billion of a s s e t s
a n d a d d i n g s o m e n e w r e p o r t e r s w i t h a s s e t s g r e a t e r t h a n $3 b i l l i o n .
2. F o r a d j u s t m e n t b a n k d a t a s e e t h i s t a b l e in t h e M a r c h 1989 B u l l e t i n . T h e
a d j u s t m e n t d a t a f o r 1988 s h o u l d be a d d e d t o t h e reported d a t a f o r 1988 t o e s t a b l i s h
c o m p a r a b i l i t y w i t h d a t a r e p o r t e d f o r 1989.
3. I n c l u d e s U . S . g o v e r n m e n t - i s s u e d o r g u a r a n t e e d c e r t i f i c a t e s of p a r t i c i p a t i o n
in p o o l s o f r e s i d e n t i a l m o r t g a g e s .
4. I n c l u d e s s e c u r i t i e s p u r c h a s e d u n d e r a g r e e m e n t s t o r e s e l l .
5. I n c l u d e s a l l o c a t e d t r a n s f e r r i s k r e s e r v e .
6. I n c l u d e s f e d e r a l f u n d s p u r c h a s e d a n d s e c u r i t i e s s o l d u n d e r a g r e e m e n t s t o
r e p u r c h a s e ; f o r i n f o r m a t i o n o n t h e s e liabilities a t b a n k s w i t h a s s e t s of $1 b i l l i o n o r
m o r e o n D e c . 31, 1977, s e e t a b l e 1.13.
7. T h i s is n o t a m e a s u r e of e q u i t y c a p i t a l f o r u s e in c a p i t a l - a d e q u a c y a n a l y s i s o r
for other analytic uses.
8. E x c l u s i v e of l o a n s a n d f e d e r a l f u n d s t r a n s a c t i o n s w i t h d o m e s t i c c o m m e r c i a l
banks.
9. L o a n s s o l d a r e t h o s e sold o u t r i g h t t o a b a n k ' s o w n f o r e i g n b r a n c h e s ,
n o n c o n s o l i d a t e d n o n b a n k affiliates o f t h e b a n k , t h e b a n k ' s h o l d i n g c o m p a n y (if
not a bank), and nonconsolidated n o n b a n k subsidiaries of the holding c o m p a n y .
A20
DomesticNonfinancialStatistics • October 1989
1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS
IN NEW YORK CITY1
Millions of dollars, Wednesday figures
1989
Account
May 31
1 Cash balances due from depository institutions
2 Total loans, leases, and securities, net 2
Securities
3 U.S. Treasury and government agency 3
Trading account
4
5
Investment account
Mortgage-backed securities 4
6
All other maturing in
7
One year or less
Over one through five years
8
9
Over five years
10 Other securities 3
11 Trading account 3
12
Investment account
13
States and political subdivisions, by maturity
14
One year or less
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
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
Allother
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net 6
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
Other liabilities and subordinated notes and debentures . . .
68 Total liabilities
69 Residual (total assets minus total liabilities)9
June 28
July 5
June 7
June 14
June 21
July 12
25,136
21,314
24,700
27,588
27,373
22,860
24,436
215,920
219,167
212,997
213,080
July 19
July 26
28,490
20,524
222,681
216,247
217,152
216,649
215,410
0
0
15,244
7,237
0
0
15,042
7,250
0
0
15,030
7,260
0
0
15,095
7,288
0
0
15,461
7,414
0
0
15,326
7,422
0
0
15,024
7,444
0
0
15,642
7,971
0
0
15,658
8,112
2,804
3,500
1,703
0
0
17,777
11,990
1,161
10,828
5,787
0
2,791
3,409
1,592
0
0
17,772
11,964
1,175
10,788
5,808
0
2,781
3,412
1,576
0
0
17,927
11,932
1,178
10,755
5,995
0
2,855
3,295
1,657
0
0
18,224
11,904
1,181
10,723
6,320
0
2,930
3,517
1,601
0
0
17,761
11,707
1,079
10,628
6,054
0
2,818
3,514
1,572
0
0
17,292
11,269
806
10,463
6,023
0
2,808
3,203
1,569
0
0
17,359
11,331
905
10,426
6,028
0
2,984
3,130
1,558
0
0
17,508
11,408
974
10,433
6,100
0
2,871
3,109
1,565
0
0
17,518
11,364
1,055
10,309
6,154
0
27,529
13,687
9,708
4,134
176,814
171,076
59,915'
422
59,493'
58,864'
629
53,608'
3,479
50,129'
19,347
20,462'
9,541'
3,323
7,598
6,165
158
5,982
480
4,957'
5,737
1,641
13,041
162,131
57,284
22,727
8,086
10,335
4,307
175,424
169,696
59,431'
384
59,047'
58,418'
628
53,641'
3,481
50,160'
19,430
19,772'
8,872'
3,215
7,685
5,606
163
5,945
625
5,081'
5,728
1,646
13,072
160,706
59,032
24,721
10,582
10,956
3,182
174,171
168,469
58,842'
489
58,354'
57,752'
602
53,701'
3,495
50,206'
19,528
18,975'
8,442'
2,537
7,9%
5,971
155
5,898
504
4,893'
5,701
1,655
13,041
159,474
54,848
23,950
9,875
10,384
3,690
174,092
168,363
57,513'
404
57,109'
56,506'
603
53,90c
3,508
50,392'
19,498
19,335'
8,344'
2,932
8,059
6,374
148
5,974
508
5,113'
5,729
1,675
13,037
159,380
59,411
25,085
11,277
9,994
3,814
171,809
166,097
56,436'
394
56,043'
55,340'
703
54,084'
3,524
50,561'
19,630
17,431'
7,097'
2,529
7,804
7,146
150
5,917
476
4,826'
5,712
1,686
13,020
157,103
56,451
23,518
10,330
9,606
3,583
173,840
168,134
56,214
353
55,861
55,172
689
54,292
3,540
50,751
19,650
19,920
8,425
3,499
7,996
6,3%
155
5,976
506
5,025
5,707
1,657
12,399
159,784
62,477
25,070
12,986
7,909
4,175
175,515
169,819
56,581
380
56,201
55,625
576
54,741
3,553
51,188
19,623
19,695
8,750
2,945
8,000
7,210
162
5,881
664
5,261
5,6%
1,663
12,138
161,714
55,016
19,114
9,491
6,926
2,6%
174,636
168,910
57,339
416
56,924
56,336
588
55,101
3,563
51,538
19,741
19,555
8,480
2,881
8,194
5,738
163
5,879
561
4,833
5,725
1,754
12,149
160,733
55,649
17,313
9,478
4,474
3,361
176,522
170,806
59,348
376
58,972
58,458
514
55,590
3,577
52,013
19,607
18,882
8,314
2,713
7,855
5,964
156
5,855
485
4,918
5,717
1,787
12,145
162,591
53,357
308,455
295,803
297,137
297,373
296,562
305,985
301,557
291,506
290,873
58,706
38,911
625
478
6,745
7,040
530
4,376
50,054
35,302
571
577
4,183
5,972
785
2,663
50,818
36,199
1,057
693
4,787
4,590
749
2,743
52,866
36,539
938
193
5,642
5,710
628
3,216
52,046
35,773
850
493
5,120
5,240
863
3,706
61,690
42,822
1,742
242
4,847
6,352
683
5,002
51,370
36,560
705
606
4,827
5,325
798
2,549
52,175
36,974
717
771
4,669
5,559
689
2,795
49,420
34,630
552
581
4,767
5,120
653
3,116
8,236
113,778
103,405
8,095
29
2,000
249
65,776
0
5,381
60,395
33,420
8,412
114,776
104,455
8,013
30
1,997
281
64,382
0
1,772
62,610
29,387
8,446
113,479
103,007
8,186
30
2,004
253
66,456
0
1,485
64,971
29,100
8,178
112,939
102,616
8,039
29
2,004
250
65,433
0
6,086
59,348
29,314
8,109
112,693
102,309
8,106
28
1,998
251
68,297
960
5,969
61,368
26,802
8,467
115,221
105,074
7,745
32
2,123
247
62,795
0
2,588
60,207
29,262
8,352
114,540
104,126
7,986
31
2,142
254
67,984
0
3,130
64,854
30,673
8,215
113,768
103,441
7,805
32
2,243
247
58,638
0
3,045
55,592
30,216
8,164
113,469
103,095
7,840
30
2,254
250
61,644
0
3,926
57,718
29,707
279,916
267,011
268,299
268,730
267,947
277,435
272,920
263,013
262,404
28,539
28,792
28,837
28,643
28,615
28,550
28,637
28,494
28,469
214,135'
181,115'
43,084
2,950
214,008'
181,194'
43,323
2,829
212,824'
179,867'
42,891
2,956
213,142'
179,822'
42,576
2,978
211,742'
178,520'
42,356
2,872
211,222
178,604
43,737
3,103
211,231
178,848
43,612
2,821
208,929
175,778
42,952
3,183
209,219
176,043
42,351
2,758
MEMO
70
71
72
73
Total loans and leases (gross) and investments adjusted 2,10
Total loans and leases (gross) adjusted 1
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.
FRASER
6. Includes allocated transfer risk reserve.
Digitized for
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 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS 1
Liabilities
A21
Assets and
Millions of dollars, Wednesday figures
1989
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 sold2
6
To commercial banks in the United States.
7
8 Other loans, gross
9
Commercial and industrial
10
Bankers acceptances and commercial
paper
11
All other
1?
U.S. addressees
n
Non-U.S. addressees
14
Loans secured by real estate
15 To financial institutions
16
Commercial banks in the United States..
17
Banks in foreign countries
18
Nonbank financial institutions
19 To foreign governments and official
institutions
20
For purchasing and carrying securities
71
All other 3
22 Other assets (claims on nonrelated parties) ..
Net due from related institutions
24 Total assets
75
Deposits or credit balances due to other
than directly related institutions
26
Transaction accounts and credit balances .
Individuals, partnerships, and
27
corporations
78
Other
29
Nontransaction accounts
30
Individuals, partnerships, and
corporations
31
Other
32
Borrowings from other than directly
related institutions
33
Federal funds purchased 6
34
From commercial banks in the
United States
35
From others
36
Other liabilities for borrowed money
37
To commercial banks in the
United States
38
To others
39 Other liabilities to nonrelated parties
40 Net due to related institutions
41 Total liabilities
n
May 31
June 7
June 14
June 21
June 28
July 5
July 12
July 19
July 26
11,420
130,214'
10,617
131,486'
11,621
133,136'
11,396
133,187'
11,606
134,216
10,701
131,647
11,647
131,510
11,120
132,164
11,809
137,745
8,863
6,137
5,500
4,489
1,011
109,711'
71,148'
8,659
6,138
7,267
6,215
1,052
109,422'
70,601'
8,132
6,014
9,030
8,002
1,028
109,960'
70,554r
8,5%
6,006
7,955
6,915
1,040
110,630'
71,225'
8,557
5,988
7,286
6,079
1,207
112,385
71,220'
8,652
5,944
3,928
2,711
1,217
113,123
71,640
8,545
5,930
6,525
5,392
1,133
110,510
69,889
8,654
5,922
4,555
3,512
1,043
113,033
71,292
8,416
6,018
7,868
6,685
1,183
115,440
73,416
1,648
69,500'
67,784'
1,716'
14,691
19,985'
14,515'
1,944
3,526'
1,789
68,812'
67,056'
1,756'
14,736
19,997'
14,674'
1,758
3,565'
1,888
68,666'
66,914'
1,752'
14,664
20,470'
15,171'
1,783
3,516'
1,892
69,333'
67,645'
1,688'
15,173
20,480'
15,536'
1,438
3,506'
1,863
69,357'
67,603'
1,754'
14,912
22,089'
17,060'
1,490
3,539'
1,761
69,879
67,998
1,881
15,240
21,792
16,638
1,513
3,641
1,664
68,225
66,288
1,937
15,309
21,241
16,350
1,224
3,667
1,733
69,559
67,634
1,925
15,517
21,922
16,932
1,267
3,723
1,712
71,704
69,829
1,875
15,584
22,250
17,102
1,408
3,740
692
1,563
1,632
32,669
18,293
192,596
686
1,484
1,918
32,146
15,789
190,038
649
2,157
1,466
32,663
14,450
191,869
622
1,642
1,488
32,638
15,520
192,741
716
1,757
1,691
32,508
14,0%
192,426
629
2,160
1,662
31,664
17,040
191,053
630
1,799
1,642
32,613
14,869
190,640
629
1,901
1,772
32,336
16,470
192,090
633
1,830
1,727
33,869
15,825
199,248
48,500'
3,609
48,854'
3,477
47,970
3,014
48,570'
3,450
48,753'
4,101
48,584
3,332
48,631
3,234
49,578
3,212
49,805
3,274
2,107
1,502
44,891'
2,080
1,397
45,377'
1,905
1,109
44,956
1,934
1,516
45,120'
2,423
1,678
44,652'
2,076
1,256
45,252
1,956
1,278
45,397
1,987
1,225
46,366
1,986
1,288
46,531
37,829'
7,062
38,187'
7,190
37,748
7,208
37,732'
7,388
37,607'
7,045
37,888
7,364
37,768
7,629
38,007
8,359
38,667
7,864
83,6I9 r
38,550
82,778'
38,762
81,428'
37,212
86,349'
41,660
81,787'
34,949
86,254
41,867
81,000
36,134
84,266
38,285
85,041
38,982
21,099
17,451
45,069'
20,561
18,201
44,016'
21,260
15,952
44,216'
21,367
20,293
44,689'
17,653
17,2%
46,838'
23,142
18,725
44,387
21,327
14,807
44,866
18,653
19,632
45,981
19,557
19,425
46,059
29,437
15,632'
33,782
26,694
192,596
28,777
15,239'
33,141
25,266
190,038
28,940
15,276'
33,333
29,141'
191,869
29,058
15,631'
32,472
25,350
192,741
31,098
15,740'
32,829
29,056
192,426
29,767
14,620
32,124
24,091
191,053
29,059
15,807
32,944
28,065
190,640
29,975
16,006
33,535
24,713
192,090
29,790
16,269
34,953
29,449
199,248
111,207'
96,207'
1.10,597'
95,800'
109,963'
95,817'
110,736'
96,134'
111,077'
%,532'
112,298
97,702
109,768
95,293
111,720
97,144
113,955
99,521
MEMO
4? Total loans (gross) and securities adjusted 7 . .
43 Total loans (gross) adjusted 7
1. Effective Jan. 4,1989, the reporting panel includes a new group of large U.S.
branches and agencies of foreign banks. Earlier data included 65 U.S. branches
and agencies of foreign banks that included 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.
3. Effective Jan. 4, 1989, loans secured by real estate are being reported as a
separate component of Other loans, gross. Formerly, these loans were included in
"All other", line 21.
4. Includes credit balances, demand deposits, and other checkable deposits.
5. Includes savings deposits, money market deposit accounts, and time
deposits.
6. Includes securities sold under agreements to repurchase.
7. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
A22
DomesticNonfinancialStatistics • October 1989
1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
Type of holder
1988
1984
Dec.
1 All holders—Individuals, partnerships, and
corporations
2
3
4
5
6
Financial business
Nonfinancial business
Consumer
Foreign
Other
1985
Dec.
1986
Dec.
1989
1987
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
302.7
321.0
363.6
343.5
328.6
346.5
337.8
354.7
330.4
n.a.
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
36.3
191.9
90.0
3.4
21.9
33.9
184.1
86.9
3.5
20.3
37.2
194.3
89.8
3.4
21.9
34.8
190.3
87.8
3.2
21.7
38.6
201.2
88.3
3.7
22.8
36.3
182.2
87.4
3.7
20.7
n.a.
n.a.
n.a.
n.a.
n.a.
Weekly reporting banks
1988
1984
Dec.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
1985
Dec.
1989
1987
Dec.
Mar.
June
Sept.
Dec.
Mar.
June
157.1
168.6
195.1
183.8
181.8
191.5
185.3
198.3
181.9
182.2
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
28.6
100.0
39.1
3.3
12.7
27.0
98.2
41.7
3.4
11.4
30.0
103.1
42.3
3.4
12.8
27.2
101.5
41.8
3.1
11.7
30.5
108.7
42.6
3.6
12.9
27.2
98.6
41.1
3.3
11.7
25.4
99.8
42.4
2.9
11.7
1. Figures include cash items in process of collection. Estimates of gross
deposits are based on reports supplied by a sample of commercial banks. Types
of depositors in each category are described in the June 1971 BULLETIN, p. 466.
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.
1986
Dec.
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
A23
1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1989
1984
Dec.
Instrument
1985
Dec.
1987
Dec.
1986
Dec.
1988
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
237,586
298,779
329,991
357,129
455,017
471,066
487,771
492,821
494,292
497,369
503,445
56,485
78,443
101,072
101,958
159,947
162,884
173,944
172,950
170,549
167,795
167,681
2,035
1,602
2,265
1,428
1,248
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
110,543
135,320
151,820
173,939
192,442
199,828
201,997
205,374
207,231
206,497
211,020
42,105
70,558
44,778
85,016
40,860
77,099
43,173
81,232
43,155
102,628
n.a.
108,354
n.a.
111,830
n.a.
114,497
n.a.
116,512
n.a.
123,077
n.a.
124,744
Financial companies 1
Dealer-placed paper
Total
Bank-related (not seasonally
adjusted)
Directly placed paper4
Total
Bank-related (not seasonally
adjusted) 3
Nonfinancial companies 5
Bankers dollar acceptances (not seasonally adjusted) 6
7 Total
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
Basis
14 Imports into United States
15 Exports from United States
16 All other
8
9
10
11
12
13
78,364
68,413
64,974
70,565
66,631
62,212
62,812
62,458
64,357
62,396
64,182
9,811
8,621
1,191
11,197
9,471
1,726
13,423
11,707
1,716
10,943
9,464
1,479
9,086
8,022
1,064
9,009
7,927
1,082
9,401
8,497
904
8,336
7,642
693
9,616
8,107
1,509
8,908
8,115
794
9,333
8,399
934
0
671
67,881
0
937
56,279
0
1,317
50,234
0
965
58,658
0
1,493
56,052
0
1,596
51,608
0
1,579
51,832
0
1,544
52,579
0
1,400
53,340
0
1,374
52,113
0
1,177
53,672
17,845
16,305
44,214
15,147
13,204
40,062
14,670
12,960
37,344
16,483
15,227
38,855
14,984
14,410
37,237
14,917
13,813
33,482
15,588
13,927
33,297
14,755
13,581
34,122
15,234
14,371
34,752
14,900
14,452
33,044
15,477
15,040
33,666
1. 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.
2. Includes all financial company paper sold by dealers in the open market.
3. Beginning January 1989, bank-related series have been discontinued.
4. As reported by financial companies that place their paper directly with
investors.
5. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
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.
1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per year
Period
1986—Mar. 7
Apr. 21
July 11
Aug. 26
9.00
8.50
8.00
7.50
1987—Apr.
May
1
1
15
Sept. 4
Oct. 7
22
Nov. 5
7.75
8.00
8.25
8.75
9.25
9.00
8.75
2
11
14
11
28
8.50
9.00
9.50
10.00
10.50
1989—Feb. 10
24
June 5
July 31
11.00
1988—Feb.
May
July
Aug.
Nov.
Average
rate
1986
1987
1988
8.33
8.21
9.32
1986 —Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
9.50
9.50
9.10
8.83
8.50
8.50
8.16
7.90
7.50
7.50
7.50
7.50
11.50
11.00
10.50
NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases.
For address, see inside front cover.
Period
1987 —Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Average
rate
7.50
7.50
7.50
7.75
8.14
8.25
8.25
8.25
8.70
9.07
8.78
8.75
Period
1988 —Jan.
Feb.
Mar.
Apr.
May.
June.
July
Aug.
Sept.
Oct..
Nov.
Dec.
1989 —Jan.
Feb.
Mar.
Apr.
May.
June.
July.
Aug.
A24
1.35
Domestic Financial Statistics • October 1989
I N T E R E S T R A T E S M o n e y and Capital Markets
Averages, percent per year; weekly, monthly and annual figures are averages of business day data unless otherwise noted.
1989
Instrument
1986
1987
1989, week ending
1988
Apr.
May
June
July
June 30
July 7
July 14
July 21
July 28
MONEY MARKET RATES
1 Federal funds 1 ' 2
,
2 Discount window borrowing 1 ' 2 ' 3
Commercial paper '
3
1-month
4
3-month
5 6-month
Finance paper, directly placed 4 '
6
1-month
7
3-month
8 6-month
Bankers acceptances •
9
3-month
10 6-month
Certificates of deposit, secondary market
1-month
11
12 3-month
13 6-month
14 Eurodollar deposits. 3-month 8
U.S. Treasury bills 5
Secondary market
15 3-month
16 6-month
1-year
17
Auction average 10
18 3-month
19 6-month
20
1-year
6.80
6.32
6.66
5.66
7.57
6.20
9.84
7.00
9.81
7.00
9.53
7.00
9.24
7.00
9.58
7.00
9.58
7.00
9.31
7.00
9.24
7.00
9.14
7.00
6.61
6.49
6.39
6.74
6.82
6.85
7.58
7.66
7.68
9.77
9.81
9.78
9.58
9.47
9.29
9.34
9.11
8.80
8.95
8.68
8.35
9.35
9.10
8.73
9.19
8.95
8.56
8.91
8.63
8.31
8.93
8.65
8.36
8.86
8.59
8.27
6.57
6.38
6.31
6.61
6.54
6.37
7.44
7.38
7.14
9.70
9.70
9.29
9.48
9.27
8.97
9.24
8.77
8.22
8.80
8.32
7.80
9.27
8.77
8.15
9.03
8.60
8.04
8.75
8.30
7.82
8.80
8.29
7.75
8.75
8.19
7.70
6.38
6.28
6.75
6.78
7.56
7.60
9.68
9.63
9.35
9.15
8.97
8.66
8.54
8.19
8.94
8.55
8.74
8.34
8.52
8.18
8.55
8.22
8.46
8.09
6.61
6.51
6.50
6.7<r
6.75
6.87
7.01
1.0T
7.59
7.73
7.91
7.85
9.81
9.94
10.13
10.04
9.61
9.59
9.60
9.66
9.35
9.20
9.09
9.28
8.96
8.76
8.59
8.85
9.35
9.16
8.98
9.31
9.19
9.00
8.79
9.16
8.93
8.71
8.53
8.91
8.95
8.75
8.61
8.81
8.89
8.69
8.52
8.84
5.97
6.02
6.07
5.78
6.03
6.33
6.67
6.91
7.13
8.65
8.65
8.64
8.43
8.41
8.31
8.15
7.93
7.84
7.88
7.61
7.36
8.03
7.79
7.71
7.81
7.58
7.42
7.77
7.52
7.32
7.97
7.73
7.43
7.98
7.62
7.35
5.98
6.03
6.18
5.82
6.05
6.33
6.68
6.92
7.17
8.70
8.73
8.75
8.40
8.39
8.44
8.22
8.00
8.18
7.92
7.63
7.58
8.07
7.78
n.a.
7.96
7.63
7.58
7.76
7.50
n.a.
7.87
7.67
n.a.
8.09
7.73
n.a.
6.45
6.86
7.06
7.30
7.54
7.67
7.84
7.78
6.77
7.42
7.68
7.94
8.23
8.39
n.a.
8.59
7.65
8.10
8.26
8.47
8.71
8.85
n.a.
8.%
9.36
9.45
9.40
9.30
9.24
9.18
n.a.
9.03
8.98
9.02
8.98
8.91
8.88
8.86
n.a.
8.83
8.44
8.41
8.37
8.29
8.31
8.28
n.a.
8.27
7.89
7.82
7.83
7.83
7.94
8.02
n.a.
8.08
8.28
8.23
8.20
8.13
8.16
8.14
n.a.
8.10
7.97
7.95
7.94
7.93
8.07
8.08
n.a.
8.09
7.85
7.79
7.80
7.81
7.92
8.01
n.a.
8.05
7.96
7.88
7.89
7.88
7.98
8.07
n.a.
8.14
7.86
7.75
7.77
7.75
7.86
7.97
n.a.
8.08
8.14
8.64
8.98
9.18
8.95
8.40
8.19
8.25
8.22
8.17
8.25
8.17
6.95
7.76
7.32
7.14
8.17
7.63
7.36
7.83
7.68
7.37
7.82
7.49
7.22
7.66
7.25
6.79
7.27
7.02
6.69
7.17
6.96
6.75
7.15
7.02
6.73
7.15
7.00
6.68
7.15
6.92
6.73
7.17
6.95
6.60
7.20
6.95
9.71
9.02
9.47
9.95
10.39
9.91
9.38
9.68
9.99
10.58
10.18
9.71
9.94
10.24
10.83
10.14
9.79
9.94
10.20
10.61
9.97
9.59
9.77
10.01
10.48
9.50
9.10
9.29
9.59
10.03
9.34
8.93
9.14
9.42
9.87
9.42
9.02
9.21
9.49
9.96
9.38
8.97
9.20
9.46
9.91
9.34
8.94
9.15
9.40
9.85
9.35
8.93
9.14
9.43
9.91
9.32
8.91
9.10
9.41
9.86
9.61
9.95
10.20
10.33
10.09
9.66
9.54
9.49
9.54
9.57
9.60
9.45
8.76
3.48
8.37
3.08
9.23
3.64
9.50
3.59
9.32
3.52
8.96
3.44
8.81
3.38
8.%
3.43
8.92
3.49
8.85
3.39
8.76
3.33
8.69
3.31
CAPITAL MARKET RATES
21
22
23
24
25
26
'2V
28
29
30
31
32
33
34
35
36
37
38
U.S. Treasury notes and bonds 11
Constant maturities
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite
Over 10 years (long-term)
State and local notes and bonds
Moody's series 14
Aaa
Baa
Bond Buyer series
Corporate bonds
Seasoned issues 16
All industries
Aaa
Aa
A
Baa
A-rated, recently offered utility
bonds"
MEMO: Dividend/price ratio 18
39
Preferred stocks
40
Common stocks
1. Weekly, monthly and annual figures are averages of all calendar days,
where the rate for a weekend or holiday is taken to be the rate prevailing on the
preceding business day. The daily rate is the average of the rates on a given day
weighted by the volume of transactions at these rates.
2. Weekly figures are averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of New York.
4. Unweighted average of offering rates quoted by at least five dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before 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
1989
1988
Indicator
1987
1986
1988
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
136.03
155.85
119.87
71.36
147.19
161.78
195.31
140.39
74.29
146.48
149.97
180.83
134.01
72.22
127.41
152.67
182.25
137.51
79.28
130.05
155.35
187.75
144.06
74.81
128.83
160.35
194.62
153.09
75.87
132.26
165.08
200.00
162.66
77.84
137.19
164.56
197.58
153.85
87.16
146.14
169.38
204.81
164.32
79.69
143.26
175.30
211.81
169.05
84.21
146.82
180.76
216.75
173.47
87.95
154.08
185.15
221.74
179.32
90.40
157.78
6 Standard & Poor's Corporation
(1941-43 = 10)'
236.39'
287.(xy
265.88
271.02
276.51
285.41
294.01
292.71
302.25
313.93
323.73
331.92
7 American Stock Exchange
(Aug. 31, 1973 = 50?
264.91
316.78
295.08
292.11
298.59
316.14
323.97
327.47
336.82
349.50
362.73
368.52
141,020
11,846
188,922
13,832
161,386
9,955
134,420
8,497
135,233
11,227
168,204
10,797
169,223
11,780
159,024
11,395
161,863
11,529
171,495
11,699
180,680
13,519
162,501
11,707
Volume of trading (thousands of shares)
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers 3
36,840
31,990
32,740
33,640
32,740
32,530
31,480
32,130
32,610
33,140
34,730
34,360
4,880
19,000
4,750
15,640
5,660
16,595
4,920
15,185
5,660
16,595
5,790
15,705
5,605
16,195
5,345
16,045
5,450
16,125
5,250
15,965
6,900
19,080
5,420
16,345
4
Free credit balances at brokers
11 Margin-account
12 Cash-account
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. New 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 Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting
it at 30 percent of the current market-value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26
DomesticNonfinancialStatistics • October 1989
1.37 SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1988
Account
1986
1989
1987
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
FSLIC-insured institutions
1 Assets
1,163,851
2 Mortgages
697,451
3 Mortgage-backed
securities
158,193
4 Contra-assets to
mortgage assets 1 .
41,799
5 Commercial loans
23,683
6 Consumer loans
51,622
7
Contra-assets to nonmortgage loans . . . .
3,041
8 Cash and investment
securities
164,844
9 Other 3
112,898
10 Liabilities and net worth . 1,163,851
11
12
13
14
15
16
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
890,664
196,929
100,025
96,904
23,975
52,282
1,250,855 1,311,668
1,323,840 1,332,878
1,332,905' 1,350,500' 1,337,426' 1,339,157' 1,340,732' 1,345,538' 1,346,714
721,593
751,421
754,389
760,79c
763,001'
764,513'
767,197'
767,531'
769,328'
773,341'
774,328
201,828
210,573
211,195
211,833'
212,512'
214,587'
211,337'
213,119'
215,17C
216,149'
216,282
42,344
23,163
57,902
39,078
25,099
62,417
38,500
24,782
61,558
38,297'
25,413
61,053
37,739'
25,513
61,504
37,95c
33,889'
61,922'
37,188'
33,191'
62,111'
37,036'
33,193'
62,085'
37,747'
33,067'
61,468'
37,769'
32,847'
61,691'
37,489
33,050
61,866
3,467
3,118
3,074
169,717
122,462
175,793
128,561
183,178
130,313
1,250,855 1,311,668
932,616
249,917
116,363
133,554
21,941
46,382
968,294
266,787
120,677
146,110
28,903
47,684
2,932
2,959
184,637'"
130,388
179,830
131,243'
1,323,840 1,332,878
973,742
273,665
123,436
150,229
26,021
50,412
976,163
278,301
124,368
153,933
27,558
50,855'
3,056'
2,938'
3,014'
3,135'
2,851'
2,923
186,986'
129,61C
178,813'
124,903'
177,154'
126,125'
177,172'
125,478'
175,99C
126,14C
174,361
127,239
1,332,905' 1,350,50C 1,337,426' 1,339,157' 1,340,732' 1,345,538' 1,346,714
971,497'
281,088'
127,548
153,54C
29,178'
51,143
971.70C
299,399'
134,168
165,231'
24,216'
55,185'
963,83C
299,408'
135,712
163,696'
29,743'
58,864'
957,361'
305,667'
140,089
165,578'
31,764'
58,916'
956,662'
312,972'
146,007'
166,965'
29,592'
57,393'
954,496'
318,647'
147,993'
170,654'
31,679'
56,208'
955,565
318,367
146,513
171,854
33,628
54,685
FSLIC-insured federal savings banks
210,562
284,270
357,897
367,928
369,682
374,930
425,983
423,895
432,690
443,196
455,195
469,973
18 Mortgages
113,638
19 Mortgage-backed
securities
29,766
20 Contra-assets to
mortgage assets' .
n.a.
21 Commercial loans
n.a.
22 Consumer loans
13,180
23
Contra-assets to nonmortgage loans . . . . n.a.
24 Finance leases plus
interest
n.a.
25 Cash and investment . . .
n.a.
26 Other
19,034
17 Assets
161,926
204,351
207,952
207,207
210,732
227,869
231,664
235,391
241,313
246,716
253,842
45,826
55,688
56,399
56,630
57,815
64,957
62,770
65,896
68,053
69,935
73,930
9,100
6,504
17,696
10,893
8,568
22,526
10,982
8,694
22,420
10,894
8,880
22,421
10,901
9,041
22,679
13,140
16,731
24,222
12,266
16,171
25,050
12,672
16,320
25,991
13,168
16,319
26,148
13,027
16,508
26,725
13,237
16,943
27,995
803
889
812
856
935
828
901
946
57,989
34,646
965
59,042
36,313
998
61,330
37,367
1,072
62,083
38,052
27 Liabilities and net worth .
28
29
30
31
32
33
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
678
734
785
789
591
35,347
24,069
791
44,859
32,740
804
48,984
34,442
804
48,818
29,178
831
48,028
29,942
880
61,029
35,428
905
57,454
33,974
210,562
284,270
357,897
367,928
369,682
374,930
425,983
423,895
432,690
443,196
455,195
469,973
157,872
37,329
19,897
17,432
4,263
11,098
203,196
60,716
29,617
31,099
5,324
15,034
256,223
75,859
35,357
40,502
8,052
17,661
261,862
80,674
37,245
43,429
7,374
17,886
262,922
80,779
37,510
43,269
7,667
18,194
263,984
83,628
39,630
43,998
8,319
18,882
298,197
99,286
46,265
53,021
8,075
20,235
298,530
98,304
46,470
51,834
8,275
21,633
301,778
102,902
48,951
53,951
8,885
22,142
307,588
107,179
51,531
55,648
8,608
23,218
315,725
109,997
53,513
56,484
9,311
23,340
324,372
114,847
55,457
59,390
10,185
23,896
Savings banks
34 Assets
35
36
37
38
Loans
Mortgage
Other
Securities
U.S. government
Mortgage-backed
securities
State and local
government
Corporate and other .
Cash
Other assets
236,866
259,643
253,453
255,510
257,127
258,537
261,361
254,319
254,165
255,226
255,006
257,531
118,323
35,167
138,494
33,871
141,316
32,799
143,626
32,879
145,398
33,234
146,501
33,791
147,597
31,269
144,998
32,450
145,426
32,369
145,174
33,194
145,699
32,329
144,687
34,464
14,209
13,510
11,353
11,182
10,896
10,804
11,457
10,485
10,315
10,318
10,391
10,154
25,836
32,772
30,006
29,190
29,893
29,372
29,751
29,258
29,085
29,373
29,572
30,275
2,185
20,459
6,894
13,793
2,003
18,772
5,864
14,357
1,901
17,301
4,950
13,827
1,878
17,234
5,463
14,058
1,872
16,886
4,825
14,123
1,887
16,773
5,093
14,316
1,848
17,822
7,050
14,567
1,835
15,964
5,532
13,797
1,829
15,812
5,465
13,864
1,814
15,984
5,972
13,397
1,798
15,588
6,068
13,561
1,984
15,763
5,591
14,613
43 Liabilities
236,866
259,643
253,453
255,510
257,127
258,537
261,361
254,319
254,165
255,226
255,006
257,531
44 Deposits
45
Regular 4
46
Ordinary savings . .
47
Time
Other
48
49 Other liabilities
50 General reserve
accounts
192,194
186,345
37,717
100,809
5,849
25,274
201,497
196,037
41,959
112,429
5,460
35,720
195,907
190,716
39,738
114,255
5,191
34,776
197,665
192,228
39,618
116,387
5,427
35,001
197,925
192,663
39,375
117,712
5,262
35,997
199,092
194,095
39,482
119,026
4,997
36,012
202,058
196,407
39,750
121,148
5,651
36,169
195,452
190,378
38,221
118,612
5,074
33,782
195,308
190,422
38,049
119,109
4,886
33,642
199,399
194,276
38,070
123,162
7,206
30,500
199,538
194,059
36,801
125,378
5,479
30,020
199,790
194,636
36,661
126,185
5,154
33,084
18,105
20,633
20,018
20,151
20,324
20,462
20,337
20,138
20,336
20,338
20,254
19,874
39
40
41
42
Financial Markets A23
1.37—Continued
1989
1988
Account
1986
1987
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Credit unions 5
51 Total assets/liabilities
and capital
52
53
147,726
Federal
State
95,483
52,243
54 Loans outstanding..
55
Federal
56
State
57 Savings
58
Federal
59
State
86,137
55,304
30,833
134,327
87,954
46,373
f
173,044
174,649
174,722
174,406
174,593
175,027
176,270
178,175
177,417
178,812
|
112,686
60,358
113,383
61,266
113,474
61,248
113,717
61,135
114,566
60,027
114,909
60,118
115,543
60,727
117,555
60,620
115,416
62,001
116,705
62,107
108,974
70,944
38,030
158,731
103,657
54,246
110,939
72,200
38,739
157,944
103,698
55,990
111,624
72,551
39,073
160,174
104,184
55,798
112,452
73,100
39,352
159,021
103,223
54,579
113,191
73,766
39,425
159,010
104,431
54,477
114,012
74,083
39,927
159,106
104,629
55,811
113,880
73,917
39,963
161,073
105,262
56,954
114,572
74,395
40,177
164,322
107,368
56,180
115,249
75,003
40,246
161,388
105,208
56,347
116,947
76,052
40,895
162,134
105,787
n.a.
n.a.
n.a.
1
I
T
55,074
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
937,551
1,044,459
1,121,337
1,131,179
1,139,490
1,144,854
1,157,140
1,167,184
1,173,325
1,184,963
84,640
59,033
11,659
13,948
492,807
401,943
90,864
193,842
31,615
54,055
80,592
84,426
57,078
10,681
16,667
569,199
472,684
96,515
203,545
34,172
53,626
89,586
88,362
60,407
11,190
16,765
624,917
520,7%
104,121
233,438
35,920
53,194
95,505
87,588
59,874
11,054
16,660
630,086
525,336
104,750
225,627
35,892
53,149
98,837
88,883
60,621
11,069
17,193
633,390
527,419
105,971
227,342
36,892
53,157
99,826
89,510
61,108
11,189
17,213
638,350
532,197
106,153
229,234
36,673
53,148
94,116
88,167
60,685
11,126
16,356
644,894
538,053
106,841
232,639
37,972
53,020
95,518
88,747
61,042
11,036
16,669
655,149
545,970
109,179
233,334
38,112
53,210
98,632
88,168
60,800
10,736
16,632
659,826
550,630
109,1%
233,827
38,690
53,265
99,550
88,941
61,175
10,848
16,918
665,843
556,3%
109,447
234,910
38,942
53,364
102,%3
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.
NOTE. FSLlC-insured institutions: Estimates by the FHLBB for all institutions
insured by the FSLIC and based on the FHLBB thrift Financial Report.
FSLIC-insured federal savings banks: Estimates by the FHLBB for federal
savings banks insured by the FSLIC and based on the FHLBB 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
Domestic Financial Statistics • October 1989
1.38 FEDERAL FISCAL AND FINANCING 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
Off-budget
6
7 Surplus, or deficit ( - ) , total
On-budget
8
9
Off-budget
Source of financing (total)
Borrowing from the public
Operating cash (decrease, or increase
(-)h
12 Other 2
10
11
Fiscal
year
1986
Fiscal
year
1987
Fiscal
year
1988
1989
Feb.
Mar.
Apr.
May
128,952
99,679
29,273
88,381
71,798
16,582
40,572
27,881
12,691
71,115
49,493
21,622
96,581
77,851
18,730
-25,466
-28,358
2,891
769,091
568,862
200,228
990,258
806,760
183,498
-221,167
-237,898
16,731
854,143
640,741
213,402
1,003,830
809,998
193,832
-149,687
-169,257
19,570
908,953
667,462
241,491
1,064,044
861,352
202,691
-155,090
-193,890
38,800
61,978
38,473
23,505
89,850
71,324
18,526
-27,871
-32,851
4,979
68,276
44,677
23,598
104,055
85,191
18,864
-35,779
-40,513
4,735
June
July
108,317
84,110
24,206
100,528
83,994
16,534
7,789
116
7,673
66,255
45,737
20,518
84,494
66,688
17,806
-18,239
-20,951
2,712
236,187
150,070
162,062
17,190
13,405
-1,291
10,214
1,098
-3,962
-14,324
-696
-5,052
4,669
-7,963
991
17,009
-6,328
10,154
12,221
-38,788
-493
21,396
-6,144
-11,649
2,762
21,564
636
31,384
7,514
23,870
36,436
9,120
27,316
44,398
13,024
31,375
24,826
6,298
18,528
14,672
4,462
10,211
53,461
22,952
30,508
32,065
5,289
26,776
43,713
12,154
31,560
22,149
5,312
16,837
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 gain/loss 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 FinanceA33
1.39 U.S. BUDGET RECEIPTS AND OUTLAYS 1
Millions of dollars
Calendar year
Source or type
Fiscal
year
1987
Fiscal
year
1988
1987
1989
1988
1989
H2
HI
H2
HI
May
June
July
RECEIPTS
1 All sources
2 Individual income taxes, net
3
Withheld
Presidential Election Campaign Fund
4
5
Nonwithheld
6
Refunds
Corporation income taxes
7
Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10
Employment taxes and
contributions
11
Self-employment taxes and
contributions
12 Unemployment insurance
13 Other net receipts
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 5
854,143
908,954
421,712
476,115
449,821
528,007
71,115
108,317
66,255
392,557
322,463
33
142,957
72,8%
401,181
341,435
33
132,199
72,487
192,575
170,203
4
31,223
8,853
207,659
169,300
28
101,614
63,283
200,299
179,600
4
29,880
9,187
233,568
174,230
28
121,563
62,255
25,336
29,085
8
14,842
18,599
49,876
33,338
4
18,509
1,975
29,377
28,343
1
2,424
1,392
102,859
18,933
109,683
15,487
52,821
7,119
58,002
8,706
56,409
7,384
61,585
7,812
2,994
1,068
21,418
849
2,921
880
303,318
334,335
143,755
181,058
157,603
200,127
35,349
31,276
27,941
273,028
305,093
130,388
164,412
144,983
184,569
27,281
30,572
25,979
13,987
25,575
4,715
17,691
24,584
4,659
1,889
10,977
2,390
14,839
14,363
2,284
3,032
10,359
2,262
16,371
13,279
2,277
1,281
7,661
407
2,389
294
410
0
1,614
348
32,457
15,085
7,493
19,307
35,540
16,198
7,594
19,909
17,680
7,993
3,610
10,399
16,440
7,913
3,863
9,950
19,434
8,535
4,054
10,873
17,371
8,350
4,583
10,235
3,640
1,466
793
2,605
2,987
1,482
736
1,389
2,779
1,495
689
1,933
1,003,830
1,064,055
532,839
513,210
553,217
565,958
%,581
100,528
84,494
281,999
11,649
9,216
4,115
13,363
26,606
290,361
10,471
10,841
2,297
14,606
17,210
146,995
4,487
5,469
1,468
7,590
14,640
143,080
7,150
5,361
555
6,776
7,872
150,4%
2,636
5,852
1,966
8,330
7,725
148,098
6,605
6,238
2,221
7,022
9,619
25,012
1,398
1,128
267
1,396
1,470
29,037
867
1,171
509
1,419
504
21,220
347
1,000
106
1,164
499
6,182
26,222
5,051
18,808
27,272
5,294
3,852
14,0%
2,075
5,951
12,700
2,765
20,274
14,922
2,690
4,129
13,023
1,833
558
2,668
-25
973
2,397
563
1,494
2,294
535
OUTLAYS
18 Ail types
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology . . . .
Energy
Natural resources and environment
Agriculture
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
29,724
31,938
15,592
15,451
16,152
18,0%
3,039
2,654
2,637
29 Health
30 Social security and medicare
31 Income security
39,%8
282,472
123,250
44,490
297,828
129,332
20,750
158,469
61,201
22,643
135,322
65,555
23,360
149,508
64,978
24,078
162,195
70,937
4,454
27,067
12,106
4,270
30,430
9,826
4,124
26,142
10,264
32
33
34
35
36
37
26,782
7,548
5,948
1,621
138,570
-36,455
29,428
9,223
7,658
1,816
151,748
-36,%7
14,956
4,291
3,560
1,175
71,933
-17,684
13,241
4,761
4,337
448
76,098
-17,766
15,797
4,778
5,137
0
78,317
-18,771
14,891
5,233
3,858
0
86,009
-18,131
2,809
1,066
872
n.a.
14,605
-3,309
3,590
851
1,140
n.a.
13,376
-3,050
1,196
847
-53
n.a.
14,003
-3,325
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest 8
1
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 1990.
A30
Domestic Financial Statistics • October 1989
1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1987
1988
1989
Item
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
1 Federal debt outstanding
2,250.7
2,313.1
2,354.3
2,435.2
2,493.2
2,555.1
2,614.6
2,707.3
2,763.6
2 Public debt securities
3
Held by public
4
Held by agencies
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
2,547.7
2,013.4
534.2
2,602.2
2,051.7
550.4
2,684.4
2,095.2
589.2
2,740.9
2,133.4
607.5
4.0
2.9
1.1
3.8
2.8
1.0
4.0
3.0
1.0
3.5
2.7
.8
5.6
5.1
.6
7.4
7.0
.5
12.4
12.2
.2
22.9
22.6
.3
22.7
22.3
.4
5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
2,232.4
2,295.0
2,336.0
2,417.4
2,472.6
2,532.2
2,586.9
2,669.1
2,725.6
9 Public debt securities
10 Other debt 1
2,231.1
1.3
2,293.7
1.3
2,334.7
1.3
2,416.3
1.1
2,472.1
.5
2,532.1
.1
2,586.7
.1
2,668.9
.2
2,725.5
.2
11 MEMO: Statutory debt limit
2,300.0
2,320.0
2,800.0
2,800.0
2,800.0
2,800.0
2,800.0
2,800.0
2,800.0
1. Includes guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.
1.41 GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. Treasury Bulletin and Monthly
United States.
Statement
of the Public Debt of the
Types and Ownership
Billions of dollars, end of period
1988
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
State and local government series
Foreign issues
Government
Public
Savings bonds and notes.
Government account series
14 Non-interest-bearing debt
15
16
17
18
19
20
21
22
23
24
25
26
By holder4
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Money market funds
Insurance companies
Other companies
State and local Treasurys
Individuals
Savings bonds
Other securities
Foreign and international 5
Other miscellaneous investors
1985
1989
1987
Q2
Q3
Q4
Q1
1,945.9
2,214.8
2,431.7
2,684.4
2,547.7
2,602.2
2,684.4
2,740.9
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
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
2,663.1
1,821.3
414.0
1,083.6
308.9
841.8
151.5
6.6
6.6
.0
107.6
575.6
2,545.0
1,769.9
382.3
1,072.7
299.9
775.1
146.9
5.7
5.7
.0
104.5
517.5
2,599.9
1,802.9
398.5
1,089.6
299.9
797.0
147.6
6.3
6.3
.0
106.2
536.5
2,663.1
1,821.3
414.0
1,083.6
308.9
841.8
151.5
6.6
6.6
.0
107.6
575.6
2.738.3
1,871.7
417.0
1.121.4
318.4
866.6
154.4
6.7
6.7
.0
110.4
594.7
2.5
2.8
2.8
21.3
2.7
2.3
21.3
2.6
348.9
181.3
1,417.2
198.2
25.1
78.5
59.0
226.7
403.1
211.3
1,602.0
203.5
28.0
105.6
68.8
262.8
477.6
222.6
1,745.2
201.2
14.3
120.6
84.6
282.6
589.2
238.4
1,852.8
195.0
534.2
227.6
1,784.9
202.5
13.1
132.2
86.5
286.3
550.4
229.2
1,819.0
203.0
10.8
135.0
86.0
287.0
589.2
238.4
1,852.8
195.0
607.5
228.6
1,900.2
n.a.
n.a.
n.a.
n.a.
n.a.
79.8
75.0
212.5
462.4
92.3
70.5
251.6
518.9
101.1
72.3
287.3
581.2
109.6
77.8
349.5
n.a.
106.2
73.9
332.8
551.4
107.8
76.7
333.3
579.4
109.6
77.8
349.5
n.a.
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. Treasury agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. Treasury agencies and trust funds
are actual holdings; data for other groups are Treasury estimates.
1986
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
18.8
n.a.
86.1
n.a.
18.8
n.a.
86.1
n.a.
112.2
n.a.
363.1
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 U.S. GOVERNMENT SECURITIES DEALERS
A3 3
Transactions1
Par value; averages of daily figures, in millions of dollars
1989
Item
1
2
3
4
5
6
'/
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
5-10 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
1986
1987
May
June
July
June 21
June 28
July 5
July 12
July 19
July 26
95,444
110,050
101,623
120,937
129,260
114,100
116,830
122,744
117,383
125,731
108,902
104,347
34,247
2,115
24,667
20,455
13,961
37,924
3,271
27,918
24,014
16,923
29,387
3,426
27,777
24,939
16,093
29,376
3,594
38,126
30,673
19,167
30,761
3,388
34,861
35,666
24,585
29,002
2,697
31,596
33,578
17,227
28,083
2,719
27,850
33,791
24,388
29,920
3,400
35,386
31,912
22,125
33,014
4,050
35,505
29,011
15,802
29,843
2,914
35,278
39,470
18,226
27,034
2,507
29,118
33,330
16,914
27,649
1,747
29,682
29,775
15,494
3,669
2,936
2,761
2,966
3,200
3,093
3,674
2,986
2,729
2,952
2,437
3,369
49,558
42,217
16,747
4,355
3,272
16,660
61,539
45,575
18,084
4,112
2,965
17,135
59,844
39,019
15,903
3,369
2,316
22,927
72,410
45,560
16,303
2,650
2,113
29,109
78,131
47,929
19,904
2,940
2,508
32,185
66,757
44,249
20,857
3,020
2,592
33,548
72,166
40,990
19,594
2,678
2,306
32,839
73,008
46,750
17,908
2,870
2,377
34,595
67,472
47,181
16,474
2,870
2,824
33,571
73,876
48,902
23,668
3,725
3,055
36,668
65,234
41,231
24,917
2,714
2,268
33,540
61,919
39,058
17,906
2,334
2,280
29,607
3,311
7,175
16
3,233
8,963
5
2,627
9,695
1
2,501
10,280
0
1,845
12,844
3
1,600
9,020
21
1,695
12,824
6
1,794
11,578
6
2,000
9,250
4
1,165
9,213
4
1,663
10,082
29
2,299
7,377
28
1,876
7,830
2,029
9,290
2,095
8,008
2,752
9,976
1,526
9,820
1,652
10,258
1,001
10,454
2,489
7,451
1,385
5,410
1,478
13,303
1,733
13,282
1,837
8,445
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of New York by the U.S. government securities dealers on
its published list of primary dealers.
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
1989
1988
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 1989
1.43 U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing1
Averages of daily figures, in millions of dollars
1989
Item
1986
1987
1989
1988
May
June
July
June 28
July 5
July 12
July 19
July 26
Positions
Net immediate 2
U.S. Treasury securities
12,912
-6,216
-22,765
-14,757
-6,279
-44
-6,088
2,219
787
1,883
-4,092
2
3
4
5
6
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
12,761
3,705
9,146
-9,505
-3,197
4,317
1,557
649
-6,564
-6,174
2,238
-2,236
-3,020
-9,663
-10,084
1,162
-1,727
-2,115
-6,055
-6,024
378
-435
4,651
-5,050
-5,822
1,415
-852
11,687
-7,693
-4,601
1,236
-1,035
5,210
-6,187
-5,313
1,347
-2,042
13,841
-5,893
-5,034
2,179
-892
12,051
-6,796
-5,754
2,343
-120
11,126
-6,155
-5,311
-56
-782
9,923
-9,313
-3,864
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
32,984
10,485
5,526
8,089
31,911
8,188
3,660
7,496
28,230
7,300
2,486
6,152
27,121
5,778
1,948
8,600
29,491
6,037
2,357
8,830
31,278
7,028
2,122
9,894
29,217
6,241
2,462
7,177
26,862
6,379
1,989
7,516
28,709
6,782
1,990
9,428
33,130
7,446
2,031
9,216
32,001
7,393
2,397
10,905
-18,059
3,473
-153
-3,373
5,988
-95
-2,210
6,224
0
-5,729
-290
0
-4,764'
-2,288'
14
-5,802
-3,254
45
-4,413'
-3,096'
35
-4,896
-4,725
22
-5,866
-3,260
13
-6,667
-2,298
70
-5,587
-2,525
45
-2,144
-11,840
-1,211
-18,817
346
-16,348
-1,378
-16,748
-1,885
-20,200
-1,389
-19,523
-2,164
-18,169
-2,212
-16,565
-1,759
-19,585
-1,925
-21,807
-568
-18,443
1
11
12
13
14
15
Financing 3
Reverse repurchase agreements 4
Overnight and continuing
Term
Repurchase agreements
IX Overnight and continuing
19 Term
16
17
98,913
108,607
126,709
148,288
136,327
177,477
155,365
229,265
166,152'
243,026'
139,858
197,148
160,216
250,821
162,238
222,065
168,320
235,363
162,846
229,433
158,895
229,989
141,823
102,397
170,763
121,270
172,695
137,056
202,739
185,554
229,554'
189,841'
194,571
165,284
226,812
204,167
232,959
173,757
231,896
193,025
227,464
192,360
218,063
204,552
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of New York by the U.S. Treasury
securities dealers on its published list of primary dealers.
Data for positions are averages of daily figures, in terms of par value, based on
the number of trading days in the period. Positions are net amounts and are shown
on a commitment basis. Data for financing are in terms of actual amounts
borrowed or lent and are based on Wednesday figures.
2. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on
a commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Immediate positions include
reverses to maturity, which are securities that were sold after having been
obtained under reverse repurchase agreements that mature on the same day as the
securities. Data for immediate positions do not include forward positions.
3. Figures cover financing involving U.S. Treasury and federal agency securities, negotiable 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 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A3 3
Debt Outstanding
Millions of dollars, end of period
1989
1986
1985
Agency
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department
Export-Import Bank 2 '
4
5
Federal Housing Administration
6
Government National Mortgage Association participation
certificates 5
7
Postal Service 6
8
Tennessee Valley Authority
United States Railway Association
9
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 8
15
Student Loan Marketing Association
16
Financing Corporation
17
Farm Credit Financial Assistance Corporation"
1987
1988
Feb.
Mar.
Apr.
May
June
293,905
307,361
341,386
381,498
390,803
397,318
402,764r
407,323
403,748
36,390
71
15,678
115
36,958
33
14,211
138
37,981
13
11,978
183
35,668
8
11,033
150
35,768
8
11,033
165
36,348
8
11,007
172
36,402
7
11,007
182
36,275
7
11,007
196
36,403
7
11,013
218
2,165
1,940
16,347
74
2,165
3,104
17,222
85
1,615
6,103
18,089
0
0
6,142
18,335
0
0
6,142
18,420
0
0
6,742
18,419
0
0
6,742
18,464
0
0
6,445
18,620
0
0
6,445
18,720
0
257,515
74,447
11,926
93,8%
68,851
8,395
n.a.
n.a.
270,553
88,752
13,589
93,563
62,478
12,171
n.a.
n.a.
303,405
115,725
17,645
97,057
55,275
16,503
1,200
n.a.
345,830
135,834
22,797
105,459
53,127
22,073
5,850
690
355,035
144,343
21,320
105,201
52,441
25,190
5,850
690
360,970
149,950
23,392
104,666
52,069
23,753
6,450
690
366,362'
154,146
22,676
104,675
51,678
25,361
6,98(K
846
371,048
156,354
21,620
105,404
53,375
26,469
6,980'
846
367,345
153,892
22,156
106,308
52,387
24,256
7,500
846
153,373
157,510
152,417
142,850
142,123
141,864
141,162r
140,220
139,568
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
11,027
5,892
4,910
16,955
0
11,027
5,892
4,910
17,040
0
11,001
6,492
4,910
17,039
0
11,001
6,492
4,910
17,084
0
11,001
6,195
4,910
17,240
0
11,007
6,195
4,910
17,340
0
64,234
20,654
31,429
65,374
21,680
32,545
59,674
21,191
32,078
58,496
19,246
26,324
58,4%
19,245
25,513
57,841
19,195
25,386
57,086
19,230
25,359
56,311
19,236
25,327
55,586
19,236
25,294
MEMO
18 Federal Financing Bank debt 12
19
20
21
22
23
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 Lending13
24 Farmers Home Administration
25 Rural Electrification Administration
26 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. Excludes borrowing by the Farm Credit Financial Assistance Corporation,
shown in line 17.
9. Before late 1981, the Association obtained financing through the Federal
Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is
shown on line 21.
10. The Financing Corporation, established in August 1987 to recapitalize the
Federal Savings and Loan Insurance Corporation, undertook its first borrowing in
October 1987.
11. The Farm Credit Financial Assistance Corporation (established in January
1988 to provide assistance to the Farm Credit System) undertook its first
borrowing in July 1988.
12. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since FFB
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
13. 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 1989
1.45 NEW SECURITY ISSUES
Tax-Exempt State and Local Governments
Millions of dollars
1988
Type of issue or issuer,
or use
1986
1989
1988r
1987
Dec/
Jan.
Feb.
Mar.
Apr.
May
June r
July
1 All issues, new and refunding 1
147,011
102,407
114,522
11,948
6,640
8,054
8,626
7,464
7,435
13,775
7,950
Type of issue
2 General obligation
3 Revenue
46,346
100,664
30,589
71,818
30,312
84,210
2,617
9,331
1,784
4,856
3,955
4,099
2,185
6,441
2,301
5,163
2,342
5,093
4,960
8,815
3,703
4,247
Type of issuer
4 State
,
5 Special district and statutory authority 2
6 Municipalities, counties, and townships
14,474
89,997
42,541
10,102
65,460
26,845
8,830
74,409
31,193
1,031
7,930
2,897
280
4,882
1,478
1,896
3,832
2,326
256
5,962
2,408
1,407
4,238
1,819
392
4,979
2,064
1,989
8,033
3,753
967
4,323
2,660
7 Issues for new capital, total
83,492
56,789
79,665
9,188
4,141
5,222
6,486
6,061
5,938
10,078
6,418
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
12,307
7,246
14,594
11,353
6,190
31,802
9,524
3,677
7,912
11,106
7,474
18,020
15,021
6,825
8,496
19,027
5,624
24,672
2,697
574
559
2,103
1,064
2,191
827
344
1,335
509
293
834
826
382
847
743
250
2,174
1,055
445
901
1,329
253
2,503
1,225
743
759
1,048
374
1,912
1,024
748
467
1,376
361
1,962
2,678
576
1,058
1,509
329
3,928
984
268
518
1,572
312
2,764
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 NEW SECURITY ISSUES
SOURCES. Securities Data/Bond Buyer Municipal Data Base beginning 1986.
Public Securities Association for earlier data.
U.S. Corporations
Millions of dollars
1988
Type of issue or issuer,
or use
1986
1987
Nov.
1 All issues1
1989
1988
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
423,726
392,156
408,903r
24,531
12,389
17,404'
14,693'
26,499'
14,384
20,004
23,841
355,293
325,648
351,102r
21,096
10,338
14,243'
12,158'
25,577'
13,3%
19,403
21,036
231,936
80,760
42,5%
209,279
92,070
24,299
200,224r
127,700
23,178
16,798
n.a.
4,298
10,203
n.a.
135
11,383'
n.a.
2,860
9,964'
n.a.
2,194
22,995'
n.a.
2,582
11,471
n.a.
1,925
17,497
n.a.
1,906
18,128
n.a.
2,908
91,548
40,124
9,971
31,426
16,659
165,564
61,666
49,327
11,974
23,004
7,340
172,343
69,708'
61,91r
9,975
19,318
5,901
184,286
2,890
3,260
45
672
289
13,940
1,485
748
0
264
158
7,683
1,660
2,047
0
665'
0
9,871
1,319
1,118
102
67C
230
8,718'
7,456
882
0
153
63
17,023'
1,457
843
100
1,695
453
8,848'
7,716
2,162
150
385
122
8,869
3,273
1,628
480
2,936
4
12,647
12 Stocks 3
68,433
66,508
57,802
3,435
2,051
1,251'
2,535
611
988
1,601
2,820
Type
13 Preferred
14 Common
15 Private placement 3
11,514
50,316
6,603
10,123
43,225
13,157
6,544
35,911
15,346
478
2,957
n.a.
495
1,556
n.a.
275
976'
n.a.
975
1,560
n.a.
0
611
n.a.
495
493
n.a.
325
1,276
n.a.
335
2,485
n.a.
15,027
10,617
2,427
4,020
1,825
34,517
13,880
12,888
2,439
4,322
1,458
31,521
7,608
8,449
1,535
1,898
515
37,798
430
52
20
70
20
2,843
425
89
0
20
59
1,459
33
32
220
50'
5
911
832
270
0
11
19
1,402
127
26
53
108
0
297
135
280
169
0
93
310
330
115
39
192
224
702
626
508
0
125
25
1,536
2 Bonds
2
Type of offering
3 Public, domestic
4 Private placement, domestic 3
5. Sold abroad
6
7
8
9
10
11
16
17
18
19
20
21
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures which represent gross proceeds of issues maturing in more than one
year, are principal amount or number of units multiplied by offering price.
Excludes secondary offerings, employee stock plans, investment companies other
than closed-end, intracorporate transactions, equities sold abroad, and Yankee
bonds. Stock data include ownership securities issued by limited partnerships.
2. Monthly data include only public offerings.
3. Data are not available on a monthly basis. Before 1987, annual totals include
underwritten issues only.
SOURCES. IDD Information Services, Inc., the Board of Governors of the
Federal Reserve System, and before 1989, the U.S. Securities and Exchange
Commission.
Securities Market and Corporate Finance
1.47 OPEN-END INVESTMENT COMPANIES
A35
Net Sales and Asset Position
Millions of dollars
1989
1988
1987
Item
1988
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
INVESTMENT COMPANIES 1
1 Sales of own shares 2
381,260
271,237
20,327
25,780
29,014
22,741
23,149
25,496
24,661
25,817
2 Redemptions of own shares 3
3 Net sales
314,252
67,008
267,451
3,786
20,599
-272
25,976
-1%
24,494
4,520
22,252
489
24,135
-986
26,183
-687
22,483
2,178
22,563
3,254
4 Assets4
453,842
472,297
470,660
472,297
487,204
482,697
483,067
497,329
509,781
515,071
43,488
427,172
45,090
427,207
49,661
437,543
47,908
434,789
46,262
436,805
48,788
448,541
49,177
460,604
48,428
466,643
5 Cash position
6 Other
5
38,006
415,836
45,090
427,207
4. Market value at end of period, less current liabilities.
5. Also includes all U.S. government securities and other short-term debt
securities.
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.
SOURCE. Survey of Current Business (Department of Commerce).
1. Data on sales and redemptions exclude money market mutual funds but
include limited maturity municipal bond funds. Data on asset positions exclude
both money market mutual funds and limited maturity municipal bond funds.
2. Includes reinvestment of 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.
1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1988
1987
1986
Account
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
2
3
4
5
6
7 Inventory valuation
8 Capital consumption adjustment
1987
1989
1988
Q3
Q4
Q1
Q2
Q3
Q4
Ql
Q2
282.1
221.6
106.3
115.3
91.3
24.0
298.7
266.7
124.7
142.0
98.7
43.3
328.6
306.8
137.9
168.9
110.4
58.5
313.0
281.0
132.7
148.3
100.0
48.3
308.2
276.2
127.3
148.9
102.8
46.1
318.1
288.8
129.0
159.9
105.7
54.2
325.3
305.3
138.4
166.9
108.6
58.3
330.9
314.4
141.2
173.2
112.2
61.1
340.2
318.8
143.2
175.6
115.2
60.4
316.3
318.0
144.4
173.6
118.5
55.1
309.1
297.6
133.3
164.3
120.9
43.4
6.7
53.8
-18.9
50.9
-25.0
46.8
-19.4
51.5
-20.4
52.4
-20.7
49.9
-28.8
48.9
-30.4
46.9
-20.1
41.5
-38.3
36.6
-20.7
32.3
• T r a d e and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment •
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1987
Industry
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
Railroad
5
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and other 2
1987
1988
1989
Q4
Ql
Q2
Q3
Q4
Ql
Q21
Q3 !
389.67
429.67
472.08
406.82
412.02
426.94
436.01
443.71
457.64
467.50
478.79
71.01
74.88
78.12
87.58
82.13
97.22
72.28
79.92
75.70
82.90
76.87
84.82
79.48
89.43
80.42
93.18
81.71
94.12
80.21
96.89
84.08
98.61
11.39
12.67
12.00
12.32
12.59
13.26
12.47
12.35
12.12
13.08
12.21
5.92
6.53
6.40
7.06
7.25
7.04
7.61
9.57
7.68
6.12
6.94
6.28
6.92
6.43
7.08
7.01
6.66
7.05
6.84
8.06
7.26
7.48
7.85
6.77
7.97
7.18
8.09
7.10
8.60
7.42
7.13
10.94
7.78
31.63
13.25
168.65
31.90
14.60
183.44
34.61
16.16
205.09
32.28
14.11
176.56
30.31
14.30
175.79
30.95
14.48
185.83
32.20
14.50
185.76
34.14
15.13
186.38
33.08
17.18
196.20
35.71
15.71
202.79
34.39
15.79
207.86
1. Anticipated by business.
2. "Other" consists of construction; wholesale and retail trade; finance and
1988
19891
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
A36
DomesticNonfinancialStatistics • October 1989
Assets and Liabilities1
1.51 DOMESTIC FINANCE COMPANIES
Billions of dollars, end of period
1987
1986
Account
1983
1984
1985
Q2
Q3
Q4
Q1
Q2
Q3
Q4
ASSETS
Accounts receivable, gross
Consumer
Business
Real estate
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
Less:
5 Reserves for unearned income
6 Reserves for losses
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
7 Accounts receivable, net
8 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
1
2
3
4
LIABILITIES
10 Bank loans
11 Commercial paper
Debt
12 Other short-term
13 Long-term
14 All other liabilities
15 Capital, surplus, and undivided profits
16 Total liabilities and capital
1. NOTE. Components may not add to totals because of rounding.
1.52 DOMESTIC FINANCE COMPANIES
Data after 1987:4 are currently unavailable. It is anticipated that these data will
be available later this year.
Business Credit Outstanding and Net Change1
Millions of dollars, seasonally adjusted
1989
Type
1 Total
?
3
4
5
6
7
8
9
10
11
1?
13
Retail financing of installment sales
Automotive
Equipment
Pools of securitized assets
Wholesale
Automotive
Equipment
All other
Pools of securitized assets 2
Leasing
Automotive
Equipment
Pools of securitized assets
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
1986
1987
1988
Feb.
Mar.
Apr.
May
June
172,060
205,810
234,529
237,378
240,186
244,882
245,861
249,322
26,015
23,112
n.a.
35,782
25,170
n.a.
36,548
28,298
n.a.
37,301
28,385
682
37,696
28,207
855
38,415
28,790
817
38,816
27,638
846
39,042
27,773
807
23,010
5,348
7,033
n.a.
30,507
5,600
8,342
n.a.
33,300
5,983
9,341
n.a.
34,386
6,193
9,569
0
33,528
6,088
9,682
0
34,383
6,153
9,852
0
34,534
6,0%
9,929
0
34,021
6,165
9,862
0
19,827
38,179
n.a.
21,952
43,335
n.a.
24,673
57,455
n.a.
24,847
58,045
699
25,584
59,484
756
25,544
60,246
733
26,011
61,022
824
26,515
63,370
7%
15,978
13,557
18,078
17,043
17,7%
21,134
17,404
19,867
17,794
20,512
18,677
21,272
18,772
21,371
19,302
21,669
Net change
14
15
16
17
18
19
20
21
22
23
24
25
26
Retail financing of installment sales
Automotive
Equipment
Pools of securitized assets
Wholesale
Automotive
Equipment
All other
Pools of securitized assets
Leasing
Automotive
Equipment
Pools of securitized assets 2
Loans on commercial accounts receivable and factored
commercial accounts receivable
All other business credit
15,763
33,750
28,719
1,409
2,808
4,6%
978
3,462
5,355
629
n.a.
9,767
2,058
n.a.
766
3,128
n.a.
260
-43
-42
394
-178
173
720
583
-38
401
-1,152
29
226
135
-39
-978
780
224
n.a.
7,497
252
1,309
n.a.
2,793
383
999
a .a.
722
10
76
0
-858
-105
114
0
856
65
170
0
151
-56
78
0
-513
69
-68
0
3,552
3,411
n.a.
2,125
5,156
n.a.
2,721
14,120
n.a.
289
-310
-22
736
1,439
57
-40
762
-23
467
776
91
504
2,348
-28
213
2,576
2,100
3,486
-282
4,091
716
-247
390
645
883
760
95
100
530
298
1. These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
2. Data on pools of securitized assets are not seasonally adjusted,
Real Estate
1.53
A37
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1989
Item
1986
1987
1988
Jan.
Feb.
Mar.
Apr.
May
June
July
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
Conventional mortgages on new homes
Terms1
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 year)
7 FHLBB series 3
8 HUD series
118.1
86.2
75.2
26.6
2.48
9.82
137.0
100.5
75.2
27.8
2.26
8.94
150.0
110.5
75.5
28.0
2.19
10.26
10.07
9.91
9.30
151.8
112.3
75.3
28.3
9.63
169.2
124.5
75.0
28.4
1.70
9.88
9.82
10.75
9.99
10.93
10.17
10.84
10.18
10.43
10.42
10.04
10.88
10.07
11.16
10.38
10.88
10.55
10.08
153.7
8.81
165.2
121.3
75.2
28.8
1.90
9.20
9.31
10.17
9.18
10.30
9.52
10.55
10.16
9.43
10.49
9.83
10.69
111.8
73.5
28.3
2.14
9.46
159.7
117.7
74.4
27.7
2.11
2.12
9.82
150.5
111.0
75.2
27.8
1.91
10.09
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (HUD series)5
10 GNMA securities 6
10.02
10.36
10.11
9.75
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA-insured
13 Conventional
98,048
29,683
68,365
95,030
21,660
73,370
101,329
19,762
81,567
102,370
19,354
83,016
101,922
19,275
82,647
101,991
19,337
82,654
102,191
19,607
82,584
102,564
19,612
82,952
103,309
19,586
83,723
104,421
19,630
84,791
Mortgage transactions (during period)
14 Purchases
30,826
20,531
23,110
1,037
905
1,469
1,163
1,419
1,862
2,091
Mortgage
commitments7
15 Contracted (during period)
16 Outstanding (end of period)
32,987
3,386
25,415
4,886
23,435
2,148
1,087
2,081
3,557
4,520
1,771
4,807
1,118
4,661
1,626
4,673
2,573
5,236
2,513
5,648
13,517
746
12,771
12,802
686
12,116
15,105
620
14,485
18,378
594
17,785
18,473
594
17,880
18,714
593
16,135
18,918
599
18,320
19,443
586
18,857
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
Mortgage transactions (during period)
20 Purchases
21 Sales
103,474
100,236
76,845
75,082
44,077
39,780
3,586
3,408
5,088
4,385
6,373
6,037
5,861
5,554
5,141
4,474
n.a.
6,331
n.a.
n.a.
Mortgage
commitments9
22 Contracted (during period)
110,855
71,467
66,026
5,206
8,411
11,227
4,196
5,186
n.a.
n.a.
FEDERAL H O M E LOAN MORTGAGE CORPORATION
Mortgage holdings (end of period f
17 Total
18 FHA/VA
19 Conventional
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 FNMA's free market
auction system, and through the FNMA-GNMA 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 FNMA exclude swap
activity.
A38
DomesticNonfinancialStatistics • October 1989
1.54 MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1987
Type of holder, and type of property
1986
1987
1988
1988
Q4
Q1
Q2
Q3
Q4
1 All holders
2,597,175
2,943,222
3,200,411
2,943,222
2,984,027
3,058,006
3,132,353
3,200,411
2 1- to 4-family
3 Multifamily
4 Commercial
5
1,698,524
247,831
555,039
95,781
1,925,189
273,899
655,266
88,868
2,115,184
287,611
711,093
86,523
1,925,189
273,899
655,266
88,868
1,951,400
278,144
666,461
88,022
2,012,270
278,919
679,037
87,780
2,067,929
281,468
695,774
87,182
2,115,184
287,611
711,093
86,523
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
1,852,593
665,458
313,897
34,715
301,236
15,610
1,700,820
591,151
275,761
33,296
267,663
14,431
1,723,937
604,468
280,757
33,728
275,360
14,623
1,764,221
628,383
295,425
34,184
283,598
15,176
1,813,470
649,135
306,118
33,855
293,772
15,390
1,852,593
665,458
313,897
34,715
301,236
15,610
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
908,355
648,275
108,319
151,016
856,945
598,886
106,359
150,943
863,245
603,516
107,722
151,251
872,450
615,795
106,367
149,536
895,230
636,794
106,377
151,307
908,355
648,275
108,319
151,016
212,375
13,226
22,524
166,722
9,903
40,349
233,814
15,361
23,681
185,592
9,180
44,966
212,375
13,226
22,524
166,722
9,903
40,349
214,815
13,653
22,723
168,774
9,665
41,409
220,870
14,172
23,021
174,086
9,591
42,518
225,627
14,917
23,139
178,166
9,405
43,478
233,814
15,361
23,681
185,592
9,180
44,966
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
198,549
67
53
14
42,018
18,347
8,513
5,343
9,815
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
199,474
42
24
18
42,767
18,248
8,213
6,288
10,018
198,027
64
51
13
41,836
18,268
8,349
5,300
9,919
198,549
67
53
14
42,018
18,347
8,513
5,343
9,815
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
5,975
2,649
3,326
103,013
95,833
7,180
32,115
1,890
30,225
15,361
13,058
2,303
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
5,673
2,564
3,109
102,368
95,404
6,964
33,048
1,945
31,103
15,576
13,631
1,945
5,666
2,432
3,234
102,453
95,417
7,036
32,566
1,917
30,649
15,442
13,322
2,120
5,975
2,649
3,326
103,013
95,833
7,180
32,115
1,890
30,225
15,361
13,058
2,303
44 Mortgage pools or trusts 6
Government National Mortgage Association
45
46
1- to 4-family
Multifamily
47
48
Federal Home Loan Mortgage Corporation
49
1- to 4-family
Multifamily
50
51
Federal National Mortgage Association
52
1- to 4-family
53
Multifamily
54
Farmers Home Administration
55
1- to 4-family
56
57
Commercial
58
Farm
565,428
262,697
256,920
5,777
171,372
166,667
4,705
97,174
95,791
1,383
348
142
718,297
317,555
309,806
7,749
212,634
205,977
6,657
139,960
137,988
1,972
245
121
809,448
340,527
331,257
9,270
224,967
218,513
6,454
178,250
172,331
5,919
104
26
718,297
317,555
309,806
7,749
212,634
205,977
6,657
139,960
137,988
1,972
245
121
732,071
318,703
310,473
8,230
214,724
208,138
6,586
145,242
142,330
2,912
172
65
754,045
322,616
314,728
7,888
216,155
209,702
6,453
157,438
153,253
4,185
106
23
782,802
333,177
324,573
8,604
220,684
214,195
6,489
167,170
162,228
4,942
106
27
809,448
340,527
331,257
9,270
224,967
218,513
6,454
178,250
172,331
5,919
104
26
132
74
63
61
38
40
63
61
58
49
41
42
38
41
38
40
59 Individuals and others 7
60
1- to 4-family
61
Multifamily
62
Commercial
63
Farm
320,658
177,374
66,940
53,315
23,029
331,384
171,317
75,437
63,272
21,358
339,821
173,128
77,917
67,868
20,908
331,384
171,317
75,437
63,272
21,358
331,110
169,459
76,071
64,378
21,202
340,266
177,108
76,572
65,488
21,098
338,054
172,527
77,310
67,191
21,026
339,821
173,128
77,917
67,868
20,908
6 Selected financial institutions
7
Commercial banks 2
8
1- to 4-family
Multifamily
9
10
Commercial
11
Farm
12
13
14
15
16
17
18
19
20
21
22
Savings institutions 3
1- to 4-family
Multifamily
Commercial
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
Finance companies 4
23 Federal and related agencies
24
Government National Mortgage Association
25
1- to 4-family
26
Multifamily
,
27
Farmers Home Administration
28
1- to 4-family
29
Multifamily
30
Commercial
31
Farm
32
33
34
35
36
37
38
39
40
41
42
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 FmHA 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. Includes private pools which are not
shown as a separate line item.
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.
Consumer Installment Credit
A39
1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change, seasonally adjusted
Millions of dollars
1989
1988
Holder, and type of credit
1987
1988
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
Amounts outstanding (end of period)
607,721
659,507
649,132
654,413
659,507
682,020
687,397
691,162
693,911r
698,132
701,118
282,910
140,281
80,087
40,975
59,851
3,618
n.a.
318,925
145,180
86,118
43,498
62,099
3,687
n.a.
312,588
143,012
85,338
42,614
61,926
3,654
n.a.
316,683
143,488
85,740
42,910
61,922
3,671
n.a.
318,925
145,180
86,118
43,498
62,099
3,687
n.a.
316,797
141,795
87,093
40,986
62,867
3,655
28,827
318,423
143,419
87,813
41,052
63,109
3,677
29,903
318,242
143,070
88,514
41,300
62,735
3,682
33,487
320,458
144,378
89,330'
41,301
61,919
3,787
32,737
323,363
145,523
89,890
41,323
61,311
3,897
32,826
324,272
146,055
90,511
41,649
59,937
4,017
34,677
By major type of credit
9 Automobile
10 Commercial banks
11
Credit unions
12 Finance companies
13
Savings institutions
14 Pools of securitized assets
265,976
109,201
40,351
98,195
18,228
n.a.
281,174
123,259
41,326
97,204
19,385
n.a.
278,902
120,939
41,293
96,877
19,793
n.a.
279,926
122,392
41,316
96,657
19,561
n.a.
281,174
123,259
41,326
97,204
19,385
n.a.
286,382
122,160
41,707
87,968
19,506
15,042
288,767
122,983
41,964
88,789
19,464
15,568
288,850
123,062
42,211
89,567
19,231
14,779
289,654'
123,878
42,510r
90,268
18,866
14,132
290,741
125,118
42,687
90,976
18,566
13,395
290,474
125,661
42,892
91,184
18,038
12,700
15 Revolving
16 Commercial banks
17 Retailers
18 Gasoline companies
19 Savings institutions
20
Credit unions
21
Pools of securitized assets
153,884
99,119
36,389
3,618
10,367
4,391
n.a.
174,792
117,572
38,692
3,687
10,151
4,691
n.a.
170,131
114,180
37,919
3,654
9,724
4,653
n.a.
173,030
116,593
38,170
3,671
9,923
4,673
n.a.
174,792
117,572
38,692
3,687
10,151
4,691
n.a.
176,716
111,133
36,176
3,655
10,479
4,785
10,489
178,570
111,706
36,257
3,677
10,722
4,866
11,342
182,831
112,553
36,489
3,682
10,860
4,947
14,172
184,500'
114,130
36,497
3,787
10,918
5,035'
14,134
186,502
115,407
36,504
3,897
11,008
5,109
14,578
189,609
115,539
36,814
4,017
10,954
5,187
17,098
26,387
9,220
7,762
9,406
25,744
8,974
7,186
9,583
26,033
9,225
7,194
9,614
26,005
9,224
7,197
9,584
25,744
8,974
7,186
9,583
26,036
8,974
7,376
9,687
25,992
8,974
7,308
9,710
24,168
8,844
5,687
9,637
23,993
8,836
5,659
9,498
23,952
8,878
5,684
9,390
23,695
8,854
5,674
9,166
161,475
65,370
34,324
35,344
4,586
21,850
n.a.
177,798
69,120
40,790
40,102
4,807
22,981
n.a.
174,066
68,244
38,941
39,392
4,694
22,794
n.a.
175,452
68,474
39,633
39,752
4,739
22,854
n.a.
177,798
69,120
40,790
40,102
4,807
22,981
n.a.
192,886
74,532
46,451
40,601
4,809
23,196
3,296
194,068
74,760
47,322
40,983
4,795
23,214
2,993
195,314
73,783
47,816
41,357
4,811
23,006
4,536
195,763'
73,614
48,451
41,785'
4,804
22,638
4,471
196,936
73,960
48,863
42,094
4,819
22,347
4,853
197,340
74,217
49,197
42,433
4,834
21,780
4,879
1 Total
2
3
4
5
6
7
8
By major holder
Commercial banks
Finance companies
Credit unions
Retailers
Savings institutions
Gasoline companies
Pools of securitized assets 4
22 Mobile home
23
Commercial banks
24
Finance companies
25
Savings institutions
76 Other
77
Commercial banks
28
Finance companies
7.9 Credit unions
30 Retailers
31
Savings institutions
32
Pools of securitized assets
Net change (during period)
35,674
51,786
2,576
5,281
5,094
22,513
5,377
3,765
2,749 r
4,221
2,986
19,884
5,349
3,853
1,568
3,689
332
n.a.
36,015
4,899
6,031
2,523
2,248
69
n.a.
2,456
-7
438
265
-576
-1
n.a.
4,095
476
402
296
-4
17
n.a.
2,242
1,692
378
588
177
16
n.a.
-2,128
-3,385
975
-2,512
768
-32
n.a.
1,626
1,624
720
66
242
22
1,076
-181
-349
701
248
-374
5
3,584
2,216
1,308
816'
1
-816
105
-750
2,905
1,145
560
22
-608
110
89
909
532
621
326
-1,374
120
1,851
By major type of credit
41 Automobile
42
Commercial banks
43
Credit unions
44
Finance companies
45
Savings institutions
46
Pools of securitized assets
18,663
7,919
1,916
5,639
3,188
n.a.
15,198
14,058
975
-991
1,157
n.a.
-341
414
43
-380
-418
n.a.
1,024
1,453
23
-220
-232
n.a.
1,248
867
10
547
-176
n.a.
5,208
-1,099
381
-9,236
121
n.a.
2,385
823
257
821
-42
526
83
79
247
778
-233
-789
804'
816
299r
701
-365
-647
1,087
1,240
177
708
-300
-737
-267
543
205
208
-528
-695
47 Revolving
48
Commercial banks
49
Retailers
50
Gasoline companies
51
Savings institutions
52
Credit unions
53
Pools of securitized assets
16,871
12,188
1,866
332
1,771
715
n.a.
20,908
18,453
2,303
69
-216
300
n.a.
1,858
1,489
237
-1
110
21
n.a.
2,899
2,413
251
17
199
20
n.a.
1,762
979
522
16
228
18
n.a.
1,924
-6,439
-2,516
-32
328
94
n.a.
1,854
573
81
22
243
81
853
4,261
847
232
5
138
81
2,830
1,669'
1,577
8
105
58
88'
-38
2,002
1,277
7
110
90
74
444
3,107
132
310
120
-54
78
2,520
54 Mobile home
55
Commercial banks
56
Finance companies
57
Savings institutions
-968
192
-1,052
-107
-643
-246
-576
177
-152
106
-140
-118
-28
-1
3
-30
-261
-250
-11
-1
292
0
190
104
-44
0
-68
23
-1,824
-130
-1,621
-73
-175
-8
-28
-139
-41
42
25
-108
-257
-24
-10
-224
58 Other
Commercial banks
59
60
Finance companies
61
Credit unions
62
Retailers
63
Savings institutions
64
Pools of securitized assets
1,108
-415
1,761
1,221
-297
-1,162
n.a.
16,323
3,750
6,466
4,758
221
1,131
n.a.
1,211
446
513
374
27
-151
n.a.
1,386
230
692
360
45
60
n.a.
2,346
646
1,157
350
68
127
n.a.
15,088
5,412
5,661
499
2
215
n.a.
1,182
228
871
382
-14
18
-303
1,246
-977
494
374
16
-208
1,543
449'
-169
635
428'
-7
-368
-65
1,173
346
412
309
15
-291
382
404
257
334
339
15
-567
26
33 Total
34
35
36
37
38
39
40
By major holder
Commercial banks
Finance companies
Credit unions
Retailers 3
Savings institutions
Gasoline companies
Pools of securitized assets 4
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 30-day charge credit held by travel and entertainment companies.
4. Outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator.
A40
DomesticNonfinancialStatistics • October 1989
1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1
Percent unless noted otherwise
1988
Item
1986
1987
1989
1988
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
INTEREST RATES
1
2
3
4
5
6
Commercial banks 2
48-month new car
24-month personal
120-month mobile home
Credit card
Auto finance companies
New car
Used car
11.33
14.82
13.99
18.26
10.45
14.22
13.38
17.92
10.85
14.68
13.54
17.78
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
11.76
15.22
14.00
17.83
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
12.44
15.65
14.35
18.11
n.a.
n.a.
n.a.
n.a.
9.44
15.95
10.73
14.60
12.60
15.11
13.25
15.80
13.27
15.57
13.07
15.90
13.07
16.12
12.10
16.39
11.80
16.45
11.96
16.45
50.0
42.6
53.5
45.2
56.2
46.7
56.3
46.0
56.2
47.8
55.7
47.4
55.4
47.1
53.4
47.8
52.7
46.6
53.0
46.5
91
97
93
98
94
98
94
98
94
97
92
98
92
97
91
97
91
97
91
97
10,665
6,555
11,203
7,420
11,663
7,824
12,068
8,022
11,956
8,006
11,819
8,022
11,867
7,958
11,886
7,855
11,973
7,908
12,065
7,921
O T H E R TERMS 4
7
8
9
10
11
12
Maturity (months)
New car
Used car
Loan-to-value ratio
New car
Used car
Amount financed (dollars)
New 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.
Flow of Funds
A41
1.57 FUNDS RAISED IN U.S. CREDIT MARKETS
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1987
1988
1989
Transaction category, sector
Q3
Q4
Qi
Q2
Q3
Q4
Ql
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors
750.8
846.3
837.5
689.0
741.4
659.8
780.3
723.9
710.4
767.8
763.7
742.6
By sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages
198.8
199.0
-.2
223.6
223.7
-.1
215.0
214.7
.4
144.9
143.4
1.5
157.5
140.0
17.4
103.1
104.0
-.9
168.2
163.2
5.0
227.7
228.2
-.5
89.2
81.5
7.7
188.6
167.7
20.9
124.4
82.8
41.6
214.4
215.6
-1.2
5 Private domestic nonfinancial sectors
6 Debt capital instruments
7
Tax-exempt obligations
8
Corporate bonds
9
Mortgages
10
Home mortgages
11
Multifamily residential
12
Commercial
13
Farm
552.0
319.3
50.4
46.1
222.8
136.7
25.2
62.2
-1.2
622.7
452.3
136.4
73.8
242.2
156.8
29.8
62.2
-6.6
622.5
468.4
30.8
121.3
316.3
218.7
33.5
73.6
-9.5
544.0
459.0
34.5
99.9
324.5
234.9
24.4
71.6
-6.4
584.0
426.1
33.1
97.2
295.8
220.0
16.3
61.6
-2.1
556.6
441.2
32.7
100.7
307.8
225.0
23.3
64.3
-4.7
612.2
430.3
33.5
81.6
315.3
222.8
16.1
78.3
-1.9
496.2
358.9
22.8
101.4
234.6
169.6
23.9
47.3
-6.1
621.2
474.8
30.6
117.9
326.3
270.7
4.2
52.7
-1.4
579.3
446.7
41.4
90.3
315.0
231.9
16.0
69.4
-2.4
639.3
423.9
37.5
79.1
307.3
207.8
20.9
77.1
1.5
528.2
372.2
19.7
82.1
270.3
187.4
26.6
61.5
-5.2
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
232.7
81.6
67.1
21.7
62.2
170.3
82.5
38.6
14.6
34.6
154.1
58.0
65.0
-9.3
40.5
85.1
32.9
10.8
2.3
39.1
157.9
51.1
47.5
11.6
47.7
115.4
54.0
21.7
1.0
38.7
181.8
56.5
75.2
3.9
46.2
137.3
38.6
34.7
-3.8
67.8
146.4
57.5
72.4
4.0
12.5
132.5
31.8
10.7
11.1
78.9
215.4
76.3
72.1
35.1
31.9
156.1
34.9
38.3
34.4
48.4
19
20
21
22
23
24
25
By borrowing sector
State and local governments
Households
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
552.0
27.4
231.5
293.1
-.4
123.2
170.3
622.7
91.8
283.6
247.3
-14.5
129.3
132.4
622.5
44.3
289.2
288.9
-16.3
103.2
202.0
544.0
34.0
267.8
242.2
-10.6
107.9
144.9
584.0
32.0
276.5
275.5
-4.0
85.3
194.2
556.6
34.8
287.3
234.5
-9.4
97.4
146.6
612.2
32.9
277.8
301.5
3.3
116.0
182.1
496.2
17.5
212.6
266.0
-15.7
86.3
195.5
621.2
27.6
330.6
262.9
-3.4
72.3
194.0
579.3
43.5
282.9
252.9
-2.6
96.0
159.5
639.3
39.4
279.8
320.1
5.5
86.7
227.8
528.2
26.0
251.7
250.5
-2.7
78.5
174.6
26 Foreign net borrowing in United States
27
Bonds
28 Bank loans n.e.c
29 Open market paper
30 U.S. government loans
8.4
3.8
-6.6
6.2
5.0
1.2
3.8
-2.8
6.2
-5.9
9.6
3.0
-1.0
11.5
-3.9
4.3
6.8
-3.6
2.1
-1.0
5.9
6.7
-1.8
9.6
-8.6
12.3
6.7
-3.7
21.6
-12.3
13.9
21.6
-6.1
-2.5
.8
-1.0
16.8
.7
1.5
-19.9
5.2
-2.7
-3.5
6.4
5.1
4.4
6.5
2.9
10.7
-15.8
15.0
6.3
-7.4
20.0
-3.9
-7.9
9.5
1.5
11.6
-30.4
31 Total domestic plus foreign
759.2
847.5
847.1
693.3
747.3
672.0
794.2
722.9
715.6
772.2
778.6
734.7
Financial sectors
148.7
198.3
307.0
303.3
254.9
306.4
250.2
193.3
263.3
227.2
335.7
358.1
By instrument
33 U.S. government related
34 Sponsored credit agency securities
35 Mortgage pool securities
36
74.9
30.4
44.4
101.5
20.6
79.9
1.1
187.9
15.2
173.1
-.4
185.8
30.2
156.4
-.7
137.5
44.9
92.6
185.5
32.0
153.5
167.5
71.6
95.9
120.3
56.8
63.4
101.8
9.4
92.4
150.6
42.8
107.8
177.2
70.5
106.7
205.7
81.7
124.0
37 Private financial sectors
38 Corporate bonds
39 Mortgages
40 Bank loans n.e.c
41 Open market paper
42 Loans from Federal Home Loan Banks
73.8
33.0
.4
.7
24.1
15.7
96.7
47.9
.1
2.6
32.0
14.2
119.1
70.9
.1
4.0
24.2
19.8
117.5
67.2
.4
-3.3
28.8
24.4
117.4
50.7
-.1
-6.6
53.6
19.7
120.8
77.7
.2
6.3
14.3
22.2
82.7
42.4
.8
-10.7
5.4
44.9
73.1
70.1
-.1
-26.8
24.6
5.4
161.5
60.5
76.6
32.5
8.7
82.2
10.1
-8.6
26.1
26.6
158.5
39.7
-.2
.6
81.7
36.8
152.4
31.0
.1
-4.6
61.6
64.4
148.7
198.3
307.0
303.3
254.9
306.4
250.2
193.3
263.3
227.2
335.7
358.1
30.4
44.4
73.8
7.3
15.6
22.7
18.2
.8
9.3
21.7
79.9
96.7
-4.9
14.5
22.3
52.7
.5
11.5
14.9
173.1
119.1
-3.6
4.6
29.8
48.4
1.0
39.0
29.5
156.4
117.5
7.1
2.9
34.9
32.7
.8
39.1
44.9
92.6
117.4
-3.9
1.4
37.8
47.8
1.7
32.5
32.0
153.5
120.8
-13.1
11.3
43.4
34.0
2.5
42.7
71.6
95.9
82.7
15.0
-22.6
48.7
33.4
2.2
6.0
56.8
63.4
73.1
-22.4
-8.5
8.6
51.4
1.0
43.0
9.4
92.4
161.5
6.2
11.4
17.1
93.7
1.7
31.5
42.8
107.8
76.6
-8.3
7.6
54.4
1.2
-1.4
23.1
70.5
106.7
158.5
8.9
-4.9
71.0
45.1
5.8
32.5
81.7
124.0
152.4
1.8
8.8
72.7
53.6
.8
14.7
32 Total net borrowing by financial sectors
*
*
By sector
43
44
45
46
47
48
49
50
51
52
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Finance companies
REITs
CMO Issuers
A42
DomesticNonfinancialStatistics • October 1989
1.57—Continued
1987
Transaction category, sector
1984
1985
1987
1986
1988
1989
1988
Q3
Q4
Q1
Q2
Q3
Q4
Q1
All sectors
53
54
55
56
57
58
59
60
61
62
Total net borrowing
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
MEMO: U.S. government, cash balance
Totals net of changes in U.S. government cash balances
63
Net borrowing by domestic nonfinancial
64
Net borrowing by U.S. government
907.9 1,045.7 1,154.1
996.6
1,002.2
978.4
1,044.4
916.2
978.9
999.4
273.8
50.4
83.0
223.1
81.6
61.1
52.0
82.9
324.2
136.4
125.4
242.2
82.5
38.3
52.8
44.0
331.5
34.5
174.0
324.9
32.9
3.8
33.2
61.8
294.9
33.1
154.6
295.7
51.1
39.1
74.9
58.8
288.6
32.7
185.1
308.0
54.0
24.3
36.9
48.7
335.7
33.5
145.6
316.1
56.5
58.4
6.7
91.9
347.9
22.8
188.2
234.5
38.6
8.6
22.3
53.3
191.0
30.6
175.8
326.3
57.5
77.6
92.5
27.7
339.2
41.4
129.4
315.0
31.8
5.0
48.0
89.7
301.6
37.5
125.1
307.1
76.3
65.3
136.8
64.7
420.1
19.7
122.7
270.4
34.9
35.1
107.6
82.4
6.3
14.4
-7.9
10.4
-19.6
-54.7
60.9
3.3
16.2
-38.8
-4.3
744.5
192.5
831.9
209.3
696.9
152.8
731.1
147.1
679.4
122.7
835.0
222.8
663.0
166.8
707.1
86.0
751.7
172.4
802.5
163.2
747.0
218.7
403.4
30.8
195.2
316.4
58.0
67.9
26.4
56.1
*
837.5
215.0
1,114.4 1,092.8
External corporate equity funds raised in United States
65 Total net share issues
66
67
68
69
70
Mutual funds
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States
-36.0
20.1
93.9
13.5
-115.0
-47.1
-82.7
-75.6
-131.1
-84.1
-169.1 -143.1
29.3
-65.3
-74.5
8.2
.9
84.4
-64.3
-81.5
13.5
3.7
161.8
-68.0
-80.7
11.5
1.3
72.3
-58.8
-76.5
20.1
-2.4
-.4
-114.5
-130.5
15.2
.7
13.8
-60.9
-78.0
18.4
-1.3
-9.1
-73.6
-88.0
26.4
-12.0
5.0
-80.5
-95.0
15.2
-.7
-8.0
-123.1
-140.0
23.4
-6.5
0.3
-84.4
-92.0
6.4
1.2
1.1
19.1
-170.2 -162.2
-195.0 -180.0
15.9
13.7
4.1
9.0
Flow of Funds
A43
1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS
Billions of dollars, except as noted; quarterly data are at seasonally adjusted annual rates.
1987
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonflnancial sectors
1984
1985
1986
1987
1989
1988
1988
Q3
Q4
Ql
Q2
Q3
Q4
Ql
750.8
846.3
837.5
689.0
741.4
659.8
780.3
723.9
710.4
767.8
763.7
742.6
157.6
38.9
56.5
15.7
46.6
193.1
37.9
94.6
14.2
46.3
314.0
69.4
170.1
19.8
54.6
256.7
68.2
153.2
24.4
10.9
239.1
84.8
104.0
19.7
30.5
211.1
35.1
146.0
22.2
7.8
265.4
123.3
102.7
44.9
-5.5
262.5
148.6
83.6
5.4
24.9
166.1
42.4
106.7
10.1
6.8
222.5
25.8
108.3
26.6
61.9
305.1
122.3
117.5
36.8
28.4
336.2
87.6
126.2
64.4
58.1
17.1
74.3
8.4
57.9
16.8
95.5
18.4
62.3
9.7
187.2
19.4
97.8
-11.9
181.4
24.7
62.5
-7.3
131.2
10.5
104.7
-24.1
187.0
29.0
19.1
-2.6
156.6
30.4
81.0
-8.8
103.1
-5.5
173.7
-20.3
103.4
4.1
78.9
9.4
138.9
17.1
57.2
-9.5
179.2
26.5
108.9
7.3
216.0
-4.9
117.8
74.9
8.4
101.5
1.2
187.9
9.6
185.8
4.3
137.5
5.9
185.5
12.3
167.5
13.9
120.3
-1.0
101.8
5.2
150.6
4.4
177.2
15.0
205.7
-7.9
Private domestic funds advanced
13 Total net advances
14 U.S. government securities
15 State and local obligations
16 Corporate and foreign bonds
17 Residential mortgages
18 Other mortgages and loans
19 LESS: Federal Home Loan Bank advances
676.4
234.9
50.4
35.1
105.3
266.3
15.7
756.0
286.2
136.4
40.8
91.8
214.9
14.2
721.0
333.9
30.8
84.1
82.0
210.0
19.8
622.5
263.3
34.5
86.5
106.1
156.5
24.4
645.7
210.2
33.1
81.0
132.2
209.0
19.7
646.4
253.5
32.7
83.7
102.3
196.4
22.2
696.3
212.4
33.5
102.9
136.2
256.3
44.9
580.6
199.3
22.8
115.7
109.9
138.3
5.4
651.3
148.6
30.6
90.2
168.2
223.8
10.1
700.3
313.4
41.4
65.1
139.7
167.3
26.6
650.8
179.3
37.5
53.0
111.1
306.6
36.8
604.2
332.5
19.7
54.6
87.9
173.8
64.4
Private financial intermediation
20 Credit market funds advanced by private financial
institutions
Commercial banking
71
Savings institutions
77
73 Insurance and pension funds
24 Other finance
581.0
168.9
150.2
121.8
140.1
569.8
186.3
83.0
148.9
151.6
747.0
194.8
106.2
181.9
264.2
566.6
136.7
141.7
211.9
76.3
587.6
156.0
121.1
222.2
88.3
643.7
151.4
191.5
247.5
53.3
553.8
253.1
155.6
154.3
-9.2
658.1
56.8
85.3
279.3
236.7
593.3
213.8
92.9
228.9
57.8
473.2
141.3
186.3
173.9
-28.4
626.0
212.2
119.9
206.8
87.2
586.9
96.8
80.6
259.1
150.3
?5 Sources of funds
76 Private domestic deposits and RPs
77 Credit market borrowing
78 Other sources
79
Foreign funds
Treasury balances
30
31
Insurance and pension reserves
Other, net
32
581.0
321.9
73.8
185.3
8.8
4.0
124.0
48.5
569.8
210.6
96.7
262.5
19.7
10.3
131.9
100.7
747.0
264.7
119.1
363.2
12.9
1.7
144.3
204.4
566.6
145.6
117.5
303.5
43.7
-5.8
176.1
89.6
587.6
198.4
117.4
271.8
9.2
7.3
219.9
35.4
643.7
193.9
120.8
329.0
99.5
6.1
196.1
27.2
553.8
265.6
82.7
205.5
25.2
-36.1
120.3
96.0
658.1
283.6
73.1
301.3
-80.1
53.3
265.2
62.9
593.3
135.1
161.5
296.7
106.6
-17.5
240.0
-32.4
473.2
167.3
76.6
229.2
-50.4
8.7
149.9
121.0
626.0
207.5
158.5
260.0
60.7
-15.2
224.3
-9.9
586.9
127.3
152.4
307.2
-36.3
-8.4
263.6
88.3
Private domestic nonflnancial 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
38 Other
169.2
115.4
26.5
-.8
4.0
24.2
282.9
175.7
39.6
2.4
45.6
19.6
93.1
59.9
-13.6
32.6
-3.6
17.9
173.3
104.4
46.1
5.3
4.3
13.3
175.5
146.5
20.0
-12.7
14.9
6.8
123.6
70.3
42.4
28.3
-29.7
12.2
225.1
117.8
56.0
42.1
-9.5
18.7
-4.4
114.4
-.5
-39.0
-71.5
-7.8
219.5
87.3
18.3
36.6
76.1
1.2
303.7
247.0
27.9
-29.2
54.0
3.9
183.3
137.2
34.4
-19.4
1.0
30.1
169.7
194.6
7.7
-.2
-2.0
-30.3
39 Deposits and currency
40
Checkable deposits
41
4? Small time and savings accounts
43 Money market fund shares
44 Large time deposits
45 Security RPs
46 Deposits in foreign countries
325.4
8.6
28.0
150.7
49.0
84.3
10.0
-5.1
220.9
12.4
40.9
138.5
8.9
7.7
14.6
-2.1
285.0
14.4
93.2
120.6
41.5
-11.4
20.8
5.9
161.8
19.0
-2.1
76.0
28.2
26.7
16.9
-2.8
205.9
14.7
12.2
120.6
23.8
32.3
9.5
-7.3
229.3
17.3
35.4
80.2
32.7
-1.0
46.6
18.1
316.3
36.8
14.3
124.1
63.3
89.4
-25.6
13.9
278.6
8.2
4.5
189.1
59.1
11.7
19.3
-13.3
136.3
11.9
18.5
152.4
-34.8
-15.7
14.7
-10.7
194.1
28.6
-23.8
70.5
3.0
122.0
-4.4
-1.8
214.4
10.2
49.6
70.4
67.9
11.2
8.2
-3.3
138.1
9.8
-59.6
50.7
59.5
55.9
20.7
1.0
47 Total of credit market instruments, deposits, and
currency
494.6
503.7
378.1
335.1
381.4
352.9
541.5
274.2
355.8
497.8
397.7
307.8
20.7
85.8
66.7
22.7
75.3
82.0
37.0
103.6
110.7
37.0
91.0
106.2
31.9
90.9
113.9
31.4
99.5
118.7
33.4
79.5
106.2
36.3
113.3
93.6
23.2
91.0
185.5
28.8
67.5
6.8
39.1
96.1
169.7
45.7
97.1
81.5
MEMO: Corporate equities not included above
51 Total net issues
-36.0
20.1
93.9
13.5
-115.0
-47.1
-82.7
-75.6
-131.1
-84.1
-169.1
-143.1
57 Mutual fund shares
53 Other equities
54 Acquisitions by financial institutions
55 Other net purchases
29.3
-65.3
15.8
-51.8
84.4
-64.3
45.6
-25.5
161.8
-68.0
48.5
45.4
72.3
-58.8
22.6
-9.1
-.4
-114.5
4.8
-119.7
13.8
-60.9
5.2
-52.4
-9.1
-73.6
-16.5
-66.2
5.0
-80.5
-35.7
-39.9
-8.0
19.1
.3
1.1
-123.1 -84.4 -170.2 -162.2
4.1
-6.8
22.4
39.1
-124.3 -106.5 -208.2 -147.2
7
3
4
5
6
By public agencies and foreign
Total net advances
U.S. government securities
Residential mortgages
FHLB advances to savings and loans
Other loans and securities
Total advanced, by sector
U.S. government
Sponsored credit agencies
9
Monetary authorities
10 Foreign
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
11
12 Foreign
7
8
48
49
50
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
NOTES BY LINE NUMBER.
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
DomesticNonfinancialStatistics • October 1989
1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING
Billions of dollars; period-end levels.
1987
1988
Q4
Q3
Qi
Q2
1989
Q3
Q4
Ql
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
5,204.3
5,953.7
6,797.0
7,638.4
8,099.4
8,330.0
8,471.0
8,658.1
8,828.8
9,049.7
9,209.4
By sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages
1,177.9
1,174.4
3.6
1,376.8
1,373.4
3.4
1,600.4
1,597.1
3.3
1,815.4
1,811.7
3.6
1,897.8
1,893.8
3.9
1,960.3
1,955.2
5.2
2,003.2
1,998.1
5.0
2,022.3
2,015.3
7.0
2,063.9
2,051.7
12.2
2,117.8
2,095.2
22.6
2,155.7
2,133.4
22.3
5 Private domestic nonfinancial sectors
6 Debt capital instruments
1
Tax-exempt obligations
8
Corporate bonds
9
Mortgages
10
Home mortgages
11
Multifamily residential
12
Commercial
13
Farm
4,026.4
2,717.8
471.7
423.0
1,823.1
1,200.2
158.8
350.4
113.7
4,577.0
3,040.0
522.1
469.2
2,048.8
1,336.2
183.6
416.5
112.4
5,196.6
3,488.4
658.4
542.9
2,287.1
1,490.2
213.0
478.1
105.9
5,823.0
3,967.6
689.2
664.2
2,614.2
1,720.8
246.2
551.4
95.8
6,201.7
4,327.4
715.5
743.7
2,868.2
1,884.2
265.0
629.1
90.0
6,369.7
4,438.5
723.7
764.1
2,950.7
1,943.1
270.0
648.7
88.9
6,467.8
4,512.2
727.5
789.5
2,995.3
1,972.0
274.5
660.8
88.0
6,635.8
4,635.3
734.8
819.0
3,081.6
2,043.3
276.3
674.1
87.8
6,764.9
4,737.8
747.6
841.5
3,148.6
2,105.0
279.5
677.1
87.0
6,931.9
4,848.3
756.8
861.3
3,230.2
2,160.9
285.9
696.6
86.8
7,053.7
4,933.0
764.9
881.8
3,286.3
2,195.6
291.4
713.1
86.2
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
1,308.6
437.7
490.2
36.8
344.0
1,536.9
519.3
552.9
58.5
406.2
1,708.2
601.8
592.6
72.2
441.6
1,855.5
659.8
654.2
62.9
478.6
1,874.3
674.8
637.6
68.1
493.7
1,931.1
692.7
654.4
73.8
510.3
1,955.6
688.9
665.6
73.5
527.5
2,000.5
705.8
685.7
77.8
531.2
2,027.1
721.2
686.5
80.3
539.1
2,083.6
743.7
701.9
85.4
552.7
2,120.8
746.6
713.5
95.5
565.1
19
20
21
22
23
24
25
By borrowing sector
State and local governments
Households
Nonfinancial business
Farm
Nonfarm noncorporate
Corporate
4,026.4
357.7
1,811.6
1,857.1
188.4
645.8
1,022.9
4,577.0
385.1
2,038.2
2,153.7
187.9
769.0
1,196.8
5,196.6
476.9
2,314.5
2,405.2
173.4
898.3
1,333.5
5,823.0
520.2
2,614.6
2,688.3
156.6
1,001.6
1,530.1
6,201.7
546.2
2,787.3
2,868.2
148.5
1,076.4
1,643.3
6,369.7
554.2
2,864.3
2,951.2
145.5
1,109.4
1,696.3
6,467.8
556.7
2,892.1
3,019.0
141.3
1,131.7
1,746.0
6,635.8
563.2
2,982.3
3,090.2
143.9
1,148.9
1,797.4
6,764.9
576.0
3,058.2
3,130.7
143.6
1,167.3
1,819.9
6,931.9
585.6
3,137.4
3,208.9
141.1
1,193.3
1,874.5
7,053.7
595.2
3,183.8
3,274.6
140.1
1,213.6
1,920.9
227.3
64.2
37.4
21.5
104.1
235.1
68.0
30.8
27.7
108.6
234.7
71.8
27.9
33.9
101.1
236.2
74.8
26.9
37.4
97.1
237.0
75.9
24.2
40.6
96.3
242.3
81.6
23.3
41.2
96.1
243.2
85.4
22.8
42.5
92.4
244.4
85.2
22.4
44.0
92.7
244.6
86.5
22.7
46.3
89.1
248.2
88.3
21.5
50.9
87.5
248.4
90.3
21.1
55.5
81.5
5,431.6
6,188.8
7,031.7
7,874.7
8,336.4
8,572.3
8,714.1
8,902.4
9,073.4
9,297.9
9,457.9
26 Foreign credit market debt held in
United States
27
Bonds
28 Bank loans n.e.c
29 Open market paper
30 U.S. government loans
31 Total domestic plus foreign
Financial sectors
32 Total credit market debt owed by
financial sectors
857.9
1,006.2
1,206.2
1,544.7
1,783.8
1,862.8
1,897.7
1,969.7
2,027.3
2,117.7
2,196.8
456.7
206.8
244.9
5.0
401.2
115.8
2.1
28.9
195.5
59.0
531.2
237.2
289.0
5.0
475.0
148.9
2.5
29.5
219.5
74.6
632.7
257.8
368.9
6.1
573.4
197.5
2.7
32.1
252.4
88.8
844.2
273.0
565.4
5.7
700.5
268.4
2.7
36.1
284.6
108.6
981.6
283.7
692.9
5.0
802.1
324.2
2.9
42.2
312.7
120.1
1,026.5
303.2
718.3
5.0
836.3
335.6
3.1
40.8
323.8
133.1
1,050.6
313.5
732.1
5.0
847.1
352.2
3.1
31.7
330.6
129.5
1,076.9
317.9
754.0
5.0
892.8
367.1
3.1
34.3
353.4
134.8
1,116.3
328.5
782.8
5.0
911.1
375.6
3.1
32.9
358.0
141.6
1,164.0
348.1
810.9
5.0
953.8
386.3
3.0
34.2
377.4
152.8
1,209.0
364.3
839.7
5.0
987.8
393.1
3.1
30.6
397.4
163.8
43 Total, by sector
857.9
1,006.2
1,206.2
1,544.7
1,783.8
1,862.8
1,897.7
1,969.7
2,027.3
2,117.7
2,196.8
44
45
46
4/
48
49
50
51
52
211.8
244.9
401.2
76.8
71.0
73.9
171.7
3.5
4.2
242.2
289.0
475.0
84.1
86.6
93.2
193.2
4.3
13.5
263.9
368.9
573.4
79.2
101.2
115.5
246.9
5.6
25.0
278.7
565.4
700.5
75.6
101.3
145.1
308.1
6.5
64.0
288.7
692.9
802.1
78.6
109.5
165.0
340.7
6.8
101.6
308.2
718.3
836.3
82.7
104.2
180.0
359.1
7.3
103.1
318.5
732.1
847.1
76.4
103.5
176.1
369.6
7.6
113.9
322.9
754.0
892.8
77.2
106.6
186.8
392.5
8.0
121.8
333.5
782.8
911.1
76.6
106.4
197.8
395.1
7.6
127.5
353.1
810.9
953.8
78.8
105.6
218.7
406.0
9.1
135.7
369.3
839.7
987.8
78.9
109.3
230.7
420.4
9.3
139.3
33
34
35
36
37
38
39
40
41
42
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...
Sponsored credit agencies
Mortgage pools
Private financial sectors
Commercial banks
Bank affiliates
Savings and loan associations
Finance companies
REITs
CMO issuers
All sectors
53 Total credit market debt
6,289.5
7,195.0
8,237.9
9,419.4
10,120.2
10,435.1
10,611.8
10,872.1
11,100.8
11,415.6
11,654.7
54
55
56
5/
58
59
60
61
1,629.4
471.7
603.0
1,825.4
437.7
556.5
253.8
512.1
1,902.8
522.1
686.0
2,051.4
519.3
613.2
305.7
594.4
2,227.0
658.4
812.1
2,289.8
601.8
652.6
358.5
637.6
2,653.8
689.2
1,007.4
2,617.0
659.8
717.2
384.9
690.1
2,874.4
715.5
1,143.9
2,871.1
674.8
704.0
421.4
715.1
2,981.8
723.7
1,181.4
2,953.8
692.7
718.4
438.8
744.5
3,048.8
727.5
1,227.1
2,998.4
688.9
720.1
446.7
754.4
3,094.2
734.8
1,271.3
3,084.7
705.8
742.4
475.3
763.7
3,175.2
747.6
1,303.6
3,151.7
721.2
742.1
484.6
774.7
3,276.7
756.8
1,336.0
3,233.3
743.7
757.5
513.6
797.9
3,359.7
764.9
1,365.2
3,289.3
746.6
765.2
548.4
815.4
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
Flow of Funds
A45
1.60 SUMMARY OF CREDIT MARKET CLAIMS, BY HOLDER
Billions of dollars, except as noted; period-end levels.
1987
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
1983
1984
1985
1989
1988
1986
Q3
Q4
Ql
Q2
Q3
Q4
Ql
5,204.3
5,953.7
6,797.0
7,638.4
8,099.4
8,330.0
8,471.0
8,658.1
8,828.8
9,049.7
9,209.4
1,101.7
339.0
367.0
59.0
336.8
1,259.2
377.9
423.5
74.6
383.1
1,457.5
421.8
518.2
88.8
428.7
1,791.2
491.2
712.3
108.6
479.0
1,965.1
525.6
834.6
120.1
484.8
2,036.2
559.4
862.0
133.1
481.8
2,092.2
592.7
880.6
129.5
489.4
2,138.8
607.1
906.1
134.8
490.8
2,188.3
610.3
934.9
141.6
501.6
2,269.9
644.2
966.0
152.8
506.9
2,343.9
662.1
995.1
163.8
522.9
7 Total held, by type of lender
8 U.S. government
9
Sponsored credit agencies and mortgage pools . . .
10 Monetary authority
11 Foreign
1,101.7
212.8
482.0
159.2
247.7
1,259.2
229.7
556.3
167.6
305.6
1,457.5
245.7
657.8
186.0
367.9
1,791.2
252.3
867.8
205.5
465.7
1,965.1
235.2
1,003.7
219.6
506.7
2,036.2
233.0
1,044.9
230.1
528.2
2,092.2
231.4
1,064.0
224.9
572.0
2,138.8
227.0
1,091.6
229.7
590.5
2,188.3
224.3
1,128.9
230.8
604.4
2,269.9
220.3
1,176.1
240.6
632.9
2,343.9
222.8
1,223.0
235.4
662.7
Agency and foreign debt not in line 1
Sponsored credit agencies and mortgage pools . . .
Foreign
456.7
227.3
531.2
235.1
632.7
234.7
844.2
236.2
981.6
237.0
1,026.5
242.3
1,050.6
243.2
1,076.9
244.4
1,116.3
244.6
1,164.0
248.2
1,209.0
248.4
Private domestic holdings
14 Total private holdings
15 U.S. government securities
16 State and local obligations
17 Corporate and foreign bonds
18 Residential mortgages
19 Other mortgages and loans
20 LESS: Federal Home Loan Bank advances
4,786.6
1,290.4
471.7
441.7
992.2
1,649.6
59.0
5,460.8
1,524.9
522.1
476.8
1,096.5
1,915.2
74.6
6,207.0
1,805.2
658.4
517.6
1,185.1
2,129.5
88.8
6,927.6
2,162.6
689.2
601.7
1,254.7
2,328.1
108.6
7,353.0
2,348.8
715.5
663.4
1,314.6
2,430.7
120.1
7,562.5
2,422.4
723.7
688.1
1,351.1
2,510.2
133.1
7,672.5
2,456.0
727.5
716.3
1,366.0
2,536.2
129.5
7,840.5
2,487.0
734.8
740.6
1,413.6
2,599.2
134.8
8,001.3
2,564.9
747.6
756.9
1,449.6
2,623.8
141.6
8,192.0
2,632.6
756.8
769.1
1,480.8
2,705.4
152.8
8,323.0
2,697.6
764.9
782.1
1,491.9
2,750.2
163.8
Private financial intermediation
21 Credit market claims held by private financial
institutions
22 Commercial banking
23 Savings institutions
24 Insurance and pension funds
25 Other finance
4,111.2
1,622.1
944.0
1,093.5
451.6
4,691.0
1,791.1
1,092.8
1,215.3
591.7
5,264.4
1,978.5
1,178.4
1,364.2
743.4
6,010.1
2,173.2
1,283.6
1,546.0
1,007.1
6,434.5
2,249.0
1,397.3
1,716.0
1,072.2
6,594.8
2,309.9
1,436.2
1,758.0
1,090.7
6,728.4
2,322.7
1,441.7
1,823.3
1,140.7
6,895.8
2,378.2
1,484.6
1,879.5
1,153.5
6,999.4
2,417.3
1,513.0
1,925.0
1,144.0
7,169.6
2,465.9
1,544.4
1,980.5
1,179.0
7,294.3
2,490.1
1,551.9
2,040.1
1,212.2
26 Sources of funds
27 Private domestic deposits and RPs
28 Credit market debt
4,111.2
2,389.8
401.2
4,691.0
2,711.5
475.0
5,264.4
2,922.1
573.4
6,010.1
3,182.6
700.5
6,434.5
3,226.9
802.1
6,594.8
3,320.6
836.3
6,728.4
3,376.5
847.1
6,895.8
3,409.8
892.8
6,999.4
3,438.1
911.1
7,169.6
3,519.0
953.8
7,294.3
3,530.3
987.8
29
30
31
32
33
1,320.2
-23.0
11.5
1,036.1
295.6
1,504.5
-14.1
15.5
1,160.8
342.2
1,768.9
5.6
25.8
1,289.5
448.0
2,127.0
18.6
27.5
1,427.9
653.0
2,405.4
52.7
33.0
1,556.7
763.1
2,437.9
62.2
21.6
1,597.2
756.8
2,504.8
45.9
23.5
1,662.4
773.1
2,593.2
62.3
32.6
1,718.6
779.7
2,650.1
51.9
34.2
1,758.0
806.0
2,696.9
71.5
29.0
1,804.6
791.8
2,776.1
69.3
14.1
1,862.0
830.7
Private domestic nonfinancial investors
34 Credit market claims
35 U.S. government securities
36 Tax-exempt obligations
37 Corporate and foreign bonds
38 Open market paper
39 Other
1,076.6
548.6
170.0
45.4
68.4
244.3
1,244.8
663.6
196.3
44.5
72.4
268.0
1,516.0
830.7
235.9
47.6
118.0
283.8
1,618.1
915.1
222.3
80.1
114.3
286.2
1,720.6
971.0
255.9
80.6
114.9
298.2
1,804.0
1,012.3
268.3
84.8
136.3
302.3
1,791.2
1,022.4
265.1
82.7
119.1
301.9
1,837.5
1,036.2
271.9
88.9
139.4
301.1
1,913.0
1,102.4
281.2
83.5
143.9
302.0
1,976.1
1,155.4
288.4
72.1
151.2
309.1
2,016.5
1,183.9
292.1
80.5
156.8
303.2
40 Deposits and currency
41
Currency
42 Checkable deposits
43 Small time and savings accounts
44 Money market fund shares
45 Large time deposits
46 Security RPs
47 Deposits in foreign countries
2,566.4
150.9
350.9
1,542.9
169.5
247.7
78.8
25.7
2,891.7
159.6
378.8
1,693.4
218.5
332.1
88.7
20.6
3,112.5
171.9
419.7
1,831.9
227.3
339.8
103.3
18.5
3,393.4
186.3
512.9
1,948.3
268.9
328.4
124.1
24.5
3,437.0
192.4
487.5
1,983.4
286.4
326.0
143.6
17.8
3,547.6
205.4
510.4
2,017.1
297.1
355.1
141.0
21.6
3,598.3
204.0
491.0
2,070.7
322.1
350.0
142.6
17.8
3,637.6
209.9
506.0
2,105.9
310.4
343.1
144.4
17.8
3,666.3
213.4
490.7
2,117.0
308.6
376.9
144.9
14.7
3,753.4
220.1
522.6
2,137.7
320.9
387.4
150.5
14.4
3,763.4
219.1
486.7
2,154.3
347.0
390.0
152.3
14.0
48 Total of credit market instruments, deposits, and
currency
2
3
4
5
6
12
13
By public agencies and foreign
Total held
U.S. government securities
Residential mortgages
FHLB advances to savings and loans
Other loans and securities
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
3,643.0
4,136.5
4,628.5
5,011.4
5,157.6
5,351.6
5,389.5
5,475.0
5,579.3
5,729.6
5,780.0
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
20.2
85.8
224.7
20.3
85.9
291.5
20.7
84.8
373.5
22.7
86.7
484.2
23.5
87.5
559.4
23.7
87.2
590.5
24.0
87.6
617.8
24.0
87.9
652.8
24.1
87.4
656.3
24.4
87.5
704.3
24.7
87.6
731.9
MEMO: Corporate equities not included above
52 Total market value
2,134.0
2,158.2
2,824.5
3,362.0
4,316.0
3,318.5
3,500.2
3,619.7
3,572.5
3,600.9
3,732.4
53
54
Mutual fund shares
Other equities
112.1
2,021.9
136.7
2,021.5
240.2
2,584.3
413.5
2,948.5
525.1
3,790.9
460.1
2,858.3
479.2
3,021.0
486.8
3,133.0
478.1
3,094.4
478.3
3,122.6
486.3
3,246.0
55
56
Holdings by financial institutions
Other holdings
612.0
1,522.0
615.6
1,542.6
800.0
2,024.5
972.2
2,389.8
1,306.7
3,009.3
1,011.1
2,307.4
1,079.4
2,420.8
1,131.1
2,488.7
1,126.9
2,445.6
1,156.3
2,444.6
1,226.2
2,506.2
49
50
51
NOTES BY LINE NUMBER.
1. Line 1 of table 1.59.
2. Sum of lines 3-6 or 7-10.
6. Includes farm and commercial mortgages.
12. Credit market debt of federally sponsored agencies, and net issues of
federally related mortgage pool securities.
14. Line 1 less line 2 plus line 12 and 13. Also line 21 less line 28 plus line 34.
Also sum of lines 29 and 48 less lines 41 and 47.
19. Includes farm and commercial mortgages.
27. Line 40 less lines 41 and 47.
28. Excludes equity issues and investment company shares. Includes line 20.
30. Foreign deposits at commercial banks plus bank borrowings from foreign
affiliates, less claims on foreign affiliates and deposits by banking in foreign banks.
31. Demand deposits and note balances at commercial banks.
32. Excludes net investment of these reserves in corporate equities.
33. Mainly retained earnings and net miscellaneous liabilities.
34. Line 14 less line 21 plus line 28.
35-39. Lines 15-19 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 39 includes mortgages.
41. Mainly an offset to line 10.
48. Lines 34 plus 40, or line 14 less line 29 plus 41 and 47.
49. Line 2/line 1 and 13.
50. Line 21/line 14.
51. Sum of lines 11 and 30.
52-54. 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, Stop 95, Division of
Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
A46
Domestic Nonfinancial Statistics • October 1989
2.10 NONFINANCIAL BUSINESS ACTIVITY
Selected Measures1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1989
1988
Measure
1986
1987
1988
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May r
June r
July
1
Industrial production
125.1
129.8
137.2
139.9
140.4
140.8
140.5
140.7
m.r
140.1
144.3
139.9
2
3
4
5
6
7
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
133.3
132.5
124.0
143.6
136.2
113.8
81.1
136.8
127.7
148.8
143.5
118.2
145.9
144.3
133.9
158.2
151.5
125.3
148.4
146.8
136.8
159.9
154.2
128.3
149.4
147.7
138.2
160.4
155.0
128.3
150.1
148.2
138.5
161.1
156.6
128.1
150.0
148.6
138.7
161.6
155.1
127.4
150.5
148.9
138.4
162.8
156.1
127.3
149.6 R
148.2'
137.5'
162.2 R
154.7 R
128.9 R
149.6
148.4
137.0
163.4
153.7
127.1
155.6
154.1
143.6
168.1
160.7
128.9
151.6
149.5
137.9
164.9
158.7
124.0
8
Industry groupings
Manufacturing
129.1
134.6
142.8
145.8
146.3
147.2
146.8
147.0
148.0'
148.0
148.1
148.3
79.7
78.6
81.1
80.5
83.5
83.7
84.4
85.1
84.4
84.9
84.7
84.6
84.3
84.0
84.1
83.7
84.5'
84.2r
84.2
83.9
84.0
83.2
83.9
83.4
Capacity utilization (percent)*
9
Manufacturing
Industrial materials industries
10
11
Construction contracts (1982 = 100)3
158.0
164.0
161.0
158.0
163.0
155.0
148.0
150.0
163.0
159.0
157.0
163.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total4
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker....
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable 6personal income5
Retail sales
120.7
100.9
96.3
91.1
129.0
219.4
210.8
177.4
218.5
199.3
124.1
101.8
96.8
91.9
133.4
235.0
226.3
183.8
232.4
210.8
128.6
105.0
99.2
94.3
138.5
252.8
244.4
196.5
252.1
225.1
129.5
104.6
99.3
94.5
140.0
259.3
251.7
201.4
259.0
232.4
129.9
104.8
99.5
94.7
140.4
261.7
253.2
201.1
261.4
231.8
130.3
105.3
99.8
94.9
140.8
265.8
256.1
203.0
264.0
233.2
130.6
105.3
99.8
95.0
141.2
268.7
257.3
204.0
268.1
232.2
130.8
105.4
100.0
95.1
141.5
271.3
259.5
207.5
270.3
232.4
131.1
105.5
99.9
95.0
141.8
272.9
261.7
205.7
269.6
235.5
131.3
105.5
99.9
95.0
142.2
273.4
261.9
205.8
271.6
237.4
131.7
105.4
99.8
94.8
142.7
274.7
263.7
206.9
273.8
237.2
131.9
105.5
99.9
94.9
143.0
276.8
266.3
207.5
275.8
239.4
109.6
103.2
113.6
105.4
118.3
108.0
120.3
109.8
120.5
110.0
121.1
111.1
121.6
111.7
122.3
112.1
123.1
113.0
123.8
114.2
124.1
114.1
124.4
114.0
Prices7
22
23
C o n s u m e r ( 1 9 8 2 - 8 4 = 100)
Producer finished goods (1982 = 100) . . .
1. 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) t h r o u g h D e c e m b e r 1984 in t h e FEDERAL RESERVE BULLETIN, v o l . 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics 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. Dodge Division.
4. Based on data in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).
6. Based on Bureau of Census data published in Survey of Current Business.
7. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.
Selected Measures
2.11
A47
LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1988
Category
1986
1987
1989
1988
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
HOUSEHOLD SURVEY DATA
1 Noninstitutional population1
182,822
185,010
186,837
187,618
187,859
187,979
188,102
188,228
188,377
188,518
188,672
2 Labor force (including Armed Forces)1
3 Civilian labor force
Employment
4
Nonagricultural industries
5
Agriculture
Unemployment
6
Number
7
Rate (percent of civilian labor force) . . . .
8 Not in labor force
120,078
117,834
122,122
119,865
123,893
121,669
124,779
122,563
125,643
123,428
125,383
123,181
125,469
123,264
125,863
123,659
125,806
123,610
126,291
124,102
126,145
123,956
106,434
3,163
109,232
3,208
111,800
3,169
112,816
3,193
113,411
3,300
113,630
3,223
113,930
3,206
114,009
3,104
114,102
3,112
114,445
3,096
114,240
3,219
8,237
7.0
62,744
7,425
6.2
62,888
6,701
5.5
62,944
6,554
5.3
62,839
6,716
5.4
62,216
6,328
5.1
62,596
6,128
5.0
62,633
6,546
5.3
62,365
6,395
5.2
62,571
6,561
5.3
62,227
6,497
5.2
62,527
99,525
102,310
106,039
107,097
107,442
107,711
107,888
108,101
108,31Or
108,560'
108,729
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
19,536
733
5,294
5,584
25,362
6,679
25,464
17,387
19,589
711
5,213
5,634
25,453
6,744
26,230
17,523
19,648
711
5,267
5,654
25,553
6,746
26,318
17,545
19,648
711
5,270
5,667
25,631
6,763
26,434
17,587
19,680
714
5,252
5,666
25,685
6,774
26,520
17,597
19,672
720
5,279
5,682
25,695
6,776
26,651
17,626
19,667'
722
5,283'
5,700
25,750'
6,790
26,71 r
17,687'
19,655'
715'
5,281'
5,716'
25,777'
6,801
26,923'
17,692'
19,658
704
5,318
5,739
25,834
6,812
26,997
17,667
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment3
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).
A48
2.12
Domestic Nonflnancial Statistics • October 1989
O U T P U T , C A P A C I T Y , A N D CAPACITY U T I L I Z A T I O N 1
Seasonally adjusted
1989
1988
1988
1989
1988
1989
Series
Q3
Q4
Ql
Q2'
Q3
Output (1977 = 100)
Q4
Ql
Q2
Q3
Capacity (percent of 1977 output)
Q4
Ql
Q2r
Utilization rate (percent)
1 Total industry
138.4
139.9
140.7
141.4
165.2
166.3
167.5
168.7
83.8
84.1
84.0
83.9
2 Mining
3 Utilities
103.9
115.1
104.2
114.3
101.8
116.0
102.2
116.7
126.3
140.4
125.7
140.7
125.1
141.0
124.7
141.4
82.3
81.9
82.9
81.3
81.3
82.3
81.3
82.1
4 Manufacturing
144.0
145.8
147.0
147.7
171.5
172.8
174.3
175.7
84.0
84.4
84.4
84.2
5 Primary processing
6 Advanced processing. ,
125.9
154.9
127.7
156.7
127.8
158.6
127.3
160.1
143.9
188.1
145.2
189.5
146.5
191.0
147.8
192.6
87.5
82.4
87.9
82.7
87.3
83.0
86.2
83.3
7 Materials
126.5
128.0
127.6
127.7
150.1
150.8
151.7
152.6
84.3
84.9
84.1
83.7
8 Durable goods
9
Metal materials
10 Nondurable goods
11 Textile, paper, and chemical ..
12
Paper
13
Chemical
137.1
92.7
132.8
135.3
148.9
139.4
139.2
94.8
135.4
138.1
148.6
144.1
138.6
92.3
136.3
139.2
148.4
145.4
138.5
89.9
137.2
140.2
145.4
146.3
I67.Y
109.5
149.8
150.2
150.7
157.4
169.0
109.8
151.2
151.8
152.3
159.3
170.1
110.2
152.7
153.5
154.0
161.4
171.3
110.6
154.2
155.3
155.8'
163.7'"
81.6
84.8
88.6
90.0
98.8
88.6
82.4
86.3
89.5
91.0
97.6
90.5
81.5
83.8
89.3
90.7
96.4
90.1
80.8
81.3
89.0
90.3
93.3
89.4
14 Energy materials
102.5
102.0
100.7
100.5
119.0
118.7
118.4
118.3
86.0
86.0
85.0
84.9
Previous cycle 2
High
Low
Latest cycle 3
1988
Low
July
High
1988
Nov.
1989
Dec.
Jan.
Feb.
Mar.
Apr.'
May'
June'
July
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
83.7
84.1
84.3
84.3
83.9
83.8
84.2
83.9
83.6
83.6
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
82.5
81.5
83.3
80.8
83.6
82.0
82.2
80.9
80.6
82.6
81.2
83.3
82.0
82.9
81.4
82.3
80.6
81.2
80.9
81.8
18 Manufacturing
87.7
69.9
86.5
68.0
84.0
84.4
84.4
84.7
84.3
84.1
84.5
84.2
84.0
83.9
19 Primary processing....
20 Advanced processing..
91.9
86.0
68.3
71.1
89.1
85.1
65.0
69.5
87.8
82.2
88.1
82.6
87.9
82.8
88.4
83.1
87.0
83.0
86.4
83.0
86.8
83.5
86.1
83.4
85.9
83.1
86.3
82.8
21 Materials
92.0
70.5
89.1
68.5
84.4
85.1
84.9
84.6
84.0
83.7'
84.2
83.7
83.2
83.4
22 Durable goods
23
Metal materials
24 Nondurable goods . . . .
25
Textile, paper, and
chemical
76
77
91.8
99.2
91.1
64.4
67.1
66.7
89.8
93.6
88.1
60.9
45.7
70.7
81.7
84.9
88.9
82.7
86.9
89.4
82.1
84.6
89.8
82.1
86.1
90.1
81.5
83.8
89.0
80.9
81.5
88.8
81.3
83.6
89.2
80.8
79.5
88.9
80.5
80.7
88.8
80.7
82.2
89.1
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.8
79.9
63.5
90.4
100.0
88.8
90.9
96.7
90.5
91.3r
98.4
90.7
91.5
98.1
90.7
90.3
95.8
89.8
90.2
95.3
89.7
90.7
94.5
90.1
89.9
93 2
88.9
90.2
92.3
89 1
90.5
28 Energy materials
94.6
86.9
94.0
82.3
86.2
86.2
86.5
84.9
84.9
85.4
86.0
85.2
83.7
83.9
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 INDUSTRIAL PRODUCTION
A49
Indexes and Gross Value1
Monthly data are seasonally adjusted
Groups
1977
proportion
1989
1988
avg.
July
Aug.
Sept.
Oct.
Nov
Dec.
Jan
Feb.
Mar.
Apr/
May
June*"
July'
Index (1977 = 100)
MAJOR MARKET
100.00
137.2
138.0
138.5
138.6
139.4
139.9
140.4
140.8
140.5
140.7
141.7
141.6
141.4
141.7
57.72
44.77
25.52
19.25
12.94
42.28
145.9
144.3
133.9
158.2
151.5
125.2
146.5
145.0
134.2
159.4
151.6
126.4
147.3
145.8
135.0
160.1
152.3
126.5
147.4
145.8
134.8
160.4
152.9
126.5
148.1
146.4
136.4
159.7
154.0
127.5
148.4
146.8
136.8
159.9
154.2
128.3
149.4
147.7
138.2
160.4
155.0
128.3
150.1
148.2
138.5
161.1
156.6
128.1
150.0
148.6
138.7
161.6
155.1
127.4
150.5
148.9
138.4
162.8
156.1
127.3
151.6
150.2
139.5
164.3
156.5
128.2
151.7
150.5
139.3
165.3
156.2
127.7
151.9
150.7
139.4
165.5
156.1
127.2
151.9
150.6
138.9
166.0
156.4
127.8
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
125.3
124.9
122.7
93.4
177.0
128.1
125.6
144.1
143.6
136.2
106.3
125.3
124.4
120.8
93.8
170.8
129.9
125.9
143.3
143.8
136.6
107.4
125.7
124.2
123.1
93.0
179.0
125.9
126.8
146.5
146.1
137.2
106.8
126.3
126.4
124.8
97.7
175.3
128.8
126.2
144.9
143.7
137.1
106.6
129.3
128.9
128.3
101.3
178.4
129.8
129.7
154.4
151.9
138.8
106.7
129.2
129.5
129.5
101.0
182.4
129.5
128.9
150.4
148.9
139.8
107.3
131.9
134.5
138.0
105.1
199.1
129.3
130.0
151.0
150.0
140.5
108.9
131.5
132.5
135.6
99.6
202.3
127.9
130.7
151.0
149.5
141.1
110.1
131.6
131.6
133.1
96.0
201.9
129.4
131.6
153.9
153.0
141.3
110.1
130.1
128.9
128.3
95.0
190.0
129.8
131.1
151.6
152.3
140.7
110.9
132.2
131.7
131.7
98.8
192.8
131.7
132.6
151.7
152.5
142.8
113.0
131.2
128.8
127.4
96.0
185.5
131.0
133.0
151.3
151.4
143.6
113.9
130.5
126.3
123.6
91.4
183.3
130.5
133.7
155.1
154.5
141.5
113.8
127.2
120.7
114.5
81.2
176.3
130.0
132.2
151.0
19 Nondurable consumer goods
20 Consumer staples
21
Consumer foods and tobacco
22
Nonfood staples
23
Consumer chemical products ..
24
Consumer paper products
25
Consumer energy
26
Consumer fuel
27
Residential utilities
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
137.1
144.9
140.9
149.1
180.0
163.4
110.0
95.4
124.8
137.5
145.3
141.1
149.6
181.8
164.0
109.3
94.6
124.4
138.5
146.6
141.3
152.1
183.8
165.3
113.0
95.5
130.9
138.0
145.8
141.1
150.7
185.0
166.3
107.6
92.7
122.8
139.0
147.0
142.4
151.8
186.1
167.1
108.9
95.3
122.7
139.7
147.9
143.7
152.2
185.7
167.8
109.8
94.1
125.8
140.5
148.9
144.5
153.6
186.8
169.0
111.6
96.3
127.1
141.1
149.4
144.8
154.2
187.6
174.2
109.1
96.7
121.7
141.4
149.7
144.3
155.4
187.8
177.0
110.1
95.0
125.4
141.4
149.9
143.3
156.9
188.9
180.4
110.7
95.6
126.1
142.2
150.7
144.7
156.9
187.3
180.9
112.0
97.3
127.0
142.2
150.7
145.2
156.4
188.1
180.6
110.1
93.6
127.0
142.7
151.2
145.5
157.1
188.9
181.4
110.7
96.2
143.3
151.7
Equipment
28 Business and defense equipment
29 Business equipment
30
Construction, mining, and farm .,
31
Manufacturing
32
Power
33
Commercial
34
Transit
35 Defense and space equipment
18.01
14.34
2.08
3.27
1.27
5.22
2.49
3.67
163.3
157.6
71.9
131.3
89.4
245.2
114.9
185.9
164.6
159.3
73.6
132.4
89.8
248.2
115.9
184.9
165.2
160.2
73.1
134.0
90.9
249.8
115.2
184.9
165.6
160.8
74.3
135.8
92.2
248.7
116.8
184.5
165.1
160.2
74.2
136.2
91.5
245.4
120.3
184.0
165.5
161.2
74.5
136.2
92.1
247.0
122.3
182.2
166.2
162.6
74.6
137.0
91.8
248.9
124.9
180.5
167.1
163.8
74.3
136.3
92.8
252.4
125.7
180.0
167.9
165.0
75.6
137.8
92.7
254.3
125.2
179.3
168.9
166.3
76.9
138.6
93.0
257.6
123.9
178.7
170.3
167.8
77.6
139.7
93.6
260.1
124.8
179.9
171.3
168.9
76.4
140.2
93.1
263.2
125.3
180.7
171.4
168.9
76.2
141.5
92.6
262.8
124.8
181.1
171.8
169.3
76.1
142.4
92.9
264.3
122.6
181.7
5.95
6.99
5.67
1.31
138.6
162.5
168.5
136.3
138.4
162.8
168.6
137.6
138.1
164.4
170.6
137.7
138.4
165.2
171.8
136.7
140.0
165.9
172.3
138.2
140.7
165.7
172.9
134.3
141.4
166.7
173.8
135.8
142.3
168.8
175.9
138.2
139.5
168.4
175.4
138.3
139.3
170.4
177.4
140.3
140.2
170.4
177.9
138.0
139.3
170.6
178.1
138.2
139.8
170.0
177.2
138.8
139.3
20.50
4.92
5.94
9.64
4.64
135.4
108.9
171.7
126.7
95.9
136.8
110.1
174.1
127.5
98.4
136.6
109.8
173.5
127.6
97.3
137.8
174.0
129.2
100.3
138.9
111.4
174.9
130.8
101.1
139.8
113.9
175.0
131.3
101.4
139.0
112.5
174.1
130.9
99.8
139.4
111.7
175.2
131.5
100.8
138.6
112.1
175.2
129.7
98.4
137.9
110.7
175.3
128.8
95.9
139.0
110.8
176.9
130.0
98.0
138.4
111.9
177.2
128.0
94.0
138.2
110.1
177.2
128.6
95.5
138.9
109.2
178.8
129.5
97.3
45 Nondurable goods materials
46 Textile, paper, and chemical
materials
47
Textile materials
48
Pulp and paper materials
49
Chemical materials
50 Miscellaneous nondurable materials
10.09
132.0
132.8
133.1
132.6
134.7
135.1
136.3
137.1
135.9
136.0
137.1
137.1
137.5
138.3
7.53
1.52
1.55
4.46
2.57
134.4
109.9
147.3
138.3
124.9
135.3
108.5
150.3
139.2
125.6
135.7
110.1
148.3
140.0
125.6
134.9
109.2
148.1
139.0
125.9
137.4
109.5
148.4
143.1
126.6
137.9
110.1
147.2
144.2
127.0
139.1
110.0
150.3
145.1
128.0
139.9
112.1
150.4
145.7
129.1
138.6
110.7
147.5
145.0
128.0
139.0
111.8
147.3
145.4
127.2
140.3
114.6
146.7
146.8
127.8
139.6
116.8
145.2
145.5
129.6
140.6
119.4
144.3
146.5
141.6
51 Energy materials
52 Primary energy
53 Converted fuel materials
11.69
7.57
4.12
101.5
106.3
92.8
102.7
106.8
95.3
103.2
106.2
97.7
101.5
106.8
91.8
101.3
106.0
92.6
102.3
108.6
90.7
102.6
107.6
93.3
100.5
105.2
92.0
100.5
104.4
93.3
101.0
103.7
96.1
101.7
104.1
97.4
100.8
103.5
95.7
98.9
101.6
94.0
99.1
1 Total index
2 Products
3
Final products
4
Consumer goods
Equipment
5
6
Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9
Automotive products
10
Autos and trucks
11
Autos, consumer
12
Trucks, consumer
13
Auto parts and allied goods
14 Home goods
15
Appliances, A/C and TV
16
Appliances and TV
17
Carpeting and furniture
18
Miscellaneous home goods
Intermediate products
36 Construction supplies
37 Business supplies
38 General business supplies
39 Commercial energy products
Materials
40 Durable goods materials
41 Durable consumer parts
42
Equipment parts
43 Durable materials n.e.c
44
Basic metal materials
111.0
157.9
11L9
A50
Domestic Nonfinancial Statistics • October 1989
2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued
Groups
SIC
code
1977
propor-
1989
1988
avg.
July
Aug.
Sept.
Oct.
Nov.
Dec
Jan.
Feb.
Mar.
Apr/
May
June p
July
Index (1977 = 100)
MAJOR INDUSTRY
15.79
9.83
5.96
84.21
35.11
49.10
107.5
103.4
114.3
142.7
143.9
141.9
108.1
104.3
114.4
143.6
144.6
142.9
109.0
103.8
117.8
144.0
145.1
143.2
107.2
103.7
113.0
144.4
145.3
143.8
107.2
103.1
113.9
145.3
146.3
144.6
108.1
104.7
113.7
145.8
146.7
145.2
108.9
104.9
115.4
146.3
147.1
145.7
107.2
103.0
114.0
147.2
148.5
146.2
106.8
100.9
116.5
146.8
148.1
145.9
107.5
101.5
117.5
147.0
148.6
145.8
107.9
102.4
117.1
148.0
149.6
146.9
107.1
101.6
116.3
148.0
149.6
146.9
105.9
100.4
114.9
148.1
149.9
146.8
106.4
100.7
115.8
148.3
150.6
146.7
10
11.12
13
14
.50
1.60
7.07
.66
93.2
137.9
92.9
139.9
94.0
141.5
93.3
140.2
96.6
137.2
93.2
141.3
99.1
142.2
92.0
139.7
101.6
138.5
91.5
142.8
104.6
149.7
90.8
144.0
111.9
155.1
88.9
149.4
106.9
144.7
88.9
150.8
98.6
134.7
89.5
142.5
98.1
137.7
89.6
143.5
96.8
145.5
89.1
144.5
94.0
137.1
90.0
145.0
129.2
98.7
148.1
128.5
1 Mining and utilities
2
Mining
3
Utilities
4 Manufacturing
5
Nondurable
6
Durable
7
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
11
12
13
14
15
Nondurable
manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
7.96
.62
2.29
2.79
3.15
142.7
105.2
116.2
109.1
150.3
143.3
100.6
117.1
109.4
152.3
143.3
105.1
116.4
108.9
151.0
143.2
105.0
116.2
109.9
150.9
144.0
105.4
117.0
109.5
151.8
145.7
102.4
117.2
110.1
150.7
145.8
107.0
117.9
108.8
151.7
146.6
105.0
120.2
110.2
153.8
146.3
104.7
119.4
110.2
151.7
145.4
101.5
119.7
109.9
151.7
146.6
109.2
122.5
111.3
150.7
147.4
147.6
123.6
111.6
150.1
124.6
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
184.2
151.9
96.0
174.4
59.5
184.9
153.4
95.0
175.4
59.1
186.7
154.8
96.0
175.3
59.4
188.0
155.3
93.7
175.3
59.9
188.1
156.7
96.3
176.9
61.0
188.5
157.5
95.0
177.5
61.5
188.0
158.1
98.0
177.5
60.2
193.0
159.0
98.0
175.9
62.9
194.6
158.5
96.3
175.0
62.9
198.5
159.2
97.0
176.4
61.2
200.1
159.3
97.3
178.0
61.4
199.4
158.4
96.7
180.1
60.3
199.5
159.1
98.4
180.5
60.3
24
25
32
2.30
1.27
2.72
137.3
162.1
122.6
136.6
162.9
122.2
133.8
164.9
122.6
133.5
164.9
122.6
137.5
164.5
123.3
139.4
165.4
124.7
143.0
165.4
125.1
139.9
166.3
126.6
132.8
164.8
125.4
133.4
165.8
125.5
135.1
168.0
124.7
134.7
169.5
122.7
135.6
169.5
123.4
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
89.2
78.1
120.9
170.8
180.1
91.5
80.2
121.7
173.1
181.5
90.8
78.9
122.1
174.1
182.2
93.1
81.4
122.5
174.8
181.8
94.2
83.1
122.6
173.8
183.0
92.7
80.8
124.6
175.4
182.2
90.0
77.6
125.1
177.8
180.9
93.2
82.2
124.5
178.7
180.9
91.1
79.1
124.5
180.8
181.7
88.4
75.9
123.8
183.0
181.6
90.1
77.0
123.1
184.7
182.2
86.9
73.2
124.7
186.5
181.1
87.3
73.4
124.6
186.6
181.1
124.9
187.6
180.9
37
371
9.13
5.25
132.1
117.2
131.9
116.6
131.8
117.5
132.7
118.5
134.8
121.7
135.2
122.9
136.8
125.5
136.7
124.9
136.4
123.4
134.8
120.4
136.4
122.0
135.5
119.7
134.3
116.5
132.0
110.8
72-6.9
38
39
3.87
2.66
1.46
152.4
154.3
107.1
152.7
156.4
107.8
151.3
156.8
108.3
151.9
157.8
108.5
152.7
159.9
107.7
151.9
160.4
109.0
152.2
159.1
110.9
152.7
161.0
112.2
154.0
161.3
110.0
154.4
161.8
112.5
155.9
163.0
115.3
157.1
164.6
116.8
158.5
164.4
116.4
160.8
166.1
4.17
132.0
134.6
138.8
132.2
132.8
131.6
132.9
131.0
135.3
137.0
137.1
135.8
133.7
135.5
Durable
manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, and stone p r o d u c t s . . .
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 manufactures
Utilities
34 Electric
148.4
200.2
99.9
88.8
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKET
35 Products, total.
517.5 1,824.5 1,822.3 1,828.6 1,828.9 1.853.4 1,855.5 1,875.3 1,885.1 1,879.2 1,878.0 1,893.9 1,885.9 1,883.6 1,864.9
36 Final
37
Consumer goods.
38
Equipment
39 Intermediate
405.7
272.7
133.0
111.9
1,401.2 1,398.9 1,404.2 1,404.3 1.423.5 1,426.3 1,442.1 1,447.5 1,449.6 1,442.8 1,460.4 1,450.4 1,449.8 1,429.9
902.4 895.6 900.4 897.2 915.0 918.4 934.4 935.6 934.3 928.0 939.4 929.5 929.3 919.9
498.8 503.2 503.8 507.1 508.4 507.9 507.7 511.9 515.2 514.8 521.1 520.9 520.5 510.0
423.3 423.4 424.3 424.5 430.0 429.3 433.2 437.7 429.6 435.3 433.5 435.5 433.8 435.0
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
A51
2.14 HOUSING AND CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates e x c e p t as noted.
1989
1988
Item
1986
1987
1988
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May r
June
Private residential real estate activity (thousands of units)
N E W UNITS
1
2
3
Permits authorized
1-family
2-or-more-family
1,750
1,071
679
1,535
1,024
511
1,456
994
462
1,432
980
452
1,526
1,029
497
1,508
1,027
481
1,518
1,058
460
1,486
1,052
434
1,403
989
414
1,230
870
360
1,334
954
380
1,347
905
442
1,308
874
434
4
6
Started
1-family
2-or-more-family
1,805
1,180
626
1,621
1,146
474
1,488
1,081
407
1,463
1,039
424
1,532
1,136
396
1,567
1,138
429
1,577
1,141
436
1,678
1,199
479
1,465
1,029
436
1,409
981
428
1,343
1,029
314
1,308
977
331
1,419
979
440
7
8
9
Under construction, end of period 1 .
1-family
2-or-more-family
1,074
583
490
987
591
397
919
570
350
955
596
359
951
597
354
959
603
356
956
603
353
957
602
355
951
594
357
942
586
356
924
579
345
910
572
338
915
573
342
10
11
12
Completed
1-family
2-or-more-family
1,756
1,120
636
1,669
1,123
546
1,530
1,085
445
1,536
1,092
444
1,516
1,088
428
1,429
1,037
392
1,539
1,108
431
1,537
1,141
396
1,610
1,189
421
1,459
1,050
409
1,552
1,115
437
1,441
1,045
396
1,332
946
386
13
Mobile homes shipped
244
233
218
224
216
227
225
232
212
207
198
205
202
748
357
672
365
675
366
691
361
718
353
650
364
669
366
700
369
621
375
555
377
607
377
646
381
646
379
92.2
104.7
113.3
116.6
112.9
110.4
121.0
113.0
118.0
123.0
116.7
118.9
123.4
144.0
155.5
3,210
3,400
Merchant builder activity in
1-family units
14 Number sold
15 Number for sale, end of period
Price (thousands of dollars)2
Median
16
Units sold
17
Units sold
18
Number sold
112.2
127.9
139.0
142.7
137.3
137.3
147.7
138.6
145.3
149.0
144.7
3,566
3,530
3,594
3,650
3,680
3,710
3,920
3,550
3,480
3,400
3,400
80.3
98.3
85.6
106.2
89.2
112.5
88.5
112.6
88.9
112.3
88.5
88.7
112.0
89.7
113.0
91.9
117.8
92.0
116.1
92.9
92.6
93.2
112.4
118.0
118.0
118.7
EXISTING UNITS ( 1 - f a m i l y )
Price of units sold
(thousands of dollars)
19 Median
20 Average
Value of new construction 3 (millions of dollars)
CONSTRUCTION
21 Total put in place
387,043
397,721
409,663
411,525
411,074
415,442
425,035
424,791
418,465
419,152
415,783
418,184
414,691
72 Private
23
Residential
24
Nonresidential, total
Buildings
75
Industrial
?6
Commercial
77
Other
28
Public utilities and other
315,313
187,147
128,166
320,108
194,656
125,452
328,738
198,101
130,637
329,848
198,322
131,526
331,374
200,780
130,594
332,798
202,048
130,750
336,254
202,480
133,774
339,481
204,707
134,774
335,037
202,322
132,715
340,438
204,456
135,982
335,363
203,952
131,411
333,492
200,179
133,313
334,043
197,939
136,104
13,747
56,762
13,216
44,441
13,707
55,448
15,464
40,833
14,931
58,104
17,278
40,324
14,872
58,805
17,700
40,149
15,515
57,284
17,340
40,455
15,413
56,676
17,328
41,333
15,045
58,659
17,744
42,326
15,890
59,350
17,976
41,558
15,098
58,749
17,484
41,384
15,698
60,653
17,634
41,997
16,263
55,611
16,944
42,593
16,089
56,852
17,324
43,048
16,818
57,994
17,555
43,737
71,727
3,868
22,971
4,646
40,242
77,612
4,327
25,343
5,162
42,780
80,922
3,579
28,524
4,474
44,345
81,677
4,373
26,274
4,995
46,035
79,700
2,617
28,707
4,343
44,033
82,644
3,420
28,992
4,134
46,098
88,781
3,905
33,674
4,412
46,790
85,310
3,440
30,792
4,121
46,957
83,428
3,433
27,936
4,742
47,317
78,714
3,740
26,091
4,210
44,673
80,420
3,133
27,772
3,077
46,438
84,692
3,386
27,382
6,071
47,853
80,648
3,378
26,405
4,729
46,136
29 Public
30
Military
31
Highway
32 Conservation and development...
33
Other
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly
comparable with data in previous periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports (C-30-76-5), issued by the 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.
A52
Domestic Nonfinancial Statistics • October 1989
2.15 CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Item
1988
1988
1989
July
July
Change from 1 month earlier
1989
Index
level
July
1989
1989'
Sept.
Dec.
Mar/
June r
Mar/
Apr/
May
June
July
CONSUMER PRICES 2
(1982-84=100)
1
All items
4.1
5.0
4.8
4.1
6.1
5.7
.5
.7
.6
.2
.2
124.4
2
3
4
5
6
Food
Energy items
All items less food and energy
Commodities
Services
4.5
.3
4.5
3.6
4.9
5.6
7.8
4.6
3.1
5.3
8.8
2.7
4.3
3.1
4.8
3.0
-.4
4.9
4.2
5.4
8.2
10.2
5.2
4.1
5.9
5.6
24.8
3.8
2.0
4.3
.8
1.1
.4
.3
.5
.5
5.1
.2
.2
.2
.6
1.6
.5
.4
.5
.2
-1.0
.2
-.1
.4
.3
-.7
.4
.1
.6
125.5
98.5
129.0
118.8
134.8
'/
8
9
10
11
Finished goods
Consumer foods
Consumer energy
Other consumer goods
Capital equipment
2.5
2.4
-3.3
4.0
2.3
5.0
4.8
11.6
4.3
3.9
5.7
9.2
-2.7
5.9
6.1
3.0
2.1
1.4
4.4
1.7
10.2
13.1
41.0
5.4
4.6
5.1
-2.0
31.0
5.3
4.1
.4
.8
1.4
.2
.1
.4
-.5
6.8
.1
-.1
.9
.8
3.3
.5
.4
-.1
-.8
-3.1
.7
.7
-.4
.1
-3.0
-.3
.0
114.0
119.0
68.4
123.9
118.6
12
13
Intermediate materials3
Excluding energy
5.5
7.2
4.4
4.0
4.6
7.2
4.5
6.7
8.7
5.5
2.5
.3
.5
.3
.5
.2
.3
.2
-.2
-.2
-.3
-.2
112.5
120.3
14
15
16
Crude materials
Foods
Energy
Other
11.9
-13.5
14.9
-.4
17.2
1.5
29.1
-27.0
8.5
-7.9
12.3
12.5
16.9
48.3
10.3
-18.7
22.3
-9.8
3.1
2.1
.4
-2.9
4.8
-.9
.4
2.2
-.4
-2.6
-1.8
-1.3
-1.1
2.1
-1.5
109.7
78.9
134.9
PRODUCER PRICES
(1982=100)
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
A53
2.16 GROSS NATIONAL PRODUCT AND INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1989
1988
Account
1986
1987
1988
Q2
Q3
Q4
Ql
Q2'
GROSS NATIONAL PRODUCT
4,231.6
4,524.3
4,880.6
4,838.5
4,926.9
5,017.3
5,113.1
5,203.8
2,797.4
406.0
942.0
1,449.5
3,010.8
421.0
998.1
1,591.7
3,235.1
455.2
1,052.3
1,727.6
3,204.9
454.6
1,042.4
1,707.9
3,263.4
452.5
1,066.2
1,744.7
3,324.0
467.4
1,078.4
1,778.2
3,381.4
466.4
1,098.3
1,816.7
3,446.8
471.0
1,122.0
1,853.8
659.4
652.5
435.2
139.0
296.2
217.3
699.9
670.6
444.3
133.8
310.5
226.4
750.3
719.6
487.2
140.3
346.8
232.4
748.4
719.1
487.1
139.9
347.2
232.1
771.1
726.5
493.2
142.0
351.3
233.2
752.8
734.1
495.8
142.5
353.3
238.4
769.6
742.0
503.1
144.7
358.5
238.8
774.7
747.4
512.6
142.8
369.8
234.8
6.9
8.6
29.3
30.5
30.6
34.2
29.3
30.4
44.6
41.5
18.7
40.8
27.7
19.1
27.3
23.8
14 Net exports of goods and services
15 Exports
16 Imports
-97.4
396.5
493.8
-112.6
448.6
561.2
-73.7
547.7
621.3
-74.9
532.5
607.5
-66.2
556.8
623.0
-70.8
579.7
650.5
-54.0
605.6
659.6
-52.7
623.2
675.9
17 Government purchases of goods and services
18 Federal
19 State and local
872.2
366.5
505.7
926.1
381.6
544.5
968.9
381.3
587.6
960.1
377.1
583.0
958.6
367.5
591.0
1,011.4
406.4
604.9
1,016.0
399.0
617.0
1,034.9
407.8
627.1
4,224.8
1,686.7
724.2
962.5
2,119.3
425.6
4,495.0
1,785.2
777.6
1,007.6
2,304.5
434.6
4,850.0
1,931.9
863.6
1,068.3
2,499.2
449.5
4,809.2
1,917.4
857.2
1,060.2
2,472.3
448.8
4,882.3
1,955.8
884.0
1,071.8
2,520.3
450.8
4,998.7
1,987.4
888.5
1,098.9
2,570.0
459.9
5,085.4
2,030.9
894.7
1,136.2
2,620.8
461.3
5,176.5
2,079.8
904.5
1,175.3
2,668.9
455.0
6.9
1.2
5.6
29.3
22.0
7.2
30.6
25.0
5.6
29.3
17.0
12.3
44.6
41.4
3.2
18.7
32.0
-13.3
27.7
22.0
5.7
27.3
5.7
21.7
3,717.9
3,853.7
4,024.4
4,010.7
4,042.7
4,069.4
4,106.8
4,134.0
30
3,412.6
3,665.4
3,972.6
3,933.6
4,005.7
4,097.4
4,185.2
4,249.9
31 Compensation of employees
32 Wages and salaries
Government and government enterprises
33
34
Other
35 Supplement to wages and salaries
Employer contributions for social insurance
36
37
Other labor income
2,511.4
2,094.8
393.7
1,701.1
416.6
217.3
199.3
2,690.0
2,249.4
419.2
1,830.1
440.7
227.8
212.8
2,907.6
2,429.0
446.5
1,982.5
478.6
249.7
228.9
2,878.9
2,405.4
443.1
1,962.3
473.5
247.7
225.9
2,935.1
2,452.2
449.6
2,002.6
482.9
251.8
231.1
2,997.2
2,505.1
456.3
2,048.9
492.0
255.6
236.5
3,061.7
2,560.7
466.9
2,093.8
501.0
259.7
241.3
3,118.0
2,608.6
473.5
2,135.1
509.4
263.4
246.0
282.0
247.2
34.7
311.6
270.0
41.6
327.8
288.0
39.8
331.8
286.5
45.4
327.0
289.3
37.7
328.3
296.3
32.0
359.3
300.3
59.0
355.0
304.2
50.7
11.6
13.4
15.7
14.6
16.3
16.1
11.8
9.7
316.3
318.0
-38.3
36.6
309.1
297.6
-20.7
32.3
436.1
458.1
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
Producers' durable equipment
10
11
Residential structures
12
13
Change in business inventories
Nonfarm
By major type of product
20 Final sales, total
21 Goods
Durable
22
23
Nondurable
24 Services
25 Structures
26 Change in business inventories
27 Durable goods
28 Nondurable goods
MEMO
29 Total GNP in 1982 dollars
NATIONAL INCOME
38 Proprietors' income1
39 Business and professional
40 Farm 1
41 Rental income of persons 2
42 Corporate profits'
43 Profits before tax 3
44 Inventory valuation adjustment
45 Capital consumption adjustment
282.1
221.6
6.7
53.8
298.7
266.7
-18.9
50.9
328.6
306.8
-25.0
46.8
325.3
305.3
-28.8
48.9
330.9
314.4
-30.4
46.9
340.2
318.8
-20.1
41.5
46 Net interest
325.5'
351.7'
392.9'
383.0
396.4
415.7
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A54
Domestic Nonfinancial Statistics • October 1989
2.17 PERSONAL INCOME AND SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1989
1988
Account
1986
1987
1988
Q2
Q3
Q4
Ql
Q2'
PERSONAL INCOME AND SAVING
1 Total personal income
3,526.2
3,777.6
4,064.5
4,026.6
4,097.6
4,185.2
4,317.8
4,399.6
2 Wage and salary disbursements
3 Commodity-producing industries
4
Manufacturing
5 Distributive industries
Service industries
6
7 Government and government enterprises
2,094.8
625.6
473.2
498.8
576.7
393.7
2,249.4
649.9
490.3
531.9
648.3
419.2
2,429.0
696.3
524.0
571.9
714.4
446.5
2,405.4
690.8
519.2
568.0
703.5
443.1
2,452.2
701.6
527.2
578.0
723.0
449.6
2,505.1
714.7
538.1
587.5
746.7
456.3
2,560.7
726.6
546.3
598.8
768.4
466.9
2,608.6
733.7
549.9
610.6
790.8
473.5
199.3
282.0
247.2
34.7
11.6
85.8
493.2
521.5
269.2
212.8
311.6
270.0
41.6
13.4
92.0
523.2
548.2
282.9
228.9
327.8
288.0
39.8
15.7
102.2
571.1
584.7
300.5
225.9
331.8
286.5
45.4
14.6
100.4
560.0
581.8
299.2
231.1
327.0
289.3
37.7
16.3
103.6
576.3
587.4
301.4
236.5
328.3
296.3
32.0
16.1
106.4
598.6
593.8
304.0
241.3
359.3
300.3
59.0
11.8
109.4
629.0
616.4
316.9
246.0
355.0
304.2
50.7
9.7
111.4
655.1
626.8
322.9
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income
Business and professional 1
Farm 1
Rental income of persons
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits . . .
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
19
LESS: Personal tax and nontax payments
161.9
172.9
194.9
193.4
196.4
199.6
210.0
213.0
3,526.2
3,777.6
4,064.5
4,026.6
4,097.6
4,185.2
4,317.8
4,399.6
512.9
571.7
586.6
590.7
585.9
597.8
628.3
652.6
20 EQUALS: Disposable personal income
3,013.3
3,205.9
3,477.8
3,435.9
3,511.7
3,587.4
3,689.5
3,747.0
21
LESS: Personal outlays
2,888.5
3,104.1
3,333.1
3,301.9
3,362.1
3,424.0
3,483.8
3,549.9
22 EQUALS: Personal saving
124.9
101.8
144.7
134.0
149.6
163.4
205.7
197.2
16,303.7'
10,515.4'
11,273.0
3.9
16,387.lr
10,572.0r
11,377.0
4.3
MEMO
Per capita (1982 dollars)
23 Gross national product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
15,385.5
10,123.7
10,905.0
4.1
15,793.9'
10,302.0'
10,970.0
3.2
16,332.8'
10,545.5'
11,337.0
4.2
16,455.3r
10,625.6''
11,466.0
4.6
16,566.4'
10,653.5'
11,625.0
5.6
16,635.8
10,685.3
11,618.0
5.3
GROSS SAVING
27 Gross saving
525.3
553.8
642.4
633.4
669.8
647.4
693.5
691.7
28
29
30
31
669.5
124.9
84.5
6.7
663.8
101.8
75.3
-18.9
738.6
144.7
80.3
-25.0
722.5
134.0
78.3
-28.8
742.4
149.6
77.6
-30.4
769.3
163.4
81.7
-20.1
792.1
205.7
53.4
-38.3
793.2
197.2
55.0
-20.7
285.9
174.2
303.1
183.6
321.7
191.9
319.0
191.2
323.1
192.1
329.7
194.4
335.2
197.8
339.7
201.3
-72.7
-122.5
49.8
-121.9
-167.6
45.7
-98.7
-147.5
48.8
-101.6
-148.4
46.8
Gross private saving
Personal saving
Undistributed corporate profits1
Corporate inventory valuation adjustment
Capital consumption
32 Corporate
33 Noncorporate
allowances
34
Government surplus, or deficit ( - ) , national income and
product accounts
36
State and local
-144.1
-206.9
62.8
-110.1
-161.4
51.3
-96.1
-145.8
49.7
-89.1
-141.5
52.4
37 Gross investment
523.6
549.0
632.8
633.4
661.2
630.8
669.3
675.5
752.8
-122.0
769.6
-100.3
774.7
-99.2
-16.6
-24.1
-16.1
38 Gross private domestic
39 Net foreign
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
659.4
-135.8
699.9
-150.9
750.3
-117.5
748.4
-115.0
771.1
-109.9
-1.8
-4.7
-9.6
-0.1
-8.6
SOURCE. Survey of Current Business (Department of Commerce).
Summary Statistics
3.10 U.S. INTERNATIONAL TRANSACTIONS
A55
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
1989
1988
Item credits or debits
1 Balance on current account
2
Not seasonally adjusted .
3 Merchandise trade balance
Merchandise exports
4
5
Merchandise imports
Military transactions, net
6
7
Investment income, net
8
Other service transactions, net
Remittances, pensions, and other transfers
9
10 U.S. government grants (excluding military)
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
1987
1986
1988
Q1
Q2
Q3
Q4
Qlp
-32,340
-36,926
-30,339
80,604
-110,943
-1,006
-2,590
4,971
-1,088
-2,288
-28,677
-28,191
-32,019
83,729
-115,748
-1,604
4,489
5,475
-1,090
-3,928
-30,685
-26,131
-27,634
88,496
-116,130
-1,482
-3,508
5,359
-1,192
-2,228
-133,249
-143,700
-126,548
-145,058
223,367
-368,425
-4,576
21,647
10,517
-4,049
-11,730
-159,500
250,266
-409,766
-2,857
22,283
10,586
-4,063
-10,149
-127,215
319,251
-446,466
-4,606
2,227
17,702
-4,279
-10,377
-32,046
-27,556
-33,446
76,447
-109,893
-964
2,795
2,933
-1,131
-2,233
-33,485
-33,875
-31,411
78,471
-109,882
-1,033
-2,465
4,323
-971
-1,928
-2,024
997
2,999
-1,490
-885
1,961
3,413
1,012
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
312
0
-246
1,501
-942
9,149
0
-509
2,070
7,588
-3,566
0
474
1,025
-5,064
1,503
0
155
446
901
39
0
180
69
-210
-7,380
0
-35
202
-7,547
2,272
0
173
307
1,791
-4,000
0
-188
316
-4,128
17 Change in U.S. private assets abroad (increase, - )
18 Bank-reported claims
19 Nonbank-reported claims
20 U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net
-97,954
-59,975
-7,396
-4,271
-26,312
-86,363
-42,119
5,201
-5,251
-44,194
-81,543
-54,481
-1,684
-7,846
-17,533
4,528
15,266
-65
-4,539
-6,134
-15,273
-12,602
-6,443
1,333
2,439
-32,467
-26,229
255
-1,592
-4,901
-38,332
-30,916
4,569
-3,047
-8,938
-28,828
-22,601
35,594
34,364
-1,214
2,141
1,187
-884
45,193
43,238
1,564
-2,520
3,918
-1,007
38,882
41,683
1,309
-1,284
-331
-2,495
24,631
27,702
-162
-304
-1,772
-833
5,895
5,853
202
-517
774
-417
-2,234
-3,769
572
-232
1,703
-508
10,589
11,897
697
-232
-1,036
-737
6,914
4,585
716
-377
1,538
452
186,011
79,783
-2,641
3,809
70,969
34,091
172,847
89,026
2,450
-7,643
42,120
46,894
180,418
68,832
6,558
20,144
26,448
58,436
2,396
-17,137
1,565
5,928
2,424
9,616
59,438
30,455
-59
5,458
9,699
13,885
48,413
23,291
2,350
3,422
7,454
11,896
70,170
32,223
2,702
5,336
6,871
23,038
42,163
10,398
0
11,308
0
1,878
0
-10,641
0
479
3,843
0
-15,729
-3,714
0
24,047
-4,556
0
-19,434
4,431
0
13,424
4,264
11,308
1,878
-10,641
-3,364
-12,015
28,603
-23,865
9,160
-2,554
-3,673
22 Change in foreign official assets in United States (increase,
23
24
25
26
27
+)
U.S. Treasury securities
Other U.S. government obligations
Other U.S. government liabilities
Other U.S. liabilities reported by U.S. banks 3
Other foreign official assets
28 Change in foreign private assets in United States (increase,
29
30
31
32
33
+)
U.S. bank-reported liabilitiesJ
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net
Foreign purchases of other U.S. securities, net
Foreign direct investments in United States, net
34 Allocation of SDRs
35 Discrepancy
36 Owing to seasonal adjustments
37 Statistical discrepancy in recorded data before seasonal
adjustment
8,745
8,591
14,429
MEMO
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in United States (increase, +)
excluding line 25
40 Change in Organization of Petroleum Exporting Countries
official assets in United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
312
9,149
-3,566
1,503
39
-7,380
2,272
-4,000
33,453
47,713
40,166
24,935
6,412
-2,002
10,821
7,291
-9,327
-9,955
-3,109
-1,547
-1,776
-459
672
7,059
%
53
92
41
4
7
40
13
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. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
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).
A56
3.11
International Statistics • October 1989
U.S. FOREIGN TRADE1
Millions of dollars; monthly data are seasonally adjusted.
1988
Item
1986
1987
1989
1988
Dec.
Jan.
Feb.
Mar.
Apr.
May
June"
(
1 EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments, f.a.s. value
227,159
254,122
322,426
28,864
28,980
28,839
30,065
30,759
30,455
30,914
GENERAL IMPORTS including
merchandise for immediate
consumption plus entries into
bonded warehouses
2
Customs value
365,438
406,241
440,952
39,668
37,877
38,220
39,549
39,045
40,534
39,085
-138,279
-152,119
-118,526
-10,805
-8,897
-9,381
-9,484
-8,286
-10,079
-8,170
Trade balance
3
Customs value
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-
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; the
previous month is revised to reflect late documents. 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).
3.12 U.S. RESERVE ASSETS
Millions of dollars, end of period
1989
Type
1986
1987
1988
Jan.
Feb.
Mar.
Apr.
May
June
July"
1 Total
48,511
45,798
47,802
48,190
49,373
49,854
50,303
54,941
60,502
63,462
2 Gold stock, including Exchange
Stabilization Fund
11,064
11,078
11,057
11,056
11,061
11,061
11,061
11,060
11,063
11,066
8,395
10,283
9,637
9,388
9,653
9,443
9,379
9,134
9,034
9,340
3
Special drawing rights2'3
4
Reserve position in International
Monetary Fund
11,730
11,349
9,745
9,422
9,353
9,052
9,132
8,513
8,888
9,055
5
Foreign currencies 4
17,322
13,088
17,363
18,324
19,306
20,298
20,731
26,234
31,517
34,001
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 holdings and reserve position
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.
3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
1989
Assets
1986
1987
1988
Jan.
1 Deposits
Assets held in custody
2 U.S. Treasury securities2
3 Earmarked gold
Mar.
Apr.
May
June
July"
287
244
347
279
325
351
352
428
275
371
155,835
14,048
195,126
13,919
232,547
13,636
228,399
13,635
230,860
13,609
234,075
13,602
235,145
13,576
232,004
13,612
229,914
13,545
233,170
13,530
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 gold stock of the United States.
Summary Statistics
3.14 FOREIGN BRANCHES OF U.S. BANKS
A57
Balance Sheet Data1
Millions of dollars, end of period
1989
1988
Asset account
1985
1986
1987
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
10 Nonbank foreigners
458,012
456,628
518,618
506,062
4%,755
501,682
519,740
517,276
521,436
523,665
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
342,520
122,155
108,859
21,832
89,674
169,111
129,856
14,918
24,337
299,728
107,179
96,932
17,163
78,454
167,143
127,403
14,559
25,181
291,892
102,482
93,663
16,931
78,816
168,558
128,115
13,506
26,937
296,240
103,962
95,6%
16,682
79,900
177,902
134,002
14,697
29,203
303,906
110,434
97,723
17,020
78,729
170,126r
127,557'
13,459
29,110
306,493
114,834
%,830
16,101
78,728
177,987
134,026
13,040
30,921
302,808
116,506
94,042
16,095
76,165
177,445
132,380
14,218
30,847
303,713
115,911
94,898
16,709
76,195
22,630
29,110
38,064
37,223
37,720
36,884
37,932
40,657r
40,641
42,507
12 Total payable in U.S. dollars
336,520
317,487
350,107
358,040
345,523
346,990
366,403
359,841
366,315
367,562
n 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
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
202,428
88,284
63,707
14,730
35,707
163,456
126,929
14,167
22,360
177,685
80,736
54,884
12,131
29,934
160,520
124,4%
12,908
23,116
167,288
76,221
49,391
11,749
29,927
161,336
124,288
12,025
25,023
168,293
76,565
50,013
11,781
29,934
170,091
129,431
13,259
27,401
178,134
82,797
53,893
11,831
29,613
162,954
123,258
12,539
27,157
179,308
87,777
50,815
11,467
29,249
169,796
128,771
11,909
29,116
177,308
86,625
49,793
11,282
29,608
169,520
127,352
13,207
28,961
180,013
88,874
50,627
11,815
28,697
9,753
11,804
15,656
16,899
17,715
17,361
18,178
17,579
19,211
18,029
11 Other assets
22 Other assets
United Kingdom
23 Total, all currencies
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
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
148,599
140,917
158,695
156,835
156,529
154,879
154,856
153,146
155,532
153,968
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
40,089
34,243
1,123
4,723
106,388
35,625
36,765
4,019
29,979
40,954
34,928
1,128
4,898
104,668
35,322
34,907
4,090
30,349
40,547
34,449
1,268
4,830
103,806
33,650
36,159
3,808
30,189
40,715
35,315
1,380
4,020
103,443
35,305
35,382
3,757
28,999
39,475'
34,741r
1,227
3,507
102,438
32,954
37,079
3,471
28,934
39,599
35,642
1,243
2,714
104,504
35,537
37,412
3,627
27,928
38,014
33,763
1,125
3,126
103,773
34,948
37,357
3,599
27,869
5,225
6,810
10,477
10,358
10,907
10,526
10,698
ll,233 r
11,429
12,181
108,626
95,028
100,574
103,503
102,873
100,863
103,211
98,463
101,612
99,028
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
38,012
33,252
964
3,7%
60,472
28,474
18,494
2,840
10,664
38,591
33,925
678
3,988
58,798
27,939
16,778
2,869
11,212
37,707
33,106
816
3,785
57,567
26,475
17,246
2,774
11,072
38,265
34,320
937
3,008
59,201
28,145
17,715
2,786
10,555
36,772
33,499
872
2,401
56,227
25,389
17,680
2,696
10,462
36,675
34,119
862
1,694
58,395
26,036
18,458
2,737
11,164
34,990
32,059
844
2,087
58,746
26,541
18,745
2,606
10,854
3,059
3,697
5,575
5,019
5,484
5,589
5,745
5,464
6,542
5,292
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
5?
53 Public borrowers
54 Nonbank foreigners
55 Other assets
56 Total payable in U.S. dollars
142,055
142,592
160,321
170,639
162,352
165,862
179,185
172,324
173,137
171,780
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
105,320
73,409
13,145
18,766
58,393
17,954
28,268
5,830
6,341
103,016
71,065
12,742
19,209
52,503
15,982
24,755
5,422
6,344
103,989
71,100
11,563
21,326
54,732
18,454
24,514
5,513
6,251
111,951
75,234
12,275
24,442
59,615
20,048
27,727
5,480
6,360
105,273
68,%9
11,563
24,741
60,103
26,261
22,641
5,374
5,827
111,823
73,627
10,807
27,389
53,984
21,962
21,184
5,280
5,558
109,800
70,735
12,116
26,949
54,537
22,324
21,202
5,540
5,471
3,309
4,539
4,841
6,926
6,833
7,141
7,619
6,948
7,330
7,443
136,794
136,813
151,434
163,518
154,981
158,011
172,148
166,389
166,869
165,676
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.
A58
International Statistics • October 1989
3.14—Continued
1988
1989
Liability account
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
All foreign countries
57 Total, all currencies
458,012
456,628
518,618
506,062
496,755
501,682
519,740
517,276
521,436
523,665
58 Negotiable CDs
59 To United States
60
Parent bank
61
Other banks in United States
62
Nonbanks
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
28,511
185,577
114,720
14,897
55,960
28,538
172,055
102,521
13,539
55,995
30,013
174,956
105,687
12,989
56,280
30,768
185,831
113,779
14,659
57,393
30,278
177,583
107,455
14,307
55,821
29,425
178,796'
110,579r
13,389'
54,828'
28,116
179,858
113,027
12,951
53,880
63 To foreigners
64
Other branches of parent bank
65
Banks
66
Official institutions
67
Nonbank foreigners
68 Other liabilities
245,939
89,529
76,814
19,520
60,076
21,185
253,775
95,146
77,809
17,835
62,985
18,759
304,803
124,601
87,274
19,564
73,364
21,496
270,923
111,267
72,842
15,183
71,631
21,051
274,015
109,125
72,185
18,867
73,838
22,147
274,898
111,582
70,484
17,323
75,509
21,815
280,859
116,148
71,447
17,911
75,353
22,282
284,629
117,089
72,155
17,933
77,452
24,786
288,316'
121,135'
72,903'
17,795
76,483
24,899
289,594
118,950
74,213
17,559
78,872
26,097
69 Total payable in U.S. dollars
353,712
336,406
361,438
367,090
353,678
356,597
378,460
371,237
374,839'
378,331
70 Negotiable CDs
71 To United States
7?
Parent bank
73
Other banks in United States
74
Nonbanks
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
24,045
173,190
107,150
13,628
52,412
23,696
159,650
94,531
12,413
52,706
25,452
161,449
96,714
11,535
53,200
26,287
173,471
105,534
13,355
54,582
25,970
164,957
99,188
12,781
52,988
25,411
166,109'
102,643'
11,769'
51,697'
24,129
167,217
104,706
11,537
50,974
75 To foreigners
76
Other branches of parent bank
77
Banks
78
Official institutions
79
Nonbank foreigners
80 Other liabilities
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
160,373
84,021
28,493
8,224
39,635
9,482
160,632
82,149
27,231
10,880
40,372
9,700
159,542
83,253
27,060
8,740
40,489
10,154
168,257
88,298
28,949
9,953
41,057
10,445
169,916
89,425
28,445
9,591
42,455
10,394
171,618'
90,123'
29,567'
9,255
42,673
11,701
175,393
90,850
29,686
9,852
45,005
11,592
United Kingdom
148,599
140,917
158,695
156,835
156,529
154,879
154,856
153,146
155,532
153,968
82 Negotiable CDs
83 To United States
84
Parent bank
85
Other banks in United States
86
Nonbanks
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
24,528
36,784
27,849
2,197
6,738
24,253
34,535
24,130
2,568
7,837
25,942
35,393
25,562
1,915
7,916
26,625
32,757
25,098
1,984
5,675
26,157
29,715
20,455
1,551
7,709
25,539
30,867'
20,329
1,720
8,818'
24,396
30,013
21,669
1,648
6,696
87 To foreigners
88
Other branches of parent bank
89
Banks
90
Official institutions
91
Nonbank foreigners
92 Other liabilities
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
86,026
26,812
30,609
7,873
20,732
9,497
87,519
26,815
29,329
10,010
21,365
10,222
83,774
24,553
28,508
8,627
22,086
9,770
85,863
25,781
29,094
9,429
21,559
9,611
87,478
25,800
30,714
8,637
22,327
9,796
88,985'
26,867
30,925'
8,946
22,247
10,141
88,381
24,974
31,066
8,650
23,691
11,178
81 Total, all currencies
112,697
99,707
102,550
105,514
104,462
103,302
105,942
100,514
102,721'
101,742
94 Negotiable CDs
95 To United States
96
Parent bank
97
Other banks in United States
98
Nonbanks
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
22,063
32,588
26,404
1,912
4,272
21,500
30,032
22,069
2,362
5,601
23,419
30,442
22,998
1,600
5,844
24,302
29,578
24,013
1,719
3,846
24,073
25,493
18,524
1,227
5,742
23,568
26,554'
18,545
1,368
6,641'
22,324
25,401
19,188
1,393
4,820
99 To foreigners
100 Other branches of parent bank
101
Banks
102. Official institutions
103
Nonbank foreigners
104 Other liabilities
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
46,690
18,561
13,407
4,348
10,374
4,173
48,421
18,936
13,090
5,897
10,498
4,509
44,934
17,139
13,106
4,116
10,573
4,507
47,071
18,335
12,907
5,467
10,362
4,991
46,230
17,755
13,439
4,365
10,671
4,718
47,371
18,030
13,930
4,796
10,615
5,228
48,491
16,467
13,545
5,579
12,900
5,526
93 Total payable in U.S. dollars
Bahamas and Caymans
105 Total, all currencies
142,055
142,592
160,321
170,639
162,352
165,862
179,185
172,324
173,137
171,780
106 Negotiable CDs
107 To United States
108
Parent bank
109 Other banks in United States
110
Nonbanks
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
953
122,332
62,894
11,494
47,944
1,118
113,562
56,643
9,890
47,029
1,138
114,729
57,684
9,743
47,302
1,073
124,736
62,689
11,464
50,583
1,025
118,164
59,762
11,346
47,056
872
120,175'
64,908
10,223'
45,044
696
117,737
61,642
10,034
46,061
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
45,161
23,686
8,336
1,074
12,065
2,193
45,602
24,973
7,179
1,337
12,113
2,070
47,534
25,988
7,795
1,379
12,372
2,461
50,855
28,010
8,495
1,234
13,116
2,521
50,606
27,655
8,203
1,722
13,026
2,529
48,989'
26,478
8,233'
1,164
13,114
3,101
50,477
27,763
8,322
1,102
13,290
2,870
138,322
138,774
152,927
162,950
154,663
157,890
172,213
166,489
166,954
165,593
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
A59
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1989
1988
Item
1 Total1
2
3
4
5
6
7
8
9
10
11
12
1986
1987
211,834
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable
U.S. securities other than U.S. Treasury securities
By area
Western Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
259,556
May
June p
313,680r
306,304
302,149
r
37,914
91,798
37,341
87,170
Dec.
Jan.
Feb.
Mar.
Apr.
299,716
301,756
304,185
307,497
27,920
75,650
31,838
88,829
31,443
103,722
36,735
98,457
34,641
98,192
33,417
95,478
39,147
%,109
91,368
1,300
15,5%
122,432
300
16,157
149,056
523
14,972
151,075
527
14,962
155,374
531
15,447
161,923
534
16,145
161,081
538
16,805
160,013
542
16,037
160,457
545
16,636
88,629
2,004
8,417
105,868
1,503
5,412
124,620
4,961
8,328
116,098
1,402
4,147
125,097
9,584
10,094
145,548
1,369
7,501
126,040
9,668
9,943
147,316
1,093
7,169
124,806
9,856
8,875
152,236
1,143
6,738
125,352
10,156
7,533
156,317
1,119
6,485
129,254'
9,994
7,198r
158,577'
1,065
7,053
126,164
9,938
6,091
156,016
1,182
6,372
122,799
9,604
5,947
155,317
1,271
6,665
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies.
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.
3.16 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies1
Millions of dollars, end of period
1989
1988
1985
Item
1 Banks' own liabilities
2 Banks' own claims
3 Deposits
4 Other claims
5 Claims of banks' domestic customers
15,368
16,294
8,437
7,857
580
1. Data on claims exclude foreign currencies held by U.S. monetary
authorities.
1986
29,702
26,180
14,129
12,052
2,507
1987
55,438
51,271
18,861
32,410
551
June
Sept.
Dec.
Mar/
56,570
52,914
18,790
34,124
1,004
65,148
63,465
22,594
40,871
335
74,776
68,988
25,115
43,874
364
76,164
72,659
25,645
47,014
376
2. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A60
International Statistics • October 1989
3.17 LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1988
Holder and type of liability
1985
1986
1989
1987
Dec.
Jan.
Feb.
Mar.
Apr/
May
June p
1 AU foreigners
435,726
540,9%
618,874
683,950
660,256
677,624
690,900
683,055
677,983
670,760
2 Banks' own liabilities
3 Demand deposits
4 Time deposits
5 Other.
6 Own foreign offices 4
341,070
21,107
117,278
29,305
173,381
406,485
23,789
130,891
42,705
209,100
470,070
22,383
148,374
51,677
247,635
513,573
21,894
152,194
51,506
287,979
493,030
20,602
145,481
52,322
274,625
507,557
21,733
151,137
51,005
283,682
523,606
22,483
157,978
54,177
288,968
516,319
22,333
157,137
56,549
280,299
512,614
21,928
154,693
58,950
277,042
509,611
21,313
152,884
60,821
274,592
94,656
69,133
134,511
90,398
148,804
101,743
170,377
114,976
167,226
111,141
170,067
110,992
167,295
108,048
166,736
106,827
165,370
102,661
161,149
98,743
17,964
7,558
15,417
28,6%
16,776
30,285
16,367
39,033
16,763
39,321
17,071
42,004
16,957
42,289
17,278
42,631
18,541
44,168
17,078
45,329
11 Nonmonetary international and regional
organizations
5,821
5,807
4,464
3,224
2,704
3,252
3,764
4,141
3,423
3,390
12 Banks' own liabilities
13 Demand deposits
14 Time deposits
15 O t h e r .
2,621
85
2,067
469
3,958
199
2,065
1,693
2,702
124
1,538
1,040
2,527
71
1,183
1,272
1,910
67
565
1,278
2,679
74
1,126
1,479
2,956
88
1,385
1,482
3,354
163
1,502
1,689
2,988
76
1,210
1,702
2,472
32
1,084
1,356
16 Banks' custody liabilities5
17 U.S. Treasury bills and certificates6
18 Other negotiable and readily transferable
instruments
19 Other
3,200
1,736
1,849
259
1,761
265
698
57
795
69
574
59
808
74
786
77
435
95
918
177
1,464
0
1,590
0
1,497
0
641
0
711
15
463
52
734
0
693
16
305
35
731
10
7 Banks' custody liabilities5
8
U.S. Treasury bills and certificates 6
Other negotiable and readily transferable
9
instruments
10 Other
20 Official institutions
9
79,985
103,569
120,667
135,165
135,191
132,833
128,895
135,256
129,712
124,511
21 Banks' own liabilities
22 Demand deposits
23 Time deposits
24 Other 1
20,835
2,077
10,949
7,809
25,427
2,267
10,497
12,663
28,703
1,757
12,843
14,103
27,033
1,915
9,686
15,432
32,013
1,627
13,428
16,959
29,321
1,792
12,661
14,867
27,800
1,605
11,006
15,189
33,067
1,783
12,559
18,725
31,680
1,762
11,086
18,833
31,998
1,820
10,136
20,042
25 Banks' custody liabilities5
26 U.S. Treasury bills and certificates 6
27 Other negotiable and readily transferable
instruments
28 Other
59,150
53,252
78,142
75,650
91,%5
88,829
108,132
103,722
103,178
98,457
103,512
98,192
101,095
95,478
102,189
%,109
98,032
91,798
92,513
87,170
5,824
75
2,347
145
2,990
146
4,130
280
4,598
124
5,076
244
5,466
152
5,875
205
6,049
185
5,080
264
29 Banks10
275,589
351,745
414,280
458,248
435,464
452,338
469,562
453,662
454,476
450,467
30 Banks' own liabilities
31 Unaffiliated foreign banks
32
Demand deposits
33
Time deposits
34
Other.
35 Own foreign offices4
252,723
79,341
10,271
49,510
19,561
173,381
310,166
101,066
10,303
64,232
26,531
209,100
371,665
124,030
10,898
79,717
33,415
247,635
408,576
120,597
9,980
80,303
30,314
287,979
384,974
110,350
9,459
71,838
29,053
274,625
399,833
116,152
9,584
76,679
29,889
283,682
417,332
128,364
11,012
84,112
33,240
288,968
401,754
121,455
10,559
80,826
30,070
280,299
400,140
123,097
11,161
78,872
33,064
277,042
395,013
120,421
9,6%
77,537
33,188
274,592
22,866
9,832
41,579
9,984
42,615
9,134
49,671
7,602
50,489
7,819
52,505
7,491
52,231
7,310
51,908
6,921
54,337
7,114
55,454
7,767
6,040
6,994
5,165
26,431
5,392
28,089
5,666
36,403
5,870
36,800
5,894
39,120
5,254
39,667
5,051
39,936
5,686
41,536
5,314
42,374
36 Banks' custody liabilities5
37 U.S. Treasury bills and certificates 6
38 Other negotiable and readily transferable
instruments
39 Other
40 Other foreigners
74,331
79,875
79,463
87,313
86,896
89,200
88,679
89,997
90,371
92,393
41 Banks' own liabilities
42 Demand deposits
43 Time deposits
44 Other
64,892
8,673
54,752
1,467
66,934
11,019
54,097
1,818
67,000
9,604
54,277
3,119
75,438
9,928
61,022
4,487
74,132
9,450
59,651
5,032
75,724
10,282
60,671
4,771
75,518
9,777
61,475
4,265
78,144
9,828
62,250
6,066
77,805
8,929
63,525
5,351
80,129
9,766
64,127
6,236
45 Banks' custody liabilities5
46 U.S. Treasury bills and certificates6
47 Other negotiable and readily transferable
instruments
48 Other
9,439
4,314
12,941
4,506
12,463
3,515
11,876
3,595
12,764
4,797
13,476
5,250
13,161
5,188
11,853
3,720
12,566
3,653
12,264
3,629
4,636
489
6,315
2,120
6,898
2,050
5,929
2,351
5,584
2,382
5,638
2,589
5,503
2,471
5,658
2,474
6,501
2,412
5,954
2,681
49 MEMO: Negotiable time certificates of deposit in
custody for foreigners
9,845
7,4%
7,314
6,366
6,286
6,064
5,809
5,554
5,625
5,339
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. 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.
5. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
6. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
8. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks. Data exclude "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for
International Settlements.
10. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
Data
3.17—Continued
1988
Area and country
1985
1986
1989
1987
Dec.
Jan.
Feb.
Mar.
Apr.
May
June p
1 Total
435,726
540,9%
618,874
683,950
660,256
677,624
690,900
683,055'
677,983
670,760
2 Foreign countries
429,905
535,189
614,411
680,726
657,551
674,371
687,136
678,914'
674,560
667,370
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
234,641
920
9,347
760
377
29,835
7,022
689
12,073
5,014
1,362
801
2,621
1,379
33,766
703
116,852
710
9,798
32
582
235,979
1,155
10,028
2,180
284
24,762
6,777
672
14,602
5,316
1,559
903
5,494
1,274
34,183
1,012
115,926
529
8,598
138
589
223,869
1,129
8,991
1,833
375
22,264
5,794
919
11,312
5,248
1,502
870
5,750
1,299
32,519
939
110,878
489
10,906
155
697
228,393
1,777
10,508
2,082
560
24,260
5,263
933
11,073
6,011
1,367
813
5,174
1,319
31,659
1,246
113,419
434
9,929
108
458
231,905
1,436
9,316
1,639
527
26,824
5,514
760
13,480
5,600
1,547
831
4,902
1,416
29,815
1,023
115,325
440
10,730
102
677
230,794'
1,608
10,115'
1,615
397
25,634'
6,968
927
12,964
5,611'
1,783
824
5,795'
1,730
29,249'
1,051'
111,492'
465
11,519^
91'
958
227,937
1,387
8,819
1,642
432
24,199
7,791
1,172
12,532
5,872
1,479
985
5,415
1,556
28,653
785
112,456
478
11,650
193
440
225,322
1,531
8,584
1,177
450
23,799
9,183
889
13,951
4,877
1,485
1,089
5,077
1,483
29,264
926
106,755
558
13,477
164
602
3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15
Spain
16
Sweden
17
Switzerland
18 Turkey
19 United Kingdom
20
Yugoslavia
21
Other Western Europe 1
22
U.S.S.R
23
Other Eastern Europe 2
24 Canada
17,427
26,345
30,095
21,040
19,277
20,732
25,694
23,024'
18,332
17,492
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
220,372
5,006
74,767
2,344
4,005
81,494
2,210
4,204
12
1,082
1,082
160
14,480
4,975
7,414
1,275
1,582
9,048
5,234
266,295
7,804
86,606
2,621
5,304
109,335
2,936
4,374
10
1,379
1,195
269
15,106
6,420
4,353
1,671
1,898
9,146
5,868
257,809
7,629
82,009
2,381
4,675
107,026
2,%9
4,317
10
1,365
1,236
180
15,273
5,763
4,284
1,716
2,011
9,159
5,806
263,344
6,836
83,455
2,545
4,829
110,989
2,975
4,470
10
1,403
1,259
170
14,867
5,641
4,497
1,728
2,142
9,532
5,997
264,598
6,415
85,586
2,513
4,925
110,809
3,063
4,166
10
1,422
1,271
223
14,625
5,666
4,388
1,707
2,243
9,489
6,076
266,440'
6,280
86,053
2,377'
5,554
111,968'
2,933
4,173'
10
1,376
1,272
222
14,278'
5,768'
4,355'
1,763
2,263'
9,565'
6,228'
270,562
6,487
90,951
2,451
5,302
111,451
2,988
4,033
15
1,285
1,232
188
13,988
6,071
4,454
1,724
2,344
9,433
6,164
265,940
6,316
82,054
2,397
5,025
116,365
2,705
4,091
10
1,307
1,219
400
13,963
6,311
4,255
1,750
2,429
9,421
5,921
72,280
108,831
121,288
147,246
146,594
151,237
154,900
148,724'
147,357
148,320
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
10,180
582
1,404
1,292
54,322
1,637
1,085
1,345
13,988
12,788
1,892
26,058
11,727
696
1,189
1,471
73,989
2,541
1,163
1,236
12,060
13,225
1,566
26,178
10,891
689
1,189
1,217
75,337
2,454
976
1,373
12,426
12,298
1,602
26,001
11,387
838
1,198
1,366
77,407
2,502
1,014
1,615
12,372
13,935
1,588
26,143
10,761
900
1,611
1,156
83,020
2,827
977
1,151
12,029
12,737
1,809
28,265
11,422
1,787
1,168
973
72,715
3,023
973'
1,165
12,098
13,326'
1,652
26,923
12,207
1,009
1,319
1,103
70,451
3,194
991
1,162
13,476
13,872
1,421
27,045
12,150
811
1,248
1,087
70,833
3,142
984
1,274
13,797
14,528
57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
62 Oil-exporting countries 4
63
Other
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
3,991
913
68
437
85
1,017
1,472
3,690
771
90
250
74
1,024
1,480
3,793
819
69
212
75
1,121
1,4%
3,717
756
60
226
77
1,062
1,536
3,665
721
82
256
73
1,017
1,516
3,807
702
68
324
92
879
1,742
3,929
748
67
188
98
1,084
1,744
64 Other countries
65
Australia
66
All other
3,347
2,779
568
5,118
4,1%
922
4,070
3,327
744
6,175
5,303
872
6,312
5,485
827
6,872
6,037
836
6,322
5,490
832
6,267
5,471
7%
6,565
5,702
863
6,366
5,279
1,086
67 Nonmonetary international and regional
organizations
68
International
69
Latin American regional
70 Other regional
5,821
4,806
894
121
5,807
4,620
1,033
154
4,464
2,830
1,272
362
3,224
2,503
589
133
2,704
1,725
747
232
3,252
2,106
732
414
3,764
2,546
995
223
4,141'
2,682
981'
477'
3,423
2,456
564
403
3,390
2,628
613
148
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35 Guatemala
36 Jamaica
37
Mexico
38
Netherlands Antilles
39 Panama
40
Peru
41
Uruguay
42
Venezuela
43 Other
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
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."
A61
A62
International Statistics • October 1989
3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1988
Area and country
1985
1986
1989
1987
Dec.
Jan.
Feb.
Mar.
Apr.
May
June"
1 Total
401,608
444,745
459,877
491,083
481,711
493,175
503,875
494,869'
490,976
488,541
2 Foreign countries
400,577
441,724
456,472
489,012
479,132
491,270
501,836
493,173'
487,280
485,527
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
102,348
793
9,397
717
1,010
13,548
2,039
462
7,460
2,619
934
477
1,853
2,254
2,718
1,680
50,823
1,700
619
389
852
117,053
485
8,517
480
1,065
13,243
2,327
433
7,946
2,547
455
374
1,823
1,977
3,895
1,233
65,702
1,390
1,152
1,255
754
107,477
544
8,301
410
911
13,315
2,398
448
5,526
2,514
472
339
2,182
2,619
3,510
1,152
58,065
1,371
1,275
1,286
838
113,814
646
7,871
790
1,114
14,920
1,695
517
5,581
2,475
601
331
2,153
2,622
3,780
1,108
62,469
1,348
1,560
1,389
845
116,279
809
7,834
548
909
15,729
3,110
586
5,866
2,808
432
367
2,133
2,613
3,822
1,039
62,877
1,455
1,262
1,298
780
111,156'"
805
8,102
770
1,214
16,510'
3,529'
561
4,803'
2,735'
551
281
2,624'
2,164
4,540'
1,005
56,057'
1,369
1,415'
1,346
775
112,990
764
8,435
470
1,280
16,078
3,959
595
5,627
3,183
567
371
2,209
2,158
3,975
910
58,105
1,366
966
1,155
820
112,162
785
7,754
774
1,199
15,561
3,689
574
6,763
1,988
667
328
2,190
1,945
5,482
886
56,931
1,359
1,231
1,212
844
3 Europe
4 Austria
5 Belgium-Luxembourg
6 Denmark
7 Finland
8 France
9
Germany
10 Greece
11 Italy
12 Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia
21 Other Western Europe 2
22 U.S.S.R
23 Other Eastern Europe
24 Canada
16,482
21,006
25,368
18,889
16,733
18,079
19,042
19,150'
16,072
16,076
25 Latin America and Caribbean
26 Argentina
27 Bahamas
28 Bermuda
29 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala4
36 Jamaica 4
37 Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41 Uruguay
42 Venezuela
43 Other Latin America and Caribbean
202,674
11,462
58,258
499
25,283
38,881
6,603
3,249
208,825
12,091
59,342
418
25,716
46,284
6,558
2,821
214,789
11,996
64,587
471
25,897
50,042
6,308
2,740
214,074
11,826
67,006
483
25,735
55,640
5,217
2,944
210,439
11,880
68,836
475
25,835
50,542
5,156
2,867
210,538
11,802
69,607
535
25,369
50,542
5,141
2,813
220,767
11,616
72,804
707
25,615
57,570
5,335
2,746
219,894'
11,516
75,665'
361
25,944'
54,382'
5,224
2,661
218,143
11,381
70,552
449
25,785
58,142
5,266
2,600
218,259
10,840
66,453
473
25,672
63,858
4,893
2,581
2,390
194
224
31,799
1,340
6,645
1,947
960
10,871
2,067
2,439
140
198
30,698
1,041
5,436
1,661
940
11,108
1,936
2,286
144
188
29,532
980
4,744
1,329
963
10,843
1,738
2,075
198
212
24,636
1,312
2,535
1,013
910
10,733
1,5%
2,048
185
214
24,445
1,222
2,535
1,011
880
10,748
1,560
2,026
188
202
24,387
1,150
2,535
952
856
10,957
1,475
2,032
199
251
24,187
1,005
2,460
947
875
10,761
1,658
2,025'
210
266
24,077'
1,009'
2,425'
947
876
10,635
1,668
1,944
207
265
24,036
1,000
2,475
938
832
10,600
1,670
1,894
200
286
23,645
1,220
2,449
862
8%
10,398
1,637
44 Asia
China
Mainland
46
Taiwan
47 Hong Kong
48 India
49 Indonesia
50 Israel
51 Japan
52 Korea
53 Philippines
54 Thailand
55 Middle East oil-exporting countries
56 Other Asia
66,212
96,126
106,096
130,867
135,839
140,041
137,055
134,477'
131,633
130,279
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
4,592
8,218
510
580
1,363
68,658
5,148
2,071
496
4,858
8,635
762
4,184
10,136
560
674
1,137
90,161
5,219
1,876
850
6,182
9,126
830
3,902
8,727
645
669
1,0%
99,056
4,%1
1,847
887
5,371
7,847
881
3,960
8,004
628
735
1,043
104,831
4,891
1,900
931
4,681
7,556
993
4,179
7,884
563
649
1,050
101,471
5,183
1,913
986
5,409
6,776
816
3,952
8,293'
425
726
1,052'
97,703'
5,198
1,839
1,018'
5,237'
8,217'
952
3,715
8,855
411
682
1,045
93,447
5,338
1,810
975
5,522
8,881
890
4,033
8,527
532
677
1,020
91,032
5,386
1,763
1,058
6,602
8,759
57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries
63 Other
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
5,718
507
511
1,681
17
1,523
1,479
5,924
495
524
1,688
16
1,534
1,666
6,072
567
532
1,718
16
1,522
1,717
5,973
543
541
1,702
17
1,481
1,690
6,087'
541
532
1,742
19
1,474
1,778
6,084
541
538
1,753
19
1,504
1,729
6,074
534
531
1,746
17
1,503
1,743
64 Other countries
65 Australia
66 All other
3,390
2,413
978
3,294
1,949
1,345
3,129
2,100
1,029
2,410
1,517
894
2,720
1,711
1,009
2,726
1,686
1,040
2,720
1,685
1,034
2,409'
1,505
905'
2,359
1,167
1,192
2,677
1,307
1,371
67 Nonmonetary international and regional
organizations
1,030
3,021
3,404
2,071
2,579
1,905
2,039
1,6%'
3,695
3,014
Q
o
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
3. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
J
4. Included in "Other Latin America and Caribbean" through March 1978.
5. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
6. Comprises Algeria, Gabon, Libya, and Nigeria.
7. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
Nonbank-Reported
Data
3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1989
1988
Type of claim
1985
1986
1987
Dec.
Jan.
Feb.
481,711
63,974
256,848
119,040
58,389
60,650
41,850
493,175
63,245
262,810
124,495
62,616
61,879
42,626
Mar.
1 Total
430,489
478,650
497,635
538,607
2 Banks' own claims on foreigners
3 Foreign public borrowers
4 Own foreign offices
5
Unaffiliated foreign banks
6
Deposits
Other
7
8
All other foreigners
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
459,877
64,605
224,727
127,609
60,687
66,922
42,936
491,083
62,438
257,345
129,413
65,819
63,594
41,886
28,881
3,335
33,905
4,413
37,758
3,692
47,524
8,289
53,178
12,084
19,332
24,044
26,696
25,700
24,960
6,214
5,448
7,370
13,535
16,134
28,487
25,706
23,107
19,556
17,161
38,102
43,984
40,587
43,360
9 Claims of banks' domestic customers 3 ...
11
May
494,869
62,768
259,664
131,228
69,445
61,783
41,209
490,976
63,701
257,470
130,536
67,569
62,967
39,269
488,541
62,041
258,600
126,510
66,769
59,741
41,390
47,918
49,587
n.a.
557,054
503,875
62,696
271,915
130,075
66,553
63,522
39,189
June''
Apr.
488,541
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
46,294
47,775
47,237r
parent foreign bank.
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.
Reporting banks include all kinds of depository institutions besides commercial
banks, as well as some brokers and dealers.
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
3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1989
1988
Maturity; by borrower and area
1985
1986
1987
June
Sept.
Dec.
Mar/
1 Total
227,903
232,295
235,130
228,219
230,401
233,152
231,325
By borrower
2 Maturity of 1 year or less
3 Foreign public borrowers
4 All other foreigners
5 Maturity over 1 y e a r
6 Foreign public borrowers
7 All other foreigners
160,824
26,302
134,522
67,078
34,512
32,567
160,555
24,842
135,714
71,740
39,103
32,637
163,997
25,889
138,108
71,133
38,625
32,507
163,762
27,551
136,211
64,456
35,792
28,664
167,956
29,389
138,567
62,444
35,156
27,288
172,571
26,581
145,990
60,581
35,067
25,514
168,312
24,134
144,178
63,013
37,958
25,056
56,585
6,401
63,328
27,966
3,753
2,791
61,784
5,895
56,271
29,457
2,882
4,267
59,027
5,680
56,535
35,919
2,833
4,003
55,971
6,664
56,219
38,902
2,914
3,092
54,283
6,410
55,552
42,375
3,120
6,216
56,037
6,283
57,867
46,160
3,336
2,888
57,940
5,115
53,184
45,632
3,610
2,831
7,634
1,805
50,674
4,502
1,538
926
6,737
1,925
56,719
4,043
1,539
777
6,6%
2,661
53,817
3,830
1,747
2,381
5,315
2,333
49,755
3,622
2,433
998
5,306
2,051
48,274
3,933
2,257
625
4,682
1,922
47,572
3,603
2,301
501
4,471
2,303
49,778
3,689
2,293
480
8
9
10
11
1?
13
By area
Maturity of 1 year or less
Europe
Canada
Latin America and Caribbean
Africa
All other 3
Maturity of over 1 y e a r
14 Europe
15 Canada
16 Latin America and Caribbean
17
18 Africa
19 All other 3
1. Reporting banks include all kinds of depository institutions besides commercial banks, as well as some brokers and dealers.
2. Remaining time to maturity,
3. Includes nonmonetary international and regional organizations.
A63
A64
International Statistics • October 1989
3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1-2
Billions of dollars, end of period
1987
Area or country
1985
1988
1989
1986
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
385.4
385.1
395.4
384.6
387.7
381.4
yii.y
SSl^
355. r
350.0''
352. r
146.0
9.2
12.1
10.5
9.6
3.7
2.7
4.4
63.0
6.8
23.9
156.6
8.3
13.7
11.6
9.0
4.6
2.4
5.8
71.0
5.3
24.9
162.7
9.1
13.3
12.7
8.7
4.4
3.0
5.8
73.7
5.3
26.9
158.1
8.3
12.5
11.2
7.5
7.3
2.4
5.7
72.0
4.7
26.3
155.2
8.2
13.7
10.5
6.6
4.8
2.6
5.4
72.1
4.7
26.5
160.0
10.1
13.8
12.6
7.3
4.1
2.1
5.6
69.1
5.5
29.8
157.7r
9.4 r
11.8r
11.8
7.4
3.3
2.2'
5.1
72. l r
4.9
29.9
151.r
9.2 r
ll.C
10.6
6.2 r
3.3
1.9
5.6
70.6r
5.4
27.9'
149.9r
9.6r
10.4r
8.8r
5.4 r
3.0
2.0
5.2
68.(r
5.2
32.4r
154.7''
9.0
10.7
9.9
6.6'
2.8
2.0
5.7
66.7
5.5
35.9
150. l
8.6
11.2
10. r
5.1'
2.9
2.4
5.2
66.4r
4.6
33.6
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
29.9
1.5
2.3
1.6
2.6
2.9
1.2
5.8
1.8
2.0
3.2
5.0
25.7
1.7
1.7
1.4
2.3
2.4
.8
5.8
1.8
1.4
3.0
3.5
25.7
1.9
1.7
1.4
2.1
2.2
.9
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
2.4
26.3r
1.6
1.4
i.r
2.3
2.0
.4
9.0
1.6
2.0 r
2.8
2.1
23.8r
1.6
1.0
1.2
2.2
2.0
.4
7.2
1.5
1.7r
2.8
2.2
22.8r
1.6
1.1
1.3
2.1
2.0
.4
6.3
1.3
1.9
2.7
1.8
20.9
1.6
l.C
1.2
1.9
1.8
.5
6.2
1.3
1.3
2.4
1.8
20.8
1.4
1.0
1.0
2.2
1.5
.5
6.3
1.0
1.4
2.2
2.4
25 OPEC countries3
26 Ecuador
27 Venezuela
28 Indonesia
29 Middle East countries
30 African countries
21.3
2.1
8.9
3.0
5.3
2.0
19.3
2.2
8.6
2.5
4.3
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
19.0
2.1
8.3
2.0
5.0
1.7
17.1
1.9
8.1
1.9
3.6
1.7
17.4r
1.9
8.0
1.9
3.8r
1.7
16.7''
1.8
8.0
1.9
3.4r
1.7
17.8r
1.8
7.9
1.9
4.5r
1.7
16.5
1.7
7.9
1.8
3.3
1.7
16.3
1 7
8.0
1 8
3.2
1.6
104.2
99.1
100.7
100.4
97.7
97.6
94.4
91.4r
87. l r
85.3
85.6
8.8
25.4
6.9
2.6
23.9
1.8
3.4
9.5
25.2
7.1
2.1
23.8
1.4
3.1
9.5
26.2
7.3
2.0
24.1
1.4
3.0
9.5
25.1
7.2
1.9
25.3
1.3
2.9
9.3
25.1
7.0
1.9
24.8
1.2
2.8
9.4
24.7
6.9
2.0
23.7
1.1
2.7
9.5
23.9
6.6
1.9
22.5
1.1
2.8
9.4
23.7
6.4
2.1
21.1
.9
2.6
9.2
22.4
6.2
2.1
20.6
.8
2.5
8.9
22.5
5.5
2.0
19.0
.8
2.6
8.4
22.7
5.6
1.9
18.2
7
2.8
1 Total
2 G-10 countries and Switzerland
3 Belgium-Luxembourg
4 France
5 Germany
6 Italy
7 Netherlands
Sweden
8
9
Switzerland
10 United Kingdom
11 Canada
12 Japan
31 Non-OPEC developing countries
r
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.5
4.5
1.2
1.6
9.2
2.4
5.7
1.4
1.0
.4
4.9
1.2
1.5
6.6
2.1
5.4
.9
.7
.9
5.5
1.8
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
6.0
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
.3
4.9
2.3
1.0
5.9
1.5
4.9
1.1
.8
.2
3.2
2.0
1.0
6.0
1.6
4.7
1.2
.8
.3
3.7r
2.1
1.2
6.1
1.6
4.5
1.1
.9
.5
4.9
2.6
.9
6.2
1.7
4.3
1.0
.8
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.0
.9
.1
1.9
.7
.9
.1
1.6
.6
.9
.1
1.4
.6
.9
.1
1.3
.6
.8
.1
1.3
.5
.9
.0
1.3
.5
.9
.1
1.2
.6
.9
.1
1.2
.5
.8
.0
1.2
.4
.9
.0
1.1
.5
9
.0
1.1
52 Eastern Europe
53 U.S.S.R
54 Yugoslavia
55 Other
4.1
.1
2.2
1.8
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
1.0
2.9
.3
1.7
.9
3.1
.4
1.7
1.0
3.0
.4
1.7
1.0
3.6r
7
1.7r
i.r
3.4r
7
1.7
i.r
56 Offshore banking centers
57 Bahamas
58 Bermuda
59 Cayman Islands and other British West Indies
60 Netherlands Antilles
61 Panama
62 Lebanon
63 Hong Kong
64
Singapore
65 Others 6
62.9
21.2
.7
11.6
2.2
6.0
.1
11.4
9.8
.0
61.3
22.0
.7
12.4
1.8
4.0
.1
11.1
9.2
.0
63.1
23.9
.8
12.2
1.7
4.3
.1
11.4
8.6
.0
60.7
19.9
.6
14.0
1.3
3.9
.1
12.5
8.3
.0
64.3
25.5
.6
12.8
1.2
3.7
.1
12.3
8.1
.0
54.3
17.1
.6
13.3
1.2
3.7
.1
11.2
7.0
.0
51.7r
15.7r
.8
11.8
1.3
3.3
I
11.3
7.4
.0
43.0
8.6
1.0
10.5
1.2
3.0
.1
11.7
6.8
.0
41.4'
12.6r
.9
12.3
1.2
2.7
1
10.6
7.0
.0
45.8r
10.8r
.8
14.0
1.0
2.6
1
10.2
6.2
.0
50.9
15.6
1 0
14.4
.9
2.3]
66 Miscellaneous and unallocated7
16.9
19.8
20.1
18.1
22.3
23.2
21.5
22.3
26.7r
22.6'
24.5r
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
9^9
6.7
.0
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 New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
Data
A65
3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States1
Millions of dollars, end of period
1987
Type, and area or country
1984
1985
1989
1988
1986
Dec.
Mar.
June
Sept.
Dec.
Mar.
1 Total
29,357
27,825
25,587
28,303
29,792
30,283
32,244
33,013
36,492
2 Payable in dollars
3 Payable in foreign currencies
26,389
2,968
24,2%
3,529
21,749
3,838
22,785
5,518
24,339
5,453
25,131
5,152
27,215
5,029
27,817
5,1%
31,052
5,441
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
12,133
9,609
2,524
12,424
8,643
3,781
14,139
10,472
3,667
14,070
10,560
3,510
14,953
11,558
3,395
14,753
11,266
3,487
16,862
13,124
3,739
14,849
7,005
7,843
13,836
1,013
14,225
6,685
7,540
13,039
1,186
13,454
6,450
7,004
12,140
1,314
15,878
7,305
8,573
14,142
1,737
15,653
6,454
9,200
13,867
1,786
16,213
6,768
9,446
14,571
1,642
17,291
6,479
10,812
15,657
1,635
18,260
6,247
12,014
16,551
1,709
19,630
6,760
12,870
17,928
1,702
6,728
471
995
489
590
569
3,297
7,700
349
857
376
861
610
4,305
7,917
270
661
368
542
646
5,140
8,320
213
364
551
884
558
5,557
9,377
251
390
553
1,008
691
6,301
9,215
279
353
503
880
638
6,390
10,353
336
354
488
1,014
734
7,257
9,559
287
249
548
897
1,163
6,268
11,855
317
231
372
951
889
8,901
7 Commercial liabilities
8 Trade payables
9
Advance receipts and other liabilities . .
10 Payable in dollars
11 Payable in foreign currencies
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
19
Canada
863
839
399
360
394
403
421
638
603
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
1,944
614
4
32
1,146
22
0
1,189
318
0
25
778
13
0
1,452
289
0
0
1,099
15
2
1,448
250
0
0
1,154
26
0
1,057
238
0
0
812
2
0
1,239
184
0
0
645
1
0
677
189
0
0
471
15
0
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
2,452
2,042
8
2,836
2,375
11
2,928
2,331
11
3,116
2,462
4
3,313
2,563
3
3,722
2,950
1
30
Africa
14
0
12
0
1
1
4
1
5
3
2
1
3
1
1
0
5
3
41
50
67
100
75
74
3
2
2
4,001
48
438
622
245
257
1,095
4,074
62
453
607
364
379
976
4,446
101
352
715
424
385
1,341
5,505
132
426
908
423
559
1,588
5,619
154
414
810
457
527
1,722
5,722
147
408
791
508
482
1,771
6,687
205
438
1,185
647
486
2,105
7,274
169
455
1,684
590
410
2,032
7,692
133
569
1,344
667
451
2,409
31
32
33
34
35
36
37
38
39
40
Oil-exporting countries
All other 4
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
1,975
1,449
1,405
1,301
1,392
1,167
1,109
1,207
1,147
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
864
18
168
46
19
189
162
980
19
325
59
14
164
122
1,035
61
272
54
28
233
140
997
19
222
58
30
177
204
999
45
184
91
31
179
176
1,186
35
376
100
29
197
179
48
49
50
Asia
Japan
Middle East oil-exporting countries •
5,285
1,256
2,372
6,046
1,799
2,829
5,080
2,042
1,679
6,565
2,578
1,964
5,883
2,508
1,062
6,279
2,659
1,320
6,627
2,763
1,298
6,899
3,087
1,386
7,430
3,046
1,526
51
52
Africa
Oil-exporting countries
588
233
587
238
619
197
574
135
575
139
626
115
465
1065
564
201
692
271
53
All other 4
1,128
982
980
1,068
1,204
1,383
1,407
1,317
1,482
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.
A66
International Statistics • October 1989
3.23 CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1987
Type, and area or country
1984
1985
1988
1989
1986
Dec.
Mar.
June
Sept.
Dec.
Mar.
1
Total
29,901
28,876
36,265
30,942
31,067
37,633
37,415
31,882
31,175
2
3
Payable in dollars
Payable in foreign currencies
27,304
2,597
26,574
2,302
33,867
2,399
28,469
2,473
28,993
2,074
35,593
2,040
34,984
2,431
29,622
2,260
28,978
2,198
4
5
6
7
8
9
10
By type
Financial claims
Deposits
Payable in dollars
Payable in foreign currencies
Other financial claims
Payable in dollars
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
26,273
19,916
19,331
585
6,357
5,005
1,352
20,341
14,953
13,813
1,140
5,388
4,574
814
20,304
12,693
12,105
588
7,612
6,491
1,120
26,265
19,551
18,822
730
6,714
5,819
895
26,327
19,127
18,180
947
7,200
6,257
942
20,233
14,556
13,525
1,031
5,677
4,953
724
19,472
14,736
13,886
850
4,737
3,8%
841
11
12
13
Commercial claims
Trade receivables
Advance payments and other claims
10,646
9,177
1,470
9,986
8,696
1,290
9,992
8,783
1,209
10,600
9,535
1,065
10,763
9,650
1,113
11,367
10,332
1,036
11,088
10,103
985
11,649
10,574
1,075
11,703
10,447
1,256
9,912
735
9,333
652
9,530
462
10,081
519
10,397
366
10,952
415
10,546
542
11,144
505
11,196
507
5,762
15
126
224
66
66
4,864
6,929
10
184
223
161
74
6,007
10,744
41
138
116
151
185
9,855
9,523
7
332
103
351
65
8,455
9,812
15
308
95
335
54
8,790
11,514
16
181
169
336
105
10,428
10,534
49
278
123
359
84
9,311
9,867
10
224
138
345
215
8,578
9,037
7
230
173
384
173
7,758
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
4,808
2,844
2,669
2,913
3,612
2,338
2,176
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
9,291
2,628
6
86
6,078
174
21
6,994
1,994
7
63
4,414
172
19
6,451
2,329
43
86
3,461
154
35
10,842
4,176
87
46
6,030
147
28
11,130
4,074
188
44
6,358
133
27
6,951
1,781
19
47
4,617
151
22
7,188
2,168
25
49
4,524
117
26
31
32
33
Asia
Japan
Middle East oil-exporting countries
961
353
13
731
475
4
1,317
999
7
883
605
10
1,2%
1,133
7
878
646
6
930
737
6
801
603
6
929
685
8
34
35
Africa
Oil-exporting countries 3
210
85
103
29
85
28
65
7
53
7
60
10
%
9
107
10
91
9
All other 4
117
21
28
33
24
58
26
169
51
3,801
165
440
374
335
271
1,063
3,533
175
426
346
284
284
898
3,725
133
431
444
164
217
999
4,180
178
650
562
133
185
1,073
4,170
193
552
637
150
173
1,059
4,694
158
684
773
172
262
1,095
4,286
171
542
613
145
183
1,172
4,835
174
665
590
207
317
1,181
4,793
198
750
626
156
242
1,208
36
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
1,021
1,023
934
936
1,166
937
977
970
1,0%
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
1,930
19
170
226
26
368
283
1,930
14
171
209
24
374
274
2,067
13
174
232
25
411
304
2,104
12
161
234
22
463
266
2,143
31
156
2%
20
457
226
2,031
32
175
275
21
476
210
52
53
54
Asia
Japan
Middle East oil-exporting countries
3,073
1,191
668
2,982
1,016
638
2,755
881
563
2,915
1,158
450
2,853
1,107
408
2,994
1,168
446
3,026
%2
437
2,944
928
441
3,110
1,054
421
55
56
Africa
Oil-exporting countries
470
134
437
130
500
139
401
144
419
126
425
136
425
137
434
122
386
94
57
All other 4
229
257
222
238
225
250
270
324
286
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
A67
3.24 FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
Transactions, and area or country
1987
1989
1988
Jan.June
Dec.
1989
1988
Jan.
Feb.
Mar.
Apr.
May
June
p
U.S. corporate securities
STOCKS
249,122
232,849
181,048
183,039
102,318
97,426
11,224
12,467
11,923
11,789
18,384
18,495
15,811
15,442
14,079
14,235
17,902
16,838
24,220
20,627
3 Net purchases, or sales ( - )
16,272
-1,991
4,892
-1,243
134
-111
370
-157
1,063
3,593
4 Foreign countries
16,321
-1,816
5,118
-1,198
167
-81
507
-150
1,065
3,611
1,932
905
-70
892
-1,123
631
1,048
1,318
-1,360
12,896
11,365
123
365
-3,353
-281
218
-535
-2,242
-954
1,087
1,249
-2,473
1,365
1,922
188
121
176
297
-206
21
-1,982
1,879
116
2,470
1,924
180
361
63
190
-771
-64
-53
-1
-273
-424
274
-21
-132
-567
-407
-1
19
-99
38
30
128
-345
74
320
599
-100
-603
-563
29
21
-126
159
59
-64
-1,181
800
-361
575
265
-544
-487
4
106
71
70
59
4
91
-107
130
636
220
-536
-458
5
-19
182
168
16r
-125
-141
288
-66
104
-345
-28
-16
10
-7
-286
-123
-215
-69
-292
495
-75
389
206
784
763
-1
50
434
-15
-155
147
-114
329
168
167
1,679
1,108
1,122
16
40
-48
-176
-227
-45
-33
-30
-137
-6
-2
-18
1 Foreign purchases
2 Foreign sales
5
6
7
8
9
10
11
12
13
14
15
16
17
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
18 Nonmonetary international and
regional organizations
BONDS 2
105,856
86,362
55,083
8,423
6,137
9,610
10,423
9,736
8,329
10,848
20 Foreign sales
78,312
58,301
39,580
4,441
4,757
4,736
7,025
5,270'
8,776
9,016
21 Net purchases, or sales ( - )
27,544
28,062
15,503
3,982
1,380
4,874
3,398
4,466'
-447
1,832
22 Foreign countries
26,804
28,604
15,230
3,978
1,360
4,908
3,358
4,465'
-570
1,709
23
24
25
26
27
28
29
30
31
32
33
34
35
21,989
194
33
269
1,587
19,770
1,296
2,857
-1,314
2,021
1,622
16
-61
17,338
143
1,344
1,514
513
13,088
711
1,930
-178
8,900
7,686
-8
-89
10,527
257
5
525
131
9,258
509
1,813
-589
2,862
1,504
15
93
2,560
-130
75
17
273
2,468
178
240
159
840
746
0
2
499
107
15
30
130
149
180
229
-128
552
392
3
24
2,055
41
38
-21
131
1,751
129
651
160
1,893
1,567
2
18
2,794
-16
148
69
4
2,578
213
301
87
-50
-285
5
8
3,102'
27
135
51
90
2,252'
115
219
3
990
608
4
33
-55
93
-170
9
-114
665
59
136
-100
-615
-722
0
5
2,133
6
-162
386
-110
1,862
-188
277
-611
93
-57
1
4
740
-542
273
3
20
-34
41
1
122
123
19 Foreign purchases
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Japan
Africa
Other countries
36 Nonmonetary international and
regional organizations
Foreign securities
1,081
-1,901
-6,091
-1,102
-891
-629
-147
-962'
-1,332
-2,130
95,458
94,377
75,203
77,104
47,980
54,072
7,472
8,573
6,856
7,748
8,070
8,698
9,477
9,624
6,724'
7,687'
7,795
9,127
9,058
11,188
40 Bonds, net purchases, or sales ( - )
41 Foreign purchases
42 Foreign sales
-7,946
199,089
207,035
-9,869
217,648
227,517
-3,201
111,325
114,526
-1,720
20,510
22,230
-247
14,835
15,083
-484
18,711
19,195
-653
23,395
24,047
-176'
15,951'
16,127
-111
17,519
17,630
1,530
20,914
22,444
43 Net purchases, or sales (—), of stocks and bonds . . . .
-6,865
-11,770
-9,292
-2,822
-1,139
-1,112
-800
-I.WS'
-1,443
-3,660
44 Foreign countries
-6,757
-12,251
-9,748
-2,916
-1,115
-1,190
-992
-1,331'
-1,660
-3,460
-12,101
-4,072
828
9,299
89
-800
-10,205
-3,799
1,386
987
-54
-567
-9,449
-2,542
436
1,889
10
-93
-1,543
-658
-32
-189
-33
-461
-80
-378
68
-872
6
139
-797
-530
79
-34
-9
100
-1,399
-584
161
885
-16
-40
-1,734
191
195
7C
11
-65
-1,542
-558
-94
701
14
-181
-3,897
-683
27
1,138
3
-47
-108
481
456
94
-23
78
192
193
216
-200
37 Stocks, net purchases, or sales ( - )
38
39
45
46
47
48
49
50
Foreign purchases
Foreign sales
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
51 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.
A68
International Statistics • October 1989
3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
Country or area
1989
1988
Jan.June
Dec.
1989
1988
1987
Jan.
Feb.
Mar.
Apr.
May
June p
Transactions, net purchases or sales ( - ) during period
1 Estimated total2
25,587
48,884
21,619
384
2,828
8,783
8,640
29
7,012
-5,672
2 Foreign countries 2
30,889
48,187
20,266
2,384
2,040
9,907
8,297
291
5,494
-5,762
3 Europe 2
4 Belgium-Luxembourg
5 Germany 2
Netherlands
6
7
Sweden
8
Switzerland2
United Kingdom
9
10 Other Western Europe
11 Eastern Europe
12 Canada
23,716
653
13,330
-913
210
1,917
3,975
4,563
-19
4,526
14,343
923
-5,268
-356
-323
-1,074
9,674
10,776
-10
3,761
9,384
126
-1,252
-1,328
650
3,155
4,803
3,246
-16
-236
330
-90
-374
-114
118
-18
-232
1,054
-15
788
2,141
9
938
268
-115
214
-348
1,175
0
54
3,775
127
-31
135
297
438
1,533
1,277
0
17
2,143
-23
-181
242
-508
1,768
1,207
-363
0
-55
-1,814
-87
-693
-643
398
440
-1,298
74
-5
114
4,472
88
-179
-638
-69
-83
3,847
1,511
-5
157
-1,333
13
-1,106
-692
647
378
-137
-428
-6
-523
13
14
15
16
17
18
19
20
-2,192
150
-1,142
-1,200
4,488
868
-56
407
703
-109
1,120
-308
27,606
21,752
-13
1,786
863
-107
-108
1,078
10,120
943
107
28
-104
0
140
-244
1,021
-157
-7
358
-104
-37
-163
96
626
116
-1
-676
525
247
276
5,955
2,503
15
-379
113
-53
132
34
5,659
1,855
-2
439
-132
-18
-231
117
1,743
2,624
32
350
-179
0
-78
-101
1,734
1,646
-3
-687
641
1
-16
656
-5,595
-7,800
66
982
21 Nonmonetary international and regional organizations
22 International
23 Latin America regional
-5,300
-4,387
3
700
1,142
-31
1,355
959
222
-2,000
-2,019
10
788
777
0
-1,124
-1,072
-10
344
424
-8
-262
-252
-21
1,519
1,335
70
90
-253
191
Memo
24 Foreign countries
25 Official institutions
26 Other foreign2
30,889
31,064
-181
48,187
26,624
21,560
20,266
11,401
8,865
2,384
2,243
141
2,040
2,019
21
9,907
4,299
5,609
8,297
6,549
1,747
291
-842
1,133
5,494
-1,068
6,561
-5,762
444
-6,206
-3,142
16
1,963
1
6,199
0
1,090
0
129
0
3,560
0
2,607
0
-471
0
-299
0
672
0
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.
1
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
A69
3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per year
Rate on Aug. 31, 1989
Rate on Aug. 31, 1989
Country
Rate on Aug. 31, 1989
Country
Percent
6.0
9.25
49.0
12.40
8.0
Austria..
Belgium .
Brazil . . .
Canada..
Denmark
Country
Month
effective
June
June
Mar.
Aug.
June
1989
1989
1981
1989
1989
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
Percent
Month
effective
8.75
5.0
13.5
3.25
June 1989
June 1989
Mar. 1989
May 1989
June 1989
6.0
Norway
Switzerland
,
United Kingdom'
Venezuela
Percent
Month
effective
8.0
5.5
June 1983
July 1989
8.0
Oct. 1985
or makes advances against eligible commercial paper and/or government commercial banks or brokers. For countries with more than one rate applicable to
such discounts or advances, the rate shown is the one at which it is understood the
central bank transacts the largest proportion of its credit operations.
3.27 FOREIGN SHORT-TERM INTEREST RATES
Percent per year, averages of daily figures
1989
Country, or type
1
2
3
4
5
6
7
8
9
10
1986
1987
1988
Feb.
Mar.
Apr.
May
June
July
Aug.
Eurodollars
United Kingdom
Canada
Germany
Switzerland
6.70
10.87
9.18
4.58
4.19
7.07
9.65
8.38
3.97
3.67
7.86
10.28
9.63
4.28
2.94
9.61
12.97
11.69
6.36
5.69
10.18
13.00
12.22
6.57
5.75
10.01
13.09
12.58
6.42
6.05
9.66
13.08
12.44
6.96
7.26
9.28
14.17
12.35
6.93
7.09
8.86
13.91
12.24
7.00
6.92
8.71
13.86
12.30
6.99
7.01
Netherlands
France
Italy
Belgium
Japan
5.56
7.68
12.60
8.04
4.96
5.24
8.14
11.15
7.01
3.87
4.72
7.80
11.04
6.69
3.96
6.75
9.11
12.26
8.04
4.21
6.88
9.07
12.88
8.28
4.21
6.70
8.61
12.21
8.17
4.20
7.30
8.81
12.27
8.45
4.25
7.11
8.89
12.35
8.51
4.46
7.07
9.05
12.46
8.46
4.71
7.15
8.95
12.48
8.44
4.80
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A70
International Statistics • October 1989
3.28 FOREIGN EXCHANGE RATES1
Currency units per dollar
1989
Country/currency
1
2
3
4
5
6
Australia/dollar^
Austria/schilling
Belgium/franc
Canada/dollar
China, P.R./yuan
Denmark/krone
7
8
9
10
11
12
13
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/punt2
14
15
16
17
18
19
20
Italyflira
Japan/yen
Malay sia/ringgit
Netherlands/guilder
New Zealand/dollar
Norway/krone
Portugal/escudo
21
22
23
24
25
26
27
28
29
30
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound
1986
1987
1988
Mar.
Apr.
May
June
July
Aug.
67.093
15.260
44.662
1.38%
3.4615
8.0954
70.136
12.649
37.357
1.3259
3.7314
6.8477
78.408
12.357
36.783
1.2306
3.7314
6.7411
81.69
13.148
39.136
1.1954
3.7314
7.2912
80.35
13.161
39.148
1.1888
3.7314
7.2803
77.36
13.691
40.723
1.1925
3.7314
7.5820
75.61
13.912
41.414
1.1986
3.7314
7.7087
75.66
13.308
39.559
1.1891
3.7314
7.3527
76.26
13.571
40.313
1.1756
3.7314
7.4942
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
4.1933
5.9594
1.7569
142.00
7.8071
13.899
152.49
4.2994
6.3321
1.8686
157.34
7.7%9
15.467
142.84
4.1961
6.3223
1.8697
159.23
7.7828
15.718
142.67
4.3409
6.5815
1.9461
165.41
7.7799
16.102
137.39
4.4302
6.7135
1.9789
170.42
7.7934
16.420
134.92
4.2699
6.4105
1.8901
163.84
7.8040
16.416
141.26
4.3508
6.5089
1.9271
166.18
7.8077
16.603
138.43
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
1302.39
128.17
2.6189
1.9778
65.558
6.5242
144.26
1372.50
130.55
2.7535
2.1085
61.547
6.8059
154.05
1371.80
132.04
2.7211
2.1098
61.167
6.7964
154.54
1415.83
137.86
2.6%7
2.1938
60.718
7.0337
160.71
1434.40
143.98
2.7086
2.2292
57.376
7.1852
164.92
1367.39
140.42
2.6809
2.1318
57.537
6.9480
158.31
1384.22
141.35
2.6820
2.1728
59.201
7.0485
161.15
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
2.0132
2.1900
734.51
116.52
31.847
6.1369
1.4642
28.636
25.312
178.13
1.9407
2.5393
675.68
116.40
33.416
6.3933
1.6110
27.591
25.542
171.34
1.9497
2.5480
672.10
116.146
34.021
6.3689
1.6469
26.998
25.524
170.08
1.9575
2.6710
669.25
121.39
34.145
6.5756
1.7290
25.788
25.757
163.07
1.9572
2.7828
669.43
126.55
33.475
6.6872
1.7089
26.023
25.909
155.30
1.9589
2.6909
669.83
118.73
34.764
6.4653
1.6281
25.816
25.771
162.68
1.9595
2.7220
671.06
120.64
34.256
6.5490
1.6606
25.679
25.910
159.46
100.81
103.09
MEMO
31
United States/dollar3
112.22
%.94
92.72
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
%.99
97.24
99.12
100.44
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 BULLETIN, v o l . 6 4 , A u g u s t 1978, p . 7 0 0 ) .
A71
Guide to Tabular Presentation, Statistical
Releases, and Special Tables
GUIDE TO TABULAR
Symbols and
c
e
p
r
*
PRESENTATION
Abbreviations
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000
when the smallest unit given is millions)
General
0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs
. ..
Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable
Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct
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.
STATISTICAL RELEASES—List Published Semiannually,
with Latest Bulletin
Anticipated schedule of release dates for periodic releases
SPECIAL TABLES—Published Irregularly,
with Latest Bulletin
Reference
Issue
June 1989
Page
A101
Issue
Page
Reference
Title and Date
Assets and liabilities of commercial banks
March 31, 1988
June 30, 1988
September 30, 1988
December 31, 1988
Terms of lending at commercial banks
May 1988
August 1988
November 1988
February 1989
Assets and liabilities of U.S. branches and agencies of foreign banks
June 30, 1988
September 30, 1988
December 31, 1988
March 31, 1989
Pro forma balance sheet and income statements for priced service operations
June 30, 1987
September 30, 1987
March 31, 1988
March 31, 1989
June
June
August
August
1989
1989
1989
1989
A72
A78
A72
A78
September
January
April
June
1988
1989
1989
1989
A70
A72
A72
A84
January
May
June
August
1989
1989
1989
1989
A78
A72
A90
A84
November
February
August
September
1987
1988
1988
1989
A74
A80
A70
A72
A72
Federal Reserve Board of Governors
ALAN GREENSPAN,
MANUEL H.
Chairman
Vice Chairman
WAYNE D.
MEMBERS
DIVISION
MARTHA R.
JOHNSON,
OFFICE OF BOARD
JOSEPH R. COYNE, Assistant
to the Board
DONALD J. WINN, Assistant to the Board
BOB STAHLY MOORE, Special Assistant to the
Board
SEGER
ANGELL
OF INTERNATIONAL
E D W I N M . TRUMAN, Staff Director
LARRY J. PROMISEL, Senior Associate
CHARLES J. SIEGMAN, Senior Associate
D A V I D H . HOWARD, Deputy Associate
ROBERT F. GEMMILL, Staff
LEGAL
OFFICE OF THE
Counsel
Secretary
Secretary
DIVISION OF BANKING
SUPERVISION AND
REGULATION
Director
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
JOE M. CLEAVER, Assistant 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 . SUSS AN, Assistant Director
LAURA M . HOMER, Securities Credit Officer
STATISTICS
MICHAEL J. PRELL, Director
E D W A R D C . E T T I N , Deputy Director
THOMAS D . SIMPSON, Associate
Director
Director
MARTHA BETHEA, Deputy Associate
Director
PETER A . TINSLEY, Deputy Associate
Director
MYRON L . K W A S T , Assistant Director
SUSAN J. LEPPER, Assistant
Director
PATRICK M . PARKINSON, Assistant
Director
MARTHA S . SCANLON, Assistant
Director
D A V I D J. STOCKTON, Assistant Director
JOYCE K . ZICKLER, Assistant Director
LEVON H . GARABEDIAN, Assistant
Director
(Administration)
Director
G L E N N E . L O N E Y , Assistant Director
ELLEN M A L A N D , Assistant Director
DOLORES S . SMITH, Assistant Director
WILLIAM TAYLOR, Staff
D O N E . KLINE, Associate
AND
LAWRENCE SLIFMAN, Associate
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,
Adviser
DIVISION OF RESEARCH
SECRETARY
WILLIAM W . WILES,
Secretary
JENNIFER J. JOHNSON, Associate
BARBARA R. LOWREY, Associate
Director
Director
Director
D O N A L D B . A D A M S , Assistant
Director
PETER HOOPER I I I , Assistant
Director
KAREN H . JOHNSON, Assistant
Director
RALPH W . SMITH, JR., Assistant
Director
DIVISION
J. VIRGIL MATTINGLY, JR., General
Counsel
RICHARD M. ASHTON, Associate General
Counsel
OLIVER IRELAND, Associate General
Counsel
RICKI R. TIGERT, Associate General
Counsel
SCOTT G. ALVAREZ, Assistant General Counsel
MARYELLEN A. BROWN, Assistant to the General
FINANCE
DIVISION
OF MONETARY
AFFAIRS
D O N A L D L . K O H N , Director
D A V I D E . LINDSEY, Deputy Director
BRIAN F . MADIGAN, Assistant
Director
RICHARD D . PORTER, Assistant Director
NORMAND R.V. BERNARD, Special
Assistant
OFFICE OF THE INSPECTOR
GENERAL
BRENT L . BOWEN, Inspector
BARRY R. SNYDER, Assistant
General
Inspector
to the
General
Board
A73
and Official Staff
EDWARD W.
JOHN P.
KELLEY,
JR.
LAWARE
OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
OFFICE OF STAFF DIRECTOR FOR
FEDERAL RESER VE BANK
ACTIVITIES
S . D A V I D FROST, Staff Director
E D W A R D T . MULRENIN, Assistant Staff Director
PORTIA W . THOMPSON, Equal Employment Opportunity
THEODORE E. ALLISON, Staff
DIVISION OF FEDERAL
BANK
OPERATIONS
Programs Officer
DIVISION OF HUMAN
MANAGEMENT
CLYDE H . FARNSWORTH, JR., Director
D A V I D L . ROBINSON, Associate
Director
C . WILLIAM SCHLEICHER, JR., Associate
Director
BRUCE J. SUMMERS, Associate
Director
CHARLES W . B E N N E T T , Assistant Director
JACK D E N N I S , JR., Assistant Director
EARL G . HAMILTON, Assistant Director
JOHN H. PARRISH, Assistant
CONTROLLER
(Programs and
Budgets)
DIVISION
Assistant Controller (Finance)
OF SUPPORT
SERVICES
ROBERT E . FRAZIER, Director
GEORGE M . LOPEZ, Assistant
D A V I D L . WILLIAMS, Assistant
Director
Director
OFFICE OF THE EXECUTIVE
INFORMATION RESOURCES
DIRECTOR FOR
MANAGEMENT
ALLEN E . BEUTEL, Executive Director
STEPHEN R . MALPHRUS, Deputy Executive
DIVISION
SYSTEMS
OF HARDWARE
AND
Director
SOFTWARE
BRUCE M . BEARDSLEY, Director
THOMAS C . J U D D , Assistant Director
ELIZABETH B . RIGGS, Assistant Director
ROBERT J. ZEMEL, Assistant Director
DIVISION OF APPLICATIONS
STATISTICAL
SERVICES
WILLIAM R . JONES, Director
D A Y W . RADEBAUGH, Assistant
RICHARD C . STEVENS, Assistant
PATRICIA A . WELCH, Assistant
Director
LOUISE L . ROSEMAN, Assistant
FLORENCE M . Y O U N G , Assistant
GEORGE E . LIVINGSTON, Controller
STEPHEN J. CLARK, Assistant Controller
DARRELL R . PAULEY,
RESERVE
RESOURCES
D A V I D L . S H A N N O N , Director
JOHN R . WEIS, Associate Director
ANTHONY V . DIGIOIA, Assistant Director
JOSEPH H . HAYES, JR., Assistant Director
FRED HOROWITZ, Assistant Director
OFFICE OF THE
Director
DEVELOPMENT
Director
Director
Director
AND
Director
Director
74
Federal Reserve Bulletin • October 1989
Federal Open Market Committee
FEDERAL
OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
Chairman
W A Y N E D . ANGELL
ROGER GUFFEY
M A N U E L H . JOHNSON
E . GERALD CORRIGAN,
SILAS KEEHN
E D W A R D W . KELLEY, JR.
JOHN P . L A W A R E
ALTERNATE
E D W A R D G . BOEHNE
ROBERT H . BOYKIN
Vice Chairman
THOMAS C . MELZER
MARTHA R . SEGER
RICHARD F . SYRON
MEMBERS
W . LEE HOSKINS
JAMES H . OLTMAN
GARY H . STERN
STAFF
DONALD L. KOHN, Secretary and
Economist
NORMAND R . V . BERNARD, Assistant
Secretary
GARY P . GILLUM,
Deputy Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
ERNEST T . PATRIKIS,
MICHAEL J. PRELL,
EDWIN M . TRUMAN,
Counsel
Deputy General Counsel
Economist
Economist
ANATOL B. BALBACH, Associate
RICHARD G. DAVIS, Associate
Economist
Economist
PETER D . STERNLIGHT, Manager
SAM Y . CROSS, Manager for
FEDERAL ADVISORY
Economist
THOMAS E. DAVIS, Associate
DAVID E. LINDSEY, Associate
Economist
ALICIA H. MUNNELL, Associate
Economist
LARRY J. PROMISEL, Associate
Economist
KARL A. SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
THOMAS D . SIMPSON, Associate
Economist
LAWRENCE SLIFMAN, Associate
Economist
for Domestic Operations, System Open Market Account
Foreign Operations, System Open Market Account
COUNCIL
DONALD N . BRANDIN,
SAMUEL A . MCCULLOUGH,
J. TERRENCE MURRAY, First District
WILLARD C . BUTCHER, Second District
SAMUEL A . MCCULLOUGH, Third District
THOMAS H . O ' B R I E N , Fourth District
FREDERICK D E A N E , JR., Fifth District
KENNETH L . ROBERTS, Sixth District
President
Vice President
B . KENNETH WEST, Seventh District
D O N A L D N. B R A N D I N , Eighth District
LLOYD P . JOHNSON, Ninth District
JORDAN L . HAINES, Tenth District
JAMES E. BURT III, Eleventh District
PAUL H A Z E N , Twelfth District
HERBERT V . PROCHNOW,
Secretary
WILLIAM J. KORSVIK, Associate
Secretary
A75
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
JUDITH N . BROWN, Edina,
WILLIAM E. ODOM, Dearborn,
NAOMI G. ALBANESE, Greensboro, North
GEORGE H . BRAASCH, Chicago, Illinois
BETTY TOM C H U , Arcadia, California
Carolina
CLIFF E. COOK, Tacoma, Washington
JERRY D. CRAFT, Atlanta, Georgia
D O N A L D C. D A Y , Boston, Massachusetts
R . B . ( J O E ) D E A N , JR., Columbia, South Carolina
RICHARD B . DOBY, Denver, Colorado
WILLIAM C. DUNKELBERG, Philadelphia, Pennsylvania
RICHARD H. FINK, Washington, D.C.
JAMES FLETCHER, Chicago, Illinois
STEPHEN GARDNER, Dallas, Texas
E L E N A G. HANGGI, Little Rock, Arkansas
JAMES H E A D , Berkeley, California
THRIFT INSTITUTIONS
ADVISORY
Glendale, California
ROBERT S. DUNCAN, Hattiesburg, Mississippi
A. JAHNS, Chicago, Illinois
H. C. KLEIN, Jacksonville, Arkansas
PHILIP E. L A M B , Springfield, Massachusetts
ADAM
ROBERT A . HESS, W a s h i n g t o n , D . C .
RAMON E. JOHNSON, Salt Lake City, Utah
BARBARA K A U F M A N , San Francisco, California
A . J. (JACK) K I N G , Kalispell, Montana
MICHELLE S . MEIER, W a s h i n g t o n , D . C .
RICHARD L. D . MORSE, Manhattan, Kansas
L I N D A K. PAGE, Columbus, Ohio
SANDRA PHILLIPS, Pittsburgh, Pennsylvania
VINCENT P. QUAYLE, Baltimore, Maryland
CLIFFORD N. ROSENTHAL, New York, New York
A L A N M. SILBERSTEIN, New York, New York
RALPH E. SPURGIN, Columbus, Ohio
D A V I D P. W A R D , Peapack, New Jersey
LAWRENCE WINTHROP, Portland, Oregon
COUNCIL
GERALD M. CZARNECKI,
DONALD B. SHACKELFORD,
CHARLOTTE CHAMBERLAIN,
Minnesota, Chairman
Michigan, Vice Chairman
Honolulu, Hawaii, President
Columbus, Ohio, Vice President
JOE C. MORRIS, Overland Park, Kansas
JOSEPH W. MOSMILLER, Baltimore, Maryland
LOUIS H. PEPPER, Seattle, Washington
MARION O. SANDLER, Oakland, California
CHARLES B. STUZIN, Miami, Florida
A76
Federal Reserve Board Publications
For ordering assistance, write PUBLICATIONS SERVICES, MS-138, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551 or telephone (202) 4523244. When a charge is indicated, payment should accompany request and be made payable to the Board of Governors
of the Federal Reserve System. Payment from foreign residents should be drawn on a U.S. bank.
THE U . S . ECONOMY IN AN INTERDEPENDENT WORLD: A
MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each.
WELCOME TO THE FEDERAL RESERVE. MARCH 1 9 8 9 . 1 4 PP.
PROCESSING A N APPLICATION THROUGH THE FEDERAL R E -
SERVE SYSTEM. A u g u s t 1985. 30 pp.
INDUSTRIAL PRODUCTION—1986 EDITION.
December 1986.
440 pp. $9.00 each.
FINANCIAL FUTURES A N D OPTIONS IN THE U . S . ECONOMY.
THE
FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. 1984. 120 p p .
A N N U A L REPORT.
A N N U A L REPORT: B U D G E T REVIEW, 1 9 8 8 - 8 9 .
FEDERAL RESERVE BULLETIN. Monthly. $ 2 5 . 0 0 per year or
$ 2 . 5 0 each in the United States, its possessions, Canada,
and Mexico. Elsewhere, $ 3 5 . 0 0 per year or $ 3 . 0 0 each.
BANKING AND MONETARY STATISTICS. 1 9 1 4 - 1 9 4 1 . (Reprint
of Part I only) 1976. 682 pp. $5.00.
A N N U A L STATISTICAL DIGEST
1974-78.
1981.
1982.
1983.
1984.
1985.
1986.
1987.
1980. 305 pp.
1982. 239 pp.
1983. 266 pp.
1984. 264 pp.
1985. 254 pp.
1986. 231 pp.
1987. 288 pp.
1988. 272 pp.
$10.00 per copy.
$ 6.50 per copy.
$ 7.50 per copy.
$11.50 per copy.
$12.50 per copy.
$15.00 per copy.
$15.00 per copy.
$15.00 per copy.
SELECTED INTEREST A N D EXCHANGE RATES—WEEKLY SERIES OF CHARTS. Weekly. $30.00 per year or $.70 each in
the United States, its possessions, Canada, and Mexico.
Elsewhere, $35.00 per year or $.80 each.
THE FEDERAL RESERVE A C T and other statutory provisions
affecting the Federal Reserve System, as amended
through August 1988. 608 pp. $10.00
REGULATIONS OF THE BOARD OF GOVERNORS OF THE F E D ERAL RESERVE SYSTEM.
A N N U A L PERCENTAGE RATE TABLES (Truth in Lending—
Regulation Z) Vol. I (Regular Transactions). 1969. 100
pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each
volume $2.25; 10 or more of same volume to one
address, $2.00 each.
INTRODUCTION TO F L O W OF F U N D S . 1980. 68 pp. $1.50 each;
10 or more to one address, $1.25 each.
FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updated at least monthly. (Requests must be prepaid.)
Consumer and Community Affairs Handbook. $75.00 per
year.
Monetary Policy and Reserve Requirements Handbook.
$75.00 per year.
Securities Credit Transactions Handbook. $75.00 per year.
The Payment System Handbook. $75.00 per year.
Federal Reserve Regulatory Service. 3 vols. (Contains all
three Handbooks plus substantial additional material.)
$200.00 per year.
Rates for subscribers outside the United States are as
follows and include additional air mail costs:
Federal Reserve Regulatory Service, $250.00 per year.
Each Handbook, $90.00 per year.
December 1986. 264 pp. $10.00 each.
CONSUMER EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom use. Multiple copies
are available without charge.
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
Federal Reserve Glossary
A Guide to Business Credit and the Equal Credit Opportunity
Act
A Guide to Federal Reserve Regulations
How to File A Consumer Credit Complaint
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?
When Your Home is on the Line: What You Should Know
About Home Equity Lines of Credit
PAMPHLETS FOR FINANCIAL
INSTITUTIONS
Short pamphlets on regulatory compliance, primarily suitable for banks, bank holding companies, and creditors.
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
How to Determine the Credit Needs of Your Community
Regulation Z: The Right of Rescission
The Right to Financial Privacy Act
All
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
155.
T H E F U N D I N G OF PRIVATE PENSION P L A N S ,
by Mark J.
Warshawsky. November 1987. 25 pp.
156. INTERNATIONAL T R E N D S FOR U . S . B A N K S A N D B A N K -
ING MARKETS, by James V. Houpt. May 1988. 47 pp.
1 5 7 . M 2 PER U N I T OF POTENTIAL G N P AS AN ANCHOR FOR
THE PRICE L E V E L , by Jeffrey J. Hallman, Richard D.
Porter, and David H. Small. April 1989. 28 pp.
STAFF STUDIES: Summaries Only Printed in the
Bulletin
158. T H E ADEQUACY A N D CONSISTENCY OF MARGIN R E QUIREMENTS IN THE MARKETS FOR STOCKS A N D DERIVATIVE PRODUCTS, by Mark J. Warshawsky with the
Studies and papers on economic and financial subjects that
are of general interest. Requests to obtain single copies of
the full text or to be added to the mailing list for the series
may be sent to Publications Services.
REPRINTS OF BULLETIN
Staff Studies 114-145 are out of print.
Most of the articles reprinted do not exceed 12 pages.
1 4 6 . T H E ROLE OF THE PRIME RATE IN THE PRICING OF
BUSINESS LOANS BY COMMERCIAL B A N K S , 1977-84, by
Thomas F. Brady. November 1985. 25 pp.
1 4 7 . REVISIONS IN THE MONETARY SERVICES
INDEXES OF THE MONETARY AGGREGATES,
T. Farr and Deborah Johnson.
42 pp.
(DIVISIA)
by Helen
December 1985.
148. T H E MACROECONOMIC A N D SECTORAL EFFECTS OF THE
ECONOMIC RECOVERY TAX ACT: SOME SIMULATION
RESULTS, by Flint Brayton and Peter B. Clark. December 1985. 17 pp.
1 4 9 . T H E 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, by John T .
Rose and John D. Wolken. May 1986. 13 pp.
1 5 1 . RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING FROM 1983 THROUGH 1985, by Patrick I. Mahoney,
Alice P. White, Paul F. O'Brien, and Mary M.
McLaughlin. January 1987. 30 pp.
152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A
REVIEW OF THE LITERATURE, by Mark J. Warshawsky.
April 1987. 18 pp.
by Carolyn D. Davis and
Alice P. White. September 1987. 14 pp.
153. STOCK MARKET VOLATILITY,
1 5 4 . T H E EFFECTS ON CONSUMERS A N D CREDITORS OF PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, b y
Glenn B. Canner and James T. Fergus. October 1987.
26 pp.
assistance of Dietrich Earnhart. September 1989. 23 pp.
ARTICLES
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.
Home Equity Lines of Credit. 6/88.
U.S. International Transactions in 1988. 5/89.
A78
Index to Statistical Tables
References
are to pages A3-A70 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20
Domestic finance companies, 36
Federal Reserve Banks, 10
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21
Automobiles
Consumer installment credit, 39, 40
Production, 49, 50
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
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 24
Branch banks, 21, 57
Business activity, nonfinancial, 46
Business expenditures on new plant and equipment, 35
Business loans (See Commercial and industrial loans)
EMPLOYMENT, 47
Eurodollars, 24
FARM mortgage loans, 38
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, 37, 38
Federal Housing Administration, 33, 37, 38
Federal Land Banks, 38
Federal National Mortgage Association, 33, 37, 38
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, 36
Business credit, 36
Loans, 39, 40
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4
Flow of funds, 41, 43, 44, 45
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, 70
Foreign trade, 56
Foreigners
Claims on, 57, 59, 62, 63, 64, 66
Liabilities to, 20, 56, 57, 59, 60, 65, 67, 68
CAPACITY utilization, 48
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 10
Central banks, discount rates, 69
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, 39, 40
Loans sold outright, 19
Nondeposit funds, 17
Real estate mortgages held, by holder and property, 38
Time and savings deposits, 3
Commercial paper, 23, 24, 36
Condition statements (See Assets and liabilities)
Construction, 46, 51
Consumer installment credit, 39, 40
Consumer prices, 46, 48
Consumption expenditures, 53, 54
Corporations
Nonfinancial, assets and liabilities, 35
Profits and their distribution, 35
Security issues, 34, 67
Cost of living (See Consumer prices)
Credit unions, 26, 39. (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 securities)
Demand deposits
Banks, by classes, 18-21
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
GOLD
Certificate account, 10
Stock, 4, 56
A79
Government National Mortgage Association, 33, 37, 38
Gross national product, 53
HOUSING, new and existing units, 51
INCOME, personal and national, 46, 53, 54
Industrial production, 46, 49
Installment loans, 39, 40
Insurance companies, 26, 30, 38
Interest rates
Bonds, 24
Consumer installment credit, 40
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 69
Money and capital markets, 24
Mortgages, 37
Prime rate, 23
International capital transactions of United States, 55-69
International organizations, 59, 60, 62, 65, 66
Inventories, 53
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, 38
Federal Reserve Banks, 10, 11
Financial institutions, 26, 38
LABOR force, 47
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, 38
Insured or guaranteed by United States, 37, 38
MANUFACTURING
Capacity utilization, 48
Production, 48, 50
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 50
Mobile homes shipped, 51
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, 53
OPEN market transactions, 9
PERSONAL income, 54
Prices
Consumer and producer, 46, 52
Stock market, 25
Prime rate, 23
Producer prices, 46, 52
Production, 46, 49
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 38
Financial institutions, 26
Real estate loans—Continued
Terms, yields, and activity, 37
Type of holder and property mortgaged, 38
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, 56
Residential mortgage loans, 37
Retail credit and retail sales, 39, 40, 46
SAVING
Flow of funds, 41, 43, 44, 45
National income accounts, 53
Savings and loan associations, 26, 38, 39, 41. (See also
Thrift institutions)
Savings banks, 26, 38, 39
Savings deposits (See Time and savings deposits)
Securities (See also specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 67
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 55, 56
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, 56
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 47
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, 68
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 55-69
Utilities, production, 50
VETERANS Administration, 37, 38
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 46, 52
YIELDS (See Interest rates)
A80
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
Richard F. Syron
Robert W. Eisenmenger
NEW YORK*
10045
Cyrus R. Vance
Ellen V. Futter
Mary Ann Lambertsen
E. Gerald Corrigan
James H. Oltman
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
Peter A. Benoliel
Gunnar E. Sarsten
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
Hanne Merriman
Leroy T. Canoles, Jr.
Thomas R. Shelton
William E. Masters
Robert P. Black
Jimmie R. Monhollon
Bradley Currey, Jr.
Larry L. Prince
Nelda P. Stephenson
Hugh Brown
Jose L. Saumat
Patsy R. Williams
James A. Hefner
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
L. Dickson Flake
Thomas A. Alvey
Seymour B. Johnson
Thomas C. Melzer
James R. Bowen
Michael W. Wright
John A. Rollwagen
John F. Gardner
Gary H. Stern
Thomas E. Gainor
Fred W. Lyons, Jr.
Burton A. Dole, Jr.
James C. Wilson
Patience S. Latting
Kenneth L. Morrison
Roger Gufifey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Diana S. Natalicio
Andrew L. Jefferson, Jr.
Lawrence E. Jenkins
Robert H. Boykin
William H.Wallace
Robert F. Erburu
Carolyn S. Chambers
Yvonne B. Burke
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
New Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino1
Harold J. Swart1
Robert D. McTeer, Jr.1
Albert D. Tinkelenberg1
John G. Stoides1
Donald E. Nelson
Fred R. Herr1
James D. Hawkins1
James T. Curry III
Melvin K. Purcell
Robert J. Musso
Roby L. Sloan1
John F. Breen1
Howard Wells
Ray Laurence
Leonard W. Fernelius1
(Acting)
Kent M. Scott
David J. France
Harold L. Shewmaker
Tony J. Salvaggio1
Sammie C. Clay
Robert Smith, III1
Thomas H. Robertson
John F. Hoover1
Thomas C. Warren2
Angelo S. Carella1
E. Ronald Liggett1
Gerald R. Kelly1
•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.
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
T
MM
s - * t,
•Hi
,
|
MMMK
/ - Por^ r -
'b*</
I
s
*Heltn,
(
(
.
'
©
POroirLr .
!
•^1/4) f ' i c f f i S i S ^ I
•
Kansas
c'
Oklahoma Cir
i
T
V
)©
I/i
(1!)
LEGEND
Q
Boundaries of Federal Reserve Districts
®
Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
*
Federal Reserve Branch Cities
•
Federal Reserve Bank Facility
Board of Governors of the Federal Reserve
System
Publications of Interest
NEW HANDBOOK AVAILABLE
REGULATORY
SERVICE
FROM THE
The Federal Reserve Board has announced publication of The Payment System Handbook. The new
handbook, which is part of the Federal Reserve Regulatory Service, deals with expedited funds availability, check collection, wire transfers, and risk-reduction policy. It includes Regulation CC (Availability of
Funds and Collection of Checks), Regulation J (Collection of Checks and Other Items and Wire Transfers
of Funds by Federal Reserve Banks), the Expedited
Funds Availability Act and related statutes, official
Board commentary on Regulation CC, and policy
statements on risk reduction in the payment system. In
addition, it contains detailed subject and citation indexes. It is published in loose-leaf binder form and is
updated monthly.
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume loose-leaf service
containing all Board regulations and related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are published separately as handbooks pertaining to monetary
policy, securities credit, consumer affairs, and, available for the first time in September 1988, The Payment
System Handbook.
For domestic subscribers, the annual rate for The
Payment System Handbook is $75. For subscribers
outside the United States, the price, including additional air mail costs, is $90. For the Federal Reserve
Regulatory Service, not including handbooks, the annual rate is $200 for domestic subscribers and $250 for
subscribers outside the United States. All subscription
requests must be accompanied by a check payable to
"Board of Governors of the Federal Reserve
System." Orders should be addressed to Publications
Services, Mail Stop 138, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
Publications of Interest
FEDERAL RESERVE
PUBLICATIONS
CONSUMER
CREDIT
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects as
how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how
to use a credit card, and how to resolve a billing error.
The Board also publishes the Consumer Handbook
to Credit Protection Laws, a complete guide to consumer credit protections. This 44-page booklet explains how to use the credit laws to shop for credit,
apply for it, keep up credit ratings, and complain about
an unfair credit.
Three booklets on the mortgage process are also
available: A Consumer's Guide to Mortgage Refinancing, A Consumer's Guide to Mortgage Lock-Ins, and
A Consumer's Guide to Mortgage Closings. These
booklets were prepared in conjunction with the Federal Home Loan Bank Board and in consultation with
other federal agencies and trade and consumer
groups.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 138,
Board of Governors of the Federal Reserve System,
Washington, D.C. 20551. Multiple copies for classroom use are also available free of charge.
A Consumer's
Guide to
@FedFRASER