Full text of Federal Reserve Bulletin : September 1987
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VOLUME 7 3 •
NUMBER 9 •
£ t-
SEPTEMBER 1 9 8 7
FEDERAL RESERVE
V BULLETIN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D . C .
PUBLICATIONS COMMITTEE
Joseph R. Coyne, Chairman • Michael Bradfield • S. David Frost
• Griffith L. Garwood • Edwin M. Truman
The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for
opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by Mendelle T.
Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles.
Table of Contents
687 THE ANGUISH
OF CENTRAL
BANKING
by Arthur F. Burns
Arthur F. Burns, Chairman of the Board of
Governors from 1970 to 1978, gave this
address as the Per Jacobsson Lecture on
September 30, 1979. It is reprinted in memory of Dr. Burns, who died on June 26,
1987.
Interim statement on reducing risks
large-dollar transfer systems.
on
N e w members appointed to Large Dollar
Payments System Advisory Group.
Establishment of Office of Inspector General and appointment of the first Inspector
General.
Proposed actions.
699 STAFF
STUDIES
In "Stock Market Volatility," the authors
examine whether innovations in trading
strategies—arbitrage trading, program trading, and portfolio insurance—affect volatility in the prices of stock.
701 INDUSTRIAL
PRODUCTION
Industrial production increased an estimated 0.2 percent in June.
703 STATEMENT TO
CONGRESS
Paul A. Volcker, Chairman, Board of Governors, touches on some of the main points
in the "Monetary Policy Report to the
Congress," and says that w e will need to
work to correct the large imbalances in our
internal and external economic positions,
before the H o u s e Committee on Banking,
Finance, and Urban Affairs, July 21, 1987.
[Chairman Volcker presented identical testimony before the Senate Committee on
Banking, Housing, and Urban Affairs on
July 23, 1987.]
706
ANNOUNCEMENTS
Alan Greenspan sworn in as Chairman of
the Board of Governors.
Restructuring of interest rate charges on
discount window borrowings.
Availability of revised list of OTC stocks
subject to margin regulations.
711 RECORD OF POLICY ACTIONS OF THE
FEDERAL OPEN MARKET
COMMITTEE
At its meeting on May 19, 1987, all but one
of the members of the Committee indicated
that they favored or could accept a directive
that called for some increase in the degree
of reserve pressure beyond that sought in
recent w e e k s , taking account of the possibility that such firming might be accomplished through an increase in the discount
rate. Subsequent to some initial firming in
reserve conditions, the members indicated
that somewhat greater reserve restraint
would be acceptable, and somewhat lesser
reserve restraint might be acceptable, later
in the intermeeting period depending on
developments relating to inflation and the
performance of the dollar in foreign exchange markets, while also giving consideration to the behavior of the monetary aggregates and the strength of the business
expansion. This approach to policy implementation w a s expected to be consistent
with growth in M2 and M3 at annual rates of
around 6 percent or less for the three-month
period from March to June. Over the same
period growth in M l w a s expected to remain well below its pace in 1986; the members would continue to evaluate this aggre-
gate in the light of the performance of the
broader monetary aggregates and other factors. 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 4 to 8 percent.
717 LEGAL
DEVELOPMENTS
Various bank holding company, bank service corporation, and bank merger orders;
and pending cases.
759 MEMBERSHIP OF THE BOARD OF
GOVERNORS OF THE FEDERAL
RESERVE SYSTEM,
1913-87
List of appointive and e x officio members.
A i 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
A76 BOARD OF GOVERNORS
AND
STAFF
A78 FEDERAL OPEN MARKET
COMMITTEE
AND STAFF; ADVISORY
COUNCILS
A80 FEDERAL RESERVE
PUBLICATIONS
BOARD
A83 INDEX TO STATISTICAL
TABLES
A85 FEDERAL RESERVE BANKS,
AND OFFICES
BRANCHES,
A86 MAP OF FEDERAL RESERVE
SYSTEM
Arthur F. Burns
The Anguish of Central Banking
June 26, 1987, was
Governors
of the
1970 to 1978. The
of the address Dr.
Burns gave as the sixteenth Per Jacobsson
Lecture, at Belgrade, Yugoslavia, on September 30,
1979. The Federal Reserve reprints the lecture as
a memorial to Dr. Burns.
The international monetary system, which has
been in almost constant turmoil during this decade, has benefited recently from several developments. Under the amended Articles of Agreement, the International Monetary Fund can exercise firm surveillance over the exchange rate
policies of its members and is therefore now in a
position to move the nations of the world toward
a rule of law in international monetary affairs.
Another promising development is the establishment of the European Monetary System, with
the aim of maintaining relatively stable exchange
rates within the Common Market.
A third positive development is recognition by
the United States that the persisting deficits in its
international current account must be eliminated, and that in the meantime decisive intervention to protect the external value of the dollar
may well be needed. The conventional theory
that a depreciating currency is beneficial to a
nation's foreign trade and to its overall economic
activity has lost its appeal within the American
government. The officials concerned with economic policy have learned that whatever merit
may in some circumstances attach to this theory,
it is a dangerous guide for a country whose
currency is still the centerpiece of the international monetary system. "Benign neglect" of the
external value of the dollar came to an end
dramatically, and I would hope irrevocably, in
November 1978.
This and other constructive developments suggested earlier in 1979 that a closer approach to
international equilibrium was under way, and
calm returned for a while to foreign exchange
markets. But uneasiness about the monetary
system, particularly about the future of the dollar, has continued and in fact intensified this
summer. There have been ample reasons for
concern—among them, the political convulsions
in Iran, the enormous new increases in oil prices
by OPEC, the narrowing at times of interest rate
differentials between N e w York and foreign
money market centers, and the limited progress
in developing an effective energy policy in the
United States. While all these factors contributed to nervousness, what has been most disturbing to foreign exchange markets in recent months
is the reacceleration of inflation in the United
States and in much of the rest of the world. Even
Germany and Switzerland no longer qualify as
islands of stability.
This unhappy development is one more indication, if any were needed, that the current instability in international finance is largely a consequence of the chronic inflation of our times and
that stability will not return to the international
monetary system until reasonably good control
over inflationary forces has been achieved in the
major industrial nations—and especially in the
United States. This critical consideration at once
raises serious questions: Why is the worldwide
disease of inflation proving so stubborn? Why is
it not yielding to the various efforts of the affected nations, including some determined efforts, to
bring it to an end? Why, in particular, have
central bankers, whose main business one might
suppose is to fight inflation, been so ineffective in
dealing with this worldwide problem?
Arthur F. Burns, who died on
Chairman of the Board of
Federal Reserve System from
following article is a reprint
NOTE. Permission to reprint this address was given by the
Per Jacobsson Foundation. Dr. Burns acknowledged the
counsel and assistance of Dr. Arthur Broida.
To me, as a former central banker, the last of
these questions is especially intriguing. One of
the time-honored functions of a central bank is to
protect the integrity of its nation's currency,
both domestically and internationally. In mone-
688
Federal Reserve Bulletin • September 1987
tary policy central bankers have a potent means
for fostering stability of the general price level.
By training, if not also by temperament, they are
inclined to lay great stress on price stability, and
their abhorrence of inflation is continually reinforced by contacts with one another and with
like-minded members of the private financial
community. And yet, despite their antipathy to
inflation and the powerful weapons they could
wield against it, central bankers have failed so
utterly in this mission in recent years. In this
paradox lies the anguish of central banking.
My aim today is to consider the causes of this
paradox and its implications for the future. Much
of what I say will inevitably reflect lessons that I
learned during my service as Chairman of the
Federal Reserve Board over an eight-year period
that ended about eighteen months ago. This may
be a good time to reflect on that experience; a
year ago I was probably too close to it to have
the necessary perspective, and a year from now
the sharpness of my impressions may have begun
to fade.
I shall focus mainly, although not exclusively,
on the United States. That is the area that I know
best, and I also believe the American experience—despite some unique aspects—is fairly
representative of that of other industrial countries. The developing nations have their own
characteristic sources and patterns of inflation.
Nevertheless, in our interdependent world, economic conditions in the United States and other
industrial countries are bound to have a significant bearing on the fortunes of developing
countries.
By way of introduction, I might note that during
much of the period since the end of World War
II, overall economic developments were, in the
main, satisfactory. By prewar standards, recessions were brief and mild through the mid-1960s,
both in the United States and in other industrial
countries; world trade expanded rapidly under a
beneficent regime of stable exchange rates; and
living standards rose impressively throughout
the developed world. In most industrial countries
inflationary pressures were troublesome from
time to time—as in the immediate postwar years,
during the Korean hostilities, and for a couple of
years after the mid-1950s. These pressures were
more substantial in some countries than in the
United States, but in none did inflation appear to
be out of control.
From 1958 through 1964, the United States
enjoyed a remarkable degree of price stability.
During that stretch of six years, the wholesale
price index remained virtually unchanged and
the consumer price index rose at an annual rate
of only a little more than 1 percent. And then the
inflation that has ever since been plaguing the
American economy got under way. Average
wholesale prices rose at an annual rate of 2
percent from 1964 to 1968, 4 percent from 1968 to
1972, and 10 percent from 1972 to 1978. This
pattern of accelerating price increases is found in
other countries also, although rates of increase
have varied widely, and in most industrial nations the acceleration began later—typically in
1969 or 1970.
Analyses of the inflation that the United States
has experienced over the past fifteen years frequently proceed in three stages. First are considered the factors that launched inflation in the
mid-1960s, particularly the governmental fine
tuning inspired by the N e w Economics and the
loose financing of the war in Vietnam. Next are
considered the factors that led to subsequent
strengthening of inflationary forces, including
further policy errors, the devaluations of the
dollar in 1971 and 1973, the worldwide economic
boom of 1972-73, the crop failures and resulting
surge in world food prices in 1973-74, the extraordinary increases in oil prices that became
effective in 1974, and the sharp deceleration of
productivity growth from the late 1960s onward.
Finally, attention is turned to the process whereby protracted experience with inflation has led to
widespread expectations that it will continue in
the future, so that inflation has acquired a momentum of its own.
I have no quarrel with analyses of this type.
They are distinctly helpful in explaining the
American inflation and, with changes here and
there, that in other nations also. At the same
time, I believe that such analyses overlook a
more fundamental factor: the persistent inflationary bias that has emerged from the philosophic
and political currents that have been transforming economic life in the United States and else-
Arthur F. Burns • The Anguish
where since the 1930s. The essence of the unique
inflation of our times and the reason central
bankers have been ineffective in dealing with it
can be understood only in terms of those currents of thought and the political environment
they have created.
Historically, Americans have had deep faith in
the concept of progress—in the idea that it was
realistic to expect to better one's own lot and
that of one's family in the course of a lifetime.
During the greater part of America's history,
government intervention in economic life was
only peripheral. Personal progress was generally
viewed as a reward for personal effort—assisted,
perhaps, by good fortune. Provision for bad
times or other contingencies of life was deemed
prudent, but that was a private responsibility.
The American's way through life lay along the
road of self-reliance; only in extremity did he
look to government or his neighbors for economic assistance.
This tradition of individualism was shattered
by the cataclysmic events of the 1930s and 1940s.
The breakdown of economic order during the
Great Depression was unprecedented in its scale
and scope, and it strained the precept of selfreliance beyond the breaking point. With onequarter of the labor force unemployed, personal
courage and moral stamina could guarantee neither a job nor a livelihood. Succor finally came
through a political idea that was novel to a
majority of the American people but compelling
nonetheless—namely, that the federal government had a far larger responsibility in the economic sphere than it had hitherto assumed.
Under the N e w Deal the federal government
undertook extensive projects of public construction and offered work relief as well. It gave direct
relief to the needy—a function previously performed only by local authorities or private charity. It established unemployment insurance and
old-age pensions. It took steps to raise wages and
prices with a view to fostering economic recovery. And beyond these innovative actions, the
federal government greatly extended the range of
its regulatory activities. It intervened massively
in the securities market, in banking, in the public
utilities industry, in the housing market, and in
the farm sector; and it gave labor unions broad
new rights and powers. Together, these and
of Central Banking
689
other N e w Deal measures laid the foundations of
an activist government—a government responsible not only for relieving suffering and insuring
against economic adversity, but also for limiting
"harmful" competition, subsidizing "worthwhile" activities, and redressing unequal balances of market power. In less than a decade the
government became a leading actor on the economic stage.
Just as Americans were persuaded during the
depression that the federal government should
help the unemployed, so they were taught by the
experience of World War II to look to government to prevent unemployment in the first place.
Under the compulsions of war, the government
had demonstrated that it could assure gainful
employment for every willing hand. It therefore
seemed reasonable—and not only to the followers of Keynes—to expect government to do the
same in a time of peace. In 1944, when President
Roosevelt set forth the basis of his postwar
domestic program in an "Economic Bill of
Rights," he put "the right to a useful and remunerative job" at the head of the list. With the war
ended, the Employment Act of 1946 explicitly
proclaimed the federal government's responsibility to promote "maximum employment," and
this came to mean "full employment" as a
matter of law as well as popular usage.
Armed with the Employment Act of 1946, the
government sought to demonstrate that it could
combat unemployment with preventive as well
as curative measures. In fact, the period from
World War II to the mid-1960s was marked not
only by a dampening of the business cycle but
also by persistent increases in the prosperity of
American families. On the one side, rising incomes, reflecting substantial gains in labor productivity, made possible rising consumption,
greater leisure, and better provision for retirement. On the other side, a steady stream of new
and often improved consumer goods tended to
sustain the growth of aggregate demand. The
extensive development of consumer credit institutions made it easier for people to acquire
automobiles, household appliances, and other
goods and services, the desire for which was
continually being whetted by alluring advertisements and the illustrations of potential life styles
broadcast by television and the movies. The
690
Federal Reserve Bulletin • September 1987
seemingly inexorable rise in living standards for
the bulk of the population was reflected in upward trends in the proportion of families that
owned their own home, that owned a summer
home, that possessed one, two, and even three
automobiles, that had telephones, that owned
televison sets, clothes washers, and food freezers; also in the proportion of the population that
had graduated from high school and from college, that traveled abroad, that owned corporate
stock, that carried life insurance, and so on.
This experience
of economic
progress
strengthened the public's expectations of progress. What had once been a quiet personal
feeling that the long future would be better than
the past, particularly for one's children, was
transformed during the postwar years into an
articulate and widespread expectation of steady
improvement in living standards—indeed, into a
feeling of entitlement to annual increases in real
income.
But the rapid rise in national affluence did not
create a mood of contentment. On the contrary,
the 1960s were years of social turmoil in the
United States, as they were in other industrial
democracies. In part, the unrest reflected discontent by blacks and other minorities with prevailing conditions of social discrimination and economic deprivation—a discontent that erupted
during the "hot summers" of the middle 1960s in
burning and looting. In part, the social unrest
reflected growing feelings of injustice by or on
behalf of other groups—the poor, the aged, the
physically handicapped, ethnics, farmers, bluecollar workers, women, and so forth. In part, the
unrest reflected a growing rejection by middleclass youth of prevailing institutions and cultural
values. In part, it reflected the more or less
sudden recognition by broad segments of the
population that the economic reforms of the N e w
Deal and the more recent rise in national affluence had left untouched problems in various
areas of American life—social, political, economic, and environmental. And interacting with
all these sources of social disturbance were the
heightening tensions associated with the Vietnam War.
In the innocence of the day, many Americans
came to believe that all of the new or newly
discovered ills of society should be addressed
promptly by the federal government. And in the
innocence of the day, the administration in office
attempted to respond to the growing demands for
social and economic reform while waging war in
Vietnam on a rising scale. Under the rubric of the
N e w Economics, a more activist policy was
adopted for the purpose of increasing the rate of
economic growth and reducing the level of unemployment. Under the rubrics of the N e w Frontier
and the Great Society, broad-scale efforts were
made to stitch up open seams in the fabric of
affluence—inadequate or unequal education,
housing, medical care, nutrition. Under the rubrics of civil rights and citizen participation,
minorities and other disadvantaged groups were
given political weapons to maintain, consolidate,
and extend their gains.
The interplay of governmental action and private demands had an internal dynamic that led to
their concurrent escalation. When the government undertook in the mid-1960s to address such
"unfinished tasks" as reducing frictional unemployment, eliminating poverty, widening the
benefits of prosperity, and improving the quality
of life, it awakened new ranges of expectation
and demand. Once it was established that the key
function of government was to solve problems
and relieve hardships—not only for society at
large but also for troubled industries, regions,
occupations, or social groups—a great and growing body of problems and hardships became
candidates for governmental solution. N e w techniques for bringing pressure on the Congress—
and also on the state legislatures and other
elected officials—were developed, refined, and
exploited. The Congress responded by pouring
out a broad stream of measures that involved
government spending, special tax relief, or regulations mandating private spending. Every demonstration of a successful tactic in securing
rights, establishing entitlements, or extracting
other benefits from government led to new applications of that tactic. Various groups found a
powerful ally in the federal courts, which repeatedly struck down legislative or administrative
limitations on access to government benefits.
Even government employees, particularly at the
state and municipal levels, discovered the pecuniary rewards of shedding genteel notions of
public service and pressing economic demands
with a strident militancy.
Many results of this interaction of government
Arthur F. Burns • The Anguish
and citizen activism proved wholesome. Their
cumulative effect, however, was to impart a
strong inflationary bias to the American economy. The proliferation of government programs
led to progressively higher tax burdens on both
individuals and corporations. Even so, the willingness of government to levy taxes fell distinctly short of its propensity to spend. Since 1950,
the federal budget has been in balance in only
five years. Since 1970, a deficit has occurred in
every year. Not only that, but the deficits have
been mounting in size. Budget deficits have thus
become a chronic condition of federal finance;
they have been incurred when business conditions were poor and also when business was
booming. But when the government runs a budget deficit, it pumps more money into the pocketbooks of people than it withdraws from their
pocketbooks; the demand for goods and services
therefore tends to increase all around. That is the
way the inflation that has been raging since the
mid-1960s first got started and later kept being
nourished.
The pursuit of costly social reforms often went
hand in hand with the pursuit of full employment.
In fact, much of the expanding range of government spending was prompted by the commitment
to full employment. Inflation came to be widely
viewed as a temporary phenomenon—or, provided it remained mild, as an acceptable condition.
"Maximum" or "full" employment, after all,
had become the nation's major economic goal—
not stability of the price level. That inflation
ultimately brings on recession and otherwise
nullifies many of the benefits sought through
social legislation was largely ignored. Even conservative politicians and businessmen began
echoing Keynesian teachings. It therefore
seemed only natural to federal officials charged
with economic responsibilities to respond quickly to any slackening of economic activity—at
times, in fact, as in the early days of 1977, to
sheer illusions of such slackening—but to proceed very slowly and cautiously in responding to
evidence of increasing pressure on the nation's
resources of labor and capital. Fear of immediate
unemployment—rather than fear of current or
eventual inflation—thus came to dominate economic policymaking.
This weighting of the scales of government
policy inevitably gave an inflationary twist to the
of Central Banking
691
economy, and so too did the expanding role of
government regulation. Traditional ways of protecting particular groups against competition—
such as raising farm price supports, increasing
minimum wages, and imposing import quotas—
did not lose their appeal as inflation kept soaring.
On the contrary, all these devices of raising costs
and prices were liberally employed even in the
face of accelerating inflation during 1977 and
1978. Also troublesome were the newer social
regulations—those concerned with health, safety, and the environment—that kept multiplying
during the 1970s. However laudable in purpose,
much of this regulatory apparatus was conceived
in haste and with little regard to the costs being
imposed on producers. Substantial amounts of
capital that might have gone into productivityenhancing investments by private industry were
thus diverted into uses mandated by the regulators. Improvements in productivity were also
slowed by the discouragement of business investment that resulted from the increasing burden of income and capital gains taxes. Progress
in equipping the work force with new plant and
equipment proceeded much less rapidly during
the 1970s than during the 1950s or 1960s, and this
shortfall contributed to the productivity slump
and thus to the escalation of costs and prices.
Additional forces on the side of supply contributed to the inflationary bias. As the incomemaintenance programs established by government were liberalized, incentives to work tended
to diminish. Some individuals, both young and
old, found it agreeable to live much of the time
off unemployment insurance, food stamps, and
welfare checks—perhaps supplemented by intermittent jobs in an expanding underground economy. Even enterprising and ambitious individuals
who sought permanent jobs could be more leisurely or more discriminating in their search
when the government, besides pursuing a fullemployment policy, provided a protective income umbrella during jobless periods. In such an
environment, employed workers could demand
and often achieve longer vacations with pay and
more frequent holidays and sick leave, besides
enjoying coffee breaks and other social rites on
the job. In such an environment, they could
afford to reject a pay cut or a small wage increase
when their employer pleaded serious financial
difficulties. Thus the number of individuals
692
Federal Reserve Bulletin • September 1987
counted as unemployed could rise even at times
when job vacancies, wages, and the consumer
price level were rising.
The philosophic and political currents that
transformed economic life and brought on
secular inflation in the United States have run
strong also in other industrial countries. Rising
economic expectations of people, wider citizen
participation in the political arena, governmental
commitments to full employment, liberal income-maintenance programs, expanding governmental regulations, and increasingly pressing demands on government for the solution of
economic and social problems—all these became
common features of the industrial democracies.
And just as the rapid expansion of government
activities in the United States was accompanied
by persistent budget deficits and inflation, that
too happened in other industrial countries. Indeed, other countries have often practiced loose
governmental finance and inflation on a more
intensive scale than has the United States.
And so I finally come to the role of central
bankers in the inflationary process. The worldwide philosophic and political trends on which I
have been dwelling inevitably affected their attitudes and actions. In most countries, the central
bank is an instrumentality of the executive
branch of government—carrying out monetary
policy according to the wishes of the head of
government or the ministry of finance. Some
industrial democracies, to be sure, have substantially independent central banks, and that is
certainly the case in the United States. Viewed in
the abstract, the Federal Reserve System had the
power to abort the inflation at its incipient stage
fifteen years ago or at any later point, and it has
the power to end it today. At any time within that
period, it could have restricted the money supply
and created sufficient strains in financial and
industrial markets to terminate inflation with
little delay. It did not do so because the Federal
Reserve was itself caught up in the philosophic
and political currents that were transforming
American life and culture.
The Employment Act of 1946 prescribes that
"it is the continuing policy and responsibility of
the Federal Government to . . . utilize all its
plans, functions, and resources . . . to promote
maximum employment." The Federal Reserve is
subject to this provision of law, and that has
limited its practical scope for restrictive actions—quite apart from the fact that some members of the Federal Reserve family had themselves been touched by the allurements of the
N e w Economics. Every time the government
moved to enlarge the flow of benefits to the
population at large, or to this or that group, the
assumption was implicit that monetary policy
would somehow accommodate the action. A
similar tacit assumption was embodied in every
pricing decision or wage bargain arranged by
private parties or the government. The fact that
such actions could in combination be wholly
incompatible with moderate rates of monetary
expansion was seldom considered by those who
initiated them, despite the frequent warnings by
the Federal Reserve that new fires of inflation
were being ignited. If the Federal Reserve then
sought to create a monetary environment that fell
seriously short of accommodating the upward
pressures on prices that were being released or
reinforced by governmental action, severe difficulties could be quickly produced in the economy. Not only that, the Federal Reserve would be
frustrating the will of the Congress, to which it
was responsible—a Congress that was intent on
providing additional services to the electorate
and on assuring that jobs and incomes were
maintained, particularly in the short run.
Facing these political realities, the Federal
Reserve was still willing to step hard on the
monetary brake at times—as in 1966, 1969, and
1974—but its restrictive stance was not maintained long enough to end inflation. By and large,
monetary policy came to be governed by the
principle of undernourishing the inflationary
process while still accommodating a good part of
the pressures in the marketplace. The central
banks of other industrial countries, functioning
as they did in a basically similar political environment, appear to have behaved in much the same
fashion.
In describing as I just have the anguish of
central banking in a modern democracy, I do not
mean to suggest that central bankers are free
from responsibility for the inflation that is our
common inheritance. After all, every central
bank has some room for discretion, and the range
is considerable in the more independent central
banks. As the Federal Reserve, for example,
Arthur F. Burns • The Anguish
kept testing and probing the limits of its freedom
to undernourish the inflation, it repeatedly
evoked violent criticism from both the Executive
Branch and the Congress and therefore had to
devote much of its energy to warding off legislation that could destroy any hope of ending inflation. This testing process necessarily involved
political judgments, and the Federal Reserve
may at times have overestimated the risks attaching to additional monetary restraint.
Any such errors of political judgment are extremely hard to identify; but I believe, in any
event, that errors of economic or financial judgment have in practice been far more significant.
In a rapidly changing world the opportunities for
making mistakes are legion. Even facts about
current conditions are often subject to misinterpretation. Statistics on unemployment in the
United States provide a good example. Even
before World War II ended, some economists
were trying to determine how much frictional
and structural unemployment would exist when
the demand for labor and the supply of labor
were in balance; in other words, the rate of
unemployment that would reflect a state of full
employment. Before long, a broad consensus
developed that an unemployment rate of about 4
percent corresponded to a practical condition of
full employment, and that figure became enshrined in economic writing and policymaking.
Conditions in labor markets, however, did not
stand still. A huge influx of women and young
people into the labor force, the liberalization of
unemployment insurance, the spread of welfare
programs, the progressive lifting of statutory
minimum wages, the increasing proportion of
families having more than one worker, and the
increase of national affluence itself—all these
changes in the economic and social environment
served to render the conventional 4 percent
figure obsolete. The unemployment rate corresponding to full employment is now widely believed to be about 5Vi or 6 percent, and the 1979
report of the Council of Economic Advisers
appears to concur in that judgment. But governmental policymakers, while generally aware of
what was happening in the labor market, were
slow to recognize the changing meaning of unemployment statistics, whether viewed as a measure of economic performance or as a measure of
hardship. The Federal Reserve did not escape
of Central Banking
693
this lag of recognition, and, once again, I believe
that other central banks at times have made
similar mistakes.
While misinterpretations of unemployment
statistics or other current information have consequences for all public policymaking, there are
other problems of interpretation to which the
central banker's calling is peculiarly subject.
Monetary theory is a controversial area. It does
not provide central bankers with decision rules
that are at once firm and dependable. To be sure,
every central banker has learned from the
world's experience that an expanding economy
requires expanding supplies of money and credit,
that excessive creation of money will over the
longer run cause or validate inflation, and that
declining interest rates will tend to stimulate
economic expansion while rising interest rates
will tend to restrict it; but this knowledge stops
short of mathematical precision.
Partly as a result of the chronic inflation of our
times, central bankers have been giving closer
attention to the money supply than did their
predecessors; but they continue to be seriously
concerned with the behavior of interest rates.
They face difficult questions about the relative
weight to be given to measures of money and
interest rates in the short run and long run; about
the concept or concepts of money that are most
significant for policy purposes; about the interpretation of such developments as the growth of
Eurocurrency deposits and credits; about the
length and regularity of the lags with which
changes in monetary growth rates influence business activity and prices; about the likely changes
in monetary velocity as a consequence of institutional innovations and business cycle developments; and so on and on—as any student of
central banking and monetary theory well
knows. And there are more fundamental problems about potential conflicts between domestic
and international objectives, about the appropriate response to exceptional events not encompassed by theory, and about the precise relevance of any theory based on past experience to
a world where behavioral patterns are continually evolving.
It is clear, therefore, that central bankers can
make errors—or encounter surprises—at practically every stage of the process of making mone-
694
Federal Reserve Bulletin • September 1987
tary policy. In some respects, their capacity to
err has become larger in our age of inflation.
They are accustomed, as are students of finance
generally, to think of high and rising market
interest rates as a restraining force on economic
expansion. That rule of experience, however,
tends to break down once expectations of inflation become widespread in a country. At such a
time, lenders expect to be paid back in cheaper
currency, and they are therefore apt to demand
higher interest rates. Since borrowers have similar expectations, they are willing to comply. An
"inflation premium" thus gets built into nominal
interest rates. In principle, no matter how high
the nominal interest rate may be, as long as it
stays below or only slightly above the inflation
rate, it very likely will have perverse effects on
the economy; that is, it will run up costs of doing
business but do little or nothing to restrain overall spending. In practice, since inflationary expectations, and therefore the real interest rates
implied by any given nominal rate, vary among
individuals, central bankers cannot be sure of the
magnitude of the inflation premium that is built
into nominal rates. In many countries, however,
these rates have at times in recent years been so
clearly below the ongoing inflation rate that one
can hardly escape the impression that, however
high or outrageous the nominal rates may appear
to observers accustomed to judging them by a
historical yardstick, they have utterly failed to
accomplish the restraint that central bankers
sought to achieve. In other words, inflation has
often taken the sting out of interest rates—
especially, as in the United States, where interest payments can be deducted for income tax
purposes.
In addition to these direct effects of inflation,
there are other effects that raise doubts about the
meaning of particular growth rates of the monetary aggregates. I have in mind changes in financial practices that evolved in the United States
during the 1960s—particularly during the bouts
with tight money in 1966 and 1969—and that
culminated in an explosion of financial innovations in the 1970s.
Many of these changes were facilitated by
regulatory actions or the development of new
computer technology. But the driving force behind them was the incentive that sharply rising
market interest rates gave to financial institutions and their customers to change their ways of
doing business. Commercial banks responded to
rising rates by economizing on non-interest-bearing reserves, and their customers responded by
economizing on non-interest-bearing demand deposits. Both banks and large corporations developed new sources of funds in the Eurodollar
market and the domestic commercial paper market. Banks developed new techniques of liability
management by exploiting these sources as well
as the vast potential of the federal funds market
and the market for negotiable certificates of
deposit. Other financial institutions—including
savings banks, savings and loan associations,
credit unions, and money market mutual funds—
developed new transactions services in connection with customer accounts on which they paid
interest. Banks fought this competition for transactions balances by offering large depositors
special services that reduced the average level of
balances they had to carry and by employing
various ingenious means to pay interest on balances that were held in large part for transactions
purposes.
Developments of these kinds have had profound consequences for the environment in
which American monetary policy operates. Not
long ago, the thrust of monetary restraint was
conveyed more by reductions in the availability
of credit—particularly residential mortgage credit—than by rising interest rates; at present, rising
interest rates are the primary channel of restraint. This means that a higher level of interest
rates is required to achieve any given degree of
restraint—quite apart from the effects of inflation
premiums that I discussed earlier. But how much
higher is not clear; only time will tell. Not long
ago, changes in M l , the familiar monetary aggregate confined to currency and demand deposits,
reflected reasonably well changes in the aggregate volume of transactions balances; at present,
with new alternatives to bank demand deposits
emerging all the time, a lower rate of growth in
Ml is required to achieve any given degree of
restraint. But how much lower is not clear; only
time will tell. Nor is it clear what other monetary
aggregate, if any would be more serviceable than
the traditional Ml as a monetary indicator. As a
result of these effects of inflation, central bank-
Arthur F. Burns • The Anguish
ing has lost its moorings not only in interest
rates: that has happened to a large extent also in
the case of the monetary aggregates—certainly in
the United States and perhaps in other countries
as well.
There is no need to expand further on the
opportunities for misjudgment that in recent
years have surrounded policymaking at central
banks. Some uncertainty, of course, has always
characterized monetary policy, just as it has
characterized policy decisions generally, whether in public or private life. It should be noted,
however, that lags in recognizing some of the
developments I have been discussing—with respect to unemployment rates, interest rates, and
growth rates of the monetary aggregates—would
tend to bias policy toward monetary ease. Moreover, the emergence of an inflationary psychology in industrial countries has imparted an asymmetry to the consequences of monetary errors,
even if the errors themselves occurred as often in
one direction as the other.
There is a profound difference between the
effects of mistaken judgments by a central bank
in our age of inflation and the effects of such
judgments a generation or two ago. In earlier
times, when a central bank permitted excessive
creation of money and credit in times of prosperity, the price level would indeed tend to rise. But
the resulting inflation was confined to the expansion phase of the business cycle; it did not persist
or gather force beyond that phase. Therefore,
people generally took it for granted that the
advance of prices would be followed by a decline
once a business recession got under way. That is
no longer the case.
Nowadays, businessmen, farmers, bankers,
trade union leaders, factory workers, and housewives generally proceed on the expectation that
inflation will continue in the future, whether
economic activity is booming or receding. Once
such a psychology has become dominant in a
country, the influence of a central bank error that
intensified inflation may stretch out over years,
even after a business recession has set in. For in
our modern environment, any rise in the general
price level tends to develop a momentum of its
own. It stimulates higher wage demands, which
are accommodated by employers who feel they
can recover the additional costs through higher
of Central Banking
695
prices; it results in labor agreements in key
industries that call for substantial wage increases
in later years without regard to the state of
business then; and through the use of indexing
formulas, it leads to automatic increases in other
wages as well as in social security payments,
various other pensions, and welfare benefits, in
rents on many properties, and in the prices of
many commodities acquired under long-term
contracts. On the other hand, unintended central
bank effects of a restrictive type do not ramify in
similar fashion. To develop any significant momentum in unwinding inflation, they would need
to be both large and repetitive—a combination
that can hardly occur under prevailing conditions
in the industrial democracies.
If my analysis of central banking in the modern
environment is anywhere near the mark, two
conclusions immediately follow. First, central
banks have indeed been participants in the inflationary process in which the industrial countries
have been enmeshed, but their role has been
subsidiary. Second, while the making of monetary policy requires continuing scrutiny and can
stand considerable improvement, we would look
in vain to technical reforms as a way of eliminating the inflationary bias of industrial countries.
What is unique about our inflation is its stubborn
persistence, not the behavior of central bankers.
This persistence reflects the fundamental forces
on which I dwelt earlier in this address—namely,
the philosophic and political currents of thought
that have impinged on economic life since the
Great Depression and particularly since the mid1960s.
My conclusion that it is illusory to expect
central banks to put an end to the inflation that
now afflicts the industrial democracies does not
mean that central banks are incapable of stabilizing actions; it simply means that their practical
capacity for curbing an inflation that is continually driven by political forces is very limited.
Historically, central banks have helped to slow
down the pace of economic activity at certain
times and to stimulate economic activity at other
times. They have also contributed to economic
stability by serving as lenders of last resort or
even going beyond that traditional function. During this decade alone, the Federal Reserve
moved on at least two occasions to prevent
696
Federal Reserve Bulletin • September 1987
financial crises that otherwise could easily have
occurred. I have in mind particularly the failure
of the Penn Central Transportation Company in
June 1970 and the failure of the Franklin National
Bank in October 1974. In the former case, the
inability of Penn Central to refinance its outstanding commercial paper caused consternation
among holders of commercial paper generally.
To prevent a financial panic the Federal Reserve
put aside its monetary targets for a while, opened
the discount window wide, and changed its regulations so that commercial banks could raise
funds in the open market to finance firms unable
to renew their maturing commercial paper. In the
Franklin National case, the Federal Reserve
loaned to that troubled international bank almost
$2 billion; and while these advances were outstanding it was possible to arrange a takeover by
another bank that protected the interests of
Franklin's depositors and customers. These actions were influenced by a feeling of responsibility for the financial system as a whole—international as well as domestic. The central banks of
some other countries, notably the Bank of England, have likewise discharged constructively
the function of serving as lenders of last resort,
and the entire concept of central bank responsibility has been both widened and clarified
through discussions in recent years at the Bank
for International Settlements.
All this and much more deserves to be noted
about central banks—especially their tireless efforts to awaken the citizens of their respective
countries to the economic and social dangers
posed by inflation. But whatever the virtues or
shortcomings of central banks may be, the fact
remains that alone they will be able to cope only
marginally with the inflation of our times. The
persistent inflation that plagues the industrial
democracies will not be vanquished—or even
substantially curbed—until new currents of
thought create a political environment in which
the difficult adjustments required to end inflation
can be undertaken.
There are some signs, as yet tenuous and inconclusive, that such a change in the intellectual and
political climate of the democracies is getting
under way. One of the characteristic features of a
democracy is that it encourages learning from
experience. Recent disturbing trends in economic and social life, particularly the persistence and
acceleration of inflation, have led to much soulsearching by leaders of thought and opinion.
Among economists, the Keynesian school has
lost much of its erstwhile vigor, self-confidence,
and influence. Economists are no longer focusing
so exclusively on unemployment and governmental management of aggregate demand. They
are paying more attention to the management of
aggregate supply—to the need to strengthen incentives to work and innovate, to ways of stimulating saving and investment, to the importance
of eliminating barriers to competition, to ways of
reducing the regulatory burdens imposed on industry, and to other means of bolstering business
confidence. Many economists now recognize
that much of reported unemployment is voluntary, that curbing inflation and reducing involuntary unemployment are complementary rather
than competitive goals, that persistent governmental deficits and excessive creation of money
tend to feed the fires of inflation, that the high
savings rate that usually prevails in the early
stages of inflation is eventually succeeded by
minimal savings, and that when this stage is
reached it becomes very much harder to bring
inflation under control.
The intellectual ferment in the world's democracies is having its influence not only on businessmen and investors, but also on politicians,
trade union leaders, and even housewives; for all
of them have been learning from experience and
from one another. In the United States, for
example, people have come to feel in increasing
numbers that much of the government spending
sanctioned by their compassion and altruism was
falling short of its objectives: that urban blight
was continuing, that the quality of public schools
was deteriorating, that crime and violence were
increasing, that welfare cheating was still widespread, that collecting unemployment insurance
was becoming a way of life for far too many—in
short, that the relentless increases of government
spending were not producing the social benefits
expected from them and yet were adding to the
taxes of hard-working people and to the already
high prices they had to pay at the grocery store
and everywhere else. In my judgment, such
feelings of resentment and frustration are largely
responsible for the conservative political trend
Arthur F. Burns • The Anguish
that has developed of late in the United States.
And I gather from the results of recent elections
elsewhere that concern about inflation and disenchantment with socialist solutions are increasing
also in other industrial countries. Fighting inflation is therefore being accorded a higher priority
by policymakers in Europe and in much of the
rest of the world.
In the United States a great majority of the
public now regard inflation as the Number One
problem facing the country, and this judgment is
accepted by both the Congress and the Executive Branch. Some steps have therefore been
taken within the past year to check the rapid rise
of federal spending, to lower certain taxes in the
interest of encouraging business investment, and
yet to bring down the still large budget deficit.
Pressures to augment the privileges of trade
unions have been resisted by the Congress.
Some government regulations—as in the case of
airlines and crude oil—have been eased. And
even restrictive moves by the Federal Reserve,
which not long ago would have stirred anger and
anxiety in government circles, have been accepted with equanimity. Symbolic of the changed
political atmosphere was the announcement of
an increase in the Federal Reserve discount rate
on the very day this July when a sizable decline
of the nation's overall production was being
reported for the spring quarter.
The present widespread concern about inflation in the United States is an encouraging development, but no one can yet be sure how far it will
go or how lasting it will prove. The changes that
have thus far occurred in fiscal, monetary, and
structural policies have been marginal adjustments. American policymakers tend to see merit
in a gradualist approach because it promises a
return to general price stability—perhaps with a
delay of five or more years but without requiring
significant sacrifices on the part of workers or
their employers. But the very caution that leads
politically to a policy of gradualism may well lead
also to its premature suspension or abandonment
in actual practice. Economic life is subject to all
sorts of surprises and disturbances: business
recessions, labor unrest, foreign troubles, monopolistic shocks, elections, and governmental
upsets. One or another such development, especially a business recession, could readily overwhelm and topple a gradualist timetable for curb
of Central Banking
697
ing inflation. That has happened in the past, and
it may happen again.
If the United States and other industrial countries are to make real headway in the fight against
inflation it will first be necessary to rout inflationary psychology—that is, to make people feel
that inflation can be, and probably will be,
brought under control. Such a change in national
psychology is not likely to be accomplished by
marginal adjustments of public policy. In view of
the strong and widespread expectations of inflation that prevail at present, I have therefore
reluctantly come to believe that fairly drastic
therapy will be needed to turn inflationary psychology around.
The precise therapy that can serve a nation
best is not easy to identify, and what will work
well in one country may work poorly in another.
In the case of the American inflation, which has
become a major threat to the well-being of much
of the world as well as of the American people, it
would seem wise to me at this juncture of history
for the government to adopt a basic program
consisting of four parts. The first of these would
be a legislative revision of the federal budgetary
process that would make it more difficult to run
budget deficits and that would serve as the initial
step toward a constitutional amendment directed
to the same end. The second part would be a
commitment to a comprehensive plan for dismantling regulations that have been impeding the
competitive process and for modifying others
that have been running up costs and prices
unnecessarily. The third part would be a binding
endorsement of restrictive monetary policies until the rate of inflation has become substantially
lower. And the fourth part would consist of
legislation scheduling reductions of business taxes in each of the next five years—the reduction
to be quite small in the first two years but to
become substantial in later years. This sort of tax
legislation would release powerful forces to improve the nation's productivity and thereby exert
downward pressure on prices; and it would also
help in the more immediate future to ease the
difficult adjustments forced on many businesses
and their employees by the adoption of the first
three parts of the suggested program.
I wish I could close this long address by
expressing confidence that a program along the
lines I have just sketched, or any other construc-
698
Federal Reserve Bulletin • September 1987
tive and forceful program for dealing with inflation, will be undertaken in the near future in the
United States or elsewhere. That I cannot do
today. I am not even sure that many of the
central bankers of the world, having by now
become accustomed to gradualism, would be
willing to risk the painful economic adjustments
that I fear are ultimately unavoidable. I would
therefore not be surprised if the return to reasonable price stability in the industrial democracies
and thereby to an orderly international monetary
system is postponed by more false starts. But if
political patience in individual countries is severely tested as that happens, the learning process will also be speeded. The conservative trend
that now appears to be under way in many of the
industrial democracies will then gather strength;
and unless political leadership falls into irresponsible hands, the inflationary bias that has been
sapping the economic and moral vitality of the
democracies can finally be routed.
•
699
Staff Studies
The staffs of the Board of Governors
of the
Federal Reserve
System
and of the
Federal
Reserve Banks undertake studies that cover a
wide range of economic and financial
subjects.
From time to time the results of studies that are
of general interest to the professions
and to
others are summarized in the FEDERAL RESERVE
BULLETIN.
The analyses
and conclusions
set forth are
those of the authors and do not
necessarily
STUDY
indicate concurrence by the Board of
Governors,
by the Federal Reserve Banks, or by the members of their staffs.
Single copies of the full text of each of the
studies or papers summarized
in the BULLETIN
are available without charge. The list of Federal
Reserve Board publications
at the back of each
BULLETIN includes a separate section
entitled
"Staff Studies"
that lists the studies that are
currently
available.
SUMMARY
STOCK MARKET
VOLATILITY
Carolyn D. Davis and Alice P. White—Staff,
Board of
Governors
Prepared as a staff study in the spring of 1987
Dramatic changes in stock market indexes during
the past year have generated questions about
fundamental shifts in the volatility of share
prices. Although volatility in stock prices inevitably results w h e n investors' expectations about
corporate earnings and interest rates change,
some observers maintain that innovations in
trading techniques have introduced additional
volatility into equity markets. This study reviews
these innovations—arbitrage trading, program
trading, and portfolio insurance—and examines
several aspects of volatility in share prices to
determine whether it has changed measurably
since the techniques were put into active use.
Traders use arbitrage techniques to generate
profits from price discrepancies between related
financial instruments. Such trading has been
criticized because arbitrageurs need consider
only relative prices and costs and do not necessarily base their decisions on economic information. Nonetheless, prices must change in at least
one market before arbitrage opportunities devel-
op; and if other market participants are buying
and selling financial instruments based on fundamental economic information, price m o v e m e n t s
will reflect that information.
Advances in computer technology have facilitated the development of computerized procedures that process information for use by market
participants, produce buy and sell orders, and
send these orders to exchanges for execution.
This technique, program trading, permits large
portfolios to be traded as though they were
individual stocks. The simultaneous execution of
large program trades can increase volatility if
prices overshoot n e w equilibrium values. An
analysis of the behavior of prices during periods
of heavy program trading suggests that changes
in prices have resulted from shifts in investors'
perceptions but that these shifts may have occurred more quickly than otherwise because of
program trading.
The third innovation in trading, portfolio insurance, refers to hedging strategies designed to
700
Federal Reserve Bulletin • September 1987
protect portfolios of securities against declines in
prices. Its development has been facilitated by
the existence of stock-index futures markets.
The use of portfolio insurance techniques is
controversial because it may precipitate sales of
stocks in declining markets. If stocks became
underpriced in light of economic conditions,
however, opportunities for buying would be created for speculators and other market participants, and the price spiral would end.
Despite changes in the methods of trading
stock-related instruments, little evidence links
these innovations to volatility in the stock market. The authors examine changes in aggregate
indexes, which represent portfolios of stocks, for
various time periods, holding periods, and measures of volatility. The movements of stock
indexes suggest that the dispersion of daily returns in 1986 and 1987, when index-related trading is believed to have been heavy, was typical of
that observed since 1970. The 1970s and 1980s
appear to be somewhat more volatile than the
1950s and 1960s. However, this increase in volatility began well before the extensive use of
derivative instruments and new trading tech-
niques in the 1980s. An analysis of returns on
stock issues of individual companies supports
the conclusion that the recent volatility of these
issues does not appear to be cause for concern.
Unexpected changes in fundamental macroeconomic conditions, particularly fluctuations in
business activity and interest rates, appear relatively important in explaining changes in the
volatility of share prices throughout recent decades. The largest fluctuations in share prices
during the postwar era occurred in the mid1970s, a time of highly uncertain economic conditions. When one controls for variability in
economic and financial conditions, however, the
movements in stock prices appear similar over
time.
The empirical evidence presented in this study
provides little support for the position that the
behavior of stock prices in the aggregate has
changed substantially as the use of stock-related
instruments has expanded. Measures of volatility
range widely from year to year, and shifts in
volatility are most noticeable in the longer term
when underlying macroeconomic conditions also
have been more volatile.
701
Industrial Production
Released
for publication
risen at an annual rate of 2.4 percent compared
with a gain of less than 1 percent over the 12
months of 1986. The current level of the index is
128.2 percent of the 1977 average.
In market groups, total output of consumer
goods was about unchanged in June; slight gains
in the output of home goods and nondurable
consumer items were offset by reduced production of motor vehicles. Autos were assembled at
July 15
Industrial production increased 0.2 percent in
June, after having risen 0.5 percent in May.
Revisions to the March, April, and May indexes
indicate slightly higher production levels than
were previously published. The June increase
was paced by gains in the production of materials. So far this year, industrial production has
Ratio scale, 1977 = 100
Products
140
TOTAL INDEX
120
Materials
100
80
MANUFACTURING
140
Durable
Nondurable
v c X./ /
1
1
—
1
1
MATERIALS
1
1
Durable
Nondurable
120
100
•
Energy
80
INTERMEDIATE PRODUCTS
Business supplies
-
140
Construction supplies
240
FINAL PRODUCTS
MOTOR V E H I C L E S A N D P A R T S
200
Defense and space
120
160
100
140
80
20
100
60
80
1981
1983
1985
1987
All s e r i e s are s e a s o n a l l y a d j u s t e d . L a t e s t figures: J u n e .
1981
1983
1985
1987
702
Federal Reserve Bulletin • September 1987
1977 = 100
Percentage change from preceding month
1987
1987
Group
June
May
Feb.
Mar.
Apr.
May
June
Percentage
change,
June 1986
to June
1987
Major market groups
Total industrial production
128.0
128.2
.5
.1
.0
.5
.2
3.2
Products, total
Final products
Consumer goods
Durable
Nondurable
Business equipment..
Defense and s p a c e . . .
Intermediate products..
Construction supplies
Materials
136.5
135.2
127.3
119.6
130.2
141.3
187.1
140.9
127.9
116.4
136.4
135.1
127.1
118.3
130.4
141.1
187.6
140.8
127.1
117.2
.9
1.0
.6
2.0
.2
1.9
.7
.4
.1
.0
.1
.0
.0
-1.0
.3
.0
.0
.5
.1
.1
-.5
-.5
-.7
-2.6
.0
-.2
.0
-.4
-1.0
.6
.6
.6
.6
1.3
.3
.6
.3
.8
.6
.4
-.1
-.1
-.1
-1.0
.2
-.1
.3
-.1
-.6
.7
3.0
3.1
2.2
3.5
1.8
3.3
5.2
2.8
2.4
3.6
.4
.4
.3
.4
1.9
.0
.0
.1
.7
1.3
3.6
3.4
3.8
-1.2
3.2
Major industry groups
132.8
130.4
136.2
97.7
112.2
132.8
130.4
136.1
97.0
110.7
Manufacturing
Durable
Nondurable
Mining
Utilities
.7
1.1
.1
-1.0
.1
.2
.1
.4
.3
-.1
.0
-.5
.7
.1
-.8
NOTE. Indexes are seasonally adjusted.
an annual rate of 6.9 million units, compared
with a rate of 7.1 million in May; output of
lightweight trucks also was reduced in June.
Production of business equipment also was
little changed in June; further gains occurred in
commercial, manufacturing, and construction
and farm machinery, but output of transit equipment fell—owing largely to the reduced volume
Total industrial production—Revisions
Estimates as shown last month and current estimates
Index (1977=100)
Month
Percentage change
from previous
months
Previous
Current
Previous
Current
127.3
127.2
127.8
127.3
127.3
128.0
128.2
.0
-.1
.5
.1
.0
.5
.2
March
April
May
of motor vehicle assemblies. Output of defense
equipment posted another small gain in June—so
far in 1987 this sector has shown more moderate
gains than in recent years. Production of construction supplies retreated in June after having
increased in May and was slightly below levels at
the end of last year; the recent sluggishness
probably reflects weaker construction activity so
far in 1987.
In June, gains occurred in the production of
durable, nondurable, and energy materials as
well. In the nondurable category advances continued in the output of textiles, paper, and chemicals. Energy materials advanced sharply in June
due largely to increased electricity generation.
In industry groups, manufacturing output was
unchanged overall in June at a level about 3!/2
percent higher than it was a year earlier. Mining
output increased in June—in particular, coal and
metal mining. Output by utilities rose sharply.
703
Statement to Congress
Statement by Paul A. Volcker, Chairman,
Board
of Governors of the Federal Reserve
System,
before the Committee on Banking, Finance and
Urban Affairs, U.S. House of
Representatives,
July 21, 1987.
I appreciate this, my last, opportunity to appear
before you as Chairman of the Federal Reserve
Board in connection with the semiannual review
of monetary policy. You have the official
Report of the Board of Governors before you,
and I will be blessedly brief in touching
upon some of the main points. (See "Monetary Policy Report to the Congress," Federal Reserve
Bulletin,
August 1987, pages
633-46.)
As you know, the economy has continued to
grow this year, carrying the expansion well into
its fifth year. At the same time, however, the
inflation rate has accelerated appreciably relative
to the low rate prevailing in 1986.
A change in that direction has been widely
anticipated in response to the rebound in oil
prices and the depreciation of the dollar. Nevertheless, the size and pervasiveness of the price
increases—which have included many nonenergy materials as well as services—affected the
psychology and expectations in financial markets, particularly in April and early May. Recurrent concerns about the dollar internationally
also at times affected the mood of domestic
markets, and interest rates rose rather sharply
for a time.
Through the early part of the year, Federal
Reserve operations placed minimal pressure on
bank reserve positions. A s reported earlier, however, beginning in late April definite but modest
steps were taken to increase reserve pressures
somewhat. Perceptions of that action appeared
to help calm concerns about the future course of
the dollar and inflation.
Most interest rates, long- and short-term, have
retraced part of the earlier rise. However, longterm interest rates and prices of sensitive com
modities, some of which had been deeply depressed, remain well above their levels of earlier
this year.
The approach of the Federal Reserve toward
the provision of reserves has not changed since
May. However, growth in the various monetary
aggregates slowed further in the second quarter.
A reduction in the rate of growth of those aggregates from the relatively high levels of 1986 had
been both anticipated and desired by the Federal
Open Market Committee, as reported to you in
February. However, it is also true that, with
institutional and market developments importantly affecting the relationships between the
various measures of money and the variables we
ultimately care about, judgments about the appropriate growth of the aggregates have become
both more difficult and more dependent on prevailing economic and market circumstances.
For that reason, the Committee did not set
forth a particular target range for M1 this year in
February. That judgment was reaffirmed at the
meeting earlier this month. M2 is currently running below, and M3 around, the lower ends of
their 5Vi to %Vi percent ranges established in
February. The Committee decided not to change
those ranges for 1987. In doing so, however,
there was agreement that, depending on further
evidence with respect to emerging trends in
economic activity, inflation, and domestic and
international financial markets, actual growth
around the lower ends of those ranges may well
remain appropriate.
In judging appropriate monetary growth during
the course of the year, or from year to year,
account needs to be be taken of the apparent
increase in the sensitivity of demands for money,
and for money-like assets, to absolute and relative changes in market interest rates. Interest
rates administered by institutions, especially
those on transaction accounts, tend to lag market
rates both when interest rates are rising and
when they are falling (of course, no explicit
interest can be paid on demand deposits). At the
704
Federal Reserve Bulletin • September 1987
same time, the cost and effort involved in shifting
funds between types of accounts, or into and out
of market instruments, has greatly diminished.
Experience suggests that, as a result of these
factors, demand deposits, negotiable order of
withdrawal (NOW) accounts, and money market
deposit accounts all tend to grow relatively slowly, if at all, when market rates are rising (as
during the second quarter) but much faster than
normally as market rates fall, as during 1985 and
1986. Those differences in growth rates in money
will tend to be reflected in inverse movements in
the velocity (that is, the measured rate of turnover) of money rather than commensurate
changes in economic activity or prices.
The sensitivity of velocity to changes in interest rates makes it more difficult to judge the
appropriate rate of monetary growth—particularly over periods as short as a quarter or a year—
and impossible without reference to the stream
of available evidence on economic activity,
prices, and other factors. This year, too, concerns about the international performance of the
dollar have at times had a significant bearing on
operational decisions. Specifically, the tightening of reserve availability in the spring was
related in substantial part to the desirability, in
light of the substantial cumulative depreciation
over the previous two years and other economic
policy undertakings here and abroad, of maintaining reasonable stability in the external value
of the dollar. That judgment is, as you know,
shared with the administration and the finance
ministers and central bank governors of other
leading industrialized countries.
Looking ahead to 1988, the Open Market Committee decided tentatively to reduce the target
ranges for M2 and M3 xh percentage point to 5 to
8 percent. While recognizing the inevitable range
of uncertainty I referred to earlier, some reduction in the target ranges clearly appeared appropriate in recognition of the importance of assuring that the temporary bulge in price increases
foreseen for this year not become a base for a
renewed inflationary process. The appropriate
range for 1988 will, of course, again be reviewed
with care at the start of the year.
More broadly, policy has to be judged against
progress toward the more basic goals of growth
and stability—and it seems to me fatuous to think
the first could long be sustained without the
latter. At the same time, now and for some years
ahead, we will need to work to narrow and
ultimately correct the large imbalances in our
internal and external economic positions—adjustments that necessarily have implications for
the policies and prospects of other countries as
well. What is at issue is whether we can make
those necessary adjustments while sustaining
progress toward the broader goals.
In some areas, developments in the past six
months have been strongly encouraging in that
respect.
• The evidence by now is pretty clear that, in
real terms, our trade balance is improving, even
in the face of continuing sluggish growth, high
unemployment, and excess capacity abroad.
• While growth in domestic consumption has
slowed—one essential part of the adjustment
process—the expansion of domestic output and
employment has been well maintained, and unemployment, at close to 6 percent, has dropped
to the lowest level in this decade. Manufacturing
has picked up and prospects for business investment may be improving.
• Helped by some large unanticipated capital
gains tax receipts, this year's budget deficit will
apparently be driven even below earlier expectations, and thus very substantially below the fiscal
1986 level.
• Internationally, leading nations are not only
agreed upon the desirability of greater exchange
rate stability but appear to be working more
effectively to that end.
• In another area demanding a high level of
international cooperation, the basic approach for
dealing with the international debt problems has
continued to be implemented with substantial
success despite doubts and challenges by some.
Of central importance, there has been continuing evidence of restraint and discipline on costs
and wages in much of American industry, offering the prospect of lower rates of inflation in the
months ahead. Over time, that must be an absolutely essential element in maintaining our international competitiveness as well as in restoring
domestic stability after the bulge in prices this
year.
At the same time, it would be nonsense for me
to claim that all is safely and securely on path.
The remaining risks and problems are apparent.
Statement
Even the otherwise satisfying fall in the unemployment rate this year implicitly has a discouraging aspect. Outside of manufacturing, the statistics suggest that productivity growth is quite
dismal—so slow, in fact, that I cannot dismiss
the thought that the reported statistics may partly reflect measurement error.
But no error of measurement can entirely
explain away that our private saving, in historical
or in international context, remains so low, or
that our federal deficit remains so large, or that
we, the putative leader of the western world, are
so dependent on other people's capital. Despite
the better news on this year's federal deficit,
some projections of future deficits are assuming
current programs are being raised rather than
reduced and the political impasse over doing
something about it apparently remains. In the
circumstances, the Gramm-Rudman-Hollings
targets are threatening to become pie in the sky.
The already slow growth in other industrialized countries appears to have slowed further
this year, working against the adjustments needed in trade and current account positions among
Japan, Western Europe, and the United States.
And, in that environment the dangers of protectionist trade legislation and a breakdown in the
servicing of international debts are enlarged.
For all those reasons and more, my very able
successor, and the Federal Reserve generally,
Chairman Volcker presented
to Congress
705
will have challenge aplenty. But I, as I have
spelled out earlier, would like to think there is
something upon which to build as well.
Finally, I would like to acknowledge specifically the usefulness from my standpoint of these
regular semiannual hearings on monetary policy.
You and I are both conscious of the special
position of the Federal Reserve System within
the overall framework of government. The long
terms of members of the Board of Governors, the
participation of the regional Federal Reserve
Banks in the policy process, our budgetary autonomy, and the professionalism of our staff are
all designed to provide some insulation, in deciding upon money creation, against partisan or
passing political pressures.
In our system of government, however, insulation cannot be equated to isolation, and particularly isolation from reporting and accountability
to the Congress and to the public. These hearings
are an important element in that discipline. I
have welcomed the opportunity they have provided for us to consult with the Congress and to
explain our purposes, our approaches, and our
problems in dealing with a complicated, changing
economic environment. And I want to express
my appreciation as well for the many courtesies
you have extended me personally over these past
eight years as we have worked together to foster
economic stability and growth.
•
identical testimony before the Senate Committee
and Urban Affairs, July 23, 1987.
on Banking,
Housing,
706
Announcements
ALAN GREENSPAN
BECOMES
CHAIRMAN OF THE BOARD OF
GOVERNORS
At a White H o u s e ceremony on August 11, 1987,
Alan Greenspan took the oath of office as Chairman and a member of the Board of Governors.
The oath was administered by Vice President
George Bush.
The Senate confirmed Dr. Greenspan for the
positions on August 3 following a hearing on July
21 by the Senate Committee on Banking, Housing, and Urban Affairs.
At the ceremony, Dr. Greenspan made the
following remarks:
Mr. President, Mr. Vice President, Friends: A little
more than than two months ago in the White House
Press Room down the hall the President announced
that he was nominating me to replace Paul Volcker. At
that time I indicated to the President, and today I
repeat, how much I appreciate his confidence in me to
act as a replacement for Paul whose career at the Fed
has been one with few parallels in the history of this
nation's public service.
Since the nomination I have received innumerable
best wishes from friends, new and old, from all over
the world. I am particularly saddened, however, that
Dr. Arthur F. Burns, former Council of Economic
Advisers and Federal Reserve Board Chairman, and
my mentor for 35 years through graduate school and
thereafter, is not able to be with us today.
I would particularly like to thank the staff of the
Federal Reserve who along with Paul have been
exceptionally gracious with their time and efforts to
bring me up to speed for this extraordinary challenge. I
also wish to thank the Senate Banking Committee and
the Senate as a whole who confirmed my nomination.
Perhaps I should also thank in advance the creators
of all those events that will make the next four years
easy going: inflation which always stays put, a stock
market which is always a bull, a dollar which is always
stable, interest rates which stay low, and employment
which stays high. But, most assuredly, I would be
thankful to those who have the capability of repealing
the laws of arithmetic which would make all of the
foregoing possible.
Earlier, Chairman Volcker submitted his resignation as a member of the Board of Governors.
His August 3 letter to President Reagan follows:
August 3, 1987
The President
The White House
Washington, D.C.
Dear Mr. President:
I understand that Senate confirmation of Alan
Greenspan as Chairman and Governor of the Federal
Reserve Board is likely this week. What technically
remains is for me to submit my formal resignation as
Governor so that he can take office for the unexpired
portion of my term. I do so now, effective upon his
swearing-in, which I understand is tentatively scheduled for the week of August 10.
As we agreed informally, I will continue to serve as
Chairman through that date.
May I also thank you again, Mr. President, and Mrs.
Reagan, for your gracious presence and remarks at my
"farewell dinner" at the State Department last week.
Barbara and I will gratefully remember the occasion as
the highlight of my rite of passage back to private life.
Faithfully yours,
Paul A. Volcker
RESTRUCTURING
OF
INTEREST RATE CHARGES
ON DISCOUNT WINDOW
BORROWING
In the interest of simplification, the Federal
Reserve Board on July 27, 1987, announced a
restructuring of interest rates that are charged on
Announcements
borrowings from the discount window for extended credit. The new structure will apply a
flexible rate that will vary with market interest
rates to extended credit outstanding for more
than 30 days.
N o change is being made in the basic discount
rate for adjustment credit, which remains at 5Vi
percent.
The new simplified structure of rates for extended credit provides for use of the basic discount rate for the first 30 days of borrowing,
followed by a flexible rate for borrowings of
more than 30 days. The flexible rate will be
somewhat above the rates on market sources of
funds to depository institutions but in no case
will the rate charged be less than the basic
discount rate plus 50 basis points. Under the
extended credit program, credit is made available to institutions experiencing exceptional financial strains over a prolonged period of time.
Currently, the structure of rates applied to
extended credit is a complex mixture of fixed and
flexible rates that depends on the time that credit
has been outstanding and on the size of the
borrowing institution. Under this structure, the
basic rate generally has applied to the first 60
days of extended credit borrowing and the basic
rate plus 1 percentage point to the next 90 days.
After 150 days, Reserve Banks have charged a
rate equal to the basic rate plus 2 percentage
points or a flexible rate related to market rates.
This flexible rate has been subject to a floor of
the basic rate plus 1 percentage point.
In taking this action, the Board approved
requests from the Boards of Directors of all 12
Reserve Banks to establish the new structure.
The new rates will take effect on July 30.
INTERIM
STATEMENT
ON LARGE-DOLLAR
ON REDUCING
TRANSFER
RISKS
SYSTEMS'
The Federal Reserve Board adopted on July 30,
1987, an interim statement of its policy on reducing risks on large-dollar transfer systems. This
interim policy supersedes the policy statement
adopted by the Board on May 17, 1985, and will
1. The text of the interim policy statement is available on
request from Publications Services, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551.
707
remain in effect pending reevaluation of the
Board's risk reduction program.
Large-dollar-funds-transfer networks are an
integral part of the payments and clearing mechanism. A daylight overdraft occurs when a depository institution sends funds over Fedwire in
excess of the balance in its reserve or clearing
account or sends more funds over a private
network than it has received.
The Board's May 1985 policy statement required privately owned large dollar payment
networks using Federal Reserve net settlement
services to achieve the following: (1) require
each participant to establish a limit on the maximum net transfer amount that it is willing to
receive from each other participant ("bilateral
net credit limit") and (2) establish for each
participant a maximum amount of net transfers
("sender net debit cap") that the participant can
transfer over that network. The policy also
strongly encouraged each depository institution
incurring daylight overdrafts on Fedwire or participating on a private network to adopt a crosssystem sender net debit cap designed to limit the
amount of risk an institution presents across all
systems combined.
The interim policy statement modifies the May
1985 policy as follows:
• Reduces in two stages the current sender net
debit cap by 25 percent—15 percent on January
14, 1988, and the balance on May 19, 1988,
unless subsequent events suggest that the second
step would disrupt the payments system or financial markets.
• Exempts depository institutions from selfevaluation guidelines if their board of directors
approves a de minimis net debit cap of the
smaller of 20 percent of adjusted primary capital
or $500,000. Implementation of this provision
would be no later than December 3, 1987, or
earlier at the discretion of Reserve Banks.
• Imposes a $50 million limit on book-entry
securities transfers over Fedwire.
• Subjects the clearing procedures of primary
dealers to review by the Federal Reserve Bank of
N e w York.
• Permits interaffiliate Fedwire transfers resulting in daylight overdrafts, provided certain safeguards are observed.
• Permits depository institution holding compa-
708
Federal Reserve Bulletin • September 1987
nies to centralize their wire transfer operations at
one or more of their subsidiaries, provided certain safeguards are observed.
Nathan C. Collins
Executive Vice President
Valley National Bank of Arizona
Phoenix, Arizona
NEW MEMBERS
APPOINTED
TO LARGE DOLLAR PAYMENTS
ADVISORY
GROUP
Donald R. Hollis
Executive Vice President
First Chicago Corporation
Chicago, Illinois
SYSTEM
The Federal Reserve Board announced on July
30, 1987, the appointment of new members to the
Large Dollar Payments System Advisory Group
for terms of three years to replace members
w h o s e terms have expired.
The Large Dollar Payments System Advisory
Group reports to the Board of Governors—
through the Board's Payments System Policy
Committee—and is responsible for suggestions
on all matters associated with the Boards's desire to further reduce risk on large-dollar transfer
systems.
The four new members are the following:
Charles J. Buchta
Executive Vice President
Operating Service Group
First Interstate Bank of California
Los Angeles, California
James T. Byrne
Senior Vice President
Morgan Guaranty Trust Company
New York, New York
Kerby Crowell
Executive Vice President
and Chief Financial Officer
Stillwater National Bank
Stillwater, Oklahoma
Michael Urkowitz
Executive Vice President
Chase Manhattan Bank, N.A.
New York, New York
Other members of the Advisory Group include
the following:
Roland K. Bullard, II (Chairman of the Advisory
Group)
Vice Chairman
CoreStates Financial Corporation
Philadelphia, Pennsylvania
William P. Ballard
Senior Executive Vice President
Citizens & Southern Georgia Corporation
Atlanta, Georgia
Roger K. Lindland
Senior Executive Vice President
and Chief Financial Officer
Great American First Savings Bank
San Diego, California
David O. Nordby
Executive Vice President
Continental Illinois Corporation
Chicago, Illinois
Peter C. Palmieri
Vice Chairman
Irving Trust Company
New York, New York
Seymour R. Rosen
Vice President
Citibank, N.A.
New York, New York
Flavian E. Zeugin
First Vice President
Swiss Bank Corporation
New York, New York
ESTABLISHMENT OF OFFICE
OF INSPECTOR
GENERAL
The Board of Governors announced on July 8,
1987, the establishment of an independent Office
of Inspector General. This action, consistent
with policies and approaches being adopted more
generally in government in recent years, is designed to focus responsibility more appropriately
for certain auditing and operations review functions.
The purpose of the Office, as well as its duties,
responsibilities, authorities, and protections, is
explained in its charter. It is hoped that the
Office will work in such a way as to further
enhance the administrative effectiveness and the
high reputation of the Board for probity, evenhandedness, and discretion in the exercise of its
responsibilities. The Inspector General will report to the Board under the general supervision
of the Chairman.
Announcements
On July 21, 1987, the Board announced the
promotion of Brent L. B o w e n , Assistant Controller, Office of the Controller, to fill the recently established position of Inspector General.
PROPOSED
ACTIONS
The Federal Reserve Board has extended
through August 7, 1987, the period for comment
on its revised proposal to charge assessments
and fees for certain supervisory activities, specifically for inspection and supervision of the parent company and nondepository subsidiaries of
bank holding companies as well as for supervising Edge act corporations and for processing
applications.
AVAILABILITY OF
REVISED LIST OF OTC STOCKS
SUBJECT TO MARGIN
REGULATIONS
The Federal Reserve Board published on July 24,
1987, a revised list of over-the-counter (OTC)
stocks that are subject to its margin regulations,
effective August 11, 1987.
709
This List of Marginable OTC Stocks supersedes the revised list that was effective on May
12, 1987. Changes that have been made in the
list, which now includes 3,237 OTC stocks, are
as follows: 224 stocks have been included for the
first time, 195 under national market system
(NMS) designation; 28 stocks previously on the
list have been removed for substantially failing to
meet the requirements for continued listing; 61
stocks have been removed for reasons such as
listing on a national securities exchange or involvement in an acquisition.
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
N M S . This list includes all securities qualified
for trading in tier 1 of the N M S through August
11 and those in tier 2 through July 21, 1987.
Additional OTC securities may be designated as
N M S securities in the interim between the
Board's quarterly publications and will be immediately marginable. The next publication of the
Board's list is scheduled for October 1987.
Besides 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.
711
Record of Policy Actions of the
Federal Open Market Committee
The information reviewed at this meeting suggested that e c o n o m i c activity has been expanding at a moderate pace, despite some weakness
in the industrial sector. H o w e v e r , the rate of
inflation has risen in recent months, reflecting
especially the impact of higher prices for energy
and non-oil imports.
Labor demands grew at a brisk pace in April.
The household survey indicated a sharp increase
in employment and an unusually large decline in
unemployment. A s a result, the unemployment
rate fell to 6.3 percent, 0.4 percentage point
below its first-quarter average. Payroll employment rose considerably in April with gains concentrated again in trade and services. Manufacturing employment has changed little on balance
so far this year, and the factory workweek
dropped sharply in April, partly because of the
observance of religious holidays during the survey week.
The industrial production index declined 0.4
percent in April following a smaller drop in
March. Most of the decline in output in April was
associated with cutbacks in motor vehicles, although small but widespread reductions were
evident in other areas. Cutbacks in auto production and a pickup in sales slowed the growth in
dealer stocks, but the level of stocks remained
high. Outside of autos, trade inventories did not
appear e x c e s s i v e , while inventory-sales ratios in
manufacturing were near record lows.
million units in April. Single-family starts rose
during the month, but multifamily starts fell
sharply as high vacancy rates and the elimination
of some tax advantages for investment in income
properties continued to depress apartment construction.
Business fixed investment has shown signs of
improvement from the depressed level early in
the year. Shipments of nondefense capital goods
rose and orders inched up in February and
March. Outlays for construction of commercial
and industrial structures have continued trending
down in recent months. N e w commitments,
however, have firmed recently.
Inflation rates have been higher so far this
year. The CPI rose at a 6.2 percent annual rate
between D e c e m b e r and March, compared with a
rate of 2.5 percent in the fourth quarter. Much of
the first-quarter acceleration was caused by the
rebound in energy prices, which n o w appear to
have adjusted to the bulk of the year-end runup
in the price of imported crude. Larger price
increases also were posted for a number of
consumer goods, probably reflecting the influence of higher import prices. At the producer
level, too, large price increases were posted in a
f e w industries that had been subject to strong
import competition, such as chemicals and paper. Commodity prices began moving higher in
the latter part of 1986 and have risen noticeably
since the Committee's meeting on March 31.
H o w e v e r , wage growth has continued at relatively moderate rates, with the index for average
hourly earnings rising at about the same pace as
in 1986.
A s a result of the higher auto sales, real
consumer spending appeared to be strong. Excluding autos and nonconsumer items, retail
sales rose moderately in April. Housing starts
were down somewhat from their first-quarter
average. Total starts were at an annual rate of 1.7
In foreign exchange markets, the dollar was
under heavy downward pressure over much of
the intermeeting period, and intervention purchases were substantial. In the latter part of the
period, the dollar w a s bolstered by slightly firmer
monetary conditions in the United States and by
MEETING HELD ON MAY 19,
Domestic
Policy
1987
Directive
712
Federal Reserve Bulletin • September 1987
easier conditions in Japan, Germany, and the
United Kingdom. On balance, the dollar dropped
1 percent, with declines of about 4 percent
against the yen and V/i percent against sterling,
the two strongest major currencies over this
interval. Economic activity in most major foreign
industrial nations continued to be relatively sluggish in the first quarter, except in the United
Kingdom and Italy. In March, the merchandise
trade deficit was close to the average for January
and February and about the same as the fourthquarter rate.
At its meeting in March, the Committee adopted a directive that called initially for maintaining
the existing degree of pressure on reserve positions. The members decided that somewhat
greater reserve restraint might be acceptable
depending on developments in foreign exchange
markets, taking into account the behavior of the
monetary aggregates, the strength of the business expansion, progress against inflation, and
conditions in domestic credit markets. M2 and
M3 were expected to grow at annual rates of
about 6 percent or less from March through June,
while growth in Ml was expected to slow substantially from the pace in 1986. The intermeeting range for federal funds was left unchanged at
4 to 8 percent.
In light of downward pressures on the dollar,
the provision of reserves was cautious at times
during the intermeeting period, and open market
operations were adjusted in a slightly less accommodative direction in late April. At the same
time, uncertainty associated with transactions
related to a huge volume of tax payments in midApril complicated the management of reserves
during the intermeeting period. Demands for
reserves strengthened substantially, reflecting
increases in required reserves associated with a
steep rise in transactions balances near midmonth. In the second half of the month, as these
payments cleared, Treasury balances at Federal
Reserve Banks rose sharply and absorbed reserves, at times more rapidly than had been
estimated. This decline in reserves was largely
offset by a sizable volume of outright purchases
of U.S. government securities, which necessitated two temporary increases in the intermeeting
limit on changes in the System's portfolio, as
well as by large temporary injections of reserves
through repurchase agreements. Nevertheless,
partly reflecting technical factors, borrowing at
the discount window rose substantially, averaging around $800 million over the intermeeting
period.
The federal funds rate firmed somewhat over
the period. Most other interest rates also rose,
with the largest increases occurring in long-term
markets. The downward pressures on the dollar
created uncertainty among market participants
about private demands for dollar assets, the
prospects for U.S. inflation, and the response of
monetary policy. In addition, rising commodity
and producer prices both reflected and added to
concerns about the inflation outlook. Most bond
yields increased slightly over a percentage point
since the March meeting. Commitment rates for
fixed-rate mortgages rose somewhat more, reflecting increased lender caution in a volatile rate
environment. Short-term rates were up lA to 1
percentage point, including three lA percentage
point increases in the prime rate.
Growth of all of the monetary aggregates
picked up substantially in April. Ml was boosted
by the tax-related surge in transactions balances.
Partly reflecting these tax effects, growth in M2
also picked up, though remaining fairly moderate. Growth in M3 was boosted by the need to
fund stronger expansion in bank credit. The
growth of the broader aggregates was consistent
with the Committee's expectations for the March
to June period and left these aggregates in April
just below the lower ends of their ranges established by the Committee for the year. Liquid
deposits ran off at the end of April and in early
May as the tax payments cleared, reversing
much of the previous bulge in M l .
The staff projections continued to suggest that
real GNP would grow at a moderate rate through
the end of 1987. A primary contributor to the
projected growth remained the foreign sector.
The decline in the value of the dollar was expected to make American products more competitive, boosting exports despite the effects of relatively weak foreign economic growth and
damping expansion in the volume of imports.
The growth in domestic purchases was likely to
be restrained by constraints on government
spending, high vacancy rates in the office and
rental housing markets, and increased mortgage
Record
rates. In addition, rising import prices were
expected to moderate the growth of real personal
incomes and thus consumer expenditures, especially in the light of an already low personal
saving rate. However, business equipment
spending was projected to resume a moderate
uptrend partly in response to a growing export
market. Inflation was expected to moderate after
accelerating in the first quarter but to remain
appreciably above the average pace in 1986.
With output growing at a rate approximating that
of potential GNP, the unemployment rate was
expected to remain close to the lower level
achieved recently.
In the Committee's discussion of current and
prospective business conditions, the members
gave attention to indications that inflationary
expectations had worsened in recent weeks.
Some commented that the somewhat faster rise
of various price measures thus far in 1987 was
not unexpected, given the depreciation of the
dollar, the energy situation, and supply conditions for some agricultural products. To a considerable extent, those developments appeared to
involve special factors that might normally be
expected to result in one-time adjustments to the
general level of prices. However, it also was
noted that the rising prices, including the upturn
in commodity prices in recent weeks, had become associated with an appreciable deterioration in inflationary attitudes, judging from conditions in financial markets and contacts with
many business executives around the country.
There were regional differences in inflationary
expectations, to be sure, and some members
observed that reactions in financial markets had
probably been overdone. Nonetheless, most of
the members believed that there was an increased risk of more inflation than they had
expected earlier, particularly if inflationary attitudes became imbedded in future wage settlements. On the other hand, some members pointed out that underlying pressures on resources
could remain damped and inflation relatively
subdued, given the outlook for less than robust
economic growth in the United States and
abroad and a worldwide oversupply of some
commodities.
The prospective behavior of the dollar in foreign exchange markets was a key uncertainty
of Policy Actions
of the FOMC
713
bearing on the outlook for inflation and on that
for overall business activity. Earlier declines in
the exchange value of the dollar had resulted in
higher import prices—an adjustment process that
undoubtedly was still under way—and further
dollar depreciation, if it occurred, would add to
future inflation pressures. In this regard, members noted that some domestic producers were
raising their prices as those of competing imports
went up, thereby adding to the inflation impact of
a lower dollar. In general, however, while the
depreciation of the dollar had undoubtedly contributed to inflationary expectations, direct evidence of an inflation impact on domestic pricing
was still fairly limited.
With respect to the course of domestic business activity, a number of members commented
that developments in recent months were in line
with earlier projections, and while there were
both domestic and foreign risks to sustained
expansion, further growth at a moderate pace
remained a reasonable expectation. As at previous meetings, the members generally expected
domestic demands to be relatively sluggish over
the quarters ahead, and they felt that significant
progress in reducing the nation's foreign trade
deficit was needed to support the expansion.
Some members expressed concern that the improvement in the trade balance would be limited
over the quarters ahead. While further progress
could be anticipated as exporters and importers
continued to adjust to a lower value of the dollar,
such progress might be restrained in particular
by sluggish economic growth in foreign industrial
nations. Nonetheless, the members generally expected continuing improvement in net exports
and many felt that it would provide considerable
impetus for domestic growth.
On the domestic side no sector of the economy
was believed likely to contribute much strength
to the expansion, and weaknesses persisted in a
number of key sectors such as energy, agriculture, and nonresidential construction. Moreover,
the recent rise in mortgage rates was likely to
have some impact on housing demand. However, in their review of business developments in
different parts of the country, several members
reported on indications of some improvement
recently in local conditions and others noted that
difficulties in the agriculture and energy sectors
714
Federal Reserve Bulletin • September 1987
were, at the least, no longer intensifying. Business sentiment also appeared to have improved
in many parts of the country. More generally,
while the members recognized the risks of a
shortfall from current projections, especially given the persisting weaknesses and financial problems in some sectors of the economy, current
developments on the whole appeared to be consistent with continuing moderate growth in overall business activity.
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 1986 to the fourth quarter of 1987 of
51/2 to 8!/2 percent for both M2 and M3. The
associated range for growth in total domestic
nonfinancial debt was set at 8 to 11 percent. The
Committee anticipated that growth in Ml would
slow in 1987 from its very rapid pace in 1986, but
the members decided not to establish a numerical
target for the year; instead, the appropriateness
of Ml changes would be evaluated during the
year in the light of the behavior of Ml velocity,
developments in the economy and financial markets, and the nature of emerging price pressures.
In the Committee's discussion of policy implementation for the weeks immediately ahead,
members noted that unsettled reserve conditions
associated with tax payments and related flows
of funds had produced a greater degree of pressure on reserve positions from time to time in
recent weeks than had deliberately been sought,
even after the slight firming move of late April.
Market expectations about Federal Reserve policy intentions also seemed to contribute to higher
short-term interest rates at times. All but one of
the members indicated that they wished at least
to maintain the generally firmer reserve conditions that had prevailed most recently, even
though such conditions had not been fully anticipated in Desk operations, and a number felt that
some slight further firming might be appropriate.
The members generally agreed that some firming
of reserve conditions had been desirable to
counter the apparent intensification of inflationary expectations in recent weeks and to help
stabilize the dollar in the foreign exchange markets. In another view any monetary restraint
beyond what had been sought recently would not
be desirable because additional tightening would
incur an undue risk of stalling the economic
expansion at a time when, in this view, underlying inflation pressures were likely to remain in
check. Most members saw a lesser and relatively
limited risk to the expansion under current economic conditions and one that needed to be
accepted given the pressures on the dollar and
the potential for inflation.
In the view of several Committee members,
the desired reserve restraint might be more appropriately achieved by means of an immediate
increase in the discount rate, providing a more
overt means of reassuring financial markets with
regard to the System's continuing commitment
to an anti-inflationary policy; others felt a possible discount rate increase should, in effect, be
held in reserve for use if a more visible signal
became desirable. In any event, any decision
with respect to the discount rate lay with the
Board of Governors, and all but one of the
Committee members agreed that, in the absence
of a near-term rise in the discount rate, open
market operations would be directed toward
some increase in the degree of reserve pressure
beyond that sought in recent weeks (but not
necessarily greater than that prevailing recently).
If the discount rate were increased shortly after
the meeting, such firming through open market
operations would not be necessary, at least in the
early part of the intermeeting period.
With regard to factors that might trigger some
adjustment in open market operations during the
intermeeting period, the members generally
agreed that both inflationary developments and
the dollar should receive special emphasis. In
particular, should inflation or inflationary expectations seem to be intensifying or the dollar come
under renewed downward pressure, the Committee would be ready to see some prompt further
firming of reserve conditions. At the same time,
the members did not rule out the possibility of
some easing during the period ahead, but they
viewed the potential need for a correction in that
direction as less likely. In keeping with the
Committee's usual approach toward policy implementation, any decision to alter reserve objectives during the intermeeting period should
take account of the behavior of the monetary
aggregates and the overall performance of the
economy.
Record
In their consideration of the near-term outlook
for growth of the monetary aggregates, the members took note of an analysis, which suggested
that the broader aggregates would expand at
moderate rates over the balance of the second
quarter. The outsized tax payments of mid-April
had continued to affect the broad aggregates as
well as Ml through early May. Beyond that, M2
was likely to grow a little more slowly than
income, given the slight restraining effects of the
recent rise in interest rates that would be felt in
coming months. M3 expansion was less likely to
be affected by interest rate movements, at least
in the near term, and was expected to be sustained by issuance of managed liabilities to support credit growth at depository institutions. On
a cumulative basis through June, growth in M2
would remain somewhat below the lower bound
of the growth "cone" representing the Committee's 5Vi to 8V2 percent range for the year, though
within the parallel lines associated with the end
points of that range; growth in M3 would be very
near the lower bound of its growth cone and well
within its parallel band. Under prevailing circumstances, Committee members indicated that they
were willing to accept relatively limited growth
in the broader aggregates, at least for now, but a
few observed that such growth signaled the need
for caution. Growth in Ml also was believed
likely to moderate greatly on average in May and
June, after its surge in April. However, because
of the persisting uncertainties about the behavior
of M l , most of the members indicated a continuing preference for not specifying a numerical
growth expectation for this aggregate in the
Committee's policy directive.
At the conclusion of the Committee's discussion, all but one of the members indicated that
they favored or could accept a directive that
called for some increase in the degree of reserve
pressure beyond that sought in recent weeks,
taking account of the possibility that such firming
might be accomplished through an increase in the
discount rate. Subsequent to some initial firming
in reserve conditions through a reduced availability of reserves or through an increase in the
discount rate, the members indicated that somewhat greater reserve restraint would be acceptable, and somewhat lesser reserve restraint
might be acceptable, over the intermeeting peri-
of Policy Actions
of the FOMC
715
od depending on developments relating to inflation and the performance of the dollar in foreign
exchange markets, while also giving consideration to the behavior of the monetary aggregates
and the strength of the business expansion. This
approach to policy implementation was expected
to be consistent with growth in M2 and M3 at
annual rates of around 6 percent or less for the
three-month period from March to June. Over
the same period growth in Ml was expected to
remain well below its pace in 1986; the members
would continue to evaluate this aggregate in the
light of the performance of the broader monetary
aggregates and other factors. 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 4 to 8 percent.
At the conclusion of the meeting, the following
domestic policy directive was issued to the Federal Reserve Bank of N e w York:
The information reviewed at this meeting suggests
on balance that economic activity is expanding at a
moderate pace in the current quarter. Total nonfarm
payroll employment rose considerably further in April,
with most of the gains continuing to be in the serviceproducing sectors. The civilian unemployment rate fell
to 6.3 percent from 6.6 percent in March. In April,
industrial production declined after increasing at a
moderate rate in the first quarter. Total retail sales
changed little but were up somewhat from their average level in the first quarter. Housing starts were down
somewhat in April from their first-quarter average.
Recent indicators of business capital spending point to
some recovery over the near term from a depressed
level in the first quarter. Consumer and producer
prices have risen more rapidly this year, primarily
reflecting sizable increases in prices of energy and
non-oil imports. Labor cost increases have remained
relatively moderate in recent months.
Growth of M2 and M3 strengthened in April from a
sluggish pace in February and March, but for 1987 to
date expansion of these two aggregates has been
slightly below the lower ends of their respective ranges
established by the Committee for the year. Ml surged
in April prompted by exceptionally large tax payments. Expansion in total domestic nonfinancial debt
has moderated somewhat thus far this year. Most
interest rates have risen considerably since the March
31 meeting of the Committee, with the largest increases occurring in longer-term markets.
In foreign exchange markets, the dollar was under
heavy downward pressure over most of the intermeet-
716
Federal Reserve Bulletin • September 1987
ing period and intervention purchases of dollars were
substantial. Recently the dollar has tended to stabilize,
but on balance its trade-weighted value against the
other G-10 currencies declined over the period. In
March the merchandise trade deficit was close to the
average for January and February.
The Federal Open Market Committee seeks monetary and financial conditions that will foster reasonable
price stability over time, promote growth in output on
a sustainable basis, and contribute to an improved
pattern of international transactions. In furtherance of
these objectives the Committee at its February meeting established growth ranges of 5>/2 to 8V2 percent for
both M2 and M3, measured from the fourth quarter of
1986 to the fourth quarter of 1987. The associated
range for growth in total domestic nonfinancial debt
was set at 8 to 11 percent for 1987.
With respect to Ml, the Committee recognized that,
based on experience, the behavior of that aggregate
must be judged in the light of other evidence relating to
economic activity and prices; fluctuations in Ml have
become much more sensitive in recent years to
changes in interest rates, among other factors. During
1987, the Committee anticipates that growth in Ml
should slow. However, in the light of its sensitivity to
a variety of influences, the Committee decided at the
February meeting not to establish a precise target for
its growth over the year as a whole. Instead, the
appropriateness of changes in Ml during the course of
the year will be evaluated in the light of the behavior of
its velocity, developments in the economy and financial markets, and the nature of emerging price pressures.
In that connection, the Committee believes that,
particularly in the light of the extraordinary expansion
of this aggregate in recent years, much slower monetary growth would be appropriate in the context of
continuing economic expansion accompanied by signs
of intensifying price pressures, perhaps related to
significant weakness of the dollar in exchange markets, and relatively strong growth in the broad monetary aggregates. Conversely, continuing sizable increases in Ml could be accommodated in
circumstances characterized by sluggish business activity, maintenance of progress toward underlying
price stability, and progress toward international equilibrium. As this implies, the Committee in reaching
operational decisions during the year might target
appropriate growth in Ml from time to time in the light
of circumstances then prevailing, including the rate of
growth of the broader aggregates.
In the implementation of policy for the immediate
future, the Committee seeks to increase somewhat the
degree of reserve pressure sought in recent weeks,
taking into account the possibility of a change in the
discount rate. Somewhat greater reserve restraint
would, or somewhat lesser reserve restraint might, be
acceptable depending on indications of inflationary
pressures and on developments in foreign exchange
markets, as well as the behavior of the aggregates and
the strength of the business expansion. This approach
is expected to be consistent with growth in M2 and M3
over the period from March through June at annual
rates of around 6 percent or less. Growth in Ml is
expected to remain well below its pace during 1986.
The Chairman may call for Committee consultation if
it appears to the Manager for Domestic Operations
that reserve conditions during the period before the
next meeting are likely to be associated with a federal
funds rate persistently outside a range of 4 to 8
percent.
Votes for this action: Messrs. Volcker, Corrigan,
Angell, Boehne, Boykin, Heller, Johnson, Keehn,
and Stern. Vote against this action: Ms. Seger.
Ms. Seger dissented because she did not want
to lean on the side of any tightening of reserve
conditions beyond the firming that had occurred
since the March meeting. She was concerned
that the degree of reserve pressure prevailing
recently, which was somewhat greater than intended, represented a risk to an already weak
economic expansion. She noted that the negative
effects of recent increases in interest rates had
not yet been felt in the economy. She also
referred to recent indications of moderating
growth in the monetary aggregates, and she did
not expect inflationary pressures to persist in the
context of excess production capacity and commodity surpluses worldwide.
717
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 the Bank
Holding Company Act
Atico Financial Corporation
Miami, Florida
Order Approving Formation of a Bank Holding
Company
Atico Financial Corporation, Miami, Florida, has applied for the Board's approval pursuant to 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 99 percent of the voting shares
of Atico Savings Bank ("Atico") and 94 percent of the
voting shares of Intercontinental Bank ("Intercontinental"), both of Miami, Florida.
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (52 Federal Register 10,931 (1987)).
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 unitary savings and loan holding company, is the parent company of Atico, a state-chartered savings bank, the accounts of which are insured
by the Federal Savings and Loan Insurance Corporation ("FSLIC"). Intercontinental is a state-chartered
commercial bank, the accounts of which are insured
by the Federal Deposit Insurance Corporation
("FDIC"). Applicant proposes to become a multibank holding company by acquiring Intercontinental
and by converting Atico to a state-chartered commercial bank, the accounts of which would be insured by
the FDIC. Because Atico, at the time of its conversion
to an FDIC insured institution, will accept demand
deposits and makes commercial loans, Atico would be
a "bank" for purposes of the Act. Accordingly, Applicant properly has applied to become a bank holding
company under section 3 of the Act, which governs
the acquisition of banks by bank holding companies.
Applicant, with deposits of $386.3 million1 after the
conversion of Atico, would be the seventeenth largest
commercial banking organization in Florida, controlling 0.5 percent of the total deposits of commercial
banking organizations in the state. Intercontinental is
the fifteenth largest commercial banking organization
in the state, controlling deposits of $476.2 million,
representing 0.6 percent of the total deposits in commercial banking organizations in the state. Upon consummation of this proposal, Applicant will become the
ninth largest commercial banking organization in Florida and will control deposits of $862.5 million, representing 1.1 percent of the total deposits in commercial
banking organizations in the state. Consummation of
this proposal would not have any significant adverse
effect upon the concentration of banking resources in
the state.
Applicant competes directly with Intercontinental in
the Miami-Fort Lauderdale banking market. 2 Upon
conversion of Atico, Applicant would be the fourteenth largest of 84 commercial banking organizations,
controlling 1.8 percent 3 of the total deposits in commercial banks in the market. Intercontinental is the
tenth largest commercial banking organization in the
market, controlling 2.2 percent of the total deposits in
commercial banking organizations in the market.
Upon consummation of this proposal, Applicant
would become the sixth largest commercial banking
organization and would control 4.0 percent of the total
deposits in commercial banking organizations in the
market. The Herfindahl-Hirschman Index ( " H H I " )
would increase by 8 points to 9214 and the market
would remain unconcentrated. Accordingly, consummation of this proposal is unlikely to lessen substantially competition in the Miami-Fort Lauderdale banking market.
1. State banking data are as of June 30, 1986. State banking data do
not include the deposits of a recently acquired branch in Orlando,
Florida.
2. The Miami-Fort Lauderdale banking market is approximated by
Dade and Broward Counties, Florida.
3. Market banking data are as of June 30, 1985.
4. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)), any market in which the
post-merger HHI is less than 1000 is considered unconcentrated, and
the Department generally will not challenge a bank merger or acquisition resulting in a post-merger HHI of less than 1000.
718
Federal Reserve Bulletin • September 1987
Atico currently engages through wholly owned subsidiaries in certain real estate investment activities that
are authorized by state law. Applicant has agreed that
Atico will divest the real estate investment activities of
its subsidiaries within two years of consummation of
this proposal in accordance with section 4(a)(2) of the
Act.
In evaluating these applications, the Board has
considered the financial resources of Applicant and
the effect on those resources of the proposed acquisitions. The Board has stated and continues to believe
that capital adequacy is an especially important factor
in the analysis of bank holding company proposals. In
this regard, Applicant has committed that upon formation of the bank holding company, it will maintain the
tangible primary capital ratios of each of the two
subsidiary depository institutions and of the consolidated organization at a level well in excess of the
Board's minimum capital guidelines. Additionally, Applicant intends to further strengthen the capital position of the organization through the sale of capital
stock in the near future.
Based upon these and other facts of record, the
Board concludes that the financial and managerial
resources of Applicant's resulting organization are
consistent with approval. In reaching this decision, the
Board has considered carefully the recommendations
for approval of the transaction by the State of Florida
and, in particular, that this proposal will address
Intercontinental's financial condition. Considerations
relating to the convenience and needs of the communities to be served are consistent with approval of this
application.
The Board expects that Applicant will comply with
all state and federal requirements necessary for consummation of the acquisition, and the Board's approval of this application under the Act is not intended to
preempt any such requirements. 5 The Board has previously stated that its approval of transactions under
section 3 of the Act does not relieve an applicant or the
bank involved of the responsibility to obtain approval
under other federal or state laws and regulations and
does not shield an applicant from the consequences of
violations of other laws.6
Based on the foregoing, the Board has determined
that consummation of the proposal would be in the
public interest and that the application should be and
hereby is approved. In light of the comments of the
Comptroller of Florida concerning the condition of
5. The Board may not approve an application that would result in a
violation of federal or state law. Whitney National Bank v. Bank of
New Orleans & Trust Co., 379 U.S. 411 (1965).
6. Hartford National Corporation, (Order dated June 1, 1987);
Comerica
Inc.,
7 3 F E D E R A L RESERVE B U L L E T I N 5 9 9 ( 1 9 8 7 ) .
Intercontinental and the need for expeditious Board
action, the acquisition of Intercontinental may be
consummated at any time on or after the fifth calendar
day following the effective date of this Order. Applicant's acquisition of Atico in connection with its
conversion to an FDIC insured commercial bank shall
not be consummated before the thirtieth calendar day
following the effective date of this Order. 7 Neither
acquisition shall 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 Atlanta acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 20, 1987.
V o t i n g for this action: C h a i r m a n V o l c k e r and G o v e r n o r s
J o h n s o n , A n g e l l , and Heller. A b s e n t and not voting: G o v e r nors S e g e r and K e l l e y .
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
First Empire State Corporation
Buffalo, N e w York
Order Approving Acquisition of a Bank
First Empire State Corporation, Buffalo, New York, a
bank holding company within the meaning of the Bank
Holding Company Act ("Act") (12 U.S.C. § 1842
(a)(1)), has applied for the Board's approval pursuant
to section 3(a)(3) of the Act (12 U.S.C. § 1842
(a)(3)) to acquire up to 100 percent of the voting shares
of Bank of Richmondville, Richmondville, New York
("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
duly published (52 Federal Register 10,265 (1987)).
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 is the sixteenth largest commercial banking organization in New York, holding deposits of $2.3
billion, representing less than one percent of the total
deposits in commercial banking organizations in the
7. In the event that Applicant acquires Intercontinental without
consummating the proposed conversion of Atico from a thrift institution to an FDIC-insured bank, Applicant would have two years under
section 4(a)(2) of the Act to divest the shares of the subsidiary thrift
institution.
Legal Developments
state.1 Bank is among the smallest commercial banking organizations in the state, controlling deposits of
$34.6 million, representing less than one percent of the
total deposits in commercial banking organizations in
the state. Upon consummation of this proposal, Applicant would remain the sixteenth largest commercial
banking organization in New York and would control
less than one percent of the total deposits in commercial banking organizations in the state. Consummation
of this proposal would not result in a significant
increase in the concentration of banking resources in
New York.
Bank is the nineteenth largest of 21 commercial
banking organizations in the Albany banking market, 2
controlling less than one percent of the total deposits
in the market. Applicant does not operate in the
Albany banking market. Accordingly, consummation
of the proposal would not have any significant adverse
effect on existing competition in the market.
The Board also has considered the effect of the
proposed acquisition on probable future competition
in the Albany banking market. In view of the numerous potential entrants into the market, the Board
concludes that consummation of the proposed transaction would not have any significant adverse effect on
probable future competition in any relevant market.
In its evaluation of Applicant's managerial resources, the Board has considered certain violations
by Applicant's lead bank, Manufacturers and Traders
Trust Company, Buffalo, New York ("M&T"), of the
Currency and Foreign Transactions Reporting Act
("CFTRA") and the regulations thereunder. 3
In this regard, the Board notes that Applicant voluntarily brought the subject violations to the attention of
the appropriate supervisory authorities after they were
discovered through Applicant's internal audit program. Moreover, Applicant has voluntarily reported
these previously unreported currency transactions,
and has implemented new compliance procedures to
prevent similar violations from occurring in the future.
In addition, an examination conducted by the appropriate supervisory authority has determined that
M&T's new compliance procedures are sufficient to
ensure future compliance with the CFTRA.
The Board also has considered certain violations by
Bank of the CFTRA. Bank has corrected these violations and has implemented new compliance proce-
1. Statewide banking data are as of December 31, 1986.
2. The Albany banking market is approximated by the following
counties: Albany, Columbia, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, Warren, and
Washington, all in N e w York. Market data are as of June 30, 1985.
3. 31 U.S.C. § 5311 et seq.; 31 C.F.R. § 103.
719
dures to prevent a recurrence of similar violations.
The record reflects that Bank's primary regulator has
advised the Board that Bank's new procedures adequately address concerns raised by the prior violations.
For the foregoing reasons and based upon a review
of all of the facts of record, the Board concludes that
the managerial resources of Applicant and Bank are
consistent with approval. The Board also finds that the
financial resources of Applicant and Bank are consistent with approval.
Existing management of Bank has submitted comments opposing this proposal. In addition, the Board
has received more than 60 comment letters and petitions in opposition to this proposal from certain community members, as well as certain customers and
shareholders of Bank.
These commenters are concerned that Bank will
cease to be an independent bank characterized by a
friendly, small town orientation if this application is
approved, because Applicant is a large non-local bank
holding company. In addition, the commenters argue
that this proposed transaction will not serve the needs
of the community. They argue that small depositors,
currently able to maintain accounts at Bank due to
Bank's low minimum balance requirements, will not
be able to maintain those accounts if Applicant acquires Bank and implements its policies. Some commenters also suggest that customers will terminate
their relationships with Bank if ownership and management change.
The Board has carefully considered the comments in
opposition to this proposal. The commenters primarily
extol the virtues of Bank and do not raise issues that
reflect adversely on the management of Applicant or
its record in meeting the convenience and needs of the
communities it serves.
There is no evidence in the record to support the
commenters' suggestion that Bank may not adequately
serve the needs of small depositors if the application is
approved. Moreover, Applicant has indicated that,
upon achieving control of Bank, it will continue
Bank's record of service to the community and, in
particular, to small depositors. Indeed, Applicant proposes new services for Bank, including home equity
loans, variable-rate installment loans, ATM machines,
discount brokerage services, variable-rate credit cards
and international banking, which would serve to enhance the Bank's provision of services to its community. Accordingly, after careful review of all the comments submitted and the facts of record in this case,
the Board has determined that the comments do not
warrant denial of this application. The Board therefore
concludes that convenience and needs considerations
are consistent with approval of this application.
720
Federal Reserve Bulletin • September 1987
Based on the foregoing and other facts of record, the
Board has determined that the application should be
and hereby is approved. This transaction shall not be
consummated before the thirtieth calendar day following the effective date of this Order, or later than three
months after the effective date of this Order, unless
such period is extended for good cause by the Board or
by the Federal Reserve Bank of New York pursuant to
delegated authority.
By order of the Board of Governors, effective
July 6, 1987.
Voting for this action: Chairman Volcker and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Hartford National Corporation
Hartford, Connecticut
Order Approving Acquisition of a Bank
Hartford National Corporation, Hartford, Connecticut, 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 Chester Bank, Chester, Connecticut ("Bank").
Notice of this application, affording an opportunity
for interested persons to submit comments, has been
given in accordance with section 3 of the Act (52
Federal Register 10,265 (1987)). The time for filing
comments has expired, and the Board has considered
this application and all comments received in light of
the factors set forth in section 3(c) of the Act.
Applicant controls six banking subsidiaries located
in Massachusetts and Connecticut. Applicant is the
second largest commercial banking organization in
Connecticut, with deposits of $7.0 billion,1 representing approximately 26 percent of the total deposits in
commercial banks in the state. Bank is the 23rd largest
commercial banking institution in Connecticut, with
deposits of $89.5 million, representing less than one
percent of the total deposits in commercial banks in
the state. Upon consummation of this proposal, Applicant would remain the second largest commercial
banking organization in Connecticut, controlling 26.4
1. State deposit data are as of December 31, 1986, and do not
reflect Applicant's pending acquisition of the successor to The Savings and Loan Association of Southington, Southington, Connecticut,
approved by the Board on June 1, 1987.
percent of total deposits in the state. Consummation of
this proposal would not result in a significant increase
in the concentration of banking resources in Connecticut.
Applicant and Bank both compete in the Hartford
and Old Saybrook banking markets. In the Hartford
banking market, 2 Applicant is the second largest of 17
commercial banking institutions, controlling deposits
of $2.5 billion,3 which represents 36.4 percent of total
deposits in commercial banks in the market. Bank is
among the smaller commercial banking institutions in
the Hartford market, controlling deposits of $6.2 million, which represents less than one percent of the
market's total commercial bank deposits. Upon consummation of this proposal, Applicant would remain
the second largest commercial banking institution in
Hartford, and would control 37 percent of the market's
total deposits in commercial banks. The HerfindahlHirschman Index ("HHI") 4 would increase by only 6
points to 3079, and the Hartford market would remain
highly concentrated. In view of the small amount of
competition that would be eliminated, consummation
of this proposal would not have a significant adverse
effect on existing competition in the Hartford banking
market.5
Applicant and Bank also compete in the Old Saybrook banking market. 6 Applicant is the second largest
of six commercial banking institutions in the Old
Saybrook market, controlling deposits of $49.5 million, which represents 25.7 percent of total deposits in
commercial banks in the market. Bank is the largest
commercial banking institution in the Old Saybrook
banking market, controlling deposits of $62.2 million,
which represents 32.3 percent of the market's total
commercial bank deposits. Upon consummation of
this proposal, Applicant would become the largest
commercial banking institution in the Old Saybrook
2. The Hartford banking market is approximated by the Hartford
Rand McNally Area ("RMA") minus the Tolland County township of
Mansfield and the Windham County township of Windham, plus the
Windham County township of Ashford, the Hartford County township
of Hartland and the Tolland County township of Union, and the
remaining portions of Plymouth and East Haddam not already included in the RMA.
3. Market deposit data are as of June 30, 1985.
4. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)), any market in which the
post-merger HHI is over 1800 is considered highly concentrated, and
the Department is likely to challenge a merger that increases the HHI
by more than 50 points unless other factors indicate that the merger
will not substantially lessen competition. The Department of Justice
has informed the Board that a bank merger or acquisition is likely to
be challenged (in the absence of other factors indicating an anticompetitive effect) if the post-merger HHI is at least 1800 and the merger
increases the HHI by at least 200 points.
5. The Board also has considered the competitive effects of thrifts
in the Hartford banking market.
6. The Old Saybrook banking market is approximated by the
Middlesex County townships of Old Saybrook, Chester, Essex,
Westbrook and Deep River.
Legal Developments
market, and would control $111.7 million in deposits,
representing 58.0 percent of the total deposits in
commercial banks in the market. The HHI in the Old
Saybrook market would increase 1661 points to 4049
and the four-firm concentration ratio would increase
from 89.1 percent to 96.0 percent.
The potential adverse competitive effects of this
proposal are substantially mitigated, however, by consideration of certain unique facts and circumstances
present in this case: the large number of remaining
competitors relative to the size of the market, the very
substantial commercial banking services provided by
savings banks and savings and loan associations, and
the unusual location and configuration of the Old
Saybrook market. These three factors, taken together,
substantially mitigate the anticompetitive effects of the
combination of Applicant and Bank in the Old Saybrook market.
First, ten other depository institutions (four commercial banks and six thrift institutions) would remain
in the Old Saybrook market, a large number of independent competitors relative to the size of the market.
Together, these institutions account for $314.7 million
(73.8 percent) of the $426.4 million of total deposits in
the market. These institutions, along with nondepository financial service providers, would continue to
compete with Applicant after consummation of its
proposal.
Second, thrift institutions7 currently exert a considerable competitive influence in the Old Saybrook
market as providers of transaction accounts and consumer loans. All six thrifts also are exercising the
liberal commercial lending powers authorized under
state law to thrift institutions. 8 These thrifts control
deposits of $233.9 million, which represent approximately 55 percent of the total deposits in all banks and
thrifts in the market. The first and third ranked depository institutions in the Old Saybrook market are thrift
721
institutions, and together account for 33.2 percent of
total deposits in banks and thrifts in the market.
Moreover, all six thrifts in the Old Saybrook market
conduct, in effect, a commercial banking business as
authorized under Connecticut law.9 Four of the six
thrifts in the market (including the market's first and
third largest depository institutions) are chartered as
savings banks, which traditionally in Connecticut have
offered significant competition to local commercial
banks in the provision of a full range of financial
services. In particular, thrifts in the Old Saybrook
market (savings banks and S&L's alike) provide a full
array of commercial banking services in addition to
offering traditional thrift products — characteristics
which are reflected in the asset composition of their
portfolios. For example, the ratio of commercial and
industrial loans (other than those secured by real
estate) to total assets for thrifts in the market is
approximately 9.0 percent, well above the 1.6 percent
national average for thrifts on a nationwide basis. The
ratio of commercial loans secured by real estate to
total assets for thrifts in the Old Saybrook market is
11.2 percent, the same as that for commercial banks in
the market. In addition, the ratio of consumer loans to
total assets for thrifts in the market, at 12.9 percent, is
nearly equivalent to the 14 percent ratio for commercial banks in the market. Moreover, all thrift institutions in the Old Saybrook market offer commercial
demand deposit accounts, and 5 of the six institutions
offer personal demand deposit accounts.
Third, the facts of record show that the potential
anticompetitive effects of this acquisition are lessened
by certain unique characteristics of the Old Saybrook
banking market. The Board previously has indicated
that the relevant banking market should reflect commercial and banking realities and should consist of the
localized area where customers can practically turn for
alternatives. 10 The Board therefore has considered the
geographic setting of the Old Saybrook banking market, labor force commuting patterns, and the ease of
access to, as well as ready availability of, financial
7. The Board previously has indicated that thrift institutions have
become, or have the potential to become, major competitors of
commercial banks. National City Corporation, 70 FEDERAL RESERVE
BULLETIN 743 (1984); The Chase Manhattan Corporation, 70 FEDERAL RESERVE B U L L E T I N 5 2 9 ( 1 9 8 4 ) ; NCNB
Bancorporation,
AL RESERVE BULLETIN 802 (1983); First Tennessee
6 9 FEDER-
Corporation,
69
FEDERAL RESERVE B U L L E T I N 2 9 8 ( 1 9 8 3 ) .
8. If 50 percent of the deposits controlled by thrift institutions in
the Old Saybrook market were included in the calculation of market
concentration, the four-firm concentration ratio would be 63.9 percent, and the HHI would increase 644 points to 1901. Applicant would
rank first among banks and thrifts in the market, controlling 36.1
percent of the market's deposits.
If 100 percent of the deposits controlled by thrift institutions in the
Old Saybrook market were included in the calculation of market
concentration, the four-firm concentration ratio would be 59.4 percent, and the HHI would increase 338 points to 1527. Applicant would
rank first among banks and thrifts in the market, controlling 26.2
percent of the market's deposits.
9. In 1983, Connecticut statutes were amended to remove limitations on personal and business demand deposit activity and increase
permissible commercial loan activity. Currently, 30 percent of the
assets of Connecticut thrifts can be invested in commercial loans. On
October 1, 1987, the permissible level increases to 40 percent. On
October 1, 1988, all limitations will be removed and thrifts will be
authorized to transact, in effect, a general banking business.
10. Pikeville
National
Corporation,
TIN 240 (1985); Dacotah
7 1 F E D E R A L RESERVE B U L L E -
Bank Holding
RESERVE B U L L E T I N 3 4 7 ( 1 9 8 4 ) ; Wyoming
Company,
70 FEDERAL
Bancorporation,
68 FEDER-
AL RESERVE BULLETIN 313 (1982), a£Td, 729 F.2d 687 (10th Cir. 1984);
Independent Bank Corporation, 67 FEDERAL RESERVE BULLETIN 436
(1981).
722
Federal Reserve Bulletin • September 1987
services provided by out-of-market institutions, in
terms of assessing the competitive effects of Applicant's proposal.
The Old Saybrook banking market is characterized
by a highly unusual location and configuration unlike
any market previously considered by the Board. The
market is one of 12 designated markets in Connecticut
and encompasses a seven by 15 mile strip in the southcentral portion of the state. Old Saybrook also is
among the smallest of 97 commercial banking markets
designated in the entire New England area. Of the five
towns in the market, Old Saybrook is the only business center, and it is located at the market's southernmost tip. The Old Saybrook banking market is surrounded by three RMAs,11 but none of the five towns
in the market is included in any of these areas. The Old
Saybrook banking market lies in close proximity to the
central business districts of New London (15 miles),
New Haven (27 miles), and Hartford (40 miles). The
Old Saybrook banking market is influenced to an
unusual degree by each of these surrounding communities, but the facts of record suggest that it is not
strongly tied to any one central business area so as to
render it an integal part of one of these markets.
In addition to the market's geographic configuration, commuting patterns traditionally have provided
important indications of economic and commercial
integration in defining market areas. 12 In the Old
Saybrook banking market, a large portion of the daily
work force (29 percent) commutes to surrounding
communities. The distribution of total commuters is
diffuse, however (11.3 percent to New Haven, 8.6
percent to New London and 9.3 percent to Hartford),
and thus fails to definitively tie the Old Saybrook
market to any one business center.
Applicant also has provided local advertising information, which suggests that consumer and commercial
customers in the Old Saybrook banking market are
readily exposed to and solicited by financial service
providers in surrounding market areas. The Old Saybrook market has a weekly newspaper, but receives
local daily newspaper service from the surrounding
11. Rand McNally, Inc., delineates RMAs for the business community and can be used to indicate areas of economic and social
integration. An RMA includes a central city or cities, any adjacent
continuously built-up area, and other communities not connected to
the city by continuously built-up territory if the bulk of their population is supported by commuters to the central city and its adjacent
built-up areas, and provided their population density is fairly high. A
place generally meets the commuting requirement if at least 20 percent
of its labor force commutes to the central city or its adjacent areas.
1987 Rand McNally Commercial Atlas & Marketing Guide, 118th
Edition.
12. Sunwest Financial Services, Inc., 73 FEDERAL RESERVE BULLETIN 4 6 3 ( 1 9 8 7 ) .
New Haven and New London markets. Information
supplied by Applicant shows that eight commercial
banks located outside the Old Saybrook market regularly advertise their services in the New Haven and
New London papers distributed in the Old Saybrook
market. All local television stations, and two of three
radio stations, servicing the Old Saybrook market also
originate from the surrounding New Haven or New
London market areas. Out-of-market commercial
banks advertising their products and services over
these stations would, of necessity, be directing their
solicitations at Old Saybrook banking customers. Finally, Applicant has compiled data which show that
small businesses in the Old Saybrook market have
designated over a dozen out-of-market banking institutions to serve as their primary commercial lender.
Applicant also has identified 26 non-depository institutions offering credit services that solicit customers
in the Old Saybrook banking market. Eighteen of these
institutions specialize in mortgage credit. In addition,
at least 23 securities and bond brokers actively solicit
customers in the market. Of these 49 institutions, only
6 are physically located in the market.
In sum, the unusual geographic characteristics of
the Old Saybrook market, the strong influence on the
market of the three surrounding business centers, the
significant exposure of customers in the Old Saybrook
market to the financial services offered by out-ofmarket institutions, and evidence that Old Saybrook
customers turn to out-of-market institutions for certain
financial services, all contribute to the unique attributes of the Old Saybrook market. In the Board's
view, these factors, along with the significant competitive influence of thrifts in the market, and the existence of numerous remaining providers of financial
services to both consumer and commercial customers,
substantially mitigate the anticompetitive effects of
this proposal in the Old Saybrook market and render
competitive factors consistent with approval. The
Board therefore concludes that consummation of Applicant's proposal would not have a significant adverse
effect upon existing competition in any relevant market.
The financial and managerial resources of Applicant
and Bank are consistent with approval. Considerations
relating to the convenience and needs of the communities to be served also are consistent with approval of
this application.
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
Legal Developments
by the Federal Reserve Bank of Boston, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 14, 1987.
V o t i n g f o r this action: V i c e Chairman J o h n s o n and G o v e r nors S e g e r , A n g e l l , H e l l e r , and K e l l e y . A b s e n t and not
voting: Chairman V o l c k e r .
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Houston Bancorporation, Inc.
St. Paul, Minnesota
Order Approving Acquisition of Bank Holding
Companies and a Bank
Houston Bancorporation, Inc., St. Paul, Minnesota, a
bank holding company within the meaning of the Bank
Holding Company Act (12 U.S.C. § 1841 et seq.)
("Act"), has applied for the Board's approval under
section 3 of the Act (12 U.S.C. § 1842) to acquire
Citizens State Bank of Hayfield ("Citizens"), Hayfield, Minnesota, and to merge with Ladysmith Corporation ("Ladysmith"), St. Paul, Minnesota, and Cottage Grove Bancorporation, Inc. ("CGB"), St. Paul,
Minnesota, and thus indirectly acquire The Pioneer
National Bank of Ladysmith ("Pioneer"), Ladysmith,
Wisconsin, and Minnesota National Bank of Cottage
Grove, Cottage Grove, Minnesota.
Notice of the applications, 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 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)).
Applicant, CGB and Citizens are among the smaller
commercial banking organizations in the state of Minnesota. Upon consummation of this proposal, Applicant would become the 31 st largest commercial banking organization in the state of Minnesota, controlling
total deposits of $90.1 million, representing 0.25 percent of total deposits in commercial banking organizations in the state. 1 Consummation of this proposal
would not result in a significant increase in the concentration of banking resources in Minnesota.
Since Applicant and the banks to be acquired do not
operate in the same banking markets, consummation
1. All banking data are as of June 30, 1986.
723
of the proposal would not eliminate any existing
competition.
Applicant also seeks to acquire Ladysmith, and thus
indirectly to acquire Pioneer, a Wisconsin bank. Section 3(d) of the Act (12 U.S.C. § 1842(d)), the
Douglas Amendment, prohibits the Board from approving an application by a bank holding company to
acquire a bank located outside the holding company's
home state, unless such acquisition is "specifically
authorized by the statute laws of the state in which
such bank is located, by language to that effect and not
merely by implication." 2 The statute laws of Wisconsin, Wis. Stat. Ann. § 221.58 (West Supp. 1986),
authorize an out-of-state bank holding company with
its principal place of business in one of eight "regional
states," including Minnesota, to acquire a Wisconsin
bank that operated in Wisconsin prior to May 9, 1986,
if the Wisconsin Commissioner of Banks determines
that the "regional state" permits Wisconsin bank
holding companies to acquire banks or bank holding
companies located in that state.
The Wisconsin Commissioner of Banks and the
Minnesota Commissioner of Commerce have concluded that the statute laws of Minnesota and Wisconsin
"appear to be compatible and to permit interstate
acquisitions of banks and bank holding companies
between two states." 3 Based on the foregoing, including the Board's review of the statutes involved, the
Board has determined that the proposed acquisition is
specifically authorized by the statute laws of Wisconsin and is thus permissible under the Douglas Amendment, subject to the decision of the Wisconsin Commissioner of Banks not to disapprove this transaction
pursuant to subsections 221.58(4)(b) and (6) of the
Wisconsin Statutes, Wis. Stat. Ann. §§ 221.58(4)(b)
and 221.58(6). The Board's Order is specifically conditioned upon satisfaction of the state regulatory requirement that the Wisconsin Commissioner of Banks
not disapprove this application.
Applicant has no subsidiaries in the state of Wisconsin and does not compete in any market in the state.
Accordingly, consummation of this proposal would
not eliminate any significant competition in the relevant market in Wisconsin.
The Board concludes that the financial and managerial resources of Applicant, its subsidiary bank and the
banking organizations to be acquired are consistent
with approval of these applications. In reaching this
2. A bank holding company's home state for purposes of the
Douglas Amendment is that state in which the total deposits of its
banking subsidiaries were largest on July 1, 1966, or on the date it
became a bank holding company, whichever date is later. 12 U.S.C.
§ 1842.
3. Cooperative Agreement Between the State of Wisconsin and the
State of Minnesota, dated February 6, 1987.
724
Federal Reserve Bulletin • September 1987
conclusion, the Board notes that these transactions
involve a restructuring of the existing ownership interests of Applicant's principal, and no new acquisition
debt is involved in the proposal. The Board has also
considered, in its assessment of capital adequacy, that
actions taken in conjunction with these applications
will improve the capital position of Applicant and its
subsidiary banks, as well as the chain banking organization controlled by Applicant's principal shareholder.
In addition, Applicant has submitted a plan to further
improve the tangible primary capital ratio of the chain
banking organization. On the basis of the foregoing,
banking factors are consistent with approval of these
applications. Considerations relating to the convenience and needs of the communities to be served also
are consistent with approval of these transactions.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved, subject to the express
condition, with regard to the Wisconsin acquisition,
that the Wisconsin Commissioner of Banks not disapprove the proposed acquisition. The transactions shall
not be consummated before the thirtieth calendar day
following the effective date of this Order or later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of Minneapolis,
acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 15, 1987.
Voting for this action: Chairman Volcker and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
McLeod Bancshares, Inc.
Hutchinson, Minnesota
Applicant controls two subsidiary banks with total
deposits of $54.7 million, representing approximately
0.1 percent of the total deposits in commercial banks
in Minnesota.1 Bank is the 506th largest commercial
banking organization in Minnesota, controlling deposits of $8.4 milliion representing approximately .02
percent of the total deposits in commercial banking
organizations in the state. Consummation of this proposal would not significantly increase the concentration of banking resources in the state of Minnesota.
Applicant's subsidiary banks and Bank compete in
the Minneapolis/St. Paul banking market. 2 Applicant's
subsidiary banks control 0.4 percent of the deposits in
commercial banks in the market. 3 Bank, with deposits
of $8.4 million, is the 121st largest of 124 banks in the
market, controlling .03 percent of deposits in commercial banks in the market. Upon consummation of this
proposal, Applicant would control less than 0.5 percent of total deposits in commercial banks in the
Minneapolis/St. Paul market, and the HerfindahlHirschman Index would increase by one point to 2153.
Consummation of this proposal would not have any
significant adverse effect upon competition in any
banking market, and competitive considerations are
consistent with approval.
Bank's majority shareholder, Anchor Bancorp, Inc.
("Anchor"), and Anchor's principal shareholder
("Protestants"), filed comments opposing this proposal, arguing that the proposed acquisition of less than an
absolute majority of the voting shares of Bank will
result in the failure of Applicant to serve as a source of
financial and managerial strength to Bank. 4 Protestants also challenge whether such a minority investment in Bank will weaken Applicant's financial condition.
The Board has evaluated the financial and managerial resources of Applicant and Bank and finds them to
be consistent with approval. This transaction will be
accomplished through an exchange of shares, and
Applicant will incur no acquisition debt as a result of
Order Approving Acquisition of a Bank
McLeod Bancshares, Inc., Hutchinson, Minnesota,
has applied pursuant to section 3(a)(3) of the Bank
Holding Company Act ("BHC Act" or "Act"),
12 U.S.C. § 1841 et seq., to acquire 24.5 percent of
the voting shares of Exchange State Bank, St. Paul,
Minnesota ("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.
1. All banking data are as of December 31, 1986.
2. The Minneapolis/St. Paul banking market is approximated by the
Minneapolis/St. Paul RMA adjusted to include all of Carver and Scott
Counties and Lanesburgh Township in Le Sueur County.
3. As of June 30, 1985.
4. Protestants also argue that the value of Applicant's stock to be
received by Applicant's principal is excessive compared to the value
of Bank stock Applicant's principal will exchange with Applicant. In
questioning the appropriate ratio of shares to be exchanged, Anchor's
principal shareholder argues that as a minority shareholder of Applicant his interest in Applicant will be diluted. The price to be set for the
purchase of bank stock and, in particular, the proper ratio for
exchange of shares is a matter appropriately left to the parties to the
transaction, who in this case have already sought recourse to the
courts to resolve these issues. Further, it does not appear that such
issues are within the scope of factors the Board may consider. See
Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th
Cir. 1973).
Legal Developments
the transaction. Consequently, Applicant will not rely
upon dividends of Bank to service any debt. Based
upon this fact and the fact that the condition of Bank is
satisfactory, this proposed investment, which is actually a transfer to a holding company of an interest held
by Applicant's majority shareholder for seven years,
will not impair Applicant's financial resources. Consequently, this case can be distinguished from the
Board's decision in the case of NBC Co., 60 F E D E R A L
R E S E R V E B U L L E T I N 7 8 2 ( 1 9 7 4 ) , in which the Board
denied the acquisition of a minority interest in a bank
to which the bank's absolute majority shareholder
objected. Moreover, unlike the NBC Co. case, the
majority shareholder of Bank, Anchor, is itself a bank
holding company to which the Board may look as a
source of strength for Bank.
Applicant's principal has no representation on
Bank's board of directors and it is not anticipated that
Applicant will be so represented. As a result, this
transaction will not "perpetuate or aggravate dissension in Bank's management" — a basis cited by the
Board for denial of an application to acquire a minority
interest in NBC Co. Id. 784. Applicant also has the
necessary resources to serve as a source of financial
strength to Bank. Moreover, Bank's condition is satisfactory and Anchor is considered to be a source of
strength to Bank, particularly in view of its recent
injection of capital into Bank. Accordingly, there is no
extraordinary need for Applicant to play a more active
role as a source of financial strength to Bank. After
careful review of the comments submitted and all of
the facts of record in this case, the Board has determined that the comments submitted do not warrant
denial of this application. Financial and managerial
factors and future prospects of Applicant, its subsidiary banks, and Bank are consistent with approval.
Considerations relating to the convenience and needs
of the community to be served are also consistent with
approval.
Based on the foregoing and other facts of record, the
Board has determined that the application should be
and hereby is approved. This 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 Minneapolis pursuant to delegated authority.
By order of the Board of Governors, effective
July 10, 1987.
V o t i n g for this action: Chairman V o l c k e r and G o v e r n o r s
S e g e r , A n g e l l , a n d K e l l e y . A b s e n t and not voting: G o v e r n o r s
J o h n s o n and H e l l e r .
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
725
Northeast Bancorp, Inc.
North East, Maryland
Order Approving Formation of a Bank Holding
Company
Northeast Bancorp, Inc., North East, Maryland, has
applied for the Board's approval under section 3(a)(1)
of the Bank Holding Company Act of 1956, as amended ("BHC Act") (12 U.S.C. § 1842(a)(1)), to become
a bank holding company by acquiring 80 percent or
more of the outstanding voting stock of First National
Bank of North East, North East, Maryland ("Bank").
Notice of the application, affording interested persons an opportunity to submit comments, has been
given in accordance with section 3(b) of the BHC Act.
The time for filing comments has expired and the
Board has considered the application and all comments received in light of the factors set forth in
section 3(c) of the BHC Act (12 U.S.C. § 1842(c)).
Applicant is a nonoperating corporation with no
subsidiaries formed for the purpose of acquiring Bank.
Bank is the 48th largest commercial banking organization in the State of Maryland, with total deposits of
$40.8 million, representing less than 0.2 percent of the
total deposits in commercial banks in the state. 1
Bank is the 39th largest of 57 commercial banking
organizations in the Wilmington banking market, 2 controlling 0.3 percent of the total deposits in commercial
banks. 3 Principals of Applicant are not affiliated with
any other depository organization in the market. Consummation of this proposal would not result in any
adverse effects upon competition or increase the concentration of banking resources in any relevant market. Accordingly, the Board concludes that competitive considerations under the BHC Act are consistent
with approval.
In its evaluation of Applicant's managerial resources, the Board has considered certain violations
by Bank of the Currency and Foreign Transactions
Reporting Act ("CFTRA") and the regulations thereunder. 4 Applicant has taken appropriate remedial action to correct such violations and prevent their recurrence. The corrective measures include the
development of a new compliance policy, enhanced
audit procedures, and additional training for Bank's
personnel. In addition, Bank's primary regulator, the
1. All banking data are as of June 30, 1986, unless otherwise
indicated.
2. The Wilmington banking market is defined as Cecil County,
Maryland; Chester County, Pennsylvania; Salem County, New Jersey; and New Castle County, Delaware.
3. Market data are as of June 30, 1985.
4. 31 U.S.C. § 5311, et seq.; 31 C.F.R. § 103.
726
Federal Reserve Bulletin • September 1987
Office of the Comptroller of the Currency, has indicated that all CFTRA violations were corrected and that a
subsequent examination did not reveal any additional
violations.
The financial and managerial resources and future
prospects of Applicant and Bank are considered consistent with approval of the proposal. 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 application should be,
and hereby is, approved. This 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 Richmond, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 2, 1987.
Voting for this action: Chairman Volcker and Governors
Johnson, Seger, Angell, and Kelley. Absent and not voting:
Governor Heller.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Orders Issued Under Section 4 of the Bank
Holding Company Act
Amsterdam-Rotterdam Bank N . V .
Amsterdam, The Netherlands
Order Approving Application to Acquire
Pacific Corporation
Amsterdam
Amsterdam-Rotterdam Bank N.V., Amsterdam, The
Netherlands, a foreign bank subject to the provisions
of the Bank Holding Company Act (12 U. S.C. § 1841
et seq.) (the "Act"), has applied for the Board's
approval pursuant to section 4(c)(8) of the Act
(12 U.S.C. § 1843(c)(8)) to acquire up to 100 percent
of the voting shares of Amsterdam Pacific Corporation, San Francisco, California ("Company"), and
thereby to engage de novo in certain nonbanking
activities.
Notice of the application, affording interested persons an opportunity to submit comments, has been
published (52 Federal Register 13,521 (1987)). The
time for filing comments has expired, and the Board
has considered the application and all comments received in light of the factors set forth in section 4(c)(8)
of the Act.
Applicant, with total assets of approximately $63.2
billion,1 is the second largest bank in the Netherlands
and the 48th largest banking organization worldwide.
Through its subsidiaries, Applicant engages in various
permissible banking and nonbanking activities.
Company will engage in the following nonbanking
activities:
(1) portfolio investment advisory services for a small
number of investment partnerships;
(2) feasibility studies for corporations; and
(3) valuation services (including valuations of companies or one or more integral parts) for purposes of
acquisitions, mergers or divestitures; tender offer
evaluations; advice for management or for bankruptcy court on the viability and capital adequacy of
financially troubled companies (and on the fairness
of bankruptcy reorganization); valuation opinions
on transactions in publicly held securities; valuations on the fair market value of employee stock
ownership trusts; periodic valuation of stock of
privately owned companies; and valuations of large
blocks of securities of publicly owned companies.
Portfolio investment advisory services 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)(4)(iii)). The Board previously
has determined by Order that the activities of providing feasibility studies for corporations and valuation
services are closely related to banking and permissible
for bank holding companies. 2
In order to approve this application, the Board must
also find that the performance of the proposed activities "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." In
this regard, Company will be a de novo entrant into the
financial services market and will enhance competition
by widening the range of firms from which companies
may choose.
The Board notes that the primary capital ratio of
Applicant, as publicly reported, is below the minimum
capital guidelines established by the Board for U.S.
bank holding companies. The Board has also considered all of the information available to the Board
1. Data are as of December 31, 1986.
2. Security
Pacific
118 ( 1 9 8 5 ) ; Signet
LETIN 5 9 ( 1 9 8 7 ) .
Corporation,
Banking
7 1 F E D E R A L RESERVE B U L L E T I N
Corporation,
7 3 F E D E R A L RESERVE B U L -
Legal Developments
regarding the financial condition of Applicant and
made adjustments in accordance with U.S. regulatory
and accounting practices. In light of these facts and the
fact that Company will be established de novo, will be
small in comparison to Applicant, and will engage in
permissible nonbanking activities, the Board has determined that the financial resources of Applicant are
consistent with approval of this application. The managerial resources of Applicant also are consistent with
approval.
The Board believes that concerns regarding conflicts of interest and related adverse effects that may
be associated with financial feasibility studies can be
substantially mitigated through the imposition of conditions designed to prevent such adverse effects. The
Board finds that the appropriate conditions to mitigate
such adverse effects are as follows:
(1) Company's financial advisory activities shall not
encompass the performance of routine tasks or
operations for a customer on a daily or continuous
basis;
(2) Disclosure will be made to each potential customer of Company that Company is an affiliate of
Applicant;
(3) Advice will be rendered by Company on an
explicit fee basis without regard to correspondent
balances maintained by a customer of Company at
Applicant or any depository subsidiary of Applicant; and
(4) Company will not make available to Applicant or
any of its subsidiaries confidential information received from Company's clients.
Under these conditions, the Board concludes that
Applicant's performance of financial feasibility studies
is unlikely to result in any undue concentration of
resources, decreased or unfair competition, unsound
banking practices, or other adverse effects.
The Board has also considered whether adverse
effects such as conflicts of interest or unsound banking
practices may be associated with the conduct of valuation services by a bank holding company subsidiary
and has determined that no significant adverse effects
would result from the Board's approval of these activities.
Based on the foregoing analysis and all the facts of
record, the Board has determined that the balance of
the public interest factors it is required to consider
under section 4(c)(8) of the Act is favorable. Accordingly, the application should be and hereby is approved. This determination is subject to the conditions
set forth in this Order for the avoidance of conflicts of
interest and the conditions set forth in the Board's
Regulation Y, including those in sections 225.4(d) and
225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)).
727
The approval is also subject to the Board's authority to
require such modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to assure compliance
with the provisions and purposes of the Act and the
Board's regulations and orders issued thereunder, or
to prevent evasion thereof.
The transaction shall not be consummated later than
three months after the effective date of this Order,
unless such period is extended for good cause by the
Board, or by the Federal Reserve Bank of New York
pursuant to delegated authority.
By order of the Board of Governors, effective
July 30, 1987.
Voting for this action: Vice Chairman Johnson and Governors Seger, Heller, and Kelley. Absent and not voting:
Chairman Volcker and Governor Angell.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
BankAmerica Corporation
San Francisco, California
Order Approving the Issuance and Sale of Payment
Instruments
BankAmerica Corporation, San Francisco, California
("BAC"), a bank holding company within the meaning
of the Bank Holding Company Act ("Act")
(12 U.S.C. § 1841(c)) has applied for the Board's
approval under section 4(c)(8) of the Act and sections 225.23 and 225.25(b)(12) of the Board's Regulation Y (12 C.F.R. §§ 225.23 and 225.25(b)(12)), to
engage de novo in the issuance and sale of general
purpose, variably denominated payment instruments
with a maximum face value of $10,000. BAC proposes
to market these instruments to consumer and business
customers through financial institutions including its
lead bank and certain other subsidiaries across the
United States and abroad. 1
Notice of the application, affording interested persons an opportunity to submit comments has been
published (52 Federal Register 12,250 (April 15,
1987)). The time for filing comments has expired, and
1. This application is substantially similar to one that the Board
approved on March 16,1984. BAC never issued instruments above the
$1,000 limit, however.
728
Federal Reserve Bulletin • September 1987
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.
BAC controls total consolidated assets of $99.1
billion and total deposits of $82.2 billion, and is the
second largest bank holding company in the United
States. 2 BAC's lead bank, Bank of America N.T. &
S.A. ("Bank"), controls deposits of $56.8 million and
is the largest commercial banking organization in
California.3 BAC also engages, through various nonbank subsidiaries, in mortgage banking, commercial
lending and leasing, credit-related insurance, investment advisory, and financial management consulting
activities.
BAC proposes to engage de novo in the issuance and
sale of general purpose, variably denominated payment instruments drawn on BAC with a maximum face
value of $10,000. These instruments will include domestic and international money orders and two types
of official checks. BAC proposes to market these
instruments to consumer and business customers
through foreign and domestic financial institutions,
including Bank and certain other of BAC's subsidiaries. BAC also proposes to use these instruments in lieu
of certain internal payments, including payroll and
dividend checks currently drawn on Bank. 4
The Board previously has determined that the issuance and sale of money orders and similar payment
instruments with a maximum face value of $1,000 is
closely related to banking. 12 C.F.R. § 225.25(b)(12).
The Board also has approved by order a limited
number of applications to engage in the issuance of
payment instruments with a $10,000 maximum face
value.5 In each case, the Board determined that an
increase in the maximum denomination of payment
instruments would not affect the fundamental nature of
the activity as otherwise permitted under Regulation Y.
In order to approve this application under section
4(c)(8), the Board must find that BAC's performance
of the proposed activity could "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
2. Asset data for BAC are as of March 31, 1987, and deposit data
are as of December 31, 1986.
3. Deposit data for Bank are as of June 30, 1986.
4. As an incident to this activity, BAC proposes that its wholly
owned subsidiary BA Cheque Corporation will continue to provide
marketing and distribution services.
5. BankAmerica
Corporation,
7 0 FEDERAL RESERVE B U L L E T I N 3 6 4
(1984); See also, RepublicBank
Corporation,
B U L L E T I N 7 2 4 ( 1 9 8 5 ) ; Citicorp,
7 1 FEDERAL RESERVE B U L L E T I N 5 8
(1985).
undue concentration of resources, decreased or unfair
competition, conflicts of interests, or unsound banking
practices." 12 U.S.C. § 4(c)(8).
The type of money orders and official checks that
BAC proposes to issue are marketed locally on the
retail level by a variety of financial and non-financial
firms.6 Only a few large institutions market these
instruments on a national basis, however. The international payment instruments market also is highly concentrated because few organizations have the established network and operational resources necessary to
conduct a worldwide payment instruments business.
There are further barriers to entry on a worldwide
scale, in that the issuance and sale of payment instruments typically is a low unit price, high volume
business that requires extensive management expertise combined with an efficient sales and servicing
operation. BAC indicates that it already has these
systems and resources in place by virtue of its prior
application to engage in the issuance of payment
instruments activity.
BAC seeks to increase the maximum denomination
on its payment instruments in order to generate additional revenue from existing business. BAC maintains
that such expanded authority is essential for it to
successfully compete with other bank and nonbank
issuers of payment instruments. As an additional benefit of its proposal, BAC expects improved parent
company liquidity through an increase in investable
funds. The record shows that BAC's sale and issuance
of larger denominated money orders would increase
competition in this field and enhance the convenience
of the purchaser. BAC contends that these instruments would enjoy ready acceptability, and thus
would provide benefits to the public. BAC also contends that its proposed activity would not lead to
unsound banking practices or other adverse effects. In
this respect, BAC states that it already has reduced
significantly the risk of loss associated with these
instruments by adopting extensive system-wide control procedures.
In considering previous applications regarding variably denominated payment instruments, the Board
expressed concern that the issuance of instruments in
denominations larger than $1,000 would result in an
adverse effect on the reserve base. The Board noted
that reserve requirements serve as an essential tool of
monetary policy, and that the soundness of that policy
would be jeopardized by the erosion of reservable
deposits in the banking system. The Board therefore
conditioned its grant of approval on the requirement
71 FEDERAL RESERVE
6. Money orders typically are used to transmit funds of consumers
who do not or cannot maintain checking accounts.
Legal Developments
that a bank holding company applicant submit weekly
reports of its daily payment instruments operations.
The Board deemed this requirement as essential to
monitor the effects of such proposals on the reserve
base. The Board also underscored its authority under
section 19 of the Federal Reserve Act (12 U.S.C.
§ 461(a)), to impose reserve requirements if necessary
to avoid a significant reduction in the reserve base, or
to avoid other adverse effects that might result from
such proposals. In keeping with this policy determination, BAC has committed to submit to the Board
weekly reports of its daily payment instruments activity. Accordingly, in light of this commitment, the
Board believes that public benefits outweigh potential
adverse effects of BAC's expanded payment instruments proposal.
Based upon the foregoing and other considerations
reflected in the record of this application, the Board
has determined that the balance of the public interest
factors it is required to consider under section 4(c)(8)
is favorable. This determination is subject to all of the
considerations set forth in Regulation Y, including
sections 225.4(d) and 225.23(b), and to the Board's
authority to require such modification or termination
of the activities of a holding company or any of its
subsidiaries as the Board finds necessary to assure
compliance with, or prevent evasion of, the provisions
and purposes of the Act and the Board's regulations
and orders issued thereunder.
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
San Francisco, acting pursuant to delegated authority.
By order of the Board of Governors, effective
July 21, 1987.
V o t i n g for this action: V i c e Chairman J o h n s o n and G o v e r nors S e g e r , A n g e l l , and K e l l e y . A b s t a i n i n g f r o m this action:
G o v e r n o r H e l l e r . A b s e n t and not voting: Chairman V o l c k e r .
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
The Chase Manhattan Corporation
N e w York, N e w York
Order Conditionally Approving Application to
Underwrite and Deal in Mortgage-Related Securities
to a Limited Extent
The Chase Manhattan Corporation, New York, New
York, a bank holding company within the meaning of
729
the Bank Holding Company Act, 12 U.S.C. § 1841
et seq. ("BHC Act"), has applied for the Board's
approval under section 4(c)(8) of the BHC Act,
12 U.S.C. § 1843(c)(8), and section 225.21(a) of the
Board's Regulation Y, 12 C.F.R. § 225.21(a), to engage through a wholly owned subsidiary, Chase Home
Mortgage Corporation ("Company"), Montvale, New
Jersey, in underwriting and dealing in, to a limited
extent, certain residential mortgage-related securities
that are ineligible for underwriting and dealing in by
state member banks under the Glass-Steagall Act. 1
Applicant has previously received approval under
section 4(c)(8) of the BHC Act for Company to engage
in mortgage banking activity encompassing originating, pooling, and servicing mortgage loans. 2 The proposed new underwriting and dealing activities would
be provided in addition to the previously approved
mortgage banking activities, with Company serving
customers through offices in New Jersey, New York,
Florida, Maryland, Massachusetts, New Hampshire,
Pennsylvania, Texas, and Virginia.
Applicant, with consolidated assets of $94.8 billion,3
is the third largest banking organization in the nation.
It operates seven subsidiary banks in New York,
Maryland, Ohio, Delaware, Florida, and Arizona and
engages in a broad range of permissible nonbanking
activities in the United States and abroad.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (52 Federal Register 7,026
(1987)). The time for filing comments has expired, and
the Board has considered the application and all
comments received in light of the factors set forth in
section 3(c) of the BHC Act (12 U.S.C. § 1842(c)).
The Board has previously authorized Applicant to
underwrite, place and deal in commercial paper to a
limited extent through a separate commercial finance
subsidiary on the basis that the subsidiary would not
be "engaged principally" in underwriting and dealing
in securities within the meaning of section 20 of the
Glass-Steagall Act. 4 The Chase Manhattan Corporation, 73 F E D E R A L R E S E R V E B U L L E T I N 367 (1987). In
that case, Applicant agreed to limit its commercial
paper activity so that the gross revenues derived from
1. 12 U.S.C. §§ 24 Seventh and 335.
2. These activities are authorized for bank holding companies
under section 225.25(b)(1) of Regulation Y. 12 C.F.R. § 225.25(b)(1).
3. Banking data are as of December 31, 1986.
4. Section 20 of the Glass-Steagall Act (12 U.S.C. § 377) prohibits
the affiliation of a member bank with "any corporation . . . engaged
principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through syndicate participation of
stocks, bonds, debentures, notes, or other securities . . . ." Company
is a member bank affiliate for purposes of section 20.
730
Federal Reserve Bulletin • September 1987
the subsidiary's commercial paper underwriting,
placement and dealing service did not in any year
exceed 5 percent of its gross revenues from commercial lending activity and that its underwriting, dealing
and placement activities did not exceed 5 percent of
the commercial paper market. In this case, Applicant
proposes the same quantitative limitations on Company's underwriting and dealing activity in the mortgagerelated securities proposed by Applicant. 5 For the reasons set forth in the Chase Order, the Board has
determined that Applicant's proposal to underwrite
and deal in 1-4 family mortgage-related securities
would not violate section 20 of the Glass-Steagall Act.
In every application under section 4(c)(8) of the
BHC Act, the Board must find that the proposed
activity is "so closely related to banking . . . as to be a
proper incident thereto." This statutory standard requires that two separate tests be met for an activity to
be permissible for a bank holding company. First, the
Board must determine that the activity is, as a general
matter, "closely related to banking." Second, the
Board must find in a particular case that the performance of the activity by the applicant bank holding
company may reasonably be expected to produce
public benefits that outweigh possible adverse effects.
In several recent decisions, the Board has determined that underwriting and dealing in, to a limited
extent, 1-4 family mortgage-related securities is closely related to banking for purposes of section 4(c)(8).
For the reasons stated in these prior decisions, the
Board finds that Company's proposed activities which
are the same as those involved in these previous
decisions are closely related to banking.6
For the reasons set forth in the Board's Citicorp/
Morgan!Bankers Trust Order, the Board also concludes that Applicant's proposal to engage through
Company in underwriting and dealing in 1-4 family
mortgage-related securities is a proper incident to
5. Specifically, Applicant has agreed to limit Company's proposed
activities so that the gross revenues from Company's underwriting
and dealing in ineligible mortgage-related securities do not exceed 5
percent of Company's gross revenues during any two calendar year
period and Company's underwriting and dealing activity does not
account for more than 5 percent of the total amount of that type of
security underwritten or dealt in domestically during the previous
year.
6. Citicorp!J.P. Morgan & Co. Incorporated/Bankers
Trust New
York
Corporation,
7 3 F E D E R A L RESERVE B U L L E T I N 4 7 3 ( 1 9 8 7 ) .
See
also, Chemical New York Corporation, 73 FEDERAL RESERVE BULLETIN 616 (1987); The Chase Manhattan Corporation, 73 FEDERAL
RESERVE B U L L E T I N 6 0 7 ( 1 9 8 7 ) ; Manufacturers
Hanover
7 3 F E D E R A L RESERVE B U L L E T I N 6 2 0 ( 1 9 8 7 ) ; Security
ration,
Corporation,
Pacific
7 3 FEDERAL RESERVE B U L L E T I N 6 2 2 ( 1 9 8 7 ) ; PNC
Corporation,
73
FEDERAL
RESERVE
BULLETIN
742
July 1, 1987); and Marine Midland Banks, Incorporated,
RESERVE B U L L E T I N 7 3 8 ( O r d e r d a t e d J u l y 14,
1987).
(Order
CorpoFinancial
dated
73 FEDERAL
banking within the meaning of section 4(c)(8) of the
BHC Act provided Applicant limits Company's activities as described in the CiticorplMorganlBankers Trust
Order. 7
Accordingly, the Board has determined to approve
the application subject to the revenue and market
share limitations proposed by Applicant and to the
prudential framework of terms and conditions established in the Citicorp/Morgan/Bankers Trust Order
relating to underwriting and dealing in ineligible mortgage-related securities, including limitations to address conflicts of interest and other possible adverse
effects addressed in that Order. The Board hereby
adopts and incorporates herein by reference the reasoning and analysis contained in the Chase and Citicorp/Morgan/Bankers Trust Orders.
The Board's approval of this application extends
only to proposed activities conducted within the limitations of the Chase and CiticorplMorganlBankers
Trust Orders, including the Board's reservation of
authority to establish additional limitations to ensure
that the subsidiary's activities are consistent with
safety and soundness, conflict of interest and other
relevant considerations under the BHC Act. Underwriting and dealing in the approved securities in any
manner other than as approved in those Orders 8 is not
within the scope of the Board's approval and is not
authorized for Company.
As the Board noted in the CiticorplMorganlBankers
Trust Order, Congress has under consideration legislation that would prohibit Board approval of an underwriting application, such as this, between March 6,
1987, and March 1, 1988. While this moratorium
legislation has not yet been enacted into law, the
Board calls to Applicant's attention that it may be
required by subsequent Congressional action to cease
its underwriting and dealing activities approved in this
Order. The Board retains jurisdiction over the application to act to carry out the requirements of any
legislation adopted by Congress that would affect
Applicant's conduct of underwriting and dealing activities under this Order and the BHC Act.
7. Applicant has also proposed to underwrite and deal in certain
mortgage-related securities backed by whole mortgage loans originated by its banking affiliates. The Board considered at length whether to
permit an underwriting subsidiary to underwrite and deal in its
affiliates' securities in its CiticorplMorganlBankers
Trust Order. For
the reasons set forth in that Order, the Board has determined that
Applicant may not underwrite and deal in its affiliates' securities.
8. Company may also provide services that are necessary incidents
to these approved activities. The incidental services should be taken
into account in computing the gross revenue and market share limits
on the subsidiary's ineligible underwriting and dealing activities, to
the extent such limits apply to particular incidental activities.
Legal Developments
The Board's determination is subject to all of the
conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder.
While the U.S. Court of Appeals for the Second
Circuit has stayed the CiticorplMorganlBankers Trust
Order as well as subsequent Board orders approving
the underwriting applications of a number of other
bank holding companies, the Board has determined
not to stay this Order. The Board notes that the court's
actions were in response to a request by the Securities
Industry Association (the "SIA") which was based
solely on the grounds that the approved activities
would be conducted by bank holding company subsidiaries that are engaged principally in underwriting and
dealing in those kinds of securities that banks may
underwrite and deal in directly, an issue not presented
by the instant application. In this case, the Board
notes that the SIA has not requested that the court
stay, and no court has stayed, the Board's Orders
approving the applications of Chase, to underwrite,
place and deal in commercial paper or Bankers Trust,
to place commercial paper, 9 both through commercial
finance subsidiaries.
The 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 the Federal Reserve Bank of New York,
pursuant to delegated authority.
By order of the Board of Governors, effective
July 17, 1987.
Voting for this action: Chairman Volcker and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Concurring Statement by Chairman Volcker and
Governor Angell
We join with the majority of the Board in giving
approval for the Chase application to underwrite and
deal in 1-4 family mortgage-related securities to a
9. Bankers Trust New York Corporation, 73 FEDERAL RESERVE
BULLETIN 138 ( 1 9 8 7 ) .
731
limited extent in a mortgage lending affiliate. This
application, like the Bankers Trust and Chase applications to place, underwrite and deal in commercial
paper through commercial lending affiliates, does not
raise the issue under section 20 of the Glass-Steagall
Act of using a bank-eligible securities underwriting
affiliate for ineligible underwriting and dealing. As we
indicated previously, we agree generally with the
nature of the limitations placed upon the securities
activities approved by the Board in the Citicorp, J.P.
Morgan and Bankers Trust applications. Our point of
difference involved the type of underwriting subsidiary
proposed in those cases, an issue that does not arise in
this case.
July 17, 1987
Chemical N e w York Corporation
N e w York, N e w York
The Chase Manhattan Corporation
N e w York, N e w York
Bankers Trust N e w York Corporation
N e w York, N e w York
Citicorp
N e w York, N e w York
Manufacturers Hanover Corporation
N e w York, N e w York
Security Pacific Corporation
Los Angeles, California
Order Approving Applications to Engage in Limited
Underwriting and Dealing in Consumer-ReceivableRelated Securities
Chemical New York Corporation, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp, Manufacturers Hanover Corporation,
all of New York, New York, and Security Pacific
Corporation, Los Angeles, California (collectively
"Applicants"), bank holding companies within the
meaning of the Bank Holding Company Act ("BHC
Act"), have each applied for the Board's approval
under section 4(c)(8) of the BHC Act and section
225.21(a) of the Board's Regulation Y, 12 C.F.R.
§ 225.21(a), to engage through wholly owned subsidiaries, Chemical Securities, Inc., Chase Manhattan
Securities, Inc., BT Securities Corporation, Citicorp
Securities, Inc., Manufacturers Hanover Securities
Corporation, and Security Pacific Securities, Inc.,
732
Federal Reserve Bulletin • September 1987
respectively, in underwriting and dealing in, on a
limited basis, consumer-receivable-related securities
("CRRs"). The Board has not previously approved
the proposed underwriting and dealing activity in
CRRs for a bank holding company.
CRRs are a new type of security, first issued in 1985,
consisting of debt obligations that are secured by or
represent an interest in a diversified pool of loans to or
receivables from consumers, such as loans to individuals to finance the purchase of automobiles or personal credit card accounts. Although most of the CRRs
underwritten to date have been collateralized by automobile receivables, CRRs backed by credit card receivables recently have been distributed.
The mechanisms and techniques applied to the
securitization and distribution of CRRs resemble those
used for mortgage-related securities. Both types of
securities generally use either a pass-through or a paythrough structure. In both structures, consumer receivables from many individual borrowers are sold to
an issuing vehicle like a trust. Principal and interest
payments on the underlying receivables are collected
by a servicing agent, typically the originator of the
receivables, and remitted to the issuer or a trustee for
the issuer. The transaction with investors is generally
structured so that the aggregate payments expected to
be collected on the underlying receivables will exceed
the payment obligation to investors. The excess funds
constitute the residual value of the pool of receivables,
which may be retained by the originator or servicer,
become a reserve fund that serves as credit support or
recourse for an issuer of a letter of credit or bond
supporting the CRRs, or which, in some cases, may be
sold separately to investors.
Applicants previously received Board approval under section 4(c)(8) of the BHC Act for the above
mentioned subsidiaries (collectively the "underwriting
subsidiaries") to underwrite and deal in U.S. government and agency and state and municipal securities
that state member banks are authorized to underwrite
and deal in under section 16 of the Glass-Steagall Act
(12 U.S.C. §§ 24 Seventh and 335) (hereinafter "bankeligible securities"). The Applicants previously applied to engage through those underwriting subsidiaries in underwriting, dealing or placing commercial
paper, 1-4 family mortgage-related securities, certain
municipal revenue bonds (including "public-ownership" industrial development bonds), and CRRs (hereinafter "bank-ineligible securities").
Notice of the applications for underwriting and
dealing activity in bank-ineligible securities including
CRRs, affording interested persons an opportunity to
submit comments on the proposals, has been published (51 Federal Register 42,300 (1986), 52 Federal
Register 1,380 (1987), 51 Federal Register 16,590
(1986), 50 Federal Register 20,847 (1985), 52 Federal
Register 6,218 and 8,365 (1987)). Most of the public
comments on the applications were favorable. Four
commenters, including the Securities Industry Association ("SIA"), a trade association of the investment
banking industry, and the Investment Company Institute, a trade association of the mutual fund industry,
opposed one or more of the applications (collectively
the "protestants"). The protestants objected to the
proposed activity for CRRs for the reasons they opposed the types of underwriting and dealing in the
bank-ineligible securities previously approved by the
Board. In addition, the SIA expressed the view that
the proposed activity differs from previously approved
activity and could lead to adverse effects.
In April and May, 1987, the Board authorized Applicants to underwrite and deal in, to a limited extent,
commercial paper, 1-4 family mortgage-related securities, and certain municipal revenue bonds. 1 In its
Orders, the Board concluded that the underwriting
subsidiaries would not be "engaged principally" in
underwriting or dealing in securities within the meaning of section 20 of the Glass-Steagall Act, 2 provided
they derived no more than 5 percent of their total gross
revenues from underwriting and dealing in ineligible
securities over any two year period and their underwriting and dealing activities did not exceed 5 percent
of the market for each particular type of security
involved. The Board further found that, subject to the
prudential framework of limitations established in
those cases to address the potential for conflicts of
interest, unsound banking practices or other adverse
effects, the proposed underwriting and dealing activities were so closely related to banking as to be a
proper incident thereto within the meaning of section
4(c)(8) of the BHC Act. In the case of CRRs, the Board
concluded that the record then before it did not
provide a sufficient evidentiary basis for it to make the
formal findings required by the BHC Act, but stated
that it would reconsider the matter within 60 days of its
Order on the basis of fuller submissions.
In every application under section 4(c)(8) of the
BHC Act, the Board must find that the proposed
1. Citicorp,
New
York
Chemical
J.P. Morgan
Corporation,
New
York
& Co. Incorporated
and Bankers
Trust
7 3 FEDERAL RESERVE BULLETIN 4 7 3 ( 1 9 8 7 ) ;
Corporation,
7 3 FEDERAL RESERVE BULLETIN
616 (1987); The Chase Manhattan Corporation, 73 FEDERAL RESERVE
BULLETIN 607 (1987); Citicorp (commercial paper), 73 FEDERAL
RESERVE BULLETIN 618 (1987); Manufacturers Hanover
Corporation,
7 3 FEDERAL RESERVE BULLETIN 6 2 0 ( 1 9 8 7 ) ; Security
ration,
cial
Pacific
7 3 FEDERAL RESERVE B U L L E T I N 6 2 2 ( 1 9 8 7 ) ; a n d PNC
Corporation,
CorpoFinan-
7 3 FEDERAL RESERVE BULLETIN 7 4 2 ( O r d e r d a t e d
July 1, 1987).
2. Section 20 (12 U.S.C. § 377) provides that
. . . no m e m b e r b a n k shall be affiliated . . . with any . . . organization
engaged principally in the issue, flotation, underwriting, public sale, or
distribution at w h o l e s a l e o r retail o r through syndicate participation of
stocks, b o n d s , d e b e n t u r e s , n o t e s , o r o t h e r securities. . . .
Legal Developments
activity is "so closely related to banking . . . as to be a
proper incident thereto." This statutory standard requires that two separate tests be met for an activity to
be permissible for a bank holding company. First, the
Board must determine that the activity is, as a general
matter, "closely related to banking." Second, the
Board must find in a particular case that the performance of the activity by the applicant bank holding
company may reasonably be expected to produce
public benefits that outweigh possible adverse effects.
A. Closely Related to Banking Analysis
Based on guidelines established in the National Courier decision, a particular activity may be found to meet
the "closely related to banking" test if it is demonstrated that:
(1) banks generally have in fact provided the proposed activity;
(2) banks generally provide services that are operationally or functionally so similar to the proposed
activity so as to equip them particularly well to
provide the proposed activity; or
(3) banks generally provide services that are so
integrally related to the proposed activity as to
require their provision in a specialized form. 3
The Board concludes that underwriting and dealing
in CRRs is closely related to banking on the basis that
banks provide services that are operationally and
functionally so similar to the proposed services that
banking organizations are particularly well equipped
to provide them. In accordance with section 16 of the
Glass-Steagall Act, banks underwrite and deal in
certain mortgage-related securities that are issued or
guaranteed by the United States or by agencies. Included among these bank-eligible securities are securities that represent interests in pools of mortgage loans
for residential housing purposes made by banks and
other financial institutions. These kinds of securities
are very similar to CRRs. Both CRRs and bankeligible mortgage-related securities represent interests
in pools of loans made by financial institutions to
individuals to finance the purchase of housing or
consumer goods and services.
The techniques involved in underwriting and dealing
in bank-eligible mortgage-related securities are the
same, or substantially the same, as those that would be
733
involved in conducting the proposed activity with
respect to CRRs. In each case the underwriter must
perform substantially identical functions of evaluating
prepayment risk, analyzing credit and cash flow from a
pool of numerous individuals' loans, negotiation or
bidding, distribution and dealing.
In addition, banks also now directly perform some
of the functions involved in the proposed activity,
since banks now perform the function of selecting the
consumer loans that form the pool of interests which
are then sold to investors. Banks also advise issuers of
CRRs and assist issuers in privately placing these
securities.
The SIA maintains there are differences between the
proposed activity and the previously approved securities underwriting and dealing activity, such as the
newness of the market for CRRs and distinctions
between consumer loans and mortgages that banks are
eligible to underwrite. The Board has concluded,
however, that these differences do not detract significantly from the functional and operational similarities
between the proposed activity in CRRs and activities
conducted by banks involving bank-eligible mortgagerelated securities. In this regard, the Board notes that
banks were active in the early stages of the analogous
market for residential mortgage-related securities and
have substantial expertise with regard to the characteristics of consumer receivables that may vary from
the characteristics of mortgage loans.
B. Proper Incident to Banking Analysis
In order to approve an application to engage in a
nonbanking activity under section 4(c)(8) of the Act,
the Board must determine that a proposed activity is a
"proper incident" to banking by determining whether
the performance of the activity by the applicant bank
holding company may reasonably be expected to produce public benefits, such as greater convenience,
increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking
practices. 12 U.S.C. § 1843(c)(8). Based upon the facts
of record and for the reasons and subject to the
limitations set out below, the Board finds that underwriting and dealing in CRRs may reasonably be expected to result in substantial public benefits that
outweigh possible adverse effects.
1. Public Benefits
3. National Courier Association
v. Board of Governors of the
Federal Reserve System, 516 F.2d 1229, 1237 (D.C. Cir. 1975). The
National Courier guidelines are not the exclusive basis for a closely
related determination. Id. at 1237. The Board may consider any other
basis that may demonstrate that the activity has a close relationship to
banking. 49 Federal Register 806 (1984).
In CiticorplMorgan/Bankers Trust, the Board concluded that Applicant's bank-ineligible securities underwriting and dealing activities would result in significant benefits to the public in the form of increased
734
Federal Reserve Bulletin • September 1987
competition in the bank-ineligible securities market,
greater convenience to customers and gains in efficiency in the provision of services. Applicants' proposals
with respect to CRRs also represent a de novo expansion into a new market, and thus may be expected to
increase competition. Public benefits in the form of
reduced financing costs, increased availability of services to issuers and investors, market innovation, and
increased market efficiency may also be expected to
result.
2. Adverse Effects
In Citicorp!Morgan!Bankers Trust, the Board considered at length whether adverse effects would be associated with a limited amount of underwriting and
dealing in bank-ineligible 1-4 family mortgage-related
securities, municipal revenue bonds and commercial
paper performed by a bank holding company subsidiary under the prudential framework adopted by the
Board in the Order. The Board concluded that under
the safeguards imposed in those cases there was no
evidence that the activity would be likely to result in
any significant adverse effects. Although the market
for CRRs is relatively new, there has not been any
evidence that underwriting and dealing in CRRs would
involve greater risk or other adverse effects than
underwriting and dealing in the bank-ineligible securities previously approved by the Board, or that the
possible adverse effects from underwriting and dealing
in the CRRs type of security would be substantially
different from those the Board identified and analyzed
with respect to the previously approved bank-ineligible securities. In view of the similarity between the
securities involved in these proposals and the bankineligible 1-4 family mortgage-related securities involved in activities the Board has previously approved, and for the reasons set forth in the Citicorp/
Morgan/Bankers Trust Order, the Board believes it is
appropriate to require the proposed activity to be
conducted in accordance with the same requirements
established in that Order. These include the requirement that the securities be rated as investment quality
(i.e., in one of the top four categories) by a nationally
recognized rating agency. 4
4. The Board notes that Standard & Poor's has indicated that in
assessing CRRs it would rely on: the ability of the pool to generate
sufficient cash flow so that holders are paid principal and interest as
scheduled; the historical performance of the portfolio in relation to
industry or product norms and portfolio characteristics (such as
delinquency, loss and repayment statistics, audit procedures and
accounting systems); the originating and servicing operations and the
development and maintenance of stringent lending criteria and credit
policies; the geographic diversity in the pool to reduce risks associated
with regional economic downturns; the pool selection (with underwrit-
For the reasons set forth above and in the Board's
CiticorplMorgan/Bankers Trust Order, the Board concludes that Applicants' proposals to engage through
subsidiaries in underwriting and dealing in CRRs
would not result in a violation of section 20 of the
Glass-Steagall Act and is closely related and a proper
incident to banking within the meaning of section
4(c)(8) of the BHC Act provided Applicants limit their
underwriting subsidiaries' activities in all bank-ineligible securities as set forth in the Citicorp!Morgan!
Bankers Trust Order. 5 Accordingly, the Board has
determined to approve the proposals subject to all of
the terms and conditions established in the Citicorp!
Morgan!Bankers Trust Order. The Board hereby
adopts and incorporates herein by reference the reasoning and analysis contained in the Citicorp!Morgan!
Bankers Trust Order. The Board's approval in this
case is limited to underwriting and dealing in securities
representing an interest in or backed by a diversified
pool of loans to or receivables from individuals for the
purpose of financing the purchase of consumer goods
and services.
The Board's approval of these proposals extends
only to activities conducted within the limitations of
section 225.25(b)(16) of the Board's Regulation Y and
the Citicorp!Morgan!Bankers Trust Order, including
the Board's reservation of authority to establish additional limitations to ensure that the subsidiaries activities are consistent with safety and soundness, conflict
of interest and other relevant considerations under the
BHC Act. Underwriting and dealing in the approved
securities in any manner other than as approved in that
Order 6 is not within the scope of the Board's approval
and is not authorized for the underwriting subsidiaries.
ing standards designed to eliminate high risk accounts); whether the
originators have low levels of delinquency and loss performance; the
structural characteristics of the transaction; and the credit enhancement to protect investors. "Asset-Backed Securitization CreditReview," Standard & Poor's CreditWeek (March 16, 1987).
5. For the reasons set forth in the Citicorp!Morgan/Bankers
Trust
Order, the Board concludes that the Applicants' proposals to underwrite and deal in CRRs through their underwriting subsidiaries would
not result in a violation of the Glass-Steagall Act, provided these
subsidiaries derive no more than 5 percent of their total gross
revenues from underwriting and dealing in the approved bank-ineligible securities, including CRRs, over any two-year period, and their
underwriting and dealing activities do not exceed 5 percent of the
market for each particular type of security involved during the
previous calendar year. With respect to the market limitation established in that Order, the Board believes it is appropriate to treat CRRs
and 1-4 family mortgage-related securities as a single category for the
time being, in view of the similarity between CRRs and these
mortgage-related securities.
6. The underwriting subsidiaries may also provide services that are
necessary incidents to the approved activities. The incidental services
should be taken into account in computing the gross revenue and
market share limits on the underwriting subsidiaries' ineligible underwriting and dealing activities, to the extent such limits apply to
particular incidental activities.
Legal Developments
As the Board noted in the CiticorplMorganlBankers
Trust Order, Congress has under consideration legislation that would prohibit Board approval of underwriting applications, such as these, between March 6, 1987
and March 1, 1988. While this moratorium legislation
has not yet been enacted into law, the Board calls to
Applicants' attention that they may be required by
subsequent Congressional action to cease their underwriting and dealing activities approved in this Order.
The Board retains jurisdiction over the applications to
act to carry out the requirements of any legislation
adopted by Congress that would affect Applicants'
conduct of underwriting and dealing activities under
this Order and the BHC Act.
The Board's determination is subject to all of the
conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder.
The Board notes that the SIA has sought judicial
review in the U.S. Court of Appeals for the Second
Circuit of the CiticorplMorganlBankers Trust Order as
well as subsequent Board Orders approving the underwriting applications of Chemical, Chase, Manufacturers Hanover and Security Pacific to which this Order
pertains. The Board notes that the court has stayed the
effectiveness of the Board Orders pending judicial
review. In light of the pendency of this litigation, the
Board has determined that this Order should be stayed
for such time as the stay of the prior decisions is
effective.
By order of the Board of Governors, effective
July 14, 1987.
Voting for this action: Governors Johnson, Seger, and
Kelley. Voting against this action: Chairman Volcker and
Governor Angell. Absent and not voting: Governor Heller.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Dissenting Statement of Chairman Volcker and
Governor Angell
As a matter of policy, we believe that bank holding
companies should be permitted to underwrite and deal
in consumer-receivable-related securities within the
limitations established by the Board, and we would
approve these proposals in subsidiaries other than
subsidiaries whose predominant activity was underwriting and dealing in government securities. Howev
735
er, for the reasons set forth in our dissenting statement
in the CiticorplMorganlBankers Trust Order, we regret we are unable to join the majority in approving
these applications to engage in the activity through
government securities affiliates.
July 14, 1987
Manufacturers National Corporation
Detroit, Michigan
Order Approving Expansion of Activities of Trust
Company to Include Deposit-Taking and Consumer
Lending
Manufacturers National Corporation, Detroit, Michigan, a bank holding company within the meaning of
the Bank Holding Company Act (12 U.S.C. § 1841
et seq.) (the "BHC Act" or "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(a)(1) of the
Board's Regulation Y (12 C.F.R. § 225.23(a)(1)), to
expand the activities of its subsidiary, Manufacturers
National Trust Company of Florida, North Palm
Beach, Florida ("Company"), to include the acceptance of savings, time, and demand deposits and the
making of consumer loans. These activities have been
previously determined by the Board to be closely
related to banking. 12 C.F.R. § 225.25(b)(1); U.S.
Trust Corporation, 70 FEDERAL RESERVE BULLETIN
371 (1984).
Notice of the application, affording an opportunity
for interested persons to comment, has been published
(52 Federal Register 9,541 (1987)). 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 4(c)(8) of the
Act (12 U.S.C. § 1843(c)(8)).
Applicant, with total consolidated assets of $7.7
billion,1 is the fourth largest commercial banking organization in Michigan. Company is a national banking
organization chartered by the Office of the Comptroller of the Currency ("OCC") in 1984 as a limitedpurpose trust company. It engages in activities normally performed by a trust company, such as the
provision of fiduciary, investment advisory, agency
and custody services. Its original charter did not
authorize Company to engage in deposit-taking or
lending activities.
1. Asset data are as of March 31, 1987.
736
Federal Reserve Bulletin • September 1987
Company now proposes to expand its trust company
activities to offer various forms of savings, time, and
demand deposits. Company also intends to offer loans
to individuals for personal, family, household, or
charitable purposes. Company has received the permission of the OCC to engage in the proposed expanded list of activities.
Applicant has stated that because Company will not
engage in the business of making commercial loans,
Company will not be a "bank" as defined in section 2
of the BHC Act, 2 and thus Board approval of the
application is not barred by the interstate banking
limitations of the Douglas Amendment to the BHC
Act. 3
In approving an application by U.S. Trust Corporation to expand the powers of its Florida trust company
subsidiary to include certain deposit-taking and consumer lending activities, the Board concluded that a
bank holding company could acquire, on an interstate
basis, a nationally chartered nonbank bank that would
accept demand deposits but not make commercial
loans. 4 The Board's determination has been upheld in
a decision by the U.S. Court of Appeals for the
Eleventh Circuit.5
State Law
Considerations
In approving an application by Chemical New York
Corporation ("Chemical"), to expand the powers of
its Florida trust company subsidiary to include certain
2. The BHC Act defines the term "bank" to include any institution
chartered under the laws of the United States or any state that accepts
deposits that the depositor has a legal right to withdraw on demand
and that engages in the business of making commercial loans.
12 U.S.C. § 1841(c). An institution that is chartered as a bank but that
does not perform one of the two essential functions required for
"bank" status under the BHC Act has been referred to as a "nonbank
bank."
3. 12 U.S.C. § 1842(d). The Douglas Amendment prohibits Board
approval of an application by a bank holding company to acquire a
bank outside the holding company's home state unless the state in
which the bank is located has by statute authorized the acquisition.
The Douglas Amendment applies only to the acquisition of banks as
defined in the Act and has no applicability in the case of nonbanking
companies. Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 47,
49 (1980).
4.
U.S.
Trust
Corporation,
7 0 FEDERAL RESERVE B U L L E T I N 3 7 1
(1984) ("U.S. Trust"). Applicant states that Company's excess funds
will be invested in investment securities permitted for national banks
under 12 U.S.C. section 24 (seventh). Applicant further has committed that Company will not channel funds into any commercial lending
affiliate of Company. Accordingly, it appears that Company will not
engage in the business of making commercial loans, either directly or
indirectly.
5. Florida Dept. of Banking & Finance v. Board of Governors, 760
F.2d 1135 (11th Cir. 1985), vacated and remanded for further consideration in light of Dimension
U.S
, 106 S. Ct. 875 (1986), on
remand, 800 F.2d 1534 (11th Cir. 1986), cert, denied, 55 U.S.L.W.
3706 (U.S. April 21, 1987) (No. 86-1024).
deposit-taking and consumer lending activities,6 the
Board considered a 1984 Florida statute that prohibits
the acquisition of nonbank banks in Florida. 7 The
statute generally prevents a bank holding company,
whether headquartered in Florida or outside Florida,
from acquiring an institution located in Florida that
takes deposits insured by the FDIC unless the institution qualifies as a "bank" under the BHC Act. In
addition, the statute prohibits a nonbanking company
from acquiring a bank in Florida unless the company is
a bank holding company. In the Chemical Order, the
Board concluded that the Florida statute, as it applies
to bank holding companies, was not consistent with
the Commerce Clause of the U.S. Constitution and
was not authorized under the Douglas Amendment to
the BHC Act. Thus, for the reasons explained in the
Board's Order in Chemical, the Board concludes that
the Florida statute does not bar Board approval of this
application under the BHC Act.8
Limitations
on Nonbank
Banks
Applicant intends to operate Company as a nonbank
bank in accordance with the Board's U.S. Trust decision. As in the U.S. Trust case, the Board believes it is
appropriate to take action to ensure that Company is
not used as a vehicle for evasion of the Act's bank
definition. In U.S. Trust, the Board conditioned its
approval on the following limitations and is likewise
requiring them in this proposal:
1. Applicant will not operate the demand-deposit
taking activities of the nonbank bank in tandem
with any other subsidiary or other financial institution;
2. Applicant will not link in any way the demand
deposit and commercial lending services that define a bank under the Act; and
3. The nonbank bank will not engage in any
transactions with affiliates, other than the payment of dividends to Applicant or the infusion of
capital by Applicant into the nonbank bank, without the Board's approval.
In the Board's view, these conditions preclude the
type of linked or integrated operations that could
otherwise render Company a bank for purposes of the
Act. On the basis of Applicant's proposed adherence
6 . Chemical
New
York
Corporation,
7 3 FEDERAL RESERVE B U L L E -
TIN 731 (Order dated May 29, 1987).
7. Fla. Stat. Ann. § 658.296 (West 1984 and Supp. 1987).
8. The Board notes that Chemical brought an action in the U.S.
District Court for the Northern District of Florida on June 1, 1987,
challenging the constitutionality of the Florida law.
Legal Developments
to these conditions and for the reasons set out more
fully in the Board's decision in U.S. Trust, the Board
concludes that Company will not be a bank as that
term is defined in the Act.
Applicant has requested Board approval pursuant to
the third U.S. Trust condition to engage in certain
transactions with affiliates. Applicant, through its lead
bank, Manufacturers National Bank, currently provides certain services to Company on an arm's-length
basis, and has requested that it be permitted to continue to provide these services upon consummation of
the proposal. They involve securities custodial arrangements, investment advisory services, as well as
certain internal support services. These services are
conducted in such a manner that customers of Company would not have direct contact with Applicant or
any of its affiliates providing the services.
In the Chemical proposal, the Board permitted
Chemical to conduct these activities. For the reasons
stated in the Board's Chemical Order, the Board has
determined that it is appropriate to permit Applicant to
conduct these activities.
The Board finds no evidence that consummation of
this proposal, subject to the limitations and conditions
described above, would result in any conflicts of
interest, unfair competition, unsound banking practices or other adverse effects. Due to the de novo
nature of this proposal, there will not be any decrease
in competition. Indeed, consummation of the proposal
may reasonably be expected to result in increased
competition.
Need for Congressional
Action
The Board has previously indicated its reluctance to
approve nonbank bank acquisitions in view of the
potential presented by such acquisitions to alter significantly the nation's banking structure without Congressional action on the underlying policy issues. 9 For
the reasons stated in the Board's previous orders, the
Board continues to believe that Congressional action
to close the nonbank bank loophole is imperative. The
fact that the Board is required by the technical aspects
of the bank definition in the BHC Act to approve this
application should not be construed as encouragement
to Applicant to consummate this proposal or to others
to pursue similar acquisitions.
In this regard, the Board notes that the United
States Senate has recently passed legislation that
would eliminate the nonbank bank loophole in the
BHC Act by redefining the term "bank" to include
9. See, e.g., U.S. Trust,
supra.
737
FDIC-insured banks. 10 While this legislation has not
yet been enacted, the Board calls to Applicant's
attention that it may be required by subsequent Congressional action to limit the activities of Company.
The Board retains jurisdiction over the application to
act to carry out the requirements of any legislation
adopted by Congress that would affect Company's
activities.
Based upon the foregoing and other facts of record,
the Board has determined that the Florida statute, as it
applies to bank holding companies seeking to acquire
nonbank banks in Florida, is inconsistent with the
Commerce Clause and is not a bar to approval of this
application, and that the balance of public interest
factors the Board is required to consider under section
4(c)(8) of the Act is favorable. Accordingly, the application is hereby approved. Consummation of the proposal is subject to the conditions set forth in this Order
and the conditions set forth in the Board's Regulation
Y, including those in sections 225.4(d) and 225.23(b).
In addition, Company may not engage directly or
indirectly in any activity other than those explicitly
approved by the Board in this Order. 11
Approval is also subject to the Board's authority to
require modification or termination of the activities of
the holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with the
provisions and purposes of the Act and the Board's
regulations and orders issued thereunder, or to prevent evasion thereof. The activity shall be commenced
not later than three months after the effective date of
this Order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Chicago, pursuant to delegated authority. In accordance with the provisions of section 225.23(b)(iii) of
Regulation Y, the Board's approval is required for
additional acquisitions by Applicant of nonbank banks
or for the establishment of offices of Company located
in a state other than Florida.
By order of the Board of Governors, effective
July 1, 1987.
V o t i n g for this a c t i o n : C h a i r m a n V o l c k e r and G o v e r n o r s
S e g e r , A n g e l l , and K e l l e y . A b s e n t and not voting: G o v e r n o r s
J o h n s o n and H e l l e r .
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
10. S.790 (The Competitive Equality Banking Act of 1987), 100th
Cong., 1st Sess. (1987).
11. In this regard, the Board notes that because Company is not
considered a bank under the BHC Act, the provisions of section
225.22(d)(1) of Regulation Y would not be applicable to exempt the
acquisition or activities of Company from Board approval under
section 4 of the Act.
738
Federal Reserve Bulletin • September 1987
Marine Midland Banks, Incorporated
Buffalo, N e w York
Order Conditionally Approving Application to
Underwrite and Deal in Certain Securities to a
Limited Extent
Marine Midland Banks, Incorporated, Buffalo, New
York, a bank holding company within the meaning of
the Bank Holding Company Act, 12 U.S.C. § 1841
et seq. ("BHC Act"), and parent bank holding companies: The Hongkong and Shanghai Banking Corporation, Hong Kong, B.C.C.; Kellett N.V., Curacao,
Netherlands Antilles; and HSBC Holdings B.V., Amsterdam, The Netherlands; have applied for the
Board's approval under section 4(c)(8) of the BHC Act
and section 225.21(a) of the Board's Regulation Y,
12 C.F.R. § 225.21(a), to engage through a wholly
owned subsidiary, Marine Midland Capital Markets
Corporation ("Company"), in underwriting and dealing in, on a limited basis, the following securities:
(1) municipal revenue bonds, including certain industrial development bonds;
(2) residential mortgage-related securities;
(3) consumer-receivable-related securities ("CRRs");
and
(4) commercial paper. 1
In addition, Applicants have applied for approval
under section 4(c)(8) of the BHC Act for Company to
underwrite and deal in U.S. government and agency
and state and municipal securities that state member
banks are authorized to underwrite and deal in under
section 16 of the Banking Act of 1933 (the "GlassSteagall Act") (12 U.S.C. § 24 Seventh) (hereinafter
"bank-eligible securities"). Company would engage in
the proposed underwriting and dealing activities
through offices in New York, New York.
Marine Midland Banks, Incorporated, with consolidated assets of $22.2 billion,2 is the nineteenth largest
banking organization in the nation. It operates two
banking subsidiaries in New York and Delaware and
engages in a broad range of permissible nonbanking
activities in the United States and abroad.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (52 Federal Register 17,829
(1987)). The Securities Industry Association ("SIA"),
a trade association of the investment banking industry,
opposes the application for the reasons stated in its
earlier protests to similar applications by Citicorp, J.P.
Morgan & Co. Incorporated and Bankers Trust New
York Corporation. The Bank Capital Markets Association commented in favor of the application.
The Board has previously determined that underwriting and dealing in bank-eligible securities is closely
related to banking under section 4(c)(8) of the BHC
Act. 12 C.F.R. § 225.25(b)(16). In addition, the Board
concludes that Company's performance of this activity
may reasonably be expected to result in public benefits
which would outweigh adverse effects under the proper incident to banking standard of section 4(c)(8) of the
BHC Act. Accordingly, Applicants may engage
through Company in underwriting and dealing in bankeligible securities to the extent that state member
banks are authorized by section 16 of the GlassSteagall Act.
On April 30, the Board approved applications by
Citicorp, J.P. Morgan and Bankers Trust to underwrite and deal in, through their bank-eligible securities
underwriting subsidiaries, 1-4 family mortgagebacked securities, municipal revenue bonds (and certain industrial development bonds) and (except for
Citicorp) commercial paper. 3 The Board concluded
that the underwriting subsidiaries would not be "engaged principally" in underwriting or dealing in securities within the meaning of section 20 of the GlassSteagall Act4 provided they derived no more than 5
percent of their total gross revenues from underwriting
and dealing in the approved securities over any twoyear period and their underwriting and dealing activities did not exceed 5 percent of the market for each
particular type of security involved. The Board further
found that, subject to the prudential framework of
limitations established in those cases to address the
potential for conflicts of interest, unsound banking
practices or other adverse effects, the proposed underwriting and dealing activities were so closely related to
banking as to be a proper incident thereto within the
3. CiticorplMorganlBankers
Trust, supra. The Board subsequently
approved similar applications by a number of other bank holding
companies. Chemical New York Corporation, 73 FEDERAL RESERVE
BULLETIN 616 (1987); The Chase Manhattan Corporation, 73 FEDERAL RESERVE BULLETIN 607 (1987); Citicorp (to underwrite and deal in
commercial
Manufacturers
1. Applicant proposes to limit Company's underwriting and dealing
activity in these securities in the same manner and to the same extent
as proposed by Bankers Trust in its application to underwrite and deal
in these securities. See Citicorp, J.P. Morgan & Co.
Incorporated,
Bankers Trust New York Corporation, 73 FEDERAL RESERVE BULLETIN 4 7 3 , 4 7 7 n . l l
(1987).
2. Banking data are as of December 31, 1986.
paper),
73
Hanover
FEDERAL
Corporation,
RESERVE
BULLETIN
618
(1987);
7 3 F E D E R A L RESERVE B U L L E -
TIN 620 (1987); Security Pacific Corporation, 73 FEDERAL RESERVE
BULLETIN 622 (1987); and PNC Financial Corporation, 73 FEDERAL
RESERVE BULLETIN 742 (Order dated July 1, 1987).
4. Section 20 of the Glass-Steagall Act (12 U.S.C. § 377) prohibits
the affiliation of a member bank with "any corporation . . . engaged
principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through syndicate participation of
stocks, bonds, debentures, notes, or other securities . . . ."
Legal Developments
meaning of section 4(c)(8) of the BHC Act. On July 14,
the Board subsequently decided that underwriting and
dealing in CRRs is so closely related to banking as to
be a proper incident thereto within the meaning of
section 4(c)(8) of the BHC Act. 5
For the reasons set forth in the Board's Citicorp!
Morgan!Bankers Trust and Chemical Orders, the
Board concludes that Applicants' proposal to engage
through Company in underwriting and dealing in municipal revenue bonds, 6 1-4 family mortgage-related
securities, commercial paper and consumer-receivable-related securities would not result in a violation of
section 20 of the Glass-Steagall Act and is closely
related and a proper incident to banking within the
meaning of section 4(c)(8) of the BHC Act provided
Applicants limit Company's activities as provided in
those Orders. Accordingly, the Board has determined
to approve the underwriting application subject to all
of the terms and conditions established in the Citicorp!
Morgan!Bankers Trust and Chemical Orders. The
Board hereby adopts and incorporates herein by reference the reasoning and analysis contained in those
Orders.
The Board's approval of this application extends
only to activities conducted within the limitations of
section 225.25(b)(16) of the Board's Regulation Y and
the Citicorp!Morgan!Bankers Trust and Chemical Orders, including the Board's reservation of authority to
establish additional limitations to ensure that the subsidiary's activities are consistent with safety and
soundness, conflict of interest and other relevant
considerations under the BHC Act. Underwriting and
dealing in the approved securities in any manner other
than as approved in those Orders7 is not within the
scope of the Board's approval and is not authorized for
Company.
As the Board noted in the Citicorp/Morgan/Bankers
Trust Order, Congress has under consideration legisla-
739
tion that would prohibit Board approval of an underwriting application, such as this, between March 6,
1987 and March 1, 1988. While this moratorium legislation has not yet been enacted into law, the Board calls
to Applicants' attention that they may be required by
subsequent Congressional action to cease their underwriting and dealing activities approved in this Order.
The Board retains jurisdiction over the application to
act to carry out the requirements of any legislation
adopted by Congress that would affect Applicants'
conduct of underwriting and dealing activities under
this Order and the BHC Act.
The Board's determination is subject to all of the
conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder.
The Board notes that the SIA has sought judicial
review in the U.S. Court of Appeals for the Second
Circuit of the Citicorp!Morgan/Bankers Trust Order as
well as subsequent Board orders approving the underwriting applications of a number of other bank holding
companies. The Board notes that the court has stayed
the effectiveness of the Board Orders pending judicial
review. In light of the pendency of the litigation, the
Board has determined that this Order should be stayed
for such time as the stay of the prior decisions is
effective.
By order of the Board of Governors, effective
July 14, 1987.
Voting for this action: Governors Johnson, Seger, and
Kelley. Voting against this action: Chairman Volcker and
Governor Angell. Absent and not voting: Governor Heller.
JAMES M C A F E E
[SEAL]
5. Chemical New York Corporation, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp,
Manufacturers Hanover Corporation,
and Security Pacific Corporation,
73
FEDERAL RESERVE BULLETIN 731 (Order dated July 14, 1987) (hereinafter the "Chemical Order").
6. The industrial development bonds approved in those applications and for Applicants in this case are only those tax exempt bonds
in which the governmental issuer, or the governmental unit on behalf
of which the bonds are issued, is the owner for federal income tax
purposes of the financed facility (such as airports, mass commuting
facilities, and water pollution control facilities). Without further
approval from the Board, Company may underwrite or deal in only
these types of industrial development bonds.
7. Company may also provide services that are necessary incidents
to these approved activities. The incidental services should be taken
into account in computing the gross revenue and market share limits
on the underwriting subsidiaries' ineligible underwriting and dealing
activities, to the extent such limits apply to particular incidental
activities.
Associate Secretary of the Board
Dissenting Statement of Chairman Volcker and
Governor Angell
For the reasons set forth in our dissenting statement in
the Citicorp!Morgan!Bankers Trust Order and the Order approving the applications of a number of bank
holding companies to engage in underwriting and
dealing in consumer-receivable-related securities, we
regret we are unable to join the majority in approving
this application.
July 14, 1987
740
Federal Reserve Bulletin • September 1987
MNC Financial, Inc.
Baltimore, Maryland
Order Approving Application to Retain Insurance
Agency Activities
MNC Financial, Inc., Baltimore, Maryland, a registered bank holding company within the meaning of the
Bank Holding Company Act ("BHC Act") (12 U.S.C.
§ 1841 et seq.), has applied for the Board's approval
under section 4(c)(8)(D) of the BHC Act (12 U.S.C.
§ 1843(c)(8)(D)) and section 225.25(b)(8)(iv) of Regulation Y (12 C.F.R. § 225.25(b)(8)(iv)) to retain the insurance agency activities of its subsidiary, American
Security Corporation, Washington, D.C. ("Company"), which is also a bank holding company. These
activities primarily include comprehensive lines of
property and casualty insurance and exclude general
life insurance sales. Company currently conducts
these insurance activities in the District of Columbia
and Virginia through an unincorporated division, and
in Maryland, through a separate subsidiary corporation, American Security Insurance Corporation of
Maryland ("ASI").
Applicant is the largest commercial banking organization in Maryland with 19.4 percent of the total
deposits in commercial banks in that state. Applicant's
lead bank subsidiary operates 203 branch offices in
Maryland and controls total domestic deposits of $5.2
billion. Applicant, through Company, is the second
largest commercial banking organization in the District
of Columbia, with 24.7 percent of the total deposits in
commercial banks there. Applicant's sole bank subsidiary in the District of Columbia operates 31 branches
and controls total domestic deposits of $2.5 billion.1
Applicant also engages through wholly owned subsidiaries in various nonbanking activities which the Board
previously has determined are permissible for bank
holding companies.
On February 13, 1987, the Board approved Applicant's application under section 3 of the BHC Act to
acquire Company, subject to the condition that it
divest within two years certain otherwise impermissible nonbanking activities previously conducted by
Company pursuant to grandfather privileges granted
under section 4(a)(2) of the BHC Act. 2 The Board
1. State deposit data are as of December 31, 1986, and exclude
Applicant's credit card bank in Delaware.
2. Maryland
National
Corporation,
7 3 FEDERAL RESERVE B U L L E -
TIN 310 (1987). The Board concluded that grandfather rights under
section 4(a)(2) of the BHC Act accrue only to one-bank holding
companies, like Company, that first became subject to the BHC Act
by enactment of the 1970 Amendments, and that MNC is not such a
company. 12 U.S.C. § 1843(a)(2).
noted, however, that it would not require divestiture
of all nonbanking operations if, within that two-year
interval, Applicant secured approval under section
4(c)(8) of the BHC Act to retain any of Company's
previously grandfathered activities. Soon thereafter,
Applicant filed this application for approval to retain
Company's and ASI's general insurance agency activities pursuant to Title VI of the Garn-St Germain
Depository Institutions Act of 1982 ("Garn-St Germain Act"), codified at sections 4(c)(8)(A) through (G)
of the BHC Act. (12 U.S.C. §§ 1843(c)(8)(A) through
(G)).
Notice of this application, affording opportunity for
interested persons to submit comments, has been duly
published (52 Federal Register 9,215 (1987)). The time
for filing comments has expired, and the Board has
considered the application and all comments received 3
in light of the public interest factors set forth in section
4(c)(8) of the BHC Act.
Title VI of the Garn-St Germain Act amended the
nonbanking prohibitions in section 4 of the BHC Act
to provide that insurance agency and underwriting
activities are not permissible for bank holding companies. Title VI provided seven specific exceptions to
this prohibition, however, including grandfather rights
under one of the exemptions for "any insurance
agency activity which was engaged in by the bank
holding company or any of its subsidiaries on May 1,
1982" (hereinafter "exemption D"), 12 U.S.C.
§ 1843(c)(8)(D).4 Applicant claims that Company and
ASI were engaged lawfully in general insurance agency activities on May 1, 1982, the applicable grandfather date under exemption D, and that Company and
ASI therefore may be permitted to continue these
insurance agency operations even after their recent
acquisition by Applicant.
Protestants argue that Company and ASI were not
engaged lawfully in insurance on May 1, 1982, because
they never received formal Board approval pursuant
to an application filed under section 4(c)(8) of the BHC
Act. Protestants argue that exemption D extends only
to credit-related property and casualty insurance, and
limits subsequent activities to those states where such
3. The Board received comments in opposition to Applicant's
proposal from the Independent Insurance Agents of America, Inc.;
National Association of Life Underwriters; National Association of
Professional Insurance Agents; National Association of Casualty &
Surety Agents; and National Association of Surety Bond Producers
("Protestants").
4. On October 3, 1986, the Board amended Regulation Y to include
the insurance agency activities delineated in the seven exemptions to
the Garn-St Germain Act in the list of activities that the Board has
found to be closely related to banking within the meaning of section
4(c)(8) of the Act and thus permissible for bank holding companies. 51
Federal Register 36,201 (1986), codified at 12 C.F.R. § 225.25(b)(8)
(1987).
Legal Developments
insurance was conducted on the grandfather date. In
any event, Protestants contend that exemption D
rights expire upon the acquisition of a grandfathered
company by another bank holding company.
Eligibility under Exemption D. The record demonstrates that on May 1, 1982, Company and AS I were
engaged lawfully in general insurance agency activities. Company and ASI therefore meet the literal
qualifications for grandfather rights under exemption
D. Company began conducting a general insurance
agency in the District of Columbia and Virginia in
1957, and in Maryland in 1978. In 1976, the Board
determined that Company was entitled to conduct
these activities by virtue of grandfather rights granted
under section 4(a)(2) of the BHC Act to bank holding
companies, such as Company, which were brought
within the coverage of the BHC Act by enactment of
the 1970 Amendments. 12 U.S.C. § 1843(a)(2).5 ASI,
Company's insurance subsidiary in Maryland, was
established pursuant to section 4(c)(ll) of the BHC
Act, which allows any banking organization that qualifies for grandfather rights under the 1970 Amendments
to establish a subsidiary company, as long as the new
company engages only in activities permitted for its
grandfathered
parent
organization.
12 U.S.C.
§ 1843(c)(ll). The insurance activities of Company
and ASI in Virginia, Maryland and the District of
Columbia therefore are eligible for exemption D grandfather privileges. As the Board determined in the
Sovran case, 6 neither the language of exemption D nor
its legislative history supports Protestants' contention
that grandfather privileges under exemption D are
limited to credit-related property and casualty insurance or to activities previously approved by Board
order under section 4(c)(8) of the BHC Act.
Retention of Grandfather Privileges. In its Sovran
decision, the Board also concluded that any company
that is entitled to engage in insurance agency activities
under exemption D does not lose those rights upon its
acquisition by another bank holding company, provided that the grandfathered entity retains its separate
corporate structure, and its insurance activities are not
conducted by other companies within the acquiring
banking organization. 7 In the instant case, following
its acquisition by Applicant, Company would remain
as a separate bank holding company, and ASI would
remain a separate nonbank subsidiary thereof, and
their grandfathered insurance activities would not be
5. See American Security Corporation, Order dated July 21, 1976.
6. Sovran Financial Corporation, Order dated June 29, 1987.
7. See also, BankAmerica
Corporation,
69 FEDERAL RESERVE
BULLETIN
5 6 8 ( 1 9 8 3 ) ; Fuji
BULLETIN 5 0 ( 1 9 8 3 ) .
Bank,
Limited,
6 9 FEDERAL
RESERVE
741
conducted by Applicant or other entities within Applicant's organization. Company and ASI therefore may
retain their exemption D grandfather privileges after
acquisition by Applicant. 8
Geographic Scope of Activities. Under the terms of
section 4(c)(8)(D),9 however, Company and ASI may
continue to conduct grandfathered insurance activities
only in Company's home state, the District of Columbia, the adjacent states of Maryland and Virginia, and
any other state in which either Company or ASI was
engaged in insurance activities on May 1, 1982. Contrary to Applicant's view, then, the scope of grandfather authority granted to Company and ASI does not
extend nationwide. 10 The facts of record show that
Company and ASI have confined their grandfathered
insurance operations to the District of Columbia,
Virginia and Maryland, and that neither Company or
ASI has ever received approval from the insurance
commission in any other state to conduct insurance
operations. Because Company and ASI were authorized on May 1, 1982, to engage in insurance only in
the District of Columbia, Virginia and Maryland, they
may not now expand their grandfathered insurance
activities under exemption D to other states.
Proper Incident to Banking. In considering any
application under section 4(c)(8) of the BHC Act, the
Board must determine whether the proposed activity
is a proper incident to banking; that is, whether
performance of the activity can reasonably be expected to produce benefits to the public that outweigh
possible adverse effects. As a result of Applicant's
proposal, consumers in the District of Columbia, Virginia and Maryland would benefit from ongoing access
to Company and ASI as a source of insurance products
and services. The continuation of grandfathered operations by Company and ASI thus would serve to
8. The Board incorporates herein by reference the findings and
analysis in its Sovran decision regarding the types of insurance agency
activities covered by exemption D and regarding the retention of
grandfather privileges under exemption D following acquisition of the
grandfathered company by another banking organization.
9. Specifically, exemption D limits the geographic scope of permitted activities to:
sales of i n s u r a n c e at n e w locations of the s a m e b a n k holding c o m p a n y or the
same subsidiary or subsidiaries with r e s p e c t t o which i n s u r a n c e was sold on
May 1, 1982, or a p p r o v e d t o be sold on or b e f o r e M a y 1, 1982, if such new
locations are confined t o the State in which the principal place of business of
the bank holding c o m p a n y is located, any State or States immediately
a d j a c e n t to such S t a t e , a n d any State or States in which i n s u r a n c e activities
were c o n d u c t e d by the b a n k holding c o m p a n y or any of its subsidiaries on
May 1, 1982, or were a p p r o v e d to be c o n d u c t e d by the bank holding c o m p a n y
or any of its subsidiaries on or b e f o r e May 1, 1982.
10. This conclusion is unaltered by the absence of a geographic
limitation in the Board's July 21, 1976 Order regarding Company's
section 4(a)(2) grandfather privileges. Applicant has applied to retain
the insurance activities under section 4(c)(8)(D), which limits the
geographic scope of the activities conducted. As noted, Applicant's
application to retain Company's insurance activities under section
4(a)(2) was denied by the Board.
742
Federal Reserve Bulletin • September 1987
maintain existing business relationships and expectations, and also would preserve Company and ASI as
viable competitors in the insurance agency industry.
Conversely, there is no evidence to suggest that Applicant's proposal would result in undue concentration of
resources, unfair or decreased competition, conflicts
of interest or other adverse effects. The balance of
public interest factors therefore is favorable in terms
of Company's and ASI's ability to continue their
grandfathered insurance operations in the District of
Columbia, Virginia and Maryland following acquisition by Applicant.
Based on the foregoing and other facts of record, the
Board has determined that the application under section 4 should be, and hereby is, approved. This
determination is subject to all of the conditions set
forth in Regulation Y, and provided that the insurance
activities are conducted solely by Company and ASI,
which must remain as independent subsidiaries of
Applicant. It is also subject to the Board's authority to
require such modifications or termination of activities
of the bank holding company or any of its subsidiaries
as the Board finds necessary to assure compliance
with, and prevent evasions of, the provisions and
purposes of the Act and the Board's regulations and
orders issued thereunder.
By order of the Board of Governors, effective
July 2, 1987.
V o t i n g for this action: Chairman V o l c k e r and G o v e r n o r s
J o h n s o n , S e g e r , A n g e l l , a n d K e l l e y . A b s e n t and not voting:
G o v e r n o r Heller.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
PNC Financial Corp
Pittsburgh, Pennsylvania
Order Conditionally Approving Application to
Underwrite and Deal in Certain Securities to a
Limited Extent
PNC Financial Corp, Pittsburgh, Pennsylvania, a bank
holding company within the meaning of the Bank
Holding Company Act, 12 U.S.C § 1841 et seq.
("BHC Act"), has applied for the Board's approval
under section 4(c)(8) of the BHC Act and section
225.21(a) of the Board's Regualtion Y, 12 C.F.R
§ 225.21(a), to engage through a wholly owned subsidiary, PNC Investment Company, Pittsburgh , Pennsylvania ("Company"), in underwriting and dealing in,
on a limited basis, municipal revenue bonds, including
certain industrial development bonds, and commercial
paper. 1
In addition, Applicant has applied under section 4(c)
(8) of the BHC Act for Company to underwrite and
deal in U.S. government and agency and state and
municipal securities that state member banks are authorized to underwrite and deal in under section 16 of
the Banking Act of 1933 (the "Glass-Steagall Act")
(12 U.S.C. §§ 24 Seventh and 335) (hereinafter "eligible securities"). Company would engage in the proposed underwriting and dealing activities through offices in Pittsburgh.
Applicant, with consolidated assets of $27.0 billion,2
is the twenty-second largest banking organization in
the nation. It operates 17 subsidiary banks in Pennsylvania, Kentucky, Indiana and Delaware and engages
in a broad range of permissible nonbanking activities
in the United States.
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been published (52 Federal Register 13,757
(1987)). The Board received two comments on the
proposal. The Securities Industry Association
("SIA"), a trade association of the investment banking industry, opposes the application for the reasons
stated in its earlier protests to similar applications by
Citicorp, J.P. Morgan & Co. Incorporated and Bankers Trust New York Corporation. The Bank Capital
Markets Association commented in favor of the application.
The Board has previously determined that underwriting and dealing in eligible securities is closely
related to banking under section 4(c)(8) of the BHC
Act. 12 C.F.R. § 225.25(b)(16). In addition, the Board
concludes that Company's performance of this activity
may reasonably be expected to result in public benefits
which would outweigh adverse effects under the proper incident to banking standard of section 4(c)(8) of the
BHC Act. Accordingly, Applicant may engage
through Company in underwriting and dealing in eligible securities to the extent that state member banks
are authorized by section 16 of the Glass-Steagall Act.
On April 30, the Board approved applications by
Citicorp, J.P. Morgan and Bankers Trust to underwrite and deal in, through their eligible securities
underwriting subsidiaries, 1-4 family mortgagebacked securities, municipal revenue bonds (and certain industrial development bonds) and (except for
1. Applicant proposes to limit Company's underwriting and dealing
activity in these securities in the same manner and to the same extent
as proposed by J.P. Morgan in its application to underwrite and deal in
these securities as well as mortage-backed securities. See Citicorp!
J.P. Morgan & Co. Incorporated/Bankers
Trust New York Corporation,
7 3 F E D E R A L RESERVE B U L L E T I N 4 7 3 , 4 7 7 n . l l
2. Banking data are as of March 31, 1986.
(1987).
Legal Developments
Citicorp) commercial paper. 3 The Board concluded
that the underwriting subsidiaries would not be "engaged principally" in underwriting or dealing in securities within the meaning of section 20 of the GlassSteagall Act4 provided they derived no more than 5
percent of their total gross revenues from underwriting
and dealing in the approved securities over any twoyear period and their underwriting and dealing activities did not exceed 5 percent of the market for each
particular type of security involved. The Board further
found that, subject to the prudential framework of
limitations established in those cases to address the
potential for conflicts of interest, unsound banking
practices or other adverse effects, the proposed underwriting and dealing activities were so closely related to
banking as to be a proper incident thereto within the
meaning of section 4(c)(8) of the BHC Act.
For the reasons set forth in the Board's Citicorp/
Morgan/Bankers Trust Order, the Board concludes
that Applicant's proposal to engage through Company
in underwriting and dealing in municipal revenue
bonds 5 and commercial paper would not result in a
violation of section 20 of the Glass-Steagall Act and is
closely related and a proper incident to banking within
the meaning of section 4(c)(8) of the BHC Act, provided Applicant limits Company's activities as provided
in the CiticorplMorganlBankers Trust Order. Accordingly, the Board has determined to approve the underwriting application subject to all of the terms and
conditions established in the CiticorplMorganlBankers
Trust Order. The Board hereby adopts and incorporates herein by reference the reasoning and analysis
contained in the CiticorplMorganlBankers
Trust
Order.
The Board's approval of this application extends
only to activities conducted within the limitations of
section 225.25(b)(16) of the Board's Regulation Y and
the CiticorplMorganlBankers Trust Order, including
the Board's reservation of authority to establish additional limitations to ensure that the subsidiary's activi-
3. CiticorplMorganlBankers
Trust, supra. The Board subsequently
approved similar applications by Chemical New York Corporation,
The Chase Manhattan Corporation, Citicorp (to underwrite and deal
in commercial paper), Manufacturers Hanover Corporation and Security Pacific Corporation. Orders dated May 18, 1987.
4. Section 20 of the Glass-Steagall Act (12 U.S.C. § 377) prohibits
the affiliation of a member bank with "any corporation . . . engaged
principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through syndicate participation of
stocks, bonds, debentures, notes, or other securities . . . ."
5. The industrial development bonds approved in those applications and for Applicant in this case are only those tax exempt bonds in
which the governmental issuer, or the governmental unit on behalf of
which the bonds are issued, is the owner for federal income tax
purposes of the financed facility (such as airports, mass commuting
facilities, and water pollution control facilities). Without further
approval from the Board, Company may underwrite or deal in only
these types of industrial development bonds.
743
ties are consistent with safety and soundness, conflict
of interest and other relevant considerations under the
BHC Act. Underwriting or dealing in the approved
securities in any manner other than as approved in that
Order 6 is not within the scope of the Board's approval
and is not authorized for Company.
As the Board noted in the CiticorplMorganlBankers
Trust Order, Congress has under consideration legislation that would prohibit Board approval of an underwriting application, such as this, between March 6,
1987, and March 1, 1988. While this moratorium
legislation has not yet been enacted into law, the
Board calls to Applicant's attention that it may be
required by subsequent Congressional action to cease
its underwriting and dealing activities approved in this
Order. The Board retains jurisdiction over the application to act to carry out the requirements of any
legislation adopted by Congress that would affect
Applicant's conduct of underwriting and dealing activities under this Order and the BHC Act.
The Board's determination is subject to all of the
conditions set forth in the Board's Regulation Y,
including those in sections 225.4(d) and 225.23(b), and
to the Board's authority to require modification or
termination of the activities of a bank holding company or any of its subsidiaries as the Board finds
necessary to assure compliance with, and to prevent
evasion of, the provisions of the BHC Act and the
Board's regulations and orders issued thereunder.
The Board notes that the SIA has sought judicial
review in the U.S. Court of Appeals for the Second
Circuit of the CiticorplMorganlBankers Trust Order,
as well as subsequent Board Orders approving the
underwriting applications of a number of other bank
holding companies. The Board notes that the court has
stayed the effectiveness of the Board Orders pending
judicial review. In light of the pendency of the litigation, the Board has determined that this Order should
be stayed for such time as the stay of the prior
decisions is effective.
By order of the Board of Governors, effective
July 1, 1987.
Voting for this action: Governors Johnson, Seger, and
Kelley. Voting against this action: Chairman Volcker and
Governor Angell. Absent and not voting: Governor Heller.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
6. Company may also provide services that are necessary incidents
to these approved activities. The incidental services should be taken
into account in computing the gross revenue and market share limits
on the underwriting subsidiaries' ineligible underwriting and dealing
activities, to the extent such limits apply to particular incidental
activities.
744
Federal Reserve Bulletin • September 1987
Dissenting Statement of Chairman Volcker and
Governor Angell
For the reasons set forth in our dissenting statement in
the Citicorp!Morgan!Bankers Trust Order, we regret
we are unable to join the majority in approving this
application.
July 1, 1987
Sovran Financial Corporation
Norfolk, Virginia
Order Approving an Application to Provide Certain
Investment Advisory Services
Sovran Financial Corporation, Norfolk, Virginia, a
bank holding company within the meaning of the Bank
Holding Company Act of 1956, as amended (12 U.S.C.
§ 1841 et seq.) (the "Act"), has applied for the
Board's approval under section 4(c)(8) of the Act
(12 U.S.C. § 1843(c)(8)) and section 225.23 of the
Board's Regulation Y (12 C.F.R. § 225.23), to expand
the activities of its subsidiary, Sovran Investment
Corporation, Richmond, Virginia ("SIC"), to include
certain investment advisory services.1
Notice of the application, affording interested persons an opportunity to submit comments on the proposal, has been duly published (52 Federal Register
16,312 (1987)). The time for filing comments has
expired, and the Board has considered the application
and all comments received in light of the public
interest factors set forth in section 4(c)(8) of the Act.
Applicant, a multibank holding company, has total
consolidated assets of approximately $14.6 billion.2
Applicant also engages through certain subsidiaries in
other nonbanking activities permissible for bank holding companies. 3
Applicant proposes to transfer certain activities
currently being conducted by its largest subsidiary
1. SIC previously has received authorization from the Board to: (1)
provide discount securities brokerage services; (2) buy and sell, as
agent on behalf of unaffiliated persons, options on securities issued or
guaranteed by the U.S. Government and its agencies, and options on
U.S. and foreign money market instruments; (3) purchase and sell
gold and silver bullion and gold coins solely for the account of
customers; (4) underwrite and deal in government obligations and
money market instruments; (5) provide investment advice relating
solely to government obligations and money market instruments; (6)
provide certain fiduciary services; and (7) provide cash management
services.
2. Banking data are as of March 31, 1987.
3. Applicant previously has been authorized to engage through
Sovran Capital Management, Richmond, Virginia ("SCM"), in the
provision of investment or financial advice on a fee basis.
bank, Sovran Bank, N.A., to SIC and to engage in one
new activity through SIC. These activities are:
(1) acting as an investment advisor to a registered
investment company; 4
(2) providing portfolio investment advice;
(3) providing financial advice to state and local
governments;
(4) providing advice in connection with financing
transactions for non-affiliated financial and nonfinancial institutions; and
(5) providing, on an explicit fee basis, discretionary
management of short-term monies for a small number of corporate or other institutional clients.
The first three activities are permissible under Regulation Y (12 C.F.R. § 225.25(b)(4)(ii), (iii), (v)).
The Board previously has determined by Order that
the fourth activity is closely related to banking and
permissible for bank holding companies. 5 In these
cases, however, the Board noted concerns regarding
conflicts of interest and related adverse effects that
may be associated with financial feasibility studies.
Applicant has committed to abide by the conditions
established in these cases to avoid adverse effects.
Specifically, Applicant has agreed that:
(1) SIC's financial advisory activities shall not encompass the performance of routine tasks or operations for a customer on a daily or continuous basis;
(2) Disclosure will be made to each potential customer of SIC that SIC is an affiliate of Applicant;
(3) Advice rendered by SIC on an explicit fee basis
will be without regard to correspondent balances
maintained by a customer of SIC at Applicant or any
depository subsidiary of Applicant; and
(4) SIC will not make available to Applicant or any
of its subsidiaries confidential information received
from SIC's clients.
Under these conditions, the Board concludes that
Applicant's performance of financial feasibility studies
is unlikely to result in any undue concentration of
resources, decreased or unfair competition, unsound
banking practices, or other adverse effects.
The fifth activity, providing, on an explicit fee basis,
4. This is the only activity of the five activities not currently being
conducted by Sovran Bank, N . A .
5. Security Pacific Corporation (Duff & Phelps, Inc.), 71 FEDERAL
RESERVE
BULLETIN
118
(1985);
FEDERAL RESERVE B U L L E T I N
Signet
59 (1987).
Banking
In b o t h
Corporation,
Security
73
Pacific
Corporation
and Signet Banking Corporation,
a broader form of
financial feasibility studies was approved, which included providing
advice in connection with mergers, acquisitions, and divestitures, as
well as providing advice in connection with financing transactions.
Sovran has not requested authority to provide advice in connection
with mergers, acquisitions, and divestitures, only advice in connection with financing transactions.
Legal Developments
745
discretionary management of short-term monies for a
small number of corporate or other institutional clients, is a trust-type function that has been provided by
banks and that is authorized under Regulation Y
(12 C.F.R. §§ 225.25(b)(3) and (4)). The Comptroller
of the Currency specifically has concluded that accounts of this type may be managed through the
commercial department of a national bank, and such
accounts are treated as subject to Part 9 of the
Comptroller's Regulations regarding fiduciary powers
of national banks. 6
Applicant currently conducts this activity at one of
its subsidiary banks, Sovran Bank, N.A., and proposes to transfer the activity to SIC. In performing this
activity, SIC will hold funds of a particular customer in
a separate account and will not pool or commingle
such funds with any other account handled by SIC or
any affiliate of SIC. Investment criteria will be specified by each individual customer, and SIC will select
specific investments according to that criteria. The
only discretion exercised by SIC will be with regard to
choosing specific issuers within the type of investments specified by the customer and with regard to
choosing the maturity of certain investments. The
customer will be charged an explicit fee for the management which will be based on assets under management.
In order to approve this application, the Board must
also find that the performance of the proposed activity
"can reasonably be expected to produce benefits to
the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh
possible adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices." Applicant's proposal represents a corporate reorganization wherein activities currently performed by one of
its subsidiary banks, Sovran Bank, N.A., and one new
activity will be conducted by SIC. Because the proposal essentially would result in a transfer of the
activities within the same corporate structure, approval of the application would have no adverse competitive effects.
With regard to the possibility of any conflicts of
interest, SIC will register with the Securities and
Exchange Commission as a registered investment advisor in connection with this activity and thereby will
be subject to applicable requirements of both state and
federal securities laws. Further, SIC will observe the
standards of care and conduct applicable to fiduciaries. In addition, SIC will use the best method of
execution for transactions and will not utilize the
brokerage or execution capabilities of SIC for any
transaction without the written consent of the customer.
All of the activities sought to be approved by this
application are to be provided, with one exception,
through separate SIC employees who will not themselves handle brokerage transactions for any customers, and who will not be involved in underwriting or
dealing activities.7 All of the activities sought to be
approved by this application will be conducted by SIC
personnel whose office will be maintained separate
and apart from any retail banking offices of any of
Applicant's banking affiliates. SIC will be maintained
and will hold itself out to the public as a separate and
distinct corporate entity with its own name, properties, assets, liabilities, books, and records. Except for
the provision of investment advice and execution
services to other affiliates (as a permissible servicing
activity under 12 C.F.R. § 225.22(a)) and the receipt
by SIC of certain operational support from its affiliates
under one or more service contracts, SIC will conduct
its business separate from that of its bank affiliates,
and its agreements with customers will indicate that
SIC is solely responsible for its contractual obligations
and commitments. All of SIC's notices, tickets, advices, confirmations, correspondence and similar documentation will be clearly imprinted so as to avoid
confusion on the part of customers or others between
SIC's business and that of its bank affiliates. In
addition, SIC offices will be located in areas separate
from areas utilized by the retail functions of its bank
affiliates.
Based upon a consideration of all the relevant facts,
the Board concludes that the balance of the public
interest factors that the Board is required to consider
under section 4(c)(8) is favorable. The financial and
managerial resources of Applicant are consistent with
approval. Accordingly, the application is hereby approved. This determination is subject to the conditions
set forth in sections 225.4(d) and 225.23(b)(3) of Regulation Y, and to the Board's authority to require such
modification or termination of the activities of a bank
holding company or any of its subsidiaries as the
Board finds necessary to assure compliance with the
6. 12 C.F.R. § 9. These regulations include a requirement that a
national bank exercising investment discretion with respect to an
account shall adopt and follow written policies and procedures
intended to ensure that its brokerage placement practices comply with
all applicable laws and regulations (12 C.F.R. § 9.5).
7. The one exception is that individuals who handle the small
number of short-term discretionary accounts will handle brokerage
transactions for those accounts as well as for certain other nondiscretionary corporate accounts.
746
Federal Reserve Bulletin • September 1987
provisions and purposes of the Act and the Board's
regulations and orders issued thereunder, or to prevent evasion thereof.
The 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 15, 1987.
Voting for this action: Chairman Volcker and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Orders Issued Under Sections 3 and 4 of the
Bank Holding Company Act
Security Pacific Corporation
Los Angeles, California
Order Approving Acquisition of a Bank Holding
Company and Its Banking and Nonbanking
Subsidiaries
Security Pacific Corporation, Los Angeles, California,
a bank holding company within the meaning of the
Bank Holding Company Act of 1956, as amended (the
"Act") (12 U.S.C. § 1841 et seq.), has applied for the
Board's approval under section 3 of the Act
(12 U.S.C. § 1842) to acquire Rainier Bancorporation,
Seattle, Washington ("Rainier"), and thereby to acquire indirectly Rainier National Bank, Seattle, Washington, Rainier Bank Oregon, N.A., Portland, Oregon,
United Bank, A Savings Bank, Tacoma, Washington,
and Rainier Bank Alaska, N.A., Anchorage, Alaska.1
Applicant also has applied for the Board's approval
under section 4(c)(8) of the Act (12 U.S.C.
§ 1843(c)(8)) to acquire Rainier Mortgage Company,
Seattle, Washington, and thereby engage in mortgage
banking; Rainier Real Estate Advisers, Inc., Seattle,
Washington, and thereby engage in investment advice;
Rainier Credit Life Insurance Company, Seattle,
Washington, and thereby engage in the sale of creditrelated insurance; and Rainier Brokerage Services,
Inc., Seattle, Washington, and thereby engage in secu-
1. Applicant will acquire Rainier through the merger of Rainier into
SPC/RAB Acquisition, Inc. ("SPC/RAB"), a Delaware corporation
and a wholly owned, special purpose subsidiary of Applicant. In
connection with this application, SPC/RAB has applied to become a
bank holding company by acquiring Rainier.
rities brokerage. 2 These activities are authorized for
bank holding companies pursuant to the Board's Regulation Y, 12 C.F.R. §§ 225.25(b)(1), (4), (8), (15). Applicant also has provided notice to the Board under
section 4(c)(14) of the Act of its intention to invest in
Rainier International Trading Company, an export
trading company. Finally, Applicant has provided
notice to the Board under 12 C.F.R. § 211.4(b)(3) of its
intention to indirectly acquire control of the Edge Act
corporation subsidiaries of Rainier, Rainier International Bank and Rainier Bank International.
Notice of the applications, affording opportunity for
interested persons to submit comments and views, has
been duly published (52 Federal Register 16,312
(1987)). The time for filing comments has expired, and
the Board has considered the applications and all
comments received in light of the factors set forth in
sections 3(c) and 4(c)(8) of the Act.
Applicant, with approximately $28 billion in domestic deposits, is the third largest commercial banking
organization in California, controlling approximately
13.5 percent of total deposits in commercial banks in
California.3 Rainier is the second largest commercial
banking organization in Washington with domestic
deposits of approximately $5.7 billion, controlling approximately 22.1 percent of the total deposits in commercial banks in Washington.
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
holding company's home state, 4 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." Effective
July 1, 1987, Washington law permits an out-of-state
banking organization that meets the requirements of
Washington law, including a reciprocity requirement,
to acquire a bank located in Washington.5 The Washington Supervisor of Banking has indicated that Applicant has satisfied the requirements of Washington law.
Oregon law permits a California bank holding company, with the permission of the Oregon Banking Supervisor, to acquire an Oregon bank. 6 The Oregon Bank-
2. In connection with this application, SPC/RAB also has applied to
acquire these nonbanking subsidiaries and has provided notice of
investment in Rainier International Trading Company and the Edge
Act corporation subsidiaries of Rainier.
3. Statewide banking data are as of December 31, 1986.
4. 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.
5. Wash. Rev. Code § 30.04.232 (1986).
6. Or. Rev. Stat. § 715.065(b)(A) (1985).
Legal Developments
ing Supervisor has indicated that Applicant's
acquisition of Rainier Bank Oregon, N.A., Portland,
Oregon, is permissible. An out-of-state bank holding
company may acquire an Alaska bank unless the bank
is a "recently formed bank." 7 Rainier Bank Alaska,
N.A., Anchorage, Alaska, is not, under the statute, a
"recently formed bank," 8 and the Alaska Director of
Banking and Securities has indicated that Applicant's
acquisition of Rainier Bank Alaska, N.A. is permissible. Based on the foregoing factors and its own review
of the record, the Board has determined that the
proposed acquisition is specifically authorized by the
statute laws of Washington, Oregon, and Alaska, and
thus Board approval is not prohibited by the Douglas
Amendment.
Applicant competes with Rainier in three banking
markets in Oregon and Washington. 9
In the Portland banking market, Applicant is the
third largest of 22 commercial banking organizations
with deposits of approximately $483 million, controlling approximately 7.6 percent of total deposits in
commercial banks in the market. 10 Rainier is the ninth
largest banking organization with deposits of approximately $80 million, controlling approximately 1.3 percent of total deposits in commercial banks in the
market. Upon consummation, Applicant would continue to be the third largest organization, with deposits
of approximately $563 million, controlling approximately 8.9 percent of total deposits in commercial
banks in the market. The Portland banking market is
considered highly concentrated, with a HerfindahlHirschman Index ("HHI") of 2540. However, upon
consummation, the HHI would increase by only 20
points to 2560.
In the Longview banking market, Applicant is the
sixth largest of eight commercial banking organizations with deposits of approximately $11 million, controlling approximately 5.0 percent of total deposits in
commercial banks in the market. 11 Rainier is the
second largest banking organization with deposits of
approximately $63 million, controlling approximately
28.7 percent of total deposits in commercial banks in
the market. Upon consummation, Applicant would
become the largest organization, with deposits of
approximately $74 million, controlling approximately
33.9 percent of total deposits in commercial banks in
the market. The HHI would increase by 287 points to
2418.
In the Grays Harbor County banking market, Applicant is the seventh largest of eight commercial banking
organizations with deposits of approximately $15 million, controlling approximately 5.3 percent of total
deposits in commercial banks in the market. 12 Rainier
is the largest banking organization, with deposits of
approximately $106 million, controlling approximately
37.5 percent of total deposits in commercial banking
organizations in the market. Upon consummation,
Applicant would become the largest organization in
the market, with deposits of approximately $121 million, controlling approximately 42.8 percent of total
deposits in commercial banks in the market. The
Grays Harbor County banking market is considered
highly concentrated, with an HHI of 2164. Upon
consummation, the HHI would increase by 398 points
to 2562.
Although consummation of this proposal would
eliminate some existing competition between Applicant and Rainier in these banking markets, certain
facts of record mitigate the adverse competitive effects
of the proposal in these markets. Numerous other
commercial banking organizations would continue to
operate in each market after consummation of the
proposal. In addition, the Board has considered the
presence of thrift institutions in these markets in its
analysis of this proposal.
The Board previously has indicated that thrift institutions have become, or have the potential to become,
major competitors of commercial banks. 13 Thrift institutions already exert a considerable competitive influence in the market as providers of a wide array of
deposit and lending services to consumer and commercial customers. In view of these facts, the Board has
concluded that thrift institutions exert a significant
competitive influence that mitigates the anticompetitive effects of this proposal in the Grays Harbor
County and Longview markets. 14
On the basis of the foregoing, the Board concludes
12. The Grays Harbor County banking market is approximated by
Grays Harbor County, Washington.
13. National
City
7 4 3 ( 1 9 8 4 ) ; The Chase
Corporation,
B U L L E T I N 2 2 5 ( 1 9 8 4 ) ; General
RESERVE
BULLETIN
7 0 F E D E R A L RESERVE B U L L E T I N
Manhattan
B U L L E T I N 5 2 9 ( 1 9 8 4 ) ; NCNB
7. Alaska Stat. § 06.05.235(e) (1986).
8. Alaska Stat. § 06.05.235(g).
9. All local banking market data are as of June 30, 1985.
10. The Portland banking market is approximated by the Portland
RMA, which consists of Multnomah County and parts of Clackamas,
Columbia, Marion, Washington, and Yamhill Counties, all in Oregon,
and part of Clark County, Washington.
11. The Longview banking market is approximated by the Longview, Washington, RMA, which consists of parts of Cowlitz County,
Washington, and Columbia County, Oregon.
747
802
Corporation,
Bancorporation,
Bancshares
(1983);
First
7 0 F E D E R A L RESERVE
7 0 F E D E R A L RESERVE
Corporation,
Tennessee
6 9 FEDERAL
Corporation,
69
FEDERAL RESERVE B U L L E T I N 2 9 8 ( 1 9 8 3 ) .
14. If thrift institutions are included in the analysis at 50 percent,
Applicant is the ninth largest of 15 depository organizations in the
Longview market, with approximately 3.5 percent of market deposits.
Rainier is the second largest depository organization in the market,
with approximately 19.9 percent of market deposits. Upon consummation, Applicant would become the largest depository organization
in the market, with a market share of approximately 23.4 percent. The
748
Federal Reserve Bulletin • September 1987
that consummation of the proposal would not have a
substantial adverse competitive effect in any of these
banking markets.
The Board also has considered the effects of Applicant's proposal on probable future competition in
markets in which Applicant and Rainier do not compete. In light of the number of probable future entrants
into these markets, the Board concludes that consummation of this proposal would not have a significant
adverse effect on probable future competition in any
relevant banking market.
In evaluating this application, the Board has considered the financial resources of Applicant and the effect
on these resources of the proposed acquisition. The
Board has stated and continues to believe that capital
adequacy is an especially important factor in the
analysis of bank holding company proposals, particularly in transactions where a significant acquisition is
proposed. 15
In this regard, the Board expects that banking
organizations experiencing substantial growth internally and by acquisition, such as Applicant, should
maintain a strong capital position substantially above
the minimum levels specified in the Capital Adequacy
Guidelines without significant reliance on intangibles,
particularly goodwill.16 The Board will carefully analyze the effect of expansion proposals on the preservation or achievement of such capital positions.
The Board has reviewed this case in the light of
Applicant's capital and asset position. The Board
notes that this transaction is a share-for-share exchange which involves no acquisition debt, and that
Applicant has recently strengthened its capital position through the issuance of primary capital instruments. In addition, Applicant recognizes the desirability of continuing to strengthen its capital base. The
Board intends to monitor Applicant's progress toward
this objective. Accordingly, on the basis of the above
HHI would increase by 139 points, from 1315 to 1454.
In the Grays Harbor County market, thrifts control 66.0
percent of the combined deposits of bank and thrifts. If thrift
institutions are included in the analysis at 50 percent, Applicant is
the eleventh largest of 12 depository organizations, with approximately 2.7 percent of market deposits. Rainier is the largest
depository organization in the market, with approximately 19.1
percent of deposits. Upon consummation, Applicant would become the largest depository organization in the market and
control approximately 21.8 percent of deposits in the market. The
HHI would increase by 103 points, from 1269 to 1372.
15. See e.g., Chase Manhattan Corporation, 70 FEDERAL RESERVE
B U L L E T I N 5 2 9 ( 1 9 8 4 ) ; NCNB
Corporation,
6 9 FEDERAL
RESERVE
BULLETIN 4 9 ( 1 9 8 3 ) .
16. Capital Adequacy Guidelines, 50 Federal
16,066-67
(April
(1985)); National
743, 746 (1984).
24,
1985) (71
City Corporation,
Register
16,057,
F E D E R A L RESERVE B U L L E T I N
445
70 FEDERAL RESERVE BULLETIN
considerations, the Board concludes that financial
factors are consistent with approval of the application.
Managerial factors also are consistent with approval.
In considering the convenience and needs of the
communities to be served, the Board has taken into
account the records of Applicant and Rainier under the
Community Reinvestment Act ("CRA"), 12 U.S.C.
§ 2901 et seq.11 The Board has received comments
from the South End Seattle Community Organization
("SESCO"), Seattle, Washington, regarding the CRA
records of Applicant and Rainier.18 In an attempt to
resolve the concerns raised by the protest, Applicant
and Rainier have met with SESCO to discuss the
issues raised by SESCO.
SESCO's comments are similar to comments filed
by SESCO in connection with Rainier's applications to
acquire Mount Hood Security Bank, Gresham, Oregon (now Rainier Bank Oregon, N.A., Portland, Oregon), and United Bank, A Savings Bank, Tacoma,
Washington.19 SESCO's basic assertion is that Rainier
is not meeting the credit needs of the South End
neighborhood of Seattle, Washington. The Board has
reviewed the record of Rainier in serving the credit
and deposit needs of the South End community of
Seattle. The Board's analysis indicates that Rainier's
record in lending to low- and moderate-income areas
compares favorably to its record in other portions of
the Seattle MSA. In addition, in connection with the
Mount Hood application, Rainier made a number of
CRA-related commitments, and Rainier's progress in
meeting these commitments is reasonable considering
the short period of time since they went into effect.
Further, Applicant has committed that SPC/RAB, as
successor to Rainier, will abide by these commitments.
The Board also notes that both Applicant and Rainier have satisfactory CRA records. Accordingly, based
on all the facts of record, the Board concludes that
17. The CRA requires the Board, in its evaluation of a bank holding
company application, to assess the record of an applicant in meeting
the credit needs of the entire community, including the low- and
moderate-income neighborhoods, consistent with safe and sound
operation.
18. SESCO generally alleges: (1) the South End neighborhood of
Seattle, Washington, is a low- and moderate-income neighborhood;
(2) SESCO is an effective community organization working for
reinvestment in the South End; (3) Rainier has a poor history of
lending in the South End; (4) Rainier unreasonably has refused to
work with SESCO to improve its South End lending; and (5) Applicant
has a dubious commitment to community reinvestment, especially in
Washington.
19. Rainier Bancorporation
(Mount Hood Security Bank), 73 FEDERAL RESERVE BULLETIN 55 (1987); Rainier Bancorporation
(United
B a n k ) , 7 3 F E D E R A L RESERVE B U L L E T I N 2 1 6 ( 1 9 8 7 ) .
Legal Developments
convenience and needs considerations are consistent
with approval of the applications.20
As indicated earlier, Applicant also has applied,
pursuant to section 4(c)(8), to acquire the nonbanking
subsidiaries of Rainier. Applicant operates nonbanking subsidiaries that compete with Rainier in the
activities of residential and commercial mortgage
banking, commercial finance and factoring, automobile floor finance and indirect leasing, consumer finance, manufactured housing finance, and equipment
leasing. The markets for these activities have numerous competitors and are regional or national in scope.
Accordingly, the Board concludes that this proposal
will not have any significant adverse effect upon
competition in any relevant market.
There is no evidence in the record to indicate that
approval of this proposal would result in undue concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices,
or other adverse effects on the public interest. Accordingly, the Board has determined that the balance of
public interest factors it must consider under section
4(c)(8) of the Act is favorable and consistent with
approval of the applications to acquire Company's
nonbanking subsidiaries and activities.
The Board also has considered the notice of Applicant's proposed investment in Rainier International
Trading Company under section 4(c)(14) of the Act
and the acquisition of control of Rainier International
Bank and Rainier Bank International under the Edge
Act. Based on the facts of record, the Board has
determined that disapproval of the proposed investments is not warranted.
Based on the foregoing and other facts of record, the
Board has determined that the applications should be,
and hereby are, approved. The acquisition of Rainier
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. The
determinations as to Applicant's nonbanking activities
are subject to all of the conditions contained in Regulation Y, including those in sections 225.4(d) and
225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)),
and to the Board's authority to require such modifica-
20. SESCO has also requested that the Board order a public hearing
to enable SESCO and other interested persons to present evidence
substantiating its allegations. Although section 3(b) of the Act does
not require a formal hearing in this instance, the Board may, in any
case, order an informal or formal hearing. In light of the commitment
made by Applicant and other facts of record, the Board has determined that a hearing would serve no useful purpose. Accordingly,
SESCO's request for a public hearing is denied.
749
tion 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 20, 1987.
V o t i n g f o r this action: V i c e C h a i r m a n J o h n s o n and G o v e r nors S e g e r , A n g e l l , H e l l e r , and K e l l e y . A b s e n t and not
voting: C h a i r m a n V o l c k e r .
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
The Sumitomo Trust & Banking Co., Ltd.
Osaka, Japan
Order Approving Formation of a Bank Holding
Company and a Nonbanking Joint Venture
The Sumitomo Trust & Banking Co., Ltd., Osaka,
Japan has applied for the Board's approval under
section 3(a)(1) of the Bank Holding Company Act
(12 U.S.C. § 1842(a)(1)) ("BHC Act") to become a
bank holding company by acquiring all of the voting
shares of Sumitomo Trust & Banking Co. (U.S.A.)
("Bank"), New York, New York, a de novo bank.
Applicant also has applied for the Board's approval,
pursuant to section 4(c)(8) of the BHC Act (12 U.S.C.
§ 1843(c)(8)) and section 225.23(a) of the Board's
Regulation Y (12 C.F.R. § 225.23(a)), to engage in
investment advisory activities that are permissible for
bank holding companies under section 225.25(b)(4) of
Regulation Y (12 C.F.R. § 225.25(b)(4)) through a joint
venture between Applicant and Security Pacific Corporation ("Security Pacific"), Los Angeles, California. Applicant and Security Pacific would each acquire
50 percent of the voting shares of Sumitrust Security
Pacific Investment Managers, Inc. ("Company"), Los
Angeles, California, a de novo corporation serving
customers throughout the United States and Japan.
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 BHC
Act. 51 Federal Register 28,982, 32,962 (1986). 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)
as well as the considerations specified in section 4(c)
of the BHC Act (12 U.S.C. §§ 1842(c) and 1843(c)).
Applicant, with total assets of approximately $113.6
billion, is the 22nd largest bank world-wide and the
750
Federal Reserve Bulletin • September 1987
second largest trust company in Japan. 1 Applicant
engages in a variety of banking and trust activities on a
world-wide basis. Applicant operates a branch in New
York and an agency in Los Angeles, which have total
assets of $5.6 billion and $1.2 billion, respectively.
Applicant has selected New York as its home state
under the Board's Regulation K (12 C.F.R.
§ 211.22(b)).
Bank will serve the Metropolitan New York-New
Jersey banking market 2 and will seek business primarily from domestic corporate and public sector customers with emphasis on specialized lending, fiduciary
and other banking services not currently provided by
Applicant's existing New York branch or Los Angeles
agency. Based upon the facts of record, including the
de novo status of Bank, the Board concludes that the
proposed transaction would have no adverse effects on
competition. Accordingly, competitive considerations
are consistent with approval.
Section 3(c) of the Act requires the Board in every
case to consider the financial resources of an applicant
organization and the bank or bank holding company to
be acquired. The Board previously has stated that it
believes that the principles of national treatment and
competitive equity require, in general, that foreign
banks seeking to establish or acquire banking organizations in the United States meet the same general
standards of strength, experience and reputation as are
required of domestic banking organizations and that
foreign banks be able to serve on a continuing basis as
a source of strength to their banking operations in the
United States. 3 The Board is also aware that foreign
banks operate outside the United States in accordance
with different regulatory and supervisory requirements, accounting principles, asset quality standards,
and banking practices and traditions, and that these
differences make it difficult to compare the capital
positions of domestic and foreign banks.
The appropriate balancing of these concerns raises a
number of complex issues which the Board believes
1. Banking data are as of March 31, 1987, based on the dollar/yen
exchange rate as of that date. Applicant's market rank is as of
December 31, 1985.
2. The Metropolitan N e w York-New Jersey market is defined to
include N e w York City and Long Island, New York; Putnam, Orange,
Westchester, Rockland and Sullivan Counties in New York; Bergen,
Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean,
Passaic, Somerset, Sussex, Union and Warren Counties in New
Jersey; and portions of Fairfield County in Connecticut.
3 . See,
Ljubljanska
Banka-AssociatedBank,
BULLETIN 489 (1986); The Mitsubishi
7 2 FEDERAL RESERVE
Trust and Banking
7 2 F E D E R A L RESERVE B U L L E T I N 2 5 6 ( 1 9 8 6 ) ; The
Japan,
shi
Ltd.,
Bank,
Corporation,
Industrial
7 2 F E D E R A L RESERVE B U L L E T I N 7 1 ( 1 9 8 6 ) ; The
Limited,
Bank
of
Mitsubi-
7 0 F E D E R A L RESERVE B U L L E T I N 5 1 8 ( 1 9 8 4 ) .
See
also Policy Statement on Supervision and Regulation of ForeignBased Bank Holding Companies, Federal Reserve Regulatory Service
114-835 (1979).
require careful consideration and which the Board
continues to have under review. In this regard, the
Board recently has announced a proposal to supplement its consideration of capital adequacy with a riskbased system that is simultaneously being proposed by
the Bank of England and the other domestic federal
banking agencies. 52 Federal Register 9,304 (1987).
The Board considers this proposal an important step
toward a more consistent and equitable international
norm for assessing capital adequacy. While the Board
will continue to apply a case-by-case approach during
the pendency of discussions regarding this proposal,
once such a system is adopted applications by foreign
banks seeking to make acquisitions in the United
States would be judged in the context of such guidelines.
In the present instance, the primary capital ratio of
Applicant, as publicly reported, is well below the
Board's capital adequacy guidelines.4 In similar cases,
the Board has considered mitigating factors, including
adjustments to an applicant's capital to reflect differences in accounting and regulatory practices. After
certain adjustments to account for Japanese banking
and accounting practices, including consideration of a
modest portion of the unrealized appreciation in Applicant's portfolio of equity securities (after taking into
account possible fluctuations in valuation and the
effects of taxation), Applicant's capital ratio more
nearly approximates U.S. standards. The Board also
has considered additional factors that mitigate its
concern. The Board has placed considerable emphasis
on the fact that Applicant will establish Bank de novo,
and that Bank will be strongly capitalized and small in
relationship to Applicant. The Board notes further that
Applicant is in compliance with the capital and other
financial requirements of Japanese banking organizations, and that Applicant has given the Board certain
assurances regarding its capital.
The Board expects that Applicant will maintain
Bank as among the more strongly capitalized banking
organizations of comparable size in the United States.
Based on these and other facts of record, including
certain commitments made by Applicant, the Board
concludes that financial and managerial factors are
consistent with approval of this application to acquire
Bank. Considerations relating to the convenience and
needs of the communities to be served are also consistent with approval.
Applicant also has applied under section 4(c)(8) of
the Act to engage through Company, a joint venture
subsidiary of Applicant and Security Pacific, in certain
4. Capital Adequacy Guidelines, 50 Federal Register
71 F E D E R A L RESERVE B U L L E T I N 4 4 5 ( 1 9 8 5 ) .
16,057 (1985),
Legal Developments
investment advisory nonbanking activities which the
Board previously has approved for bank holding companies under Regulation Y. Initially, Applicant proposes to provide through Company investment advice
to Japan-based and United States-based investment
advisors, including Applicant and a subsidiary of Security Pacific, Security Pacific Investment Managers,
Inc. ("SPIM"), 5 regarding investments in United
States and Japanese debt and equity securities. Applicant expects that United States and Japanese pension
funds initially will be the primary recipients of Company's services. In the future, Company may provide
users its investment advice directly. The Board previously has determined that the proposed nonbanking
activity is closely related and a proper incident to
banking under section 4(c)(8) in deciding to add it to
the list of activities permissible for bank holding
companies under section 225.25(b)(4) of Regulation Y
(12 C.F.R. § 225.25(b)(4)).
Section 4(c)(8) requires the Board to consider
whether the Applicant's performance of the proposed
activities through Sumitrust would result in benefits to
the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh
possible adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. In its
analysis of the public benefits and possible adverse
effects of this proposal, the Board has taken into
consideration the fact that Applicant would engage in
the proposed activity through a joint venture. Prior
decisions of the Board indicate a concern that joint
ventures not lead to a matrix of relationships between
co-venturers which could erode the legally mandated
separation of banking and commerce through a mingling of permissible and impermissible activities, lead
to conflicts of interest, result in an undue concentration of resources, or compromise the impartiality of a
banking organization in the performance of credit
evaluation or fiduciary services. 6
Applicant states that the purpose of its proposed
joint venture with Security Pacific is to allow the
parties to offer a broader range of investment options
to their respective customers that neither joint venturer could provide alone. Applicant operates and manages funds entrusted by a large number of pension
5. SPIM, an investment advisor registered under the Investment
Company Act of 1940, offers investment advisory services to institutional customers.
6. See, e.g., Independent Bankers Financial Corporation, 71 FEDERAL RESERVE B U L L E T I N 6 5 1 , 6 5 3 ( 1 9 8 5 ) ; The
and
Equitable
Bancorporation,
111 ( 1 9 8 3 ) , a n d Deutsche
449, 451 (1981).
Maybaco
Company
69 FEDERAL RESERVE B U L L E T I N 3 7 5 ,
Bank
AG,
6 7 FEDERAL RESERVE B U L L E T I N
751
funds in Japan, but does not currently offer investment
advisory services in the United States. Similarly,
Security Pacific has substantial experience in providing investment advice to U.S. investors regarding U.S.
securities, but believes that entry by a U.S. investor
into the Japanese market would be facilitated by the
assistance of a Japanese partner. By establishing Company, Applicant and Security Pacific will be able to
draw upon the investment expertise of each joint
venture partner as to securities traded in their respective countries. The proposed joint venture will allow
Applicant and Security Pacific to expand advisory
services to, and broaden the investment options of,
their United States and Japanese institutional customers. Accordingly, the Board finds that the proposed
joint venture may be expected to produce public
benefits in the form of greater convenience to customers and increased efficiency in the provision of investment advisory services.
The Board finds no evidence in the record that the
proposed joint venture would lead Applicant into
impermissible nonbanking activities. Both joint venturers in this case are banking organizations subject to
the requirements of section 4 of the BHC Act with
respect to this proposal. Moreover, Applicant and
Security Pacific will each control 50 percent of the
voting shares of Company so that no change in Company's activities may be effected without the consent
of both co-venturers.
The Board also has considered the possible adverse
effects upon existing or potential competition as a
result of this proposal. The Board notes that the
likelihood of such effects is substantially mitigated by
the following factors. First, the market for investment
advice is highly competitive. Numerous banks, bank
holding companies, investment banking firms and others provide this service. In addition, Applicant currently does not engage in investment advisory activity
in the United States and Company is being organized
de novo. The Board therefore finds that consummation
of this proposal would not have a significant adverse
effect on either existing or potential competition in any
relevant market.
There is no evidence that the proposed joint venture
involving Sumitrust would result in unfair competition, unsound banking practices, conflicts of interest,
or undue concentration of resources. In this regard,
the Board notes that the provision of investment
advice as permitted under section 225.25(b)(4)(iii) of
Regulation Y is subject to fiduciary standards and the
anti-tying provisions of the BHC Act (12 U.S.C.
§§ 1971 and 1972(1)), which the Board believes substantially address the possibility of conflicts of interest
or anti-competitive effects that could arise from Applicant's proposal.
752
Federal Reserve Bulletin • September 1987
Based on the foregoing and other facts of record, the
Board has determined that the balance of public interest factors it must consider under section 4(c)(8) of the
Act is favorable. The Board also has determined that
considerations relating to the convenience and needs
of the community to be served are consistent with
approval.
Accordingly, the Board has determined that the
applications under sections 3 and 4 of the Act should
be, and hereby are, approved. The proposed acquisition of Bank shall not be consummated before the
thirtieth calendar day following the effective date of
this Order. The proposal shall not be consummated
later than three months after the effective date of this
Order, unless such period is extended for good cause
by the Board or by the Federal Reserve Bank of New
York, pursuant to delegated authority. The determination as to Applicant's nonbanking activities is subject
to the conditions set forth in section 225.25(b)(4) of
Regulation Y (12 C.F.R. § 225.22(b)(4)), and the
Board's authority to require such modification or
termination of the activities of a holding company or
any of its subsidiaries as the Board finds necessary to
assure compliance with the provisions and purposes of
the Act and the Board's regulations and orders issued
thereunder, or to prevent evasion thereof.
By order of the Board of Governors, effective
July 16, 1987.
Voting for this action: Chairman Volcker and Governors
Johnson, Angell, Heller, and Kelley. Voting against this
action: Governor Seger.
JAMES M C A F E E
[SEAL]
Associate Secretary of the Board
Dissenting Statement of Governor Seger
I dissent from the Board's action in this case. I believe
that foreign banking organizations whose publicly reported capital is well below the Board's capital guidelines for U.S. banking organizations have an unfair
competitive advantage in the United States over domestic banking organizations and should therefore be
judged against the same financial and managerial standards, including the Board's capital adequacy guidelines, as are applied to domestic banking organizations.
In addition, I am concerned that while this application would permit a large Japanese banking organization to acquire a bank in the U.S., U.S. banking
organizations are not permitted to make comparable
acquisitions in Japan. While some progress is being
made in opening Japanese markets to U.S. banking
organizations, U.S. banking organizations and other
financial institutions, in my opinion, are still far from
being afforded the full opportunity to compete in
Japan.
July 17, 1987
Errata:
Hartford National Corporation
Hartford, Connecticut
The following order which appeared on page 661 of the
August 1987 BULLETIN was incorrectly printed. The
corrected order is reprinted below.
Hartford National Corporation, Hartford, Connecticut, 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 the successor to the Savings
and Loan Association of Southington, Southington,
Connecticut ("Southington").
Notice of the application, affording interested persons an opportunity to submit comments, has been
given in accordance with section 3(b) of the Act, 52
Federal Register 7,487 (1987). 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.
Southington is a state chartered, stock savings and
loan association, the accounts of which are insured by
the Federal Savings and Loan Insurance Corporation
("FSLIC"). Applicant proposes to merge Southington
with and into a de novo subsidiary of Applicant, State
Savings Bank (In Organization) ("Bank"), a state
stock savings bank the accounts of which would be
insured by the Federal Deposit Insurance Corporation
("FDIC").
Since Bank, at the time of acquisition by Applicant,
will be a state chartered bank that accepts demand
deposits and makes commercial loans, Bank is a
"bank" for purposes of the Act, and Applicant properly has applied to acquire Bank under section 3 of the
Act, which governs the acquisition of banks by bank
holding companies.
Applicant, with deposits of $7 billion, is the second
largest commercial banking organization in Connecticut, controlling 25.8 percent of the total deposits in
commercial banks in the state. 1 After the merger of
Southington into Bank, Bank will control deposits of
$76.7 million, representing less than 1 percent of the
total deposits in commercial banking organizations in
the state. 2 Upon consummation of this proposal, Ap-
1. State deposit data are as of December 31, 1986.
Legal Developments
plicant will continue to be the second largest commercial banking organization in Connecticut, with no
significant change in its market share or deposit size.
Consummation of this proposal therefore would not
have any significant adverse effect upon the concentration of banking resources in the state.
Bank is located in the Hartford banking market,
where Applicant also competes. 3 In the Hartford
banking market, Applicant is the second largest of 17
commercial banking organizations, controlling deposits of $2.5 billion, which represents 35.8 percent of
total deposits in commercial banks in the market. 4
Following the proposed merger, Bank will be the 13th
largest of 18 commercial banking organizations in
Hartford, controlling deposits of $48.5 million, representing less than 1 percent of the market share.
Following acquisition of Bank, Applicant would remain the second largest commercial banking organization in the Hartford banking market, controlling 36.5
percent of the market's total commercial bank deposits. The Herfindahl-Hirschman Index ("HHI") 5
would increase by only 8 points to 3079. Consummation of this proposal therefore is unlikely to substantially lessen competition in the Hartford banking market.
Based upon a review of all facts of record, the Board
has determined that the financial and managerial resources of Applicant, its subsidiary banks and Bank
are consistent with approval. Considerations relating
to the convenience and needs of the communities to be
served also are consistent with approval of this proposal.
The Board notes that this application involves the
acquisition of a bank that results from the merger of a
non-failing, FSLIC-insured state savings and loan association into an FDIC-insured state savings bank.
The acquisition proposed here, however, does not fall
within the scope of the Board's policy and rulings
regarding acquisitions of thrift institutions under section 4 of the Act 6 or the provisions of the 1982 Garn-St
Germain Depository Institution Act regarding acquisitions of thrift institutions. Upon its acquisition by
Applicant, Bank will accept demand deposits and
engage in commercial lending, and will be subject to all
the banking standards of the Act.
In addition, the Board expects that Applicant will
comply with all state and federal requirements necessary for consummation of the acquisition, and the
Board's approval of this application under the Act is
not intended to preempt any such requirements. 7 The
Board has previously stated that its approval of transactions under section 3 of the Act does not relieve an
applicant or the bank involved of the responsibility to
obtain approval under other federal or state laws and
regulations and does not shield an applicant from the
consequences of violations of other laws.8
Based on the foregoing and other facts of record, the
Board has determined that the application should be,
and hereby is, approved. This transaction shall not be
consummated before the thirtieth day following the
effective date of this Order, or later than three months
after the effective date of this Order, unless such
period is extended for good cause by the Board or by
the Federal Reserve Bank of Boston, acting pursuant
to delegated authority.
By order of the Board of Governors, effective
June 1, 1987.
Voting for this action: Chairman Volcker and Governors
Johnson, Seger, Angell, Heller, and Kelley.
JAMES M C A F E E
Associate Secretary of the Board
[SEAL]
2. Deposit data for Bank are calculated on a commercial banks only
basis, based on financial information reported prior to Bank's conversion.
3. The Hartford banking market is approximated by the Hartford
Rand McNally Area ("RMA"), minus the Windham County township
of Windham and the Tolland County township of Mansfield, plus the
Windham County township of Ashford, the Hartford County township
of Hartland, the Tolland County township of Union, and the remaining portions of Plymouth and East Haddam not already included in the
RMA.
4. Market data are as of June 30, 1985.
5. Under the revised Department of Justice Merger Guidelines (49
Federal Register 26,823 (June 29, 1984)), any market in which the
post-merger HHI is over 1800 is considered highly concentrated, and
the Department is likely to challenge a merger that increases the HHI
by more than 50 points unless other factors indicate that the merger
753
will not substantially lessen competition. The Department of Justice
has informed the Board that a bank merger or acquisition generally
will not be challenged (in the absence of other facts indicating an
anticompetitive effect) unless the post-merger HHI is at least 1800 and
the merger increases the HHI by at least 200 points.
6. D.H.
Baldwin
Company,
63 FEDERAL RESERVBULLETIN
280
(1977).
7. The Board may not approve an application that would result in a
violation of federal or state law. Whitney National Bank v. Bank of
New Orleans, 379 U.S. 411 (1964).
8. The
(1987);
One
Bancorp,
SafraCorp,
73
Comerica Incorporated
7 3 F E D E R A L RESERVE B U L L E T I N
FEDERAL
RESERVE
BULLETIN
(Order dated May 4, 1987).
137
55,
135
(1987);
754
Federal Reserve Bulletin • September 1987
ORDERS
APPROVED
By Federal Reserve
UNDER
BANK
HOLDING
COMPANY
ACT
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon
request to the Reserve Banks.
Section 3
Applicant
Adairsville Bancshares, Inc.
Adairsville, Georgia
Alvarado Bankshares, Inc.
Alvarado, Texas
American Bancorporation
Wheeling, West Virginia
Asia Bancshares, Inc.
Flushing, New York
Baron II Bancshares, Inc.
White Bear Lake, Minnesota
BayBanks, Inc.
Boston, Massachusetts
Bellbrook Bancorp, Inc.
Bellbrook, Ohio
Boatmen's Bancshares, Inc.
St. Louis, Missouri
Brazos Bancshares, Inc.
Joshua, Texas
Brown Deer Bank Profit Sharing
Plan
Brown Deer, Wisconsin
Camino Real Bancshares, Inc.
Carrizo Springs, Texas
CapitalBanc Corporation
New York, New York
Cenvest, Inc.
Meriden, Connecticut
Citizens Equity Corporation
Weatherford, Texas
CommerceBancorp
Newport Beach, California
Commonwealth Bancshares
Corporation
Williamsport, Pennsylvania
Core States Financial Corp.
Philadelphia, Pennsylvania
Bank(s)
Bank of Adairsville
Adairsville, Georgia
Alvarado National Bank
Alvarado, Texas
Citizens National Bank Flushing
— St. Clairsville
St. Clairsville, Ohio
Asia Bank, N.A.
Flushing, New York
Security State Bank of Deer
Creek
Deer Creek, Minnesota
BayBank Connecticut, National
Association
Farmington, Connecticut
The Bellbrook Community Bank
Bellbrook, Ohio
Boatment's Bank of Delaware
New Castle, Delaware
The First National Bank in
Joshua
Joshua, Texas
Capital One Corp.
Brown Deer, Wisconsin
Reserve
Bank
Effective
date
Atlanta
July 20, 1987
Dallas
July 20, 1987
Cleveland
July 8, 1987
New York
June 26, 1987
Minneapolis
July 27, 1987
Boston
July 15, 1987
Cleveland
July 2, 1987
St. Louis
July 24, 1987
Dallas
July 17, 1987
Chicago
July 7, 1987
Frio National Bank
Pearsall, Texas
Capital National Bank
New York, New York
The Central Bank for Savings
Meriden, Connecticut
The Citizens National Bank of
Weatherford
Weatherford, Texas
CommerceBank
Newport Beach, California
Liberty State Bank
Mount Carmel Pennsylvania
Dallas
July 21, 1987
New York
July 15, 1987
Boston
July 17, 1987
Dallas
July 20, 1987
San Francisco
June 25, 1987
Philadelphia
July 9, 1987
The Montgomery National Bank
Rocky Hill, New Jersey
Philadelphia
July 9, 1987
Legal Developments
Section 3—Continued
Applicant
Credit and Commerce American
Holdings, N.V.
Curacao, Netherlands Antilles
Credit and Commerce American
Investment, B.V.
Amsterdam, Netherlands
First American Corporation
Washington, D.C.
First American Bankshares, Inc.
Washington, D.C.
Crews Banking Corporation
Wauchula, Florida
EMF Corporation
Blue Grass, Iowa
Farmers Bancorp, Inc. of
Marion, Kentucky
Marion, Kentucky
Fillmore County Bancshares,
Inc.
Canton, Minnesota
First Capital Corporation
Jackson, Mississippi
First Citizens BancStock, Inc.
Morgan City, Louisiana
FirstMorrill Co.
Omaha, Nebraska
First Northwest Bancshares,
Inc.
Kenton, Tennessee
1st Source Corporation
South Bend, Indiana
First South Bancshares, Inc.
Morgan City, Louisiana
First Virginia Banks, Inc.
Falls Church, Virginia
Greenfield Bancshares, Inc.
Greenfield, Tennessee
Illini Community Bancorp, Inc.
Springfield, Tennessee
Jefferson Bancorp, Inc.
Miami Beach, Florida
Key Pacific Bancorp
Anchorage, Alaska
Lockwood Banc Group, Inc.
Houston, Texas
Bank(s)
Reserve
Bank
Effective
date
NBG Financial Corporation
Atlanta, Georgia
Richmond
June 26, 1987
Charlotte State Bank
Port Charlotte, Florida
Blue Grass Savings Bank
Blue Grass, Iowa
Farmers Bank and Trust
Company of Marion, Kentucky
Marion, Kentucky
Canton State Bank
Canton, Minnesota
Atlanta
July 29, 1987
Chicago
June 25, 1987
St. Louis
July 17, 1987
Minneapolis
July 15, 1987
Gateway Capital Corporation
Jackson, Mississippi
The First National Bank in St.
Mary Parish
Morgan City, Louisiana
First National Bank in Morrill
Morrill, Nebraska
First State Bank
Kenton, Tennessee
Atlanta
July 28, 1987
Atlanta
July 23, 1987
Kansas City
June 26, 1987
St. Louis
July 21, 1987
The Hamlet State Bank
Hamlet, Indiana
Morgan City Bank & Trust
Company
Morgan City, Louisiana
United Bancorp of Maryland,
Inc.
Upper Marlboro, Maryland
Greenfield Banking Company
Greenfield, Tennessee
Banc Shares, Inc.
Greenview, Illinois
Broward Bancorp
Lauderdale Lakes, Florida
First NorthWest Bancorporation
Seattle, Washington
Lockwood National Bank of
Houston
Houston, Texas
Chicago
July 15, 1987
Atlanta
July 10, 1987
Richmond
July 16, 1987
St. Louis
July 3, 1987
Chicago
June 30, 1987
Atlanta
July 10, 1987
New York
June 26, 1987
Dallas
July 1, 1987
755
756
Federal Reserve Bulletin • September 1987
Section 3—Continued
Applicant
Magna Group, Inc.
Belleville, Illinois
FGB Acquisition Company
Belleville, Illinois
Mountain Bank System, Inc.
Whitefish, Montana
New Hampshire Savings Bank
Corp.
Concord, New Hampshire
North Star Holding Company,
Inc.
Jamestown, North Dakota
Northern Plains Investment,
Inc.
Jamestown, North Dakota
Peoples Bancorporation
Rocky Mount, North Carolina
Peoples First Corporation
Paducah, Kentucky
Security Bancorp of Tennessee,
Inc.
Halls, Tennessee
Southlake Bancshares, Inc.
Southlake, Texas
Susquehanna Bancshares, Inc.
Lititz, Pennsylvania
Tara Bankshares Corporation
Riverdale, Georgia
United Valley Financial
Lemoore, California
Wonder Bancorp, Inc.
Wonder Lake, Illinois
Bank(s)
Reserve
Bank
Effective
date
First Granite Bancorporation,
Inc.
Granite City, Illinois
St. Louis
July 21, 1987
Valley Bank of Belgrade
Belgrade, Montana
Seashore Bank Shares, Inc.
Seabrook, New Hampshire
Minneapolis
July 9, 1987
Boston
July 24, 1987
Stutsman County State Bank
Jamestown, North Dakota
Minneapolis
July 16, 1987
North Star Holding Company,
Inc.
Jamestown, North Dakota
Citizens National Bank
Winston-Salem, North Carolina
First National Bank of La Center
La Center, Kentucky
Bank of Crockett
Bells, Tennessee
Minneapolis
July 16, 1987
Richmond
July 17, 1987
St. Louis
July 14, 1987
St. Louis
July 13, 1987
Texas National Bank
Southlake, Texas
Spring Grove National Bank
Spring Grove, Pennsylvania
Tara State Bank
Riverdale, Georgia
Farmers State Bank
Farmersville, California
Wonder Lake State Bank
Wonder Lake, Illinois
Dallas
July 7, 1987
Philadelphia
July 1, 1987
Atlanta
June 29, 1987
San Francisco
June 25, 1987
Chicago
July 10, 1987
Section 4
Applicant
Midwest Commerce
Corporation
Elkhart, Indiana
Montana Bancsystem, Inc.
Billings, Montana
Security Pacific Corporation
Los Angeles, California
Nonbanking
Company/Activity
Reserve
Bank
Effective
date
Independent Leasing Services,
Inc.
Indianapolis, Indiana
general insurance activities
Chicago
July 7, 1987
Minneapolis
July 24, 1987
Sumitrust Security Pacific
Investment Managers, Inc.
Los Angeles, California
investment advisory activities
San Francisco
July 20, 1987
Legal Developments
Section 4—Continued
Nonbanking
Company/Activity
Applicant
Signet Banking Corporation
Richmond, Virginia
Standard Chartered PLC
London, England
Standard Chartered Bank
London, England
Standard Chartered Overseas
Holdings, Limited
London, England
Standard Chartered Inc.
Los Angeles, California
Union Bancorp
Los Angeles, California
Valley Bancorporation
Appleton, Wisconsin
Reserve
Bank
Effective
date
Ford Brothers Finance Co., Inc.
Mount Rainier, Maryland
Union Bancsystems, Inc.
Sherman Oaks, California
management consulting and data
processing
Richmond
July 29, 1987
San Francisco
June 25, 1987
Valley Systems, Inc.
Appleton, Wisconsin
data processing activities
Chicago
July 3, 1987
Sections 3 and 4
Bank(s)/Nonbanking
Company
Reserve
Bank
Effective
date
Key Bancshares of New York,
Inc.
Albany, New York
Key Bancshares of Maine, Inc.
Augusta, Maine
Community Banks, Inc.
Middleton, Wisconsin
CBI Trust and Financial Services,
Inc.
Madison, Wisconsin
New York
June 26, 1987
Chicago
July 16, 1987
Applicant
Key Atlantic Bancorp
Albany, New York
Valley Bancorporation
Appleton, Wisconsin
ORDERS APPROVED
By Federal Reserve
UNDER
BANK
ACT
Banks
Applicant
First of America Bank—Central
Lansing, Michigan
First of America Bank—Central,
Lansing, Michigan
MERGER
Bank(s)
Reserve
Bank
First of America Bank—Charlotte
Chicago
Charlotte, Michigan
First of America Bank—Grand Ledge, Chicago
Grand Ledge, Michigan
Effective
Date
July 15, 1987
July 15, 1987
757
758
Federal Reserve Bulletin • September 1987
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.
National Association of Casualty & Insurance Agents
v. Board of Governors, Nos. 87-1354, 87-1355 (D.C.
Cir. filed July 29, 1987).
Air Continental, Inc. v. Federal Reserve Board of
Boston, et. al., No. 87-1877-N (D. Massachusetts
filed July 23, 1987).
The Chase Manhattan Corporation v. Board of Governors, No. 87-1333 (D.C. Cir. filed July 20, 1987).
Securities Industry Association v. Board of Governors, Nos. 87-4091, 87-4093, 87-4095 (2d Cir. filed
July 1 and July 15, 1987).
Lewis v. Board of Governors, No. 87-3455 (11th Cir.
filed June 25, 1987).
Securities Industry Association v. Board of Governors, et al. No. 87-4041 and consolidated cases (2d
Cir., filed May 1, 1987).
Securities Industry Association v. Board of Governors, et al., No. 87-1169 (D.C. Cir., filed April 17,
1987).
Jones v. Volcker, No. 87-0427 (D.D.C., filed Feb. 19,
1987).
Bankers Trust New York Corp. v. Board of Governors,
No. 87-1035 (D.C. Cir., filed Jan. 23, 1987).
Securities Industry Association v. Board of Governors, et al., No. 87-1030 (D.C.Cir., filed Jan. 20,
1987).
Grimm v. Board of Governors, No. 87-4006 (2d Cir.,
filed Jan. 16, 1987).
Independent Insurance Agents of America, et al. v.
Board of Governors, Nos. 86-1572, 1573, 1576
(D.C. Cir., filed Oct. 24, 1986).
Independent Community Bankers Association of
South Dakota v. Board of Governors, No. 86-5373
(8th Cir., filed Oct. 3, 1986).
Jenkins v. Board of Governors, No. 86-1419 (D.C.
Cir., filed July 18, 1986).
Securities Industry Association v. Board of Governors, No. 86-1412 (D.C. Cir., filed July 14, 1986).
Optical Coating Laboratory, Inc. v. United States,
No. 288-86C (U.S. Claims Ct., filed May 6, 1986).
CBC, Inc. v. Board of Governors, No. 86-1001 (10th
Cir., filed Jan. 2, 1986).
Myers, et al. v. Federal Reserve Board, No. 85-1427
(D. Idaho, filed Nov. 18, 1985).
Souser, et al. v. Volcker, et al., No. 85-C-2370, et al.
(D. Colo., filed Nov. 1, 1985).
Podolak v. Volcker, No. C85-0456, et al. (D. Wyo.,
filed Oct. 28, 1985).
Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa,
filed Oct. 22, 1985).
Farmer v. Wilkinson, et al, No. 4-85-CIVIL-1448 (D.
Minn., filed Oct. 21, 1985).
Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D.
Neb., filed Oct. 16, 1985).
Alfson v. Wilkinson, et al., No. Al-85-267 (D. N.D.,
filed Oct. 8, 1985).
Independent Community Bankers Associaton of South
Dakota v. Board of Governors, No. 84-1496 (D.C.
Cir., filed Aug. 7, 1985).
Urwyler, et al. v. Internal Revenue Service, et al., No.
85-2877 (9th Cir., filed July 18, 1985).
Wight, et al. v. Internal Revenue Service, et al., No.
85-2826 (9th Cir., filed July 12, 1985).
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 (11th Cir., filed Feb. 15, 1985),
and No. 84-3832 (11th Cir., filed Feb. 15, 1985).
Lewis v. Volcker, et al., No. 86-3210 (6th Cir., filed
Jan. 14, 1985).
Brown v. United States Congress, et al., No. 84-28876(IG) (S.D. Cal., filed Dec. 7, 1984).
Melcher v. Federal Open Market Committee, No. 841335 (D.D.C., filed Apr. 30, 1984).
759
Membership of the Board of Governors
of the Federal Reserve System, 1913-87
APPOINTIVE
MEMBERS1
Name
Federal Reserve
District
Date of initial
oath of office
Other dates and information relating
to membership2
Aug. 10, 1914
Reappointed in 1916 and 1926. Served until
Feb. 3, 1936.3
Term expired Aug. 9, 1918.
Resigned July 21, 1918.
Term expired Aug. 9, 1922.
Reappointed in 1924. Reappointed in 1934
from the Richmond District. Served until
Feb. 3, 1936.3
Resigned Mar. 15, 1920.
Term expired Aug. 9, 1920.
Reappointed in 1928. Resigned Sept. 14, 1930.
Term expired Mar. 4, 1921.
Resigned May 12, 1923.
Died Mar. 22, 1923.
Resigned Sept. 15, 1927.
Reappointed in 1931. Served until
Feb. 3, 1936.4
Died Nov. 28, 1930.
Resigned Aug. 31, 1930.
Resigned May 10, 1933.
Term expired Jan. 24, 1933.
Resigned Aug. 15, 1934.
Reappointed in 1936 and 1948. Resigned
May 31, 1961.
Served until Feb. 10, 1936.3
Reappointed in 1936, 1940, and 1944.
Resigned July 14, 1951.
Resigned Sept. 30, 1937.
Served until Apr. 4, 1946.3
Reappointed in 1942. Died Dec. 2, 1947.
Resigned July 9, 1936.
Reappointed in 1940. Resigned Apr. 15, 1941.
Served until Sept. 1, 1950.3
Served until Aug. 13, 1954.3
Resigned Nov. 30, 1958.
Died Dec. 4, 1949.
Resigned Mar. 31, 1951.
Resigned Jan. 31, 1952.
Resigned June 30, 1952.
Reappointed in 1956. Term expired
Jan. 31, 1970.
Reappointed in 1958. Resigned Feb. 28, 1965.
Reappointed in 1964. Resigned Apr. 30, 1973.
Served through Feb. 28, 1966.
Died Oct. 21, 1954.
Retired Apr. 30, 1967.
Reappointed in 1960. Resigned
Sept. 18, 1963.
Reappointed in 1962. Served until
Feb. 13, 1976.3
Charles S. Hamlin
Boston
Paul M. Warburg...
Frederic A. Delano
W.P.G. Harding ....
Adolph C. Miller ...
.New York
.Chicago
.Atlanta
.San Francisco
Albert Strauss
Henry A. Moehlenpah
Edmund Piatt
David C. Wills
John R. Mitchell
Milo D. Campbell
Daniel R. Crissinger
George R. James
New York ..
Chicago
New York ..
Cleveland ...
Minneapolis
Chicago
Cleveland ...
St. Louis....
.Oct. 26, 1918
.Nov. 10, 1919
J u n e 8, 1920
.Sept. 29, 1920
.May 12, 1921
.Mar. 14, 1923
.May 1, 1923
.May 14, 1923
Edward H. Cunningham...Chicago
Roy A. Young
Minneapolis .
Eugene Meyer
New York ...
Wayland W. Magee
Kansas City.
Eugene R. Black
Atlanta
M.S. Szymczak
Chicago
do
.Oct. 4, 1927
.Sept. 16, 1930
.May 18, 1931
.May 19, 1933
.June 14, 1933
J.J. Thomas
Marriner S. Eccles
do
.Nov. 15, 1934
Kansas City...
San Francisco
.do
.do
.do
.do
Joseph A. Broderick
New York ..
John K. McKee
Cleveland...
Ronald Ransom
Atlanta
Ralph W. Morrison
Dallas
Chester C. Davis
Richmond...
Ernest G. Draper
New York ..
Rudolph M. Evans
Richmond...
James K. Vardaman, Jr. ..St. Louis....
Lawrence Clayton
Boston
Thomas B. McCabe
Philadelphia
Edward L. Norton
Atlanta
Oliver S. Powell
Minneapolis
Wm. McC. Martin, Jr
New York ..
.Feb. 3, 1936
do
do
.Feb. 10, 1936
.June 25, 1936
.Mar. 30, 1938
.Mar. 14, 1942
.Apr. 4, 1946
.Feb. 14, 1947
.Apr. 15, 1948
.Sept. 1, 1950
do
.April 2, 1951
A.L. Mills, Jr
J.L. Robertson
C. Canby Balderston
Paul E. Miller
Chas. N. Shepardson
G.H. King, Jr
San Francisco
Kansas City...
Philadelphia...
Minneapolis ...
Dallas
Atlanta
.Feb. 18,
do
.Aug. 12,
.Aug. 13,
.Mar. 17,
.Mar. 25,
George W. Mitchell
Chicago
Aug. 31, 1961
1952
1954
1954
1955
1959
760
Federal Reserve Bulletin • September 1987
Federal Reserve
District
Name
Date of initial
oath of office
Other dates and information relating
to membership2
J. Dewey Daane
Sherman J. Maisel
Andrew F. Brimmer
William W. Sherrill
Arthur F. Burns
Richmond
San Francisco
Philadelphia
Dallas
New York
Nov. 29, 1963
Apr. 30, 1965
Mar. 9, 1966
May 1, 1967
Jan. 31, 1970
John E. Sheehan
Jeffrey M. Bucher
Robert C. Holland
Henry C. Wallich
Philip E. Coldwell
Philip C. Jackson, Jr
J. Charles Partee
StephenS. Gardner
David M. Lilly
G. William Miller
Nancy H. Teeters
Emmett J. Rice
Frederick H. Schultz
Paul A. Volcker
Lyle E. Gramley
Preston Martin
Martha R. Seger
Wayne D. Angell
Manuel H. Johnson
H. Robert Heller
Edward W. Kelley, Jr
Alan Greenspan,
St. Louis
San Francisco
Kansas City
Boston
Dallas
Atlanta
Richmond
Philadelphia
Minneapolis
San Francisco
Chicago
New York
Atlanta
Philadelphia
Kansas City
San Francisco
Chicago
Kansas City
Richmond
San Francisco
Dallas
New York
Jan. 4, 1972
June 5, 1972
June 11, 1973
Mar. 8, 1974
Oct. 29, 1974
July 14, 1975
Jan. 5, 1976
Feb. 13, 1976
June 1, 1976
Mar. 8, 1978
Sept. 18, 1978
June 20, 1979
July 27, 1979
Aug. 6, 1979
May 28, 1980
Mar. 31, 1982
July 2, 1984
Feb. 7, 1986
Feb. 7, 1986
Aug. 19, 1986
May 26, 1987
Aug. 11, 1987
Chairmen4
Charles S. Hamlin
Aug. 10, 1914-Aug. 9, 1916
W.P.G. Harding
Aug. 10, 1916-Aug. 9, 1922
Daniel R. Crissinger
May 1, 1923-Sept. 15, 1927
Roy A. Young
Oct. 4, 1927-Aug. 31, 1930
Eugene Meyer
Sept. 16, 1930-May 10, 1933
Eugene R. Black
May 19, 193 3-Aug. 15, 1934
Marriner S. Eccles
Nov. 15, 1934-Jan. 31, 1948
Thomas B. McCabe
Apr. 15, 1948-Mar. 31, 1951
Wm. McC. Martin, Jr. ...Apr. 2, 1951-Jan. 31, 1970
Arthur F. Burns
Feb. 1, 1970-Jan. 31, 1978
G. William Miller
Mar. 8, 1978-Aug. 6, 1979
Paul A. Volcker
Aug. 6, 1979-Aug. 11, 1987
Alan Greenspan
Aug. 11, 1987EX-OFFICIO
Served until Mar. 8, 1974.3
Served through May 31, 1972.
Resigned Aug. 31, 1974.
Reappointed in 1968. Resigned Nov. 15, 1971.
Term began Feb. 1, 1970. Resigned
Mar. 31, 1978.
Resigned June 1, 1975.
Resigned Jan. 2, 1976.
Resigned May 15, 1976.
Resigned Dec. 15, 1986
Served through Feb. 29, 1980.
Resigned Nov. 17, 1978.
Served until Feb. 7, 1986.3
Died Nov. 19, 1978.
Resigned Feb. 24, 1978.
Resigned Aug. 6, 1979.
Served through June 27, 1984.
Resigned Dec. 31, 1986.
Served through Feb. 11, 1982.
Resigned August 11, 1987.
Resigned Sept. 1, 1985.
Resigned April 30, 1986.
Vice Chairmen4
Frederic A. Delano
Paul M. Warburg
Albert Strauss
Edmund Piatt
J.J. Thomas
Ronald Ransom
C. Canby Balderston
J.L. Robertson
George W. Mitchell
Stephen S. Gardner
Frederick H. Schultz
Preston Martin
Manuel H. Johnson
Aug. 10, 1914-Aug. 9, 1916
Aug. 10, 1916-Aug. 9, 1918
Oct. 26, 1918-Mar. 15, 1920
July 23, 1920-Sept. 14, 1930
Aug. 21, 1934-Feb. 10, 1936
Aug. 6, 1936-Dec. 2, 1947
Mar. 11, 1955-Feb. 28, 1966
Mar. 1, 1966-Apr. 30, 1973
May 1, 1973-Feb. 13, 1976
Feb. 13, 1976-Nov. 19, 1978
July 27, 1979-Feb. 11, 1982
Mar. 31, 1982-Mar. 31, 1986
Aug. 22, 1986-
MEMBERS'
Secretaries of the Treasury
W.G. McAdoo
Dec. 23, 1913-Dec. 15, 1918
Carter Glass
Dec. 16, 1918-Feb. 1, 1920
David F. Houston
Feb. 2, 1920-Mar. 3, 1921
Andrew W. Mellon
Mar. 4, 1921-Feb. 12, 1932
Ogden L. Mills
Feb. 12, 1932-Mar. 4, 1933
William H. Woodin
Mar. 4, 1933-Dec. 31, 1933
Henry Morgenthau, Jr. ..Jan. 1, 1934-Feb. 1, 1936
Comptrollers of the Currency
John Skelton Williams ...Feb. 2, 1914-Mar. 2, 1921
Daniel R. Crissinger
Mar. 17, 1921-Apr. 30, 1923
Henry M. Dawes
May 1, 1923-Dec. 17, 1924
Joseph W. Mcintosh
Dec. 20, 1924-Nov. 20, 1928
J.W. Pole
Nov. 21, 1928-Sept. 20, 1932
J.F.T. O'Connor
May 11, 1933-Feb. 1, 1936
1. Under the provisions of the original Federal Reserve Act, the
Federal Reserve Board was composed of seven members, including
five appointive members, the Secretary of the Treasury, who was
ex-officio chairman of the Board, and the Comptroller of the
Currency. The original term of office was ten years, and the five
original appointive members had terms of two, four, six, eight, and
ten years respectively. In 1922 the number of appointive members
was increased to six, and in 1933 the term of office was increased to
twelve years. The Banking Act of 1935, approved Aug. 23, 1935,
changed the name of the Federal Reserve Board to the Board of
Governors of the Federal Reserve System and provided that the
Board should be composed of seven appointive members; that the
Secretary of the Treasury and the Comptroller of the Currency
should continue to serve as members until Feb. 1, 1936, or until
their successors were appointed and had qualified; and that
thereafter the terms of members should be fourteen years and that
the designation of Chairman and Vice Chairman of the Board should
be for a term of four years.
2. Date after words "Resigned" and "Retired" denotes final day
of service.
3. Successor took office on this date.
4. Chairman and Vice Chairman were designated Governor and
Vice Governor before Aug. 23, 1935.
1
Financial and Business Statistics
WEEKLY REPORTING
CONTENTS
Domestic
MONEY
Financial
Statistics
STOCK AND BANK
CREDIT
Reserves, money stock, liquid assets, and debt
measures
A4 Reserves of depository institutions, Reserve
Bank credit
A5 Reserves and borrowings—Depository
institutions
A6 Selected borrowings in immediately available
funds—Large member banks
A19
A20
A21
ALL
COMMERCIAL
BANKS
Assets and liabilities
All reporting banks
Banks in New York City
Branches and agencies of foreign banks
Gross demand deposits—individuals,
partnerships, and corporations
A3
POLICY
A7
A8
A9
INSTRUMENTS
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
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
MONETAR Y AND CREDIT AGGREGA TES
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
FINANCIAL
MARKETS
A23 Commercial paper and bankers dollar
acceptances outstanding
A23 Prime rate charged by banks on short-term
business loans
A24 Interest rates—money and capital markets
A25 Stock market—Selected statistics
A26 Selected financial institutions—Selected assets
and liabilities
FEDERAL
FINANCE
A28
A29
A30
A30
Federal fiscal and financing operations
U.S. budget receipts and outlays
Federal debt subject to statutory limitation
Gross public debt of U.S. Treasury—Types and
ownership
A31 U.S. government securities dealers—
Transactions
A32 U.S. government securities dealers—Positions
and financing
A33 Federal and federally sponsored credit
agencies—Debt outstanding
SECURITIES MARKETS AND
CORPORATE
FINANCE
A34 New security issues—State and local
governments and corporations
A35 Open-end investment companies—Net sales and
asset position
A35 Corporate profits and their distribution
2
Federal Reserve Bulletin • September 1987
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
A54 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
REAL
REPORTED BY BANKS
ESTATE
A38 Mortgage markets
A39 Mortgage debt outstanding
CONSUMER
INSTALLMENT
CREDIT
A40 Total outstanding and net change
A41 Terms
IN THE UNITED
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
Domestic
SECURITIES
SELECTED
Nonfinancial
Statistics
MEASURES
A44 Nonfinancial business activity—Selected
measures
A45 Labor force, employment, and unemployment
A46 Output, capacity, and capacity utilization
A47 Industrial production—Indexes and gross value
A49 Housing and construction
A50 Consumer and producer prices
A51 Gross national product and income
A52 Personal income and saving
International
SUMMARY
Statistics
STATISTICS
A53 U.S. international transactions—Summary
A54 U.S. foreign trade
A54 U.S. reserve assets
STATES
HOLDINGS
AND
TRANSACTIONS
A65 Foreign transactions in securities
A66 Marketable U.S. Treasury bonds and notes—
Foreign transactions
INTEREST AND EXCHANGE
RATES
A67 Discount rates of foreign central banks
A67 Foreign short-term interest rates
A68 Foreign exchange rates
A69 Guide to Tabular
Presentation,
Statistical Releases, and Special
Tables
SPECIAL
TABLES
A70 Terms of lending at commercial banks,
May 31, 1987
Money Stock and Bank Credit
1.10
A3
RESERVES, MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES
Monetary and credit aggregates
(annual rates of change, seasonally adjusted in percent) 1
Item
Q4
Q3
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base 1
.5
6
7
8
9
Concepts
Ml
M2
M3
L
Debt
of money,
Nontransaction
10 M2 5
11 M3 only 6
1987
1986
1987
Feb.'
Q2
Qi
Mar.
Apr.
May
June
institutions2
liquid assets,
and
21.0
21.9
21.3
9.7
24.3
22.8
25.3
11.0
16.4
16.5
18.5
11.3
8.0
8.4
5.4
6.8
-.2
-3.3
.3
7.6
-.4
5.9
.2
2.9
23.3
25.5
13.6
9.9
8.2
3.1'
7.5'
8.7
-13.0
-15.9
-7.9
.6
16.5
10.6
9.7
8.1
12.5'
17.0
9.2
8.0
8.2
12. V
13.1
6.3
6.3'
6.4'
10.4'
6.4
2.6
4.1
n.a.
9.0
-.3
-.3
1.3
2.4
5.2
3.3'
1.4
1.6'
-2.9'
8.2'
17.7
6.1'
5.8'
4.2'
9.7'
4.5
.4'
4.8'
9.2
10.2
-10.2
1.3
5.4
n.a.
n.a.
8.6
6.2
6.6
3.2 r
4.0'
6.4'
1.2
10.3
-.3
7.5
.6
2.6'
2.1'
4.3'
-1.0'
22.6'
5.5
21.8
25.0
-7.5
-1.5
36.9
-10.7
.1
37.3
-4.9
9.7
24.1
-4.6
18.3
34.5
-6.9
1.2
28.5
-8.6
12.2
27.8
-8.3
27.7
16.0
-1.3
18.4
6.9
10.1
17.0
21.0
-3.4
2.8
23.2
-6.4
-7.0
27.3
-4.3'
-9.5'
25.7
1.5
-8.4
32.1
-2.7
-13.2
28.6'
.2
-9.5'
30.5
1.5'
-19.1
16.9
-.2'
2.4
12.7
11.8
8.9
9.7'
10.6'
10.1
9.5
8.8
7.0
3.0
5.9
.9
5.9'
9.0'
3.8
8.4'
10.1'
11.9
15.1
8.7
7.4
n.a.
n.a.
3.2
debt4
components
Time and savings
deposits
Commercial banks
Savings 7
Small-denomination time 8
Large-denomination t i m e 9 1 0
Thrift institutions
Savings 7
15
16
Small-denomination time
Large-denomination time 9
17
12
13
14
Debt
components4
18 Federal
19 Nonfederal
20 Total loans and securities at commercial b a n k s "
14.1"
11.9'
10.6
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 f r o m the actual series. Similarly, in adjusting for discontinuities in the monetary base, required clearing balances and adjustments to
compensate for float also are subtracted f r o m 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 c o m p o n e n t s 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:
M l : (I) currency outside the Treasury, Federal Reserve Banks, and the vaults
of commercial banks; (2) travelers checks of nonbank issuers; (3) demand deposits
at ail 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 O C D 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, Money Market Deposit Accounts
(MMDAs), savings and small-denomination time deposits (time deposits—including retail RPs—in amounts of less than $100,000), and balances in both taxable and
tax-exempt general purpose and broker/dealer money market mutual funds.
Excludes individual retirement accounts (IRA) and Keogh balances at depository
institutions and money market funds. Also excludes all balances held by U.S.
11.5'
12. y
9.1
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 f u n d s .
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. T h e source of data on domestic
nonfinancial debt is the Federal Reserve B o a r d ' s flow of f u n d s accounts. Debt
data are based on monthly averages. Growth rates for debt reflect adjustments for
discontinuities over time in the levels of debt presented in other tables.
5. Sum of overnight RPs and Eurodollars, money market fund balances
(general purpose and broker/dealer), M M D A s , and savings and small time
deposits less the estimated amount of demand deposits and vault cash held by
thrift institutions to service their time and savings deposit liabilities.
6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents,
money market fund balances (institution-only), less a consolidation adjustment
that represents the estimated amount of overnight RPs and Eurodollars held by
institution-only money market mutual funds.
7. Excludes MMDAs.
8. Small-denomination time deposits—including retail RPs—are those issued
in amounts of less than $100,000. All IRA and Keogh accounts at commercial
banks and thrifts are subtracted from small time deposits.
9. Large-denomination time deposits are those issued in amounts of $100,000
or more, excluding those booked at international banking facilities.
10. Large-denomination time deposits at commercial banks less those held by
money market mutual funds, depository institutions, and foreign banks and
official institutions.
11. Changes calculated from figures shown in table 1.23.
A4
DomesticNonfinancialStatistics • September 1987
1.11
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
1987
1987
Factors
Apr.
May
June
230,049
241,800
235,851
245,284
239,658
237,479
231,027
231,672
231,766
240,768
203,630
201,662
1,968
8,220
7,703
517
0
872
604
16,723
11,079
5,018
17,744
213,797
206,318
7,479
10,065
7,683
2,382
0
1,179
645
16,114
11,073
5,018
17,795
210,941
208,728
2,213
8,030
7,683
347
0
737
724
15,419
11,069
5,018
17,866
216,195
206,051
10,144
10,785
7,683
3,102
0
768
210
17,327
11,074
5,018
17,783
212,250
205,674
6,576
10,011
7,683
2,328
0
891
1,016
15,491
11,072
5,018
17,797
210,803
206,414
4,389
9,446
7,683
1,763
0
1,427
674
15,129
11,072
5,018
17,811
206,629
206,629
0
7,683
7,683
0
0
760
928
15,026
11,070
5,018
17,835
207,889
207,889
0
7,683
7,683
0
0
619
493
14,988
11,070
5,018
17,849
207,434
206,895
539
7,726
7,683
43
0
651
821
15,134
11,069
5,018
17,863
215,306
210,886
4,420
8,132
7,683
449
0
823
757
15,750
11,069
5,018
17,877
209,684
530
212,064
523
214,465
507
211,745
528
212,004
525
212,890
520
213,783
513
214,502
514
214,795
511
214,356
502
7,163
279
16,028
314
8,776
246
21,006
317
14,940
286
12,684
258
5,067
282
3,712
223
3,879
228
14,570
237
2,211
424
2,095
407
2,072
404
1,951
375
2,041
374
1,955
362
2,206
385
2,103
364
2,239
361
2,036
333
May 13
May 20
May 27
June 3
June 10
June 17
June 24
SUPPLYING RESERVE F U N D S
1 Reserve Bank credit outstanding
2
U.S. government securities 1
3
Bought outright
4
Held under repurchase a g r e e m e n t s . . . .
5
Federal agency obligations
6
Bought outright
7
Held under repurchase a g r e e m e n t s . . . .
8
Acceptances
9
Loans
10
Float
11
Other Federal Reserve assets
12 Gold stock 2
13 Special drawing rights certificate a c c o u n t . . . .
14 Treasury currency outstanding
ABSORBING RESERVE F U N D S
15 Currency in circulation
16 Treasury cash holdings 2
Deposits, other than reserve balances, with
Federal Reserve Banks
17
Treasury
18
Foreign
19
Service-related balances and
adjustments
20
Other
21 Other Federal Reserve liabilities and
capital
22 Reserve balances with Federal
Reserve Banks 3
6,896
6,910
6,814
6,988
6,932
6,848
6,507
6,613
6,891
6,950
36,701
37,344
36,520
36,248
36,443
35,863
36,207
37,577
36,811
35,748
End-of-month figures
Wednesday
1987
figures
1987
Apr.
May
June
23 Reserve Bank credit outstanding
249,706
231,880
239,216
245,848
230,812
241,687
229,511
220,591
235,159
242,395
24
25
26
27
28
29
30
31
32
33
218,883
205,112
13,771
11,039
7,683
3,356
0
2,464
126
17,914
207,304
207,304
0
7,683
7,683
0
0
832
922
15,139
212,306
210,248
2,058
8,679
7,683
996
0
972
1,579
15,680
215,517
205,862
9,655
11,669
7,683
3,986
0
751
364
17,547
203,105
200,054
3,051
9,116
7,683
1,433
0
1,591
1,846
15,154
214,754
205,853
8,901
9,109
7,683
1,426
0
797
1,557
15,470
204,230
204,230
0
7,683
7,683
0
0
653
1,624
15,321
206,811
206,811
0
7,683
7,683
0
0
582
452
15,063
210,326
206,555
3,771
7,985
7,683
302
0
716
772
15,360
216,671
210,712
5,959
8,394
7,683
711
0
760
645
15,925
11,076
5,018
17,767
11,070
5,018
17,823
11,069
5,018
17,889
11,073
5,018
17,795
11,071
5,018
17,809
11,070
5,018
17,823
11,070
5,018
17,847
11,069
5,018
17,861
11,068
5,018
17,875
11,069
5,018
17,889
210,265
531
213,547
514
215,201
492
212,077
526
212,355
520
213,706
512
214,218
511
214,941
514
214,807
503
214,300
499
29,688
343
6,383
320
13,774
318
19,914
258
12,608
297
10,832
355
4,359
296
2,811
234
8,126
232
16,356
208
1,812
533
1,779
372
1,775
458
1,791
394
1,793
1,778
446
1,779
375
1,822
378
1,823
389
1,771
374
May 13
May 20
May 27
June 3
June 10
June 17
June 24
SUPPLYING RESERVE F U N D S
U . S . government securities'
Bought outright
Held under repurchase a g r e e m e n t s . . . .
Federal agency obligations
Bought outright
Held under repurchase a g r e e m e n t s . . . .
Acceptances
Loans
Float
Other Federal Reserve assets
34 Gold stock 2
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 2
Deposits, other than reserve balances with
Federal Reserve Banks
39
Treasury
40
Foreign
41
Service-related balances and
adjustments
42
Other
43 Other Federal Reserve liabilities and
capital
44 Reserve balances with Federal
Reserve Banks 3
7,057
6,511
6,847
6,676
33,337
36,365
34,327
38,097
1. Includes securities loaned—fully guaranteed by U.S government securities
pledged with Federal Reserve Banks—and excludes any securities sold and
scheduled to be bought back under matched sale-purchase transactions.
2. Revised for periods between October 1986 and June 1987. At times during
this interval, outstanding gold certificates were inadvertently in excess of the gold
298
6,579
30,260
6,789
6,285
6,514
6,785
6,832
41,179
35,623
37,327
36,456
36,031
stock. Revised data not included in this table are available f r o m the Division of
Research and Statistics, Banking Section.
3. Excludes required clearing balances and adjustments to compensate for
float.
NOTE. For amounts of currency and coin held as reserves, see table 1.12.
Money Stock and Bank Credit
1.12
RESERVES A N D BORROWINGS
A5
Depository Institutions
Millions of dollars
Monthly averages 8
Reserve classification
1
7
3
4
S
6
7
8
9
10
Reserve balances with Reserve Banks'
Total vault cash*
Vault 3
Surplus
Total reserves
Required reserves
Excess reserve balances at Reserve Banks 6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
1987
1984
1985
1986
1986
Dec.
Dec.
Dec.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
21,738
22,313
18,958
3,355
40,696
39,843
853
3,186
113
2,604
27,620
22,953
20,522
2,431
48,142
47,085
1,058
1,318
56
499
37,360
24,071
22,199
1,872
59,560
58,191
1,369
827
38
303
34,803
23,543
21,595
1,947
56,399
55,421
978
752
70
418
37,360
24,071
22,199
1,872
59,560
58,191
1,369
827
38
303
36.584
25,049
23,084
1,965
59,668
58,600
1,068
580
34
225
33,625
25,889
23,435
2,454
57,060
55,849
1,211
556
71
283
35,318
23,759
21,743
2,016
57,061
56,146
916
527
91
264
37,807
23,353
21,587
1,767
59,393
58,566
827
993
120
270
36,466
23,693
21,873
1,820
58,339
57,260
1,079
1,035
196
288
Biweekly averages of daily figures for weeks ending
1987
11
12
13
14
15
16
17
18
19
20
1
Reserve balance^ with Reserve Banks
Total vault cash*
Vault 3
Surplus
Total reserves
Required reserves
Excess reserve balances at Reserve Banks 6
Total borrowings at Reserve Banks
Seasonal borrowings at Reserve Banks
Extended credit at Reserve Banks
Mar. 11
Mar. 25
Apr. 8
Apr. 22
May 6
May 20
June 3
June 17
July V
July 15'"'
35,400
23,662
21,582
2,080
56,982
56,021
961
466
83
275
34,809
24,077
22,038
2,039
56,847
55,866
981
528
96
263
36,358
23,198
21,350
1,848
57,708
57,029
679
641
98
248
38,746
23,479
21,761
1,719
60,506
59,703
804
956
110
267
37,612
23,289
21,519
1,770
59,131
58,115
1,016
1,410
159
299
36,327
23,552
21,801
1,751
58,128
57,066
1,063
830
190
276
36,022
24,094
22,151
1,943
58,173
57,048
1,125
1,094
226
297
37,189
23,668
21,976
1,692
59,165
58,307
858
635
233
254
35,496
25,215
23,092
2,123
58,588
56,941
1,647
856
298
289
37,117
24,238
22,466
1,773
59,583
59,066
517
696
271
261
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
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.
A6
DomesticNonfinancialStatistics • September 1987
1.13
SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS
Large Member Banks 1
Averages of daily figures, in millions of dollars
1987 week ending Monday
Maturity and source
1
2
3
4
Federal funds purchased, repurc hase agreements,
and
other selected borrowing in immediately
available
funds
From commercial banks in the United States
For one day or under continuing contract
For all other maturities
From other depository institutions, foreign banks and
foreign official institutions, and United States government agencies
For one day or under continuing contract
For all other maturities
Mar. 16
Mar. 23
Mar. 30
Apr. 6
Apr. 13
Apr. 20'
Apr. 27
May 4
May 11
78,545
8,385
76,854
8,387
74,628
8,312
80,467
8,639
81,639
8,974
80,380
9,877
72,677
8,966
74,589
8,951
72,245
9,378
42,569 r
7,108'
39,346 r
7,001'
39,666'
7,487'"
38,912'
7,996'
42,536'"
8,039'
35,818'
8,381'
35,509
8,384
36,261
9,872
37,474
9,708
Repurchase agreements on U.S. government and federal
agency securities in immediately available funds
Brokers and nonbank dealers in securities
For one day or under continuing contract
For all other maturities
All other customers
For one day or under continuing contract
For all other maturities
12,226
9,638
11,325
10,345
12,120
10,525
12,806
9,347
12,556
9,869
12,495
13,167
12,713
13,596
12,815
15,000
11,755
14,898
26,848
9,209
25,636
9,399
25,813
9,874
26,223
9,940
26,048'
10,332
21,149
12,483
24,810
9,038
24,187
8,796
23,189
8,702
MEMO: Federal funds loans and resale agreements in immediately available funds in maturities of one day or
under continuing contract
9 T o commercial banks in the United States
10 To all other specified customers 2
26,854
11,485
25,703
11,926
23,914
10,282
29,107
11,329
28,649
11,124
30,933
11,615
29,588
13,656
32,481
12,864
27,347
11,449
5
6
7
8
1. Banks with assets of $1 billion or more as of Dec. 31, 1977 .
2. Brokers and nonbank dealers in securities; other depository institutions;
foreign banks and official institutions; and United States government agencies.
Policy Instruments
1.14
A7
FEDERAL RESERVE BANK INTEREST RATES
Percent per annum
C u r r e n t and p r e v i o u s levels
Extended creditS h o r t - t e r m a d j u s t m e n t credit and
s e a s o n a l credit
First 60 d a y s of
borrowing
Federal Reserve
Bank
N e x t 90 d a y s of
borrowing
A f t e r 150 d a y s
Effective date for
current rates
Rate on
7/28/87
Effective
date
Previous
rate
R a t e on
7/28/87
Previous
rate
Rate on
7/28/87
Previous
rate
R a t e on
7/28/87
Previous
rate
5Vi
8/21/86
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
6
5V>
6
6Vi
7
IVi
8
Boston
N e w York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. L o u i s
Minneapolis
K a n s a s City
Dallas
San Francisco . . .
5 Vi
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
8/21/86
6
5Vi
6
6 Vi
IVi
7
8/21/86
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
8/21/86
8/22/86
8/21/86
8/21/86
8/21/86
8/21/86
8
R a n g e of rates in recent y e a r s 3
Range(or
level)—
All F . R .
Banks
F.R.
Bank
of
N.Y.
7 Vi
7Vi-8
8
7V+-8
73/4
7 Vi
8
8
73/4
73/4
71/4-73/4
7V4-73/4
71/4
6-V4-7V4
63/4
61/4-63/4
6V4
6-6V4
6
73/4
IV*
IV*
63/4
63/4
6V4
6V4
6
6
1976—Jan.
19
23
N o v . 22
26
5vi-6
5Vi
5V4-5 Vi
5V4
5 Vi
SVi
5V4
5V4
1977—Aug. 30
31
Sept. 2
O c t . 26
5V4-53/4
5V4-53/4
53/4
6
5V4
53/4
53/4
6
6 - 6 Vi
6 Vi
6Vi-7
7
1-1V*
m
6 Vi
6 Vi
1
1
IV4
m
Effective date
In e f f e c t D e c . 31, 1973
1974—Apr. 25
30
Dec. 9
16
1975—Jan.
6
10
24
Feb. 5
7
Mar. 10
14
M a y 16
23
Range(or
level)—
AH F . R .
Banks
F.R.
Bank
of
N.Y.
1978-- A u g . 21
Sept. 22
O c t . 16
20
Nov. 1
73/4
8
8-8Vi
8 V2
SV2-9V2
9V2
73/4
8
SVi
8V2
m
9 Vi
1979-- J u l y 20
Aug. 17
70
Sept. 19 .
21
Oct.
8
10
10
lO-lOVi
10W
10Vi-ll
11
11-12
12
10
lOVi
lOVi
11
11
12
12
Effective
15
19
May 79
30
J u n e 13
16
July 78
29
S e p t . 76
N o v . 17
Dec. 5
8
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13
13
13
12
11
11
10
10
11
12
13
13
5
8
?
6
4
13-14
14
13-14
13
12
14
14
13
13
12
1980-- F e b .
1978—Jan.
9
20
M a y 11
12
July
3
July 10
1981--- M a y
Nov.
Dec.
1. A f t e r M a y 19, 1986, the highest rate within the s t r u c t u r e of d i s c o u n t rates
may be c h a r g e d o n a d j u s t m e n t credit l o a n s of unusual size that result f r o m a m a j o r
o p e r a t i n g p r o b l e m at the b o r r o w e r ' s facility.
A t e m p o r a r y simplified s e a s o n a l p r o g r a m w a s established o n M a r . 8, 1985, a n d
the interest rate w a s a fixed rate Vi p e r c e n t a b o v e t h e rate on a d j u s t m e n t credit.
T h e p r o g r a m w a s r e - e s t a b l i s h e d on F e b . 18, 1986 and again o n J a n . 28, 1987; the
rate may be either t h e s a m e a s that f o r a d j u s t m e n t credit or a fixed rate Vi p e r c e n t
higher.
2. Applicable to a d v a n c e s w h e n e x c e p t i o n a l c i r c u m s t a n c e s or p r a c t i c e s involve
only a particular depository institution and to a d v a n c e s when a n institution is
u n d e r s u s t a i n e d liquidity p r e s s u r e s . A s a n alternative, f o r loans o u t s t a n d i n g f o r
m o r e t h a n 150 d a y s , a F e d e r a l R e s e r v e B a n k m a y charge a flexible rate that t a k e s
into a c c o u n t rates o n m a r k e t s o u r c e s of f u n d s , but in n o c a s e will the rate c h a r g e d
b e less t h a n the basic rate plus o n e p e r c e n t a g e point. W h e r e credit provided to a
particular d e p o s i t o r y institution is a n t i c i p a t e d t o be o u t s t a n d i n g f o r a n unusually
prolonged period a n d in relatively large a m o u n t s , the time period in which e a c h
Range(or
level)—
All F . R .
Banks
F.R.
Bank
of
N.Y.
20
23
2
3
16
27
30
O c t . 12
13
N o v . 22
26
D e c . 14
15
17
11V^—12
llVi
11-1IVi
11
10 Vi
lO-lOVi
10
9Vi-10
9Vi
9-9Vi
9
8Vi-9
8Vi-9
8 Vi
11 Vi
HVi
11
11
lOVi
10
10
91/!
9Vi
9
9
9
8l/<
SVi
9
13
N o v . 21
26
D e c . 24
8Vi-9
9
8Vi-9
8Vi
8
9
9
SVz
8Vi
8
20
24
7Vi-8
IVi
7Vi
IVi
7
10
A p r . 21
23
July 11
A u g . 21
22
1-1 Vi
1
6V1-I
6 Vi
6
5Vi-6
SVi
1
1
6 Vi
6V1
6
5Vi
5Vi
In e f f e c t July 28, 1987
5Vi
5Vi
Effective date
1982—July
Aug.
1984—Apr.
1985—May
1986—Mar.
rate u n d e r this s t r u c t u r e is applied may be s h o r t e n e d . S e e section 201.3(b)(2) of
Regulation A.
3. R a t e s f o r s h o r t - t e r m a d j u s t m e n t credit. F o r d e s c r i p t i o n a n d earlier d a t a see
the following publications of the Board of G o v e r n o r s : Banking and
Monetary
Statistics. 1914-1941. a n d 1941-1970; Annual Statistical Digest. 1970-1979,
1980.
1981, and 1982.
In 1980 and 1981, the F e d e r a l R e s e r v e applied a s u r c h a r g e to s h o r t - t e r m
a d j u s t m e n t credit b o r r o w i n g s by institutions with d e p o s i t s of $500 million o r m o r e
that had b o r r o w e d in s u c c e s s i v e w e e k s o r in m o r e t h a n 4 w e e k s in a c a l e n d a r
q u a r t e r . A 3 p e r c e n t s u r c h a r g e w a s in e f f e c t f r o m M a r . 17, 1980, t h r o u g h M a y 7,
1980. T h e r e w a s n o s u r c h a r g e until N o v . 1 7 , 1 9 8 0 , w h e n a 2 p e r c e n t s u r c h a r g e w a s
a d o p t e d ; the s u r c h a r g e w a s s u b s e q u e n t l y raised to 3 p e r c e n t o n D e c . 5 , 1 9 8 0 , a n d
to 4 percent o n May 5, 1981. T h e s u r c h a r g e w a s r e d u c e d to 3 p e r c e n t e f f e c t i v e
Sept. 22, 1981. and t o 2 p e r c e n t e f f e c t i v e O c t . 12. A s of O c t . 1, the f o r m u l a f o r
applying the s u r c h a r g e w a s c h a n g e d f r o m a c a l e n d a r q u a r t e r to a m o v i n g 13-week
period. T h e s u r c h a r g e w a s eliminated on N o v . 17, 1981.
A8
DomesticNonfinancialStatistics • September 1987
1.15
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Percent of deposits
Type of deposit, i^nd
deposit interval"
Depository institution requirements
after implementation of the
Monetary Control Act
Effective date
Net transaction accounts' '4
$0 million-$36.7 m i l l i o n . . . .
More than $36.7 million . . .
12/30/86
12/30/86
Nonpersonal time deposits5
By original maturity
Less than 1 Vi years
IVi years or more
10/6/86
10/6/83
Eurocurrency
All types
liabilities
1. Reserve requirements in effect on Dec. 31, 1986. Required reserves must be
held in the form of deposits with Federal Reserve Banks or vault cash.
N o n m e m b e r s may maintain reserve balances with a Federal Reserve Bank
indirectly on a pass-through basis with certain approved institutions. For previous
reserve requirements, see earlier editions of the Annual Report and of the
FEDERAL RESERVE BULLETIN. Under provisions of the Monetary Control Act,
depository institutions include commercial banks, mutual savings banks, savings
and loan associations, credit unions, agencies and branches of foreign banks, and
Edge corporations.
2. The G a r n - S t . Germain Depository Institutions Act of 1982 (Public Law
97-320) requires that $2 million of reservable liabilities (transaction accounts,
nonpersonal time deposits, and Eurocurrency liabilities) of each depository
institution be subject to a zero percent reserve requirement. The Board is to adjust
the amount of reservable liabilities subject to this zero percent reserve requirement each year for the succeeding calendar year by 80 percent of the percentage
increase in the total reservable liabilities of all depository institutions, measured
on an annual basis as of June 30. No corresponding adjustment is to be made in
the event of a decrease. On Dec. 30, 1986, the exemption was raised from $2.6
million to $2.9 million. In determining the reserve requirements of depository
institutions, the exemption shall apply in the following order: (1) net N O W
accounts ( N O W accounts less allowable deductions); (2) net other transaction
accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting
11/13/80
with those with the highest reserve ratio. With respect to N O W accounts and
other transaction accounts, the exemption applies only to such a c c o u n t s that
would be subject to a 3 percent reserve requirement.
3. Transaction accounts include all deposits on which the account holder is
permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, and telephone and preauthorized transfers in excess of
three per month for the purpose of making payments to third persons or others.
However, MMDAs and similar accounts subject to the rules that permit no more
than six preauthorized, automatic, or other transfers per month, of which no more
than three can be checks, are not transaction accounts (such accounts are savings
deposits subject to time deposit reserve requirements).
4. The Monetary Control Act of 1980 requires that the amount of transaction
accounts against which the 3 percent reserve requirement applies be modified
annually by 80 percent of the percentage increase in transaction accounts held by
all depository institutions, determined as of June 30 each year. Effective Dec. 30,
1986, the amount was increased from $31.7 million to $36.7 million.
5. In general, nonpersonal time deposits are time deposits, including savings
deposits, that are not transaction accounts and in which a beneficial interest is
held by a depositor that is not a natural person. Also included are certain
transferable time deposits held by natural persons and certain obligations issued
to depository institution offices located outside the United States. For details, see
section 204.2 of Regulation D.
Policy Instruments
1.17
A9
FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
1987
1986
Type of transaction
1984
1985
1986
Nov.
Dec.
Jan.
Mar.
Feb.
May
Apr.
U . S . TREASURY SECURITIES
Outright transactions (excluding
transactions)
1
2
3
4
Treasury bills
Gross purchases
Gross sales
Exchange
Redemptions
5
6
7
8
9
matched
20,036
8,557
0
7,700
22,214
4,118
0
3,500
22,602
2,502
0
1,000
3,318
0
0
0
5,422
0
0
0
997
583
0
0
191
3,581
0
800
1,062
0
0
0
4,226
653
0
0
1,697
0
0
0
Others within 1 year
Gross purchases
Gross sales
Maturity shift
Exchange
Redemptions
1,126
0
16,354
-20,840
0
1,349
0
19,763
-17,717
0
190
0
18,673
-20,179
0
190
0
2,974
-1,810
0
0
0
1,280
-1,502
0
0
0
611
0
0
0
0
1,855
-4,954
0
0
0
1,762
-1,799
0
1,232
0
1,375
-522
0
0
0
4,063
-1,336
0
10
11
12
13
1 to 5 years
Gross purchases
Gross sales
Maturity shift
Exchange
1,638
0
-13,709
16,039
2,185
0
-17,459
13,853
893
0
-17,058
16,984
893
0
-2,414
1,510
0
0
-1,280
1,502
0
0
-591
0
0
252
-1,650
4,354
0
0
-1,762
1,799
3,642
0
-1,373
522
0
0
-1,804
1,111
14
15
16
17
5 to 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
536
300
-2,371
2,750
458
100
-1,857
2,184
236
0
-1,620
2,050
236
0
-560
200
0
0
0
0
0
0
-20
0
0
0
-204
400
0
0
0
0
914
0
-3
0
0
0
-2,259
150
18
19
20
21
Over 10 years
Gross purchases
Gross sales
Maturity shift
Exchange
441
0
-275
2,052
293
0
-447
1,679
158
0
0
1,150
158
0
0
100
0
0
0
0
0
0
0
0
0
0
0
200
0
0
0
0
669
0
0
0
0
0
0
75
22
23
24
All maturities
Gross purchases
Gross sales
Redemptions
23,776
8,857
7,700
26,499
4,218
3,500
24,078
2,502
1,000
4,795
0
0
5,422
0
0
997
583
0
191
3,833
800
1,062
0
0
10,683
653
0
1,697
0
0
Matched
transactions
25 Gross sales
26 Gross purchases
808,986
810,432
866,175
865,968
927,997
927,247
60,146
60,232
91,404
88,730
63,865
65,145
82,086
81,387
72,306
73,476
83,822
82,494
91,642
92,137
Repurchase
agreements2
27 Gross purchases
28 Gross sales
127,933
127,690
134,253
132,351
170,431
160,268
16,888
15,471
44,303
32,028
36,373
46,897
0
3,168
5,657
5,657
37,653
23,881
59,340
73,111
8,908
20,477
29,989
6,298
15,023
-8,830
-8,307
2,231
22,474
-11,580
0
0
256
0
0
162
0
0
398
0
0
125
0
0
0
0
0
110
0
0
0
0
0
0
0
0
37
0
0
11,509
11,328
22,183
20,877
31,142
30,522
1,622
1,274
5,488
3,522
4,714
6,171
0
857
897
89 7
9,265
5,908
16,071
19,428
-76
1,144
222
223
1,965
-1,567
-857
0
3,320
-3,357
36 Repurchase agreements, net
-418
0
0
0
0
0
0
0
0
0
37 Total net change in System Open Market
Account
8,414
21,621
30,211
6,522
16,988
-10,397
-9,165
2,231
25,794
-14,936
29 Net change in U . S . government securities
F E D E R A L A G E N C Y OBLIGATIONS
Outright
transactions
30 Gross purchases
31 Gross sales
32 Redemptions
Repurchase
agreements2
33 Gross purchases
34 Gross sales
35 Net change in federal agency obligations
*
B A N K E R S ACCEPTANCES
1. Sales, redemptions, and negative figures reduce holdings of the System
Open Market Account; all other figures increase such holdings. Details may not
add to totals because of rounding.
2. In July 1984 the Open Market Trading Desk discontinued accepting bankers
acceptances in repurchase agreements,
A10
1.18
DomesticNonfinancialStatistics • September 1987
FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements 1
Millions of dollars
Account
May 27
June 3
Wednesday
End of month
1987
1987
June 10
June 17
June 24
Apr.
May
June
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
Loans
4
To depository institutions
5
Other
6 Acceptances held under repurchase agreements
Federal agency obligations
7
Bought outright
8
Held under repurchase agreements
U.S. Treasury securities
Bought outright
9
Bills
10
Notes
11
Bonds
12
Total bought outright 2
13
Held under repurchase agreements
14 Total U.S. Treasury securities
15 Total loans and securities
16 Items in process of collection
17 Bank premises
Other assets
18
Denominated in foreign currencies
19
All other 4
20 Total assets
11,072
5,018
484
11,070
5,018
466
11,069
5,018
463
11,068
5,018
469
11,069
5.018
463
11,076
5,018
517
11,070
5,018
476
11,069
5,018
451
797
0
0
653
0
0
582
0
0
716
0
0
760
0
0
2,464
0
0
832
0
0
972
0
0
7,683
1,426
7.683
0
7,683
0
7,683
302
7,683
711
7,683
3,356
7,683
0
7,683
996
105,799
73,303
26,751
205,853
8,901
214,754
104,176
73.303
26,751
204,230
0
204,230
106,757
73,303
26.751
206,811
0
206,811
106,501
73,303
26,751
206,555
3,771
210,326
108,166
73,522
276,024
210,712
5,959
216,671
105,058
73,378
26,676
205,112
13,771
218,883
107,250
73,303
26,751
207,304
0
207,304
107,702
75,522
27,024
210,248
2,058
212,306
224,660
212,566
215,076
219,027
225,825
232,386
215,819
221,957
9,379
678
8,242
679
6.209
679
7,527
683
6,440
680
6,203
675
6,356
678
9,801
683
8,195
6,597
8,036
6,606
7,850
6,534
7,858
6,813
7,863
7,382
8,283
8,236
8,035
6,426
7,782
7,183
266,083
252,683
252,898
258,463
264,740
272,394
253,878
263,944
LIABILITIES
196,882
197,348
198,055
197,903
197,373
193,547
196,714
198,255
22
23
24
25
42,957
10,832
355
446
37,402
4,359
296
375
39,149
2,811
234
378
38,279
8,126
232
389
37,802
16,356
208
374
35,149
29,688
343
533
38,144
6,383
320
372
36,102
13,774
318
458
26 Total deposits
54,590
42,432
42,572
47,026
54,740
65,713
45,219
50,652
7,822
2,588
6,618
2,228
5,757
2,302
6,749
2,573
5,795
2,604
6,077
2,696
5,434
2,300
8,190
2,356
261,882
248,626
248,686
254,251
260,512
268,033
249,667
259,453
1,950
1,873
378
1,952
1,873
232
1,953
1,873
386
1,954
1,873
385
1,956
1,873
399
1,921
1,873
567
1,950
1,873
388
1,961
1,873
657
33 Total liabilities and capital accounts
266,083
252,683
252,898
258,463
264,740
272,394
253,878
263,944
34 MEMO: Marketable U.S. Treasury securities held in
custody for foreign and international account
179,473
182,495
178,565
179,846
177,808
174,715
181,247
183,125
21 Federal Reserve notes
Deposits
T o depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
27 Deferred credit items
28 Other liabilities and accrued dividends
29 Total liabilities
CAPITAL ACCOUNTS
30 Capital paid in
31 Surplus
32 Other capital accounts
Federal Reserve note statement
35 Federal Reserve notes outstanding issued to bank
36
LESS: Held by bank
Federal Reserve notes, net
37
Collateral held against notes net:
38
Gold certificate account
Special drawing rights certificate account
39
40
Other eligible assets
U.S. Treasury and agency securities
41
241,622
44,740
196,882
241,896
44,548
197,348
242,158
44,103
198,055
243,010
45,107
197,903
243,945
46.572
197,373
240,164
46,617
193,547
241.604
44,890
196,714
244,360
46,105
198,255
11,072
5,018
0
180,792
11,070
5,018
0
181,260
11,069
5,018
0
181,968
11,068
5,018
0
181,817
11.068
5.018
0
181.287
11,076
5,018
0
177,453
11,070
5,018
0
180,626
11,069
5,018
0
182,168
42 Total collateral
196,882
197,348
198,055
197,903
197,373
193,547
196,714
198,255
1. Some of these data also appear in the Board's H.4.1 (503) release. For
address, see inside front cover.
2. Includes securities loaned—fully guaranteed by U.S. Treasury securities
pledged with Federal Reserve Banks—and excludes securities sold and scheduled
to be bought back under matched sale-purchase transactions.
3. Valued monthly at market exchange rates.
4. Includes special investment account at the Federal Reserve Bank of Chicago
in Treasury bills maturing within 90 days.
5. Includes exchange-translation account reflecting the monthly revaluation at
market exchange rates of foreign-exchange commitments.
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holdings
Millions of dollars
End of month
Wednesday
Type and maturity groupings
May 27
June 3
June 10
June 17
June 24
Apr. 30
May 29
June 30
1 Loans—Total
2
Within 15 days
3
16 days to 90 days
4
91 days to 1 year
797
781
16
0
653
548
105
0
582
460
122
0
716
689
27
0
760
742
18
0
2.464
2.413
51
0
832
752
80
0
972
887
85
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
9 U.S. Treasury securities—Total . .
10
Within 15 days 1
11
16 days to 80 days
12
91 days to 1 year
13
Over 1 year to 5 years
14
Over 5 years to 10 years
15
Over 10 years
214,754
21,002
47,788
66,364
41,160
14,430
24,010
204,230
9,440
48,411
66,838
41,100
14,430
24,011
206,811
10,860
51,710
64,700
41,100
14,430
24,011
210,326
11,801
50,807
68,177
41,100
14,430
24.011
216,671
17,979
48,208
68,987
42.494
14,742
24.261
218,883
21,640
48,780
66,830
41,159
16,538
23.936
207,304
8.970
51,848
66,885
41,160
14,430
24,011
212,306
8,789
51,563
70.995
41,956
14,742
24,261
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
9,109
1,707
532
1,521
3,763
1,306
280
7.683
73
777
1.484
3,763
1,306
280
7,683
18
759
1,509
3,824
1,293
280
7,985
531
618
1,439
3.824
1,293
280
8,394
939
619
1.439
3,824
1,293
280
11,039
3.487
669
1.547
3,750
1,306
280
7,683
281
532
1,521
3,763
1,306
280
8,679
1,229
614
1,449
3,814
1,293
280
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 1987
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS A N D MONETARY BASE
Billions of dollars, averages of daily figures
item
1983
Dec.
1984
Dec.
1985
Dec.
19i56
Nov.
2
3
4
5
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Seasonally adjustec
ADJUSTED FOR
1 Total reserves 2
1987
1986
Dec.
36.16
39.51
46.06
56.17
54.49
56.17
56.88
56.87
56.85
57.95
58.35
57.72
35.38
35.38
35.59
185.38
36.32
38.93
38.66
199.20
44.74
45.24
45.00
217.32
55.34
55.64
54.80
239.51
53.74
54.16
53.51
236.88
55.34
55.64
54.80
239.51
56.30
56.53
55.82
242.43
56.32
56.60
55.66
243.97
56.32 r
56.59
55.94
244.56
56.96
57.23
57.13
246.59
57.32
57.60
57.27'
248.37
56.94
57.21
56.52
248.49
Not seasonally adjusted
6 Total reserves 2
7
S
9
10
Nonborrowed reserves
Nonborrowed reserves plus extended credit 3
Required reserves
Monetary base 4
36.87
40.57
47.24
57.64
54.59
57.64
58.73
56.09
56.07
58.37
57.30
57.64
36.09
36.10
36.31
188.65
37.38
39.98
39.71
202.34
45.92
46.42
46.18
220.82
56.81
57.11
56.27
243.63
53.84
54.26
53.61
237.50
56.81
57.11
56.27
243.63
58.15
58.38
57.66
243.42
55.53
55.82
54.88
240.82
55.54
55.81
55.15
241.93
57.38
57.65
57.54
246.07
56.26
56.55
56.22
246.83
56.86
57.13
56.43
249.30
38.89
40.70
48.14
59.56
56.40
59.56
59.67
57.06
57.06
59.39
58.34
58.79
38.12
38.12
38.33
192.26
37.51
40.09
39.84
204.18
46.82
47.41
47.08
223.53
58.73
59.04
58.19
247.71
55.65
56.15
55.42
241.27
58.73
59.04
58.19
247.71
59.09
59.32
58.60
246.75
56.50
56.74
55.85
244.22
56.53
56.82
56.15
244.98
58.40
58.19
58.57
249.24
57.30
58.03'
57.26
249.94'
58.02
58.35
57.59
252.55
N O T A D J U S T E D FOR
CHANGES IN RESERVE REQUIREMENTS 5
11 Total reserves 2
12
13
14
15
Nonborrowed reserves
Nonborrowed reserves plus extended credit 5
Required reserves
Monetary base 4
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
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 B o a r d ' 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
1.21
and Credit Aggregates
A13
MONEY STOCK, LIQUID ASSETS, A N D DEBT MEASURES
Billions of dollars, averages of daily figures
1987
1983
Dec.
1984
Dec.
1985
Dec.
1986
Dec.
Mar.
Apr.
May
750.4
2,839.1'
3,540.1'
4,187.0'
7,844.6'
753.2
2,840.1'
3,554.2'
4,219.2
7,911.3
June
Seasonally adjusted
1 Ml
2 M2
M3
4 L
5 Debt
6
7
8
9
Ml components
Currency 2
Travelers checks 3
Demand deposits 4
Other checkable deposits 5
10
11
Nontransactions components
In M2 6
In M3 only 7
526.9
2,184.6
2,692.8
3,154.6
5,206.3
557.5
2,369.1
2,985.4
3,529.0
5,946.2'
627.0
2,569.5
3,205.5
3,838.9
6,774.9
730.5
2,800.1'
3,489.1'
4,141.1'
7,630.4'
739.5
2,824.7'
3,523.1'
4,172.4'
7,781.7'
148.3
4.9
242.3
131.4
158.5
5.2
248.3
145.5
170.6
5.9
272.2
178.3
183.5
6.4
308.3
232.2'
187.7
6.8
299.3
245.7
188.9
6.8
304.0
250.8
190.2
6.7
304.0
252.3
1,657.7
508.2
1,811.5
616.3
1,942.5
636.1
2,069.7
689.0'
2,085.1'
698.4'
2,088.7'
700.9'
2,086.9'
714.1'
2,096.4
727.1
133.2
173.0
122.2
166.6
124.6
179.0
154.5
211.8
168.3
228.0'
172.2
233.8'
174.5
237.1'
175.5
239.6
350.9
432.9
386.6
498.6
383.9
500.3
364.7
488.7
360.0
485.9'
357.5
486.5'
357.1
486.4'
360.1
491.2
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
211.6
84.9
211.8
83.1
210.3
81.8
211.3
81.3
230.0
96.2
269.6
147.3
284.1
152.1
291.8
155.3
299.0
151.1
305.9
148.7
310.6
149.0
315.0
150.1
1,828.2'
5,953.5'
1,841.1'
6,003.5'
1,864.2
6,047.0
n.a.
n.a.
749.3
2,844.3
3,568.1
n.a.
n.a.
746.8
2,843.2
3,570.2
n.a.
n.a.
191.1
6.8
297.5
251.3
8
12
13
Savings deposits
Commercial Banks
Thrift institutions
9
14
15
Small denomination time deposits
Commercial Banks
Thrift institutions
16
17
Money market mutual funds
General purpose and broker/dealer
Institution-only
18
19
Large denomination time deposits
Commercial B a n k s "
Thrift institutions
20
21
Debt components
Federal debt
Nonfederal debt
10
1,170.5'
4,033.5
1,365.3'
4,580.9'
1,584.6'
5,190.3'
1,804.5'
5,826.0'
Not seasonally adjusted
538.3
2,191.6
2,702.4
3,163.1
5,200.7
570.3
2,378.3
2,997.2
3,539.7
5,940.6'
641.0
2,580.5
3,218.8
3,850.7
6,768.3
746.5
2,813.6'
3,504.4'
4,154.5'
7,623.0'
729.0
2,818.4'
3,520.2'
4,175.7'
7,759.7'
757.6
2,847.8'
3,548.2'
4,195.1'
7,817.2'
745.0
2,829.1'
3,544.4'
4,203.6
7,875.1
150.6
4.6
251.0
132.2
160.8
4.9
257.2
147.4
173.1
5.5
282.0
180.4
186.2
6.0
319.5
235.0
186.0
6.4
291.5
245.1
188.0
6.4
305.8
257.5
190.1
6.5
298.9
249.5
1,653.3
510.8
1,808.0
618.9
1,939.5
638.3
2,067.1
690.7'
2,089.4'
701.8'
2,090.2'
700.4'
2,084.0'
715.3'
Money market deposit accounts
Commercial banks
Thrift institutions
230.4
148.5
267.4
150.0
332.5
180.7
379.0
192.4
378.2
192.3
375.4
190.1
368.8
188.3
367.5
186.0
35
36
Savings deposits 8
Commercial Banks
Thrift institutions
132.2
172.4
121.4
166.2
123.9
178.8
153.8
211.8
167.2
227.9'
172.1
233.9
174.9
237.7
176.7
240.7
37
38
Small denomination time deposits 9
Commercial Banks
Thrift institutions
351.1
433.5
386.7
499.6
383.8
501.5
364.4
489.8
359.6
486.1'
355.6
484.9'
355.6
483.1'
359.7
488.5
39
40
Money market mutual funds
General purpose and broker/dealer
Institution-only
138.2
43.2
167.5
62.7
176.5
65.1
207.6
84.1
211.6
84.9
211.8
83.1
210.3
81.8
211.3
81.3
41
42
Large denomination time deposits 1 0
Commercial B a n k s "
Thrift institutions
231.6
96.3
271.2
147.3
285.6
151.9
293.2
154.9
301.3
151.2
303.2
148.0
309.2
149.0
311.9
149.8
43
44
Debt components
Federal debt
Nonfederal debt
1,583.7
5,184.5'
1,803.3
5,819.7'
1,846.7
5,970.5'
1,857.8
6,017.3
72
23
24
25
26
Ml
M2
M3
L
Debt
27
28
29
30
Ml components
Currency 2
Travelers checks 3
Demand deposits 4
Other checkable deposits 5
31
32
Nontransactions components
M2 6
M3 only 7
33
34
For notes see following page.
1,170.2
4,030.5
1,364.7
4,575.8''
1,838.2'
5,921.4'
191.9
7.1
299.0
251.4
2,095.0
723.8
n.a.
n.a.
A14
DomesticNonfinancialStatistics • September 1987
N O T E S T O T A B L E 1.21
1. Composition of the money stock measures and debt is as follows:
M l : (1) currency outside the T r e a s u r y , 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 O C D 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, M M D A s , 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 B o a r d ' s flow of funds accounts. Debt
data are based on monthly averages.
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 O C D 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 O C D liabilities.
5. Consists of N O W 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 O C D and seasonally adjusted demand
deposits. Included are all ceiling free " S u p e r N O W s , " 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), M M D A s , 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 B o a r d ' 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
1.22
and Credit Aggregates
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.
1987
1986
Jan.
Dec.
Feb.
Mar.
Apr.
May
Seasonally adjusted
DEBITS TO
2
Demand deposits
1
All insured banks
Major N e w York City banks
2
3
Other banks
4 A T S - N O W accounts 3
5 Savings deposits 4
128,440.8
57,392.7
71,048.1
1,588.7
633.1
154,556.0
70,445.1
84,110.9
1,920.8
539.0
189,534.1
91,212.9
98,321.4
2,351.1
410.3
206,689.6
95,831.3
110,858.4
2,960.8
533.7
210,574.2
99,357.1
111,217.1
2,255.7
459.2
211,169.4
98,712.3
112,457.1
2,306.0
477.7
217,019.7
104,224.5
112,795.2
2,344.6
468.6
224,603.0
107,159.2
117,443.7
2,384.7
528.0
222,774.5
106,599.1
116,175.4
2,425.1
508.9
434.4
1,843.0
268.6
15.8
5.0
496.5
2,168.9
301.8
16.7
4.5
561.8
2,460.6
327.4
16.8
3.1
560.7
2,251.6
340.0
18.3
3.5
580.3
2,426.4
345.5
13.4
2.9
594.7
2,461.0
357.0
13.5
2.9
613.8
2,707.8
358.0
13.6
2.8
627.0
2,711.5
368.5
13.6
3.1
613.0
2,660.3
359.3
13.9
2.9
216,638.7
102,274.2
114,364.5
2,679.2
1,913.3
499.0
191,572.9
89,866.7
101,706.2
2,173.2
1,600.7
434.6
222,532.0
106,161.2
116,370.8
2,422.7
1,754.4
476.2
229,095.0
108,597.8
120,497.3
2,735.8
2,071.1
570.8
209,229.8
98,828.3
110,401.5
2,420.5
1,786.2
492.4
579.9'
2,345.5 r
346.6
15.7
5.K
3.1
550.0
2,273.2 r
329.4
12.9
4.3'
2.7
641.0
2,742.6
377.3
14.1
4.7
2.9
635.1
2,755.6
375.0
15.2
5.6
3.4
582.7
2,496.3
345.6
14.0
4.9
2.8
DEPOSIT TURNOVER
6
7
8
9
10
Demand deposits 2
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts 3
Savings deposits 4
11
12
13
14
15
16
Demand deposits 2
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts3
MMDA5
Savings deposits 4
17
18
19
20
21
22
Demand deposits 2
All insured banks
Major N e w York City banks
Other banks
A T S - N O W accounts 3
MMDA5
Savings deposits 4
Not seasonally adjusted
DEBITS TO
128,059.1
57,282.4
70,776.9
1,579.5
848.8
632.9
154,108.4
70,400.9
83,707.8
1,903.4
1,179.0
538.7
189,443.3
91,294.4
98,149.0
2,338.4
1,599.3
404.3
433.5
1,838.6
267.9
15.7
3.5
5.0
497.4
2,191.1
301.6
16.6
3.8
4.5
564.0
2,494.3
327.9
16.8
4.5
3.1
226,263.1
106,935.2
119,327.9
2,841.5
2,058.2
503.6
DEPOSIT T U R N O V E R
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 are
available beginning D e c e m b e r 1978.
4. Excludes A T S and N O W accounts, M M D A and special club accounts, such
as Christmas and vacation clubs.
5. Money market deposit accounts.
600.3 r
2,483.2 r
357.4
17.4
5.5r
3.3
NOTE. Historical data for demand deposits are available back to 1970 estimated
in part from the debits series for 233 S M S A s that were available through J u n e
1977. Historical data for A T S - N O W and savings deposits are available back to
July 1977. Back data are available on request f r o m the Banking Section, Division
of Research and Statistics, Board of Governors of the Federal Reserve S y s t e m ,
Washington, D.C. 20551.
These data also appear on the B o a r d ' s G.6 (406) release. F o r address, see inside
front cover.
A16
1.23
DomesticNonfinancialStatistics • September 1987
LOANS A N D SECURITIES
All Commercial Banks'
Billions of dollars; averages of Wednesday figures
1986
July
Aug.
Sept.
1987
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Seasonally adjusted
1 Total loans and securities 2
2 U.S. government securities
3 Other securities
4 Total loans and leases 2
Commercial and industrial
5
6
Bankers acceptances h e l d 3 . .
7
Other commercial and
industrial
U.S. addressees 4
8
9
Non-U.S. a d d r e s s e e s 4 . . . .
10
Real estate
11
Individual
Security
12
13
N o n b a n k financial
institutions
14
Agricultural
15
State and political
subdivisions
Foreign banks
16
17
Foreign official institutions . . .
Lease financing receivables . . .
18
19
All other loans
1,998.2
2,022.6
2,044.6
2,052.4
2,063.5
2,089.8
2,118.3
2,119.7
2,126.2
2,147.3
2,160.6
2,166.3
284.7
189.7
1,523.7
512.6
6.1
291.5
196.0
1,535.1
515.2
6.5
294.9
204.2
1,545.4
517.3
6.6
299.6
199.8
1,553.0
520.0
6.7
304.1
197.9
1,561.5
525.7
6.4
309.9
196.9
1,583.0
541.4
6.4
316.3
190.2
1,611.8
554.1
6.8
315.2
193.8
1,610.7
553.8
6.8
314.3
195.5
1,616.4
551.7
6.2
315.8
197.2
1,634.3
553.9
6.5
320.1
197.6
1,642.9
555.9'
6.8
316.7
198.5
1,651.2
558.1
6.8
506.5
497.7
8.9
458.3
306.3
43.7
508.7
499.8
8.9
464.8
308.1
43.1
510.7
501.7
9.0
468.9
309.9
42.8
513.3
504.6
8.8
474.2
311.2
39.1
519.2
510.7
8.5
479.6
312.6
40.1
535.0
525.7
9.4
489.0
314.2
38.6
547.2
537.8
9.5
499.2
314.9
37.7
546.9
537.9
9.1
504.0
315.2
38.5
545.5
536.8
8.7
511.0
315.7
38.3
547.4
538.9
8.5
517.9
316.6
43.6
549.0
540.8
8.2
526.3
316.7
42.0
551.3
542.8
8.5
536.8
314.6
42.5
34.5
33.2
34.5
33.0
34.9
32.7
35.5
32.4
34.9
32.1
35.2
31.7
35.7
31.2
34.7
30.7
35.0
30.1
35.4
29.5
35.4
29.3
33.9
29.2
59.9
10.3
6.1
20.5
38.3
60.1
10.1
6.1
20.7
39.6
60.0
10.1
6.0
21.1
41.8
59.3
10.0
6.0
21.8
43.4
58.7
10.0
5.9
22.0
40.0
57.9
10.4
5.8
22.2
36.6
57.8
10.6
5.9
22.1
42.6
57.2
10.3
6.1
22.2
38.1
56.9
9.7
6.7
22.3
38.8
56.0
9.9
6.7
22.6
42.3 r
55.2
9.9
5.8
22.9
43.6
54.4
10.3
5.3
23.0
43.2
Not seasonally adjusted
20 Total loans and securities 2
1,993.7
2,015.1
2,042.3
2,044.0
2,064.2
2,105.2
2,123.7
2,121.6
2,127.8
2,148.4
2,157.9
2,166.1
21 U.S. government securities
22 Other securities
23 Total loans and leases 2
Commercial and i n d u s t r i a l . . . .
24
25
Bankers acceptances h e l d 3 . .
Other commercial and
26
industrial
27
U.S. addressees 4
28
Non-U.S. a d d r e s s e e s 4 . . . .
29
Real estate
30
Individual
Security
31
32
N o n b a n k financial
institutions
33
Agricultural
34
State and political
subdivisions
35
Foreign banks
Foreign official institutions . . .
36
37
Lease financing r e c e i v a b l e s . . .
38
All other loans
285.6
187.5
1,520.6
512.1
6.2
290.5
196.2
1,528.4
512.8
6.3
293.8
205.0
1,543.5
516.1
6.7
296.1
200.1
1,547.8
517.8
6.6
303.2
198.3
1,562.6
525.2
6.6
308.3
198.1
1,598.7
544.3
6.7
314.6
193.7
1,615.4
552.4
6.7
318.9
194.1
1,608.6
551.7
6.7
317.2
194.4
1,616.2
554.5
6.2
317.7
195.2
1,635.4
556.5
6.4
319.7'
196.8
1,641.4
557.5
6.7
317.1
197.0
1,651.9
559.3
6.9
506.0
496.8
9.2
458.4
305.2
42.7
506.5
497.3
9.1
464.9
307.9
40.7
509.4
500.2
9.2
469.9
310.8
41.3
511.2
502.1
9.1
475.1
312.3
37.8
518.5
509.5
9.1
480.7
313.7
40.4
537.6
528.8
8.8
489.9
317.8
40.9
545.8
537.1
8.7
499.3
317.9
39.4
545.0
536.3
8.7
503.1
314.7
37.5
548.3
539.9
8.4
509.8
313.3
38.6
550.0
541.6
8.4
516.7
314.4
45.1
550.8
542.4
8.4
525.4
314.8
42.1
552.4
543.7
8.7
536.5
313.2
43.2
34.5
34.0
34.8
33.9
35.6
33.7
35.6
33.1
35.4
32.2
36.4
31.4
35.7
30.5
33.8
29.8
33.8
29.2
34.8'
28.8
34.9
29.1
34.0
29.6
59.9
10.3
6.1
20.5
36.8
60.1
9.9
6.1
20.6
36.8
60.0
10.3
6.0
21.0
39.0
59.3
10.0
6.0
21.5
39.1
58.7
10.1
5.9
21.8
38.6
57.9
10.9
5.8
22.2
41.3
57.8
10.7
5.9
22.4
43.3
57.2
10.5
6.1
22.4
41.6
56.9
9.7
6.7
22.5
41.1
56.0
9.5
6.7
22.7
44.2
55.2
9.6
5.8
22.9
44.1
54.4
10.0
5.3
23.0
43.5
1. These data also appear in the B o a r d ' s 0.1 (407) release.
2. Excludes loans to commercial banks in the United States.
3. Includes nonfinancial commercial paper held.
4. United States includes the 50 states and the District of Columbia.
Commercial
1.24
Banking Institutions
A17
MAJOR NONDEPOSIT F U N D S OF COMMERCIAL BANKS 1
Monthly averages, billions of dollars
1987
1986
Source
July
Total nondeposit funds
Seasonally adjusted 2
Not seasonally adjusted
Federal funds, RPs, and other
borrowings f r o m nonbanks 3
3
Seasonally adjusted
4
Not seasonally adjusted
5 Net balances due to foreign-related
institutions, not seasonally
adjusted
1
2
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.'
Feb.
Mar.'
Apr.
May
June
136.1
132.9
137.9
137.8
142.6
141.9
140.5
139.5
144.2
145.7
144.9
145.0
153.5
153.0
157.5'
160.1'
161.6
163.9
157.5'
157.6'
165.4'
166.2'
160.7
158.1
165.5
162.4
167.4
167.3
166.9
166.2
167.8
166.9
166.0
167.5
164.0
164.1
169.1
168.6
169.4'
172.0'
167.8
170.1
167.7
167.8
165.5'
166.2
162.6
160.0
-29.5
-29.5
-24.3
-27.3
-21.8
-19.1
-15.6
-11.9'
-6.2
-10.2'
.0
-1.9
-33.8
73.9
40.1
-31.2
75.2
44.0
-29.2
74.0
44.8
-31.9
73.5
41.6
-28.7
70.8
42.1
-30.7
73.4
42.7
-26.1
71.6
45.5
-23.7'
68.3'
44.6
-21.1
66.1
45.0
-22.9'
70.5'
47.6
-15.6'
68.5'
52.9'
-15.6
67.1
51.5
4.3
64.2
68.6
1.7
66.3
67.9
4.9
67.9
72.7
4.6
68.3
72.9
6.9
68.7
75.6
11.6
70.8
82.5
10.5
75.0
85.5
11.8
72.9
84.7'
14.9
71.1
86.0
12.7
72.6
85.3
15.5
75.4
90.9
13.7
77.1
90.8
95.2
92.0
95.9
95.8
95.9
95.2
97.0
96.1
96.9
98.5
97.0
97.1
99.2
98.7
95.5
98.1
92.5
94.8
95.3
95.4
95.1
95.9
96.4
93.8
15.4
16.8
14.5
11.1
16.5
18.2
17.1
15.3
23.2
15.3
21.2
19.2
21.3
27.5
23.2
28.6
17.7
17.1
20.7
21.6
26.1
30.8
27.8
25.5
341.1
338.3
344.3
344.0
344.1'
345.5
342.5'
343.7'
343.2'
343.9'
345.6
347.0'
350.1
351.3
351.1
353.2
354.1
356.4
359.8
357.1
366.2
364.7
372.8
369.7
MEMO
6 Domestically chartered banks' net
positions with own foreign
branches, not seasonally
adjusted 4
7
Gross due f r o m balances
Gross due to balances
8
9 Foreign-related institutions' net
positions with directly related
institutions, not seasonally
adjusted 5
Gross due f r o m balances
10
11
Gross due to balances
Security R P borrowings
12
Seasonally adjusted®
13
Not seasonally adjusted
U . S . Treasury demand balances 7
14
Seasonally adjusted
Not seasonally adjusted
15
Time deposits, $100,000 o r more 8
Seasonally adjusted
16
17
N o t 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, N e w
York investment companies majority o w n e d by foreign banks, and Edge Act
corporations owned by domestically chartered and foreign banks.
2. Includes seasonally adjusted federal f u n d s , RPs, and other borrowings f r o m
nonbanks and not seasonally adjusted net Eurodollars.
3. Other borrowings are borrowings on any instrument, such as a promissory
note or due bill, given for the purpose of borrowing money for the banking
business. This includes borrowings from Federal Reserve Banks and from foreign
banks, term federal funds, overdrawn due from bank balances, loan RPs, and
participations in pooled loans.
4. Averages of daily figures for member and n o n m e m b e r banks.
5. Averages of daily data.
6. Based on daily average data reported by 122 large banks.
7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at
commercial banks. Averages of daily data.
8. Averages of Wednesday figures.
A18
1.25
DomesticNonfinancialStatistics • September 1987
ASSETS A N D LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS
Last-Wednesday-of-Month Series'
Billions of dollars
1986
1987
Account
Aug.
Sept.
2,164.8
460.0
272.9
187.1
29.3
1,675.6
145.5
1,530.1
513.8
466.5
308.8
241.0
2,179.7
469.4
276.6
192.8
27.9
1,682.4
139.8
1,542.5
515.9
470.5
311.2
244.9
208.3
28.3
23.7
73.5
34.0
48.7
Oct.
Nov.
Dec.
2,183.2
471.9
282.8
189.1
26.0
1,685.3
141.2
1,544.1
517.2
476.2
312.8
237.8
2,227.3
475.4
287.3
188.0
28.1
1.723.8
154.7
1,569.1
524.9
481.8
314.1
248.2
2,314.3
479.6
292.6
187.0
27.8
1,807.0
168.9
1,638.1
568.2
497.5
320.4
252.0
2,284.8
482.2
296.1
186.1
26.4
1,776.3
160.1
1,616.2
551.1
499.9
317.0
248.3
199.3
28.2
22.9
66.2
203.5
31.6
23.5
66.2
227.0
32.2
22.2
86.5
273.7
41.2
25.7
111.3
32.8
49.2
33.1
49.0
38.3
47.9
43.3
52.3
Jan.
Feb.
Mar.
Apr.
2,279.4
484.7
298.8
185.9
29.0
1,765.6
156.7
1,608.9
551.5
503.5
314.7
239.2
2,279.2
486.2
299.5
186.7
25.2
1,767.8
154.3
1,613.5
555.3
510.7
313.1
234.4
2,306.2
492.5
305.1
187.5
23.3
1,790.3
151.8
1,638.5
555.5
519.0
315.2
248.9
2,318.9
495.4
307.0
188.4
21.4
1,802.1
160.4
1,641.7
558.2
527.4
314.8
241.3
2,312.6
493.0
303.2
189.8
20.1
1,799.6
151.0
1,648.6
558.3
538.5
312.8
239.0
214.4
33.4
23.7
74.5
206.3
28.4
23.5
71.4
203.8
31.1
22.9
68.1
209.7
29.8
24.0
74.5
230.8
37.9
25.1
81.3
213.2
33.8
24.2
74.4
34.0
48.8
33.0
50.1
32.7
49.0
33.9
47.5
37.2
49.3
31.1
49.7
May
June
A L L COMMERCIAL B A N K I N G
INSTITUTIONS2
1 Loans and securities
2
Investment securities
3
U.S. Treasury securities
4
Other
Trading account assets
5
6
Total loans
7
Interbank loans
8
Loans excluding interbank
9
Commercial and industrial
10
Real estate
11
Individual
12
All other
13 Total cash assets
14
Reserves with Federal Reserve Banks
15
Cash in vault
16
Cash items in process of collection . . .
17
Demand balances at U.S. depository
institutions
18
Other cash assets
194.8
201.4
198.6
202.2
224.8
201.3
201.1
202.1
204.0
208.1'
204.1
20 Total assets/total liabilities and capital . . .
2,567.8
2,580.4
2,585.3
2,656.5
2,812.8
2,700.5
2,686.8
2,685.2
2,719.9
2,758.3 r
2,729.9
21
22
23
24
25
26
27
1,837.6
545.7
499.2
792.6
379.8
173.8
176.7
1,834.5
538.9
505.5
790.1
391.6
176.3
178.1
1,847.1
548.8
516.0
782.2
383.3
175.7
179.2
1,900.2
596.3
522.9
781.1
397.4
180.0
178.9
2,018.0
691.1
535.0
791.9
414.5
199.6
180.6
1,898.3
577.8
532.3
788.2
432.7
188.0
181.5
1,895.5
569.2
535.9
790.3
425.6
184.6
181.2
1,899.6
568.8
539.7
791.2
414.9
188.7
181.9
1,919.5
590.7
535.1
793.6
422.7
195.2
182.5
1,939.1
596.9
538.6
803.6
435.6
200.3 r
183.3
1,923.8
578.3
535.0
810.5
428.2
200.5
177.4
290.6
293.2
299.5
304.8
308.4
314.5
320.1
316.7
318.9
320.6
315.5
198.7
204.1
198.4
198.8
198.9
194.1
193.7
194.7
196.9
196.1
197.6
2,034.6
443.0
265.0
178.0
29.3
1,562.3
119.7
1,442.7
449.4
460.4
308.5
224.4
2,044.8
450.5
267.9
182.5
27.9
1,566.4
115.6
1,450.8
448.1
464.3
310.9
227.5
2,052.1
452.9
273.6
179.3
26.0
1,573.2
118.8
1,454.3
449.0
470.0
312.5
222.7
2,094.7
457.1
279.0
178.2
28.1
1,609.5
133.0
1,476.4
455.7
475.1
313.8
231.8
2,154.4
459.3
283.0
176.3
27.8
1,667.3
137.9
1,529.5
488.2
490.3
320.1
230.9
2,136.7
461.5
286.8
174.8
26.4
1,648.8
134.3
1,514.5
475.5
493.2
316.7
229.2
2,130.3
463.3
289.2
174.1
29.0
1,638.0
130.5
1,507.5
474.1
497.0
314.4
221.9
2,121.7
463.6
289.4
174.2
25.2
1,632.9
124.1
1,508.8
474.6
504.1
312.7
217.4
2,146.9
470.0
295.2
174.8
23.3
1,653.6
124.2
1,529.3
473.5
512.0
314.9
229.0
2,156.2
471.5
296.7
174.8
21.4
1,663.3
128.6
1,534.7
475.3
520.3
314.5
224.7
2,151.0
469.6
293.8
175.8
20.1
1,661.3
121.5
1,539.7
471.9
531.5
312.5
223.8
191.2
26.6
23.7
73.1
182.5
26.9
22.9
65.8
185.6
29.7
23.5
65.6
210.0
29.8
22.2
86.1
253.5
39.7
25.7
110.9
196.6
31.2
23.6
74.0
188.9
27.1
23.5
71.0
186.5
29.7
22.8
67.7
192.5
27.2
24.0
74.0
213.2
35.9
25.0
80.9
195.4
32.1
24.1
73.9
32.3
35.5
30.9
36.0
31.3
35.5
36.3
35.6
40.8
36.4
32.2
35.6
31.1
36.4
31.1
35.2
31.9
35.4
35.1
36.2
29.4
35.9
19 Other assets
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
MEMO
28 U.S. government securities (including
trading account)
29 Other securities (including trading
account)
DOMESTICALLY C H A R T E R E D
COMMERCIAL B A N K S 3
30 Loans and securities
31
Investment securities
32
U.S. Treasury securities
Other
33
34
Trading account assets
35
Total loans
36
Interbank loans
37
Loans excluding interbank
Commercial and industrial
38
39
Real estate
40
Individual
41
All other
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
139.3
143.5
141.0
141.6
165.0
141.5
144.0
143.4
144.4
143.1''
134.8
49 Total assets/total liabilities and capital . ..
2,365.0
2,370.8
2,378.7
2,446.3
2,572.8
2,474.8
2,463.2
2,451.5
2,483.8
2,512.5''
2,481.1
50
51
52
53
54
55
56
1,784.2
537.6
497.4
749.3
296.8
110.5
173.5
1,779.3
530.6
503.7
745.0
306.9
109.6
174.9
1,792.8
540.9
514.1
737.7
301.3
108.6
176:0
1,844.8
588.2
520.8
735.8
314.1
111.7
175.8
1,957.0
682.2
533.0
741.8
322.9
115.5
177.5
1,840.8
569.4
530.3
741.1
341.7
114.0
178.3
1,838.2
561.3
533.9
743.0
336.1
110.8
178.1
1,840.7
560.5
537.7
742.5
319.1
113.0
178.8
1,857.1
582.2
533.1
741.8
328.2
119.1
179.4
1,876.5
588.4
536.6
751.4'
337.1
118.8'
180.2
1,861.9
569.8
533.0
759.1
328.5
116.4
174.3
48 Other assets
Deposits
Transaction deposits
Savings deposits
Time deposits
Borrowings
Other liabilities
Residual (assets less liabilities)
1. Data have been revised because of benchmarking to new Call Reports and
new seasonal factors beginning July 1985. Back data are available from the
Banking Section, Board of Governors of the Federal Reserve System, Washington, D.C., 20551.
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 foreignrelated institutions and quarter-end condition reports.
2. Commercial banking institutions include insured domestically chartered
commercial banks, branches and agencies of foreign banks. Edge Act and
Agreement corporations, and N e w York State foreign investment corporations.
3. Insured domestically chartered commercial banks include all member b a n k s
and insured nonmember banks.
Weekly Reporting
1.26
Commercial
Banks
A19
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
1987
Account
Apr. 29
99,258
1 Cash and balances due f r o m depository institutions
May 6
99,093'
May 13
100,312
1,016,966 1,019,493' 1,007,593
2 Total loans, leases and securities, net
May 20
94,589'
May 27
June 3
114,368'
105,389
1,021,292 1,014,493' 1,019,250
J u n e 24
June 10
J u n e 17
100,069
103,833
102,919
1,008,491 1,008,924
999,225
3 U.S. Treasury and government agency
4
Investment a c c o u n t , by maturity
6
7
Over one through five years
8
9
in
li
States and political subdivisions, by maturity
p
13
14
15
Other bonds, corporate stocks, and securities
16 Other trading account assets
110,969
13,847
97,123
15,293
42,055
39,774
69,313
4,946
64,367
51,528
6,629
44,899
12,840
4,535
111,298'
13,695'
97,603'
15,261
43,314
39,028'
69,160'
4,617
64,543'
51,333
6,604
44,729
13,210'
4,385'
110,477
12,705
97,772
15,062
43,348
39,361
68,619
4,164
64,456
51,348
6.566
44,782
13,107
4,819
112,136
14,496
97,640
15,095
44,825
37,720
68,245
3,801
64,444
51,338
6,515
44,823
13,106
4,469
111,722
13,612
98,110
14,817
44,760
38,533
68,18C
3,681'
64,499
51,394
6,501
44,893
13,105
4,045
111,940
13,449
98,490
15,566
44,422
38,503
67,805
3,189
64,616
51,188
6,428
44,760
13,428
3,875
110,809
12,900
97,909
15,396
44,201
38,312
68,013
3,369
64,644
51,096
6,360
44,736
13,548
4,208
109,782
13,102
96,680
14,956
44,118
37,606
68,203
3,547
64,655
51,038
6,347
44,691
13,617
4,315
107,910
12,286
95,624
15,547
43,106
36,970
68,888
4,161'
64,726
50,920
6,248
44,672
13,807
3,622
17
18
To commercial banks
19
To nonbank brokers and dealers in securities
70
?1 Other loans and leases, gross
77
73
Commercial and industrial
74
Bankers acceptances and commercial paper
75
All other
76
U.S. addressees
27
N o n - U . S . addressees
60,379
35,833
16,539
8,007
793,930
775,326
277,296
2,247
275,049
271,734
3,315
64,006'
37,788'
18,006
8,212
792,924'
774,333'
278,633'
2,475
276,158'
272,816'
3,341
56,248'
32,242'
16,655
7,351
789,791'
771,196'
277,168'
2,415
274,753'
271.460'
3,293
64,060'
35,865'
18,588
9,607
794,863'
776,263'
280,512'
2,514
277,998'
274,653'
3,344
61,706'
35,849'
17,494
8,364
792,906'
774,228'
278,852'
2,214
276,638'
273,342'
3,296
69,204
41,147
20,485
7,573
794,123
775,372
278,671
2,162
276,509
273,321
3,188
60,292
32,054
20,378
7,860
792,899
774,102
278,113
2,500
275,613
272,408
3,204
61,583
35,604
19,099
6,880
795,132
776,065
277,273
2,507
274,767
271,596
3,171
59,545
33,816
18,892
6,837
790,412
771,304
275,444
2,456
272,988
269,821
3,167
78
79
30
31
3?
33
34
35
36
37
38
39
40
41
47
43
221,383
141,928
53,490
23,356
4,561
25,573
20,435
5,318
33,533
3,045
18,897
18,604
4,495
17,667
771,769
125,988
222,344'
141,467'
54,628'
23,097'
5,109
26,422
16,577
5,367
33,288'
3,111
18,918'
18,590
4,455
17,824
770,644'
124,878'
223.827'
141,409'
54,353'
23,233'
4,556
26,564
15,234
5,389
33,232'
2,984
17,601
18,594
4,470
17,891
767,430'
124,043'
225,816'
141,114'
54,154'
22,835'
4,920
26,398
15,299
5,478
33,261'
2,990
17,640
18,599
4,480
18,001
772,381'
120,838'
225,897'
141,126'
53,714'
23,645'
4,949
25,121
14,465
5,475
33,207'
2,905
18,585'
18,678
4,473
19,594
768,839'
126,350'
226,902
141,142
52,729
22,451
5,035
25,243
15,771
5,525
33,042
2,969
18,620
18,751
4,443
23,255
766,426
125,030
227,862
141,210
53,134
22,142
5,338
25,655
15.162
5,522
32,933
2,967
17,198
18,798
4,462
23,269
765,169
119,834
230,323
140,701
52,914
21,468
5,266
26,180
14,835
5,604
33,097
3,084
18,233
19,067
4,468
25,623
765,041
120,582
230,075
141,032
51,072
20,870
5,159
25,042
14,377
5,638
32,633
2,980
18,054
19,109
4,487
26,665
759,261
123,222
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
1,242,212 1,243,464' 1,231,948' 1,236,719' 1,255,211' 1,249,670
44 Total assets
45
46
47
48
49
50
51
57
53
54
55
56
57
58
59
60
61
67
63
64
Individuals, partnerships, and corporations
States and political subdivisions
U.S. government
Depository institutions in United States
Banks in foreign countries
Foreign governments and official institutions
Certified and officers' checks
Transaction balances other than demand deposits
Nontransaction balances
Individuals, partnerships and corporations
States and political subdivisions
U.S. government
Depository institutions in the United States
Foreign governments, official institutions and b a n k s
Liabilities for borrowed money
Borrowings f r o m Federal Reserve Banks
Treasury tax-and-loan notes
All other liabilities for borrowed money 2
Other liabilities and subordinated note and debentures
228,895
176,883
5,585
4,378
23,857
6,338
1,076
10,777
60,280
516,208
478,130
26,698
791
9,698
890
253,928
156
20,764
233,008
94,408
226,205'
174,649
5,913
2,335
25,570
6,846
1,148
9,743
60,165
517,195
478,411
27,313
876
9,722
873
264,402
1,075
20,980
242,347
86,587'
217,924'
172,111'
4,763'
1,253'
23,355'
5,892
959
9,591'
58,996
518,242
479,174
27,514
880
9,791
883
257,996
0
20,633
237,364
89,491'
227,900'
176,980'
5,226
4,083
24,988
6,324
922
9,377
59,331
520,744
480,996
28,099
896
9,860
892
254,111
844
20,865
232,402
85,533'
231,733'
179,457'
5,478
1,288
27,648'
6,774
1,128
9,960
59,148
523,201
483,352
28,107
897
9,934
911
261,301'
0
20,549
240,752'
90,796'
232,077
177,630
5,042
4,555
26,695
6,358
1,012
10,784
61,650
526,378
486,341
28,303
920
9,900
914
255,757
0
13,364
242,393
89,354
1,153,720 1,154,554' 1,142,65c 1,147,619' 1,166,179' 1,165,216
65 Total liabilities
66 Residual (total assets minus total liabilities) 3
1,228,394 1,233,340 1,225,365
221,688
173,787
4,961
2,578
24,292
6,502
1,059
8,507
60,902
526,835
487,047
28,205
897
9,778
907
247,797
0
11,330
236,467
86,130
229,294
178,798
6,228
1,875
24,815
5,889
1,262
10,427
60,568
526,483
487,083
27,749
897
9,770
983
250,416
0
20,240
230,176
84,013
221,676
167,345
5,476
3,030
23,444
7,776
979
13,627
58,552
525,447
486,308
27,522
888
9,890
839
248,635
0
20,766
227,869
88,725
1,143,351 1,150,776 1,143,035
88,492
88,910'
89,299
89,100
89,032
84,454
85,043
82,564
82,330
979,939
795,121
159,599
1,685
1,215
470
230,211
980,888'
796,044'
159,952
1,722
1,177'
546'
230,838
974,478
790,563
160,485'
1,698
1,141'
558'
230,884'
985,074
800,223
162,880
1,703
1,116'
588'
230,901
979,066'
795,119'
164,502
1,677
1,090'
588'
231,157
983,351
799,730
165,648
1,581
1,023
558
232,488
982,025
798,995
165,823
1,568
1,009
559
232,182
981,943
799,643
165,979
1,597
1,032
564
231,262
975,690
795,271
166,684
1,621
1,051
570
229,087
MEMO
67
68
69
70
71
77
73
Total loans and leases (gross) and investments adjusted
Total loans and leases (gross) adjusted 4
Time deposits in amounts of $100,000 or more
Loans sold outright to affiliates—total 5
Commercial and industrial
Other
Nontransaction savings deposits (including MMDAs)
4
1. Includes securities purchased under agreements to resell.
2. 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.
3. This is not a measure of equity capital for use in capital-adequacy analysis or
for other analytic uses.
4. Exclusive of loans and federal funds transactions with domestic commercial
banks.
5. Loans sold are those sold outright to a b a n k ' s own foreign branches,
nonconsolidated nonbank affiliates of the bank, the b a n k ' s holding company (if
not a bank), and nonconsolidated nonbank subsidiaries of the holding company.
A20
1.28
DomesticNonfinancialStatistics • September 1987
LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities
Millions of dollars, Wednesday figures except as noted
1987
Account
Apr. 29
1 Cash and balances due from depository institutions
2 Total loans, leases and securities, net 1
Securities
3 U.S. Treasury and government agency 2
4
Trading account 2
5
Investment account, by maturity
6
One year or less
/
Over one through five years
8
Over five years
y Other securities 2
10
Trading account 2
n
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 Other trading account assets 2
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
Loans and leases
Federal funds sold 3
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
N o n - 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
44 Total assets
Deposits
45 Demand deposits
46
Individuals, partnerships, and corporations
47
States and political subdivisions
48
U.S. government
Depository institutions in the United States
49
50
Banks in foreign countries
51
Foreign governments and official institutions
52
Certified and officers' checks
53 Transaction balances other than demand deposits
ATS, N O W , Super N O W , telephone transfers)
54 Nontransaction balances
55
Individuals, partnerships and corporations
56
States and political subdivisions
57
U.S. government
58
Depository institutions in the United States
Foreign governments, official institutions and banks
59
60 Liabilities for borrowed money
Borrowings f r o m Federal Reserve Banks
61
Treasury tax-and-loan notes
62
All other liabilities for borrowed money 5
63
64 Other liabilities and subordinated note and debentures
65 Total liabilities
66 Residual (total assets minus total liabilities) 6
May 6
May 13
May 20
May 27
June 3
June 10
June 17
June 24
24,078
23,225
22,904
21,202
28,872
25,602
26,669
23,217
29,880
226,815
229,013
221,084
227,461
223,290
223,501
219,222
218,048
216,253
0
0
14,218
1,535
5,135
7,547
0
0
16,527
13,955
1,395
12,560
2,572
0
0
0
14,100
1,532
5,178
7,390
0
0
16,471
13,920
1,404
12,516
2,550
0
0
0
14,038
1,483
5,170
7,385
0
0
16,453
13,966
1,392
12,574
2,487
0
0
0
14,382
1,791
5,687
6,904
0
0
16,428
13,963
1,388
12,575
2,465
0
0
0
14,081
1,388
5,680
7,013
0
0
16,496
14,010
1,386
12,625
2,486
0
0
0
14,483
1,786
5,616
7,080
0
0
16,507
14,036
1,380
12,656
2,471
0
0
0
13,931
1,348
5,638
6,946
0
0
16,494
13,989
1,348
12,640
2,505
0
0
0
13,863
1,259
5,712
6,892
0
0
16,533
13,970
1,328
12,641
2,563
0
0
0
13,865
1,249
5,666
6,950
0
0
16,550
13,939
1,262
12,677
2,610
0
26,681
11,837
8,456
6,388
175,959
171,302
61,118
590
60,527
60,096
431
40,895
20,908
21,792
12,311
2,365
7,117
11,265
248
8,088
882
6,108
4,657
1,485
5,085
169,389
62,900
30,730
13,796
9,974
6,960
174,314
169,643
61,790
677
61,113
60,656
458
41,201
20,940
22,275
12,259
2,667
7,349
7,902
252
8,024
926
6,333
4,671
1,467
5,135
167,712
61,003
24,226
8,895
9,338
5,992
173,037
168,375
61,721
706
61,014
60,554
460
41,599
20,949
22,086
12,294
2,255
7,536
7,512
257
8,024
787
5,440
4,662
1,470
5,199
166,368
59,961
28,361
10,919
10,500
6,942
174,972
170,289
63,360
744
62,616
62,136
479
42,297
20,716
21,435
12,028
2,429
6,979
7,825
257
8,036
828
5,533
4,683
1,479
5,203
168,290
59,002
26,007
9,432
10,235
6,340
174,979
170,238
62,272
538
61,734
61,240
494
42,427
20,781
22,224
12,747
2,556
6,920
7,418
273
8,075
737
6,031
4,741
1,482
6,790
166,706
63,854
28,358
10,875
12,100
5,383
175,252
170,487
62,101
532
61,569
61,096
474
43,060
20,777
21,112
11,694
2,703
6,716
8,340
270
8,027
794
6,004
4,765
1,479
9,620
164,153
59,339
26,984
8,838
12,759
5,386
172,978
168,193
61,489
606
60,883
60,384
499
43,228
20,827
21,073
11,261
2,929
6,884
7,464
273
7,987
824
5,026
4,785
1,487
9,678
161,813
56,655
25,812
10,305
11,153
4,354
173,931
169,203
61,367
557
60,810
60,325
485
43,497
20,939
21,356
11,327
3,007
7,022
7,130
290
7,888
918
5,817
4,728
1,492
10,599
161,840
57,570
26,621
10,861
11,455
4,305
171,637
166,888
59,784
538
59,246
58,740
506
43,676
20,948
21,226
11,422
2,792
7,012
6,310
279
7,876
806
5,981
4,750
1,499
10,920
159,218
59,263
313,793
313,242
303,950
307,665
316,016
308,442
302,546
298,835
305,397
59,405
41,385
556
713
5,771
5,176
917
4,886
58,373
40,351
848
370
6,130
5,674
1,008
3,990
52,845
37,095
515
112
5,120
4,763
797
4,441
59,437
41,469
682
809
6,484
5,140
798
4,053
60,741
42,065
615
189
6,550
5,558
965
4,800
58,091
39,131
636
869
6,201
5,210
880
5,164
56,444
39,400
667
417
6,100
5,375
927
3,558
59.130
41,208
704
170
5,947
4,789
1,120
5,191
62,713
40,254
689
525
6,084
5,647
837
8,676
8,135
98,093
89,705
6,123
31
1,752
482
73,209
0
5,244
67,965
45,586
8,023
98,562
89,866
6,494
25
1,712
465
78,771
500
5,242
73,029
39,900
7,865
98,342
89,563
6,558
25
1,722
473
73,061
0
4,995
68,065
42,134
7,950
99,425
90,350
6,838
32
1,729
476
71,971
430
5,219
66,322
39,153
7,858
99,940
90,799
6,908
28
1,714
492
75,998
0
5,154
70,844
41,760
8,210
100,106
91,118
6,833
26
1,633
496
76,753
0
3,132
73,620
39,780
8,137
99,279
90,351
6,850
24
1,566
488
76,569
0
2,853
73,716
36,498
8,197
99,024
90,222
6,807
24
1,512
458
72,216
0
4,939
67,277
35,628
7,868
98,586
89,880
6,698
26
1,536
446
73,082
0
5,115
67,966
38,195
284,429
283,630
274,246
277,936
286,297
282,940
276,926
274,195
280,443
29,365
29,612
29,704
29,729
29,719
25,502
25,620
24,640
24,954
209,237
178,492
35,955
209,560
178,989
36,465
206,565
176,074
36,431
211,196
180,386
37,326
209,384
178,806
37,289
212,032
181,042
37,386
210,288
179,863
36,664
208,507
178,110
36,374
206,389
175,975
36,301
MEMO
67 Total loans and leases (gross) and investments adjusted 1 - 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 f u n d s transactions with domestic commercial
banks.
NOTE. These data also appear in the B o a r d ' s H.4.2 (504) release. F o r address,
see inside front cover.
Weekly Reporting
1.30
Commercial
LARGE WEEKLY REPORTING U.S. BRANCHES A N D AGENCIES OF FOREIGN BANKS 1
Liabilities
Banks
A21
Assets and
Millions of dollars, Wednesday figures
1987
Account
Apr. 29
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
Cash and due f r o m depository institutions .
Total loans and securities
U.S. Treasury and govt, agency securities
Other securities
Federal f u n d s sold 2
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
N o n - U . S . addressees
To financial institutions
Commercial banks in the United States .
Banks in foreign countries
N o n b a n k financial institutions
To foreign govts, and official institutions . .
For purchasing and carrying securities . .
All other
Other assets (claims on nonrelated p a r t i e s ) . .
Net due f r o m related institutions
Total assets
Deposits or credit balances due to other
than directly related i n s t i t u t i o n s . . . .
Transaction accounts and credit balances 3
Individuals, partnerships, and
corporations
Other
Nontransaction accounts 4
Individuals, partnerships, and
corporations
Other
Borrowings f r o m other than directly
related institutions
Federal f u n d s purchased 5
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 6
May 13
May 20
May 27
June 3
June 10
June 17
June 24
10,282
92,318
6,728
7,493
7,223
5,759
1,464
70,874
44,208
10,654
91,055
6,716
7,884
7,007
5,930
1,077
69,448
43,894
9,951
90,421
6,461
7,921
6,532
5,701
832
69,507
43,876
9,863
92,540
6,712
8,070
7,793
6,872
922
69,964
44,583
10,168
94,518
7,051
8,100
8,370
7,820
550
70,997
44,519
10,217
90,194
6,913
8,279
4,599
4,006
593
70,403
44,145
9,552
92,276
6,670
8,300
5,933
5,284
649
71,372
45,271
9,725
92,581
6,772
8,263
5,971
5,155
816
71,574
45,920
9,957
93,071
6,487
8,325
5,924
5,208
716
72,335
46,224
3,112
41,096
38,835
2,261
15,922
12,173
953
2,795
839
4,412
5,493
23,587
13,753
139,940
3,184
40,710
38,438
2,271
15,397
11,650
908
2,839
746
3,900
5,511
23,847
14,863
140,419
3,139
40,737
38,467
2,270
16,452
12,729
924
2,799
657
2,968
5,554
24,447
14,246
139,065
3,270
41,313
38,945
2,368
16,536
12,666
1,061
2,809
572
2,697
5,576
24,613
16,921
143,937
3,237
41,282
39,006
2,275
16,953
13,116
950
2,887
595
3,105
5,825
24,208
16,283
145,178
3,114
41,031
38,516
2,516
17,514
13,922
922
2,670
372
2,496
5,877
25,312
17,704
143,427
3,238
42,033
39,525
2,508
17,414
13,700
1,099
2,616
359
2,588
5,740
25,044
17,167
144,038
3,470
42,450
39,860
2,590
17,062
13,520
998
2,543
416
2,243
5,933
25,891
16,626
144,824
3,321
42,903
40,258
2,646
17,506
13,870
1,108
2,528
367
2,291
5,948
26,748
16,431
146,208
43,556
3,786
43,491
3,442
43,684
3,275
43,389
3,322
43,949
3,781
43,628
3,612
43,457
3,329
42,636
3,251
42,743
3,281
2,035
1,750
39,771
2,019
1,423
40,048
1,993
1,282
40,409
2,066
1,256
40,067
2,046
1,735
40,169
2,191
1,422
40,015
2,083
1,247
40,128
2,029
1,222
39,385
1,969
1,312
39,462
32,299
7,471
32,480
7,569
32,849
7,559
32,492
7,575
32,887
7,282
32,828
7,188
32,951
7,177
31,707
7,678
31,777
7,685
54,106
23,451
53,936
25,553
50,976
21,121
58,021
27,050
55,359
24,053
57,340
26,274
56,515
25,071
56,605
23,759
55,199
24,010
12,771
10,680
30,655
15,394
10,159
28,383
10,997
10,124
29,855
15,121
11,929
30,971
14,509
9,544
31,305
16,366
9,908
31,065
13,894
11,177
31,444
13,866
9,894
32,846
13,253
10,757
31,189
26,439
4,216
27,024
15,254
139,940
24,322
4,061
27,271
15,721
140,419
25,671
4,184
27,828
16,576
139,065
26,037
4,933
28,044
14,483
143,937
26,670
4,635
27,630
18,239
145,178
26,242
4,823
28,723
13,737
143,427
26,448
4,9%
28,660
15,405
144,038
27,594
5,252
29,857
15,725
144,824
25,971
5,217
30,299
17,967
146,208
74,386
60,165
73,475
58,875
71,991
57,609
73,002
58,220
73,582
58,431
72,266
57,074
73,292
58,322
73,905
58,870
73,993
59,181
MEMO
41 Total loans (gross) and securities adjusted 6
42 Total loans (gross) adjusted 6
1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and
agencies of foreign banks that include those branches and agencies with assets of
$750 million or more on June 30, 1980, plus those branches and agencies that had
reached the $750 million asset level on Dec. 31, 1984.
2. Includes securities purchased under agreements to resell.
3. Includes credit balances, demand deposits, and other checkable deposits.
4. Includes savings deposits, money market deposit accounts, and time
deposits.
5. Includes securities sold under agreements to repurchase.
6. Exclusive of loans to and federal funds sold to commercial banks in the
United States.
A22
1.31
DomesticNonfinancialStatistics • September 1987
GROSS D E M A N D DEPOSITS Individuals, Partnerships, and Corporations'
Billions of dollars, estimated daily-average balances, not seasonally adjusted
Commercial banks
T y p e of holder
1981
Dec.
1982
Dec.
1985
1984
Dec.
1983
Dec.
Dec.34
1987
1986
Mar.
Sept.
June
Dec.
Mar/
1 All holders—Individuals, partnerships, and
corporations
288.9
291.8
293.5
302.7
321.0
307.4
322.4
333.6
363.6
335.9
2
3
4
5
6
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
166.3
81.5
3.6
19.7
32.3
178.5
85.5
3.5
21.2
31.8
166.6
84.0
3.4
21.6
32.3
180.0
86.4
3.0
20.7
35.9
185.9
86.3
3.3
22.2
41.4
202.0
91.1
3.3
25.8
35.9
183.0
88.9
2.9
25.2
Financial business
Nonfinancial business
Consumer
Foreign
Other
Weekly reporting banks
1981
Dec.
1982
Dec.
1984
Dec. 2
1983
Dec.
1985
Dec. 3 - 4
7 A11 holders—Individuals, partnerships, and
corporations
8
9
10
11
12
Financial business
Nonfinancial business
Consumer
Foreign
Other
Mar.
June
Sept.
Dec.
Mar.
137.5
144.2
146.2
157.1
168.6
159.7
168.5
174.7
195.1
178.2
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
25.3
87.1
30.5
3.4
10.9
25.9
94.5
33.2
3.1
12.0
25.5
86.8
32.6
3.3
11.5
25.7
93.1
34.9
2.9
11.9
28.9
94.8
35.0
3.2
12.8
32.5
106.4
37.5
3.3
15.4
28.7
94.4
36.8
2.8
15.5
1. Figures include cash items in process of collection. Estimates of gross
deposits are based on reports supplied by a sample of commercial banks. Types of
depositors in each category are described in the June 1971 BULLETIN, p. 466.
Figures may not add to totals because of rounding.
2. Beginning in March 1984, these data reflect a change in the panel of weekly
reporting banks, and are not comparable to earlier data. Estimates in billions of
dollars for D e c e m b e r 1983 based on the new weekly reporting panel are: financial
business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other,
9.5.
3. Beginning March 1985, financial business deposits and, by implication, total
gross demand deposits have been redefined to exclude demand deposits due to
1987
1986
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.
4. Historical data back to March 1985 have been revised to account for
corrections of bank reporting errors. Historical data before March 1985 have not
been revised, and may contain reporting errors. Data for all commercial banks for
March 1985 were revised as follows (in billions of dollars): all holders, - . 3 ;
financial business, - . 8 ; nonfinancial business, - . 4 ; c o n s u m e r , .9; foreign, .1;
other, - . 1 . Data for weekly reporting banks for March 1985 were revised as
follows (in billions of dollars): all holders, - . 1 ; financial business, - . 7 ; nonfinancial business, - . 5 ; consumer, 1.1; foreign, .1; other, - . 2 .
Financial
1.32
Markets
A23
COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING
Millions of dollars, end of period
1986
Instrument
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
1987
Jan.
Feb.
Mar.
Apr.
May
Commercial paper (seasonally adjusted unless noted otherwise)
1 All issuers
166,436
187,658
237,586
300,899
331,016
331,016
337,189 r
336,678'
338,797
346,769
354,249
34,605
44,455
56,485
78,443
100,207
100,207
101,964'
102,939
102,889
103,957
105,397
2.516
2,441
2,035
1,602
2,265
2,265
2,284
2,174
2,116
2,307
2,429
84,393
97,042
110,543
135,504
152,385
152,385
157,252
158,955'
159,333
163,421
169,225
32,034
47,437
35,566
46,161
42,105
70,558
44,778
86,952
40,860
78,424
40,860
78,424
45,085
77,973
45,722
74,784
46,634
76,575
48,604
79,391
48,401
79,627
3
2
3
4
5
6
Financial companies
Dealer-placed
paper4
Total
Bank-related (not seasonally
adjusted)
Directly placed
paper5
Total
Bank-related (not seasonally
adjusted)
Nonfinancial companies 6
Bankers dollar acceptances (not seasonally adjusted) 7
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
79,543
78,309
78,364
68,413
64,974
64,974
65,049
65,144
66,125'
66,752'
67,695
10,910
9.471
1,439
9,355
8,125
1,230
9,811
8,621
1,191
11,197
9,471
1,726
13,423
11,707
1,716
13,423
11,707
1,716
13,224
10,662
2,561
11,828
10,006
1,821
12,294'
10,516
1,730
11,180'
9,784'
1,396
11,176
9,548
1,628
1,480
949
66,204
418
729
67,807
0
671
67,881
0
937
56,279
0
1,317
50,234
0
1,317
50,234
0
983
50,843
0
1,230
52,087
0
1,453
52,255
0
1,519
54,053'
0
1,547
54,972
17,683
16,328
45,531
15,649
16,880
45,781
17,845
16,305
44,214
15,147
13,204
40,062
14,670
12,960
37,344
14,670
12,960
37,344
14,459
12,783
37,807
14,615
12,876
37,654
14,711
13,083
38,159
15,116'
13,836'
37,800'
15,374
13,946
38,375
1. 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.
2. Correction of a previous misclassification of paper by a reporter has created
a break in the series beginning D e c e m b e r 1983. The correction adds some paper to
nonfinancial and to dealer-placed financial paper.
3. Institutions engaged primarily in activities such as, but not limited to,
commercial, savings, and mortgage banking; sales, personal, and mortgage
financing; factoring, finance leasing, and other business lending; insurance
underwriting; and other investment activities.
1.33
4. Includes all financial company paper sold by dealers in the open market.
5. As reported by financial companies that place their paper directly with
investors.
6. Includes public utilities and firms engaged primarily in such activities as
communications, construction, manufacturing, mining, wholesale and retail trade,
transportation, and services.
7. Beginning October 1984, the number of respondents in the bankers acceptance survey were 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 B A N K S on Short-Term Business Loans
Percent per annum
Rate
10.50
10.00
9.50
9.00
8.50
Month
Effective Date
1986—July 11
Aug. 26
8.00
7.50
1987—Apr.
May
7.75
8.00
8.25
1
1
15
NOTE. These data also appear in the B o a r d ' s H.15 (519) release. For address,
see inside front cover.
Average
rate
1985—Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept
Oct.
Nov
Dec.
10.61
10.50
10.50
10.50
10.31
9.78
9.50
9.50
9.50
9.50
9.50
9.50
1986—Jan. .
Feb.
Mar.
Apr.
9.50
9.50
9.10
8.83
Month
1986—May
June
July
Aug
Sept
Oct
Nov
Dec
1987—Jan
Feb
Mar
Apr
May
June
July
A24
1.35
DomesticNonfinancialStatistics • September 1987
I N T E R E S T R A T E S M o n e y and Capital M a r k e t s
Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted.
1987
Instrument
1984
1985
1987, week ending
1986
Mar.
Apr.
May
June
May 29
June 5
June 12
June 19
June 26
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
6-month
8
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 bills'
Secondary market 9
15
3-month
16
6-month
17
1-year
Auction average 1 0
18
3-month
19
6-month
1-year
20
10.22
8.80
8.10
7.69
6.80
6.33
6.13
5.50
6.37
5.50
6.85
5.50
6.73
5.50
6.80
5.50
6.65
5.50
6.70
5.50
6.75
5.50
6.79
5.50
10.05
10.10
10.16
7.94
7.95
8.01
6.62
6.49
6.39
6.22
6.16
6.10
6.39
6.45
6.50
6.83
6.93
7.04
6.86
6.92
7.00
6.88
6.99
7.12
6.87
6.95
7.06
6.86
6.94
7.06
6.85
6.90
6.94
6.87
6.90
6.94
9.97
9.73
9.65
7.91
7.77
7.75
6.58
6.38
6.31
6.11
5.95
5.88
6.28
6.22
6.14
6.78
6.74
6.47
6.80
6.77
6.50
6.81
6.76
6.47
6.78
6.78
6.51
6.83
6.82
6.52
6.79
6.78
6.53
6.78
6.71
6.48
10.14
10.19
7.92
7.96
6.39
6.29
6.09
6.02
6.41
6.44
6.91
7.03
6.83
6.91
6.98
7.10
6.90
7.05
6.83
6.97
6.79
6.81
6.81
6.82
10.17
10.37
10.68
10.73
7.97
8.05
8.25
8.28
6.61
6.52
6.51
6.71
6.18
6.17
6.18
6.37
6.42
6.52
6.65
6.73
6.81
6.99
7.24
7.25
6.84
6.94
7.15
7.11
6.86
7.03
7.33
7.36
6.85
6.99
7.25
7.21
6.84
6.98
7.26
7.18
6.81
6.88
7.06
7.08
6.86
6.91
7.05
7.06
9.52
9.76
9.92
7.48
7.65
7.81
5.98
6.03
6.08
5.59
5.60
5.68
5.64
5.90
6.09
5.66
6.05
6.52
5.67
5.99
6.35
5.67
6.17
6.48
5.70
6.10
6.44
5.55
5.89
6.36
5.65
5.93
6.29
5.77
6.05
6.32
9.57
9.80
9.91
7.49
7.66
7.76
5.97
6.02
6.07
5.56
5.56
5.68
5.76
5.93
5.92
5.75
6.11
6.56
5.69
5.99
6.54
5.88
6.49
n.a.
5.81
6.10
n.a.
5.59
5.99
6.54
5.70
5.95
n.a.
5.64
5.93
n.a.
10.89
11.65
11.89
12.24
12.40
12.44
12.48
12.39
8.43
9.27
9.64
10.13
10.51
10.62
10.97
10.79
6.46
6.87
7.06
7.31
7.55
7.68
7.85
7.80
6.03
6.42
6.58
6.79
7.06
7.25
n.a.
7.55
6.50
7.02
7.32
7.57
7.83
8.02
n.a.
8.25
7.00
7.76
8.02
8.26
8.47
8.61
n.a.
8.78
6.80
7.57
7.82
8.02
8.27
8.40
n.a.
8.57
6.95
7.78
8.01
8.23
8.42
8.55
n.a.
8.71
6.91
7.74
8.00
8.19
8.44
8.58
n.a.
8.75
6.80
7.65
7.89
8.10
8.38
8.50
n.a.
8.66
6.73
7.45
7.68
7.87
8.14
8.27
n.a.
8.46
6.77
7.49
7.72
7.91
8.14
8.28
n.a.
8.44
11.99
10.75
8.14
7.62
8.31
8.79
8.63
8.73
8.79
8.70
8.49
8.52
9.61
10.38
10.10
8.60
9.58
9.11
6.95
7.76
7.32
6.25
7.25
6.66
7.20
8.29
7.55
7.61
8.78
8.00
7.48
8.68
7.79
7.60
8.80
8.03
7.70
8.90
7.97
7.55
8.75
7.83
7.25
8.45
7.63
7.40
8.60
7.72
13.49
12.71
13.31
13.74
14.19
12.05
11.37
11.82
12.28
12.72
9.71
9.02
9.47
9.95
10.39
8.99
8.36
8.84
9.13
9.61
9.35
8.85
9.15
9.36
10.04
9.82
9.33
9.59
9.83
10.51
9.87
9.32
9.65
9.98
10.52
9.93
9.40
9.73
9.98
10.58
9.94
9.38
9.74
10.01
10.61
9.91
9.36
9.70
10.00
10.58
9.84
9.30
9.60
9.97
10.48
9.80
9.25
9.59
9.94
10.43
13.81
12.06
9.61
8.84
9.51
10.05
10.05
10.05
10.14
10.04
10.00
10.03
11.59
4.64
10.49
4.25
8.76
3.48
7.52
2.90
7.94
2.99
8.41
3.02
8.31
2.92
8.55
3.03
8.37
2.98
8.34
2.94
8.29
2.88
8.22
2.86
CAPITAL M A R K E T R A T E S
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
U.S. Treasury notes and bonds 1 1
Constant maturities 1 2
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
Composite 1 3
Over 10 years (long-term)
State and local notes and bonds
Moody's series 1 4
Aaa
Baa
Bond Buyer series 1 5
Corporate bonds
Seasoned issues 1 6
All industries
Aaa
Aa
A
Baa
A-rated, recently-offered utility
bonds 1 7
MEMO: Dividend/price ratio 1 8
39
Preferred stocks
40
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 N o v e m b e r 1979, maturities for data shown are 30-59 days, 90-119 days,
and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150—
179 days for finance paper.
5. Yields are quoted on a bank-discount basis, rather than 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. F o r indication purposes only.
9. Unweighted average of closing bid rates quoted by at least five dealers.
10. Rates are recorded in the week in which bills are issued. Beginning with the
Treasury bill auction held on Apr. 18, 1983, bidders were required to state the
percentage yield (on a bank discount basis) that they would accept to two decimal
places. Thus, average issuing rates in bill auctions will be reported using two
rather than three decimal places.
11. Yields are based on closing bid prices quoted by at least five dealers.
12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields
are read from a yield curve at fixed maturities. Based on only recently issued,
actively traded securities.
13. Averages (to maturity or call) for all outstanding bonds neither due nor
callable in less than 10 years, including one very low yielding " f l o w e r " bond.
14. General obligations based on Thursday figures; M o o d y ' s Investors Service.
15. General obligations only, with 20 years to maturity, issued by 20 state and
local governmental units of mixed quality. Based on figures for Thursday.
16. Daily figures from M o o d y ' s Investors Service. Based on yields to maturity
on selected long-term bonds.
17. Compilation of the Federal Reserve. This series is an estimate of the yield
on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of
call protection. Weekly data are based on Friday quotations.
18. Standard and P o o r ' 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 B o a r d ' s H. 15 (519) and G. 13 (415) releases.
For address, see inside front cover.
Financial Markets
1.36
STOCK MARKET
A25
Selected Statistics
1987
1986
1985
1984
Indicator
1986
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
Transportation
3
4
Utility
5
Finance
6 Standard & P o o r ' s Corporation (1941-43 = 10)' . . .
7 American Stock Exchange 2
(Aug. 31, 1973 = 50)
92.46
108.01
85.63
46.44
89.28
160.50
108.09
123.79
104.11
56.75
114.21
186.84
136.00
155.85
119.87'
71.36 r
147.19'
236.34
136.74
156.56
120.04
73.38
143.89
237.36
140.84
162.10
122.27
75.77
142.97
245.09
142.12
163.85
121.26
76.07
144.29
248.61
151.17
175.60
126.61
78.54
153.32
264.51
160.23
189.17
135.49
78.19
158.41
280.93
166.43
198.95
138.55
77.15
162.41
292.47
163.88
199.03
137.91
72.74
150.52
289.32
163.00
198.78
141.30
71.64
145.97
289.12
169.58
206.61
150.39
74.25
152.73
301.36
207.96
229.10
264.38
257.82
265.14
264.65
289.02
315.60
332.55
330.65
328.77
334.49
Volume of trading (thousands
8 N e w York Stock Exchange
9 American Stock Exchange
91,084 109,191 141,385'
8,355 11,846
6,107
192,419 183,478
14,755 14,962
180,251
15,678
187,135
14,420
170,898
11,655
163,380
12,813
of
shares)
131,155 154,776' 148,228
8,930 10,513
12,272
Customer financing (end-of-period balances, in millions of dollars)
10 Margin credit at broker-dealers 3
Free credit balances
11 Margin-account 5
12 Cash-account
at
22,470
28,390
36,840
36,310
37,090
36,840
34,960
35,740
38,080
39,820
38,890
38,420
1,755
10,215
2,715
12,840
4,880
19,000
3,805
14,445
3,765
15,045
4,880
19,000
5,060
17,395
4,470
17,325
4,730
17,370
4,660
17,285
4,355
16,985
3,680
15,405
brokers4
Margin requirements (percent of market value and effective date) 6
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
70
50
70
80
60
80
65
50
65
55
50
55
1. Effective July 1976, includes a new financial group, banks and insurance
companies. With this change the index includes 400 industrial stocks (formerly
425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40
financial.
2. Beginning July 5, 1983, the American Stock Exchange rebased its index
effectively cutting previous readings in half.
3. Beginning July 1983, under the revised Regulation T , margin credit at
broker-dealers includes credit extended against stocks, convertible bonds, stocks
acquired through exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds,
and subscription issues was discontinued in April 1984.
4. Free credit balances are in accounts with no unfulfilled commitments to the
brokers and are subject to withdrawal by customers on demand.
5. N e w series beginning June 1984.
6. These regulations, adopted by the Board of Governors pursuant to the
Securities Exchange Act of 1934, limit the amount of credit to purchase and carry
Nov. 24, 1972
65
50
65
Jan. 3, 1974
50
50
50
"margin securities" (as defined in the regulations) when such credit is collateralized by securities. Margin requirements on securities other than options are the
difference between the market value (100 percent) and the maximum loan value of
collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15,
1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968;
and Regulation X, effective Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in
Regulation T the initial margin required for writing options on securities, setting it
at 30 percent of the current market-value of the stock underlying the option. On
Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the
same as the option maintenance margin required by the appropriate exchange or
self-regulatory organization; such maintenance margin rules must be approved by
the Securities and Exchange Commission. Effective Jan. 31, 1986, the S E C
approved new maintenance margin rules, permitting margins to be the price of the
option plus 15 percent of the market value of the stock underlying the option.
A26
1.37
DomesticNonfinancialStatistics • September 1987
SELECTED FINANCIAL INSTITUTIONS
Selected Assets and Liabilities
Millions of dollars, end of period
1987
1986
Account
1984
1985
June
July
Aug.
Oct.
Sept.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
Savings and loan associations
1 Assets
903,488
948,781
954,226
957,945
965,032
957,229
961,894
964,096
963,316
935,557 r
937,274'
940,318
944,378
2
3
4
5
555,291
583,235
97,303
126,712
238,833
565,037
113,158
130,877
258,310
565.353
113.100
132,787
259.798
566,438
113,621
138,863
259,726
557.137
117.617
138,619
261,415
557,303
121,606
138,213
250,781
556.780
122,682
141.510
250,297
553,552
123,257
142,700
251,769
n.a.
129,338'
133,011'
261,739'
n.a.
128,508'
136,221'
263,473'
n.a.
129,007
138,787
266,540
n.a.
134,886
136,170
274,951
Mortgages
Mortgage-backed s e c u r i t i e s . . . .
Cash and investment securities' .
Other
6 Liabilities and net worth
7 Savings capital
8 Borrowed money
9
FHLBB
10
Other
11 Other
12 Net worth 2
124.801
223,396
903,488
948,781
954,226
957,945
965,032
957,229
961,894
964,096
963,316
935,557' 937,274'
940,318
944,378
725,045
125,666
64,207
61.459
17,944
750,071
138.798
73,888
64,910
19,045
744,026
148.054
73,553
74,501
20,792
747,020
146,578
75,058
71,520
22,785
749,020
148,541
75,594
72,947
24.706
743,518
155.748
80,364
75,384
15,461
742,747
152,567
75,295
77.272
23,255
740,066
156,920
75,626
81,294
24,078
741,081
159,742
80.194
79,548
20,071
721,765'
153,361'
75,552
77,809'
19,756'
722,283'
152,163'
75,673'
76,490'
21,820'
722,767
158,119
76,478
81,641
18,758
717,100
165,926
77,870
88,056
20,456
34,833
41,064
41,353
41.560
42,764
42,503
43,326
43,034
42,423
40,672'
41,002'
40.673
40,887
61,305
54.475
57,200
55,687
53,180
51,163
49,887
48,222
41,650
n.a.
n.a.
n.a.
n.a.
MEMO
13 Mortgage loan commitments
outstanding 3
F S L l C - i n s u r e d federal savings banks
14 Assets
98,559
131,868
180,124
183,317
186,810
196,225
202,106
204,918
210,562
235,430' 235,764'
241,448
246,299
15 Mortgages
16 Mortgage-backed s e c u r i t i e s . . . .
17 Other
57.429
9,949
10,971
72,355
15,676
11.723
99,758
21.598
16,774
101,755
23.247
17,027
103,019
24,097
17,056
108,627
26,431
18,509
110,826
27,516
18,697
112,117
28,324
19,266
113,638
29,766
19,034
136,773'
33,570'
15,776'
136,493'
34,634'
16,066'
138,707
36,105
16,745
140.861
37,511
17,040
18 Liabilities and net worth
98,559
131,868
180,124
183,317
186,810
196,225
202,106
204,918
210,562
235,430' 235,764'
241,448
246,299
19
20
21
22
23
24
79,572
12,798
7,515
5,283
1,903
4,286
103,462
19,323
10,510
8,813
2,732
6,351
138.168
28,502
15,301
13.201
4,279
9,175
140,610
28,722
15,866
12,856
4.564
9,422
142,858
29,390
16,123
13,267
4,914
9,647
149,074
32,319
16,853
15,466
4,666
10,165
152,834
33.430
17,382
16,048
5,330
10,511
154,447
33,937
17,863
16,074
5,652
10,883
157,872
37,329
19,897
17,432
4,263
11,098
176,744'
40,614'
20,730
19,884'
5,301'
12,775'
177,362'
39,777'
20,226'
19,551'
5,478'
13,152'
178,693
43,915
21,104
22,811
5,250
13,591
180,646
46,125
21,718
24,407
5,538
13,999
3,234
5.355
9,410
10,139
9,770
10,221
9,356
9,952
8,686
n.a.
n.a.
n.a.
n.a.
Savings capital
Borrowed money
FHLBB
Other
Other
Net worth
MEMO
25 Mortgage loan commitments
outstanding 3
Savings banks
203,898
216,776
223,367
224,569
227,011
228,854
230,919
232,577
236,866
235,603
238,074
240,739
243,405
102,895
24,954
110,448
30,876
110,958
36,692
111,971
36.421
113,265
37,350
114,188
37,298
116,648
36.130
117,612
36,149
118,323
35,167
119,199
36,122
119,737
37,207
121,178
38,012
122,726
37,141
14,643
19,215
2,077
23,747
4,954
11,413
13,111
19,481
2,323
21,199
6,225
13,113
12,115
22,413
2,281
2,036
5,301
13,244
12.297
22.954
2.309
20,862
4.651
13,104
12,043
21,161
2,400
20,602
5,018
13,172
12,357
23,216
2,407
20,902
4,811
13,675
12,585
23.437
2,347
21,156
5,195
13,421
13,037
24,051
2,290
20,749
5,052
13,637
14,209
25,836
2,185
20,459
6,894
13,793
13,332
26,220
2,180
19,795
5,239
13,516
13,525
26,893
2,168
19,770
5,143
13,631
13,631
27,463
2,041
19,598
5,703
13,713
13.741
28,697
2,062
19,768
5,305
13,965
35 Liabilities
203,898
216,776
223,367
224,569
227,011
228,854
230,919
232,577
236,866
235,603
238,074
240,739
243,405
36 Deposits
37
Regular 4
38
Ordinary savings
39
Time
40
Other
41 Other liabilities
42 General reserve accounts
180,616
177,418
33,739
104,732
3.198
12,504
10,510
185,972
181,921
33,018
103,311
4,051
17,414
12,823
189,109
183,970
34.008
103,083
5.139
19,226
14.731
188,615
183,433
34.166
102.374
5,182
20.641
15,084
189,937
184,764
34,530
102,668
5,173
21,360
15,427
190.210
185,002
35,227
102,191
5,208
21,947
16,319
190.334
185,254
36,165
101,125
5,080
23,319
16,896
190,858
185,958
36,739
101,240
4,900
24,254
17,146
192,194
186,345
37,717
100,809
5,849
25,274
18,105
191,441
186,385
38,467
100.604
5,056
24,710
18,236
192,559
187,597
39,370
100,922
4,962
25,663
18,486
193,693
188,432
40,558
100,896
5,261
27,003
18,830
193,349
187.796
41,322
100,311
5,553
29,059
19,422
26 Assets
77
78
79
30
31
37
33
34
Loans
Mortgage
Other
Securities
U.S. government
Mortgage-backed s e c u r i t i e s . . .
State and local g o v e r n m e n t . . .
Corporate and other
Cash
Other assets
Financial Markets
All
1.37—Continued
1987
1986
Account
1984
1985
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
n a.
n a.
n a.
n a.
n.a.
Credit unions 5
43 Total assets/liabilities and capital .
93,036
118,010
134,703
137,901
139,233
140,496
143,662
145,653
147,726
44
45
63,205
29,831
77,861
40,149
87,579
47,124
89,539
48,362
90,367
48,866
91,981
48,515
93,257
50,405
94,638
51,015
95,483
52,243
62,561
42,337
20,224
84,348
57,539
26,809
73,513
47,933
25,580
105,963
70,926
35,037
77,847
50,613
27,234
122,952
80,975
41,977
79,647
51,331
28,316
125,331
82,596
42,735
80,656
52,007
28,649
126,268
83,132
43,136
81,820
53,042
28,778
128,125
84,607
43,518
83,388
53,434
29,954
130,483
86,158
44,325
84,635
53,877
30,758
131,778
87,009
44,769
86,137
55,304
30,833
134,327
87,954
46,373
Federal
State
46 Loans outstanding
47
Federal
48
State
49 Savings
50
Federal
51
State
n.a.
Life insurance companies
52 Assets
53
54
55
56
57
58
59
60
61
62
63
Securities
Government
United States 6
State and local
Foreign 7
Business
Bonds
Stocks
Mortgages
Real estate
Policy loans
Other assets
825,901
872,359
877,919
887,255
892,304
860,682
910,691
920,771
931,962
943,421
63,899
75,230
42,204
51,700
8,713
9,708
12,982
13,822
359,333 423,712
295,998 346,216
63,335
77,496
156,699 171,797
25,767
28,822
54,505
54,369
71,971
63,776
78,284
54,197
10,114
13,973
455,119
367,966
87,153
180,041
30,350
57,342
74,223
78,722
54,321
10,350
14,051
455,013
369,704
85,309
182,542
31,151
54,249
76,214
79,188
54,487
10,472
14,229
463,135
374,670
88,465
183,943
31,844
54,247
74,898
81,636
56,698
10,606
14,332
462,540
378,267
84,273
185,268
31,725
54,273
76,862
82,047
57,511
10,212
14,324
467,433
381,381
86,052
186,976
31,918
54,199
77,798
84,858
59,802
10,712
14,344
473,860
386,293
87,567
189,460
32,184
54,152
76,177
85,849
61,494
10,267
14,088
474,485
386,994
87,491
192,975
32,079
54,016
81,367
85,000
61,014
10,048
13,938
487,837
395,994
91,843
193,395
32,229
53,692
79,809
87,678
63,580
10,264
13,834
497,143
401,231
95,912
193,957
32,061
53,696
78,886
722,979
1. Holdings of stock of the Federal H o m e L o a n Banks are in " o t h e r a s s e t s . "
2. Includes net undistributed income accrued by most associations.
3. As of July 1985, data include loans in process.
4. Excludes checking, club, and school accounts.
5. Data include all federally insured credit unions, both federal and state
chartered, serving natural persons.
6. Direct and guaranteed obligations. Excludes federal agency issues not
guaranteed, which are shown in the table under " B u s i n e s s " securities.
7. Issues of foreign governments and their subdivisions and bonds of the
International Bank for Reconstruction and Development.
NOTE. Savings and loan associations:
Estimates by the F H L B B for all
associations in the United States based on annual benchmarks for non-FSLlCinsured associations and the experience of FSLIC-insured associations.
FSLIC-insured federal savings banks: Estimates by the F H L B B for federal
savings banks insured by the F S L I C and based on monthly reports of federally
insured institutions.
Savings banks: Estimates by the National Council of Savings Institutions for all
savings banks in the United States and for FDIC-insured savings banks that have
converted to federal savings banks.
Credit unions: Estimates by the National Credit Union Administration for
federally chartered and federally insured state-chartered credit unions serving
natural persons.
Life insurance companies: Estimates of the American Council of Life Insurance
for all life insurance companies in the United States. Annual figures are annualstatement asset values, with bonds carried on an amortized basis and stocks at
year-end market value. Adjustments for interest due and accrued and for
differences between market and book values are not made on each item separately
but are included, in total, in " o t h e r a s s e t s . "
A28
1.38
DomesticNonfinancialStatistics • September 1987
FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Calendar year
Type of account or operation
U.S. budget1
1 Receipts, total
2
On-budget
3
Off-budget
4 Outlays, total
5
On-budget
6
Off-budget
7 Surplus, or deficit ( - ) , total
8
On-budget
9
Off-budget
Source of financing (total)
Borrowing from the public
Cash and monetary assets (decrease, or
increase ( - ) ) "
12
Other 3
10
11
Fiscal
year
1984
Fiscal
year
1985
Fiscal
year
1986
1987
Jan.
Feb.
Mar.
Apr.
May
June
81,771
62.981
18,790
83,942
68,176
15,766
-2,170
-5,195
3.024
55,463
37,919
17,544
83,828
67,138
16,690
-28,366
-29,219
854
56,515
38,469
18,046
84,527
67,872
16,655
-28,012
-29,403
1,391
122,897
99,083
23,814
84,240
69,215
15,025
38,657
29,867
8,790
47,691
30,205
17,486
83,435
66,389
17,046
-35,744
-36,184
440
82,945
64,222
18,723
83,366
66,221
17,145
-420
-1,998
1,578
666,457
500,382
166,075
851,781
685,968
165,813
-185,324
-185,586
262
734,057
547,886
186,171
946,316
769,509
176.807
-212,260
-221,623
9.363
170,817
197,269
236,284
4,353
15,248
7,884
9,075
13,005
9,655
6.631
7,875
13,367
1,630
-14,324
-1,235
-9,564
7,381
16,574
-3,456
15,621
4,506
-47,189
-543
24,217
-1,478
-6,434
-2,801
30,426
8,514
21,913
17,060
4,174
12,886
31,384
7,514
23,870
41,307
15,746
25,561
24,816
3,482
21,334
8,969
3,576
5,394
55,744
29,688
26,056
33,106
6,383
26,723
40,072
13,774
26,298
769,091
568,862
200,228
989,815
806,318
183,498
-220,725
-237,455
16,371
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
15
Tax and loan accounts
1. In accordance with the Balanced Budget and Emergency Deficit Control Act
of 1985, all former off-budget entries are now presented on-budget. The Federal
Financing Bank (FFB) activities are now shown as separate accounts under the
agencies that use the F F B to finance their programs. The act has also moved two
social security trust funds (Federal old-age survivors insurance and Federal
disability insurance trust funds) off-budget.
2. Includes U.S. Treasury operating cash accounts; SDRs; reserve position on
the U.S. quota in the IMF; loans to International Monetary Fund: and other cash
and monetary assets.
3. 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.
G o v e r n m e n t " and the Budget of the U.S.
Government.
Federal Finance
1.39
A29
U.S. BUDGET RECEIPTS A N D OUTLAYS
Millions of dollars
Calendar year
Source or type
Fiscal
year
Fiscal
year
1985
1986
1985
H2
1987
1986
HI
H2
HI
1987
Apr.
May
June
RECEIPTS
1 All sources
i
17
13
Individual income taxes, net
Withheld
Presidential Election Campaign Fund . . .
Non withheld
Refunds
Corporation income taxes
Gross receipts
Refunds
Social insurance taxes and contributions,
net
Employment taxes and
contributions 1
Self-employment taxes and
contributions 2
Unemployment insurance
Other net receipts 3
14
15
16
17
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts 4
3
4
5
6
7
8
9
10
II
734,057
769,091
364,790
394,345
387,524
447,282
122,897
47,691
82,945
334,531
298,941
35
101,328
65,743
348,959
314,838
36
105,994
71,873
169,987
155,725
6
22,295
8,038
169,444
153,919
31
78,981
63,488
183,156
164,071
4
27,733
8,652
205,157
156,760
30
112,421
64,052
71,850
26,943
7
62,939
18,039
9,275
24,823
7
7,228
22,782
40,521
25,525
4
16,574
1,583
77,413
16,082
80,442
17,298
36,528
7,751
41,946
9,557
42,108
8,230
52,396
10,881
13,290
2,101
2,885
1.042
13,572
2,599
265,163
283,901
128,017
156,714
134,006
163,519
33,646
30,218
24,712
234,646
255,062
116,276
139,706
122,246
146,696
30,457
22,270
23,981
10,468
25,758
4,759
11,840
24,098
4,742
985
9,281
2,458
10,581
14,674
2,333
1,338
9,328
2,429
12,020
14,514
2,310
7,403
2,827
361
732
7,529
419
1,612
315
416
35,992
12,079
6,422
18,539
32,919
13,323
6,958
19,887
18,470
6,354
3,323
9,861
15,944
6,369
3,487
10,002
15,947
7,282
3,649
9,605
15,845
7,129
3,818
10,299
2,471
1,165
810
1,767
2,633
1,142
726
1,853
3,099
1,415
507
1,719
OUTLAYS
18 All types
946,316'
989,815'
487,188
486,037
504,785
503,338
84,240
83,435
83,366
National defense
International affairs
General science, space, and technology . . .
??. Energy
7 3 Natural resources and environment
2 4 Agriculture
252,748
16,176
8,627
5,685
13,357
25,565
273,369
14,471
9,017
4,792
13,508
31,169
134,675
8,367
4,727
3,305
7,553
15,412
135,367
5,384
12,519
2,484
6,245
14,482
138,544
8,876
4,594
2,735
7,141
16,160
142,846
4,420
4,324
2,335
6,179
11,824
24,407
163
653
361
1,052
2,641
23,471
831
779
356
985
716
24,694
1,068
836
598
1,176
-342
76
27
28
Commerce and housing credit
Transportation
Community and regional development . . . .
Education, training, employment, social
services
4,229
25,838
7,680
4,258
28,058
7,510
644
15,360
3,901
860
12,658
3,169
3,647
14,745
3,494
4,889
12,113
3,108
1,129
1,936
592
997
2,089
585
703
2,539
584
79
30
31
Health
Social security and medicare
Income security
3?
33
34
3<I
36
37
Veterans benefits and services
Administration of justice
General government
General-purpose fiscal assistance
Net interest'
Undistributed offsetting receipts 6
19
'0
29,342
29,662
14,481
14,712
15,268
14,182
2,317
2,255
2,143
33,542
254,446
128,200
35,936
190,850
120,686
17,237
129,037
59,457
17,872
135,214
60,786
19,814
138,296
59,628
20,318
142,864
62,248
3,672
23,615
11,282
3,544
23,782
10,273
3,525
26,339
7,931
26,352
6,277
5,228
6,353
129,436
-32,759
26,614
6,555
6,796
6,430
135,284
-33,244
14,527
3,212
3,634
3,391
67,448
-17,953
12,193
3,352
3,566
2,179
68,054
-17,193
14,497
3,360
2,786
2,767
65,816
-17,426
12,264
3,626
3,238
455
70,110
-18,005
2,360
619
196
179
11,295
-4,230
2,047
646
358
62
12,284
-2,626
2,440
690
1,448
54
10,010
-3,069
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. Net interest function includes interest received by trust f u n d s .
6. 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.
G o v e r n m e n t , " and the Budget of the U.S. Government, Fiscal Year 1988.
A30
1.40
DomesticNonfinancialStatistics • September 1987
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars
1985
1986
1987
Item
Mar. 31
1 Federal debt outstanding
i
3
4
Public debt securities
Held by public
Held by agencies
5 Agency securities
Held by public
6
7
Held by agencies
8 Debt subject to statutory limit
June 30
Sept. 30
Dec. 31
Mar. 31
Sept. 30
Dec. 31
Mar. 31
1,779.0
1,827.5
1,950.3
1,991.1
2,063.6
2,129.5
2,218.9
2,250.7
1,710.7
1,415.2
295.5
1,774.6
1,460.5
314.2
1,823.1
1,506.6
316.5
1,945.9
1,597.1
348.9
1,986.8
1,634.3
352.6
2,059.3
1,684.9
374.4
2,125.3
1,742.4
382.9
2,214.8
1,811.7
403.1
2,246.7
1,839.3
407.5
4.4
3.3
1.1
4.4
3.3
1.1
4.4
3.3
1.1
4.4
3.3
1.1
4.3
3.2
1.1
4.3
3.2
1.1
4.2
3.2
1.1
4.0
3.0
1.1
4.0
2.9
1.1
1,711.4
1,775.3
1,823.8
1,932.4
1,973.3
2,060.0
2,111.0
2,200.5
2,232.4
2,058.7
1.3
2,109.7
1.3
2,199.3
1.3
2,231.1
1.3
2,078.7
2,111.0
2,300.0
2,300.0
1,715.1
9 Public debt securities
10 Other debt 1
1,710.1
1.3
1,774.0
1.3
1,822.5
1.3
1,931.1
1.3
1,972.0
1.3
11 MEMO: Statutory debt limit
1,823.8
1,823.8
1,823.8
2,078.7
2,078.7
1. Includes guaranteed debt of Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District
of Columbia stadium bonds.
1.41
June 30
GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCES. Treasury Bulletin and Monthly Statement
United States.
of the Public Debt of the
Types and Ownership
Billions of dollars, end of period
1986
Type and holder
1 Total
gross public debt
By type
? Interest-bearing debt
3 Marketable
4
Bills
5
Notes
6
Bonds
7 Nonmarketable 1
8
State and local government series
9
Foreign issues 2
10
Government
11
Public
12
Savings bonds and notes
13
Government account series 3
14 Non-interest-bearing debt
15
16
17
18
19
20
21
22
7.3
74
25
26
By holder4
U . S . Treasury and other federal agencies and trust funds
Federal Reserve Banks
Private investors
Commercial banks
Money market funds
Insurance companies
Other companies
State and local governments
Individuals
Savings bonds
Other securities
Foreign and international 5
Other miscellaneous investors 6
1984
1983
1987
1986
Q2
Q3
Q4
Ql
1,410.7
1,663.0
1,945.9
2,214.8
2,059.3
2,125.3
2,214.8
2,246.7
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
1,660.6
1,247.4
374.4
705.1
167.9
413.2
44.4
9.1
9.1
.0
73.1
286.2
1,943.4
1,437.7
399.9
812.5
211.1
505.7
87.5
7.5
7.5
.0
78.1
332.2
2,212.0
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2,056.7
1,498.2
396.9
869.3
232.3
558.5
98.2
5.3
5.3
.0
82.3
372.3
2,122.7
1,564.3
410.7
896.9
241.7
558.4
102.4
4.1
4.1
.0
85.6
365.9
2,212.0
1,619.0
426.7
927.5
249.8
593.1
110.5
4.7
4.7
.0
90.6
386.9
2,244.0
1,635.7
406.2
955.3
259.3
608.3
118.5
4.9
4.9
.0
93.0
391.4
9.8
2.3
2.5
2.8
2.6
2.6
2.8
2.7
236.3
151.9
1,022.6
188.8
22.8
56.7
39.7
155.1
289.6
160.9
1,212.5
183.4
25.9
76.4
50.1
179.4
348.9
181.3
1,417.2
192.2
25.1
95.8
59.0
n.a.
403.1
211.3
1,602.0
225.0
28.6
106.9
68.8
n.a.
374.4
183.8
1,502.7
197.2
22.8
97.7
61.2
n.a.
382.9
190.8
1,553.3
212.5
24.9
100.9
65.7
n.a.
403.1
211.3
1,602.0
225.0
28.6
106.9
68.8
n.a.
407.5
n.a.
1,641.4
232.0
18.8
n.a.
72.1
n.a.
71.5
61.9
166.3
259.8
74.5
69.3
192.9
360.6
79.8
75.0
214.6
n.a.
92.3
70.4
257.0
n.a.
83.8
75.7
239.8
n.a.
87.1
70.9
256.3
n.a.
92.3
70.4
257.0
n.a.
94.7
68.4
272.1
n.a.
1. Includes (not shown separately): Securities issued to the Rural Electrification Administration, depository b o n d s , retirement plan bonds, and individual
retirement bonds.
2. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners.
3. Held almost entirely by U.S. Treasury agencies and trust funds.
4. Data for Federal Reserve Banks and U.S. government agencies and trust
f u n d s are actual holdings; data for other groups are Treasury estimates.
1985
5. Consists of investments of foreign and international accounts. Excludes noninterest-bearing notes issued to the International Monetary F u n d .
6. Includes savings and loan associations, nonprofit institutions, credit unions,
mutual savings banks, corporate pension trust funds, dealers and brokers, certain
U.S. Treasury deposit accounts, and federally sponsored agencies.
SOURCES. Data by type of security, U.S. Treasury Department, Monthly
Statement of the Public Debt of the United States; data by holder, Treasury
Bulletin.
Federal Finance
1.42
A31
U.S. TREASURY A N D FEDERAL AGENCY SECURITIES TRANSACTIONS By Type of Transactions'
Par value; averages of daily figures, in millions of dollars
1987
1987
Item
1
?
3
4
6
7
8
9
10
11
1?
13
14
15
16
17
18
Immediate delivery 2
U.S. Treasury securities
By maturity
Bills
Other within 1 year
1-5 years
5-10 years
Over 10 years
By type of customer
U.S. government securities
dealers
U.S. government securities
brokers
All others 3
Federal agency securities
Certificates of deposit
Bankers acceptances
Commercial paper
Futures contracts 4
Treasury bills
Treasury coupons
Federal agency securities
Forward transactions 5
U.S. Treasury securities
Federal agency securities
1984
1985
1986
May
June
May 20
May 27
June 3
June 10
June 17
June 24
52,778
75,331
95,447
138,007
116,386'
110,383
121,141
117,483
125,887
104,920
107,506
103,585
26,035
1,305
11,733
7,606
6,099
32,900
1,811
18,361
12,703
9,556
34,249
2,115
24,667
20,455
13,961
50,528
3,190
29,094
31,476
23,718
36,913
3,084
30,989'
22,716
22,684
35,280
3,446
26,620
27,520
17,518
39,326
3,081
35,876
20.788
22,071
37,347
3,055
33,065
23.522
20,495
39,565
3,376
28,951
32,100
21,895
40,967
2,970
22,812
22,807
15,364
33,508
4,340
24,469
28,340
16,849
26,908
2,585
30,174
25,792
18,127
2,919
3,336
3,646
3,113
2,801
2,816
2,939
2,007
3,862
2,930
2,455
2,243
25,580
24,278
7,846
4,947
3,243
10,018
36,222
35,773
11,640
4,016
3,242
12,717
49,368
42,218
16,746
4,355
3,272
16,660
78,533
55,648
22,184
4,964
3,453
17,914
63,089
49,818'
19,694
3,880
2,762
18,375
58,782
47,990
18,627
3,973
2,740
17,227
65,532
52,668
22,630
3,832
2,999
19,638
61,457
54,018
24,729
4,733
3,040
18,606
68,562
53,462
16,429
4,586
2,931
19,217
57,592
44,397
14,186
3,977
2,525
16,942
57,892
47,158
24,095
4,309
2,977
17,638
55,136
46,206
20,413
3,649
2,352
15,493
6,947
4,533
264
5,561
6,085
252
3,311
7,175
16
3,575
12,018
1
4,128
10,374
6
2,810
8,002
13
3,891
11,733
0
5,406
9,579
13
4,672
11,472
28
2,873
8,386
16
2,089
7,204
4
2,021
6,723
19
1,364
2,843
1,283
3,857
1.876
7,830
2,760
15,961
2,840
11,951
1,887
9,875
2.272
16,074
2.534
14,021
2.837
7.391
918
8,936
1,214
15,281
2,544
10,570
1. Transactions are market purchases and sales of securities as reported to the
Federal Reserve Bank of N e w York by the U.S. government securities dealers on
its published list of primary dealers.
Averages for transactions are based on the number of trading days in the period.
The figures exclude allotments of, and exchanges for, new U.S. Treasury
securities, redemptions of called or matured securities, purchases or sales of
securities under repurchase agreement, reverse repurchase (resale), or similar
contracts.
2. Data for immediate transactions do not include forward transactions.
3. Includes, among others, all other dealers and brokers in commodities and
Apr.
securities, nondealer departments of commercial banks, foreign banking agencies,
and the Federal Reserve System.
4. Futures contracts are standardized agreements arranged on an organized
exchange in which parties commit to purchase or sell securities for delivery at a
future date.
5. Forward transactions are agreements arranged in the over-the-counter
market in which securities are purchased (sold) for delivery after five business
days from the date of the transaction for Treasury securities (Treasury bills,
notes, and bonds) or after thirty days for mortgage-backed agency issues.
A32
1.43
DomesticNonfinancialStatistics • September 1987
U.S. GOVERNMENT SECURITIES DEALERS
Positions and Financing'
Averages of daily figures, in millions of dollars
1987
Item
1984
1985
1987
1986
May r
Apr.
June
May 27'
June 3
June 10
June 17
June 24
Positions
1
2
3
4
5
6
7
8
9
10
U
12
13
14
15
Net immediate 2
U.S. Treasury securities
Bills
Other within 1 year
1-5 years
5 - 1 0 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. Treasury securities
Federal agency securities
5,429
5,500
63
2,159
-1,119
-1,174
15,294
7,369
3,874
3,788
7,391
10,075
1,050
5,154
-6,202
-2,686
22,860
9,192
4,586
5,570
13,055
12,723
3,699
9,297
-9,504
-3,161
33,066
10,533
5,535
8,087
-6,965
-779
3,076
2,519
-5,944
-5,836
32,863
8,502
3,694
6,258
-13,475
-5,942
3,526
1,072
-7,641
-4,489
32,760
8,9%
3,712
6,588
-7,950
2,296
2,105
371
-7,524
-5,197
31,981
8,612
3,777
7,203
-11,022
-6,020
3,496
3,489
-8,555
-3,433
32,688
9,153
3,503
6,278
-9,363
-1,851
2,977
899
-6,797
-4,592
31,245
9,101
3,258
7,429
-7,653
2,021
2,432
199
-7,338
-4,967
32,370
9,125
3,658
7,299
-6,632
3,505
1,671
677
-7,832
-4,653
33,295
8,677
3,883
7,653
-9,689
3,397
1,991
-1,630
-8,112
-5,336
31,669
8,284
3,949
6,785
-4,525
1,794
233
-7,322
4,465
-722
-18,062
3,489
-153
-5,004
3,936
-95
1,779
2,609
-98
-579
3,182
-100
3,716
2,183
-98
1,251
2,555
-99
120
2,633
-107
-1,170
2,551
-99
-1,503
3,763
-99
-1,643
-9,205
-911
-9,420
-2,304
-11,909
-2,386
-15,767
-4,305
-20,339
-921
-19,236
-4,789
-20,311
-1,761
-18,414
-483
-19,849
-1,280
-20,461
-600
-19,411
Financing 3
Reverse repurchase agreements 4
Overnight and continuing
Term agreements
Repurchase agreements 5
18
Overnight and continuing
19
Term
16
17
44,078
68,357
68,035
80,509
98,954
108,693
129,443
133,833
122,078
151,163
n.a.
n.a.
124,737
150,494
133,473
146,424
12,896
148,810
127,070
150,742
121,960
155,400
75,717
57,047
101,410
70,076
141,735
102,640
176,340
108,841
165,707
124,599
n.a.
n.a.
173,210
124,105
176,256
121,793
170,800
123,862
173,969
122,389
167,972
126,369
1. Data for dealer positions and sources of financing are obtained from reports
submitted to the Federal Reserve Bank of N e w York by the U.S. government
securities dealers on its published list of primary dealers.
Data for positions are averages of daily figures, in terms of par value, based on
the number of trading days in the period. Positions are net amounts and are shown
on a commitment basis. Data for financing are in terms of actual amounts
borrowed or lent and are based on Wednesday figures.
2. Immediate positions are net amounts (in terms of par values) of securities
owned by nonbank dealer firms and dealer departments of commercial banks on a
commitment, that is, trade-date basis, including any such securities that have
been sold under agreements to repurchase (RPs). The maturities of some
repurchase agreements are sufficiently long, however, to suggest that the securities involved are not available for trading purposes. Immediate positions include
reverses to maturity, which are securities that were sold after having been
obtained under reverse repurchase agreements that mature on the same day as the
securities. Data for immediate positions do not include forward positions.
3. Figures cover financing involving U . S . Treasury and federal agency securities, negotiable CDs, bankers acceptances, and commercial paper.
4. Includes all reverse repurchase agreements, including those that have been
arranged to make delivery on short sales and those for which the securities
obtained have been used as collateral on borrowings, that is, matched agreements.
5. Includes both repurchase agreements undertaken to finance positions and
" m a t c h e d b o o k " repurchase agreements.
NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially
estimated.
Federal Finance
1.44
FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES
A33
Debt Outstanding
Millions of dollars, end of period
1987
1986
Agency
1 Federal and federally sponsored agencies
2 Federal agencies
3
Defense Department 1
4
Export-Import B a n k "
5
Federal Housing Administration 4
Government National Mortgage Association participation
6
certificates
7
Postal Service 6
8
Tennessee Valley Authority
9
United States Railway Association 6
10 Federally sponsored agencies 7
Federal Home Loan Banks
11
12
Federal Home Loan Mortgage Corporation
13
Federal National Mortgage Association
14
Farm Credit Banks
15
Student Loan Marketing Association
1983
1984
1985
Dec.
Jan.
Feb.
Mar.
Apr.
240,068
271,220
293,905
307,361
305,114
305,603
305,033'
33,940
243
14,853
194
35,145
142
15,882
133
36,390
71
15,678
115
36,958
33
14,211
138
37,041
32
14,211
136
37,073
27
14,211
147
36,660
24
13,813
158
36,531
23
13,813
165
2,165
1,404
14,970
111
2,165
1,337
15,435
51
2,165
1,940
16,347
74
2,165
3,104
17,222
85
2,165
3,104
17,308
85
2,165
3,104
17,334
85
2,165
3,104
17,311
85
1,965
3,104
17.376
85
206,128
48,930
6,793
74,594
72,816
3,402
236,075
65,085
10,270
83,720
71,193
5,745
257,515
74,447
11,926
93,896
68,851
8,395
270,403
88,752
13,589
93,563
62,328
12,171
268,073
90,225
13,492
92,588
59,984
11,784
268,530
91,313
13,847
91,522
59,367
12,481
268,373'"
92,087
13,074'
91,618
58,364
13,230
n.a.
94,606
n.a.
89,741
57,251
13,930
135,791
145,217
153,373
157,510
157,650
157,724
157,012
157,177
14,789
1,154
5,000
13,245
111
15,852
1,087
5,000
13,710
51
15,670
1,690
5,000
14,622
74
14,205
2,854
4,970
15,797
85
14,205
2,854
4,970
15,928
85
14,205
2,854
4,970
15,954
85
13,807
2,854
4,970
15,931
85
13,807
2,854
4,970
15,996
85
55,266
19,766
26,460
58,971
20,693
29,853
64,234
20,654
31,429
65,374
21,680
32,545
65,374
21,719
32,515
65,374
21,749
32,533
65,224
21,473
32,668
65,254
21,487
32,724
May
n.a.
n. a.
95,931
n.a.
90,514
57,051
14,230
MEMO
16 Federal Financing Bank debt
17
18
19
20
21
Lending to federal and federally
sponsored
agencies
Export-Import B a n k '
Postal Service 6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association 6
Other Lending10
22 Farmers Home Administration
23 Rural Electrification Administration
24 Other
1. Consists of mortgages assumed by the Defense Department between 1957
and 1963 under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1,1976.
3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter.
4. Consists of debentures issued in payment of Federal Housing Administration
insurance claims. Once issued, these securities may be sold privately on the
securities market.
5. Certificates of participation issued before fiscal 1969 by the Government
National Mortgage Association acting as trustee for the Farmers Home Administration; Department of Health, Education, and Welfare; Department of Housing
and Urban Development; Small Business Administration; and the Veterans
Administration.
6. Off-budget.
n a.
7. Includes outstanding noncontingent liabilities; notes, bonds, and debentures. Some data are estimated.
8. Before late 1981, the Association obtained financing through the Federal
Financing Bank (FFB).
9. The FFB, which began operations in 1974, is authorized to purchase or sell
obligations issued, sold, or guaranteed by other federal agencies. Since F F B
incurs debt solely for the purpose of lending to other agencies, its debt is not
included in the main portion of the table in order to avoid double counting.
10. Includes F F B 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 H o m e 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 1987
NEW SECURITY ISSUES Tax-Exempt State and Local Governments
Millions of dollars
1987
1986
Type of issue or issuer,
or use
1984
1 All issues, new and refunding 1
1985
1986
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May'
June
106,641
214,189
134,606
11,010
15,662
7,343
8,969
14,591
6,849'
6,037
9,674
Type of issue
2 General obligation
3 Revenue
26,485
80,156
52,622
161,567
44,801
89,806
1,607
9,403
4,426
11,236
1,100
6,243
3,643
5,325
3,853
10,738
3,449
3,405
2,872
3,165
3,178
6,496
Type of issuer
4 State
5 Special district and statutory authority 2
6 Municipalities, counties, townships
9,129
63,550
33,962
13,004
134,363
66,822
14,935
79,291
40,374
6
8,124
2,759
961
10,431
4,265
153
5,275
1,915
1,364
5,825
1,781
1,217 '
10,004
3,370
427
4,790
1,637
1,001
3,019
2,017
1,132
5,559
2,983
7 Issues for new capital, total
94,050
156,050
79,195
4,220
10,050
1,930
2,774
4,480
3,237
3,848
7,498
Use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
7,553
7,552
17,844
29,928
15,415
15,758
16,658
12,070
26,852
63,181
12,892
24,398
16,948
11,666
35,383
17,332
5,594
47,433
566
843
671
2,931
483
483
925
356
1,165
3,944
2,845
1,829
452,
92
681
380
38
286
448
145
482
527
89
1,084
659
111
444
991
368
1,907
774
98
571
468
33
1,295
789
194
561
454
161
1,689
1,039
708
1,476
1,113
325
2,840
8
9
10
11
12
13
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts beginning April 1986.
SOURCES. Securities Data Company beginning April 1986. Public Securities
Association for earlier data. This new data source began with the N o v e m b e r
BULLETIN.
1.46
NEW SECURITY ISSUES Corporations
Millions of dollars
Type of issue or issuer,
or use
1986
1984
1985
1987
1986
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.'
May
132,531
201,269
375,056
28,577
28,822
25,168
23,165
24,041 r
33,145'
21,851
17,925
109,903
165,754
313,226
23,471
22,223
18,920
20,250
20,274'
23,335'
17,634
11,336
73,579
36,324
119,559
46,195
232,465
80,761
23,471
n.a.
22,223
n.a.
18.920
n.a.
20,250
n.a.
20,274'
n.a.
23,335'
n.a.
17,634
n.a.
11,336
n.a.
24,607
13,726
4,694
10,679
2,997
53,199
52,128
15,140
5,743
12,957
10,456
69,332
78,584
37,277
9,734
31,058
15,489
141,086
2,055
1,067
170
2,537
1,255
16,387
3,378
1,213
0
2,587
1,158
13,888
3,786
2,067
70
2,498
776
9,723
4,165
1,074
0
1,491
65
13,455
3,679
1,714
100
2,715
250
11,817'
6,349
3,756'
521
694
31(K
11,706'
2,184
1,365
168
1,370
100
12,448
3,789
467
21
572
138
6,349
11 Stocks
22,628
35,515
61,830
5,106
6,599
6,248
2,915
3,767
9,810
4,217
6,589
Type
12 Preferred
13 Common
4,118
18,510
6,505
29,010
11,514
50,316
817
4,289
1,390
5,209
1,293
4,955
429
2,486
905
2,862
2,257
7,553
526
3,691
1,289
5,300
4,054
6,277
589
1,624
419
9,665
5,700
9,149
1,544
1,966
978
16,178
14,234
9,252
2,392
3,791
1,504
30,657
570
1,271
511
410
59
2,285
2,565
535
15
218
104
3,162
1,781
709
183
873
101
2,601
365
148
0
237
16
2,149
814
437
191
509
9
1,807
2,016
2,366
299
907
57
4,165
653
2,203
230
297
18
816
1,185
1,424
3
374
200
3,403
1 All issues'
2 Bonds
2
Type of offering
3 Public
4 Private placement 3
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. Data are not available on a monthly basis.
SOURCES. IDD Information Services, Inc., U.S. Securities and Exchange
Commission and the Board of Governors of the Federal Reserve System.
Securities
1.47
O P E N - E N D INVESTMENT COMPANIES
Millions of dollars
Market and Corporate
Finance
Net Sales and Asset Position
1986
Item
1985
A35
1987
1986'
Sept.
Nov.
Oct.
Dec.
Jan.
Feb.
Mar.
Apr.''
INVESTMENT COMPANIES'
1
Sales of own shares 2
222,670
411,483
37,150
33,672
44,796
50,116
36,307
40,378
42,857
28,295
2
3
Redemptions of own shares 3
Net sales
132,440
90,230
239,394
172,089
20,782
16.368
20,724
12.948
34,835
9.961
26,565
23,551
21,576
14,731
24,730
15,648
37,448
5,409
23,453
4,842
4
Assets 4
251,695
424,156
402,644
416,939
424,156
464,415
490,643
506,752
502,487
500,669
5
6
Cash position 5
Other
20,607
231,088
30.716
393,440
30,826
371,818
29,579
387,360
30,716
393.440
34,098
430,317
35,279
455,364
37,090
469,662
43,009
459,478
38,375
462,294
5. Also includes all U.S. Treasury securities and other s h o r t - t e r m
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
debt
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 A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1985'
1984 R
Account
1985'
Q2
2
3
4
5
6
Corporate profits with inventory valuation and
capital consumption adjustment
Profits before tax
Profits tax liability
Profits after tax
Dividends
Undistributed profits
7
8
Inventory valuation
Capital consumption adjustment
1
SOURCE. Survey of Current Business
1987'
1986'
1986'
Q3
Q4
Q1
Q2
Q3
Q4
Q1
266.9
239.9
93.9
146.1
79.0
67.0
277.6
224.8
96.7
128.1
81.3
46.8
284.4
231.9
105.0
126.8
86.8
40.0
274.2
218.0
93.2
124.8
81.3
43.5
292.8
230.2
100.5
129.7
81.2
48.5
277.8
233.5
99.1
134.4
81.7
52.7
288.0
218.9
98.1
120.9
84.3
36.6
282.3
224.4
102.1
122.3
86.6
35.7
286.4
236.3
106.1
130.2
87.7
42.5
281.1
247.9
113.9
134.0
88.6
45.4
294.0
257.0
128.0
129.0
90.3
38.7
-5.8
32.8
-.8
53.5
6.5
46.0
1.8
54.4
6.5
56.0
-9.8
54.2
17.8
51.3
11.3
46.7
6.0
44.0
-8.9
42.1
-11.3
48.2
(Department of Commerce).
A36
1.49
DomesticNonfinancialStatistics • September 1987
NONFINANCIAL CORPORATIONS
Assets and Liabilities1
Billions of dollars, except for ratio
1985
Account
1980
1 C u r r e n t assets
1981
1982
1983
1986
1984
Ql
Q2
Q3
Q4
Ql
1,328.3
1,419.6
1,437.1
1,575.9
1,703.0
1,722.7
1,734.6
1,763.0
1,784.6
1,795.7
127.0
18.7
507.5
543.0
132.1
135.6
17.7
532.5
584.0
149.7
147.8
23.0
517.4
579.0
169.8
171.8
31.0
583.0
603.4
186.7
173.6
36.2
633.1
656.9
203.2
167.5
35.7
650.3
665.7
203.5
167.1
35.4
654.1
666.7
211.2
176.3
32.6
661.0
675.0
218.0
189.2
33.0
671.5
666.0
224.9
195.3
31.0
663.4
679.6
226.3
7 C u r r e n t liabilities
890.6
971.3
986.0
1,059.6
1,163.6
1,174.1
1,182.9
1,211.9
1,233.6
1,222.3
8 N o t e s and a c c o u n t s p a y a b l e
9 Other
514.4
376.2
547.1
424.1
550.7
435.3
595.7
463.9
647.8
515.8
636.9
537.1
651.7
531.2
670.4
541.5
682.7
550.9
668.4
553.9
10 Net working capital
437.8
448.3
451.1
516.3
539.5
548.6
551.7
551.1
551.0
573.4
11 MEMO: C u r r e n t ratio-
1.492
1.462
1.458
1.487
1.464
1.467
1.466
1.455
1.447
1.469
2
3
4
5
6
Cash
U . S . g o v e r n m e n t securities
N o t e s and a c c o u n t s receivable
Inventories
Other
1. F o r a description of this series, see " W o r k i n g Capital of Nonfinancial
C o r p o r a t i o n s " in the July 1978 BULLETIN, pp. 533-37. D a t a are not currently
available a f t e r 1986:1.
1.50
2. Ratio of total current a s s e t s to total c u r r e n t liabilities.
SOURCE. Federal T r a d e C o m m i s s i o n and B u r e a u of the C e n s u s ,
TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment A
Billions of dollars; quarterly data are at seasonally adjusted annual rates.
1985
Industry
1 Total n o n f a r m business
Manufacturing
2 Durable g o o d s industries
3 N o n d u r a b l e g o o d s industries
Nonmanufacturing
4 Mining
Transportation
5
Railroad
6
Air
7
Other
Public utilities
8
Electric
9
G a s and o t h e r
10 C o m m e r c i a l and o t h e r 2
1985
1986
1987
Q4
Ql
Q2
Q3
Q4
Ql
Q2 1
Q3'
387.13
379.27
390.89
397.88
377.94
375.92
374.55
388.69
372.24
392.02
397.06
73.27
80.21
69.08
73.65
70.86
75.05
75.47
82.79
68.01
76.02
68.33
73.35
69.31
69.89
70.68
75.33
69.72
69.65
73.06
73.83
71.84
76.61
15.88
11.25
10.45
15.25
12.99
11.22
10.15
10.63
10.17
10.85
10.60
7.08
4.79
6.15
6.63
6.26
5.86
6.06
6.76
6.58
6.74
6.07
6.34
6.22
6.58
5.42
6.77
5.77
5.74
7.31
5.69
6.03
6.25
6.99
6.24
5.29
7.55
5.93
6.32
6.76
6.39
6.84
6.36
6.82
36.11
12.71
150.93
33.93
12.51
160.10
32.93
12.71
169.50
36.38
13.41
155.42
34.21
12.82
155.67
33.81
12.74
158.18
33.91
11.99
160.25
33.78
12.49
166.31
30.81
12.63
160.49
33.51
12.43
168.86
33.97
12.82
171.19
A T r a d e and services are no longer being reported separately. T h e y are included
in C o m m e r c i a l and o t h e r , line 10.
1. Anticipated by business.
1986
1987'
2. " O t h e r " consists of c o n s t r u c t i o n ; wholesale and retail t r a d e ; finance and
insurance; personal and b u s i n e s s services; and c o m m u n i c a t i o n .
SOURCE. Survey of Current Business ( D e p a r t m e n t of C o m m e r c e ) .
Securities
1.51
DOMESTIC FINANCE COMPANIES
Markets
and Corporate
Finance
A37
Assets and Liabilities
Billions of dollars, end of period
1986
Q3
Q4
Ql
Q2
Q3
Q4
ASSETS
Accounts receivable, gross
Consumer
Business
Real e s t a t e
Total
75.3
100.4
18.7
194.3
83.3
113.4
20.5
217.3
89.9
137.8
23.8
251.5
108.6
143.7
26.3
278.6
113.4
158.3
28.9
300.6
117.2
165.9
29.9
312.9
125.1
167.7
30.8
323.6
137.1
161.0
32.1
330.2
136.5
174.8
33.7
345.0
Less:
5 Reserves for unearned income
6 Reserves for losses
29.9
3.3
30.3
3.7
33.8
4.2
38.0
4.6
39.2
4.9
40.0
5.0
40.7
5.1
42.4
5.4
41.4
5.8
161.1
30.4
183.2
34.4
213.5
35.7
236.0
46.3
256.5
45.3
268.0
48.8
277.8
48.8
282.4
59.9
297.8
57.9
1
2
3
4
7 A c c o u n t s r e c e i v a b l e , net
8 All o t h e r
282.3
9 Total assets
LIABILITIES
10 B a n k loans
11 C o m m e r c i a l p a p e r
Debt
12
Other short-term
13
Long-term
14
All o t h e r liabilities
15 Capital, s u r p l u s , a n d u n d i v i d e d profits
16 Total liabilities and capital
16.5
51.4
18.3
60.5
20.0
73.1
18.9
93.2
20.6
99.2
19.0
104.3
19.2
108.4
20.2
22.2
112.8
117.8
11.9
63.7
21.6
26.4
11.1
67.7
31.2
28.9
12.9
77.2
34.5
31.5
12.4
85.5
38.2
34.1
12.5
93.1
40.9
35.7
13.4
101.0
42.3
36.7
15.4
105.2
40.1
38.4
16.0
109.8
44.1
39.4
17.2
115.6
43.4
39.4
191.5
217.6
249.2
282.3
301.9
316.8
326.6
342.3
355.6
NOTE. C o m p o n e n t s m a y not add to totals b e c a u s e of rounding.
1.52
DOMESTIC FINANCE COMPANIES
Business Credit
Millions of dollars, seasonally adjusted except as noted
Type
1 Total
7
3
4
5
6
7
8
9
10
Retail f i n a n c i n g of installment sales
A u t o m o t i v e ( c o m m e r c i a l vehicles)
B u s i n e s s , industrial, a n d f a r m e q u i p m e n t
Wholesale financing
Automotive
Equipment
All o t h e r
Leasing
Automotive
Equipment
L o a n s on c o m m e r c i a l a c c o u n t s receivable and f a c t o r e d
c o m m e r c i a l a c c o u n t s receivable
All o t h e r b u s i n e s s credit
Accounts
receivable
outstanding
May 31,
1987 1
Extensions
Repayments
1987
1987
1987
Mar.
Apr.
May
Mar.
Apr.
May
Mar.
Apr.
May
187,450
1,579
3,534
2,904
29,836
29,212
28,101
28,257
25,678
25,197
28,627
22,698
570
-40
750
4
739
310
1,138
1,255
1,200
1,352
1,507
1,460
568
1,295
449
1,349
768
1,150
30,739
5,464
8,683
995
-235
269
620
76
-25
1,133
-16
75
12,676
672
3,064
11,474
690
3,056
10,709
513
2,964
11,681
907
2,795
10,854
614
3,082
9,577
530
2,889
20,495
39,525
77
440
515
582
-78
182
1,148
995
1,136
970
1,455
838
1,071
555
622
388
1,533
655
16,791
14,428
-652
155
723
290
96
464
7,664
1,224
8,122
1,211
7,262
1,394
8,316
1,069
7,399
921
7,166
929
T h e s e d a t a also a p p e a r in the B o a r d ' s G . 2 0 (422) release. For a d d r e s s , see
inside f r o n t c o v e r .
C h a n g e s in a c c o u n t s
receivable
1. Not seasonally a d j u s t e d ,
A38
1.53
DomesticNonfinancialStatistics • September 1987
MORTGAGE MARKETS
Millions of dollars; exceptions noted.
1987
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
T e r m s and yields in primary and s e c o n d a r y m a r k e t s
PRIMARY MARKETS
1
2
3
4
5
6
Conventional mortgages on new homes
Terms1
P u r c h a s e price ( t h o u s a n d s of dollars)
A m o u n t of loan ( t h o u s a n d s of dollars)
Loan-price ratio (percent)
Maturity (years)
F e e s and charges (percent of loan a m o u n t ) 2
C o n t r a c t rate (percent per a n n u m )
Yield (percent per
1 F H L B B series 5
8 H U D series 4
96.8
73.7
78.7
27.8
2.64
11.87
104.1
77.4
77.1
26.9
2.53
11.12
118.1
86.2
75.2
26.6
2.48
9.82
124.8
93.2
76.4
27.4
2.46
9.28
132.6 R
97.3
75.5
27.7
2.23
9.14
135.6
99.1
75.3
27.6
2.21
8.87
130.2
95.0
74.3
27.1
2.20
8.77
136.9
100.9
75.2
27.1
2.23
8.84
132.9'
99.0'
76.1'
28.0'
2.26'
8.99'
129.5
95.5
75.8
27.9
2.38
9.10
12.37
13.80
11.58
12.28
10.25
10.07
9.69
9.33
9.51
9.09
9.23
9.04
9.14
9.19
9.21
10.11
9.37'
10.44
9.50
10.29
13.81
13.13
12.24
11.61
9.91
9.30
9.21
8.62
8.79
8.46
8.81
8.28
8.94
8.18
10.02
8.85
10.61
9.40
10.33
9.50
year)
SECONDARY MARKETS
Yield (percent per year)
9 F H A mortgages ( H U D series) 5
10 G N M A securities 6
Activity in s e c o n d a r y m a r k e t s
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of
11 Total
12
FHA/VA-insured
13
Conventional
Mortgage transactions
14 P u r c h a s e s
period)
(during
83,339
35,148
48,191
94,574
34,244
60,331
98,048
29,683
68,365
97,895
23,121
74,774
96,382
22,178
74,204
95,514
22,063
73,451
95,140
21,843
73,297
94,404
21,765
72,639
94,064
21,999
72,065
94,064
21,892
72,173
16,721
21,510
30,826
2,336
1,346
979
1,435
2,118
1,718
1,690
21,007
6,384
20,155
3,402
32,987
3,386
1,272
3,386
948
2,258
912
2,175
2,805
3,539
3,208
4,421
1,726
4,410
1,745
4,448
9,283
910
8,373
12,399
841
11,559'
13,517
746
12,771'
11,564
694
10,870
12,986'
686
12,30c
12,911'
722'
12,189'
12,940
717
12,223
12,492
708
11,784
21,886
18,506
44,012
38,905
103,474
100,236
11,305
11,169
7,950
8,269
7,961
7,840
9,394
9,143
9,777
9,357
32,603
48,989
110,855
8,742
7,685
9,197
9,669
8,408
period)
Mortgage
commitments7
15 C o n t r a c t e d (during period)
16 O u t s t a n d i n g (end of period)
FEDERAL HOME LOAN MORTGAGE CORPORATION
Mortgage holdings
17 Total
18
FHA/VA
19
Conventional
(end of
Mortgage transactions
20 P u r c h a s e s
21 Sales
period)g
(during
Mortgage
commitments9
22 C o n t r a c t e d (during period)
period)
1
1. Weighted a v e r a g e s based on s a m p l e s u r v e y s of mortgages originated by
m a j o r institutional l e n d e r g r o u p s ; compiled by the Federal H o m e L o a n Bank
B o a r d in c o o p e r a t i o n with the F e d e r a l D e p o s i t I n s u r a n c e C o r p o r a t i o n .
2. Includes all f e e s , c o m m i s s i o n s , d i s c o u n t s , and " p o i n t s " paid (by the
b o r r o w e r or the seller) to obtain a loan.
3. A v e r a g e effective interest r a t e s o n loans closed, a s s u m i n g p r e p a y m e n t at the
e n d of 10 y e a r s .
4. A v e r a g e c o n t r a c t rates on n e w c o m m i t m e n t s f o r conventional first mortgages, f r o m D e p a r t m e n t of H o u s i n g and U r b a n D e v e l o p m e n t .
5. A v e r a g e gross yields on 30-year, m i n i m u m - d o w n p a y m e n t , F e d e r a l H o u s i n g
Administration-insured first m o r t g a g e s f o r immediate delivery in the private
s e c o n d a r y m a r k e t . B a s e d on t r a n s a c t i o n s on first day of s u b s e q u e n t m o n t h . L a r g e
m o n t h l y m o v e m e n t s in a v e r a g e yields may reflect m a r k e t a d j u s t m e n t s t o c h a n g e s
in m a x i m u m permissable c o n t r a c t r a t e s .
k
T
n a.
n.a.
1
T
6. A v e r a g e net yields to investors on G o v e r n m e n t National Mortgage A s s o c i a tion g u a r a n t e e d , m o r t g a g e - b a c k e d , fully modified pass-through securities, a s s u m ing p r e p a y m e n t in 12 y e a r s on pools of 30-year F H A / V A m o r t g a g e s c a r r y i n g the
prevailing ceiling rate. Monthly figures are a v e r a g e s of Friday figures f r o m the
Wall Street
Journal.
7. Includes s o m e multifamily and nonprofit hospital loan c o m m i t m e n t s in
addition t o 1- t o 4-family loan c o m m i t m e n t s a c c e p t e d in F N M A ' s f r e e m a r k e t
auction s y s t e m , and through the F N M A - G N M A t a n d e m plans.
8. Includes participation as well as w h o l e loans.
9. Includes conventional and g o v e r n m e n t - u n d e r w r i t t e n loans. F H L M C ' s mortgage c o m m i t m e n t s and mortgage t r a n s a c t i o n s include activity u n d e r mortgage/
securities s w a p p r o g r a m s , while the c o r r e s p o n d i n g d a t a f o r F N M A e x c l u d e s w a p
activity.
Real Estate
1.54
A39
MORTGAGE DEBT OUTSTANDING 1
Millions of dollars, end of period
1987
1986
Type of holder, and type of property
1984
1985
1986
Q1
Q2
Q3
Q4
Q1
1 Ail holders
2,033,654
2,266,923
2,566,386
2,315,962
2,383,989
2,469,796
2,566,386
2,625,342
7 1- to 4-family
1,317,940
185,414
418,300
112.000
1,466.773
213,816
480,719
105,615
1,667,055
246,925
554,733
97,673
1,494,603
221,587
495,879
103,893
1,543,681
229,145
509,574
101,589
1,607,113
237,410
525,122
100,151
1,667,055
246,925
554,733
97,673
1,711,106
250,254
567,980
96,002
1,269,702
379,498
196,163
20,264
152,894
10,177
154,441
107,302
19,817
27,291
31
1,390,394
429,196
213,434
23,373
181,032
11,357
177,263
121,879
23,329
31,973
82
1,508,599
502,534
235,814
31,173
222,799
12,748
226,409
156,236
30,476
39.592
105
1,408,665
441,096
216,290
25,389
187,620
1! ,797
188,154
131,381
23,980
32,707
86
1,435,437
456,163
221,640
26,799
195,484
12,240
203,398
142,174
26,543
34,577
104
1,464,213
474,658
228,593
28,623
204,996
12,446
215,036
149,786
28,400
36,762
88
1,508,599
502.534
235,814
31,173
222,799
12,748
226,409
156,236
30,476
39,592
105
1,525,130
518,998
241,871
31,869
232,000
13,258
227,087
156,683
30,574
39,725
105
555,277
421,489
55,750
77,605
433
156,699
14,120
18,938
111,175
12,466
23,787
583,236
432,422
66,410
83,798
606
171,797
12,381
19,894
127,670
11,852
28,902
553,080
403,611
66,898
82,070
501
192,975
12,763
20,847
148,367
10,998
33,601
574,732
420,073
67,140
86,860
659
174,823
12,605
20,009
130,569
11,640
29,860
565,037
413,865
66,020
84,618
534
180,041
12,608
20,181
135,924
11,328
30,798
557,139
408,152
65,827
82,644
516
185,269
12,927
20,709
140,213
11,420
32,111
553,080
403,611
66,898
82,070
501
192,975
12,763
20,847
148,367
10,998
33,601
547,383
399,042
66,781
81,122
438
196,575
12,763
20,997
151,867
10,948
35,087
158,993
2,301
585
1,716
1,276
213
119
497
447
166,928
1,473
539
934
733
183
113
159
278
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
165,041
1,533
527
1,006
704
217
33
217
237
161,398
876
49
827
570
146
66
111
247
159,505
887
48
839
457
132
57
115
153
203,800
889
47
842
48,421
21,625
7,608
8,446
10,742
198,728
846
46
800
48,203
21,390
7,710
8,463
10,640
4,816
2,048
2,768
87,940
82,175
5,765
52,261
3,074
49,187
10,399
9,654
745
4,920
2,254
2,666
98,282
91,966
6,316
47,498
2,798
44,700
14,022
11.881
2,141
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
4,964
2,309
2,655
98,795
92,315
6,480
45,422
2,673
42,749
13,623
12,231
1,392
5,094
2,449
2,645
97,295
90,460
6,835
43,369
2,552
40,817
14,194
11,890
2,304
4,966
2,331
2,635
97,717
90,508
7,209
42,119
2,478
39,641
13,359
11,127
2,232
5,047
2,386
2,661
97,895
90,718
7,177
39,984
2,353
37,631
11,564
10,010
1,554
5,091
2,440
2,651
95,140
88,126
7,014
38,684
2,276
36,408
10,764
9,610
1,154
49 Mortgage pools or trusts 5
Government National Mortgage Association
50
1- to 4-family
51
Multifamily
57
53
Federal Home L o a n Mortgage Corporation
1- to 4-family
54
55
Multifamily
Federal National Mortgage Association
56
1- to 4-family
57
58
Multifamily
59
Farmers Home Administration 4
60
1- to 4-family
61
Multifamily
6?
Commercial
Farm
63
332,057
179,981
175,589
4,392
70,822
70,253
569
36,215
35,965
250
45,039
21,813
5,841
7,559
9,826
415.042
212,145
207,198
4,947
100,387
99,515
872
54,987
54,036
951
47,523
22,186
6,675
8,190
10,472
529,763
260,869
255,132
5,737
171,372
166,667
4,705
97,174
95,791
1,383
348
142
n.a.
132
74
440,701
220,348
215,148
5,200
110,337
108,020
2,317
62,310
61,117
1,193
47,706
22,082
6,943
8,150
10,531
475,615
229,204
223,838
5,366
125,903
123,676
2,227
72,377
71,153
1,224
48,131
21,987
7,170
8,347
10,627
522,721
241,230
235,664
5,566
146,871
143,734
3,137
86,359
85,171
1,188
48,261
21,782
7,353
8,409
10,717
529,763
260,869
255,132
5,737
171,372
166,667
4,705
97,174
95,791
1,383
348
142
n.a.
132
74
573,372
277,386
271,065
6,321
187,962
182,857
5,105
107,673
106,068
1,605
351
154
n.a.
127
70
64 Individuals and others 6
65
1- to 4-family
66
Multifamily
Commercial
67
68
Farm
272,902
153,710
48,480
41,279
29,433
294,559
165,199
55,195
47,897
26,268
324,224
180,159
65,864
53,327
24,874
301,555
167,755
57,850
49,756
26,194
311,539
174,396
60,938
50,513
25,692
323,357
182,569
63,635
51,983
25,170
324,224
180,159
65,864
53,327
24,874
328,112
181,628
67,673
54,676
24,135
3 Multifamily
4 Commercial
5
6 Selected financial institutions
7 Commercial banks 2
8
1- to 4-family
9
Multifamily
10
Commercial
U
Farm
Savings banks
1?
13
1- to 4-family
14
Multifamily
Commercial
15
Farm
16
17
18
19
70
71
7?
73
74
75
26
27
Savings and loan associations
1- to 4-family
Multifamily
Commercial
Farm
Life insurance companies
1- to 4-family
Multifamily
Commercial
Farm
Finance companies- 1
7.8 Federal and related agencies
29
Government National Mortgage Association
30
1- to 4-family
31
Multifamily
37
Farmers Home Administration 4
33
1- to 4-family
Multifamily
34
35
Commercial
Farm
36
37
38
39
40
41
47
43
44
45
46
47
48
Federal Housing and Veterans
Administration
1- to 4-family
Multifamily
Federal National Mortgage Association
1- to 4-family
Multifamily
Federal Land Banks
1- to 4-family
Farm
Federal H o m e Loan Mortgage Corporation
1- to 4-family
Multifamily
1. Based on data from various institutional and governmental sources, with
some quarters estimated in part by the Federal Reserve. Multifamily debt refers to
loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not bank trust
departments.
3. Assumed to be entirely 1- to 4-family loans.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were
reallocated from F m H A mortgage pools to F m H A mortgage holdings in 1986: 4,
because of accounting changes by the Farmers Home Administration.
5. Outstanding principal balances of mortgage pools backing securities insured
or guaranteed by the agency indicated.
6. Other holders include mortgage companies, real estate investment trusts,
state and local credit agencies, state and local retirement funds, noninsured
pension funds, credit unions, and other U.S. agencies.
A40
1.55
DomesticNonfinancialStatistics • September 1987
C O N S U M E R I N S T A L L M E N T C R E D I T " T o t a l O u t s t a n d i n g , and N e t C h a n g e , s e a s o n a l l y a d j u s t e d
Millions of dollars
1986
1985
1987
1986
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr/
May
Amounts outstanding (end of period)
1 Total
522,805
577,784
571,280
576,874
577,656
577,784
578,578
579,591
579,913
583,595
583,037
By major holder
Commercial banks
Finance companies 2
Credit unions
Retailers 3
Savings institutions
Gasoline companies
242,084
113,070
72,119
38,864
52,433
4,235
261,604
136,494
77,857
40,586
58,037
3,205
258,990
135,516
76,299
40,455
56,687
3,333
260,940
138,038
76,995
40,565
57,046
3,289
262,949
136,314
77,508
40,496
57,168
3,221
261,604
136,494
77,857
40,586
58,037
3,205
261,694
135,802
78,284
40,617
58,906
3,276
262,105
136,009
78,492
40,644
59,031
3,311
261,933
136,050
78,569
40,469
59,488
3,405
263,433
137,091
79,255
40,467
59,826
3,522
263,146
136,398
79,555
40,318
60,045
3,576
By major type of credit
8 Automobile
y
Commercial banks
10
Credit unions
ii
Finance companies
12
Savings institutions
208,057
93,003
35,635
70,091
9,328
245,055
100,709
39,029
93,274
12,043
239,014
98,057
38,248
91,241
11,468
243,400
99,385
38,597
93,786
11,632
243,005
100,221
38,854
92,188
11,742
245,055
100,709
39,029
93,274
12,043
245,472
101,389
39,243
92,617
12,223
246,064
101,688
39,347
92,780
12,249
246,290
101,528
39,386
93,032
12,344
247,663
101,781
39,730
93,738
12,414
247,507
102,079
39,880
93,089
12,459
13 Revolving
14
Commercial banks
15
Retailers
16
Gasoline companies
17
Savings institutions
18
Credit unions
122,021
75,866
34,695
4,235
5,705
1,520
134,938
85,652
36,240
3,205
7,713
2,128
133,123
84,430
36,086
3,333
7,308
1,966
133,816
84,868
36,190
3,289
7,445
2,024
134,391
85,426
36,137
3,221
7,529
2,078
134,938
85,652
36,240
3,205
7,713
2,128
134,916
85,395
36,277
3,276
7,829
2,139
135,663
86,053
36,308
3,311
7,845
2,145
135,166
85,567
36,141
3,405
7,906
2,147
136,706
86,929
36,139
3,522
7,951
2,166
136,814
87,075
36,009
3,576
7,980
2,174
19 Mobile home
20
Commercial banks
21
Finance companies
22
Savings institutions
25,488
9,538
9,391
6,559
25,710
8,812
9,028
7,870
25,732
9,016
9,216
7,500
25,784
9,025
9,149
7,610
25,731
8,951
9,091
7,689
25,710
8,812
9,028
7,870
25,852
8,787
9,077
7,988
25,789
8,739
9,045
8,005
25,614
8,725
8,823
8,067
25,626
8,698
8,816
8,112
25,483
8,556
8,785
8,142
23 Other
24
Commercial banks
25
Finance companies
26
Credit unions
27
Retailers
28
Savings institutions
167,239
63,677
33,588
34,964
4,169
30,841
172,081
66,431
34,192
36,700
4,346
30,412
173,411
67,487
35,059
36,085
4,369
30,411
173,874
67,662
35,104
36,374
4,375
30,359
174,529
68,351
35,035
36,576
4,359
30,208
172,081
66,431
34,192
36,700
4,346
30,412
172,338
66,122
34,108
36,901
4,340
30,867
172,076
65,625
34,183
36,999
4,336
30,932
172,844
66,113
34,196
37,036
4,327
31,172
173,600
66,026
34,537
37,359
4,328
31,349
173,232
65,435
34,524
37,500
4,310
31,463
2
3
4
6
7
Net change (during period)
29 Total
76,622
54,979
7,620
5,594
782
128
794
1,013
322
3,682
-558
By major holder
Commercial banks
Finance companies 2
Credit unions
Retailers 3
Savings institutions
Gasoline companies
32,926
23,566
6,493
1,660
12,103
-126
19,520
23,424
5,738
1,722
5,604
-1,030
1,508
6,251
662
76
-837
-39
1,950
2,522
696
110
359
-44
2,009
-1,724
513
-69
122
-68
-1,345
180
349
90
869
-16
90
-692
427
31
869
71
411
207
208
27
125
35
-172
41
77
-175
457
94
1,500
1,041
686
-2
338
117
-287
-693
300
-149
219
54
By major type of credit
36 Automobile
3/
Commercial banks
38
Credit unions
39
Finance companies
40
Savings institutions
35,705
9,103
5,330
17,840
3,432
36,998
7,706
3,394
23,183
2,715
7,814
1,186
332
6,373
-77
4,386
1,328
349
2,545
164
-395
836
257
-1,598
110
2,050
488
175
1,086
301
417
680
214
-657
180
592
299
104
163
26
226
-160
39
252
95
1,373
253
344
706
70
-156
298
150
-649
45
41 Revolving
42
Commercial banks
43
Retailers
44
Gasoline companies
45
Savings institutions
46
Credit unions
22,401
17,721
1,488
-126
2,771
547
12,917
9,786
1,545
-1,030
2,008
608
-57
-115
58
-39
-17
56
693
438
104
-44
137
58
575
558
-53
-68
84
54
547
226
103
-16
184
50
-22
-257
37
71
116
11
747
658
31
35
16
6
-497
-486
-167
94
61
2
1,540
1,362
-2
117
45
19
108
146
-130
54
29
8
47 Mobile home
48
Commercial banks
49
Finance companies
50
Savings institutions
778
-85
-405
1,268
222
-726
-363
1,311
-207
-39
-121
-47
52
9
-67
110
-53
-74
-58
79
-21
-139
-63
181
142
-25
49
118
-63
-48
-32
17
-175
-14
-222
62
12
-27
-7
45
-143
-142
-31
30
51 Other
52
Commercial banks
53
Finance companies
54
Credit unions
55
Retailers
56
Savings institutions
17,738
6,187
6,131
616
172
4,632
4,842
2,754
604
1,736
177
-429
70
476
-2
274
18
-696
463
175
45
289
6
-52
655
689
-69
202
-16
-151
-2,448
-1,920
-843
124
-13
204
257
-309
-84
201
-6
455
-262
-497
75
98
-4
65
768
488
13
37
-9
240
756
-87
341
323
1
177
-368
-591
-13
141
-18
114
30
31
32
33
34
35
1. The Board's series cover most short- and intermediate-term credit extended
to individuals that is scheduled to be repaid (or has the option of repayment) in
two or more installments.
2. More detail for finance companies is available in the G.20 statistical release,
3. Excludes 30-day charge credit held by travel and entertainment companies,
4. All data have been revised.
Consumer Installment
1.56
Credit
A41
TERMS OF C O N S U M E R INSTALLMENT CREDIT
Percent unless noted otherwise
1986
Item
1984
1985
1987
1986
Nov.
Jan.
Dec.
Feb.
Mar.
Apr.
May
INTEREST R A T E S
1
2
3
4
5
6
Commercial b a n k s '
48-month new car 2
24-month personal
120-month mobile home 2
Credit card
Auto finance companies
N e w car
Used car
13.71
16.47
15.58
18.77
12.91
15.94
14.96
18.69
11.33
14.82
13.99
18.26
10.58
14.19
13.49
18.09
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.35
14.10
13.42
18.10
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10.23
14.00
13.18
17.92
14.62
17.85
11.98
17.59
9.44
15.95
11.83
15.20
11.71
15.12
11.65
14.62
10.78
14.56
10.59
14.40
10.81
14.49
10.69
14.45
48.3
39.7
51.5
41.4
50.0
42.6
53.4
42.6
53.3
42.7
53.8
44.8
53.6
44.7
53.7
44.9
54.3
45.0
53.5
45.2
88
92
91
94
91
97
93
97
93
98
94
98
94
99
94
99
94
98
93
98
9,333
5,691
9,915
6,089
10,665
6,555
11,160
6,946
10,835
7,168
10,902
7,067
10,602
7,075
10,641
7,145
10,946
7,234
11,176
7,373
OTHER TERMS3
Maturity (months)
New car
Used car
Loan-to-value ratio
9
New car
10
Used car
Amount financed (dollars)
N e w car
II
Used car
12
7
8
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. F o r address,
see inside front cover.
A42
1.57
DomesticNonfinancialStatistics • September 1987
F U N D S R A I S E D IN U . S . C R E D I T M A R K E T S
Billions of dollars; half-yearly data are at seasonally adjusted annual rates.
1984
HI
1985
1986
H2
HI
H2
HI
H2
Nonfinancial sectors
375.8
387.4
548.8
756.3
869.3
834.0
727.8
784.8
732.6
1,006.1
706.0
962.5
87.4
87.8
-.5
161.3
162.1
-.9
186.6
186.7
-.1
198.8
199.0
_ 2
223.6
223.7
-.1
214.3
214.7
-.3
181.3
181.5
-.2
216.3
216.4
-.1
201.8
201.9
-.1
245.5
245.5
-.1
211.3
211.4
-.1
217.5
218.0
-.5
5 Private domestic nonfinancial sectors
6
Debt capital instruments
Tax-exempt obligations
7
8
Corporate bonds
9
Mortgages
10
Home mortgages
n
Multifamily residential
12
Commercial
13
Farm
288.5
155.5
23.4
22.8
109.3
72.2
4.8
22.2
10.0
226.2
148.3
44.2
18.7
85.4
50.5
5.4
25.2
4.2
362.2
252.8
53.7
16.0
183.0
117.1
14.1
49.0
2.8
557.5
314.0
50.4
46.1
217.5
129.9
25.1
63.3
-.8
645.7
461.7
152.4
73.9
235.4
150.3
29.2
62.4
-6.4
619.6
461.7
49.5
113.7
298.5
199.2
33.0
73.7
-7.4
546.5
298.4
42.8
31.2
224.5
135.2
27.5
62.9
-1.1
568.5
329.6
58.0
61.1
210.5
124.7
22.7
63.7
-.5
530.8
355.4
67.5
72.7
215.2
133.1
24.6
60.3
-2.8
760.6
568.0
237.3
75.1
255.7
167.5
33.7
64.4
-10.0
494.7
392.3
15.9
137.0
239.3
156.1
30.8
59.7
-7.4
745.0
531.2
83.0
90.4
357.7
242.3
35.1
87.7
-7.4
14
15
16
17
18
Other debt instruments
Consumer credit
Bank loans n.e.c
Open market paper
Other
133.0
22.6
57.0
14.7
38.7
77.9
17.7
52.9
-6.1
13.4
109.5
56.8
25.8
-.8
27.7
243.5
95.0
80.1
21.7
46.6
184.0
96.6
41.3
14.6
31.4
157.9
65.8
71.0
-9.3
30.3
248.1
98.7
91.9
24.8
32.7
238.9
91.3
68.4
18.7
60.5
175.4
97.3
24.9
12.3
40.9
192.6
95.9
57.7
16.9
22.0
102.4
70.6
17.6
-15.7
29.9
213.9
61.6
124.4
-3.0
30.7
19
20
21
22
23
24
By borrowing sector
State and local governments
Households
Farm
Nonfarm noncorporate
Corporate
288.5
6.8
121.4
16.6
38.5
105.2
226.2
21.5
88.4
6.8
40.2
69.2
362.2
34.0
188.0
4.3
76.6
59.3
557.5
27.4
239.5
.1
97.1
193.4
645.7
107.8
295.0
-13.6
92.8
163.7
619.6
59.4
282.1
-14.4
114.6
178.0
546.5
25.2
232.8
-.4
101.4
187.4
568.5
29.6
246.2
.5
92.7
199.5
530.8
56.8
253.6
-5.9
85.6
140.7
760.6
158.7
336.4
-21.3
99.9
186.8
494.7
35.7
222.4
-15.1
94.4
157.3
745.0
83.2
342.3
-13.7
134.7
198.6
25 Foreign net borrowing in United States
26
Bonds
27
Bank loans n.e.c
Open market paper
28
29
U.S. government loans
23.5
5.4
3.0
3.9
11.1
16.0
6.7
-5.5
1.9
13.0
17.4
3.1
3.6
6.5
4.1
6.1
1.3
-6.6
6.2
5.3
1.7
4.0
-2.8
6.2
-5.7
9.7
3.2
-1.0
11.5
-4.0
35.5
1.1
-2.2
18.0
18.7
-23.3
1.5
-11.1
-5.6
-8.1
-4.1
5.5
-6.1
4.2
-7.8
7.5
2.6
.4
8.2
-3.6
24.3
7.1
1.4
20.6
-4.8
-5.0
-.8
-3.5
2.4
-3.1
399.3
403.4
566.2
762.4
871.0
843.6
763.3
761.5
728.4
1,013.5
730.3
957.6
1 Total net borrowing by domestic nonfinancial sectors
By sector and instrument
2 U.S. government
3
Treasury securities
4
Agency issues and mortgages
30 Total domestic plus foreign
Financial sectors
31 Total net borrowing by financial sectors
By instrument
32 U.S. government related
33
Sponsored credit agency securities
34
Mortgage pool securities
35
36 Private financial sectors
37
Corporate bonds
Mortgages
38
39
Bank loans n.e.c
Open market paper
40
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
101.9
90.1
94.0
139.0
186.9
248.4
134.2
143.8
154.8
218.9
185.9
310.9
47.4
30.5
15.0
1.9
54.5
4.4
64.9
14.9
49.5
.4
25.2
12.5
.1
1.9
9.9
.8
67.8
1.4
66.4
74.9
30.4
44.4
80.0
31.8
48.2
92.9
25.3
67.6
64.4
17.3
.4
-.1
31.1
15.7
63.8
29.3
.4
1.4
17.0
15.7
61.9
35.3
-.1
21.3
-7.0
64.1
23.3
.4
.7
24.1
15.7
173.7
12.6
161.4
-.4
74.8
26.6
.1
4.0
24.2
19.8
69.8
29.1
40.7
26.2
12.1
101.5
20.6
79.9
1.1
85.3
36.5
.1
2.6
32.0
14.2
.9
13.9
11.7
110.2
15.9
92.1
2.2
108.8
37.7
.1
4.2
50.1
16.7
129.5
4.4
124.3
.8
56.4
25.5
.6
2.4
14.4
13.5
217.8
20.8
198.6
-1.5
93.1
27.7
-.4
5.6
34.1
26.2
1.4
66.4
26.2
5.0
12.1
-2.1
11.4
-.2
30.4
44.4
64.1
7.3
15.6
22.7
17.8
.8
21.7
79.9
85.3
-4.9
14.5
22.3
52.8
.5
12.2
161.4
74.8
-3.6
4.5
29.2
44.1
.6
29.1
40.7
64.4
15.4
23.7
20.2
4.3
.8
31.8
48.2
63.8
-.9
7.5
25.1
31.3
.8
25.3
67.6
61.9
-9.2
13.7
12.1
44.8
.5
18.1
92.1
108.8
-.6
15.3
32.6
60.9
.5
5.2
124.3
56.4
-6.7
1.7
23.1
37.5
.9
19.3
198.6
93.1
-.5
7.4
35.3
50.6
.3
*
1.2
32.7
16.2
32.4
15.0
54.5
11.6
9.2
15.5
18.5
-.2
15.3
49.5
25.2
11.7
6.8
2.5
4.3
*
*
*
All sectors
50 Total net borrowing
501.3
493.5
660.2
901.4
1057.8
1092.1
897.5
905.3
833.3
1,232.4
916.2
1268.5
51
52
53
54
55
56
57
58
133.0
23.4
32.6
109.2
22.6
61.2
51.3
68.0
225.9
44.2
37.8
85.4
17.7
49.3
5.7
27.6
254.4
53.7
31.2
183.0
56.8
29.3
26.9
24.8
273.8
50.4
70.7
217.8
95.0
74.2
52.0
67.6
324.2
152.4
114.4
235.4
96.6
41.0
52.8
41.0
388.4
49.5
143.5
298.6
65.8
74.0
26.4
45.8
251.2
42.8
49.6
224.8
98.7
89.6
73.8
67.1
296.4
58.0
91.9
210.8
91.3
58.8
30.1
68.1
294.8
67.5
113.5
215.2
97.3
19.8
30.4
44.8
353.5
237.3
115.3
255.7
95.9
62.3
75.2
37.3
340.0
15.9
169.6
239.9
70.6
21.4
19.3
39.4
436.9
83.0
117.4
357.3
61.6
126.6
33.4
52.3
U.S. government securities
State and local obligations
Corporate and foreign bonds
Mortgages
Consumer credit
Bank loans n.e.c
Open market paper
Other loans
External corporate equity funds raised in United States
50 Total new share issues
60
61
62
63
64
Mutual f u n d s
All other
Nonfinancial corporations
Financial corporations
Foreign shares purchased in United States
-3.3
33.6
67.0
-31.1
37.5
119.5
-40.1
-22.2
33.3
41.6
146.8
92.3
6.0
-9.3
-11.5
1.9
.3
16.8
16.8
11.4
4.0
1.5
32.1
34.9
28.3
2.7
3.9
38.0
-69.1
-77.0
6.7
1.2
103.4
-65.9
-81.6
11.7
4.0
191.7
-72.1
-80.8
7.0
1.6
39.3
-79.4
-84.5
5.9
-.7
36.6
-58.8
-69.4
7.6
3.0
93.6
-60.4
-75.7
11.0
4.3
113.1
-71.5
-87.5
12.4
3.6
198.7
-52.0
-68.7
8.3
8.5
184.6
-92.3
-92.7
5.7
-5.3
Flow of Funds
1.58
A43
DIRECT A N D INDIRECT 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.
1984
1981
Transaction category, or sector
1 Total funds advanced in credit markets to domestic
nonfinancial sectors
Bv public agencies
?
3
4
5
6
and
1982
1983
1984
1986
1985
1986
HI
H2
HI
H2
HI
H2
375.8
387.4
548.8
756.3
869.3
834.0
727.8
784.8
732.6
1,006.1
706.0
962.5
104.4
17.1
23.5
16.2
47.7
115.4
22.7
61.0
.8
30.8
115.3
27.6
76.1
-7.0
18.6
154.6
36.0
56.5
15.7
46.5
203.3
47.2
94.6
14.2
47.3
311.1
87.8
158.5
19.8
45.0
132.5
26.8
52.7
15.7
37.5
176.6
45.2
60.2
15.7
55.5
201.8
53.1
85.6
11.7
51.4
204.9
41.3
103.7
16.7
43.2
267.6
85.4
121.0
13.5
47.7
354.5
90.1
196.0
26.2
42.3
foreign
U.S. government securities
Residential mortgages
F H L B advances to savings and loans
Other loans and securities
1985
7
8
9
10
Total advanced, by sector
U.S. government
Sponsored credit agencies
Monetary authorities
Foreign
24.0
48.2
9.2
23.0
15.9
65.5
9.8
24.1
9.7
69.8
10.9
24.9
17.4
73.3
8.4
55.5
17.8
101.5
21.6
62.4
10.9
176.6
30.2
93.4
9.0
74.0
8.8
40.7
25.7
72.5
8.0
70.4
28.8
98.2
23.7
51.0
6.7
104.9
19.5
73.8
12.9
135.3
9.8
109.7
9.0
217.9
50.6
77.1
11
12
Agency and foreign borrowing not in line 1
Sponsored credit agencies and mortgage pools
Foreign
47.4
23.5
64.9
16.0
67.8
17.4
74.9
6.1
101.5
1.7
173.7
9.7
69.8
35.5
80.0
-23.3
92.9
-4.1
110.2
7.5
129.5
24.3
217.8
-5.0
342.3
115.9
23.4
19.8
53.5
145.9
16.2
352.9
203.1
44.2
14.8
-5.3
96.9
.8
518.7
226.9
53.7
14.6
55.0
161.5
-7.0
682.7
237.8
50.4
32.6
98.5
279.1
15.7
769.2
277.0
152.4
41.2
84.8
228.1
14.2
706.2
300.6
49.5
79.0
73.7
223.2
19.8
700.5
224.4
42.8
25.6
109.9
313.6
15.7
664.9
251.2
58.0
39.6
87.0
244.7
15.7
619.6
241.7
67.5
49.7
72.0
200.4
11.7
918.8
312.2
237.3
32.7
97.5
255.9
16.7
592.1
254.5
15.9
104.2
65.9
165.0
13.5
820.9
346.8
83.0
53.9
81.4
281.9
26.2
320.2
106.5
26.2
93.5
94.0
261.9
110.2
21.8
86.2
43.7
391.9
144.3
135.6
97.8
14.1
550.5
168.9
149.2
124.0
108.3
554.4
186.3
83.4
141.0
143.6
647.9
194.8
105.3
137.2
210.5
581.8
184.2
173.5
144.5
79.5
519.1
153.5
124.9
103.5
137.2
471.3
133.8
63.0
121.8
152.7
637.4
238.8
103.9
160.1
134.5
572.4
106.9
101.4
128.6
235.6
724.0
283.0
109.3
145.9
185.8
75 Sources of funds
76
Private domestic deposits and RPs
27
Credit market borrowing
320.2
214.5
54.5
261.9
195.2
25.2
391.9
212.2
26.2
550.5
317.6
64.1
554.4
204.8
85.3
647.9
242.3
74.8
581.8
300.2
64.4
519.1
334.9
63.8
471.3
203.0
61.9
637.4
206.6
108.8
572.4
224.5
56.4
724.0
260.3
93.1
78
">9
30
31
32
51.2
-23.7
-1.1
89.6
-13.6
41.5
-31.4
6.1
92.5
-25.7
153.4
16.3
-5.3
110.6
31.8
168.8
5.4
4.0
112.5
46.8
264.2
17.7
10.3
107.0
129.2
330.8
12.4
1.7
120.0
196.6
217.2
3.0
-.1
146.5
67.8
120.4
7.8
8.2
78.5
25.9
206.5
11.2
14.4
97.4
83.5
322.0
24.3
6.1
116.6
175.0
291.5
.9
-5.5
104.5
191.5
370.5
24.0
9.0
135.5
202.1
Private domestic nonfinancial
investors
33 Direct lending in credit markets
34
U.S. government securities
35
State and local obligations
36
Corporate and foreign bonds
37
Open market paper
Other
38
76.6
37.1
11.1
-4.0
1.4
31.0
116.3
69.9
25.0
2.0
-1.3
20.6
153.0
95.5
39.0
-12.7
15.1
16.2
196.4
132.9
29.6
-3.4
8.9
28.3
300.2
150.9
59.2
13.2
51.8
25.1
133.1
81.0
17.8
12.3
1.4
20.6
183.1
142.2
25.0
-26.8
15.7
26.9
209.6
123.6
34.3
19.9
2.2
29.7
210.2
130.8
20.5
25.4
7.3
26.3
390.2
171.0
98.0
1.0
96.3
24.0
76.1
41.4
-21.8
49.3
-13.8
21.0
190.0
120.9
57.4
-24.7
16.7
19.8
39 Deposits and currency
40
Currency
41
Checkable deposits
47
Samll time and savings accounts
43
Money market fund shares
44
Large time deposits
45
Security RPs
46
Deposits in foreign countries
222.4
9.5
18.5
47.3
107.5
36.0
5.2
-1.7
204.5
9.7
18.6
135.7
24.7
5.2
11.1
-.4
229.7
14.3
28.8
215.3
-44.1
-6.3
18.5
3.1
321.1
8.6
27.8
150.7
47.2
84.9
7.0
-5.1
215.1
12.4
42.0
137.5
-2.2
14.0
13.4
-2.1
262.7
14.4
99.4
123.1
20.8
-8.2
7.2
6.0
311.3
13.1
29.4
136.4
30.2
93.4
10.8
-2.0
330.9
4.1
26.3
164.9
64.2
76.5
3.1
-8.2
215.9
15.8
18.2
167.1
4.2
-.8
14.3
-2.9
214.3
9.0
65.8
108.0
-8.6
28.9
12.5
-1.3
241.6
10.9
83.1
119.5
29.0
.9
-7.9
6.2
284.0
17.9
115.9
126.7
12.7
-17.3
22.3
5.7
47 Total of credit market instruments, deposits and
currency
299.0
320.7
382.7
517.4
515.3
395.8
494.4
540.5
426.0
604.5
317.8
474.0
26.2
93.6
-.7
28.6
74.2
-7.3
20.4
75.5
41.3
20.3
80.6
60.9
23.3
72.1
80.1
36.9
91.7
105.8
17.4
83.1
43.7
23.2
78.1
78.2
27.7
76.1
62.2
20.2
69.4
98.1
36.6
96.7
110.5
37.0
88.2
101.1
-3.3
33.6
67.0
-31.1
37.5
119.5
-40.1
-22.2
33.3
41.6
146.8
92.3
6.0
-9.3
19.9
-23.2
16.8
16.8
27.6
6.0
32.1
34.9
46.8
20.2
38.0
-69.1
8.2
-39.4
103.4
-65.9
33.3
4.1
191.7
-72.1
25.2
94.3
39.3
-79.4
-4.1
-36.0
36.6
-58.8
20.6
-42.7
93.6
-60.4
54.0
-20.7
113.1
-71.5
12.6
29.0
198.7
-52.0
35.4
111.4
184.6
-92.3
15.1
77.2
Private domestic
13
14
15
16
17
18
19
funds
advanced
U.S. government securities
State and local obligations
Corporate and foreign bonds
Residential mortgages
Other mortgages and loans
LESS: Federal Home Loan Bank advances
Private financial
intermediation
70 Credit market funds advanced by private
institutions
?1
Commercial banking
??
Savings institutions
?3
Insurance and pension funds
24
Other finance
financial
Other sources
Foreign funds
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
N
Mutual fund shares
i?
i3
i4 Acquisitions by financial institutions
55
NOTES BY LINE NUMBER.
1.
2.
6.
11.
13.
18.
26.
27.
29.
30.
Line 1 of table 1.57.
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,
less claims on foreign affiliates and deposits by banking in foreign banks.
Demand deposits and note balances at commercial banks.
31. Excludes net investment of these reserves in corporate equities.
32. Mainly retained earnings and net miscellaneous liabilities.
33. Line 13 less line 20 plus line 27.
34-38. Lines 14-18 less amounts acquired by private finance plus amounts
borrowed by private finance. Line 38 includes mortgages.
40. Mainly an offset to line 9.
47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46.
48. Line 2/line 1.
49. Line 20/line 13.
50. Sum of lines 10 and 29.
51. 53. Includes issues by financial institutions.
NOTE. Full statements for sectors and transaction types in flows and in amounts
outstanding may be obtained from Flow of Funds Section, Division of Research
and Statistics, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551.
A44
2.10
Domestic Nonfinancial Statistics • September 1987
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures 1
1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted.
1986
Measure
1984
1985
1987
1986
Oct.
Nov.
Dec.
Jan.
Feb.'
Mar.'
Apr.'
May'
June
1 Industrial production
121.4
123.8
125.1'
125.3
126.0
126.7
126.5
127.2
127.3
127.3
128.0
128.2
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
126.7
127.3
118.0
139.6
124.7
114.2
130.8
131.1
120.2
145.4
130.0
114.2
133.2
132.3
124.5''
142.7
136.4
113.9
134.0
132.7
124.7
143.3
138.7
113.3
134.5
133.1
125.6
143.1
139.2
114.3
135.0
133.7
127.2
142.2
139.7
115.2
134.9
133.6
126.8
142.8
139.1
115.2
136.1
135.0
127.5
144.9
139.7
115.1
136.2
135.0
127.5
145.0
140.4
115.2
135.6
134.4
126.6
144.8
139.8
115.9
136.5
135.2
127.3
145.6
140.9
116.4
136.4
135.1
127.1
145.6
140.8
117.2
123.4
126.4
129.1
129.9
130.3
131.1
131.1
132.0
132.3
132.3
132.8
132.8
80.5
82.0
80.1
80.2
79.8
78.5
79.6
77.8
79.7
78.8
80.0
78.9
79.4'
78.8
79.7
78.7
79.6
78.7
79.4
79.0
79.7
79.3
79.7
79.7
2
3
4
5
6
7
Industry
groupings
8 Manufacturing
Capacity utilization (percent) 2
9
Manufacturing
10
Industrial materials industries
11 Construction contracts (1982 = 100)3
135.0
148.0
155.0
151.0
156.0
155.0
150.0
145.0
160.0
158.0
149.0
161.0
12
13
14
15
16
17
18
19
20
21
Nonagricultural employment, total 4
Goods-producing, total
Manufacturing, total
Manufacturing, p r o d u c t i o n - w o r k e r . . . .
Service-producing
Personal income, total
Wages and salary disbursements
Manufacturing
Disposable personal income''
Retail sales 6
114.6
101.6
98.4
94.1
120.0
193.4'
185.0'
164.6
193.5'
179.0
118.3'
102.4
97.8''
92.9
125.0
207.0'
198.7'
172.8''
206.0'
190.6
120.8'
102.4
96.5 f
92.1
129.4
219.9'
210.2'
176.4''
219.1'
199.9
121.5
101.1
96.2
90.9
130.1
222.6'
213.2''
178.8'
221.4'"
201.9
121.8
101.2
96.3
91.1
130.4
223.3'"
214.5'
177.4'
221.8'"
200.9
121.9
101.2
96.4
91.3
130.6
224.8'"
214.8'"
177.7'"
222.7'
211.8
122.4
101.5
96.3
91.1
131.1
225.9'
216.3'
178.5'"
224.3'
196.8
122.7
101.6
96.4
91.4
131.5
228.4
218.0
179.1
227.5
206.3
122.9
101.7
96.5
91.4
131.8
229.1
218.6
179.2
228.1
206.8
123.2
101.7
96.6
91.5
132.2
230.2
219.5
178.9
222.3
207.4
123.3
101.7
96.6
91.6
132.3
231.3
220.6
179.8
230.3
206.7
123.4
101.8
96.7
91.8
132.5
232.1
221.4
180.0
230.0
206.7
22
23
Prices 7
Consumer (1967 = 100)
Producer finished goods (1967 = 100) . . .
311.1
291.1
322.2
293.7
328.4
289.6
330.5
290.7
330.8
290.7
331.1
290.4
333.1
291.8'
334.4
292.3
335.9
292.3
337.7
295.0
338.7
296.3
340.1
296.8
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 1 9 8 4 i n t h e FEDERAL RESERVE B U L L E T I N , v o l . 7 1
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
shown in the September BULLETIN.
2. Ratios of indexes of production to indexes of capacity. Based on data from
Federal Reserve, McGraw-Hill Economics Department, Department of Commerce, and other sources.
3. Index of dollar value of total construction contracts, including residential,
nonresidential and heavy engineering, from McGraw-Hill Information Systems
Company, F. W. Dodge Division.
4. Based on data in Employment and Earnings (U.S. Department of Labor).
Series covers employees only, excluding personnel in the Armed Forces.
5. Based on data in Survey of Current Business (U.S. Department of Commerce).
6. Based on Bureau of Census data published in Survey of Current
Business.
7. Data without seasonal adjustment, as published in Monthly Labor
Review.
Seasonally adjusted data for changes in the price indexes may be obtained f r o m
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
LABOR FORCE, EMPLOYMENT, A N D
A45
UNEMPLOYMENT
Thousands of persons; monthly data are seasonally adjusted. Exceptions noted.
1987
1986
Category
1984
1985
1986
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
HOUSEHOLD SURVEY DATA
1
1 Noninstitutional population
178,602
180,440
182,822
183,628
183,815
184,092
184,259
184,436
184,597
184,777
184,941
2
Labor force (including Armed Forces) 1
3
Civilian labor force
115,763
113,544
117,695
115,461
120,078
117,834
120,940
118,675
120,854
118,586
121,299
119,034
121,610
119,349
121,479
119,222
121,588
119,335
122,237
119,993
121,755
119,517
Nonagricultural industries 2
Agriculture
Unemployment
6
Number
Rate (percent of civilian labor force) . . .
7
8 Not in labor force
101,685
3,321
103,971
3,179
106,434
3,163
107,217
3,215
107,476
3,161
107,866
3,145
108,146
3,236
108,084
3,284
108,545
3,290
109,112
3,335
109,079
3,178
8,539
7.5
62,839
8,312
7.2
62,745
8,237
7.0
62,744
8,243
6.9
62,688
7,949
6.7
62,961
8,023
6.7
62,793
7,967
6.7
62,649
7,854
6.6
62,957
7,500
6.3
63,009
7,546
6.3
62,540
7,260
6.1
63,186
94,496
97,519
99,610
100,415
100,567
100,919
101,150
101,329
101,598'
101,672'
101,788
19,378
966
4,383
5,159
22,100
5,689
20,797
16,023
19,260
927
4,673
5,238
23,073
5,955
22,000
16,394
18,994
783
4,904
5,244
23,580
6,297
23,099
16,710
18,954
730
4,946
5,278
23,737
6,418
23,452
16,900
18,970
724
4,936
5,286
23,732
6,451
23,544
16,924
18,956
718
5,034
5,304
23,821
6,480
23,670
16,936
18,986
719
5,038
5,315
23,897
6,501
23,759
16,935
18,995
722
5,032
5,333
23,902
6,526
23,842
16,977
19,011
729'
5,019 r
5,348'
23,969'
6,558'
23,926
17,038'
19,025'
735
4,995'
5,347'
23,983'
6,576'
23,997'
17,014'
19,029
732
5,008
5,352
23,996
6,585
24,044
17,042
4
5
ESTABLISHMENT SURVEY DATA
9 Nonagricultural payroll employment 3
10
11
12
13
14
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
IS Finance
16 Service
17 Government
1. Persons 16 years of age and over. Monthly figures, which are based on
sample data, relate to the calendar week that contains the 12th day; annual data
are averages of monthly figures. By definition, seasonality does not exist in
population figures. Based on data f r o m 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 1987
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 1987
OUTPUT, CAPACITY, A N D CAPACITY UTILIZATION
Seasonally adjusted
1986
1987
Q4
Q3
Q1
1986
Q2
Q3
1987
Q4
Q1
1986
Q2
Q3
Capacity (percent of 1977 output)
Output (1977 = 100)
1987
Q4
Qi
Q2
Utilization rate (percent)
1 Total industry
125.0
126.0
127.0
127.8
157.9
158.8
159.6
160.5
79.1
79.3
79.6
79.6
2 Mining
3 Utilities
96.6
108.8
96.6
110.4
96.6
109.5
97.1
110.5
131.9
137.5
131.7
138.1
131.3
138.7
130.7
139.3
73.2
79.1
73.3 r
79.9
73.6
79.0'
74.3
79.3
4 Manufacturing
129.4
130.4
131.8
132.6
162.4
163.4
164.4
165.5
79.7
79.8
80.2
80.1
5 Primary processing
6 Advanced processing .
112.1
139.7
114.0
140.4
115.1
141.8
116.5
142.4
134.6
179.1
135.1
180.4
135.9
181.7
136.5
183.0
83.3
78.0
84.3
77.8
84.8''
78.1
85.3
77.8
7 Materials
8 Durable goods
9
Metal materials
10 Nondurable goods
U
Textile, paper, and chemical . .
V
13
14 Energy materials
Previous cycle 1
High
Low
113.4
114.3
115.1
116.5
145.3
145.8
146.3
146.8
78.1
78.4
78.7
79.3
118.8
73.1
119.7
120.4
135.1
117.7
120.1
75.7
121.1
122.4
136.0
120.1
121.2
75.5
122.8
124.2
136.4
122.5
122.1
77.1
125.7
127.2
161.5
114.0
139.9
139.2
138.9
144.7
162.2
113.4
140.4
139.6
139.7
145.0
163.0
112.7
141.0
140.4
140.8
145.6
163.6
111.7
142.0
141.4
73.6
64.2
85.6
86.5
97.3
81.4
74.0
66.7
86.4
87.6
97.3
82.8
74.4
67.0
87.1
88.5
96.9
84.1''
74.6
69.0
88.5
89.9
98.6
98.2
97.8
98.7
121.4
121.6
121.6
121.5
81.2
80.7
80.5
81.3
June
Latest cycle 2
1986
Low
June
High
1986
Oct.
Nov.
1987
Dec.
Jan.
Feb.
Mar.
Apr/
May''
Capacity utilization rate (percent)
15 Total industry
88.6
72.1
86.9
69.5
79.0
79.0
79.4
79.6
79.4
79.7
79.6
79.4
79.7
79.7
16 Mining
17 Utilities
92.8
95.6
87.8
82.9
95.2
88.5
76.9
78.0
74.9
79.2
72.5
79.3
73.9
80.5
73.8
79.5
73.9
79.1
73.3
79.0
73.6
78.9
73.8
78.1
74.3
79.5
74.9
80.4
18 Manufacturing
87.7
69.9
86.5
68.0
79.3
79.6
79.8
80.0
79.9
80.3
80.3
80.1
80.2
80.1
19 Primary p r o c e s s i n g . . . .
20 Advanced p r o c e s s i n g . .
91.9
86.0
68.3
71.1
89.1
85.1
65.1
69.5
82.7
77.7
83.8
77.8
84.4
77.7
85.0
77.9
84.8
77.8
84.7
78.3
84.8
78.1
85.4
77.8
85.3
78.0
85.9
77.7
21 Materials
92.0
70.5
89.1
68.4
78.0
77.8
78.4
78.9
78.8
78.7
78.7
79.0
79.3
79.7
22 Durable goods
23
Metal materials
91.8
99.2
64.4
67.1
89.8
93.6
60.9
45.7
73.2
63.2
73.6
65.2
74.2
68.4
74.3
66.5
74.0
65.9
74.6
67.3
74.7
68.0
74.8
68.6
74.4
68.7
74.7
69.7
24 Nondurable goods . . . .
91.1
66.7
88.1
70.6
84.3
85.8
85.7
87.7
87.5
86.8
86.8
88.0
88.6
88.9
92.8
98.4
92 5
64.8
70.6
64.4
89.4
97.3
87.9
68.6
79.9
63.3
85.1
95.9
80.4
87.0
95.7
82.5
86.7
96.0
81.7
89.2
100.2
84.3
89.3
98.3
84.9
88.1
97.1
83.7
88.1
95.4
83.7
89.4
95.8
85.2
90.0
97.2
85.9
90.4
~>7
28 Energy materials
94.6
86.9
94.0
82.2
83.1
79.7
81.2
81.2
81.3
80.3
79.8
80.0
81.4
82.4
25
Textile, paper, and
chemical
->6
1. Monthly high 1973; monthly low 1975.
2. Monthly highs 1978 through 1980; monthly lows 1982.
NOTE. These data also appear in the Board's G.3 (402) release. For address, see
inside front cover.
Selected Measures
2.13
A47
INDUSTRIAL PRODUCTION Indexes and Gross Value A
Monthly data are seasonally adjusted
Groups
1977
proportion
1987
1986
1986
avg.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar/
Apr.
MayP
June"1
Index (1977 = 100)
MAJOR M A R K E T
100.00
125.0
124.2
124.9
125.1
124.9
125.3
126.0
126.7
126.5
127.2
127.3
127.3
128.0
128.2
57.72
44.77
25.52
19.25
12.94
42.28
133.2
132.3
124.4
142.7
136.4
113.9
132.4
131.1
124.4
140.0
137.0
113.1
133.2
132.0
125.2
141.0
137.3
113.6
133.8
132.6
125.1
142.5
137.8
113.2
133.3
132.2
124.2
142.8
137.0
113.5
134.0
132.7
124.7
143.3
138.7
113.3
134.5
133.1
125.6
143.1
139.2
114.3
135.0
133.7
127.2
142.2
139.7
115.2
134.9
133.6
126.8
142.8
139.1
115.2
136.1
135.0
127.5
144.9
139.7
115.1
136.2
135.0
127.5
145.0
140.4
115.2
135.6
134.4
126.6
144.8
139.8
115.9
136.5
135.2
127.3
145.6
140.9
116.4
136.4
135.1
127.1
145.6
140.8
117.2
6.89
2.98
1.79
1.16
.63
1.19
3.91
1.24
1.19
.96
1.71
116.2
115.1
112.9
97.3
141.8
118.4
117.1
139.5
141.6
125.8
96.0
114.3
113.7
112.2
99.3
136.1
116.1
114.8
137.5
139.1
122.5
94.1
116.3
116.4
114.5
95.3
150.3
119.1
116.3
138.9
141.6
126.6
94.1
115.7
114.5
110.4
87.8
152.4
120.7
116.7
139.4
142.5
125.8
95.1
117.4
117.0
116.8
96.2
155.1
117.3
117.7
141.2
143.5
126.2
96.0
116.3
112.7
107.7
91.9
137.1
120.1
119.0
142.6
144.3
128.8
96.5
118.4
114.6
107.6
92.3
136.0
125.2
121.2
148.1
150.0
131.1
96.3
121.5
117.7
115.6
99.5
145.6
120.8
124.4
153.2
155.1
132.0
99.4
120.0
117.6
117.9
94.3
161.9
117.1
121.9
146.9
148.9
129.1
99.8
122.4
123.5
125.2
105.3
162.1
121.0
121.6
145.2
146.7
130.8
99.3
121.2
121.2
121.6
100.9
159.9
120.5
121.2
142.9
143.8
131.3
99.8
118.0
115.8
111.5
91.8
148.1
122.2
119.8
137.7
139.2
133.0
99.4
119.6
117.5
113.1
91.0
118.3
114.5
107.7
87.9
124.2
121.1
142.2
142.3
132.9
99.3
124.7
121.3
141.6
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
127.5
97.0
134.1
131.9
136.5
161.2
147.4
105.7
92.8
128.1
135.1
133.3
137.0
163.6
147.1
104.8
91.8
118.1
128.4
135.3
132.2
138.5
166.4
146.4
106.6
91.2
122.3
128.6
135.5
133.2
137.9
163.4
147.7
107.1
94.9
119.6
126.7
133.6
131.0
136.3
161.1
145.7
106.3
92.0
120.9
127.8
134.4
131.6
137.2
161.7
150.3
105.2
90.8
119.8
128.3
135.0
132.6
137.4
161.0
151.5
105.5
91.7
119.6
129.4
136.0
133.9
138.2
163.1
150.1
106.4
92.2
120.8
129.2
135.9
132.9
139.0
165.9
149.4
106.3
95.0
117.8
129.4
135.9
134.0
137.9
164.7
147.8
105.7
92.5
119.2
129.8
136.5
134.8
138.2
165.7
147.5
105.8
94.1
117.7
129.8
136.4
134.1
138.9
165.7
148.9
106.5
94.5
118.7
130.2
136.7
134.5
138.9
165.3
151.4
105.4
91.7
130.4
137.0
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
147.1
138.6
59.8
112.0
81.6
214.6
109.2
180.3
145.1
136.6
61.9
111.7
83.5
208.2
108.8
178.4
146.4
137.9
60.6
112.6
81.7
214.5
103.9
179.5
147.8
139.3
58.3
113.3
81.7
217.5
106.9
181.0
148.0
139.3
58.1
113.0
80.3
215.1
113.3
182.0
148.4
139.1
58.0
112.7
80.5
215.4
111.8
184.6
148.1
138.6
56.6
109.6
79.5
217.3
110.7
184.9
147.0
137.1
58.2
108.8
80.2
213.7
108.9
185.8
147.7
138.1
57.2
110.1
79.6
215.9
109.5
185.2
150.1
140.8
56.8
111.5
81.2
218.4
117.4
186.5
150.1
140.8
58.1
110.9
81.7
219.7
114.0
186.6
149.9
140.5
58.2
111.1
82.4
220.2
110.4
186.6
150.6
141.3
60.8
111.5
83.3
220.8
110.8
187.1
5.95
6.99
5.67
1.31
124.7
146.4
150.6
128.3
124.1
147.9
151.6
131.9
124.0
148.6
153.3
128.3
125.4
148.4
152.5
130.6
125.9
146.4
151.2
125.8
126.3
149.3
154.1
128.8
126.8
149.7
153.7
132.4
127.9
149.8
154.3
130.3
128.3
148.3
153.3
126.8
128.4
149.4
154.1
128.8
128.5
150.5
155.2
130.3
127.2
150.6
155.6
129.0
127.9
152.0
156.8
131.2
127.1
20.50
4.92
5.94
9.64
4.64
119.7
98.5
153.9
109.4
80.0
117.8
96.3
151.8
107.9
76.7
118.8
96.7
154.3
108.2
77.4
118.8
95.2
155.6
108.1
76.9
118.9
95.3
154.8
108.8
78.4
119.2
97.0
153.5
109.4
78.8
120.4
98.0
154.5
110.7
82.1
120.7
98.8
154.2
111.2
80.3
120.5
99.0
154.0
110.8
79.2
121.5
100.0
155.6
111.5
80.3
121.8
98.9
155.8
112.6
80.8
122.2
96.2
157.2
114.0
81.9
121.7
95.5
155.3
114.4
81.7
122.3
95.6
155.6
115.4
117.7
118.9
119.7
120.6
120.3
120.2
123.2
123.2
122.5
122.8
124.7
125.8
126.5
121.8
116.0
133.7
119.7
117.1
121.3
114.3
133.5
119.5
117.5
121.0
115.6
134.2
118.5
117.6
124.7
116.1
140.2
122.3
118.5
125.0
116.5
137.9
123.4
118.0
123.6
115.8
136.7
121.8
119.0
124.0
118.5
134.7
122.1
119.2
126.2
121.5
135.8
124.4
120.4
127.3
120.8
138.2
125.7
128.1
98.0
103.8
87.4
96.9
102.7
86.2
98.7
104.8
87.6
98.8
105.1
87.3
98.9
104.1
89.4
97.6
102.6
88.5
97.0
101.5
88.9
97.2
101.9
88.7
98.9
103.2
90.9
100.0
1 Total index
2 Products
3
Final products
4
Consumer goods
5
Equipment
6
Intermediate products
7 Materials
Consumer goods
8 Durable consumer goods
9
Automotive products
10
Autos and 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
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
118.3
7.53
1.52
1.55
4.46
2.57
118.9
110.6
132.1
117.1
116.5
118.2
109.5
132.7
116.1
116.4
119.0
111.2
135.6
115.9
118.3
120.5
113.4
136.0
117.5
117.2
51 Energy materials
52
Primary energy
53
Converted fuel materials
11.69
7.57
4.12
99.9
105.5
89.6
100.8
106.5
90.4
99.9
104.8
90.9
97.9
103.7
87.3
139.5
150.6
141.1
111.8
83.1
221.6
107.5
187.6
A48
2.13
Domestic Nonfinancial Statistics • September 1987
INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued
SIC
code
Groups
1977
proportion
1987
1986
avg.
June
July
Aug.
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
103.4
99.6
109.6
129.1
130.9
127.9
102.6
98.9
108.6
128.3
131.2
126.2
101.8
97.1
109.7
129.2
131.7
127.4
100.9
96.4
108.3
129.5
132.2
127.5
100.8
96.2
108.3
129.5
131.4
128.1
100.7
95.6
109.3
129.9
132.3
128.1
102.6
97.4
111.2
130.3
132.7
128.6
101.9
96.7
110.6
131.1
133.7
129.2
101.9
97.2
109.5
131.1
134.1
129.0
101.3
96.2
109.6
132.0
134.3
130.4
101.4
96.5
109.5
132.3
134.8
130.5
101.1
96.6
108.6
132.3
135.7
129.9
102.2
97.0
110.7
132.8
136.1
130.4
103.2
97.7
112.2
132.8
136.2
130.4
10
11.12
13
14
.50
1.60
7.07
.66
124.2
94.7
113.9
65.9
127.3
93.3
114.5
69.2
120.2
92.4
111.8
70.9
122.2
90.7
114.8
70.7
120.8
91.0
111.7
68.5
117.6
90.5
116.4
68.3
130.1
90.4
115.2
73.5
124.3
90.9
109.6
72.1
133.5
89.9
107.1
72.0
127.7
89.5
110.0
71.6
121.8
91.0
113.1
66.9
121.6
91.5
113.3
126.6
91.1
111.9
129.0
91.3
135.7
98.7
118.4
107.4
140.5
136.1
100.7
119.3
107.1
139.2
135.8
101.0
123.0
106.6
139.9
136.5
1 Mining and utilities
2
Mining
3
Utilities
4 Manufacturing
5
Nondurable
6
Durable
7
8
9
10
Mining
Metal
Coal
Oil and gas extraction
Stone and earth minerals
11
12
13
14
15
Nondurable
manufactures
Foods
T o b a c c o products
Textile mill products
Apparel products
Paper and products
20
21
22
23
26
7.96
.62
2.29
2.79
3.15
133.6
96.6
113.2
103.6
136.4
134.6
97.6
112.6
101.7
137.2
134.3
97.9
113.4
102.5
138.1
135.1
97.1
114.7
102.5
138.6
134.3
89.8
116.0
102.7
136.9
133.7
100.1
116.1
104.2
137.8
134.4
96.8
117.8
105.1
139.5
135.3
92.9
118.4
141.6
135.3
89.1
118.0
107.2
139.8
16
17
18
19
20
Printing and publishing
Chemicals and products
Petroleum products
Rubber and plastic p r o d u c t s . . .
Leather and products
27
28
29
30
31
4.54
8.05
2.40
2.80
.53
163.4
133.0
92.1
153.3
61.3
164.0
134.2
91.8
152.2
57.9
165.4
134.1
90.6
155.5
61.9
164.6
134.4
94.0
155.5
62.0
163.0
133.9
93.3
154.9
59.4
167.8
133.9
91.1
157.6
60.2
168.5
132.3
92.0
159.0
61.3
167.7
134.6
92.5
160.7
59.4
168.1
137.4
94.7
158.1
58.3
166.7
137.7
91.9
159.2
59.6
168.2
138.3
91.4
161.3
59.1
171.2
138.5
93.0
163.1
59.3
172.8
138.6
91.6
162.6
61.3
Durable
manufactures
21 L u m b e r and products
22 Furniture and fixtures
23 Clay, glass, stone p r o d u c t s . . . .
24
25
32
2.30
1.27
2.72
123.4
146.7
120.2
120.9
147.1
120.8
120.8
149.5
119.6
122.5
148.3
119.7
125.0
147.7
121.6
125.9
149.2
118.1
129.5
148.6
120.6
133.1
150.5
121.7
130.2
148.7
122.8
130.0
151.8
121.5
129.5
153.4
122.7
128.9
155.9
123.2
130.0
156.3
122.4
33
331.2
34
35
36
5.33
3.49
6.46
9.54
7.15
75.8
63.4
107.4
141.9
166.5
71.4
58.3
106.6
140.4
163.2
73.6
61.7
105.7
142.6
166.8
73.4
60.8
105.9
142.6
167.2
74.1
61.1
107.3
140.9
166.9
74.2
62.2
108.3
142.2
167.7
76.8
64.8
107.1
141.2
168.3
73.5
60.5
108.3
139.9
170.2
73.6
60.2
108.0
140.3
169.2
76.3
63.1
108.2
142.3
169.3
77.5
65.1
108.8
143.7
167.6
77.0
65.0
109.0
144.2
166.5
77.9
66.3
108.2
145.7
167.7
109.2
146.2
168.2
37
371
9.13
5.25
125.8
110.9
125.1
110.6
125.6
111.2
125.1
108.2
127.7
112.2
125.2
107.1
125.6
107.9
127.0
111.2
128.1
112.2
131.8
117.8
130.6
115.5
127.2
109.3
127.9
110.1
125.9
106.5
372-6.9
38
39
3.87
2.66
1.46
146.1
141.3
99.3
144.7
139.9
98.3
145.2
141.7
97.5
148.0
142.0
98.3
148.7
141.7
97.7
149.7
140.3
99.0
149.6
141.1
98.9
148.4
142.4
103.1
149.6
142.5
101.8
150.7
143.3
101.1
151.2
142.0
101.4
151.4
143.3
100.9
152.0
142.7
99.7
152.1
142.5
4.17
122.2
123.1
125.4
122.4
122.8
123.8
125.1
123.5
121.7
122.3
123.3
122.9
124.4
24
25
26
27
28
Primary metals
Iron and steel
Fabricated metal products
Nonelectrical machinery
Electrical machinery
....
29 Transportation equipment
30
Motor vehicles and p a r t s . . . .
31
Aerospace and miscellaneous
transportation equipment
32 Instruments
33 Miscellaneous m a n u f a c t u r e s . . .
Utilities
34 Electric
121.6
140.7
173.4
91.0
78.7
Gross value (billions of 1982 dollars, annual rates)
MAJOR MARKET
35 Products, total
517.5 1,702.2 1,676.7 1,669.9 1,681.3 1,677.8 1,683.9 1,690.8 1,701.9 1,707.1 1,721.4 1,724.3 1,712.7 1,721.2 1,708.7
36 Final
37
Consumer goods
38
Equipment
39 Intermediate
405.7 1,314.5 1,289.5 1,282.7 1,292.6 1,292.3 1,292.5 1,297.6 1,306.7 1,315.1 1,331.9 1,330.5 1,319.3 1,323.1 1,314.9
272.7 853.8 843.8 842.4 846.9 839.8 839.3 847.2 860.5 865.5 869.7 870.0 862.7 862.6 856.3
133.0 458.2 445.7 440.4 445.7 452.5 453.2 450.4 446.2 449.6 462.2 460.4 456.6 460.5 458.6
111.9 387.6 387.2 387.1 388.7 385.5 391.4 393.2 395.3 391.9 389.5 393.9 393.3 398.1 393.9
• 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 P r o d u c t i o n " 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 B U L L E T I N , v o l . 71
(July 1985), pp. 487-501. The revised indexes for January through June 1985 were
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.
1986
Item
1984
1987
1985
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
2
1-family
3
2-or-more-family
1,682
922
759
1,733
957
777
1,750
1,071
679
1,728
1,059
669
1,687
1,071
616
1,664
1,036
628
1,667
1,028
639
1,862
1,184
678
1,652
1,085
567
1,676
1,204
472
1,719
1,150
569
1,598
1,058
540
1,493
1,009
484
4 Started
5
1-family
6
2-or-more-family
1,749
1,084
665
1,742
1,072
669
1,805
1,179
626
1,800
1,180
620
1,689
1,123
566
1,657
1,114
543
1,637
1,129
508
1,813
1,233
580
1,816
1,253
563
1,838
1,303
535
1,730
1,211
519
1,643
1,208
435
1,602
1,119
483
7 Under construction, end of period 1
8
1-family
9
2-or-more-family
1,051
556
494
1,063
539
524
1,074
583
490
1,163
628
534
1,154
627
527
1,142
625
518
1,125
619
506
1,104
610
494
1,089
609
480
1,096
621
476
1,085
618
467
1,071
624
447
1,065
622
443
1,652
1,025
627
1,703
1,072
631
1,756
1,120
637
1,757
1,124
633
1,740
1,113
627
1,745
1,165
580
1,774
1,158
616
1,894
1,184
710
1,956
1,217
739
1,726
1,107
619
1,689
1,141
548
1,824
1,141
683
1,602
1,139
463
296
284
244
231
243
241
237
251
242
231
228
227
222
639
358
688
350
748
361
623
352
744
355
675
357
691
353
768
357
712
358
74CK
358
717
358
724
360
616
356
10 Completed
11
1-family
12
2-or-more-family
13 Mobile homes shipped
Merchant builder activity in I-family
14 N u m b e r sold
15 N u m b e r for sale, end of period 1
Price (thousands
Median
Units sold
Average
17
Units sold
of
units
dollars)2
16
80.0
84.3
92.2
91.5
95.0
96.4
94.0
95.0
98.5
95.2'
98.5
97.9
106.8
97.5
101.0
112.2
113.2
114.0
114.9
113.6
118.9
122.1
121.3'
119.5
117.5
129.6
2,868
3,217
3,566
3,590
3,710
3,760
3,850
4,060
3,480'
3,690
3,680
3,560
3,770
72.3
85.9
75.4
90.6
80.3
98.3
82.0
100.3
80.3
98.2
79.4
97.3
80.4
99.1
80.8
100.6
82.1'
100.1'
85.0
104.3
85.6
104.9
85.0
105.0
85.2
106.3
EXISTING U N I T S ( 1 - f a m i l y )
18 N u m b e r sold
Price of units sold (thousands
19 Median
20 Average
of
dollarsP
Value of new construction 3 (millions of dollars)'
CONSTRUCTION
21 Total put in place
22 Private
23
Residential
24
Nonresidential, total
Buildings
25
Industrial
26
Commercial
27
Other
28
Public utilities and other
29 Public
Military
30
Highway
31
32
Conservation and development
33
Other
328,643
355,995 388,815
395,292 400,115
380,175 384,716
401,644
388,303 397,262 398,563
270,978
153,849
117,129
291,665 316,589
158,475 187,147
133,190 129,442
322,609 324,886 322,929 320,417 306,826 310,170
194,010 198,786 192,592 194,463 181,682 187,813
128,599 126,100 130,337 125,954 125,144 122,357
326,453
203,115
123,338
312,203 320,610 322,736
190,812 199,249 198,923
121,391 121,361 123,813
390,646
13,746
39,357
12,547
51,479
15,769
51,315
12,619
53,487
13,747
48,592
13,216
53,887
13,217
56,581
12,900
45,901
13,015
55,235
13,026
44,824
14,634
56,121
13,820
45,762
13,404
54,193
13,787
44,570
13,207
54,809
14,231
42,897
12,094
50,881
14,755
44,627
12,112
53,071
14,776
43,379
11,354
52,285
15,143
42,609
11,504
51,032
14,999
43,826
12,030
51,977
15,462
44,344
57,662
2,839
18,772
4,654
31,397
64,326
3,283
21,756
4,746
34,541
72,225
3,919
23.360
4,668
40,278
72,683
4,158
23,732
4,251
40,542
75,229
5,076
22,609
4,741
42,803
71,942
3,566
22,643
4,726
41,007
70,229
4,007
19,958
4,647
41,617
73,348
4,313
21,935
4,954
42,146
74,546
4,100
23,508
5,155
41,783
75,191
2,806
23,260
4,883
44,242
76,100
3,893
23,575
4,792
43,840
76,652
3,749
22,916
5,660
44,327
75,827
4,180
23,345
4,937
43,365
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. F o r a description of these changes see
Construction Reports ( C - 3 0 - 7 6 - 5 ) , issued by the Bureau in July 1976.
394,871
NOTE. Census Bureau estimates for all series except (1) mobile homes, which
are private, domestic shipments as reported by the Manufactured Housing
Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices of
existing units, which are published by the National Association of Realtors. All
back and current figures are available from the originating agency. Permit
authorizations are those reported to the Census Bureau from 16,000 jurisdictions
beginning with 1978.
A50
2.15
Domestic Nonfinancial Statistics • September 1987
C O N S U M E R A N D PRODUCER PRICES
Percentage changes based on seasonally adjusted data, except as noted
Change from 12
months earlier
Change from 3 months earlier
(at annual rate)
Item
1987
1986
1986
June
Change from 1 month earlier
Index
level
June
1987
(1967
= 100)1
1987
1987
June
Sept.
Dec.
Mar.
June
Feb/
Apr.
Mar.
June
May
C O N S U M E R PRICES 2
1
All items
1.7
? Food
3 Energy items
4 All items less food and energy
Commodities
5
Services
6
3.7
2.0
2.S
6.2
4.6
2.5
26.1
5.2
5.1
5.3
6.5
7.9
4.0
3.8
3.8
.4
.3
1.9
.3
.0
.4
2.5
-12.9
4.0
1.2
5.7
5.4
.0
4.1
3.1
4.6
8.4
-21.0
3.7
2.6
4.3
4.1
-9.9
3.7
1.4
5.1
-1.6
2.4
-27.7
2.3
1.9
2.6
4.6
-2.9
2.6
1.8
-.4
11.2
-42.7
2.3
2.0
1.8
1.0
-12.5
4.4
3.4
3.9
-6.7
57.6
3.4
.1
5.1
14.3
12.4
.5
1.7
.1
-.1
2.5
-.2
-.2
-4.1
-.7
2.5
2.6
-1.5
1.5
-1.2
1.2
8.0
3.3
5.0
4.5
.5
.2
-2.8
-25.3
1.1
8.5
8.6
8.4
18.1
-19.6
-24.1
-2.7
-.5
8.5
-11.3
41.2
16.3
35.4
23.1
33.3
.0
1.1
-.4
.4
.4
.3
.4
340.1
334.1
380.6
339.1
270.1
414.1
-.1
1.0
.5
.7
.4
.3
.3
.5
.6
.4
.5
.2
.3
.3
.3
.7
1.5
.2
.0
.2
.4
.7
1.5
2.1
.2
.3
.3
1.4
.0
-.2
.1
.2
.5
.9
.1
.0
296.8
287.7
520.7
264.5
311.6
.3
.2
.4
.4
.6
.5
320.3
311.6
4.3
1.7
.7
4.8
2.7
2.4
-1.4
.9
4.2
246.5
612.2
271.1
PRODUCER PRICES
7 Finished goods
C o n s u m e r foods
8
9
Consumer energy
Other consumer goods
10
Capital equipment
11
3
1? Intermediate materials
Excluding energy
13
14
15
16
Crude materials
Foods
Energy
Other
1. Not seasonally adjusted.
2. Figures for consumer prices are those for all urban consumers and reflect a
rental equivalence measure of homeownership after 1982.
.V
1.5 r
.6'
.1
.4
.2'
.V
-.2'
3. Excludes intermediate materials for food manufacturing and manufactured
animal feeds.
SOURCE. Bureau of Labor Statistics.
Selected
2.16
Measures
A51
GROSS NATIONAL PRODUCT A N D INCOME
Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates.
1987
1986'
Account
1984'
1985'
1986'
Q2
Q3
Q4
Ql'
Q2
GROSS N A T I O N A L P R O D U C T
3,772.2
4,010.3
4,235.0
4,211.6
4,265.9
4,288.1
4,377.7
4,448.8
2,430.5
335.5
867.3
1,227.6
2,629.4
368.7
913.1
1,347.5
2,799.8
402.4
939.4
1,458.0
2,765.8
386.4
934.3
1,445.1
2,837.1
427.6
940.0
1,469.5
2,858.6
419.8
946.3
1,492.4
2,893.8
396.1
969.9
1,527.7
2,944.0
409.7
977.0
1,557.3
664.8
597.1
416.0
141.1
274.9
181.1
641.6
631.6
442.6
152.5
290.1
189.0
671.0
655.2
436.9
137.4
299.5
218.3
679.4
651.9
433.8
135.9
297.9
218.1
660.8
657.3
433.5
131.1
302.4
223.8
660.2
666.6
439.7
132.9
306.7
226.9
699.9
648.2
422.8
128.7
294.1
225.4
702.3
658.8
429.7
129.4
300.3
229.1
67.7
60.5
10.0
13.6
15.7
16.8
27.5
24.5
3.5
-.9
-6.4
5.1
51.6
48.7
43.5
27.1
14 Net exports of goods and services
IS
Exports
16
Imports
-58.9
383.5
442.4
-79.2
369.9
449.2
-105.5
376.2
481.7
-100.8
371.3
472.1
-110.5
376.6
487.1
-116.9
383.3
500.2
-112.2
397.3
509.5
-108.6
413.3
521.9
17 Government purchases of goods and services
18
Federal
State and local
19
735.9
310.5
425.3
818.6
353.9
464.7
869.7
366.2
503.5
867.2
368.4
498.8
878.5
371.2
507.3
886.3
368.6
517.7
896.2
366.9
529.3
911.2
371.8
539.4
3,704.5
1,581.3
675.0
901.7
1,813.1
375.1
4,000.3
1,637.9
700.2
930.0
1,959.8
408.1
4,219.3
1,693.8
716.8
953.7
2,105.6
430.0
4,184.0
1,689.9
717.0
972.9
2,097.9
423.8
4,262.4
1,703.6
735.8
967.8
2,136.6
425.7
4,294.6
1,698.9
737.3
961.6
2,160.0
429.3
4,326.0
1,738.7
747.0
991.7
2,212.0
426.9
4,405.3
1,764.4
761.1
1,003.3
2,252.1
432.3
67.7
39.2
24.9
10.0
6.6
4.5
15.7
-1.0
7.7
27.5
10.1
17.5
3.5
-12.1
15.6
-6.4
-4.5
-1.9
51.6
35.2
16.5
43.5
25.6
17.9
3,501.4
3,607.5
3,713.3
3,704.7
3,718.0
3,731.5
3,772.2
3,796.4
1 Total
2
3
4
5
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
6 Gross private domestic investment
7
Fixed investment
8
Nonresidential
9
Structures
Producers' durable equipment
10
Residential structures
11
12
13
Change in business inventories
Nonfarm
By major type of
70 Final sales, total
71
Goods
Durable
77
23
Nondurable
24
Services
25
Structures
product
26 Change in business inventories
27
Durable goods
Nondurable goods
28
29 M E M O :
Total GNP in 1982 dollars
N A T I O N A L INCOME
30 Total
3,028.6
3,229.9
3,422.0
3,414.1
3,438.7
3,471.0
3,548.3
n.a.
31 Compensation of employees
32
Wages and salaries
33
Government and government enterprises
34
Other
Supplement to wages and salaries
35
Employer contributions for social insurance
36
37
Other labor income
2,213.9
1,838.8
346.1
1,492.5
375.1
192.2
182.9
2,370.8
1,974.7
372.3
1,602.6
396.1
203.8
192.3
2,504.9
2,089.1
394.8
1,694.3
415.8
214.7
201.1
2,487.6
2,074.6
391.6
1,683.0
413.0
213.1
199.8
2,515.1
2,097.9
397.7
1,700.2
417.2
214.9
202.3
2,552.0
2,128.5
403.8
1,724.7
423.5
219.1
204.4
2,589.9
2,163.3
412.2
1,751.1
426.6
220.0
206.7
2,623.4
2,191.6
418.1
1,773.5
431.9
222.4
209.5
234.5
204.0
30.5
257.3
227.6
29.7
289.8
252.6
37.2
298.1
250.1
48.1
292.5
256.2
36.3
297.8
261.2
36.6
320.9
269.7
51.3
327.6
276.1
51.5
38 Proprietors' income 1
39
Business and professional 1
40
Farm 1
41 Rental income of persons 2
8.5
9.0
16.7
17.4
17.2
18.4
20.0
21.8
42 Corporate profits 1
43
Profits before tax 3
44
Inventory valuation adjustment
45
Capital consumption adjustment
266.9
240.0
-5.8
32.7
277.6
224.8
-.7
53.5
284.4
231.9
6.5
46.0
282.3
224.4
11.3
46.7
286.4
236.3
6.0
44.0
281.1
247.9
-8.9
42.1
294.0
257.0
-11.3
48.2
n.a.
n.a.
-18.5
48.8
46 Net interest
304.8
315.3
326.1
328.7
327.5
321.7
323.6
332.4
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For a f t e r - t a x profits, dividends, and the like, see table 1.48.
SOURCE. Survey of Current Business (Department of Commerce).
A52
2.17
Domestic Nonfinancial Statistics • September 1987
PERSONAL INCOME A N D SAVING
Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted.
1986r
Account
1985r
1984'
1987
1986r
Q2
Q3
Q4
Qlr
Q2
PERSONAL INCOME A N D SAVING
1 Total personal income
3,108.7
3,327.0
3,534.3
3,526.6
3,553.6
3,593.6
3,662.0
3,716.4
2 Wage and salary disbursements
3
C o m m o d i t y - p r o d u c i n g industries
4
Manufacturing
5
Distributive industries
6
Service industries
7
Government and government enterprises
1,838.6
577.6
439.1
442.8
472.1
346.1
1,974.9
609.2
460.9
473.0
520.4
372.3
2,089.1
623.3
470.5
497.1
573.9
394.8
2,074.6
621.2
468.7
493.7
568.1
391.6
2,097.9
622.8
470.0
498.6
578.8
397.7
2,128.5
628.4
474.5
504.7
591.6
403.8
2,163.3
632.9
477.2
511.5
606.7
412.2
2,191.6
634.9
478.9
519.2
619.4
418.1
182.9
234.5
204.0
30.5
8.5
75.5
444.7
456.6
235.7
192.3
257.3
227.6
29.7
9.0
76.3
476.5
489.7
253.4
201.1
289.8
252.6
37.2
16.7
81.2
497.6
518.3
269.2
199.8
298.1
250.1
48.1
17.4
81.0
500.0
514.5
266.4
202.3
292.5
256.2
36.3
17.2
82.1
498.1
523.6
272.4
204.4
297.8
261.2
36.6
18.4
82.9
496.8
526.6
273.5
206.7
320.9
269.7
51.3
20.0
84.5
499.8
533.7
278.0
209.5
327.6
276.1
51.5
21.8
86.3
506.3
541.6
282.5
132.7
148.9
159.6
158.8
160.1
161.8
166.7
168.3
3,327.0
3,534.3
3,526.6
3,553.6
3,593.6
3,662.0
3,716.4
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 b e n e f i t s . . .
LESS; Personal contributions for social insurance
18 EQUALS; Personal income
3,108.7
440.2
485.9
512.2
504.2
515.3
532.0
536.1
577.9
20 EQUALS; Disposable personal income
2,668.6
2,841.1
3,022.1
3,022.4
3,038.2
3,061.6
3,125.9
3,138.5
21
2,504.5
2,714.1
2,891.5
2,856.4
2,929.4
2,952.6
2,987.5
3,037.9
164.1
127.1
130.6
166.0
108.9
109.0
138.4
100.6
14,767.6
9,486.7
10,419.0
6.1
15,075.2
9,831.1
10,622.0
4.5
15,369.6
10,142.8
10,947.0
4.3
15,353.0
10,088.2
11,024.0
5.5
15,369.9
10,241.8
10,968.0
3.6
15,387.6
10,228.8
10,956.0
3.6
15,523.4
10,188.9
11,008.0
4.4
15,590.9
10,220.5
10,897.0
3.2
19
LESS: Personal tax and nontax payments
LESS: Personal outlays
22 EQUALS: Personal saving
MEMO
Per capita (1982 dollars)
23
Gross national product
24
Personal consumption expenditures
25
Disposable personal income
26 Saving rate (percent)
GROSS S A V I N G
27 Gross saving
568.5
531.3
532.0
538.7
516.2
515.3
554.3
n.a.
28
29
30
31
673.5
164.1
94.0
-5.8
664.2
127.1
99.6
-.7
679.8
130.6
92.6
6.5
713.7
166.0
93.6
11.3
660.4
108.9
92.6
6.0
653.4
109.0
78.5
-8.9
683.8
138.4
75.6
-11.3
n.a.
100.6
n.a.
-18.5
254.5
160.9
269.1
168.5
282.8
173.8
280.9
173.2
284.3
174.6
289.3
176.6
291.8
178.0
293.8
179.3
State and local
-105.0
-169.6
64.6
-132.9
-196.0
63.1
-147.8
-204.7
56.8
-175.0
-230.2
55.1
-144.1
-203.7
59.6
-138.1
-188.7
50.6
-129.5
-170.5
41.0
37 Gross investment
573.9
525.7
527.1
539.6
510.1
503.7
552.1
553.5
38 Gross private domestic
39 N e t foreign
664.8
-90.9
641.6
-115.9
671.0
-143.9
679.4
-139.8
660.8
-150.7
660.2
-156.5
699.9
-147.7
702.3
-148.7
5.4
-5.6
-4.9
.9
-6.1
-11.6
-2.2
-2.2
Gross private saving
Personal saving
Undistributed corporate profits'
Corporate inventory valuation adjustment
Capital consumption
allowances
33 Noncorporate
34
36
Government surplus, or deficit (-), national income and
product accounts
40 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
SOURCE. Survey of Current Business (Department of Commerce).
n.a.
n.a.
n.a.
Summary
3.10
U.S. INTERNATIONAL TRANSACTIONS
Statistics
A53
Summary
Millions of dollars; quarterly data are seasonally adjusted except as noted. 1
1987
1986'
1984'
Item credits or debits
1 Balance on current account
2
Not seasonally adjusted
3
4
5
6
7
8
9
10
Merchandise trade balance Merchandise exports
Merchandise imports
Military transactions, net
Investment income, net
Other service transactions, net
Remittances, pensions, and other transfers
U.S. government grants (excluding military)
1985r
1986'
Q1
Q2
Q3
Q4
Qlp
-107,013
-116,394
-141,352
-33,040
-30,090
-33,755
-34,634
-36,583
-40,230
-37,977
-36,398
-37,122
-33,866
-112,522
219,900
-332,422
-1,942
18,490
1,138
-122,148
215,935
-338,083
-3,338
25,398
-1,005
-144,339
224,361
-368,700
-3,662
20,844
1,463
-34,978
53,878
-88,856
-1,298
6,425
-168
-33,651
56,928
-90,579
-1,054
4,587
530
-37,115
56,534
-93,649
-815
5,339
342
-38,595
57,021
-95,616
-495
4,492
759
-38,330
58,212
-96,542
198
3,836
264
-3,637
-8,541
-4,079
-11,222
-3,885
-11,772
-943
-2,078
-918
-3,249
-875
-3,459
-1,151
-2,987
-993
-2,097
11 Change in U.S. government assets, other than official
reserve assets, net (increase, - )
-5,476
-2,831
-1,920
-240
-242
-1,454
15
219
12 Change in U.S. official reserve assets (increase, - )
13
Gold
14
Special drawing rights (SDRs)
15
Reserve position in International Monetary Fund
16
Foreign currencies
-3,130
0
-979
-995
-1,156
-3,858
0
-897
908
-3,869
312
0
-246
1,500
-942
-115
0
-274
344
-185
16
0
-104
366
-246
280
0
163
508
-391
132
0
-31
283
-120
1,956
0
76
606
1,274
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
-13,685
-11,127
5,019
-4,756
-2,821
-24,711
-1,323
1,361
-7,481
-17,268
-94,374
-59,039
-3,986
-3,302
-28,047
-13,415
6,373
-2,947
-5,886
-10,955
-25,303
-14,734
-1,894
-1,149
-7,526
-23,304
-18,878
685
620
-5,731
-32,351
-31,800
170
3,113
-3,834
16,517
27,802
-1,317
-9,968
23
24
25
26
27
22 Change in foreign official assets in the United States
(increase, + )
U.S. Treasury securities
Other U.S. government obligations
Other U.S. government liabilities
Other U.S. liabilities reported by U.S. banks
Other foreign official assets-
2,987
4,690
13
586
555
-2,857
-1,140
-838
-301
823
645
-1,469
34,698
34,515
-1,214
1,723
554
-880
2,576
3,238
-177
406
-1,254
363
15,568
14,538
-644
925
1,280
-531
15,551
12,167
-276
999
2,963
-302
1,003
4,572
-117
-607
-2,435
-410
14,123
11,999
-51
-1,421
3,964
-368
28 Change in foreign private assets in the United States
(increase, + ) 3
U.S. bank-reported liabilities
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net
Foreign purchases of other U.S. securities, net
Foreign direct investments in the United States, net
99,481
33,849
4,704
23,001
12,568
25,359
131,012
41,045
-450
20,433
50,962
19,022
178,689
77,350
-2,791
8,275
70,802
25,053
33,746
8,487
-2,193
7,035
18,571
1,846
33,475
3,899
-1,553
3,705
22,888
4,536
54,040
30,360
-80
609
17,074
6,077
57,428
34,604
1,035
-3,074
12,269
12,594
13,435
-13,836
0
26,837
0
17,920
0
23,947
0
10,488
2,294
0
10,241
-2,044
0
-8,530
-4,153
0
11,750
3,904
-9,128
2,749
26,837
17,920
23,947
8,194
12,285
-4,377
7,846
-11,877
-3,130
-3,858
312
-115
16
280
132
1,956
15,544
29
30
31
32
33
34 Allocation of SDRs
35 Discrepancy
36
Owing to seasonal adjustments
37
Statistical discrepancy in recorded data before seasonal
adjustment
5,445
18,454
3,372
0
MEMO
Changes in official assets
U.S. official reserve assets (increase, - )
Foreign official assets in the United States (increase, + )
excluding line 25
40 Change in Organization of Petroleum Exporting Countries
official assets in the United States (part of line 22
above)
41 Transfers under military grant programs (excluded from
lines 4, 6, and 10 above)
38
39
1. Seasonal factors are not calculated for lines
38-41.
2. Data are on an international accounts (1A)
basis data, shown in table 3.11, for reasons of
exports are excluded f r o m merchandise data and
3. Includes reinvested earnings.
2,401
-1,963
32,975
2,170
14,643
14,552
1,610
-4,504
-6,709
-8,508
1,876
-2,166
-3,023
-5,195
-2,941
153
46
101
19
11
19
53
10
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 1987
U.S. FOREIGN TRADE
Millions of dollars; monthly data are not seasonally adjusted.
1986
Item
1983
1984
1987
1985
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
18,595
18,431
16,421
18,660
21,064
20,141
20,425
1
E X P O R T S of domestic and foreign
merchandise excluding grant-aid
shipments
200,486
217,865
2
G E N E R A L I M P O R T S including
merchandise for immediate
consumption plus entries into
bonded warehouses
258,048
325,726
345,276
36,187
27,795
27,466
32,307
33,197
31,983
33,313
3
Trade balance
-57,562
107,861
-132,129
-17,592
-9,364
-11,045
-13,647
-12,133
-11,842
-12,889
213,146
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 " s e r v i c e
a c c o u n t " 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 a b o v e . As of
Jan. 1, 1987 census data are released 45 days after the end of the month.
SOURCE. FT900 " S u m m a r y of U.S. Export and Import Merchandise T r a d e "
(Department of C o m m e r c e , Bureau of the Census).
U.S. RESERVE ASSETS
Millions of dollars, end of period
1986
Type
1983
1984
1987
1985
Dec.
Jan.
Feb.
Mar.
Apr.
May
June"
1
Total
33,747
34,934
43,186
48,517
49,386
49,358
48,824
46,591
45,913
45,140
2
Gold stock, including Exchange Stabilization Fund 1
11,121
11,096
11,090
11,064
11,062
11,085
11,081
11,076
11,070
11,069
3
Special drawing rights 2 - 3
5,025
5,641
7,293
8,395
8,470
8,615
8,740
8,879
8,904
8,856
4
Reserve position in International Monetary Fund"
11,312
11,541
11,947
11,730
11,872
11,699
11,711
11,745
11,517
11,313
6,289
6,656
12,856
17,328
17,982
17,959
17,292
14,891
14,422
13,902
5
Foreign currencies
4
1. Gold held under earmark at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table
3.13. Gold stock is valued at $42.22 per fine troy ounce.
2. Beginning July 1974, the I M F 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 I M F also are valued on this basis beginning July 1974.
3.13
3. Includes allocations by the International Monetary Fund of S D R s 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 BANKS
Millions of dollars, end of period
1986
Assets
1983
1984
Dec.
1 Deposits
Assets held in custody
2 U.S. Treasury securities 1
3 Earmarked gold 2
Jan.
Feb.
Mar.
Apr.
May
June
190
267
480
287
226
255
268
342
319
318
117,670
14,414
118,000
14,242
121,004
14,245
155,835
14,048
159,597
14,041
160,942
14,046
167,423
14,036
172,929
14,031
175,849
14,031
176,657
14,034
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.
1987
1985
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
3.14
FOREIGN BRANCHES OF U.S. B A N K S
Statistics
A55
Balance Sheet Data"
Millions of dollars, end of period
1987
1986
Asset account
1983
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
All foreign countries
1 Total, all currencies
? Claims on United States
Parent bank
Other banks in United States 2
4
5
Nonbanks2
6 Claims on foreigners
7
Other branches of parent bank
8
Banks
9
Public borrowers
Nonbank foreigners
10
477,090
453,656
458,012
446,618
456,628
458,305
457,819
456,655
484,827
487,300
115,542
82,026
113,393
78,109
13,664
21,620
320,162
95,184
100,397
23,343
101,238
119,706
87,201
13,057
19,448
315,676
91,399
102,960
23,478
97,839
110,404'
78,264'
12,034
20,106
306,338 r
89,592'
103,293
23,314
90,139
114,685'
83,492'
13,685
17,508
312,833'
96,281 r
105,237
23,584
87,731
116,190'
84,111'
12,714'
19,365
310,494'
92,364'
105,386'
23,337
89,407
114,450'
82,588'
13,158
18,704
311,461'
89,656'
109,748
23,192
88,865'
111,865
81,325
13,044
17,496
310,618'
89,200
109,580
22,543'
89,295'
127,730
93,414
15,277
19,039
321,699
93,288
115,942
22,765
89,704
126,847
92,014
16,484
18,349
327,952
101,309
113,946
23,160
89,537
1
342,689
96,004
117,668
24,517
107,785
18,859
20,101
22,630
29,876
29,110
31,621
31,908
35,398
32,501
12 Total payable in U.S. dollars
371,508
350,636
336,520
306,683
317,487
309,719
311,669
306,079
328,920
336,031
n Claims on United States
Parent bank
14
15
Other banks in United States 2
Nonbanks2
16
17 Claims on foreigners
18
Other branches of parent bank
19
Banks
70
Public borrowers
N o n b a n k foreigners
21
113,436
80,909
247,406
78,431
93,332
17,890
60,977
111,426
77,229
13,500
20,697
228,600
78,746
76,940
17,626
55,288
116,638
85,971
12,454
18,213
210,129
72,727
71,868
17,260
48,274
106,265'
76,746 r
10,986
18,533
188,672'
65,857'
64,920
16,820
41,075
110,742'
82,082 r
12,830
15,830
194,941'
72,197'
66,421
16,586
39,737
111,522'
82,349'
11,531
17,642
186,370'
66,553'
63,610'
16,457'
39,75C
110,011'
81,029'
12,102
16,880
189,205'
64,550'
68,320
16,320
40,015
107,016
79,465
11,907
15,644
185,418
63,983
65,997
16,224
39,214
121,939
91,459
13,468
17,012
192,715
66,535
70,189
16,512
39,479
121,389
89,978
14,848
16,563
201,126
75,014
69,395
16,677
40,040
10,666
10,610
9,753
11,746
11,804
11,827
12,453
13,645
14,266
13,516
11 Other assets
22 Other assets
34,172'
United Kingdom
23 Total, all currencies
74 Claims on United States
75
Parent bank
76
Other banks in United States 2
77
Nonbanks 2
7.8 Claims on foreigners
79
Other branches of parent bank
30
Banks
31
Public borrowers
N o n b a n k foreigners
32
158,732
144,385
148,599
143,806
140,917
144,093
146,188
145,486
149,998
154,371
34,433
29,111
119,280
36,565
43,352
5,898
33,465
27,675
21,862
1,429
4,384
111,828
37,953
37,443
5,334
31,098
33,157
26,970
1,106
5,081
110,217
31,576
39,250
5,644
33,747
28,940
22,671
1,534
4,735
108,153
29,966
41,145
5,038
32,004
24,599
19,085
1,612
3,902
109,508
33,422
39,468
4,990
31,628
28,720
23,330
1,220
4,170
108,720
30,218
40,677
4,942
32,883
28,851
23,326
1,258
4,267
110,274
29,575
43,189
4,983
32,527
28,503
23,303
1,288
3,912
109,297
28,782
42,537
4,897
33,081
31,001
25,315
1,564
4,122
111,113
29,555
43,342
4,964
33,252
34,427
28,935
1,507
3,985
112,997
33,412
41,216
5,234
33,135
5,019
4,882
5,225
6,713
6,810
6,653
7,063
7,686
7,884
6,947
97,568
95,319
99,398
104,622
1
33 Other assets
34 Total payable in U.S. dollars
3<i Claims on United States
36
Parent bank
37
Other banks in United States 2
38
Nonbanks2
39 Claims on foreigners
40
Other branches of parent bank
41
Banks
4?
Public borrowers
Nonbank foreigners
43
44 Other assets
126,012
112,809
108,626
97,125
95,028
95,359
33,756
28,756
88,917
31,838
32,188
4,194
20,697
26,868
21,495
1,363
4,010
82,945
33,607
26,805
4,030
18,503
32,092
26,568
1,005
4,519
73,475
26,011
26,139
3,999
17,326
27,564
22,106
1,364
4,094
66,304
23,229
24,020
3,811
15,244
23,193
18,526
1,475
3,192
68,138
26,361
23,251
3,677
14,849
27,070
22,673
996
3,401
65,022
22,720
23,629'
3,681'
14,992'
27,290
22,749
1,061
3,480
66,872
22,578
25,685
3,716
14,893
26,665
22,662
980
3,023
64,466
21,785
24,225
3,660
14,796
29,066
24,689
1,192
3,185
66,257
21,958
25,343
3,712
15,244
32,542
28,228
1,157
3,157
68,469
25,921
23,263
3,785
15,500
3,339
2,996
3,059
3,257
3,697
3,267
3,406
4,188
4,075
3,611
133,229
133,837
146,437
141,464
77,909
51,747
12,649
13,513
62,770
16,562
30,917
7,120
8,171
73,282
46,282
13,988
13,012
62,886
15,775
31,352
7,169
8,590
Bahamas and Caymans
45 Total, all currencies
46 Claims on United States
Parent bank
47
48
Other banks in United States 2
49
Nonbanks2
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
152,083
146,811
142,055
75,309
48,720
_of.
77,296
49,449
11,544
16,303
65,598
17,661
30,246
6,089
11,602
74,864
50,553
11,204
13,107
63,882
19,042
28,192
6,458
10,190
72,868
20,626
36,842
6,093
12,592
68,062'
44,207'
9,628
14,227
57,452'
16,155'
25,743
6,697
8,857
142,592
78,170'
54,575'
11,156
12,439
59,883'
17,296'
27,476
6,929
8,182
135,627
73,569'
48,962'
10,625
13,982
56,899'
15,332'
26,366
7,026
8,175
68,873'
44,759'
10,924
13,190
59,036'
15,481'
28,139
6,974
8,442'
67,357
44,150'
10,855
12,352
60,643
16,529
28,568
6,915
8,631
3,906
3,917
3,309
5,849
4,539
5,159
5,320
5,837
5,758
5,296
145,641
141,562
136,794
124,801
136,813
129,474
126,605
126,808
138,445
133,119
1. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for " s h e l l " branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
131,363
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 1987
Continued
1986
Nov.
1987
Dec.
Jan.
Feb.
Mar.
Apr.
May"
All foreign countries
57 Total, all currencies
477,090
453,656
458,012
446,618
456,628
458,305
457,819
456,655
484,827
487,300
58 Negotiable CDs 3
59 To United States
60
Parent bank
Other banks in United States
61
62
Nonbanks
n.a.
188,070
81,261
29,453
77,356
37,725
147,583
78,739
18,409
50,435
34,607
155,538
83,914
16,894
54,730
32,926
137,029
75,062
14,532
47,435
31,629
151,632
82,561
15,646
53,425
33,395
140,072'
70,047
15,051'
54,974
36,074
140,046
73,095
13,602
53,349
34,873
141,341
70,866
13,695
56,780
33,155
152,390
74,772
16,913
60,705
34,360
149,785
74,347
16,908
58,530
63 To foreigners
Other branches of parent bank
64
Banks
65
66
Official institutions
Nonbank foreigners
67
68 Other liabilities
269,685
90,615
92,889
18,896
68,845
19,335
247,907
93,909
78,203
20,281
55,514
20,441
245,939
89,529
76,814
19,520
60,076
21,928
256,611
87.993
83,784
18,831
66,003
20,052
253,775
95,146
77,809
17,835
62,985
19,592
264,480'
90,303
89,216'
19,532
65,429
20,358
261,944
88,524
86,037'
19,818
67,565'
19,755
260,659'
87,867
84,976
20,591
67,225'
19,782'
277,991
94,559
92,704
21,293
69,435
21,291
284,126
101,777
90,236
23,058
69,055
19,029
69 Total payable in U.S. dollars
388,291
367,145
353,712
320,348
336,406
323,900
326,319'
321,354
340,069
346,946
70 Negotiable C D s 3
71 To United States
Parent bank
72
Other banks in United States
73
Nonbanks
74
n.a.
184,305
79,035
28,936
76,334
35,227
143,571
76,254
17,935
49,382
31,063
150,162
80,888
16,264
53,010
29,752
129,224
71,017
13,679
44,528
28,466
143,650
78,472
14,609
50,569
29,921
131,557
65,419
14,047
52,091
32,407
131,617
68,540
12,505
50,572
31,148
132,413
65,755
12,593
54,065
29,505
141,126
68,064
15,455
57,607
30,763
140,883
69,863
15,742
55,278
75 To foreigners
Other branches of parent bank
76
77
Banks
Official institutions
78
Nonbank foreigners
79
80 Other liabilities
194,139
73,522
57,022
13,855
51,260
9,847
178,260
77,770
45,123
15,773
39,594
10,087
163,583
71,078
37,365
14,359
40,781
8,904
153,972
64,178
35,306
13,139
41,349
7,400
156,806
71,181
33,850
12,371
39,404
7,484
155,182
64,380
37,159
13,688
39,955
7,240
154,711'
63,640'
36,816'
13,189
41,066'
7,584
149,949
62,172
35,116
13,392
39,269
7,844
161,216
67,278
39,111
14,318
40,509
8,222
167,664
74,769
36,216
16,068
40,611
7,636
United Kingdom
158,732
144,385
148,599
143,806
140,917
144,093
146,188
145,486
149,998
154,371
82 Negotiable C D s 3
83 To United States
84
Parent bank
85
Other banks in United States
Nonbanks
86
81 Total, all currencies
n.a.
55,799
14,021
11,328
30,450
34,413
25,250
14,651
3,125
7,474
31,260
29,422
19,330
2,974
7,118
28,984
22,585
13,811
2,184
6,590
27,781
24,657
14,469
2,649
7,539
29,432
19,465
10,004
2,154
7,307
32,233
22,501
12,735
2,154
7,612
30,968
21,433
12,332
1,816
7,285
29,311
23,967
13,201
2,205
8,561
30,226
26,291
15,145
2,273
8,873
87 To foreigners
88
Other branches of parent bank
89
Banks
Official institutions
90
91
Nonbank foreigners
92 Other liabilities
95,847
19,038
41,624
10,151
25,034
7,086
77,424
21,631
30,436
10,154
15,203
7,298
78,525
23,389
28,581
9,676
16,879
9,392
83,455
23,739
34,321
7,875
17,520
8,782
79,498
25,036
30,877
6,836
16,749
8,981
86,229
23,595
36,479
8,484
17,671
8,967
82,418
21,230
35,434
7,832
17,922
9,036
83,723
21,371
35,971
7,827
18,554
9,362
87,350
22,390
37,562
8,871
18,527
9,370
89,673
26,367
35,282
10,004
18,020
8,181
93 Total payable in U.S. dollars
131,167
117,497
112,697
99,327
99,707
98,741
101,971'
98,967
101,793
106,093
94 Negotiable CDs 3
95 To United States
Parent bank
96
Other banks in United States
97
Nonbanks
98
n.a.
54,691
13,839
11,044
29,808
33,070
24,105
14,339
2,980
6,786
29,337
27,756
18,956
2,826
5,974
27,166
20,055
13,438
1,880
4,737
26,169
22,075
14,021
2,325
5,729
27,701
16,829
9,451
1,887
5,491
30,175
19,894
12,157
1,926
5,811
28,868
18,940
11,606
1,602
5,732
27,189
21,144
12,352
2,021
6,771
28,345
23,561
14,528
2,027
7,006
99 To foreigners
100
Other branches of parent bank
Banks
101
102
Official institutions
Nonbank foreigners
103
104 Other liabilities
73,279
15,403
29,320
8,279
20,277
3,197
56,923
18,294
18,356
8,871
11.402
3,399
51,980
18,493
14,344
7,661
11,482
3,624
49,056
16,695
15,984
5,655
10,722
3,050
48,138
17,951
15,203
4,934
10,050
3,325
51,174
16,386
18,626
6,096
10,066
3,037
48,610'
14,691'
18,207
5,176
10,536
3,292
47,531
14,471
18,027
4,924
10,109
3,628
49,708
14,367
19,498
5,786
10,057
3,752
51,029
18,430
15,555
7,214
9,830
3,158
Bahamas and Caymans
105 Total, all currencies
3
106 Negotiable CDs
107 T o United States
Parent bank
108
Other banks in United States
109
Nonbanks
110
111 To foreigners
Other branches of parent bank
112
Banks
113
114
Official institutions
Nonbank foreigners
115
116 Other liabilities
117 Total payable in U.S. dollars
152,083
146,811
142,055
131,363
142,592
135,627
133,229
133,837
146,437
141,464
n.a.
111,299
50,980
16,057
44,262
615
102,955
47,162
13,938
41,855
610
103,813
44,811
12,778
46,224
784
94,493
43,572
11,131
39,790
847
105,248
48,648
11,715
44,885
995
98,733
40,845
11,687
46,201
855
95,221
40,409
10,151
44,661
813
98,560
39,625
10,568
48,367
883
107,028
42,976
13,345
50,707
1,092
101,338
39,848
13,185
48,305
38,445
14,936
11,876
1,919
11,274
2,339
40,320
16,782
12,405
2,054
9,079
2,921
35,053
14,075
10,669
1,776
8,533
2,579
33,841
12,661
8,545
2,577
10,058
2,245
34,400
12,631
8,617
2,719
10,433
2,097
33,831
12,323
8,402
2,808
10,298
2,068
35,053
12,972
8,070'
3,013
10,998'
2,100
32,501
11,673
8,140
2,836
9,852
1,963
36,491
13,891
9,452
2,937
10,211
2,035
36,825
13,359
9,885
3,072
10,509
2,209
148,278
143,582
138,322
127,309
138,774
131,572
129,048
140,457
136,475
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.
129,183
Summary
3.15
Statistics
A57
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1987'
1986'
Item
1 Total 1
2
3
4
6
7
8
9
in
11
12
By type
Liabilities reported by banks in the United Stales 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
Africa
Other countries 6
1985
1984
Dec.
Jan.
Feb.
Mar.
Apr.
May''
180,348
178,380
211,158
211,706
213,416
215,512
227,043
235,824
235,788
26,090
59,976
26,734
53,252
27.818
75.132
27,626
75,650
27,629
75,718
29,438
75,434
31,237
79,629
32,630
84,640
31,384
81,553
69,019
5,800
19,463
77,154
3,550
17,690
91,225
1,300
15,683
91,534
1,300
15,596
93,032
1,300
15,737
93,866
1,300
15.474
99,703
1,300
15,174
102,107
1,300
15,147
106,478
1,300
15,073
69,818
1,528
8,565
93,701
1,263
5,472
74,447
1,315
11,148
86,448
1,824
3,199
87,840
1,892
9.096
105.510
1,545
5.276
88,289
2,004
8,367
106,024
1,503
5,519
89,681
3,383
7,680
107,448
1,300
3,926
90,914
3,761
7.425
108,886
1,164
3,362
99,711
5,110
8,241
108,662
1,192
4,127
105,600
3,922
9,293
110,022
1,284
5,702
107,597
3,482
7,879
109,578
1,628
5,626
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
Nov.
5. Debt securities of U.S. government corporations and federally sponsored
agencies, and U.S. corporate stocks and bonds.
6. Includes countries in Oceania and Eastern Europe.
NOTE. Based on Treasury Department data and on data reported to the
Treasury Department by banks (including Federal Reserve Banks) and securities
dealers in the United States.
LIABILITIES TO A N D CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in Foreign Currencies 1
Millions of dollars, end of period
1986'
Item
1 Banks' own liabilities
2 Banks' own claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers'
1983
5,219
7,231
2,731
4,501
1,059
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
2. Assets owned by customers of the reporting bank located in the United
1984
8,586
11,984
4,998
6,986
569
1987''
1985
15,368
16,294
8,437
7,857
580
June
Sept.
Dec.
Mar.
24,314
20,937
11,072
9,865
1,385
29,467
24,124
13,220
10,904
1,597
29,404
25,150
13,173
11,977
2,508
36,436
31,748
13,929
17,819
2,120
States that represent claims on foreigners held by reporting banks for the accounts
of the domestic customers.
A58
3.17
International Statistics • September 1987
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
Reported by Banks in the United States
Millions of dollars, end of period
1986'"
Holder and type of liability
1983
1984
1987''
1985
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May''
1 All foreigners
369,607
407,306
435,726
513,633
538,895
525,505
522,597
524,768
551,449
553,394
2 Banks' own liabilities
3
Demand deposits
4
Time deposits 1
Other
5
6
Own foreign offices 1
279,087
17,470
90.632
25,874
145,111
306,898
19.571
110,413
26.268
150,646
341.070
21.107
117,278
29,305
173,381
378.439
24,758
125,429
36,448
191,805
404.760
23.788
131,136
40,880
208,956
392,094
22,490
125,207
39,549
204,848
388,147
22,449
125,728
40,611
199,359
389,715
22,303
125,129
42,458
199,825
411,333
22,174
133.278
44,826
211,055
413,895
22,954
133,878
45,673
211,390
90,520
68,669
100,408
76.368
94.656
69,133
135,193
90,351
134,134
90,257
133,411
89,278
134,450
90,695
135,054
93.048
140.117
97,789
139,500
95,971
17,467
4.385
18.747
5,293
17,964
7,558
15,343
29,499
16,523
27.354
14,656
29,477
13,839
29,916
14,744
27,262
14.625
27,702
15,885
27,644
7 Banks' custody liabilities 4
8
U.S. Treasury bills and certificates 5
9
Other negotiable and readily transferable
instruments 6
10
Other
11 Nonmonetary international and regional
organizations 7
5,957
4,454
5,821
4,565
4,699
5,081
4,520
3,889
6,830
3,819
12 Banks' own liabilities
Demand deposits
13
14
Time deposits 1
15
Other
4,632
297
3,584
750
2.014
254
1,267
493
2.621
85
2,067
469
3,194
135
2,299
761
2,850
199
2,066
584
3,732
183
2,515
1,034
2,193
157
1,488
548
2,510
246
1,230
1,033
5,236
159
3,100
1,977
2,155
106
960
1,089
16 Banks' custody liabilities 4
17
U.S. Treasurv bills and certificates
Other negotiable and readily transferable
18
instruments 6
19
Other
1,325
463
2,440
916
3,200
1,736
1.371
262
1,849
259
1,349
86
2,326
1,213
1,379
154
1,594
428
1,664
440
862
0
1,524
0
1.464
0
1.104
5
1,590
0
1,261
2
1,112
1
1,225
0
1,152
14
1,224
0
20 Official institutions
8
79,876
86,065
79,985
102,951
103,275
103,346
104,872
110,866
117,271
112,937
21 Banks' own liabilities
22
Demand deposits
23
Time deposits 1
Other 2
24
19,427
1,837
7,318
10,272
19,039
1,823
9,374
7,842
20,835
2.077
10.949
7,809
25,206
2.188
11.288
11.731
25,134
2,267
10,752
12,115
25,403
1,487
11,335
12,580
26,880
1,513
11,385
13,982
28,103
1,923
11,135
15,044
29,643
1.829
13,084
14.731
28,522
2.089
11,784
14,649
25 Banks' custody liabilities 4
26
U.S. Treasury bills and certificates
27
Other negotiable and readily transferable
instruments 6
Other
28
60,448
54,341
67,026
59,976
59,150
53,252
77.744
75.132
78,142
75,650
77.944
75,718
77,992
75,434
82.763
79,629
87,627
84,640
84,415
81,553
6,082
25
6,966
84
5.824
75
2.480
132
2,347
145
2.158
69
2,418
140
3,001
132
2,832
154
2,715
147
29 Banks 9
226,887
248,893
275,589
326,033
350,491
339,648
335,517
334,231
350,128
356,431
30 Banks' own liabilities
31
Unaffiliated foreign banks
Demand deposits
32
33
Time deposits 1
34
Other 2
35
Own foreign offices 1
205,347
60,236
8,759
37.439
14,038
145,111
225,368
74,722
10,556
47,095
17,071
150,646
252,723
79,341
10,271
49,510
19,561
173,381
282,863
91.058
11,611
57.262
22.185
191,805
309.928
100,971
10,303
64,245
26,424
208,956
297,037
92,189
10,434
57,912
23,844
204,848
293,144
93,785
10,103
60,007
23,675
199,359
295,092
95,268
9,510
61,856
23,902
199,825
311,012
99,957
9,781
64,906
25.271
211,055
317.195
105,805
10,558
68,233
27,014
211,390
21,540
10,178
23,525
11.448
22.866
9,832
43.170
10.491
40,563
9,962
42,611
9,826
42,373
10,486
39,138
9,744
39,116
9,538
39,236
9,786
7,485
3,877
7,236
4,841
6,040
6.994
5.550
27,129
5,513
25,089
5.433
27,352
4,340
27,547
4,367
25,026
4,256
25,322
4,293
25,158
36 Banks' custody liabilities 4
37
U.S. Treasurv bills and certificates
Other negotiable and readily transferable
38
instruments 6
Other
39
40 Other foreigners
56,887
67,894
74,331
80,083
80,430
77,429
77,688
75,783
77,220
80,207
41 Banks' own liabilities
42
Demand deposits
Time deposits
43
Other
44
49,680
6,577
42,290
813
60,477
6,938
52.678
861
64,892
8.673
54.752
1,467
67.176
10.824
54.580
1.772
66,849
11,019
54,073
1,757
65,923
10,386
53,446
2,091
65.929
10,676
52,848
2,405
64,009
10.623
50,908
2,479
65.440
10,405
52,188
2,848
66,023
10,202
52,901
2,921
7,207
3.686
7,417
4,029
9.439
4,314
12.908
4.465
13.580
4,387
11,507
3,648
11,759
3,563
11,773
3,520
11,780
3,183
14,184
4,192
3,038
483
3.021
367
4,636
489
6,209
2.234
7,074
2,120
5,804
2,055
5,969
2,227
6,150
2,103
6,385
2,212
7,653
2,340
10.346
10,476
9,845
6.610
7,343
7,191
7,722
7,694
7,976
8,541
45 Banks' custody liabilities 4
46
U.S. Treasury bills and certificates
Other negotiable and readily transferable
47
instruments 6
Other
48
49 MEMO: Negotiable time certificates of deposit in
custody for foreigners
1. Excludes negotiable time certificates of deposit, which are included in
" O t h e r negotiable and readily transferable instruments."
2. Includes borrowing under repurchase agreements.
3. U.S. banks: includes amounts due to own foreign branches and foreign
subsidiaries consolidated in "Consolidated Report of Condition" filed with bank
regulatory agencies. Agencies, branches, and majority-owned subsidiaries of
foreign banks: principally amounts due to head office or parent foreign bank, and
foreign branches, agencies or wholly owned subsidiaries of head office or parent
foreign bank.
4. Financial claims on residents of the United States, other than long-term
securities, held by or through reporting banks.
5. Includes nonmarketable certificates of indebtedness and Treasury bills
issued to official institutions of foreign countries.
6. Principally bankers acceptances, commercial paper, and negotiable time
certificates of deposit.
7. Principally the International Bank for Reconstruction and Development, and
the Inter-American and Asian Development Banks.
8. Foreign central banks and foreign central governments, and the Bank for
International Settlements.
9. Excludes central banks, which are included in "Official institutions."
Nonbank-Reported
3.17
Data
Continued
1986
Area and country
1983
1984
1987
1985
Nov.
Dec.
Jan.
Feb.
Mar.'
Apr.
May''
1 Total
369,607
407,306
435,726
513,633'
538,895'
525,505'
522,597'
524,768
551,449
553,394
2 Foreign countries
363,649
402,852
429,905
509,067'
534,196'
520,424'
518,077'
520,879
544,619
549,576
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
153,145
615
4,114
438
418
12,701
3,358
699
10,762
4.731
1,548
597
2,082
1.676
31,740
584
68,671
602
7,192
79
537
164.114
693
5,243
513
496
15.541
4,835
666
9,667
4,212
948
652
2,114
1,422
29,020
429
76,728
673
9,635
105
523
176,173''
1,197
6,863
576
448
21,917
5,856
755
9,304
4,410
512
685
2,197
1,301
30,407'
418
84,968'
544
3,347'
16
452
180,871''
1,186
6,788
485
580
22.850'
5,823'"
706
10,875'"
5,558
737'"
700
2,393
889
30,967'
454
85,352'
631
3,117'
80''
702
179,253'
972
6,729
449
565
21,372
6,813
745
9,375'"
5,155'
678
657
2,238
884
28,913'
375
87,911'
554
4,309
21
535
181,082'
928
7,587''
520
762
22,654
5,907'
749
8,489
5,354'
554
709
2,333
1,062
27,555
359
90,105'
565
4,319''
23
546
182,527
798
7,230
623
937
23,835
7,412
641
10,101
4.968
495
689
2,224
1,065
27,544
412
88,390
564
3,902
30
669
191,527
1,068
7,919
425
942
27,396
6,419
601
11,342
5,967
572
660
2,233
1,251
26,505
833
91,776
526
4,395
32
665
206,864
911
9,325
459
909
27,858
9,776
643
11,726
5,442
499
607
2,194
1,503
27,062
378
102,316
429
3,950
37
839
3 Europe
Austria
4
Belgium-Luxembourg
6
7
8
France
9
Germany
10
11
Italy
Netherlands
17
13
Norway
14
Portugal
15
Spain
16
Sweden
17
Switzerland
18
19
United Kingdom
70
Yugoslavia
71
Other Western Europe 1
77
U.S.S.R
23
Other Eastern Europe"
16,026
16,059
17,427
25,753
26,256
26,105'
25,189'
26,553
25,294
24,522
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
153,381
4,394
56,897
2,370
5,275
36,773
2,001
2,514
10
1,092
896
183
12,303
4,220
6,951
1,266
1,394
10,545
4,297
167,856
6.032
57,657
2,765
5,373
42,674
2,049
3,104
11
1,239
1,071
122
14,060
4,875
7,514
1,167
1,552
11,922
4,668
190,406'
5,188''
63,173'
2,579''
4,684
61.921'
2,325
3,873
6
1,199
1,129
153
13,544''
4,706
6,729
1,146
1,610
11,592
4,848''
208,949'
4.754
73,267'
2,951''
4,321
71,151'
2,053
4,281
7
1,235
1.122
136
13,631
4,914 r
6,865
1,163
1,537
10,452
5,109'
195,666'
4,499'
64,998'
2,282'"
3,813
66,775'
2,208
4,273'
6
1,049
1,124
149
13,584'
5,593
7,361
1,110
1,609
10,494
4,741'
191,636'
4,668
62,970'
2,506''
3,797
65,509'
2,046
4,268
7
1,120
1,081
145
13,423'
5,652''
6,475'
1,131
1,583
10,362
4,894
195,412
4,725
62,581
2,293
3,693
69,860
2,060
4,271
6
1,014
1,082
230
13,207
5,643
6,664
1,062
1,630
10,365
5,026
206,470
4,406
71,735
2,180
3,616
69,213
2,253
4,349
6
1,044
1,164
149
15,053
5,706
7,122
1,086
1,545
10,563
5,280
202,092
4,806
69,263
2.595
3,960
67,924
2,034
4,289
26
1,093
1,167
189
13,909
5,171
7.341
1,094
1,507
10,254
5,470
58,570
71,187
72,280
107,054
108,969'
112,058''
113,439'
108,942
112,472
107,717
249
4,051
6.657
464
997
1,722
18,079
1,648
1,234
747
12,976
9,748
1,153
4,990
6,581
507
1,033
1,268
21,640
1,730
1,383
1,257
16,804
12,841
1,607
7,786
8,067
712
1,466
1,601
23.077
1,665
1,140
1,358
14,523
9,276
1,450
17,540
9,347
701
1,528
2,380
46,184
1,128
1,720
1,083
13,010
10,984
1,476
18,903
9,518'
673
1,548
1.890
47,437'"
1,141'
1,865
1,120
12,356
11,042
2,046
19,553
9,388'
663'
1,410
1,761
49,997
1,058''
1,811
1,282
12,322''
10,768
1,650'
21,127
9,329'
686
1,591
1,892
50,921'
1,017''
1,779
1,224
12,104'
10,120'
1,973
20,106
9,160
500
1,414
1,666
48,983
1,129
1,737
1,235
11,581
9,456
1,899
19,460
9,340
526
1,460
1,302
53,526
1,177
1,426
1,131
11,409
9,815
1,841
17,305
9,341
568
1,242
1,084
50,413
1.343
1,310
1,172
10,917
11,182
2,827
671
84
449
87
620
917
3,396
647
118
328
153
1,189
961
4,883
1,363
163
388
163
1,494
1,312
4,018
710
84
264
96
1,593
1,272
4,019'
706
92
271
74
1,518
1,358
3,661'
607'
74
341
54
1,336'
1,248'
3,499
791
76
201
42
1,156
1,233
3,457
753
99
178
40
1,108
1,278
3,702
847
101
287
39
1,212
1,216
4.003
1,052
86
198
74
1,267
1,326
64 Other countries
65
Australia
66
All other
8,067
7,857
210
5,684
5,300
384
3,347
2,779
568
5,662
4,286
1,376
5,131'
4,209'
922
3,680
2,683
997
3,232'
2,465'
767
3,988
3,027
960
5,153
4,266
888
4,377
3.578
799
67 Nonmonetary international and regional organizations
International
Latin American regional
Other regional 5
5,957
5,273
419
265
4,454
3,747
587
120
5,821
4,806
894
121
4,565'
3,482'
927
157
4,699'
3,512
1,033
154'
5,081
3,958
960
164
4,520
3,606
762
152
3,889
2,897
788
204
6,830
5,561
850
420
3,819
2,336
994
488
24 Canada
7 s Latin America and Caribbean
76
Argentina
77
78
79
Brazil
30
British West Indies
31
Chile
3?
Colombia
33
Cuba
34
Ecuador
35
36
37
38
Netherlands Antilles
39
40
Peru
41
47
Venezuela
Other Latin America and Caribbean
43
44
China
45
46
47
48
49
50
51
5?
53
54
55
56
57
58
59
60
61
62
63
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea
Philippines
Thailand
Middle-East oil-exporting countries
Other Asia
Egypt
South Africa
Oil-exporting countries
Other Africa
68
69
70
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 " O t h e r
Western E u r o p e . "
A59
A60
3.18
International Statistics • September 1987
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States
Payable in U.S. Dollars
Millions of dollars, end of period
1986
Area and country
1983
1984
1987
1985
Nov.''
Dec.
Jan.
Feb.
Mar.'
Apr.
May.?
1 Total
391,312
400,162
401,608
417,669
444,257'
421,086'
417,258'
414,321
437,926
436,471
2 Foreign countries
391,148
399,363
400,577
417,423
441,273'
421,017'
417,081'
413,777
434,123
436,276
3 Europe
4
Austria
5
Belgium-Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
Greece
10
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 E u r o p e 2
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
99,014
433
4,794
648
898
9,157
1,306
817
9,119
1,356
675
1,243
2,884
2,230
2,123
1,130
56,185
1,886
596
142
1,389
106,413
598
5,772
706
823
9,124
1,267
991
8,848
1,258
706
1,058
1,908
2,219
3,171
1,200
62,566
1,964
998
130
1,107
106,528
734
8,127
757
1,176
9,555
1,761
792
8,378
2,427
712
681
1,722
2,335
3,574
1,539
58,691
1,816
600
225
927
107,347'
728'
7,503'
692'
947
11,369'
1,818'
648
9,042'
3,299'
654
706
1,459
1,945
3,049
1,541
58,282'
1,836'
540'
345
944
100,775'
641'
7,556'
650'
797
9,058'
2,269'
635
7,898'
2,077'
741
677
1,479
2,280
2,622
1,469
55,856'
1,775
522'
396
1,379
102,234'
549'
8,905'
624'
1,050
9,960'
1,725'
634
7,337'
2,090'
766
679
1,637
2,422
2,413'
1,436
56,387'
1,769
477'
401'
971
99,393
660
8,083
651
1,003
9,858
1,632
535
6,991
2,371
667
737
1,768
2,464
2,338
1,577
54,035
1,840
781
367
1,032
108,064
750
8,544
574
1,127
10,813
1,374
460
7,536
3,075
683
610
1,939
2,417
2,905
1,559
59,821
1,763
670
378
1,068
115,370
668
9,946
569
1,046
12,070
1,507
457
8,331
2,989
776
641
2,070
2,618
3,593
1,623
62,769
1,803
515
357
1,021
24 Canada
16,341
16,109
16,482
20,354
20,958'
20,749
19,186'
19,829
20,225
19,340
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
207,862
11,050
58,009
592
26,315
38,205
6,839
3,499
0
2,420
158
252
34,885
1,350
7,707
2,384
1,088
11,017
2,091
202,674
11,462
58,258
499
25,283
38,881
6,603
3,249
0
2,390
194
224
31,799
1,340
6,645
1,947
960
10,871
2,067
196,441
12,028
53,601
447
25,217
40,488
6,536
2,665
1
2,413
138
216
30,776
931
5,354
1,624
943
11,044
2,020
208,852'
12,089'
59,547'
418
25,666'
46,306'
6,543'
2,819
0
2,449'
140
198
30,607'
1,039
5,434'
1,643'
940
11,078'
1,938'
195,571'
12,114
52,090'
415
25,798'
41,128
6,475'
2,801
10'
2,425
133
199
30,289'
960
5,270
1,635'
937
11,028'
1,864
196,337'
12,211
52,952'
376
25,81CH"
41,074'
6,603'
2,743
1
2,422
145
199
29,999'
945'
5,204
1,626'
932
11,185'
1,910
199,037
12,162
53,679
532
26,082
42,774
6,412
2,692
6
2,338
135
192
29,817
992
5,543
1,593
959
11,282
1,845
209,127
12,114
62,753
740
26,214
42,946
6,398
2,679
9
2,381
120
189
30,086
1,202
5,769
1,595
957
11,065
1,910
204,300
12,334
57,778
1,242
25,734
44,011
6,321
2,650
9
2,372
115
184
30,077
1,072
4,791
1,599
962
11,046
2,005
67,837
66,316
66,212
86,192
96,198'
95,989'
91,767'
87,783
88,967
89,571
292
1,908
8,489
330
805
1,832
30,354
9,943
2,107
1,219
4,954
5,603
710
1,849
7,293
425
724
2,088
29,066
9,285
2,555
1,125
5,044
6,152
639
1,535
6,797
450
698
1,991
31,249
9,226
2,224
845
4,298
6,260
793
1,811
7,575
327
722
1,605
53,311
6,533
1,978
595
3,778
7,162
787
2,675
8,300'
321
718
1,635'
59,852
7,159'
2,208'
577
4,122
7,845
983
2,617
8,443
333
699
1,601'
58,319'
6,783
2,154'
521
5,483
8,053
873
2,890
9,225
325
679
1,521'
55,594'
6,161
2,127'
557
4,892
6,922
1,373
2,910
8,254
486
652
1,545
52,267
6,011
2,282
492
5,150
6,362
1,450
3,194
7,922
314
621
1,509
54,299
5,331
2,121
461
4,598
7,148
1,177
3,592
7,725
379
657
1,459
55,056
6,119
2,064
540
3,795
7,009
57 Africa
58
Egypt
59
Morocco
60
South Africa
61
Zaire
62
Oil-exporting countries 5
Other
63
6,654
747
440
2,634
33
1,073
1,727
6,615
728
583
2,795
18
842
1,649
5,407
721
575
1,942
20
630
1,520
4,737
560
621
1,586
27
690
1,253
4,621
567
598
1,531
28
688
1,208
4,618'
577
590
1,534
36
725
1,156
4,678'
593
585
1,548'
42
743
1,168
4,853
618
584
1,550
42
856
1,204
4,789
574
565
1,578
41
795
1,236
4,867
585
566
1,591
43
840
1,243
64 Other countries
65
Australia
66
All other
2,898
2,256
642
3,447
2,769
678
3,390
2,413
978
3,172
1,980
1,192
3,297
1,952
1,345
3,316'
2,081
1,235'
2,878
1,902
976
2,882
1,990
892
2,950
2,066
884
2,828
1,897
931
164
800
1,030
246
2,983
69'
178
544
3,804
195
25 Latin America and Caribbean
26
Argentina
27
Bahamas
28
Bermuda
29
Brazil
British West Indies
30
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 N o n m o n e t a r y international and regional
organizations 6
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 " O t h e r Latin America and C a r i b b e a n " 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
" O t h e r Western E u r o p e . "
Nonbank-Reported
3.19
Data
BANKS' OWN A N D DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the
United States
Payable in U.S. Dollars
Millions of dollars, end of period
1986'
Type of claim
1983
1984
1987'
1985
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May p
1 Total
426,215
433,078
430,489
417,669
478,221
421,086
417,258
445,903
437,926
436,471
2
3
4
5
6
7
8
391,312
57,569
146,393
123.837
47,126
76,711
63,514
400,162
62,237
156,216
124,932
49,226
75,706
56,777
401,608
60,507
174,261
116,654
48,372
68,282
50,185
417,669
61,305
188,812
120,313
53,300
67,013
47,238
444,257
63,950
211,759
122,747
57.299
65,447
45,801
421,086
61,794
192,595
121,036
54,376
66,660
45,662
417,258
61,709
190,911
120,287
55,526
64,760
44,352
414,321
62,737
190,070
117,063
53,652
63,411
44,450
437,926
65,450
206,812
120,636
57,394
63,241
45,029
436,471
62,354
203,516
125,916
60,309
65,607
44,685
34,903
2,969
32,916
3,380
28,881
3,335
33,964
4,413
31,582
3,402
26,064
23,805
19,332
24,044
20,551
5,870
5.732
6,214
5,508
7,630
37,715
37,103
28,487
25,616
25,449
46,337
40,714
38,102
46,671
n.a.
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 customers 2 . .
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 . . . .
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.
3.20
45,351
43,994
46,583
49,528
44,378
3. Principally negotiable time certificates of deposit and bankers acceptances.
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.
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
1986'
Maturity; by borrower and area
1 Total
2
3
4
5
6
7
8
9
10
11
1?
13
14
15
16
17
18
19
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
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other 2
1. Remaining time to maturity.
1983
1984
1987
1985
June
Sept.
Dec.
Mar.P
243,715
243,952
227,903
222,824
224,754
231,413
224,128
176,158
24,039
152,120
67,557
32,521
35,036
167,858
23,912
143,947
76,094
38,695
37,399
160,824
26,302
134,522
67,078
34,512
32,567
152,743
23,172
129,571
70,081
37,582
32,499
155,258
22,528
132,731
69,496
38,350
31,145
159,909
24,921
134,988
71,504
39,783
31,722
152,252
22,508
129,744
71,876
41,005
30,871
56,117
6,211
73,660
34,403
4,199
1,569
58,498
6,028
62,791
33,504
4,442
2,593
56,585
6,401
63,328
27,966
3,753
2,791
58,028
6,103
57,436
25,796
3,297
2,083
59,428
6,199
58,212
26,505
3,071
1,845
61,227
5,840
56,050
29,476
2,858
4,458
57,821
5,504
54,081
29,603
3,145
2,098
13,576
1,857
43,888
4,850
2,286
1,101
9,605
1,882
56,144
5,323
2,033
1,107
7,634
1,805
50,674
4,502
1,538
926
7,945
2,256
53,621
4,043
1,497
719
7,230
1,930
54,137
3,976
1,479
744
6,826
1,930
56,337
4,081
1,534
795
6,921
1,936
56,623
4,197
1,626
573
2. Includes nonmonetary international and regional organizations.
A61
A62
3.21
International Statistics • September 1987
CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 1 - 2
Billions of dollars, end of period
1985
Area or country
1982
1983
1986
1987
1984
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.
436.1
433.9
405.7
396.8
394.9
391.9
395.0'
391.7'
391.6'
391.5'
396.3'
179.6
13.1
17.1
12.7
10.3
3.6
5.0
5.0
72.1
10.4
30.2
167.8
12.4
16.2
11.3
11.4
3.5
5.1
4.3
65.3
8.3
29.9
148.1
8.7
14.1
9.0
10.1
3.9
3.2
3.9
60.3
7.9
27.1
146.7
8.9
13.5
9.6
8.6
3.7
2.9
4.0
65.7
8.1
21.7
152.0
9.5
14.8
9.8
8.4
3.4
3.1
4.1
67.1
7.6
24.3
148.5
9.3
12.3
10.5
9.8
3.7
2.8
4.4
64.6
7.0
24.2
156.5'
8.3
13.8
11.3
8.5
3.5
2.9
5.4
68.5
6.3'
28.0'
159.9
9.0
15.1
11.5
9.3
3.4
2.9
5.6
68.9
6.9'
27.4
158.8''
8.5
14.6
12.5
8.1
3.9
2.7
4.8
70.0
6.1
27.7
157.9''
8.4
13.8
11.7
9.0
4.6
2.4
5.5
71.8''
5.4
25.3
163.4'
9.1
13.4'
12.1
8.6
4.4
3.0
5.8
74.6'"
5.2
27.2''
13 Other developed countries
14
Austria
15
Denmark
16
Finland
17
Greece
18
Norway
19
Portugal
20
Spain
21
Turkey
22
Other Western Europe
23
South Africa
24
Australia
33.5
1.9
2.4
2.2
3.0
3.3
1.5
7.5
1.4
2.3
3.7
4.3
36.0
1.9
3.4
2.4
2.8
3.3
1.5
7.1
1.7
1.8
4.7
5.4
33.6
1.6
2.2
1.9
2.9
3.0
1.4
6.5
1.9
1.7
4.5
6.0
32.3
1.6
1.9
1.8
2.9
2.9
1.3
5.9
2.0
1.8
3.9
6.2
32.0
1.7
2.1
1.8
2.8
3.4
1.4
6.1
2.1
1.7
3.3
5.6
30.4
1.6
2.4
1.6
2.6
2.9
1.3
5.8
1.9
2.0
3.2
5.0
31.6
1.6
2.5
1.9
2.5
2.7
1.1
6.4
2.3
2.4
3.2
4.9
30.6
1.7
2.4
1.6
2.6
3.0
1.0
6.4
2.5
2.1
3.1
4.2
29.4
1.7
2.3
1.7
2.3
2.7
1.0
6.7
2.1
1.6
3.1
4.1
26.0'
1.7
1.7
1.4
2.3
2.4
.8
5.8
2.0
1.4''
3.0''
3.5
26.2
1.9
1.8
1.4''
2.1
2.1
.9
6.2
1.9
1.6
3.1
3.2
25 O P E C countries 3
26
Ecuador
27
Venezuela
28
Indonesia
29
Middle East countries
30
African countries
26.9
2.2
10.5
2.9
8.5
2.8
28.4
2.2
9.9
3.4
9.8
3.0
24.9
2.2
9.3
3.3
7.9
2.3
22.8
2.2
9.3
3.1
6.1
2.2
22.7
2.2
9.0
3.1
6.2
2.3
21.6
2.1
8.9
3.0
5.5
2.0
20.7
2.2
8.7
3.3
4.7
1.8
20.6
2.1
8.8
3.0
5.0
1.7
20.0
2.2'
8.7
2.8
4.6
1.7
19.6 r
2.2
8.6
2.5
4.5
1.7
20.2
2.1
8.7
2.2
5.5
1.6
1 Total
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
106.5
110.8
111.8
110.0
107.8
105.1
103.8'
101.7''
99.9'
99.5'
100.0'
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other Latin America
8.9
22.9
6.3
3.1
24.2
2.6
4.0
9.5
23.1
6.4
3.2
25.8
2.4
4.2
8.7
26.3
7.0
2.9
25.7
2.2
3.9
8.6
26.6
6.9
2.7
25.3
2.1
3.7
8.9
25.5
6.6
2.6
24.4
1.9
3.5
8.9
25.6
7.0
2.7
24.2
1.8
3.4
8.9
25.7'
7.0
2.3
24.1''
1.7
3.3
9.2
25.4''
7.1
2.2
23.9''
1.6
3.3
9.3
25.3''
7.2''
2.0
23.9'
1.5
3.3
9.5
25.3'
7.1
2.1
23.9'
1.4
3.1
9.5
25.6
7.3''
2.0
23.8
1.4
3.0
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
.2
5.3
.5
2.3
10.7
2.1
6.3
1.6
1.1
.3
5.2
.9
1.9
11.2
2.8
6.1
2.2
1.0
.7
5.1
.9
1.8
10.6
2.7
6.0
1.8
1.1
.3
5.5
.9
2.3
10.0
2.8
6.0
1.6
.9
1.1
5.1
1.1
1.5
10.4
2.7
6.0
1.7'
.9
.5
4.5
1.2
1.6
9.4
2.4
5.7
1.4
1.0
.6
4.3
1.2
1.3
9.5
2.2
5.6
1.3
.9
.6
3.7
1.3
1.6
8.7
2.0
5.7
1.1
.8
.6
4.3
1.3
1.4
7.3
2.1
5.4
1.0
.7
.4
4.9
1.2
1.5''
6.7
2.1
5.4
.9
.7
.9
5.4
1.8
1.4
6.2
1.9
5.4
.9
.6
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa 4
1.2
.7
.1
2.4
1.5
.8
.1
2.3
1.2
.8
.1
2.1
1.0
.8
.1
2.0
1.0
.9
.1
2.0
1.0
.9
.1
1.9
.9
.9
.1
1.9
.9
.9
.1
1.7
.7
.9
.1
1.6
.7
.9
.1
1.6
.6
.9
.1
1.4
52 Eastern Europe
53
U.S.S.R
54
Yugoslavia
55
Other
6.2
.3
2.2
3.7
5.3
.2
2.4
2.8
4.4
.1
2.3
2.0
4.3
.3
2.2
1.8
4.6
.2
2.4
1.9
4.2
.1
2.2
1.8
4.0
.3
2.0
1.7
4.0
.3
2.0
1.7
3.4
.1
1.9
1.4
3.2
.1
1.7
1.4
3.1
.1
1.6
1.3
56 Offshore banking centers
57
Bahamas
58
Bermuda
59
Cayman Islands and other British West Indies
60
Netherlands Antilles
61
Panama
62
Lebanon
63
Hong Kong
64
Singapore
65
Others 6
66.0
19.0
.9
12.8
3.3
7.5
.1
13.3
9.1
.0
68.9
21.7
.9
12.2
4.2
5.8
.1
13.8
10.3
.0
65.6
21.5
.9
11.8
3.4
6.7
.1
11.4
9.8
.0
63.9
21.1
.9
12.1
3.2
5.4
.1
11.4
9.7
.0
58.8
16.6
.8
12.3
2.3
6.1
.0
11.4
9.4
.0
65.4
21.4
.7
13.4
2.3
6.0
.1
11.5
9.9
.0
61.7 r
21.5
.7
11.3
2.3
5.9
.1
11.5''
8.4
.0
57.6''
17.3
.5
13.0
2.3
5.5
.1
9.5'
9.3
.0
62.7''
20.0
.4
13.2
1.9
6.8
.1
10.5'
9.7
.0
65.2'
22.5''
.7
14.5
1.8
5.1
.1
11.2
9.3
.0
65.6'
23.7'
.8
13.5'
1.7
5.5
.1
11.5
8.8
.0
66 Miscellaneous and unallocated 7
17.5
16.8
17.3
16.9
17.3
16.9
16.7
17.2
17.5
20.1
17.8
31 N o n - O P E C developing countries
1. The banking offices covered by these data are the U.S. offices and foreign
branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks.
Offices not covered include (1) U.S. agencies and branches of foreign banks, and
(2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are
adjusted to exclude the claims on foreign branches held by a U.S. office or
another foreign branch of the same banking institution. The data in this table
combine foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the
claims of U.S. offices in table 3.18 (excluding those held by agencies and branches
of foreign banks and those constituting claims on own foreign branches).
2. Beginning with June 1984 data, reported claims held by foreign branches
have been reduced by an increase in the reporting threshold for " s h e l l " branches
from $50 million to $150 million equivalent in total assets, the threshold now
applicable to all reporting branches.
3. Besides the Organization of Petroleum Exporting Countries shown individually, this group includes other members of O P E C (Algeria, Gabon, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well
as Bahrain and Oman (nor formally members of OPEC).
4. Excludes Liberia.
5. Includes Canal Zone beginning December 1979.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
Nonbank-Reported
3.22
Data
A63
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the
United States'
Millions of dollars, end of period
1987
1986
1983
Type, and area or country
1984
1985
Mar.
Sept.'
June
Mar.P
Dec.
1 Total
25,346
29,357
27,685'
26,346'
24,848'
25,183
25,385
25,432
2 Payable in dollars
3 Payable in foreign currencies
22,233
3,113
26,389
2,968
24,296'
3,389
22,589'
3,757
21,162'
3,686'
21,240
3,943
21,541
3,844
20,176
5,256
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
10,572
8,700
1,872
14,509
12,553
1,955
13,46c
11,257'
2,203
13,017'
10,75c
2,267
11,728'
9,637'
2,091'
12,285
9,908
2,376
12,134
9,694
2,440
12,562
10,140
2,422
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities
14,774
7,765
7,009
14,849
7,005
7,843
14,225
6,685
7,540
13,329
5,618
7,711
13,120
5,472
7,648
12,899
5,723
7,175
13,250
6,289
6,961
12,870
6,050
6,820
13,533
1,241
13,836
1,013
13,039
1,186
11,839
1,490
11,525
1,595
11,331
1,567
11,847
1,404
10,036
2,834
5,742
302
843
502
621
486
2,839
6,728
471
995
489
590
569
3,297
7,678
424
501
319
708
636
4,660
7,891
245
737
372
701
714
4,830
7,806
205
702
342
690
772
4,834
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
7,560'
329
857
434
745
620'
4,254
7,456'
44C
851
388
630
636'
4,167'
7,046'
39C
686
280
635
505'
4,252'
19
Canada
764
863
839
832
362
402
430
70
21
22
2.3
74
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,596
751
13
32
1,041
213
124
5,086
1,926
13
35
2,103
367
137
3,184
1,123
4
29
1,843
15
3
2,810
958
4
26
1,639
20
3
2,463
874
14
27
1,406'
30
3
2,283
863
4
28
1,270
18
5
1,969
621
4
32
1,160
22
3
2,366
668
0
26
1,388
30
3
77
28
29
Asia
Japan
Middle East oil-exporting countries 2
1,424
991
170
1,777
1,209
155
1,815
1,198
82
1,874'
1,267'
78
1,735'
1,264'
43
1,881
1,446
3
1,792
1,377
8
1,869
1,459
7
30
31
Africa
Oil-exporting countries 3
19
0
14
0
12
0
12
0
12
0
4
2
1
1
3
1
All other 4
27
41
50
32
104r
76
79
88
3,245
62
437
427
268
241
732
4,001
48
438
622
245
257
1,095
4,074
62
453
607
364
379
976
3,925
66
382
546
545
261
957
3,817'
58
358
561
586
284
864
4,367
75
370
637
613
361
1,104
4,420
99
338
693
493
384
1,279
4,414
84
279
598
374
481
1,298
32
33
34
35
36
37
38
39
Commercial liabilities
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
367
40
Canada
1,841
1,975
1,449
1,445
1,367'
1,312
1,386
1,387
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,473
I
67
44
6
585
432
1,871
7
114
124
32
586
636
1,088
12
77
58
44
430
212
1,107
26
218
64
7
256
364
1,242
10
294
45
35
235
488
846
37
172
43
45
197
207
850
19
132
59
48
210
215
1,147
28
285
73
88
182
316
48
49
50
Asia
Japan
Middle East oil-exporting countries 2
6,741
1,247
4,178
5,285
1,256
2,372
6,046
1,799
2,829
5,384
2,039
2,171
5,075
2,100
1,787
4,807
2,136
1,492
5,011
2,046
1,666
4,928
2,441
1,175
51
52
Africa
Oil-exporting countries 3
553
167
588
233
587
238
486
148
567
215
585
176
619
197
520
170
53
All other 4
921
1,128
982
983
1,053
982
963
474
5
1. For a description of the changes in the International Statistics tables, see
July 1979 BULLETIN, p. 550.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria.
4. Includes nonmonetary international and regional organizations.
5. Revisions include a reclassification of transactions, which also affects the
totals for Asia and the grand totals.
A64
International Statistics • September 1987
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
United States'
Reported by Nonbanking Business Enterprises in the
Millions of dollars, end of period
1986
Type, and area or country
1983
1984
1987
1985
Mar.
Sept.'
June
Dec.
Mar.P
1 Total
34,911
29,901
28,760'
31,404'
33,869'
33,879
32,839
34,369
2 Payable in dollars
3 Payable in foreign currencies
31,815
3,096
27,304
2,597
26,457'
2,302
29,217'
2,187
31,687'
2,182
31,186
2,693
30,245
2,594
31,358
3,011
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
Other financial claims
8
9
Payable in dollars
10
Payable in foreign currencies
23,780
18,496
17,993
503
5,284
3,328
1,956
19,254
14,621
14,202
420
4,633
3,190
1,442
18,774'
15,526'
14,911'
615
3,248
2,213
1,035
22,017'
18,633'
18,176'
457
3,384
2,291
1,093
24,726'
21,418'
20,863'
555
3,308'
2,287'
1,021
24,666
19,262
18,698
564
5,404
4,042
1,362
23,251
18,167
17,614
553
5,083
3,799
1,284
24,105
18,327
17,610
717
5,778
4,448
1,331
11 Commercial claims
12
Trade receivables
13
Advance payments and other claims
11,131
9,721
1,410
10,646
9,177
1,470
9,986
8,696
1,290
9,387
8,087
1,300
9,142
7,802
1,341
9,213
8,030
1,183
9,588
8,442
1,146
10,264
9,248
1,016
14
15
10,494
637
9,912
735
9,333
652
8,750
637
8,537
606
8,445
767
8,832
756
9,300
964
6,488
37
150
163
71
38
5,817
5,762
15
126
224
66
66
4,864
6,812'
10
184
223
61
74
6,007'
7,204'
10
217
174
61
166
6,331'
10,155'
11
257
148
17
177
9,328'
10,452
67
418
129
44
138
9,429
8,656
41
131
91
87
134
7,925
9,307
15
167
133
70
74
8,486
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
24
25
26
27
28
29
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
34
35
36
37
38
39
40
41
42
43
Japan
Middle East oil-exporting countries 2
Africa
Oil-exporting countries 3
All other
4
Commercial claims
Europe
Belgium-Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
5,989
3,988
3,260
4,020
4,429
3,956
4,056
3,815
10,234
4,771
102
53
4,206
293
134
8,216
3,306
6
100
4.043
215
125
7,846'
2,698
6
78
4,571
180
48
10,073
3,516
2
77
6,034
178
43
9,258'
3,315'
17
75
5,402
176
42
9,353
2,884
19
105
5,949
173
40
9,110
2,539
13
67
6,057
173
24
9,547
3,926
3
72
5,145
163
23
764
297
4
961
353
13
731'
475
4
619
350
2
776'
499
2
740
390
2
1,317
986
11
1,207
943
11
147
55
210
85
103
29
87
27
89
25
84
18
85
28
84
19
159
117
21
14
20
81
27
145
3,670
135
459
349
334
317
809
3,801
165
440
374
335
271
1,063
3,533
175
426
346
284
284
898
3,390
148
384
399
221
247
795
3,304
131
391
418
230
228
674
3,385
126
415
401
184
233
853
3,520
127
387
428
199
213
820
3,487
138
411
447
162
190
909
44
Canada
829
1,02!
1,023
1,061
965
950
909
1,813
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,695
8
190
493
7
884
272
2,052
8
115
214
7
583
206
1,753
13
93
206
6
510
157
1,592
27
82
217
7
388
172
1,611
24
148
193
29
323
181
1,687
29
132
207
23
316
192
1,861
29
158
229
55
388
219
1,697
11
125
209
23
415
155
52
53
54
Asia
Japan
Middle East oil-exporting countries 2
3,063
1,114
737
3,073
1,191
668
2,982
1,016
638
2,609
801
630
2,574
845
622
2,487
792
600
2,619
840
506
2,602
927
465
55
56
Africa
Oil-exporting countries 3
588
139
470
134
437
130
491
167
450
170
469
168
464
134
425
142
57
All other 4
286
229
257
244
237
234
215
241
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
3.24
Holdings
and Transactions
A65
FOREIGN TRANSACTIONS IN SECURITIES
Millions of dollars
1987
1987
1986
Jan.-May
Nov.
Dec.
Jan.
Mar.
Feb.
Apr.
Mayf
U.S. corporate securities
STOCKS
1
2
Foreign purchases
Foreign sales
3
4
81,995
77,054
148,090'
129,382'
Net purchases, or sales ( - )
4,941
Foreign countries
4,857
5
6
7
8
9
10
11
17.
13
14
15
16
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
2,057
-438
730
-123
-75
1,665
356
1,718
238
296
24
168
17
Nonmonetary international and
regional organizations
84
20,704
17,599
23,066'
18,003'
20,704
17,391
3,105
5,063'
3,312
3,651
3,204
5,026'
3,250
3,687
1,841'
656
19
69
177'
783
343
372
-230
2,638
1
61
1,028
332
-101
124
306
181
251
36
21
1,790
59
65
1,478
123
118
120
351
675
47
334
-90
1.686
45
185
62
-36
12,117'
8,281'
9,843
6,559
8,961
6,822
101,703
84,908
12,033
12,086
14,096
12,320
17,628'
15,964'
18,708'
16,795
-52
1,776
1,664'
18,916'
16,911
-19
1,696
1,744'
9,559
459
341
936
1,560
4,826
807
3,029
976'
3,876'
297
373
7,194
1,698
114
458
1,036
3,283
624
1,381
-338
7,358
119
573
-486'
-69
-3
-50
-236
-114
41
367
-92
80
23
48
557
113
24
14
47
363
102
220
267
450
17
84
1,061
140
62
53
101
647
100
308
136
91'
-1
49
1,786
446
16
91
100
996
-118
331
-175
1,153
15
212
-208
-116
-34
80
-80
-100
11,879
7,741'
9,308
7,180'
8,021
5,457
37
19,602
15,951
BONDS2
18
19
Foreign purchases
Foreign sales
86,587
42,455
20
Net purchases, or sales (—)
21
Foreign countries
72
73
74
75
76
77
78
29
30
31
37
33
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East 1
Other Asia
Africa
Other countries
34
Nonmonetary international and
regional organizations
122,953'
72,499'
48,250
34,299
9,278'
6,110'
44,132
50,454'
13,951
3,167'
4,138'
2,127'
2,565
3,836'
3,283
2,139
44,227
49,607'
13,764
2,848'
4,242'
2,216'
2,179
3,994'
3,107
2,269
40,047
210
2,001
222
3,987
32,762
190
498
-2,648
6,091
11
38
39,126'
389'
-251
387
4,529
33,706'
548
1,468
-2,961
11,270'
16
139
10,898
90
-20
117
934
9,823
634
633
-88
1,734
13
-61
2,095'
328
-108
113
204
1,411'
154
66
-355
902
3
-15
3,065'
32
-19
52
-117
2,761'
153
102
-258
1,174
3
3
1,372'
6
-213
- 7
66
1,389'
-103
103
-57
917
0
-16
1,402
17
145
-29
78
1,178
364
98
-139
469
1
-16
3,600'
81
198
69
558
2,931'
190
65'
-12
169
3
-22
2,833
-22
-121
47
50
2,809
161
123
62
-73
1
0
1,690
7
-29
38
182
1,516
23
245
58
252
7
- 6
-104
-88
386
-157'
176
-130
-95
847
187
319
Foreign securities
35
36
37
Stocks, net purchases, or sales ( - )
Foreign purchases
Foreign sales
-3,941
20,861
24,803
-1,912'
48,787
50,699'
-1,961
34,227
36,187
331'
4,095'
3,764'
63'
4,570'
4,507'
-204'
4,906'
5,110'
-561
7,175
7,736
-708'
7,015'
7,722
-1156
7,120
8,276
668
8,011
7,343
38
39
40
Bonds, net purchases, or sales ( - )
Foreign purchases
Foreign sales
-3,999
81,216
85,214
-3,361'
166,781'
170,142'
-1,594
83,131
84,725
-692'
12,666'
13,358'
-487'
16,332'
16,818'
319'
11,427
11,108'
-70'
15,822'
15,891
-545'
16,65C
17,195'
-585
19,012
19,597
-712
20,221
20,933
41
Net purchases, or sales (—), of stocks and bonds . . . .
-7,940
-5,273'
-3,555
-360'
-424'
114'
-631'
-1,253'
-1,741
-44
42
Foreign countries
-9,003
-6,357'
-4,196
-362'
-873'
27'
-711'
-1,520'
-1,876
-62
43
44
45
46
47
48
Europe
Canada
Latin America and Caribbean
Asia
Africa
Other countries
-9,887
-1,686
1,797
659
75
38
-17,893'
-875
3,479'
10,858'
52
-1,977
-6,698
-1,567
540
4,041
31
-542
-1,018'
-106
16
760'
4
-19
-1,401'
-264
233'
1,465'
3
-909
-226'
-396
389
168
4
34'
-1,219'
-566
104
925
0
45
-682'
-202
-416'
306
-1
-524
-2,684
-3
259
636
8
-91
-1,887
-400
204
2,007
20
- 6
49
Nonmonetary international and
regional organizations
1,063
1,084'
641
142'
80
267'
135
18
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-
2
449
ties sold abroad by U.S. corporations organized to finance direct investments
abroad.
A66
3.25
International Statistics • September 1987
MARKETABLE U.S. TREASURY BONDS A N D NOTES
Foreign Transactions
Millions of dollars
1987
Country or area
1985
1987
1986
1986
Jan.May
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Transactions, net purchases or sales ( - ) during period 1
1 Estimated total 2
29,208
20,061'
4,312
-2,258'
1,006'
-436
96 l r
7,028'
-2,990
-252
2 Foreign countries 2
28,768
21,164'
8,894
-300'
-474'
580
1,846'
4,145'
-1,405
3,728
4,303
476
1,917
269
976
773
-1,810
1,701
0
-188
16,866'
349
7,531
1,283
132
310
4,648
2,613'
0
881
11,030
208
6,366
-206
411
3,043
-89
1,327
-31
1,878
-727
-53
700
38
-70
-498
-335
-510
0
19
1,016'
75
-487
-58
-236
-428
1,036
1,114'
0
297
1,376
59
581
-366
-229
-135
1,227
236
3
846
1,751'
211
1,118
41
440
473
-15'
-518
0
-416'
5,832'
-35
2,141
-212
334
1,641
328'
1,635
0
709'
375
-35
1,106
-22
32
652
-1,089
-230
-40
703
1,696
8
1,420
352
-166
413
-540
204
6
37
4,315
248
2,336
1,731
19,919
17,909
112
308
875'
-95
1,128'
-159
1,341'
-77'
-54
1,255
-1,760
113
-698
-1,176
-2,800
-3,869
-19
566
76'
-139
7'
208
-152
188
2
482
96'
29
95'
-28
-2,067
-2,086
-14
198
-1,006
-33
-445
-528
-922
-76
6
280
-290
18
373'
-682
1,231
1,767
-34
-396
-62
102
-156
-8
-2,378'
-2,457'
12
32
-30
14
-176
133
-2,880
-2,561
-15
442
-372
11
-293
-90
2,149
-541
11
208
442
-436
18
-1,105
-1,430
157
-4,583
-3,584
11
-1,958
-2,010
0
1,478
1,412
0
-1,016
-1,070
0
-885'
-886
0
2,883'
2,833'
11
-1,585
-1,347
0
-3,980
-3,114
0
28,768
8,135
20,631
21,164'
14,380'
6,787'
8,894
14,944
-6,050
-300'
133
-433'
-474'
309'
-782
580
1,498
-918
1,846'
834
1,012
4,145'
5,837
-1,691'
-1,405
2,404
-3,810
3,728
4,371
-643
-1,547
7
-1473
5
-941
19
-1,014
1
-21
0
-721
1
-962
1
226
17
-120
0
636
0
3 Europe 2
4
Belgium-Luxembourg
5
Germany 2
6
Netherlands
7
Sweden
8
Switzerland 2
9
United Kingdom
10
Other Western E u r o p e
11
Eastern Europe
12 Canada
13
14
15
16
17
18
19
20
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
All other
21 Nonmonetary international and regional organizations
22
International
23
Latin American regional
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 one 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 denominated in foreign residents publicly
issued to private foreign residents.
3. Comprises Bahrain, Iran, Iraq, Kuwait, O m a n , Qatar, Saudi Arabia, and
United Arab Emirates (Trucial States).
4. Comprises Algeria, Gabon, Libya, and Nigeria,
Interest and Exchange
3.26
Rates
A67
DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Percent per annum
Rate on June 30, 1987
Rate on June 30, 1987
Country
Percent
Austria. .
Belgium .
Brazil...
Canada..
Denmark
3.5
7.75
49.0
8.59
7.0
Country
Month
effective
Jan.
May
Mar.
June
Oct.
1987
1987
1981
1987
1983
Percent
France 1
Germany, Fed. Rep. of
Italy
Japan
Netherlands
1. As of the end of February 1981, the rate is that at which the Bank of France
discounts Treasury bills for 7 to 10 days.
2. Minimum lending rate suspended as of Aug. 20, 1981.
NOTE. Rates shown are mainly those at which the central bank either discounts
3.27
Rate on June 30, 1987
Country
7.75
3.5
11.5
2.5
4.5
Month
effective
Mar.
Mar.
Mar.
Feb.
Mar.
1987
1986
1987
1987
1986
Norway
Switzerland
United Kingdom 2 .
Venezuela
Percent
Month
effective
8.0
3.5
June 1983
Jan. 1987
Oct. 1985
or makes advances against eligible commercial paper and/or government commercial banks or brokers. For countries with more than one rate applicable to such
discounts or advances, the rate shown is the one at which it is understood the
central bank transacts the largest proportion of its credit operations.
FOREIGN SHORT-TERM INTEREST RATES
Percent per annum, averages of daily figures
1987
1986
Country, or type
1
2
3
4
5
6
7
8
9
10
1984
1985
1986
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
Eurodollars
United Kingdom
Canada
Germany
Switzerland
10.75
9.91
11.29
5.96
4.35
8.27
12.16
9.64
5.40
4.92
6.70
10.87
9.18
4.58
4.19
6.23
11.30
8.34
4.80
4.08
6.10
10.98
7.95
4.45
3.63
6.32
10.79
7.44
3.94
3.58
6.37
9.90
7.14
3.97
3.93
6.73
9.72
7.62
3.85
3.65
7.25
8.79
8.22
3.73
3.63
7.11
8.85
8.40
3.67
3.77
Netherlands
France
Italy
Belgium
Japan
6.08
11.66
17.08
11.41
6.32
6.29
9.91
14.86
9.60
6.47
5.56
7.68
12.60
8.04
4.96
6.03
7.92
11.40
7.39
4.40
5.58
8.49
11.39
7.88
4.23
5.31
8.36
11.13
7.75
3.98
5.38
7.85
10.65
7.49
4.00
5.31
7.87
10.03
7.21
3.92
5.11
8.09
10.15
7.13
3.77
5.15
8.18
10.67
6.78
3.71
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 1987
FOREIGN EXCHANGE RATES
Currency units per dollar
1987
1984
Country/currency
1985
1986
Jan.
Feb.
Mar.
Apr.
May
June
87.937
20.005
57.749
1841.50
1.2953
2.3308
10.354
70.026
20.676
59.336
6205.10
1.3658
2.9434
10.598
67.093
15.260
44.662
13.051
1.3896
3.4615
8.0954
66.09
13.087
38.616
15.58
1.3605
3.7314
7.0591
66.77
12.833
37.789
18.08
1.3340
3.7314
6.8939
68.17
12.905
38.029
20.56
1.3194
3.7314
6.9166
71.19
12.739
35.562
22.59
1.3183
3.7314
6.8388
71.42
12.574
37.091
n.a.
1.3411
3.7314
6.7333
71.79
12.793
37.712
n.a.
1.3387
3.7314
6.8555
6.0007
8.7355
2.8454
112.73
7.8188
11.348
108.64
6.1971
8.9799
2.9419
138.40
7.7911
12.332
106.62
5.0721
6.9256
2.1704
139.93
7.8037
12.597
134.14
4.6419
6.2007
1.8596
134.80
7.7698
13.029
143.90
4.5556
6.0760
1.8239
133.88
7.7952
13.062
145.93
4.5102
6.1091
1.8355
134.68
7.8017
12.924
145.54
4.4227
6.0332
1.8125
133.502
7.8023
12.8224
147.49
4.3604
5.9748
1.7881
133.35
7.8049
12.666
149.59
4.4281
6.0739
1.8189
136.06
7.8080
12.837
147.25
1756.10
237.45
2.3448
3.2083
57.837
8.1596
147.70
1908.90
238.47
2.4806
3.3184
49.752
8.5933
172.07
1491.16
168.35
2.5830
2.4484
52.456
7.3984
149.80
1317.17
154.83
2.5701
2.0978
53.605
7.1731
142.90
1297.74
153.41
2.5418
2.0592
54.815
7.0067
141.62
1305.90
151.43
2.5230
2.0731
56.333
6.9335
141.48
1292.%
143.00
2.4861
2.0447
57.751
6.7781
140.339
1290.80
140.48
2.4759
2.0154
57.639
6.6632
139.18
1316.50
144.55
2.5078
2.0490
58.686
6.7147
142.12
2.1325
69.534
807.91
160.78
25.428
8.2706
2.3500
39.633
23.582
133.66
2.2008
45.57
861.89
169.98
27.187
8.6031
2.4551
39.889
27.193
129.74
2.1782
43.952
884.61
140.04
27.933
7.1272
1.7979
37.837
26.314
146.77
2.1510
47.70
862.86
129.54
28.578
6.6188
1.5616
35.304
26.037
150.54
2.1410
47.97
857.38
128.62
28.662
6.5016
1.5403
35.056
25.933
152.80
2.1418
48.21
856.11
128.86
28.823
6.4202
1.5391
34.681
25.881
159.23
2.1350
49.55
845.00
126.975
28.902
6.3210
1.4968
33.863
25.695
162.99
2.1202
49.87
832.53
125.28
28.988
6.2606
1.4705
32.354
25.629
166.66
2.1176
49.41
818.39
126.33
29.171
6.3482
1.5085
31.226
25.779
162.88
32 United S t a t e s / d o l l a r
138.19
143.01
112.22
101.13
99.46
98.99
97.09
96.05
97.78
1. Value in U.S. cents.
2. Index of weighted-average exchange value
currencies of 10 industrial countries. The weight for
1972-76 average world trade of that country divided
all 10 countries combined. Series revised as of
of U.S. dollar against the
each of the 10 countries is the
by the average world trade of
August 1978 (see FEDERAL
1
2
3
4
5
6
7
Australia/dollar
Austria/schilling
Belgium/franc
Brazil/cruzeiro
Canada/dollar
China, P.R./yuan
Denmark/krone
8
9
10
11
12
13
14
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
Hong Kong/dollar
India/rupee
Ireland/pound 1
15
16
17
18
19
20
31
Italy/lira
Japan/yen
Malaysia/ringgit
Netherlands/guilder
New Zealand/dollar 1
Norway/krone
Portugal/escudo
22
23
2.4
25
26
27
28
29
30
31
Singapore/dollar
South Africa/rand'
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/point 1
MEMO
RESERVE B U L L E T I N , v o l . 6 4 , A u g u s t 1 9 7 8 , p . 7 0 0 ) .
3. Currency reform.
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.
69
Guide to Tabular Presentation,
Statistical Releases, and Special Tables
GUIDE
TO TABULAR
Symbols
c
e
p
r
*
and
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
List Published
obligations of the Treasury. "State and local government"
also includes municipalities, special districts, and other political subdivisions.
In some of the tables details do not add to totals because of
rounding.
RELEASES
Semiannually,
with Latest
Bulletin
Reference
Anticipated schedule of release dates for periodic releases
SPECIAL
Irregularly,
with Latest
Bulletin
June 1987
A89
Reference
and liabilities of commercial banks, March 31, 1986
and liabilities of commercial banks, June 30, 1986
and liabilities of commercial banks, September 30, 1986
and liabilities of commercial banks, December 31, 1986
and liabilities of U.S. branches and agencies of foreign banks,
and liabilities of U.S. branches and agencies of foreign banks,
and liabilities of U.S. branches and agencies of foreign banks,
and liabilities of U.S. branches and agencies of foreign banks,
of lending at commercial banks, August 1986
of lending at commercial banks, November 1986
of lending at commercial banks, February 1987
of lending at commercial banks, May 1987
Special
Page
TABLES
Published
Assets
Assets
Assets
Assets
Assets
Assets
Assets
Assets
Terms
Terms
Terms
Terms
Issue
tables begin on next
page.
June 30, 1986
September 30, 1986
December 31, 1986
March 31, 1987
June
June
July
July
December
March
May
August
December
February
May
September
1987
1987
1987
1987
1986
1987
1987
1987
1986
1987
1987
1987
A70
A76
A70
A76
A76
A70
A76
A70
A70
A70
A70
A70
A70
4.23
Special Tables • September 1987
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 4-8, 1987'
A. Commercial and Industrial Loans 2
Characteristic
Amount
of loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
Weighted
Loan rate (percent)
maturity-'
Days
average
effective 4
Standard
quartile
range 6
Loans
made
under
commitment
(percent)
Participation
loans
(percent)
ALL BANKS
Overnight 8
12,546,920
6,226
*
7.71
.07
7.39-7.92
83.3
2 One month and under
3
Fixed rate
4
Floating rate
8,542,289
7,107,176
1,435,113
730
1,161
257
15
15
18
7.91
7.78
8.55
.09
.07
.12
7.47-8.10
7.45-7.99
7.80-9.12
78.9
79.1
77.8
9.3
9.9
6.0
5 Over one month and under a year . . .
6
Fixed rate
7
Floating rate
9,707,040
3,595,494
6,111,546
116
105
124
153
99
184
8.94
8,73
9.07
.16
.22
.14
8.05-9.75
7.83-9.38
8.30-9.75
71.1
65.0
74.6
7.8
9.6
6.7
9,016,066
946,250
8,069,816
228
494
215
*
*
8.54
7.54
8.65
.15
.52
.12
7.63-9.38
7.35-8.00
7.83-9.38
68.9
91.7
66.2
4.5
10.5
3.8
11 Total short term
39,812,315
291
53
8.24
.13
7.53-8.77
76.1
5.9
12 Fixed rate (thousands of dollars) . . . .
1-24
13
14
25-49
15
50-99
16
100-499
17
500-999
18
1000 and over
24,040,604
232,461
125,402
164,268
403,193
343,933
22,771,346
541
7
32
70
188
664
7,907
21
100
102
123
83
54
17
7.87
11.34
10.47
11.48
9.40
8.20
7.76
.11
.24
.23
.40
.22
.14
.05
7.45-8.06
10.25-12.46
9.65-11.35
9.36-11.83
8.24-9.96
7.76-8.87
7.45-8.01
80.0
20.1
23.0
43.1
66.3
82.3
6.4
.2
.1
7.7
6.3
4.4
6.5
19 Floating rate (thousands of d o l l a r s ) . . . .
20
1-24
21
25-49
22
50-99
23
100-499
24
500-999
25
1000 and over
15,771,712
441,256
491,451
829,119
2,832,086
1,276,096
9,901,705
171
10
33
67
191
642
4,708
150
155
144
169
164
151
143
8.81
10.17
9.81
9.57
9.27
9.07
8.47
.13
.15
.11
.10
.06
.06
.12
8.17-9.58
9.38-10.79
9.11-10.47
8.84-10.11
8.51-9.92
8.30-9.65
7.59-9.11
70.1
68.5
71.0
73.3
76.9
79.9
66.6
26 Total long term
5,382,322
242
51
8.92
.14
8.03-9.79
81.7
27 Fixed rate (thousands of dollars) . . . .
28
1-99
29
100-499
30
500-999
31
1000 and over
1,048,728
143,720
102,823
66,977
735,208
116
17
176
667
4,799
60
39
51
49
66
8.94
11.22
10.20
9.24
8.29
.33
.37
.20
.21
.37
7.60-10.24
10.00-11.85
9.65-11.02
8.84-9.92
7.38-8.75
68.5
13.8
15.7
37.7
89.4
6.6
3.0
.9
3.6
8.4
32 Floating rate (thousands of d o l l a r s ) . . . .
33
1-99
34
100-499
35
500-999
36
1000 and over
4,333,595
268,137
588,187
248,699
3,228,572
330
29
203
668
5,285
48
42
49
47
49
8.92
10.08
9.34
9.01
8.74
.13
.13
.09
.13
.12
8.24-9.65
9.31-10.75
8.57-9.92
8.30-9.58
7.90-9.58
84.9
44.5
57.7
84.3
93.2
12.9
1.3
4.9
17.8
14.9
1
8 Demand 9
9
Fixed rate
Floating rate
10
*
18.2
5.3
1.4
1.6
1.8
3.9
9.9
5.7
Months
Loan rate (percent)
Days
Prime r a t e "
Effective 4
Nominal 10
LOANS M A D E BELOW PRIME12
Overnight 8
One month and under
Over one month and under a year . . .
Demand 9
*
10,989,619
6,713,199
3,146,517
3,044,396
9,676
4,475
489
2,389
14
114
7.57
7.62
7.76
7.42
7.30
7.35
7.53
7.19
8.00
8.00
8.08
8.00
86.8
81.5
79.9
38.3
4.9
9.6
10.2
2.6
41 Total short term
23,893,731
2,311
23
7.59
7.33
8.01
78.2
6.6
42 Fixed rate
43 Floating rate
19,885,597
4,008,134
3,511
857
13
126
7.59
7.57
7.33
7.34
8.00
8.05
83.5
52.3
7.4
3.0
37
38
39
40
*
Months
44 Total long term
1,682,269
1,476
50
7.66
7.43
8.09
45 Fixed rate
46 Floating rate
505,978
1,176,291
2,151
1,300
67
43
7.48
7.73
7.31
7.49
8.00
8.12
For notes see end of table.
14.1
96.4
97.0
5.4
17.8
Financial Markets
4.23
A71
Continued
A. Commercial and Industrial Loans
Characteristic
Amount
of loans
(thousands
of dollars)
Continued
Average
size
(thousands
of dollars)
Days
Loans
made
under
commit-
Loan rate (percent)
Weighted
average
maturity 3
Weighted
average
effective 4
Standard
error 5
quartile
range 6
(percent)
Participation
loans
(percent)
Most
common
base
pricing
rate 7
LARGE B A N K S
1 Overnight 8
9,774,641
9,486
*
7.75
.09
7.45-8.00
80.3
3.0
Fed funds
2 One month and under
3
Fixed rate
4
Floating rate
6,271,095
5,498,448
772,647
2,832
5,533
633
15
15
17
7.80
7.74
8.26
.08
.07
.10
7.47-8.05
7.46-7.98
7.70-8.32
80.8
79.7
89.1
9.4
10.1
4.5
Domestic
Domestic
Prime
5 Over one month and under a year
6
Fixed rate
7
Floating rate
4,830,878
2,012,892
2,817,986
500
1,362
344
133
88
166
8.55
8.40
8.65
.12
.13
.17
7.75-9.20
7.76-9.20
7.71-9.38
81.8
71.7
89.0
6.5
8.5
5.2
Prime
Domestic
Prime
8 Demand 9
9
Fixed rate
10
Floating rate
5,868,748
513,474
5,355,274
563
1,967
527
8.32
7.08
8.44
.25
.96
.21
7.50-9.04
7.34-7.80
7.56-9.11
59.9
88.3
57.2
2.0
6.7
1.6
Prime
Other
Prime
11 Total short term
26,745,362
1,146
36
8.03
.11
7.50-8.33
76.2
5.0
Fed funds
12 Fixed rate (thousands of dollars) .
13
1-24
14
25-49
15
50-99
16
100-499
17
500-999
18
1000 and over
17,644,223
7,398
7,156
15,582
90,627
144,189
17,379,271
4,723
9
33
67
218
660
9,506
16
103
84
69
47
37
15
7.79
10.00
9.71
9.17
8.62
8.25
7.78
.06
.24
.36
.14
.13
.08
.06
7.46-8.06
9.06-10.52
8.80-10.43
8.33-9.57
8.06-9.31
7.79-8.60
7.46-8.06
79.9
39.3
41.5
45.2
71.5
85.1
79.9
5.9
1.6
.7
.0
1.4
.0
5.9
Fed funds
Prime
Prime
Prime
Prime
Domestic
Fed funds
19 Floating rate (thousands of dollars).
20
1-24
21
25-49
22
50-99
23
100-499
24
500-999
25
1000 and over
9,101,140
79,047
104,122
194,756
886,272
560,175
7,276,768
464
11
34
67
203
654
6,100
128
164
148
169
140
138
124
8.50
9.77
9.64
9.42
9.16
9.00
8.33
.18
.21
.17
.15
.11
.09
.18
7.59-9.11
8.84-10.47
8.84-10.47
8.58-9.96
8.31-9.71
8.30-9.58
7.50-8.84
69.1
81.0
80.3
84.2
81.9
85.1
65.7
3.2
.2
.5
1.0
1.8
3.9
3.5
Prime
Prime
Prime
Prime
Prime
Prime
Prime
26 Total long term
3,649,401
1,284
52
8.67
.13
7.65-9.42
94.0
13.1
Prime
561,262
5,812
11,454
7,760
536,236
1,422
25
176
650
6,220
70
43
60
48
71
8.36
10.98
10.42
8.61
8.29
.59
.76
.26
.69
.62
7.36-8.75
9.65-12.40
9.92-10.88
7.87-9.06
7.36-8.75
91.5
35.2
37.8
78.7
93.5
3.5
4.3
.0
.0
3.7
Foreign
Prime
Other
Fed Funds
Foreign
3,088,138
36,580
155,661
132,629
2,763,268
1,261
33
225
660
6,083
49
35
45
53
49
8.73
9.61
9.11
8.97
8.69
.11
.17
.07
.27
.11
7.90-9.44
8.84-10.20
8.33-9.58
8.30-9.44
7.76-9.38
94.4
71.1
88.2
91.9
95.2
14.8
3.8
8.0
18.4
15.2
Prime
Prime
Prime
Prime
Prime
:
Months
27 Fixed rate (thousands of dollars)
28
1-99
29
100-499
30
500-999
31
1000 and over
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1000 and over
Loan rate (percent)
Prime rate 11
Days
Effective
4
Nominal
10
LOANS MADE BELOW PRIME12
Overnight 8
One month and under
Over one month and under a year
Demand 9
8,342,226
5,202,665
2,282,506
2,529,629
11,326
6,810
2,121
6,112
15
115
7.60
7.62
7.68
7.39
7.33
7.36
7.45
7.15
8.00
8.00
8.00
8.00
84.6
79.9
83.5
26.3
3.6
9.7
6.7
1.1
41 Total short term
18,357,026
6,139
22
7.59
7.33
8.00
75.1
5.3
42 Fixed rate
43 Floating rate
14,969,505
3,387,521
8,008
3,022
12
133
7.61
7.50
7.34
7.27
8.00
8.00
81.7
46.1
6.1
2.0
37
38
39
40
Months
44 Total long term
1,372,919
5,304
51
7.59
7.37
8.00
99.7
12.4
45 Fixed rate . . . .
46 Floating rate . .
365,728
1,007,191
6,696
4,931
78
42
7.41
7.65
7.27
7.41
8.00
8.00
100.0
99.6
.0
16.9
For notes see end of table.
A72
4.23
Special Tables • September 1987
TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 4-8, 1987'—Continued
A. Commercial and Industrial Loans — Continued 2
Characteristic
Amount
of loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
Weighted
average
maturity 3
Days
Loan rate (percent)
Weighted
average
effective 4
Standard
Interquartile
range 6
Loans
made
under
commitment
(percent)
Participation
loans
(percent)
OTHER BANKS
1 Overnight 8
2 One month and under
3
Fixed rate
4
Floating rate
2,271,194
1,608,728
662,466
239
314
152
15
14
19
8.21
7.93
8.90
7.46-8.57
7.45-8.01
8.30-9.66
73.5
77.1
64.6
8.7
9.2
7.6
5 Over one month and under a year
6
Fixed rate
7
Floating rate
4,876.162
1,582,602
3,293,560
66
172
114
200
9.33
9.16
9.42
8.30-9.89
7.98-9.85
8.77-9.89
60.4
56.4
62.3
9.0
11.0
3,147.318
432.777
2,714,542
108
262
99
8.30-9.65
7.36-8.30
8.30-9.92
85.6
95.7
84.0
9.0
14.9
9.06
8 Demand 9
9
Fixed rate
10
Floating rate
11 Total short term
8.66
7.64-9.38
75.8
34
100
103
128
93
67
23
8.07
11.38
10.52
11.72
9.62
8.16
7.69
7.45-8.13
10.38-12.47
9.65-11.58
9.39-12.13
8.26-10.47
7.64-9.04
7.42-7.96
80.5
19.5
16.8
20.7
34.8
52.6
89.7
170
154
143
168
172
159
177
9.22
10.25
9.85
9.61
9.32
9.13
8.85
8.32-9.89
9.38-10.92
9.17-10.47
8.87-10.20
8.57-9.92
8.30-9.65
8.30-9.65
71.4
65.8
68.6
70.0
74.6
75.9
69.3
13,066,953
115
12 Fixed rate (thousands of dollars) .
13
1-24
14
25-49
15
50-99
16
100-499
17
500-999
18
1000 and over
6,396,381
225,064
118,246
148.686
312,566
199,744
5,392,075
157
7
32
70
19 Floating rate (thousands of dollars).
20
1-24
21
25-49
22
50-99
23
100-499
24
500-999
25
1000 and over
6,670,572
362,209
387,329
634,363
1,945,814
715,920
2,624,937
92
9
33
67
185
633
26 Total long term
1,732,922
89
9.44
8.30-9.96
55.8
8.6
487,466
137,907
91,369
59,217
198,972
56
17
176
669
2,971
9.61
11.23
10.17
9.32
8.31
8.06-10.75
10.00-11.85
9.65-11.02
8.84-9.92
7.58-8.75
42.0
12.9
13.0
32.3
78.4
10.1
2.9
1.0
4.0
1,245,456
231,557
432,526
116,069
465,304
116
28
196
678
2,969
9.38
10.15
9.43
9.05
9.03
8.33-9.92
9.38-11.02
8.83-9.92
8.30-9.65
8.30-9.84
61.2
181
667
5,126
7.9
.1
.1
8.5
7.7
7.5
8.4
8.0
1.7
1.9
2.1
4.9
14.6
11.8
Months
27 Fixed rate (thousands of dollars)
28
1-99
29
100-499
30
500-999
31
1000 and over
32 Floating rate (thousands of dollars)
33
1-99
34
100-499
35
500-999
36
1000 and over
Loan rate (percent)
Effective
Nominal
40.3
46.8
75.6
81.4
8.0
.9
3.8
17.0
13.0
Prime rate 11
Days
4
21.1
10
LOANS MADE BELOW PRIME12
37
38
39
40
Overnight 8
One month and under
Over one month and under a year
Demand 9
2,647,393
1,510,534
864,011
514,767
6,631
2,052
161
598
41 Total short term
5,536,705
753
42 Fixed rate
43 Floating rate
4,916,092
620,613
1,296
175
44 Total long term
309,351
45 Fixed rate . . . .
46 Floating rate . .
140,250
169,101
For notes see end of table.
11
113
17
103
7.49
7.59
7.97
7.57
7.22
7.33
7.72
7.36
8.00
8.01
8.31
8.02
93.7
87.1
70.4
97.3
9.0
9.6
19.6
10.0
7.60
7.34
8.05
88.6
10.9
7.55
7.96
7.29
7.70
8.01
8.35
88.9
85.7
11.2
8.4
7.66
8.23
7.42
7.94
84.1
777
241
87.1
81.6
19.6
23.4
Financial Markets
4.23
A73
Continued
B. Construction and Land Development Loans
Loan rate (percent) 1 3
Characteristic
Amount
of loans
(thousands
of dollars)
Average
size
(thousands
of dollars)
Weighted
average
maturity
(months) 3
Weighted
average
effective 4
Standard
error 5
Loans
made under
commitment
(percent)
Interquartile
range 6
Participation
loans
(percent)
ALL BANKS
2,605,961
161
16
9.13
.15
8.42-9.59
71.7
20.6
1-24
25-49
50-99
803,407
35,897
33,910
69,670
133
9
38
80
7
9
20
8.70
11.06
10.32
.36
.31
.28
8.03-9.59
10.25-12.13
10.47-10.52
52.7
76.5
47.3
100-499
500 and over
27,240
636,690
187
10,274
27
21
11.85
9.39
8.10
.54
.39
.36
10.52-14.53
7.76-10.47
7.10-8.84
39.2
63.7
52.6
2.5
.0
.8
.0
.0
3.1
8 Floating rate (thousands of dollars) . .
9
1-24
25-49
10
50-99
11
100-499
1?
500 and over
13
1,802,554
54,012
52,700
100,369
275,807
1,319,666
177
10
34
70
208
3,188
9.33
10.15
9.71
9.85
9.49
9.20
.07
.14
.10
.09
.08
.09
9.11-9.65
9.38-10.47
9.23-10.38
9.24-10.47
9.11-9.92
8.84-9.38
80.2
77.6
73.1
63.6
69.3
84.1
28.7
1.6
2.4
1.6
12.1
36.4
By type of construction
14 Single family
15 Multifamily
16 Nonresidential
664,241
85,342
1,856,378
62
128
387
16
19
9.24
9.38
9.08
.21
.11
.19
8.06-9.92
9.32-9.65
8.78-9.41
84.8
84.3
66.4
10.3
7.3
24.9
1
Total
2
Fixed rate (thousands of dollars) . . . .
4
6
7
3
20
9
8
U
16
22
9
LARGE B A N K S 1 4
1,646,333
1,242
18
8.76
.12
8.30-9.38
78.5
17.5
Fixed rate (thousands of dollars) . . . .
1-24
25-49
50-99
100-499
500 and over
617,664
3,745
888
*
8.04
9.77
.52
.29
7.10-8.84
11.02-9.92
52.1
79.1
3.2
1.8
*
*
11
*
*
*
1
10
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
611,879
14,754
1
8.03
.63
7.10-8.84
51.9
3.2
8 Floating rate (thousands of dollars) . .
9
1-24
25-49
10
50-99
11
100-499
1?
500 and over
13
1,028,668
4,027
4,915
10,972
77,098
931,656
886
36
75
226
5,036
26
10
9
11
13
28
9.20
9.67
9.54
9.45
9.47
9.17
.10
.20
.18
.10
.09
.11
8.84-9.38
9.38-10.47
9.38-9.92
9.38-9.65
9.27-9.92
8.84-9.38
94.3
80.2
71.3
81.1
92.1
94.9
26.0
2.6
3.8
2.9
9.0
27.9
By type of construction
14 Single family
15 Multifamily
16 Nonresidential
269,433
59,341
1,317,558
782
251
1,769
4
19
21
8.46
9.42
8.79
.41
.16
.15
8.06-9.11
9.32-9.65
8.42-9.38
95.6
94.6
74.3
12.4
2.7
19.2
1 Total
959,629
65
13
9.77
.18
9.38-10.38
60.0
26.0
•>
Fixed rate (thousands of dollars) . . . .
1-24
25-49
50-99
100-499
500 and over
185,742
35,008
33,286
69,412
23,225
32
9
38
80
185
23
9
20
27
19
10.89
11.09
10.33
11.86
9.45
.37
.25
.35
.70
.44
10.14-11.60
10.25-12.13
10.47-10.52
10.52-14.53
7.76-10.47
54.5
76.4
46.5
38.9
62.8
.0
.0
.0
.0
.0
*
*
*
*
*
*
*
Floating rate (thousands of dollars) . .
1-24
25-49
50-99
100-499
500 and over
773,886
49,985
47,785
89,396
198,709
388,010
86
10
34
70
201
1,694
11
9
12
17
8
9.50
10.19
9.72
9.90
9.50
9.29
.07
.15
.09
.15
.14
.13
9.31-9.92
9.38-10.47
9.23-10.38
9.14-10.47
9.11-9.92
9.38-9.41
61.3
77.4
73.3
61.4
60.5
58.1
32.3
1.5
2.3
1.4
13.3
56.8
394,808
26,001
538,820
38
60
133
13
10
14
9.77
9.30
9.79
.16
.11
.26
9.38-10.47
8.77-9.92
9.38-9.92
77.4
60.8
47.2
8.9
17.7
39.0
1 Total
2
3
4
5
6
7
11
OTHER BANKS14
3
4
5
6
7
8
9
10
11
1?
13
By type of construction
14 Single family
15 Multifamily
16 Nonresidential
For notes see end of table.
8
*
A74
4.23
Special Tables • September 1987
TERMS OF LENDING AT COMMERCIAL B A N K S Survey of Loans Made, May 4-8, 1987'—Continued
C. Loans to Farmers 14
Size class of loans (thousands)
Characteristic
All sizes
$10-24
$1-9
$250
and over
$100-249
$50-99
$25-49
ALL BANKS
1 Amount of loans (thousands of dollars)
2 Number of loans
3 Weighted average maturity (months) 3
4 Weighted average interest rate (percent) 4
5
Standard error 5
6
Interquartile range 6
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
7
8
9
10
11
12
Percentage of amount of loans
13 With floating rates
14 Made under commitment
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
15
16
17
18
19
20
993,589
52,023
22.8
124,782
33,606
8.2
154,320
10,685
8.7
147,788
4,187
13.1
132,058
2,053
19.1
124,444
954
10.6
310,197
538
52.5
10.61
.61
9.84-11.83
11.39
.34
10.73-12.21
11.18
.34
10.50-12.10
11.07
.45
10.38-11.95
10.51
.42
9.89-11.35
10.62
.56
9.46-12.00
9.84
.61
9.31-10.02
10.72
9.59
10.94
10.93
11.02
10.00
11.23
10.79
11.46
11.84
9.95
11.67
11.37
10.92
11.25
10.78
10.89
10.21
11.16
10.27
11.21
11.23
10.43
10.35
10.13
9.19
9.72
*
*
*
*
10.49
9.93
9.20
9.95
56.0
52.7
49.6
44.1
44.7
42.9
64.5
42.1
56.0
33.6
84.3
61.1
48.7
70.9
20.7
6.5
45.8
3.9
2.5
20.6
13.2
3.9
72.6
4.2
2.2
4.0
13.4
4.2
71.6
3.6
2.8
4.3
25.1
4.5
45.2
8.4
23.9
21.3
13.3
19.5
*
*
*
*
*
*
14.6
9.9
12.8
45.9
254,080
3,925
8.2
7,227
1,843
7.4
11,850
792
7.5
15,256
461
6.7
23,248
348
6.0
41,874
279
9.6
154,625
203
8.5
9.38
.58
8.78-9.92
10.27
.30
9.73-10.75
9.93
.28
9.31-10.51
9.91
.39
9.38-10.47
9.78
.32
9.29-10.38
9.58
.39
9.00-10.15
9.13
.44
8.51-9.50
9.49
8.64
9.69
10.12
9.77
9.25
10.09
10.56
10.26
10.96
10.50
10.10
95.0
79.5
87.5
71.8
27.3
12.9
29.7
1.0
.7
28.4
14.7
4.0
57.4
5.7
3.5
14.6
739.508
48,098
25.7
*
11.00
*
*
27.0
*
11.03
*
*
*
42.7
56.8
LARGE B A N K S 1 4
1 Amount of loans (thousands of dollars)
2 Number of loans
3 Weighted average maturity (months) 3
4 Weighted average interest rate (percent) 4
5
Standard error 5
6
Interquartile range 6
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
7
8
9
10
11
12
Percentage of amount of loans
13 With floating rates
14 Made under commitment
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
15
16
17
18
19
20
9.71
9.70
9.69
9.76
9.31
*
*
*
*
*
9.97
9.98
9.82
9.53
9.55
*
*
*
*
*
*
*
*
*
*
9.73
9.91
9.83
9.43
9.03
90.2
73.8
93.6
82.2
90.2
85.3
100.0
81.7
95.1
78.6
15.5
26.9
26.8
39.9
25.5
*
*
*
*
*
57.5
38.5
35.4
28.2
24.9
*
*
*
*
*
*
*
*
*
18.0
26.1
28.2
24.9
31.0
117,555
31,763
8.2
142,470
9,893
8.8
132,531
3,726
13.7
108,810
1,705
20.8
82,570
674
10.9
*
11.04
.18
10.02-12.00
11.46
.16
10.77-12.25
11.29
.19
10.52-12.13
11.20
.21
10.50-11.95
10.67
.27
10.01-11.78
11.14
.40
10.38-12.08
*
11.35
10.57
11.18
10.98
11.13
10.41
11.31
10.81
11.52
11.92
9.89
12.10
11.53
10.95
11.34
10.76
OTHER B A N K S 1 4
1 Amount of loans (thousands of dollars)
2 Number of loans
3 Weighted average maturity (months) 3
4 Weighted average interest rate (percent) 4
5
Standard error 5
6
Interquartile range 6
1
8
9
10
11
12
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
*
10.44
11.35
*
11.33
*
*
*
*
10.44
*
*
*
*
11.33
*
*
*
*
*
*
*
10.62
*
For notes see end of table.
Financial Markets
4.23
A75
Continued
C. Loans to Farmers 14 —Continued
Size class of loans (thousands)
Characteristic
All sizes
Percentage of amount of loans
13 With floating rates
14 Made under commitment
15
16
17
18
19
20
By purpose of loan
Feeder livestock
Other livestock
Other current operating expenses
Farm machinery and equipment
Farm real estate
Other
$1-9
42.6
43.5
47.2
42.4
40.9
40.3
18.4
4.3
51.4
4.9
3.1
17.9
13.1
3.9
73.5
4.1
2.1
3.3
13.2
4.3
72.8
3.7
*Fewer than 10 sample loans.
1. The survey of terms of bank lending to business collects data on gross loan
extensions made during the first full business week in the mid-month of each
quarter by a sample of 340 commercial banks of all sizes. A subsample of 250
banks also report loans to farmers. The sample data are blown up to estimate the
lending terms at all insured commercial banks during that week. The estimated
terms of bank lending are not intended for use in collecting the terms of loans
extended over the entire quarter or residing in the portfolios of those banks.
Construction and land development loans include both unsecured loans and loans
secured by real estate. Thus, some of the construction and land development
loans would be reported on the statement of condition as real estate loans and the
remainder as business loans. Mortgage loans, purchased loans, foreign loans, and
loans of less than $1,000 are excluded f r o m the survey.
As of Dec. 31, 1985, assets of most of the large banks were at least $5.5 billion.
For all insured banks total assets averaged $165 million.
2. Beginning with the August 1986 survey respondent banks provide information on the type of base rate used to price each commercial and industrial loan
made during the survey week. This reporting change is reflected in the new
column on the most c o m m o n base pricing rate in table A and footnote 13 from
table B.
3. Average maturities are weighted by loan size and exclude demand loans.
4. Effective (compounded) annual interest rates are calculated from the stated
rate and other terms of the loan and weighted by loan size.
5. The chances are about two out of three that the average rate shown would
differ by less than this amount f r o m the average rate that would be found by a
complete survey of lending at all banks.
$25-49
$10-24
$50-99
61.1
37.5
24.9
*
$250
and over
$100-249
48.6
22.6
*
*
76.4
50.6
*
*
45.9
44.3
71.4
*
*
*
*
*
*
*
3.2
13.3
*
*
*
*
*
*
*
*
*
#
6. The interquartile range shows the interest rate range that e n c o m p a s s e s the
middle 50 percent of the total dollar amount of loans made.
7. The most common base rate is that rate used to price the largest dollar
volume of loans. Base pricing rates include the prime rate (sometimes referred to
as a bank's " b a s i c " or " r e f e r e n c e " rate); the federal funds rate; domestic money
market rates other than the federal funds rate; foreign money market rates; and
other base rates not included in the foregoing classifications.
8. Overnight loans are loans that mature on the following business day.
9. Demand loans have no stated date of maturity.
10. Nominal (not compounded) annual interest rates are calculated from survey
data on the stated rate and other terms of the loan and weighted by loan size.
11. The prime rate reported by each bank is weighted by the volume of loans
extended and then averaged.
12. The proportion of loans made at rates below prime may vary substantially
from the proportion of such loans outstanding in banks' portfolios.
13. 73.4 percent of construction and land development loans were priced
relative to the prime rate.
14. Among banks reporting loans to farmers (Table C), most "large b a n k s "
(survey strata 1 to 3) had over $600 million in total assets, and most " o t h e r b a n k s "
(survey strata 4 to 6) had total assets below $600 million.
The survey of terms of bank lending to farmers now includes loans secured by
farm real estate. In addition, the categories describing the purpose of farm loans
have now been expanded to include " p u r c h a s e or improve farm real e s t a t e . " In
previous surveys, the purpose of such loans was reported as " o t h e r . "
76
Federal Reserve Board of Governors
A L A N GREENSPAN, Chairman
MARTHA R . SEGER
M A N U E L H . JOHNSON, Vice
OFFICE OF BOARD
Chairman
DIVISION
MEMBERS
JOSEPH R. COYNE, Assistant
to the
Board
DONALD J. WINN, Assistant
to the
Board
NORMAND R . V . BERNARD, Special Assistant
LYNN SMITH FOX, Special Assistant
to the
BOB S. MOORE, Special Assistant
LEGAL
WAYNE D . ANGELL
OF RESEARCH
EDWARD C. ETTIN, Deputy
DONALD L. KOHN, Deputy
to the
Board
Board
to the Board
DIVISION
MICHAEL BRADFIELD, General
Counsel
J. VIRGIL MATTINGLY, JR., Deputy General
Counsel
RICHARD M . ASHTON, Associate
General
Counsel
OLIVER IRELAND, Associate
General
Counsel
RICKI R. TIGERT, Assistant
General
Counsel
MARYELLEN A . BROWN, Assistant
to the General
Counsel
AND
STATISTICS
Director
Director
(Monetary Policy and Financial
Markets)
MICHAEL J. PRELL, Deputy
Director
JARED J. ENZLER, Associate
Director
DAVID E . LINDSEY, Associate
Director
ELEANOR J. STOCKWELL, Associate
Director
MARTHA BETHEA, Deputy Associate
Director
THOMAS D . SIMPSON, Deputy Associate
Director
LAWRENCE SLIFMAN, Deputy Associate
Director
PETER A . TINSLEY, Deputy Associate
Director
SUSAN J. LEPPER, Assistant
Director
RICHARD D . PORTER, Assistant
Director
MARTHA S. SCANLON, Assistant
Director
JOYCE K . ZICKLER, Assistant
Director
LEVON H . GARABEDIAN, Assistant
Director
(Administration)
OFFICE OF THE
SECRETARY
DIVISION
WILLIAM W . WILES,
DIVISION OF
CONSUMER
AND COMMUNITY
AFFAIRS
GRIFFITH L . GARWOOD,
GLENN E. LONEY, Assistant
ELLEN MALAND, Assistant
DOLORES S. SMITH, Assistant
Director
Director
Director
Director
OFFICE OF THE INSPECTOR
BRENT L . BOWEN, Inspector
OF INTERNATIONAL
FINANCE
Secretary
BARBARA R. LOWREY, Associate
Secretary
JAMES MCAFEE, Associate
Secretary
EDWIN M . TRUMAN, Staff
Director
LARRY J. PROMISEL, Senior Associate
Director
CHARLES J. SIEGMAN, Senior Associate
Director
DAVID H. HOWARD, Deputy Associate
Director
ROBERT F. GEMMILL, Staff
Adviser
DONALD B. ADAMS, Assistant
Director
PETER HOOPER III, Assistant
Director
KAREN H . JOHNSON, Assistant
Director
RALPH W . SMITH, JR., Assistant
Director
DIVISION OF BANKING
SUPERVISION AND
REGULATION
GENERAL
General
WILLIAM TAYLOR, Staff
Director
FRANKLIN D . DREYER, Deputy
Director'
DON E. KLINE, Associate
Director
FREDERICK M . STRUBLE, Associate
Director
WILLIAM A . RYBACK, Deputy Associate
Director
STEPHEN C. SCHEMERING, Deputy Associate
Director
RICHARD SPILLENKOTHEN, Deputy Associate
Director
HERBERT A . BIERN, Assistant
Director
JOE M. CLEAVER, Assistant
Director
ANTHONY CORNYN, Assistant
Director
JAMES I. GARNER, Assistant
Director
JAMES D . GOETZINGER, Assistant
Director
MICHAEL G. MARTINSON, Assistant
Director
ROBERT S. PLOTKIN, Assistant
Director
SIDNEY M . SUSSAN, Assistant
Director
LAURA M. HOMER, Securities
Credit
Officer
1. On loan from the Federal Reserve Bank of Chicago.
All
and Official Staff
H . ROBERT HELLER
E D W A R D W . K E L L E Y , JR.
OFFICE OF
STAFF DIRECTOR
FOR
S. DAVID FROST, Staff
Director
EDWARD T. MULRENIN, Assistant
Staff
PORTIA W . THOMPSON, Equal Employment
Programs
DIVISION
OFFICE OF STAFF DIRECTOR
FOR
FEDERAL RESERVE BANK
ACTIVITIES
MANAGEMENT
THEODORE E. ALLISON, Staff
Officer
OF
DIVISION OF FEDERAL
BANK
OPERATIONS
PERSONNEL
DAVID L. SHANNON,
CONTROLLER
FLORENCE M . Y O U N G ,
GEORGE E . L I V I N G S T O N ,
Controller
DIVISION
SERVICES
ROBERT E . FRAZIER,
Director
GEORGE M . LOPEZ, Assistant
DAVID L . WILLIAMS, Assistant
Director
Director
OFFICE OF THE EXECUTIVE
INFORMATION RESOURCES
DIRECTOR FOR
MANAGEMENT
ALLEN E . BEUTEL, Executive
Director
STEPHEN R. MALPHRUS, Associate
Director
DIVISION
SYSTEMS
OF HARDWARE
BRUCE M . BEARDSLEY,
AND
SOFTWARE
Director
THOMAS C. JUDD, Assistant
Director
ELIZABETH B. RIGGS, Assistant
Director
ROBERT J. ZEMEL, Assistant
Director
DIVISION OF APPLICATIONS
STATISTICAL
SERVICES
WILLIAM R . JONES,
DEVELOPMENT
Director
DAY W. RADEBAUGH, Assistant
Director
RICHARD C. STEVENS, Assistant
PATRICIA A . WELCH, Assistant
Director
Director
Director
ELLIOTT C. MCENTEE, Associate
Director
DAVID L . ROBINSON, Associate
Director
C. WILLIAM SCHLEICHER, JR., Associate
Director
CHARLES W . BENNETT, Assistant
Director
JACK DENNIS, JR., Assistant
Director
EARL G. HAMILTON, Assistant
Director
JOHN H . PARRISH, Assistant
Director
Director
OF SUPPORT
RESERVE
CLYDE H . FARNSWORTH, JR.,
JOHN R. WEIS, Assistant
Director
CHARLES W . WOOD, Assistant
Director
OFFICE OF THE
Director
Director
Opportunity
AND
Adviser
78
Federal Reserve Bulletin • September 1987
Federal Open Market Committee
FEDERAL
OPEN MARKET
COMMITTEE
MEMBERS
A L A N GREENSPAN,
WAYNE D.
EDWARD G.
E. GERALD CORRIGAN, Vice
Chairman
ANGELL
BOEHNE
ROBERT H . B O Y K I N
H . ROBERT H E L L E R
E D W A R D W . K E L L E Y , JR.
M A N U E L H . JOHNSON
MARTHA R . SEGER
SILAS K E E H N
GARY H . STERN
ALTERNATE
ROBERT P . BLACK
MEMBERS
ROBERT P . FORRESTAL
ROBERT T . PARRY
THOMAS M . TIMLEN
STAFF
DONALD L. KOHN, Secretary
and Staff
Adviser
NORMAND R . V . BERNARD, Assistant
Secretary
ROSEMARY R. LONEY, Deputy Assistant
Secretary
MICHAEL BRADFIELD, General
Counsel
JAMES H. OLTMAN, Deputy General
Counsel
EDWIN M. TRUMAN, Economist
(International)
PETER FOUSEK, Associate
Economist
RICHARD W . LANG, Associate
Economist
DAVID E . LINDSEY, Associate
MICHAEL J. PRELL, Associate
ARTHUR J. ROLNICK, Associate
HARVEY ROSENBLUM, Associate
KARL A . SCHELD, Associate
CHARLES J. SIEGMAN, Associate
THOMAS D . SIMPSON, Associate
Economist
Economist
Economist
Economist
Economist
Economist
Economist
PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account
SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account
FEDERAL
ADVISORY
COUNCIL
JOHN G . M E D L I N J R . ,
JULIEN L . MCCALL, Vice
President
President
J O H N F . M C G I L L I C U D D Y , D E W A L T H . A N K E N Y , J R . , A N D F . PHILLIPS G I L T N E R ,
JOHN P. LA WARE, First District
JOHN F. MCGILLICUDDY, S e c o n d District
SAMUEL A . MCCULLOUGH, Third District
JULIEN L . MCCALL, F o u r t h District
JOHN G. MEDLIN, JR., F i f t h District
BENNETT A . BROWN, Sixth District
Directors
CHARLES T. FISHER, III, S e v e n t h District
DONALD N . BRANDIN, Eighth District
DEWALT H . ANKENY, JR., N i n t h District
F. PHILLIPS GILTNER, T e n t h District
GERALD W . FRONTERHOUSE, E l e v e n t h District
JOHN D . MANGELS, T w e l f t h District
H E R B E R T V . P R O C H N O W , SECRETARY
W I L L I A M J. KORSVIK, ASSOCIATE SECRETARY
Chairman
79
and Advisory Councils
CONSUMER
ADVISORY
COUNCIL
EDWARD N. LANGE, Seattle, Washington, Chairman
STEVEN W. HAMM, Columbia, South Carolina, Vice Chairman
EDWIN B. BROOKS, JR., R i c h m o n d , Virginia
JONATHAN A . B R O W N , W a s h i n g t o n ,
D.C.
JUDITH N . BROWN, E d i n a , M i n n e s o t a
MICHAEL S. CASSIDY, N e w Y o r k , N e w Y o r k
JOHN M. KOLESAR, C l e v e l a n d , O h i o
ALAN B . LERNER, D a l l a s , T e x a s
FRED S. MCCHESNEY, C h i c a g o , Illinois
RICHARD L. D . MORSE, Manhattan, K a n s a s
THERESA F A I T H C U M M I N G S , S p r i n g f i e l d , I l l i n o i s
HELEN E. NELSON, Mill Valley, California
RICHARD B . DOBY, D e n v e r , C o l o r a d o
SANDRA R. PARKER, R i c h m o n d , Virginia
JOSEPH L . PERKOWSKI, C e n t e r v i l l e , M i n n e s o t a
BRENDA L . SCHNEIDER, Detroit, M i c h i g a n
JANE SHULL, Philadelphia, P e n n s y l v a n i a
RICHARD H . F I N K , W a s h i n g t o n ,
D.C.
NEIL J. FOGARTY, Jersey City, New Jersey
STEPHEN GARDNER, D a l l a s , T e x a s
KENNETH A . HALL, P i c a y u n e , Mississippi
ROBERT J. HOBBS, B o s t o n , M a s s a c h u s e t t s
TED L. SPURLOCK, Dallas, Texas
MEL R. STILLER, Boston, Massachusetts
CHRISTOPHER J. SUMNER, Salt Lake City, Utah
RAMON E. JOHNSON, Salt Lake City, Utah
ROBERT W. JOHNSON, West Lafayette, Indiana
EDWARD J. WILLIAMS, C h i c a g o , Illinois
MICHAEL ZOROYA, St. L o u i s , Missouri
ELENA G. HANGGI, Little Rock, Arkansas
THRIFT INSTITUTIONS
ADVISORY
COUNCIL
MICHAEL R. WISE, Denver, Colorado, President
JAMIE J. JACKSON, Houston, Texas, Vice President
GERALD M . CZARNECKI, M o b i l e , A l a b a m a
JOHN C. DICUS, T o p e k a , K a n s a s
BETTY GREGG, P h o e n i x , A r i z o n a
THOMAS A. KINST, Hoffman Estates, Illinois
RAY MARTIN, Los Angeles, California
DONALD F. MCCORMICK, L i v i n g s t o n , N e w J e r s e y
JANET M. PAVLISKA, Arlington, M a s s a c h u s e t t s
HERSCHEL ROSENTHAL, Miami, Florida
WILLIAM G. SCHUETT, M i l w a u k e e , W i s c o n s i n
GARY L. SIRMON, Walla Walla, Washington
80
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LAWS,
SERVICE C H A R G E S AS A S O U R C E OF B A N K
AND
THEIR
IMPACT ON
CONSUMERS,
by
by
INCOME
Glenn
B.
L.
Canner and Robert D. Kurtz. August 1985. 31 pp. Out
of print.
1 2 8 . U . S . E X P E R I E N C E W I T H E X C H A N G E M A R K E T INTER-
1 4 6 . T H E R O L E OF THE PRIME R A T E IN THE PRICING OF
VENTION:
1975,
JANUARY-MARCH
by
Margaret
Greene. August 1984. 16 pp. Out of print.
129.
VENTION: S E P T E M B E R 1 9 7 7 - D E C E M B E R 1 9 7 9 , b y M a r -
B U S I N E S S L O A N S BY COMMERCIAL B A N K S ,
garet L. Greene. October 1984. 40 pp. Out of print.
by Thomas F. Brady. November 1985. 25 pp.
U . S . E X P E R I E N C E W I T H E X C H A N G E M A R K E T INTER-
1 4 7 . REVISIONS
IN
THE
MONETARY
SERVICES
1977-84,
(DIVISIA)
VENTION: OCTOBER I 9 8 O - O C T O B E R 1 9 8 1 , b y M a r g a r e t
I N D E X E S OF THE M O N E T A R Y A G G R E G A T E S , b y
L. Greene. August 1984. 36 pp.
T. Farr and Deborah Johnson. December 1985. 42 pp.
1 3 0 . E F F E C T S OF E X C H A N G E R A T E V A R I A B I L I T Y ON
Helen
IN-
1 4 8 . T H E MACROECONOMIC A N D SECTORAL E F F E C T S OF
TERNATIONAL T R A D E A N D O T H E R ECONOMIC V A R I A -
THE E C O N O M I C RECOVERY T A X A C T : S O M E S I M U L A -
BLES: A R E V I E W OF THE L I T E R A T U R E , b y V i c t o r i a S .
TION RESULTS, by Flint Brayton and Peter B. Clark.
December 1985. 17 pp.
Farrell with Dean A. DeRosa and T. Ashby McCown.
January 1984. Out of print.
1 4 9 . T H E O P E R A T I N G P E R F O R M A N C E OF A C Q U I R E D FIRMS
IN B A N K I N G
1 3 1 . C A L C U L A T I O N S OF PROFITABILITY FOR U . S . D O L L A R DEUTSCHE
MARK
INTERVENTION,
by
Laurence
Jacobson. October 1983. 8 pp.
132. T I M E - S E R I E S
TWEEN
STUDIES
EXCHANGE
OF
RATES
THE
AND
150.
RELATIONSHIP
INTERVENTION:
BEA
BEFORE A N D AFTER A C Q U I S I T I O N ,
by
Stephen A. Rhoades. April 1986. 32 pp.
R.
STATISTICAL C O S T A C C O U N T I N G M O D E L S IN B A N K ING: A
REEXAMINATION
A N D AN A P P L I C A T I O N ,
by
John T. Rose and John D. Wolken. May 1986. 13 pp.
82
151. RESPONSES
PRICING
TO
FROM
DEREGULATION:
1983
THROUGH
RETAIL
1985,
by
DEPOSIT
Patrick
I.
Mahoney, Alice P. White, Paul F. O'Brien, and Mary
M. McLaughlin. January 1987. 30 pp.
1 5 2 . D E T E R M I N A N T S OF C O R P O R A T E M E R G E R A C T I V I T Y : A
REVIEW
OF THE
LITERATURE,
by
Mark
J.
War-
shawsky. April 1987. 18 pp.
REPRINTS OF BULLETIN
ARTICLES
Most of the articles reprinted do not exceed 12 pages.
Limit of 10 copies
Foreign Experience with Targets for Money Growth. 10/83.
Intervention in Foreign Exchange Markets: A Summary of
Ten Staff Studies. 11/83.
A Financial Perspective on Agriculture. 1/84.
Survey of Consumer Finances, 1983. 9/84.
Bank Lending to Developing Countries. 10/84.
Survey of Consumer Finances, 1983: A Second Report.
12/84.
Union Settlements and Aggregate Wage Behavior in the
1980s. 12/84.
The Thrift Industry in Transition. 3/85.
A Revision of the Index of Industrial Production. 7/85.
Financial Innovation and Deregulation in Foreign Industrial
Countries. 10/85.
Recent Developments in the Bankers Acceptance Market.
1/86.
The Use of Cash and Transaction Accounts by American
Families. 2/86.
Financial Characteristics of High-Income Families. 3/86.
Prices, Profit Margins, and Exchange Rates. 6/86.
Agricultural Banks under Stress. 7/86.
Foreign Lending by Banks: A Guide to International and
U.S. Statistics. 10/86.
Recent Developments in Corporate Finance. 11/86.
U.S. International Transactions in 1986. 5/87.
Measuring the Foreign-Exchange Value of the Dollar. 6/87
83
Index to Statistical Tables
References
are to pages
A3-A75
although
the prefix 'A"
ACCEPTANCES, bankers (See Bankers acceptances)
Agricultural loans, commercial banks, 19, 20, 74
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, 70-73
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, 70-72
Weekly reporting banks, 19-21
Commercial banks
Assets and liabilities, 18-20, 70-72
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
Terms of Lending, 70-75
Time and savings deposits, 3
Commercial paper, 23, 24, 37
Condition statements (See Assets and liabilities)
Construction, 44, 49, 73
Consumer installment credit, 40, 41
Consumer prices, 44, 50
Consumption expenditures, 51, 52
Corporations
Nonfinancial, assets and liabilities, 36
Profits and their distribution, 35
Security issues, 34, 65
Cost of living (See Consumer prices)
Credit unions, 26, 40. (See also Thrift institutions)
Currency and coin, 18
Currency in circulation, 4, 13
Customer credit, stock market, 25
DEBITS to deposit accounts, 15
Debt (See specific types of debt or
Demand deposits
Banks, by classes, 18-21
securities)
is omitted
in this index
Demand deposits—Continued
Ownership by individuals, partnerships, and
corporations, 22
Turnover, 15
Depository institutions
Reserve requirements, 8
Reserves and related items, 3, 4, 5, 12
Deposits (See also specific types)
Banks, by classes, 3, 18-20, 21
Federal Reserve Banks, 4, 10
Turnover, 15
Discount rates at Reserve Banks and at foreign central
banks and foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 35
EMPLOYMENT, 45
Eurodollars, 24
FARM mortgage loans, 39
Federal agency obligations, 4, 9, 10, 11, 31, 32
Federal credit agencies, 33
Federal finance
Debt subject to statutory limitation, and types and
ownership of gross debt, 30
Receipts and outlays, 28, 29
Treasury financing of surplus, or deficit, 28
Treasury operating balance, 28
Federal Financing Bank, 28, 33
Federal funds, 6, 17, 19, 20, 21, 24, 28
Federal Home Loan Banks, 33
Federal Home Loan Mortgage Corporation, 33, 38, 39
Federal Housing Administration, 33, 38, 39
Federal Land Banks, 39
Federal National Mortgage Association, 33, 38, 39
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities held, 4, 10, 11, 30
Federal Reserve credit, 4, 5, 10, 11
Federal Reserve notes, 10
Federal Savings and Loan Insurance Corporation insured
institutions, 26
Federally sponsored credit agencies, 33
Finance companies
Assets and liabilities, 37
Business credit, 37
Loans, 40, 41
Paper, 23, 24
Financial institutions
Loans to, 19, 20, 21
Selected assets and liabilities, 26
Float, 4
Flow of funds, 42, 43
Foreign banks, assets and liabilities of U.S. branches and
agencies, 21
Foreign currency operations, 10
Foreign deposits in U.S. banks, 4, 10, 19, 20
Foreign exchange rates, 68
Foreign trade, 54
Foreigners
Claims on, 55, 57, 60, 61, 62, 64
Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66
84
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
Commercial banks, 70-75
Consumer installment credit, 41
Federal Reserve Banks, 7
Foreign central banks and foreign countries, 67
Money and capital markets, 24
Mortgages, 38
Prime rate, 23
International capital transactions of United States, 53-67
International organizations, 57, 58, 60, 63, 64
Inventories, 51
Investment companies, issues and assets, 35
Investments (See also specific types)
Banks, by classes, 18, 19, 20, 21, 26
Commercial banks, 3, 16, 18-20, 39
Federal Reserve Banks, 10, 11
Financial institutions, 26, 39
LABOR force, 45
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Banks, by classes, 18-20
Commercial banks, 3, 16, 18-20, 70-75
Federal Reserve Banks, 4, 5, 7, 10, 11
Financial institutions, 26, 39
Insured or guaranteed by United States, 38, 39
MANUFACTURING
Capacity utilization, 46
Production, 46, 48
Margin requirements, 25
Member banks (See also Depository institutions)
Federal funds and repurchase agreements, 6
Reserve requirements, 8
Mining production, 48
Mobile homes shipped, 49
Monetary and credit aggregates, 3 , 1 2
Money and capital market rates, 24
Money stock measures and components, 3, 13
Mortgages (See Real estate loans)
Mutual funds, 35
Mutual savings banks, (See Thrift institutions)
NATIONAL defense outlays, 29
National income, 51
OPEN market transactions, 9
PERSONAL income, 52
Prices
Consumer and producer, 44, 50
Stock market, 25
Prime rate, 23
Producer prices, 44, 50
Production, 44, 47
Profits, corporate, 35
REAL estate loans
Banks, by classes, 16, 19, 20, 39
Real estate loans—Continued
Financial institutions, 26
Terms, yields, and activity, 38
Type of holder and property mortgaged, 39
Repurchase agreements, 6, 17, 19, 20, 21
Reserve requirements, 8
Reserves
Commercial banks, 18
Depository institutions, 3, 4, 5, 12
Federal Reserve Banks, 10
U.S. reserve assets, 54
Residential mortgage loans, 38
Retail credit and retail sales, 40, 41, 44
SAVING
Flow of funds, 42, 43
National income accounts, 51
Savings and loan associations, 26, 39, 40, 42. (See also
Thrift institutions)
Savings banks, 26, 39, 40
Savings deposits (See Time and savings deposits)
Securities (See 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, selected statistics, 25
Stocks (See also Securities)
New issues, 34
Prices, 25
Student Loan Marketing Association, 33
TAX receipts, federal, 29
Thrift institutions, 3. (See also Credit unions and Savings
and loan associations)
Time and savings deposits, 3, 13, 17, 18, 19, 20, 21
Trade, foreign, 54
Treasury cash, Treasury currency, 4
Treasury deposits, 4, 10, 28
Treasury operating balance, 28
UNEMPLOYMENT, 45
U.S. government balances
Commercial bank holdings, 18, 19, 20
Treasury deposits at Reserve Banks, 4, 10, 28
U.S. government securities
Bank holdings, 18-20, 21, 30
Dealer transactions, positions, and financing, 32
Federal Reserve Bank holdings, 4, 10, 11, 30
Foreign and international holdings and transactions, 10,
30, 66
Open market transactions, 9
Outstanding, by type and holder, 26, 30
Rates, 24
U.S. international transactions, 53-67
Utilities, production, 48
VETERANS Administration, 38, 39
WEEKLY reporting banks, 19-21
Wholesale (producer) prices, 44, 50
YIELDS (See Interest rates)
85
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK, Chairman
Deputy Chairman
branch, or facility
Zip
BOSTON*
02106™ Joseph A. Baute
George N. Hatsopoulos
NEW YORK*
10045
Buffalo
14240
President
First Vice President
Frank E. Morris
Robert W. Eisenmenger
John R. Opel
Virginia A. Dwyer
Mary Ann Lambertsen
E. Gerald Corrigan
Thomas M. Timlen
John T. Keane
PHILADELPHIA
19105
Nevius M. Curtis
George E. Bartol III
Edward G. Boehne
William H. Stone, Jr.
CLEVELAND*
44101
Charles W. Parry
John R. Miller
Owen B. Butler
James E. Haas
vacancy
William H. Hendricks
Leroy T. Canoles, Jr.
Robert A. Georgine
Gloria L. Johnson
Wallace J. Jorgenson
Robert P. Black
Jimmie R. Monhollon
Bradley Currey, Jr.
Larry L. Prince
A. G. Trammell
Andrew A. Robinson
Robert D. Apelgren
C. Warren Neel
Caroline K. Theus
Robert P. Forrestal
Jack Guynn
Robert J. Day
Marcus Alexis
Robert E. Brewer
Silas Keehn
Daniel M. Doyle
W.L. Hadley Griffin
Robert L. Virgil, Jr.
James R. Rodgers
Raymond M. Burse
Katherine H. Smythe
Thomas C. Melzer
Joseph P. Garbarini
John B. Davis, Jr.
Michael W. Wright
Warren H. Ross
Gary H. Stern
Thomas E. Gainor
Irvine O. Hockaday, Jr.
Robert G. Lueder
James E. Nielson
Patience S. Latting
Kenneth L. Morrison
Roger Guffey
Henry R. Czerwinski
Bobby R. Inman
Hugh G. Robinson
Mary Carmen Saucedo
Walter M. Mischer, Jr.
Robert F. McDermott
Robert H. Boy kin
William H. Wallace
Fred W. Andrew
Robert F. Erburu
Richard C. Seaver
Paul E. Bragdon
Don M. Wheeler
John W. Ellis
Robert T. Parry
Carl E. Powell
Cincinnati
Pittsburgh
45201
15230
RICHMOND*
23219
Baltimore
21203
Charlotte
28230
Culpeper
Communications
and Records Center 22701
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
New Orleans
30303
..35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
72203
40232
Memphis
38101
MINNEAPOLIS
Helena
KANSAS CITY
55480
59601
64198
Denver
Oklahoma
City
80217
73125
Omaha
68102
DALLAS
75222
El
Paso
Houston
79999
77252
San Antonio
78295
SAN FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Charles A. Cerino 1
Harold J. Swart1
Robert D. McTeer, Jr.1
Albert D. Tinkelenberg 1
John G. Stoides 1
Delmar Harrison1
Fred R. Herr1
James D. Hawkins 1
Patrick K. Barron1
Donald E. Nelson
Henry H. Bourgaux
Roby L. Sloan 1
John F. Breen
James E. Conrad
Paul I. Black, Jr.
Robert F. McNellis
Enis Alldredge, Jr.
William G. Evans
Robert D. Hamilton
Tony J. Salvaggio 1
Sammie C. Clay
J. Z. Rowe 1
Thomas H. Robertson
Thomas C. Warren2
Angelo S. Carella1
E. Ronald Liggett 1
Gerald R. Kelly 1
* Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, N e w Jersey 07016;
Jericho, New York 11753; Utica at Oriskany, N e w York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West
Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202.
1. Senior Vice President.
2. Executive Vice President.
86
The Federal Reserve System
Boundaries of Federal Reserve Districts and Their Branch Territories
'•tr/e
Helena
Minneapolis^
[T)\
t„J
®)
£
\
v
jS&^Sot*
Omaha
jacks**"11'
.Hew Orleans
April 1984
LEGEND
Boundaries of Federal Reserve Districts
®
Federal Reserve Bank Cities
Boundaries of Federal Reserve Branch
Territories
•
Federal Reserve Branch Cities
Federal Reserve Bank Facility
Q
Board of Governors of the Federal Reserve
System
Publications of Interest
FEDERAL RESERVE
REGULATORY
SERVICE
To promote public understanding of its regulatory
functions, the Board publishes the Federal Reserve
Regulatory Service, a three-volume looseleaf service
containing all Board regulations and related statutes,
interpretations, policy statements, rulings, and staff
opinions. For those with a more specialized interest in
the Board's regulations, parts of this service are
published separately as handbooks pertaining to monetary policy, securities credit, and consumer affairs.
These publications are designed to help those who
must frequently refer to the Board's regulatory materials. They are updated at least monthly, and each
contains conversion tables, citation indexes, and a
subject index.
The Monetary Policy and Reserve Requirements
Handbook contains Regulations A, D, and Q plus
related materials. For convenient reference, it also
contains the rules of the Depository Institutions
Deregulation Committee.
The Securities Credit Transactions Handbook contains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together
with all related statutes, Board interpretations, rulings, and staff opinions. Also included is the Board's
list of OTC margin stocks.
The Consumer and Community Affairs Handbook
contains Regulations B, C, E, M, Z, AA, and BB and
associated materials.
For domestic subscribers, the annual rate is $200 for
the Federal Reserve Regulatory Service and $75 for
each handbook. For subscribers outside the United
States, the price including additional air mail costs is
$250 for the Service and $90 for each Handbook. All
subscription requests must be accompanied by a check
or money order payable to Board of Governors of the
Federal Reserve System. Orders should be addressed
to Publications Services, Mail Stop 138, Federal Reserve Board, 20th Street and Constitution Avenue,
N.W., Washington, D.C. 20551.
Publications of Interest
FEDERAL RESERVE
PUBLICATIONS
CONSUMER
CREDIT
The Federal Reserve Board publishes a series of
pamphlets covering individual credit laws and topics,
as pictured below. The series includes such subjects as
how the Equal Credit Opportunity Act protects women against discrimination in their credit dealings, how
to use a credit card, and how to use Truth in Lending
information to compare credit costs.
Fair
Credit
Billing
What
TVuth In
Lending
Means
ToYou
The Board also publishes the Consumer Handbook
to Credit Protection Laws, a complete guide to consumer credit protections. This 44-page booklet explains how to use the credit laws to shop for credit,
apply for it, keep up credit ratings, and complain about
an unfair deal.
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.
@FedFRASER