Full text of Federal Reserve Bulletin : September 1981
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VOLUME 67 •
NUMBER 9 •
SEPTEMBER 1 9 8 1
FEDERAL RESERVE
BULLETIN
Board of Governors of the Federal Reserve System
Washington, D.C.
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield
Janet O. Hart • James L. Kichline • Tony J. Salvaggio • Edwin M. Truman
Naomi P. Salus, Coordinator
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. The artwork is provided by the Graphic Communications Section under the
direction of Peter G. Thomas. Editorial support is furnished by the Economic Editing Unit headed by Mendelle T. Berenson.
Table of Contents
647
credit program for depository institutions
facing liquidity strains.
BANK LENDING TO
DEVELOPING
COUNTRIES: RECENT
DEVELOPMENTS
IN HISTORICAL
PERSPECTIVE
Amendment of Regulation J to make Federal Reserve check collection services available to all depository institutions. (See Legal Developments.)
International banks became important lenders to the developing countries of Latin
America, Asia, and Africa during the 1970s
and have stepped up their lending further
over the past two years.
657
PROFITABILITY
OF
INSURED COMMERCIAL
BANKS
In an environment of high and widely fluctuating interest rates, commercial banks
experienced relatively strong profitability
during 1980.
671
Administrative guidance to aid Federal Reserve Banks in implementing provisions of
Regulation A pertaining to the extended
The Committee tentatively agreed that
for the period from the fourth quarter of
1981 to the fourth quarter of 1982, growth of
TREASUR Y AND FEDERAL RESER VE
FOREIGN EXCHANGE
OPERATIONS
INDUSTRIAL
PRODUCTION
Output decreased about 0.4 percent in
August.
709
RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET
COMMITTEE
Establishment of new discount rate for extended credit to banks and thrift institutions
that are under sustained liquidity pressures.
CHANGES IN BANK
LENDING
PRACTICES,
1979-81
The U.S. dollar advanced strongly against
all currencies in the period from February
through July 1981.
707
712
At the meeting on July 6-7, 1981, in accordance with the Full Employment and Balanced Growth Act of 1978 (the HumphreyHawkins Act), the Committee reviewed its
ranges for growth of the monetary and
credit aggregates for the period from the
fourth quarter of 1980 to the fourth quarter
of 1981 and gave preliminary consideration
to objectives for monetary growth that
might be appropriate for 1982.
The Committee agreed to retain the previously established ranges for the monetary
aggregates for 1981. These ranges, abstracting from the impact of NOW accounts on a
nationwide basis, were 3 to 5VZ percent for
Ml-A, V/i to 6 percent for Ml-B, 6 to 9
percent for M2, and 6V2 to 9VI percent for
M3. The associated range for bank credit
was 6 to 9 percent. In light of its desire to
maintain moderate growth in money over
the balance of the year, the Committee
wished to affirm that growth in Ml-B near
the lower end of its range would be acceptable and desirable. At the same time, the
Committee recognized that growth in the
broader monetary aggregates might be high
in their ranges.
Large banks generally relaxed their nonprice terms of credit in the second half of
1980 and the first three quarters of 1981.
687
Admission of one state bank to membership
in the Federal Reserve System.
ANNOUNCEMENTS
Ml, M2, and M3 within ranges of 2VI to SVI
percent, 6 to 9 percent, and 6V2 to 9V2
percent would be appropriate. The upper
and lower ends of the range for Ml were
reduced V2 percentage point and 1 percentage point respectively from the 1981 range
for Ml-B. The ranges for the broader aggregates were unchanged from those for 1981.
However, given the expectation that
growth of these aggregates in 1981 would be
around the upper end of the ranges and
looking toward results in 4982 more toward
the middle of the ranges, the new ranges
were fully consistent with year-to-year reductions in growth.
LEGAL
DEVELOPMENTS
Revision of Regulation C; amendments to
Regulations J and K; various rules and bank
holding company and bank merger orders;
and pending cases.
Ai
FINANCIAL
AND BUSINESS
STATISTICS
A3 Domestic Financial Statistics
A46 Domestic Nonfinancial Statistics
A54 International Statistics
A 6 9 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND
SPECIAL
TABLES
A 7 0 BOARD
OF GOVERNORS
A 7 2 FEDERAL OPEN MARKET
AND STAFF; ADVISORY
AND
STAFF
COMMITTEE
COUNCILS
A73 FEDERAL RESERVE
BANKS,
BRANCHES,
AND OFFICES
A 7 4 FEDERAL RESERVE
PUBLICATIONS
A76 INDEX
BOARD
TO STATISTICAL
A78 MAP OF FEDERAL
TABLES
RESERVE
SYSTEM
Bank Lending to Developing Countries
Recent Developments in Historical Perspective
This article was prepared by David P. Dod of the
Board's Division of International Finance.
Developing countries of Latin America, Asia,
and Africa became important borrowers from
international banks during the 1970s and have
stepped up their borrowing over the past two
years. Part of the recent increase can be attributed to demands by the developing countries for
external credit to cushion the impact of external
strains on their economies. The prominent contributing factors have been the escalation of
world oil prices in 1979-80, the related slowdown
of economic activity in industrial countries and
downturn of world prices for nonfuel commodities, and the rising interest cost of outstanding
borrowings by developing countries from world
financial markets.
A large share of the recent borrowing by
developing countries might have been expected
in any event, in view of their tendency to sustain
external deficits and in light of the international
banking relationships they have built up over the
past decade. For a number of developing countries, a long-range program of borrowing from
international commercial banks has been a specific objective of public policy. Central governments and state enterprises have undertaken
substantial long-term borrowing from international banks. Governments in most developing
countries have significantly regulated the terms
on which private companies may borrow abroad
and have often applied direct financial incentives
or disincentives. An increase in public-sector
and private borrowing combined has been necessary in view of economic policies in developing
countries that have contributed to higher, sustained deficits in the current account of their
balance of payments.
The persistence of high levels of borrowing
from international banks by some developing
countries has shifted markedly the composition
of their external debt and has created a more
complex task of debt management than they
faced a decade ago. Compared with debt to
foreign official lenders, which were once the
predominant creditors for all developing countries, debt to banks bears shorter maturities and
requires more frequent refinancing. It also bears
higher and more variable interest costs. Major
borrowers from banks have therefore had to pay
increasing attention to external debt-service obligations when formulating objectives for their
balance of payments and their domestic economies.
BALANCE OF PAYMENTS
NEEDS
Needs for external financing of the developing
countries apart from those in the Organization of
Petroleum Exporting Countries have risen sharply during 1979-81 (chart 1). For some—Korea,
Taiwan, Thailand—costs for oil imports have
1. Current account deficits of the non-OPEC
developing countries
Percent of GNP
6
4
9L
1973
1975
1977
1979
1981
Current account is balance of payments for goods, services, and
private and official transfers.
SOURCES. IMF, World Bank, and Federal Reserve staff estimates.
648
Federal Reserve Bulletin • September 1981
2. Economic activity and inflation in the
non-OPEC developing countries
Percent per annum
1973
1975
Percent per annum
1977
1979
1981
Inflation is change in consumer prices.
GDP is gross domestic product.
SOURCE: IMF World Economic Outlook and Federal Reserve staff
adjustments.
increased by 4 to 5 percent of national income, a
more severe impact, relatively, than that experienced in any of the major industrial countries.
For others, the 1980-81 slowdown in economic
growth of the industrial countries has slowed the
growth of export markets and has contributed to
the cyclical weakening in world market prices for
their exports of primary commodities. For countries with high levels of net external debt, rising
interest rates on world financial markets have
imposed additional needs for external financing.
Recent external forces affecting the non-OPEC
developing countries have been broadly similar
to those at work following the first world oil
shock of late 1973. The initial responses of
policymakers in the developing countries have
also been broadly similar, as they have again
sought to maintain reasonably high levels of
economic activity and, on average, have been
willing to tolerate some acceleration in price
inflation (chart 2).
It depends in part on factors that are beyond
their control, notably future shifts in their terms
of trade that may offset or compound their recent
setbacks. It also depends upon their view of the
average level of current account deficit that they
believe is desirable over the longer term and
upon the willingness of foreign creditors to supply the implied financing.
Developing countries have not been adjusting
quickly to the oil shock of 1979-80, judging by
relative growth in the volume of exports and
imports. Rapid export expansion has been maintained on average, but growth in the volume of
imports does not yet appear to have slowed
significantly (chart 3). At this stage, non-OPEC
developing countries appear to be adjusting less
vigorously to recent adversities than they did in
response to the oil shock of late 1973 and to the
related collapse of nonfuel commodity prices in
1974-75. To some extent the recent slow adjustment may be attributed to a lag in curtailing
expansionary fiscal policies adopted by many
developing countries in 1979-80, before the full
dimensions of the second oil shock became clear.
3. Volume of exports and imports by
non-OPEC developing countries
1973=100
130
Exports
I
120
Imports
110
1973
I
100
1974
1975
1976
1977
1978=100
THE ADJUSTMENT
PROCESS
While the circumstances of individual countries
vary, most developing countries now confront a
need to adjust to adverse developments in their
external payments positions. The adjustment
process must basically consist of policies to
expand the volume of their exports and to restrain the volume of imports.
The severity of the required adjustment effort
by developing countries is somewhat uncertain.
1978
1979
1980
1981
SOURCES. IMF World Economic Outlook and Federal Reserve staff
adjustments.
Bank Lending to Developing
More recently, the tendency of some countries
to resist depreciation of their currencies against
the U.S. dollar has inhibited balance of payments
adjustment. As the exchange value of the dollar
has risen strongly over the past year against
European and Japanese currencies, such resistance has eroded the competitiveness of the internationally tradable goods and services of many
developing countries.
The apparent sluggishness of recent actions
toward balance of payments adjustment may
signify only a lag by developing countries in
recognizing their adjustment needs. Or it may
signify a perception by many of these countries
that they can aim for and sustain higher levels of
current account deficits in the future than they
sustained in the 1970s (chart 4). In the latter case,
the external debt of developing countries would
be expected to expand at a correspondingly more
rapid pace through the 1980s.
4. Average current account deficits
in relation to GDP
Countries
649
EXTERNAL
FINANCING
FROM BANKS IN THE 1970S
Bank lending to developing countries has taken
three principal forms: short-term private trade
financing; long-term loans guaranteed by the
governments of industrial countries to promote
exports of capital goods; and long-term, nonguaranteed loans arranged in large blocks
through syndicates of international banks. The
volume of each form of bank lending expanded
rapidly through the 1970s.
Before the sharp increase in needs for balance
of payments financing that followed the oil shock
of 1973-74, external borrowing from banks by
developing countries was already growing vigorously (chart 5). The early 1970s had been a
period of unusually favorable terms of trade,
strong external payments positions, and rapidly
rising reserves for most developing countries.
Yet the fragmentary data that are available suggest that their debt to banks more than doubled
in dollar terms between the end of 1970 and the
end of 1973, reaching about $35 billion. The
fastest growing component of that debt was
medium-term syndicated loans from commercial
5. Net external borrowing from banks
by the non-OPEC developing countries
Billions of dollars
The ten major borrowers are Argentina, Brazil, Chile, Colombia,
Korea, Mexico, Peru, the Philippines, Taiwan, Thailand.
SOURCES. IMF and World Bank.
A high-deficit, high-debt strategy by developing countries is sometimes rationalized as a
means to finance a higher level of capital formation, which, if effectively utilized, facilitates
more rapid economic growth by the borrower.
Although some countries (Colombia, Taiwan,
Malaysia) have prospered without recourse to
this strategy, the high-deficit approach to economic growth remains appealing to many developing countries. The feasibility of such a strategy, however, depends on the ability of the
borrowing country to attract external financing
from banks and other foreign creditors.
banks
J2ZQ
1222
\m
197fi'
' 1978'
' 1980
Total is lending from U.S. banks and banks headquartered in other
industrial countries whose authorities provide statistical reports to the
Bank for International Settlements (BIS).
U.S.-chartered banks include U.S. offices and foreign branch
offices and exclude lending denominated in local currency.
SOURCES. BIS, Fifty-First Annual Report, 1980/1981, BULLETIN
table 3.20, and Federal Reserve staff estimates.
650
Federal Reserve Bulletin • September 1981
banks. Measured on the basis of new credit
announcements, the flow of such loans rose from
less than $1 billion in 1971 to %AVi billion in 1973,
with the bulk of the loans being arranged .for
borrowers in four Latin American countries—
Brazil, Mexico, Peru, and Argentina.
A critical institutional innovation helping to
popularize syndicated term loans among the
banks was the use of "floating" rates of interest,
adjusted at regular intervals to reflect market
conditions. In a period of relatively volatile and
rising interest rates, banks favored that feature of
internationally syndicated loans as a means of
avoiding the interest-rate risk inherent in alternative, fixed-interest investments such as bonds
and mortgages.
During 1973-74, demands by developing countries for external, trade-related financing also
accelerated sharply. Fueled by high levels of
public spending, the volume of their imports
jumped about one-third. Meanwhile, the prices
of their imports rose by two-thirds, under the
combined influence of the sharp increase in oil
prices by OPEC and the general uptrend of world
inflation.
Immediate needs for balance of payments financing during the mid-1970s generated higher
demand by developing countries for all types of
bank lending (chart 5). On the supply side, three
factors helped to ease their access to international banking markets: the rapid buildup of deposits
with international banks by OPEC members, the
downturn in loan demand in industrial countries
that were experiencing a deep recession, and the
expansion in guarantees and subsidies by governments of the industrial countries on certain
export credits extended by banks.
The surge of bank lending to developing countries since 1978 has again been in response to
rising overall needs for balance of payments
financing, associated with rapid import growth
and, more recently, their deteriorating terms of
trade. However, the composition of bank lending
seems to have shifted toward short-term financing and toward private-sector borrowers. Publicsector borrowers in several major borrowing
countries—Argentina, Chile, Colombia, Mexico,
and Peru—appear to have reduced their role in
arranging external financing from banks. In each
case, upward adjustments in domestic interest
rates or changes in the exchange rate system
offered effective inducements to banks and nonbank private borrowers to assume a compensating, more active role in foreign borrowing.
OFFICIAL AND
NONBANK
PRIVATE CAPITAL
FLOWS
Throughout the 1970s nonbank private investors
provided relatively little new external financing
for developing countries, considering that they
had entered the decade with a larger stock of
claims on these countries than the banks. Direct
investment in foreign-controlled companies (financed by equity capital or by loans from the
parent company) has been and continues to be
the most important vehicle for nonbank private
capital flows to developing countries. Such flows
appear to have amounted to about $8 billion in
1980 (chart 6), but they may be subject to somewhat more undercounting than other capital
flows.
Official external grants and loans recorded by
the non-OPEC developing countries averaged
about 2Vi percent of their gross national product
through the 1970s. Those resources have been
heavily and increasingly concentrated upon lower-income countries by both the governments of
the industrial countries and the multilateral development banks. For the 10 major borrowers
6. Major sources of official and nonbank
private financing
SOURCES. IMF Annual Reports and World Economic Outlook and
Federal Reserve staff estimates.
Bank Lending to Developing
from banks (see note to chart 4), the relative
importance of foreign official capital inflows declined sharply during the 1960s and 1970s.
Most developing countries borrowed from the
International Monetary Fund at some point during the 1970s. Net disbursements from the IMF
tend not to be an important source of financing
because of the revolving character of its resources. Nevertheless, those resources play an
important role in meeting needs for exceptional
financing during periods of global economic
strain.
EXTERNAL
INDEBTEDNESS
OF THE DEVELOPING
COUNTRIES
A decade of relatively high current account deficits, and of increased dependence upon nonconcessional loans, has markedly altered the
structure of external debt for the major developing-country borrowers (chart 7). As a result,
interest costs are relatively higher and the average maturity of their debt is much shorter than in
1970. These characteristics of the current debt
$65 billion
•
Official creditors
•
Banks
•
Other creditors
Ten major borrowers
$215 billion
Others
$150 billion
SOURCES. World Bank, BIS, and Federal Reserve staff estimates.
651
profile demand increased skill in debt management and flexibility in adapting economic policy
to changing circumstances.
Flexible exchange rate and interest rate policies have proven to be important tools for managing balance of payments financing problems of
many of the major borrowers. In a number of
recent instances, upward adjustments in interest
rates have been used to induce increased external borrowing and to reverse capital flight by the
private sector. In other instances, countries that
have clung to a rigid structure of interest rates
and foreign exchange rates have found their
fundamental problems of external adjustment
exacerbated by private capital outflows.
For most low-income developing countries external debt through the 1970s continued to take
the form mainly of concessional (low-interest),
long-maturity loans from foreign official lenders.
Debt of these countries to foreign banks has
consisted predominantly of short-term credits or
externally guaranteed loans related to the purchase of specific imports.
IMPACT
7. External debt of the non-OPEC
developing countries, by type of credits
Countries
OF RISING
INTEREST
RATES
The upswing in world interest rates over the past
two years has had a varying impact on the debt
burdens of developing countries. Judged against
conditions in the 1970s, the burden of their
market-based debt has certainly risen. Market
rates of interest have moved up faster than
inflation rates in the major capital-market countries, especially during the past 18 months. Thus
the "real" cost of borrowing, approximated by
the difference between the external interest rate
facing borrowers of dollars, marks, or yen, and
the concurrent rate of inflation in world prices
measured in the respective currency, has risen to
exceptionally high levels.
For most low-income developing countries,
changes in world inflation have had the decisive
influence on the real burden of external debt over
the past decade (chart 8). Fixed-interest, concessional loans have remained the principal component of their external debt, and the average
nominal interest rate on concessional debt has
actually declined since 1970. As part of an effort
to increase real transfers of resources to low-
652
Federal Reserve Bulletin • September 1981
9. Indicators of real interest cost of major borrowers
from banks
8. Indicators of real interest cost confronting
low-income developing countries
Percent per annum
30
20
10
World inflation is unit value of world trade in SDR terms.
Cost of fixed-interest debt (all currency denominations) is an
average for all developing countries, based on reports from creditor
sources; average cost of fixed-interest debt of the low-income countries is less.
SOURCES. I M F a n d O E C D .
income countries during the 1970s, bilateral-aid
donors within the Development Assistance Committee of the Organisation of Economic Cooperation and Development have striven to increase the average degree of concessionality
(that is, the discount from market terms) on
economic development assistance. Interest rates
on other fixed-interest debt of the developing
countries—notably, official and guaranteed export credits and loans from the multilateral development banks—have risen since the mid1970s but have lagged far behind contemporary
market rates of interest. The resulting average
rate of interest on all forms of fixed-interest debt
has risen by only 2 percentage points since 1970.
Because of high average rates of world inflation,
the real interest cost of external debt for most
low-income countries has been strongly negative
throughout the past decade.
The major borrowers from banks also enjoyed
low real costs of borrowing during the 1970s but,
subsequently, have experienced by any measure
an abrupt increase in such costs. One contributing factor has been the large fraction of their total
debt that is subject to variable, market rates of
interest. Short-term commercial and syndicated
term loans loom large for these countries, and
the interest rates payable on such debt have been
marked up quickly in response to the rising
short-term rates of interest in world financial
markets (chart 9).
A second factor has been the high proportion
of dollar-denominated debt in the overall exter
World inflation is unit value of world trade in dollar terms.
SOURCES. IMF and Federal Reserve staff estimates.
nal indebtedness of the major borrowers. More
than four-fifths of the external debt to banks of
the 10 largest borrowers cited previously is estimated to be denominated in U.S. dollars. Over
the past two years, U.S. dollar rates of interest
have risen more than interest rates on other
major currencies.
More recently, the dollar has also appreciated
sharply in foreign exchange markets, and this
development has tended to reduce, in dollar
terms, the prices of goods and services traded in
world markets. As a result, dollar debtors in the
world economy must export a larger volume of
goods and services in order to help finance the
debt-service payments on their dollar-denominated debt. This situation reverses that of 1973,
when a sharp depreciation in the exchange value
of the dollar produced windfall gains for dollar
debtors.
The balance of payments impact of rising
interest rates depends not only on the changing
level of these rates but also on the size of a
country's external debt. Moreover, rising interest payments on a country's external debt may
be counterbalanced by rising interest receipts on
its external assets (chart 10). For the 10 major
bank borrowers, more than half the increase in
net external interest payments during the past
two years can be attributed to growth in net
external debt; rapid growth in gross external debt
has been accompanied by less rapid growth or
sharp decline (Brazil) in their external assets.
Recent increases in net external interest burdens of major developing countries are large in
relation to those of any other modern episode.
Bank Lending to Developing
10. Interest payments and receipts
Billions of dollars
Payments and receipts are external interest payments and receipts
of the ten major borrowers.
SOURCES. National balance of payments data and Federal Reserve
staff estimates.
However, even at the current level of interest
rates, net interest payments abroad exceed 4 or 5
percent of national income in only a few countries. The capacity to finance such interest transfers appears on average to be well within the
means of the borrowing enterprises. The total of
tax revenue and operating income of major borrowing entities within these countries—the government sector and private investors—often
amounts to more than half of national income.
Countries
653
lasting unsettling effects on a borrower's access
to international capital markets. In addition, rescheduled external bank debt normally bears an
interest cost as high as, or higher than, that on
the original loans. Nevertheless, debtor governments have requested rescheduling of their external bank debt more frequently in the past two
years (table 1).
One factor contributing to bank reschedulings
has been the linkage to debt reschedulings by
official creditors under the informal Paris Club
framework. Borrowing governments have been
seeking and obtaining more frequent debt rescheduling from official creditors, some of which have
offered interest rate concessions. As a condition
of Paris Club agreements, creditor governments
normally oblige the debtor to seek a comparable
rescheduling of its debts to other major creditors.
Fulfillment of this condition in several instances
has required a separate rescheduling arrangement involving only the commercial banks.
A second institutional factor leading to publicized debt reschedulings by developing countries
has been the dispersion among small banks of
participations in syndicated long-term loans to
public-sector borrowers. A wider body of creditors raises the need for a formal negotiating
framework and has increased the public visibility
of debt reschedulings.
CONSTRAINTS
ON BANK
LENDING
TO DEVELOPING
COUNTRIES
Risk and Return
While the external interest burdens on developing countries may appear to be modest in relation
to the real resources that they command, the
priority of claims by foreign creditors over other
claims on a country's resources can never be
fully assured. There is a risk that government
borrowers, under adverse political or economic
circumstances, will accommodate domestic
needs at the expense of their obligations to
foreign creditors. Where the government restricts the access of private borrowers to foreign
exchange, private borrowers may also face no
alternative but to suspend payments on their
external obligations. These so-called country
risks in international lending may lead borrowers
to request rescheduling of their debt-service obligations.
Recourse to delays in debt service and to
formal requests for debt rescheduling may have
on Bank
Lending
During the 1970s the returns to U.S. banks on
foreign loans were attractive, on average, while
loan losses were low. Loan losses reported by
banks on their international loans were and have
remained lower than those reported on domestic
loans. The loss experience on loans to developing countries has also been favorable, although
banks seldom cite separately statistics for that
component of their international lending.
The returns to U.S. banks on their international lending have become less attractive compared
with returns on domestic lending since the mid1970s. On international syndicated credits, a
decline has occurred in the average "spread"
earned by the lender above the base rate of
interest on interbank funds in the Eurodollar
market. Moreover, in 1980-81, the base rate in
the Eurodollar market has also declined relative
654
Federal Reserve Bulletin • September 1981
1. Recent cases of multilateral debt rescheduling requested by national governments from international banks
Participating
creditors
Date of
agreement
Country
September 19781
April 1978
July 1981
J
December 1978
Jamaica
commercial banks
long-term debt of government borrowers
Peru
Turkey
Pending
Sudan
April 1980
1
Under negotiation/
Zaire
September 1980 and
pending
December 1980
Pending
Bolivia
commercial banks, preceded by separate
rescheduling by foreign governments
commercial banks, preceded and followed by
separate reschedulings with foreign
governments and nonbank private
creditors
commercial banks, preceded by separate
rescheduling by foreign governments
commercial banks, preceded and followed by
separate reschedulings by foreign
governments
commercial banks
long-term debt of government borrowers
June/August 1979
Nicaragua
Poland
Under negotiation
Liberia
Under negotiation
Costa Rica
commercial banks
commercial banks, preceded by separate
rescheduling by foreign governments
commercial banks, preceded by separate
rescheduling by foreign governments
commercial banks
to the prime rate of interest established for
borrowers in the domestic U.S. market for bank
loans. As a result of these two factors, the
apparent average yield on new syndicated loans
to developing countries, which had averaged
about 1 percentage point higher than the U.S.
prime rate during 1973-78, has fallen significantly below prime during 1980-81.
In the late 1970s, U.S. commercial banks
responded to the apparent declining relative
profitability of syndicated term loans by sharply
11. Outstanding external bank claims on
non-OPEC developing countries
Billions of dollars
Types of debt to banks rescheduled
or restructured
short-term government-guaranteed debt
short- and long-term debt of government
borrowers
f long-term debt of government borrowers
< nonsyndicated long-term debt of
I
government borrowers
long-term debt of government borrowers
long-term debt of government borrowers
long-term debt of government borrowers
long-term debt of government borrowers
short- and long-term debt of government
borrowers
restraining their exposure in the long-term end of
the market. Since mid-1979, however, their
short-term lending to developing countries has
grown rapidly, suggesting that yields on unpublicized, short-maturity loans may have become
somewhat more attractive. Banks headquartered
in other industrial countries also shortened the
average maturity of their loans to developing
countries during 1980 (chart 11).
The interest and participation by U.S. banks in
syndicated term loans to developing countries
appear to have revived since late 1980, partly
because banks now face financially more attractive options to set the floating interest rate on
many such loans at some margin above the prime
rate in the United States rather than to link it to
the interbank rates prevailing in the Eurodollar
market.
Country Exposure
Long-term
1976
1977
1978
_
1979
1980
SOURCES. BIS, U.S. country exposure lending survey, and Federal
Reserve staff estimates.
of Banks
While the competition among banks may suffice
to maintain a reasonable balance over time between risk and return on banks' loans to developing countries, the loan exposure of some banks in
some countries still warrants close analysis. As a
bank's loans to a given country rise to a high
level relative to the capital of the bank, that
"country exposure" tends to arouse anxiety:
Bank Lending to Developing
among the bank's management, who are averse
to a possible severe loss; among bank supervisors, whose agencies may insure or must otherwise protect the bank's depositors; and among
the authorities of the borrowing country, whose
ability in the event of need to expand or even to
maintain that country's access to external bank
credits may come into question. These factors
place a real, if indeterminate, limit on the exposure in a country that bank creditors, as a group,
or the government of the borrowing country will
find acceptable.
Overall exposure of U.S. commercial banks in
developing countries has tended to rise in relation to the banks' capital funds during the past
two years. This development follows a period in
which the bulk of new lending was provided by
large, non-U.S. banks that previously had borne
lower levels of exposure in developing countries
than the largest U.S. banks. In that period, U.S.
banks in all size classes, including those with low
loan exposure in developing countries, had
abruptly slowed the pace of their net lending
to developing countries (chart 12).
12. U.S. bank exposure in relation to bank capital
Countries
655
The exposure of a bank in all developing
countries combined is not necessarily a matter for
concern. The economic fortunes, financial behavior, and repayment capabilities of foreign
borrowers are highly diverse—probably more
diverse than those of domestic borrowers. High
concentration of a bank's loans in a single foreign
country is in principle a more valid point for
concern. Since the mid-1970s, U.S. banks on
average have maintained loan exposures in Brazil and Mexico that are exceeded only by their
claims on the United Kingdom or Japan but, of
course, are only a small fraction of the claims on
borrowers in the United States. The exposure of
U.S. banks in Brazil and Mexico has grown less
rapidly on average over the past few years than
their exposure with other developing-country
borrowers.
Just as there is diversity among countries in
the management of external debt, there is also
diversity in the performance of different categories of borrowers or credits within a particular
country. Policies that limit a government's ability to service its debt may not prevent privatesector borrowers from meeting their debt-service
obligations. Conditions that lead to disruption or
rescheduling of term loans may not cause serious
delays in the repayment of trade-related loans.
2
Balance of Payments
Borrowing
Needs
1
.3
.2
Objectives
and
Policies and objectives for balance of payments
adjustment by developing countries tend to determine their needs for external borrowing from
banks.
Alternative sources of financing have been and
are likely to remain less responsive to shifts in
current account deficits. Changes in external
reserves may act as a buffer to short-run variations in the current account and, thus, may
increase (as in 1972-73 and 1976-78) or relieve
(as in 1974-75 and 1980-81) the need for external
borrowing. For the longer run, the scope for
attracting external capital from new nonbank
sources—institutional investors, nonfinancial
corporate investors, direct public issues of bonds
on international capital markets—appears rather
narrow. That narrowness of alternative, nonbank
656
Federal Reserve Bulletin • September 1981
channels of finance has been a principal subject
of scrutiny for the multilateral World Bank-IMF
Development Committee that was established in
1974. Progress toward widening these channels
has been slow, and techniques proposed to
achieve faster results have encountered philosophical objections from governments of the
prospective investing and recipient countries.
Constraints on official and nonbank private
inflows of capital imply that decisions by developing countries to maintain high current account
deficits will require high ongoing levels of external borrowing from banks. A set of fiscal and
monetary policies and policies on wages, prices,
and exchange rates that produced a lower deficit
in the current account would, conversely, generate a lower level of borrowing.
Proponents of capital flows to developing
countries postulate that investment begets
growth and that net foreign savings, which finances the current account deficit, begets investment. However, there may be slippages in the
transmutation of foreign savings into incremental
investment. In particular, the tighter fiscal policy
that would help a country to achieve a lower
current account deficit would at the same time
tend to produce a higher level of domestic savings. There may also be uncertainty over the
value of benefits to be achieved from that incremental investment. Such slippages and uncertainty warrant careful reevaluation by national
authorities in light of the higher real cost that
borrowings from international capital markets
now appear to carry.
•
657
Profitability of Insured Commercial Banks
Barbara Negri Opper of the Board's Division of
Research and Statistics prepared this article.'
High and widely fluctuating interest rates during
1980 created opportunities for profit but also
potential for loss. In this environment, insured
commercial banks experienced relatively strong
profitability. Industrywide returns on assets and
on equity during 1980 nearly matched the decade
peak reached in 1979, and dollar profits slightly
surpassed the record set last year.
As a group, only the smaller institutions were
able to increase rates of return on assets from
1979. Small banks increased their interest margins by shifting asset allocations dramatically
toward money market instruments, which allowed them to reap short-run profits from an
inverted yield curve and to repair asset and
liability maturity imbalances caused by their
continued reliance on six-month money market
certificates (MMCs). At large banks, yields on
interest-earning assets increased sharply from
1979, but costs of interest-bearing liabilities increased even faster, cutting into interest margins. Large banks as a class were able to take
advantage of swings in market interest rates,
however, as profits on trading accounts exceeded those of a year earlier and more than offset
enlarged losses on securities transactions. Some
large banks were buffeted by these rate movements, however, and incurred trading-account
losses.
Table 1 summarizes, for all insured commercial banks, income and expenses relative to
average assets. Appendix table A.l presents
dollar amounts of income and expenses in detail.
Exposure to interest rate risk appeared to have
had a predominantly negative effect on net interest margins during 1980, despite providing periodic profit opportunities. Large banks that experienced increased margins held about equal
1. The data base was developed by Nancy Pittman, and
research assistance was provided by Mary McLaughlin.
amounts of rate-sensitive assets and liabilities;
other large banks, with reduced interest margins,
generally had an excess of rate-sensitive liabilities. Similarly, small banks whose interest margins increased had significantly closer alignment
of rate-sensitive assets and liabilities than banks
whose margins declined, although most small
banks had some excess of rate-sensitive liabilities. Because many interest rate relationships
were distorted at times during 1980, the timing of
asset growth within the year had an important
influence on changes in bank interest margins.
Noninterest income grew faster than assets
during 1980, due in part to fiduciary and service
income, as well as to the gains in trading accounts at money center and other large commercial banks. Operating costs also expanded rapidly and in many cases offset gains in noninterest
revenue. Loan loss provisions grew slightly fast1. Income and expense as percent of average assets,
all insured commercial banks, 1978-80'
Item
Gross interest earned
Gross interest expense
Net interest margin
Noninterest income
Loan-loss provision
Other noninterest expense
Income before tax
Other3
Net income
Cash dividends declared
Net retained earnings
1978
1979
1980
7.24
4.17
3.07
.74
.25
2.50
1.06
.29
-.02
.76
.26
8.62
5.50
3.12
.78
.24
2.54
1.12
.28
-.04
.80
.28
9.87
6.78
3.09
.89
.25
2.63
1.10
.28
-.03
.79
.29
.50
.52
.50
3.48
1,419
3.48
1,594
3.46
1,768
MEMO
Net interest margin,
taxable equivalent4
Average assets (billions of dollars) 1 ...
1. Average assets are fully consolidated and net of loan loss
reserves; averages are based on amounts outstanding at the beginning
and end of each year.
2. Includes all taxes estimated to be due on income, on extraordinary gains, and on securities gains.
3. Includes securities and extraordinary gains or losses ( - ) before
taxes.
4. For each bank with profits before tax greater than zero, income
from state and local obligations was increased by [1/(1 - f) - 11 times
the lesser of profits before tax or interest earned on state and local
obligations (t is the marginal federal income tax rate.) This adjustment
approximates the equivalent pretax return on state and local obligations.
658
Federal Reserve Bulletin • September 1981
er than assets industrywide, especially at small
banks.
With lower net interest margins prevailing on
foreign office business, and with that business
accounting for an increased fraction of consolidated assets, consolidated net interest margins
fell at commercial banks with foreign offices.
Gains in trading accounts and other noninterest
income only partially offset the decrease in net
interest margins, and consolidated profitability
of banks with foreign branches declined slightly
from 1979.
INTEREST
INCOME
Loan portfolio yields at all banks increased 170
basis points on average (table 2). Loan yields at
money center banks increased almost one-third
2. Rates of return on fully consolidated portfolios,
all insured commercial banks, 1978-80'
Percent
Item
1978
1979
1980
Securities, total
U.S. government
State and local government
Other
Loans, gross
Net of loan loss provision
Taxable equivalent2
Total securities
State and local
Total securities and gross loans ..
6.47
7.37
5.24
8.80
10.32
9.82
7.05
8.25
5.58
9.24
12.01
11.55
7.88
9.38
6.03
10.55
13.71
13.19
8.89
10.62
9.95
9.31
10.44
11.37
10.23
11.13
12.88
1. Calculated as described in the "Technical note," BULLETIN,
vol. 65 (September 1979), p. 704.
2. See note 4 to table 1.
faster than the industry average because floatingrate and short-term loans dominate their portfolios. Loan yields at small banks also increased.
At 155 basis points, the yield improvement at
small banks exceeded average increases recorded by all other nonmoney center groups. 2 Earlier
in the 1970s, changes in loan portfolio yields of
small banks lagged changes registered at other
banks. However, yields increased rapidly during
1980 as small banks took several actions to
protect near-term profitability in order to offset
the shift to higher-cost, more market-sensitive
2. Appendix table A.2 contains summary statistics by class
of bank. A similar table presented 1979 data (FEDERAL
RESERVE BULLETIN, vol. 66, September 1980, p. 705).
sources of funds. In their loan portfolios, small
banks shifted away from consumer loans, on
which usury ceilings tended to bind and turnover
to be slow, and toward business loans carrying
either short maturities or variable interest rates.
Returns from securities portfolios at all banks
increased 92 basis points after adjustment for
taxable equivalence. With about one-fifth of
bank securities portfolios maturing during 1980,
part of the increase in portfolio yield reflects
rollover of portfolios at higher market interest
rates. Another part reflects the impact of concentrating acquisitions in shorter maturities at interest rates above those prevailing on longer maturities. The shift toward shorter-term securities was
most pronounced at small commercial banks, at
which the proportion of outstanding securities
portfolios maturing within one year rose from 17
percent to 24 percent during 1980.
On average, banking industry assets allocated
to loans declined marginally during 1980 (table
3). Allocations to federal funds sold, security
resale agreements, and holdings of interest-bearing interbank balances increased, which is consistent with heightened variability in liability
interest costs and enlarged dependence on shortterm liabilities. This portfolio shift was most
pronounced at banks that experienced the greatest change in their liability structures. Acquisitions of money market assets and of short-term
government securities represented one-third of
the asset growth of small banks, far higher than
the fraction of outstanding assets of small banks
that these instruments represent. By contrast,
money center banks, funded by money market
instruments for many years, allocated an even
larger proportion of assets to loans in 1980 than a
year earlier.
Interest income scaled to average consolidated
assets increased 125 basis points for all insured
banks taken together and grew about one-fourth
faster at money center banks. At small banks,
interest income increased at about the industry
average, and unlike past periods of rising market
interest rates, increased faster than at larger
nonmoney center banks (chart 1). This heightened responsiveness resulted partly from the
asset reallocation described earlier and partly
from above-average asset growth, which allowed
small banks to acquire instruments carrying current market yields.
Profitability of Insured Commercial Banks
659
3. Portfolio composition as percent of total assets including loan loss reserves, all insured commercial banks,
1978-801
Average during year
Fully consolidated
Domestic
Item
Interest-earning assets
Loans
Securities
U.S. Treasury
U.S. government agencies
State and local governments
Other bonds and stocks
Gross federal funds sold and reverse RPs
Interest-bearing deposits2
MEMO: Average gross assets (billions of dollars)
1978
1979
1980
1978
1979
1980
79.2
53.3
21.3
7.7
3.2
9.8
.6
4.0
.6
80.4
56.0
20.0
6.6
3.4
9.5
.5
4.0
.4
80.2
55.1
20.1
6.4
3.7
9.4
.5
4.4
.6
82.4
54.6
18.4
6.5
2.7
8.3
.9
3.3
6.1
83.0
56.3
17.2
5.5
2.8
8.0
.8
3.4
6.2
82.9
55.4
17.0
5.3
3.0
7.8
.8
3.7
6.8
1,198
1,329
1,460
1,406
1,593
1,768
1. Percentages are based on aggregate data and thus reflect the
heavier weighting of large banks. Data are based on averages for call
dates in December of the preceding year and June and December of
the current year.
INTEREST
EXPENSE
Interest costs for liabilities not covered by deposit rate ceilings increased more than 200 basis
points during 1980 (table 4). Much of this increase reflects the behavior of market interest
rates affecting large certificates of deposit (CDs),
federal funds, and other liabilities issued in the
U.S. money markets. Interest costs on deposits
issued by foreign offices also rose rapidly, although they affected a much smaller proportion
of banking system liabilities.
Interest costs for savings and small time deposits increased 145 basis points at all banks, and
they increased even more at small banks. Since
fixed deposit ceilings were maintained well below market interest rates, growth in deposits
with variable rate ceilings, together with an increase in average market yields, accounted for
the rise in interest costs. The money market
certificate (MMC), carrying costs equal to the
discount rate on six-month Treasury bills, was
the dominant retail time deposit, increasing from
15 percent to more than 30 percent of bank
savings and small time deposits during the year.
Interest rates offered on MMCs increased on
average from IOV2 percent in 1979 to 12 percent
in 1980. The small saver certificate (SSC), authorized on January 1, 1980, and pegged to the
thirty-month Treasury yield, attracted $30 billion
of intermediate-term deposits, but inflows were
restrained during part of the year by the 11.75
percent interest "cap" imposed in March.
Continuing what has become a long-standing
2. Interest-bearing deposits first were reported on a fully consolidated basis in December 1978. The number shown for 1978 is an average
based on the reported December amount and estimates for the earlier
call report dates.
trend, demand deposits diminished in relative
importance as a source of funds and for the first
time financed less than one-fourth of total assets
at commercial banks (table 5). In the past, much
of the shifting from demand deposits seemed
attributable to sophisticated cash management
techniques of corporations and the U.S. government. In 1980, however, consumers also shifted
by substituting automatic transfer service (ATS)
accounts for demand deposits in response to
ATS plans marketed in anticipation of the nationwide extension of negotiable order of withdrawal
(NOW) accounts on January 1, 1981.3 This early
3. In 1980, commercial banks outside N e w York and N e w
England—where N O W accounts already existed—lost $12
billion of nontransaction savings accounts and $3 billion of
demand deposits of individuals, partnerships, and corporations; their interest-bearing transaction accounts grew $7
billion.
4. Rates paid for fully consolidated liabilities, all
insured commercial banks, 1978-80'
Percent
Item
1978
Time and savings accounts
Negotiable CDs2
Deposits in foreign offices
Other deposits
Subordinated notes and debentures....
Gross federal funds purchased and RPs ,
Other liabilities for borrowed money....
Total
MEMO: Not covered by regulatory ceilings
1979
1980
12.56
14.03
6.81
10.52
11.38
6.65
8.41
12.95
9.17
9.13
8.02
11.20
6.76
7.85
8.04
5.81
7.77
8.68
7.00
2
10.66
8.10
8.90
14.68
11.34
11.10
13.45
1. Calculated as described in the "Technical note," BULLETIN
(September 1979) p. 704.
2. Does not include nonnegotiable time deposits of $100,000 or
660
Federal Reserve Bulletin • September 1981
1. Components of interest margins
Percent of average assets
1). As expected, such costs rose fastest at money
center banks, reflecting especially large increases in money market rates. Uncharacteristic,
however, was the increase in interest costs at
small banks, which approached that at large
nonmoney center banks and exceeded that at
medium-sized banks. This rise reflected both the
shift out of demand balances into interest-bearing deposits, especially pronounced at small
banks, and the shift within interest-bearing deposits to escalating-cost MMCs.
NET INTEREST
NET INTEREST MARGINS
1970
1972
1974
1976
1978
1980
Size categories are based on year-end consolidated assets.
Gross interest income is adjusted for taxable equivalence. Net
interest margins are gross interest income adjusted for taxable equivalence minus gross interest expense.
Data are for domestic operations until 1976, when foreign office
operations of U.S. banks were consolidated into the totals.
shifting from consumer demand deposits to interest-bearing transaction accounts had some impact on commercial bank costs, hinting at the
larger effect likely after a full transition to NOW
accounts.
Interest costs scaled to average assets increased
at all size groups of commercial banks (chart
MARGINS
With interest costs increasing faster than interest
income, the average net interest margin of all
insured commercial banks fell slightly during
1980. Large banks experienced reductions in
interest margins; banks with less than $1 billion
in assets showed gains.
Interest margins of money center banks fell 8
basis points in 1980. Some of the decline may
reflect the increase in the share of assets in
foreign offices, at which margins tend to be lower
than at domestic offices. Some also may reflect
intensified domestic and foreign competition
from suppliers of short-term funds to major corporate borrowers, manifested by the spread of
loan pricing options favorable to borrowers. In
addition, variations in interest rates during the
year brought profound changes to relationships
between the prime rate and typical money center
bank funding costs; consequently, the timing
within the year when domestic liabilities matured
and had to be reissued had a material impact on
net interest margins.
Net interest margins of nonmoney center large
banks also fell in 1980. Some of these institutions
expanded their foreign office operations, and as
with money center banks, this alteration in business mix could have exerted downward pressure
on margins. In addition, many of these banks are
still adjusting to financing by a larger volume of
liabilities with costs sensitive to movements in
market rates of interest.
Although more small banks experienced erosion in net interest margins in 1980 than in 1979—
37 percent versus 29 percent—enough banks had
expanded margins to bring the average margin
for the entire group above that in 1979 (table 6).
Profitability of Insured Commercial Banks
661
5. Composition of financial liabilities as percent of total assets including loan loss reserves, all insured
commercial banks, 1978-801
Average during year
Fully consolidated
Domestic
Item
Financial claims
Demand deposits
Interest-bearing claims
Time and savings accounts
Large time2
Other domestic
Subordinated notes and debentures
Other borrowings
Gross federal funds purchased and
repurchase agreements
1978
1979
1980
1978
1979
1980
89.1
31.9
57.2
48.3
15.0
88.0
30.3
57.7
47.3
15.2
87.6
29.1
58.5
47.8
15.5
33.3
.5
1.1
32.1
.4
2.0
32.3
.4
1.9
90.2
26.9
63.3
55.2
12.7
14.5
28.1
.4
1.5
89.7
25.3
64.4
55.0
12.7
15.6
26.7
.4
2.4
89.1
24.0
65.1
55.5
12.8
16.1
26.7
.4
2.3
7.3
7.9
8.4
6.2
6.6
6.9
23.9
1,198
25.6
1,329
26.1
1,460
35.3
1,406
37.6
1,593
38.4
1,768
MEMO
Managed liabilities3
Average gross assets (billions of dollars)
1. Percentages are based on aggregate data and thus reflect the
heavier weighting of large banks. Data are based on averages for call
dates in December of the preceding year and June and December of
the current year.
2. Deposits of $100,000 and over issued by domestic offices.
3. Large time deposits issued by domestic offices, deposits issued
by foreign offices, subordinated notes and debentures, RPs, gross
federal funds purchased, and other borrowings.
By contrast, half of the large nonmoney center
banks experienced erosion in interest margins in
1980, about the same as last year, but those
losses were sufficient to reduce the average
margin for the group as a whole.
A number of balance-sheet characteristics differentiated banks with increased net interest
margins from others within groups. One is that
the average estimated fraction of assets exposed
to market interest rate changes (column 3 of table
6) was significantly smaller at banks with increased margins than at their peers. Also, though
not shown in the table, the fraction of assets
financed by rate-sensitive liabilities grew less at
nonmoney center banks with increased margins.
At small banks with improved margins, more-
6. Factors associated with the 1979-80 change in net interest margins, all insured commercial banks1
Percent except for number of banks
Rate-sensitivity 2
Assets,
year-end 1980
Number
(1)
Average interest margin3
Assets
(2)
Assets less
liabilities
(3)
1980
(4)
Asset growth
1979
(5)
Percent
change
(6)
HI
(7)
H2
(8)
Less than $25 million
Increased margins
Others
4,768
2,804
16.9
16.8+
-8.3
-11.9
5.47
4.61
4.70
5.09
16.4
-9.4
3.8
6.9
9.3
9.1 +
$25 million to $100 million
Increased margins
Others
3,077
1,971
14.3
13.0
-14.1
-16.8
5.15
4.33
4.72
4.66
9.2
-7.1
2.4
3.7
7.3
7.3+
729
599
20.3
16.6
-12.5
-16.0
4.73
4.08
4.38
4.42
7.9
-7.7
1.2
2.9
7.3
5.9
$100 million to $1 billion
Increased margins
Others
13 money center
Increased margins
Others
Others $1 billion or more
Increased margins
Others
5
8
58.7
57.6t
-3.0
-5.3+
2.02
2.15+
1.94
2.29
4.0
-6.2
8.5
4.6+
3.9
3.6+
79
78
42.8
37.4
.1
-6.2
3.80
3.42
3.52
3.73
7.9
-8.3
-.2
2.8
8.3
5.9*
1. Differences between means are statistically significant at the .01
level except when noted by an asterick (*), which are significant at the
.05 level, and a dagger (f), which are not within the .05 range.
2. Average, as a percent of total assets, on the December 1979 and
March, June, September, and December 1980 call dates. Rate-sensitive assets: interest-bearing deposits, federal funds sold, reverse RPs,
loans and government debt maturing in one year or less, and other
loans with floating rates. Small banks do not report the loan detail, so
their holdings of loans to financial institutions, construction loans, and
purpose loans are included. Rate-sensitive liabilities: large time deposits and foreign office deposits due in one year or less, federal funds,
RPs, MMCs, and other short-term borrowings.
3. Taxable equivalent, as a percent of average assets.
662
Federal Reserve Bulletin • September 1981
over, the estimated fraction of assets invested in
rate-sensitive instruments increased faster than
at their peers.
Finally, nonmoney center banks with improved interest margins grew significantly more
slowly than their peers during the first half of
1980 (columns 7 and 8, table 6). Within the first
half, the economy slumped and special credit
restraints were imposed; in association with
those events market interest rates peaked and
then dropped sharply. Speeds of adjustment varied among interest rates, causing distortions in
certain traditional relationships upon which profitable intermediation depended.
Chart 2 illustrates rate relationships for three
common, hypothetical, commercial bank transactions. One transaction is a one-month loan tied
to the prime rate and financed by reservable 30day CDs; that bar in the chart shows the annual
rate of net interest earned on that transaction
repeated monthly during 1980. The other two
transactions, more typical for small banks, involve net interest earned by issuing reservable
six-month MMCs at average interest rates prevailing each month. One bar shows the annualized net return from investing the proceeds of an MMC issued in that month in federal
funds, rolled over at the average funds rate in the
current and ensuing five months. Another bar
shows the net return from investing in a sixmonth loan yielding a fixed 16 percent interest,
such as a consumer loan. With net interest
margins of most small banks ranging between 4LA
percent and 5Vi percent, clearly the fixed-rate
transaction initiated during the first four months
of 1980 would have depressed the net interest
2. Net interest earned on selected
commercial bank transactions, 1980
Percentage points
margin of a typical small bank. Any federal
funds-MMC transaction entered into during the
first six months of 1980 would have resulted in
below-average net earnings. In both instances,
above-average net returns would have been associated with transactions consummated in the
summer and early fall. Banks' intrayearly growth
patterns clearly were material in determining
whether these shifting relationships would result
in gains or losses.
As in the previous two years, small banks
relying heavily on MMCs for their funding experienced significantly lower net interest margins
than those with below-average amounts of those
deposits. The difference in 1980 after adjustment
for taxable equivalence amounted to 79 basis
points (table 7). That difference incorporates the
much higher gross interest expenses, only partially offset by higher interest income, of the
group most intensively using MMCs. Unlike
earlier years, however, the two groups of small
banks did not differ in the rate of growth of total
assets. In 1980, the low-MMC group financed its
7. Comparison of operating results in 1980, small
insured commercial banks with greatest and least
reliance on MMCs 1
Means in percent
Quartile
Item
Growth in total assets (percent),
Income and expense scaled to
average consolidated assets
Interest income
Interest expense
Net interest margin, taxable equivalent
Noninterest income
Loan loss provision
Other noninterest expense
Profit before tax
Net income
As percent of year-end financial claims
Transactions balances
NOW, ATS
Passbook, small time except MMCs . . .
MMCs
Managed liabilities
Average change in 1980 (thousands of dollars)
Total financial claims
Transactions
NOW, ATS
Passbook, small time except MMCs
MMCs
Managed liabilities
Interest is at an annual rate.
Highest
Lowest
13.5*
13.6
9.93
5.69
4.69
.48
.27
2.79
1.66*
1.25*
26.3
.7
32.2
34.1
7.4
2,087
-16
107
-1,104
3,013
196
9.65
4.57
5.48
.84
.32
3.97
1.64
1.21
37.7
1.3
34.4
12.1
15.7
2,380
559
210
-411
1,339
893
1. Top and bottom quartiles, as determined by MMCs as a percent
of total financial claims at the end of 1980, of all banks with year-end
assets below $100 million.
The differences between means of the two groups are all statistically
significant at the 1 percent level except where indicated (*).
Profitability of Insured Commercial Banks
3. Net loan losses charged1
asset growth by issuing more transaction accounts and managed liabilities (large time deposits) and by retaining more passbook and nonMMC small-denomination time deposits than the
group that relied principally on MMCs. This
difference in funding sources also carried noninterest implications; the low-MMC group earned
higher rates of noninterest income, perhaps in
association with deposit service fees, and paid
higher noninterest expenses, presumably to service the higher volume of transaction accounts.
In 1980, the interest and noninterest differences
between these two groups were offsetting; their
profit rates were about equal.
LOAN LOSSES
INCOME AND
AND OTHER
EXPENSE
663
Percent of average assets
T97QA
1
\912
'l974
>
'1976'
1978'
'l980
1. As a percent of average consolidated assets net of loan-loss
reserves, all insured commercial banks.
large banks, the increased net personal loan
charge-offs were not associated with growth in
outstanding consumer loans. Possibly some of
the personal loan charge-offs experienced during
1980 might have occurred earlier except that
some 1979 bankruptcies were postponed to benefit from liberalized personal bankruptcy provisions that became effective October 1, 1979;
some other portion of these charge-offs might be
attributed to the liberalization per se.
Most categories of noninterest income and
expense increased relative to assets, in about
equal amounts at large and small banks. Small
gains were realized in fiduciary income, and at
large banks trading-account profits grew. Service
fees on deposits increased about 4 basis points
relative to average assets at all size groups other
than money center banks, presumably in associa-
NONINTEREST
Bank loan loss provisions grew, but did not keep
pace with increases in actual losses charged net
of recoveries (table 8). All size groups experienced trivial changes in cash recoveries and
substantial increases in loan charge-offs. Net
loan losses increased relative to assets at all size
groups (chart 3).
At insured commercial banks with assets exceeding $300 million, the dollar increase in loan
losses charged net of recoveries is about equally
attributable to loans to individuals and to business loans extended to U.S. addressees.4 At these
4. Information on the sectors in small bank loan portfolios
that experienced credit deterioration is not available.
8. Loan portfolio losses and recoveries, all insured commercial banks, 1979-80
Millions of dollars, except as noted
Net losses
Year, and size of bank1
Losses
charged
Recoveries
Dollar
amount
Percent of
loans2
3,731
823
758
1,197
256
218
2,534
567
540
.28
.30
.30
3,764
783
745
860
1,290
329
394
531
897
.20
.34
895
1,341
4,852
1,006
988
1,276
264
245
3,576
742
743
.36
.39
.38
4,452
889
912
1,089
1,769
316
451
773
1,318
.25
.45
1,036
1,615
1979
All banks
Less than $100 million
$100 million to $1 billion
$1 billion or more
Money center
Others
1980
All banks
Less than $100 million
$100 million to $1 billion
$1 billion or more
Money center
Others
1. Size categories are based on year-end fully consolidated assets.
2. Average of beginning- and end-of-year loan balances.
Loan loss
provision
664
Federal Reserve Bulletin • September 1981
tion with the introduction of interest-bearing
consumer transaction accounts. Large banks,
particularly the money center institutions, realized gains from other service income, a category
that includes loan service fees as well as fees for
miscellaneous banking services.
Wage and salary expenses increased at all size
categories of banks; those expenses increased 7
basis points relative to average assets at banks
with less than $1 billion in assets, and by about
half that at larger banks. Occupancy costs and
other operating costs also increased at all size
groups, adding about 8 basis points to small bank
expense ratios but substantially less to those of
large banks.
both large and small banks (table 10). At most
groups of commercial banks, and for all banks
taken together, the increase in equity capital was
sufficient only to keep pace with assets. Equity
capital ratios consequently remained about level
with those in 1979. One exception is small banks,
at which earnings retention exceeded asset
growth and the capital-to-assets ratio grew from
8.1 to 8.4 percent. With this leverage reduction,
returns on equity at small banks increased less
than asset returns. In another exception, asset
growth at the money center banks slightly outpaced equity additions; with a small increase in
leverage, returns on equity increased despite
stability in the return on average assets.
PROFITABILITY
INSURED
AND
DIVIDENDS
U.S.
WITH FOREIGN
Average returns on assets for all commercial
banks as a group declined marginally in 1980.
Improved rates of return at small banks were
about offset by lower profitability at large nonmoney center banks. Among other size groups,
1980 returns on assets were maintained at 1979
levels (table 9).
Rates of return on assets showed more dispersion in 1980 than in 1979, a change not apparent
from the relative stability in overall average rates
of return. The rate of loss incurred by banks in
the lowest one percentile of peer group profitability increased sharply compared with 1979,
particularly at banks with more than $25 million
in assets. In addition, more banks incurred losses
than in 1979. At the same time, profitability rates
of banks in the top fifth and first percentiles were
close to one-tenth higher in 1980 than in 1979 at
all except the largest banks, at which returns
earned by the best performers were unchanged
from last year.
In aggregate, cash dividends increased somewhat faster than assets. At small banks, growth
in dividends kept pace with earnings. At other
nonmoney center banks, however, dividends increased faster than income and retained earnings
scaled to average assets were lower than in 1979.
During 1980 little equity was attracted from
external sources, continuing the recent pattern
associated with extremely high equity capital
costs. Retained income generated more than
four-fifths of the increase in equity during 1980 at
COMMERCIAL
BANKS
OFFICES
At the end of 1980, 178 insured U.S. commercial
banks had foreign offices or Edge Act or Agreement corporations and held consolidated assets
of $1.1 trillion.5 This aspect of U.S. commercial
banking grew in importance during the year: the
number of banks with foreign offices increased
by 14, and excluding intracompany balances,
the proportion of consolidated assets held at
foreign offices increased from 30!/2 percent to 32
percent. Foreign offices and international business represented a larger share of consolidated
returns on assets than in 1979.
During 1980, liabilities issued in domestic markets often carried lower reserves-adjusted interest costs than those issued abroad. At the end of
the year, domestic offices of these banks had
outstanding a net $23 billion in funds advanced to
their own foreign offices, an increase of $20
billion from the beginning of the year. Reflecting
the enlarged role of domestic offices as a funding
source, deposits issued to third parties by foreign
offices dropped from 87 to 83 percent of total
liabilities during the year; at domestic offices the
proportion of assets allocated to intracompany
business more than doubled to 3Vi percent (table
11).
The predominant loan customers of foreign
5. Appendix table A.3 shows dollar amounts of income
and expenses of banks with foreign offices.
Profitability
of Insured Commercial
Banks
665
9. Profit rates, all insured commercial banks, 1975-80
Percent
Type of return and size of bank 1
Return on assets2
All banks
Less than $100 million
$100 million to $1 billion
$1 billion or more
Money center
Others
Return on equity3
All banks
Less than $100 million
$100 million to $1 billion
$1 billion or more
Money center
Others
1. Size categories are based on year-end fully consolidated assets.
2. Net income as a percent of the average of beginning- and end-ofyear fully consolidated assets net of loan loss reserves.
1980
1975
1976
1977
1978
1979
.69
.89
.75
.70
.94
.78
.71
.98
.82
.76
1.04
.90
.80
1.15
.96
.79
1.18
.96
.56
.59
.54
.60
.50
.62
.53
.68
.56
.72
.56
.66
11.8
11.5
11.1
11.5
11.8
11.1
11.8
12.4
12.0
12.9
13.2
13.2
13.9
14.1
13.9
13.7
14.2
13.7
13.8
11.2
12.3
10.6
11.4
11.2
12.8
12.5
14.0
13.5
14.4
12.7
3. Net income as a percent of the average of beginning- and end-ofyear equity capital,
10. Sources of increase in total equity capital, all insured commercial banks, 1975-801
Millions of dollars, except as noted
Net retained income 2
Net increase
in equity capital
Increase in equity capital
from retained income (percent)
Year
1975....
1976....
1977....
1978....
1979....
1980
Total
Large
banks 3
Total
Large
banks 3
Column 1/
column 3
Column 2/
column 4
(1)
4,224
4,834
5,599
7,019
8,350
8,859
(2)
1,690
1,909
2,157
2,947
3,616
3,843
(3)
5,526
7,254
7,094
8,148
9,952
10,828
(4)
2,396
3,371
2,939
3,304
4,291
4,567
(5)
76
67
79
86
84
82
(6)
71
57
73
89
84
84
1. In 1976, equity capital was affected by one-time accounting
changes in the treatment of loan loss and valuation reserves. Data for
1976 have been adjusted for that definitional change.
2. Net income less cash dividends declared on preferred and
common stock.
3. Banks with fully consolidated assets of $1 billion or more.
11. Assets and liabilities, U.S. insured commercial banks with foreign offices, December 31, 1980
Domestic offices
Foreign offices
Item
Billions of
dollars
Percent of
total
Billions of
dollars
Percent of
total
100
15
3
15
54
12
354
131
100
37
Other1
769
118
26
116
415
94
11
185
27
3
52
8
Total liabilities
Deposits
Noninterest-bearing 2
Interest-bearing
Savings and small time
Time over $100,000
Nondeposit financial claims
Federal funds purchased and RPs
Subordinated notes and debentures
Other liabilities for borrowed money
Other1
716
531
225
306
147
159
128
102
4
22
57
100
74
31
43
21
22
18
14
1
3
8
353
294
17
277
n.a.
n.a.
1
100
83
5
78
n.a.
n.a.
5
Total assets
Cash and due from banks
Gross federal funds sold and reverse RPs
Securities
1. Of these amounts, $27 billion represents net funds advanced by
domestic offices to their own foreign offices and $4 billion represents
net funds advanced to domestic offices by their own foreign offices.
*
*
15
15
43
*
*
*
4
12
2. Demand deposits in domestic offices, noninterest-bearing deposits in foreign offices,
* Less than $500,000 or 0.5 percent.
n.a. Not available.
666
Federal Reserve Bulletin • September 1981
branches continued to be borrowers domiciled
outside the United States (table 12). Depositors
identifiable as foreign residents—primarily banks
located abroad—accounted for more than half of
total foreign office deposits.
12. Customers, U.S. insured commercial banks with
foreign offices, December 31, 1980
Billions of dollars
Domestic
offices
Foreign
offices
421
187
109
41
20
10
11
174
166
8
67
3
27
7
35
1
27
7
109
6
103
6
25
5
To U.S. addressees
To non-U.S. addressees
Not specified
186
21
214
7
155
25
Total deposits
Individuals, partnerships, and
corporations
U.S. federal, state, and local
governments
Foreign governments and official
institutions
Commercial banks in the
United States
Banks in foreign countries
Certified and officers' checks
531
294
428
110
Item
Total loans, gross
Real estate
To financial institutions
In the United States
Outside the United States
Not specified
Commercial and industrial
To U.S. addressees
To non-U.S. addressees
To individuals
To foreign governments
Other
MEMO
27
1
9
33
48
11
9
18
130
2
The gross rate of interest earned on invested
assets increased 132 basis points at domestic
offices and double that at foreign offices (table
13). Rates of interest paid for interest-bearing
liabilities increased even faster than asset returns
at domestic offices, but at foreign offices they
lagged improvement in asset yields. Net interest
14. Interest income and expense as percent of
average assets, U.S. insured commercial banks
with foreign offices, 1979 and 1980
Domestic offices
Gross interest income...
Gross interest expense . .
Net interest margin . . .
Taxable equivalent 1 .
Percent
Domestic offices
Foreign offices
Item
Loans
Interest-earning assets 2 ...
Interest-bearing deposits
Interest-bearing claims . . .
1979
1980
1979
1980
12.30
11.92
8.36
9.31
13.82
13.24
10.11
11.10
13.21
12.35
11.38
11.32
16.00
15.06
14.03
13.97
1. Calculated as described in the "Technical note," BULLETIN
(September 1979), p. 704.
2. Taxable equivalent approximated for domestic offices according
to the method described in table 1, note 4.
1979
1980
1979
1980
7.38
4.57
2.82
3.13
8.67
5.79
2.88
3.23
9.46
8.19
1.26
1.26
12.37
10.99
1.39
1.39
1. Approximated for domestic offices according to the method
described in table 1, note 4.
margins at foreign offices increased relative to
total assets, but remained less than half the level
at domestic offices (table 14). At domestic offices, net interest margins also increased relative
to total assets, notwithstanding the faster increase in rates paid for funds over rates of return.
Interest-bearing liabilities financed less than
three-fifths of domestic office assets, so the
impact of the relatively sharp increase in those
interest costs was diluted.
On a consolidated basis, gross interest expenses grew somewhat faster than gross interest
earnings and consolidated net interest margins of
banks with foreign offices were lower than last
year (table 15). Increases in noninterest income—gains in trading accounts as well as increased income from nondeposit service
charges—exceeded those in noninterest expenses, and before-tax profitability declined by
less than the shrinkage in interest margins.
•
15. Consolidated income and expenses, U.S. insured
commercial banks with foreign offices, 1979-80
Percent of average assets
Item
13. Rates of return and rates paid for funds, U.S.
insured commercial banks with foreign offices,
1979 and 19801
Foreign offices
Item
1979
1980
Gross interest income
Gross interest expense
Net interest margin
Taxable equivalent 1
8.75
6.25
2.50
2.74
10.08
7.65
2.43
2.68
Noninterest income
Loan loss provisions
Other noninterest expense
Income before tax
Foreign offices2
Domestic offices2
.84
.22
2.17
.95
.22
.73
.98
.24
2.25
.92
.26
.66
.63
.16
.47
.61
.19
.42
International business 2
Domestic business 2
1. Approximated for domestic offices according to the method
described in table 1, note 4.
2. See table A.3. Reflects amounts attributed, giving full allocation
of income and expense.
Profitability
of Insured Commercial
Banks
667
A.l Report of income, all insured commercial banks
Amounts shown in millions of dollars
Item
1972
1973
1974
1975
1976
1977
1978
1979
1980
Operating Income—Total
Interest
Loans
Balances with banks
Federal funds sold and securities purchased under
resale agreement
Securities (excluding trading accounts)
Total income
U.S. Treasury and U.S. government agencies and corporations
States and political subdivisions
Other 1
Trust department
Direct lease financing
Service charges on deposits
Other charges, fees, etc
Other operating income
40,065 52,794 67,872 66,285 80,388 90,069 113,170 149,795 190,109
Operating expenses—Total
Interest
Time and savings deposits
Time CD's of $100,000 or more issued by domestic offices
Deposits in foreign offices
Other deposits
Federal funds purchased and securities sold under
repurchase agreements
Other borrowed money 2
Capital notes and debentures
Salaries, wages, and employee benefits
Occupancy expense 3
Provision for loan losses
Other operating expenses
32,836 44,113 58,645 57,313 70,466 78,484
98,104 131,950 170,675
13,781 19,747 27,777 26,147 34,894 38,701
n.a.
n.a. 7,083 6,732
n.a.
n.a.
n.a.
n.a. 8,745 10,216
n.a.
n.a.
n.a.
n.a. 19,066 21,753
n.a.
n.a.
50,054
11,693
14,559
23,802
71,693
18,105
24,523
29,065
98,130
24,753
34,941
38,436
7,247
1,452
445
18,654
5,559
3,499
11,194
12,218
3,162
497
21,465
6,255
3,764
12.796
16,707
4,380
541
24,565
7,325
4,453
14,573
15,067
4,155
10,911
-225
45
10,731
17,843
4,736
13,109
-350
39
12.797
19,435
5,009
14,426
-492
17
13,950
3,299
3,714
4,449
5,091
13,721 13,964 14,216 14,372 14,397 14,397
738
857
987 1,052 1,123 1,257
14,380
1,418
14,352
1,593
14,421
1,768
Income before taxes and securities gains or losses
Applicable income taxes
Income before securities gains or losses
Net securities gains or losses ( - ) after taxes
Extraordinary charges ( - ) or credits after taxes
Net income
Cash dividends declared
25,498 35,213 46,942 43,197 51,471 58,881
n.a.
n.a.
n.a.
n.a. 4,459 4,860
1,023
2,474
2,471
3,664
6,106
8,750
8,329
4,520
3,490
319
1,366
n.a.
1,256
1,079
1,512
9,138 10,344 12,201 14,333 15,140
4,905 5,428 6,758 8,362 8,835
3,861 4.449 4,911 5,116 5,338
967
532
855
467
372
1,460 1,506 1,600 1,795 1,980
n.a.
534
699
n.a.
n.a.
1,320 1.450 1,547 1,629 1,797
1,247 1,405 1,647 2,175 2,404
1,942 2,530 3,811 2,011 1,903
16,432
9,335
6,003
1,094
2,138
862
2,039
2,930
2,495
18,755
10,630
6,928
1,197
2,375
1,073
2,517
3,635
2,831
22,968
13,400
8,131
1,437
2,738
1,371
3,173
4,352
4,059
1,425
115
212
9,040
2,658
964
4,640
3,695
9,227
2,084
7,143
-87
5,630
2,191
2,423
18
1,979
3,883 5,970 3,313 3,305 4,536
912
499
374
665
816
280
253
292
343
391
10,076 11,526 12,624 14,686 16,276
2,970 3,396 3,837 4,464 4,959
1,253 2,271 3,578 3,650 3,244
5,432 6,514 7,149 8,456 9,561
8,681
2,120
6,560
-27
22
6,555
7,229
1,708
5,522
90
2,283
75,948 101,942 126,663
6,662 10,561 16,035
7,068
8,973
1,790
7,182
35
32
7,249
9,922 11,585
2,287 2,829
7,635 8,756
190
95
24
47
7,849
2,760
3,025
3,029
12
MEMO
Number of banks
Average fully consolidated assets (billions of dollars)
1. Includes interest income from other bonds, notes, debentures,
and dividends from stocks.
2. Includes interest paid on U.S. Treasury tax and loan account
balances, which were begun in November 1978.
3. Occupancy expense for bank premises plus furniture and equipment expenses minus rental income received for bank premises,
n.a. Not available.
NOTE. For " N o t e s on comparability of commercial bank income
data before 1976," see BULLETIN, vol. 64 (June 1978), p. 446.
668
Federal Reserve Bulletin • September 1981
A.2 Earnings, portfolio composition, and interest rates, all insured commercial banks, 1980'
Assets
Item
All
Less than
$100 million
$100 million
to $1 billion
$1 billion or more
Money center
Others
Balance sheet (as percent of average consolidated assets)
Interest-earning assets
Loans
Securities
U.S. Treasury
U.S. government agencies
State and local governments
Other bonds and stock
Gross federal funds sold and reverse RPs
Interest-bearing deposits
82.9
55.4
17.0
5.3
3.0
7.8
.8
3.7
6.8
89.4
55.9
27.8
9.2
6.3
11.8
.5
5.5
.2
87.2
55.4
25.2
7.9
4.4
12.3
.6
5.4
1.3
78.0
55.4
7.2
2.2
.9
2.8
1.4
1.6
13.7
81.1
55.0
15.0
4.5
2.3
7.7
.5
3.6
7.4
Financial claims
Demand deposits
Interest-bearing claims
Time and savings deposits
Large time
In foreign offices
Other domestic
MMCs
Subordinated notes and debentures
Other borrowings
Gross RPs and federal funds purchased
MEMO: Managed liabilities
89.1
24.0
65.1
55.5
12.8
16.0
26.7
8.2
.4
2.3
6.9
38.4
89.8
26.7
63.1
61.4
9.5
0
52.0
17.4
.2
.4
1.0
11.1
90.7
28.8
62.0
55.2
14.4
.2
40.6
12.2
.4
.9
5.4
21.3
87.8
17.5
70.3
57.8
11.1
40.3
6.4
1.8
.2
4.2
8.2
63.9
89.1
26.1
63.0
49.7
15.7
11.4
22.6
6.6
.6
2.4
10.4
40.4
Effective interest rates (percent)
On securities
State and local governments
On loans, gross
Net of loan loss provision
Taxable equivalent
Securities
Securities and gross loans
For time and savings deposits
Negotiable CDs
In foreign offices
Other deposits
For managed liabilities
For all interest-bearing liabilities
7.88
6.03
13.71
13.19
7.89
5.80
12.43
11.90
7.64
5.82
12.79
12.26
8.83
6.95
14.95
14.56
7.67
6.11
13.85
13.23
10.23
12.88
9.98
11.60
10.00
11.91
11.25
14.52
10.29
13.08
12.56
14.03
8.10
13.45
11.10
11.66
12.13
12.99
8.06
12.48
9.50
13.37
13.94
8.29
13.73
13.07
12.66
14.37
7.72
13.63
11.36
8.36
11.66
8.89
Earnings and expenses (as percent of average consolidated assets)
Gross interest income
Gross interest expense
Noninterest income
Loan loss provision
Other noninterest expense
Profits before tax
Other
Dividends
Retained income
MEMO: Net interest margin, taxable equivalent
1. See notes to tables in the text.
9.87
6.78
3.09
.89
.25
2.63
1.10
.28
-.03
.79
.29
.50
9.67
5.36
4.31
.64
.26
3.12
1.57
.36
-.03
1.18
.31
.87
9.47
5.62
3.85
.82
.26
3.20
1.20
.22
-.03
.96
.36
.60
10.40
8.40
2.00
.96
.19
1.83
.94
.36
-.01
.56
.22
.34
9.71
6.76
2.95
1.01
.30
2.76
.90
.19
-.05
.66
.29
.37
3.46
4.85
4.40
2.15
3.31
Profitability
of Insured Commercial
Banks
669
A.3 Income attributable to international business of U.S. commercial banks with foreign offices, 1980
Millions of dollars
Item
1
Amount
Pretax income attributable to foreign offices
Plus: Pretax income attributable to international business conducted in domestic offices
Less: adjustment amount 2
Pretax income attributable to international business
Less: All income taxes attributable to international business
Net income attributable to international business
2,701
966
203
3,464
1,519
1,945
MEMO
Provision for possible loan losses attributable to international business
Noninterest income attributable to foreign offices'
Noninterest income attributable to international business
Noninterest expense attributable to foreign offices'
Noninterest expense attributable to international business
Intracompany interest income attributable to international business
Intracompany interest expense attributable to international business
Interest income of domestic offices from foreign-domiciled customers
Fully consolidated
Pretax income
Total applicable taxes
Net income 3
Average total assets
1. Including Edge Act and Agreement subsidiaries.
2. Reflects the amount necessary to reconcile the preceding two
amounts with pretax income attributable to international business.
384
1,769
2,276
3,572
4,340
4,585
6,021
2,891
9,626
2,995
6,326
1,043,494
For example, net income of foreign offices from business with U.S.domiciled customers would be included here.
3. After gains and losses from securities transactions and extraordinary items.
671
Changes in Bank Lending Practices, 1979-81
This article was prepared by Warren T. Trepeta
of the Board's Division of Research and Statistics.1
According to the Senior Loan Officer Opinion
Survey on Bank Lending Practices (LPS), large
banks generally relaxed their nonprice terms of
credit in the second half of 1980 and in the first
three quarters of 1981.2 This policy has reversed
the trend toward more restrictive nonprice lending terms that had prevailed from early 1978 to
mid-1980.
The Federal Reserve from time to time publishes the results of the senior loan officer survey
in the B U L L E T I N . The previous article analyzed
the eleven surveys from February 1977 through
August 1979 ( F E D E R A L R E S E R V E B U L L E T I N , vol.
65, October 1979, pp. 797-815). This article discusses the eight surveys from November 1979
through August 1981.3 It also refers to selected
data from the Survey of Terms of Bank Lending
(STBL).4 Quantitative results from the STBL on
the characteristics of business loans made by 48
3. Statistical summaries of these surveys appear in the
appendix. Table A7 reports February 1981 responses to the
revised survey's six core questions from only those banks
remaining in the current LPS panel in order to permit a
comparison of survey results for February with those for May
and August 1981.
4. First conducted in February 1977, the S T B L gathers
information on the gross volume and on the rate and selected
nonrate characteristics of short-term (less than one year) and
long-term (one year or more) business loans extended during
the first full week of the middle month of each quarter. The
STBL panel includes 48 large commercial banks, of which 35
also respond to the LPS, and a stratified sample of other
banks, from which estimates for all commercial banks are
derived. The S T B L also obtains data on construction and
land development loans and loans to farmers. The results of
the most recent STBL are shown in the Financial and
Business Statistics of the BULLETIN.
1. Growth of business loans excluding bankers
acceptances at commercial banks, 1978-81
1. Richard Field and Carol Keyt provided research assistance for the article.
2. The Federal Reserve has conducted a quarterly survey
of changes in lending practices at selected commercial banks
since 1964. These surveys, which are conducted on the 15th
of the middle month of each quarter, have provided qualitative information on past and prospective changes in business
loan demand, adjustment of nonrate features of lending to
businesses, and changes in banks' willingness to extend
commercial and industrial loans and other types of credit.
Through February 1981, the survey panel included roughly
120 banks. As of September 1980, almost one-fourth of the
panel had domestic assets of $5 billion or more, two-thirds
had assets between $1 billion and $5 billion, and 9 percent had
assets under $1 billion. In May 1981, the panel was reduced to
60 members of the former sample, distributed about evenly
across Federal Reserve Districts. As of September 1980, twofifths of the revised panel had domestic assets of $5 billion or
more, and the remainder had assets between $1 billion and $5
billion. Through February 1981, members of the LPS panel
were asked to complete a reporting form containing 22
questions. Since then, Reserve Bank officers familiar with
bank lending practices have conducted telephone interviews
with the reduced panel of senior loan officers. Each quarter,
respondents are asked 6 core questions retained from the
former 22. In addition, when appropriate, the survey will
include supplemental questions addressing special issues in
bank lending practices.
Seasonally adjusted annual rate.
Year and
quarter
All commercial Large banks' Other banks2
banks
1978
Q1
Q2
Q3
Q4
21.7
16.5
11.8
14.4
22.6
20.1
7.3
6.9
21.5
11.8
17.4
23.9
1979
Q1
Q2
Q3
Q4
21.0
18.1
19.5
8.6
17.8
23.0
22.3
.8
24.4
12.5
16.1
18.0
18.6
-10.7
14.3
24.2
20.3
-11.3
15.7
20.5
16.9
-10.4
13.1
28.5
5.8
9.0
20.9
-4.2
18.3
25.3
17.2
-1.0
15.5
1980
Qi
Q2
Q3
Q4
1981
Ql
Q2
July-Augustc
1. Domestically chartered weekly reporting banks with domestic
assets, as of December 31, 1977, of $750 million or more.
2. Defined as domestically chartered banks with assets of less than
$750 million plus foreign-related banking institutions in the United
States.
e Estimated.
672
Federal Reserve Bulletin • September 1981
large banks usually conform with LPS results on
qualitative changes in lending practices at large
banks. However, STBL data for other banks
correspond less closely with LPS results, suggesting—along with the frequently disparate
rates of growth of business loans at large and
other banks (table 1)—that business loan demand
and credit policies may differ considerably
among banks of different size and type.
Large banks exhibited some resistance to strong
business loan demand, with the number of LPS
respondents that reported a tightening of terms
on commercial and industrial loans exceeding the
number that indicated an easing in each of the
first three surveys of 1979. This movement toward restrictive credit policies was less widespread than that reported throughout 1978, however, as both market interest rates and the prime
rate stabilized after a substantial climb (chart).
1979:4 TO 1980:1
A PERIOD OF FURTHER
Selected measures of the cost of credit
RESTRAINT
Percent
During the first three quarters of 1979, large
weekly reporting banks accelerated their business lending from the already robust pace of
1978, further increasing their reliance on costly
borrowed funds to finance asset growth (table 2).
2. Selected balance sheet ratios at large commercial
banks, 1976-81'
Period
1976:4
1977:4
1978:4
Borrowing to
selected assets2
Liquid assets3 to
liabilities
30.1
30.6
35.2
13.1
13.8
10.4
38.1
38.3
38.9
40.5
11.7
12.0
11.7
10.7
1979
Qi
Q2
Q3
Q4
1980
Qi
Q2
Q3
Q4
39.7
40.2
39.5
40.2
10.2
9.8
10.0
9.7
41.4
42.3
43.8
10.1
10.0
10.4
1981
Qi
Q2
Q3
1. Monthly averages of Wednesday figures for middle month of
quarter.
2. Borrowing includes gross liabilities of banks to their foreign
branches, all CDs of $100,000 or more, net federal funds purchased
and security repurchase agreements, and all other liabilities for
borrowed money other than Treasury tax and loan accounts and
borrowings from Federal Reserve Banks. Selected assets include all
assets less federal funds sold and cash items in the process of
collection.
3. Liquid assets include Treasury and other securities maturing in
one year or less, loans to brokers and dealers and domestic commercial banks, holdings of bankers acceptances, and gross sales of federal
funds. Liabilities are total liabilities less capital accounts, valuation
reserves, and demand deposits due to banks.
NOTE. Beginning 1979:1, the panel of large banks was changed to
include only those banks with assets of $750 million or more on
December 31, 1977. While the number of banks reporting thus fell
from 317 to 171, the panel's share in assets of the banking system as a
whole dropped only slightly.
1978
1979
1980
1981
The 90-day commercial p a p e r r a t e has been c o n v e r t e d f r o m
a discount-rate basis to a nominal annual yield.
In the fourth quarter of 1979, borrowing by
nonfinancial corporations dropped sharply; a reduction in internally generated funds was more
than offset by decreases in inventories and in net
additions to holdings of financial assets. The
decline in borrowing occurred primarily in the
short- and intermediate-term area, in the form of
a runoff of nonfinancial commercial paper and a
substantial reduction in growth of business loans
at banks. As the fourth quarter began, the Federal Reserve announced several measures to restrain growth of money and credit, including an
increase of 1 percent in the discount rate and a
marginal reserve requirement of 8 percent on
increases over base-period levels in managed
liabilities issued by large member banks and by
U.S. branches and agencies of foreign banks. In
Changes in Bank Lending Practices,
addition, the System adopted a new operating
procedure emphasizing reserve aggregates, rather than the federal funds rate, as the instrument
of monetary control. With this evidence of the
Federal Reserve's intent to restrain monetary
expansion, and with large banks experiencing a
sharp drop in liquidity and in growth of core
deposits, the number of LPS respondents reporting tighter terms on business loans and reduced
willingness to make loans in every category
showed a marked increase. Restrictive measures
included firmer standards to qualify for the prime
rate and for given spreads above prime, larger
compensating-balance requirements, and stricter
review of credit applications from new customers. In addition, a substantial number of banks
reported more stringent policies toward established customers for the first time since November 1978.
1979-81
673
In November 1979 well over half the LPS
panel reported a reduced willingness to make
both short- and long-term business loans at fixed
rates. Correspondingly, STBL data for November indicated declines of almost 10 percentage
points in the proportions of new business loans
made at fixed rates in both maturity categories at
48 large banks (table 3). At other banks, the
fraction of long-term loans made at fixed rates
registered an even greater decline, while the
figure for shorter maturities was essentially unchanged.
Consistent with the firming of standards to
qualify for the prime rate reported in the LPS,
STBL data showed an increase at other than the
48 large banks in the spread over prime of the
weighted-average interest rate on short-term
business loans made at or above prime (table 3).
At the 48 large banks, however, this spread was
3. Selected terms of commercial and industrial loans, 1979-81
Percent unless noted otherwise
Maturity, by
type of bank
1979
Feb.
May
1980
Aug.
Nov.
Feb.
May
1981
Aug.
Nov.
Feb.
May
.41
.83
.78
.91
.33
.78
1.81
2.76
.65
1.77
Weighted-average interest rate less the prime
rate on loans made at or above prime1
Short-term2
48 large banks
Other banks
.68
.81
.70
.87
.60
.74
.58
.82
.58
.78
.74
1.00
.60
.96
Weighted-average difference between prime rate and interest
rate on loans made below prime1
Short-term
48 large banks
Other banks
.98
1.49
.87
1.52
.58
1.07
1.18
1.75
1.23
2.11
4.14
2.47
1.08
1.20
.65
1.77
Loans made below prime
Short-term
48 large banks
Other banks
34.2
30.7
39.8
24.6
37.2
21.2
19.8
26.6
50.0
15.3
53.1
26.8
57.9
16.2
20.3
16.0
71.4
22.6
38.0
31.2
Loans made on a fixed-rate basis
Short-term
48 large banks
Other banks
36.5
59.5
42.6
63.1
39.4
63.3
30.3
64.5
45.4
55.6
46.3
64.3
68.4
57.9
45.4
56.1
67.2
50.7
51.8
49.4
Long-term
48 large banks
Other banks
23.5
52.5
23.6
70.6
22.7
69.8
13.5
53.1
19.8
55.8
15.0
44.0
19.8
51.2
13.2
51.8
24.7
28.5
17.0
33.1
1.3
2.3
1.0
2.7
1.1
2.4
Weighted-average maturity
Short-term
48 large banks
Other banks
2.2
2.7
1.9
2.6
1.7
2.4
1.9
2.7
1.4
2.5
1.7
3.0
1.1
2.8
Long-term
48 large banks
Other banks
44.5
50.7
46.3
49.4
37.9
49.8
54.6
38.3
47.2
35.9
46.6
36.7
51.1
37.8
1. Interest rate spreads, expressed as differences between simple
annual rates, are weighted by the dollar volume of loans. The relevant
prime rate is the prime reported by individual banks in the Survey of
52.4
38.2
46.2
50.4
51.7
47.8
Terms of Bank Lending, rather than the widely quoted prevailing
prime.
2. Loans with an original maturity of less than one year.
674
Federal Reserve Bulletin • September 1981
essentially unchanged. Meanwhile, an increase
occurred at the 48 large banks in the difference
between the prime rate and the weighted-average
interest rate on below-prime, short-term business loans.
The results for the large banks appear to
reflect a spread of the commercial paper rate
over the prime rate during the week of the
STBL—an unusual occurrence. Most belowprime lending at money-center banks consists of
large and very short-term loans to highly creditworthy corporate customers that have access to
the commercial paper market; therefore, interest
rates on such loans are closely related to money
market rates.5 When the commercial paper rate
rose above the prime early in November, such
credits probably dropped out of the below-prime
category, resulting in a decline in the fraction of
short-term loans made below prime at the 48
large banks (table 3). What may have dominated
loans remaining in the below-prime category at
those banks—at rates well under prime—were
restructured loans and loans made under commitments featuring interest rate caps, which tend
to bind in a period of rapidly rising rates.6
Moreover, some below-prime loans were likely
converted to loans at prime, and the volume of
loans at prime may have been further augmented
by substitution away from issuance of commercial paper. Such a shift by highly creditworthy
borrowers toward borrowing at the prime rate
would have tended to reduce the difference between the prime rate and the weighted-average
interest rate on short-term loans made at or
above prime, and thus to offset the effects of
tighter standards to qualify for the prime and
spreads above prime reported in the LPS.
Although the first quarter of 1980 witnessed
only a moderate increase in the gap between the
capital expenditures and the internally generated
funds of nonfinancial businesses, these firms
5. As reported, such lending was initially developed to
provide users of commercial paper with transitional facilities
to bridge gaps of a few days between issues of commercial
paper.
6. The S T B L also showed an increase in the proportion of
short-term loans made below prime at other than the 48 large
banks; this rise likely reflected an interaction between rapidly
rising interest rates and cap provisions, which, together with
restructured loans, appear to account for most of the belowprime lending at nonmoney-center banks.
4. Commercial and industrial loan commitments at
selected large commercial banks, 1979-811
Billions of dollars, seasonally adjusted
Month-end
1979
February
May
August
November
1980
February
May
August
November
1981
February
May
July
Total
Unused 2
Loans made under
commitments 3
258.3
272.7
286.2
300.1
158.0
167.2
174.3
186.1
100.3
105.5
111.9
114.0
321.6
346.6
353.2
363.4
201.8
229.5
233.7
236.0
119.8
117.1
119.5
127.4
378.6
400.6
425.3
250.6
266.7
288.2
128.0
133.9
137.1
1. These figures are excerpted from a monthly series appearing in
Federal Reserve statistical release G.21. Included in the series are 122
weekly reporting banks accounting for about 85 percent of all commercial and industrial loans. As of February 1981, several banks
accounting for less than '/a percent of unused commitments were
dropped from the reporting panel.
2. Unused commitments are the amounts still available for lending
under official promises to lend that are expressly conveyed to the
bank's customers orally or in writing, usually in the form of a formally
executed agreement signed by one of the bank's officers.
3. Loans made under commitments are outstanding loans, less
repayments of principal, made under commitments currently or
previously in force.
borrowed much more heavily than in the previous quarter in order to augment their holdings of
liquid assets. This buildup and a sharp rise in
commercial and industrial loan commitments
outstanding at banks (table 4) suggest that businesses anticipated a reduction in credit availability—presaged by a surge in monetary expansion,
restrained provision of nonborrowed reserves,
an increase of 1 percent in the discount rate in
February, and rumors of forthcoming credit controls. In mid-March the Federal Reserve announced a multifaceted special credit restraint
program, as part of a broader administration antiinflation effort. Despite the pickup in business
lending and loan commitment activity at large
banks before the February 1980 LPS, about onefourth of respondents indicated that business
loan demand had eased since November, while
only half that proportion reported greater
strength.7 Projections of changes in business loan
7. Some respondents may have failed to adjust adequately
for seasonal variation in loan demand. Growth of business
loans at large banks is seasonally weak in February, whereas
November brings a seasonal increase. Growth of business
loan commitments is seasonally strong in both months, but
more so in November.
Changes in Bank Lending Practices,
demand over the next three months were about
evenly mixed.
The February LPS also indicated a further
decline in willingness to make most types of
loans and additional tightening of terms on business loans. While the proportions of respondents
who reported such shifts in lending policy generally were smaller than in November, reports of
further restraint, viewed against the backdrop of
a perceived softening of business loan demand,
suggest that large banks expected the Federal
Reserve to maintain a restrictive stance. A further decline in willingness to make short-term
business loans at fixed rates was reported by a
substantial minority of LPS respondents, who
may have expected, correctly, that short-term
interest rates soon would increase. Similar expectations on the part of borrowers and correspondingly strong demand for the fixed-rate feature may account for the observed increase at the
48 large banks in the proportion of short-term, as
well as long-term, business loans made at fixed
rates, according to the STBL for February. At
the same time, however, the weighted-average
maturity of business loans declined (table 3). In
addition, with the prime rate again exceeding the
commercial paper rate, in contrast to November,
the proportion of short-term business loans made
below prime at the 48 large banks proved much
higher in February than three months earlier.
1980:2 TO 1980:3
CREDIT CONTROLS
AND THEIR
REMOVAL
In the second quarter of 1980, the narrow monetary aggregates and bank credit declined abruptly, as a sharp falloff in economic activity and the
borrower response to the special credit restraint
program reduced demands for money and credit.
Nonfinancial corporations took advantage of
lower bond yields to lengthen the maturity of
their liabilities. They also diverted demand for
short-term credit to the commercial paper market from banks as the spread of the sluggishly
declining prime rate over the rapidly falling commercial paper rate widened to an unprecedented
IVi percentage points in May and remained quite
wide by historical standards for the rest of the
quarter. In May, three-fourths of LPS respon
1979-81
675
dents reported that business loan demand had
dropped off" since February, and almost as many
expected further easing over the next three
months.
The relatively high cost of bank credit in the
second quarter may have reflected in part a
desire among bankers to adhere to the central
bank's voluntary guidelines for growth of bank
loans. In May, the proportions of LPS respondents that indicated reduced willingness to lend
were higher than in February for most loan
categories—especially installment loans to individuals, a broad segment of which fell under the
special deposit requirement of 15 percent on
increases in covered consumer credit.
Consistent with the restrictive bank posture
evidenced by the slow decline in the prime rate,
LPS respondents on balance tightened their standards for credit to new and nonlocal corporate
customers; firmed slightly both their compensating-balance requirements on business loans and
their standards to qualify for the prime rate and
for given spreads over prime; and left other
terms on business loans unchanged between
February and May despite weakening loan demands. In addition, STBL data show some widening of the spread between the prime rate and
the weighted-average interest rate on short-term
business loans made at or above prime. Given its
tendency to follow market interest rates more
closely than the prime, the weighted-average
interest rate on below-prime loans dropped almost 3 percentage points further below the
prime, but nevertheless failed by a large margin
to keep pace with market rates.
Rapid growth of money and credit resumed in
the third quarter, helped by the completion in
July of the phaseout of the special credit restraint
program. Although a sharp drop in inventories
reduced corporate needs for external funds to
finance capital expenditures, nonfinancial businesses increased their issuance of debt and equity as they stepped up their acquisitions of financial assets, especially liquid instruments, from
the very low second-quarter pace. With bond
yields rising over the quarter, net issuance of
bonds slowed a bit, and firms focused increases
in their borrowing on the short- and intermediate-term markets, particularly from banks. Nonfinancial commercial paper outstanding decreased
676
Federal Reserve Bulletin • September 1981
and business loan growth at banks surged, as the
spread of the prime rate over the commercial
paper rate narrowed to more typical levels. Nevertheless, a plurality of the respondents to the
August LPS reported an easing of business loan
demand over the previous three months, perhaps
because the onset of the third quarter's robust
growth in business loans did not occur until early
August and, at midmonth, may still have been
viewed as random. Indeed, respondents who
projected a drop in demand over the next three
months continued to outnumber those expecting
a pickup, but by a smaller margin than in May.
A more accommodative Federal Reserve
stance was suggested by the phaseout of the
special credit restraint program and by three
declines in the discount rate of 1 percentage
point each in late May, June, and July. So, LPS
respondents on balance indicated a shift between
May and August toward greater willingness to
make most types of loans, especially installment
loans to individuals, which became more attractive with the removal of the special deposit
requirement on covered consumer credit. In August, for the first time since February 1978, the
number of LPS respondents who reported a
greater inclination to make short-term business
loans at fixed rates exceeded the number who
reported less willingness to do so. Consistent
with this shift, STBL data for August revealed a
substantial increase in the proportion of shortterm business loans made at fixed rates at the 48
large banks. Meanwhile, in August as in May, a
substantial minority of LPS respondents reported a decline in willingness to offer fixed rates on
long-term business loans, probably because longrun trends in interest rates remained uncertain.
Nevertheless, the STBL showed some increase
from May to August in the proportion of longterm loans made at fixed rates.
As LPS respondents became more willing to
lend between May and August, they relaxed their
terms on business loans for the first time since
early 1978. Reports of easier standards in reviewing credit applications from new and nonlocal
customers outnumbered indications of greater
stringency. The same was true of policies toward
established and local customers, policies that
had changed relatively little over the history of
the survey. Also, more than one-fourth of re
spondents reduced compensating-balance requirements, and somewhat smaller proportions
eased standards to qualify for the prime rate and
for given spreads over prime; relatively few
banks firmed these terms on business loans.
Accordingly, STBL data for August showed a
decline in the spread over prime of the weightedaverage interest rate on short-term loans made at
or above prime. In addition, the substantial narrowing of the spread between the prime rate and
the commercial paper rate compressed the difference between the prime rate and the weightedaverage rate on short-term, below-prime loans,
but this average fell into closer alignment with
the commercial paper rate between May and
August, consistent with other signs of easing
credit policies.
1980:4 TO 1981:3
ADDITIONAL EASING
OF LENDING
TERMS
A further pickup in economic activity boosted
demands for money and credit in the fourth
quarter of 1980 and drove market interest rates
and the prime rate to new highs by the end of the
year. Nonfinancial businesses raised a greater
volume of funds than in the third quarter by
issuing equity at a record rate and by boosting
their short- and intermediate-term borrowing,
while reducing bond issuance to about half the
third-quarter volume. Business lending at banks
surged to its fastest pace since autumn 1979,
reflecting in part the unusually narrow spread
between the prime rate and the commercial paper rate; nonfinancial commercial paper outstanding declined for the second consecutive
quarter. More than a third of LPS respondents
reported in November that business loan demand
had strengthened since the August survey, while
only a few indicated a falloff.
The liquidity of large banks declined between
August and November, and their reliance on
borrowed funds increased considerably. Even
so, responses to the November LPS indicated
that on balance the survey panel's willingness to
make most types of loans had either declined
only slightly or stayed constant over the previous
three months, and that nonprice terms on business loans had remained about unchanged or had
Changes in Bank Lending Practices,
eased slightly. If the survey had been taken a bit
later, it might well have indicated a more restrictive lending stance; just after the November
survey date, the Federal Reserve increased the
discount rate and reimposed the surcharge on
frequent borrowings from the discount window
by large banks.
In the May-August period, LPS respondents
on balance partly reversed the trend of several
years toward reduced willingness to make shortterm, fixed-rate loans. However, they resumed
this stance in the August-November period as
interest rates rose sharply. In addition, they
continued to indicate growing reluctance to make
long-term loans at fixed rates. Consistent with
these reports, STBL data for November showed
substantial declines in the proportions of both
short- and long-term business loans made at
fixed rates at the 48 large banks, although other
banks indicated little change. The STBL also
revealed a decline in the spread over prime of the
weighted-average interest rate on loans made at
or above prime, confirming LPS results that
indicated a slight easing of standards to qualify
for the prime rate and for given spreads over
prime. However, at the 48 large banks, the
spread of the prime rate over the weightedaverage interest rate on below-prime loans narrowed, and the frequency of below-prime lending
plummeted, as the margin between the prime
rate and the commercial paper rate became unusually slim. At the same time, the average rate
on below-prime loans slipped further below the
prime at other banks, likely reflecting the interaction of rising interest rates with cap provisions
in loan commitments.
In the first quarter of 1981, nonfinancial businesses tapped domestic markets for a sharply
reduced volume of funds. They also shifted their
borrowing from short- and intermediate-term
markets to the bond market, despite high bond
rates, apparently in order to strengthen their
balance sheets. In addition, as declines in the
commercial paper rate outpaced reductions in
the prime rate, nonfinancial firms shifted demand
for short-term credit from banks to the commercial paper market, adding to the outstanding
stock of nonfinancial commercial paper after two
quarters of runoff. With business lending decelerating sharply over the quarter, the proportion
1979-81
677
of LPS respondents reporting a decline in demand for business loans rose from less than onetenth in November to more than one-third in
February, and the fraction reporting stronger
demand exhibited a similar, but opposite shift.8
Furthermore, expectations of easier demand for
business loans predominated among the minority
of LPS respondents predicting some change in
demand in the next three months.
Despite weak growth of core deposits and a
substantial increase in reliance on relatively expensive borrowed funds, the February LPS indicated that the willingness of large banks to make
most types of loans was about unchanged from
November. At the same time, a somewhat greater number of respondents reported a relaxation
than indicated a firming of compensating-balance
requirements for business loans and standards to
qualify for the prime rate and for given spreads
above prime. The reported easing of such standards was not evident in STBL data for February: they revealed an increase from November in
the excess over prime of the weighted-average
interest rate on business loans made at or above
prime. In addition, LPS results indicating unchanged willingness to make short-term loans at
fixed rates and a further disinclination to offer
fixed rates on long-term loans were not borne out
by STBL data for the 48 large banks; those data
showed increases in the proportion of fixed-rate
loans in both maturity categories, suggesting that
demand for such credit may have strengthened.
Last, consistent with the decline in the commercial paper rate relative to the prime rate, the
STBL revealed a drop in the weighted-average
interest rate on below-prime loans of more than 1
percentage point relative to the prime and a
8. These shifts appear small in light of the dramatic drop in
the growth rate of business loans at domestic offices of large
commercial banks between November and February. The
survey, however, does not specify precisely the meaning of
"loan demand," which some respondents may interpret to
include the demand for lines of credit. Commercial and
industrial loan commitments at large banks expanded much
more rapidly in the November-February period than in the
previous three months. In addition, some respondents may
include in domestic office loan demand those demands expressed at domestic offices but satisfied through bookings at
foreign branches. The weakness in business loan growth at
large banks in the first two months of 1981 in part reflected
booking of about $2 billion of loans to U.S. firms at foreign
branches of domestically chartered banks.
678
Federal Reserve Bulletin • September 1981
substantial increase in the proportion of shortterm loans made below prime.
Financing activity by businesses picked up in
the second quarter of 1981, boosted by remaining
tax liabilities for 1980 and perhaps by a weakening of profits associated with a decline in economic activity following rapid growth in the first
quarter. Equity issuance accelerated from an
already strong pace. With interest rates remaining high in the bond markets, nonfinancial firms
concentrated their borrowing in short maturities,
increasing the rates of growth of both nonfinancial commercial paper outstanding and business
loans at banks. The revised, shortened LPS of
May did not ask respondents their perceptions of
business loan demand over the previous three
months. 9 Expectations were mixed regarding the
strength of demand over the next three months.
Respondents to the LPS substantially eased
their terms on business loans between February
and May, even though the Federal Reserve
moved quickly to restrain money growth following a surge in April, and despite the fact that
large banks increased their reliance on borrowed
funds considerably further between February
and May. Large minorities of LPS respondents
indicated in May that over the previous three
months, they had reduced compensating-balance
or fee requirements for business loans and had
relaxed standards to qualify for the prime rate
and for given spreads above prime. The number
of respondents who reported an easier stance on
lending to new and nonlocal customers was
small, but greater than in February. Few respondents indicated that they had tightened their
terms on business loans.
9. See footnote 2.
Consistent with the LPS results, STBL data
for May showed that the excess over prime of the
weighted-average interest rate on short-term
loans made at or above prime declined to its
lowest level in the history of the STBL at the 48
large banks and dropped at other banks as well.
In addition, with the narrowing of the spread
between the prime rate and the commercial paper rate between February and May, the weighted-average interest rate on below-prime loans
moved into closer alignment with the prime rate,
and the proportion of short-term loans made
below prime dropped considerably.
With interest rates in bond markets climbing
further, nonfinancial corporations continued to
concentrate their borrowing in the short and
intermediate maturities in July and August of
1981. Over this period, business lending at banks
surged, boosted in part by a substantial volume
of loans related to corporate mergers. Responses
to the August LPS replicated the pattern of May,
indicating a further easing of nonprice terms on
business loans. As in the three previous quarters,
the easing of lending terms occurred despite
increased use of borrowed funds by large banks,
and may have reflected an effort to meet competition from foreign-related banking institutions in
the United States. A number of LPS respondents
have commented that intense competition from
foreign banks for both national and regional
business has forced them to trim profit margins
on loans, as well as to include in credit agreements multiple options to base the pricing of
loans on either the prime rate, domestic money
market rates, or the London interbank offered
rate.10
•
10. As of this writing, results of the August STBL were not
yet available.
Changes in Bank Lending Practices,
1979-81
679
Al. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on November 15, 1979, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Much
stronger
Total
Item
Moderately
stronger
Essentially
unchanged
Moderately
easier
27
20
71
49
19
49
Much
easier
LOAN D E M A N D
Strength of demand for commercial and
industrial loans'
1 Compared with three months earlier ..
2 Anticipated in next three months
121
121
121
121
(100)
(100)
Total
Willingness to make fixed-rate loans
5 Short-term (under one year)
6 Long-term (one year or longer)
121
121
CREDIT AVAILABILITY
AND NONPRICE TERMS
7
8
9
10
Reviewing credit lines or loan
applications for
Established customers
New customers
Local service area customers
Nonlocal service area customers .,
Compensating balance requirements
11 Commercial and industrial loans
12 Loans to finance companies
(100)
(100)
(-9)
Much
firmer
3
5
(2.5)
(4.2)
Considerably
greater
1
1
(.9)
(-9)
Much
firmer
(22.4)
(16.6)
(58.7)
(40.5)
Moderately
firmer
Essentially
unchanged
33
48
84
66
(27.3)
(39.7)
(69.5)
(54.6)
(15.8)
(40.5)
1
2
(-9)
(1.7)
Essentially
unchanged
Moderately
less
1
6
53
40
46
33
Moderately
firmer
(43.9)
(33.1)
Essentially
unchanged
(38.1)
(27.3)
(1.7)
(1.7)
Much
easier
Moderately
easier
Moderately
greater
(.9)
(5.0)
2
2
0
0
(0)
(0)
Much
less
20
41
Moderately
easier
(16.6)
(33.9)
Much
easier
121
121
120
120
(100)
(100)
(100)
(100)
1
13
2
12
(-9)
(10.8)
(1.7)
(10.0)
16
56
18
44
(13.3)
(46.3)
(15.0)
(36.7)
103
52
100
62
(85.2)
(43.0)
(83.4)
(51.7)
1
0
0
2
(.9)
(0)
(0)
(1.7)
0
0
0
0
(0)
(0)
(0)
(0)
121
121
(100)
(100)
6
8
(5.0)
(6.7)
30
20
(24.8)
(16.6)
83
92
(68.6)
(76.1)
2
1
(1.7)
(-9)
0
0
(0)
(0)
Considerably
greater
Moderately
greater
Essentially
unchanged
Moderately
less
Much
less
121
(100)
0
(0)
0
(0)
43
(35.6)
55
(45.5)
23
(19.1)
120
116
121
121
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
1
0
0
2
(.9)
(0)
(0)
(1.7)
55
53
66
69
(45.9)
(45.7)
(54.6)
(57.1)
39
44
43
45
(32.5)
(38.0)
(35.6)
(37.2)
25
19
12
5
(20.9)
(16.4)
(10.0)
(4.2)
121
121
121
120
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
3
0
0
0
(2.5)
(0)
(0)
(0)
88
68
94
74
(72.8)
(56.2)
(77.7)
(61.7)
27
40
21
35
(22.4)
(33.1)
(17.4)
(29.2)
3
13
6
11
(2.5)
(10.8)
(5.0)
(9.2)
121
(100)
0
(0)
3
(2.5)
96
(79.4)
17
(14.1)
5
(4.2)
1. After allowance for bank's usual seasonal variation.
(1.7)
1
Total
Total
Willingness to make other types of loans
13 Secured construction and land development loans
Secured real estate loans
14
1- to 4-family residential properties .
15 Multifamily residential property . . . .
16 Commercial and industrial property
17 Installment loans to individuals
Commercial and industrial loans
18 One to five years maturity
19 Over five years maturity
20 Loans to finance companies
21 Loans to securities brokers and dealers
22 Participation loans with correspondent
banks
2
Total
INTEREST RATE POLICY
Standards of creditworthiness
3 To qualify for prime rate
4 To qualify for spread above prime
(100)
(100)
680
Federal Reserve Bulletin • September 1981
A2. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on February 15, 1980, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Item
Much
stronger
Total
Moderately
stronger
Essentially
unchanged
Moderately
easier
16
23
72
68
31
28
Much
easier
LOAN D E M A N D
Strength of demand for commercial and
industrial loans'
1 Compared with three months earlier ..
2 Anticipated in next three months
119
119
119
119
(100)
(100)
Total
Willingness to malce fixed-rate loans
5 Short-term (under one year)
6 Long-term (one year or longer)
0
0
119
119
CREDIT AVAILABILITY
AND NONPRICE TERMS
(100)
(100)
(0)
(0)
Much
firmer
Total
INTEREST RATE POLICY
Standards of creditworthiness
3 To qualify for prime rate
4 To qualify for spread above prime
(100)
(100)
0
0
Moderately
firmer
(0)
(0)
Considerably
greater
0
0
(0)
(0)
Much
firmer
Total
(13.5)
(19.4)
14
19
(11.8)
(16.0)
Moderately
greater
1
3
(.9)
(2.6)
Moderately
firmer
(60.6)
(57.2)
Essentially
unchanged
102
96
(85.8)
(80.7)
(26.1)
(23.6)
Moderately
easier
3
4
(2.6)
(3.4)
Essentially
unchanged
Moderately
less
81
49
27
39
(68.1)
(41.2)
Essentially
unchanged
0
0
(22.7)
(32.8)
(0)
(0)
Much
easier
(0)
(0)
0
0
Much
less
10
28
Moderately
easier
(8.5)
(23.6)
Much
easier
Reviewing credit lines or loan
applications for
Established customers
New customers
Local service area customers
Nonlocal service area customers
119
119
118
118
(100)
(100)
(100)
(100)
0
2
0
5
(0)
(1.7)
(0)
(4.3)
6
23
10
24
(5.1)
(19.4)
(8.5)
(20.4)
110
90
105
88
(92.5)
(75.7)
(89.0)
(74.6)
3
4
3
1
(2.6)
(3.4)
(2.6)
(.9)
0
0
0
0
(0)
(0)
(0)
(0)
Compensating balance requirements
11 Commercial and industrial loans
12 Loans to finance companies
119
119
(100)
(100)
0
0
(0)
(0)
18
13
(15.2)
(11.0)
87
101
(73.2)
(84.9)
14
5
(11.8)
(4.3)
0
0
(0)
(0)
1
8
9
10
Total
Willingness to make other types of loans
13 Secured construction and land development loans
Secured real estate loans
14
1- to 4-family residential properties .
15 Multifamily residential property
16 Commercial and industrial property
17 Installment loans to individuals
Commercial and industrial loans
18 One to five years maturity
19 Over five years maturity
20 Loans to finance companies
21 Loans to securities brokers and dealers
22 Participation loans with correspondent
banks
Moderately
greater
Essentially
unchanged
Moderately
less
Much
less
119
(100)
0
(0)
3
(2.6)
72
(60.6)
40
(33.7)
4
(3.4)
118
115
119
119
(100)
(100)
(100)
(100)
1
0
0
0
(-9)
(0)
(0)
(0)
4
1
0
1
(3.4)
(.9)
(0)
(.9)
73
69
82
69
(61.9)
(60.0)
(69.0)
(58.0)
30
34
31
43
(25.5)
(29.6)
(26.1)
(36.2)
10
11
6
6
(8.5)
(9.6)
(5.1)
(5.1)
119
119
119
118
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
4
1
0
1
(3.4)
(.9)
(0)
(.9)
100
83
105
102
(84.1)
(69.8)
(88.3)
(86.5)
14
26
9
12
(11.8)
(21.9)
(7.6)
(10.2)
1
9
5
3
(.9)
(7.6)
(4.3)
(2.6)
119
(100)
1
(•9)
11
(9.3)
95
(79.9)
10
(8.5)
2
(1.7)
1. After allowance for bank's usual seasonal variation.
Considerably
greater
Changes in Bank Lending Practices,
1979-81
681
A3. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on May 15, 1980, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Total
Item
Much
stronger
Moderately
stronger
Essentially
unchanged
Moderately
easier
26
36
78
75
Much
easier
LOAN DEMAND
Strength of demand for commercial and
industrial loans'
1 Compared with three months earlier . .
2 Anticipated in next three months
120
120
120
120
(100)
(100)
Total
Willingness to make fixed-rate loans
5 Short-term (under one year)
6 Long-term (one year or longer)
0
0
120
120
CREDIT AVAILABILITY
AND NONPRICE TERMS
(100)
(100)
(0)
(0)
Much
firmer
Total
INTEREST RATE POLICY
Standards of creditworthiness
3 To qualify for prime rate
4 To qualify for spread above p r i m e . . . .
(100)
(100)
1
3
(.9)
(2.5)
(1.7)
(.9)
Much
firmer
Total
(4.2)
(3.4)
Moderately
firmer
Considerably
greater
2
1
5
4
15
14
(12.5)
(11.7)
(21.7)
(30.0)
Essentially
unchanged
100
89
(83.4)
(74.2)
(65.0)
(62.5)
4
14
(3.4)
(11.7)
Essentially
unchanged
Moderately
less
19
8
81
76
14
19
(67.5)
(63.4)
(11.7)
(15.9)
Moderately
firmer
Essentially
unchanged
Moderately
easier
(9.2)
(4.2)
Much
easier
Moderately
easier
Moderately
greater
(15.9)
(6.7)
11
5
0
0
(0)
(0)
Much
less
4
16
(3.4)
(13.4)
Much
easier
Reviewing credit lines or loan
applications for
Established customers
New customers
Local service area customers
Nonlocal service area customers
120
120
120
120
(100)
(100)
(100)
(100)
0
16
0
14
(0)
(13.4)
(0)
(11.7)
13
33
14
26
(10.9)
(27.5)
(11.7)
(21.7)
99
56
93
74
(82.5)
(46.7)
(77.5)
(61.7)
8
15
13
6
(6.7)
(12.5)
(10.9)
(5.0)
0
0
0
0
(0)
(0)
(0)
(0)
Compensating balance requirements
11 Commercial and industrial loans
12 Loans to finance companies
120
120
(100)
(100)
3
2
(2.5)
(1.7)
16
15
(13.4)
(12.5)
87
98
(72.5)
(81.7)
14
5
(11.7)
(4.2)
0
0
(0)
(0)
7
8
9
10
Total
Willingness to make other types of loans
13 Secured construction and land development loans
Secured real estate loans
14 1- to 4-family residential properties .
15 Multifamily residential property
16 Commercial and industrial property
17 Installment loans to individuals
Commercial and industrial loans
18 One to five years maturity
19 Over five years maturity
20 Loans to finance companies
21 Loans to securities brokers and dealers
22 Participation loans with correspondent
banks
Moderately
greater
Essentially
unchanged
Moderately
less
Much
less
120
(100)
0
(0)
4
(3.4)
63
(52.5)
35
(29.2)
18
(15.0)
118
115
120
120
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
8
1
7
7
(6.8)
(.9)
(5.9)
(5.9)
75
73
69
37
(63.6)
(63.5)
(57.5)
(30.9)
32
29
37
51
(18.7)
(25.3)
(30.9)
(42.5)
13
12
7
25
(11.1)
(10.5)
(5.9)
(20.9)
120
120
120
117
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
13
6
0
5
(10.9)
(5.0)
(0)
(4.3)
87
77
86
86
(72.5)
(64.2)
(71.7)
(73.6)
18
29
30
19
(15.0)
(24.2)
(25.0)
(16.3)
2
8
4
7
(1.7)
(6.7)
(3.4)
(6.0)
120
(100)
1
(.9)
11
(9.2)
89
(74.2)
15
(12.5)
4
(3.4)
1. After allowance for bank's usual seasonal variation.
Considerably
greater
682
Federal Reserve Bulletin • September 1981
A4. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on August, 15, 1980, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Much
stronger
Total
Item
Moderately
stronger
Essentially
unchanged
Moderately
easier
12
19
51
73
49
25
Much
easier
LOAN DEMAND
Strength of demand for commercial and
industrial loans'
1 Compared with three months earlier . .
2 Anticipated in next three months
120
120
120
120
(100)
(100)
Total
Willingness to make fixed-rate loans
5 Short-term (under one year)
6 Long-term (one year or longer)
120
120
CREDIT AVAILABILITY
AND NONPRICE TERMS
(100)
(100)
(0)
(0)
0
0
Much
firmer
Total
INTEREST RATE POLICY
Standards of creditworthiness
3 To qualify for prime rate
4 To qualify for spread above p r i m e . . . .
(100)
(100)
0
0
Moderately
firmer
(0)
(0)
Considerably
greater
4
0
(3.4)
(0)
Much
firmer
Total
(10.0)
(15.9)
4
4
(3.4)
(3.4)
(12.5)
(17.5)
84
82
10
12
(15.9)
(7.5)
0
0
0
1
(0)
(0)
(0)
(-9)
8
(.9)
(5.9)
(.9)
(6.8)
Compensating balance requirements
11 Commercial and industrial loans
12 Loans to finance companies
120
120
(100)
(100)
0
1
(0)
(-9)
7
3
(5.9)
(2.5)
1
7
1
(70.0)
(68.4)
(8.4)
(10.0)
(6.7)
(2.5)
Much
easier
0
0
(0)
(0)
Much
less
(2.5)
(14.2)
3
17
Essentially
unchanged
Moderately
easier
96
74
94
87
(80.0)
(61.7)
(79.0)
(73.2)
23
36
23
20
(19.2)
(30.0)
(19.4)
(16.9)
0
(0)
3
(2.5)
(.9)
(2.6)
81
107
(67.5)
(89.2)
32
8
(26.7)
(6.7)
0
Moderately
greater
Essentially
unchanged
Much
easier
1
3
(0)
(.9)
1
Moderately
less
Much
less
120
(100)
1
(.9)
26
(21.7)
87
(72.5)
3
(2.5)
3
(2.5)
118
115
120
119
(100)
(100)
(100)
(100)
0
0
0
5
(0)
(0)
(0)
(4.3)
14
5
14
50
(11-9)
(4.4)
(11.7)
(42.1)
94
100
98
59
(79.7)
(87.0)
(81.7)
(49.6)
6
7
6
4
(5.1)
(6.1)
(5.0)
(3.4)
4
3
2 '
1
(3.4)
(2.7)
(1.7)
(.9)
120
120
120
119
(100)
(100)
(100)
(100)
2
2
1
2
(1.7)
(1.7)
(.9)
(1.7)
19
10
10
16
(15.9)
(8.4)
(8.4)
(13.5)
96
96
106
97
(80.0)
(80.0)
(88.4)
(81.6)
3
9
3
3
(2.5)
(7.5)
(2.5)
(2.6)
0
3
0
1
(0)
(2.5)
(0)
(.9)
120
(100)
2
(1.7)
24
(20.0)
93
(77.5)
1
(.9)
0
(0)
1. After allowance for bank's usual seasonal variation.
15
21
19
9
(100)
(100)
(100)
(100)
Willingness to make other types of loans
13 Secured construction and land development loans
Secured real estate loans
14 1- to 4-family residential properties .
15 Multifamily residential property . . . .
16 Commercial and industrial property
17 Installment loans to individuals
Commercial and industrial loans
18 One to five years maturity
19 Over five years maturity
20 Loans to finance companies
21 Loans to securities brokers and dealers
22 Participation loans with correspondent
banks
(84.2)
(79.2)
Moderately
less
Moderately
firmer
Considerably
greater
101
95
8
3
Moderately
easier
Essentially
unchanged
120
120
119
119
Total
Essentially
unchanged
(40.9)
(20.9)
Moderately
greater
Reviewing credit lines or loan
applications for
Established customers
New customers
Local service area customers
Nonlocal service area customers
7
8
9
10
(42.5)
(60.9)
Changes in Bank Lending Practices,
1979-81
683
A5. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on November 15, 1980, compared with policy three months earlier
Number of banks; figures in parentheses indicate distribution of total banks reporting
Item
Much
stronger
Total
Moderately
stronger
Essentially
unchanged
Moderately
easier
42
25
65
78
9
13
Much
easier
LOAN D E M A N D
Strength of demand for commercial and
industrial loans'
1 Compared with three months earlier ..
2 Anticipated in next three months
117
117
117
117
(100)
(100)
Total
Willingness to make fixed-rate loans
5 Short-term (under one year)
6 Long-term (one year or longer)
117
117
CREDIT AVAILABILITY
AND NONPRICE TERMS
(100)
(100)
117
117
116
116
(100)
(100)
(100)
(100)
Compensating balance requirements
11 Commercial and industrial loans
12 Loans to finance companies
117
117
(100)
(100)
Total
Willingness to make other types of loans
13 Secured construction and land development loans
Secured real estate loans
14
1- to 4-family residential properties .
15 Multifamily residential property
16 Commercial and industrial property
17 Installment loans to individuals
Commercial and industrial loans
18 One to five years maturity
19 Over five years maturity
20 Loans to finance companies
21 Loans to securities brokers and dealers
22 Participation loans with correspondent
banks
2
2
(1.8)
(1.8)
Considerably
greater
1
0
(.9)
(0)
Much
firmer
(35.9)
(21.4)
Moderately
firmer
5
5
(4.3)
(4.3)
(55.6)
(66.7)
Essentially
unchanged
Moderately
easier
99
94
11
16
(84.7)
(80.4)
Essentially
unchanged
Moderately
less
10
4
78
68
21
26
(8.6)
(3.5)
Moderately
firmer
(66.7)
(58.2)
Essentially
unchanged
110
102
102
106
(94.1)
(87.2)
(88.0)
(91.4)
3
9
9
2
(2.6)
(2.6)
(3.5)
(6.1)
0
0
(0)
(0)
11
7
(9.5)
(6.0)
84
105
(71.8)
(89.8)
Considerably
greater
Moderately
greater
(18.0)
(22.3)
0
1
(0)
(.9)
Much
easier
0
0
(0)
(0)
Much
less
7
19
Moderately
easier
3
3
4
7
1
(9.5)
(13.7)
Moderately
greater
(.9)
(2.6)
(.9)
(1.8)
1
3
( 7.7)
(11.2)
(6.0)
(16.3)
Much
easier
1
(2.6)
(7.7)
(7.8)
(.9)
0
0
0
0
(0)
(0)
(0)
(0)
22
5
(18.9)
(4.3)
0
0
(0)
(0)
Essentially
unchanged
Moderately
less
Much
less
117
(100)
0
(0)
6
(5.2)
93
(79.5)
17
(14.6)
1
(.9)
114
112
117
116
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
3
1
5
9
(2.7)
(.9)
(4.3)
(7.8)
87
94
99
85
(76.4)
(84.0)
(84.7)
(73.3)
19
10
11
18
(16.7)
(9.0)
(9.5)
(15.6)
5
7
2
4
(4.4)
(6.3)
(1.8)
(3.5)
117
117
117
114
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
2
2
0
3
(1.8)
(1.8)
(0)
(2.7)
111
102
111
104
(94.9)
(87.2)
(94.9)
(91.3)
3
9
5
6
(2.6)
(7.7)
(4.3)
(5.3)
1
4
1
1
(.9)
(3.5)
(.9)
(.9)
117
(100)
0
(0)
11
(9.5)
104
(88.9)
2
(1.8)
0
(0)
1. After allowance for bank's usual seasonal variation.
(.9)
(0)
Much
firmer
Total
Reviewing credit lines or loan
applications for
Established customers
New customers
Local service area customers
Nonlocal service area customers
7
8
9
10
1
0
Total
INTEREST RATE POLICY
Standards of creditworthiness
3 To qualify for prime rate
4 To qualify for spread above p r i m e . . . .
(100)
(100)
684
Federal Reserve Bulletin • September 1981
A6. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on February 15, 1981, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Much
stronger
Total
Item
Moderately
stronger
Essentially
unchanged
Moderately
easier
14
11
62
80
40
27
Much
easier
LOAN D E M A N D
Strength of demand for commercial and
industrial loans'
1 Compared with three months earlier . .
2 Anticipated in next three months
118
118
(100)
(100)
Total
Willingness to make fixed-rate loans
5 Short-term (under one year)
6 Long-term (one year or longer)
0
0
118
118
CREDIT AVAILABILITY
AND NONPRICE TERMS
(100)
(100)
0
0
0
0
118
118
117
117
(100)
(100)
(100)
(100)
0
Compensating balance requirements
11 Commercial and industrial loans
12 Loans to finance companies
118
118
(100)
(100)
Total
Willingness to make other types of loans
13 Secured construction and land development loans
Secured real estate loans
14
1- to 4-family residential properties .
15 Multifamily residential property
16 Commercial and industrial property
17 Installment loans to individuals
Commercial and industrial loans
18 One to five years maturity
19 Over five years maturity
20 Loans to finance companies
21 Loans to securities brokers and dealers
22 Participation loans with correspondent
banks.
(0)
(0)
2
3
(1.7)
(2.6)
(52.6)
(67.8)
Essentially
unchanged
104
97
(88.2)
(82.3)
(33.9)
(22.9)
12
18
(10.2)
(15.3)
Essentially
unchanged
Moderately
less
10
3
96
80
9
22
Moderately
firmer
(81.4)
(67.8)
Essentially
unchanged
(7.7)
(18.7)
(1.7)
(0)
Much
easier
Moderately
easier
Moderately
greater
(8.5)
(2.6)
2
0
0
0
(0)
(0)
Much
less
3
13
(2.6)
(11.1)
Much
easier
Moderately
easier
0
1
(0)
(.9)
(0)
(.9)
1
3
2
3
(-9)
(2.6)
(1.8)
(2.6)
111
106
109
109
(94.1)
(89.9)
(93.2)
(93.2)
6
8
6
4
(5.1)
(6.8)
(5.2)
(3.5)
0
0
0
0
(0)
(0)
(0)
(0)
0
1
(0)
(.9)
3
4
(2.6)
(3.4)
91
104
(77.2)
(88.2)
24
9
(20.4)
(7.7)
0
0
(0)
(0)
1
Considerably
greater
Moderately
greater
Essentially
unchanged
Moderately
less
Much
less
118
(100)
0
(0)
6
(5.1)
93
(78.9)
18
(15.3)
1
(.9)
117
114
118
117
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
3
2
6
8
(2.6)
(1.8)
(5.1)
(6.9)
91
96
102
87
(77.8)
(84.3)
(86.5)
(74.4)
21
15
9
17
(18.0)
(13.2)
(7.7)
(14.6)
2
1
1
5
(1.8)
(.9)
(.9)
(4.3)
118
118
118
117
(100)
(100)
(100)
(100)
0
0
0
0
(0)
(0)
(0)
(0)
8
4
3
7
(6.8)
(3.4)
(2.6)
(6.0)
107
105
106
104
(90.7)
(89.0)
(89.9)
(88.9)
2
7
7
5
(1.7)
(6.0)
(6.0)
(4.3)
1
2
2
1
(.9)
(1.7)
(1.7)
(.9)
118
(100)
0
(0)
16
(13.6)
101
(85.6)
1
(.9)
0
(0)
1. After allowance for bank's usual seasonal variation.
(0)
(0)
Much
firmer
Total
(11.9)
(9.4)
Moderately
firmer
Considerably
greater
Reviewing credit lines or loan
applications for
Established customers
New customers
Local service area customers
Nonlocal service area customers
7
8
9
10
(0)
(0)
Much
firmer
Total
INTEREST RATE POLICY
Standards of creditworthiness
3 To qualify for prime rate
4 To qualify for spread above p r i m e . . . .
(100)
(100)
118
118
Changes in Bank Lending Practices,
1979-81
685
A7. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks'
Policy on February 15, 1981, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
1 Strength of demand for commercial and
industrial loans anticipated in next
three months 2
Much
stronger
Total
Item
60
(100)
0
Much
firmer
Total
2 Standards to qualify for prime rate . . . .
3 Standards to qualify for spread above
prime
4 Stance on commercial and industrial
lending to
New customers 3
Nonlocal customers 3
5 Compensating balance
requirements for commercial and
industrial loans 4
3
(5.0)
Moderately
firmer
Essentially
unchanged
47
(78.3)
Essentially
unchanged
Moderately
easier
10
(16.7)
Much
easier
0
Moderately
easier
(0)
Much
easier
60
(100)
0
(0)
0
(0)
56
(93.3)
4
(6.7)
0
(0)
60
(100)
0
(0)
1
(1.7)
53
(88.3)
6
(10.0)
0
(0)
60
60
(100)
(100)
0
0
(0)
(0)
0
0
(0)
(0)
58
56
(96.7)
(93.3)
2
4
(3.3)
(6.7)
0
0
(0)
(0)
59
(100)
0
(0)
1
(1.7)
56
(94.9)
2
(3.3)
0
(0)
Total
6 Willingness to make installment loans to
individuals
(0)
Moderately
stronger
59
(100)
Considerably
greater
0
(0)
Moderately
greater
5
(8.5)
Essentially
unchanged
41
(69.5)
Moderately
less
11
(18.6)
Much
less
2
(3.4)
1. As of May 1981 the reporting panel was cut about in half to 60 banks. This table reports February responses to questions retained beyond
May from only those 60 banks in order to permit a comparison of survey results for February with those for May and August (tables A8 and A9).
2. After allowance for bank's usual seasonal variation.
3. Beginning May 1981, a single question addresses banks' stance on lending to both new and nonlocal customers.
4. The corresponding question in the May 1981 and later surveys refers to compensating balance and/or fee requirements on commercial and
industrial loans.
686
Federal Reserve Bulletin • September 1981
A8. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on May 15, 1981, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
Item
1 Strength of demand for commercial and
industrial loans anticipated in next
three months'
Total
60
(100)
Much
stronger
Moderately
stronger
0
17
Much
firmer
Total
2 Standards to qualify for prime rate . . . .
3 Standards to qualify for spread above
prime
4 Stance on commercial and industrial
lending to new and nonlocal customers
5 Compensating balance or fee
requirements for commercial and
industrial loans
60
Moderately
firmer
(100)
0
(0)
0
(0)
60
(100)
0
(0)
5
(8.3)
60
(100)
0
(0)
4
(6.7)
27
(100)
0
(0)
(1.6)
Moderately
greater
3
(5.1)
(48.3)
Essentially
unchanged
60
Considerably
greater
1
29
0
59
(0)
(28.3)
(100)
Total
6 Willingness to make installment loans to
individuals
(0)
Essentially
unchanged
46
Moderately
easier
14
(23.3)
Much
easier
0
(0)
Much
easier
Moderately
easier
(76.7)
12
(20.0)
35
(58.3)
25
(41.7)
0
(0)
46
(76.7)
9
(15.0)
0
(0)
(45.0)
29
(48.3)
0
(0)
Essentially
unchanged
42
(71.2)
1
Moderately
less
12
(20.3)
(1.6)
Much
less
2
(3.4)
1. After allowance for bank's usual seasonal variation.
A9. Senior loan officer opinion survey on bank lending practices, selected large U.S. banks
Policy on August 15, 1981, compared with policy three months earlier
Number of banks; figures in parentheses indicate percentage distribution of total banks reporting
1 Strength of demand for commercial and
industrial loans anticipated in next
three months'
Much
stronger
Total
Item
60
(100)
0
Much
firmer
Total
2 Standards to qualify for prime rate
3 Standards to qualify for spread above
prime
4 Stance on commercial and industrial
lending to new and nonlocal customers
5 Compensating balance or fee
requirements for commercial and
industrial loans
60
(100)
0
(41.7)
Moderately
firmer
1
(1.7)
27
(45.0)
Essentially
unchanged
Moderately
easier
8
(13.3)
Much
easier
0
(0)
Much
easier
Moderately
easier
50
(83.3)
9
(15.0)
0
(0)
(100)
0
(0)
1
(1.7)
36
(60.0)
23
(38.3)
0
(0)
60
(100)
0
(0)
6
(10.0)
47
(78.3)
7
(11.7)
0
(0)
60
(100)
0
(0)
2
(3.3)
30
(50.0)
28
(46.7)
0
(0)
59
(100)
1. After allowance for bank's usual seasonal variation.
(0)
25
Essentially
unchanged
60
Considerably
greater
Total
6 Willingness to make installment loans to
individuals
(0)
Moderately
stronger
1
(1.7)
Moderately
greater
6
(10.2)
Essentially
unchanged
44
(74.6)
Moderately
less
5
(8.5)
Much
less
3
(5.1)
687
Treasury and Federal Reserve
Foreign Exchange Operations
This 39th joint report reflects the TreasuryFederal Reserve policy of making available additional information on foreign exchange operations from time to time. The Federal Reserve
Bank of New York acts as agent for both the
Treasury and the Federal Open Market Committee of the Federal Reserve System in the conduct
offoreign exchange operations.
This report was prepared by Sam Y. Cross,
Manager of Foreign Operations for the System
Open Market Account and Senior Vice President
in charge of the Foreign Group of the Federal
Reserve Bank of New York. It covers the period
February through July 1981. Previous reports
have been published in the March and September B U L L E T I N S of each year beginning with
September 1962.
The U.S. dollar advanced strongly against all
currencies during the period under review in
response to a variety of economic and political
factors in the United States and abroad. In the
United States, the current account remained in
surplus. The domestic economy showed considerable resilience. The demand for money and
credit continued strong, and U.S. interest rates
remained high. Also, price indexes published
during the period pointed to a significant decline
in the inflation rate. Moreover, the already favorable market sentiment toward the Reagan administration was strengthened by the administration's apparent resolve and effectiveness in
translating from plan to action its major fiscal
program designed to deal with inflation while
revitalizing the U.S. economy.
The performance of major industrial countries
abroad was less favorable. The current accounts
of several countries, notably Germany, were in
substantial deficit. Inflation was accelerating in
most countries other than Japan. Economic activity abroad was generally sluggish. In many
countries, the weakness of domestic demand was
seen in the markets as constraining the authorities from raising interest rates sufficiently to
attract capital inflows for financing current-account deficits at prevailing exchange rates or to
curb inflation. Market participants focused on
the policy challenges facing many governments
abroad and were concerned that policies would
not be adopted to deal with these problems
effectively. Moreover, political developments in
Eastern Europe and in the Middle East added to
uncertainties for the outlook, especially for Europe, and left traders and investors with the view
that the United States was a relatively attractive
outlet for investment.
In this environment, the market perceived
little downside risk for the dollar in the exchange
markets. Consequently, the dollar fluctuated
1. Federal Reserve
reciprocal currency arrangements
Millions of dollars
Amount of facility
Institution
Jan. 1,
1981
July 31,
1981
Austrian National Bank
National Bank of Belgium
Bank of Canada
National Bank of Denmark
Bank of England
Bank of France
German Federal Bank
250
1,000
2,000
250
3,000
2,000
6,000
250
1,000
2,000
250
3,000
2,000
6,000
Bank of Italy
Bank of Japan
Bank of Mexico
Netherlands Bank
Bank of Norway
Bank of Sweden
Swiss National Bank
3,000
5,000
700
500
250
500
4,000
3,000
5,000
700
500
250
300
4,000
600
600
1,250
1,250
30,300
30,100
Bank for International Settlements
Swiss francs/dollars
Other authorized European
currencies/dollars
Total
1. Decreased by $200 million effective May 23, 1981.
1
688
Federal Reserve Bulletin • September 1981
2. Drawings and repayments under reciprocal
currency arrangements, January-July 1981 1
Millions of dollars equivalent; drawings, or repayments (—)
Bank drawing
on System
Bank of
Sweden...
1981
Outstanding
Jan. 1,
1981
Ql
Q2
July
0
200.0
-200.0
0
Outstanding
July 31,
1981
0
1. Data are on a value-date basis.
higher over most of the period under review.
Early in February, the selling pressures against
other currencies focused mostly on the German
mark, which not only declined against the dollar
but also was weak within the joint float arrangement of the European Monetary System (EMS).
After midmonth, the German Federal Bank took
strong action to defend the mark, and before
long, increases in short-term interest rates in
Germany were followed by rising interest rates in
many other financial markets on the Continent.
At the same time, interest rates in the United
States eased somewhat. As market participants
moved to cover short currency positions, the
mark rebounded and other currencies also
strengthened by mid-March.
From April to mid-May, there was renewed
upward pressure on short-term U.S. interest
rates and the dollar resumed its advance. By
midspring this tendency was reinforced as the
markets attempted to assess the implications of
renewed unrest in Poland, the change of government in France, and political developments in
several other European countries. Moreover,
U.S. statistics for the first quarter highlighted the
unexpected strength of the domestic economy.
As market participants began to adjust their
expectations concerning the near-term outlook
for the economy and for interest rates, the dollar
advanced strongly.
Coming into the summer, market participants
took an increasingly bearish view of the outlook
for Europe. A debate over monetary and exchange rate policies had emerged in the press,
intensifying with the approach of the July 19-20
summit meeting at Ottawa. Market participants
focused on complaints by foreign governments
that the high level of U.S. interest rates was
complicating their efforts to encourage economic
recovery and to avoid further depreciations of
their currencies. At the same time, evidence
suggested that the U.S. economy had lost its
upward momentum. Inflation figures continued
to show improvement, while the growth of the
narrow monetary aggregates had moderated. Expectations developed that U.S. interest rates
might ease from their near-record highs. In these
circumstances, the dollar remained in demand
but fluctuated more irregularly than before.
After mid-July, the demand for credit in the
United States was stubbornly strong in the face
of high interest rates and the broader monetary
aggregates continued to be buoyant. The market
was impressed by Chairman Volcker's reaffirmation of the Federal Reserve's commitment to
restrain monetary expansion. In addition, the
market was becoming concerned about the impact of the U.S. government's near-term financing requirements on U.S. financial markets. In
this environment, interest rates remained high,
disappointing expectations of near-term declines. Moreover, as the administration's economic proposals gained congressional approval,
market participants compared the breadth of
support for the new policy directions in the
United States with the continuing debates on a
full range of policies in many countries abroad.
As a result, market sentiment toward the dollar
became bullish. The dollar closed the period
advancing strongly across the board. The extent
to which the exchange rates for individual currencies moved against the dollar depended in
large part on economic and political factors in
3. U.S. Treasury securities,
foreign currency denominated 1
Millions of dollars equivalent, issues, or redemptions ( - )
Issues
Public series
Germany
Switzerland
1981
Commitments
Jan. 1,
1981
Ql
Q2
July
5,233.6
1,203.0
0
0
0
0
0
-744.5
5,233.6
458.5
6,436.6
0
0
-744.5
5,692.1
Commitments
July 31,
1981
1. Data are on a value-date basis. Because of rounding, figures may
not add to totals.
Foreign Exchange Operations
their respective countries. But, overall, the dollar ended the period up 22lA percent against
sterling, up 163/4 percent against the Japanese
yen, and up 16V* percent against the German
mark.
In their operations in the exchange market, the
U.S. authorities intervened to settle a volatile
market on nine trading days in February when
the dollar was rising sharply. The equivalent of
$610.0 million net of marks was purchased in the
market and an additional $168.4 million of marks
was bought from correspondents. The proceeds
of these market and correspondent purchases
were split evenly between the Federal Reserve
and the Treasury and were added to their respective balances.
On March 30, when trading in the exchange
markets faltered amidst the uncertainties following the assassination attempt on President Reagan, the Trading Desk intervened to reassure the
markets. A total of $74.4 million equivalent in
marks was sold from balances, again split evenly
between the Federal Reserve and the Treasury.
On the following day, exchange markets quickly
returned to more orderly conditions.
The Treasury indicated in April that, after
study and consultation with officials of the Federal Reserve, the United States had adopted a
minimal intervention approach—to intervene
only when necessary to counter conditions of
disorder in the exchange market. On May 4,
Treasury Under Secretary Sprinkel set forth the
rationale for this approach in testimony before
the Joint Economic Committee of the Congress.
The United States did not intervene on its own
account through the remainder of the period
4. U.S. Treasury and Federal Reserve foreign
exchange operations 1
Net profits or losses ( - ) in millions of dollars
U.S. Treasury
Period
Federal
Reserve
1980 Q1
Q2
1981 July
Valuation profits and losses on
outstanding assets and liabilities as of July 1981
1. Data are on a value-date basis.
Exchange
Stabilization
Fund
General
account
6.2
-1.4
.1
-.1
-3.8
0
-144.3
0
61.6
-571.1
-1,807.2
1,313.5
689
under review. The Trading Desk continued to
cooperate with other central banks by intervening as their agent from time to time in the New
York market. Over the six-month period such
operations were conducted in German marks,
French francs, Japanese yen, and the Canadian
dollar. In their own markets central banks of
other countries continued to intervene, operating
heavily at times, mostly to limit the decline of
their currencies against the dollar.
In April, the Bank of Sweden repaid, prior to
maturity, the $200 million drawn in January
under the swap arrangement with the Federal
Reserve, following a heavy reflow of funds into
the Swedish krona. In May, an increase of $200
million in the arrangement that had been agreed
upon for one year lapsed and the swap line
reverted to the earlier figure of $300 million.
On July 27, the U.S. Treasury paid off the first
maturing tranche equivalent to $744.5 million of
its Swiss franc-denominated securities. These
securities were issued with the cooperation of
the Swiss authorities in connection with the
dollar-support program of November 1978. After
this redemption the Treasury had outstanding
$5,692.1 million equivalent of foreign currency
notes, public series, of which $5,233.6 million is
denominated in German marks and $458.5 million in Swiss francs. These securities mature
between September 1, 1981, and July 26, 1983.
In the seven months through July 1981, the
Federal Reserve had gains of $4.9 million on its
exchange market operations, while the Exchange
Stabilization Fund lost $4.5 million. The Treasury's general account lost $82.7 million, reflecting losses of $144.3 million as a result of annual
renewals at current market rates of the agreement to warehouse with the Federal Reserve the
Swiss franc proceeds of Treasury securities and
gains of $61.6 million on the reacquisition of
Swiss francs in connection with the redemption
at maturity of securities denominated in Swiss
francs. As of July 31, valuation losses on outstanding balances were $571.1 million for the
Federal Reserve and $1,807.2 million for the
Exchange Stabilization Fund. The Treasury's
general account had valuation gains of $1,313.5
million related to outstanding issues of securities
denominated in foreign currencies.
690
Federal Reserve Bulletin • September 1981
GERMAN
MARK
Early in 1981, Germany's current-account deficit
showed no signs of contracting despite continued
stagnation of the domestic economy. Though
import demand had weakened and export orders
had picked up from earlier depressed levels,
these initial improvements were more than offset
by the adverse impact on Germany's terms of
trade of the sharp depreciation of the mark. At
the same time, growing tourism, and interest and
dividend payments led to a further deterioration
in services. The authorities had hoped to correct
the current-account deficit gradually by a shift of
resources toward investment and exports and, in
the interim, to finance the deficit by a combination of private and official capital inflows. But
the protracted nature of the deficit exerted a
negative impact on sentiment toward the mark,
and private capital flowed heavily out of Germany instead. Meanwhile, domestic demand remained exceptionally weak. Central bank money
was growing in the upper half of the 4 percent to
7 percent annual growth range, and short-term
domestic interest rates at 9 percent were the
subject of domestic debate—criticized for being
too high to permit a recovery of domestic economic activity but too low to defend the mark
from downward pressures in the exchange market.
By February, the outflow of funds from Germany accelerated sharply. Market participants
were deeply concerned about the lack of resolution within Germany over the appropriate role
for monetary policy in dealing with the weakness
of the external sector and about security issues
raised by persistent tensions in Poland. At the
same time, there was growing confidence in the
policies and leadership of the new U.S. administration under President Reagan, which had already established a clear direction for the United
States in economic and military matters. With
interest rates in Germany relatively low compared with those in the United States and some
other industrial countries, funds flowed heavily
out of marks, principally into dollar assets but
also into sterling and higher-yielding currencies
of the EMS. By midmonth the mark had plummeted to DM 2.25 against the dollar for a decline
of 5V2 percent from the levels at the end of
January and some 20 percent from the previous
September. Within the EMS the mark was trading at or near the floor of the joint float vis-a-vis
the French franc. The German Federal Bank
intervened in dollars and, together with the Bank
of France, also in French francs to preserve the
limits of the EMS. Largely reflecting these operations, Germany's foreign exchange reserves declined to $42.7 billion at the end of February,
down $1.7 billion from the level outstanding on
January 31. Meanwhile, during February the
U.S. authorities intervened to settle trading conditions, which were frequently one way. The
authorities bought $610.0 million equivalent of
marks net in the market and $168.4 million
equivalent from correspondents, which were
added to balances of the Federal Reserve and of
the U.S. Treasury.
The sharp and prolonged decline of the mark
posed serious problems for the German authorities. The depreciating mark boosted domestic
currency prices of oil and other dollar-invoiced
imports relative to export prices, thus magnifying the current-account deficit. The rising cost of
imports fed directly into domestic producer and
consumer prices ahead of important spring wage
negotiations and thereby threatened to provoke
new domestic cost pressures. The mark's decline
also complicated efforts to finance the external
deficit and generated some uneasiness on the
part of official mark holders. On February 19, the
German Federal Bank temporarily closed the
Lombard window, suspended the traditional
fixed-rate facility, and announced that Lombard
credits would henceforth be made available at its
discretion and at rates determined on a day-today basis. German Federal Bank President Poehl
stated that the immediate aim of these measures
was to tighten German monetary policy in order
to safeguard the stability of the mark. Thereafter,
German short-term interest rates shot up and call
money temporarily reached 20 to 30 percent
before settling back to trade around 12 to 13
percent.
Exchange market participants reacted positively to the tightening of German monetary
policy. As interest differentials adverse to the
mark either narrowed sharply or disappeared
completely, previously adverse commercial
leads and lags were unwound and nonresidents
Foreign Exchange Operations
repaid earlier mark-denominated borrowings.
This reflow of short-term funds into marks, principally out of French and Belgian francs,
strengthened the mark dramatically within the
EMS, and the mark traded after mid-February at
the top of the joint float arrangement. The German Federal Bank was therefore able to begin
purchasing EMS currencies in the market to
repay debt to the FECOM (European Fund for
Monetary Cooperation), incurred earlier while
the mark was at the bottom of the EMS. Meanwhile, with U.S. interest rates also coming off
near-record highs, the mark rebounded against
the dollar to trade around DM 2.09 to DM 2.12
through early April. For their part the U.S.
authorities limited their intervention to one occasion, on March 30, following the assassination
attempt on President Reagan, when they sold
$74.4 million equivalent of marks out of balances.
During the spring the German Federal Bank
maintained its essentially restrictive monetary
policy stance. Officials stated that there was no
basic conflict between internal and external policy considerations. Short-term stimulus to the
economy, whatever the temporary benefits to
growth, would be counterproductive since it
would increase domestic consumption and inflation at the expense of longer-term needs such as
capital formation, efficient economic decisionmaking, and productivity gains. The authorities
therefore kept a tight rein on liquidity, mainly
through open market operations and foreign currency swaps. These operations convinced exchange market participants that the German Federal Bank would not allow interest rates to ease.
But the occasionally highly charged domestic
debate over monetary policy also suggested that
the authorities would not be in a position to
increase short-term interest rates in the face of
continued recession and substantial unemployment.
Meanwhile, in the United States, demands for
money and credit pressed against a restrained
supply of bank reserves and exerted upward
pressure on short-term U.S. interest rates from
April through mid-June. The rise in U.S. interest
rates was not matched by increases in German
money market rates, so that interest differentials
adverse to the mark widened from 2 percent in
691
March to 6 percent by early June. In the credit
markets, however, yields on German bonds increased by more than yields in the United States.
These pressures on the German bond market
spilled over into the exchanges, as foreigners
liquidated some of their mark-denominated assets to limit capital losses. In these circumstances, the mark was again under downward
pressure and had dropped to DM 2.25 before
May 10, when Francois Mitterrand was elected
President of France. Then a wave of French
franc selling pulled the mark and other EMS
currencies even lower in the exchanges. To
maintain the intervention limits of the joint float,
the German Federal Bank, along with the Bank
of France, sold large amounts of marks against
French francs through the end of May before
tough French exchange controls helped bring the
market into better balance. The German Federal
Bank also sold large amounts of dollars in the
market to absorb part of the mark liquidity
created by the EMS intervention and to moderate the steep fall of the mark against the dollar,
which declined further to nearly DM 2.33 by the
end of the month. Part of these dollar sales
occurred through the agency of the Trading Desk
at the Federal Reserve Bank of New York,
operating on behalf of the German Federal Bank.
However, the Trading Desk did not intervene in
the exchanges on behalf of the Federal Reserve
or the U.S. Treasury.
In mid-June, selling pressures on the mark
abated. By this time, economic activity in the
United States had turned sluggish, inflation figures had improved, and growth of the monetary
aggregates had moderated. In these circumstances, U.S. interest rates had begun to soften
and were widely expected to register sustained
declines, thereby narrowing interest differentials
adverse to the mark. But the market had become
increasingly pessimistic over the outlook for
Europe. Major political and security issues were
of concern, as underlined by persistent tensions
in Poland and by new questions about the framework of Western European relations raised by
changes in several governments. With respect to
Germany, there were open disputes in Germany's governing coalition over a broad range of
issues. Germany's trade figures had not yet
shown much evidence of improved competitive-
692
Federal Reserve Bulletin • September 1981
ness resulting from the substantial real depreciation of the mark. Consumer price inflation was
also accelerating, and there was little prospect
for a near-term reduction of price pressures,
given the rise in labor compensation negotiated
in the spring.
With these various concerns depressing sentiment toward the mark, the German currency
weakened still further against the dollar in late
June and July, when U.S. interest rates firmed
up rather than declining as expected. Continued
bearish sentiment toward the mark also hampered progress in financing the current account.
For several months, long-term private capital
had remained in deficit, although the pace of net
outflows had slowed. By June the previous inflow of short-term capital was being reversed.
Partly for this reason the German Federal Bank
announced that German interest rates would
remain high and that the growth of central bank
money would be held in the lower half of the
annual target range. At the same time, the German government continued to borrow heavily
abroad in order to finance the sizable currentaccount deficit, amounting to DM 29 billion at an
annual rate in the first six months of the year.
Between January and June the public authorities
raised about DM 14 billion in foreign credits,
with a large share coming directly from Saudi
Arabia.
During July, as the exchange market focused
on fiscal policy developments in Germany relative to those in the United States, the mark came
more heavily on offer. In Germany, increasing
government expenditures threatened to raise the
public-sector deficit in 1981 to 4.5 percent of
gross national product, from under 3 percent
only two years earlier. Although containing the
upward trend in spending had become a priority,
measures to reduce expenditures in the 1982
budget were drafted in the midst of heated public
debate, raising some questions whether the final
budget proposal would be approved by the Parliament. Meanwhile, the Reagan administration
gained congressional support for major expenditure cuts and tax reductions, marking an important shift in fiscal policy that was aimed at
reducing inflation and providing greater incentives to the private sector. The exchange market
assessed the new direction of U.S. fiscal policy
favorably. There were still concerns that defense
outlays and tax cuts might in combination swell
rather than reduce the budget deficit. But growing confidence that the Federal Reserve would
keep the growth of bank reserves and the monetary aggregates under firm control helped alleviate inflationary fears and also reinforced expectations that U.S. interest rates would remain
high. The market's generally positive reaction to
the Reagan administration's economic program,
coupled with the attraction of high yields on
dollar placements, led to a surge of dollar bidding
during July. In these circumstances, the mark
dropped sharply lower in frequently heavy trading to DM 2.4770 by the end of the month for a
net decline of I6V2 percent over the six months
under review. Meanwhile, Germany's foreign
exchange reserves increased $647 million from
February levels to stand at $43.4 billion on
July 31, 1981. The rise in reserves mainly reflected sizable intervention purchases of currencies
within the EMS after March—mostly French
francs but also Belgian francs—which offset intervention sales of dollars in the final months of
the period.
Swiss
FRANC
Coming into 1981 the Swiss economy was continuing to show greater momentum than that of
most other industrialized countries. At the same
time, the pace of consumer price increases had
accelerated sharply in response to resilient consumption demand and to the progressive decline
in the Swiss franc during much of 1980. The
Swiss authorities were anxious to combat these
emerging inflationary pressures while mindful of
the risks of precipitating a downturn for Switzerland in view of the sluggishness of the international economy. As a result, the Swiss National
Bank announced it would leave its monetarybase growth target for 1981 unchanged from that
of 1980 at 4 percent.
At that time, interest rates in Switzerland were
well below those in all other major industrial
countries, and the differential vis-a-vis the United States had again widened to 10 percentage
points. In response, many corporate entities,
governments, and other official agencies bor-
Foreign Exchange Operations
rowed francs domestically or in the Euro-Swiss
franc market, where many borrowers had options allowing them to switch loan currency
denominations on rollover dates. In addition,
with developments in Eastern Europe seen in the
market as casting a cloud over all the Continent,
the Swiss franc had lost some of its traditional
attraction as a refuge for capital. As a result,
inflows of funds were insufficient to offset the
buildup of interest-sensitive capital outflows,
and during January the Swiss franc continued to
weaken both against the dollar and other European currencies. By the beginning of the period, the
Swiss franc had declined about 16 percent from
its 1980 highs to a three-year low of SF 1.9270
against the dollar and was trading at SF 0.90
against the German mark. Swiss foreign exchange reserves stood at $12.1 billion.
On February 3, the Swiss National Bank
raised its discount and Lombard rates Vi percentage point to 3>/2 and 4VI percent respectively, the
first change in these rates in nearly a year. The
actions were taken to support the franc in the
exchanges and to adjust official rates to tightening domestic money market conditions. But interest rate differentials unfavorable to the Swiss
franc remained wide, and the franc continued to
decline against a generally strengthening dollar.
As the franc eased, the National Bank sold
dollars to support the rate but operated in more
modest amounts than many other central banks.
Following a change in the administration of
Germany's Lombard facility, which precipitated
a sharp rise in German money market interest
rates, the Swiss National Bank announced a
second round of interest rate increases. On February 20, the discount and Lombard rates were
raised to 4 percent and 5VI percent respectively,
and the National Bank also conducted foreign
currency swap operations—its major tool for
monetary control—so as to further tighten money market conditions. By mid-March, money
market rates had risen to about 9 percent, levels
not seen since the mid-1970s. Also, dollar interest rates eased somewhat and the adverse interest differentials narrowed sharply, helping the
franc strengthen in the exchanges to a level of SF
1.8530 on March 18.
By this time it had become clear that the Swiss
economy, rather than weakening as expected,
693
continued to expand in the first quarter of 1981,
in sharp contrast to the sluggishness in Germany
and elsewhere. Increases in employment, though
slowing from the strong 1980 pace, remained
sufficient to enable Switzerland to avoid the
rising unemployment so troublesome to many
industrial nations. Domestic consumption and
construction activity had remained buoyant even
in the face of mortgage rates, which soared to
levels not seen since 1975. These pressures had
contributed to an acceleration of the inflation
rate to about 6 percent which, though high by
historical standards for Switzerland, was nevertheless still among the lowest rates in the world.
In the United States the unexpected strength of
the economy renewed monetary growth and put
considerable upward pressure on dollar interest
rates, which was sustained over the remainder of
the period. As the dollar again came into demand, the franc fell in the exchanges.
With the economy robust, the Swiss authorities had leeway to pursue policies intended to
push the inflation rate back down. Beginning in
late April and continuing through May, the Swiss
National Bank fostered tighter money market
conditions by allowing liquidity-providing foreign currency swaps to run off. On May 11, the
National Bank again raised the discount and
Lombard rates, this time to 5 percent and 6Vz
percent respectively, and shortly thereafter announced a willingness to see the monetary base
fall below its annual target range. In response,
Swiss interest rates moved even higher, including the politically sensitive mortgage interest rate
and other long-term interest rates.
These developments coincided with the presidential elections in France, and as all European
currencies initially dropped against the dollar,
the Swiss franc fell further to a low of SF 2.0790,
down 12 percent from its March highs. Thereafter, however, Switzerland came to be seen as a
politically stable and economically sound investment outlet and the Swiss franc began to regain
some of the status of a "safe haven" currency.
In the context of this improving exchange market
psychology, speculative and investment flows
turned in favor of the franc. Funds also flowed in
from Germany to repay franc borrowings, which
had become nearly as expensive as mark credit.
Through the end of June the franc firmed slightly
694
Federal Reserve Bulletin • September 1981
against the dollar and climbed against the mark
to SF 0.85, thus breaking out of the narrow range
around SF 0.90 that had held for about two
years.
Through July the franc declined against the
dollar in line with other currencies and against
the mark, mainly in response to growing market
expectations of an EMS realignment that was
thought likely to benefit the mark. By the end of
the month, the franc had declined to SF 2.15
against the dollar and to SF 0.87 against the
mark, down about 1 PA percent against the dollar
and up 4 percent against the mark for the sixmonth interval. For the period, overall Swiss
foreign currency reserves fluctuated modestly,
largely in response to foreign currency swap
operations conducted to influence growth of the
Swiss monetary base. At the close, Swiss reserves stood at $9.9 billion, down $2.2 billion
from the end of January.
On July 27, the U.S. Treasury redeemed the
first maturing tranche of its Swiss franc-denominated securities in the amount of SF 1.2 billion,
issued in July 1979 with the cooperation of Swiss
authorities in connection with the dollar-support
program of November 1978. In order to neutralize the liquidity effects of the note transactions,
the Swiss National Bank allowed a portion of
maturing foreign currency swaps to run off,
thereby absorbing liquidity injected by the retirement of the notes. As a result, the money markets remained generally steady over the end of
the month.
JAPANESE
YEN
Early in 1981 the yen continued to benefit in the
exchanges from the rapid adjustment of Japan's
economy to the second oil shock. Restrictive
monetary and fiscal policies had successfully
curtailed domestic demand, limited the buildup
of inflationary expectations, and, together with
moderate wage settlements, contained the impact of oil price increases on domestic costs. At
the same time, changes in production processes
under way since the mid-1970s had made industry less dependent on imported raw materials,
particularly oil. These developments, together
with the impact of the 1979-80 depreciation of
the yen, led to a marked improvement in the
current account, which swung from deep deficit
to virtual balance. They also impressed international investors sufficiently to attract massive
inflows of funds, particularly from Organization
of Petroleum Exporting Countries (OPEC) investors eager to increase the share of yen-denominated assets in their portfolios. As a result, the
yen rebounded in the exchanges to ¥ 206.10 in
New York on January 31, up 21 percent against
the dollar and 27 percent against the German
mark from its lows of April 1980. The government proceeded to liberalize substantially exchange controls on international capital transactions. Also, Japan's foreign exchange reserves
rose to $22.7 billion by the end of January.
Meanwhile, however, domestic demand had
stalled and, with the improvement in Japan's
external position, the authorities had begun to
relax the tight stance of policy after mid-1980.
Yet, by early 1981, consumption and residential
construction continued to falter and business
fixed investment, previously the only domestic
source of strength, was also decelerating rapidly.
The growth of the monetary aggregates had
slowed, and yen money market rates softened.
Inflationary pressures had eased, partly reflecting the dampening impact on import prices of the
yen's appreciation, so that wholesale-price inflation had dropped from a year-on-year rate of 24
percent in the spring of 1980 to about 5 percent in
early 1981. Meanwhile, in the exchange market
the rising dollar had eroded the yen's earlier
buoyancy, but the rate nonetheless remained
relatively stable around ¥ 208 through midMarch. Against the currencies on the Continent,
the yen held up relatively well even while those
currencies benefited from a sharp rise in their
interest rates. In these circumstances, domestic
pressures on the authorities intensified during
February and March to adopt reflationary measures, including a reduction of interest rates.
On March 17, the government introduced a
fiscal package that accelerated budgeted public
works expenditures and provided low-cost financing to promote housing construction, to aid
small companies, and to boost exports of industrial plants. These measures were generally
thought to be modest so as not to compromise
materially the goals of reducing the budget deficit
Foreign Exchange Operations
in the fiscal year ending March 1982 and of
easing the burden on the markets of financing the
central government's large fiscal requirement. At
the same time, the Bank of Japan lowered its
discount rate 1 percentage point to 6lA percent
for the third cut in less than a year, reduced
banks' reserve requirements, and then followed
up by substantially relaxing window-guidance
ceilings on the growth of bank lending.
But the authorities were also convinced that
the large interest differentials adverse to the yen
might trigger volatile capital outflows. Japan's
interest rates were the lowest among the major
industrial countries. The liberalization of Japanese exchange controls also provided greater
opportunities for capital outflows. Among other
things, the Bank of Japan introduced a new
lending arrangement similar to the special Lombard facility in Germany, enabling the central
bank to charge more than the official discount
rate on its lending to commercial banks whenever necessary to counter potentially excessive
capital outflows or downward pressures on the
yen.
In the event, sentiment toward the yen in the
exchanges turned more cautious during the
spring. Though market participants were still
confident in the thrust of Japan's economic policies and the overall performance of the economy, there were reasons to question whether the
rapid improvement in the current account would
continue. The likelihood of trade restrictions
against Japan's automobile exports dimmed
prospects for future export earnings, as did selfimposed export restraints by Japanese manufacturers in industries faced with growing protectionist sentiment abroad. Spreading recession in
major overseas markets clouded export prospects even further. Consequently, the trade surplus was thought unlikely to widen sufficiently to
cover rising interest payments on nonresident
yen deposits and on tourism outflows, which
were significantly boosting Japan's traditional
services deficit.
In these circumstances, large interest differentials adverse to yen-denominated assets began to
show through. Japanese resident institutions and
individuals—already in the process of adjusting
to newly liberalized foreign exchange controls—
stepped up their export of capital as interest
695
differentials favoring the dollar widened from
about 7 percentage points in March to more than
11 percentage points in May and early June. In
particular, life insurance companies, pension
funds, and bank trusts took advantage of access
to overseas investments by establishing a presence in the U.S. capital markets at yields more
attractive than those available in Japan. As a
result, the yen declined along with other major
foreign currencies against the dollar, dropping
73A percent from mid-March levels to
224 by
early June.
These developments put pressure on Japan's
capital markets, complicating the authorities'
efforts to bolster domestic growth and to finance
the large government deficit at current yields.
The authorities were concerned that raising the
national bond coupon, a key indicator of overall
long-term interest rates in Japan, would lead to
higher lending rates throughout the economy.
Reluctant therefore to increase new issue rates
as rates in the secondary market rose, the government had difficulty arranging the June issue of
10-year bonds and had to withdraw the July issue
altogether. In the exchange market, concern
developed that these strains in the capital market
would spill over into the currency markets, as
foreign investors decelerated their purchases of
Japanese assets or even began selling off some of
their holdings. Moreover, the growing perception that the authorities would find it difficult to
support the yen by raising Japanese interest rates
contributed to a further decline in the yen to
228 by the end of June.
These pressures against the yen intensified
considerably during July, as the long-awaited
decline in U.S. interest rates failed to materialize. With little prospect that large interest differentials adverse to the yen would narrow and that
the currency would soon rebound against the
dollar, a broad range of participants accelerated
their sales of yen in an effort to limit losses. At
the same time, foreign corporations stepped up
short-term yen borrowings to meet financial
needs in other currencies, while commercial
leads and lags also shifted against the yen. As the
flow of funds gathered force, the decline of the
yen began to outpace the fall of the European
currencies against the rapidly strengthening dollar.
696
Federal Reserve Bulletin • September 1981
To cushion the yen's decline, the Bank of
Japan intervened in Tokyo, substantially on occasion, and in New York through the Federal
Reserve Bank of New York as agent. However,
Governor Mayekawa, of the Bank of Japan,
explained that, while intervening to smooth erratic rate movements, the Bank of Japan did not
consider it necessary to adopt exceptional measures to stop the yen's slide. The authorities
asserted in numerous public statements that the
yen had depreciated by more than was justified
in terms of economic fundamentals and was
therefore likely to move back up over time.
Consumer price inflation was abating rapidly
and, given the moderate outcome of the wage
round negotiated in the spring, could be expected
to remain the lowest among the major industrial
countries. Meanwhile, exports were proving
stronger than earlier anticipated, despite negotiated export restrictions, and were contributing to
a modest surplus on the current account. The
authorities also noted that short-term bank flows
were still positive, even while Japan's long-term
capital account had moved into deficit. This
result largely reflected the fact that the covered
cost of borrowing dollars was often less than
local yen financing, creating incentives for both
Japanese banks and nonbanks to borrow abroad.
But in the exchange market, the yen continued
dropping sharply to close at 240.35 on July 31,
down 163/4 percent against the dollar over the sixmonth period under review but unchanged
against the German mark on balance. Exchange
market intervention by the authorities contributed to a decline of $278 million in Japan's foreign
exchange reserves during July. Nonetheless, at
the end of July Japan's reserves stood at $23.9
billion, up $1.2 billion on balance, mostly reflecting interest receipts on Japan's reserve holdings.
STERLING
By early 1981, the British economy had shown
substantial improvements in both price and current-account performance. Inflation had fallen
back for several months to single-digit rates from
the level of 20 percent or more a year earlier. The
current account moved into a surplus of $6.6
billion for 1980, making the year-on-year im
provement of $10 billion the largest of any industrial country and in sharp contrast to the general
experience. These considerable achievements
reflected a continued expansion of North Sea oil
exports and an improvement in the non-oil terms
of trade. They also reflected a sharp slashing of
inventories, which was but one feature of the
severe recession that had gripped the economy
for more than a year. Indeed, with corporate
profits squeezed by persistently high interest
rates, wages, energy prices, and a strong pound,
British companies had also been forced to reduce
fixed investment and to lay off workers in order
to restore their liquid-asset positions. Even so,
the growth of sterling M-3 remained well above
its target range, reflecting the continuing demand
for bank credit, the unexpectedly large publicsector borrowing, and the ending of the supplementary special deposit scheme in June 1980.
The Bank of England, therefore, kept monetary
policy restrictive, and British interest rates had
been slow to decline.
Britain's improving external position and relatively high interest rates had combined to push
sterling up to a six-year high against the dollar
and to rise even further against the continental
currencies. By the end of January, however, the
pound eased back to trade around $2.3630
against the dollar and was at 104.4, according to
a new trade-weighted index adopted by the Bank
of England on February 2. Meanwhile, the British authorities had taken advantage of the
strength of sterling to repay before maturity a
number of international loans taken up in the
mid-1970s. As a result, British foreign exchange
reserves were down from their 1980 highs but
still stood at $18.7 billion.
By early February, the pace of capital outflows had accelerated, as U.S. interest rates had
become unexpectedly firm, and the dollar was
generally strong in the exchanges. Although nonresidents continued to add to their sterling balances, there was increasing evidence that British
residents were taking advantage of the elimination of exchange controls to diversify their investment portfolios into other currencies. Moreover, the protracted recession in the United
Kingdom was weighing more heavily on market
psychology. The persistent strength of sterling
had generated bitter complaints from British
Foreign Exchange Operations
industrialists over narrowing profit margins and
declining product market shares. The rate of
unemployment was rising more quickly and
headed toward 10 percent. Also, a government
decision to modify its plans for closing uneconomic coal mines, following an outburst of
strikes by the nation's coal miners, was interpreted in the press as indicating the government's willingness to ease stringent policies
aimed at making the economy work more efficiently. As a result, expectations developed in
the market that the U.K. authorities might take
advantage of the improvements both in inflation
and in the current account to soften the restrictive policy stance and to provide some stimulus
to the domestic economy.
Therefore, as the market awaited the March 10
budget, talk circulated that the authorities would
cut the minimum lending rate by perhaps as
much as 3 to 4 percentage points and allow a
downward adjustment in the exchange rate as a
means of stimulating economic activity. In this
environment, the pound eased back against the
dollar in line with other European currencies.
But after mid-February, when interest rates in a
number of other European currencies were
sharply increased, commercial leads and lags
moved heavily against sterling and some OPEC
members shifted funds out of the pound. As a
result, by early March the pound broke stride
with the currencies of the Continent and fell
against the dollar some 8 percent to as low as
$2.1750.
For their part the authorities remained concerned about the possibility of a resurgence in
monetary growth and inflation and about the
persistence of a large public-sector borrowing
requirement. In his March 10 budget speech,
Chancellor Howe reiterated the government's
determination to maintain a restrictive policy
stance until inflation came under control and
called for increases in indirect taxes to reduce
the projected public-sector borrowing requirement by £ 3 billion to £ IOV2 billion. This tightening of fiscal policy was coupled with a 2 percentage point reduction of the central bank's
minimum lending rate to 12 percent per annum as
well as with the lowering of the target for sterling
M3 growth to a 6 to 10 percent annual range. The
lowering of the minimum lending rate had al
697
ready been discounted in the money and exchange markets. After the uncertainties about
the budget had been cleared away, sterling
moved up along with other European currencies
as U.S. interest rates eased back from earlier
highs. Thus, the pound recovered to $2.2960
around mid-March on a reflow of capital and a
reversal of previously adverse commercial leads
and lags. Against the dollar, sterling was a net 3
percent lower from the levels at the end of
January. Against other European currencies, it
was also lower by about 7 percent, so that in
effective terms the pound was trading about
.100.2, a decline of 4 percent.
By April, British interest rates had settled
around levels similar to those in Germany. Anecdotal information suggested that the economy
was leveling off. But actual economic and financial trends were unusually difficult to monitor. A
civil servants' strike had the effect of both delaying tax payments to the Exchequer and impeding
the collection of key trade and financial statistics. The Bank of England was proceeding with
its plans to change operating techniques for
monetary control so as to increase the role of
market forces in determining short-term interest
rates. And, as each step of the process was
announced, the markets were somewhat unsure
of the near-term implications. The pound eased
along with other currencies against the dollar
throughout the spring. By late May, it was about
10 percent lower at around $2.07. In effective
terms, it was trading at 98.8.
During June the focus of market attention
shifted to sterling. For some time, the energy
situation had shielded the pound from a number
of adverse factors. These included Britain's loss
of competitiveness arising from earlier high rates
of inflation and a strong exchange rate, a seriously deteriorating economy, and a weakening of
political support for the government's continuing
restrictive policies. Thus, when an increasing
oversupply of oil internationally prompted a significant cut in the price of North Sea crude, an
important element of favorable market psychology was shattered and the vulnerability of sterling
began to show through.
The pound, therefore, came under heavy selling pressure during June and July, dropping
through the psychologically important level of
698
Federal Reserve Bulletin • September 1981
$2.00. Market participants were doubtful that the
government would support the rate through a
large increase in interest rates in view of the
continuing recession. Talk circulated in the markets that exchange controls might be reimposed,
prompting even further selling of sterling.
Thereafter, sterling stabilized, as British interest rates rose after the Bank of England began
providing funds to the money market above
rather than at the minimum lending rate. Also,
following the resolution of the civil servants'
strike, a pickup in tax collections was expected
to tighten liquidity even more. The abatement of
civil disturbances gave an additional lift, while
Prime Minister Thatcher's proposal of a modest
spending program to encourage private-sector
hiring of young people was not viewed as a
significant departure from past restrictive policies and thus tended to reassure the exchange
markets. As a result, sterling traded around $1.84
on July 31, for an overall decline of 22!/4 percent
against the dollar for the six-month period. In
effective terms, the pound declined ll'A percent
to 92.5 at the end of July.
Meanwhile, over the six-month period the
Bank of England maintained its policy of intervening lightly on both sides of the market to
smooth out sharp fluctuations in the rate. Accordingly, during the period under review, the
U.K. external reserves were affected mainly by
the repayment and prepayment of loans. Britain's foreign exchange reserves declined $5.1
billion over the six-month period to $13.6 billion
on July 31.
FRENCH
FRANC
By the beginning of the period under review, the
French economy had moved into a recession that
was to prove deeper and more protracted than
many of the slowdowns then taking place elsewhere on the Continent. Industrial production
was down 10 percent from the level of the
previous year, and unemployment had risen in
line with the growth of the labor force to 7.3
percent. At the same time, the sharp increase in
oil prices of recent years and lagging productivity
growth had contributed to a weakening of
France's external position and a worrisome dete
rioration in its price performance. France's current account had swung back into a deficit of $7
billion, and inflation had accelerated above the
two-digit level once more to a rate of 13 percent.
Faced with these setbacks to the five-year
program of economic stabilization, the French
authorities remained committed to the priorities
of curbing inflation and maintaining the strength
of the French franc. Whatever stimulus that had
been provided to the economy in 1980 and again
in late February 1981 was modest in size and was
intended to contribute eventually to export competitiveness. Monetary policy remained restrictive. The Bank of France had reduced its growth
target for M2 for 1981 to 10 percent, and the
already tight limits on banks' credit growth were
lowered 1 percentage point on average. Interest
rates in France remained high relative to interest
rates in most other countries on the Continent. In
addition, the government continued to encourage
large enterprises in France to take advantage of
capital markets abroad to finance on a long-term
basis large investment projects at home.
In the exchange markets, the current-account
deficit continued to be more than offset by capital inflows, reflecting the attraction of interestsensitive funds from abroad and efforts of domestic residents to meet local financing needs in
foreign currencies. In addition, the market's attitude toward the French franc was generally more
positive than for other European currencies.
France's current-account deficit, though a
source of concern, was considerably smaller
than the one for Germany, its principal trading
partner. The government's fiscal deficit, though
greater than the preceding year, was only V/2
percent of overall gross national product, so that
financing the deficit was not as much of a burden
as in many other countries. France's traditionally good relations with Middle Eastern countries
were generally thought in the market to make it
easier for France to attract funds from investors
seeking an alternative to the dollar. These longstanding ties were also thought to help protect
the nation from short-run disruptions in oil supplies, while France's commitment to the development of nuclear energy was seen as providing
a more secure energy source in the longer run.
Moreover, with the approach of presidential
elections later in the spring, market participants
Foreign Exchange Operations
believed that the government would take extraordinary steps if necessary to bolster the franc
should it come under selling pressure. Meanwhile, France's foreign exchange reserves had
swelled to an impressive $26.5 billion by
January 31.
In this positive psychological climate, the
franc had traded at or near the top of the EMS for
almost two years, even as it declined against the
generally rising dollar to FF 4.90 by the end of
January. Early in February, the franc continued
to decline more slowly against the dollar than did
the other EMS currencies, falling some AVi percent to FF 5.1150 by midmonth. Within the
EMS, it remained at its upper intervention limit
and the French, German, and Belgian central
banks intervened to keep the franc within its 2XApercent band. In late February, however, the
French franc fell below the German mark in the
EMS, following action by the German Federal
Bank to raise interest rates in Germany. With
French interest rates increasing not as rapidly as
elsewhere, funds shifted out of francs and commercial leads and lags swung from francs to
marks. Thus, by early March the franc had
settled about lA percent below the mark in the
EMS. Against the dollar, it fluctuated in line with
other European currencies, recovering by the
end of March to early-February levels. Nevertheless, France's foreign exchange reserves continued to strengthen, rising $1.3 billion over the
February to March period, to $27.8 billion, reflecting in part intervention within the EMS.
Within France, the performance of the economy was becoming a matter of increasing public
debate. Output had stabilized, but there was little
evidence of an upturn. Unemployment was rising
even more rapidly than before. Inflation remained high. And the current-account deficit
showed no sign of narrowing. In the exchange
markets the franc continued to be bolstered by
relatively high nominal interest rates through
mid-April. Thereafter, as the electoral contest
went through the first round of a two-stage
voting procedure and forecasters indicated that
the outcome would be close, some international
investors began moving funds out of the franc.
But, with the Bank of France now intervening to
keep the franc from slipping within the EMS, the
rate continued to hold steady against the mark.
699
In this manner, the franc declined 8V<\ percent
against the dollar to FF 5.3950 by May 8, just
prior to the second round of voting.
Mitterrand's election came as a surprise to the
exchange markets. With the Paris stock market
plummeting, massive amounts of funds began to
be moved out of the franc. These flows largely
took the form of commercial leads and lags but
also represented withdrawals of deposits and
liquidations of investments. These selling pressures quickly pushed the franc from the middle
to the floor of the joint float and to FF 5.5875
against the dollar late in May.
The authorities responded quickly to contain
these selling pressures. The Bank of France
intervened heavily to keep the franc within its
2V4-percent band against the mark. Effective
May 14, the central bank raised reserve requirements on sight deposits and eliminated the special reserve requirement on nonresident deposits
that had been imposed to curtail capital inflows
late in 1980. Also, it raised the discount rate on
seven-day Treasury bills by AVi percentage
points to 18 percent, while day-to-day rates in
the money market jumped from 13!/2to 16 percent. At the same time, leading economic advisers to the new president reaffirmed France's
commitment to the EMS arrangements.
Once in office the new government took further action to stabilize the franc by tightening
exchange controls. With respect to trade financing, it reduced the scope for leading and lagging
commercial payments and receipts to one calendar month (retroactive to May 1). Regarding
portfolio investment in foreign currencies, residents were required as of May 22 to purchase the
exchange from other residents, thereby establishing a separate market for these transactions
and removing them as a source of pressure on the
exchange rate. For its part, the Bank of France
hiked its discount rate on seven-day Treasury
bills another AVi percentage points to 22 percent
and day-to-day interest rates moved up as high as
20 percent.
In response to these stringent moves, the franc
came into demand as exporters scrambled to
convert foreign currency receipts ahead of the
month-end. By the end of May, therefore, the
franc was off its lows against both the mark and
the dollar. Thereafter, the new exchange control
700
Federal Reserve Bulletin • September 1981
measures were expected to generate a continuing
reversal of leads and lags well into the summer.
Also, the tightening of credit conditions and the
sharp rise in Euro-French franc interest rates to
around 25 percent helped discourage nonresident
outflows. Thus, the franc soon settled in around
the middle of the EMS, a position it was generally to maintain through the end of July.
As a result, the franc traded comfortably within the EMS during the June 21 parliamentary
elections that provided a sufficient majority to
the new government to implement its economic
program. By July, the authorities were proceeding with a program to reduce unemployment by
expanding the economy and increasing its productive potential, while also carrying through a
long-standing plan to nationalize key sectors of
the economy. In particular, they announced
plans to increase social-benefit expenditures, to
raise the minimum wage, and to establish new
programs for education, housing, and industrial
retraining.
Even with tax increases to generate more
revenue, the fiscal deficit was expected to double
for 1981. The government also moved forward
with plans to nationalize 11 industrial groups.
Commercial bank lending ceilings were raised
and minimum reserve requirements lowered to
allow greater expansion of bank lending.
With the exchange markets now more settled,
the Bank of France was also able to permit shortterm interest rates to decline gradually, so that
by the end of July the central bank's discount
rate on seven-day Treasury bills was down to
18^2 percent and day-to-day rates had eased to
173/4 percent. Even so, the market remained
pessimistic over the outlook for the franc because France had adopted strongly stimulative
policies while other countries were still emphasizing restraint. With the dollar rising across the
board, the franc eased by the end of the month to
FF 5.8775, down 20 percent on balance for the
six-month period. Even within the EMS the
market found reason to contrast the recent reflationary measures of the French government with
the budget-cutting efforts taking place in Germany, especially after the Ottawa summit meetings.
Even so, the franc held its own around the
middle of the joint band to close the period
trading at FF 2.3728 against the German mark,
down 3 !/4 percent on balance over the six-month
period. Meanwhile, France's foreign exchange
reserves, which had dropped $4.5 billion during
May and June, declined only another $558 million to $22.6 billion, to register a net decline of
$3.8 billion from February to July.
ITALIAN
LIRA
The Italian lira was under considerable downward pressure coming into the period as the
market responded to a swing in Italy's current
account back into heavy deficit, the persistence
of relatively high inflation at home, and the lack
of progress in containing government expenditures and curbing the public-sector deficit. The
$15 billion deterioration in Italy's current account over 1980 to a $10-billion deficit had reflected in part an adverse turn in Italy's terms of
trade resulting from the sharp increase in dollar
prices for energy and other imported products. It
reflected as well the weakening demand in Italy's
principal export markets. In addition, the rapid
pace of inflation, at 20 percent by late 1980, had
brought into question the competitiveness of
Italy's export sector, especially in those countries participating in the fixed exchange rate
arrangement of the EMS. Moreover, the large
and growing public-sector deficit, which amounted to 11 percent of gross domestic product,
further clouded the prospect for reducing inflationary pressures in the near term. That deficit
reflected a number of deep-seated problems including the high level of wage settlements, the
pervasiveness of a wage indexation system, and
the lagging productivity growth and weakening
capital structure of Italy's large governmententerprise sector.
These problems had come into focus early in
1981 in the absence of progress in improving
price or trade performance at a time when industrial output had rebounded from earlier depressed levels. The government had proposed a
medium-term program intended to cut current
spending, to stimulate investment, and to finance
increased investment spending abroad. But the
pace of public spending had quickened and monetary growth had accelerated. In this environment, the lira had fallen against the dollar to a
Foreign Exchange Operations
record low in New York trading of LIT 1,004.50
by the end of January. Within the EMS, the lira
had required steady intervention support by the
Bank of Italy to hold its position. Even so, Italy's
foreign currency reserves stood at a relatively
high $20.5 billion.
Meanwhile, the task of controlling inflation
and supporting the lira in the exchanges had
fallen on the Bank of Italy, which acted on
January 31 to tighten control over expansion of
money and credit. Ceilings on bank lending were
extended to include loans under LIT 130 million
and foreign currency loans, both previously excluded from limitation. The new ceilings were
made effective March 31, at which time loans
coming under the new controls were to be reduced to the levels at the end of December and
then subject to a new and lower set of growth
limits for the remainder of the year. Credit
extensions above the limits were made subject to
a deposit requirement of 50 percent in noninterest-bearing accounts at the central bank. As
before, foreign currency loans to exporters were
excluded. These actions improved exchange
market sentiment toward the lira early in February. Though the lira eased against the dollar,
which was strengthening at the time, it kept
generally in line with other currencies in the
EMS.
During February, however, the most recent
information suggested a further widening of the
trade and current-account deficits and intensification of domestic inflationary pressures. As a
result, the lira failed to recover late in the month
by as much as the currencies of other continental
countries, which were being bid up in response
to sharp increases in short-term interest rates in
their domestic markets. By mid-March the lira
had slipped nearly 4 percent against the German
mark and was thus requiring intervention support to hold its position within the EMS. As the
March 31 deadline approached for cutting back
on foreign currency loans under the new credit
ceilings, importers and other residents came into
the market as buyers of foreign currency. These
transactions added to the pressure against the
lira, which fell through Italy's divergence threshold within the EMS even as the Bank of Italy
stepped up its intervention support. These operations contributed to a decline of $4 billion in
701
Italy's foreign currency reserves during February and March.
In response to these exchange market pressures, a series of actions were taken to support
the lira over the weekend of March 21-22. They
included a 6 percent downward adjustment of the
lira's central rate within the EMS, which was
reflected in the market by a 2!/2-percent depreciation against the dollar. Also, to absorb liquidity
the Bank of Italy hiked reserve requirements
from 15% percent to 20 percent above the levels
at the end of February on both resident and
nonresident lira-denominated bank deposits. It
also raised the discount rate by 2xh percentage
points to 19 percent, the first change in this rate
since September 29, 1980. In addition, the government announced its intention to propose measures to Parliament to offset the potential effect
on the government deficit of several budgetary
amendments passed by Parliament in preceding
weeks. The proposals focused on cuts in current
spending in line with those announced during the
winter, which, when approved by Parliament,
would be sufficient to bring the projected deficit
for the government in 1981 back to the LIT 37.5
trillion level originally envisaged.
After these measures and as a result of its new
EMS parity, the lira moved from the bottom to
near the top among the EMS currencies. Also,
the expansion of money and credit began to slow
in response to the tightening of monetary policy.
Skepticism remained, however, over the fiscal
situation. As a result, the lira soon began to ease
toward the middle of the EMS and the Bank of
Italy intervened on occasion to limit arty slippage.
During April and May, as U.S. interest rates
had again turned higher, short-term funds were
drawn increasingly from Italy. Thus, the lira
became more vulnerable to downward pressure.
Moreover, at home Italy's inflation problem had
again become a major focus of public debate.
Exchange market participants took note that the
Parliament had not yet acted on either the shortterm austerity measures proposed by the government in March or the three-year program under
discussion for months. In addition, a major political controversy diverted attention away from
economic matters. When it reached a crisis in
late May that brought down the Forlani govern-
702
Federal Reserve Bulletin • September 1981
ment, any chance of near-term action on policy
initiatives evaporated. Moreover, by the end of
May, Italy's foreign exchange reserves had
dropped a further $2 billion to $14.5 billion.
To address the immediate pressures in the
exchange and financial markets, the Forlani government—acting in a caretaker capacity—imposed an austerity program by decree that included increases in certain public charges and
cuts of 5 to 10 percent in some categories of
government spending. These actions were intended to reduce the government deficit by about
IV2 percent in 1981 if approved by Parliament
within 60 days. The government simultaneously
imposed an import deposit scheme, also by decree, which required that all purchasers of foreign exchange place with the Bank of Italy a 90day noninterest-bearing deposit equal to 30
percent of the exchange transaction. These deposits had the effect of increasing the cost of
payments in foreign currency as well as cutting
into credit available for domestic purposes.
After these actions, the lira traded more comfortably within the EMS, enabling the Bank of
Italy progressively to scale back its intervention
support of the currency. Against the dollar, the
lira continued to decline but, in contrast to
preceding months, no more rapidly than other
continental currencies. During July the formation of a new government under the Republican
Giovanni Spadolini and the onset of seasonal
inflows from tourism gave additional support to
the lira. The Bank of Italy then became a sizable
net buyer of dollars for the first time during the
period under review. By the end of July, the lira
was trading at LIT 1,227.50, down on balance
22lA percent against the dollar and down 5 percent against the German mark. Meanwhile, Italy's foreign currency reserves rose $2.0 billion
after the end of May to $16.5 billion at the end of
July for a $4.0 billion decline over the six-month
period under review.
OTHER CURRENCIES
WITHIN THE
EUROPEAN MONETARY
SYSTEM
In early 1981, the countries whose currencies are
members of the EMS joint floating arrangement
faced similar problems. Most were dependent on
capital inflows to finance current-account deficits. Fiscal deficits had grown and were exerting
increasing strains on domestic capital markets,
and inflationary pressures appeared to be accelerating even as the domestic economies were
weakening. Although monetary policies were
generally restrictive, slowdowns in the domestic
economies and rising unemployment were seen
in the market as constraining the authorities from
increasing interest rates further to maintain the
currencies' attractiveness to international investors and portfolio managers. Some countries had
been able to attract substantial amounts of private funds, and others looked to governmentarranged loans from abroad as a means of achieving external balance and stabilizing their
currencies within the joint float. But, in either
case, the EMS currencies were vulnerable to
capital outflows attracted by relatively high interest rates in other countries and to an increasingly bullish sentiment toward the dollar. As a
result, these currencies were continuing to decline as the six-month period under review
opened.
Within the EMS there were also considerable
strains and the 21/4-percent band for all but the
Italian lira was fully stretched. Requiring persistent support at the bottom of the band was the
Belgian franc, along with the German mark. The
Belgian franc was weighed down by concern
over a domestic economy that was undergoing
difficult structural adjustment, experiencing rising unemployment, and suffering from a fiscal
deficit that had mounted to more than 10 percent
of gross national product. The current-account
deficit also was large, and both deficits were
being financed to a large extent through government-arranged loans denominated mostly in dollars and other Eurocurrencies. Close behind the
French franc at the top of the band was the
Dutch guilder. It was helped by the relatively
favorable current-account position of the Netherlands and interest rates that were high enough
to continue to attract nonresident investment in
long-term bonds denominated in guilders. The
Danish krone and Irish pound fluctuated around
the middle of the band, and the Danish and Irish
authorities relied heavily on conversions of foreign borrowings to keep their currencies trading
comfortably within the joint float.
Foreign Exchange Operations
This configuration of currencies changed
abruptly in mid-February, when the German
authorities reacted to intensifying selling pressure against their currency by tightening monetary policy. German interest rates rose considerably, especially rates on call money, and the
mark snapped up within the EMS, rising from the
bottom to the top of the joint float. As the mark
advanced within the EMS, the French franc and
Dutch guilder came under modest selling pressure against the mark. But these pressures were
soon contained and the currencies stayed in the
upper half of the European Community (EC)
band after the Bank of France and the Netherlands Bank, following quickly on the measures of
the German Federal Bank, raised their own
interest rates by 1 to 1 xh percentage points. The
Danish krone and the Irish pound eased into the
lower half of the joint float but were kept from
falling further by modest intervention.
This changing configuration of currencies
within the EMS left the Belgian franc all the
more exposed at the bottom of the joint float.
Belgium's fiscal and current-account deficits
continued to deteriorate. The authorities were
reluctant to raise domestic interest rates because
the economy was still weak and labor unrest was
already festering in some of the most depressed
industries. The coalition government was having
difficulty agreeing on a program of expenditure
cuts and other measures to reduce the fiscal
deficit. And the prolonged negotiations on economic policy were casting doubt in the exchange
markets about the government's ability to deal
with the country's economic problems.
Against this background, the Belgian franc
remained pinned to its lower intervention point
as the EMS group of currencies gained against
the dollar late in February. In March, following a
downward adjustment of the Italian lira, which
put it in the upper half of its new band, the franc
was exposed to even greater selling pressure.
Heavy support had to be provided for the Belgian franc mainly by sales of German marks and
French francs. The Belgian National Bank increased its official lending rates in stages over the
month. By March 26, its discount rate was up 1
percentage point to 13 percent and its Lombard
rate was up 3 percentage points to 15 percent.
Also during the month, the government an-
703
nounced parts of its program to cut the fiscal
deficit by BF 30 billion. However, the pressures
against the Belgian franc remained intense as
continuing shifts in commercial leads and lags
aggravated the exchange market impact of the
large current-account deficit. On March 30, the
government resigned, and immediately thereafter the National Bank hiked its discount and
Lombard rates another 3 percentage points. It
also imposed measures to ensure that financial
institutions would not restore their liquidity by
unloading government debt and would not add to
outflows of capital by extending credits to the
private sector. To restore confidence in the
franc, a one-month freeze on wholesale and retail
prices was imposed effective April 2. These new
initiatives helped ease the immediate pressures
against the Belgian franc.
During April and early May, trading became
more comfortable within the EMS, which nevertheless declined progressively against a generally
strengthening dollar. The mark remained at the
top of the band, providing the German Federal
Bank an opportunity to improve its position
within the FECOM by acquiring small amounts
of other EMS currencies in the market and by
having its currency used in intervention to support other EMS currencies. The Belgian franc
gradually came into better balance, moving off
the floor of the EMS in a favorable reaction to
the tightening of monetary policy. The Dutch
guilder, by contrast, declined into the middle of
the band as the market reacted to the failure of
Dutch interest rates to keep pace with those
abroad and to uncertainties ahead of parliamentary elections. The Danish krone also eased
slightly within the joint float, while the Irish
pound stayed near the bottom of the band.
Intervention by the central banks of Belgium, the
Netherlands, Denmark, and Ireland was modest
and conducted mostly in dollars to stabilize the
position of their currencies in the EMS. As the
French presidential elections moved through the
first round of balloting, by contrast, official purchases of francs against both marks and dollars
became heavy as the Bank of France acted to
steady the franc in the middle of the joint float.
Later in May, the announcement of Mitterrand's victory in the French presidential elections brought the French franc under immediate
704
Federal Reserve Bulletin • September 1981
pressure in the EMS and generated skepticism in
the market over the commitment of a new
French government to the EMS institutions. The
French authorities soon acted to support their
currency by tightening exchange controls and by
raising interest rates sufficiently to trigger some
reversal of leads and lags. In addition, to reassure the markets, both President Mitterrand and
Chancellor Schmidt publicly reaffirmed their intention to cooperate in upholding the EMS arrangements. Meanwhile, the Dutch guilder, aided by fairly moderate but persistent intervention
by the Netherlands Bank, managed to maintain
its position in the upper half of the joint float.
Also, the Danish krone and the Irish pound
remained stable within the EMS.
During June and July, the Belgian franc came
under renewed selling pressure as the market
reacted to a progressive lowering of domestic
interest rates and to the new government's lack
of progress in reducing the fiscal deficit. The
central banks met this pressure with forceful
intervention, however, and by late July the currency had stabilized within its EMS band. Nevertheless, the market remained concerned about
the prospects for EMS countries, individually
and collectively. With sentiment toward the dollar becoming increasingly bullish during the summer, the EMS currencies as a group weakened
further. By the end of July, the EMS currencies
had declined against the dollar by W/A percent
to 22lA percent on balance over the six-month
period.
CANADIAN
DOLLAR
The Canadian government sought to harness
Canada's rich natural resources to generate higher economic growth and to curb the deeply
entrenched inflationary pressures. Its plans for
achieving these objectives were embodied in
proposals submitted late in the year to Parliament for the 1981 budget and for a national
energy program. According to the budget, the
federal deficit would be substantially reduced
over several years with cuts, among other things,
in transfers to the provinces in the context of the
next federal-provincial review of financial arrangements in 1982. The largest contribution to
cuts in the fiscal deficit, however, came from
changes in taxation and subsidies proposed in the
energy program. According to the proposed energy program, the federal government would
unilaterally establish a single price for crude oil
at levels, though higher than before, still well
below international levels. Unification of domestic and imported crude oil prices would be
achieved through new levies and a gradual elimination of the direct government subsidy on imported oil. Incentives for exploration and development would be provided in amounts varying
largely with the degree of Canadian ownership
and control of the enterprises concerned. A
federal tax on oil and gas revenues, together with
the increased levies, would considerably increase federal revenues.
In the exchanges, market participants questioned whether adequate incentives would remain to maintain the momentum of exploration
and development and to continue to attract the
sizable inflow of investment from abroad that
had buoyed the currency over previous years. In
addition, the pricing and revenue provisions,
together with other elements of the budget,
raised complex issues about the relationship between the federal and provincial governments.
Late in the year, the Canadian dollar had come
under selling pressure in the exchange markets,
dropping to its lowest levels since the 1930s. The
Bank of Canada had responded forcefully to
these selling pressures by intervening heavily to
cushion the Canadian dollar's decline and by
raising short-term interest rates. As a result, the
market had come into better balance and the spot
rate had recovered somewhat. It was still trading, however, not far above its recent lows at
Can.$1.1948 by the end of January. Meanwhile,
Canada's foreign currency reserves stood at $1.4
billion, and the government's outstanding borrowings under its $3.0 billion credit line with
foreign banks amounted to $300 million. Its $2.5
billion credit line with Canadian-chartered banks
remained fully available. (The latter credit line
was increased to $3.5 billion in June 1981.)
By February a more positive attitude developed for the Canadian dollar. Canada's trade
position had benefited from earlier shifts in the
terms of trade and an improved competitive
position. The trade surplus had climbed to an
Foreign Exchange Operations
annual rate of $10 billion in the last quarter of
1980, swinging the current account into an uncharacteristic surplus at a time when most industrialized countries were in deep current-account
deficit. Also, the Canadian economy was particularly buoyant late in 1980, led by expanding
exports. This pickup in activity contrasted with
the developing slowdown in much of Europe and
Japan.
The unexpected pickup in economic activity
and ensuing resurgence in Ml provided the basis
for the monetary authorities to put upward pressure on short-term interest rates. In addition, the
persistently high level of interest rates in the
United States and the potential for interestsensitive outflows to put renewed selling pressure on the Canadian dollar, and thereby to
exacerbate the inflationary situation, suggested
the desirability of allowing Canadian interest
rates to move gradually higher. Thus, Canadian
interest rates continued to increase in early
March, even as U.S. interest rates subsequently
edged lower, so that the usual pattern of interest
rate differentials favorable to Canada was reestablished. Also, on February 13, the Bank of
Canada, in announcing its monetary growth targets for the new year, cut the 1981 range for Ml
expansion 1 percentage point to a range of 4 to 8
percent.
In response to these various factors, the Canadian dollar strengthened in the exchanges by
about IV2percent to around Can.$1.1783 by midMarch. The Bank of Canada, continuing to intervene to moderate short-run fluctuations in the
currency, was a net purchaser of dollars in the
exchanges, as is reflected in the $378 million
increase in foreign exchange reserves during
February and March.
During the second quarter, however, the outlook for the Canadian dollar became more guarded. Negotiations to resolve disagreements over
pricing of oil and gas were dragging on without
clear results. Pending resolution of these issues,
the principal energy-producing province of Alberta had started to cut back oil production and
these cutbacks were leading to a previously
unexpected increase in Canada's oil-import bill
as well as clouding prospects for the anticipated
increase in federal government revenues. Also,
in the context of a federal government proposal
705
to repatriate the Canadian constitution, a number
of issues relating to the relationship between the
federal and provincial governments were being
reviewed by the courts. Meanwhile, a first-quarter slackening of export demand, particularly to
the United States, had cut into Canada's trade
surplus, and the current account appeared to be
returning to deficit. Moreover, domestic inflation
had accelerated, spurred partly by increases in
energy prices, and the consumer price index was
now rising to an annual rate in excess of 12
percent. Also, wage settlements had failed to
moderate, a number of industries were being hit
by labor strikes, and difficult wage negotiations
were approaching. Partly for domestic reasons
and partly in response to a renewed rise in U.S.
interest rates, the Bank of Canada allowed Canadian rates to move up further. Initially, however,
Canadian interest rates did not keep pace with
those in the United States so that by mid-April
the previously favorable interest differentials had
eroded. Thus, the Canadian dollar eased against
the rapidly rising U.S. dollar through the spring.
But it continued to move higher against the other
currencies, which were weakening more rapidly
against the U.S. currency.
Nevertheless, Canada headed back toward its
traditional pattern of current-account deficit financed by capital inflows. Canadian entities had
significantly stepped up their borrowing activities in the United States. With the Canadian
dollar still close to its historic lows against the
U.S. dollar and the monetary authorities having
demonstrated determination to defend the rate,
many borrowers took advantage of the relatively
firm U.S. currency to borrow abroad and convert the proceeds to finance domestic needs. At
the same time, however, Canadian residents
sought to make direct and portfolio investments
abroad, both in the energy sector to take advantage of more rapid price increases than permitted
at home and in other natural resource industries.
Canadian investors were also purchasing foreignowned assets in Canada. In this connection, a
few foreign-owned companies in Canada became
targets of unsolicited takeover bids, and widely
publicized fights for control drew attention to the
impact of the new pricing and tax provisions
favoring Canadian ownership in the energy sector. As market participants considered the impli-
706
Federal Reserve Bulletin • September 1981
cations for capital flows and debt-servicing requirements of shifting ownership of the natural
resource industries to Canadian ownership, the
Canadian dollar became increasingly vulnerable
in the exchanges.
Indeed, in July the Canadian dollar came under extreme downward pressure in a selling wave
that was precipitated by a few large commercial
orders. Once the decline began, market participants focused their attention on other factors
that were also adverse for the Canadian dollar.
With the U.S. dollar rising sharply against other
currencies at the same time, the Canadian dollar
fell further. To steady the market, the Bank of
Canada bought Canadian dollars heavily in the
market. It financed its intervention in part by
drawing $700 million under its $3.0 billion facility
with foreign banks, leaving its $3.5 billion stand-
by facility with the Canadian chartered banks
fully in place. Also, to support the exchange rate,
the Bank of Canada moved to push interest rates
sharply higher, and by the close of the period the
rate on three-month Treasury bills had climbed
to slightly over 20 percent, the highest in years.
On July 29, the Ministry of Finance announced
that it had obtained agreement from the major
Canadian banks to curb loans to finance takeovers of foreign companies. This action helped
bring the Canadian dollar market into better
balance after the period under review. But in the
interim the Canadian dollar dropped lower to
Can.$1.2344, registering a decline of 3V4 percent
for the six months between the end of January
and the end of July. Also, at the end of July,
Canadian reserves stood at $748 million, down
$600 million on balance.
•
707
Industrial Production
Released for publication September 16
Industrial production declined an estimated 0.4
percent in August, after a rise of 0.3 percent in
July. Most of the decline was due to a reduction
in the output of autos, trucks, and parts. Decreases also occurred in the output of home
goods, construction supplies, and materials. In
contrast, production of equipment continued to
advance. At 152.8 percent of the 1967 average,
the index for August was 7.5 percent higher than
that of a year earlier.
In market groupings, production of consumer
goods declined 1.0 percent in August, reflecting a
large reduction in the output of consumer durable goods. Autos were assembled at an annual
rate of 6.5 million units—more than 10 percent
below the rate in July; production of small trucks
for consumer use was reduced even more sharply. In addition, the output of home goods declined 1.8 percent, mainly because of a sharp
cutback in production of appliances. Output of
equipment—both business and defense—advanced further in August. Increases in commercial equipment and in building and mining equipment more than offset a decrease in the output of
transit equipment.
Output of materials declined xh percent, reflecting a reduction in output of metals such as
steel and of parts for consumer durable goods. A
Seasonally adjusted, ratio scale, 1967 = 100
Federal Reserve indexes, seasonally adjusted. Latest figures: August. Auto sales and stocks include imports.
Major market groupings
1967 = 100
Percentage change from preceding month
1981
1981
Julyp
Aug.e
Apr.
May
June
July
Aug.
Percentage
change,
Aug. 1980
to
Aug. 1981
153.4
152.4
151.6
150.0
146.8
151.2
184.5
102.4
155.3
143.2
155.0
152.8
151.9
151.1
148.5
141.4
151.4
185.4
102.9
155.1
142.9
154.3
-.1
.4
.6
.4
.5
.4
.9
.8
-.5
-.7
-1.0
.5
.7
.9
1.2
2.1
.9
.6
.5
-.1
-.9
.3
.1
-.1
.1
-.2
.5
-.5
.8
-.3
-.7
-2.0
.4
.3
.1
.1
-.3
-.8
-.1
.5
.7
.2
-.3
.6
-.4
-.3
-.3
-1.0
-3.7
.1
.5
.5
-.1
-.2
-.5
7.5
5.1
5.4
3.9
10.2
1.8
8.4
5.3
4.2
6.6
11.2
Grouping
Total industrial production.
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment...
Defense and space
Intermediate products . . .
Construction supplies .
Materials
p Preliminary.
e Estimated.
NOTE. Indexes are seasonally adjusted.
708
Federal Reserve Bulletin • September 1981
Major industry groupings
1967 = 100
Percentage change from preceding month
July"
Aug.
e
Apr.
May
June
July
Aug.
Percentage
change,
Aug. 1980
to
Aug. 1981
153.0
143.5
166.9
145.6
171.3
152.5
142.4
167.0
145.2
170.3
.3
.3
.4
-5.6
-.1
.5
.7
.3
.1
1.8
-.2
-.3
-.2
4.1
1.1
.3
.3
.5
3.3
-.7
-.3
-.8
.1
-.3
-.6
8.0
9.6
6.0
12.0
-1.3
Grouping
1981
Manufacturing
Durable
Nondurable
Mining
Utilities
p Preliminary.
e Estimated.
1981
NOTE. Indexes are seasonally adjusted.
large decline occurred in energy materials due to
a decrease in the output of coal, after its sharp
poststrike rebound, and to some reduction in the
generation and use of electricity.
In industry groupings, output of manufacturing
industries was reduced 0.3 percent, with a decline of 0.8 percent in durable goods manufacturing and a slight increase in nondurable
goods. Declines also occurred in the output of
mining industries and utilities.
•
*
*
The industrial production index has been revised from January 1980 to date in order to
include more recently available data and new
seasonal factors. A complete listing of the individual components, their sources, weights, and
SIC codes is available from the Business Conditions Section, Division of Research and Statis-
tics, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
The revised monthly data for the total index
(seasonally adjusted, 1967=100) follow:
Month
1980
January
February
March
April
May
June
July
August
September...
October
November . . .
December . . .
1981
January
February
March
April
June
July
Revised
Old
Difference
153.0
152.8
152.1
148.2
143.8
141.4
140.3
142.2
144.4
146.6
149.2
150.4
152.7
152.6
152.1
148.3
144.0
141.5
140.4
141.8
144.1
146.9
149.4
151.0
.3
.2
.0
-.1
-.2
-.1
-.1
.4
.3
-.3
-.2
-.6
151.4
151.8
152.1
151.9
152.7
152.9
153.4
151.7
151.5
152.2
152.2
153.0
152.9
153.4
-.3
.3
-.1
-.3
-.3
.0
.0
709
Announcements
NEW DISCOUNT
RATE
The Federal Reserve Board on August 20, 1981,
established a new borrowing rate for extended
credit to banks and thrift institutions that are
under sustained liquidity pressures.
The new discount rate will be the basic rate of
14 percent for the first 60 days of borrowing, 15
percent for the next 90 days, and 16 percent
thereafter. The basic discount rate of 14 percent
and the 4 percent surcharge that applies to large,
frequent borrowers of short-term adjustment
credit were not affected by this action.
The Board acted at this time in view of several
applications received in recent weeks for borrowing under the extended credit program. This
program was established and described in the
revision of Regulation A governing extensions of
credit by the Federal Reserve Banks following
the passage of the Monetary Control Act of 1980.
The program is available to commercial banks
and thrift institutions alike, including member
institutions of the Federal Home Loan Bank
System. In this latter connection, in an exchange
of letters between Chairman Pratt of the Federal
Home Loan Bank Board and Chairman Volcker
of the Federal Reserve Board, Chairman Pratt
indicated that "it is now desirable and prudent
for the Federal Home Loan Bank System to
encourage the Federal Reserve to supplement its
own efforts in funding members' liquidity
needs."
In his response, Chairman Volcker said: "we
greatly appreciate your cooperation, and that of
your staff, in developing practical approaches to
our provision of extended credit to members of
the Federal Home Loan Bank System."
The Federal Reserve's extended credit program is designed to help commercial banks,
savings and loan associations, savings banks,
and credit unions adjust to sustained liquidity
pressures. The Federal Reserve noted that deposit growth in the thrift industry has continued
over this year and the industry in general has
sustained a high level of liquidity despite pressure on the earnings of individual institutions.
In taking the action, the Board acted on requests from the boards of directors of the Federal Reserve Banks of New York, Philadelphia,
and Dallas. The discount rate is the interest rate
that is charged for borrowings from the District
Federal Reserve Banks. The Board also adjusted
the rate for "extended credit for special circumstances" to conform with the rate structure for
"other extended credit."
Subsequently, the Board approved similar requests from the Reserve Banks of Richmond,
Atlanta, Minneapolis, and San Francisco, effective August 21; of Cleveland and St. Louis,
effective August 25; of Chicago and Kansas City,
effective August 27; and of Boston, effective
September 3.
ADMINISTRATIVE
GUIDANCE
FOR IMPLEMENTING REGULATION
A
Following is the text of a letter sent September 2
from Chairman Volcker to Chairman St Germain
of the House Committee on Banking, Finance
and Urban Affairs regarding use by the thrift
industry of the discount window:
Your letter of September 1 asks about the present
status of thrift industry use of the discount window. As
you know, consistent with the Monetary Control Act
of 1980, the Federal Reserve System extends credit at
the discount window on the same terms and conditions
to banks and other depository institutions offering
transactions accounts or nonpersonal time deposits.
Credit is available for traditional short-term adjustment purposes and, as circumstances warrant, to meet
longer-term needs in the interest of assuring the sound
functioning of depository institutions at time of strains
on liquidity. These programs were set forth in the
revision of the Federal Reserve Board's Regulation A,
published in September 1980.
As I previously noted, almost 500 thrifts as a matter
of contingency planning had filed, or were in the
710
Federal Reserve Bulletin • September 1981
process of filing, the general agreement needed before
credit can be provided under any Federal Reserve
lending program. This number has now grown to about
a thousand. Such agreements are a normal part of the
System's relationship with eligible depository institutions, whether or not they actually borrow, and virtually all member banks have long had them in place.
In the light of several requests for extended credit
by thrifts, the Federal Reserve recently announced
discount rates applicable to extended credit for depository institutions facing sustained liquidity pressures.
Applications for such credit thus far have been fairly
limited, but a more sizable number of thrifts have
indicated they plan to apply. Many have specifically
asked about the conditions under which they would be
eligible to borrow under the extended credit program.
In all its lending programs, the Federal Reserve acts
essentially as lender of "last resort"—that is, borrowing institutions are expected to borrow from the Federal Reserve for liquidity purposes only when other
sources of funds are not reasonably available. This
long-established principle grows, among other considerations, out of need to reconcile Federal Reserve
lending policies with the basic requirement that the
growth of Federal Reserve credit—of which Federal
Reserve loans are one component—be restrained to
amounts appropriate to meet objectives with respect
to monetary and credit expansion.
Accordingly, to be eligible for discount window
credit at the Federal Reserve, a depository institution
must show that it has made reasonable efforts, under
prevailing market circumstances, to maintain fund
flows from usual sources, including special industry
lenders. Institutions that, despite such efforts, are
experiencing sustained liquidity pressures may obtain
advances under the extended credit program. The
discount rate applicable to such credit at present is 14
percent for the first 60 days, 15 percent for the next 90
days, and 16 percent thereafter. Advances may be
outstanding for up to 9 to 12 months, and if necessary,
credit may be extended beyond that period. However,
as borrowing is more extended, more rigorous or
definite measures to assure ultimate repayment of the
loan would be required. The credit will be fully collateralized, with collateral valued at 90 percent of its
estimated market price.
The amount of funds available to an individual
institution will, of course, depend on an assessment of
its need, in consultation with the institution's primary
supervisor or special industry lender, as appropriate.
If an institution is a member of the Federal Home
Loan Bank System, it is expected that its local Home
Loan Bank will maintain its outstanding credit to the
institution and will ordinarily also provide a portion of
the new borrowing need. Other borrowing institutions
are expected, as may be reasonable under existing
market circumstances, to show evidence of a continuing effort to maintain inflows from deposits and other
market sources, and as appropriate to draw on existing
bank lines. Moreover, while obtaining extended credit
at the discount window, borrowers are expected to
draw upon internal liquidity (including federal funds
sold) to the extent such liquidity is in excess of their
minimum operating needs.
Borrowing under the extended credit program may
also involve a number of other asset adjustments by
the borrower. Sales of longer-term assets (such as
government and government-related securities, corporate bonds, or mortgages) will be encouraged when
they can be accomplished without unreasonable loss.
Outstanding loan commitments may be accommodated, and some minimal new lending might be needed for
an institution to remain viable in serving its immediate
community and existing depositors or to meet requirements associated with issuance of "all-savers" certificates. Maintaining a presence in the market in "mortgage banking"—that is, originating and promptly
placing loans with other investors—would also be
consistent with the program. However, borrowing
institutions would not be expected to undertake loan
expansion programs beyond this framework.
When the sustained liquidity pressures that caused
the institutions to borrow from the Federal Reserve
abate, the institution is expected promptly to begin
reducing its indebtedness to the Federal Reserve. To
insure full understanding and effective administration
of the program, each borrower is expected to work out
a written plan with the Federal Reserve Bank that
details how it expects to strengthen its financial position and encourage a reflow of funds from other
sources. The Federal Reserve will, in the process,
consult closely with the borrower's applicable supervisory agency.
The administrative guidance provided Federal Reserve Banks as a framework for appraising individual
applications under the extended credit program is as
follows. It should be understood, of course, that
discretion and judgment must necessarily be exercised
by the lending officers familiar with the circumstances
of the particular borrower.
Administrative Guidance
Eligibility. To be eligible for extended Federal Reserve credit, an institution will have to show that it is
experiencing sustained liquidity pressures despite reasonable efforts, under prevailing market circumstances, to maintain fund flows from usual sources,
including special industry lenders.
Operating plan. To insure effective administration
of the program, each borrower as a condition of the
loan is expected to work out a written plan with the
Federal Reserve Bank, spelling out a specific method
for strengthening its financial position and for encouraging a reflow of funds from private sources within a
reasonable period of time. In developing this plan, the
Federal Reserve will consult closely with, and expect
concurrence from, the borrower's applicable supervisory agencies. Among other things, the plan will
include a financial forecast that identifies the institu-
Announcements
tion's expected operating plans, its projected funding
needs, the economic assumptions on which these
projections are based, and the specific steps the institution intends to take to improve its liquidity position
and repay its borrowing. If the urgency of a borrower's
need for funds provides insufficient time for working
out the full details of the borrowing plan, Federal
Reserve credit will at the outset be advanced on a dayto-day basis until the plan for extended borrowing can
be completed.
Loan amount. Limits on loan amounts should not be
set arbitrarily, given the need for flexibility in accommodating the specific needs of individual institutions.
However, in cases when borrowings from the Federal
Reserve are relatively heavy, monitoring of loan performance, in concert with the borrower's primary
supervisor and insurer, will have to be especially
rigorous.
Loan duration. In general, advances under the extended credit program could be expected to be renewed from time to time, but it is anticipated that
these advances ordinarily would not be renewed beyond nine to twelve months. However, if a borrower's
need justifiably continues beyond a year, the credit
may be extended. As a matter of principle, the more
protracted the borrowing, the firmer the measures the
borrower will be required to take to insure ultimate
repayment of the loan. Loan contracts will be drafted
in the form of demand obligations, with repayments
consistent with these policy guidelines.
Use of other sources offunds. Institutions borrowing under this program will be expected to evidence a
continuing effort to maintain deposit inflows. Further,
to the extent that borrowing needs result from erosion
in other than consumer deposits, borrowers will be
expected to evidence a continuing effort to refund
discount window credit in these nonconsumer deposit
markets where reasonable terms can be obtained.
These other markets include, but are not limited to,
commercial bank backup lines, repurchase agreements, mortgage warehousing, and large-denomination certificates of deposit.
Reliance on internal liquidity. While using the discount window for this purpose, borrowers will be
expected to trim their holdings of cash equivalents
(including federal funds sold) to the minimum levels
consistent with their operating needs. Also, to the
extent practicable, they will be expected to apply
temporary excess cash balances to the reduction of
discount window loans.
Sales of assets. To minimize drawings of other
extended credit, borrowers will be encouraged to
cover as much of their funding needs as feasible
through the sale of assets (such as government and
federal agency securities, GNMA pass-through certificates, corporate securities, and mortgages) when such
sales can be accomplished without experiencing unreasonable market losses.
711
Limits on investment growth. Users of the window
under this program will generally be expected to
eschew any increase in security investments while
borrowing. In addition, cash reflow from maturing
obligations should be used, to the extent feasible, to
reduce reliance on the discount window.
Limits on expansion of loan portfolio. While obtaining discount window credit under this program, institutions will be permitted to accommodate outstanding
loan commitments. While some minimal new lending
might be needed for the institution to remain viable in
serving the immediate community and existing depositors or to meet requirements associated with issuance
of "all-savers" certificates, the institution will not be
permitted to engage in an expansion program. Renewed forward commitments may be permitted in the
context of a prearranged plan when operating improvements indicate clearly that an institution can
repay its debt to the Federal Reserve in the relatively
near term.
Collateral procedures. Loan collateral should be
held either under a third-party custody arrangement
or, if some Reserve Banks believe this to be necessary, at the Reserve Bank itself. Collateral should be
valued at 90 percent of its estimated market price and
revalued frequently, perhaps monthly.
REGULATION
J:
AMENDMENT
The Federal Reserve Board amended its Regulation J (Collection of Checks and Other Items and
Transfer of Funds), effective August 13, 1981, to
conform the regulation to legislation making Federal Reserve check collection services available
to all depository institutions.
The revision of the regulation deals with expansion of access to Federal Reserve check
collection services in accordance with the Monetary Control Act of 1980. Expanded access to
these services became available to all depository
institutions when the Federal Reserve began
pricing its services on August 1, 1981.
SYSTEM MEMBERSHIP:
ADMISSION OF STATE BANK
The following bank was admitted to membership
in the Federal Reserve System during the period
August 11 through September 10, 1981:
Virginia
Hayes
First Settlers Bank
712
Record of Policy Actions of the
Federal Open Market Committee
Meeting Held on July 6-7, 1981
1. Domestic Policy Directive
The information reviewed at this
meeting suggested that real gross
national product changed little in the
second quarter, following expansion
in the first quarter at an annual rate
of 8.6 percent. Average prices, as
measured by the fixed-weight price
index for gross domestic business
product, rose less rapidly than in the
first quarter.
The dollar value of retail sales was
virtually unchanged in May after
having declined appreciably in April.
Unit sales of new automobiles remained weak in June; sales in the
second quarter as a whole were
about one-fifth below the first-quarter rate.
The index of industrial production
rose 0.3 percent in May, following
an increase of only 0.1 percent in
April. A further increase in automobile assemblies in May, to an annual
rate nearly 2 million units above the
recent pace of sales of domestic
models, accounted for more than
half of the increase in the total index.
Production of business equipment
and space and defense products continued to expand, while output of
construction supplies fell.
Nonfarm payroll employment,
adjusted for changes in the number
of workers on strike, continued to
advance in April and May but declined appreciably in June; employment fell substantially further in construction and state and local
government in June, and it also declined in retail trade. In manufacturing, employment was about unchanged, while the average factory
workweek edged down to 40.1
hours. The unemployment rate was
7.3 percent, lower than in May but
unchanged from earlier months of
the year.
The Department of Commerce
survey of business spending plans
taken in May suggested that currentdollar expenditures for plant and
equipment would rise about 8V2 percent in 1981, compared with IOV4
percent reported in the February
survey and an actual expansion of
about 91/4 percent in 1980. The latest
survey results implied little growth
in nominal expenditures over the remainder of the year, given the relatively large increase in outlays in the
first quarter.
Private housing starts fell 14 percent in May to an annual rate of 1.15
million units, 25 percent below the
average pace in the fourth quarter of
1980. Combined sales of new and
existing homes in May continued at
about the reduced rate of recent
months.
Producer prices of finished goods
increased 0.6 percent in June, about
the same as the April-May average.
Over the second quarter producer
prices rose at an annual rate of about
7 percent, considerably below the
average rate of 12 percent in the first
quarter. Prices of consumer foods
continued to change little on balance
during the quarter; and energy
prices, which had surged in the first
quarter following decontrol of oil
prices, rose at an annual rate of only
5^4 percent. Price increases for other
finished goods on the average were
somewhat higher in the second quarter than in the first. The rise in the
consumer price index slowed in
April to an annual rate of 5 percent;
but it accelerated in May to a rate of
8 percent, reflecting primarily a
sharp rise in the homeownership
component of the index. Over the
two-month period, food prices declined slightly on balance, and the
rate of increase in prices of energy
items slowed substantially. Over the
first six months of 1981, the rise in
the index of average hourly earnings
of private nonfarm production workers was slightly less rapid than it was
during 1980.
In foreign exchange markets the
trade-weighted value of the dollar
against major foreign currencies
continued to rise through May and
early June and then leveled off. On
the average in June, the value of the
dollar was about 25 percent above its
year-earlier level. The U.S. trade
deficit in the April-May period was
somewhat above the average in the
first quarter. The value of exports
was down marginally, but the value
of imports was considerably higher.
At its meeting on May 18, the
Committee had decided that open
market operations in the period until
this meeting should be directed toward behavior of reserve aggregates
associated with growth of M-1B
from April to June at an annual rate
of 3 percent or lower, after allowance for the impact of flows into
NOW accounts, and growth in M-2
at an annual rate of about 6 percent.
A shortfall in growth of M-1B from
the two-month rate of 3 percent
would be acceptable, in light of the
rapid growth in April and the objective adopted by the Committee at its
meeting on March 31 for growth
from March to June at an annual rate
of 5'/2 percent or somewhat less. If it
appeared to the Manager for Domestic Operations that pursuit of the
monetary objectives and related reserve paths during the period before
the next meeting was likely to be
associated with a federal funds rate
persistently outside a range of 16 to
22 percent, the Chairman might call
for Committee consultation.
During the intermeeting period,
incoming data indicated a progressive weakening of M-1B. In accordance with the Committee's decision
on May 18, reserves provided
through open market operations
were constrained to accommodate
the weakness up to a point, but
subsequently they were more ample.
Reserves borrowed from the discount window remained around %2XA
billion through most of June and
then declined to around $ l 3 / 4 billion
toward the end of the intermeeting
period. Federal funds generally traded in a range of 18!/2 to \9Vi percent
throughout the intermeeting period.
However, most other short-term
market interest rates declined 3A to
13A percentage points, on balance.
M-1B, adjusted for the estimated
effects of shifts into NOW accounts,
declined at annual rates of about 5
percent and IOV2 percent in May and
June respectively, following expansion at an annual rate of close to 17
percent in April. From the fourth
quarter of 1980 to the second quarter
of 1981, shift-adjusted M-1B grew at
an annual rate of about 2V4 percent,
below the lower end of the Committee's range for growth in that aggregate for the year ending in the fourth
quarter of 1981. Growth in M-2
slowed to an annual rate of about A%A
percent on average in May and June,
reflecting not only the contraction in
M-1B, but also a moderation in
growth of money market mutual
funds. The recent slowing brought
M-2 to a level in the second quarter
that was only slightly above the upper end of the growth path consistent with its range for the year from
the fourth quarter of 1980 to the
fourth quarter of 1981.
Total credit outstanding at U.S.
commercial banks expanded at an
annual rate of \PA percent in May,
but the rate slowed to about 5 percent in June. Heavy acquisitions of
U.S. government securities characterized both months. Growth in total
loans accelerated in May and then
slowed in June, but business loans
714
Federal Reserve Bulletin • September 1981
picked up in May from the sluggish
pace of earlier months and accelerated further in June. Net issues of
commercial paper by nonfinancial
corporations grew at exceptionally
rapid rates in May and June, following a decline in April.
Yields on most long-term securities trended downward through
much of the intermeeting period but
moved up in the final days to levels
little changed from those at the time
of the May meeting. Over the interval, the prime rate charged by commercial banks on short-term business loans moved in a range of 19'/2
to 20Vi percent; at the end of the
period the rate was 20 percent at
most banks. In home mortgage markets, average rates on new commitments for fixed-rate loans at savings
and loan associations remained close
to the level of WA percent prevailing
since mid-May.
The staff projections presented at
this meeting suggested that growth
in real GNP would probably be sluggish over the second half of 1981 and
into the first half of 1982. That development might well be accompanied
by an upward drift in the unemployment rate but also by some progress
in reducing inflation. The rise in the
fixed-weight price index for gross
domestic business product was projected to change little during the rest
of this year from the reduced pace of
the second quarter and to decline
somewhat further in the first half of
next year.
A substantial number of members
believed that growth in real GNP
would prove to be stronger than projected by the staff, although in some
cases anticipated strength was concentrated in 1982. Other members
thought that economic activity was
likely to be weaker than projected by
the staff; they anticipated a decline
in real GNP over the balance of 1981
followed by relatively sluggish recovery in 1982. While expecting the
rate of inflation to remain high by
historical standards, nearly all members anticipated some improvement.
A number questioned whether progress thus far represented more than a
temporary respite; and they felt that
significant and sustained progress in
reducing the underlying rate of inflation would take time and might not
be consistent with an early and
strong rebound in economic activity.
Others were more optimistic, suggesting that significant improvement
in the behavior of prices would help
to set the stage for sizable growth in
1982.
A number of members commented
that realization of forecasts of sustained growth in real GNP over the
next year or more, even at a slow
pace, depended upon declines in interest rates. In their opinion, an extended period with interest rates at
or near the high levels currently prevailing would more likely induce
both a decline in economic activity
and a spreading of financial strains.
A few members described monetary
policy, and its objective of restrained growth in monetary aggregates, as a "governor" on the economy that retarded expansion in
economic activity as long as inflation
and inflationary expectations remained high but tended to prevent
any contraction in activity from cumulating. In this framework, a pickup in demands for goods and services while inflation remained high
would lead to rising interest rates
and increasing restraint on expenditures, and any easing in demands for
goods and services would tend to
lower interest rates and lessen restraint on expenditures. It was also
suggested that long-term interest
rates might be on the verge of easing, in response to the improvement
in the outlook for prices that appeared to be developing, which
would permit stronger expansion in
economic activity next year than
generally projected. On the other
hand, some skepticism was expressed about the chances of emerging from the current environment of
rapid inflation and high interest rates
gradually, and without considerable
Record of Policy Actions of the Federal Open Market Committee 111
stress in the financial structure and
risks for economic activity during
the transition to lower rates of inflation.
At its meeting on February 2-3,
1981, the Committee had adopted
the following ranges for growth of
the monetary aggregates over the
period from the fourth quarter of
1980 to the fourth quarter of 1981:
M-1A and M-1B, 3 to 5Vi percent
and VA to 6 percent respectively,
after adjustment for the estimated
effects of flows into NOW accounts;
M-2, 6 to 9 percent; and M-3, 6V2 to
9Vi percent. The associated range for
growth of commercial bank credit
was 6 to 9 percent. In establishing
the ranges then, the Committee had
agreed that monetary growth should
slow in 1981 in line with the continuing objective of contributing to a
reduction in the rate of inflation and
providing the basis for restoration of
economic stability and sustainable
growth in output of goods and services.
At this meeting, in accordance
with the Full Employment and Balanced Growth Act of 1978 (the Humphrey-Hawkins Act), the Committee
reviewed its ranges for growth of the
monetary and credit aggregates for
the period from the fourth quarter of
1980 to the fourth quarter of 1981
and gave preliminary consideration
to objectives for monetary growth
that might be appropriate for 1982.1
In doing so, the members recognized
the likelihood of continued divergence in the growth of the different
aggregates, partly reflecting institutional change, and the considerable
uncertainty about how such institutional change might affect monetary
growth in the future. As noted earlier, expansion of shift-adjusted M-1B
from the fourth quarter of 1980 to the
second quarter of 1981 was relatively low in relation to the path implied
by the Committee's range for the
1. The Board's midyear report under the
act was transmitted to the Congress on July
20, 1981.
year. However, growth of M-2 and
M-3 so far in 1981 has been at or
above the Committee's ranges.
The shortfall in growth of shiftadjusted M-1B in the first half of the
year followed relatively
rapid
growth in the latter part of 1980; and
it was accompanied by an unusually
rapid rise in the income velocity of
money, as nominal GNP expanded
strongly. In partial explanation, extraordinarily high interest rates in
combination with the introduction of
NOW accounts on a nationwide basis apparently provided a greater
stimulus to intensive management of
cash balances than that normally associated with an increase in interest
rates. In the period ahead, M-1B
might behave somewhat differently
from earlier measures of transaction
balances, because of the sizable volume of deposits earning interest and
because of the greater weight of
household balances in the total. The
behavior of M-2 was likely to be
affected to some extent by two recent decisions of the Depository Institutions Deregulation Committee
(DIDC), effective August 1: one removed rate caps on the 2'/2-year
small saver certificate, enabling the
rate to fluctuate with the yield on
2'/2-year Treasury securities at all
levels; and the other eliminated ceilings altogether on small time deposits with initial maturities of four
years or more. The rapid growth of
money market funds appeared to influence the growth of both M-1 and
M-2, in opposite directions, but the
magnitude of the effects was difficult
to judge.
In the Committee's discussion of
the longer-run ranges, the members
were in agreement on the need to
maintain a policy of restraint. However, continuation of the increase in
velocity of M-1B at the rate of the
first half seemed unlikely, and thus
the public's demand for narrowly
defined money would probably pick
up in the second half. Moreover, a
significantly more rapid increase in
narrowly defined money would be
716
Federal Reserve Bulletin • September 1981
necessary to reach the Committee's
objective for the year. At the same
time, it was observed that the present situation provided a critical opportunity to sustain the signs of progress in reducing the rate of
inflation, an opportunity that could
be lost if monetary growth in the
months ahead became too rapid.
Even if rapid monetary expansion
should lower interest rates, which
was debatable, such effects would
likely be temporary, and latent demands for goods and services would
be released at the potential cost of a
still more difficult period of high
interest rates and financial strains
later. The point was made that lasting declines in nominal interest rates
and a solid base for sustained growth
would depend on convincing progress in reducing inflation.
In light of all the circumstances,
the Committee agreed to retain the
previously established ranges for the
monetary aggregates for 1981. In the
course of the discussion, some sentiment was expressed for a reduction
of Vz percentage point in the range
for M-1B, which would indicate that
the System did not intend to seek
very rapid monetary growth in the
second half of the year. However, a
small adjustment of that sort, though
partly justified by institutional
change, was considered on balance
potentially more confusing than useful. Instead, in light of its desire to
maintain moderate growth in money
over the balance of the year, the
Committee wished to affirm that
growth in M-1B near the lower end
of its range would be acceptable and
desirable. At the same time, the
Committee recognized that growth
in the broader monetary aggregates
might be high in their ranges.
The Committee reaffirmed the ranges
for growth in the aggregates for the period from the fourth quarter of 1980 to the
fourth quarter of 1981 that it had adopted
at its meeting in early February 1981.
These ranges, abstracting from the impact of NOW accounts on a nationwide
basis, were 3 to 5Vi percent for M-1A,
V/2 to 6 percent for M-IB, 6 to 9 percent
for M-2, and 6V2 to 9Vi percent for M-3.
The associated range for bank credit was
6 to 9 percent. The Committee recognized that a shortfall in M-1B growth in
the first half of the year partly reflected a
shift in public preferences toward other
highly liquid assets and that growth in
the broader aggregates had been running
somewhat above the upper end of the
ranges. In light of its desire to maintain
moderate growth in money over the balance of the year, the Committee expected that growth in M-1B for the year
would be near the lower end of its range.
At the same time, growth in the broader
monetary aggregates might be high in
their ranges.
Votes for this action: Messrs.
Volcker, Solomon, Boehne, Boykin,
Corrigan, Gramley, Keehn, Partee,
Rice, Schultz, Mrs. Teeters, and Mr.
Wallich. Votes against this action:
None.
With respect to 1982, the Committee favored some reduction in the
objectives for monetary growth in
keeping with the long-standing goal
of moving gradually toward rates of
monetary expansion consistent with
general price stability. Looking toward completion of the major shift
into NOW accounts, the Committee
decided to establish a range for a
single M-l aggregate having the
same coverage as the present M-1B.
Moreover, on the assumption that
shifts into NOW accounts from nontransaction balances would no longer be significant, calculation of rates
of growth for M-l after adjustment
for such shifts would not be necessary. The Committee also decided to
widen the range for the narrow monetary aggregate to 3 percentage
points, from 2xh points, reflecting
the greater uncertainty at this time in
judging the relationship of this aggregate to economic and financial developments resulting from the recent
change in its composition; because
of the possibility of some residual
shifting into NOW accounts, the upper end of the range was reduced by
less than the lower end.
Thus, the Committee tentatively
agreed that for the period from the
fourth quarter of 1981 to the fourth
Record of Policy Actions of the Federal Open Market Committee
quarter of 1982 growth of M-l, M-2,
and M-3 within ranges of 2VI to 5VI
percent, 6 to 9 percent, and 6VI to 9VI
percent would be appropriate. The
upper and lower ends of the range
for M-l were reduced Vi percentage
point and 1 percentage point respectively from the 1981 range for M-1B.
The ranges for the broader aggregates were unchanged from those for
1981. However, given the expectation that growth of these aggregates
in 1981 would be around the upper
end of the ranges and looking toward
results in 1982 more toward the middle of the ranges, the new ranges
were fully consistent with year-toyear reductions in growth.
The Committee tentatively agreed that
for the period from the fourth quarter of
1981 to the fourth quarter of 1982 growth
of M-l, M-2, and M-3 within ranges of
21/2 to 5V2 percent, 6 to 9 percent, and 6/2
to 9'/2 percent would be appropriate.
Votes for this action: Messrs.
Volcker, Solomon, Boehne, Boykin,
Corrigan, Gramley, Keehn, Partee,
Rice, Schultz, and Wallich. Vote
against this action: Mrs. Teeters.
Mrs. Teeters dissented from this
action because she believed that, in
light of all the uncertainties in the
economic situation, it was premature to adopt objectives calling for
reduced monetary growth in 1982.
She preferred to specify the same
ranges for 1982 as for 1981, pending
the Committee's reconsideration of
monetary objectives for 1982 at its
meeting next February.
In the Committee's discussion of
policy for the short run, the members in general agreed that operations in the period before the next
meeting should be directed toward
growth of monetary aggregates over
the third quarter at rates that would
promote achievement of the monetary objectives for the year as a
whole. Thus, they wished to foster
growth of M-lB over the third quarter at a rate high enough to permit
growth of this monetary aggregate
toward the lower end of its range for
the year. At the same time, howev
er, they wished to avoid generating
an excessively rapid rebound in
growth of M-1B, both because the
pace would need to be sharply reduced later and because such a rebound might tend to raise growth of
M-2 above the upper end of its range
for the year. With respect to the
intermeeting range for the federal
funds rate that provided a mechanism for initiating further consultation of the Committee, proposals
typically were from 15 or 16 percent
to 21 or 22 percent.
Specifically, the members agreed
to seek behavior of reserve aggregates associated with growth of
M-1B from June to September at an
annual rate of 7 percent, after allowance for flows into NOW accounts,
provided that growth of M-2 remained around the upper end of its
range for the year or tended to move
down within the range. Given the
declines in May and June, growth of
M-1B at the rate specified for the
period from June to September
would result in growth at an annual
rate of about 2 percent from the
average in the second quarter to the
average in the third quarter. The
members recognized that shifts into
NOW accounts would continue to
distort measured growth in M-lB to
an unpredictable extent and that operational paths would have to be
developed in the light of evaluation
of those distortions. The Chairman
might call for Committee consultation if it appeared to the Manager for
Domestic Operations that pursuit of
the monetary objectives and related
reserve paths during the period before the next meeting was likely to
be associated with a federal funds
rate persistently outside a range of
15 to 21 percent.
The following domestic policy directive was issued to the Federal
Reserve Bank of New York:
The information reviewed at this meeting suggests that real GNP changed little
in the second quarter, following the substantial expansion in the first quarter;
prices on the average rose less rapidly
111
718
Federal Reserve Bulletin • September 1981
than in the first quarter. The dollar value
of total retail sales was virtually unchanged in May after having declined
appreciably in April, and sales of new
cars remained weak in June. Industrial
production rose slightly on the average
in April and May, while nonfarm payroll
employment continued to advance, after
adjustment for strikes. In June strikeadjusted nonfarm employment declined
appreciably; the unemployment rate was
7.3 percent, somewhat lower than in
May but unchanged from earlier months
of 1981. In May housing starts declined
sharply. Over the first six months of
1981, the rise in the index of average
hourly earnings was slightly less rapid
than during 1980.
The weighted average value of the
dollar against major foreign currencies
continued to rise through May and early
June and then leveled off. In April-May
the U.S. foreign trade deficit was somewhat above the first-quarter rate.
M-1B, adjusted for the estimated effects of shifts into NOW accounts, declined substantially in May and June
following the sharp expansion in April,
and growth in M-2 slowed. The level of
adjusted M-1B in the second quarter on
the average was below the lower end of
the Committee's range for growth over
the year from the fourth quarter of 1980
to the fourth quarter of 1981; the level of
M-2 in the second quarter was slightly
above the upper end of its range for the
year. Since mid-May, on balance, shortterm market interest rates have declined
somewhat while long-term yields generally have changed little.
The Federal Open Market Committee
seeks to foster monetary and financial
conditions that will help to reduce inflation, promote sustained economic
growth, and contribute to a sustainable
pattern of international transactions. At
its meeting in early February, the Committee agreed that these objectives
would be furthered by growth of M-1A,
M-1B, M-2, and M-3 from the fourth
quarter of 1980 to the fourth quarter of
1981 within ranges of 3 to 5'/i percent,
3Yz to 6 percent, 6 to 9 percent, and 6V2 to
9V2 percent respectively, abstracting
from the impact of introduction of NOW
accounts on a nationwide basis. The
Committee recognized that the shortfall
in M-1B growth in the first half of the
year partly reflected a shift in public
preferences toward other highly liquid
assets and that growth in the broader
aggregates has been running somewhat
above the upper ends of the ranges. The
Committee reaffirmed its ranges for
1981, but in light of its desire to maintain
moderate growth in money over the balance of the year, the Committee expect
ed that growth in M-1B for the year
would be near the lower end of its range.
At the same time, growth in the broader
aggregates may be high in their ranges.
The associated range for bank credit was
6 to 9 percent. The Committee also tentatively agreed that for the period from
the fourth quarter of 1981 to the fourth
quarter of 1982 growth of M-l, M-2, and
M-3 within ranges of 2Vi to 5Vi percent, 6
to 9 percent, and 6Y2 to 9Vi percent
would be appropriate. These ranges will
be reconsidered as warranted to take
account of developing experience with
public preferences for NOW and similar
accounts as well as changing economic
and financial conditions.
In the short run the Committee seeks
behavior of reserve aggregates consistent with growth of M-lB from June to
September at an annual rate of 7 percent
after allowance for the impact of flows
into NOW accounts (resulting in growth
at an annual rate of about 2 percent from
the average in the second quarter to the
average in the third quarter), provided
that growth of M-2 remains around the
upper limit of, or moves within, its range
for the year. It is recognized that shifts
into NOW accounts will continue to distort measured growth in M-1B to an
unpredictable extent, and operational reserve paths will be developed in the light
of evaluation of those distortions. The
Chairman may call for Committee consultation if it appears to the Manager for
Domestic Operations that pursuit of the
monetary objectives and related reserve
paths during the period before the next
meeting is likely to be associated with a
federal funds rate persistently outside a
range of 15 to 21 percent.
Votes for this action: Messrs.
Volcker, Solomon, Boehne, Boykin,
Corrigan, Gramley, Keehn, Rice,
Schultz, Mrs. Teeters, and Mr. Wallich. Vote against this action: Mr.
Parte e.
Mr. Partee dissented from this action because, in light of the indications of weakening in economic activity, he preferred to give more
emphasis to reducing the risk of a
cumulative shortfall in growth of
M-1B. Accordingly, he favored
specification of a somewhat higher
objective for growth of M-1B over
the period from June to September,
and without the additional weight assigned to the potential for more rapid
growth of M-2. In his view, the
short-run behavior of M-2 was sub-
Record of Policy Actions of the Federal Open Market Committee
ject to great uncertainty because of
both the volatile influence of money
market mutual funds and the recent
DIDC actions authorizing certain deposit instruments to be offered at
competitive interest rates beginning
August 1.
2. Authorization for Domestic
Open Market Operations
On August 6, 1981, the Committee
voted to increase from $3 billion to
$4Vi billion the limit on changes
between Committee meetings in
System Account holdings of U.S.
government and federal agency securities specified in paragraph 1(a) of
the authorization for domestic open
market operations, effective immediately, for the period ending with the
close of business on August 18,
1981.
Votes for this action: Messrs.
Volcker, Solomon, Boykin, Corrigan,
Gramley, Keehn, Rice, Schultz, Mrs.
Teeters, Messrs. Winn, and Black.
Votes against this action: None. Absent: Messrs. Boehne and Partee.
(Mr. Black voted as alternate for Mr.
Boehne.)
This action was taken on the recommendation of the Manager for
Domestic Operations. The Manager
had advised that since the July meeting, substantial net purchases of securities had been undertaken to
counter the effects on member bank
reserves of the transfer of funds associated with settlement of Iranian
accounts and also the effects of levels of float that were lower than
normal. The leeway for further purchases had been reduced to about
$200 million, and additional purchases in excess of that amount
might be required over the rest of the
intermeeting interval.
Records of policy actions taken by the Federal Open Market Committee at each meeting, in the
form in which they will appear in the Board's Annual Report, are made available a few days after
the next regularly scheduled meeting and are later published in the BULLETIN.
111
720
Legal Developments
REVISION
OF REGULATION
Part 203—Home
Mortgage
C
Disclosure
The Board of Governors of the Federal Reserve System is adopting in final form a revised version of
Regulation C. Regulation C implements the Home
Mortgage Disclosure Act and requires depository institutions with offices in standard metropolitan statistical areas (SMSAs) to disclose data about their home
mortgage and home improvement loans each year.
Institutions with less than $10 million in assets are
exempt from coverage.
Effective August 4, 1981, (except that a lobby notice
requirement becomes effective on September 30,
1981), pursuant to the authority granted in (12 U.S.C.
2084(a)), the Board hereby revises Regulation C
(12 CFR Part 203) to read as follows:
Part 203—Home
Section
Section
Section
Section
Section
203.1
203.2
203.3
203.4
203.5
Section 203.6
Appendix A
Appendix B
Appendix C
Mortgage
Disclosure
Authority, purpose, and scope.
Definitions.
Exemptions.
Compilation of loan data.
Disclosure and reporting requirements.
Administrative enforcement and
sanctions for violations.
Federal enforcement agencies.
State exemptions.
[Reserved for disclosure form
and instructions.]
depository institutions are serving the housing needs
of the communities and neighborhoods in which they
are located. The purpose is also to assist public
officials in distributing public sector investments so as
to attract private investment to neighborhoods where
it is needed. This regulation is not intended to encourage unsound lending practices or the allocation of
credit.
(c) Scope. This regulation applies to depository institutions that make federally related mortgage loans. It
requires a covered depository institution to disclose
loan data at certain of its offices and to report the data
to its supervisory agency.
(d) Central data repositories. The act requires that the
loan data be made available at central data repositories
located within each standard metropolitan statistical
area. It also requires the Federal Financial Institutions
Examination Council to aggregate mortgage loan data
for all institutions in each standard metropolitan statistical area, showing lending patterns by location, age of
housing stock, income level, and racial characteristics.
A listing of central data repositories can be obtained
from the Department of Housing and Urban Development, Washington, D.C. 20410, or from any of the
agencies listed in Appendix A.
Section 203.2—Definitions.
For the purposes of this regulation, the following
definitions apply:
(a) Act means the Home Mortgage Disclosure Act of
1975 (Title III of Public Law 94-200), as amended in
1980 (Title III of Public Law 96-399), codified in Title
12, §§ 2801 through 2811 of the United States Code.
Section 203.1—Authority, purpose and scope.
(a) Authority. This regulation is issued by the Board of
Governors of the Federal Reserve System pursuant to
the Home Mortgage Disclosure Act of 1975, as amended (Title 12, §§ 2801 through 2811 of the United States
Code).
(b) Purpose. The purpose of this regulation is to
provide the public with loan data to determine whether
(b) Branch office means an office approved as a branch
of the depository institution by its federal or state
supervisory agency, but excludes freestanding automated teller machines and other electronic terminals.
(c) Depository institution means a commercial bank,
savings bank, savings and loan association, building
and loan association, homestead association (including
a cooperative bank), or credit union, that makes
Legal Developments
721
federally related mortgage loans.1 A majority-owned
non-depository subsidiary is deemed to be part of its
parent depository institution for the purposes of this
regulation. A majority-owned depository subsidiary
may, at the parent depository institution's option, be
treated as part of its parent or as a distinct entity.
ernment National Mortgage Association, or the Farmers Home Administration).
(d) Federal Housing Authority (FHA), Farmers Home
Adminstration (FmHA), or Veterans Administration
(VA) loans means mortgage loans insured under Title
II of the National Housing Act or under Title V of the
Housing Act of 1949 or guaranteed under Chapter 37
of Title 38 of the United States Code.
Section 203.3—Exemptions.
(e) Home improvement loan means any loan, including
a refinancing, (i) whose proceeds, as stated by the
borrower to the lender at the time of the loan application, are to be used for repairing, rehabilitating, or
remodeling a residential dwelling located in a state;
and (ii) that is recorded on the depository institution's
books as a home improvement loan.2
(f) Home purchase loan means any loan, including a
refinancing, secured by and made for the purpose of
purchasing residential real property located in a state
(including single-family homes, dwellings for from 2 to
4 families, other multi-family dwellings, and individual
units of condominiums or cooperatives). 3 The term
does not include temporary financing (such as a bridge
loan or a construction loan) or the purchase of an
interest in a pool of mortgage loans (such as mortgage
participation certificates issued or guaranteed by the
Federal Home Loan Mortgage Corporation, the Gov-
1. "Federally related mortgage loan" means any loan (other than
temporary financing such as a construction loan) that
(i) Is secured by a first lien on residential real property (including
individual units of condominiums and cooperatives) that is designed
principally for the occupancy of from l-to-4 families and is located
in a state; and
(ii)
(a) Is made in whole or in part by a depository institution the
deposits or accounts of which are insured by an agency of the
federal government, or by a depository institution that is regulated by an agency of the federal government; or
(b) Is made in whole or in part, or is insured, guaranteed,
supplemented, or assisted in any way, by the Secretary of
Housing and Urban Development or any other officer or agency
of the federal government or under or in connection with a
housing or urban development program administered by any such
officer or agency; or
(c) Is intended to be sold by the depository institution that
originates the loan to the Federal National Mortgage Association,
the Government National Mortgage Association, or the Federal
Home Loan Mortgage Corporation, or to a financial institution
from which it is to be purchased by the Federal Home Loan
Mortgage Corporation.
2. See footnote 3.
3. An institution may categorize a first-lien loan made for home
improvement purposes as a home purchase loan if that is the manner
in which it normally records first-lien loans.
(g) State means any state of the United States of
America, the District of Columbia, and the Commonwealth of Puerto Rico.
(a) Asset size and location. A depository institution is
exempt from all requirements of this regulation
(1) If its total assets on December 31 are $10,000,000
or less; or
(2) If it has neither a home office nor a branch office
in a standard metropolitan statistical area (SMSA)
as defined by the U.S. Department of Commerce.
(b) State law. A state-chartered depository institution
is exempt from the requirements of this regulation if it
is subject to state laws that contain, as determined by
the Board in accordance with Appendix B, (1) requirements substantially similar to those imposed by this
regulation, and (2) adequate provisions for enforcement. For purposes of data aggregation, however, an
institution exempted under this paragraph shall submit
the data required by the disclosure laws of its state to
its state supervisory agency.
(c) Change of status.
(1) An institution that becomes subject to the requirements of this regulation shall compile loan data
beginning with the calendar year following the year
in which it becomes subject, except that:
(2) An institution that is exempt under § 203.3(b)
and that subsequently loses its exemption shall
compile loan data in compliance with this regulation
beginning with the calendar year following the year
for which it last reported loan data under the state
disclosure law.
Section 203.4—Compilation of loan data.
(a) Data to be included. A depository institution shall
compile data on the number and total dollar amount4
of home purchase and home improvement loans that it
originates and purchases, for each calendar year beginning with calendar year 1981.
4. "Total dollar amount" means (i) original principal amount of
loans originated by the depository institution (to the extent of its
ownership interest, when the loan is made jointly or cooperatively)
and (ii) the unpaid balance of loans purchased by the depository
institution (to the extent of its ownership interest in such purchased
loans). For home improvement loans, whether originated or purchased, the amount to be reported may include unpaid finance
charges.
722
Federal Reserve Bulletin • September 1981
(b) Format. The loan data shall be compiled separately
for originations and purchases, using the form set forth
in Appendix C, and shall be itemized as follows:
(1) Geographic itemization. The loan data shall be
itemized by standard metropolitan statistical area
(SMSA). Within each SMSA, the data shall be
further itemized by the census track in which the
property to be purchased or improved is located,
except that
(i) If the property is located in a county with a
population5 of 30,000 or less or in an area that has
not been assigned census tracts, itemization by
county shall be used instead of itemization by
census tract.
(ii) If the property is located outside any SMSA,
or is located in an SMSA in which the institution
has neither a home nor a branch office, no itemization (by SMSA, county, or census tract) is
required and the data for all such loans shall
instead be listed as an aggregate sum.
(2) Type-of-loan itemization. The loan data within
each geographic category described in paragraph
(b)(1) of this section shall be further itemized as
follows:
(i) FHA, FmHA, and VA loans on l-to-4 family
dwellings;
(ii) Other home purchase (conventional) loans on
l-to-4 family dwellings;
(iii) Home improvement loans on l-to-4 family
dwellings;
(iv) Total home purchase and home improvement
loans on dwellings for more than 4 families; and
(v) Total home purchase and home improvement
loans on l-to-4 family dwellings (from categories
(i), (ii), and (iii) above) made to any borrower who
did not, at the time of the loan application, intend
to use the property as a principal dwelling.6 This
addendum item is not required for loans on property in the outside-SMSAs category described in
paragraph (b)(l)(ii) of this section.
(c) Excluded data. A depository institution shall not
disclose loan data for
(1) Loans originated and purchased by the deposi-
5. The population is to be determined by reference to the "1980
Census of Population, NUMBER OF INHABITANTS, PC80-1-A"
series prepared by the Bureau of the Census, U.S. Department of
Commerce, Washington, D.C. 20233. Until this publication becomes
available, county population shall be determined using the "1980
Census of Population and Housing, FINAL POPULATION AND
HOUSING UNIT COUNTS (Advanced Reports), PHC80-V" series,
also prepared by the Bureau of the Census.
6. A depository institution may assume, unless its records contain
information to the contrary, that a loan that it purchases does not fall
within this category.
tory institution acting as trustee or in some other
fiduciary capacity;
(2) Loans on unimproved land; or
(3) Refinancings that the depository institution originates, if there is no increase in the principal that is
outstanding on the existing loan at the time of the
refinancing and if the institution and the borrower
are the same parties on the existing loan and the
refinancing.
(d) SMSAs and census tracts. For purposes of geographic itemization
(1) A depository institution shall use the SMSA
boundaries defined by the U.S. Department of Commerce, Washington, D X . 20233, as of the first day
of the calendar year for which the data are compiled.
(2) A depository institution shall use the census tract
numbers and boundaries on the census tract maps in
the "1980 Census of Population and Housing, CENSUS TRACTS, PHC80-2" series prepared by the
Bureau of the Census. 7 If a census tract number is
duplicated within an SMSA, then the census tract
shall also be identified by county, city, or town
name.
Section 203.5—Disclosure and reporting
requirements.
(a) Time requirements for disclosure statements. A
depository institution shall make its loan data disclosure statements available to the public by March 31
following the calendar year for which the data were
compiled, and shall continue to make them available
for five years from that date.
(b) Offices at which disclosure statements are to be
made available.
(1) A depository institution shall make a complete
disclosure statement available at its home office.
(2) A depository institution shall also make a disclosure statement available in at least one branch office
in each SMSA where it has offices, other than the
SMSA in which the home office is located. The
statement at a branch office may omit, at the option
of the institution, all data other than the data relating
to property located in the SMSA where that branch
is located.
(3) Upon request, a depository institution shall
promptly provide information regarding the office(s)
of the institution where its disclosure statements are
available.
7. An institution may use either 1970 or 1980 census tract boundaries in geocoding loans in an SMSA until the 1980 census tract outline
maps for that SMSA become available from the Bureau of the Census.
Legal Developments
(c) Manner of making disclosure statements available.
A depository institution shall makes its loan data
disclosure statements available to anyone requesting
them for inspection or copying during the hours the
office is normally open to the public for business. A
depository institution that provides photocopying facilities may impose a reasonable charge for this service.
(d) Notice of availability. A depository institution shall
provide notice of the availability of its mortgage loan
data by posting a notice in the lobbies of its home and
branch offices that are located in SMS As.
(e) Reporting requirements. For purposes of data
aggregation, a depository institution shall send two
copies of its complete disclosure statement to the
regional office of its enforcement agency by March 31
following the calendar year for which the data were
compiled.
Section 203.6—Administrative enforcement and
sanctions for violations.
723
National Banks
Comptroller of the Currency
Office of Customer and Community Programs
Washington, D.C. 20219
State Member Banks
Federal Reserve Bank serving the district in which the
state member bank is located.
Nonmember Insured Banks and Mutual Savings
Banks
Federal Deposit Insurance Corporation Regional Director for the region in which the bank is located.
Savings Institutions Insured by the FSLIC and
Members of the FHLB System (except for Savings
Banks insured by FDIC)
The Federal Home Loan Bank Board Supervisory
Agent in the district in which the institution is located.
Credit Unions
(a) Administrative enforcement. As set forth more
fully in §§ 305(b) and 306(b) of the act, compliance
with the act and this regulation is enforced by the
Comptroller of the Currency, the Federal Reserve
System, the Federal Deposit Insurance Corporation,
the Federal Home Loan Bank Board, and the National
Credit Union Administration.
(b) Sanctions for violations.
(1) A violation of the act or this regulation is subject
to administrative sanctions as provided in § 305(c)
of the act.
(2) An error in compiling or disclosing required data
is not considered a violation of the act or this
regulation if the error was unintentional and resulted
from a bona fide mistake despite the maintenance of
procedures reasonably adapted to avoid such an
error.
Office of Consumer Affairs
National Credit Union Administration
1776 G Street, N.W.
Washington, D.C. 20456
Other Depository Institutions
Federal Deposit Insurance Corporation Regional Director for the region in which the institution is located.
Appendix B
State Exemptions
Federal Enforcement Agencies
(a) Application. Any state, 1 state-chartered depository
institution, or association of such depository institutions may apply to the Board pursuant to this appendix
and the Board's Rules of Procedure (12 CFR 262) for
an exemption under § 203.3(b). Such an exemption
requires a determination that a state-chartered depository institution is subject to state law requirements 2
substantially similar to those imposed by this regula-
The following list indicates which federal agency enforces Regulation C for particular classes of institutions. Any questions concerning compliance by a
particular institution should be directed to the appropriate enforcing agency.
1. "State" includes any subdivision of a state.
2. "State law" includes any regulations which implement the law,
any official interpretations of the law, and regulations of a state agency
or department that has jurisdiction over a class(es) of depository
institutions.
Appendix A
724
Federal Reserve Bulletin • September 1981
tion, and that there is adequate provision for enforcement of those requirements.
(b) Supporting documents. The application, which
may be made by letter, shall include
(1) A copy of the full text of the relevant state law,
including provisions for enforcement;
(2) A statement of reasons why the state requirements are substantially similar to those imposed by
the act and this regulation, including an explanation
why any differences are not significant; and
(3) An undertaking to inform the Board within 30
days of the occurence of any change in the relevant
state law.
(c) Public notice of filing. The Board will publish in the
Federal Register notice of the filing of an application
that complies with the above requirements. A copy of
the application will be made available for examination
during business hours at the Board and at the Federal
Reserve Bank of each Federal Reserve District in
which the applicant is situated. The Board will provide
a period of time for interested persons to submit
written comments. For multiple applications concerning the same state law, the Board may (1) consolidate
the notice of receipt of all such applications in one
Federal Register notice, and (2) dispense with publication of notice of applications subsquently received.
(d) Grant of exemption. If the Board determines that
some or all state-chartered depository institutions are
subject to requirements substantially similar to those
imposed by this regulation, and that there is adequate
provision for enforcement, the Board will exempt such
institution(s) from the requirements of this regulation
(except as specified in § 203.3(b)) by publishing notice
of the exemption in the Federal Register. The Board
also will furnish a copy of the notice to the applicant,
to each state authority responsible for administrative
enforcement of the state law, to the regulatory authorities specified in § 305(b) of the act, and to each
participant in the proceeding.
(e) Subsequent amendments; revocation of exemption.
(1) The Board will inform the appropriate state
official of any subsequent amendments to this regulation (including published interpretations of the
Board) that might require amendment of the state
law. The Board may require reapplication for an
exemption.
(2) The Board reserves the right to revoke an
exemption if at any time it determines that state law
does not in fact impose requirements substantially
similar to those imposed by this regulation, or that
there is not in fact adequate provision for enforcement.
(3) The Board will publish notice of its intent to
revoke an exemption in the Federal Register and
will send the notice to the appropriate state official.
The Board will allow time after publication for
interested persons to submit written comments.
(4) If an exemption is revoked, the Board will
publish notice of the revocation in the Federal
Register and will send a copy of the notice to the
appropriate state official and to the regulatory authorities specified in § 305(b) of the act.
(5) The Board may dispense with the procedures set
forth in this section in any case in which it finds such
procedures unnecessary.
AMENDMENTS
TO REGULATION
J
Part 210—Collection of Checks and Other
Items and Transfer of Funds
Redefinition of the Terms "Sender"
and "Bank"
The Board of Governors of the Federal Reserve System has amended Subpart A of Regulation J, governing the collection of checks and other items by Reserve Banks, to implement the Monetary Control Act
of 1980. This amendment redefines the terms "sender" and "bank" so that each term includes "depository institutions" as defined in section 19(b) of the
Federal Reserve Act, as amended by the Monetary
Control Act.
Effective August 12, 1981, pursuant to its authority
under section 13 of the Federal Reserve Act, as
amended, 12 U.S.C. § 342; section 16 of the Federal
Reserve Act, 12 U.S.C. §§ 248(o), 360; and section
11(0 Of the Federal Reserve Act, 12 U.S.C. § 248(i),
the Board hereby amends Regulation J (12 C.F.R. Part
210) as follows:
In section 210.2, new paragraph (b) is added, and
existing paragraphs (b) through (k) are redesignated
paragraphs (c) through (1) and revised to read as
follows:
Section 210.2—Definitions
As used in this subpart, unless the context otherwise
requires:
(b) "Bank" includes a depository institution as defined in section 19 of the Federal Reserve Act
(12 U.S.C. § 461(b)).
Legal Developments
(c) "Bank draft" means a check drawn by one bank
on another bank.
(d) "Banking day" means a day during which a bank
is open to the public for carrying on substantially all its
banking functions.
(e) "Cash item" means:
(1) a check other than one classified as a noncash
item under this section; or
(2) any other item payable on demand and collectible at par that the Reserve Bank of the District in
which the item is payable is willing to accept as a
cash item.
(f) "Check" means a draft, as defined in the Uniform
Commercial Code, that is drawn on a bank and payable on demand.
(g) "Item" means an instrument for the payment of
money, whether negotiable or not, that is:
(1) payable in a Federal Reserve District1 ("District");
(2) sent by a sender to a Reserve Bank for handling
under this subpart; and
(3) collectible in funds acceptable to the Reserve
Bank of the District in which the instrument is
payable.
Unless otherwise indicated, "item" includes both
cash and noncash items. "Item" does not include a
check that cannot be collected at par, 2 or an "item"
as defined in section 210.26 that is handled under
subpart B.
(h) "Nonbank payor" means a payor of an item, other
than a bank.
(i) "Noncash item" means an item that a receiving
Reserve Bank classifies in its operating circulars as
requiring special handling. The term also means an
item normally received as a cash item if a Reserve
Bank decides that special conditions require that it
handle the item as a noncash item.
(j) "Paying bank" means:
(1) the bank by which an item is payable, unless the
item is payable or collectible through another bank
and is sent to the other bank for payment or collection; or
1. For purposes of this subpart, the Virgin Islands and Puerto Rico
are deemed to be in the Second District, and Guam and American
Samoa in the Twelfth District.
2. The Board publishes a "Memorandum on Exchange Charges,"
listing the banks that would impose exchange charges on cash items
and other checks forwarded by Reserve Banks and therefore would
not pay at par.
725
(2) the bank through which an item is payable or
collectible and to which it is sent for payment or
collection.
(k) "Sender" means any of the following that sends
an item to a Reserve Bank: a depository institution, a
clearing institution, another Reserve Bank, an international organization, a foreign correspondent, or a
branch or agency of a foreign bank maintaining reserves under section 7 of the International Banking
Act of 1978 (12 U.S.C. §§ 347d, 3105).
(1) "Depository institution" means a depository
institution as defined in section 19(b) of the Federal
Reserve Act. (12 U.S.C. § 461(b))
(2) "Clearing institution" means:
(i) an institution that is not a depository institution, but maintains with a Reserve Bank the
balance referred to in the first paragraph of section 13 of the Federal Reserve Act (12 U.S.C.
§ 342); or
(ii) a corporation that maintains an account with a
Reserve Bank in conformity with section 211.4 of
this chapter (Regulation K).
(3) "International Organization" means an international organization for which a Reserve Bank is
empowered to act as depository or fiscal agent and
maintains an account.
(4) "Foreign correspondent" means any of the following for which a Reserve Bank maintains an
account: a foreign bank or banker, a foreign state as
defined in section 25(b) of the Federal Reserve Act
(12 U.S.C. § 632), or a foreign correspondent or
agency referred to in section 14(e) of that Act
(12 U.S.C. § 358).
(1) "State" means a State of the United States, the
District of Columbia, Puerto Rico, or a territory,
possession, or dependency of the United States.
AMENDMENT
TO REGULATION
K
Part 211—International Banking
Operations
Amendment of Rule Regarding Capital
Requirements of Edge Corporations
The Board of Govenors of the Federal Reserve System
has amended section 211.6(d) of Regulation K
(12 C.F.R. § 211.6(d) to include certain subordinated
notes and debentures within the definition of "capital
and surplus" solely for the purpose of determining
capital adequacy of Edge Corporations.
Effective July 29, 1981, pursuant to the Board's
authority under section 25(a) of the Federal Reserve
726
Federal Reserve Bulletin • September 1981
Act (12 U.S.C. §§ 611-631), Regulation K is amended
by revising section 211.6(d) to read as set forth below:
Section 211.6—Leading Limits and Capital
Requirements
(d) Capitalization. An Edge Corporation shall at all
times be capitalized in an amount that is adequate in
relation to the scope and character of its activities. In
the case of an Edge Corporation engaged in banking,
its capital and surplus shall be not less than 7 per cent
of risk assets. For this purpose, subordinated capital
notes or debentures, in an amount not to exceed 50 per
cent of non-debt capital, may be included for determining capital adequacy in the same manner as for a
member bank; risk assets shall be deemed to be all
assets on a consolidated basis other than cash,
amounts due from banking institutions in the United
States, United States Government securities, and Federal funds sold.
AMENDMENTS TO RULES
REGARDING
DELEGATION OF AUTHORITY
Part 265—Rules Regarding Delegation of
Authority
Expansion of Federal Reserve Banks Delegated
Authority
The Board of Governors of the Federal Reserve System has extended delegated authority to the Board's
Director of Banking Supervision and Regulation to
refer violations of the Employee Retirement Income
Security Act by State member banks to the Department of Labor. In addition, the Board has expanded
the delegated authority of the Federal Reserve Banks
to enter into written agreements to correct violations
of law, rule, or regulation.
Effective August 10, 1981, Part 265 is amended by
adding new section 265.2(c)(30), and by amending
section 265.2(f)(28) to read as set forth below:
Section 265.2—Specific Functions Delegated to
Board Employees and to Federal Reserve
Banks
("ERISA") by State member banks, in accordance
with section 3004(b) of ERISA and the Interagency
Agreement adopted to implement the provision
thereof.
^ ***
(28) With the prior approval of both the Director of
the Board's Division of Banking Supervision and
Regulation and the General Counsel of the Board:
(a) to enter into a written agreement with a bank
holding company or any non-banking subsidiary
thereof, with a State member bank, or with any
other person or entity subject to the Board's supervisory jurisdiction under 12 U.S.C. § 1818(b) concerning the prevention or correction of an unsafe or
unsound practice in conducting the business of such
bank holding company, non-banking subsidiary or
State member bank or other entity, or concerning
the correction or prevention of any violation of law,
rule or regulation, or any condition imposed in
writing by the Board in connection with the granting
of any application or other request by the bank or
company or any other appropriate matter; and (b) to
stay, modify, terminate or suspend an agreement
entered into pursuant to subdivision (a) of this
paragraph. Any agreement authorized under this
paragraph may, by its terms, be enforceable to the
same extent and in the same manner as an effective
and outstanding cease-and-desist order that has become final pursuant to 12 U.S.C. §§ 1818(b) and (k).
BANK HOLDING COMPANY AND BANK
MERGER
ORDERS ISSUED BY THE BOARD OF GOVERNORS
Orders Issued Under Section 3 of Bank Holding
Company Act
Arlington Bancorp, Inc.,
Arlington Heights, Illinois
Cary-Grove Bancorp, Inc.,
Cary, Illinois
Elk Grove Bancorp, Inc.,
Elk Grove Village, Illinois
Hoffman Bancorp, Inc.,
Hoffman Estates, Illinois
(30) To provide to the Department of Labor written
notification of possible significant violations of the
Employee Retirement Income Security Act
Meadows Bancorp, Inc.,
Rolling Meadows, Illinois
Legal Developments
Subpal Bancorp, Inc.,
Palatine, Illinois
Suburban Bancorp, Inc.,
Palatine, Illinois
Woodfield Bancorp, Inc.,
Schaumburg, Illinois
Order Approving Formation of a Bank Holding
Company and Acquisition of Shares of a Bank
Holding Company
Arlington Bancorp, Inc., Arlington Heights, Illinois
("Arlington"), has applied for the Board's approval,
pursuant to section 3(a)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. § 1842(a)(1)), to become a
bank holding company by acquiring 80 percent or
more of the voting shares of Suburban National Bank
of Arlington Heights, Arlington Heights, Illinois
("Bank"), a de novo bank. In connection with this
application, Cary-Grove Bancorp, Inc., Cary, Illinois
("Cary-Grove"); Elk Grove Bancorp, Inc., Elk Grove
Village, Illinois ("Elk Grove"); Hoffman Bancorp,
Inc., Hoffman Estates, Illinois ("Hoffman"); Meadows Bancorp, Inc., Rolling Meadows, Illinois ("Meadows"); Subpal Bancorp, Inc., Palatine, Illinois ("Subpal"); Suburban Bancorp, Inc., Palatine, Illinois
("Suburban"); and Woodfield Bancorp, Inc.,
Schaumburg, Illinois ("Woodfield"), all of which are
one-bank holding companies within the meaning of the
act, have each applied for the Board's approval, under
section 3(a)(3) of the act (12 U.S.C. § 1842(a)(3)), to
acquire up to 14.9 percent of the voting shares of
Arlington.
Notice of the applications, affording opportunity for
interested persons to submit comments and views has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired,
and the Board has considered the applications and all
comments received, including those of the Illinois
Commissioner of Banks and Trust Companies, in light
of the factors set forth in section 3(c) of the act
(12 U.S.C. § 1842(c)).
Arlington, a nonoperating corporation, was organized for the purpose of becoming a bank holding
company by acquiring bank, a de novo bank. CaryGrove, Elk Grove, Hoffman, Meadows, Subpal, Suburban, and Woodfield are one-bank holding companies
by virtue of their ownership, respectively, of Suburban Bank of Cary-Grove, Cary, Illinois ("Cary-Grove
Bank") (deposits of $24.4 million); Suburban Bank of
Elk Grove Village, Elk Grove Village, Illinois ("Elk
Grove Bank") (deposits of $15.4 million); Suburban
Bank of Hoffman-Schaumburg, Hoffman Estates, Illi
727
nois ("Hoffman Bank") (deposits of $24.8 million);
Suburban Bank of Rolling Meadows, Rolling Meadows, Illinois ("Meadows Bank") (deposits of $26.4
million); Suburban National Bank of Palatine ("Subpal
Bank") (deposits of $11.5 million); Palatine National
Bank, Palatine, Illinois ("Suburban Bank") (deposits
of $38 million) ; and Suburban National Bank of Woodfield, Schaumburg, Illinois ("Woodfield Bank") (deposits of $11.3 million.1 Mr. Gerald F. Fitzgerald and
certain members of his immediate family control each
of these seven bank holding companies (collectively
referred to as the "Suburban Bank Group"). Certain
members of the Fitzgerald family are also principals of
Arlington and Bank. After consummation of this proposal, these seven bank holding companies would
control 80 percent or more of Arlington. 2
Bank is to be located in the Chicago banking market.3 The subsidiary banks of six of the seven bank
holding companies in the Suburban Bank Group are
also located in the Chicago market, controlling, in the
aggregate, 0.2 percent of total market deposits. 4 Bank
would be a de novo bank organized by the principals of
Suburban Bank Group. The Board finds that, based
upon the facts of record, consummation of the applications would not result in any adverse competitive
effects in any relevant area. Thus, competitive considerations are consistent with approval of the applications.
1. All banking data are as of December 31, 1980.
2. The Board notes that, in an instance very similar to this
proposal, it found a group of bank holding companies acting together
to acquire the shares of a bank holding company to be a "company"
and a "bank holding company" within the meaning of section 2 of the
act. (Board letter of November 17, 1978, to Mr. William Beaman,
Clerk, United States District Court for the District of Wyoming). The
Board believes that the record in connection with this proposal could
support a finding that the seven bank holding companies known as the
Suburban Bank Group are together a "company" that would become
a "bank holding company" upon consummation of the transaction.
However, the Board finds no regulatory purpose would be served at
this time by requiring the Suburban Bank Group itself to apply for the
Board's prior approval to become a bank holding company and to
register with the Board as such in light of the Suburban Bank Group's
intention to reorganize as a multibank holding company after January 1, 1982, the effective date of the recently enacted amendment to
the Illinois Bank Holding Company Act removing the current prohibition against multibank holding companies in the state. In addition, in
accordance with the opinion of the Illinois Commissioner of Banks
and Trust Companies, the Applicants have committed not to consummate the acquisition of Arlington until after January 1, 1982, in order
to avoid any possible violation of the current Illinois prohibition
against multibank holding companies. If the same or substantially the
same seven bank holding companies again act as a group to acquire
control of another company (before their reorganization into a multibank holding company is complete), such companies may be considered a "company". Accordingly, Applicants should not make any
future joint acquisitions prior to consultation with the Board's staff.
3. The Chicago banking market is approximated by Cook, DuPage,
and Lake Counties, Illinois.
4. The subsidiary bank of Cary-Grove is located in a separate
banking market.
728
Federal Reserve Bulletin • September 1981
Where principals of an applicant are engaged in
operating a chain of banking organizations, the Board,
in addition to analyzing the one-bank holding company
proposal before it, also analyzes the proposal in the
context of multibank holding company standards to
assess the financial and managerial resources and
future prospects of the institutions comprising the
chain. Based upon such an analysis in this case, the
financial and managerial resources and future prospects of the Suburban Bank Group, its subsidiary
banks, and Arlington, are regarded as generally satisfactory. Bank, as a proposed de novo bank, has no
financial or operating history, however, its prospects
as a subsidiary of Arlington appear favorable. Accordingly, considerations relating to banking factors are
consistent with approval of this application.
Within Bank's proposed primary service area, Bank
will be the only full service bank offering lending
services to the public, and will serve as an additional
source of banking services within the Chicago banking
market. Accordingly, considerations relating to the
convenience and needs of the community lend weight
toward approval of the applications. It is the Board's
judgment that consummation of the proposed transaction would be in the public interest and the applications should be approved.
On the basis of the record, the applications are
approved for the reasons summarized above. The
transactions shall not be made before January 1, 1982,
or later than three months after January 1, 1982, and
Suburban National Bank of Arlington Heights, Arlington Heights, Illinois, shall be opened for business not
later than six months after the effective date of this
Order,5 unless such period is extended for good cause
by the Board, or by the Federal Reserve Bank of
Chicago, pursuant to delegated authority.
By order of the Board of Governors, effective
August 19, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, and Gramley. Absent and not
voting: Teeters and Rice.
(Signed) WILLIAM W. WILES,
[SEAL]
Secretary of the Board.
5. In order to comply with the Illinois Bank Holding Company Act,
which until January 1, 1982, prohibits multibank holding companies in
Illinois (16 1/2 111. Rev. State. § 71 et seq.), the Applicants have
committed, in accordance with the advice of the Illinois Commissioner of Banks and Trust Companies, that Bank will be chartered before
January 1, 1982, and the proposal will not be consummated before
January 1, 1982, the effective date of the new legislation permitting
multibank holding companies in Illinois. The new Illinois law would
generally prohibit the acquisition of a de novo bank chartered after
January 1, 1982.
Commercial Security Bancorporation,
Ogden, Utah
Order Denying Acquisition of Bank
Commercial Security Bancorporation, Ogden, Utah, a
bank holding company within the meaning of the Bank
Holding Company Act, as amended, has applied for
the Board's approval under section 3(a)(3) of the act
(12 U.S.C § 1842(a)(3)) to acquire 100 percent of the
voting shares of Box Elder County Bank, Brigham
City, Utah ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments and views has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired
and the Board has considered all comments received
in light of the factors set forth in section (c) of the act
(12 U.S.C. § 1842(c)).
Applicant, the fourth largest banking organization in
Utah, controls two banking subsidiaries with aggregate deposits of $433 million, representing approximately 8.0 percent of total deposits in commercial
banks in the state.' Bank, with deposits of $40.5
million is the 14th largest banking organization in
Utah, representing approximately 0.7 percent of statewide commercial bank deposits. Consummation of the
proposed acquisition would not alter Applicant's ranking in the state, although Applicant's share of statewide commercial bank deposits would increase to 8.7
percent. The Board concludes that consummation
would not result in a significant increase in concentration of banking resources in Utah.
Bank is located in Brigham City, the county seat of
Box Elder County, Utah. Applicant's closest subsidiary bank, Bear River State Bank ("Bear River
Bank") is located in Tremonton, the second largest
city in Box Elder County. Applicant asserts that
Brigham City and Tremonton are in separate banking
markets and that consummation of the transaction
would not have any significant adverse effects.
The Supreme Court has articulated a number of
factors to be considered in determining a geographic
banking market. See United States v. Philadelphia
National Bank, 374 U. S. 321 (1963); United States v.
Phillipsburg National Bank & Trust Co., 399 U. S. 350
(1970). See also Mid-Nebraska Banc shares v. Board
of Governors, 627 F.2d 266 (D.C. Cir. 1980). These
cases indicate that the competitive effects of a proposed acquisition should be judged in a localized
market in which banks offer their services and to
1. Except as otherwise indicated, all banking data are as of December 11, 1980 and do not reflect Applicant's acquisition on April 4,
1981, of Bear River State Bank, Tremonton, Utah.
Legal Developments
which local customers can practically turn for alternatives. The Supreme Court has stated in this regard
that, "the proper question is not where the parties to
the merger do business or even where they compete,
but where, within the area of competitive overlap, the
effect of the merger on competition will be direct and
immediate." (United States v. Philadelphia National
Bank, supra, at 357.) In determining what this area is,
the Supreme Court sought "to delineate the areas in
which bank customers that are neither very large nor
very small find it practical to do their banking business. . . . United States v. Philadelphia National
Bank, supra at 359.
Based on a review of all the facts of record, the
Board believes that the relevant banking market is
approximated by Box Elder County. Approximately
80 percent of the County's population lives in Brigham
City and the Tremonton areas. The two communities
are 19 miles apart and are connected by a superhighway. There are no intervening natural barriers. A
newspaper and a radio station located in Brigham City
serve both communities. The record indicates that
there is a significant amount of commuting to points
between and through the two communities. Moreover,
the primary service areas of both Bank and Bear River
Bank are confined to Box Elder County. Accordingly,
the Board finds that Bank and Bear River Bank are
institutions "to which local customers can practically
turn for alternatives" and that the smaller banking
markets proposed by Applicant are too narrow to
approximate accurately the area where the competitive effects of the acquisition will be direct and immediate.
Bank, with $40.5 million in deposits, is the second
largest of four banking organizations in the Box Elder
County banking market, and controls 29.2 percent of
the market's commercial bank deposits. Applicant's
subsidiary, Bear River Bank (deposits of $14.9 million)
is the third largest banking organization in that market
with 11.9 percent of the market's commercial bank
deposits. Acquisition of Bank would increase Applicant's share of market deposits to 41.1 percent and
Applicant would become the second largest banking
organization in the relevant banking market. The
Board notes that consummation of the proposal also
would increase the concentration of banking resources
in the already concentrated Box Elder County banking
market. The Board further notes that the increase in
Applicant's market share as a result of the proposal
would substantially exceed the Department of Justice
Merger Guidelines. Based on all the facts of record,
the Board concludes that the effects of the proposal on
competition would be substantially adverse.
The financial and managerial resources and future
prospects of Applicant, its banking subsidiaries and
729
Bank are regarded as satisfactory. Accordingly, banking factors are consistent with, but lend no weight
toward approval of the application. While Applicant
proposes to assist Bank in offering additional services,
there is no indication that the needs of Bank's customers are not currently being met or that the benefits
expected from the proposal cannot reasonably be
expected through other means. 2 Accordingly, the
Board finds that considerations relating to the convenience and needs of the community to be served do not
outweigh the substantially adverse competitive effects
that would result from Applicant's acquisition of
Bank.
On the basis of the foregoing and other considerations reflected in the record, it is the Board's judgment that consummation of the proposed transaction
would not be in the public interest, and the application
is hereby denied.
By order of the Board of Governors, effective
August 4, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Teeters, Rice, and Gramley. Absent and
not voting: Governor Partee.
( S i g n e d ) WILLIAM W . WILES,
[SEAL]
Secretary of the Board.
Midland Bank Limited,
London, England
Order Approving Formation of Bank Holding
Company, Acquisition of Nonbank and Edge Act
Subsidiaries and Retention of Nonbank Companies;
Order Denying Retention of Travel Agency Activities
of Thomas Cook, Inc.
Midland Bank Limited ("Midland"), London, England, has applied under section 3(a)(1) of the Bank
Holding Company Act (12 U.S.C. § 1842(a)(1)) for
approval of the formation of a bank holding company
by acquiring 51 percent of the voting shares of Crocker
National Corporation ("Crocker"), San Francisco,
California.
Midland has also applied to do business under
section 25(a) of the Federal Reserve Act (the "Edge
Act") (12 U.S.C. §§ 611-631) by acquiring indirectly
the shares of three Edge Corporation subsidiaries
owned by Crocker National Bank: Crocker Bank
International (Chicago), Chicago, Illinois; Crocker
Bank International (New York), New York, New
2. See United States v. Third National Bank, 390 U.S. 171, 190
(1968).
730
Federal Reserve Bulletin • September 1981
York; and Crocker International Investment Corporation, San Francisco, California. The factors that are
considered in acting on these applications include
those set forth in section 211.4(a) of the Board's
Regulation K (12 C.F.R. § 211.4(a)).
Midland has also applied, pursuant to section 4(c)
(8) of the Bank Holding Company Act (12 U.S.C.
§ 1843(c)(8)) and section 225.4(b)(2) of the Board's
Regulation Y (12 C.F.R. § 225.4(b)(2)), for permission
to acquire indirectly voting shares of the following
subsidiaries of Crocker: (1) Bishop Building Co., Inc.,
Honolulu, Hawaii, which owns and operates the Bishop Trust Building in Honolulu and leases it to subsidiaries of Crocker and other tenants; (2) Bishop Trust
Company, Ltd., Honolulu, Hawaii, which conducts a
full-service trust business and provides limited data
processing services to other Crocker subsidiaries; (3)
Hawaii Finance Company, Ltd., Honolulu, Hawaii,
which operates as an industrial loan company making
secured and unsecured loans to individuals; (4) Miles
Crossing Ltd., Honolulu, Hawaii, which owns real
estate mortgages and other real estate receivables; (5)
CNC Insurance Agency Inc., San Francisco, California, which engages in the activity of acting as agent for
credit life, credit accident, and health insurance directly related to extensions of credit by Crocker's subsidiaries; (6) Crocker Investment Management Corp.,
San Francisco, California, which engages in the activity of providing portfolio investment advice and general
economic and financial information and advice; (7)
Crocker Mortgage Investment Company Inc., Los
Angeles, California, which engages in the activities of
originating, purchasing, and servicing loans secured
by real estate and servicing loans and other extensions
of credit; (8) Western Bradford Trust Company, San
Francisco, California, a trust company which furnishes services to security holders, brokers, dealers
and issuers, provides data processing services to
Crocker and its subsidiaries, and provides computer
software services to Crocker and its subsidiaries; and
(9) Crocker Holdings Inc., Germantown, Tennessee,
which holds real estate related assets of Crocker that
are in the process of liquidation.
In addition, Midland has applied, pursuant to section 4(c)(8) of the Bank Holding Company Act and
section 225.4(b)(2) of the Board's Regulation Y, for
permission to retain the following indirect subsidiaries: (1) Samuel Montagu (Metals), Inc., New York,
New York, which engages in the activity of dealing in
precious metals by buying and selling gold and silver
on the spot and futures markets for its own account,
and deals with other precious metals dealers; (2)
Thomas Cook, Inc., New York, New York, a company that engages in the issuance and sale of travelers
checks; (3) London American Finance Corporation,
New York, New York, a commercial finance company
specializing in overseas trade financing of products
manufactured in the United States; (4) LAFCO (Western Hemisphere), Ltd., New York, New York, which
markets the services of certain financing affiliates in
the western hemisphere, and extends credit to Latin
American importers of United States products; and (5)
Export Credit Corporation, a commercial finance
company specializing in overseas trade financing of
products manufactured in the United States.
The activities applied for have either been specified
by the Board in section 225.4(a) of Regulation Y as
permissible for bank holding companies, subject to
Board approval of individual proposals in accordance
with the procedures of section 225.4(b), or have been
authorized by Order under section 4(c)(8) in particular
cases.
Midland has also applied, pursuant to section 4(c)
(9) of the Bank Holding Company Act (12 U.S.C.
§ 1843(c)(9)) and section 211.23(f)(5) of the Board's
Regulation K (12 C.F.R. § 211.23(f)(5)), to retain Midland's interest in The Thomas Cook Group Ltd.
("TCG"), Peterborough, England. TCG provides retail and wholesale travel arrangements, and issues and
sells travelers checks on a worldwide basis through its
subsidiaries.1
Notice of receipt of these applications has been
given in accordance with sections 3 and 4 of the Bank
Holding Company Act (46 Federal Register 18,066
(1981)), and the time for filing views and comments has
expired. The Board has considered the applications
and all comments received in light of the factors set
forth in section 3(c) of the Bank Holding Company Act
(12 U.S.C. § 1842(c)), the considerations specified in
sections 4(c)(8) and (9) of the Bank Holding Company
Act, and the purposes of the Edge Act.
Midland is the third largest of the major London
clearing banks and the lead bank of the 15th largest
banking organization in the world, with total deposits
of approximately $55.1 billion.2 Midland's business
consists of the provision of a wide range of banking,
financial, and related services through its various
subsidiaries and affiliated companies. Domestic banking is conducted through a network of more than 3,000
branches by Midland itself in England and Wales, and
by subsidiaries in Scotland, Northern Ireland, and the
Republic of Ireland. In addition to commercial banking
and trust services, Midland engages in merchant banking, equity financing, mortgage banking, consumer
financing, equipment leasing, factoring, providing
travel services, and issuing and selling travelers
1. As noted above, Midland applied pursuant to section 4(c)(8) to
retain TCG's U.S. travelers check business.
2. Banking data for Midland are as of December 31, 1980.
Legal Developments
checks on a worldwide basis. Approximately 60 percent of Midland's profits derive from domestic banking; 25 percent from its international activities; and 15
percent from related services.
Crocker does not engage directly in any activity
except holding shares of its subsidiaries. Its banking
subsidiary, Crocker National Bank ("Bank"), San
Francisco, California, holds domestic deposits of approximately $11.4 billion, is the fourth largest banking
organization in California, with 385 branches, and the
12th largest banking organization in the United
States. 3 Upon consummation of this proposal, Midland would be the 10th largest banking organization in
the world.
Midland does not operate any banking offices in the
United States. 4 Accordingly, the Board finds that
approval of the proposal would have no significant
effect on the concentration of banking resources or
existing competition in any relevant area. Furthermore, while Midland has demonstrated that it is a
likely entrant into the United States banking market,
and has the financial reosurces to establish de novo
offices in Bank's major market areas, most of the
metropolitan California markets in which Bank competes are competitive markets; therefore, the elimination of probable future competition would not be
significant. Accordingly, the Board finds consummation of the proposal would have no significant effect on
probable future competition.
The financial and managerial resources and future
prospects of Midland appear generally satisfactory.
Under the proposed transaction, Crocker would receive capital injections totalling $495 million. In the
first stage of the proposal, Midland would acquire 51
percent of Crocker for $595 million, of which $270
million would be added to Crocker's capital funds
through the purchase of newly issued shares. In the
second stage of the proposal, Midland, at its option or
upon call by Crocker, would purchase, over four
years, new common shares from Crocker for a total of
$225 million. The additional purchase would increase
Midland's ownership of Crocker from 51 percent to 57
percent.
The Board regards the additional capital being provided to Crocker as a result of the transaction as a
positive factor in that it provides the opportunity to
achieve a permanent enhancement of Crocker's capi-
3. Banking data for Crocker and market data are as of December
31, 1980.
4. Midland does have, as discussed below, a 20.125 percent interest
in European American Bancorp, New York, New York, which has a
wholly-owned subsidiary bank, European American Bank and Trust
Company, New York, New York. In addition, Thomas Cook Travellers Cheques, Ltd. is licensed as a banking agency under New York
State Banking Law.
731
tal position. Moreover, the Board expects that both
Midland and Crocker will be mindful of this opportunity in the employment of the new capital funds.
The Board notes that Crocker's capital ratios are
comparable to the ratios of other large U.S. banks at
the present time. The Board, however, is aware that
the capital ratios of the largest U.S. banks have
generally declined over the past few years while, at the
same time, the risks to which they are exposed have
increased. The Board believes, therefore, that banks
in this position should avail themselves of every
opportunity to strengthen their capital positions. The
injection of capital by Midland provides such an
opportunity consistent with a reasonable rate of
growth in Crocker's assets. In exercising its responsibility under the Bank Holding Company Act, the
Board will monitor closely the capital position of large
banking organizations in connection with their future
expansion plans.
In light of all the facts of record, the Board concludes that banking factors and considerations relating
to the convenience and needs of the communities to be
served are consistent with approval of the applications. The Board's judgment is that, with respect to
the application filed under section 3 of the Bank
Holding Company Act, consummation of the proposal
would be in the public interest and should be approved.
In reaching these conclusions, the Board has given
due consideration to the public comments received on
these applications, and the views expressed on the
proposal at the public meeting ordered by the Board,
and held in San Francisco, California, on June 22,
1981. The Board had ordered this meeting because of
the importance of Crocker in the communities in
which it operates and because of the interest of the
public in the proposal. The objections expressed in the
written submissions and at the public meeting were
based primarily upon issues related to the foreign
acquisition of U.S. banks in general and Community
Reinvestment Act considerations. The Board has determined that these objections do not warrant denial of
the application. The Board notes that there is no
statutory authority in the Bank Holding Company Act
for taking into account the nationality of the acquiring
company, and that the Community Reinvestment Act
does not apply to a transaction where the acquiring
banking organization has no banking presence in the
United States. At the June 22 meeting the Board also
considered the written submissions and oral presentations in regard to their bearing on the convenience and
needs factors that the Board must consider under the
Bank Holding Company Act, and found that these
factors are positive and consistent with approval as
discussed above. Accordingly, the Board has deter-
732
Federal Reserve Bulletin • September 1981
mined that the public comments on the applications do
not raise issues that would warrant denial, or conditional approval of this application.
As discussed above, Midland currently has a 20.125
percent ownership interest in European-American
Bancorp ("EAB"), New York, New York, a bank
holding company with respect to European-American
Bank and Trust Company ("EABTC"), New York,
New York. At the time the Board approved EAB's
application to become a bank holding company in 1977
concluded that neither Midland nor any of the other
five foreign banks having interests in EAB should be
considered bank holding companies, individually or
collectively.5
Section 3(d) of the Bank Holding Company Act
(12 U.S.C. § 1842(d)) generally prohibits the Board
from approving an application that would permit a
bank holding company to acquire more than 5 percent
of the voting shares of a bank located outside of the
bank holding company's principal state of banking
operations, unless such acquisition is specifically authorized by state law. Although Midland is not currently a bank holding company, Midland's acquisition
of Crocker while maintaining its present interest in
EAB would be inconsistent with the legislative direction contained in section 3(d).
Therefore, in order to prevent any evasion of the
provisions and purposes of section 3(d), the Board has
determined that Midland should be required to divest
its interest in EAB. In light of the unique structure of
EAB as a consortium organization, and taking into
consideration EABTC's acquisition in 1974 of the
assets of Franklin National Bank, the Board believes
that it would be appropriate to allow Midland a longer
period of time than is usual in order to complete the
divestiture. The additional time will provide EAB and
its owners flexibility to assure that the capital strength
of the institution will be adequately maintained. Therefore, the Board has determined that Midland should
reduce its interest in EAB to five percent or less of
EAB's shares within three years of consummation of
the transaction, provided that such period may be
extended for good cause by the Board or by the
Federal Reserve Bank of San Francisco under delegated authority.
With respect to the applications to acquire Crocker's nonbank subsidiaries, it was previously determined that the balance of public interest factors prescribed by section 4(c)(8) of the Bank Holding
Company Act favored approval of the acquisition of
these companies when they were acquired originally
by Crocker. Nothing in the record suggests that Midland's acquisition of Crocker would alter that balance.
Furthermore, the Board has determined that retention
by Midland or Samuel Montagu (Metals), Inc., Thomas Cook, Inc. (issuance and sale of travelers checks),
London American Finance Corporation, LAFCO
(Western Hemisphere), Ltd., and Export Credit Corporation would produce benefits to the public and
would be in the public interest. There is no evidence in
the record that consummation of the proposal would,
with respect to these section 4(c)(8) applications,
result in undue concentration of resources, decreased
or unfair competition, conflicts of interests, unsound
banking practices, or other adverse effects on the
public interest. Accordingly, the Board has determined that the balance of public interest factors it must
consider under section 4(c)(8) of the Bank Holding
Company Act favors approval of the applications filed
under that section, and that those applications should
be approved. 6
Similarly, with respect to Crocker's three Edge
corporations, the public interest in the uninterrupted
continuation of their service to customers favors approval of their retention after Crocker is acquired by
Midland. The financial and managerial resources of
Midland, an organization broadly represented in foreign markets, are regarded as consistent with approval
of the acquisition of these three corporations by Midland. Their acquisition by Midland would enable these
Edge corporations to continue the international services Crocker's Edge Corporations are able to provide
to their customers, consistent with the purposes of the
Edge Act to afford at all times a means of financing
international trade, to stimulate competition for international banking and financing services, and to facilitate and stimulate United States exports. Accordingly,
the Board finds that the applications filed under the
Edge Act for the retention of Crocker Bank International (Chicago), Crocker Bank International (New
York), and Crocker International Investment Corporation should be approved.
Midland has also applied, pursuant to section 4(c)(9)
of the Bank Holding Company Act and section 211.23
of the Board's Regulation K, to retain its whollyowned subsidiary, Thomas Cook Group Ltd.
("TCG"), a worldwide travel agency whose U.S.
subsidiary is Thomas Cook, Inc. ("TCI"). Midland,
through its indirect subsidiary, TCI, engages in provid-
5. The other shareholders of EAB are Societe Generale de Banque,
S.A., Brussels, Belgium (20.125%); Deutsche Bank A.G., Frankfurt,
Germany (20.125%); Amsterdam-Rotterdam Bank, N.V., Amsterdam, The Netherlands (17.0%); Societe Generale, Paris, France
(20.125%); and Creditanstalt Bankverein, Vienna, Austria (2.5%).
6. In light of the Board's action requiring Midland's divestiture of
EAB, the applications filed under section 4(c)(8) to retain EAB's
nonbank subsidiaries are rendered moot.
(63 FEDERAL RESERVE BULLETIN 595), t h e
Board
Legal Developments
ing travel services in the United States as part of the
worldwide travel services provided by its parent company, TCG. Section 211.23(f)(5)(iii)(B) of the Board's
Regulation K specifically states that a foreign banking
organization may engage in the activity of arrangement
of passenger transportation (Standard Industrial Code
4722) in the United States only with the approval of the
Board pursuant to section 4(c)(9) of the Bank Holding
Company Act.
TCG, a British company controlled by Midland
since 1972 and wholly-owned by Midland since 1977,
provides retail and wholesale travel arrangements, and
sells travelers checks on a worldwide basis through its
subsidiaries. TCG currently engages in the wholesale
and retail travel business through the Travel Division
of its wholly-owned U.S. subsidiary, TCI, a New York
Corporation. TCI serves customers in both the business and pleasure travel segments (70 percent of
revenues and 30 percent of revenues, respectively)
through a nationwide retail network of 66 travel outlets
in 53 cities in the United States. Several of the outlets
in New York engage in both wholesale travel business
(packaging of tours) and retail travel business. All
other U.S. outlets engage only in retail business.
In support of its application to retain TCI, Midland
has made a number of commitments and presented
evidence to demonstrate that an exemption under
section 4(c)(9) would not be at variance with the
purposes of the Bank Holding Company Act and
would be in the public interest. In the past, Midland
and TCI have not sought public recognition of their
connection and there is little public identification in
the U.S. of one with the other. Midland has committed
to preserve the complete separation of its banking
operations in the United States, whether conducted
through Crocker or otherwise, from the travel business conducted in the United States by TCI. Midland
also contends that retention of TCI would be in the
public interest because of the fragmentation of the
U.S. travel agency industry and because TCI brings
foreign revenues to the United States by virtue of its
relationship with TCG.
Section 4(c)(9) of the Bank Holding Company Act
provides that the nonbanking prohibitions of section 4
shall not apply to the investments or activities of a
foreign company that conducts the greater part of its
business outside the U.S. if the Board by regulation or
order determines that, under the circumstances and
subject to the conditions set forth in the regulation or
order, the exemption would not be substantially at
variance with the purposes of the Bank Holding Company Act and would be in the public interest. In
determining whether to grant an exemption under
section 4(c)(9), the Board has generally considered
among other things whether such exemption would
733
give the foreign institution a competitive advantage
over domestic banking organizations. 7
With respect to this application, the Board notes
that not only are the travel agency activities of TCI
impermissible for domestic banking organizations but
TCI, in addition to providing travel services to its
customers, provides nationwide outlets for the sale of
Thomas Cook travelers checks and for the conducting
of foreign currency transactions. Thus, Midland would
be able, through TCI, to combine under common
ownership and operation permissible section 4(c)(8)
activities with the impermissible activity of operating a
travel agency. No U.S. banking organization is able to
market section 4(c)(8) services throughout the United
States in the same manner. 8 Midland's commitments
regarding the separation of its U.S. travel and banking
business do not reduce the competitive advantage
Midland would gain over domestic organizations in the
conduct of its permissible nonbanking activities. Thus,
based on all the facts of record, the Board concludes
that Midland's retention of the travel services of TCI
would be substantially at variance with the purposes of
the Bank Holding Company Act and that the application to retain TCI under section 4(c)(9) should be and
is denied. Accordingly, under section 4(a)(2) of the
Bank Holding Company Act, Midland must divest the
travel agency operations of TCI within two years of
acquiring Crocker, unless such period is extended for
good cause by the Board or by the Federal Reserve
Bank of San Francisco, pursuant to delegated
authority.9
Midland has also indicated that it intends to retain
certain indirect investments in the United States
through foreign nonbanking companies on the basis of
7. See The Royal Trust Company, 60 FEDERAL RESERVE BULLETIN
58 (1974); Lloyds
(1974); The Bank
Bank Limited,
of Tokyo, Ltd.,
6 0 FEDERAL RESERVE BULLETIN 139
61 FEDERAL RESERVE BULLETIN 4 4 9
(1975); and Israel Discount Bank Limited, 66 FEDERAL RESERVE
BULLETIN 910 (1980).
8. By order dated January 26, 1976, the Board found that the
operation of a travel agency is not closely related to banking and
therefore determined not to add the operation of a travel agency to the
list of permissible activities in Regulation Y (62 FEDERAL RESERVE
BULLETIN 148 (1976)).
9. As noted above, a subsidiary of Midland is licensed by the New
York State Banking Department to maintain an agency in New York
City and has operated the agency since prior to July 26, 1978.
Although Midland has not asserted grandfather rights under the
International Banking Act of 1978 to retain TCI, the Board has
examined the question of Midland's grandfathered status. In light of
previous Board determinations that an otherwise grandfathered foreign bank loses that status upon the acquisition of a U.S. subsidiary
bank, the Board has determined that Midland may not retain the travel
agency operation of TCI pursuant to 12 U.S.C. § 3106(c). National
Westminster Bank Limited, 65 FEDERAL RESERVE BULLETIN 357
(1979); Algemene Bank Nederland, N.V., 65 FEDERAL RESERVE
BULLETIN 658 (1979).
734
Federal Reserve Bulletin • September 1981
section 2(h) of the Bank Holding Company Act
(12 U.S.C. § 1841(h)). In each instance, Midland has
provided information on the size and amount of assets
and revenues of the foreign company abroad and of its
U.S. operations, and information on whether the activity of the U.S. operations is in the same general line
of business as that of the foreign nonbanking company. From the information provided, it appears that
retention of these investments is permissible under
section 2(h).
Based on the foregoing and other considerations
reflected in the record, the Board has determined that
the applications under sections 3(a)(1) and 4(c)(8) of
the Bank Holding Company Act and under the Edge
Act should be and hereby approved subject to the
following conditions:
(1) that Midland reduce its interest in EAB to five
percent or less of EAB's shares within three years of
consummation of the transaction; and
(2) that Midland divest the travel agency operations
of TCI or reduce its interest in TCI to five percent or
less" of TCI's shares within 2 years of consummation
of the transaction.
The periods referred to above may be extended for
good cause by the Board or by the Federal Reserve
Bank of San Francisco under delegated authority. The
acquisition of Crocker shall not be made 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, pursuant to delegated authority. The determination as to Midland's acquisition of
Crocker's nonbank subsidiaries and retention of its
own nonbank subsidiaries under section 4(c)(8) of the
act is subject to the conditions set forth in section
225.4(c) of Regulation Y, and to the Board's authority
to require such modification or termination of the
activities of a bank holding company or any of its
subsidiaries as the Board finds necessary to assure
compliance with the provisions and purposes of the act
and the Board's Orders and regulations issued thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
August 25, 1981.
Voting for these actions: Chairman Volcker and Governors
Schultz, Wallich, Partee, and Gramley. Absent and not
voting: Governors Teeters and Rice. Not voting on the
insurance activities: Governors Schultz and Wallich.
( S i g n e d ) WILLIAM W . WILES,
[SEAL]
Secretary of the Board.
New England Merchants Company, Inc.,
Boston, Massachusetts
T.N.B. Financial Corp.,
Springfield, Massachusetts
Order Approving Merger of Bank Holding
Companies
New England Merchants Company, Inc., Boston,
Massachusetts, a bank holding company within the
meaning of the Bank Holding Company Act, has
applied for the Board's approval under section 3(a)(5)
of the act (12 U.S.C. § 1842(a)(5)) to merge with
T.N.B. Financial Corp., Springfield, Massachusetts
("T.N.B."), under the name and charter of New
England Merchants Company, Inc. ("Applicant").
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the act.
The time for filing comments and views has expired
and the Board has considered the application and all
comments received in light of the factors set forth in
section 3(c) of the act (12 U.S.C. § 1842(c)).
Applicant, the fourth largest banking organization in
Massachusetts, controls five banks with aggregate
deposits of $2.0 billion, representing 9.2 percent of
total deposits in commercial banks in the state. 1
T.N.B., the eighth largest banking organization in the
state, controls six banks with total deposits of approximately $588.7 million, representing 2.8 percent of total
statewide commercial bank deposits. Upon consummation, the resulting banking organization would rank
as the third largest in the state, controlling 12.0 percent
of total deposits in commercial banks in the state.
Although the proposed merger would increase the
share of total deposits held by the five largest banking
organizations in Massachusetts, in light of all the facts
of record, 2 it appears that consummation of the proposal would have only slightly adverse effects on the
concentration of banking resources in the state.
Applicant's subsidiary banks do not compete in the
five banking markets in which T.N.B. operates and the
shortest distance between offices of Applicant and
T.N.B. is 64 miles. Thus, consummation of the transaction would not have any effect on existing competition in any relevant area. T.N.B.'s subsidiary banks
compete in the Springfield, Amherst-Northampton,
Greenfield, North Adams-Williamstown and Athol
1. All banking data are as of December 31, 1980.
2. Although the Board is of the opinion that thrift institutions do not
compete actively with commercial banks over a sufficient range of
services to consider them full competitors of commercial banks, the
Board, in light of the relative size and nature of the operations of thrift
institutions in Massachusetts, regards their presence as a mitigating
factor to reduce the effects on concentration in the state.
Legal Developments
banking markets. The proposed merger would have no
significant adverse effect on probable future competition in these markets because, in general, the markets
are not attractive to de novo entry. Moreover, Applicant's banks are restricted by law from branching into
these areas, and the alternatives available to Applicant
for entering these markets are limited. Thus, consummation of the transaction would not result in any
adverse effects on probable future competition in these
markets.
Applicant's subsidiary banks operate in the Boston,
Fall River, Cape Cod, and New Bedford banking
markets. Although T.N.B. appears to have the resources to expand into these markets absent the
proposed affiliation, there are several factors that
mitigate any adverse effects on probable future competition that may result from the proposed merger. The
New Bedford and Fall River markets are not considered attractive to de novo entry at this time, and
T.N.B.'s subsidiary banks are prohibited by state law
from branching into any of the markets in which
Applicant's banks operate. Although the Boston banking market may be considered attractive to de novo
entry, it is not a highly concentrated market 3 and loss
of T.N.B. as a future entrant would not have any
serious adverse effects on competition. Moreover, in
light of T.N.B.'s history of expansion, which has been
limited to the western and central portions of the state,
the Board is unable to conclude that T.N.B. is a likely
entrant into any of the four markets in which Applicant
competes. These markets are all located in the eastern
part of Massachusetts and are a considerable distance
from T.N.B. headquarters in Springfield. Moreover,
there are substantial numbers of thrift institutions in
each of these markets that compete to some extent
with commercial banks, thus further mitigating any
adverse competitive effects associated with the proposal. Therefore, the Board finds that consummation
of the proposal would have only slightly adverse
effects on probable future competition.
The financial and managerial resources of Applicant, T.N.B., and their subsidiaries are considered
generally satisfactory and their future prospects favorable. Thus, considerations relating to banking factors
are consistent with approval. Following consummation of the proposed transaction, Applicant will assist
T.N.B. in offering simple interest loans and a onepercent interest rate reduction on such loans when
payments are made by automatic transfer from the
3. The Boston banking market is approximated by the Boston RMA
and includes the major metropolitan areas (SMSAs) of Boston,
Brockton, Lowell, and Lawrence-Haverhill. There are 159 cities and
towns in this market which extends over the entire east coast of
Massachusetts except Cape Cod, and the market also includes 13
towns in southern New Hampshire.
735
customer's checking account. Affiliation with Applicant will enable T.N.B. to service larger borrowers
through overline participation with Applicant's subsidiaries, and will allow T.N.B. to participate more
actively in the secondary mortgage market which
would enable its banks to become more reliable
sources of mortgage funds. Accordingly, the Board
concludes that considerations relating to the convenience and needs of the communities to be served lend
weight toward approval. Based upon the foregoing and
other considerations reflected in the record, the
Board's judgment is that the proposed merger is in the
public interest and that the application should be
approved.
On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made before the thirty days after
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, pursuant to
delegated authority.
By order of the Board of Governors, effective
August 20, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, and Gramley. Absent and not
voting: Governors Teeters and Rice.
( S i g n e d ) BARBARA R . LOWREY,
[SEAL]
Assistant Secretary of the Board.
Orders Issued Under Sections 3 and 4 of Bank
Holding Company Act
Canadian Commercial Bank,
Edmonton, Alberta, Canada
CCB Bancorp, Inc.
Los Angeles, California
Order Approving Formation of Bank Holding
Companies and Engaging in Mortgage Banking
Activities
Canadian Commercial Bank, Edmonton, Alberta,
Canada ("CCB"), a foreign bank subject to certain
provisions of the Bank Holding Company Act, 1 and its
subsidiary, CCB Bancorp, Inc., Los Angeles, Califor-
1. CCB, a foreign bank operating an agency in Los Angeles,
California, is subject to certain provisions of the act pursuant to
section 8(a) of the International Banking Act of 1978 (12 U.S.C.
§ 3106(a) (1978)).
736
Federal Reserve Bulletin • September 1981
nia ("CCB Bancorp"), have applied for the Board's
approval, pursuant to section 3(a)(1) of the act
(12 U.S.C. § 1842(a)(1)) to become bank holding companies by acquiring, indirectly and directly, 40.12
percent of the voting shares of Westlands Bank, Santa
Ana, California ("Bank"). 2
CCB has also applied under Section 4(c)(8) of the act
(12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the
Board's Regulation Y (12 C.F.R. § 225.4(b)(2)) for
permission to engage de novo through its subsidiary,
CCB Realty, Inc., Los Angeles, California ("CCB
Realty"), in mortgage banking activities. Such activities have been determined by the Board to be closely
related to banking (12 C.F.R. § 225.4(a)(1)).
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with sections 3 and 4 of the
act (46 Federal Register 32,504 (1981)). The time for
filing views and comments has expired, and the Board
has considered the applications and all comments
received in light of the factors set forth in section 3(c)
of the act (12 U.S.C. § 1842(c)) and the considerations
specified in section 4(c)(8) of the act.
CCB is a Canadian bank with total assets and
deposits (as of October 31, 1980) of approximately
$768.4 million and of $649.8 million, respectively.
CCB Bancorp is a nonoperating California corporation
with no subsidiaries, organized for the purpose of
becoming a bank holding company by acquiring Bank.
Upon acquisition of Bank (deposits of $188.0 million),
CCB Bancorp and, indirectly CCB, would control the
39th largest commercial banking organization headquartered in California and would hold approximately
0.1 percent of the total deposits in commercial banks
in the state. 3 Bank is the 33rd largest of 104 commercial banking organizations located in the Los Angeles
banking market and holds approximately 0.2 percent
of the total deposits in commercial banking organizations in the market. 4 CCB Currently engages in business in the United States solely through an agency
("Agency") located in Los Angeles, California, which
had loans totalling approximately $140.0 million outstanding as of December 31, 1980. Although Agency
2. CCB also intends to acquire a two-year stock purchase warrant
entitling it to purchase 625,309 shares of Bank; a four-year stock
purchase warrant entitling it to purchase 500,000 shares of Bank; and a
stock purchase option right if, under certain conditions, there should
be an issuance of Bank stock, options, warrants or convertible
securities during the third or fourth years following CCB's initial
acquisition of Bank's shares. CCB proposes to transfer its warrant and
option rights to CCB Bancorp. Under section 3 of the act, Board
approval would be required prior to any purchase of Bank's shares
through the exercise of rights or warrants (12 C.F.R. § 225.103).
3. All banking data are as of December 31, 1980.
4. The Los Angeles banking market is approximated by the Los
Angeles RMA, which consists of parts of Los Angeles, Orange, San
Bernadino, Riverside, and Ventura Counties.
has no authority to accept deposits, it does compete
directly for loans with Bank's Santa Ana branch and
Laguna Niguel loan production office, both located in
the Los Angeles banking market. However, following
consummation of the proposal, Bank's market share
and rank would be unchanged and numerous banking
alternatives would remain within the market. It appears from these and other facts of record that consummation of the proposal would not result in any
adverse effects upon existing or potential competition
or increase the concentration of banking resources in
any relevant area. Accordingly, the Board concludes
that competitive considerations are consistent with
approval of the applications.
The financial and managerial resources and future
prospects of CCB, CCB Bancorp, and Bank appear
generally satisfactory, particularly in light of the $5.0
million in new capital that would be injected into Bank
following consummation of this proposal. Accordingly, banking factors lend weight toward approval of the
applications of CCB and CCB Bancorp to become
bank holding companies. Upon consummation of the
proposal, CCB intends to assist Bank in providing new
and improved services to its customers. In this regard,
the Board notes that CCB has particular expertise in
the areas of commercial, industrial, and real estate
lending, data processing services and mortgage banking, that will enable it to lend support to Bank's
operations. Moreover, the increased flexibility and
resources made available by CCB to Bank will assist
Bank in continuing to meet the convenience and needs
of its community. Thus, considerations relating to the
convenience and needs of the community to be served
lend weight toward approval of the applications to
acquire Bank. Accordingly it is the Board's judgment
that the acquisition of Bank by CCB and CCB Bancorp
would be in the public interest and the applications
should be approved.
CCB has also applied for permission to engage de
novo through its subsidiary, CCB Realty, in the mortgage banking activities of making, acquiring and servicing loans and other extensions of credit secured by
real estate mortgages and deeds of trust. These activities will include the origination, processing, servicing,
and acquiring of mortgage loans or other extensions of
credit secured by mortgages on residential single- and
multi-family real estate, and commercial and industrial
properties. In addition, CCB Realty's activities will
include the purchase, sale or placement of mortgage
loans, and the management and sale of property acquired through foreclosure. CCB Realty's activities
will be conducted from an office in Los Angeles,
California, serving the United States. It does not
appear from the facts of record that commencement of
mortgage banking activities by CCB through CCB
Legal Developments
Realty would result in any adverse competitive effects
in any market, while approval of the application would
provide an alternative source of real estate credit in
the United States. Accordingly, it is concluded that
CCB's proposal to engage de novo through its subsidiary CCB Realty in mortgage banking activities can
reasonably be expected to produce benefits to the
public that outweigh any adverse effects that may be
associated with the proposal. Furthermore, there is no
evidence in the record indicating that these activities
would result in any undue concentration of resources,
decreased or unfair competition, conflicts of interests,
unsound banking practices, or other adverse effects
upon the public interest.
Based upon the foregoing and other considerations
reflected in the record, it has been determined, in
accordance with the provisions of section 4(c)(8) of the
act, that the application to engage de novo in mortgage
banking activities throughout the United States can
reasonably be expected to produce favorable public
benefits and should be approved.
Accordingly, the applications are approved for the
reasons summarized above. The acquisition of shares
of Bank shall not be made before the thirtieth calendar
day following the effective date of this Order. The
acquisition of Bank and the commencement of mortgage banking activities shall be made not later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of San Francisco, pursuant to delegated authority. The approval of
CCB's mortgage banking activities is subject to the
conditions set forth in section 225.4(c) of Regulation
Y, and to the Board's authority to require reports by,
and make examinations of holding companies and their
subsidiaries, and to require such modification or termination of the activities of a bank holding company or
its subsidiaries as the Board finds necessary to assure
compliance with the provisions and purposes of the act
and the Board's regulations and orders issued thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
August 17, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Partee, Teeters, Rice, and Gramley.
(Signed) WILLIAM W. WILES,
[SEAL]
Secretary of the Board.
737
Credit and Commerce American Holdings,
N.V.,
Willemstad, Netherlands Antilles
Credit and Commerce American Investment,
B.V.,
Amsterdam, The Netherlands
FGB Holding Corporation,
Washington, D.C.
Order Approving Formation of Bank Holding
Companies
Credit and Commerce American Holdings, N.V.
("CCAH"), Willemstad, Netherlands Antilles; Credit
and Commerce
American
Investment,
B.V.
("CCAI"), Amsterdam, The Netherlands; and FGB
Holding Corporation ("FGB"), Washington, D.C.,
have applied for the Board's approval under section
3(a)(1) of the Bank Holding Company Act (12 U.S.C.
§ 1842(a)(1)) to become bank holding companies
through the acquisition of FGB of up to 100 percent of
the voting shares of Financial General Bankshares,
Inc. ("FG"), Washington, D.C. FG is a grandfathered
multi-state bank holding company with subsidiary
banks in Maryland, New York, Tennessee, Virginia,
and the District of Columbia.1
Applicants have also applied under section 4(c)(8) of
the Act (12 U.S.C. § 1843(c)(8)) and section
225.4(b)(2) of the Board's Regulation Y (12 C.F.R.
§ 225.4(b)(2)) for permission to indirectly acquire, as
an incident to their acquisition of FG, shares of
National Mortgage Corporation, and Money Exchange
Services, Inc., both of Washington, D.C. These companies are existing nonbanking subsidiaries of FG.
National Mortgage Corporation, is a small, presently
inactive, mortgage banking company, and Money Exchange Service Corporation provides electronic data
processing services for certain affiliated banks. Such
activities have been determined by the Board to be
closely related to banking (12 C.F.R. § 225.4(a)(1)
and (8)).
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
1. FG's subsidiary banks are First American Bank, N.A., District
of Columbia; Eastern Shore National Bank, Pocomoke City, Maryland; First American Bank of Maryland, Silver Spring, Maryland;
Community State Bank, Albany, New York; Bank of Commerce,
New York City, New York; Valley Fidelity Bank and Trust Company,
Knoxville, Tennessee; and the following Virginia banks: First American Bank of Virginia, McLean; The Valley National Bank, Harrisonburg; The Peoples National Bank of Leesburg, Leesburg; The First
National Bank of Lexington, Lexington; The Round Hill National Bank, Round Hill; and Shenandoah Valley National Bank,
Winchester.
738
Federal Reserve Bulletin • September 1981
been given in accordance with sections 3 and 4 of the
act (45 Federal Register 85,521 (1980)), and the time
for filing views and comments has expired. The Board
has considered the applications and all comments
received, including those of the Commissioner of
Financial Institutions for the State of Virginia and
several shareholders of FG, 2 in light of the factors set
forth in section 3(c) of the act (12 U.S.C. § 1842(c))
and the considerations set forth in section 4 of the
act.
CCAH and CCAI first applied to acquire FG in
November 1978. The applications grew out of Securities and Exchange Commission ("SEC") allegations
that certain individuals, some of whom are principals
of CCAH and CCAI, had violated section 13(d) of the
Securities and Exchange Act of 1934 by acquiring, as a
group, more than 5 percent of the equity securities of
FG without making appropriate filings with the SEC.
Without admitting or denying these allegations, the
defendants entered into a consent agreement with the
SEC; according to the terms of that agreement, certain
of the defendants represented that they intended to
make a tender offer for any and all shares of FG at the
previously highest offered price, subject to obtaining
appropriate regulatory approvals. CCAH and CCAI
were created as the vehicles for making the tender
offer.
When these applications were first filed in 1978, the
Commissioner of Financial Institutions of the State of
Virginia, the Commissioner of Banking of the State of
Tennessee, and the Bank Commissioner of the State of
Maryland, as well as the management of FG, objected
to the applications. In addition, the Attorney General
for the State of Maryland issued an opinion interpreting a section of Maryland state law to preclude unfriendly affiliations. Because the Maryland state bank
affiliate of FG was objecting to the proposal, the
Attorney General found that the proposed acquisition
of FG would violate Maryland law. The Board decided
to address this legal issue before acting on the merits
of the applications, and by Order dated February 15,
1979 (65 FEDERAL RESERVE BULLETIN 254 (1979)),
determined that it was precluded by law from approving the applications.3
In July 1980, CCAH and CCAI and their principals,
and FG entered into a definitive agreement for the sale
of FG's voting shares to CCAH and CCAI. This
agreement concluded the struggle over control of FG
between FG's management and CCAH and CCAI and
their principals, and led to the filing of the subject
applications.
2. The Board has determined that the shareholder protests do not
raise issues that would warrant denial of the applications.
3. In that Order the Board also determined that section 3(d) of the
act (12 U.S.C. § 1842(d)), which generally prohibits the Board from
Applicants are non-operating corporations organized for the purpose of becoming bank holding companies by acquiring FG. CCAH, a corporation organized under the laws of the Netherlands Antilles, owns
all of the outstanding shares of CCAI, which is organized under the laws of The Netherlands. CCAI, in
turn, owns all of the outstanding shares of FGB, a
corporation chartered under the laws of the state of
Virginia. Upon acquisition of FG (total deposits of
$2.1 billion), Applicants would control 10.2 percent of
total deposits in commercial banks in the District of
Columbia, 4.7 percent of such deposits in Virginia, 2.2
percent in Maryland, and negligible percentages of
such deposits in New York and Tennessee. 4 Inasmuch
as Applicants and their principals control no other
banks and engage in no nonbanking business in the
United States, consummation of the transaction would
have no adverse effects on either existing or potential
competition in any relevant market, and would not
increase the concentration of resources in any relevant
area. Therefore, competitive considerations are coi>
sistent with approval of the applications.
The financial and managerial resources of Applicants, FG, and its subsidiary banks are considered
generally satisfactory and the future prospects of each
appear favorable. The proposed transaction would
provide FG with $12 million in new capital. Moreover,
the Board expects Applicants to serve as a continuing
source of strength to FG and its subsidiary banks, and
Applicants recognize their responsibility to do so.
Although Applicants will incur $50 million in debt in
connection with this proposal, Applicants have made
certain commitments that ensure that they will be able
to service the debt without adversely affecting the
financial position of FG or its subsidiary banks. Also,
as part of the proposal, Applicants have stated they
will not be paying any dividends to their principals in
the near future. In the Board's judgment, banking
factors are consistent with approval.
Convenience and needs considerations relating to
this proposal are favorable. The additional capital to
be injected into FG's subsidiary banks is expected to
approving an application by a bank holding company to acquire voting
shares of banks in more than one state, was not applicable to the
proposed transaction. While the Board determined that section 3(d)
applies to the formation of a multi-state bank holding company as well
as the expansion of an existing multi-state bank holding company, the
Board held that the Congressional intent of prohibiting the formation
and limiting the expansion of such holding companies would be
preserved even if the Board approved those applications. The Board
reached this determination because the acquisition of FG by these two
shell corporations would increase neither the number of multi-state
bank holding companies nor the number of out-of-home state banks
owned or controlled by F G
255-56).
( 6 5 FEDERAL RESERVE BULLETIN
4. Banking data are as of March 31, 1980.
at
Legal Developments
strengthen the organization and allow it to provide
new services to the public. Applicants plan to increase
the competitive posture of FG by expanding the
branch networks of its subsidiary banks, by increasing
commercial lending and services, and by establishing
an international department at the New York City
subsidiary bank. The Board finds that considerations
relating to the convenience and needs of the communities to be served lend some weight toward approval of
these applications. The Board's judgment is that, with
respect to the applications filed under section 3 of the
act, consummation of the proposal would be in the
public interest and these applications should be
approved.
In reaching these conclusions, the Board considered
the public comments received on these applications,
and has given particular attention to the submissions
made by the Commissioner of Financial Institutions
for the State of Virginia (the "Commissioner"). The
Commissioner made a timely recommendation of denial of these applications, which would ordinarily require the Board, in accordance with section 3(b) of the
act (12 U.S.C. § 1842(b)), to order a formal hearing on
the applications. However, the Commissioner subsequently concurred in a decision by the Virginia State
Corporation Commission to withdraw the request for a
formal hearing.
The Board determined it would be useful for Board
and Reserve Bank staff to conduct an informal meeting, on the record, to be attended by representatives of
CCAH and CCAI. The bank supervisors for the states
of Maryland, New York, Tennessee and Virginia, and
the Comptroller of the Currency were invited to participate. Only the Commissioner decided to participate in
this proceeding held at the Board on April 23, 1981,
while all the other invited parties, except for the
Banking Department of the State of Tennessee, sent
representatives as observers.
The Commissioner was given an opportunity to
submit written questions to the Applicants, to make an
oral presentation at the meeting, and to submit a
closing statement in response to issues and questions
raised by representatives of CCAH and CCAI at the
meeting. The Board has examined carefully all of these
comments, and Applicants' responses thereto, and
determined that while the Commissioner has raised
issues regarding foreign acquisitions of U.S. banks,
and supervisory and regulatory issues related to such
acquisitions, these matters were addressed responsively by Applicants, and, in certain instances, have
previously been addressed by the Board itself.5 Ac5. In its February 23, 1979 "Statement of Policy on Supervision and
Regulation of Foreign Bank Holding Companies," the Board endorsed the principle of national treatment, or nondiscrimination, as a
basis for the rules governing the entry and subsequent operations of
739
cordingly, the Board finds that the objections of the
Commissioner do not warrant denial of these applications.
With respect to the applications to acquire FG's
nonbank subsidiaries, the Board has determined that
the balance of public interest factors prescribed by
section 4(c)(8) of the act favor approval of FG's
retention of National Mortgage Corporation (65 FEDERAL RESERVE BULLETIN 72 ( 1 9 7 9 ) ) . N o t h i n g in t h e
record suggests that Applicants' acquisition of FG
would alter that balance. Money Exchange Services,
Inc., provides data processing services to FG's subsidiary banks. It does not appear that the acquisition of
this company would have any adverse effect on competition in any relevant area. There is no evidence in
the record that consummation of the proposal would,
with respect to these applications, result in undue
concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices or other adverse effects on the public interest.
Accordingly, the Board has determined that the balance of public interest factors it must consider under
section 4(c)(8) of the act favors approval of the applications filed under that section, and that these applications should be approved.
On the basis of the record, the applications are
approved for the reasons summarized above. The
acquisition of FG shall not be made 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
Richmond, pursuant to delegated authority. The determination as to Applicant's acquisition of FG's nonbank subsidiaries under section 4(c)(8) of the act is
subject to the conditions set forth in section 225.4(c) of
Regulation Y, and to the Board's authority to require
such modification or termination of the activities of a
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with the
provisions and purposes of the act and the Board's
regulations and orders issued thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
August 25, 1981.
Voting for these actions: Chairman Volcker and Governors
Schultz, Wallich, Partee, and Gramley. Absent and not
voting: Governors Teeters and Rice.
( S i g n e d ) WILLIAM W . WILES,
[SEAL]
Secretary of the Board.
foreign banks in this country. The Board noted that the International
Banking Act of 1978 generally incorporates that principle in its
provisions.
740
Federal Reserve Bulletin • September 1981
Orders Issued Under Section 4 of Bank Holding
Company Act
Citicorp,
New York, New York
Order Approving Retail Check Authorization and
Check Guarantee Activities
Citicorp, New York, New York, a bank holding company within the meaning of the Bank Holding Company Act, has applied for the Board's approval, under
section 4(c)(8) of the Board's Regulation Y (12 C.F.R.
§ 225.4(b)(2)), to engage de novo, through an existing
nonbank subsidiary, Citicorp Financial, Inc. ("CFI"),
Towson, Maryland, in the activity of retail check
authorization. Under the proposal, CFI, for a fee,
would authorize merchants by telephone or on-line
computer terminal, to accept checks written by Choice
cardholders. 1 In addition, CFI would guarantee payment of all accepted checks by purchasing from merchants all dishonored checks that it had validly authorized. CFI would charge the cardholder's account for
the amount of any dishonored checks.
The activity of engaging in retail check authorization
and check guarantee as proposed by Applicant has not
been added to the Board's list of permissible activities
for bank holding companies found in Regulation Y.
(12 C.F.R. § 255.4(a)). However, in connection with
an earlier application, the Board determined by order
that the activity of retail check authorization and
check guarantee is closely related to banking. (Barnett
Banks of Florida,
Inc., 65 FEDERAL RESERVE BULLE-
TIN 263 (1979)). As noted in this earlier decision, banks
have in fact engaged in the proposed activity. Furthermore, various aspects of the proposed activity are
operationally similar to normal bank functions and
services, such as check processing, credit data file
maintenance, data processing, and overdraft protection, that are currently engaged in or provided by
banks. Accordingly, the Board has determined that
retail check authorization and check guarantee activities as Applicant proposes are closely related to banking.2
Notice of the application, affording interested persons an opportunity to submit comments and views on
public interest factors, has been duly published (46
Federal Register 28745 (1981)). The time for filing
comments and views has expired, and the Board has
considered the application and all comments received
in light of the public interest factors set forth in section
4(c)(8) of the act.
1. The Choice Card is CFI's proprietary credit card.
2. See National Courier Association v. Board of Governors of the
Federal Reserve System, 516 F.2d 1229 (D.C. Cir. 1975).
Applicant is a bank holding company by virtue of its
control of Citibank, N.A., New York, New York (total
deposits of $72.5 billion), and Citibank (New York
state), N.A., Buffalo, New York (total deposits of $2.1
billion), and together they constitute the largest banking organization in New York state. 3 Applicant's subsidiary banks in the aggregate control 13 percent of the
total deposits of commercial banks in the state. Applicant also engages in various other permissible nonbanking activities.
In order to approve this application, the Board is
required to determine that the performance of the
proposed activities by CFI, "can reasonably be expected to produce benefits to the public, such as
greater convenience, increased competition, or gains
in efficiency that outweigh possible adverse effects,
such as undue concentration of resources, decreased
or unfair competition, conflicts of interest, or unsound
banking practices." (12 U.S.C. § 1843(c)(8)).
Applicant's proposed retail check authorization and
check guarantee service would benefit merchants by
providing a convenient means for decreasing badcheck losses. The convenience of individual consumers would be enhanced by the proposed activity since
their personal checks would be more readily accepted
for the purchase of goods and services from merchants. The de novo entry of Applicant into the check
authorization business would increase the level of
competition among check authorization systems already in operation. Accordingly, the Board has concluded that the performance of the proposed activities
by Applicant is likely to produce significant benefits to
the public.
With respect to possible adverse effects, nothing in
the record indicates that Applicant's proposal would
result in any undue concentration of resources. The
Board recognizes the potential in the proposal for
unfair competition or conflicts of interest with respect
to the authorization of checks not drawn on subsidiary
banks of Applicant. However, the Board relies on
Applicant's commitment that CFI in performing these
activities will not discriminate against checks drawn
on banks that are not subsidiaries of Applicant. In
addition, neither of Applicant's two principal banking
subsidiaries operate banking offices in the area in
which CFI's check guarantee program would operate.
Also, the risk to Applicant associated with this proposal appears to be no more than the usual banking risk
because CFI will maintain a credit relationship with
the consumers whose checks are guaranteed. Further,
Applicant is fully aware of section 106 of the 1970
Amendments to the Act and section 225.4(c) of the
3. All banking data are as of December 31, 1980.
Legal Developments
741
Board's Regulation Y, which prohibit a bank holding
company and its subsidiaries from engaging in impermissible tie-in arrangements in connection with extensions of credit, sales of property, or the furnishing of
services.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the balance of the public interest factors, which the
Board is required to consider under section 4(c)(8) of
the act, is favorable. Accordingly, the application is
hereby approved. This determination is subject to the
conditions set forth in section 225.4(c) of Regulation Y
and the Board's authority to require such modification
or termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the act and the Board's regulations and orders issues
thereunder, or to prevent evasion thereof.
The transaction shall not be made later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of New York.
By order of the Board of Governors, effective
August 3, 1981.
Bank determined that the public interest factors required to be considered under section 4(c)(8) of the act
outweighed possible adverse effects and, accordingly,
the Reserve Bank approved the subject proposal pursuant to delegated authority.
On May 4, 1981, the Independent Insurance Agents
of Kentucky, Inc. ("IIAK"), which had objected to
the proposal during its pendency at the Reserve Bank,
filed a timely petition for review of the Reserve Bank's
approval of that proposal. 1 The petition questioned the
legality of certain of Applicant's proposed insurance
activities under state law, and in addition it questioned
the correctness of the opinion of the Commissioner of
the Kentucky Department of Banking and Securities
("State Commissioner") that the proposed activities
were permissible under state law.
The legality of the proposed activities under state
law was questioned by IIAK in connection with Applicant's original notification of its proposed insurance
activities. IIAK contended that Agency would be
prohibited under section 287.030(3) of Kentucky Revised Statutes from engaging in certain of the proposed
insurance activities. The pertinent portions of that
section provided as follows:
Voting for this action: Chairman Volcker and Governors
Schultz, Wallich, Teeters, Rice, and Gramley. Absent and
not voting: Governor Partee.
"no person who hereafter owns or acquires more than onehalf (V2) of the capital stock of one (1) bank or combined bank
and trust company shall: (a) own or acquire directly or
indirectly any capital stock in any other bank or combined
bank and trust company domiciled in Kentucky, or (b) act as
insurance agent or broker with respect to any insurance
except credit life insurance, credit health insurance, insurance of the interest of a real property mortgagee in mortgaged
property, other than title insurance . . . "
( S i g n e d ) WILLIAM W . WILES,
[SEAL]
Secretary of the Board.
Western Kentucky Bancshares, Inc.,
Livermore, Kentucky
Order Vacating in Part and Affirming in Part
Reserve Bank Order Approving de novo Insurance
Activities
Western Kentucky Bancshares, Inc. ("Applicant"),
Livermore, Kentucky, notified the Federal Reserve
Bank of St. Louis ("Reserve Bank") of its proposal,
under section 4(c)(8) of the Bank Holding Company
Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b) (1) of
the Board's Regulation Y, to engage de novo, through
its subsidiary, Big Rivers Insurance Agency, Inc.
("Agency"), Livermore, Kentucky, in certain insurance agency activities. These activities include acting
as insurance agent or broker with respect to the sale of
accident and health, and property and casualty insurance, which is directly related to extensions of credit
by Applicant's subsidiary bank, Farmers & Merchants
Bank, Livermore, Kentucky. On April 20, 1981, based
upon all the facts of record as of that date, the Reserve
The State Commissioner was consulted regarding
his interpretation of the above-quoted language and
the effect of that provision upon the subject proposal.
In his response of March 26, 1981, the State Commissioner concluded that the above statutory language
does not prohibit the acquisition of an independent
insurance agency by a bank holding company, notwithstanding the fact that such agency is engaged in
insurance activities that the bank holding company
itself would be prohibited from engaging indirectly
under KRS § 287.030(3), provided that the subsidiary
operates as an independent entity. The State Commissioner observed that the phrase "directly or indirectly" appears in part (a) of the statute, but not in part
1. Under § 265.3 of the Board's Rules Regarding Delegation of
Authority, IIAK's deadline for requesting such review would have
expired on April 27, 1981. However, by letter dated April 24, 1981,
IIAK requested that the time during which it could seek review of the
Reserve Bank's approval of the subject application be extended from
April 27 until May 4, 1981. The Secretary of the Board granted this
request.
742
Federal Reserve Bulletin • September 1981
(b), and relying on the literal words of the statute, he
concluded that the prohibition contained in part (b),
regarding insurance activities, did not apply to indirect
activities. The State Commissioner concluded, therefore, that KRS § 287.030(3) would not prohibit Applicant from engaging indirectly, through Agency, in the
proposed insurance activities including acting as agent
or broker with respect to the sale of property and
casualty insurance, an activity that Applicant would
be prohibited from engaging in. Although the Reserve
Bank might not have interpreted the above provision
in the same manner as the State Commissioner, and so
informed the protestants to the subject application, the
State Commissioner's interpretation was found to be
reasonable. Therefore, in accordance with the State
Commissioner's interpretation, the Reserve Bank concluded that KRS § 287.030(3) does not prohibit Applicant's proposed insurance activities through agency.
Following the Reserve Bank's approval of the subject proposal, IIAK requested that the Kentucky Attorney General issue an interpretation of the relevant
provision of KRS § 287.030(3). On May 8, 1981, the
Attorney General issued his opinion that a Kentucky
bank holding company would be prohibited under the
above-cited section of law from acquiring a company
that would perform insurance activities that the bank
holding company itself would be prohibited from engaging in under state law. The Attorney General
opined that it was the clear intent of the state legislature to limit the involvement of Kentucky bank holding companies in insurance activities and any construction authorizing such a holding company to
engage in more extensive insurance activities indirectly through a subsidiary would render the limitation a
nullity. Thus, because Applicant would be prohibited,
under state law, from engaging in the proposed property and casualty insurance activities, Applicant could
not, in the Attorney General's view, engage in such
activities indirectly through Agency.
Under Kentucky law, the Attorney General is the
chief law officer of the state and all its departments and
commissions, and is authorized to furnish written
opinions touching the official duties of any state or
local officials. Although opinions of the Attorney
General are advisory in nature and not legally binding
on officials or other parties, there is a tendency for
state officials to follow such opinions. Accordingly,
the State Commissioner does not appear to be legally
bound to follow the Attorney General's opinion, and
has indicated that he will not follow the Attorney
General's opinion in this case.
Under section 4(c)(8) of the act, the Board is preliminarily required, in accordance with Supreme Court
decisions, to make determinations or assumptions
with respect to the legality of an Applicant's proposal,
and to determine whether an Applicant's proposed
activities would produce public benefits that outweigh
possible adverse effects. 2 In this connection, the Supreme Court has indicated that the Board may not
approve an application by a bank holding company if
consummation of the proposal contemplated by such
application would be prohibited by a valid state law.3
In view of the ambiguity of the relevant provision of
Kentucky law, as well as the conflicting opinions of
the State Commissioner and the Attorney General
regarding the interpretation thereof, the Board has
decided to follow the more limited interpretation of
that provision of state law which would prohibit a
Kentucky bank holding company from directly or
indirectly engaging in any insurance activities except
those specified in KRS § 287.030(3). Under this interpretation, Applicant would be prohibited by state law
from engaging in certain of its proposed activities,
specifically, acting as agent or broker with respect to
the sale of property and casualty insurance. Accordingly, the Board hereby vacates that portion of the
Reserve Bank's Order of April 20, 1981, approving
Applicant's proposal to engage, through Agency, in
the activity of acting as insurance agent or broker with
respect to the sale of property and casualty insurance
which is directly related to extensions of credit, and, in
addition, it denies Applicant's proposal to engage in
such property and casualty insurance activities. The
Board, however, affirms in all other respects the
Reserve Bank's Order.
By order of the Board of Governors, effective
August 6, 1981.
Voting for this action: Chairman Volcker and Governors
Schultz, Teeters, Rice, and Gramley. Abstaining from this
action Governor Wallich. Absent and not voting: Governor
Partee.
( S i g n e d ) WILLIAM W . WILES,
[SEAL]
Secretary of the Board.
2. Florida Association of Insurance Agents, Inc., v. Board of
Governors, 591 F.2d 334 (1979); Alabama Association of Insurance
Agents v. Board of Governors, 533 F.2d 224 (5th Cir. 1976), afTd on
rehearing 558 F.2d 729 (1977) (en banc) cert, den., 435 U.S. 904 (1978);
See, Whitney National Bank in Jefferson Parish v. Bank of New
Orleans and Trust Company, 379 U.S. 411 (1965).
3. Whitney National Bank in Jefferson Parish v. Bank of New
Orleans and Trust Company, 379 U.S. 411, 419 (1965).
Legal Developments
ORDERS APPROVING
AND BANK MERGER
APPLICATIONS
ACT
UNDER
THE BANK
HOLDING
COMPANY
743
ACT
By the Board of Governors
During August 1981, the Board of Governors approved the applications listed below. Copies are available upon
request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551.
Section 3
Applicant
Agri Bancorporation,
Holyoke, Colorado
The Chugwater Corporation,
Chugwater, Wyoming
FirstBank Holding Company of Colorado,
Lakewood, Colorado
FirstBank Holding Company,
Lakewood, Colorado
First International Bancshares, Inc.,
Dallas, Texas
First International Bancshares, Inc.,
Dallas, Texas
Independent Bank Holding Company,
Englewood, Colorado
The Moorcroft Corporation,
Moorcroft, Wyoming
The Newcastle Corporation,
Newcastle, Wyoming
Southwest Bancshares, Inc.,
Houston, Texas
Southwest Bancshares, Inc.,
Houston, Texas
Texas American Bancshares Inc.,
Fort Worth, Texas
Thomas County Bankshares
of Colby, Kansas, Inc.,
Colby, Kansas
Bank(s)
Sedgwick County Bank,
Julesburg, Colorado
First National Bank of Chugwater,
Chugwater, Wyoming
FirstBank of Avon,
Avon, Colorado
Board action
(effective
date)
August 24, 1981
August 7, 1981
August 11, 1981
The First National Bank in Mount
Pleasant,
Mount Pleasant, Texas
Paris Bank of Texas,
Paris, Texas
Western National Bank of Denver,
Denver, Colorado
Moorcroft State Bank, Moorcroft,
Moorcroft, Wyoming
National Bank of Newcastle,
Newcastle, Wyoming
August 25, 1981
Fort Worth Bancshares Inc.,
A u g u s t 10, 1981
Fort Worth, Texas
Fort Worth Bank and Trust,
Fort Worth, Texas
Mansfield State Bank,
Mansfield, Texas
Fondren Southwest Bank,
Houston, Texas
Thomas County Bankshares, Inc.,
Colby, Kansas
August 28, 1981
August 31, 1981
August 10, 1981
August 10, 1981
August 14, 1981
August 20, 1981
August 4, 1981
744
Federal Reserve Bulletin • September 1981
Sections 3 and 4
Applicant
Greene Investment
Co.,
Coon Rapids, Iowa
Nonbanking
company
(or activity)
Bank(s)
Home State Bank,
Jefferson, Iowa
Greene County Agricultural Credit Corporation,
Jefferson, Iowa
Reserve
Bank
Effective
date
Chicago
August 10, 1981
to engage in the sale of
credit life and disability insurance
Section 4
Nonbanking
company
I \
t(or activity)
,• t
A
Applicant
Provident National Corporation,
Philadelphia, Pennsylvania
By Federal Reserve
_„
Effective
date
L. S. Consulting Corp.,
Philadelphia, Pennsylvania
August 27, 1981
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders
are available upon request to the Reserve Banks.
Section 3
Applicant
Belle Plaine Service Corp.,
Des Moines, Iowa
The Bradley Corporation,
Bradley, Arkansas
Brenton Banks, Inc.,
Des Moines, Iowa
Burchard Bankshares, Inc.,
Tecumseh, Nebraska
CTS Bancorporation,
Eldridge, Iowa
Cambridge Capital Co.,
Cambridge, Minnesota
Citizens Financial Services, Inc.
Aurora, Colorado
City Bancshares, Inc.,
Mineral Wells, Texas
Bank(s)
Citizens State Bank,
Belle Plaine, Iowa
The Bank of Bradley,
Bradley, Arkansas
Community Holding Company,
Knoxville, Iowa
The Community National Bank &
Trust Company of Knoxville,
Knoxville, Iowa
State Bank of Burchard,
Burchard, Nebraska
Central Trust and Savings Bank,
Eldridge, Iowa
Peoples State Bank of Cambridge,
Cambridge, Minnesota
Citizens Bank of Aurora,
Aurora, Colorado
The City National Bank of Mineral
Wells,
Mineral Wells, Texas
Reserve
Bank
Effective
date
Chicago
August 10, 1981
St. Louis
August 28, 1981
Chicago
August 12, 1981
Kansas City
July 31, 1981
Chicago
August 18, 1981
Minneapolis
August 6, 1981
Kansas City
August 6, 1981
Dallas
July 31, 1981
Legal Developments
745
Section 3—Continued
Applicant
Commerical Bancshares, Inc.,
Tulsa, Oklahoma
Dakota Bank Holding Co.,
Aberdeen, South Dakota
Dakota Bankshares, Inc.,
Fargo, North Dakota
Bank(s)
Commercial Bank,
Tulsa, Oklahoma
Bank of Cresbard,
Cresbard, South Dakota
Liberty National Bank and Trust
Company,
Dickinson, North Dakota
Emerson First National Company,
The First National Bank,
Schuyler, Nebraska
Emerson, Nebraska
First National Bank,
First Fairfield Bankshares, Inc.,
Fairfield, Texas
Fairfield, Texas
First Healdton Bancorporation, Inc., Bank of Healdton,
Healdton, Oklahoma
Healdton, Oklahoma
First Jefferson Corporation,
The Jefferson Bank,
Biloxi, Mississippi
Biloxi, Mississippi
Fort Gibson Bancshares, Inc.,
Fort Gibson State Bank,
Fort Gibson, Oklahoma
Fort Gibson, Oklahoma
Franklin Bancorp, Inc.,
Bank of College Grove,
College Grove, Tennessee
College Grove, Tennessee
The Grundy National Bank of
GNB Bancorporation,
Grundy Center,
Grundy Center, Iowa
Grundy Center, Iowa
Gulfstream Banks, Inc.,
Summit Banking Corporation,
Boca Raton, Florida
Tamarac, Florida
Summit Bank,
Tamarac, Florida
First State Bank of Buckner,
Jeffries Insurance Agency, Inc.,
Buckner, Missouri
Buckner, Missouri
Kavanaugh Bancshares, Inc.,
The Farmers Bank of Walker
Walker, Missouri
Walker, Missouri
Liberty Bancshares, Inc.,
Liberty Bank,
Brentwood, Tennessee
Brentwood, Tennessee
Lytton Bancorporation,
Lytton Savings Bank,
Lytton, Iowa
Lytton, Iowa
Mercer Bancorp, Inc.,
The Peoples Bank of Mercer,
Mercer, Missouri
Mercer, Missouri
Michigan National Corporation,
Peoples State Bank of East Tawas,
Bloomfield Hills, Michigan
East Tawas, Michigan
The Midwest Bank,
Michigan National Corporation,
Jackson, Michigan
Bloomfield Hills, Michigan
Mountain Valley Bankshares, Inc.,
Mountain Valley Bank,
Conifer, Colorado
Conifer, Colorado
Mustang Community Ban Corp.,
Mustang Community Bank,
Mustang, Oklahoma
Mustang, Oklahoma
National City Bank of Ridgedale,
National City Bancorporation,
Minneapolis, Minnesota
Minnetonka, Minnesota
The North Fork Bank and Trust
North Fork Bancorporation, Inc.,
Mattituck, New York
Company,
Mattituck, New York
Reserve
Bank
Effective
date
Kansas City
July 17, 1981
Minneapolis
August 7, 1981
Minneapolis
August 24, 1981
Kansas City
August 14, 1981
Dallas
August 6, 1981
Kansas City
August 11, 1981
Atlanta
August 13, 1981
Kansas City
July 30, 1981
Altanta
August 6, 1981
Chicago
August 10, 1981
Atlanta
August 14, 1981
Kansas City
August 14, 1981
Kansas City
July 24, 1981
Atlanta
August 14, 1981
Chicago
August 20, 1981
Kansas City
August 14, 1981
Chicago
August 11, 1981
Chicago
August 18, 1981
Kansas City
August 3, 1981
Kansas City
August 3, 1981
Minneapolis
August 19, 1981
New York
August 21, 1981
746
Federal Reserve Bulletin • September 1981
Section 3—Continued
Applicant
Bank(s)
Palos Bank and Trust Company,
Palos Heights, Illinois
Parkersburg State Bank,
Parkersburg, Iowa
Perry State Bank,
Perry, Missouri
The Platteville State Bank,
Platteville, Colorado
The First National Bank of Port
Neches,
Port Neches, Texas
Puget Sound National Bank,
Puget Sound Bancorp,
Tacoma, Washington
Tacoma, Washington
The First National Bank of Akron,
Security National Corporation,
Akron, Iowa
Sioux City, Iowa
The Shattuck National Bank,
Shattuck Bancshares, Inc.,
Shattuck, Oklahoma
Shattuck, Oklahoma
First Melville Bancorp, Inc.,
Shawmut Corporation,
New Bedford, Massachusetts
Boston, Massachusetts
First National Bank in ShawneeShawneetown Bancorp, Inc.,
town,
Shawneetown, Illinois
Shawneetown, Illinois
Sheridan State Bank,
Sheridan Bancorp, Inc.,
Sheridan, Illinois
Sheridan, Illinois
Farmers State Bank of Sherburn,
Sherburn Bancshares, Inc.,
Sherburn, Minnesota
Sherburn, Minnesota
Lancaster National Bank,
Society Corporation,
Lancaster, Ohio
Cleveland, Ohio
First American State Bank of
Southwest Bancorporation, Inc.,
Brownsdale,
Minneapolis, Minnesota
Brownsdale, Minnesota
Peoples Bank of Hillsborough
Southwest Florida Banks, Inc.,
County,
Fort Myers, Florida
Tampa, Florida
Texas Commerce Bancshares, Inc., First National Bank of Stafford,
Houston, Texas
Houston, Texas
Bank of Troy,
Troy Bancorp, Inc.,
Troy, Tennessee
Troy, Tennessee
Twin Cities Financial Services, Inc., Citizens Bank of Blount County,
Mary ville, Tennessee
Mary ville, Tennessee
Union Planters Bank of Nashville,
Union Planters Corporation,
Nashville, Tennessee
Memphis, Tennessee
The First State Bank,
Westex Bancorp, Inc.,
Brackettville, Texas
Del Rio, Texas
First Wyoming Bank, N.A.Wyoming Bancorporation
Torrington,
Cheyenne, Wyoming
Torrington, Wyoming
Palos Bancshares, Inc.,
Palos Heights, Illinois
Peoples Bankshares, Ltd.,
Waterloo, Iowa
Perry Bancshares, Inc.,
Perry, Missouri
Platteville Capital Corporation,
Platteville, Colorado
Port Neches Bancshares, Inc.,
Port Neches, Texas
Reserve
Bank
Effective
date
Chicago
August 7, 1981
Chicago
August 24, 1981
St. Louis
August 14, 1981
Kansas City
July 24, 1981
Dallas
August 7, 1981
San Francisco
August 21, 1981
Chicago
August 18, 1981
Kansas City
August 14, 1981
Boston
August 12, 1981
St. Louis
August 7, 1981
Chicago
August 25, 1981
Minneapolis
August 28, 1981
Cleveland
August 6, 1981
Minneapolis
July 30, 1981
Atlanta
August 7, 1981
Dallas
August 13, 1981
St. Louis
August 14, 1981
Atlanta
August 20, 1981
St. Louis
August 21, 1981
Dallas
July 27, 1981
Kansas City
July 31, 1981
Legal Developments
103
Sections 3 and 4
V & V Holding Company
Lander, Wyoming
PENDING
Nonbanking
company
(or activity)
Bank(s)
Applicant
Central Trust Company
Lander, Wyoming
Central Bank and Trust
Lander, Wyoming
CASES INVOLVING
THE BOARD OF
trust company
activities
Kansas City
Effective
date
August 7, 1981
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.
Bank Stationers Association, Inc., et al v. Board of
Governors, filed July 1981, U.S.D.C. for the Northern District of Georgia.
Public Interest Bounty Hunters v. Board of Governors, et al., filed June 1981. U.S.D.C. for the
Northern District of Georgia.
Edwin F. Gordon v. John Heimann, et al., filed May
1981, U.S.C.A. for the Fifth Circuit.
Louis J. Roussell v. Board of Governors, filed May
1981, U.S.C.A. for the District of Columbia.
Wilshire Oil Company of Texas v. Board of Governors, et al., filed April 1981, U.S.C.A. for the Third
Circuit.
People of the State of Arkansas v. Board of Governors, et al., filed March 1981, U.S.C.A. for the
Western District of Arkansas.
First Bank & Trust Company v. Board of Governors,
filed February 1981, U.S.D.C. for the Eastern District of Kentucky.
Ellis E. St. Rose & James H. Sibbet v. Board of
Governors, filed February 1981, U.S.D.C. for the
District of Columbia.
Option Advisory Service, Inc. v. Board of Governors,
et al., filed February 1981, U.S.C.A. for the Second
Circuit.
9 to 5 Organization for Women Office Workers v.
Board of Governors, filed December 1980,
U.S.D.C. for the District of Massachusetts.
Securities Industry Association v. Board of Governors, et al., filed October 1980, U.S.D.C for the
District of Columbia.
Securities Industry Association v. Board of Governors, et al., filed October 1980, U.S.C.A. for the
District of Columbia.
A. G. Becker, Inc., v. Board of Governors, et al., filed
October 1980, U.S.D.C. for the District of Columbia.
Reserve
Bank
A. G. Becker, Inc., v. Board of Governors, et al., filed
October 1980, U.S.C.A. for the District of Columbia.
Independent Insurance Agents of America and Independent Insurance Agents of Missouri v. Board of
Governors, filed September 1980, U.S.C.A. for the
Eighth Circuit.
Nebraska Bankers Association, et al. v. Board of
Governors, et al., filed September 1980, U.S.D.C.
for the District of Nebraska.
Republic of Texas Corporation v. Board of Governors,
filed September 1980, U.S.C.A. for the Fifth Circuit.
A. G. Becker, Inc. v. Board of Governors, et al., filed
August 1980, U.S.D.C. for the District of Columbia.
Otero Savings and Loan Association v. Board of
Governors, filed August 1980, U.S.D.C. for the
District of Colorado.
Edwin F. Gordon v. Board of Governors, et al., filed
August 1980, U.S.C.A. for the Fifth Circuit.
U.S. League of Savings Associations v. Depository
Institutions Deregulation Committee, et al., filed
June 1980, U.S.D.C. for the District of Columbia.
Berkovitz, et al. v. Government of Iran, et al., filed
June 1980, U.S.D.C. for the Northern District of
California.
Mercantile Texas Corporation v. Board of Governors,
filed May 1980, U.S.C.A. for the Fifth Circuit.
Corbin, Trustee v. United States, filed May 1980,
United States Court of Claims.
Louis J. Roussel v. Comptroller of the Currency and
Federal Reserve Board, filed April 1980, U.S.D.C.
for the District of Columbia.
County National Bancorporation and TGB Co. v.
Board of Governors, filed September 1979,
U.S.C.A. for the Eighth Circuit.
Donald W. Riegle, Jr. v. Federal Open Market Committee, filed July 1979, U.S.D.C. for the District of
Columbia.
Security Bancorp and Security National Bank v.
Board of Governors, filed March 1978, U.S.C.A. for
the Ninth Circuit.
748
Federal Reserve Bulletin • September 1981
Roberts Farms, Inc. v. Comptroller of the Currency,
et al., filed November 1975, U.S.D.C. for the Southern District of California.
Darnell Hilliard v. G. William Miller, et al., filed
September 1976, U.S.C.A. for the District of Columbia.
David Merrill, et al. v. Federal Open Market Committee, filed May 1975, U.S.D.C. for the District of
Columbia.
Al
Financial and Business Statistics
CONTENTS
Domestic
Financial
Statistics
A3 Monetary aggregates and interest rates
A4 Reserves of depository institutions, reserve,
bank credit
A5 Reserves and borrowings of depository
institutions
A6 Federal funds and repurchase agreements of
large member banks
POLICY
WEEKLY REPORTING
COMMERCIAL
BANKS
Assets and liabilities
A18 All reporting banks
A19 Banks with assets of $1 billion or more
A20 Banks in New York City
A21 Balance sheet memoranda
A22
Branches and agencies of foreign banks
A23 Commercial and industrial loans
A24 Gross demand deposits of individuals,
partnerships, and corporations
INSTRUMENTS
A7 Federal Reserve Bank interest rates
A8 Depository institutions reserve requirements
A9 Maximum interest rates payable on time and
savings deposits at federally insured institutions
A10 Federal Reserve open market transactions
FEDERAL RESERVE
BANKS
A l l Condition and Federal Reserve note statements
A12 Maturity distribution of loan and security
holdings
FINANCIAL
MARKETS
A25 Commercial paper and bankers dollar
acceptances outstanding
A26 Prime rate charged by banks on short-term
business loans
A26 Terms of lending at commercial banks
A27 Interest rates in money and capital markets
A28 Stock market—Selected statistics
A29 Savings institutions—Selected assets and
liabilities
FEDERAL
FINANCE
MONETAR Y AND CREDIT A GGREGA TES
A12 Bank debits and deposit turnover
A13 Money stock measures and components
A14 Aggregate reserves of depository institutions
and member bank deposits
A15 Loans and securities of all commercial banks
COMMERCIAL
BANKS
A16 Major nondeposit funds
A17 Assets and liabilities, last Wednesday-of-month
series
A30
A31
A32
A32
Federal fiscal and financing operations
U.S. budget receipts and outlay
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A33 U.S. government marketable securities—
Ownership, by maturity
A34 U.S. government securities dealers—
Transactions, positions, and financing
A35 Federal and federally sponsored credit
agencies—Debt outstanding
106
Federal Reserve Bulletin • September 1981
International
SECURITIES MARKETS AND
CORPORATE
FINANCE
A36 New security issues—State and local
governments and corporations
A37 Open-end investment companies—Net sales and
asset position
A37 Corporate profits and their distribution
A38 Nonfinancial corporations—Assets and
liabilities
A38 Total nonfarm business expenditures on new
plant and equipment
A39 Domestic finance companies—Assets and
liabilities; business credit
REAL
ESTATE
A40 Mortgage markets
A41 Mortgage debt oustanding
CONSUMER
INSTALLMENT
Statistics
A54
A55
A55
A56
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign branches of U.S. banks—Balance sheet
data
A58 Selected U.S. liabilities to foreign official
institutions
REPORTED BY BANKS
A58
A59
A61
A62
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A62 Banks' own claims on unaffiliated foreigners
A63 Claims on foreign countries—Combined
domestic offices and foreign branches
SECURITIES HOLDINGS
FLOW OF FUNDS
A44 Funds raised in U.S. credit markets
A45 Direct and indirect sources of funds to credit
markets
Nonfinancial
Statistics
A46 Nonfinancial business activity—Selected
measures
A46 Output, capacity, and capacity utilization
A47 Labor force, employment, and unemployment
A48 Industrial production—Indexes and gross value
A50 Housing and construction
A51 Consumer and producer prices
A52 Gross national product and income
A53 Personal income and saving
STATES
CREDIT
A42 Total outstanding and net change
A43 Extension and liquidations
Domestic
IN THE UNITED
AND
TRANSACTIONS
A64 Marketable U.S. Treasury bonds and notes—
Foreign holdings and transactions
A64 Foreign official assets held at Federal Reserve
Banks
A65 Foreign transactions in securities
REPORTED BY NONBANKING
ENTERPRISES IN THE UNITED
BUSINESS
STATES
A66 Liabilities to unaffiliated foreigners
A67 Claims on unaffiliated foreigners
INTEREST AND EXCHANGE
RATES
A68 Discount rates of foreign central banks
A68 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular
Presentation,
Statistical Releases, and Special
Tables
Domestic Financial Statistics
1.10
A3
MONETARY A G G R E G A T E S A N D INTEREST RATES
1980
1981
1981
Item
Q4
Q3
Q2
Ql
Mar.
Apr.
May
June
July
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent) 1
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 2
institutions
5
6
7
8
9
Concepts of money and liquid assets3
Ml-A
Ml-B
M2
M3
L
Time and savings deposits
Commercial banks
10
Total
11
Savings 4
12
Small-denomination time 5
13
Large-denomination time 6
14 Thrift institutions 7
15 Total loans and securities at commercial banks 8
7.0'
6.1 r
12.9'
9.5
16.7'
15.6'
7.2
10.6
2.8'
4.1 r
7.8'
5.1'
3.3'
4.3'
-3.3'
5.3'
3.7'
4.6'
13.6'
3.7'
6.0'
9.8'
-4.5'
6.9'
8.5'
7.1'
-19.4'
8.5'
-5.8'
-8.1'
0.1'
0.2'
7.9
7.9
19.9
8.9
11.3
13.9
15.4
13.1
10.0'
8.2
10.8
8.1
11.3
11.4'
-20.8
4.9
8.3'
12.4
12.9'
-5.3
8.7
10.6
10.6'
8.5
-4.6
13.1
16.2
10.8'
5.8'
2.6
22.3
13.6
11.1'
6.1'
-5.6
-6.1
3.7
8.7'
10.9'
-9.9
-7.5
4.1
10.6'
11.7
-2.0
3.6
7.5
8.7
n.a.
15.4
1.5
16.2
25.4
9.7
17.0
-30.5
30.2
37.5
5.3
10.0
-11.9
13.4
20.0
0.4
11.8
5.5
6.1
22.2
2.1
-1.2
10.1
6.7
14.6'
1980
Q3
2.0
-10.4
16.4
-5.9
1.5
-.7'
6.8
-2.8
5.4
13.7
-2.5
19.2
-16.0
15.8
44.3
2.7
17.2
-24.0
22.0
35.8
0.3
16.8
-11.5
14.5
34.8
-5.2
4.4
11.7
5.7
5.7
1981
Q4
1981
Q2
Ql
Apr.
May
June
July
Aug.
Interest rates (levels, percent per annum)
16
17
18
19
Short-term rates
Federal funds 9
Discount window borrowing 1 0
Treasury bills (3-month market yield) 1
Commercial paper (3-month) 11 12
Long-term rates
Bonds
20
U.S. government 1 3
21
State and local government 1 4
22
Aaa utility (new issue) 15
23 Conventional mortgages 16
9.83
10.35
9.15
9.65
15.85
11.78
13.61
15.26
16.57
13.00
14.39
15.34
17.78
13.62
14.91
16.15
15.72
13.00
13.69
14.56
18.52
13.87
16.30
17.56
19.10
14.00
14.73
16.32
19.04
14.00
14.95
17.00
17.82
14.00
15.51
17.23
10.95
8.58
12.20
13.12
12.23
9.59
13.49
14.62
12.74
9.97
14.45
15.10
13.49
10.69
15.41
16.15'
13.46
10.62
15.68
15.70
13.82
10.78
15.81
16.35
13.20
10.67
14.76
16.40
13.92
11.14
16.30
16.70
14.52
12.26
1. Unless otherwise noted, rates of change are calculated from average amounts
outstanding in preceding month or quarter. Growth rates are adjusted for discontinuities in series that result from changes in Regulation D.
2. Includes reserve balances at Federal Reserve Banks in the current week plus
vault cash held two weeks earlier used to satisfy reserve requirements at all depository institutions plus currency outside the U.S. Treasury, Federal Reserve Banks,
the vaults of depository institutions, and surplus vault cash at depository institutions.
3. M l - A : Averages of daily figures for (1) demand deposits at all commercial
banks other than those due to domestic banks, the U.S. government, and foreign
banks and official institutions less cash items in the process of collection and Federal
Reserve float; (2) currency outside the Treasury, Federal Reserve Banks, and the
vaults of commercial banks; and (3) traveler's checks of nonbank issuers.
M l - B : M l - A plus negotiable order of withdrawal and automated transfer service
accounts at banks and thrift institutions, credit union share draft accounts, and
demand deposits at mutual savings banks.
M2: M l - B plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eurodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and money market mutual fund shares.
M3: M2 plus large-denomination time deposits at all depository institutions and
term RPs at commercial banks and savings and loan associations.
L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper, Treasury bills and other
liquid Treasury securities, and U.S. savings bonds.
17.50
4. Savings deposits exclude negotiable order of withdrawal (NOW) and automatic
transfer service (ATS) accounts at commercial banks.
5. Small-denomination time deposits are those issued in amounts of less than
$100,000.
6. Large-denomination time deposits are those issued in amounts of $100,000 or
more.
7. Savings and loan associations, mutual savings banks, and credit unions.
8. Changes calculated from figures shown in table 1.23.
9. Averages of daily effective rates (average of the rates on a given date weighted
by the volume of transactions at those rates).
10. Rate for the Federal Reserve Bank of New York.
11. Quoted on a bank-discount basis.
12. Unweighted average of offering rates quoted by at least five dealers.
13. Market yields adjusted to a 20-year maturity by the U.S. Treasury.
14. Bond Buyer series for 20 issues of mixed quality.
15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by
Moody's Investors Service and adjusted to an Aaa basis. Federal Reserve compilations.
16. Average rates on new commitments for conventional first mortgages on new
homes in primary markets, unweighted and rounded to nearest 5 basis points, from
Dept. of Housing and Urban Development.
NOTE. Reserve series have been revised to adjust for discontinuties associated
with the transitional phase-in of reserve requirements under the Monetary Control
Act of 1980.
M3 has been revised to incorporate additional data for term repurchase agreements.
A4
1.11
DomesticNonfinancialStatistics • September 1981
RESERVES OF DEPOSITORY INSTITUTIONS, RESERVE B A N K CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1981
1981
Factors
July 15P
July 22P
July 29P
JuneP
JulyP
Aug.P
144,999
147,405
146,892
147,172
148,927
147,246
120,637
120,333
304
8,773
8,710
63
155
2,038
3,474
9,922
122,882
121,203
1,679
9,067
8,694
373
338
1,751
3,176
10,191
124,522
123,950
572
8,785
8,694
91
102
1,408
2,796
9,279
123,129
120,624
2505
9,094
8.694
400
393
1,295
3,276
9.984
123,889
121,344
2,545
9,395
8,694
701
453
1,730
3,230
10,229
122,820
121,604
1,216
8,867
8,694
173
154
1.978
3,167
10,261
11,154
2,826
13.587
11,154
3,068
13,613
11,154
3,068
13.607
11,154
3,068
13,585
11,154
3,068
13.590
136,730
498
138,360
468
138,452
450
139,069
475
3.049
292
367
3.144
309
538
3,208
280
503
3,407
262
524
Aug. 5P
Aug. 12P
Aug. 19P
Aug. 26P
145,784
146,268
148,189
147,299
123,025
121,682
1,343
8.941
8,694
247
303
1,118
2.779
9,618
122,967
122,967
0
8,694
8,694
0
0
1,271
3,701
9,635
125,497
124,408
1,089
8,881
8,694
187
214
1,457
2,723
9,416
125,801
125,207
594
8,780
8,694
86
89
1,726
2,148
8,754
11.154
3,068
13,594
11,154
3,068
13.922
11,154
3,068
13,606
11,154
3,068
13,609
11,154
3.068
13,609
138,411
463
137,732
457
138,338
449
139,033
450
138,915
452
138,140
453
3.106
293
490
3,063
282
531
2,961
270
602
3,614
279
446
2,974
276
460
3,106
277
487
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
2
3
4
5
6
7
8
9
10
11
U.S. government securities 1
Bought outright
Held under repurchase agreements
Federal agency securities
Bought outright
Held under repurchase agreements
Acceptances
Loans
Float
Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account. ..
14 Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than member bank reserves
with Federal Reserve Banks
17
Treasury
18
Foreign
19
Other
20
Required clearing balances
21 Other Federal Reserve liabilities and
capital
22 Reserve accounts 2
n.a.
n.a.
26
n.a.
n.a.
n.a.
n.a.
n.a.
42
43
4,810
26,819
5,249
27,172
4,778
27,023
4,867
26,373
5,024
28,952
6,001
26,997
4,764
26,544
4,560
25,713
4,924
27,976
4,843
27,780
End-of-month figures
Wednesday figures
1981
1981
June
July
Aug.
July 15
July 22
July 29
Aug. 5
Aug. 12
Aug. 19
Aug. 26
SUPPLYING RESERVE FUNDS
23 Reserve bank credit outstanding
24
25
26
27
28
29
30
31
32
33
1
U.S. government securities
Bought outright
Held under repurchase agreements
Federal agency securities
Bought outright
Held under repurchase agreements
Acceptances
Loans
Float
Other Federal Reserve assets
34 Gold stock
35 Special drawing rights certificate account..
36 Treasury currency outstanding
142,934
144,651
145,731
149,276
155,422
147,760
148,166
146,395
149,191
144,829
120.017
120,017
0
8,694
8.694
0
0
1.010
2,506
10,707
123,172
121,554
1,618
9,054
8,694
360
453
1,027
1,251
9,694
124,522
124,522
0
8,694
8,694
0
0
1,254
2,229
9,032
122,289
121.581
708
8,918
8,694
224
223
3.286
4,443
10,117
125,682
121,658
4.024
9,998
8.694
1,304
621
5,230
3,626
10,265
122.549
120.873
1.676
9,251
8,694
557
296
1.916
3,060
10.688
122,692
122,692
0
8,694
8,694
0
0
1,804
5,081
9,895
122,710
122,710
0
8,694
8,694
0
0
1,321
3.933
9,737
126,082
125,155
927
8,986
8,694
292
154
1,914
3,203
8,852
122,829
122,829
0
8,694
8,694
0
0
1,482
2,885
8,939
11.154
3,068
14.155
11,154
3.068
14,350
11,154
3,068
13,609
11,154
3,068
13,588
11.154
3.068
13,593
11,154
3,068
13.599
11.154
3,068
13,604
11,154
3,068
13,609
11,154
3,068
13,609
11,154
3,068
13,609
138,080
478
138,287
448
137,913
446
139,181
466
138,348
463
138.158
453
138,896
447
139,572
453
138,968
453
138,246
448
2,923
338
536
n.a.
2.922
285
472
n.a.
2.595
256
502
45
3,153
288
486
n.a.
3,573
346
674
n.a.
3.193
211
1,010
n.a.
2,936
205
798
n.a.
3,075
241
454
n.a.
3,104
207
434
42
3,139
263
503
43
5,330
23,626
4,798
26,011
4,805
27,000
4.558
28.953
5,064
34,769
5,686
26,870
4,428
28,282
4,414
26,017
4,755
29,059
4,591
25,427
ABSORBING RESERVE FUNDS
37 Currency in circulation
38 Treasury cash holdings
Deposits, other than member bank reserves
with Federal Reserve Banks
39
Treasury
40
Foreign
41
Other
42 Required clearing balances
43 Other Federal Reserve liabilities and
capital
44 Reserve accounts 2
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Excludes required clearing balances,
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Depository Institutions
1.12
RESERVES A N D BORROWINGS
A5
Depository Institutions
Millions of dollars
Monthly averages of daily figures
Reserve classification
1 Reserve balances with Reserve Banks 1
2 Total vault cash (estimated)
Vault cash at institutions with required
3
reserve balances 2
4
Vault cash equal to required reserves at
other institutions
Surplus vault cash at other institutions 3 ..
5
6 Reserve balances + total vault cash4
7 Reserve balances + total vault cash used
to satisfy reserve requirements 4 - 5
8 Required reserves (estimated)
9 Excess reserve balances at Reserve Banks4-6 .
10 Total borrowings at Reserve Banks
11
Seasonal borrowings at Reserve Banks
1979
1980
Dec.
Dec.
32,473
n.a.
26,664
18,149
27,114
19,293
26,591
17,824
26,722
17,327
27,173
17,189
26,822
17,773
26,819
18,198
27,172
18,273
27.023
18,438
11,344
1981
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
12,602
13,587
12,187
11,687
11,687
12,124
12,396
12,504
12,585
n.a.
n.a.
n.a.
704
4,843
44,940
700
5,006
46,520
763
4,874
44,524
1,237
4,403
44,155
1.204
4,298
44.451
1,310
4,339
44,683
1,350
4,452
45,100
1,319
4,450
45,507
1,364
4,489
45,513
43,972
43,578
394
1,473
82
n.a.
40,097
40,067
30
1,617
116
n.a.
41,514
41,025
489
1,405
120
n.a.
39,650
39,448
202
1,278
148
n.a.
39,752
39,372
380
1,004
197
n.a.
40,153
40,071
82
1,343
161
n.a.
40,344
40,213
131
2,154
259
n.a.
40,648
40,098
550
2,038
291
n.a.
41,057
40,675
382
1,751
248
n.a.
41.024
40,753
271
1,408
220
79
Weekly averages of daily figures for week ending:
June 24
13 Reserve balances with Reserve Banks 1
14 Total vault cash (estimated)
15 Vault cash at institutions with required
reserve balances 2
16 Vault cash equal to required reserves at
other institutions
17 Surplus vault cash at other institutions 3 ..
18 Reserve balances + total vault cash4
19 Reserve balances + total vault cash used
to satisfy reserve requirements 4 - 5
20 Required reserves (estimated)
21 Excess reserve balances at Reserve Banks4-6 .
22 Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
23
24
Extended credit at Reserve Banks
July 1
July 8
July 22
July 29
Aug. 5
Aug. 12
Aug. 19
Aug. 26
27,430
17,306
27,383
18,325
26,406
18,495
26,373
18,856
28,952
16.736
26,997
18,878
26,544
18,688
25,713
19,048
27,976
17,911
27,780
17,995
11,907
12,573
12,729
12.831
11,411
12,940
12,848
13,054
12,180
12,164
1,230
4,169
44,818
1,285
4,467
45,785
1,309
4,457
44,975
1,361
4,664
45,288
1,258
4,067
45,747
1,351
4,587
45,931
1,323
4,517
45,288
1,383
4,611
44,815
1,306
4,425
45,940
1,448
4,383
45,826
40,649
40,285
364
2,305
306
n.a.
41,318
40,830
488
1,735
306
n.a.
40,518
40,017
501
1,866
241
n.a.
40,624
40,495
129
1,295
247
n.a.
41,680
41,350
330
1,730
244
n.a.
41,344
40,895
449
1,978
258
n.a.
40,771
40,392
379
1,118
227
n.a.
40,204
39,882
322
1,271
223
n.a.
41,515
41,298
217
1,457
231
n.a.
41,443
41,281
162
1,726
246
155
1. As of Aug. 13, 1981 excludes required clearing balances of all depository
institutions.
2. Prior to Nov. 13, 1980, the figures shown reflect only the vault cash held by
member banks.
3. Total vault cash at institutions without required reserve balances less vault
cash equal to their required reserves.
4. Adjusted to include waivers of penalties for reserve deficiencies in accordance
with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a
graduated basis over a 24-month period when a nonmember bank merged into an
July 15
existing member bank, or when a nonmember bank joins the Federal Reserve
System. For weeks for which figures are preliminary, figures by class of bank do
not add to total because adjusted data by class are not available.
5. Reserve balances with Federal Reserve Banks which exclude required clearing
balances plus vault cash at institutions with required reserve balances plus vault
cash equal to required reserves at other institutions.
6. Reserve balances with Federal Reserve Banks which exclude required clearing
balances plus vault cash used to satisfy reserve requirements less required reserves.
(This measure of excess reserves is comparable to the old excess reserve concept
published historically.)
A6
DomesticNonfinancialStatistics • September 1981
1.13
FEDERAL FUNDS A N D REPURCHASE AGREEMENTS
Averages of daily figures, in millions of dollars
Large Member Banks 1
1981, week ending Wednesday
By maturity and source
One day and continuing contract
1 Commercial banks in United States
2 Other depository institutions, foreign banks and foreign
official institutions, and U.S. government agencies .
3 Nonbank securities dealers
4 All other
July 1
July 8
July 15
July 22
July 29'
46,493'
51,960
52,105
46,894
44,629
47,895
51,567
47,237
45,287
16,312'
2,600
20,731
15,528r
2,831
17,066
16,290r
2,998
20,659'
15.554r
3,041
21,408'
15,278
2,276
21,856
15,092
2,767
20,888
15,522
2,629
20,998
16,048
3,081
20,224
15,841
3,143
21,365
3,655
4.930
3,572
3,504
3,546
3,592
3,283
3,233
3,275
7,410
5,313
9,702
7,429
5.469
12,732r
7,732
4,926
9,822
8,218
4,884
9,849
7,330
4,921
9,567
7,212
4,887
9,854
6,721
4,479
9,908
7,111
4,573
9,596
6,865
4,328
9,501
16,006
2,931
15,924
2,744
17,081
2,294'
15,304
2,598 r
14,778
2,357
16,389
2,534
15,347
2,819
16,247
2,679
14,111
2,408
All other maturities
5 Commercial banks in United States
6 Other depository institutions, foreign banks and foreign
official institutions, and U.S. government agencies .
7 Nonbank securities dealers
8 All other
MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract
9 Commercial banks in United States
10 Nonbank securities dealers
1. Banks with assets of $1 billion or more as of Dec. 31, 1977.
Aug. 5
Aug. 12
Aug. 19
Aug. 26
Policy Instruments
1.14
A7
FEDERAL RESERVE BANK INTEREST RATES
Percent per annum
Current and previous levels
Other extended credit 2
Short-term adjustment credit
and seasonal credit1
Federal Reserve
Bank
Rate on
8/31/81
Effective
date
Previous
rate
14
14
14
14
14
14
14
14
14
14
14
14
5/5/81
5/5/81
5/5/81
5/5/81
5/5/81
5/5/81
5/8/81
5/5/81
5/5/81
5/5/81
5/5/81
5/5/81
13
13
13
13
13
13
13
13
13
13
13
13
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Ohio
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco....
First 60 days
of borrowing
Rate on
8/31/81
Previous
rate
Next 90 days
of borrowing
Rate on
8/31/81
Previous
rate
Rate on
8/31/81
Previous
rate
15
15
15
15
15
15
15
15
15
15
15
15
14
15
15
15
15
15
15
15
15
15
15
15
15
16
16
16
16
16
16
16
16
16
16
16
14
15
15
15
15
15
15
15
15
15
15
15
14
15
15
15
15
15
15
15
15
15
15
15
15
14
14
14
14
14
14
14
14
14
14
14
After 150 days
Effective date
for current rates
5/5/81
8/20/81
8/20/81
8/25/81
8/21/81
8/21/81
8/27/81
8/25/81
8/21/81
8/27/81
8/20/81
8/21/81
Range of rates in recent years3
Effective date
In effect Dec. 31, 1972.
1973— Jan. 15
Feb. 26
Mar. 2
Apr. 23
May 4
11
18
June 11
15
July 2
Aug. 14
23
1974— Apr. 25
30
Dec. 9
16
1975— Jan.
6
10
24
Feb. 5
7
Mar. 10
14
May 16
Range (or
level)—
All F.R.
Banks
4V4
5
5-5 Vi
5V5 3
5Vl-5
A
3
5 /4
5V4-6
6
6-6 Vi
6Vz
1-1 Yi
IVi
7
7V5-8
83
7 /4-8
3
7 /4
7 to
7 to
1V\
6%
6V4-63/4
6to
6-6to
F.R.
Bank
of
N.Y.
4Vi
5
5V2
5Vi
51/2
53/4
6
6
6 Vi
6 Vi
7
71/2
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
1976— Jan. 19
23
Nov. 22
26
5 V5-6
51/4
5to-5i/!
5to
5Vi
5Vi
5 to
5to
1979— Sept. 19
21
Oct. 8
10
10W-11
11
11-12
12
11
11
12
12
1977— Aug. 30
31
Sept. 2
Oct. 26
51/4-53/4
5to
9
20
11
12
3
10
21
22
16
20
1
3
1980— Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13
13
13
12
11
11
10
10
11
12
13
13
5
8
13-14
14
14
14
14
14
Effective date
1978— Jan.
m
May
8
8
July
July
Aug.
Sept.
Oct.
73/4
73/4
7 to
7to
7to
63/4
63/4
6to
6 to
6
Nov.
1979— July 20
Aug. 17
20
5%
53/4
53/4
6
6
6-6W
6V4
6V4
7
7
7to
7to
5V4-53/4
6Vi
6VS-7
7
7-7to
7 to
73/4
73/4
8-8 Vi
8Vi
8V^-9i/2
9Vi
8Vi
8Vi
91/2
9 Vi
10
10-10VS
10V5
10
Effective date
1981— May
May
F.R.
Bank
of
N.Y.
lO'/i
10W
In effect Aug. 31, 1981
1. Effective May 5, 1981, a 4 percent surcharge was applied to short-term adjustment credit borrowings by institutions with deposits or $500 million or more
who borrowed in successive weeks or in more than 4 weeks in a calendar quarter.
The rate for seasonal credit is unaffected by the surcharge.
2. Applicable to advances when exceptional circumstances or practices involve
only a particular depository institution and to advances when an institution is under
sustained liquidity pressures. See section 201.3(b)(2) of Regulation A.
Range (or
level)—
All F.R.
Banks
3. Rates for short-term adjustment credit. For description and earlier data see
the following publications of the Board of Governors: Banking and Monetary
Statistics, 1914-1941 and 1941-1970; Annual Statistical Digest, 1971-1975, 19721976, 1973-1977, and 1974-1978.
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 4 weeks in a calendar
quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7,
1980. On Nov. 17, 1980, 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.
A8
1.15
DomesticNonfinancialStatistics • September 1981
D E P O S I T O R Y INSTITUTIONS R E S E R V E R E Q U I R E M E N T S 1
Percent of deposits
Type of deposit, and deposit interval
in millions of dollars
Member bank requirements
before implementation of the
Monetary Control Act
Percent
Effective date
7
12/30/76
12/30/76
12/30/76
12/30/76
12/30/76
Net demand2
0-2
2-10
9>/2
10-100
113/4
100-400
Over 400
123/4
16'/4
Time and savings2,3
Savings
Time4
0-5, by maturity
30-179 days
180 days to 4 years
4 years or more . . .
Over 5, by maturity
30-179 days
180 days to 4 years
4 years or more . . .
Depository institution requirements
after implementation of the
Monetary Control Act 5
Percent
Net transaction accounts6
$0-$25 million
Over $25 million
Nonpersonal time deposits1
By original maturity
Less than 4 years
4 years or more
3/16/67
Eurocurrency liabilities
All types
3
2'/i
1
6
2Vi
1
3/16/67
1/8/76
10/30/75
12/12/74
1/8/76
10/30/75
1. For changes in reserve requirements beginning 1963, see Board's Annual
Statistical Digest, 1971-1975 and for prior changes, see Board's Annual Report for
1976, table 13. 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 Act
corporations.
2. (a) Requirement schedules are graduated, and each deposit interval applies
to that part of the deposits of each bank. Demand deposits subject to reserve
requirements were gross demand deposits minus cash items in process of collection
ana demand balances due from domestic banks.
(b) The Federal Reserve Act as amended through 1978 specified different ranges
of requirements for reserve city banks and for other banks. Reserve cities were
designated under a criterion adopted effective Nov. 9,1972, by which a bank having
net demand deposits of more than $400 million was considered to have the character
of business of a reserve city bank. The presence of the head office of such a bank
constituted designation of that place as a reserve city. Cities in which there were
Federal Reserve Banks or branches were also reserve cities. Any banks having net
demand deposits of $400 million or less were considered to have the character of
business of Danks outside of reserve cities and were permitted to maintain reserves
at ratios set for banks not in reserve cities.
(c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net
balances due from domestic banks to their foreign branches and on deposits that
foreign branches lend to U.S residents were reduced to zero from 4 percent and
1 percent respectively. The Regulation D reserve requirement on borrowings from
unrelated banks abroad was also reduced to zero from 4 percent.
(d) Effective with the reserve computation period beginning Nov. 16, 1978,
domestic deposits of Edge corporations were subject to the same reserve requirements as deposits of member oanks.
3. (a) Negotiable order of withdrawal (NOW) accounts and time deposits such
as Christmas and vacation club accounts were subject to the same requirements as
savings deposits.
(b) The average reserve requirement on savings and other time deposits before
implementation of the Monetary Control Act had to be at least 3 percent, the
minimum specified by law.
4. (a) Effective Nov. 2,1978, a supplementary reserve requirement of 2 percent
was imposed on large time deposits of $100,000 or more, obligations of affiliates,
and ineligible acceptances. This supplementary requirement was eliminated with
the maintenance period beginning July 24, 1980.
Type of deposit, and
deposit interval
(b) Effective with the reserve maintenance period beginning Oct. 25, 1979, a
marginal reserve requirement of 8 percent was added to managed liabilities in
excess of a base amount. This marginal requirement was increased to 10 percent
beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and
was reduced to zero beginning July 24, 1980. Managed liabilities are defined as
large time deposits, Eurodollar borrowings, repurchase agreements against U.S.
government and federal agency securities, federal funds borrowings from nonmember institutions, and certain other obligations. In general, the base for the
marginal reserve requirement was originally the greater of (a) $100 million or (b)
the average amount of the managed liabilities held by a member bank, Edge
corporation, or family of U.S. branches and agencies of a foreign bank for the two
statement weeks ending Sept. 26,1979. For the computation period beginning Mar.
20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution's
U.S. office gross loans to foreigners and gross balances due from foreign offices
of other institutions between the base period (Sept. 13-26, 1979) and the week
ending Mar. 12,1980, whichever was greater. For the computation period beginning
May 29,1980, the base was increased by 7 V5 percent above the base used to calculate
the marginal reserve in the statement week of May 14-21, 1980. In addition,
beginning Mar. 19,1980, the base was reduced to the extent that foreign loans and
balances declined.
5. For existing nonmember banks and thrift institutions at the time of implementation of the Monetary Control Act, the phase-in period ends Sept. 3, 1987.
For existing member banks the phase-in period is about three years, depending on
whether their new reserve requirements are greater or less than the old requirements. For existing agencies and branches of foreign banks, the phase-in ends Aug.
12, 1982. All new institutions will have a two-year phase-in beginning with the date
that they open for business.
6. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment
orders of withdrawal, and telephone and preauthorized transfers (in excess of three
per month) for the purpose or making payments to third persons or others.
7. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which the beneficial interest is
held by a depositor that is not a natural person. Also included are certain transferable time deposits held by natural persons, and certain obligations issued to
depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
NOTE. Required reserves must be held in the form of deposits with Federal
Reserve Banks or vault cash. After implementation of the Monetary Control Act,
nonmembers may maintain reserves on a pass-through basis with certain approved
institutions.
Policy Instruments
1.16
A9
M A X I M U M INTEREST R A T E S P A Y A B L E on Time and Savings Deposits at Federally Insured Institutions
Percent per annum
Savings and loan associations and
mutual savings banks
Commercial banks
Type and maturity of deposit
In effect July 31, 1981
Percent
1 Savings
2 Negotiable order of withdrawal accounts 2
Time accounts 3
Fixed ceiling rates by maturity 4
3
14-89 d a y s '
4
90 days to 1 year
5
1 to 2 years 7
6
2 to 2V5 years 7
7
2Vi to 4 years 7
8
4 to 6 years 8
9
6 to 8 years 8
10
8 years or more 8
11
Issued to governmental units (all maturities) 10
12
Individual retirement accounts and Keogh (H.R. 10)
plans (3 years or more) 1 0 1 1
13
14
5'/4
5V4
Effective
date
Percent
In effect July 31, 1981
Effective
date
Effective
date
7/1/73
1/1/74
7/1/79
12/31/80
5 Vi
51/4
7/1/79
12/31/80
Previous maximum
Percent
51/4
5
0)
1/1/74
>)
5!/4
5 3 /4
8/1/79
1/1/80
7/1/73
6V5
71/4
IVI
3
7 /4
7/1/73
11/1/73
12/23/74
6/1/78
6/1/78
6/1/78
Special variable ceiling rates by maturity
6-month money market time deposits ' 2
2 Vi years or more
1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan
associations.
2. For authorized states only, federally insured commercial banks, savings and
loan associations, cooperative banks, and mutual savings banks in Massachusetts
and New Hampshire were first permitted to offer negotiable order of withdrawal
(NOW) accounts on Jan. 1, 1974. Authorization to issue N O W accounts was extended to similar institutions throughout New England on Feb. 27, 1976, and in
New York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Authorization to issue N O W accounts was extended to similar institutions nationwide
effective Dec. 31, 1980.
3. For exceptions with respect to certain foreign time deposits see the FEDERAL
RESERVE BULLETIN f o r O c t o b e r 1962 (p. 1279), A u g u s t 1965 (p. 1084), a n d F e b -
ruary 1968 (p. 167).
4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts
at savings and loan associations was decreased to 14 days and the minimum maturity
period for time deposits at savings and loan associations in excess of $100,000 was
decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity or notice
period for time deposits was decreased from 30 days to 14 days for mutual savings
tanks.
5. Effective Oct. 30, 1980, the minimum maturity or notice period for time
deposits was decreased from 30 days to 14 days for commercial banks.
6. No separate account category.
7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was
required for savings and loan associations, except in areas where mutual savings
banks permitted lower minimum denominations. This restriction was removed for
deposits maturing in less than 1 year, effective Nov. 1, 1973.
8. No minimum denomination. Until July 1, 1979, minimum denomination was
$1,000 except for deposits representing funds contributed to an Individual Retirement Account (IRA) or a Keogh (H.R. 10) plan established pursuant to the Internal
Revenue Code. The $1,000 minimum requirement was removed for such accounts
in December 1975 and November 1976 respectively.
9. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates
maturing in 4 years or more with minimum denominations of $1,000; however, the
amount of such certificates that an institution could issue was limited to 5 percent
of its total time and savings deposits. Sales in excess of that amount, as well as
certificates of less than $1,000, were limited to the 6Vi percent ceiling on time
deposits maturing in 2Vi years or more.
Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4
years or more with minimum denomination of $1,000. There is no limitation on
the amount of these certificates that banks can issue.
10. Accounts subject to fixed-rate ceilings. See footnote 8 for minimum denomination requirements.
11. Effective January 1, 1980, commercial banks are permitted to pay the same
rate as thrifts on I R A and Keogh accounts and accounts of governmental units
when such deposits are placed in the new 2Vi-year or more variable-ceiling certificates or in 26-week money market certificates regardless of the level of the Treasury
bill rate.
12. Must have a maturity of exactly 26 weeks and a minimum denomination of
$10,000, and must be nonnegotiable.
13. Commercial banks, savings and loan associations, and mutual savings banks
were authorized to offer money market time deposits effective June 1, 1978. The
ceiling rate for commercial banks on money market time deposits entered into
before June 5,1980, is the discount rate (auction average) on most recently issued
six-month U.S. Treasury bills. Until Mar. 15, 1979, the ceiling rate for savings and
loan associations and mutual savings banks was V4 percentage point higher than
the rate for commercial banks. Beginning Mar. 15, 1979, the Vi-percentage-point
interest differential is removed when the six-month Treasury bill rate is 9 percent
or more. The full differential is in effect when the six-month bill rate is 83/4 percent
or less. Thrift institutions may pay a maximum 9 percent when the six-month bill
Previous maximum
5
51h
5 VI
53/4
5 3 /4
7/1/73
7/1/73
1/21/70
1/21/70
1/21/70
(6)
6
1/1/80
6'/i
6%
(')
7Vi
12/23/74
11/1/73
12/23/74
6/1/78
6/1/78
7/6/77
6/1/78
11/1/73
7 3 /4
0)
5 3 /4
5 3 /4
6
6
»)
0
1/21/70
1/21/70
1/21/70
71/2
11/1/73
73/4
12/23/74
7 3 /4
7/6/77
fl3l
rate is between 83/4 and 9 percent. Also effective March 15, 1979, interest compounding was prohibited on six-month money market time deposits at all offering
institutions. The maximum allowable rates in July for commercial banks and thrift
institutions were as follows: Aug. 4, 15.821; Aug. 11, 15.372; Aug. 18, 15.894;
Aug. 25, 16.104. Effective for all six-month money market certificates issued beginning June 5, 1980, the interest rate ceilings will be determined by the discount
rate (auction average) of most recently issued six-month U.S. Treasury bills as
follows:
Bill rate
Commercial bank ceiling
Thrift ceiling
8.75 and above
bill rate + '/4 percent
bill rate + Vi percent
8.50 to 8.75
bill rate + V4 percent
9.00
7.50 to 8.50
bill rate + 'A percent
bill rate + Vi percent
7.25 to 7.50
7.75
bill rate + >/i percent
Below 7.25
7.75
7.75
The prohibition against compounding interest in these certificates continues.
14. Effective Aug. 1, 1981, commercial banks may pay interest on any variable
ceiling nonnegotiable time deposit with an original maturity of 2Vi years to less
than 4 years at a rate not to exceed Vi of 1 percent below the average 2'/2-year
yield for U.S. Treasury securities as determined and announced by the U.S. Treasury Department immediately before the date of deposit. Mutual savings banks and
savings and loan associations may pay interest on these certificates at a rate not
to exceed the averate 2Vi -year yield for U.S. Treasury securities as determined
and announced by the Treasury Department immediately before the date of deposit.
If the announced average 2'/5-year yield for U.S. Treasury securities is less than
9.50 percent, commercial banks may pay 9.25 percent and mutual savings banks
and savings and loan associations, 9.50 percent for these deposits. These deposits
have no required minimum denomination, and interest may be compounded on
them. The ceiling rates of interest at which they may be offered vary biweekly.
The maximum allowable rates in August (in percent) for commercial banks were
as follows: Aug. 1, 14.90; Aug. 4, 15.55; Aug. 18, 15.65; and for thrift institutions:
Aug. 1, 15.15; Aug. 4, 15.80; Aug. 18, 15.90.
15. Between Jan. 1, 1980, and Aug. 1, 1981, commercial banks, mutual savings
banks, and savings and loan associations were authorized to offer variable ceiling
nonnegotiable time deposits with no required minimum denomination and with
maturities of 2Vi years or more. Effective Jan. 1, 1980, the maximum rate for
commercial banks was 3/4 percentage point below the average yield on 2Vi-year
U.S. Treasury securities; the ceiling rate for thrift institutions was VA percentage
point higher than that for commercial banks. Effective Mar. 1, 1980, a temporary
ceiling of ll 3 /4 percent was placed on these accounts at commercial banks; the
temporary ceiling for savings and loan associations and commercial banks, savings
and loan associations, and mutual savings banks was increased Vi percentage point.
The temporary ceiling was retained, and a minimum ceiling of 9.25 percent for
commercial banks and 9.50 percent for savings and loan associations and mutual
savings banks was established.
NOTE. Before Mar. 31, 1980, the maximum rates that could be paid by federally
insured commercial banks, mutual savings banks, and savings and loan associations
were established by the Board of Governors of the Federal Reserve System, the
Board of Directors of the Federal Deposit Insurance Corporation, and the Federal
Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526 respectively. Title II of the Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to establish
maximum rates of interest payable on deposits to the Depository Institutions Deregulation Committee. The maximum rates on time deposits in denominations of
$100,000 or more with maturities of 30-89 days were suspended in June 1970; such
deposits maturing in 90 days or more were suspended in May 1973. For information
regarding previous interest rate ceilings on all types of accounts, see earlier issues
of the FEDERAL RESERVE BULLETIN, the Federal Home Loan Bank Board Journal,
and the Annual Report of the Federal Deposit Insurance Corporation.
A10
1.17
Domestic Financial Statistics • September 1981
F E D E R A L RESERVE OPEN MARKET TRANSACTIONS
Millions of dollars
1981
Type of transaction
1978
1979
1980
Jan.
Feb.
Mar.
Apr.
May
June
July
U . S . GOVERNMENT SECURITIES
Outright transactions (excluding matched salepurchase transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
7
8
9
Others within 1 year1
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
16,628
13,725
0
2,033
15,998
6,855
0
2,900
7,668
7,331
0
3,389
1,100
3,865
0
1,000
0
357
0
0
1,607
0
0
0
1,141
0
0
0
790
0
0
0
295
90
0
0
1,325
0
0
100
1,184
0
-5,170
3,203
0
17,339
-11,308
2,600
912
0
12,427
-18,251
0
0
0
462
0
0
0
23
990
-1,936
0
0
0
878
-1,385
0
115
0
522
-261
0
0
0
2,900
-1,281
0
0
0
833
-823
0
122
0
1,073
-351
0
4,188
0
2,148
0
-12,693
7,508
2,138
0
-8,909
13,412
0
0
-462
0
0
0
-990
1,211
0
0
-878
1,385
469
0
-522
261
0
0
-1,724
681
0
0
-833
823
607
0
-1,073
351
1,526
0
523
0
-4,646
2,181
703
0
-3,092
2,970
0
0
0
0
0
0
0
400
0
0
0
0
164
0
0
0
0
0
-1,176
300
0
0
0
0
64
0
0
0
1,063
0
454
0
0
1,619
811
0
-426
1,869
0
0
0
0
0
0
0
325
0
0
0
0
89
0
0
0
0
0
0
300
0
0
0
0
182
0
0
0
24,591
13,725
2,033
22,325
6,855
5,500
12,232
7,331
3,389
1,100
3,865
1,000
0
380
0
1,607
0
0
1,977
0
0
790
0
0
295
90
0
2,301
0
100
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
22
23
24
All maturities1
Gross purchases
Gross sales
Redemptions
25
26
Matched transactions
Gross sales
Gross purchases
511,126
510,854
627,350
624,192
674,000
675,496
61,427
63,062
30,819
31,651
32,003
30,441
37,251
37,295
45,658
43,492
51,106
52,607
69,972
69,309
2/
28
Repurchase agreements
Gross purchases
Gross sales
151,618
152,436
107,051
106,968
113,902
113,040
6,108
8,137
0
0
1,623
1,246
9,458
9,835
1,219
1,219
3,509
3,509
23,217
21,599
7,743
6,896
3,869
-4,159
452
422
1,644
-1,376
1,706
3,155
301
173
235
853
399
134
668
0
145
0
0
0
0
0
3
0
0
15
0
0
2
0
0
0
0
26
0
0
*
40,567
40,885
37,321
36,960
28,895
28,863
652
1,177
0
0
494
437
1,211
1,268
186
186
691
691
5,182
4,822
-426
681
555
-525
-3
42
-58
0
-26
360
36 Outright transactions, net
37 Repurchase agreements, net
0
-366
0
116
0
73
0
-776
0
0
0
298
0
-298
0
0
0
0
0
453
38 Net change in bankers acceptances
-366
116
73
-776
0
298
-298
0
0
453
39 Total net change in System Open Market
Account
6,951
7,693
4,497
-5,460
450
762
1,287
-1,376
1,680
3,968
29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS
30
31
32
Outright transactions
Gross purchases
Gross sales
Redemptions
Repurchase agreements
33
Gross purchases
34
Gross sales
35 Net change in federal agency obligations
*
BANKERS ACCEPTANCES
1. Both gross purchases and redemptions include special certificates created
when the Treasury borrows directly from the Federal Reserve, as follows (millions
of dollars): March 1979, 2,600.
NOTE. Sales, redemptions, and negative figures reduce holding of the System
Open Market Account; all other figures increase such holdings. Details may not
add to totals because of rounding.
Reserve Banks
1.18
FEDERAL RESERVE BANKS
Millions of dollars
All
Condition and Federal Reserve Note Statements
Account
July 29
Aug. 5
Wednesday
End of month
1981
1981
Aug. 12
Aug. 19
Aug. 26
June
July
Aug.
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
.3
Loans
4
To depository institutions
Other
5
Acceptances
Held under repurchase agreements
6
Federal agency obligations
V Bought outright
Held under repurchase agreements
8
U.S. government securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total 1
13 Held under repurchase agreements
14 Total U.S. government securities
15 Total loans and securities
16 Cash items in process of collection
17 Bank premises
Other assets
18 Denominated in foreign currencies 2
19 All other 3
20 Total assets
11,154
3.068
367
11,154
3,068
368
11,154
3,068
370
11,154
3,068
371
11,154
3,068
374
11,154
3,068
380
11.154
3,068
380
11,154
3,068
384
1,916
1,804
1,321
1,914
1.482
1,010
1,027
1,254
0
0
0
0
0
0
0
0
296
0
0
154
0
0
453
0
8.694
557
8,694
8,694
8,694
8,694
0
0
0
8.694
360
8,694
0
8,694
292
43,473
59,609
17,791
120,873
1,676
122.549
45,292
59,609
17,791
122,692
45,310
59.609
17,791
122,710
45,429
59,429
17,971
122.829
43,593
58,818
17.606
120.017
0
0
0
0
122,710
122,829
120,017
44.154
59,609
17,791
121.554
1,618
123,172
47,122
59,429
17,971
124,522
122,692
47,755
59,429
17,971
125,155
927
126,082
124,522
134,012
133,190
132,725
137,136
133,005
129,721
133,706
134,470
8,556
479
12,403
477
10,076
481
9,031
482
8,440
485
11,297
475
7.085
479
7,606
484
5,812
4,397
5,758
3,660
5,757
3,499
5,763
2,607
5,765
2,689
6,430
3,802
5,739
3.476
5,713
2,835
167,845
170,078
167,130
169,612
164,980
166,327
165,087
165,714
125,379
126,107
126.786
126,183
125,459
124,783
124,765
125,134
26,870
3,193
211
1,010
28,282
2.936
205
798
26,017
3.075
241
454
29.101
3,104
207
434
25,470
3,139
263
503
23.626
2,923
338
536
26,011
2,922
285
472
27,045
2,595
256
502
31,284
32,221
29,787
32,846
29,375
27,423
29,690
30,398
5,496
2,885
7,322
1.712
6,143
1.633
5,828
1,946
5,555
1.786
8.791
2,387
5,834
1,992
5,377
1,801
165,044
167,362
164,349
166,803
162,175
163,384
162,281
162,710
1,250
1.203
348
1,251
1,203
262
1.252
1,203
326
1,254
1,203
352
1,254
1,203
348
1,246
1,203
494
1,250
1,203
353
1,256
1,203
545
167,845
170,078
167,130
169,612
164,980
166,327
165,087
165,714
95,116
94,020
91,507
91,752
91.648
97,549
95.133
92,025
0
0
LIABILITIES
21 Federal Reserve notes
Deposits
22
Depository institutions
23
U.S. Treasury—General account
24
Foreign—Official accounts
25
Other
26 Total deposits
27 Deferred availability cash items
28 Other liabilities and accrued dividends 4
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
33 Total liabilities and capital accounts
34 MEMO: Marketable U.S. government securities held in
custody for foreign and international account
Federal Reserve note statement
35
36
37
38
39
40
41
Federal Reserve notes outstanding (issued to bank) . . . .
Less-held by bank 5
Federal Reserve notes, net
Collateral for Federal Reserve notes
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. government and agency securities
42 Total collateral
146,989
21,610
125,379
147,470
21,363
126,107
148,027
21,241
126,786
148.740
22,557
126,183
149,102
23,643
125,459
145,062
20,279
124,783
147,142
22,377
124,765
149,051
23,917
125,134
11.154
3,068
0
111.157
11,154
3,068
0
111,885
11.154
3,068
0
112,564
11,154
3,068
0
111,961
11,154
3,068
0
111,237
11,154
3,068
27
110,534
11,154
3,068
0
110,543
11,154
3,068
0
110,912
125,379
126,107
126,786
126,183
125,459
124,783
124,765
125,134
1. Includes securities loaned—fully guaranteed by U.S. government securities
pledged with Federal Reserve Banks—and excludes (if any) securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Includes U.S. government securities held under repurchase agreement against
receipt of foreign currencies and foreign currencies warehoused for the U.S. Treasury. Assets shown in this line are revalued monthly at market exchange rates.
3. Includes special investment account at Chicago of Treasury bills maturing
within 90 days.
4. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
5. Beginning September 1980, Federal Reserve notes held by the Reserve Bank
are exempt from the collateral requirement.
A12
1.19
DomesticNonfinancialStatistics • September 1981
FEDERAL RESERVE BANKS
Millions of dollars
Maturity Distribution of Loan and Security Holdings
Type and maturity groupings
July 29
Aug. 5
Wednesday
End of month
1981
1981
Aug. 12
Aug. 19
Aug. 26
June 30
July 31
Aug. 31
1 Loans—Total
2
Within 15 days
3
16 days to 90 days
4
91 days to 1 year
1,916
1,869
47
0
1,804
1,696
108
0
1,321
1.220
101
0
1,914
1.882
32
0
1,482
1.442
40
0
1.010
964
46
0
1,027
926
101
0
1,254
1,169
85
0
5 Acceptances—Total
6
Within 15 days
7
16 days to 90 days
8
91 days to 1 year
296
296
0
0
0
0
0
0
0
0
0
0
154
154
0
0
0
0
0
0
0
0
0
0
453
453
0
0
0
0
0
0
9 U.S. government securities—Total
10
Within 15 days1
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
Over 10 years
15
122,549
3,451
23,801
31.758
34.535
13,106
15,898
122,692
5,649
22,050
32,176
33,813
13,106
15,898
122,710
5,520
23,207
31,166
33,813
13,106
15,898
126,082
6,019
24,443
33,184
34,714
11,519
16,203
122,829
4.404
22,619
33,370
34,714
11,519
16,203
120,017
1,714
23,875
31,742
33,928
13,042
15,716
123,172
4,253
21,945
34,157
33,813
13,106
15,898
124,522
3,589
24,422
34,071
34,718
11,519
16,203
16 Federal agency obligations—Total
17 Within 15 days'
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
9,251
622
647
1,717
4,649
1.015
601
8,694
0
718
1,711
4,649
1.015
601
8,694
100
618
1.711
4,649
1,015
601
8,986
454
556
1,711
4,649
1,015
601
8,694
195
424
1,821
4,638
1,015
601
8,694
207
446
1,779
4,636
982
644
9,054
425
647
1.717
4,649
1,015
601
8,694
195
553
1,692
4,638
1,015
601
1. Holdings under repurchase agreements are classified as maturing within 15
days in accordance with maximum maturity of the agreements.
1.20
B A N K DEBITS A N D DEPOSIT T U R N O V E R
Debits are shown in billions of dollars, turnover as ratio of debits to deposit. Monthly data are at annual rates.
1981
Bank group, or type of customer
1979
1978
1980
Mar.
Apr.
May
June
July
78.745.3
32.262.4
46,482.8
83.256.8
37,282.6
46,074.2
808.8
113.8
586.4
1,509.0
798.2
120.6
605.5
1,524.3
281.3
1,085.4
185.8
296.1
1,288.6
182.4
15.2
12.3
3.7
6.9
14.7
13.2
3.9
6.9
Debits to demand deposits' (seasonally adjusted)
1 All commercial banks
2 Major New York City banks
3 Other banks
40,297.8
15,008.7
25,289.1
49,775.0
18.512.7
31.262.3
63.013.4
25.192.5
37,820.9
75.487.3
30.276.0
45.211.3
73,621.7
29.501.3
44.120.4
74.800.5
29,610.9
45.189.6
Debits to savings deposits 2 (not seasonally adjusted)
4
5
6
7
ATS/NOW 3
Business 4
Others 5
All accounts
17.1
56.7
359.7
432.9
83.3
77.3
515.2
675.8
158.4
93.4
605.3
857.2
668.7
112.8
556.8
1,338.3
815.4
112.4
590.1
1,517.9
693.3
112.0
518.3
1.323.6
Demand deposit turnover 1 (seasonally adjusted)
8 All commercial banks
9 Major New York City banks
10 Other banks
139.4
541.9
96.8
163.5
646.2
113.3
201.6
813.7
134.3
262.9
959.5
176.9
257.2
1,001.9
171.8
260.9
975.1
176.3
Savings deposit turnover 2 (not seasonally adjusted)
11
12
13
14
ATS/NOW 3
Business4
Others 5
All accounts
7.0
5.1
1.7
1.9
1. Represents accounts of individuals, partnerships, and corporations, and of
states and political subdivisions.
2. Excludes special club accounts, such as Christmas and vacation clubs.
3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts
authorized for automatic transfer to demand deposits (ATS). ATS data availability
starts with December 1978.
4. Represents corporations and other profit-seeking organizations (excluding
commercial banks but including savings and loan associations, mutual savings banks,
credit unions, the Export-Import Bank, and federally sponsored lending agencies).
5. Savings accounts other than NOW; business; and. from December 1978, ATS.
7.8
7.2
2.7
3.1
9.7
9.3
3.4
4.2
14.2
11.3
3.5
6.1
15.2
11.6
3.6
6.7
13.5
11.7
3.3
6.0
NOTE. Historical data for the period 1970 through June 1977 have been estimated;
these estimates are based in part on the debits series for 233 SMSAs, which were
available through June 1977. Back data are available from Publications Services,
Division of Administrative Services. Board of Governors of the Federal Reserve
System, Washington, D.C. 20551. Debits and turnover data for savings deposits
are not available before July 1977.
Monetary Aggregates
1.21
A13
M O N E Y STOCK M E A S U R E S A N D C O M P O N E N T S
Billions of dollars, averages of daily figures
Item
1977
Dec.
1978
Dec.
1979
Dec.
1981
1980
Dec.
Mar.
Apr.
May
June
July
Seasonally adjusted
MEASURES 1
1
2
3
4
5
Ml-A
Ml-B
M2
M3
L2
331.4
336.4
1,296.4
1,462.5
1,722.7
354.8
364.2
1,404.2
1,625.7
1,936.5
372.7
390.5
1,525.2
1,775.1
2,151.1
387.7
415.6
1,669.4
1,963.5
2,377.4
365.8
425.8
1,718.6
2,026.1
2,443.7
366.6
433.7
1,738.1
2,044.6
2,455.6
88.6
239.7
3.1
486.5
453.8
145.1
97.4
253.9
3.5
475.5
533.3
194.0
106.1
262.8
3.8
416.5
652.7
219.7
116.1
267.4
4.2
393.0
756.8
256.8
117.9
243.5
4.4
368.3
789.4
271.0
118.9
243.1
4.6
367.0
790.0
269.5
364.9
431.5
1,743.4
2,059.0
2,476.7'
361.9
428.8
1,749.3
2,076.5'
n.a.
361.6
430.3
1,760.5
2,090.1
n.a.
119.9
237.9
4.2
354.0'
807.7'
287.3
120.9
236.6
4.1
349.0
811.6
290.3
361.1
428.4
1,751.5'
2,073.0'
n.a.
363.7
433.2
1,765.4
2,090.7
n.a.
119.9
237.0'
4.3
67.6'
39.7
122.8
355.4'
808.9'
281.6
121.5
237.6
4.7
69.7
39.2
134.3
352.8
809.9
286.0
COMPONENTS
6
7
8
9
10
11
Currency
Demand deposits
Travelers checks 3
Savings deposits
Small-denomination time deposits 4
Large-denomination time deposits 5
119.8
240.7
4.4
361.1
798.4
277.2
Not seasonally adjusted
MEASURES 1
12
13
14
15
16
Ml-A
Ml-B
M2
M3
L2
17
18
19
20
21
22
23
24
25
Currency
Demand deposits
Travelers checks 3
Other checkable deposits 6
Overnight RPs and Eurodollars 7
Money market mutual funds
Savings deposits
Small-denomination time deposits 4
Large-denomination time deposits 5
340.1
345.1
1,299.0
1,467.7
1,726.7
364.2
373.6
1,409.0
1,634.6
1,943.6
382.5
400.6
1,531.3
1,785.5
2,158.8
397.7
425.9
1,675.2
1,974.0
2,384.0
358.9
417.8
1,713.4
2,023.6
2,444.5
369.5
436.7
1,745.7
2,051.1
2,465.3
90.3
247.0
2.9
5.0
18.6
3.8
483.1
451.3
147.7
99.4
261.5
3.3
9.4
23.9
10.3
472.6
531.7
198.1
108.3
270.8
3.5
18.2
25.4
43.6
413.9
651.4
223.9
118.4
275.4
3.9
28.3
32.4
75.8
390.2
755.2
261.4
116.8
237.9
4.2
59.2
33.3
105.6
365.7
794.8
273.8
118.4
246.8
4.3
67.5
34.3
117.1
366.4
795.2
268.3
359.4
424.4
1,737.5
2,052.1
2,472.6'
COMPONENTS
1. Composition of the money stock measures is as follows:
Ml-A: Averages of daily figures for (1) demand deposits at all commercial banks
other than those due to domestic banks, the U.S. government, and foreign banks
and official institutions less cash items in the process of collection and Federal
Reserve float; (2) currency outside the Treasury, Federal Reserve Banks, and the
vaults of commercial banks; and (3) travelers checks of nonbank issuers.
Ml-B: Ml-A plus negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at banks and thrift institutions, credit union share draft
accounts, and demand deposits at mutual savings banks.
M2: Ml-B plus savings and small-denomination time deposits at all depository
institutions, overnight repurchase agreements at commercial banks, overnight Eurodollars held by U.S. residents other than banks at Caribbean branches of member
banks, and money market mutual fund shares.
M3: M2 plus large-denomination time deposits at all depository institutions and
term RPs at commercial banks and savings and loan associations.
2. L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper, Treasury bills and other
liquid Treasury securities, and U.S. savings bonds.
3. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank
issuers.
119.3
235.9
4.2
65.3
38.3
118.1
359.7
801.0
276.3
4. Small-denomination time deposits are those issued in amounts of less than
$100,000.
5. Large-denomination time deposits are those issued in amounts of $100,000
or more and are net of the holdings of domestic banks, thrift institutions, the U.S.
government, money market mutual funds, and foreign banks and official institutions.
6. Includes ATS and NOW balances at all institutions, credit union share draft
balances, and demand deposits at mutual savings banks.
7. Overnight (and continuing contract) RPs are those issued by commercial
banks to the nonbank public, and overnight Eurodollars are those issued by Caribbean branches of member banks to U.S. nonbank customers.
NOTE. Latest monthly and weekly figures are available from the Board's H.6(508)
release. Back data are available from the Banking Section, Division of Research
and Statistics.
A14
1.22
DomesticNonfinancialStatistics • September 1981
A G G R E G A T E R E S E R V E S OF D E P O S I T O R Y INSTITUTIONS A N D M E M B E R B A N K DEPOSITS 1
Billions of dollars, averages of daily figures
1980
Item
1978
Dec.
1979
Dec.
1980
Dec.
Nov. 2
1981
Jan.
Dec.
Feb.
Mar.
Apr.
May
June
July
Seasonally adjusted
1 Total reserves 3
41.16
43.46
40.13
41.23
40.13
40.10
39.76
40.25
40.25
40.81
40.83
41.11
2 Nonborrowed reserves
3 Required reserves
4 Monetary base 4
40.29
40.93
142.2
41.98
43.13
153.7
38.44
39.58
159.8
39.17
40.73
160.7
38.44
39.58
159.8
38.71
39.56
160.1
38.45
39.57
160.6
39.25
39.87
161.3
38.91
40.10
162.2
38.58
40.55
163.6
38.80
40.50
163.8
39.43
40.76
165.0
616.1
428.7
644.5
451.2
701.8
485.6
694.3
475.4
701.8
485.6
703.8
517.5
704.3
523.4
703.4
524.7
711.2
531.1
715.0
538.1
720.8
545.6
728.3
553.8
185.1
2.2
191.5
1.8
196.0
1.9
198.1
2.2
196.0
1.9
184.1
2.3
178.8
2.1
176.7
2.0
177.4
2.8
174.7
2.2
173.3
1.9
172.3
2.2
158.9
159.6
161.7
162.7
163.3
165.5
5 Member bank deposits subject to reserve
requirements 5
6 Time and savings
Demand
7
Private
8
U.S. government
Not seasonally adjusted
9 Monetary base 4
10 Member bank deposits subject to reserve
requirements 5
11 Time and savings
Demand
12 Private
13 U.S. government
144.6
156.2
162.5
162.5
161.0
624.0
652.7
710.3
694.6
710.3
712.6
701.5
702.9
713.5
710.0
719.7
727.8
429.6
452.1
486.5
493.0
505.0
520.6
524.9
527.8
531.6
538.1
545.0
552.7
191.9
2.5
198.6
2.0
203.2
2.1
199.6
1.9
203.3
2.1
189.9
2.1
174.5
2.0
173.0
2.1
178.9
3.0
169.8
2.1
172.2
2.5
173.1
2.0
1. Reserves of depository institutions series reflect actual reserve requirement
percentages with no adjustment to eliminate the effect of changes in Regulations
D and M. Before Nov. 13, 1980, the date of implementation of the Monetary
Control'Act, only the reserves of commercial banks that were members of the
Federal Reserve System were included in the series. Since that date the series
include the reserves of all depository institutions. In conjunction with the implementation of the act, required reserves of member banks were reduced about $4.3
billion and required reserves of other depository institutions were increased about
$1.4 billion. Effective Oct. 11, 1979, an 8 percentage point marginal reserve requirement was imposed on "Managed Liabilities." This action raised required
reserves about $320 million. Effective Mar. 12, 1980, the 8 percentage point marginal reserve requirement was raised to 10 percentage points. In addition the base
upon which the marginal reserve requirement was calculated was reduced. This
action increased required reserves about $1.7 million in the week ending Apr. 2,
1980. Effective May 29, 1980, the marginal reserve requirement was reduced from
10 to 5 percentage points and the base upon which the marginal reserve requirement
was calculated was raised. This action reduced required reserves about $980 million
in the week ending June 18, 1980. Effective July 24, 1980, the 5 percent marginal
reserve requirement on managed liabilities and the 2 percent supplementary reserve
requirement against large time deposits were removed. These actions reduced
required reserves about $3.2 billion.
161.5
2. Reserve measures for November reflect increases in required reserves associated with the reduction of weekend avoidance activities of a few large banks.
The reduction in these activities lead to essentially a one-time increase in the
average level of required reserves that need to be held for a given level of deposits
entering the money supply. In November, this increase in required reserves is
estimated at $550 million to $600 million.
3. Reserve balances with Federal Reserve Banks plus vault cash at institutions
with required reserve balances plus vault cash equal to required reserves at other
institutions.
4. Includes reserve balances at Federal Reserve Banks in the current week plus
vault cash held two weeks earlier used to satisfy reserve requirements at all
depository institutions plus currency outside the U.S. Treasury, Federal Reserve
Banks, the vaults of depository institutions, and surplus vault cash at depository
institutions.
5. Includes total time and savings deposits and net demand deposits as defined
by Regulation D. Private demand deposits include all demand deposits except
those due to the U.S. government, less cash items in process of collection and
demand balances due from domestic commercial banks.
NOTE. Latest monthly and weekly figures are available from the Board's H.3(502)
statistical release. Back data and estimates of the impact on required reserves and
changes in reserve requirements are available from the Banking Section, Division
of Research and Statistics.
Monetary Aggregates
1.23
L O A N S A N D SECURITIES All Commercial Banks'
Billions of dollars; averages of Wednesday figures
1981
1981
1978
Dec.
1980
Dec.
1979
Dec.
1978
Dec.
June
1 Total loans and securities2
2 U.S. Treasury securities
3 Other securities
4 Total loans and leases2
5 Commercial and industrial loans
6 Real estate loans
7 Loans to individuals
8 Security loans
9 Loans to nonbank financial institutions ..
10
Agricultural loans
11
Lease financing receivables
12 All other loans
MEMO:
Total loans and securities plus loans sold 2 ' 9 .
29
14 Total loans plus loans sold '
9
15 Total loans sold to affiliates
16 Commercial and industrial loans plus loans
sold9
17 Commercial and industrial loans sold 9 . . .
18 Acceptances held
19 Other commercial and industrial l o a n s . . .
20
To U.S. addressees 12
To non-U.S. addressees
21
22 Loans to foreign banks
June
1.134.64
1,237.2s
1,291.6
1,022.53
1,145.04
1,248.8s
93.3
173.23
746.93
246.I 6
210.5
164.7
19.3
27.18
28.2
7.5
43.63
93.8
191.8
848.94
291.I 4
241.34
184.9
18.6
28.84
31.1
9.3
44.0
110.7
213.9
912.75
324.95
260.65
175.2
17.6
28.75
31.6
10.9
63.3
119.3
219.0
947. V
338.87r
271.6
174.1
20.5
29.3
32.8r
12.2
67.8'
120.4
219.5
951.6
343.8
273.0
174.0
19.5
29.0
33.1
12.3
66.9
94.5
173.93
754.23
247.76
210.9
165.6
20.6
27.68
28.1
7.5
46.23
95.0
192.6
857.44
293.04
241.84
186.0
19.8
29.34
30.9
9.3
47.3
112.1
214.8
922.0s
327.05
261.1s
176.2
18.8
29.2s
31.4
10.9
67.3
1,017.13
1.137.64
10
1,239.9s
l,288.2 r
1,294.2
1,026.23
1,148.04
4 10
s
950.0
2.8
954.3
2.7
757.9
3.7
3
340.87
2.0
10.0
328.8
304.0
24.7
21.8
345.8
2.0
10.2
333.6
308.7
24.9
21.4
249.66-11
1.9"
7.3
240.4
225.9
14.5
23.2
750.6
3.7
3
248.0 6 ' 11
1.9"
6.6
239.5
226.0
13.5
21.5
851.9 3.0 8 ' 10
915.4
2.7
293.14-10
2.0 10
8.2
282.9
264.1
18.8
18.5
326.65
1.8
8.2
316.7
295.2
21.5
23.1
July
Not seasonally adjusted
1.013.43
1. Includes domestically chartered banks; U.S. branches and agencies of foreign
banks, New York investment companies majority owned by foreign banks, and
Edge Act corporations owned by domestically chartered and foreign banks.
2. Excludes loans to commercial banks in the United States.
3. As of Dec. 31, 1978, total loans and securities were reduced by $0.1 billion.
"Other securities" were increased by $1.5 billion and total loans were reduced by
$1.6 billion largely as the result of reclassifications of certain tax-exempt obligations.
Most of the loan reduction was in "all other loans."
4. As of Jan. 3, 1979, as the result of reclassifications, total loans and securities
and total loans were increased by $0.6 billion. Business loans were increased by
$0.4 billion and real estate loans by $0.5 billion. Nonbank financial loans were
reduced by $0.3 billion.
5. Absorption of a nonbank affiliate by a large commercial bank added the
following to February figures: total loans and securities, $1.0 billion; total loans
and leases, $1.0 billion; commercial and industrial loans, $.5 billion; real estate
loans, $.1 billion; nonbank financial, $.1 billion.
6. As of Dec. 31,1978, commercial and industrial loans were reduced $0.1 billion
as a result of reclassifications.
7. An accounting procedure change by one bank reduced commercial and industrial loans by $0.1 billion as of Apr. 1, 1981.
1980
Dec.
1979
Dec.
July
Seasonally adjusted
13
A15
1,285.4
1,289.4
119.7
219.6
950.0
340.67
271.4
173.6
20.6
29.5
33.0'
12.2
69.1r
1,293.1
118.2
219.3
955.5
345.3
273.3
174.4
18.7
29.4
33.5
12.3
68.4
10
1,251.5s
1,292.2
1,295.8
4 10
860.4 '
3.08-10
924.75
2.7
952.9
2.8
958.2
2.7
295.0 4 ' 10
2.0 10
9.1
283.9
264.1
19.8
20.0
328.8s
1.8
8.8
318.2
295.2
23.0
24.8
342.77
2.0
10.0
330.7
306.1
24.6
22.4
347.5
2.0
9.8
335.7
310.9
24.8
22.3
8. As of Dec. 1, 1978, nonbank financial loans were reduced $0.1 billion as the
result of reclassification.
9. Loans sold are those sold outright to a bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a
bank), and nonconsolidated nonbank subsidiaries of the holding company.
10. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million and
commercial and industrial loans sold were reduced $700 million due to corrections
of two banks in New York City.
11. As of Dec. 31, 1978, commercial and industrial loans sold outright were
increased $0.7 billion as the result of reclassifications, but $0.1 billion of this amount
was offset by a balance sheet reduction of $0.1 billion as noted above.
12. United States includes the 50 states and the District of Columbia.
NOTE. Data are prorated averages of Wednesday estimates for domestically
chartered banks, based on weekly reports of a sample of domestically chartered
banks and quarterly reports of all domestically chartered banks. For foreign-related
institutions, data are averages of month-end estimates based on weekly reports
from large agencies and branches and quarterly reports from all agencies, branches,
investment companies, and Edge Act corporations engaged in banking.
A16
1.24
DomesticNonfinancialStatistics • September 1981
MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1
Monthly averages, billions of dollars
December outstanding
Outstanding in 1980 and 1981
Source
1977
1
2
Total nondeposit funds
Seasonally adjusted 2
Not seasonally adjusted
Federal funds, RPs, and other borrowings from
3
Seasonally adjusted
Not seasonally adjusted
4
5 Net balances due to foreign-related institutions.
not seasonally adjusted
6 Loans sold to affiliates, not seasonally
adjusted 4 - 5
1978
1979
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
61.5
60.1
91.2
90.2
121.1
119.8
116.9
120.1
120.4
119.9
124.5
122.0
122.0
121.2
117.0
116.7
111.2
111.8
117.6
122.0
119.7
120.4
118.2
118.9
58.4
57.0
80.7
79.7
90.0
88.7
105.4
108.6
109.5
109.0
113.5
111.0
110.9
110.2
110.7
110.5
109.4
109.0
106.7
111.0
111.8
112.6
110.7
111.5
-1.5
6.8
28.1
8.9
8.2
8.2
8.3
3.5
-0.9
8.2
5.0
4.8
4.7
3.7
3.0
2.6
2.7
2.8
2.8
2.8
2.7
2.8
2.8
2.7
-12.5
21.1
8.6
-10.2
24.9
14.7
6.5
22.8
29.3
-14.2
37.3
23.1
-14.7
37.5
22.8
-16.2
37.5
21.2
-14.7
36.4
21.7
-16.9
38.9
22.0
-21.3
43.1
21.8
-13.6
43.6
30.0
-14.6
42.7
28.0
-14.7
45.2
30.5
10.9
10.7
21.7
17.0
14.3
31.3
21.6
28.9
50.5
23.1
31.0
54.1
22.9
32.5
55.4
24.4
31.5
55.9
22.9
31.8
54.7
20.5
31.9
52.3
20.4
33.8
54.1
21.8
34.9
56.7
19.6
35.5
55.1
19.5
33.7
53.2
36.0
35.1
44.8
43.6
49.2
47.9
58.8
60.9
63.4
61.7
68.7
65.0
67.0
65.2
67.1
65.8
67.0
65.6
64.4
67.7
71.0 r
70.6 r
69.5
69.1
4.4
5.1
8.7
10.3
8.9
9.7
8.1
6.7
8.4
9.0
6.9
8.0
8.2
8.1
11.7
10.3
12.3
12.1
14.2
12.3 r
10.9'
12.4 r
11.9
10.8
162.0
165.4
213.0
217.9
227.1
232.8
254.9
257.9
265.8
272.4
277.0
282.0
282.5
287.0
281.1
285.9
284.3
283.7
303.6'
298.4 r
312.8
305.0
MEMO
7 Domestically chartered banks net positions with
own foreign branches, not seasonally
adjusted**
8
Gross due from balances
9
Gross due to balances
10 Foreign-related institutions net positions with
directly related institutions, not seasonally
adjusted 7
11 Gross due from balances
12 Gross due to balances
13,
14
15
16
17
18
Security RP borrowings
Seasonally adjusted®
Not seasonally adjusted
U.S. Treasury demand balances 9
Seasonally adjusted
Not seasonally adjusted
Time deposits, $100,000 or more 10
Seasonally adjusted
Not seasonally adjusted
1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks. New
York investment companies majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal funds, RPs, and other borrowings from
nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. Includes averages of Wednesday data for domestically chartered banks and averages
of current and previous month-end data for foreign-related institutions.
3. Other borrowings are borrowings on any instrument, such as a promissory
note or due bill, given for the purpose of borrowing money for the banking business.
This includes borrowings from Federal Reserve Banks and from foreign banks,
term federal funds, overdrawn due from bank balances, loan RPs, and participations in pooled loans. Includes averages of daily figures for member banks and
averages of current and previous month-end data for foreign-related institutions.
4. Loans initially booked by the bank and later sold to affiliates that are still
held by affiliates. Averages of Wednesday data.
294.8
293.6
5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to
corrections of two New York City banks.
6. Averages of daily figures for member and nonmember banks. Before October
1980 nonmember banks were interpolated from quarterly call report data.
7. Includes averages of current and previous month-end data until August 1979;
beginning September 1979 averages of daily data.
8. Based on daily average data reported by 122 large banks beginning February
1980 and 46 banks before February 1980.
9. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
10. Averages of Wednesday figures.
NOTE. Movement of federal funds, RPs, and other borrowings from nonbanks
(lines 3 and 4) is based on fluctuations in security RP borrowings (lines 13 and 14)
and borrowings from unaffiliated foreign sources (not shown) after October 1980.
Commercial Banks
1.25
ASSETS A N D LIABILITIES OF C O M M E R C I A L B A N K I N G INSTITUTIONS
A17
Last-Wednesday-of-Month Series
Billions of dollars except for number of banks
1980
Jan.
Feb.
1,177.1
851.4
281.5
569.9
111.2
214.6
1,166.0
840.2
277.6
562.6
112.0
213.8
1,167.0
839.0
276.3
562.7
113.7
214.3
194.2
19.9
28.2
63.0
83.0
159.3
18.7
25.2
54.9
60.5
165.9
18.6
30.4
54.6
62.3
Oct.
Nov.
Dec.
1,134.8
821.6
269.0
552.6
104.4
208.9
1,150.8
832.8
275.7
557.1
107.1
210.9
155.9
18.3
31.7
47.2
58.8
175.6
16.9
30.4
56.1
72.2
Apr.
May
June
1,169.5
840.6
277.5
563.1
112.9
216.0
1.187.8
855.4
285.4
570.1
115.8
216.6
1,194.6
862.4
287.9
574.5
114.9
217.3
167.9
17.8
31.8
55.1
63.3
181.8
18.8
38.3
57.3
67.4
180.3
19.5
25.2
62.0
73.6
Mar.
July
Aug.
1,205.3
872.2
293.1
579.1
116.1
216.9
1,213.2
879.2
295.8
583.4
115.8
218.2
1,220.6
88( .8
299.0
587.9
114.0
219.8
169.8
19.1
25.4
60.7
64.6
161.1
19.6
27.0
56.8
57.7
173.2
20.2
25.4
66.0
61.6
DOMESTICALLY CHARTERED
COMMERCIAL BANKS'
1 Loans and securities, excluding
interbank
2 Loans, excluding interbank
Commercial and industrial
3
4
Other
5 U.S. Treasury securities
6 Other securities
7 Cash assets, total
8
Currency and coin
9
Reserves with Federal Reserve Banks
10 Balances with depository institutions .
11 Cash items in process of collection . . .
12 Other assets2
151.3
151.3
165.6
155.8
160.1
163.4
167.7
158.8
168.6
158.8
164.2
13 Total assets/total liabilities and capital. ..
1,442.1
1,477.7
1,537.0
1,481.0
1,493.0
1,500.9
1,537.3
1,533.7
1,543.7
1,533.2
1,557.9
14 Deposits
15 Demand
16 Savings
17 Time
1,092.9
375.7
210.9
506.2
1,126.2
393.0
209.5
523.7
1,187.4
432.2
201.3
553.8
1,128.7
351.1
211.9
565.7
1.132.0
345.5
214.3
572.3
1,136.5
345.3
220.5
570.7
1,151.7
356.8
222.7
572.2
1,170.3
360.7
220.9
588.7
1,165.9
350.9
220.7
594.3
1,160.8
333.6
219.8
607.3
1,182.2
342.5
218.0
621.7
161.7
74.7
112.7
157.3
78.1
116.1
156.4
79.0
114.2
156.4
76.7
119.3
163.2
80.3
117.5
163.8
80.6
120.0
179.5
81.8
124.3
155.7
82.3
125.4
169.3
81.8
126.7
159.3
86.3
126.7
163.7
89 .8
122.1
11.5
14,760
4.4
14.692
9.5
14,693
9.5
14,689
8.5
14,696
10.2
14,701
16.9
14,713
5.5
14,719
17.4
14,719
7.2
14,719
6.9
14,720
18 Borrowings
19 Other liabilities
20 Residual (assets less liabilities)
MEMO:
21 U.S. Treasury note balances included in
borrowing
22 Number of banks
ALL COMMERCIAL BANKING
INSTITUTIONS3
23 Loans and securities, excluding
interbank
24 Loans, excluding interbank
25
Commercial and industrial
26
Other
27 U.S. Treasury securities
28 Other securities
29 Cash assets, total
30 Currency and coin
31
Reserves with Federal Reserve Banks
32
Balances with depository institutions .
33
Cash items in process of collection . . .
34 Other assets2
1,262.4
932.5
330.6
601.9
113.6
216.3
1,253.8
920.9
329.3
591.6
115.2
217.7
218.6
20.0
29.0
85.0
84.7
193.6
17.8
32.7
77.9
65.3
222.7
225.5
3 5 T o t a l a s s e t s / t o t a l liabilities a n d c a p i t a l . . .
1,703.7
1,673.0
36 Deposits
37
Demand
38 Savings
39 Time
1,239.9
453.6
201.6
584.7
1,190.6
367.4
220.7
602.5
210.4
135.5
117.9
223.3
137.2
121.9
9.5
15,120
10.2
15,147
40 Borrowings
41 Other liabilities
42 Residual (assets less liabilities)
n a.
MEMO:
43 U.S. Treasury note balances included in
borrowing
44 Number of banks
1. Domestically chartered commercial banks include all commercial banks in the
United States except branches of foreign banks; included are member and nonmember banks, stock savings banks, and nondeposit trust companies.
2. Other assets include loans to U.S. commercial banks.
3. Commercial banking institutions include domestically chartered commercial
banks, branches and agencies of foreign banks. Edge Act and Agreement corporations, and New York State foreign investment corporations.
NOTE. Figures are partly estimated. They include all bank-premises subsidiaries
and other significant majority-owned domestic subsidiaries. Data for domestically
chartered commercial banks are for the last Wednesday of the month; data for
other banking institutions are for the last day of the quarter.
A18
1.26
DomesticNonfinancialStatistics • September 1981
A L L L A R G E W E E K L Y REPORTING COMMERCIAL BANKS with Domestic Assets of $750 Million or More on
December 31, 1977, Assets and Liabilities
Millions of dollars, Wednesday figures
1981
Account
July 1
1 Cash items in process of collection
2 Demand deposits due from banks in the United
States
3 All other cash and due from depository institutions. .
4 Total loans and securities
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Securities
U.S. Treasury securities
Trading account
Investment account, by maturity
One year or less
Over one through five years
Over five years
Other securities
Trading account
Investment account
U.S. government agencies
States and political subdivision, by maturity . . . .
One year or less
Over one year
Other bonds, corporate stocks and securities....
July 8
July 15
July 22
July 29 p
Aug. 5P
Aug. 12 P
Aug. 19 p
Aug. 26p
65,919
53.555
57.633
51.889
46.575
57.990
52.659
54,425
50.456
22.805
31.724
21,661
35,642
22.527
35.310
20.012
39.148
14.663
33,356
20.313
33.889
21.019
33.554
21.538
35,673
19.971
32,251
584,064
580,247
582,512
571,438
573,257
586,619
579,474
577,500
579,192
40.612
6,793
33.819
10.550
19,466
3.802
78,930
4.650
74.280
16.399
55,177
7.034
48.142
2,704
41,839
8,148
33,691
10.382
19,473
3.836
77.651
3.421
74.230
16,345
55.166
7.077
48.089
2.719
41.068
7.411
33.656
10.296
19.462
3.899
77.311
3.389
73.922
16,115
55.148
7.049
48.099
2.659
40,244
6,843
33,401
9,975
19.508
3.918
77,282
3,252
74,030
16.069
55,302
7.095
48,208
2.659
40.657
7.247
33,410
10.019
19.553
3.837
77.475
3.246
74,229
16,154
55.385
7.051
48.334
2,690
41.294
8,072
33.221
10.012
19.413
3.797
78,527
4.167
74,360
16.149
55.459
7.266
48.194
2,751
40,475
7,356
33.119
10,022
19,324
3,773
77,746
3,273
74,473
16.159
55,506
7,266
48,240
2,808
40.431
8,337
32,095
9,205
19,132
3.758
77,376
2.911
74,465
16,128
55,538
7.194
48,344
2.800
39,806
7,795
32,010
9.170
19,140
3.701
77.745
2,904
74,841
16.345
55,641
7,235
48,407
2,854
Loans
19 Federal funds sold 1
20 To commercial banks
21
To nonbank brokers and dealers in securities
22 To others
23 Other loans, gross
24
Commercial and industrial
Bankers acceptances and commercial paper
25
All other
26
U.S. addressees
27
28
Non-U.S. addressees
29 Real estate
To individuals for personal expenditures
30
To financial institutions
31
Commercial banks in the United States
Banks in foreign countries
32
33
Sales finance, personal finance companies, etc . .
34
Other financial institutions
35
To nonbank brokers and dealers in securities
36 To others for purchasing and carrying securities2 . .
37 To finance agricultural production
38
All other
39 LESS: Unearned income
Loan loss reserve
40
41 Other loans, net
42 Lease financing receivables
43 All other assets
28.703
20.157
6.695
1.851
447.847
182.490
5.720
176,769
169,088
7,682
117.749
71.493
30.822
23.298
5,598
1,926
442.003
181.538
5.015
176,523
168.956
7,567
117.800
71.277
33,974
26.696
5,192
2.085
442.276
180.769
4.822
175.946
168.319
7.627
118.246
71.249
25.780
18,385
5,371
2,024
440.284
180.515
4.165
176.349
168,810
7.540
118.480
71.352
26,331
19.172
5,261
1,898
440,965
180.468
4.397
176,071
168,520
7.551
118.692
71,688
31,529
24,138
5,520
1,872
447,462
184,219
4.468
179,750
172.294
7,456
118.940
71.857
28,236
20,682
5,639
1,915
445,237
183,556
3,930
179,626
172,226
7.400
119,380
71.864
27,831
20.073
5.732
2,026
444,102
182,784
3,354
179.430
172.042
7,388
119,718
72,035
28,241
19,742
6.519
1.980
445.680
182,859
3,265
179,594
172.180
7,414
119,902
72,304
6.247
9.385
10.545
16.225
9,555
2,545
5,946
15.666
5,878
6.150
435.819
10.270
92.981
5.767
9.360
9.909
16,138
7.116
2,535
5.990
14.572
5,918
6.150
429.935
10,362
91.514
6.210
9.538
9,737
15,915
7.337
2.541
5,982
14.752
5,948
6.169
430,158
10.395
89.860
6.039
8.767
9,864
15,930
6,311
2,539
5.981
14,506
5.953
6.199
428.132
10.381
87.113
5.547
9.216
10,085
15.855
6,617
2,543
5,986
14,269
5,980
6,191
428.794
10.410
87,335
6,087
9.119
10.166
16,380
7,253
2,617
6,034
14,788
5.934
6.259
435.269
10,411
88.638
5,901
9,036
10,238
16,340
5,584
2.591
6,045
14,701
5,953
6,267
433,016
10,422
88,522
6,226
9.122
10.128
16,259
4.943
2,594
6,020
14.272
5.963
6,277
431.862
10.449
88,866
6.520
9.432
10.132
16,257
5,067
2.580
5,977
14,650
5,995
6,284
433,400
10,475
89,043
44 Total assets
807,763
792,982
798,237
779,981
765,596
797,860
785,651
788,452
781,388
209,696
737
140,436
5.179
1.082
41.213
8.392
1.619
11,038
337.390
78.250
74,373
191,354
598
129.640
4.504
1,971
36,132
8,450
1.760
8.299
337.754
78.708
74.910
203.375
694
133,780
4,853
3.005
41.194
9.389
1.906
8,554
337.954
77,942
74,153
182,928
492
124.508
4,146
1.860
34,908
7.637
1,305
8,072
339,331
77,305
73.631
173,400
535
122,031
4,164
1.784
27.912
8.693
1,304
6.975
341.228
76,373
72.728
196.528
686
132.306
4.617
3.200
36.314
8.822
1,329
9,253
343.767
77,553
73,923
187,520
571
128.077
3.856
2,121
34.659
8.580
1,878
7,778
345,178
76.709
73,074
187,973
570
123,367
4,244
3,023
38,939
9,001
1,698
7,130
345.301
76,187
72,592
181,631
584
122,471
4,116
1,870
34,598
9,149
1,680
7,163
346,841
75,500
71,935
3.203
656
18
259.139
225.852
18.703
268
8,121
3.192
586
20
259.046
225,636
18,729
279
8.040
3.150
618
21
260,012
227,735
18.515
268
8.032
3.141
509
23
262,027
229.468
18.786
278
8.041
3,112
509
22
264,855
232.103
18.878
281
8,304
3,088
519
22
266,214
233,805
18.757
273
8,247
3,066
547
23
268,468
235,663
19,087
272
8,308
3.019
553
23
269.114
235,919
19,413
256
8,312
3,029
513
23
271,342
237,718
19,674
246
8,407
6.195
6.362
5,462
5.454
5,289
5.132
5,138
5.215
5,296
3.128
9.542
128.273
2.145
5.141
138.916
2.521
4,000
132,288
4.147
5.133
127,679
653
4,902
123,438
1.100
1,541
133.272
502
1,814
128,903
881
2,163
128,739
299
3,946
123,740
45
46
47
48
49
5(1
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
Deposits
Demand deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for
profit
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and
banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-Ioan notes
All other liabilities for borrowed money 3
Other liabilities and subordinated notes and
debentures
70 Total liabilities
71 Residual (total assets minus total liabilities)4
67,549
65.304
65.948
68,698
69,881
69.059
69,124
70,958
72,488
755,578
740,615
746,086
727,916
713,503
745,267
733,040
736,015
728,946
52.184
52.367
52.151
52,064
52,094
52,593
52,611
52,437
52.441
1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and brokers and dealers.
3. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of SI billion or
more on Dec. 31, 1977. see table 1.13.
FRASER
Digitized for
4. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
Weekly Reporting Banks
1.27
A19
L A R G E W E E K L Y REPORTING C O M M E R C I A L B A N K S with Domestic Assets of $1 Billion or More on
December 31, 1977, Assets and Liabilities
Millions of dollars, Wednesday figures
1981
Account
July 1
1 Cash items in process of collection
7 Demand deposits due from banks in the United
States
3 All other cash and due from depository institutions..
4 Total loans and securities
Securities
5 U.S. Treasury securities
6
Trading account
Investment account, by maturity
7
8
One year or less
9
Over one through five years
in
Over five years
n Other securities
1?
Trading account
Investment account
n
14
U.S. government agencies
15
States and political subdivision, by maturity . . . .
16
One year or less
17
Over one year
Other bonds, corporate stocks and securities....
18
July 8
July 15
July 22
July 29 p
Aug. 5p
Aug. 12 p
Aug. 19p
Aug. 26P
62,670
50,798
54,629
49,201
44,096
54,861
49,759
51,480
47,'779
22,078
29,583
20,973
33,707
21,788
33,031
19,409
36,791
14,001
31,132
19,666
32,010
20,362
31,446
20,852
33,298
19,356
29,973
545,810
541,355
544,196
533,416
535,259
546,079
540,495
539,210
540,823
37,206
6,728
30,478
9,657
17,380
3,441
72,641
4,558
68,082
15,211
50,344
6,299
44,046
2,527
38,447
8,073
30,375
9,460
17,438
3,477
71,379
3,364
68,016
15,135
50,338
6,333
44,006
2,542
37,669
7,342
30,327
9,371
17,417
3,539
71,056
3,327
67,728
14,920
50,325
6,305
44,020
2,484
36,846
6,766
30,080
9,057
17,464
3,558
71,005
3,197
67,808
14,869
50,456
6,334
44,121
2,484
37,266
7,158
30,108
9,125
17,505
3,478
71,159
3,174
67,985
14,942
50,528
6,290
44,238
2,515
37,873
7,983
29,890
9,108
17,353
3,429
72,222
4,107
68,116
14,942
50,598
6,494
44,103
2,576
37,087
7,278
29,808
9,133
17,255
3,420
71,442
3,216
68,226
14,949
50,645
6,497
44,148
2,632
37,033
8,244
28,789
8,329
17,052
3,407
71,089
2,857
68,232
14,936
50,666
6,432
44,234
2,629
36,412
7,718
28,694
8,284
17,059
3,351
71,432
2,843
68,589
15,151
50,754
6,465
44,289
2,684
Loans
19 Federal funds sold 1
20
To commercial banks
71
To nonbank brokers and dealers in securities
77
To others
23 Other loans, gross
74
Commercial and industrial
Bankers acceptances and commercial paper
25
76
All other
77
U.S. addressees
28
Non-U.S. addressees
Real estate
?9
30
To individuals for personal expenditures
To financial institutions
31
Commercial banks in the United States
37
Banks in foreign countries
33
Sales finance, personal finance companies, etc . .
34
Other financial institutions
35
To nonbank brokers and dealers in securities
36
To others for purchasing and carrying securities 2 . .
37
To finance agricultural production
38
All other
39 LESS: Unearned income
40
Loan loss reserve
41 Other loans, net
47 Lease financing receivables
43 All other assets
25,542
17,519
6,203
1,820
421,439
173,520
5,529
167,992
160,378
7,614
111,169
62,658
26,826
19,879
5,054
1,893
415,755
172,580
4,830
167,750
160,252
7,498
111,211
62,457
30,599
23,895
4,653
2,051
415,966
171,767
4,634
167,133
159,576
7,557
111,634
62,452
22,696
15,803
4,894
1,998
413,994
171,517
3,977
167,540
160,072
7,467
111,876
62,554
23,358
16,670
4,816
1,872
414,621
171,471
4,224
167,246
159,768
7,479
112,071
62,858
26,166
19,280
5,044
1,842
420,988
175,154
4,299
170,854
163,480
7,375
112,329
62,964
24,427
17,418
5,124
1,884
418,729
174,486
3,761
170,725
163,480
7,323
112,737
62,967
24,753
17,520
5,263
1,970
417,542
173,751
3,176
170,574
163,264
7,310
113,024
63,114
25,041
17,221
5,876
1,944
419,184
173,861
3,106
170,754
163,418
7,336
113,234
63,364
6,095
9,261
10,406
15,843
9,491
2,312
5,798
14,886
5,240
5,777
410.422
9,973
90,207
5,628
9,290
9,769
15,764
7,045
2,299
5,839
13,873
5,278
5,775
404,702
10,066
88,825
6,064
9,465
9,589
15,546
7,267
2,306
5,829
14,046
5,304
5,790
404,872
10,100
87,296
5,927
8,674
9,718
15,551
6,239
2,312
5,825
13,800
5,304
5,821
402,869
10,090
84,553
5,434
9,132
9,938
15,469
6,542
2.317
5,830
13,557
5,333
5,812
403,476
10,119
84,724
5,961
9,043
10,007
15,997
7,183
2,387
5,880
14,083
5,294
5,875
409,818
10,119
85,914
5,786
8,967
10,085
15,938
5,515
2,364
5,891
13,992
5,307
5,883
407,539
10,131
85,790
6,098
9,061
9,977
15,842
4,869
2,368
2,865
13,575
5,314
5,893
406,335
10,157
86,153
6,398
9,370
9,981
15,816
4,998
2,353
5,824
13,985
5,346
5,901
407,938
10,184
86,274
44 Total assets
760,323
745,723
751,040
733,460
719,332
748,649
737,984
741,151
734,389
197,066
703
130,740
4,565
936
39,534
8,312
1,615
10,660
315,351
72,308
68,726
179,506
570
120,355
4,056
1,804
34,611
8,369
1,752
7,989
315,620
72,701
69,190
191,310
673
124,433
4,334
2,673
39,730
9,316
1,898
8,252
315,813
71,903
68,474
171,721
473
115,640
3,644
1,678
33,614
7,563
1,295
7,812
317,281
71,400
68,004
162,262
516
113,338
3,554
1,604
26,626
8,612
1,303
6,707
319,194
70,544
67,175
182,870
660
121,829
4,135
2,968
34,748
8,758
1,328
8,444
321,511
71,626
68,272
175,505
550
118,919
3,414
1,948
33,257
8,519
1,877
7,021
322,877
70,856
67,494
176,396
551
114,327
3,727
2,773
37,546
8,929
1,697
6,846
322,944
70,357
67,039
170,432
562
113,604
3,605
1,687
33,326
9,068
1,679
6,899
324,471
69,740
66,443
2,950
614
18
243,042
211,737
17,103
254
7,753
2,947
544
20
242,920
211,550
17,070
265
7,672
2,907
501
21
243,909
213,680
16,855
254
7,657
2,899
473
23
245,882
215,376
17,123
264
7,664
2,874
472
22
248,650
217,985
17,178
270
7,926
2,854
479
22
249,884
219,573
17,049
263
7,868
2,832
507
23
252,021
221,336
17,346
262
7,940
2,787
508
23
252,587
221,557
17,632
246
7,937
2,795
479
23
254,731
223,270
17,896
236
8,033
6,195
6,362
5,462
5,454
5,289
5,132
5,138
5,215
5,296
3,106
8,830
121,277
2,041
4,728
131,230
2,357
3,683
124,764
3,977
4,731
120,000
596
4,520
115,892
1,001
1,394
125,388
459
1,659
120,930
667
1,958
120,961
275
3,650
115,840
45
46
47
48
49
50
51
57
53
54
55
56
57
58
59
60
61
67
63
64
65
66
67
68
69
Deposits
Demand deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for
profit
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and
banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
;
All other liabilities for borrowed money 3
Other liabilities and subordinated notes and
debentures
70 Total liabilities
71 Residual (total assets minus total liabilities) 4
65,902
63,677
64,393
67,110
68,213
67,355
67,417
69,267
70,752
711,532
696,803
702,320
684,821
670,676
699,519
688,848
692,193
685,420
48,791
48,920
48,720
48,640
48,656
49,130
49,136
48,958
48,969
1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and brokers and dealers.
3. Includes federal funds purchased and securities sold under agreement to repurchase; for information on these liabilities at banks with assets of $1 billion or
on Dec. 31, 1977, see table 1.13.
for more
FRASER
Digitized
4. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
A20
1.28
DomesticNonfinancialStatistics • September 1981
L A R G E W E E K L Y REPORTING C O M M E R C I A L B A N K S IN N E W Y O R K CITY Assets and Liabilities
Millions of dollars, Wednesday figures
1981
July 1
1 Cash items in process of collection
2 Demand deposits due from banks in the United
States
3 All other cash and due from depository institutions
4 Total loans and securities
5
6
7
8
9
10
11
12
13
14
15
16
17
18
1
Securities
U.S. Treasury securities 2
Trading account 2
Investment account, by maturity
One year or less
Over one through five years
Over five years
Other securities 2
Trading account 2
Investment account
U.S. government agencies
States and political subdivision, by maturity . .
One year or less
Over one year
Other bonds, corporate stocks and securities..
Loans
19 Federal funds sold 3
20
To commercial banks
21
To nonbank brokers and dealers in securities
22
To others
23 Other loans, gross
24
Commercial and industrial
25
Bankers acceptances and commercial p a p e r . . .
26
All other
27
U.S. addressees
28
Non-U.S. addressees
29
Real estate
30
To individuals for personal expenditures
31 To financial institutions
Commercial banks in the United States
32
Banks in foreign countries
33
Sales finance, personal finance companies, etc.
34
Other financial institutions
35
To nonbank brokers and dealers in securities
36
To others for purchasing and carrying securities 4
37
To finance agricultural production
38
All other
39 LESS: Unearned income
40
Loan loss reserve
41 Other loans, net
44 Total assets
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
Deposits
Demand deposits
Mutual savings banks
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Banks in foreign countries
Foreign governments and official institutions
Certinecfand officers' checks
Time and savings deposits
Savings
Individuals and nonprofit organizations
Partnerships and corporations operated for
profit
Domestic governmental units
All other
Time
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Commercial banks in the United States
Foreign governments, official institutions, and
banks
Liabilities for borrowed money
Borrowings from Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money 6
Other liabilities and subordinated notes and
debentures
70 Total liabilities
71 Residual (total assets minus total liabilities) 7
1.
2.
3.
4.
July 22
July 29 p
Aug. 5p
Aug. 12?
Aug. 19 P
19,107
15,256
20,568
18,644
19,945
15,542
8,164
15,708
9,819
16,332
9,361
14,362
8,774
8,775
6,529
13,765
10,079
14,862
6,735
15,205
8,511
134,677
131,792
135,942
129,734
129,689
134,354
132,139
130,575
9,014
2,306
5,897
9,085
2,350
5,888
847
9,078
2,336
5,864
877
8,936
2,153
5,906
877
8,956
2,210
5,868
878
9,011
2,400
5,733
8,922
2,386
5,657
878
8,391
1,926
5,638
827
14,238
2,551
11,074
1,630
9,444
613
14,240
2,535
14,152
2,516
11,060
1,675
9,385
576
14,192
2,491
11,123
1,718
9,404
578
14,193
2,510
11,096
1,690
9,406
586
14,364
2,528
11,153
1,769
9,384
682
14,335
2,490
11,151
1,775
9,376
693
14,283
2,479
11,124
1,694
9,430
680
7,508
3,274
3,249
948
107,145
53,556
1,898
51,658
49,040
7,458
3,801
2,589
1,068
104,237
53,544
1,648
51,896
49,377
2,519
16,082
10,011
11,331
7,749
2,428
1,154
104,639
53,037
1,621
51,416
48,866
2,551
16,234
10,041
7,615
3.948
2,529
1,137
102,252
52,222
1,172
51,050
48,507
2,542
16,286
10,107
6,952
3,490
2,535
927
102,859
52,231
1,312
50,919
48,362
2,557
16,382
10,153
4,598
2,849
940
105,876
54,285
1,450
52,836
50,341
2,495
16,466
10,200
7,848
4,014
2,907
927
104,321
53,713
1,277
52,437
49,985
2,452
16,587
10,260
7,993
4,156
2,758
1,019
103,270
53,412
954
52,459
50,023
2,436
16,700
10,303
39,233
1,479
4,849
4,156
4,620
4,294
586
389
4,226
1,304
1,923
101,010
2,245
37,887
1,814
5,222
4,066
4,471
4,544
601
371
4,238
1,319
1,940
101,380
2,260
36,055
1,570
4,396
4,201
4,448
3,739
582
374
4,325
1,311
1.949
98,991
2,259
35,588
1,171
4,972
4,254
4,420
3,910
609
365
4,391
1,324
1,946
99,589
2,263
36,210
1,488
4,737
4,331
4,619
4,329
610
373
4,436
1,319
1,965
102,592
2,250
36,356
1,258
4,572
4,287
4,641
3,215
581
364
4,842
1,330
1,956
101,035
2,229
35,580
1,548
4,454
4,093
4,672
2,889
573
356
4,269
1,337
1.96S
99,968
2,245
37,656
225,414
217,322
220,758
209,823
198,723
217,372
210,190
214,137
75,928
387
36,461
522
178
24,998
6,453
5,647
60,483
9,437
9,060
66,315
278
31,025
436
551
22,149
6,566
1,404
3,905
60,257
9,438
9,064
74,152
395
32,654
483
725
27,020
7,423
1,622
3,829
60,213
9,358
8,999
63,888
238
30,307
412
506
21.844
5,841
1,019
3,721
61,082
9,243
8,895
54,922
259
28,909
344
380
14,519
6,938
1,036
2,536
61,396
9,117
8,766
66,726
348
33,249
433
744
19,860
6,918
1,053
4,121
61,459
9,227
64,014
258
31,005
362
651
20,120
6,926
1,597
3,095
61,528
9,204
8,821
66,159
278
29,050
323
748
24,277
7,081
1,392
3,011
61,099
9,142
8,783
255
120
3
51,045
43,850
1,503
83
2,729
258
112
2
50,819
43,533
1,618
83
2,662
253
103
2
50,855
43,949
1,676
79
2,639
258
87
2
51,839
44.845
1,702
87
2,690
261
88
2
52,279
45,336
1,711
98
2,718
256
90
2
52,232
45,394
1,691
100
2,698
251
103
2
52,325
45,532
1,695
89
2,652
250
108
2
51,957
44,959
1,817
90
2,648
2,923
2,511
2,515
2,416
2,349
2,356
2,444
360
1,255
47,908
1,283
1,081
41,894
1,003
1,300
40,012
1,340
37,938
259
44,706
477
40,987
411
41,239
811
2,618
16,061
10,000
1,662
4,845
4,663
4,652
6,082
576
390
4,656
1,291
1,936
103,917
2,244
1,281
1,625
2,369
43,548
11,101
1,673
9,427
604
25,156
24,850
25,908
26,354
27,068
27,757
26,787
28,921
209,108
200,946
204,530
193,638
182,665
200,906
193,794
197,829
16,306
16,377
16,228
16,185
16,057
16,466
16,396
16,308
Excludes trading account securities.
Not available due to confidentiality.
Includes securities purchased under agreements to resell.
Other than financial institutions and brokers and dealers.
July 15
25,553
42 L e a s e f i n a n c i n g r e c e i v a b l e s
43 All other assets 5
July 8
5. Includes trading account securities.
6. Includes federal funds purchased and securities sold under agreements to
repurchase
7. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
Weekly Reporting Banks
1.29
L A R G E W E E K L Y REPORTING C O M M E R C I A L B A N K S
Millions of dollars, Wednesday figures
A21
Balance Sheet Memoranda
1981
Account
July 15
July 22
July 29P
Aug. 5 p
Aug. 12 p Aug.
19 P Aug. 26p
July 1
July 8
1 Total loans (gross) and securities adjusted 1
2 Total loans (gross) adjusted 1
3 Demand deposits adjusted 2
569.688
450,147
101,482
563,250
443,760
99,696
561,722
443,343
101,542
559,166
441,640
94,271
560,709
442,577
97,128
568,587
448,766
99,024
565,111
446,890
98,080
563,441
445,634
91,585
565,210
447,659
94,707
4 Time deposits in accounts of $100,000 or more
5
Negotiable CDs
6
Other time deposits
170,407
122.735
47,672
170,325
122,345
47,980
170,859
123,533
47,326
172,484
124,423
48,061
174,846
126,604
48,242
175,669
127,198
48,470
177,213
128,432
48,781
177,539
128,472
49,067
179,582
130,174
49,408
2,798
2,133
665
2,673
2,016
657
2,711
2,062
649
2,693
2,035
658
2,650
1,971
679
2,642
1,965
677
2,616
1,940
676
2,631
1,959
671
2,656
1,973
683
10 Total loans (gross) and securities adjusted 1
11 Total loans (gross) adjusted 1
12 Demand deposits adjusted 2
533,214
423,367
93,926
526,901
417,074
92,293
525,331
416,606
94,278
522,810
414,960
87,227
524,300
415,875
89,935
532,008
421,912
90,293
528,481
419,952
90,541
526,800
418,678
84,597
528,451
420,607
87,640
13 Time deposits in accounts of $100,000 or more
14 Negotiable CDs
15 Other time deposits
161,348
116,565
44,782
161,250
116,146
45,104
161,823
117,354
44,470
163,448
118,249
45,199
165,777
120,417
45,360
166,514
120,983
45,531
167,985
122,187
45,798
168,249
122,177
46,072
170,220
123,813
46.407
2,729
2,077
652
2,604
1,960
644
2,643
2,007
636
2.618
1,964
654
2,574
1,907
667
2,568
1,903
665
2,544
1,882
662
2,560
1,902
658
2,580
1,914
666
132,968
109,716
25,199
129,739
106,414
23,745
129,637
106.407
25.600
127,475
104,348
22,430
128,298
105,150
24,766
131,551
108,176
25,554
130,154
106,897
24,599
128,173
105,499
21,189
128,494
105,868
23,138
40,196
29,827
10,369
39,919
29,395
10,524
39,882
29,640
10.242
40,822
30,486
10,336
41,192
30,880
10,312
41,014
30,520
10,494
41,000
30,460
10,540
40,597
30,039
10,557
41,454
30,859
10,594
BANKS WITH ASSETS OF $ 7 5 0 MILLION OR MORE
7 Loans sold outright to affiliates 3
8
Commercial and industrial
9
Other
BANKS WITH ASSETS OF $ 1 BILLION OR MORE
16 Loans sold outright to affiliates 3
17 Commercial and industrial
18 Other
BANKS IN NEW YORK CITY
19 Total loans (gross) and securities adjusted 1 - 4
20 Total loans (gross) adjusted 1
21 Demand deposits adjusted 2
22 Time deposits in accounts of $100,000 or more
23
Negotiable CDs
24
Other time deposits
1. Exclusive of loans and federal funds transactions with domestic commercial
banks.
2. All demand deposits except U.S. government and domestic banks less cash
items in process of collection.
3. Loans sold are those sold outright to a bank's own foreign branches, nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a
bank), and nonconsolidated nonbank subsidiaries of the holding company,
4. Excludes trading account securities.
A22
1.291
DomesticNonfinancialStatistics • September 1981
L A R G E W E E K L Y REPORTING B R A N C H E S A N D A G E N C I E S OF F O R E I G N B A N K S
Millions of dollars, Wednesday figures
Account
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Cash and due from depository institutions
Total loans and securities
U.S. Treasury securities
Other securities
Federal funds sold1
To commercial banks in U.S
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addresses
Non-U.S. addresses
To financial institutions
Commercial banks in U.S
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities ..
All other
Other assets (claims on nonrelated
parties)
Net due from related institutions
Total assets
23 Deposits or credit balances2
24
Credit balances
25
Demand deposits
26
Individuals, partnerships,
corporations
27
Other
28 Total time and savings
29
Individuals, partnerships,
corporations
30
Other
31 Borrowings 3
32
Federal funds purchased 4
33
From commercial banks in U.S
34
From others
35
Other liabilities for borrowed money ..
36
To commercial banks in U.S
37
To others
38 Other liabilities to nonrelated parties
39 Net due to related institutions
40 Total liabilities
July 1
July 8
July 15
July 22
July 29
Aug. 5
Assets and Liabilities
Aug. 12
Aug. 19
Aug. 26
23,820
62,826
1,867
952
5,046
4,785
261
54,962
26,306
24,360
61,268
1,869
949
4,443
4,169
273
54,007
26,026
27,126
61,054
1,768
982
4,261
3,877
384
54,043
26,164
24,362
62,000
1,703
988
4,884
4,805
80
54,424
26,575
18,899
61,751
1,753
1,006
4,578
4,422
156
54,413
26,815
24,136
61,280
1,725
995
3,412
3,227
186
55,147
27,451
22,323
62,144
1,766
997
4,396
4,148
248
54,985
27,432
24,958
62,005
1,757
987
4,333
4,272
60
54,929
27,501
23,560
62,564
1,824
987
5,137
4,606
531
54,616
27,220
3,549
22,757
13,331
9,530
19,479
11,653
7,443
383
1,262
7,915
3,563
22,463
12,818
9,645
19,411
11,656
7,405
350
816
7,752
3,518
22,646
13,017
9,629
19,351
11,488
7,531
332
790
7,737
3,480
23,095
13,338
9,757
19,468
11,553
7,584
331
604
7,776
3,425
23,390
13,575
9,814
19,483
11,741
7,394
348
525
7,590
3,344
24,107
14,111
9,997
19,234
11,516
7,411
307
730
7,731
3,352
24,080
14,170
9,909
19,227
11,692
7,223
312
564
7,762
3,326
24,176
14,173
10,002
19,321
11,743
7,273
305
570
7,535
3,310
23,910
14,009
9,900
19,148
11,518
7,297
333
563
7,685
9,788
9,447
105,881
10,312
9,098
105,038
10,132
9,334
107,646
9,863
9,126
105,351
10,072
9,280
100,002
10,315
9,601
105,332
10,222
9,316
104,005
10,365
9,217
106,546
10,686
9,286
106,096
42,140
1,895
18,995
42,138
1,959
18,844
43,575
2,425
20,057
41,443
2,062
17,904
36,880
1,722
13,345
42,099
2,243
18,152
40,669
2,614
16,075
42,904
2,646
18,823
42,527
2,622
18,166
1,206
17,789
21,250
1,066
17,778
21,335
971
19,086
21,093
944
16,960
21,477
852
12,493
21,813
956
17,196
21,704
990
15,085
21,979
998
17,825
21,436
975
17,191
21,739
17,482
3,768
30,250
3,962
3,208
754
26,287
22,018
4,269
10,076
23,414
105,881
17,518
3,817
30,124
3,799
3,049
750
26,324
21,841
4,483
10,431
22,345
105,038
17,344
3,749
31,882
5,831
5,032
799
26,051
21,763
4,288
10,218
21,970
107,646
17,779
3,698
29,243
3,665
2,772
893
25,577
21,437
4,140
9,909
24,756
105,351
18,163
3,650
29,201
3,269
2,544
725
25,932
21,833
4,099
10,247
23,674
100,002
18,169
3,535
30,985
5,254
4,421
833
25,640
21,801
3,839
10,733
21,605
105,332
18,459
3,520
30,230
4,513
3,776
737
25,716
22,136
3,580
10,308
22,799
104,005
17,800
3,636
30,268
4,502
3,730
772
25,766
21,890
3,876
10,444
22,928
106,546
18,097
3,642
29,939
4,315
3,493
822
25,624
21,756
3,868
10,682
22,948
106,096
46,388
43,570
45,443
42,624
45.689
42,939
45,643
42,951
45,588
42,828
46,537
43,817
46,304
43,541
45,990
43,246
46,440
43,621
MEMO
41 Total loans (gross) and securities
adjusted'
42 Total loans (gross) adjusted 5
1. Includes securities purchased under agreements to resell.
2. Balances due to other than directly related institutions.
3. Borrowings from other than directly related institutions.
4. Includes securities sold under agreements to repurchase.
5. Excludes loans and federal funds transactions with commercial banks in U.S.
Domestic Financial Statistics • September 1981
1.29
LARGE WEEKLY REPORTING COMMERCIAL BANKS
Millions of dollars
Domestic Classified Commercial and Industrial Loans
Net change during
Outstanding
Apr. 29
May 27
June 24
1981
1981
1981
Industry classification
A23
July 29
Aug. 26p
Ql
June
Q2
July
Aug.?
1 Durable goods manufacturing
24,570
24,623
25,274
25,370
25,629
-217
620
651
96
259
2 Nondurable goods manufacturing
3 Food, liquor, and tobacco
19,845
4,409
20,250
4,577
20,618
4,404
20,175
4,095
22,478
4,392
-1,229
-834
1,217
-176
368
-173
-443
-309
2,303
297
4,469
3,298
4,036
3,633
4,603
3,440
3,957
3,672
4,920
3,412
4,049
3,832
4,994
3,546
3,791
3,749
5,068
3,587
5,500
3,931
200
-724
-100
230
569
430
211
182
317
-28
92
160
74
134
-258
-83
74
40
1,709
182
4
5
6
7
Textiles, apparel, and leather
Petroleum refining
Chemicals and rubber
Other nondurable goods
8 Mining (including crude petroleum
and natural gas)
16,752
17,197
18,194
19,658
20,019
-695
2,444
998
1,464
361
9 Trade
10 Commodity dealers.
11 Other wholesale
12 Retail
26,778
2,337
12,244
12,196
26,306
1,865
12,023
12,418
26,107
1,499
12,087
12,520
26,462
1,601
12,405
12,456
26,399
1,659
12,368
12,372
-729
-613
-467
352
490
-451
212
728
-199
-366
65
102
355
102
318
-64
-63
58
-37
-84
13 Transportation, communication,
and other public utilities
14 Transportation
15 Communication
16 Other public utilities
20,338
8,156
3,275
8,906
20,403
8,343
3,462
8,597
20,824
8,196
3,542
9,086
21,027
8,251
3,545
9,231
21,417
8,273
3,589
9,555
-1,518
-377
-174
-967
851
89
381
381
421
-147
79
489
203
55
3
145
390
22
44
324
17 Construction
18 Services
19 All other 2
6,446
24,074
15,404
6,988
24,421
15,008
6,984
24,546
15,177
7,108
24,524
15,444
7,132
24,771
15,572
218
555
-878
758
934
-4
-4
124
169
124
-22
266
24
248
128
154,208
155,195
157,724
159,768
163,418
-4,492
7,311
2,529
2,044
3,650
80,333
82,411
83,402
84,354
86,103
-2,492
4,104
991
952
1,749
20 Total domestic loans
21 MEMO: Term loans (original maturity
more than 1 year) included in domestic loans
1. Adjustment bank amounts represent accumulated adjustments originally made
to offset the cumulative effects of mergers. These adjustment amounts should be
added to outstanding data for any date in the year to establish comparability with
any date in the subsequent year. Changes shown have been adjusted for these
amounts.
2. Includes commercial and industrial loans at a few banks with assets of $1
billion or more that do not classify their loans.
NOTE. New series. The 134 large weekly reporting commercial banks with domestic assets of $1 billion or more as of Dec. 31,1977, are included in this series.
The revised series is on a last-Wednesday-of-the-month basis. Partly estimated
historical data are available from the Banking Section, Division of Research and
Statistics, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
A24
1.31
DomesticNonfinancialStatistics • September 1981
GROSS D E M A N D DEPOSITS of Individuals, Partnerships, and Corporations'
Billions of dollars, estimated daily-average balances
Commercial banks
Type of holder
19792
1975
Dec.
1976
Dec.
1977
Dec.
Dec.
1
2
3
4
5
6
1980
1981
1978
Dec.
Mar.
June
Sept.
Dec.
Mar. 3
All holders—Individuals, partnerships, and
corporations
236.9
250.1
274.4
294.6
302.2
288.4
288.6
302.0
315.5
280.8
Financial business
Nonfinancial business
Consumer
Foreign
Other
20.1
125.1
78.0
2.4
11.3
22.3
130.2
82.6
2.7
12.4
25.0
142.9
91.0
2.5
12.9
27.8
152.7
97.4
2.7
14.1
27.1
157.7
99.2
3.1
15.1
28.4
144.9
97.6
3.1
14.4
27.7
145.3
97.9
3.3
14.4
29.6
151.9
101.8
3.2
15.5
29.8
162.3
102.4
3.3
17.2
30.8
144.3
86.7
3.4
15.6
Weekly reporting banks
19794
1975
Dec.
1976
Dec.
1977
Dec.
Dec.
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
1981
Mar.
June
Sept.
Dec.
Mar. 3
124.4
128.5
139.1
147.0
139.3
133.6
133.9
140.6
147.4
133.2
15.6
69.9
29.9
2.3
6.6
17.5
69.7
31.7
2.6
7.1
18.5
76.3
34.6
2.4
7.4
19.8
79.0
38.2
2.5
7.5
20.1
74.1
34.3
3.0
7.8
20.1
69.1
34.2
3.0
7.2
20.2
69.2
33.9
3.1
7.5
21.2
72.4
36.0
3.1
7.9
21.8
78.3
35.6
3.1
8.6
21.9
69.8
30.6
3.2
7.7
1. Figures include cash items in process of collection. Estimates of gross deposits
are based on reports supplied by a sample of commercial banks. Types of depositors
in each category are described in the June 1971 BULLETIN, P. 466.
2. Beginning with the March 1979 survey, the demand deposit ownership survey
sample was reduced to 232 banks from 349 banks, and the estimation procedure
was modified slightly. To aid in comparing estimates based on the old and new
reporting sample, the following estimates in billions of dollars for December 1978
have been constructed using the new smaller sample; financial business, 27.0;
nonfinancial business, 146.9; consumer. 98.3; foreign, 2.8; and other. 15.1.
3. Demand deposit ownership data for March 1981 are subject to greater than
normal errors reflecting unusual reporting difficulties associated with funds shifted
to NOW accounts authorized at year-end 1980. For the household category, the
$15.7 billion decline in demand deposits at all commercial banks between December
1980 and March 1981 has an estimated standard error of $4.8 billion.
1980
1978
Dec.
4. After the end of 1978 the large weekly reporting bank panel was changed to
170 large commercial banks, each of which had total assets in domestic offices
exceeding $750 million as of Dec. 31, 1977. See "Announcements," p. 408 in the
May 1978 BULLETIN. Beginning in March 1979, demand deposit ownership estimates for these large banks are constructed quarterly on the basis of 97 sample
banks and are not comparable with earlier data. The following estimates in billions
of dollars for December 1978 have been constructed for the new large-bank panel;
financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5;
other, 6.8.
Deposits and Commercial Paper
1.32
A25
C O M M E R C I A L P A P E R A N D B A N K E R S D O L L A R ACCEPTANCES O U T S T A N D I N G
Millions of dollars, end of period
Instrument
1977
Dec.
1978
Dec.
1981
19791
Dec.
1980
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Commercial paper (seasonally adjusted)
1 All issuers
65,051
83,438
112,154r
123,703r
126,793r
128,252r
130,548r
132,052r
139,224'
145,652'
150,965
8,796
2.132
12,181
3,521
16,722r
2,874
18,186r
3,561
18,023r
3.670
18,805r
3.742
20,489 r
4,163
22,029 r
4,437
22,819'
4,800
24,442'
4.750
24,497
5,267
40,574
7,102
15,681
51,647
12,314
19,610
64,748
17,598
30,684
67,888
22,382
37,629
68,956
22,570
39,814
68,936
22,331
40,511
69,461
21,604
40,598
69.537
22,858
40,486
71,842
23,880
44.563
74,952
24,107
46,258
79,571
26,104
46,877
2
2
3
4
5
6
Financial companies
Dealer-placed paper3
Total
Bank-related
Directly placed paper4
Total
Bank-related
Nonfinancial companies 5
Bankers dollar acceptances (not seasonally adjusted)
7 Total
Holder
Accepting banks
Own bills
Bills bought
Federal Reserve Banks
Own account
Foreign correspondents
Others
Basis
14 Imports into United States
15 Exports from United States
16 All other
8
9
10
11
12
13
25,450
33,700
45,321
54,744
54,465
58,084
60,089
62,320
60,551
63,427
63,721
10,434
8,915
1,519
8,579
7,653
927
9,865
8,327
1,538
10,564
8,963
1,601
9.371
7.951
1.420
9,911
8,770
1,141
10,117
8,735
1,382
10,781
9,626
1,155
10,132
9,049
1,082
11,595
10,207
1,389
10,505
9,437
1,068
954
362
13,700
1
664
24,456
704
1,382
33,370
776
1,791
41,614
0
1.771
43,323
0
1,399
46,779
298
1,372
48,303
0
1,383
50,156
0
1,255
49,164
0
1.272
50,560
453
1,459
51,303
6,378
5,863
13,209
8,574
7,586
17,540
10,270
9,640
25,411
11,776
12,712
30,257
11,903
12.816
29,746
12,976
12,979
32,129
13,292
13,451
33,347
13,634
13,368
35,319
12,775
13,057
34,768
12,996
13,388
37,043
13,059
13,296
37,365
1. A change in reporting instructions results in offsetting shifts in the dealerplaced and directly placed financial company paper in October 1979.
2. Institutions engaged primarily in activities such as, but not limited to, commercial, savings, and mortgage banking; sales, personal, and mortgage financing;
factoring, finance leasing, and other business lending; insurance underwriting; and
other investment activities.
3. Includes all financial company paper sold by dealers in the open market.
4. As reported by financial companies that place their paper directly with investors.
5. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
A26
1.33
DomesticNonfinancialStatistics • September 1981
PRIME R A T E C H A R G E D BY B A N K S on Short-Term Business Loans
Percent per annum
Effective date
Rate
1980—Dec. 16
19
21.00
21.50
1981—Jan.
20.50
20.00
19.50
19.00
18.00
17.50
2.
9 .
3.
23.
Mar. 10
17
Feb.
1.34
22.
17.00
17.50
18.00
19.00
19.50
20.00
20.50
3
8.
20.50
1981—Apr.
2
24
30.
May 4.
11.
19.
June
July
Average
rate
Month
Effective Date
1980—Apr.
May,
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
20.00
19.77
16.57
12.63
11.48
11.12
12.23
13.79
16.06
20.35
Month
1981—Jan. .
Feb..
Mar.
Api.
May
June
July
Aug.
TERMS OF L E N D I N G A T C O M M E R C I A L B A N K S Survey of Loans Made, May 4-9, 1981
Size of loan (in thousands of dollars)
Item
All
sizes
1,000
1-24
25-49
100-499
50-99
500-999
and over
SHORT-TERM COMMERCIAL AND
INDUSTRIAL LOANS
1
2
3
4
5
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1
16,840,794
164,452
2.0
19.99
19.00-20.85
853,190
121,015
3.1
19.45
17.85-21.15
481,971
14,694
3.8
19.87
18.83-21.74
767,519
12,003
3.5
19.10
17.00-21.00
2,118,788
12,686
3.2
19.93
18.95-21.49
1,041,775
1,706
3.3
19.58
18.39-20.75
11,577,551
2,346
1.4
20.14
19.36-20.85
49.0
52.8
21.6
30.1
24.6
13.4
41.2
33.1
12.6
43.2
48.1
21.4
64.7
49.1
20.7
60.7
56.7
29.5
47.2
56.4
22.0
Percentage of amount of loans
6 With floating rate
7 Made under commitment
8 With no stated maturity
LONG-TERM COMMERCIAL AND
INDUSTRIAL LOANS
9
10
11
12
13
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1
3,633,958
21,441
50.6
19.25
19.00-20.00
280,677
17,936
35.4
19.22
17.87-21.34
450,944
2,725
53.1
19.34
18.68-20.16
175,691
277
43.S
19.48
19.00-20.74
2,726,645
503
52.2
19.23
1
9.00-19.76
78.6
77.2
49.5
25.7
68.4
34.6
87.1
78.0
82.7
89.5
Percentage of amount of loans
14 With floating rate
15 Made under commitment
CONSTRUCTION AND
LAND DEVELOPMENT LOANS
16
17
18
19
20
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1
21
22
23
24
Percentage of amount of loans
With floating rate
Secured by real estate
Made under commitment
With no stated maturity
874,542
13,956
13.2
19.09
18.00-21.94
74,010
7,690
3.3
19.83
18.00-21.91
81,222
2,363
4.1
19.06
15.00-21.74
169,763
2,333
17.7
16.10
8.25-18.40
223,133
1,332
12.0
20.74
20.40-22.54
326,415
237
16.1
19.35
19.00-21.55
66.3
93.1
64.8
10.5
58.5
93.3
63.5
20.6
42.3
85.5
62.3
5.2
19.4
97.9
19.8
4.7
83.2
92.4
80.9
4.0
87.0
93.0
78.1
17.0
32.3
13.1
54.7
64.1
2.9
33.0
85.5
3.3
11.2
12.5
3.0
84.5
24.0
10.1
65.9
27.7
25.2
47.2
Type of construction
25 1- to 4-family
26 Multifamily
27 Nonresidential
All
sizes
28
29
30
31
32
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) .
Interquartile range 1
33
34
35
36
37
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Other
250
25-49
50-99
100-249
and over
1,419,090
77,593
6.8
17.88
16.53-19.10
188,183
50,065
6.8
17.50
16.64-18.68
236,302
15,850
6.4
17.59
16.64-18.81
220,646
6,450
6.6
17.67
16.64-18.50
180,935
2,740
6.3
17.78
16.64-18.50
281.187
1,957
7.7
17.97
16.53-18.77
311,838
531
6.8
18.46
16.10-20.75
18.44
17.98
17.73
17.61
17.68
17.98
17.28
17.46
17.53
17.30
18.43
18.42
17.36
17.62
17.25
17.91
17.39
17.65
17.63
17.58
18.07
18.75
17.88
17.01
17.22
18.49
17.64
18.27
(2)
17.35
18.93
(2)
17.85
(2)
19.73
1. Interest rate range that covers the middle 50 percent of the total dollar amount
of loans made.
2. Fewer than 10 sample loans.
10-24
1-9
NOTE. For more detail, see the Board's E.2(111) statistical release,
Securities Markets
1.35
A27
INTEREST R A T E S Money and Capital Markets
Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted.
1981, week ending
1981
Instrument
1978
1979
1980
May
June
July
Aug.
July 31
Aug. 7
Aug. 14
Aug. 21
Aug. 28
MONEY MARKET RATES
1 Federal funds 1 , 2
Commercial paper 3 ' 4
2
1-month
3-month
3
4
6-month
Finance paper, directly placed 3 , 4
5
1-month
6
3-month
6-month
7
Bankers acceptances 4,5
8
3-month
9
6-month
Certificates of deposit, secondary market 6
10
1-month
11
3-month
12
6-month
13 Eurodollar deposits, 3-month 2
U.S. Treasury bills 4
Secondary market 7
14
3-month
15
6-month
16
1-year
Auction average 8
17
3-month
18
6-month
19
7.93
11.19
13.36
18.52
19.10
19.04
17.82
18.54
18.25
18.29
18.19
17.41
7.76
7.94
7.99
10.86
10.97
10.91
12.76
12.66
12.29
17.91
17.56
16.66
17.34
16.32
15.22
17.70
17.00
16.09
17.58
17.23
16.62
17.36
17.02
16.28
17.89
17.37
16.70
17.59
17.16
16.46
17.74
17.37
16.72
17.32
17.16
16.67
7.73
7.80
7.78
10.78
10.47
10.25
12.44
11.49
11.28
17.47
15.56
14.97
16.66
14.58
14.13
17.29
15.21
14.47
17.37
15.88
15.32
17.08
15.68
15.03
17.62
15.73
15.14
17.32
15.83
15.20
17.58
15.95
15.32
17.09
15.99
15.59
8.11
n.a.
11.04
n.a.
12.78
n.a.
17.56
16.26
16.27
15.02
17.10
16.15
17.22
16.56
17.20
16.45
17.33
16.59
17.17
16.42
17.28
16.57
17.17
16.67
7.88
8.22
8.61
8.78
11.03
11.22
11.44
11.96
12.91
13.07
12.99
14.00
18.16
18.27
17.66
19.06
17.55
16.90
16.09
17.86
17.98
17.76
17.40
18.49
17.91
17.96
17.98
18.79
17.85
17.82
17.73
18.91
18.02
18.04
17.99
18.84
17.93
17.88
17.80
18.78
18.02
18.03
18.07
18.73
17.84
18.02
18.16
18.84
7.19
7.58
7.74
10.07
10.06
9.75
11.43
11.37
10.89
16.30
15.29
14.29
14.73
14.09
13.22
14.95
14.74
13.91
15.51
15.52
14.70
15.07
15.00
14.25
15.43
15.40
14.63
15.25
15.28
14.43
15.63
15.58
14.70
15.71
15.76
14.99
7.221
7.572
7.678
10.041
10.017
9.817
11.506
11.374
10.748
16.295
15.334
14.623
14.557
13.947
13.146
14.699
14.402
13.735
15.612
15.548
14.542
15.065
14.790
15.674
15.571
15.235
15.122
14.542
15.705
15.644
15.832
15.854
16.56
16.09
16.74
16.28
15.88
15.45
15.15
14.90
14.51
14.14
16.45
15.97
15.90
15.67
15.13
14.83
14.61
14.14
13.83
15.98
15.51
15.13
14.83
14.34
14.00
17.07
16.71
16.50
16.39
16.04
15.69
15.32
14.99
14.57
CAPITAL MARKET RATES
20
21
??
23
24
25
26
27
28
U.S. Treasury notes and bonds 9
Constant maturities 10
1-year
2-year
2-'/2-year 11
3-year
5-year
7-year
10-year
20-year
30-year
8.34
8.34
10.67
10.12
12.05
11.77
16.20
15.46
14.86
14.51
15.72
15.35
16.72
16.28
8.29
8.32
8.36
8.41
8.48
8.49
9.71
9.52
9.48
9.44
9.33
9.29
11.55
11.48
11.43
11.46
11.39
11.30
15.08
14.63
14.30
14.10
13.82
13.60
14.29
13.95
13.67
13.47
13.20
12.96
15.15
14.79
14.49
14.28
13.92
13.59
16.00
15.56
15.22
14.94
14.52
14.17
16.13
15.77
15.80
15.55
15.13
14.80
14.59
14.23
13.87
29
Composite 1 2
Over 10 years (long-term)
7.89
8.74
10.81
12.96
12.39
13.05
13.61
13.30
13.58
13.25
13.46
14.02
5.52
6.27
6.03
5.92
6.73
6.52
7.85
9.01
8.59
9.90
11.28
10.78
10.21
11.55
11.14
11.10
12.78
12.26
10.50
11.70
11.44
11.10
12.50
11.63
11.10
12.50
11.94
11.10
12.60
12.49
11.10
13.50
12.97
9.07
8.73
8.92
9.12
9.45
10.12
9.63
9.94
10.20
10.69
15.60
15.42
8.96
8.97
8.25
5.28
State and local notes and bonds
Moody's series 13
30
Aaa
31
Baa
32
Bond Buyer series 14
33
34
35
36
37
38
39
Corporate bonds
Seasoned issues 15
All industries
Aaa
Aa
A
Baa
Aaa utility bonds 1 6
Recently offered issues
MEMO: Dividend/price ratio
40
Preferred stocks
41
Common stocks
11.94
14.32
13.75
14.38
14.89
14.62
14.88
15.43
15.95
14.41
15.08
15.80
14.79
15.36
16.17
15.42
15.76
16.34
15.35
14.61
14.99
15.55
16.25
14.82
12.50
12.89
13.67
15.35
15.62
16.31
15.25
15.59
16.21
15.51
14.78
15.32
15.69
16.25
15.87
15.21
15.65
16.07
16.54
10.03
10.02
12.74
12.70
15.81
15.48
14.76
14.81
16.30
15.73
16.82
16.78
16.55
16.68
16.63
16.80
17.15
9.07
5.46
10.57
5.25
12.03
4.98
12.23
5.03
12.43
5.18
12.63
5.16
12.57
5.17
12.52
5.06
12.43
5.03
12.63
5.15
12.94
5.38
12.75
15.15
14.76
15.18
15.53
17
1. Weekly and monthly figures are averages of all calendar days, where the rate
for a weekend or holiday is taken to be the rate prevailing on the preceding business
day. The daily rate is the average of the rates on a given day weighted by the
volume of transactions at these rates.
2. Weekly figures are statement week averages—that is, averages for the week
ending Wednesday.
3. Unweighted average of offering rates quoted by at least five dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150179 days for finance paper.
4. Yields are quoted on a bank-discount basis, rather than an investment yield
basis (which would give a higher figure).
5. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
6. Unweighted average of offered rates quoted by at least five dealers early in
the day.
7. Unweighted average of closing bid rates auoted by at least five dealers.
8. Rates are recorded in the week in which bills are issued.
9. Yields (not compounded) are based on closing bid prices quoted by at least
five dealers.
10. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.
9.86
11.21
10.67
11. Each weekly figure is calculated on a biweekly basis and is the average of
five business days ending on the Monday following the calendar week. The biweekly
rate is used to determine the maximum interest rate payable in the following twoweek period on small saver certificates. (See table 1.16.)
12. Unweighted averages for all outstanding notes and bonds neither due nor
callable in less than 10 years, including several very low yielding "flower" bonds.
13. General obligations only, based on figures for Thursday, from Moody's
Investors Service.
14. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
15. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
16. Compilation of the Federal Reserve. Issues included are long-term (20 years
or more). New-issue yields are based on quotations on date of offering; those on
recently offered issues (included only for first 4 weeks after termination of underwriter price restrictions), on Friday close-of-business quotations.
17. Standard and Poor's corporate series. Preferred stock ratio based on a sample
of ten issues: four public utilities, four industrials, one financial, and one transportation. Common stock ratios on the 500 stocks in the price index.
A28
1.36
DomesticNonfinancialStatistics • September 1981
STOCK M A R K E T
Selected Statistics
1981
Indicator
1979
1978
1980
Jan.
Feb.
Mar.
Apr.
June
May
July
Aug.
Prices and trading (averages of daily figures)
Common stock prices
1 New York Stock Exchange (Dec. 31, 1965
= 50)
2
Industrial
3
Transportation
Utility
4
Finance
5
6 Standard & Poor's Corporation (1941^13
= 10)>
7 American Stock Exchange (Aug. 31, 1973
= 100)
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
68.06
78.64
60.52
37.35
64.28
76.24
89.23
74.43
38.53
70.04
73.52
85.74
72.76
37.59
68.48
76.46
89.39
77.09
37.78
72.82
77.60
90.57
80.63
38.34
74.59
76.28
88.78
76.78
38.27
74.65
76.80
88.63
76.71
39.23
79.79
75.24
86.72
73.27
40.22
73.76
53.76
58.30
43.25
39.23
56.74
55.67
61.82
45.20
36.46
58.65
96.11
107.94
118.71
132.97
128.40
133.19
134.43
131.73
132.28
129.13
129.63
144.56
186.56
300.94
344.21
338.28
347.07
363.09
365.52
369.64
364.33
364.60
28,591
3,622
32,233
4,182
44,867
6,377
45.500
6,024
42,963
4,816
53,387
5,682
54,124
6,339
45,272
5,650
50,517
6,096
43,930
4,374
44,489
5,137
74.98
86.64
74.42
38.90
74.97
Customer financing (end-of-period balances, in millions of dollars)
10 Regulated margin credit at brokersdealers2
11,035
11,619
14,721
14,242
14,171
14,243
14,869
14,951
15,126
15,134
11 Margin stock 3
12 Convertible bonds
13 Subscription issues
10,830
205
1
11,450
167
2
14,500
219
2
14,020
221
1
13,950
220
1
14,020
222
1
14,630
238
1
14,700
251
1
14,870
254
2
14,870
263
1
835
2,510
1,105
4,060
2,105
6,070
2,065
5,655
2,225
5,700
2,340
6,530
2,270
6,440
2,345
6,150
2,350
6,650
2,670
6,470
Free credit balances at brokers4
14 Margin-account
15 Cash-account
|
f
n a.
I
Margin-account debt at brokers (percentage distribution, end of period)
16 Total
17
18
19
20
21
22
By equity class (in percent)5
Under 40
40-49
50-59
60-69
70-79
80 or more
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
33.0
28.0
18.0
10.0
6.0
5.0
16.0
29.0
27.0
14.0
8.0
7.0
14.0
30.0
25.0
14.0
9.0
8.0
20.0
30.0
22.0
13.0
8.0
7.0
20.0
31.0
21.0
13.0
8.0
7.0
16.0
28.0
26.0
14.0
9.0
8.0
20.8
26.8
23.7
12.6
8.1
8.0
21.3
25.3
25.3
12.7
8.0
8.0
25.0
29.0
21.0
11.0
7.0
7.0
25.0
29.0
22.0
11.0
7.0
6.0
23,700
24,460
n.a.
|
1
Special miscellaneous-account balances at brokers (end of period)
23 Total balances (millions of dollars) 6
Distribution by equity status (percent)
24 Net credit status
Debt status, equity of
25
60 percent or more
26
Less than 60 percent
21,861
13,092
16,150
21,690
21,686
41.3
44.2
47.8
47.0
48.6
45.1
13.6
47.0
8.8
44.4
7.7
43.9
9.1
43.1
8.3
22,548
22,748
23,457
50.9
49.3
50.2
53.2
53.8
41.5
7.6
41.7
9.0
41.0
8.8
38.4
8.4
37.9
8.3
t
1
n.a.
1
\
Margin requirements (percent of market value and effective date) 7
27 Margin stocks
28 Convertible bonds
29 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Margin credit includes all credit extended to purchase or carry stocks or related
equity instruments and secured at least in part by stock. Credit extended is endof-month data for member firms of the New York Stock Exchange.
In addition to assigning a current loan value to margin stock generally. Regulations T and U permit special loan values for convertible bonds and stock acquired
through exercise of subscription rights.
3. A distribution of this total by equity class is shown on lines 17-22.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
Jan. 3, 1974
50
50
50
5. Each customer's equity in his collateral (market value of collateral less net
debit balance) is expressed as a percentage of current collateral values.
6. Balances that may be used by customers as the margin deposit required for
additional purchases. Balances may arise as transfers based on loan values of other
collateral in the customer's margin account or deposits of cash (usually sales proceeds) occur.
7. Regulations G, T, and U of the Federal Reserve Board of Governors, prescribed in accordance with the Securities Exchange Act of 1934, limit the amount
of credit to purchase and carry margin stocks that may be extended on securities
as collateral by prescribing a maximum loan value, which is a specified percentage
of the market value of the collateral at the time the credit is extended. Margin
requirements are the difference between the market value (100 percent) and the
maximum loan value. The term "margin stocks" is defined in the corresponding
regulation.
Thrift Institutions
1.37
A29
SAVINGS INSTITUTIONS Selected Assets and Liabilities
Millions of dollars, end of period
1981
1980
1978
1979
Oct.
May
June
634,405 636,859 639,827
644,603
646,704 648,743
505,309 507,152 509,525
58,401
58,461
56,886
70,695
71,246
72,416
511,754
59,045
73,804
514,803 516,278
57,446
57,616
75,019
74,285
631,228
634,405 636,859 639,827
644,603
646,704
503,365 510,959 512,946
62,067
64,491 62,938
45,505
47,045
46,629
17,446
16,309
15,910
8,783
8,120
7,833
16,433
12,227
14,104
515,250 518,990 516,071
64,197
62,270
67,704
46,360
49,607
47,310
18,097
16,887
18,097
7,756
7,840
7,840
13,271
16,071
14,946
517,628
70,025
51,064
18,961
7,997
17,089
517,632 514,087
79,345
74,756
53,836
57,098
22,247
20,920
7,733
8,008
16,565
14,756
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
July?
Savings and loan associations
1 Assets
523,542
578,962 617,773 623,939
629,829 631,228
2 Mortgages
3 Cash and investment securities 1
4 Other
432,808 475,688 496,495 499,973 502,812 504,068
56,146 57,302
44,884
46,341
57,572 57,460
69,445 69,700
45,850
56,933 65,132 66,664
5 Liabilities and net worth
523,542
6
7
8
9
10
11
Savings capital
Borrowed money
FHLBB
Other
Loans in process
Other
578,962
617,773 623,939 629,829
430,953 470,004 500,861
55,232
60,727
42,907
31,990 40,441
44,325
10,917
16,562
14,791
10,721
8,853
9,582
9,904
11,506
14,502
648,743
12 Net worth 2
29,057
32,638
33,029
33,221
33,319
33,120
32,981
32,645
32,266
31,864
31,552
31,013
13 MEMO: Mortgage loan commitments outstanding 3
18,911
16,007
19,077
17,979
16,102
15,972
16,279
17,374
18,552
18,740
18,020
17,199
Mutual savings banks 4
158,174
163,405
170,432
171,126
171,564
171,891
172,349
173,232
172,837
173,776
174,387
95,157
7,195
98,908
9,253
99,523
11,382
99,677
11,477
99,865
11,733
99,816
12,199
99,739
12,598
99,719
13,248
99,798
12,756
99,790
13,375
99,993
14,403
4,959
3,333
39,732
3,665
4,131
7,658
2,930
37,086
3,156
4,412
8,622
2,754
39,720
3,592
4,839
8,715
2,736
39,888
3,717
4,916
8,949
2,390
39,282
4,334
5,011
9,000
2,378
39,256
4,133
5,107
9,032
2,376
39,223
4,205
5,177
9,203
2,359
39,236
4,238
5,231
9,262
2,314
39,247
4,172
5,288
9,296
2,328
39,111
4,513
5,364
9,230
2,337
38,418
4,473
5,534
22 Liabilities
158,174
163,405
170,432
171,126
171,564
171,891
172,349
173,232
172,837
173,776
174,387
23
24
25
26
27
28
29
30
142,701
141,170
71,816
69,354
1,531
4,565
10,907
146,006
144,070
61,123
82,947
1,936
5,873
11,525
151,998
149,797
57,651
92,146
2,200
7,117
11,317
152,133
150,109
56.256
93,853
2,042
7,644
11,349
153,501
151,416
53,971
97,445
2,086
6,695
11,368
153,143
151,051
52,737
98,314
2,092
7,426
12,957
153,332
151,346
52,035
99,311
1,986
7,753
13,412
154,805
152,630
53,049
99,581
2,174
7,265
11,163
153,692
151,429
52,331
99,098
2,264
8,103
11,042
153,891
151,658
51,212
100,447
2,232
8,922
10,923
154,926
152,603
51,594
101,009
2,323
8,634
10,827
4,400
3,182
1,817
1,682
1,476
1,316
1,331
1,379
1,614
1,709
1,577
389,924 432,282 470,717 476,294 479,210 482,009
485,033 490,149
493,185
497,276
500,316
21,871 22,246
20,009
0,338 21,078 21,275
5,241
5,351
6,429
4,822
4,888
5,838
6,505
6,571
6,571
6,402
6,428
6,701
9,246
8,785
9,022
9,332
9,353
9,332
198,105 222,332 236,523 239,537 238,059 240,959
162,587 178,371 191,428 191,722 190,693 194,777
39,757 45,095
47,815
47,366 46,182
35,518
106,167 118,421 128,963 129,813 131,080 131,710
11,764
13,007
14,791
14,919
15,033
15,657
40,813 41,411 41,988
30,146 34,825 40,499
31,702 29,449
23,733 27,563 28,863 29,937
22,669
22,775
22,603
6,774
6,807
6,502
6,199
6,809
6,145
9,269
9,292
9,250
241,675 243,996 245,841
195,251 196,514 198,397
46,424
47,482 47,444
132,567 133,230 133,896
16,464
15,869
16,244
42,574
43,231 43,772
30,673
30,609
29,679
22,948
6,787
6,815
9,346
247,437
199,818
47,619
134,492
16,738
44,292
31,369
23,415
7,119
6,876
9,420
248,737
201,402
47,335
135,318
16,966
44,970
30,910
14 Assets
Loans
Mortgage
Other
Securities
U.S. government 5
State and local government
Corporate and other 6
Cash
Other assets
15
16
17
18
19
20
21
Deposits
Regular 7
Ordinary savings
Time and other
Other
Other liabilities
General reserve accounts
MEMO: Mortgage loan commitments outstanding 8
n.a.
Life insurance companies
31 Assets
Securities
Government
United States 9
State and local
Foreign 10
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
32
33
34
35
36
37
38
39
40
41
42
n a.
Credit unions
43 Total assets/liabilities and
capital
62,348
65,854
70,702
71,335
71,709
70,754
71,446
73,214
72,783
73,565
74,041
73,616
44
45
46
47
48
49
50
51
34,760
27,588
50,269
27,687
22,582
53,517
29,802
23,715
35,934
29,920
53,125
28,698
24,426
56,232
35,530
25,702
39,155
31,547
47,221
25,288
21,933
63,957
36,030
27,927
39,428
31,907
47,299
25,273
22,026
64,304
36,183
28,121
39,801
31,908
47,774
25,627
22,147
64,399
36,348
28,051
39,142
31,612
47,309
25,272
22,037
63,874
35,915
27,959
39,636
31,810
47,451
25,376
22,075
64,357
36,236
28,121
40,624
32,590
47,815
25,618
22,197
65,744
36,898
28,846
40,207
32,576
47,994
25,707
22,287
65,495
36,684
28,811
40,648
32,917
48,499
26,038
22,461
65,988
36,967
29,021
40,948
33,093
49,064
26,422
22,642
66,472
37,260
29,212
40,510
33,106
49,507
26,661
22,846
65,854
36,819
29,035
Federal
State
Loans outstanding
Federal
State
Savings
Federal (shares)
State (shares and deposits)
For notes see bottom of page A30.
A30
1.38
DomesticNonfinancialStatistics • September 1981
F E D E R A L FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
Fiscal
year
1978
Fiscal
year
1979
Fiscal
year
1980
1980
HI
U.S. budget
1 Receipts'
2 Outlays 1 , 2
3 Surplus, or deficit( - )
Trust funds
4
5
Federal funds 3
1981
1981
H2
HI
May
June
July
401,997
450,804
-48,807
12,693
-61,532
465,940
493,635
-27,694
18,335
-46,069
520,050
579,613
-59,563
8,791
-67,752
270,864
289,905
-19,041
4,383
-23,418
262,152
310,972
-48,821
-2,551
-46,306
318,899
334,710
-15,811
5,797
-21,608
38,514
54,608
-16,094
3,639
-19,733
70,688
55,619
15,070
3,026
12,045
48,142
58,486
-10,343
-3,506
-6,838
-10,661
302
-13,261
793
-14,549
303
-7,735
-522
-7,552
376
-11,046
-900
-1,943
-342
-1,295
45
-2,429
-348
-59,166
-40,162
-73,808
-27,298
-55,998
-27,757
-18,379
13,820
-13,120
59,106
33,641
70,515
24,435
54,764
33,213
539
572
3,383
-3,023
3,083
-408
6,929
-355
3,648
-3,482
6,345
-6,730
7,964
2,873
-8,328
22,809
-4,969
-15,121
730
5,570
4,168
22,444
16,647
5,797
24,176
6,489
17,687
20,990
4,102
16,888
14,092
3,199
10,893
12,305
3,062
9,243
16,389
2,923
13,466
5,702
2,288
3,414
16,389
2,923
13,466
11,318
2,922
8,396
Off-budget entities (surplus, or deficit
6 Federal Financing Bank outlays
7 Other 4
U.S. budget plus off-budget, including
Federal Financing Bank
8 Surplus, or deficit ( - )
Source or financing
9
Borrowing from the public
10 Cash and monetary assets (decrease, or
increase ( - ) ) '
11 Other 6
MEMO:
12 Treasury operating balance (level, end of
period)
13 Federal Reserve Banks
14 Tax and loan accounts
1. Effective June 1978, earned income credit payments in excess of an individual's tax liability, formerly treated as income tax refunds, are classified as outlays
retroactive to January 1976.
2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was reclassified from an off-budget agency to an on-budget agency in the Department of
Labor.
3. Half-year figures are calculated as a residual (total surplus/deficit less trust
fund surplus/deficit).
4. Includes Postal Service Fund; Rural Electrification and Telephone Revolving
Fund; and Rural Telephone Bank.
5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold
tranche drawing rights; loans to International Monetary Fund; and other cash and
monetary assets.
6. Includes accrued interest payable to the public; allocations of special drawing
rights; deposit funds; miscellaneous liability (including checks outstanding) ana
asset accounts; seignorage; 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," Treasury Bulletin, and the Budget of the United States Government,
Fiscal Year 1981.
NOTES TO TABLE 1.37
1. Holdings of stock of the Federal Home Loan Banks are included in "other
assets."
2. Includes net undistributed income, which is accrued by most, but not all,
associations.
3. Excludes figures for loans in process, which are shown as a liability.
4. The NAMSB reports that, effective April 1979, balance sheet data are not
strictly comparable with previous months. Beginning April 1979, data are reported
on a net-of-valuation-reserves basis. Prior to that date, data were reported on a
gross-of-valuation-reserves basis.
5. Beginning April 1979, includes obligations of U.S. government agencies. Before
that date, this item was included in "Corporate and other."
6. Includes securities of foreign governments and international organizations
and, prior to April 1979, nonguaranteed issues of U.S. government agencies.
7. Excludes checking, club, and school accounts.
8. Commitments outstanding (including loans in process) of banks in New York
State as reported to the Savings Banks Association of the state of New York.
9. Direct and guaranteed obligations. Excludes federal agency issues not guaranteed, which are shown in the table under "Business" securities.
10. Issues of foreign governments and their subdivisions and bonds of the International Bank for Reconstruction and Development.
NOTE. Savings and loan associations: Estimates by the FHLBB for all associations
in the United States. Data are based on monthly reports of federally insured
associations and annual reports of other associations. Even when revised, data for
current and preceding year are subject to further revision.
Mutual savings banks: Estimates of National Association of Mutual Savings
Banks for all savings banks in the United States.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. 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."
Credit unions: Estimates by the National Credit Union Administration for a
group of federal and state-chartered credit unions that account for about 30 percent
of credit union assets. Figures are preliminary and revised annually to incorporate
recent benchmark data.
Federal Finance
1.39
A31
U.S. B U D G E T RECEIPTS A N D OUTLAYS
Millions of dollars
Calendar year
Source or type
Fiscal
year
Fiscal
year
Fiscal
year
1978
1979
1980
1980
1981
1981
HI
H2
HI
May
July
June
RECEIPTS
1
All sources1
401,997
465,955
520,050
270,864
262,152
318,899
38,514
70,688
48,142
7
3
4
S
6
Individual income taxes, net
Withheld
Presidential Election Campaign F u n d . . .
Nonwithheld
Refunds'
Corporation income taxes
180.988
165,215
39
47.804
32,070
217.841
195,295
36
56,215
33.705
244,069
223,763
39
63.746
43.479
119.988
110,394
34
49.707
40.147
131.962
120.924
4
14,592
3,559
142,889
126.101
36
59.907
43,155
10.496
20,260
8
2,451
12,222
33,729
23,000
5
11,682
958
24,439
23.963
4
2,228
1,756
65,380
5.428
71,448
5,771
72,380
7.780
43,434
4,064
28.579
4,518
44.048
6,565
1,894
883
16,411
618
2,721
1.007
123.410
141,591
160.747
86.597
77.262
102.911
20,694
14,657
15,206
99,626
115,041
133.042
69,077
66,831
83,851
15,026
13,308
13,899
4,267
13.850
5,668
5,034
15,387
6,130
5.723
15,336
6,646
5.535
8,690
3,294
188
6,742
3,502
6.240
9,205
3.615
419
4.660
588
536
234
580
-723
1,379
652
18,376
6.573
5.285
7,413
18,745
7,439
5,411
9,252
24,329
7.174
6.389
12,741
11.383
3.443
3.091
6.993
15.332
3.717
3,499
6.318
21,945
3.926
3,259
6.487
3,953
625
647
1,087
4,224
791
531
964
3,997
777
621
1,388
7
8
9
12
13
Refunds
Social insurance taxes and contributions.
net
Payroll employment taxes and
contributions 2
Self-employment taxes and
contributions 3
Unemployment insurance
Other net receipts 4
14
IS
16
17
Customs deposits
Estate and gift taxes
Miscellaneous receipts5
18
All types1-6
450,804
493,635
579,613
289,905
310,972
334,710
54,608
55,619
58,486
19
70
21
7?
73
24
National defense
International affairs
General science, space, and technology . . .
105.186
5,922
4.742
5,861
10,925
7,731
117.681
6,091
5,041
6,856
12.091
6.238
135.856
10,733
5.722
6.313
13.812
4.762
69.132
4.602
3.150
3.126
6.668
3,193
72,457
5.430
3,205
3.997
7.722
1.892
80.005
5,999
3.314
5.677
6,476
3,101
13.810
737
536
1,106
1,017
-151
13,839
1,373
609
1,319
1,140
274
14,692
378
515
914
1.164
-86
75
76
27
3.324
15,445
11.039
2,565
17,459
9.482
7.782
21.120
10.068
3.878
9.582
5.302
3.163
11.547
5,370
1.940
11.991
4.621
-269
1.581
687
860
1,841
928
-52
1.771
677
?.H
Commerce and housing credit
Transportation
Community and regional development....
Education, training, employment, social
79
30
Health
Income security'- 6
26.463
43.676
146.180
29.685
49.614
160.159
30.767
58,165
193,100
16.686
29,299
94,605
15,221
31,263
107,912
15.928
34.708
113.490
2.677
5.645
18.576
2,131
6.123
18.807
2.400
6,141
19,637
18,974
3.802
3,737
9,601
43.966
- 15.772
19.928
4,153
4,153
8.372
52.556
-18.489
21.183
4,570
4.505
8.584
64.504
-21.933
9,758
2,291
2,422
3,940
32,658
- 10.387
11,731
2,299
2,432
4.191
35,909
-14.769
10.531
2.344
2,692
3,015
41,178
- 12.432
1,670
343
393
253
7,024
-1,029
1.786
388
506
44
11,674
-8,023
2,995
386
242
1,234
6,164
-688
10
II
OUTLAYS
Natural resources and environment
Agriculture
31 Veterans benefits and services
Administration of justice
General government
34 General-purpose fiscal assistance
37
33
3S
36
Undistributed offsetting receipts'"
1. Effective June 1978. earned income credit payments in excess of an individual's
tax liability, formerly treated as income tax refunds, were classified as outlays
retroactive to January 1976.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Supplementary medical insurance premiums, federal employee retirement
contributions, and Civil Service retirement and disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous re' s.
Effective Oct. 1. 1980. the Pension Benefit Guaranty Corporation was re-
classified from an off-budget agency to an on-budget agency in the Department of
Labor.
7. Effective September 1976. "Interest" and "Undistributed offsetting receipts"
reflect the accounting conversion from an accrual basis to a cash basis for the
interest on special issues for U.S. government accounts.
8. Consists of interest received by trust funds, rents and royalties on the Outer
Continental Shelf, and U.S. government contributions for employee retirement.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" and the Budget of the U.S. Government. Fiscal Year 1981.
A32
1.40
DomesticNonfinancialStatistics • September 1981
F E D E R A L D E B T S U B J E C T T O S T A T U T O R Y LIMITATION
Billions of dollars
1979
1980
1981
Item
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
1 Federal debt outstanding
804.6
812.2
833.8
852.2
870.4
884.4
914.3
936.7
970.9
2 Public debt securities
3
Held by public
4
Held by agencies
796.8
630.5
166.3
804.9
626.4
178.5
826.5
638.8
187.7
845.1
658.0
187.1
863.5
677.1
186.3
877.6
682.7
194.9
907.7
710.0
197.7
930.2
737.7
192.5
964.5
773.7
190.9
7.8
6.3
1.5
7.3
5.9
1.5
7.2
5.8
1.5
7.1
5.6
1.5
7.0
5.5
1.5
6.8
5.3
1.5
6.6
5.1
1.5
6.5
5.0
1.5
6.4
4.9
1.5
5 Agency securities
6
Held by public
7
Held by agencies
797.9
806.0
827.6
846.2
864.5
878.7
908.7
931.2
965.5
9 Public debt securities
10 Other debt 1
8 Debt subject to statutory limit
796.2
1.7
804.3
1.7
825.9
1.7
844.5
1.7
862.8
1.7
877.0
1.7
907.1
1.6
929.6
1.6
963.9
1.6
11 MEMO: Statutory debt limit
798.0
830.0
830.0
879.0
879.0
925.0
925.0
935.1
985.0
1. Includes guaranteed debt of government agencies, specified participation certificates, notes to international lending organizations, and District of Columbia
stadium bonds.
1.41
G R O S S P U B L I C D E B T O F U.S. T R E A S U R Y
NOTE. Data from Treasury Bulletin (U.S. Treasury Department).
Types and Ownership
Billions of dollars, end of period
1981
Type and holder
1977
1978
1979
1980
Apr.
930.2
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
Convertible bonds 2
State and local government series
Foreign issues 3
Government
Public
Savings bonds and notes
Government account series 4
15 Non-interest-bearing debt
715.2
459.9
161.1
251.8
47.0
255.3
782.4
487.5
161.7
265.8
60.0
294.8
844.0
530.7
172.6
283.4
74.7
313.2
928.9
623.2
321.6
85.4
305.7
June
973.3
980.2
962.8
657.9
225.8
341.1
91.0
304.9
964.8
656.2
224.5
338.4
93.3
308.6
969.9
660.8
972.1
666.4
217.5
354.0
94.9
305.6
978.9
673.8
219.9
357.6
96.3
305.2
23.4
24.4
23.2
23.5
17.1
6.4
69.2
193.0
22.8
21.9
16.3
5.7
69.0
191.6
22.8
21.4
15.7
5.7
192.1
1.3
1.2
1.3
218.8
348.8
93.2
309.2
2.2
2.2
24.3
29.6
24.6
28.8
23.6
5.3
79.9
177.5
23.8
24.0
17.6
6.4
72.5
185.1
6.4
69.8
187.0
23.2
24.8
18.4
6.4
69.5
190.8
1.2
1.3
1.2
3.7
192.5
121.3
616.4
104.7
5.8
15.2
24.6
74.7
193.9
119.7
650.4
104.8
197.8
117.9
652.3
104.4
14.8
20.6
79.1
16.3
20.7
80.4
72.2
56.7
134.3
127.9
69.8
68.3
143.1
142.5
69.5
70.3
139.4
145.1
69.2
70.4
141.2
145.6
1.2
77.0
139.8
1.6
80.9
157.5
3.7
16
17
18
9
20
21
22
23
154.8
102.8
461.3
101.4
5.9
15.1
22.7
55.2
170.0
109.6
508.6
93.1
5.0
14.9
64.4
187.1
117.5
540.5
91.5
4.7
14.8
24.9'
67.4
24
25
26
27
Individuals
Savings bonds
Other securities
Foreign and international 6
Other miscellaneous investors 7
76.7
109.6
46.1
80.7
30.3
137.8
58.2
79.9
36.2
123.8
97.4
28.6
21.2
1. Includes (not shown separately): Securities issued to the Rural Electrification
Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
2. These nonmarketable bonds, also known as Investment Series B Bonds, may
be exchanged (or converted) at the owner's option for l l /2 percent, 5-year marketable Treasury notes. Convertible bonds that have been so exchanged are removed from this category and recorded in the notes category (line 5).
3. Nonmarketable dollar-denominated and foreign currency-denominated series
held by foreigners.
4. Held almost entirely by U.S. government agencies and trust funds.
Aug
971.2
2.2
28.0
July
968.5
13.9
22.2
21.0
By holder5
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Mutual savings banks
Insurance companies
Other companies
State and local governments
216.1
May
18.0
6.2
21.8
6.2
68.6
199.9
120.0
651.2
103.7
6.0
15.9
78.6
5. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.
6. Consists of investments of foreign balances and international accounts in the
United States.
7. Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers and brokers, certain government deposit accounts, and
government sponsored agencies.
NOTE. Gross public debt excludes guaranteed agency securities.
Data by type of security from Monthly Statement of the Public Debt of the United
States (U.S. Treasury Department); data by holder from Treasury Bulletin.
Federal Finance
1.42
U.S. G O V E R N M E N T M A R K E T A B L E SECURITIES
A33
Ownership, by maturity
Par value; millions of dollars, end of period
1981
1981
Type of holder
1979
1980
1979
May
1980
May
June
All maturities
June
1 to 5 years
1 All holders
530,731
623,186
656,185
660,769
164,198
197,409
203,174
208,085
2 U.S. government agencies and trust funds
3 Federal Reserve Banks
11,047
117,458
9,564
121,328
9,228
117,900
9,227
120,017
2,555
8,469
1,990
35,835
1,357
33,938
1,357
33,928
402,226
69,076
3,204
11,496
8,433
3,209
15,735
291,072
492,294
77,868
3,917
11,930
7,758
4.225
21,058
365,539
529,057
77,689
4,202
12,621
6,820
4,572
23,338
399,815
531,525
77,764
4,222
11,852
6,789
4,438
22,604
403,856
133,173
38,346
1,668
4,518
2,844
1,763
3,487
80,546
159,585
44,482
1,925
4,504
2,203
2,289
4,595
99,577
167,880
40,325
2,071
5,493
1,157
2,549
5,472
110,813
172,801
40,578
2,084
4,929
1,642
2,430
5,282
115,856
4 Private investors
5
Commercial banks
6
Mutual savings banks
7
Insurance companies
8
Nonfinancial corporations
9
Savings and loan associations
10 State and local governments
11 All others
Total, within 1 year
12 All holders
13 U.S. government agencies and trust funds
14 Federal Reserve Banks
15 Private investors
16 Commercial banks
17 Mutual savings banks
18 Insurance companies
19 Nonfinancial corporations
20
Savings and loan associations
21
State and local governments
22
All others
5 to 10 years
255,252
297,385
314,411
310,922
50,440
56,037
58,295
61,485
1,629
63,219
830
56,858
1,119
55,205
1,119
57,331
871
12,977
1,404
13,458
1,411
13,042
1,411
13,042
190,403
20,171
836
2,016
4,933
1,301
5,607
155,539
239,697
25,197
1,246
1,940
4,281
1,646
7,750
197,636
258,087
28,662
1,404
2,103
3,664
1,881
8,135
212,238
252,471
28,221
1,377
2,036
3,192
1,866
7,495
208,285
36,592
8,086
459
2,815
308
69
1,540
24,314
41,175
5,793
455
3,037
357
216
2,030
29,287
43,842
5,680
400
2,616
391
82
2,254
32.419
47,033
5,912
417
2,583
383
83
2,297
35,358
Bills, within 1 year
23 All holders
24 U.S. government agencies and trust funds.
25 Federal Reserve Banks
26 Private investors
27 Commercial banks
28
Mutual savings banks
29
Insurance companies
30
Nonfinancial corporations
31
Savings and loan associations
32 State and local governments
33 All others
10 to 20 years
172,644
216,104
224,514
218,786
27,588
36,854
39,927
39,899
0
45,337
1
43,971
2
41,887
1
43,593
4,520
3,272
3,686
5,919
3,685
5,945
3,685
5,945
127,306
5,938
262
473
2,793
219
3,100
114,522
172,132
9,856
394
672
2,363
818
5,413
152,616
182.625
9,891
455
791
1,671
749
5,318
163,751
175,192
9,138
449
736
1,197
692
4,774
158,206
19,796
993
127
1,305
218
58
1,762
15,332
27,250
1,071
181
1,718
431
52
3,597
20,200
30,296
1,368
177
1.674
766
36
4,164
22,110
30,268
1,311
195
1,590
758
36
4,314
22,064
Other, within 1 year
Over 20 years
34 All holders
82,608
81,281
89,897
92,136
33,254
35,500
40,378
40,378
35 U.S. government agencies and trust funds.
36 Federal Reserve Banks
1,629
17,882
829
12,888
1,118
13,318
1,118
13,738
1,472
9,520
1,656
9,258
1,656
9,770
1,656
9,770
37 Private investors
38
Commercial banks
39
Mutual savings banks
40
Insurance companies
41
Nonfinancial corporations
42
Savings and loan associations
43 State and local governments
44
All others
63,097
14,233
574
1,543
2,140
1,081
2,508
41,017
67,565
15,341
852
1.268
1,918
828
2,337
45.020
75,462
18,771
949
1,312
1.993
1,132
2,817
48,487
77,279
19,083
929
1,299
1.995
1,174
2,721
50,079
22,262
1,470
113
842
130
19
3,339
16,340
24,587
1,325
110
730
476
21
3,086
18,838
28,953
1,654
150
734
843
24
3,313
22,235
28,953
1,742
149
714
815
22
3,216
22,294
NOTE. Direct public issues only. Based on Treasury Survey of Ownership from
Treasury Bulletin (U.S. Treasury Department).
Data complete for U.S. government agencies and trust funds and Federal Reserve
Banks, but data for other groups include only holdings of those institutions that
report. The following figures show, for each category, the number and proportion
reporting as of June 30,1981: (1) 5,341 commerciafbanks, 457 mutual savings banks.
and 724 insurance companies, each about 80 percent; (2) 409 nonfinancial corporations and 474 savings and loan associations, each about 50 percent; and (3)
488 state and local governments, about 40 percent.
"All others," a residual, includes holdings of all those not reporting in the
Treasury Survey, including investor groups not listed separately.
A34
1.43
DomesticNonfinancialStatistics • September 1981
U.S. G O V E R N M E N T SECURITIES D E A L E R S
Transactions
Par value; averages of daily figures, in millions of dollars
1981
Item
1978
1979
MayP
1
Immediate delivery'
U.S. government s e c u r i t i e s . . . .
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
7
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Bv type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 2
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures transactions 3
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions 4
U.S. government s e c u r i t i e s . . . .
Federal agency securities
June p
July''
July 22
July 29
Aug. 5
Aug. 12
Aug. 19
Aug. 26
10,285
13,183
21.554
23.513
21,885
19,541
19.532
22,567
26,241
20,011
23,604
6,173
392
1.889
965
867
7,915
454
2,417
1,121
1,276
12.359
459
3.954
1.982
2.574
13,900
478
4,052
2,511
2,571
14,011
615
3,200
2,062
1,997
12,812
382
2,914
1,637
1.796
12.427
370
3.592
1.378
1.764
14,257
597
4,113
1,565
2,035
14,847
352
4,374
2,315
4,353
11,996
848
2,983
1,525
2,659
14,739
375
4,347
1,865
2,278
1.135
1,448
3,838
5.312
1,894
5.170
6,564
2,723
n a.
n a.
A
t
1
1.108
1,373
2,289
1,676
1.223
1.836
1,853
1,650
1,604
10.226
10.221
2.806
2.992
1.363
6.047
11,158
10,984
3,865
4.336
1,833
6,295
10,279
9,317
3,056
4,237
1,644
5,899
9,705
8,160
2.110
4,058
1,570
5.754
9.604
8.705
3.082
4.398
1.776
5.666
10,244
10,486
2,787
4.275
1.745
5,645
13,343
11,046
3,485
4,432
1,564
5,685
9.271
9,091
3.257
3,827
1.109
5,804
11,720
10,279
3,215
4,031
1,272
6,199
2.768
1.040
243
3,390
887
190
3,808
1,185
155
3,272
967
163
3.854
1.405
178
3,349
1,212
248
3,519
1,138
216
3,721
901
243
3,716
1,367
227
280
1.403
253
1,375
370
922
420
946
405
832
335
1.305
1.110
1,744
380
694
377
720
n.a.
|
1. Before 1981, data for immediate transactions include forward transactions.
2. Includes, among others, all other dealers and brokers in commodities and
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
3. Futures contracts are standardized agreements arranged on an organized exchange in which parties commit to purchase or sell securities for delivery at a future
date.
4. Forward transactions are agreements arranged in the over-the-counter market
in which securities are purchased (sold) for delivery after 5 business days from the
1.44
1981 , week ending Wednesday
1980
U.S. G O V E R N M E N T SECURITIES D E A L E R S
date of the transaction for government securities (Treasury bills, notes, and bonds)
or after 30 days for mortgage-backed agency issues.
NOTES. Averages for transactions are based on number of trading days in the
period.
Transactions are market purchases and sales of U.S. government securities dealers reporting to the Federal Reserve Bank of New York. The figures exclude
allotments of. and exchanges for. new U.S. government securities, redemptions of
called or matured securities, purchases or sales of securities under repurchase
agreement, reverse repurchase (resale), or similar contracts.
Positions and Financing
Averages of daily figures, in millions of dollars
1981. week ending Wednesday
1981
Item
1978
1979
1980
MayP
June''
July''
July 1
July 8
July 15
July 22
July 29
Aug. 5
Positions
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Net immediate'
U.S. government s e c u r i t i e s . . . .
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Future positions
Treasury bills
Treasury coupons
Federal agency securities
Forwards positions
U.S. government s e c u r i t i e s . . . .
Federal agency securities
2,656
2.452
260
-92
40
-4
606
2,775
3,223
3.813
-325
-455
160
30
1,471
2,794
i
t
1
t
1
n.a.
n.a.
1
1
i
1
1
T
n a.
4.646
1.820
226
499
157
1.944
1680
1.965
1.278
2.373
9.037
5,472
-523
1.133
490
2.232
2,504
4,012
2,109
3.043
6,319
3.022
-1,393
1,745
774
2.171
3,028
4,861
1,946
2,308
7.320
3,031
-1,001
2,613
184
2,493
2.729
5,550
2,649
3,153
7.645
3.252
-1.171
2.046
1.100
2.418
2.940
5.376
2,499
2.658
6,719
3.349
-1,375
1,446
1,052
2,246
3.028
5,025
2,024
2,237
5.030
2,756
-1,501
900
739
2.136
3,093
4,566
1.714
2.071
6,104
2,741
-1,414
2,282
487
2,008
3,132
4,391
1,523
2,099
5,048
2,985
-1.972
2,380
83
1,573
2,889
4,811
1,681
2,477
-6.146
-2.312
-735
-9.773
-2.455
-1,041
9,421
-2.484
-948
-9,302
-2,305
-1.035
-8.637
-2,469
-974
-7,549
-2.574
-976
-11,244
-2,593
-991
-10,744
-2,394
-887
-7,667
-2,248
-782
-1.009
-124
-720
260
-493
101
-610
382
-437
226
-279
165
-558
115
-683
-60
-488
-186
Financing 2
Reverse repurchase agreements 3 .
Overnight and continuing
Term agreements
Repurchase agreements 4
18
Overnight and continuing
19
Term agreements
16
17
For notes see opposite page.
I I i
1 I \
n.a.
n.a.
10.667
30.592
12,193
29,785
15,371
29.519
14,643
30,248
14.047
29.464
15,310
28,981
16,392
29,672
16,464
29,230
15,617
29,348
28.075
27,716
33,748
27.684
36,175
26.122
36.899
26,275
36.713
25,463
36.446
25,238
36,067
27,926
34,752
25,708
36,705
26,353
n.a.
Federal Finance
1.45
A35
F E D E R A L A N D F E D E R A L L Y S P O N S O R E D CREDIT A G E N C I E S Debt Outstanding
Millions of dollars, end of period
1981
Agency
1 Federal and federally sponsored agencies1
1978
1979
1980
Jan.
Feb.
Mar.
Apr.
May
June
137,063
163,290
193,229
195,056
194,926
198,828
200,434
205,020
208,961
2 Federal agencies
3
Defense Department 2
4
Export-Import Bank 3,4
5
Federal Housing Administration 5
Government National Mortgage Asso6
ciation participation certificates 6
7
Postal Service7
8
Tennessee Valley Authority
9
United States Railway Association 7
23,488
968
8,711
588
24,715
738
9,191
537
28,606
610
11,250
477
28,769
600
11,239
476
28,596
591
11,201
468
29,397
576
11,881
464
29,502
566
11,868
459
29,311
556
11,850
449
29,945
546
12,423
448
3,141
2,364
7,460
356
2,979
1,837
8,997
436
2,817
1,770
11,190
492
2,817
1,770
11,375
492
2,817
1,770
11,550
199
2,817
1,770
11,680
209
2,775
1,770
11,845
219
2,775
1,538
11,930
213
2,715
1,538
12,060
215
10 Federally sponsored agencies1
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Federal Land Banks
15 Federal Intermediate Credit Banks
16 Banks for Cooperatives
17 Farm Credit Banks 1
18 Student Loan Marketing Association 8
19 Other
113,575
27,563
2,262
41,080
20,360
11,469
4,843
5,081
915
2
138,575
33,330
2,771
48,486
16,006
2,676
584
33,216
1,505
1
164,623
41,258
2,536
55,185
12,365
1,821
584
48,153
2,720
1
166,287
41,819
2,518
54,605
11,507
1,388
584
50,645
3,220
1
166,330
42,275
2,514
54,110
11,507
1,388
584
50,675
3,275
2
169,431
43,791
2,409
54,666
11,507
1,388
584
51,689
3,395
2
170,932
44,357
2,409
54,183
10,583
1,388
220
54,345
3,445
2
175,709
47,121
2,409
54,430
10,583
1,388
220
56,061
3,495
2
179,016
49,425
2,409
54,657
710,583
71,388
7,220
56,932
3,400
2
51,298
67,383
87,460
88,420
89,444
94,101
96,489
98,297
100,333
6,898
2,114
915
5,635
356
8,353
1,587
1,505
7,272
436
10,654
1,520
2,720
9,465
492
10,654
1,520
3,220
9,650
492
10,654
1,520
3,275
9,825
199
11,346
1,520
3,395
9,955
209
11,346
1,520
3,445
10,120
219
11,346
1,288
3,495
10,205
213
11,933
1,288
3,400
10,335
215
23,825
4,604
6,951
32,050
6,484
9,696
39,431
9,196
13,982
39,271
9,471
14,142
39,851
10,212
13,908
41,791
10,443
15,442
43,456
10,652
15,731
44,746
10,988
16,016
45,691
11,346
716,125
MEMO:
20 Federal Financing Bank debt 1 9
Lending to federal and federally sponsored
21
22
23
24
25
Export-Import Bank 4
Postal Service7
Student Loan Marketing Association 8
Tennessee Valley Authority
United States Railway Association 7
Other Lending10
26 Fanners Home Administration
27 Rural Electrification Administration
28 Other
1. In September 1977 the Farm Credit Banks issued their first consolidated bonds,
and in January 1979 they began issuing these bonds on a regular basis to replace
the financing activities of the Federal Land Banks, the Federal Intermediate Credit
Banks, and the Banks for Cooperatives. Line 17 represents those consolidated
bonds outstanding, as well as any discount notes that have been issued. Lines 1
and 10 reflect the addition of this item.
2. Consists of mortgages assumed by the Defense Department between 1957 and
1963 under family housing and homeowners assistance programs.
3. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
5. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the securities market.
6. Certificates of participation issued prior to fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department
NOTES TO TABLE 1.44
1. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on
a commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). The maturities of some repurchase agreements are sufficiently long, however, to suggest that the securities
involved are not available for trading purposes. Securities owned, and hence dealer
positions, do not include securities to resell (reverse RPs). Before 1981, data for
immediate positions include forward positions.
2. Figures cover financing involving U.S. government and federal agency securities, negotiable CDs, bankers acceptances, and commercial paper.
of Housing and Urban Development; Small Business Administration; and the
Veterans Administration.
7. Off-budget.
8. Unlike other federally sponsored agencies, the Student Loan Marketing Association may borrow from the Federal Financing Bank (FFB) since its obligations
are guaranteed by the Department of Health, Education, and Welfare.
9. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since FFB incurs
debt solely for the purpose of lending to other agencies, its debt is not included in
the main portion of the table in order to avoid double counting.
10. Includes FFB purchases of agency assets and guaranteed loans; the latter
contain loans guaranteed by numerous agencies with the guarantees of any particular agency being generally small. The Farmers Home Administration item consists
exclusively of agency assets, while the Rural Electrification Administration entry
contains both agency assets and guaranteed loans.
3. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities obtained
have been used as collateral on borrowings, i.e., matched agreements.
4. Includes both repurchase agreements undertaken to finance positions and
"matched book" repurchase agreements.
NOTE. 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 shown net and
are on a commitment basis. Data for financing are based on Wednesday figures,
in terms of actual money borrowed or lent.
A36
1.46
Domestic Financial Statistics • September 1981
N E W S E C U R I T Y ISSUES of State and Local Governments
Millions of dollars
1981
Type of issue or issuer,
or use
1978
1 All issues, new and refunding 1
1979
1980
Jan.
Feb.
Mar.
Apr.
May
June
48,607
43,490
48,462
2,658
2,928
3,879
5,068
3,406
4,846
17,854
30,658
12,109
31,256
14,100
34,267
728
1,923
876
2,049
1,249
2,619
1.317
3,745
1,307
2,089
1,355
3,486
95
125
95
7
3
11
6
10
Type of issuer
State
7 Special district and statutory authority
8 Municipalities, counties, townships, school districts
6,632
24,156
17,718
4,314
23,434
15,617
5,304
26,972
16,090
478
1,442
731
530
1,442
951
349
1,979
1,541
544
2,701
1,816
639
1,629
1,127
585
2,711
1,545
9 Issues for new capital, total
37,629
41,505
46,736
2,650
2,855
3,845
4,898
3,394
4,768
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
5,003
3,460
9.026
10,494
3,526
6,120
5,130
2,441
8,594
15,968
3,836
5,536
4,572
2,621
8,149
19,958
3,974
7,462
338
147
585
786
389
405
292
322
452
881
296
612
515
238
784
956
512
840
479
121
1,262
1,001
1,298
737
227
424
641
1,054
408
640
615
158
756
1,408
731
1,100
Type of issue
2 General obligation
3 Revenue
4
5 U.S. government loans
ft
10
11
12
13
14
15
1. Par amounts of long-term issues based on date of sale.
2. Only bonds sold pursuant to the 1949 Housing Act, which are secured by
contract requiring the Housing Assistance Administration to make annual contributions to the local authority.
1.47
5
SOURCE. Public Securities Association.
NEW SECURITY ISSUES of Corporations
Millions of dollars
Type of issue or issuer,
or use
1980
1978
1979
1981
1980
Dec.
Jan.
Feb.
Mar.
Apr. r
May
June
1 All issues'
47,230
51,533
73,688
5,933
5,581
4,157
6,423
6,835 r
5,457'
9,536
2 Bonds
36,872
40,208
53,199
3,044
3,386
2,834
4.275
4,597'
3,080 r
5,601
Type of offering
3 Public
4 Private placement
19,815
17,057
25,814
14.394
41,587
11.612
1,719
1,325
2,928
458
2,408
426
3,778''
497
3,668
929'
2,520'
560'
4,603
998
9,572
5,246
2,007
7,092
3,373
9,586
9.678
3,948
3,119
8,153
4,219
11,094
15,409
6,688
3,329
9.556
6.683
11.534
609
509
165
314
653
793
1,635
231
353
800
62
306
1,140
356
45
593
272
430
1.064
212
172
594
958
1.276
1,459'
342'
142'
904'
554'
1,197'
1,269
138
49
1,063'
56
506'
1,313
566
584
996
470
1,672
10,358
11,325
20,490
2,889
2,195
1,323
2,148
2,238
2,377
3,935
2,832
7,526
3,574
7,751
3,632
16,858
241
2,648
364
1,831
149
1,174
298
1,850
85
2,153
164
2,213
188
3,747
1,241
1,816
263
5,140
264
1,631
1.679
2,623
255
5,171
303
12,931
4,839
5.245
549
6,230
567
3,059
844
908
95
669
65
308
609
603
124
562
14
284
204
589
81
260
31
159
735
816
17
414
531
477
146
717
56
310
903
958
47
173
382
1,024
18
843
1,036
632
5
6
7
8
9
10
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
11 Stocks
Type
12 Preferred
13 Common
14
15
16
17
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
19 Real estate and financial
1. Figures, which represent gross proceeds of issues maturing in more than one
year, sold for cash in the United States, are principal amount or number of units
multiplied by offering price. Excludes offerings of less than $100,000, secondary
offerings, undefined or exempted issues as defined in the Securities Act of
167
296
1933, employee stock plans, investment companies other than closed-end, intracorporate transactions, and sales to foreigners,
SOURCE. Securities and Exchange Commission.
Corporate Finance
1.48
O P E N - E N D I N V E S T M E N T COMPANIES
Millions of dollars
Net Sales and Asset Position
1980
Item
1979
A37
1981
1980
Dec.
Feb.
Jan.
Mar.
Apr.
May
June
July
INVESTMENT COMPANIES 1
1 Sales of own shares 2
2 Redemptions of own shares 3
3 Net sales
4
5
6
Assets4
Cash position 5
Other
7,495
8,393
-898
15,266
12,012
3,254
1,242
1,720
-478
1,676
1,193
483
1,347
960
387
1,696
1,112
584
2,000
1,594
406
1,785
1,250
535
1,910
1,512
398
1,639
1,298
341
49,277
4,983
44,294
58,400
5,321
53,079
58,400
5,321
53,079
56,160
4,636
51,524
56,452
4,882
51,570
59,146
4,971
54,175
58,531
5,099
53,432
60,081
5,448
54,633
58,887
5,199
53,688
57,500
51,109
52,391
1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment
of capital gains distributions and share issue of conversions from one fund to another
in the same group.
3. Excludes share redemption resulting from conversions from one fund to another in the same group.
4. Market value at end of period, less current liabilities.
1.49
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.
C O R P O R A T E PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1979
Account
1978
1979
Q3
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
1981
Q4
Q1
Q2
Q3
Q4
o r
185.5
223.3
82.9
140.3
44.6
95.7
196.8
255.3
87.6
167.7
50.1
117.6
182.7
245.5
82.3
163.2
56.0
107.2
199.5
262.0
88.4
173.6
50.2
123.4
189.4
255.4
87.2
168.2
51.6
116.6
200.2
277.1
94.2
182.9
53.9
129.0
169.3
217.9
71.5
146.4
55.7
90.7
177.9
237.6
78.5
159.1
56.7
102.4
183.3
249.5
85.2
164.3
57.7
106.6
203.0
257.0
87.7
169.3
59.6
109.7
-24.3
-13.5
-42.6
-15.9
-45.6
-17.2
-46.5
-16.1
-50.8
-15.1
-61.4
-15.4
-31.1
-17.6
-41.7
-17.9
-48.4
-17.8
-39.2
-14.7
SOURCE. Survey of Current Business (U.S. Department of Commerce).
1980
1980
A38
1.50
DomesticNonfinancialStatistics • September 1981
NONFINANCIAL CORPORATIONS
Current Assets and Liabilities
Billions of dollars, except for ratio
1980
Account
1975
1976
1977
1978
1981
1979
Qlr
Q2r
Q3 r
Q4'
QI
1 Current assets
759.0
826.8
902.1
1,030.0
1,200.9
1,234.0
1,232.2
1,254.9
1,281.1
1,321.4
?
3
4
5
6
82.1
19.0
272.1
315.9
69.9
88.2
23.4
292.8
342.4
80.1
95.8
17.6
324.7
374.8
89.2
104.5
16.3
383.8
426.9
98.5
116.1
15.6
456.8
501.7
110.8
110.5
15.2
470.3
518.9
119.2
111.5
14.0
463.4
525.0
118.3
113.4
16.4
478.7
524.5
121.9
120.9
17.1
491.6
525.3
126.2
120.4
16.8
507.9
542.8
133.5
7 Current liabilities
451.6
494.7
549.4
665.5
809.1
836.5
826.0
850.5
877.8
911.7
8 Notes and accounts payable
9
264.2
187.4
281.9
212.8
313.2
236.2
373.7
291.7
456.3
352.8
467.7
368.8
462.8
363.2
477.0
373.5
498.5
379.3
504.5
407.2
307.4
332.2
352.7
364.6
391.8
397.5
406.2
404.3
403.4
409.7
1.681
1.672
1.642
1.548
1.484
1.475
1.492
1.475
1.460
1.449
Cash
U.S. government securities
Notes and accounts receivable
Inventories
10 Net working capital
11 MEMO: Current ratio
1
1. Ratio of total current assets to total current liabilities.
All data in this table reflect the most current benchmarks. Complete data are
available upon request from the Flow of Funds Section, Division of Research and
Statistics.
NOTE. For a description of this series, see "Working Capital of Nonfinancial
C o r p o r a t i o n s " in t h e J u l y 1978 BULLETIN, p p . 5 3 3 - 3 7 .
1.51
SOURCE. Federal Trade Commission.
T O T A L N O N F A R M BUSINESS E X P E N D I T U R E S on New Plant and Equipment
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1980
Industry
1 Total nonfarm business
2
3
4
5
6
7
8
9
10
11
Manufacturing
Durable goods industries
Nondurable goods industries
Nonmanufacturing
Mining
Transportation
Railroad
Air
Other
Public utilities
Electric
Gas and other
Trade and services
Communication and other 2
1979
1980
Q2
Q3
Q4
QI
Q2 1
031
Q4 1
270.46
295.63
321.50
294.36
296.23
299.58
312.24
316.73
322.96
332.69
51.07
47.61
58.91
56.90
62.92
63.87
59.38
56.32
58.19
58.21
59.77
58.86
61.24
63.27
63.10
62.40
63.07
65.65
64.06
64.05
11.38
13.51
16.47
12.81
13.86
15.28
16.20
16.80
16.12
16.70
4.03
4.01
4.31
4.25
4.01
3.82
4.43
3.60
4.12
4.06
4.27
3.76
3.98
4.06
4.18
4.54
3.77
3.39
4.23
3.85
3.66
4.38
3.29
4.04
4.22
2.84
4.00
4.84
4.44
4.60
27.65
6.31
79.26
34.83
28.12
7.32
81.79
36.99
28.12
8.07
87.30
41.89
27.91
7.12
81.07
37.66
28.14
7.44
81.19
36.97
27.54
7.41
82.91
36.11
27.69
8.36
83.43
40.32
29.32
8.53
85.88
39.02
29.41
7.38
86.55
43.70
28.84
8.16
92.68
44.31
1. Anticipated by business.
2. "Other" consists of construction; social services and membership organizations; and forestry, fisheries, and agricultural services.
1981
19811
SOURCE. Survey of Current Business (U.S. Dept. of Commerce).
Corporate Finance
1.52
DOMESTIC FINANCE COMPANIES
Billions of dollars, end of period
Assets and Liabilities
1980
Account
A39
1976
1975
1977
1978
1981
1979
Q3
Q2
04
02
Q1
ASSETS
1
2
3
4
5
6
7
8
Accounts receivable, gross
Consumer
Business
Total
LESS: Reserves for unearned income and losses....
Accounts receivable, net
Cash and bank deposits
Securities
All other
36.0
39.3
75.3
9.4
65.9
2.9
1.0
11.8
38.6
44.7
83.4
10.5
72.9
2.6
1.1
12.6
44.0
55.2
99.2
12.7
86.5
2.6
.9
14.3
52.6
63.3
116.0
15.6
100.4
3.5
1.3
17.3
65.7
70.3
136.0
20.0
116.0
9
Total assets
81.6
89.2
104.3
122.4
8.0
22.2
6.3
23.7
5.9
29.6
4.5
27.6
6.8
5.4
32.3
8.1
6.2
36.0
11.5
70.2
70.3
140.4
21.4
119.0
71.7
66.9
138.6
22.3
116.3
73.6
72.3
145.9
23.3
122.6
76.1
72.7
148.7
24.3
124.5
79.0
78.2
157.2
25.7
131.4
26.1
28.3
27.5
30.8
31.6
140.9
145.1
144.7
150.1
155.3
163.0
6.5
34.5
8.5
43.3
10.1
40.7
10.1
40.5
13.2
43.4
13.1
44.2
14.4
49.0
8.1
43.6
12.6
8.2
46.7
14.2
7.9
50.5
16.0
7.7
52.0
14.6
7.5
52.4
14.3
8.2
51.6
17.3
8.5
52.6
17.0
24.9 1
LIABILITIES
10
11
Bank loans
Commercial paper
Short-term, n.e.c
Long-term, n.e.c
Other
12
13
14
15
Capital, surplus, and undivided profits
12.5
13.4
15.1
17.2
19.9
19.9
19.8
19.4
20.9
21.5
16
Total liabilities and capital
81.6
89.2
104.3
122.4
140.9
145.1
144.7
150.1
155.3
163,0
1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined.
NOTE. Components may not add to totals due to rounding.
1.53
D O M E S T I C F I N A N C E COMPANIES Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
Accounts
receivable
outstanding
June 30.
Changes in accounts
receivable
Extensions
Repayments
1981
1981
1981
1981 1
Apr.
1
Total
Retail automotive (commercial vehicles)
Wholesale automotive
Retail paper on business, industrial and
farm equipment
5 Loans on commercial accounts receivable and factored commercial accounts receivable
6 All other business credit
2
3
4
1. Not seasonally adjusted.
May
June
Apr.
May
June
Apr.
May
June
78,232
1,409
1,813
1,850
18,133
18,983
19,502
16,724
17,170
17,652
11,397
13,639
-213
890
-152
682
-217
1.085
790
5.865
830
5.426
734
6,267
1.003
4.975
982
4,744
951
5.182
25.148
56
608
456
1.384
1.595
1,774
1.328
987
1.318
8.683
19.365
139
537
488
187
180
346
7,735
2.359
8,696
2.436
8,267
2,460
7.596
1.822
8.208
2.249
8,087
2,114
A40
1.54
DomesticNonfinancialStatistics • September 1981
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1981
Item
1978
1979
1980
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
Terms'
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2
Contract rate (percent per annum)
Yield (percent per annum)
1 FHLBB series5
8 HUD series4
62.6
45.9
75.3
28.0
1.39
9.30
74.4
53.3
73.9
28.5
1.66
10.48
83.4
59.2
73.2
28.2
2.09
12.25
87.0
63.0
75.6
29.1
2.40
12.80
90.3
65.6
75.6
29.0
2.59
13.02
90.9
64.5
73.9
28.7
2.64
13.48
88.5
64.1
74.7
28.6
2.61
13.62
88.9
65.5
76.7
28.5
2.60
13.56
94.1'
66.8
72.6
27.5
2.50
14.12
97.0
67.7
73.9
28.3
2.73
14.14
9.54
9.68
10.77
11.15
12.65
13.95
13.26
14.95
13.54
15.10
14.02
15.25
14.15
15.70
14.10
16.35
14.67
16.40
14.72
16.70
9.70
8.98
10.87
10.22
13.42
12.55
14.23
13.50
14.79
12.63c
15.04
14.22
15.91
14.69
16.03
15.31
16.31
15.02
16.76
15.76
9.77
10.01
11.17
11.77
14.11
14.43
14.87
14.95
15.24
15.05
15.64'
15.29
16.54
15.66
16.93r
16.44
16.17
16.30
16.65
16.44
57,586
39,030
18,557
57,657
38,988
57,978
18,669'
18,870
283
0
247
0
627
0
SECONDARY MARKETS
9
10
11
12
Yield (percent per annum)
FHA mortgages (HUD series) 5
GNMA securities6
FNMA auctions7
Government-underwritten loans
Conventional loans
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
13 Total
14 FHA-insured
15 VA-guaranteed
16 Conventional
43,311
21,243
10,544
11,524
51,091
24,489
10,496
16,106
57.327
38.969 s
18,358
Mortgage transactions (during period)
17 Purchases
18 Sales
12,303
9
10,805
0
Mortgage commitments9
19 Contracted (during period)
20 Outstanding (end of period)
18,959
9,185
57.390
38.955
18.435
57.434
38,972
18,462
57,362
38,878
18,484
8,100
0
185
0
161
0
87
0
10,179
6,409
8,044
3,278
241
3,063
244
2,683
319'
2,173
383
2,031
802
2,328
1,110
3,103
1,662
4,039
12,978
6,747
8,860
3.920
8.605
4.002
210.7'
110.8'
154.2''
87.7''
169.0'
69.0''
139.1
114.5
204.8''
179.1
237.6
127.1'
331.9
290.4
9,933
5,110
4.495
2,343
3,639
1,748
32.0
30.3
108.6
79.1
104.0'
62.0
126.9
92.0
281.3
155.9r
307.1
224.0'
306.6
238.2
Mortgage holdings (end of period)™
25 Total
26
FHA/VA
27
Conventional
3,064
1,243
1,165
4.035
1.102
1,957
5,067
1,033
2,840 <
5.039
1.029
2.825
5,107
1.025
2,883
5.161
1,021
2,931
5,176
1,017
2,952
5,223
1,013
2,988
5,257
1,009
3,016
5,250
1,005
3,017
Mortgage transactions (during period)
28 Purchases
29 Sales
6,525
6,211
5,717
4.544
3,723
2.527
192'
168
179'
94
148
127
125
97
480
422
139
94
242
238
Mortgage commitments11
30 Contracted (during period)
31 Outstanding (end of period)
7.451
1,410
5.542
797
3,859
447
203
487
90''
394
475''
699
118''
678
130'
322
293'
1,018
866
824
57,436
38.919
18,517
206
1'
39,108
Auction of 4-month commitments to buy
Government-underwritten loans
21
22
Offered
Accepted
Conventional loans
23
Offered
24
Accepted
FEDERAL HOME LOAN MORTGAGE CORPORATION
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) in order to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages,
rounded to the nearest 5 basis points; 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. Any gaps in data are due to periods of adjustment to changes in
maximum permissible contract rates.
6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities.
assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying
the prevailing ceiling rate. Monthly figures are unweighted averages of Monday
quotations for the month.
7. Average gross yields (before deduction of 38 basis points for mortgage servicing) on accepted bias in Federal National Mortgage Association's auctions of 4month commitments to purchase home mortgages, assuming prepayment in 12
years for 30-year mortgages. No adjustments are made for FNMA commitment
fees or stock related requirements. Monthly figures are unweighted averages for
auctions conducted within the month.
8. Beginning March 1980. FHA-insured and VA-guaranteed mortgage holdings
in lines 14 and 15 are combined.
9. 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.
10. Includes participation as well as whole loans.
11. Includes conventional and government-underwritten loans.
Real Estate Debt
1.55
A41
MORTGAGE DEBT OUTSTANDING
Millions of dollars, end of period
1980
Type of holder, and type of property
1979
1978
Q2
1 All holders
1- to 4-family
3 Multifamily
4 Commercial
5
7
Major financial institutions
Commercial banks 1
1- to 4-family
Multifamily
10
Commercial
11
Farm
7
8
9
1981
1980
Q3
Q4
QLR
Q2
1,169,412
1,326,750
1,451,840
1,380,928
1,414,881
1,451,841 r
1,473,354
1,503,308
765,217
121,138
211,851
71,206
878,931
128,852
236,451
82,516
960,422
136,580
258,338
96,500
910,286
132,194
247,444
91,004
935,393
134,193
251,651
93,644
960,408R
136,601 R
258,332R
96,500
973,144
138,092
262,250
99,868
992,146
140,276
266,751
104,135
848,177
214,045
129,167
10,266
66,115
8,497
938,567
245,187
149,460
11,180
75,957
8,590
998,386
264,602
160,746
12,304
82,688
8,864
958,750
253,103
153,753
11,764
79,110
8,476
977,281
258,003
156,737
11,997
80,626
8,643
998,372R
264,602
160,746
12,304
82,688
8,864
1,008,123
268,102
162,872
12,467
83,782
8,981
1,023,741
274,503
166,761
12,764
85,782
9,196
95,157
62,252
16,529
16,319
57
98,908
64,706
17,340
16,963
59
99,827
65,307
17,180
17,120
60
99,150
64,864
17,223
17,004
59
99,8306
64,966
17,249
17,031
60
99,813R
65,297R
17,338 R
17,118 R
60
99,719
65,236
17,321
17,102
60
99,670
65,204
17,313
17,093
60
16
Mutual savings banks
1- to 4-family
Multifamily
Commercial
Farm
17
18
19
20
Savings and loan associations
1- to 4-family
Multifamily
Commercial
432,808
356,114
36,053
40,461
475,688
394,345
37,579
43,764
502,812
419,446
38,113
45,253
481,042
399,746
37,329
43,967
491,895
409,896
37,728
44,271
502,812
419,446
38,113
45,253
507,152
423,066
38,442
45,644
514,568
429,253
39,004
46,311
21
27.
23
24
25
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
106,167
14,436
19,000
62,232
10,499
118,784
16,193
19,274
71,137
12,180
131,145
17,911
19,614
80,776
12,844
125,455
17,796
19,284
75,693
12,682
128,077
17,996
19,357
77,995
12,729
131,145
17,911
19,614
80,776
12,844
133,150
17,815
19,678
82,714
12,943
135,000
18,076
19,957
83,887
13,080
81,739
3,509
877
2,632
97,084
3,852
763
3,089
114,300
4,642
704
3,938
108,539
4,466
736
3,730
110,526
4,389
719
3,670
114,300
4,642
704
3,938
116,243
4,826
696
4,130
119,476
4,976
720
4,256
926
288
320
101
217
1,274
417
71
174
612
3,492
916
610
411
1,555
3,375
1,383
636
402
954
3,525
978
774
370
1,403
3,492
916
610
411
1,555
2,837
1,321
528
479
509
3,037
1,421
553
504
559
5,305
1,673
3,632
5,555
1,955
3,600
5,640
2,051
3,589
5,691
2,085
3,606
5,600
1,986
3,614
5,640
2,051
3,589
5,799
2,135
3,664
5,830
2,158
3,672
12
13
14
15
26
27
28
29
30
31
32
33
34
Federal and related agencies
Government National Mortgage Association
1- to 4-family
Multifamily
Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm
37
Federal Housing and Veterans Administration
1- to 4-family
Multifamily
38
39
40
Federal National Mortgage Association
1- to 4-family
Multifamily
43,311
37,579
5,732
51,091
45,488
5,603
57,327
51,775
5,552
55,419
49,837
5,582
55,632
50,071
5,561
57,327
51,775
5,552
57,362
51,842
5,520
57,657
52,181
5,476
41
Federal Land Banks
1- to 4-family
Farm
25,624
927
24,697
31,277
1,552
29,725
38,131
2,099
36,032
35,574
1,893
33,681
36,837
1,985
34,852
38,131
2,099
36,032
40,258
2,228
38,030
42,693
2,401
40,292
3,064
2,407
657
4,035
3,059
976
5,068
3,873
1,195
4,014
3.037
977
4,543
3,459
1,084
5,068
3,873
1,195
5,161
3,953
1,208
5,283
4,041
1,242
88,633
54,347
52,732
1,615
119,278
76,401
74,546
1,855
142,258
93,874
91,602
2,272
129,647
84,282
82,208
2,074
136,583
89,452
87,276
2,176
142,258
93,874
91,602
2,272
147,246
97,184
94,810
2,374
152,303
100,558
98,102
2,456
35
36
42
43
44
45
46
47
48
49
50
51
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
Mortgage pools or trusts 2
Government National Mortgage Association
1- to 4-family
Multifamily
52
53
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
11,892
9,657
2,235
15,180
12,149
3,031
16,854
13,471
3,383
16,120
12,886
3,234
16,659
13,318
3,341
16,854
13,471
3,383
17,067
13,641
3,426
17,650
14,100
3,550
54
55
56
57
58
Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm
22,394
13,400
1,116
3,560
4,318
27,697
14,884
2,163
4,328
6,322
31,530
16,683
2,612
5,271
6,964
29,245
15,224
2,159
4,763
7,099
30,472
16,226
2,235
5,059
6,952
31,530
16,683
2,612
5,271
6,964
32,995
16,640
2,853
5,382
8,120
34,095
16,965
3,078
5,632
8,420
150,863
83,708
21,351
22,883
22,921
171,821
99,414
23,251
24,128
25,028
196,896
113,838
26,058
26,819
30,181
183,992
104,838
24,596
26,505
28,053
190,491
109,780
25,407
26,299
29,005
196,911 R
113,834R
26,081 R
26,815
30,181
201,742
116,889
26,481
27,147
31,225
207,788
120,763
26,955
27,542
32,528
59
60
61
67,
63
Individual and others 3
1- to 4-family
Multifamily
Commercial
Farm
1. Includes loans held by nondeposit trust companies but not bank trust departments.
2. Outstanding principal balances of mortgages backing securities insured or
guaranteed by the agency indicated.
3. Other holders include mortgage companies, real estate investment trusts, state
and local credit agencies, state and local retirement funds, noninsured pension
funds, credit unions, and U.S. agencies for which amounts are small or separate
data are not readily available.
NOTE. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve in conjunction with the
Federal Home Loan Bank Board and the Department of Commerce. Separation
of nonfarm mortgage debt by type of property, if not reported directly, and interpolations and extrapolations when required, are estimated mainly by the Federal
Reserve. Multifamily debt refers to loans on structures of five or more units.
A42
1.56
DomesticNonfinancialStatistics • September 1981
C O N S U M E R INSTALLMENT CREDIT 1 Total Outstanding, and Net C h a n g e ^
Millions of dollars
1981
Holder, and type of credit
1978
1979
1980
Jan.
Feb.
Mar.
Apr.
May
June
July
Amounts outstanding (end of period)
1 Total
273,645
312,024
313,435
310,554
309,188
310,766
313,419
315,465
318,459
320,886
By major holder
Commercial banks . . . .
Finance companies . . . .
Credit unions
Retailers 2
Savings and loans
Gasoline companies . . .
Mutual savings banks..
136,016
54,298
44,334
25,987
7,097
3,220
2,693
154,177
68,318
46,517
28,119
8,424
3,729
2,740
145,765
76,756
44,041
29,410
9,911
4,717
2,835
143,749
77,131
43,601
28,300
10,023
4,929
2,821
142,030
78,090
43,776
27,329
10,173
4,958
2,832
141,897
79,490
44,212
26,965
10,458
4,898
2,846
142,070
81,033
44,390
27,227
10,792
5,046
2,861
142,143
81,794
45,055
27,319
11,148
5,157
2,849
143,310
82,723
45,686
27,412
11,115
5,364
2,849
144,020
83,924
46,096
27,469
10,959
5,597
2,821
By major type of credit
9 Automobile
10 Commercial banks ..
11
Indirect paper . . . .
12
Direct loans
13 Credit unions
14 Finance companies ..
101,647
60,510
33,850
26,660
21,200
19,937
116,362
67,367
38,338
29,029
22,244
26,751
116,327
61,025
34,857
26,168
21,060
34,242
115,262
59,608
33,947
25,661
20,850
34,804
115,677
59,061
33,667
25,394
20,933
35,683
117,517
59,378
34,016
25,362
21,142
36,997
118,479
59,252
33,931
25,321
21,227
38,000
118,932
59,169
33,913
25,256
21,545
38,218
119,685
59,192
33,996
25,196
21,847
38,646
121,002
59,434
34,270
25,164
22,044
39,525
15 Revolving
16 Commercial banks ..
17 Retailers
18 Gasoline companies .
48,309
24,341
20,748
3,220
56,937
29,862
23,346
3,729
59,862
30,001
25,144
4,717
58,985
29,952
24,104
4,929
57,566
29,412
23,196
4,958
56,831
29,051
22,882
4,898
57,322
29,127
23,149
5,046
57,524
29,096
23,271
5,157
58,470
29,722
23,384
5,364
58,976
29,923
23,456
5,597
19 Mobile home
20 Commercial banks ..
21 Finance companies ..
22 Savings and loans . . .
23 Credit unions
15,235
9,545
3,152
2,067
471
16,838
10,647
3,390
2,307
494
17,327
10,376
3,745
2,737
469
17,244
10,271
3,741
2,768
464
17,189
10,174
3,740
2,809
466
17,273
10,153
3,762
2,888
470
17,422
10,142
3,828
2,980
472
17,626
10,159
3,909
3,079
479
17,724
10,179
3,990
3,069
486
17,784
10,192
4,076
3,026
490
24 Other
25 Commercial banks ..
26 Finance companies . .
27 Credit unions
28 Retailers
29 Savings and loans . . .
30 Mutual savings banks
108,454
41,620
31,209
22,663
5,239
5,030
2,693
121,887
46,301
38,177
23,779
4,773
6,117
2,740
119,919
44,363
38,769
22,512
4,266
7,174
2,835
119,063
43,918
38,586
22,287
4,196
7,255
2,821
118,756
43,383
38,667
22,377
4,133
7,364
2,832
119,145
43,315
38,731
22,600
4,083
7,570
2,846
120,196
43,549
39,205
22,691
4,078
7,812
2,861
121,383
43,719
39,667
23,031
4,048
8,069
2,849
122,580
44,217
40,087
23,353
4,028
8,046
2,849
123,124
44,471
40,323
23,563
4,013
7,933
2,821
2
3
4
5
6
7
8
Net change (during period) 3
31 Total
43,079
38,381
1,410
869
1,9%
3,108
2,331
1,346
1,930
1,954
Retailers 2
Savings and loans
Gasoline companies . . .
Mutual savings banks..
23,641
9,430
6,729
2,497
7
257
518
18,161
14,020
2,185
2,132
1,327
509
47
-8,412
8,438
-2,475
1,291
1,485
988
95
-1,357
1,113
288
409
232
106
78
-544
1,530
444
103
254
209
0
612
1,539
287
253
418
-6
5
-345
1,253
272
531
421
141
58
-14
409
391
-3
519
67
-23
614
570
219
416
45
78
-12
432
948
532
265
-175
4
-52
By major type of credit
39 Automobile
40
Commercial banks . .
41
Indirect paper . . . .
42
Direct loans
43 Credit unions
44
Finance companies ..
18,736
10,933
6,471
4,462
3,101
4,702
14,715
6,857
4,488
2,369
1,044
6,814
-35
-6,342
-3,481
-2,861
-1,184
7,491
-63
-1,253
-839
-414
206
984
979
-346
-229
-117
211
1,114
1,682
229
268
-39
132
1,321
428
-461
-256
-205
142
747
-195
-208
-83
-125
160
-147
57
-214
-44
-170
106
165
1,208
199
274
-75
263
746
45 Revolving
46
Commercial banks ..
47
Retailers
48 Gasoline companies .
9,035
5,967
2,811
257
8,628
5,521
2,598
509
2,925
139
1,798
988
557
59
392
106
441
166
66
209
587
346
247
-6
838
153
544
141
350
230
53
67
1,018
580
360
78
477
156
317
4
49 Mobile home
50
Commercial banks ..
51 Finance companies ..
52
Savings and loans . . .
53 Credit unions
286
419
74
-276
69
1,603
1,102
238
240
23
488
-271
355
430
-25
-24
-85
15
46
0
-47
-102
18
31
6
88
-35
25
97
1
145
-15
58
99
3
243
7
78
152
6
89
-12
85
14
2
67
20
81
-44
10
54 Other
55 Commercial banks ..
56 Finance companies ..
57 Credit unions
58
Retailers
59 Savings and loans . . .
60 Mutual savings banks
15,022
6,322
4,654
3,559
-314
283
518
13,435
4,681
6,968
1,118
-466
1,087
47
-1,968
-1,938
592
-1,266
-507
1,056
95
399
-78
114
82
17
186
78
623
-262
398
227
37
223
0
751
72
193
154
6
321
5
920
-22
448
127
-13
322
58
948
-43
478
225
-56
367
-23
766
260
320
111
56
31
-12
202
57
121
259
-52
-131
-52
By major holder
32 Commercial banks . . . .
33 Finance companies . . . .
34 C r e d i t u n i o n s
35
36
37
38
1. The Board's series cover most short- and intermediate-term credit extended
to individuals through regular business channels, usually to finance the purchase
of consumer goods and services or to refinance debts incurred for such purposes,
and scheduled to be repaid (or with the option of repayment) in two or more
installments.
2. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.
3. Net change equals extensions minus liquidations (repayments, charge-offs and
other credit); figures for all months are seasonally adjusted.
ATotal consumer noninstallment credit outstanding—credit scheduled to be repaid in a lump sum, including single-payment loans, charge accounts, and service
credit—amounted to $64.3 billion at the end of 1978, $71.3 billion at the end of
1979, and $72.2 billion at the end of 1980.
Consumer Debt
1.57
A43
C O N S U M E R I N S T A L L M E N T C R E D I T Extensions and Liquidations
Millions of dollars; monthly data are seasonally adjusted.
1981
1979
Holder, and type of credit
Jan.
Feb.
Mar.
Apr.
May
June
July
Extensions
297,668
324,777
305,887
27,059
28,706
29,822
28,878
28,149
29,005
28,750
142,433
50,505
38,111
44,571
3,724
16,017
2,307
154,733
61,518
34,926
47,676
5,901
18,005
2,018
133,605
60,801
29,594
50,959
6,621
22,402
1,905
10,397
5,904
2,994
4,673
715
2,130
246
11,648
6,193
3,167
4,500
751
2,284
163
12,676
5,911
3,153
4,685
1,038
2,180
179
11,986
5,218
3,181
5,002
985
2,272
234
12,055
4,937
3,212
4,486
1,068
2,243
148
12,483
5,251
3,137
5,018
649
2,296
171
12,433
5,439
3,299
4,826
383
2,252
118
By major type of credit
9 Automobile
10 Commercial banks
11
Indirect paper
12
Direct loans
13 Credit unions
14 Finance companies
87,981
52,969
29,342
23,627
18,539
16.473
93,901
53,554
29,623
23,931
17,397
22,950
83,002
40,657
22,269
18,388
15,294
27,051
8,333
3,560
1,944
1,616
1,613
3,160
8,700
4,117
2,365
1,752
1,586
2,997
7,205
3,438
1,929
1,509
1,589
2,178
7,320
3,627
2,071
1,556
1,608
2,085
7,442
3,652
2,126
1,526
1,553
2,237
8,178
3,874
2,349
1,525
1,663
2,641
15 Revolving
16 Commercial banks
17 Retailers
18 Gasoline companies
105,125
51,333
37,775
16,017
120,174
61.048
41,121
18,005
129,580
61,847
45,331
22,402
11,483
5,185
4,168
2,130
11,867
5,602
3,981
2,284
12,071
5,695
4,196
2,180
12,352
5,561
4,519
2,272
11,904
5,613
4,048
2,243
12,668
5,905
4,467
2,296
12,190
5,557
4,381
2,252
5,412
3,697
886
609
220
6,471
4,542
797
948
184
5,098
2,942
898
1,146
113
383
171
81
119
12
409
185
88
118
18
641
259
88
269
25
551
251
100
184
16
609
250
112
230
17
488
259
122
93
14
451
282
116
30
23
99,150
34,434
33,146
19,352
6,796
3,115
2,307
104,231
35,589
37,771
17,345
6,555
4,953
2,018
88,207
28,159
32,852
14,187
5,628
5,476
1,905
7,956
2,443
2,776
1,390
505
596
246
8,097
2,301
2,945
1,536
519
633
163
8,410
2,605
2,826
1,542
489
769
179
8,770
2,736
2,940
1,576
483
801
234
8,316
2,565
2,740
1,587
438
838
148
8,407
2,667
2,892
1,570
551
556
171
7,931
2,720
2,682
1,613
445
353
118
1 Total
7
3
4
5
6
7
8
By major holder
Commercial banks
Finance companies
Credit unions
Retailers 1
Savings and loans
Gasoline companies
Mutual savings banks
19 Mobile home
7,0 Commercial banks
7.1 Finance companies
22
Savings and loans
23 Credit unions
24 Other
7.5 Commercial banks
26
Finance companies
27 Credit unions
28 Retailers
29 Savings and loans
30 Mutual savings banks
7,237
2,598
1,230
1,368
1,592c
3,047
Liquidations
254,589
286,396
304,477
26,190
26,710
26,714
26,547
26,803
27,075
26,796
118,792
41,075
31,382
42,074
3,717
15,760
1,789
136,572
47,498
32,741
45,544
4,574
17,496
1,971
142,017
52,363
32,069
49,668
5,136
21,414
1,810
11,754
4,791
2,706
4,264
483
2,024
168
12,192
4,663
2,723
4,397
497
2,075
163
12,064
4,372
2,866
4,432
620
2,186
174
12,331
3,965
2,909
4,471
564
2,131
176
12,069
4,528
2,821
4,489
549
2,176
171
11,869
4,681
2,918
4,602
604
2,218
183
12,001
4,491
2767
4561
558
2,248
170
By major type of credit
39 Automobile
40
Commercial banks
41
Indirect paper
Direct loans
42
43 Credit unions
44
Finance companies
69,245
42,036
22,871
19,165
15,438
11,771
79,186
46,697
25,135
21,562
16,353
16,136
83,037
46,999
25,750
21,249
16,478
19,560
7,300
3,851
2,069
1,782
1,386
2,063
7,354
3,906
2,173
1,733
1,402
2,046
7,018
3,888
2,097
1,791
1,454
1,676
6,777
3,899
2,185
1,714
1,447
1,431
7,515
3,835
2,154
1,681
1,448
2,232
7,385
3,866
2,170
1,696
1,447
2,072
6,970
3,675
2,075
1,600
1,400
1,895
45 Revolving
46
Commercial banks
47 Retailers
48 Gasoline companies
96,090
45,366
34,964
15,760
111,546
55,527
38,523
17,496
126,655
61,708
43,533
21,414
10,926
5,126
3,776
2,024
11,426
5,436
3,915
2,075
11,484
5,349
3,949
2,186
11,514
5,408
3,975
2,131
11,554
5,383
3,995
2,176
11,650
5,325
4,107
2,218
11,713
5,401
4,064
2,248
49 Mobile home
50 Commercial banks
51
Finance companies
52 Savings and loans
53 Credit unions
5,126
3,278
812
885
151
4,868
3,440
559
708
161
4,610
3,213
543
716
138
407
256
66
73
12
456
287
70
87
12
553
294
63
172
24
406
266
42
85
13
366
243
34
78
11
399
271
37
79
12
384
262
35
74
13
84,128
28,112
28,492
15,793
7,110
2,832
1,789
90,796
30,908
30,803
16,227
7,021
3,866
1,971
90,175
30,097
32,260
15,453
6,135
4,420
1,810
7,557
2,521
2,662
1,308
488
410
168
7,474
2,563
2,547
1,309
482
410
163
7,659
2,533
2,633
1,388
483
448
174
7,850
2,758
2,492
1,449
496
479
176
7,368
2,608
2,262
1,362
494
471
171
7,641
2,407
2,572
1,459
495
525
183
7,729
2,663
2,651
1,354
497
484
170
31 Total
32
33
34
35
36
37
38
By major holder
Commercial banks
Finance companies
Credit unions
Retailers 1
Savings and loans
Gasoline companies
Mutual savings banks
54 Other
55 Commercial banks
56 Finance companies
57 Credit unions
58 Retailers
59 Savings and loans
60 Mutual savings banks
1. Includes auto dealers and excludes 30-day charge credit held by travel and
entertainment companies.
A44
1.58
DomesticNonfinancialStatistics • September 1981
F U N D S R A I S E D IN U . S . C R E D I T M A R K E T S
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1978
1975
1976
1977
1978
1979
1979
1980
1980
HI
H2
HI
H2
HI
H2
Nonfinancial sectors
1 Total funds raised
2 Excluding equities
By sector and instrument
3 U.S. government
4
Treasury securities
5
Agency issues and mortgages
6 All other nonfinancial sectors
7 Corporate equities
8
Debt instruments
9
Private domestic nonfinancial sectors
10
Corporate equities
11
Debt instruments
12
Debt capital instruments
13
State and local obligations
14
Corporate bonds
210.8
200.7
271.9
261.0
338.5
335.3
400.4
398.3
394.9
390.6
365.4
353.9
384.8
387.4
416.0
409.2
380.5
377.7
408.2
402.3
325.8
318.0
404.9
389.7
85.4
85.8
-.4
125.4
10.1
115.3
112.1
9.9
102.2
98.4
16.1
27.2
69.0
69.1
-.1
202.8
10.8
192.0
182.0
10.5
171.5
123.5
15.7
22.8
56.8
57.6
-.9
281.7
3.1
278.6
267.8
2.7
265.1
175.6
23.7
21.0
53.7
55.1
-1.4
346.7
2.1
344.6
314.4
2.6
311.8
196.6
28.3
20.1
37.4
38.8
-1.4
357.6
4.3
353.2
336.4
3.5
333.0
199.9
18.9
21.2
79.2
79.8
-.6
286.2
11.5
274.7
256.7
9.5
247.2
179.7
25.0
27.9
61.4
62.3
-.9
323.4
-2.6
326.0
302.8
-1.8
304.6
188.3
27.8
20.6
46.0
47.9
-1.9
370.0
6.8
363.2
326.1
7.0
319.1
205.0
28.7
19.6
28.6
30.9
-2.3
351.9
2.8
349.1
338.6
2.8
335.8
198.8
16.0
22.4
46.1
46.6
-.5
362.1
5.9
356.2
333.0
4.1
328.9
201.1
21.8
19.9
64.7
65.3
-.6
261.1
7.8
253.4
231.9
6.0
225.9
171.9
18.5
33.6
93.7
94.3
-.6
311.2
15.3
295.9
281.5
13.0
268.5
187.4
31.6
22.3
39.5
96.3
7.4
18.4
8.8
89.5
40.6
27.0
2.9
19.0
104.6
10.2
23.3
10.2
115.2
50.6
37.3
5.2
22.2
109.1
8.9
25.7
16.2
133.0
44.2
50.6
10.9
27.3
81.5
8.7
21.6
14.0
67.2
3.1
37.9
5.8
20.4
100.1
9.3
21.2
9.3
116.3
50.1
43.1
5.3
17.8
109.1
11.2
25.4
11.1
114.1
51.0
31.4
5.1
26.5
109.8
8.1
26.0
16.6
137.0
48.3
48.2
12.0
28.4
108.5
9.7
25.4
15.9
127.8
39.0
52.9
9.7
26.2
70.7
8.1
25.5
15.5
54.0
-4.3
9.7
29.7
18.9
92.8
9.0
19.3
12.4
81.1
8.9
65.0
-18.1
25.2
15
16
17
18
19
20
21
22
23
Home mortgages
Multifamily residential
Commercial
Farm
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
4.6
3.8
9.7
-12.3
-2.6
9.0
63.6
1.8
13.4
6.1
48.0
25.6
4.0
4.0
14.4
24
25
26
27
28
29
By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate
112.1
13.7
49.7
8.8
2.0
37.9
182.0
15.2
90.5
10.9
4.7
60.7
267.8
20.4
139.9
14.7
12.9
79.9
314.4
23.6
162.6
18.1
15.4
94.8
336.4
15.5
164.9
25.8
15.9
114.3
254.2
20.7
100.8
19.0
12.5
101.1
302.8
21.0
156.1
15.3
16.4
93.9
326.1
26.1
169.1
20.8
14.4
95.7
338.6
13.0
167.6
23.5
15.5
118.9
333.0
18.0
161.2
28.1
15.9
109.7
231.9
16.6
88.7
20.9
10.3
95.4
281.5
30.4
113.7
14.7
15.5
107.2
13.3
.2
13.2
6.2
3.9
.3
2.8
20.8
.3
20.5
8.6
6.8
1.9
3.3
13.9
.4
13.5
5.1
3.1
2.4
3.0
32.3
-.5
32.8
4.0
18.3
6.6
3.9
21.2
.9
20.3
3.9
2.3
11.2
3.0
29.9
2.2
27.7
.8
11.8
10.1
5.0
20.6
-.8
21.4
5.0
9.3
3.6
3.6
43.9
-.2
44.1
3.0
27.3
9.6
4.2
13.3
13.3
3.0
1.0
6.1
3.1
29.1
1.7
27.3
4.7
3.5
16.3
2.8
29.3
1.8
27.5
2.0
4.4
15.7
5.4
29.7
2.3
27.4
-.4
18.7
4.5
4.6
30
31
32
33
34
35
36
Foreign
Corporate equities
Debt instruments
Bonds
Bank loans n.e.c
Open market paper
U.S. government loans
*
11.0
*
Financial sectors
37 Total funds raised
38
39
40
41
42
43
44
45
46
47
48
49
By instrument
U.S. government related
Sponsored credit agency securities
Mortgage pool securities
Loans from U.S. government
Private financial sectors
Corporate equities
Debt instruments
Corporate bonds
Mortgages
Bank loans n.e.c
Open market paper and RPs
Loans from Federal Home Loan Banks
By sector
50 Sponsored credit agencies
51 Mortgage pools
52 Private financial sectors
53 Commercial banks
54
Bank affiliates
55
Savings and loan associations
56
Other insurance companies
57
Finance companies
58
REITs
Open-end investment companies
59
12.7
24.1
54.0
81.4
88.5
70.8
80.7
82.1
86.3
90.7
53.7
84.2
13.5
2.3
10.3
.9
-.8
.6
-1.4
2.9
2.3
-3.7
1.1
-4.0
18.6
3.3
15.7
-.4
5.5
1.0
4.4
5.8
2.1
-3.7
2.2
-2.0
26.3
7.0
20.5
-1.2
27.7
.9
26.9
10.1
3.1
-.3
9.6
4.3
41.4
23.1
18.3
52.4
24.3
28.1
47.5
24.3
23.2
38.5
21.9
16.6
44.3
24.3
20.1
45.8
21.5
24.2
59.0
27.0
32.0
45.8
25.1
20.7
48.9
23.7
25.2
40.0
1.7
38.3
7.5
.9
2.8
14.6
12.5
36.1
2.3
33.8
7.8
-1.2
-.4
18.4
9.2
23.3
3.4
19.8
7.2
-.9
1.0
5.4
7.1
42.2
2.2
40.0
8.5
2.1
2.5
13.5
13.2
37.8
1.1
36.7
6.4
-.3
3.1
15.7
11.8
40.5
2.0
38.4
8.7
-.5
-.7
23.0
7.8
31.7
2.5
29.2
7.0
-1.9
-.2
13.8
10.5
7.9
2.6
5.3
10.5
-6.8
1.0
-3.6
4.1
35.3
4.3
31.0
3.5
4.8
-1.9
14.5
10.2
3.2
10.3
-.8
1.2
.3
-2.3
1.0
.5
-1.4
-.1
2.9
15.7
5.5
2.3
-.8
.1
.9
6.4
-2.4
-1.0
5.8
20.5
27.7
1.1
1.3
9.9
.9
17.6
-2.2
-.9
23.1
18.3
40.0
1.3
6.7
14.3
1.1
18.6
-1.0
-1.0
24.3
28.1
36.1
1.6
4.5
11.4
1.0
18.9
-.4
-1.0
24.4
23.2
23.3
.6
5.6
6.4
.8
8.8
-.9
2.0
21.9
16.6
42.2
1.5
5.8
16.4
1.0
18.9
-1.0
-.5
24.3
20.1
37.8
1.1
7.6
12.2
1.1
18.2
-1.0
-1.5
21.5
24.2
40.5
1.3
6.2
9.9
1.0
23.5
-.6
-1.0
27.0
32.0
31.7
1.8
2.9
12.9
.9
14.3
-.1
-.9
25.1
20.7
7.9
.8
4.5
-3.1
.8
5.5
-1.4
.9
23.7
25.2
35.3
.3
6.6
17.0
.7
10.0
-2.0
2.6
All sectors
60 Total funds raised, by instrument
61 Investment company shares
62 Other corporate equities
63 Debt instruments
64
U.S. government securities
State and local obligations
65
66
Corporate and foreign bonds
Mortgages
67
68
Consumer credit
69
Bank loans n.e.c
70
Open market paper and RPs
Other loans
71
223.6
295.9
392.5
481.8
483.4
434.1
465.5
498.1
466.7
498.9
379.5
489.2
-.1
10.8
212.9
98.2
16.1
36.4
57.2
9.7
-12.2
-1.2
8.7
-1.0
12.9
284.1
88.1
15.7
37.2
87.0
25.6
7.0
8.1
15.3
-.9
4.9
388.5
84.3
23.7
36.1
133.9
40.6
29.8
15.0
25.2
-1.0
4.7
478.1
95.2
28.3
31.6
149.1
50.6
58.4
26.4
38.6
-1.0
7.6
476.8
89.9
18.9
32.9
158.6
44.2
52.5
40.5
39.5
2.0
15.0
417.1
126.8
22.2
35.6
124.8
3.1
50.7
21.4
32.6
-.5
.1
465.9
100.0
27.8
34.2
141.9
50.1
54.9
22.4
34.6
-1.5
9.4
490.2
90.4
28.7
29.1
156.3
51.0
61.8
30.4
42.5
-1.0
5.8
461.9
74.5
16.0
34.1
159.8
48.3
48.6
41.1
39.4
-.9
9.3
490.5
105.2
21.8
31.5
157.4
39.0
56.2
39.8
39.5
.9
9.5
369.1
110.6
18.5
46.1
113.0
-4.3
15.1
41.9
28.4
2.6
17.0
469.6
142.8
31.6
25.4
138.2
8.9
81.7
.9
40.0
Flow of Funds
1.59
A45
DIRECT A N D INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates
1975
1976
1977
1978
1979
1980
1979
1978
Transaction category, or sector
1980
HI
H2
HI
H2
HI
H2
1 Total funds advanced in credit markets to nonfinancial
sectors
200.7
261.0
335.3
398.3
390.6
349.8
387.4
409.2
377.7
402.3
318.0
389.7
By public agencies and foreign
2 Total net advances
3 U.S. government securities
4 Residential mortgages
5 FHLB advances to savings and loans
Other loans and securities
6
44.6
22.5
16.2
-4.0
9.8
54.3
26.8
12.8
-2.0
16.6
85.1
40.2
20.4
4.3
20.2
109.7
43.9
26.5
12.5
26.9
80.1
2.0
36.1
9.2
32.8
95.8
22.3
32.0
7.1
34.5
102.8
43.7
22.2
13.2
23.7
116.6
44.0
30.7
11.8
30.1
47.6
-22.1
32.6
7.8
29.2
112.5
26.2
39.6
10.5
36.3
101.5
24.7
33.4
4.1
39.3
90.4
21.3
30.7
10.2
28.3
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
Agency borrowing not included in line 1
15.1
14.8
8.5
6.1
13.5
8.9
20.3
9.8
15.2
18.6
11.8
26.8
7.1
39.4
26.3
20.4
44.6
7.0
37.7
41.4
22.5
57.5
7.7
-7.7
52.4
26.0
48.6
4.5
16.7
47.5
19.4
39.4
13.4
30.6
38.5
21.4
49.8
.5
44.9
44.3
23.8
49.9
.9
-27.0
45.8
21.3
65.2
14.5
11.7
59.0
29.5
43.6
14.6
13.8
45.8
21.6
52.9
-5.6
21.5
48.9
Private domestic funds advanced
12 Total net advances
13 U.S. government securities
14 State and local Obligations
15 Corporate and foreign bonds
16 Residential mortgages
17 Other mortgages and loans
18 LESS: Federal Home Loan Bank advances
169.7
75.7
16.1
32.8
23.2
17.9
-4.0
225.4
61.3
15.7
30.5
52.6
63.3
-2.0
276.5
44.1
23.7
22.5
83.3
107.3
4.3
330.0
51.3
28.3
22.5
88.2
152.2
12.5
362.9
87.9
18.9
25.6
81.8
157.9
9.2
301.5
104.6
22.2
25.5
58.1
98.2
7.1
323.2
56.3
27.8
24.1
87.1
141.1
13.2
336.9
46.4
28.7
20.9
89.5
163.3
11.8
375.9
96.6
16.0
26.9
85.1
159.1
7.8
348.8
79.1
21.8
24.3
78.5
155.6
10.5
262.4
85.9
18.5
32.6
45.2
84.2
4.1
348.2
121.5
31.6
19.5
71.0
114.7
10.2
Private financial intermediation
19 Credit market funds advanced by private financial
institutions
20
Commercial banking
21
Savings institutions
22 Insurance and pension funds
23 Other finance
122.5
29.4
53.5
40.6
-1.0
190.1
59.6
70.8
49.9
9.8
257.0
87.6
82.0
67.9
19.6
296.9
128.7
75.9
73.5
18.7
292.5
121.1
56.3
70.4
44.7
265.6
103.5
57.6
76.4
28.1
301.7
132.5
75.8
76.9
16.6
292.0
125.0
75.9
70.2
20.9
307.5
124.6
57.7
75.4
49.8
277.4
117.6
54.9
65.5
39.6
230.7
57.0
32.1
86.4
55.2
293.0
142.4
81.1
68.0
1.5
24 Sources of funds
25 Private domestic deposits
26 Credit market borrowing
Other sources
27
Foreign funds
28
Treasury balances
29
30
Insurance and pension reserves
31
Other, net
122.5
92.0
-1.4
32.0
-8.7
-1.7
29.7
12.7
190.1
124.6
4.4
61.0
-4.6
-.1
34.5
31.2
257.0
141.2
26.9
89.0
1.2
4.3
49.4
34.1
296.9
142.5
38.3
116.0
6.3
6.8
62.7
40.3
292.5
136.7
33.8
122.0
26.3
.4
49.0
46.3
265.6
163.9
19.8
81.9
-20.0
-2.0
58.5
45.4
301.7
138.3
40.0
123.5
5.7
1.9
66.2
49.6
292.0
146.7
36.7
108.6
6.9
11.6
59.2
31.0
307.5
121.7
38.4
147.3
49.4
5.1
53.9
38.9
277.4
151.6
29.2
96.6
3.2
-4.3
44.0
53.7
230.7
148.3
5.3
77.2
-18.1
-2.5
62.4
35.4
293.0
183.0
31.0
79.0
-28.1
-2.6
55.6
54.1
Private domestic nonfinancial investors
32 Direct lending in credit markets
33 U.S. government securities
34 State and local obligations
35 Corporate and foreign bonds
36 Commercial paper
37 Other
45.8
24.1
8.4
8.4
-1.3
6.2
39.7
16.1
3.8
5.8
1.9
12.0
46.3
23.0
2.6
-3.3
9.5
14.5
71.5
33.2
4.5
-1.4
16.3
18.8
104.2
57.8
-2.5
11.1
10.7
27.1
55.7
30.7
-1.8
5.4
-2.4
23.9
61.4
32.1
7.0
-3.7
8.2
17.8
81.6
34.4
2.0
1.0
24.4
19.8
106.8
64.1
-2.3
7.8
12.5
24.7
100.5
51.5
-2.7
14.2
9.0
28.5
36.9
15.5
-1.6
5.2
-5.7
23.6
86.1
48.8
7.9
5.3
-2.9
27.0
98.1
.2
1.3
84.0
-15.8
40.3
59.4
12.6
6.4
6.2
131.9
2.3
113.5
-13.2
57.6
69.1
16.1
8.8
7.3
149.5
2.2
.2
121.0
23.0
29.0
69.0
26.1
17.8
8.3
151.8
7.5
6.9
115.2
45.9
8.2
61.1
22.2
12.9
9.3
144.7
6.6
34.4
84.7
.4
39.3
45.1
18.9
11.0
7.9
173.5
4.7
29.2
131.8
12.7
62.9
56.2
7.8
-1.8
9.6
148.7
9.8
6.1
110.7
33.9
18.4
58.5
22.1
11.6
10.5
154.8
5.1
7.7
119.8
57.9
-1.9
63.8
22.3
14.2
8.1
131.1
18.5
30.2
71.4
-25.3
41.3
55.4
10.9
1.6
9.3
158.1
-5.3
38.6
97.9
26.0
37.3
34.7
26.8
20.3
6.5
157.3
5.3
61.9
92.3
-12.0
60.8
43.5
-2.2
-11.3
9.0
194.6
7.4
-3.4
178.9
72.6
37.7
68.7
11.8
.2
11.6
48 Total of credit market instruments, deposits and
currency
143.9
171.6
195.8
223.3
248.9
229.1
210.1
236.4
237.9
258.7
194.2
280.8
49
50
51
Public support rate (in percent)
Private financial intermediation (in percent)
Total foreign funds
22.2
72.2
-2.6
20.8
84.3
10.6
25.4
93.0
40.5
27.5
90.0
44.0
20.5
80.6
18.6
27.4
88.1
-3.3
26.5
93.4
36.3
28.5
86.7
51.8
12.6
81.8
22.4
28.0
79.5
14.9
31.9
87.9
-4.3
23.2
84.2
-6.6
MEMO: Corporate equities not included above
52 Total net issues
53 Mutual fund shares
54
Other equities
10.7
-.1
10.8
11.9
-1.0
12.9
4.0
-.9
4.9
3.7
-1.0
4.7
6.6
-1.0
7.6
17.0
-2.0
15.0
-.4
-.5
.1
7.9
-1.5
9.4
4.8
-1.0
5.8
8.4
-.9
9.3
10.4
.9
9.5
19.6
2.6
17.0
9.6
1.1
12.3
-.4
7.4
-3.4
7.6
-3.8
15.7
-9.1
18.7
-1.7
.4
-.8
14.7
-6.8
12.5
-7.7
18.9
-10.5
10.5
-.1
25.1
-5.5
7
8
9
10
11
38 Deposits and currency
39 Security RPs
40 Money market fund shares
41 Time and savings accounts
42
Large at commercial banks
Other at commercial banks
43
44
At savings institutions
Money
45
46
Demand deposits
47
Currency
55 Acquisitions by financial institutions
56 Other net purchases
*
NOTES BY LINE NUMBER.
1.
2.
6.
11.
12.
17.
25.
26.
28.
29.
Line 2 of table 1.58.
Sum of lines 3-6 or 7-10.
Includes farm and commercial mortgages.
Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities. Included below in lines 3,
13, and 33.
Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum
of lines 27, 32, 39, 40, 41, and 46.
Includes farm and commercial mortgages.
Sum of lines 39, 40, 41, and 46.
Excludes equity issues and investment company shares. Includes line 18.
Foreign deposits at commercial banks, bank borrowings from foreign branches,
and liabilities of foreign banking agencies to foreign affiliates.
Demand deposits at commercial banks.
30. Excludes net investment of these reserves in corporate equities.
31. Mainly retained earnings and net miscellaneous liabilities.
32. Line 12 less line 19 plus line 26.
33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes
mortgages.
47. Mainly an offset to line 9.
48. Lines 32 plus 38, or line 12 less line 27 plus 45.
49. Line 2/line 1.
50. Line 19/line 12.
51. Sum of lines 10 and 28.
52. 54. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types quarterly, and annually
for flows and for amounts outstanding, may be obtainedf from Flow of Funds
Section, Division of Research and Statistics, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
A46
2.10
Domestic Nonfinancial Statistics • September 1981
N O N F I N A N C I A L BUSINESS ACTIVITY
Selected Measures
1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1980
Measure
1979
1978
1981
1980
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June'
July
Aug.
1 Industrial production 1
146.1
152.5
147.0'
150.4'
151.4'
151.8'
152. l r
151.9'
152.7
152.9'
153.4
152.8
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
144.8
135.9
149.1
132.8
154.1
148.3
150.0
147.2
150.8
142.2
160.5
156.4
146.7'
145.3'
145.4'
145.2'
151.9
147.6r
149.4'
147.8'
147.1'
148.8'
155.4'
152.2'
149.9'
147.8'
146.9'
149.1'
157.5'
153.8
150.2'
148.2'
147.6'
148.7'
157.7'
154.3'
150.7'
149.0'
148.3'
150.0'
157.1'
154.4
151.3'
149.9'
148.9'
151.4'
156.3'
152.9'
152.3
151.3
150.7
152.1
156.1
153.4
152.2
151.5
150.4
153.0
155.0
154.0
152.4
151.6
150.0
153.9
155.3
155.0
151.9
151.1
148.5
154.6
155.1
154.3
146.7
153.6
146.7'
150.4'
151.1
151.2'
151.6'
152.0'
152.8
152.5
153.0
152.5
84.4
85.6
85.7
87.4
79.1'
80.0'
79.8'
81.4'
79.8
82.3'
79.8'
82.1'
79.8'
81.1'
80.0
81.2
79.7
81.4
79.8
81.7
79.2
81.2
11 Construction contracts (1972 = 100)3
174.1
185.6
161.8
193.0
185.0
177.0
183.0
172.0
160.0
170.0
n.a.
n.a.
12 Nonagricultural employment, total 4
13 Goods-producing, total
14
Manufacturing, total
15
Manufacturing, production-worker
If. Service-producing
17 Personal income, total
18 Wages and salary disbursements
19
Manufacturing
20 Disposable personal income 5
131.8
109.8
105.4
103.0
143.8
273.3
258.8
223.1
267.0
136.5
113.5
108.2
105.3
149.1
308.5
289.5
248.6
299.6
137.6
110.3
104.4
99.4
152.6
342.9
314.7
261.5
332.5
138.2
110.0
103.7
98.3
153.7
361.4
330.5
275.8
349.2
138.4
110.0
103.7
98.2
154.0
365.2
335.6
280.1
352.5
138.7
110.0
103.8
98.2
154.4
368.0
337.9
281.3
355.3
138.8
110.1
103.8
98.4
154.5
371.5
340.2
382.9
358.7
139.0
110.3
104.6
99.2
154.7
373.6
341.8
286.1
360.6
139.1
110.3
105.0
99.6
155.0
375.9
343.6
289.2
362.4
139.2
110.8
104.1
99.6
154.8
378.5
344.7
289.6
364.5
139.8
111.3
105.7
100.2
155.4
384.4
347.1
291.2
370.3
139.9
111.2
105.5
100.1
155.5
n.a.
n.a.
n.a.
n.a.
21 Retail sales6
253.8
281.6
303.8
318.8
326.6
331.7
334.8
328.1
326.7
333.9
332.9
335.1
Prices7
22
Consumer
23 Producer finished goods
195.4
194.6
217.4
216.1
246.8
246.9
258.4
257.2
260.5
260.4
263.2
262.4
265.1
265.3
226.8
267.7
269.0
268.9
271.3
269.9
274.4
271.3
n.a.
271.2
2
3
4
5
6
7
Industry groupings
8 Manufacturing
Capacity utilization (percent) 1 - 2
9
Manufacturing
10 Industrial materials industries
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.
1. The industrial production and capacity utilization series have been revised
back to January 1979.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, and Department of Commerce.
3. Index of dollar value of total construction contracts, including residential,
nonresidential, and heavy engineering, 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).
2.11
80.0
82.1'
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.
O U T P U T , C A P A C I T Y , A N D CAPACITY UTILIZATION
Seasonally adjusted
1980
1981
1980
1981
1980
1981
Series
Q3
r
04'
Ql
r
Q2'
Output (1967 = 100)
Q3'
Q4'
QI'
Q2'
Capacity (percent of 1967 output)
1 Manufacturing
2 Primary processing
3 Advanced processing
141.5
139.7
142.3
148.6
152.7
146.2
151.3
157.5
148.1
152.4
156.6
150.2
186.4
191.2
183.8
187.9
192.5
185.5
189.4
193.8
187.1
190.9
195.0
188.7
4 Materials
139.2
149.4
154.2
153.4
185.1
186.4
187.6
131.4
87.3
163.2
167.0
113.2
143.6
200.0
128.4
144.3
109.4
176.3
183.7
113.7
149.7
228.2
128.2
150.9
117.5
179.2
186.7
114.8
151.4
232.7
130.9
152.3
112.7
178.7
186.3
114.6
151.0
232.2
125.0
189.5
141.22
203.4
212.6
139.4
157.2
267.1
152.3
190.6
141.3
205.3
214.9
139.7
158.5
270.5
152.8
191.8
141.5
207.3
217.1
140.1
159.7
274.1
153.5
5 Durable goods
6
Metal materials
7 Nondurable goods
8
Textile, paper, and chemical
9
Textile
10
Paper
11
Chemical
12 Energy materials
Q4'
Q3'
QI'
Q2'
Utilization rate (percent)
75.9
73.1
77.4
79.1
79.3
78.8
79.9
81.3
79.1
188.9
75.2
80.1
82.2
81.2
192.9
141.7
209.2
219.4
140.6
160.7
277.5
154.2
69.3
61.8
80.2
78.5
81.2
91.3
74.9
84.4
75.7
77.4
85.9
85.5
81.4
94.5
84.3
83.9
78.7
83.0
86.5
86.0
81.9
94.8
84.9
85.3
78.9
79.5
85.4
84.9
81.5
93.9
83.7
81.0
79.8
80.3
79.6
Labor Market
2.11
A47
Continued
Previous cycle1
«
Latest cycle2
1980
1980
Low
July
Dec.
1981
•
High
Low
High
Jan.
Feb.
Mar.
Apr.
May
June
July
Capacity utilization rate (percent)
13 Manufacturing
88.0
69.0
87.2
74.9
74.9
79.8
80.0
79.8
79.8
79.8
80.0
79.7
79.8
14
15
93.8
85.5
68.2
69.4
90.1
86.2
71.0
77.2
71.0
77.2
80.9
79.2
81.5
79.2
81.5
79.0
80.8
79.2
80.7
79.4
80.6
79.8
79.6
79.6
79.8
79.7
16 Materials
17 Durable goods
18
Metal materials
92.6
91.5
98.3
69.4
63,6
68.6
88.8
88.4
96.0
73.8
68.2
59.6
73.8
68.2
59.6
81.4
77.1
80.3
82.1
78.4
81.9
82.3
78.5
83.2
82.1
79.2
83.9
81.1
78.8
79.9
81.2
79.2
80.3
81.4
78.8
78.4
81.7
79.1
78.2
19
20
21
22
23
Nondurable goods
Textile, paper, and chemical....
Textile
Paper
Chemical
94.5
95.1
92.6
99.4
95.5
67.2
65.3
57.9
72.4
64.2
91.6
92.2
90.6
97.7
91.3
77.5
75.3
80.9
89.3
70.7
77.5
75.3
80.9
89.3
70.7
87.2
87.1
80.2
95.0
86.8
87.3
86.7
82.0
94.5
86.0
86.8
86.3
82.2
94.5
85.3
85.4
85.0
81.5
95.3
83.4
85.9
85.5
81.9
94.9
84.1
85.6
85.4
81.7
93.9
84.3
84.7
84.0
80.8
93.0
82.7
84.1
83.4
81.2
92.3
81.8
24
Energy materials
94.6
84.8
88.3
82.7
84.4
84.6
84.9
85.8
85.2
79.9
79.8
83.4
85.7
Primary processing
Advanced processing
1. Monthly high 1973; monthly low 1975.
2. Preliminary; monthly highs December 1978 through January 1980; monthly
lows July 1980 through October 1980.
2.12
LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1981
Category
1978
1979
1980
Feb.
Mar.
Apr.
May
June
July
Aug.
HOUSEHOLD SURVEY DATA
1
Noninstitutional population 1
161,058
163,620
166,246
167,747
167,902
168,071
168,272
168,480
168,685
168,855
2
3
Labor force (including Armed Forces) 1 . . .
Civilian labor force
102.537
100,420
104,996
102,908
106,821
104,719
107,802
105,681
108,305
106,177
108,851
106,722
109,533
107,406
108,307
106,176
108,603
106,464
108,762
106,602
4
91,031
3,342
93,648
3,297
93,960
3,310
94,646
3,281
95.136
3,276
95,513
3,463
95,882
3,353
95,127
3,265
95,704
3,258
95,574
3,370
6
7
8
Nonagricultural industries 2
Agriculture
Unemployment
Number
Rate (percent of civilian labor force) .
Not in labor force
6,047
6.0
58,521
5,963
5.8
58,623
7,448
7.1
59,425
7,754
7.3
59,946
7,764
7.3
59,598
7,746
7.3
59,219
8,171
7.6
58,739
7,784
7.3
60,173
7,502
7.0
60,082
7,657
7.2
60.093
9
Nonagricultural payroll employment 3
86,697
89,823
90,564
91,258
91,347
91,458
91,564
91,615 r
91,966 r
92,027
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
20,505
851
4.229
4,923
19,542
4.724
16,252
15,672
21,040
958
4,463
5,136
20,192
4,975
17,112
15,947
20.300
1,020
4,399
5.143
20,386
5,168
17,901
16,249
20,177
1,091
4,389
5,135
20,600
5,283
18,343
16,240
20,171
1,098
4,416
5,139
20,635
5,293
18,371
16.204
20,332
950
4,418
5,161
20,636
5,316
18,475
16,170
20,414
957
4,334
5,148
20,714
5,326
18,540
16,131
20,424R
L,110 R
4,284R
5,149R
20,717R
5,331R
18,560R
16,040R
20,547R
1,131R
4,269R
5,161'
20,794''
5,346R
18,653'"
16,065'
20,515
1,149
4,265
5,179
20,863
5,355
18,688
16,013
5
ESTABLISHMENT SURVEY DATA
10
11
12
13
14
15
16
17
1. Persons 16 years of age and over. Monthly figures, which are based on sample
data, relate to the calendar week that contains the 12th day; annual data are
averages of monthly figures. By definition, seasonality does not exist in population
figures. Based on data from Employment and Earnings (U.S. Department of Labor).
2. Includes self-employed, unpaid family, and domestic service workers.
3. Data include all full- and part-time employees 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 1979
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).
A48
2.13
Domestic Nonfinancial Statistics • September 1981
INDUSTRIAL PRODUCTION
I n d e x e s and Gross V a l u e
Monthly data are seasonally adjusted.
Grouping
1967
proportion
1980
average
1980
Aug. r
Sept/
Oct/
1981
Nov.'
Dec r
Jan.'
Feb/
Mar.'
Apr/
May'
June
JulyP
Aug/
Index (1967 = 100)
MAJOR MARKET
1 Total index
2 Products
3 Final products
4
Consumer goods
5
Equipment
6
Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9 Automotive products
10
Autos and utility vehicles....
11
Autos
12
Auto parts and allied goods..
13 Home goods
14
Appliances, A/C, and TV . ..
15
Appliances and TV
16
Carpeting and furniture
17
Miscellaneous home goods...
18 Nondurable consumer goods
19 Clothing
20 Consumer staples
21
Consumer foods and tobacco
22
Nonfood staples
23
Consumer chemical
products
24
Consumer paper products .
25
Consumer energy products
26
Residential utilities
27
28
29
30
31
32
33
34
35
Equipment
Business
Industrial
Building and mining
Manufacturing
Power
Commercial transit, farm
Commercial
Transit
Farm
100.00
147.0
142.2
144.4
146.6
149.2
150.4
151.4
151.8
152.1
151.9
152.7
152.9
153.4
152.8
60.71
47.82
27.68
20.14
12.89
39.29
146.7
145.3
145.4
145.2
151.9
147.6
144.5
143.3
142.9
143.7
148.9
138.8
145.6
144.1
144.5
143.6
151.2
142.5
147.1
145.7
146.3
144.8
152.4
145.9
148.7
147.4
148.1
146.5
153.4
150.1
149.4
147.8
147.1
148.8
155.4
152.2
149.9
147.8
146.9
149.1
157.5
153.8
150.2
148.2
147.8
148.7
157.7
154.3
150.7
149.0
148.3
150.0
157.1
154.4
151.3
149.9
148.9
151.4
156.3
152.9
152.3
151.3
150.7
152.1
156.1
153.4
152.2
151.5
150.4
153.0
155.0
154.0
152.4
151.6
150.0
153.9
155.3
155.0
151.9
151.1
148.5
154.6
155.1
154.3
7.89
2.83
2.03
1.90
80
5.06
1.40
1.33
1.07
2.59
136.7
132.8
110.1
103.6
190.4
138.9
117.3
119.5
155.2
143.8
128.3
120.7
93.1
90.1
190.9
132.6
113.5
114.2
142.1
139.0
133.5
131.2
106.5
98.9
193.9
134.7
115.8
117.1
147.8
139.6
139.0
140.9
119.2
109.7
196.1
137.8
122.2
124.5
150.2
141.2
143.4
146.1
125.4
115.4
198.6
141.8
128.4
131.0
154.1
144.0
141.3
139.0
116.2
105.9
197.0
142.6
126.4
128.7
157.3
145.4
140.1
130.4
102.7
93.3
200.8
145.6
132.2
134.1
156.2
148.4
141.2
133.9
108.5
101.1
198.4
145.2
125.8
128.2
160.4
149.5
143.6
139.2
116.1
107.8
197.5
146.1
129.1
131.2
160.2
149.4
144.3
142.9
120.2
113.2
200.8
145.0
121.2
122.6
165.2
149.7
147.3
151.8
129.1
120.0
209.5
144.8
121.4
122.3
163.1
149.9
148.0
153.0
131.4
122.2
208.0
145.1
119.5
120.9
166.3
150.3
146.8
147.8
123.0
118.1
210.9
146.3
123.6
124.7
166.1
150.4
141.4
137.3
108.7
104.9
210.0
143.7
116.1
19.79
4.29
15.50
8.33
7.17
148.9
148.9
123.5
156.0
147.5
165.8
149.3
122.5
156.7
148.9
165.8
150.0
125.5
156.7
149.1
165.6
149.3
121.0
157.2
149.0
166.6
149.6
121.2
157.5
149.3
167.0
150.5
120.9
158.6
150.5
168.1
150.1
118.9
158.8
150.5
168.4
150.7
120.6
159.0
150.2
169.3
152.1
122.1
160.3
151.3
170.8
151.4
120.7
159.9
149.9
171.4
151.2
151.4
155.2
147.4
164.3
148.7
125.6
155.2
146.3
165.4
159.8
150.0
171.3
160.0
2.63
1.92
208.9
123.1
149.8
167.9
210.3
122.6
151.8
173.8
211.1
122.2
152.2
173.8
211.1
125.8
149.6
169.6
211.0
128.3
147.3
166.0
213.8
127.7
147.8
166.2
213.0
127.9
149.4
167.5
219.3
129.0
145.4
161.3
220.0
128.7
143.7
161.1
224.1
127.4
144.9
162.9
225.1
127.7
147.9
168.9
224.4
129.7
148.9
170.4
225.5
128.7
148.1
12.63
6.77
1.44
3.85
1.47
173.2
156.5
239.9
148.9
171.1
155.4
243.8
125.5
147.0
170.7
154.0
242.5
124.0
145.9
171.9
153.5
242.8
123.1
145.4
173.9
155.3
247.9
124.3
145.3
177.1
159.1
253.3
128.5
146.5
177.7
161.5
264.0
127.7
149.1
177.5
163.4
270.4
128.4
149.9
179.3
164.6
276.6
128.6
149.3
181.0
165.9
281.7
128.5
149.9
182.0
167.0
286.4
128.4
150.8
183.5
168.9
288.6
130.6
151.5
184.5
169.4
290.8
130.9
151.1
185.4
170.3
292.4
131.5
152.0
5.86
3.26
1.93
67
192.4
237.8
139.9
123.1
189.2
235.6
137.6
112.3
189.9
237.6
134.6
116.8
193.1
242.0
135.6
120.9
195.4
244.8
137.5
121.9
198.0
248.5
139.0
122.4
196.6
249.3
133.1
122.9
193.7
250.4
124.8
116.4
196.2
252.7
127.8
118.5
198.6
254.5
131.5
119.7
199.4
258.0
130.0
113.9
200.4
259.9
129.7
114.9
202.0
263.1
128.7
115.5
202.8
265.6
126.9
97.7
98.1
99.2
100.3
101.0
100.9
100.5
100.7
101.5
102.0
101.7
102.4
102.9
2.62
1.45
126.0
128.2
149.8
172.1
36 D e f e n s e a n d space
7.51
Intermediate products
37 Construction supplies
38 Business supplies
39 Commercial energy products...
6.42
6.47
1.14
140.9
134.1
163.6
173.4
138.5
163.7
174.0
140.6
164.1
173.2
142.6
164.2
174.0
145.2
165.5
175.4
148.4
166.6
175.5
148.9
166.4
174.0
149.0
165.1
174.7
147.9
164.7
175.2
146.5
165.6
179.0
143.6
166.3
178.0
143.2
167.3
177.8
142.9
172.3
20.35
4.58
5.44
10.34
5.57
143.0
107.8
187.2
135.3
105.3
131.3
96.8
176.3
122.8
89.9
133.9
102.8
176.6
125.2
91.4
139.5
108.3
179.1
132.4
100.7
146.1
113.1
184.2
140.6
114.7
147.4
113.8
186.1
142.0
114.3
150.0
114.7
189.7
144.7
116.6
150.6
114.3
188.9
146.6
118.6
152.2
118.4
191.1
146.7
118.3
151.8
119.7
192.8
144.3
113.8
152.8
121.1
194.0
145.1
114.3
152.3
123.0
193.1
143.8
112.3
153.1
123.1
194.5
144.5
112.5
152.5
120.9
195.1
144.2
10.47
171.5
161.3
171.3
174.3
175.1
179.6
180.2
179.9
177.5
179.3
179.0
177.9
177.0
177.1
7.62
1.85
164.8
112.7
142.6
196.7
160.0
139.7
176.5
114.3
148.0
215.3
169.7
139.0
180.8
113.7
148.6
223.4
168.9
138.4
182.4
115.2
149.5
225.2
166.5
139.2
187.6
112.2
151.1
235.9
169.9
139.7
187.6
114.8
150.5
234.7
173.0
141.0
187.3
115.1
151.0
233.8
172.3
141.8
185.1
114.4
152.6
229.5
168.7
139.6
186.8
115.1
152.2
232.4
172.0
139.7
187.3
114.9
150.9
233.9
167.8
140.5
184.8
113.7
149.8
230.4
172.1
140.0
184.1
114.4
149.0
228.9
171.0
138.9
184.5
4.15
1.70
1.14
177.7
117.4
145.6
217.2
165.9
138.2
52 Energy materials
53 Primary energy
54 Converted fuel materials
8.48
4.65
3.82
129.3
115.2
146.5
129.3
115.4
146.2
127.6
114.1
144.2
126.2
113.9
141.3
128.9
114.4
146.5
129.6
116.0
146.1
130.2
115.8
147.8
131.6
118.2
148.0
130.9
116.9
148.1
123.1
104.2
146.1
123.0
104.4
145.5
128.8
113.1
147.9
132.5
119.5
148.3
130.3
Supplementary groups
55 Home goods and clothing
56 Energy, total
57 Products
58 Materials
9.35
12.23
3.76
133.0
137.7
156.6
129.3
129.4
138.2
158.3
129.3
129.6
137.2
158.8
127.6
130.8
135.6
156.8
126.2
134.3
137.0
155.4
128.9
132.7
137.7
156.1
129.6
134.4
138.5
157.3
130.2
134.1
138.5
154.0
131.6
133.6
137.7
153.1
130.9
133.8
132.6
154.1
123.1
134.4
133.5
157.3
123.0
133.9
137.7
157.7
128.8
134.3
140.1
157.1
132.5
133.0
138.9
Materials
40 Durable goods materials
41 Durable consumer parts
42 Equipment parts
43 Durable materials n.e.c
44
Basic metal materials
45 Nondurable goods materials
46 Textile, paper, and chemical
materials
47
Textile materials
48
Paper materials
49
Chemical materials
50 Containers, nondurable
51 Nondurable materials n.e.c. . . .
1.62
162.8
130.3
Output
2.13
A49
Continued
Grouping
SIC
code
1967
proportion
1980
avg.
Aug.'
Oct. r
Sept.'
Nov. r
Dec
Jan. r
Feb. r
Mar. f
Apr. r
May r
June r
July''
Aug
Index (1967 = 100)
MAJOR INDUSTRY
12.05
6.36
5.69
3.88
87.95
35.97
51.98
149.5
132.7
168.3
189.7
146.7
161.2
136.7
149.9
129.6
172.6
196.6
141.2
157.6
129.9
149.5
130.7
170.6
193.7
143.9
161.0
132.1
148.9
132.1
167.7
189.6
146.5
162.1
135.7
151.5
135.1
169.9
192.6
148.9
163.0
139.2
152.4
138.6
167.9
189.5
150.4
165.0
140.3
153.3
140.4
167.6
189.3
151.1
165.6
141.0
154.1
143.1
166.4
187.1
151.2
166.2
140.8
154.8
143.2
167.8
188.9
151.6
165.3
142.1
150.5
135.2
167.6
188.6
152.0
165.9
142.5
152.1
135.4
170.7
192.9
152.8
166.4
143.5
155.8
141.0
172.5
195.4
152.5
166.0
143.1
157.8
145.6
171.3
193.0
153.0
166.9
143.5
157.1
145.2
170.3
191.9
152.5
167.0
142.4
10
11.12
13
14
.51
.69
4.40
.75
109.2
146.7
133.3
132.8
71.2
153.0
133.4
125.3
72.8
149.1
134.7
129.7
90.8
149.7
134.5
129.8
107.2
151.7
136.1
132.7
122.2
153.5
138.4
137.4
125.5
147.5
141.4
138.4
134.1
159.0
142.2
140.0
131.1
151.2
144.1
138.8
123.1
75.9
146.1
133.7
125.0
77.0
146.2
132.2
120.2
122.9
147.6
132.7
116.0
168.5
147.6
133.3
163.9
148.0
137.7
1 Mining and utilities
2
Mining
3
Utilities
Electric
4
5 Manufacturing
Nondurable
6
Durable
7
8
9
10
11
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals....
12
13
14
15
16
Nondurable manufactures
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
8.75
.67
2.68
3.31
3.21
149.6
119.9
138.6
127.0
151.1
148.7
118.7
134.8
125.5
146.8
149.9
119.7
133.2
123.5
153.6
151.1
123.6
134.3
121.7
153.4
151.6
123.5
136.4
125.7
154.3
151.0
118.8
135.6
122.7
157.0
151.9
123.5
138.4
123.8
156.5
152.5
125.4
139.3
121.6
156.0
152.4
125.7
136.2
120.2
157.6
151.9
122.2
138.9
121.6
157.0
152.2
122.3
138.8
122.6
155.9
150.8
120.1
138.5
121.1
153.4
154.9
155.2
17
18
19
20
21
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products.
Leather and products
27
28
29
30
31
4.72
7.74
1.79
2.24
.86
139.6
207.1
132.9
235.7
70.1
141.7
198.2
124.4
243.3
67.9
140.9
208.2
129.0
254.5
67.5
142.5
209.4
128.(1
258.8
70.1
142.1
211.7
128.6
258.9
71.0
143.0
220.5
131.3
262.3
67.9
143.9
218.9
133.1
264.0
68.9
144.8
219.8
131.5
270.2
68.3
142.7
218.5
130.3
269.5
68.8
141.6
219.8
130.0
275.2
68.9
141.3
220.6
129.8
280.3
69.8
143.3
219.7
129.3
285.8
68.9
144.4
221.2
129.0
286.4
69.4
131.2
Durable manufactures
22 Ordnance, private and
government
23 Lumber and products
24 Furniture and fixtures
25 Clay, glass, stone products ..
19.91
24
25
32
3.64
1.64
1.37
2.74
78.5
119.3
150.0
147.5
78.1
120.2
140.8
137.1
78.9
121.6
144.5
143.8
79.4
121.4
146.7
146.2
79.7
123.7
147.6
148.8
79.6
123.6
148.6
153.0
78.6
127.4
150.0
156.8
78.4
126.2
154.3
156.4
78.5
125.6
155.6
154.6
79.8
126.3
158.7
154.3
80.9
126.2
158.9
151.7
80.9
122.5
161.0
148.1
81.0
121.3
161.6
148.0
26
27
28
29
30
Primary metals
Iron and steel
Fabricated metal products...
Nonelectrical machinery
Electrical machinery
33
331.2
34
35
36
6.57
4.21
5.93
9.15
8.05
102.3
92.4
134.1
162.8
172.8
86.9
76.0
124.8
159.6
166.8
90.6
80.4
128.8
159.5
167.4
99.6
92.(1
131.7
160.9
169.8
113.2
107.6
132.3
162.9
173.0
111.5
103.0
135.7
166.9
175.1
114.1
108.7
135.8
167.3
177.6
114.5
108.4
137.6
168.3
174.9
114.9
108.0
139.2
169.2
177.4
110.6
103.4
139.5
169.7
178.8
111.9
105.6
138.4
172.1
179.9
107.2
98.5
139.2
173.8
180.1
108.3
99.7
139.4
176.0
181.9
107.5
31 Transportation equipment. . .
32
Motor vehicles and parts. .
33
Aerospace and miscellaneous transportation
equipment
34 Instruments
35 Miscellaneous manufactures .
37
371
9.27
4.50
116.9
119.0
108.5
104.1
113.3
113.7
118.3
123.2
121.8
129.2
120.4
125.7
117.4
120.0
116.1
119.9
119.5
127.1
121.3
130.7
123.7
136.4
123.4
137.5
120.1
131.0
115.0
121.0
372-9
38
39
4.77
2.11
1.51
114.9
171.1
148.3
112.7
168.6
145.5
112.8
168.1
144.6
113.7
169.6
145.0
114.9
170.0
147.1
115.4
171.9
151.0
114.9
173.9
152.9
112.6
171.1
154.9
112.3
170.0
155.4
112.4
170.0
157.3
111.8
170.6
157.0
110.2
171.3
159.6
109.8
173.6
161.3
109.3
174.5
159.8
151.6
144.8
82.2
138.4
177.2
181.3
Gross value (billions of 1972 dollars, annual rates)
MAJOR MARKET
36 Products, total
507.41
601.9
587.3
597.1
604.0
611.8
612.4
612.9
614.5
618.0
616.2
622.2
620.7
618.6
611.8
37 Final
38
Consumer goods .
39
Equipment
40 Intermediate
390.91
277.51
113.41
116.61
465.2
313.3
152.0
136.7
453.4
304.8
148.6
133.9
461.1
311.8
149.2
136.0
467.0
315.8
151.2
137.1
473.5
320.7
152.9
138.3
472.6
317.7
154.9
139.8
471.6
316.8
154.8
141.2
472.8
318.8
154.0
141.7
476.4
320.5
155.9
141.7
476.3
320.0
156.3
139.9
482.4
324.3
158.1
139.8
482.0
323.7
158.3
138.7
480.0
322.3
157.8
138.6
473.2
316.4
156.7
138.6
1. 1972 dollar value.
NOTE. Published groupings include some series and subtotals not shown separately. For description and historical data, see Industrial Production—1976 Revision
(Board of Governors of the Federal Reserve System: Washington, D.C.), December 1977.
A50
2.14
Domestic Nonfinancial Statistics • September 1981
H O U S I N G A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1980
Item
1978
1979
1981
1980
Dec.
Jan.
Feb.
Mar.
Apr. r
May'
June
July
Private residential real estate activity (thousands of units)
NEW UNITS
1 Permits authorized
2
1-family
3
2-or-more-family
1,801
1,183
618
1,552
981
571
1,191
710
481
1,249
753
496
1,214
715
499
1,165
677
488
1,153
678
475
1,186
689
497
1,167
654
513
4 Started
5
1-family
6 2-or-more-family
2,020
1,433
587
1,745
1,194
551
1,292
852
440
1,535
974
561
1,660
993
667
1,215
791
424
1,297
838
459
1,332
897
435
USS'
764
394
1,021
679
342
7 Under construction, end of period 1
8
1-family
9 2-or-more-family
1,310
765
546
1,140
639
501
896
515
382
915
535
381
940
544
397
938
541
397
533
394 r
913
526
388
897
507
389
860
485
374
n.a.
n.a.
n.a.
1,868
1,369
498
1,855
1,286
569
1,502
957
545
1,373
895
478
1,252
903
349
1,389
965
424
1,362r
880 r
482
1,519
964
555
1,260
867
393
1,368
859
509
n.a.
n.a.
n.a.
13 Mobile homes shipped
276
277
222
261
233
256
255
265
255
246
n.a.
Merchant builder activity in 1-family
units
14 Number sold
lb Number for sale, end of period 1
818
419
709
402
530
340
514
336
523
329
500
334
507
325
451 r
327
479 r
324
410 r
313
420
306
55.8
62.7
64.9
67.2
67.9
65.8
67.1
68.4
71.5
69.7 r
69.8
62.7
71.9
76.6
81.5
80.2
80.1
81.2
82.9 r
83.9
85.9
83.6
3,863
3,701
2,881
2,910
2,580
2,560
2,490
2,610
2,500
2,660
2,520
48.7
55.1
55.5
64.0
62.1
72.7
63.0
74.0
64.5
76.1
64.1
75.7
64.4
76.2
65.3
77.3
66.3
78.6
10 Completed
11
1-family
12 2-or-more-family
927 r
963 r
567
396
924
522
402
1,055
691
364
2
16
17
Price (thousands of dollars)
Median
Units sold
Units sold
EXISTING UNITS ( 1 - f a m i l y )
18 Number sold
Price of units sold (thous. of dollars)2
19 Median
20 Average
67.7 r
79.9
67.5
79.1
Value of new construction 3 (millions of dollars)
CONSTRUCTION
21 Total put in place
205,559
230,781
230,273
245,433
259,049
254,458
250,274
248,904
239,693r
238,673 r
235,144
22 Private
23 Residential
24 Nonresidential, total
Buildings
25
Industrial
26
Commercial
27
Other
28
Public utilities and other
159,664
93,423
66,241
181,690
99,032
82,658
174,896
87,260
87,636
187,875
98,898
88,977
193,877
100,686
93,191
193,155
99,684
93,471
189,641
96,266
93,375
192,465
98,287
94,178
188,204
94,233
93,971
186,936
91,441
95,495
185,088
87,878
97,210
29 Public
30 Military
31 Highway
32 Conservation and development
33 Other
10,993
25,137'
6,739
23,372'
14,953
34,381 r
7,427
25,897'
13,839
43,260 r
8,654
21,883''
14,293
45,294 r
9,268
20,122'
15,339
48,459 r
9,891
19,502r
15,094
49,359'
9,938
19,080r
15,380
49,448'
9,588
18,959'
15,505
33,394
9,196
36,083
15,503'
32,391
8,903
37,174
16,243''
32,442
9,735
37,075
16,336
33,687
9,179
38,008
45,896
1,501
10,708
4,457
29,230
49,088 r
1,648
11,998
4,586
30,856'
55,371 r
1,880
13,784
5,089
34,618'
57,558
1,743
13,127
5,383
37,305
65,173
1,810
19,428r
6,285
37,650
61,302
2,173
17,832r
6,168
35,129
60,632'
1,685
16,200'
5,565
37,182
56,439
1,915
15,099'
5,681
33,744
51,489
1,752
12,419
4,894
32,424
51,737
1,836
13,338
4,912
31,651
50,056
1,776
12,430
5,192
30,658
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly comparable
with data in prior periods due to changes by the Bureau of the Census in its
estimating techniques. For a description of these changes see Construction Reports
(C-30-76-5), issued by the Bureau in July 1976.
NOTE. Census Bureau estimates for all series except (a) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing Institute
and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing
units, which are published by the National Association of Realtors. All back and
current figures are available from originating agency. Permit authorizations are
those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978.
Prices
2.15
A51
C O N S U M E R A N D P R O D U C E R PRICES
Percentage changes based on seasonally adjusted data, except as noted
12 months to
1980
Item
1980
July
1 month to
3 months (at annual rate) to
Index
level
July
1981
(1967
= 100)>
1981
1981
1981
July
Sept.
Dec.
Mar.
June
Mar.
Apr.
May
June
July
CONSUMER PRICES 2
1 All items
13.2
10.7
7.8
13.2
9.6
7.4
.6
.4
.7
.7
1.2
274.4
2 Commodities
3 Food
4
Commodities less food
Durable
5
6
Nondurable
7 Services
8 Rent
9
Services less rent
11.2
7.6
12.8
8.9
17.7
16.1
9.2
17.1
8.9
8.4
9.2
9.4
8.8
13.4
8.2
14.1
13.2
19.7
10.6
15.2
5.0
.7
8.6
-.3
11.0
13.1
9.9
11.8
6.2
16.8
9.6
17.8
8.9
2.1
12.3
-.7
29.8
10.3
7.0
10.9
2.1
-.1
3.1
9.0
-2.0
15.1
7.7
16.1
.5
.4
.5
-.1
1.3
.8
.5
.8
.0
.0
.0
.3
-.2
1.0
.6
1.0
.2
-.2
.4
.9
-.2
1.4
.8
1.5
.4
.2
.4
1.0
.1
1.2
.4
1.3
.8
.8
.7
1.2
.1
1.8
.5
2.0
255.0
276.2
242.6
229.6
257.5
308.8
207.8
328.1
14.4
12.4
19.9
11.3
11.1
13.5
5.7
5.8
-3.5
13.2
14.4
23.1
11.7
5.8
3.1
9.0
11.8
16.9
.7
.3
.5
.6
.7
.9
1.1
1.7
.8
1.0
1.5
1.3
1.4
2.1
272.7
259.0
358.0
14.6
15.6
7.5
19.8
10.9
15.4
8.8
8.4
6.3
9.1
10.4
10.2
13.5
14.5
31.0
7.5
9.9
7.8
8.3
7.4
4.3
8.9
11.8
12.9
13.3'
13.6'
1.6'
18.6'
12.0'
14.3'
5.8'
4.9'
.5'
6.6
10.1'
7.4'
1.2'
1.3'
1.0'
1.5'
.7
1.3'
.8
.8
-.1'
1.1
.9
1.0'
.1'
-.1'
.-.2'
.0'
.8'
.5'
.6
.5
.5
.5
.7
.3
.4
.3
1.5
.7
.5
271.3
272.6
256.9
277.1
265.7
312.8
18.5
3.9
23.9
1.4
32.3
73.9
27.5
-4.0
39.7'
-23.1
6.5'
8.5
- ,4R
1.3'
1.5
.8'
-2.2
-.5
2.8
.8
.3
484.2
267.0
Other groupings
All items less food
All items less food and energy
12 Homeownership
1U
11
.4
PRODUCER PRICES
13 Finished goods
14
Consumer
15
Foods
16
Excluding foods
17 Capital equipment
18 Intermediate materials 3
Crude materials
19
Nonfood
20
Food
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers.
-2.0
-.1
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
A52
2.16
Domestic Nonfinancial Statistics • September 1981
GROSS N A T I O N A L P R O D U C T A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1981
1980
1978
Q2
Ql
Q4
Q3
GROSS NATIONAL PRODUCT
2,156.1
2,413.9
2,626.1
2,564.8
2,637.3
2,730.6
2,853.0
1,348.7
199.3
529.8
619.6
1,510.9
212.3
1,672.8
211.9
675.7
785.2
1,626.8
1,682.2
208.8
1,751.0
223.3
703.5
824.2
1,810.0
674.2
799.2
375.3
353.2
242.0
78.7
163.3
111.2
106.9
415.8
398.3
279.7
96.3
183.4
113.9
395.3
401.2
296.0
108.8
187.1
105.3
100.3
390.9
383.5
289.8
108.4
181.4
93.6
88.9
377.1
393.2
294.0
107.3
186.8
99.2
94.5
397.7
415.1
302.1
111.5
190.7
113.0
107.6
437.1
432.7
315.9
117.2
198.7
116.7
111.4
22.2
17.5
13.4
-5.9
-4.7
7.4
-16.0
6.1
-12.3
-17.4
-14.0
4.5
21.8
15 Net exports of goods and services .
16
Exports
17
Imports
-0.6
219.8
220.4
13.4
281.3
267.9
23.3
339.8
316.5
17.1
333.3
316.2
44.5
342.4
297.9
23.3
346.1
322.7
29.2
367.4
338.2
18 Government purchases of goods and services .
19
Federal
20
State and local
432.6
153.4
279.2
473.8
167.9
305.9
534.7
198.9
335.8
530.0
198.7
331.3
533.5
194.9
338.6
558.6
212.0
346.6
576.5
221.6
354.9
2,133.9
946.6
409.8
536.8
976.3
233.2
2,396.4
1,055.9
451.2
604.7
1,097.2
260.8
2,632.0
1,130.4
458.6
671.9
1.229.6
266.0
2,557.4
1,106.4
444.6
661.8
1,205.6
252.8
2.653.4
1,129.4
456.5
672.9
1,249.0
258.9
2,748.0
1,169.0
476.7
692.2
1,285.3
276.4
2,848.5
1,247.5
501.4
746.1
1,317.1
288.4
22.2
17.8
4.4
17.5
11.5
6.0
-5.9
-4.0
-1.8
7.4
3.3
4.1
-16.0
-17.4
.7
4.5
-4.2
1,436.9
1,483.0
1.480.7
1,463.3
1,471.9
1,485.6
1,516.4
31 Total
1,745.4
1,963.3
2.121.4
2,070.0
2,122.4
2,204.8
2,291.1
32 Compensation of employees
33
Wages and salaries
34
Government and government enterprises.. .
35
Other
36
Supplement to wages and salaries
37
Employer contributions for social insurance
38
Other labor income
1.299.7
1,105.4
219.6
885.7
194.3
92.1
1,460.9
1,235.9
235.9
118.6
1,569.0
1,320.4
250.5
1,069.9
248.6
113.6
135.1
1,597.4
1.342.3
253.9
1.088.4
255.0
116.0
139.1
1,661.8
102.2
1.596.5
1.343.6
253.6
1,090.0
252.9
115.8
137.1
1,397.3
263.3
1,134.0
264.5
121.0
143.5
1,722.4
1,442.9
267.1
1,175.7
279.5
131.5
148.0
117.1
91.0
131.6
100.7
30.8
130.6
107.2
23.4
124.9
101.6
23.3
129.7
107.6
134.0
111.6
22.5
132.1
113.2
18.9
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
0
Producers' durable equipment
1
Residential structures
2
Nonfarm
13
14
Change in business inventories.
Nonfarm
By major type of product
21 Final sales, total
22
Goods
23
Durable
24
Nondurable
25
Services
26
Structures
27 Change in business inventories.
28
Durable goods
29
Nondurable goods
30 MEMO: Total GNP in 1972 dollars
602.2
696.3
118.6
194.4
664.0
768.4
-8.4
-7.7
238.3
726.0
845.8
6.8
-18.1
NATIONAL INCOME
39 Proprietors' income 1
40
Business and professional 1
41
Farm 1
42 Rental income of persons 2
43 Corporate profits 1
44
Profits before tax 3
45
Inventory valuation adjustment .
46
Capital consumption adjustment
47 Net interest
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustments.
26.1
1,000.0
225.0
106.4
22.1
27.4
30.5
31.8
31.5
32.0
32.4
32.7
199.0
223.3
-24.3
-13.5
196.8
255.4
-42.6
-15.9
182.7
245.5
-45.7
-17.2
169.3
217.9
-31.1
-17.6
177.9
237.6
-41.7
-17.9
183.3
249.5
-48.4
-17.8
203.0
257.0
-39.2
-14.7
115.8
143.4
179.8
175.3
185.3
193.3
200.8
3. For after-tax profits, dividends, and the like, see table 1.49.
SOURCE. Survey of Current Business (Department of Commerce).
National Income Accounts
2.17
A53
PERSONAL INCOME A N D SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1981
1980
Account
1979
1978
1980
Q2
Q3
Q4
Q2 r
Q1
PERSONAL INCOME AND SAVING
1 Total personal income
1,721.8
1,943.8
2,160.2
2,114.5
2,182.1
2,256.2
2,319.8
2,368.9
2 Wage and salary disbursements
3 Commodity-producing industries
4
Manufacturing
Distributive industries
6
Service industries
1
Government and government enterprises
1,105.2
389.1
299.2
270.5
226.1
219.4
1,236.1
437.9
333.4
303.0
259.2
236.1
1,343.7
465.4
350.7
328.9
295.7
253.6
1,320.4
456.0
343.2
323.2
290.8
250.5
1,341.8
460.1
346.7
329.2
298.7
253.9
1,397.8
484.0
364.0
340.6
310.0
263.3
1,442.9
501.3
377.4
351.9
322.5
267.1
1,466.2
507.9
386.6
357.5
330.5
270.8
102.2
117.2
91.0
26.1
27.4
43.1
173.2
223.3
116.2
118.6
131.6
100.8
30.8
30.5
48.6
209.6
249.4
131.8
137.1
130.6
107.2
23.4
31.8
54.4
256.3
294.2
153.8
135.1
124.9
101.6
23.3
31.5
54.2
253.6
280.7
144.7
139.1
129.7
107.6
22.1
32.0
55.1
261.8
310.7
163.2
143.5
134.0
111.6
22.5
32.4
56.1
269.7
313.9
165.3
148.0
132.1
113.2
18.9
32.7
58.0
288.7
319.6
169.8
151.8
134.1
112.5
21.7
33.3
60.2
301.9
324.2
172.0
69.6
80.6
87.9
85.9
88.1
91.2
102.3
103.1
2,368.9
8
9
in
11
12
n
14
Other labor income
Proprietors' income 1
Business and professional 1
Farm 1
Rental income of persons 2
Dividends
Personal interest income
15 Transfer payments
16 Old-age survivors, disability, and health insurance benefits
17
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
19
LESS: Personal tax and nontax payments
1,721.8
1,943.8
2,160.2
2,114.5
2,182.1
2,256.2
2,319.8
258.8
302.0
338.5
330.3
341.5
359.2
372.0
382.7
20 EQUALS: Disposable personal income
1,462.9
1,641.7
1,821.7
1,784.1
1,840.6
1,897.0
1,947.8
1,986.2
21
LESS: Personal outlays
1,386.6
1,555.5
1,720.4
1,674.1
1,729.2
1,799.4
1,858.9
1,881.0
22 EQUALS: Personal saving
76.3
86.2
101.3
110.0
111.4
97.6
88.9
105.2
6,426
4,046
4,389
5.2
6,588
4,135
4,493
5.2
6,503
4,108
4,473
5.6
6,438
4,044
4,435
6.2
6,456
4,082
4,468
6.1
6,499
4,142
4,488
5.1
6,619
4,191
4,511
4.6
6,568
4,163
4,515
5.3
27 Gross saving
355.2
412.0
401.9
394.5
402.0
406.7
442.6 R
459.2
28
29
30
31
355.4
76.3
57.9
-24.3
398.9
86.2
59.1
-42.6
432.9
101.3
44.3
-45.7
435.9
110.0
42.1
-31.1
446.5
111.4
42.8
-41.7
436.4
97.6
40.4
-48.4
451.1'
88.9
55.7'
-39.2
472.1
105.2
50.2
-23.2
136.4
84.8
.0
155.4
98.2
.0
175.4
111.8
.0
173.0
110.7
.0
178.4
113.4
.5
183.2
115.8
-.5
187.5
119.0
.0
194.6
122.1
0
-0.2
-29.2
29.0
11.9
-14.8
26.7
-32.1
-61.2
29.1
-29.6
-66.5
23.9
-45.6
-74.2
28.6
-30.8
-67.9
37.1
-9.7'
-46.6'
36.9r
-14.0
-50.0
36.0
MEMO:
Per capita (1972 dollars)
23 Gross national product
Personal consumption expenditures
24
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
Gross private saving
Personal saving
Undistributed corporate profits 1
Corporate inventory valuation adjustment
Capital consumption allowances
37 Corporate
33 Noncorporate
34 Wage accruals less disbursements
35 Government surplus, or deficit ( —), national income and product
accounts
36 Federal
37 State and local
i.r
1.1
.0
1.1
1.1
1.1
1.1
1.1
39 Gross investment
361.6
414.1
401.2
392.5
405.0
400.1
446.0
452.3
40 Gross private domestic
41 Net foreign
375.3
-13.8
415.8
-1.7
395.3
5.9
390.9
1.7
377.1
27.8
397.7
2.3
437.1
8.8 r
455.8
-3.5
6.4
2.2
-.7
-1.9
3.0
-6.6
38 Capital grants received by the United States, net
42 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3.4
SOURCE. Survey of Current Business (Department of Commerce).
-6.9
A54
3.10
International Statistics • September 1981
U.S. I N T E R N A T I O N A L T R A N S A C T I O N S Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted.
1980
Item credits or debits
1978
Q2
QL
1 Balance on current account
2
Not seasonally adjusted
3
4
5
6
7
8
9
10
2
Merchandise trade balance
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net 3
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)
1981
1979
Q4
Q3
Q1P
-14,075
1,414
3,723
-2,095
-1,575
-545
905
4,975
1,149
1,390
3,244
3,087
3,368
-33,759
142,054
-175,813
738
21,400
2,613
-27,346
184,473
-211,819
-1,947
33,462
2,839
-25,342
223,966
-249,308
-2,515
32,762
5,874
-10,126
54,898
-65,024
-918
9,836
991
-6,744
55,667
-62,411
-427
6,518
1,440
-2,902
56,252
-59,154
-455
8,154
1,681
-5,570
57,149
-62,719
-715
8,257
1,762
-4,602
61,117
-65,719
-701
8,869
1,033
-1,884
-3,183
-2,057
-3,536
-2,397
-4,659
-542
-1,336
-545
-787
-591
-912
-720
-1,624
-562
-950
11 Change in U.S. government assets, other than official reserve assets, net (increase, - )
-4,644
-3,767
-5,165
-1,456
-1,187
-1,427
-1,094
-1,358
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
732
-65
1,249
4,231
-4,683
-1,132
-65
-1,136
-189
257
-8,155
-3,268
-502
-1,109
-4,279
-4,529
-1,152
-34
-2,082
-112
-261
-1,667
-6,472
-99
-294
-554
1,285
-1,240
-4,324
-1,441
-707
-2,381
17 Change in U.S. private assets abroad (increase, - ) 3
18
Bank-reportea claims
19
Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net 3
-57,158
-33,667
-3,853
-3,582
-16,056
-57,739
-26,213
-3,026
-4,552
-23,948
-71,456
-46,947
-2,653
-3,310
-18,546
-7,915
-1,203
-1,083
-766
-4,863
-24,152
-20,165
92
-1,369
-2,710
-16,766
-12,440
343
-3,851
-22,622
-13,139
-2,005
-356
-7,122
-12,633
-11,163
n.a.
-488
-982
22 Change in foreign official assets in the United States
(increase, + )
23
U.S. Treasury securities
24
Other U.S. government obligations
25
Other U.S. government liabilities 4
26
Other U.S. liabilities reported by U.S. banks
27
Other foreign official assets 5
33,561
23,555
666
2,359
5,551
1,4530
-13,757
-22,435
463
-133
7,213
1,135
15,492
9,683
2,187
636
-159
3,145
-7,462
-5,357
801
-7,557
-4,360
250
420
-1,676
851
7,686
3,769
549
80
1,823
1,465
7,712
6,911
587
205
-460
469
5,384
7,055
454
55
-3,009
829
28 Change in foreign private assets in the United States
(increase, + ) ?
29
U.S. bank-reported liabilities
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
33
Foreign direct investments in the United States, net 3 . . . .
30,187
16,141
1,717
2,178
2,254
7,896
52,703
32,607
2,065
4,820
1,334
11,877
34,769
10,743
5,109
2,679
5,384
10,853
14,971
6,599
416
3,300
2,435
-326
-4,509
1,092
-1,260
468
3,883
3,965
916
373
-254
241
2,689
16,157
7,737
3,228
893
2,240
2,059
2,157
-3,662
n.a.
1,405
2,449
1,965
0
1,139
21,140
1,152
29,640
1,152
6,073
1,093
6,799
-344
34 Allocation of SDRs
35 Discrepancy
36
Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
11,398
0
-16
0
-68
-3,198
360
2,221
-206
0
0
-818
0
0
0
0
18,151
1,355
2,676
-3,291
2,736
2,139
6,279
adjustment
0
7,143
MEMO:
Changes in official assets
U.S. official reserve assets (increase, ~)
Foreign official assets in the United States
(increase, + )
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
732
-1,132
-8,155
-3,268
502
-1,109
-4,279
-4,529
31,202
-13,624
14,856
-7,394
7,137
7,606
7,507
5,329
-1,137
5,543
12,744
4,617
4,115
1,024
236
305
635
155
125
211
1. Seasonal factors are no longer calculated for lines 12 through 41.
2. Data are on an international accounts (IA) basis. Differs from the Census
basis data, shown in table 3.11, for reasons of coverage and timing; military exports
are excluded from merchandise data and are included in line 6.
3. Includes reinvested earnings of incorporated affiliates.
4. Primarily associated with military sales contracts and other transactions arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current
(U.S. Department of Commerce).
Business
Trade and Reserve Assets
3.11
A55
U. S. F O R E I G N T R A D E
Millions of dollars; monthly data are seasonally adjusted.
1981
Item
1978
1979
1980r
Jan.
1
EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments .:
2
GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded
warehouses
3
Trade balance
143,682
181,860
220,626
Mar
19,764
21,434
Apr.
19,818
May
18,869
June
July
19,870
19,264
174,759
209,458
244,871
23,194
21,922
20,949
22.289
21.310
21,975
19,807
-31,075
-27,598
-24,245
-4,369
-2,158
485
-2,471
-2,441
-2,105
-542
NOTE. The data in this table are reported by the Bureau of Census data on a
free-alongside-ship (f.a.s.) value basis—that is, value at the port of export. Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in the Census
basis trade data; this adjustment has been made for all data shown in the table.
The Census basis data differ from merchandise trade data shown in table 3.10.
U.S. International Transactions Summary, for reasons of coverage and timing. On
the export side, the largest adjustments are: (a) the addition of exports to Canada
not covered in Census statistics, and (b) the exclusion of military sales (which are
combined with other military transactions and reported separately in the "service
3.12
18,825
Feb.
account" in table 3.10, line 6). On the import side, additions are made for gold,
ship purchases, imports of electricity from Canada and other transactions; military
payments are excluded and shown separately as indicated above.
SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(U.S. Department of Commerce, Bureau of the Census).
U.S. R E S E R V E ASSETS
Millions of dollars, end of period
1981
Type
1978
1979
1980
Feb.
Mar.
Apr.
May
June
July
Aug.?
1
Total 1
18,650
18,956
26,756
29,682
30,410
29,693
29,395
29,582
28,870
29,265
2
Gold stock, including Exchange Stabilization Fund 1
11,671
11,172
11.160
11,156
11,154
11.154
11,154
11,154
11,154
11,154
3
Special drawing rights2-3
1,558
2,724
2,610
3,633
3,913
3,712
3,652
3,689
3,717
3,739
4
Reserve position in International Monetary Fund 2
1,047
1,253
2,852
3,110
3,448
3,576
3,690
3,988
4,157
4,341
5
Foreign currencies 4 - 5
4,374
3.807
10,134
11,783
11,895
11,251
10,899
10,751
9,842
10,031
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
3.22.
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:
S867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1. 1980; and $1,093
million on Jan. 1, 1981; plus net transactions in SDRs.
4. Beginning November 1978, valued at current market exchange rates.
5. Includes U.S. government securities held under repurchase agreement against
receipt of foreign currencies, if any.
A56
3.13
International Statistics • September 1981
F O R E I G N B R A N C H E S OF U.S. B A N K S
Balance Sheet Data
Millions of dollars, end of period
1980
Asset account
1977
19781
1981
1979
Dec.
Jan.
Feb.
fvlar.
Apr.
May
June?
All foreign countries
1 Total, all currencies
2 Claims on United States
3
Parent bank
4
Other
5 Claims on foreigners
6
Other branches of parent bank
7 Banks
8 Public borrowers 2
9
Nonbank foreigners
10 Other assets
11 Total payable in U.S. dollars
12 Claims on United States
13 Parent bank
14 Other
15 Claims on foreigners
16 Other branches of parent bank
17 Banks
18 Public borrowers 2
19 Nonbank foreigners
20 Other assets
258,897
306,795
364,233
397,516
397,683'
401,092'
410,087
410,765'
416,639
422,915
11,623
7,806
3,817
17,340
12,811
4,529
32,302
25,929
6,373
28,459
20,202
8,257
29,534
20,674 r
8,860
31,923
21,369
10,554
30,256
18,781
11,475
34,519'
23,086'
11,433'
38,645
28,012
10,633
35,203
24,309
10,894
238,848
55,772
91,883
14,634
76,560
278,135
70,338
103,111
23,737
80,949
317,175
79,661
123,413
26,072
88,029
351,435
76,574'
144,674'
27,845
102,342
350,343'
75,622 r
144,821'
27,841'
102,059'
351,101
75,514'
146,187'
28,138
101,262'
361,413
77,631'
150,576'
28,758
104,448
357,823'
76,781'
148,015'
28,123'
104,904'
358,997
76,191
148,582
27,713
106,511
368,667
79,832
154,758
27,806
106,271
8,425
11,320
14,756
17,622
17,806'
18,068'
18,418
18,423'
18,997
19,045
193,764
224,940
267,711
290,017
292,746'
296,916'
302,851
307,064'
312,279
320,303
11,049
7,692
3,357
16,382
12,625
3,757
31,171
25,632
5,539
27,190
19,896
7,294
28,278
20,382
7,896
30,660
21,107
9,553
29,063
18,566
10,497
33,306
22,839
10,467
37,403
27,709
9,694
33,949
24,039
9,910
178,896
44,256
70,786
12,632
51,222
203,498
55,408
78,686
19,567
49,837
229,118
61,525
96,261
21,629
49,703
253,647
58,295'
116.020'
23,458
55,874
254,877'
58,849'
116,920'
23,269 r
55,839'
256,332
57,921'
118,411'
23,561
56,439'
263,641
59,870'
121,455r
24,035
58,281
263,252'
59,498 r
120,558'
23,767
59,429'
263,871
58,704
121,554
23,194
60,419
275,208
62,696
128,124
23,488
60,900
3,820
5,060
7,422
9,591'
9,924'
10,147
10,506'
11,005
11,146
9,180
United Kingdom
21 Total, all currencies
22 Claims on United States
23 Parent bank
24
Other
25 Claims on foreigners
26 Other branches of parent bank
27
Banks
28 Public borrowers 2
29 Nonbank foreigners
30 Other assets
31 Total payable in U.S. dollars
32 Claims on United States
33 Parent bank
34
Other
35 Claims on foreigners
36
Other branches of parent bank
37 Banks
38 Public borrowers 2
39 Nonbank foreigners
40 Other assets
90,933
106,593
130,873
142,781
143,609
144,708
145,459
142,582
146,640
149,704
4,341
3,518
823
5,370
4,448
922
11,117
9,338
1,779
7,508
5,275
2,233
7,727
5,278
2,449
9,126
6,386
2,740
9,413
6,405
3,008
8,518
5,766
2,752
10,382
7,666
2,716
9,640
7,098
2,542
84,016
22,017
39,899
2,206
19,895
98,137
27,830
45,013
4,522
20,772
115,123
34,291
51,343
4,919
24,570
129,232
34,538
57,658
6,684
30,352
130,174
35,136
58,489
6,620
29,929
129,646
35,406
58,554
6,626
29,060
129,992
34,583
58,714
6,929
29,766
128,095
34,614
56,816
6,844
29,821
130,200
34,834
57,611
6,720
31,035
134,102
35,914
60,261
6,811
31,116
2,576
3,086
4,633
6,041
5,708
5,936
6,054
5,969
6,058
5,962
66,635
75,860
94,287
98,913
101,038
102,954
102,933
101,506
104,959
108,854
4,100
3,431
669
5,113
4,386
727
10,746
9,297
1,449
7,115
5,229
1,886
7,304
5,221
2,083
8,671
6,324
2,347
9,001
6,381
2,620
8,080
5,715
2,365
9,932
7,611
2,321
9,150
7,059
2,091
61,408
18,947
28,530
1,669
12,263
69,416
22,838
31,482
3,317
11,779
81,294
28,928
36,760
3,319
12,287
88,950
28,231
41,373
4,909
14,437
90,682
28,768
42,887
4,816
14,211
91,204
28,946
42,751
4,930
14,577
90,696
28,132
42,609
5,168
14,787
90,199
28,393
41,767
5,093
14,946
91,632
28,527
42,786
4,967
15,352
96,240
29,725
45,631
5,123
15,761
1,126
1,331
2,247
2,848
3,052
3,079
3,236
3,227
3,395
3,464
Bahamas and Caymans
41 Total, all currencies
42 Claims on United States
43 Parent bank
44 Other
45 Claims on foreigners
46
Other branches of parent bank
47
Banks
48
Public borrowers 2
49
Nonbank foreigners
50 Other assets
51 Total payable in U.S. dollars
For notes see opposite page.
79,052
91,735
108,977
123,837
123,541r
124,807'
127,801
132,063'
133,513
135,081
5,782
3,051
2,731
9,635
6,429
3,206
19,124
15,196
3,928
17,751
12,631
5,120
18,370
12,842
5,528
19,150
12,417
6,733
17,348
10,017
7,331
22,473
14,908
7,565
24,531
17,511
7,020
21,809
14,475
7,334
71,671
11,120
27,939
9,109
23,503
79,774
12,904
33,677
11,514
21,679
86,718
9,689
43,189
12,905
20,935
101,926
13,342'
54,861 r
12,577
21,146
100,822r
12,974'
54,237 r
12,569'
21,042 r
101,199
11,996'
55,263'
12,605
21,335 r
105,970
14,022'
57,045'
12,579
22,324
105,001'
13,107'
57,325'
12,205
22,364'
104,117
12,235
56,995
12,169
22,718
108,488
13,569
59,715
12,038
23,166
1,599
2,326
3,135
4,160
4,349 r
4,458'
4,483
73,987
85,417
102,368
117,654
117,630r
119,005'
121,900
4,589
126,429'
4,865
4,784
127,965
129,438
Overseas Branches
3.13
A57
Continued
1980
Liability account
1977
19781
1981
1979
Dec.
Jan.
Feb.
Mar.
Apr.'
May
June?
All foreign countries
52 Total, all currencies
53 To United States
54
Parent bank
55
Other banks in United States
56 Nonbanks
57 To foreigners
58
Other branches of parent bank
59
Banks
60
Official institutions
61 Nonbank foreigners
62 Other liabilities
63 Total payable in U.S. dollars
64 To United States
65
Parent bank
66
Other banks in United States
67
Nonbanks
68 To foreigners
69
Other branches of parent bank
70
Banks
71
Official institutions
72
Nonbank foreigners
73 Other liabilities
285,897
306,795
364,233
397,516
397,683'
401,092'
410,765
416,639
422,915
44,154
24,542
58,012
28,654
12,169
17,189
66,686
24,530
13,968
28,188
90,996
39,176
14,473
37,272
92,466'
38,679
13,649'
40,118
90,714'
36,431'
13,959
40,324
97,671'
43,020'
14,372
40,279
105,774
45,277
15,531
44,966
105,453
41,020
16,293
48,140
109,450
44,328
16,140
48,982
206,579
53,244
94,140
28,110
31,085
238,912
67,496
97,711
31,936
41,769
283,344
77,601
122,849
35,664
47,230
292,013
74,032
130,743
32,448
54,790
290,926'
73,084
133,057'
28,951
55,834'
296,500'
73,766'
134,865'
28,602
59,267'
297,983
75,321'
133,714'
29,871
59,077
290,138
74,487
128,828
28,024
58,799
295,818
75,807
133,210
27,464
59,337
298,036
79,032
131,828
26,347
60,829
410,087
14,853
15,368
15,429
318,469
324,081
332,288
95,259'
41,508'
14,235
39,516
103,330
43,801
15,363
44,166
103,088
39,585
16,167
47,336
106,868
42,823
15,949
48,096
210,636'
56,896'
91,655'
21,896
40,189'
209,459
58,508'
87,520'
23,102
40,329
205,565
58,096
86,000
21,445
40,024
211,412
59,100
89,586
21,340
41,386
215,798
62,291
89,919
20,848
42,740
8,572'
8,892'
9,574
9,581
9,622
8,163
9,871
14,203
14,582
14,311'
13,878'
198,572
230,810
273,819
301,139
303,449'
307,533'
42,881
24,213
55,811
27,519
11,915
16,377
64,530
23,403
13,771
27,356
88,131
37,504
14,203
36,424
89,817'
37,021
13,475'
39,321
88,325'
34,955'
13,757
39,613
151,363
43,268
64,872
23,972
19,251
169,927
53,396
63,000
26,404
27,127
201,476
60,513
80,691
29,048
31,224
204,834
57,050
86,642
24,692
36,450
205,360'
56,972
89,438'
21,863
37,087'
4,328
5,072
7,813
8,174
8,272'
14,433'
313,610
United Kingdom
74 Total, all currencies
75 To United States
76
Parent bank
77
Other banks in United States
78
Nonbanks
79 To foreigners
80
Other branches of parent bank
81
Banks
82
Official institutions
83 Nonbank foreigners
84 Other liabilities
85 Total payable in U.S. dollars
86 To United States
87
Parent bank
88
Other banks in United States
89
Nonbanks
90 To foreigners
91
Other branches of parent bank
92
Banks
93
Official institutions
94
Nonbank foreigners
95 Other liabilities
90,933
106,593
130,873
142,781
143,609
144,708
145,459
142,582
146,640
149,704
7,753
1,451
9,730
1,887
4,189
3,654
20,986
3,104
7,693
10,189
21,735
4,176
5,716
11,843
23,226
4,228
5,436
13,562
22,754
3,190
5,840
13,724
24,374
4,242
5,519
14,613
26,008
4,542
5,915
15,551
26,826
4,378
5,965
16,483
29,735
4,372
6,172
19,191
80,736
9,376
37,893
18,318
15,149
93,202
12,786
39,917
20,963
19,536
104,032
12,567
47,620
24,202
19,643
115,582
13,933
55,928
21,412
24,309
115,236
13,734
57,371
19,199
24,932
116,862
13,335
57,527
19,591
26,409
115,816
13,913
56,110
19,743
26,050
111,486
13,491
53,563
18,385
26,047
114,517
14,169
56,238
18,503
25,607
114,996
14,995
55,933
17,192
26,846
2,445
3,661
5,855
5,464
5,147
5,092
5,269
5,088
5,297
5,003
67,573
77,030
95,449
102,300
104,123
106,354
106,637
105,847
109,209
113,427
7,480
1,416
6 064
9,328
1,836
4,101
3,391
20,552
3,054
7,651
9,847
21,080
4,078
5,626
11,376
22,597
4,126
5,343
13,128
22,245
3,132
5,757
13,356
23,927
4,160
5,487
14,280
25,499
4,447
5,841
15,211
26,359
4,308
5,911
16,140
28,995
4,278
6,094
18,623
58,977
7,505
25,608
15,482
10,382
66,216
9,635
25,287
17,091
14,203
72,397
8,446
29,424
20,192
14,335
78,512
9,600
35,177
17,024
16,711
78,768
9,591
36,463
14,941
17,773
81,006
9,097
37,007
15,404
19,498
79,501
9,297
34,553
15,718
19,933
77,212
9,168
34,117
14,473
19,454
79,575
9,327
35,899
14,846
19,503
81,411
10,288
36,711
13,995
20,417
1,116
1,486
2,500
2,708
2,758
3,103
3,209
3,136
3,275
3,021
127,801
Bahamas and Caymans
79,052
91,735
108,977
123,837
123,541'
124,807'
132,063
133,513
135,081
97 To United States
98
Parent bank
99
Other banks in United States
100 Nonbanks
32,176
20,956
39,431
20,482
6,073
12,876
37,719
15,267
5,204
17,248
59,666
28,181
7,379
24,106
58,986'
26,563
7,184'
25,239
58,664'
26,279'
7,165
25,220
64,026'
31,741'
7,883
24,402
69,478
32,925
8,618
27,935
69,048
29,583
9,297
30,168
69,407
32,160
8,822
28,425
101 To foreigners
102
Other branches of parent bank
103 Banks
104 Official institutions
105 Nonbank foreigners
45,292
12,816
24,717
3,000
4,759
50,447
16,094
23,104
4,208
7,041
68,598
20,875
33,631
4,866
9,226
61,218
17,040
29,895
4,361
9,922
61,618'
17,819
30,052'
4,204
9,543'
63,266'
18,783'
30,287'
3,663
10,533'
60,875
17,437'
28,670'
4,403
10,365
59,344
17,788
27,133
4,079
10,344
61,090
17,950
28,768
3,666
10,706
62,470
19,484
28,326
3,685
10,975
96 Total, all currencies
106 Other liabilities
107 Total payable in U.S. dollars
1,584
1,857
2,660
2,953
2,937'
2,877'
74,463
87,014
103,460
119,657
119,295'
120,712'
1. In May 1978 the exemption level for branches required to report was increased,
which reduced the number of reporting branches.
2. In May 1978 a broader category of claims on foreign public borrowers, in-
2,900'
123,785
3,241
3,375
3,204
128,235
129,807
131,120
eluding corporations that are majority owned by foreign governments, replaced
the previous, more narrowly defined claims on foreign official institutions.
A58
3.14
International Statistics • September 1981
S E L E C T E D U.S. LIABILITIES TO F O R E I G N OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1981
Item
1979r
1978r
1980r
Feb.
1 Total1
2
3
4
5
6
7
8
9
10
11
12
By type
Liabilities reported by banks in the United States2 .
U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U.S. Treasury securities5
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries 6
Apr.
May
June''
July?
162,775
149,697
164,576
162,880
170,193
170,213
170,599
165,403
167,069
166,913
23,326
67,671
30,540
47,666
30,381
56.243
25,025
56,988
27,471
60,493
27,491
60,493
25,563
61,670
23,563
57,858
25,234
57,719
25,854
55,669
35,894
20,970
14,914
37,590
17.387
16,514
41.455
14.654
21.843
43,725
14,494
22,648
44,808
14,294
23,127
44,808
14,294
23,127
45,303
14,294
23,769
45,625
14,294
24,063
46.605
13,202
24,309
47,402
12,802
25.186
93,089
2,486
5,046
59,004
2,408
742
85,633
1.898
6.291
52,978
2,412
485
81.592
1,562
5.688
70.782
4,123
829
78,334
1,089
5,242
73,162
3,947
1,106
79,981
1,437
6.365
77.169
4,087
1,154
79,999
1,437
6,365
77,171
4,087
1.154
78.242
1,177
5,908
79,255
4,187
1,830
71,455
1,365
5,525
81,015
3,927
2,116
71,130
1.248
6,103
83,123
3,190
2,275
70,595
664
5,577
85,741
2,645
1,691
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.
A Data in the two columns for this date differ because of changes in reporting
coverage. Figures in the first column are comparable in coverage with those shown
for the preceding month; figures in the second column are comparable with those
for the following month.
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial
paper, negotiable time certificates of deposit, and borrowings under repurchase
agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable
in foreign currencies through 1974) and Treasury bills issued to official institutions
of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds
and notes payable in foreign currencies.
3.15
Mar^
NOTE. Based on Treasury Department data and on data reported to the Treasury
Department by banks (including Federal Reserve Banks) and securities dealers in
the United States.
LIABILITIES TO A N D CLAIMS ON F O R E I G N E R S Reported by Banks in the United States
Payable in Foreign Currencies
Millions of dollars, end of period
1980
Item
1977
1978
June
1 Banks' own liabilities
2 Banks' own claims'
3
Deposits
4
Other claims
925
2,356
941
1.415
1. Includes claims of banks' domestic customers through March 1978.
2. Assets owned by customers of the reporting bank located in the United States
that represent claims on foreigners held by reporting banks for the accounts of
their domestic customers.
2.406
3,671
1,795
1.876
358
1981
1979
1,918
2.419
994
1.425
580
2.739
2.874
1,090
1,784
798
Sept.
2.754
3,203
1.169
2,035
595
Dec.
3,748
4.206
2,507
1,699
962
Mar.±
3,268
4,238
1,697
2,542
444
3,262
4,245
1,758
2,488
444
A Data in the two columns for this date differ because of changes in reporting
coverage. Figures in the first column are comparable in coverage with those shown
for the preceding quarter; figures in the second column are comparable with those
for the following quarter.
NOTE. Data on claims exclude foreign currencies held by U.S. monetary authorities.
Nonbank-Reported
3.16
LIABILITIES TO F O R E I G N E R S
Payable in U.S. dollars
Millions of dollars, end of period
Data
A59
Reported by Banks in the United States
1981
Holder and type of liability
1978
1979
1980
Feb.
1 AH foreigners
2 Banks' own liabilities
3
Demand deposits
Time deposits 1
4
Other 2
5
6
Own foreign offices 3
7 Banks' custody liabilities4
8
U.S. Treasury bills and certificates 5
Other negotiable and readily transferable
9
instruments 6
10 Other
11 Nonmonetary international and regional
organizations 7
12 Banks' own liabilities
13 Demand deposits
14 Time deposits'
15 Other 2
16 Banks' custody liabilities4
17 U.S. Treasury bills and certificates
18 Other negotiable and readily transferable
instruments 6
19 Other
Apr.
Mar.A
May
June
July?
166,842
187,521
205,295
201,515
203,651
205,284
213,152
213,475R
208,793
212,702
78,661
19,218
12,427
9,705
37,311
117,196
23,303
13,623
16,453
63,817
124,789
23,462
15.076
17,581
68,670
121,528
23,300
15,778
13,476
68,973
120,217
21,308
16,272
15,947
66,690
120,425
21,216
16,304
16,199
66,707
128,115
22,644
15,719
14,789
74,963
132,154'
22,193
16,046
12,359'
81,556'
127,957
23,184
16,640
14,090
74,042
131,368
21,403
16,431
13,327
80,208
88.181
68,202
70,325
48,573
80,506
57.595
79,988
58,518
83,433
62,259
84,859
62,342
85,037
63,273
81,320'
59,597
80,836
59,731
81,334
57,559
17,472
2,507
19,396
2,356
20,079
2,832
18,350
3,120
18,226
2,948
18,207
4,310
17,886
3,878
17,392'
4,331
17,021
4,084
17,422
6,373
2,607
2,356
2,342
2,003
1,854
1,854
1,804
1,813'
1,777
1,782
906
330
84
492
714
260
151
303
442
146
85
211
317
186
76
54
293
126
67
100
293
126
67
100
655
178
81
396
509'
147
80
281'
357
224
75
58
363
222
75
65
1,701
201
1.643
102
1,900
254
1,687
368
1,561
333
1,561
333
1,149
63
1,304
213
1,420
289
1419
247
1,499
1
1,538
2
1,646
0
1.319
0
1,228
0
1,228
0
1,086
0
1,091
0
1,132
0
1,172
0
20 Official institutions 8
90,742
78,206
86,624
82,013
87,963
87,983
87,233
81,421'
82,953
81,523
21 Banks' own liabilities
22
Demand deposits
23 Time deposits'
24
Other 2
12,165
3,390
2,560
6,215
18,292
4,671
3,050
10,571
17.826
3,771
3.612
10,443
13,938
3,580
2,997
7,361
16,200
3,338
2,920
9,941
16,220
3,232
2,938
10,050
14,688
3,768
2,412
8,508
13,466
3,444
2,642
7,381
15,815
3,975
2,563
9,277
14,449
3,134
2,085
9,230
25 Banks' custody liabilities4
26
U.S. Treasury bills and certificates 5
27
Other negotiable and readily transferable
instruments 6
28
Other
78.577
67,415
59,914
47,666
68,798
56,243
68,075
56,988
71,763
60,492
71,763
60,492
72.545
61,670
67.955'
57,858
67,138
57,719
67,074
55,669
10,992
170
12,196
52
12,501
54
10,894
193
11,080
191
11,080
191
10,790
84
10,014'
83
9,346
73
9,338
2,087
29 Banks'
57,423
88,316
96,415
96,608
93,018
94,338
102,542
108,542'
101,468
106,992
30 Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits 1
34
Other 2
52,626
15,315
11,257
1.429
2,629
83,299
19.482
13,285
1,667
4.530
90,456
21,786
14.188
1,703
5,895
90,319
21.346
14,287
1,813
5,245
86.649
19,958
12,585
2,324
5,049
86,620
19,914
12,588
2,305
5,021
95,096
20,133
13,493
1,549
5,091
100,442'
18,886'
13,394
1,685'
3,808'
93,260
19,218
13,638
1,728
3,852
98,369
18,161
12,931
1,573
3,657
Own foreign offices 3
37,311
63,817
68.670
68,973
66,690
66,707
74,963
81,556'
74,042
80,208
4,797
300
5,017
422
5,959
623
6,289
714
6,369
826
7,717
827
7,446
839
8,100'
945'
8,208
1,165
8,623
1,037
2,425
2,072
2.415
2,179
2.748
2,588
2.850
2,726
2,928
2,615
2,913
3,977
2,932
3,675
3,053
4,102
3,177
3,866
3,459
4,127
40 Other foreigners
16,070
18,642
19,914
20,891
20,816
21,109
21,573
21,698'
22,595
22,405
41 Banks' own liabilities
42
Demand deposits
43 Time deposits
44
Other 2
12,964
4,242
8.353
368
14,891
5,087
8,755
1,048
16,065
5,356
9,676
1.033
16,955
5,246
10,892
816
17,076
5,259
10.961
856
17,291
5,270
10.995
1,027
17.676
5.205
11.677
794
17,737'
5,209'
11,640'
889'
18,525
5,346
12,275
904
18,187
5,115
12,697
375
3,106
285
3,751
382
3.849
474
3,937
449
3.740
607
3,817
690
3.897
701
3,961'
581'
4,070
559
4,218
606
2,557
264
3,247
123
3,185
190
3,287
201
2,991
141
2,986
141
3,078
119
3,235'
145
3,367
144
3,453
159
11,007
10,984
10,745
9,868
9,893
9,887
9.549
9,653'
10,176
9,831
35
36 Banks' custody liabilities4
37
U.S. Treasury bills and certificates
38 Other negotiable and readily transferable
instruments 6
39
Other
45 Banks' custody liabilities4
46
U.S. Treasury bills and certificates
47
Other negotiable and readily transferable
instruments 6
48
Other
49 MEMO: Negotiable time certificates of deposit
in custody for foreigners
1. Excludes negotiable time certificates of deposit, which are included in "Other
negotiable and readily transferable instruments." Data for time deposits before
April 1978 represent short-term only.
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign subsidiaries consolidated in "Consolidated Report of Condition" filed with bank regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due to head office or parent foreign bank, and foreign
branches, agencies or wholly owned subsidiaries of head office or parent foreign
bank.
4. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks.
5. Includes nonmarketable certificates of indebtedness and Treasury bills issued
to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."
A Data in the two columns for this date differ because of changes in reporting
coverage. Figures in the first column are comparable in coverage with those shown
for the preceding month; figures in the second column are comparable with those
for the following month.
A60
3.16
International Statistics • September 1981
Continued
1981
Area and country
1978
1979
1980
Feb.
Mar. ^
Apr.
May
June
July
1 Total
166,842
187,521
205,295
201,515
203,651
205,284
213,152
213,475 r
208,793
212,702
2 Foreign countries
164,235
185,164
202,953
199,512
201,796
203,430
211,348
211,662'
207,016
210,920
85,172
513
2,550
1,946
346
9,214
17,283
826
7,739
2,402
1,271
330
870
3,121
18,225
157
14,272
254
3,440
82
330
90,952
413
2,375
1,092
398
10,433
12,935
635
7,782
2,337
1,267
557
1,259
2,005
17,954
120
24,700
266
4,070
52
302
90,897
523
4,019
497
455
12,125
9,973
670
7,572
2,441
1,344
374
1,500
1,737
16,689
242
22.680
681
6,939
68
370
89,181
551
4,782
432
355
12,521
9,296
563
5,987
2,540
1,037
358
1,388
2,078
16,636
231
24,325
269
5,385
84
363
91,338
522
4,698
463
332
12,959
12,299
593
3,446
2,324
1,575
356
1,631
2,408
16,844
235
24,715
202
5,338
47
352
92,495
522
4,698
461
332
12,950
12,305
593
3,453
2,328
1,575
356
1,631
2,408
16,856
235
25,836
202
5,356
47
350
89,934
523
4,926
434
328
13,102
12,489
574
3,600
2,314
1,477
309
1,352
2,784
15,739
209
24,343
238
4,893
37
264
87,197'
493'
5,469'
526
280'
11,367'
9,472
513'
3,014'
2,176
1,648
336
1,678
2,501'
15,810'
182
25,485'
270
5,604'
85
288'
86,785
540
5,054
415
305
11,515
9,628
507
4,620
2,133
1,743
454
1,199
2,180
15,841
194
24,428
312
5,323
41
354
84,886
609
4,671
430
294
11,060
9,069
532
6,140
1,765
1,288
447
1,329
1,963
16,141
356
22,895
408
5,160
46
281
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
6,969
7,379
10.031
9,131
8,570
8,610
10,338
11,222'
10,199
9,192
25 Latin America and Caribbean
Argentina
26
27
Bahamas
28
Bermuda
29
Brazil
30
British West Indies
31
Chile
32
Colombia
33 Cuba
34
Ecuador
Guatemala 3
35
36 Jamaica 3
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
Other Latin America and Caribbean
43
31,638
1,484
6,752
428
1,125
5,974
398
1,756
13
322
416
52
3,467
308
2,967
363
231
3,821
1,760
49,686
1.582
15.255
430
1.005
11.138
468
2,617
13
425
414
76
4,185
499
4,483
383
202
4,192
2,318
53,170
2.132
16.381
670
1,216
12,766
460
3,077
6
371
367
97
4.547
413
4,718
403
254
3,170
2.123
52,275
1,998
15,916
804
1,266
12,144
431
3,087
7
449
461
101
4,600
523
3,984
447
266
3,925
1,869
50,818
1,917
14,183
915
1,151
11,566
549
2,970
6
511
446
94
4,755
436
4,297
341
306
4,218
2,158
51,178
1,917
14,356
913
1,148
11,566
549
2,970
6
511
446
94
4,756
476
4,445
342
306
4,220
2,158
58,415
1,919
18,815
634
1,345
13,995
539
2,940
8
352
416
141
5,332
442
4,723
354
284
4,178
1,997
60,096'
1,800
20,154'
802'
1,347
14,892'
526
2,828'
7
391
413
132
4,948
438'
4,847
334
334
3,924
1,979
56,153
1,991
17,760
698
1,412
12,834
508
2,827
7
463
399
80
5,351
493
4,615
450
322
3,548
2,398
63,755
1,979
24,319
634
1,145
14,015
565
2,784
7
392
411
122
5,517
480
4,989
363
243
3,666
2,123
44 Asia
China
45
Mainland
46
Taiwan
47
Hong Kong
48
India
49
Indonesia
50
Israel
51
Japan
52
Korea
53
Philippines
54
Thailand
55
Middle-East oil-exporting countries 4
56
Other Asia
36,492
33,005
42.420
43,041
44,992
45,068
45,944
46,156'
47,279
47,933
67
502
1,256
790
449
688
21,927
795
644
427
7,534
1,414
49
1,393
1,672
527
504
707
8,907
993
795
277
15,300
1,879
49
1,662
2,548
416
730
883
16.281
1.528
919
464
14,453
2,487
55
1,733
3,054
604
678
557
17.990
1,485
1,057
404
13,015
2,409
60
1,822
2.440
576
1.063
582
19,367
1,380
1,115
250
14,205
2,132
60
1.822
2,438
576
1,063
582
19,442
1,380
1,115
250
14,205
2,134
46
1,798
2.468
442
944
444
19,450
1,381
1,213
391
15,119
2,247
54
1,781
3,001
458
707
404
19,803'
1,397
802
338
14,728'
2,684'
102
1,936
3,151
408
582
478
19,563
1,330
1,049
422
15,129
3,129
92
1,996
3,446
392
1.309
387
19,472
1,252
996
436
14,794
3,362
57 Africa
58
Egypt
59 Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries 5
63
Other Africa
2,886
404
32
168
43
1,525
715
3,239
475
33
184
110
1,635
804
5.187
485
33
288
57
3,540
783
4,371
496
30
258
58
2,833
697
4,553
333
33
322
28
3,084
753
4,553
333
33
322
28
3,084
753
4,529
336
34
330
28
3,135
666
4,513
308
54
360
24
3,004
764
3,917
289
41
253
181
2,388
765
3,168
293
77
257
84
1,714
743
64 Other countries
65
Australia
66
All other
1,076
838
239
904
684
220
1.247
950
297
1,513
1,205
307
1,526
1,287
240
1,526
1.287
240
2,189
1,913
275
2,477'
2,276'
201
2,683
2,398
285
1,987
1,770
216
67 Nonmonetary international and regional
organizations
68
International
69
Latin American regional
70
Other regional 6
2,607
1,485
808
314
2,356
1,238
806
313
2.342
1.156
890
296
2,003
995
745
263
1,854
754
768
333
1,854
754
768
333
1,804
795
693
317
1,813'
781'
729
303
1,777
747
722
307
1,782
699
765
318
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Asian, African, Middle Eastern, and European regional organizations, except
the Bank for International Settlements, which is included in "Other Western
Europe."
A Data in the two columns for this date differ because of changes in reporting
coverage. Figures in the first column are comparable in coverage with those for
the preceding month; figures in the second column are comparable with those for
the following month.
Nonbank-Reported
3.17
Data
A61
B A N K S ' O W N CLAIMS ON F O R E I G N E R S Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1981
Area and country
1979
1978
1980
Feb.
Apr.
Mar. J t
May
June
July?
1 Total
115,545
133,943
172,702
167,687
179,535
181,551
184,769
186,704 r
197,310
196,717
2 Foreign countries
115,488
133,906
172,624
167,608
179,461
181,477
184,700
186,657'
197,262
196,657
24,201
140
1,200
254
305
3,735
845
164
1,523
677
299
171
1,120
537
1,283
300
10,147
363
122
360
657
28,388
284
1,339
147
202
3,322
1,179
154
1,631
514
276
330
1,051
542
1,165
149
13,795
611
175
268
1,254
32,155
236
1,621
127
460
2,958
948
256
3,364
575
227
331
993
783
1,446
145
14,917
853
179
281
1,457
30,768
191
2,140
172
337
3,067
1,028
244
3,105
523
224
240
1,152
733
1,729
155
12,949
859
177
249
1,494
34,136
174
2,568
119
319
3,838
1,074
210
3.052
548
223
247
1,494
868
1,313
136
15,093
871
176
265
1,548
35,098
174
2,573
119
326
3.911
1,122
210
3,055
560
223
247
1,497
884
1,375
136
15,827
872
176
265
1,548
34,265
151
2,155
141
327
3,696
1,038
334
2,926
530
180
242
1,601
975
1,263
132
15,652
878
211
266
1,569
34,305'
149
2,012'
162
299
3,164
1,140
242
2,981'
584
173
263
1,720'
996
1,698'
172
15,707'
904
147
254
1,539'
37,409
166
2,796
125
365
3,209
1,099
249
3,855
627
172
353
1,769
794
1,690
147
16,675
988
182
302
1,848
35,053
183
2,039
132
343
2,861
1,259
292
3,923
470
167
389
1,726
730
1,871
137
15,358
992
160
245
1,776
3 Europe
Austria
4
Belgium-Luxembourg
5
6 Denmark
Finland
7
8 France
9 Germany
in Greece
Italy
11
Netherlands
1?
13 Norway
Portugal
14
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
20 Yugoslavia
Other Western Europe 1
7.1
77 U.S.S.R
Other Eastern Europe 2
23
5,152
4,143
4,810
4,872
5,017
5,297
6,091
6,038'
7,024
7,861
7.5 Latin America and Caribbean
7.6 Argentina
27 Bahamas
7,8 Bermuda
79
Brazil
3n British West Indies
31
Chile
37 Colombia
33
Cuba
Ecuador
34
35
Guatemala 3
36 Jamaica 3
37 Mexico
38 Netherlands Antilles
Panama
39
40
Peru
Uruguay
41
42 Venezuela
Other Latin America and Caribbean
43
57,565
2,281
21,555
184
6,251
9,694
970
1,012
0
705
94
40
5,479
273
3,098
918
52
3,474
1,485
67,993
4,389
18.918
496
7,713
9,818
1,441
1,614
4
1,025
134
47
9,099
248
6,041
652
105
4,657
1,593
92,992
5,689
29,419
10,496
15,663
1,951
1,752
3
1,190
137
36
12.595
821
4,974
890
137
5,438
1,583
89,625
5,636
28,642
364
9,801
14,338
1,843
1.435
3
1,179
113
41
12,460
655
4,964
877
107
5,514
1,653
96,364
5,672
34,139
324
10,213
14,236
1,876
1,467
3
1,257
208
77
12,407
807
5,640
794
103
5,441
1,702
96,829
5,672
34,285
324
10,269
14,320
1,876
1.467
3
1.257
208
77
12,447
921
5,643
794
103
5,458
1,705
98,594
5,881
33.926
401
9,924
16,143
2,028
1.457
4
1,229
98
34
13,242
809
5,477
853
105
5,325
1,658
99,731'
5,659'
33,202'
481
9,921'
17,165'
2,019
1,580
3
1,239
104
35
13,351
756
6,054'
873
100
5,438'
1,751
103,300
5,822
34,728
442
10,019
18,207
2,074
1,533
3
1,285
104
38
14,073
874
6,210
819
94
5,295
1,678
105,083
5,742
35,474
411
9,813
17,998
2,203
1,480
7
1,306
94
39
15,557
932
5,861
804
102
5,436
1,823
44
25,362
30,730
39,140
39.113
40,636
40.941
42,439
43.006'
46,028
45,020
4
1,499
1,479
54
143
888
12,646
2,282
680
758
3,125
1,804
35
1,821
1,804
92
131
990
16,911
3,793
737
933
1,548
1,934
195
2,469
2,247
142
245
1,172
21,361
5,697
989
876
1,494
2,252
186
2,270
2,212
142
306
829
22,314
5,936
745
808
1,443
1.922
201
2,413
2,330
127
288
944
23,710
5,823
605
835
1,486
1,874
201
2,413
2,330
127
288
981
23,977
5,823
605
835
1,486
1.874
202
2,568
2,476
134
299
1,014
23,862
6,024
994
829
1,909
2,130
204
2,413
2,898'
170
268
1.186
24,209
6,014
1,024
698
1,474'
2,448'
205
2,471
3,328
132
258
1,309
25,998
6,678
1,192
662
1,617
2,178
209
2,380
3,188
106
271
1,178
25,963
6,486
1,192
551
1,275
2,222
2,221
107
82
860
164
452
556
1,797
114
103
445
144
391
600
2,377
151
223
370
94
805
734
1,981
152
115
421
94
425
773
2,271
137
153
534
111
589
746
2.271
137
153
534
111
589
746
2,272
124
118
562
108
650
710
2.536
126
87
668
98
805
752'
2,423
155
71
658
98
672
769
2,519
128
88
688
100
726
789
988
877
111
855
673
182
1,150
859
290
1,250
868
381
1,038
870
167
1,041
874
167
1,038
922
116
1,040
898
142
1,078
939
139
1,121
988
133
56
36
78
79
74
74
69
48
60
24 Canada
45
46
47
48
49
SO
51
5?
53
54
55
56
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries 4
Other Asia
57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries 5
63 Other
64 Other countries
65
Australia
66 All other
and. regional
67 Nonmonetary international
6
organizations
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
218
47'
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in "Other
Western Europe."
A Data in the two columns shown for this date differ because of changes in
reporting coverage. Figures in the first column are comparable in coverage with
those for the preceding month; figures in the second column are comparable with
those for the following month.
NOTE. Data for period prior to April 1978 include claims of banks' domestic
customers on foreigners.
A62
3.18
International Statistics • September 1981
B A N K S ' O W N A N D DOMESTIC CUSTOMERS' CLAIMS ON F O R E I G N E R S Reported by Banks in the
United States
Payable in U.S. Dollars
Millions of dollars, end of period
1981
Type of claim
1978
1979
1980
Feb.
1 Total
126,787
154,030
198,807
2
3
4
5
6
7
8
115,545
10,346
41,605
40,483
5,428
35,054
23,111
133,943
15,937
47,428
40,927
6,274
34,654
29,650
172,702
20,944
65,084
50,215
8,254
41,962
36,459
11,243
480
5,396
5,366
20,088
955
13,100
6,032
15,030
13,558
Banks' own claims on foreigners
Foreign public borrowers
Own foreign offices 1
Unaffiliated foreign banks
Deposits
Other
All other foreigners
11 Negotiable and readily transferable i n s t r u m e n t s 3 . . .
Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United
States-.
Mar.A
210,586
213,220
179,535
20,836
74,660
46,502
7.263
39,239
37,537
181,551
21.027
74.717
48,104
8,205
39,898
37,703
26,106
885
15,574
9,648
31,052
369
19,930
10,752
31,669
852
20,064
10,753
18,021
22,714
24,452
24,452
22.042
23,659
167.687
20,321
64.798
45.880
7.079
38.800
36.689
31,064
30,375
Apr.
May
June
184,769
21,401
76,632
48,670
7,831
40,839
38,066
186,704'
21,529'
75,326'
51,927'
10.441'
41,486'
37,921'
197,310
22,767
80,137
55,326
11,342
43,984
39,079
196,717
23,846
79,992
54,751
11,506
43,245
38,128
34,635
32,734
n.a.
30.375
34,234
July?
4. Data for March 1978 and for period before that are outstanding collections
only.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of deposit denominated in U.S. dollars issued by banks abroad. For description of changes in data reported by nonbanks, see July 1979 BULLETIN, p. 550.
^ D a t a in the two columns for this month differ because of changes in reporting
coverage. Figures in the first column are comparable in coverage with those shown
for the preceding month; figures in the second column are comparable with those
shown for the following month.
1. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign
banks: principally amounts due from head office or parent foreign bank, and foreign
branches, agencies, or wholly owned subsidiaries of head office or parent foreign
bank.
2. Assets owned by customers of the reporting bank located in the United States
that represent claims on foreigners held by reporting banks for the account of their
domestic customers.
3. Principally negotiable time certificates of deposit and bankers acceptances.
NOTE. Beginning April 1978, data for banks' own claims are given on a monthly
basis, but the data for claims of banks' own domestic customers are available on
a quarterly basis only.
3.19
B A N K S ' O W N CLAIMS O N U N A F F I L I A T E D F O R E I G N E R S Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1978
1979
Dec.
Dec.
1980
1981
Maturity; by borrower and area
1 Total
By borrower
Maturity of 1 year or less1
Foreign public borrowers
All other foreigners
Maturity of over 1 year 1
Foreign public borrowers
All other foreigners
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
By area
Maturity of 1 year or less1
Europe
Canada
Latin America and Caribbean
Asia
;
Africa
All other 2
Maturity of over 1 year 1
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 2
1. Remaining time to maturity.
2. Includes nonmonetary international and regional organizations.
June
Sept.
Dec.
Mar.A
73,635
86,181
93,260
99,022
106,857
104,789
106,513
58,345
4.633
53,712
15,289
5,395
9.894
65,152
7,233
57,919
21,030
8,371
12,659
71,938
7,227
64,711
21.322
8,673
12,649
76,231
8,935
67,296
22,791
9,722
13,069
82,665
10,036
72,628
24,193
10,152
14,041
80,855
10,519
70,336
23,934
10,158
13,775
82,636
10,630
72,005
23,877
10,244
13,634
15,169
2,670
20,895
17,545
1,496
569
15.235
1.777
24.928
21,641
1,077
493
17,215
2,047
24,460
26,162
1,330
724
16,940
2,166
28,097
26,876
1,401
751
18,762
2,723
32,034
26,748
1.757
640
17,306
2,358
30,844
28,001
1,624
722
18,261
2,621
31,096
28,305
1,624
729
3,142
1,426
8,464
1,407
637
214
4,160
1,317
12,814
1,911
655
173
4,033
1,199
13,887
1,477
576
150
4,705
1,188
14,187
2,014
567
130
5.118
1,448
15,075
1,865
507
179
5,698
1,184
14,768
1,585
531
168
5,578
1,200
14,870
1,530
531
167
A Data in the two columns for this month differ because of changes in reporting
coverage. Figures in the first column are comparable in coverage with those for
the preceding quarter; figures in the second column are comparable with those for
the following quarter.
Nonbank-Reported
Data
A63
C L A I M S O N F O R E I G N C O U N T R I E S Held by U . S . Offices and Foreign Branches of U.S.-Chartered Banks 1
3.20
Billions of dollars, end of period
1979
Area or country
1977
1980
1981
19782
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar . p
Junep
240.0
266.2
275.6
294.0
303.8
308.5
328.5
338.7
350.2
365.2'
380.6
116.4
8.4
11.0
9.6
6.5
3.5
1.9
3.6
46.5
6.4
18.8
124.7
9.0
12.2
11.3
6.7
4.4
2.1
5.3
47.3
6.0
20.6
125.2
9.7
12.7
10.8
6.1
4.0
2.0
4.7
50.3
5.5
19.5
135.7
10.7
12.0
12.8
6.1
4.7
2.3
5.0
53.7
6.0
22.3
138.4
11.1
11.7
12.2
6.4
4.8
2.4
4.7
56.4
6.3
22.4
141.2
10.8
12.0
11.4
6.2
4.3
2.4
4.3
57.6
6.9
25.4
154.2
13.1
14.0
12.7
6.9
4.5
2.7
3.3
64.3
7.2
25.5
158.7
13.5
13.9
12.9
7.2
4.4
2.8
3.4
66.6
7.7
26.1
161.5
12.9
14.0
11.5
8.2
4.4
2.9
4.0
68.7
8.4
26.5
165.6
13.4
14.3
12.5
7.6
4.5
3.2
4.0
68.3
8.5
29.3
167.7
14.2
14.7
12.1
8.4
4.1
3.1
5.2
66.2
10.8
28.9
13 Other developed countries
14
Austria
15
Denmark
16
Finland
17
Greece
Norway
18
19
Portugal
Spain
20
Turkey
21
Other Western Europe
22
South Africa
23
24
Australia
18.6
1.3
1.6
1.2
2.2
1.9
.6
3.6
1.5
.9
2.4
1.4
19.4
1.7
2,0
1.2
2,3
2.1
.6
3.5
1.5
1.3
2.0
1.4
18.2
1.8
1.9
1.1
2.2
2.1
.5
3.0
1.4
.9
1.8
1.4
19.7
2.0
2.0
1.2
2.3
2.3
.7
3.3
1.4
1.5
1.7
1.3
19.9
2.0
2.2
1.2
2.4
2.3
.7
3.5
1.4
1.4
1.3
1.3
18.8
1.7
2.1
1.1
2.4
2.4
.6
3.5
1.4
1.4
1.1
1.2
20.3
1.8
2.2
1.3
2.5
2.4
.6
3.9
1.4
1.6
1.5
1.2
20.6
1.8
2.2
1.2
2.6
2.4
.7
4.2
1.3
1.7
1.2
1.2
21.3 r
1.9
2.3'
1.4
2.8
2.6
.6
4.0
1.5
1.7
1.1
1.3
23.1
1.8
2.4
1.3
2.7
2.8
.6
5.1
1.5
1.8
1.5
1.4
24.8
2.1
2.3
1.3
3.0
2.8
.8
5.7
1.4
1.8
1.9
1.7
7.5 O P E C countries 3
76
Ecuador
7.7
Venezuela
Indonesia
28
29
Middle East countries
30
African countries
17.6
1.1
5.5
2.2
6.9
1.9
22.7
1.6
7.2
2.0
9.5
2.5
22.7
1.6
7.6
1.9
9.0
2.6
23.4
1.6
7.9
1.9
9.2
2.8
22.9
1.7
8.7
1.9
8.0
2.6
21.8
1.8
7.9
1.9
7.8
2.5
20.9
1.8
7.9
1.9
6.9
2.5
21.3
1.9
8.5
1.9
6.6
2.4
22.8
2.1
9.1
1.8
6.9
2.8
21.5
2.0
8.3
2.1
6.5
2.6
22.2
2.0
8.7
2.1
6.8
2.6
31 Non-OPEC developing countries
48.7
52.6
56.0
58.9
62.9
63.7
67.4
72.8
77.0'
81.8
84.6
2.9
12.7
.9
1.3
11.9
1.9
2.6
3.0
14.9
1.6
1.4
10.8
1.7
3.6
3.5
15.1
1.8
1.5
10.7
1.4
3.3
4.1
15.1
2.2
1.7
11.4
1.4
3.6
5.0
15.2
2.5
2.2
12.0
1.5
3.7
5.5
15.0
2.5
2.1
12.1
1.3
3.6
5.6
15.3
2.7
2.2
13.6
1.4
3.6
7.6
15.8
3.2
2.4
14.4
1.5
3.9
7.9
16.2
3.7'
2.6
15.9
1.8
3.9
9.4
16.7
4.0
2.4
17.0
1.7
4.8
8.5
17.3
4.7
2.5
18.1
1.7
3.8
1 Total
7 G - 1 0 countries and Switzerland
Belgium-Luxembourg
3
4
France
Germany
5
6
Netherlands
7
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
Japan
12
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
37
33
34
35
36
37
38
Other Latin America
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia 4
Philippines
Thailand
Other Asia
.0
3.1
.3
.9
3.9
.7
2.5
1.1
.4
.0
2.9
.2
1.0
3.9
.6
2.8
1.2
.2
.1
3.3
.2
.9
5.0
.7
3.7
1.4
.4
.1
3.5
.2
1.0
5.3
.7
3.7
1.6
.4
.1
3.4
.2
1.3
5.4
.9
4.2
1.5
.5
.1
3.6
.2
.9
6.4
.8
4.4
1.4
.5
.1
3.8
.2
1.2
7.1
.9
4.6
1.5
.5
.1
4.1
.2
1.1
7.3
.9
4.8
1.5
.5
.2
4.2
.3
1.5
7.1
1.0
4.9'
1.4
.6
.2
4.4
.3
1.3
7.7
1.0
4.8
1.5
.5
.2
4.7
.3
1.8
8.7
1.4
5.2
1.5
.7
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 5
.3
.5
.3
.7
.4
.6
.2
1.4
.7
.5
.2
1.5
.6
.5
.2
1.6
.6
.6
.2
1.7
.7
.5
.2
1.7
.7
.5
.2
1.8
.7
.6
.2
2.0
.8
.7
.2
2.0
.8
.6
.4
2.1
.7
.5
.2
2.1
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
6.3
1.6
1.1
3.7
6.9
1.3
1.5
4.1
6.7
.9
1.7
4.1
7.2
.9
1.8
4.6
7.3
.7
1.8
4.8
7.3
.6
1.9
4.9
7.2
.5
2.1
4.5
7.3
.5
2.1
4.7
7.4'
.4
2.3
4.6'
7.7
.4
2.4
4.9
7.8
.5
2.5
4.9
26.1
9.9
.6
3.7
.7
3.1
.2
3.7
3.7
.5
31.0
10.4
.7
7.4
.8
3.0
.1
4.2
3.9
.5
37.0
14.4
.7
7.4
1.0
3.8
.1
4.9
4.2
.4
38.6
13.0
.7
9.5
1.1
3.4
.2
5.5
4.9
.4
40.4
13.7
.8
9.4
1.2
4.3
.2
6.0
4.5
.4
42.6
13.9
.6
11.3
.9
4.9
.2
5.7
4.7
.4
44.3'
13.7
.6
9.8
1.2
5.6
.2
6.9
5.9
.4
44.5
13.1
.6
10.1
1.3
5.6
.2
7.5
5.6
.4
46.6'
13.3
.6
10.6
2.1
5.4
.2
8.1
5.9
.3
50.8
13.6
.7
11.3
2.1
6.3
.2
8.4
7.2
.9
57.8
17.2
.9
11.9
2.4
6.8
.2
10.2
8.0
.3
5.3
9.1
9.9
10.6
11.7
13.1
14.3
13.7
13.9
14.8
15.7
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 6
Lebanon
62
Hong Kong
63
64
Singapore
Others 7
65
8
66 Miscellaneous and unallocated
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 3.13 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.17 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches). However,
see also footnote 2.
2. Beginning with data for June 1978, the claims of the U.S. offices
in this tame include only banks' own claims payable in dollars. For earlier dates
the claims of the U.S. offices also include customer claims and foreign currency
claims (amounting in June 1978 to $10 billion).
3. In addition to the Organization of Petroleum Exporting Countries shown
individually, this group includes other members of O P E C (Algeria, Gabon, Iran,
Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as
well as Bahrain and Oman (not formally members of OPEC).
4. Foreign branch claims only through December 1976.
5. Excludes Liberia.
6. Includes Canal Zone beginning December 1979.
7. Foreign branch claims only.
8. Includes New Zealand, Liberia, and international and regional organizations.
A64
3.21
International Statistics • September 1981
M A R K E T A B L E U.S. T R E A S U R Y B O N D S A N D NOTES
Foreign Holdings and Transactions
Millions of dollars
1981
Country or area
1979
1981
1980
Jan.JulyP
Feb.
Jan.
Mar.
Apr.
May
June
July
Holdings (end of period) 1
1 Estimated total2
51,344
57,418
58,453
60,276R
61,759'
62,123'
62,836'
64,102
65,251
45,915
52,830'
53.918'
55,645'
56,840
57,352
58,038'
59,159
60,271
3 Europe 2
4
Belgium-Luxembourg
Germany 2
5
6
Netherlands
Sweden
7
8
Switzerland2
United Kingdom
9
10 Other Western Europe
11 Eastern Europe
12 Canada
24,824
60
14,056
1,466
647
1,868
6,236
491
0
232
24,337
77
12,335
1.884
595
1,485
7,183
777
0
449
25.176
80
12.791
1.954
555
1.561
7,438
796
0
458
25,466
88
12.915
1,944
535
1,524
7,745
714
0
490
25,235
106
12.340
1,965
566
1,527
7,892
839
0
478
24,883
123
11,925
1,950
567
1.526
7,862
930
0
464
24,511
131
11,949
1,813
572
1,535
7,274
1,236
0
486
24,869
173
12,594
1,781
582
1,600
6,836
1,304
0
484
25,186
163
13,236
1,756
606
1,506
6,569
1,350
0
501
13
14
15
16
17
18
19
20
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean .
Netherlands Antilles
Asia
Japan
Africa
All other
466
103
200
163
19,805
11,175
591
-3
999
292
285
421
26,112
9,479
919'
14
998
292
281
425
26.303
9.519
970
14
1.074
292
341
441
27,467
9,543
1,139
18
1,151
292
339
519
28,827
9,543
1,139'
9
939
292
389
258
29.920
9,566
1.139'
7
849
287
430
132
31.047
9,606
1.140
6
666
287
217
162
31,997
9,778
1,139
3
724
287
260
177
32,716
9,786
1,139
6
21 Nonmonetary international and regional
organizations
5,429
4,588 r
4.535
4,622
4,919'
4,771'
4.798
4,943
4,980
22
23
5,388
37
4,548
36
4.505
26
4,586
36
4.878
36
4,759
6
4,791
1
4,936
1
4,977
1
2 Foreign countries
2
International
Latin American regional
Transactions (net purchases, or sales ( - ) during period)
24 Total 2
6,397
6,074'
7,833
1,035
1,827
1,480
364
713
1,266
1,149
25 Foreign countries 2
26
Official institutions
27
Other foreign 2
28 Nonmonetary international and regional
organizations
6,099
1,697
4,403
6,915'
3,865'
3,049'
7,441
5,947
1.493
1.088
865
223
1.736
1,404
332
1,185
1,084
101
512
495
17
686
321
365
1,121
980
141
1,112
798
314
392
-53
91
295
-148
26
145
36
5,889
220
300
51
1,139
169
1,322
0
1,062
0
841
0
565
0
659
0
MEMO: Oil-exporting countries
29 Middle East 3
30 Africa 4
301
1,014
-100
-843
7,672
327'
2. Beginning December 1978, includes U.S. Treasury notes publicly issued to
private foreign residents denominated in foreign currencies.
3. Comprises Bahrain, Iran. Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
1. Estimated official and private holdings of marketable U.S. Treasury securities
with an original maturity of more than 1 year. Data are based on a benchmark
survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes
nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.
3.22
F O R E I G N OFFICIAL ASSETS H E L D A T F E D E R A L R E S E R V E B A N K S
Millions of dollars, end of period
1981
Assets
1978
1979
1980
Feb.
1 Deposits
Assets held in custody
2 U.S. Treasury securities1
3 Earmarked gold2
Apr.
May
June
July
Aug.P
367
429
411
422
474
475
346
338
285
255
117,126
15,463
95,075
15,169
102,417
14.965
106,389
14,892
111,859
14.883
113,746
14.886
109,742
14,875
107,884
14,871
105,064
14.854
102,197
14,833
1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
2. The value of earmarked gold increased because of the changes in par value
of the U.S. dollar in May 1972 and in October 1973.
Mar.
NOTE. Excludes deposits and U.S. Treasury securities held for international and
regional organizations. Earmarked gold is gold held for foreign and international
accounts and is not included in the gold stock of the United States,
Investment Transactions
3.23
A65
F O R E I G N T R A N S A C T I O N S IN S E C U R I T I E S
Millions of dollars
1981
Transactions, and area or country
1979
1981
1980
Jan.JulyP
Jan.
Mar.
Feb.
Apr.
May
4,041
3,323
4,083
2,858
JulyP
June
U.S. corporate securities
STOCKS
22,781
21,123
1 Foreign purchases
2 Foreign sales
40,320
34,962
26.014
21,277
3,425'
2,800'
2.720'
2.313'
3.951'
3.314'
4,354
3,419
3,440
3,250
3 Net purchases, or sales (—)
1,658
5,358
4,737
625'
407'
637'
718
1,225
935
190
4 Foreign countries
1,642
5,340
4,685
613'
405'
629'
710
1,215
930
182
217
122
-221
-71
-519
964
552
-19
688
211
-14
7
3,069
482
186
-328
308
2.503
865
148
1.206
16
440'
63'
24
43
105
178
26
101
63
-14
2
-5
258'
42'
18
2
-24
220
91
-22
74
-2
606'
110
31
12
138
309'
105'
14
-95
419
126
15
-2
75
197
230
-26
91
3
477
42
11
27
38
3,077
823
55
71
359
1.607
776
74
494
287
6
-30
349
104
126
33
187
4
-1
111
48
-28
-41
-19
138
77
-126
105
37
-1
-21
17
18
52
5
6
7
8
9
10
11
12
13
14
15
16
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
17 Nonmonetary international and regional
organizations
-1
0
-1
-1
7
0
-5
766
393
-17
31
84
215
143
9
223
77
1
-4
12
2
8
8
10
5
8
2,035
1,239
1.549
774
894
669
1,939
1,450
1,894
820
0
0
BONDS 2
18 Foreign purchases
19 Foreign sales
8,835
7,602
15,425
9,964'
11,262
6,632
1.549
817
1.402
863
20 Net purchases, or sales ( - )
1,233
5,461'
4,630
733
539
796'
775
225
489
1,074
21 Foreign countries
1,330
5,526'
4,571
706
552
797
733
243
473
1,067
22
23
24
25
26
27
28
29
30
31
32
33
626
11
58
-202
-118
814
80
109
424
88
1.576
129
213
-65
54
1,257
135
185
3,499'
117
5
10
1,283
214
4
49
6
22
124
7
-3
492
311
-42
112
12
12
207
-2
26
201
17
132
9
97
14
4
-22
19
28
723
-105
328
8
23
13
17
231
12
22
362
9
-3
17
28
4
34
-87
18
9
192
27
179
10
151
122
-5
68
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
34 Nonmonetary international and regional
organizations
1
1
-96
-65
0
528
48
130
467
70
115
3,181
-75
0
-1
0
-3
-4
0
0
0
0
0
0
0
0
59
27
-13
-1
42
-18
0
0
20
4
-6
12
359
-71
0
22
11
23
21
853
49
1
0
0
16
7
32
853'
821'
-114
891
1.005
108
891
783
-447
1.509
1,956
-1,046
1,636
2,682
Foreign securities
35 Stocks, net purchases, or sales ( - )
36
Foreign purchases
37
Foreign sales
-786
4,615
5,401
-2,089'
7,885
9,974'
-203
5,655
5,858
35
696
661
13
709
697
-187
763
950
38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
40
Foreign sales
-3,855
12,672
16,527
-900'
17.069
17,970'
-2.668
9,716
12.384
-237
1.142
1.379
29
1,296
1.267
-141
1,686
1.827
-632
1.154
1.786
-194'
1,292
1,487'
41 Net purchases, or sales ( - ) , of stocks and bonds . . .
-4,641
-2,989'
-2,871
-202
42
-328
-723
-162'
-561
-937
42
43
44
45
46
47
48
49
-3,891
-1,646
-2,601
347
44
-61
25
-3,866'
-958'
-1,959'
84'
-1.136'
24
80
-3,279
-945
-2,050
68
-329
-52
28
-261
-116
-4
51
-177
-10
-4
24
80
76
52
-169
-8
-7
-340
-161
-101
-68
9
-17
-2
-732
-300
-271
119
-234
-7
-39
-162'
75'
-385
-51
174
-3
29
-561
-41
-507
-10
-72
-6
75
-1,248
-481
-858
408
59
17
12
9
0
311
Foreign countries
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
Nonmonetary international and regional
organizations
-750
876
1. Comprises oil-exporting countries as follows: Bahrain. Iran. Iraq, Kuwait,
Oman. Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
-90
851'
941
0
-24
141
-2
-23
2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securities sold
abroad by U.S. corporations organized to finance direct investments abroad.
A66
International Statistics • September 1981
3.24
LIABILITIES T O U N A F F I L I A T E D F O R E I G N E R S Reported by Nonbanking Business Enterprises in the
United States 1
Millions of dollars, end of period
1979
Type, and area or country
1978
1980
1981
1979
Dec.
Mar.
June
Sept,
Dec.
Mar.
1 Total
14,948
17,062
17,062
17,476
18,643
18,634
21,229
20,997
2 Payable in dollars
3 Payable in foreign currencies 2
11,513
3,435
13,984
3,078
13,984
3,078
14,470
3,006
15,203
3,440
15,337
3,296
17,520
3,709
17,502
3,495
By type
4 Financial liabilities
5 Payable in dollars
6
Payable in foreign currencies
6,353
3,838
2,515
7,366
5,096
2,270
7,366
5,096
2,270
7,832
5,591
2,242
8,410
5,791
2,619
8,293
5,818
2,475
11,015
8,243
2,772
11,206
8,600
2,606
7 Commercial liabilities
8 Trade payables
9 Advance receipts and other liabilities
8,595
4,008
4,587
9,696
4,424
5,272
9,696
4,424
5,272
9,693
4,190
5,454
10,233
4,297
5,936
10,341
4,381
5,960
10,214
4,400
5,814
9,791
4,442
5,349
7,674
921
8,888
808
8,888
808
8,879
764
9,412
821
9,520
821
9,277
936
8,903
888
3,958
289
173
366
390
248
2,159
4,642
345
175
497
828
170
2,449
4,642
345
175
497
828
170
2,449
4,860
360
193
520
795
174
2,647
5,470
422
347
657
797
238
2,841
5,314
417
339
557
780
224
2,867
6,303
484
327
582
663
354
3,758
5,995
553
324
496
544
315
3,650
10
11
12
13
14
15
16
17
18
Payable in dollars
Payable in foreign currencies
By area or country
Financial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
19
Canada
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
27
28
29
30
31
32
33
34
35
36
37
38
39
244
439
439
380
530
508
864
982
1,357
478
4
10
194
102
49
1,483
375
81
18
514
121
72
1,483
375
81
18
514
121
72
1,764
459
83
22
694
101
70
1,633
434
2
25
700
101
72
1,732
412
1
20
703
108
74
3,100
964
1
23
1,452
99
81
3,342
1,148
1
19
1,389
97
85
784
717
32
793
726
31
793
726
31
807
740
26
752
683
31
707
618
37
723
644
38
858
744
51
Africa
Oil-exporting countries 4
5
2
4
1
4
1
11
1
10
1
11
1
11
1
6
1
All other 5
5
4
4
10
15
21
15
23
3,054
97
321
529
246
302
824
3,639
137
467
548
227
310
1,077
3,639
137
467
548
227
310
1,077
3,716
117
503
545
288
382
1,012
4,038
132
485
727
245
462
1,133
4,079
109
501
693
276
452
1,045
4,067
90
582
679
219
493
1,011
3,669
82
560
639
246
385
871
Japan
Middle East oil-exporting countries 3
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
667
868
868
720
591
590
785
725
41
42
43
44
45
46
47
Latin America
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
997
25
97
74
53
106
303
1,323
69
32
203
21
257
301
1,323
69
32
203
21
257
301
1,253
4
47
228
20
235
211
1,271
26
107
151
37
272
210
1,361
8
114
156
12
324
293
1,244
8
73
111
35
326
307
1,280
1
111
82
16
419
253
2,931
448
1,523
2,905
494
1,017
2,905
494
1,017
2,950
581
901
3,091
418
1,030
2,909
502
944
2,848
645
894
2,853
621
947
48
49
50
Japan
Middle East oil-exporting countries 3
51
52
Africa
Oil-exporting countries 4
743
312
728
384
728
384
742
382
875
498
1,006
633
814
514
824
515
53
All other 5
203
233
233
263
367
396
456
440
1. For a description of the changes in the International Statistics tables, see July
1979 BULLETIN, p. 550.
2. Before December 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.
Nonbank-Reported
3.25
CLAIMS ON UNAFFILIATED FOREIGNERS
United States 1
Data
A67
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1980
1979
Type, and area or country
1981
1979
1978
Mar.
Dec.
Sept.
June
Mar.
Dec.
1 Total
27,892
31,023
31,023
32,077
32,024
31,579
33,869
37,061
2 Payable in dollars
3 Payable in foreign currencies 2
24,905
2,988
27,850
3,173
27,850
3,173
29,069
3,008
28,962
3,062
28,322
3,257
31,030
2,838
34,139
2,921
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
16,570
11,111
10,043
1,068
5,459
3,874
1,584
18,222
12,579
11,663
916
5,643
3,803
1,840
18,222
12,579
11,663
916
5,643
3,803
1,840
19,332
13,657
12,681
977
5,675
4,055
1,620
18,630
12,786
11,907
879
5,844
4,103
1,740
18,285
12,218
11,056
1,162
6,067
4,399
1,668
19,281
13,455
12,722
733
5,826
4,137
1,689
21,760
15,980
15,198
782
5,780
4,119
1,662
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims .
11,323
10,764
559
12,801
12,112
688
12,801
12,112
688
12,745
12,095
649
13,394
12,685
710
13,294
12,605
688
14,588
13,871
717
15,301
14,506
795
14
15
10,988
335
12,384
416
12,384
416
12,333
411
12,952
443
12,867
427
14,171
416
14,823
478
5,215
48
178
510
103
98
4,021
6,146
32
177
409
53
73
5,081
6,146
32
177
409
53
73
5,081
5,843
21
290
300
39
89
4,790
5,843
23
307
190
37
96
4,863
5,605
17
409
168
30
41
4,545
6,021
195
340
230
32
59
4,889
6,047
159
411
213
42
90
4,856
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
4,484
4,813
4,813
4,885
4,783
4,804
4,785
6,281
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
5,714
3,001
80
151
1,291
163
157
6,261
2,741
30
163
2,001
158
143
6,261
2,741
30
163
2,001
158
143
7,583
3,516
34
128
2,591
169
134
6,924
3,080
25
120
2,393
178
139
6,757
2,831
65
116
2,301
192
128
7,496
3,333
135
96
2,586
208
137
8,485
3,919
13
22
3,321
201
131
31
32
33
Asia
Japan
Middle East oil-exporting countries
920
305
18
706
199
16
706
199
16
713
226
18
758
253
16
791
269
20
710
177
20
696
191
17
34
Africa
181
10
253
49
253
49
265
40
256
35
260
29
238
26
214
27
55
44
44
43
65
68
32
36
3,980
144
609
398
267
198
824
4,897
202
726
589
298
269
901
4,897
202
726
589
298
269
901
4,759
208
702
515
347
349
926
4,830
258
662
510
297
429
903
4,655
230
707
569
289
333
988
5,487
232
1,128
590
318
351
930
5,785
275
906
594
349
460
1,192
35
36
37
38
39
40
41
42
43
44
Oil-exporting countries 4
All other 5
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
1,094
846
846
861
896
929
897
1,027
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2.544
109
215
628
9
505
291
2,850
21
197
645
16
698
343
2,850
21
197
645
16
698
343
2,986
19
135
654
11
832
350
3,277
19
133
695
9
921
395
3,375
53
81
710
17
981
388
3,790
21
148
861
34
1,090
407
3,807
15
170
797
15
1,049
435
52
53
54
Asia
Japan
Middle East oil-exporting countries-
3,080
976
716
3,413
1,140
766
3,413
1,140
766
3,395
1,213
719
3,576
1,143
830
3,395
1,094
837
3,447
990
821
3,684
1,238
915
55
56
Africa
Oil-exporting countries 4
447
136
554
133
554
133
517
114
566
115
669
135
651
151
675
143
57
All other 5
178
240
240
225
249
270
316
321
1. For a description of the changes in the International Statistics tables, see July
1979 BULLETIN, p . 550.
2. Prior to December 1978, foreign currency data include only liabilities denominated in foreign currencies with an original maturity of less than one year.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Includes nonmonetary international and regional organizations.
A68
3.26
International Statistics • September 1981
DISCOUNT R A T E S OF FOREIGN C E N T R A L BANKS
Percent per annum
Rate on Aug. 31, 1981
Rate on Aug. 31, 1981
Country
securities for Argentina
Austria
Belgium
Brazil
Canada
Denmark
Percent
Month
effective
284.69
6.75
13.0
40.0
21.07
Aug. 1981
Mar. 1980
May 1981
June 1980
Aug. 1981
Oct. 1980
11.00
Country
France 1
Germany, Fed. Rep. of
Italy
Japan
Netherlands
Norway
1. As from February 1981, the rate at which the Bank of France discounts
Treasury bills for 7 to 10 days.
2. MLR suspended as of August 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either
3.27
Rate on Aug. 31, 1981
Country
Percent
Month
effective
17.0
7.5
19.0
6.25
9.0
9.0
Aug. 1981
May 1980
Mar. 1981
Mar. 1981
Mar. 1981
Nov. 1979
Sweden
Switzerland
United Kingdom 2
Venezuela
Percent
Month
effective
12.0
5.0
Jan. 1981
May 1981
10.0
July 1980
discounts or makes advances against eligible commercial paper and/or
government
commercial
banks
or
brokers.
For
countries
with
more than one rate applicable to such discounts or advances, the rate
shown is the one at which it is understood the central bank transacts the
largest proportion of its credit operations.
FOREIGN SHORT-TERM INTEREST RATES
Percent per annum, averages of daily figures
1981
Country, or type
1978
1979
1980
Feb.
1
2
3
4
5
6
7
8
9
10
Eurodollars
United Kingdom
Canada
Germany
Switzerland
Netherlands
France
Italy
Belgium
Japan
Mar.
Apr.
May
June
July
Aug.
8.74
9.18
8.52
3.67
0.74
11.96
13.60
11.91
6.64
2.04
14.00
16.59
13.12
9.45
5.79
17.18
13.12
17.28
10.74
7.09
15.36
12.58
16.85
13.44
8.33
15.95
12.26
17.35
13.12
8.67
19.06
12.34
18.96
13.06
9.87
17.86
12.61
19.28
13.05
10.02
18.50
13.63
19.67
12.92
9.76
18.79
14.02
21.84
12.87
9.05
6.53
8.10
11.40
7.14
4.75
9.33
9.44
11.85
10.48
6.10
10.60
12.18
17.50
14.06
11.45
9.78
11.87
17.50
12.52
8.52
10.61
12.56
18.22
13.93
7.87
10.41
13.00
19.92
17.16
6.83
11.76
15.75
19.92
16.90
7.22
11.81
18.84
20.49
15.58
7.41
12.38
17.34
20.78
16.16
7.16
13.54
17.40
20.94
16.00
7.22
NOTE. Rates are for 3-month interbank loans except for the following:
Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan,
Gensaki rate.
3.28
FOREIGN EXCHANGE RATES
Cents per unit of foreign currency
1981
Country/currency
1
2
3
4
5
1978
1979
1980
Feb.
Mar.
Apr.
May
June
July
Aug.
Australia/dollar
Austria/schilling
Belgium/franc
Canada/dollar
Denmark/krone
114.41
6.8958
3.1809
87.729
18.156
111.77
7.4799
3.4098
85.386
19.010
114.00
7.7349
3.4247
85.530
17.766
116.26
6.6033
2.8972
83.442
15.152
116.29
6.6959
2.8966
83.936
15.109
115.32
6.5355
2.8220
83.966
14.683
114.06
6.1722
2.6742
83.265
13.864
114.07
5.9502
2.5734
83.050
13.384
114.27
5.8225
2.5027
82.601
13.074
113.99
5.6968
2.4466
81.766
12.732
6
7
8
9
10
Finland/markka
France/franc
Germany/deutsche mark
India/rupee
Ireland/pound
24.337
22.218
49.867
12.207
191.84
27.732
23.504
54.561
12.265
204.65
26.892
23.694
55.089
12.686
205.77
24.656
20.142
46.757
12.164
173.31
24.612
20.147
47.498
12.131
173.25
23.059
19.548
46.219
12.060
168.46
23.207
18.225
43.601
11.900
159.49
22.511
17.679
42.054
11.688
153.61
22.045
17.253
40.977
11.229
149.40
21.607
16.720
39.988
11.038
146.04
11
12
13
14
15
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
16
17
18
19
20
New Zealand/dollar
Norway/krone
Portugal/escudo
South Africa/rand
Spain/peseta
103.64
19.079
2.2782
115.01
1.3073
102.23
19.747
2.0437
118.72
1.4896
97.337
20.261
1.9980
128.54
1.3958
93.414
18.485
1.7722
129.27
1.1686
91.999
18.540
1.7621
126.50
1.1672
90.273
18.271
1.7178
123.32
1.1395
88.150
17.652
1.6449
119.35
1.0953
85.823
16.907
1.5899
115.18
1.0565
83.771
16.387
1.5429
108.46
1.0248
82.331
16.177
1.4999
105.27
.99864
21
22
23
24
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
United Kingdom/pound
6.3834
22.139
56.283
191.84
6.4226
23.323
60.121
212.24
6.1947
23.647
59.697
232.58
5.5975
21.734
51.502
229.41
5.5527
21.704
52.043
223.19
5.4185
21.309
50.664
217.53
5.4422
20.450
48.400
208.84
5.3970
19.802
48.226
197.38
5.3491
19.293
47.667
187.37
5.1932
18.870
46.091
182.03
92.39
88.09
87.39
96.02
96.22
98.80
103.59
106.86
109.87
112.29
.11782
.47981
43.210
4.3896
46.284
.12035
.45834
45.720
4.3826
49.843
.11694
.44311
45.967
4.3535
50.369
.09807
.48615
44.196
4.2544
42.870
.09699
.47897
43.830
4.2238
42.912
.09280
.46520
43.182
4.1880
41.660
.08766
.45332
42.752
4.1500
39.224
.08436
.44621
42.720
4.1066
37.816
.08233
.43055
42.519
4.0650
36.833
.08038
.42881
42.119
4.0301
36.009
MEMO:
25 United States/dollar 1
1. Index of weighted-average exchange value of U.S. dollar against currencies of other G-10 countries plus Switzerland. March 1973 = 100.
Weights are 1972-76 global trade of each of the 10 countries. Series
as of August 1978. For description and back data, see "Index of
forrevised
FRASER
Digitized
the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on page
700 of t h e A u g u s t 1978 BULLETIN.
NOTE. Averages of certified noon buying rates in New York for cable transfers.
69
Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE TO TABULAR
PRESENTATION
Symbols and Abbreviations
c
e
P
r
*
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading
when more than half of 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)
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
General Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct
STATISTICAL
List Published
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.
RELEASES
Semiannually,
with Latest
Bulletin
Reference
Anticipated schedule of release dates for periodic releases
SPECIAL
Issue
June 1981
Page
A78
TABLES
Published Irregularly, with Latest Bulletin Reference
Commercial bank assets and
Commercial bank assets and
Commercial bank assets and
Commercial bank assets and
Assets and liabilities of U.S.
Commercial bank assets and
liabilities, call dates, December 31, 1978, to March 31, 1980
liabilities, June 30, 1980
liabilities, September 30, 1980
liabilities, December 31, 1980
branches and agencies of foreign banks, March 31, 1981
liabilities, March 31, 1981
October
December
February
April
July
July
1980
1980
1981
1981
1981
1981
A71
A68
A68
A72
A78
A72
70
Federal Reserve Board of Governors
P A U L A . VOLCKER,
Chairman
Vice Chairman
HENRY C . WALLICH
FREDERICK H . S C H U L T Z ,
J . CHARLES PARTEE
OFFICE OF BOARD
OFFICE OF STAFF DIRECTOR
MONETARY AND FINANCIAL
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
to the Board
to the Board
STEPHEN H . AXILROD, Staff
FOR
POLICY
Director
ANTHONY F. COLE, Special Assistant to the Board
WILLIAM R. MALONI, Special Assistant to the Board
FRANK O'BRIEN, JR., Special Assistant to the Board
JOSEPH S. SIMS, Special Assistant to the Board
JAMES L. STULL, Manager, Operations Review Program
EDWARD C. ETTIN, Deputy Staff Director
MURRAY ALTMANN, Assistant to the Board
PETER M. KEIR, Assistant to the Board
STANLEY J. SIGEL, Assistant to the Board
NORMAND R. V. BERNARD, Special Assistant
LEGAL
DIVISION
DIVISION
MICHAEL BRADFIELD, General
Counsel
ROBERT E. MANNION, Deputy General Counsel
J. VIRGIL MATTINGLY, JR., Associate General Counsel
GILBERT T. SCHWARTZ, Associate General Counsel
MICHAEL E. BLEIER, Assistant General Counsel
MARYELLEN A. BROWN, Assistant to the General Counsel
OFFICE OF THE
SECRETARY
WILLIAM W . W I L E S ,
Secretary
BARBARA R. LOWREY, Assistant
Secretary
JAMES MCAFEE, Assistant
Secretary
*D. MICHAEL MANIES, Assistant
Secretary
OF RESEARCH
JAMES L . K I C H L I N E ,
AND
JANET O . H A R T ,
Director
ROBERT A. EISENBEIS, Senior Deputy Associate
Director
JARED J. ENZLER, Senior Deputy Associate
Director
ELEANOR J. STOCKWELL, Senior Deputy Associate
Director
DONALD L. KOHN, Deputy Associate
Director
J. CORTLAND G. PERET, Deputy Associate
Director
HELMUT F. WENDEL, Deputy Associate
Director
MARTHA BETHEA, Assistant
Director
JOE M. CLEAVER, Assistant
Director
ROBERT M. FISHER, Assistant
Director
DAVID E. LINDSEY, Assistant
Director
LAWRENCE SLIFMAN, Assistant
Director
FREDERICK M. STRUBLE, Assistant
Director
Director
LEVON H. GARABEDIAN, Assistant Director
DIVISION
Director
GRIFFITH L. GARWOOD, Deputy
STATISTICS
JOSEPH S. ZEISEL, Deputy
Director
MICHAEL J. PRELL, Associate
Director
STEPHEN P. TAYLOR, Assistant
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
to the Board
OF INTERNATIONAL
(Administration)
FINANCE
Director
JERAULD C. KLUCKMAN, Associate
Director
GLENN E . LONEY, Assistant
Director
DOLORES S. SMITH, Assistant
Director
EDWIN M . TRUMAN,
Director
ROBERT F. GEMMILL, Associate
CHARLES J. SIEGMAN, Associate
Director
Director
LARRY J. PROMISEL, Senior Deputy Associate
Director
DALE W. HENDERSON, Deputy Associate
Director
DIVISION OF BANKING
SUPERVISION AND
REGULATION
JOHN E . R Y A N ,
Director
FREDERICK R. DAHL, Associate
Director
WILLIAM TAYLOR, Associate
Director
JACK M. EGERTSON, Assistant
Director
ROBERT A . JACOBSEN, Assistant
DON E. KLINE, Assistant
ROBERT S. PLOTKIN, Assistant
THOMAS A . SIDMAN, Assistant
SAMUEL H . TALLEY, Assistant
LAURA M. HOMER, Securities
Director
Director
Director
Director
Director
Credit Officer
SAMUEL PIZER, Staff
Adviser
RALPH W. SMITH, JR., Assistant
Director
71
and Official Staff
NANCY H. TEETERS
L Y L E E . GRAMLEY
EMMETT J. RICE
OFFICE OF
OFFICE OF STAFF DIRECTOR
STAFF DIRECTOR
FOR
MANAGEMENT
ITONY J. SALVAGGIO, Acting Staff Director
WOHN M. DENKLER, Staff Director
EDWARD T. MULRENIN, Assistant Staff Director
JOSEPH W. DANIELS, SR., Director of Equal Employment
Opportunity
FEDERAL RESERVE
THEODORE E. ALLISON, Staff
HARRY A. GUINTER, Assistant
Planning
DIVISION
DIVISION
OF DATA
PROCESSING
CHARLES L . HAMPTON,
OF
PERSONNEL
DAVID L . SHANNON,
Director
JOHN R. WEIS, Assistant
Director
CHARLES W. WOOD, Assistant
Director
OFFICE OF THE
JOHN KAKALEC,
CONTROLLER
Controller
GEORGE E. LIVINGSTON, Assistant
DIVISION
OF SUPPORT
DONALD E . ANDERSON,
Controller
SERVICES
Director
ROBERT E. FRAZIER, Associate
Director
WALTER W. KREIMANN, Associate
Director
*On loan from the Federal Reserve Bank of Kansas City.
tOn loan from the Federal Reserve Bank of Dallas.
tOn leave of absence.
§On loan from the Federal Reserve Bank of New York.
BANK
OF FEDERAL
FOR
ACTIVITIES
Director
Director for
RESERVE
OPERATIONS
CLYDE H . FARNSWORTH, JR.,
Direct&r
BRUCE M. BEARDSLEY, Associate
Director
IUYLESS D. BLACK, Deputy Director
GLENN L. CUMMINS, Assistant
Director
NEAL H. HILLERMAN, Assistant
Director
C. WILLIAM SCHLEICHER, JR., Assistant
Director
ROBERT J. ZEMEL, Associate
Director
DIVISION
BANK
Director
LORIN S. MEEDER, Associate
Director
WALTER ALTHAUSEN, Assistant
Director
CHARLES W. BENNETT, Assistant
Director
RICHARD B. GREEN, Assistant
Director
ELLIOTT C. MCENTEE, Assistant
Director
DAVID L. ROBINSON, Assistant
Director
P.D. RING, Adviser
§HOWARD F. CRUMB, Acting Adviser
Contingency
A72
Federal Reserve Bulletin • September 1981
FOMC and Advisory Councils
FEDERAL
OPEN MARKET
COMMITTEE
PAUL A . VOLCKER, Chairman
A N T H O N Y M . SOLOMON, Vice
E D W A R D G . BOEHNE
ROBERT H . BOYKIN
LYLE E . GRAMLEY
SILAS K E E H N
FREDERICK H . SCHULTZ
N A N C Y H . TEETERS
E . GERALD CORRIGAN
J. CHARLES PARTEE
EMMETT J. RICE
HENRY C . WALLICH
STEPHEN H . AXILROD, Staff
Director
MURRAY A L T M A N N ,
Secretary
NORMAND R . V . BERNARD, Assistant
Secretary
NANCY M. STEELE, Deputy Assistant
MICHAEL BRADFIELD, General
Secretary
Counsel
JAMES H. OLTMAN, Deputy General Counsel
ROBERT E. MANNION, Assistant General Counsel
JAMES L . KICHLINE,
Economist
JOSEPH E . B U R N S , Associate
Economist
Chairman
JOHN P . DANFORTH, Associate
Economist
RICHARD G . DAVIS, Associate
Economist
E D W A R D C . E T T I N , Associate
Economist
PETER M . KEIR, Associate
Economist
D O N A L D J. M U L L I N E A U X , Associate
Economist
MICHAEL J. PRELL, Associate
Economist
KARL L . SCHELD, Associate
Economist
E D W I N M . T R U M A N , Associate
Economist
JOSEPH S . ZEISEL, Associate
Economist
PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account
SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account
FEDERAL ADVISORY
COUNCIL
MERLE E. GILLIAND, Fourth District, President
CHAUNCEY E. SCHMIDT, Twelfth District, Vice President
ROBERT M . S U R D A M , S e v e n t h D i s t r i c t
R O N A L D TERRY, E i g h t h D i s t r i c t
CLARENCE G . FRAME, N i n t h D i s t r i c t
GORDON E . W E L L S , T e n t h D i s t r i c t
WILLIAM S . EDGERLY, F i r s t D i s t r i c t
DONALD C . PLATTEN, S e c o n d D i s t r i c t
JOHN W . WALTHER, T h i r d D i s t r i c t
J. O W E N COLE, F i f t h D i s t r i c t
ROBERT STRICKLAND, S i x t h D i s t r i c t
T. C. FROST, JR., Eleventh District
HERBERT V . PROCHNOW,
WILLIAM J. KORSVIK, Associate
CONSUMER
ADVISORY
Secretary
Secretary
COUNCIL
RALPH J. ROHNER, W a s h i n g t o n , D . C . ,
Chairman
CHARLOTTE H. SCOTT, Charlottesville, Virginia, Vice
Chairman
ARTHUR F. BOUTON, Little Rock, Arkansas
F . THOMAS JUSTER, A n n A r b o r , M i c h i g a n
JULIA H . B O Y D , A l e x a n d r i a , V i r g i n i a
ELLEN BROADMAN, W a s h i n g t o n , D . C .
JAMES L . B R O W N , M i l w a u k e e , W i s c o n s i n
MARK E . B U D N I T Z , A t l a n t a , G e o r g i a
RICHARD F. KERR, Palm City, Florida
JOSEPH N. CUGINI, Westerly, Rhode Island
RICHARD S . D ' A G O S T I N O , P h i l a d e l p h i a , P e n n s y l v a n i a
SUSAN PIERSON D E W I T T , S p r i n g f i e l d , I l l i n o i s
JOANNE S . FAULKNER, N e w H a v e n , C o n n e c t i c u t
LUTHER GATLING, N e w Y o r k , N e w Y o r k
VERNARD W . H E N L E Y , R i c h m o n d , V i r g i n i a
JUAN JESUS HINOJOSA, M c A l l e n , T e x a s
SHIRLEY T . HOSOI, L o s A n g e l e s , C a l i f o r n i a
GEORGE S . IRVIN, D e n v e r , C o l o r a d o
HARVEY M . K U H N L E Y , M i n n e a p o l i s , M i n n e s o t a
T H E REV. ROBERT J. M C E W E N , S . J . , C h e s t n u t H i l l ,
Massachusetts
STAN L . M U L A R Z , C h i c a g o , I l l i n o i s
WILLIAM J. O ' C O N N O R , B u f f a l o , N e w
York
MARGARET REILLY-PETRONE, Upper Montclair, New Jersey
R E N E REIXACH, R o c h e s t e r , N e w Y o r k
FLORENCE M . RICE, N e w Y o r k , N e w Y o r k
HENRY B . SCHECHTER, W a s h i n g t o n , D . C .
PETER D . SCHELLIE, W a s h i n g t o n , D . C .
N A N C Y Z . SPILLMAN, LOS A n g e l e s , C a l i f o r n i a
RICHARD A. VAN WINKLE, Salt Lake City, Utah
MARY W . WALKER, M o n r o e , G e o r g i a
73
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK,
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
Robert P. Henderson
Thomas I. Atkins
Frank E. Morris
James A. Mcintosh
N E W YORK*
10045
Robert H. Knight, Esq.
Boris Yavitz
Frederick D. Berkeley, III
Anthony M. Solomon
Thomas M. Timlen
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
John W. Eckman
Jean A. Crockett
Edward G. Boehne
Richard L. Smoot
CLEVELAND*
44101
J. L. Jackson
William H. Knoell
Martin B. Friedman
Milton G. Hulme, Jr.
Willis J. Winn
Walter H. MacDonald
Maceo A. Sloan
Steven Muller
Edward H. Covell
Naomi G. Albanese
Robert P. Black
Jimmie R. Monhollon
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper
Communications
and Records Center
22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
N e w Orleans
30301
35202
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
K A N S A S CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77001
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84130
98124
Vice President
in charge of branch
Robert E. Showalter
Harold J. Swart
Robert D. McTeer, Jr.
Stuart P. Fishburne
Albert D. Tinkelenberg
William A. Fickling, Jr.
John H. Weitnauer, Jr.
Louis J. Willie
Jerome P. Keuper
Roy W. Vandegrift, Jr.
John C. Bolinger, Jr.
Horatio C. Thompson
William F. Ford
Robert P. Forrestal
John Sagan
Stanton R. Cook
Herbert H. D o w
Silas Keehn
Daniel M. Doyle
Armand C. Stalnaker
William B. Walton
E. Ray Kemp, Jr.
Sister Eileen M. Egan
Patricia W. Shaw
Lawrence K. Roos
Donald W. Moriarty, Jr.
Stephen F. Keating
William G. Phillips
Norris E. Hanford
E. Gerald Corrigan
Thomas E. Gainor
Paul H. Henson
Doris M. Drury
Caleb B. Hurtt
Christine H. Anthony
Robert G. Lueder
Roger Guffey
Henry R. Czerwinski
Gerald D. Hines
John V. James
Josefina A. Salas-Porras
Jerome L. Howard
Lawrence L. Crum
Robert H. Boykin
William H. Wallace
Cornell C. Maier
Caroline L. Ahmanson
Harvey A. Proctor
John C. Hampton
Wendell J. Ashton
George H. Weyerhaeuser
John J. Balles
John B. Williams
Hiram J. Honea
Charles D. East
F. J. Craven, Jr.
Jeffrey J. Wells
James D. Hawkins
William C. Conrad
John F. Breen
Donald L. Henry
Robert E. Matthews
Betty J. Lindstrom
Wayne W. Martin
William G. Evans
Robert D. Hamilton
Joel L. Koonce, Jr.
J. Z. R o w e
Thomas H. Robertson
Richard C. Dunn
Angelo S. Carella
A. Grant Holman
Gerald R. Kelly
*Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, 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.
74
Federal Reserve Board Publications
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75
CONSUMER EDUCATION
PAMPHLETS
Short pamphlets
suitable for classroom use.
copies available without charge.
Multiple
Alice in Debitland
The Board of Governors of the Federal Reserve System
Consumer Handbook To Credit Protection Laws
The Equal Credit Opportunity Act and . . . Age
The Equal Credit Opportunity Act and . . . Credit Rights in
Housing
The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide
Incidental Credit
The Equal Credit Opportunity Act and . . . Women
Fair Credit Billing
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Federal Reserve Glossary
Monetary Control Act of 1980
How to File A Consumer Credit Complaint
If You Borrow To Buy Stock
If You Use A Credit Card
Truth in Leasing
U.S. Currency
What Truth in Lending Means to You
STAFF
STUDIES
Studies and papers on economic
that are of general
interest.
Summaries
Only Printed
and
in the
financial
subjects
Bulletin
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.
TIE-INS B E T W E E N THE GRANTING OF CREDIT AND SALES OF
INSURANCE BY B A N K HOLDING COMPANIES AND OTHER
LENDERS, by Robert A. Eisenbeis and Paul R. Schweitzer. Feb. 1979. 75 pp.
MEASURES
OF
CAPACITY
UTILIZATION:
PROBLEMS
AND
TASKS, by Frank de Leeuw, Lawrence R. Forest, Jr.,
Richard D. Raddock, and Zoltan E. Kenessey. July
1979. 264 pp.
THE G N M A - G U A R A N T E E D PASSTHROUGH SECURITY: MARKET D E V E L O P M E N T A N D I M P L I C A T I O N S FOR THE
GROWTH A N D STABILITY OF H O M E MORTGAGE L E N D -
ING, by David F. Seiders. Dec. 1979. 65 pp.
PERFORMANCE A N D CHARACTERISTICS OF E D G E CORPORA-
TIONS, by James V. Houpt. Feb. 1981. 56 pp.
BANKING STRUCTURE A N D PERFORMANCE AT THE STATE
LEVEL DURING THE 1970S, by Stephen A. Rhoades. Mar.
1981. 26 pp.
FEDERAL RESERVE DECISIONS ON B A N K MERGERS A N D A C -
QUISITIONS DURING THE 1970s, by Stephen A. Rhoades.
Aug. 1981. 16 pp.
REPRINTS
Most of the articles reprinted
do not exceed 12 pages.
Measures of Security Credit. 12/70.
Revision of Bank Credit Series. 12/71.
Assets and Liabilities of Foreign Branches of U.S. Banks.
2/72.
Bank Debits, Deposits, and Deposit Turnover—Revised Series. 7/72.
Rates on Consumer Instalment Loans. 9/73.
New Series for Large Manufacturing Corporations. 10/73.
The Structure of Margin Credit. 4/75.
Industrial Electric Power Use. 1/76.
Revised Series for Member Bank Deposits and Aggregate
Reserves. 4/76.
Industrial Production—1976 Revision. 6/76.
Federal Reserve Operations in Payment Mechanisms: A
Summary. 6/76.
The Federal Budget in the 1970's. 9/78.
Implementation of the International Banking Act. 10/79.
Perspectives on Personal Saving. 8/80.
The Impact of Rising Oil Prices on the Major Foreign
Industrial Countries. 10/80.
Federal Reserve and the Payments System: Upgrading Electronic Capabilities for the 1980s. 2/81.
U.S. International Transactions in 1980. 4/81.
Survey of Finance Companies, 1980. 5/81.
76
Index to Statistical Tables
References are to pages A3 through A68 although the prefix "A" is omitted in this index
ACCEPTANCES, bankers, 10, 25, 27
Agricultural loans, commercial banks, 18, 19, 20, 26
Assets and liabilities (See also Foreigners)
Banks, by classes, 17, 18-21
Domestic finance companies, 39
Federal Reserve Banks, 11
Foreign banks, U.S. branches and agencies, 22
Nonfinancial corporations, current, 38
Savings institutions, 29
Automobiles
Consumer installment credit, 42, 43
Production, 48, 49
BANKERS balances, 17, 18-20 (See also Foreigners)
Banks for Cooperatives, 35
Bonds (See also U.S. government securities)
New issues, 36
Yields, 3
Branch banks, 15, 21, 22, 56
Business activity, nonfinancial, 46
Business expenditures on new plant and equipment, 38
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 17
Federal Reserve Banks, 11
Central banks, 68
Certificates of deposit, 21, 27
Commercial and industrial loans
Commercial banks, 15, 17, 22, 26
Weekly reporting banks, 18-22, 23
Commercial banks
Assets and liabilities, 3, 15, 17, 18-21
Business loans, 26
Commercial and industrial loans, 15, 17, 22, 23, 26
Consumer loans held, by type, 42, 43
Loans sold outright, 21
Nondeposit funds, 16
Number, 17
Real estate mortgages held, by holder and property, 41
Commercial paper, 3, 25, 27, 39
Condition statements (See Assets and liabilities)
Construction, 46, 50
Consumer installment credit, 42, 43
Consumer prices, 46, 51
Consumption expenditures, 52, 53
Corporations
Profits and their distribution, 37
Security issues, 36, 65
Cost of living (See Consumer prices)
Credit unions, 29, 42,.43
Currency and coin, 5, 17
Currency in circulation, 4, 13
Customer credit, stock market, 28
DEBITS to deposit accounts, 12
Debt (See specific types of debt or securities)
Demand deposits
Adjusted, commercial banks, 12, 14
Banks, by classes, 17, 18-21
Ownership by individuals, partnerships, and
corporations, 24
Demand deposits—Continued
Subject to reserve requirements, 14
Turnover, 12
Depository institutions
Reserve requirements, 8
Reserves, 3, 4, 5, 14
Deposits (See also specific types)
Banks, by classes, 3, 17, 18-21, 29
Federal Reserve Banks, 4, 11
Turnover, 12
Discount rates at Reserve Banks (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 37
EMPLOYMENT, 46, 47
Eurodollars, 27
FARM mortgage loans, 41
Federal agency obligations, 4, 10, 11, 12, 34
Federal and federally sponsored credit agencies, 35
Federal finance
Debt subject to statutory limitation and types and
ownership of gross debt, 32
Receipts and outlays, 31
Treasury operating balance, 30
Federal Financing Bank, 30, 35
Federal funds, 3, 6, 18, 19, 20, 27, 30
Federal Home Loan Banks, 35
Federal Home Loan Mortgage Corporation, 35, 40, 41
Federal Housing Administration, 35, 40, 41
Federal Intermediate Credit Banks, 35
Federal Land Banks, 35, 41
Federal National Mortgage Association, 35, 40, 41
Federal Reserve Banks
Condition statement, 11
Discount rates (See Interest rates)
U.S. government securities held, 4, 11, 12, 32, 33
Federal Reserve credit, 4, 5, 11, 12
Federal Reserve notes, 11
Federally sponsored credit agencies, 35
Finance companies
Assets and liabilities, 39
Business credit, 39
Loans, 18, 19, 20, 42, 43
Paper, 25, 27
Financial institutions, loans to, 18, 19, 20
Float, 4
Flow of funds, 44, 45
Foreign banks, assets and liabilities of U.S. branches and
agencies, 22
Foreign currency operations, 11
Foreign deposits in U.S. banks, 4, 11, 18, 19, 20
Foreign exchange rates, 68
Foreign trade, 55
Foreigners
Claims on, 56, 58, 61, 62, 63, 67
Liabilities to, 21, 56-60, 64-66
GOLD
Certificates, 11
Stock, 4, 55
All
Government National Mortgage Association, 35, 40, 41
Gross national product, 52, 53
HOUSING, new and existing units, 50
INCOME, personal and national, 46, 52, 53
Industrial production, 46, 48
Installment loans, 42, 43
Insurance companies, 29, 32, 33, 41
Interbank loans and deposits, 17
Interest rates
Bonds, 3
Business loans of banks, 26
Federal Reserve Banks, 3, 7
Foreign countries, 68
Money and capital markets, 3, 27
Mortgages, 3, 40
Prime rate, commercial banks, 26
Time and savings deposits, 9
International capital transactions of the
United States, 56-67
International organizations, 56-61, 64-67
Inventories, 52
Investment companies, issues and assets, 37
Investments (See also specific types)
Banks, by classes, 17, 29
Commercial banks, 3, 15, 17, 18-20
Federal Reserve Banks, 11, 12
Savings institutions, 29, 41
LABOR force, 47
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 17, 18—21
Commercial banks, 3, 15, 17, 18-21, 22, 26
Federal Reserve Banks, 3, 4, 5, 7, 11, 12
Insured or guaranteed by United States, 40, 41
Savings institutions, 29, 41
MANUFACTURING
Capacity utilization, 46
Production, 46, 49
Margin requirements, 28
Member banks
Borrowing at Federal Reserve Banks, 5, 11
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Reserves and related items, 14
Mining production, 49
Mobile home shipments, 50
Monetary aggregates, 3, 14
Money and capital market rates (See Interest
rates)
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds (See Investment companies)
Mutual savings banks, 3, 9, 18-20, 29, 32, 33, 41
NATIONAL defense outlays, 31
National income, 52
OPEN market transactions, 10
PERSONAL income, 53
Prices
Consumer and producer, 46, 51
Stock market, 28
Prime rate, commercial banks, 26
Production, 46, 48
Profits, corporate, 37
REAL estate loans
Banks, by classes, 18-20, 41
Mortgage terms, yields, and activity, 3, 40
Savings institutions, 27
Type of holder and property mortgaged, 41
Repurchase agreements and federal funds, 6, 18, 19, 20
Reserve requirements, 8
Reserves
Commercial banks, 17
Depository institutions, 3, 4, 5, 14
Federal Reserve Banks, 11
Member banks, 14
U.S. reserve assets, 55
Residential mortgage loans, 40
Retail credit and retail sales, 42, 43, 46
SAVING
Flow of funds, 44, 45
National income accounts, 53
Savings and loan assns., 3, 9, 29, 33, 41, 44
Savings deposits (See Time deposits)
Savings institutions, selected assets and liabilities, 29
Securities (See also U.S. government securities)
Federal and federally sponsored agencies, 35
Foreign transactions, 65
New issues, 36
Prices, 28
Special drawing rights, 4, 11, 54, 55
State and local governments
Deposits, 18, 19, 20
Holdings of U.S. government securities, 32, 33
New security issues, 36
Ownership of securities of, 18, 19, 20, 29
Yields of securities, 3
Stock market, 28
Stocks (See also Securities)
New issues, 36
Prices, 28
TAX receipts, federal, 31
Thrift institutions (See Savings institutions)
Time deposits, 3, 9, 12, 14, 17, 18-21
Trade, foreign, 55
Treasury currency, Treasury cash, 4
Treasury deposits, 4, 11, 30
Treasury operating balance, 30
UNEMPLOYMENT, 47
U.S. balance of payments, 54
U.S. government balances
Commercial bank holdings, 18, 19, 20
Member bank holdings, 14
Treasury deposits at Reserve Banks, 4, 11, 30
U.S. government securities
Bank holdings, 17, 18-20, 32, 33
Dealer transactions, positions, and financing, 34
Federal Reserve Bank holdings, 4, 11, 12, 32, 33
Foreign and international holdings and transactions, 11,
32, 64
Open market transactions, 10
Outstanding, by type and ownership, 32, 33
Rates, 3, 27
Savings institutions, 29
Utilities, production, 49
VETERANS Administration, 40, 41
WEEKLY reporting banks, 18-23
Wholesale (producer) prices, 46, 51
YIELDS (See Interest rates)
78
The Federal Reserve System
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