Full text of Federal Reserve Bulletin : September 1985
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VOLUME 71 •
NUMBER 9 •
SEPTEMBER 1 9 8 5
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 Linda C. Kyles.
Table of Contents
671 MONETARV POLICY
TO THE CONGRESS
REPORT
In working toward the goal of sustained
growth of the economy that is consistent
with progress toward price stability, developments with respect to the dollar and the
external position of the United States have
necessarily assumed greater prominance.
685 INDUSTRIAL
PRODUCTION
Output rose an estimated 0.1 percent in
June.
687 STATEMENTS
TO
CONGRESS
Paul A. Volcker, Chairman, Board of Governors, presents the views of the Federal
Reserve on regulation of the market for
Treasury and federally sponsored agency
securities, before the Subcommittee on Domestic Monetary Policy of the House Committee on Banking, Finance and Urban Affairs, July 9, 1985.
690 Chairman Volcker reviews monetary policy
in the context of recent and prospective
economic and financial developments and
amplifies some of the decisions of the Federal Open Market Committee set out in the
semiannual "Monetary Policy Report to the
Congress," before the House Committee
on Banking, Finance and Urban Affairs,
July 17, 1985. [Chairman Volcker presented
identical testimony before the Senate Committee on Banking, Housing, and Urban
Affairs on July 18, 1985.]
697 Preston Martin, Vice Chairman, Board of
Governors, discusses developments in the
external position of the United States and
related policies here and abroad, and says
that one of the most significant economic
developments for the United States in re
cent years has been the dramatic appreciation of the dollar, before the Subcommittee
on Economic Stabilization of the House
Committee on Banking, Finance and Urban
Affairs, July 18, 1985.
701 Chairman Volcker discusses the multilateral development institutions and their role
with respect to the debt and growth problems in the developing countries and says
that the International Monetary Fund and
the World Bank, and to a lesser degree, the
international development banks, have important roles to play in safeguarding international stability and in promoting sound
growth in the world economy, before the
Subcommittee on International Development Institutions and Finance of the House
Committee on Banking, Finance and Urban
Affairs, July 30, 1985.
706
ANNOUNCEMENTS
Resignation of Lyle E. Gramley as a member of the Board of Governors.
Appointment of advisory panel to assist in
development of a program to reduce risk on
large-dollar transfer systems.
Publication of revised list of OTC stocks
subject to margin regulations.
Extension of comment period on proposed
amendment to Regulation Z.
Admission of eight state banks to membership in the Federal Reserve System.
708 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET
COMMITTEE
At its meeting
mittee adopted
background of
discount rate,
on May 21, 1985, the Coma directive that, against the
the recent reduction in the
called for maintaining the
current degree of reserve restraint, abstracting from special situation borrowing
by thrift institutions. The members expected such an approach to policy implementation to be consistent with growth of Ml at
an annual rate of about 6 percent or a little
higher for the period from March to June.
Given the weakness in M2 and M3 in April,
growth in these broader aggregates over the
three-month period was now expected to be
slower than had been anticipated at the time
of the previous meeting. The members
agreed that somewhat lesser restraint on
reserve conditions would be acceptable in
the context of substantially slower growth
in the monetary aggregates, while somewhat greater restraint might be appropriate
if monetary growth were substantially faster. It was understood that the need for
lesser or greater restraint would be considered against the background of developments relating to the strength of the business expansion, inflationary pressures, and
conditions in domestic credit and foreign
exchange markets. The members agreed
that the intermeeting range for the federal
funds rate, which provides a mechanism for
initiating consultation of the Committee
when its boundaries are persistently exceeded, should be left unchanged at 6 to 10
percent.
715 LEGAL
DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
Ai FINANCIAL AND BUSINESS
STATISTICS
A3 Domestic Financial Statistics
A44 Domestic Nonfinancial Statistics
A53 International Statistics
A69 GUIDE TO TABULAR PRESENTATION,
STATISTICAL RELEASES, AND SPECIAL
TABLES
A70 BOARD OF GOVERNORS AND STAFF
A72 FEDERAL OPEN MARKET COMMITTEE
AND STAFF; ADVISORY COUNCILS
A74 FEDERAL RESERVE
PUBLICATIONS
BOARD
A77 INDEX TO STATISTICAL
TABLES
A79 FEDERAL RESERVE BANKS,
AND OFFICES
BRANCHES,
A80 MAP OF FEDERAL RESERVE
SYSTEM
Monetary Policy Report to the Congress
Report submitted to the Congress on July 16,
1985, pursuant to the Full Employment
and
Balanced Growth Act of 1978.1
MONETARY POLICY AND THE ECONOMIC
OUTLOOK FOR 1985 AND 1986
The fundamental objective of the Federal Reserve in charting a course for monetary and debt
expansion remains unchanged—to foster a financial environment conducive to sustained growth
of the economy, consistent with progress over
time toward price stability. In working toward
those goals, developments with respect to the
dollar and our external position have necessarily
assumed greater prominence. More generally,
while policy initiatives are stated in terms of
growth rates of certain monetary and credit
aggregates, the Federal Open Market Committee
has emphasized the need to interpret those aggregates in the light of other information about
the economy, prices, and financial markets.
Moreover, the monetary targets for 1985 needed
to be evaluated, and in the case of Ml adjusted,
in light of the unusual and unexpected behavior
of gross national product relative to money during the first half of this year.
Economic
and Financial
Background
Economic activity continued to expand during
the first half of 1985, but at a relatively slow
pace. Real gross national product probably increased at an annual rate of less than 2 percent,
falling short of the expectations of many forecasters and of the rate anticipated for the year by
members of the Federal Open Market Committee
1. The charts to the report are available on request from
Publications Services, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
(FOMC) when they formulated their annual monetary policy plans in February. While the economic environment was conducive to the containment of inflation within the Vh to 4 percent
range of the past few years, there has been no
further progress toward full employment of the
nation's labor resources or industrial capacity.
Indeed, the unemployment rate has remained at
about 1V4 percent, well below the peak of the
1981-82 recession, but still at a historically high
level.
The slowing of output growth, which began in
the middle of 1984, has brought into sharper
focus the unevenness of this business expansion
and the significance of some basic structural
imbalances in the economy. The federal budget
deficit has remained in the neighborhood of $200
billion, rather than moving in the direction of
balance as might normally be expected in the
course of an upswing in economic activity. The
heavy demands placed on the credit markets by
the Treasury's financing activities have, in turn,
been one factor helping to hold real interest rates
at historically high levels. And those high rates
have contributed to the strong demand of international investors for dollar-denominated assets
and thus to the strength of the dollar on foreign
exchange markets.
Although the dollar was little changed on balance over the first half, with a spike in its value
early in the year being subsequently reversed,
the adverse effects on the U.S. trade position of
the appreciation of the preceding several years,
together with slow economic growth abroad,
were very much in evidence. U.S. firms continued to face severe competitive pressures, and
our exports fell while our imports rose. The
widening current account deficit was mirrored in
the continuing gap between the growth of domestic spending and domestic production. Moreover, the effects of this imbalance were felt with
particular severity in the manufacturing, mining,
and agricultural sectors of the economy, in which
672
Federal Reserve Bulletin • September 1985
profitability was squeezed overall and employment declined.
The lagging growth of production, relatively
well contained inflationary pressures on resources, and the high value of the dollar on
exchange markets provided the backdrop for the
conduct of monetary policy in the past several
months. Reserves available to the banking system expanded substantially over the first half of
the year, and the discount rate was cut one-half
percent in the spring. With the economic expansion slowing, interest rates—which had declined
sharply from the summer of 1984 to early 1985—
dropped somewhat further on balance by midyear.
The declines in market interest rates in the
latter part of last year and this year had substantial effects, lasting for a number of months, on
the demands for assets contained in Ml. Some
savings apparently were shifted into interestearning checking accounts (negotiable order of
withdrawal accounts) from other instruments,
and demand deposits also rose, as the cost of
holding these accounts in terms of earnings forgone was reduced. As a result of the shifts of
funds, Ml expanded at an annual rate of about
IOV2 percent over the first half of the year (measured from the fourth quarter of 1984 to the
second quarter of 1985), well above the range of
4 to 7 percent established by the FOMC in
February. At the same time, however, the broader monetary aggregates remained within their
designated ranges. Over the period, M2 and M3
expanded at annual rates of S3A and 8 percent
respectively, as compared with their growth
ranges of 6 to 9 and 6 to 9Vz percent. Growth in
domestic nonfinancial sector debt over the first
two quarters of the year was a little above its
monitoring range of 9 to 12 percent, as debt
issued to finance mergers and otherwise retire
stock issues continued stronger than had been
expected earlier.
The rapid growth of Ml in the first half of the
year was accompanied by a sharp drop in the
velocity of the aggregate: Ml velocity—the ratio
of nominal GNP to money—declined at an annual rate of about 5 percent. In some respects, that
development is reminiscent of experience in
1982-83, when a large drop in interest rates also
was accompanied by a marked decline in Ml
velocity, with the attractiveness of Ml-type bal
ances enhanced by the availability of explicit
interest on NOW accounts. There is evidence
from recent experience, as well as from research
on the interest responsiveness of the demand for
money, suggesting that such episodes might be
expected as the economy and financial markets
adjust over time to further progress toward price
stability and as the inflation premium in interest
rates consequently diminishes. As this occurs,
probably in unpredictable spurts, the public's
demand for Ml will tend to rise and the level of
Ml velocity could drop more or less "permanently." However, there will be uncertainty
about such a conclusion until it becomes apparent in the period ahead whether velocity is
returning toward trend or whether it is tending to
rise rapidly because the public is reducing its
"excess" money balances by spending or investing them; in the latter case, the drop in velocity
in the past two quarters could be reversed to
some extent.
The recent developments affecting Ml illustrate the still considerable uncertainties about
the shorter-run behavior and trend of its velocity. Over the past three and a half years, the
income velocity of Ml actually has declined
slightly on balance. In contrast, over the preceding three decades, velocity had increased more
than 3 percent per year, on average. Velocity
changes are influenced by the behavior of interest rates, but the extent of interest rate impact is
variable and may be changing as the public and
depository institutions adjust to the new deposit
instruments and deregulation of deposit ceiling
rates of recent years. Moreover, the underlying
trend of velocity will also be influenced by the
rate of financial innovation. While that may slow
down once the adjustment is made to a deregulated environment and with lower interest rates,
increased computerization could also work toward a rise in velocity over time as the efficiency
of the payments system increases.
Ranges for Money
in 1985 and 1986
and Debt
Growth
In reexamining its Ml range for 1985 and in
setting a tentative range for 1986, the Committee
expected that velocity, after its sharp decline in
the first half of this year, would cease falling
Monetary Policy Report to the Congress
rapidly—while recognizing that much of the recent decline may not be reversed. Allowance
also needed to be made for the high degree of
uncertainty surrounding the behavior of Ml velocity, given the experience of the past few
years. To take account of these considerations,
the base for the range of Ml was shifted forward
to the second quarter of 1985, and the range was
set to encompass growth at an annual rate of 3 to
8 percent over the second half of this year. This
range contemplates a substantial slowing in
growth from the pace of the first half, and the
lower part of the range implies a willingness to
see relatively slow growth should the recent
velocity decline be reversed and economic
growth be satisfactory.
The appropriateness of the new range will be
under continuing review in light of evidence with
respect to economic and financial developments,
including conditions in foreign exchange markets. It was noted that, because of the burst of
money growth in June, the current level of Ml is
high relative to the new range. The Committee
expected that the aggregate would move into the
new range gradually over time as more usual
behavior of velocity emerged.
For 1986, the Ml range was tentatively set at 4
to 7 percent. The Committee recognized that
uncertainties about interest rates and other factors that could affect velocity would require
careful reappraisal of the range at the beginning
of that year. In addition, it was noted that actual
experience with institutional and depositor behavior after the completion early next year of
deposit-rate deregulation would need to be taken
into account in judging the appropriateness of the
ranges. At the beginning of next year, regulatory
minimum balance requirements on Super NOW
accounts and money market deposit accounts
will be removed, and at the end of March 1986,
deposit ceiling rates will be lifted entirely, affecting savings deposits and regular NOW accounts.
The accompanying table summarizes decisions
with respect to the ranges of growth for the
aggregates for 1985 and 1986. Except for Ml in
1985, the growth ranges apply to one-year periods measured on a fourth-quarter-to-fourth-quarter basis. The Ml range for 1985 applies to the
second half of the year, as noted above.
With respect to the broader monetary and
credit aggregates, the Committee reaffirmed the
673
Ranges of growth for monetary and debt aggregates
Percent changes
1985
Aggregate
Ml
M2
M3
Debt
3
6
6
9
to
to
to
to
81
9
9 Vi
12
Tentative
for 1986
4
6
6
8
to
to
to
to
7
9
9
11
1. Applies to period from second quarter to fourth quarter.
1985 ranges for M2, M3, and domestic debt that
had been established in February. It is recognized, as at the start of the year, that actual
growth over the four quarters of 1985 might be
toward the upper parts of the ranges, and it was
felt that this would be acceptable, depending on
developments in the velocities of the various
measures, as long as inflationary pressures remained subdued.
The tentative ranges for 1986 for M3 and total
debt embody reductions from 1985—in the case
of debt by a full percentage point and in the case
of M3 by Vi percentage point on the upper limit.
The range for M2 was left unchanged. In the case
of the monitoring range for debt, it was assumed
that, while debt might well continue its tendency
of recent years to grow considerably faster than
GNP, its expansion would be tempered by a
drop-off in the net redemption of equity shares
that has boosted corporate credit use dramatically in the past year or two.
Economic
Projections
All the monetary ranges specified were felt to be
consistent with somewhat more rapid economic
growth than has characterized the first half of the
year, as long as inflationary pressures remain
contained. At the same time, Committee members felt that the present circumstances in the
economy contain particular risks and uncertainties that can imperil progress toward either
growth or price stability over the next year and a
half. Clearly, the serious imbalances referred to
earlier cannot be remedied through the actions of
the central bank alone. Attainment of fully satisfactory economic performance and minimization
of risks will require timely action in other areas
of policy, here and abroad.
The economic projections of the members of
674
Federal Reserve Bulletin • September 1985
the FOMC, as well as of the Reserve Bank
Presidents who are not at present members of the
Committee, are summarized in the accompanying table. The central tendency of the forecasts
for real GNP points to some pickup in the pace of
expansion in the second half of this year. The
expected strengthening, given the slow growth in
the first half, still would leave the GNP expansion for the year as a whole short of the range
reported by the Federal Reserve in February and
below the forecasts published by the administration to date.
The FOMC members and the other Reserve
Bank Presidents expect growth in the range of
2Vi to VA percent during 1986. Such a rise in
output is seen as entailing substantial gains in
employment, enough to bring about a small decrease in the civilian unemployment rate to
around 7 percent by the end of next year. With
pressures in labor and product markets limited,
most FOMC members and other Presidents foresee only a marginal increase, if any, in the rate of
inflation in 1986. It should be noted, however,
that these projections are based on an assumption that the exchange value of the dollar will not
deviate substantially from its recent levels.
Economic projections for 1985 and 19861
FOMC members and
other FRB Presidents
Item
Ranee
Central
tendency
Kange
1985
Percent change, fourth quarter to
fourth quarter
Nominal GNP
Real GNP
Implicit deflator for GNP
6'/4 to VA
2 V* to 3'/4
3'/2 to 4'/4
6'/2 to 7
2VA to 3
33A to 4
Average level in the fourth quarter,
percent
Unemployment rate
6VA to 7'/4
7 to 7'/4
1986
Percent change, fourth quarter to
fourth quarter
Nominal GNP
Real GNP
Implicit deflator for GNP
5'/2 to 8'/2
2 to 4
3 to 5!/2
7 to IV2
2Vi to 3'/4
3
3 /4 to 43/4
Average level in the fourth quarter,
percent
Unemployment rate
63/4 to 7'/2
6% to IV*
1. The administration has yet to publish its mid-session budget
review document, and consequently the customary comparison of
FOMC forecasts and administration economic goals has not been
included in this report.
The projections for a pickup in GNP growth
over the reduced rate of the first half of this year
are based in part on the expectation that the
declines in interest rates (and concomitant rise in
stock prices) that have occurred over the past
few quarters will be providing impetus to demand for goods and services in the months
ahead. Consumer attitudes toward spending appear favorable, and housing activity already has
shown improvement, although the FOMC members are somewhat concerned by the rising debt
burdens of households and the increasing payment problems suggested by figures on consumer
and mortgage loan delinquencies. In the business
sector, inventory overhangs appear to be limited
in scope and degree, and fixed investment seems
to have picked up a little after exhibiting some
weakness earlier this year; the lower cost of
capital and desires to cut costs and maintain
competitiveness are expected to keep investment
on a moderate uptrend, even though pressures
on capacity may not be great. Spending by the
federal government and by states and localities is
expected to grow rather slowly.
A key ingredient in many of the projections is
the expectation that there will be a tendency in
the coming year for our external position to
stabilize, so that domestic production will more
fully reflect the expansion of domestic demand.
Developments in this area will, of course, depend in part on the course of economic expansion abroad. Were the U.S. external position to
continue deteriorating as it has been, the sectoral
imbalances in the economy would be exacerbated, creating further difficulties for many companies, their employees, and their communities.
The draining off of income would jeopardize the
sustainability of economic expansion, and the
risks of economic and financial dislocations
would intensify.
The FOMC members and other Presidents also
assumed in their policy deliberations and in their
projections that the Congress and the administration would achieve deficit reductions in the range
of those in the recent House and Senate budget
resolutions. Failure to move forward with those
proposals would run a serious risk of reversing
the favorable effects that congressional actions
to date have had on investor expectations and
would create a real impediment to the solution of
Monetary Policy Report to the Congress
the structural problems plaguing our economy
today.
THE PERFORMANCE OF THE
IN THE FIRST HALF OF 1985
ECONOMY
After a year and a half of extraordinarily rapid
growth, economic activity decelerated abruptly
in the middle of 1984 and slowed somewhat
further in the first half of 1985. Growth in real
gross national product is estimated to have averaged less than 2 percent at an annual rate so far
this year; the unemployment rate has remained
flat at about IVA percent. Inflation has held at the
lower pace reached during the 1981-82 recession.
To some extent, the moderation in growth
during the past year has reflected the slowing in
household and business spending that often occurs after the initial phase of cyclical recovery.
Pent-up demand for housing and consumer durables generally fades as an expansion period
lengthens, and growth in business fixed investment often exhibits some cyclical deceleration
over time. However, the recent slowing in
growth also reflects factors unique to this expansion.
In particular, this expansion has taken place in
the context of a highly stimulative federal fiscal
policy. Real GNP grew more rapidly in 1983 and
the first half of 1984 than in any previous recovery since the Korean War. Ultimately, some
slowing in growth would have been required to
avoid inflationary overheating of the economy.
However, even before that point was reached,
the initial effect of the fiscal stimulus began to
wane, dissipated in part through its contribution
to a worsening U.S. competitive position in
international trade and diversion of demand
away from goods produced in the United States.
The pronounced increases in the merchandise
trade and current account deficits have occurred
as enormous federal deficits and resultant heavy
borrowing by the federal government have added
to other factors helping to keep U.S. interest
rates at high levels, relative both to historical
experience and to the rate of inflation. These
credit demands have been met partly through a
substantial inflow of foreign capital, which has
been associated with a large appreciation in the
675
foreign exchange value of the U.S. dollar. The
strong dollar has encouraged U.S. consumers
and businesses to increase greatly the portion of
their expenditures devoted to imports, and at the
same time has inhibited U.S. exports. Exports
also have been restrained by slow growth in
demand abroad. As a result, gains in domestic
demand have outstripped those in domestic production by a wide margin throughout the expansion period.
The effects of the weakening trade balance in
the past few years have been felt keenly in the
manufacturing sector. Industrial production,
which began to level off in the summer of 1984,
remained stagnant in the first half of 1985, and
employment in the manufacturing sector declined. The strong dollar also has exacerbated
the economic problems of farmers, many of
whom face difficult adjustments because of falling product prices and the need to service a large
volume of debt accumulated during the inflationary period of the 1970s and early 1980s.
Thus far, however, the weakness in the manufacturing and agricultural areas has been more
than offset by strong gains in other sectors.
Domestic final demand rose at an annual rate of
3V2 percent in the first quarter of 1985, about the
same as in the second half of last year; secondquarter gains also appear to have been substantial. Spending in such interest-sensitive areas as
autos and housing was particularly strong in the
first half of 1985, reflecting in part lower credit
costs that have emerged since mid-1984.
The strength of the dollar also has had a
restraining influence on inflation, by reducing
import prices and by forcing U.S. producers to
adopt more competitive pricing strategies. Inflationary pressures have been limited, too, by the
lack of pressure on resources here and the slack
abroad. Most measures of overall price increase
remained in the 4 percent range in the first half of
1985, but prices of manufactured goods rose little
and significant downward pressures on prices
were evident in markets for oil and basic commodities.
The Household
Sector
Growth in real disposable income continued to
slow in the first half of 1985, reflecting smaller
676
Federal Reserve Bulletin • September 1985
increases in interest income as well as weakness
in manufacturing payrolls and in farm income.
Nonetheless, gains in household spending, especially in the interest-sensitive sectors, were sizable and supported by continued heavy borrowing. As a result, the personal saving rate fell
appreciably below last year's level of 6 percent.
Consumer spending for new cars was particularly strong in the first half. Total auto sales
averaged nearly 11 million units at an annual
rate, with sales of domestic models around their
highest level for a six-month period since 1979.
The strength in auto sales was partly attributable
to the improved availability of many popular
domestic models since the strike-related disruptions in production last fall. In addition, auto
demand was bolstered by generally lower interest rates compared with those of last year and by
some special financing programs offered by manufacturers. Sales of foreign cars were held down
in the first quarter because supplies of Japanese
models were limited at the end of the annual
period for the voluntary export restraint program. Foreign car sales picked up in the spring
and early summer, however, when Japanese cars
shipped after the start of the new annual period
began to arrive at U.S. dealerships.
Meanwhile, activity in the housing market has
rebounded since last fall. Housing starts rose to
an annual rate of 1.8 million units on average in
the first five months of 1985, retracing nearly all
of the decline that occurred in the latter half of
last year after rates on fixed-rate mortgages
temporarily rose to the 14 percent range. Housing activity generally has been quite robust in
this expansion period despite high real interest
rates. Demand for owner-occupied units has
been buoyed by the movement of the "baby
boom" generation into its prime home-buying
years, as well as by the beneficial effects of
stable house prices and innovative financing
techniques, such as adjustable-rate mortgages,
on the aflfordability of homes.
The strong gains in household spending over
the past two and a half years have been accompanied by considerable alterations in balance
sheets. The ratio of household debt to income
has increased rapidly and is now well above its
1980 peak. Asset growth has been strong as well,
however, and the ratio of financial assets to
income has risen sharply in the past year, owing
in part to the rapid rise in stock prices.
The incidence of payment difficulties on consumer installment debt has risen somewhat in the
past half year or so from relatively low levels.
Delinquency and foreclosure rates on home
mortgages have been at high levels for some
time, and they rose further in early 1985. The
large number of defaulted mortgage loans partly
reflects rates of unemployment that are still high
and the weakness of home prices in many locales, which has left some homeowners with
little equity to protect when they encounter
financial difficulties. However, aggressive underwriting of some mortgages, including loans carrying lower payments in the first years, appears
to be a contributing factor.
The Business
Sector
Conditions in the business sector were mixed in
the first half of 1985. Many industrial firms
experienced pressures on profit margins in an
environment of intense price competition and
declining capacity utilization, and widespread
financial strains continued to be present in the
agricultural and energy sectors. At the same
time, however, some other sectors of the economy recorded good gains in sales and income.
Economic profits for corporations in the aggregate remained at the higher level reached after
the sharp runup earlier in the expansion, with
after-tax profits as a percent of GNP at the
highest levels seen for any sustained period since
the late 1960s.
Growth in business spending for fixed capital
began to slow in the latter half of 1984, after a
period of extraordinary expansion, and a further
slowing occurred in the first part of 1985. The
weakening has been most pronounced in equipment outlays, affecting both the high-technology
categories and more traditional types of industrial equipment. Nevertheless, surveys of capital
spending intentions taken in the first half of the
year indicated that businesses still planned a
healthy expansion in outlays for 1985 as a whole.
A relatively large proportion of these expenditures reportedly was earmarked for replacement
and modernization rather than expansion of ca-
Monetary Policy Report to the Congress
pacity, reflecting a desire to cut costs and improve competitiveness. Meanwhile, spending for
nonresidential construction, particularly offices
and stores, continued at strong rates in the first
half of 1985, and construction contracts rose
further despite very high vacancy rates in many
parts of the country.
The pace of inventory accumulation in the
business sector has been moderate in recent
months. In real terms, business inventories rose
about $19 billion at an annual rate in the first
quarter of 1985, compared with an average gain
of $25 billion in 1984; inventory accumulation
probably was still lower in the second quarter.
Manufacturers, especially those facing intense
import competition, have continued to be cautious in adding to inventories. Total stocks in this
sector declined in both April and May, and
inventory-sales ratios for the most part remain
near historical lows. In the trade sector—with
the notable exception of the car industry—inventory-sales ratios have remained a bit high,
though, and selected efforts to pare stocks have
continued.
With slower growth in investment in the first
half of 1985, the gap between capital expenditures and internal funds of firms remained moderate. Nevertheless, businesses continued to
borrow heavily, reflecting a continued massive
amount of equity retirements by firms engaged in
mergers and other corporate restructurings. As a
result, debt-equity ratios have risen for a number
of firms, especially in the petroleum industry in
which a major restructuring is currently taking
place. However, for most other firms, equity
additions through retained earnings or sales of
new shares have been considerable. With rising
stock prices, debt-equity ratios for these firms,
when their assets and liabilities are measured at
current market values, have shown some decline
in recent months.
Nonetheless, financial strains, in many cases
related to the high foreign exchange value of the
dollar, persist in some areas of the economy. In
particular, low capacity utilization rates in a
number of import-sensitive manufacturing industries, including machine tools, steel, some types
of chemicals, and textiles, have intensified pressures on profitability. In addition, large segments
of the farm sector continue to suffer greatly from
677
reduced exports, depressed land prices, and low
incomes; many farmers face serious debt-servicing problems, causing problems in turn for agricultural lenders. In the energy sector, continued
downward pressure on world oil prices has
caused petroleum drilling to be curtailed, which
has strained the earnings of many oilfield equipment and servicing firms.
The Government
Sector
Federal tax receipts continued to rise substantially in the first half of 1985, but so too did
outlays, and the deficit for fiscal year 1985 likely
will be around $200 billion. This deficit represents about 5 percent of total GNP and more than
half of net private domestic saving. Federal
purchases of goods and services, the part of
federal spending that enters directly into GNP
and constitutes about a third of total outlays,
rose comparatively moderately in the first half of
1985; defense procurement, an area of rapid
growth in spending over the past few years, grew
at a reduced pace as outlays lagged more than is
typical relative to appropriations. Real nondefense purchases (excluding the Commodity
Credit Corporation) continued to be relatively
flat.
Purchases by state and local governments
were essentially unchanged in the first quarter
but evidently rose in the second as construction
outlays increased significantly in the spring.
States and localities, many of which had serious
fiscal difficulties in the last recession, generally
have been cautious in raising spending throughout this expansion period, though they have been
endeavoring to address the problem of an aging
infrastructure. The combination of spending restraint and improved revenues, owing both to
legislated tax increases and to rising incomes,
has resulted in a substantial rise in the operating
and capital account surpluses of state and local
governments since 1982.
The External
Sector
The external sector has come to play an increasingly important role in the U.S. economy. Mer-
678
Federal Reserve Bulletin • September 1985
chandise imports have risen rapidly in this expansion, moving above 15 percent of real domestic expenditures on goods in the first half of 1985.
The increase in import penetration has been
widespread, occurring in both the consumer and
the capital goods sectors as well as in industrial
supplies.
Although U.S. exports increased in 1983 and
1984, they grew much less than imports and have
not yet regained their previous peak. In the first
half of 1985, exports, particularly of agricultural
products, have declined somewhat. As a result of
these trends, the current account deficit has
widened dramatically over the past few years,
reaching an annual rate of $120 billion in the first
quarter of 1985.
Part of this imbalance reflects the stronger
growth of demand in the U.S. economy since
1982 relative both to the other industrial countries and to the debt-burdened developing countries. Although this influence has lessened with
the slowing of the U.S. economic expansion
since the middle of last year, there has been no
acceleration in growth in the other industrial
countries, and many developing countries have
continued to face financial constraints. The
greater share of the imbalance, however, probably is attributable to the substantial appreciation
of the dollar over the past few years. On average
during the first half of this year, the tradeweighted value of the dollar was roughly 70
percent above its level five years earlier.
The appreciation of the dollar and the underlying demand of investors for dollar-denominated
assets and other claims on the United States
have been partly associated with differentials
between real rates of return on U.S. and foreign
assets. The enormous federal budget deficits
have been an important factor contributing to
these differentials. The moderation in interest
rates that has accompanied the slowing of the
economic expansion in the United States since
mid-1984 appears to have eased some of the
upward pressure on the dollar; after rising sharply through the first two months of this year, the
exchange value of the dollar has trended downward and is now around the level of late last
summer. Nevertheless, the high level of the
dollar continues to limit the ability of U.S. producers to compete both at home and abroad.
Labor
Markets
Growth in labor demand generally remained
strong in the first half of 1985, and the number of
workers on nonfarm payrolls increased 1.4 million. The bulk of the job growth was in the
service and trade sectors, in which employment
in the past six months has expanded at rates
similar to last year's rapid pace. Increases in the
restaurant and business services areas have been
especially large. Construction employment also
showed a sizable gain in the first half of 1985,
along with significant growth in both residential
and nonresidential construction. In contrast,
manufacturing employment dropped about
220,000, with cutbacks in payrolls widespread
among industries.
Despite the substantial gains in overall payroll
employment, the unemployment rate has remained at about IV4 percent, the level that has
prevailed since last June. The labor force participation rate was up appreciably on average during
the first half; the rise occurred primarily among
adult women, who evidently were responding to
the increase in job opportunities in the service
and trade sectors in which 80 percent of adult
women are now employed.
Wage inflation has remained restrained. Yearover-year changes in the employment cost index
for wages and salaries, a relatively comprehensive measure for the private nonfarm business
economy, have held steady at just over 4 percent
for nearly a year. This is about 1 percentage
point less than in 1983 and early 1984, and
substantially below the peak rate of about 9
percent reached in 1980. The slowing in union
wage increases over the past several years has
been especially large. Union wage gains both in
and out of manufacturing have been below the
increases posted in nonunionized sectors for the
past year and a half, causing a partial erosion of
the differential that had built up over the years
before the last recession. Major collective bargaining agreements negotiated in early 1985 indicate continued moderate wage growth in the
unionized sectors.
Productivity in the nonfarm business sector
appears to have declined in the first half of 1985,
after increases amounting to 4 percent in 1983
and 2Vi percent in 1984. Both the recent slowing
Monetary Policy Report to the Congress
in productivity and the substantial gains earlier in
the recovery largely reflect the fact that employment tends to respond more slowly than output
to changes in demand. However, improvements
in productivity appear to continue to be a major
priority of both workers and management, as
evidenced by widespread reports of modernization of facilities as well as relaxation of work
rules and other steps to enhance efficiency and
hold down costs.
The combination of improved productivity
growth and relatively restrained wage gains in
this expansion has resulted in a sizable deceleration in the average rate of increase in unit labor
costs relative to the previous several years.
Although unit labor costs have risen this year in
response to the downturn in productivity, they
are still only about 3 percent above their yearago level.
Price
Developments
After slowing sharply in the recession, the broadest measures of inflation have held fairly steady
at about 4 percent during much of the expansion.
While the stability of the inflation rate during this
expansion partly reflects some special factors,
significant progress appears to have been made
in reversing the underlying momentum of the
inflationary process that sustained the wageprice spiral of previous years. Inflation expectations have been more subdued, and both labor
and management have exhibited a better appreciation of the fact that gains in real incomes cannot
be achieved simply by marking up nominal
wages or prices.
The strong dollar has reinforced other factors
holding down inflation in this expansion period,
both directly by reducing the prices of imported
goods and indirectly by forcing U.S. manufacturers to restrain price increases in order to remain
competitive. Retail prices of goods excluding
food and energy rose about VA percent, at an
annual rate, in the first half of 1985, about the
same as the average rate of change in the two
preceding years. Increases in prices of nonenergy services, which have not been affected
nearly so much by import competition, have
continued to be substantial, averaging a 5VI per
679
cent rate in the past six months, the same as in
1984.
Energy prices have been quite volatile over the
past year, mainly reflecting movements in gasoline prices. From the autumn of 1984 through
February of this year, gasoline prices fell about
Vh percent, as refiners sought to reduce excess
inventories. Production was adjusted downward
as well, resulting in a spurt in prices in the spring.
However, gasoline prices appear to have stabilized more recently, as inventory levels have
returned to normal while crude oil supplies remain abundant. Food prices have risen only a
little this year, reflecting the moderate rate of
increase in processing costs as well as plentiful
agricultural supplies.
Prices of basic industrial commodities, which
rose markedly in the initial stages of this upswing
in business activity, have been trending downward for the past year and a half. The demand for
materials by U.S. manufacturers has been weak,
and world supplies have been ample, owing in
part to the expansion of capacity in many developing countries in the past decade and their need
to maintain export revenues.
MONEY, CREDIT, AND FINANCIAL
IN THE FIRST HALF OF 1985
MARKETS
In February of this year, the FOMC established
target growth ranges for the year (measured from
the fourth quarter of 1984 to the fourth quarter of
1985) of 4 to 7 percent for M l , 6 to 9 percent for
M2, and 6 to 9Vi percent for M3. For domestic
nonfinancial sector debt, an associated monitoring range was set at 9 to 12 percent. The Ml
range for 1985 represented a reduction of 1
percentage point at the upper end from the range
of the preceding year, while the range for M2 was
unchanged. To reflect changes in the pattern of
financial flows, the 1985 range for M3 was raised
Vi point at the upper end, and the whole range for
the debt aggregate was raised 1 percentage point.
It was expected that these ranges would be
adequate to encourage further real economic
growth at a sustainable pace consistent with
containment of inflationary pressures and a
movement over time toward reasonable price
stability.
680
Federal Reserve Bulletin • September 1985
In implementing policy throughout the period,
the FOMC emphasized the need to evaluate
growth in the monetary aggregates in the context
of information available on economic activity,
prices, and financial market conditions. Among
other factors, the strength of the dollar and the
related sluggishness of manufacturing activity
required attention. As an operational matter, the
degree of pressure on reserve positions of depository institutions was relatively unchanged during the period, and the discount rate was reduced
once.
Money,
Credit, and Monetary
Policy
The unusually sharp drop in velocity in 1982 and
early 1983, when growth of Ml greatly exceeded
that of nominal GNP, had led the FOMC to place
less reliance on Ml as an operational guide to
policy. During the latter part of 1983 and in 1984,
however, the patterns of Ml growth relative to
other economic variables proved more consistent with historical experience, and Ml was given
more weight in the conduct of policy. Nonetheless, considerable uncertainty remained, in part
because of limited experience with the impact of
deposit deregulation and financial market innovations on the behavior of Ml under varying
economic and financial circumstances. Similar
concerns about possible changes in the account
offerings and pricing behavior of depositories
and the asset demands of households affect all
the monetary aggregates to some extent. These
factors accounted in part for the need to interpret
movement in the aggregates in the light of other
information, including evidence on shifts in velocity.
In the event, monetary policy during the first
half of the year had to be adapted to a further
slowing in economic growth as manufacturing
activity was essentially flat and the agricultural
sector remained under pressure, to a continued
high value of the dollar on exchange markets,
and to a tendency for the velocity of money,
particularly of M l , to fall. Price and wage pressures remained relatively well contained; indications of some acceleration in the early part of the
year were followed by more moderate increases
in subsequent months.
In that context, monetary policy basically accommodated the strong demands for reserves by
depository institutions that emerged during the
first half of the year. The total of adjustment plus
seasonal borrowing varied within a generally
narrow range over the period, though increasing
for a time in the spring as a result of special
situations affecting nonfederally insured thrift
institutions in Ohio and Maryland. Reserve positions had been eased considerably in the latter
part of 1984 and the early weeks of 1985. With an
easing of reserve pressures and a slowing in
Growth of money and credit
Percent changes
Period
1984:4 to 1985:2 . . .
1984:4 to June 1985
Fourth quarter to fourth quarter
197 9
1980
198 1
1 1982
1983
1 1984
Quarterly growth rates
1984:1
2
3
Ml
10.5
11.6
7.5
7.5
5.1(2.5)'
8.8
10.4
5.2
6.2
6.5
4.5
3.2
10.6
10.1
1. Ml figure in parentheses is adjusted for shifts to NOW accounts
in 1981.
M2
M3
Domestic
nonfinancial sector
debt
8.8
7.9
12.8®
9.3
8.2
12.7®
8.1
9.0
9.2
9.1
12.2
7.7
10.3
9.6
12.4
10.0
10.0
10.4
12.1
9.6
10.0
9.1
10.8
13.6
7.2
7.1
6.8
9.1
12.0
5.3
9.2
10.5
9.5
11.0
10.7
5.0
13.0
13.0
12.6
13.4
13.4
e Estimated.
11.8 e
Monetary Policy Report to the Congress
economic growth, interest rates had declined
sharply from their late summer peaks through the
very early weeks of this year.
The decline of interest rates appeared to stimulate, with usual lags of some months, a sizable
increase in demands for assets contained in Ml,
principally interest-bearing checking accounts
(NOW accounts). Shifts of long-term savings and
liquid funds out of market instruments and time
deposits into these accounts in the early months
of the year entailed a substantial rise in total
reserves to support them. As the public's asset
preferences shifted toward components of Ml,
its income velocity declined sharply because
holdings of these assets increased relative to the
GNP. Only minimal effects on Ml growth likely
resulted from shifts of funds into Super NOW
accounts after the minimum-balance requirement
was reduced from $2,500 to $1,000 at the beginning of the year because the bulk of the funds
shifted appeared to come out of regular NOW
accounts.
Most market interest rates rose about a full
percentage point from their January lows in the
course of the winter, though the level of rates
remained well below the 1984 peaks. Demands
for credit remained strong. Economic growth
had picked up in the fourth quarter and early data
for the first quarter, though mixed, seemed generally consistent with moderate growth. While,
as noted, reserve growth was sizable during the
quarter to accommodate shifts in the public's
asset preference, reserves were provided somewhat more cautiously through open market operations during the period of most rapid acceleration of Ml growth in the first quarter.
By early spring, incoming economic data made
it clear that the rate of economic expansion
remained limited. Inflation rates continued generally low, prospects for further oil price declines
helped damp inflation expectations, and the market responded positively to signs of possible
congressional action to reduce the budget deficit.
Growth of Ml moderated substantially, and the
aggregate began to decelerate toward its longerrun range in late winter and early spring. Interest
rates reversed their earlier rise as market expectations changed. Rate declines were also influenced by a cut in the Federal Reserve's discount
rate in May of Vt percentage point to IVi percent,
681
which took place in the context of continued
signs of economic weakness and against the
background of restrained inflationary pressures
and a strong dollar on exchange markets. By
midyear, short-term rates were down to 3A to 1 lA
percentage points from levels around year-end,
while long-term rates had declined about 1 to 1 lA
percentage points.
Growth in Ml spurted once again in the late
spring. To some extent, interest rate decreases
contributed to a strengthening of demand for Mltype assets during the latter part of the second
quarter. Growth of NOW accounts, which had
moderated in late winter, picked up as offering
rates on Super NOW accounts adjusted sluggishly to the renewed decline in market rates of
interest. However, the strength of Ml also reflected an unusual surge in demand deposit expansion in May that extended into June at an
even more rapid pace. The rise seems greater
than is explainable by usual reactions to the
reduced opportunity cost of holding such funds
or to adjustments in compensating balances and
may be partly related to sharp swings in U.S.
Treasury balances. A question has been raised as
to whether corporate cash management practices
have become less aggressive in recent months,
but there is no clear evidence on the point.
With the sharp late-spring expansion of Ml, its
velocity in the second quarter again declined at
about the same rate as in the first. The decline in
the velocity of Ml over the first half of this
year—as well as the lesser declines in the velocity of M2 and M3—is reminiscent of experience in
1982-83. Indeed, both in the first half of this year
and over the one-year period from mid-1982 to
mid-1983 the income velocity of Ml declined at
annual rates of about AVi to 5 percent. The drop
in Ml velocity in both periods appears to have
reflected, to a considerable degree and with
usual lags, declines in market interest rates,
although the magnitude of the declines was in
both cases somewhat more than could be expected based on past relationships of money, income,
and interest rates.
Episodes of velocity decline may be inherent
in the disinflationary process. As interest rates
adjust downward in reflection of lowering inflation rates, households and firms become increasingly less reluctant to tie up portions of their
682
Federal Reserve Bulletin • September 1985
funds in lower-earning transaction balances. The
adjustment has not been steady. Yield declines
have been bunched in time, and the ensuing
bunched additions to money balances have led to
sudden drops in velocity. Unfortunately, the
timing of such velocity changes is no easier to
predict than is the timing of interest rate changes.
Deposit deregulation may have contributed to
the extent of velocity adjustments by making the
demand for the group of assets in Ml more
responsive to interest rate changes than it used to
be.
While growth of Ml was quite high relative to
its long-run range for 1985, the broader aggregates remained generally within their ranges.
Growth of M2 from the fourth quarter of 1984 to
the second quarter of 1985, at an 83A percent
annual rate, was a little below the upper limit of
its range, expressed graphically as a cone based
in the fourth quarter of 1984. However, expansion of this aggregate in June brought its monthly
average a little above the upper end of the range.
Given the deregulation of bank deposit rates,
the growth of M2 should be less affected over
periods of as long as a half year by interest rate
developments because offering yields on most of
its components are adjusted in line with market
rates and many of the shifts of funds engendered
by interest rate changes are among assets within
this broader aggregate. But because the adjustments in offering yields tend to lag market
changes, M2 does show considerable short-term
responsiveness to interest rate changes. Deposit
rates, especially on money market deposit accounts (MMDAs), fell much less than market
yields last fall, so M2 rose rapidly for several
months. Then rising market yields in February
and March held back M2. The nontransaction
portion of M2 actually declined in April for the
first time in 15 years, although this may have
been partly the result of difficulties in seasonal
adjustment owing to the limited experience with
individual retirement accounts (IRAs), which are
excluded from M2, and with tax payments made
out of MMDAs and money market funds. After
rates fell back, M2 picked up again strongly in
late spring.
M3 growth, meanwhile, was comfortably within its target range during the first half of the year.
Issuance of large CDs has slowed substantially
from last year at both banks and thrift institu
tions. Core deposit flows have accelerated while
the rate of loan expansion has held about steady.
Furthermore, perhaps in response to new Federal Home Loan Bank Board regulations raising
net worth requirements for fast-growing institutions, thrift institutions have reduced net acquisitions of assets. In doing so, some institutions
have taken advantage of declining yields by using
the capital gains from asset sales to boost reported earnings.
Growth in total debt remained extremely
strong in the past two quarters, averaging a bit
above its monitoring range, though below the
record pace of 1984. Federal government borrowing continued to absorb more than a fourth of
total funds made available to domestic nonfinancial sectors. An increasing proportion of the
Treasury's debt carries distant maturity dates; 90
percent of net marketable borrowing this year
has been in issues of notes and bonds maturing in
2 to 30 years. Issues of 20- and 30-year debt, in
particular, are increasing and now dominate the
new-issue market for taxable long-term bonds,
accounting for more than two-thirds of new
offerings in that maturity class. This large volume of new long-term debt has changed the
makeup of the secondary market as well. The
supply of Treasury issues outstanding with 15 or
more years remaining to maturity has doubled in
little more than 2 years, while the amount of
private issues in that maturity range has shown
little net change.
Borrowing of state and local governments has
been unexpectedly strong so far this year, but an
unusually high proportion has been for advance
refunding of existing issues, as governments
have sought to take advantage of lower interest
rates. Because the funds borrowed in such operations are reinvested in financial instruments,
they have little net impact on credit market
pressures. Indeed, most of these funds are required by law to be invested in specially issued
Treasury debt, thus reducing the Treasury's
need for public offerings. Single-family housing
revenue bonds have slowed from the second half
of last year. But last year's issues were heavily
concentrated in the later part of the year because
of delays in the reauthorization of such bonds;
recent volume has been close to the 1984 average
rate.
Business credit demands have remained strong
Monetary Policy Report to the Congress
this year. Slowing growth of both profits and
expenditures for fixed capital and inventories
has, on balance, had little effect on total borrowing needs. Corporate borrowing has been heavier
in the short-term paper and loan categories than
in bonds, but not to the same extent as in the
early part of 1984 when interest rates were rising.
In addition, while new-issue bond volume has
picked up in response to the lowest long-term
yields in five years, maturities of new bond
issues have been concentrated in the short- and
intermediate-term areas, as they were last year.
An unusual portion of the borrowing, also like
last year, has been used to finance equity retirements of one sort or another. Mergers, buyouts,
share repurchases, and swaps with shareholders
of new debt for stock have continued on the
same massive scale as last year. Borrowing initiated with the purpose of financing these transactions may have accounted in gross terms for
more than a percentage point of the growth rate
of total nonfinancial debt over the first half. But
such an estimate may overstate the net effects of
recent corporate recapitalizations on debt
growth. A number of firms involved in mergers
or restructurings this year and last have recently
completed large asset sales, some for the explicit
purpose of repaying debt. Furthermore, merger
activity may be indirectly responsible for some
of the increased new equity offerings because of
its generally stimulative effect on stock prices as
funds paid to shareholders are reinvested.
Household borrowing also has remained
strong. Demand for mortgage loans has been
buoyed by declining interest costs. At the lower
rates, households have found adjustable-rate
loans less attractive than last year, reducing from
two-thirds to about one-half the proportion of
new conventional mortgages with these features.
Installment debt continued to rise faster than
income in the first half of the year, but the
second-quarter data show some deceleration in
line with signs of a slowing in the growth of
consumption spending on large-ticket items.
Other Developments
in Financial
Markets
Signs of strain in financial markets have persisted this year, but without causing major disruptions in general credit market conditions. Al
683
though the government securities market as a
whole has been performing well, the failures of
three secondary government securities dealers
caused losses, sometimes substantial, for some
of their customers. A number of local governments and savings and loans were among those
hurt, and losses by one large thrift institution in
Ohio had further repercussions, threatening to
bankrupt the statewide private insurance system
and, for a time, generating some concerns here
and abroad about the safety of other financial
institutions. Runs on privately insured savings
and loans in Maryland, some of which also lost
money as a result of the failure of securities
firms, followed the problems in Ohio. Privately
insured savings and loans in both states were
closed or limited to small withdrawals for a time,
causing serious inconvenience to some depositors, and some institutions remain closed or
restricted.
However, these various problems have been
relatively well contained, without significant effects on other institutions and markets. A number of institutions have switched to federal insurance. And the Federal Reserve, acting in its role
as lender of last resort, made advances to nonfederally insured thrift institutions in Ohio and
Maryland to help facilitate adjustments in the
face of large deposit outflows. For a while, the
borrowing affected the amount of adjustment
credit at the discount window but because of the
special conditions did not add to reserve market
pressures as perceived by other institutions. After a time the borrowings were classified as
extended credit.
The thrift industry as a whole continues to
suffer from low net worth and mismatched balance sheets, but the recent declines in interest
rates are improving earnings. The Federal Home
Loan Bank Board (FHLBB) has taken a number
of steps, including increased capital requirements for rapidly growing institutions, to encourage the stabilization of the industry over time.
Capital requirements also have been raised for
banks, some of which have suffered from a high
incidence of nonperforming loans and loan losses
in recent quarters. The troubled loans are concentrated in energy, agriculture, and real estate
sectors and to borrowers of some foreign countries. Bad news about the loan portfolios of
individual institutions and other reported losses
684
Federal Reserve Bulletin • September 1985
have produced some ripples in market rates
generally, but spreads between borrowing rates
of financial institutions and the Treasury have
been quite low for the most part. To some extent,
loan losses reflect overly aggressive lending decisions, but the problems of borrowers in the
hardest hit industries are partly a result of difficult adjustment to a higher value of the dollar and
lower rates of inflation than were expected when
the loans were made. In the agricultural as in
other sectors, investors and borrowers have discovered that the inflation of land and commodity
prices can no longer be taken for granted.
In light of strains relating to agricultural credit,
the Federal Reserve liberalized its regular seasonal borrowing program and initiated a temporary special seasonal program. However, there
has been only relatively limited use of seasonal
credit owing to the easing of money market
conditions as the spring progressed.
With regard to conditions among nonfinancial
businesses, the prospects of some of those in the
weaker industries—especially those most adversely affected by the high dollar—are subject,
of course, to considerable uncertainty. But, in
addition, many firms have deliberately chosen a
more precarious financial structure in order to
enhance current market valuations of shares or
to fend off undesired takeover bids. Nevertheless, financial markets have not shown generalized concern about corporate financial structure;
notably, spreads between corporate and Treasury debt are unusually narrow, having shrunk
since the beginning of the year.
•
685
Industrial Production
materials declined. Second-quarter industrial
output was 0.5 percent above the first quarter.
In market groups, production of consumer
goods increased 0.2 percent in June, largely
reflecting a gain in nondurable consumer goods.
Autos were assembled at an annual rate of 8.0
million units—off slightly from the May rate.
Business equipment, one of the groups affected
Released for publication July 18
Industrial production edged up 0.1 percent in
June following a similar rise in May. At 124.6
percent of 1977, the new base year, output is 1.8
percent above a year earlier. In June, gains in
production occurred in consumer goods, equipment, and intermediate products; but output of
Seasonally adjusted, ratio scale, 1 9 7 7 = 100
140
TOTAL INDEX
Products
120
100
Materials
1
1
1
1
1
1
140
MANUFACTURING
_
N o n d u r a b l e ^
_
Durable
MATERIALS
120
Nondurable
&
r
^
r
^
Durable
1
1
1
-J >*>«»
Energy
\ y
1
*
100
1
I
80
i
i
i
i
1
1
160
_ CONSUMER GOODS
140
_ INTERMEDIATE PRODUCTS
Nondurable
r
/
\ s/ s
140
120
J
J
Business supplies
120
/
100
Durable
|
Construction supplies
240
MOTOR VEHICLES A N D PARTS
Left scale
FINAL P R O D U C T S
Right scale
200
Defense and space
100
_
160
Business equipment
140
120
100
60
Consumer g o o d s
1979
1981
1983
1985
All series are seasonally adjusted and are plotted on a ratio scale.
1979
1981
1983
1985
Auto sales and stocks include imports. Latest figures: June.
686
Federal Reserve Bulletin • September 1985
1977 = 100
Percentage change from preceding month
1985
1985
Group
May
June
Feb.
Mar.
Apr.
May
June
Percentage
change,
June 1984
to June
1985
Major market group
Total industrial production
124.4
124.6
.1
.3
.2
.1
.1
1.8
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment..
Defense and space...
Intermediate products..
Construction supplies
Materials
131.6
132.1
120.6
112.3
123.6
142.1
172.6
130.0
118.3
114.5
132.1
132.6
120.8
112.4
123.9
142.6
174.3
130.6
118.8
114.2
.1
.0
.2
.1
.3
-.3
1.2
.7
-.5
.0
.4
.3
.6
.5
.6
.1
1.1
.7
1.0
.1
.5
.5
.1
-.5
.3
1.3
6
.4
.2
-.3
.5
.5
.6
-.5
.9
.0
1.5
.7
1.0
-.6
.4
.3
.2
.1
.2
.3
1.0
.5
.4
-.2
3.6
3.4
2.0
.7
2.5
5.2
10.9
4.2
4.0
-.8
.0
-.3
.5
.0
-.5
.2
.1
.3
-.2
-.2
2.2
2.7
1.7
-2.7
1.2
Major industry group
Manufacturing
Durable
Nondurable
Mining
Utilities
126.7
128.0
124.9
110.6
113.0
126.9
128.1
125.3
110.4
112.8
-.1
-.5
.5
-.9
2.5
.4
.6
.1
.9
-1.7
.3
.3
.3
.2
-.2
NOTE. Indexes are seasonally adjusted.
by definitional changes, increased 0.3 percent
following no change in May and a large rise in
April. Output of defense equipment and of construction and business supplies continued to increase in June. Materials production, however,
declined 0.2 percent, mainly reflecting further
reductions in basic metals and in equipment
parts. Nondurable goods materials and energy
materials changed little.
In industry groups, manufacturing output
gained 0.2 percent in June, but mining and utility
output was down 0.2 percent.
The Revision
of the
Index'
The 1985 general revision of the index, the first
since 1976 and the sixth since the 1920s, involves
the following major modifications:
1. Historical data for the seasonally adjusted total index
and for several main groups of the production index are
included in the supplement to this release. A complete
historical tape (order no. PB85-217602) of all published series
is available from the National Technical Information Service
of the U.S. Department of Commerce, 5285 Port Royal Road,
Springfield, Virginia 22161; telephone (703) 487-4650.
Those interested in selected industrial production series
may receive copies of printouts that contain up to ten series
by writing the Industrial Output Section, Division of Research and Statistics, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551.
1. The reference year of the index was moved
from 1967 to 1977 = 100, changing the level of
the index.
2. The weights used to combine the production
indexes were updated through 1977.
3. The number of basic index series was increased from 235 to 252.
4. The industry classification of the series now
follows the 1977 Standard Industrial Classification (SIC); the old index used the 1967 SIC. Also,
compositional changes have been made in the
aggregates for a number of groups.
5. Indexes were revised, using various
sources, including the 1972 and 1977 Census of
Manufactures, the Annual Surveys of Manufactures through 1981, and others.
6. New seasonal factors were calculated from
data through 1983 for the individual series and
from data through 1984 for the aggregates.
The July 1985 issue of the F E D E R A L R E S E R V E
B U L L E T I N (pp. 487-501) contains an article providing a detailed description of the revision and
its results. A technical manual, expected to be
issued early in 1986, will describe the basic
concepts; the estimating procedure of the monthly series; the benchmarking, aggregation, and
weighting techniques; and the method of seasonal adjustment, as well as the uses, limitations,
and history of the index.
687
Statements to Congress
Statement by Paul A. Volcker, Chairman, Board
of Governors of the Federal Reserve System,
before the Subcommittee on Domestic Monetary
Policy of the Committee on Banking, Finance
and Urban Affairs, U.S. House of Representatives, July 9, 1985.
I appreciate this opportunity to present the views
of the Federal Reserve on regulation of the
market for Treasury and federally sponsored
agency securities. My remarks will be relatively
brief, Mr. Chairman, because your subcommittee is already well informed about the developments that have prompted consideration of the
need for formal regulation of these markets.
Indeed, you and your colleagues have played a
leading and a very valuable role through the
years in exploring the difficulties that have arisen
in these markets and the efforts of the Federal
Reserve and others to deal with them.
Recently, in testimony before another subcommittee of the House, I set forth the basic
position of the Federal Reserve on the need for
regulation of the market for Treasury securities.
We have concluded that legislation providing for
registration, inspection, and limited regulation of
government security dealers would be desirable.
In arriving at this conclusion, we have noted
that the recent problems have not substantially
affected the core of the government securities
market—that is, dealers accounting for the bulk
of trading activity and marketmaking and for
participating regularly in the distribution of new
Treasury securities. The market has continued to
function with a high degree of efficiency and
liquidity.
We also recognize that any regulation inevitably involves additional costs for at least some of
the participants in the market. However, we
believe that legislation can, and should, be
framed in a manner to avoid unnecessarily detailed and costly regulation and supervision—
that the mandate given to the regulatory body (or
bodies) should provide only limited powers di
rectly related to protecting the integrity of transactions in the market.
Moreover, as depositors and taxpayers in Ohio
and Maryland can attest, there have been considerable costs growing out of recent market weaknesses, extending even beyond losses to the
parties directly involved in government securities transactions. While regulation will not, and
can not, avoid all potential losses from fraud or
otherwise, we do believe that registration, inspection, and some regulation could help reduce
the risks to third parties.
In our view, any structure of regulation for the
Treasury market should embody—and be confined to—three principal elements.
First, it should provide for registration of
dealers and for authority to bar or limit the
participation of those who, through violations of
securities laws or otherwise, have clearly demonstrated that they should not be allowed to
occupy a position of trust in the government
securities markets. While a registration requirement can raise difficult issues, including the
necessity to define a dealer, it is important that
those who have been disciplined in other markets
not be allowed to find refuge in trading government securities—the very securities investors
turn to for assurance of relative safety and liquidity.
Second, registration implies the need for certain minimum guidelines for recordkeeping and
auditing so that continued adherence to the standards established for registered dealers can be
monitored. To assure the adequacy of these
reports and the conformance to standards, legislation should include the authority to inspect
registered dealers on a regular basis and when
problems are suspected.
Finally, there should be some mechanism for
writing and enforcing rules to foster the financial
soundness of government securities dealers and
to encourage, in a limited area, market practices
consistent with the safety and the efficiency of
the market. Obvious cases in point are guidelines
688
Federal Reserve Bulletin • September 1985
with respect to capital and such practices as the
collateralization of repurchase agreements
(RPs). Legislation might permit regulation of
certain other practices—such as appropriate
margins or when-issued trading, if needed—but
authority should be confined to areas that involve a direct threat to the integrity of the
marketplace.
Let me underline this last point. The potential
costs of highly detailed and expansive regulations are real. Preserving the extraordinary liquidity and resiliency of this market is essential
to the conduct of monetary policy and to the
management of the public debt. Official intrusion
into this market beyond that considered absolutely essential to promote its safety and soundness—for example, imposing on this market the
degree of regulation characteristic of other securities markets—is unnecessary and could impair
its basic efficiency and liquidity. Within the
limited framework that we would propose, costs
of regulation would be quite modest relative to
the size of the market, and regulation could
reinforce the performance of, and confidence in,
the market.
The framework that we have in mind for
regulation could be implemented through a number of different administrative structures to deploy effectively the expertise of the relevant
regulatory bodies in the process of registration,
supervision, and regulation. One such approach
is embodied in the joint proposal developed by
the Treasury, the Securities and Exchange Commission, and the Federal Reserve. That proposal, as you know, provides for registration with
the Treasury, or with the Securities and Exchange Commission (SEC) if the preference of
that agency were to be adopted, basic rulemaking authority by the Treasury in consultation
with the Federal Reserve, and enforcement by
banking agencies or by existing self-regulatory
organizations (SRO) under supervision by the
SEC, depending on whether the dealer firm is a
bank or a nonbank. That proposal encompasses
all the elements that we consider necessary,
including limitation on the scope of regulation.
Properly implemented, with ample consultation
between Federal Reserve and the Treasury, we
would find this approach acceptable.
The two bills under specific consideration by
this subcommittee—H.R. 2521 and H.R. 1896—
embody other approaches. Although there are
large differences between the two bills in the
scope of regulation, both bills would center the
responsibility for registration and regulation in
the Federal Reserve.
The Federal Reserve does have a strong interest in seeing that the job of overseeing the
government securities market is done well, that
the integrity of the marketplace is reinforced,
and that regulation not be unduly burdensome.
Reflecting those interests, we expect to continue
to play a key role in the surveillance of the
primary dealers with whom we trade. We would
also want to work closely with those responsible
for registration and for rulemaking authority generally. We have not felt it necessary or sought,
however, to have these latter responsibilities
directly under our authority. Alternative arrangements would be consistent with the requirements as we see them.
For instance, an alternative arrangement to the
"joint proposal" with some appeal would fit
regulation and oversight within a framework of a
new SRO for dealers in Treasury and federally
sponsored agency issues. The SRO approach
would involve directly in the rulemaking process
those with the fullest knowledge of market practices and the most intense interest in minimizing
the burden of regulation. The mandate for rulewriting provided that such an SRO should be
carefully prescribed and limited. The SRO
would, of course, need to report to, and be
subject to the jurisdiction of, a federal agency or
some combination of agencies. We believe that
we should participate in that oversight process.
Your bill, H.R. 2521, captures some of the
advantages of this approach by creating an advisory council to work with the Federal Reserve,
although the council would have no legal responsibility for rulemaking. If rulemaking were in any
event narrowly circumscribed by law, an advisory council might serve as an alternative to an
SRO.
The bill that was introduced by Congressmen
Dingell and Wirth simply transformed an existing
SRO, the Municipal Securities Rulemaking
Board (MSRB), by providing it with authority
over the entire government market. We have
opposed this proposal because the two markets—for federal and municipal securities—are
so different. The authority of the MSRB is con-
Statements to Congress
siderably broader in scope than we view as
necessary, growing out of the regulatory needs of
a market with a large number of small issuers, a
multiplicity of issues and financing techniques,
and small investors. At the same time, the MSRB
has no, or little, experience with one of the
principal problems in the Treasury market, collateralization of repurchase agreements, since that
instrument is not so widely employed in the
municipal market. In addition, we question
whether the SEC, acting alone as provided for in
the Dingell-Wirth bill, is the most suitable agency for exercising ultimate oversight for the Treasury and the sponsored agency market.
With respect to the specific provisions of H.R.
1896 and H.R. 2521, we can see problems with
each. The former is too sweeping; it simply
grants the Federal Reserve Board the authority
to regulate government securities dealers without specifying the nature of that regulation or its
purpose. As I stated before, in our view any
regulatory authority over this market given to
any agency should be strictly limited to those
market practices that threaten the integrity of the
market.
Your bill is in some respects too narrow. For
one, regulation of trading practices appears to be
limited to the segregation of customer securities
and to the delivery of collateral. These issues
may be the most obvious ones now facing the
market, but I would hesitate to rule out the
possibility of problems emerging in other areas.
It is for this reason that I would include authority
to regulate when-issued trading and to set margin
requirements, with the clear understanding that
such authority would not be used unless it were
needed to deal with practices that posed clear
threats to the integrity and efficient functioning
of the market.
In addition, rules promulgated by the Federal
Reserve under your structure would apply only
to nonbank, nonregistered, nonprimary dealers.
Apparently depository institutions and dealers
registered with other agencies would be subject
to rules of those agencies. But we think that the
basic rules governing dealer behavior should be
689
applicable, in their essentials, to all dealers. It
would seem to us most practical in that context
to vest the basic rulemaking authority for the
dealer market in one federal authority (whether a
single agency or some combination).
H.R. 2521 seems to rely on the Federal Reserve to inspect the nonbank secondary dealers,
rather than an existing SRO. No matter which
authority registers these dealers or writes the
rules for their trading practices, I believe that
routine enforcement could more efficiently be
conducted through existing channels. That enforcement could be accomplished by having nonbank dealers who are not otherwise registered be
inspected by the National Association of Securities Dealers.
In any event, as I have mentioned, we feel it
necessary and appropriate to continue our surveillance of all primary dealers through the Federal Reserve Bank of New York. I do not believe
that we need any new or special legislative base
for that effort.
We will continue to insist that primary dealers
play an active role in Treasury financing operations and will continue to collect data from them
that we need on a regular and a frequent basis.
And we would anticipate that they will continue
to meet high financial standards, even beyond
those required of other dealers.
In conclusion the Federal Reserve supports
legislation providing for registration, inspection,
and limited regulation of dealers in government
and sponsored-agency securities. For the reasons indicated, I do not believe that the provisions of either H.R. 2521 or H.R. 1896, as
drafted, provide a wholly appropriate framework
for such regulation.
We do find the joint Treasury-SEC-Federal
Reserve plan acceptable for these purposes. At
the same time, we do not exclude the possibility
that other regulatory structures could work as
well, or even better.
We would, of course, be glad to work further
with the subcommittee in developing these concepts into appropriate legislation.
•
690
Federal Reserve Bulletin • September 1985
Statement by Paul A. Volcker, Chairman, Board
of Governors of the Federal Reserve
System,
before the Subcommittee on Domestic Monetary
Policy of the Committee on Banking, Finance
and Urban Affairs, U.S. House of Representatives, July 17, 1985.
I welcome the opportunity to review with you
monetary policy in the context of recent and
prospective economic and financial developments. The economic setting and the decisions of
the Federal Open Market Committee with respect to the target ranges for the monetary and
credit aggregates are set out in the semiannual
Humphrey-Hawkins report, which was transmitted to you this morning. (See pages 671-84 of this
B U L L E T I N . ) As usual, I would like to amplify and
develop some aspects of those decisions in my
testimony.
THE ECONOMIC AND
ENVIRONMENT
FINANCIAL
The pattern of slower, and more lopsided,
growth in domestic output that developed during
the latter part of 1984 became even more pronounced during the first half of 1985. Manufacturing activity overall has been essentially flat
after exceptionally large gains earlier in the expansion period. The farming and mining sectors
have remained under strong economic and financial pressure. But consumption—supported directly and indirectly by large increases in personal and federal debt—has continued to rise fairly
strongly. Construction activity has also expanded, responding in part to lower interest rates.
Despite recent losses of manufacturing jobs,
employment growth in services and trade has
been strong enough to keep the overall unemployment rate essentially unchanged at about 1V4
percent.
The contrast between marked sluggishness in
the goods-producing sector of the economy and
rising domestic consumption and demand is reflected in continuing strong growth in merchandise imports. Those imports in real terms are up
about 60 percent in three years; in manufactured
goods alone the increase has been even more
rapid. Overall, imports have now reached a level
equivalent to 21 percent of the value of domestic
production of goods. In contrast, exports have
stagnated and now account for only about 14
percent of goods output.
I can put the same point another way. Domestic final sales—to consumers, to businesses, and
to governments—appear to have been expanding
at a relatively brisk rate of more than 4 percent
so far this year. Domestic output of goods and
services has not nearly kept pace, rising at a rate
of about IV2 percent or perhaps less. That is
partly because inventory accumulation has
slowed. But it is mostly because more of the
domestic demand is being satisfied by growing
imports.
That development was true earlier in the expansion period as well. But we have felt it more
as growth in demand has slowed to a more
sustainable rate. Another potentially disquieting
development has been the apparent failure of
productivity to maintain the strong gains that
were achieved earlier in the expansion period.
The implication is that the underlying trend may
not have increased as much as had been hoped
from the poor record of the 1970s.
Against those crosscurrents in the economy
this year, the Federal Reserve, in conducting its
open market operations, has not appreciably
changed the degree of pressure on bank reserve
positions, which had already been substantially
eased by the end of 1984. In May, the discount
rate was reduced from 8 percent to l x h percent.
That action was consistent with the general tendency of market interest rates to decline further
over the period, extending the rather sharp reductions during the autumn and early winter.
Both the discount rate and short-term market
interest rates in May and June reached the lowest
levels since 1978.
The relatively "accommodative" approach in
the provision of reserves has been designed to
provide support for the sustained growth of
economic activity against a background of relatively well-contained inflationary and cost pressures. Indeed, sensitive agricultural and industrial prices—including prices of crude petroleum—
have been declining appreciably, and prices at
the wholesale level have been almost flat. It is
somewhat reassuring that the trend in wage and
salary increases has, overall, remained at the
sharply reduced pace established at the start of
the recovery period, although the slowdown in
Statements to Congress
691
2. M2 target ranges and actual M2
1. Ml target ranges and actual Ml
Billions of dollars
Billions of dollars
89b
9%
1984
1985
Monthly data.
Monthly data.
productivity has been reflected in higher unit
labor costs and some pressures on profit margins. Clearly, even if reduced, some momentum
of inflation has persisted in the economy as a
whole, and expectations remain sensitive. But so
far this year, price increases have been concentrated largely in the service sectors.
Meanwhile, the broader measures of monetary
growth—M2 and M3—have remained generally
within the target ranges established early in the
year. However, currency and checkable deposits, measured by Ml, have increased much more
rapidly than envisaged. (See charts 1-4.)
Until May, growth in that aggregate remained
in an area that was reasonably close to the upper
band of the target range. Given that the more
rapid growth during that period followed some
months of subdued expansion, the outcome
through April was reasonably in line with FOMC
intentions and expectations. More recently, in
May and June, a new surge in Ml carried that
aggregate much further above the targeted range.
At the same time, total nonfinancial debt has
continued to expand substantially more rapidly
than the gross national product, propelled particularly by the federal deficit and consumer credit.
As much as 1 percent of that debt expansion can
be traced to a continuing—and, from a structural
point of view, disquieting—substitution of debt
for equity as a result of mergers and other
financial reorganization. More generally, these
developments also point up the apparent dependency of economic growth, under circumstances
existing this year, on a relatively high level of
debt and money creation.
Unduly prolonged, those developments would
3. M3 target ranges and actual M3
4. Debt monitoring ranges and actual debt
Billions of dollars
Billions of dollars
9'/2%
t
i
I
i
I
1
1984
Monthly data.
i
i
1
1985
f
I
I
I
I
2,800
"I: ••'"•'I•'.•. 1- ^ i I
1984
Monthly data.
I I I I ! I I I
1985
692
Federal Reserve Bulletin • September 1985
not provide a satisfactory financial underpinning
for sustaining growth in a context of greater price
and financial stability. For the time being, however, taking account of current and likely economic developments, the downward pressures
on commodity prices, and the high level of the
dollar that has prevailed in the foreign exchange
markets, the growth in M l and debt has not, in
itself, justified a more restrictive approach toward the provision of reserves to the banking
system.
After increasing sharply from already high
levels in the early weeks of the year, the dollar
more recently has fallen back against the currencies of other leading industrial countries, dropping abruptly over the past week or so to about
the average levels of last summer. At these
exchange rates—still about 60 percent above the
relatively depressed levels of 1979 and 1980—
prospects for stemming the deterioration in our
trade accounts, much less achieving a turnabout,
remain uncertain. Much depends upon the rate of
growth in other countries that provide the principal markets for our exports and are the source of
our imports. In any event, the potential effects of
interest rates and decisions with respect to monetary policy on exchange rates and the external
sector of the economy have necessarily been a
significant ingredient in FOMC deliberations.
THE OUTLOOK FOR THE
ECONOMY
Members of the FOMC generally have projected
a pickup in economic activity over the second
half of 1985 and sustained growth through 1986.
In those circumstances, while employment gains
should remain substantial, unemployment would
be expected to drop only a little if at all. The
overall rate of price increase would be expected
to remain close to the recent pattern, assuming
dollar exchange rates do not vary widely from
recent levels. (See attached table for the numerical projections. 1 )
Obviously, neither the anticipated "sticki-
1. The attachments to this statement are available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
ness" of the unemployment rate nor the projected inflation rate is entirely satisfactory, and a
substantial range of uncertainty must be associated with any economic projections at this time.
As I emphasized earlier, there are sharp differences in the performance of different sectors of
the economy. Demand for and employment in
services, the sector in which most upward price
pressures have been concentrated, continue to
expand rather strongly. Most sectors more immediately sensitive to interest rates and monetary conditions—including construction and
automobile sales—have also been performing
relatively well. Other sectors exposed to strong
international competition are sluggish, and agriculture remains under strong financial pressure.
THE BROAD POLICY
CHALLENGE
The crosscurrents, dislocations, and uncertainties in the present situation point up one uncomfortable but inescapable fact. We are dealing
with a situation marked by gross imbalances that
can neither be sustained indefinitely nor dealt
with successfully by monetary policy alone,
however conducted.
• We are borrowing, as a nation, far more than
we are willing to save internally.
• We are buying abroad much more than we
are able to sell.
• We reconcile borrowing more than we save
and buying more than we sell by piling up debts
abroad in amounts unparalleled in our history.
• Our key trading partners, directly or indirectly, have been relying on our markets to support
their growth, and even so most of them remain
mired in historically high levels of unemployment.
• Meanwhile, our high levels of consumption
and employment are not being matched by the
expansion in the industrial base that we will need
as we restore external balance and service our
growing external debt.
• And, after two and one-half years of economic expansion, too many borrowers at home and
abroad remain under strain or are overextended.
At their core, these major imbalances and
disequilibria may lie outside the reach of mone-
Statements
tary policy—or in some instances, U.S. policy
generally. But they necessarily condition the
environment in which the Federal Reserve acts,
along with all the current evidence about monetary growth, economic conditions, and prices.
In all our decisions, whether with respect to
monetary or regulatory policies, we would like to
work in a direction that is consistent with reducing the imbalances, or at the least to avoid
aggravating them. That sounds obvious and
straightforward. The difficulty is that, as things
now stand, some policy actions that might seem,
on their face, to contribute toward easing one
problem could aggravate others. Nor can we
afford to apply a mere "poultice" at one point of
strain in the hope of temporary relief at the
expense of undermining basic objectives.
Our monetary policy actions need to be conducted with a clear vision of the continuing
longer-term goals—a financial environment in
which we as a nation can enhance prospects for
sustained growth in a framework of greater stability. To succeed fully in that effort, monetary
policy will need to be complemented by action
elsewhere.
THE 1985 AND 1986 TARGET
RANGES
As I indicated earlier, the recent surge in Ml in
May and June has carried that monetary aggregate well above the target range set in February.
M2 and M3, while also rising rather sharply in
June, have remained generally within, or close
to, their targeted ranges. Against the background
of a high dollar, the sluggishness of manufacturing output, and relatively well-contained price
pressures, quick and strong action to curtail the
recent burst in Ml growth has not been appropriate. The potential implications of the relatively
strong growth in Ml since last year nonetheless
had to be considered carefully in developing our
target ranges and policy approach.
You may recall that somewhat similar high
growth rates in Ml developed during the second
half of 1982 and during the first half of 1983. At
that time, important regulatory changes involving new accounts and affecting the payment of
interest on checking accounts had taken place.
to Congress
693
Pervasive uncertainty during the latter stages of
the recession appeared to affect desires to hold
cash. Both circumstances made interpretation of
the monetary data particularly difficult, and Ml
was de-emphasized. Those circumstances are
not present today, at least not in the same
degree.
However, one common factor, and an important factor, was at work during both periods. The
rapid growth in Ml in 1982 and 1983 and this year
followed sizable interest rate declines, with a
lagged response evident for some months. Analysis strongly suggests that, as market interest
rates decline, individuals and businesses are inclined to build up cash balances because they
sacrifice less interest income in doing so. The
possibility today of earning interest on checking
accounts—and the fact that these interest rates
change more sluggishly than market or marketoriented rates—probably increases that tendency.
Moreover, as I have suggested in earlier testimony, the payment of interest on checking accounts may, over time, encourage more holdings
of Ml relative to other assets, or relative to
economic activity, than was the case earlier.
Partly for that reason, the upward trend in Ml
"velocity"—the ratio of GNP to Ml—characteristic of the earlier postwar period may be changing.
That trend was, of course, established during a
period when inflation and interest rates were
trending upward. In contrast, over the past three
and one-half years, velocity has moved irregularly lower, with the declines concentrated in periods of declining interest rates.
The earlier 1982-83 period of rapid growth in
Ml was correctly judged not to presage a resurgence of inflationary pressures, contrary to some
expectations. I would emphasize in that connection, however, that M l growth was moderated
substantially after mid-1983 and that velocity
rose during the period of strong economic expansion as anticipated.
We simply do not have enough experience
with the new institutional framework surrounding M l , which will be further changed next year
under existing law, to specify with any precision
what new trend in velocity may be emerging or
the precise nature of the relationship between
694
Federal Reserve Bulletin • September 1985
fluctuations in interest rates and the money supply. Moreover, while the surge in M l , and the
related drop in velocity, can be traced, at least in
substantial part, to the interest rate declines of
the past year, the permanence of the change in
velocity will be dependent on inflationary expectations and interest rates remaining subdued. For
those reasons, the committee has continued to
take the view that, in the implementation of
policy, developments with respect to Ml be
judged against the background of the other aggregates and evidence about the behavior of the
economy, prices, and financial markets, domestic and international.
None of that analysis contradicts the basic
thrust of a proposition that we have emphasized
many times—that excessive growth of money,
sustained over time, will foster inflation. Certainly the burst in May and June cannot be explained
by trend or interest rate factors. But, it is also
true that monthly data are notoriously volatile,
and sharp increases unrelated to more fundamental factors are typically moderated or partly
reversed in following months.
In all these circumstances, the FOMC, in its
meeting last week, decided to " r e b a s e " the Ml
target at the second-quarter average and to widen the range for the rest of the year to 3 percent
to 8 percent at an annual rate. That decision
implies that some adjustment in the base of the
Ml target range is appropriate to take account
both of some change in trend velocity and a
return of interest rates closer to levels that are
historically normal.
We are, of course, conscious that, because of
strong growth in June, Ml currently is high
relative to the rebased range, and the committee
contemplates that M l will return within its range
only gradually as the year progresses. Consistent
with the conviction that a marked slowing in the
rate of Ml growth is appropriate over time, the
committee tentatively set the target range at 4 to
7 percent for next year—a decision that will be
reassessed on the basis of the further evidence
available at that time. Meanwhile, the lower part
of the range set for the remainder of this year
reflects the willingness of the FOMC, in appropriate surrounding circumstances, to tolerate
substantially slower Ml growth for a time should
the recent bulge in effect "wash o u t . "
No changes were made in the target ranges for
M2 and M3 and the associated monitoring range
for debt this year. As was the case at the
beginning of 1985, the committee would find
growth in the upper part of these ranges acceptable. The changes tentatively agreed for 1986 are
small, limited to a Vi percent reduction in the
upper limit for M3 and a 1 percent reduction in
the monitoring range for debt.
These target ranges are felt to be fully consistent with sustained growth in the economy so
long as inflationary pressures are contained. I
should note again, however, that members of the
FOMC are concerned about the persistent debt
creation well in excess of the growth of the
economy and historical experience, and therefore look toward some moderation in that growth
next year, as reflected in the monitoring range
set out.
The uncertainties surrounding M l , and to a
lesser extent the other aggregates, in themselves
imply the need for a considerable degree of
judgment rather than precise rules in the current
conduct of monetary policy—a need that, in my
thinking, is reinforced by the strong crosscurrents and imbalances in the economy and in the
financial markets. That may not be an ideal
situation for either the central bank or for those
exercising oversight—certainly the forces that
give rise to it are not happy. But it is the world in
which, for the time being, we find ourselves.
COMPLEMENTARY
POLICIES
The massive trade deficit that has rapidly developed over the period of economic expansion is
the most obvious and concrete reflection of
underlying economic imbalances. The trade deficit, in an immediate sense, has been primarily
related both to the strength of the dollar in the
exchange markets and to relatively slow growth
elsewhere in the world. In effect, much of the
world has been dependent, directly or indirectly,
on expanding demand in the United States to
support its own growth. Put another way, growth
in domestic demand in Japan, Canada, and Europe has been less than the growth in their GNP,
the converse of our situation. And, even with
surging exports to this market, output has been
Statements to Congress
increasing too slowly to cut into high rates of
unemployment in Europe and elsewhere. As a
consequence, the demand of others for our products has been relatively weak.
The strong competition from abroad has, in an
immediate sense, had benefits as well as costs for
this country. It has been a powerful force restraining prices in the industrial sector and in
encouraging productivity improvement. The related net capital inflow has eased pressures on
our interest rates and capital markets. We have
been able to readily satisfy the higher levels of
consumption driven in part by the budget deficit.
But those benefits cannot last. Sooner or later
our external accounts will have to come much
closer toward balance. Indeed, as our debts
increase, we will have to earn even more in our
trade to help pay the interest.
In the meantime, the flood of imports and the
perceptions of unfairness that accompany it foster destructive protectionist forces. The domestic investment that we will ultimately need is
discouraged while our companies shift more of
their planned expansion overseas. And the larger
the external deficits and the longer they are
prolonged, the more severe the subsequent adjustments in the exchange rate and in our economy are apt to be. We will have paid dearly indeed
for any short-term benefits.
These considerations have tempered the conduct of monetary policy for some time. Specifically, our decisions with respect to providing
reserves and to reducing the discount rate have
been influenced to some extent by a desire to
curb excessive and ultimately unsustainable
strength in the foreign exchange value of the
dollar. But we have also had to recognize the
clear limitations and the risks in such an approach.
The possibility at some point that sentiment
toward the dollar could change adversely, with
sharp repercussions in the exchange rate in a
downward direction, poses the greatest potential
threat to the progress that we have made against
inflation. Those risks would be compounded by
excessive monetary and liquidity creation.
As I have said to this committee before, there
is little doubt that the dollar could be driven
lower by " b a d " monetary policy—a policy that
poses a clear inflationary threat of its own and
695
undermines confidence. But such a policy could
hardly be in our overall interest—it would in fact
be destructive of all that has been achieved.
The hard fact remains that so long as we run
massive budgetary deficits, we will remain dependent on unprecedented capital inflows to help
finance, directly or indirectly, that deficit. The
net capital inflows will be mirrored in a trade
deficit—they are Siamese twins.
As things now stand, if our trade deficit narrowed sharply, both the budget deficit and investment needs would have to be financed internally, with new pressures on interest rates and a
squeeze on other sectors of the economy—some
of which are now doing relatively well, such as
housing, and some, such as farmers and thrift
institutions, already under strong financial pressure. The implications for our trading partners
and for the heavily indebted developing countries would be severe as well.
There has to be a way out of the impasse—a
way that would maintain, and even enhance,
confidence in our own economy and prospects
for stability, a way that would not simply shift
the pressures from one sector of the economy to
another, and a way consistent with the economic
growth of other countries. But that way cannot
be found by U.S. monetary policy alone.
What we can do is reduce our dependence on
foreign capital and on the rising imports to meet
our domestic demands by curtailing the budget
deficits that importantly drive the process. In
that sense, the choice is before you—in the
decisions you will make in the budgetary deliberations that have been so prolonged.
The needed adjustments would be eased as
well if other industrialized countries became less
dependent on stimulus from the United States for
growth in their own economies.
I am a central banker. I can well appreciate
and sympathize with the priority that those countries have attached to budgetary restraint and
particularly to the need to restore a sense of price
stability in their own economies. They have had
a large measure of success in those efforts in the
face of depreciation of their currencies vis-a-vis
the dollar, which has made the process more
difficult. The pull of capital into the United
States, and the reduced outflow from the United
States, has also had effects on their own financial
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Federal Reserve Bulletin • September 1985
markets and interest rates, and thus on the
possibilities for "home grown" expansion. But
as those adverse factors diminish in force or even
begin to be reversed, opportunities surely exist
for fostering more expansion at home, in their
own interest as well as that of a better balanced
world economy.
All of the industrialized countries, working
with the International Monetary Fund, the World
Bank, and by other means, need to continue to
support the efforts of much of the developing
world to restore the financial and economic
foundations for growth in their countries. That
process, under the pressure of the "debt crisis,"
has been under way for some years. By its
nature, the fundamental adjustments required
pose challenging questions of economic and political management. There is a certain irony in
observing the enormous difficulties in our own
political process in achieving—so far without
success—deficit reductions equivalent to 1 to 2
percent of our GNP while much poorer countries
with much greater demands upon them are cutting their deficits by much larger relative
amounts.
That effort—along with others—is justified
only by its necessity to their own economic
health. It is hardly surprising that progress has
been uneven, that from time to time setbacks are
encountered, and that impatience and frustration
surface politically. But I know of no realistic
shortcuts or substitutes for the effort to place
their own economies on a sounder footing, any
more than we can ultimately escape our own
responsibilities to put our budget in order.
What is so encouraging is that the strong effort
that has been made in most of the indebted
countries is yielding some tangible results. A
measure of growth has been restored in Latin
America as a whole. With interest rates lower
and many debts restructured, debt burdens are
gradually but measurably being reduced.
For the most part, the heavily indebted countries are still a long way from regaining easy
access to commercial credit markets. Extraordinary cooperative efforts by the International
Monetary Fund (IMF), the World Bank, and
commercial banks will continue to be required
for a time to make sure that external financing
obligations are structured in a way that matches
ability to pay. As always, the ultimate success of
all those efforts—most of all those by the borrowers themselves—will depend upon orderly
growth, reasonable interest rates, and access to
markets in the rest of the world, which will be
determined by our actions and those of our
trading partners.
CONCLUSION
We have had a relatively strong economic expansion in the United States over the past two and
one-half years as a whole. At the same time, the
rate of inflation has remained at the lowest level
in more than fifteen years. That combination
should be a source of great satisfaction. But two
and one-half years is not, in itself, terribly significant in the economic life of the nation. What will
count is whether we can build on that progress,
and extend it over a long time ahead.
The inherent strength of our economy and the
momentum of our expansion have carried us a
long way. We have done a lot to lead the world to
recovery. The longer-term opportunities are still
there for the taking. But we also do not need to
look far to see signs of strain, imbalance, and
danger.
In these circumstances, monetary policy has
accommodated a sizable increase in monetary
and credit growth, and interest rates have
dropped appreciably even though they are still
relatively high in real terms. In that way, economic growth has been supported at a time when
the dollar has been particularly strong and inflationary pressures, at least in contrast to the 1970s
and the early 1980s, quiescent. But there are
obvious limitations to the process of monetary
expansion without threatening the necessary
progress toward stability upon which so much
rests.
Plainly, there are implications for other policies as well.
The widely shared sense that other nations
should do more to open markets, to deal with the
structural rigidities in their economic systems, to
encourage growth—to get their own houses in
order—is certainly right. We can legitimately
cajole, and urge, and bargain to those ends.
But there can also be no doubt that it all will
come much easier as the United States does its
Statements to Congress
part. Monetary policy must be part of that effort.
But we also do need to come to grips with the
budget deficit. We do need to avoid a witch's
brew of protectionism.
The success of the world economy—and of our
fortunes within it—is in large measure dependent
on us. That is the inescapable consequence of
size and leadership.
•
Chairman Volcker presented identical testimony
Housing, and Urban Affairs, July 18, 1985.
Statement by Preston Martin, Vice Chairman,
Board of Governors of the Federal Reserve System, before the Subcommittee on Economic Stabilization of the Committee on Banking, Finance
and Urban Affairs, U.S. House of Representatives, July 18, 1985.
I appreciate the opportunity to discuss with you
this morning, on behalf of the Federal Reserve
Board, developments in the external position of
the United States and related policies here and
abroad. The openness of the U.S. economy is
continuously being brought home to all sectors of
our economy. The value of the dollar, other
developments affecting our exports and imports,
and the inflow of capital from abroad play a
crucial role in determining the growth and the
composition of U.S. output and income. Thus
our policies must be deliberate, constructive,
and farsighted; the costs over the long run of
acting incautiously now are too great.
One of the most significant external economic
developments for the United States in recent
years has been the dramatic appreciation of the
dollar. Since the end of 1980, the international
value of the dollar against a weighted average of
the other G-10 currencies has appreciated on
balance about 60 percent, despite backing off
significantly from its peak earlier this year. The
appreciation has been great even after allowing
for the somewhat faster rate of increase of prices
abroad than in the United States. The increase in
the dollar's value has been greater against European currencies than against the Japanese yen or
the Canadian dollar. In a sense, those latter two
currencies have been strong, just not as strong as
the U.S. dollar.
The factors underlying the dollar's rise are
complex. A great deal of the explanation centers
on a combination of a highly expansionary fiscal
policy and a decline in the rate of inflation in the
697
before the Senate
Committee
on
Banking,
United States. Reductions in taxes in recent
years and increases in government spending
have enhanced the attractiveness of investment
in this country and have raised overall demands
for goods and services. The federal government
has increased substantially its demands for credit
to finance its huge deficits. With Federal Reserve
policy designed to avoid monetizing the deficit,
real interest rates have been higher in the past
five years than they were earlier in the postwar
period. These interest rates, relatively robust
rates of economic growth in this country, both
actual and projected, as well as confidence and
more general "safe-haven" factors, have produced a record volume of capital inflow from
abroad, a moderation in U.S. capital outflow,
and a rise in the foreign exchange value of the
dollar.
The extreme volatility in exchange markets
earlier this year and especially the dollar's substantial spurt in February provide convincing
evidence that expectational and other factors
have been at work, as well. However, the decline
in the dollar since the end of February probably
was related again mainly to more fundamental
perceptions—for example, prospects for lower
real interest rates on dollar assets in response to
weaker U.S. economic growth and the market's
views of improved chances for reducing our
budget deficit. Another factor may have been the
situation of thrift institutions in Ohio and elsewhere, which received widespread and, perhaps,
exaggerated attention abroad.
The rise in the international value of the dollar
since 1980 has been a significant proximate factor contributing to our unprecedented deficits on
trade and current accounts. From a balance near
zero in 1980, the current account has moved to a
deficit at an annual rate of about $125 billion so
far this year and is likely to widen further.
Our current account deficit has reflected pri-
698
Federal Reserve Bulletin • September 1985
marily the unparalleled increase in our trade
deficit, which occurred despite the significant
decline in the value of oil imports from $80 billion
in 1980 to less than $50 billion at an annual rate in
the first half of 1985. The rise in the international
value of the dollar has reduced the competitiveness of U.S. goods, both in foreign markets and
here at home. Thus, the growth of our exports
has been held down. At the same time, imports
into the United States have grown phenomenally—about 65 percent in volume since 1980.
The rise in the dollar has not been the only
factor underlying the deterioration in our trade
position. Another factor has been that economic
growth in our trading partners generally has
lagged significantly behind growth in the United
States, and their demands for imports have for
this reason grown more slowly. Among the industrial countries, this has been especially true in
Europe, where growth of real GNP has averaged
only about IV2 percent over the past three years.
Many developing countries, notably in Latin
America, the Far East, and Eastern Europe,
have adopted adjustment programs to service
their external debts, which temporarily have had
an adverse effect on their imports. Weak global
demand and high real interest rates made the
servicing of their external debts increasingly
difficult.
Given the importance of these relative demand
factors in the evolution of the U.S. trade position, it is oversimplified but nevertheless instructive, I believe, to characterize external developments over the past few years in the following
way. There has been a shift in the demand for
claims on the U.S. economy by foreign, as well
as by U.S., investors that has bid up the value of
the dollar sufficiently to generate a current account deficit that corresponds to the desired
increase in net claims on the United States. This
shift contrasts with earlier periods in which it
was typically believed that the exchange value of
the dollar moved to equilibrate trade or current
account positions; when those positions became
too large or too small, a change in exchange rates
was expected to correct the situation.
The more recent evolution of our external
situation has both positive and negative implications for the U.S. and world economies. On the
positive side, our government budget deficit has
been financed at lower interest rates than would
otherwise have been the case. As a consequence,
there has been less crowding out in the interestsensitive sectors of the U.S. economy, and, in
particular, there has been more private investment and housing activity.
At the same time, the sharp increase in our
imports has provided needed stimulus to the
world economy and has helped improve the
balance of payments of some heavily indebted
developing countries.
We also have experienced lower inflation rates
than we would have otherwise, given the vigor of
the 1983-85 U.S. recovery and the robust increase in U.S. employment. The cost of the
goods that we purchase has been lowered—
directly, because of the lower price and the ready
availability of imported goods and materials, and
indirectly, because U.S. producers have been
forced to adopt more efficient techniques to
modernize and to cut costs, to innovate, and to
invest in productivity enhancements to compete
with foreign producers. The rate of increase in
U.S. labor productivity has improved on balance, although it remains less than that in some
of our major trading partners.
On the negative side, of course, have been
severely adverse effects on some sectors of the
U.S. economy. These are the sectors that are
most vulnerable to foreign competition—both
those whose sales abroad have been eroded and
those who have lost shares of domestic markets
to less expensive foreign products. Agriculture,
manufacturing, and even "high technology"
goods producers have lost world and domestic
market shares. Whereas more than seven million
jobs have been created since the end of 1980 in
the private service sectors—which, by their nature, are less open to foreign competition—the
number of jobs in our manufacturing industries
has actually declined. Indeed, there is some
evidence of U.S. firms beginning to shift some of
their investment and production abroad.
Without in any sense denying the social and
the economic costs that these adjustments entail,
I should reiterate, however, that the high value
of the dollar and the external developments that I
have cited basically have shifted some of the
burden of accommodating to the government
deficit away from traditional interest-sensitive
sectors and toward sectors relatively sensitive to
movements in exchange rates. The specific sec-
Statements to Congress
toral impacts have been mitigated, but not avoided, by the strong overall recovery.
The severe strains that were imposed on certain sectors of our economy have contributed to
serious pressures for more restrictive trade policies. I will come back to this issue in a few
minutes when I discuss alternative policy responses. But it should be clear that such protectionist pressures must be resisted. This practice
follows from our general policy of seeking to
enhance the benefits of international trade for
our citizens. Moreover, so long as we continue to
run a huge federal budget deficit, the inflow of
capital from abroad and our access to foreign
goods provide welcome relief to our credit markets.
Let me turn now to one other implication of
our large and growing current account deficit,
namely, the continuing erosion of the net external financial position of the United States. Data
recently released by the Department of Commerce suggest that the United States became a
net debtor to the rest of the world sometime in
spring 1985, falling from a peak position in which
the United States had net claims on the rest of
the world of about $150 billion at the end of 1982.
These statistics are subject to a variety of
defects. For example, our stock of gold—
amounting to more than 260 million ounces—is
valued in these statistics at about $42 per ounce,
compared with a market price now of more than
$300 per ounce. Similarly, the stock of U.S.
direct investments overseas, as well as foreigners' direct investments here, are expressed only
at book value. At the same time, none of the
statistical discrepancy in our balance of payments accounts has been counted as net capital
inflows, contrary to the conventional wisdom
that much of the discrepancy takes that form; to
that extent, net foreign claims on the United
States are understated.
Notwithstanding these statistical issues, it remains clear that if the United States is not now a
net debtor country, we probably soon will be as
we continue to run current account deficits of
well over $100 billion a year.
One might ask, "How serious is this development?" One answer is that an increasing burden
will be placed on current and future generations
to service that debt. This burden will be especially onerous to the extent that foreign funds end up
699
financing current consumption—for example, by
the federal government—since in that case our
ability to consume in the future will be adversely
affected. However, I have argued already that
we have had more investment in this country
than we would have had without the inflow of
capital. While it is impossible to know precisely
how much more investment we have had, to
some extent at least the inflow of capital has had
as its direct or indirect counterpart some increase in the productive capacity of this country
that will facilitate the servicing of our debt.
Also worrisome is the inference, based on the
experience of several developing countries in
recent years, that the vulnerability of an economy to shocks can be very sensitive to the level of
its net external debt. But there are two major
differences between our situation and that of
many of the financially troubled developing
countries. First, we are not building up large
debts denominated in foreign currencies. Second, creditor confidence in the ability of the
United States to service its debts is supported by
a healthy, flexible economy with a large and
diversified tradable goods sector and a broad and
dynamic capital market.
Nevertheless, we must recognize that foreigners will not forever invest an increasing share of
their wealth in this country, and we might wonder whether it is appropriate for one of the
richest countries in the world to be a net absorber of capital from the rest of the world.
I want to emphasize that we must protect
against the risk that the factors inducing investors to bid up the price of dollar assets could
reverse abruptly. If that were to happen at a time
when credit demands in this country were still
strong, especially those from the federal government, the resulting pressures on our financial
markets could have seriously harmful consequences. Interest rates would be driven up,
private investment would be curtailed, and the
housing sector would be hard hit.
It will come as no surprise to you, therefore,
that I believe prompt action to reduce the federal
budget deficit is an essential aspect of the appropriate policy response to the problem of our twin
deficits. Indeed, action in this area is long overdue. In particular, I believe that progress in
controlling the growth of the spending side of the
budget is vital. Reductions in the government's
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Federal Reserve Bulletin • September 1985
demand on savings and on resources tend to
reduce pressures on interest rates and to provide
scope for strong private investment and for employment growth. Such a process would also
tend to reduce upward pressures on the dollar
and relieve some of the excessive burden on
many of our manufacturing firms and on our
farmers.
In contrast to the need to tighten the budget
position in the United States, I am inclined to
believe that there is scope for more vigorous
economic expansion abroad. Authorities in other
industrial countries have been reluctant to alter
existing policies, which have been aimed at disinflation and moderate economic growth over the
medium term. They apparently are concerned
about the financing of government deficits, about
the excessive role of the public sector in economic decisionmaking, and about the potential that a
lowering of interest rates could weaken the value
of their currencies and apply upward pressure on
domestic prices. These are legitimate concerns,
but they should be balanced by an awareness of
the costs and the dangers of continued high
unemployment and continued international imbalances. Moreover, more rapid expansion in
several countries together would be mutually
supportive. Tax revenues would be enhanced,
and the value of their currencies would tend to
move together against the dollar. Indeed, the
prospects of stronger economic growth actually
could tend to raise the demand for investments
denominated in those currencies.
A more vigorous expansion abroad—together
with an improvement in the U.S. fiscal position—would over time help to redress some of
the major distortions in the global economy
today. These distortions have adversely affected
not just the U.S. economy but the economies of
other industrial countries, as well, and have
exacerbated the difficult adjustment process now
under way in many of the developing economies,
especially in Latin America.
In the face of the basic imbalances in the U.S.
and world economy, resort to increased trade
protection would be pointless and, in the long
run, counterproductive. The list of reasons for
opposing the imposition of additional import
barriers is well known. Import barriers raise
prices facing U.S. consumers and U.S. producers who use imported goods and materials as
inputs in production processes. By raising
prices, these barriers threaten to reignite the
inflation psychology we have struggled so painfully to subdue. Import barriers distort the allocation of domestic resources and enable producers to postpone the investment and the
rationalization of production that ultimately is
necessary. Barriers can involve significant economic setbacks from some of our friends and
trading partners—again, including those in Latin
America—for whom access to markets in industrial countries is vital in economic, social, and
political terms.
Trade barriers often violate or undermine international agreements. Especially in such cases,
but surely not only then, they are likely to
provoke retaliation and so threaten the global
trading order on which U.S. exporters and therefore the U.S. economy in general importantly
depend.
I have not so far explicity addressed the role of
monetary policy in dealing with our external
situation. An aggressive policy by the Federal
Reserve of massive money growth to bring down
short-term interest rates to reduce the value of
the dollar would set the stage for higher inflation
in the future. Excessively expansionary monetary policies obviously would not be a solution to
the yawning trade deficit. The experience in the
late 1970s taught us harsh lessons about the
disruptive influence of high and variable inflation
in the United States on the domestic and world
economies. This experience also has demonstrated the high costs for the economy of substantially reducing inflation once it gains momentum.
This is not to say that the Federal Reserve is
indifferent or insensitive to the problems that we
have discussed this morning. The Board and the
Federal Open Market Committee take into account the foreign exchange value of the dollar
and the international economic situation explicitly in their policy deliberations. Moreover, to the
extent that the dollar and the current account
deficit affect U.S. prices, growth, and employment they are taken account of implicitly, as
well. But the overriding task of monetary policy
is to ensure long-run price stability, and thereby
sustainable long-run economic growth. We cannot afford to jeopardize the successful accomplishment of that task.
We cannot deny that we have economic prob-
Statements to Congress
701
lems. What I have argued this morning is that
those problems derive from fundamental imbalances that must be corrected. The search for
easy, short-term palliatives such as trade barriers
or overly expansionary monetary policy cannot
ultimately be successful, and will only distract us
from the tough decisions that must be made.
There are, of course, a number of developments
that would help in a real way. I am optimistic that
the rapid growth in the U.S. capital stock so far
in this recovery and other productivity-enhancing developments will improve the competitiveness of U.S. products in world markets. Moderately faster growth in industrial countries abroad
also would help to correct international imbal-
ances. But the most fundamental force behind
the problems that I have discussed is the huge
federal budget deficit, and thus substantial reductions in this deficit offer the best long-run
solution to trade imbalances. Although the Federal Reserve will continue to consider exchange
rates and trade imbalances in its deliberations,
we should not be looked to as a main source of a
solution. As I mentioned earlier, any attempt by
the Federal Reserve to bring exchange rates
down through highly expansionary policies
would inevitably lead to more inflation. Thus our
best hope for correcting international imbalances
lies with efforts by the Congress and the administration to cut federal deficits.
•
Statement by Paul A. Volcker, Chairman, Board
of Governors of the Federal Reserve
System,
before the Subcommittee on International Development Institutions and Finance of the Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives, July 30, 1985.
that seem to me very much in accord with the
larger interests of the United States.
I believe that the constructive response of
these institutions to the severe debt and adjustment problems that emerged in the early 1980s
illustrates these points. In the initial stages of the
international debt crisis, the Fund played an
essential and, in key respects, an innovative role.
It worked with borrowing countries to develop
strong adjustment programs that could command
international support. Concurrently, it helped
coordinate an unprecedented international cooperative effort to provide sufficient external funds
to meet immediate needs and to support the
adjustment efforts of the countries.
The World Bank and the regional lending
institutions, geared toward a longer-range perspective and project lending, could not, in the
circumstances, at first respond so forcibly. Indeed, borrowing countries cut back on some
investment projects that could have received
support by the World Bank.
Now, many of the borrowing countries are, or
should be, moving into a second stage, looking
beyond the immediate need for budgetary and
monetary adjustments to the essential need to
sustain growth within the constraints of servicing
existing debt and the less ready availability of
private credit. In that context, the role of the
World Bank and of the regional development
lending institutions is likely to become much
more critical. The need for innovative approach-
I appreciate your invitation to appear before this
subcommittee to discuss the multilateral development institutions and their role with respect to
the debt and growth problems in the developing
countries. Over the years I have had some opportunity to observe the Bretton Woods institutions—the International Monetary Fund (IMF)
and the World Bank—and, to a much lesser
degree, the regional development banks. All
these institutions, in my judgment, have important ongoing roles to play in safeguarding international stability and in promoting sound growth
in the world economy.
In the process, these institutions necessarily
have to adapt their programs and approaches to
new circumstances as they emerge. That task is
not an easy one for large institutions, and particularly for those institutions that must operate
within the framework of a wide international
consensus. At the same time, it is the fact that
these institutions are international, with memberships drawn from all nations other than the
USSR and most of its satellites, that provides a
sense of cohesion and of political legitimacy that
is essential to the success of their efforts—efforts
702
Federal Reserve Bulletin • September 1985
es and for even closer cooperation with the Fund
seems to me evident.
There is a natural division of labor between the
two Bretton Woods institutions that must be
respected. The Fund is concerned with monetary
stability, with balance of payments equilibrium,
and with the broad economic policies necessary
to support that equilibrium. The Bank is concerned with longer-term development and with
projects and policies that are designed to support
that development in particular sectors of the
economy.
These are valid distinctions. Essentially the
roles are complementary, not competitive. But in
practice, both institutions serve as sources of
finance, as purveyors of policy analysis and
advice to their members, and as forums for
economic consultations among governments. In
specific areas, those functions can overlap and
should be coordinated. Management of the "debt
problem" provides apt illustrations.
FIRST RESPONSES TO THE
INTERNATIONAL
DEBT PROBLEM
Beginning in 1982, many foreign borrowers, principally in Latin America but also in other areas of
the world, experienced an abrupt curtailment of
their access to new loans from the private market. The Fund responded by assisting in the
design of stabilization programs to help restore
confidence and external balance. It also provided
temporary financial assistance to many of the
most troubled borrowers. In one perspective,
that kind of work is a normal part of the Fund's
business. But it has been without precedent in
scope and challenge. More or less simultaneous
negotiations have been required with a large
number of member countries in a highly charged
atmosphere. Not only were the fortunes of particular countries at stake, but also the performance of the world economy and of the financial
system as a whole.
In that situation, the Fund became involved to
an unusual degree in consultations with the borrowing countries' commercial bank and official
creditors. Those lenders clearly recognized that
individual, uncoordinated responses to the crisis
could not serve their mutual interest in the
orderly adjustment and the servicing of loans.
Restructuring of old debt and of some new
private credit would typically be necessary to
provide enough time for the adjustment process
to be effective. By working with the Fund,
lenders could both be better assured that appropriate adjustment programs were undertaken and
that financial needs were appropriately assessed.
From the viewpoint of the Fund, orderly refinancing of outstanding debt and the provision of
new private credit, substantially supplementing
its own resources, provided essential financial
support during the period of economic adjustment.
With its traditional emphasis on investment
planning and on project lending, the World Bank
was not in a position to react as quickly as the
IMF to the immediate adjustment needs of the
major borrowing countries. Nor were borrowing
countries—faced with overwhelming short-term
needs to cut back on budget deficits, to bring
monetary expansion under control, and to adjust
exchange rates—able to give priority attention to
long-term development and investment programs. Instead, cutbacks in overall investment
and consumption expenditures by governments
became unavoidable. In these circumstances,
both existing and new investment projects assisted by the World Bank and other donors tended to
slow down rather than increase.
Even in the "crisis" stage, however, there
have been clear opportunities for mutually supportive approaches by the Fund and by the
Bank.
In advising countries about "adjustment" programs, the Fund is always concerned with measures that should help promote economic efficiency and long-term development. Flexible
pricing policies, more open and less discriminatory trade practices, and appropriate exchange
rates are normal parts of Fund-sponsored programs. Such approaches are consistent with, and
typically crucial to, long-term growth. At the
same time, the Bank was, in fact, able to increase
or to speed up its disbursements of funds to
several of the countries that were affected by the
debt crisis.
That response was assisted by the capability
that the World Bank has developed in 1979 for
nonproject lending through so-called structural
adjustment loans (SALs). The Bank's new commitments for SALs and for broadly similar sec-
Statements
toral adjustment loans expanded from less than
$Vi billion in fiscal year 1980 to more than %2lh
billion in fiscal year 1984, before declining somewhat in the fiscal year just ended.
The SALs and the sectoral adjustment loans
have the advantage of being fast disbursing so
that they can have an immediate effect on the
short-term balance of payments financing requirements. At the same time, they are strongly
linked to policy actions that are designed to
promote economic efficiency in particular sectors and to support growth. The recipient government, in effect, commits itself to the changes
in specific policies that will be sustained over
time and that are expected to have a material
positive impact on the effectiveness of its investment expenditures and on the growth of the
economy.
There is, by now, a record of accomplishment
by these kinds of programs in some countries.
For example, Turkey has undertaken a series of
major reforms, including major steps toward
import liberalization, decontrol of interest rates,
and reform of state economic enterprises with
the support of the World Bank.
These efforts of the Bank overlap those of the
Fund in two respects. The quick-disbursing Bank
loans help provide the necessary external financing for the borrowing countries. And, at a sectoral or " m i c r o " level, the policies supported by
the Bank should reinforce and undergird the
efforts of the Fund to promote economic efficiency and competitiveness.
The recent efforts by the Fund and by the
Bank in Colombia exemplify these relationships,
and could have implications for future cooperation. While that country has not requested or
received IMF financial assistance, it has kept the
Fund fully informed in developing its economic
program. Just last Friday, the Fund, in turn,
agreed to monitor progress in implementing the
economic adjustment program, that, in the judgment of the Fund, is broadly appropriate to the
needs of Colombia. Meanwhile, the World Bank
is a major lender to the country, both for specific
projects and for sectoral adjustment. The size of
that lending program has been facilitated by the
efforts of Colombia to implement suitable adjustment measures. The staffs of both institutions
will work together in assessing Colombia's progress.
LOOKING
to Congress
703
AHEAD
The particular circumstances in Colombia are
unique, and the arrangements in that country do
not necessarily provide a precise prototype for
others. However, all the heavily indebted countries in Latin America and elsewhere need to
move from a situation of endemic financial crisis
to another stage in development, looking toward
what is necessary to sustain growth. As they do
so, the particular skills and the resources of the
World Bank become increasingly relevant.
Heavy reliance on the shorter-term tools of the
IMF should then be phased down and out.
Clearly, either or both of these institutions can
only play a supporting role in the economic
development of a country. The borrowing countries themselves must maintain a disciplined budgetary and financial environment, enabling them
to consolidate the essential gains that they have
made in achieving better balance in their external
accounts and to respect the tight constraints that
still prevail with respect to their access to external finance. I believe that these countries will
also have to encourage more open and competitive economies that are able to sell into world
markets as well as to increase their productivity.
They will need well-conceived investment programs. More generally, they will need to encourage economic efficiency and well-functioning
markets in agriculture, industry, and finance.
These are the kinds of things that the World
Bank and its affiliate, the International Finance
Corporation (IFC), working especially with the
private sector, can support, but not impose.
Internal reform is critical in circumstances in
which access to new foreign bank and trade
credits seems bound to remain limited for the
time being. The hope that was occasionally expressed for really major increases in long-term
official lending on concessional terms to the
middle-income developing countries does not
appear to be politically realistic. Moreover, I
doubt that industrial countries are prepared to
ease debt burdens substantially by taking over
and by writing off existing debt to private lenders. Nor do such approaches seem to me essential if well-conceived adjustment efforts are
maintained.
In time, renewed confidence could end capital
flight and induce repatriation of capital by the
704
Federal Reserve Bulletin • September 1985
citizens of the borrowing countries themselves as
well as fresh flows from abroad. That process
would be immensely helpful and the best possible evidence of success. But it is, of course,
dependent upon a sense of sustained economic
performance.
The implication of these conditions is that it is
too early for the major borrowers to plan on
significant net private inflows of capital. Imports
will not be able to grow over time at a rate
substantially exceeding the growth in exports.
But that is not a recipe for stagnation, so long as
exports, in fact, grow.
One of the lessons of experience is that rapid
growth in developing countries, without excessive dependence on new debt, must go hand in
hand with participation in international trade.
That is why a competitive and a relatively open
economy is so important. This theme is one that
the World Bank has stressed in its structural and
sectoral adjustment lending.
Without doubt, there will be more opportunities for working with borrowing countries to help
encourage the process. In some countries, for
instance, there are urgent needs to improve the
efficiency and the effectiveness of agriculture, of
transport, and of domestic financial markets and
institutions. Review of the structure, operation,
and performance of state enterprises is sorely
needed, including the possibility of greater private participation and of incentives in some
cases. Structural distortions that hamper or discourage sectors of the economy that potentially
could become the most dynamic and efficient
need to be eliminated. That in turn may require
import liberalization so that companies that have
high export potential can in fact make use of the
most rational and efficient production techniques. Much of this seems to be recognized, for
instance, in the latest steps announced by Mexico only last week, in conjunction with actions to
reinforce budgetary discipline and to adjust exchange rates.
In all these areas, there should be potential
opportunities for constructive collaboration by
the World Bank, both in consultation as to the
design of programs and in financing, dependent
on effective implementation. That official financing not only will help the borrowing countries to
cover external needs during a period when private financing is so slack but also will encourage
some resumption of private lending, through socalled cofinancing or otherwise.
You are aware that the World Bank now has
under development a proposed Multilateral Investment Guarantee Agency (or MIGA). MIGA
would be designed to enhance prospects for
foreign direct investment by providing guarantees against noncommercial (that is, currency
transfer and expropriation) risks. Here in the
United States the Overseas Private Investment
Corporation has offered such guarantees to U.S.
investors in many countries for more than 20
years, with a considerable measure of success.
Some other countries have comparable programs. But, properly structured, I believe that
the wider availability of such guarantees on a
multilateral basis could help improve the climate
for direct investment in the developing countries.
None of this suggests to me that the major
focus of the World Bank on project lending will
not, or should not, continue. The inherent discipline in project lending—the need to relate a loan
to tangible projected returns—is important. But
it also is quite possible that, as a matter of
relative priority, heavily capital-intensive, longlead-time projects, with returns deferred far into
the future, could give way to areas in which more
effective use of the existing capital stock is
emphasized, with quicker and more evident returns.
I will not pretend to an expertise in these areas
that I do not possess. But certain broad conclusions do seem valid to me.
• In the World Bank Group and the regional
lending institutions the world has an enormously
valuable resource. That resource lies not just in
their technical skills and financial resources. As
international institutions, they are in a uniquely
advantageous position for working constructively with developing countries in the common
interest.
• The role of those institutions will be more
important—indeed potentially crucial—in Latin
America and elsewhere if those countries are to
be able to restore strong and sustained growth in
the wake of the debt crisis.
• The development institutions can only be
effective as they build on the stabilization efforts
of the countries themselves—the effort that has
been so strongly supported by the IMF.
• As that implies, the efforts of the IMF and the
Statements to Congress
World Bank in heavily indebted countries have
become increasingly intertwined, and the need
for close cooperation and operating relationships
between the institutions has greatly increased.
• The entire effort deserves the continued
strong support of the United States, including, as
and when the need is demonstrated, financial
backing in the form of capital increases.
Perhaps I need not emphasize at length that
the success of all these efforts is also fundamentally dependent on prosperous, growing econo-
705
mies in the industrialized world. Here and elsewhere, we must maintain reasonably open
markets for what others can produce more efficiently and economically. The developing countries, in turn, can again become the most promising and the most rapidly expanding markets for
our products, as they were during much of the
1960s and 1970s. Flourishing two-way trade will
be both the means for recovery and growth and a
measure of our success.
•
706
Announcements
LYLEE.
GRAMLEY:
RESIGNATION AS A MEMBER
OF THE BOARD OF GOVERNORS
Lyle E. Gramley resigned as a member of the
Board of Governors, effective September 1,
1985. Following is the text of Governor Gramley's letter of resignation to President Reagan:
June 26, 1985
Dear Mr. President:
It has been a great privilege to serve as a Member of
the Board of Governors of the Federal Reserve System during the past five years. For personal reasons,
however, I must submit my resignation eflFective September 1, 1985.
Sincerely yours,
Lyle E. Gramley
APPOINTMENT OF LARGE
DOLLAR
PAYMENT SYSTEMS ADVISORY
GROUP
The Federal Reserve Board has announced the
appointment of a 14-member panel to assist in
the development of its program to reduce risk on
large dollar transfer systems.
Roland K. Bullard III, Executive Vice President of The Philadelphia National Bank, has
agreed to serve as chairman of the panel, called
the Large Dollar Payment Systems Advisory
Group.
On May 17, 1985, the Board announced a
statement of policy to control and reduce risks to
depository institutions that participate in large
dollar wire transfer networks. Large dollar networks are an integral part of the payment and
clearing mechanism and daylight overdrafts on
these systems now total about $110 billion to
$120 billion per day. Daylight overdrafts occur
when an institution has sent funds over the
Federal Reserve wire transfer system in excess
of the balance in its reserve or clearing account,
or it has sent more funds over a private wire than
it has received.
In adopting its policy statement to reduce
daylight overdrafts, the Board agreed to set up
an Advisory Group to study any and all matters
that could reduce risk on large dollar transfers.
In addition to Bullard, the Advisory Group
includes the following members:
William P. Ballard, Executive Vice President
and Cashier, Citizens and Southern Georgia Corporation, Atlanta, Georgia.
Nathan C. Collins, Executive Vice President,
Valley National Bank of Arizona, Phoenix, Arizona.
Thomas A. Cooper, Executive Vice President,
Bank of America NT & SA, San Francisco,
California.
David L. Eyles, Executive Vice President and
Chief Credit Officer, Chemical Bank, New York,
New York.
Donald R. Hollis, Senior Vice President, First
Chicago Corporation, Chicago, Illinois.
Roger K. Lindland, Senior Executive Vice
President, Great American First Savings Bank,
San Diego, California.
David O. Nordby, Executive Vice President,
Mellon Bank, N.A., Pittsburgh, Pennsylvania.
Peter C. Palmieri, Vice Chairman, Irving Trust
Company, New York, New York.
Seymour R. Rosen, Vice President, Citibank,
N.A., New York, New York.
John W. Sapanski, President and Chief Operating Officer, Dime Savings Bank, New York,
New York.
O.J. Tomson, Chairman of the Board and
CEO, Citizens National Bank, Charles City,
Iowa.
Flavian E. Zeugin, First Vice President, Swiss
Bank Corporation, New York, New York.
William C. Dudley, Vice President, Economic
Analysis Department, Morgan Guaranty Trust
Company, New York, New York.
707
REVISED LIST OF OTC
SUBJECT TO MARGIN
STOCKS
REGULATIONS
The Federal Reserve Board has published a
revised list of over-the-counter (OTC) stocks
that are subject to its margin regulations, effective August 13, 1985.
The list includes all OTC securities designated
by the Board pursuant to its established criteria
as well as all securities qualified for trading in the
national market system (NMS). This list includes
all securities qualified for trading in tier 1 of the
NMS through August 13 and those in tier 2
through July 16, 1985. Additional OTC securities
may be designated as NMS securities in the
interim between the quarterly publications of the
Board's list and will be immediately marginable.
The next publication of the Board's list is scheduled for November 1985.
This List of Marginable OTC Stocks supersedes the revised list that was effective on May
14, 1985. Changes that have been made in the
list, which now includes 2,476 OTC stocks, are
as follows: 157 stocks have been included for the
first time, 122 under NMS designation; 43 stocks
previously on the list have been removed for
substantially failing to meet the requirements for
continued listing; 44 stocks have been removed
for reasons such as listing on a national securities
exchange or involvement in an acquisition.
In addition to NMS-designated securities, the
Board will continue to monitor the market activity of other OTC stocks to determine which
stocks meet the requirements for inclusion and
continued inclusion on the list.
EXTENSION OF COMMENT PERIOD ON
PROPOSED AMENDMENT TO REGULATION
Z
The Federal Reserve Board extended the comment period from July 12, 1985, to August 30,
1985, on a proposed amendment to Regulation Z
(Truth in Lending) to require lenders to provide
more information to consumers about adjustable
rate mortgages. The proposal was originally published May 10, 1985.
SYSTEM
MEMBERSHIP
ADMISSION OF STATE BANKS
The following banks were admitted to membership in the Federal Reserve System during the
period July 1 through July 31, 1985:
Colorado
Thornton
Florida
Miami
St. Petersburg
Georgia
Martinez
Pennsylvania
Ebensburg
Texas
San Antonio
City wide Bank of Thornton
Grovegate Bank
Bank of St. Petersburg
First Columbia Bank
Laurel Bank
Mercantile Bank and
Trust Company
Virginia
Fairfax . . . Fairfax Bank and Trust Company
Virginia Beach
Bank of Tidewater
708
Record of Policy Actions of the
Federal Open Market Committee
MEETING HELD ON MAY
Domestic
Policy
21,1985
Directive
The information reviewed at this meeting suggested only a modest pickup in real GNP in the
current quarter from the 0.7 percent annual rate
of growth reported for the first quarter. Spending
by domestic sectors has been relatively well
maintained, but a large share of the demand for
goods apparently has been met by imports rather
than through an expansion of domestic production. Broad measures of prices and wages generally were continuing to rise at rates close to those
recorded in 1984.
After declining in March, total retail sales
rebounded in April to a level nearly 3A percent
above the average for the first quarter. Gains
were particularly strong at automotive outlets
and at food and general merchandise stores.
Sales of new domestic automobiles have been
running at an annual rate of about 8V2 million
units since the beginning of April, in line with the
strong pace posted in the first quarter and considerably above last year's average. Part of the
recent strength in car sales was attributable to
below-market financing incentives offered by
major manufacturers.
Total private housing starts increased about
14V2 percent in March to an annual rate of 1.9
million units and continued at that advanced
level in April. Newly issued permits for residential building fell somewhat in April but, at an
annual rate of nearly 1.7 million units, remained
in the improved range recorded in the first quarter. Sales of new and existing homes improved in
March, the latest month for which data were
available, as the general decline in mortgage
credit costs continued to bolster demand.
The index of industrial production declined 0.2
percent in April, after rising little in the first
quarter. Production of defense and space equipment continued to advance, but output in most
other major market sectors fell. Reflecting these
widespread declines in output, the capacity utilization rate for total industry dropped Vi percentage point to 80.6 percent in April, its lowest level
since January 1984.
The decline in industrial production in April
was associated with further reductions in manufacturing employment. The loss of 45,000 manufacturing jobs in April brought the cumulative
loss in that sector to 130,000 thus far in 1985.
Outside of manufacturing, sizable job gains were
reported for April in the services industry and in
construction. On balance, total nonfarm payroll
employment rose 215,000 in April compared with
average monthly gains of 285,000 since last fall.
The civilian unemployment rate remained at 7.3
percent in April, little changed from the rates
recorded over the previous three quarters.
Information on business capital spending suggested that expansion was continuing at a much
less rapid rate than earlier in the economic
expansion, though trends in business equipment
orders placed with domestic producers have
been obscured lately by extreme volatility in
monthly data for orders of office and computing
equipment. Imports apparently have continued
to account for a sizable share of outlays for
equipment, but shipments of capital goods by
domestic producers picked up in February and
March. Spending on nonresidential construction
has continued at a relatively brisk pace in recent
months. Moreover, according to recent surveys
of business spending plans, firms still expect to
increase nominal outlays for plant and equipment
by 8V2 to 11 percent in 1985.
The producer price index for finished goods
rose 0.3 percent in April, somewhat more than in
other recent months. The rise was attributable to
a surge in energy prices that apparently reflected
709
a temporary reduction in petroleum inventories;
prices of other finished goods changed little or
declined. A sharp increase in prices of petroleum
products was also the major factor in the 0.4
percent increase in the consumer price index in
April. Thus far in 1985 consumer prices had risen
at an annual rate of about 4lA percent, close to
the 4 percent rate in 1984. On balance, recent
wage developments indicated little if any acceleration in wage costs from the pace in 1984.
While the index of average hourly earnings increased at an annual rate of IVi percent in the
first four months of this year compared with a
rise of about 3 percent in 1984, the increase in
hourly compensation in the nonfarm business
sector thus far this year was running above its
year-earlier pace. The rise in compensation reflected in part legislated changes in social security taxes and higher employers' contributions for
unemployment insurance.
Since the Committee's meeting in late March,
the trade-weighted value of the dollar against
major foreign currencies had continued to fluctuate widely in volatile market conditions and had
declined a little more than 4 percent on balance.
The U.S. merchandise trade deficit and the current account deficit widened in the first quarter
as a rebound in non-oil imports from the low
fourth-quarter level extended the pattern of
sharp quarter-to-quarter swings experienced
since the beginning of 1984.
At its meeting on March 26, 1985, the Committee had adopted a directive that called for maintaining the existing degree of pressure on reserve
positions. That action was expected to be consistent with growth in M l , M2, and M3 at annual
rates of around 6, 7, and 8 percent respectively
during the period from March to June. The
members agreed that somewhat lesser restraint
might be acceptable in the event of substantially
slower growth in the monetary aggregates while
somewhat greater restraint might be acceptable
in the event of substantially higher growth. In
either case, adjustments in the degree of reserve
pressures would be considered in the context of
appraisals of the strength of the business expansion, progress against inflation, and conditions in
domestic credit and foreign exchange markets.
The intermeeting range for the federal funds rate
was retained at 6 to 10 percent.
Growth in M l , which had slowed markedly in
March from the rapid pace of earlier months,
remained moderate in April at an annual rate of
about 6 percent. M2 and M3, after slowing
appreciably in March to annual rates of growth of
about 33A and 5'/2 percent respectively, were
little changed in April. Thus, while expansion in
Ml was about in line with the Committee's
expectations for the March-to-June period,
growth in the broader aggregates was running
well below the rates anticipated. Weakness in
these aggregates stemmed in large part from a
substantial reversal of earlier increases in banks'
managed liabilities, as banks obtained funds from
a sharp rise in U.S. government deposits after
mid-April. Expansion in total domestic nonfinancial debt continued relatively rapid at an annual
rate of about 113A percent in April, the same as in
March. For the period from the fourth quarter of
1984 through April, growth in Ml was running
above the Committee's range for the year 1985
while M2 and M3 were growing at rates within
their long-term ranges; expansion in domestic
nonfinancial debt was somewhat above the upper
limit of its monitoring range for the year.
The level of adjustment plus seasonal borrowing averaged about $475 million over the three
complete reserve maintenance periods between
meetings, enlarged by borrowing by some nonfederally insured thrift institutions to meet deposit withdrawals. Over the last week or so, total
adjustment plus seasonal borrowing was running
over $800 million, boosted in part by a further
increase in borrowing by thrifts and overnight
borrowing by a few large banks faced with unexpected needs for funds.
The federal funds rate had declined from the
8V2 percent rate prevailing at the time of the
March meeting and had averaged just over 8Vs
percent in recent weeks. Other market rates had
fallen by about 3A to 1 lA percentage points over
the period since the previous Committee meeting
until the announcement by the Federal Reserve
on May 17 of a reduction in the discount rate
from 8 to 7V2 percent. On the day before this
meeting, when the new discount rate went into
effect, the federal funds rate moved lower, with
trading averaging around 13A percent, and most
other interest rates fell about 15 to 35 basis points
further. The average rate on new commitments
710
Federal Reserve Bulletin • September 1985
for fixed-rate conventional home mortgage loans
declined about 30 basis points over the intermeeting period.
The staff projections presented at this meeting
suggested that growth in real GNP, after a modest pickup in the current quarter from the reduced pace in the first quarter, would be slightly
faster in the second half of the year. The unemployment rate was projected to edge down, and
the rate of increase in prices was expected to
remain close to that experienced in 1984 and
early 1985.
During their review of the economic situation
and outlook, Committee members focused with
concern on evidence that the economy, despite
elements of strength, was expanding at a relatively sluggish pace; and they also stressed the
uncertainties that surrounded the prospects for
some pickup in the rate of economic growth. The
currently mixed pattern of developments greatly
complicated the forecasting process, especially
against the background of the distortions and
pressures associated with massive deficits in the
federal budget and the balance of trade, together
with persisting strains in financial markets.
While acknowledging the considerable risks of
unexpected developments in these circumstances, several members commented that improvement in the rate of economic growth remained the most reasonable expectation for the
second half of the year. Others gave more weight
to the downside risks in the economy and were
concerned that the expansion might well remain
relatively weak and considerably below the
economy's potential.
A number of members expressed particular
concern about the depressing impact that the
competition of foreign goods was having on
domestic production, and some commented that
the outlook for the dollar in the exchange markets constituted the major uncertainty in assessing economic prospects. While domestic final
demands were being reasonably well maintained,
a strong dollar was diverting these demands
toward imports, which were growing rapidly,
and holding back domestic output. The strength
of the dollar was also tending to curb the expansion of exports. Members cited examples of a
wide range of manufacturing firms, including
small firms, that along with some agricultural and
extractive businesses were being severely affected by foreign competition. The exchange value
of the dollar also appeared to be curbing expansion in domestic plant and equipment spending
and fostering decisions to establish or expand
productive facilities abroad rather than in the
United States.
Members who were relatively optimistic about
the economic outlook stressed the favorable impact that recent declines in interest rates were
likely to have on interest-sensitive sectors of the
economy. Housing had already responded to
earlier reductions in interest rates. Consumer
spending was holding up well, with automobile
sales continuing to display notable strength, and
consumer sentiment remained favorable. Some
members commented that the negative impact of
growing imports might diminish over the quarters ahead, especially if the dollar fell further
from its recent highs. Reference was also made
to continuing indications that businesses were
planning further, if more moderate, increases in
their investment spending. One member expressed the view that rapid growth in Ml during
late 1984 and early 1985 would exert an expansive influence on the economy over the months
ahead.
Members who felt less comfortable with economic developments referred to the vulnerability
of the manufacturing sector and also agriculture
to the high value of the dollar on exchange
markets. Moreover, business and consumer confidence could be adversely affected by ongoing
problems in financial sectors of the economy.
Other potential areas of vulnerability in the economy included nonresidential construction and
multifamily housing; as they had at previous
meetings, members cited instances of apparent
overbuilding of office structures and of multifamily dwellings in various parts of the country. In
addition, problems in agriculture and related
industries might worsen, with retarding consequences for overall economic activity.
With regard to the outlook for inflation, members commented on the highly competitive pricing situation in many industries, and reference
was also made to favorable developments in
recent labor negotiations. In general, price pressures appeared to be relatively well contained in
goods-producing sectors of the economy. Most
Record of Policy Actions of the FOMC
commodity prices had fallen further to their
lowest levels in about 2 years. At the same time,
significant increases in prices and costs were
continuing to occur in the service industries.
Given the relatively low rates of capacity utilization and the outlook for only limited growth in
economic activity, members indicated that the
risks of an acceleration in the rate of inflation
appeared to be low. Some members noted their
concern, however, that current inflation rates
were too high—with recent tendencies in consumer prices worrisome—especially in light of
the inflationary implications of a possible decline
over time in the foreign exchange value of the
dollar.
At its meeting in February the Committee had
agreed on policy objectives that called for monetary growth ranges for the period from the fourth
quarter of 1984 to the fourth quarter of 1985 of 4
to 7 percent for M l , 6 to 9 percent for M2, and 6
to 9V2 percent for M3. The associated range for
total domestic nonfinancial debt was set at 9 to
12 percent for 1985. In keeping with the usual
procedures under the Humphrey-Hawkins Act,
these ranges would be reviewed at the July
meeting and provisional ranges would be established for 1986.
In discussing policy implementation for the
weeks ahead, Committee members, taking account of the recent reduction in the discount
rate, generally favored maintaining about the
same degree of pressure on bank reserve positions as in recent weeks, abstracting from special
situation borrowing by thrift institutions. It was
recognized that the recent decline in market rates
and the lower discount rate would tend to increase the demands for money and credit under
those circumstances as compared with what they
otherwise would be. Most members found this
acceptable particularly in view of the recent
weakness in the broader monetary aggregates
and sluggishness in the overall economy.
In the course of discussion it was noted that
Ml had been growing about as expected at the
previous meeting, but that some pickup in
growth could develop in the period ahead. A
number of members indicated that they were
prepared to accept a little more rapid expansion
against the background of relatively weak economic performance, strains in financial markets,
711
and the recent behavior of the broader aggregates. It was also pointed out that much of the
increase in Ml thus far this year reflected expansion in interest-bearing checking accounts.
Banks and thrifts had reduced interest rates on
these accounts only slowly in response to declines in market yields that had begun in the
latter part of last year, thereby making it relatively more attractive for the public to hold savings
in such instruments. Nonetheless, Ml was running above the path associated with its long-run
target and some members stressed the desirability of holding down near-term Ml growth, partly
because a rate of growth that appeared unduly
high could risk having an adverse impact on
inflationary sentiment. However, one member
also questioned whether the behavior of Ml
should be interpreted as in the past given the
present institutional environment and taking account of such other factors as the very high level
of the dollar in foreign exchange markets.
Given the strength of Ml relative to its longrun target for the year, members indicated that
they were prepared to accept slower growth in
M2 and M3 for the quarter than they had expected earlier. One member observed, however, that
continued weakness in the broader aggregates
would be a matter of some concern and that
somewhat faster growth than was now expected
for the quarter should not be resisted. A differing
view emphasized that the broader aggregates had
less information content than Ml and that some
aberration in their behavior should be tolerated.
Another member highlighted the desirability of a
decline in long-term interest rates over time, but
felt that further monetary ease at this point might
work against that objective by fostering inflationary expectations.
In keeping with the Committee's usual practice, the members contemplated that operations
might be adjusted during the intermeeting period
toward implementing somewhat lesser or somewhat greater restraint on reserve positions if
monetary growth should appear to be substantially slower or faster than was currently expected for the quarter. While no member wanted to
rule out possible adjustments in either direction,
a majority believed that policy implementation
should be alert to the potential need for some
easing of reserve conditions. Other members,
712
Federal Reserve Bulletin • September 1985
however, put more stress on the desirability of
moving promptly, if necessary, to curb unduly
rapid monetary expansion. It was understood
that any adjustment should not be made automatically in response to the behavior of the monetary aggregates, but should be undertaken only
after an appraisal of the strength of economic
activity and inflationary pressures and evaluations of conditions in domestic and international
financial markets.
In light of recent declines in market interest
rates and the reduction in the discount rate, it
appeared likely that the degree of reserve restraint contemplated by most of the Committee
members would be associated with a lower federal funds rate, on average, than had prevailed
until just before today's meeting. Nonetheless,
the members anticipated that the rate would
remain well within the 6 to 10 percent federal
funds range established earlier by the Committee, and no sentiment in favor of changing that
range was expressed.
At the conclusion of the Committee's discussion, a majority of the members indicated their
acceptance of a directive that, against the background of the recent reduction in the discount
rate, called for maintaining the current degree of
reserve restraint, abstracting from special situation borrowing by thrift institutions. The members expected such an approach to policy implementation to be consistent with growth of Ml at
an annual rate of about 6 percent or a little higher
for the period from March to June. Given the
weakness in M2 and M3 in April, growth in these
broader aggregates over the three-month period
was now expected to be slower than had been
anticipated at the time of the previous meeting.
The members agreed that somewhat lesser restraint on reserve conditions would be acceptable in the context of substantially slower growth
in the monetary aggregates, while somewhat
greater restraint might be appropriate if monetary growth were substantially faster. It was
understood that the need for lesser or greater
restraint would be considered against the background of developments relating to the strength
of the business expansion, inflationary pressures, and conditions in domestic credit and
foreign exchange markets. The members agreed
that the intermeeting range for the federal funds
rate, which provides a mechanism for initiating
consultation of the Committee when its boundaries are persistently exceeded, should be left
unchanged at 6 to 10 percent.
At the conclusion of the meeting, the following
domestic policy directive was issued to the Federal Reserve Bank of New York:
The information reviewed at this meeting suggests
only a modest pickup in real GNP in the current
quarter from the reduced rate of growth in the first
quarter. Total retail sales rose in April to a level
somewhat above the average for the first quarter, and
housing starts increased further after rising substantially in the first quarter. Information on business
capital spending suggests further growth, though at a
much less rapid pace than earlier in the economic
expansion. Industrial production declined slightly in
April after rising little over the first quarter. Total
nonfarm payroll employment increased at a somewhat
reduced pace in April with employment in manufacturing registering another decline. The civilian unemployment rate remained at 7.3 percent in April. Broad
measures of prices and wages appear to be rising at
rates close to those recorded in 1984.
Since the Committee's meeting in late March, the
trade-weighted value of the dollar against major foreign currencies has continued to fluctuate widely in
often volatile market conditions and has declined
moderately on balance. The trade and current account
deficits widened in the first quarter as a rebound in
non-oil imports from their low fourth-quarter level
extended the pattern of sharp quarter-to-quarter
swings experienced since the beginning of 1984.
Growth in Ml slowed markedly in March from the
rapid pace of earlier months and remained moderate in
April. The broader aggregates showed little change in
April after their growth had slowed appreciably in
March. Expansion in total domestic nonfinancial debt
has remained relatively rapid. Interest rates have
declined considerably since the March meeting of the
Committee. On May 17, the Federal Reserve Board
approved a reduction in the discount rate from 8 to LLA
percent.
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 an improved pattern of international transactions. In furtherance of
these objectives the Committee agreed at its meeting
in February to establish ranges for monetary growth of
4 to 7 percent for Ml, 6 to 9 percent for M2, and 6 to
9Vi percent for M3 for the period from the fourth
quarter of 1984 to the fourth quarter of 1985. The
associated range for total domestic nonfinancial debt
was set at 9 to 12 percent for the year 1985. The
Committee agreed that growth in the monetary aggregates in the upper part of their ranges for 1985 may be
Record
appropriate, depending on developments with respect
to velocity and provided that inflationary pressures
remain subdued.
The Committee understood that policy implementation would require continuing appraisal of the relationships not only among the various measures of money
and credit but also between those aggregates and
nominal GNP, including evaluation of conditions in
domestic credit and foreign exchange markets.
In the implementation of policy for the immediate
future, and against the background of the recent
reduction in the discount rate, the Committee seeks to
maintain about the same degree of pressure on bank
reserve positions. This action is expected to be consistent with growth in Ml at an annual rate of around 6
percent or a little higher during the period from March
to June, while M2 and M3, in the light of their
weakness in April, are expected to grow more slowly
over the quarter than the 7 and 8 percent annual rates,
respectively, anticipated earlier. Somewhat lesser reserve restraint would be acceptable in the event of
substantially slower growth of the monetary aggregates while somewhat greater restraint might be acceptable in the event of substantially higher growth. In
either case such a change would be considered in the
context of appraisals of the strength of the business
of Policy Actions
of the FOMC
713
expansion, progress against inflation, and conditions
in domestic credit and foreign exchange markets. 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.
Votes for this action: Messrs. Volcker, Corrigan,
Balles, Forrestal, Gramley, Keehn, Martin, Partee,
Rice, Ms. Seger, and Mr. Wallich. Vote against this
action: Mr. Black.
Mr. Black dissented b e c a u s e h e preferred to
direct policy implementation in the w e e k s immediately ahead t o w a r d achieving s o m e w h a t slower
expansion in M l . In his view, bringing M l
growth m o r e promptly within the C o m m i t t e e ' s
range for the year would help guard against a
possible worsening of inflationary expectations
and would limit the risk of a potentially unsettling m o v e m e n t in interest rates later in the year.
715
Legal Developments
ORDERS ISSUED UNDER BANK HOLDING
COMPANY ACT, BANK MERGER ACT, BANK
SERVICE CORPORATION ACT, AND FEDERAL
RESERVE ACT
Orders Issued Under Section 3 of Bank Holding
Company Act
Commerce Union Corporation
Nashville, Tennessee
Order Approving Merger of Bank Holding
Companies
Commerce Union Corporation, Nashville, Tennessee,
a bank holding company within the meaning of the
Bank Holding Company Act of 1956, as amended
(12 U.S.C. § 1841, et seq.) ("Act"), has applied for
the Board's approval under section 3(a)(5) of the Act
(12 U.S.C. § 1842(a)(5)) to merge with Tennessee
Eastern Bancshares, Inc., Oak Ridge, Tennessee
("Company"), and thereby indirectly to acquire Energy Bank, Oak Ridge, Tennessee.
Notice of this application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3 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, the third largest commercial banking
organization in Tennessee, holds deposits of $2.0
billion, representing 7.6 percent of the total deposits in
commercial banks in the state.1 Company, the tenth
largest commercial banking organization in Tennessee, controls $180.9 million in deposits, representing
0.7 percent of the total deposits in commercial banks
in the state. Upon consummation of the transaction
Applicant would remain the third largest commercial
banking organization in Tennessee. Thus, the proposed transaction would have no significant effect on
the concentration of banking resources in Tennessee.
1. Banking data are as of June 30, 1984 and market data are as of
June 30, 1983.
Company and Applicant do not operate subsidiary
banks in the same markets. Therefore, consummation
of the proposal would not eliminate existing competition in any relevant geographic market.
The Board has considered the effects of this proposal on probable future competition and has examined
the proposal in light of its proposed guidelines for
assessing the competitive effects of market extension
mergers and acquisitions 2 in the six markets in which
Company competes. 3 In view of the fact that none of
these markets is highly concentrated under the
Board's guidelines, the Board has concluded that
consummation of this proposal would not have any
significant adverse effects on probable future competition in any relevant market.
The financial and managerial resources of Applicant
and Company are consistent with approval of the
proposal. Considerations relating to the convenience
and needs of the community to be served are also
consistent with approval of the proposal.
Based on the foregoing and other facts of record, the
Board has determined that the application under section 3(a)(5) should be, and hereby is, approved for the
reasons set forth above. The transaction shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
the Federal Reserve Bank of Atlanta, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
July 30, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, and Seger. Absent and not
voting: Governor Gramley.
JAMES M C A F E E
[SEAL]
Associate
Secretary of the Board
2. "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 Act," 47 Federal
Register 9017 (1982). While the proposed policy statement has not
been approved by the Board, the Board is using the policy guidelines
as part of its analysis of the effect of a proposal on probable future
competition.
3. These banking markets are the Athens, Kingsport/Bristol, Knoxville, Roane, Scott, and Monroe markets.
716
Federal Reserve Bulletin • September 1985
First Central Bancorp, Inc.
Phoenix, Arizona
Order Approving Formation of a Bank Holding
Company
First Central Bancorp, Inc., Phoenix, Arizona, has
applied for the Board's approval under section 3(a)(1)
of the Bank Holding Company Act ("Act")
(12 U.S.C. § 1842(a)(1)) to become a bank holding
company by acquiring 100 percent of the voting shares
of First Central Bank, Phoenix, Arizona ("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments, has been
given in accordance with section 3(b) of the Act. The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 3(c) of
the Act (12 U.S.C. § 1842(c)).
Applicant is a nonoperating corporation organized
for the purpose of becoming a bank holding company
by acquiring Bank, which holds deposits of $22.5
million.1 Upon acquisition of Bank, Applicant would
be the 19th largest of 43 commercial banking organizations in Arizona and would control approximately 0.1
percent of the total deposits in commercial banks in
the state. The proposed acquisition would not have a
significant effect on the concentration of banking resources in Arizona.
Bank, which operates in the Phoenix market,2 was
formed de novo by principals of Applicant in 1983, and
this application represents a reorganization into a
holding company structure. Applicant's principals are
not affiliated with any other banking organizations in
the relevant market, and consummation of the proposed transaction would not result in any adverse
effects on competition or increase the concentration of
banking resources in any relevant area.
In evaluating the financial factors in this case, the
Board notes that Bank has placed significant reliance
on large, high-cost certificates of deposit which have
had a somewhat adverse effect on Bank's earnings and
liquidity. Based on Bank's efforts and plans to reduce
reliance on such certificates of deposit and based on
evaluation of other financial factors, the Board concludes that the financial and managerial resources and
future prospects of Applicant are consistent with approval. Considerations relating to convenience and
needs of the community to be served also are consistent with approval. Accordingly, it is the Board's
1. Statewide banking data are as of September 30, 1984.
2. The Phoenix market is approximated by the Phoenix Metropolitan Area.
judgment that the proposed acquisition is in the public
interest and that the application should be approved.
On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be consummated before the thirtieth
calendar day following the effective date of this Order
or later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 8, 1985.
Voting for this action: Vice Chairman Martin and Governors Partee, Rice, Gramley, and Seger. Absent and not
voting: Chairman Volcker and Governor Wallich.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
First City Bancorporation of Texas, Inc.
Houston, Texas
Order Approving Acquisition of a Bank
First City Bancorporation of Texas, Inc., Houston,
Texas, a bank holding company within the meaning of
the Bank Holding Company Act ("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 all of the voting
shares of First City Bank-Sioux Falls, N.A., Sioux
Falls, South Dakota ("Bank"), a proposed new bank.
Notice of the application, affording interested persons an opportunity 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, including the comments of the Independent
Community Bankers Association of South Dakota,
Inc., in light of the factors set forth in section 3(c) of
the Act (12 U.S.C. § 1842(c)).
Applicant, with consolidated assets of $17.3 billion,1
is the 24th largest commercial banking organization in
the nation. It operates 63 banking subsidiaries in Texas
and is the fourth largest commercial banking organization in the state, with total domestic deposits of
approximately $12 billion. Applicant also engages
through subsidiaries in a variety of nonbanking activities.
Bank is a newly established national bank formed to
engage primarily in offering bank credit card services
1. Banking data are as of December 31, 1984.
Legal Developments
to customers in Texas, Louisiana, Arkansas, Oklahoma, Colorado, and New Mexico. Upon consummation
of the proposed transaction, Applicant would transfer
its existing credit card operations, now conducted
through First City National Bank of Houston
("FCNB"), to Bank.2
Section 3(d) of the Bank Holding Company Act
(12 U.S.C. § 1842(d)) (the Douglas Amendment) prohibits the Board from approving any application by a
bank holding company to acquire any bank located
outside the state in which the operations of the bank
holding company's banking subsidiaries are principally conducted unless the acquisition is "specifically
authorized by the statute laws of the State in which
such bank is located, by language to that effect and not
merely by implication." South Dakota law permits an
out-of-state bank holding company to acquire a single
de novo national bank and a single de novo state bank
subject to the conditions that each such bank have
only a single office and that it be operated in a manner
and at a location that is "not likely to attract customers from the general public in the state to the substantial detriment of existing banks in the state." 3
In addition, interstate acquisitions under the South
Dakota statute are subject to approval by the South
Dakota Banking Commission.4 In acting on an application under the statute, the Banking Commission may
consider the economic advantages to the state of the
proposed acquisition, whether the acquisition may
result in undue concentration of resources or substantial lessening of competition in South Dakota, whether
the convenience and benefits to the public outweigh
any adverse competitive effects, and whether the
proposed de novo bank is likely by its location to
attract business from the general public to the substantial detriment of existing banks. On July 25, 1984, the
South Dakota Banking Commission approved Applicant's formation and acquisition of Bank, concluding
that Applicant's proposal met the requirements for
approval under the South Dakota statute. Based on the
foregoing, the Board has determined, as required by
section 3(d) of the Act, that the proposed acquisition
conforms to South Dakota law and is specifically
authorized by the statute laws of South Dakota.
Bank will engage primarily in offering consumer
credit card services in the regional market of Texas,
Louisiana, Arkansas, Oklahoma, Colorado, and New
Mexico. Since the establishment of Bank represents
an internal reorganization of Applicant's credit card
operations, the proposal will not alter the structure of
the market for bank credit card services.
2. Applicant has stated that it would transfer approximately $500
million of credit card receivables from FCNB to Bank.
3. S.D. Codified Laws Ann. § 51-16-40, 51-16-41 (Supp. 1984).
4. S.D. Codified Laws § 51-16-42.
717
Bank will also compete in the Sioux Falls, South
Dakota, banking market,5 where it will provide retail
and commercial deposit-taking, lending, and checking
services to the local community to the extent allowed
by South Dakota law. Because of the limitations
imposed on Bank's operations by South Dakota law,
Bank will not generally compete directly with commercial banks in South Dakota; however, Bank will
engage de novo in offering certain banking services,
including the provision of overline banking services to
other banks in South Dakota. To the extent that Bank
will offer banking services de novo, the effect of this
proposal will be procompetitive. Accordingly, the
Board concludes that the competitive effects of this
proposal are consistent with approval.
In evaluating this application, the Board has considered the financial and managerial resources of Applicant and the proposal's effect on these resources. The
proposed acquisition represents a relocation of existing activities that would provide Applicant with increased income opportunities and have minimal effect
on Applicant's primary and total capital ratios, which
would remain above the minimum levels specified for
bank holding companies under the Board's guidelines.
In this context, the Board concludes that approval of
the application is consistent with financial and managerial considerations. Factors relating to the convenience and needs of the community to be served also
are consistent with approval.
The Board has received comments in opposition to
this proposal, as well as a request for a hearing, from
the Independent Community Bankers Association of
South Dakota, Inc. ("Protestant"). The Protestant
first argues that the Douglas Amendment to the Bank
Holding Company Act does not authorize the states to
permit out-of-state bank holding companies to acquire
national banks. The Protestant bases this argument on
the state authorization clause of the Douglas Amendment, which reads: "unless the acquisition of . . . a
State bank by an out-of-State bank holding company is
specifically authorized by the statute laws of the State
in which such bank is located . . . ." 12 U.S.C.
§ 1842(d). On the basis of this clause and the absence
of any express mention of national banks in the
Douglas Amendment, the Protestant asserts that Senator Douglas "deliberately chose" to limit section 3(d)
to acquisition of state banks.
Contrary to the Protestant's assertions, however,
the Douglas Amendment applies to the interstate acquisition of any bank, national or state-chartered: its
5. The Sioux Falls market includes Moody, McCook, Minnehaha,
Turner, and Lincoln Counties and parts of Clay and Union Counties in
South Dakota, as well as Clay County in Minnesota.
718
Federal Reserve Bulletin • September 1985
initial clause prohibits Federal Reserve Board approval of a bank holding company's acquisition of "voting
shares of . . . any additional bank" (emphasis added)
in another state, while the following clause permits
that state to authorize such an acquisition.6
In a conscious attempt to parallel the McFadden Act
(12 U.S.C. § 36(c)), on which it was based,7 the Douglas Amendment permits the states to lift the Amendment's flat prohibition on the acquisition of state
banks by out-of-state bank holding companies and ties
the degree to which bank holding companies can make
interstate acquisitions of national banks to state authorizations for interstate acquisitions of state banks.
Clearly the intent of the Douglas Amendment, consistent with the policy of the McFadden Act, was to
maintain competitive equality by allowing the acquisition of any similarly situated bank—whether national
or state-chartered—on an equal basis. Thus, it appears
to have been Senator Douglas' intent that, when the
flat prohibition on interstate bank acquisitions is lifted
by a state with respect to state banks, the Douglas
Amendment itself lifts the prohibition, to the same
degree, with respect to national banks. The Board
concludes that the Douglas Amendment was not intended to allow only state-chartered banks to be
acquired by out-of-state bank holding companies.
The Protestant also argues that the Board should
deny this application in light of the "unauthorized
restriction" placed by the South Dakota statute on the
operations of national banks acquired under the statute. Specifically, the Protestant alleges that the statutory restrictions, such as those which limit Bank to a
single office and require operation of that office in a
manner and at a location so as to avoid attracting local
customers, impose burdens on national banks that
conflict with national banking laws. The Protestant
argues, therefore, that the Board should not approve
an application under such a restrictive state statute.
6. Senator Douglas' statements on the Senate floor indicate that he
did not intend the Amendment's authorization to the states to be
limited to state banks. For example, in describing the effect of his
Amendment, Senator Douglas stated that it:
"would prohibit bank holding companies from purchasing banks in other States
unless such purchases by out-of-State bank holding companies were specifically
permitted by law in such States."
102 Cong. Rec. 6860 (1956).
7. See Northeast Bancorp, Inc. v. Board of Governors of the
Federal Reserve System, 53 U.S.L.W. 4699, 4702 (1985). In debate on
his amendment, Senator Douglas stated:
[W]hat our amendment aims to do is to carry over into the field of holding
companies the same provisions which already apply for branch banking under the
McFadden Act—namely, our amendment will permit out-of-State holding companies to acquire banks in other States only to the degree that State laws expressly
permit them.
102 Cong. Rec. 6858 (1956).
The Board finds no merit in the Protestant's position
because, as stated above, it is Congress through the
Douglas Amendment that imposes the conditions or
restrictions on the operation of a national bank by an
out-of-state bank holding company, or, at a minimum,
it is Congress that authorizes the states to impose such
restrictions. Where, as here, such restrictions are
within the scope of those authorized by Congress,8
they cannot be said to impose unauthorized burdens
that conflict with the national banking laws.
Moreover, the restrictions are not so burdensome as
to conflict with federal banking laws. The Comptroller
of the Currency, the primary supervisor of national
banks and the agency charged with interpretation and
enforcement of the National Bank Act, reviewed the
restrictions imposed by South Dakota in the course of
issuing a preliminary national bank charter for a bank
in South Dakota to Citicorp, New York, New York. In
an opinion issued November 11, 1980, the Comptroller
held that the South Dakota statute did not "so restrict
the operations of the proposed bank as to be incompatible with the framework of federal law." Based upon
the facts in the record and for the reasons stated, the
Board finds the Protestant does not present adequate
reasons to deny this application.
In addition, the Protestant has requested a hearing
with respect to the legal and public policy issues raised
by this proposal. The Board, however, has determined
that there are no material factual issues in dispute that
would warrant a hearing on this application. Accordingly, the Protestant's hearing request is denied.
While it has decided to approve this application, the
Board wishes to reiterate the concerns it has expressed in previous orders9 about the proliferation of
statutes that, like South Dakota's, permit the entry of
out-of-state bank holding companies in order to shift
jobs and revenue from other states, while limiting the
in-state activities of banks owned by out-of-state holding companies so as to avoid competition with in-state
banking organizations. These statutes do not appear to
be based on appropriate public policy considerations
for assuring a stable and sound banking system locally
and nationwide, and the end result of their adoption by
other states can only be a serious impairment of
banking standards and no net gains in jobs or revenues
because of the proliferation.
Based on the foregoing and other facts of record, the
application is approved for the reasons summarized
above. 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
8. See Northeast
Bancorp,
53 U . S . L . W . at 4 7 0 2 - 4 7 0 3 (1985).
9. See Citicorp,
71 FEDERAL RESERVE BULLETIN 101 ( 1 9 8 5 ) ;
MCorp, 71 FEDERAL RESERVE BULLETIN 6 4 2 .
Legal Developments
effective date of this Order, and Bank shall be opened
for business not later than six months after the effective date of this Order. The latter two periods may be
extended for good cause by the Board or by the
Federal Reserve Bank of Dallas, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
July 12, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, Gramley, and Seger.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Haltom City Bancshares, Inc.
Dallas, Texas
Order Approving Acquisition of Bank
Haltom City Bancshares, Inc., Dallas, Texas, a bank
holding company within the meaning of the Bank
Holding Company Act (the "Act") (12 U.S.C. § 1841
et seq.), has applied for the Board's approval under
section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to
acquire all of the voting shares of American Bank of
Commerce, Grapevine, Texas.
Notice of the application, affording interested persons an opportunity 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.
Applicant, a Texas corporation, owns one commercial banking subsidiary, Haltom City State Bank, Fort
Worth, Texas, controlling deposits of $117.7 million.1
Applicant is the 82nd largest commercial banking
organization in the state, controlling 0.09 percent of
the total deposits in commercial banking organizations
in the state. Applicant seeks to acquire Bank, which
holds deposits of $27.8 million and is the 591st largest
commercial banking organization in the state, controlling 0.2 percent of total deposits in commercial banking organizations in the state. Upon consummation of
this proposal, Applicant would become the 61st largest
commercial banking organization in the state, controlling deposits of $145.5 million, representing 0.1 percent of total deposits in commercial banking organizations in the state. Consummation of this transaction
719
would not have any significant adverse effects upon
the concentration of banking resources in the state.
Bank operates in the Dallas banking market,2 where
it is the 79th largest of 122 banking organizations,
controlling 0.1 percent of the total deposits in commercial banks in the market. Neither Applicant nor any of
its principals is associated with any other banking
organization in the relevant market. Accordingly, the
Board concludes that consummation of this proposal
would have no significant adverse effect upon existing
competition in any relevant market.
In evaluating this application, the Board has considered the financial and managerial resources of Applicant and the effect on these resources of this proposal.
The Board has stated and continues to believe that
capital adequacy is an especially important factor in
the analysis of bank holding company proposals, and
that it will consider the implications of a significant
level of intangible assets in evaluating an application.
Under the Board's Capital Adequacy Guidelines,3
the Board has stated that, in reviewing acquisition
proposals, the Board will take into consideration both
the stated primary capital ratio and the primary capital
ratio after deducting intangibles. In acting on applications under the revised guidelines, the Board also will
take into account the nature and amount of intangible
assets and will, as appropriate, adjust capital ratios to
include intangible assets on a case-by-case basis.
In its assessment of Applicant's capital adequacy,
the Board has considered the fact that at the time of
consummation of this proposal, Applicant would meet
the minimum capital required under the Board's guidelines without undue reliance on goodwill. Applicant
has recently improved its tangible capital ratio. In
addition, Applicant has submitted a capital plan which
would cause its tangible capital ratio to reach 5.5
percent within twelve months following consummation of the proposal. Based upon these facts, the Board
concludes that the financial and managerial resources
and future prospects of Applicant, its subsidiary bank,
and Bank are consistent with approval, particularly in
light of commitments made by Applicant in connection
with this application. Considerations relating to the
convenience and needs of the communities to be
served also are consistent with approval.
2. The Dallas banking market consists of Dallas County, the
southeast quadrant of Denton County, including Denton and Lewisville, the southwest quadrant of Collin County, including McKinney
and Piano, the northern half of Rockwell County, the communities of
Forrey and Terrell in Kaufman County, the communities of Midlothian, Waxahachie and Ferris in Ellis County, and Grapevine and
Arlington in Tarrant County, Texas.
3. Capital Adequacy Guidelines, 71 FEDERAL RESERVE BULLETIN
1. All banking data are as of June 30, 1984.
445 (1985).
720
Federal Reserve Bulletin • September 1985
Based on the foregoing and other facts of record, the
Board has determined that the application should be
and hereby is approved. The transaction shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of Dallas pursuant to
delegated authority.
By order of the Board of Governors, effective
July 31, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, and Rice. Absent and not voting:
Governors Gramley and Seger.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Malta Banquo, Inc.
Malta, Montana
Order Denying Formation of a Bank Holding
Company
Malta Banquo, Inc., Malta, Montana, has applied for
the Board's approval pursuant to section 3(a)(1) of the
Bank Holding Company Act (12 U.S.C. § 1842(a)(1))
("Act") to become a bank holding company by acquiring at least 60 percent of the voting shares of First
Security Bank of Malta, Malta, Montana ("Bank").
Notice of the application, affording interested persons an opportunity 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.
Applicant, a nonoperating corporation with no subsidiaries, was organized under the laws of Montana for
the purpose of becoming a bank holding company by
acquiring Bank, which holds deposits of $13.9 million.1 Upon acquisition of Bank, Applicant would
control the 76th largest of 106 banking organizations in
Montana, representing approximately 0.2 percent of
the total deposits in commercial banks in the state.
Bank operates in the Phillips County banking market 2 and is the smaller of two commercial banking
organizations, controlling approximately 25.6 percent
of the total deposits in commercial banks in the
market. Neither Applicant nor any of its principals is
associated with any other banking organization in the
relevant market, and consummation of the proposal
would not result in any adverse effects upon competition or increase the concentration of banking resources in any relevant area. Accordingly, the Board
concludes that competitive considerations under the
Act are consistent with approval.
The Board has indicated on previous occasions that
a holding company should serve as a source of financial and managerial strength to its subsidiary bank and
that the Board would closely examine the condition of
an applicant in each case with this consideration in
mind.3
In connection with this proposal, Applicant would
incur a sizeable amount of debt. Using projections
based upon Bank's performance in recent years and
other facts of record, the Board concludes that Applicant may not have sufficient financial flexibility to be
able to reduce its indebtedness in a satisfactory manner while maintaining adequate capital levels at Bank.4
Accordingly, based on these and other facts of record,
including Bank's level of loan classifications, the
Board concludes that considerations relating to Applicant's financial and managerial resources and future
prospects are adverse and weigh against approval of
this application.
Applicant has proposed no new services for Bank
upon consummation of this proposal. Considerations
relating to the convenience and needs of the community to be served are consistent with, but lend no weight
toward, approval of this application.
On the basis of all of the facts of record, the Board
concludes that the banking considerations involved in
this proposal are adverse and are not outweighed by
any relevant competitive or convenience and needs
considerations. Accordingly, it is the Board's judgment that approval of the application would not be in
the public interest and that the application should be,
and hereby is, denied for the reasons summarized
above.
3. See Northwest Wisconsin Banco, Inc., 71 FEDERAL RESERVE
BULLETIN 105 (1985); Singer & Associates, Inc., 70 FEDERAL RESERVE BULLETIN 883 (1984); Central Minnesota Bancshares, Inc., 70
F E D E R A L RESERVE B U L L E T I N 8 7 7 ( 1 9 8 4 ) .
1. All banking data are as of September 30, 1984.
2. The Phillips County banking market consists of Phillips County,
Montana.
4. The Board has previously stated that in small one-bank holding
company formations, it expects, among other things, that the bank
holding co-npany's debt-to-equity ratio will be reduced to no more
than 30 percent within 12 years. Policy Statement for Formation of
Small One-Bank Holding Companies, 12 C.F.R. Part 225, Appendix B.
Legal Developments
By order of the Board of Governors, effective
July 17, 1985.
Voting for this action: Vice Chairman Martin and Governors Wallich, Partee, Rice, Gramley, and Seger. Absent and
not voting: Chairman Volcker.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Manufacturers National Corporation
Detroit, Michigan
Order Approving Acquisition of a Consumer Credit
Bank
Manufacturers National Corporation, Detroit, Michigan, a bank holding company within the meaning of
the Bank Holding Company Act ("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 all of the voting
shares of Manufacturers Bank-Delaware, Wilmington,
Delaware ("Bank"), a proposed consumer credit bank
chartered under Delaware law that will engage in
credit card operations and accept time deposits.1
Notice of the application, affording an opportunity
for interested persons to submit comments, has been
duly published. (50 Federal Register 13,286 (1985)).
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, the fourth largest commercial banking
organization in Michigan, operating nine subsidiary
banks with total deposits of $4.4 billion, has applied to
acquire Bank, which will be located in Delaware.2 This
application involves the transfer of the credit card
operations of Applicant's lead bank, Manufacturers
National Bank of Detroit, Detroit, Michigan, to Bank
in order to take advantage of Delaware's less restrictive policy regarding interest rates. Because Bank's
activities are limited by state law, the proposed transaction would have no significant effect on concentration in Delaware.
1. Although Bank's deposit-taking and commercial lending authority is circumscribed under the Delaware statute (Del. Code Ann. tit. 5
§1051 (Supp. 1984)), the Board has accepted this application under
section 3 of the Act and has considered the proposal under the
standards of section 3 of the Act applicable to bank acquisitions. See,
Florida Dep't of Banking and Finance v. Board of Governors of the
Federal Reserve System, 760 F.2d 1135 (11th Cir. 1985).
2. Banking data are as of June 30, 1984.
721
Under the Douglas Amendment to the Act, the
Board is prohibited from approving any application by
a bank holding company to acquire a bank located in
another state unless that state specifically authorizes
the acquisition. In this case, Delaware has expressly
authorized by statute the acquisition of consumer
credit banks, such as Bank, by any bank holding
company, including out-of-state bank holding companies. In this regard, the Board notes that on February 28, 1985, the State Banking Commissioner of
Delaware approved the formation of Bank by Applicant. Based on the foregoing, the Board has determined that its approval of the proposed acquisition is
not prohibited by the terms or policies of the Douglas
Amendment.
Although Bank is located in the Wilmington banking
market,3 under the limitations imposed by Delaware
law on Bank's operations, Bank is not likely to become a significant competitor in the Wilmington banking market.4 The financial and managerial resources of
Applicant and Bank are regarded as satisfactory and
consistent with approval. There is no evidence in the
record indicating that the banking needs of the communities to be served are not being met. Considerations relating to the convenience and needs of the
community to be served also are consistent with
approval.
Although approving this application, the Board has
previously expressed its concern about the proliferation of statutes of this type, which permit the entry of
out-of-state bank holding companies in order to shift
jobs and revenues from other states, while limiting the
in-state activities of out-of-state owned banks to avoid
competition with in-state banking organizations.5
These statutes do not appear to be based on appropriate public policy considerations for assuring a stable
and sound banking system locally and nationwide, and
the end result of their adoption by other states can
only be a serious impairment of banking standards and
no net gains in jobs or revenues because of the
proliferation.
Based on the foregoing and other facts of record, the
Board has determined that approval of the application
would be consistent with the public interest and that
the application should be and hereby is approved. The
3. The Wilmington banking market is approximated by Cecil County in Maryland, Salem County in New Jersey, Chester County in
Pennsylvania, and New Castle County in Delaware.
4. Del. Code Ann. tit. 5 § 1051 (Supp. 1984). In addition, Bank must
be "operated in a manner and at a location that is not likely to attract
customers from the general public in [Delaware] to the material
detriment of existing banking institutions . . . located in this state."
Del. Code Ann. tit. 5 § 1053 (Supp. 1984).
5 . See,
Citicorp,
7 1 F E D E R A L RESERVE B U L L E T I N 101 ( 1 9 8 5 ) .
722
Federal Reserve Bulletin • September 1985
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, and Bank shall be opened for
business not later than six months after the effective
date of this Order. The latter two periods may be
extended for good cause by the Board or by the
Federal Reserve Bank of Chicago, acting pursuant to
delegated authority.
By order of the Board of Governors, effective
July 1, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Rice, Gramley, and Seger. Absent and not
voting: Governor Wallich.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Montgomery Financial Corporation
Darlington, Indiana
Order Approving Formation of a Bank Holding
Company
Montgomery Financial Corporation, Darlington, Indiana, has applied for the Board's approval pursuant to
section 3(a)(1) of the Bank Holding Company Act
(12 U.S.C. § 1842(a)(1)) ("Act") to become a bank
holding company by acquiring 80.8 percent of the
voting shares of Farmers & Merchants State Bank,
Darlington, Indiana ("Bank").
Notice of the application, affording interested persons an opportunity 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.
Applicant, a nonoperating corporation with no subsidiaries, was organized under the laws of Indiana for
the purpose of becoming a bank holding company by
acquiring Bank, which holds deposits of $4.6 million.1
Upon acquisition of Bank, Applicant would control
one of the smaller banking organizations in Indiana,
representing less than 0.1 percent of the total deposits
in commercial banks in the state.
Bank operates in the Crawfordsville banking market2 and is the smallest of five commercial banking
1. All banking data are as of June 30, 1984.
2. The Crawfordsville banking market consists of Montgomery
County, Indiana.
organizations in the market, controlling approximately
1.8 percent of the total deposits in commercial banks
in the market. Neither Applicant nor any of its principals is associated with any other banking organization
in the relevant market, and consummation of the
proposal would not result in any adverse effects upon
competition or increase the concentration of banking
resources in any relevant area. Accordingly, the Board
concludes that competitive considerations under the
Act are consistent with approval.
The financial and managerial resources and future
prospects of Applicant and Bank are regarded as
consistent with approval, especially in light of a commitment made by Applicant's principal in connection
with this application. Considerations relating to the
convenience and needs of the community to be served
are consistent with approval.
Based on the foregoing and other facts of record, the
Board has determined that the proposed acquisition is
in the public interest and that the application should be
approved. Accordingly, the application is approved
for the reasons summarized above. 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
Chicago, pursuant to delegated authority.
By order of the Board of Governors, effective
July 29, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, and Seger. Absent and not
voting: Governor Gramley.
[SEAL]
JAMES M C A F E E
Associate Secretary of the Board
State Bond and Mortgage Company
New Ulm, Minnesota
Order Denying Acquisition of Bank
State Bond and Mortgage Company, New Ulm, Minnesota, a bank holding company within the meaning of
the Bank Holding Company Act ("Act") (12 U.S.C.
§ 1841 et seq.), has applied for the Board's approval
under section 3(a)(3) of the Act (12 U.S.C.
§ 1842(a)(3)) to acquire all of the voting shares of
National Bank of Commerce, Mankato, Minnesota
("Bank").
Notice of the application, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with section 3(b) of the Act.
Legal Developments
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 is a one bank holding company by virtue
of its control of State Bank and Trust Company of
New Ulm, New Ulm, Minnesota ("New Ulm Bank").
Applicant, the 34th largest banking organization in the
state, with aggregate deposits of $61.2 million, and
Bank, the 73rd largest banking organization in the
state, with aggregate deposits of $41.4 million, are
among the smaller commercial banking organizations
in Minnesota.1 Upon consummation of the proposed
transaction, Applicant would become the 17th largest
commercial banking organization in Minnesota, with
total deposits representing less than one percent of
total deposits in commercial banks in the state. Consummation of the proposal would not result in a
significant increase in the concentration of banking
resources in Minnesota.
Applicant and Bank compete in separate but adjacent banking markets in Minnesota.2 Neither New
Ulm Bank nor Bank are market leaders. In the Board's
judgment, consummation of the transaction would not
have a significant adverse effect upon existing or
potential competition in any relevant market.
The Board has indicated on previous occasions that
a bank holding company should be a source of financial and managerial strength to its subsidiaries, and
that the Board will closely examine the condition of an
applicant in each case with these considerations in
mind. The Board has stated in several orders that it
views with concern proposals that would result in a
significant decline in capital ratios.3 The Board has
also indicated that, as a matter of safety and soundness
and competitive equity, the Board should, in analyzing
a bank holding company's consolidated capital position, consider the capital levels represented by nonbanking activities in light of industry norms and standards and the risk factors of a particular industry.4
1. Banking data are as of March 30, 1984.
2. New Ulm Bank operates in the New Ulm banking market, which
is defined as the southern one-fourth of McLeod County, the western
half of Nicollet County, all of Brown County, and the western twothirds of Sibley County. Bank operates in the Mankato banking
market, which is defined as Blue Earth and Watonwan Counties, the
eastern one-half of Nicollet County, the eastern one-third of Sibley
County, the western one-third of Waseca County, and Le Sueur
County less Lanesburgh Township.
3. See Security
Banks of Montana,
71 FEDERAL RESERVE BULLE-
TIN 246 (1985); National City CorpJBancOhio Corp., 70 FEDERAL
RESERVE BULLETIN 743 (1984); Manufacturers Hanover/CIT Financial Corp.,
70 FEDERAL RESERVE BULLETIN 452 (1984).
4. Capital Adequacy Guidelines, 50 Federal Register 16,057, 16,066
(1985), 71 FEDERAL RESERVE BULLETIN 445, 446 (1985); Manufacturers Hanover/CIT Financial Corp., 70 FEDERAL RESERVE BULLETIN at
453 (1984).
723
Applicant, its subsidiary bank and the bank to be
acquired are in satisfactory condition. The proposed
acquisition, however, involves a purchase premium
and would be funded almost entirely through debt,
resulting in a substantial decline in Applicant's tangible primary capital ratio. While Applicant's overall
capital ratios would be slightly above the minimum
levels required under the Board's Capital Adequacy
Guidelines, the Board is concerned with the effect of
the proposal on the capital adequacy of certain of
Applicant's component activities. A substantial majority of Applicant's assets are devoted to insurance
underwriting and to the issuance and underwriting of
securities, including face amount certificates issued by
Applicant and mutual fund shares, and to securities
brokerage. The Board notes that, if the capital devoted
to support Applicant's banking activities at an acceptable level is excluded, Applicant would not have
adequate capital support for its nonbanking activities
consistent with the risk factors involved in Applicant's
nonbanking activities or generally accepted norms for
companies engaged in similar activities.5 Conversely,
if the capital devoted to support Applicant's nonbanking activities at such acceptable levels is excluded, the
capital available to support Applicant's banking activities would be below the levels specified in the Board's
Capital Adequacy Guidelines.
Consequently, in the Board's view, Applicant's
overall capital position is not sufficient to allow for the
proposed debt-financed expansion of its banking activities, while maintaining an adequate capitalization for
both its banking and nonbanking activities.
Based on these and other facts of record, the Board
concludes that banking considerations involved in this
proposal present adverse factors bearing upon financial resources and future prospects of Applicant and
Bank.
Applicant has proposed no new services for Bank
upon consummation of this proposal. Considerations
relating to the convenience and needs of the community to be served are consistent with but lend no weight
toward approval of this application.
5. Applicant argues that, in analyzing its proposal, the Board
should reallocate part of the capital from an insurance subsidiary to
other parts of the holding company. However, such a reallocation has
not been made, and the record does not establish that such a
reallocation would clearly be permitted by the relevant State Authority or would be consistent with the maintenance of adequate capital in
the insurance subsidiary.
The Board has also considered Applicant's contention that certain
face amount certificates should not be considered debt. The Board,
however, believes that in evaluating capital adequacy, these certificates are appropriately considered liabilities and that the performance
of this activity by Applicant must be supported by an adequate
provision for capital, as in other business activities, in order to
provide appropriate protection for the risks of doing business.
724
Federal Reserve Bulletin • September 1985
On the basis of the facts of record of this application, the Board concludes that the banking considerations involved in this proposal are adverse and are
not outweighed by any relevant competitive or convenience and needs considerations. Accordingly, it is the
Board's judgment that approval of the application
would not be in the public interest and the application
should be and hereby is denied for the reasons summarized above.
By order of the Board of Governors, effective
July 5, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Rice, Gramley, and Seger. Absent and not
voting: Governor Wallich.
[SEAL]
James McAfee
Associate Secretary of the Board
Orders Issued Under Section 4 of Bank Holding
Company Act
RepublicBank Corporation
Dallas, Texas
Order Approving the Issuance of and Sale of
Payment Instruments
RepublicBank Corporation, Dallas, Texas, 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 225.23 of the
Board's Regulation Y (12 C.F.R. § 225.23) to engage
de novo through its subsidiary, Republic Money Orders, Inc., Dallas, Texas ("RMO"), in the issuance
and sale of variably denominated payment instruments
with a maximum face value of $10,000. These instruments will be sold primarily by RepublicBank's subsidiaries and unaffiliated financial institutions throughout the United States.
Notice of the application, affording interested persons an opportunity to submit comments on whether
the proposed activity is closely related to banking and
on the balance of public interest factors regarding the
application, has been published (50 Federal Register
21,353 (1985)). 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.
RepublicBank, the third largest bank holding company in Texas, operates 38 commercial banks and
controls total deposits of $12.4 billion, representing 9.2
percent of the total deposits in commercial banks in
the state. Applicant also engages in a variety of
nonbanking activities, including mortgage banking and
insurance activities.
RepublicBank proposes to expand its current payment instrument activities by engaging de novo in the
issuance and sale of variably denominated payment
instruments with a face value of up to $10,000. These
instruments will include money orders and will be
issued on a nationwide basis. These instruments will
be sold primarily by RepublicBank's subsidiaries, unaffiliated banks, savings and loan associations, and
other financial institutions. Regulation Y includes on
the list of permissible nonbanking activities1 the issuance or sale of money orders and other similar consumer-type payment instruments with a face value not
exceeding $1,000. The Board has previously approved
applications to engage in the issuance of payment
instruments with a maximum face value of $10,000. In
its Orders, the Board found that an increase in the
denomination of such instruments would not affect the
fundamental nature of the payment instruments, and
the Board concluded that the issuance and sale of the
proposed instruments is closely related to banking.2
In order to approve this application, the Board must
also find that the performance of the proposed activity
by a nonbank affiliate of RepublicBank "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."
Consumer-type payment instruments, such as traditional money orders, are marketed nationally on the
wholesale level by a few large organizations and
locally on the retail level by a wide variety of financial
and nonfinancial institutions. On the national scale,
the market is concentrated, being dominated by only a
few large organizations.3 Entry into this business on a
national scale involves overcoming significant barriers
because a potential entrant must possess the capability
for managing the extensive sales and servicing operation necessary for handling a low unit-price, highvolume product. Such capabilities frequently are associated with banking organizations of significant size,
such as RepublicBank. RepublicBank's entry into this
1. 12 C.F.R. § 225.25(b)(12).
2. BankAmerica
( 1 9 8 4 ) ; Citicorp,
Corporation,
70 FEDERAL RESERVE BULLETIN 364
7 1 F E D E R A L RESERVE B U L L E T I N 5 8 ( 1 9 8 5 ) .
3. Money orders are primarily used to transmit money by members
of the consumer public who do not or cannot maintain checking
accounts. Traditionally, money orders have a maximum face value
printed on the instrument, which is generally at or lower than the limit
set by Regulation Y.
Legal Developments
market would result in increased competition in this
industry and may be expected ultimately to result in
increased prospects for some deconcentration of the
industry in the future. Accordingly, the Board views
RepublicBank's proposal as procompetitive and in the
public interest insofar as it relates to the issuance of
instruments that are intended primarily for use by
consumers.
In its past consideration of the issuance of variably
denominated payment instruments, the Board has
been concerned that the issuance of such instruments
with a face value of over $1,000 would result in an
adverse effect on the reserve base. Because reserve
requirements serve as an essential tool of monetary
policy, the Board is concerned that this proposal may
result in adverse effects due to the erosion of the
reservable deposits of the banking system.
In its BankAmerica Order, the Board decided that
BankAmerica and any other bank holding company
that receives approval to engage in this activity would
be required to file with the Board weekly reports of
daily data on this activity for use in conjunction with
measuring and interpreting the money stock and for
assessing the effects of the proposal on the reserve
base. The Board also determined to monitor closely
the effects of such proposals by bank holding companies on the Board's conduct of monetary policy. If it
later appears that the result of such proposals is a
significant reduction in the reserve base or other
adverse effect on the conduct of monetary policy, the
Board may impose reserve requirements on such
transactions, pursuant to section 19 of the Federal
Reserve Act (12 U.S.C. § 461(a)) and the Board's
Regulation D (12 C.F.R. Part 204).
The record shows that the sale of these largerdenominated money orders by RepublicBank would
increase competition in this field and enhance the
convenience of the purchaser. The Board finds that
these instruments, which will be issued by a large
financial organization and will enjoy ready acceptability, will provide benefits to the public.
Based upon the foregoing and other considerations
reflected in the record, the Board has determined that
the balance of the public interest factors it is required
to consider under section 4(c)(8) is favorable with
respect to the activity of issuing consumer-oriented
payment instruments. This determination is subject to
all of the conditions set forth in Regulation Y, including section 225.4(d) and 225.23(b), and to the Board's
authority to require such modification or termination
of the activities of a holding company or any of its
subsidiaries as the Board finds necessary to assure
compliance with the provisions and purposes of the
Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
725
The activity approved hereby 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
Dallas, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 2, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Rice, Gramley, and Seger. Absent and not
voting: Governor Wallich.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
The Wachovia Corporation
Winston-Salem, North Carolina
Order Approving Expansion of Student Loan
Servicing Activities
The Wachovia Corporation, Winston-Salem, North
Carolina, a bank holding company within the meaning
of the Bank Holding Company Act ("Act"),
12 U.S.C. § 1841 et seq., has applied for the Board's
approval, pursuant to section 4(c)(8) of the Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. § 225.23), to expand
the student loan servicing activities previously approved for its existing nonbank subsidiary, Wachovia
Services, Inc. ("WSI"), Winston-Salem, North Carolina.1 The prior approval included provision of such
servicing activities to a state student loan authority.
Applicant's current proposal would encompass the
following expanded activities:
(1) WSI will provide state student loan authorities
(the "Authority") with regular reports that include
information in the aggregate and by individual lend-
1. WSI was organized de novo as a subsidiary of Wachovia Bank &
Trust Company, N.A., Winston-Salem, North Carolina, in 1964 and
became a wholly owned subsidiary of Applicant on January 1, 1969.
On October 27, 1977, the Federal Reserve Bank of Richmond approved, under delegated authority, Applicant's notice to retain WSI,
pursuant to section 4(c)(8) of the Act, and to continue to engage, inter
alia, "in rendering data processing services related to banking,
financial, or related economic data, and specifically in the following
product areas:
c) data processing services to financial institutions, colleges, and universities in
the accounting and servicing of student loans."
On November 30, 1984, the Richmond Reserve Bank approved
Applicant's notice to engage in certain additional student loan servicing activities on a nationwide basis, including provision of such
activities to a state student loan authority, and to establish an office of
WSI in Baton Rouge, Louisiana, from which the proposed expanded
activities initially would be conducted.
726
Federal Reserve Bulletin • September 1985
ers concerning the volume of loans being serviced
by WSI for the Authority, and the volume of loan
commitments outstanding;
(2) Based on the volume of loans being serviced and
commitments outstanding (and in consultation with
a bank trustee and the Authority), WSI will prepare
projections for approval by the Authority of student
loans to be purchased and commitments to be issued
in the future, consistent with the amount of funds
available to the Authority as a result of its sale of
bonds;
(3) WSI will advise eligible lenders, borrowers and
other interested parties of the Authority's student
loan purchase program, including the criteria used
by the Authority in purchasing student loans, and
the extent to which the Authority will be purchasing
loans in the future based on the funds available; and
(4) WSI will meet with the Authority on a regular
basis to keep the Authority apprised of WSI's efforts
in connection with the above proposed (and those
previously approved) student loan servicing activities.
Under no circumstances would WSI be authorized
to bind the Authority or its bank trustee to commit to
purchase or actually to purchase student loans from
eligible lenders. These activities have not been specified by the Board in section 225.25 of Regulation Y as
permissible for bank holding companies.
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published. 50 Federal Register 23,360 (1985). 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.
Applicant is the largest banking organization in
North Carolina, with total consolidated assets of $8.5
billion,2 and engages in numerous nonbanking activities.
In order to approve an application under section
4(c)(8) of the Act, the Board must determine that the
proposed activity is "so closely related to banking or
managing or controlling banks as to a proper incident
thereto. . . ." 12 U.S.C. § 1843(c)(8). In determining
whether an activity is closely related to banking under
section 4(c)(8), the Board has relied on guidelines
established by the federal courts to determine whether
a particular activity meets the "closely related to
banking" test. 3 Under these guidelines, an activity
2. Asset data are as of March 31, 1985.
3. See National Courier Association v. Board of Governors, 516
F.2d 1229 (D.C. Cir. 1975). Accord, Securities Industry Ass'n v.
Board of Governors, _ U.S. _ , 104 S. Ct. 3003, 3008 (1984).
may be found to be closely related to banking if it is
demonstrated:
(1) that banks generally have, in fact, provided the
proposed service;
(2) that banks generally provide services that are
operationally or functionally so similar to the proposed services as to equip them particularly well to
provide the proposed service; or
(3) that banks generally provide services that are so
integrally related to the proposed services as to
require their provision in a specialized form. The
Board also may consider other factors in determining what is closely related to banking and has stated
that it will consider evidence of any reasonable
connection to banking in making its analysis.4
Applicant believes that these activities are so closely related to banking or managing or controlling banks
as to be a proper incident thereto, because the activities are, in Applicant's opinion, either provided by
banks or functionally similar to services provided by
banks. Specifically, Applicant believes that these expanded activities, in addition to the previously approved student loan servicing activities, are permissible under section 225.25(b) of Regulation Y because
they are an integral part of:
(1) making, acquiring and servicing loans for the
account of others, as permitted by section
225.25(b)(1) of Regulation Y;
(2) rendering investment and financial advice, as
permitted by section 225.25(b)(4); and
(3) data processing, as permitted by section
225.25(b)(7).
Utilizing the National Courier criteria, the Board
believes that banks generally have, in fact, provided
services operationally and functionally similar to the
services proposed by Applicant and that Applicant, in
light of its considerable experience in student loan
servicing, is particularly well suited to provide these
expanded loan servicing activities. On this basis, the
Board concludes that the proposed services are closely related to banking.
The proposed activities appear to be substantially
equivalent to the activities of a mortgage banking
subsidiary of a bank holding company under section
225.25(b)(1) of Regulation Y, with respect to acquiring
and servicing mortgage loans for institutional investors
or in connection with the secondary mortgage market.
The facts of record indicate that the activities conducted and proposed by Applicant, to the extent they are
4. See 49 Federal Register 9215 (1984).
Legal Developments
different from the services performed by any institution that services loans for others, appear to be
different only in that they relate to servicing student
loans for a governmental authority. Banks and their
nonbank subsidiaries have generally provided comprehensive loan acquisition and servicing "packages" for
investors in mortgage and other loans. In this regard,
in 1974 the Board approved the acquisition by a bank
holding company of a company engaged in the activity
of arranging, negotiating and acquiring, for the account of institutional investors, loans and other financial transactions secured by income-producing property.5 Moreover, as the nation's largest servicer of
student loans, WSI provides similar services to more
than 250 banks and other investors. Thus, WSI appears to be particularly well equipped to perform the
proposed services.
Before approving a bank holding company's application to engage in an activity that the Board determines is closely related to banking, the Board must
also find that consummation of the proposal can
reasonably be expected to produce benefits to the
public that outweigh possible adverse effects. Under
this proposal, WSI would assist state authorities participating in the Guaranteed Student Loan Program
("GSLP") created by the Congress in the Higher
Education Act of 1965, 20 U.S.C. § 1001 et seq. The
GSLP provides insured loans to post-secondary
school students through a complex delivery system
that includes banks and other institutions that originate the loans, state agencies and authorities that
purchase the loans, state guaranty agencies that insure
the loans, and the federal government, which guarantees or reinsures the loans.
Many financial institutions find it difficult to hold
student loans from the point of origination to maturity
because of the ten-year repayment provisions and the
necessity for compliance with a myriad of federal,
state and guaranty agency regulations. These regulations require the assumption of detailed servicing
responsibilities by the lending institution and the corresponding expense that those servicing responsibilities entail. By using the proceeds of a tax-exempt
bond issue to create a secondary market for the loans
and assuming the servicing responsibilities, a state
hopes to increase the number of bank and nonbank
lenders who would make funds available for student
loans: Lenders would be assured that any student
loans generated in reliance on an authority's loan
727
purchase program can be sold to the Authority any
time after origination, and that administration of the
program would not be overly burdensome on the
participating lenders because the loan servicing responsibilities would be performed by Applicant.
By providing state authorities with expertise in
servicing such student loan programs and assisting
state authorities in establishing a secondary market in
such loans, WSI can ease the administration and
enhance the liquidity of such programs. The record
reflects there may be as much as $148 million of unmet
need for student loans in Applicant's proposed initial
service area (Louisiana). That amount could be reduced if the state authority, with Applicant's assistance, were to increase the number of lenders providing student loans by ensuring a liquid secondary
market for such assets and relieving lenders of servicing responsibilities for such loans. Accordingly, consummation of the proposal would provide substantial
public benefits outweighing any possible adverse effects.
Financial and managerial considerations are consistent with approval of this proposal. Moreover, there is
no evidence in the record that consummation of this
proposal would result in adverse effects, such as
unsound banking practices, unfair competition, conflicts of interests, or undue concentration of resources.
Based upon the foregoing and all the facts of record,
the Board has determined that the balance of public
interest factors it is required to consider under section
4(c)(8) is favorable. Accordingly, the application is
hereby approved. This determination is subject to all
of the conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b). The
approval also is subject to the Board's authority to
require 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.
This transaction shall not be consummated later
than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board, or by the Federal Reserve Bank of
Richmond, pursuant to delegated authority.
By order of the Board of Governors, effective
July 1, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Partee, Rice, Gramley, and Seger. Absent and not
voting: Governor Wallich.
5. Fidelity Corporation of Pennsylvania, 39 Federal Register
16,929 (1974).
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
728
Federal Reserve Bulletin • September 1985
Citizens and Southern Georgia Corporation
Atlanta, Georgia
Order Approving Acquisition of Banks and
Nonbanking Companies
Citizens and Southern Georgia Corporation, Atlanta,
Georgia, a bank holding company within the meaning
of the Bank Holding Company Act ("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 the
successor by merger to Landmark Banking Corporation of Florida, Fort Lauderdale, Florida ("Landmark").1 As a result of the acquisition, Applicant
would acquire indirectly 22 of Landmark's 23 subsidiary banks.2
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 225.23 of the Board's Regulation Y (12 C.F.R. § 225.23) to acquire Landmark's
nonbanking subsidiaries, all in Florida: Capital Group,
Inc., Fort Lauderdale, and its subsidiaries, Capital
America, Inc., Fort Lauderdale, and Capital Associates, Inc., Pompano Beach, companies that engage
in equipment leasing; Landmark Financial Services,
Inc., Fort Lauderdale ("LFS"), a company that engages in real estate appraisal activities and acts as an
agent with respect to the sale of credit life insurance
directly related to extensions of credit by Landmark's
subsidiary banks; Landmark Mortgage Corporation,
Tampa ("Landmark Mortgage"), a company that engages in making and servicing residential real estate
mortgage loans; The National Trust Company, Fort
Myers, a company that engages in trust activities; and
Florida Interchange Group, Inc., Orlando, a company
1. Applicant has also applied under section 3(a)(1) of the Act
(12 U.S.C. § 1842(a)(1)) for approval for its wholly owned inactive
subsidiary, Citizens and Southern Acquisition Corporation, Atlanta,
Georgia ("Acquisition Corporation"), to become a bank holding
company through merger with Landmark. Acquisition Corporation
would be the surviving corporation in the merger and would change its
name to Landmark Banking Corporation of Florida.
2. Landmark controls the following banks, all in Florida: Landmark Bank of Brevard, Melbourne; Landmark First National Bank,
Fort Lauderdale; Charlotte County National Bank, Port Charlotte;
First Bank of Marco Island, N.A., Marco Island; First National Bank
and Trust Company of Naples, Naples; First County Bank, Riverview; Landmark Bank of Tampa, Tampa; Peoples Bank of Hillsborough County, Tampa; East First National Bank, East Fort Myers;
First Commercial Bank of Fort Myers, Fort Myers; The First Bank of
Fort Myers, Fort Myers; Gulf Coast First National Bank, Fort Myers;
North First Bank, North Fort Myers; The Palmetto Bank and Trust
Company, Palmetto; Landmark Bank of Orlando, Orlando; Landmark
Bank of Palm Beach County, Boca Raton; Peoples Bank of Pasco
County, Elfers; Gulf Coast Bank of Pinellas, Madeira Beach; Landmark Union Trust Bank of St. Petersburg, N.A., St. Petersburg; Palm
State Bank, Palm Harbor; Gulf Coast National Bank, Sarasota;
National Bank of Sarasota, Sarasota; and South County Bank,
Venice.
that engages in data processing and related activities
for an electronic funds transfer interchange system.
These activities have been determined by the Board to
be closely related to banking and permissible for bank
holding companies, 12 C.F.R. §§ 225.25(b)(1), (3), (5),
(7), (8), and (13). The determination related to the
authority of bank holding companies to act as agent
with respect to credit life insurance in connection with
extensions of credit has not been affected by amendments to section 4(c)(8) of the Act limiting the permissible insurance investments of bank holding companies.3
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
been given in accordance with sections 3 and 4 of the
Act (50 Federal Register 18,314 (1985)). The time for
filing comments and views 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. 4
Applicant is the largest commercial banking organization in Georgia, with six subsidiary banks that
control aggregate deposits of approximately $4.7 billion, representing 17.1 percent of the total deposits in
commercial banks in Georgia.5 Landmark is the sixth
largest commercial banking organization in Florida. Its
23 subsidiary banks control aggregate deposits of
approximately $3 billion, representing 5.1 percent of
the total deposits in commercial banks in Florida.
Section 3(d) of the Act (12 U.S.C. § 1842(d)), the
Douglas Amendment, prohibits the Board from approving any application by a bank holding company to
acquire control of any bank located outside of the
3. See Garn-St Germain Depository Institutions Act of 1982, Pub.
L. No. 97-320, §601, 96 Stat. 1469, 1536-38 (1982) ("Garn-St
Germain"). The Board received a comment on behalf of the National
Association of Life Underwriters and the National Association of
Professional Insurance Agents in connection with Applicant's proposed acquisition of LFS. This comment urges the Board to ensure
that LFS's insurance agency activities are conducted in accordance
with the standards established by section 4(c)(8) and, in particular, by
Garn-St Germain. In this regard, the Board notes that LFS's insurance activities consist of acting as agent with respect to credit life
insurance directly related to extensions of credit by Landmark's
subsidiary banks. Such activities are explicitly permitted by the terms
of section 4(c)(8)(A) of the Act.
4. The Board received a protest from Legal Services of Greater
Miami, Inc., Gulf Coast Legal Services, Inc., Greater Orlando Legal
Services, Inc., and Central Florida Legal Services, Inc., alleging that
certain of Landmark's subsidiary banks are not fulfilling their responsibility under the Community Reinvestment Act to help meet the
credit needs of their communities. The protestants withdrew their
protest following several meetings with Applicant and Applicant's
adoption of a Statement of Policy setting forth its corporate commitment to help meet community credit needs and its program for
implementing this commitment in the markets served by Landmark.
5. Banking data are as of June 30, 1984.
Legal Developments
holding company's home state,6 unless such acquisition is "specifically authorized by the statute laws of
the State in which [the] bank is located, by language to
that effect and not merely by implication." The statute
laws of Florida authorize the acquisition of a bank in
Florida by a bank holding company that controls a
bank located in other states in a defined southeastern
region, including Georgia, if such other state authorizes on a reciprocal basis the acquisition of a bank in
the state by a Florida bank holding company.7 Georgia
has enacted such a reciprocal statute.8 Based on its
review of the relevant Florida and Georgia statutes,
the Board has determined that Florida has by statute
expressly authorized a Georgia bank holding company, such as Applicant, to acquire a Florida bank or
bank holding company, such as Landmark.9 Furthermore, the United States Supreme Court has recently
held, in Northeast Bancorp, Inc. v. Board of Governors of the Federal Reserve System, 105 S. Ct. 2545
(1985), that regional reciprocal banking statutes, such
as those involved in this case, are authorized by the
Douglas Amendment to the Bank Holding Company
Act and consistent with the United States Constitution. Accordingly, the Board concludes that Board
approval of Applicant's proposal to acquire banks in
Florida is not barred by the Douglas Amendment.
Landmark's banking subsidiaries operate in 14 markets in Florida. None of Applicant's subsidiary banks
operates in Florida and, accordingly, consummation of
the proposal would have no effect on existing competition in any relevant market. The Board has also
examined the effect of Applicant's acquisition of
Landmark on probable future competition in the relevant geographic markets in light of the Board's proposed guidelines for assessing the competitive effects
of market-extension mergers or acquisitions.10 In view
6. A bank holding company's home state is that state in which the
operations of the bank holding company's banking subsidiaries were
principally conducted on July 1, 1966, or the date on which the
company became a bank holding company, whichever is later.
7. Fla. Stat. Ann. § 658.295 (1984). The Florida statute also requires that all of the bank subsidiaries of a Florida bank holding
company sought to be acquired by a regional bank holding company
under the statute must have been in existence and in continuous
operation for more than two years. Fla. Stat. Ann. § 658.295(3)(a)(3).
Applicant has one bank subsidiary, Landmark Bank of Palm Beach
County, that has been in existence for less than two years. Applicant
has committed that this bank will be divested before or contemporaneously with Applicant's consummation of the proposed acquisition.
8. Ga. Code Ann. §§ 7-1-620 to 7-1-625 (Supp. 1985).
9. See SunTrust
Banks,
Inc., 71 FEDERAL RESERVE BULLETIN 176,
177 ( 1 9 8 5 ) .
10. "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 Act," 47 Federal
Register 9017 (1982). While the proposed policy statement has not
been adopted by the Board, the Board has applied the criteria set forth
in the proposed policy statement in its analysis of the effects of
proposals on probable future competition.
729
of the existence of numerous other potential entrants
from within the three-state interstate banking region of
Georgia, Florida, and North Carolina into each of the
markets served by Landmark or Applicant,11 the
Board has concluded that the consummation of this
proposal would not have any significant adverse effects on probable future competition in any relevant
market.
The financial and managerial resources of Applicant, Landmark, and their respective subsidiaries are
considered satisfactory and their prospects appear
favorable. Upon consummation of the proposed transaction, Applicant's primary and total capital ratios
would exceed the minimum levels specified in the
Board's Capital Adequacy Guidelines.12 The Board
concludes that banking factors are consistent with
approval of this application.
Considerations relating to the convenience and
needs of the communities to be served also are consistent with approval of the application, particularly in
light of Applicant's adoption of a Statement of Policy
regarding the Community Reinvestment Act obligations of its proposed subsidiary banks.
Applicant has also applied, pursuant to section
4(c)(8) of the Act, to acquire five nonbanking subsidiaries of Landmark that engage in equipment leasing,
credit insurance, real estate appraisal, residential real
estate mortgage lending and servicing, trust, and data
processing activities. This proposal would eliminate a
small amount of existing competition in Florida between Landmark's and Applicant's subsidiaries that
engage in mortgage banking activities. Both Landmark
Mortgage and Landmark's bank subsidiaries offer residential mortgage lending and servicing through numerous offices in Florida, while Applicant's subsidiary,
Citizens and Southern Mortgage Company ("C&S
Mortgage") operates offices in Tampa, Tallahassee,
and Maitland, Florida. C&S Mortgage's share of the
mortgage banking market in Florida is not significant,
and the product market in Florida is unconcentrated,
with numerous competitors and low barriers to entry.
Accordingly, the proposed acquisition would not have
a significant effect on competition for mortgage banking services in any relevant market. In addition, Appli-
11. North Carolina has in effect regional reciprocal interstate
banking legislation that is similar to the Georgia and Florida laws in
permitting interstate acquisitions of North Carolina banks by banking
organizations located in certain Southern states, including Georgia
and Florida. N.C. Gen. Stat. § 53-229 (1984). North Carolina is a state
within the interstate banking regions defined by the Georgia and
Florida statutes.
12. Capital Adequacy Guidelines, 50 Federal Register 16,057
(1985).
730
Federal Reserve Bulletin • September 1985
cant's discount brokerage subsidiary, First Southeastern Company, competes with Landmark's subsidiary
banks in the market for discount brokerage services
through its office in Tampa, Florida. However, in view
of First Southeastern's de minimis market share in
Florida and the unconcentrated nature of the product
market, the Board concludes that the proposed acquisition would not eliminate any significant competition
in the market for discount brokerage services.
After consideration of the above facts and other
facts of record, the Board concludes that Applicant's
acquisition of Landmark's nonbanking subsidiaries
would not significantly affect competition in any relevant market. Furthermore, there is no evidence in the
record to indicate that approval of this proposal would
result in undue concentration of resources, unfair
competition, conflicts of interests, unsound banking
practices, or other adverse effects on the public interest. Accordingly, the Board has determined that the
balance of the public interest factors it must consider
under section 4(c)(8) of the Act is favorable and
consistent with approval of the applications to acquire
Landmark's nonbanking subsidiaries.
Based on the foregoing and other facts of record, the
Board has determined that the applications under
sections 3 and 4 of the Act should be and hereby are
approved. The acquisition of Landmark's subsidiary
banks shall not be consummated before the thirtieth
calendar day following the effective date of this Order,
and neither the banking acquisition nor the nonbanking acquisition shall occur 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 Atlanta, acting pursuant
to delegated authority. The determination with respect
to Applicant's acquisition of Landmark's nonbanking
subsidiaries is subject to all of the conditions set forth
in Regulation Y, including sections 225.4(d) and
225.23(b) (12 C.F.R. §§ 225.4(d) and 225.23(b)), and to
the Board's authority to require such modifications or
termination of 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
July 29, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, and Seger. Absent and not
voting: Governor Gramley.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Society Corporation
Cleveland, Ohio
Order Approving the Merger of Bank Holding
Companies and the Acquisition of Nonbank
Subsidiaries
Society Corporation, Cleveland, Ohio, a bank holding
company within the meaning of the Bank Holding
Company Act ("Act"), has applied for the Board's
approval under section 3(a)(5) of the Act (12 U.S.C.
§ 1842(a)(5)) to acquire Centran Corporation, Cleveland, Ohio ("Centran"). As a result of the acquisition,
Applicant would acquire indirectly Centran's six subsidiary banks.
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 225.23(a)(2) of the Board's
Regulation Y (12 C.F.R. § 225.23(a)(2)), to acquire
Security Capital Leasing, Inc., Berea, Ohio, a company that engages in the leasing of personal property ;
CFS One, Inc. of Mississippi, Berea, Ohio, a company
that engages in the activity of making consumer loans;
Protective Loan Corporation, Berea, Ohio, a company
that has authority to engage in making and acquiring
consumer loans and to act as an agent with respect to
the sale of credit life and credit health and accident
insurance in connection with its extensions of credit;
and Centran Life Insurance Company, Berea, Ohio,
and Dallas, Texas, a company that engages in the
activity of acting as a reinsurer with respect to credit
life insurance written in connection with extensions of
credit by Centran's affiliate banks. These activities
have been determined by the Board to be closely
related to banking and permissible for bank holding
companies, 12 C.F.R. §§ 225.25(b)(1),(5),(8) and (9),
and those determinations related to the authority of
bank holding companies to act as agent or reinsurer
with respect to credit life and credit health and accident insurance in connection with extensions of credit,
have not been affected by amendments to section
4(c)(8) of the Act limiting the permissible insurance
activities of bank holding companies.1
Applicant has also applied to acquire CFS One,
Inc., Berea, Ohio, another subsidiary of Centran, that
engages in the activity of making consumer and commercial loans, and has the authority to act as an agent
with respect to the sale of credit life and credit health
and accident insurance in connection with its extensions of credit, and with respect to the sale of fire
insurance and extended coverage insurance on real
property, furniture and household goods taken as
1. See Garn-St Germain Depository Institutions Act of 1982, Pub.
L. No. 97-320, § 601, 96 Stat. 1469, 1536-38 (1982).
Legal Developments
731
collateral on loans made or purchased by CFS One,
Inc., pursuant to section 4(c)(8)(D) of the Act. The
scope of permissible activities under section 4(c)(8)(D)
is currently the subject of a rulemaking proceeding.2
Applicant has committed that it will not exercise the
authority of CFS One, Inc., to act as agent with
respect to the sale of property and casualty insurance
directly related to extensions of credit prior to the
conclusion of the Board's adoption of final provisions
of Regulation Y, 12 C.F.R. § 225 et seq., implementing section 4(c)(8)(D) of the Act, and that it will do so
only in compliance with such final provisions, and
only after consultation with the Federal Reserve Bank
of Cleveland.
Notice of the applications, affording an opportunity
for interested persons to submit comments and views,
has been given in accordance with sections 3 and 4 of
the Act (50 Federal Register 19,808 (1985)). The time
for filing comments and views 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. 3
Applicant is the fourth largest banking organization
in Ohio, with ten subsidiary banks that control aggregate deposits of approximately $4.7 billion, representing 8.4 percent of the total deposits in commercial
banks in the state.4 Centran is the seventh largest
banking organization in Ohio, with six subsidiary
banks that control aggregate deposits of $2.2 billion,
representing 4.0 percent of the total deposits in commercial banks in the state. Upon consummation of the
proposed merger, including divestitures proposed by
Applicant, Applicant's share of the total deposits in
commercial banks in Ohio would increase to 11.9
percent, and Applicant would become the third largest
commercial banking organization in the state.
The Board has carefully considered the effects of the
proposal on statewide banking structure. This proposal involves the combination of sizeable commercial
banking organizations that are among the leading
To minimize the competitive effects of the proposal
in the Cleveland banking market, Applicant has committed to divest 18 of Centran's Cleveland market
offices and the deposit accounts associated with those
facilities, to a financial institution not presently represented in the market.8 Upon consummation of the
transaction, including the proposed divestiture, Applicant would control 22.1 percent of the total deposits in
commercial banks in the Cleveland banking market,
and the HHI would increase by 215 points to 1895.
The effect of this transaction is further mitigated by
the extent of competition offered by thrift institutions
2. 49 Federal Register 9215 (1984).
3. The Board received a comment on behalf of the Independent
Insurance Agents of America, Inc., the National Association of
Casualty and Surety Agents, Inc., and the National Association of
Surety Bond Producers ("Protestants"), in connection with Applicant's acquisition under section 4(c)(8) of the Act of CFS One, Inc.
Protestants stated that the Board should limit its approval of the
acquisition of a subsidiary engaged in insurance-related activities to
those activities permissible under sections 4(c)(8)(A) and (B) of the
Act, 12 U.S.C. § 1843(c)(8)(A),(B). In view of Applicant's commitment, discussed above, the Board does not believe that the limitations
suggested by Protestants are necessary.
4. Unless otherwise indicated, banking data are as of December 31,
1984.
5. The Cleveland market is approximated by Cuyahoga, Lake,
Lorain, and Geauga Counties and parts of Summit, Medina, Portage,
and Erie Counties.
6. Market data are as of June 30, 1983.
7. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (1984), any market in which the post-merger
HHI is above 1800 is considered highly concentrated. In such markets, the Department is likely to challenge any merger that produces
an increase in the HHI of more than 50 points unless other factors
indicate that the merger will not substantially lessen competition.
8. The divestiture would be completed before or contemporaneously with Applicant's consummation of the proposed merger with
Centran.
banking organizations in the state. However, Ohio's
banking structure is relatively unconcentrated, with
the state's four largest banking organizations holding
approximately 46 percent of the total deposits in
commercial banks in the state. Upon consummation of
the proposed merger, including the divestitures, the
four-firm concentration ratio would increase to 49.9
percent, and the state would not become highly concentrated. Accordingly, the Board concludes that consummation of this transaction would not have a significant adverse effect on the concentration of banking
resources in the state.
Applicant's subsidiary banks compete directly with
Centran's subsidiary banks in the Cleveland, Akron,
Columbus, and Seneca County banking markets. Applicant is the fourth largest of 20 commercial banking
organizations in the Cleveland banking market,5 with
$1.5 billion in deposits, representing 12.0 percent of
the total deposits in commercial banks therein.6 Centran is the third largest banking organization in the
Cleveland banking market, with deposits of $1.5 billion, representing 12.4 percent of the total deposits in
commercial banks therein. Upon consummation of
this proposal, absent any divestiture, Applicant would
become the second largest commercial banking organization in the market, controlling 24.4 percent of the
market's commercial banking deposits. The HHI in
the market would increase by 298 points to 1978, and
the market would be considered highly concentrated.7
732
Federal Reserve Bulletin • September 1985
in the market.9 Thirty-three thrift institutions operate
in the Cleveland banking market and control $11.0
billion in deposits representing 47 percent of total
deposits in the market. The thrift institutions in the
market currently offer a full range of consumer services and transaction accounts. Twenty-three of the 33
thrift institutions offer commercial loans (other than
commercial real estate loans) and 21 offer commercial
checking accounts. 10 In view of the extent of competition offered by thrift institutions and the proposed
divestiture the Board has determined that consummation of this proposal would not have a significantly
adverse effect on existing competition in the Cleveland
banking market.
Applicant is the fifth largest of nine commercial
banking organizations in the Akron banking market,11
with $209.2 million in deposits, representing approximately 7.5 percent of the total deposits in commercial
banks in the market. Centran is the fourth largest
banking organization in the Akron banking market,
with $257.0 million in deposits, representing approximately 9.2 percent of the total deposits in commercial
banks in the market. After consummation of this
proposal, Applicant would become the fourth largest
commercial banking organization in the market, controlling 16.6 percent of total deposits in commercial
banks in the market. The HHI in the market would
increase by 137 points to 2294, and the market would
be considered highly concentrated. While consummation of the proposal would eliminate some existing
competition in the Akron banking market, the Board
believes that the anticompetitive effects of this proposal are mitigated by the presence of 20 thrift institutions
in the market, controlling $2.1 billion in deposits,
which represents approximately 42.3 percent of the
total deposits in the market. The thrift institutions in
the market currently offer a full range of consumer
services and transaction accounts. Seventeen of the 20
thrift institutions offer commercial loans (other than
commercial real estate loans) and 14 offer commercial
checking accounts. Accordingly, in view of the facts
cited above and other facts of record, the Board
concludes that consummation of this proposal would
not have a significantly adverse effect on existing
competition in the Akron banking market.12
Applicant is the fifth largest of nineteen commercial
banking organizations in the Columbus banking market,13 with $250.7 million in deposits, representing
approximately 4.2 percent of the total deposits in
commercial banks in the market. Centran is the ninth
largest banking organization in the Columbus banking
market, with $73.1 million in deposits, representing
approximately 1.2 percent of the total deposits in
commercial banks in the market. After consummation
of this proposal, Applicant would remain the fifth
largest commercial banking organization in the market, controlling approximately 5.4 percent of total
deposits in commercial banks in the market. The HHI
in the market would increase by 10 points to 2182.
Consummation of the proposal would eliminate existing competition in this market. However, in view of
the small resulting market share and the fact that 17
commercial banking organizations would remain in the
market following consummation of the proposal, the
Board concludes that the acquisition would not have
any significant effect on competition in the Columbus
banking market.
Applicant is the second largest of eight banking
organizations in the Seneca County banking market,14
with $71.0 million in deposits, representing approximately 21.7 percent of the total deposits in commercial
banks in the market. Centran is the fourth largest
banking organization in the Seneca County market,
with $21.9 million in deposits, representing approximately 6.7 percent of the total deposits in commercial
banks in the market. The market is highly concentrated, with a four-firm concentration ratio of 85 percent
and an HHI of 2576. The combination of Applicant and
Centran would increase Applicant's share of commercial bank deposits in the market to 28.3 percent. The
HHI in the market would increase by 289 points to
2865.
9. The Board has previously determined that thrift institutions have
become, or at least have the potential to become, major competitors of
banks. NCNB Corporation,
70 FEDERAL RESERVE BULLETIN 225
(1984); Sun Banks, Inc., 69 FEDERAL RESERVE BULLETIN 934 (1983);
Merchants
Bancorp,
Inc., 69 FEDERAL RESERVE BULLETIN 865
(1983); First Tennessee National Corporation, 69 FEDERAL RESERVE
BULLETIN 298 (1983).
10. Following Applicant's divestiture of 18 Cleveland offices, if 50
percent of the deposits held by thrift institutions were included in the
calculation of market concentration, Applicant would control 8.3
percent of the total deposits in the market and Bank would control 8.6
percent. Consummation of the proposal would increase the HHI by
108 points, from 878 to 986, and the four-firm concentration ratio
would be 56.1 percent.
11. The Akron market is approximated by portions of Summit,
Portage, Medina, Stark, and Wayne Counties.
12. If 50 percent of the deposits held by thrift institutions were
included in the calculation of market concentration, Applicant would
control 5.5 percent of deposits and Centran would control 6.7 percent.
Consummation of the proposal would increase the HHI by 73 points,
from 1321 to 1394, and the four-firm concentration ratio would be 66.7
percent.
13. The Columbus market is approximated by Franklin, Fairfield,
Licking, Delaware, and Pickaway Counties and parts of Madison,
Perry, and Hocking Counties.
14. The Seneca County banking market is defined as Seneca
County and those portions of the City of Fostoria that lie in adjacent
counties.
Legal Developments
To minimize the competitive effects of the proposal
in the Seneca County market, Applicant proposes to
divest Centran's sole banking office in the market to a
recently formed bank holding company that currently
does not operate there. The divestiture would be
completed before or contemporaneously with Applicant's consummation of the proposed merger with
Centran.15 Thus, upon consummation of the transaction, including the proposed divestiture, Applicant's
share of commercial bank deposits and the number of
competitors in the market would remain unchanged.
Accordingly, consummation of the proposal would not
have any significant adverse effect on competition in
the Seneca County market.
There are 21 markets in Ohio in which either Applicant or Centran, but not both, operates.16 The Board
has considered the effect of this proposal on probable
future competition in these markets and has evaluated
the proposal in light of its guidelines for assessing the
competitive effects of market extension mergers and
acquisitions.17
There are two markets in which Centran, but not
Applicant, competes. Each market has numerous potential entrants. Accordingly, the Board finds that
consummation of the proposal would not have a
substantially adverse effect on probable future competition in these markets.
As noted above, Centran has a banking office in the
Seneca County banking market that will be divested
upon consummation of this proposal. While the divestiture would eliminate any adverse effect the proposal
may have upon existing competition, the Board has
also examined the proposal for any adverse effect
upon probable future competition in this market. Because of its size and financial resources and the fact
that it had already entered the Seneca County market,
Centran is viewed as a likely probable future entrant
into this market. However, there are numerous probable future entrants into the market. Therefore, the
15. In this respect, Applicant's proposed divestiture conforms to
the requirement announced in Barnett Banks of Florida, Inc., 68
FEDERAL RESERVE BULLETIN 190 (1982); see alsoInterFirst
tion, 68 FEDERAL RESERVE BULLETIN 243, 244 (1982).
Corpora-
16. The 19 markets in which only Applicant operates are: Ashtabula, Canton, Carrollton, Cincinnati, Crawford, Dayton, Findlay, Fremont, Huron, Mercer, Mt. Gilead, Oxford, Port Clinton, Salem,
Sandusky, Springfield, Toledo, Wapakoneta, and Youngstown-Warren. The two markets in which only Centran operates are Ashland and
Mansfield.
17. "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 Act", 47 Federal
Register 9017 (1982). Although the proposed policy statement has not
been approved by the Board, the Board is using the policy guidelines
as part of its analysis of the effect of proposals on probable future
competition.
733
Board does not view the elimination of Centran as a
probable future entrant into this market as substantially anticompetitive.
Of the remaining 19 markets in which only Applicant
now competes, 16 have numerous probable future
entrants, and the remaining three markets are not
highly concentrated. Based on the foregoing and other
facts of record, the Board concludes that consummation of the proposal would not have any significant
adverse effect on probable future competition in any
relevant market. Thus, competitive considerations are
consistent with approval of the application.
The financial and managerial resources of Applicant
and its subsidiaries are regarded as generally satisfactory, and their future prospects appear favorable.
Banking factors are consistent with approval of the
application. Considerations relating to the convenience and needs of the communities to be served are
also consistent with approval of the application.
Applicant has also applied, pursuant to section
4(c)(8) of the Act, to acquire Centran Life Insurance
Company, Security Capital Leasing, Inc., CFS One,
Inc., CFS One, Inc. of Mississippi, and Protective
Loan Corporation. It does not appear that Applicant's
acquisition of these subsidiaries would have any significant adverse effect upon existing or potential competition.
Furthermore, there is no evidence in the record to
indicate that approval of this proposal would result in
undue concentration of resources, decreased or unfair
competition, conflicts of interests, unsound banking
practices or other adverse effects on the public interest. Accordingly, the Board has determined that the
balance of the public interest factors it must consider
under section 4(c)(8) of the Act is favorable and
consistent with approval of the applications to acquire
Centran Life Insurance Company, Security Capital
Leasing, Inc., CFS One, Inc., CFS One, Inc., of
Mississippi, and Protective Loan Corporation.
Based on the foregoing and other facts of record, the
Board has determined that the applications under
sections 3(a)(5) and 4(c)(8) of the Act should be, and
hereby are, approved.18 The merger shall not be
consummated before the thirtieth calendar day following the effective date of this Order, and neither the
merger nor the acquisition of the nonbanking subsidiaries shall occur later than three months after the
18. As part of this proposal, Marine Midland Banks, Inc., New
York, New York ("Marine"), will receive nonvoting shares of Applicant in exchange for its existing nonvoting equity investment in
Centran, together with cash and a warrant for the purchase of certain
voting shares of Applicant. Applicant has committed that it will not
consummate this proposal until the Board has reviewed and approved
the terms of Marine's proposed investment in Applicant.
734
Federal Reserve Bulletin • September 1985
effective date of this Order, unless such period is
extended for good cause by the Board or by the
Federal Reserve Bank of Cleveland pursuant to delegated authority. The determinations as to Applicant's
nonbanking activities are subject to the conditions set
forth in Regulation Y, including those in sections
225.4(d) and 225.23(b), and to the Board's authority to
require such modification or termination of the activities of a 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
July 15, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, Gramley, and Seger. Governor
Wallich abstained from the insurance portion of these applications.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Valley Bancorporation
Appleton, Wisconsin
Order Approving Acquisition of Banks and a
Mortgage Finance Company
Valley Bancorporation, Appleton, Wisconsin, has applied for the Board's approval under section 3 of the
Bank Holding Company Act ("Act") (12 U.S.C.
§ 1842), to acquire United Banks of Wisconsin, Inc.,
Madison, Wisconsin ("United Banks"), a bank holding company within the meaning of the Act, and
thereby to acquire indirectly its four subsidiary banks:
United Bank, Madison, Wisconsin ("United Madison"); Farmers & Citizens United Bank, Sauk City,
Wisconsin ("United Sauk"); United Bank in Menomonie, Menomonie, Wisconsin ("United Menomonie"); and United Bank in Sun Prairie, Sun Prairie,
Wisconsin ("United Sun Prairie"). Applicant proposes to merge United Banks into Valley-Capital
Corporation, Appleton, Wisconsin, a recently organized wholly owned subsidiary of Applicant that
would be the surviving institution. The banks to be
acquired will continue to operate under their existing
names and charters.
Applicant has also applied under section 4(c)(8) of
the Act (12 U.S.C. § 1843(c)(8)) and section
225.23(a)(2) of the Board's Regulation Y (12 C.F.R.
§ 225.23(a)(2)), to acquire United Mortgage of Wisconsin, Inc., Madison, Wisconsin ("United Mortgage"), a
subsidiary of United Banks. United Mortgage is en
gaged in mortgage financing, an activity that the Board
has determined to be closely related to banking and
permissible for bank holding companies. 12 C.F.R.
§ 225.25(b)(1).
Notice of the applications, affording an opportunity
for interested persons to submit comments, has been
given in accordance with sections 3 and 4 of the Act,
50 Federal Register 15,683 (1985). 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.
Applicant is a multibank holding company that
currently controls 24 subsidiary banks.1 It is the fourth
largest banking organization in Wisconsin and controls
total domestic deposits of $1.1 billion, representing
approximately 4.0 percent of the total deposits in
commercial banks in the state.2 United Banks, the
13th largest banking organization in the state, controls
total domestic deposits of $258.0 million, representing
approximately 0.9 percent of the total deposits in
commercial banks in the state. Upon consummation of
the proposed transaction, Applicant would remain the
fourth largest banking organization in Wisconsin, controlling 28 commercial banks with total deposits of
$1.3 billion, representing 4.9 percent of the total
deposits in commercial banks in the state. The proposed transaction would have no significant effect on
the concentration of banking resources in Wisconsin.
Applicant and United Banks compete directly in one
market, the Madison banking market.3 Applicant's
banking subsidiary in the Madison market, Bank of
Oregon, Oregon, Wisconsin, controls deposits of $30.5
million, representing approximately 1.8 percent of the
total deposits in commercial banks in the market.4
United Banks is the third largest commercial banking
organization in the market, operating two banking
subsidiaries that together control deposits of approximately $167.3 million, representing approximately 9.6
percent of the total deposits in commercial banks in
the market.5 Upon consummation of the proposed
transaction, Applicant would control approximately
1. This figure includes Applicant's recent acquisition of Banc Wis
Corporation, Janesville, Wisconsin, and Bank of Oregon, Oregon,
Wisconsin, which were consummated, respectively, on March 31 and
May 7, 1985.
2. Banking data are as of June 30, 1984.
3. The Madison banking market is defined as all of Dane County
except for the eastern tier, which includes the townships of York,
Medina, Dearfield, Christiana and Albion, all in Wisconsin.
4. Deposit data are as of September 30, 1984.
5. United Madison and United Sun Prairie control, respectively,
deposits of $138.0 million and $29.3 million, representing 7.9 percent
and 1.7 percent of total deposits in commercial banks in the Madison
banking market.
Legal Developments
11.4 percent of the total deposits in commercial banks
in the market.
The share of deposits held by the four largest
banking organizations in the Madison banking market
is 57 percent and would increase to 58.8 percent upon
consummation of this proposal. The market's Herfindahl-Hirschman Index is 1103 and would increase by
35 points to 1138 upon consummation of the proposal.6
Although the proposed acquisition would eliminate
some existing competition between Applicant and
United Banks in the Madison banking market, the
market would not become highly concentrated as a
result of this transaction and 25 competitors would
remain in the market upon consummation. On the
basis of these and other facts of record, the Board
concludes that the effects of consummation of the
proposal on existing competition in the Madison banking market would not be significantly adverse. United
Banks operates in two other banking markets, the
Sauk County and Dunn County banking markets,7 in
which Applicant does not compete. Thus, consummation of this proposal would not have any effect on
existing competition in these markets.
The Board has also examined the effect of the
proposed acquisition upon probable future competition in the three geographic markets in which United
Banks operates and has evaluated the proposal in light
of the Board's proposed guidelines for assessing the
competitive effects of market extension mergers and
acquisitions.8 None of these markets is highly concentrated under the Board's Guidelines. Accordingly, the
Board has concluded that consummation of this proposal would not have any significant adverse effects on
probable future competition in any relevant market.
Accordingly, competitive considerations are consistent with approval of this application.
In evaluating this application, the Board has considered the financial and managerial resources of Applicant and the effect on these resources of the proposed
acquisition of United Banks. The Board has stated that
6. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (1984)), a market in which the post-merger
HHI is between 1000 and 1800 is considered only moderately concentrated. In such a market, the Department is unlikely to challenge a
merger producing an increase in the HHI of less than 100 points.
7. The Sauk County banking market is approximated by Sauk
County, Wisconsin, excluding Spring Green township, and includes
the Westford and Wellon townships in Richland County, Wisconsin.
The Dunn County banking market is defined as Dunn County,
Wisconsin.
8. "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 Act," 47 Federal
Register 9017 (1982). While the proposed policy statement has not
been adopted by the Board, the Board is using the policy Guidelines as
part of its analysis of the effect of a proposal on probable future
competition.
735
a bank holding company should serve as a source of
strength to its banking subsidiaries. In addition, the
Board has stated that capital adequacy is an especially
important factor in the analysis of bank holding company proposals.9 While Applicant's existing primary
and total capital ratios are above the minimum levels
specified for bank holding companies in the Board's
Capital Adequacy Guidelines,10 consummation of the
proposed transaction would result in a slight decline in
Applicant's tangible primary capital ratio to the minimum acceptable primary capital ratio under the
Board's Guidelines. Furthermore, Applicant will incur
additional debt in connection with this proposal. It
appears from the facts of record, however, that Applicant is capable of improving its tangible capital ratio,
servicing its debt, and serving as a source of strength
to its subsidiaries. Therefore, based on these and other
facts of record, the Board concludes that the financial
and managerial resources and future prospects of
Applicant and United Banks are generally satisfactory, and that banking factors are consistent with
approval of this application.
Considerations relating to the convenience and
needs of the community to be served are also consistent with approval. Consummation of this proposal
would result in the expansion of banking services
offered by United Banks' subsidiaries, to include the
provision of trust and discount brokerage services.
Applicant has also applied under section 4(c)(8) of
the Act to acquire United Mortgage, a mortgage
financing company that makes, acquires and services
mortgage loans for itself and for others. This activity
has been determined by the Board to be closely related
to banking under section 225.25(b)(1) of the Board's
Regulation Y. 12 C.F.R. § 225.25(b)(1)). Consummation of this proposal would have no effect on competition or the concentration of resources in any relevant
market. The record does not contain any evidence that
consummation of the proposal would result in any
other adverse factors, such as undue concentration of
resources, decreased or unfair competition, conflicts
of interest or unsound banking practices. Accordingly,
the Board has determined that the balance of public
interest factors it must consider under section 4(c)(8)
of the Act is favorable and consistent with approval of
the application.
Based on the foregoing and other facts of record, the
Board has determined that the applications under
sections 3 and 4 of the Act should be and hereby are
9. See, e.g., National City Corporation, 70 FEDERAL RESERVE
BULLETIN 743 (1984).
10. Capital Adequacy Guidelines, 50 Federal Register
(1985).
16,057
736
Federal Reserve Bulletin • September 1985
approved. The acquisition of banks shall not be consummated before the thirtieth calendar day following
the effective date of this Order, and neither the banking acquisition nor the nonbanking acquisition shall
occur later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Chicago acting pursuant to delegated authority. The
determination with respect to Applicant's acquisition
of United Mortgage is subject to all of the conditions
set forth in Regulation Y, including sections 225.4(d)
and 225.23(b) (12 C.F.R. §§ 225.4(d) and 225.23(b)),
and to the Board's authority to require such modifica-
tion or termination of 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
July 15, 1985.
Voting for this action: Chairman Volcker and Governors
Martin, Wallich, Partee, Rice, Gramley, and Seger.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT
By the Board of Governors
During June and July 1985 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
Bankers Trust New York Corporation,
New York, New York
Barnett Banks of Florida, Inc.,
Jacksonville, Florida
Fifth Third Bancorp,
Cincinnati, Ohio
RepublicBank Corporation,
Dallas, Texas
By Federal Reserve
Board action
(effective
date)
Bank(s)
Bankers Trust Delaware,
Wilmington, Delaware
Niceville Bankshares Corporation,
Niceville, Florida
The Fifth Third Bank of Columbus,
Columbus, Ohio
RepublicBank Countryside, N.A.,
San Antonio, Texas
July 19, 1985
June 26, 1985
June 27, 1985
July 1, 1985
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
American National Bancshares,
Inc.,
Noblesville, Indiana
Bank(s)/Nonbanking
Company
The American National Bank of
Noblesville,
Noblesville, Indiana
Reserve
Bank
Chicago
Effective
date
July 16, 1985
Legal Developments
Section 3—Continued
a
i-
t
pp
Amcorp Financial, Inc.,
Ardmore, Oklahoma
BancTenn Corp.,
Kingsport, Tennessee
Barclays PLC,
London, England
BFW Financial Corporation,
Burleson, Texas
BoRC Financial Corporation,
Harriman, Tennessee
Carroll Financial Corporation,
Burlington, Indiana
Cascade Bancorporation, Inc.,
Cascade, Wisconsin
Citicorp,
New York, New York
Citizens Bancorporation of New
Ulm,
New Ulm, Minnesota
Commerce Bancshares of Roswell, Inc.,
Roswell, New Mexico
Community Financial Corporation,
Littlestown, Pennsylvania
Commonwealth Bancshares
Corp.,
Williamsport, Pennsylvania
Cosmos Bancorporation, Inc.,
Cosmos, Minnesota
Darmen Financial of Wisconsin,
Inc.,
Fennimore, Wisconsin
Edna Bancshares, Inc.,
Edna, Kansas
Elston Corporation,
Crawfordsville, Indiana
Evergreen Bancshares, Inc.,
Crossett, Arkansas
Farmers & Merchants Bancorp,
Inc.,
Archbold, Ohio
Bank(s)/Nonbanking
Company
American National Bank,
Ardmore, Oklahoma
Bank of Tennessee,
Kingsport, Tennessee
Barclays Bank PLC,
London, England
Barclays USA, Inc.,
Wilmington, Delaware
Barclays Bank of Delaware,
N.A.,
Wilmington, Delaware
Shady Oaks National Bank,
Lake Worth, Texas
Bank of Roane County,
Harriman, Tennessee
First Bank of Carroll County,
Burlington, Indiana
State Bank of Cascade,
Cascade, Wisconsin
Quadstar Corporation,
Wilmington, Delaware
Citizens Bank of New Ulm,
New Ulm, Minnesota
Reserve
Bank
Effective
date
Kansas City
July 9, 1985
Atlanta
July 19, 1985
New York
June 20, 1985
Dallas
June 21, 1985
Atlanta
July 15, 1985
Chicago
July 18, 1985
Chicago
July 2, 1985
New York
July 15, 1985
Minneapolis
July 10, 1985
Valley Bank of Commerce,
Roswell, New Mexico
Dallas
June 27, 1985
Community National Bank of
Southern Pennsylvania,
Littlestown, Pennsylvania
Commonwealth National Financial Corporation,
Harrisburg, Pennsylvania
Heritage Financial Services Corporation,
Lewistown, Pennsylvania
First State Bank of Cosmos,
Cosmos, Minnesota
The First State Bank,
Fennimore, Wisconsin
Philadelphia
July 11, 1985
Philadelphia
July 19, 1985
Minneapolis
July 10, 1985
Chicago
July 12, 1985
First State Bank of Edna,
Edna, Kansas
Lizton Financial Corporation,
Lizton, Indiana
First State Bank,
Crossett, Arkansas
The Farmers & Merchants State
Bank,
Archbold, Ohio
Kansas City
June 21, 1985
Chicago
June 27, 1985
St. Louis
July 3, 1985
Cleveland
June 21, 1985
737
738
Federal Reserve Bulletin • September 1985
Section 3—Continued
Applicant
Farmers & Merchants Bancshares, Inc.,
Mart, Texas
Financial Dominion of Kentucky, Inc.,
Radcliff, Kentucky
Financial Holdings, Inc.,
Louisville, Colorado
Financial Management Services
of Jefferson, Inc.,
Jefferson, Wisconsin
F M Fincorp,
Laotto, Indiana
First Commonwealth Financial
Corporation,
Indiana, Pennsylvania
First Corinth Corp.,
Corinth, Mississippi
First Crockett Bancshares, Inc.,
Crockett, Texas
First Fidelity Bancorporation,
Newark, New Jersey
First National Shares of
Louisiana,
Baton Rouge, Louisiana
First National Bancorp,
Gainesville, Georgia
First National Talladega Corporation,
Talladega, Alabama
First Railroad & Banking Company of Georgia,
Augusta, Georgia
First Railroad & Banking Company of Georgia,
Augusta, Georgia
First Wyoming Bancorporation,
Cheyenne, Wyoming
Bank (s)/Nonbanking
Company
Reserve
Bank
Effective
date
The Farmers and Merchants
Bank of Mart,
Mart, Texas
Farmers Deposit Bank,
Brandenburg, Kentucky
Dallas
July 18, 1985
St. Louis
July 12, 1985
Boulder Valley National Bank,
Boulder, Colorado
The Farmers & Merchants Bank
of Jefferson,
Jefferson, Wisconsin
Farmers & Merchants Bank,
Laotto, Indiana
The Dale National Bank,
Dale, Pennsylvania
Kansas City
July 5, 1985
Chicago
July 3, 1985
Chicago
July 10, 1985
Cleveland
July 16, 1985
St. Louis
July 3, 1985
Dallas
June 28, 1985
New York
July 1, 1985
Atlanta
July 10, 1985
Atlanta
July 3, 1985
Atlanta
July 19, 1985
Atlanta
July 1, 1985
Atlanta
July 11, 1985
Kansas City
June 18, 1985
National Bank of Commerce of
Corinth,
Corinth, Mississippi
Allied First National Bank of
Crockett,
Crockett, Texas
First Fidelity Bank,
Princeton, West Windsor, New
Jersey
First National Bank of East
Baton Rouge,
Baton Rouge, Louisiana
Peoples Bancorp,
Cleveland, Georgia
The First National Bank of
Talladega,
Talladega, Alabama
Washington Loan & Banking
Company,
Washington, Georgia
Decimus Data Services Corporation,
Chicago, Illinois
First Wyoming Bank, N.A.-Riverton,
Riverton, Wyoming
Legal Developments
Section 3—Continued
..
p
FirstPlace Financial Corp.,
Lincoln, Illinois
Forsyth Bancshares, Inc.,
Cumming, Georgia
Ft. Elliott Bancshares, Inc.,
Mobeetie, Texas
Harris Bankcorp, Inc.,
Chicago, Illinois
Headland Capital Corporation,
Headland, Alabama
In wood Holding Corporation,
Irving, Texas
KGG Ban Corp.,
Hampton, Iowa
Kingfisher Bancorp, Inc.,
Kingfisher, Oklahoma
Kootenai Bancorp,
Libby, Montana
Madison Bank Corp.,
Madison, Georgia
Marshall & Ilsley Corporation,
Milwaukee, Wisconsin
NEB Corporation,
Fond du Lac, Wisconsin
Old-First National Corporation,
Bluffton, Indiana
Ontario Bancorporation, Inc.,
Ontario, Wisconsin
PSB Bancshares, Ltd,
Postville, Iowa
Bank(s)/Nonbanking
Company
First National Bank in Lincoln,
Lincoln, Illinois
Forsyth County Bank,
Cumming, Georgia
The First State Bank of
Mobeetie,
Mobeetie, Texas
Bankmont Financial Corp.,
New York, New York
First Canadian Financial U.S.
Holdings, Inc.,
Montreal, Quebec, Canada
First National Bank and Trust
Company of Barrington,
Barrington, Illinois
Bank of Montreal,
Montreal, Quebec, Canada
Wiregrass Bank & Trust,
Headland, Alabama
Inwood Bancshares, Inc.,
Dallas, Texas
Inwood National Bank of Dallas,
Dallas, Texas
Community State Bank,
Rockwell, Iowa
Kingfisher Bank and Trust
Company,
Kingfisher, Oklahoma
First National Bank in Libby,
Libby, Montana
Bank of Madison,
Madison, Georgia
M&I Bank of Dodgeville,
Dodgeville, Wisconsin
American Bank of Fond du Lac,
Fond du Lac, Wisconsin
Old-First National Bank in Bluffton,
Bluffton, Indiana
Genoa State Bank,
Genoa, Wisconsin
Postville State Bank,
Postville, Iowa
Reserve
Bank
Effective
date
Chicago
July 3, 1985
Atlanta
June 21, 1985
Dallas
July 12, 1985
Chicago
June 28, 1985
Atlanta
June 28, 1985
Dallas
July 17, 1985
Chicago
July 11, 1985
Kansas City
June 28, 1985
Minneapolis
June 20, 1985
Atlanta
July 10, 1985
Chicago
June 18, 1985
Chicago
June 27, 1985
Chicago
July 16, 1985
Chicago
July 11, 1985
Chicago
July 3, 1985
739
740
Federal Reserve Bulletin • September 1985
Section 3—Continued
A
PPhcant
River Bend Bancshares, Inc.,
Wood River, Illinois
Rock Springs American Bancorporation, Inc.,
Rock Springs, Wyoming
Rockford Bancorporation, Inc.,
Rockford, Minnesota
Ruston Bancshares, Inc.,
Ruston, Louisiana
Sand Ridge Financial Corp.,
South Bend, Indiana
Security Pacific Corporation,
Los Angeles, California
Sequatchie County Bancorp,
Inc.,
Dunlap, Tennessee
SouthTrust Corporation,
Birmington, Alabama
Southwest Banc Shares, Inc.,
Chatom, Alabama
State Financial Services Corporation,
Hales Corners, Wisconsin
Tolna Bancorp, Inc.,
Tolna, North Dakota
United Banks of Colorado, Inc.,
Denver, Colorado
Wanamingo Bancshares, Inc.,
Wanamingo, Minnesota
Warrick Financial Corporation,
Boonville, Indiana
WGNB Corporation,
Carrollton, Georgia
Bank(s)/Nonbanking
Company
Illinois State Bank of East Alton,
East Alton, Illinois
The American National Bank of
Rock Springs,
Rock Springs, Wyoming
State Bank,
Rockford, Minnesota
Security Bancshares, Inc.,
Monroe, Louisiana
Security Bank,
Monroe, Louisiana
Bank of Highland,
Highland, Indiana
Vierling, Devaney & Maguire,
Inc.,
New York, New York
Sequatchie County Bank,
Dunlap, Tennessee
Reserve
Bank
Effective
date
St. Louis
July 12, 1985
Kansas City
July 12, 1985
Minneapolis
July 19, 1985
Dallas
July 12, 1985
Chicago
July 15, 1985
San Francisco
June 24, 1985
Atlanta
July 3, 1985
Elba Exchange Bank,
Elba, Alabama
Chatom State Bank,
Chatom, Alabama
University National Bank,
Milwaukee, Wisconsin
Atlanta
June 27, 1985
Atlanta
June 27, 1985
Chicago
July 10, 1985
The Farmers & Merchants State
Bank,
Tolna, North Dakota
United Banks of Westminster,
Westminster, Colorado
Security State Bank of Wanamingo, Inc.,
Wanamingo, Minnesota
Warrick National Bank of Boonville,
Boonville, Indiana
West Georgia National Bank of
Carrollton,
Carrollton, Georgia
Minneapolis
July 9, 1985
Kansas City
July 12, 1985
Minneapolis
July 16, 1985
St. Louis
July 12, 1985
Atlanta
June 21, 1985
Legal Developments
Section 4
Applicant
First Bank System, Inc.,
Minneapolis, Minnesota
First Eastern Corp.,
Wilkes-Barre, Pennsylvania
Marion National Corporation,
Marion, South Carolina
Bank(s)/Nonbanking
Company
The John Fawcett Company,
Duluth, Minnesota
The Byers Company,
Duluth, Minnesota
Robert H. Heimbach Agency,
Inc.,
Duluth, Minnesota
Montana International Insurance,
Inc.,
Helena, Montana
Ideal Consumer Discount
Company,
Nanticoke, Pennsylvania
Gasque-Clemmons Agency, Inc.,
Marion, South Carolina
Marion Investment Corporation,
Inc.,
Marion, South Carolina
Reserve
Bank
Effective
date
Minneapolis
July 16, 1985
Philadelphia
June 28, 1985
Richmond
July 19, 1985
Sections 3 and 4
Applicant
Barclays U.S. Holdings, Inc.,
New York, New York
Key Bancshares of New York
Inc.,
Albany, New York
National Commerce Corporation,
Birmingham, Alabama
Bank(s)/Nonbanking
Company
BarclaysAmericanCorporation,
Charlotte, North Carolina
Barclays Bank of Delaware,
N.A.,
Wilmington, Delaware
consumer finance, credit-related
insurance, sale of money orders
and travelers checks, data
processing activities
Several New York-domiciled subsidiary banks of Key Banks
Inc.,
Albany, New York
lending, leasing, data processing,
investment advisory services,
underwriting of credit-related
insurance
MetroBank,
Birmingham, Alabama
extension of credit
Legal Developments
Reserve
Bank
Effective
date
New York
June 20, 1985
New York
July 17, 1985
Atlanta
July 17, 1985
continued on next page
741
742
Federal Reserve Bulletin • September 1985
PENDING CASES INVOLVING THE BOARD OF GOVERNORS
This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of
Governors is not named a party.
Florida Bankers Association v. Board of Governors,
No. 84-3883 and No. 84-3884 (11th Cir., filed
Feb. 15, 1985).
Florida Department of Banking v. Board of Governors, No. 84-3831 and No. 84-3832 (11th Cir., filed
Feb. 15, 1985).
Dimension Financial Corporation v. Board of Governors, No. 84-1274 (U.S., filed Feb. 6, 1985).
Lewis v. Paul A. Volcker and Arthur D. Merman,
Bank of Ohio, No. C-1-85-0099 (S.D. Ohio, filed
Jan. 14, 1985).
Brown v. United States Congress, et al., No. 84-28876(IG) (filed Dec. 7, 1985).
Seattle Bancorporation, et al. v. Board of Governors,
No. 84-7535 (9th Cir., filed Aug. 15, 1984).
Citicorp v. Board of Governors, No. 84-4081 (2d Cir.,
filed May 22, 1984).
Melcher v. Federal Open Market Committee, No. 841335 (D.D.C., filed, Apr. 30, 1984).
Florida Bankers Association, et al. v. Board of Governors, No. 84-3269 and No. 84-3270 (11th Cir., filed
Apr. 20, 1984).
State of Ohio, v. Board of Governors, No. 84-1270
(10th Cir., filed Jan. 30, 1984).
Colorado Industrial Bankers Association v. Board of
Governors, No. 84-1122 (10th Cir., filed Jan. 27,
1984).
First Bancorporation v. Board of Governors, No. 841011 (10th Cir., filed Jan. 5, 1984).
Oklahoma Bankers Association v. Federal Reserve
Board, No. 83-2591 (10th Cir., filed Dec. 13, 1983).
Securities Industry Association v. Board of Governors, No. 80-2730 (D.C. Cir., filed Oct. 24, 1980).
A1
Financial and Business Statistics
CONTENTS
Domestic
WEEKLY REPORTING COMMERCIAL BANKS
Financial
Statistics
MONEY STOCK AND BANK CREDIT
A3 Reserves, money stock, liquid assets, and debt
measures
A4 Reserves of depository institutions, Reserve
Bank credit
A5 Reserves and borrowings—Depository
institutions
A5 Federal funds and repurchase agreements—
Large member banks
POLICY INSTRUMENTS
A6 Federal Reserve Bank interest rates
A7 Reserve requirements of depository institutions
A8 Maximum interest rates payable on time and
savings deposits at federally insured institutions
A9 Federal Reserve open market transactions
FEDERAL RESERVE BANKS
A10 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holdings
MONETARY AND CREDIT AGGREGATES
A12 Aggregate reserves of depository institutions
and monetary base
A13 Money stock, liquid assets, and debt measures
A15 Bank debits and deposit turnover
A16 Loans and securities—All commercial banks
COMMERCIAL BANKING
INSTITUTIONS
A17 Major nondeposit funds
A18 Assets and liabilities, last-Wednesday-of-month
series
A19
A20
A21
A22
Assets and liabilities
All reporting banks
Banks in New York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
FINANCIAL
MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
FEDERAL FINANCE
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A31 U.S. government securities dealers—
Transactions
A32 U.S. government securities dealers—Positions
and financing
A3 3 Federal and federally sponsored credit
agencies—Debt outstanding
76
Federal Reserve Bulletin • September 1985
International
SECURITIES MARKETS AND
CORPORATE FINANCE
SUMMARY
A34 New security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales and
asset position
A35 Corporate profits and their distribution
A36 Nonfinancial corporations—Assets and
liabilities
A36 Total nonfarm business expenditures on new
plant and equipment
A37 Domestic finance companies—Assets and
liabilities and business credit
Statistics
STATISTICS
A53
A54
A54
A54
U.S. international transactions—Summary
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A55 Foreign branches of U.S. banks—Balance sheet
data
A57 Selected U.S. liabilities to foreign official
institutions
REPORTED BY BANKS IN THE UNITED STATES
REAL ESTATE
A38 Mortgage markets
A39 Mortgage debt outstanding
CONSUMER INSTALLMENT
CREDIT
A40 Total outstanding and net change
A41 Terms
A57
A58
A60
A61
Liabilities to and claims on foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A61 Banks' own claims on unaffiliated foreigners
A62 Claims on foreign countries—Combined
domestic offices and foreign branches
REPORTED BY NONBANKING BUSINESS
ENTERPRISES IN THE UNITED STATES
FLOW OF FUNDS
A42 Funds raised in U.S. credit markets
A43 Direct and indirect sources of funds to credit
markets
A63 Liabilities to unaffiliated foreigners
A64 Claims on unaffiliated foreigners
SECURITIES HOLDINGS AND
Domestic
Nonfinancial
SELECTED MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross national product and income
A52 Personal income and saving
TRANSACTIONS
Statistics
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and notes—
Foreign transactions
INTEREST AND EXCHANGE
RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular
Statistical Releases,
Tables
Presentation,
and Special
Money Stock and Bank Credit
1.10
A3
RESERVES, M O N E Y STOCK, LIQUID ASSETS, A N D DEBT M E A S U R E S
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent)'
Item
1984
Q3
Q4
Q1
1985
Q2
Feb.
Mar.
Apr.'
May'
June
institutions2
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 3
5
6
7
8
9
Concepts of money, liquid assets, and debt4
Ml
M2
M3
L
Debt
Nontransaction
10 InM2 5
11 In M3 only 6
1985
6.9'
6.7'
-44.7'
7.1'
3.8'
3.C
36.3'
4.7'
17.4'
16.9"57.3'
8.2'
12.2
12.3
14.1
7.5
24.1'
19.7'
28.3'
11.(K
1.1'
5.4'
-8.1'
5.3'
7.1
8.1
15.7
3.6
18.1
16.4
18.3
10.6
24.9
22.3
29.6
13.5
4.5
6.8
9.5
12.1'
12.6
3.2
9.1
11.0
9.5'
13.4
10.6
12.0
10.7
9.8
13.4
10.2
5.3
5.2
n.a.
11.7
14.3
11.1
8.1
10.1
11.1'
5.7
4.1
5.6'
8.7'
10.9<-
5.9
-.9
.2
.7
12.1
14.0
8.6
7.8
n.a.
11.7
19.8
14.0
10.9
n.a.
n.a.
7.6
20.5
10.9
18.7
12.5
5.4'
3.8
4.8
10.1
-3.3
3.5
11.8'
-3.0
5.0
6.9
4.6
12.2
-1.0
-5.6
13.4
19.3
-10.4
6.9
12.2
-8.7
-1.8
2.6
-1.7
6.5
8.3
-2.0
-8.4
9.6
-10.9
2.5
23.1
-7.0
15.0
15.1
8.0
7.1
-4.0
14.9
2.5
-19.0
-6.5
17.1
37.8
-6.6
15.2
29.8
2.2
1.7
21.0
3.3
4.2
2.3
7.9
-3.9
2.3
2.9
.5
-5.4
-.7
4.8
.8
5.0
10.6
13.2
9.2
4.8
2.3
14.7
12.0
9.1
15.6
12.7
9.2
15.9
12.6
9.9
13.1
11.2
n.a.
13.7
10.3'
12.7
10.6
10^
11.4
13.2
11.8
n.a.
14.8
10.8
9.3
n.a.
n.a.
9.6
components
Time and savings deposits
Commercial banks
Savings 7
Small-denomination time 8
Large-denomination time 9,10
Thrift institutions
15 Savings 7
16 Small-denomination time
17 Large-denomination time 9
12
13
14
Debt components4
18 Federal
19 Nonfederal
20 Total loans and securities at commercial banks"
1. Unless otherwise noted, rates of change are calculated from average
amounts outstanding in preceding month or quarter.
2. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
3. The monetary base not adjusted for discontinuities consists of total
reserves plus required clearing balances and adjustments to compensate for float
at Federal Reserve Banks plus the currency component of the money stock less
the amount of vault cash holdings of thrift institutions that is included in the
currency component of the money stock plus, for institutions not having required
reserve balances, the excess of current vault cash over the amount applied to
satisfy current reserve requirements. After the introduction of contemporaneous
reserve requirements (CRR), currency and vault cash figures are measured over
the weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock plus the remaining items seasonally
adjusted as a whole.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U.S.
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker/dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker/dealer), foreign governments and commercial
banks, and the U.S. government. Also subtracted is a consolidation adjustment
that represents the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted is
a consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are on an end-of-month basis. Growth rates for debt reflect adjustments for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker/dealer), MMDAs, and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual funds.
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
11. Changes calculated from figures shown in table 1.23.
A4
1.11
DomesticNonfinancialStatistics • September 1985
RESERVES OF DEPOSITORY INSTITUTIONS A N D RESERVE B A N K CREDIT
Millions of dollars
Monthly averages of
daily figures
Weekly averages of daily figures for week ending
1985
1985
May 15
Apr.
May
June
May 22
May 29
187,124
189,001
188,651
188,009
186,050
185,768
187,266
188,845
188,490
188,052
164,467
163,690
777
8,454
8,372
82
0
1,316
503
12,384
11,093
4,618
16,634
166,708
165,365
1,343
8,461
8,365
96
0
1,178
587
12,067
11,091
4,618
16,696
166,584
166,451
133
8,325
8,321
4
0
1,227
600
11,915
11,090
4,618
16,749
164,869
164,869
0
8,364
8,364
0
0
1,393
589
12,793
11,091
4,618
16,687
164,355
164,355
0
8,363
8,363
0
0
1,474
591
11,267
11,091
4,618
16,701
164,223
164,223
0
8.363
8,363
0
0
1,174
496
11,512
11,091
4,618
16,715
165,262
164,694
568
8,382
8,363
19
0
1,861
144
11,617
11,091
4,618
16,728
166,676
166,676
0
8,337
8,337
0
0
819
1,055
11,958
11,091
4,618
16,739
166,052
166,052
0
8,303
8,303
0
0
1,427
798
11,910
11,090
4,618
16,750
166,709
166,709
0
8,303
8,303
0
0
735
314
11,991
11,090
4,618
16,761
180,973
575
183,019
600
185,414
596
182,900
600
183,037
602
183,966
601
184,906
602
185,548
597
185,640
597
185,139
594
6,711
218
1,556
6,591
227
1,549
2,874
229
1,657
6,883
241
1,516
3,138
233
1,618
3,245
226
1,507
2,400
217
1,494
2,077
211
1,669
2,514
240
1,768
3,754
210
1,608
June 5
June 12
June 19
June 26
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit
U.S. government securities 1
2
3
Bought outright
Held under repurchase agreements
4
Federal agency obligations
5
6
Bought outright
Held under repurchase agreements
7
8
Acceptances
9
Loans
10 Float
11 Other Federal Reserve assets
12 Gold stock
13 Special drawing rights certificate account
14 Treasury currency outstanding
ABSORBING RESERVE F U N D S
15 Currency in circulation
16 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
17 Treasury
18 Foreign
19 Service-related balances and adjustments
20 Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 2
427
603
470
647
784
487
541
426
622
400
6,424
6,310
6,301
6,290
6,328
6,258
6,254
6,275
6,357
6,307
22,587
22,508
23,568
21,328
22,722
21,902
23,290
24,490
23,211
22,508
End-of-month figures
Wednesday figures
1985
1985
Apr.
May
June
May 15
May 22
May 29
197,652
185,262
191,442
186,438
190,176
186,578
189,908
188,647
190,224
188,027
173,913
166,460
7,453
8,903
8,372
531
0
1,525
254
13,057
164,245
164,245
0
8,363
8,363
0
0
1,765
-816
11,705
169,110
169,110
0
8,303
8,303
0
0
1,338
262
12,429
164,212
164,212
0
8,363
8,363
0
0
1,484
743
11,636
164,262
164,262
0
8,363
8,363
0
0
4,769
1,336
11,446
164,714
164,714
0
8,363
8,363
0
0
1,419
162
11,920
165,240
164,066
1,174
8,373
8,363
10
0
3,549
774
11,972
166,816
166,816
0
8,303
8,303
0
0
688
961
11,879
165,431
165,431
0
8,303
8,303
0
0
3,806
517
12,167
166,282
166,282
0
8,303
8,303
0
0
776
391
12,275
11,091
4,618
16,673
11,091
4,618
16,726
11,090
4,618
16,770
11,091
4,618
16,699
11,091
4,618
16,713
11,091
4,618
16,726
11,091
4,618
16,737
11,090
4,618
16,748
11,090
4,618
16,759
11,090
4,618
16,770
180,858
586
184,691
602
185,886
588
183,114
602
183,325
601
184,853
602
185,233
598
185,818
597
185,478
594
185,414
588
19,305
348
1,302
1,933
205
1,337
3,288
310
1,348
3,414
319
1,326
3,110
213
1,327
3,853
223
1,336
1,975
211
1,337
1,778
207
1,422
3,541
168
1,423
3,892
243
1,348
324
557
321
1,469
472
530
444
432
567
349
6,652
6,242
6,291
6,123
6,119
6,086
6,091
6,067
6,186
6,144
20,660
22,131
25,888
22,480
27,431
21,531
26,466
24,783
24,734
22,527
June 5
June 12
June 19
June 26
SUPPLYING RESERVE FUNDS
23 Reserve Bank credit
24
25
26
27
28
29
30
31
32
33
U.S. government securities 1
Bought outright
Held under repurchase agreements...
Federal agency obligations
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 F U N D S
37 Currency in circulation
38 Treasury cash holdings
Deposits, other than reserve balances with
Federal Reserve Banks
39 Treasury
40
Foreign
41 Service-related balances and adjustments . . .
42 Other
43 Other Federal Reserve liabilities and
capital
44 Reserve balances with Federal
Reserve Banks 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 and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Money Stock and Bank Credit
1.12
RESERVES A N D BORROWINGS
A5
Depository Institutions
Millions of dollars
Monthly averages 8
Reserve classification
1
2
3
4
5
6
7
8
9
10
Reserve balances with Reserve Banks'
Total vault cash 2
Vault cash used to satisfy reserve requirements 3 .
Surplus vault cash 4
Total reserves 5
Required reserves
Excess reserve balances at Reserve Banks 6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks 7
1982
1983
1984
1984
Dec.
Dec.
Dec.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
24,939
20,392
17,049
3,343
41,853
41,353
500
697
33
187
21,138
20,755
17,908
2,847
38,894
38,333
561
774
96
2
21,738
22,316
18,958
3,358
40,696
39,843
853
3,186
113
2,604
21,738
22,316
18,958
3,358
40,696
39,843
853
3,186
113
2,604
21,577
23,044
19,547
3,497
41,125
40,380
745
1,395
62
1,050
20,416
23,927
19,857
4,070
40,273
39,370
903
1,289
71
803
22,065
21,863
18,429
3,434
40,494
39,728
766
1,593
88
1,059
23,217
21,567
18,435
3,132
41,652
40,914
738
1,323
135
868
22,385
21,898
18,666
3,231
41,051
40,247
804
1,334
165
534
23,369
22,180
18,984
3,196
42,354
41,446
907
1,205
151
665
1985
Biweekly averages of daily figures for weeks ending
1985
11
12
13
14
15
16
17
18
19
20
Reserve balances with Reserve Banks'
Total vault cash 2
Vault cash used to satisfy reserve requirements 3 .
Surplus vault cash 4
Total reserves 5
Required reserves
Excess reserve balances at Reserve Banks 6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks 7
Feb. 27
Mar. 13
Mar. 27
Apr. 10
Apr. 24
May 8
May 22
June 5
June 19
July 3
20,731
23,203
19,272
3,931
40,002
39,191
812
1,174
81
603
22,407
21,518
18,093
3,425
40,500
39,719
782
1,865
69'
1,224
21,458
22,353
18,828
3,148
40,286
39,477
810
1,289
98
839
23,073
21,274
18,126
3,148
41,199
40,642
557
1,775
121
1,295
23,520
21,880
18,764
3,116
42,284
41,400
884
1,158
131
766
22,751
21,327
18,182
3,145
40,933
40,234
699
953
169
396
22,032
22,357
19,068
3,289
41,100
40,248
852
1,434
160
369
22,610
21,692
18,473
3,220
41,082
40,260
823
1,518
171
914
23,861
21,688
18,724
2,964
42,585
41,861
724
1,123
171
914
23,087
23,029
19,549
3,481
42,637
41,458
1,179
1,167
142
612
1. Excludes required clearing balances and adjustments to compensate for
float.
2. Dates refer to the maintenance periods in which the vault cash can be used to
satisfy reserve requirements. Under contemporaneous reserve requirements,
maintenance periods end 30 days after the lagged computation periods in which
the balances are held.
3. Equal to all vault cash held during the lagged computation period by
institutions having required reserve balances at Federal Reserve Banks plus the
amount of vault cash equal to required reserves during the maintenance period at
institutions having no required reserve balances.
4. Total vault cash at institutions having no required reserve balances less the
amount of vault cash equal to their required reserves during the maintenance
period.
5. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
1.13
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy
reserve requirements less required reserves.
7. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
8. Before February 1984, data are prorated monthly averages of weekly
averages; beginning February 1984, data are prorated monthly averages of
biweekly averages.
NOTE. These data also appear in the Board's H.3 (502) release. For address, see
inside front cover.
FEDERAL FUNDS A N D REPURCHASE AGREEMENTS
Large Member Banks 1
Averages of daily figures, in millions of dollars
1985 week ending Monday
By maturity and source
May 20
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.
May 27
June 3
June 10
June 17
June 24
July 1
July 8
July 15
60,948
57,948
60,878
71,025'
67,155
60,567
58,209
68,283
64,586
28,373
8,583
27,378
29,995
9,936
26,803
28,822
12,702
26,897
32,686
8,428
25,487
33,019
8,134
26,465
32,298
9,063
25,282
31,173
8,244
24,718
33,003
8,408
22,106
32,320
9,459
25,570
9,626
9,547r
9,180'
8,870'
8,883
9,278
9,728
9,732
9,326
8,163
9,499
8,719
7,646'
10,135
8,758
7,572'
8,9%
8,701
7,696'
9,214
8,724
7,517
8,870
8,488
7,671
9,238
8,545
7,890
9,517
7,943
7,861
9,139
9,061
8,397
9,004
7,528
29,212
7,492
27,759
6,982
33,482'
7,92C
31,755
7,505
30,618
7,671
31,795
7,108
34,998
6,456
30,423
7,335
30,412
7,379
A6
DomesticNonfinancialStatistics • September 1985
1.14
FEDERAL RESERVE BANK INTEREST RATES
Percent per annum
Current and previous levels
Extended credit 2
Short-term adjustment credit
and seasonal credit 1
Federal Reserve
Bank
Rate on
7/29/85
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco...
m
1 Vi
Effective
date
Previous
rate
First 60 days
of borrowing
Rate on
7/29/85
Next 90 days
of borrowing
Previous
rate
Rate on
7/29/85
IVl
5/20/85
5/20/85
5/24/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
7Vi
7Vi-8
IVl
8
73/»-8
7V4
73/4
73/4
6
10
24
Feb. 5
7
Mar. 10
14
May 16
23
7V4-7V4
73/4
7V4
m
63/4
1976— Jan. 19
23
Nov. 22
26
5Vi-6
5 Vi
51/4-5'/!
5V4
5 Vi
5Vi
5V4
5'/4
1977— Aug. 30
31
Sept. 2
Oct. 26
5W53/4
5^4-53/4
53/4
6
5>/4
53/4
53/4
6
6-6 Vi
6Vi
6Vi-7
7
6Vi
6Vz
7
7
Effective date
In effect Dec. 31, 1973
1974— Apr. 25
30
Dec. 9
16
1975— Jan.
1978— Jan.
9
20
May 11
12
7V4
63/4-7!/4
63/4
6'/4-63/4
61/4
6-61/4
6
63/4
61/4
6V4
6
6
Effective date
July
3
10
Aug. 21
Sept. 22
Oct. 16
20
Nov. 1
3
July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
Feb. 15
19
May 29
30
June 13
16
Julv 28
29
Sept. 26
Nov. 17
Dec. 5
5
1. A temporary simplified seasonal program was established on Mar. 8, 1985,
and the interest rate was set at 8Vi percent at that time. On May 20 this rate was
lowered to 8 percent.
2. Applicable to advances when exceptional circumstances or practices involve
only a particular depository institution and to advances when an institution is
under sustained liquidity pressures. As an alternative, for loans outstanding for
more than 150 days, a Federal Reserve Bank may charge a flexible rate that takes
into account rates on market sources of funds, but in no case will the rate charged
be less than the basic rate plus one percentage point. Where credit provided to a
particular depository institution is anticipated to be outstanding for an unusually
prolonged period and in relatively large amounts, the time period in which each
rate under this structure is applied may be shortened. See section 201.3(b)(2) of
Regulation A.
3. Rates for short-term adjustment credit. For description and earlier data see
the following publications of the Board of Governors: Banking and Monetary
Rate on
7/29/85
Previous
rate
9
9 Vi
10
SV2
Range of rates in recent years
9
7-7'/4
7V«
73/4
8
8-8Vi
m
8 V2-9V1
9Vi
F.R.
Bank
of
N.Y.
71/4
m
73/4
8
ZVi
m
9 Vi
9 Vi
10
10
IOV2
10>/2
10VV-11
11
11-12
12
10^
11
11
12
12
12-13
13
12-13
13
13
13
12
12
11-12
11
11
11
10-11
10
10
10
11
12
13
13
14
11
12
12-13
13
13-14
9Vi
5/20/85
5/20/85
5/24/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
5/20/85
5/20/85
5/20/85
5/21/85
10
3
Range (or
level)—
All F.R.
Banks
IO-IOV2
Effective date
for current rates
Previous
rate
m
m
After 150 days
Effective date
Range (or
level)—
All F.R.
Banks
F.R.
Bank
of
N.Y.
1981— May 8
Nov. 2
6
Dec. 4
14
13-14
13
12
1982— July 20
23
Aug. 2
3
16
27
30
Oct. 12
13
Nov. 22
26
Dec. 14
15
17
llVi-12
11 Vi
11-tlVi
11
lOVi
10-10^
10
9Vi-10
9Vi
9-9 Vi
9
8Vi-9
8V4-9
SVi
llVi
im
u
11
10 Vi
1984— Apr.
9
13
Nov. 21
26
Dec. 24
m-9
9
8Vi-9
8Vi
8
9
9
m
m
8
1985— May 20
28
7W-8
IVl
7Vi
IVI
IVl
IVl
In effect July 29, 1985
14
13
13
12
10
10
9Vi
9 Vi
9
9
9
8V5
8 >A
Statistics, 1914-1941, and 1941-1970; Annual Statistical Digest, 1970-1979, 1980,
1981, and 1982.
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.
Policy Instruments
1.15
Al
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
Net
Effective date
demand2
$10 million-$100 million
$100 million-$400 million
Over $400 million
Time and savings2
Savings
7
9l/2
113/4
123/4
16'/4
12/30/76
12/30/76
12/30/76
12/30/76
12/30/76
3
3/16/67
3
Time 4
$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
3
m
1
3/16/67
1/8/76
10/30/75
6
2Vi
1
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
percent above the base used to calculate the marginal reserve in the statement
Type of deposit, and
deposit interval 5
Depository institution requirements
after implementation of the
Monetary Control Act 6
Percent
Effective date
Net transaction accounts7,8
$0-$29.8 million
Over $29.8 million
3
12
1/1/85
1/1/85
Nonpersonal time deposits9
By original maturity
Less than l'/2 years
l'/2 years or more
3
0
10/6/83
10/6/83
Eurocurrency
All types
3
11/13/80
liabilities
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 ail 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. Effective with the reserve maintenance
period beginning Jan. 1, 1985, the amount of the exemption is $2.4 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 of about three
years was completed on Feb. 2, 1984. 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;
effective Dec. 30, 1982, to $26.3 million; effective Dec. 29, 1983, to $28.9 million;
and effective Jan. 1, 1985, to $29.8 million.
9. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a beneficial interest is
held by a depositor that is not a natural person. Also included are certain
transferable time deposits held by natural persons, and certain obligations issued
to depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
NOTE. Required reserves must be held in the form of deposits with Federal
Reserve Banks or vault cash. Nonmembers may maintain reserve balances with a
Federal Reserve Bank indirectly on a pass-through basis with certain approved
institutions.
A8
DomesticNonfinancialStatistics • September 1985
1.16
MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions1
Percent per annum
Type of deposit
Commercial banks
Savings and loan associations and
mutual savings banks (thrift institutions) 1
In effect July 31, 1985
In effect July 31, 1985
Percent
1
2
3
4
Savings
Negotiable order of withdrawal accounts
Negotiable order of withdrawal accounts of $1,000 or more 2
Money market deposit account 2
Time accounts
5 7-31 days of less than $1,0004
6 7-31 days of $1,000 or more 2
7 More than 31 days
1. Effective Oct. 1, 1983, restrictions on the maximum rates of interest payable
by commercial banks and thrift institutions on various categories of deposits were
removed. For information regarding previous interest rate ceilings on all categories 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.
2. Effective Dec. 1, 1983, IRA/Keogh (HR10) Plan accounts are not subject to
minimum deposit requirements. Effective Jan. 1, 1985, the minimum denomination requirement was lowered from $2,500 to $1,000.
3. 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. Effective Jan. 1, 1985,
5 Vi
5V4
(3)
5Vi
Effective date
1/1/84
12/31/80
1/5/83
12/14/82
1/1/84
1/5/83
10/1/83
Percent
5Vi
5!/4
3
( )
5Vi
Effective date
7/1/79
12/31/80
1/5/83
12/14/82
9/1/82
1/5/83
10/1/83
the minimum denomination and average maintenance balance requirements was
lowered to $1,000. 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 $1,000, 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.
4. Effective Jan. 1, 1985, the minimum denomination requirement was lowered
from $2,500 to $1,000. Deposits of less than $1,000 issued to governmental units
continue to be subject to an interest rate ceiling of 8 percent.
Policy Instruments
1.17
A9
FEDERAL RESERVE OPEN MARKET TRANSACTIONS
Millions of dollars
1985
1984
Type of transaction
1982
1983
1984
Nov.
Jan.
Dec.
Apr.
Mar.
Feb.
May
U . S . GOVERNMENT SECURITIES
Outright transactions (excluding matched
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
7
8
9
17,067
8,369
0
3,000
18,888
3,420
0
2,400
20,036
8,557
0
7,700
4,463
0
0
0
3,410
0
0
0
0
2,668
0
1,600
2,976
214
0
400
916
554
0
500
6,026
0
0
0
274
417
0
800
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
312
0
17,295
-14,164
0
484
0
18,887
-16,553
87
1,126
0
16,354
-20,840
0
146
0
1,348
-3,363
0
182
0
771
-966
0
0
0
596
-625
0
0
0
1,987
-2,739
0
961
0
1,299
0
0
245
0
1,129
-1,463
0
0
0
2,443
-2,945
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
1,797
0
-14,524
11,804
1,896
0
-15,533
11,641
1,638
0
-13,709
16,039
830
0
594
1,763
0
0
-771
966
0
0
-5%
625
0
0
-1,902
1,645
465
0
-1,299
0
846
0
-1,114
1,463
0
0
-2,101
1,940
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
388
0
-2,172
2,128
890
0
-2,450
2,950
536
300
-2,371
2,750
335
0
-1,893
850
0
0
0
0
0
100
0
0
0
0
-54
600
0
0
0
0
108
0
-16
0
0
0
42
600
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
307
0
-601
234
383
0
-904
1,962
441
0
-275
2,052
164
0
-49
750
0
0
0
0
0
0
0
0
0
0
-30
493
0
0
0
0
0
0
0
0
0
0
-384
405
22
23
24
All maturities
Gross purchases
Gross sales
Redemptions
19,870
8,369
3,000
22,540
3,420
2,487
23,476
7,553
7,700
5,938
0
0
3,591
0
0
0
2,768
1,600
2,976
214
400
2,343
554
500
7,321
0
0
274
417
800
25
26
Matched transactions
Gross sales
Gross purchases
543,804
543,173
578,591
576,908
808,986
810,432
51,904
55,516
63,674
61,537
66,668
66,367
57,076
57,283
54,718
57,288
65,845
64,001
78,870
77,597
27
28
Repurchase agreements
Gross purchases
Gross sales
130,774
130,286
105,971
108,291
139,441
139,019
12,063
12,063
3,888
2,261
20,225
21,852
19,584
17,077
4,922
7,429
11,540
4,088
21,716
29,168
8,358
12,631
8,908
9,549
3,080
-6,295
5,077
1,351
12,931
-9,668
0
0
189
0
0
292
0
0
256
0
0
90
0
0
0
0
0
0
0
0
17
0
0
0
0
0
0
8
18,957
18,638
8,833
9,213
1,205
817
698
698
506
119
1,463
1,851
2,428
2,048
445
825
983
452
1,336
1,867
130
-672
132
-90
388
388
363
-380
531
-540
36 Repurchase agreements, net
1,285
-1,062
-418
0
0
0
0
0
0
0
37 Total net change in System Open Market
Account
9,773
10,897
6,116
9,459
3,468
-6,683
5,440
971
13,462
-10,208
29 Net change in U.S. government securities
FEDERAL AGENCY OBLIGATIONS
Outright transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase agreements
34
Gross sales
35 Net change in federal agency obligations
*
BANKERS ACCEPTANCES
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.
A10
1.18
DomesticNonfinancialStatistics • September 1985
FEDERAL RESERVE BANKS
Condition and Federal Reserve N o t e Statements
Millions of dollars
Account
May 29
Wednesday
End of month
1985
1985
June 12
June 5
June 19
June 26
May
Apr.
June
Consolidated condition statement
ASSETS
11,091
4,618
491
11,091
4,618
481
11,090
4,618
489
11,090
4,618
482
11,090
4,618
481
11,091
4,618
561'
11,091
4,618
490
11,090
4,618
474
1,419
0
3,549
0
688
0
3,806
0
776
0
1,525
0
1,765
0
1,338
0
1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4
To depository institutions
5
Other
Acceptances—Bought outright
6
Held under repurchase agreements
Federal agency obligations
7
Bought outright
8
Held under repurchase agreements
U.S. government securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total bought outright 1
13 Held under repurchase agreements
14 Total U.S. government securities
0
0
0
0
0
0
0
0
8,363
0
8,363
10
8,303
0
8,303
0
8,303
0
8,372
531
8,363
0
8,303
0
73,905
67,066
23,743
164,714
0
164,714
73,257
67,066
23,743
164,066
1,174
165,240
76,007
67,066
23,743
166,816
0
166,816
74,622
67,066
23,743
165,431
0
165,431
75,473
67,066
23,743
166,282
0
166,282
75,651
67,269
23,540
166,460
7,453
173,913
73,436
67,066
23,743
164,245
0
164,245
78,301
67,066
23,743
169,110
0
169,110
15 Total loans and securities
174,496
177,162
175,807
177,540
175,361
184,341
174,373
178,751
8,278
581
7,557
581
7,304
582
7,782
584
6,316
583
9,730
577
6,865
581
6,277
585
4,026
7,313
4,058
7,333
4,069
7,228
4,072
7,511
4,075
7,617
4,007
8,473
4,058
7,066
4,149
7,695
210,894
212,881
211,187
213,679
210,141
223,398'
209,142
213,639
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
LIABILITIES
169,219
169,574
170,155
169,795
169,713
165,331'
169,056
170,178
22
23
24
25
22,867
3,853
223
530
27,803
1,975
211
444
26,205
1,778
207
432
26,157
3,541
168
567
23,875
3,892
243
349
21,962
19,305
348
324
23,468
1,933
205
557
27,236
3,288
310
321
26 Total deposits
27,473
30,433
28,622
30,433
28,359
41,939
26,163
31,155
8,116
2,335
6,783
2,320
6,343
2,305
7,265
2,423
5,925
2,381
9,476
2,614
7,681
2,359
6,015
2,315
207,143
209,110
207,425
209,916
206,378
219,360r
205,259
209,663
1,714
1,626
411
1,713
1,626
432
1,717
1,626
419
1,716
1,626
421
1,721
1,626
416
1,702
1,626
710
1,713
1,626
544
1,721
1,626
629
33 Total liabilities and capital accounts
210,894
212,881
211,187
213,679
210,141
223,398'
209,142
213,639
34 MEMO: Marketable U.S. government securities held in
custody for foreign and international account
120,328
122,203
120,826
122,401
121,759
116,712
119,753
121,276
21 Federal Reserve notes
Deposits
To 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
Federal Reserve note statement
35 Federal Reserve notes outstanding
36
LESS: Held by bank
Federal Reserve notes, net
37
Collateral held against notes net:
38 Gold certificate account
39 Special drawing rights certificate account
40
Other eligible assets
41
U.S. government and agency securities
198,229
29,010
169,219
198,487
28,913
169,574
198,882
28,727
170,155
199,819
30,024
169,795
200,227
30,514
169,713
196,490
31,159'
165,331'
198,021
28,965
169,056
200,234
30,056
170,178
11,091
4,618
0
153,510
11,091
4,618
0
153,865
11,090
4,618
0
154,447
11,090
4,618
0
154,087
11,090
4,618
0
154,005
11,091
4,618
0
149,622'
11,091
4,618
0
153,347
11,090
4,618
0
154,470
42 Total collateral
169,219
169,574
170,155
169,795
169,713
165,331'
169,056
170,178
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. 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.
NOTE: Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover.
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holdings
Millions of dollars
Type and maturity groupings
Wednesday
End of month
1985
1985
May 29
June 5
June 12
June 19
June 26
Apr. 30
May 31
June 28
1 Loans—Total
2 Within 15 days
3
16 days to 90 days
4
91 days to 1 year
1,419
1,363
56
0
3,549
3,465
84
0
688
620
68
0
3,806
3,792
14
0
776
759
17
0
1,525
1,438
87
0
1,765
1,700
65
0
1,338
937
401
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
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
164,714
7,975
35,578
47,935
37,132
15,281
20,813
165,240
8,784
35,562
47,758
37,042
15,281
20,813
166,816
7,585
39,303
46,792
37,042
15,281
20,813
165,431
5,042
38,375
48,878
37,042
15,281
20,813
166,282
7,230
37,122
48,794
37,042
15,281
20,813
173,913
12,305
38,406
50,568
37,204
14,638
20,792
164,245
4,256
38,379
48,474
37,042
15,281
20,813
169,110
7,604
39,719
48,651
37,042
15,281
20,813
8,363
162
566
1,918
4,089
1,229
399
8,373
89
678
1,931
4,053
1,223
399
8,303
0
778
1,871
4,023
1,232
399
8,303
120
658
1,871
4,023
1,232
399
8,303
159
619
1,871
4,023
1,232
399
8,903
613
533
1,991
4,083
1,284
399
8,363
162
566
1,918
4,089
1,229
399
8,303
159
677
1,813
4,023
1,232
399
9 U.S. government securities—Total
10 Within 15 days 1
11
16 days to 90 days
1? 91 days to 1 year
n
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.
A12
1.20
DomesticNonfinancialStatistics • September 1985
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS A N D MONETARY BASE
Billions of dollars, averages of daily figures
Item
1981
Dec.
1982
Dec.
1983
Dec.
1984
1984
Dec.
Nov.
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
Dec.
Jan.
May'
June
Feb.
Mar.
Apr.
40.43'
40.47'
40.71'
41.32
42.18
33.85' 35.9<y 38.24' 39.14' 38.88'
37.69' 38.5(y 39.29' 39.95' 39.94'
37.77' 38.23' 38.89' 39.53' 39.71'
197.67' 199.03' 200.21' 202.05' 202.95'
39.39'
40.26'
39.97'
203.56'
39.99
40.52
40.52
205.35
40.97
41.64
41.27
207.66
Seasonally adjustec
ADJUSTED FOR
1 Total reserves2
1985
32.10
34.28
31.46
31.61
31.78
158.10
33.65
33.83
33.78
170.14
36.14
39.08r
35.36 35.90'
35.37 38.5C
35.58 38.23'
185.49 199.03'
38.47'
39.08'
39.64'
Not seasonally adjusted
6 Total reserves2
7
8
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
32.82
35.01
32.18
32.33
32.50
160.94
34.37
34.56
34.51
173.17
40.13
38.69
40.13
40.70
39.88
40.07
41.25
40.64
41.96
36.09 36.94
36.09 39.55
36.30 39.28
188.76 202.02
34.07
37.91
37.99
198.22
36.94
39.55
39.28
202.02
39.31
40.36
39.%
200.93
38.59
39.39
38.97
199.54
38.47
39.53
39.30
200.86
39.93
40.80
40.52
203.42
39.31
39.84
39.84
204.54
40.76
41.42
41.05
207.99
36.86
N O T ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS 5
11 Total reserves2
12
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
41.92
41.85
41.29
41.44
41.61
170.47
41.22
41.41
41.35
180.52
1. Figures incorporate adjustments for discontinuities associated with the
implementation of the Monetary Control Act and other regulatory changes to
reserve requirements. To adjust for discontinuities due to changes in reserve
requirements on reservable nondeposit liabilities, the sum of such required
reserves is subtracted from the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted from the actual series.
2. Total reserves not adjusted for discontinuities consist of reserve balances
with Federal Reserve Banks, which exclude required clearing balances and
adjustments to compensate for float, plus vault cash used to satisfy reserve
requirements. Such vault cash consists of all vault cash held during the lagged
computation period by institutions having required reserve balances at Federal
Reserve Banks plus the amount of vault cash equal to required reserves during the
maintenance period at institutions having no required reserve balances.
3. Extended credit consists of borrowing at the discount window under the
terms and conditions established for the extended credit program to help
depository institutions deal with sustained liquidity pressures. Because there is
not the same need to repay such borrowing promptly as there is with traditional
short-term adjustment credit, the money market impact of extended credit is
similar to that of nonborrowed reserves.
4. The monetary base not adjusted for discontinuities consists of total reserves
plus required clearing balances and adjustments to compensate for float at Federal
Reserve Banks and the currency component of the money stock less the amount
38.89
40.70
39.23
40.70
41.12
40.27
40.49
41.65
41.05
42.35
38.12 37.51
38.12 40.09
38.33 39.84
192.36 202.59
34.62
38.54
38.54
198.77
37.51
40.09
39.84
202.59
39.73
40.88
40.38
201.35
38.98
39.83
39.37
199.94
38.90
40.03
39.73
201.29
40.33
40.77
40.91
203.81
39.72
40.45
40.25
204.94
41.15
41.88
41.45
208.39
of vault cash holdings of thrift institutions that is included in the currency
component of the money stock plus, for institutions not having required reserve
balances, the excess of current vault cash over the amount applied to satisfy
current reserve requirements. After the introduction of contemporaneous reserve
requirements (CRR), currency and vault cash figures are measured over the
weekly computation period ending Monday.
Before CRR, all components of the monetary base other than excess reserves
are seasonally adjusted as a whole, rather than by component, and excess
reserves are added on a not seasonally adjusted basis. After CRR, the seasonally
adjusted series consists of seasonally adjusted total reserves, which include
excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted
currency component of the money stock and the remaining items seasonally
adjusted as a whole.
5. Reflects actual reserve requirements, including those on nondeposit liabilities, with no adjustments to eliminate the effects of discontinuities associated
with implementation of the Monetary Control Act or other regulatory changes to
reserve requirements.
NOTE. Latest monthly and biweekly figures are available from the Board's
H.3(502) statistical release. Historical data and estimates of the impact on
required reserves of changes in reserve requirements are available from the
Banking Section, Division of Research and Statistics, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551.
Monetary and Credit Aggregates
1.21
A13
M O N E Y STOCK, LIQUID ASSETS, A N D D E B T M E A S U R E S
Billions of dollars, averages of daily figures
1985
item
1981
Dec.
1982
Dec.
1983
Dec.
1984
Dec.
Mar.
Apr.
May
June
Seasonally adjusted
1
2
3
4
5
Ml
M2
M3
L
Debt
441.8
1,794.4
2,235.8
2,596.5
4,309.5
480.8
1,954.9
2,446.8
2,857.4
4,709.7
528.0
2,188.8
2,701.8
3,176.4
5,224.6
558.5
2,371.7
2,995.0
3,543.8
5,953.2
572.1
2,429.2
3,055.3r
3,624.1'
6,129.6'
574.9'
2,427.3'
3,055.9'
3,626.3'
6,191.4'
581.6
2,444.6'
3,075.7'
n.a.
6,251.9
591.2
2,473.1
3,103.7
n.a.
n.a.
6
7
8
9
Ml components
Currency 2
Travelers checks 3
Demand deposits 4
Other checkable deposits 5
124.0
4.4
235.2
78.2
134.3
4.3
238.6
103.5
148.4
4.9
243.5
131.3
158.7
5.2
248.6
146.0
161.3
5.4
251.9
153.6
161.7
5.5
252.5
155.3
163.1'
5.5
255.7
157.3
164.5
5.7
260.7
160.3
10
11
Nontransactions components
In M26
In M3 only 7
1,352.6
441.4
1,474.0
492.0
1,660.8
512.9
1,813.2
623.3
1,857.0
626.1'
1,852.3'
628.7'
1,863.(K
631.1'
1,882.0
630.6
12
13
Savings deposits 9
Commercial Banks
Thrift institutions
158.6
185.8
163.5
194.4
133.4
173.6
122.6
166.0
120.3
168.4
119.6
168.3
120.4
169.0
121.9
170.3
14
15
Small denomination time deposits 9
Commerical Banks
Thrift institutions
347.8
475.8
379.8
471.7
350.7
433.8
387.0
498.6
382.8
495.8
387.6
497.8
389.9
502.2'
390.7
504.2
16
17
Money market mutual funds
General purpose and broker/dealer
Institution-only
150.6
38.0
185.2
51.1
138.2
43.2
167.5
62.7
177.6
59.5
176.2'
59.5
172.2
63.5
175.4
67.1
18
19
Large denomination time deposits 10
Commercial Banks"
Thrift institutions
247.5
54.6
262.0
66.2
228.9
101.9
264.4
151.8
269.5
154.2
272.9'
154.3
272.0'
156.0
267.7
156.3
20
21
Debt components
Federal debt
Non-federal debt
825.9
3,483.6
979.3
3,730.4
1,172.8
4,051.8
1,367.0
4,586.2'
1,413.5
4,716.2'
1,429.0
4,762.4'
1,446.6
4,805.3
n.a.
n.a.
576.2
2,440.7'
3,073.6'
n.a.
6,223.1
592.2
2,476.8
3,106.4
n.a.
n.a.
Not seasonally adjusted
22
23
24
25
26
Ml
M2
M3
L
Debt
452.2
1,798.7
2,243.4
2,604.7
4,304.7
491.8
1,959.6
2,454.4
2,862.1
4,703.8
539.7
2,194.0
2,709.2
3,180.1
5,218.8
570.4
2,376.7
3,002.2
3,545.1
5,947.3'
564.9
2,429.4'
3,057.0'
3,631.5'
6,100.8'
581.6
2,439.2'
3,067.8'
3,639.5'
6,160.9'
27
28
29
30
Ml components
Currency 2
Travelers checks 3
Demand deposits 4
Other checkable deposits 5
126.2
4.1
243.4
78.5
136.5
4.0
247.2
104.1
150.5
4.6
252.2
132.4
160.9
4.9
257.4
147.2
159.8
5.1
246.3
153.6
161.2
5.2
255.1
160.1
163.2'
5.4
251.4
156.2
165.2
6.0
259.7
161.3
31
32
Nontransactions
components
M26
M3 only7
1,346.5
444.7
1,467.8
494.8
1,654.2
515.2
1,806.2
625.5
1,864.6
627.6'
1,857.6'
628.7'
1,864.5'
632.9'
1,884.6
629.6
33
34
Money market deposit accounts
Commercial banks
Thrift institutions
n.a.
.0
26.3
16.9
230.5
148.7
267.1
147.9
294.0
163.9
295.9
164.4
298.2'
165.4'
307.3
167.6
35
36
Savings deposits 8
Commercial Banks
Thrift institutions
157.5
184.7
162.1
193.2
132.2
172.5
121.4
164.9
120.6
168.2
120.9
169.3
121.7
170.2
123.2
172.7
37
38
Small denomination time deposits 9
Commercial Banks
Thrift institutions
347.7
475.5
380.1
471.7
351.1
434.2
387.6
499.4
383.7
496.2
383.9
495.6
385.2
495.7'
386.3
497.5
39
40
Money market mutual funds
General purpose and broker/dealer
Institution-only
150.6
38.0
185.2
51.1
138.2
43.2
167.5
62.7
177.6
59.5
176.2'
59.5
172.2
63.5
175.4
67.1
41
42
Large denomination time deposits 10
Commercial Banks 11
Thrift institutions
251.7
54.4
265.2
65.9
230.8
101.4
265.9
151.1
269.8
153.3
270.4'
153.4
269.9'
156.0'
267.2
155.8
43
44
Debt components
Federal debt
Non-federal debt
823.0
3,481.7
976.4
3,727.4
1,170.2
4,048.6
1,364.7
4,582.5
1,412.0
4,688.8'
1,427.1
4,733.8'
For notes see following page.
1,443.8
4,779.4
n.a.
n.a.
A14
DomesticNonfinancialStatistics • September 1985
NOTES TO TABLE 1.21
1. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at all commercial banks other than those due to domestic banks, the U.S.
government, and foreign banks and official institutions less cash items in the
process of collection and Federal Reserve float; and (4) other checkable deposits
(OCD) consisting of negotiable order of withdrawal (NOW) and automatic transfer
service (ATS) accounts at depository institutions, credit union share draft
accounts, and demand deposits at thrift institutions. The currency and demand
deposit components exclude the estimated amount of vault cash and demand
deposits respectively held by thrift institutions to service their OCD liabilities.
M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs)
issued by all commercial banks and overnight Eurodollars issued to U.S. residents
by foreign branches of U.S. banks worldwide, MMDAs, savings and smalldenomination time deposits (time deposits—including retail RPs—in amounts of
less than $100,000), and balances in both taxable and tax-exempt general purpose
and broker/dealer money market mutual funds. Excludes individual retirement
accounts (IRA) and Keogh balances at depository institutions and money market
funds. Also excludes all balances held by U.S. commercial banks, money market
funds (general purpose and broker/dealer), foreign governments and commercial
banks, and the U.S. government. Also subtracted is a consolidation adjustment
that represents the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposits.
M3: M2 plus large-denomination time deposits and term RP liabilities (in
amounts of $100,000 or more) issued by commercial banks and thrift institutions,
term Eurodollars held by U.S. residents at foreign branches of U.S. banks
worldwide and at all banking offices in the United Kingdom and Canada, and
balances in both taxable and tax-exempt, institution-only money market mutual
funds. Excludes amounts held by depository institutions, the U.S. government,
money market funds, and foreign banks and official institutions. Also subtracted is
a consolidation adjustment that represents the estimated amount of overnight RPs
and Eurodollars held by institution-only money market mutual funds.
L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term
Treasury securities, commercial paper and bankers acceptances, net of money
market mutual fund holdings of these assets.
Debt: Debt of domestic nonfinancial sectors consists of outstanding credit
market debt of the U.S. government, state and local governments, and private
nonfinancial sectors. Private debt consists of corporate bonds, mortgages, consumer credit (including bank loans), other bank loans, commercial paper, bankers
acceptances, and other debt instruments. The source of data on domestic
nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt
data are on an end-of-month basis.
2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of
commercial banks. Excludes the estimated amount of vault cash held by thrift
institutions to service their OCD liabilities.
3. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. Travelers checks issued by depository institutions are included in
demand deposits.
4. Demand deposits at commercial banks and foreign-related institutions other
than those due to domestic banks, the U.S. government, and foreign banks and
official institutions less cash items in the process of collection and Federal
Reserve float. Excludes the estimated amount of demand deposits held at
commercial banks by thrift institutions to service their OCD liabilities.
5. Consists of NOW and ATS balances at all depository institutions, credit
union share draft balances, and demand deposits at thrift institutions. Other
checkable deposits seasonally adjusted equals the difference between the seasonally adjusted sum of demand deposits plus OCD and seasonally adjusted demand
deposits. Included are all ceiling free "Super NOWs," authorized by the
Depository Institutions Deregulation committee to be offered beginning Jan. 5,
1983.
6. Sum of overnight RPs and overnight Eurodollars, money market fund
balances (general purpose and broker/dealer), MMDAs, and savings and small
time deposits, less the consolidation adjustment that represents the estimated
amount of demand deposits and vault cash held by thrift institutions to service
their time and savings deposits liabilities.
7. Sum of large time deposits, term RPs and term Eurodollars of U.S.
residents, money market fund balances (institution-only), less a consolidation
adjustment that represents the estimated amount of overnight RPs and Eurodollars held by institution-only money market funds.
8. Savings deposits exclude MMDAs.
9. Small-denomination time deposits—including retail RPs— are those issued
in amounts of less than $100,000. All individual retirement accounts (IRA) and
Keogh accounts at commercial banks and thrifts are subtracted from small time
deposits.
10. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
11. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
NOTE: Latest monthly and weekly figures are available from the Board's H.6
(508) release. Historical data are available from the Banking Section, Division of
Research and Statistics, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Monetary and Credit Aggregates
1.22
A15
B A N K DEBITS A N D DEPOSIT TURNOVER
Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates.
1984
1985
Dec.
Jan.
Feb.
Mar.
Apr/
May
Seasonally adjusted
DEBITS TO
2
Demand deposits
1 All insured banks
2 Major New York City banks
3 Other banks
4 ATS-NOW accounts 3
5 Savings deposits 4
80,858.7
34,108.1
46,966.5
761.0
679.6
90,914.4
37,932.9
52,981.5
1,036.2
720.3
109,642.3
47,769.4
61,873.1
1,405.5
741.4
137,512.0
62,341.0
75,171.0
1,677.5
486.0
140,678.6
64,474.7
76,203.9
1,552.0
501.3
143,281.5
63,157.0
80,124.5
1,618.6
499.8
139,608.3
62,523.7
77,084.6
1,567.0
539.2
156,513.2
70,621.4
85,891.8
1,689.3
589.0
149,252.8
66,394.3
82,858.4
1,771.1
636.4
285.8
1,116.7
185.9
14.4
4.1
324.2
1,287.6
211.1
14.5
4.5
379.7
1,528.0
240.9
15.6
5.4
453.4
1,903.0
277.8
16.3
4.0
468.6
2,008.6
284.2
14.6
4.2
471.4
1,902.2
295.9
15.0
4.2
456.3
1,967.0
281.1
14.4
4.6
515.4
2,183.9
316.5
15.4
5.0
484.6
2,079.6
300.2
16.1
5.4
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 2
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 3
Savings deposits 4
11
12
13
14
15
16
Demand deposits 2
All insured banks
Major New York City banks
Other banks
ATS-NOW accounts 3
MMDA 5
Savings deposits 4
Not seasonally adjusted
DEBITS TO
81,197.9
34,032.0
47,165.9
737.6
91,031.8
38,001.0
53,030.9
1,027.1
672.9
720.0
286.4
1,114.2
186.2
14.0
325.0
1,295.7
211.5
14.4
4.1
4.5
109,517.6
47,707.4
64,310.2
1,397.0
567.4
742.0
140,166.0
64,498.9
75,667.1
1,625.4
899.7
470.6
148,880.1
68,203.1
80,677.0
1,838.9
1,103.9
544.7
129,297.2
57,337.4
71,959.8
1,524.4
980.9
455.5
143,154.3
64,188.9
78,965.4
1,624.7
1,032.5
552.9
151,536.1
67,422.3
84,113.8
1,946.1
1,221.4
644.4
151,342.3
67,249.3
84,093.0
1,775.5
1,146.7
621.1
379.9
1,510.0
240.5
15.5
2.8
5.4
447.1
1,910.8
270.5
15.4
3.4
3.9
486.0
2,025.9
295.9
17.1
4.0
4.6
437.2
1,780.6
273.0
14.3
3.4
3.9
480.9
1,990.7
297.5
14.9
3.5
4.7
498.1
2,138.6
308.4
17.2
4.2
5.4
505.5
2,205.8
312.7
16.2
3.9
5.2
DEPOSIT TURNOVER
Demand deposits 2
17 All insured banks
18 Major New York City banks
19 Other banks
20 ATS-NOW accounts 3
71 MMDA 5
22 Savings deposits 4
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.
These data also appear on the Board's G.6 (406) release. For address, see inside
front cover.
A16
1.23
Domestic Financial Statistics • September 1985
LOANS A N D SECURITIES
All Commercial Banks 1
Billions of dollars; averages of Wednesday figures
1984
July
Aug.
Sept.
1985
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Seasonally adjusted
1 Total loans and securities2
2 U.S. government securities
3 Other securities
4 Total loans and leases 2
5 Commercial and industrial
Bankers acceptances held 3 ..
6
Other commercial and
7
industrial
8
U.S. addressees 4
9
Non-U.S. addressees 4 ....
10 Real estate
11 Individual
12 Security
13 Nonbank financial
institutions
14 Agricultural
15 State and political
subdivisions
16 Foreign banks
17 Foreign official institutions . . .
18 Lease financing receivables...
19 All other loans
1,652.6
1,662.1
1,674.8
1,682.8
1,701.0
1,714.8
1,724.0
1,742.3
1,758.9
1,765.8
1,785.3
1,799.1
256.4
139.5
1,256.7
455.0
6.2
257.1
140.8
1,264.2
458.1
5.8
258.0
141.9
1,274.9
460.0
5.4
257.0
141.5
1,284.3
463.0
5.6
259.4
141.1
1,300.6
467.1
6.0
260.2
139.9
1,314.7
468.1
5.2
260.1
142.4
1,321.5
468.4
5.0
265.8
140.8
1,335.6
473.4
6.1
266.9
138.7
1,353.3
480.4
6.4
261.1
140.1
1,364.6
480.9
5.4
265.9
142.1
1,377.3
483.3
4.9
266.6
144.5
1,388.0
483.6
4.7
448.8
437.2
11.7
358.3
236.3
28.0
452.3
440.6
11.6
361.2
238.5
26.1
454.6
443.5
11.1
364.7
241.3
28.8
457.3
446.7
10.6
367.7
243.5
30.3
461.1
450.7
10.3
371.8
246.7
30.2
462.9
453.3
9.6
375.6
251.0
31.5
463.4
453.8
9.7
377.9
254.6
31.9
467.2
457.1
10.2
382.1
257.7
31.6
474.1
463.8
10.3
385.8
261.9
32.8
475.5
465.3
10.3
389.9
265.5
35.1
478.4
468.7
9.6
393.8
268.7
37.5
478.9
469.8
9.1
397.4
271.4
40.0
31.4
40.6
30.8
40.6
31.2
40.7
31.1
40.6
31.2
40.5
31.4
40.3
31.2
40.2
30.9
40.2
30.6^
40.3
31.2
40.1
31.5
39.8
31.2
39.3
40.4
12.5
9.3
14.5
30.6
41.2
12.2
9.4
14.8
31.4
41.7
11.7
8.9
15.0
30.9
41.2
11.7
8.5
15.1
31.6
42.1
11.9
8.4
15.3
35.5
44.0
11.5
8.3
15.5
37.4
46.9
11.4
7.9
15.6
35.4
46.6
11.5
7.9
15.8
38.0
46.8
11.2
7.7
16.1
39.5
47.1
10.8
7.8
16.4
39.8
47.4
10.6
7.8
16.7
40.1
47.4
10.3
7.6
16.9
42.7
Not seasonally adjusted
20 Total loans and securities2
1,646.7
1,656.1
1,673.2
1,684.0
1,701.9
1,725.8
1,732.0
1,740.4
1,755.0
1,766.0
1,781.4
1,800.0
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
24 Commercial and industrial....
25
Bankers acceptances held 3 ..
26
Other commercial and
industrial
27
U.S. addressees 4
Non-U.S. addressees 4 ....
28
29 Real estate
Individual
30
Security
31
Nonbank financial
32
institutions
33 Agricultural
34
State and political
subdivisions
35
Foreign banks
Foreign official institutions . . .
36
i/
Lease financing receivables...
38 All other loans
256.2
138.2
1,252.4
454.3
6.0
255.5
140.4
1,260.2
456.1
5.6
255.7
141.3
1,276.2
459.9
5.3
254.1
140.9
1,289.0
463.8
5.5
255.2
141.2
1,305.5
467.3
5.9
256.9
141.5
1,327.4
471.2
5.7
260.1
143.3
1,328.7
470.3
5.1
266.8
141.0
1,332.6
472.9
6.0
269.0
138.9
1,347.1
480.0
6.3
266.6
139.8
1,359.7
481.2
5.5
268.0
142.7
1,370.7
481.9
4.9
270.3
144.2
1,385.5
482.1
4.8
448.2
436.5
11.7
357.7
234.7
26.6
450.4
438.8
11.6
361.4
238.3
25.4
454.6
443.3
11.3
365.8
242.3
27.7
458.3
447.2
11.1
368.9
245.3
30.2
461.4
450.5
372.8
248.4
31.7
465.5
455.0
10.5
376.2
254.0
35.2
465.2
455.4
9.8
378.6
257.0
33.0
466.9
457.2
9.7
381.7
257.4
30.8
473.7
463.9
9.8
384.7
259.7
32.2
475.7
466.2
9.5
388.6
263.2
35.0
477.0
467.8
9.2
392.8
266.5
36.0
477.2
468.3
8.9
396.9
269.5
39.9
31.4
41.4
40.4
30.9
41.4
41.2
31.3
41.5
41.7
31.0
41.2
41.2
31.1
40.6
42.1
31.5
40.0
44.0
31.3
39.6
46.9
30.7
39.4
46.6
30.6
39.3
46.8
31.3
39.4
47.1
31.3
39.7
47.4
31.2
39.8
47.4
12.3
9.3
14.4
30.0
11.9
9.4
14.7
29.5
11.9
8.9
14.9
30.3
12.0
8.5
15.0
31.8
12.2
8.4
15.1
35.6
12.2
8.3
15.5
39.3
11.7
7.9
15.8
36.6
11.4
7.9
16.0
37.8'
11.0
7.7
16.3
38.7
10.5
7.8
16.4
39.2
10.3
7.8
16.7
40.3
10.0
7.6
16.9
44.3
1. Data are prorated averages of Wednesday estimates for domestically chartered insured banks, based on weekly sample reports and quarterly universe
reports. For foreign-related institutions, data are averages of month-end estimates
based on weekly reports from large U.S. agencies and branches and quarterly
reports from all U.S. agencies and branches, New York investment companies
majority owned by foreign banks, and Edge Act corporations owned by domestically chartered and foreign banks.
11.0
2. Excludes loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the 50 states and the District of Columbia.
NOTE. These data also appear in the Board's G.7 (407) release. For address, see
inside front cover.
Commercial
1.24
Banking Institutions
A17
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 1
Monthly averages, billions of dollars
1984
1985
Source
July
Total nondeposit funds
Seasonally adjusted 2
Not seasonally adjusted
Federal funds, RPs, and other
borrowings from nonbanks 3
Seasonally adjusted
3
4
Not seasonally adjusted
5 Net balances due to foreign-related
institutions, not seasonally
adjusted
1
2
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
100.3
99.9
103.5
105.7
106.5
107.0
107.9
109.6
112.0
117.5
108.5
111.1
102.2'
104.6
113.8
117.2
116.8
119.2
105.0
108.2
111.7'
116.9'
112.4
114.7
134.5
134.0
139.3
141.5
141.6
142.1
141.4
143.1
145.0
150.5
140.5
143.1
138.8'
141.1
146.8'
150.2
147.2
149.7'
138.8'
141.9
142.0
147.2
146.9
149.2
-34.2
-35.8
-35.1
-33.5
-33.1
-32.0
-36.5
-33.0
-30.4
-33.7
-30.3'
-34.4
-33.1
71.2
38.1
-35.0
72.8
37.7
-35.2
71.5
36.3
-34.2
69.8
35.6
-32.7
68.3
35.6
-31.4
69.0
37.6
-35.0
71.4
36.5
-31.7
70.5
38.8
-29.7
71.4
41.7
-32.6
75.0
42.4
-29.7'
44.9'
-32.6
76.6
43.9
-1.1
51.9
50.8
-.8
51.6
50.8
.1
51.7
51.8
.7
50.8
51.5
-.4
50.7
50.4
-.6
52.0
51.4
-1.6'
53.C
51.4
-1.2'
54^
52.7
-.8'
53.4'
52^
-1.2'
51.8'
50.7'
-.6'
52.4
51.8
-1.8
53.7
51.9
77.5
74.6
79.9
79.6
81.4
79.4
82.0
81.2
84.0
87.0
81.1
81.1
82.3
82.2
90.1
91.1
92.0
92.0
85.4
86.0
85.5
88.3
86.5
86.3
12.8
11.9
13.1
10.3
16.0
17.5
8.0
11.0
17.3
10.4
16.1
12.5
14.7
18.5
13.0
15.8
11.8
12.8
14.6
15.4
22.6
20.9
17.4
14.9
314.8
313.7
314.2
315.6
315.4
316.8
321.4
322.2
323.0
322.9
325.8
327.3
324.8
325.6
325.4
324.9
329.9
330.3
332.6'
330.0
331.0
328.9
326.6
326.1
MEMO
6 Domestically chartered banks' net
positions with own foreign
branches, not seasonally
adjusted 4
Gross due from balances
7
8 Gross due to balances
9 Foreign-related institutions' net
positions with directly related
institutions, not seasonally
adjusted 3
10 Gross due from balances
11 Gross due to balances
Security RP borrowings
12 Seasonally adjusted®
13 Not seasonally adjusted
U.S. Treasury demand balances 7
14 Seasonally adjusted
15 Not seasonally adjusted
Time deposits, $100,000 or more 8
16 Seasonally adjusted
17 Not seasonally adjusted
1. Commercial banks are those in the 50 states and the District of Columbia
with national or state charters plus agencies and branches of foreign banks, 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. 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
7A.&
banks, term federal funds, overdrawn due from bank balances, loan RPs, and
participations in pooled loans.
4. Averages of daily figures for member and nonmember banks.
5. Averages of daily data.
6. Based on daily average data reported by 122 large banks.
7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
8. Averages of Wednesday figures.
NOTE. These data also appear in the Board's G. 10 (411) release. For address see
inside front cover.
A18
1.25
DomesticNonfinancialStatistics • September 1985
A S S E T S A N D L I A B I L I T I E S OF C O M M E R C I A L B A N K I N G I N S T I T U T I O N S
Last-Wednesday-of-Month Series
Billions of dollars
1984
1985
Account
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
1,784.5
376.2
243.5
132.7
20.0
1,388.4
127.1
1,261.2
455.2
361.8
240.0
204.2
1,798.3
377.2
243.4
133.8
20.9
1,400.2
123.3
1,276.9
459.8
366.6
243.3
207.3
1,822.7
375.2
241.2
134.0
22.5
1,424.9
126.1
1,298.8
467.7
369.8
247.1
214.2
1,822.7
374.4
240.4
133.9
21.9
1,426.4
122.6
1,303.8
468.7
374.4
249.6
211.1
1,864.0
377.5
242.5
134.9
22.9
1,463.7
126.9
1,336.8
476.8
377.7
255.5
226.8
1,853.8
381.0
244.9
136.1
24.2
1,448.7
125.2
1,323.4
469.8
380.2
257.4
216.1
1,873.4
382.0
248.0
134.1
27.6
1,463.7
128.6
1,335.1
476.5
382.5
258.1
218.0
1,880.5
383.3
250.9
132.5
23.7
1,473.5
125.9
1,347.6
482.7
386.0
260.4
218.4
1,895.9
383.4
250.0
133.4
23.5
1,489.0
130.7
1,358.3
481.5
389.8
264.2
222.8
1,905.1'
389.8'
254.0
135.8'
23.5
1,491.8
123.8
1,368.0
482.8
394.9'
267.3'
223.0
1,921.2
391.1
254.6
136.5
23.1
1,507.0
123.7
1,383.2
482.2
398.7
270.9
231.4
177.3
17.4
22.2
60.7
181.0
18.0
21.6
63.2
188.0
18.1
21.4
70.2
188.4
20.4
23.9
66.5
201.9
20.5
23.3
75.9
187.8
20.9
21.9
66.9
189.2
19.6
21.8
68.8
183.4
19.8
21.3
63.9
187.3
22.9
21.3
64.1
202.(K
20.7
23.3
76.5
190.0
22.0
22.2
68.5
29.5
47.5
30.8
47.4
32.0
46.3
30.9
46.7
34.5
47.7
30.9
47.3
32.2
46.7
31.6
46.8
30.1
48.9
35.1'
46.5'
31.2
46.2
ALL COMMERCIAL BANKING
INSTITUTIONS 1
1 Loans and securities
2
Investment securities
U.S. government securities
3
4
Other
Trading
account assets
5
6 Total loans
7
Interbank loans
Loans excluding interbank
8
Commercial and industrial
9
Real estate
10
11
Individual
All other
12
13 Total cash assets
14 Reserves with Federal Reserve Banks
15 Cash in vault
16 Cash items in process of collection . . .
17 Demand balances at U.S. depository
institutions
18 Other cash assets
19 Other assets
20 Total assets/total liabilities and capital . . .
21
22
23
24
25
26
27
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
190.6
196.8
201.6
190.1
196.8
191.7
195.4
188.5
188.7
183.4'
189.7
2,152.4
2,176.1
2,212.2
2,201.2
2,262.6
2,233.3
2,257.9
2,252.4
2,272.0
2,290.5'
2,300.9
1,539.0
440.0
365.1
734.0
301.5
169.7
142.1
1,549.9
442.3
364.9
742.7
307.1
172.9
146.2
1,578.9
462.7
371.1
745.0
314.3
175.1
144.0
1,578.2
453.1
378.1
747.0
298.8
179.4
144.8
1,631.2
491.1
386.3
753.8
304.1
181.1
146.2
1,604.3
456.8
400.0
747.5
306.5
173.7
148.8
1,617.8
459.2
406.8
751.8
308.8
182.2
149.2
1,625.6
457.6
409.8
758.2
300.6
176.9
149.2
1,636.4
465.3
409.4
761.7
309.8
175.3
150.5
1,659.2
479.9
418.0
761.3'
304.9
175.6'
150.8'
1,657.7
473.8
424.7
759.2
312.6
179.3
151.3
255.1
255.4
256.3
255.2
256.9
261.9
269.5
268.4
266.4
268.9
270.3
141.0
142.7
141.5
141.1
143.4
143.2
140.2
138.7
140.6
144.3'
143.9
1,688.4
369.1
238.5
130.7
20.0
1,299.4
97.6
1,201.8
414.5
358.0
239.8
189.6
1,707.4
369.8
238.4
131.5
20.9
1,316.6
99.9
1,216.7
418.7
362.3
243.1
192.5
1,728.5
367.9
236.1
131.8
22.5
1,338.0
103.3
1,234.7
423.0
365.5
246.9
199.3
1,726.7
367.5
235.8
131.6
21.9
1,337.3
96.1
1,241.2
424.7
369.1
249.4
198.0
1,765.4
370.5
237.9
132.6
22.9
1,372.1
102.8
1,269.3
430.2
372.1
255.3
211.7
1,759.6
373.7
240.2
133.5
24.2
1,361.7
100.6
1,261.2
425.7
375.1
257.2
203.1
1,774.6
374.7
243.2
131.5
27.6
1,372.3
100.9
1,271.4
431.5
377.3
257.9
204.8
1,781.9
376.6
246.6
130.0
23.7
1,381.6
99.9
1,281.6
435.5
380.9
260.2
205.0
1,796.4
376.7
246.0
130.6
23.5
1,396.2
103.1
1,293.1
436.0
384.5
263.9
208.7
1,809.2'
383.3
250.3
133.0'
23.5
1,402.5
100.4
1,302.1
435.9
389.4
267.1
209.6
1,825.3
384.6
250.9
133.7
23.1
1,417.6
100.3
1,317.3
435.3
393.3
270.6
218.1
165.9
16.7
22.2
60.5
169.0
17.4
21.6
63.0
176.6
17.1
21.4
69.9
176.8
19.7
23.9
66.3
190.3
19.2
23.3
75.6
175.7
20.2
21.9
66.7
177.8
18.7
21.8
68.5
172.5
19.2
21.3
63.7
175.7
22.3
21.3
63.9
191.C
19.6
23.2
76.2
179.0
20.9
22.2
68.1
28.2
38.3
29.4
37.7
30.7
37.5
29.4
37.5
32.9
39.3
29.5
37.5
30.9
37.9
30.3
38.0
28.7
39.5
33.7'
38.2
29.7
38.0
MEMO
28 U.S. government securities (including
trading account)
29 Other securities (including trading
account)
DOMESTICALLY CHARTERED
COMMERCIAL BANKS 3
30 Loans and securities
Investment securities
31
32
U.S. government securities
Other
33
34 Trading account assets
35 Total loans
36
Interbank loans
37
Loans excluding interbank
38
Commercial and industrial
39
Real estate
40
Individual
All other
41
42 Total cash assets
Reserves with Federal Reserve Banks
43
44
Cash in vault
45 Cash items in process of collection . . .
Demand balances at U.S. depository
46
institutions
47 Other cash assets
48 Other assets
49 Total assets/total liabilities and capital...
50
51
52
53
54
55
56
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
140.6
141.2
147.9
139.7
142.1
137.6
139.0
137.2
137.6
131.6'
137.8
1,995.0
2,017.6
2,053.1
2,043.2
2,097.8
2,072.9
2,091.4
2,091.7
2,109.7
2,131.8'
2,142.1
1,500.3
433.7
364.2
702.4
236.0
119.3
139.3
1,510.9
435.9
363.9
711.1
243.5
119.7
143.4
1,539.1
456.2
370.1
712.8
251.3
120.5
142.1
1,538.0
446.8
377.1
714.1
240.9
122.3
142.0
1,587.8
484.5
385.2
718.1
243.1
123.5
143.4
1,561.8
450.6
398.9
712.3
246.5
118.4
146.1
1,573.7
452.9
405.6
715.2
247.0
124.2
146.5
1,580.5
451.4
408.6
720.5
239.9
124.7
146.6
1,591.7
458.9
408.3
724.5
247.9
122.3
147.8
1,616.0
473.5
416.8'
725.8
245.6
122.(K
148.1'
1,614.5
467.3
423.5
723.7
253.3
125.7
148.6
1. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks. Edge Act and
Agreement corporations, and New York State foreign investment corporations.
2. Data are not comparable with those of later dates. See the Announcements
section of the March 1985 BULLETIN for a description of the differences.
3. Insured domestically chartered commercial banks include all member banks
and insured nonmember banks.
NOTE. Figures are partly estimated. They include all bank-premises subsidiaries and other significant majority-owned domestic subsidiaries. Loan and securities data for domestically chartered commercial banks are estimates for the last
Wednesday of the month based on a sample of weekly reporting banks and
quarter-end condition report data. Data for other banking institutions are estimates made for the last Wednesday of the month based on a weekly reporting
sample of foreign-related institutions and quarter-end condition reports.
Weekly Reporting Commercial Banks
A19
1.26 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1.4 Billion or More on
December 31, 1982, Assets and Liabilities
Millions of dollars, Wednesday figures
1985
Account
May 8
Cash and balances due from depository institutions
2 Total loans, leases and securities, net
3 U.S. Treasury and government agency
4 Trading account
5 Investment account, by maturity
6
One year or less
7
Over one through five years
8
Over five years
9
10 Trading account
11 Investment account
12
States and political subdivisions, by maturity
13
One year or less
14
Over one year
IS
Other bonds, corporate stocks, and securities
16 Other trading account assets .
17 Federal funds sold 1
18 To commercial banks
19 To nonbank brokers and dealers in securities
70 To others
21 Other loans and leases, gross 2
V
Other loans, gross 2
?3
Commercial and industrial 2
24
Bankers acceptances and commercial paper
25
All other
76
U.S. addressees
Non-U.S. addressees
27
28
Real estate loans 2
29
To individuals for personal expenditures
30
To depository and financial institutions
31
Commercial banks in the United States
32
Banks in foreign countries
33
Nonbank depository and other financial institutions
34
For purchasing and carrying securities
35
To finance agricultural production
36
To states and political subdivisions
37
To foreign governments and official institutions
38
All other
39 Lease financing receivables
40 LESS: Unearned income
41
Loan and lease reserve 2
4? Other loans and leases, net 2
43 All other assets
44 Total assets
45 Demand deposits
46 Individuals, partnerships, and corporations
47 States and political subdivisions
48
U.S. government
49 Depository institutions in United States
50 Banks in foreign countries
51
Foreign governments and official institutions
52 Certified and officers' checks
53 Transaction balances other than demand deposits
54 Nontransaction balances
55 Individuals, partnerships and corporations
56 States and political subdivisions
57 U.S. government
58 Depository institutions in the United States
59 Foreign governments, official institutions and banks
60 Liabilities for borrowed money
61
Borrowings from Federal Reserve Banks
6? Treasury tax-and-loan notes
63
All other liabilities for borrowed money 3
64 Other liabilities and subordinated note and debentures
65 Total liabilities
66 Residual (total assets minus total liabilities)4
Total loans and leases (gross) and investments adjusted 5
Total loans and leases (gross) adjusted 2 ' 5
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates—total 6
Commercial and industrial
Other
Nontransaction savings deposits (including MMDAs)
May 29
June 5
June 12
June 19
June 26
July 3
92,218
848,227
863,734
90,371
98,309
94,106'
98,124'
97,189'
95,014
92,874
853,778
844,944'
838,7%'
857,652'
848,180
85,607
15,533
70,073
20,937'
35,211'
13,925
48,533
4,263
44,270
39,213
4,998
34,214
5,057
3,061
51,786'
35,045'
10,904
5,837
666,795'
653,248'
255,635'
2,234
253,401'
248,000'
5,400
166,277'
119,000'
40,845'
11,513'
5,575'
23,756'
17,502
7,099'
30,002'
3,706'
13,182'
13,546
5,165
87,905
15,999
71,906
20,898
37,083
13,925
48,492
4,393
44,099
39,323
5,000
34,323
4,776
3,371
59,522
40,568
12,887
6,067
671,444
657,886
254,718
2,256
252,461
246,972
5,490
167,149
119,248
40,917
11,342
5,530
24,044
20,504
7,164
30,070
4,143
13,974
13,557
5,179
11,777
654,488
128,7%
88,037
15,854
72,183
20,434'
37,015'
14,734
48,891'
4,475
44,416
39,398
4,946
34,451'
5,018
2,866
87,417
14,918
72,499
20,689'
37,097'
14,713
49,552
4,984
44,568
39,566
5,220
34,346
5,002
3,55C
50,918
34,128
11,298
5,491
664,311'
650,709'
253.45C
2,287
251,162'
246,149'
5,014
88,146
16,327
71,819
20,718'
35,606'
15,494
49,094
4,304
44,790
39,822
5,255
34,567
4,968
4,205
86,043
16,075
69,%8
20,868
34,189
14,911
49,179
4,084
45,095
40,048
5,422
34,626
5,046
4,078
860,666
87,992
18,343
69,650
21,172
34,084
14,393
49,337
4,266
45,071
39,957
5,287
34,670
5,114
2,986
60,729
43,143
11,656
5,929
676,828
663,103
253,436
2,025
251,411
246,441
4,970
168,295
120,964
40,537
10,975
5,229
24,333
24,736
7,234
29,970
3,598
14,333
13,725
5,178
12,028
659,622
131,818
11,76c
649,870'
127,871'
54,476
37,052
11,605
5,818
667,65C
653,988'
254,202'
2,200
252,002'
246,556'
5,446
167,164'
119,536'
40,569
11,232'
5,489
23,848'
17,871
7,185'
30,064'
3,819'
13,577
13,662
5,190
11,786
650,674'
127,532'
1,057,099 1,080,883 1,066,583'
182,513' 200,380
184,706'
140,673'
138,662' 150,563
5,735
4,809
4,718
3,388
2,271
2,595
24,253
22,336'
21,731'
5,712
5,813
5,449
1,089
918
789
9,539
8,379
8,179
36,905
37,129
36,408
467,152
465,111' 466,160
429,835'
428,595' 429,373
24,678
25,051
24,478
345
357
338
9,334
9,243'
9,523'
2,430
2,386
2,458
208,024'
203,636' 206,946
830
70
3,831
12,104
15,946
11,126
187.62C 194,012
193,068'
%,204
94,391'
95,993'
992,284'
982,781 1,006,596
74,287
74,299
74,318
809,224'
672,023'
155,906
2,768
1,875
894
177,377
1. Includes securities purchased under agreements to resell.
2. Levels of major loan items were affected by the Sept. 26, 1984 transaction
between Continental Illinois National Bank and the Federal Deposit Insurance
Corporation. For details see the H.4.2 statistical release dated Oct. 5, 1984.
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.
4. This is not a measure of equity capital for use in capital adequacy analysis or
for other analytic uses.
May 22
838,857'
MEMO
67
68
69
70
71
72
73
May 15'
818,824
679,056
155,579
2,605
1,786
820
178,723
813,636'
673,842'
155,972'
2,586
1,758
827
179,052
167,272'
119,983'
39,974'
10,783'
5,157'
24,035'
14,924
7,188'
30.03C
3,745'
14,142
13,601
5,194
11,759
647,358'
124,347'
1,061,267
192,625'
146,211'
5,169
1,047
25,257'
5,347
813
8,780
36,401'
467,566'
430,697'
24,813
376
9,373'
2,307
194,905'
730
7,575
186,600'
95,416'
986,913
74,354
810,838'
670,318'
155,572'
2,601
1,721
880
179,792
63,878
56,653
44,665
37,933
12,347
11,303
7,417
6,866
669,451' 669,422
655,767' 655,708
253,938' 253,173
2,277
2,448
251,489' 250,8%
246,391' 245,885
5,098
5,010
167,236' 167,880
120,231' 120,444
39,576
40,146
10,416
10,45C
5,113
5,369'
24,326'
24,048
19,741
19,466
7,238
7,238
29,933'
30,156
3,613
3,602
13,978'
13,887
13,714
13,683
5,147
5,165
11,975'
12,030
652,329' 652,226
131,828' 130,237
1,086,669' 1,073,432 1,085,358
196,171
197,483' 194,403
148,239' 148,839
146,598
4,814
5,378
5,705
4,133
2,560
4,422
21,948
23.56C
24,102
5,202
6,008'
5,448
787
1,057
842
9,378
9,983
9,054
38,887
38,400
37,943
470,367
469,398
471,175
433,045' 434,061
434,986
24,219
24,161
23,939
376
340
366
9,395'
9,415
9,541
2,354
2,398
2,342
210,271' 199,467
210,439
2,919
123
3,212
2,130
2,563'
12,659
204,788' 197,215
194,568
95,645'
95,521
94,478
1,011,684' 998,158 1,010,205
74,985
75,274
75,152
819,659'
678,214'
155,276'
2,448
1,591
857
181,912'
817,027
677,726
155,405
2,413
1,593
819
182,728
823,754
683,439
155,595
2,300
1,492
808
183,050
100,547
86,212
87,993
15,657
16,339
70,555
71,654
21,812
21,930
34,765
35,590
13,978
14,134
49,387
48,902
4,455
4,388
44,998
44,446
39,949
39,360
5,192
4,824
34,757
34,536
5,049
5,086
3,095
4,362
55,004
62,530
36,350
43,720
12,521
12,583
6,071
6,290
671,742
677,209
657,984
663,256
252,237
253,957
2,335
2,656
249,902
251,302
244,900
246,234
5,002
5,068
168,713
168,811
121,669
122,282
39,879
40,403
11,018
10,534
5,110
5,409
23,750
24,460
19,618
21,977
7,351
7,282
30,008
30,015
3,609
3,473
14,969
14,986
13,758
13,953
5,219
5,193
11,993
12,070
654,530
659,946
129,772
138,158
1,070,218 1,102,439
190,798
206,263
143,760
153,774
5,268
5,550
2,350
4,456
22,159
25,513
5,701
5,114
772
898
10,788
10,956
36,671
39,412
469,761
471,662
433,818
436,616
23,781
23,017
397
402
9,466
9,392
2,299
2,235
201,470
216,998
118
3,472
14,467
15,230
186,885
198,2%
96,613
92,800
995,314 1,027,135
74,904
75,304
818,071
679,377
154,441
2,221
1,402
819
182,876
826,742
685,485
154,085
2,200
1,412
788
184,832
5. Exclusive of loans and federal funds transactions with domestic commercial
banks.
6. 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.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
A20
1.28
DomesticNonfinancialStatistics • September 1985
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 I N N E W Y O R K CITY A s s e t s and Liabilities
Millions of dollars, Wednesday figures
1985
Account
May 8
1 Cash and balances due from depository institutions
2 Total loans, leases and securities, net1
Securities
3
4
5 Investment account, by maturity
6
One year or less
7
Over one through five years
8
Over five years
9
10
11
Investment account
12
States and political subdivisions, by maturity
13
One year or less
14
Over one year
15
Other bonds, corporate stocks and securities
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
Loans and leases
Federal funds sold3
To commercial banks
To nonbank brokers and dealers in securities
To others
Other loans and leases, gross
Other loans, gross
Commercial and industrial
Bankers acceptances and commercial paper
All other
U.S. addressees
Non-U.S. addressees
Real estate loans
To individuals for personal expenditures
To depository and financial institutions
Commercial banks in the United States
Banks in foreign countries
Nonbank depository and other financial institutions
For purchasing and carrying securities
To finance agricultural production
To states and political subdivisions
To foreign governments and official institutions
All other
Lease financing receivables
LESS: Unearned income
Loan and lease reserve
Other loans and leases, net
All other assets 4
Total assets
Deposits
Demand deposits
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
ATS, NOW, Super NOW, telephone transfers)
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and banks
Liabilities for borrowed money
54
55
56
57
58
59
60
61
62 Treasury tax-and-loan notes
63
All other liabilities for borrowed money 5
64 Other liabilities and subordinated note and debentures
65 Total liabilities
66 Residual (total assets minus total liabilities)6
May 15
May 22
May 29
June 5
June 12
June 19
June 26
July 3
23,542
178,735
25,981
184,914
24,995
24,824
179,165
176,578
24,404
183,282
23,722
179,667
21,524
185,111
24,448
182,871
23,061
185,193
12,295
1,664
8,840
1,791
12,639
1,681
9,217
1,741
12,383
1,428
9,218
1,737
12,352
1,416
9,222
1,713
10,657
1,304
7,450
1,903
9,925
1,301
6,915
1,708
10,167
1,758
6,702
1,707
10,660
2,021
6,933
1,707
10,614
2,005
6,868
1,741
9,674
8,643
1,227
7,416
1,031
9,739
8,689
1,243
7,446
1,050
9,764
8,670
1,119
7,550
1,094
9,769
8,671
1,248
7,423
1,098
9,934
8,805
1,236
7,570
1,129
9,921
8,820
1,222
7,598
1,101
9,914
8,825
1,213
7,611
1,090
9,989
8,891
1,160
7,731
1,098
9,933
8,827
1,203
7,624
1,106
21,200
11,461
5,744
3,9%
140,473
138,007
62,552
656
61,897
61,227
670
25,800
16,789
11,938
2,493
2,169
7,276
8,680
435
7,944
816
3,051
2,466
1,446
3,462
135,566
64,733
267,010
24,037
12,137
7,818
4,082
143,419
140,950
62,048
712
61,336
60,611
725
25,986
16,770
11,607
2,188
2,013
7,406
11,397
426
7,973
1,191
3,552
2,468
1,450
3,469
138,499
66,882
277,777
21,578
11,736
5,694
4,147
140,365
137,781
61,765
720
61,045
60,350
695
26,043
16,795
11,704
2,150
2,025
7,528
8,704'
439
8,009
891
3,431
2,583
1,455
3,470
135,440
66,732
270,892
21,590
11,282
6,289
4,019
137,789
135,275
61,419
755
60,664
59,956
708
26,030
16,870
11,506
2,297
1,743
7,466
6,551
434
7,911
848
3,704
2,514
1,453
3,469
132,866
64,185
265,587
25,905
13,890
7,081
4,934
141,727
139,209
61,794
813
60,981
60,273
708
26,012
16,853
11,502
2,346
1,892
7,264
10,446
421
7,869
769
3,543
2,518
1,419
3,521
136,787
69,640
277,326
23,527
11,588
6,315
5,625
141,301
138,782
61,277
646
60,630
59,932
699
26,202
16,861
10,974
2,123
1,638
7,213
10,593
394
7,890
822
3,769
2,519
1,424
3,584
136,294
68,200
271,590
23,583
12,466
6,785
4,332
146,464
143,934
61,245
543
60,702
60,036
666
26,296
16,976
11,797
2,503
1,898
7,3%
14,895
396
7,855
851
3,622
2,530
1,426
3,591
141,447
70,480
277,116
25,256
13,910
6,872
4,474
141,997
139,460
60,662
721
59,941
59,277
664
26,261
17,052
11,354
2,515
1,749
7,090
10,642
405
7,897
888
4,299
2,537
1,460
3,571
136,966
65,644
272,963
26,126
14,326
7,500
4,300
143,565
140,906
60,907
948
59,959
59,281
678
26,351
17,143
11,1%
2,110
1,924
7,162
12,189
388
7,828
789
4,116
2,659
1,450
3,595
138,520
73,245
281,499
44,634
29,691
780
537
4,624
4,425
746
3,832
52,418
34,536
1,431
646
5,701
4,577
933
4,594
47,262
31,708
835
513
5,176
4,268
612
4,149
48,147
32,921
771
120
5,303
4,110
640
4,283
48,651
32,183
1,037
825
4,938
4,674
582
4,413
48,319
32,066
930
455
4,703
3,956
890
5,319
49,956
32,957
990
870
6,073
4,269
675
4,121
49,793
32,459
933
442
5,029
4,510
575
5,844
49,806
32,944
1,014
931
5,400
3,820
693
5,001
3,919
85,688
77,508
4,440
66
2,454
1,220
68,889
3,933
86,125
77,997
4,457
76
2,404
1,191
70,348
3,864
85,700
77,711
4,459
78
2,380
1,071
62,852
242,048
23,538
253,570
23,757
247,739
23,851
3,669
64,608
42,510
249,287
4,172
86,207
78,817
4,178
52
2,225
935
76,096
1 465
3,582
71,049
41,366
257,647
23,647
4,108
85,676
77,912
4,334
54
2,406
%9
72,281
2,615
3,425
66,241
41,201
253,221
23,894
3,931
84,775
77,224
4,266
58
2,273
953
68,277
2,895
67,454
41,390
4,044
86,158
78,378
4,373
50
2,336
1,020
73,830
1,980
645
71,205
40,887
4,076
85,925
78,246
4,373
56
2,263
988
68,686
4,144
64,744
40,341
243,470
3,850
85,950
77,717
4,553
80
2,436
1,163
69,653
2,615
2,486
64,552
40,529
247,244
23,676
23,852
170,204
148,056
33,829
167,922
145,800
33,267
171,986
151,395
33,500
170,964
151,118
33,010
175,159
155,077
32,694
171,477
150,828
32,010
173,803
153,256
32,815
23,539
254,216
23,562
169,689
147,720
33,842
175,509
153,131
34,001
1,746
61,107
41,485
477
68,209
40,732
MEMO
67 Total loans and leases (gross) and investments adjusted1-7
68 Total loans and leases (gross) adjusted 7
69 Time deposits in amounts of $100,000 or more
1. Excludes trading account securities.
2. Not available due to confidentiality.
3. Includes securities purchased under agreements to resell.
4. Includes trading account securities.
5. Includes federal funds purchased and securities sold under agreements to
repurchase.
6. Not a measure of equity capital for use in capital adequacy analysis or for
other analytic uses.
7. Exclusive of loans and federal funds transactions with domestic commercial
banks.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
Weekly Reporting Commercial Banks
1.30
A21
L A R G E W E E K L Y R E P O R T I N G U . S . B R A N C H E S A N D A G E N C I E S O F F O R E I G N B A N K S WITH A S S E T S O F
$750 M I L L I O N OR M O R E O N J U N E 30, 1980 A s s e t s and Liabilities •
Millions of dollars, Wednesday figures
1985
Account
May 8
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
Cash and due from depository institutions.
Total loans and securities
U.S. Treasury and govt, agency securities
Other securities
Federal funds sold1
To commercial banks in the 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 the United States .
Banks in foreign countries
Nonbank financial institutions
To foreign govts, and official institutions..
For purchasing and carrying securities ..
All other
Other assets (claims on nonrelated parties)..
Net due from related institutions
Total assets
Deposits or credit balances due to other
than directly related institutions....
Credit balances
Demand deposits
Individuals, partnerships, and
corporations
Other
Time and savings deposits
Individuals, partnerships, and
corporations
Other
Borrowings from other than directly
related institutions
Federal funds purchased 2
From commercial banks in the
United States
From others
Other liabilities for borrowed m o n e y . . . .
To commercial banks in the
United States
To others
Other liabilities to nonrelated parties
Net due to related institutions
Total liabilities
May 15
May 22
May 29
June 5
June 12
June 19
June 26
July 3
6,950
44,862
3,439
1,642
4,246
3,837
409
35,535
20,639
6,606
44,426
3,375
1,629
3,302
3,066
236
36,120
20,670
6,436
45,989
3,324
1,630
4,389
4,075
314
36,645
21,351
6,302
44,614
3,143
1,632
3,925
3,553
372
35,914
21,261
6,969
45,283
3,269
1,687
3,772
3,385
388
36,554
21,697
6,521
44,856
3,386
1,723
3,037
2,653
383
36,710
21,954
6,808
46,093
3,238
1,751
4,231
3,769
461
36,874
21,513
6,347
46,111
3,413
1,779
3,419
3,001
418
37,500
21,959
6,638
47,538
3,413
1,764
4,276
4,061
215
38,085
22,320
1,776
18,863
17,743
1,119
10,832
8,552
1,024
1,255
680
1,275
2,108
18,734
10,368
80,914
1,663
19,006
17,885
1,122
11,175
8,853
1,070
1,252
667
1,264
2,345
18,774
11,106
80,913
1,628
19,723
18,429
1,294
11,209
9,062
1,023
1,124
670
1,089
2,326
18,723
9,998
81,146
1,819
19,442
18,389
1,053
10,714
8,444
1,112
1,158
667
938
2,334
18,911
9,290'
79,11V
2,029
19,669
18,569
1,099
10,604
8,251
1,137
1,216
707
1,195
2,350
18,408
10,503
81,162
2,020
19,934
18,873
1,061
10,441
8,196
1,164
1,081
700
1,275
2,340
18,478
9,720
79,575
1,902
19,611
18,473
1,138
10,618
8,287
1,096
1,235
703
1,687
2,352
18,455
10,184
81,541
1,813
20,146
18,962
1,184
10,713
8,639
1,079
995
690
1,791
2,348
18,261
9,668
80,387
1,994
20,326
19,096
1,230
10,794
8,429
1,080
1,285
703
1,856
2,412
18,174
9,788
82,138
24,127
135
1,581
23,715
158
1,789
23,606
172
1,556
23,645'
193
1,627'
23,525
157
1,670
23,357
168
1,713
23,354
223
1,777
23,438
166
1,716
23,350
187
1,815
829
752
22,410
877
912
21,768
843
714
21,878
866
76C
21,825
854
816
21,699
883
830
21,477
910
866
21,354
906
810
21,556
998
817
21,348
17,774
4,636
17,274
4,493
17,458
4,420
17,390
4,435
16,969
4,730'
16,888
4,588
16,745
4,609
16,928
4,628
16,749
4,599
29,874
12,484
30,695
13,093
30,230
12,384
27,894
10,645
30,664
13,598
29,762
12,284
30,839
13,216
29,344
11,611
31,566
13,231
10,166
2,318
17,390
11,103
1,990
17,603
10,313
2,071
17,846
8,425
2,220
17,249
11,340
2,258
17,066
9,987
2,298
17,478
10,642
2,574
17,623
9,022
2,590
17,733
10,634
2,597
18,335
16,080
1,309
20,749
6,164
80,914
16,288
1,315
20,777
5,726
80,913
16,412
1,434
20,659
6,651
81,146
16,044
1,205
20,866
6,712
79,117'
15,850
1,215
20,317
6,657
81,162
16,127
1,350
20,376
6,080
79,575
16,254
1,368
20,374
6,974
81,541
16,333
1,401
20,129
7,476
80,387
16,982
1,352
20,224
6,998
82,138
32,472
27,391
32,506
27,502
32,851
27,897
32,617
27,842
33,646
28,690
34,007
28,898
34,037
29,048
34,470
29,279
35,049
29,872
MEMO
42 Total loans (gross) and securities adjusted 3
43 Total loans (gross) adjusted 3
• Levels of many asset and liability items were revised beginning Oct. 31,
1984. For details, see the H.4.2 (504) statistical release dated Nov. 23, 1984.
1. Includes securities purchased under agreements to resell.
2. Includes securities sold under agreements to repurchase.
3. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
NOTE. These data also appear in the Board's H.4.2 (504) release. For address,
see inside front cover.
A22
1.31
DomesticNonfinancialStatistics • September 1985
G R O S S D E M A N D D E P O S I T S Individuals, Partnerships, and Corporations'
Billions of dollars, estimated daily-average balances
Commercial banks
Type of holder
1983
1979 2
1980
1981
1982
Dec.
Dec.
Dec.
Dec.
Dec.
1984
Mar.
June'
1985
Sept.
Dec.
Mar. 5 ' p
1 All holders—Individuals, partnerships, and
corporations
302.3
315.5
288.9
291.8
293.5
279.3
286.3
288.8'
302.7'
288.3
2
3
4
5
6
27.1
157.7
99.2
3.1
15.1
29.8
162.8
102.4
3.3
17.2
28.0
154.8
86.6
2.9
16.7
35.4
150.5
85.9
3.0
17.0
32.8
161.1
78.5
3.3
17.8
31.7
150.3
78.1
3.3
15.9
30.8
156.7
78.7
3.5
16.7
30.4'
158.9^
31.7'
166.3
81.5'
3.6
19.7'
28.3
159.7
77.3
3.5
19.6
Financial business
Nonfinancial business
Consumer
Foreign
Other
19.9*
3.3
16.3'
Weekly reporting banks
1983
1979 3
1980
1981
1982
Dec.
Dec.
Dec.
Dec.
Dec. 4
7 All holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
Mar.
June
1985
Sept.
Dec.
Mar. 5 - P
139.3
147.4
137.5
144.2
146.2
139.2
145.3
145.3
157.1
147.9
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
26.7
74.3
31.9
2.9
8.4
24.2
79.8
29.7
3.1
9.3
23.5
76.4
28.4
3.2
7.7
23.6
79.7
29.9
3.2
8.9
23.7
79.2
29.8
3.2
9.3
25.3
87.1
30.5
3.4
10.9
22.6
82.8
29.3
3.3
9.9
1. Figures include cash items in process of collection. Estimates of gross
deposits are based on reports supplied by a sample of commercial banks. Types of
depositors in each category are described in the June 1971 BULLETIN, p. 466.
2. Beginning with the March 1979 survey, the demand deposit ownership
survey sample was reduced to 232 banks from 349 banks, and the estimation
procedure was modified slightly. To aid in comparing estimates based on the old
and new reporting sample, the following estimates in billions of dollars for
December 1978 have been constructed using the new smaller sample; financial
business, 27.0; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and
other, 15.1.
3. 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. 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
1984
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.
4. In January 1984 the weekly reporting panel was revised; it now includes 168
banks. Beginning with March 1984, estimates are constructed on the basis of 92
sample banks and are not comparable with earlier data. Estimates in billions of
dollars for December 1983 based on the newly weekly reporting panel are:
financial business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1;
other, 9.5.
5. Beginning March 1985, financial business deposits and, by implication, total
gross demand deposits have been redefined to exclude demand deposits due to
thrift institutions. Historical data have not been revised. The estimated volume of
such deposits for December 1984 is $5.0 billion at all insured commercial banks
and $3.0 billion at weekly reporting banks.
Financial Markets
1.32
A23
COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
19843
1979'
Dec.
Instrument
1980
Dec.
1982
Dec. 2
1981
Dec.
1983
Dec.
Dec.
1985
Jan.
Feb.
Mar.
Apr.
May
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
2
3
4
5
6
Financial companies 4
Dealer-placed paper5
Total
Bank-related (not seasonally
adjusted)
Directly placed paper6
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies 7
112,803
124,374
165,829
166,436
188,312
239,117
245,322
247,095
250,575
255,236
258,943
17,359
19,599
30,333
34,605
44,622
56,917
59,713
60,186
60,895
63,405
61,282
2,784
3,561
6,045
2,516
2,441
2,035
2,137
2,265
2,304
2,180
2,295
64,757
67,854
81,660
84,393
96,918
110,474
113,101
114,824
118,029
117,841
119,975
17,598
30,687
22,382
36,921
26,914
53,836
32,034
47,437
35,566
46,772
42,105
71,726
43,046
72,508
42,759
72,085
43,334
71,651
42,405
73,990
43,126
77,686
Bankers dollar acceptances (not seasonally adjusted) 8
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
45,321
54,744
69,226
79,543
78,309
75,470
72,273
76,109
73,726
72,825
69,689
9,865
8,327
1,538
10,564
8,963
1,601
10,857
9,743
1,115
10,910
9,471
1,439
9,355
8,125
1,230
10,255
9,065
1,191
10,060
8,839
1,220
10,623
9,726
897
10,473
9,166
1,340
9,666
8,263
1,403
9,265
7,578
1,687
704
1,382
33,370
776
1,791
41,614
195
1,442
56,731
1,480
• 949
66,204
418
729
68,225
0
671
64,543
0
679
61,603
0
761
64,779
0
737
65,865
0
728
65,965
0
575
58,739
10,270
9,640
25,411
11,776
12,712
30,257
14,765
15,400
39,060
17,683
16,328
45,531
15,649
16,880
45,781
16,975
15,859
42,635
16,733
15,445
40,095
17,115
15,881
43,113
16,124
15,179
42,423
16,417
14,875
41,533
16,670
14,214
38,805
1. A change in reporting instructions results in offsetting shifts in the dealerplaced and directly placed financial company paper in October 1979.
2. Effective Dec. 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. Correction of a previous misclassification of paper by a reporter has created
a break in the series beginning December 1983. The correction adds some paper to
nonfinancial and to dealer-placed financial paper.
4. 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.
5. Includes all financial company paper sold by dealers in the open market.
6. As reported by financial companies that place their paper directly with
investors.
7. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
8. Beginning October 1984, the number of respondents in the bankers acceptance survey will be reduced from 340 to 160 institutions—those with $50 million or
more in total acceptances. The new reporting group accounts for over 95 percent
of total acceptances activity.
PRIME RATE CHARGED BY BANKS on Short-Term Business Loans
Percent per annum
Effective Date
11.00
10.50
11.00
11.50
12.00
12.50
13.00
12.75
Average
rate
1984—Oct. 17
29
Nov. 9
28
Dec. 20
12.50
12.00
11.75
11.25
10.75
1985—Jan. 15
May 20
June 18
10.50
10.00
9.50
NOTE. These data also appear in the Board's H.15 (519) release. For address,
see inside front cover.
1983—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept
Oct.
Nov.
Dec.
11.16
1984—Jan..
Feb.
Mar.
11.00
11.00
10.98
10.50
10.50
10.50
10.50
10.50
10.89
11.00
11.00
11.00
11.00
11.21
Month
1984—Apr.
May
June
July
Aug.
Sept
Oct.
Nov.
Dec.
1985—Jan.
Feb.
Mar.
Apr.
May
June
A24
1.35
DomesticNonfinancialStatistics • September 1985
I N T E R E S T R A T E S M o n e y and Capital Markets
Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted.
1985
Instrument
1982
1983
1985, week ending
1984
Mar.
Apr.
May
June
May 31
June 7
June 14
June 21
June 28
MONEY MARKET RATES
1 Federal funds 1 ' 2
2 Discount window borrowing 1 ' 2 - 3
Commercial paper 4 - 5
3
1-month
4
3-month
5 6-month
Finance paper, directly placed 4 ' 5
6
1-month
7 3-month
8 6-month
Bankers acceptances 5 ' 6
9 3-month
10 6-month
Certificates of deposit, secondary market 7
11
1-month
12 3-month
13 6-month
14 Eurodollar deposits, 3-month 8
U.S. Treasury bills5
Secondary market 9
15
3-month
16
6-month
17
1-year
Auction average 10
18
3-month
19
6-month
20
1-year
12.26
11.02
9.09
8.50
10.22
8.80
8.58
8.00
8.27
8.00
7.97
7.81
7.53
7.50
7.60
7.50
7.75
7.50
7.62
7.50
7.13
7.50
7.46
7.50
11.83
11.89
11.89
8.87
8.88
8.89
10.05
10.10
10.16
8.74
8.90
9.23
8.31
8.37
8.47
7.80
7.83
7.88
7.34
7.35
7.38
7.46
7.48
7.54
7.37
7.33
7.31
7.41
7.40
7.40
7.13
7.16
7.21
7.45
7.49
7.60
11.64
11.23
11.20
8.80
8.70
8.69
9.97
9.73
9.65
8.70
8.67
8.65
8.29
8.26
8.27
7.74
7.71
7.69
7.31
7.19
7.16
7.44
7.42
7.39
7.34
7.19
7.17
7.38
7.22
7.21
7.07
7.00
6.99
7.47
7.36
7.26
11.89
11.83
8.90
8.91
10.14
10.19
8.88
9.20
8.33
8.42
7.77
7.81
7.32
7.34
7.43
7.47
7.30
7.25
7.36
7.38
7.19
7.23
7.42
7.52
12.04
12.27
12.57
13.12
8.96
9.07
9.27
9.56
10.17
10.37
10.68
10.73
8.73
9.02
9.60
9.32
8.35
8.49
8.75
8.74
7.83
7.91
8.08
8.13
7.38
7.44
7.58
7.60
7.49
1.5V
7.74
7.86
7.38
7.39
7.46
7.63
7.45
7.49
7.59
7.58
7.22
7.29
7.44
7.50
7.47
7.60
7.83
7.70
10.61
11.07
11.07
8.61
8.73
8.80
9.52
9.76
9.92
8.52
8.90
9.06
7.95
8.23
8.44
7.48
7.65
7.85
6.95
7.09
7.27
7.19
7.32
7.53
7.01
7.10
7.25
7.03
7.15
7.31
6.81
6.97
7.14
6.97
7.16
7.37
10.66
10.80
11.10
8.64
8.76
8.85
9.56
9.79
9.91
8.56
8.92
9.24
7.99
8.31
8.44
7.56
7.75
7.94
7.01
7.16
7.18
7.22
7.39
n.a.
7.03
7.16
n.a.
7.21
7.35
7.18
6.73
6.90
n.a.
7.06
7.24
n.a.
12.27
12.80
9.57
10.21
10.89
11.65
9.86
10.71
9.14
10.09
8.46
9.39
7.80
8.69
8.09
9.01
12.92
13.01
13.06
13.00
12.92
12.76
10.45
10.80
11.02
11.10
11.34
11.18
11.89
12.24
12.40
12.44
12.48
12.39
11.05
11.52
11.82
11.86
12.06
11.81
10.49
11.01
11.34
11.43
11.69
11.47
9.75
10.34
10.72
10.85
11.19
11.05
9.05
9.60
10.08
10.16
10.57
10.45
9.36
9.84
10.25
10.39
10.79'
10.68'
7.80
8.63
9 15
8.97
9.45
9.93
10.00
10.46
10.37
7.85
8.72
n SL
9.06
9.60
10.06
10.12
10.53
10.43
7.66
8.55
8 80
8.90
9.50
10.01
10.08
10.50
10.38
7.91
8.85
n a
9.27
9.85
10.32
10.43
10.77
10.60
12.23
10.84
11.99
11.78
11.42
10.96
10.36
10.58
10.27
10.33
10.29
10.56
10.86
12.46
11.66
8.80
10.17
9.51
9.61
10.38
10.10
9.18
10.18
9.77
8.95
9.95
9.42
8.52
9.54
9.01
8.24
9.03
8.69
8.30
9.30
8.81
8.15
8.90
8.60
8.25
9.05
8.66
8.25
9.05
8.69
8.30
9.10
8.80
14.94
13.79
14.41
15.43
16.11
12.78
12.04
12.42
13.10
13.55
13.49
12.71
13.31
13.74
14.19
13.13
12.56
12.91
13.36
13.69
12.89
12.23
12.69
13.14
13.51
12.47
11.72
12.30
12.70
13.15
11.70
10.94
11.46
11.98
12.40
12.01
11.27
11.82
12.24
12.69
11.71
10.93
11.50
12.04
12.36
11.66
10.88
11.48
11.97
12.32
11.63
10.86
11.36
11.91
12.37
11.80
11.09
11.52
12.02
12.56
15.49
12.73
13.81
13.17
12.75
12.25
11.62
11.78
11.57
11.50
11.71
11.62
12.53
5.81
11.02
4.40
11.59
4.64
10.97
4.37
10.75
4.37
10.60
4.31
10.05
4.21
10.25
4.23
10.07
4.17
10.10
4.23
9.95
4.26
10.07
4.19
CAPITAL MARKET RATES
21
22
23
24
2b
26
21
28
29
30
31
32
33
34
35
36
37
38
39
U.S. Treasury notes and bonds 11
Constant maturities 12
1-year
2-vear
2-Vi-year13
3-year
5-year
7-year
10-year
20-year
30-year
Composite 14
Over 10 years (long-term)
State and local notes and bonds
Moody's series 15
Aaa
Baa
Bond Buyer series 16
Corporate bonds
Seasoned issues 17
All industries
Aaa
Aa
A
Baa
A-rated, recently-offered utility
bonds 18
MEMO: Dividend/price ratio 19
40 Preferred stocks
41 Common stocks
1. Weekly and monthly figures are averages of all calendar days, where the
rate for a weekend or holiday is taken to be the rate prevailing on the preceding
business day. The daily rate is the average of the rates on a given day weighted by
the volume of transactions at these rates.
2. Weekly figures are averages for statement week ending Wednesday.
3. Rate for the Federal Reserve Bank of New York.
4. Unweighted average of offering rates quoted by at least five dealers (in the
case of commercial paper), or finance companies (in the case of finance paper).
Before November 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90—119 days, and 150179 days for finance paper.
5. Yields are quoted on a bank-discount basis, rather than an investment yield
basis (which would give a higher figure).
6. Dealer closing offered rates for top-rated banks. Most representative rate
(which may be, but need not be, the average of the rates quoted by the dealers).
7. Unweighted average of offered rates quoted by at least five dealers early in
the day.
8. Calendar week average. For indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
11. Yields are based on closing bid prices quoted by at least five dealers.
12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.
13. 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-'/2-year small saver certificates. (See table 1.16.)
14. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including several very low yielding "flower" bonds.
15. General obligations based on Thursday figures; Moody's Investors Service.
16. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
17. Daily figures from Moody's Investors Service. Based on yields to maturity
on selected long-term bonds.
18. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
19. Standard and Poor's corporate series. Preferred stock ratio based on a
sample of ten issues: four public utilities, four industrials, one financial, and one
transportation. Common stock ratios on the 500 stocks in the price index.
NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases.
For address, see inside front cover.
Financial Markets
1.36
STOCK MARKET
A25
Selected Statistics
1984
Indicator
1982
1983
1985
1984
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
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
Finance
5
6 Standard & Poor's Corporation (1941-43 = 10)1 . . .
7 American Stock Exchange 2
(Aug. 31, 1973 = 100)
68.93
78.18
60.41
39.75
71.99
119.71
92.63
107.45
89.36
47.00
95.34
160.41
92.46 95.09
108.01 110.44
85.63 86.82
46.44 49.02
89.28 92.94
160.50 164.82
95.85
110.91
87.37
49.93
95.28
166.27
94.85 99.11
109.05 113.99
88.00 94.88
50.58 51.95
95.29 101.34
164.48 171.61
104.73
120.71
101.76
53.44
109.58
180.88
103.92
119.64
98.30
53.91
107.59
179.42
104.66
119.93
96.47
55.51
109.39
180.62
107.00
121.88
99.66
57.32
115.31
180.94
109.52
124.11
105.79
59.61
118.44
188.89
282.62'
216.48
207.96 210.39
209.47
202.28 211.82
228.40
225.62
229.46
228.75
227.48
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
64,617
5,283
85,418
8,215
91,084 91,676
6,107 5,587
83,692
6,008
89,032 121,545
7,254 9,130
115,489 102,591
10,010
8,677
94,387
7,801
106,827
7,171
105,849
7,128
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers
3
11 Margin stock
12 Convertible bonds
13 Subscription issues
Free credit balances at brokers4
14 Margin-account
15 Cash-account
13,325
23,000
12,980
344
22,720
279
1
1
5,735
8,390
6,620
8,430
22,470 22,330
t
7,015
10,215
22,350
t
22,470 22,090
t
t
6,770
9,725
n.a.
n.a.
n.a.
6,580
8,650
6,7(XK
8,420
7,015
10,215
22,970
23,230
23,900
t
I
I
6,680
9,840
6,780
10,155r
6,910
9,230
24,300
•
6,865'
9,230
Margin-account debt at brokers (percentage distribution, end of period)
16 Total
17
18
19
20
21
22
By equity class (in percentJs
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
100.0
21.0
24.0
24.0
14.0
9.0
8.0
41.0
22.0
16.0
9.0
6.0
6.0
46.0
18.0
16.0
9.0
5.0
6.0
44.0
21.0
14.0
9.0
6.0
6.0
47.0
19.0
13.0
9.0
6.0
6.0
46.0
18.0
16.0
9.0
5.0
6.0
35.0
19.0
20.0
36.0
20.0
18.0
38.0
20.0
18.0
10.0
7.0
7.0
39.0
19.0
18.0
10.0
7.0
7.0
36.0
19.0
19.0
7.0
8.0
37.0
19.0
19.0
10.0
7.0
8.0
82,990
87,120
86,910
11.0
7.0
8.0
11.0
8.0
8.0
11.0
Special miscellaneous-account balances at brokers (end of period)
6
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
35,598
58,329
62.0
63.0
29.0
9.0
28.0
9.0
75,840 73,500r 73,904
75,840 79,600
81,830
81,930^
59.0
59.0
59.0
59.0
59.0
59.0
60.0
60.0
60.0
59.0
29.0
30.0
29.0
12.0
29.0
30.0
10.0
31.0
10.0
30.0
10.0
30.0
10.0
30.0
10.0
31.0
10.0
11.0
11.0
11.0
Margin requirements (percent of market value and effective date) 7
27 Margin stocks
28 Convertible bonds
29 Short sales
Mar. 11, 1968
June 8, 1968
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. Beginning July 1983, under the revised Regulation T, margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in April 1984, and margin credit at
broker-dealers became the total that is distributed by equity class and shown on
lines 17-22.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
May 6, 1970
65
50
65
Dec. 6, 1971
Nov. 24, 1972
Jan. 3, 1974
55
50
55
65
50
65
50
50
50
5. Each customer's equity in his collateral (market value of collateral less net
debit balance) is expressed as a percentage of current collateral values.
6. Balances that may be used by customers as the margin deposit required for
additional purchases. Balances may arise as transfers based on loan values of
other collateral in the customer's margin account or deposits of cash (usually sales
proceeds) occur.
7. Regulations G, T, and U of the Federal Reserve Board of Governors,
prescribed in accordance with the Securities Exchange Act of 1934, limit the
amount of credit to purchase and carry margin stocks that may be extended on
securities as collateral by prescribing a maximum loan value, which is a specified
percentage of the market value of the collateral at the time the credit is extended.
Margin requirements are the difference between the market value (100 percent)
and the maximum loan value. The term "margin stocks" is defined in the
corresponding regulation.
A26
1.37
DomesticNonfinancialStatistics • September 1985
SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1984
Account
1985
1982
July
Aug.
Nov.
Oct.
Sept.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Savings and loan associations
1
2
3
4
Assets
Mortgages
Cash and investment securities 1 . . . .
Other
5 Liabilities and net worth
6
7
8
9
10
11
Savings capital
Borrowed money
FHLBB
Other
Loans in process 2
Other
707,646 773,417 850,780 860,088 877,642 881,627 887,696 902,449 898,537
483,614 494,789 535,814 540,644 550,129 552,516 556,229 555,277 558,276
85,438 104,274 108,456 108,820 112,350 112,023 114,879 125,358 119,673
138,594 174,354 206,510 210,624 215,163 217,088 216,588 221,814 220,588
904,827 906,995'
559,263 563,376'
119,713 114,641'
225,851 228,978'
911,696
566,396
116,432
228, S68
898,537
898,086 904,827
906,995'
911,696
567,961 634,455 687,817 691,704 704,558 708,846 714,780 724,301 730,709
97,850 92,127 110,238 114,747 121,329 119,305 117,775 126,169 114,806
57,115
60,178 63,627 63,412 63,383 64,207 63,152
63,861
52,626
54,392 61,962
51,654
54,569 57,702
55,893
33,989 39,501
53,123
26,683
26,546
27,141
26,754
26,959
26,122
26,773
9,934
21,117
21,302
17,215
18,358
18,050
19,894
15,602
19,970 20,599
15,968
726,308 732,406
116,879 119,461
63,452 63,187
53,427 56,274
26,636 27,004
19,857 17,471
731,914'
118,655'
63,941'
54,714'
27,406'
20,539'
737,704
115,391
65,239
50,152
27,404
21,671
707,646
773,417
850,780
860,088
877,642
881,627
887,696
898,086
556,184
119,724
222,178
902,449
12 Net worth 3
26,233
30,867
32,755
33,038
33,705
33,582
33,839
34,764
34,664
35,042
35,489
35,887'
36,930
13 MEMO: Mortgage loan commitments
outstanding 4
18,054
32,996
43,878
41,182
40,089
38,530
37,856
34,841
33,305
34,217
35,889
36,269'
36,953
203,898 204,859
206,175 210,568' 210,469
212,509
103,654 104,340' 105,102
26,456 27,798' 28,000
105,869
28,530
15,098r
2,092'
43,888'
4,864'
12,488'
14,504
2,097
43,889
4,679
12,288
14,895
2,094
43,871
5,004
12,246
Mutual savings banks
5
174,197
193,535
199,128
200,722 201,445 203,274 204,499
94,091
16,957
97,356
19,129
100,091
23,213
101,211
24,068
101,621
24,535
102,704
24,486
102,953
24,884
102,895
24,954
103,393
25,747
9,743
2,470
36,161
6,919
7,855
15,360
2,177
43,580
6,263
9,670
15,457
2,037
42,682
4,8%
10,752
15,019
2,055
42,632
4,981
10,756
14,965
2,052
42,605
4,795
10,872
15,295
2,080
43,003
4,605
11,101
15,034
2,077
43,361
4,795
11,395
14,643
2,077
42,962
4,954
11,413
14,628
2,067
43,351
4,140
11,533
22 Liabilities
174,197
193,535
199,128
200,722
201,445 203,274 204,499 203,898 204,859
206,175 210,568' 210,469
212,509
23 Deposits
24
Regular 8
25
Ordinary savings
155,196
152,777
46,862
96,369
2,419
8,336
9,235
172,665
170,135
38,554
95,129
2,530
10,154
10,368
174,823
171,740
35,511
98,410
3,083
13,269
10,495
176,085
172,990
34,787
101,270
3,095
13,604
10,498
177,345
174,296
34,564
102,934
3,049
12,979
10,488
178,624
175,727
34,221
104,151
2,897
13,853
10,459
180,073
177,130
34,009
104,849
2,943
13,453
10,535
180,616
177,418
33,739
104,732
3,198
12,504
10,510
181,062
177,954
33,413
104,098
3,108
12,931
10,619
181,849 185,197' 184,478
178,791 181,742' 180,804
33,413 33,715' 33,211
103,536 105,204' 104,527
3,058
3,455'
3,689
13,387 14,393' 14,959
10,670 10,72C 10,803
185,802
182,113
33,457
104,843
3,674
15,546
10,913
1,285
2,387
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
14 Assets
15
16
17
18
19
20
21
Loans
Mortgage
Other
Securities
U.S. government 6
State and local government
Corporate and other 7
Cash
Other assets
27
Other
28 Other liabilities
29 General reserve accounts
30 MEMO: Mortgage loan commitments
outstanding 9
14,917
2,069
43,063
4,423
11,593
n.a.
n.a.
n.a.
n.a.
Life insurance companies
31 Assets
Securities
33
34
35
37
38
39
40
41
42
United States 10
State and local
Foreign 11
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
588,163 654,948
684,573 694,082
699,996
56,263
57,552
54,688
36,499 50,752
33,886 35,586
16,529 28,636 32,654
9,221
9,357
8,664
9,236
9,986
12,745
13,020
12,798
11,306
12,130
287,126 322,854 341,802 348,614 350,512
231,406 257,986 281,113 283,673 285,543
64,941
64,969
60,689
55,720 64,868
141,989 150,999 154,299 155,438 155,802
24,117 24,685
24,019
20,264 22,234
54,517 54,551
54,441
52,961
54,063
56,894
55,324
55,133
48,571
54,046
705,827 712,271 720,807
730,120
65,367
59,825 62,678
64,683
40,288 41,970
42,183
37,594
9,385
9,895
9,344
9,757
13,005
12,887
13,289
12,956
352,059 354,815 354,902 364,617
287,607 291,021 290,731 297,666
66,951
63,794 64,171
64,452
156,064 156,691 157,283 157,583
25,467
24,947
25,985
26,343
54,571
54,442
54,574
54,610
58,049 63,344 61,768
58,358
734,920 741,442
747,683
67,111 66,641
67,265
43,929 43,317
43,840
9,772
9,956
9,770
13,653
13,226 13,554
367,411 370,582 374,904
298,381 302,072 305,945
69,030 68,510
68,959
158,052 158,956 160,250
26,567 26,911
27,202
54,472
54,523 54,466
61,256 63,886 63,590
n.a.
Credit unions 12
43 Total assets/liabilities and capital . . . .
45
State
48
State
50
51
Federal (shares)
State (shares and deposits)
69,585
45,493
24,092
81,961
54,482
27,479
90,145
61,163
28,982
90,503
61,500
29,003
91,651
62,107
29,544
91,619
61,935
29,684
92,521
62,690
29,831
93,036
63,205
29,831
94,646
64,505
30,141
96,183
65,989
30,194
98,646
67,799
30,847
101,268
68,903
32,365
104,992
71,342
33,650
43,232
27,948
15,284
62,990
41,352
21,638
50,083
32,930
17,153
74,739
49,889
24,850
57,286
38,490
18,796
82,402
56,278
26,124
58,802
39,578
19,224
82,135
56,205
25,930
59,874
40,310
19,564
83,172
56,734
26,438
60,483
40,727
19,756
83,129
56,655
26,474
62,170
41,762
20,408
84,000
57,302
26,698
62,561
42,337
20,224
84,348
57,539
26,809
62,662
42,220
20,442
86,047
58,820
27,227
62,393
42,283
20,110
86,048
59,914
26,134
62,936
42,804
20,132
88,560
61,758
26,802
64,341
43,414
20,927
91,275
62,867
28,408
65,298
44,042
21,256
95,278
66,680
28,598
Financial Markets
1.37
A27
Continued
1985
1984
Account
1982
1983
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
FSLIC-insured federal savings banks
6,859
3,353
64,969
38,698
10,436
15,835
83,989
49,996
13,184
20,809
87,209
52,039
13,331
21,839
82,174
48,841
12,867
20,466
87,743
51,554
13,615
22,574
94,536
55,861
14,826
23,849
98,559
57,429
16,001
25,129
98,747
57,667
15,378
25,702
106,657 109,720
60,938 62,608
17,511 18,237
28,208 28,875
110,511'
63,519'
17,923'
29,069'
113,739
64,822
18,886
30,031
56 Liabilities and net worth
6,859
64,969
83,989
87,209
82,174
87,743
94,536
98,559
98,747
106,657 109,720
57
58
59
60
61
62
5,877
53,227
7,477
4,640
2,837
1,157
3,108
66,227
12,060
6,897
5,163
1,807
3,895
68,443
12,863
7,654
5,209
1,912
3,991
65,079
11,828
6,600
5,228
1,610
3,657
70,080
11,935
6,867
5,068
1,896
3,832
76,167
11,937
7,041
4,896
2,259
4,173
79,572
12,798
7,515
5,283
1,903
4,286
80,091
12,372
7,361
5,011
1,982
4,302
52
53
54
55
Assets
Mortgages
Cash and investment securities'
Other
Savings and capital
Borrowed money
FHLBB
Other
Other
Net worth 3
85,632
14,079
8,023
6,056
2,356
4,590
110,511'
113,739
88,001
14,860
8,491
6,369
2,174
4,685
88,205'
15,187'
8,849'
6,338'
2,400'
4,719'
90,414
15,220
8,925
6,295
3,032
5,073
MEMO
63 Loans in process 2
64 Mortgage loan commitments
outstanding 4
1,264
1,901
1,895
1,505
1,457
1,689
1,738
1,685
1,747
1,919
2,010'
2,068
2,151
3,988
3,860
2,970
2,925
3,298
3,234
3,510
3,646
3,752
3,937'
4,229
1. Holdings of stock of the Federal Home Loan Banks are in "other assets."
2. Beginning in 1982, loans in process are classified as contra-assets and are
not included in total liabilities and net worth. Total assets are net of loans in
process.
3. Includes net undistributed income accrued by most associations.
4. Excludes figures for loans in process.
5. The National Council reports data on member mutual savings banks and on
savings banks that have converted to stock institutions, and to federal savings
banks.
6. Beginning April 1979, includes obligations of U.S. government agencies.
Before that date, this item was included in "Corporate and other."
7. Includes securities of foreign governments and international organizations
and, before April 1979, nonguaranteed issues of U.S. government agencies.
8. Excludes checking, club, and school accounts.
9. 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.
10. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under "Business" securities.
11. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
12. As of June 1982, data include only federal or federally insured state credit
unions serving natural perons.
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 Council of Savings Institutions 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 data.
A28
1.38
DomesticNonfinancialStatistics • September 1985
FEDERAL FISCAL AND FINANCING OPERATIONS
Millions of dollars
Calendar year
Fiscal
year
1982
Type of account or operation
Fiscal
year
1983
Fiscal
year
1984
1983
HI
U.S. budget
1 Receipts 1
2 Outlays 1
3 Surplus, or deficit ( - )
Trust funds
4
5
Federal funds 2 3
Off-budget entities (surplus, or deficit
6 Federal Financing Bank outlays
7 Other 3 4
1984
H2
HI
1985
Apr.
May
June
617,766
728,375
-110,609
5,456
-116,065
600,562
795,917
-195,355
23,056
-218,410
666,457
841,800
-175,343
30,565
-205,908
306,331
396,477
-90,146
22,680
-112,822
306,584
406,849
-100,265
7,745
-108,005
341,808
420,700
-78,892
18,080
-96,971
94,593
82,228
12,365
5.182
7.183
39,794
80,245
-40,451
6,699
-47,149
72,151
71,506
645
10,268
-9,623
-14,142
-3,190
-10,404
-1,953
-7,277
-2,719
-5,418
-528
-3,199
-1,206
-2,813
-838
-1,108
128
-1,192
-354
-1,573
-441
-127,940
-207,711
-185,339
-96,094
-104,670
-84,884
11,386
-41,997
-1,369
134,993
212,425
170,817
102,538
84,020
80,592
17,036
16,333
11,857
-11,911
4,858
-9,889
5,176
5,636
8,885
-9,664
3,222
-16,294
4,358
-3,127
7,418
-27,927
-495
-29,808
-4,143
-12,697
2,209
29,164
10,975
18,189
37,057
16,557
20,500
22,345
3,791
18,553
27,997
19,442
8,764
11,817
3,661
8,157
13,567
4,397
9,170
40,022
19,305
20,717
11,138
1,933
9,204
24,013
3,288
20,725
(-))
U.S. budget plus off-budget, including
Federal Financing Bank
8 Surplus, or deficit ( - )
Source of financing
9
Borrowing from the public
10 Cash and monetary assets (decrease, or
increase ( - ) ) 4
11 Other 5
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. Half-year figures are calculated as a residual (total surplus/deficit less trust
fund surplus/deficit).
3. Other off-budget includes Postal Service Fund; Rural Electrification and
Telephone Revolving Fund; Rural Telephone Bank; and petroleum acquisition
and transportation and strategic petroleum reserve effective November 1981.
4. Includes U.S. Treasury operating cash accounts; SDRs; gold tranche
drawing rights; loans to International Monetary Fund; and other cash and
monetary assets.
5. 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 U.S. Government, Fiscal
Year 1985.
Federal Finance A3 3
1.39
U.S. BUDGET RECEIPTS AND OUTLAYS
Millions of dollars
Calendar year
Source or type
Fiscal
year
1983
Fiscal
year
1984
1985
1984
1983
HI
H2
HI
H2
Apr.
May
June
RECEIPTS
1 All sources
2 Individual income taxes, net
3 Withheld
4 Presidential Election Campaign Fund . . .
5
Nonwithheld
Refunds
6
Corporation income taxes
7 Gross receipts
8
Refunds
9 Social insurance taxes and contributions,
net
10 Payroll employment taxes and
contributions 1
11 Self-employment taxes and
contributions 2
12 Unemployment insurance
13 Other net receipts 3
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 4
600,563
666,457
306,331
305,122
341,808
341,392
94,593
39,794
72,151
288,938
266,010
36
83,586
60,692
295,955
279,345
35
81,346
64,771
144,551
135,531
30
63,014
54,024
147,663
133,768
6
20,703
6,815
144,691
140,657
29
61,463
57,458
157,229
145,210
5
19,403
7,387
51,602
26,343
9
43,235
17,986
3,611
27,640
8
1,945
25,982
34,764
23,448
3
13,579
2,226
61,780
24,758
74,179
17,286
33,522
13,809
31,064
8,921
40,328
10,045
35,190
6,847
11,265
2,409
2,205
975
11,373
585
209,001
241,902
110,520
100,832
131,372
118,690
28,032
28,423
21,049
179,010
203,476
90,912
88,388
106,436
104,540
18,822
19,204
18,924
6,756
18,799
4,436
8,709
25,138
4,580
6,427
10,984
2,197
398
8,714
2,290
7,667
14,942
2,329
1,086
10,706
2,360
5,757
3,062
391
590
8,192
437
1,298
501
367
35,300
8,655
6,053
15,594
37,361
11,370
6,010
16,965
16,904
4,010
2,883
7,751
19,586
5,079
3,050
7,811
18,304
5,576
3,102
8,481
18,961
6,329
3,029
8,812
2,700
939
671
1,793
3,235
946
566
1,783
2,733
997
428
1,391
OUTLAYS
18 All types
795,917
841,800
396,477
406,849
420,700
446,943
82,228
80,245
71,506
19
20
21
22
23
24
National defense
International affairs
General science, space, and technology . . .
Energy
Natural resources and environment
Agriculture
210,461
8,927
7,777
4,035
12,676
22,173
227,405
13,313
8,271
2,464
12,677
12,215
105,072
4,705
3,486
2,073
5,892
10,154
108,967
6,117
4,216
1,533
6,933
5,278
114,639
5,426
3,981
1,080
5,463
7,129
118,286
8,550
4,473
1,423
7,370
8,524
20,239
946
743
355
1,006
2,822
22,198
1,201
722
408
1,016
903
20,815
974
656
-874
1,073
822
25
26
27
28
Commerce and housing credit
Transportation
Community and regional development . . . .
Education, training, employment, social
services
4,721
21,231
7,302
5,198
24,705
7,803
2,164
9,918
3,124
2,648
13,323
4,327
2,572
10,616
3,154
2,663
13,673
4,836
1,128
2,045
683
-187
2,124
508
266
2,130
652
25,726
26,616
12,801
13,246
13,445
13,737
2,344
2,448
1,949
28,655]
223,311f
106,21 l j
30,435
235,764
96,714
41,206
143,001
42,150
15,748
135,579
65,212
15,692
119,613
57,411
2,909
21,355
13,347
3,016
21,378
10,740
2,735
23,074
7,809
25,640
5,616
4,836
6,577
111,007
-15,454
11,334
2,522
2,434
3,124
42,358
-8,887
13,621
2,628
2,479
3,290
47,674
-7,262
12,849
2,807
2,462
2,943
53,729
-7,333
13,317
2,992
2,552
3,458
61,293
-12,914
2,293
572
80
1,258
10,858
-2,754
3,207
492
848
91
11,536
-2,403
907
443
643
-131
9,972
-2,410
29 Health
30 Social security and medicare
31 Income security
32
33
34
35
36
37
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest"
Undistributed offsetting receipts 7
24,845
5,014
4,991
6,287
89,774
-21,424
1. Old-age, disability, and hospital insurance, and railroad retirement accounts.
2. Old-age, disability, and hospital insurance.
3. Federal employee retirement contributions and civil service retirement and
disability fund.
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous
receipts.
5. In accordance with the Social Security Amendments Act of 1983, the
Treasury now provides social security and medicare outlays as a separate
function. Before February 1984, these outlays were included in the income
security and health functions.
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 1985.
A30
1.40
D o m e s t i c Financial Statistics •
S e p t e m b e r 1985
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1984
1983
1985
Item
Mar. 31
1 Federal debt outstanding
2 Public debt securities
3
Held by public
Held by agencies
4
5 Agency securities
6
Held by public
Held by agencies
7
8 Debt subject to statutory limit
Sept. 30
June 30
Dec. 31
Mar. 31
Mar. 31
Dec. 31
1,324.3
1,381.9
1,415.3
1,468.3
1,517.2
1,576.7
1,667.4
1,715.1
1,244.5
1,043.3
201.2
1,319.6
1,090.3
229.3
1,377.2
1,138.2
239.0
1,410.7
1,174.4
236.3
1,463.7
1,223.9
239.8
1,512.7
1,255.1
257.6
1,572.3
1,309.2
263.1
1,663.0
1,373.4
289.6
1,710.7
1,415.2
295.5
4.8
3.7
1.1
4.7
3.6
1.1
4.7
3.6
1.1
4.6
3.5
1.1
4.6
3.5
1.1
4.5
3.4
1.1
4.5
3.4
1.1
4.5
3.4
1.1
4.4
3.3
1.1
1,245.3
1,320.4
1,378.0
1,411.4
1,464.5
1,513.4
1,573.0
1,663.7
1,711.4
1,512.1
1.3
1,571.7
1.3
1,662.4
1.3
1,710.1
1.3
1,520.0
1,573.0
1,823.8
1,823.8
1,249.3
9 Public debt securities
10 Other debt 1
1,243.9
1.4
1,319.0
1.4
1,376.6
1.3
1,410.1
1.3
1,463.1
1.3
11 MEMO: Statutory debt limit
1,290.2
1,389.0
1,389.0
1,490.0
1,490.0
1. Includes guaranteed debt of government agencies, specified participation
certificates, notes to international lending organizations, and District of Columbia
stadium bonds.
1.41
Sept. 30
June 30
GROSS PUBLIC DEBT OF U.S. TREASURY
NOTE. Data from Treasury Bulletin (U.S. Treasury Department),
Types and Ownership
Billions of dollars, end of period
1984
Type and holder
1 Total gross public debt
By type
2 Interest-bearing debt
3 Marketable
4 Bills
5 Notes
6 Bonds
7 Nonmarketable 1
8 State and local2 government series
9 Foreign issues
10
11
Public
12 Savings bonds and notes
13 Government account series 3
14 Non-interest-bearing debt
By holder4
15 U.S. government agencies and trust funds
16 Federal Reserve Banks
17
18 Commercial banks
19 Money market funds
20
Insurance companies
21 Other companies
22
State and local governments
23
74
25
26
Individuals
Savings bonds
Other securities
Foreign and international 5
Other miscellaneous investors 6
1981
1980
Q3
Q4
Q1
Q2
930.2
1,028.7
1,197.1
1,410.7
1,572.3
1,663.0
1,710.7
1,774.6
928.9
623.2
216.1
321.6
85.4
305.7
23.8
24.0
17.6
6.4
72.5
185.1
1,027.3
720.3
245.0
375.3
99.9
307.0
23.0
19.0
14.9
4.1
68.1
196.7
1,195.5
881.5
311.8
465.0
104.6
314.0
25.7
14.7
13.0
1.7
68.0
205.4
1,400.9
1,050.9
343.8
573.4
133.7
350.0
36.7
10.4
10.4
.0
70.7
231.9
1,559.6
1,176.6
356.8
661.7
158.1
383.0
41.4
8.8
8.8
.0
73.1
259.5
1,660.6
1,247.4
374.4
705.1
167.9
413.2
44.4
9.1
9.1
.0
73.3
286.2
1,695.2
1,271.7
379.5
713.8
178.4
423.6
47.7
9.1
9.1
.0
74.4
292.2
1,759.8
1,310.7
381.9
740.9
187.9
449.1
53.9
8.3
8.3
.0
75.7
311.0
1.3
1.4
1.6
9.8
12.7
2.3
15.5
14.8
192.5
121.3
616.4
112.1
3.5
24.0
19.3
87.9
203.3
131.0
694.5
111.4
21.5
29.0
17.9
104.3
209.4
139.3
848.4
131.4
42.6
39.1
24.5
127.8
236.3
151.9
1,022.6
188.8
22.8
56.7
39.7
155.1
263.1
155.0
1,154.1
183.0
13.6
73.2
47.7
n.a.
289.6
160.9
1,212.5
183.4
25.9
82.3
51.1
n.a.
295.5
161.0
1,254.1
195.0
26.6
84.0
51.9
n.a.
72.5
44.6
129.7
122.8
68.1
42.7
136.6
163.0
68.3
48.2
149.5
217.0
71.5
61.9
166.3
259.8
73.7
68.7
175.5
n.a.
74.5
69.3
192.8
n.a.
75.4
69.9
186.3
n.a.
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration; depository bonds, retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. government agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
funds are actual holdings; data for other groups are Treasury estimates.
1985
1983
1982
n.a.
5. Consists of investments of foreign and international accounts. Excludes noninterest-bearing notes issued to the International Monetary Fund.
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. government deposit accounts, and U.S. government-sponsored agencies.
SOURCES. Data by type of security, U.S. Treasury Department, Monthly
Statement of the Public Debt of the United States; data by holder. Treasury
Bulletin.
Federal Finance
1.42
U.S. GOVERNMENT SECURITIES DEALERS
A3 3
Transactions
Par value; averages of daily figures, in millions of dollars
1985 week ending Wednesday
1982
1983
Apr.'
May'
May 22
May 29
June 5
June 12 June 19 June 26
1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Immediate delivery
U.S. government securities..
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 2
Federal agency s e c u r i t i e s . . . .
Certificates of deposit
Bankers acceptances
Commercial paper
Futures transactions 3
Treasury bills
Treasury coupons
Federal agency s e c u r i t i e s . . . .
Forward transactions 4
U.S. government securities..
Federal agency s e c u r i t i e s . . . .
18,392
810
6,271
3,555
3,232
42,135
52,786
72,507
83,324
86,999
0,340'
71,499'
97,539
80,176
88,813
80,373
22,393
708
8,758
5,279
4,997
26,040
1,305
11,734
7,607
6,100
35,900
1,971
17,007
10,899
6,729
34,179
1,933
23,116
13,088
11,008
34,591
1,664
23,482
15,600
11,662
30,498
2,172
25,202'
10,814'
11,655'
27,109'
1,296
23,146'
11,434'
8,515'
39,748
2,031
22,718
19,685
13,356
35,662
1,515
17,941
14,719
10,340
36,591
1,531
24,554
15,065
11,072
28,575
1,582
27,761
13,051
9,405
1,770
2,257
2,920
3,895
3,050
2,947
2,595
2,357
3,751
2,904
2,371
2,062
15,794
14,697
4,140
5,000
2,502
7,595
21,045
18,832
5,576
4,333
2,642
8,036
25,584
24,282
7,846
4,947
3,244
40,053
40,222
10,954
4,693
3,923
11,378
42,822
41,230
12,876
4,661
4,001
12,714
38,351
39,395'
11,127
4,69C
3,998'
10,832
34,870'
34,273'
7,619'
4,130
4,231
10,018
34,705
33,907
10,176
4,355
3,499
12,019
45,452
48,336
13,513
5,418
4,490
13,062
40,373
36,899
11,349
3,937
3,659
11,606
44,469
41,973
16,177
5,236
4,550
13,541
40,340
37,971
10,165
4,099
3,648
12,222
5,055
1,487
261
6,655
2,501
265
6,947
4,503
262
6,662
5,517
120
4,572
5,730
148
6,416
7,627
222
3,770
5,906
311
4,050
4,627
121
7,332
7,506
202
6,163
7,870
300
7,539
8,536
99
5,223
6,388
347
835
978
1,493
1,646
1,364
2,843
1,017
2,632
1,719
3,268
1,319
3,747
1,735'
3,820
1,399
2,032
1,387
3,394
666
3,912
1,922
4,809
1,317
2,974
1. Data for immediate transactions does not 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
11,020
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.
A32
1.43
DomesticNonfinancialStatistics • September 1985
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing
Averages of daily figures, in millions of dollars
1985
Item
1982
1983
1985 week ending Wednesday
1984
May
Apr.
June
May 29
June 5
June 12
June 19
June 26
Positions
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Net immediate 1
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
13,663
7,297
972
3,256
-318
2,026
4,145
5,532
2,832
3,317
10,701
8,020
394
1,778
-78
528
7,232
5,839
3,332
3,159
5,538
5,500
63
2,159
-1,119
-1,174
15,294
7,369
3,874
3,788
8,531
11,538
1,203
2,235
-4,464'
-2,307 r
18,049
8,652
3,949
4,959
5,481'
8,004'
1,083'
3,797
-5,687
-2,075
19,815'
9,368'
4,476'
5,469
1,886
4,588
845
5,698
-7,179
-2,394
22,746
9,492
4,544
5,232
-125'
3,832'
913
3,802
-7,165
-1,858
20,721'
9,226'
4,949'
5,204
5,810
7,193
1,014
5,783
-7,218
-1,302
22,165
9,821
5,218
6,512
4,643
7,132
1,083
5,744
-7,088
-2,563
23,420
10,241
5,267
5,989
2,564
5,379
745
5,681
-7,065
-2,515
22,541
9,491
4,204
4,425
-3,462
1,155
585
5,125
-7,928
-2,731
22,628
8,908
3,875
4,616
-2,507
-2,303
-224
-4,125
-1,032
171
-4,525
1,794
233
-2,885'
6,316'
38
-5,927'
6,589
-99
-4,925
4,239'
-469
-7,887
5,284
-421
-7,451
4,842
-175
-6,009
4,617
-252
-5,672
4,736
-330
-3,411
3,664
-776
-788
-1,432
-1,936
-3,561
-1,643
-9,205
-818'
-7,881
-344'
-7,803'
225
-9,144
813
-7,634'
-123
-8,683
-998
-9,830
-76
-9,342
1,318
-8,908
Financing 2
Reverse repurchase agreements 3
Overnight and continuing
Term agreements
Repurchase agreements 4
18 Overnight and continuing
19 Term agreements
16
17
26,754
48,247
29,099
52,493
44,078
68,357
62,325
77,440
64,824
74,562
66,347
75,308
66,126
72,491
67,633
73,949
68,551
71,940
67,572
75,144
65,057
78,893
49,695
43,410
57,946
44,410
75,717
57,047
94,055
65,621
97,989
67,542
146,450
66,486
97,482
65,%2
97,714
66,185
99,708
63,166
98,638
64,648
298,069
65,772
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. Before 1984, securities
owned, and hence dealer positions, do not include all securities acquired under
reverse RPs. After January 1984, immediate positions include reverses to maturity, which are securities that were sold after having been obtained under reverse
repurchase agreements that mature on the same day as the securities. Data for
immediate positions does not include forward positions.
2. Figures cover financing involving U.S. government and federal agency
securities, negotiable CDs, bankers acceptances, and commercial paper.
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.
Federal Finance
1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES
A3 3
Debt Outstanding
Millions of dollars, end of period
1985
1984
Agency
1
1981
Federal and federally sponsored agencies
r Federal agencies
3
Defense Department'
4
Export-Import Bank 2 ' 3
5
Federal Housing Administration 4
6
Government National Mortgage Association
participation certificates 5
7
Postal Service 6
8
Tennessee Valley Authority
9
United States Railway Association 6
12
13
14
15
Federally sponsored agencies 7
Federal Home Loan Banks
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association 8
Farm Credit Banks
Student Loan Marketing Association
16
Federal Financing Bank debt
10
11
17
18
19
20
21
22
23
24
Dec.
Jan.
Feb.
Mar.
Apr.
May
237,085
239,716
271,564
270,965
271,479
275,093
275,209
31,806
484
13,339
413
33,055
354
14,218
288
33,940
243
14,853
194
35,145
142
15,882
133
35,235
133
15,882
132
35,360
122
15,881
129
35,140
116
15,709
127
35,182
107
15,707
123
278,901P
35,282
102
15,706
122
2,715
1,538
13,115
202
2,165
1,471
14,365
194
2,165
1,404
14,970
111
2,165
1,337
15,435
51
2,165
1,337
15,535
51
2,165
1,337
15,675
51
2,165
1,337
15,635
51
2,165
1,337
15,776
74
2,165
1,337
15,776
74
190,140
54,131
5,480
58,749
71,359
421
204,030
55,967
4,524
70,052
71,896
1,591
205,776
48,930
6,793
74,594
72,409
3,050
236,419
65,085
10,270
83,720
71,255
5,369
235,730
64,705
10,195
84,612
70,642
5,576
236,120
64,706
11,237
84,701
70,012
5,464
239,953
65,700
11,882
86,297
70,161
5,913
240,027
65,257
12,004
86,913
69,882
5,971
243,619''
67,765
110,698
126,424
135,791
145,217
146,034
146,611
147,507
148,718'
149,597
12,741
1,288
5,400
11,390
202
14,177
1,221
5,000
12,640
194
14,789
1,154
5,000
13,245
111
15,852
1,087
5,000
13,710
51
15,852
1,087
5,000
13,810
51
15,852
1,087
5,000
13,950
51
15,690
1,087
5,000
13,910
51
15,690
1,087
5,000
14,051
74
15,690
720
5,000
14,154
74
48,821
13,516
12,740
53,261
17,157
22,774
55,266
19,766
26,460
58,971
20,693
29,853
59,066
20,653
30,515
59,041
20,804
30,826
59,756
20,730
31,283
60,641
20,894
31,281'
61,461
21,003
31,495
n.a.
88,170
69,321
6,359
sponsored
Export-Import Bank 3
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other Lending10
Farmers Home Administration
Rural Electrification Administration
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.
1983
221,946
MEMO
Lending to federal and federally
1982
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.
A34
1.45
DomesticNonfinancialStatistics • September 1985
NEW SECURITY ISSUES State and Local Governments
Millions of dollars
1984
Type of issue or issuer,
or use
1982
1983
Sept.
1 All issues, new and refunding1
1985
1984
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr.
79,138
86,421
106,641
7,967
12,558
13,548
17,713
6,275
8,109
9,647
10,962
21,094
225
58,044
461
21,566
96
64,855
253
26,485
16
80,156
17
1,433
4
6,534
1
3,770
1
8,788
3
2,611
3
10,937
1
2,185
2
15,528
0
1,804
7
4,471
3
3,463
0
4,646
0
2,875
5
6,772
0
3,187
0
7,775
2
Type of issuer
6 State
7 Special district and statutory authority
8 Municipalities, counties, townships, school districts
8,438
45,060
25,640
7,140
51,297
27,984
9,129
63,550
33,962
596
5,202
2,169
1,110
7,087
4,361
405
7,265
5,878
725
11,894
5,094
367
3,847
2,061
1,542
4,282
2,285
252
5,644
3,751
958
6,540
3,464
9 Issues for new capital, total
74,804
72,441
94,050
7,454
11,105
12,352
16,354
4,904
5,580
8,042
8,096
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
6,482
6,256
14,259
26,635
8,349
12,822
8,099
4,387
13,588
26,910
7,821
11,637
7,553
7,552
17,844
29,928
15,415
15,758
333
590
2,013
3,018
679
821
755
1,018
2,784
3,500
1,522
1,526
999
2,151
534
3,701
3,866
1,101
671
1,339
4,133
3,598
5,572
1,041
661
341
1,315
1,567
376
644
930
472
912
1,847
185
1,234
1,045
153
1,483
3,017
565
1,779
863
92
2,286
2,738
293
1,824
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.
NEW SECURITY ISSUES Corporations
Millions of dollars
Type of issue or issuer,
or use
1984
1982
1983
1985
1984
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
1 AU issues1
84,638
120,074
132,311
12,350
11,931
6,940
7,294
6,743
14,005
11,462'
13,285
2 Bonds2
54,076
68,495
109,683
10,403
9,524
5,918
5,739
4,027
11,641
8,850'
9,738
Type of offering
3 Public
4 Private placement
44,278
9,798
47,369
21,126
73,357
36,326
10,403
n.a.
9,524
n.a.
5,918
n.a.
5,739
n.a.
4,027
n.a.
11,641
n.a.
8,850'
n.a.
9,738
n.a.
12,822
5,442
1,491
12,327
2,390
19,604
16,851
7,540
3,833
9,125
3,642
27,502
24,607
13,726
4,694
10,679
2,997
52,980
2,989
988
161
1,150
240
4,875
1,447
1,198
19
555
1,557
4,749
1,741
555
110
575
169
2,768
1,326
144
297
309
375
3,288
1,476
469
30
80
353
1,619
5,660
974
130
500
300
4,077
922
1,317
334
860
0
5,418'
1,500
899
357
1,136
150
5,696
11 Stocks3
30,562
51,579
22,628
1,947
2,407
1,022
1,555
2,716
2,364
2,612
3,547
Type
12 Preferred
13 Common
5,113
25,449
7,213
44,366
4,118
18,510
555
1,392
655
1,752
91
931
170
1,385
218
2,498
311
2,053
208
2,404
634
2,913
5,649
7,770
709
7,517
2,227
6,690
14,135
13,112
2,729
5,001
1,822
14,780
4,054
6,277
589
1,624
419
9,665
712
489
16
146
69
515
227
1,025
66
150
3
936
137
112
71
66
26
610
172
234
0
225
271
653
229
760
153
283
101
1,190
224
472
32
197
15
1,424
283
978
419
157
5
770
504
616
30
185
119
2,093
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. Monthly data 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.
Securities Market and Corporate Finance
1.47
O P E N - E N D INVESTMENT COMPANIES
A35
Net Sales and Asset Position
Millions of dollars
1984
Item
1983
1985
1984
Nov.
Oct.
Dec.
Jan.
Feb.
Mar.
Apr/
May
INVESTMENT COMPANIES 1
1 Sales of own shares 2
2 Redemptions of own shares 3
3 Net sales
4 Assets 4
5
Cash position 5
Other
6
84,345
57,100
27,245
107,485
77,033
30,452
9,517
6,766
2,751
9,458
6,343
3,115
10,006
8,948
1,058
19,152
9,183
9,969
14,786
8,005
6,781
14,582
9,412
5,170
18,049
13,500
4,549
16,394
10,070
6,324
113,599
8,343
105,256
137,126
11,978
125,148
131,539
11,417
120,122
132,709
11,518
121,191
137,126
11,978
125,148
151,534
13,114
138,420
154,707
14,567
140,140
157,065
13,082
143,983
164,087
15,444
148,643
178,265
14,326
163,939
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 o p e n - e n d investment companies registered with the
Securities and Exchange Commission. Data reflect newly formed companies after
their initial offering of securities.
CORPORATE PROFITS AND THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1983
Account
1982
1983
1984
1985
1984
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2
3
4
5
6
1 Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
159.1
165.5
60.7
104.8
69.2
35.6
225.2
203.2
75.8
127.4
72.9
54.5
285.7
235.7
89.8
145.9
80.5
65.3
216.7
198.2
74.8
123.4
71.7
51.7
245.0
227.4
84.7
142.6
73.3
69.3
260.0
225.5
84.5
141.1
75.4
65.6
277.4
243.3
92.7
150.6
77.7
72.9
291.1
246.0
95.8
150.2
79.9
70.2
282.8
224.8
83.1
141.7
81.3
60.3
291.6
228.7
87.7
141.0
83.1
58.0
292.3
222.3
85.3
137.0
84.5
52.5
7 Inventory valuation
8 Capital consumption adjustment
-9.5
3.1
-11.2
33.2
-5.6
55.7
-12.1
30.6
-19.3
36.9
-9.2
43.6
-13.5
47.6
-7.3
52.3
-.2
58.3
-1.6
64.5
.9
69.1
SOURCE. Survey of Current Business (Department of Commerce).
A36
1.49
DomesticNonfinancialStatistics • September 1985
NONFINANCIAL CORPORATIONS
Assets and Liabilities
Billions of dollars, except for ratio
1984
1979
Account
1980
1981
1982
1985
1983
Q1
Q2
Q3
Q4
Ql
1,214.8
1,327.0
1,418.4
1,432.7
1,557.3
1,599.6
1,630.1
1,666.1
1,682.0
1,694.2
118.0
16.7
459.0
505.1
116.0
126.9
18.7
506.8
542.8
131.8
135.5
17.6
532.0
583.7
149.5
147.0
22.8
519.2
578.6
165.2
165.8
30.6
577.8
599.3
183.7
159.0
35.0
599.7
619.6
186.3
154.7
36.9
615.4
629.8
193.4
150.0
33.2
630.6
656.9
195.4
160.9
36.6
622.3
655.6
206.6
153.8
35.3
634.8
664.6
205.7
7 Current liabilities
807.3
889.3
970.0
976.8
1,043.0
1,077.0
1,111.9
1,142.2
1,150.7
1,159.1
8 Notes and accounts payable
9 Other
460.8
346.5
513.6
375.7
546.3
423.7
543.0
433.8
577.8
465.3
584.0
493.0
605.1
506.9
623.9
518.2
627.4
523.3
614.7
544.4
10 Net working capital
407.5
437.8
448.4
455.9
514.3
522.6
518.1
523.9
531.3
535.1
11 MEMO: Current ratio1
1.505
1.492
1.462
1.467
1.493
1.485
1.466
1.459
1.462
1.462
1 Current assets
2
3
4
5
6
Cash
U.S. government securities
Notes and accounts receivable
Inventories
Other
Statistics, Board of Governors of the Federal Reserve System, Washington, D.C.
20551.
SOURCE. Federal Trade Commission and Bureau of the Census.
1. Ratio of total current assets to total current liabilities.
NOTE. For a description of this series, see "Working Capital of Nonfinancial
C o r p o r a t i o n s " in t h e J u l y 1978 BULLETIN, p p . 5 3 3 - 3 7 .
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
1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment •
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1983
Industry
1 Total nonfarm business
Manufacturing
2 Durable goods industries
3 Nondurable goods industries
Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
Gas and other
10 Commercial and other 2
1983
1984
1985
Q4
Ql
Q2
Q3
Q4
Ql
Q21
Q3'
304.78
353.74
386.10
325.45
337.48
348.34
361.12
367.21
371.16
385.31
392.61
53.08
63.12
65.95
72.43
75.24
80.74
57.56
66.19
61.26
68.71
63.12
72.21
68.31
73.72
71.13
75.07
69.87
75.78
75.72
79.83
77.83
82.96
15.19
16.88
16.06
16.27
17.61
16.01
16.96
16.93
15.66
16.47
16.19
4.88
4.36
4.72
6.77
3.55
6.17
7.35
4.09
6.21
6.04
3.75
5.48
5.76
3.23
5.96
7.46
3.52
6.06
7.47
3.73
6.50
6.40
3.73
6.16
6.02
4.20
6.01
7.44
3.60
6.12
8.30
4.54
6.47
37.27
7.70
114.45
37.09
10.30
134.39
35.23
12.51
148.68
37.79
8.07
124.30
38.36
8.77
127.83
37.82
10.07
132.07
36.82
11.07
136.55
35.37
11.31
141.10
36.65
11.81
145.17
35.35
12.36
148.42
33.93
12.83
149.56
• T r a d e and services are no longer being reported separately. They are included
in Commercial and other, line 10.
1. Anticipated by business.
1984
1985'
2. "Other" consists of construction; wholesale and retail trade; finance and
insurance; personal and business services; and communication.
SOURCE. Survey of Current Business (Department of Commerce).
Securities Markets and Corporate Finance
1.51
DOMESTIC FINANCE COMPANIES
A37
Assets and Liabilities A
Billions of dollars, end of period
1984
1983
Account
1980
1981
1985
1982
Q3
Q4
Q2
Ql
Q4
Q3
QL
ASSETS
Accounts receivable, gross
1 Consumer
2 Business
Real estate
4 Total
63.2
90.3
13.8
167.3
72.4
100.3
17.9
190.5
78.1
101.4
20.2
199.7
85.4
106.3
21.8
213.5
87.4
113.4
22.5
223.4
87.4
120.5
22.2
230.1
90.5
124.4
23.0
238.0
95.6
124.5
25.2
245.3
96.7
135.2
26.3
258.3
99.1
141.4
27.2
267.8
23.6
2.8
30.0
3.2
31.9
3.5
32.7
3.8
33.0
4.0
32.8
4.1
33.9
4.4
36.0
4.3
36.5
4.4
36.5
4.8
7 Accounts receivable, net
8 All other
140.9
23.1
157.3
27.1
164.3
30.7
177.0
33.7
186.4
34.0
193.2
35.7
199.6
35.8
205.0
36.4
217.3
35.4
226.5
36.2
9 Total assets
164.0
184.4
195.0
210.7
220.4
228.9
235.4
241.3
252.7
262.6
14.3
47.7
16.1
57.2
18.3
51.1
17.5
56.5
18.7
59.7
16.2
64.8
18.3
68.5
19.7
66.8
21.3
72.5
19.8
79.1
10.4
52.4
15.9
23.3
11.3
56.0
18.5
25.3
12.7
64.4
21.2
27.4
12.7
66.9
26.8
30.3
13.9
68.1
30.1
29.8
14.1
70.3
32.4
31.1
15.5
69.7
32.1
31.4
16.1
73.8
32.6
32.3
16.2
77.2
33.1
32.3
16.8
78.4
35.2
33.3
164.0
184.4
195.0
210.7
220.4
228.9
235.4
241.3
252.7
262.6
Less:
5 Reserves for unearned income
6 Reserves for losses
LIABILITIES
10 Bank loans
11 Commercial paper
Debt
12 Other short-term
N
Long-term
14 All other liabilities
15 Capital, surplus, and undivided profits
16 Total liabilities and capital
A Finance company asset and liability data have been revised from June 1980
forward. Revised quarterly data will appear in the Board's forthcoming Annual
Statistical Digest.
1.52
DOMESTIC FINANCE COMPANIES
NOTE. Components may not add to totals due to rounding,
These data also appear in the Board's G.20 (422) release. For address, see
inside front cover.
Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
Changes in accounts
receivable
Extensions
Repayments
1985
1985
1985
Accounts
receivable
outstanding
May 31,
1985'
Mar.
1 Total
2
3
4
5
6
7
8
9
10
Retail financing of installment sales
Automotive (commercial vehicles)
Business, industrial, and farm equipment
Wholesale financing
Automotive
Equipment
All other
Leasing
Automotive
Equipment
Loans on commercial accounts receivable and factored commercial accounts receivable
All other business credit
1. Not seasonally adjusted.
Apr.
Mar.
Apr.
May
Mar.
Apr.
May
692
27,588'
26,098'
26,710
26,089'
24,932'
26,018
May
143,269
l,499 r
12,214
20,251
298
84
119
-102
354
4
1,060
1,427
889
1,063
1,135
1,238
762
1,343
770
1,165
781
1,234
20,846
4,887
6,705
476
105
86
417
-213
-59
-462
34
-249
10,201
540
1,652
9,090
479
1,627
9,493
588
1,569
9,725
435
1,566
8,673
692
1,686
9,955
554
1,818
14,592
36,877
271
-252
538
628
363
141
872
1,222
1,093
1,313
1,034
992
601
1,474
555
685
671
851
15,719
11,178
207r
224
-44'
-118
243
264
9,567'
1,047
9,448'
1,096
9,396
1,265
9,36C
823
9,492'
1,214
9,153
1,001
NOTE. These data also appear in the Board's G.20 (422) release. For address,
see inside front cover.
A38
1.53
Domestic Financial Statistics • September 1985
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1984
Dec.
1985
Jan.
Feb.
Mar.
Apr.
May
June
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)
7 FHLBB series 5
8 HUD series 4
94.6
69.8
76.6
27.6
2.95
14.47
92.8
69.5
77.1
26.7
2.40
12.20
96.8
73.7
78.7
27.8
2.64
11.87
102.6
76.9
77.9
28.0
2.65
12.05
94.8
71.4
77.9
27.7
2.65
11.77
101.8
76.5
77.6
28.1
2.58
11.74
91.3
69.9
79.8
27.2
2.65
11.42
101.4
76.9
78.9
27.4
2.65
11.55
106.4'
78.4'
76.1'
26.8'
2.49'
11.55'
102.4
79.7
79.9
27.7
2.40
11.31
15.12
15.79
12.66
13.43
12.37
13.80
12.55
13.05
12.27
12.88
12.21
13.06
11.92
13.26
12.05
13.01
12.01'
12.49
11.75
12.06
15.30
14.68
13.11
12.25
13.81
13.13
12.99
12.54
13.01
12.26
13.27
12.23
13.43
12.68
12.97
12.31
12.28
11.93
1.89
11.54
SECONDARY MARKETS
Yield (percent per annum)
9 FHA mortgages (HUD series) 5
10 GNMA securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12 FHA/VA-insured
13 Conventional
66,031
39.718
26,312
74,847
37,393
37,454
83,339
35,148
48,191
87,940
34,711
53,229
89,353
34,602
54,751
90,369
34,553
55,816
91,975
34,585
57,391
92,765
34,516
58,250
93,610
34,428
59,182
94,777
34,307
60,470
Mortgage transactions (during period)
14 Purchases
15 Sales
15,116
2
17,554
3,528
16,721
978
1,962
0
1,943
0
1,559
0
2,256
100
1,515
0
1,703
0
1,904
0
Mortgage
commitments1
16 Contracted (during period)
17 Outstanding (end of period)
22,105
7,606
18,607
5,461
21,007
6,384
2,758
6,384
1,230
5,678
1,895
5,665
1,636
5,019
1,921
5,361
2,074
5,589
1,593
5,062
5,131
1,027
4,102
5,996
974
5,022
9,283
910
8,373
10,399
881
9,518
10,362
876
9,485
11,118
859
10,259
11,549
854
10,694
11,615
850
10,765
23,673
24,170
23,089
19,686
21,886
18,506
4,137
3,635
2,197
2,162
3,247
2,428
3,232
2,751
2,201
1,973
28,179
7,549
32,852
16,964
32,603
13,318'
4,174
13,318'
4,264
29,654
3,622
30,135
3,453
30,436
4,141
n.a.
FEDERAL H O M E LOAN MORTGAGE CORPORATION
Mortgage holdings (end of period)8
18 Total
19 FHA/VA
20
Conventional
Mortgage transactions (during period)
21 Purchases
22 Sales
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; 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 averages of Friday figures from the
Wall Street Journal.
7. Includes some multifamily and nonprofit hospital loan commitments in
addition to 1- to 4-family loan commitments accepted in FNMA's free market
auction system, and through the FNMA-GNMA tandem plans.
8. Includes participation as well as whole loans.
9. Includes conventional and government-underwritten loans. FHLMC's mortgage commitments and mortgage transactions include activity under mortgage/
securities swap programs, while the corresponding data for FNMA exclude swap
activity.
Real Estate
1.54
A39
MORTGAGE DEBT OUTSTANDING
Millions of dollars, end of period
1984
Type of holder, and type of property
1982
1983
Q1
1
?
3
4
5
All holders
1- to 4-family
Multifamily
Commercial
6 Major financial institutions
7 Commercial banks'
1- to 4-family
8
9
Multifamily
10
Commercial
Farm
11
1985
1984
Q2
Q4
Q3
Q1
1,658,450
1,110,315
140,063
301,362
106,710
1,825,647'
1,217,439'
149,733'
349,102'
109,373'
2,027,818'
1,346,017'
163,701'
407,236'
110,864'
1,869,278'
1,247,468'
152,962'
359,231'
109,617'
1,928,619'
1,284,075'
157,655'
376,397'
110,492'
1,980,361'
1,315,544'
159,965'
393,784'
111,068'
2,027,818'
1,346,017'
163,701'
407,236'
110,864'
2,070,982'
1,376,918'
167,394'
415,408'
111,262'
1,024,680
301,272
173,804
16,480
102,553
8,435
1,108,249'
330,521
182,514
18,410
120,210
9,387
1,241,690'
374,689
196,112
21,395
146,653
10,529
1,133,720'
339,653
185,213
19,836
124,890
9,714
1,177,662'
352,258
190,185
20,501
131,533
10,039
1,215,047'
363,043
193,138
20,040
139,663
10,202
1,241.69C
374,689
196,112
21,395
146,653
10,529
1,261,329'
383,187
200,024
22,033
150,401
10,729
97,805
66,777
15,305
15,694
29
131,940'
93,649'
17,247'
21,016'
28'
154,441'
109,890'
19,385'
25,136'
3C
139,113'
98,975'
17,917'
22,192'
29'
143,387'
102,122'
18,227'
23,009'
29r
146,073'
103,824'
18,58c
23,639'
3C
154,441'
109,89C
19,385'
25,136'
3C
160,696'
114,507'
20,03C
26,129'
3C
1?
13
14
15
16
Mutual savings banks
1- to 4-family
Multifamily
Commercial
Farm
17
18
19
20
Savings and loan associations
1- to 4-family
Multifamily
Commercial
483,614
393,323
38,979
51,312
494,789
390,883
42,552
61,354
555,277
431,450
48,309
75,518
503,509
397,017
43,553
62,939
528,172
414,087
45,951
68,134
550,129
429,101
47,861
73,167
555,277
431,450
48,309
75,518
559,263
433,429
48,936
76,898
?1
??
23
74
25
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
141,989
16,751
18,856
93,547
12,835
150,999
15,319
19,107
103,831
12,742
157,283
14,180
19,017
111,642
12,444
151,445
14,917
19,083
104,890
12,555
153,845
14,437
19,028
107,796
12,584
155,802
14,204
18,828
110,149
12,621
157,283
14,180
19,017
111,642
12,444
158,183
14,153
19,114
112,641
12,275
138,138
4,227
676
3,551
147,370
3,395
630
2,765
157,377
2,301
585
1,716
150,784
2,900
618
2,282
152,669
2,715
605
2,110
153,355
2,389
594
1,795
157,377
2,301
585
1,716
162,416
1,964
576
1,388
26 Federal and related agencies
27 Government National Mortgage Association
1- to 4-family
78
Multifamily
29
30
31
3?
33
34
Farmers Home Administration
1- to 4-family
Multifamily
Commercial
Farm
1,786
783
218
377
408
2,141
1,159
173
409
400
1,276
213
119
497
447
2,094
1,005
303
319
467
1,344
281
463
81
519
738
206
126
113
293
1,276
213
119
497
447
1,062
156
82
421
403
35
36
37
Federal Housing and Veterans
Administration
1- to 4-family
Multifamily
5,228
1,980
3,248
4,894
1,893
3,001
4,782
2,007
2,775
4,832
1,956
2,876
4,753
1,894
2,859
4,749
1,982
2,767
4,782
2,007
2,775
4,938
2,113
2,825
38
39
40
Federal National Mortgage Association
1- to 4-family
Multifamily
71,814
66,500
5,314
78,256
73,045
5,211
87,940
82,175
5,765
80,975
75,770
5,205
83,243
77,633
5,610
84,850
79,175
5,675
87,940
82,175
5,765
91,975
86,129
5,846
41
4?
43
Federal Land Banks
1- to 4-family
Farm
50,350
3,068
47,282
51,052
3,000
48,052
50,679
2,948
47,731
51,004
2,982
48,022
51,136
2,958
48,178
51,182
2,954
48,228
50,679
2,948
47,731
50,929
2,998
47,931
44
45
46
Federal Home Loan Mortgage Corporation
1- to 4-family
Multifamily
4,733
4,686
47
7,632
7,559
73
10,399
9,654
745
8,979
8,847
132
9,478
8,931
547
9,447
8,841
606
10,399
9,654
745
11,548
10,642
906
216,654
118,940
115,831
3,109
285,073
159,850
155,801
4,049
332,057
179,981
175,084
4,897
2%,481
166,261
161,943
4,318
305,051
170,893
166,415
4,478
317,548
175,770
171,095
4,675
332,057
179,981
175,084
4,897
347,793
185,954
180,878
5,076
42,964
42,560
404
57,895
57,273
622
70,822
70,253
569
59,376
58,776
600
61,267
60,636
631
63,964
63,352
612
70,822
70,253
569
76,759
75,781
978
47 Mortgage pools or trusts 2
48 Government National Mortgage Association
49
1- to 4-family
50
Multifamily
51
5?
53
Federal Home Loan Mortgage Corporation
54
55
56
Federal National Mortgage Association 3
1- to 4-family
Multifamily
14,450
14,450
n.a.
25,121
25,121
n.a.
36,215
35,965
250
28,354
28,354
n.a.
29,256
29,256
n.a.
32,888
32,730
158
36,215
35,965
250
39,370
38,772
598
57
58
59
60
61
Farmers Home Administration
1- to 4-family
Multifamily
40,300
20,005
4,344
7,011
8,940
42,207
20,404
5,090
7,351
9,362
45,039
21,813
5,841
7,559
9,826
42,490
20,573
5,081
7,456
9,380
43,635
21,331
5,081
7,764
9,459
44,926
21,595
5,618
7,844
9,869
45,039
21,813
5,841
7,559
9,826
45,710
21,928
6,041
7,681
10,060
278,978
189,121
30,208
30,868
28,781
284,955
189,189
31,433
34,931
29,402
296,694
193,688
32,918
40,231
29,857
288,293
190,522
31,776
36,545
29,450
293,237
193,304
32,169
38,080
29,684
294,411
192,753
32,624
39,209
29,825
296,694
193,688
32,918
40,231
29,857
299,444
194,832
33,541
41,237
29,834
Multifamily
6? Individual and others 4
63
64 Multifamily
65
66 Farm
1. Includes loans held by nondeposit trust companies but not bank trust
departments.
2. Outstanding principal balances of mortgages backing securities insured or
guaranteed by the agency indicated.
3. Outstanding balances on FNMA's issues of securities backed by pools of
conventional mortgages held in trust. 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 estimate of residential mortgage credit provided by individuals.
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.
A40
1.55
DomesticNonfinancialStatistics • September 1985
C O N S U M E R I N S T A L L M E N T CREDIT' Total Outstanding, and N e t Change
Millions of dollars
1984
Holder, and type of credit
1983
1985
1984
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Amounts outstanding (end of period)
1 Total
383,701
460,500
437,469
441,358
447,783
460,500
461,530
463,628
471,567
479,935
488,666
By major holder
Commercial banks
Finance companies . . . .
Credit unions
Retailers 2
Savings and loans
Gasoline companies . . .
Mutual savings b a n k s . .
171,978
87,429
53,471
37,470
23,108
4,131
6,114
212,391
96,747
67,858
40,913
29,945
4,315
8,331
202,452
95.594
63,808
35.595
27,880
4,328
7,812
204,582
95,113
64,716
35,908
28,781
4,290
7,968
206,635
95,753
66,528
37,124
29,358
4,217
8,168
212,391
96,747
67,858
40,913
29,945
4,315
8,331
213,951
96,732
68,538
38,978
30,520
4,329
8,482
215,778
97,360
68,939
37,483
31,405
4,012
8,651
219,970
99,133
70,432
37,082
32,349
3,820
8,781
223,850
101,324
71,418
37,091
33,514
3,834
8,904
226,973
104,130
72,381
37,472
34,754
3,918
9,038
By major type of credit
9 Automobile
10 Commercial b a n k s . . .
11 Credit unions
12 Finance companies ..
143,114
67,557
25,574
49,983
172,589
85,501
32,456
54,632
167,231
82,706
30,519
54,006
168,923
83,620
30,953
54,350
170,731
84,326
31,820
54,585
172,589
85,501
32,456
54,632
173,769
86,223
32,781
54,765
175,491
87,333
32,973
55,185
179,661
89,257
33,687
56,717
183,558
90,915
34,159
58,484
187,795
92,403
34,620
60,772
13 Revolving
14 Commercial b a n k s . . .
15 Retailers
16 Gasoline companies .
81,977
44,184
33,662
4,131
101,555
60,549
36,691
4,315
90,231
54,258
31,645
4,328
91,505
55,276
31,939
4,290
93,944
56,641
33,086
4,217
101,555
60,549
36,691
4,315
100,565
61,445
34,791
4,329
99,316
61,978
33,326
4,012
100,434
63,684
32,930
3,820
101,887
65,127
32,926
3,834
103,492
66,311
33,263
3,918
17 Mobile home
18 Commercial b a n k s . . .
19 Finance companies ..
20
Savings and loans . . .
21 Credit unions
23,862
9,842
9,547
3,906
567
24,556
9,610
9,243
4,985
718
25,198
9,761
10,065
4,697
675
24,573
9,627
9,470
4,791
685
24,439
9,613
9,235
4,887
704
24,556
9,610
9,243
4,985
718
24,281
9,498
9,053
5,005
725
24,379
9,456
9,044
5,150
729
24,456
9,425
8,981
5,305
745
24,675
9,432
8,992
5,496
755
24,925
9,445
9,016
5,699
765
22 Other
23
Commercial b a n k s . . .
24
Finance companies . .
25
Credit unions
26
Retailers
27
Savings and loans . . .
28 Mutual savings banks
134,748
50,395
27,899
27,330
3,808
19,202
6,114
161,800
56,731
32,872
34,684
4,222
24,960
8,331
154,809
55,727
31,523
32,614
3,950
23,183
7,812
156,357
56,059
31,293
33,078
3,969
23,990
7,968
158,669
56,055
31,933
34,004
4,038
24,471
8,168
161,800
56,731
32,872
34,684
4,222
24,960
8,331
162,915
56,785
32,914
35,032
4,187
25,515
8,482
164,442
57,011
33,131
35,237
4,157
26,255
8,651
167,016
57,604
33,435
36,000
4,152
27,044
8,781
169,815
58,376
33,848
36,504
4,165
28,018
8,904
172,454
58,814
34,342
36,996
4,209
29,055
9,038
2
3
4
5
6
7
8
Net change (during period)
29 Total
48,742
76,799
4,982
5,631
6,080
6,819
7,223
9,041
8,342
8,270
9,042
By major holder
Commercial banks
Finance companies . . . .
Credit unions
Retailers 2
Savings and loans
Gasoline companies . . .
Mutual savings banks ..
19,488
18,572
6,218
5,075
7,285
68
1,322
40,413
18,636
14,387
3,443
6,837
184
2,217
1,384
1,571
871
225
770
-38
199
2,756
398
1,224
128
864
98
163
2,483
778
1,731
278
546
86
178
3,028
1,196
1,336
389
576
117
177
3,799
901
1,290
251
922
-91
151
5,071
1,203
1,423
269
997
-102
180
4,847
2,048
797
91
715
-142
-14
3,853
1,885
1,215
168
1,063
-45
131
4,108
2,373
673
341
1,327
59
161
By major type of credit
37 Automobile
38 Commercial b a n k s . . .
39 Credit unions
40
Finance companies ..
16,856
8,002
2,978
11,752
29,475
17,944
6,882
9,298
1,513
434
416
663
2,504
1,057
587
860
2,549
1,019
828
702
2,687
1,275
640
772
2,887
1,616
598
673
3,198
1,790
696
712
3,391
1,767
381
1,243
3,488
1,546
580
1,362
3,792
1,589
325
1,878
41 Revolving
42
Commercial banks
43 Retailers
44
Gasoline companies .
12,353
7,518
4,767
68
19,578
16,365
3,029
184
1,484
1,323
199
-38
1,488
1,279
111
98
1,614
1,289
239
86
1,445
1,001
327
117
1,957
1,809
239
-91
2,527
2,429
200
-102
2,631
2,698
75
-142
2,126
2,003
168
-45
2,429
2,095
275
59
45 Mobile home
46 Commercial banks
47
Finance companies ..
48
Savings and loans
49 Credit unions
1,452
237
776
763
64
694
-232
-608
1,079
151
127
4
19
95
9
-392
-91
-381
67
13
-91
-1
-192
84
18
117
29
-13
88
13
-159
-89
-144
60
14
282
41
33
192
16
-11
-50
-63
92
10
218
19
13
175
11
186
-21
-19
219
7
18,081
3,731
6,044
3,176
308
6,522
1,322
27,052
6,336
9,946
7,354
414
5,758
2,217
1,858
-377
889
446
26
675
199
2,031
511
-81
624
17
797
163
2,008
176
268
885
39
462
178
2,570
723
437
683
62
488
177
2,538
463
372
678
12
862
151
3,034
811
458
711
69
805
180
2,331
432
868
406
16
623
-14
2,438
285
510
624
0
888
131
2,635
445
514
341
66
1,108
161
30
31
32
33
34
35
36
50 Other
51
Commercial b a n k s . . . .
52 Finance companies . .
53 Credit unions
54 Retailers
55
Savings and loans
56 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.
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, $85.9 billion at the end of
1982, $96.9 billion at the end of 1983, and $116.6 billion at the end of 1984.
These data also appear in the Board's G.19 (421) release. For address, see
inside front cover.
Consumer Installment Credit
1.56
A41
TERMS OF CONSUMER INSTALLMENT CREDIT
Percent unless noted otherwise
1984
Item
1982
1985
1984
1983
Nov.
Jan.
Dec.
Feb.
Apr.
Mar.
May
INTEREST RATES
1
2
3
4
5
6
Commercial banks 1
48-month new car 2
24-month personal
120-month mobile home 2
Credit card
Auto finance companies
New car
Used car
16.82
18.64
18.05
18.51
13.92
16.50
16.08
18.78
13.71
16.47
15.58
18.77
13.91
16.63
15.60
18.82
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
13.37
16.21
15.42
18.85
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
13.16
16.09
15.03
18.64
16.15
20.75
12.58
18.74
14.62
17.85
15.24
18.30
15.24
18.34
15.11
17.88
13.78
17.91
12.65
17.78
11.92
17.78
11.87
17.84
45.9
37.0
45.9
37.9
48.3
39.7
50.0
39.9
50.2
39.8
50.7
41.3
51.4
41.1
52.2
41.3
51.5
41.3
50.9
41.4
85
90
86
92
88
92
89
93
89
93
90
93
90
93
91
93
91
93
91
94
8,178
4,746
8,787
5,033
9,333
5,691
9,577
5,900
9,707
5,975
9,654
5,951
9,196
5,968
9,232
5,976
9,305
6,043
9,775
6,117
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.
NOTE. These data also appear in the Board's G.19 (421) release. For address,
see inside front cover.
A42
1.57
DomesticNonfinancialStatistics • September 1985
F U N D S RAISED IN U.S. CREDIT MARKETS
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1982
1979
1980
1983
1984
1982
HI
H2
HI
H2
HI
H2
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors . . . .
By sector and instrument
2 U.S. government
i
Treasury securities
4 Agency issues and mortgages
386.0
344.6
380.4
404.1
526.4
734.2
358.1
450.1
448.9
563.8
688.9
779.4
37.4
38.8
-1.4
79.2
79.8
-.6
87.4
87.8
-.5
161.3
162.1
-.9
186.6
186.7
-.1
198.8
199.0
-.2
104.1
105.5
-1.4
218.4
218.8
-.4
222.0
222.1
-.1
151.1
151.2
-.1
177.4
177.6
-.2
220.2
220.3
-.1
5 Private domestic nonfinancial sectors
6
Debt capital instruments
V
Tax-exempt obligations
8
Corporate bonds
9
Mortgages
10
Home mortgages
11
Multifamily residential
12
Commercial
13
Farm
348.6
211.2
30.3
17.3
163.6
120.0
7.8
23.9
11.8
265.4
192.0
30.3
26.7
135.1
96.7
8.8
20.2
9.3
293.1
159.1
22.7
21.8
114.6
76.0
4.3
24.6
9.7
242.8
158.9
53.8
18.7
86.5
52.5
5.5
23.6
5.0
339.8
239.3
56.3
15.7
167.3
108.7
8.4
47.3
2.9
535.4
300.7
58.9
37.0
204.7
129.9
14.3
59.0
1.5
254.0
140.7
43.9
12.0
84.8
53.6
5.1
19.7
6.5
231.7
177.2
63.7
25.3
88.2
51.3
5.8
27.5
3.5
266.9
214.4
62.8
23.0
128.6
83.8
2.8
40.3
1.6
412.7
264.2
49.7
8.4
206.0
133.6
13.9
54.3
4.1
511.5
262.4
21.7
28.9
211.8
137.5
16.7
56.0
1.6
559.2
338.9
96.1
45.1
197.7
122.2
12.0
62.0
1.4
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
137.5
45.4
51.2
11.1
29.7
73.4
6.3
36.7
5.7
24.8
134.0
26.7
54.7
19.2
33.4
83.9
21.0
55.5
-4.1
11.5
100.5
51.3
27.3
-1.2
23.1
234.7
96.5
77.4
23.8
37.1
113.2
20.6
69.0
10.0
13.6
54.6
21.4
42.0
-18.2
9.4
52.5
35.9
13.3
-10.6
13.9
148.5
66.6
41.2
8.3
32.3
249.1
102.1
91.2
31.5
24.3
220.3
90.9
63.6
16.0
49.8
19
20
21
22
23
24
By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate
348.6
17.6
179.3
21.4
34.4
96.0
265.4
17.2
122.1
14.4
33.7
78.1
293.1
6.2
127.5
16.3
40.2
102.9
242.8
31.3
94.5
7.6
39.5
70.0
339.8
36.7
175.4
4.3
63.9
59.5
535.4
36.8
241.7
2.3
78.8
175.8
254.0
24.1
94.7
9.6
36.6
89.0
231.7
38.5
94.3
5.6
42.3
51.0
266.9
41.9
134.8
.8
50.1
39.3
412.7
31.6
216.0
7.9
77.6
79.6
511.5
3.0
240.8
.9
83.1
183.7
559.2
70.5
242.5
3.8
74.4
167.9
25 Foreign net borrowing in United States
26 Bonds
21
Bank loans n.e.c
28
Open market paper
29
U.S. government loans
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
6.7
-6.2
10.7
4.5
18.9
3.8
4.9
6.0
4.3
.6
4.1
-7.8
.4
4.0
10.2
2.4
-7.6
12.5
3.0
21.2
11.0
-4.7
9.0
6.0
15.3
4.6
11.3
-4.6
3.9
22.5
2.9
-1.5
16.5
4.6
19.2
1.1
-6.0
18.9
5.2
-18.0
7.0
-9.6
-18.1
2.7
406.2
371.8
407.6
419.8
545.3
734.8
368.3
471.4
504.2
586.3
708.1
761.4
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
<5
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
82.4
62.9
84.1
69.0
90.7
131.1
84.2
53.8
74.0
107.3
123.4
138.8
47.9
24.3
23.1
.6
34.5
7.8
47.4
30.5
15.0
1.9
36.7
-.8
-.5
.9
20.9
16.2
64.9
14.9
49.5
.4
4.1
2.5
.1
1.9
-1.2
.8
67.8
1.4
66.4
74.4
30.4
43.9
66.2
-4.1
70.3
69.4
6.9
62.5
69.1
30.8
38.3
79.6
30.1
49.5
22.9
17.1
56.8
18.8
38.0
18.9
54.3
17.0
59.2
20.6
1.0
21.3
15.7
-16.0
7.6
.1
.6
-14.7
-9.5
7.8
15.2
-.2
13.0
-7.0
60.0
22.4
36.8
.8
24.2
-2.5
.1
3.2
12.3
11.1
69.7
7.5
62.2
-.5
18.0
9.2
44.8
24.4
19.2
1.2
18.1
7.1
-.1
-.9
4.8
7.1
-2.5
7.2
-12.1
2.2
18.8
-2.0
.1
21.5
15.7
1.8
21.1
15.7
24.8
23.1
34.5
1.6
6.5
12.6
16.5
-1.3
25.6
19.2
18.1
.5
6.9
7.4
5.8
-2.2
32.4
15.0
36.7
.4
8.3
15.5
12.8
.2
15.3
49.5
4.1
1.2
1.9
2.5
-.9
.1
1.4
66.4
22.9
.5
8.6
-2.7
17.0
.2
30.4
43.9
56.8
4.4
10.9
22.7
19.5
.1
.1
7.5
62.2
-16.0
1.7
-5.8
-9.3
-1.9
.1
-4.1
70.3
7.8
.8
6.1
-10.0
11.4
.2
6.9
62.5
38.0
.2
11.1
4.5
22.7
.2
30.8
38.3
54.3
4.8
20.0
19.1
10.9
.1
30.1
49.5
59.2
3.9
1.8
26.2
28.1
.1
452.5
163.5
43.9
11.8
84.8
20.6
64.6
34.8
28.5
525.1
288.3
63.7
43.8
88.2
21.4
37.9
-23.9
5.9
578.2
288.4
62.8
42.8
128.5
35.9
22.1
-8.0
5.7
693.6
220.5
49.7
30.3
206.0
66.6
41.9
43.6
35.0
831.5
246.7
21.7
46.9
211.7
102.1
85.3
71.8
45.2
900.2
299.8
96.1
72.8
197.6
90.9
55.8
19.0
68.2
52.0
28.9
23.1
18.4
2.5
2.2
-43.3
39.0
-82.3
-84.5
2.9
-.1
-27.5
35.9
-63.4
-69.4
3.2
2.9
*
*
*
23.2
36.8
24.2
.7
9.7
14.3
*
*
*
*
All sectors
50 Total net borrowing
51
U.S. government securities
52 State and local obligations
33
Corporate and foreign bonds
54
Mortgages
53 Consumer credit
56
Bank loans n.e.c
57
Open market paper
58 Other loans
488.7
84.8
30.3
29.0
163.5
45.4
52.9
40.3
42.4
434.7
122.9
30.3
34.6
134.9
6.3
47.3
20.6
37.8
491.8
133.0
22.7
26.4
113.9
26.7
59.3
54.0
55.8
488.8
225.9
53.8
27.8
86.5
21.0
51.2
5.4
17.2
635.9
254.4
56.3
36.5
167.2
51.3
32.0
17.8
20.3
865.9
273.3
58.9
59.9
204.6
96.5
70.6
45.4
56.7
External corporate equity funds raised in United States
59 Total new share issues
60 Mutual funds
61 All other
62
Nonfinancial corporations
63
Financial corporations
64
Foreign shares purchased in United States
-3.8
.1
-3.9
-7.8
3.2
.8
22.2
5.2
17.1
12.9
2.1
2.1
-4.1
6.3
-10.4
-11.5
.8
.3
35.3
18.4
16.9
11.4
4.0
1.5
67.8
32.8
34.9
28.3
2.7
4.0
-35.4
37.5
-72.9
-77.0
3.0
1.1
23.3
12.5
10.9
7.0
3.9
-.1
47.2
24.3
22.9
15.8
4.1
3.0
83.5
36.8
46.8
38.2
2.8
5.7
Flow of Funds
1.58
A43
D I R E C T A N D I N D I R E C T S O U R C E S O F F U N D S TO CREDIT M A R K E T S
Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates.
1982
Transaction category, or sector
1980
1979
1981
1982
1983
1984r
1983
1984r
HI
H2
HI
H2
HI
H2
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
386.0
344.6
380.4
404.1
526.4
734.2
358.1
450.1
488.9
563.8
688.9
779.4
By public agencies and foreign
? Total net advances
3 U.S. government securities
Residential mortgages
4
5 FHLB advances to savings and loans
6 Other loans and securities
75.2
-6.3
35.8
9.2
36.5
97.0
15.7
31.7
7.1
42.4
97.7
17.2
23.5
16.2
40.9
109.1
18.0
61.0
.8
29.3
117.1
27.6
76.1
-7.0
20.5
142.3
36.0
56.0
15.7
34.6
100.8
9.7
47.6
11.1
32.4
117.3
26.2
74.4
-9.5
26.2
119.7
40.5
80.1
-12.1
11.1
114.6
14.6
72.0
-2.0
29.9
125.0
33.4
52.0
15.7
23.9
159.5
38.5
60.0
15.7
45.3
7
8
9
10
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
19.0
53.0
7.7
-4.6
23.7
45.6
4.5
23.2
24.1
48.2
9.2
16.3
16.0
65.3
9.8
18.1
9.7
69.5
10.9
27.1
18.8
72.1
8.4
42.9
14.8
61.8
3.8
20.4
17.1
68.7
15.7
15.8
9.1
68.2
15.6
26.8
10.3
70.7
6.2
27.4
7.4
73.0
17.1
27.5
30.2
71.2
-.3
58.4
11
12
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
47.9
20.2
44.8
27.2
47.4
27.2
64.9
15.7
67.8
18.9
74.4
.6
60.0
10.2
69.7
21.2
66.2
15.3
69.4
22.5
69.1
19.2
79.6
-18.0
Private domestic funds advanced
n Total net advances
14 U.S. government securities
15 State and local obligations
16 Corporate and foreign bonds
17 Residential mortgages
18 Other mortgages and loans
19 LESS: Federal Home Loan Bank advances
379.0
91.1
30.3
18.5
91.9
156.3
9.2
319.6
107.2
30.3
19.3
73.7
96.2
7.1
357.3
115.8
22.7
18.8
56.7
159.5
16.2
375.6
207.9
53.8
14.8
-3.2
103.2
.8
495.9
226.9
56.3
14.6
40.9
150.2
-7.0
666.9
237.3
58.9
25.1
88.1
273.1
15.7
327.5
153.7
43.9
-.1
11.0
130.2
11.1
423.8
262.0
63.7
29.6
-17.4
76.3
-9.5
450.8
247.8
62.8
22.9
6.4
98.7
-12.1
541.1
205.9
49.7
6.3
75.5
201.7
-2.0
652.2
213.2
21.7
22.8
102.2
308.0
15.7
681.5
261.3
96.1
27.5
74.1
238.1
15.7
Private financial intermediation
20 Credit market funds advanced by private financial
institutions
71 Commercial banking
2?
Savings institutions
23 Insurance and pension funds
24 Other finance
313.9
123.1
56.5
85.9
48.5
281.5
100.6
54.5
94.3
32.1
323.4
102.3
27.8
97.4
96.0
285.6
107.2
31.3
108.8
38.3
376.7
136.1
136.8
98.8
5.0
544.8
179.9
145.1
113.0
106.8
274.4
99.9
25.2
111.4
37.9
296.7
114.5
37.4
106.3
38.6
323.2
121.6
128.9
89.5
-16.8
430.1
150.6
144.6
108.1
26.8
535.1
193.0
163.9
96.8
81.2
554.6
166.8
126.3
129.1
132.3
25 Sources of funds
26 Private domestic deposits and RPs
27 Credit market borrowing
313.9
137.4
34.5
281.5
169.6
18.1
323.4
211.9
36.7
285.6
174.7
4.1
376.7
203.5
22.9
544.8
288.6
56.8
274.4
147.6
24.2
296.7
201.9
-16.0
323.2
192.7
7.8
430.1
214.2
38.0
535.1
283.5
54.3
554.6
293.6
59.2
78
29
30
31
32
142.0
27.6
72.8
41.2
93.9
-21.7
-2.6
83.9
34.2
74.8
-8.7
-1.1
90.4
-5.9
106.7
-26.7
6.1
104.6
22.8
150.4
22.1
-5.3
99.2
34.4
199.5
16.6
4.0
106.2
72.7
102.6
-28.3
-2.0
111.4
21.5
110.8
-25.1
14.1
97.8
24.1
122.8
-14.2
10.1
90.0
36.8
177.9
58.5
-20.8
108.4
31.9
197.3
15.7
.9
107.6
73.1
201.7
17.5
7.1
104.8
72.3
Private domestic nonfinancial investors
33 Direct lending in credit markets
34
U.S. government securities
35
State and local obligations
36 Corporate and foreign bonds
37 Open market paper
38 Other
99.6
52.5
9.9
-1.4
8.6
30.0
56.1
24.6
7.0
-5.7
-3.1
33.3
70.6
29.3
10.5
-8.1
2.7
36.3
94.2
37.4
34.4
-5.2
-.1
27.8
142.1
88.7
42.5
2.0
3.9
5.0
178.8
121.7
33.3
3.6
-.8
21.0
77.3
35.3
30.1
-17.7
3.5
26.2
111.0
39.5
38.7
7.3
-3.7
29.3
135.3
95.9
52.7
-1.7
-8.1
-3.4
148.9
81.4
32.3
5.7
15.9
13.5
171.5
131.3
5.6
15.3
-.3
19.6
186.1
112.2
61.0
-8.2
-1.3
22.4
39 Deposits and currency
40
Currency
41
Checkable deposits
Small time and savings accounts
42
43 Money market fund shares
44
Large time deposits
45
Security RPs
Deposits in foreign countries
46
146.8
8.0
18.3
59.3
34.4
18.8
6.6
1.5
181.1
10.3
5.2
82.9
29.2
45.8
6.5
1.1
221.9
9.5
18.0
47.0
107.5
36.9
2.5
.5
181.9
9.7
15.7
138.2
24.7
-7.7
3.8
-2.5
222.6
14.3
21.7
219.1
-44.1
-7.5
14.3
4.8
290.3
8.6
22.8
149.2
47.2
76.2
-6.8
-6.9
152.1
6.7
1.9
83.2
39.4
21.9
1.1
-2.2
211.7
12.7
29.5
193.1
10.0
-37.3
6.6
-2.9
214.5
14.8
48.0
278.6
-84.0
-61.0
11.0
7.0
230.7
13.8
-4.7
159.7
-4.2
45.9
17.5
2.7
294.9
17.7
36.6
123.0
30.2
92.4
1.3
-6.3
285.7
-.5
8.9
175.5
64.2
59.9
-15.0
-7.5
47 Total of credit market instruments, deposits and
currency
246.5
237.2
292.5
276.1
364.7
469.1
229.4
322.7
349.8
379.6
466.4
471.8
18.5
82.8
23.0
26.1
88.1
1.5
24.0
90.5
7.6
26.0
76.0
-8.6
21.5
76.0
49.2
19.4
81.7
59.5
27.4
83.8
-7.9
24.9
70.0
-9.3
23.7
71.7
12.6
19.5
79.5
85.9
17.6
82.0
43.1
21.0
81.4
75.9
-3.8
.1
-3.9
12.9
-16.7
22.2
5.2
17.1
24.9
-2.7
-4.1
6.3
-10.4
20.1
-24.2
35.3
18.4
16.9
39.2
-3.9
67.8
32.8
34.9
57.5
10.2
-35.4
37.5
-72.9
21.9
-57.2
23.3
12.5
10.9
11.0
12.3
47.2
24.3
22.9
67.3
-20.1
83.5
36.8
46.8
75.9
7.6
52.0
28.9
23.1
39.2
12.8
-43.3
39.0
-82.3
7.6
-50.8
-27.5
35.9
-63.4
36.2
-63.6
Other sources
Foreign funds
Treasury balances
Insurance and pension reserves
Other, net
48
49
50
Public holdings as percent of total
Private financial intermediation (in percent)
Total foreign funds
MEMO: Corporate equities not included above
51 Total net issues
52 Mutual fund shares
53 Other equities
54 Acquisitions by financial institutions
55 Other net purchases
.4
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.
A44
2.10
DomesticNonfinancialStatistics • September 1985
N O N F I N A N C I A L B U S I N E S S ACTIVITY
Selected Measures'
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1984
Measure
1982
1983
1985
1984
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
1
Industrial production
103.1
109.2
121.8
122.7
123.4
123.3
123.6
123.7
124.0
124.3
124.4
124.6
2
3
4
5
6
7
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
107.8
109.5
101.4
120.2
101.7
96.7
113.9
114.7
109.3
121.7
111.2
102.8
127.1
127.8
118.2
140.5
124.9
114.6
129.0
129.9
118.5
145.0
126.2
114.2
129.9
130.7
119.6
145.5
127.2
114.6
129.8
130.6
119.7
144.9
127.3
114.6
129.6
130.4
118.8
145.7
126.8
115.4
129.8
130.4
119.1
145.3
127.7
115.4
130.3
130.8
119.8
145.4
128.6
115.5
130.9
131.5
119.9
146.9
129.1
115.1
131.6
132.1
120.6
147.5
130.0
114.5
132.1
132.6
120.8
148.2
130.6
114.2
8
Industry groupings
Manufacturing
102.2
110.2
123.9
125.5
126.0
125.8
125.9
125.8
126.3
126.7
126.7
126.9
80.7
81.7
80.4
81.5
80.5
81.4
80.5
81.0
80.3
80.3
80.3
80.0
Capacity utilization (percent) 2
Manufacturing
9
Industrial materials industries
10
70.3'
71.7'
74.<Y
15 y
80.8'
82.3'
81.1'
81.3'
81.2'
81.5'
80.9'
81.3'
11
Construction contracts (1977 = 100)3
111.0
137.0
149.0
145.0
151.0
150.0
150.0
145.0
162.0
161.0
162.0
142.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, production-worker . . .
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income 5
Retail sales (1977 = 100)6
136.1
102.2
96.6
89.1
154.7
410.3
367.4
285.5
398.0
148. 1 '
137.1'
100.1'
94.8'
87.9
157.3'
435.6
388.6
294.7
427.1
162.0"
143.6'
106.1'
99.8'
94.0
164.1'
478.1
422.5
323.6
470.3
179.0'
145.2
106.9
100.5
93.5
166.3
488.8
428.8
326.7
480.6
180.9'
145.7
107.1
100.5
93.5
166.9
491.7
432.6
330.0
482.9
183.0'
146.0
107.5
100.8
93.7
167.2
493.9
436.7
333.2
484.5
183.4'
146.5
107.7
100.8
93.6
167.8
496.7
438.5
334.4
487.6
184.2'
146.8
107.5
100.6
93.3
168.3
499.4
440.5
332.9
484.7
186.1'
147.3
107.5
100.4
93.0
169.1
501.0
443.7
334.8
481.3
185.7'
147.6
107.6'
100.1
92.6
169.5
506.C
445.7'
333.5'
496.8'
191.5'
148.0
107.5
99.9
92.3
170.2
503.2
447.1
333.9
505.7
190.6
148.1
107.3
99.7
92.2
170.5
505.9
450.0
334.2
494.8
189.1
22
23
Prices 7
Consumer
Producer finished goods
289.1
280.7
298.4
285.2
311.1
291.2
315.3
291.5
315.3
292.3
315.5
292.0
316.1
292.1'
317.4
292.6'
318.8
292.4
320.1
293.1
321.3
294.2
322.3
294.0
1. A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See "A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1984 in t h e FEDERAL RESERVE BULLETIN, v o l . 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 will
be shown in the September BULLETIN.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. Dodge Division.
4. Based on data in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).
6. Based on Bureau of Census data published in Survey of Current Business.
7. Data without seasonal adjustment, as published in Monthly Labor Review.
Seasonally adjusted data for changes in the price indexes may be obtained from
the Bureau of Labor Statistics, U.S. Department of Labor.
NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and 6,
and indexes for series mentioned in notes 3 and 7 may also be found in the Survey
of Current Business.
Figures for industrial production for the last two months are preliminary and
estimated, respectively.
Selected Measures
2.11
A45
L A B O R FORCE, E M P L O Y M E N T , A N D U N E M P L O Y M E N T
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1985
1984
Category
1982
1983'
1984'
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
HOUSEHOLD SURVEY DATA
1 Noninstitutional population'
174,450
176,414
178,602
179,353
179,524
179,600
179,742
179,891
180,024
180,171
180,322
2 Labor force (including Armed Forces) 1
3 Civilian labor force
Employment
4
Nonagricultural industries 2
Agriculture
5
Unemployment
6
Number
7
Rate (percent of civilian labor force) . . .
8 Not in labor force
112,383
110,204
113,749
111,550
115,763
113,544
116,292
114,074
116,682
114,464
117,091
114,875
117,310
115,084
117,738
115,514
117,596
115,371
117,600
115,373
117,009
114,783
96,125
3,401
97,450
3,383
101,685
3,321
102,598
3,334
102,888
3,385
103,071
3,320
103,345
3,340
103,757
3,362
103,517
3,428
103,648
3,312
103,232
3,138
10,678
9.7
62,067
10,717
9.6
62,665
8,539
7.5
62,839
8,142
7.1
63,061
8,191
7.2
62,842
8,484
7.4
62,509
8,399
7.3
62,432
8,3%
7.3
62,153
8,426
7.3
62,428
8,413
7.3
62,571
8,413
7.3
63,313
89,566
90,196
94,461
95,882
96,092
96,419
96,591
96,910
97,120'
97,386
97,466
18,781
1,128
3,905
5,082
20,457
5,341
19,036
15,837
18,434
952
3,948
4,954
20,881
5,468
19,694
15,870
19,412
974
4,345
5,171
22,134
5,682
20,761
15,987
19,553
978
4,424
5,229
22,641
5,755
21,184
16,118
19,603
973
4,469
5,246
22,691
5,776
21,252
16,082
19,604
974
4,534
5,259
22,776
5,790
21,382
16,100
19,561
976
4,525
5,272
22,857
5,809
21,480
16,111
19,526
977
4,553
5,269
22,963
5,835
21,644
16,143
19,467'
982'
4,641'
5,278'
23,013
5,858
21,723
16,158'
19,427
981
4,655
5,305
23,137
5,890
21,808
16,183
19,382
976
4,649
5,318
23,201
5,909
21,891
16,140
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment3
10
11
12
13
14
IS
16
17
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
1. Persons 16 years of age and over. Monthly figures, which are based on
sample data, relate to the calendar week that contains the 12th day; annual data
are averages of monthly figures. By definition, seasonality does not exist in
population figures. Based on data from Employment and Earnings (U.S. Department of Labor).
2. Includes self-employed, unpaid family, and domestic service workers.
3. Data include all full- and part-time employees who worked during, or
received pay for, the pay period that includes the 12th day of the month, and
exclude proprietors, self-employed persons, domestic servants, unpaid family
workers, and members of the Armed Forces. Data are adjusted to the March 1984
benchmark and only seasonally adjusted data are available at this time. Based on
data from Employment and Earnings (U.S. Department of Labor).
A46
2.12
Domestic Nonfinancial Statistics • September 1985
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 adjusted
1985'
1984'
1984'
1985'
1984'
1985'
Series
Q4
Q3
Q1
Q2
Output (1977 = 100)
Q3
Q4
Q1
Q2
Capacity (percent of 1977 output)
Q4
Q3
Q1
Q2
Utilization rate (percent)
1 Total industry
123.4
123.1
123.8
124.4
150.6
151.7
152.8
154.0
81.9
81.2
81.0
80.8
2 Mining
3 Utilities
113.8
109.8
108.3
111.1
110.1
114.2
110.6
113.1
132.9
132.6
133.1
133.0
133.4
133.7
133.6
134.5
85.6
82.8
81.3
83.5
82.6
85.5
82.8
84.1
4 Manufacturing
125.6
125.8
126.0
126.8
153.9
155.2
156.5
157.7
81.6
81.0
80.5
80.4
5 Primary processing . . .
6 Advanced processing ,
107.6
136.3
107.0
137.0
107.5
137.1
107.7
138.3
131.2
167.6
131.4
169.6
131.6
171.4
132.0
173.2
82.0
81.3
81.5
80.8
81.6
80.0
81.6
79.8
7 Materials
116.0
114.5
115.4
114.6
139.8
140.7
141.6
142.5
83.0
81.4
81.5
80.4
8 Durable goods
9 Metal materials . . . .
10 Nondurable g o o d s . . . .
11 Textile, paper, and chemical..
Paper
12
13
Chemical
124.0
82.0
111.6
112.2
127.7
110.2
123.7
80.4
110.9
110.7
126.2
110.9
123.6
80.6
110.9
111.6
126.3
113.2
121.6
79.2
110.3
110.9
154.4
117.8
136.8
136.2
135.3
141.1
155.9
117.3
137.3
136.7
136.1
141.5
157.4
117.3
137.8
137.0
n.a.
n.a.
153.1
118.8
136.3
135.7
133.7
140.8
80.1
68.2
81.0
81.3
93.3
78.6
79.3
68.7
80.7
81.7
92.8
80.0
77.2
67.5
80.1
80.9
n.a.
n.a.
81.0
69.0
81.9
82.7
95.5
78.3
14 Energy materials
105.7
101.3
105.0
106.1
119.3
119.7
120.0
120.3
88.6
84.6
87.5
Previous cycle 1 '
High
Low
Latest cycle 2 '
1984'
High
June
Low
1984'
Oct.
Nov.
n.a.
n.a.
88.2
1985'
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
81.6
81.1
81.3
81.1
81.1
80.9
81.0
80.9
80.8
80.7
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
85.5
84.2
80.6
82.4
81.7
84.3
81.7
83.8
82.9
84.7
82.1
86.7
82.8
85.0
82.9
84.6
82.8
84.0
82.6
83.6
18 Manufacturing
87.7
69.9
86.5
68.0
81.1
81.1
81.2
80.9
80.7
80.4
80.5
80.5
80.3
80.3
19 Primary processing . . .
20 Advanced processing .
91.9
86.0
68.3
71.1
89.1
85.1
65.1
69.5
81.8
80.7
81.8
80.7
81.7
80.9
80.9
80.8
81.6
80.2
81.5
79.8
81.8
79.8
82.1
79.8
81.4
79.9
81.3
79.8
21 Materials
92.0
70.5
89.1
68.4
82.8
81.3
81.5
81.3
81.7
81.5
81.4
81.0
80.3
80.0
22 Durable goods
23 Metal materials
91.8
99.2
64.4
67.1
89.8
93.6
60.9
45.7
80.4
70.0
80.3
68.1
80.2
68.6
79.7
68.0
79.9
68.1
79.1
68.2
78.9
69.8
78.1
68.8
77.1
67.3
76.5
66.4
24 Nondurable goods . . . .
25 Textile, paper, and
26
27
chemical
Paper
Chemical
28 Energy materials
91.1
66.7
88.1
70.6
81.8
81.4
80.9
80.8
80.9
81.1
80.2
80.1
80.1
80.0
92.8
98.4
92.5
64.8
70.6
64.4
89.4
97.3
87.9
68.6
79.9
63.3
82.8
96.2
78.2
82.0
93.7
78.6
81.1
92.5
78.8
80.7
93.7
78.3
81.7
93.7
80.1
82.0
92.6
80.2
81.4
92.1
79.5
80.9
89.9
79.2
80.8
90.2
79.1
81.1
94.6
86.9
94.0
82.2
89.0
83.5
84.8
85.5
86.6
87.4
88.4
88.4
88.1
88.0
1. Monthly high 1973; monthly low 1975.
2. Monthly highs 1978 through 1980; monthly lows 1982.
n.a.
n.a.
NOTE. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
Selected Measures
2.13
INDUSTRIAL PRODUCTION
A47
Indexes and Gross Value A
Monthly data are seasonally adjusted
Grouping
1977
proportion
1985
1984
1984
avg.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Index (1977 = 100)
MAJOR MARKET
1 Total index
100.00
121.8
122.3
123.2
123.5
123.3
122.7
123.4
123.3
123.6
123.7
124.0
124.3
124.4
124.6
2 Products
3 Final products
4
Consumer goods
Equipment
5
57.72
44.77
25.52
19.25
127.1
127.8
118.2
140.5
127.5
128.2
118.5
141.0
128.6
129.2
119.1
142.5
129.0
129.7
118.4
144.5
128.8
129.8
118.3
145.0
129.0
129.9
118.5
145.0
129.9
130.7
119.6
145.5
129.8
130.6
119.7
144.9
129.6
130.4
118.8
145.7
129.8
130.4
119.1
145.3
130.3
130.8
119.8
145.4
130.9
131.5
119.9
146.9
131.6
132.1
120.6
147.5
132.1
132.6
120.8
148.2
6
Intermediate products
7 Materials
12.94
42.28
124.9
114.6
125.4
115.2
127.0
115.8
126.9
116.1
125.6
115.9
126.2
114.2
127.2
114.6
127.3
114.6
126.8
115.4
127.7
115.4
128.6
115.5
129.1
115.1
130.0
114.5
130.6
114.2
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
112.6
109.8
103.0
93.2
121.2
120.1
114.8
136.2
137.5
117.6
97.8
111.7
110.4
102.7
93.7
119.3
122.1
112.7
131.0
131.8
118.0
96.6
113.8
110.4
102.8
92.8
121.5
121.9
116.4
140.9
143.0
119.3
97.2
113.3
111.6
106.0
92.7
130.8
120.0
114.6
138.7
140.6
117.5
95.7
111.5
107.4
98.7
85.1
124.1
120.6
114.7
138.0
140.1
118.8
95.6
111.4
104.2
95.0
84.0
115.4
118.1
116.9
140.5
142.2
118.1
99.3
113.3
110.2
103.1
89.7
127.8
121.1
115.8
137.4
138.4
118.1
99.0
113.1
111.6
104.7
95.6
121.5
122.1
114.3
137.2
138.2
114.1
97.9
112.8
114.2
112.5
102.5
131.1
116.8
111.6
126.1
126.6
112.7
100.6
112.8
115.4
111.7
100.7
132.0
121.1
110.9
127.1
127.2
117.9
95.1
113.5
115.1
110.5
101.3
127.5
122.0
112.2
131.8
131.8
117.7
95.0
112.9
116.4
114.4
100.5
140.2
119.4
110.2
126.9
127.1
118.1
93.7
112.3
114.4
109.6
98.1
130.9
121.5
110.7
129.9
129.3
117.1
93.2
112.4
114.9
109.7
97.0
19 Nondurable consumer goods
20 Consumer staples
21
Consumer foods and tobacco
22
Nonfood staples
23
Consumer chemical products .
24
Consumer paper products
25
Consumer energy
26
Consumer fuel
27
Residential utilities
18.63
15.29
7.80
7.49
2.75
1.88
2.86
1.44
1.42
120.2
125.0
126.2
123.9
137.4
138.4
101.4
89.3
113.7
120.9
125.7
126.8
124.8
138.1
140.5
101.6
89.5
113.9
120.9
125.9
126.9
125.0
139.0
143.0
99.7
87.4
112.2
120.2
125.4
126.6
124.3
138.3
141.2
99.8
88.5
111.2
120.7
126.3
127.7
125.0
140.4
140.7
100.0
88.1
112.1
121.0
126.7
128.2
125.4
141.3
140.0
100.5
88.8
112.4
121.8
127.4
127.6
127.5
143.3
141.5
103.0
89.9
116.3
122.1
127.7
129.1
126.5
142.7
141.8
100.7
87.7
113.9
121.1
126.6
127.1
126.0
142.9
141.2
99.9
85.1
115.0
121.4
126.9
127.8
126.0
143.2
138.1
101.5
84.9
118.4
122.1
127.9
128.0
127.7
145.1
141.7
101.9
87.0
117.1
122.5
128.5
129.3
127.7
145.1
142.2
101.5
90.0
113.7
123.6
129.8
129.8
129.7
147.8
146.0
101.7
89.2
123.9
130.3
Equipment
28 Business and defense equipment
29 Business equipment
30
Construction, mining, and farm .,
31
Manufacturing
32
Power
33
Commercial
34
Transit
35 Defense and space equipment
18.01
14.34
2.08
3.27
1.27
5.22
2.49
3.67
139.6
134.9
66.6
109.4
79.2
209.2
98.6
157.9
139.9
135.5
66.6
109.7
79.8
212.1
95.3
157.2
141.4
137.0
68.9
110.6
80.3
213.5
97.6
158.5
143.5
139.1
68.1
113.4
80.3
216.5
100.6
160.7
144.1
139.2
67.9
113.3
82.4
216.9
99.3
163.4
144.1
139.1
69.5
112.7
83.7
216.4
98.5
163.5
144.6
139.8
68.2
112.4
83.8
217.1
102.9
163.3
143.9
138.4
68.5
111.5
84.5
214.5
100.9
165.3
145.5
140.4
68.8
111.6
82.5
217.4
106.7
165.3
145.6
140.0
68.3
112.3
81.8
217.0
104.9
167.3
146.1
140.2
67.1
112.0
79.6
218.9
104.5
169.0
147.7
142.0
68.4
112.4
81.8
221.7
106.4
170.1
148.3
142.1
67.5
113.9
82.0
222.8
103.1
172.6
149.0
142.6
5.95
6.99
5.67
1.31
114.0
134.2
137.9
118.0
114.3
134.9
138.4
119.5
114.3
137.8
142.0
119.5
115.3
136.9
141.3
117.4
114.7
134.9
138.7
118.2
114.6
136.1
140.1
118.8
115.7
137.1
140.9
120.4
114.7
138.0
141.4
122.9
116.2
135.9
140.2
117.1
115.7
137.9
141.1
124.1
116.9
138.6
141.9
124.5
117.1
139.3
143.2
122.4
118.3
139.9
144.5
118.8
20.50
4.92
5.94
9.64
4.64
122.3
98.0
164.5
108.6
86.4
122.4
97.2
164.8
109.1
87.2
123.5
97.5
168.6
108.8
86.5
124.4
99.0
170.1
109.2
85.6
124.0
98.8
169.9
108.5
85.0
123.7
98.9
168.6
108.7
84.8
123.9
99.1
169.1
108.7
85.2
123.4
99.8
168.8
107.4
84.0
124.2
102.6
166.7
109.1
83.5
123.3
102.2
164.2
109.0
84.1
123.3
102.1
163.3
109.6
85.1
122.5
101.8
161.4
109.2
85.0
121.3
101.1
158.0
109.1
88.5
120.8
101.1
157.2
108.5
45 Nondurable goods materials
46 Textile, paper, and chemical
materials
47
Textile materials
48
Pulp and paper materials
49
Chemical materials
50 Miscellaneous nondurable materials
10.09
111.2
111.2
111.6
111.6
111.4
111.2
110.7
110.7
110.9
111.4
110.3
110.3
110.4
110.4
7.53
1.52
1.55
4.46
2.57
111.6
101.5
126.5
109.9
109.8
112.0
102.1
127.6
110.0
108.7
111.8
103.2
128.5
109.1
110.8
112.5
104.5
127.0
110.1
109.0
112.3
99.2
127.7
111.5
108.4
111.5
98.5
126.2
110.8
109.9
110.5
93.7
125.1
111.5
90.3
127.5
113.3
109.2
112.1
93.5
126.0
113.5
109.4
111.3
93.0
125.4
112.7
107.2
110.7
94.1
122.4
112.3
109.0
110.8
93.8
122.9
112.4
109.2
111.2
111.1
111.1
110.1
91.2
127.2
110.6
112.1
51 Energy materials
52 Primary energy
53 Converted fuel materials
11.69
7.57
4.12
104.0
107.5
97.6
106.0
110.1
98.5
106.0
110.7
97.3
105.5
109.3
98.5
105.5
110.0
97.2
99.9
101.4
97.1
101.5
104.1
96.8
102.4
106.0
96.0
103.9
107.0
98.2
104.9
107.6
100.0
106.2
110.2
99.0
106.4
109.5
100.6
106.0
108.3
99.9
106.0
Consumer goods
8 Durable consumer goods
9
Automotive products
10
Autos and trucks
11
Autos, consumer
12
Trucks, consumer
13
Auto parts and allied goods
14 Home goods
15
Appliances, A/C and TV
16
Appliances and TV
17
Carpeting and furniture
18
Miscellaneous home goods
Intermediate products
36 Construction supplies
37 Business supplies
38 General business supplies
39 Commercial energy products
Materials
40 Durable goods materials
41 Durable consumer parts
42
Equipment parts
43
Durable materials n.e.c
44
Basic metal materials
122.6
110.5
129.0
130.1
113.5
82.1
223.8
103.2
174.3
A48
2.13
Domestic Nonfinancial Statistics • September 1985
INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued
Grouping
SIC
code
1977
proportion
1985
1984
1984
avg.
June
Aug.
July
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Index (1977 = 100)
MAJOR INDUSTRY
15.79
9.83
5.96
84.21
35.11
49.10
110.9
110.9
110.9
123.9
122.5
124.8
112.7
113.5
111.4
124.1
123.2
124.7
112.9
114.8
109.8
125.4
123.9
126.4
111.9
113.0
110.0
125.9
123.2
127.7
112.1
113.6
109.7
125.6
123.1
127.2
108.0
107.2
109.4
125.5
123.3
127.0
110.1
108.8
112.1
126.0
123.8
127.5
109.9
108.9
111.6
125.8
123.4
127.4
111.4
110.5
113.0
125.9
123.2
127.8
111.9
109.5
115.8
125.8
123.8
127.2
111.8
110.5
113.9
126.3
123.9
128.0
111.8
110.7
113.6
126.7
124.3
128.4
111.5
110.6
113.0
126.7
124.9
128.0
111.3
110.4
112.8
126.9
125.3
128.1
10
11.12
13
14
.50
1.60
7.07
.66
77.0
127.6
109.1
116.1
79.0
137.9
110.2
117.0
79.6
141.7
110.9
118.3
72.2
136.4
110.2
118.4
73.6
144.2
109.2
117.6
75.3
102.0
110.1
114.2
75.5
113.1
109.8
115.3
69.3
116.2
109.8
113.2
70.5
118.5
110.7
118.5
74.5
121.5
108.2
119.8
83.6
131.9
106.8
118.7
81.5
128.5
108.0
118.5
75.9
128.7
108.3
117.9
129.0
108.1
131.2
7
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
12
13
14
15
Tobacco products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
7.96
.62
2.29
2.79
3.15
127.1
100.7
103.7
102.8
127.3
127.4
102.0
105.0
102.9
127.2
127.8
100.9
105.7
102.3
128.2
127.7
97.3
103.5
101.3
128.2
128.2
99.6
100.9
100.1
128.9
129.1
103.1
100.3
100.5
127.6
128.7
102.7
97.1
101.1
127.7
129.0
107.4
94.7
102.5
128.8
128.2
97.2
93.6
102.6
128.3
129.4
103.8
98.5
103.1
126.4
128.5
103.4
99.4
101.3
126.9
130.8
98.4
99.7
100.2
125.3
98.5
100.0
125.1
16
17
18
19
20
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic products
Leather and products
27
28
29
30
31
4.54
8.05
2.40
2.80
.53
147.9
121.7
87.4
143.2
76.7
149.4
122.1
88.4
144.9
77.3
152.3
122.9
87.0
146.0
77.0
151.5
122.0
87.5
144.5
74.2
148.8
124.2
85.7
144.1
73.4
149.5
123.5
85.4
146.0
70.9
153.5
124.3
86.2
146.6
71.5
151.2
123.4
84.7
146.6
71.4
150.4
125.7
84.1
145.9
69.1
150.3
125.8
84.0
145.7
69.2
152.6
126.5
84.7
144.1
69.4
153.9
125.6
87.3
144.9
69.1
156.8
126.3
85.5
145.4
70.2
24
25
32
2.30
1.27
2.72
109.1
136.7
112.3
109.8
138.6
112.5
107.9
139.4
113.8
109.4
140.0
113.7
110.4
140.9
112.6
110.2
139.9
113.3
109.5
139.8
113.6
109.4
138.0
111.8
109.2
136.5
112.7
109.1
139.0
110.5
109.5
139.2
111.4
110.9
141.0
113.3
142.4
114.9
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
82.4
73.5
102.8
142.0
172.4
80.4
71.0
103.3
143.7
171.4
80.6
69.0
103.7
146.1
175.3
84.0
74.6
104.1
147.8
176.2
82.9
73.6
104.8
146.5
176.8
81.3
71.0
104.8
146.6
178.4
80.9
71.1
105.4
145.8
178.9
78.4
68.9
105.9
144.6
180.2
81.7
71.0
106.4
145.0
176.0
80.2
68.5
107.6
144.9
173.2
81.8
73.2
108.6
146.5
173.1
81.5
71.9
109.1
148.9
168.9
77.1
67.3
108.5
149.2
168.9
108.6
150.4
168.0
37
371
9.13
5.25
113.6
105.6
112.4
104.3
114.2
105.4
116.2
108.3
114.3
104.6
113.4
103.1
116.0
107.5
117.8
109.5
120.4
113.0
120.5
112.5
120.8
111.3
121.9
112.9
121.2
110.6
121.5
110.3
372-6.9
38
39
3.87
2.66
1.46
124.4
136.9
98.0
123.4
138.0
96.4
126.0
139.4
99.7
126.9
139.8
97.8
127.5
140.2
95.9
127.3
138.6
98.6
127.5
138.6
98.6
129.0
138.9
97.2
130.5
138.7
99.0
131.4
138.7
96.4
133.7
139.0
96.0
134.1
138.5
98.3
135.6
139.6
98.9
136.8
138.8
4.17
116.8
118.0
116.1
116.8
116.2
116.8
118.7
117.5
118.9
121.9
119.5
119.1
118.1
118.1
Nondurable
manufactures
Durable manufactures
21 Lumber and products
22 Furniture and fixtures
23 Clay, glass, stone products
24
25
26
27
28
Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery
29 Transportation equipment
30
Motor vehicles and parts
31 Aerospace and miscellaneous
transportation equipment
32 Instruments
Utilities
157.7
84.9
76.7
Gross value (billions of 1972 dollars, annual rates)
MAJOR MARKET
35 Products, total
596.0
745.6
749.5
748.1
752.4
749.2
753.7
759.2
756.5
761.3
764.2
769.5
774.3
776.3
36 Final
37 Consumer goods.
38 Equipment
39 Intermediate
472.7
309.2
163.5
123.3
593.7
356.5
237.6
151.8
596.7
357.7
239.4
152.7
593.7
355.0
239.1
154.3
598.0
354.1
244.3
154.3
596.8
352.5
244.8
152.3
600.4
355.5
245.4
153.2
605.2
359.0
246.7
154.0
601.8
606.5
358.8
608.7
360.9
613.3
364.6
617.4
366.1
618.1
366.6
620.1
367.3
154.9
155.5
156.3
156.9
158.1
158.9
• A major revision of the industrial production index and the capacity
utilization rates was released in July 1985. See "A Revision of the Index of
Industrial Production" and accompanying tables that contain revised indexes
( 1 9 7 7 = 1 0 0 ) t h r o u g h D e c e m b e r 1984 in t h e FEDERAL RESERVE BULLETIN, v o l . 71
360.0
242.3
154.6
(July 1985), pp. 487-501. The revised indexes for January through June 1985 will
be shown in the September BULLETIN.
NOTE. These data also appear in the Board's G. 12.3 (414) release. For address,
see inside front cover.
Selected Measures
2.14
A49
HOUSING A N D CONSTRUCTION
Monthly figures are at seasonally adjusted annual rates except as noted.
1985
1984
1982
Item
1983
1984
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May
Private residential real estate activity (thousands of units)
N E W UNITS
1 Permits authorized
1-family
2
3
2-or-more-family
1,000
546
454
1,605
902
703
1,682
922
759
1,542
853
689
1,517
866
651
1,477
827
650
1,616
846
770
1,599
843
756
1,635
903
732
1,624
927
697
1,741
993
748
1,704
948
756
1,778
933
845
4 Started
1-family
5
6
2-or-more-family
1,062
663
400
1,703
1,067
635
1,749
1,084
665
1,590
962
628
1,669
1,009
660
1,564
979
585
1,600
1,043
557
1,630
1,112
518
1,849
1,060
789
1,647
1,135
512
1,889
1,168
721
1,933
1,155
778
1,673
1,041
632
720
400
320
1,003
524
479
1,051
556
494
1,091
574
517
1,088
568
520
1,081
571
510
1,077
574
503
1,073
579
495
1,071
572
499
1,066
580
485
1,063
578
485
1,093
586
507
1,095
589
506
1,005
631
374
1,390
924
466
1,652
1,025
627
1,681
1,035
646
1,657
1,040
617
1,614
972
642
1,587
1,001
586
1,635
985
650
1,719
1,107
612
1,794
1,082
712
1,685
1,043
642
1,630
1,073
557
1,627
1,007
620
240
296
295
302
282
302
291
282
273
276
283
287
287
413
255
622
304
639
358
557
343
670
343
652
346
596
349
604
356
634
356
676'
360
696
359
616
363
676
362
7 Under construction, end of period 1
8
1-family
9
2-or-more-family
10 Completed
11
1-family
12 2-or-more-family
13 Mobile homes shipped
Merchant builder activity in I-family
14 Number sold
15 Number for sale, end of period 1
Price (thousands
Median
16
Units sold
Average
17
Units sold
units
of dollars)2
69.3
75.5
80.0
82.0
81.3
80.1
82.5
78.3
82.5
82.<Y
84.5
85.8
81.0
83.8
89.9
97.5
96.9
101.3
95.7
101.4
96.3
98.3
96.2'
100.9
105.4
99.4
1,991
2,719
2,868
2,770
2,730
2,740
2,830
2,870
3,000
2,880
3,030
3,040
3,040
67.7
80.4
69.8
82.5
72.3
85.9
73.5
87.6
71.9
85.4
71.9
86.2
71.9
85.1
72.1
85.9
73.8
87.7
73.5
87.2
74.2
88.6
74.5
89.7
75.0
90.1
21 Total put in place
236,935' 268,730' 312,989' 321,248' 320,957' 318,179' 313,076' 310,062' 341,038' 334,254' 333,723 338,281
343,525
77 Private
73
Residential
24
Nonresidential, total
Buildings
?5
Industrial
?6
Commercial
?7
Other
28
Public utilities and other
186,091' 218,016' 257,802' 265,384' 264,348' 261,963' 257,469' 254,547' 283,688' 276,452' 274,575 279,013
80,609' 121,309' 145,058' 149,834' 149,366' 144,043' 137,880' 134,296' 155,260' 146,042' 146,195 144,467
105,482' 96,707' 112,744' 115,550' 114,982' 117,920' 119,589' 120,251' 128,428' 130,410' 128,380 134,546
282,563
146,827
135,736
EXISTING UNITS (1-family)
18 Number sold
Price of units sold (thousands
19 Median
20 Average
of dollars)2
Value of new construction 3 (millions of dollars)
CONSTRUCTION
?9 Public
30
Military
31
Highway
V
Conservation and development
33
Other
17,346
37,281
10,507
40,348'
12,863
35,787
11,660
36,397'
13,746'
48,102'
12,298'
38,598'
13,962'
49,084'
11,852'
40,652'
14,663'
50,778'
12,052'
37,489'
14,333'
52,092'
11,916'
39,579'
14,645'
52,541'
11,771'
40,632'
14,440'
54,528'
12,15c
39,133'
15,195'
58,524'
11,889'
42,820'
15,815'
58,922'
12,054'
43,619'
14,585
59,382
11,245
43,168
17,155
61,292
12,745
43,354
17,463
61,554
13,297
43,422
50,843'
2,205
13,293'
5,029
30,316'
50,715'
2,544
14,143'
4,822
29,206'
55,186'
2,839'
16,295'
4,656'
31,396'
55,863'
2,864'
16,608'
4,590'
31,801'
56,609'
3,569'
16,475'
4,851'
31,714'
56,215'
2,902'
16,210'
4,748'
32,355'
55,608'
3,107'
16,939'
5,127'
30,435'
55,514'
2,952'
16,888'
4,654'
31,020'
57,350'
2,969'
17,759'
4,645'
31,977'
57,802'
3,036'
18,416'
4,674'
31,676'
59,148
3,078
19,176
4,727
32,167
59,268
3,038
19,674
4,377
32,179
60,962
3,083
20,239
5,091
32,549
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.
A50
2.15
Domestic Nonfinancial Statistics • September 1985
C O N S U M E R A N D P R O D U C E R PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Change from 1 month earlier
Index
level
June
Item
1984
1984
1985
June
June
Sept.
1985
Dec.
Mar.
1985
(1967
= 100)'
1985
June
Feb.
Mar.
Apr.
May
June
CONSUMER PRICES 2
1
All items
4.2
3.7
4.5
3.0
4.1
3.3
.3
.5
.4
.2
.2
322.3
2
3
4
5
6
Food
Energy items
All items less food and energy
Commodities
Services
3.4
.3
5.1
4.7
5.4
2.4
1.9
4.4
2.5
5.6
3.9
.1
5.3
3.8
6.2
3.7
-.7
3.5
.9
5.0
2.6
-.8
5.5
6.6
5.0
-.9
9.6
3.4
-1.4
6.4
.5
-1.4
.6
.8
.4
.0
1.9
.4
.3
.4
-.2
1.8
.3
.0
.4
-.1
.3
.3
-.2
.7
.1
.2
.3
-.2
.5
309.3
436.8
313.4
259.0
374.6
2.1
3.7
-3.3
2.5
2.5
1.1
-.8
-3.0
2.6
2.3
.0
4.5
-19.7
2.5
2.3
1.1
3.3
5.6
-.2
-1.1
1.0
-2.4
-21.0
6.6
6.5
1.9
-8.8
32.1
1.8
1.6
.1'
.1'
-2.5'
.4
.8'
.2
-.3'
-.8'
.6
.4
.3
-1.0
5.8
-.2
.0
.2
-1.1
3.4
.2
.0
.0
-.1
-2.0
.4
.4
294.0
268.5
741.9
251.9
300.7
-.5
-.2
-.1
-.1
.3
.0
.3
.2
.0
.2
326.6
306.0
- 2 .(X
-.4'
-2.5'
-.9'
1.4'
-3.0
.1
2.1
-2.4
2.0
-1.5
-.3
-1.5
.2
234.0
751.7
247.6
PRODUCER PRICES
7
8
9
10
11
Finished goods
Consumer foods
Consumer energy
Other consumer goods
Capital equipment
12
13
Intermediate materials 3
Excluding energy
3.2
3.4
.1
.6
-1.1
.9
1.2
1.5
-2.5
-1.0
2.7
1.2
14
15
16
Crude materials
Foods
Energy
Other
3.3
-.4
9.3
-10.1
-4.6
-9.2
-1.7
.4
-15.3
10.6
-7.6
-10.7
-24.1
-12.7
-13.4
-20.7
2.4
3.6
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.V
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected Measures
2.16
A51
GROSS NATIONAL PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1985
1984
Account
1982
1983
1984
Q2
Q3
Q4
Q1
Q2
GROSS NATIONAL PRODUCT
1
By source
2 Personal consumption expenditures
3
4
5
6
7
8
9
10
11
12
Nondurable goods
Services
Gross private domestic investment
Fixed investment
Nonresidential
Structures
Producers' durable equipment
Residential structures
Nonfarm
3,069.3
3,304.8
3,662.8
3,644.7
3,694.6
3,758.7
3,810.6
3,853.5
1,984.9
245.1
757.5
982.2
2,155.9
279.8
801.7
1,074.4
2,341.8
318.8
856.9
1,166.1
2,332.7
320.7
858.3
1,153.7
2,361.4
317.2
861.4
1,182.8
2,396.5
326.3
866.5
1,203.8
2,446.5
334.8
877.3
1,234.4
2,496.1
340.7
894.7
1,260.7
414.9
441.0
349.6
142.1
207.5
91.4
86.6
471.6
485.1
352.9
129.7
223.2
132.2
127.6
637.8
579.6
425.7
150.4
275.3
153.9
148.8
627.0
576.4
420.8
150.0
270.7
155.6
150.5
662.8
591.0
435.7
151.4
284.2
155.3
150.1
637.8
601.1
447.7
157.9
289.7
153.5
148.3
646.8
606.1
450.9
162.9
288.0
155.2
150.0
638.7
626.1
466.5
171.5
295.0
159.6
153.8
13
14
Change in business inventories
Nonfarm
-26.1
-24.0
-13.5
-3.1
58.2
49.6
50.6
47.0
71.8
63.7
36.6
27.2
40.7
34.1
12.6
8.8
IS
16
17
Net exports of goods and services
Exports
Imports
19.0
348.4
329.4
-8.3
336.2
344.4
-64.2
364.3
428.5
-58.7
362.4
421.1
-90.6
368.6
459.3
-56.0
367.2
423.2
-74.5
360.7
435.2
-91.1
349.5
440.7
18
19
20
Government purchases of goods and services
650.5
258.9
391.5
685.5
269.7
415.8
747.4
295.4
452.0
743.7
296.4
447.4
761.0
302.0
458.9
780.5
315.7
464.8
791.9
319.9
472.0
809.8
325.2
484.6
3,095.4
1,276.7
499.9
776.9
1,510.8
281.7
3,318.3
1,355.7
555.3
800.4
1,639.3
309.8
3,604.6
1,542.9
655.6
887.3
1,763.3
356.5
3,594.1
1,544.8
647.9
896.9
1,742.6
357.2
3,622.8
1,549.1
654.7
894.4
1,783.3
362.1
3,722.1
1,579.8
687.7
892.1
1,813.7
365.2
3,770.0
1,583.8
677.1
906.7
1,857.2
369.6
3,840.9
1,574.6
658.3
916.3
1,891.7
387.3
-26.1
-18.0
-8.1
-13.5
-2.1
-11.3
58.2
30.4
27.8
50.6
18.2
32.4
71.8
41.7
30.1
36.6
26.7
9.9
40.7
29.0
11.7
12.6
-3.8
16.4
1,480.0
1,534.7
1,639.3
1,638.8
1,645.2
1,662.4
1,663.5
1,670.7
2,446.8
2,646.7
2,959.9
2,944.8
2,984.9
3,036.3
3,076.5
n.a.
1,864.2
1,568.7
306.6
1,262.2
295.5
140.0
155.5
1,984.9
1,658.8
328.2
1,331.1
326.2
153.1
173.1
2,173.2
1,804.1
349.8
1,454.2
369.0
173.5
195.5
2,159.2
1,793.3
347.5
1,445.8
365.9
172.4
193.5
2,191.9
1,819.1
352.0
1,467.1
372.8
174.7
198.1
2,228.1
1,848.2
357.2
1,490.9
380.0
177.5
202.5
2,272.7
1,882.8
365.5
1,517.3
389.8
183.6
206.3
2,306.5
1,910.2
370.7
1,539.5
396.3
186.1
210.2
111.1
121.7
107.9
13.8
154.4
126.2
28.2
149.8
126.3
23.4
153.7
126.4
27.3
159.1
129.7
29.4
159.8
134.0
25.7
161.7
138.5
23.2
State and local
By major type of product
71
7?
73
74
?5
26
Goods
Durable
Nondurable
71 Change in business inventories
78
29
Nondurable goods
30 MEMO: Total G N P in 1972 dollars
NATIONAL INCOME
31
32
33
34
35
36
37
38
Compensation of employees
39
40
41
Proprietors' income 1
Business and professional 1
42
Rental income of persons 2
51.5
58.3
62.5
62.0
63.0
64.1
64.8
67.1
43
44
45
46
Corporate profits'
Profits before tax 3
Inventory valuation adjustment
Capital consumption adjustment
159.1
165.5
-9.5
3.1
225.2
203.2
-11.2
33.2
285.7
235.7
-5.7
55.7
291.1
246.0
-7.3
52.3
282.8
224.8
-.2
58.3
291.6
228.7
-1.6
64.5
292.3
222.3
.9
69.1
n.a.
n.a.
.1
76.4
47
Net interest
260.9
256.6
284.1
282.8
293.5
293.4
287.0
280.0
Government and government enterprises
Other
Supplement to wages and salaries
Employer contributions for social insurance
Other labor income
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
89.2
21.8
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A52
2.17
Domestic Nonfinancial Statistics • September 1985
PERSONAL INCOME A N D SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1985
1984
Account
1982
Q2
Q3
Q4
Q1
PERSONAL INCOME AND SAVING
1 Total personal income
2.584.6
2,744.2
3,012.1
2,984.6
3,047.3
3,096.2
3,143.8
2 Wage and salary disbursements
3
Commodity-producing industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises
1.568.7
509.3
382.9
378.6
374.3
306.6
1,659.2
519.3
395.2
398.6
413.1
328.2
1.804.0
569.3
433.9
432.0
452.9
349.8
1,793.1
567.0
432.2
429.5
449.3
347.3
1,819.5
573.3
436.4
436.4
457.3
352.4
1,847.6
580.9
442.4
443.1
466.9
356.7
1.882.7
590.9
447.9
449.0
477.4
365.4
155.5
173.1
121.7
107.9
13.8
58.3
70.3
376.3
405.0
193.5
149.8
126.3
23.4
221.6
195.5
154.4
126.2
28.2
62.5
77.7
433.7
416.7
237.3
198.1
153.7
126.4
27.3
63.0
78.5
449.3
418.6
238.2
202.5
159.1
129.7
29.4
64.1
80.2
456.1
421.8
243.5
206.3
159.8
134.0
25.7
64.8
81.4
456.0
439.2
249.6
111.4
119.6
132.5
131.8
133.4
135.2
146.4
2,584.6
2,744.2
3.012.1
2,984.6
3.047.3
3,0%.2
3.143.8
8
9
10
11
12
13
14
15
16
17
Other labor income
Proprietors' income 1
Business and professional 1
Farm 1
Rental income of persons 2
Dividends
Personal interest income
Transfer payments
O l d - a g e survivors, disability, and health insurance benefits.
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
111.1
89.2
21.8
51.5
66.5
366.6
376.1
204.5
62.0
77.2
425.6
415.2
235.2
404.1
404.2
435.3
430.3
440.9
451.7
489.0
20 EQUALS: Disposable personal income
2,180.5
2,340.1
2,576.8
2,554.3
2.606.4
2,644.5
2,654.8
21
LESS: Personal outlays
2,044.5
2,222.0
2,420.7
2,409.5
2,442.3
2,481.5
2,536.2
22 EQUALS: Personal saving
136.0
118.1
156.1
144.8
164.1
163.0
118.6
6,369.7
4,145.9
4,555.0
6,926.1
4,488.7
4,939.0
6.1
6.933.2
4.502.3
4,930.0
5.7
6,943.2
4,498.4
4,965.0
6.3
6,998.3
4,527.1
4,996.0
6.2
6,543.4
4,302.8
4,670.0
5.0
6.2
6,989.0
4,575.7
4,965.0
4.5
27 Gross saving.
408.8
437.2
551.8
551.0
556.4
556.0
550.7
28
29
30
31
524.0
136.0
29.2
-9.5
571.7
118.1
76.5
674.8
156.
115.4
-5.7
660.2
689.4
164.1
118.4
-.2
698.2
163.0
662.1
118.6
120.8
122.5
-1.6
.9
244.1
156.0
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
Gross private saving
Personal saving
Undistributed corporate profits 1
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
137.1
.0
231.2
145.9
.0
246.2
157.0
.0
248.1
158.8
.0
252.8
161.5
.0
.0
257.4
163.7
.0
-115.3
-148.2
32.9
-134.5
-178.6
44.1
-122.9
-175.8
52.9
-109.2
-163.7
54.5
-133.0
-180.6
47.6
-142.2
-197.8
55.6
-111.4
-165.1
53.7
221.8
38 Capital grants received by the United States, net
39 Gross investment
40 Gross private domestic
41 Net foreign
42 Statistical discrepancy.
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
-11.2
144.8
115.3
-7.3
414.9
-6.6
.0
.0
.0
.0
.0
.0
437.7
544.4
542.0
543.4
546.1
542.6
471.6
-33.9
637.8
-93.4
627.0
-85.0
662.8
-119.4
637.8
-91.6
646.8
-104.2
-7.4
-9.0
-13.0
-9.9
-8.1
SOURCE. Survey of Current Business
(Department of Commerce).
Summary Statistics
3.10
U.S. INTERNATIONAL TRANSACTIONS
A53
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted.1
1984
1984
1982
Item credits or debits
Ql
Q2
Q3
Q1P
Q4
-8,051
-40,790
-101,532
-19,064
-18,395
-24,493
-24,654
-32,500
-35,724
-25,477
-22,759
-29,997
-29,079
-36,444
211,198
-247,642
-318
29,493
7,353
-62,012
200,745
-262,757
-163
25,401
4,837
-108,281
220,316
-328,597
-1,765
19,109
819
-25,569
53,753
-79,322
-346
8,234
829
-25,649
54,677
-80,326
-593
3,618
363
-32,507
55,530
-88,037
-250
3,256
-123
-24,557
56,355
-80,912
-575
4,003
-253
-29,437
55,811
-85,248
-89
2,626
78
-2,633
-5,501
-2,566
-6,287
-2,891
-8,522
-732
-1,480
-710
-1,522
-669
-2,207
-782
-3,313
-857
-2,318
-6,131
-5,006
-5,516
-2,059
-1,353
-1,369
-734
-795
-4,965
-1,196
-3,130
-657
-565
-799
-1,109
0
-233
0
-1,371
-2,552
-1,041
-66
-226
-288
-4,434
3,304
-979
-995
-1,156
-200
-321
44
-271
-331
-197
-194
-143
-772
-264
281
-250
-11,800
-8,504
6,266
-5,059
-4,503
-2,260
-111,070
6,626
-8,102
4,425
-48,842
-29,928
-6,513
-7,007
-5,394
-17,070
-20,186
1,908
-756
1,964
20,532
17,725
2,099
-1,313
2,021
-13,003
-4,933
970
-3,663
-5,377
-2,165
-285
n.a.
-2,461
581
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
3,672
5,779
-694
684
-1,747
-350
5,795
6,972
-476
552
545
-1,798
3,424
4,690
167
453
663
-2,549
-2,786
-275
3
233
-2,147
-686
-600
-224
-274
146
555
328
-979
-575
85
-139
430
-487
7,119
5,814
-67
-197
2,052
-483
-11,402
-7,227
-307
-532
-3,219
-117
28 Change in foreign private assets in the United States
(increase, +) 3
29
U.S. bank-reported liabilities
30
U.S. nonbank-reported liabilities
31
Foreign private purchases of U.S. Treasury securities, net
32
Foreign purchases of other U.S. securities, net
33
Foreign direct investments in the United States, net 3
90,775
65,922
-2,383
7,052
6,392
13,792
78,527
49,341
-118
8,721
8,636
11,947
93,895
31,674
4,284
22,440
12,983
22,514
22,063
11,348
4,520
1,396
1,494
3,305
41,816
20,970
4,566
6,485
506
9,289
3,825
-5,125
-2,939
5,058
1,603
5,228
26,191
4,481
-1,863
9,501
9,380
4,692
27,923
13.011
n.a.
2,677
9,522
2,713
1 Balance on current account
2
Not seasonally adjusted..
3
4
5
6
7
8
9
10
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)
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
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
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
34 Allocation of SDRs
35 Discrepancy
36
Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
adjustment
0
-108,121
0
0
0
-231
-1,110
1,289
673
-3,112
0
0
0
0
0
0
0
0
0
0
32,821
11,513
24,660
4,763
-422
1,889
10,997
-3,170
7,013
-4,200
16,669
-343
-606
17.012
32,821
11,513
24,660
-4,965
-1,196
-3,131
-657
-566
-799
-1,110
-233
2,988
5,243
2,971
-3,019
-779
-547
7,316
-10,870
7,291
-8,283
-4,143
-2,405
-2,097
-453
812
-2,013
585
194
190
41
44
45
61
15
5,185
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 not calculated for lines
38-41.
2. Data are on an international accounts (IA)
basis data, shown in table 3.11, for reasons of
exports are excluded from merchandise data and
3. Includes reinvested earnings.
6, 10, 12-16, 18-20, 22-34, and
basis. Differs from the Census
coverage and timing; military
are included in line 6.
4. Primarily associated with military sales contracts and other transactions
arranged with or through foreign official agencies.
5. Consists of investments in U.S. corporate stocks and in debt securities of
private corporations and state and local governments.
NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business
(Department of Commerce).
A54
3.11
International Statistics • September 1985
U.S. FOREIGN TRADE
Millions of dollars; monthly data are seasonally adjusted.
1984
Item
1982
1981
Nov.
1 EXPORTS of domestic and foreign
merchandise excluding grant-aid
shipments
233,677
1985
1983
212,193
200,486
Dec.
18,395
Jan.
19,142
Feb.
19,401
Mar.
17,853
Apr.
18,446
May
17,779
17,414
2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded
warehouses
261,305
243,952
258,048
27,331
25,933
28,297
27,985
28,129
28,295
28,685
3 Trade balance
-27,628
-31,759
-57,562
-8,936
-6,791
-8,896
-10,131
-9,683
-10,516
-11,271
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, end of period
1984
Type
1981
1982
1985
1983
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
1 Total
30,075
33,958
33,747
34,934
34,380
34,272
35,493
35,493
35,782
36,088
2 Gold stock, including Exchange Stabilization Fund 1
11,151
11,148
11,121
11,0%
11,095
11,093
11,093
11,091
11,091
11,091
3
Special drawing rights2-3
4,095
5,250
5,025
5,641
5,693
5,781
5,973
5,971
6,163
6,1%
4
Reserve position in International Monetary Fund 2
5,055
7,348
11,312
11,541
11,322
11,097
11,386
11,382
11,370
11,394
5
Foreign currencies 4
9,774
10,212
6,289
6,656
6,270
6,301
7,041
7,049
7,158
7,408
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.
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE B A N K S
Millions of dollars, end of period
1984
Assets
1982
1981
1985
1983
Jan.
Dec.
1 Deposits
Assets held in custody
2 U.S. Treasury securities 1
3 Earmarked gold2
Mar.
Apr.
May
June
505
328
190
253
244
331
253
348
204
310
104,680
14,804
112,544
14,716
117,670
14,414
118,267
14,265
117,330
14,261
115,179
14,260
113,532
14,264
115,184
14,264
116,989
14,265
121,755
14,262
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.
Feb.
NOTE. Excludes deposits and U.S. Treasury securities held for international
and regional organizations. Earmarked gold is gold held for foreign and international accounts and is not included in the gold stock of the United States.
Summary Statistics
3.14
FOREIGN BRANCHES OF U.S. BANKS
A55
Balance Sheet Data1
Millions of dollars, end of period
1985
1984
1983
1981
Asset account
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May P
All foreign countries
462,847
1 Total, all currencies
? Claims on United States
Parent bank
4 Other banks in United States 2
5 Nonbanks 2
6 Claims on foreigners
7 Other branches of parent bank
8 Banks
9 Public borrowers
10 Nonbank foreigners
11 Other assets
12 Total payable in U.S. dollars
n Claims on United States
14 Parent bank
15 Other banks in United States 2
16 Nonbanks 2
17 Claims on foreigners
18 Other branches of parent bank
19 Banks
20 Public borrowers
21 Nonbank foreigners
22 Other assets
469,712
477,090
63,743
43,267
91,805
61,666
115,542
82,026
378,954
87,821
150,763
28,197
112,173
358,493
91,168
133,752
24,131
109,442
342,689
96,004
117,668
24,517
107,785
452,914
112,815
77,958
13,313
21,544
319,431
91,313
103,050
22,907
102,161
452,205
445,041
452,883
462,098
460,428
458,198
113,435
78,151
13,664
21,620
318,710
94,717'
100,328r
22,872
100,793
115,501
79,318
13,686
22,497
309,193
87,351'
99,871'
22,441
99,530
119,034'
84,084'
13,737
21,213
314,247'
89,184'
104,373'
22,219
98,471
119,927'
86,809'
13,092
20,026
321,759'
92,990'
105,258'
22,492
101,019
121,376
86,472
14,199
20,705
318,991
91,329
104,303
22,844
100,515
120,234
84,702
14,101
21,431
317,283
91,341
102,249
22,783
100,910
20,150
19,414
18,859
20,668
20,060
20,347
20,412
20,061
20,681
350,735
361,982
371,508
345,511
349,342
343,461
351,7%
354,570'
351,280
349,433
62,142
42,721
90,085
61,010
113,436
80,909
276,937
69,398
122,110
22,877
62,552
259,871
73,537
106,447
18,413
61,474
247,406
78,431
93,332
17,890
60,977
110,442
76,763
13,121
20,558
224,251
74,600
77,096
17,374
55,181
111,468
77,271
13,500
20,697
227,303
78,279'
76,872'
17,160
54,992
113,250
78,392
13,493
21,365
219,768
72,326'
75,756'
16,994
54,692
116,730'
83,074'
13,464
20,192
224,714'
74,248'
79,217'
16,754
54,495
117,562'
85,727'
12,790
19,045
226,966'
77,229'
78,755'
17,001'
53,981
118,786
85,339
13,844
19,603
222,693
75,085
76,874
16,976
53,758
117,786
85,733
13,708
20,345
221,738
75,582
75,642
16,999
53,515
11,656
12,026
10,666
10,818
10,571
10,443
10,352'
10,042
9,801
9,909
_
19,602'
United Kingdom
23 Total, all currencies
24 Claims on United States
75 Parent bank
76 Other banks in United States 2
77 Nonbanks 2
28 Claims on foreigners
29 Other branches of parent bank
30 Banks
31 Public borrowers
32 Nonbank foreigners
161,067
158,732
149,377
144,385
146,130
149,534
150,705
148,711
148,285
11,823
7,885
27,354
23,017
34,433
29,111
138,888
41,367
56,315
7,490
33,716
127,734
37,000
50,767
6,240
33,727
119,280
36,565
43,352
5,898
33,465
29,502
23,773
1,484
4,245
114,264
37,395
39,262
5,424
32,183
27,731
21,918
1,429
4,384
111,772
37,897
37,443
5,334
31,098
28,783
22,296
1,540
4,947
112,284
36,367
39,063
5,345
31,509
31,910
25,313
1,561
5,036
112,937
35,381
40,961
5,306
31,289
29,675
23,250
1,511
4,914
115,889
35,857
40,812
5,186
34,034
29,497
22,803
1,649
5,045
114,122
34,469
41,253
4,959
33,441
29,424
22,647
1,613
5,164
113,720
34,868
39,910
4,921
34,021
-»
33 Other assets
34 Total payable in U.S. dollars
35 Claims on United States
36 Parent bank
37 Other banks in United States 2
38 Nonbanks 2
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
47 Public borrowers
43 Nonbank foreigners
157,229
6,518
5,979
5,019
5,611
4,882
5,063
4,687
5,141
5,092
5,141
115,188
123,740
126,012
114,895
112,809
112,953
116,232
114,122
111,497
111,303
11,246
7,721
26,761
22,756
33,756
28,756
5,UUU
99,850
35,439
40,703
5,595
18,113
92,228
31,648
36,717
4,329
19,534
88,917
31,838
32,188
4,194
20,697
28,610
23,378
1,437
3,795
82,971
32,669
27,290
4,094
18,918
26,924
21,551
1,363
4,010
82,889
33,551
26,805
4,030
18,503
27,807
21,960
1,4%
4,351
82,161
31,899
27,465
4,021
18,776
30,945
24,911
1,498
4,536
82,268
31,099
28,523
3,964
18,682
28,839
22,910
1,466
4,463
82,437
31,331
27,982
3,804
19,320
28,570
22,472
1,576
4,522
79,938
29,489
27,808
3,533
19,108
28,504
22,354
1,491
4,659
79,917
30,148
27,188
3,527
19,054
4,092
4,751
3,339
3,314
2,996
2,985
3,019
2,846
2,989
2,882
144,665
147,041
145,0%
144,033
79,150
53,008
11,647
14,495
62,164
14,716
29,887
6,683
10,878
78,849
51,902
11,723
15,224
61,604
15,271
28,942
6,604
10,787
1
44 Other assets
Bahamas and Caymans
149,108
45 Total, all currencies
46 Claims on United States
47
Parent bank
48 Other banks in United States 2
49
Nonbanks 2
50 Claims on foreigners
51 Other branches of parent bank
5? Banks
53 Public borrowers
54
Nonbank foreigners
55 Other assets
56 Total payable in U.S. dollars
1
145,156
152,083
46,546
31,643
59,403
34,653
75,309
48,720
98,057
12,951
55,151
10,010
19,945
81,450
18,720
42,699
6,413
13,618
72,868
20,626
36,842
6,093
12,592
75,655
48,202
11,043
16,410
62,024
13,837
30,529
6,075
11,583
146,811
77,296
49,449
11,544
16,303
65,598
17,661'
30,246'
6,089
11,602
141,834
76,856
48,892
11,326
16,638
61,204
14,382'
29,230'
6,162
11,430
76,446
50,043
11,305
15,098
64,408
16,235'
30,927'
6,081
11,165
78,886
53,937
10,761
14,188
64,339
15,685'
31,481'
6,349
10,824
4,505
4,303
3,906
3,931
3,917
3,774
3,811
3,816
3,782
3,580
143,743
139,605
145,641
136,211
141,562
137,090
139,543
141,543
139,926
138,724
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
141,610
2. Data for assets vis-a-vis other banks in the United States and vis-a-vis
nonbanks are combined for dates before June 1984.
A56
3.14
International Statistics • September 1985
Continued
1984
Nov.
1985
Dec.
Jan.
Feb.
Mar.
Apr.
MayP
All foreign countries
57 Total, all currencies
462,847
469,712
477,090
452,914
452,205
445,041
452,883
462,098
460,428
458,198
58 Negotiable CDs 3
59 To United States
Parent bank
60
61
Other banks in United States
62
Nonbanks
n.a.
137,767
56,344
19,197
62,226
n.a.
179,015
75,621
33,405
69,989
n.a.
188,070
81,261
29,453
77,356
37,915
138,498
70,284
18,679
49,535
37,725
146,955
78,111
18,409
50,435
38,804
143,680
75,230
18,125
50,325
41,798
140,914
72,338
17,831
50,745
40,889
145,%9'
76,038'
18,021'
51,910
38,940
144,%5
75,844
18,841
50,280
37,188
145,278
77,869
18,782
48,627
63 To foreigners
Other branches of parent bank
64
65
Banks
66 Official institutions
Nonbank foreigners
67
68 Other liabilities
305,630
86,396
124,906
25,997
68,331
19,450
270,853
90,191
96,860
19,614
64,188
19,844
269,685
90,615
92,889
18,896
68,845
19,335
254,099'
90,681
86,822
20,883
55,713'
22,402'
247,122'
93,206
78,203
20,281
55,432'
20,403'
241,595'
87,722
79,291
19,484
55,098'
20, %2'
249,675'
89,872
84,013
19,356
56,434'
20,496'
253,635'
93,978'
82,611
20,831
56,215'
21,605'
254,953
91,856
83,607
21,854
57,636
21,570
253,653
91,332
81,557
21,657
59,107
22,079
69 Total payable in U.S. dollars
364,447
379,270
388,291
361,875
365,859
357,853
366,054
369,049
365,257
363,416
70 Negotiable CDs 3
71 To United States
72 Parent bank
73 Other banks in United States
74 Nonbanks
n.a.
134,700
54,492
18,883
61,325
n.a.
175,528
73,295
33,040
69,193
n.a.
184,305
79,035
28,936
76,334
35,608
134,303
67,761
18,128
48,414
35,227
142,943
75,626
17,935
49,382
36,295
139,811
72,892
17,587
49,332
39,544
137,154
70,084
17,302
49,768
38,197
141,614'
73,597'
17,472'
50,545
35,958
140,288
73,229
18,270
48,789
34,216
140,549
75,233
18,209
47,107
75 To foreigners
Other branches of parent bank
76
77
Banks
Official institutions
78
Nonbank foreigners
79
80 Other liabilities
217,602
69,299
79,594
20,288
48,421
12,145
192,510
72,921
57,463
15,055
47,071
11,232
194,139
73,522
57,022
13,855
51,260
9,847
180,841
74,552
50,509
16,068
39,712
11,123
177,638
77,222
45,131
15,773
39,512
10,051
171,479
72,648
44,948
14,861
39,022
10,268
178,745
74,926
48,734
14,653
40,432
10,611
179,007'
78,441'
44,812
16,049
39,705
10,231
178,787
76,024
45,167
17,178
40,418
10,224
178,815
75,595
44,433
17,237
41,550
9,836
United Kingdom
81 Total, all currencies
157,229
161,067
158,732
149,377
144,385
146,130
149,534
150,705
148,711
148,285
82 Negotiable CDs 3
83 To United States
84 Parent bank
Other banks in United States
85
Nonbanks
86
n.a.
38,022
5,444
7,502
25,076
n.a.
53,954
13,091
12,205
28,658
n.a.
55,799
14,021
11,328
30,450
34,269
25,338
15,060
3,074
7,204
34,413
25,250
14,651
3,125
7,474
35,455
27,757
16,714
3,569
7,474
38,281
23,439
13,763
2,948
6,728
37,350
23,982
14,509
2,918
6,555
35,326
23,920
13,%9
2,665
7,286
33,661
24,909
14,159
2,735
8,015
87 To foreigners
88 Other branches of parent bank
89 Banks
90 Official institutions
91
Nonbank foreigners
92 Other liabilities
112,255
16,545
51,336
16,517
27,857
6,952
99,567
18,361
44,020
11,504
25,682
7,546
95,847
19,038
41,624
10,151
25,034
7,086
81,217
20,846
34,739
10,505
15,127
8,553
77,424
21,631
30,436
10,154
15,203
7,298
75,039
20,199
31,216
9,084
14,540
7,879
80,418
22,146
33,789
9,374
15,141'
7,364
80,722
23,699
32,003
10,305
14,715
8,651
80,977
21,951
32,259
11,590
15,177
8,488
80,940
21,908
31,593
11,090
16,349
8,775
93 Total payable in U.S. dollars
120,277
130,261
131,167
119,287
117,497
117,198
120,623
117,984
116,128
115,740
94 Negotiable CDs 3
95 To United States
Parent bank
%
Other banks in United States
97
98
Nonbanks
n.a.
37,332
5,350
7,249
24,733
n.a.
53,029
12,814
12,026
28,189
n.a.
54,691
13,839
11,044
29,808
33,168
24,024
14,688
2,862
6,474
33,070
24,105
14,339
2,980
6,786
34,084
26,587
16,349
3,420
6,818
37,033
22,386
13,506
2,804
6,076
35,719
22,481
14,129
2,748
5,604
33,763
22,219
13,507
2,500
6,212
32,140
23,244
13,755
2,550
6,939
99 To foreigners
100 Other branches of parent bank
101 Banks
102 Official institutions
103 Nonbank foreigners
104 Other liabilities
79,034
12,048
32,298
13,612
21,076
3,911
73,477
14,300
28,810
9,668
20,699
3,755
73,279
15,403
29,320
8,279
20,277
3,197
58,163
17,562
20,262
9,072
11,267
3,932
56,923
18,294
18,356
8,871
11,402
3,399
52,954
16,940
17,889
7,748
10,377
3,573
57,654
18,772
20,022
7,854
11,006
3,550
56,327
20,127
17,191
8,734
10,275
3,457
56,535
18,513
17,497
9,989
10,536
3,611
56,849
18,494
17,437
9,517
11,401
3,507
Bahamas and Caymans
149,108
145,156
152,083
141,610
146,811
141,834
144,665
147,041
145,0%
144,033
106 Negotiable CDs 3
107 To United States
108 Parent bank
109 Other banks in United States
110 Nonbanks
n.a.
85,759
39,451
10,474
35,834
n.a.
104,425
47,081
18,466
38,878
n.a.
111,299
50,980
16,057
44,262
898
95,975
40,517
14,187
41,271
615
102,955
47,162
13,938
41,855
734
98,466
43,783
13,320
41,363
953
99,200
43,358
13,590
42,252
779
103,0%
45,441
13,959
43,696
634
100,480
43,750
15,112
41,618
436
99,370
45,557
14,545
39,268
111 To foreigners
112 Other branches of parent bank
113 Banks
114 Official institutions
115 Nonbank foreigners
116 Other liabilities
60,012
20,641
23,202
3,498
12,671
3,337
38,274
15,7%
10,166
1,967
10,345
2,457
38,445
14,936
11,876
1,919
11,274
2,339
41,764
16,455
13,993
2,376
8,940
2,973
40,320
16,782
12,405
2,054
9,079
2,921
39,785
16,014
12,274
2,020
9,477
2,849
41,529
17,111
12,976
1,992
9,450
2,983
40,308
16,744
12,503
1,884
9,177
2,858
41,102
17,179
13,469
1,598
8,856
2,880
41,437
17,759
12,879
2,194
8,605
2,790
145,284
141,908
148,278
137,874
143,590
138,200
140,973
143,223
140,945
139,909
105 Total, all currencies
117 Total payable in U.S. dollars
3. Before June 1984, liabilities on negotiable CDs were included in liabilities to
the United States or liabilities to foreigners, according to the address of the initial
purchaser.
Summary Statistics
3.15
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1984
Item
1 Total 1
2
3
4
5
6
7
8
9
10
11
12
By type
Liabilities reported by banks in the United States 2
U.S. Treasury bills and certificates 3
U.S. Treasury bonds and notes
Marketable
Nonmarketable 4
U.S. securities other than U.S. Treasury securities 5
By area
Western Europe 1
Canada
Latin America and Caribbean
Asia
Africa
Other countries 6
1982
Nov.
Dec.
Jan.
Feb.
Mar/
Apr.
May''
172,718
177,950
178,468
180,640
176,828
173,334
169,816
170,555
173,314
24,989
46,658
25,534
54,341
25,986
59,570
26,197
59,976
23,310
56,662
23,420
52,474
22,991
54,685
22,711
57,226
22,940
56,691
67,733
8,750
24,588
68,514
7,250
22,311
67,076
5,800
20,036
68,995
5,800
19,672
71,522
5,800
19,534
72,846
5,300
19,294
67,601
5,300
19,239
67,003
4,900
18,715
70,310
4,500
18,873
61,298
2,070
6,057
96,034
1,350
5,909
67,645
2,438
6,248
92,572
958
8,089
70,510
1,466
8,904
90,115
1,423
6,050
69,756
1,528
8,645
93,951
1,290
5,470
68,260
1,491
7,450
93,044
1,120
5,463
67,354
1,136
7,278
91,030
1,397
5,139
63,746
1,715
7,518
90,721
1,200
4,916
65,650
1,403
7,528
89,968
1,403
4,603
67,799
1,558
7,897
90,142
1,262
4,656
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
1985
1983
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
NOTE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States.
LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies
Millions of dollars, end of period
1984
Item
1981
1982
June
1 Banks'own liabilities
2 Banks' own claims
3 Deposits
Other claims
4
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.
3,523
4,980
3,398
1,582
971
4,844
7,707
4,251
3,456
676
1985
1983
5,219
7,231
2,731
4,501
1,059
6,459
9,687
4,284
5,404
227
Sept.
6,227
9,334
3,685
5,649
281
Dec.
Mar.
7,501
10,956
4,119
6,837
569
8,012
12,639
6,148
6,491
440
NOTE. Data on claims exclude foreign currencies held by U.S. monetary
authorities,
A58
3.17
International Statistics • September 1985
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
Reported by Banks in the United States
Millions of dollars, end of period
1984
Holder and type of liability
1981A
1982
1985
1983
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Mayf
1 All foreigners
243,889
307,056
369,607
399,681
406,381
398,987
405,198
413,225'
410,701
410,940
2 Banks' own liabilities
3 Demand deposits
4 Time deposits 1
Other 2
6 Own foreign offices 3
163,817
19,631
29,039
17,647
97,500
227,089
15,889
68,797
23,184
119,219
279,087
17,470
90,632
25,874
145,111
297,857
18,351
112,218
23,684
143,604
306,758
19,542
110,235
26,332
150,650
301,398
17,975
114,145
23,542
145,736
311,627
19,369
117,065
24,991
150,202
317,097'
18,131'
119,228'
25,127'
154,611'
312,743
18,294
117,761
24,228
152,460
315,250
17,680
120,666
25,597
151,307
80,072
55,315
79,967
55,628
90,520
68,669
101,824
76,531
100,074
75,838
97,588
73,635
93,572
69,189
96,128
71,552
97,958
73,077
95,690
71,597
18,788
5,970
20,636
3,702
17,467
4,385
19,703
5,590
18,775
5,460
18,141
5,812
18,068
6,315
18,099
6,477
18,338
6,543
17,530
6,563
2,721
4,922
5,957
5,852
4,083
6,929
5,812
5,905
6,112
6,694
638
262
58
318
1,909
106
1,664
139
4,632
297
3,584
750
2,779
354
2,114
311
1,644
263
1,093
288
3,571
417
2,682
472
2,092
341
936
815
2,333
191
1,488
654
3,083
167
2,276
640
4,389
264
3,747
377
2,083
541
3,013
1,621
1,325
463
3,073
1,448
2,440
916
3,358
1,921
3,719
2,258
3,572
2,082
3,029
1,434
2,305
775
1,542
0
1,392
0
862
0
1,604
21
1,524
0
1,429
8
1,461
1
1,490
0
1,593
2
1,531
0
20 Official institutions8
79,126
71,647
79,876
85,556
86,173
79,972
75,894
77,675'
79,937
79,631
21 Banks' own liabilities
Demand deposits
22
23 Time deposits 1
24
Other 2
17,109
2,564
4,230
10,315
16,640
1,899
5,528
9,212
19,427
1,837
7,318
10,272
18,790
2,133
9,457
7,201
19,065
1,823
9,391
7,852
16,970
1,780
8,371
6,818
17,249
1,881
8,673
6,694
16,777'
1,923
8,469'
6,385'
16,571
1,975
9,126
5,471
17,439
1,596
8,564
7,279
25 Banks' custody liabilities4
26
U.S. Treasury bills and certificates 5
27
Other negotiable and readily transferable
instruments 6
Other
28
62,018
52,389
55,008
46,658
60,448
54,341
66,766
59,570
67,108
59,976
63,002
56,662
58,645
52,474
60,898
54,685
63,366
57,226
62,192
56,691
9,581
47
8,321
28
6,082
25
7,010
186
7,038
94
6,277
63
6,086
85
6,109
105
6,007
133
5,291
210
29 Banks9
136,008
185,881
226,887
239,806
248,360
241,515
250,039
257,565'
252,944
251,723
30 Banks' own liabilities
31
Unaffiliated foreign banks
Demand deposits
32
33
Time deposits 1
34
Other 2
35
Own foreign offices 3
124,312
26,812
11,614
8,720
6,477
97,500
169,449
50,230
8,675
28,386
13,169
119,219
205,347
60,236
8,759
37,439
14,038
145,111
214,240
72,635
9,430
47,717
15,488
143,604
225,512
74,862
10,526
47,059
17,278
150,650
218,980
73,244
9,030
48,612
15,602
145,736
227,703
77,501
9,656
50,982
16,862
150,202
235,132'
80,521'
9,154'
54,222'
17,144'
154,611'
230,511
78,052
9,266
51,613
17,173
152,460
229,806
78,499
8,722
52,770
17,007
151,307
36 Banks' custody liabilities4
37
U.S. Treasury bills and certificates
38 Other negotiable and readily transferable
instruments 6
Other
39
11,696
1,685
16,432
5,809
21,540
10,178
23,566
11,409
22,848
10,927
22,535
10,933
22,336
10,493
22,433
10,602
22,432
10,446
21,917
10,216
4,400
5,611
7,857
2,766
7,485
3,877
7,360
4,797
7,156
4,766
6,487
5,114
6,254
5,589
6,206
5,625
6,235
5,751
6,095
5,606
40 Other foreigners
26,035
44,606
56,887
68,467
68,215
70,571
73,454
72,079'
71,708
72,891
41 Banks' own liabilities
42
Demand deposits
43 Time deposits
Other 2
44
21,759
5,191
16,030
537
39,092
5,209
33,219
664
49,680
6,577
42,290
813
60,048
6,433
52,930
685
60,537
6,930
52,693
914
61,877
6,747
54,481
650
7,491
56,473
619
62,855'
6,863'
55,049'
943'
62,577
6,887
54,746
945
63,616
7,098
55,585
934
4,276
699
5,514
1,540
7,207
3,686
8,419
4,103
7,678
4,020
8,693
4,118
8,871
3,964
9,224
4,182
9,131
3,971
9,275
3,915
3,265
312
3,065
908
3,038
483
3,730
586
3,058
601
3,948
628
4,267
640
4,294
748
4,503
657
4,613
746
10,747
14,307
10,346
10,437
10,476
9,287
9,169
9,412
9,145
9,081
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
12 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
45 Banks' custody liabilities4
46
U.S. Treasury bills and certificates
47
Other negotiable and readily transferable
instruments 6
48
Other
49 MEMO: Negotiable time certificates of
deposit in custody for foreigners
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.
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 oflice or parent foreign bank, and
foreign branches, agencies or wholly owned subsidiaries of head office or parent
foreign bank.
4. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
5. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments, and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
3.17
Data
Continued
1985
1984
Area and country
1981A
1982
1983
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
r
MayP
1 Total
243,889
307,056
369,607
399,681
406,831
398,987
405,198
413,225
410,701
410,940
2 Foreign countries
241,168
302,134
363,649
393,829
402,748
392,057
399,387
407,320'
404,589
404,246
91,275
596
4,117
333
296
8,486
7,645
463
7,267
2,823
1,457
354
916
1,545
18,716
518
28,286
375
6,541
49
493
117,756
519
2,517
509
748
8,171
5,351
537
5,626
3,362
1,567
388
1,405
1,390
29,066
296
48,172
499
7,006
50
576
138,072
585
2,709
466
531
9,441
3,599
520
8,462
4,290
1,673
373
1,603
1,799
32,246
467
60,683
562
7,403
65
596
150,659
627
3,613
434
487
11,935
3,425
602
11,056
5,077
1,693
552
1,873
1,839
31,494
457
67,964
565
6,429
54
481
152,395
615
4,114
438
418
12,701
3,353
699
10,757
4,799
1,548
597
2,082
1,676
31,054
584
68,553
602
7,184
79
542
149,264
734
4,000
452
425
11,908
3,586
615
9,477
4,663
1,712
570
2,016
2,133
31,397
495
68,039
545
5,855
66
575
152,221
625
4,638
530
735
12,430
3,258
583
9,108
4,622
1,635
614
1,887
1,486
31,580
501
70,269
602
6,628
60
431
151,660'
670
4,797
452
804
12,782'
2,923'
730
8,412
4,934
1,889
715
2,079'
1,667
30,421'
527
70,289'
671
6,286'
94
517
149,218
537
4,795
557
476
13,627
3,539
649
7,895
4,448
2,138
698
2,000
1,901
30,059
506
68,350
648
5,790
125
480
151,001
627
4,619
494
604
14,179
3,727
586
8,464
4,550
1,995
665
2,030
1,689
29,742
384
69,708
585
5,828
67
461
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
10,250
12,232
16,026
16,549
16,048
16,233
18,263
17,228'
17,006
16,214
25 Latin America and Caribbean
26 Argentina
27 Bahamas
28 Bermuda
29 Brazil
30 British West Indies
31 Chile
32 Colombia
33 Cuba
34 Ecuador
35 Guatemala
36 Jamaica
37 Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41 Uruguay
42 Venezuela
43 Other Latin America and Caribbean
85,223
2,445
34,856
765
1,568
17,794
664
2,993
9
434
479
87
7,235
3,182
4,857
694
367
4,245
2,548
114,163
3,578
44,744
1,572
2,014
26,381
1,626
2,594
9
455
670
126
8,377
3,597
4,805
1,147
759
8,417
3,291
140,088
4,038
55,818
2,266
3,168
34,545
1,842
1,689
8
1,047
788
109
10,392
3,879
5,924
1,166
1,244
8,632
3,535
149,794
4,558
55,470
3,222
4,997
34,385
2,063
2,057
8
1,029
884
110
13,422
4,180
6,847
1,209
1,309
10,013
4,030
153,985
4,424
56,955
2,370
5,332
36,949
2,001
2,514
10
1,092
896
183
12,695
4,153
6,928
1,247
1,394
10,545
4,297
151,229
4,523
55,398
2,706
4,920
35,269
1,948
2,356
26
912
920
157
13,298
4,346
6,873
1,151
1,485
10,667
4,275
154,787
4,354
56,928
3,410
6,143
35,157
1,916
2,453
8
981
915
182
13,000
4,662
7,149
1,064
1,413
10,740
4,311
157,708'
4,551'
59,60c
2,799'
4,656'
36,593'
1,897'
2,540'
6'
1,024'
950
163
13,240'
4,576
7,488
1,132
1,443
10,649'
4,401
156,766
4,664
59,069
3,159
4,743
35,765
1,909
2,401
6
1,022
955
154
13,165
4,383
7,584
1,077
1,461
10,791
4,458
157,050
4,912
58,195
3,192
5,376
35,483
1,922
2,452
7
987
979
146
13,658
4,439
7,554
1,162
1,492
10,696
4,3%
44 Asia
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle-East oil-exporting countries 3
Other Asia
49,822
48,716
58,570
66,952
71,139
66,536
64,981
72,095'
73,205
71,543
158
2,082
3,950
385
640
592
20,750
2,013
874
534
12,992
4,853
203
2,761
4,465
433
857
606
16,078
1,692
770
629
13,433
6,789
249
4,051
6,657
464
997
1,722
18,079
1,648
1,234
747
12,976
9,748
844
5,142
6,535
606
893
1,023
20,750
1,609
1,252
1,458
13,399
13,442
1,153
4,975
7,240
507
1,033
1,268
20,929
1,691
1,396
1,257
16,804
12,886
1,075
5,098
6,558
554
1,136
1,003
21,662
1,560
1,327
1,161
15,965
9,437
1,068
5,187
6,648
725
914
994
22,551
1,584
1,113
1,050
15,202
7,945
980
5,306
6,937
738
1,052
941
24,540'
1,526
1,102
1,384'
16,391
11,200'
912
5,242
7,091
554
1,104
873
22,755
1,595
1,223
1,141
16,273
14,441
698
5,381
7,360
546
1,031
990
22,754
1,598
1,305
1,167
16,316
12,396
57 Africa
58 Egypt
59 Morocco
60 South Africa
61 Zaire
62 Oil-exporting countries 4
63 Other Africa
3,180
360
32
420
26
1,395
946
3,124
432
81
292
23
1,280
1,016
2,827
671
84
449
87
620
917
3,599
739
117
460
163
1,141
978
3,506
757
118
328
153
1,189
961
3,170
541
115
376
76
1,186
876
3,561
637
116
371
79
1,450
910
3,476
715
167
244
100
1,346
903
3,517
747
155
339
128
1,177
969
3,429
618
189
273
124
1,114
1,112
64 Other countries
65 Australia
66 All other
1,419
1,223
196
6,143
5,904
239
8,067
7,857
210
6,277
5,598
679
5,674
5,290
384
5,624
5,248
377
5,574
5,017
557
5,152
4,743'
409
4,877
4,456
422
5,009
4,608
401
67 Nonmonetary international and regional
organizations
International
Latin American regional
Other regional5
2,721
1,661
710
350
4,922
4,049
517
357
5,957
5,273
419
265
5,852
5,055
593
204
4,083
3,376
587
120
6,929
6,165
600
165
5,812
4,935
580
296
5,905
5,132
632
141
6,112
5,247
706
159
6,694
5,636
834
224
45
46
47
48
49
50
51
57,
53
54
55
56
68
69
70
• 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.
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."
A59
A60
3.18
International Statistics • September 1985
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1984
Area and country
1981A
1982
1985
1983
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
1 Total
251,589
355,705
391,312
384,634
398,722
386,911
393,182
3%,898'
389,647
390,440
2 Foreign countries
251,533
355,636
391,148
384,072
398,048
385,986
392,882
3%,658'
389,567
390,342
49,262
121
2,849
187
546
4,127
940
333
5,240
682
384
529
2,095
1,205
2,213
424
23,849
1,225
211
377
1,725
85,584
229
5,138
554
990
7,251
1,876
452
7,560
1,425
572
950
3,744
3,038
1,639
560
45,781
1,430
368
263
1,762
91,927
401
5,639
1,275
1,044
8,766
1,284
476
9,018
1,267
690
1,114
3,573
3,358
1,863
812
47,364
1,718
477
192
1,598
97,930
532
4,988
520
1,098
9,299
1,261
819
8,854
1,229
602
1,262
3,017
2,313
2,275
1,097
54,637
1,866
625
169
1,467
97,%2
433
4,794
648
898
9,085
1,305
817
9,079
1,351
675
1,243
2,884
2,220
2,201
1,130
55,184
1,886
5%
142
1,391
%,044
339
4,683
589
817
8,617
1,001
896
8,040
1,480
651
1,212
2,858
2,497
2,308
1,232
54,843
1,862
671
118
1,329
97,995
367
5,097
589
907
9,602
945
840
8,481
1,490
808
1,286
3,135
2,586
2,110
1,155
54,648
1,783
679
178
1,308
101,759'
484
5,233
638
826
10,042'
1,072
848'
8,711'
1,348'
621'
1,186'
2,978'
2,342
1,921'
1,172
58,381'
1,793
642
203'
1,317
99,500
519
5,161
601
804
10,273
1,008
907
8,256
1,401
748
1,151
2,890
2,338
1,853
1,147
56,264
1,892
640
245
1,402
100,004
552
5,264
560
700
10,462
1,018
921
7,798
1,040
753
1,158
2,587
2,177
1,631
1,162
57,820
1,940
760
312
1,390
3 Europe
4 Austria
5 Belgium-Luxembourg
b 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
9,193
13,678
16,341
15,778
16,057
16,343
19,082
18,766'
18,155
17,883
138,347
7,527
43,542
346
16,926
21,981
3,690
2,018
3
1,531
124
62
22,439
1,076
6,794
1,218
157
7,069
1,844
187,969
10,974
56,649
603
23,271
29,101
5,513
3,211
3
2,062
124
181
29,552
839
10,210
2,357
686
10,643
1,991
205,491
11,749
59,633
566
24,667
35,527
6,072
3,745
0
2,307
129
215
34,802
1,154
7,848
2,536
977
11,287
2,277
199,058
10,983
54,084
635
26,275
33,727
6,703
3,406
0
2,431
148
222
35,288
1,337
7,360
2,358
990
10,994
2,118
207,577
11,043
58,027
592
26,307
38,105
6,839
3,499
0
2,420
158
252
34,697
1,350
7,707
2,384
1,088
11,017
2,091
199,378
11,453
54,369
5%
25,886
35,358
6,746
3,369
0
2,477
154
242
34,021
1,273
6,864
2,414
1,053
10,968
2,135
200,730
11,280
54,548
448
26,146
36,806
6,713
3,406
1
2,489
157
253
33,655
1,393
7,071
2,337
1,021
10,929
2,077
202,808'
11,162'
57,608'
464'
26,124'
36,299'
6,775
3,313'
0
2,470
154
233
33,410
1,254
7,083
2,345
1,019
10,956'
2,139'
198,827
11,163
55,526
633
26,207
35,377
6,676
3,246
0
2,467
154
223
32,473
1,319
7,039
2,353
1,014
10,804
2,154
201,320
11,346
56,843
776
26,477
35,873
6,634
3,270
0
2,487
149
237
32,747
1,386
6,751
2,310
1,013
10,947
2,072
49,851
60,952
67,837
61,398
66,380
64,387
65,351
63,595'
63,383
61,739
107
2,461
4,132
123
352
1,567
26,797
7,340
1,819
565
1,581
3,009
214
2,288
6,787
222
348
2,029
28,379
9,387
2,625
643
3,087
4,943
292
1,908
8,489
330
805
1,832
30,354
9,943
2,107
1,219
4,954
5,603
543
1,679
6,945
381
797
1,938
26,421
8,8%
2,487
1,112
4,687
5,512
710
1,849
7,368
425
734
2,088
29,059
9,285
2,550
1,125
5,054
6,133
507
1,745
6,801
299
710
1,993
28,495
8,799
2,499
1,123
5,004
6,411
741
1,827
7,351
354
780
2,041
29,092
8,813
2,560
1,076
4,856
5,860
65C
1,954'
6,639
284
780
1,941
28,008'
9,298'
2,435
1,005
4,708
5,895
572
1,976
6,844
307
704
2,004
26,591
9,406
2,360
939
5,509
6,171
545
1,639
7,290
270
701
2,038
25,477
9,120
2,384
852
5,546
5,878
57 Africa
58 Egypt
59
Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries 5
63
Other
3,503
238
284
1,011
112
657
1,201
5,346
322
353
2,012
57
801
1,802
6,654
747
440
2,634
33
1,073
1,727
6,719
693
536
2,960
19
911
1,600
6,615
728
583
2,795
18
842
1,649
6,536
668
552
2,791
41
812
1,672
6,376
584
582
2,666
29
791
1,724
6,221
674
584
2,420
24
8^
1,700'
6,299
629
595
2,508
24
893
1,651
6,203
612
577
2,497
24
871
1,621
64 Other countries
65
Australia
All other
66
1,376
1,203
172
2,107
1,713
394
2,898
2,256
642
3,189
2,487
702
3,456
2,778
678
3,297
2,593
704
3,348
2,635
713
3.51C
2,824
686'
3,403
2,755
648
3,192
2,533
658
56
68
164
562
674
925
300
240
80
98
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
30 British West Indies
31
Chile
32 Colombia
33 Cuba
34
Ecuador
35
Guatemala 3
36 Jamaica 3
37
Mexico
38 Netherlands Antilles
39 Panama
40 Peru
41
Uruguay
42
Venezuela
43
Other Latin America and Caribbean
44
45
46
47
48
49
50
51
52
53
54
55
56
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle East oil-exporting countries 4
Other Asia
67 Nonmonetary international and regional
organizations 6
• 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.
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 before April 1978 include claims of banks' domestic
customers on foreigners.
Nonbank-Reported
3.19
Data
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States
Payable in U.S. Dollars
Millions of dollars, end of period
1984
Type of claim
1981A
1982
1985
1983
Nov.
Dec.
Jan.
Feb.
386,911
61,364
153,586
116,903
45,070
71,832
55,058
393,182
61,860
154,500
121,340
47,685
73,655
55,481
Mar/
1 Total
287,557
396,015
426,215
2
3
4
5
6
7
8
251,589
31,260
96,653
74,704
23,381
51,322
48,972
355,705
45,422
127,293
121,377
44,223
77,153
61,614
391,312
57,569
146,393
123,837
47,126
76,711
63,514
35,968
1,378
40,310
2,491
34,903
2,969
32,916
3,380
33,646
3,871
26,352
30,763
26,064
23,805
24,576
8,238
7,056
5,870
5,732
5,198
29,952
38,153
37,715
36,575
35,204
40,369
42,499
46,217 R
Banks' own claims on foreigners
Foreign public borrowers
Own foreign offices 1
Unaffiliated foreign banks
Deposits
Other
All other foreigners
9 Claims of banks' domestic customers2 . .
431,639
384,634
61,443
144,809
120,890
45,788
75,102
57,492
398,722
61,371
156,497
123,775
48,112
75,663
57,080
Apr.
MayP
389,647
60,910
154,905
119,255
47,636
71,619
54,577
390,440
60,974
156,768
119,171
48,096
71,074
53,526
39,079
n.a.
430,544
3%,898
61,676
157,933
122,145
49,672
72,473
55,143
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
44,322
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
40,096
41,8%
39,916
39,593
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.
• 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.
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1984
Maturity; by borrower and area
1 Total
2
3
4
5
6
7
By borrower
Maturity of 1 year or less 1
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
Canada
Latin America and Caribbean
Asia
Africa
All other 2
Maturity of over 1 year 1
14 Europe
15 Canada
16 Latin America and Caribbean
17
18 Africa
19 All other 2
8
9
10
11
12
13
198! A
1985
1983
June
Sept.
Dec.
Mar.
154,590
228,150
243,715
249,904
240,595
243,049
239,222
116,394
15,142
101,252
38,197
15,589
22,608
173,917
21,256
152,661
54,233
23,137
31,095
176,158
24,039
152,120
67,557
32,521
35,036
172,474
21,066
151,407
77,430
37,747
39,683
162,863
21,059
141,804
77,731
38,410
39,321
165,200
22,076
143,124
77,849
39,620
38,229
164,883
23,4%
141,387
74,339
38,088
36,251
28,130
4,662
48,717
31,485
2,457
943
50,500
7,642
73,291
37,578
3,680
1,226
56,117
6,211
73,660
34,403
4,199
1,569
59,924
6,959
65,136
34,012
4,790
1,652
56,773
5,841
61,479
32,252
4,798
1,720
58,170
5,978
60,692
33,450
4,442
2,468
60,269
7,481
60,071
30,651
4,109
2,301
8,100
1,808
25,209
1,907
900
272
11,636
1,931
35,247
3,185
1,494
740
13,576
1,857
43,888
4,850
2,286
1,101
12,778
2,203
54,249
5,098
1,865
1,237
11,249
1,801
56,568
5,106
1,857
1,150
9,590
1,890
57,834
5,386
2,033
1,116
8,545
2,181
55,372
5,235
1,963
1,043
• 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.
1982
1. Remaining time to maturity,
2. Includes nonmonetary international and regional organizations,
A61
A62
International Statistics • September 1985
CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1
Billions of dollars, end of period
3.21
1982
Area or country
1 Total
1980
1983
1984
1985
1981
Dec.
June
Sept.
Dec.
Mar.
June 7
Sept.
Dec.
Mar.P
352.0
415.2
438.7
439.9
431.0
437.3
435.1
430.6
410.1
407.7
409.2
162.1
13.0
14.1
12.1
8.2
4.4
2.9
5.0
67.4
8.4
26.5
175.5
13.3
15.3
12.9
9.6
4.0
3.7
5.5
70.1
10.9
30.2
179.7
13.1
17.1
12.7
10.3
3.6
5.0
5.0
72.1
10.4
30.2
177.1
13.3
17.1
12.6
10.5
4.0
4.7
4.8
70.8
10.8
28.5
168.8
12.6
16.2
11.6
9.9
3.6
4.9
4.2
67.8
8.9
29.0
168.0
12.4
16.3
11.3
11.4
3.5
5.1
4.3
65.4
8.3
29.9
166.0
11.0
15.9
11.7
11.2
3.4
5.2
4.3
65.1
8.6
29.7
157.7
10.9
14.2
10.9
11.5
3.0
4.3
4.2
60.5
8.9
29.3
148.0
9.8
14.3
10.0
9.7
3.4
3.5
3.9
57.4
8.1
27.9
147.6
8.8
14.1
9.0
10.1
3.9
3.2
3.9
59.8
7.8
27.2
152.0
9.4
14.5
8.9
10.0
3.7
3.1
4.2
64.4
9.0
24.8
13 Other developed countries
14 Austria
15 Denmark
16 Finland
17 Greece
18 Norway
19 Portugal
20
Spain
21
Turkey
22
Other Western Europe
South Africa
23
24
Australia
21.6
1.9
2.3
1.4
2.8
2.6
.6
4.4
1.5
1.7
1.1
1.3
28.4
1.9
2.3
1.7
2.8
3.1
1.1
6.6
1.4
2.1
2.8
2.5
33.7
1.9
2.4
2.2
3.0
3.3
1.5
7.5
1.4
2.3
3.7
4.4
34.5
2.1
3.4
2.1
2.9
3.4
1.4
7.2
1.4
2.0
3.9
4.5
34.3
1.9
3.3
1.8
2.9
3.2
1.4
7.1
1.5
2.1
4.7
4.4
36.1
1.9
3.4
2.4
2.8
3.3
1.5
7.1
1.7
1.8
4.7
5.5
35.7
2.0
3.4
2.1
3.0
3.2
1.4
7.1
1.9
1.8
4.8
5.2
37.1
1.9
3.1
2.3
3.3
3.2
1.7
7.3
2.0
1.9
4.7
5.7
36.3
1.8
2.9
1.9
3.2
3.2
1.6
6.9
2.0
1.7
5.0
6.2
33.8
1.6
2.2
1.9
2.9
3.0
1.4
6.5
1.9
1.7
4.5
6.1
33.0
1.6
2.1
1.8
2.9
2.9
1.4
6.4
1.9
1.7
4.2
6.2
25 OPEC countries 2
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
22.7
2.1
9.1
1.8
6.9
2.8
24.8
2.2
9.9
2.6
7.5
2.5
27.4
2.2
10.5
3.2
8.7
2.8
28.3
2.2
10.4
3.2
9.5
3.0
27.2
2.1
9.8
3.4
9.1
2.8
28.9
2.2
9.9
3.8
10.0
3.0
28.6
2.1
9.7
4.0
9.8
3.0
26.7
2.1
9.5
4.0
8.4
2.7
25.0
2.1
9.2
3.8
7.4
2.5
25.6
2.2
9.3
3.7
8.2
2.3
25.3
2.2
9.2
3.6
7.8
2.4
31 Non-OPEC developing countries
77.4
96.3
107.1
108.8
109.8
111.6
112.2
112.8
111.9
112.2
111.3
7.9
16.2
3.7
2.6
15.9
1.8
3.9
9.4
19.1
5.8
2.6
21.6
2.0
4.1
8.9
22.9
6.3
3.1
24.5
2.6
4.0
9.4
22.7
5.8
3.2
25.3
2.6
4.3
9.5
23.1
6.3
3.2
25.9
2.4
4.2
9.5
23.1
6.4
3.2
26.1
2.4
4.2
9.5
25.1
6.5
3.1
25.6
2.3
4.4
9.2
25.4
6.7
3.0
26.0
2.3
4.1
9.1
26.3
7.1
2.9
26.1
2.2
3.9
8.7
26.3
7.0
2.9
25.8
2.2
3.9
8.6
26.4
7.0
2.8
25.7
2.2
3.8
2 G-10 countries and Switzerland
3 Belgium-Luxembourg
4
France
5 Germany
6 Italy
7 Netherlands
8
Sweden
9 Switzerland
10 United Kingdom
11 Canada
12 Japan
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.2
4.2
.3
1.5
7.1
1.1
5.1
1.6
.6
.2
5.1
.3
2.1
9.4
1.7
6.0
1.5
1.0
.2
5.3
.6
2.3
10.9
2.1
6.3
1.6
1.1
.2
5.1
.7
2.3
10.9
2.6
6.4
1.8
1.2
.2
5.2
.8
1.7
10.9
2.8
6.2
1.8
1.0
.3
5.3
1.0
1.9
11.3
2.9
6.2
2.2
1.0
.3
4.9
1.0
1.6
11.1
2.8
6.7
2.1
.9
.6
5.3
1.0
1.9
11.2
2.7
6.3
1.9
1.1
.5
5.2
1.1
1.7
10.3
3.0
5.9
1.8
1.0
.7
5.1
1.0
1.8
10.7
2.8
6.0
1.8
1.1
.7
5.3
1.0
1.7
10.5
2.8
6.1
1.7
1.1
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 3
.8
.7
.2
2.1
1.1
.7
.2
2.3
1.2
.7
.1
2.4
1.3
.8
.1
2.2
1.4
.8
.1
2.4
1.5
.8
.1
2.3
1.4
.8
.1
2.2
1.4
.8
.1
1.9
1.2
.8
.1
1.9
1.2
.8
.1
2.1
1.1
.8
.1
2.1
52 Eastern Europe
U.S.S.R
53
54
Yugoslavia
55
Other
7.4
.4
2.3
4.6
7.8
.6
2.5
4.7
6.2
.3
2.2
3.7
5.8
.4
2.3
3.0
5.3
.2
2.3
2.8
5.3
.2
2.4
2.8
4.9
.2
2.3
2.5
4.9
.2
2.3
2.4
4.5
.2
2.3
2.1
4.4
.1
2.3
2.0
4.5
.4
2.2
1.9
56 Offshore banking centers
57
Bahamas
58
Bermuda
59 Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama 4
62
Lebanon
Hong Kong
63
64
Singapore
65
Others 5
47.0
13.7
.6
10.6
2.1
5.4
.2
8.1
5.9
.3
63.7
19.0
.7
12.4
3.2
7.7
.2
11.8
8.7
.1
66.8
19.0
.9
12.9
3.3
7.6
.1
13.9
9.2
.0
69.3
20.7
.8
12.7
2.6
6.6
.1
14.5
11.2
.0
68.7
21.6
.8
10.5
4.1
5.7
.1
15.2
10.5
.1
70.5
21.8
.9
12.2
4.2
6.0
.1
15.0
10.3
.0
71.4
24.6
.7
12.0
3.3
6.3
.1
14.4
10.0
.0
74.1
27.5
.7
12.2
3.3
6.6
.1
13.5
10.2
.0
66.9
23.7
1.0
11.1
3.1
5.7
.1
12.7
9.5
.0
66.8
21.5
.9
11.7
3.4
6.8
.1
12.5
9.8
.0
66.3
21.5
.7
12.6
3.3
5.7
.1
12.4
10.0
.0
66 Miscellaneous and unallocated 6
14.0
18.8
17.9
16.2
16.9
17.0
16.3
17.3
17.3
17.3
16.9
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. Besides 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.
7. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for "shell" branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
Nonbank-Reported
3.22
Data
A63
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States1
Millions of dollars, end of period
1984
1983
Type, and area or country
1981
1980
1982
Mar.
Dec.
Sept.
June
Dec.
1
Total
29,434
28,618
27,512
25,215'
29,551'
34,248'
30,738
28,808
2
3
Payable in dollars
Payable in foreign currencies
25,689
3,745
24,909
3,709
24,280
3,232
22,195'
3,020
26,314'
3,237
31,050'
3,198
27,934
2,804
25,935
2,873
4
5
6
By type
Financial liabilities
Payable in dollars
Payable in foreign currencies
11,330
8,528
2,802
12,157
9,499
2,658
11,066
8,858
2,208
10,441'
8,662'
1,779
14,247'
12,229'
2,018
18,574'
16,532'
2,043
15,879
14,082
1,797
13,951
12,084
1,868
7
8
9
Commercial liabilities
Trade payables
Advance receipts and other liabilities
18,104
12,201
5,903
16,461
10,818
5,643
16,446
9,438
7,008
14,774
7,765
7,009
15,304
7,893
7,411
15,674
7,897
7,776
14,859
6,900
7,959
14,857
6,990
7,867
17,161
943
15,409
1,052
15,423
1,023
13,533
1,241
14,085
1,219
14,518
1,155
13,852
1,007
13,851
1,006
6,481
479
327
582
681
354
3,923
6,825
471
709
491
748
715
3,565
6,501
505
783
467
711
792
3,102
6,679
428
910
521
595
514
3,463
6,798
471
995
489
578
569
3,389
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
7,335'
359
900
571'
595
563
4,097'
964
963
746
764
795
825
863
3,356
1,279
7
22
1,241
102
98
2,751
904
14
28
1,027
121
114
2,607
751
13
32
1,018
213
124
4,912
1,419
51
37
2,635
243
121
9,017'
3,642'
13
25
4,546'
237
124
6,780
2,606
11
33
3,250
260
130
4,576
1,423
13
35
2,103
367
137
723
644
38
976
792
75
1,039
715
169
1,332
898
170
1,355
947
170
1,462
1,013
180
1,566
1,085
144
1,682
1,121
147
Africa
Oil-exporting countries 3
11
1
14
0
17
0
19
0
19
0
16
0
16
1
14
0
All other 4
15
24
12
10
9
9
14
19
4,402
90
582
679
219
499
1,209
3,770
71
573
545
220
424
880
3,831
52
598
468
346
367
1,027
3,245
62
437
427
268
241
732
3,567
40
488
417
259
477
847
3,409
45
525
501
265
246
794
3,961
34
430
558
239
405
1,133
3,987
48
438
619
245
257
1,082
Canada
70
21
2?
73
24
?5
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
77
78
29
Asia
Japan
Middle East oil-exporting countries 2
30
31
32
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
48
49
50
7,158'
428
956
524'
537'
641
3,841'
3,136
964
1
23
1,452
99
81
19
33
34
35
36
37
38
39
5,71C
302
843
502'
589'
486
2,839
Japan
Middle East oil-exporting countries 2 - 5
735
888
897
1,495
1,841
1,776
1,840
1,906
1,975
1,300
8
75
111
35
367
319
1,044
2
67
67
2
340
276
1,570
16
117
60
32
436
642
1,473
1
67
44
6
585
432
1,807
14
158
68
33
682
560
1,705
17
124
31
5
568
630
1,758
1
110
68
8
641
628
1,871
7
114
124
32
586
636
10,242
802
8,098
9,384
1,094
7,008
8,144
1,226
5,503
6,741
1,247
4,178
6,620
1,291
3,735
6,989
1,235
4,190
5,569
1,429
2,364
5,307
1,256
2,372
51
52
Africa
Oil-exporting countries 3
817
517
703
344
753
277
553
167
539
243
684
217
597
251
588
233
53
All other 4
456
664
651
921
995
1,046
1,068
1,128
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A64
3.23
International Statistics • September 1985
CLAIMS ON UNAFFILIATED FOREIGNERS
United States1
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1983
Type, and area or country
1980
1981
1984
1982
Dec.
Mar.
June
Sept.
Dec.
1 Total
34,482
36,185
28,725
34,951'
33,767'
31,977'
30,545'
29,505
2 Payable in dollars
3 Payable in foreign currencies
31,528
2,955
32,582
3,603
26,085
2,640
31,856'
3,0%'
30,919'
2,848'
28,996'
2,982'
27,754'
2,792
26,908
2,597
By type
4 Financial claims
5
Deposits
Payable in dollars
6
7
Payable in foreign currencies
8
Other financial claims
Payable in dollars
9
10
Payable in foreign currencies
19,763
14,166
13,381
785
5,597
3,914
1,683
21,142
15,081
14,456
625
6,061
3,599
2,462
17,684
13,058
12,628
430
4,626
2,979
1,647
23,821'
18,375'
17,872'
503'
5,445
3,489
1,956
22,904'
17,657'
17,225'
432'
5,247'
3,502'
1,745'
21,529'
16.41C
15,888'
522'
5,12C
3,359'
1,761
20,157'
15,376'
14,936'
439
4,781
3,088
1,693
18,940
14,307
13,887
420
4,633
3,190
1,442
11 Commercial claims
12 Trade receivables
13 Advance payments and other claims
14,720
13,960
759
15,043
14,007
1,036
11,041
9,994
1,047
11,131
9,721
1,410
10,864
9,540
1,323
10,448
9,105
1,343
10,389
8,885
1,503
10,565
9,084
1,481
14
15
14,233
487
14,527
516
10,478
563
10,494
637
10,193
671
9,749
699
9,729
659
9,830
735
6,069
145
298
230
51
54
4,987
4,596
43
285
224
50
117
3,546
4,873
15
134
178
97
107
4,064
6,448'
37
150
159
71
38
5,781'
6,351'
30
171
144'
32'
115'
5,651'
6,434'
37
151
161
158
61
5,613'
5,679'
15
146
187
62
64
4,973'
5,604
15
114
224
66
66
4,721
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
5,036
6,755
4,377
6,166
5,684'
5,29C
4,48C
4,006
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
7,811
3,477
135
96
2,755
208
137
8,812
3,650
18
30
3,971
313
148
7,546
3,279
32
62
3,255
274
139
10,15c
4,745
102'
53
4,163
291
134
9,871'
3,953'
3
87
4,925'
279
130
8,562'
3,255'
11'
83
4,394'
230
124
8,825'
3,382'
5
84
4,488'
232
128
8,045
3,270
6
100
3,905
215
125
31
32
33
Asia
Japan
Middle East oil-exporting countries 2
607
189
20
758
366
37
698
153
15
764
297
4
757'
313'
7
977'
321'
8
900
371
7
%1
353
13
34
35
Africa
Oil-exporting countries 3
208
26
173
46
158
48
147
55
144
42
158
35
160
37
210
85
32
48
31
145
%'
ltW
113
114
5,544
233
1,129
599
318
354
929
5,405
234
776
561
299
431
985
3,826
151
474
357
350
360
811
3,670
135
459
349'
334
317
809
3,610
173
413
365'
310
336
787
3,555
142
408
447'
306
250
812
3,570
128
411
370
303
289
891
3,805
138
439
374
340
271
1,061
36
37
38
39
40
41
42
43
44
All other
4
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
914
967
633
829
1,061
933
1,026
1,020
3,479
12
223
668
12
1,022
424
2,526
21
261
258
12
775
351
2,695
8
190
493
7
884
272
2,419
8
216
357
7
745
268
2,042
4
89
310
8
577
241
1,976
14
88
219
10
595
245
1,972
8
115
214
7
583
206
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
3,766
21
108
861
34
1,102
410
52
53
54
Asia
Japan
Middle East oil-exporting countries 2
3,522
1,052
825
3,959
1,245
905
3,050
1,047
751
3,063
1,114
737
2,997
1,186
701
3,085
1,178
710
2,884
1,080
703
3,070
1,180
687
55
56
Africa
Oil-exporting countries 3
653
153
772
152
588
140
588
139
497
132
536
128
595
135
470
134
57
All other 4
321
461
417
286
280
297
338
228
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
Securities Holdings and Transactions
3.24
A65
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1985
Transactions, and area or country
1983
1985
1984
1984
Jan.May
Nov.
Dec.
Jan.
Mar.
Feb.
Apr.
May
U.S. corporate securities
STOCKS
69,770
64,360
60,462
63,388
30,016
31,071
4,838
4,746
4,487
5,049
5,005
5,701
7,125
7,180
6,303
6,748
5,106
5,071
6,476
6,371
3 Net purchases, or sales ( - )
5,410
-2,926
-1,055
92
-562
-696
-56
-445
36
106
4 Foreign countries
5,312
-3,041
-989
81
-461
-713
-51
-402
28
149
3,979
-97
1,045
-109
1,325
1,799
1,151
529
-808
395
42
24
-2,986
-405
-50
-315
-1,490
-658
1,673
493
-1,998
-372
-23
171
-1,786
-33
-296
-314
-543
-650
255
757
-89
-212
-31
117
-90
-46
11
-15
-34
17
47
30
-12
74
-8
39
-359
-54
-105
-29
-249
91
134
67
-196
-91
-6
-11
-558
-19
-134
-44
-159
-178
46
103
-52
-264
-7
19
-215
-41
-109
-108
-133
129
168
158
-101
-99
-2
40
-582
-13
-113
-129
-122
-195
-2
80
116
-41
-13
39
-161
24
23
16
-48
-191
33
169
-96
91
-1
-6
-269
17
38
-48
-81
-216
9
247
44
101
-8
25
98
115
-66
11
-101
17
-5
-43
8
-44
24,000
23,097
39,341
26,071
30,869
16,089
4,902
2,556
6,403
2,900
5,937
3,106
8,219
3,649
5,484
2,598
4,501
3,068
6,729
3,667
20 Net purchases, or sales ( - )
903
13,269
14,781
2,346
3,503
2,831
4,570
2,886
1,432
3,062
21 Foreign countries
888
12,972
14,918
2,133
3,527
2,835
4,489
2,936
1,408
3,250
909
-89
344
51
583
434
123
100
-1,161
865
0
52
11,792
207
1,731
93
644
8,520
-71
390
-1,011
1,862
1
10
14,140
47
2
41
946
12,681
86
305
-954
1,319
1
21
1,954
-11
139
-1
159
1,603
13
44
-45
169
-2
2
3,338
24
184
15
276
2,776
14
78
-179
276
1
0
2,635
55
67
9
12
2,441
59
90
-123
140
0
35
4,143
-17
-153
44
315
4,018
-11
50
-84
337
0
54
2,952
-10
-112
8
483
2,550
-5
69
-127
89
0
-41
1,634
18
174
-9
65
1,294
0
-82
-507
381
0
-19
2,776
0
26
-11
72
2,378
43
178
-112
372
1
-8
15
297
-137
213
-24
-4
81
-50
25
-188
1 Foreign purchases
2 Foreign sales
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
22
23
24
25
26
27
28
29
30
31
32
33
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
34 Nonmonetary international and
regional organizations
Foreign securities
35 Stocks, net purchases, or sales ( - )
36 Foreign purchases
37 Foreign sales
-3,765
13,281
17,046
-1,077
14,591
15,668
-1,851
7,271
9,122
-177
1,147
1,324
-221
1,169
1,390
-781
1,149
1,930
-652
1,562
2,215
-457'
1,379'
1,836'
-101
1,437
1,538
140
1,744
1,604
38 Bonds, net purchases, or sales ( - )
39 Foreign purchases
40
Foreign sales
-3,239
36,333
39,572
-3,931
57,338
61,270
-1,977
29,506
31,483
-578
6,601
7,179
-1,159
5,134
6,293
168
5,396
5,228
198
5,294
5,096
-95C
5,673'
6,623'
-670
5,674
6,345
-723
7,469
8,191
41 Net purchases, or sales (—), of stocks and bonds . . . .
-7,004
-5,008
-3,829
-755
-1,379
-613
-454
-1,407'
-772
-583
42 Foreign countries
-6,559
-4,619
-4,140
-908
-671
-742
-754
-1,217'
-680
-747
43
44
45
46
47
48
-5,492
-1,328
1,120
-855
141
-144
-8,532
413
2,472
1,345
-107
-210
-4,663
-320
1,111
-362
-37
130
-707
-23
207
88
-16
-457
-1,086
254
104
-115
3
169
-732
75
194
-394
-4
120
-91
-422
-47
-255
-3
64
-1,208'
-68
7
99
-26
-21
-798
23
136
-13
-5
-23
-1,833
71
822
201
2
-9
-445
-389
312
153
-709
129
300
-190
-91
164
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
49 Nonmonetary international and
regional organizations
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait,
Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities, and securities of U.S.
government agencies and corporations. Also includes issues of new debt securi-
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
A66
3.25
International Statistics • September 1985
MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions
Millions of dollars
1984
1985
Country or area
1985
1984
1983
Jan.May
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total2
3,693
21,412
7,365
2,197
7,508
2,312
2,319
-4,401
-4,324
2,812
2 Foreign countries 2
3,162
16,432
7,482
2,293
5,066
3,797
2,163
-4,756
2,249
4,029
6,226
-431
2,450
375
170
-421
1,966
2,118
0
699
11,070
289
2,958
454
46
635
5,223
1,465
0
1,526
1,304
303
-711
-330
328
686
-464
1,492
0
163
776
41
36
-7
1
-288
244
748
0
193
1,300
46
336
16
-88
26
716
248
0
249
532
104
-120
-71
150
-35
419
86
0
-92
-81
18
-129
11
-10
358
-342
12
0
-231
-1,435
0
-1,538
-201
1
313
293
-303
0
38
1,818
80
299
-7
30
183
188
1,045
0
334
470
101
777
-62
157
-133
-1021
652
0
115
-212
-124
60
-149
-3,535
2,315
3
-17
1,413
14
528
871
2,377
6,062
-67
114
1,838
-2
763
1,077
4,140
4,086
74
-38
965
7
57
902
369
1,287
-5
-5
380
-10
213
177
3,218
1,585
2
-83
149
5
-2
146
3,093
578
2
113
735
-11
71
674
1,726
559
1
14
-82
2
65
-149
-3,289
177
1
11
465
10
177
278
-331
1,717
13
-50
570
-9
452
127
2,941
1,054
57
-125
535
218
0
4,982
4,612
0
-118
-98
3
-96
-188
0
2,442
2,361
0
-1,485
-1,675
0
154
504
1
355
338
0
2,075
1,792
-3
-1,217
-1,057
5
3,162
779
2,382
16,432
481
15,951
7,482
1,282
6,201
2,293
-602
2,895
5,066
1,919
3,147
3,797
2,527
1,270
2,163
1,324
840
-4,756
-5,278
521
2,249
-598
2,847
4,029
3,307
723
-5,419
-1
-6,277
-101
-515
0
-1,284
0
-200
0
27
0
-372
0
554
0
-827
0
102
0
3 Europe 2
4 Belgium-Luxembourg
5 Germany 2
6 Netherlands
7 Sweden
8 Switzerland 2
9
United Kingdom
10 Other Western Europe
11 Eastern Europe
12 Canada
13 Latin America and Caribbean
14 Venezuela
15 Other Latin America and Caribbean
16 Netherlands Antilles
17
18 Japan
19 Africa
20 All other
21 Nonmonetary international and regional organizations
22
International
Latin American regional
23
MEMO
24 Foreign countries 2
25 Official institutions
26
Other foreign 2
27
28
Oil-exporting countries
Middle East 3
Africa 4
1. Estimated official and private transactions in marketable U.S. Treasury
securities with an original maturity of more than 1 year. Data are based on
monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and
notes held by official institutions of foreign countries.
2. Includes U.S. Treasury notes publicly issued to private foreign residents
denominated in foreign currencies.
3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria,
Interest and Exchange Rates
3.26
DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Country
Country
Percent
Austria..
Belgium.
Brazil...
Canada..
Denmark
Rate on June 30, 1985
Rate on June 30, 1985
Rate on June 30, 1985
Country
4.5
11.0
49.0
9.58
7.0
Percent
Month
effective
June
Feb.
Mar.
June
Oct.
1984
1984
1981
1985
1983
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
3.27
10.13
4.5
15.5
5.0
5.5
Month
effective
May
June
Jan.
Oct.
Feb.
1985
1984
1985
1983
1985
Norway
Switzerland
United Kingdom 2 .
Venezuela
Month
effective
8.0
4.0
June 1983
Mar. 1983
11.0
May 1983
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.
1985
1984
6
7
8
9
10
Percent
FOREIGN SHORT-TERM INTEREST RATES
Percent per annum, averages of daily figures
Country, or type
1
2
3
4
5
A67
1982
1983
1984
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Eurodollars
United Kingdom
Canada
Germany
Switzerland
12.24
12.21
14.38
8.81
5.04
9.57
10.06
9.48
5.73
4.11
10.75
9.91
11.29
5.96
4.35
8.90
9.74
10.41
5.81
4.%
8.37
11.63
9.70
5.84
5.13
9.05
13.69
10.63
6.13
5.66
9.32
13.52
11.42
6.36
5.77
8.74
12.70
10.15
5.99
5.35
8.13
12.61
9.77
5.87
5.15
7.60
12.38
9.58
5.66
5.14
Netherlands
France
8.26
14.61
19.99
14.10
6.84
5.58
12.44
18.95
10.51
6.49
6.08
11.66
17.08
11.41
6.32
5.77
10.66
16.86
10.75
6.33
5.87
10.43
15.82
10.75
6.27
6.90
10.60
15.79
10.75
6.29
7.14
10.71
15.82
10.75
6.30
6.82
10.49
15.15
10.09
6.26
6.90
10.15
14.91
9.35
6.26
6.58
10.18
15.00
8.96
6.30
Belgium
Japan
NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate.
A68
3.28
International Statistics • September 1985
FOREIGN E X C H A N G E RATES
Currency units per dollar
1985
Country/currency
1982
1983
1984
Jan.
1
2
3
4
5
6
7
1
Feb.
Mar.
Apr.
May
June
Australia/dollar
Austria/schilling
Belgium/franc
Brazil/cruzeiro
Canada/dollar
China, P.R./yuan
Denmark/krone
101.65
17.060
45.780
179.22
1.2344
1.8978
8.3443
90.14
17.968
51.121
573.27
1.2325
1.9809
9.1483
87.937
20.005
57.749
1841.50
1.2953
2.3308
10.354
81.51
22.267
63.455
3346.67
1.3240
2.8160
11.330
73.74
23.190
66.310
3768.17
1.3547
2.8347
11.807
69.70
23.247
66.308
4158.19
1.3840
2.8533
11.797
65.84
21.717
62.283
4511.58
1.3658
2.8480
11.114
67.68
21.868
62.572
5239.00
1.3756
2.8556
11.2244
66.51
21.532
61.719
5786.00
1.3676
2.8693
10.9962
8
9
10
11
12
13
14
15
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/pound 1
Israel/shekel
4.8086
6.5793
2.428
66.872
6.0697
9.4846
142.05
24.407
5.5636
7.6203
2.5539
87.895
7.2569
10.1040
124.81
55.865
6.0007
8.7355
2.8454
112.73
7.8188
11.348
108.64
n.a.
6.6368
9.7036
3.1706
129.38
7.8110
12.612
98.23
n.a.
6.8616
10.093
3.3025
134.73
7.8017
12.922
94.23
n.a.
6.8464
10.078
3.2982
140.62
7.8009
12.861
94.58
n.a.
6.4652
9.4427
3.0946
134.86
7.7902
12.400
101.17
n.a.
6.4641
9.4829
3.1093
137.239
7.7766
12.5004
100.71
n.a.
6.3660
9.3414
3.0636
136.00
7.7698
12.441
102.19
n.a.
16
17
18
19
20
21
22
23
24
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar 1
Norway/krone
Philippines/peso
Portugal/escudo
1354.00
249.06
2.3395
72.990
2.6719
75.101
6.4567
8.5324
80.101
1519.30
237.55
2.3204
155.01
2.8543
66.790
7.3012
11.0940
111.610
1756.10
237.45
2.3448
192.31
3.2083
57.837
8.1596
n.a.
147.70
1948.76
254.18
2.4804
227.56
3.5819
47.040
9.1765
n.a.
172.56
2042.00
260.48
2.5513
236.06
3.7387
45.223
9.4695
n.a.
183.24
2078.50
257.92
2.5734
246.15
3.7290
45.276
9.4608
n.a.
183.98
1975.89
251.84
2.4922
246.57
3.4981
45.520
8.9314
n.a.
174.56
1984.45
251.73
2.4759
254.8182
3.5097
45.197
8.9442
n.a.
177.545
1953.92
248.84
2.4685
294.22
3.4535
45.949
8.8255
n.a.
176.15
25
26
27
28
29
30
31
32
33
34
35
Singapore/dollar
South Africa/rand 1
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound 1
Venezuela/bolivar
2.1406
92.297
731.93
110.09
20.756
6.2838
2.0327
n.a.
23.014
174.80
4.2981
2.1136
89.85
776.04
143.500
23.510
7.6717
2.1006
n.a.
22.991
151.59
10.6840
2.1325
69.534
807.91
160.78
25.428
8.2706
2.3500
39.633
23.582
133.66
n.a.
2.2011
46.34
832.16
175.13
26.392
9.0716
2.6590
39.209
27.330
112.71
n.a.
2.2557
50.57
839.16
182.35
26.605
9.3364
2.8045
39.228
27.961
109.31
n.a.
2.2582
50.33
850.71
183.13
26.836
9.4135
2.8033
39.542
28.097
112.53
n.a.
2.2199
51.50
861.21
172.85
27.113
8.9946
2.5948
39.728
27.466
123.77
n.a.
2.2228
50.18
792.56
175.397
27.404
8.9895
2.6150
39.906
27.554
124.83
n.a.
2.2291
50.54
875.00
173.42
27.433
8.8565
2.5721
39.857
27.433
128.08
n.a.
116.57
125.34
138.19
152.83
158.43
158.14
149.56
149.92
147.71
MEMO
36 United States/dollar 2
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 transfers.
Data in this table also appear in the Board's G.5 (405) release. For address, see
inside front cover.
A69
Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE TO TABULAR
Symbols and
c
e
p
r
*
PRESENTATION
Abbreviations
Corrected
Estimated
Preliminary
Revised (Notation appears on column heading when
about half of the figures in that column are changed.)
Amounts insignificant in terms of the last decimal place
shown in the table (for example, less than 500,000
when the smallest unit given is millions)
General
0
n.a.
n.e.c.
IPCs
REITs
RPs
SMSAs
Calculated to be zero
Not available
Not elsewhere classified
Individuals, partnerships, and corporations
Real estate investment trusts
Repurchase agreements
Standard metropolitan statistical areas
Cell not applicable
Information
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed
issues of U.S. government agencies (the flow of funds figures
also include not fully guaranteed issues) as well as direct
STATISTICAL
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.
RELEASES
List Published Semiannually,
with Latest Bulletin
Reference
Issue
Anticipated schedule of release dates for periodic releases
SPECIAL
Page
June 1985
A83
TABLES
Published Irregularly, with Latest Bulletin
Reference
Assets and liabilities of commercial banks, March 31, 1983
Assets and liabilities of commercial banks, June 30, 1983
Assets and liabilities of commercial banks, September 30, 1983
Assets and liabilities of commercial banks, December 31, 1983
Assets and liabilities of U.S. branches and agencies of foreign banks,
Assets and liabilities of U.S. branches and agencies of foreign banks,
Assets and liabilities of U.S. branches and agencies of foreign banks,
Assets and liabilities of U.S. branches and agencies of foreign banks,
Terms of lending at commercial banks, February 1985
Terms of lending at commercial banks, May 1985
March 31, 1984
June 30, 1984
September 30, 1984
December 31, 1984.
August
December
March
June
November
April
April
August
June
August
1983
1983
1984
1984
1984
1985
1985
1985
1985
1985
A70
A68
A68
A66
A4
A70
A74
A76
A70
A70
A70
Federal Reserve Board of Governors
PAUL A . VOLCKER,
PRESTON M A R T I N ,
Chairman
Vice Chairman
OFFICE OF BOARD
MEMBERS
JOSEPH R. COYNE, Assistant
DONALD J. WINN, Assistant
STEVEN M . ROBERTS,
to the
to the
HENRY C. WALLICH
J . CHARLES PARTEE
OFFICE OF STAFF DIRECTOR
MONETARY AND FINANCIAL
Board
Board
FOR
POLICY
STEPHEN H . A X I L R O D , Staff Director
D O N A L D L . K O H N , Deputy Staff Director
Assistant to the Chairman
ANTHONY F. COLE, Special Assistant to the Board
NAOMI P. SALUS, Special Assistant to the Board
STANLEY J. SIGEL, Assistant to the Board
NORMAND R.V. BERNARD, Special Assistant
LEGAL
DIVISION
DIVISION
MICHAEL BRADFIELD, General
J. VIRGIL M A T T I N G L Y , J R . ,
Counsel
Deputy General Counsel
RICHARD M. ASHTON, Associate General
Counsel
OLIVER IRELAND, Associate General
Counsel
RICKI TIGERT, Assistant General
Counsel
MARYELLEN A. BROWN, Assistant to the General
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,
Counsel
OF RESEARCH
STATISTICS
JAMES L . K I C H L I N E , Director
E D W A R D C . E T T I N , Deputy Director
MICHAEL J. PRELL, Deputy Director
JOSEPH S . ZEISEL, Deputy Director
JARED J. E N Z L E R , Associate Director
D A V I D E . L I N D S E Y , Associate Director
ELEANOR J. STOCKWELL, Associate Director
THOMAS D . SIMPSON, Deputy Associate Director
LAWRENCE SLIFMAN, Deputy
Associate
Director
H E L M U T F . W E N D E L , Deputy Associate Director
MARTHA B E T H E A , Assistant Director
ROBERT M . FISHER, Assistant Director
D A V I D B . H U M P H R E Y , Assistant Director
S U S A N J. LEPPER, Assistant Director
RICHARD D . PORTER, Assistant Director
PETER A . TINSLEY, Assistant Director
L E V O N H . G A R A B E D I A N , Assistant Director
(Administra tion)
Director
JERAULD C . K L U C K M A N , Associate Director
G L E N N E . L O N E Y , Assistant Director
DOLORES S . S M I T H , Assistant Director
DIVISION OF BANKING
SUPERVISION AND
REGULATION
DIVISION
OF INTERNATIONAL
1. On loan from the Federal Reserve Bank of Boston.
FINANCE
E D W I N M . T R U M A N , Director
LARRY J. PROMISEL, Senior Associate Director
CHARLES J. SIEGMAN, Senior Associate Director
D A L E W . H E N D E R S O N , Associate Director
ROBERT F. GEMMILL, Staff
WILLIAM TAYLOR, Director
THOMAS E . C I M E N O , J R . , Deputy Director'
FREDERICK R . D A H L , Associate Director
D O N E . K L I N E , Associate Director
FREDERICK M . STRUBLE, Associate Director
HERBERT A . B I E R N , Assistant Director
A N T H O N Y C O R N Y N , Assistant Director
ROBERT S . PLOTKIN, Assistant Director
STEPHEN C . SCHEMERING, Assistant Director
RICHARD SPILLENKOTHEN, Assistant Director
S I D N E Y M . S U S S A N , Assistant Director
L A U R A M . H O M E R , Securities Credit Officer
AND
to the
Adviser
PETER HOOPER I I I , Assistant Director
D A V I D H . H O W A R D , Assistant Director
RALPH W . SMITH, J R . , Assistant Director
Board
A71
and Official Staff
EMMETT J.
LYLE E.
RICE
MARTHA R .
SEGER
GRAMLEY
OFFICE OF
STAFF DIRECTOR FOR
MANAGEMENT
S . D A V I D FROST, Staff Director
E D W A R D T . M U L R E N I N , Assistant Staff Director
CHARLES L . H A M P T O N , Senior Technical Adviser
PORTIA W . THOMPSON, Equal Employment Opportunity
OFFICE OF STAFF DIRECTOR FOR
FEDERAL RESERVE BANK
ACTIVITIES
THEODORE E. ALLISON, Staff
Director
Adviser, Equal Employment
Opportunity Programs, Federal Reserve System
JOSEPH W . D A N I E L S , S R . ,
Programs Officer
DIVISION
OF COMPUTING
SERVICES
BRUCE M . BEARDSLEY, Director
THOMAS C . J U D D , Assistant Director
ELIZABETH B . RIGGS, Assistant Director
ROBERT J. Z E M E L ,
DIVISION
WILLIAM
STEPHEN
RICHARD
WILLIAM
DIVISION
Assistant Director
OF INFORMATION
SERVICES
R . JONES, Director
R . M A L P H R U S , Assistant Director
J. MANASSERI, Assistant Director
C . SCHNEIDER, JR., Assistant Director
OF
PERSONNEL
D A V I D L . S H A N N O N , Director
JOHN R . W E I S , Assistant Director
CHARLES W . W O O D , Assistant Director
OFFICE OF THE
CONTROLLER
GEORGE E . LIVINGSTON, Controller
BRENT L . B O W E N , Assistant Controller
DIVISION
OF SUPPORT
SERVICES
Director
Associate Director
Assistant Director
ROBERT E . FRAZIER,
WALTER W . K R E I M A N N ,
GEORGE M . L O P E Z ,
2. On loan from the Federal Reserve Bank of Richmond (Baltimore
Branch).
DIVISION OF FEDERAL
BANK
OPERATIONS
RESERVE
C L Y D E H . FARNSWORTH, J R . , Director
ELLIOTT C . M C E N T E E , Associate Director
D A V I D L . ROBINSON, Associate Director
C . WILLIAM SCHLEICHER, J R . , Associate Director
WALTER A L T H A U S E N , Assistant Director
CHARLES W . B E N N E T T , Assistant Director
A N N E M . D E B E E R , Assistant Director
JACK D E N N I S , JR., Assistant Director
EARL G . H A M I L T O N , Assistant Director
WILLIAM E. PASCOE III, Assistant
FLORENCE M . Y O U N G ,
Adviser
Director2
146
Federal Reserve Bulletin • September 1985
Federal Open Market Committee
FEDERAL
OPEN MARKET
PAUL A . VOLCKER,
COMMITTEE
Chairman
JOHN J. BALLES
ROBERT P . BLACK
ROBERT P . FORRESTAL
STEPHEN H . AXILROD,
SILAS KEEHN
PRESTON MARTIN
J. CHARLES PARTEE
Staff Director and Secretary
NORMAND R . V . BERNARD, Assistant
NANCY M . STEELE,
Secretary
Deputy Assistant Secretary
MICHAEL BRADFIELD, General
JAMES H . OLTMAN,
E . GERALD CORRIGAN,
Counsel
Deputy General Counsel
JAMES L . KICHLINE,
E D W I N M . TRUMAN,
Economist
Economist (International)
JOSEPH R. BISIGNANO, Associate
Economist
PETER D . STERNLIGHT, Manager
SAM Y . CROSS, Manager for
FEDERAL ADVISORY
EMMETT J. RICE
MARTHA R . SEGER
HENRY C . WALLICH
J. ALFRED BROADDUS, Associate
Economist
RICHARD G. DAVIS, Associate
Economist
DONALD L. KOHN, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
MICHAEL J. PRELL, Associate
Economist
KARL A. SCHELD, Associate
Economist
CHARLES J. SIEGMAN, Associate
Economist
SHEILA L. TSCHINKEL, Associate
Economist
for Domestic Operations, System Open Market Account
Foreign Operations, System Open Market Account
COUNCIL
LEWIS T. PRESTON,
President
PHILIP F . SEARLE, Vice President
WILLIAM H . BOWEN, E . PETER GILLETTE, AND N . BERNE HART,
ROBERT L . N E W E L L , First District
LEWIS T. PRESTON, Second District
GEORGE A . BUTLER, Third District
JULIEN L . M C C A L L , Fourth District
JOHN G . M E D L I N , JR., Fifth District
PHILIP F. SEARLE, Sixth District
Directors
HAL C. KUEHL, Seventh District
WILLIAM H . BOWEN, Eighth District
E. PETER GILLETTE, JR., Ninth District
N. BERNE HART, Tenth District
NAT S. ROGERS, Eleventh District
G . ROBERT TRUEX, JR., Twelfth District
HERBERT V . PROCHNOW,
Secretary
WILLIAM J. KORSVIK, Associate
Secretary
Vice Chairman
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
TIMOTHY D. MARRINAN, Minneapolis, Minnesota, Chairman
THOMAS L . CLARK, JR., New York, New York, Vice Chairman
RACHEL G. BRATT, Medford, Massachusetts
JONATHAN BROWN, W a s h i n g t o n , D . C .
JEAN A. CROCKETT, Philadelphia, Pennsylvania
THERESA FAITH CUMMINGS, Springfield, Illinois
STEVEN M. GEARY, Jefferson City, Missouri
RICHARD M. HALLIBURTON, Kansas City, Missouri
CHARLES C . HOLT, Austin, Texas
EDWARD N. LANGE, Seattle, Washington
KENNETH V. LARKIN, Berkeley, California
FRED S. MCCHESNEY, Atlanta, Georgia
FREDERICK H . MILLER, Norman, Oklahoma
MARGARET M . MURPHY, Columbia, Maryland
ROBERT F . MURPHY, Detroit, Michigan
HELEN NELSON, Mill Valley, California
THRIFT INSTITUTIONS
ADVISORY
LAWRENCE S. OKINAGA, Honolulu, Hawaii
JOSEPH L. PERKOWSKI, Centerville, Minnesota
ELVA QUIJANO, San Antonio, Texas
BRENDA L. SCHNEIDER, Detroit, Michigan
PAULA A. SLIMAK, Cleveland, Ohio
GLENDA G . SLOANE, W a s h i n g t o n , D . C .
HENRY J. SOMMER, Philadelphia, Pennsylvania
TED L. SPURLOCK, New York, New York
MEL STILLER, Boston, Massachusetts
CHRISTOPHER J. SUMNER, Salt Lake City, Utah
WINNIE F. TAYLOR, Gainesville, Florida
MICHAEL M. V A N BUSKIRK, Columbus, Ohio
MERVIN WINSTON, Minneapolis, Minnesota
MICHAEL ZOROYA, St. Louis, Missouri
COUNCIL
THOMAS R . BOMAR, Miami, Florida, President
RICHARD H. DEIHL, LOS Angeles, California, Vice President
ELLIOTT G . CARR, Harwich Port, Massachusetts
T O D D COOKE, Philadelphia, Pennsylvania
J. MICHAEL CORNWALL, Dallas, Texas
HAROLD W . GREENWOOD, JR., Minneapolis, Minnesota
MICHAEL R. WISE,
M.
JOHN A. HARDIN, Rock Hill, South Carolina
FRANCES LESNIESKI, East Lansing, Michigan
JOHN T. MORGAN, New York, New York
SARAH R. WALLACE, Newark, Ohio
Denver, Colorado
A74
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A75
CONSUMER EDUCATION
PAMPHLETS
Short pamphlets suitable for classroom use. Multiple copies
available without charge.
130. EFFECTS OF EXCHANGE RATE VARIABILITY ON INTERNATIONAL TRADE A N D OTHER ECONOMIC VARIABLES: A REVIEW OF THE LITERATURE, by Victoria S.
Farrell with Dean A. DeRosa and T. Ashby McCown.
January 1984. 21 pp.
Alice in Debitland
Consumer Handbook on Adjustable Rate Mortgages
Consumer Handbook to Credit Protection Laws
The Equal Credit Opportunity Act and . . . Age
The Equal Credit Opportunity Act and . . . Credit Rights in
Housing
The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide Incidental Credit
The Equal Credit Opportunity Act and . . . Women
Fair Credit Billing
Federal Reserve Glossary
Guide to Federal Reserve Regulations
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If You Borrow To Buy Stock
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Instructional Materials of the Federal Reserve System
Series on the Structure of the Federal Reserve System
The Board of Governors of the Federal Reserve System
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
Monetary Control Act of 1980
Organization and Advisory Committees
Truth in Leasing
U.S. Currency
What Truth in Lending Means to You
131. CALCULATIONS OF PROFITABILITY FOR U . S . D O L L A R DEUTSCHE MARK INTERVENTION, by Laurence R.
Jacobson. October 1983. 8 pp.
132. TIME-SERIES STUDIES OF THE RELATIONSHIP BETWEEN EXCHANGE RATES AND INTERVENTION: A
REVIEW OF THE TECHNIQUES AND LITERATURE, b y
Kenneth Rogoff. October 1983. 15 pp.
133. RELATIONSHIPS AMONG EXCHANGE RATES, INTERVENTION, A N D INTEREST RATES: A N EMPIRICAL IN-
VESTIGATION, by Bonnie E. Loopesko. November
1983. 20 pp.
134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: A REVIEW OF THE LITERATURE, b y
Ralph W. Tryon. October 1983. 14 pp.
135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET
INTERVENTION: APPLICATIONS TO C A N A D A , GERMA-
NY, AND JAPAN, by Deborah J. Danker, Richard A.
Haas, Dale W. Henderson, Steven A. Symansky, and
Ralph W. Tryon. April 1985. 27 pp.
136. THE EFFECTS OF FISCAL POLICY ON THE U . S . ECONO-
MY, by Darrell Cohen and Peter B. Clark. January
1984. 16 pp.
137. THE IMPLICATIONS FOR BANK MERGER POLICY OF
FINANCIAL DEREGULATION, INTERSTATE BANKING,
AND
FINANCIAL
SUPERMARKETS,
by
Stephen
A.
Rhoades. February 1984. 8 pp.
138. ANTITRUST L A W S , JUSTICE DEPARTMENT G U I D E LINES, AND THE LIMITS OF CONCENTRATION IN LOCAL BANKING MARKETS, by James Burke. June 1984.
14 pp.
STAFF STUDIES.- Summaries Only Printed in the
Bulletin
Studies and papers on economic and financial subjects that
are of general interest. Requests to obtain single copies of
the full text or to be added to the mailing list for the series
may be sent to Publications Services.
139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN
THE UNITED STATES, by Thomas D. Simpson and
Patrick M. Parkinson. August 1984. 20 pp.
140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF
THE LITERATURE, by John D. Wolken. November
1984. 38 pp.
141. A COMPARISON OF DIRECT DEPOSIT A N D CHECK PAYMENT COSTS, by William Dudley. November 1984. 15
Staff Studies 115-125 are out of print.
pp.
142. MERGERS
AND
BANKS, 1 9 6 0 - 8 3 ,
114. MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE ON COMPETITION AND PERFORMANCE IN
BANKING MARKETS, by Timothy J. Curry and John T.
Rose. Jan. 1982. 9 pp.
126. DEFINITION A N D MEASUREMENT OF EXCHANGE MAR-
KET INTERVENTION, by Donald B. Adams and Dale
W. Henderson. August 1983. 5 pp.
127. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: JANUARY-MARCH 1 9 7 5 , by Margaret L .
Greene. August 1984. 16 pp.
128. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: SEPTEMBER 1977-DECEMBER 1 9 7 9 , b y M a r -
garet L. Greene. October 1984. 40 pp.
129. U . S . EXPERIENCE WITH EXCHANGE MARKET INTERVENTION: OCTOBER I98O-OCTOBER 1 9 8 1 , by Margaret
L. Greene. August 1984. 36 pp.
ACQUISITIONS
A.
by Stephen
BY
COMMERCIAL
Rhoades. December
1984. 30 pp.
143. COMPLIANCE COSTS A N D CONSUMER BENEFITS OF
THE ELECTRONIC F U N D TRANSFER ACT: RECENT
SURVEY EVIDENCE, by Frederick J. Schroeder. April
1985. 23 pp.
144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CONSUMER CREDIT REGULATIONS: THE TRUTH IN L E N D ING A N D EQUAL CREDIT OPPORTUNITY L A W S , b y
Gregory E. Elliehausen and Robert D. Kurtz. May
1985. 10 pp.
145. SERVICE CHARGES AS A SOURCE OF B A N K INCOME
AND THEIR IMPACT ON CONSUMERS, by Glenn B .
Canner and Robert D. Kurtz. August 1985. 31 pp.
A76
REPRINTS OF BULLETIN ARTICLES
Most of the articles reprinted do not exceed 12 pages.
The Commercial Paper Market since the Mid-Seventies. 6/82.
Applying the Theory of Probable Future Competition. 9/82.
International Banking Facilities. 10/82.
Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
Ten Staff Studies. 11/83.
A Financial Perspective on Agriculture. 1/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
U.S. International Transactions in 1984. 5/85.
A Revision of the Index of Industrial Production. 7/85.
A77
Index to Statistical Tables
References are to pages A3-A68 although the prefix 'A"
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20
Assets and liabilities (See also Foreigners)
Banks, by classes, 18-20
Domestic finance companies, 37
Federal Reserve Banks, 10
Financial institutions, 26
Foreign banks, U.S. branches and agencies, 21
Nonfinancial corporations, 36
Automobiles
Consumer installment credit, 40, 41
Production, 47, 48
BANKERS acceptances, 9, 23, 24
Bankers balances, 18-20 (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 34
Rates, 24
Branch banks, 21, 55
Business activity, nonfinancial, 44
Business expenditures on new plant and equipment, 36
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 46
Capital accounts
Banks, by classes, 18
Federal Reserve Banks, 10
Central banks, discount rates, 67
Certificates of deposit, 24
Commercial and industrial loans
Commercial banks, 16, 19
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20
Commercial and industrial loans, 16, 18, 19, 20, 21
Consumer loans held, by type, and terms, 40, 41
Loans sold outright, 19
Nondeposit funds, 17
Real estate mortgages held, by holder and property, 39
Time and savings deposits, 3
Commercial paper, 23, 24, 37
Condition statements (See Assets and liabilities)
Construction, 44, 49
Consumer installment credit, 40, 41
Consumer prices, 44, 50
Consumption expenditures, 51, 52
Corporations
Nonfinancial, assets and liabilities, 36
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 26, 40 (See also Thrift institutions)
Currency and coin, 18
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or securities)
Demand deposits
Banks, by classes, 18-21
is omitted in this index
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
Depository institutions
Reserve requirements, 7
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks and foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 24
FARM mortgage loans, 39
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and
ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 5, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 38, 39
Federal Housing Administration, 33, 38, 39
Federal Land Banks, 39
Federal National Mortgage Association, 33, 38, 39
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 37
Business credit, 37
Loans, 19, 40, 41
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4
Flow of funds, 42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66
A78
GOLD
Certificate account, 10
Stock, 4, 54
Government National Mortgage Association, 33, 38, 39
Gross national product, 51
HOUSING, new and existing units, 49
INCOME, personal and national, 44, 51, 52
Industrial production, 44, 47
Installment loans, 40, 41
Insurance companies, 26, 30, 39
Interest rates
Bonds, 24
Consumer installment credit, 41
Federal Reserve Banks, 6
Foreign central banks and foreign countries, 67
Money and capital markets, 24
Mortgages, 38
Prime rate, 23
Time and savings deposits, 8
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 39
Federal Reserve Banks, 10, 11
Financial institutions, 26, 39
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-20
Commercial banks, 3, 16, 18-20
Federal Reserve Banks, 4, 5, 6, 10, 11
Financial institutions, 26, 39
Insured or guaranteed by United States, 38, 39
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 5
Reserve requirements, 7
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 3, 12
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks, 8, 26, 39, 40 (See also Thrift
institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 9
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 25
Prime rate, 23
Producer prices, 44, 50
Production, 44, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 39
Financial institutions, 26
Terms, yields, and activity, 38
Type of holder and property mortgaged, 39
Repurchase agreements, 5, 17, 19, 20, 21
Reserve requirements, 7
Reserves
Commercial banks, 18
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 54
Residential mortgage loans, 38
Retail credit and retail sales, 40, 41, 44
SAVING
Flow of funds, 42, 43
National income accounts, 51
Savings and loan associations, 8, 26, 39, 40, 42 (See also
Thrift institutions)
Savings deposits (See Time and savings deposits)
Securities (See specific types)
Federal and federally sponsored credit agencies, 33
Foreign transactions, 65
New issues, 34
Prices, 25
Special drawing rights, 4, 10, 53, 54
State and local governments
Deposits, 19, 20
Holdings of U.S. government securities, 30
New security issues, 34
Ownership of securities issued by, 19, 20, 26
Rates on securities, 24
Stock market, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 3 (See also Credit unions, Mutual
savings banks, and Savings and loan associations)
Time and savings deposits, 3, 8, 13, 17, 18, 19, 20, 21
Trade, foreign, 54
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 18-20, 21, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 66
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 38, 39
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)
A79
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK, Chairman
branch, or facility
Zip
Deputy Chairman
President
First Vice President
BOSTON*
02106
Joseph A. Baute
Thomas I. Atkins
Frank E. Morris
Robert W. Eisenmenger
NEW YORK*
10045
John Brademas
Clifton R. Wharton, Jr.
M. Jane Dickman
E. Gerald Corrigan
Thomas M. Timlen
Buffalo
14240
John T. Keane
PHILADELPHIA
19105
Robert M. Landis
Nevius M. Curtis
Edward G. Boehne
Richard L. Smoot
CLEVELAND*
44101
William H. Knoell
E. Mandell de Windt
Robert E. Boni
Milton G. Hulme, Jr.
Karen N. Horn
William H. Hendricks
Leroy T. Canoles, Jr.
Robert A. Georgine
Robert L. Tate
Wallace J. Jorgenson
Robert P. Black
Jimmie R. Monhollon
John H. Weitnauer, Jr.
Bradley Currey, Jr.
Martha Mclnnis
E. William Nash, Jr.
Eugene E. Cohen
Condon S. Bush
Leslie B. Lampton
Robert P. Forrestal
Jack Guynn
Stanton R. Cook
Robert J. Day
Russell G. Mawby
Silas Keehn
Daniel M. Doyle
W.L. Hadley Griffin
Mary P. Holt
Sheffield Nelson
Henry F. Frigon
Donald B. Weis
Thomas C. Melzer
Joseph P. Garbarini
John B. Davis, Jr.
Michael W. Wright
Gene J. Etchart
Gary H. Stern
Thomas E. Gainor
Irvine O. Hockaday, Jr.
Robert G. Lueder
James E. Nielson
Patience Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Robert D. Rogers
Bobby R. Inman
John R. Sibley
Robert T. Sakowitz
Robert F. McDermott
Robert H. Boykin
William H. Wallace
Alan C. Furth
Fred W. Andrew
Richard C. Seaver
Paul E. Bragdon
Don M. Wheeler
John W. Ellis
John J. Balles
Richard T. Griffith
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30301
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
KANSAS CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75222
79999
77252
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino
Harold J. Swart
Robert D. McTeer, Jr.
Albert D. Tinkelenberg
John G. Stoides
Fred R. Herr
James D. Hawkins
Patrick K. Barron
Jeffrey J. Wells
Henry H. Bourgaux
Roby L. Sloan
John F. Breen
James E. Conrad
Paul I. Black, Jr.
Robert F. McNellis
Wayne W. Martin
William G. Evans
Robert D. Hamilton
Joel L. Koonce, Jr.
J.Z. Rowe
Thomas H. Robertson
Robert M. McGill
Angelo S. Carella
E. Ronald Liggett
Gerald R. Kelly
* Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016;
Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
A80
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
HAWAII
•HHQ
LEGEND
— ~ Boundaries of Federal Reserve Districts
Boundaries of Federal Reserve Branch
Territories
®
Federal Reserve Bank Cities
•
Federal Reserve Branch Cities
Federal Reserve Bank Facility
Q
Board of Governors of the Federal Reserve
System
Publications of Interest
FEDERAL RESERVE CONSUMER CREDIT
PUBLICATIONS
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.
IMSS
LE4SINO
LE4SMG
LE4SMG
TRUTH IN LE45IN6
What
Thith In
Lending
Means
To You
\The
ll Equal Credit
I Opportunity
Act and
Credit Rights
In Housing
The Equal Credit
Opportunity Act
and . . .
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.
@FedFRASER