Full text of Federal Reserve Bulletin : September 1983
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VOLUME 6 9 •
NUMBER 9 •
SEPTEMBER 1983
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 • S. David Frost
Griffith L. Garwood • James L. Kichline • Edwin M. Truman
Naomi P. Salus,
Coordinator
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Unit headed by Mendelle T. Berenson,
the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Helen L. Hulen.
Table of Contents
663 THE ROLE OF BANKS IN THE
INTERNATIONAL FINANCIAL
SYSTEM
During the late sixties and throughout most
of the seventies, banks in many countries
expanded their international activities.
672 TREASUR Y AND FEDERAL RESER VE
FOREIGN EXCHANGE
OPERATIONS
During the February-July period under review the dollar advanced against most major currencies.
693 INDUSTRIAL
PRODUCTION
Output rose about 0.9 percent in August.
695
ANNOUNCEMENTS
Modification of automated clearinghouse
service and approval of interim fee schedule
for A C H deposits made at night.
Purchase of improved quality sensor for
examination of used currency and destruction of unfit currency.
Amendment to Regulation L.
Amendment to Regulation Y.
Decrease in combined assets of overseas
branches of member banks.
Revisions to Regulation O.
Changes in Board staff.
Admission of one state bank to membership
in the Federal Reserve System.
699 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET
COMMITTEE
At its meeting on July 12-13, 1983, the
Committee considered its longer-run ranges
for growth of the monetary and credit aggregates. The Committee reaffirmed the
ranges established in February for growth
in M2 and M3 for 1983 and agreed on
tentative growth ranges for the period from
the fourth quarter of 1983 to the fourth
quarter of 1984 of 6V2 to 9Vi percent for M2
and 6 to 9 percent for M3. The Committee
considered that growth in M l in a range of 5
to 9 percent f r o m the second quarter of 1983
to the fourth quarter of 1983, and in a range
of 4 to 8 percent f r o m the fourth quarter of
1983 to the fourth quarter of 1984 would be
consistent with the ranges for the broader
aggregates. The associated range for total
domestic nonfinancial debt was reaffirmed
at 8V2 to 1IV2 percent for 1983 and tentatively set at 8 to 11 percent for 1984.
With regard to short-run policy, the
Committee agreed to seek a slight further
increase in the existing degree of restraint
on reserves. It was anticipated that such a
policy course would be associated with
growth of M2 and M3 at annual rates of
about 8V2 and 8 percent respectively for the
period f r o m June to September. Primary
weight would be placed on the performance
of these broader monetary aggregates in
evaluating the conduct of open market operations. The members agreed that lesser
restraint on reserve conditions would be
acceptable in the event of a significant
shortfall in the growth of the aggregates
over the period ahead, while somewhat
greater restraint would be acceptable in the
context of more rapid growth in the aggregates. It was understood that the need for
greater or lesser reserve restraint would
also be evaluated on the basis of available
evidence about trends in economic activity
and prices and conditions in domestic and
international financial markets, including
foreign exchange markets. The Committee
anticipated that its third-quarter objectives
for the broader aggregates would be con-
sistent with a deceleration in M1 growth to
an annual rate of around 7 percent from
June to September, and that expansion in
total domestic nonfinancial debt would remain within the range of SV2 to 11 Vi percent
established for the year. It was agreed that
the intermeeting range for the federal funds
rate, which provides a mechanism for initiating consultation of the Committee, would
remain at 6 to 10 percent.
707 LEGAL
A70 BOARD OF GOVERNORS
All
AND
STAFF
FEDERAL OPEN MARKET
COMMITTEE
AND STAFF; ADVISORY
COUNCILS
A73 FEDERAL RESERVE
AND OFFICES
BANKS,
BRANCHES,
DEVELOPMENTS
Revision of Regulation G; amendments to
Regulation T; revision of Regulation U;
amendments to Regulation Y and rules regarding delegation of authority; various
bank holding company and bank merger
orders; and pending cases.
A1
A69 GUIDE TO TABULAR
PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
FINANCIAL
AND B USIN ESS S TA TISTICS
A3 Domestic Financial Statistics
A46 Domestic Nonfinancial Statistics
A54 International Statistics
A74 FEDERAL RESERVE
PUBLICATIONS
BOARD
A76 INDEX TO STATISTICAL
TABLES
A78 MAP OF FEDERAL RESERVE
SYSTEM
The Role of Banks
in the International Financial System
This paper was prepared by Nancy H. Teeters,
Member, Board of Governors of the Federal
Reserve System, and Henry S. Terrell, Chief of
the Board's International Banking Section, Division of International Finance. An earlier version
was presented by Governor Teeters to the International Conference on Multinational Banking
and the World Economy at the Leon Recanati
Graduate School of Business Administration in
Tel Aviv, Israel, on June 14, 1983.
The role of banks in the international financial
system expanded significantly in the late sixties
and throughout most of the seventies as banks
from many countries expanded their international activities. International banking has made an
important contribution to a more integrated and
interdependent economic and financial system.
Just as a growing international trading system
permits participants to enjoy the benefits of
specialization and diversity, a more integrated
international financial system enables banks to
specialize as lenders or as collectors of deposits
on an international basis, depending on the saving and investing propensities of their customers.
This closer integration of financial markets on a
worldwide basis can benefit both savers and
borrowers. A potential problem with international financial integration is that financial disturbances can be transmitted quickly from one
country to another.
International activities permit greater diversification in the assets and liabilities of banks than
can be achieved from purely domestic banking
activities. Expansion into international activities, however, exposes banks to a whole new set
of operating risks in terms of dealing in foreign
currencies, in foreign legal jurisdictions, and
with customers, including foreign banks, about
whom the banks may have little information.
The Federal Reserve, as the central bank of
the United States, has important policy responsi
bilities in the area of international banking. As a
supervisor of banks and bank holding companies, as an agency with responsibilities for monitoring an effective payments mechanism in the
United States, and as a lender to banks and other
depository institutions through the discount window, the Federal Reserve needs to be aware of
foreign as well as domestic factors that influence
the condition of individual banks and the banking
system.
Developments in international banking can
also have important implications for the Federal
Reserve in the conduct of monetary policy. In a
world in which financial integration is proceeding
at a rapid pace, interpretation of the monetary
and credit aggregates is improved by better information on credit extended to U.S. borrowers
from offshore sources and on deposits held by
U.S. residents at offshore banking offices because these transactions can be close substitutes
for banking transactions at banking offices located in the United States.
In addition to these responsibilities, the Federal Reserve is charged with maintaining a competitive and equitable banking environment in the
United States. In this role the Federal Reserve
has worked toward developing the statutory and
regulatory environment in which foreign banks
compete in the United States with domestically
chartered banks. The International Banking Act
of 1978 and subsequent regulations issued by the
Federal Reserve and the other U.S. banking
agencies have established a broad framework of
national treatment for U.S. offices of foreign
banks. Although sometimes overlooked because
of more immediate concern with other issues, the
U.S. activities of foreign banks have been an
extremely dynamic part of the rapid expansion of
international banking. Currently, the U.S. offices
of foreign banks, including U.S.-chartered commercial banks whose majority owners are foreign
banks as well as U.S. agencies and branches of
664
Federal Reserve Bulletin • September 1983
foreign banks, account for 14 percent of total
assets of all banks in the United States, and
about 40 percent of the assets of all banks in New
York State. In addition, foreign banks make
loans to and take deposits from U.S. residents at
their offices located abroad.
With its broad responsibilities in international
banking, the Federal Reserve follows developments in this area quite closely. This article
focuses on the current situation in international
lending by banks.
ECONOMIC
SETTING
Because the condition of banking institutions
reflects the general environment in which they
operate, a review of the broad economic setting
will help illuminate the current international role
of banks. The past decade has been characterized by worldwide inflation on the order of 10
percent per annum in the industrial countries that
are members of the Organisation for Economic
Co-operation and Development (OECD), compared with about 4 percent in the previous decade. Inflation in the developing countries also
increased substantially in the seventies. To a
large extent the higher inflation in the seventies
resulted from the two oil shocks of 1973-74 and
1979-80. Many countries adopted relatively expansionary policies as their economies slipped
into recession in 1974-75 after the first oil-price
shock.
Since the second oil-price shock in 1979-80,
the policy focus of most OECD countries, in1.
cluding the United States, has been definitely
anti-inflationary. Fiscal policy in many industrial
countries other than the United States, when
judged on a discretionary basis, generally has
been tightened, although actual budget deficits
widened because of weak economic activity
overall. Monetary authorities in several countries adopted targets for monetary aggregates
with the intention of lowering the inflation rate
and not accommodating inflationary pressures
exerted by increases in oil prices or wage claims.
The result of the restrictive policies in the
major industrial countries has been that inflation
rates have fallen more rapidly than was generally
expected (table 1). The success in fighting inflation has not been universal: in France and Italy
inflation remains quite high, while the United
States, Japan, Germany, and more recently, the
United Kingdom and Canada, have been quite
successful in lowering inflation. As a result of
these anti-inflation policies, the growth of economic activity in the industrial countries in 198082 was substantially below the growth achieved
in the 1976-79 period.
The concerted and simultaneous policy response to inflation has had important implications for the international banking and financial
system, particularly through its impact on major
borrowers. The stagnation in the major industrial
countries reduced the export earnings of the
developing countries, both because it reduced
the real volume of exports and because it had an
impact on the prices of primary commodities. As
the chart shows, the export earnings of the
developing countries that were not members of
Percentage change in consumer price index
Fourth quarter from fourth quarter in previous year
United
States
Canada
France
Germany
Italy
Japan
United
Kingdom
GNP-weighted
change in CPI in
6 major foreign
countries
(percent)
8.3
12.2
7.4
5.1
6.5
9.0
12.8
12.5
9.6
4.5
1.9
9.1
12.0
10.2
5.9
9.1
8.7
9.5
11.1
12.3
9.7
4.1
8.3
15.0
9.9
10.0
9.2
9.5
11.5
13.6
14.1
9.5
11.5
7.2
6.5
5.5
3.8
3.7
2.3
5.4
5.3
6.5
4.7
2.1
11.6
24.8
11.4
21.1
15.1
11.5
17.7
21.4
18.4
16.6
13.7
15.0
23.9
9.2
9.4
6.3
3.9
4.9
7.4
4.1
2.9
1.6
10.3
18.2
25.3
14.9
13.1
8.1
17.3
15.3
11.9
6.2
5.2
10.7
16.9
10.7
9.8
8.1
6.1
9.2
10.5
9.3
6.7
5.2
Country
Year
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983'
1. First half at an annual rate. Data for countries other than the United States are not seasonally adjusted.
Banks and the International
Exports and debt of non-OPEC developing countries
Ratio scale, billions of dollars
Data on total debt and debt to banks are for year-end; data on
exports are for entire year.
the Organization of Petroleum Exporting Countries (OPEC) were essentially stagnant in 1981
and 1982 after increasing nearly 20 percent per
year on average in the previous four years.
A second important impact on the major borrowing countries of the policy focus on reducing
inflation has been the rapid rise in nominal and
real interest rates associated with the monetary
restraint programs. Because interest paid on
much of the bank debt of these countries is
adjusted periodically to reflect the costs of funds
to the banks, rising interest rates are translated
into rising costs to borrowers within three to six
months. Projects and development plans that
Financial System
665
were economically attractive at low real interest
rates, which were often negative, have become
uneconomic as real interest rates have reached a
range of 5 to 10 percent. The relatively high
levels of real interest rates have resulted in part
from demands by investors and depositors for
protection against the inflationary environment
that dominated the seventies. High real interest
rates have, of course, also affected the economic
viability of domestic investment programs.
problems of developing countries appear
attributable to internal as well as external causes.
A number of these countries were relatively slow
to adjust to the environment of higher real interest rates and reduced demand for their exports.
The growth rate of the developing countries in
general was sustained into 1981—well past the
time when the major industrial countries had
begun their contractionary policies (table 2).
Developing countries pursued policies that resulted in growth in their external indebtedness of
20 to 25 percent per year, faster than the growth
of their export earnings (see the chart). They
clearly needed to adjust their policies and development programs to the altered and less inflationary economic environment.
Adjustment to new economic and financial
conditions can be difficult, particularly when
some major participants have made calculations
and commitments in the light of earlier conditions that tended to be characterized by high
inflation and significantly lower real interest
rates. In the past, the development programs of
many countries were based on the expectation of
growing markets for exports and relatively inex-
2. Selected data for non-OPEC developing countries
Growth rate (percent)
Developing countries
Year
OECD
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
6.1
.7
-.2
4.8
3.8
4.0
3.1
1.2
1.4
-.2
All
Western
Hemisphere
6.7
5.6
4.2
6.6
5.4
5.6
5.0
4.7
2.3
.8
8.4
6.9
3.1
5.5
5.0
4.5
6.7
6.0
-.1
-1.5
1. The estimates for these years were made without the benefit of
BIS-reported data on bank lending, which are available only since
1975.
Gross
external
debt
(billions of
dollars)
Debt to
foreign
banks
(billions
of dollars)
Total
reserves
minus gold
(billions of
dollars)
Ratio of
debt service
to exports
(percent)
110'
135'
165
200
250
310
365
430
505
555e
35'
50'
62.7
80.9
94.3
131.3
171.0
210.2
253.5
282.7
26.1
28.2
27.2
38.2
49.9
64.6
74.7
74.4
69.9
60.6
15.3
15.9
17.9
16.8
17.3
22.0
21.9
20.0
23.1
21.1'
e^wtimate.
666
Federal Reserve Bulletin • September 1983
cally low levels relative to global imports and
current account balances, while increased access
by member countries to IMF credit, relative to
their quotas, placed further strains on IMF resources. This decline in IMF resources, relative
to potential uses, limited the ability of the IMF to
offer temporary financial support to countries
implementing adjustment programs.
Access by developing countries to credit from
commercial banks insulated these countries
against the need to adjust to the first oil shock
and delayed, and in some cases made more
painful, their adjustment to the second one. A
positive result has been that developing countries were able to sustain significantly higher
rates of real economic growth than the OECD
countries over this period (table 2). The higher
level of growth in developing countries was
accompanied by a four-fold increase in their
external debt, a large increase in the ratio of
export earnings needed to service external debt,
and a decline in the ratio of their international
reserves to their external debt from about onefourth in 1973 to one-eighth in 1982.
The growing participation of banks in international lending has been expressed both through
participation by more banking institutions and by
increases in the exposure of the largest banks,
which traditionally have been the most active in
international lending. A survey prepared for the
Group of Thirty, a group of private individuals
analyzing international economic issues, indicated that in the 1970s about 60 new banks a year
became active in international financing. The
pensive costs of external sources of savings.
Investment programs often had long commitment and gestation periods; it was thus difficult
to restrain external needs for additional capital
on short notice without imposing severe costs on
partially completed investment projects. Interestingly, however, there are examples of countries with well-managed foreign borrowing programs that appear to have retained their
creditworthiness internationally even though
they have experienced the same external
changes as those countries now having difficulties in servicing their external indebtedness.
PARTICIPATION BY BANKS
Banks have formed important financial links
between the major industrial countries, the surplus-earning oil-exporting countries, and the netcapital-importing developing countries. Since the
early seventies, commercial bank lending to
many countries has increased dramatically, and
the growth in the banks' share of financial flows
to developing countries has been especially notable. Borrowings from banks provided about twothirds of the financing of the total current account deficits and reserve accumulations of the
developing countries in 1975-81 (table 3).
The rapid growth in bank lending helped offset
slower rates of growth of official bilateral aid and
official contributions to multilateral development
banks. In addition, the resources of the International Monetary Fund (IMF) declined to histori3.
Financing of the current account deficits of non-OPEC developing countries
Billions of dollars
Item
Balance on goods, services, and private
transfers
Official transfers
Current account
Source
offinancing
Direct investment
Borrowing from official sources (excluding
IMF)
Borrowing from banks
I M F credit (net)
Miscellaneous and residual
Net accumulation ( - ) or reduction in official reserves'
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982e
-11
5
-6
-31
7
-24
-39
7
-32
-26
7
-19
-22
8
-14
-37
8
-29
-54
12
-42
-76
12
-64
-93
13
-80
-81
12
-68
4
5
5
5
5
6
8
8
11
8
5
9
11
19
2
-6
9
18
2
-4
11
11
-4
7
16
2
-4
-2
12
22
-1
5
14
37
0
-7
18
43
2
-7
18
48
5
-6
19
24
5
3
-8
-2
1
-11
-11
-15
-10
0
4
9
1. Excluding changes due to fluctuations in the value of gold or to
the allocation of SDRs.
e Estimate,
Banks and the International Financial System
4.
667
Claims on non-OPEC developing countries, data for nine largest U.S. banks
from Country Exposure Lending Survey
Billions of dollars
Date
1977
December
1978
June
December
1979
June
December
1980
June
December
1981
June
December
1982
June
December
Total foreign
claims
Claims on nonOPEC developing
countries
Reporting
banks'
total
assets
Reporting
banks'
total
capital
132.7
30.0
372.5
135.9
147.3
31.0
33.4
151.8
168.2
Claims on non-OPEC
developing countries
Percent of
total assets
Percent of
total capital
18.4
8.1
163
390.2
422.5
19.0
20.0
8.0
7.9
164
176
35.0
39.9
449.8
486.1
21.1
21.9
7.8
8.2
166
182
176.7
186.1
41.9
47.9
508.4
531.0
23.0
24.0
8.2
9.0
182
199
196.0
205.0
51.6
57.6
553.7
564.6
25.0
26.1
9.3
10.2
206
220
209.5
205.3
60.3
64.2
566.3
588.0
27.1
29.0
10.6
10.9
222
221
SOURCE: Semiannual Country Exposure Report and Report of Condition.
participation by more institutions fostered competition in a market that traditionally had been
dominated by a few large institutions, and in part
contributed to lower net returns (narrower lending spreads) to the banks. Table 4 indicates the
growth of total foreign claims and claims on
developing countries of the largest U.S. banks.
Clearly, both total foreign lending and lending to
developing countries were growing very rapidly
at these institutions, and their lending to developing countries was expanding relative to their
assets and capital base.
The supply of bank financing to developing
countries in the seventies was quite elastic, at
margins above the cost of funds to the banks
(spreads) that, ex post, appear narrow in relation
to the risks involved in such lending. Indeed,
quite early, even before the difficulties for developing countries surfaced, some forward-looking
observers expressed concerns that these lending
spreads were too narrow to justify the risks
associated with the growing levels of bank exposure.
Why did this rapid growth in international
lending by banks occur in an environment of
relatively low returns? There is no obvious simple answer to this question, but several factors
seem important. First, international trade was
growing more rapidly than purely domestic economic activity, and bank lending was directed
toward that more rapidly growing economic sector. In the United States, the share of exports in
the total gross national product increased from
6.6 percent in 1970 to 12.5 percent in 1982. As the
importance of trade flows increased, individual
banks felt themselves under increasing pressure
to expand their international activities to service
the needs of their traditional corporate customers that were active in international trade and in
foreign investments. The rapid growth in this
sector encouraged entry by financial institutions,
which made the market more competitive.
Another factor affecting bank lending was the
desire of many countries to support and sustain
economic development programs through recourse to external sources of funds. The oil-price
increases in the 1970s placed budgetary pressures on many donor countries, so that official
bilateral and multilateral financing remained relatively unchanged; thus an increasing share of the
enlarged financing requirements of the developing countries was directed toward banks.
Borrowers also played a part in this development. Borrowers facing an elastic supply of
funds at interest rates that appeared attractive
did not always tailor their borrowing programs to
realistic assumptions about their prospects for
general economic growth or their ability to earn
foreign exchange. In some cases, borrowings
appear to have been utilized not to finance
668
Federal Reserve Bulletin • September 1983
additional investment but, instead, at the margin
to postpone needed downward adjustments in
domestic consumption. In several Latin American countries the rise in interest rates seriously
increased the cash flow problems associated with
servicing existing indebtedness.
Banking institutions proved to be efficient at
organizing themselves to provide funds to these
borrowers, and the absence of significant problems in these markets encouraged more banks to
become active. The banks developed a variety of
techniques that made such lending attractive to
more institutions. Loans were priced on a basis
that called for frequent adjustments in the interest rates, which protected the banks from any
risks of changing interest rates. Another pricing
convention allowed some participants to link the
interest payments they received to their prime
rate, which afforded smaller banks some protection from external influences on their own pricing structure. The rapid expansion of the international interbank market, while it did not broaden
the overall supply of credit, did augment the
liquidity available to individual banks, which at
the margin may have increased the supply of
credit to some borrowers.
Perhaps the most significant financing innovation was the syndicated Eurocurrency credit, in
which a large bank, or group of large banks, put
together a borrowing package and an information
memorandum, and smaller banks could participate in the credit without direct contact with the
borrower and without first-hand analysis of the
borrower's creditworthiness. Syndication permitted large amounts of credit to be raised for a
single borrower on short notice and to be widely
diffused among banks. It also allowed smaller
banks to participate in international lending without large outlays for analysis and business development. In the face of declining domestic loan
demand, international lending through participation in loan syndicates allowed many banks to
expand their total assets, although not necessarily their return on assets, in a flexible way.
Finally, in the latest stages of the expansion of
bank lending, banks and borrowers did not appear alert to the impending risks of such lending
or to the possibility of fundamental changes in
economic policies and conditions that would
affect the viability of continued international
lending. The favorable record of lending may
have concealed impending problems from bank
management especially at the time that available
data were indicating rapid increases in total and
short-term debt of several major borrowers. A
large proportion of the loans were to foreign
sovereign borrowers who, it was believed, would
have very strong incentives to service their debt.
POLICY
RESPONSES
In a situation that has become strained, that
appears somewhat disorderly, and that poses a
threat to the stability of the international financial system, the important question is how to set
policy to avoid a major disruption to that system
in the short run while establishing a more stable
system for the longer run. As noted earlier, the
current situation has evolved because of the
actions of borrowers, changes in economic policy, and the actions of lenders—including banks.
Therefore, a resolution of the situation will require participation by all groups.
The first two elements of a potential solution
appear interrelated: more effective adjustment
policies by borrowing countries, preferably supported by and approved by the IMF, and more
rapid, sustained, and noninflationary expansion
of the economies of the OECD countries. Such
developments will reduce the current account
financing needs of the borrowing countries. The
borrowing countries need adjustment to reduce
the growth of their indebtedness to some level
below the rate of growth of their GNP or export
earnings, which will improve the relationship of
their external debt to their ability to produce and
export. A number of countries have taken strong
adjustment measures, and we are currently witnessing very low, and in some cases negative,
economic growth. It can be hoped that this
period of reduced growth will not last too long.
Once these borrowing countries establish a more
viable debt-servicing position, their access to
external financing will improve, and the rate of
growth of their external debt should approximate
the growth of their economies and exports.
A second adjustment measure is sustained,
noninflationary growth in the industrial countries, which would improve the ability of developing countries to export. Current estimates
suggest that every 1 percent increase in the
Banks and the International
growth of the O E C D countries raises the exports
of developing countries on the order of $5 billion
to $10 billion. An economic recovery is already
under way in the United States, and preliminary
information suggests that economic activity is
picking up in other industrial countries. The
economic recovery that is beginning will be
considerably more beneficial to indebted countries if it is accompanied by a mix of fiscal and
monetary policies in industrial countries, including the United States, that reduces the general
level of real interest rates.
Although both adjustment by borrowers and
faster economic growth in the OECD countries
will reduce current account deficits, these deficits, which are already sharply below those of
1980-81, will require financing. As a structural
matter, developing countries will be expected to
run current account deficits to import capital for
their development programs.
Banks are an important potential source of the
financing of these current account deficits. They
have been a major source of financing to borrowing countries in the past, and collectively and
individually have a large stake in the economic
viability of these borrowers. Therefore, as part
of several programs negotiated by the IMF with
the borrowing countries, banks as a group are
continuing to provide some additional credit in
1983, although at much slower rates than in the
past few years. Given an estimated total bank
debt of $283 billion at year-end 1982, an increase
in international bank exposure to non-OPEC
developing countries of from 5 to 7 percent in
1983 would result in an increase in bank claims
on borrowing countries of $15 billion to $20
billion—a sharp reduction from new bank credits
extended in 1982 and more in line with credits
extended by banks before 1978. These sums
would provide a reasonable share of financing of
a vastly reduced aggregate current account deficit for these countries. An increase of 5 to 7
percent in bank exposure combined with an
increase in bank capital of about 10 percent in
1983 also would allow banks to reduce their
exposure to these countries relative to their
capital in 1983, particularly if the increase in
exposure is diffused widely throughout the banking system to prevent a disproportionate share of
the burden from falling on any single group of
banks. These new flows of bank credit will also
Financial System
669
have to be distributed in a satisfactory way
among borrowing countries.
•i In addition to bank credit, an effective financing package for developing countries has two
other important elements. First, the I M F needs
adequate resources to perform its functions. As a
multilateral official institution, the IMF is
uniquely equipped to examine the policies of
borrowing countries and to make recommendations concerning those policies. For its recommendations to have any effect, the I M F will need
sufficient resources to give the borrowing country the incentive to accept the I M F ' s policy
guidance.
A final element of an adequate financing network to date has involved a source of funds that
could be utilized on short notice when problems
affect major borrowers. Central banks, and in
some cases treasuries or finance ministries, have
been in the best position to provide such funding.
Recent experience with credit packages to major
borrowers suggests that these coordinated official actions have made a significant contribution
toward stabilizing international markets. Such
packages were intended not as long-term, or
even medium-term financing, but as temporary
or bridging financing until adjustment programs
and associated funding could be worked out and
implemented. This type of official funding has
generally been used in a highly selective way,
when some development has threatened the international financial system.
Beyond the immediate situation, steps are needed to design a more stable long-run environment in
which these problems will be less likely to recur.
Although such steps would help reduce the probability and magnitude of international disturbances,
a fully risk-free international or domestic environment is not an obtainable objective.
Reducing the risk in the international environment calls for better and more stable economic
policies in both developed and developing countries, including the willingness to take early
action against inflation. Over the long run, little
is gained from inflation, and the costs of fighting
it rise dramatically as it becomes more deeply
embedded in the economic system. Both industrial and developing countries have strong incentives to avoid policies that encourage inflation. A
policy mix in industrial countries that relies too
heavily on monetary restraint can impose a seri-
670
Federal Reserve Bulletin • September 1983
ous burden on indebted countries by raising the
real costs of servicing outstanding indebtedness.
The recent record appears to indicate that
developing countries cannot maintain rates of
growth of external borrowing that exceed the
growth of their economies or exports over a long
period of time without incurring unsustainable
debt-service burdens. On a technical level, the
costs of overvalued currencies and of artificially
low levels of domestic interest rates, which can
induce heavy private capital outflows when a
country may be borrowing heavily abroad, are
becoming better understood. Private capital outflows have intensified the external financing
problems of several major borrowers.
The costs of trade protection are generally
analyzed in terms of higher domestic prices and
reduced consumer choice. The recent experience
has taught us that an additional cost of restricting
trade is the greater difficulty many borrowing
countries face in achieving a growth of export
earnings needed to service their outstanding
debts.
Finally, some argue that debt burdens can be
eliminated through inflationary policies that reduce the real burden of existing indebtedness. In
a world in which nominal interest rates on outstanding indebtedness are adjusted frequently, a
rise in inflation will be translated very quickly
into higher rates of interest for borrowers. These
higher nominal rates of interest, which must be
paid almost immediately, can actually result in
increased cash flow problems for borrowing
countries.
As mentioned earlier, a contribution to greater
long-run stability can be made by the IMF, which
as a regular matter consults on the economic
policies of its member countries. Although the
IMF has no direct leverage over a country's
economic policies unless that country is applying
for temporary IMF financial assistance, countries increasingly are respecting the technical
capabilities of the IMF and may become more
responsive to its views even if they are not
seeking access to credit. Staying in the good
graces of the IMF will become especially important as more countries realize their potential
need to borrow from that institution, particularly
if the IMF has adequate resources to be a credible lender. The IMF is also exploring ways to
broaden statistical information on all countries, a
step that should improve the environment in
which international lending decisions are made.
Banks can also learn from this recent experience. Bank managements should monitor and
control country risk more carefully. Large concentrations of country exposure need to be reviewed regularly because large concentrations of
any kind can cause problems for a bank. Banks
considering participation in loan syndications
should analyze the expected returns and should
not participate in a credit simply to increase their
total assets or short-term profits. In addition,
although an individual bank may seem to have an
interest in protecting itself by confining its lending to short-term credits, in the aggregate a
shortened overall maturity of debt can pose a
serious problem to both borrowers and banks.
Finally, bank regulatory agencies in the United
States and other countries are reviewing and
improving their supervisory policies on country
risk. International cooperation in banking supervision and exchanges of information on supervisory practices have increased in recent years,
notably through the Committee on Banking Regulations and Supervisory Practices, which meets
regularly at the Bank for International Settlements. An agreement that banks and their country risk exposure be supervised on a consolidated basis is a helpful development in this area.
The revised "Concordat" recently issued by the
committee, though not dealing directly with
country risk, clarifies the roles and responsibilities for supervising banking institutions operating in or chartered by the major industrial countries. In addition to these multinational
measures, on June 13, 1983, the Federal Reserve
and the Comptroller of the Currency issued
minimum capital guidelines for major U.S. multinational banks; these guidelines underscore the
importance attached by U.S. bank regulators to
adequate capitalization of banks significantly engaged in international lending.
It is important, however, not to expect too
much of bank regulators. Bank regulatory agencies are not equipped to become international
country-rating agencies. Their expertise in this
area is not necessarily greater than that of banks.
Nevertheless, they have a special function to
perform. Because banks benefit from deposit
insurance on a wide range of their liabilities and
have access to liquidity support at the discount
Banks and the International
window, they have special advantages over other
lenders in competing for funds. Furthermore,
bank liabilities serve as the principal means of
payment in the economy. In light of these advantages and of the importance of a smoothly functioning payments mechanism, the Congress has
given regulators a role in supervising domestic
and international risks that might threaten the
position of U.S. banks. Therefore, bank supervisors have a responsibility to review bank portfolios, to encourage diversification, and to comment on heavy concentrations in general,
especially when a bank has no special expertise
or does not enjoy some important advantage
from a large concentration.
In the United States, as part of the legislative
process of reviewing the U.S. participation in the
increased I M F quotas, the federal bank regulators have been working with the Congress to
develop an improved longer-term statutory and
regulatory structure for international lending by
U.S. banks. On April 7, 1983, the federal bank
regulators submitted a Joint Memorandum detailing a program for improved supervision and
regulation of international lending. The major
elements of that new supervisory program were
the following:
1. Tightened supervision of the foreign exposures of U.S. banks, including more frequent and
forceful comments on large international exposures and clearer guidelines for examiners in
commenting about large exposures to bank managements;
2. More frequent and more timely public disclosure of large concentrations of country risk of
U.S. banks, which should result in better market
surveillance of their activities;
3. Adjustment to the accounting conventions
for amortization of spreads and fees that result
from rescheduling, which should make banks
more cautious in extending new credits, and, it is
hoped, more accurate in pricing credits that may
be rescheduled; and
4. Requirements that banks maintain reserves
for especially troubled international credits,
which should make the reported earnings and
assets of banks conform more closely to economic realities and act as a further caution to banks
to restrain commitments, or demand higher compensation, for credits because of their potential
for a rescheduling or restructuring.
Financial System
671
In developing this new framework for supervising international lending, U.S. regulators
were aware of the need to balance the longerterm objective of setting the appropriate signals
and incentives for banks to engage in international lending against the short-run objective of
avoiding excessive restraint that could threaten
the stabilization packages being put together for
major borrowers. Some of the provisions may
impinge on bank earnings and capital and thus
may require a phase-in period to avoid market
disruptions. Other countries are also reviewing
their supervisory procedures to improve their
surveillance and to avoid situations in which
competitive inequities favor lending by banks
chartered in a particular country.
CONCLUSION
The international financial system within which
banks are operating has changed considerably in
recent years, and all the participants are in the
process of adapting their behavior to those
changes. The adaptations, while necessary to
avoid the more serious consequences of continued unrestrained inflation, have imposed serious
costs on all participants. The challenge for the
immediate future is for all participants in the
system to recognize their long-term interests in a
stable, if certainly not risk-free, system and to
adapt their own behavior in such a manner that
the transition is a relatively orderly and wellmanaged process. The returns to cooperative
behavior by all participants with an interest in
the system are high.
The management of this process challenges
macroeconomic policy to maintain the gains that
have been made in combating inflation while
allowing sufficient economic growth to permit
servicing of outstanding external debts, or in
some cases restructuring of debt on terms that
are acceptable to both borrowers and lenders.
Agencies charged with responsibility for regulating banks are reviewing and modifying their
policies to ensure an appropriate environment
for international bank lending. These challenges
are formidable and demand coordination of efforts to meet them. A successful outcome seems
probable in light of the growing awareness and
understanding of the problem at hand.
•
672
Treasury and Federal Reserve
Foreign Exchange Operations
This 43rd 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
of foreign exchange
operations.
This report was prepared by Sam Y. Cross,
Manager of Foreign Operations for the System
Open Market Account and Executive Vice President in charge of the Foreign Group of the
Federal Reserve Bank of New York. It covers the
period February through July 1983. Previous
reports have been published in the March and
September [October 1982] BULLETINS of each
year beginning with September 1962.
During the February-July period under review,
the dollar advanced against most major foreign
currencies, offsetting by varying degrees the
substantial declines in dollar rates that had occurred during the months just before the period.
The dollar's rise took place at a time when the
world recession was giving way to expansion and
inflation generally was decelerating. But all
economies were still operating far below capacity, and there was some question as to how strong
the recovery might be. Also, the pace of expansion among the industrialized economies was
uneven. Unemployment stayed well above the
levels of recent recessions; and the decline of
interest rates from the high levels of mid-1982
was losing momentum. In some nations, pressures therefore remained on policymakers to
take action to support economic growth and
create jobs. Under these circumstances, the currencies that showed the strongest performance in
the exchange markets were those of countries
already pulling out of recession, like the United
States, and of countries seen in the market as
relatively less vulnerable to such pressures. In
addition to the dollar, these currencies included
the Canadian dollar,- pound sterling, and the
Japanese yen.
At the outset the dollar showed little of the
strength that was later to characterize this period. Questions remained about the durability of
the economic upturn here, the outlook for U . S .
interest rates, and the possible implications for
the dollar of a prospective deterioration in the
U.S. current account. Economic expansion in
the United States appeared to be proceeding, as
expected, more moderately than previous postwar recoveries and to be limited to interestsensitive sectors of the economy, such as housing. The current account was widely forecast to
drop into deep deficit, reflecting an additional
drag on domestic output. At the same time, the
1.
Federal Reserve reciprocal currency
arrangements
Millions of dollars
Institution
Austrian National Bank
National Bank of
Belgium
Bank of Canada
National Bank of
Denmark
Bank of England
Bank of France
German Federal Bank . .
Bank of Italy
Bank of Japan
Bank of Mexico:
Regular facility
Special facility
Netherlands Bank
Bank of N o r w a y
Bank of Sweden
Swiss National Bank . . .
Bank for International
Settlements:
Swiss francs/dollars . .
Other authorized
European currency/
dollars
Amount of
facility
July 31, 1982
Effective ;
Amount of
Aug. 30,
. fifflifw.,
1982
July 31, 1983
250
1,000
2,000
250 ,
• TV/.
1,000
2,000
250
3,000
2,000
6,000
3,000
250
3,000
2,000
6,000
3,000
5,000
5,000
700
0
500
250
300
4,000
325
'
700
269'
500
250'300
4,000 '
600
1,250
30,100
600
325
f
1,250
30,369
1. Size of facility was reduced as repayments were made.
673
outlook for inflation improved further in response to evident productivity increases and
weak commodities prices, particularly for oil.
Moreover, as the number of developing countries negotiating debt reschedulings grew, the
uncertainties about how the international financial structure would withstand the working-out
of these problems continued to cloud the outlook
for world economic recovery. Therefore, market
participants held to the view that, for a number
of domestic and international reasons, dollar
interest rates would soon resume their decline
after a short reversal in early February and
expected the dollar to ease back as well. This
view was reinforced in mid-February when the
Federal Reserve announced its monetary growth
targets for 1983, which were interpreted as allowing room for both a moderately paced recovery
and further gradual declines in interest rates.
Contrary to expectations, U.S. trade figures
for the early months of the year showed a smaller
deficit than had been recorded during the last
part of 1982. Also, short-term interest rates did
not decline below mid-January levels, and the
Federal Reserve kept its discount rate at 8V2
percent as established in December 1982. But the
improving outlook for prices and for growth
contributed to a further easing in long-term interest rates and buoyed the market for equities.
Long-term yields moved down in two stages—
first during February and again in April—while
record highs were being registered for major
stock price indexes.
The dollar held relatively steady through midMay, notwithstanding the strains surrounding
difficult negotiations leading up to an agreement
of the Organization of Petroleum Exporting
Countries (OPEC) on new oil prices and production quotas as well as a major speculative attack
against the curency relationships within the European Monetary System (EMS). Many market
professionals, while impressed by the dollar's
apparent firmness, still expected the dollar's
medium-term trend to be downward because of
the outlook for interest rates and current accounts. Also, for a time talk spread that the
major industrial countries might be preparing to
discuss a coordinated intervention effort at the
Williamsburg summit. Thus, interbank dealers in
foreign exchange and speculators on futures exchanges were prepared to sell dollars regularly.
By contrast, press reports of substantial foreign
interest in U.S. stock and bond markets buoyed
sentiment toward the dollar at times.
By May, reports of large boosts in employment and in output signaled that recovery in the
United States was gaining momentum. Looking
ahead, a considerable improvement in consumer
sentiment, the impact on spending of increasing
values of financial assets, and the prospect of
new tax cuts in early July all suggested that the
upswing would be far more robust than anticipated just a few months previously and might match
the strength of earlier recoveries. At the same
time, expectations faded that a compromise
would soon be reached to cut the government's
large fiscal deficits for the coming years. Moreover, the government was having to borrow an
unusually large amount for a second quarter, a
time when tax revenues are seasonally heavy.
Also, there was mounting concern about the
rapid growth of the monetary aggregates, particularly the narrowly defined aggregate, M l . Incoming data showed that the rate of growth of
M l , after slowing in early April, had rebounded.
Under these circumstances, U.S. interest rates
of all maturities began to rise. Interest rates in
other countries were, by comparison, relatively
steady, holding on to the declines that had been
achieved over the past several months. As a
result, interest rate differentials against most
currencies moved more decidedly in favor of the
dollar during late May and the adverse differential against sterling was eliminated by mid-June.
During May and early June the dollar was
pushed up again by strong professional bidding.
U.S. interest rates were rising, there were no
signs of coordinated intervention in the immediate aftermath of the summit, and after that meeting there appeared to be less foreign pressure on
the United States to modify its policy mix. In
addition, the increasing attractiveness of yields
on government securities drew a growing amount
of investment from nonresidents. Thus, the dollar's rise continued without interruption until
mid-June.
After a short period of consolidation around
the end of the quarter, the dollar's advance
resumed during July. By this time, the vigor of
the industrial rebound and perceived readiness of
U.S. authorities to allow demand pressures to
show through in higher interest rates were seen
674
Federal Reserve Bulletin • September 1983
in increasing contrast to situations abroad, most
particularly in continental Europe. In this atmosphere, even the publication of the largest
monthly U.S. trade deficit in history for May
appeared not to have dampened demand for the
dollar. Instead, the dollar ratcheted upward at an
accelerating rate, the movement most pronounced with respect to the German mark. Once
again, professional bidding added momentum to
the dollar's rise as it passed its earlier highs for
the year and then surpassed its peaks of November 1982 against several major currencies. Corporate entities also bought dollars to cover needs
which had been postponed earlier in the year.
By late July the dollar's upward movement
had taken on a self-sustaining character in increasingly unsettled trading. Rate movements
were sharp and sudden as market participants
became reluctant to take positions, causing trad2.
ing to become thin and the market to become
disorderly. The U.S. monetary authorities and
foreign central banks intervened in coordinated
operations, which had a calming effect on the
market and helped reestablish order at the time.
These operations, which the U.S. authorities
initiated on Friday, July 29, on a small scale,
were continued during the early days of August.
In total, the Trading Desk operated on four
occasions during the six business days, July 29August 5 to buy $254.1 million equivalent of
German marks and Japanese yen. The operations
involved purchases of $182.6 million equivalent
of German marks and $71.5 million equivalent of
Japanese yen, shared equally by the U.S. Treasury and the Federal Reserve.
During the six months to the end of July, the
dollar rose more than 7 percent against the
German mark and by larger amounts against the
Drawings and repayments by foreign central banks and the Bank for International Settlements
Millions of dollars, drawings and r e p a y m e n t s ( - )
Facility and
drawing bank
Regular
reciprocal
currency
200.0
f 1,400.01
\-900.0J
200.0
Total
swap arrangements
Mexico
with Bank
Special c o m b i n e d credit facility
Federal R e s e r v e special facility f o r $325
million
U . S . T r e a s u r y special facility f o r $600
million
11,400.0
1-900.0
1983:2
swap arrangements
between
Central Bank of Brazil and U.S.
Treasury
-217.4
-482.6
124
-341
0
-482.6
0
0
0
0
0
89.81
-43.8/
211.2
67.8
-56.0
0
269.0
/
\
166.81
-81.3/
392.2
122.3
-104.0
0
496.0
603.5
190.0
-160.0
0
765.0
3}
500.1
-500J
280.0"
.0
450.0
-280.0
-450.0
f 250.01
1-104.2/
-145.8
f 200
1-200
200
-200
0
f
1
.0
Total
Outstanding
July 31,
1983
825.01
825.0J
950.0/
$260 million
1983
July
J
fl,081.61
Total
$280 million
$450 million
1983:1
of
U . S . Treasury special t e m p o r a r y facility
for $1,000 million
$500 million
1982:4
/
124.01
1-124.0/
0
Bank for International S e t t l e m e n t s .
(against G e r m a n marks)
Special
1982:3
arrangements
Bank of M e x i c o
Special
Outstanding
July 1,
1982
1,480.0
-604.2
:§}
:S}
400.01
-1,275.8/
Foreign Exchange Operations
3.
675
U.S. Treasury securities, foreign currency denominated 1
Millions of dollars equivalent; issues or redemptions (—)
Issues
Public series
Germany
Switzerland
Total
Amount of
commitments
July 1, 1982
1982:3
1982:4
1983:1
1983:2
1983
July
Amount of
commitments
July 31,
1983
3,171.3
458.5
3,629.8
-1,231.9
0
-1,231.9
-664.1
0
-664.1
0
-458.5
-458.5
-667.9
0
-667.9
-607.3
0
-607.3
0
0
0
1. Data are on a value-date basis. Because of rounding, figures may not add to totals.
other EMS currencies. The dollar rose less
against other currencies—5 3 /4 percent in terms of
the Swiss franc and less than 1 percent against
the Japanese yen and pound sterling. The dollar
was down marginally against the Canadian dollar. In trade-weighted terms the dollar rose several percentage points, setting records for the
floating-rate period on many indexes.
In other operations during the six-month period, the U.S. monetary authorities continued to
have credits outstanding to Mexico and Brazil.
On February 1 the Central Bank of Brazil repaid
$280 million of the $730 million outstanding on
facilities made available to it earlier by the Treasury. The remaining $450 million facility was
repaid on March 3. On February 28, the Treasury
agreed to provide Brazil with two additional
swap facilities of $200 million each in anticipation of Brazil's drawings under a compensatory
financing facility and an extended fund facility of
the International Monetary Fund (IMF). These
swaps were drawn on February 28 and March 3
and were repaid by March 11. Thus, at that point
Brazil had repaid in full all Treasury swaps made
available to it since October 1982. In December,
the Bank for International Settlements (BIS),
acting with the support of the U.S. Treasury and
the monetary authorities of other nations, provided the Central Bank of Brazil with a $1.2
billion credit facility, which was subsequently
increased to $1.45 billion. As part of a liquiditysupport arrangement for the BIS provided by the
participating monetary authorities, the Treasury
through the Exchange Stabilization Fund (ESF)
agreed to be substituted for the BIS for $500
million of the credit facility in the event of
delayed repayment by the Central Bank of
Brazil.
Funding for Mexico was provided through the
Bank of Mexico's regular swap facility of $700
million with the Federal Reserve and also
through special swap facilities totaling $1.85 billion in cooperation with other central banks
through the BIS. The U.S. portion of the latter
facility consisted of $600 million by the Treasury
and $325 million by the Federal Reserve. In
February, Mexico drew the remaining portion of
the special facility, receiving $44.3 million from
the Treasury and $25.8 million from the Federal
Reserve. On February 28, the Bank of Mexico
fully repaid the remaining $373 million outstanding under the Federal Reserve's regular reciprocal currency arrangement, which had been
drawn last August before other arrangements
had been put in place. On May 31, Mexico
prepaid outstanding swaps under the special facilities, of which $104 million was paid to the
Treasury and $56 million to the Federal Reserve.
Drawings of $496 million and $269 million were
outstanding from the Treasury and the Federal
Reserve respectively as of July 31 but were
subsequently repaid upon maturity late in August.
In April, the BIS, acting with the support of
the U.S. Treasury and the monetary authorities
in other countries, agreed to participate in an
international financial support package for Yugoslavia. The Treasury, through the E S F , as part of
a liquidity-support arrangement for the BIS provided by the participating monetary authorities,
agreed to be substituted for the BIS for $75
million in the event of delayed repayment by
Yugoslavia. By the end of the period, partial
repayments on this facility reduced the Treasury
contingent commitment to $57 million.
On May 12 and on July 26, the U.S. Treasury
redeemed at maturity the last two German markdenominated securities equivalent to $667.9 mil-
676
4.
Federal Reserve Bulletin • September 1983
Net profits or losses (—)
on U.S. Treasury and Federal Reserve
current foreign exchange operations1
the Treasury held the equivalent of $2,046.5
million in such securities as of the end of July.
Millions of dollars
GERMAN
U.S. Treasury
Period
Federal
Reserve
0
1982:3
0
1982:4
0
1983:1
0
1983:2
July 1983
0
Valuation profits and losses on
outstanding assets and
liabilities as of July 31, 1 9 8 3 . . . . - 8 0 3 . 3
Exchange
Stabilization General
account
Fund
-2.3
4.3
0.5
17.0
0
89.4
16.0
38.3
58.1
70.1
-850.8
0
1. Data are on a value-date basis.
lion and $607.3 million respectively. These represented the final redemptions of foreign currency
notes, public series, which had been issued in the
Swiss and German markets with the cooperation
of the respective authorities in connection with
the dollar support program of November 1978.
In the period from February through July, the
Federal Reserve realized no profits or losses
from exchange transactions. The E S F and the
Treasury general account gained $17.0 million
and $128.2 million respectively in connection
with redemptions of securities denominated in
German marks. As of July 31, cumulative bookkeeping, or valuation, losses on outstanding foreign currency balances were $803.3 million for
the Federal Reserve and $850.8 million for the
Treasury ESF. (Valuation gains and losses represent the increase or decrease in the dollar value
of outstanding currency assets and liabilities,
using end-of-period exchange rates as compared
with rates of acquisition.) The above losses reflect the fact that the dollar strengthened since
the time the foreign currencies were purchased.
The Federal Reserve and the Treasury have
invested foreign currency balances acquired in
the market as a result of their foreign exchange
operations in a variety of investments that yield
market-related rates of return and have a high
degree of quality and liquidity. Under the authority provided by the Monetary Control Act of
1980, the Federal Reserve invested some of its
own foreign currency resources in securities
issued by foreign governments. As of July 31, the
Federal Reserve's holdings of such securities
were equivalent to $1,328.1 million. In addition,
MARK
The German mark had participated in the generalized rise in currencies against the dollar around
the turn of the year and had firmed within the
EMS. By the beginning of February, however,
the mark had eased back across the board,
trading at DM 2.4735 against the dollar, as expectations of a continued decline of the dollar weakened. Within the EMS, it drifted down to the
middle of the narrow band, as speculative buying
of marks in anticipation of a realignment subsided pending early March elections in Germany
and France. Nevertheless, the sharp swing in
Germany's current account back into surplus
and further deceleration of inflation during the
past year had generated expections in the markets that the mark would again be revalued in an
imminent change in EMS currency relationships.
Soon after the opening of the six-month period, speculative pressures reemerged as the election dates approached, and the mark again came
into strong demand. By mid-February it had
moved to the ceiling of the EMS after opinion
polls predicted that the five-month-old Kohl government would get a mandate from the electorate
and have sufficient control of Parliament to pursue its conservative economic policies. In early
March, when the election results confirmed the
predictions of the polls, the demand for marks
increased. With the currency at the top of the
EMS, both the Bundesbank and other participating central banks had to intervene heavily to
keep the mark within its upper limits. As the
pressures intensified, several other EMS countries whose currencies were pinned to the bottom
of the EMS supplemented market intervention
with other actions to discourage speculation.
Thus, speculative bidding for the mark against
non-EMS currencies intensified, lifting the mark
some 4 percent against the dollar to its high for
the period of DM 2.3685 by March 14 and by
similar amounts against other major non-EMS
currencies. In the realignment of March 21, the
mark's central rate was adjusted upward by 5.5
percent. Other EMS currencies were revalued by
smaller amounts or devalued, with the result
Foreign Exchange Operations
that, in terms of the bilateral central rates, the
mark was revalued about the same amount on a
trade-weighted basis.
Meanwhile, Germany's recession had bottomed out late in 1982 and business confidence
was improving, but the pace of recovery was still
expected to be insufficient to curb a continuing
rise in unemployment. The government was
committed to fiscal restraint to achieve a longstanding German objective of reducing the size
of the fiscal deficit relative to GNP. Already the
government had made some progress in imposing
cuts in social expenditures.
Under these circumstances, the Bundesbank
had taken advantage of the drop in inflation and
the improvement in the current account to ease
monetary conditions. Early in the year it had
acted out of concern over a possible reversal of
the downtrend of interest rates abroad and the
risk that the mark's recovery had stalled, providing liquidity through open market operations and
increasing banks' rediscount quotas, but not
lowering interest rates. Effective March 18, however, it took the more visible step of cutting its
discount and Lombard rates 1 percentage point,
to 4 percent and 5 percent respectively to signal
its intention to lend support to the economy. But,
by this time, the domestic money market had
become quite liquid and short-term market rates
had declined, partly because of the liquidity
effects of the heavy foreign exchange intervention before the realignment. Moreover, the
scheduled transfer of Bundesbank profits to the
federal government in April was also going to
inject liquidity. Consequently, the Bundesbank
tempered its interest rate action with some cutback in banks' rediscount quotas. German interest rates nonetheless continued to ease, both
absolutely and relative to those in the United
States. Thus, by the end of March the adverse
interest differential in the Euromarkets for threemonth maturities, for example, had widened to
almost 4Vi percentage points, a level not seen
since July 1982.
After the realignment, the mark moved to the
bottom of the new EMS band and also fell back
to early-February levels against the dollar. Speculative inflows and commercial leads and lags
were unwound. In addition, capital was attracted
abroad. Although interest rates in other EMS
countries and in the United States were tempo
677
rarily easing, interest differentials were still adverse to the mark and no longer offset by the
prospect of early exchange rate appreciation.
Also, there was talk of possible liquidation of
some OPEC investment in marks to meet current
payments. The EMS central banks bought large
amounts of marks to keep the German currency
within its lower intervention limits. Also with the
mark declining against most non-EMS currencies, the Bundesbank sold dollars. By the end of
April, Germany's foreign currency reserves
dropped more than they had risen during the
previous two months to show a net $1.1 billion
decline from January's $40.6 billion level.
By mid-May, business confidence in Germany
had faltered. On the one hand, the benefits of
decelerating inflation were becoming more apparent. A drop in the inflation rate to below V/i
percent had paved the way for a very moderate
increase in the key pay agreement for metal
workers and an even lower average wage increase of 2.6 percent for public service employees. In addition, publication of first-quarter figures confirmed that there had been some revival
in interest-sensitive sectors of the economy such
as investment goods and consumer durables. On
the other hand, exports—the sector that traditionally leads Germany out of recession—had
shown almost continuous weakness since mid1982.
The trade figures for April revealed a significant drop both in exports and in the trade surplus, suggesting that the strength recorded for
the first quarter reflected little more than a
speedup of shipments to other EMS countries in
anticipation of the EMS realignment. Henceforth, export demand was seen as being depressed, not only by the weakness of markets
among the developing countries and OPEC, as
before, but also as a result of the revaluation of
the mark that was larger than expected in the
March realignment and effects of new austerity
measures in France. Moreover, the scope for
providing more impetus to the economy by further reducing interest rates was rapidly disappearing. Central bank money growth was still
running well above the Bundesbank's target
range of 4 to 7 percent for the year, even after
reversal of the foreign exchange inflows of February-March. And, abroad, the outlook for interest rates in the United States was bringing into
678
Federal Reserve Bulletin • September 1983
question hopes that the ten-month-long downswing in world interest rates would continue.
Under these circumstances, the outlook for
the mark became increasingly overshadowed by
that of the dollar, which was buoyed by prospects of a vigorous economic recovery, strong
corporate profits, and increasingly attractive
yields on fixed-income investments in the United
States. As interest rates in the United States
moved up after mid-May, rates in Germany held
generally steady, with the Bundesbank allowing
German banks to borrow from its Lombard facility heavily and for long periods of time. As a
result, interest differentials adverse to the mark
began to widen once more, surpassing the levels
of late March by mid-June and increasing further
throughout July. Also, a number of political
factors weighed on sentiment toward the mark.
The Williamsburg summit passed without apparent agreement on European initiatives pertaining
to interest rates and exchange rates. Meanwhile,
reaffirmation of the NATO decision to place
Pershing II and cruise missiles in Germany underscored the potential for public debate over a
variety of national security issues.
Thus, the mark continued to decline against
the dollar, falling by mid-July below its November 1982 low, and generally traded near the
bottom of the EMS. Market participants took
little apparent note of newly published figures,
pointing to a marked upturn in industrial production or improvement in Germany's trade and
current account figures for June. Instead, at the
end of July the mark's drop accelerated, as
trading became increasingly hectic, to touch a
seven and a half-year low of DM 2.6600.
Throughout the last two and a half months of the
period, the Bundesbank regularly sold modest
amounts of dollars at the fixing but was perceived in the market as not providing strong
resistance to a further drop in the exchange rate
against the dollar. Meanwhile, other EMS central banks bought marks either in compulsory
interventions at the limits of the 2lA percent band
or to rebuild reserves.
By the end of July, trading conditions had
deteriorated considerably. As the mark's decline
relative to the dollar cumulated and major market makers became less willing to take the positions needed to smooth the flow of orders coming
into the market from their customers, the market
became more subject to sudden rate movements
and widening spreads between bid and offered
rates. The U.S. authorities entered the market on
July 29 to purchase marks as part of an intervention operation that continued into the subsequent
week and was coordinated with other central
banks. For its part, the U.S. authorities purchased a total of $182.6 million equivalent of
marks during a period of six business days to
counter disorderly trading conditions.
Primarily as a result of intervention operations, Germany's foreign currency reserves declined a further $1.4 billion after April. For the
whole six-month period, they fell $2.5 billion to
$38.1 billion. The mark ended the period at DM
2.6500 against the dollar, down on balance 7
percent from its early February level. As measured by the Bundesbank's trade-weighted index, however, the mark appreciated by Vi percent, mainly because of the mark's appreciation
vis-a-vis other EMS currencies.
In mid-May and in late July, the U.S. Treasury
repaid at maturity the final two German markdenominated obligations issued in conjunction
with the November 1978 dollar defense program.
These repayments totaled $1.3 billion equivalent.
JAPANESE
YEN
A recovery of the Japanese yen against the
dollar, which had brought the currency up some
19 percent from its November 1982 low by early
January, stalled just before the period under
review. Although the yen remained firm as compared with European currencies, it eased back
against the dollar to ¥240.90 at the beginning of
February. As a result, market participants were
again disappointed in their expectations that Japan's strong current account position, low inflation, and cautious economic policies would set
the stage for the yen to recapture more of the
ground lost against the dollar during the preceding two years.
For some time the yen's weak performance
against the dollar had been regarded by the
Japanese monetary authorities as substantially
reducing their scope for responding to the weakness of domestic economic activity. Fiscal policy
was felt to be constrained by concern over the
budget deficit and a commitment to narrow the
Foreign Exchange Operations
borrowing gap. Monetary policy was felt to be
constrained by the risk that any further easing of
interest rates in Japan might again stimulate
outflows of capital, which had been a major
influence in the yen's weakness. The authorities
wished to avoid adding pressure on the exchange
rate at a time when international attention was
focused on Japan's widening trade surplus. Japan had emerged with the largest current account
surplus of the major industrialized countries,
close to $7 billion in 1982.
In the recessionary environment, which many
countries faced around the turn of the year, the
prospect that Japan might experience a further
sharp increase in its export penetration this year
aggravated already severe trade frictions with its
major trading partners. The Bank of Japan,
therefore, chose not to lower its discount rate
from the 5 x h percent level that had prevailed for
over a year, and Japanese market rates eased
little even as interest rates in most other financial
centers declined substantially after mid-1982.
During February and March, expectations
about the near-term course of Japanese interest
rates shifted frequently. On numerous occasions,
expectations developed that the official discount
rate would be cut. Economic growth continued
to slow, and output in Japan was slipping to
relatively low levels of capacity. Japan's low
inflation, high real interest rates, and the outlook
for modest wage increases in the spring labor
offensive all suggested that there still might be
scope for measures to stimulate domestic demand. Nevertheless, the Bank of Japan repeatedly stated that the yen's exchange rate prevented it from lowering its lending rate. With the
outlook for interest rates uncertain and with
Japan's economy looking stagnant as compared
with the more vigorous performance of the U.S.
economy, foreign investors became skeptical
that Japan's stock and bond markets would make
a strong showing relative to those abroad.
In addition, conditions in world oil markets
and speculation surrounding the EMS realignment affected trading in the Japanese yen for the
first three months of the period. Although Japan
was seen as benefiting from declining prices for
its oil imports, market attention focused on the
immediate, unfavorable impact on Japan's capital account of the possibility that OPEC nations
might liquidate their holdings in Japanese capital
679
markets. Indeed, inflows of capital from OPEC
countries were considerably diminished and contributed, along with substantial overseas investments by Japanese institutional investors, to an
increase in Japan's net long-term capital outflow.
The yen was also caught up at times in the EMS
pressures around mid-March, since the yen was
used to some extent as a vehicle for speculation
against those currencies expected to be revalued.
The yen, therefore, showed little trend against
the dollar through late March. Although at one
point in February it rose to ¥231.20, by the end
of the quarter the yen was trading back around
¥240. It declined about 3 percent against the
mark just before the realignment of the EMS.
However, in the subsequent unwinding of speculative positions, the yen recouped most of that
loss in just a few days.
At the end of March, with the approaching
close of the fiscal year and parliamentary action
on the budget, public attention focused increasingly on the continued sluggishness of the Japanese economy. Real growth had amounted to 3.3
percent in the fiscal year just ending—a disappointing figure by traditional standards—with the
rate of growth decelerating noticeably throughout the year. Export demand remained weak,
reflecting the worldwide recession, increasing
barriers to Japanese goods, and import cutbacks
by developing countries. Japan's current account
surplus continued to widen, most importantly
because imports were depressed by the low level
of domestic demand. The yen's earlier appreciation and weak commodities prices had contributed to an improvement in Japan's terms of trade.
Although this helped strengthen the corporate
sector's financial position, industry remained
cautious about embarking on new investment
projects as long as final demand was flagging.
Thus, loan demand remained weak and the Bank
of Japan scaled back its projection for new
lending by city banks for the coming quarter.
Under these circumstances, calls for an interest rate cut were increasingly heard from private
as well as some government sources, and talk
spread that the government would soon announce measures to support economic growth.
On April 5, the government presented an eightpoint program involving primarily a speedup in
the disbursement of previously budgeted public
works spending. But the Bank of Japan still
680
Federal Reserve Bulletin • September 1983
viewed the exchange rate as too weak to permit a
discount rate cut and thus disappointed hopes
that a drop in interest rates would reinforce the
government's program.
During April and into early May, the yen drew
support from the prospect that Japanese interest
rates would remain stable. In addition, the approaching release of a seven-nation intervention
study and the upcoming Williamsburg summit
focused attention on official exchange rate policies. Market participants interpreted statements
by Bank of Japan Governor Maekawa and others
as presaging a move to a more active international intervention policy. They also anticipated that
the Japanese government might choose to support its currency before the Williamsburg summit
so as to defuse the trade issue.
By May 11, these factors helped boost the yen
to a high of ¥230.35 against the dollar. Speculation in favor of the yen on Chicago's International Monetary Market (IMM) became quite heavy
at times and was an important component of the
runup in the yen, with open interest in yen
contracts hitting successive records. But the
overhang of these positions soon became a
source of concern, as fears arose that a sudden
decline in the yen might be triggered by the need
to cover them. In addition, a renewed rise in
U.S. interest rates and the completion of the
Williamsburg summit without any obvious
change in official foreign exchange operations
exerted a drag on the yen, which dropped back to
a low of ¥243.60 by mid-June. Nevertheless, the
yen had shown a steady advance against the
German and other continental currencies, rising
more than 6 percent vis-a-vis the mark during the
prior two and a half months.
After mid-June, the improvement in Japan's
external sector began to receive more attention
in the exchange markets. A bottoming-out of
exports, together with the continuing low level of
imports, led to a widening of Japan's current
account surplus to a seasonally adjusted annual
rate of $20 billion for the first five months of
1983. In the meantime, the quickening pace of
recovery in the United States, where the import
of manufactured goods was forecast to rise significantly, suggested there would be a further
expansion of Japan's exports. Moreover, political developments in Japan provided background
support for the yen during this period, as the
ruling party's victory in June parliamentary elections confirmed that the government's international and economic policies would not be subject to major change.
Consequently, the yen rate moved up against
the dollar during the latter half of June and held
generally steady during July as the dollar advanced against the continental currencies. But,
when the yen became caught up in the pressures
of a rapidly rising dollar at the month-end, the
Japanese authorities sold dollars as a coordinated intervention operation got under way in which
the U.S. authorities bought $71.5 million equivalent of yen. These purchases during the first days
of August were shared equally between the Federal Reserve and the U.S. Treasury.
Although the yen closed the six-month period
at ¥242.90, near its low against the dollar, it
registered a net decline of less than 1 percent
since the end of January. With the yen relatively
steady against the dollar, it showed an almost
uninterrupted advance against other currencies
after mid-March. The yen ended July almost 7
percent higher on balance against the mark,
thereby challenging its 1978 high against that
currency. The Japanese authorities intervened
little in the exchange markets through the end of
July, with the $1.25 billion increase in foreign
currency reserves since January to $20.7 billion,
primarily reflecting interest receipts on their currency holdings.
Swiss
FRANC
Coming into the period under review, the Swiss
franc was trading well above its previous-autumn
levels against all currencies except the Japanese
yen. After leading the recovery of European
currencies against the dollar that had begun in
mid-November, it held up better than others
after the dollar's turnaround in early January to
trade around SF 2.0250 against the dollar and
about SF 0.82 in terms of the German mark.
By February, there was a perception in the
market that the Swiss authorities might not have
the leeway that they had during much of the
previous year to ease monetary conditions. Inflation, at least at the consumer level, had receded
less in Switzerland than in Germany, Switzer-
Foreign Exchange Operations
land's major trading partner and competitor in
third markets. The growth of central bank money
had begun to rise, coming close to the central
bank's 3 percent target for 1982, and the authorities had adopted the same target for the coming
year. Consequently, there was seen to be rather
little scope for interest rates in Switzerland to
decline from the very low levels of last fall, while
interest rates abroad had dropped substantially.
As a result, the large adverse interest differentials that had fostered heavy capital outflows and
had contributed to last year's weakness of the
franc were narrowing considerably.
There were other reasons as well why market
participants anticipated that capital outflows
from Switzerland might not be so large as in
1982. Foreign official and corporate borrowers,
especially Japanese entities, continued to borrow
in Swiss francs throughout the first half of 1983.
The spot rate on occasion was pushed lower
when the proceeds of new issues were converted
into foreign currencies. But, at the same time,
the sheer size of earlier borrowings was seen as
increasing the potential that the Swiss franc
might come into strong demand sometime in the
future. If, for example, Swiss interest rates were
to rise substantially more than rates in other
markets or if the dollar were to decline, earlier
borrowers might bid for francs to cover their
liabilities. Thus, the attitude of market professionals toward the Swiss franc had come to
incorporate a decided sense of two-way risk.
Sentiment toward the franc was also favorably
affected by other factors. The country's trade
deficit had narrowed by $1 billion to yield a
surplus on current account of $3.4 billion last
year, and most forecasts called for a similarly
sized surplus for 1983. The competitiveness of
Swiss exports had actually improved somewhat,
reflecting in part last year's decline of the franc
relative to the German mark, which had not been
fully reversed. More importantly, the Swiss government's fiscal discipline compared favorably
with that of other countries. Thus, Switzerland
appeared to have come through the difficult
adjustments of recent years with fewer economic
dislocations, as well as fewer political divisions,
than most countries. Moreover, Switzerland's
traditional role as a safe haven and its relative
political stability made the franc an attractive
currency for investment, particularly when con
681
tentious political campaigns were under way in a
number of neighboring countries.
For a time during February and March, these
favorable factors were overshadowed by intensified bidding for German marks in anticipation of
an EMS realignment. With the mark rising
strongly across the board, the Swiss franc
dropped steadily as it became one of the currencies against which long mark positions were
established. In all, the franc declined nearly 6
percent against the mark to SF 0.8663 on March
14, its lowest level in one and a half years.
Against the dollar, the Swiss franc swung widely
under the influence of active speculative trading
in the interbank market and on Chicago's IMM
before settling around the level of SF 2.0750 in
mid-March.
By late March, however, the Swiss franc had
begun to move back up against the mark as
positions taken before the March 21 realignment
of the EMS were reversed. Meanwhile, the
franc's traditional interest rate disadvantage narrowed. The Swiss National Bank lowered its
official lending rates by Vi percentage point on
March 17, in coordination with a larger reduction
by the German central bank. But Swiss money
market interest rates actually rose during the
second half of March, while those in most other
centers were declining. With some slowing of the
previous rate of foreign borrowing in the Swiss
capital market, the franc gained steadily against
the German mark in a trend that was to continue.
Against the dollar, the Swiss franc edged up
more gradually through mid-May before declining in June, along with other foreign currencies.
The decline was in response to the renewed rise
in U.S. interest rates and the revised outlook for
U.S. economic recovery. Compared with other
continental currencies, however, the franc declined more modestly. By then, short-term interest rates in the Swiss market had advanced
almost to the levels prevailing in Germany,
thereby eliminating the traditional negative
spread between the two markets. The increased
interest rates reflected the wariness of market
participants that the Swiss National Bank might
tighten the supply of banking reserves in response to an apparent overshooting of its monetary target in the first five months of the year.
Such speculation persisted even after central
bank officials pointed out that the year-over-year
682
Federal Reserve Bulletin • September 1983
rise in central bank money so far was a statistical
anomaly that need not be offset later in the year
and, furthermore, that the central bank would
accept an overrun by as much as 1 percentage
point.
The Swiss franc declined relative to the dollar
as the dollar began its steep run-up late in July. It
dropped to a low of SF 2.1530 on the last day of
trading before closing at SF 2.1420, some 53A
percent below the opening six months earlier.
But, against the German mark, the franc continued rising throughout to close 1V2 percent higher
than at the end of January and some 6V2 percent
above its lowest point in mid-March. Trading at
SF 0.8083, the franc was approaching levels that
previously had brought into question the competitiveness of industry in Switzerland relative to
that in Germany. The Swiss authorities did not
intervene in the exchange markets until after the
end of the six-month period under review, although they continued to use foreign currency
swaps to provide liquidity to the banking system.
The country's foreign exchange reserves showed
little change, easing back $400 million on balance
to $11.8 billion at the end of July.
STERLING
Sterling was affected during the period under
review by developments in world petroleum markets and by uncertainties surrounding the United
Kingdom's general election. Prospects of potentially large drops in oil prices were seen as having
considerable bearing on Britain's external and
fiscal positions. The current account surplus,
which had helped sustain comparatively high
nominal and trade-weighted values of sterling
during the previous two years, had already dwindled, and the non-oil components were forecast
to deteriorate sharply in the coming year—only
partly because the immediate outlook for growth
in the United Kingdom was somewhat better
than for its European neighbors. The government had recently provided some fiscal relief,
largely to industry, at a time when the domestic
economy was still struggling to emerge from
three years of recession. A significant reduction
of oil tax and royalty receipts would have raised
the possibility that the government might exceed
its target for public-sector borrowing, thereby
undercutting progress toward the fiscal and monetary discipline that had been a hallmark of its
strategy to curb inflation and to restore private
initiative in the economy.
Meanwhile, expectations had developed that
the government might choose to hold an election
before its mandated date in 1984. It was anticipated that economic policy in general and exchange rate policy in particular would be important campaign issues. The government was
expected to take credit for bringing inflation
down to 4 to 5 percent. But, with the outlook for
world trade pessimistic and the domestic economy not strong enough to bring the unemployment
rate below 12 percent, there was already considerable concern about Britain's competitive position. A major opposition party was calling for a
large devaluation of the pound, as well as for a
sharp acceleration of public spending and substantially lower interest rates. Talk spread that
even the government might accept some modest
easing of the exchange rate.
By late January, the pound had eased against
the dollar to $1.5210, while settling around 81
according to the Bank of England's trade-weighted measure. Sterling had fallen when debate on
the competitive issue first flared up in late 1982.
Selling pressure against the currency had been
countered with sometimes forceful intervention
by the Bank of England and some backing-up of
interest rates that interrupted a pronounced
downtrend over the preceding year. Britain's
foreign exchange reserves had declined for several months, reaching $9.8 billion by the end of
January.
During February and March, sterling again
came on offer, after the failure of OPEC's January meeting to produce agreement on oil prices
and production quotas left open the question
whether the widely anticipated oil price drop
would be limited and proceed in an orderly
fashion. The pound fell irregularly on various
reports of the protracted OPEC negotiations, as
well as of the British National Oil Company's
own price negotiations. Even after a mid-March
agreement by OPEC on prices and production
ceilings, the market remained skeptical that the
details of the agreement would be adhered to.
Adding to the pressures on sterling at times
were the activities of trading professionals and
their customers in anticipation of a realignment
Foreign Exchange Operations
of the EMS. With the pound already vulnerable
to selling pressure and the sterling market unencumbered by exchange controls, the British currency was sold against those viewed as sure to be
adjusted upward within the European currency
arrangement. As a result, large short sterling
positions began to be established against the
German mark by early March in a pattern that
continued until the EMS realignment was announced on March 21.
The Bank of England was seen in the market
as cushioning but not resisting this decline,
which was regarded as reflecting largely external
developments. Moreover, outflows from sterling
were not mirrored as before in a rise in British
interest rates. In fact, by mid-March, money
market interest rates in the United Kingdom had
actually fallen somewhat. The clearing banks
took advantage of a temporary firming of sterling
exchange rates in mid-March to cut their base
lending rates by V2 percentage point, and the
Bank of England immediately followed with similar reductions of its money market intervention
rates.
The sterling market remained generally unsettled through the end of the first quarter in response to the continuing uncertainties about oil
prices, pressures within the EMS, and newspaper speculation that the government was unconcerned about the exchange rate. It fell to its low
for the period of $1.4508 against the dollar on
March 28 and to 77.9 on the Bank of England's
index. At these levels, the pound was some 15
percent below its mid-November value both
against the dollar and in effective terms. Against
the German mark, the pound had declined nearly
44 percent in over two years to a record low of
DM 3.53 on March 24. Meanwhile, Britain's
foreign exchange reserves declined a further $1.1
billion during February and March.
At the end of March, sterling turned around as
signs of adherence to the OPEC arrangements
were accumulating. The British National Oil
Company had announced its own price reductions, which were more modest than some predictions and which did not give rise to competitive action by OPEC producers of closely
comparable qualities of crude oil. Soon there
began to be a reversal of many of the large short
sterling positions that had been established during the previous two months, and some commer
683
cial entities also moved to cover sterling payments that had been delayed.
During April and early May, other factors also
contributed to a further strengthening of sterling.
Britain's economic recovery appeared to become
more assured, with evidence of further rises in
domestic sales and production. Reported inflation fell to its lowest rates in fifteen years. And
the current account stayed in modest surplus
during the first quarter. Under these circumstances, talk that the government might decide to
hold a general election as early as June was
viewed as increasingly favorable for sterling.
Thus, the pound continued to benefit from the
reversing of professional short positions, from
new positioning in favor of the currency, and
from shifts into sterling-denominated securities
by international investors. It proceeded to advance, albeit more slowly after May 9 when the
announcement of June general elections focused
market attention on the immediate uncertainties
of an election campaign. On the last day of May,
sterling reached the highest level of the sixmonth period at $1.6145 against the dollar and
88.0 on a trade-weighted basis, before easing to
around $1.51 and 84.0, respectively, by mid-June.
From mid-June to late July, the sterling market
became more settled with the spot rate about in
the middle of the range over which it had traded
during the preceeding couple of months. The
election results, which assured continuity in the
economic and financial policies of the Thatcher
administration, and a firming of world oil prices,
which suggested that the new price structure
would hold, dispelled the principal uncertainties
that had clouded sterling's prospects early in the
period. The pound's retreat from its late-May
highs reduced concern that it was at levels incompatible with Britain's ability to compete and
to maintain the momentum of its economic recovery.
Meanwhile, the investment flows that had bolstered the pound at times during the spring also
tapered off. Money market interest rates in the
United Kingdom had eased somewhat further,
which, together with the firming of U.S. rates
since mid-May, left sterling assets without an
interest rate advantage over U.S. investments.
The Bank of England had endorsed the decline in
British interest rates by reducing its intervention
rates on two occasions—mid-April and mid-
684
Federal Reserve Bulletin • September 1983
June—for a total of approximately 1 percentage
point, and the clearing banks had followed with
similar reductions of their base lending rates. For
a time, market participants anticipated that rates
might be lowered further. But, after the government reaffirmed its resolve to control inflation
and after new evidence showed monetary aggregate growth to be accelerating, the view became
accepted that no more cuts in rates were in the
offing.
Sterling held relatively steady against the dollar when the dollar rose against all other currencies during July. As the period closed, the pound
was trading at $1.5150, Vi percent lower than its
level at the beginning of February. In tradeweighted terms, it was 5 percent higher than six
months earlier at 85.4 on the Bank of England's
index; against the German mark, sterling had
gained nearly 6V2 percent to trade at DM 4.018.
Britain's foreign exchange reserves rose on balance after March to close the six-month period at
$9.0 billion—down $800 million from levels at the
end of January.
FRENCH
FRANC
Early in 1983, France's relatively high rate of
inflation, wide government deficit, and large
current account deficit weighed heavily on market sentiment toward the French franc. Even
after a temporary freeze on wages and prices, the
year-to-year increase in consumer prices had not
fallen much below 10 percent and inflationary
expectations remained unfavorable. The government was struggling to hold to its target for the
central government deficit of 3 percent of gross
domestic product (GDP). And the current account deficit had more than doubled to $12
billion for the whole of 1982.
The French authorities had adopted several
measures during the preceding months to deal
with these problems. But market participants
were skeptical that much progress would be
achieved, particularly if it should require an
undercutting of earlier efforts to curb unemployment and to stimulate economic growth. In spite
of the need for restraint, the French authorities
introduced several measures during the fall and
winter to spur investment and employment and
acted to lower domestic interest rates as soon as
exchange market conditions permitted. Concern
deepened that the economic performance of
France was diverging in important ways from
that of many other European countries, where
inflation was down sharply and current accounts
were moving back toward surplus.
Under these circumstances, market participants had come to expect that a new EMS
realignment would occur soon after elections in
France and Germany scheduled for early March.
For several months the franc traded close to its
parity against the German mark and generally in
the upper half of the EMS band. The franc was
supported by intervention of the Bank of France
and by sales of foreign currency, which French
enterprises borrowed abroad. Such borrowing
was estimated by Finance Minister Delors to
have been $8.8 billion during 1982. By the end of
January the French franc stood at F F 7.0100
against the dollar and F F 2.83 against the mark.
France's foreign currency reserves were $17.6
billion at the end of January, and the government
had arranged a $4 billion syndicated loan in the
Euromarket.
During much of February the franc edged up
against the dollar and moved along with the mark
toward the top of the EMS. The pressure against
the franc, while offset in the spot market by
intervention by the Bank of France, was nevertheless showing through. Nonresidents speeded
up their sales of French francs, which were
increasingly financed by borrowing in the Eurofranc market and were reflected in a widening of
the discount on the franc in the forward market.
Meanwhile, expectations of a downward adjustment of the franc rate also contributed to a heavy
buildup of imported goods inventories by French
enterprises and a deterioration in France's trade
account.
In early March, pressure against the French
franc intensified. News of a sharply wider trade
deficit for January, together with the results of
the first round of municipal elections in France
and the decisive victory for the new government
in Germany's national elections, prompted further selling of francs. On March 7 the Bank of
France allowed the franc to fall to the floor of the
EMS. At the same time the cost of overnight
Foreign Exchange Operations
financing in the Eurofranc market was bid up to
several thousand percent per annum, causing
some speculators to close out short positions
against the franc. Although the Bank of France
was then able to scale back its intervention in the
spot market, the accumulated support provided
had been substantial, as is partially reflected in
the $3.4 billion decline in French foreign currency reserves for February and March.
After lengthy negotiations over the March 18
weekend, the franc's parity was devalued 2.5
percent as part of an overall realignment of EMS
currencies. The franc was, in effect, devalued 8
percent against the mark, 6 percent against the
guilder, 5 percent against the Danish krone, and
4 percent against the Belgian franc. It remained
unchanged vis-a-vis the Italian lira and was effectively revalued 1 percent against the Irish pound.
The French government announced that, to reduce the trade deficit and to help bring down
inflation, it was prepared to adopt further austerity measures. In addition, it would seek a large,
medium-term loan from the EC.
On March 25 the French government announced the details of a new program that aimed
at reducing domestic demand by F F 65 billion
(about 2 percent of GDP). The program included
a mandatory loan to the government based on
income and wealth taxes paid in 1982, an income
tax surcharge to reduce the deficit of the social
security system, a special gasoline tax to compensate for declining oil prices and other revenue-raising measures, as well as a limitation on
the amount of foreign currency French tourists
may take abroad. In addition, the money supply
growth target for 1983 was lowered from 10
percent to 9 percent. The government projected
that, as a result of the program, economic growth
for the year would be reduced to nearly zero and
inflation cut to 8 percent.
The French franc had been pulled up by other
EMS currencies before the realignment and was
trading on March 18 around F F 6.90 against the
dollar. When the exchange markets opened the
following Monday, the EMS currencies as a
group fell sharply against the dollar, and the
French franc settled around F F 7.25. Nevertheless, the franc emerged firmly at the top of the
newly aligned E M S band, where it was to trade
through late April. The exchange markets were
685
impressed by the scope and decisiveness of the
government's measures, in particular the decision to pass its program by decree rather than
going the more lengthy route of legislation. As a
result, speculative positions were unwound and
commercial leads and lags swung quickly back in
favor of the franc. These reflows were reflected,
in part, in a sharp drop in Eurofranc interest
rates to their lowest rates since the start of the
year. Moreover, with the franc now at its upper
intervention point in the EMS, the Bank of
France bought large amounts of other EMS
currencies, thereby rebuilding official reserves.
At the end of April, French reserves had climbed
$2.5 billion to $16.7 billion.
By May, the reflows back into the French
franc were largely completed while hurdles still
had to be surmounted to meet the government's
economic objectives. Efforts to curb inflation
were being undercut to some extent as the franc
dropped against the dollar, because France received none of the benefit of declining oil prices
on its domestic price structure. Some disappointing trade figures had already made it clear that
the target recently set for the 1983 external
deficit would be difficult to achieve. On the
domestic side, the austerity program was still
being met by political opposition.
Under these circumstances the Bank of France
was careful about letting interest rates ease, and
by summer they were still sufficiently high to
attract deposits from investors abroad. The monetary authorities operated on both sides of the
market, adding on balance small amounts of
foreign currencies to reserves. The government
went ahead with its plan to borrow E C U 4 billion
from the E C ' s balance of payments facility in a
series of transactions undertaken in June and
July. Moreover, the political leadership reaffirmed on a number of occasions the need for
rigorous economic policies this year and next.
Thus, by the end of July, the franc was still
trading in the upper half of the EMS band and at
F F 3.00 against the mark. It continued to decline
along with the mark against the dollar, closing
the period some 14 percent down from the end of
January levels at F F 7.9900. But France's foreign
currency reserves increased further during the
last half of the six-month period to close the
period at $18.5 billion, up $900 million from the
686
Federal Reserve Bulletin • September 1983
end of January levels and $4.2 billion from their
low point of the end of March.
ITALIAN
LIRA
Coming in 1983, the economic situation in Italy
was showing modest improvement; there had
been some progress in bringing down inflation
and containing the growth of imports. But these
results had been achieved at the cost of a sharp
drop in output, and the prospects for further
improvement were still unclear. Inflation differentials vis-a-vis most of Italy's trading partners
had actually widened since the modest scaling
back in Italy's rate of inflation could not match
the more sizable reductions of inflation in most
other industrialized countries. Export volumes
had declined more than could be explained by
contractions in Italy's major export markets.
Efforts to contain rapidly growing fiscal deficits
were being frustrated both by recession at home
and repeated failure to get Parliamentary approval for increased taxes and revenues. The overshooting of the government deficit contributed to
a rapid expansion of total domestic credit, which
had significantly exceeded its target for 1982.
Under these circumstances, the Bank of Italy
concluded that it had no room to ease monetary
policy and was one of the few central banks not
to lower the official discount rate after August
1982. As a result, interest rates in real terms had
actually increased somewhat.
The attraction of relatively high interest rates
kept the lira trading firmly near the top of the
narrow EMS band, a position it was to keep
through February. The Bank of Italy took advantage of this relative strength to rebuild its foreign
currency reserves to a level of $13.7 billion at the
end of January 1983. Against the dollar the lira
was trading at Lit 1,418.00 by the opening of the
six-month period.
Early in March, when a realignment of the
EMS arrangement appeared to be imminent,
market participants came to expect that the
Italian authorities might seek to protect the competitiveness of the country's exports by negotiating a downward adjustment of the lira's central
rate should the French franc be devalued. Between March 3 and March 10 the lira came on
offer as commercial leads and lags turned quickly
against the currency. The spot rate dropped from
the top of the 2VA percent band to a position well
below the narrow band, using the greater leeway
available to the lira. The Bank of Italy supported
the currency with sales of dollars and, to a lesser
extent, of EMS currencies. These operations are
partly reflected in a decline of $700 million in the
country's foreign exchange reserves for March.
Meanwhile, the lira had also declined somewhat
against the dollar to Lit 1,424.00.
On March 21, as part of the overall realignment, the lira's central rate within the EMS was
adjusted downward 2xh percent, leaving the parity unchanged relative to the French franc and
with adjustments similar to those for the franc
against the other EMS currencies. In the exchange market, the lira moved to trade well
above the new narrow band maintained for the
other currencies. Following the realignment,
there were sizable flows back into lire as leads
and lags were unwound, seasonal inflows began
to show through, and Italy's relatively high interest rates became attractive again once a devaluation was not a near-term prospect. The Bank of
Italy took advantage of the lira's comfortable
position within the joint float to recoup more
than earlier losses of foreign currency reserves,
contributing to a rise of nearly $2 billion in
foreign exchange reserves for the month of April.
Soon after the realignment, market interest
rates in Italy began to ease. Although output had
stabilized, it remained at a low level. There was
little expectation of an early economic recovery,
and unions and employers pushed aggressively
for lower interest rates. Commercial banks cut
their prime rates twice during the spring a total of
11/4 percentage points to 183A percent, and there
were similar reductions of Treasury bill auction
rates. But the news on price performance was
still disappointing. The consumer price index
was rising at an annual rate of about 16 percent
during the first quarter, well above the government's goal of 13 percent or less. The Bank of
Italy did not join other EMS central banks in
reducing official rates during March. But on
April 8 it lowered the discount rate 1 percentage
point to 17 percent.
Even so, interest differentials remained strongly in favor of the lira. Moreover, Italy's current
account deficit was strengthening further. Italy's
trade deficit narrowed considerably during the
Foreign Exchange
first half of 1983, compared with the same period
of 1982. Increasing tourist receipts and declining
service costs on Italy's external debt were expected to generate further gains for the Italian
current account balance during 1983. These developments helped to buoy the lira even as
prospects for action to bring Italy's public-sector
deficit under control faded. The government
collapsed in early May before all the measures to
contain the deficit could be passed by Parliament, and it was unclear whether a new coalition
government would take strong measures either
to cut spending or to raise taxes in the current
depressed economic environment.
The lira continued to trade above the E M S
narrow band through July while moving down
with other European currencies against the dollar. The easing of pressures on the external
account permitted the Italian authorities to build
up their foreign currency reserves and to increase the amount of foreign exchange Italian
tourists may export. By the end of July the lira
was trading at Lit 1,573.00 against the dollar,
down almost 11 percent over the six-month period under review and down V/i percent against
the German mark. Meanwhile, Italy's foreign
exchange reserves stood at $18.6 billion, up $4.8
billion over the period.
EUROPEAN
MONETARY
SYSTEM
The currencies of the E M S were trading steadily
against each other at the beginning of February,
but in a configuration that reflected widespread
market expectations that continued divergence
in economic performance among the member
countries made another realignment inevitable.
These expectations were based on observations
that, in most cases, differentials in inflation and
current account performance had increased
slightly since the realignment of June 1982. Inflation had decelerated more sharply in Germany
and the Netherlands than in other EMS countries. German and Dutch current accounts had
moved strongly into surplus, while other countries, even those whose current accounts had
improved, remained in sizable deficit.
To be sure, the authorities in several participating countries had implemented policies during
1982 to reduce inflation and to improve current
Operations
687
accounts, but the effects were only beginning to
show through. The Belgian government, using
emergency powers, had imposed a broad austerity program to slash government spending, wage
costs, and the trade deficit. In Denmark a new
government had abolished wage indexation and
reversed a stimulative fiscal policy, while the
central bank had kept interest rates relatively
high. In Ireland, the authorities had in place
restrictive fiscal and monetary policies and the
exchange rate had appreciated against sterling,
the currency of Ireland's major trading partner.
In France, however, and to a lesser extent in
Italy progress toward achieving better balance in
the economy was not yet sufficient to relieve
concern in the markets about the currencies'
near-term outlook.
In all E M S countries, unemployment was high
and generally still rising, reaching levels of over
16 percent in some countries. To varying degrees
in all countries the authorities were embarked on
medium-term efforts to reduce large and persistent structural fiscal deficits. But recession was
adding to the difficulties of achieving planned
budgetary savings. Pressure therefore was on
monetary policy to provide support to the domestic economies, and the question remained
among market participants whether the general
move toward restraint could be sustained long
enough to produce more uniform economic performance.
Under these circumstances, the Dutch guilder
stayed virtually at the top of the 2Va percent
narrow band early in February, with the German
mark and the Danish krone close behind. The
French franc was held close to its bilateral central rate relative to the mark, while the Irish
pound fluctuated below the middle, and the
Belgian franc remained at or near its lower
intervention point. Except for the French franc,
there was only modest intervention in support of
the currencies within the narrow E M S band. The
Italian lira, buoyed by relatively high interest
rates in Italy, was fluctuating within the wider
limits available to that currency to trade slightly
above the 2XA percent intervention limits of the
others.
During February, however, the currency relationships came under increasing pressure as
speculation grew that a realignment might occur
soon after early-March elections in France and
688
Federal Reserve Bulletin • September 1983
Germany. The mark and guilder became pinned
to their upper intervention points. The French
franc moved along with the mark until March 7,
when the French franc was permitted to drop to
its lower intervention point. By this time, other
currencies, too, had come under pressure. The
Danish and Irish currencies fell to the bottom of
the EMS, and the Italian lira traversed the whole
width of the narrow band to trade about 2
percent below it. To defend the Belgian franc,
the Belgian National Bank raised official interest
rates 2Vi percentage points, effective March 9,
and then on March 14 the authorities significantly tightened exchange controls, particularly affecting commercial leads and lags. Meanwhile, a
sudden and sharp increase in short-term EuroFrench franc interest rates effectively curtailed
speculation by nonresidents selling the French
franc short.
In response to these developments, the focus
of speculative activity shifted toward those currencies expected to be revalued. Bidding for
marks and guilders quickly intensified against
both dollars and other non-EMS currencies, with
the result that the upward pressure on the stronger currencies lent support to the EMS as a group
against the dollar. The central banks in Germany
and the Netherlands took advantage of the
strength of their currencies, as well as the improvement in their current accounts and in their
price performance, to lower interest rates and
thereby to lend support to their domestic economies. By March 18, the Netherlands Bank
dropped its official lending rates in two stages for
a total of 1 percentage point, and the Bundesbank lowered its official interest rates that day by
1 percentage point as well. As a result of these
and earlier declines in interest rates, short-term
market rates had eased in the two countries to
their lowest levels since early 1979. Dutch interest rates had declined even more rapidly than
German rates over the preceding year and were
as much as 1 percentage point below those for
comparable maturities in Germany.
Meanwhile, the EMS central banks intervened
heavily, both in EMS currencies and in dollars.
In fact, total EMS intervention in the six weeks
through March 18 considerably exceeded that for
any comparable period since the inception of the
currency arrangement. Countries whose currencies were under the heaviest pressure suffered
sizable reserve losses and established large debtor positions in the European Fund for Monetary
Cooperation (FECOM), while Germany had the
opposite experience.
On March 21 the seventh realignment became
effective. Four currencies were revalued—the
mark by 5.5 percent, the guilder by 3.5 percent,
the Danish krone by 2.5 percent, and the Belgian
franc by 1.5 percent—and three were devalued—
the French franc and the lira by 2.5 percent and
the Irish pound by 3.5 percent. In effect, these
changes left the trade-weighted values of the
Danish krone and the Belgian franc about unchanged and offset an earlier appreciation of the
Irish pound against sterling, leaving that currency at about its 1982 level overall. Pursuant to the
realignment, the French government indicated it
would adopt austerity measures to restore external equilibrium.
Immediately after the realignment, speculative
positions were reversed and commercial leads
and lags were unwound. These reflows out of
marks and guilders helped drag the entire EMS
down vis-a-vis non-EMS currencies, with the
result that several of the devalued currencies hit
new lows against the dollar. Within the EMS,
however, the reflows pushed the French, Irish,
and Danish currencies all close to the top and the
Italian lira moved well above the narrow band.
With the mark and guilder now at the lower limit
of the new band, most participating central banks
had an opportunity to reconstitute reserves and
reduce FECOM debt, most of which was repaid
by the end of April.
As the reflows proceeded, policy adjustments
were possible in a number of countries, which
could then catch up with the generalized decline
in interest rates. The authorities in Italy, Belgium, Denmark, and Ireland permitted an easing
in domestic interest rates, confirmed in most
cases by cuts in official lending rates. Among the
largest declines were those in Belgium, where
the central bank lowered its lending rates 5
percentage points in four steps, and in Denmark,
where the central bank lowered its discount rate
twice for a total of 2x/i percentage points. In
addition, foreign exchange controls were relaxed
in Belgium and Denmark. The Belgian authorities removed one of the restrictions imposed
before the realignment requiring Belgian enterprises to convert promptly foreign currency re-
Foreign Exchange
ceipts from current account transactions. The
Danish authorities eased some long-standing exchange restrictions on capital transactions. By
contrast, the German and Dutch authorities
stemmed the earlier downtrend in their interest
rates. In fact, market rates in the Netherlands
backed up sharply to levels above those in Germany. Then, effective May 3, the Netherlands
Bank validated part of the increase by raising its
discount rate 1 percentage point back to the level
that had prevailed at the start of the six-month
period.
Following these actions, the Belgian franc and
Danish krone eased in the E M S toward the
bottom and the middle respectively, while the
guilder edged up toward the middle. But the
other currencies were little changed during the
four and a half months after the March realignment, with the German mark staying close to its
lower intervention point against the French franc
or Irish pound at the top. The adjustments in
currency relationships that did occur took place
without strain through the end of July, the continued improvement in trade accounts and inflation figures lending credibility to the 1982 austerity programs in both Belgium and Denmark.
Against the dollar, however, the E M S currencies
as a group moved lower, closing the six-month
period under review down 7 to 14 percent on
balance. For the E M S countries as a whole,
foreign currency reserves changed little on balance over the period. Within the group, however, reserves of Italy, France, and, to a lesser
degree, Belgium rose while those of Germany
and the Netherlands declined.
CANADIAN
DOLLAR
Early in 1983, the Canadian economy was just
beginning to emerge from recession. For Canada
the drop in output had been deeper than for most
other industrialized countries and the unemployment rate was still near its peak of 12.8 percent.
In addition, the downturn in inflation had come
later than for most countries, with the annual
rate of increase for the consumer price index
edging just below double-digit levels by the turn
of the year.
Although the severity of the adjustments taking place in Canada had given rise to an active
Operations
689
debate over the appropriate priorities for economic policy, the Canadian authorities remained
committed to the need to promote cost and price
stability. A public-sector wage and price restraint program had been implemented. Fiscal
policy remained cautious. Initiatives by the government during the winter to boost employment
and to stimulate investment had been matched
largely by cuts in planned expenditures elsewhere, although the financing requirements of
both the federal and provincial governments had
increased mainly for cyclical reasons. In addition, monetary policy continued to be aimed at
exerting continuous downward pressure on inflation to provide a basis for sustained economic
growth. In the conduct of this policy, the Bank of
Canada had announced in November 1982 that it
was withdrawing the target range for the expansion of the specific monetary aggregate, M l ,
since the aggregate's relationship to interest
rates and total spending was no longer sufficiently reliable. In the meantime, the monetary authorities indicated they would look at other financial and economic variables, including the
value of the Canadian dollar.
Against this background, the Canadian dollar
held comparatively steady against the U.S. dollar during the six-month period under review,
fluctuating generally within a 2 percent band
around Can.$1.2300, a level to which it had
recovered during the fall of 1982. In effect, it also
rose on balance against most other currencies.
From the beginning of the six-month period,
the Canadian dollar drew support from a marked
improvement in C a n a d a ' s current account position that had become evident in 1982. A sharp
drop of imports, reflecting the slowdown in Canada's domestic economy, together with a modest
expansion in exports, had combined during 1982
to swing the current account into significant
surplus for the first time in more than a decade.
Trade figures early in the year suggested that
Canada's net export position was strong enough
to hold on to an overall current account surplus
for the first quarter of 1983. At the same time
there were a number of conversions by Canadian
residents of funds borrowed in markets abroad
where interest rates were lower than in Canada.
As a result, the Canadian dollar rose on balance through early March and fluctuated to a
high of Can.$1.2210. The Canadian authorities,
690
Federal Reserve Bulletin • September 1983
after having taken advantage of opportunities
before the period to rebuild their foreign currency reserves to U.S.$2.9 billion, continued on
balance to add to reserves. In addition, shortterm interest rates eased during February and
then held generally steady during most of March
even as rates for comparable maturities in U.S.
dollars temporarily firmed. As a result, Canada's
traditionally favorable interest rate gap narrowed
through most of March and, at the three-month
maturity, actually turned negative for several
days around the end of the quarter.
Early in April, sentiment toward the Canadian
dollar briefly became more cautious. With the
erosion of Canada's normal interest rate differential and the domestic economy still operating far
below capacity, market participants came to
question whether the Canadian authorities would
allow interest rates to back up if U.S. rates were
to continue to rise. In addition, there was uncertainty about the stance of fiscal policy to emerge
from the budget, which was to be announced
after midmonth, in view of the continuing pressures for stimulus and talk within the government of the need to create jobs.
In the event, the Bank of Canada restrained
the liquidity positions of Canadian banks, and
short-term interest rates moved up slightly from
late-March levels. In the meantime, U.S. interest
rates resumed a downward course so that interest rate differentials came back in favor of the
Canadian dollar. In addition, the government's
announcement of its budget for the 1983-84 fiscal
year was well received by the business community and the exchange markets generally. It did
include a Can.$4.8 billion medium-term recovery
program to spur investments and to promote
jobs, largely over the next two years. But the
market was impressed by provisions that would
offset most of the cost of the program, albeit with
a delay, including a temporary increase in the
federal sales tax in subsequent years when the
economy is expected to be more robust. Following this announcement, the Canadian dollar
moved off its mid-April low near Can.$1.2400.
By late in the second quarter, the economic
situation in Canada was clearly improving. Inflation was dropping steadily with the year-on-year
rate of the increase in the consumer price index
down to 5.4 percent by May and major wage
settlements providing for the smallest increases
in four years. The balance of payments remained
in surplus, bolstered by strong demand for Canada's export of agricultural products and automotive parts. These favorable developments occurred at the same time that the domestic
economy was rebounding strongly, spurred by
consumption and housing. By late June, forecasters were revising upward their growth projection for the current year. In this climate, talk
circulated in the exchange markets that foreign
investment inflows into Canada had picked up.
Under these circumstances, Canadian interest
rates did not match the prolonged advance of
U.S. interest rates after mid-May. Indeed, shortterm interest differentials turned negative for the
Canadian currency again by early June and widened progressively through the end of July. Nevertheless, the Canadian dollar held up better than
other currencies against the dollar, as the U.S.
currency strengthened across the board during
June and July. The Canadian dollar was sufficiently strong that the spot rate eased only
modestly from its early-May levels to close the
six-month period under review at Can.$1.2330,
up slightly from the beginning of the period.
During this period, the Bank of Canada added to
foreign currency reserves, which rose U.S.$300
million over the six-month period to the relatively high level of U.S.$3.2 billion.
MEXICAN
PESO
By February, Mexico's external financial crisis,
which developed in 1982, was at a major turning
point. On the one hand, a number of actions had
been taken to arrest further deterioration in
Mexico's financial position. The newly elected
government of President de la Madrid had begun
to implement a stringent austerity program designed to redress the external imbalance, to
curtail inflation, and to reduce sharply the huge
government deficit. In December, the IMF had
approved an extended fund facility for Mexico.
Negotiations were proceeding, although incomplete, with foreign banks on a $5 billion jumbo
loan to help ease immediate liquidity strains and
to cover the expected 1983 current account deficit. The rate of domestic economic activity had
slowed, and the large current account deficit had
begun to decline.
Foreign Exchange Operations
On the other hand, major problems and uncertainties remained. Inflation continued at around
100 percent per annum, clouding prospects for a
deceleration of wages sufficient to break the
wage-price spiral. Large spending cuts, needed
to bring the public-sector deficit down from 17
percent of G N P in 1982, had only just begun to
materialize. Although public-sector interest payments were current, a program had not yet been
agreed upon for restructuring these debts. Meanwhile, no proposals had been made to deal with
accumulated arrears that had developed in private-sector external debt service and import payments.
Reflecting the progress already achieved, the
Mexican peso was trading steadily in early February in the offshore interbank market at
Mex.$148.50, close to the onshore " f r e e mark e t " rate established late in 1982 as part of a
move to relax exchange controls. But soon thereafter uncertainty deepened, and the peso, while
remaining at Mex.$147.90 in the onshore " f r e e
market," declined to about Mex.$171 in offshore
interbank trading. The drop in world spot oil
prices threatened to force OPEC to reduce their
oil price, a move that would lead Mexico to
follow suit, weakening the outlook for Mexico's
oil export earnings. About the same time, progress stalled on the $5 billion bank financing.
During February, the Bank of Mexico drew
down the final amounts available on the $1.85
billion joint BIS-U.S. swap facility. In this connection, Mexico received $44.3 million from the
Treasury and $25.8 million from the Federal
Reserve. In addition, the Federal Reserve renewed until the end of February the outstanding
balance of $373 million on the regular Federal
Reserve-Bank of Mexico swap facility, originally drawn in August 1982. The swap was then
repaid on February 28.
Beginning in late February, several important
issues began moving toward resolution. The $5
billion jumbo loan agreement became a certainty
on February 27, and $433.7 million in bridge
financing was arranged for disbursement ahead
of the signing of the jumbo loan in early March
and the initial drawing under the jumbo agreement. The Mexican authorities announced the
first of five schemes to deal with short-term,
private-sector foreign credits, the foreign currency to be delivered later when available. This
691
marked the first concrete step by the authorities
on principal amounts of private-sector debt.
Shortly thereafter, OPEC reached agreement on
a new pricing and production structure, and
prices of Mexican oil exports were lowered by
$2.75 per barrel in line with the OPEC agreement. P E M E X oil shipments and earnings rebounded quickly, which, together with funds
becoming available from the jumbo credit, eased
the immediate strain on Mexican liquidity. In
early May, the I M F informed the commercial
bank group advising Mexico on its external debts
that the country had come within the I M F ' s firstquarter limit on the current account deficit, despite the shortfall in oil revenues. In fact, Mexico
had a current account surplus in the first quarter,
due mainly to severely depressed imports. In this
environment, the peso strengthened in the offshore interbank market from late March into
early May.
For the remainder of the period under review,
the peso traded firmly in the offshore interbank
market close to the rate in the Mexican " f r e e
market." The latter remained unchanged at
Mex.$147.90 from January 24 through June 21
and was adjusted higher twice to Mex.$147.60 at
the end of the period. The "controlled r a t e , "
established along with the " f r e e r a t e " for foreign
debt, trade, and other eligible transactions, was
depreciated steadily over the period as planned
to take account of inflation differentials vis-a-vis
Mexico's major trading partners. It stood at
Mex.$123.83 at the end of July.
The steadiness of the peso reflected growing
market perception that the government's adjustment program was on track and that Mexico's
liquidity position was improving. Early in May,
for the first time in more than year, there were
market reports that private capital transferred
out of Mexico earlier was beginning to move
back. Later in May, the I M F released the second
extended fund facility tranche of $325 million,
which was used to make an initial payment on
the joint BIS-U.S. swap facility. And, on June
22, official creditors signed a multilateral agreement to reschedule interest arrears and mediumand long-term principal payments falling due
through the end of 1983.
More important was evidence of gains in areas
thought to be most intractable. The current account improvement exceeded forecasts, and pro-
692
Federal Reserve Bulletin • September 1983
jections made in late June suggested the possibility of a modest current account surplus for 1983
as a whole. The government deficit had been
reduced even more sharply than planned. In late
July, the Bank of Mexico said it would soon
begin disbursement under the private-sector
short-term debt schemes set up in the spring and
would announce later in the summer a scheme to
deal with medium- and longer-term private credits. Significant progress was also made in the
area of wages and inflation. Agreements in the
spring wage negotiations limited increases to 15
percent, far below the 50 percent requested by
union leaders to restore lost purchasing power.
Reflecting the moderation in wages and increasing slack in the Mexican economy, the rate of
increase of consumer prices dropped from about
10 percent per month at the turn of the year to
less than 4 percent in June. Thus, in major areas
the Mexican adjustment program appeared to be
well ahead of the schedule set eight months
earlier. After the close of the period, on August
23, the Bank of Mexico repaid all remaining
amounts due at maturity on the joint BIS-U.S.
swap facility.
•
INTERNATIONAL AGREEMENTS ON
EXCHANGE MARKET INTERVENTION
growth. This will be the primary objective of a
strengthened multilateral surveillance as agreed
in Versailles.
Excerpt from Annex to the
Declaration
(May 30, 1983)
POLICY
Williamsburg
3. Exchange Rate Policy. We will improve consultations, policy convergence and international
cooperation to help stabilize exchange markets,
bearing in mind our conclusions on the Exchange
Market Intervention Study.
Excerpt from "Statement
on the
Intervention
Study" (April 29, 1983)
We have reached agreement on the following:
A. The achievement of greater exchange rate
stability, which does not imply rigidity, is a
major objective and commitment of our countries.
B. The path to greater exchange rate stability
must lie in the direction of compatible mixes of
policies supporting sustainable noninflationary
C. In the formulation of our domestic economic
and financial policies, our countries should have
regard to the behavior of our exchange rates, as
one possible indication of need for policy adjustment. Close attention should also be given to the
interactions and wider international implications
of policies in each of our countries.
D. Under present circumstances, the role of
intervention can only be limited. Intervention
can be useful to counter disorderly market conditions and to reduce short-term volatility. Intervention may also on occasion express an attitude
toward exchange markets. Intervention will normally be useful only when complementing and
supporting other policies. We are agreed on the
need for closer consultations on policies and
market conditions; and, while retaining our freedom to operate independently, are willing to
undertake coordinated intervention in instances
where it is agreed that such intervention would
be helpful.
693
Industrial Production
Released for publication
September
put of home goods and construction supplies;
however, output of both autos and steel rose
moderately after their large July advances. At
150.5 percent of the 1967 average, industrial
output in August has increased 11.6 percent
since November 1982, thus recovering about
four-fifths of the decline that occurred since the
high of 153.9 percent in July 1981.
In market groupings, output of consumer
15
Industrial production increased an estimated 0.9
percent in August following upward revised increases in July and June of 2.0 and 1.3 percent
respectively; the increases had previously been
estimated at 1.8 and 1.1 percent. The August
gains in output were widespread among products
and materials. Sharp gains continued in the out1967 = 100
1967 = 100
170
TOTAL I N D E X
170
Materials output
150
150
Products output
130
J
190
FINAL PRODUCTS
130
L
~ MATERIALS
-
Nondurable
170
170
//
150
Consumer goods
130
/
^
\
^
j
v
\
VN
150
/Durable^
A W
~
v/
Energy
110
1
90
l
I
1
1
i
90
190
190
CONSUMER GOODS
170
/yy s .
INTERMEDIATE PRODUCTS
170
Nondurable
Business supplies
150
TF^N ^ •
^
Durable \ /
v
*
'
\
/
130
v/
1977
110
Annual rate, millions of units
18
1979
1981
1983
1977
1979
1981
1983
All series are seasonally adjusted and are plotted on a ratio scale. Auto sales and stocks include imports. Latest figures: August.
150
130
Construction supplies
110
1969-70=100
180
140
130
ZJ
110
Defense and space
190
X
\
v
Business equipment
I
694 Federal Reserve Bulletin • September 1983
1967 = 100
Percentage change from preceding month
1983
1983
Grouping
July
Aug/
Apr.
May
June
July
Aug.
Percentage
change,
Aug. 1982
to Aug.
1983
Major market groupings
Total industrial production
149.2
150.5
1.9
1.3
1.3
2.0
.9
8.7
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment
Defense and space
Intermediate products
Construction supplies
Materials
150.8
148.9
155.0
153.7
155.5
152.6
120.5
157.5
145.0
146.7
151.9
149.8
155.9
155.8
155.9
152.8
122.1
159.5
147.4
148.3
2.0
2.1
2.4
3.1
2.0
2.2
1.0
2.0
2.5
1.5
1.2
1.2
1.8
3.6
1.2
.5
-.5
.9
1.5
1.4
1.3
1.3
1.3
2.5
.8
2.0
.3
1.4
2.5
1.3
1.8
1.7
1.8
3.1
1.3
1.3
2.1
2.1
2.2
2.2
.7
.6
.6
1.4
.3
.1
1.3
1.3
1.7
1.1
7.0
6.1
8.2
17.2
4.9
-.7
11.5
10.2
16.0
11.7
2.0
2.6
1.4
2.0
1.7
.7
.7
.6
1.4
1.9
9.7
10.2
9.1
.1
4.0
Major industry groupings
150.3
136.7
170.0
115.4
172.0
Manufacturing
Durable
Nondurable
Mining
Utilities
p Preliminary.
e Estimated.
151.4
137.7
171.1
117.0
175.3
1.4
1.5
1.3
1.1
.2
1.6
1.8
1.4
.3
-.4
NOTE. Indexes are seasonally adjusted.
goods increased 0.6 percent following a very
sharp July increase. Autos were assembled at a
seasonally adjusted annual rate of 7.5 million
units—up from a rate of 7.4 million in July, and
industry schedules call for further increases in
September. Production of home goods continued
to increase rapidly, led by a further increase in
household appliance output. Nondurable consumer goods rose 0.3 percent. Production of
business equipment changed little in August as
industrial equipment rose rapidly, while commercial equipment declined because of a strike in
the telephone apparatus industry. Production of
defense and space equipment rose 1.3 percent,
and output of construction supplies increased an
estimated 1.7 percent.
1.9
2.2
1.6
-.9
2.1
Materials output advanced 1.1 percent—about
half the rate of increase in July. The durable,
nondurable, and energy groups all increased, but
industries such as coal, steel, and parts for
consumer durables evidenced smaller increases
than occurred in the previous month.
In industry groupings, manufacturing production increased 0.7 percent in August, with similar
increases in durable and nondurable manufacturing. Mining output rose 1.4 percent. Utility
output surged 1.9 percent, mostly because the
hot weather increased use of electricity sharply
for the second month in a row.
695
Announcements
AUTOMATED CLEARINGHOUSE
SERVICE.NIGHTTIME DEPOSIT
DEADLINE
The Federal Reserve announced on September
1, 1983, a modification of its automated clearinghouse service to permit all types of automated
clearinghouse (ACH) transactions to be deposited at the nighttime deposit deadline.
In conjunction with this action, the Board
approved an interim fee schedule for nighttime
A C H deposits, effective October 6, 1983.
Since 1979, the use of the nighttime deposit
deadline has been restricted to cash concentration debits. Cash concentration debits are used
by businesses to draw down balances held at a
number of depository institutions in order to
accumulate funds for investments or other purposes at a primary institution.
The addition of a later deposit deadline for
other types of transactions will provide originators of A C H payments with additional processing time as well as better funds availability for
these deposits.
The interim fee schedule for the A C H nighttime deposit deadline is as follows:
Per-item surcharge to originators
Cents
Debits
Next-day settlement credits
Two-day settlement credits
5
2
0
stroyed. Thus the new sensor will enable the
Federal Reserve Banks to provide depository
institutions with a more consistent quality of
currency. This is of particular importance for the
operation of automatic teller machines and will
benefit both consumers and depository institutions.
Installation of the new fitness sensor is to
begin in early September 1983 and will be completed by February 1984. The purchase and
installation of the new fitness sensor culminates
a two-year, approximately $1 million research
and development effort by the Federal Reserve
System to develop an improved currency quality
sensor.
To improve both the efficiency of the examination of used currency and quality control, the
Reserve Banks have in recent years installed 111
high-speed, automated currency processing systems at 35 locations throughout the country. The
production capacity of the Bureau of Engraving
and Printing has also been increased to support a
higher level of replacement of worn-out notes.
Since some nine billion notes are currently in
circulation, it is expected that one to two years
will be required for the Federal Reserve System
to achieve fully the high standard of quality of
notes in circulation that is the System's objective.
REGULATION
NEW SENSOR FOR CURRENCY
The Federal Reserve System has announced the
purchase of a new and improved type of currency quality sensor for installation in its automated
high-speed systems for examination of used currency and destruction of currency unfit for further circulation. The new sensor better discriminates between soiled notes and notes acceptable
for recirculation and will cause notes that contain
certain defects and transparent tape to be de
L:
AMENDMENTS
QUALITY
The Federal Reserve Board announced on August 31, 1983, adoption of amendments to its
Regulation L (Management Official Interlocks),
which implements the Depository Institutions
Management Interlocks Act, to reflect changes
in the act adopted by the Congress.
The Board acted after consideration of comment on proposals published late in 1982. The
other federal financial institutions regulators are
preparing similar changes in their regulations.
696
Federal Reserve Bulletin • September 1983
The Interlocks Act prohibits certain interlocking relationships among officials of financial institutions, including depository holding companies
and their affiliates.
The amendments adopted by the Board, substantially as proposed for comment, revise Regulation L to accomplish the following:
1. Simplify procedures for obtaining exceptions to the act and extensions of time to permit
compliance with the act, by requiring only one
agency's approval;
2. Ease the burden of compliance by redefining
terms to avoid covering holding companies located in the same geographic area when neither
company has an affiliated depository institution
in the area;
3. Broaden the exclusion from the prohibitions
of the act for management officials whose functions relate exclusively to retail merchandising
and manufacturing;
4. Broaden the circumstances under which the
exception to the prohibitions of the act is available on grounds of disruptive management loss;
5. Clarify the circumstances that require termination—due to changes in circumstances—of
management official interlocks that are not
grandfathered, and provide that the grace period
of 15 months for compliance following such
changes apply whether the change in circumstances is voluntary or involuntary.
The five federal financial institutions regulators (Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Home
Loan Bank Board, Federal Reserve Board, and
the National Credit Union Administration) are
preparing a joint Federal Register notice of revisions in their regulations implementing the Depository Institutions Management Interlocks
Act, to be published shortly.
REGULATION
Y:
AMENDMENTS
The Federal Reserve Board has amended its
Regulation Y (Bank Holding Companies and
Change in Bank Control) to add securities brokerage and related margin lending to the list of
activities generally permissible for bank holding
companies. Individual applications will be considered on their own merits.
The action codifies a previous position taken
by the Board in approving the acquisition by
BankAmerica Corporation of Charles Schwab
Corporation, a retail discount securities broker.
The Board acted after consideration of comment received on a proposal made in February to
add these activities to the list of nonbanking
activities in Regulation Y.
In its final ruling, as in its approval of the
BankAmerica-Schwab application, the Board
specified that the brokerage activities are to be
restricted to buying and selling securities solely
as agent for the account of customers (and does
not include securities underwriting or the provision of investment advice), and that margin lending on securities is to be conducted by a nonbank
subsidiary of the bank holding company, according to the Board's Regulation T (Credit by Brokers and Dealers).
ASSETS OF OVERSEAS
OF MEMBER BANKS
BRANCHES
The Federal Reserve Board reported on August
22, 1983, that the combined assets of the overseas branches of member banks decreased during 1982 by $2.5 billion—or 0.6 percent—to a
total of $388.5 billion. Combined assets, excluding claims on other foreign branches of the same
bank, also dropped by 0.6 percent from the
comparable level of the previous year-end to
$341.3 billion at December 31, 1982. Both measures reflect an abrupt change in the earlier
pattern of growth in the assets of foreign
branches, which increased at an annual rate
exceeding 20 percent during the 1970s and about
10 percent annually in 1980 and 1981.
The recent decline reflects the following principal factors: (1) a general decline in international
trade and finance during 1982; (2) the higher
exchange rate value of the U.S. dollar, which
lowered the dollar value of foreign branch assets
denominated in foreign currencies; and (3) the
emergence of domestic international banking facilities (IBFs), which were authorized by the
Board beginning in December 1981. Data are not
available to identify the precise impact of IBFs
on foreign branch assets. However, IBFs serve
as a substitute for foreign branches for many
purposes.
At year-end 1982, 162 member banks operated
Announcements
697
Assets and liabilities of overseas branches of member banks, year-end 1982
Millions of dollars
United Kingdom Continental
and Ireland
Europe
Item
Assets
Cash and balances with banks
Loans, net
Due from other non-U.S.
branches of own bank
Due from head office and
U.S. branches
Due from consolidated subsidiaries
Other assets
Total
Liabilities
Deposits of other banks
Other deposits
Due to other non-U.S.
branches of own bank
Due to head office and U.S.
branches
Due to consolidated subsidiaries
Other liabilities
Total1
Bahamas and
Cayman
Islands
Latin
America
Far East
Near East
and Africa
U.S. overseas
areas and
Trust Territories
Totals 1
37,681
44,796
11,241
19,970
41,102
37,912
2,205
12,711
10,517
36,627
2,289
4,849
1,493
5,456
106,531
162,322
30,970
3,540
7,778
204
2,773
390
1,500
47,155
12,912
231
16,800
222
89
157
167
30,580
7,149
8,318
939
4,442
1,267
3,395
944
2,450
1,698
9,292
78
396
494
1,034
12,567
29,327
141,827
40,365
108,256
18,734
60,995
8,159
10,147
388,484
54,366
66,347
17,560
8,151
25,912
43,480
4,876
4,362
10,049
17,079
3,047
2,973
1,235
6,419
117,045
148,811
6,837
5,388
7,450
3,299
17,070
1,402
1,653
43,099
7,137
3,015
27,496
2,543
5,816
184
79
46,270
248
6,892
2,864
3,387
2,040
1,978
1,292
2,363
1,181
9,800
97
457
254
507
7,976
25,284
141,827
40,365
108,256
18,734
60,995
8,159
10,147
388,484
64
119
168
240
207
49
53
900
Number of branches
1. Amounts may not add to totals because of rounding.
SOURCE. Board of Governors of the Federal Reserve System.
900 branches in foreign countries and overseas
territories—a net increase of 59 branches during
the year. The accompanying table shows the
distribution of these branches by geographic
area.
These data are derived from reports of condition filed at the end of the year with the Comptroller of the Currency and the Federal Reserve
System. The reports reflect all assets and liabilities of overseas branches whether denominated
in U.S. dollars or in other currencies and differ in
some respects from other foreign branch data
published by the System. Nondollar amounts
have been translated into dollars at the year-end
exchange rates.
REVISIONS
TO REGULATION
O
The Federal Reserve Board has adopted in final
form revisions of its Regulation O (Loans to
Executive Officers, Directors, and Principal
Shareholders of Member Banks) to implement
recent legislative changes. The amendments are
effective October 11, 1983.
The Board acted after consideration of comment received on proposals published in May.
The other federal bank regulatory agencies are
considering similar revisions of their rules.
The Garn-St Germain Depository Institutions
Act of 1982 amended section 22 of the Federal
Reserve Act, dealing with member bank credit to
bank insiders, including executive officers, directors, principal shareholders, and their related
interests.
Previously, the Federal Reserve Act and the
Board's Regulation O limited loans by a state
member bank to executive officers to specific
dollar amounts for a home mortgage, education
of an executive officer's children, and for all
other purposes. The new legislation—which was
supported by the Federal Reserve—eliminated
these specific dollar limitations, and the Board in
October 1982 conformed Regulation O to the
new legislation with respect to home mortgage
and education loans.
To further implement the provisions of the
new legislation, the Board amended Regulation
O as follows:
• With respect to loans for purposes other than
home mortgages or education, a member bank
may lend to an executive officer up to $25,000 or
2.5 percent of its capital and unimpaired surplus,
698
Federal Reserve Bulletin • September 1983
whichever is greater, with an overall limit of
$100,000.
• Prior approval is required of a state member
bank's board of directors for a loan to an insider
(including related interests of the insider) that,
taken together with other such loans, exceeds
$25,000, or 5 percent of the bank's capital and
surplus.
• Lending to an insider may not exceed, in the
aggregate, the limit of credit that may be extended to any one borrower (15 percent of the bank's
capital and surplus for loans not fully collateralized and an additional 10 percent of the bank's
capital and surplus for loans that are fully collateralized).
• Prior approval of the bank's directors is required for all loans exceeding $500,000 in the
aggregate.
CHANGES IN BOARD
STAFF
The Board of Governors has announced the
following changes in its official staff.
Edward C. Ettin has been transferred from the
position of Deputy Staff Director in the Office of
Staff Director for Monetary and Financial Policy
to become Deputy Director in the Division of
Research and Statistics, effective September 12,
1983.
Donald L. Kohn has been promoted from
Associate Director in the Division of Research
and Statistics to Deputy Staff Director for the
Office of Staff Director for Monetary and Financial Policy, effective September 12, 1983.
Elliott C. McEntee, Assistant Director, Division of Federal Reserve Bank Operations, has
been promoted to Associate Director, with senior supervisory responsibility for checks, electronic funds transfer, cash, fiscal, protection,
and pricing functions, effective August 29, 1983.
Michael J. Prell has been promoted from Senior Associate Director to Deputy Director in the
Division of Research and Statistics, effective
September 12, 1983.
Stephen R. Malphrus has been appointed to
the position of Assistant Staff Director for Management, Office Automation and Technology, in
the Office of the Staff Director for Management,
effective August 29, 1983. Mr. Malphrus joined
the Board's staff in April 1975 and assumed his
present position as Chief of the Banking Statistics Section in the Division of Data Processing in
December 1982. He holds a B.A. from Washington State University and an M.A. from Central
Michigan University.
Richard J. Manasseri has been named Assistant Director for Data Systems in the Division of
Data Processing, effective August 29, 1983. Mr.
Manasseri joined the Board in May 1971 and
assumed his present position as Chief of the Data
Base Development Section in March 1975. He
holds a B.S. from Boston College and an M.A.
from the University of Maryland.
Steven M. Roberts has been appointed Assistant to the Chairman, effective September 30,
1983. Mr. Roberts was Vice President of Government Affairs at the American Express Company
in Washington, D.C. His other experience includes more than three years as a chief economist for the Senate Committee on Banking,
Housing, and Urban Affairs and more than six
years as an economist in the Board's Division of
Research and Statistics. Mr. Roberts holds a
B.A. from Rutgers University and an M.S. and
Ph.D. from Purdue University.
SYSTEM
MEMBERSHIP:
ADMISSION OF STATE BANKS
The following bank was admitted to membership
in the Federal Reserve System during the period
August 10 through September 8, 1983:
California
Roseville
Placer Bank of Commerce
699
Record of Policy Actions of the
Federal Open Market Committee
MEETING HELD ON JULY 12-13,
Domestic
Policy
1983
Directive
The information reviewed at this meeting suggested that the economic recovery was proceeding at a strengthened pace. The latest data suggested that growth in real G N P may have been
even more rapid in the second quarter than the
6Vi percent preliminary estimate of the Commerce Department, and it appeared that relatively strong growth would be sustained into the
current quarter. Expenditures for consumer
goods were especially large, and a swing in
business inventories from liquidation to accumulation seemed to be developing more rapidly than
anticipated earlier.
The dollar value of retail sales advanced appreciably in May, marking the third consecutive
monthly increase. Outlays at general merchandise outlets and at furniture and appliance stores
were brisk, but sizable expenditures on autos
and automotive products continued to be an
important factor in the strength of retail sales.
Sales of new domestic automobiles rose to a rate
of 7.2 million units in June, the strongest monthly
selling pace in nearly two years. Survey reports
of marked improvement in consumer confidence
accompanied the vigorous recent gains in consumer spending.
Total private housing starts increased considerably in May to an annual rate of nearly 1.8
million units, following small declines during the
two preceding months. Starts in May were about
40 percent above their average level in the fourth
quarter of 1982. Other indicators of housing
activity also exhibited strength: newly issued
permits for residential buildings rose further in
May as did combined sales of new and existing
homes. Both measures were more than 30 percent above the average levels in the fourth quarter of last year.
With inventories depleted and sales strong,
businesses have been meeting demands out of
current production and appear to have started
rebuilding stocks in some lines. The index of
industrial production rose 1.1 percent in May to a
level 7 percent above its trough six months
earlier, and available data, including the statistics on employment and hours worked in manufacturing, suggested another sizable gain in output in June. As in other recent months, gains in
output and employment occurred across a broad
range of industries. Nonfarm payroll employment rose nearly 350,000 in June, after an increase of about 300,000 in May. The civilian
unemployment rate declined to 10.0 percent in
June, down 0.8 percentage point from its peak in
December.
Data on new orders and shipments continued
to indicate improvement in the demand for business equipment. Production of business equipment, which had contracted sharply in 1982 and
had continued to decline during the first quarter
of this year, rose substantially in May for the
second month in a row.
The producer price index for finished goods
(PPI) and the consumer price index (CPI) increased 0.3 percent and 0.5 percent respectively
in May, largely reflecting a sharp rise in energy
prices at both the producer and the consumer
levels. Exclusion of the volatile energy components would have resulted in no change in the
PPI and nearly a halving of the increase in the
CPI. During the first five months of 1983, the PPI
declined at an annual rate of about 2Va percent
and the CPI increased at an annual rate of 3
percent. Over the same period, the index of
average hourly earnings for private nonfarm production workers rose at an annual rate of AVi
percent, compared with an increase of 6 percent
for the year 1982.
In foreign exchange markets the trade-weighted value of the dollar against major foreign
700
Federal Reserve Bulletin • September 1983
currencies rose more than 2Vi percent in late
May and early June to a record level; subsequently it had fluctuated in a narrow range.
Reflecting the strength of the economy and the
persistently high level of the dollar, the U.S.
foreign trade deficit increased sharply in the
April-May period from its reduced first-quarter
rate; exports declined and both oil and non-oil
imports rose.
At its meeting on May 24, 1983, the Committee
had decided that open market operations in the
period until this meeting should be directed at
increasing only slightly the degree of restraint on
reserve positions. That action had been taken
against the background of growth in M2 and M3
remaining within their long-term ranges and
slightly below the annual rates of 9 and 8 percent
respectively established earlier for the quarter,
Ml growing substantially above anticipated levels for some time, and evidence of an acceleration in the rate of business recovery. The Committee had agreed that lesser restraint on reserve
positions would be appropriate in the context of
more pronounced slowing of growth in the
broader monetary aggregates relative to the
paths implied by the long-term ranges and deceleration of M l , or of indications of a weakening in
the pace of economic recovery. The intermeeting
range for the federal funds rate was retained at 6
to 10 percent.
Growth in M2 and M3 accelerated in May and
continued relatively strong in June, with both
aggregates expanding at an estimated annual rate
of about 10 percent. For the March-to-June period both M2 and M3 grew at an annual rate of
about 8V2 percent, a bit below the quarterly
objective established for M2 and a bit above that
for M3. Relative to the longer-run ranges, M2 by
June was somewhat above the midpoint of its
range and M3 was around the upper limit of its
range for the year.
M l , which had surged to an annual rate of
growth of about 26 percent in May, expanded at
a rate of around IOV2 percent in June. From the
fourth quarter of 1982 to June, Ml grew at an
annual rate of about 133/4 percent, considerably
above the Committee's tentative range of 4 to 8
percent for the year.
Though the pace of expansion in debt of domestic nonfinancial sectors over the first half of
the year was estimated to have remained within
the Committee's annual range of 8V2 to WV2
percent, growth in debt appeared to have been
more rapid in the second than in the first quarter.
This development reflected an acceleration in
borrowing by the U.S. Treasury as well as a
pickup in private credit demand. Total credit
outstanding at U.S. commercial banks expanded
at an annual rate of nearly 10 percent in June and
in the second quarter as a whole. Sizable acquisitions of Treasury securities continued to make
the major contribution to the expansion in bank
credit in June, but real estate lending strengthened further and business loans registered their
first significant increase since January.
Strong demands for money were associated
with relatively rapid expansion in total reserves
in June, but growth in nonborrowed reserves
(plus extended credit at the discount window)
was considerably slower than the increase in
total reserves. With open market operations
holding back on the supply of reserves, depository institutions increased their short-term borrowing at the discount window and sought reserves more actively in the federal funds market.
Adjustment borrowing from the Federal Reserve
discount window (including seasonal borrowing)
rose to about $680 million in June and rose
further in the first part of July; borrowing temporarily bulged to over $1 billion in the reserve
statement week that encompassed the midyear
bank statement date and the July 4 holiday
period. The federal funds rate traded in a range
of 83/4 to 9 percent for most of the period, but
most recently the rate had moved up into the 9 to
9l/8 percent range; somewhat higher rates were
temporarily associated with the management of
reserve positions over the midyear statement
date and the holiday period.
Other short-term market rates rose about 3/4 to
1 percentage point during the intermeeting period, reflecting in part responses to the modest
tightening of reserve market conditions that was
under way and apparently also some anticipatory
reaction to the strength of incoming data on the
monetary aggregates and economic activity.
Most long-term interest rates on taxable securities increased about 3/4 percentage point over the
period, while yields on tax-exempt issues were
little changed on balance. Average rates on new
Record of Policy Actions of the FOMC
commitments for fixed-rate conventional home
mortgage loans at savings and loan associations
also rose about 3A percentage point.
Given the momentum in economic activity that
appeared to be in train, the staff projections
presented at this meeting indicated that growth in
real G N P in the second half of the year would be
somewhat higher than had been anticipated earlier. Final purchases in private domestic sectors,
buoyed by expenditures for consumer goods,
were expected to be maintained at a relatively
strong pace in the latter half of the year and
businesses were expected to be adding appreciably to inventories. A gradual decline in the
unemployment rate was anticipated over the
balance of the year, and a further decline was
expected in 1984 in association with continued,
though more moderate, economic recovery. Upward price pressures were expected to be relatively modest over the projection horizon, assuming that inflationary expectations remained
damped, with related restraint on wage and price
policies of labor and business.
In their review of the economic situation and
outlook, the members focused on evidence of the
economy's strong forward momentum and the
prospects for continuing sizable gains in real
GNP during the months immediately ahead.
Consumer spending, which along with housing
has played a major role in fostering the recovery,
was likely to be sustained by the further reduction in personal income taxes at midyear. Most
of the members agreed, however, that economic
activity would probably expand at a more moderate pace later in the year and in 1984. Spending
for business inventories was expected to become
a less expansive factor as the recovery proceeded, and the outlook for exports remained relatively weak. The members also referred to a
number of potential threats to the recovery,
including financial strains related to the debt
problems of numerous developing countries and
the adverse impact of continuing large federal
deficits in the absence of measures to reduce
them.
While the expansive fiscal policy added to
purchasing power and supported consumption,
members were concerned that the need to finance large Treasury borrowing in a period when
private credit demands were accelerating would
701
put increasing upward pressure on interest rates
and curtail the availability of financing to private
borrowers. Sectors heavily dependent on credit,
such as housing and business investment, would
be particularly affected, as would small businesses. The view was expressed that the restraining impact on private credit demands and
economic activity of even current relatively high
interest rates—which seemed especially high in
real terms—could well be underestimated, and a
view was expressed that a decline in interest
rates from present levels would probably be
needed to prolong the recovery during 1984.
Members generally continued to regard the
near-term outlook for prices as favorable, and it
was observed that wage increases remained quite
moderate. However, several members saw acceleration in the rate of increase in prices as a
likely prospect for 1984. Reference was made to
a number of developments that were potentially
unfavorable, including possible increases in
prices of key farm products as a consequence of
governmental policies to reduce farm supplies,
and pressures stemming from rising prices of
imports if the foreign exchange value of the
dollar were to weaken, as many observers anticipated. It was also pointed out that actual price
increases would be sensitive to expectations as
conditioned by fiscal and monetary policy developments.
The individual members of the Committee had
prepared specific projections of economic activity and prices for this meeting. With regard to
growth in real GNP, the projections had as their
central tendency a range of 5 to 53A percent for
1983 and 4 to AVI percent for 1984, measured
from fourth quarter to fourth quarter. Most of the
members projected a rise in the implicit G N P
deflator in a range of 4]A to 43A percent during
1983 and 4lA to 5 percent during 1984. The rate of
unemployment was expected to decline gradually over the projection period, with most members anticipating an average rate of about 91/2
percent in the fourth quarter of 1983 and 8 XA to
S3A percent in the fourth quarter of 1984.
At its meeting on May 24, the Committee had
reviewed the growth ranges for the monetary and
credit aggregates that it had established in February for the year 1983 and had decided not to
change those ranges but to review them further
702
Federal Reserve Bulletin • September 1983
at this meeting. For the broader monetary aggregates, on which the Committee had agreed to
place principal weight, the ranges included annual growth rates of 7 to 10 percent for M2,
measured from February-March 1983 to the
fourth quarter of 1983, and 6V2 to W2 percent for
M3, measured from the fourth quarter of 1982 to
the fourth quarter of 1983. The range for monitoring Ml was set at 4 to 8 percent and an
associated range for total domestic nonfinancial
debt was estimated at 8V2 to IV/2 percent, both
for the period from the fourth quarter of 1982 to
the fourth quarter of 1983.
At this meeting the Committee reviewed its
target ranges for 1983 and established tentative
ranges for 1984 in light of the basic objectives of
encouraging sustained economic recovery while
fostering continued progress toward price stability and promoting a sustainable pattern of international transactions. In setting these ranges, the
Committee recognized that the relationships
among the money and credit aggregates and
nominal GNP in the period ahead were subject to
considerable uncertainty. It was therefore understood that the significance to be attached to
movements in the various aggregates in the implementation of policy would depend on continuing appraisal of evidence about the strength of
the economic recovery, the performance of
prices, and emerging conditions in domestic and
international financial markets.
In the Committee's discussion, all of the members supported a proposal to retain the 1983
ranges for growth in M2 and M3 established in
February. Recent experience suggested that actual growth of M2 and especially of M3 might be
in the upper half of their respective ranges for the
year rather than near the midpoints as anticipated earlier. The members noted that the massive
shifts of funds into M2 stemming from the introduction of money market deposit accounts and
the much more limited shifts relating to the new
Super NOW accounts had abated about as anticipated; and they assumed that these accounts,
along with the further deregulation of interest
rates on time deposits scheduled for October 1,
would have relatively little impact on growth of
the broader aggregates over the balance of 1983
and in 1984.
The members differed only marginally with
regard to the appropriate ranges that should be
established for growth in M2 and M3 in 1984.
Most favored a reduction of Vi percentage point
from the 1983 ranges, but in the course of the
discussion two members expressed a preference
for retaining the 1983 ranges. One member believed that the prospective relationship between
M2 and nominal GNP was subject to a very high
degree of uncertainty and that therefore no specific target should be set for that aggregate at this
time.
In the view of most members, the establishment of lower ranges for 1984 would be consistent with the Committee's objective of providing
adequate monetary growth to support continued
economic recovery while encouraging progress
toward reasonable price stability. It was recognized, however, that attainment of these broad
economic objectives would be greatly facilitated
by complementary governmental policies, notably further actions to reduce future federal deficits. Members who preferred to retain the current M2 and M3 ranges for 1984 were concerned
that lower ranges might prove to be more restrictive than was desirable and, given the uncertainties that were involved, they preferred not to
reduce the ranges unless there were substantial
evidence that inflationary pressures were reviving. In the view of most members, however,
modest and timely action to curb monetary
growth would enhance, rather than reduce, prospects for sustaining the economic recovery and
for lower interest rates over time in the context
of diminishing inflationary pressures.
A majority of the members also supported a
proposal to retain for 1983 the associated range
for total domestic nonfinancial debt that had
been set earlier but to reduce that range by V2
percentage point for 1984. Some sentiment was
expressed in favor of a reduction of 1 percentage
point for 1984 on the ground that the range
contemplated by the majority was a little high in
relation to the central tendency of the members'
projections of nominal GNP; in the past, growth
in this aggregate had tended to approximate
growth in nominal GNP. However, a majority of
the members concluded that allowance should be
made for expansion in total debt in 1984 in excess
of nominal GNP growth. Such a development
would be consistent with this year's experience
Record of Policy Actions of the FOMC
and might be connected with the relatively rapid
expansion in federal debt.
The members discussed at considerable length
what longer-run ranges to establish for M l and
what weight the Committee should attach to that
aggregate in the implementation of monetary
policy. The income velocity of Ml—the ratio of
nominal G N P to Ml—had deviated substantially
from normal cyclical patterns since the beginning
of 1982. It had declined more sharply and longer
than usual during the recent recession and had
failed to rebound as quickly as in the past with
the onset of recovery. A number of factors
apparently contributed to this unusual behavior,
including for a time precautionary demands for
highly liquid balances by the public in the face of
various economic and financial uncertainties.
Over the last several months, the behavior of Ml
velocity seemed to reflect the greater sensitivity
of this aggregate to declines in market interest
rates probably resulting from the much increased
share of interest-bearing NOW accounts in the
total. N O W accounts, which may serve as a
savings vehicle as well as fulfilling transactions
needs, have been the most rapidly growing component of M l since they were introduced on a
nationwide basis at the beginning of 1981. Regular NOW accounts bear a ceiling rate of 5V*
percent. The sharp drop in market rates during
the second half of 1982 made the opportunity
cost of holding N O W accounts relatively small
and, with a lag, increased the demand for them.
It was noted, though, that the recent expansion
in M l , with currency and demand deposits showing strength as well, probably also reflected
growing transaction needs relating to the recovery in economic activity.
Against this background, a key uncertainty
confronting the Committee was whether Ml velocity in the future would exhibit characteristics
more in line with earlier postwar experience.
Recent evidence seemed to suggest that the
decline in M l velocity was ending, as might be
expected as the lagged upward effect on demand
from earlier declines in interest rates wore off
and as business and consumer attitudes became
more optimistic.
While acknowledging the major uncertainties
that existed, a majority of the members nonetheless believed that a monitoring range should be
703
retained for M l . In this view M l would continue
to be given reduced weight in the formulation of
monetary policy and primary emphasis would
continue to be placed on the broader aggregates.
A few members, however, preferred to suspend
the targeting of M l at this time because they
viewed its prospective behavior as too uncertain
to permit the establishment of a meaningful
range. A subsidiary reason cited in support of
this view was the difficulty of communicating a
proper assessment of the reduced role of M l to
outside observers so long as the Committee
continued to set a specific range. One result was
a tendency for participants in financial markets
to attach undue importance to weekly fluctuations in Ml data, with the consequence that on
occasion published figures had a needlessly unsettling impact on financial markets.
In reviewing the Ml range for 1983, members
discussed whether that range should continue to
be based on the fourth quarter of 1982 or rebased
on the second quarter of 1983 in view of the
probability of a prospective change in the behavior of velocity. If the fourth quarter of 1982 were
continued as a base, M l growth would need to be
sharply curtailed to the point of little or no
growth for the rest of the year; alternatively, the
Ml range for the year would need to be raised
substantially from the current 4 to 8 percent,
given the rapid expansion during the first half of
the year, to allow for any significant further
growth in the second half. If instead Ml were
rebased on the second quarter, or perhaps on
June, some members were concerned that this
could be misconstrued as an indication that the
Committee was now weighing M l more heavily
in the formulation of monetary policy. However,
most members favored rebasing the M l range for
1983 on the second quarter to help make it clear
that the rapid growth in M1 over the past several
quarters was related to special circumstances
and that the Committee expected and wished to
see slower growth in the future. Such an approach, it was stressed, did not in itself imply
placing more weight on M l relative to the other
aggregates in policy implementation.
The members who preferred to continue setting a longer-run range for M l generally also
agreed that it should encompass growth rates
close to, or below, the Committee members'
704
Federal Reserve Bulletin • September 1983
outlook for expansion in nominal GNP. At one
extreme the Ml range could allow for very little
change, or perhaps only a minor increase, in Ml
velocity to accommodate the possibility that the
demand for Ml would remain stronger than it
had been in the earlier postwar period, given
income and interest rates. At the other extreme
such a range could allow for a fairly sizable
increase in Ml velocity; however, given the
ongoing changes in the composition of M l , it was
recognized that the increase could be somewhat
less than experienced in previous cyclical expansions.
Discussion of specific ranges for Ml centered
on 5 to 9 percent or 4 to 8 percent for the second
half of 1983 and the year 1984, although one
member preferred a lower range for 1984. Most
of the members indicated that they could accept
a proposal to establish a range for growth in Ml
of 5 to 9 percent for the period from the second
quarter of 1983 to the fourth quarter of 1983 and a
tentative range of 4 to 8 percent for the period
from the fourth quarter of 1983 to the fourth
quarter of 1984. It was understood that growth
within the lower portions of those ranges would
be appropriate if the velocity of Ml tended
toward a relatively normal cyclical increase as
the recovery proceeded; growth in the upper
portions of the ranges would be acceptable if the
upturn in Ml velocity remained relatively weak.
If there should occur an unexpectedly rapid
increase or a decline in Ml velocity, the Committee would reassess the ranges; it would in any
event review the tentative range for 1984 early in
the year in the light of economic and financial
conditions prevailing then.
In implementing policy, the Committee agreed
that primary emphasis would continue to be
placed on the broader aggregates. The behavior
of Ml would be monitored, with any increase in
the weight placed on that aggregate dependent on
evidence that its velocity behavior was assuming
a more predictable pattern. Expansion in total
nonfinancial domestic debt would also be monitored in assessing the behavior of the monetary
aggregates and the general stance of monetary
policy.
established earlier for growth in M2 and M3 for 1983.
The Committee also agreed on tentative growth ranges
for the period from the fourth quarter of 1983 to the
fourth quarter of 1984 of 6V2 to 9'/2 percent for M2 and
6 to 9 percent for M3. The Committee considered that
growth in Ml in a range of 5 to 9 percent from the
second quarter of 1983 to the fourth quarter of 1983,
and in a range of 4 to 8 percent from the fourth quarter
of 1983 to the fourth quarter of 1984 would be consistent with the ranges for the broader aggregates. The
associated range for total domestic nonfinancial debt
was reaffirmed at 8V2 to IV/2 percent for 1983 and
tentatively set at 8 to 11 percent for 1984.1
At the conclusion of its discussion the Committee voted for the following longer-run policy:
1. The Board's Midyear Monetary Policy Report pursuant
to the Full Employment and Balanced Growth Act of 1978
(the H u m p h r e y - H a w k i n s Act) was transmitted to the Congress on July 20, 1983.
The Committee reaffirmed the longer-run ranges
Votes for this action: Messrs. Volcker, Solomon,
Gramley, Guffey, Keehn, Martin, Partee, Rice,
Roberts, Mrs. Teeters, and Mr. Wallich. Vote
against this action: Mr. Morris.
Mr. Morris dissented from this action because
he did not believe that target ranges should be set
for Ml and M2. Because of financial innovations,
these aggregates in his view are no longer predictably related to nominal GNP—an essential
characteristic of an intermediate target for monetary policy. Thus, the Committee should turn to
broader financial aggregates, specifically M3,
total liquid assets, and total domestic nonfinancial debt as targets for monetary policy.
In the Committee's discussion of a policy
course for the short run, most of the members
indicated that they could support a slight further
increase in the degree of reserve restraint. In the
context of an economy that was much stronger
than expected, these members believed that such
a policy would provide some insurance against
the possible need for a considerably greater
degree of restraint later to maintain control on
inflation and growth in money and credit. For the
third quarter, the members expected this policy
to be associated with considerable moderation in
the growth of the monetary aggregates, especially M l , although they recognized the substantial
uncertainties that governed the short-run performance of the monetary aggregates, again especially that of M l .
One member expressed a preference for somewhat more tightening of reserve conditions over
Record of Policy Actions of the FOMC
the weeks ahead, while another favored no
change from the existing degree of restraint. In
the view of several members, a slight further
tightening by the Committee need not itself be
reflected in sizable further changes in interest
rates generally, given the increases that had
already occurred. It was recognized, however,
that actual movements in market rates would
depend importantly on economic and financial
developments in the weeks ahead, including the
performance of the monetary aggregates, the
outlook for the budget, and emerging private
credit demands against the background of a
rapidly expanding economy. It was also suggested that such an approach to short-run policy
would improve prospects for the development of
conditions that would permit some easing in the
degree of reserve restraint later.
At the conclusion of the Committee's discussion, a majority of the members indicated that
they favored a slight increase in the degree of
reserve restraint for the near term. It was anticipated that such a policy course would be associated with growth of M2 and M3 at annual rates of
about SVI and 8 percent respectively for the
period from June to September. Primary weight
would be placed on the performance of these
broader monetary aggregates in evaluating the
conduct of open market operations. The members agreed that lesser restraint on reserve conditions would be acceptable in the event of a
significant shortfall in the growth of the aggregates over the period ahead, while somewhat
greater restraint would be acceptable in the cqptext of more rapid growth in the aggregates. It
was understood that the need for greater or
lesser reserve restraint would also be evaluated
on the basis of available evidence about trends in
economic activity and prices and conditions in
domestic and international financial markets, including foreign exchange markets. The Committee anticipated that its third-quarter objectives
for the broader aggregates would be consistent
with a deceleration in Ml growth to an annual
rate of around 7 percent from June to September,
and that expansion in total domestic nonfinancial
debt would remain within the range of 8V2 to 11V2
percent established for the year. It was agreed
that the intermeeting range for the federal funds
rate, which provides a mechanism for initiating
705
consultation of the Committee, would remain at
6 to 10 percent.
At the conclusion of its discussion, the Committee issued the following domestic policy directive to the Federal Reserve Bank of New
York:
The rapid growth in real GNP in the second quarter
and other information reviewed at this meeting suggest
that the economic recovery is proceeding at a strengthened pace. Expenditures on consumption and housing
expanded substantially in the second quarter and
businesses apparently began to add to inventories after
a period of sharp liquidation. Nonfarm payroll employment rose considerably in May and June and the
civilian unemployment rate declined to 10.0 percent in
June. Industrial production continued to rise markedly
in May and partial data suggest a sizable gain in June.
Data on new orders and shipments continued to indicate improvement in the demand for business equipment. In May housing starts increased substantially
following small declines earlier and retail sales rose
appreciably further. Average prices and the index of
average hourly earnings have risen at a reduced pace
in the first five months of 1983.
The weighted average value of the dollar against
major foreign currencies rose substantially in late May
and the first half of June and subsequently has fluctuated in a narrow range. Reflecting the strength of the
U.S. economy and the persistent high level of the
dollar, the U.S. foreign trade deficit increased sharply
in April-May from its reduced first-quarter rate; exports declined and both oil and nonoil imports rose.
Strong growth in the broader aggregates in May and
June raised M2 to a level somewhat above the midpoint of the Committee's range for 1983 and M3 to
around the upper limit of its range. Ml grew very
rapidly over both months and was well above its range
for the year. Growth in debt of domestic nonfinancial
sectors appears to have picked up in the second
quarter. Interest rates have risen appreciably since
early May.
The Federal Open Market Committee seeks to foster monetary and financial conditions that will help to
reduce inflation further, promote growth in output on a
sustainable basis, and contribute to a sustainable pattern of international transactions. At its meeting in
February the Committee established growth ranges for
monetary and credit aggregates for 1983 in furtherance
of these objectives. The Committee recognized that
the relationships between such ranges and ultimate
economic goals have been less predictable over the
past year; that the impact of new deposit accounts on
growth ranges of monetary aggregates cannot be determined with a high degree of confidence; and that the
availability of interest on large portions of transaction
accounts, declining inflation, and lower market rates
of interest may be reflected in some changes in the
historical trends in velocity.
706
F e d e r a l R e s e r v e Bulletin • S e p t e m b e r 1983
In establishing growth ranges last February for the
aggregates for 1983 against this background, the Committee felt that growth in M2 might be more appropriately measured after the period of highly aggressive
marketing of money market deposit accounts had
subsided. The Committee also felt that a somewhat
wider range was appropriate for monitoring M l . With
these understandings, the Committee established the
following growth ranges: for the period from February-March of 1983 to the fourth quarter of 1983, 7 to 10
percent at an annual rate for M2, taking into account
the probability of some residual shifting into that
aggregate from non-M2 sources; and for the period
from the fourth quarter of 1982 to the fourth quarter of
1983, 6V2 to 9l/z percent for M3, which appeared to be
less distorted by the new accounts. For the same
period a tentative range of 4 to 8 percent was established for Ml assuming that Super NOW accounts
would draw only modest amounts of funds from
sources outside Ml and assuming that the authority to
pay interest on transaction balances was not extended
beyond presently eligible accounts. An associated
range of growth for total domestic nonfinancial debt
was estimated at 8V2 to 1 1 p e r c e n t . These ranges
were reviewed at the May meeting and left unchanged,
pending further review in July.
The Committee seeks in the short run to increase
slightly further the existing degree of reserve restraint.
The action is expected to be associated with growth of
M2 and M3 at annual rates of about 8V2 and 8 percent
respectively from June to September, consistent with
the targets established for these aggregates for the
year. Depending on evidence about the strength of
economic recovery and other factors bearing on the
business and inflation outlook, lesser restraint would
be acceptable in the context of a significant shortfall in
growth of the aggregates from current expectations,
while somewhat greater restraint would be acceptable
should the aggregates expand more rapidly. The Committee anticipates that a deceleration in Ml growth to
an annual rate of around 7 percent from June to
September will be consistent with its third-quarter
objectives for the broader aggregates, and that expansion in total domestic nonfinancial debt would remain
within the range established for the year. 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 6 to 10 percent.
At this meeting, the Committee reaffirmed the longer-run ranges established earlier for growth in M2 and
M3 for 1983. The Committee also agreed on tentative
growth ranges for the period from the fourth quarter of
1983 to the fourth quarter of 1984 of 6V2 to 9Vi percent
for M2 and 6 to 9 percent for M3. The Committee
considered that growth in Ml in a range of 5 to 9
percent from the second quarter of 1983 to the fourth
quarter of 1983, and in a range of 4 to 8 percent from
the fourth quarter of 1983 to the fourth quarter of 1984
would be consistent with the ranges for the broader
aggregates. The associated range for total domestic
nonfinancial debt was reaffirmed at 8V2 to IIV2 percent
for 1983 and tentatively set at 8 to 11 percent for 1984.
In implementing monetary policy, the Committee
agreed that substantial weight would continue to be
placed on the behavior of the broader monetary aggregates. The behavior of Ml and total domestic nonfinancial debt will be monitored, with the degree of
weight placed on Ml over time dependent on evidence
that velocity characteristics are resuming more predictable patterns. The Committee understood that
policy implementation would involve continuing appraisal of the relationships between the various measures of money and credit and nominal GNP, including
evaluation of conditions in domestic credit and foreign
exchange markets.
Votes for this action: Messrs. Volcker, Solomon,
Gramley, Guffey, Keehn, Martin, Morris, Partee,
Rice, and Roberts. Votes against this action: Mrs.
Teeters and Mr. Wallich.
M r s . T e e t e r s d i s s e n t e d f r o m this a c t i o n b e cause she preferred to direct open market operat i o n s t o w a r d m a i n t a i n i n g t h e e x i s t i n g d e g r e e of
reserve restraint. In her view the additional
upward pressure on interest rates from further
restraint on reserve positions was unnecessary
a n d w o u l d r e t a r d a c t i v i t y in i n t e r e s t - s e n s i t i v e
s e c t o r s of t h e e c o n o m y a n d t h r e a t e n t h e s u s t a i n ability of t h e r e c o v e r y .
M r . W a l l i c h d i s s e n t e d f r o m this a c t i o n b e c a u s e
h e f a v o r e d a d i r e c t i v e calling f o r s o m e w h a t
g r e a t e r r e s e r v e r e s t r a i n t . I n his j u d g m e n t , s u c h a
policy c o u r s e w o u l d c o n t r i b u t e t o b e t t e r c o n t r o l
of t h e m o n e t a r y a g g r e g a t e s a n d , g i v e n t h e s t r o n g
m o m e n t u m of t h e e c o n o m y , w o u l d b e m o r e
likely t o p r o v e c o n s i s t e n t w i t h t h e C o m m i t t e e ' s
l o n g e r - r u n o b j e c t i v e s of f o s t e r i n g s u s t a i n e d e c o n o m i c r e c o v e r y w h i l e c u r b i n g inflation.
707
Legal Developments
REVISION OF REGULATION
Section 207.2—Definitions
G
Regulation G—Securities Credit by Persons Other
Than Banks, Brokers, or Dealers, has been revised in
its entirety. The new Regulation G is written in simplified language and organized in a more logical fashion.
Certain regulatory burdens and obsolete provisions
have been removed.
Effective August 31, 1983, the Board revises Regulation G to read as follows:
Part 207—Securities Credit by Persons
Than Banks, Brokers, or Dealers
Section
Section
Section
Section
Section
207.1
207.2
207.3
207.4
207.5
Section 207.6
Section 207.7
Other
Authority, Purpose, and Scope
Definitions
General Requirements
Credit to Broker-Dealers
Employee Stock Option and
Stock Purchase Plans
Requirements for the List
of OTC Margin Stocks
Supplement; Maximum Loan
Value of Margin Stock and
Other Collateral
Authority: §§ 3, 7, 8, 17 and 23 of the Securities Exchange Act of 1934,
as amended (15 U . S . C . 78c, 78g, 78h, 78q and 78w).
Section 207.1—Authority, Purpose, and Scope
(a) Authority. Regulation G (this part) is issued by the
Board of Governors of the Federal Reserve System
(the Board) pursuant to the Securities Exchange Act of
1934 (the Act) (15 U . S . C . 78a et seq.).
(b) Purpose and Scope. This part applies to persons
other than banks, brokers or dealers, who extend or
maintain credit secured directly or indirectly by margin stock and who are required to register with the
Board under section 207.3(a) of this part. Credit extended by such persons is regulated by limiting the
loan value of the collateral securing the credit, if the
purpose of the credit is to buy or carry margin stock.
The terms used in this part have the meanings given
them in section 3(a) of the Act or as defined in this
section.
(a) "Affiliate" means any person who, directly or
indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control
with the lender.
(b) "Carrying" credit is credit that enables a customer
to maintain, reduce, or retire indebtedness originally
incurred to purchase a stock that is currently a margin
stock.
(c) "Current market value" of:
(1) a security means:
(i) if quotations are available, the closing sale
price of the security on the preceding business
day, as appearing in any regularly published reporting or quotation service; or
(ii) if there is no closing sale price, the lender may
use any reasonable estimate of the market value
of the security as of the close of business on the
preceding business day; or
(iii) if the credit is used to finance the purchase of
the security the total cost of purchase, which may
include any commissions charged.
(2) any other collateral means a value determined by
any reasonable method.
(d) "Customer" includes any person or persons acting
jointly, to or for whom a lender extends or maintains
credit.
(e) "Good faith" with respect to:
(1) the loan value of collateral means that amount
(not exceeding 100% of the current market value of
the collateral) which a lender, exercising sound
credit judgment, would lend without regard to the
customer's other assets held as collateral in connection with unrelated transactions.
(2) accepting a statement or notice from or on behalf
of a customer means that the lender or its duly
authorized representative is alert to the circumstances surrounding the credit, and if in possession
of information that would cause a prudent person
708
Federal Reserve Bulletin • September 1983
not to accept the notice or certification without
inquiry, investigates and is satisfied that it is truthful.
(ii) a company which has at least 95 per cent of its
assets continuously invested in exempted securities (as defined in 15 U.S.C. 78c(12)).
(f) "Indirectly secured"
(1) includes any arrangement with the customer
under which:
(i) the customer's right or ability to sell, pledge, or
otherwise dispose of margin stock owned by the
customer is in any way restricted while the credit
remains outstanding; or
(ii) the exercise of such right is or may be cause
for accelerating the maturity of the credit.
(2) does not include such an arrangement if:
(i) after applying the proceeds of the credit, not
more than 25 per cent of the value of the assets
subject to the arrangement, as determined by any
reasonable method, are margin securities;
(ii) it is a lending arrangement that permits accelerating the maturity of the credit as a result of a
default or renegotiation of another credit to the
customer by another creditor that is not an affiliate of the lender;
(iii) the lender holds the margin stock only in the
capacity of custodian, depositary, or trustee, or
under similar circumstances and, in good faith,
has not relied upon the margin stock as collateral;
or
(iv) if the lender, in good faith, has not relied upon
the margin stock as collateral in extending or
maintaining the credit.
(j) "Maximum loan value" is the percentage of current
market value assigned by the Board under section
207.7 of this part to specified types of collateral. The
maximum loan value of margin stock is stated as a percentage of current market value. All other collateral
has "good faith" loan value except that puts, calls and
combinations thereof have no loan value.
(g) "In the ordinary course of business" means occurring or reasonably expected to occur in carrying out or
furthering any business purpose, or in the case of an
individual, in the course of any activity for profit or the
management or preservation of property.
(a) Registration;
(h) "Lender" means any person subject to the registration requirements of this part.
(i) "Margin stock" means:
(1) any equity security registered or having unlisted
trading privileges on a national securities exchange;
(2) any OTC margin stock;
(3) any debt security convertible into a margin stock
or carrying a warrant or right to subscribe to or
purchase a margin stock;
(4) any warrant or right to subscribe to or purchase a
margin stock; or
(5) any security issued by an investment company
registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8), other than:
(i) a company licensed under the Small Business
Investment Company Act of 1958, as amended
(15 U.S.C. 661); or
(k) "OTC margin stock" means any equity security
not traded on a national securities exchange that the
Board has determined has the degree of national
investor interest, the depth and breadth of market, the
availability of information respecting the security and
its issuer, and the character and permanence of the
issuer to warrant being treated like an equity security
traded on a national securities exchange. An OTC
stock is not considered to be an "OTC margin stock"
unless it appears on the Board's periodically published
list of OTC Margin Stocks.
(1) "Purpose credit" is credit for the purpose, whether
immediate, incidental, or ultimate, of buying or carrying a margin stock.
Section 207.3—General Requirements
termination
of
registration.
(1) Every person who, in the ordinary course of
business, extends or maintains credit secured, directly or indirectly, by any margin stock shall register on Federal Reserve Form F.R. G-l (OMB No.
7100-0011) within 30 days after the end of any
calendar quarter during which
(i) the amount of credit extended equals $200,000
or more, or
(ii) the amount of credit outstanding at any time
during that calendar quarter equals $500,000 or
more.
(2) A registered lender may apply to terminate its
registration, by filing Federal Reserve Form F.R. G2 (OMB No. 7100-0011), if the lender has not, during
the preceding six calendar months, had more than
$200,000 of such credit outstanding. Registration
shall be deemed terminated when the application is
approved by the Board.
(b) Limitation on Extending Purpose Credit. N o lend-
er, except a plan-lender, as defined in section
207.5(a)(1) of this part, shall extend any purpose
credit, secured directly or indirectly by margin stock
Legal Developments
in an amount that exceeds the maximum loan value of
the collateral securing the credit, as set forth in section
207.7 of this part.
(c) Maintaining credit. A lender may continue to
maintain any credit initially in compliance with this
part, regardless of:
(1) reduction in the customer's equity resulting from
change in market prices;
(2) change in the maximum loan value prescribed by
this part; or
(3) change in the status of the security (from nonmargin to margin) securing an existing purpose
credit.
(d) Arranging credit. N o lender may arrange for the
extension or maintenance of any credit, except upon
the same terms and conditions under which the lender
itself may extend or maintain credit under this part
except this limitation shall not apply with respect to
the arranging by a lender for a bank to extend or
maintain credit on margin stock or exempted securities.
(e) Purpose statement. Except for credit extended
under section 207.5 of this part, whenever a lender
extends credit secured directly or indirectly by any
margin stock, the lender shall require its customer to
execute Form F.R. G-3 (OMB No. 7100-0018), which
shall be signed and accepted by a duly authorized
representative of the lender acting in good faith.
(f) Purpose statement for revolving credit or multiple
draw agreements.
(1) If a lender extends credit, secured directly or
indirectly by any margin stock, under a revolving
credit or other multiple draw agreement, Form F.R.
G-3 can either be executed each time a disbursement
is made under the agreement, or at the time the
credit arrangement is originally established.
(2) If a purpose statement executed at the time the
credit arrangement is initially made indicates that
the purpose is to purchase or carry margin stock, the
credit will be deemed in compliance with this part if
the maximum loan value of the collateral at least
equals the aggregate amount of funds actually disbursed. For any purpose credit disbursed under the
agreement, the lender shall obtain and attach to the
executed Form F.R. G-3 a current list of collateral—
which adequately supports all credit extended under
the agreement.
(g) Single credit rule.
(1) All purpose credit extended to a customer shall
be treated as a single credit, and all the collateral
709
securing such credit shall be considered in determining whether or not the credit complies with this part.
(2) A lender that has extended purpose credit secured by margin stock may not subsequently extend
unsecured purpose credit to the same customer
unless the combined credit does not exceed the
maximum loan value of the margin stock securing
the prior credit.
(3) If a lender extended unsecured purpose credit to
a customer prior to the extension of purpose credit
secured by margin securities, the credits shall be
combined and treated as a single credit solely for the
purposes of the withdrawal and substitution provision of paragraph (i) of this section.
(4) If a lender extends purpose credit secured by any
margin stock and nonpurpose credit to the same
customer, the lender shall treat the credits as two
separate loans and may not rely upon the required
collateral securing the purpose credit for the nonpurpose credit.
(h) Mixed collateral loans. A purpose credit secured in
part by margin stock, and in part by other collateral
shall be treated as two separate loans, one secured by
the margin stock and one by all other collateral. A
lender may use a single credit agreement, if it maintains records identifying each portion of the credit and
its collateral.
(i) Withdrawals and substitutions.
(1) A lender may permit any withdrawal or substitution of cash or collateral by the customer if the
withdrawal or substitution would not:
(i) cause the credit to exceed the maximum loan
value of the collateral; or
(ii) increase the amount by which the credit exceeds the maximum loan value of the collateral.
(2) For purposes of this section, the maximum loan
value of the collateral on the day of the withdrawal
or substitution shall be used.
(j) Exchange offers. To enable a customer to participate in a reorganization, recapitalization, or exchange
offer that is made to holders of an issue of margin stock
a lender may permit substitution of the securities
received. A nonmargin nonexempted security acquired in exchange for a margin stock shall be treated
as if it is margin stock for a period of 60 days following
the exchange.
(k) Renewals and extensions of maturity. A renewal or
extension of the maturity of a credit need not be
considered a new extension of credit if the amount of
the credit is increased only by the addition of interest,
service charges, or taxes with respect to the credit.
710
Federal Reserve Bulletin • September 1983
(1) Transfers of credit.
(1) A transfer of a credit between customers or
lenders shall not be considered a new extension of
credit if:
(i) the original credit was in compliance with this
part;
(ii) the transfer is not made to evade this part;
(iii) the amount of credit is not increased; and
(iv) the collateral for the credit is not changed.
(2) Any transfer between customers at the same
lender shall be accompanied by a statement by the
transferor customer describing the circumstances
giving rise to the transfer and shall be accepted and
signed by a duly authorized representative of the
lender acting in good faith. The lender shall keep
such statement with its records of the transferee
account.
(3) When a transfer is made between lenders, the
transferee lender shall obtain a copy of the Form
F.R. G-3 originally filed with the transferor lender
and retain the copy with its records of the transferee
account.
(m) Action for lender's protection. Nothing in this part
shall require a lender to waive or forego any lien, or
prevent a lender from taking any action it deems
necessary for its protection.
(n) Mistakes in good faith. A mistake in good faith in
connection with the extension or maintenance of credit shall not be a violation of this part.
(o) Annual Report. Every registered lender shall,
within 30 days following June 30 of every year, file
Form F.R. G-4 (OMB No. 7100-0011).
(p) Where to register and file applications and reports.
Registration statements, applications to terminate registration, and annual reports shall be filed with the
Federal Reserve Bank of the district in which the
principal office of the lender is located.
Section 207.4—Credit to Broker-Dealers
No lender shall extend or maintain credit secured,
directly or indirectly, by any margin stock to a creditor
who is subject to Part 220 of this Chapter except in the
following circumstances:
(a) Emergency Loans. Credit extended in good faith
reliance upon a certification from the customer that
the credit is essential to meet emergency needs arising
from exceptional circumstances. Any collateral for
such credit shall have good faith loan value.
(b) Capital Contribution Loans. Credit that the Board
has exempted by order upon a finding that the exemption is necessary or appropriate in the public interest
or for the protection of investors, provided the Securities Investor Protection Corporation certifies to the
Board that the exemption is appropriate.
Section 207.5—Employee Stock Option and
Stock Purchase Plans
(a) Plan-lender; eligible plan.
(1) Plan-lender means any corporation, (including a
wholly-owned subsidiary, or a lender that is a thrift
organization whose membership is limited to employees and former employees of the corporation,
its subsidiaries or affiliates) that extends or maintains credit to finance the acquisition of margin
stock of the corporation, its subsidiaries or affiliates
under an eligible plan.
(2) Eligible Plan. An eligible plan means any employee stock option, purchase, or ownership plan
adopted by a corporation and approved by its stockholders that provides for the purchase of margin
stock of the corporation, its subsidiaries, or affiliates.
(b) Credit to exercise rights under or finance an
eligible plan.
(1) If a plan-lender extends or maintains credit under
an eligible plan, any margin security that directly or
indirectly secures that credit shall have good faith
loan value.
(2) Credit extended under this section shall be
treated separately from credit extended under any
other section of this part except sections 207.3(a)
and 207.3(o) of this part.
Section 207.6—Requirements for the List of
OTC Margin Stocks
(a) Requirements for inclusion on the list. Except as
provided in paragraph (d) of this section, an OTC
margin stock shall meet the following requirements:
(1) Four or more dealers stand willing to, and do in
fact, make a market in such stock and regularly
submit bona fide bids and offers to an automated
quotations system for their own accounts;
(2) The minimum average bid price of such stock, as
determined by the Board, is at least $5 per share;
(3) The stock is registered under section 12 of the
Act, is issued by an insurance company subject to
section 12(g)(2)(G) of the Act, is issued by a closed
end investment management company subject to
Legal Developments
registration pursuant to section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8), is an
American Depository Receipt (ADR) of a foreign
issuer whose securities are registered under section
12 of the Act, or is a stock of an issuer required to
file reports under section 15(d) of the Act;
(4) Daily quotations for both bid and asked prices for
the stock are continuously available to the general
public;
(5) The stock has been publicly traded for at least six
months;
(6) The issuer has at least $4 million of capital,
surplus, and undivided profits;
(7) There are 400,000 or more shares of such security outstanding in addition to shares held benefically
by officers, directors or beneficial owners of more
than 10 per cent of the stock;
(8) There are 1,200 or more holders of record, as
defined in SEC Rule 12g5-l (17 CFR 240.12g5-l), of
the stock who are not officers, directors or beneficial owners of 10 per cent or more of the stock, or
the average daily trading volume of such a stock, as
determined by the Board, is at least 500 shares; and
(9) The issuer or a predecessor in interest has been
in existence for at least three years.
(b) Requirements for continued inclusion on the list.
Except as provided in paragraph (d) of this section, an
OTC margin stock shall meet the following requirements:
(1) Three or more dealers stand willing to, and do in
fact, make a market in such stock and regularly
submit bona fide bids and offers to an automated
quotations system for their own accounts;
(2) The minimum average bid price of such security,
as determined by the Board, is at least $2 per share;
(3) The security is registered as specified in paragraph (a)(3) of this section;
(4) Daily quotations for both bid and asked prices for
the stock are continuously available to the general
public;
(5) The issuer has at least $1 million of capital,
surplus, and undivided profits;
(6) There are 300,000 or more shares of such stock
outstanding in addition to shares held beneficially by
officers, directors, or beneficial owners of more than
10 per cent of the stock; and
(7) There continue to be 800 or more holders of
record, as defined in SEC Rule 12g5-l (17 CFR
240.12g5-l), of the stock who are not officers, directors, or beneficial owners of 10 per cent or more of
the stock, or the average daily trading volume of
such stock, as determined by the Board, is at least
300 shares.
711
(c) Removal from the list of OTC margin stocks. The
Board shall periodically remove from the list any stock
that:
(1) ceases to exist or of which the issuer ceases to
exist, or
(2) no longer substantially meets the provisions of
paragraph (b) of this section or section 207.2(k).
(d) Discretionary
authority of Board. Without regard
to the other paragraphs of this section, the Board may
add to, or omit or remove from, the OTC margin stock
list any equity security, if in the judgment of the
Board, such action is necessary or appropriate in the
public interest.
(e) Unlawful representations.
It shall be unlawful for
any lender to make, or cause to be made, any representation to the effect that the inclusion of a security
on the list of OTC margin stocks is evidence that the
Board or the SEC has in any way passed upon the
merits of, or given approval to, such security or any
transactions therein. Any statement in an advertisement or other similar communication containing a
reference to the Board in connection with the list or
securities on that list shall be an unlawful representation.
Section 207.7—Supplement: Maximum Loan
Value of Stock and Other Collateral
(a) Maximum loan value of a margin stock. The
maximum loan value of any margin stock, except
options, is fifty per cent of its current market value.
(b) Maximum loan value of nonmargin stock and all
other collateral. The maximum loan value of a nonmargin stock and all other collateral except puts, calls,
or combinations thereof is their good faith loan value.
(c) Maximum loan value of options. Whether they are
margin stock or not, puts, calls, and combinations
thereof have no loan value.
AMENDMENTS
TO REGULATION
T
The Board of Governors has amended its Regulation
T—Credit by Brokers and Dealers, to include language
that reflects the earlier revision of criteria for initial
and continued inclusion on the List of OTC Margin
Stocks.
Effective November 21, 1983 or any earlier date
after June 20, 1983, at the option of the creditor, the
Board amends Regulation T as set forth below:
712
Federal Reserve Bulletin • September 1983
Part 220—Credit by Brokers and Dealers
Section 221.1—Authority, Purpose, and Scope
Section 220.2—Definitions
(a) Authority. Regulation U ("this part") is issued by
the Board of Governors of the Federal Reserve System ("the Board") pursuant to the Securities Exchange Act of 1934 (the "Act") (15 U . S . C . 78a
et seq.).
(s)*** An OTC stock is not considered to be an "OTC
margin stock" unless it appears on the Board's periodically published list of OTC margin stocks.
Section 220.17—Requirements for List of OTC
Margin Stocks
(a)***
(3) The stock is registered under section 12 of the
Act, is issued by an insurance company subject to
section 12(2)(G) of the Act, is issued by a closed-end
investment management company subject to registration pursuant to section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8), is an
American Depository Receipt (ADR) of a foreign
issuer whose securities are registered under section
12 of the Act, or is a stock of an issuer required to
file reports under section 15(d) of the Act;
(9) The issuer or a predecessor in interest has been
in existence for at least 3 years.
AMENDMENTS
TO REGULATION
U
Regulation U—Credit by Banks for the Purpose of
Purchasing or Carrying Margin Stock, has been revised in its entirety. The new Regulation U is written
in simplified language and organized in a more logical
fashion. Obsolete provisions and certain regulatory
burdens and form-filing requirements been removed.
Effective August 31, 1983, the Board revises Regulation U to read as follows:
Part 221—Credit by Banks for the Purpose of
Purchasing or Carrying Margin Stock
Section
Section
Section
Section
Section
221.1
221.2
221.3
221.4
221.5
Section 221.6
Section 221.7
Section 221.8
Authority, Purpose, and Scope
Definitions
General Requirements
Agreements of Nonmember Banks
Special Purpose Loans to Brokers
and Dealers
Exempted Transactions
Requirements for the List of OTC
Margin Stocks
Supplement; Maximum Loan Value
of Margin Stock and Other Collateral
Authority: §§ 3, 7, 8 and 23 of the Securities Exchange Act of 1934, as
amended (15 U.S.C. §§ 78c, 78g, 78h and 78w).
(b) Purpose and scope. This part imposes credit restrictions upon "banks" (as defined in section 221.2(b)
of this part) that extend credit for the purpose of
buying or carrying margin stock if the credit is secured
directly or indirectly by margin stock. Banks may not
extend more than the maximum loan value of the
collateral securing such credit, as set by the Board in
section 221.8 (the Supplement).
Section 221.2—Definitions
The terms used in this part have the meanings given
them in section 3(a) of the Act or as defined in this
section.
(a) "Affiliate" means:
(1) any bank holding company of which a bank is a
subsidiary within the meaning of the Bank Holding
Company Act of 1956, as amended (12 U . S . C .
1841(d));
(2) any other subsidiary of such bank holding company; and
(3) any other corporation, business trust, association, or other similar organization that is an affiliate
as defined in section 2(b) of the Banking Act of 1933
(12 U.S.C. 221a(c)).
(b)(1) "Bank" has the meaning given to it in section
3(a)(6) of the Act (15 U . S . C . 78c(a)(6)) and includes:
(i) any subsidiary of a bank;
(ii) any corporation organized under section 25(a)
of the Federal Reserve Act (12 U.S.C. 611); and
(iii) any agency or branch of a foreign bank
located within the United States.
(2) "Bank" does not include:
(i) any savings and loan association,
(ii) any credit union,
(iii) any lending institution that is an instrumentality or agency of the United States, or
(iv) any member of a national securities exchange.
(c) "Carrying" credit is credit that enables a customer
to maintain, reduce, or retire indebtedness originally
incurred to purchase a security that is currently a
margin stock.
Legal Developments
(d) "Current market value" of
(1) a security means:
(i) if quotations are available, the closing sale
price of the security on the preceding business
day, as appearing on any regularly published
reporting or quotation service; or
(ii) if there is no closing sale price, the bank may
use any reasonable estimate of the market value
of the security as of the close of business on the
preceding business day; or
(iii) if the credit is used to finance the purchase of
the security, the total cost of purchase, which
may include any commissions charged.
(2) any other collateral means a value determined by
any reasonable method in accordance with sound
banking practices.
(e) "Customer" includes any person or persons acting
jointly, to or for whom a bank extends or maintains
credit.
(f) "Good faith" with respect to:
(1) the loan value of collateral, means that amount
(not exceeding 100 per cent of the current market
value of the collateral) which a bank, exercising
sound banking judgment, would lend, without regard to the customer's other assets held as collateral
in connection with unrelated transactions.
(2) accepting notice or certification from or on
behalf of a customer means that the bank or its duly
authorized representative is alert to the circumstances surrounding the credit, and if in possession
of information that would cause a prudent person
not to accept the notice or certification without
inquiry, investigates and is satisfied that it is truthful;
(g) "Indirectly secured"
(1) includes any arrangement with the customer
under which:
(i) the customer's right or ability to sell, pledge, or
otherwise dispose of margin stock owned by the
customer is in any way restricted while the credit
remains outstanding; or
(ii) the exercise of such right is or may be cause
for accelerating the maturity of the credit.
(2) does not include such an arrangement if:
(i) after applying the proceeds of the credit, not
more than 25 per cent of the value (as determined
by any reasonable method) of the assets subject to
the arrangement is represented by margin stock;
(ii) it is a lending arrangement that permits accelerating the maturity of the credit as a result of a
default or renegotiation of another credit to the
customer by another lender that is not an affiliate
of the bank;
713
(iii) the bank holds the margin stock only in the
capacity of custodian, depositary, or trustee, or
under similar circumstances, and, in good faith,
has not relied upon the margin stock as collateral;
or
(iv) the bank, in good faith, has not relied upon the
margin stock as collateral in extending or maintaining the particular credit.
(h) "Margin stock" means:
(1) any equity security registered or having unlisted
trading privileges on a national securities exchange;
(2) any OTC margin stock;
(3) any debt security convertible into a margin
stock, or carrying a warrant or right to subscribe to
or purchase a margin stock;
(4) any warrant or right to subscribe to or purchase a
margin stock; or
(5) any security issued by an investment company
registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8), other than:
(i) a company licensed under the Small Business
Investment Company Act of 1958, as amended
(15 U.S.C. 661), or
(ii) a company which has at least 95 per cent of its
assets continuously invested in exempted securities (as defined in 15 U.S.C. 78c(12)).
(i) "Maximum loan value" is the percentage of current
market value assigned by the Board under section
221.8 of this part to specified types of collateral. The
maximum loan value of margin stock is stated as a
percentage of its current market value. Puts, calls and
combinations thereof have no loan value except for
purposes of section 221.5(c)(10) of this part. All other
collateral has "good faith" loan value.
(j) "OTC margin stock" is any equity security not
traded on a national securities exchange that the Board
has determined has the degree of national investor
interest, the depth and breadth of market, the availability of information respecting the security and its
issuer, and the character and permanence of the issuer
to warrant being treated like an equity security traded
on a national securities exchange. An OTC stock is not
considered to be an "OTC margin stock" unless it
appears on the Board's periodically published list of
OTC margin stocks.
(k) "Purpose credit" is any credit for the purpose,
whether immediate, incidental, or ultimate, of buying
or carrying margin stock.
714
Federal Reserve Bulletin • September 1983
Section 221.3—General Requirements
(a) Extending, maintaining, and arranging credit.
(1) Extending credit. N o bank shall extend any
purpose credit, secured directly or indirectly by
margin stock, in an amount that exceeds the maximum loan value of the collateral securing the credit.
The maximum loan value of margin stock (set forth
in section 221.8 of this part) is assigned by the Board
in terms of a percentage of the current market value
of the margin stock. All other collateral has "good
faith" loan value, as defined in section 221.2(f) of
this part.
(2) Maintaining credit. A bank may continue to
maintain any credit initially extended in compliance
with this part, regardless of:
(i) reduction in the customer's equity resulting
from change in market prices;
(ii) change in the maximum loan value prescribed
by this part; or
(iii) change in the status of the security (from
nonmargin to margin) securing an existing purpose credit.
(3) Arranging credit. N o bank may arrange for the
extension or maintenance of any purpose credit,
except upon the same terms and conditions under
which the bank itself may extend or maintain purpose credit under this part.
(b) Purpose
statement.
(1) Except for credit extended under paragraph (c)
of this section, whenever a bank extends credit
secured directly or indirectly by any margin stock,
the bank shall require its customer to execute Form
F.R. U-l (OMB No. 7100-0115), which shall be
signed and accepted by a duly authorized officer of
the bank acting in good faith.
(c) Purpose statement for revolving credit or multipledraw agreements.
(1) If a bank extends credit, secured directly or
indirectly by any margin stock, under a revolving
credit or other multiple-draw agreement, Form F.R.
U - l can either be executed each time a disbursement is made under the agreement, or at the time the
credit arrangement is originally established.
(2) If a purpose statement executed at the time the
credit arrangement is initially made indicates that
the purpose is to purchase or carry margin stock, the
credit will be deemed in compliance with this part if
the maximum loan value of the collateral at least
equals the aggregate amount of funds actually dis
bursed. For any purpose credit disbursed under the
agreement, the bank shall obtain and attach to the
executed Form F.R. U-l a current list of collateral
which adequately supports all credit extended under
the agreement.
(d) Single credit rule.
(1) All purpose credit extended to a customer shall
be treated as a single credit, and all the collateral
securing such credit shall be considered in determining whether or not the credit complies with this part.
(2) A bank that has extended purpose credit secured
by margin stock may not subsequently extend unsecured purpose credit to the same customer unless
the combined credit does not exceed the maximum
loan value of the collateral securing the prior credit.
(3) If a bank extended unsecured purpose credit to a
customer prior to the extension of purpose credit
secured by margin stock, the credits shall be combined and treated as a single credit solely for the
purposes of the withdrawal and substitution provision of paragraph (f) of this section.
(4) If a bank extends purpose credit secured by any
margin stock and non-purpose credit to the same
customer, the bank shall treat the credits as two
separate loans and may not rely upon the required
collateral securing the purpose credit for the nonpurpose credit.
(e) Mixed collateral loans. A purpose credit secured in
part by margin stock, and in part by other collateral
shall be treated as two separate loans, one secured by
margin stock and one by all other collateral. A bank
may use a single credit agreement, if it maintains
records identifying each portion of the credit and its
collateral.
(f) Withdrawals and substitutions.
(1) A bank may permit any withdrawal or substitution of cash or collateral by the customer if the
withdrawal or substitution would not:
(i) cause the credit to exceed the maximum loan
value of the collateral; or
(ii) increase the amount by which the credit exceeds the maximum loan value of the collateral.
(2) For purposes of this section, the maximum loan
value of the collateral on the day of the withdrawal
or substitution shall be used.
(g) Exchange offers. To enable a customer to participate in a reorganization, recapitalization or exchange
offer that is made to holders of an issue of margin
stock, a bank may permit substitution of the securities
received, A nonmargin, nonexempted security ac-
Legal Developments
715
quired in exchange for a margin stock shall be treated
as if it is margin stock for a period of 60 days following
the exchange.
(b) Any nonmember bank may terminate its agreement
upon written notification to the Board.
(h) Renewals and extensions of maturity. A renewal or
extension of maturity of a credit need not be considered a new extension of credit if the amount of the
credit is increased only by the addition of interest,
service charges, or taxes with respect to the credit.
Section 221.5—Special Purpose Loans to
Brokers and Dealers
(i) Transfers of credit.
(1) A transfer of a credit between customers or
banks shall not be considered a new extension of
credit if:
(i) the original credit was in compliance with this
part;
(ii) the transfer is not made to evade this part;
(iii) the amount of credit is not increased; and
(iv) the collateral for the credit is not changed.
(2) Any transfer between customers at the same
bank shall be accompanied by a statement by the
transferor customer describing the circumstances
giving rise to the transfer and shall be accepted and
signed by an officer of the bank acting in good faith.
The bank shall keep such statement with its records
of the transferee account.
(3) When a transfer is made between banks, the
transferee bank shall obtain a copy of the Form F.R.
U-l originally filed with the transferor bank and
retain the copy with its records of the transferee
account.
(j) Action for bank's protection. Nothing in this part
shall require a bank to waive or forego any lien or
prevent a bank from taking any action it deems necessary in good faith for its protection.
(k) Mistakes in good faith. A mistake in good faith in
connection with the extension or maintenance of credit shall not be a violation of this part.
Section 221.4—Agreements of Nonmember
Banks
(a) Banks that are not members of the Federal Reserve
System shall file an agreement that conforms to the
requirements of section 8(a) of the Act (See Form T-l
for domestic nonmember banks and Form T-2 for all
other nonmember banks) prior to extending any credit
secured by any nonexempt security registered on a
national securities exchange to persons subject to Part
220 of this Chapter, who are borrowing in the ordinary
course of business.
(a) Special purpose loans. A member bank and a
nonmember bank that is in compliance with section
221.4 of this part, may extend and maintain purpose
credit to brokers and dealers without regard to the
limitations set forth in sections 221.3 and 221.8 of this
part, if the credit is for any of the specific purposes and
meets the conditions set forth in paragraph (c) of this
section.
(b) Written notice. Prior to extending credit for more
than a day under this section, the bank shall obtain and
accept in good faith a written notice or certification
from the borrower as to the purposes of the loan. The
written notice or certification shall be evidence of continued eligibility for the special credit provisions until
the borrower notifies the bank that it is no longer
eligible or the bank has information that would cause a
reasonable person to question whether the credit is
being used for the purpose specified.
(c) Types of special purpose credit. The types of credit
that may be extended and maintained on a good faith
basis are as follows:
(1) Hypothecation loans. Credit secured by hypothecated customer securities that, according to written
notice received from the broker or dealer, may be
hypothecated by the broker or dealer under Securities and Exchange Commission ("SEC") rules.
(2) Temporary advances in
payment-against-delivery transactions. Credit to finance the purchase or
sale of securities for prompt delivery, if the credit is
to be repaid upon completion of the transaction.
(3) Loans for securities in transit or transfer. Credit
to finance securities in transit or surrendered for
transfer, if the credit is to be repaid upon completion
of the transaction.
(4) Intra-day loans. Credit to enable a broker or
dealer to pay for securities, if the credit is to be
repaid on the same day it is extended.
(5) Arbitrage loans. Credit to finance proprietary or
customer bona fide arbitrage transactions. For the
purpose of this section "bona fide arbitrage"
means:
716
Federal Reserve Bulletin • September 1983
(i) purchase or sale of a security in one market,
together with an offsetting sale or purchase of the
same security in a different market at nearly the
same time as practicable, for the purpose of taking
advantage of a difference in prices in the two
markets; or
(ii) purchase of a security that is, without restriction other than the payment of money, exchangeable or convertible within 90 calendar days of the
purchase into a second security, together with an
offsetting sale of the second security at or about
the same time, for the purpose of taking advantage of a concurrent disparity in the price of the
two securities.
(6) Distribution loans. Credit to finance the distribution of securities to customers.
(7) Odd-lot loans. Credit to finance the odd-lot
transactions of a person registered as an odd-lot
dealer on a national securities exchange.
(8) Emergency loans. Credit that is essential to meet
emergency needs of the broker-dealer business arising from exceptional circumstances.
security as defined in SEC Rule 3b-8 (17 CFR
240.3b-8) and that the credit will be used solely for
the purpose of financing the market making activity,
provided the credit is extended on a good faith loan
value basis.
(12) Third market maker loans. Credit to a dealer
who has given written notice to the bank that it is a
"qualified third market maker," as defined in SEC
Rule 3b-8 (17 CFR 240.3b-8), and that the credit will
be used solely for the purpose of financing positions
in securities assumed as a "qualified third market
maker," provided the credit is extended on a good
faith loan value basis.
(13) Block positioner credit. Credit to a dealer who
has given written notice to the bank that it is a
"qualified block positioner" for a block of securities, as defined in SEC Rule 3b-8 (17 CFR 240.3b-8),
and that the credit will be used to finance a position
in that block, provided the credit is extended on a
good faith loan value basis.
Section 221.6—Exempted Transactions
(9) Capital contribution loans.
(i) Credit that the Board has exempted by order
upon a finding that the exemption is necessary or
appropriate in the public interest or for the protection of investors, provided the Securities Investor
Protection Corporation certifies to the Board that
the exemption is appropriate; or
(ii) credit to a customer for the purpose of making
a subordinated loan or capital contribution to a
broker or dealer in conformity with the SEC's net
capital rules and the rules of the broker's or
dealer's Examining Authority, provided:
(A) the customer reduces the credit by the
amount of any reduction in the loan or contribution to the broker or dealer; and
(B) the credit is not used to purchase securities
issued by the broker or dealer in a public
distribution.
A bank may extend and maintain purpose credit
without regard to the provisions of this part if such
credit is extended:
(10) Loans to specialists. Credit extended to finance
the specialty security and permitted offset positions
of members of a national securities exchange who
are registered and acting as specialists on the exchange, provided the credit is extended on a good
faith loan value basis.
(f) to any customer, other than a broker or dealer, to
temporarily finance the purchase or sale of securities
for prompt delivery, if the credit is to be repaid in the
ordinary course of business upon completion of the
transaction;
(11) OTC market maker credit. Credit to a dealer
who has given written notice to the bank that it is a
"qualified OTC market maker" in an OTC margin
(a) to any bank;
(b) to any foreign banking institution;
(c) outside the United States;
(d) to an employee stock ownership plan (ESOP)
qualified under section 401 of the Internal Revenue
Code (26 U.S.C. 401);
(e) to any "plan lender" as defined in Part 207 of this
Chapter to finance such a plan, provided the bank has
no recourse to any securities purchased pursuant to
the plan;
(g) against securities in transit, if the credit is not
extended to enable the customer to pay for securities
purchased in an account subject to Part 220 of this
Chapter; or
Legal Developments
(h) to enable a customer to meet emergency expenses
not reasonably foreseeable, and if the extension of
credit is supported by a statement executed by the
customer and accepted and signed by an officer of the
bank acting in good faith. For this purpose, emergency
expenses include expenses arising from circumstances
such as the death or disability of the customer, or
some other change in circumstances involving extreme
hardship, not reasonably foreseeable at the time the
credit was extended. The opportunity to realize monetary gain or to avoid loss is not a "change in circumstances" for this purpose.
Section 221.7—Requirements for the List of
OTC Margin Stocks
(a) Requirements for inclusion on the list. Except as
provided in paragraph (d) of this section, an OTC
margin stock shall meet the following requirements:
(1) Four or more dealers stand willing to, and do in
fact, make a market in such stock and regularly
submit bona fide bids and offers to an automated
quotations system for their own accounts;
(2) The minimum average bid price of such stock, as
determined by the Board, is at least $5 per share;
(3) The stock is registered under section 12 of the
Act, is issued by an insurance company subject to
section 12(g)(2)(G) of the Act, is issued by a closed
end investment management company subject to
registration pursuant to section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8), is an
American Depository Receipt (ADR) of a foreign
issuer whose securities are registered under section
12 of the Act, or is a stock of an issuer required to
file reports under section 15(d) of the Act;
(4) Daily quotations for both bid and asked prices for
the stock are continuously available to the general
public;
(5) The stock has been publicly traded for at least six
months;
(6) The issuer had at least $4 million of capital,
surplus, and undivided profits;
(7) There are 400,000 or more shares of such stock
outstanding in addition to shares held benefically by
officers, directors or beneficial owners of more than
10 per cent of the stock;
(8) There are 1,200 or more holders of record, as
defined in SEC Rule 12g5-l (17 CFR 240.12g5-l), of
the stock who are not officers, directors or beneficial owners of ten per cent or more of the stock, or
the average daily trading volume of such a stock as
determined by the Board, is at least 500 shares; and
(9) The issuer or a predecessor in interest has been
in existence for at least three years.
717
(b) Requirements for continued inclusion on the list.
Except as provided in paragraph (d) of this section, an
OTC margin stock shall meet the following requirements:
(1) Three or more dealers stand willing to, and do in
fact make a market in such stock and regularly
submit bona fide bids and offers to an automated
quotations system for their own accounts;
(2) The minimum average bid price of such stocks,
as determined by the Board, is at least $2 per share;
(3) The stock is registered as specified in paragraph
(a)(3) of this section;
(4) Daily quotations for both bid and asked prices for
the stock are continuously available to the general
public;
(5) The issuer has at least $1 million of capital,
surplus, and undivided profits.
(6) There are 300,000 or more shares of such stock
outstanding in addition to shares held beneficially by
officers, directors, or beneficial owners of more than
10 per cent of the stock; and
(7) There continue to be 800 or more holders of
record, as defined in SEC Rule 12g5-l (17 CFR
section 240.12g5-l), of the stock who are not officers, directors, or beneficial owners of ten per cent
or more of the stock, or the average daily trading
volume of such stock, as determined by the Board,
is at least 300 shares.
(c) Removal from the list. The Board shall periodically
remove from the list any stock that:
(1) ceases to exist or of which the issuer ceases to
exist, or
(2) no longer substantially meets the provisions of
paragraph (b) of this section or section 221.2(j).
(d) Discretionary authority of Board. Without regard
to the other paragraphs of this section, the Board may
add to, or omit or remove from, the OTC margin stock
list, any equity security, if in the judgment of the
Board, such action is necessary or appropriate in the
public interest.
(e) Unlawful representations. It shall be unlawful for
any bank to make, or cause to be made, any representation to the effect that the inclusion of a security on
the list of OTC margin stocks is evidence that the
Board or the SEC has in any way passed upon the
merits of, or given approval to, such security or any
transactions therein. Any statement in an advertisement or other similar communication containing a
reference to the Board in connection with the list or
stocks on that list shall be an unlawful representation.
718
Federal Reserve Bulletin • September 1983
Section 221.8—Supplement, Maximum Loan
Value of Stock and Other Collateral
Part 265—Rules Regarding Delegation of
Authority
(a) Maximum loan value of margin stock. The maximum loan value of any margin stock, except options,
is fifty per cent of its current market value.
Section 265.2—Specific Functions Delegated to
Board Employees and to Federal Reserve
Banks
(b) Maximum loan value of nonmargin stock
other collateral. The maximum loan value of
gin stock and all other collateral except puts,
combinations thereof is their good faith loan
1. Section 265.2(f)(22)(iv) and (v) are revised, and
paragraph
(f) *** (vi) is added as set forth below:
and all
nonmarcalls, or
value.
(c) Maximum loan value of options. Except for purposes of section 221.5(c)(10) of this part, puts, calls,
and combinations thereof have no loan value.
AMENDMENTS
TO REGULATION
Y
The Board of Governors has amended its Regulation
Y—Bank Holding Companies and Change in Bank
Control, to include the activities of securities brokerage and margin lending on the list of nonbanking
activities that are generally permissible for bank holding companies.
Effective September 9, 1983, the Board amends
Regulation Y to read as set forth below:
Part 225—Bank Holding Companies and
Change in Bank Control
S e c t i o n 2 2 5 . 4 — N o n b a n k i n g activities
(a)***
(15) providing securities brokerage services, related
securities credit activities pursuant to the Board's
Regulation T (12 C.F.R. Part 220), and incidental
activities such as offering custodial services, individual retirement accounts, and cash management
services, provided
that the securities brokerage
services are restricted to buying and selling securities solely as agent for the account of customers and
do not include securities underwriting or dealing or
investment advice or research services.
AMENDMENTS TO RULES
REGARDING
DELEGATION OF AUTHORITY
The Board of Governors has amended its Rules Regarding Delegation of Authority to authorize Reserve
Banks to approve additional applications under section 4 of the Bank Holding Company Act.
Effective August 23, 1983, the Board amends Rules
Regarding Delegation of Authority as set forth below:
(22) ***
(iv) the application raises a significant policy
issue or legal question on which the Board has
not established its position; or
(v) with respect to bank holding company formations, bank acquisitions or mergers, the proposed transaction involves two or more banking
organizations:
(A) that rank among a State's ten largest
banking organizations in terms of total domestic banking assets; or
(B) each of which has more than $100 million
of total deposits in banking offices in the
same local banking market that, after consummation of the proposal, would control
over 10 per cent of total deposits in banking
offices in that local market; or
(vi) with respect to nonbank acquisitions:
(A) the nonbanking activities involved do not
clearly fall within activities that the Board
has designated as permissible for bank holding companies under § 225.4(a) of Regulation
Y; or
(B) the proposal would involve the acquisition by a banking organization that has total
domestic banking assets of $1 billion or more
of a nonbanking organization that appears to
have a significant presence in a permissible
nonbanking activity. 2
2. Effective August 22, 1983, section 265.2(f)(57) is
amended
^ *** as set forth below;
(57) Under sections 4(c)(8) and 5(b) of the Bank
Holding Company Act and section 225.4(b) of the
Board's Regulation Y, to approve applications by
a bank holding company to open additional offices
to engage in nonbanking activities for which the
particular bank holding company has previously
received approval pursuant to Board order, unless
one of the conditions specified in section
265.2(f)(22)(i), (ii), (iii), or (iv) is present.
2. While other situations may involve the issue of significant
presence, the Board regards, as a general guideline, any company that
ranks among the 20 largest independent firms in any industry as
having a significant presence.
Legal Developments
BANK HOLDING COMPANY AND BANK
MERGER
ORDERS ISSUED BY THE BOARD OF GOVERNORS
Orders Under Section 3 of Bank Holding
Company Act
Dakota Bankshares, Inc.,
Fargo, North Dakota
Order Approving
Acquisition
of a Bank
Dakota Bankshares, Inc., Fargo, North Dakota, a
bank holding company within the meaning of the Bank
Holding Company Act, has applied for the Board's
approval under section 3(a)(3) of the Act (12 U.S.C.
§ 1842(a)(3)) to acquire 80 percent of the outstanding
voting shares of Dakota Bank of Wahpeton, Wahpeton, North Dakota ("Bank"), a proposed de novo
bank. Applicant has also applied for Bank to become a
member of the Federal Reserve System.
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the Act (12 U . S . C . § 1842(c)).
Applicant is the fourth largest banking organization
in North Dakota, with deposits of $126.6 million.
Applicant controls three banking and two nonbanking
subsidiaries and holds a 19.1 percent interest in a
fourth bank. Applicant controls 2.7 percent of the total
deposits in commercial banks in the state. 1 Applicant's
principal controls three one-bank holding companies
which, together with Applicant, constitute a chain
banking organization.
On May 3, 1983, the Board denied a similar proposal
by Applicant to acquire Bank. (69 FEDERAL RESERVE
BULLETIN 442 (1983)). The Board found that Applicant and its related chain banking organization did not
meet the Board's Capital Adequacy Guidelines 2 generally applicable to bank holding companies and chain
banking organizations with consolidated assets of over
$150 million. Applicant's proposed debt would have
further leveraged the banking organization. Applicant
has submitted this proposal, which is revised to address the Board's concerns regarding the capital condition of Applicant and its related chain banking
organization.
719
In this proposal, Applicant's principal shareholder
will purchase additional capital stock of Applicant and
will finance this transaction by means other than the
use of debt. Applicant also has taken steps to minimize
the effects of certain federal funds transactions on its
consolidated capital position. Further, Applicant has
committed to refrain from paying dividends under
certain circumstances. With these modifications, the
Board has found that the primary and total capital
ratios of Applicant and the chain banking organization
of which Applicant is a member, are now above the
minimum levels specified in the Guidelines. Accordingly, financial, as well as managerial considerations,
are consistent with approval.
The Board concludes that the banking considerations involved in this proposal present factors consistent with approval. Moreover, the Board has considered the competitive effects of this proposal and for
the reasons recited in the Board's order of May 3,
1983, finds that no adverse competitive effects would
result from consummation of this proposal. Accordingly, the Board's judgment is that approval of the
application would be in the public interest and the
application to acquire Bank should be approved.
With respect to considerations relating to the convenience and needs of the community to be served, the
banking services to be offered by Bank would result in
an additional choice of banking facilities for area
residents. These factors are consistent with approval
of this application. Finally, in connection with Applicant's proposal to acquire Bank, the Board has determined that it is appropriate at this time for Bank to
become a member of the Federal Reserve System.
On the basis of the facts of record, the application to
acquire Bank is approved for the reasons summarized
above. Also, the application by Bank to become a
member of the Federal Reserve System is also approved. The transaction shall not be made before the
thirtieth calendar day following the effective date of
this Order and Bank shall not be opened for business
later than three months after the effective date of this
Order unless such periods are extended for good cause
by the Board, or by the Federal Reserve Bank of
Minneapolis acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 8, 1983.
V o t i n g for this action: Chairman V o l c k e r and G o v e r n o r s
Wallich, Partee, T e e t e r s , R i c e , and G r a m l e y . A b s e n t and not
voting: G o v e r n o r Martin.
1. Banking data are as of September 30, 1982.
2. Federal Reserve Board and Comptroller of the Currency Press
Release,
December
17,
1981. 68 FEDERAL RESERVE BULLETIN
(1982), reprinted in Federal Reserve Regulatory Service, 113-1506.
JAMES M C A F E E ,
33
[SEAL]
Associate
Secretary
of the Board
720
Federal Reserve Bulletin • September 1983
Equality Bankshares, Inc.,
Cheyenne, Wyoming
Order Approving Acquisition
Companies and Banks
of Bank Holding
Equality Bankshares, Inc., Cheyenne, Wyoming, a
registered bank holding company, has applied for the
Board's approval under section 3(a)(3) of the Bank
Holding Company
Act
("Act")
(12
U.S.C.
§ 1842(a)(3)) to acquire 100 percent of the voting
shares of Century Bankshares, Cheyenne, Wyoming
("Century"), Pioneer Bankshares, Cheyenne, Wyoming ("Pioneer"), and Jeffrey City State Bank, Jeffrey
City, Wyoming ("Jeffrey Bank"). Through this transaction Applicant also would indirectly acquire Century's subsidiary bank, First State Bank of Lyman,
Lyman, Wyoming ("First State Bank"), and Pioneer's
subsidiary bank, Pioneer Bank of Evanston, Evanston, Wyoming ("Pioneer Bank").
Notice of the application, affording interested persons opportunity to submit comments, has been given
in accordance with section 3 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's proposal represents a reorganization
and consolidation of the existing stock ownership
interests of Applicant's principals. Applicant currently
controls Equality State Bank, Cheyenne, Wyoming,
with total deposits of $19.2 million.1 Applicant's principals also control Jeffrey Bank, First State Bank, and
Pioneer Bank, which currently have deposits of $2
million, $11.2 million, and $8.3 million, respectively.
After consummation of this proposal, Applicant would
directly own all four banks, with total deposits of $40.7
million, representing less than 1 percent of total commercial bank deposits in the state. The Board has
concluded that consummation of this proposal would
have no appreciable effect upon the concentration of
banking resources in Wyoming.
First State Bank and Pioneer Bank both are located
in the Uinta County banking market. In that market,
First State Bank is the third largest of five banks,
controlling 7.7 percent of market deposits, and Pioneer
Bank is the fourth largest bank, controlling 5.0 percent
of market deposits. Together, First State Bank and
Pioneer Bank control 12.7 percent of aggregate market
deposits and would rank as the third largest of four
1. Banking data are as of March 31, 1983.
banking organizations. However, in view of the fact
that First State Bank's principals organized Pioneer
Bank de novo in 1981 and this proposal represents
only a transfer of the ownership of these individuals to
a corporation owned by the same individuals, the
Board does not regard the effects of the proposed
transaction on competition within the Uinta market to
be significant. In addition, none of the other banks
involved in this proposal competes in the same market
and Applicant's principals are not associated with any
other financial institutions. 2 Therefore, the Board has
concluded that consummation of the proposal would
not eliminate any significant competition or increase
the concentration of banking resources in any relevant
area. Accordingly, competitive considerations are
consistent with approval of the application.
The financial and managerial resources of Applicant, Century, Pioneer, their subsidiaries and Jeffrey
Bank are generally satisfactory and their prospects
appear favorable, especially in light of Applicant's
commitment to provide additional capital to Jeffrey
Bank. In this regard, Applicant would incur debt in
connection with this proposal for the purpose of
providing the capital injection. However, based on
past earnings of the various banks, Applicant would
appear to have sufficient financial flexibility to meet its
annual debt servicing requirements while permitting
all four banks to maintain adequate capital positions.
Therefore, considerations relating to banking factors
in regard to this proposal are consistent with approval.
Consummation of this proposal would reduce banking services available in Jeffrey City, but would have
the corresponding positive effect of introducing banking services to Evansville. Considerations relating to
the convenience and needs of the communities to be
served are consistent with approval of the application.
Accordingly, the Board has determined that consummation of the transaction would be 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 thirtieth calendar
day following the effective date of this Order or later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of
Kansas City, pursuant to delegated authority.
2. Applicant proposes to move Jeffrey Bank 280 miles from its
current location to Evansville, Wyoming, a suburb of Casper, Wyoming.
Legal Developments
By order of the Board of Governors, effective
August 10, 1983.
Voting for this action: G o v e r n o r s Wallich, Partee, R i c e ,
and Gramley. A b s e n t and not voting: Chairman V o l c k e r and
G o v e r n o r s Martin and Teeters.
JAMES M C A F E E ,
[SEAL]
Associate
Secretary of the Board
Mellon National Corporation,
Pittsburgh, Pennsylvania
Order Approving Acquisition
Company
of a Bank Holding
Mellon National Corporation, Pittsburgh, Pennsylvania ("Mellon"), a bank holding company within the
meaning of the Bank Holding Company Act, has
applied for approval under section 3(a)(5) of the Act
(12 U.S.C. § 1842(a)(5)) to merge with CCB Bancorp,
Inc., State College, Pennsylvania ("CCB"), and thereby to acquire its wholly owned subsidiary, Central
Counties
Bank,
State
College,
Pennsylvania
("Bank"). CCB does not engage in any nonbanking
activities, either directly or through subsidiaries.
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 application and all comments received, including those of the Denominational Ministry Strategy,
Pittsburgh, Pennsylvania ("Protestants"), have been
considered in light of the factors set forth in section
3(c) of the Act (12 U.S.C. § 1842(c)). In addition to
interposing numerous objections to the proposed acquisition, Protestants have requested that the Board
order a hearing or public meeting as a forum to
produce evidence of alleged violations of laws and
regulations by Mellon.
With regard to Protestants' request for a hearing,
section 3(b) of the BHC Act does not require the
Board to hold a hearing concerning an application
unless the appropriate banking authority makes a
timely written recommendation of denial of the application. In this case, no such recommendation of denial
has been received from the Pennsylvania Banking
Department, and thus no hearing is required.1 Under
the Board's Rules of Procedure, however, the Board
may order a hearing in its discretion. In order to
determine whether a hearing would be appropriate and
1. On July 1, 1983, the Pennsylvania Banking Department approved
the proposed acquisition of Bank by Applicant.
721
to avoid undue regulatory delays in the processing of
applications under the BHC Act, the Board's Rules
require that a hearing request include a statement of
why a written presentation would not suffice in lieu of
a hearing, identifying specifically any questions of
fact that are in dispute and summarizing the evidence
that would be presented at a hearing. (12 C.F.R.
§ 262.3(e)). The Protestants were afforded an opportunity to present facts and evidence justifying a hearing,
both in written submissions and at a private meeting
initiated by the Federal Reserve Bank of Cleveland.
Protestants' submissions do not identify any questions of fact in dispute or summarize or indicate the
evidence that they would present at a hearing. Rather,
Protestants' hearing request is based on allegations
which Protestants have not substantiated with any
facts or other evidence in their numerous submissions.
The Board has reviewed the submissions of Protestant
and Applicant, and other material in the record, including the reports of examination of Mellon Bank and
Applicant by the Office of the Comptroller of the
Currency and the Board. Based on its review of the
entire record in this case, the Board does not believe
that a hearing is warranted or appropriate. Accordingly, the Board hereby denies Protestants' hearing request.
The Board has considered Protestants' objections,
however, in reviewing the application. Protestants
contend that consummation of the proposal would
have adverse competitive effects in Pennsylvania in
violation of the antitrust laws of the United States.
Applicant, the largest banking organization in Pennsylvania, controls three banking subsidiaries with total
deposits of approximately $14.8 billion, representing
15.8 percent of total deposits in commercial banks in
the state. 2 CCB, the 30th largest banking organization
in Pennsylvania, controls Bank, with deposits of $480
million, representing 0.6 percent of total deposits in
commercial banks in the state. Upon consummation of
this transaction, Applicant's share of total deposits in
commercial banks in the state would increase by 0.6
percent. In view of the fact that in terms of banking
Pennsylvania is one of the nation's least concentrated
states, it is the Board's judgment that consummation
of this proposal would have no significant effect on the
concentration of banking resources in Pennsylvania.
Bank operates branches in the following five banking markets in central Pennsylvania: Altoona, State
College, Clinton, Union, and Mifflin.3 Applicant's
2. All deposit and market data are as of March 31, 1983. Consolidated financial data for Applicant include The Girard Company, Bala
Cynwyd, Pennsylvania, which was merged with Applicant on April 6,
1983.
3. Each of the five banking markets in which Bank operates consist
of the respective counties.
722
Federal Reserve Bulletin • September 1983
subsidiary banks operate in nine banking markets,
seven of which are in Pennsylvania and two of which
are in Delaware. None of Applicant's banking or
nonbanking subsidiaries competes in the same banking
markets in which Bank competes. 4 Accordingly, consummation of the proposed transaction would not
eliminate any significant amount of existing competition between Applicant and CCB in any relevant
market.
The Board also has examined the effect of the
proposal on potential or probable future competition in
the relevant banking markets of Applicant and CCB in
light of the Board's policy statement on market extension mergers. 5 In at least one market, the three-firm
concentration ratio is less than 75 percent and it is
therefore not considered concentrated under the
Board's guidelines. 6 In the four markets where CCB
competes that are regarded as concentrated under the
Board's guidelines, two are not considered attractive
for de novo entry, and with respect to each market
there are numerous large Pennsylvania banking organizations that are considered probable future entrants.
With respect to the seven Pennsylvania markets in
which Applicant operates, six are either not highly
concentrated or unattractive for de novo entry or both.
With respect to the Pittsburgh market, which is highly
concentrated 7 and in which Mellon is a leading firm,
there are numerous potential entrants. Moreover,
there is no evidence that CCB is a reasonably likely
potential entrant into any of these markets, and would
not be so considered under the Board's guidelines.
Thus, the Board finds that intensive examination is not
required under the Board's proposed policy statement
in any of the 14 markets in which Applicant and CCB
operate. Based on the above and all the facts of
record, it does not appear that consummation of this
proposal would have a significantly adverse effect on
potential competition in any relevant market.8
Accordingly, the Board concludes that consummation of the proposed transaction would not violate the
antitrust laws and that competitive considerations are
consistent with approval of the application.
The financial and managerial resources and future
prospects of Applicant and its subsidiaries and CCB
and Bank are regarded as generally satisfactory. 9
Thus, considerations relating to banking factors are
consistent with approval of the application.
In considering the effects of the proposed acquisition on the convenience and needs of the community
to be served, the Board has also considered the record
of Applicant's banking subsidiaries in meeting the
credit needs of their communities as provided in the
Community Reinvestment Act ("CRA") (12 U.S.C.
§ 2901). 10 In so doing, the Board has examined the
objections of Protestants relating to Applicant's record
of performance under CRA, and particularly the record of Mellon Bank. Specifically, Protestants allege
that Mellon Bank has failed to respond to the credit
needs of the community and has diverted deposits of
the local community into foreign lending activities.
4. While a data processing subsidiary of Applicant derives some
business from Bank's markets, the amount of this competition is not
considered significant since the relevant market for data processing
services is regional or national.
5. 45 Federal Register 9017 (March 3, 1982).
6. In the Altoona and State College markets, thrift institutions hold
40 and 33 percent, respectively, of total market deposits of banks and
thrift institutions combined. If thrift deposits are included in calculating the concentration ratios in those markets, the three-firm concentration ratio is significantly below 75 percent in these markets.
7. In the Pittsburgh market, thrift institutions control 30 percent of
combined total market deposits. The three-firm concentration ratio in
Pittsburgh is reduced to 59.7 percent if thrift deposits are included in
the calculation.
8. While CCB could establish a de novo bank in the Delaware
markets in which Applicant operates a subsidiary bank, under Delaware law the operations of a bank established by an out-of-state bank
holding company are restricted to commercial and international
business. Applicant's Delaware subsidiary is exempt from these
restrictions because it was " g r a n d f a t h e r e d " under Delaware law.
Thus, any Delaware subsidiary established by CCB would not be an
effective competitor of Applicant's Delaware subsidiary.
9. Protestants have accused Applicant of various types of criminal
and collusive activities, including violations of the antitrust laws in
arranging participations in foreign loans and violations of the Pennsylvania Racketeer Influenced and Corrupt Organization Act. Protestants have submitted no facts to substantiate these charges, and there
is nothing in the record to warrant a finding of any violation of these
statutes.
Protestants also have alleged that Mellon has violated the B H C
Act by holding more than 5 percent of the voting shares of nonbanking
companies. While Mellon Bank may hold, in a fiduciary capacity
through its trust department, more than 5 percent of the voting shares
of nonbanking interest, the record does not indicate that Mellon
illegally holds more than 5 percent of the voting shares of any
company engaged in nonbanking activities.
10. The CRA requires the Board to assess the record of Applicant's
banking subsidiaries in helping to meet the credit needs of their entire
communities, including low- and moderate-income neighborhoods,
consistent with safe and sound operations, and to take that record into
account in its evaluation of this application.
11. Protestants cite Mellon Bank's role in the bankruptcy of Mesta
Machine Corporation as evidence of its unwillingness to support local
industry by extending credit. From the record, it appears that Mellon
The Board has reviewed the submissions of Protestant and Applicant regarding these issues. The Board
has also considered the conclusions of the Office of the
Comptroller of the Currency, which conducted an
examination of Mellon Bank that included an assessment of Mellon Bank's record of meeting the requirements of CRA.
Protestants allege that Mellon Bank is systematically contributing to the economic decline of the Monongahela Valley by emphasizing foreign lending at the
expense of local credit needs. In support of this
allegation, Protestants assert that foreign lending represents 26 percent of Mellon's assets, and have submitted data to demonstrate the extent of Mellon
Bank's foreign lending."
Legal Developments
In response, Applicant states that much of its foreign lending has resulted from overseas expansion by
Mellon Bank's domestic customers, many of which
are large multi-national corporations. Applicant contends that its foreign loans are not funded with deposits from southwestern Pennsylvania and that it has
more foreign deposits than foreign loans outstanding.
Applicant also states that a large part of Mellon Bank's
international assets are bankers' acceptances which
are not customarily funded by deposits. Finally, Applicant states that it is aware of the economic plight of the
Monongahela Valley, and states that it will make
available its resources to revitalize the area and is
open to all reasonable requests for support that can be
provided by Mellon Bank.
A review of Mellon Bank's overall CRA record
demonstrates that it is not systematically denying
business or housing credit to its local community,
including the Monongahela Valley. There is no evidence of prescreening to discourage loan applicants or
of discriminatory credit practices. Rather, Mellon
Bank has contributed significantly to development
projects within the Pittsburgh community through its
Community Development Division and its Branch
Management System. Specifically, the record shows
that Mellon Bank has played an active role in extending urban development loans, industrial development
loans and loans to civic and religious organizations.
Financial support has also been provided by Mellon
Bank through the purchase of local municipal obligations. In addition, Mellon Bank is a leader in extending
student loans and loans under the Small Business
Administration programs.
While Mellon Bank has a large portion of its assets
in foreign loans, when considered in light of Mellon
Bank's active involvement in community development
in the Pittsburgh area and its expressed interest in
providing financial support to revitalize the Monongahela Valley, the Board is unable to conclude that
Mellon Bank's foreign lending has caused it to ignore
local credit needs. The Board also does not find any
evidence in the record to support Protestants' claim
that Applicant and Mellon Bank are engaged in a
conspiracy to close local industrial firms in the Pittsburgh area.
With respect to other convenience and needs considerations, approval of the application would result in
improved services for Bank's customers. Specifically,
following consummation, Applicant plans to introduce
723
asset-based lending programs, a health care financing
program, and its small base rate lending program to
provide loans to small businesses at a special rate. In
addition, Applicant plans to sell Bank's mortgages in
the secondary market to improve the flow of mortgage
funds.
Thus, based on its review of the facts of record,
including Mellon Bank's performance with respect to
factors to be considered under CRA, the Board concludes that considerations relating to the convenience
and needs of the community to be served are consistent with approval of the application.
The transaction shall not be consummated before
the thirtieth calendar day following the effective date
of this Order or later than three months after the
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Cleveland acting pursuant to
delegated authority.
By order of the Board of Governors, effective
August 15, 1983.
Voting for this action: G o v e r n o r s Wallich, Partee, R i c e ,
and Gramley. V o t i n g against this action: G o v e r n o r T e e t e r s .
A b s e n t and not voting: Chairman V o l c k e r and G o v e r n o r
Martin.
WILLIAM W . WILES,
[SEAL]
Dissenting Statement
Secretary
of Governor
of the Board
Teeters
I would deny this application on the grounds that the
proposed combination of these bank holding companies would have a significantly adverse effect on
probable future competition in four of the five markets
where CCB competes. I believe that Mellon National
Corporation has the capacity to enter each of these
markets on a de novo or foothold basis. In light of the
concentrated nature of these markets, the elimination
of Mellon National Corporation as a probable future
entrant is substantially anticompetitive.
I believe that the Board's action approving this
application represents another situation in which the
Board's proposed guidelines relating to probable future competition permit combinations of bank holding
companies that have substantially anticompetitive
consequences. As indicated in my previous dissenting
statements in the Board's orders approving the applications of Mellon National Corporation to acquire The
G i r a r d C o m p a n y , 6 9 FEDERAL RESERVE BULLETIN 3 0 2
Bank extended credit to Mesta in recent years despite the fact that
Mesta had been experiencing financial difficulties. It was only after
Mesta suspended a significant portion of its operations that Mellon
Bank sought repayment of its loans. The record does not support a
finding that Mellon Bank was responsible for Mesta's failure.
(1983), Pittsburgh National Corporation to consolidate
with Provident National Corporation, 69 FEDERAL
RESERVE BULLETIN 51 (1983), and Banc One Corporation to merge with Winters National Corporation, 69
724
Federal Reserve Bulletin • September 1983
F E D E R A L RESERVE B U L L E T I N 3 7 9 ( 1 9 8 3 ) , I c o n t i n u e t o
believe that the Board should develop and apply standards that more realistically reflect the adverse effects
of the elimination of probable future competition.
Accordingly, I dissent from the Board's decision
regarding this application.
August 15, 1983
Mercantile Texas Corporation,
Dallas, Texas
Order Approving Merger of Bank Holding
Companies
Mercantile Texas Corporation, Dallas, Texas ("Mercantile"), a bank holding company within the meaning
of the Bank Holding Company Act of 1956, (12 U.S.C.
§ 1841 et seq.) has applied for the Board's approval
under section 3(a)(5) of the Bank Holding Company
Act (12 U.S.C. § 1842(a)(5)), to merge with FirstWichita Bancshares, Inc., ("First-Wichita") and
thereby indirectly to acquire The First-Wichita National Bank of Wichita Falls and Southwest National
Bank of Wichita Falls, all of Wichita Falls, Texas.
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the Act.
Mercantile, the fifth largest commercial banking
organization in Texas, controls 27 banks with aggregate deposits of $7.5 billion, representing 5.7 percent
of the total deposits in commercial banks in Texas. 1
First-Wichita, the twentieth largest commercial banking organization in Texas, controls two banks with
aggregate deposits of $440.7 million, representing 0.34
percent of total deposits in commercial banks in Texas. Consummation of the proposed transaction would
increase Applicant's share of the total deposits in
commercial banks in the state to 6.1 percent and its
rank would remain unchanged. Although the size of
the organizations involved is significant, approval of
this proposal will have little effect on statewide concentration or banking structure. Accordingly, the
Board concludes that consummation of the proposal
would not have a significant effect on the concentration of banking resources in Texas. Because Mercan-
1. Deposit data are as of December 31, 1982.
tile and First-Wichita do not operate any subsidiary
banks in the same market, consummation of the proposal would not eliminate existing competition in any
relevant market.
The Board has examined the effect of the proposed
merger of Mercantile and First-Wichita upon probable
future competition in the relevant geographic markets
in light of the Board's guidelines on probable future
competition. 2 Because of First-Wichita's size and its
history of limited geographic expansion, the Board
does not consider First-Wichita to be a likely future
entrant in the markets in which Mercantile is represented. Accordingly, the Board concludes that the
proposal would not have substantial adverse effects on
probable future competition in any of the markets in
which First-Wichita does not operate.
First-Wichita operates in the Wichita Falls banking
market.3 In view of Mercantile's size, substantial
managerial and financial resources and previous history of expansion, it appears to be a potential entrant
into the Wichita Falls market. First-Wichita is the
largest commercial banking organization in the market
and controls 38.5 percent of the total deposits in
commercial banks in the market. The Wichita Falls
market is highly concentrated, with the three largest
commercial banking organizations controlling 79.2
percent of the market. There are eleven commercial
banking organizations operating in the Wichita Falls
banking market, and there are numerous other probable future entrants into the Wichita Falls market.
These facts mitigate the Board's concerns regarding
the elimination of Mercantile as a probable future
entrant into the Wichita Falls market. On the basis of
the above and other facts of record, the Board concludes that consummation of the proposed merger
would not have such adverse effects on probable
future competition in the relevant market as to warrant
denial of the proposal.
The financial and managerial resources and future
prospects of Mercantile, First-Wichita, and their subsidiary banks are generally satisfactory. Accordingly,
considerations relating to banking factors are consistent with approval. Although there is no evidence in the
record indicating that the banking needs of the community to be served are not being met, consummation of the
2. "Proposed Policy Statement of the Board of Governors of the
Federal Reserve System for Assessing Competitive Factors Under the
Bank Merger Act and the Bank Holding Company A c t . " 47 Federal
Register 9017 (March 3, 1982). Although the proposed policy statement has not been approved by the Board, the Board is using the
policy guidelines in its analysis of the effect of a proposal on probable
future competition.
3. The Wichita Falls banking market is approximated by the
Wichita Falls SMSA.
Legal Developments
merger will result in some additional services for FirstWichita's customers. Accordingly, considerations relating to the convenience and needs of the community
to be served also are consistent with approval. Thus,
based on the foregoing and other facts of record, the
Board has determined that consummation of the proposed transaction would be in the public interest and
that the application should be approved.
On the basis of the record, the application is approved for the reasons summarized above. The acquisition of shares 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 by the Board
or by the Federal Reserve Bank of Dallas, acting
pursuant to delegated authority.
By Order of the Board of Governors, effective
August 17, 1983.
Voting for this action: G o v e r n o r s Wallich, Partee, R i c e ,
and Gramley. V o t i n g against this action: G o v e r n o r T e e t e r s .
A b s e n t and not voting: Chairman V o l c k e r and G o v e r n o r
Martin.
JAMES M C A F E E ,
[SEAL]
Dissenting Statement
Associate
Secretary
of Governor
of the Board
Teeters
I would deny this application on the grounds that the
proposed combination of these bank holding companies would have a significantly adverse effect on
probable future competition in the Wichita Falls banking market. I believe that Mercantile Texas Corporation has the capacity to enter the Wichita Falls banking
market on a de novo or foothold basis. In light of the
concentrated nature of the market and the share of
commercial bank deposits held by First-Wichita, the
elimination of Mercantile Texas Corporation as a
probable future entrant is substantially anticompetitive.
I believe that the Board's action approving this
application represents another situation in which the
Board's proposed guidelines relating to probable future competition permit combinations of bank holding
companies that have substantially anticompetitive
consequences. As I have previously indicated, I continue to believe that the Board should develop and
apply standards that more realistically reflect the
adverse effects of the elimination of probable future
competition.
Accordingly, I dissent from the Board's decision
regarding this application.
August 17, 1983
725
Orders Under Section 4 of Bank Holding
Company Act
The Chase Manhattan Corporation,
New York, New York
Order Approving Acquisition
Broker
of Retail
Discount
The Chase Manhattan Corporation, New York, New
York ("Chase"), a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as
amended (12 U.S.C. § 1841, et seq.) (the "Act"), has
applied for the Board's approval under section 4(c)(8)
of the Act (12 U.S.C. § 1843(c)(8) and section
225.4(b)(2) of the Board's Regulation Y (12 C.F.R.
§ 225.4(b)(2)), to acquire 100 percent of the voting
shares of Rose & Company Investment Brokers, Inc.,
Chicago, Illinois ("Rose"), a company that engages in
discount retail securities brokerage, margin lending,
and related activities.
Notice of the application, affording interested persons an opportunity to submit comments and views,
was duly published in the Federal RegisterThe
time
for filing comments and views has expired, and the
Board has considered the application and all comments received in light of the factors set forth in
section 4(c)(8) of the Act.
Chase is a bank holding company by virtue of its
control of The Chase Manhattan Bank, N.A., New
York, New York ("Chase Bank"), and The Chase
Manhattan Bank (USA), National Association, Wilmington, Delaware. Chase holds total consolidated
assets of $81.5 billion, and is the second largest
commercial banking organization in New York and the
third largest bank holding company in the United
States. 2 Chase also engages, through certain of its
subsidiaries, in various permissible nonbank activities
throughout the United States and abroad, including
commercial financing, factoring, leasing, mortgage
banking, and credit-related insurance activities.
Rose, a "discount" retail securities broker, is engaged in the purchase and sale of securities solely as
agent upon the order and for the account of customers,
extending securities credit in conformity with the
Board's Regulation T, and various incidental activities. 3 Rose is registered as a broker-dealer with the
1. 48 Federal Register 23485 (May 25, 1983).
2. Asset data and rankings are as of June 30, 1983.
3. Rose carries customer credit balances (paying interest on some
of them), and provides to its brokerage customers securities custodial
services and access to IRA accounts, for some of which Rose acts as
trustee in conformity with sections 401 and 408 of the Internal
Revenue Code. In addition, Rose borrows securities in connection
726
Federal Reserve Bulletin • September 1983
Securities and Exchange Commission, is qualified to
do business in all fifty States and the District of
Columbia, and is a member or participant of various
national and regional securities exchanges and clearing
organizations, including the New York Stock Exchange, Inc., the National Association of Securities
Dealers, Inc., and the Midwest Securities Trust Company/Midwest Clearing Corporation. Rose's customer
accounts are insured by the Securities Investor Protection Corporation. Rose offers its services nationwide
from its principal office in Chicago, Illinois, and from
additional offices in Boston, Houston, Los Angeles,
Pittsburgh, and Washington, D.C. 4 Rose has plans to
open additional offices in New York and San Francisco.
Following consummation of this acquisition, Chase
proposes to expand Rose's services to include affording Rose's customers access to their net free balances
awaiting investment through checks or debit cards
under an arrangement with an unaffiliated commercial
bank, and access to a "sweep" arrangement under
which Rose's customers may invest portions of such
balances in unaffiliated money market funds. In addition, Rose proposes to respond to customer requests
for quotations on municipal bonds held by an operating subsidiary of Chase Bank on a nonpreferential
basis. 5 Following the acquisition, Rose will not provide investment advice, solicit orders to purchase or
sell particular securities, or engage in securities underwriting or market-making activities.
Section 4(c)(8) of the Act authorizes a bank holding
company to acquire shares of a company that engages
in activities determined by the Board (by order or
regulation) to be so closely related to banking or
managing or controlling banks as to be a proper
incident thereto. In its order approving the application
of Bank America Corporation, San Francisco, California, to acquire the Charles Schwab Corporation, 6 the
Board determined that retail discount securities brokerage and extending securities credit in conformity
with the Board's Regulation T are "closely related to
banking" within the meaning of section 4(c)(8) of the
Act. 7 In BankAmerica, the Board also determined that
carrying customer credit balances awaiting investment
(paying interest on some of them), providing access to
such balances by way of third-party payment devices
under arrangements with unaffiliated commercial
banks, providing securities custodial services, and
providing access to IRA accounts and "sweeps" to
unaffiliated money market funds are incidental to the
provision of permissible retail securities brokerage and
margin credit services. 8 At the same time, the Board
also determined that retail securities brokerage —
purchasing and selling securities without recourse,
solely upon the order and for the accounts of customers — is not an activity prohibited to member bank
affiliates by the provisions of the Glass-Steagall Act. 9
Based upon its review of this application and the
substantial similarity between the proposed activities
and those previously approved by the Board in its
BankAmerica Order, the Board adopts and reaffirms
its prior determinations and concludes that the proposed retail discount securities brokerage and margin
lending activities involved in this application are closely related to banking and not proscribed by the provisions of the Glass-Steagall Act. In addition, the Board
adopts and reaffirms its prior determination in BankAmerica that the incidental activities involved in this
application are incidental to permissible margin lending and securities brokerage activities, and are themselves closely related to banking. 10
with customers' short sales f r o m Midwest Securities Trust Company/
Midwest Clearing Corporation ( " M i d w e s t " ) and lends customers'
margined securities to Midwest on a " m a r k e d to m a r k e t " , cashsecured basis.
4. R o s e ' s securities borrowing and lending activities are conducted
exclusively f r o m the Chicago office on behalf of all of R o s e ' s offices.
5. Applicant states that in responding to customer inquiries, Rose
will not make any recommendations concerning the suitability of any
municipal securities, nor will it encourage the purchase of securities
held in inventory by an affiliate in preference to other municipal
securities.
114-116. Section 20 of the Glass-Steagall Act prohibits the affiliation
of any bank that is a m e m b e r of the Federal Reserve System with any
corporation or similar organization that is "engaged principally in the
issue, flotation, underwriting, public sale, or distribution" of securities. (12 U . S . C . § 377).
10. The Board recognizes that securities borrowing and lending
activities were not specifically discussed in its order in
BankAmerica
Corporation. H o w e v e r , based on the record of this application, the
Board finds that these activities are both closely related to banking
and incidental to permissible discount securities brokerage activities
and the extension of margin credit in conformity with Regulation T.
See 12 C . F . R . § 220.6(h) (1982); 12 C . F . R . § 220.16, 48 Federal
Register 23161, 23171 (May 24, 1983).
7. The B o a r d ' s order was recently affirmed by the United States
Court of Appeals for the Second Circuit. See Securities
Industry
Association
v. Board of Governors of the Federal Reserve
System,
N o . 83-4019 (2d Cir. July 15, 1983).
8. In a recent order, the Board reaffirmed its previous findings that
offering securities custodial services and carrying customer credit
balances awaiting investment (and paying interest on some of them)
are both closely related to banking and incidental to permissible
securities brokerage and margin lending activities. See United Jersey
Banks,
6 9 FEDERAL RESERVE BULLETIN 565 (1983). O n F e b r u a r y 22,
1983, the Board published for comment a proposed rule that would
add discount securities brokerage and securities credit lending to the
list of nonbanking activities designated in Regulation Y as generally
permissible for bank holding companies. (48 Federal Register 7746
(February 24, 1983)). The proposed rule, with minor modifications,
was adopted by the Board on August 10, 1983.
9 . BankAmerica
6 . BankAmerica
Corporation,
(1983).
6 9 F E D E R A L R E S E R V E B U L L E T I N 105
Corporation,
6 9 FEDERAL RESERVE B U L L E T I N a t
Legal Developments
In determining whether the proposed activities are
"a proper incident to banking or managing or controlling banks", section 4(c)(8) of the Act further requires
the Board to consider whether performance of the
proposed activities by an affiliate of a bank holding
company "can reasonably be expected to produce
benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking
practices." (12 U.S.C. § 1843(c)(8)). On the basis of
the record of the application, the Board finds that
consummation of this proposal can reasonably be
expected to produce significant public benefits in the
form of increased competition, greater convenience,
and increased efficiency in the provision of retail
securities brokerage services, and that these benefits
outweigh possible adverse effects.
Based on the facts of record, it appears that the
affiliation of Rose with Chase may reasonably be
expected to result in increased competition, consumer
convenience, and efficiency in the provision of retail
securities brokerage services. By affording Rose access to Chase's extensive office network and substantial managerial, technical, and capital resources, consummation of this proposal can reasonably be
expected to significantly strengthen Rose as a competitor in the nationwide market for retail securities
brokerage services, and to make discount brokerage
services more conveniently accessible to the public.
Since Rose's brokerage commissions are substantially
below the publicly announced commission rates of the
larger and better known "full-line" brokerage firms,
strengthening Rose as a competitor is likely to result in
additional competitive pressure on full-line brokerage
firms to "unbundle" brokerage services from research
and advisory services and to lower their publicly
announced brokerage commission rates. In addition,
by permitting Chase and Rose to share their respective
marketing, managerial, and technical resources, consummation of the proposal may be expected to produce increased efficiency in their provision of brokerage and related financial services to the public.
There is no evidence in the record to indicate that
approval of this application would result in an undue
concentration of resources, decreased or unfair competition, unsafe or unsound banking practices, or other
adverse effects in any market. In this regard, because
Rose would not deal in securities for its own account
and would not promote any particular security through
the provision of investment advice or otherwise, it
would not have the "salesman's stake" or promotional interest in the success of any particular issue of
securities that led Congress to mandate a separation of
727
banking from certain types of securities-related activities. Accordingly, the Board believes that performance of the limited types of securities-related activities
involved in this proposal by a subsidiary of a bank
holding company is consistent with the public interest
and the Glass-Steagall and Bank Holding Company
Acts.
Based upon the foregoing and other considerations
in the record, the Board has determined that consummation of this proposal can reasonably be expected to
produce benefits to the public that outweigh adverse
effects, and that the balance of the public interest
factors that the Board is required to consider under
section 4(c)(8) of the 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 (12 C.F.R.
§ 225.4(c)) 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 thereunder, or to prevent evasions
thereof.
Because of the extensive consideration accorded to
Rose's securities brokerage, margin lending, and incidental activities in the context of this application, and
having determined that the public interest considerations of section 4(c)(8) of the Act favor approval of
Chase's proposal, the Board has determined that further applications by Chase to extend Rose's retail
discount securities brokerage, margin lending, and
incidental activities to additional offices may be processed in the same manner as other de novo applications under the provisions of section 225.4(b)(1) of
Regulation Y (12 C.F.R. § 225.4(b)(1)). Authority is
hereby delegated to the Federal Reserve Bank of New
York to take action on such notices properly filed, as
prescribed in that section.
The proposed activities shall not commence later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of New
York acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 10, 1983.
Voting for this action: Governors Wallich, Partee, Rice,
and Gramley. A b s e n t and not voting: Chairman Volcker and
Governors Martin and Teeters.
JAMES M C A F E E ,
[SEAL]
Associate
Secretary
of the Board
728
Federal Reserve Bulletin • September 1983
Fidelcor, Inc.,
Rosemont, Pennsylvania
Order Approving Retention
of Assets
Fidelcor, Inc., Rosemont, Pennsylvania, a bank holding company within the meaning of the Bank Holding
Company Act ("Act"), has applied for the Board's
approval under section 4(c)(8) of the Act (12 U.S.C.
§ 1843(c)(8)) and section 225.4(b)(2) of the Board's
Regulation Y (12 C.F.R. § 225.4(b)(2)) to retain the
assets of the Philadelphia office of Dorman & Wilson,
Inc., White Plains, New York ("D&W"), that were
acquired by Applicant's wholly-owned subsidiary,
Latimer & Buck, Inc., Philadelphia, Pennsylvania
("L&B"). D&W primarily originates and services
commercial mortgages on behalf of investors whose
customers are real estate developers, builders and
owners of commercial property. 1 These activities have
been determined by the Board to be closely related to
banking (12 CFR § 225.4(a)(1) and (3)).
Notice of the application, affording interested parties an opportunity to submit comments on the public
interest factors has been duly published (48 Federal
Register 24459 (1983)). The time for filing comments
has expired, and the Board has considered the application and all comments received in light of the public
interest factors set forth in section 4(c)(8) of the Act.
By this application, Applicant seeks to retain the
assets of the Philadelphia office of D&W which it
acquired on March 22, 1983, without prior Board
approval under section 4 of the Act. The record
indicates that Applicant acted upon the advice of one
of its officers, who apparently misconstrued the
Board's regulation, and believed the acquisition of the
D&W office was permitted without prior approval
pursuant to the Board's interpretation of Regulation Y
found in 12 C.F.R. § 225.132. Upon notification by the
Reserve Bank that an application under the Act was
required, Applicant promptly filed this application and
otherwise cooperated fully with the staff of the Reserve Bank in the resolution of this matter. In light of
these facts and other facts in the record evidencing
Applicant's intent to comply with the requirements of
the Act and the Board's regulations, the Board has
determined that the circumstances surrounding this
matter do not reflect so adversely upon Applicant's
1. As part of the acquisition, L&B acquired the commissions due
on eight leases. L & B ' s obligations regarding these leases are the
collection of rent, deduction of a 5 percent commission and remittance
of the balance to the lessors. Upon the final expiration of the leases,
Applicant has stated that it will not seek new lessees for the premises
subject to the leases or accept additional responsibilities with respect
to the leases. These activities are permissible under section
225.4(a)(6)(h) (12 C . F . R . § 225.4(a)(6)(ii)) of Regulation Y. However,
management as to warrant denial of the application.
Applicant, with total assets of $4.1 billion, 2 recently
received Board approval to merge with Southeast
National Bancshares of Pennsylvania, Inc., Malvern,
Pennsylvania. 3 Upon consummation of the approved
merger, the consolidated organization will have total
assets of $4.9 billion. Applicant has three nonbanking
subsidiaries that engage in mortgage banking activities; Fidelcor Mortgage Corporation, Latimer & Buck
Mortgage Company, and L&B. Of these, only L&B
engages in commercial mortgage activities; the other
two deal solely in residential mortgages. L&B and the
Philadelphia office of D&W both originate and service
commercial mortgages in the regional market approximated by Pennsylvania, southern New Jersey, and
Delaware. 4 Prior to its acquisition of D&W, L&B
serviced mortgages totaling $357.5 million which represented 5.3 percent of the commercial mortgages
serviced by commercial banks and mutual savings
banks in the market. D&W serviced mortgages totaling $120 million which represented 1.8 percent of the
commercial mortgages serviced by commercial banks
and mutual savings banks in the market. Thus, this
acquisition eliminated existing competition between
Applicant and D&W. The Board, however, does not
consider the elimination of competition to be significant because of certain facts of record including the
following.
First, there are numerous competitors for commercial mortgage servicing in the market, including 484
commercial banks and mutual savings banks. In addition to commercial banks and mutual savings banks,
savings and loan associations and mortgage companies
also originate and service commercial mortgages in the
market. Therefore, the percentage of commercial
mortgages serviced by Applicant would be even smaller if all competitors in the market were considered. In
addition, the regional market for commercial mortgages is not concentrated 5 and is characterized by low
barriers to entry. Accordingly, the Board concludes
that this acquisition did not have any significant effects
on competition in the commercial mortgage market.
Furthermore, there is no evidence in the record to
indicate that the transaction resulted in unfair competi-
Applicant does not intend to engage in the leasing of real property and
plans only to service these eight leases until their expiration. Thus, the
Board concludes that this application need not include a request for
authority to engage in leasing activities pursuant to section
225.4(a)(6)(h) of Regulation Y.
2. Banking data are as of December 31, 1982.
3. 6 9 FEDERAL RESERVE B U L L E T I N 4 4 5 (1983).
4. The southern N e w Jersey portion of the market consists of that
section of N e w Jersey which is part of the third Federal Reserve
District.
5. The ten largest commercial banks and mutual savings banks hold
49.3 percent of the commercial mortgages serviced by these institutions.
Legal Developments
tion, conflicts of interests, unsound banking practices
or any other adverse effects. With respect to the public
benefits, Applicant expects that lower charges to
customers will result from the efficiencies in management that will be realized from this acquisition. On the
basis of these and other facts of record, the Board
concludes that the benefits to the public that will result
from Applicant's retention of the assets of the Philadelphia office of D&W outweigh whatever adverse
effects on competition resulted from the acquisition.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the balance of the public interest factors the Board is
required to consider under section 4(c)(8) is favorable.
Accordingly, the application is hereby approved. This
determination is subject to the conditions set forth in
§ 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 9, 1983.
Voting for this action: Chairman V o l c k e r and G o v e r n o r s
Wallich, Partee, T e e t e r s , R i c e , and Gramley. A b s e n t and not
voting: G o v e r n o r Martin.
JAMES M C A F E E ,
[SEAL]
Associate
Secretary
of the Board
First Interstate Bancorp,
Los Angeles, California
Order Approving Application to Engage in Certain
Futures Commission Merchant
Activities
First Interstate Bancorp, Los Angeles, California, a
bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (12 U.S.C.
§ 1841 et seq.) (the "Act"), has applied for the Board's
approval under section 4(c)(8) of the Act (12 U.S.C.
§ 1843(c)(8)) and section 225.4(b)(2) of the Board's
Regulation Y (12 C.F.R. § 225.4(b)(2)) to engage
through its subsidiary, F.I. Futures Corporation, Los
Angeles, California ("Futures"), in acting as a futures
commission merchant ("FCM") for nonaffiliated persons, for the execution and clearance of certain futures
contracts on major commodity exchanges. 1 Such con-
tracts would cover U.S. government securities, negotiable money market instruments and foreign exchange.
Notice of the application, affording interested persons an opportunity to submit comments and views on
the relation of the proposed activity to banking and on
the balance of the public interest factors regarding the
application, has been published (48 Federal Register
20139 (1983)). The time for filing comments and views
has expired and the Board has considered the application and all comments received in light of the public
interest factors set forth in section 4(c)(8) of the Act.
Applicant, with total domestic assets of $28.1 billion, is a bank holding company by virtue of its control
of 22 banks located in an 11 state area including
Arizona, California, Colorado, Idaho, Nevada, New
Mexico, Oregon, Utah, Washington, Wyoming, and
Montana. Applicant's lead banking subsidiary, First
Interstate Bank of California ("FICAL"), is the fifth
largest banking organization in California with $13.3
billion in deposits, representing 8.04 percent of total
commercial bank deposits in the state. 2 Applicant
engages through subsidiaries in various nonbanking
activities that are permissible for bank holding companies.
In order to approve an application submitted pursuant to section 4(c)(8) of the Act, the Board must first
determine that the proposed activity is closely related
to banking or managing or controlling banks. On
several prior occasions, the Board has determined that
FCM activities with respect to futures contracts regarding U.S. government securities, money market
instruments, and foreign exchange were closely related to banking.3 Upon consideration of all the facts of
record, the Board has determined that Futures' proposed activities as an FCM are closely related to
banking.
FICAL has long participated in the cash and forward markets for foreign exchange for its own account
and the account of customers. Since Applicant already
has extensive experience in these markets, acting as
an FCM in the futures market for this commodity
would be an integral adjunct to these present services,
reconciliation of trades and communication linkage between customers and the exchange floor in connection with its proposed FCM
services. These functions would be performed for Futures' customers
only as part of its execution services and would not be offered
separately or on a fee basis. It appears that such services are
incidental to the provision of Futures' FCM activities. National
Courier Association v. Board of Governors, 516 F.2d 1229, 1241 (D.C.
Cir. 1975).
2. All banking data are as of December 31, 1982.
3 . J.P.
Morgan
& Co.
Incorporated,
TIN 514 (1982); Bankers
RESERVE
1. Futures also intends to provide general research and advice on
market conditions and trading strategies; client account information,
729
BULLETIN
651
Trust New
(1982);
BULLETIN 776 (1982); BankAmerica
SERVE B U L L E T I N 2 1 6 ( 1 9 8 3 ) .
6 8 FEDERAL RESERVE BULLE-
York Corporation,
Citicorp,
68
Corporation,
68 FEDERAL
FEDERAL
RESERVE
69 FEDERAL RE-
730
Federal Reserve Bulletin • September 1983
particularly since forward contracts in foreign exchange are generally regarded as the functional equivalent of futures contracts.
FICAL has been an active participant in the cash
market for U.S. government securities on behalf of its
correspondent banks and corporate clients. Applicant
is also a member of the Association of Primary Dealers. In addition, a number of Applicant's banking
subsidiaries issue domestic and Eurodollar CDs in the
cash market and trade in this market for the account of
their customers. Applicant's experience in these activities has provided it with useful expertise in areas that
are operationally or functionally similar to FCM activities for nonaffiliated persons in government securities
and money market instruments. Thus, the Board concludes, as it has previously, that the proposed FCM
activities for government securities, negotiable money
market instruments and foreign exchange are closely
related to banking.
In order to approve this application, the Board also
is required to determine that the performance of the
proposed activities by Futures "can reasonably be
expected to produce benefits to the public, such as
greater convenience, increased competition or gains in
efficiency that outweigh possible adverse effects, such
as undue concentration of resources, decreased or
unfair competition, conflicts of interests, or unsound
banking practices." (12 U.S.C. § 1843(c)(8)).
Consummation of this proposal would provide added convenience to clients of Applicant trading in the
cash, forward and futures markets for the financial
instruments involved in this application. The Board
expects that the de novo entry of Futures into the
market for FCM services would increase the level of
competition among FCMs already in operation. Further, it appears that Futures is particularly well
equipped to provide FCM services to depository institutions in light of Applicant's experience in providing
related services to depository institutions. Accordingly, the Board has concluded that the performance of
the proposed activities by Futures can reasonably be
expected to produce benefits to the public.
The Board recognizes that the activity of executing
and clearing futures contracts involves various types
of financial risks and potential conflicts of interests,
and is susceptible to anticompetitive and manipulative
practices. In previous actions approving applications
to engage in FCM activities, the Board has relied on
actions taken by Congress to address these types of
adverse effects through the passage of the Commodity
Exchange Act, as amended, 4 and the creation of the
Commodity Futures Trading Commission ("CFTC").
The Board also has relied on regulations promulgated
4. 7 U.S.C. §§ 1-24.
by the CFTC to effectuate the provisions of the
Commodity Exchange Act. 5 Applicant proposes to
conduct its FCM activities through a separately incorporated subsidiary that would be subject to the Commodity Exchange Act, and regulation by the CFTC
and the various commodity exchanges. The Board has
considered the impact of this statutory and regulatory
framework in evaluating the likelihood that significant
adverse effects regarding conflicts of interests, unsound banking practices, decreased or unfair competition, or undue concentration of resources would develop in this case.
On the basis of all the facts of record, the Board has
determined that the provision by Futures of the proposed FCM services to nonaffiliated persons would
not result in decreased or unfair competition, conflicts
of interests, unsound banking practices or undue concentration of resources in either commercial banking
or the market for FCM services. In reaching this
conclusion, the Board has placed particular reliance
on the following features of Applicant's proposal to
conduct FCM activities:
1. Futures shall not trade for its own account.
2. The instruments upon which the proposed futures
contracts are based, are essentially financial in
character and the contracts are of a type that a bank
may execute for its own account.
3. Futures shall have an initial capitalization that is
in substantial excess of that required by CFTC
regulations, and will maintain fully adequate capitalization.
4. Futures shall enter into a formal service agreement that specifies the services that FICAL will
supply to Futures. These services include the assessment of customer credit risk and continuous
monitoring of customer positions and the status of
customer margin accounts.
5. Through its proposed service agreement with
FICAL, Futures will be able to assess customer
credit risks, and will take such assessments into
consideration in establishing appropriate position
limits for each customer, both with respect to each
type of contract and with respect to the customer's
aggregate position for all contracts.
6. Futures shall not, without the prior consent of the
Board, become a clearing member of any exchange
whose rules require the parent corporation of a
clearing member to also become a clearing member,
5. For example, C F T C regulations require FCMs to keep detailed
records on many aspects of F C M activities, such as segregation of
funds and investments made on behalf of customers, (17 C . F . R .
§§ 1.20, 1.25); prescribe protective procedures for such activities as
buying and selling contracts of two customers on opposite sides of the
same transaction, (17 C . F . R . § 1.39); and impose minimum financial
and related reporting requirements, (17 C.F.R. §§ 1.10-. 18).
Legal Developments
unless the requirement is waived with respect to
Applicant.
7. Futures has committed that it will, in addition to
time-stamping orders of all customers to the nearest
minute, execute all orders, to the extent consistent
with customers' specifications, in strictly chronological sequence, and that it will execute all orders
with reasonable promptness with due regard to
market conditions.
8. Applicant and its subsidiaries have demonstrated
expertise and established capability in the cash,
forward, or futures markets for the contracts involved.
9. Applicant will require Futures to advise each of
its customers in writing that doing business with
Futures will not in any way affect any provision of
credit to that customer by any other subsidiary of
Applicant.
10. Applicant is adequately capitalized to engage in
additional nonbanking activities.
11. Futures will not extend credit to a customer for
the purpose of meeting initial or maintenance margin
requirements of a customer, subject to the limited
exception of posting margin on behalf of customers
in advance of prompt reimbursement.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the public benefits associated with consummation of
this proposal can reasonably be expected to outweigh
possible adverse effects, and that the balance of the
public interest factors, which the Board is required to
consider under section 4(c)(8) of the Act, is favorable.
Accordingly, the application is hereby approved.
This determination is subject to the conditions set
forth in the Board's Order and section 225.4 of Regulation Y and the Board's authority to require such
modification or termination of the activities of a holding company or any of its subsidiaries as the Board
finds necessary to assure compliance with the provisions and purposes of the Act and the Board's regulations and orders issued thereunder, or to prevent
evasion thereof.
The proposed activities shall not commence later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of San
Francisco.
By order of the Board of Governors, effective
August 24, 1983.
731
Hongkong and Shanghai Banking Corporation,
Hong Kong
Kellett, N.V.,
Curacao, Netherlands Antilles
HSBC Holdings, B.V.,
Amsterdam, The Netherlands
Marine Midland Banks, Inc.,
Buffalo, New York
Order Approving Application
Financing Activities
to Engage in Equity
The Hongkong and Shanghai Banking Corporation
("HSBC"), Hong Kong; Kellett, N . V . , Curacao,
Netherlands, Antilles; HSBC Holdings, B.V. ("Holdings"), Amsterdam, The Netherlands; and Marine
Midland Banks, Inc. ("MMBI"), Buffalo, New York
(collectively referred to as "Applicants"), bank holding companies within the meaning of the Bank Holding
Company Act ("Act"), have applied for the Board's
approval under section 4(c)(8) of the Act (12 U.S.C.
§ 1843(c)(8)) and section 225.4(b)(2) of the Board's
Regulation Y (12 C.F.R. § 225.4(b)(2)), to engage
de novo, through their wholly-owned subsidiary, Marine Midland Realty Credit Corporation, Buffalo, New
York ("Company"), in the activity of arranging equity
financing. While this activity has not been specified by
the Board in Regulation Y as permissible for bank
holding companies, the Board has determined by order
that arranging equity financing subject to certain conditions is closely related to banking.1
Notice of the application, affording interested persons an opportunity to submit comments on the proposal has been duly published (48 Federal
Register
24786 (1983)). The time for filing comments has expired and the Board has considered the application and
all comments received in light of the public interest
factors set forth in section 4(c)(8) of the Act. HSBC, a
bank organized under the laws of Hong Kong, is the
26th largest banking organization in the world with
total assets of approximately $58 billion. 2 HSBC engages in a broad range of financial and commercial
services directly and indirectly through its offices
worldwide. Through Kellett and Holdings, HSBC
owns 51 percent of the shares of MMBI, which is the
13th largest commercial banking organization in the
United States and the seventh largest in New York
Voting for this action: Chairman V o l c k e r and G o v e r n o r s
Martin, Wallich, Partee, T e e t e r s , Rice, and Gramley.
WILLIAM W . W I L E S ,
[SEAL]
Secretary
of the Board
1. E . g . , BankAmerica
Corporation,
68 FEDERAL RESERVE BULLE-
TIN 647 (1982).
2. Banking data are as of December 31, 1982.
732
Federal Reserve Bulletin • September 1983
with total assets of approximately $20 billion. 3 MMBI,
through its subsidiary bank, offers a full range of
banking and trust services from nearly 300 offices in
the State of New York. MMBI engages through Company in mortgage banking and investment advisory
activities for which it has received Board approval
under section 4(c)(8) of the Act and sections
225.4(a)(1), (3) and (5) of Regulation Y.
Applicants have applied to engage de novo through
Company in arranging equity financing on behalf of
institutional investors for commercial and industrial
income-producing realty. Equity financing, as proposed by Applicants, involves arranging for the financing of commercial or industrial income-producing real
estate through the transfer of the title, control and risk
of the project from the owner/developer to one or
more investors. Company would represent the owner/
developer and would be paid a fee by the owner/
developer for this service. The service would be
offered only as an alternative to traditional financing
arrangements, and Company would not solicit for
properties to be sold. While Company would advertise
its services as an arranger of equity financing generally, it would not advertise specific properties for which
it is seeking financing, list or advertise properties for
sale, or hold itself out or advertise as a real estate
broker or syndicator. This activity would be provided
only with respect to commercial or industrial incomeproducing property and only when the financing arranged exceeds $1 million. Only institutional or
wealthy, professional individual investors would be
offered the service.
The Board has determined that, subject to certain
conditions to prevent a bank holding company or its
subsidiary from engaging in real estate brokerage,
development and syndication, equity financing is
closely related to banking. 4 Applicants have committed to engage in the equity financing activity subject to
the same conditions as those previously relied on by
the Board in finding that the activity is closely related
to banking.
Specifically, Applicants have committed that Company's function will be limited to acting as an intermediary between developers and investors to arrange
financing. Neither Applicants nor any affiliate5 may
acquire an interest in any real estate project for which
Company arranges equity financing nor have any role
in the development of the project. Neither Company
nor any affiliate shall participate in managing, developing or syndicating property for which Company arranges equity financing, nor promote or sponsor the
syndication of such property. Neither Company nor
any affiliate will provide financing to the investors in
connection with an equity financing arrangement. The
fee Company receives for arranging equity financing
for a project shall not be based on profits derived, or to
be derived, from the property and should not be larger
than the fee that would be charged by an unaffiliated
intermediary. The Board finds that Applicants' proposed equity financing activity will not constitute real
estate brokerage, real estate development or real estate syndication, provided the above-mentioned conditions and limitations are observed by Applicants and
Company.
The Board has previously found that the arrangement of equity financing by bank holding companies
would enhance competition, provide greater convenience to consumers, increase efficiencies, and lower
costs. These conclusions appear to be applicable to
Applicant's proposal as well. There is no evidence in
the record to indicate that Applicants' performance of
equity financing would result in any undue concentration of resources, decreased or unfair competition,
unsound banking practices, or other adverse effects.
Based upon these and other considerations reflected in
the record, the Board has determined that the balance
of public interest factors that the Board is required to
consider under section 4(c)(8) of the Act is favorable.
This determination is conditioned upon Applicants'
strictly limiting their equity financing activities to
those described in information furnished in connection
with this application and as provided in this Order.
Based on the foregoing, the Board has determined
that the application should be approved, and the
application is hereby approved. 6 This determination is
subject to the limitations set forth in this Order, the
conditions set forth in section 225.4(c) of Regulation
Y, and the Board's authority to require such modification or termination of the activities of a holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with the provisions
and purposes of the Act, and the Board's regulations
and orders issued thereunder, or to prevent evasion
thereof.
The proposed activities shall be commenced not
later than three months after the effective date of this
Order, unless such period is extended for good cause
3. Banking data are as of March 31, 1983.
4 . BankAmerica
Corporation,
6 8 FEDERAL RESERVE BULLETIN a t
649.
5. The word "affiliate" as used in this Order is to have the meaning
it has in Section 23A of the Federal Reserve Act, as amended, which
includes in its definition, a sponsored real estate investment trust.
6. The Board hereby delegates to the Federal Reserve Bank of N e w
York authority to approve future applications by Applicants to expand
their equity financing activities de novo, subject to the terms of the
Board's previous orders approving such activities.
Legal Developments
by the Board or by the Federal Reserve Bank of New
York acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 15, 1983.
Voting for this action: G o v e r n o r s Wallich, Partee, T e e t e r s ,
R i c e , and G r a m l e y . A b s e n t and not voting: Chairman
V o l c k e r and G o v e r n o r Martin.
JAMES M C A F E E ,
[SEAL]
Associate
Secretary of the Board
J. P. Morgan & Co. Incorporated,
New York, New York
Order Approving Application to Engage in Certain
Futures Commission Merchant
Activities
J. P. Morgan & Co., Incorporated, New York, New
York, a bank holding company within the meaning of
the Bank Holding Company Act of 1956, as amended
(12 U.S.C. § 1841 et seq.) (the "Act"), has applied for
the Board's approval, under section 4(c)(8) of the Act
(12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the
Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to
engage through its subsidiary, Morgan Futures Corporation, New York, New York ("Morgan Futures"), in
acting as a futures commission merchant (an "FCM")
for nonaffiliated persons, in the execution and clearance of options in certain futures contracts on major
commodity exchanges. Such options would cover futures contracts traded on the Commodity Exchange,
Inc., New York, New York, in bullion and futures
contracts traded on the Board of Trade of the City of
Chicago, Chicago, Illinois, in U.S. Government securities.
Notice of the application, affording interested persons an opportunity to submit comments on the relation of the proposed activity to banking and on the
balance of public interest factors regarding the application, has been duly published (48 Federal
Register
15326 (April 8, 1983)). The time for filing comments
has expired, and the Board has considered the application and all comments received in light of the public
interest factors set forth in section 4(c)(8) of the Act. 1
Applicant is a bank holding company by virtue of its
control of Morgan Guaranty Trust Company of New
York, New York, New York ("Morgan Guaranty").
1. The Board has reviewed the comment by the Dealer Bank
Association that the proposed activity be added to the list of activities
that are permissible for bank holding companies under Regulation Y,
and will consider this proposal in conjunction with comments received
regarding the proposed revisions to Regulation Y.
733
Morgan Guaranty holds total deposits of $39.8 billion, 2
and is the fourth largest commercial bank in New York
state. Applicant, through certain of its subsidiaries,
engages in various permissible nonbanking activities.
In order to approve an application submitted pursuant to section 4(c)(8) of the Act, the Board is first
required to determine that the proposed activity is
closely related to banking or managing or controlling
banks. Upon consideration of all the facts of record
and for the reasons explained below, the Board has
determined that Morgan Futures' proposed activities
as an FCM, with respect to the contracts involved in
this application, would be closely related to banking.
On several prior occasions, the Board has determined that FCM activities with respect to futures
contracts regarding bullion and U.S. Government securities were closely related to banking. 3 An option on
a futures contract is functionally and operationally
similar to a futures contract for the same commodity.
The purchaser of such an option has the right, but not
the obligation, to assume the futures contract position
of the grantor of the option. Thus, an option on a
futures contract provides an alternative means of
hedging against price fluctuations and allows a purchaser to limit the potential risk of loss to the premium
paid to acquire the option. Similarly, the grantor of an
option may offset at least a portion of any price
movement adverse to a given futures position with the
premium collected from sale of the option, and thereby
hedge against adverse price fluctuations.
Morgan Guaranty trades in the cash, forward, and
futures markets for its own accounts and in the cash
and forward markets for customers, both with regard
to bullion and U.S. Government securities. Morgan
Futures acts as an FCM for futures contracts for the
accounts of Morgan Guaranty and nonaffiliated customers, and has executed and cleared options on
bullion and U.S. Government securities futures contracts for Morgan Guaranty since such options were
first traded in October of 1982. It therefore appears
that Applicant has the expertise to provide the proposed options services. In addition, many large banks
are active participants in the cash and futures markets
for bullion and government securities, and options
transactions with regard to these markets is a specialized service that these banks may find helpful. Accordingly, the Board finds that the proposed activities
are closely related to banking.
In order to approve this application, the Board also
is required to determine that the performance of the
proposed activities by Morgan Futures, "can reason-
2. Banking data are as of December 31, 1982.
3 . E . g . , J.P.
Morgan
5 1 4 ( 1 9 8 2 ) ; Citicorp,
& Co.
Inc.,
68 FEDERAL RESERVE BULLETIN
6 8 FEDERAL RESERVE BULLETIN 7 7 6 (1982).
734
Federal Reserve Bulletin • September 1983
ably be expected to produce benefits to the public,
such as greater convenience, increased competition,
or gains in efficiency, that outweigh possible adverse
effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interests,
or unsound banking practices." (12 U.S.C.
§ 1843(c)(8)).
Consummation of the proposal would provide added
convenience to those clients of Morgan Guaranty who
trade in the cash, forward, futures, and options markets for the commodities involved in this application.
The Board expects that the de novo entry of Morgan
Futures into the market for options services would
increase the level of competition among FCMs already
operating in this area, and would allow Morgan Futures to compete on a more equal basis with its
nonbank competitors. Consummation of the proposal
is also likely to provide Applicant with some gains in
efficiency, through the reduction of average fixed
costs and the increase of economies of scale. Accordingly, the Board has concluded that the performance
of the proposed activities by Morgan Futures can
reasonably be expected to produce benefits to the
public.
The Board has considered several issues with respect to possible adverse effects. The Board recognizes that, like the activity of executing futures contracts, the execution of options with regard to futures
contracts involves various types of financial risks and
potential conflicts of interests, and is susceptible to
anticompetitive and manipulative practices. In approving proposals to act as an FCM with regard to
futures, the Board has relied in the past on action
taken by Congress to address these types of possible
adverse effects through the passage of the Commodity
Exchange Act 4 and the creation of the Commodity
Futures Trading Commission ("CFTC"). The Board
also has relied on the regulations adopted by the CFTC
to effectuate the provisions of the Commodity Exchange Act. 5 The CFTC's pilot program regarding
options on futures imposes many of the same safeguards that apply to trading in futures, and adds
additional limitations such as those requiring audits,
review of promotional materials, and retention of
customer complaints. 6 The Board has considered the
impact of this statutory and regulatory framework in
4. 7 U.S.C. §§ 1-24.
5. For example, C F T C regulations require FCMs to keep detailed
records on many aspects of F C M activities, such as segregation of
funds and investments made on behalf of customers (17 C . F . R .
§§ 1.20, 1.25); prescribe protective procedures for such activities as
buying and selling contracts of two customers on opposite sides of the
same transaction; (17 C . F . R . § 1.39); and impose minimum financial
and related reporting requirements (17 C.F.R. §§ 1.10-. 18).
6. 17 C.F.R. § 33.4.
evaluating the likelihood that significant adverse effects regarding conflicts of interests, unsound banking
practices, decreased or unfair competition, or undue
concentration of resources would develop in this case.
In addition, the Board has placed particular reliance
on the following aspects of Applicant's proposal, each
of which the Board has previously relied on with
regard to Applicant's original application to engage in
FCM activities:
1. Morgan Futures will not trade for its own account.
2. The instruments and precious metals upon which
the proposed futures contracts are based are essentially financial in character and are of a type that a
bank may execute for its own account.
3. Morgan Futures has capitalization that is in
substantial excess of that required by CFTC regulations, and will maintain fully adequate capitalization.
4. Morgan Futures and Morgan Guaranty have
entered into a formal service agreement that specifies the services that Morgan Guaranty will supply
to Morgan Futures on an explicit fee basis. These
services include the assessment of customer credit
risk and continuous monitoring of customer positions and the status of customer margin accounts.
5. Through its proposed service agreement with
Morgan Guaranty, Morgan Futures will be able to
assess customer credit risks, and will take such
assessments into consideration in establishing appropriate position limits for each customer, both
with respect, to each type of option and with respect
to the customer's aggregate position for all options
and contracts.
6. With respect to each futures exchange involved in
this application that requires a parent of a clearing
member to also become a clearing member, Applicant has obtained a waiver of the requirement.
7. Morgan Futures has committed that it will, in
addition to time-stamping orders of all customers to
the nearest minute, execute all orders, to the extent
consistent with customers' specifications, in strictly
chronological sequence, and with reasonable
promptness with due regard to market conditions.
8. Applicant and its subsidiaries have demonstrated
expertise and established capability in the cash,
forward, and futures markets for the contracts involved.
9. Applicant will require Morgan Futures to advise
each of its customers in writing that doing business
with Morgan Futures will not in any way affect any
provision of credit to that customer by Morgan
Guaranty or any other subsidiary of Applicant.
10. Applicant is adequately capitalized to engage in
additional nonbanking activities.
Legal Developments
11. Morgan Futures will not extend credit to customers for the purpose of meeting initial or maintenance margin required of customers, subject to the
limited exception of posting margin on behalf of
customers in advance of prompt reimbursement.
Based upon the foregoing and all the facts of record,
the Board has determined that in the circumstances of
this case, the provision by Morgan Futures of the
proposed FCM services to nonaffiliated persons would
not result in decreased or unfair competition, conflicts
of interests, unsound banking practices, or undue
concentration of resources in either commercial banking or the market for FCM services regarding options.
Moreover, for the reasons discussed above and
based on the entire record, the Board has determined
that the public benefits associated with consummation
of this proposal can reasonably be expected to outweigh possible adverse effects, and that the balance of
the public interest factors, which the Board is required
to consider under section 4(c)(8) of the Act, is favorable. Accordingly, the application is hereby approved.
This determination is subject to the conditions set
forth in section 225.4(c) of Regulation Y and the
Board's authority to require such modification or
termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
The proposed activities shall not commence later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of New
York.
By order of the Board of Governors, effective
August 1, 1983.
Voting for this action: V i c e Chairman Martin and Governors Wallich, T e e t e r s , R i c e , and Gramley. A b s e n t and not
voting: Chairman V o l c k e r and G o v e r n o r Partee.
JAMES M C A F E E ,
[SEAL]
Associate
Secretary of the Board
The Long-Term Credit Bank of Japan, Limited,
Tokyo,Japan
Order Approving Acquisition
of a Trust
Company
The Long-Term Credit Bank of Japan, Limited, Tokyo, Japan has applied for the Board's approval under
section 4(c)(8) of the Act and section 225.4(b)(2) of the
Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to
735
acquire 100 percent of the voting shares of LTCB
Trust Company, New York, New York ("Trust Company"), a de novo limited-purpose trust company that
will not be insured by the Federal Deposit Insurance
Corporation.
On July 25, 1983, Applicant received approval from
the New York State Banking Department to establish
Trust Company as a limited purpose trust company
under New York banking law. This application to the
Board is required because section 8 of the International Banking Act of 1978 ("IBA") (12 U.S.C. § 3106(a))
imposes the nonbanking restrictions of section 4 of the
Bank Holding Company Act and section 225.4(a)(4),
(5) and (8) of Regulation Y on any foreign bank such as
Applicant that maintains a branch or agency in the
United States.
The activities of Trust Company will include fiduciary, agency or custodial services; investment or financial advisory services including portfolio advice, statistical forecasting and industry studies; and data
processing services such as reporting and recordkeeping solely as an incident to the above mentioned
activities. These activities have been determined by
the Board to be closely related to banking and, therefore, permissible as a proper incident thereto.
(12 C.F.R. § 225.4(a)(4), (5) and (8)).
Notice of the application, affording opportunity for
interested persons to submit comments on the public
interest factors, has been duly published. The time for
filing comments has expired, and the Board has considered the application and all comments received in
light of the public interest factors set forth in section
4(c)(8) of the Bank Holding Company Act.
Applicant, with total assets of approximately $50.7
billion, ranks as the second largest of three long-term
credit banks1 and the seventh largest private bank in
Japan. Applicant is the 35th largest bank worldwide. 2
Applicant operates 19 branches in Japan, and operates
foreign branches in London and Singapore. In the
United States, Applicant operates a branch in New
York, its home state, 3 and an agency in Los Angeles
with total combined assets of $3.4 billion. Applicant
has merchant bank subsidiaries in Hong Kong and
Switzerland and a finance subsidiary in Netherlands
Antilles.
In addition, Applicant owns 5.44 percent of the
voting shares of Sanyo Securities Co., Ltd., Tokyo,
1. Applicant's principal business activity is the extension of longterm credit in the form of secured loans, discounts and guarantees. In
addition, pursuant to a major revision in the Japanese Banking Law
enacted in 1982, Applicant is permitted to underwrite and sell central
and local government bonds and government-guaranteed bonds.
2. All financial data are on a parent only basis as of March 31, 1982.
3. Applicant selected New York as its home state pursuant to
Section 5 of the IBA (12 U.S.C. § 3103).
736
Federal Reserve Bulletin • September 1983
Japan, which engages in business in the United States
through a wholly-owned subsidiary, Sanyo Securities
American, Inc. Applicant is entitled to retain its Sanyo
stock because Applicant acquired the stock prior to
1978 and thus is grandfathered pursuant to section 8(c)
of the IBA (12 U.S.C. § 3106(c)).
To approve this application the Board must find that
Applicant's activities through Trust Company can
reasonably be expected to produce benefits to the
public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible
adverse effects such as undue concentration of resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices.
Trust Company will be established as a de novo
subsidiary of Applicant, therefore, consummation will
not result in decreased or unfair competition. Accordingly, competitive factors are consistent with approval. Financial and managerial factors are also consistent
with approval. Although Applicant's capitalization is
below the standards for comparably sized banking
organizations in the United States, there appear to be
substantial differences between Applicant's business
and that conducted by large U.S. banks, particularly
with respect to its asset and liability status, that
mitigate the Board's concerns in this regard.4
There is no evidence in the record suggesting that
conflicts of interest, or unsound banking practices
would result from the establishment of Trust Company. Trust Company will provide fiduciary rather than
banking services for corporate customers in the United States such as U.S. subsidiaries of Japanese companies, Japanese and other foreign corporations, and
foreign governments, through an office in New York
City. Applicant has stated that Trust Company will
avoid making loans or accepting any deposits except
on rare occasions when Trust Company's liabilities
may include amounts due to customers, but subject to
the restrictions of section 225.4(a)(4) of Regulation Y.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined
under section 4(c)(8) that establishment of Trust Company can reasonably be expected to produce benefits
to the public. Consummation of this proposal would
not result in any undue concentration of resources,
decreased or unfair competition, conflicts of interests,
unsound banking practices, or other adverse effects on
the public interest. Accordingly, the application is
hereby approved.
4. Applicant's investment in Trust Company represents only about
0.27 percent of Applicant's equity capital and reserves and less than
0.01 percent of its total assets as of September 30, 1982.
This determination 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 Bank Holding Company Act and the Board's
regulations and orders issued thereunder or to prevent
the 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 22, 1983.
V o t i n g f o r this action: Chairman V o l c k e r and G o v e r n o r s
Martin, Wallich, Partee, T e e t e r s , R i c e , and Gramley.
JAMES M C A F E E ,
[SEAL]
Associate
Secretary
of the Board
Rainier Bancorporation,
Seattle, Washington
Order Approving Application
Financing Activities
to Engage in Equity
Rainier Bancorporation, Seattle, Washington, a bank
holding company within the meaning of the Bank
Holding Company Act ("Act"), has applied for the
Board's approval under section 4(c)(8) of the Act
(12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the
Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to
engage de novo, through its wholly-owned subsidiary,
Rainier Mortgage Company, Seattle, Washington,
("Company"), in the activity of arranging equity financing. While this activity has not been specified by
the Board in Regulation Y as permissible for bank
holding companies, the Board has determined by order
that arranging equity financing subject to certain conditions is closely related to banking.1
Notice of the application, affording interested persons an opportunity to submit comments on the proposal has been published (48 Federal Register 27444
(1983)). The time for filing comments has expired and
the Board has considered the application and all
comments received in light of the public interest
factors set forth in section 4(c)(8) of the Act.
1. E.g., BankAmerica
TIN 647 (1982).
Corporation,
68 FEDERAL RESERVE BULLE-
Legal Developments
Applicant is the second largest commercial banking
organization in Washington with aggregate deposits of
$3.8 billion, representing 19.8 percent of total commercial bank deposits in the state. 2 Applicant also operates Peoples Bank and Trust Company, Anchorage,
Alaska ("Peoples Bank"). Peoples Bank is the eleventh largest bank in Alaska, with aggregate deposits of
$47.3 million, representing 1.8 percent of commercial
bank deposits in the state. Applicant engages through
Company in mortgage banking, commercial lending
and insurance activities for which it has received
Board approval under section 4(c)(8) of the Act and
sections 225.4(a)(1), (3) and (9) of Regulation Y.
Applicant has applied to engage de novo through
Company in arranging equity financing on behalf of
institutional investors for commercial and industrial
income-producing realty. Equity financing, as proposed by Applicant, involves arranging for the financing of commercial or industrial income-producing real
estate through the transfer of the title, control, and risk
of the project from the owner/developer to one or
more investors. Company would represent the owner/
developer and would be paid a fee by the owner/
developer for this service. The service would be
offered only as an alternative to traditional financing
arrangements, and Company would not solicit for
properties to be sold. While Company would advertise
its services as an arranger of equity financing generally, it would not advertise specific properties for which
it is seeking financing, list or advertise properties for
sale, or hold itself out or advertise as a real estate
broker or syndicator. This activity would be provided
only with respect to commercial or industrial incomeproducing property and only when the financing arranged exceeds $1 million. Only institutional or
wealthy, professional individual investors would be
offered the service.
The Board has determined that, subject to certain
conditions to prevent a bank holding company or its
subsidiary from engaging in real estate brokerage,
development and syndication, equity financing is
closely related to banking. 3 Applicant has committed
to engage in the equity financing activity subject to the
same conditions as those previously relied on by the
Board in finding that the activity is closely related to
banking.
Specifically, Applicant has committed that Company's function will be limited to acting as an intermediary between developers and investors to arrange fi-
2. Banking data are as of December 31, 1982.
3 . BankAmerica
Corporation,
649 (1982).
6 8 FEDERAL RESERVE BULLETIN at
737
nancing. Neither Applicant nor any affiliate4 may
acquire an interest in any real estate project for which
Company arranges equity financing nor have any role
in the development of the project. Neither Company
nor any affiliate shall participate in managing, developing or syndicating property for which Company arranges equity financing, nor promote or sponsor the
syndication of such property. Neither Company nor
any affiliate will provide financing to the investors in
connection with an equity financing arrangement. The
fee Company receives for arranging equity financing
for a project shall not be based on profits derived, or to
be derived, from the property and should not be larger
than the fee that would be charged by an unaffiliated
intermediary. The Board finds that Applicant's proposed equity financing activity will not constitute real
estate brokerage, real estate development or real estate syndication, provided the above-mentioned conditions and limitations are observed by Applicant and
Company.
The Board previously has found that the arrangement of equity financing by bank holding companies
would enhance competition, provide greater convenience to investors, increase efficiencies, and lower
costs. These conclusions appear to be applicable to
Applicant's proposal as well. There is no evidence in
the record to indicate that Applicant's performance of
equity financing would result in any undue concentration of resources, decreased or unfair competition,
unsound banking practices, conflicts of interests or
other adverse effects. Based upon these and other
considerations reflected in the record, the Board has
determined that the balance of public interest factors
that the Board is required to consider under section
4(c)(8) of the Act is favorable. This determination is
conditioned upon Applicant's strictly limiting its equity financing activities as provided in this Order.
Based on the foregoing, the Board has determined
that the application should be approved, and the
application is hereby approved. 5 This determination is
subject to the limitations set forth in this Order, the
conditions set forth in section 225.4(c) of Regulation
Y, and the Board's authority to require such modification or termination of the activities of a holding
company or any of its subsidiaries as the Board finds
necessary to assure compliance with the provisions
and purposes of the Act, and the Board's regulations
and orders issued thereunder, or to prevent evasion
thereof.
4. The word "affiliate" as used in this Order is to have the meaning
it has in Section 23A of the Federal Reserve Act, as amended, which
includes in its definition a sponsored real estate investment trust.
5. The Board hereby delegates to the Federal Reserve Bank of San
Francisco authority to approve future applications by Applicant to
expand its equity financing activities de novo, subject to the terms of
this Order.
738
Federal Reserve Bulletin • September 1983
The proposed activities shall be commenced not
later than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of San
Francisco acting pursuant to delegated authority.
By order of the Board of Governors, effective
August 23, 1983.
V o t i n g for this action: Chairman V o l c k e r and G o v e r n o r s
Martin, Wallich, Partee, T e e t e r s , R i c e , and Gramley.
JAMES M C A F E E ,
[SEAL]
Associate
Secretary of the Board
Orders Under Section 3 and 4 of Bank Holding
Company Act
Boatmen's Bancshares,
St. Louis, Missouri
Order Approving Acquisition of Bank Holding
Company and Trust Company
Boatmen's Bancshares, St. Louis, Missouri, a bank
holding company within the meaning of the BHC Act,
has applied for the Board's approval under section
3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire at
least 80.0 percent of the voting common shares and
convertible preference stock of Metro Bancholding
Corporation, Crestwood, Missouri ("Metro"). As a
result of the acquisition, Applicant would acquire
Metro's subsidiary banks, Metro Bank/St. Louis, St.
Louis, Missouri; Metro Bank/Clayton, Clayton, Missouri; and Metro Bank/Southwest County, Crestwood, Missouri.
Applicant has also applied for the Board's approval
under section 4(c)(8) of the Act (12 U.S.C.
§ 1843(c)(8)) and section 225.4(b)(2) of the Board's
Regulation Y (12 C.F.R. § 225.4(b)(2)) to acquire
Metro's indirect nonbanking subsidiary, Metro Trust
Company, Clayton, Missouri ("Metro Trust"). 1 Trust
Company engages in a range of fiduciary services
including employee benefit trusts, personal trusts,
estates, agency and custodial services. It offers such
services primarily to customers (individuals and corporations) of Metro's three subsidiary banks. The
Board has determined that these activities are closely
related to banking under section 225.4(a)(4) of Regulation Y (12 C.F.R. § 225.4(a)(4)).
1. Metro has another nonbank subsidiary, Databank Corporation,
Crestwood, Missouri. Applicant, however, intends to complete the
dissolution and liquidation of Databank within thirty days of consummation of the proposed transaction.
Notice of these applications affording opportunity
for interested persons to submit comments has been
given in accordance with sections 3 and 4 of the Act
(48 Federal Register 29057, June 24, 1983). The time
for filing comments has expired, and the Board has
considered the applications and all comments received
in light of the factors set forth in section 3(c) of the Act
(12 U.S.C. § 1842(c)) and the considerations specified
in section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)).
Applicant, the fifth largest banking organization in
Missouri, controls 17 subsidiary banks with aggregate
deposits of $1.8 billion representing 6 percent of
deposits in commercial banks in the state. 2 Metro is
the thirteenth largest commercial banking organization
in Missouri, controlling three subsidiary banks. Metro's banking subsidiaries have aggregate deposits of
$401 million which represent 1.3 percent of total
commercial bank deposits in the state. Upon consummation of the proposed acquisition, Applicant would
become the fourth largest commercial banking organization in Missouri holding 7.2 percent of total deposits
in commercial banks in the state.
With regard to competitive effects, seven of Applicants' subsidiary banks and all three of Metro's banks
operate in the St. Louis banking market.3 Sixty-six
commercial banking organizations operate in the market, and the share of commercial bank deposits held by
the four largest banking organizations in the market is
46.6 percent. The Herfindahl-Hirschman Index
("HHI") in the St. Louis market is 752.
Applicant is the third largest banking organization in
the market with $1.0 billion of deposits representing a
7.3 percent share of commercial bank deposits in the
market. Metro is the ninth largest banking organization in the market with deposits of $401 million,
representing 2.8 percent of deposits in commercial
banks in the market. Upon consummation of this
proposal, Applicant's share of the market would increase to 10.1 percent, and its rank as the third largest
banking organization in the market would remain
unchanged. Upon consummation the four-firm concentration ratio and the HHI in the market would
increase to 49.4 percent and 795, respectively. 4
Although the proposed acquisition would eliminate
some existing competition between Applicant and
Metro in the St. Louis banking market, the Board does
2. All banking data are as of December 31, 1982, and reflect mergers
consummated and bank holding company acquisitions approved
through April 30, 1983.
3. The St. Louis banking market is approximated by the St. Louis
RMA.
4. Under the Department of Justice merger guidelines, a market with
a post-merger HHI below 1000 is considered unconcentrated and the
Department is unlikely to challenge mergers in such markets.
Legal Developments
not believe that the effect of this transaction on
existing competition would be significant. The St.
Louis banking market is unconcentrated and numerous banking alternatives would remain in the market
upon consummation. In addition, there are forty-nine
thrift institutions in the St. Louis banking market,
which control $7.6 billion in deposits, representing
approximately 35 percent of total deposits of commercial banks and thrifts in the market.5 In view of the
unconcentrated nature of the market and other facts of
record, including the competitive influence exerted by
thrift institutions, the Board concludes that competitive considerations are consistent with approval.
The Board has also examined the effect of Applicant's proposed acquisition of Metro on probable
future competition in the relevant markets in light of
the Board's proposed policy statement on market
extension mergers. 6 Applicant operates in seven banking markets in which Metro is not represented. Because of Metro's size and its history of limited geographic expansion, there is no evidence that Metro
should be considered a likely future entrant into any of
these seven markets. Accordingly, the Board concludes that consummation of the proposal would not
have significant adverse effects on probable future
competition in any of the markets in which Applicant
operates. 7
Based on the foregoing and other facts of record, the
Board concludes that consummation of the proposed
transaction would not have any significant adverse
effects on existing or potential competition and would
not significantly increase the concentration of banking
resources in any relevant area. Thus, competitive
considerations are consistent with approval of the
application.
The financial and managerial resources of Applicant, Metro, and their subsidiaries are considered
generally satisfactory and their future prospects appear favorable. Thus, considerations relating to banking factors are consistent with approval of the application.
With regard to convenience and needs factors, Applicant's acquisition of Metro would enable Metro's
subsidiary banks to expand the services they currently
5. Thrift data are as of September 30, 1981.
6. "Proposed Policy Statement of the Board of Governors of the
Federal Reserve System for Assessing Competitive Factors Under the
Bank Merger Act and the Bank Holding Company A c t " , 47 Federal
Register 9017 (March 3, 1982). Although the proposed policy statement has not been approved by the Board, the Board has used the
proposed policy statement in a number of cases to determine whether
an intensive analysis is warranted regarding the effects of a proposal
on probable future competition.
7. Because Metro and Applicant both compete in the St. Louis
banking market, the proposed transaction raises no issues with regard
to potential competition in that market.
739
offer to their customers. These expanded services
would include automobile and equipment lease financing, expanded international banking services, and reduced rates on credit-related insurance. Further, Applicant plans to provide a new main office for Metro
Bank/Clayton, Clayton. Thus, the Board concludes
that considerations relating to the convenience and
needs of the communities to be served lend some
weight toward approval of this application.
Accordingly, based upon the foregoing and other
facts of record, the Board's judgement is that, under
section 3 of the Act, consummation of the proposed
transaction should be approved.
With respect to the application to acquire Metro's
nonbank subsidiary, Metro Trust, the market value of
the trust assets which Metro Trust controls is $46.0
million representing 0.4 percent of the total trust assets
held by banks and trust companies in the St. Louis
banking market. Applicant has three banking subsidiaries within the St. Louis banking market that offer
fiduciary services, and the market value of the trust
assets of these subsidiaries is $1.9 billion, representing
approximated 10 percent of the market. 8 In view of the
small market share of Metro Trust and since numerous
other organizations offer fiduciary services in the St.
Louis banking market, the Board concludes that consummation of this proposal would have no measurable
effect on competition in this line of business.
There is no evidence in the record to indicate that
approval of the proposed acquisition would result in
undue concentration of resources, decreased or unfair
competition, conflicts of interest or unsound banking
practices. Applicant plans to expand the marketing
efforts, range, and quality of Metro Trusts' services,
including the institution of corporate trust services.
Accordingly, the Board has determined that the balance of public interest factors it must consider under
section 4(c)(8) of the Act are consistent with approval
of the application, and that the application to acquire
Metro Trust should be approved.
Based on the foregoing and other facts of record, the
applications are approved for the reasons set forth
above. The acquisition of Metro's banking subsidiaries
pursuant to section 3 of the Act shall not be made
before the thirtieth calendar day following the effective
date of this Order, and neither the acquisition of
Metro's banking subsidiaries nor the acquisition of its
nonbanking subsidiaries shall 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 St. Louis, pursuant to
8. Excluded from this total is $2.2 billion of assets, representing two
public retirement pension trusts originating outside the St. Louis
banking market.
740
Federal Reserve Bulletin • September 1983
delegated authority. The approval of Applicant's proposal to acquire Metro's nonbanking subsidiaries and
to engage in fiduciary activities 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 Board's regulations and
orders issued thereunder, or to prevent evasion
thereof.
By order of the Board of Governors effective
August 22, 1983.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Teeters, Rice, and Gramley.
JAMES M C A F E E ,
[SEAL]
ORDERS APPROVED
UNDER BANK HOLDING COMPANY
Associate
Secretary
of the Board
ACT
By the Board of Governors
During August 1983, 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
Board action
(effective
date)
Bank(s)
Citizens Financial Corporation,
Fort Atkinson, Wisconsin
First City Bancorporation of Texas, Inc.,
Houston, Texas
Sun Banks of Florida, Inc.,
Orlando, Florida
Citizens State Bank,
Fort Atkinson, Wisconsin
First City Bank—Forum, N . A . ,
San Antonio, Texas
Florida State Bank of Tallahassee,
Tallahassee, Florida
The Hillsboro Bank,
Plant City, Florida
August 1, 1983
August 29, 1983
August 9, 1983
August 26, 1983
By Federal Reserve 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
Ames National Corporation,
Ames, Iowa
Banc One Corporation,
Columbus, Ohio
Bank(s)
State Bank & Trust Co.,
Nevada, Iowa
First National City Bank of
Alliance,
Alliance, Ohio
Reserve
Bank
Effective
date
Chicago
July 28, 1983
Cleveland
August 4, 1983
Legal Developments
741
Section 3—Continued
Applicant
Bennett Bancorporation,
Bennett, Colorado
Clinton Bancshares, Inc.,
Clinton, Louisiana
Columbine Bankshares, Ltd.
Denver, Colorado
Columbus Corp.,
Columbus, Kansas
East Coast Bank Corporation,
Ormond Beach, Florida
Farmers & Merchants Bancshares, Inc.,
Wright City, Missouri
First American Bancshares,
Inc.,
Bay town, Texas
First Bank Holding Company,
Sylvester, Georgia
First National Corporation of
Alexander City, Inc.,
Alexander City, Alabama
First Sleepy Eye Bancorporation, Inc.,
Sleepy Eye, Minnesota
GL & ML Limited,
Aplington, Iowa
Glasgow Bancshares Corporation,
Glasgow, Kentucky
Hawkeye Bancorporation,
Des Moines, Iowa
Haysville Bancshares, Inc.,
Haysville, Kansas
Home State Bancorp, Inc.,
Crystal Lake, Illinois
JDOB Inc.,
Naples, Florida
McGregor Banco, Inc.,
McGregor, Minnesota
Bank(s)
Bennett National Bank,
Bennett, Colorado
Clinton Bank & Trust Company,
Clinton, Louisiana
Columbine Valley Bank and
Trust Company,
Littleton, Colorado
Stanley Corp.,
Stanley, Kansas
Stanley Bancshares, Inc.,
Stanley, Kansas
State Bank of Stanley,
Stanley, Kansas
Bank at Ormond-By-The-Sea,
Ormond Beach, Florida
Farmers & Merchants Bank of
Wright City,
Wright City, Missouri
First American Bank and
Trust of Manvel,
Manvel, Texas
Sylvester Banking Company,
Sylvester, Georgia
The First National Bank of
Alexander City,
Alexander City, Alabama
State Bank of Butterfield,
Butterfield, Minnesota
Aplington Insurance Inc.,
Aplington, Iowa
State Savings Bank,
Aplington, Iowa
New Farmers National Bank of
Glasgow,
Glasgow, Kentucky
Tipton Co., Inc.,
Tipton, Iowa
Tipton State Bank,
Tipton, Iowa
First National Bank,
Haysville, Kansas
Home State Bank of Crystal
Lake,
Crystal Lake, Illinois
Security State Bank of Pillager,
Pillager, Minnesota
State Bank of McGregor,
McGregor, Minnesota
Reserve
Bank
Effective
date
Kansas City
July 22, 1983
Atlanta
August 8, 1983
Kansas City
July 29, 1983
Kansas City
July 29, 1983
Atlanta
July 28, 1983
St. Louis
July 29, 1983
Dallas
August 4, 1983
Atlanta
August 1, 1983
Atlanta
July 26, 1983
Minneapolis
August 5, 1983
Chicago
August 3, 1983
St. Louis
July 28, 1983
Chicago
August 8, 1983
Kansas City
July 27, 1983
Chicago
August 5, 1983
Minneapolis
August 8, 1983
Minneapolis
July 29, 1983
742
Federal Reserve Bulletin • September 1983
Section 3—Continued
Bank(s)
Applicant
N.B.C. Bancshares in
Pawhuska, Inc.,
Pawhuska, Oklahoma
Reelfoot Bancshares, Inc.,
Union City, Tennessee
Republic Bancorp of S.C., Inc.
Columbia, South Carolina
Security Chicago Corp.,
Chicago, Illinois
Southwest First Community
Inc.,
Beeville, Texas
Stanley Corp.,
Stanley, Kansas
Tonica Bancorp, Inc.,
Tonica, Illinois
Washington Independent Bancshares, Inc.,
Olympia, Washington
Waxahachie Bancshares, Inc.,
Waxahachie, Texas
National Bank of Commerce in
Pawhuska,
Pawhuska, Oklahoma
Reelfoot Bank,
Hornbeak, Tennessee
Republic National Bank,
Columbia, South Carolina
First Security Bank of Chicago,
Chicago, Illinois
American Corporation,
Sinton, Texas
Commercial State Bank,
Sinton, Texas
Stanley Bancshares, Inc.,
Stanley, Kansas
State Bank of Stanley
Stanley, Kansas
The Farmers State Bank of
Lostant,
Lostant, Illinois
Harbor Security Bank,
McCleary, Washington
First National Bank of
Waxahachie,
Waxahachie, Texas
Reserve
Bank
Effective
date
Kansas City
July 22, 1983
St. Louis
August 1, 1983
Richmond
August 5, 1983
Chicago
August 19, 1983
Dallas
August 3, 1983
Kansas City
July 29, 1983
Chicago
August 3, 1983
San Francisco
July 29, 1983
Dallas
August 9, 1983
Section 4
Nonbanking
company
Applicant
Security Pacific Corporation,
Los Angeles, California
ORDERS APPROVED
General Finance Service
Corporation,
Huntingdon, Pennsylvania
The Budget Plan of Virginia,
Huntingdon, Pennsylvania
UNDER BANK MERGER
Reserve
Bank
San Francisco
Effective
date
August 2, 1983
ACT
By the Board of Governors
Applicant
United Virginia Bank,
Richmond, Virginia
Bank
State Bank of Keysville,
Keysville, Virginia
^ate^
August 11, 1983
Legal Developments
By Federal Reserve
Banks
Security Bank of Monroe,
Monroe, Michigan
CASES INVOLVING
Security Bank-Monroe County,
Newport, Michigan
THE BOARD OF
Chicago
Effective
date
August 8, 1983
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.
Independent Insurance Agents of America, Inc. and
Independent Insurance Agents of Missouri, Inc. v.
Board of Governors, filed June 1983, U . S . C A . for
the Eighth Circuit (two cases).
The Committee for Monetary Reform, et al., v. Board
of Governors,
filed June 1983, U . S . D . C . for the
District of Columbia.
Dakota Bankshares, Inc. v. Board of Governors, filed
May 1983m U . S . C . A . for the Eighth Circuit.
Jet Courier Services, Inc., et al. v. Federal
Reserve
Bank of Atlanta,
et al. filed February 1983,
U.S.C.A. for the Sixth Circuit.
Securities Industry Association
v. Board of Governors, et al., filed February 1983, U . S . C . A . for the
Second Circuit.
Flagship Banks, Inc. v. Board of Governors,
filed
January 1983, U . S . D . C . for the District of Columbia.
Flagship Banks, Inc. v. Board of Governors,
filed
October 1982, U . S . D . C . for the District of Columbia.
Association
of Data Processing
Service
Organizations, Inc., et al. v. Board of Governors,
filed
August 1982, U . S . C . A . for the District of Columbia.
Richter v. Board of Governors, et al. filed May 1982,
U.S.D.C. for the Northern District of Illinois.
Wyoming Bancorporation v. Board of Governors, filed
May 1982, U . S . C . A . for the Tenth Circuit.
First Bancorporation
v. Board of Governors,
filed
April 1982, U . S . C . A . for the Tenth Circuit.
Reserve
Bank
Bank(s)
Applicant
PENDING
743
Charles G. Vick v. Paul A. Volcker, et al., filed March
1982, U . S . D . C . for the District of Columbia.
Jolene Gustafson v. Board of Governors, filed March
1982, U . S . C . A . for the Fifth Circuit.
Edwin F. Gordon v. Board of Governors, et al., filed
October 1981, U . S . C . A . for the Eleventh Circuit
(two consolidated cases).
Allen Wolfson v. Board of Governors, filed September
1981, U . S . D . C . for the Middle District of Florida.
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.
First Bank & Trust Company v. Board of Governors,
filed February 1981, U . S . D . C . for the Eastern District of Kentucky.
9 to 5 Organization for Women Office Workers v.
Board
of Governors,
f i l e d D e c e m b e r 1980,
U.S.D.C. for the District of Massachusetts.
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 . C . A . for the District of Columbia.
A. G. Becker, Inc. v. Board of Governors, et al., filed
August 1980, U . S . C . A . 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.
A1
Financial and Business Statistics
CONTENTS
Domestic Financial
A3
A4
A5
A6
Statistics
Monetary aggregates and interest rates
Reserves of depository institutions, Reserve
Bank credit
Reserves and borrowings of depository
institutions
Federal funds and repurchase agreements of
large member banks
POLICY
WEEKLY REPORTING
BANKS
Assets and liabilities
A20
All reporting banks
A21
Banks with assets of $1 billion or more
ALL
Banks in N e w York City
A23
Balance sheet memoranda
A24
Branches and agencies of foreign banks
A25 Gross demand deposits of individuals,
partnerships, and corporations
INSTRUMENTS
FINANCIAL
A7
A8
A9
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Maximum interest rates payable on time and
savings deposits at federally insured institutions
A l l Federal Reserve open market transactions
FEDERAL
COMMERCIAL
RESERVE
BANKS
A12 Condition and Federal Reserve note statements
A13 Maturity distribution of loan and security
holdings
A26 Commercial paper and bankers dollar
acceptances outstanding
A26 Prime rate charged by banks on short-term
business loans
All Terms of lending at commercial banks
A28 Interest rates in money and capital markets
A29 Stock market—Selected statistics
A30 Selected financial institutions—Selected assets
and liabilities
FEDERAL
MONETARY AND CREDIT
AGGREGATES
A l 4 Aggregate reserves of depository institutions
and monetary base
A15 Money stock measures and components
A16 Bank debits and deposit turnover
A17 Loans and securities of all commercial banks
COMMERCIAL BANKING
INSTITUTIONS
A18 Major nondeposit funds
A19 Assets and liabilities, last Wednesday-of-month
series
MARKETS
A31
A32
A33
A33
FINANCE
Federal fiscal and financing operations
U.S. Budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U . S . Treasury—Types and
ownership
A34 U.S. government securities dealers—
Transactions, positions, and financing
A35 Federal and federally sponsored credit
agencies—Debt outstanding
2
Federal Reserve Bulletin • September 1983
SECURITIES MARKETS AND
CORPORATE
FINANCE
International
A36 N e w 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 and business credit
REAL
ESTATE
A40 Mortgage markets
A41 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A42 Total outstanding and net change
A43 Terms
FLOW OF FUNDS
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
U.S. international transactions—Summary
U . S . foreign trade
U . S . reserve assets
Foreign official assets held at Federal Reserve
Banks
A56 Foreign branches of U . S . banks—Balance sheet
data
A58 Selected U . S . liabilities to foreign official
institutions
A54
A55
A55
A55
REPORTED BY BANKS IN THE UNITED
STATES
A58
A59
A61
A62
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A62 Banks' own claims on unaffiliated foreigners
A63 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING
BUSINESS
ENTERPRISES IN THE UNITED STATES
A64 Liabilities to unaffiliated foreigners
A65 Claims on unaffiliated foreigners
A44 Funds raised in U . S . credit markets
A45 Direct and indirect sources of funds to credit
markets
Domestic Nonfinancial
Statistics
SECURITIES
HOLDINGS AND
TRANSACTIONS
A66 Foreign transactions in securities
A67 Marketable U . S . Treasury bonds and notes—
Foreign holdings and transactions
INTEREST AND EXCHANGE
RATES
A67 Discount rates of foreign central banks
A68 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular Presentation,
Statistical Releases, and Special
Tables
Domestic Financial Statistics
1.10
A3
MONETARY AGGREGATES A N D INTEREST RATES
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent) 1
Item
1982
Q4
Q3
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 2
5
6
7
8
Concepts of money and liquid
Ml
M2
M3
L
1983
1983
Mar.
Q2
Ql
Apr.
May
June
July
institutions
5.1
4.9
11.5
6.8
11.0
10.1
12.7
8.0
1.1
.8
.6
8.6
9.2
9.4
3.7
10.4
19.7
20.0
13.6
15.0
8.8
7.6
2.5
7.3
-1.9
-1.1
-.2
10.0
14.0
13.2
-6.0
9.9
6.0
5.2
11.7
6.1
6.1
10.9
12.5
12.1
13.1
9.3
9.5
8.6
14.1
20.3
10.2
n.a.
12.2
10.1
8.1
n.a.
15.9
11.2
8.1
11.3
-2.7
2.8
3.4
7.3'
26.3
12.4'
11.0
n.a.
10.2
10.4'
11.0
n.a.
8.9
6.3
5.0
n.a.
18.2
-1.8
18.7
26.8
6.5
3.2
13.4
-.5
-6.8
6.2
12.4
-43.4
-48.5
-58.5
12.1
4.5
-14.8
24. 1'
-20.8
16.0
2.9
-19.9
-38.7
-27.7
16.9'
6.8
-12.6
-19.5
.8
16.6
-2.9
0
-13.3'
-37.3
9.9'
11.1
2.6'
3.0
2.1
13.3'
6.9
-10.2
24.4
-7.1
14.3
6.0
5.5
9.8
9.8'
8.7
10.7
9.9'
9.7
assets3
Time and savings deposits
Commercial banks
9
Total
10
Savings 4
U
Small-denomination time 5
12
Large-denomination time 6
13 Thrift institutions 7
14 Total loans and securities at commercial banks 8
11.2
Interest rates (levels, percent per annum)
1982
Q3
15
16
17
18
Short-term rates
Federal funds 9
Discount window borrowing 1 0
Treasury bills (3-month, secondary market) 1
Commercial paper (3-month) 1 1 1 2
Long-term rates
Bonds
19
U.S. government 1 3
20
State and local government 1 4
21
Aaa utility (new issue)
22 Conventional mortgages
Q4
1983
Q2
Ql
Apr.
May
June
July
Aug.
11.01
10.83
9.32
11.15
9.28
9.25
7.90
8.80
8.65
8.50
8.11
8.34
8.80
8.50
8.40
8.62
8.80
8.50
8.21
8.53
8.63
8.50
8.19
8.33
8.98
8.50
8.79
9.00
9.37
8.50
9.08
9.25
9.56
8.50
9.34
9.54
12.94
11.39
14.25
15.65
10.72
9.90
12.10
13.79
10.87
9.43
11.89
13.26
10.81
9.23
11.46
13.16
10.63
9.05
11.41
13.02
10.67
9.11
11.32
13.09
11.12
9.52
11.87
13.37
11.59
9.53
12.32
14.00
11.%
9.72
12.25
n.a.
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Includes reserve balances at Federal Reserve Banks in the current week
plus vault cash held two weeks earlier used to satisfy reserve requirements at all
depository institutions plus currency outside the U.S. Treasury, Federal Reserve
Banks, the vaults of depository institutions, and surplus vault cash at depository
institutions.
3. M l : Averages of daily figures for (1) currency outside the Treasury, Federal
Reserve Banks, and the vaults of commercial banks; (2) travelers checks of
nonbank issuers; (3) demand deposits at all commercial banks other than those
due to domestic banks, the U.S. government, and foreign banks and official
institutions less cash items in the process of collection and Federal Reserve float;
and (4) negotiable order of withdrawal (NOW) and automatic transfer service
(ATS) accounts at banks and thrift institutions, credit union share draft (CUSD)
accounts, and demand deposits at mutual savings banks.
M2: Ml plus money market deposit accounts (MMDAs), savings and smalldenomination time deposits at all depository institutions, overnight repurchase
agreements at commercial banks, overnight Eurodollars held by U.S. residents
other than banks at Caribbean branches of member banks, and balances of money
market mutual funds (general purpose and broker/dealer).
M3: M2 plus large-denomination time deposits at all depository institutions
and term RPs at commercial banks and savings and loan associations and balances
of institution-only money market mutual funds.
L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents
other than banks, bankers acceptances, commercial paper, Treasury bills and
other liquid Treasury securities, and U.S. savings bonds.
4. Savings deposits exclude NOW and ATS accounts at commercial banks
and thrifts and CUSD accounts at credit unions.
1983
5. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000.
6. Large-denomination time deposits are those issued in amounts of $100,000
or more.
7. Savings and loan associations, mutual savings banks, and credit unions.
8. Changes calculated from figures shown in table 1.23. Beginning December
1981, growth rates reflect shifts of foreign loans and securities from U.S. banking
offices to international banking facilities.
9. Averages of daily effective rates (average of the rates on a given date
weighted by the volume of transactions at those rates).
10. Rate for the Federal Reserve Bank of New York.
11. Quoted on a bank-discount basis.
12. Unweighted average of offering rates quoted by at least five dealers.
13. Market yields adjusted to a 20-year maturity by the U.S. Treasury.
14. Bond Buyer series for 20 issues of mixed quality.
15. Weighted averages of new publicly offered bonds rated 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 Department of Housing and Urban Development.
NOTE. Revisions in reserves of depository institutions reflect the transitional
phase-in of reserve requirements as specified in the Monetary Control Act of
1980.
A4
DomesticNonfinancialStatistics • September 1983
1.11
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
1983
1983
Factors
June
July
Aug.
162,133
164,799
164,461
166,199
164,397
164,237
164,132
165,081
164,958
163,779
141,484
141,177
307
8,922
8,895
27
38
1,716
1,670
8,303
11,131
4,618
13,786
143,971
143,122
849
8,950
8,883
67
55
1,382
1,812
8,629
11,131
4,618
13,786
144,893
144,820
73
8,855
8,849
6
7
1,576
1,114
8,016
11,129
4,618
13,786
145,461
142,841
2,620
9,036
8,880
156
129
1,236
1,573
8,764
11,131
4,618
13,786
143,896
143,8%
0
8,880
8,880
0
0
1,387
1,542
8,691
11,131
4,618
13,786
143,975
143,975
0
8,880
8,880
0
0
1,311
1,596
8,475
11,131
4,618
13,786
143,967
143,967
0
8,880
8,880
0
0
1,520
1,137
8,629
11,130
4,618
13,786
145,456
145,456
0
8,880
8,880
0
0
1,474
1,086
8,186
11,128
4,618
13,786
145,584
145,584
0
8,880
8,880
0
0
1,580
1,380
7,534
11,128
4,618
13,786
144,901
144,578
323
8,769
8,742
27
30
1,714
842
7,524
11,128
4,618
13,786
159,177
536
160,683
520
160,984
491
160,709
524
159,916
512
160,240
494
161,294
515
161,443
515
160,893
494
160,453
490
3,525
219
541
4,017
252
623
3,554
228
477
3,309
262
690
4,517
231
620
4,024
292
604
3,815
228
504
3,310
233
446
3,559
204
449
3,300
237
431
July 20
July 27
Aug. 3
Aug. 10
Aug. 17
Aug. 24P
Aug. 3 IP
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
2
3
4
5
6
7
8
9
10
11
12
13
14
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
Gold stock
Special drawing rights certificate account .
Treasury currency outstanding
ABSORBING RESERVE FUNDS
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserves, with Federal
Reserve Banks
17 Treasury
18 Foreign
19 Other
20 Service-related balances and adjustment...
21 Other Federal Reserve liabilities and
capital
22 Reserve accounts 2
754
902
1,096
884
979
982
1,167
1,065
979
1,069
5,107
21,808
5,197
22,139
5,249
21,915
5,313
24,042
5,260
21,897
5,158
21,976
5,116
21,029
5,332
22,269
5,299
22,614
5,289
22,043
End-of-month figures
Wednesday figures
1983
1983
June
July
Aug.
23 Reserve Bank credit outstanding
164,037
163,893
167,778
170,356
163,698
166,134
166,137
164,608
163,571
167,778
24
25
26
27
28
29
30
31
32
33
141,673
140,511
1,162
9,105
8,890
215
203
3,610
1,020
8,426
144,255
144,255
0
8,880
8,880
0
0
1,113
1,066
8,579
146,489
144,226
2,263
8,932
8,742
190
209
3,633
979
7,536
147,911
144,125
3,786
9,020
8,880
140
74
2,484
1,825
9,042
143,500
143,500
0
8,880
8,880
0
0
1,349
1,497
8,472
144,322
144,322
0
8,880
8,880
0
0
2,478
1,806
8,648
145,249
145,249
0
8,880
8,880
0
0
1,163
2,033
8,812
144,972
144,972
0
8,880
8,880
0
0
1,722
1,421
7,613
144,696
144,696
0
8,880
8,880
0
0
1,612
872
7,511
146,489
144,226
2,263
8,932
8,742
190
209
3,633
979
7,536
11,131
4,618
13,786
11,131
4,618
13,786
11,128
4,618
13,786
11,131
4,618
13,786
11,131
4,618
13,786
11,131
4,618
13,786
11,128
4,618
13,786
11,128
4,618
13,786
11,128
4,618
13,786
11,128
4,618
13,786
160,419
533
159,973
495
161,122
490
160,383
520
160,002
505
160,814
488
161,662
515
161,307
515
160,647
490
161,122
490
8,764
279
470
775
3,815
369
566
830
4,189
248
465
845
3,998
268
672
823
3,315
242
589
827
3,586
214
518
832
2,804
282
500
836
3,991
223
452
843
3,025
208
540
845
4,189
248
465
845
5,111
17,220
5,178
22,201
5,112
24,839
5,179
28,047
5,022
22,730
4,987
24,230
5,036
24,034
5,173
21,636
5,144
22,204
5,112
24,839
July 20
July 27
Aug. 3
Aug. 10
Aug. 17
Aug. 24
Aug. 31
SUPPLYING RESERVE F U N D S
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
ABSORBING RESERVE FUNDS
37 Currency in circulation
38 Treasury cash holdings
Deposits, other than reserves, with Federal
Reserve Banks
39 Treasury
40 Foreign
41 Other
42 Service-related balances and adjustment...
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
1.12
RESERVES A N D BORROWINGS
Institutions
A5
Depository Institutions
Millions of dollars
Monthly averages of daily figures
Reserve classification
1 Reserve balances with Reserve Banks1
2 Total vault cash (estimated)
3 Vault cash at institutions with required
reserve balances 2
4 Vault cash equal to required reserves at
other institutions
5 Surplus vault cash at other institutions3
6 Reserve balances + total vault cash 4
7 Reserve balances + total vault cash used
to satisfy reserve requirements 4 5
8 Required reserves (estimated)
9 Excess reserve balances at Reserve Banks 4 ' 6
10 Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
II
Extended credit at Reserve Banks
12
1981
1982
Dec.
Dec.
1983
Feb.
Jan.
Mar.
Apr.
May
June
July
Aug.P
26,163
19,538
24,804
20,392
24,431
21,454
23,530
20,035
22,168
19,484
22,565
19,569
22,010
19,710
21,808
20,098
22,139
20,413
21,915
20,263
13,577
14,292
14,602
13,705
13,027
13,246
13,339
13,593
13,647
13,746
2,178
3,783
45,701
2,757
3,343
45,196
2,829
4,023
45,885
2,562
3,768
43,565
2,844
3,613
41,652
2,839
3,484
42,134
2,933
3,438
41,720
3,014
3,491
41,906
3,161
3,605
42,552
2,941
3,576
42,178
41,918
41,606
312
642
53
149
41,853
41,353
500
697
33
187
41,862
41,316
546
500
33
156
39,797
39,362
435
557
39
277
38,039
37,602
437
852
53
318
38,650
38,174
476
993
82
407
38,282
37,833
449
902
98
514
38,415
37,935
480
1,714
121
964
38,947
38,440
507
1,382
172
572
38,602
38,211
391
1,576
198
490
Weekly averages of daily figures for week ending
1983
June 29
13 Reserve balances with Reserve Banks1
14 Total vault cash (estimated)
15 Vault cash at institutions with required
reserve balances 2
16 Vault cash equal to required reserves at
other institutions
17 Surplus vault cash at other institutions 3 ...
18 Reserve balances + total vault cash 4
19 Reserve balances + total vault cash used
to satisfy reserve requirements 4 ' 5
20 Required reserves (estimated)
21 Excess reserve balances at Reserve Banks 4 ' 6
22 Total borrowings at Reserve Banks
23
Seasonal borrowings at Reserve Banks .
24
Extended credit at Reserve Banks
July 6
July 20p
July IIP
Aug. 3
Aug. 10
Aug. 17
Aug. 24p
Aug. 31P
22,254
20,150
22,124
20,284
20,586
21,027
24,042
19,182
21,897
20,984
21,976
20,684
21,029
20,804
22,269
20,284
22,614
19,409
22,043
20,402
13,869
13,749
13,625
12,926
14,162
13,896
13,733
13,393
13,595
13,990
2,919
3,362
42,404
3,050
3,485
42,408
3,531
3,871
41,613
2,861
3,395
43,224
3,195
3,627
42,881
3,144
3,644
42,660
3,325
3,746
41,833
3,144
3,747
42,553
2,550
3,264
42,023
2,878
3,534
42,445
39,042
38,557
485
2,102
143
1,262
38,923
38,069
854
2,234
143
1,103
37,742
37,246
496
1,147
144
434
39,829
39,503
326
1,236
179
460
39,254
38,882
372
1,387
203
464
39,016
38,454
562
1,311
192
445
38,087
37,693
394
1,520
178
457
38,806
38,358
448
1,474
194
502
38,759
38,341
418
1,580
207
524
38,911
38,349
562
1,714
216
499
1. As of Aug. 13, 1981, excludes required clearing balances of all depository
institutions.
2. Before Nov. 13, 1980, the figures shown reflect only the vault cash held by
member banks.
3. Total vault cash at institutions without required reserve balances less vault
cash equal to their required reserves.
4. 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 13
existing member bank, or when a nonmember bank joins the Federal Reserve
System. For weeks for which figures are preliminary, figures by class of bank do
not add to total because adjusted data by class are not available.
5. Reserve balances with Federal Reserve Banks, which exclude required
clearing balances plus vault cash at institutions with required reserve balances
plus vault cash equal to required reserves at other institutions.
6. Reserve balances with Federal Reserve Banks, which exclude required
clearing balances plus vault cash used to satisfy reserve requirements less
required reserves. (This measure of excess reserves is comparable to the old
excess reserve concept published historically.)
A6
1.13
DomesticNonfinancialStatistics • September 1983
FEDERAL FUNDS A N D REPURCHASE AGREEMENTS
Large Member Banks'
A v e r a g e s of daily figures, in millions of dollars
1983, week ending Wednesday
By maturity and source
July 6
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
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.
July 13
July 20
July 27
Aug. 3
Aug. 10
Aug. 17
Aug. 24
Aug. 31
67,387'
66,505'
60,000'
57,096'
60,046
62,652
58,593
53,344
52,437
22,375'
5,307
26,274'
23,141'
4,715'
25,863'
23,965'
4,928'
25,045'
24,160'
4,764
25,374'
23,992
4,292
24,222
24,440
4,581
24,340
23,822
4,571
25,478
24,299
4,761
25,886
23,803
3,877
25,195
5,273'
5,016
5,322
5,481'
5,680
5,637
5,702
5,822
6,184
10,416
5.075
8,628'
10,368
5,039
7,851
10,833
5,938
8,043
9,668
5,930'
8,418'
9,240
6,324
8,524
9,185
6,326
8,254
9,388
6,169
8,821
9,284
6,232
9,186
9,105
6,582
9,606
30,802'
4,623
29,534
4,439
27,359'
4,828
26,320'
4,042'
28,424
4,631
24,801
4,675
23,095
5,289
22,415
5,354
23,065
4,710
Policy Instruments
1.14
All
FEDERAL RESERVE B A N K INTEREST RATES
Percent p e r a n n u m
Current and previous levels
Extended credit1
Short-term adjustment credit
and seasonal credit
Federal Reserve
Bank
Rate on
8/31/83
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City . . . .
Dallas
San Francisco...
m
8'/2
First 60 days
of borrowing
Next 90 days
of borrowing
In effect Dec. 31, 1973
1974— Apr. 25
30
Dec. 9
16
Previous
rate
Rate on
8/31/83
Previous
rate
Rate on
8/31/83
Previous
rate
Rate on
8/31/83
Previous
rate
12/14/82
12/15/82
12/17/82
12/15/82
12/15/82
12/14/82
9
8'/2
9
91/2
10
10'/2
11
12/14/82
12/14/82
12/14/82
12/15/82
12/14/82
12/14/82
9
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
7V5
7>/i-8
8
73/4-8
73/4
71/2
8
8
73/4
73/4
3
6
10
24
Feb. 5
7
Mar. 10
14
May 16
23
7'/4-7 /4
71/4-73/4
71/4
63/4-7'/4
63/4
6l/4-63/4
6'/4
6-6 'A
6
73/4
71/4
71/4
63/4
63/4
61/4
6'/4
6
6
1976— Jan. 19
23
Nov. 22
26
51/2-6
5'/>
51/4-51/2
51/4
51/2
51/2
51/4
51/4
1977— Aug. 30
31
Sept. 2
Oct. 26
51/4-53/4
51/4-53/4
53/4
6
5'/4
53/4
53/4
6
1975— Jan.
1978— Jan.
9
20
May 11
12
8'/2
6-61/2
6>/2
6'/>-7
7
6 Vi
6V2
7
7
Effective date
3
10
Aug. 71
Sept. 77
Oct. 16
?n
Nov. 1
3
1978— July
9
9'/2
10
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
7-71/4
7'/4
73/4
8
8-81/2
8'/2
71/4
71/4
m
9'/>
1979— July 70
Aug. 17
70
Sept. 19
71
Oct. 8
10
10
10-10'/2
101/2
101/2-11
11
11-12
12
10
101/!
101/2
11
11
12
12
1980— Feb. 15
19
May 29
30
June 13
16
Julv 78
29
Sept. 76
Nov. 17
Dec.
8
12-13
13
12-13
12
11-12
13
13
13
12
11
10-11
10
11
12
12-13
13
10
10
11
12
13
13
S'/2-9'/2
101/2
12/14/82
12/15/82
12/17/82
12/15/82
12/15/82
12/14/82
12/14/82
12/14/82
12/14/82
12/15/82
12/14/82
12/14/82
1
2
8
81/2
81/2
9'/2
91/2
1. 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.
2. 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, 1970-1979, 1980,
and 1981.
Effective date
for current rates
Effective
date
Range of rates in recent years
Effective date
After 150 days
Effective date
1981— May
5
8
Nov. 2
6
Dec. 4
1982— July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
In effect Aug. 31, 1983
Range (or
level)—
All F.R.
Banks
13-14
14
13-14
13
12
F.R.
Bank
of
N.Y.
14
14
13
13
12
111/2-12
ll'/2
11-111/2
11
101/2
10-101/2
10
91/2-10
9>/2
9-9'/2
9
8 i/i-9
8'/2-9
81/2
111/2
11 '/2
11
11
101/2
10
10
91/2
91/2
9
9
9
81/2
81/2
81/2
8'/2
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. There was no surcharge until Nov. 17, 1980, when a 2 percent surcharge was
adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and
to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective
Sept. 22, 1981, and to 2 percent effective Oct. 12. As of Oct. 1, the formula for
applying the surcharge was changed from a calendar quarter to a moving 13-week
period. The surcharge was eliminated on Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • September 1983
1.15
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS'
Percent of deposits
Type of deposit, and
deposit interval
Member bank requirements
before implementation of the
Monetary Control Act
Percent
Effective date
Net demand2
Time and savings1^
Savings
Time4
$0 million-$5 million, by maturity
30-179 days
180 days to 4 years
4 years or more
Over $5 million, by maturity
30-179 days
180 days to 4 years
4 years or more
113/4
123/4
16L/4
12/30/76
12/30/76
12/30/76
12/30/76
12/30/76
3
3/16/67
3
2Vz
1
6
2 Vi
1
Effective date
3
12
12/30/82
12/30/82
Nonpersonal time deposits9
By original maturity
Less than 2Vi years
2 Vi years or more
3
0
3/31/83
3/31/83
Eurocurrency liabilities
All types
3
11/13/80
8
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 offoreign banks, and Edge Act
corporations.
2. 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 and demand balances due from domestic banks.
The Federal Reserve Act as amended through 1978 specified different ranges of
requirements for reserve city banks and for other banks. Reserve cities were
designated under a criterion adopted effective Nov. 9, 1972, by which a bank
having net demand deposits of more than $400 million was considered to have the
character of business of a reserve city bank. 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 banks outside of reserve cities and were permitted to
maintain reserves at ratios set for banks not in reserve cities.
Effective Aug. 24, 1978, the Regulation M reserve requirements on net balances
due from domestic banks to their foreign branches and on deposits that foreign
branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent
respectively. The Regulation D reserve requirement of borrowings from unrelated
banks abroad was also reduced to zero from 4 percent.
Effective with the reserve computation period beginning Nov. 16, 1978,
domestic deposits of Edge corporations were subject to the same reserve
requirements as deposits of member banks.
3. Negotiable order of withdrawal (NOW) accounts and time deposits such as
Christmas and vacation club accounts were subject to the same requirements as
savings deposits.
The average reserve requirement on savings and other time deposits before
implementation of the Monetary Control Act had to be at least 3 percent, the
minimum specified by law.
4. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent
was imposed on large time deposits of $100,000 or more, obligations of affiliates,
and ineligible acceptances. This supplementary requirement was eliminated with
the maintenance period beginning July 24, 1980.
Effective with the reserve maintenance period beginning Oct. 25, 1979, a
marginal reserve requirement of 8 percent was added to managed liabilities in
excess of a base amount. This marginal requirement was increased to 10 percent
beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and
was eliminated 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
reserve computation periods 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 iVi
Depository institution requirements
after implementation of the
Monetary Control Act 6
Percent
Net transaction accounts7
7
9</z
$10 million-$100 million
$100 million-$400 million
Over $400 million
Type of deposit, and
deposit interval5
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. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 97320) provides that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the next succeeding calendar year by 80 percent of the
percentage increase in the total reservable liabilities of all depository institutions,
measured on an annual basis as of June 30. No corresponding adjustment is to be
made in the event of a decrease. Effective Dec. 9, 1982, the amount of the
exemption was established at $2.1 million. In determining the reserve requirements of a depository institution, the exemption shall apply in the following order:
(1) nonpersonal money market deposit accounts (MMDAs) authorized under 12
CFR section 1204.122; (2) net NOW accounts (NOW accounts less allowable
deductions); (3) net other transaction accounts; and (4) nonpersonal time deposits
or Eurocurrency liabilities starting with those with the highest reserve ratio. With
respect to NOW accounts and other transaction accounts, the exemption applies
only to such accounts that would be subject to a 3 percent reserve requirement.
6. For nonmember banks and thrift institutions that were not members of the
Federal Reserve System on or after July 1, 1979, a phase-in period ends Sept. 3,
1987. For banks that were members on or after July 1, 1979, but withdrew on or
before Mar. 31, 1980, the phase-in period established by Public Law 97-320 ends
on Oct. 24, 1985. 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. All new institutions will have a two-year phase-in
beginning with the date that they open for business, except for those institutions
that have total reservable liabilities of $50 million or more.
7. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers (in excess
of three per month) for the purpose of making payments to third persons or others.
However, MMDAs and similar accounts offered by institutions not subject to the
rules of the Depository Institutions Deregulation Committee (DIDC) that permit
no more than six preauthorized, automatic, or other transfers per month of which
no more than three can be checks—are not transaction accounts (such accounts
are savings deposits subject to time deposit reserve requirements.)
8. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage increase in transaction accounts held by
all depository institutions determined as of June 30 each year. Effective Dec. 31,
1981, the amount was increased accordingly from $25 million to $26 million; and
effective Dec. 30, 1982, to $26.3 million.
9. 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
1.16
Instruments
All
M A X I M U M I N T E R E S T R A T E S P A Y A B L E o n T i m e and Savings D e p o s i t s at Federally Insured Institutions
Percent p e r a n n u m
Savings and loan associations and
mutual savings banks (thrift institutions)
Commercial banks
Type and maturity of deposit
1 Savings
2 Negotiable order of withdrawal accounts 2 ..
In effect Aug. 31, 1983
Previous maximum
Effective
date
Effective
date
51/4
5'/4
7/1/79
12/31/80
Previous maximum
In effect Aug. 31, 1983
Percent
7/1/73
1/1/74
5Vi
7/1/73
7/1/73
1/21/70
1/21/70
1/21/70
(6)
6
6>/i
5'/4
Effective
date
Percent
7/1/79
12/31/80
51/4
5
3
3
4
5
6
7
8
9
10
11
12
Time accounts
Fixed ceiling rates by maturity4
14-89 d a y s r
90 days to 1 year
1 to 2 years7
2 to 2'A years 7
l x h to 4 years7
4 to 6 years 8
6 to 8 years 8
8 years or more 8
Issued to governmental units (all
maturities)10
IRAs and Keogh (H.R. 10) plans (3 years
or more)10-11
5V4
5 3 /4
8/1/79
1/1/80
7/1/73
11/1/73
12/23/74
6/1/78
5V2
5V2
53/4
5 3 /4
(9)
71/4
(6)
6/1/78
7 3 /4
6/1/78
3
7/1/73
6W
7'/4
V/l
m
5
1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loans.
2. 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 NOW accounts was extended to similar
institutions throughout New England on Feb. 27, 1976, New York State on
Nov. 10, 1978, New Jersey on Dec. 28, 1979, and to similar institutions nationwide
effective Dec. 31, 1980. Effective Jan. 5, 1983, the interest rate ceiling is removed
for NOW accounts with an initial balance and average maintenance balance of
$2,500.
3. For exceptions with respect to certain foreign time deposits, see the
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 r u a r y 1968
(p. 167).
4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts
at savings and loan associations was decreased to 14 days and the minimum
maturity period for time deposits at savings and loan associations in excess of
$100,000 was decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity
or notice period for time deposits was decreased from 30 to 14 days at mutual
savings banks.
5. Effective Oct. 30, 1980, the minimum maturity or notice period for time
deposits was decreased from 30 to 14 days at commercial banks.
6. No separate account category.
7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was
required for savings and loan associations, except in areas where mutual savings
banks permitted lower minimum denominations. This restriction was removed for
deposits maturing in less than 1 year, effective Nov. 1, 1973.
8. No minimum denomination. Until July 1, 1979, the minimum denomination
was $1,000 except for deposits representing funds contributed to an individual
retirement account (IRA) or a Keogh (H.R. 10) plan established pursuant to the
Internal Revenue Code. The $1,000 minimum requirement was removed for such
accounts in December 1975 and November 1976 respectively.
7 /4
i/1/80
5 3 /4
5 3 /4
8
(')
(')
11/1/73
12/23/74
6/1/78
12/23/74
8
6/1/78
7 3 /4
7/6/77
8
6/1/78
7 3 /4
6 3 /4
71/2
11/1/73
7 3 /4
6
6
(*)
V/2
(6)
9. Between July 1, 1973, and Oct. 31, 1973, certificates maturing in 4 years or
more with minimum denominations of $ 1,000 had no ceiling; however, the amount
of such certificates that an institution could issue was limited to 5 percent of its
total time and savings deposits. Sales in excess of that amount, as well as
certificates of less than $1,000, were limited to the 6'/i percent ceiling on time
deposits maturing in 2xh years or more. Effective Nov. 1, 1973, ceilings were
reimposed on certificates maturing in 4 years or more with minimum denominations of $1,000. There is no limitation on the amount of these certificates that
banks can issue.
10. Accounts subject to fixed-rate ceilings. See footnote 8 for minimum
denomination requirements.
11. Effective Jan. 1, 1980, commercial banks are permitted to pay the same rate
as thrifts on IRA and Keogh accounts and accounts of governmental units when
such deposits are placed in 21/2-year-or-more variable-ceiling certificates or in 26week money market certificates regardless of the level of the Treasury bill rate.
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; the maximum rates for 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.
For deposits subject to variable ceiling rates and deposits not subject to interest rate ceilings see page A10.
(6)
A10
1.16
DomesticNonfinancialStatistics • September 1983
Continued
TIME DEPOSITS SUBJECT TO VARIABLE CEILING RATES
91-day time deposits. Effective May 1, 1982, depository institutions were
authorized to offer time deposits that have a minimum denomination of $7,500 and
a maturity of 91 days. Effective Jan. 5, 1983, the minimum denomination required
for this deposit is reduced to $2,500. The ceiling rate of interest on these deposits
is indexed to the discount rate (auction average) on most recently issued 91-day
Treasury bills for thrift institutions and the discount rate minimum 25 basis points
for commercial banks. The rate differential ends 1 year from the effective date of
these instruments and is suspended at any time the Treasury bill discount rate is 9
percent or below for four consecutive auctions. The maximum allowable rates in
August 1983 (in percent) for commercial banks and thrifts were as follows: Aug. 2,
9.36; Aug. 9, 9.57; Aug. 16, 9.43; Aug. 23, 9.18; and Aug. 30, 9.28.
Six-month money market time deposits. Effective June 1, 1978, commercial
banks and thrift institutions were authorized to offer time deposits with a maturity
of exactly 26 weeks and a minimum denomination requirement of $10,000.
Effective Jan. 5, 1983, the minimum denomination required for this deposit is
reduced to $2,500. The ceiling rate of interest on these deposits is indexed to the
discount rate (auction average) on most recently issued 26-week U.S. Treasury
bills. Interest on these certificates may not be compounded. Effective for all 6month money market certificates issued beginning Nov. 1, 1981, depository
institutions may pay rates of interest on these deposits indexed to the higher of (1)
the rate for 26-week Treasury bills established immediately before the date of
deposit (bill rate) or (2) the average of the four rates for 26-week Treasury bills
established for the 4 weeks immediately before the date of deposit (4-week
average bill rate). Ceilings are determined as follows:
Bill rate or 4-week
average bill rate
7.50 percent or below
Above 7.50 percent
7.25 percent or below
Above 7.25 percent, but below
8.50 percent
8.50 percent or above, but below
8.75 percent
8.75 percent or above
Commercial bank ceiling
7.75 percent
'/4 of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate
Thrift ceiling
7.75 percent
'/2 of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate
9 percent
'A of 1 percentage point plus the higher of
the bill rate or 4-week average bill rate
12-month all savers certificates. Effective Oct. 1, 1981, depository institutions
are authorized to issue all savers certificates (ASCs) with a 1-year maturity and an
annual investment yield equal to 70 percent of the average investment yield for 52week U.S. Treasury bills as determined by the auction of 52-week Treasury bills
held immediately before the calendar week in which the certificate is issued. A
maximum lifetime exclusion of $ 1,000 ($2,000 on a joint return) from gross income
is generally authorized for interest income from ASCs. The annual investment
yield for ASCs issued in December 1982 (in percent) was as follows: Dec. 26, 6.26.
1'/2-year to less than 2'/2-year time deposits. Effective Aug. 1, 1981, commercial
banks are authorized to pay interest on any variable ceiling nonnegotiable time
deposit with an original maturity of 2'/2 years to less than 4 years at a rate not to
exceed '/4 of 1 percent below the average 2'/2-year yield for U.S. Treasury
securities as determined and announced by the Treasury Department immediately
before the date of deposit. Effective May 1, 1982, the maximum maturity for this
category of deposits was reduced to less than 3'/2 years. Effective Apr. 1, 1983, the
maximum maturity for this category of deposits was reduced to less than 2V2 years
and the minimum maturity was reduced to l'/2 years. Thrift institutions may pay
interest on these certificates at a rate not to exceed the average 1 '/2-year yield for
Treasury securities as determined and announced by the Treasury Department
immediately before the date of deposit. If the announced average 1 '/2-year yield
for Treasury securities is less than 9.50 percent, commercial banks may pay 9.25
percent and thrift institutions 9.50 percent for these deposits. These deposits have
no required minimum denomination, and interest may be compounded on them.
The ceiling rates of interest at which they may be offered vary biweekly. The
maximum allowable rates in August 1983 (in percent) for commercial banks were
as follows: Aug. 2, 10.45; Aug. 16, 10.80; and Aug. 30, 10.40.; and for thrift
institutions: Aug. 2, 10.70; Aug. 16, 11.05; and Aug. 30, 10.65.
Between Jan. 1, 1980, and Aug. 1, 1981, commercial banks and thrift institutions were authorized to offer variable ceiling nonnegotiable time deposits with no
required minimum denomination and with maturities of 2'/2 years or more.
Effective Jan. 1, 1980, the maximum rate for commercial banks was 3/4 percentage
point below the average yield on 2'/2-year U.S. Treasury securities; the ceiling rate
for thrift institutions was V* percentage point higher than that for commercial
banks. Effective Mar. 1, 1980, a temporary ceiling of ll'/4 percent was placed on
these accounts at commercial banks and 12 percent on these accounts at savings
and loans. Effective June 2, 1980, the ceiling rates for these deposits at
commercial banks and savings and loans were increased '/2 percentage point. The
temporary ceiling was retained, and a minimum ceiling of 9.25 percent for
commercial banks and 9.50 percent for thrift institutions was established.
The maximum rates in August 1983 for commercial banks based on the bill rate
were as follows: Aug. 2, 9.81; Aug. 9, 9.95; Aug. 16,9.80; Aug. 23, 9.54; and Aug.
30, 9.78, and based on the 4-week average bill rate were as follows: Aug. 2, 9.62;
Aug. 9, 9.73; Aug. 16, 9.78; Aug. 23, 9.77; and Aug. 30, 9.76. The maximum
allowable rates in August 1983 for thrifts based on the bill rate were as follows:
Aug. 2, 9.81; Aug. 9, 9.95; Aug. 16, 9.80; Aug. 23, 9.54; and Aug. 30, 9.78; and
based on the 4-week average bill rate were as follows: Aug. 2, 9.62; Aug. 9, 9.73;
Aug. 16, 9.78; Aug. 23, 9.77; and Aug. 30, 9.76.
TIME DEPOSITS NOT SUBJECT TO INTEREST RATE CEILINGS
Money market deposit account. Effective Dec. 14, 1982, depository institutions
are authorized to offer a new account with a required initial balance of $2,500 and
an average maintenance balance of $2,500 not subject to interest rate restrictions.
No minimum maturity period is required for this account, but depository
institutions must reserve the right to require seven days' notice before withdrawals. When the average balance is less than $2,500, the account is subject to the
maximum ceiling rate of interest for NOW accounts; compliance with the average
balance requirement may be determined over a period of one month. Depository
institutions may not guarantee a rate of interest for this account for a period longer
than one month or condition the payment of a rate on a requirement that the funds
remain on deposit for longer than one month. No more than six preauthorized,
automatic, or other third-party transfers are permitted per month, of which no
more than three can be checks. Telephone transfers to third parties or to another
account of the same depositor are regarded as preauthorized transfers.
IRAs and Keogh (H.R. 10) plans (18 months or more). Effective Dec. 1, 1981,
depository institutions are authorized to offer time deposits not subject to interest
rate ceilings when the funds are deposited to the credit of, or in which the entire
beneficial interest is held by, an individual pursuant to an IRA agreement or
Keogh (H.R. 10) plan. Such time deposits must have a minimum maturity of 18
months, and additions may be made to the time deposit at any time before its
maturity without extending the maturity of all or a portion of the balance of the
account.
Time deposits of 7 to 31 days. Effective Sept. 1, 1982, depository institutions
were authorized to issue nonnegotiable time deposits of $20,000 or more with a
maturity or required notice period of 7 to 31 days. The maximum rate of interest
payable by thrift institutions was the rate established and announced (auction
average on a discount basis) for U.S. Treasury bills with maturities of 91 days at
the auction held immediately before the date of deposit or renewal ("bill rate").
Commercial banks could pay the bill rate minus 25 basis points. The interest rate
ceiling was suspended when the bill rate is 9 percent or below for the four most
recent auctions held before the date of deposit or renewal. Effective Jan. 5, 1983,
the minimum denomination required for this deposit was reduced to $2,500 and
the interest rate ceiling was removed.
Time deposits of 2'/2 years or more. Effective May 1, 1982, depository
institutions were authorized to offer negotiable or nonnegotiable time deposits
with a minimum original maturity of V/2 years or more that are not subject to
interest rate ceilings. Such time deposits have no minimum denomination, but
must be made available in a $500 denomination. Additional deposits may be made
to the account during the first year without extending its maturity. Effective
Apr. 1, 1983, the minimum maturity period for this category of deposits was
reduced to 2'/2 years.
Policy Instruments
1.17
All
FEDERAL RESERVE OPEN MARKET TRANSACTIONS
Millions of dollars
1983
Type of transaction
1980
1981
1982
Jan.
Mar.
Feb.
Apr.
May
July
June
U . S . GOVERNMENT SECURITIES
Outright transactions (excluding matched
transactions)
Treasury bills
1 Gross purchases
2 . Gross sales
3 Exchange
4 Redemptions
5
6
7
8
9
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
7,668
7,331
0
3,389
13,899
6,746
0
1,816
17,067
8,369
0
3,000
0
1,983
0
900
1,456
934
0
300
1,259
0
0
0
2,880
0
0
0
516
0
0
0
1,721
0
0
0
666
0
0
0
912
0
12,427
-18,251
0
317
23
13,794
-12,869
0
312
0
17,295
-14,164
0
0
0
558
-544
0
0
0
4,564
-2,688
0
0
0
1,198
-900
0
0
0
826
0
0
173
0
1,795
-1,842
0
0
0
1,398
-916
87
156
0
1,162
0
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
2,138
0
-8,909
13,412
1,702
0
-10,299
10,117
1,797
0
-14,524
11,804
0
0
-553
544
0
0
-4,564
1,599
0
0
-1,198
900
0
0
-684
0
595
0
-41
1,367
0
0
-1,398
916
481
0
-1,121
0
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
703
0
-3,092
2,970
393
0
-3,495
1,500
388
0
-2,172
2,128
0
0
-5
0
0
0
229
650
0
0
0
0
0
0
-142
0
326
0
-1,754
300
0
0
0
0
215
0
-41
0
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
811
0
-426
1,869
379
0
0
1,253
307
0
-601
234
0
0
0
0
0
0
-229
439
0
0
0
0
0
0
0
0
108
0
0
175
0
0
0
0
124
0
0
0
22
23
24
All maturities
Gross purchases
Gross sales
Redemptions
12,232
7,331
3,389
16,690
6,769
1,816
19,870
8,369
3,000
0
1,983
900
1,456
934
300
1,259
0
0
2,880
0
0
1,719
0
0
1,721
0
87
1,642
0
0
25
26
Matched transactions
Gross sales
Gross purchases
674,000
675,496
589,312
589,647
543,804
543,173
59,398
59,043
35,234
38,204
47,892
47,724
37,873
36,205
43,404
45,001
50,086
47,783
40,934
43,037
27
28
Repurchase agreements
Gross purchases
Gross sales
113,902
113,040
79,920
78,733
130,774
130,286
6,747
10,451
6,697
6,697
3,526
3,526
7,671
3,984
0
3,687
7,891
6,730
7,816
8,978
3,869
9,626
8,358
-6,943
3,192
1,090
4,899
-371
493
2,583
668
0
145
494
0
108
0
0
189
0
0
9
0
0
5
0
0
8
0
0
7
0
0
*
0
0
17
0
0
10
28,895
28,863
13,320
13,576
18,957
18,638
452
1,040
276
276
379
379
340
92
0
248
678
463
558
773
555
130
130
-596
-5
-8
241
-248
198
-225
73
-582
1,285
-1,480
0
0
704
-704
203
-203
4,497
9,175
9,773
-9,019
3,187
1,082
5,844
-1,322
893
2,155
29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS
30
31
32
Outright transactions
Gross purchases
Gross sales
Redemptions
33
34
Repurchase agreements
Gross purchases
Gross sales
35 Net change in federal agency obligations
BANKERS ACCEPTANCES
36 Repurchase agreements, net
37 Total net change in System Open Market
Account
NOTE: Sales, redemptions, and negative figures reduce holdings of the System
Open Market Account; all other figures increase such holdings. Details may not
add to totals because of rounding.
A12
1.18
DomesticNonfinancialStatistics • September 1983
FEDERAL RESERVE BANKS
Condition and Federal Reserve N o t e Statements
Millions of dollars
Account
Aug. 3
Aug. 10
Wednesday
End of month
1983
1983
Aug. 24
Aug. 17
Aug. 31
July
June
Aug.
Consolidated condition statement
ASSETS
11,131
4,618
413
11,128
4,618
417
11,128
4,618
425
11,128
4,618
424
11,128
4,618
415
11,131
4,618
382
11,131
4,618
411
11,128
4,618
415
2,478
1,163
0
1,722
0
1,612
0
3,633
0
3,610
0
1,113
0
3,633
0
0
0
0
0
209
203
0
209
8,742
190
8,890
215
8,880
0
8,742
190
144,696
60,953
63,044
20,229
144,226
2,263
146,489
58,213
63,107
19,191
140,511
1,162
141,673
60,982
63,958
19,315
144,255
0
144,255
60,953
63,044
20,229
144,226
2,263
146,489
155,574
155,188
159,263
154,591
154,248
159,263
9,734
554
7,608
553
8,158
553
8,173
553
8,635
552
8,158
553
3,971
4,288
3,918
3,141
3,706
3,252
3,617
3,366
4,322
3,551
3,839
4,188
3,617
3,366
190,368
188,708
189,092
186,477
191,118
187,321
187,622
191,118
1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4 To depository institutions
5 Other
Acceptances
Held under repurchase agreements
6
Federal agency obligations
7 Bought outright
8 Held under repurchase agreements
U.S. government securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total1
13 Held under repurchase agreements
14 Total U.S. government securities
0
0
0
0
144,322
145,249
144,972
15 Total loans and securities
155,680
155,292
9,878
553
8,441
553
3,884
4,211
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
0
8,880
0
8,880
0
8,880
0
8,880
61,049
63,958
19,315
144,322
61,976
63,958
19,315
145,249
61,699
63,044
20,229
144,972
61,423
63,044
20,229
144,6%
0
LIABILITIES
147,929
148,808
148,461
147,775
148,241
147,549
147,094
148,241
22
23
24
25
25,088
3,586
214
492
24,889
2,804
282
481
22,490
3,991
223
441
23,060
3,025
208
529
25,702
4,189
248
447
18,004
8,764
279
461
23,046
3,815
369
551
25,702
4,189
248
447
26 Total deposits
29,380
28,456
27,145
26,822
30,586
27,508
27,781
30,586
8,072
1,959
6,408
1,894
8,313
2,028
6,736
1,990
7,179
2,056
7,153
2,021
7,569
1,989
7,179
2,056
187,340
185,566
185,947
183,323
188,062
184,231
184,433
188,062
1,428
1,359
241
1,429
1,359
354
1,429
1,359
357
1,430
1,359
365
1,434
1,359
263
1,421
1,359
310
1,427
1,359
403
1,434
1,359
263
190,368
188,708
189,092
186,477
191,118
187,321
187,622
191,118
111,983
110,746
110,120
108,983
108,053
110,889
94,203
108,053
21 Federal Reserve notes
Deposits
Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
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 Federal Reserve notes outstanding (issued to bank) . . . .
36
LESS: Held by bank 5
37
Federal Reserve notes, net
Collateral for Federal Reserve notes
38 Gold certificate account
39 Special drawing rights certificate account
40 Other eligible assets
41 U.S. government and agency securities
169,568
21,639
147,929
170,444
21,636
148,808
170,860
22,399
148,461
171,546
23,771
147,775
171,346
23,105
148,241
166,397
18,848
147,549
169,213
22,119
147,094
171,346
23,105
148,241
11,131
4,618
0
132,180
11,128
4,618
0
133,062
11,128
4,618
0
132,715
11,128
4,618
0
132,029
11,128
4,618
0
132,495
11,131
4,618
0
131,800
11,131
4,618
0
131,345
11,128
4,618
0
132,495
42 Total collateral
147,929
148,808
148,461
147,775
148,241
147,549
147,094
148,241
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.
Reserve Banks; Banking Aggregates
1.19
FEDERAL RESERVE BANKS
A13
Maturity Distribution of Loan and Security Holdings
Millions of dollars
Type and maturity groupings
Aug. 10
Aug. 3
Wednesday
End of month
1983
1983
Aug. 17
Aug. 24
Aug. 31
June 30
July 29
Aug. 31
1 Loans—Total
2. Within 15 days
16 days to 90 days
3
4 91 days to 1 year
2,478
2,366
112
0
1,163
1,033
130
0
1,722
1,682
40
0
1,612
1,569
43
0
3,633
3,583
50
0
3,610
3,561
49
0
1,113
1,045
68
0
3,633
3,583
50
0
5 Acceptances—Total
6 Within 15 days
7
16 days to 90 days
8 91 days to 1 year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
209
209
0
0
203
203
0
0
0
0
0
0
209
209
0
0
144,322
10,318
28,862
43,745
32,332
11,874
17,191
145,249
11,174
30,229
42,449
32,332
11,874
17,191
144,972
6,326
31,482
43,059
32,826
13,690
17,589
144,696
7,871
29,351
43,369
32,826
13,690
17,589
146,489
9,715
28,657
43,975
32,863
13,690
17,589
141,673
3,767
30,111
46,442
32,586
11,700
17,067
144,255
4,116
34,748
43,218
33,108
11,874
17,191
146,489
9,715
28,657
43,975
32,863
13,690
17,589
8,880
0
912
1,899
4,419
1,132
518
8,880
223
689
1,898
4,418
1,134
518
8,880
289
659
1,862
4,429
1,123
518
8,880
289
659
1,862
4,429
1,123
518
8,932
336
713
1,832
4,370
1,163
518
9,105
406
583
2,012
4,421
1,165
518
8,880
82
814
1,914
4,418
1,134
518
8,932
336
713
1,832
4,370
1,163
518
9 U.S. government securities—Total
10 Within 15 days 1
16 days to 90 days
11
12 91 days to 1 year
13 Over 1 year to 5 years
14 Over 5 years to 10 years
15 Over 10 years
16 Federal agency obligations—Total
17 Within 15 days 1
18
16 days to 90 days
19 91 days to 1 year
20 Over 1 year to 5 years
21 Over 5 years to 10 years
22 Over 10 years
1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements.
A14
1.20
DomesticNonfinancialStatistics • September 1983
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 I N S T I T U T I O N S A N D M O N E T A R Y B A S E
Billions of dollars, averages of daily figures
Item
1979
Dec.
1980
Dec.
1981
Dec.
1983
1982
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS'
1 Total reserves2
2 Nonborrowed reserves
3 Required reserves
4 Monetary base 3
34.23
36.23
37.93
40.78
40.12
40.34
41.00
41.30
41.24
41.72
41.93
41.80
32.76
33.91
142.8
34.54
35.71
154.9
39.45
39.53
173.2
40.15
40.28
175.6
39.59
39.57
176.3
39.76
39.91
178.0
40.21
40.57
180.2
40.29
40.83
181.3
40.29
40.79
182.8
40.08
41.24
184.3
40.48
41.43
185.0
40.26
41.34
186.0
Not seasonally adjusted
5 Total reserves2
6 Nonborrowed reserves
7 Required reserves
8 Monetary base 3
34.83
37.24
38.85
41.56
42.23
40.23
40.23
41.05
40.71
40.84
41.42
41.13
33.35
34.50
145.3
35.55
36.72
158.2
38.21
38.59
166.1
40.93
41.06
178.9
41.69
41.67
177.7
39.64
39.79
175.9
39.44
39.80
177.7
40.04
40.57
180.3
39.75
40.26
181.7
39.20
40.36
183.5
39.97
40.92
185.6
39.59
40.67
185.7
43.91
40.66
41.92
41.85
41.86
39.80
38.04
38.65
38.28
34.42
38.95
38.68
42.43
43.58
156.1
38.97
40.15
162.5
41.29
40.60
169.7
41.22
41.35
179.3
41.33
41.32
177.7
39.22
39.36
175.9
37.24
37.60
175.7
37.64
38.17
178.4
37.33
37.83
179.8
36.78
37.93
181.6
37.50
38.44
183.7
37.13
38.21
183.8
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 4
9 Total reserves2
10 Nonborrowed reserves
11 Required reserves
12 Monetary base 3
1. Reserve aggregates include required reserves of member banks and Edge
Act corporations and other depository institutions. Discontinuities associated
with the implementation of the Monetary Control Act, the inclusion of Edge Act
corporation reserves, and other changes in Regulation D have been removed.
2. 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.
3. Consists of reserve balances and service-related balances and adjustments at
Federal Reserve Banks in the current week plus vault cash held two weeks earlier
used to satisfy reserve requirements at all depository institutions plus currency
outside the U.S. Treasury, Federal Reserve Banks, the vaults of depository
institutions, and surplus vault cash at depository institutions.
4. Reserves of depository institutions series reflect actual reserve requirement
percentages with no adjustments to eliminate the effect of changes in Regulation D
including changes associated with the implementation of the Monetary Control
Act. Includes required reserves of member banks and Edge Act corporations and
beginning Nov. 13, 1980, other depository institutions. Under the transitional
phase-in program of the Monetary Control Act of 1980, the net changes in
required reserves of depository institutions have been as follows: Effective
Nov. 13, 1980, a reduction of $2.9 billion; Feb. 12, 1981, an increase of $245
million; Mar. 12, 1981, an increase of $75 million; May 14, 1981, an increase of
$245 million; Sept. 3, 1981, a reduction of $1.1 billion; Nov. 12, 1981, an increase
of $210 million; Jan. 14, 1982, a reduction of $60 million; Feb. 11, 1982 an increase
of $170 million; Mar. 4, 1982, an estimated reduction of $2.0 billion; May 13, 1982,
an estimated increase of $150 million; Aug. 12, 1982 an estimated increase of $140
million; and Sept. 2, 1982, an estimated reduction of $1.2 billion; Oct. 28, 1982 an
estimated reduction of $100 million; Dec. 23, 1982 an estimated reduction of $800
million; Mar. 3, 1983 an estimated reduction of $1.9 billion; and Sept. 1, 1983, an
estimated reduction of $1.2 billion beginning with the week ended Dec. 23, 1981,
reserve aggregates have been reduced by shifts of reservable liabilities to IBFs.
On the basis of reports of liabilities transferred to IBFs by U.S. commercial banks
and U.S. agencies and branches of foreign banks, it is estimated that required
reserves were lowered on average by $60 million to $90 million in Dec. 1981 and
$180 million to $230 million in Jan. 1982, mostly reflecting a reduction in
reservable Eurocurrency transactions. Also, beginning with the week ending Apr.
20, 1983, required reserves were reduced an estimated $80 million as a result of
the elimination of reserve requirements on nonpersonal time deposits with
maturities of 2'/^ years or more to less than 3'/2 years.
NOTE. Latest monthly and weekly figures are available from the Board's
H.3(502) statistical release. Back data and estimates of the impact on required
reserves and changes in reserve requirements are available from the Banking
Section, Division of Research and Statistics, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
Monetary Aggregates
1.21
A15
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, a v e r a g e s of daily
figures
1983
1979
Dec.
1980
Dec.
1981
Dec.
1982
Dec.
Apr.
May
June
July
Seasonally adjusted
MEASURES 1
1
2
3
4
Ml
M2
M3
L2
389.0
1,497.5
1,758.4
2,131.8
414.1
1,630.3
1,936.7
2,343.6
440.6
1,794.9
2,167.9
2,622.0
478.2
1,959.5
2,377.6
2,896.8
496.5
2,074.8'
2,454.0
3,006.5
507.4
2,096.2'
2,476.5
n.a.
511.7'
2,114.3'
2,499.2'
n.a.
515.5
2,125.4
2,509.6
n.a.
106.5
3.7
262.0
17.0
423.1
635.9
222.2
116.2
4.1
266.8
26.9
400.7
731.7
258.9
123.2
4.5
236.4
76.6
344.4
828.6
302.6
132.8
4.2
239.8
101.3
359.3
859.1
333.8
138.0
4.6
238.9
115.0
321.5
725.7
300.4
139.3
4.7
242.5
120.9
323.1'
720.1
299.5
140.3
4.7
244.0
122.7
325.0'
722.1'
304.6'
140.9
4.6
245.7
124.2
323.5
734.9
305.9
SELECTED COMPONENTS
5
6
7
8
9
10
11
Currency
Travelers checks 3
Demand deposits
Other checkable deposits 4
Savings deposits5
Small-denomination time deposits 6
Large-denomination time deposits 7
Not seasonally adjusted
MEASURES
12
13
14
15
1
Ml
M2
M3
L2
398.8
1,502.1
1,766.1
2,138.9
424.7
1,635.0
1,944.9
2,350.8
452.1
1,799.6
2,175.9
2,629.7
491.0
1,964.5
2,385.3
2,904.7
504.5
2,088.4
2,465.5
3,021.4
499.8
2,092.7'
2,471.7'
n.a.
508.3
2,114.0'
2,495.8'
n.a.
514.7
2,126.9
2,507.5
n.a.
108.2
3.5
270.1
17.0
21.2
420.7
n.a.
633.1
118.3
3.9
275.2
27.2
28.4
398.3
n.a.
728.3
125.4
4.3
244.0
78.4
36.1
342.1
n.a.
824.1
135.2
4.0
247.7
104.0
44.3
356.7
43.2
853.9
137.4
4.4
242.4
120.2
50.6
324.3
341.2
728.6
138.9
4.5
238.2
118.2
55.1'
324.6
356.8
722.7
140.3
4.9
242.1
121.0
55.9'
326.3
367.3
723.9'
142.0
5.2
245.0
122.5
52.4
326.6
368.4
734.2
33.4
9.5
226.0
61.4
14.9
262.4
150.9
36.0
305.9
177.8'
43.1'
336.5
140.1'
36.C
298.1
135.0'
35.7'
298.2
132.9'
34.7'
301.5'
131.3
34.0
302.3
SELECTED COMPONENTS
16
17
18
19
20
21
22
23
Currency
Travelers checks 3
Demand deposits
Other checkable deposits 4
Overnight RPs and Eurodollars 8
Savings deposits5
Money market deposit accounts
Small-denomination time deposits 6
Money market mutual funds
24 General purpose and broker/dealer
25 Institution only
26 Large-denomination time deposits 7
1. Composition of the money stock measures is as follows:
Ml: Averages of daily figures for (1) currency outside the Treasury, Federal
Reserve Banks, and the vaults of commercial banks; (2) travelers checks of
nonbank issuers; (3) demand deposits at all commercial banks other than those
due to domestic banks, the U.S. government, and foreign banks and official
institutions less cash items in the process of collection and Federal Reserve float;
and (4) negotiable order of withdrawal (NOW) and automatic transfer service
(ATS) accounts at banks and thrift institutions, credit union share draft (CUSD)
accounts, and demand deposits at mutual savings banks.
M2: Ml plus money market deposit accounts, savings and small-denomination
time deposits at all depository institutions, overnight repurchase agreements at
commercial banks, overnight Eurodollars held by U.S. residents other than banks
at Caribbean branches of member banks and balances of money market mutual
funds (general purpose and broker/dealer).
M3: M2 plus large-denomination time deposits at all depository institutions,
term RPs at commercial banks and savings and loan associations, and balances of
institution-only money market mutual funds.
2. L: M3 plus other liquid assets such as term Eurodollars held by U.S.
residents other than banks, bankers acceptances, commercial paper, Treasury
bills and other liquid Treasury securities, and U.S. savings bonds.
3. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers.
4. Includes ATS and NOW balances at all institutions, credit union share draft
balances, and demand deposits at mutual savings banks.
5. Excludes NOW and ATS accounts at commercial banks and thrift institutions and CUSDs at credit unions and all money market deposit accounts
(MMDAs).
6. Issued in amounts of less than $100,000 and includes retail RPs.
7. 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.
8. Overnight (and continuing contract) RPs are those issued by commercial
banks to other than depository institutions and money market mutual funds
(general purpose and broker/dealer), and overnight Eurodollars are those issued
by Caribbean branches of member banks to U.S. residents other than depository
institutions and money market mutual funds (general purpose and broker/dealer).
NOTE: Latest monthly and weekly figures are available from the Board's H.6
(508) release. Back data are available from the Banking Section, Division of
Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
A16
1.22
DomesticNonfinancialStatistics • September 1983
B A N K DEBITS A N D DEPOSIT T U R N O V E R
Debits are s h o w n in billions of dollars, t u r n o v e r as ratio of debits to deposits. Monthly data are at annual rates.
1983
Bank group, or type of customer
1980'
19811
1982'
Jan.
Feb.
Mar.
Apr.
May
June
Seasonally adjusted
DEBITS TO
1
2
3
4
5
Demand deposits2
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 3
Savings deposits4
6
7
8
9
10
Demand deposits2
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 3
Savings deposits4
62,757.8
25,156.1
37,601.7
159.3
670.0
80,858.7
33,891.9
46,966.9
743.4
672.7
90,914.4
37,932.9
52,981.6
1,036.2
721.4
103,333.1
46,353.0
56,980.1
1,262.3
904.3
102,743.5
45,133.2
57,610.3
1,286.4
827.9
102,206.1
44,327.4
57,878.7
1,369.4
803.2
103,022.3
46,025.6
56,996.7
1,202.2
714.9
107,273.3
46,891.2
60,382.1
1,371.5
743.1
106,858.3
46,444.3
60,414.1
1,375.4
784.5
198.7
803.7
132.2
9.7
3.6
285.8
1,105.1
186.2
14.0
4.1
324.2
1,287.6
211.1
14.5
4.5
361.1
1,462.3
223.9
15.8
6.0
361.3
1,462.5
227.2
15.1
5.8
356.1
1,437.4
225.9
15.6
5.7
359.7
1,502.8
222.9
13.9
5.1
370.4
1,471.5
234.3
15.2
5.4
368.6
1,449.0
234.3
15.0
5.7
DEPOSIT TURNOVER
Not seasonally adjusted
DEBITS TO
11
12
13
14
15
16
Demand deposits2
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 3
MMDA5
Savings deposits4
17
18
19
20
21
22
Demand deposits2
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 3
MMDA5
Savings deposits 4
63,124.4
25,243.1
37,881.3
158.0
0
669.8
81,197.9
34,032.0
47,165.9
737.6
0
672.9
91,031.9
38,001.0
53,030.9
1,027.1
0
720.0
101,566.1
45,657.2
55,908.8
1,525.5
278.4
980.4
92,654.1
40,937.3
51,716.8
1,198.7
324.7
754.3
109,166.3
47,496.6
61,669.7
1,398.4
454.9
820.4
100,117.1
43,678.9
56,438.1
1,405.3
545.8
779.9
103,947.8
44,942.5
59,005.4
1,353.1
505.6
722.2
113,836.2
50,643.1
63,193.1
1,455.9
630.7
787.5
202.3
814.8
134.8
9.7
0
3.6
286.1
1,114.2
186.2
14.0
0
4.1
325.0
1,295.7
211.5
14.3
0
4.5
346.1
1,368.1
215.0
18.6
2.4
6.6
334.8
1,366.7
209.5
14.4
2.0
5.3
391.8
1,561.1
248.5
16.2
2.4
5.8
347.9
1,446.9
219.1
15.6
2.8
5.6
368.1
1,471.0
234.3
15.3
2.4
5.2
394.3
1,563.6
246.5
16.1
2.9
5.7
DEPOSIT TURNOVER
1. Annual averages of monthly figures.
2. Represents accounts of individuals, partnerships, and corporations and of
states and political subdivisions.
3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts authorized for automatic transfer to demand deposits (ATS). ATS data
availability starts with December 1978.
4. Excludes ATS and NOW accounts, MMDA and special club accounts, such
as Christmas and vacation clubs.
5. Money market deposit accounts.
NOTE. Historical data for demand deposits are available back to 1970 estimated
in part from the debits series for 233 SMSAs that were available through June
1977. Historical data for ATS-NOW and savings deposits are available back to
July 1977. Back data are available on request from the Banking Section, Division
of Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Commercial Banks
1.23
LOANS A N D SECURITIES
A17
All Commercial Banks'
Billions of dollars; a v e r a g e s of W e d n e s d a y
1981
1982
Dec. 2
Dec.
figures
1983
1981
1982
Dec. 2
Dec.
1983
Category
Apr.
May
June
July
Seasonally adjusted
1 Total loans and securities3
2 U.S. Treasury securities
3 Other securities
4 Total loans and leases 3
5 Commercial and industrial
loans
6 Real estate loans
7 Loans to individuals
8 Security loans
9 Loans to nonbank financial
institutions
10 Agricultural loans
11 Lease financing receivables....
12 All other loans
Apr.
May
June
July
Not seasonally adjusted
1,316.3
1,412.1
1,460.6
1,474.4
1,488.0"
1,499.9
1,326.1
1,422.5
1,460.0
1,468.1
1,485.6
1,493.6
111.0
231.4
973.9
130.9
239.1
1,042.0
157.8
243.4
1,059.5
166.1
245.0
1,063.3
171.2'
246.2
1,070.6
172.9
246.0
1,081.0
111.4
232.8
981.8
131.5
240.6
1,050.4
160.6
243.3
1,056.0
165.3
245.2
1,057.6
171.6
245.9
1,068.0
171.6
244.8
1,077.3
358.0
285.7
185.1
21.9
392.4
303.2
191.8
24.7
392.8
311.4
196.0
22.9
393.0
313.6
197.9
23.4
395.0
317.0'
199.8
22.3
399.1
319.4
203.2
23.7
360.1
286.8
186.4
22.7
394.7
304.1
193.1
25.5
395.2
310.4
194.7
22.9
393.1
312.4
196.7
22.5
394.4
315.4
199.0
23.5
397.9
318.5
202.2
23.1
30.2
33.0
12.7
47.2
31.1
36.1
13.1
49.7
31.6
37.2
13.1
54.3
31.1
36.9
13.1
54.4
31.1
36.7
13.0
55.7
31.2
36.8
12.9
54.7
31.2
33.0
12.7
49.2
32.1
36.1
13.1
51.7
31.3
36.6
13.1
51.9
30.7
36.7
13.1
52.5
30.7
36.9
13.0
55.2
30.6
37.2
12.9
55.0
1,319.1
1,415.0
1,463.6
1,477.2
1,490.7
1,502.6
1,328.9
1,425.4
1,462.9
1,470.9
1,488.3
1,496.3
976.7
2.8
1,045.0
2.9
1,062.4
3.0
1,066.1
2.8
1,073.3
2.7
1,083.6
2.7
984.7
2.8
1,053.3
2.9
1,059.0
3.0
1,060.4
2.8
1,070.8
2.7
1,080.0
2.7
360.2
394.6
395.3
395.1
397.2
401.2
362.3
396.9
397.5
395.3
396.5
399.9
2.2
8.9
2.3
8.5
2.4
8.9
2.2
8.2
2.1
8.0
2.1
8.5
2.2
9.8
2.3
9.5
2.4
8.2
2.2
7.7
2.1
8.1
2.1
8.4
349.1
334.9
14.2
19.0
383.8
373.5
10.3
13.5
384.0
372.1
11.9
15.2
384.8
371.8
13.0
15.1
387.0
373.7
13.3
15.0
390.7
378.1
12.5
14.4
350.3
334.3
16.1
20.0
385.2
372.7
12.4
14.5
386.9
375.1
11.8
14.6
385.4
373.4
12.0
14.5
386.3
374.2
12.1
14.5
389.4
377.3
12.1
14.1
MEMO:
13 Total loans and securities plus
loans sold3-4
14 Total loans plus loans sold3'4 . . . .
15 Total loans sold to affiliates 3 ' 4 ....
16 Commercial and industrial loans
plus loans sold4
17 Commercial and industrial
loans sold4
18 Acceptances held
19 Other commercial and industrial loans
20
To U.S. addressees 5
21
To non-U.S. addressees
22 Loans to foreign banks
1. Includes domestically chartered banks; U.S. branches and agencies of
foreign banks, New York investment companies majority owned by foreign
banks, and Edge Act corporations owned by domestically chartered and foreign
banks.
2. Beginning December 1981, shifts of foreign loans and securities from U.S.
banking offices to international banking facilities (IBFs) reduced the levels of
several items. Seasonally adjusted data that include adjustments for the amounts
shifted from domestic1 offices to IBFs are available in the Board's 0.7 (407)
statistical release (available from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551).
3. Excludes loans to commercial banks in the United States.
4. 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.
5. 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 foreignrelated 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.
A18
1.24
DomesticNonfinancialStatistics • September 1983
MAJOR N O N D E P O S I T F U N D S O F C O M M E R C I A L B A N K S '
Monthly averages, billions of dollars
1981
1982
1983
Source
Dec.
1
2
3
4
5
6
Total nondeposit funds
Seasonally adjusted 2
Not seasonally adjusted
Federal funds, RPs, and other borrowings
from nonbanks 3
Seasonally adjusted
Not seasonally adjusted
Net balances due to foreign-related institutions, not seasonally adjusted
Loans sold to affiliates, not seasonally
adjusted 4
Sept.
96.5 r
98.(K
78.8'
81.2'
111.6'
113.1'
121.6
124.0
-17.9'
-45.6'
2.8
2.8
-22.5
54.9
32.4
Oct.
Nov.'
Dec.'
Jan.'
Feb.'
Mar.'
Apr.'
May'
June'
July
81.1
83.3
87.3
89.3
82.8
84.3
72.8
74.3
75.8
76.7
75.3
76.0
79.7
78.3
90.3
89.8
87.7
89.9
75.8
77.8
126.2'
128.4
129.2
131.2
127.5
128.9
131.8
133.2
134.7
135.6
134.8
135.5
139.3
137.8
145.3
144.8
140.1
141.8
131.9
134.0
-47.9
-44.8
-47.6
-61.9
-61.9
-62.4
-62.5
-57.8
-55.1
-58.8
2.8
2.9
2.9
3.0
3.0
3.0
3.0
2.8
2.7
2.7
-39.0
68.8
29.7
-40.4
69.8
29.4
-38.3
69.9
31.6
-39.8
72.4
32.6
-50.2
79.4
29.2
-50.6
78.9
28.3
-52.9
79.8
26.9
-52.6
80.1
27.5
-48.7
76.3
27.6
-49.2
75.8
26.6
-51.0
77.5
26.5
4.3
48.1
52.4
-7.3
54.6
47.3
-7.5
53.9
46.4
-6.4
53.5
47.1
-8.7
55.3
46.6
-12.0
57.2
45.2
-11.3
55.7
44.4
-9.4
56.1
46.7
-9.8
55.9
46.1
-9.1
55.7
46.7
-5.9
53.9
48.0
-7.8
55.2
47.4
59.0
59.2
65.0
66.0
69.0
69.8
71.5
72.1
71.0
71.1
72.2
72.2
74.3
73.7
74.7
73.9
79.3
76.3
84.6
82.6
81.4
81.5
75.5
76.0
12.2
11.1
11.1
12.3
14.4
16.4
10.6
7.8
11.9
10.8
15.7
16.3
8.8
10.2
12.5
13.2
13.5
14.2
11.3
12.5
13.0
13.2
24.1
21.9
324.1
330.4
366.7
361.8
376.6
364.9
360.6
361.7
347.3
353.9
319.2
325.4
303.0
310.5
296.0
300.7
296.2
293.0
287.0
285.0
287.5
283.5
285.7
281.4
22.4
1.7
20.7
3.1
17.6
32.8
2.4
30.4
5.4
25.0
33.1
2.4
30.7
5.4
25.3
33.3
2.4
30.9
5.5
25.4
33.9
2.4
31.5
5.8
25.7
34.2
2.4
31.8
5.8
26.0
MEMO
7 Domestically chartered banks' net positions
with own foreign branches, not seasonally adjusted 5
8
Gross due from balances
9
Gross due to balances
10 Foreign-related institutions' net positions with
directly related institutions, not seasonally adjusted 6
tl
Gross due from balances
12
Gross due to balances
Security RP borrowings
13
Seasonally adjusted'
14
Not seasonally adjusted
U.S. Treasury demand balances 8
15
Seasonally adjusted
16
Not seasonally adjusted
Time deposits, $100,000 or more 9
17
Seasonally adjusted
18
Not seasonally adjusted
I B F ADJUSTMENTS FOR SELECTED ITEMS 1 0
19
20
21 Item 5
22 Item 7
23 Item 10
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.
5. Averages of daily figures for member and nonmember banks.
6. Averages of daily data.
7. Based on daily average data reported by 122 large banks.
8. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
9. Averages of Wednesday figures.
10. Estimated effects of shifts of foreign assets from U.S. banking offices to
international banking facilities (IBFs).
Banking Institutions
1.25
ASSETS A N D LIABILITIES OF COMMERCIAL B A N K I N G INSTITUTIONS
A19
Last-Wednesday-of-Month Series
Billions of dollars e x c e p t f o r n u m b e r of b a n k s
1983
1982
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Julyr
Aug.
DOMESTICALLY CHARTERED
COMMERCIAL BANKS'
1
2
3
4
5
6
Loans and securities, excluding
interbank
Loans, excluding interbank
Commercial and industrial
Other
U.S. Treasury securities
Other securities
Cash assets, total
Currency and coin
Reserves with Federal Reserve Banks
10 Balances with depository institutions .
11 Cash items in process of collection . . .
7
8
9
1,343.0
988.5
355.8
632.7
119.4
235.1
1,347.0
990.4
355.4
635.0
122.2
234.4
1,370.4
1,000.8
357.9
642.9
129.0
240.5
1,370.8
993.3
355.6
638.2
136.0
241.6
1,373.7
991.4
356.3
635.8
141.4
240.8
1,392.2
1,001.7
358.6
643.7
150.6
239.9
1,404.0
1,004.6
358.5
646.8
155.5
243.9
1,411.9
1,006.9
357.3
650.8
160.9
244.1
1,435.2
1,025.1
360.6
664.5
166.0
244.1
1,437.5
1,028.5
361.7
666.9
165.1
243.9
1,456.9
1,042.8
363.6
679.2
167.5
246.7
162.1
20.5
23.5
61.3
56.8
169.7
19.0
22.0
64.6
64.1
184.4
23.0
25.4
67.6
68.4
167.8
20.4
23.9
67.7
55.9
184.7
20.3
25.3
71.6
67.5
168.9
19.9
20.5
67.1
61.5
170.1
20.4
23.9
66.1
59.6
164.5
20.3
22.4
65.6
56.3
176.9
21.3
18.8
69.7
67.1
168.7
20.7
20.6
67.1
60.3
176.9
21.0
22.5
69.0
64.4
12
Other assets 2
237.0
241.8
265.3
260.1
263.6
257.9
252.4
248.3
253.2
254.5
257.3
13
Total assets/total liabilities and capital . ..
1,742.1
1,758.6
1,820.1
1,798.7
1,822.0
1,818.9
1,826.3
1,824.9
1,865.2
1,860.7
1,891.1
14
15
16
17
Deposits
Demand
Savings
Time
1,300.2
326.5
238.2
735.4
1,316.9
338.1
244.9
733.9
1,361.8
363.9
296.4
701.5
1,340.6
324.0
361.5
655.1
1,368.3
337.9
395.2
635.2
1,374.2
333.4
419.2
621.6
1,368.0
329.2
426.9
611.9
1,370.8
324.5
440.2
606.1
1,402.7
344.4
445.3
613.1
1,396.5
334.2
447.5
614.8
1,420.2
344.6
449.0
626.5
18
19
20
Borrowings
Other liabilities
Residual (assets less liabilities)
203.7
106.2
132.0
198.1
109.3
134.3
215.1
109.2
133.9
221.6
106.4
130.1
218.0
106.0
129.6
211.3
103.5
130.0
224.0
102.3
132.0
214.1
104.7
135.1
221.2
104.3
137.0
217.5
105.5
141.1
217.2
107.6
146.1
11.7
14,797
2.4
14,782
10.7
14,787
17.1
14,780
7.0
14,812
9.6
14,819
17.8
14,823
2.7
14,817
19.3
14,826
19.3
14,785
14.8
14,795
1,401.7
1,042.3
393.7
648.6
122.7
236.7
1,413.7
1,052.1
398.9
653.2
125.7
235.9
1,429.8
1,054.9
396.5
658.4
132.8
242.1
1,427.5
1,044.8
393.0
652.4
139.5
243.2
1,429.8
1,042.3
392.9
650.0
145.1
242.4
1,451.3
1,054.5
396.5
658.6
155.3
241.5
1,461.0
1,055.2
394.1
661.8
160.3
245.5
1,467.6
1,055.9
392.3
664.7
166.1
245.8
1,491.6
1,074.6
395.9
678.7
171.3
245.7
1,494.2
1,078.3
398.3
680.0
170.3
245.6
1,515.4
1,094.3
401.2
693.0
172.7
248.4
183.7
20.4
25.3
81.1
56.9
200.5
20.3
26.7
84.9
68.6
185.5
19.9
22.0
81.0
62.6
186.3
20.4
25.4
79.8
60.7
180.3
20.3
23.8
78.9
57.3
193.5
21.3
20.0
84.0
68.2
185.2
20.7
21.9
81.2
61.4
193.3
21.1
24.0
82.8
65.4
MEMO:
21
22
U.S. Treasury note balances included in
borrowing
Number of banks
ALL COMMERCIAL BANKING
INSTITUTIONS 3
24
25
26
27
28
Loans and securities, excluding
interbank
Loans, excluding interbank
Commercial and industrial
Other
U.S. Treasury securities
Other securities
29
30
31
32
33
Cash assets, total
Currency and coin
Reserves with Federal Reserve Banks
Balances with depository institutions .
Cash items in process of collection . . .
178.7
20.5
25.0
75.3
57.8
181.2
19.0
23.4
74.4
64.3
200.7
23.0
26.8
81.4
69.4
34
Other assets 2
313.9
323.3
341.7
333.2
330.2
325.4
317.7
309.5
318.1
318.7
324.8
1,960.4
1,962.2
1,964.9
1,957.5
2,003.2
1,998.1
2,033.3
23
35
Total assets/total liabilities and capital .. .
1,894.2
1,918.2
1,972.2
1,944.4
36
37
38
39
Deposits
Demand
Savings
Time
1,345.2
338.9
238.5
767.8
1,358.1
344.9
245.1
768.0
1,409.7
376.2
296.7
736.7
1,385.4
335.9
361.9
687.7
1,412.6
350.2
395.6
666.8
1,419.5
345.7
419.7
654.1
1,411.0
341.1
427.3
642.6
1,413.1
336.4
440.7
636.0
1,443.8
356.4
445.7
641.6
1,438.1
346.4
448.0
643.8
1,461.5
356.6
449.5
655.4
40
41
42
Borrowings
Other liabilities
Residual (assets less liabilities)
268.3
146.9
133.9
267.0
156.6
136.6
278.3
148.4
135.8
283.5
143.5
132.0
276.0
140.4
131.5
269.9
141.1
131.9
281.3
138.7
133.9
269.5
137.9
137.0
278.2
142.3
138.9
277.9
139.1
143.0
280.5
143.4
148.0
11.7
2.4
15,318
10.7
15,329
17.1
15,332
7.0
15,366
9.6
15,376
17.8
15,390
2.7
15,385
19.3
15,396
19.3
15,359
14.8
15,370
MEMO:
43
44
U.S. Treasury note balances included in
borrowing
Number of banks
15,330
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 estimates made on the last Wednesday of the
month based on a weekly reporting sample of foreign-related institutions and
quarter-end condition report data.
A20
1.26
DomesticNonfinancialStatistics • September 1983
A L L L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S with Domestic Assets of $750 Million or More on
D e c e m b e r 31, 1977, A s s e t s and Liabilities
Millions of dollars, W e d n e s d a y figures
Account
July 6
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
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
70
71
Cash items in process of collection
Demand deposits due from banks in the United States.
All other cash and due from depository institutions . . .
Total loans and securities
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 subdivisions, by maturity
One year or less
Over one year
Other bonds, corporate stocks and securities
Loans
Federal funds sold1
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate
To individuals for personal expenditures
To financial institutions
Commercial banks in the United States
Banks in foreign countries
Sales finance, personal finance companies, etc. . . .
Other financial institutions
To nonbank brokers and dealers in securities
To others for purchasing and carrying securities2 . . .
To finance agricultural production
All other
LESS: Unearned income
Loan loss reserve
Other loans, net
Lease financing receivables
All other assets
Total assets
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
Total liabilities
Residual (total assets minus total liabilities)4
July 13
July 27
Aug. 3p
Aug. IOp
Aug. 17 p
Aug. 24?
Aug. 31 p
60,182
9,555
33,325
681,634
49,529
6,913
36,621
667,246
47,364
7,381
37,502
667,159
48,072
6,721
33,829
664,448
50,268
7,424
34,492
672,113
43,096
6,645
35,051
666,202
47,945
7,347
32,649
668,119
43,897
6,749
32,718
666,443
50,410
7,759
35,480
670,961
55,742
11,831
43,911
14,510
26,567
2,835
83,206
6,224
76,982
16,472
57,084
7,314
49,769
3,426
51,489
9,243
42,246
13,957
25,596
2,693
81,992
4,922
77,070
16,392
57,206
6,800
50,407
3,471
51,907
10,104
41,804
13,548
25,684
2,571
82,743
5,490
77,252
16,335
57,359
7,020
50,339
3,559
50,126
9,095
41,031
13,660
24,767
2,605
83,373
5,450
77,923
16,407
58,008
7,701
50,307
3,509
51,445
9,837
41,608
14,342
24,597
2,670
84,470
6,416
78,054
16,563
57,988
7,826
50,162
3,503
50,218
8,240
41,978
14,263
25,116
2,599
84,171
6,045
78,125
16,512
58,094
7,861
50,233
3,519
52,075
9,736
42,338
13,591
26,288
2,460
85,038
7,059
77,979
16,468
58,007
7,900
50,108
3,503
51,615
9,229
42,386
13,684
26,235
2,466
84,111
6,322
77,788
16,551
57,644
7,569
50,075
3,593
51,461
8,303
43,158
14,058
26,647
2,453
84,415
6,629
77,786
16,388
57,774
7,640
50,134
3,624
51,318
40,173
7,633
3,512
504,707
214,896
4,561
210,335
203,488
6,847
135,013
76,647
45,706
35,461
7,002
3,242
501,385
214,140
4,493
209,648
202,661
6,987
135,291
76,720
44,489
33,870
7,198
3,421
501,360
214.254
4,065
210,189
203,355
6,834
135,553
76,987
43,785
32,764
7,735
3,286
500,543
213,215
3,749
209,465
202,553
6,912
135,665
77,296
44,049
33,276
7,526
3,246
505,539
215,402
4,372
211,030
204,094
6,936
135,575
77,522
41,543
30,869
7,584
3,090
503,678
214,677
3,867
210,810
203,929
6,881
135,984
77,775
39,756
28,356
8,618
2,782
504,657
213,829
3,749
210,081
203,186
6,895
136,485
78,098
40,406
29,611
8,048
2,747
503,724
213,860
3,977
209,883
203,006
6,877
136,641
78,454
41,304
30,606
7,750
2,947
507,252
214,047
3,948
210,100
203,1%
6,903
137,081
79,015
7,527
7,995
9,478
16,009
9,450
3,090
7,006
17,596
5,081
8,259
491,368
10,855
148,646
944,197
7,328
7,677
9,529
15,997
8,595
3,095
6,997
16,014
5,091
8,235
488,059
10,922
143,731
914,964
7,080
7,975
9,006
15,886
8,524
3,106
7,047
15,943
5,070
8,271
488,020
10,854
141,273
911,534
6,919
7,883
9,091
15,738
8,652
3,074
7,060
15,949
5,064
8,316
487,163
10,859
139,393
903,322
7,491
8,272
9,420
16,283
8,842
3,098
7,094
16,540
5,040
8,350
492,149
10,889
143,024
918,210
7,178
7,972
9,194
16,375
8,143
3,106
7,140
16,132
5,067
8,340
490,270
10,882
143,216
905,092
7,302
7,759
9,079
16,283
9,234
3,0%
7,122
16,370
5,042
8,365
491,250
10,939
142,686
909,686
7,551
7,672
9,094
15,956
7,990
3,074
7,085
16,344
5,059
8,353
490,312
10,944
139,668
900,420
7,490
8,304
9,287
15,959
9,406
3,184
7,123
16,356
5,035
8,436
493,782
10,948
140,340
915,898
195,302
838
145,468
5,218
3,312
23,977
6,568
1,097
8,823
416,123
176,158
157,789
17,220
1,101
47
239,965
212,372
16,815
324
7,145
177,072
643
136,631
4,654
987
18,717
6,218
1,046
8,176
414,990
174,859
156,368
17,325
1,113
52
240,130
212,534
16,852
330
7,104
174,431
743
132,158
4,697
2,770
19,635
5,853
905
7,669
414,876
174,340
155,894
17,343
1,048
55
240,536
213,192
16,784
328
6,935
173,307
616
132,724
4,932
2,037
17,987
5,810
873
8,328
414,301
173,397
154,837
17,445
1,045
71
240,904
213,830
16,671
331
6,814
179,472
796
134,492
5,309
3,221
20,146
5,923
1,065
8,520
416,182
175,006
156,366
17,483
1,100
57
241,176
214,371
16,597
327
6,694
169,249
705
129,368
4,350
1,878
18,361
6,085
996
7,506
416,206
174,248
155,484
17,584
1,125
54
241,957
214,615
16,955
314
6,844
174,494
742
134,201
4,844
1,091
19,409
5,692
992
7,522
417,620
173,423
154,597
17,649
1,120
56
244,197
216,703
17,033
314
6,833
166,493
614
126,858
4,541
2,078
18,050
5,748
1,109
7,495
418,146
172,444
153,499
17,771
1,115
58
245,702
217,944
17,270
318
6,822
177,346
711
134,801
4,881
1,015
20,029
5,972
1,361
8,575
419,145
172,770
153,823
17,785
1,116
45
246,375
218,794
17,074
320
6,831
3,309
3,310
3,298
3,258
3,187
3,230
3,314
3,346
3,355
823
13,580
173,370
84,090
883,289
60,908
2,158
14,274
161,942
83,514
853,949
61,014
1,532
13,202
162,166
84,496
850,704
60,830
330
14,024
155,858
84,870
842,690
60,631
1,430
10,753
162,672
86,598
857,108
61,102
164
8,797
162,728
86,666
843,811
61,281
410
9,9%
157,094
88,980
848,594
61,092
381
11,012
155,594
87,672
839,298
61,122
2,409
11,066
157,198
87,357
854,521
61,378
1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and brokers and dealers.
3. Includes federal funds purchased and securities sold under agreements to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
July 20
4. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
Weekly Reporting Banks
1.27
A21
L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S with Domestic A s s e t s of Si Billion or More on
December 31, 1977, A s s e t s and Liabilities
Millions of dollars, W e d n e s d a y
figures
1983
Account
July 6
1
?
3
4
Cash items in process of collection
Demand deposits due from banks in the United States..
All other cash and due from depository institutions . . . .
Total loans and securities
Securities
U.S. Treasury securities
6 Trading account
7 Investment account, by maturity
8
One year or less
9
Over one through five years
10
Over five years
11 Other securities
N Trading account
13 Investment account
14
U.S. government agencies
States and political subdivisions, by maturity
15
16
One year or less
Over one year
17
Other bonds, corporate stocks and securities
18
Loans
19 Federal funds sold1
70 To commercial banks
71 To nonbank brokers and dealers in securities
77 To others
23 Other loans, gross
74 Commercial and industrial
7.5
Bankers acceptances and commercial paper
76
All other
77
U.S. addressees
78
Non-U.S. addressees
79 Real estate
30 To individuals for personal expenditures
To financial institutions
31
Commercial banks in the United States
Banks in foreign countries
32
Sales finance, personal finance companies, etc
33
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
47. Lease financing receivables
43 All other assets
44 Total assets
Deposits
45 Demand deposits
46 Mutual savings banks
47 Individuals, partnerships, and corporations
48 States and political subdivisions
49
U.S. government
50 Commercial banks in the United States
51 Banks in foreign countries
52 Foreign governments and official institutions
53 Certified and officers' checks
54 Time and savings deposits
55 Savings
56
Individuals and nonprofit organizations
Partnerships and corporations operated for profit ..
57
58
Domestic governmental units
59
All other
60 Time
Individuals, partnerships, and corporations
61
67
States and political subdivisions
63
U.S. government
Commercial banks in the United States
64
65
Foreign governments, official institutions, and
banks
Liabilities for borrowed money
66 Borrowings from Federal Reserve Banks
67 Treasury tax-and-loan notes
68 All other liabilities for borrowed money3
69 Other liabilities and subordinated notes and
debentures
70 Total liabilities
71 Residual (total assets minus total liabilities)4
July 13
July 27
Aug. 3P
Aug. 10P
Aug. 17 P Aug. 24P
Aug. 3IP
56,418
8,796
30,342
633,720
46,668
6,301
33,671
619,640
44,601
6,803
34,468
619,670
45,382
6,180
30,737
617,299
47,265
6,864
31,467
624,738
40,574
6,110
31,927
618,770
45,214
6,763
29,550
620,570
41,189
6,265
29,569
619,022
47,494
7,173
32,471
623,126
51,010
11,655
39,355
12,701
24,071
2,584
75,534
6,073
69,461
14,838
51,566
6,658
44,908
3,057
46,802
9,138
37,665
12,139
23,089
2,436
74,312
4,740
69,571
14,808
51,676
6,146
45,530
3,087
47,127
9,901
37,226
11,741
23,170
2,315
74,936
5,219
69,718
14,719
51,819
6,378
45,442
3,179
45,385
8,960
36,426
11,820
22,254
2,352
75,624
5,252
70,372
14,790
52,460
7,060
45,399
3,122
46,729
9,751
36,978
12,536
22,027
2,415
76,776
6,276
70,500
14,950
52,434
7,171
45,263
3,116
45,433
8,153
37,280
12,454
22,483
2,343
76,523
5,939
70,584
14,905
52,540
7,206
45,334
3,139
47,286
9,609
37,677
11,948
23,523
2,206
77,237
6,830
70,407
14,846
52,428
7,235
45,194
3,132
46,746
9,076
37,670
12,057
23,400
2,213
76,411
6,224
70,186
14,920
52,064
6,908
45,156
3,202
46,678
8,221
38,457
12,379
23,907
2,171
76.677
6,500
70,177
14,779
52,168
6,956
45,212
3,230
46,280
35,663
7,134
3,482
473,215
203,097
4,253
198,845
192,115
6,729
126,674
68,008
40,963
31,254
6,503
3,206
469,862
202,347
4,189
198,158
191,289
6,869
126,926
68,089
40,252
30,234
6,628
3,389
469,661
202,433
3,759
198,674
191,959
6,714
127,174
68,292
39,846
29,362
7,235
3,249
468,797
201,349
3,475
197,874
191,083
6,792
127,253
68,601
39,940
29,620
7,098
3,222
473,660
203,476
4,077
199,399
192,597
6,802
127,172
68,775
37,470
27,222
7,189
3,060
471,728
202,783
3,579
199,204
192,444
6,760
127,502
68,987
35,795
24,890
8,148
2,757
472,631
202,015
3,474
198,540
191,765
6,776
127,926
69,272
36,651
26,328
7,601
2,722
471,594
202,018
3,735
198,283
191,531
6,752
128,095
69,575
37,305
27,110
7,274
2,921
474,908
202,122
3,722
198,400
191,619
6,781
128,506
70,068
7,142
7,910
9,303
15,289
9,386
2,833
6,798
16,773
4,488
7,830
460,896
10,448
144,389
884,113
6,873
7,584
9,353
15,266
8,539
2,841
6,787
15,257
4,495
7,805
457,563
10,515
139,547
856,343
6,538
7,899
8,825
15,167
8,480
2,849
6,834
15,169
4,471
7,835
457,355
10,447
137,021
853,012
6,424
7,809
8,915
15,014
8,580
2,816
6,844
15,190
4,469
7,885
456,443
10,452
135,203
845,254
7,031
8,201
9,213
15,522
8,777
2,839
6,881
15,773
4,453
7,915
461,292
10,480
138,668
859,482
6,767
7,860
8,994
15,630
8,060
2,842
6,919
15,383
4,478
7.906
459,344
10,471
138,850
846,702
6,831
7,678
8,870
15,544
9,161
2,834
6,902
15,597
4,449
7,930
460,252
10,527
138,497
851,120
7,071
7,583
8,880
15,213
7,916
2,812
6,870
15,560
4,463
7,917
459,214
10,529
135,598
842,173
7,016
8,217
9,066
15,217
9,335
2,920
6,908
15,533
4,446
7,996
462,467
10,531
135,955
856,750
181,331
791
134,726
4,743
3,048
21,888
6,524
1,095
8,516
386,054
163,024
146,202
15,790
986
45
223,031
197,453
15,073
223
6,973
164,274
613
126,380
4,165
823
17,138
6,174
1,043
7,939
384,935
161,826
144,910
15,868
996
51
223,110
197,525
15,108
228
6,938
161,895
715
122,280
4,162
2,557
18,084
5,803
904
7,389
384,831
161,330
144,455
15,881
939
54
223,501
198,121
15,068
226
6,788
161,062
584
123,008
4,428
1,877
16,468
5,764
868
8,064
384,160
160,410
143,455
15,947
937
70
223,750
198,606
14,982
230
6,673
166,591
759
124,476
4,788
2,961
18,408
5,876
1,064
8,258
385,938
161,909
144,878
15,987
987
57
224,029
199,125
14,918
242
6,557
157,001
680
119,634
3,850
1,717
16,840
6,044
990
7,245
385,898
161,174
144,035
16,073
1,013
53
224,724
199,299
15,248
240
6,707
162,353
713
124,576
4,346
943
17,899
5,643
989
7,243
387,158
160,390
143,191
16,138
1,006
56
226,768
201,170
15,360
242
6,681
154,490
589
117,423
3,940
1,906
16,568
5,703
1,108
7,254
387,646
159,537
142,214
16,280
986
58
228,109
202,298
15,564
246
6,655
164,635
683
124,762
4,344
904
18,349
5,926
1,358
8,309
388,639
159,808
142,468
16,289
991
59
228,831
203,178
15,378
247
6,672
3,309
3,310
3,298
3,258
3,187
3,230
3,314
3,346
3,355
823
12,832
163,933
2,158
13,482
152,748
1,532
12,406
152,821
330
13,214
146,820
1,425
10,128
153,548
154
8,255
153,282
410
9,351
147,711
356
10,295
146,434
2,399
10,368
147,926
82,056
81,562
799,160
57,183
82,494
795,978
57,033
82,847
788,433
56,821
84,617
802,248
57,233
84,706
789,295
57,407
86,867
827,031
57,082
793,851
57,270
85,640
784,861
57,312
799,231
57,519
1. Includes securities purchased under agreements to resell.
2. Other than financial institutions and brokers and dealers.
3. Includes federal funds purchased and securities sold under agreement to
repurchase; for information on these liabilities at banks with assets of $1 billion or
more on Dec. 31, 1977, see table 1.13.
July 20
85,263
4. This is not a measure of equity capital for use in capital adequacy analysis or
for other analytic uses.
A22
t.28
DomesticNonfinancialStatistics • September 1983
L A R G E W E E K L Y R E P O R T I N G C O M M E R C I A L B A N K S IN N E W Y O R K CITY A s s e t s and Liabilities
Millions of dollars, W e d n e s d a y figures
1983
Account
July 6
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 securities1
July 13
July 20
July 27
Aug. 3 p
Aug. 10''
Aug. 17?
Aug. 24p
Aug. 3 If
18,333
1,327
5,679
17,270
1,015
8,965
15,348
1,204
7,594
17,454
1,045
5,212
15,948
1,194
7,014
14,191
1,163
8,569
15,675
1,149
5,397
14,689
1,133
4,683
17,099
1,020
6,303
147,043
143,658
142,440
141,740
144,824
143,069
143,861
142,695
144,843
9,109
2,083
6,362
664
8,265
1,851
5,800
614
8,268
1,871
5,829
568
7,601
1,859
5,178
564
8,108
2,452
4,851
805
8,253
2,481
5,034
738
8,438
2,464
5,517
457
8,289
2,458
5,373
458
8,843
2,396
5,986
461
14,210
1,527
11,876
1,548
10,328
807
14,317
1,532
11,978
1,530
10,448
806
14,498
1,542
12,125
1,607
10,518
830
14,844
1,550
12,496
1,942
10,554
798
14,889
1,547
12,554
2,010
10,544
788
15,046
1,544
12,713
2,103
10,610
789
14,997
1,533
12,657
2,045
10,612
807
14,820
1,586
12,428
1,835
10,593
806
14,833
1,592
12,435
1,821
10,614
806
Securities
6
7
8
9
10
11
1?
13
14
15
16
17
18
Investment account, by maturity
One year or less
Over one through five years
Over five years
Investment account
U.S. government agencies
States and political subdivisions, by maturity
One year or less
Over one year
Other bonds, corporate stocks and securities
Loans
19 Federal funds sold3
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 paper
26
All other
27
U.S. addressees
28
Non-U.S. addressees
29 Real estate
30
To individuals for personal expenditures
To financial institutions
31
Commercial banks in the United States
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 securities4 . . . .
37 To finance agricultural production
38 All other
39 LESS: Unearned income
40
Loan loss reserve
41 Other loans, net
42 Lease financing receivables
43 All other assets 5
12,247
6,740
3,942
1,565
115,421
58,458
1,076
57,382
55,791
1,591
19,505
11,822
11,355
6,378
3,445
1,532
113,668
58,760
1,324
57,436
55,784
1,653
19,546
11,810
10,521
5,506
3,241
1,774
113,102
58,494
1,026
57,468
55,898
1,570
19,546
11,830
10,590
5,354
3,745
1,491
112,706
58,670
942
57,728
56,130
1,598
19,506
11,885
10,437
4,965
3,815
1,657
115,396
59,499
1,171
58,327
56,772
1,555
19,530
11,964
10,217
4,688
4,011
1,517
113,566
58,955
1,040
57,915
56,333
1,582
19,598
12,038
10,700
5,418
3,856
1,425
113,728
58,270
975
57,294
55,725
1,569
19,938
12,069
10,457
5,300
3,796
1,362
113,134
58,584
1,195
57,390
55,791
1,598
19,998
12,096
10,672
5,467
3,670
1,535
114,536
58,029
950
57,080
55,474
1,606
20,131
12,182
2,235
2,906
3,800
4,364
6,008
735
458
5,130
1,408
2,536
111,477
1,989
66,675
1,752
2,528
3,859
4,347
5,389
708
434
4,535
1,420
2,527
109,721
2,077
59,994
1,320
2,715
3,598
4,431
5,767
695
438
4,267
1,426
2,523
109,153
2,076
58,933
1,509
2,541
3,710
4,356
5,427
642
432
4,027
1,430
2,572
108,704
2,075
57,663
1,787
2,909
3,903
4,390
5,892
644
432
4,445
1,417
2,588
111,390
2,075
61,434
1,625
2,617
3,811
4,510
4,984
654
432
4,342
1,438
2,576
109,552
2,072
59,905
1,582
2,510
3,692
4,430
5,781
649
419
4,388
1,422
2,579
109,726
2,078
60,793
1,720
2,516
3,663
4,321
4,861
608
393
4,374
1,430
2,575
109,129
2,080
59,450
1,906
2,737
3,820
4,373
6,144
635
422
4,156
1,419
2,622
110,494
2,074
59,108
44 Total assets
241,046
232,979
227,595
225,190
232,488
228,968
228,952
224,730
230,447
53,159
395
35,168
883
859
5,676
5,184
849
4,146
72,886
29,682
27,042
2,415
199
26
43,204
36,802
1,903
15
3,074
48,321
278
32,390
815
171
4,806
4,891
845
4,126
73,124
29,511
26,860
2,417
205
28
43,613
37,210
1,962
22
3,020
46,574
396
31,063
832
625
5,022
4,264
697
3,674
73,223
29,466
26,790
2,441
203
32
43,758
37,445
2,047
21
2,840
48,140
289
33,028
757
554
4,052
4,391
65*7
4,411
72,640
29,232
26,607
2,377
197
50
43,408
37,197
2,059
23
2,728
47,866
364
31,959
710
695
4,333
4,610
841
4,354
73,102
29,281
26,636
2,394
212
39
43,821
37,508
2,199
22
2,740
44,647
340
29,448
598
539
4,722
4,723
786
3,491
73,127
29,114
26,468
2,414
198
34
44,013
37,590
2,210
22
2,758
46,803
373
32,299
692
226
4,635
4,334
794
3,450
73,507
28,940
26,300
2,420
184
35
44,567
38,279
2,233
22
2,583
45,131
286
30,490
559
506
4,346
4,492
912
3,540
73,027
28,847
26,189
2,442
177
38
44,180
37,979
2,235
24
2,510
48,048
332
32,065
586
172
5,320
4,654
1,117
3,802
73,285
28,872
26,214
2,448
171
39
44,413
38,262
2,0%
24
2,584
1,410
1,400
1,404
1,401
1,352
1,432
1,450
1,433
1,447
3,003
58,105
34,291
925
3,343
53,542
34,067
3,063
51,073
34,016
3,335
47,396
34,240
450
2,317
54,112
35,027
2,119
54,074
35,278
2,432
50,296
36,163
2,755
48,718
35,327
050
2,789
49,473
36,022
221,444
213,322
207,949
205,751
212,874
209,245
209,201
204,958
210,668
19,601
19,658
19,646
19,438
19,614
19,723
19,751
19,772
19,779
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
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
66
67 Treasury tax-and-loan notes
68 All other liabilities for borrowed money 6
69 Other liabilities and subordinated notes and debentures .
70 Total liabilities
71 Residual (total assets minus total liabilities)7
1.
2.
3.
4.
Excludes trading account securities.
Not available due to confidentiality.
Includes securities purchased under agreements to resell.
Other than financial institutions and brokers and dealers.
1
5. Includes trading account securities.
6. Includes federal funds purchased and securities sold under agreements to
repurchase.
7. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
Weekly Reporting Banks
1.29
LARGE W E E K L Y REPORTING COMMERCIAL B A N K S
Millions of dollars, W e d n e s d a y
A23
Balance Sheet Memoranda
figures
1983
Account
July 6
July 13
July 20
July 27
Aug. 3p
Aug. I OP
Aug.
17?
Aug.
24P
Aug.
31 p
BANKS WITH ASSETS OF $ 7 5 0 MILLION OR MORE
1 Total loans (gross) and securities adjusted 1
2 Total loans (gross) adjusted 1
3 Demand deposits adjusted 2
647,274
508,326
107,831
637,782
504,301
107,839
639,549
504,899
104,661
638,145
504,645
105,211
644,735
508,820
105,836
641,562
507,173
105,914
645,868
508,755
106,049
642,693
506,967
102,468
646,337
510,461
105,892
4 Time deposits in accounts of $100,000 or more
5 Negotiable CDs
6 Other time deposits
143,350
95,739
47,611
142,918
94,537
48,381
142,834
93,977
48,856
142,708
93,781
48,927
142,375
93,172
49,204
142,637
93,199
49,438
144,303
94,528
49,775
145,418
95,185
50,233
145,594
95,401
50,193
2,634
2,066
2,666
2,080
2,682
2,098
2,636
2,623
2,611
2,533
2,579
2,529
568
586
584
2,033
602
2,024
599
2,010
601
1,934
598
2,022
558
1,993
536
10 Total loans (gross) and securities adjusted 1
11 Total loans (gross) adjusted 1
12 Demand deposits adjusted 2
603,233
476,689
99,977
593,813
472,699
99,644
595,204
473,140
96,653
593,867
472,857
97,335
600,455
476,950
97,958
597,166
475,210
97,869
601,228
476,705
98,297
598,003
474,846
94,827
601,442
478,087
97,888
13 Time deposits in accounts of $100,000 or more
14 Negotiable CDs
15 Other time deposits
135,111
91,101
44,010
134,657
89,910
44,747
134,572
89,359
45,213
134,369
89,111
45,258
134,087
88,550
45,537
134,291
88,530
45,761
135,795
89,755
46,040
136,797
90,336
46,460
137,033
90,626
46,407
2,580
2,023
557
2,615
2,037
578
2,633
2,057
576
2,587
1,991
596
2,574
1,981
593
2,562
1,967
595
2,484
1,890
594
2,531
1,978
553
2,480
1,949
530
142,012
118,693
28,291
139,474
116,892
26,074
139,564
116,798
25,578
138,879
116,433
26,079
142,078
119,081
26,890
140,770
117,470
25,195
140,862
117,427
26,267
139,681
116,571
25,590
141,511
117,835
25,457
32,683
22,356
10,328
32,939
22,207
10,731
33,034
22,095
10,939
32,583
21,785
10,799
32,757
21,910
10,846
32,964
22,072
10,892
33,417
22,600
10,818
33,008
22,207
10,801
33,144
22,468
10,676
7 Loans sold outright to affiliates3
8 Commercial and industrial
9 Other
BANKS WITH ASSETS OF $1 BILLION OR MORE
16 Loans sold outright to affiliates3
17 Commercial and industrial
18 Other
BANKS IN N E W YORK CITY
19 Total loans (gross) and securities adjusted 14
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.
A24
1.30
DomesticNonfinancialStatistics • September 1983
LARGE W E E K L Y REPORTING B R A N C H E S A N D AGENCIES OF FOREIGN B A N K S
Millions of dollars, W e d n e s d a y
A s s e t s and Liabilities
figures
1983
Account
July 6
July 13
July 20
July 27
Aug. 3P
Aug. 10P
Aug. 17?
Aug. 24"
Aug. 31p
Cash and due from depository institutions.
Total loans and securities
U.S. Treasury securities
Other securities
Federal funds sold1
To commercial banks in United States ..
To others
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial
paper
All other
U.S. addressees
Non-U.S. addressees
To financial institutions
Commercial banks in United States...
Banks in foreign countries
Nonbank financial institutions
For purchasing and carrying securities ..
All other
Other assets (claims on nonrelated
parties)
Net due from related institutions
Total assets
7,536
41,422
4,489
865
2,629
2,386
243
33,439
17,264
7,517
40,350
4,407
858
2,028
1,916
113
33,057
17,382
7,340
41,797
4,396
858
2,413
2,293
120
34,130
18,323
7,399
40,668
4,369
927
1,850
1,774
76
33,522
18,132
7,874
40,852
4,100
847
2,174
2,049
125
33,731
18,116
7,366
41,225
4,060
848
2,534
2,258
276
33,783
18,034
7,283
40,804
4,255
862
1,876
1,728
148
33,811
18,358
6,846
41,616
4,215
862
2,503
2,396
106
34,036
18,365
7,323
42,942
4,378
901
2,711
2,520
190
34,952
18,734
2,817
14,447
12,732
1,715
12,140
9,470
2,010
660
249
3,786
2,856
14,526
12,792
1,734
11,846
9,400
1,870
576
220
3,609
2,981
15,342
13,591
1,751
11,707
9,370
1,740
597
342
3,757
3,020
15,112
13,327
1,785
11,485
9,213
1,686
586
185
3,720
3,037
15,079
13,343
1,736
11,462
9,141
1,732
590
401
3,752
3,163
14,871
13,123
1,748
11,782
9,522
1,659
600
298
3,670
3,099
15,259
13,450
1,809
11,472
9,174
1,685
613
365
3,615
3,013
15,352
13,542
1,810
11,636
9,294
1,740
602
406
3,629
3,004
15,731
13,938
1,793
12,080
9,689
1,802
589
466
3,672
10,111
12,530
71,599
10,237
11,826
69,930
11,009
12,142
72,289
10,803
12,469
71,339
11,130
11,543
71,400
11,250
11,097
70,938
11,304
10,968
70,360
11,218
11,882
71,562
11,436
12,615
74,317
23 Deposits or credit balances2
24 Credit balances
25 Demand deposits
Individuals, partnerships, and
26
corporations
Other
27
28 Total time and savings
Individuals, partnerships, and
29
corporations
Other
30
31 Borrowings3
32 Federal funds purchased 4
33
From commercial banks in United
States
34
From others
3S
Other liabilities for borrowed m o n e y . . . .
36
To commercial banks in United States
37
To others
38 Other liabilities to nonrelated parties
39 Net due to related institutions
40 Total liabilities
20,428
203
2,034
20,165
158
1,875
20,195
155
1,934
20,599
168
1,864
21,089
195
1,937
20,876
166
1,816
20,326
190
1,770
20,643
147
1,742
21,197
188
1,976
985
1,049
18,190
892
983
18,131
933
1,001
18,106
942
922
18,567
844
1,093
18,957
785
1,030
18,894
834
936
18,366
790
952
18,754
809
1,167
19,033
15,431
2,759
32,293
12,194
15,382
2,750
30,256
9,793
15,088
3,017
32,947
11,018
15,752
2,816
32,826
11,018
16,095
2,862
32,599
9,716
16,146
2,749
32,179
9,141
15,647
2,719
32,414
9,318
15,950
2,804
32,731
9,312
16,381
2,652
33,801
10,243
10,520
1,674
20,099
17,211
2,888
11,203
7,674
71,599
7,954
1,838
20,463
17,696
2,767
11,180
8,329
69,930
9,239
1,779
21,929
18,137
3,792
11,400
7,747
72,289
9,100
1,918
21,808
17,750
4,058
11,447
6,467
71,339
7,790
1,925
22,883
18,695
4,188
11,730
5,982
71,400
7,260
1,880
23,038
19,062
3,976
11,889
5,994
70,938
7,510
1,808
23,095
19,168
3,927
12,083
5,536
70,360
7,281
2,032
23,419
19,480
3,939
12,035
6,153
71,562
8,142
2,101
23,558
19,618
3,940
12,191
7,128
74,317
29,566
24,212
29,035
23,770
30,134
24,880
29,680
24,384
29,663
24,716
29,445
24,537
29,903
24,785
29,926
24,849
30,732
25,453
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
2.1
22
MEMO
41 Total loans (gross) and securities
adjusted*
42 Total loans (gross) adjusted 5
1. Includes securities purchased under agreements to resell.
2. Balances due to other than directly related institutions.
3. Borrowings from other than directly related institutions.
4. Includes securities sold under agreements to repurchase.
5. Excludes loans and federal funds transactions with commercial banks in
United States.
IPC Demand Deposits
1.31
A25
G R O S S D E M A N D D E P O S I T S of Individuals, Partnerships, and Corporations'
Billions of dollars, e s t i m a t e d daily-average b a l a n c e s
Commercial banks
Type of holder
1978
Dec.
19792
Dec.
1980
Dec.
1982
1981
Dec.
Mar.
June
1983
Sept.
Dec.
Mar.
June
1 All holders—Individuals, partnerships, and
corporations
294.6
302.2
315.5
288.9
268.9
271.5
276.7
295.4
283.5
289.5
7
3
4
5
6
27.8
152.7
97.4
2.7
14.1
27.1
157.7
99.2
3.1
15.1
29.8
162.3
102.4
3.3
17.2
28.0
154.8
86.6
2.9
16.7
27.8
138.7
84.6
3.1
14.6
28.6
141.4
83.7
2.9
15.0
31.9
142.9
83.3
2.9
15.7
35.5
151.7
88.1
3.0
17.1
34.0
144.4
85.5
3.2
16.4
35.1
147.7
86.9
3.0
16.8
Financial business
Nonfinancial business
Consumer
Foreign
Other
Weekly reporting banks
1978
Dec.
19794
Dec.
1980
Dec.
1982
1981
Dec.
Mar.
7 Ail holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
Sept.
Dec.
Mar.
June
147.0
139.3
147.4
137.5
126.8
127.9
132.1
144.0
140.7
141.9
19.8
79.0
38.2
2.5
7.5
20.1
74.1
34.3
3.0
7.8
21.8
78.3
35.6
3.1
8.6
21.0
75.2
30.4
2.8
8.0
20.2
67.1
29.2
2.9
7.3
20.2
67.7
29.7
2.8
7.5
23.4
68.7
29.6
2.7
7.7
26.7
74.2
31.9
2.9
8.4
25.2
72.7
31.2
3.0
8.6
26.3
73.1
30.4
2.9
9.3
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.
June
1983
3. Demand deposit ownership survey estimates for June 1981 are not available
due to unresolved reporting errors.
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.
A26
DomesticNonfinancialStatistics • September 1983
1.32
COMMERCIAL PAPER A N D B A N K E R S DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1983
1978
Dec.
Instrument
1979'
Dec.
1981
Dec.
1980
Dec.
1982
Dec. 2
Feb.
Mar.
Apr.
May
June
July
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
Financial companies3
Dealer-placed paper4
Total
Bank-related (not seasonally
adjusted)
Directly placed paper5
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies6
83,438
112,803
124,374
165,455
166,208
168,562
167,665
170,659
169,503
170,716
172,150
12,181
17,359
19,599
29,904
34,067
37.593
36,255
37,481
38,645
39,850
39,027
3,521
2,784
3,561
6,045
2,516
2,604
2,030
1,950
1,954
2,192
2,367
51,647
64,757
67,854
81,715
84,183
84,932
85,773
87,831
87,238
87,749
89,585
12,314
19,610
17,598
30,687
22,382
36,921
26,914
53,836
32,034
47,958
31,661
46,037
32,951
45,637
32,495
45,347
32,943
43,620
33,420
43,117
33,613
43,538
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
33,700
45,321
54,744
69,226
79,543
73,706
70,843
70,389
68,797
70,907
8,579
7,653
927
9,865
8,327
1,538
10,564
8,963
1,601
10,857
9,743
1,115
10,910
9,471
1,439
9,567
8,258
1,308
10,518
9,083
1,435
9,494
7,951
1,543
8,223
7,497
726
9,147
7,998
1,148
587
664
23,870
704
1,382
33,370
776
1,791
41,614
195
1,442
56,926
1,480
949
66,204
0
1,003
63,136
0
758
59,568
0
778
60,118
0
788
59,786
0
792
60,968
8,574
7,586
17,540
10,270
9,640
25,411
11,776
12,712
30,257
14,765
15,400
39,061
17,683
16,328
45,532
14,976
17,633
41,097
14,217
16,826
39,800
14,418
17,124
38,848
13,858
16,074
38,865
14,324
16,356
40,226
1. A change in reporting instructions results in offsetting shifts in the dealerplaced and directly placed financial company paper in October 1979.
2. Effective December 1, 1982, there was a break in the commercial paper
series. The key changes in the content of the data involved additions to the
reporting panel, the exclusion of broker or dealer placed borrowings under any
master note agreements from the reported data, and the reclassification of a large
portion of bank-related paper from dealer-placed to directly placed.
3. Institutions engaged primarily in activities such as, but not limited to,
commercial, savings, and mortgage banking; sales, personal, and mortgage
1.33
financing; factoring, finance leasing, and other business lending; insurance
underwriting; and other investment activities.
4. Includes all financial company paper sold by dealers in the open market.
5. As reported by financial companies that place their paper directly with
investors.
6. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
PRIME R A T E C H A R G E D B Y B A N K S on Short-Term Business Loans
Percent per annum
1981—No v. 24
Dec. 1
16.00
1982—Feb. 18
23
July 20
29
Aug. 2
16
17.00
16.50
16.00
15.50
15.00
14.50
14.00
18
Average
rate
Effective Date
Effective date
15.75
-Aug. 23
Oct. 7
14
Nov. 22
1983- -Jan. 11
Feb. 28
Aug. 8
13.50
13.00
12.00
11.50
11.00
10.50
11.00
n.a.
1982—Jan
Feb
Mar
Apr
June
July
Aug
Sept
Oct
Nov. . . . '
Dec
...
15.75
16.56
16.50
16.50
16.50
16.50
16.26
14.39
13.50
12.52
11.85
11.50
Month
1983—Jan
Feb
Mar
June
July
Aug
Business Lending
1.34
All
T E R M S O F 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 2 - 6 , 1983
Size of loan (in thousands of dollars)
Item
All
sizes
1-24
50-99
25-49
100-499
500-999
and over
SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS
Amount of loans (thousands of dollars)
? Number of loans
Weighted-average maturity (months)
With fixed rates
With floating rates
Weighted-average interest rate (percent per annum) ..
Interquartile range 1
With fixed rates
With floating rates
1
3
4
5
6
7
8
9
10
11
12
13
Percentage of amount of loans
With floating rate
Made under commitment
With no stated maturity
With one-day maturity
37,412,526
200,209
1.4
.9
2.3
10.31
9.55-10.52
10.21
10.46
1,048,071
139,045
4.0
3.4
5.5
13.86
12.68-14.49
14.39
12.96
837,428
25,153
1.2
3.7
5.3
13.68
12.34-14.11
14.36
12.55
1,106,290
17,287
4.5
3.3
5.9
12.62
11.57-13.80
13.29
12.00
2,183,547
12,630
5.0
4.7
5.1
11.87
11.02-12.47
11.86
11.87
1,037,743
1,571
3.3
2.0
4.1
11.34
10.92-12.10
10.72
11.58
31,199,446
4,522
.8
.5
1.6
9.87
9.52-9.96
9.80
10.00
40.1
65.6
13.4
37.3
36.6
39.5
12.7
.1
37.6
37.9
18.1
.0
51.9
61.4
16.9
.1
63.5
54.2
29.7
.4
71.6
70.5
32.2
2.1
37.2
68.0
11.4
44.6
1-99
LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
With fixed rates
With floating rates
Weighted-average interest rate (percent per annum) ..
70 Interquartile range 1
With fixed rates
?1
With floating rates
22
14
15
16
17
18
19
73
24
Percentage of amount of loans
With floating rate
Made under commitment
4,113,314
38,455
55.6
43.5
61.5
11.46
9.71-12.19
12.31
11.04
775,809
35,820
33.4
36.9
26.3
14.52
12.13-14.93
15.02
13.51
418,758
1,990
35.6
21.9
46.4
12.87
11.73-14.00
13.78
12.15
178,643
262
44.5
58.2
42.0
11.92
11.19-12.68
11.96
11.92
2,740,104
383
65.6
54.7
68.8
10.35
9.63-11.02
9.61
10.56
67.2
71.8
33.0
18.3
56.1
42.7
84.7
75.9
77.4
91.2
1-24
CONSTRUCTION AND L A N D DEVELOPMENT LOANS
75
76
27
78
29
30
31
3?
33
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
With fixed rates
With floating rates
Weighted-average interest rate (percent per annum) ..
Interquartile range 1
With fixed rates
With floating rates
34
3S
36
37
38
Percentage of amount of loans
With floating rate
Secured by real estate
Made under commitment
With no stated maturity
With one-day maturity
Type of construction
39 1- to 4-family
40 Multifamily
41 Nonresidential
LOANS TO FARMERS
4?
43
44
45
46
47
48
49
50
Amount of loans (thousands of dollars)
Number of loans
Weighted-average maturity (months)
Weighted-average interest rate (percent per annum) ..
Interquartile range 1
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
51
1,917,014
25,727
8.3
5.2
12.2
11.72
10.18-12.68
11.53
11.93
199,628
21,047
5.8
5.7
5.9
14.44
13.50-14.74
14.97
13.34
77,218
2,219
7.1
6.8
8.0
13.99
13.52-14.76
14.42
12.93
47,315
716
13.8
8.6
14.8
12.91
12.46-13.31
13.16
12.87
438,205
1,460
7.6
6.1
11.3
12.08
11.84-12.12
11.93
12.46
1,154,649
284
8.9
4.4
12.9
10.91
9.55-12.41
10.01
11.59
47.7
56.7
48.3
6.9
18.0
32.2
75.3
41.5
10.7
.0
28.8
94.1
61.9
2.8
.0
85.0
84.2
64.8
7.0
.4
29.5
93.5
22.4
2.5
.0
56.9
36.0
57.7
8.2
29.9
7.3
5.5
87.2
20.2
14.6
65.1
17.2
6.1
76.7
46.1
17.2
36.7
8.3
7.4
84.3
2.4
2.6
95.0
All sizes
25-49
10-24
1-9
100-249
50-99
1,698,648
79,848
195,436
54,748
204,859
13,889
168,982
5.146
10.6
13.26
12.13-14.21
6.8
14.01
13.43-14.56
8.8
13.80
13.29-14.18
8.0
13.60
12.96-14.20
13.35
13.00
13.25
14.78
12.62
14.26
14.01
13.98
13.90
14.19
13.90
12.96
13.59
15.01
14.08
13.75
13.80
13.64
12.97
1. Interest rate range that covers the middle 50 percent of the total dollar
amount of loans made.
2. Fewer than 10 sample loans.
50-99
25-49
13.44
254,228
3,625
7.7
240,631
1,724
250 and over
634,513
14.23
13.42-15.19
29.4
13.68
13.00-14.45
717
7.0
12.21
11.83-12.55
14.36
13.26
13.54
15.68
13.75
13.71
(2)
13.76
14.16
13.74
12.17
(2)
12.35
(2)
12.03
NOTE. For more detail, see the Board's E.2 (111) statistical release,
A28
1.35
DomesticNonfinancialStatistics • September 1983
I N T E R E S T R A T E S M o n e y and Capital Markets
A v e r a g e s , p e r c e n t p e r a n n u m ; weekly and m o n t h l y figures are averages of business day data unless o t h e r w i s e n o t e d .
1983
Instrument
1980
1981
1983, week ending
1982
May
June
July
Aug.
Aug. 5
Aug. 12
Aug. 19
Aug. 26
Sept. 2
MONEY MARKET RATES
1 Federal funds1-2
Commercial paper 3 ' 4
1-month
2
3 3-month
4 6-month
Finance paper, directly placed3-4
5
1-month
6 3-month
7 6-month
Bankers acceptances4-5
8 3-month
9 6-month
Certificates of deposit, secondary market6
10 1-month
11 3-month
12 6-month
13 Eurodollar deposits, 3-month2
U.S. Treasury bills4
Secondary market 7
14
3-month
15
6-month
16
1-year
Auction average8
17
3-month
18
6-month
19
13.36
16.38
12.26
8.63
8.98
9.37
9.56
9.59
9.66
9.67
9.41
9.44
12.76
12.66
12.29
15.69
15.32
14.76
11.83
11.89
11.89
8.36
8.33
8.31
8.97
9.00
9.03
9.15
9.25
9.36
9.41
9.54
9.68
9.42
9.61
9.79
9.59
9.75
9.90
9.46
9.55
9.67
9.20
9.30
9.39
9.34
9.46
9.61
12.44
11.49
11.28
15.30
14.08
13.73
11.64
11.23
11.20
8.28
8.19
8.15
8.86
8.81
8.80
9.13
9.11
9.10
9.35
9.41
9.42
9.36
9.39
9.44
9.50
9.55
9.53
9.39
9.48
9.48
9.16
9.25
9.30
9.34
9.34
9.32
12.72
12.25
15.32
14.66
11.89
11.83
8.36
8.33
9.04
9.06
9.33
9.47
9.59
9.71
9.65
9.88
9.83
9.97
9.57
9.62
9.36
9.41
9.52
9.68
12.91
13.07
12.99
14.00
15.91
15.91
15.77
16.79
12.04
12.27
12.57
13.12
8.44
8.49
8.62
8.96
9.06
9.20
9.45
9.67
9.30
9.50
9.91
10.00
9.52
9.77
10.17
10.27
9.54
9.82
10.35
10.30
9.65
9.99
10.43
10.50
9.59
9.78
10.10
10.30
9.34
9.49
9.82
10.04
9.46
9.73
10.14
10.13
11.43
11.37
10.89
14.03
13.80
13.14
10.61
11.07
11.07
8.19
8.22
8.23
8.79
8.89
8.87
9.08
9.26
9.34
9.34
9.51
9.60
9.41
9.58
9.71
9.52
9.67
9.80
9.35
9.45
9.50
9.15
9.32
9.37
9.26
9.52
9.64
11.506
11.374
10.748
14.029
13.776
13.159
10.686
11.084
11.099
8.19
8.20
8.05
8.82
8.89
8.80
9.12
9.29
9.36
9.39
9.53
9.77
9.36
9.56
9.57
9.70
9.77
9.43
9.55
9.18
9.29
9.28
9.53
10.43
10.57
11.17
11.49
11.61
11.71
11.81
11.69
10.27
10.65
10.80
11.00
11.03
11.34
11.47
11.58
11.71
11.55
CAPITAL MARKET RATES
U.S. Treasury notes and bonds 9
Constant maturities10
1-vear
20
71
2-vear
22
73
2-w-year 12
24
3-year
5-year
25
26
7-year
10-year
27
28
20-year
30-year
29
30
Composite13
Over 10 years (long-term)
State and local notes
and bonds
Moody's series14
31
Aaa
32
Baa
33 Bond Buyer series 15
34
35
36
37
38
39
40
Corporate bonds 16
Seasoned issues
All industries
Aaa
Aa
A
Baa
Aaa utility bonds 17
Recently offered issues
MEMO: Dividend/price ratio18
41 Preferred stocks
42 Common stocks
12.05
14.78
12.27
8.90
9.66
10.20
10.53
10.63
11.77
14.56
12.80
9.49
10.18
10.69
11.07
11.18
11.55
11.48
11.43
11.46
11.39
11.30
14.44
14.24
14.06
13.91
13.72
13.44
12.92
13.01
13.06
13.00
12.92
12.76
9.66
10.03
10.30
10.38
10.67
10.53
10.32
10.63
10.83
10.85
11.12
10.93
10.90
11.21
11.35
11.38
11.59
11.40
11.30
11.63
11.77
11.85
11.96
11.82
11.38
11.74
11.88
11.95
12.10
11.93
10.77
11.05
11.34
11.40
11.58
11.89
12.06
12.10
12.18
12.05
10.81
12.87
12.23
10.21
10.64
11.10
11.42
11.52
11.65
11.28
11.18
11.52
7.85
9.01
8.59
10.43
11.76
11.33
10.88
12.48
11.66
8.39
9.74
9.11
8.76
10.21
9.52
8.70
10.06
9.53
9.04
10.25
9.72
9.00
10.20
9.74
9.15
10.40
9.85
9.00
10.20
9.70
9.00
10.20
9.59
9.10
10.25
9.75
12.75
11.94
12.50
12.89
13.67
15.06
14.17
14.75
15.29
16.04
14.94
13.79
14.41
15.43
16.11
12.30
11.46
11.95
12.68
13.09
12.54
11.74
12.15
12.88
13.37
12.73
12.15
12.39
12.99
13.39
13.01
12.51
12.72
13.17
13.64
13.06
12.62
12.77
13.18
13.64
13.16
12.71
12.88
13.30
13.75
12.97
12.40
12.68
13.16
13.63
12.87
12.32
12.54
13.07
13.55
13.03
12.54
12.76
13.16
13.65
12.74
12.70
15.56
15.56
14.41
14.45
11.32
11.37
11.87
11.81
12.32
12.39
12.25
12.75
12.86
12.90
12.68
12.25
12.53
12.80
10.60
5.26
12.36
5.20
12.53
5.81
10.65
4.27
10.81
4.26
11.06
4.21
11.07
4.35
11.04
4.34
11.22
4.39
10.93
4.29
11.09
4.40
11.05
4.32
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 ire 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150—
179 days for finance paper.
4. Yields are quoted on a bank-discount basis, rather than an investment yield
basis (which would give a higher figure).
5. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
6. Unweighted average of offered rates quoted by at least five dealers early in
the day.
7. Unweighted average of closing bid rates quoted by at least five dealers.
8. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
9. Yields are based on closing bid prices quoted by at least five dealers.
10. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
FRASER
actively
traded securities.
Digitized for
10.93
11.14
11.41
11.73
11.88
11.94
12.09
11.92
11. Each biweekly figure is the average of five business days ending on the
Monday following the date indicated. Beginning Apr. 1, 1983, this rate determines
the maximum interest payable in the following two-week period on l-'/z-year small
saver certificates. (See table 1.16.)
12. Each biweekly figure is the average of five business days ending on the
Monday following the date indicated. Until Mar. 31, 1983, the biweekly rate
determined the maximum interest rate payable in the following two-week period
on 2-Vi-year small saver certificates. (See table 1.16.)
13. Averages of yields (to maturity or call) for all outstanding bonds neither due
por callable in less than 10 years, including several very low yielding "flower"
bonds.
14. General obligations only, based on figures for Thursday, from Moody's
Investors Service.
15. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
16. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
17. Compilation of the Federal Reserve. 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.
18. Standard and Poor's corporate series. Preferred stock ratio based on a
sample often issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
Securities Markets
1.36
STOCK M A R K E T
A29
Selected Statistics
1982
1980
Indicator
1981
1983
1982
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
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
4
Utility
5
Finance
6 Standard & Poor's Corporation (1941-43 = 10)1
7 American Stock Exchange 2
(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
118.71
74.02
85.44
72.61
38.90
73.52
128.05
68.93
78.18
60.41
39.75
71.99
119.71
80.30
92.00
73.40
42.93
86.22
139.37
83.25
95.37
75.65
45.59
85.66
145.13
84.74
97.26
79.44
45.92
86.57
146.80
87.50
100.61
83.28
45.89
93.22
151.88
90.61
104.46
85.26
46.22
99.07
157.71
94.61
109.43
89.07
47.62
102.45
164.10
96.43
112.52
92.22
46.76
101.22
166.39
96.74
113.21
92.91
46.61
99.60
166.96
93.96
109.50
88.06
46.94
95.76
162.42
150.47
171.79
141.31
166.68
180.47
187.17
191.88
202.51
223.97
237.51
244.03
230.10
44,867
6,377
46,967
5,346
64,617
5,283
76,463
7,475
88,463
9,220
85,026
8,256
82,694
7,354
89,627
8,576
93,016
12,260
89,729
10,874
79,508
8,199
74,191
6,329
Customer financing (end-of-period balances, in millions of dollars)
10 Regulated margin credit at
brokers-dealers 3
14,721
14,411
13,325
13,325
13,370
13,985
14,483
15,590
16,713
18,292
19,218
11 Margin stock 4
12 Convertible bonds
13 Subscription issues
14,500
219
2
14,150
259
2
12,980
344
1
12,980
344
1
13,070
299
1
13,680
304
1
14,170
312
1
15,260
329
1
16,370
342
1
17,930
361
1
18,870
347
1
2,105
6,070
3,515
7,150
5,735
8,390
5,735
8,390
6,257
8,225
6,195
7,955
6,370
7,965'
6,090
7,970
6,090
8,310
6,150
8,590
6,275
8,145
Free credit balances at
14 Margin-account
15 Cash-account
|
t
n.a.
brokers5
Margin-account debt at brokers (percentage distribution, end of period)
16 Total
17
18
19
20
21
22
By equity class (in
Under 40
40-49
50-59
60-69
70-79
80 or more
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
14.0
30.0
25.0
14.0
9.0
8.0
37.0
24.0
17.0
10.0
6.0
6.0
21.0
24.0
24.0
14.0
9.0
8.0
21.0
24.0
24.0
14.0
9.0
8.0
18.0
23.0
25.0
16.0
9.0
9.0
18.0
20.0
27.0
16.0
10.0
9.0
17.0
21.0
25.0
18.0
10.0
9.0
14.0
19.0
28.0
19.0
10.0
9.0
14.0
19.0
30.0
16.0
11.0
9.0
13.0
21.0
29.0
16.0
12.0
9.0
21.0
28.0
21.0
14.0
9.0
7.0
percent)6
n.a.
1
1
1
Special miscellaneous-account balances at brokers (end of period)
23 Total balances (millions of dollars)
Distribution by equity status
(percent)
24 Net credit status
Debt status, equity of
25
60 percent or more
26
Less than 60 percent
7
35,598
35,598
43,838
43,006
43,472
44,999
45,465
47,100
50,580
58.0
62.0
62.0
65.0
66.0
62.0
64.0
62.0
62.0
62.0
31.0
29.0
9.0
29.0
9.0
28.0
8.0
27.0
7.0
28.0
9.0
30.0
6.0
32.0
6.0
33.0
5.0
31.0
6.0
21,690
25,870
47.8
44.4
7.7
11.0
t1
t
n.a.
Margin requirements (percent of market value and effective date) 8
27 Margin stocks
28 Convertible bonds
29 Short sales
Mar. 11, 1968
June 8, 1968
70
50
70
80
60
80
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Margin credit includes all credit extended to purchase or caiTy stocks or
related equity instruments and secured at least in part by stock. Credit extended is
end-of-month data for member firms of the New York Stock Exhange.
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.
4. A distribution of this total by equity class is shown on lines 17-22.
5. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
May 6, 1970
65
50
65
Dec. 6, 1971
55
50
55
Nov. 24, 1972
65
50
65
Jan. 3, 1974
50
50
50
6. Each customer's equity in his collateral (market value of collateral less net
debit balance) is expressed as a percentage of current collateral values.
7. 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.
8. 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.
A30
1.37
DomesticNonfinancialStatistics • September 1983
SELECTED FINANCIAL INSTITUTIONS
Selected A s s e t s and Liabilities
Millions of dollars, end of period
1983
1982
Account
1980
1981
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May r
June
July
Savings and loan associations
2 Mortgages
3 Cash and investment securities 1
4 Other
630,712
503,192
57,928
69,592
664,167
518,547
63,123
82,497
692,549
489,923
75,638
126,988
697,189
488,614
78,122
130,453
706,045
482,234
84,767
139,044
714,676
481,470
90,662
142,544
772,352
481,090
94,080
147,182
723,616
475,688
96,649
151,279
727,659
473,813
98,933
152,913
726,331
470,999
103,050
152,282
729,168
471,853
100,816
156,499
736,755
476,158
101,447
159,150
5 Liabilities and net worth
630,712
664,167
692,549
697,189
706,045
714,676
772,352
723,616
727,659
726,331
729,168
736,755
511,636
64,586
47,045
17,541
8,767
12,394
525,061
88,782
62,794
25,988
6,385
15,544
547,112
100,881
65,015
35,866
8,484
20,018
548,439
102,948
64,202
38,746
8,967
21,048
566,189
97,979
63,861
34,118
9,934
15,720
582,918
88,925
60,415
28,510
10,453
16,658
591,913
86,544
58,841
27,703
11,039
17,524
597,112
84,884
56,859
28,025
12,245
14,767
600,508
83,552
55,845
27,707
13,447
16,181
598,168
82,548
54,274
28,274
14,504
18,276
601,425
84,135
54,101
30,034
15,935
15,505
606,487
84,332
53,409
30,923
16,925
17,827
12 Net worth 2
33,329
28,395
24,538
24,754
26,157
26,175
26,371
26,853
27,418
27,339
28,103
28,109
13 MEMO: Mortgage
loan commitments
outstanding 3
16,102
15,225
18,407
19,682
18,054
19,453
22,051
24,885
27,912
30,060
30,576
32,074
6
7
8
9
10
11
Savings capital
Borrowed money
FHLBB
Other
Loans in process
Other
Mutual savings banks 4
171,564
175,728
172,908
172,287
174,197
174,726
176,378
178,814
178,826
180,071
181,975
99,865
11,733
99,997
14,753
94,261
17,035
94,017
16,702
94,091
16,957
93,944
17,420
93,607
18,211
93,822
17,837
93,311
18,353
93,587
17,893
94,000
17,438
8,949
2,390
39,282
4,334
5,011
9,810
2,288
37,791
5,442
5,649
9,219
2,505
35,599
6,749
7,540
9,456
2,496
35,753
6,291
7,572
9,743
2,470
36,161
6,919
7,855
10,248
2,446
36,430
6,275
7,963
11,081
2,440
36,905
6,104
8,031
12,187
2,403
37,827
6,548
8,189
12,364
2,311
38,342
6,039
8,107
13,110
2,260
39,142
5,960
8,118
13,572
2,257
40,206
6,224
8,276
22 Liabilities
171,564
175,728
172,908
172,287
174,197
174,726
176,378
178,814
178,826
180,071
181,975
23
24
25
26
27
28
29
30
154,805
151,416
53,971
97,445
2,086
6,695
11,368
155,110
153,003
49,425
103,578
2,108
10,632
9,986
152,210
149,928
48,520
101,408
2,283
11,556
9,141
151,304
149,167
49,208
99,959
2,137
11,893
9,089
155,196
152,777
46,862
96,369
2,419
8,336
9,235
157,113
154,876
41,850
90,184
2,237
7,722
9,196
159,162
156,915
41,165
87,377
2,247
7,542
9,197
161,489
159,088
41,183
86,276
2,401
7,395
9,342
161,262
158,760
40,379
84,593
2,502
7,631
9,352
162,287
159,840
40,467
83,506
2,447
3,114
9,377
163,990
161,573
40,451
84,705
2,417
7,754
9,575
1,476
1,293
1,281
1,400
1,285
1,253
1,295
1,639
1,860
1,860
1,884
14 Assets
15
16
17
18
19
20
21
Loans
Mortgage
Other
Securities
U.S. government 5
State and local government
Corporate and other 6
Cash
Other assets
Deposits
Regular7
Ordinary savings
Time
Other
Other liabilities
General reserve accounts
MEMO: Mortgage loan commitments
outstanding®
n a.
Life insurance companies
31 Assets
32
33
34
35
36
37
38
39
40
41
42
Securities
Government
United States 9 .
State and local
Foreign 10
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
479,210
525,803
571,902
578,200
584,311
589,490
595,959
602,770
609,298
591,375
628,224
21,378
5,345
6,701
9,332
238,113
190,747
47,366
131,030
15,063
41,411
31,702
25,209
8,167
7,151
9,891
255,769
208,098
47,670
137,747
18,278
48,706
40,094
31,791
13,538
7,871
10,382
279,918
226,879
53,039
140,678
20,293
52,751
46,471
32,682
14,370
7,935
10,377
283,650
229,101
54,549
140,956
20,480
52,916
47,516
34,558
16,072
8,094
10,392
283,799
228,220
55,579
141,919
21,019
53,114
49,902
35,567
16,731
8,225
10,611
290,178
233,380
56,798
142,277
20,922
53,239
47,307
36,946
17,877
8,333
10,736
293,427
235,376
58,051
142,683
21,014
53,383
48,506
38,469
19,213
8,368
10,888
296,223
236,420
59,803
143,031
21,175
53,560
50,322
39,210
19,213
8,524
10,940
300,558
238,689
61,869
143,011
21,352
53,715
51,452
42,522
20,705
10,053
11,764
309,254
245,833
63,421
143,758
21,344
53,804
49,889
43,348
21,141
10,355
11,852
313,510
248,248
65,262
144,725
21,629
53,914
51,098
Credit unions"
43 Total assets/liabilities and capital.
44
Federal
45
State
71,709
39,801
31,908
77,682
42,382
35,300
68,157
44,388
23,769
68,876
44,986
23,890
69,572
45,483
24,089
69,639
45,418
24,221
71,190
46,449
24,741
73,630
48,057
25,573
74,607
48,628
25,979
76,605
49,869
26,736
46 Loans outstanding
47
Federal
48
State
49 Savings
50
Federal (shares)
51
State (shares and deposits).
47,774
25,627
22,147
64,399
36,348
28,051
50,448
27,458
22,990
68,871
37,574
31,297
42,971
27,648
15,323
61,829
40,535
21,294
42,995
27,728
15,267
62,673
41,076
21,597
43,223
27,941
15,282
62,977
41,341
21,636
42,942
27,724
15,218
63,226
41,441
21,785
42,785
27,592
15,193
64,587
42,404
22,183
43,081
27,733
15,348
67,164
43,890
23,274
43,509
27,995
15,514
68,404
44,741
23,663
44,012
28,336
15,676
70,080
45,782
24,298
For notes see bottom of opposite page.
n .a.
Federal Finance
1.38
A31
FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
Fiscal
year
1980
Fiscal
year
1981
Fiscal
year
1982
1982
HI
1983
H2
HI
1983
May
June
July
U.S. budget
1 Receipts'
2 Outlays1-2
3 Surplus, or deficit ( - )
4 Trust funds
5 Federal funds 3
517,112
576,675
-59,563
8,801
-68,364
599,272
657,204
-57,932
6,817
-64,749
617,766
728,375
-110,609
5,456
-116,065
322,478
348,678
-26,200
-17,690
-43,889
286,338
390,846
-104,508
-6,576
-97,934
306,331
396,477
-90,146
22,680
-112,822
33,755
63,040
-29,285
24,923
-54,208
66,517
63,116
3,401
3,722
-318
43,948
65,360
-21,412
-5,592
-15,820
Off-budget entities (surplus, or deficit
(-))
Financing Bank outlays
6 Federal
7 Other4
-14,549
303
-20,769
-236
-14,142
-3,190
-7,942
227
-4,923
-2,267
-5,418
-528
-1,433
242
-1,128
-889
-1,326
33
-73,808
-78,936
-127,940
-33,914
-111,699
-96,094
-30,476
1,382
-22,705
70,515
79,329
134,993
41,728
119,609
102,538
18,497
25,719
11,877
-355
3,648
-1,878
1,485
-11,911
4,858
-408
-7,405
-9,057
1,146
-9,664
3,222
19,189
-7,209
-23,605
-3,496
6,317
4,511
20,990
4,102
16,888
18,670
3,520
15,150
29,164
10,975
18,189
10,999
4,099
6,900
19,773
5,033
14,740
100,243
19,442
72,037
5,233
4,372
861
27,997
8,764
19,233
18,469
4,189
14,280
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 Feb. 8, 1982, supplemental medical insurance premiums and
voluntary hospital insurance premiums, previously included in other insurance
receipts, have been reclassified as offsetting receipts in the health function.
2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was
reclassified from an off-budget agency to an on-budget agency in the Department
of Labor.
3. Half-year figures are calculated as a residual (total surplus/deficit less trust
fund surplus/deficit).
4. Other off-budget includes Postal Service Fund; Rural Electrification and
Telephone Revolving Fund; and Rural Telephone Bank; it also includes petroleum
acquisition and transportation and strategic petroleum reserve effective November 1981.
5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold
tranche drawing rights; loans to International Monetary 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) and asset accounts; seigniorage; increment on gold; net gain/'loss for U.S.
currency valuation adjustment; net gain/loss for IMF valuation adjustment; and
profit on the sale of gold.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government." Treasury Bulletin, and the Budget of the United States Government, Fiscal Year 1984.
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. Before that date, data were reported on a
gross-of-valuation-reserves basis.
5. Beginning April 1979, includes obligations of U.S. government agencies.
Before that date, this item was included in "Corporate and other."
6. Includes securities of foreign governments and international organizations
and, before April 1979, nonguaranteed issues of U.S. government agencies.
7. Excludes checking, club, and school accounts.
8. Commitments outstanding (including loans in process) of banks in New York
State as reported to the Savings Banks Association of the state of New York.
9. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under "Business" securities.
10. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
11. As of June 1982, data include only federal or federally insured state credit
unions serving natural persons.
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 federally insured state credit unions serving natural persons.
Figures are preliminary and revised annually to incorporate recent benchmark
data.
A32
1.39
DomesticNonfinancialStatistics • September 1983
U.S. B U D G E T RECEIPTS A N D O U T L A Y S
Millions of dollars
Calendar year
Source or type
Fiscal
year
1980
Fiscal
year
1981
Fiscal
year
1982
1982
1983
HI
H2
HI
1983
May
July
June
RECEIPTS
1 A11 sources1
2 Individual income taxes, net
3 Withheld
Presidential Election Campaign Fund . . .
4
5
Nonwithheld
6
Refunds
Corporation income taxes
7 Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10 Payroll employment taxes and
contributions 2
Self-employment taxes and
11
contributions 3
12 Unemployment insurance
13 Other net receipts 1 4
517,112
599,272
617,766
322,478
286,338
306,331
33,755
66,517
43,948
244,069
223,763
39
63,746
43,479
285,917
256,332
41
76,844
47,299
297,744
267,513
39
84,691
54,498
150,565
133,575
34
66,174
49,217
145,676
131,567
5
20,040
5,938
144,550
135,531
30
63,014
54,024
6,384
22,205
6
1,131
16,958
32,773
23,641
3
11,131
2,003
21,938
21,437
3
2,160
1,662
72,380
7,780
73,733
12,596
65,991
16,784
37,836
8,028
25,661
11,467
33,522
13,809
1,903
2,205
11,680
1,724
2,562
1,706
157,803
182,720
201,498
108,079
94,278
110,521
22,330
17,903
15,317
133,025
156,932
172,744
88,795
85,063
90,912
15,680
16,366
14,108
5,723
15,336
3,719
6,041
15,763
3,984
7,941
16,600
4,212
7,357
9,809
2,119
177
6,857
2,181
6,427
11,146
2,196
418
5,875
357
901
285
351
-632
1,454
387
24,329
7,174
6,389
12,748
40,839
8,083
6,787
13,790
36,311
8,854
7,991
16,161
17,525
4,310
4,208
7,984
16,556
4,299
3,445
7,891
16,904
4,010
2,883
7,751
2,991
670
493
1,190
3,100<857
530
1,400
3,369
772
559
1,137
18 All types1
576,675
657,204
728,424
348,683
390,847
396,477
63,040
63,116
65,360
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology . . .
Energy
Natural resources and environment
Agriculture
135,856
10,733
5,722
6,313
13,812
4,762
159,765
11,130
6,359
10,277
13,525
5,572
187,418
9,982
7,070
4,674
12,934
14,875
93,154
5,183
3,370
2,946
5,636
7,087
100,419
4,406
3,903
2,059
6,940
13,260
105,072
4,705
3,486
2,073
5,892
10,154
17,309
438
589
375
905
558
18,337
817
667
372
1,033
483
17,394
1,038
687
243
955
685
Commerce and housing credit
Transportation
Community and regional development . . . .
Education, training, employment, social
services
29 Health 1
30 Income security
7,788
21,120
10,068
3,946
23,381
9,394
3,865
20,560
7,165
1,408
9,915
3,055
2,244
10,686
4,186
2,164
9,918
3,124
136
1,531
469
545
1,755
757
665
1,875
514
30,767
55,220
193,100
31,402
65,982
225,101
26,300
74,017
248,343
12,607
37,219
112,782
12,187
39,073
133,779
12,801
41,206
143,001
2,113
6,966
22,304
2,171
7,020
25,381
1,943
6,672
22,536
21,183
4,570
4,505
8,584
52,458
-9,887
22,988
23,955
4,671
4,726
6,393
84,697
-13,270
10,865
2,334
2,400
3,325
41,883
-6,490
13,241
2,373
2,322
3,152
44,948
-8,333
11,334
2,522
2,434
3,124
50,383
-16,912
882
378
1,002
287
8,215
-1,414
1,903
379
160
277
12,939
-11,881
2,024
453
-93
1,178
7,606
-1,017
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 5
OUTLAYS
25
26
27
28
31
32
33
34
35
36
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest®
Undistributed offsetting receipts 7
4,696
4,614
6,856
68,726
-16,509
1. Effective Feb. 8, 1982, supplemental medical insurance premiums and
voluntary hospital insurance premiums, previously included in other insurance
receipts, have been reclassified as offsetting receipts in the health function.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Old-age, disability, and hospital insurance.
4. Federal employee retirement contributions and civil service retirement and
disability fund.
5. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
6. Net interest function includes interest received by trust funds.
7. Consists of rents and royalties on the outer continental shelf and U.S.
government contributions for employee retirement.
SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S.
Government" and the Budget of the U.S. Government, Fiscal Year 1984.
Federal Finance
1.40
A33
F E D E R A L D E B T S U B J E C T TO S T A T U T O R Y LIMITATION
Billions of dollars
1981
1983
1982
Item
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
1 Federal debt outstanding
977.4
1,003.9
1,034.7
1,066.4
1,084.7
1,147.0
1,201.9
1,249.3
1,324.3
2 Public debt securities
Held by public
3
4
Held by agencies
971.2
771.3
199.9
997.9
789.8
208.1
1,028.7
825.5
203.2
1,061.3
858.9
202.4
1,079.6
867.9
211.7
1,142.0
925.6
216.4
1,197.1
987.7
209.4
1,244.5
1,043.3
201.2
1,319.6
1,090.3
229.3
6.2
4.7
1.5
6.1
4.6
1.5
6.0
4.6
1.4
5.1
3.9
1.2
4.8
3.7
1.1
4.7
3.6
1.1
5 Agency securities
6
Held by public
Held by agencies
7
5.0
3.9
1.2R
5.0
3.7
1.2R
4.8
3.7
1.2R
972.2
998.8
1,029.7
1,062.2
1,080.5
1,142.9
1,197.9
1,245.3
1,320.4
9 Public debt securities
10 Other debt 1
970.6
1.6
997.2
1.6
1,028.1
1.6
1,060.7
1.5
1,079.0
1.5
1,141.4
1.5
1,196.5
1.4
1,243.9
1.4
1,319.0
1.4
11 MEMO: Statutory debt limit
985.0
999.8
1,079.8
1,079.8
1,143.1
1,143.1
1,290.2
1,290.2
1,389.0
8 Debt subject to statutory limit
1. Includes guaranteed debt of government agencies, specified participation
certificates, notes to international lending organizations, and District of Columbia
stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
NOTE. Data from Treasury Bulletin (U.S. Treasury Department),
T y p e s and Ownership
Billions of dollars, end of period
1983
Type and holder
1979
1980
1982
1981
Apr.
1
2
3
4
5
6
7
8
9
10
11
1?
13
14
Total gross public debt
By type
Interest-bearing debt
Marketable
Bills
Notes
Bonds
Nonmarketable 1
State and local government series
Foreign issues 3
Government
Public
Savings bonds and notes
Government account series 4
Non-interest-bearing debt
1,197.1
1,247.9
1,291.4
1,319.6
1,326.9
1,348.4
844.0
530.7
172.6
283.4
74.7
313.2
2.2
24.6
28.8
23.6
5.3
79.9
177.5
928.9
623.2
216.1
321.6
85.4
305.7
1,027.3
720.3
245.0
375.3
99.9
307.0
1,195.5
881.5
311.8
465.0
104.6
314.0
1,242.1
935.5
325.9
494.9
114.6
306.6
1,289.9
957.3
325.2
513.6
118.5
332.6
1,318.1
978.9
334.3
527.1
117.5
339.2
1,320.7'
985.7
337.6
527.2
120.9
335.0
1,346.9
1,010.4
340.4
544.2
125.8
336.5
23.8
24.0
17.6
6.4
72.5
185.1
23.0
19.0
14.9
4.1
68.1
196.7
25.7
14.7
13.0
1.7
68.0
205.4
29.6
12.0
10.7
1.3
68.8
197.6
29.6
11.1
10.5
.6
69.2
222.4
33.1
11.4
10.8
.6
69.4
225.0
33.2
11.2
11.2
.0
69.7
220.6
33.9
11.1
11.1
.0
70.0
221.4
5.9
1.5
1.5
6.2
1.5
1.4
1.6
19
20
21
22
23
187.1
117.5
540.5
96.4
4.7
16.7
22.9
69.9
192.5
121.3
616.4
116.0
5.4
20.1
25.7
78.8
203.3
131.0
694.5
109.4
5.2
19.1
37.8
85.6
209.4
139.3
848.4
131.4
24
25
26
27
Individuals
Savings bonds
Other securities
Foreign and international 6
Other miscellaneous investors 7
79.9
36.2
124.4
90.1
72.5
56.7
127.7
106.9
68.0
75.6
141.4
152.3
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 1 Vi 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.
1,028.7
1.3
18
July
930.2
1.2
16
17
June
845.1
By holder5
U.S. government agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Mutual savings banks
Insurance companies
Other companies
State and local governments
15
May
n.a.
38.7
n.a.
113.4
68.3
48.2
149.4
233.2
n.a.
n a.
229.3
141.7
950.5
171.6
A
I
n.a.
n.a.
n.a.
T
69.7
50.7
159.9
n.a.
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.
A34
1.42
DomesticNonfinancialStatistics • September 1983
U.S. GOVERNMENT SECURITIES DEALERS
Transactions
Par value; averages of daily figures, in millions of dollars
1983
Item
1980
1981
1983, week ending Wednesday
1982
May'
June'
July
July 13' July 20'
July 27
Aug. 3
Aug. 10
Aug. 17
1
Immediate delivery1
U.S. government securities
18,331
24,728
32,271
41,050
42,649
38,158
38,473
41,330
35,461'
45,184
43,191
48,105
?
3
4
5
6
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
11,413
421
3,330
1,464
1,704
14,768
621
4,360
2,451
2,528
18,398
810
6,272
3,557
3,234
21,095
571
9,073
4,519
5,791
22,732
637
8,222
6,156
4,903
21,998
575
7,141
4,177
4,266
23,311
607
6,455
4,280
3,820
23,787
611
7,386
4,909
4,637
18,537'
595
8,230'
3,951
4,147
24,474
631
10,985
3,683
5,411
21,854
505
7,745
5,009
8,078
25,097
712
10,127
5,451
6,818
7
8
9
10
11
12
13
14
15
16
17
18
By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 2
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures transactions3
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions 4
U.S. government securities
Federal agency securities
1,484
1,640
1,769
2,240
2,375
2,135
2,077
2,160
2,111
2,230
2,120
2,401
7,610
9,237
3,258
2,472
11,750
11,337
3,306
4,477
1,807
6,128
15,659
15,344
4,142
5,001
2,502
7,595
20,711
18,099
5,544
3,755
2,411
8,018
22,178
18.097
4,827
4,177
2,467
8,486
19,049
16,974
4,990
4,504
2,618
8,275
20,314
16,082
4,722
3,991
2,683
8,866
20,675
18,495
6,271
4,979
2,648
8,224
17,165
16,185'
5,071'
4,631'
2,365'
7,157
23,670
19,284
4,315
3,944
2,524
7,202
22,372
18,700
4,192
3,280
2,408
7,006
25,401
20,303
6,926
5,025
2,731
6,188
3,523
1,330
234
5,031
1,490
259
6,430
2,314
308
7,737
2,647
369
6,672
2,498
447
6,615
2,190
487
7,066
2,602
415
6,435'
2,828'
615
9,331
3,410
181
6,466
2,986
308
7,592
3,464
359
365
1,370
835
982
1,529
1,562
1,396
1,598
1,481
1,588
632
1,690
1,919
2,273
1,607'
1,129'
3,460
1,873
1,918
2,346
799
2,734
n.a.
from the date of the transaction for government securities (Treasury bills, notes,
and bonds) or after 30 days for mortgage-backed agency issues.
NOTE. Averages for transactions are based on number of trading days in the
period.
Transactions are market purchases and sales of U.S. government securities
dealers reporting to the Federal Reserve Bank of New York. The figures exclude
allotments of, and exchanges for, new U.S. government securities, redemptions
of called or matured securities, purchases or sales of securities under repurchase
agreement, reverse repurchase (resale), or similar contracts.
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
1.43
U.S. G O V E R N M E N T SECURITIES DEALERS
Positions and Financing
Averages of daily figures, in millions of dollars
1983
Item
1980
1981
May'
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Net immediate1
U.S. government securities
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
Federal agency securities..
Certificates of deposit
Bankers acceptances
Commercial paper
Futures positions
Treasury bills
Treasury coupons
Federal agency securities..
Forward positions
U.S. government securities
Federal agency securities..
4,306
4,103
-1,062
434
166
665
797
3,115
n a.
1983, week ending Wednesday
1982
June'
July
July 6
July 13
July 20
Reverse repurchase agreements 3
Overnight and continuing
Term agreements
Repurchase agreements4
18 Overnight and continuing
19 Term agreements
For notes see opposite page.
Aug. 3
9,033
6,485
-1,526
1,488
292
2,294
2,277
3,435
1,746
2,658
9,328
4,837
-199
2,932
-341
2,001
3,712
5,531
2,832
3,317
6,298
4,449
31
571
-127
1,374
5,694
4,835
3,050
3,029
3,884
3,667
63
-186
550
-210
5,631
4,488
2,405
2,894
558
421
126
317
366
-673
6,919
4,729
2,764
2,782
850'
500
133
-172'
1,066
-676
5.583
4,804
3,201
2,469'
465
1,564
167
-1,031
683
-918
6,520
4,795
2,962
2,756
549
1,054
108
-347
262
-528
7,434
4,918
2,738
2,832
1,315
-455
95
2,238
-146
-418
7,440
4,588
2,453
2,962
1,108
189
125
1,785
18
-1,009
7,462
4,425
2,817
2,899
-8,934
-2,733
522
-2,508
-2,361
-224
-6,088
-1,478
57
-1,023
-2
205
-1,560
-1,062
413
-1,973'
107
351
-1,346
-150
374
-983
-1,341
584
-2,359
-2,110
459
1,960
-1,999
96
-603
-451
-788
-1,190
-2,057
-1,722
-635
-1,802
-1,631
-2,197
-124
-1,176'
-503
-1,908
-1,914
-2,657
-3,925
-2,603
-2,438 ' -2,726
Financing2
16
17
July 27
14,568
32,048
26,754
48,247
23,679
49,308
29,613
49,145
32,759
44,700
37,285
47,280
36,943
49,717
35,919
29,449
49,695
43,410
52,378
42,350
56,459
39,423
59,400
34,617
58,868
36,086
59,574
37,768
Federal Finance
1.44
F E D E R A L A N D F E D E R A L L Y S P O N S O R E D CREDIT A G E N C I E S
A35
Debt Outstanding
Millions of dollars, end of period
1983
Agency
1980
1982
1981
Feb.
1 Federal and federally sponsored agencies
2 Federal agencies
3 Defense Department 1
4 Export-Import Bank2 3
5 Federal Housing Administration4
6 Government National Mortgage
Association
participation certificates5
7 Postal Service6
8 Tennessee Valley Authority
United States Railway Association6
9
10 Federally sponsored agencies7
11 Federal Home Loan Banks
12 Federal Home Loan Mortgage Corporation
13 Federal National Mortgage Association
14 Farm Credit Banks
15 Student Loan Marketing Association
Mar.
Apr.
May
June
July
188,665
221,946
237,085
235,607
234,412
234,852
234,289
235,041
236,037
28,606
610
11,250
477
31,806
484
13,339
413
33,055
354
14,218
288
33,045
336
14,255
281
33,083
335
14,304
271
33,120
318
14,304
255
33,065
308
14,303
243
33,353
298
14,563
228
33,436
284
14,563
220
2,817
1,770
11,190
492
2,715
1,538
13,115
202
2,165
1,471
14,365
194
2,165
1,471
14,415
122
2,165
1,471
14,415
122
2,165
1,471
14,485
122
2,165
1,404
14,520
122
2,165
1,404
14,570
125
2,165
1,404
14,675
125
160,059
37,268
4,686
55,182
62,923
190,140
54,131
5,480
58,749
71,359
421
204,030
55,967
4,524
70,052
71,896
1,591
202,562
53,071
4,026
72,221
71,987
1,257
201,329
51,899
4,475
71,366
72,047
1,542
201,732
50,297
5,160
72,058
72,227
1,990
201,224
49,756
5,777
70,769
72,548
2,374
201,688
48,871
6,500
71,303
72,652
2,362
202,601
49,065
6,146
71,612
73,306
2,472
87,460
110,698
126,424
126,623
127,717
129,125
130,528
131,987
133,367
10,654
1,520
9,465
492
12,741
1,288
11,390
202
14,177
1,221
12,640
194
14,177
1,221
12,690
122
14,232
1,221
12,675
122
14,232
1,221
12,760
122
14,232
1,154
12,795
122
14,493
1,154
12,845
125
14,493
1,154
12,950
125
39,431
9,196
13,982
48,821
13,516
18,140
53,261
17,157
27,774
52,431
17,502
28,480
52,686
17,817'
28,964'
53,541
17,970
29,279
54,586
18,076
29,563
54,946
18,378
30,046
55,776
18,497
30,372
(8)
MEMO:
16 Federal Financing Bank debt
17
18
19
20
Lending to federal and federally sponsored
agencies
Export-Import Bank3
Postal Service6
Tennessee Valley Authority
United States Railway Association 6
Other Lending10
21 Farmers Home Administration
22 Rural Electrification Administration
23 Other
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing
and Urban Development; Small Business Administration; and the Veterans
Administration.
6. Off-budget.
NOTES TO TABLE 1.43
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.
7. Includes outstanding noncontingent liabilities: Notes, bonds, and debentures.
8. Before late 1981, the Association obtained financing through the Federal
Financing Bank.
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, that is, 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
1.45
DomesticNonfinancialStatistics • September 1983
N E W S E C U R I T Y I S S U E S of State and Local Governments
Millions of dollars
1982
Type of issue or issuer,
or use
1980
1981
Nov.
1 All issues, new and refunding 1
1983
1982
Dec.
Jan/
Mar/
Feb/
Apr/
May'
June
48,367
47,732
78,950
10,287
9,761
3,770
6,150
8,733
10,926
9,363
6,963
14,100
38
34,267
57
12,394
34
35,338
55
21,088
225
57,862
461
3,392
34
6,895
57
1,623
37
8,138
62
869
0
2,901
0
1,256
3
4,894
2
2,261
3
6,472
5
3,457
2
7,469
9
3,527
6
5,836
14
1,478
7
5,485
16
Type of issuer
6 State
7 Special district and statutory authority
8 Municipalities, counties, townships, school districts
5,304
26,972
16,090
5,288
27,499
14,945
8,406
45,000
25,544
1,091
5,489
3,243
220
6,171
3,370
237
2,1%
1,337
252
4,235
1,663
724
5,416
2,593
1,745
5,768
3,413
830
4,406
4,127
249
4,025
2,689
9 Issues for new capital, total
46,736
46,530
74,612
9,496
9,531
3,268
5,059
7,514
8,982
6,865
5,554
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
4,572
2,621
8,149
19,958
3,974
7,462
4,547
3,447
10,037
12,729
7,651
8,119
6,444
6,256
14,254
26,605
8,256
12,797
765
1,291
1,969
2,336
877
2,258
895
1,342
1,891
3,121
1,308
974
355
50
977
904
319
663
1,089
541
1,050
1,497
183
699
828
815
1,732
2,773
393
973
671
560
2,590
3,120
447
1,594
817
416
1,504
2,052
638
1,438
798
222
924
2,000
473
1,137
2
3
4
5
10
11
12
13
14
15
Type of issue
General obligation
U.S. government loans 2
Revenue
U.S. government loans 2
1. Par amounts of long-term issues based on date of sale.
2. Consists of tax-exempt issues guaranteed by the Farmers Home Administration.
1.46
SOURCE. Public Securities Association.
N E W S E C U R I T Y I S S U E S of Corporations
Millions of dollars
Type of issue or issuer,
or use
1982
1980
198K
1983
1982r
Nov/
Dec.
Jan/
Feb/
Mar/
Apr/
May
June
1 All issues1'2
73,694
70,441
84,198
8,887
9,830
7,709
8,491
11,728
10,468
11,489
8,165
2 Bonds
53,206
45,092
53,636
5,497
5,636
4,569
3,839
5,317
6,015
7,017
2,244
Type of offering
3 Public
4 Private placement
41,587
11,619
38,103
6,989
43,838
9,798
5,012
485
4,264
1,372
4,569
n.a.
3,839
n.a.
5,317
n.a.
6,015
n.a.
7,017
n.a.
2,244
n.a.
15,409
6,693
3,329
9,557
6,683
11,534
12,325
5,229
2,052
8,963
4,280
12,243
13,123
5,681
1,474
12,155
2,265
18,938
1,954
523
88
1,246
115
1,571
1,204
565
120
944
372
2,431
849
562
32
313
0
2,813
655
335
250
763
0
1,836
%2
511
0
950
650
2,244
1,449
1,109
175
755
725
1,802
2,158
1,055
150
1,115
505
2,034
706
425
115
363
250
385
3
11 Stocks
20,489
25,349
30,562
3,390
4,194
3,140
4,652
6,411
4,453
4,472
5,921
Type
12 Preferred
13 Common
3,631
16,858
1,797
23,552
5,113
25,449
573
2,817
421
3,773
594
2,546
1,962
2,690
893
5,518
440
4,013
492
3,980
665
5,256
4,839
5,245
549
6,230
567
3,059
5,074
7,557
779
5,577
1,778
4,584
5,649
7,770
709
7,517
2,227
6,690
481
1,024
225
752
14
894
921
693
22
742
1,361
455
888
994
355
350
187
366
1,038
646
283
534
2
2,149
1,654
1,225
91
674
1,133
1,634
1,424
1,494
113
639
37
746
1,545
922
221
264
8
1,512
2,449
1,358
109
550
138
1,317
5
6
7
8
9
10
14
15
16
17
18
19
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
Industry group
Manufacturing
Commercial and miscellaneous
Transportation
Public utility
Communication
Real estate and financial
1. Figures, which represent gross proceeds of issues maturing in more than one
year, sold for cash in the United States, are principal amount or number of units
multiplied by offering price. Excludes offerings of less than $100,000, secondary
offerings, undefined or exempted issues as defined in the Securities Act of 1933,
employee stock plans, investment companies other than closed-end, intracorporate transactions, and sales to foreigners.
2. Data for 1983 include only public offerings.
3. Beginning in August 1981, gross stock offerings include new equity volume
from swaps of debt for equity.
SOURCE. Securities and Exchange Commission and the Board of Governors of
the Federal Reserve System.
Corporate Finance
1.47
OPEN-END INVESTMENT COMPANIES
A37
N e t Sales and A s s e t Position
Millions of dollars
1982
Item
1981
1983
1982
Jan.
Dec.
Feb.
May r
Apr.
Mar.
June'
July
INVESTMENT COMPANIES 1
1 Sales of own shares 2
2 Redemptions of own shares 3
3 Net sales
4
5
6
Assets 4
Cash position 5
Other
20,596
15,866
4,730
45,675
30,078
15,597
5,291
4,835
456
8,095
4,233
3,862
6,115
3,510
2,605
7,871
5,066
2,805
8,418
6,482
1,936
7,577
4,486
3,091
8,107
5,416
2,691
6,944
4,498
2,446
55,207
5,277
49,930
76,741
5,999
70,742
76,841
6,040
70,801
80,384
6,943
73,441
84,981
7,404
77,577
90,075
7,904
82,171
98,669
8,496
90,173
101,423
8,771
92,652
106,449
9,110
97,339
104,287
9,021
95,266
5. Also includes all U.S. government securities and other short-term debt
securities.
1. Excluding money market funds.
2. Includes reinvestment of investment income dividends. Excludes reinvestment of capital gains distributions and share issue of conversions from one fund to
another in the same group.
3. Excludes share redemption resulting from conversions from one fund to
another in the same group.
4. Market value at end of period, less current liabilities.
1.48
NOTE. Investment Company Institute data based on reports of members, which
comprise substantially all open-end investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
C O R P O R A T E PROFITS A N D T H E I R D I S T R I B U T I O N
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1981
Account
1980
1981
Q2
2
3
4
5
6
Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
7
8
Inventory valuation
Capital consumption adjustment
1
1983
Q3
Q4
Q1
Q2
Q3
Q4
QK
175.4
234.6
84.8
149.8
58.6
91.2
192.3
227.0
82.8
144.1
64.7
79.5
164.8
174.2
59.2
115.1
68.7
46.6
185.0
219.0
80.4
138.6
63.7
74.9
197.6
227.7
83.7
144.0
66.4
77.6
192.0
217.2
75.6
141.6
67.3
74.3
162.0
173.2
60.3
112.9
67.7
45.2
166.8
178.8
61.4
117.4
67.8
49.6
168.5
177.3
60.8
116.5
68.8
47.7
161.9
167.5
54.0
113.5
70.4
43.1
181.8
169.7
61.5
108.2
71.4
36.7
-42.9
-16.3
-23.6
-11.0
-8.4
-1.1
-22.6
-11.4
-19.4
-10.7
-15.7
-9.5
-5.5
-5.6
-8.5
-3.5
-9.0
0.1
-10.3
4.7
-1.7
13.9
SOURCE. Survey of Current Business (Department of Commerce).
1982
1982
A38
1.49
DomesticNonfinancialStatistics • September 1983
NONFINANCIAL CORPORATIONS
Current A s s e t s and Liabilities
Billions of dollars, e x c e p t f o r ratio
1982'
Account
1977
1978
1979'
1980"
1983
1981 R
QL
Q2
Q3
Q4
QL
1 Current assets
912.7
1,043.7
1,214.8
1,327.0
1,419.1
1,417.6
1,416.6
1,440.9
1,424.3
1,435.0
2
3
4
5
6
97.2
18.2
330.3
376.9
90.1
105.5
17.2'
388.0
431.8
101.1'
118.0
16.7
459.0
505.1
116.0
126.9
18.7
506.8
542.8
131.8
131.8
17.4
530.3
585.1
154.6
121.8
16.5
533.2
591.5
154.7
124.0
16.5
530.9
587.5
157.8
126.7
18.9
533.8
596.4
165.1
143.8
22.4
510.6
575.0
172.4
139.5
25.8
517.2
572.9
179.7
Cash
U.S. government securities
Notes and accounts receivable
Inventories
Other
7 Current liabilities
557.1
669.5
807.3
889.3
976.8
985.7
985.6
1,002.5
971.1
976.9
8 Notes and accounts payable
9 Other
317.6
239.6
383.0"
286.5'
460.8
346.5
513.6
375.7
559.1
417.7
550.7
435.0
550.1
435.5
555.1
447.5
542.7
428.4
530.0
446.8
10 Net working capital
355.5
374.3
407.5
437.8
442.3
431.9
431.0
438.4
453.2
458.1
11 MEMO: Current ratio1
1.638
1.559
1.505
1.492
1.453
1.438
1.437
1.437
1.467
1.469
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, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
NOTE. For a description of this series, see "Working Capital of Nonfinancial
Corporations" in the July 1978 BULLETIN, pp. 533-37.
SOURCE. Federal Trade Commission and Bureau of the Census.
1.50
T O T A L N O N F A R M B U S I N E S S E X P E N D I T U R E S on N e w Plant and E q u i p m e n t
Billions of dollars; quarterly d a t a are at seasonally a d j u s t e d annual rates.
1982
Industry 1
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5 Railroad
6
Air
7 Other
Public utilities
8
Electric
9 Gas and other
10 Trade and services
11 Communication and other 2
1981
1982
Q2
Q3
Q4
Ql
Q2
Q3'
Q41
321.49
316.43
306.57
323.22
315.79
302.77
293.03
293.46
313.04
326.73
61.84
64.95
56.44
63.23
51.49
62.49
59.03
64.74
57.14
62.32
50.50
59.59
50.74
59.12
48.48
60.31
53.00
64.44
53.73
66.07
16.86
15.45
12.71
16.56
14.63
13.31
12.03
10.91
13.29
14.60
4.24
3.81
4.00
4.38
3.93
3.64
3.75
3.75
3.63
4.73
3.54
4.06
3.94
4.11
3.24
4.31
4.85
3.25
3.35
4.09
3.60
3.64
4.10
3.14
3.70
3.10
3.70
4.31
3.69
4.08
29.74
8.65
86.33
41.06
33.40
8.55
86.95
40.46
34.46
7.72
87.68
38.90
32.26
9.14
88.85
40.33
34.98
8.40
87.31
39.73
35.12
7.77
84.00
40.06
33.97
7.64
82.38
36.11
34.86
6.62
85.85
35.54
34.34
7.76
89.31
40.40
34.67
8.86
93.18
43.54
1. Anticipated by business.
2. "Other" consists of construction; social services and membership organizations; and forestry, fisheries, and agricultural services.
1983
1983 1
SOURCE. Survey of Current Business (Department of Commerce).
Corporate Finance
1.51
DOMESTIC FINANCE COMPANIES
A39
A s s e t s and Liabilities
Billions of dollars, e n d of period
1982
Account
1977
1979
1978
1980
1983
1981
Q2
Q4
Q3
Q2
Ql
ASSETS
Accounts receivable, gross
1 Consumer
2 Business
3
Total
4 LESS: Reserves for unearned income and losses....
5 Accounts receivable, net
6 Cash and bank deposits
7 Securities
8 All other
9 Total assets
65.7
70.3
136.0
20.0
116.0
73.6
72.3
145.9
23.3
122.6
85.5
80.6
166.1
28.9
137.2
88.0
82.6
170.6
30.2
140.4
88.3
82.2
170.5
30.4
140.1
89.5
81.0
170.4
30.5
139.8
89.9
82.2
172.1
29.7
142.4
91.3
84.9
176.2
30.4
145.8
24.9 1
27.5
34.2
37.3
39.1
39.7
42.8
44.3
122.4
140.9
150.1
171.4
177.8
179.2
179.5
185.2
190.2
5.9
29.6
6.5
34.5
8.5
43.3
13.2
43.4
15.4
51.2
14.5
50.3
16.8
46.7
18.6
45.8
16.6
45.2
16.3
49.0
6.2
36.0
11.5
8.1
43.6
12.6
8.2
46.7
14.2
7.5
52.4
14.3
9.6
54.8
17.8
9.3
60.3
18.9
9.9
60.9
20.5
8.7
63.5
18.7
9.8
64.7
22.8
9.6
64.5
24.0
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
104.3
1
V
J
LIABILITIES
10 Bank loans
11 Commercial paper
Debt
Short-term, n.e.c
12
Long-term, n.e.c
13
14
Other
15
Capital, surplus, and undivided profits
16
Total liabilities and capital
15.1
17.2
19.9
19.4
22.8
24.5
24.5
24.2
26.0
26.7
104.3
122.4
140.9
150.1
171.4
177.8
179.2
179.5
185.2
190.2
1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined.
NOTE. Components may not add to totals due to rounding.
1.52
DOMESTIC FINANCE COMPANIES
B u s i n e s s Credit
Millions of dollars, seasonally a d j u s t e d e x c e p t as noted
Type
Changes in accounts
receivable
Extensions
Repayments
1983
1983
1983
Accounts
receivable
outstanding
June 30,
1983 1
Apr. •
May
June
Apr.
May
June
Apr.
May
June
1 Total
84,894
887
428
789
22,927
25,322
25,341
22,040
24,894
24,552
2
3
4
5
16,252
12,758
27,713
830
226
-116
580
239
-167
599
52
-98
1,810
6,494
1,180
1,615
6,971
1,344
1,675
7,468
1,331
980
6,268
1,296
1,035
6,732
1,511
1,076
7,416
1,429
9,247
18,924
73
-126
-137
-87
-8
-244
11,897
1,546
13,457
1,935
13,071
1,796
11,824
1,672
13,594
2,022
13,079
1,552
Retail automotive (commercial vehicles)
Wholesale automotive
Retail paper on business, industrial, and farm equipment
Loans on commercial accounts receivable and factored commercial accounts receivable
6 All other business credit
1. Not seasonally adjusted.
A40
1.53
DomesticNonfinancialStatistics • September 1983
MORTGAGE MARKETS
Millions of dollars; e x c e p t i o n s n o t e d .
1983
Item
1980
1981
1982
Jan.
Feb.
Mar.
Apr.
May
June
July
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
2
3
4
5
6
Conventional mortgages on new homes
Terms1
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan/price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount)2
Contract rate (percent per annum)
Yield (percent per annum)
1 FHLBB series3
8 HUD series4
83.4
59.2
73.2
28.2
2.09
12.25
90.4
65.3
74.8
27.7
2.67
14.16
94.6
69.8
76.6
27.6
2.95
14.47
88.9
65.4
75.2
26.5
2.46
13.00
88.4
66.6
77.9
27.2
2.78
12.62
80.1
60.5
76.8
24.2
2.21
12.97
89.6
66.5
74.2
26.9
2.09
12.02
92.1
67.8
77.5
26.8
2.44
12.21
93.0
69.2
76.9
27.3
2.43
11.90
97.3
72.3
76.5
28.1
2.54
12.02
12.65
13.95
14.74
16.52
15.12
15.79
13.49
13.44
13.16
13.18
13.41
13.17
12.42
13.02
12.67
13.09
12.36
13.37
12.50
14.00
13.44
12.55
16.31
15.29
15.31
14.68
12.87
12.06
12.65
11.94
12.68
11.87
12.50
11.76
12.41
11.72
12.96
12.09
14.23
12.54
SECONDARY MARKETS
Yield (percent per annum)
9 FHA mortgages (HUD series)5
10 GNMA securities6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/V A-insured
13 Conventional
55,104
37,365
17,725
58,675
39,341
19,334
66,031
39,718
26,312
73,106
38,924
34,182
73,555
38,768
34,788
73,666
38,409
35,257
73,554
37,901
35,653
74,116
37,669
36,446
74,669
37,376
37,293
74,630
37,092
37,583
Mortgage transactions (during period)
14 Purchases
15 Sales
8,099
0
6,112
2
15,116
2
2,045
0
1,594
1
1,433
777
1,004
586
1,579
204
1,333
83
1,358
786
Mortgage commitments1
16 Contracted (during period)
17 Outstanding (end of period)
8,083
3,278
9,331
3,717
22,105
7,606
2,006
7,487
785
6,475
1,184
6,187
1,023
5,811
1,534
5,726
2,506
5,887
1,198
5,099
Mortgage holdings (end of period)*
18 Total
19 FHA/VA
20 Conventional
4,362
2,116
2,246
5,245
2,236
3,010
5,153
1,921
3,224
4,560
1,004
3,556
4,450
1,000
3,450
4,795
995
3,800
4,997
990
4,008
6,026
984
5,042
Mortgage transactions (during period)
21 Purchases
22 Sales
3,723
2,527
3,789
3,531
23,671
24,164
1,479
1,641
1,688
1,756
2,849
2,469
1,807
1,525
2,439
1,408
n.a.
n.a.
3,859
447
6,974
3,518
28,187
7,549
2,059
8,098
868
7,238
1,438
5,845
3,079
7,253
2,334
6,889
FEDERAL H O M E LOAN MORTGAGE CORPORATION
9
Mortgage commitments
23 Contracted (during period)
24 Outstanding (end of period)
1. Weighted averages based on sample surveys of mortgages originated by
major institutional lender groups. Compiled by the Federal Home Loan Bank
Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the
borrower or the seller) to obtain a loan.
3. Average effective interest rates on loans closed, assuming prepayment at the
end of 10 years.
4. Average contract rates on new commitments for conventional first mortgages, 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. Includes some multifamily and nonprofit hospital loan commitments in
addition to 1- to 4-family loan commitments accepted in FNMA's free market
auction system, and through the FNMA-GNMA tandem plans.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's
mortgage commitments and mortgage transactions include activity under mortgage/securities swap programs, while the corresponding data for FNMA exclude
swap activity.
Real Estate Debt
1.54
A41
MORTGAGE DEBT OUTSTANDING
Millions of dollars, end of period
1983
1982
Type of holder, and type of property
1980
1982
1981
Q2
Q4
Q3
QL
Q2
1
1,471,786
1,583,264
1,654,667"
1,624,279
1,632,161
1,654,667"
1,682,634
1,723,874"
5
986,979
137,134
255,655
92,018
1,065,294
136,354
279,889
101,727
1,112,343"
136,725"
298,708"
106,891"
1,089,522
138,332
290,951
105,474
1,097,507
136,508
291,740
106,406
1,1 12,343"
136,725"
298,708"
106,891"
1,134,538"
137,938"
303,130"
107,028"
1,164,433"
140,477"
310,572"
108,392"
997,168
263,030
160,326
12,924
81,081
8,699
1,040,827
284,536
170,013
15,132
91,026
8,365
1,023,339"
301,742
177,122
15,841
100,269
8,510
1,042,904
294,022
172,596
15,431
97,522
8,473
1,027,027
298,342
175,126
15,666
99,050
8,500
1,023,339"
301,742
177,122
15,841
100,269
8,510
1,030,068"
305,672
179,430
16,147
101,575
8,520
1,048,339
312,663
183,533
16,634
103,898
8,598
99,865
67,489
16,058
16,278
40
99,997
68,187
15,960
15,810
40
97,444"
66,533"
15,247"
15,635"
29"
96,346
65,381
15,338
15,598
29
94,382
63,849
15,026
15,479
28
97,444"
66,533"
15,247"
15,635"
29"
105,379"
72,912"
15,862"
16,577"
28
119,830
84,483
17,011
18,308
28
Savings and loan associations
1- to 4-family
Multifamily
Commercial
503,192
419,763
38,142
45,287
518,547
433,142
37,699
47,706
482,234"
396,361"
36,023
49,850"
512,997
425,890
38,321
48,786
493,899
410,035
36,894
46,970
482,234"
396,361"
36,023
49,850"
475,688"
389,967"
35,534"
50,187"
471,638
384,630
35,231
51,777
Life insurance companies
1- to 4-family :
Multifamily
Commercial
Farm
131,081
17,943
19,514
80,666
12,958
137,747
17,201
19,283
88,163
13,100
141,919
16,743
18,847
93,501
12,828
139,539
16,451
18,982
91,113
12,993
140,404
16,865
18,967
91,640
12,932
141,919
16,743
18,847
93,501
12,828
143,329"
16,855"
19,076"
94,727"
12,671"
144,208
16,965
19,100
95,443
12,700
114,300
4,642
704
3,938
126,094
4,765
693
4,072
138,185
4,227
676
3,551
131,456
4,669
688
3,981
134,409
4,110
682
3,428
138,185
4,227
676
3,551
140,028"
3,753"
665
3,088"
142,136"
3,660
651
3,009
Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm
3,492
916
610
411
1,555
2,235
914
473
506
342
1,786
783
218
377
408
1,335
491
179
256
409
947
302
46
164
435
1,786
783
218
377
408
2,077
707
380
337
653
1,605"
381"
555"
248"
421"
37
Federal Housing and Veterans
Administration
1- to 4-family
Multifamily
5,640
2,051
3,589
5,999
2,289
3,710
5,228
1,980
3,248
5,908
2,218
3,690
5,362
2,130
3,232
5,228
1,980
3,248
5,138"
1,867"
3,271"
5,219
1,919
3,300
38
39
40
Federal National Mortgage Association
1- to 4-family
Multifamily
57,327
51,775
5,552
61,412
55,986
5,426
71,814
66,500
5,314
65,008
59,631
5,377
68,841
63,495
5,346
71,814
66,500
5,314
73,666
68,370
5,296
74,669
69,396
5,273
41
Federal Land Banks
1- to 4-family
Farm
38,131
2,099
36,032
46,446
2,788
43,658
50,350
3,068
47,282
49,270
2,954
46,316
49,983
3,029
46,954
50,350
3,068
47,282
50,544
3,059
47,485
50,858"
3,030"
47,828"
5,068
3,873
1,195
5,237
5,181
56
4,780
4,733
47
5,266
5,209
57
5,166
5,116
50
4,780
4,733
47
142,258
93,874
91,602
2,272
163,000
105,790
103,007
2,783
216,654
118,940
115,831
3,109
183,657
111,459
108,487
2,972
198,376
114,776
111,728
3,048
216,654
118,940
115,831
3,109
234,596
127,939
124,482
3,457
16,854
13,471
3,383
19,853
19,501
352
42,964
42,560
404
28,703
28,329
374
35,132
34,739
393
42,964
42,560
404
48,008
47,575
433
50,587
50,112
475
717
717
14,450
14,450
4,556
4,556
8,133
8,133
14,450
14,450
18,157
18,157
20,933
20,933
31,530
16,683
2,612
5,271
6,964
36,640
18,378
3,426
6,161
8,675
40,300
20,005
4,344
7,011
8,940
38,939
19,357
4,044
6,762
8,776
40,335
20,079
4,344
7,056
8,856
40,300
20,005
4,344
7,011
8,940
40,492
20,263
4,344
7,115
8,770
41,522"
20,728"
4,343"
7,303"
9,148"
218,060
138,284
27,345
26,661
25,770
253,343
167,297
27,982
30,517
27,547
266,262
177,284
29,586
30,914
28,478
272,349
182,199
30,068
31,381
28,701
276,489"
184,998"
30,532
32,065
28,894
277,942"
185,434"
30,995"
32,612"
28,901"
?
3 Multifamily
4
6 Major financial institutions
Commercial banks'
7
1- to 4-family
8
9
Multifamily
Commercial
10
Farm
11
1?
13
14
IS
16
17
18
19
20
71
??
73
74
25
Mutual savings banks
1- to 4-family
Multifamily
Commercial
Farm
76 Federal and related agencies
Government National Mortgage Association
77
78
1- to 4-family
Multifamily
29
30
31
32
33
34
35
36
47
43
46
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
47
48
49
50
Mortgage pools or trusts 2
Government National Mortgage Association
1- to 4-family
Multifamily
44
45
51
57
53
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
54
55
Federal National Mortgage Association3
1- to 4-family
56
57
58
59
60
Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm
61 Individual and others 4
6?
1- to 4-family5
63 Multifamily
64 Commercial
65 Farm
n.a.
n.a.
1. Includes loans held by nondeposit trust companies but not bank trust
departments.
2. Outstanding principal balances of mortgages backing securities insured or
guaranteed by the agency indicated.
3. Outstanding balances on FNMA's issues of securities backed by pools of
conventional mortgages held in trust. The program was implemented by FNMA in
October 1981.
4. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and U.S. agencies for which amounts are small or
for which separate data are not readily available.
5. Includes a new estimate of residential mortgage credit provided by individFRASER
uals.
Digitized for
276,489"
184,998"
30,532
32,065
28,894
4,850"
4,795"
55
6,125
6,025
100
252,318
139,276"
135,628"
3,648
281,081
186,019
31,798
33,595
29,669
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
1.55
DomesticNonfinancialStatistics • September 1983
C O N S U M E R I N S T A L L M E N T CREDIT 1 Total Outstanding, and N e t Change A
Millions of dollars
1982
iyoi
1983
1982
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Amounts outstanding (end of period)
1 Total
313,472
331,697
344,798
344,798
343,151
340,343
342,568
344,748
347,189
353,012
358,020
147,013
76,756
44,041
28,448
9,911
4,468
2,835
147,622
89,818
45,954
29,551
11,598
4,403
2,751
152,069
94,322
47,253
30,202
13,891
4,063
2,998
152,069
94,322
47,253
30,202
13,891
4,063
2,998
150,906
95,080
46,946
28,859
14,209
4.102
3,049
150,257
93,859
46.757
27,734
14,860
3,780
3,096
151,319
94,817
47,081
27,472
15,083
3,669
3,127
152,408
94,675
47,505
27,455
15,551
3,980
3,174
153,471
95,364
47,838
27,541
15,842
3,943
3,190
156,603
96,349
48,652
27,804
16,207
4,159
3,238
159,666
97,319
49,139
27,900
16,369
4,356
3,271
By major type of credit
9 Automobile
10 Commercial banks
11
Indirect paper
12
Direct loans
13 Credit unions
14 Finance companies
116,838
61,536
35,233
26,303
21,060
34,242
125,331
58,081
34,375
23,706
21,975
45,275
130,227
58,851
35,178
23,673
22,596
48,780
130,227
58,851
35,178
23,673
22,596
48,780
129,482
57,740
3
3
129,055
57,971
3
3
130,959
58,567
3
3
131,976
59,291
3
3
133,640
60,384
3
3
136,183
61,870
3
3
138,689
63,425
3
3
22,458
49,284
22,360
48,724
22,518
49,874
22,721
49,964
22,880
50,376
23,269
51,044
23,502
51,762
15 Revolving
16 Commercial banks
17 Retailers
18 Gasoline companies
58,352
29,765
24,119
4,468
62,819
32,880
25,536
4,403
67,184
36,688
26,433
4,063
67,184
36,688
26,433
4,063
65,562
36,282
25,178
4,102
63,372
35,481
24,111
3,780
63,091
35,533
23,889
3,669
63,521
35,651
23,890
3,980
63,459
35,536
23,980
3,943
64,899
36,515
24,225
4,159
65,856
37,173
24,327
4,356
19 Mobile home
20 Commercial banks
21 Finance companies
22 Savings and loans
23 Credit unions
17,322
10,371
3,745
2,737
469
18,373
10,187
4,494
3,203
489
18,988
9,684
4,965
3,836
503
18,988
9,684
4,965
3,836
503
19,291
9,828
4,981
3,984
498
19,374
9,806
4,960
4,112
496
19,379
9,739
4,967
4,174
499
19,400
9,624
4,970
4,303
503
19,448
9,581
4,976
4,384
507
19,647
9,651
4,995
4,485
516
19,750
9,717
4,982
4,530
521
120,960
45,341
38,769
22,512
4,329
7,174
2,835
125,174
46,474
40,049
23,490
4,015
8,395
2,751
128,399
46,846
40,577
24,154
3,769
10,055
2,998
128,399
46,846
40,577
24,154
3,769
10,055
2,998
128,816
47,056
40,815
23,990
3,681
10,225
3,049
128,542
46,999
40,175
23,901
3,623
10,748
3,096
129,139
47,480
39,976
24,064
3.583
10,909
3,127
129,851
47,842
39,741
24,281
3,565
11,248
3,174
130,642
47,970
40,012
24,451
3,561
11,458
3,190
132,283
48,567
40,310
24,867
3,579
11,722
3,238
133,725
49,351
40,575
25,116
3,573
11,839
3,271
2
3
4
5
6
7
8
By major holder
Commercial banks
Finance companies
Credit unions
Retailers2
Savings and loans
Gasoline companies
Mutual savings banks
24 Other
25 Commercial banks
26 Finance companies
27 Credit unions
28 Retailers
29 Savings and loans
30 Mutual savings banks
()
()
()
()
()
()
()
()
()
()
()
()
()
()
Net change (during period)4
1,448
18,217
13,096
2,418
2,725
735
2,582
2,271
2,696
4,406
4,840
-7,163
8,438
-2,475
329
1,485
739
95
607
13,062
1,913
1,103
1,682
-65
-85
4,442
4,504
1,298
651
2,290
-340
251
1,111
1,024
197
-91
201
-51
27
410
1,881
20
-14
412
-78
94
788
-658
43
36
677
-200
49
1,354
487
143
422
187
-35
24
1,186
-520
708
147
394
299
57
1,540
362
288
169
374
-51
14
2,422
470
573
368
456
77
40
2,766
909
662
272
188
5
38
477
-5,830
-3,104
-2,726
-1,184
7,491
8,495
-3,455
-858
-2,597
914
11,033
4,898
770
803
-33
622
3,505
1,491
527
429
98
89
875
625
-581
3
3
-233
321
3
3
1,221
240
3
3
689
612
3
3
1,313
1,066
3
3
1,973
1,284
3
3
2,421
1,482
3
3
20
1,186
15
-569
68
913
341
-264
137
no
275
414
328
611
45 Revolving
46 Commercial banks
47 Retailers
48 Gasoline companies
1,415
-97
773
739
4,467
3,115
1,417
-65
4,365
3,808
897
-340
501
650
-98
-51
68
130
16
-78
-135
61
4
-200
1,177
786
426
-35
917
468
150
299
514
373
192
-51
1,210
806
327
77
821
556
260
5
49 Mobile home
50 Commercial banks
51 Finance companies
52 Savings and loans
53 Credit unions
483
-276
355
430
-25
1,049
-186
749
466
20
609
-508
471
633
14
-37
-74
-15
49
3
420
193
53
175
-1
204
26
59
120
-1
-61
-95
-23
54
3
22
-99
8
107
6
17
-86
1
98
4
151
28
-6
123
6
141
68
7
59
7
-927
-960
592
-1,266
-444
1,056
95
4,206
1,133
1,280
975
-314
1,217
-85
3,224
372
528
662
-246
1,657
251
463
8
164
105
7
152
27
1,612
668
642
1
-30
237
94
899
380
-148
29
32
557
49
245
423
-403
72
-4
133
24
643
205
-264
361
-3
287
57
852
187
251
147
-23
276
14
1,072
304
62
292
41
333
40
1,457
660
291
327
12
129
38
31 Total
32
33
34
35
36
37
38
By major holder
Commercial banks
Finance companies
Credit unions
Retailers2
Savings and loans
Gasoline companies
Mutual savings banks
By major type of credit
39 Automobile
40 Commercial banks
41
Indirect paper
42
Direct loans
43 Credit unions
44 Finance companies
54 Other
55 Commercial banks
56 Finance companies
57 Credit unions
58 Retailers
59 Savings and loans
60 Mutual savings banks
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. Not reported after December 1982.
4. For 1982 and earlier, net change equals extensions, seasonally adjusted less
()
()
()
()
()
()
()
()
()
()
()
()
()
()
liquidations, seasonally adjusted. Beginning 1983, net change equals outstandings,
seasonally adjusted less outstandings of the previous period, seasonally adjusted.
NOTE: Total consumer noninstallment credit outstanding—credit scheduled to
be repaid in a lump sum, including single-payment loans, charge accounts, and
service credit—amounted to, not seasonally adjusted, $74.8 billion at the end of
1980, $80.6 billion at the end of 1981, and $85.9 billion at the end of 1982.
• These data have been revised from December 1980 through February 1983.
Consumer Debt
1.56
TERMS OF CONSUMER INSTALLMENT
CREDIT
Percent unless n o t e d o t h e r w i s e
1983
Feb.
Apr.
May
INTEREST RATES
1
2
3
4
5
6
Commercial banks'
48-month new car2
24-month personal
120-month mobile home 2
Credit card
Auto finance companies
New car
Used car
14.30
15.47
14.99
17.31
16.54
18.09
17.45
17.78
16.83
18.65
18.05
18.51
14.81
17.47
16.73
13.90
16.57
15.84
18.79
14.82
19.10
16.17
20.00
16.15
20.75
12.05
19.91
12.07
19.38
11.90
18.91
11.94
18.76
11.57
18.58
45.0
34.8
45.4
35.8
46.0
34.0
45.9
37.7
45.9
37.7
45.8
37.7
45.4
37.9
45.6
38.0
87.6
94.2
86.1
91.8
85.3
90.3
86.0
84.0
91.0
86.0
90.0
91.0
86.0
92.0
6,322
3,810
7,339
4,343
8,178
4,746
8,755
4,731
8,829
4,802
8,662
4,869
8,572
4,984
18.82
OTHER TERMS 3
7
8
9
10
11
12
Maturity (months)
New car
Used car
Loan-to-value ratio
New car
Used car
Amount financed (dollars)
New car
Used car
1. Data for midmonth of quarter only.
2. Before 1983 the maturity for new car loans was 36 months, and for mobile
home loans was 84 months.
3. At auto finance companies.
8,512
5,039
A43
A44
1.57
DomesticNonfinancialStatistics • September 1983
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 d a t a are at seasonally a d j u s t e d annual rates.
1980
ly/l
1981
1982
1983
1982
H2
HI
H2
HI
H2
HI
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors . . . .
By sector and instrument
2 U.S. government
3 Treasury securities
4 Agency issues and mortgages
5 Private domestic nonfinancial sectors
6 Debt capital instruments
7
Tax-exempt obligations
8
Corporate bonds
9
Mortgages
10
Home mortgages
11
Multifamily residential
12
Commercial
13
Farm
319.4
369.8
386.0
343.2
377.2
395.3
371.3
392.4
362.0
356.8
434.8
504.9
56.8
57.6
-.9
53.7
55.1
-1.4
37.4
38.8
-1.4
79.2
79.8
-.6
87.4
87.8
-.5
161.3
162.1
-.9
92.5
93.1
-.6
87.8
88.3
-.5
86.9
87.3
-.4
106.9
108.3
-1.4
215.5
215.9
-.4
230.2
230.2
-.1
262.6
171.1
21.9
22.9
126.3
94.0
7.1
18.1
7.1
316.2
199.7
28.4
21.1
150.2
112.2
9.2
21.7
7.2
348.6
211.2
30.3
17.3
163.6
120.0
7.8
23.9
11.8
264.0
192.0
30.3
26.7
135.1
96.7
8.8
20.2
9.3
289.8
158.4
21.9
22.1
114.5
75.9
4.3
24.6
9.7
234.1
152.4
50.5
18.8
83.0
56.6
1.3
20.0
5.2
278.7
189.9
31.9
20.7
137.3
99.2
9.6
20.9
7.6
304.6
179.3
21.1
26.1
132.0
92.6
4.9
25.2
9.3
275.1
137.5
22.6
18.0
96.9
59.2
3.7
23.9
10.1
249.9
139.7
41.7
10.8
87.3
55.8
4.2
21.4
5.9
219.3
166.1
59.4
26.9
79.9
58.6
-1.7
18.6
4.4
274.7
222.7
58.1
20.9
143.7
110.2
7.7
22.5
3.3
91.6
40.2
27.1
2.9
21.3
116.5
48.8
37.4
5.2
25.1
137.5
45.4
51.2
11.1
29.7
72.0
4.9
36.7
5.7
24.8
131.5
24.1
54.7
19.2
33.4
81.6
18.3
54.4
-3.3
12.2
88.8
13.0
59.7
-9.2
25.3
125.3
28.9
45.5
12.0
38.9
137.6
19.3
63.9
26.3
28.0
110.1
19.3
70.1
6.5
14.3
53.2
17.4
38.8
-13.0
10.2
52.0
38.8
14.0
-16.3
15.6
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
19
20
21
22
23
24
By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate
262.6
15.4
137.3
12.3
28.0
69.7
316.2
19.1
169.4
14.6
32.4
80.6
348.6
20.5
176.4
21.4
34.4
96.0
264.0
20.3
117.5
14.4
33.7
78.1
289.8
9.7
120.6
16.3
39.6
103.7
234.1
36.3
86.3
9.0
29.8
72.7
278.7
21.7
121.3
12.8
40.6
82.3
304.6
9.1
139.8
20.1
39.8
95.8
275.1
10.2
101.3
12.5
39.5
111.5
249.9
29.3
87.6
9.0
34.6
89.3
219.3
43.3
86.1
9.1
24.9
56.0
274.7
47.8
154.6
-.6
34.6
38.2
25 Foreign net borrowing in United States
26 Bonds
27 Bank loans n.e.c
28 Open market paper
29 U.S. government loans
13.5
5.1
3.1
2.4
3.0
33.8
4.2
19.1
6.6
3.9
20.2
3.9
2.3
11.2
2.9
27.2
.8
11.5
10.1
4.7
27.2
5.4
3.7
13.9
4.2
15.7
6.6
-6.2
10.7
4.5
26.7
-.4
18.5
4.5
4.0
31.9
3.3
3.1
20.6
4.9
22.5
7.6
4.2
7.1
3.5
12.8
2.4
-5.1
12.5
3.0
18.6
10.8
-7.2
9.0
6.0
17.7
4.4
11.8
-3.7
5.2
332.9
403.6
406.2
370.4
404.4
411.0
397.9
424.4
384.5
369.6
453.4
522.6
30 Total domestic plus foreign
Financial sectors
31 Total net borrowing by financial sectors
By instrument
32 U.S. government related
33 Sponsored credit agency securities
34 Mortgage pool securities
35 Loans from U.S. government
36 Private financial sectors
37 Corporate bonds
38 Mortgages
39 Bank loans n.e.c
40 Open market paper
41 Loans from Federal Home Loan Banks
By sector
42 Sponsored credit agencies
43 Mortgage pools
44 Private financial sectors
45 Commercial banks
46 Bank affiliates
47 Savings and loan associations
48 Finance companies
49 REITs
45.8
74.6
82.5
63.3
85.4
69.3
64.0
87.4
83.4
89.8
48.7
71.9
22.0
7.0
16.1
-1.1
23.8
10.1
47.9
24.3
23.1
.6
34.6
7.8
47.4
30.5
15.0
1.9
38.0
-.8
-.5
2.2
20.9
16.2
64.9
14.9
49.5
.4
4.4
2.3
.1
3.2
-2.0
.8
40.4
20.8
18.6
1.1
23.6
3.1
-.2
-.4
10.8
10.3
45.2
28.9
14.9
1.4
42.2
-.3
-.8
3.2
23.5
16.7
49.6
32.1
15.1
2.4
33.8
-1.4
-.2
1.1
18.4
15.8
61.3
23.6
37.0
.8
28.5
-1.2
.1
5.2
14.0
10.4
67.3
-2.5
69.8
-.4
18.0
9.2
44.8
24.4
19.2
1.2
18.5
7.1
-.1
-.4
4.8
7.1
68.4
6.3
62.1
-.3
9.6
4.3
37.1
23.1
13.6
.4
37.5
7.5
.1
2.8
14.6
12.5
-19.7
5.8
.1
1.2
-18.0
-8.8
4.6
13.0
.1
-4.2
8.6
-12.9
5.9
16.1
23.8
1.1
2.0
6.9
16.9
-2.5
23.5
13.6
37.5
1.3
7.2
13.5
18.1
-1.4
24.8
23.1
34.6
1.6
6.5
12.6
16.6
-1.3
25.6
19.2
18.5
.5
6.9
7.4
6.3
-2.2
32.4
15.0
38.0
.4
8.3
15.5
14.1
.2
15.3
49.5
4.4
1.2
1.9
-3.0
4.9
.1
21.8
18.6
23.6
.3
8.0
12.3
5.8
-2.5
30.3
14.9
42.2
.2
6.9
16.8
18.5
.2
34.5
15.1
33.8
.5
9.7
14.1
9.7
.2
24.4
37.0
28.5
.7
9.7
9.1
9.5
.1
6.3
62.1
-19.7
1.7
-5.8
-15.2
.2
.1
-2.5
69.8
4.6
1.7
6.1
-10.1
7.5
.1
511.8
131.8
21.1
29.1
131.1
28.9
51.8
56.1
61.8
467.9
134.3
22.6
24.2
96.6
19.3
69.3
51.9
49.7
459.4
167.6
41.7
12.0
87.3
19.3
70.2
33.0
28.4
502.1
284.0
59.4
43.5
79.8
17.4
32.8
-22.1
7.4
594.5
297.6
58.1
38.3
143.7
38.8
21.6
-11.4
7.9
23.7
13.2
10.6
7.0
3.8
-.2
47.0
24.0
23.0
15.8
4.4
2.9
80.8
38.5
42.3
32.3
4.4
5.7
*
*
All sectors
50 Total net borrowing
51 U.S. government securities
52 State and local obligations
53 Corporate and foreign bonds
54 Mortgages
55 Consumer credit
56 Bank loans n.e.c
57 Open market paper
58 Other loans
378.7
79.9
21.9
38.0
126.2
40.2
29.9
15.0
27.5
478.2
90.5
28.4
32.8
150.2
48.8
59.3
26.4
41.9
488.7
84.8
30.3
29.0
163.5
45.4
53.0
40.3
42.4
433.7
122.9
30.3
34.6
134.9
4.9
47.8
20.6
37.8
489.8
133.0
21.9
26.7
113.9
24.1
60.6
54.0
55.8
480.3
225.9
50.5
27.7
83.0
18.3
51.4
5.4
17.9
462.0
132.0
31.9
23.5
137.0
13.0
77.8
6.1
40.7
External corporate equity funds raised in United States
59 Total new share issues
60 Mutual funds
61 All other
Nonfinancial corporations
62
63
Financial corporations
64
Foreign shares purchased in United States
6.5
.9
5.6
2.7
2.5
.4
1.9
-.1
1.9
-.1
2.5
-.5
-3.8
.1
-3.9
-7.8
3.2
.8
22.2
5.2
17.1
12.9
2.1
2.1
-3.7
6.8
-10.6
-11.5
.9
*
35.4
18.6
16.8
11.4
4.1
1.3
28.0
4.6
23.3
18.8
2.3
2.2
10.2
8.1
2.1
.9
.5
.7
-17.7
5.6
-23.2
-23.8
1.2
-.7
Flow of Funds
1.58
A45
DIRECT A N D I N D I R E C T S O U R C E S O F F U N D S TO C R E D I T M A R K E T S
Billions of dollars, e x c e p t as n o t e d ; half-yearly d a t a are at seasonally a d j u s t e d annual rates.
1981
1980
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
1977
1978
1979
1980
1981
1983
1982
1982
H2
HI
H2
HI
H2
HI
319.4
369.8
386.0
343.2
377.2
395.3
371.3
392.4
362.0
356.8
434.8
564.9
79.3
34.9
20.0
4.3
20.2
102.3
36.1
25.7
12.5
28.0
75.2
-6.3
35.8
9.2
36.5
97.0
15.7
31.7
7.1
42.4
97.4
17.2
23.4
16.2
40.6
109.3
17.9
61.1
.8
29.5
77.2
-.8
28.2
10.3
39.4
113.8
31.2
21.9
16.7
44.1
81.0
3.1
25.0
15.8
37.1
107.9
17.7
48.1
10.4
31.7
110.8
18.2
74.0
-8.8
27.4
123.1
47.7
77.7
-12.9
10.6
10.0
22.5
7.1
39.6
17.1
40.3
7.0
38.0
19.0
53.0
7.7
-4.6
23.7
45.6
4.5
23.2
24.1
48.2
9.2
16.0
16.7
65.3
9.8
17.6
22.2
44.0
-10.3
21.3
27.9
47.2
2.4
36.4
20.3
49.2
16.0
-4.4
14.2
62.5
.1
31.1
19.1
68.1
19.5
4.1
8.8
69.3
12.7
32.3
22.0
13.5
37.1
33.8
47.9
20.2
44.8
27.2
47.4
27.2
64.9
15.7
40.4
26.7
45.2
31.9
49.6
22.5
61.3
12.8
68.4
18.6
67.3
17.7
Private domestic funds advanced
Total net advances
U.S. government securities
State and local obligations
Corporate and foreign bonds
Residential mortgages
Other mortgages and loans
LESS: Federal Home Loan Bank advances
275.6
45.1
21.9
24.1
81.0
107.8
4.3
338.4
54.3
28.4
23.4
95.6
149.3
12.5
379.0
91.1
30.3
18.5
91.9
156.3
9.2
318.2
107.2
30.3
19.3
73.7
94.8
7.1
354.4
115.9
21.9
19.4
56.7
156.9
16.2
366.6
207.9
50.5
15.4
-3.3
96.8
.8
361.2
132.7
31.9
11.8
80.5
114.5
10.3
355.7
100.6
21.1
20.9
75.5
154.3
16.7
353.1
131.1
22.6
17.9
37.9
159.5
15.8
323.0
149.9
41.7
-1.7
11.7
131.7
10.4
411.0
265.8
59.4
32.4
-17.2
62.0
-8.8
466.8
249.9
58.1
23.4
40.1
82.5
-12.9
Private financial intermediation
70 Credit market funds advanced by private financial institutions
Commercial banking
71
??, Savings institutions
73
Insurance and pension funds
24 Other finance
258.8
87.8
78.5
69.0
23.6
302.3
129.0
72.8
75.0
25.5
294.7
123.1
56.7
66.4
48.5
262.3
101.1
54.9
74.4
32.0
305.2
103.6
27.2
79.3
95.2
271.2
108.5
30.6
94.2
37.9
282.8
146.5
72.9
65.6
-2.2
317.3
99.6
41.5
75.3
101.0
293.1
107.6
12.8
83.4
89.4
272.8
109.7
29.5
95.4
38.1
268.9
107.1
31.0
93.0
37.8
361.4
140.9
118.4
102.8
-.6
?5 Sources of funds
26 Private domestic deposits and RP's
27 Credit market borrowing
258.8
139.0
23.8
302.3
141.0
37.5
294.7
142.0
34.6
262.3
168.6
18.5
305.2
211.7
38.0
271.2
173.4
4.4
282.8
174.2
23.6
317.3
213.8
42.2
293.1
209.6
33.8
272.8
163.4
28.5
268.9
182.7
-19.7
361.4
223.3
4.6
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
96.1
1.4
4.3
51.4
39.0
123.8
6.5
6.8
62.2
48.4
118.1
27.6
.4
49.1
41.0
75.2
-21.7
-2.6
65.4
34.0
55.5
-8.7
-1.1
73.2
-7.9
93.5
-27.7
6.1
85.9
29.2
85.0
-15.3
1.0
61.3
38.0
61.3
-8.7
6.5
62.7
.8
49.8
-8.7
-8.7
83.8
-16.7
80.8
-30.1
-2.1
85.4
27.6
105.9
-25.4
14.1
86.4
30.7
133.6
-23.1
7.0
85.4
64.2
Private domestic nonfinancial investors
Direct lending in credit markets
U.S. government securities
State and local obligations
Corporate and foreign bonds
Open market paper
Other
40.6
24.6
-.8
-3.2
9.6
10.4
73.6
36.3
3.6
-1.8
15.6
19.9
118.9
61.4
9.9
5.7
12.1
29.8
74.4
38.3
7.0
.6
-4.3
32.9
87.2
47.4
9.6
-8.9
3.7
35.4
99.7
58.1
30.9
-9.4
-2.0
22.1
102.0
58.6
9.2
-.2
1.4
32.9
80.6
37.2
9.5
-5.5
-3.3
42.7
93.8
57.6
9.7
-12.4
10.7
28.2
78.7
43.1
28.4
-26.3
6.7
26.8
122.4
72.7
33.4
7.4
-10.7
19.6
110.0
72.8
41.4
-2.3
-11.1
9.2
39 Deposits and currency
40 Currency
41 Checkable deposits
Small time and savings accounts
4?
43 Money market fund shares
44 Large time deposits
45 Security RPs
46 Deposits in foreign countries
148.6
8.3
17.2
93.6
.2
25.7
2.2
1.3
152.2
9.3
16.2
65.9
6.9
44.4
7.5
2.0
151.4
7.9
18.7
59.2
34.4
23.0
6.6
1.5
180.0
10.3
5.0
83.1
29.2
44.7
6.5
1.1
221.7
9.5
18.1
47.2
107.5
36.4
2.5
.5
179.4
8.4
13.0
137.0
24.7
-5.2
3.8
-2.4
185.5
9.7
9.9
90.2
-3.4
69.8
7.8
1.7
222.6
8.0
29.8
30.7
104.1
41.6
7.7
.8
220.7
11.0
6.5
63.6
110.8
31.2
-2.6
.2
166.2
4.5
6.7
95.1
39.4
21.2
1.1
-1.8
192.1
12.3
19.1
178.6
10.0
-31.6
6.6
-2.9
243.2
14.7
61.3
305.8
-84.0
-73.5
13.7
5.2
47 Total of credit market instruments, deposits and
currency
189.1
225.8
270.3
254.4
308.9
279.1
287.5
303.3
314.5
244.9
314.5
353.2
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
23.8
93.9
41.0
25.3
89.3
44.6
18.5
77.7
23.0
26.2
82.4
1.5
24.1
86.1
7.3
26.6
74.0
-10.2
19.4
78.3
6.0
26.8
89.2
27.8
21.1
83.0
-13.1
29.2
84.4
1.0
24.4
65.4
-21.3
23.6
77.4
9.2
MEMO: Corporate equities not included above
51 Total net issues
52 Mutual fund shares
53 Other equities
6.5
1.9
-3.8
22.2
-3.7
35.4
28.0
10.2
-17.7
23.7
47.0
80.8
.9
5.6
-.1
1.9
.1
-3.9
5.2
17.1
6.8
-10.6
18.6
16.8
4.6
23.3
8.1
2.1
5.6
-23.2
13.2
10.6
24.0
23.0
38.5
42.3
54 Acquisitions by financial institutions
55 Other net purchases
7.4
-.9
4.5
-2.7
9.7
-13.5
16.8
5.4
22.1
-25.9
27.9
7.5
22.3
5.7
25.3
-15.1
18.9
-36.6
19.3
4.4
36.4
10.6
66.3
14.5
By public agencies and foreign
? Total net advances
3 U.S. government securities
4
Residential mortgages
5 FHLB advances to savings and loans
6 Other loans and securities
Total advanced, by sector
U.S. government
Sponsored credit agencies
9
Monetary authorities
10 Foreign
7
8
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
11
12
N
14
15
16
17
18
19
78
79
30
31
32
33
34
35
36
37
38
48
49
50
NOTES BY LINE NUMBER.
1.
2.
6.
11.
13.
18.
26.
27.
29.
30.
31.
Line 1 of table 1.58.
Sum of lines 3-6 or 7-10.
Includes farm and commercial mortgages.
Credit market funds raised by federally sponsored credit agencies, and net
issues of federally related mortgage pool securities.
Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. Also
sum of lines 28 and 47 less lines 40 and 46.
Includes farm and commercial mortgages.
Line 39 less lines 40 and 46.
Excludes equity issues and investment company shares. Includes line 19.
Foreign deposits at commercial banks, bank borrowings from foreign
branches, and liabilities of foreign banking agencies to foreign affiliates.
Demand deposits at commercial banks.
Excludes net investment of these reserves in corporate equities.
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 12 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance. Line 38 includes
mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/line 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding, may be obtained from Flow of Funds Section, Division of Research
and Statistics, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551.
A46
2.10
Domestic Nonfinancial Statistics • September 1983
N O N F I N A N C I A L B U S I N E S S ACTIVITY
Selected Measures
1967 = 100; m o n t h l y and q u a r t e r l y data are seasonally a d j u s t e d . E x c e p t i o n s noted.
1982
Measure
1980
1981
1983
1982
Dec.
1 Industrial production
2
3
4
5
6
7
1
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
Industry groupings
8 Manufacturing
Capacity utilization (percent) 12
9 Manufacturing
10 Industrial materials industries
11 Construction contracts (1977 = 100)3
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker . . .
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income5
Retail sales"
Prices7
22 Consumer
23 Producer finished goods
Feb.
Mar.
Apr.
May"
June"
July"
Aug.
147.0
151.0
138.6
135.2
137.4
138.1
140.0
142.6
144.4
146.3
149.2
150.5
146.7
145.3
145.4
145.2
151.9
147.6
150.6
149.5
147.9
151.5
154.4
151.6
141.8
141.5
142.6
139.8
143.3
133.7
139.9
139.5
142.0
136.1
141.5
127.8
140.9
140.1
143.6
135.3
143.7
132.0
140.3
138.9
143.4
132.7
145.3
134.9
141.6
139.9
144.3
133.8
147.8
137.6
144.5
142.8
147.7
136.2
150.8
139.7
146.2
144.5
150.4
136.5
152.2
141.7
148.1
146.4
152.3
138.4
154.3
143.6
150.8
148.9
155.0
140.6
157.5
146.7
151.9
149.8
155.9
141.4
159.5
148.3
146.7
150.4
137.6
134.5
136.7
138.2
140.4
143.1
145.1
147.4
150.3
151.4
79.6
80.4
79.4
80.7
71.1
70.1
68.9
66.6
70.0
68.7
70.6
70.1
71.6
71.5
72.9
72.5
73.8
73.5
74.8
74.4
76.2
76.0
76.7
76.7
107.0
111.0
111.0
131.0
127.0
119.0
131.0
129.0
148.0
151.0
137.0
137.0
137.4
110.1
104.3
99.3
152.4
343.7
317.7
264.4
333.8
303.8
138.5
109.4
103.7
98.0
154.4
386.5
349.7
287.3
373.7
330.6
136.2
102.6
96.9
89.4
154.7
409.3
367.2
286.2
397.3
326.0
134.7
98.9
93.6
85.6
154.4
419.8
353.3
135.1
99.5
93.8
85.9
154.6
421.0
376.8
286.2
411.2
352.7
134.9
98.9
93.8
86.0
154.6
420.7
376.2
286.9
410.3
348.3
135.0
98.8
93.9
86.1
154.8
423.8
378.6
289.3
413.7
356.4
135.4
99.4
94.5
86.9
155.2
426.8"
382.2
293.4
417.4"
364.7
135.9
100.2
95.1
87.6
155.5
432.1
386.9
296.4
421.0
376.1
136.5
100.9
95.6
88.2
156.1
434.2
389.0
299.3
422.6
378.9
137.1
101.8
96.4
89.2
156.4
436.7
391.9
303.1
429.9
378.1
136.5
102.2
96.5
89.4
155.3
n.a.
n.a.
n.a.
372.9
372.9
246.8
247.0
272.4
269.8
289.1
280.7
292.4
285.5
293.1
283.9
293.2
284.1
293.4
283.4
295.5
283.0
297.1
284.3
298.1
285.0
299.3
285.7
n.a.
n.a.
1. The capacity utilization series has been revised back to January 1967.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. Dodge Division.
4. Based on data in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).
2.11
Jan.
6. Based on Bureau of Census data published in Survey of Current Business.
7. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.
O U T P U T , C A P A C I T Y , A N D CAPACITY U T I L I Z A T I O N
Seasonally a d j u s t e d
1982
1983
Q4
Q3
Ql
1982
Q2"
Output (1967 = 100)
Q3
1983
Q4
Ql
1982
Q2
Capacity (percent of 1967 output)
1983
Q4
Q3
Ql
Q2"
Utilization rate (percent)
1 Total industry
2 Mining
3 Utilities
138.2
117.2
167.9
135.3
117.0
166.2
138.5
116.7
163.6
144.4
112.5
169.4
192.8
164.8
206.5
193.7
165.1
207.4
194.6
165.2
208.5
195.5
165.3
209.8
71.7
71.1
81.3
69.8
70.9
80.1
71.2
70.6
78.5
73.9
68.1
80.7
4 Manufacturing
5 Primary processing
6 Advanced processing
137.7
132.4
140.5
134.5
129.3
137.3
138.4
137.0
139.7
145.2
145.3
145.1
193.9
193.0
194.3
194.8
193.7
195.4
195.7
194.3
196.5
196.6
194.8
197.6
71.0
68.6
72.3
69.0
66.8
70.2
70.7
70.5
71.1
73.8
74.6
73.4
7 Materials
132.6
128.7
134.8
141.7
191.0
191.7
192.3
192.9
69.4
67.1
70.1
73.5
8 Durable goods
9 Metal materials
10 Nondurable goods
11 Textile, paper, and chemical
12
Paper
13
Chemical
124.7
73.0
155.1
158.4
145.9
188.5
117.1
66.5
157.0
160.8
147.6
191.9
125.2
78.6
163.7
169.3
149.9
204.7
134.8
85.2
171.5
179.3
153.3
218.8
194.4
140.6
215.6
226.8
163.6
290.6
194.8
140.3
216.9
228.3
164.4
292.8
195.2
140.2
217.8
229.4
165.3
294.8
195.6
139.9
218.8
230.7
166.1
296.6
64.2
51.9
71.9
69.8
89.1
64.9
60.2
47.4
72.4
70.5
89.7
65.5
64.2
56.1
75.2
73.8
90.7
69.4
68.9
60.9
78.4
77.8
92.3
73.8
14 Energy materials
123.8
121.5
122.2
121.5
152.8
153.3
153.9
154.3
81.0
79.2
79.5
78.7
Labor Market
2.11
A47
Continued
Previous cycle1
Latest cycle2
1982
1982
Low
Aug.
Dec.
1983
Series
High
Low
High
Jan.
Feb.
Mar.
Apr.
May'
June'
July'
Aug.
Capacity utilization rate (percent)
15 Total industry
16 Mining
17 Utilities
88.4
71.1
87.3
76.5
71.8
69.7
70.7
71.0
71.8
73.1
73.9
74.7
76.1
76.7
91.8
94.9
86.0
82.0
88.5
86.7
84.0
83.8
70.9
81.6
71.7
79.0
73.8
78.4
69.9
77.7
68.1
79.4
67.5
80.9
68.2
80.9
68.4
80.4
69.7
81.7
70.7
83.0
18 Manufacturing
87.9
69.0
87.5
75.5
71.2
68.9
70.0
70.6
71.6
72.9
73.8
74.8
76.2
76.7
19
93.7
85.5
68.2
69.4
91.4
85.9
72.6
77.0
68.7
72.4
66.2
70.4
68.6
70.9
70.8
70.8
72.1
71.5
73.4
72.5
74.6
73.4
75.5
74.4
76.9
75.8
77.9
76.1
92.6
69.3
88.9
74.2
69.5
66.6
68.7
70.1
71.5
72.5
73.5
74.4
76.0
76.7
91.4
97.8
63.5
68.0
88.4
95.4
68.4
59.4
64.4
51.8
59.8
46.8
62.3
53.3
64.2
56.1
66.0
58.8
67.7
59.9
68.9
61.0
70.1
61.7
72.0
62.8
72.9
63.8
94.4
67.4
91.7
77.5
71.6
71.6
73.4
75.3
76.8
77.2
78.7
79.3
79.9
80.6
26
27
Nondurable goods
Textile, paper, and
chemical
Paper
Chemical
95.1
99.4
95.5
65.4
72.4
64.2
92.3
97.9
91.3
75.5
89.8
70.7
69.5
89.6
64.2
70.0
87.4
65.4
71.4
90.9
66.4
74.1
90.8
69.9
75.8
90.3
71.9
76.4
91.0
72.6
78.1
92.9
74.0
78.8
93.0
74.7
79.6
96.2
75.1
80.4
n.a.
n.a.
28
Energy materials
94.5
84.4
88.7
84.4
81.5
78.5
80.1
79.2
79.2
78.9
78.5
78.8
81.1
81.7
Primary processing
Advanced processing . . . .
20
71 Materials
Durable goods
Metal materials
22
23
24
25
1. Monthly high 1973; monthly low 1975.
2.12
2. Preliminary; monthly highs December 1978 through January 1980; monthly
lows July through October 1980.
LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
T h o u s a n d s of p e r s o n s ; m o n t h l y data are seasonally a d j u s t e d . E x c e p t i o n s noted.
1983
Category
1980
1981
1982
Feb.
Mar.
Apr.
May
June
July
Aug.
HOUSEHOLD SURVEY DATA
1 Noninstitutional population1
169,847
172,272
174,451
175,693
175,850
175,996
176,151
176,320
176,498
176,648
2 Labor force (including Armed Forces) 1
Civilian labor force
3
Employment
Nonagricultural industries 2
4
Agriculture
5
Unemployment
Number
6
7
Rate (percent of civilian labor f o r c e ) . . .
8 Not in labor force
109,042
106,940
110,812
108,670
112,384
110,204
112,741
110,553
112,678
110,484
112,988
110,786
112,947
110,749
114,127
111,932
114,067
111,875
114,469
112,261
95,938
3,364
97,030
3,368
96,125
3,401
95,670
3,393
95,729
3,375
96,088
3,371
96,190
3,367
97,264
3,522
97,758
3,527
98,074
3,489
7,637
7.1
60,805
8,273
7.6
61,460
10,678
9.7
62,067
11,490
10.4
62,952
11,381
10.3
63,172
11,328
10.2
63,008
11,192
10.1
63,204
11,146
10.0
62,193
10,590
9.5
62,431
10,699
9.5
62,179
90,406
91,156
89,596
88,746
88,814
89,101
89,421
89,844'
90,202'
89,791
20,285
1,027
4,346
5,146
20,310
5,160
17,890
16,241
20,170
1,132
4,176
5,157
20,551
5,301
20,547
16,024
18,853
1,122
3,912
5,057
20,547
5,350
20,401
15,784
18,245
1,014
3,790
4,965
20,343
5,384
19,262
15,742
18,267
1,006
3,757
4,963
20,350
5,391
19,356
15,724
18,376
997
3,786
4,988
20,329
5,423
19,478
15,724
18,493
994
3,860
4,993
20,356
5,435
19,546
15,744
18,582'
1,003'
3,933'
4,992'
20,494'
5,451
19,668'
15,721'
18,742'
1,015'
3,971'
4,986'
20,528'
5,463'
19,771'
15,726'
18,770
1,021
4,024
4,331
20,544
5,480
19,877
15,744
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment3
10 Manufacturing
11 Mining
12 Contract construction
13 Transportation and public utilities
14 Trade
15 Finance
16 Service
17 Government
1. Persons 16 years of age and over. Monthly figures, which are based on
sample data, relate to the calendar week that contains the 12th day; annual data
are averages of monthly figures. By definition, seasonality does not exist in
population figures. Based on data from Employment and Earnings (U.S. Department of Labor).
2. Includes self-employed, unpaid family, and domestic service workers.
3. Data include all full- and part-time employees who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family
workers, and members of the Armed Forces. Data are adjusted to the March 1983
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 1983
INDUSTRIAL PRODUCTION
Indexes and Gross Value
M o n t h l y data are seasonally a d j u s t e d
r'
1967
proportion
1982
1982
avg.
Aug.
Sept.
Oct.
1983
Nov.
Dec.
Jan
Feb.
Mar.
Apr.
May'
June
July?
Index (1967 = 100)
MAJOR MARKET
100.00
138.6
138.4
137.3
135.7
134.9
135.2
137.4
138.1
140.0
142.6
144.4
146.3
149.2
60.71
47.82
27.68
20.14
12.89
39.29
141.8
141.5
142.6
139.8
143.3
133.7
142.0
141.2
144.1
137.3
144.7
132.8
140.8
140.0
143.4
135.2
143.7
132.0
139.3
138.7
142.2
134.0
141.6
130.0
139.0
138.3
141.3
134.2
141.8
128.4
139.9
139.5
142.0
136.1
141.5
127.8
140.9
140.1
143.6
135.3
143.7
132.0
140.3
138.9
143.4
132.7
145.3
134.9
141.6
139.9
144.3
133.8
147.8
137.6
144.5
142.8
147.7
136.2
150.8
139.7
146.2
144.5
150.4
136.5
152.2
141.7
148.1
146.4
152.3
138.4
154.3
143.6
150.8
148.9
155.0
140.6
157.5
146.7
7.89
2.83
2.03
1.90
.80
5.06
1.40
1.33
1.07
2.59
129.2
129.5
99.0
86.6
206.9
129.1
102.6
104.6
149.7
135.0
132.9
135.5
107.1
93.3
207.6
131.4
104.5
108.6
152.5
137.2
131.3
135.5
105.8
94.3
210.7
128.9
99.4
104.1
153.3
134.9
126.5
123.6
89.6
79.5
210.0
128.1
106.1
110.5
151.9
130.1
124.6
120.7
86.9
77.7
206.6
126.8
104.8
108.4
151.4
128.6
125.9
128.7
99.0
87.9
204.0
124.3
94.2
98.3
150.8
129.8
131.6
136.2
107.0
97.1
210.2
129.1
109.5
112.9
149.0
131.4
134.4
144.3
120.8
107.3
203.9
128.8
105.8
108.8
156.7
129.7
136.3
142.6
116.4
99.9
209.3
132.8
105.0
108.5
168.3
133.3
140.5
144.9
117.8
102.7
213.6
138.1
106.1
109.7
180.5
137.9
145.5
152.2
124.9
107.4
221.5
141.8
112.8
116.1
181.9
140.9
149.1
159.9
135.4
118.3
222.3
143.1
114.0
118.0
185.6
141.3
153.7
167.4
145.6
129.8
222.6
146.1
115.6
119.1
195.3
142.3
18 Nondurable consumer goods
19 Clothing
20 Consumer staples
71
Nonfood staples
22
Consumer chemical products . . . .
23
24
Consumer paper products
25
Consumer energy products
26
19.79
4.29
15.50
8.33
7.17
2.63
1.92
2.62
1.45
148.0
148.6
148.2
148.5
147.9
148.4
148.3
147.0
147.5
150.5
152.3
153.5
155.5
159.0
149.7
169.7
219.9
127.7
150.2
170.8
159.4
149.6
170.8
222.4
129.4
149.3
169.7
158.8
148.6
170.7
221.7
128.2
150.6
169.5
159.1
150.2
169.5
220.0
125.3
151.1
169.1
158.1
149.0
168.7
218.9
125.1
150.2
171.5
158.8
149.5
169.6
220.9
128.3
148.4
169.3
158.6
150.9
167.6
222.6
127.1
142.2
164.1
157.4
149.5
166.5
220.9
127.9
140.2
162.9
158.1
148.4
169.4
225.6
128.1
143.3
166.1
161.1
150.9
172.9
225.5
129.2
152.2
175.5
162.8
153.2
174.0
227.8
128.6
153.4
174.3
164.1
155 5
174.1
229.0
130.1
151.2
170.5
165.8
176.1
230.0
132.1
154.2
Equipment
27 Business
28 Industrial
29
Building and mining
Manufacturing
30
31
Power
12.63
6.77
1.44
3.85
1.47
157.9
134.9
214.2
107.2
129.9
153.9
128.4
190.8
104.4
130.1
150.5
123.8
182.1
101.6
124.7
147.1
118.3
169.3
98.0
121.0
146.4
117.2
165.7
97.5
121.0
148.1
117.9
171.9
97.0
119.7
146.6
118.4
173.8
97.6
118.3
142.7
113.7
153.6
97.9
116.0
143.7
113.1
145.3
99.7
116.2
146.9
113.5
141.8
101.7
116.6
147.7
114.5
146.2
102.5
115.0
150.6
116.3
148.7
105.0
114.1
152.6
118.4
153.7
107.1
113.5
5.86
3.26
1.93
.67
184.4
253.5
103.9
80.5
183.3
253.5
102.0
75.8
181.4
254.0
95.5
76.1
180.5
253.5
93.2
76.8
180.2
254.8
92.3
70.7
183.0
258.6
96.2
65.1
179.2
254.9
90.8
66.0
176.1
251.2
88.2
63.4
179.2
255.7
90.1
63.4
185.4
264.3
92.0
70.2
186.1
265.0
92.6
71.3
190.2
272.3
93.2
70.4
192.1
276.7
91.9
69.9
36 Defense and space
7.51
109.4
109.5
109.5
111.9
113.6
115.9
116.4
116.1
117.0
118.2
117.6
118.0
120.5
Intermediate products
37 Construction supplies
38 Business supplies
39 Commercial energy products
6.42
6.47
1.14
124.3
162.1
181.1
127.1
162.1
178.1
125.5
161.8
179.2
122.5
160.5
180.4
123.4
160.1
182.4
123.0
159.8
182.4
127.0
160.3
180.6
129.7
160.9
178.6
133.1
162.3
180.3
136.4
165.2
183.3
138.4
166.0
183.1
141.9
166.7
180.5
145.0
170.0
182.4
20.35
4.58
5.44
10.34
5.57
125.0
95.3
166.8
116.2
79.9
125.1
101.0
164.1
115.4
76.1
123.0
97.1
158.3
115.8
77.7
118.5
91.4
155.4
111.1
73.0
116.4
90.0
155.1
107.7
69.1
116.5
91.1
155.3
107.4
68.7
121.5
96.2
157.5
113.8
78.1
125.3
101.6
158.8
118.2
82.4
128.7
104.0
162.5
121.9
86.0
132.4
106.5
167.2
125.4
87.8
134.7
108.5
170.6
127.5
89.3
137.2
109.5
175.8
129.2
90.4
140.9
115.0
180.7
131.5
91.3
10.47
157.5
154.5
158.5
158.2
157.3
155.6
159.7
164.0
167.5
168.7
172.1
173.7
175.3
7.62
1.85
1.62
4.15
1.70
1.14
161.1
102.2
145.6
193.5
161.4
127.9
157.7
103.2
146.6
186.5
162.8
120.1
162.2
103.3
148.9
193.7
167.3
121.1
161.5
104.4
148.9
192.0
164.9
125.5
161.0
102.5
149.7
191.6
160.8
127.4
160.0
102.1
144.1
192.0
155.2
127.2
163.7
104.7
150.1
195.4
162.1
129.6
170.0
106.4
150.1
206.2
159.6
130.5
174.3
110.6
149.5
212.5
163.8
127.7
175.9
110.6
150.8
214.9
163.2
129.1
180.2
114.6
154.4
219.6
164.3
129.7
181.9
116.0
154.8
222.0
166.1
130.0
184.1
116.8
160.3
223.5
164.6
132.1
52 Energy materials
53 Primary energy
54 Converted fuel materials
8.48
4.65
3.82
125.1
116.0
136.3
124.5
113.8
137.4
121.0
133.0
122.6
114.4
132.6
121.4
113.7
130.8
120.4
113.5
128.9
123.0
116.5
130.8
121.8
115.4
129.6
121.9
114.4
131.1
121.6
113.9
131.0
121.1
113.8
129.9
121.8
113.4
132.0
125.4
117.1
135.6
Supplementary groups
55 Home goods and clothing
56 Energy, total
57 Products
58 Materials
9.35
12.23
3.76
8.48
119.6
135.7
159.6
125.1
121.3
134.8
158.0
124.5
120.1
132.7
159.3
121.0
119.9
134.1
160.0
122.6
119.6
133.3
160.0
121.4
118.2
132.2
158.7
120.4
120.8
132.4
153.8
123.0
119.9
131.0
151.9
121.8
122.0
131.9
154.5
121.9
126.3
133.9
161.7
121.6
129.2
133.8
162.4
121.1
130.3
133.6
160.1
121.8
133.4
136.9
162.7
125.4
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
32
33
34
35
Commercial transit, farm
Commercial
Transit
Farm
Materials
40 Durable goods materials
41 Durable consumer parts
42 Equipment parts
43 Durable materials n.e.c
44
Basic metal materials
45 Nondurable goods materials
46 Textile, paper, and chemical
materials
47
Textile materials
48
Paper materials
49
Chemical materials
50 Containers, nondurable
51 Nondurable materials n.e.c
111.1
2.13
Output
A49
June
Aug. f
Continued
1967
Grouping
SIC
code
portion
1983
1982
1982
avg.
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
July
Index (1967 = 100)
MAJOR INDUSTRY
1 Mining and utilities.
Mining
2
3
Utilities
4
Electric
5 Manufacturing
6
Nondurable
7
Durable
12.05
6.36
5.69
3.88
87.95
35.97
51.98
146.3
126.1
168.7
190.5
137.6
156.2
124.7
141.3
116.9
168.5
189.9
138.0
156.9
124.9
139.7
114.7
167.5
188.2
137.1
156.7
123.5
140.4
115.9
167.8
188.4
135.0
156.2
120.3
140.4
116.8
166.7
188.3
134.0
155.3
119.3
140.1
118.4
164.2
185.6
134.5
155.6
119.9
141.3
121.9
163.1
184.4
136.7
157.4
122.5
141.7
114.5
171.9
191.6
138.0
157.5
124.5
137.7
112.6
165.8
188.2
140.4
160.7
126.3
138.9
111.6
169.3
192.7
143.1
163.3
129.1
139.7
112.8
169.7
192.9
145.1
165.4
131.0
139.6
113.1
169.1
191.5
147.4
167.7
133.3
142.1
115.4
172.0
195.6
150.3
170.0
136.7
144.5
117.0
175.3
200.2
151.4
171.1
137.7
145.5
115.5
8
9
10
11
Mining
Metal
Coal
Oil and gas extraction . . .
Stone and earth minerals.
10
11.12
13
14
.51
.69
4.40
.75
82.4
142.7
131.1
112.1
53.4
135.8
123.3
105.7
55.4
127.9
121.0
106.3
63.1
143.2
119.1
108.5
70.4
134.1
120.3
111.9
74.9
129.7
122.9
111.7
81.7
144.8
124.6
112.8
71.2
135.0
117.5
108.1
75.2
127.3
114.4
114.0
79.8
125.3
112.2
117.7
84.4
125.6
112.5
122.5
81.9
124.6
113.5
121.7
79.5
139.9
114.3
123.8
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
151.1
118.0
124.5
150.7
120.6
125.9
149.0
113.3
126.1
151.5
110.6
125.9
152.0
113.0
123.1
152.8
109.9
122.2
154.4
104.7
125.8
147.0
115.9
128.7
152.0
113.4
131.9
153.7
114.8
136.6
155.6
112.9
139.6
157.1
120.0
141.8
145.0
150.8
152.5
154.3
155.0
154.5
151.1
158.8
160.9
156.3
157.0
161.5
162.9
166.2
169.2
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
144.1
196.1
121.8
254.7
60.9
145.3
195.6
121.4
261.1
60.8
144.3
196.4
122.6
262.0
60.9
142.0
194.1
123.8
256.3
59.5
141.7
192.8
120.0
250.2
57.7
142.8
195.9
118.7
249.7
56.0
141.3
197.6
113.5
256.2
59.5
135.8
200.0
108.6
275.2
64.1
145.9
205.7
114.8
272.0
59.4
145.7
208.5
120.6
283.0
58.7
145.2
211.0
123.8
288.0
59.6
147.4
214.6
123.6
292.7
60.1
150.8
216.9
124.6
295.5
62.7
151.9
22
23
24
25
Durable manufactures
Ordnance, private and government
Lumber and products
Furniture and fixtures
Clay, glass, stone products
19.91
24
25
32
3.64
1.64
1.37
2.74
86.9
112.6
151.9
128.2
86.5
120.3
156.7
128.8
86.9
119.9
155.7
130.4
89.5
117.2
154.3
128.1
91.9
119.1
152.4
127.3
92.5
121.4
153.7
125.4
93.5
130.0
150.0
128.0
93.4
130.5
162.5
124.8
91.9
128.7
161.0
135.6
93.2
132.1
167.7
138.3
92.6
135.8
169.6
139.2
93.3
137.4
173.1
141.9
95.2
140.9
178.4
144.4
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
75.3
61.7
114.8
149.0
169.3
72.9
57.4
114.3
147.2
169.7
73.2
56.4
112.3
144.9
167.0
69.6
54.1
107.6
140.4
165.4
63.6
47.5
107.0
139.6
165.5
63.5
46.6
107.3
139.2
165.5
73.1
59.0
107.6
138.0
169.5
79.4
64.3
112.3
137.1
170.1
81.2
66.9
113.9
138.6
173.8
83.1
68.5
115.3
143.1
177.2
84.9
69.5
115.5
146.1
180.1
85.5
69.7
118.5
149.8
182.0
87.2
73.2
121.4
154.2
187.3
122.8
156.3
186.3
37
371
9.27
4.50
104.9
109.8
107.0
116.7
105.3
113.5
100.8
103.0
100.2
101.7
103.7
108.8
106.3
113.9
110.5
124.8
110.1
123.2
111.4
125.5
113.8
130.4
116.6
136.2
119.7
142.2
121.1
145.0
372-9
38
39
4.77
2.11
1.51
100.4
161.9
137.0
97.8
165.5
133.9
97.6
161.9
132.9
98.6
157.4
129.6
98.7
155.8
129.5
98.9
155.2
128.2
99.1
154.5
131.3
97.0
151.6
130.6
97.7
154.0
136.9
98.1
155.1
145.0
98.1
156.0
149.0
98.1
156.1
151.0
98.6
158.3
153.7
98.6
160.3
152.0
31 Transportation equipment
32
Motor vehicles and parts
33 Aerospace and miscellaneous
transportation equipment.
34 Instruments
35 Miscellaneous manufactures
121.7
97.1
87.5
Gross value (billions of 1972 dollars, annual rates)
MAJOR MARKET
36 Products, total
507.4
579.6
578.5
575.3
570.0
568.4
572.9
578.1
578.4
584.1
592.6
601.8
611.3
618.7
620.5
37 Final
38 Consumer goods .
39 Equipment
40 Intermediate
390.9
277.5
113.4
116.6
451.1
308.0
143.1
128.5
449.2
309.1
140.1
129.3
446.3
309.3
137.0
129.0
442.8
306.6
136.2
127.2
441.3
305.6
135.7
127.1
445.8
306.8
138.9
127.1
448.3
310.9
137.4
129.8
447.3
312.0
135.3
131.1
451.3
313.8
137.5
132.8
457.7
318.8
138.9
134.9
465.6
325.6
140.0
136.2
472.7
331.1
141.6
138.6
477.6
333.7
143.9
141.1
477.6
334.8
142.8
143.0
1. 1972 dollar value.
A50
2.14
Domestic Nonfinancial Statistics • September 1983
HOUSING A N D CONSTRUCTION
M o n t h l y figures are at seasonally a d j u s t e d annual rates e x c e p t as noted.
1983
1982
Item
1980
1981
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June'
July
Private residential real estate activity (thousands of units)
N E W UNITS
1
Permits authorized
?
1-family
2-or-more-family
3
1,191
710
480
986
564
421
1,001
546
454
1,227
738
489
1,326
753
573
1,447
866
581
1,479
835
644
1,467
859
608
1,536
841
695
1,635
940
695
1,761
1,013
748
1,816
932
884
4 Started
5 1-family
6 2-or-more-family
1,292
852
440
1,084
705
379
1,062
663
400
1,361
868
493
1,280
842
438
1,694
1,126
568
1,784
1,103
681
1.605
1.008
597
1,506
1,001
505
1,807
1,183
624
1,752
1,146
606
1,741
1,010
731
896
515
382
682
382
301
720
400
320
712
395
317
730
411
319
756
428
329
796
455
341
828'
472
356'
859'
489'
370
899
518
382
937
536
401
T
1,502
957
545
1,266
818
447
1,006
631
374
1,053
679
374
1,035
647
388
1,195
782
413
1,138
709
429
1,147'
788'
359'
1,164'
803'
361'
1,354
851
503
1,388
950
438
n.a.
I
222
241
239
251
243
284
283
276
291
298
308
Merchant builder activity in 1-family units
14
15 Number for sale, end of period1
545
342
436
278
413
255
545
246
529
251
611
259
593
262
611'
262
635'
266'
661
277
663
290
Price (thousands of dollars)2
Median
Units sold
Average
17 Units sold
64.7
68.8
69.3
73.5
71.7
73.5
73.8
72.5'
74.7'
74.5
76.1
75.0
76.4
83.1
83.8
87.8
86.7
87.2
86.8
86.2'
87.6
88.5
90.7
88.1
2,974
2,418
1,991
2,150
2,260
2,580
2,460
2,710
2,730
2,900
2,940
2,810
62.1
72.7
66.1
78.0
67.7
80.4
67.7
80.4
67.8
80.6
68.1
80.0
68.2
80.3
68.9
81.1
68.8
81.3
69.2
81.7
71.4
84.7
71.6
84.1
7 Under construction, end of period1
8
9 2-or-more-family
Completed
1-family
12 2-or-more-family
10
11
13
Mobile homes shipped
16
|
1
\
620
293
EXISTING UNITS ( 1 - f a m i l y )
18 Number sold
Price of units sold (thousands of dollars)2
19
20 Average
Value of new construction3 (millions of dollars)
CONSTRUCTION
21 Total put in place
230,712
239,418
232,048
243,714
240,207
247,914
243,032
241,908
245,548
253,096
263,061
267,710
??
175,700
87,262
88,438
186,069
86,567
99,502
180,979
74,809
106,170
190,520
81,245
109,275
190,768
86,018
104,750
195,032
89,701
105,331
194,331 194,865
93,568 96.127
100,763 98,738
197,998
101,987
96,011
204,647
107,533
97,114
213,428
113,787
99,641
217,192
117,699
99,493
13,839
29,940
8,654
36,005
17,031
34,243
9,543
38,685
17,346
37,281
10,507
41,036
16,716
37,861
11,517
43,181
15,631
36,934
11,784
40,401
15,182
38,167
11,983
39,999
14,315
36,675
11,664
38,109
14,263
35.469
11,598
37,408
13,223
33,619
10,770
38,399
13,047
33,291
11,237
39,539
13,136
35,898
10,974
39,633
12,606
35,753
11,639
39,495
55,011
1,880
13,770
5,089
34,272
53,346
1,966
13,599
5,300
32,481
51,068
2,205
13,521
5,029
30,313
53,194
2,572
14,409
4,708
31,505
49,439
2,432
13,048
4,625
29,334
52,882
2,341
13,966
4,756
31,819
48,701
2,421
12,509
4,532
29,239
47,043
2,541
11,866'
4,894
27,742
47,549
2,782
12,900
4,706
27,161
48,450
2,232
13,044
4,240
28,934
49,633
2,166
12,925
4,564
29,978
50,517
2,376
13,648
5,287
29,206
73
24
75
76
77
28
79
30
31
37
33
Residential
Nonresidential, total
Buildings
Industrial
Commercial
Other
Public utilities and other
Public
Highway
Conservation and development
Other
1. Not at annual rates.
2. Not seasonally adjusted.
3. Value of new construction data in recent periods may not be strictly
comparable with data in prior periods because of changes by the Bureau of the
Census in its estimating techniques. For a description of these changes see
Construction Reports (C-30-76-5), issued by the Bureau in July 1976.
NOTE. Census Bureau estimates for all series except (a) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (b) sales and prices of
existing units, which are published by the National Association of Realtors. All
back and current figures are available from originating agency. Permit authorizations are those reported to the Census Bureau from 16,000 jurisdictions beginning
with 1978.
Prices
2.15
CONSUMER AND PRODUCER
A51
PRICES
P e r c e n t a g e c h a n g e s b a s e d on seasonally a d j u s t e d d a t a , except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Item
1983
June
Sept.
Mar.
Dec.
Index
level
July
1983
(1967
= 100)1
1983
1983
1982
1982
June
Change from 1 month earlier
June
Apr.
Mar.
June
May
July
CONSUMER PRICES 2
1
7.1
2.6
4.1
.5
.4
5.4
.1
.6
.5
.2
.4
299.3
1
l\
5.2
1.1
8.5
6.7
10.0
1.5
2.1
3.0
4.0
2.0
.6
8.1
4.7
2.4
4.6
.8
10.2
-.3
5.4
-4.8
2.8
-25.1
4.4
5.7
3.7
1.7
21.0
3.9
2.9
4.6
.6
-.9
.2
.4
.1
.4
2.0
.4
.1
.5
.3
2.5
.3
.2
.3
-.3
.3
.3
.4
.3
-.1
.3
.6
.7
.4
292.0
430.1
286.8
242.7
337.9
1.8
-.9
.3
3.1
2.8
4.2
-7.7
30.9
4.2
3.5
5.2
.8
7.0
7.9
3.6
-4.7
4 .1'
-35.5 r
- 2 ,<y
2.0r
i2.<y
2.9
-.3'
-.3'
.2'
-3.1'
10
11
3.5
3.8
-7.9
5.6
5.8
2.5'
2.1'
.C
.3'
-.1
1.1'
-2.4'
.1'
.0'
.3
-.5
2.2
.1
.2
.5
-.6
3.2
.5
.2
.1
-.6
.2
.5
.1
285.7
260.8
795.3
240.3
287.4
12
13
1.1
2.4
0.7
1.4
2.3
1.0
1.5
1.0
-4.7'
.8'
3.6'
2.8'
-.4'
.1'
-.4
-.1'
.4
.4
.9
.4
.3
.3
318.1
295.1
-1.7
-.2
-12.4
-3.0
.0
6.1
-26.4
8.7
2.9
1.3
6.4
-8.0
18.1
-9.2'
-16.2'
.8
-4.8'
59.3'
.7'
.2'
1.7'
3.0
-.9'
2.1'
-1.2
-.3
5.2
-1.6
.0
4.6
-2.6
-.6
2.2
248.6
787.1
250.3
5
PRODUCER PRICES
7
8
Q
Crude materials
14
IS
16
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers and reflect a
rental-equivalence measure of homeownership after 1982.
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds,
SOURCE. Bureau of Labor Statistics.
A52
2.16
Domestic Nonfinancial Statistics • September 1983
GROSS N A T I O N A L PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1982
Account
1980
1981
1983
1982
Q2
Q3
Q4
Q1
Q2r
GROSS NATIONAL PRODUCT
2,631.7
2,954.1
3,073.0
3,070.2
3,090.7
3,109.6
3,171.5
3,270.0
1,668.1
214.7
668.8
784.5
1,857.2
236.1
733.9
887.1
1,991.9
244.5
761.0
986.4
1,972.8
242.9
754.7
975.2
2,008.8
243.4
766.6
998.9
2,046.9
252.1
773.0
1,021.8
2,073.0
258.5
777.1
1,037.4
2,148.4
278.0
798.2
1,072.2
6 Gross private domestic investment
Fixed investment
7
8
Nonresidential
9
Structures
10
Producers' durable equipment
11
Residential structures
12
Nonfarm
401.9
411.7
308.8
110.9
197.9
102.9
98.1
474.9
456.5
352.2
133.4
218.9
104.3
99.8
414.5
439.1
348.3
141.9
206.4
90.8
86.0
432.5
443.7
352.7
144.2
208.5
91.0
86.1
425.3
430.2
342.3
140.0
202.2
87.9
83.4
377.4
433.8
337.0
138.6
198.4
96.8
91.2
404.1
443.5
332.1
132.9
199.3
111.3
106.7
451.8
463.7
335.9
127.4
208.5
127.7
122.7
13
14
-9.8
-4.5
18.5
10.9
-24.5
-23.1
-11.2
-8.8
-4.9
-2.3
-56.4
-53.7
-39.4
-39.0
-11.9
-10.4
15 Net exports of goods and services
16 Exports
17 Imports
24.0
338.8
314.8
26.3
368.8
342.5
17.4
347.6
330.2
33.3
364.5
331.2
.9
346.0
345.0
5.6
321.6
316.1
17.0
326.9
309.9
-12.3
322.8
335.1
18 Government purchases of goods and services
19 Federal
20
State and local
537.8
197.1
340.8
595.7
229.2
366.5
649.2
258.7
390.5
631.6
244.1
387.5
655.7
261.7
394.0
679.7
279.2
400.5
677.4
273.5
404.0
682.1
272.7
409.4
2,641.5
1,140.6
477.9
662.7
1,225.2
266.0
2,935.6
1,291.9
528.0
763.9
1,374.2
288.0
3,097.5
1,280.9
500.8
780.1
1,511.2
281.0
3,081.4
1,290.8
514.3
776.5
1,496.4
283.0
3,095.6
1,286.7
518.4
768.3
1,527.2
276.9
3,165.9
1,264.8
474.0
790.8
1,560.5
284.3
3,210.9
1,292.2
482.7
809.5
1,588.4
290.9
3,281.9
1,345.7
534.9
810.8
1,623.5
300.7
-9.8
-4.1
-5.7
18.5
3.6
14.9
-24.5
-15.5
-9.1
-11.2
-2.5
-8.7
-4.9
6.4
-11.3
-56.4
-45.0
-11.4
-39.4
-38.2
-1.2
-11.9
-9.5
-2.4
1,475.0
1,513.8
1,485.4
1,489.3
1,485.7
1,480.7
1,490.1
1,523.4
31 Total
2,116.6
2,373.0
2,450.4
2,448.9
2,458.9
2,474.0
2,528.5
2,612.0
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
1,599.6
1,356.6
260.3
1,096.4
243.0
115.0
128.0
1,769.3
1,493.2
1,859.9
1,563.9
303.1
1,260.8
296.0
140.6
155.4
1,879.5
1,579.8
307.7
1,272.1
299.7
141.5
158.2
1,889.0
1,586.0
1,208.8
276.0
132.5
143.5
1,865.7
1,568.1
306.0
1,262.1
297.6
140.9
156.6
1,271.5
302.9
142.5
160.4
1,923.7
1,610.6
319.2
1,291.5
313.1
148.8
164.3
1,968.8
1,647.2
323.3
1,323.9
321.6
151.5
170.1
117.5
95.6
21.8
120.2
89.7
30.5
109.0
87.5
21.5
104.9
88.1
16.8
103.6
87.8
15.8
116.2
90.2
26.0
120.6
98.4
22.2
129.7
106.1
23.6
1 Total
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
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
NATIONAL INCOME
39 Proprietors' income 1
40
Business and professional 1
41
Farm 1
42 Rental income of persons 2
1
43 Corporate profits
44
Profits before tax 3
45
Inventory valuation adjustment
46
Capital consumption adjustment
47 Net interest
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
284.4
314.5
31.5
41.4
49.9
49.0
50.9
52.3
54.1
54.8
175.4
234.6
-42.9
-16.3
192.3
227.0
-23.6
-11.0
164.8
174.2
-8.4
-1.1
166.8
178.8
-8.5
-3.5
168.5
177.3
-9.0
.1
161.9
167.5
-10.3
4.7
181.8
169.7
-1.7
13.9
214.7
199.1
-9.8
25.4
192.6
249.9
261.1
268.3
256.4
254.7
248.3
244.0
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
National Income Accounts
2.17
A53
PERSONAL INCOME A N D SAVING
Billions of c u r r e n t dollars; quarterly data are at seasonally a d j u s t e d annual rates. E x c e p t i o n s n o t e d .
1983
1982
Account
1982
1981
1980
Q2
Q3
Q4
Ql
Q2'
PERSONAL INCOME AND SAVING
1 Total personal income
2,165.3
2,435.0
2,578.6
2,563.2
2,591.3
2,632.0
2,657.7
2,715.7
2 Wage and salary disbursements
3 Commodity-producing industries
4
Manufacturing
5 Distributive industries
6 Service industries
7 Government and government enterprises
1,356.7
468.1
354.6
330.7
297.6
260.3
1,493.2
509.5
385.3
361.6
337.7
284.4
1,568.1
509.2
383.8
378.8
374.1
306.0
1,563.8
513.7
386.8
378.1
369.1
303.0
1,579.8
508.9
384.8
381.9
381.2
307.7
1,586.0
499.5
377.4
383.5
388.5
314.5
1,610.7
508.6
385.4
386.4
396.4
319.2
1,648.5
522.3
397.4
394.3
407.3
324.6
128.0
117.5
95.6
21.8
31.5
56.8
266.0
297.6
154.2
143.5
120.2
89.7
30.5
41.4
62.8
341.3
337.2
182.0
156.6
109.0
87.5
21.5
49.9
66.4
366.2
374.6
204.5
155.4
104.9
88.1
16.8
49.0
65.6
371.9
364.2
197.3
158.2
103.6
87.8
15.8
50.9
66.4
364.8
380.4
209.3
160.4
116.2
90.2
26.0
52.3
67.9
363.1
399.0
216.5
164.3
120.6
98.4
22.2
54.1
68.8
357.2
398.5
217.4
170.1
129.7
106.1
23.6
54.8
69.3
356.7
405.2
221.1
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income'
Business and professional1
Farm1
Rental income of persons 2
Dividends
Personal interest income
Transfer payments
Old-age survivors, disability, and health insurance benefits...
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
88.7
104.6
112.0
111.7
112.7
112.9
116.5
118.6
2,165.3
2,435.0
2,578.6
2,563.2
2,591.3
2,632.0
2,657.7
2,715.7
336.5
387.4
402.1
404.2
399.8
404.1
401.8
412.7
20 EQUALS: Disposable personal income
1,828.9
2,047.6
2,176.5
2,159.0
2,191.5
2,227.8
2,255.9
2,303.0
21
LESS: Personal outlays
1,718.7
1,912.4
2,051.1
2,031.9
2,068.4
2,107.0
2,134.2
2,210.8
22 EQUALS: Personal saving
110.2
135.3
125.4
127.1
123.0
120.8
121.7
92.2
6,478
4,092
4,487
6.0
6,584
4,161
4,587
6.6
6,399
4,179
4,567
5.8
6,425
4,180
4,574
5.9
6,393
4,178
4,558
5.6
6,355
4,205
4,576
5.4
6,382
4,226
4,599
5.4
6,511
4,316
4,626
4.0
405.9
483.8
405.8
439.5
397.9
351.3
398.5
421.1
524.9
123.0
38.9
-9.0
526.6
120.8
37.5
-10.3
541.5
121.7
48.9
-1.7
533.0
92.2
67.7
-9.8
19
LESS: Personal tax and nontax payments
MEMO:
Per capita (1972 dollars)
23 Gross national product
24 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
27 Gross saving
28
29
30
31
Gross private saving
Personal saving
Undistributed corporate profits'
Corporate inventory valuation adjustment
Capital consumption allowances
32 Corporate
33 Noncorporate
34 Wage accruals less disbursements
35 Government surplus, or deficit ( - ) , national income and
product accounts
36 Federal
37 State and local
435.4
110.2
32.1
-42.9
509.6
135.3
44.8
-23.6
521.6
125.4
37.0
-8.4
520.7
127.1
37.5
-8.5
179.3
113.8
.0
202.9
126.6
.0
222.0
137.2
.0
220.2
135.9
.0
224.5
138.5
.0
227.7
140.5
.0
228.3
142.6
.0
230.0
143.1
.0
-30.7
-61.3
30.6
-26.9
-62.2
35.3
-115.8
-147.1
31.3
-81.2
-113.2
32.0
-127.0
-158.3
31.3
-175.3
-208.2
32.9
-142.9
-183.3
40.4
-111.9
-163.7
51.8
1.2
1.1
.0
.0
.0
.0
.0
.0
39 Gross investment
408.2
478.9
406.2
441.3
400.5
355.5
397.4
415.9
40 Gross private domestic
41 Net foreign
401.9
6.3
474.9
4.0
414.5
-8.3
432.5
8.7
425.3
-24.8
377.4
-21.9
404.1
-6.7
451.8
-35.8
2.3
-4.9
.5
1.7
2.5
4.2
-1.2
-5.2
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.
SOURCE. Survey of Current Business (Department of Commerce).
A54
3.10
International Statistics • September 1983
U.S. INTERNATIONAL TRANSACTIONS
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted.1
1982
Item credits or debits
1980
1983
1982
1981
Q2
Q1
Q3
Q4
Ql"
421
4,592
-11,211
564
259
1,434
2,218
-6,596
-8,143
-6,621
-5,546
-3,045
-2,961
-25,544
224,237
-249,781
-2,286
29,570
5,738
-28,067
237,019
-265,086
-1,355
33,484
7,462
-36,389
211,217
-247,606
179
27,304
5,729
-6,103
55,636
-61,739
-51
6,937
1,842
-5,854
54,996
-60,850
201
7,536
1,353
-13,078
52,241
-65,319
54
6,821
1,349
-11,354
48,344
-59,698
-26
6,008
1,182
-8,738
49,563
-58,301
702
5,235
1,319
-2,347
-4,709
-2,382
-4,549
-2,621
-5,413
-603
-1,458
-702
-1,100
-656
-1,086
-661
-1,770
-644
-919
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
-5,140
-5,078
-5,732
-807
-1,489
-2,502
-934
-1,060
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
-8,155
0
-16
-1,667
-6,472
-5,175
0
-1,823
-2,491
-861
-4,965
0
-1,371
-2,552
-1,041
-1,089
0
-400
-547
-142
-1,132
0
-241
-814
-77
-794
0
-434
-459
99
-1,949
0
-297
-732
-920
-787
0
-98
-2,139
1,450
17 Change in U.S. private assets abroad (increase, - ) 3
18
Bank-reported claims
19
Nonbank-reported claims
20
U.S. purchase of foreign securities, net
21
U.S. direct investments abroad, net 3
-72,757
-46,838
-3,174
-3,524
-19,221
-100,348
-83,851
-1,181
-5,636
-9,680
-107,348
-109,346
6,976
-7,986
3,008
-29,560
-32,551
3,918
-581
-346
-38,313
-38,653
-277
-546
1,163
-22,803
-20,631
998
-3,331
161
-16,670
-17,511
2,337
-3,527
2,031
-19,936
-17,483
n.a.
-2,032
-421
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
15,566
9,708
2,187
685
-159
3,145
5,430
4,983
1,289
-28
-3,479
2,665
3,172
5,759
-670
504
-2,054
-367
-3,061
-1,327
-301
75
-1,697
189
1,930
-2,094
258
459
3,271
36
2,642
4,834
-71
-160
-1,911
-50
1,661
4,346
-556
130
-1,717
-542
-37
3,166
-568
-390
-1,898
-347
29
30
31
32
33
28 Change in foreign private assets in the United States
(increase, +) 3
U.S. bank-reported liabilities
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net
Foreign purchases of other U.S. securities, net
Foreign direct investments in the United States, net 3
39,356
10,743
6,845
2,645
5,457
13,666
75,248
42,154
942
2,982
7,171
21,998
84,693
64,263
-3,104
7,004
6,141
10,390
30,185
25,685
-182
1,288
1,313
2,081
29,683
24,778
-2,517
2,095
2,434
2,893
14,971
10,977
-425
1,364
420
2,635
9,856
2,823
20
2,257
1,975
2,781
17,311
9,853
n.a.
2,947
2,887
1,624
34 Allocation of SDRs
35 Discrepancy
1,152
29,556
1,093
24,238
0
0
3,768
-729
0
7,887
881
0
41,390
15,082
-1,190
0
14,657
1,042
0
7,554
-340
29,556
24,238
41,390
4,497
7,006
16,272
13,615
7,894
-8,155
-5,175
-4,965
-1,089
-1,132
-794
-1,949
-787
14,881
5,458
2,668
-3,136
1,471
2,802
1,531
353
12,769
13,581
7,420
5,190
3,024
368
-1,162
-1,442
756
680
644
93
125
267
158
42
1 Balance on current account
3
4
5
6
7
8
9
10
37
Merchandise trade balance 2
Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net 3
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)
Statistical discrepancy in recorded data before seasonal
adjustment
MEMO'.
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in the United States
(increase, +)
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
1. 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
(Department of Commerce).
Business
Trade and Reserve and Official Assets
3.11
A55
U.S. FOREIGN TRADE
Millions of dollars; m o n t h l y d a t a are seasonally a d j u s t e d .
1983
Item
1980
1981
1982
Jan.
1 EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments
220,626
233,677
212,193
Mar.
Feb.
17,393
Apr.
16,752
16,326
May
16,074
June
15,566
July
17,008
16,629
2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded
warehouses
244,871
261,305
243,952
20,021
19,015
19,525
19,771
21,514
21,024
21,950
3 Trade balance
-24,245
-27,628
-31,759
-2,628
-2,689
-2,774
-3,697
-5,948
-4,016
-5,321
NOTE. The data through 1981 in this table are reported by the Bureau of Census
data of a free-alongside-ship (f.a.s.) value basis—that is, value at the port of
export. Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in
the Census basis trade data; this adjustment has been made for all data shown in
the table. Beginning with 1982 data, the value of imports are on a customs
valuation basis.
The Census basis data differ from merchandise trade data shown in table 3.10,
U.S. International Transactions Summary, for reasons of coverage and timing. On
the export side, the largest adjustments are: (1) the addition of exports to Canada
3.12
not covered in Census statistics, and (2) the exclusion of military sales (which are
combined with other military transactions and reported separately in the "service
account" in table 3.10, line 6). On the import side, additions are made for gold,
ship purchases, imports of electricity from Canada, and other transactions;
military payments are excluded and shown separately as indicated above.
SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade"
(Department of Commerce, Bureau of the Census).
U.S. RESERVE ASSETS
Millions of dollars, e n d of period
1983
Type
1980
1981
1982
Feb.
Mar.
Apr.
May
June
July
Aug.
1 Total
26,756
30,075
33,958
34,233
34,261
34,173
33,931
33,876
33,373
32,626
2 Gold stock, including Exchange Stabilization Fund1
11,160
11,151
11,148
11,139
11,138
11,132
11,132
11,131
11,131
11,128
2,610
4,095
5,250
5,284
5,229
5,192
5,525
5,478
5,496
5,543
3 Special drawing rights2 3
4 Reserve position in International Monetary Fund 2
5 Foreign currencies 4 5
2,852
5,055
7,348
8,594
9,293
9,284
9,424
9,413
9,475
9,278
10,134
9,774
10,212
9,216
8,601
8,565
7,850
7,854
7,271
6,657
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based
on a weighted average of exchange rates for the currencies of member countries.
From July 1974 through December 1980, 16 currencies were used; from January
1981, 5 currencies have been used. The U.S. SDR holdings and reserve position in
the IMF also are valued on this basis beginning July 1974.
3.13
3. Includes allocations by the International Monetary Fund of SDRs as follows:
$867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1,
1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093
million on Jan. 1, 1981; plus transactions in SDRs.
4. Valued at current market exchange rates.
5. Includes U.S. government securities held under repurchase agreement
against receipt of foreign currencies in 1979 and 1980.
FOREIGN OFFICIAL ASSETS H E L D AT FEDERAL RESERVE B A N K S
Millions of dollars, end of period
1983
Assets
1980
1981
1982
Feb.
1 Deposits
Assets held in custody
2 U.S. Treasury securities'
3 Earmarked gold2
Apr.
May
June
July
Aug.
411
505
328
352
424
322
445
279
369
248
102,417
14,965
104,680
14,804
112,544
14,716
116,428
14,752
114,999
14,726
114,880
14,723
115,401
14,727
114,499
14,724
118,105
14,727
113,476
14,693
1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S.
Treasury securities payable in dollars and in foreign currencies.
2. Earmarked gold is valued at $42.22 per fine troy ounce.
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.
A56
3.14
International Statistics • September 1983
FOREIGN 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
1983
1982
Asset account
1979
1980
1981
Dec/
Jan.
Feb.
Mar.
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
8
9
Public borrowers
Nonbank foreigners
10 Other assets
11 Total payable in U.S. dollars
12 Claims on United States
13 Parent bank
14 Other
15 Claims on foreigners
16 Other branches of parent bank
17 Banks
18 Public borrowers
19 Nonbank foreigners
20 Other assets
364,409
401,135
462,847
469,367
462,112
458,201
453,219
452,173
465,886
32,302
25,929
6,373
28,460
20,202
8,258
63,743
43,267
20,476
91,768
61,629
30,139
89,695
59,694
30,001
87,525
58,500
29,025
93,718
63,342'
30,376'
91,262
61,792
29,470
91,888
62,596
29,292
97,698
65,644
32,054
317,330
79,662
123,420
26,097
88,151
354,960
77,019
146,448
28,033
103,460
378,954
87,821
150,763
28,197
112,173
358,195
91,143
133,577
24.090
109,385
352,906
89,488
131,028
24,602
107,788
351,407
89,772
129,169
24,734
107,732
352,416
89,083
132,108
24,742
106,483
343,994
84,839
127,290
25,114
106,751
342,240
86,488
123,945
25,547
106,260
350,013
88,297
130,047
25,444
106,225
465,130
14,777
17,715
20,150
19,404
19,511
19,269
18,996
17,963
18,045
18,175
267,713
291,798
350,735
361,647
354,749
350,562
356,474
344,541
343,771
357,312
31,171
25,632
5,539
27,191
19,896
7,295
62,142
42,721
19,421
90,048
60,973
29,075
88,001
58,926
29,075
85,901
57,799
28,102
91,281
62,409'
28.872'
88,985
61,156
27,829
89,532
61,797
27,735
95,235
64,315
30,920
229,120
61,525
96,261
21,629
49,705
255,391
58,541
117,342
23,491
56,017
276,937
69,398
122,110
22,877
62,552
259,583
73,512
106,275
18,374
61,422
254,926
71,188
103,596
18,785
61,357
253,037
71,937
100,797
18,962
61,341
253,585
70,768
103,472
18,795
60,550
245,022
66,337
98,603
18,941
61,141
243,838
67,839
95,961
19,001
61,037
251,392
69,448
102,725
18,708
60,511
7,422
9,216
11,656
12,016
11,822
11,624
11,608
10,534
10,401
10,685
United Kingdom
21 Total, all currencies
22 Claims on United States
23
Parent bank
24
Other
25 Claims on foreigners
26
Other branches of parent bank
27
Banks
28
Public borrowers
29 Nonbank foreigners
130,873
144,717
157,229
161,067
157,464
156,577
156,022
152,408
151,821
155,817
11,117
9,338
1,779
7,509
5,275
2,234
11,823
7,885
3,938
27,354
23,017
4,337
27,175
22,539
4,636
26,423
21,962
4,461
26,259
21,912
4,347
25,139
20,657
4,482
24,847
20,456
4,391
26,465
21,384
5,081
115,123
34,291
51,343
4,919
24,570
131,142
34,760
58,741
6,688
30,953
138,888
41,367
56,315
7,490
33,716
127,734
37,000
50,767
6,240
33,727
124,354
34,959
49,497
6,421
33,477
124,214
35,437
48,580
6,592
33,605
123,993
36,171
48,976
6,337
32,509
121,727
32,973
48,301
6,591
33,862
121,187
33,361
47,623
6,599
33,604
123,835
35,787
48,328
6,570
33,150
4,633
6,066
6,518
5,979
5,935
5,940
5,770
5,542
5,787
5,517
31 Total payable in U.S. dollars
94,287
99,699
115,188
123,740
120,233
119,273
118,891
113,170
112,585
118,023
32 Claims on United States
10,746
9,297
1,449
7,116
5,229
1,887
11,246
7,721
3,525
26,761
22,756
4,005
26,581
22,250
4,331
25,829
21,700
4,129
25,597
21,626
3,971
24,374
20,354
4,020
24,044
20,092
3,952
25,536
21,017
4,519
81,294
28,928
36,760
3,319
12,287
89,723
28,268
42,073
4,911
14,471
99,850
35,439
40,703
5,595
18,113
92,228
31,648
36,717
4,329
19,534
89,137
29,380
35,616
4,600
19,541
88,973
29,918
34,499
4,789
19,767
88,797
30,589
34,442
4,413
19,353
84,981
27,131
33,228
4,522
20,100
84,779
27,579
32,801
4,497
19,902
88,587
30,025
34,417
4,547
19,598
2,247
2,860
4,092
4,751
4,515
4,471
4,497
3,815
3,762
3,900
30 Other assets
34
Other
35 Claims on foreigners
36
Other branches of parent bank
37
Banks
38
Public borrowers
39
Nonbank foreigners
40 Other assets
Bahamas and Caymans
108,977
123,837
149,108
145,091
142,115
138,730
145,663
142,049
140,941
146,720
42 Claims on United States
43
Parent bank
44
Other
19,124
15,196
3,928
17,751
12,631
5,120
46,546
31,643
14,903
59,403
34,653
24,750
57,302
32,958
24,344
56,225
32,839
23,386
62,576
37,967'
24,609'
61,417
37,971
23,446
62,526
39,031
23,495
66,176
40,318
25,858
45 Claims on foreigners
46
Other branches of parent bank
47
Banks
48
Public borrowers
49
Nonbank foreigners
86,718
9,689
43,189
12,905
20,935
101,926
13,342
54,861
12,577
21,146
98,057
12,951
55,151
10,010
19,945
81,387
18,720
42,636
6,413
13,618
80,722
20,091
40,770
6,434
13,427
78,527
19,730
39,101
6,494
13,202
79,150
17,512
42,347
6,540
12,751
76,959
18,295
39,607
6,388
12,669
74,759
18,537
37,531
6,170
12,521
76,947
16,658
41,746
5,936
12,607
41 Total, all currencies
50 Other assets
51 Total payable in U.S. dollars
3,135
4,160
4,505
4,301
4,091
3,978
3,937
3,673
3,656
3,597
102,368
117,654
143,743
139,540
136,278
132,884
139,549
136,115
135,112
140,629
Overseas Branches
3.14
A57
Continued
1983
1982
Liability account
1979
1980
1981
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
Nonbanks
56
57 To foreigners
58 Other branches of parent bank
59
Banks
60
Official institutions
Nonbank foreigners
61
364,409
401,135
462,847
469,367
462,112
458,201
465,130
453,219
452,173
465,886
66,689
24,533
13,968
28,188
91,079
39,286
14,473
37,275
137,767
56,344
19,197
62,226
178,878
75,521
33,368
69,989
178,390
79,893
32,797
65,700
178,244
79,447
32,650
66,147
188,828
84,966
34,006
69,856
184,017
81,050
32,687
70,280
183,793
80,786
31,815
71,192
191,557
84,203
33,994
73,360
283,510
77,640
122,922
35,668
47,280
295,411
75,773
132,116
32,473
55,049
305,630
86,396
124,906
25,997
68,331
270,653
90,148
96,739
19,614
64,152
265,278
88,993
92,875
20,246
63,164
261,672
88,555
90,244
19,739
63,134
258,524
86,900
91,746
17,808
62,070
251,273
84,347
86,950
18,384
61,592
250,791
85,313
84,436
17,189
63,853
255,962
86,542
87,423
18,621
63,376
14,210
14,690
19,450
19,836
18,444
18,285
17,778
17,929
17,589
18,367
273,857
303,281
364,447
378,938
370,202
367,606
374,432
363,515
363,251
275,928
64 To United States
65
Parent bank
66
Other banks in United States
67
Nonbanks
64,530
23,403
13,771
27,356
88,157
37,528
14,203
36,426
134,700
54,492
18,883
61,325
175,391
73,195
33,003
69,193
174,765
77,621
32,273
64,871
174,571
77,114
32,223
65,234
185,330
82,655
33,566
69,109
180,596
78,968
32,226
69,402
180,017
78,520
31,222
70,275
187,873
82,006
33,564
72,303
68 To foreigners
69
Other branches of parent bank
70
Banks
71
Official institutions
72 Nonbank foreigners
201,514
60,551
80,691
29,048
31,224
206,883
58,172
87,497
24,697
36,517
217,602
69,299
79,594
20,288
48,421
192,323
72,878
57,355
15,055
47,035
185,298
71,100
52,225
15,940
46,033
183,656
70,887
51,234
15,381
46,154
179,704
68,999
52,156
13,536
45,013
173,533
66,387
48,428
13,801
44,917
174,154
66,972
47,325
12,631
47,226
178,701
68,324
50,186
13,912
46,279
7,813
8,241
12,145
11,224
10,139
9,379
9,398
9,386
9,080
9,354
62 Other liabilities
63 Total payable in U.S. dollars
73 Other liabilities
United Kingdom
74 Total, all currencies
75 To United States
76
Parent bank
77
Other banks in United States
Nonbanks
78
79 To foreigners
80 Other branches of parent bank
81
Banks
87 Official institutions
Nonbank foreigners
83
130,873
144,717
157,229
161,067
157,464
156,577
156,022
152,408
151,821
155,817
20,986
3,104
7,693
10,189
21,785
4,225
5,716
11,844
38,022
5,444
7,502
25,076
53,954
13,091
12,205
28,658
52,650
14,287
12,343
26,020
51,927
14,080
12,198
25,649
55,309
14,616
13,172
27,521
52,883
14,343
12,119
26,421
53,603
13,907
12,773
26,923
57,138
14,461
13,689
28,988
104,032
12,567
47,620
24,202
19,643
117,438
15,384
56,262
21,412
24,380
112,255
16,545
51,336
16,517
27,857
99,567
18,361
44,020
11,504
25,682
97,827
19,343
41,073
12,377
25,034
97,515
21,008
39,892
12,025
24,590
93,835
19,653
40,867
10,252
23,063
92,460
19,470
38,960
10,520
23,510
91,071
20,235
37,594
9,413
23,829
91,545
18,376
38,238
10,848
24,083
5,855
5,494
6,952
7,546
6,987
7,135
6,878
7,065
7,147
7,134
85 Total payable in U.S. dollars
95,449
103,440
120,277
130,261
126,286
126,007
126,088
120,683
120,301
124,705
86 To United States
87
Parent bank
88
Other banks in United States
Nonbanks
89
20,552
3,054
7,651
9,847
21,080
4,078
5,626
11,376
37,332
5,350
7,249
24,733
53,029
12,814
12,026
28,189
51,808
14,105
12,128
25,575
50,977
13,859
12,041
25,077
54,520
14,476
12,987
27,057
51,993
14,212
11,929
25,852
52,473
13,696
12,439
26,338
56,092
14,308
13,499
28,285
90 To foreigners
91
Other branches of parent bank
9?
Banks
93
Official institutions
Nonbank foreigners
94
72,397
8,446
29,424
20,192
14,335
79,636
10,474
35,388
17,024
16,750
79,034
12,048
32,298
13,612
21,076
73,477
14,300
28,810
9,668
20,699
71,000
15,081
25,177
10,657
20,085
71,994
16,709
25,563
10,121
19,601
68,309
14,918
26,395
8,419
18,577
65,485
14,815
23,821
8,474
18,375
64,621
15,636
22,960
7,306
18,719
65,428
14,117
23,895
8,786
18,630
2,500
2,724
3,911
3,755
3,478
3,036
3,259
3,205
3,207
3,185
84 Other liabilities
95 Other liabilities
Bahamas and Caymans
108,977
123,837
149,108
145,091
142,115
138,730
145,663
142,049
140,941
146,720
97 To United States
98
Parent bank
99 Other banks in United States
Nonbanks
100
37,719
15,267
5,204
17,248
59,666
28,181
7,379
24,106
85,759
39,451
10,474
35,834
104,385
47,041
18,466
38,878
104,398
50,441
17,561
36,396
104,520
49,634
17,328
37,558
111,424
55,620
17,328
38,476
109,644
52,009
17,451
40,184
108,789
51,087
16,143
41,559
111,494
53,324
17,008
41,162
101 To foreigners
102 Other branches of parent bank
103 Banks
104 Official institutions
105 Nonbank foreigners
68,598
20,875
33,631
4,866
9,226
61,218
17,040
29,895
4,361
9,922
60,012
20,641
23,202
3,498
12,671
38,249
15,796
10,166
1,967
10,320
35,470
14,258
9,279
1,849
10,084
31,858
11,808
8,451
1,720
9,879
32,030
11,536
8,999
1,678
9,817
30,187
10,515
8,126
1,710
9,836
29,976
10,272
7,618
1,734
10,352
33,151
12,020
9,165
1,796
10,170
96 Total, all currencies
106 Other liabilities
107 Total payable in U.S. dollars
2,660
2,953
3,337
2,457
2,247
2,352
2,209
2,218
2,176
2,075
103,460
119,657
145,284
141,843
138,702
135,377
142,465
138,910
137,845
143,430
A58
3.15
International Statistics • September 1983
S E L E C T E D U . S . L I A B I L I T I E S TO F O R E I G N O F F I C I A L I N S T I T U T I O N S
Millions of dollars, end of period
1983
Item
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 certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U.S. Treasury securities5
By area
Western Europe1
Canada
Latin America and Caribbean
Asia
Africa
Other countries6
1981'
1982'
Feb.'
Mar.'
Apr.'
May
June
July?
169,926
172,598
174,986
172,739
172,915
173,335
175,054
175,217
176,196
26,928
52,389
24,918
46,658
23,882
50,432
21,464
49,954
22,980
47,917
22,821
48,399
24,111
49,281
24,324
49,068
21,957
53,581
53,186
11,791
25,632
67,684
8,750
24,588
67,704
8,750
24,218
69,272
7,950
24,099
70,233
7,950
23,835
70,554
7,950
23,611
70,585
7,950
23,127
71,029
7,950
22,846
70,121
7,950
22,587
65,707
2,403
6,953
91,791
1,829
1,243
61,242
2,070
6,032
95,993
1,350
5,911
62,262
2,430
7,138
95,366
1,716
6,074
61,882
2,754
6,099
95,723
1,327
4,954
61,470
2,942
5,576
96,850
1,162
4,915
61,923
2,770
6,281
95,377
1,208
5,776
62,994
3,613
5,918
95,581
1,203
5,745
63,649
3,741
6,509
94,748
1,076
5,494
66,176
3,809
5,421
94,264
1,138
5,388
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.
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness (including those payable in foreign currencies through 1974) and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes
bonds and notes payable in foreign currencies.
3.16
Jan.'
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.
L I A B I L I T I E S TO A N D C L A I M S O N F O R E I G N E R S Reported by Banks in the United States
Payable in Foreign Currencies
Millions of dollars, e n d of period
1982
Item
1979
1980
Sept.
1 Banks' own liabilities
2 Banks' own claims
3 Deposits
4 Other claims
5 Claims of banks' domestic customers 1
1. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the accounts
of their domestic customers.
1,918
2,419
994
1,425
580
3,748
4,206
2,507
1,699
962
1983
1981
3,523
4,980
3,398
1,582
971
4,575
6,350'
3,429
2,921'
506
Dec.'
4,760
7,700
4,245
3,455
676
Mar.
5,072
8,101
3,725
4,376
637
June?
5,804
7,858
3,878
3,980
684
NOTE. Data on claims exclude foreign currencies held by U.S. monetary
authorities,
Nonbank-Reported
3.17
L I A B I L I T I E S 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
1983
Holder and type of liability
1980
1981A
1982
Jan.
1 AH foreigners
205,297
244,043
305,368'
Feb.
Mar.
June
July?
316,722
321,072
327,104
238,922
15,976
72,838
22,954
127,154
Apr.
May'
308,359
304,851'
304,925'
235,031'
16,495
68,491
24,566
125,479'
225,721
15,606
67,495
21,877
120,743
232,881
16,935
69,772
24,002
122,173
236,932
17,306
73,392
25,500
120,735
316,831'
124,791
23,462
15,076
17,583
68,670
163,738
19,628
28,977r
17,632'
97,500
225,427'
15,959'
67,093'
23,870'
118,505'
219,433'
15,988'
64,347
23,086'
116,011'
219,939'
17,405'
65,321'
20,366'
116,846'
80,506
57,595
80,305
55,316
79,941
55,614
85,419
62,137
84,987
61,904
81,800
58,748
82,638
60,087
83,841
60,508
84,139
61,245
88,182
65,358
20,079
2,832
19,019
5,970
20,625
3,702
19,352
3,930
19,205
3,877
18,830
4,222
18,823
3,728
19,187
4,146
18,731
4,163
17,884
4,941
2,344
2,721
4,597
6,611
5,969
3,945
5,917
5,260
5,456
5,698
444
146
85
212
638
262
58
318
1,584
106
1,339
139
1,787
284
1,333
170
1,695
195
1,367
134
1,300
221
913
166
2,542
252
2,031
259
2,925
267
2,447
211
3,048
165
2,483
400
4,050
307
3,010
733
1,900
254
2,083
541
3,013
1,621
4,824
3,603
4,275
3,153
2,645
1,501
3,375
2,230
2,335
1,280
2,408
1,538
1,648
678
1,646
0
1,542
0
1,392
0
1,221
0
1,122
0
1,144
0
1,145
0
1,055
0
870
0
970
0
20 Official institutions8
86,624
79,318
71,576'
74,314'
71,419'
70,897
71,220
73,391
73,393
75,538
71 Banks' own liabilities
Demand deposits
27
73 Time deposits 1
24 Other 2
17,826
3,771
3,612
10,443
17,094
2,564
4,230
10,300
16,571'
1,981
5,504'
9,087'
16,451'
2,168
4,907
9,376'
14,662'
2,063
5,485'
7,114'
16,443
2,287
5,331
8,825
16,188
2,322
6,039
7,826
17,365
2,058
6,374
8,933
17,370
2,198
6,380
8,792
15,894
1,958
6,559
7,377
75 Banks' custody liabilities4
26
U.S. Treasury bills and certificates 5
27 Other negotiable and readily transferable
instruments 6
28 Other
68,798
56,243
62,224
52,389
55,006
46,658
57,864
50,432
56,756
49,954
54,454
47,917
55,032
48,399
56,026
49,281
56,023
49,068
59,644
53,581
12,501
54
9,787
47
8,319
28
7,396
35
6,769
33
6,512
25
6,618
15
6,724
22
6,937
17
6,038
25
29 Banks9
96,415
136,030
185,081'
178,471'
181,114'
193,415'
183,100
188,605
192,041
195,273
30 Banks' own liabilities
31
Unaffiliated foreign banks
37
Demand deposits
33
Time deposits 1
Other 2
34
35
Own foreign offices 3
90,456
21,786
14,188
1,703
5,895
68,670
124,312
26,812
11,614
8,720'
6,477'
97,500
168,658'
50,153'
8,675'
28,249'
13,228'
118,505'
161,644'
45,632'
8,154'
25,530'
11,948'
116,011'
163,102'
46,256'
9,627
25,318'
11,312'
116,846'
175,038'
49,560
8,264
27,617
13,679
125,479'
164,647
43,904
7,601
24,329
11,974
120,743
169,167
46,994
8,832
25,123
13,039
122,173
172,586
51,850
9,125
27,994
14,730
120,735
174,853
47,699
8,271
26,359
13,069
127,154
5,959
623
11,718
1,687
16,423'
5,809
16,827'
6,292
18,012
6,791
18,377
7,122
18,453
7,475
19,438
7,824
19,456
8,396
20,420
8,676
2,748
2,588
4,421
5,611
7,848'
2,766
7,702'
2,833
8,345
2,876
8,265
2,990
8,041
2,937
8,333
3,282
7,771
3,289
7,750
3,995
40 Other foreigners
19,914
25,974
44,113'
45,455'
46,423'
48,573
48,122
49,466
50,181
50,595
41 Banks' own liabilities
Demand deposits
42
43 Time deposits
44 Other 2
16,065
5,356
9,676
1,033
21,694
5,189
15,969
537
38,615'
5,197
32,001'
1,416
39,552'
5,382'
32,576'
1,593'
40,480'
5,521'
33,152'
1,807
42,250
5,724
34,631
1,896
42,344
5,430
35,095
1,819
43,425
5,777
35,828
1,819
43,928
5,817
36,534
1,578
44,126
5,440
36,910
1,775
3,849
474
4,279
699
5,499'
1,525
5,903'
1,810
5,943
2,006
6,323
2,207
5,778
1,983
6,041
2,123
6,253
2,242
6,470
2,473
3,185
190
3,268
312
3,065'
908
3,032'
1,062
2,970
968
2,909
1,207
3,018
776
3,076
842
3,154
857
3,126
920
10,745
10,747
14,296
13,367
11,611
11,383
11,604
11,555
11,589
11,057
7 Banks' own liabilities
3 Demand deposits
4 Time deposits 1
5 Other 2
6 Own foreign offices 3
7 Banks' custody liabilities4
8
U.S. Treasury bills and certificates 5
9 Other negotiable and readily transferable
instruments 6
10 Other
11 Nonmonetary international and regional
organizations7
1? Banks' own liabilities
13 Demand deposits
14 Time deposits 1
15 Other 2
16 Banks' custody liabilities4
17 U.S. Treasury bills and certificates
18 Other negotiable and readily transferable
instruments 6
19 Other
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
U.S. Treasury bills and certificates
46
Other negotiable and readily transferable
47
instruments 6
48 Other
49 MEMO: Negotiable time certificates of
deposit in custody for foreigners
1. Excludes negotiable time certificates of deposit, which are included in
"Other negotiable and readily transferable instruments."
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due to head office or parent foreign bank, and
foreign branches, agencies or wholly owned subsidiaries of head office or parent
foreign bank.
4. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
5. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments, and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."
• Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
A60
3.17
International Statistics • September 1983
Continued
1983
Area and country
1980
1981A
1982
Jan.
Feb.
Mar.
Apr.
May'
June
July?
1 Total
205,297
244,043
305,368'
304,851'
304,925'
316,831'
308,359
316,722
321,072
327,104
2 Foreign countries
202,953
241,321
300,771'
298,240'
298,956'
312,886'
302,442
311,462
315,616
321,406
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
91,309
596
4,117
333
296
8,486
7,665
463
7,290
2,823
1,457
354
916
1,545
18,720
518
28,287
375
6,526
49
493
117,705'
512
2,517
509
748
8,169
5,375
537
5,674
3,362
1,567
388
1,405
1,380
29,06C
296
48,169
499
6,913'
50
573
118,764
467
2,270
996
473
8,462
5,807
589
4,938
3,770
1,476
398
1,316
1,315
28,999'
190
50,339
470
6,030'
47
412
116,195'
513
2,295
1,197
369
7,7''0 r
6,227
595
4,514
3,196
1,407
370
1,524
1,645
30,263
246'
47,294'
452
5,940'
41
335
116,457
604
2,726
765
408
6,780
6,458
597
4,312
3,704
1,061
363
1,640
1,379
30,433
254
47,703
491
6,365
40
374
111,233
576
2,800
849
437
7,091
3,437
670
5,021
3,968
1,565
346
1,484
1,210
29,390
231
44,980
504
6,215
44
413
115,950
574
2,608
732
280
6,647
3,971
648
5,573
3,543
2,227
427
1,621
1,356
29,781
248
48,762
549
6,023
53
327
118,659
640
2,843
616
447
6,766
3,423
567
6,634
3,246
1,719
350
1,615
1,493
29,941
198
50,471
504
6,666
71
448
118,949
610
2,955
612
292
8,838
3,695
589
7,790
3,395
900
338
1,693
1,407
30,762
224
48,017
427
5,867
74
465
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
10,031
10,250
12,217
10,990
13,618
15,159
14,492
16,284
16,354
16,676
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
Brazil
29
30
British West Indies
31
Chile
32
Colombia
33
Cuba
34
Ecuador
35
Guatemala
36 Jamaica
37
Mexico
38
Netherlands Antilles
39
Panama
40
Peru
41
Uruguay
42
Venezuela
43
Other Latin America and Caribbean
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
85,159
2,445
34,856
765
1,568
17,794
664
2,993
9
434
479
87
7,170
3,182
4,857
694
367
4,245
2,548
112,939'
3,577
44,040'
1,572
2,014'
26,366'
1,626
2,594'
9
453
670
126
7,967
3,597
4,738
1,147
759
8,392'
3,291
110,603'
4,833
42,930'
1,989
1,916
24,637'
1,341
2,385'
10
472
682
115
7,930
3,762
4,923
1,052
726
7,649
3,251
111,184'
4,785'
45,249'
1,913'
1,926'
24,114'
1,280
2,336
10
499
669
103
7,380
3,474
4,943'
903
817
7,671
3,113'
120,591'
4,686'
49,524'
2,124
1,948
27,520
1,084
1,887
9
575
675
134
8,118
3,416
5,617
927
818
8,146
3,382'
117,708
4,603
49,086
2,128
2,474
23,889
1,196
1,820
12
534
666
107
8,351
3,426
5,620
966
852
8,585
3,394
118,260
4,746
49,682
1,821
2,483
22,943
1,345
1,873
8
658
711
108
8,536
3,622
5,749
1,005
919
8,563
3,487
120,385
4,763
49,708
2,057
2,735
24,153
1,355
1,719
13
581
705
130
9,027
3,514
5,648
1,148
955
8,637
3,537
124,359
5,017
54,356
2,362
2,680
24,422
1,385
1,618
11
532
691
108
9,141
3,434
5,615
1,055
958
7,700
3,274
44 Asia
China
45
Mainland
Taiwan
46
47
Hong Kong
48
India
Indonesia
49
50
Israel
51 Japan
52
Korea
53
Philippines
54 Thailand
55
Middle-East oil-exporting countries 3
56
Other Asia
42,420
50,005
48,698'
48,238'
49,615'
52,545'
50,181
52,117
51,959
53,036
49
1,662
2,548
416
730
883
16,281
1,528
919
464
14,453
2,487
158
2,082
3,950
385
640
592
20,750
2,013
874
534
13,174
4,854
203
2,751'
4,465
433
849
606
16,078'
1,692
770
629
13,433
6,788'
220
3,184'
4,542
514
1,156
608
15,836
1,473
680
482
12,332
7,210
196
3,515
4,986'
962
614
515
16,613
1,458
787
529
11,705'
7,735'
208
3,549'
5,725
521
856'
985
17,022
1,418
718
488
13,159
7,895'
187
3,600
5,127
669
1,028
761
17,052
1,147
712
528
11,756
7,614
158
3,765
5,195
719
765
789
17,403
1,459
783
566
12,610
7,906
208
3,744
5,587
669
554
835
17,006
1,326
818
692
11,832
8,688
191
3,914
5,554
606
1,250
670
17,659
1,552
770
537
11,881
8,451
57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
Oil-exporting countries 4
62
63
Other Africa
5,187
485
33
288
57
3,540
783
3,180
360
32
420
26
1,395
946
3,070
398
75
277
23
1,280
1,016
3,331
500
51
276
25
1,603
877
3,103'
432'
51
317
31
1,333
939
2,910
533
57
281
33
975
1,031
2,829
466
48
299
28
1,071
916
2,876
513
50
358
32
867
1,057
2,690
461
54
355
59
743
1,018
2,916
554
57
403
55
928
919
64 Other countries
65
Australia
All other
66
1,247
950
297
1,419
1,223
196
6,143'
5,904
239'
6,314
6,080
235
5,241
5,052
190
5,224
4,933
291
5,999
5,804
195
5,974
5,778
196
5,568
5,409
159
5,470
5,250
220
67 Nonmonetary international and regional
organizations
International
68
69
Latin American regional
Other regional5
70
2,344
1,157
890
296
2,721
1,661
710
350
4,597
3,724'
517
357'
6,611
5,769
527
316
5,969
5,186
487
296
3,945
3,182
478
285
5,917
5,194
494
229
5,260
4,540
453
267
5,456
4,747
443
266
5,698
5,449
12
237
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria.
5. Asian, African, Middle Eastern, and European regional organizations,
except the Bank for International Settlements, which is included in "Other
Western Europe."
• Liabilities and claims of banks in the United States were increased, beginning
in December 1981, by the shift from foreign branches to international banking
facilities in the United States of liabilities to, and claims on, foreign residents.
Nonbank-Reported
3.18
Data
A61
B A N K S ' O W N C L A I M S O N F O R E I G N E R S Reported by Banks in the United States
Payable in U . S . Dollars
Millions of dollars, e n d of period
1983
Area and country
1980
1982'
1981A
Feb.'
Jan.
r
Mar.
May
Apr.
June
July
1 Total
172,592
251,356
355,131
358,198'
361,102
372,887'
361,187
363,392'
372,345
366,096
2 Foreign countries
172,514
251,300'
355,063
358,125'
361,025
372,818'
361,095
363,315'
372,245
366,010
32,108
236
1,621
127
460
2,958
948
256
3,364
575
227
331
993
783
1,446
145
14,917
853
179
281
1,410
49,191'
121
2,851
187
546
4,127'
940'
333
5,240
682
384
529
2,100
1,205
2,213
424
23,774'
1,224
209
377
1,725
84,629
215
5,129
554
990
6,856
1,869
452
7,515
1,425
572
950
3,739
3,034
1,639
560
45,290
1,429
378
263
1,769
83,919'
232
4,746'
609
984
7,208'
1,420'
576
7,548'
1,467'
625
848'
3,708'
3,113
1,552'
527
45,084'
1,394'
310
233
1,737'
84,638
226
5,377
650
967
7,396
1,740
653
7,011
1,358
587
841
3,227
2,693
1,497
616
46,101
1,429
321
240
1,709
88,097'
255
5,711'
1,135'
961
7,218'
1,810
652
7,142'
1,629
544
820
3,120
2,414
1,668
595
48,710'
1,393
322
310
1,690
84,325
307
5,350
1,124
844
7,342
1,273
628
7,403
1,250
628
797
3,004
2,289
1,653
608
46,072
1,432
232
392
1,697
83,517'
278'
5,479'
1,061
766
7,829
1,186'
607
6,985
1,262
683
815
3,059
2,298
1,085
578
45,793'
1,481
236
349'
1,686'
86,013
342
5,794
1,077
870
7,941
1,404
576
7,298
1,165
651
846
3,199
2,864
1,598
570
45,947
1,463
334
373
1,702
84,317
383
5,449
1,052
776
7,919
1,113
458
7,376
967
595
839
3,339
2,910
1,737
622
45,191
1,381
356
288
1,565
3 Europe
4 Austria
5 Belgium-Luxembourg
6 Denmark
7
8 France
9 Germany
10 Greece
11 Italy
1? Netherlands
13 Norway
14 Portugal
15 Spain
16 Sweden
17 Switzerland
18 Turkey
19 United Kingdom
70 Yugoslavia
71 Other Western Europe 1
77 U.S.S.R
23 Other Eastern Europe 2
4,810
9,192'
14,322
14,950'
15,633
16,505'
15,087
16,539'
16,609
16,470
75 Latin America and Caribbean
76 Argentina
77 Bahamas
7.8 Bermuda
7.9 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala3
36 Jamaica3
37 Mexico
38 Netherlands Antilles
39 Panama
40 Peru
Uruguay
41
42 Venezuela
43 Other Latin America and Caribbean
92,992
5,689
29,419
218
10,496
15,663
1,951
1,752
3
1,190
137
36
12,595
821
4,974
890
137
5,438
1,583
138,251'
7,522
43,517'
346
16,914
21,965'
3,690
2,018
3
1,531
124
62
22,409
1,076
6,787'
1,218
157
7,069
1,844
187,953
10,974
56,484
603
23,260
29,244
5,513
3,211
3
2,062
124
181
29,488
839
10,197
2,355
686
10,739
1,991
192,243'
11,324'
57,797'
615'
23,091'
32,830'
5,248'
3,248'
11
2,047'
129
206
29,450'
826'
10,091'
2,307'
692'
10,276'
2,057
193,747
11,536
56,796
536
23,754
33,560
5,420
3,162
2
2,148
120
199
30,635
913
9,324
2,335
685
10,432
2,190
198,737'
11,264
59,575'
500
23,551
35,232'
5,209
3,166
2
2,054
84
216
31,253'
970
9,801'
2,301
707
10,615
2,236
195,821
11,228
57,177
385
23,715
34,985
5,131
3,155
0
2,093
77
196
31,726
1,036
8,956
2,330
859
10,559
2,213
197,899'
11,550
58,923'
628
23,530'
33,265'
5,568
3,484
0
2,040
90
197'
31,906
824'
9,634'
2,414
824
10,749
2,275
199,071
11,243
62,576
452
23,332
32,254
5,161
3,600
0
2,038
90
207
32,318
519
8,823
2,651
820
10,848
2,139
195,450
11,112
59,327
358
23,703
30,305
5,185
3,654
2
2,018
96
209
32,846
927
9,126
2,503
831
11,142
2,106
44
39,078
49,787'
60,700
59,173'
59,186
61,479'
57,689
57,403'
62,548
61,594
195
2,469
2,247
142
245
1,172
21,361
5,697
989
876
1,432
2,252
107
2,461
4,126
123
351
1,562
26,768'
7,324
1,817
564
1,577'
3,009
214
2,288
6,668
222
342
2,028
28,302
9,407
2,571
643
3,087
4,928
198
2,235'
7,103'
230
370
1,835
26,792'
9,072'
2,464'
654'
3,428
4,792'
195
1,985
7,155
201
429
1,762
26,846
9,263
2,628
652
3,414
4,655
195
1,860
7,656
160
505
1,744
28,545
9,170
2,628
625
3,832'
4,557
239
1,786
7,487
163
541
2,036
24,979
8,768
2,627
741
3,947
4,375
219
1,613
7,552
198
563
1,926
24,757'
8,940
2,493
707
4,024
4,413'
166
1,760
7,872
230
537
2,438
27,193
9,122
2,829
788
4,452
5,162
129
1,715
7,875
245
595
1,657
27,666
9,676
2,640
689
3,981
4,726
57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries 5
63 Other
2,377
151
223
370
94
805
734
3,503
238
284
1,011
112
657
1,201
5,352
322
353
2,012
57
801
1,807
5,613'
310
342
2,066'
57
914
1,924
5,539
286
359
2,194
55
845
1,800
5,483
309
375
2,185
52
844
1,717
5,698
297
382
2,123
104
750
2,041
5,538
378
441
2,123
47
851
1,699
5,662
421
463
2,231
46
830
1,671
5,937
486
484
2,407
45
850
1,664
64 Other countries
65 Australia
66 All other
1,150
859
290
1,376
1,203
172
2,107
1,713
394
2,228
1,714
514
2,282
1,704
578
2,519
1,953
566
2,475
1,889
586
2,418'
1,756'
662'
2,342
1,722
620
2,243
1,630
613
78
56
68
73
77
69
92
77
100
85
24 Canada
45
46
47
48
49
50
51
52
53
54
55
56
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries 4
Other Asia
67 Nonmonetary international and regional
organizations6
1. Includes the Bank for International Settlements. Beginning April 1978, also
includes Eastern European countries not listed in line 23.
2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, and Romania.
3. Included in "Other Latin America and Caribbean" through March 1978.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in
"Other Western Europe."
NOTE. Data for period prior to April 1978 include claims of banks' domestic
customers on foreigners.
• Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
A62
3.19
International Statistics • September 1983
B A N K S ' O W N A N D D O M E S T I C C U S T O M E R S ' C L A I M S O N F O R E I G N E R S Reported by Banks in the
United States
Payable in U . S . Dollars
Millions of dollars, end of period
1983
Type of claim
1980
1981A
1982"
Jan."
Feb."
358,198
44,593
133,607
116,961
42,490
74,471
63,037
361,102
45,733
134,616
119,133
44,595
74,538
61,619
Mar.
Apr.
May"
361,187
47,582
135,756
117,246
44,481
72,765
60,603
363,392
47,758
139,166
115,597
43,923
71,674
60,871
June
July
1 Total
198,698
287,325"
395,731
2
3
4
5
6
7
8
172,592
20,882
65,084
50,168
8,254
41,914
36,459
251,356"
31,302
96,647
74,408"
23,276"
51,132"
48,999
355,131
45,453
127,282
120,330
43,619
76,711
62,066
26,106
885
35,968
1,378
40,600
2,780
38,256
2,126
35,473
2,631
15,574
26,352
30,763
29,250
26,708
9,648
8,238
7,056
6,880
6,133
22,714
29,517
38,338
35,153
34,826
24,468
39,862
41,210
Banks' own claims on foreigners
Foreign public borrowers
Own foreign offices'
Unaffiliated foreign banks
Deposits
Other
All other foreigners
9 Claims of banks' domestic customers 2
411,142"
372,887'
46,935
143,854"
121,170"
48,781"
72,389"
60,929"
407,818
372,345
49,226
140,139
120,207
46,780
73,428
62,772
366,096
49,710
135,757
117,503
46,114
71,389
63,125
11 Negotiable and readily transferable
12 Outstanding collections and other
13 MEMO: Customer liability on
Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States 4 . . .
38,623
1. U.S. banks: includes amounts due from own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due from head office or parent foreign bank,
and foreign branches, agencies, or wholly owned subsidiaries of head office or
parent foreign bank.
2. Assets owned by customers of the reporting bank located in the United
States that represent claims on foreigners held by reporting banks for the account
of their domestic customers.
3. Principally negotiable time certificates of deposit and bankers acceptances.
3.20
38,712
38,444
40,654
41,797
39,698
4. Includes demand and time deposits and negotiable and nonnegotiable
certificates of deposit denominated in U.S. dollars issued by banks abroad. For
description of changes in data reported by nonbanks, see July 1979 BULLETIN,
p. 550.
A Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
NOTE. Beginning April 1978, data for banks' own claims are given on a monthly
basis, but the data for claims of banks' own domestic customers are available on a
quarterly basis only.
B A N K S ' O W N C L A I M S 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
1982'
Maturity; by borrower and area
1 Total
2
3
4
5
6
7
n.a.
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
By area
Maturity of 1 year or less 1
Europe
9
Canada
10 Latin America and Caribbean
11
Africa
1?
13 All other 2
Maturity of over 1 year 1
14 Europe
15 Canada
16 Latin America and Caribbean
17
18 Africa
All other 2
19
8
1. Remaining time to maturity.
2. Includes nonmonetary international and regional organizations.
1980
1983
1981A
June
Sept.
Dec.
Mar.
June''
106,748
154,159"
202,185
214,927
226,933
227,525
230,624
82,555
9,974
72,581
24,193
10,152
14,041
116,130"
15,099
101,030"
38,030
15,650
22,380
153,223
19,480
133,743
48,962
20,077
28,885
163,294
20,082
143,212
51,634
21,977
29,657
172,756
21,297
151,459
54,177
23,108
31,068
171,888
21,602
150,286
55,637
24,623
31,014
173,029
22,409
150,619
57,596
26,161
31,435
18,715
2,723
32,034
26,686
1,757
640
28,053"
4,657"
48,599"
31,421"
2,457
943
39,813
6,6%
68,676
33,558
3,262
1,217
45,793
7,078
72,291
33,348
3,621
1,163
49,643
7,647
73,199
37,355
3,686
1,226
52,852
6,874
74,379
32,546
3,872
1,365
51,553
6,929
74,366
35,146
3,858
1,177
5,118
1,448
15,075
1,865
507
179
8,094
1,774
25,089
1,907
899
267
9,206
2,339
33,010
2,480
1,298
628
10,546
2,003
34,031
3,090
1,328
635
11,632
1,931
35,200
3,179
1,494
740
12,011
1,924
35,696
3,531
1,480
995
12,179
1,864
36,775
4,045
1,667
1,066
A Liabilities and claims of banks in the United States were increased,
beginning in December 1981, by the shift from foreign branches to international
banking facilities in the United States of liabilities to, and claims on, foreign
residents.
Nonbank-Reported
3.21
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'
Billions of dollars, end of period
1979
1983
1982
1981
Area or country
1980
June
Sept.
Dec.
Mar.
June'
Sept.'
Dec.'
Mar.
June*7
303.9
352.0
382.9
399.8
414.9'
419.3'
434.6
437.3
438.0
438.1
435.4
138.4
11.1
11.7
12.2
6.4
4.8
2.4
4.7
56.4
6.3
22.4
162.1
13.0
14.1
12.1
8.2
4.4
2.9
5.0
67.4
8.4
26.5
168.3
13.8
14.7
12.1
8.4
4.2
3.1
5.2
67.0
10.8
28.9
172.2
14.1
16.0
12.7
8.6
3.7
3.4
5.1
68.8
11.8
28.0
175.4'
13.3
15.3
12.9
9.6
4.0
3.7
5.5
70.(K
10.9
30.1
174.3'
13.2
15.9
12.5
9.0
4.0
4.1'
5.3
70.2'
11.6
28.5'
176.0
14.1
16.5
12.7
9.0
4.1
4.0
5.1
69.2
11.4
29.9
175.1
13.6
15.8
12.2
9.7
3.8
4.7
5.0
70.1
11.0
29.3
179.2
13.1
16.7
12.7
10.3
3.6
5.0
5.0
71.6
11.1
30.1
180.8
13.7
16.6
13.4
10.1
4.3
4.3
4.6
72.3
12.4
29.1
175.2
13.1
17.1
12.5
10.4
4.1
4.7
4.7
69.5
10.7
28.3
13 Other developed countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20 Spain
71 Turkey
22 Other Western Europe
7.3 South Africa
24 Australia
19.9
2.0
2.2
1.2
2.4
2.3
.7
3.5
1.4
1.4
1.3
1.3
21.6
1.9
2.3
1.4
2.8
2.6
.6
4.4
1.5
1.7
1.1
1.3
24.8
2.1
2.3
1.3
3.0
2.8
.8
5.7
1.4
1.8
1.9
1.7
26.4
2.2
2.5
1.4
2.9
3.0
1.0
5.8
1.5
1.9
2.5
1.9
28.4
1.9
2.3
1.7
2.8
3.1
1.1
6.7
1.4
2.1
2.8
2.5
30.7'
2.1
2.5
1.6
2.9'
3.2
1.2
7.2
1.6
2.1'
3.3
3.0
32.1
2.1
2.6
1.6
2.7
3.2
1.5
7.3
1.5
2.2
3.5
4.0
32.7
2.0
2.5
1.8
2.6
3.4
1.6
7.7
1.5
2.1
3.6
4.0
33.7
1.9
2.4
2.2
3.0
3.3
1.5
7.5
1.4
2.3
3.7
4.4
33.9
2.1
3.3
2.1
2.9
3.3
1.4
7.0
1.5
2.2
3.6
4.6
34.4
2.1
3.3
2.1
3.2
3.4
1.4
7.2
1.4
1.9
3.9
4.5
25 OPEC countries 2
76 Ecuador
77 Venezuela
78 Indonesia
79 Middle East countries
30 African countries
22.9
1.7
8.7
1.9
8.0
2.6
22.7
2.1
9.1
1.8
6.9
2.8
22.2
2.0
8.8
2.1
6.8
2.6
23.5
2.1
9.2
2.5
7.1
2.6
24.7'
2.2
9.9'
2.6'
7.5
2.5
25.4'
2.3
10.C
2.7
8.2
2.2
26.4
2.4
10.1
2.8
8.7
2.5
27.3
2.3
10.4
2.9
9.0
2.7
27.5
2.2
10.6
3.2
8.7
2.8
28.5
2.2
10.4
3.5
9.3
3.0
28.1
2.2
10.2
3.2
9.5
3.0
31 Non-OPEC developing countries
63.0
77.4
84.8
90.2
96.2
97.4'
103.6
103.9
106.9
107.3
108.2
5.0
15.2
2.5
2.2
12.0
1.5
3.7
7.9
16.2
3.7
2.6
15.9
1.8
3.9
8.5
17.5
4.8
2.5
18.2
1.7
3.8
9.3
17.7
5.5
2.5
20.0
1.8
4.2
9.4
19.1
5.8
2.6
21.6
2.0
4.1
lO.C
19.6'
6.0
2.3
22.9
1.9
4.1
9.7
21.3
6.4
2.6
25.1
2.5
4.0
9.2
22.4
6.2
2.8
24.9
2.6
4.3
8.9
22.9
6.3
3.1
24.5
2.6
4.0
9.0
23.1
6.0
2.9
24.9
2.4
4.2
9.4
22.5
5.8
3.2
25.0
2.6
4.3
39
40
41
4?
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.1
3.4
.2
1.3
5.4
1.0
4.2
1.5
.5
.2
4.2
.3
1.5
7.1
1.1
5.1
1.6
.6
.2
4.6
.3
1.8
8.8
1.4
5.1
1.5
.7
.2
5.1
.3
1.5
8.6
1.4
5.6
1.4
.8
.2
5.1
.3
2.1
9.4
1.7
6.0
1.5
1.0
.2
5.1
.5
1.7
8.6
1.7
5.9
1.4
1.2
.3
5.0
.5
2.2
8.9
1.9
6.3
1.3
1.1
.2
4.9
.5
1.9
9.3
1.8
6.0
1.3
1.3
.2
5.2
.6
2.3
10.9
2.1
6.3
1.6
1.1
.2
5.1
.4
2.0
10.8
2.5
6.6
1.6
1.4
.2
5.0
.5
2.6
10.8
2.6
6.4
1.8
1.0
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 3
.6
.6
.2
1.7
.8
.7
.2
2.1
.7
.5
.2
2.1
1.0
.7
.2
2.2
1.1
.7
.2
2.3
1.3
.7
.2
2.3
1.3
.7
.2
2.3
1.3
.8
.1
2.2
1.2
.7
.1
2.4
1.1
.8
.1
2.3
1.2
.8
.1
2.2
52 Eastern Europe
53 U.S.S.R
54 Yugoslavia
55 Other
7.3
.7
1.8
4.8
7.4
.4
2.3
4.6
7.7
.5
2.5
4.8
7.7
.4
2.5
4.7
7.8
.6
2.5
4.7
7.2
.4
2.5
4.3
6.7
.4
2.4
3.9
6.3
.3
2.2
3.8
6.2
.3
2.2
3.7
6.2
.3
2.6
3.3
6.0
.4
2.3
3.3
56 Offshore banking centers
57 Bahamas
58 Bermuda
59 Cayman Islands and other British West Indies
60 Netherlands Antilles
61 Panama4
6? Lebanon
63 Hong Kong
64 Singapore
65 Others5
40.4
13.7
.8
9.4
1.2
4.3
.2
6.0
4.5
.4
47.0
13.7
.6
10.6
2.1
5.4
.2
8.1
5.9
.3
59.3
17.9
.7
12.6
2.4
6.9
.2
10.3
8.1
.3
61.7
21.3
.8
12.1
2.2
6.7
.2
10.3
8.0
.1
63.6'
19.0'
.7
12.4
3.2
7.6
.2
11.8
8.7
.1
65.7'
20.2'
.7
12.1'
3.2
7.2'
.2
12.9
9.3
.1
71.7
23.9
.7
12.3
3.0
7.4
.2
14.3
9.9
.1
71.7
21.2
.8
13.5
3.3
8.0
.1
14.9
9.8
.0
66.6
18.8
.9
13.0
3.3
7.6
.1
13.8
9.1
.0
66.1
17.3
1.0
11.8
3.2
7.1
.1
15.0
10.6
.0
67.8
20.2
.8
11.8
2.6
6.5
.1
14.5
11.1
.0
66 Miscellaneous and unallocated 6
11.7
14.0
15.7
18.2
18.8
18.5'
18.4
20.3
17.9
16.3
15.7
1 Total
2 G 10 countries and Switzerland
3 Belgium-Luxembourg
4 France
Germany
6 Italy
7 Netherlands
8 Sweden
9 Switzerland
10 United Kingdom
11 Canada
12 Japan
3?
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Other Latin America
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or another
foreign branch of the same banking institution. The data in this table combine
foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims
of U.S. offices in table 3.18 (excluding those held by agencies and branches of
foreign banks and those constituting claims on own foreign branches).
2. In addition to the Organization of Petroleum Exporting Countries shown
individually, this group includes other members of OPEC (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).
3. Excludes Liberia.
4. Includes Canal Zone beginning December 1979.
5. Foreign branch claims only.
6. Includes New Zealand, Liberia, and international and regional organizations.
A64
3.22
International Statistics • September 1983
L I A B I L I T I E S TO 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 doUars, end of period
1982
Type, and area or country
1979
1983
1981
1980
Mar.
June
Sept.
Dec.
Mar.P
1 Total
17,433
22,226
22,506
22,185
21,017
21,491
21,898
21,555
2 Payable in dollars
3 Payable in foreign currencies
14,323
3,110
18,481
3,745
18,787
3,719
19,418
2,767
18,237
2,780
18,375
3,116
18,798
3,099
18,643
2,912
By type
4 Financial liabilities
5
Payable in dollars
Payable in foreign currencies
6
7,523
5,223
2,300
11,330
8,528
2,802
12,143
9,475
2,668
12,377
10,408
1,969
10,063
8,104
1,959
10,749
8,441
2,308
10,364
8,289
2,075
10,294
8,330
1,964
7 Commercial liabilities
8 Trade payables
Advance receipts and other liabilities
9
9,910
4,591
5,320
10,896
4,993
5,903
10,363
4,720
5,643
9,808
4,035
5,773
10,955
5,045
5,910
10,742
4,536
6,206
11,533
4,582
6,951
11,261
4,474
6,787
9,100
811
9,953
943
9,312
1,052
9,010
798
10,133
822
9,934
808
10,509
1,024
10,313
948
4,665
338
175
497
829
170
2,477
6,481
479
327
582
681
354
3,923
6,816
471
709
491
748
715
3,556
7,742
562
917
503
750
707
4,195
5,944
518
581
439
517
661
3,081
6,389
494
672
446
759
670
3,212
6,172
502
635
470
702
673
3,061
6,052
407
679
487
684
620
3,045
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
Asia
Japan
Middle East oil-exporting countries 2
30
31
32
33
34
35
36
37
38
39
532
964
958
914
758
702
685
677
1,514
404
81
18
516
121
72
3,136
964
1
23
1,452
99
81
3,356
1,279
7
22
1,241
102
98
3,223
1,095
6
27
1,369
67
97
2,805
1,003
7
24
1,044
83
100
2,969
933
14
28
981
85
104
2,683
876
14
28
992
121
114
2,666
803
18
39
991
149
121
804
726
31
723
644
38
976
792
75
472
293
63
526
340
66
658
424
67
796
572
69
866
622
68
Africa
Oil-exporting countries 3
4
1
11
1
14
0
13
0
17
0
17
0
17
0
20
0
All other 4
4
15
24
12
11
13
12
13
3,709
137
467
545
227
316
1,080
4,402
90
582
679
219
499
1,209
3,771
71
573
545
221
424
880
3,422
50
504
473
232
400
824
3,742
47
700
457
248
412
850
3,861
50
759
436
281
358
904
3,636
52
595
457
346
363
850
3,420
42
576
439
350
372
660
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
924
888
897
897
1,134
1,197
1,490
1,454
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,325
69
32
203
21
257
301
1,300
8
75
111
35
367
319
1,044
2
67
67
2
340
276
817
22
71
83
27
210
194
1,418
20
102
62
2
727
219
1,220
6
48
128
3
484
269
991
16
89
60
32
379
148
1,032
4
117
51
4
354
181
48
49
50
Asia
Japan
Middle East oil-exporting countries 2
2,991
583
1,014
3,034
802
890
3,285
1,094
910
3,407
1,090
998
3,301
1,064
958
3,207
1,134
821
4,062
1,150
1,513
4,278
1,158
1,732
51
52
Africa
Oil-exporting countries 3
728
384
817
517
703
344
661
247
729
340
663
248
704
277
492
158
53
All other 4
233
456
664
604
630
595
651
586
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Aigeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Nonbank-Reported
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
United States 1
Millions of dollars, end of period
Data
Reported by Nonbanking Business Enterprises in the
1983
1982
Type, and area or country
1979
A65
1980
1981
Mar.
Sept.
June
Mar.P
Dec.
1 Total
31,299
34,482
35,709
30,253
30,559
29,519
27,595
29,970
7 Payable in dollars
3 Payable in foreign currencies
28,096
3,203
31,528
2,955
32,114
3,595
27,619
2,634
28,056
2,502
26,855
2,664
24,976
2,618
27,253
2,718
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
18,398
12,858
11,936
923
5,540
3,714
1,826
19,763
14,166
13,381
785
5,597
3,914
1,683
20,735
14,682
14,057
625
6,053
3,599
2,454
17,743
12,725
12,267
457
5,018
3,362
1,656
18,361
13,599
13,229
370
4,762
3,194
1,568
17,714
12,608
12,194
413
5,106
3,419
1,687
16,656
12,129
11,703
426
4,527
2,895
1,632
19,086
14,440
13,967
473
4,646
3,006
1,640
11 Commercial claims
1?
Trade receivables
13
Advance payments and other claims
12,901
12,185
716
14,720
13,960
759
14,974
13,965
1,009
12,510
11,493
1,017
12,198
11,069
1,129
11,805
10,709
1,097
10,939
9,929
1,010
10,885
9,681
1,204
14
15
12,447
454
14,233
487
14,458
516
11,989
520
11,634
564
11,242
564
10,378
561
10,279
605
6,179
32
177
409
53
73
5,099
6,069
145
298
230
51
54
4,987
4,513
43
285
224
50
57
3,522
4,503
16
375
197
79
53
3,546
4,658
13
313
148
56
63
3,792
4,728
16
305
174
52
60
3,749
4,655
10
129
168
32
107
3,944
5,885
58
90
127
55
82
5,221
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
5,003
5,036
6,628
4,942
4,365
4,322
4,199
4,481
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
6,312
2,773
30
163
2,011
157
143
7,811
3,477
135
%
2,755
208
137
8,615
3,925
18
30
3,503
313
148
7,432
3,537
27
49
2,797
281
130
8,313
3,845
42
76
3,505
274
134
7,630
3,366
19
76
3,171
268
133
6,889
3,226
8
62
2,679
274
139
7,829
3,657
10
50
2,855
352
156
31
32
33
Asia
Japan
Middle East oil-exporting countries 2
601
199
16
607
189
20
758
366
37
668
262
36
802
327
33
825
247
30
723
178
15
712
233
18
34
35
Africa
Oil-exporting countries 3
258
49
208
26
173
46
164
43
156
41
165
50
158
48
153
45
36
All other 4
44
32
48
34
66
44
31
25
4,922
202
727
593
298
272
901
5,544
233
1,129
599
318
354
929
5,359
234
776
559
303
427
969
4,381
246
698
454
227
354
1,062
4,273
211
636
394
297
384
905
4,164
178
646
427
278
258
1,035
3,755
150
473
356
347
339
793
3,558
140
486
414
307
227
748
37
38
39
40
41
42
43
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
44
Canada
859
914
967
943
713
666
635
674
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,879
21
197
645
16
708
343
3,766
21
108
861
34
1,102
410
3,479
12
223
668
12
1,022
424
2,925
80
212
417
23
762
396
2,787
30
225
423
10
750
383
2,772
19
154
481
7
869
373
2,513
21
259
258
12
767
351
2,645
30
172
401
22
864
286
52
53
54
Asia
Japan
Middle East oil-exporting countries 2
3,451
1,177
765
3,522
1,052
825
3,949
1,244
901
3,199
1,160
757
3,385
1,213
806
3,117
968
775
3,033
1,047
748
3,108
1,115
700
55
56
Africa
Oil-exporting countries 3
551
130
653
153
759
152
598
143
627
138
638
148
588
140
559
131
57
All other 4
240
321
461
463
413
448
415
341
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
A66
3.24
International Statistics • September 1983
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
1983
Transactions, and area or country
1981
1983
1982
Jan.July
Jan.
Feb
Mar.
Apr.
May
July?
June
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
40,686
34,856
41,916'
37,956"
42,720
38,234
5,175'
4,376
5,314'
4,349
7,083
6,155
5,920
5,344
6,619'
6,365'
6,853
6,450
5,756
5,196
3 Net purchases, or sales ( - )
5,830
3,959'
4,486
7 9 9r
965'
928
576
254
403
560
4 Foreign countries
5,803
3,875'
4,392
790'
945'
902
524
252
428
551
3,662
900
-22
42
288
2,235
783
-30
1,140
287
7
-46
2,603'
-143
333
-60
-529
3,136'
221
304
366'
246
2
131
4,044
155
887
-85
1,460
1,586
612
305
-646
-13
29
61
615'
47
lite
2
214'
183
90
0'
-57
118
6
18
894'
52
137
8
223
447'
61
83
-13
-91
4
6
976
8
226
41
102
576
147
-23
-57
-210
8
60
626
29
222
-5
278
127
122
119
-302
-44
8
-4
296
-28
86
-81
269
116
92
63
-192
0
3
-10
196
14
-31
-57
186
89
98
28
35
68
1
2
442
34
136
7
187
48
1
35
-59
146
0
-12
27
85
95
10
21
26
52
2
-25
9
17,304
12,272'
21,919'
20,463'
13,904
14,156
1,948'
2,278
1,885
1,877
2,312
2,448
2,318
2,067
2,458
2,289
1,550
1,741
1,433
1,457
20 Net purchases, or sales ( - )
5,033r
1,456'
-252
-330'
8
-136
251
169'
-191
-24
21 Foreign countries
4,972'
1,484'
-230
-328'
33
-153
265
193
-193
-48
22
23
24
25
26
27
28
29
30
31
32
33
1,351'
11
848
70
108
196
-12
132
3,465
44
-1
-7
2,081'
295
2,116
28
161
-581'
25
160
-748'
-23
-19
7
-50
-43
114
32
506
-243
94
74
-808
400
3
58
-174'
-21
-96
16
29
-90'
11
23
-211
23
0
0
-148
-2
-35
0
62
-90
15
11
86
72
-1
0
-266
-22
127
3
-2
-182
21
1
32
59
0
0
261
7
47
1
209
-103
-18
-3
-50
60
-5
21
474
7
85
12
188
141
22
10
-378
62
1
2
-123
-7
-12
-4
28
119
-10
19
-168
47
7
35
-73
-5
-2
5
-8
-38
53
13
-119
78
0
0
-28
-23
-2
-25
17
-14
-24
2
24
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
BONDS 2
18 Foreign purchases
19 Foreign sales
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
34 Nonmonetary international and
regional organizations
61
Foreign securities
35 Stocks, net purchases, or sales ( - )
36
Foreign purchases
37
Foreign sales
-247
9,339
9,586
-1,343'
7,165'
8,508'
-3,319
7,639
10,958
-327'
1,032
1,359'
-227'
1,042
1,270'
-447
1,187
1,634
-548
971
1,519
-641
1,079
1,720
-649
1,344
1,993
-480
983
1,463
38 Bonds, net purchases, or sales ( - )
39
Foreign purchases
40
Foreign sales
-5,460
17,553
23,013
-6,557'
29,898'
36,455'
-2,400
19,991
22,390
29'
2,888'
2,859
-278
3,526
3,804
-556
2,772
3,328
-686
2,3%
3,083
-837
2,655
3,492
139
3,220
3,081
-209
2,534
2,744
41 Net purchases, or sales ( - ) , of stocks and bonds
-5,707
-7,900'
-5,719
-299'
-506'
-1,003
-1,234
-1,478
-510
-689
42
43
44
45
46
47
48
49
-4,694
-728
-3,697
69
-367
-55
84
-6,735'
-2,433'
-2,364
288'
-1,853'
-9
-364
-5,224
-4,170
-1,121
888
-1,219
103
295
-275'
-309'
-20
258
-192
-9
-2
-818'
-688'
-449
345
-37
21
-10
-714
-606
13
-24
-144
30
16
-1,212
-672
-438
88
-221
25
7
-972
-632
-287
243
-309
9
4
-536
-576
5
-80
-182
16
280
-698
-687
55
57
-133
11
-1
-1,012
-1,165'
-495
-24'
312
-289
-22
-506
26
9
Foreign countries
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
Nonmonetary international and
regional organizations
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities, and securities of U.S.
government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments
abroad.
Investment
3.25
MARKETABLE U.S. TREASURY BONDS A N D NOTES
Transactions and Discount Rates
A67
Foreign Holdings and Transactions
Millions of dollars
1983
1983
1981
Country or area
1982
Jan.July
Jan.
Mar.
Feb.
Apr.
May
July
June
Holdings (end of period)1
1 Estimated total2
70,249
85,169
85,458
86,057
88,675
87,462'
89,375'
90,950
88,675
2 Foreign countries 2
64,565
80,586
80.854
82,098
83,046
84,001
84,243'
84,817
83,508
3 Europe 2
4 Belgium-Luxembourg
5 Germany2
6 Netherlands
7 Sweden
8
Switzerland2
United Kingdom
9
10 Other Western Europe
11 Eastern Europe
12 Canada
24,012
543
1,991
643
846
6,709
1,419
29,274
447
14,841
2,754
667
1,540
6,549
2,476
29.855
716
15,151
2,839
668
1,013
6,721
2,748
31,039
-87
16,650
3,011
1,039
6,941
2,804
32,364
-332
17,560
3,194
656
1,044
7,478
2,764
33,511
-107
17,798
3,230
656
1,070
7,719
3,146
33,557
-93
16,953
3,255
670
914
8,045
3,813
33,569
-84
16,876
3,251
655
877
8,234
3,761
33,017
82
16,313
3,262
674
855
8,241
3,589
514
602
649
639
724
696
863
972
1,047
13
14
15
16
17
18
19
20
736
286
319
131
38,671
10,780
631
2
1,076
656
232
49,502
11,578
77
55
1,066'
190
720
156
49,146
11,655
77
60
1,050
74
792
185
49,256
11,707
80
34
951
77
690
184
48,897
11,736
80
31
932
72
676
184
48,743
11,848
80
39
1,039
72
775'
192
48,664
79
42
1,041
72
773
1%
49,107
12,582
79
50
886
62
636
188
48,407
12,753
79
72
4,583
4,186
6
4,604
4,165
6
3,959
3,405
6
5,629
4,966
6
3,461'
2,969
6
5,132'
4,469"
6
6,133
5,327
6
5,167
4,455
6
11,861
0
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
All other
21 Nonmonetary international and regional organizations
22 International
23 Latin American regional
0
0
188
5,684
5,638
681
0
0
0
0
12,120
0
0
Transactions (net purchases, or sales ( - ) during period)
24 Total
2
25 Foreign countries 2
26 Official institutions
27 Other foreign2
28 Nonmonetary international and regional organizations
MEMO: Oil-exporting countries
29 Middle East 3
30 Africa 4
12,699'
14,920
3,506
289
599
2,618
-1,212
1,912'
1,575
-2,275
11,604
11,730
16,021
2,922
2,437
485
584
268
20
248
948
962
-14
1,670
955
321
633
-2,167
243
31'
574
444
130
21
1,245
1,567
-323
-645
1,670"
1,001
-1,310
-908
-400
-966
-1,907
121
-233
-691
-115
-566
-251
-172
-126'
1,095'
14,498'
1,518'
-1,096
11,156
-289
7,534
-552
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.
3.26
-1
0
0
0
0
211'
-1
0
0
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.
DISCOUNT RATES OF FOREIGN CENTRAL B A N K S
Percent per annum
Rate on Aug. 31, 1983
Percent
Austria..
Belgium.
Brazil...
Canada..
Denmark
Rate on Aug. 31, 1983
Country
Country
3.75
9.0
49.0
9.57
7.5
Month
effective
Mar.
June
Mar.
Aug.
Apr.
1983
1983
1981
1983
1983
Percent
France 1
Germany, Fed. Rep. of
Italy
Japan
Netherlands
1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
Rate on Aug. 31, 1983
Country
12.25
4.0
17.0
5.5
4.5
Month
effective
June
Mar.
Apr.
Dec.
May
1983
1983
1983
1981
1983
Percent
Norway
Switzerland
United Kingdom 2 .
Venezuela
8.0
4.0
Month
effective
June 1979
Mar. 1983
Sept. 1982
or makes advances against eligible commercial paper and/or government commercial banks or brokers. For countries with more than one rate applicable to such
discounts or advances, the rate shown is the one at which it is understood the
central bank transacts the largest proportion of its credit operations.
A68
3.27
International Statistics • September 1983
FOREIGN SHORT-TERM INTEREST RATES
P e r c e n t per a n n u m , a v e r a g e s of daily figures
1983
Country, or type
1980
1981
1982
Feb.
1
2
3
4
5
6
7
8
9
10
Apr.
Mar.
May
June
July
Aug.
Eurodollars
United Kingdom
Canada
Germany
Switzerland
14.00
16.59
13.12
9.45
5.79
16.79
13.86
18.84
12.05
9.15
12.24
12.21
14.38
8.81
5.04
9.14
11.29
9.69
5.79
2.95
9.25
10.92
9.36
5.40
3.64
9.23
10.21
9.39
5.16
4.20
8.96
10.18
9.30
5.27
4.48
9.66
9.91
9.41
5.52
4.98
10.00
9.84
9.42
5.54
4.77
10.27
9.83
9.49
5.66
4.61
Netherlands
France
Italy
Belgium
Japan
10.60
12.18
17.50
14.06
11.45
11.52
15.28
19.98
15.28
7.58
8.26
14.61
19.99
14.10
6.84
4.82
12.88
19.04
12.25
6.64
4.34
12.64
19.19
13.32
6.72
5.19
12.12
18.20
11.05
6.34
5.65
12.51
17.75
10.04
6.26'
5.81
12.59
17.72
9.73
6.46
5.58
12.33
17.50
9.08
6.47
6.03
12.33
17.50
9.25
6.52
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
3.28
FOREIGN E X C H A N G E RATES
C u r r e n c y units p e r dollar
1983
Country/currency
1980
1981
1982
Mar.
Apr.
May
June
July
Aug.
1
2
3
4
5
6
7
8
9
10
Argentina/peso
Australia/dollar1
Austria/schilling
Belgium/franc
Brazil/cruzeiro
Canada/dollar
Chile/peso
China, P.R./yuan
Colombia/peso
Denmark/krone
n.a.
114.00
12.945
29.237
n.a.
1.1693
n.a.
n.a.
n.a.
5.6345
n.a.
114.95
15.948
37.194
92.374
1.1990
n.a.
1.7031
n.a.
7.1350
20985.00
101.65
17.060
45.780
179.22
1.2344
51.118
1.8978
64.071
8.3443
62386.95
88.39
16.940
47.519
401.30
1.2263
76.378
1.9834
73.179
8.6223
66868.56
86.76
17.176
48.577
434.77
1.2325
76.028
1.9938
74.751
8.6663
71100.94
87.85
17.368
49.239
465.65
1.2292
75.405
1.9895
76.153
8.8003
8.08
87.72
17.974
50.928
517.28
1.2323
77.500
1.9949
77.380
9.1287
8.85
87.54
18.208
51.862
571.73
1.2323
78.987
1.9966
78.997
9.3142
8.94
87.93
18.799
53.609
643.34
1.2338
80.011
1.9843
80.707
9.6308
11
17
13
14
15
16
17
18
19
20
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Indonesia/rupiah
Iran/rial
Ireland/pound1
Israel/shekel
3.7206
4.2250
1.8175
n.a.
n.a.
7.8866
n.a.
n.a.
205.77
n.a.
4.3128
5.4396
2.2631
n.a.
5.5678
8.6807
n.a.
79.324
161.32
n.a.
4.8086
6.5793
2.428
66.872
6.0697
9.4846
660.43
n.a.
142.05
24.407
5.4266
7.0204
2.4110
83.897
6.6536
9.9652
714.72
n.a.
134.79
38.867
5.4342
7.3148
2.4397
84.037
6.7868
9.9824
970.81
n.a.
129.53
40.951
5.4361
7.4163
2.4665
84.105
6.9667
9.9895
968.83
n.a.
128.11
43.427
5.5351
7.6621
2.5490
84.486
7.2822
10.049
973.00
n.a.
123.81
46.138
5.5863
7.7878
2.5914
84.677
7.1678
10.0875
978.57
n.a.
121.87
49.614
5.7063
8.0442
2.6736
89.217
7.4416
10.187
984.09
n.a.
117.99
55.949
71
77
73
74
7.5
76
77
78
79
30
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar1
Norway/krone
Peru/sol
Philippines/peso
Portugal/escudo
856.20
226.63
2.1767
22.968
1.9875
97.34
4.9381
n.a.
n.a.
50.082
1138.60
220.63
2.3048
24.547
2.4998
86.848
5.7430
n.a.
7.8113
61.739
1354.00
249.06
2.3395
72.990
2.6719
75.101
6.4567
694.59
8.5324
80.101
1429.72
238.25
2.2898
161.78
2.6834
66.642
7.1852
1160.19
9.5896
95.867
1451.88
237.75
2.3063
153.77
2.7486
65.726
7.1460
1284.37
9.8449
99.055
1467.76
234.76
2.3009
150.27
2.7737
66.246
7.1154
1390.60
10.015
99.521
1510.98
240.03
2.3244
149.02
2.8557
65.659
7.2678
1514.46
10.393
107.39
1533.41
240.52
2.3319
149.36
2.8985
65.383
7.3280
1645.99
11.050
119.03
1589.74
244.46
2.3523
151.59
2.9912
65.100
7.4641
1853.18
11.050
123.03
31
37
33
34
35
36
37
38
39
40
Singapore/dollar
South Africa/rand1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Thailand/baht
United Kingdom/pound1
Venezuela/bolivar
n.a.
128.54
n.a.
71.758
16.167
4.2309
1.6772
n.a.
232.58
n.a.
2.1053
114.77
n.a.
92.396
18.967
5.0659
1.9674
21.731
202.43
4.2781
2.1406
92.297
731.93
110.09
20.756
6.2838
2.0327
23.014
174.80
4.2981
2.0854
91.64
757.94
133.498
22.982
7.4882
2.0663
22.991
149.00
7.9500
2.1010
91.42
765.29
135.99
22.971
7.4941
2.0587
22.990
153.61
9.0429
2.0920
92.31
767.96
137.76
22.970
7.4978
2.0572
22.988
157.22
10.233
2.1198
91.65
775.82
143.29
23.050
7.6351
2.1123
22.990
154.80
11.213
2.1294
91.19
779.88
147.973
24.082
7.6936
2.1184
22.990
152.73
12.595
2.1416
89.55
787.19
151.302
24.257
7.8585
2.1632
22.990
150.26
15.600
102.94
116.57
120.71
121.82
122.05
125.16
126.62
129.77
MEMO:
United States/dollar2
87.39
1. Value in U.S. cents.
2. 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 revised as of August 1978. For
description and back data, see "Index of the Weighted-Average Exchange Value
of the U.S. Dollar: Revision" on p. 700 of the August 1978 BULLETIN.
NOTE. Averages of certified noon buying rates in New York for cable tranfers.
A69
Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE TO TABULAR
Symbols and
c
e
p
r
*
PRESENTATION
Abbreviations
0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000 when
the smallest unit given is millions)
General
Calculated to be zero
N o t available
N o t elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable
Information
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.
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
RELEASES
List Published Semiannually,
with Latest Bulletin
Reference
Issue
Page
June 1983 A76
Anticipated schedule of release dates for periodic releases
SPECIAL
TABLES
Published Irregularly,
Assets
Assets
Assets
Assets
Assets
Assets
Assets
Assets
and
and
and
and
and
and
and
and
liabilities
liabilities
liabilities
liabilities
liabilities
liabilities
liabilities
liabilities
of
of
of
of
of
of
of
of
with Latest Bulletin
commercial banks,
commercial banks,
commercial banks,
commercial banks,
U . S . branches and
U . S . branches and
U . S . branches and
U . S . branches and
Reference
June 30, 1982
September 30, 1982
December 31, 1982
March 31, 1983
agencies of foreign banks,
agencies of foreign banks,
agencies of foreign banks,
agencies of foreign banks,
June 30, 1982
September 30, 1982
December 31, 1982
March 31, 1983
October
January
April
August
October
January
April
August
1982
1983
1983
1983
1982
1983
1983
1983
A70
A70
A70
A70
A76
A76
A76
A76
A70
Federal Reserve Board of Governors
P A U L A . VOLCKER,
PRESTON M A R T I N ,
Chairman
Vice Chairman
OFFICE OF BOARD
MEMBERS
JOSEPH R. COYNE, Assistant
to the Board
DONALD J. WINN, Assistant
to the Board
FRANK O'BRIEN, JR., Deputy Assistant
to the Board
ANTHONY F. COLE, Special Assistant
to the Board
WILLIAM R. JONES, Special Assistant
to the Board
NAOMI P. SALUS, Special Assistant
to the Board
LEGAL
HENRY C.
OFFICE OF STAFF DIRECTOR
MONETARY AND FINANCIAL
OF RESEARCH
JAMES L . KICHLINE,
MICHAEL BRADFIELD, General
Counsel
J. VIRGIL MATTINGLY, JR., Associate
General
Counsel
GILBERT T. SCHWARTZ, Associate
General
Counsel
RICHARD M. ASHTON, Assistant
General
Counsel
NANCY P. JACKLIN, Assistant
General
Counsel
MARYELLEN A. BROWN, Assistant
to the General
Counsel
OFFICE OF THE
SECRETARY
WILLIAM W . WILES,
Secretary
BARBARA R. LOWREY, Associate
Secretary
JAMES MCAFEE, Associate
Secretary
DIVISION OF CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,
Director
JERAULD C. KLUCKMAN, Associate
Director
GLENN E. LONEY, Assistant
Director
DOLORES S. SMITH, Assistant
Director
DIVISION OF BANKING
SUPERVISION AND
REGULATION
JOHN E . RYAN,
Director
WILLIAM TAYLOR, Deputy
Director
FREDERICK R. DAHL, Associate
Director
DON E. KLINE, Associate
Director
JACK M. EGERTSON, Assistant
Director
ROBERT A. JACOBSEN, Assistant
Director
ROBERT S. PLOTKIN, Assistant
Director
THOMAS A. SIDMAN, Assistant
Director
SIDNEY M. SUSSAN, Assistant
Director
SAMUEL H. TALLEY, Assistant
Director
LAURA M. HOMER, Securities Credit
Officer
FOR
POLICY
STEPHEN H. AXILROD, Staff
Director
DONALD L. KOHN, Deputy Staff
Director
STANLEY J. SIGEL, Assistant
to the Board
NORMAND R . V . BERNARD, Special Assistant
DIVISION
DIVISION
WALLICH
J. CHARLES PARTEE
AND
to the
STATISTICS
Director
EDWARD C. ETTIN, Deputy
Director
MICHAEL J. PRELL, Deputy
Director
JOSEPH S. ZEISEL, Deputy
Director
JARED J. ENZLER, Associate
Director
ELEANOR J. STOCKWELL, Associate
Director
DAVID E. LINDSEY, Deputy Associate
Director
FREDERICK M. STRUBLE, Deputy Associate
Director
HELMUT F. WENDEL, Deputy Associate
Director
MARTHA BETHEA, Assistant
Director
ROBERT M. FISHER, Assistant
Director
SUSAN J. LEPPER, Assistant
Director
THOMAS D. SIMPSON, Assistant
Director
LAWRENCE SLIFMAN, Assistant
Director
STEPHEN P. TAYLOR, Assistant
Director
PETER A. TINSLEY, Assistant
Director
LEVON H. GARABEDIAN, Assistant
Director
(Administration)
DIVISION
OF INTERNATIONAL
E D W I N M . TRUMAN,
FINANCE
Director
ROBERT F. GEMMILL, Senior Associate
Director
CHARLES J. SIEGMAN, Senior Associate
Director
LARRY J. PROMISEL, Associate
Director
DALE W. HENDERSON, Deputy Associate
Director
SAMUEL PIZER, Staff
Adviser
MICHAEL P. DOOLEY, Assistant
Director
RALPH W. SMITH, JR., Assistant
Director
Board
A71
and Official Staff
NANCY H.
TEETERS
LYLE E.
GRAMLEY
E M M E T T J. R I C E
OFFICE
STAFF
OF
OFFICE
DIRECTOR
FOR
MANAGEMENT
S. DAVID FROST, Staff
Director
STEPHEN R. MALPHRUS, Assistant
EDWARD T. MULRENIN, Assistant
DIVISION
OF DATA
Staff
Staff
Director
Director
PROCESSING
CHARLES L . HAMPTON,
OF
PERSONNEL
DAVID L . S H A N N O N ,
Director
JOHN R. WEIS, Assistant
Director
CHARLES W . WOOD, Assistant
Director
OFFICE
OF THE
CONTROLLER
GEORGE E . LIVINGSTON,
Controller
BRENT L . BOWEN, Assistant
Controller
DIVISION
SERVICES
OF SUPPORT
DONALD E . ANDERSON,
Director
ROBERT E. FRAZIER, Associate
Director
WALTER W. KREIMANN, Associate
Director
*On loan from the Federal Reserve Bank of New York.
OF STAFF
DIRECTOR
RESERVE
BANK
FOR
ACTIVITIES
THEODORE E. ALLISON, Staff
Director
JOSEPH W. DANIELS, SR., Equal Employment
Programs
Adviser
DIVISION
OF FEDERAL
BANK
OPERATIONS
Opportunity
RESERVE
Director
BRUCE M . BEARDSLEY, Deputy
Director
GLENN L. CUMMINS, Assistant
Director
NEAL H . HILLERMAN, Assistant
Director
ELIZABETH A . JOHNSON, Assistant
Director
RICHARD J. MANASSERI, Assistant
Director
WILLIAM C. SCHNEIDER, JR., Assistant
Director
ROBERT J. ZEMEL, Assistant
Director
DIVISION
FEDERAL
CLYDE H . FARNSWORTH, JR.,
Director
Director
ELLIOTT C. MCENTEE, Associate
DAVID L. ROBINSON, Associate
Director
C. WILLIAM SCHLEICHER, JR., Associate
Director
WALTER ALTHAUSEN, Assistant
Director
CHARLES W . BENNETT, Assistant
Director
ANNE M. DEBEER, Assistant
Director
JACK DENNIS, JR., Assistant
Director
RICHARD B. GREEN, Assistant
Director
EARL G. HAMILTON, Assistant
Director
*JOHN F. SOBALA, Assistant
Director
72
Federal Reserve Bulletin • September 1983
FOMC and Advisory Councils
FEDERAL
OPEN MARKET
COMMITTEE
PAUL A . VOLCKER, Chairman
LYLE E. GRAMLEY
ROGER GUFFEY
SILAS KEEHN
ANTHONY M . SOLOMON, Vice
PRESTON MARTIN
FRANK E. MORRIS
J. CHARLES PARTEE
STEPHEN H . AXILROD, Staff Director and
Secretary
NORMAND R . V . BERNARD, Assistant
Secretary
NANCY M. STEELE, Deputy Assistant
Secretary
MICHAEL BRADFIELD, General
Counsel
JAMES H . OLTMAN, Deputy General
Counsel
JAMES L. KICHLINE,
Economist
EDWIN M. TRUMAN, Economist
(International)
ANATOL BALBACH, Associate
Economist
EMMETT J. RICE
THEODORE H . ROBERTS
NANCY H . TEETERS
HENRY C. WALLICH
RICHARD G. DAVIS, Associate
Economist
THOMAS E. DAVIS, Associate
Economist
ROBERT EISENMENGER, Associate
Economist
EDWARD C. ETTIN, Associate
Economist
MICHAEL J. PRELL, Associate
Economist
KARL A . SCHELD, Associate
Economist
CHARLES J. SIEGMAN, 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
RONALD TERRY, Eighth District,
President
WILLIAM S. EDGERLY, First District, Vice
President
ROGER E. ANDERSON, S e v e n t h District
E. PETER GILLETTE, JR., N i n t h District
N . BERNE HART, Tenth District
T . C . FROST, JR., E l e v e n t h District
JOSEPH J. PINOLA, T w e l f t h District
LEWIS T. PRESTON, S e c o n d District
JOHN H . WALTHER, Third District
JOHN G. MCCOY, Fourth District
VINCENT C. BURKE, JR., Fifth District
PHILIP F . SEARLE, Sixth District
HERBERT V . PROCHNOW,
Secretary
WILLIAM J. KORSVIK, Associate
Secretary
CONSUMER
ADVISORY
COUNCIL
SUSAN PIERSON DE WITT, Chicago, Illinois,
Chairman
WILLIAM J. O'CONNOR, JR., BufiFalo, N e w York, Vice
Chairman
ARTHUR F . BOUTON, Little R o c k , Arkansas
JAMES G. BOYLE, A u s t i n , T e x a s
GERALD R. CHRISTENSEN, Salt L a k e City, U t a h
THOMAS L. CLARK, JR., N e w Y o r k , N e w York
JEAN A . CROCKETT, Philadelphia, P e n n s y l v a n i a
JOSEPH N . CUGINI, W e s t e r l y , R h o d e Island
MEREDITH FERNSTROM, N e w Y o r k , N e w York
ALLEN J. FISHBEIN, W a s h i n g t o n , D . C .
E . C . A . FORSBERG, SR., Atlanta, Georgia
LUTHER R. GATLING, N e w Y o r k , N e w Y o r k
RICHARD F . HALLIBURTON, K a n s a s City, Missouri
CHARLES C. HOLT, A u s t i n , T e x a s
GEORGE S. IRVIN, D e n v e r , C o l o r a d o
HARRY N . JACKSON, M i n n e a p o l i s , M i n n e s o t a
KENNETH V. LARKIN, San F r a n c i s c o , California
TIMOTHY D. MARRINAN, M i n n e a p o l i s , M i n n e s o t a
STANLEY L. MULARZ, C h i c a g o , Illinois
WILLARD P. OGBURN, B o s t o n , M a s s a c h u s e t t s
ELVA QUIJANO, San A n t o n i o , T e x a s
JANET J. RATHE, Portland, O r e g o n
JANET M. SCACCIOTTI, P r o v i d e n c e , R h o d e Island
GLENDA G. SLOANE, W a s h i n g t o n , D . C .
HENRY J. SOMMER, Philadelphia, P e n n s y l v a n i a
NANCY Z. SPILLMAN, L o s A n g e l e s , California
WINNIE F. TAYLOR, G a i n e s v i l l e , Florida
MICHAEL M. VAN BUSKIRK, C o l u m b u s , O h i o
CLINTON WARNE, C l e v e l a n d , O h i o
FREDERICK T. WEIMER, C h i c a g o , Illinois
Chairman
A73
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK,
branch, or facility
Zip
Chairman
D e p u t y Chairman
President
First V i c e President
BOSTON*
02106
Robert P. H e n d e r s o n
T h o m a s I. Atkins
Frank E. Morris
James A . M c i n t o s h
NEW YORK*
10045
John B r a d e m a s
Gertrude G. M i c h e l s o n
M. Jane D i c k m a n
A n t h o n y M. S o l o m o n
T h o m a s M. Timlen
Buffalo
14240
John T. K e a n e
PHILADELPHIA
19105
Robert M. Landis, E s q .
N e v i u s M . Curtis
E d w a r d G. B o e h n e
Richard L. S m o o t
CLEVELAND*
44101
J.L. J a c k s o n
William H . Knoell
Clifford R. M e y e r
Milton G. H u l m e , Jr.
Karen N . Horn
William H. H e n d r i c k s
S t e v e n Muller
William S. L e e , III
Edward H. Covell
Dr. H e n r y P o n d e r
Robert P. Black
Jimmie R. M o n h o l l o n
William A . Fickling, Jr.
John H . Weitnauer, Jr.
Samuel R. Hill, Jr.
Joan W . Stein
Eugene E. Cohen
Robert C . H . M a t h e w s , Jr.
Roosevelt Steptoe
William F. Ford
Robert P. Forrestal
John Sagan
Stanton R. C o o k
Russell G. M a w b y
Silas K e e h n
Daniel M. D o y l e
W . L . H a d l e y Griffin
Mary P. H o l t
Richard V . Warner
William C. Ballard, Jr.
G. R i v e s N e b l e t t
T h e o d o r e H. Roberts
J o s e p h P. Garbarini
William G. Phillips
John B . D a v i s , Jr.
G e n e J. Etchart
E. Gerald Corrigan
T h o m a s E. Gainor
Paul H . H e n s o n
Doris M. Drury
James E. N i e l s o n
Christine H . A n t h o n y
Robert G. L u e d e r
R o g e r Guffey
Henry R. Czerwinski
Gerald D . H i n e s
John V . J a m e s
C h e s t e r J. K e s e y
Paul N . H o w e l l
Carlos Zuniga
Robert H. B o y kin
William H. Wallace
Caroline L. A h m a n s o n
Alan C. Furth
Bruce M. S c h w a e g l e r
John C. H a m p t o n
Wendell J. A s h t o n
John W . Ellis
John J. Balles
Richard T. Griffith
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
Charlotte
Culpeper
and Records
21203
28230
Communications
Center
22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
N e w Orleans
30301
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. L O U I S
63166
Little R o c k
Louisville
72203
40232
Memphis
38101
MINNEAPOLIS
Helena
K A N S A S CITY
55480
59601
64198
D eknl avheor m a City
O
80217
73125
Omaha
68102
DALLAS
75222
El
H o uPsatsoon
79999
77252
San A n t o n i o
78295
SAN FRANCISCO
94120
Officer in charge of
branch or facility
Robert E. S h o w a l t e r
Harold J. Swart
Robert D . M c T e e r , Jr.
Albert D . T i n k e l e n b e r g
John G. S t o i d e s
Fred R. Herr
Charles D . East
Patrick K . Barron
Jeffrey J. Wells
James D. Hawkins
William C. Conrad
John F. B r e e n
J a m e s E. Conrad
Randall C. S u m n e r
Robert F . M c N e l l i s
W a y n e W. Martin
William G. E v a n s
Robert D. H a m i l t o n
Joel L. K o o n c e , Jr.
J.Z. Rowe
Thomas H. Robertson
Richard C. D u n n
Los Angeles
90051
A n g e l o S. Carella
A . Grant H o l m a n
Portland
97208
Gerald R. K e l l y
Salt L a k e City
84125
Seattle
98124
*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.
A74
Federal Reserve Board Publications
Copies are available
from P U B L I C A T I O N S S E R V I C E S ,
Mail S t o p 138, Board o f G o v e r n o r s of the Federal R e s e r v e
S y s t e m , W a s h i n g t o n , D . C . 20551. When a charge is indicated, remittance
should
accompany
request
and be
made
THE
FEDERAL
RESERVE
SYSTEM—PURPOSES
AND
FUNC-
A N N U A L REPORT.
FEDERAL RESERVE B U L L E T I N . M o n t h l y . $ 2 0 . 0 0 p e r y e a r o r
$2.00 e a c h in the U n i t e d S t a t e s , its p o s s e s s i o n s , Canada,
and M e x i c o ; 10 or m o r e of s a m e i s s u e to o n e address,
$18.00 per year or $1.75 e a c h . E l s e w h e r e , $24.00 per
year or $2.50 e a c h .
BANKING AND MONETARY STATISTICS. 1 9 1 4 - 1 9 4 1 .
(Reprint
of Part I only) 1976. 682 pp. $5.00.
AND
MONETARY
STATISTICS.
OPEN MARKET POLICIES A N D OPERATING
PROCEDURES—
STAFF STUDIES. 1971. 218 pp. $2.00 e a c h ; 10 or m o r e to
o n e address, $1.75 e a c h .
REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHANISM. Vol. 1. 1 9 7 1 . 2 7 6 p p . Vol. 2. 1 9 7 1 . 173 p p . Vol. 3.
1972. 220 pp. E a c h V o l u m e $3.00; 10 or more to o n e
address, $2.50 e a c h .
THE ECONOMETRICS OF PRICE DETERMINATION
1941-1970.
1976.
1,168 pp. $15.00.
A N N U A L STATISTICAL DIGEST
1971-75. 1976. 339 pp. $ 5 . 0 0 per c o p y .
1972-76. 1977. 377 pp. $10.00 per c o p y .
1973-77. 1978. 361 pp. $ 1 2 . 0 0 per c o p y .
1974-78. 1980. 305 pp. $10.00 per c o p y .
1970-79. 1981. 587 pp. $20.00 per c o p y .
1980.
1981. 241 pp. $10.00 per c o p y .
1981.
1982. 239 pp. $ 6 . 5 0 per c o p y .
FEDERAL RESERVE CHART BOOK. Issued four times a year in
February, M a y , A u g u s t , and N o v e m b e r . Subscription
includes o n e i s s u e of Historical Chart B o o k . $7.00 per
year or $2.00 e a c h in the U n i t e d States, its p o s s e s s i o n s ,
Canada, and M e x i c o . E l s e w h e r e , $10.00 per year or
$3.00 e a c h .
HISTORICAL CHART BOOK. I s s u e d annually in S e p t . Subscription to the Federal R e s e r v e Chart B o o k includes o n e
i s s u e . $1.25 e a c h in the U n i t e d States, its p o s s e s s i o n s ,
Canada, and M e x i c o ; 10 or more to o n e address, $1.00
e a c h . E l s e w h e r e , $1.50 e a c h .
SELECTED INTEREST A N D EXCHANGE RATES—WEEKLY SE-
RIES OF CHARTS. W e e k l y . $15.00 per year or $.40 e a c h in
the U n i t e d States, its p o s s e s s i o n s , Canada, and M e x i c o ;
10 or m o r e of s a m e i s s u e to o n e address, $13.50 per year
or $.35 e a c h . E l s e w h e r e , $20.00 per year or $.50 e a c h .
THE FEDERAL RESERVE ACT, as a m e n d e d through April 20,
1983, with an appendix containing p r o v i s i o n s of certain
other statutes affecting the Federal R e s e r v e S y s t e m . 576
pp. $7.00.
REGULATIONS OF THE BOARD OF GOVERNORS OF THE F E D ERAL RESERVE SYSTEM.
REPORT OF THE JOINT TREASURY-FEDERAL RESERVE S T U D Y
OF THE U . S . GOVERNMENT SECURITIES MARKET. 1 9 6 9 .
48 pp. $.25 e a c h ; 10 or m o r e to o n e address, $.20 e a c h .
JOINT TREASURY-FEDERAL RESERVE S T U D Y OF THE GOVERNMENT SECURITIES MARKET; STAFF S T U D I E S — P A R T
1. 1970. 86 pp. $.50 e a c h ; 10 or more to o n e address, $.40
e a c h . PART 2 , 1 9 7 1 . 153 p p . a n d PART 3, 1 9 7 3 . 131 p p .
Parts 2 and 3, $1.00 e a c h ; 10 or m o r e to o n e address, $.85
each.
TIONS. 1 9 7 4 . 125 p p .
BANKING
payable to the order of the Board of Governors
of the Federal
Reserve
System.
Remittance
from foreign
residents
should
be drawn on a U.S. bank. Stamps
and coupons
are not
accepted.
CONFER-
ENCE, O c t o b e r 3 0 - 3 1 , 1970, W a s h i n g t o n , D . C . 1972. 397
pp. Cloth ed. $5.00 e a c h ; 10 or more to o n e address,
$4.50 e a c h . Paper ed. $4.00 e a c h ; 10 or m o r e to o n e
address, $3.60 e a c h .
FEDERAL RESERVE S T A F F S T U D Y : WAYS TO MODERATE
FLUCTUATIONS IN HOUSING CONSTRUCTION. 1 9 7 2 . 4 8 7
pp. $4.00 e a c h ; 10 or m o r e to o n e address, $3.60 e a c h .
LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS.
1973. 271 pp. $3.50 e a c h ; 10 or more to o n e address,
$3.00 e a c h .
IMPROVING THE MONETARY AGGREGATES: REPORT OF THE
ADVISORY COMMITTEE ON MONETARY STATISTICS.
1976. 43 pp. $1.00 e a c h ; 10 or more to o n e address, $.85
each.
A N N U A L PERCENTAGE RATE TABLES ( T r u t h in
Lending—
Regulation Z) Vol. I (Regular Transactions). 1969. 100
pp. Vol. II (Irregular Transactions). 1969. 116 pp. E a c h
v o l u m e $1.00; 10 or m o r e of s a m e v o l u m e to o n e
address, $.85 e a c h .
FEDERAL RESERVE MEASURES OF CAPACITY A N D CAPACITY
UTILIZATION. 1978. 40 pp. $1.75 e a c h ; 10 or more to o n e
address, $1.50 e a c h .
THE BANK
HOLDING
COMPANY
MOVEMENT TO 1978:
A
COMPENDIUM. 1978. 289 pp. $2.50 e a c h ; 10 or m o r e to
o n e address, $2.25 e a c h .
IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS.
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$3.75 each.
1 9 7 7 CONSUMER CREDIT SURVEY. 1 9 7 8 . 119 p p . $ 2 . 0 0 e a c h .
FLOW OF F U N D S ACCOUNTS. 1 9 4 9 - 1 9 7 8 . 1 9 7 9 . 171 p p . $ 1 . 7 5
e a c h ; 10 or m o r e to o n e address, $1.50 e a c h .
INTRODUCTION TO F L O W OF F U N D S . 1 9 8 0 . 6 8 p p . $ 1 . 5 0 e a c h ;
10 or more to o n e a d d r e s s , $1.25 e a c h .
PUBLIC POLICY A N D CAPITAL FORMATION.
1981. 326
pp.
$13.50 e a c h .
N E W MONETARY CONTROL PROCEDURES: FEDERAL R E SERVE STAFF S T U D Y , 1 9 8 1 .
SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES:
REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL
ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 e a c h .
A75
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$60.00 per year.
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Federal R e s e r v e R e g u l a t o r y S e r v i c e . 3 v o l s . (Contains all
three H a n d b o o k s plus substantial additional material.)
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Rates for subscribers
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E a c h H a n d b o o k , $ 7 5 . 0 0 per year.
WELCOME TO THE FEDERAL RESERVE, D e c e m b e r 1 9 8 2 .
PROCESSING B A N K H O L D I N G COMPANY A N D MERGER APPLICATIONS
SUSTAINABLE RECOVERY: SETTING THE STAGE, N o v e m b e r
1982.
REMARKS BY CHAIRMAN P A U L A . VOLCKER, AT A N N U A L
H U M A N RELATIONS A W A R D D I N N E R , D e c e m b e r 1 9 8 2 .
REMARKS BY CHAIRMAN P A U L A . VOLCKER, AT DEDICATION
CEREMONIES: FEDERAL RESERVE B A N K OF S A N FRAN-
CISCO, M a r c h 1983.
RESTORING STABILITY. REMARKS BY CHAIRMAN P A U L
A.
VOLCKER, April 1983.
CREDIT CARDS IN THE U . S . ECONOMY: THEIR IMPACT ON
COSTS, PRICES, A N D RETAIL SALES. J u l y 1 9 8 3 . 114 p p .
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Only Printed in the
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may be sent to Publications
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113. B E L O W THE BOTTOM L I N E : THE U S E OF CONTINGENCIES A N D COMMITMENTS BY COMMERCIAL B A N K S , b y
Benjamin W o l k o w i t z and others. Jan. 1982. 186 pp.
114. MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE
ON COMPETITION A N D PERFORMANCE IN BANKING
MARKETS, b y T i m o t h y J. Curry and John T. R o s e . Jan.
1982. 9 pp.
115. COSTS, SCALE ECONOMIES, COMPETITION, A N D PRODUCT M I X IN THE U . S . PAYMENTS MECHANISM, b y
D a v i d B . H u m p h r e y . Apr. 1982. 18 pp.
116. DIVISIA
MONETARY
AGGREGATES:
D A T A , A N D HISTORICAL BEHAVIOR,
COMPILATION,
by William A.
Barnett and Paul A . Spindt. M a y 1982. 82 pp.
117. T H E COMMUNITY
REINVESTMENT A C T AND
CREDIT
ALLOCATION, b y G l e n n Canner. June 1982. 8 pp.
118. INTEREST RATES A N D TERMS ON CONSTRUCTION
LOANS AT COMMERCIAL B A N K S , b y D a v i d F . S e i d e r s .
July 1982. 14 pp.
119. STRUCTURE-PERFORMANCE STUDIES IN BANKING: A N
U P D A T E D SUMMARY A N D EVALUATION, b y S t e p h e n A .
R h o a d e s . A u g . 1982. 15 pp.
1 2 0 . FOREIGN SUBSIDIARIES OF U . S . BANKING ORGANIZA-
CONSUMER
EDUCATION
Short pamphlets
copies available
suitable
without
TIONS, b y J a m e s V . H o u p t and M i c h a e l G. Martinson.
Oct. 1982. 18 pp.
PAMPHLETS
for classroom
charge.
121. REDLINING:
use.
Multiple
RESEARCH
AND
FEDERAL
LEGISLATIVE
RESPONSE, b y G l e n n B . Canner. Oct. 1982. 20 pp.
122. B A N K CAPITAL TRENDS A N D FINANCING, b y S a m u e l H .
Talley. F e b . 1983. 19 pp.
A l i c e in Debitland
C o n s u m e r H a n d b o o k to Credit Protection L a w s
T h e Equal Credit Opportunity A c t and . . . A g e
T h e Equal Credit Opportunity A c t and . . . Credit Rights in
Housing
The Equal Credit Opportunity A c t and . . . D o c t o r s ,
L a w y e r s , Small Retailers, and Others W h o M a y Provide
Incidental Credit
The Equal Credit Opportunity A c t and . . . W o m e n
Fair Credit Billing
Federal R e s e r v e G l o s s a r y
Guide to Federal R e s e r v e Regulations
H o w to File A C o n s u m e r Credit Complaint
If Y o u B o r r o w T o B u y S t o c k
If Y o u U s e A Credit Card
Series on the Structure
of the Federal Reserve
System
T h e Board of G o v e r n o r s of the Federal R e s e r v e S y s t e m
T h e Federal O p e n Market C o m m i t t e e
Federal R e s e r v e B a n k B o a r d of Directors
Federal R e s e r v e B a n k s
M o n e t a r y Control A c t of 1980
Organization and A d v i s o r y C o m m i t t e e s
Truth in L e a s i n g
U . S . Currency
What Truth in L e n d i n g M e a n s to Y o u
123. FINANCIAL
TRANSACTIONS
WITHIN
BANK
HOLDING
COMPANIES, by John T. R o s e and S a m u e l H . T a l l e y ,
M a y 1983. 11 pp.
124. INTERNATIONAL BANKING FACILITIES A N D THE EURO-
DOLLAR MARKET, by H e n r y S. Terrell and R o d n e y H .
Mills, A u g u s t 1983. 14 pp.
125. SEASONAL ADJUSTMENT OF THE WEEKLY MONETARY
AGGREGATES: A M O D E L - B A S E D APPROACH, b y D a v i d
A . Pierce, M i c h a e l R. Grupe, and William P. C l e v e l a n d ,
A u g u s t 1983. 23 pp.
REPRINTS
Most
OF BULLETIN
of the articles
reprinted
ARTICLES
do not exceed
12
pages.
P e r s p e c t i v e s on Personal S a v i n g . 8/80.
Federal R e s e r v e and the P a y m e n t s S y s t e m : Upgrading E l e c tronic Capabilities for the 1980s. 2/81.
S u r v e y of F i n a n c e C o m p a n i e s , 1980. 5/81.
Bank L e n d i n g in D e v e l o p i n g Countries. 9/81.
T h e C o m m e r c i a l Paper Market s i n c e the M i d - S e v e n t i e s . 6/82.
A p p l y i n g the T h e o r y of Probable Future C o m p e t i t i o n . 9/82.
International Banking Facilities. 10/82.
U . S . International T r a n s a c t i o n s in 1982. 4/83.
A76
Index to Statistical Tables
References
are to pages A3 through A68 although the prefix 'A" is omitted in this index
A C C E P T A N C E S , bankers, 11, 26, 28
Agricultural loans, commercial banks, 19, 20, 21, 27
Assets and liabilities ( S e e also Foreigners)
Banks, by classes, 18, 19-22
Domestic finance companies, 39
Federal Reserve Banks, 12
Foreign banks, U . S . branches and agencies, 23
Nonfinancial corporations, 38
Savings institutions, 30
Automobiles
Consumer installment credit, 42, 43
Production, 48, 49
B A N K E R S balances, 18, 19-21
(See also Foreigners)
Banks for Cooperatives, 35
Bonds (See also U . S . government securities)
N e w issues, 36
Rates, 3
Branch banks, 16, 22-23, 56
Business activity, nonfinancial, 46
Business expenditures on n e w plant and equipment, 38
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 12
Central banks, 67
Certificates of deposit, 22, 28
Commercial and industrial loans
Commercial banks, 16, 18, 23, 27
Weekly reporting banks, 19-23, 24
Commercial banks
A s s e t s and liabilities, 18, 19-22
Business loans, 27
Commercial and industrial loans, 16, 18, 23, 24, 27
Consumer loans held, by type, 42, 43
Loans sold outright, 22
Nondeposit fund, 17
Number, by classes, 18
Real estate mortgages held, by holder and property, 41
Time and savings deposits, 3
Commercial paper, 3, 26, 28, 39
Condition statements (See A s s e t s and liabilities)
Construction, 46, 50
Consumer installment credit, 42, 43
Consumer prices, 46, 51
Consumption expenditures, 52, 53
Corporations
Profits and their distribution, 37
Security issues, 36, 66
Cost of living (See Consumer prices)
Credit unions, 30, 42, 43
(See also Thrift institutions)
Currency and coin, 5, 18
Currency in circulation, 4, 14
Customer credit, stock market, 29
D E B I T S to deposit accounts, 15
Debt (See specific types of debt or
Demand deposits
Adjusted, commercial banks, 15
Banks, by classes, 18, 19-22
securities)
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 25
Turnover, 15
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 13
Deposits (See also specific
types)
Banks, by classes, 3, 18, 19-22, 30
Federal Reserve Banks, 4, 12
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 37
E M P L O Y M E N T , 46, 47
Eurodollars, 28
F A R M mortgage loans, 41
Federal agency obligations, 4, 11, 12, 13, 34
Federal credit agencies, 35
Federal finance
Debt subject to statutory limitation and types and
ownership of gross debt, 33
Receipts and outlays, 31, 32
Treasury financing of surplus, or deficit, 31
Treasury operating balance, 31
Federal Financing Bank, 31, 35
Federal funds, 3, 6, 19, 20, 21, 28, 31
Federal H o m e Loan Banks, 35
Federal H o m e 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, 12
Discount rates (See Interest rates)
U . S . government securities held, 4, 12, 13, 33
Federal Reserve credit, 4, 5, 12, 13
Federal Reserve notes, 12
Federally sponsored credit agencies, 35
Finance companies
A s s e t s and liabilities, 39
Business credit, 39
Loans, 19, 20, 21, 42, 43
Paper, 26, 28
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 30
Float, 4
Flow of funds, 44, 45
Foreign banks, assets and liabilities of U . S . branches and
agencies, 23
Foreign currency operations, 12
Foreign deposits in U . S . banks, 4 12, 19, 20, 21
Foreign exchange rates, 68
Foreign trade, 55
Foreigners
Claims on, 56, 58, 61, 62, 63, 65
Liabilities to, 22, 55, 5 6 - 6 0 , 64, 66, 67
A77
GOLD
Certificate account, 12
Stock, 4, 55
Government National Mortgage Association, 35, 40, 41
Gross national product, 52, 53
R E A L estate loans
Banks, by classes, 19-21, 41
Rates, terms, yields, and activity, 3, 40
Savings institutions, 28
Type of holder and property mortgaged, 41
Repurchase agreements and federal funds, 6, 19, 20, 21
Reserve requirements, 8
Reserves
Commercial banks, 18
Depository institutions, 3, 4, 5, 13
Federal Reserve Banks, 12
U . S . reserve assets, 55
Residential mortgage loans, 40
Retail credit and retail sales, 42, 43, 46
H O U S I N G , n e w and existing units, 50
I N C O M E , personal and national, 46, 52, 53
Industrial production, 46, 48
Installment loans, 42, 43
Insurance companies, 30, 33, 41
Interbank loans and deposits, 18
Interest rates
Bonds, 3
Business loans of banks, 27
Federal Reserve Banks, 3, 7
Foreign central banks and foreign countries, 67
M o n e y and capital markets, 3, 28
Mortgages, 3, 40
Prime rate, commercial banks, 27
Time and savings deposits, 9
International banking facilities, 17
International capital transactions
of United States, 5 4 - 6 7
International organizations, 58, 5 9 - 6 1 , 6 4 - 6 7
Inventories, 52
Investment companies, issues and assets, 37
Investments ( S e e also specific
types)
Banks, by classes, 18, 30
Commercial banks, 3, 16, 18, 19-21
Federal Reserve Banks, 12, 13
Savings institutions, 30, 41
SAVING
Flow of funds, 44, 45
National income accounts, 53
Savings and loan association, 9, 30, 41, 42, 43, 44 (See
Thrift institutions)
Savings deposits (See Time and savings deposits)
Securities (See specific
types)
Federal and federally sponsored credit agencies, 35
Foreign transactions, 66
N e w issues, 36
Prices, 29
Special drawing rights, 4, 12, 54, 55
State and local governments
Deposits, 19, 20, 21
Holdings of U . S . government securities, 33
N e w security issues, 36
Ownership of securities issued by, 19, 20, 21, 30
Rates on securities, 3
Stock market, 29
Stocks (See also Securities)
N e w issues, 36
Prices, 29
Of*'
L A B O R force, 47
Life insurance companies ( S e e Insurance companies)
Loans (See also specific
types)
Banks, by classes, 18, 19—22
Commercial banks, 3, 16, 18, 19-22, 23, 27
Federal Reserve Banks, 3, 4, 5, 7, 12, 13
Insured or guaranteed by United States, 40, 41
Savings institutions, 30, 41
MANUFACTURING
Capacity utilization, 46
Production, 46, 49
Margin requirements, 29
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 49
Mobile home shipments, 50
Monetary and credit aggregates, 3 , 1 3
Money and capital market rates (See Interest rates)
Money stock measures and components, 3, 14
Mortgages (See Real estate loans)
Mutual funds (See Investment companies)
Mutual savings banks, 9, 19-21, 30, 33, 41, 42, 43 (See
Thrift institutions)
N A T I O N A L defense outlays, 32
National income, 52
O P E N market transactions, 11
P E R S O N A L income, 53
Prices
Consumer and producer, 46, 51
Stock market, 29
Prime rate, commercial banks, 27
Producer prices, 46, 51
Production, 46, 48
Profits, corporate, 37
also
T A X receipts, federal, 32
Thrift institutions, 3 (See also Credit unions, Mutual
savings banks and, Savings and loan associations)
Time and savings deposits, 3 , 9 , 15, 18, 19-22
Trade, foreign, 55
Treasury currency, Treasury cash, 4
Treasury deposits, 4, 12, 31
Treasury operating balance, 31
also
U N E M P L O Y M E N T , 47
U . S . government balances
Commercial bank holdings, 19, 20, 21
Treasury deposits at Reserve Banks, 4, 12, 31
U . S . government securities
Bank holdings, 18, 19-21, 33
Dealer transactions, positions, and financing, 34
Federal Reserve Bank holdings, 4, 12, 13, 33
Foreign and international holdings and transactions, 12,
33, 67
Open market transactions, 11
Outstanding, by type and ownership, 33
Ownership of securities issued by, 30
Rates, 3, 28
U . S . international transactions, 5 4 - 6 7
Utilities, production, 49
V E T E R A N S Administration, 40, 41
W E E K L Y reporting banks, 19-24
Wholesale (producer) prices, 46, 51
Y I E L D S (See Interest rates)
A78
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
LEGEND
Boundaries of Federal Reserve Districts
®
Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
•
Federal Reserve Branch Cities
Federal Reserve Bank Facility
Q
Board of Governors of the Federal Reserve
System
Publications of Interest
FEDERAL RESERVE
REGULATORY
SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal
Reserve
Regulatory Service, a three-volume looseleaf service
containing all Board regulations and related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are
published separately as handbooks pertaining to monetary policy, securities credit, and consumer affairs.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated at least monthly, and each
contains conversion tables, citation indexes, and a
subject index.
The Monetary Policy and Reserve
Requirements
Handbook contains Regulations A, D, and Q plus
related materials. For convenient reference, it also
contains the rules of the Depository Institutions
Deregulation Committee.
The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together
with all related statutes, Board interpretations, rulings, and staff opinions. Also included is the Board's
list of OTC margin stocks.
The Consumer and Community Affairs
Handbook
contains Regulations B, C, E, M, Z, AA, and BB and
associated materials.
For domestic subscribers, the annual rate is $175 for
the Federal Reserve Regulatory Service and $60 for
each handbook. For subscribers outside the United
States, the price including additional air mail costs is
$225 for the Service and $75 for each Handbook. All
subscription requests must be accompanied by a check
or money order payable to Board of Governors of the
Federal Reserve System. Orders should be addressed
to Publications Services, Mail Stop 138, Federal Reserve Board, 20th Street and Constitution Avenue,
N.W., Washington, D.C. 20551.
Publications of Interest
FEDERAL RESERVE
PUBLICATIONS
CONSUMER
CREDIT
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects as
how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how
to use a credit card, and how to use Truth in Lending
information to compare credit costs.
The Board also publishes the Consumer
Handbook
to Credit Protection Laws, a complete guide to con-
sumer credit protections. This 44-page booklet explains how to use the credit laws to shop for credit,
apply for it, keep up credit ratings, and complain about
an unfair deal.
Protections offered by the Electronic Fund Transfer
Act are explained in Alice in Debitland. This booklet
offers tips for those using the new "paperless" systems for transferring money.
Copies of consumer publications are available free
of charge from Publications Services, Mail Stop 138,
Board of Governors of the Federal Reserve System,
Washington, D.C. 20551. Multiple copies for classroom use are also available free of charge.
LE4SING
LE4SMG
IBCHG
TRUTH IN LE4SING
What
Ihithln
Lending
Means
ToYou
CFIF
YOU USE A
CREDIT
CARD
ir
You
Borrow
T o Buy
Stock—
@FedFRASER